8-KLeadership ChangesExhibits & Filings

CITIZENS FINANCIAL GROUP INC/RI 8-K Report, Executive Changes (Mar 25, 2015)

Filed March 25, 2015For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) filed an 8-K on March 25, 2015, announcing a significant leadership appointment to bolster its commercial banking division. Donald H. McCree, a seasoned executive with 31 years of experience at JPMorgan Chase, was appointed Vice Chairman and Head of Commercial Banking, effective September 1, 2015. This appointment signals a strategic focus on strengthening the company's commercial operations, leveraging McCree's extensive background in areas like corporate banking and global treasury services. The filing details his compensation package, including a substantial base salary, guaranteed variable compensation for 2015, and a significant target bonus opportunity for subsequent years. Investors should note the provisions for termination and change-in-control scenarios, as well as McCree's immediate credit for five years of service for retirement plan eligibility.

Key Highlights

  • 1Donald H. McCree appointed Vice Chairman and Head of Commercial Banking, effective September 1, 2015.
  • 2McCree brings 31 years of experience from JPMorgan Chase, including leadership roles in corporate banking and global treasury services.
  • 3Initial base salary set at $700,000, with a guaranteed variable compensation of $869,260 for 2015.
  • 4Target bonus opportunity for years after 2015 is set at $2,500,000, subject to company discretion and performance metrics.
  • 5Employment agreement includes provisions for termination without cause and in the event of a change in control.
  • 6McCree will be credited with five years of service for retirement eligibility upon commencement of employment.
  • 7An annual gross housing allowance of $100,000 is provided for 2015 through 2017.

Frequently Asked Questions

This filing is important because it announces the appointment of a key executive, Donald H. McCree, to lead the Commercial Banking division. His extensive experience from a major competitor like JPMorgan Chase suggests a strategic move by CFG to strengthen and grow its commercial operations, which is a critical revenue-generating segment for a financial institution.

Mr. McCree's compensation includes an initial annual base salary of $700,000, a guaranteed variable compensation award of $869,260 for 2015, and a target bonus opportunity of $2,500,000 for subsequent years. He also receives an annual housing allowance of $100,000 for three years and immediate credit for five years of service for retirement plan eligibility.

The agreement provides for a minimum of 26 weeks of base salary and his guaranteed 2015 variable compensation if terminated by the Company without cause. In the event of a change in control of the Company during 2016, he is entitled to an amount equal to 100% of his base salary and target bonus opportunity. Both scenarios are contingent on his execution of a release of claims.

Mr. McCree's appointment is effective September 1, 2015, and he entered into the employment agreement on March 23, 2015. He is subject to restrictive covenants for twelve months post-termination, prohibiting solicitation of employees and customers, and a perpetual confidentiality covenant. His employment is at-will, but he must provide 90 days' notice of resignation.