How does the RSU revision affect potential payouts?

The revision primarily impacts the fee revenue growth metric. The updated payout chart shows significantly lower performance thresholds (e.g., 1.0% for no payout, 4.0% for threshold payout) and a lower maximum payout (7.0% for maximum payout) compared to the original targets that included the BBH acquisition's anticipated revenue.

Are all performance metrics for the RSUs affected?

No, only the fee revenue growth metric was revised. The other two core performance metrics, pre-tax margin and return on average common equity, as well as the overall relative total shareholder return modifier, remain unchanged.

What are the key changes to the company's By-laws?

The By-laws were amended to enhance procedural rules and disclosure requirements for shareholders wishing to nominate directors or submit other business proposals at shareholder meetings. This includes stricter information requirements from shareholders and their associates, standardized questionnaires for nominees, and updated proxy solicitation rules and deadlines.

When will the changes to the advance notice deadline for shareholder proposals take effect?

The extended advance notice deadline (90-120 days prior to the anniversary of the previous year's annual meeting) will apply to annual meetings beginning in 2024. The deadline for the 2023 annual meeting remains unchanged.

STT/STT-PG 8-K: Leadership Changes & Corporate Changes

Q: Why were the performance-based RSUs revised?

The performance-based RSUs were revised because State Street Corporation mutually agreed to terminate its proposed acquisition of Brown Brothers Harriman & Co.'s Investor Services business. The original RSU grant had incorporated anticipated revenue growth from this acquisition, which is no longer relevant.

Summary

State Street Corporation (STT) filed an 8-K on December 16, 2022, detailing two primary items. First, the Human Resources Committee revised the performance-based restricted stock units (RSUs) granted in early 2022. This adjustment is a direct consequence of the company's decision to terminate the proposed acquisition of Brown Brothers Harriman & Co.'s Investor Services business. Specifically, the fee revenue growth metric within the RSUs has been recalibrated to exclude the anticipated revenue from the now-canceled acquisition, lowering the performance thresholds and maximum payout potential for this component. Second, the company's Board of Directors approved an amendment and restatement of its By-laws, effective immediately. These amendments enhance procedural mechanics and disclosure requirements for shareholder nominations of directors and proposals of other business. Key changes include stricter disclosure and representation requirements for shareholders and their associated persons, standardized questionnaires and interview requirements for nominees, and updated provisions for soliciting proxies related to director nominations. The advance notice deadline for shareholder nominations and proposals for annual meetings will be extended starting with the 2024 annual meeting.

Key Highlights

1Performance-based RSUs revised due to termination of BBH acquisition, impacting fee revenue growth targets.
2Fee revenue growth metric for RSUs has significantly lower thresholds and maximum payout post-revision.
3Other RSU performance metrics (pre-tax margin, ROAE) and the total shareholder return modifier remain unchanged.
4Company's By-laws amended and restated, effective immediately.
5By-laws enhancements focus on shareholder director nominations and business proposals.
6Increased disclosure and procedural requirements for shareholders proposing nominees or business.
7Advance notice deadline for shareholder nominations and proposals will be extended for annual meetings starting 2024.

STATE STREET CORP 8-K Report, Executive Changes (Dec 16, 2022)

Summary

Key Highlights

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