REGIONS FINANCIAL CORP RF

Removed from 2025

• Compensation Philosophy and Objectives
• 1.Set competitive targets - Compensation targets should be transparent and set at competitive levels.
• 2.Pay for performance based on clear and focused goals - Actual compensation should pay for performance based on goals that are clear and focused.
• As an associate’s business responsibilities increase, the mix of compensation should be more heavily weighted toward variable compensation that is considered “at-risk,” based on corporate and individual results.
• 4.Balance growth and risk - Compensation programs should be balanced, incenting sustainable, profitable growth without encouraging associates to take unreasonable risks that may damage the long-term value of the Company.
• To ensure programs remain consistent with the safety and soundness of the Company, compensation programs will be subject to robust risk management and governance frameworks, including oversight by the CHR Committee.
• 5.Align with corporate values - Compensation programs should be fair, equitable, and align with our corporate values.
• In addition to these broad guiding principles, the CHR Committee adopted a number of key practices that are consistent with our philosophy and our commitment to excellence in corporate governance.
• Equally as important as adopting strong practices is a commitment to refrain from certain compensation and employment practices that are inconsistent with our philosophy and goals.
• The following chart details some of these decisions and where these practices are discussed in more detail in this Compensation Discussion and Analysis (“CD&A”):
• What We DoPay for Performance (pages 78-92)Executive pay decisions are made to ensure that the majority of total direct compensation is at-risk and not guaranteed.
• Evaluate Performance Using a Combination of Balanced Performance Metrics (pages 83-92)Performance is compared to internal expectations, budgets, and strategic plans, and includes non-financial metrics important to our stakeholders.
• Require Strong Stock Ownership and Retention of Equity (page 101)Each of our Directors and Named Executive Officers (“NEOs”) must meet robust stock ownership guidelines to ensure their interests are tied to those of our shareholders.
• Guidelines include a rigorous 6x base pay ownership requirement for our CEO and 3x for other executive officers, including the other NEOs.Provide for Strong Clawback Policies Covering Both Time- and Performance-based Cash and Equity Incentives (pages 98-100)Our two compensation recoupment policies provide for reduction, cancellation, or recoupment of future, current, and/or paid incentive compensation.
• The mandatory clawback policy requires recoupment of incentives in the event of an accounting restatement, as mandated by Rule 10D-1 under the Dodd-Frank Act.
• Under a second policy, the CHR Committee has authority to recapture incentive compensation if an executive has engaged in misconduct or failed to supervise.
• Policies are reviewed at least annually by the CHR Committee.
• What We Do (continued)Require Double Trigger Change-in-Control Provisions (page 102)Our change-in-control agreements, Executive Severance Plan, and long-term incentive awards require both a change-in-control and a qualifying termination of employment (a so-called “double trigger”) to trigger payment.
• No awards or benefits are paid only upon a change-in-control (a so-called “single trigger”).Use an Independent Compensation Consultant (page 96)The CHR Committee retains an independent compensation consultant who performs no other work for the Company.Listen to and Engage with Our Shareholders (pages 35 and 77)We conduct an annual advisory Say-on-Pay vote and actively review the results as we make program decisions.
• Additionally, as a part of our corporate governance shareholder engagement program, we solicit feedback regarding our compensation programs from shareholders and proxy advisors and consider any other shareholder comments we receive.
• What We Don’t DoNo Incentive Plans that Encourage Excessive Risk TakingProtecting against unreasonable risk is a guiding principle of our compensation philosophy and is demonstrated by balanced program design; multiple and competing performance measures; clawback and other enterprise-wide risk-related policies; and robust governance and oversight processes to identify, measure, mitigate, monitor, and report risk.
• Our comprehensive risk assessment of incentive plans by our Risk Management Group, including our CRO, validates our belief that none of our compensation programs create risks that are reasonably likely to have a material adverse impact on the Company.
• No Employment Agreements for Executive OfficersOur executive officers are at-will employees with no employment contracts.No Tax Gross-Ups on Perquisites (“Perks”)We do not provide tax gross-ups to any NEOs for any taxable perk provided, and we have not entered into any agreements that provide excise tax gross-ups on change-in-control payments since 2011.
• No Repricing of Underwater OptionsAlthough Regions does not currently grant stock options, we cannot reprice “out-of-the-money” stock options without shareholder approval.No Hedging, Pledging, or Short SalesWe do not permit our associates or Directors to hedge or short-sell Regions securities.
• Additionally, our executive officers and Directors are prohibited from pledging Regions securities against other debt.No Dividends or Dividend Equivalents on Unvested GrantsWe do not pay dividends or dividend equivalents on shares or units that are not vested.
• We issue dividend and dividend equivalent payments at the end of a performance period only on shares and units that ultimately vest.No Excessive PerksThe CHR Committee has eliminated most perks, and those that remain are monitored to ensure they continue to be based on sound business rationale.
• As mentioned above, the program uses a mix of fixed and variable compensation elements that are aligned with the guiding principles previously discussed.
• Using this process, the CHR Committee has consistently designed executive compensation programs where the large majority of compensation is performance-based, with measures for both corporate and individual performance.
• It is important to note that though we discuss phases and timeliness of the decision-making process in a manner that may appear to be linear, many steps described below occur continuously and concurrently as the CHR Committee evaluates compensation throughout the year.
• Continuous Executive Compensation Evaluation ProcessReview Competitiveness and Business Objectives Prior to the start of each calendar year, the CHR Committee focuses on two areas related to upcoming compensation decisions:Review Market Competitiveness of PayReview Potential Plan Changes, Business Plans, Budgets, and Expected Results ◼With the assistance of its independent compensation consultant, evaluates the market competitiveness of compensation for each of our executive officers to guide target compensation decisions for the year.
• ◼Compares compensation against that of the Company’s compensation peer group, as well as a larger group of diversified financial institutions that we compete with for both business and potential talent.
• ◼Reviews and determines the compensation peer group on an annual basis.
• For more information about our peer group, see pages 97-98 in Other Policies and Practices Impacting Compensation Decisions.◼Initiates discussion of compensation plan design for the coming year.
• Potential plan changes are discussed based on previous effectiveness evaluations.
• ◼Members of the management team advise the Board with respect to business plans, business risks, expected financial results, and shareholder return expectations.
• ◼Uses these discussions to facilitate the goal-setting process for both our short- and long-term performance-based compensation plans.
• Set Pay Levels and Targets During the first quarter, the CHR Committee generally establishes current compensation by targeting pay levels, as well as the performance requirements executives must achieve in order to receive performance-based pay elements: Set Competitive Target Pay Levels Establish Incentive Plan Metrics, Targets, and Other Requirements ◼Establishes the target pay levels for each executive based on the competitive data previously reviewed as well as the recommendations of the independent compensation consultant and the CEO (when appropriate for executive officers other than himself).
• ◼Considers, but does not specifically target, the 50th percentile of total direct compensation (the sum of base salary, short-term annual incentive compensation, and long-term incentive compensation grants) using a competitive set of peer organizations and other competitors for talent.
• ◼May set one or more components of compensation for an executive at a level above or below the 50th percentile if it is determined to be appropriate due to either the experience or performance of an individual executive or the needs or specific circumstances of the Company.
• ◼Reviews previously approved business plans and sets performance targets for short- and long-term performance plans based on previous discussions and presentations to the CHR Committee and the full Board.◼Requires budgeted performance levels to be achieved for target payout levels to be paid.
• ◼Sets meaningful threshold and maximum performance levels so executive officers are appropriately incented to achieve results while not being incented to take excessive risk to achieve compensation payments.◼Bases short-term incentive plans on the Company’s budget and internal goals while setting expectations for long-term plan metrics based upon performance compared to internal goals and relative performance as compared to peers.
• To measure relative performance, uses a performance peer group that is reviewed and determined on an annual basis.
• For more information about our performance peer group, which differs slightly from our compensation peer group, see pages 97-98 in Other Policies and Practices Impacting Compensation Decisions.
• Assess Risks and Shareholder and Other Stakeholder FeedbackDuring the second and third quarters, the CHR Committee focuses on internal performance assessments, risk assessments of compensation, reviews of pay practices, pay-for-performance evaluations, as well as shareholder and other stakeholder feedback related to compensation practices: Internal Assessments External Feedback Reviews ◼Ensures that our executive incentive plans include risk balancing features such as being subject to certain capital and liquidity requirements as well as clawback and forfeiture provisions.◼Reviews a current assessment of corporate performance against the performance goals set at the beginning of the year for both the short-term performance plans and any long-term performance grants currently outstanding.◼With the assistance of its independent compensation consultant, evaluates the effectiveness of the prior year compensation programs in achieving established goals and adhering to program principles.
• ◼With the assistance of its independent compensation consultant, considers feedback from external stakeholders, including feedback from shareholders related to the annual Say-on-Pay vote.
• ◼Reviews compensation assessments from proxy advisory firms and other external sources, as well as feedback from individual shareholders through our corporate governance shareholder engagement program.◼Evaluates any regulatory reviews and matters and, with the assistance of its independent compensation consultant, considers compensation best practices and governance improvements as a part of its continuous improvement process.
• Evaluate and Certify Company Performance and NEO CompensationDuring the fourth quarter of the current year and the first quarter of the following year, the CHR Committee considers items related to both current year compensation and compensation decisions for the upcoming year.
• Decisions related to NEO compensation and current year performance can be summarized as follows:Evaluate Company PerformanceCertify Company Performance and Calculate Compensation◼In the fourth quarter, previews Company forecasts with regard to performance under the short-term and long-term plans to prepare for payment discussions in the first quarter.
• Forecasts of performance include financial results based on GAAP, as well as a thorough review of any proposed adjustments to earnings and any unanticipated or extraordinary events that may have occurred during the year.
• ◼Begins to evaluate qualitative performance factors and separately, in executive session with only CHR Committee members present, participates in a detailed performance discussion relating to the CEO.
• ◼In the first quarter of the following year, after performance results are known and calculated, reviews final performance results and determines the need to apply discretion, flexibility, and judgment to balance the objective evaluations of performance with near-term performance and progress toward our longer-term objectives.
• ◼After decisions are made, certifies the performance results and executive officer compensation for the performance period.
• Shareholder Responsiveness
• Shareholder and other stakeholder feedback related to compensation practices is an important piece of our compensation-setting process each year.
• To maintain strong shareholder support, both our Board and management continue to listen, assess, and respond to shareholder feedback in determining the goals and objectives of our incentive plans and overall program.
• Feedback from shareholder engagement is provided unfiltered to the Board.
• How Pay is Tied to Company Performance
• Throughout this CD&A, we describe our executive compensation philosophy, program, and decisions related to the 2024 performance year for our NEOs:
• Turner, Jr.Chief Financial Officer (“CFO”)Russell K.
• ZusiChief Risk Officer (“CRO”) Effective January 1, 2024Ronald G.
• SmithHead of Corporate Banking Group (1)David R.
• KeenanChief Administrative and Human Resources Officer (“CAHRO”)
• (1)While Mr. Smith retired on January 17, 2025, he is included as an NEO and is referred to as Head of Corporate Banking Group throughout the CD&A because he was employed for the entirety of the 2024 performance year.
• In anticipation of his retirement, the Company appointed Mr. Brian R.
• Willman as Head of Corporate Banking Group on October 21, 2024.
• LINKING PERFORMANCE TO COMPENSATION DECISIONS
• The following is a high-level summary of our 2024 strategic priorities and achievements:
• Continuous Improvement
• Continuous Improvement remains an integral part of the Regions culture.
• By consistently focusing on getting better every day, teams have introduced efforts to improve the customer experience and become more efficient and effective in how we operate.
• Key highlights for the year include:
• ◼Enhanced Bill Pay to make it simpler, faster, and more convenient for customers to pay bills through Regions’ online banking and mobile app;
• ◼Improved Regions’ Zelle® offerings to make it easier for small businesses to send and receive payments using the service;
• ◼Added Spanish as an option in the Regions mobile app and the “Message Us” customer support feature; and
• ◼Added Tap to Bank functionality on nearly 2,000 ATMs – giving customers greater convenience by enabling faster, more convenient, and safer ATM banking.
• As a result of our efforts, Regions was recognized on FORTUNE® magazine’s list of America’s Most Innovative Companies, which highlights companies on the forefront of innovation in the U.S. The rankings are determined by evaluations in product innovation, process innovation, and innovation culture.
• Focus on the Customer
• Regions continues to monitor our customers’ needs and perceptions in a rapidly changing environment.
• Our research teams and businesses are constantly evaluating our performance against customer expectations, and making changes to improve our services, enhance our technology, and give customers more options.
• Accordingly,Regions was ranked: