8-KLeadership ChangesExhibits & Filings

TRUIST FINANCIAL CORP 8-K Report, Executive Changes (Aug 30, 2024)

Filed August 30, 2024For Securities:TFCTFC-POTFC-PRTFC-PI

Summary

Truist Financial Corporation (TFC) announced on August 29, 2024, an update to its 2024 executive compensation program, including the grant of one-time equity awards, termed 'Leadership Awards', to its Chief Financial Officer, Michael B. Maguire, and Chief Consumer and Small Business Banking Officer, Dontá L. Wilson. These awards, each with a grant date fair value of $4,500,000, are performance-based and entirely in the form of performance share units (PSUs). They are designed to retain key leadership critical to capitalizing on opportunities arising from the previously disclosed sale of its remaining interest in Truist Insurance Holdings, LLC (TIH transaction) and subsequent balance sheet repositioning. The Leadership Awards are contingent upon the company meeting minimum capital requirements and a modifier based on total shareholder return (TSR) relative to the KBW Nasdaq Bank Index over a three-year performance period (September 1, 2024, to August 31, 2027). The TSR modifier can adjust payouts between 75% and 125% of target, and the Compensation and Human Capital Committee retains discretion to reduce payouts based on business factors and risk outcomes. This move signals a strategic emphasis on shareholder value creation, capital management, and risk mitigation for these key executives.

Key Highlights

  • 1Grant of one-time 'Leadership Awards' valued at $4.5 million each to CFO Michael B. Maguire and Chief Consumer and Small Business Banking Officer Dontá L. Wilson.
  • 2Awards are in the form of performance share units (PSUs) contingent on meeting minimum capital requirements and relative Total Shareholder Return (TSR) against the KBW Nasdaq Bank Index.
  • 3Performance period for Leadership Awards is September 1, 2024, through August 31, 2027.
  • 4The TSR modifier allows for payouts between 75% and 125% of target, subject to meeting capital requirements.
  • 5Awards aim to retain key executives critical to leveraging opportunities from the recent Truist Insurance Holdings, LLC (TIH) sale and strategic balance sheet repositioning.
  • 6Changes to the 2024 executive compensation program emphasize a comprehensive evaluation of performance beyond historical formula-driven metrics, reflecting strategic planning and the TIH transaction outcomes.
  • 7The company is shifting towards a broader evaluation of financial and strategic priorities for its Annual Incentive Plan (AIP) and Long-Term Incentive Plan (LTIP) awards.

Frequently Asked Questions

The Leadership Awards are one-time equity grants in the form of performance share units (PSUs) made to the CFO, Michael B. Maguire, and the Chief Consumer and Small Business Banking Officer, Dontá L. Wilson. They were granted to retain these key executives, who are considered critical to capitalizing on new business opportunities and driving shareholder value following the sale of Truist Insurance Holdings, LLC (TIH) and subsequent strategic repositioning.

The payout of the Leadership Awards is contingent upon two main factors: 1) Truist Financial Corporation's achievement of minimum capital requirements, and 2) the company's total shareholder return (TSR) relative to the KBW Nasdaq Bank Index over a performance period from September 1, 2024, to August 31, 2027. The TSR performance will act as a modifier, potentially adjusting the payout level between 75% and 125% of the target award, provided capital requirements are met.

Yes, Truist's Compensation and Human Capital Committee has made changes to the 2024 executive compensation program. They have shifted away from a purely formula-driven Annual Incentive Plan (AIP) to a more comprehensive evaluation of performance across multiple financial and strategic categories. Similarly, Long-Term Incentive Plan (LTIP) awards for 2024 will be based on a blend of absolute and relative earnings per share (EPS) growth, while still incorporating a relative TSR modifier. These changes are tied to the company's strategic planning and the recent TIH transaction.

The grant date fair value for each Leadership Award granted to Mr. Maguire and Mr. Wilson is $4,500,000.