What is the primary purpose of these revised incentive programs?

The primary purpose is to align the interests of TFC's executive officers more closely with the short-term and long-term interests of shareholders by tying compensation to key financial performance metrics and strategic goals.

What happens if the company doesn't meet the minimum ROATCE target for the long-term incentive plan?

If Truist Financial Corporation does not meet a minimum threshold of ROATCE for the three-year performance period, no payments will be made on the performance-based awards under the long-term incentive program.

Are there any protections in place against executives receiving bonuses under poor company performance?

Yes, all awards are subject to the company's clawback features and can be forfeited if the Compensation Committee determines that the company has negative aggregate operating income or experiences a significant negative risk outcome during the vesting period.

TRUIST FINANCIAL CORP 8-K: Leadership Changes

Q: What specific financial metrics will determine executive bonuses under the new programs?

The annual incentive program will be based on Earnings Per Share (EPS) and Return on Average Assets (ROAA), plus a qualitative assessment of strategic priorities. The long-term incentive program will focus on Relative Return on Average Common Equity and Relative Return on Average Tangible Common Equity (ROATCE).

Summary

Truist Financial Corporation (TFC) announced on February 27, 2020, via an 8-K filing, revisions to its annual and long-term incentive programs for its executive officers, effective February 24, 2020. These changes are designed to better align executive compensation with shareholder interests and key financial performance drivers. The revised programs are administered under the Company's 2012 Incentive Plan and aim to foster sustained shareholder value through performance-based metrics. The annual incentive program will be tied to Earnings Per Share (EPS) and Return on Average Assets (ROAA), along with a qualitative assessment of strategic priorities. The long-term incentive program, with a three-year performance period, will consist of a mix of Performance Share Units (PSUs) at 40%, Long-Term Incentive Plan (LTIP) awards at 25%, and Restricted Stock Units (RSUs) at 35%. Payouts for PSUs and LTIP are contingent on achieving specific Relative Return on Average Common Equity and Relative Return on Average Tangible Common Equity (ROATCE) targets, with a minimum ROATCE threshold required for any payout. RSUs will vest over four years, and all awards are subject to clawback provisions and potential forfeiture under adverse financial or risk outcomes.

Key Highlights

1TFC revised its executive compensation programs to better align with shareholder value.
2Annual incentives will be based on Earnings Per Share (EPS), Return on Average Assets (ROAA), and strategic priorities.
3Long-term incentives (3-year period) will be comprised of 40% PSUs, 25% LTIP, and 35% RSUs.
4Long-term incentive payouts are linked to Relative Return on Average Common Equity and Relative Return on Average Tangible Common Equity (ROATCE).
5A minimum ROATCE threshold must be met for long-term incentive payments.
6RSUs will vest over a four-year period.
7All incentive awards are subject to clawback policies and potential forfeiture under negative financial performance or risk events.

TRUIST FINANCIAL CORP 8-K Report, Executive Changes (Feb 28, 2020)

Summary

Key Highlights

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