Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement | |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ☒ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material Pursuant to §240.14a-12 |
THE BANK OF NEW YORK MELLON CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| ☒ | No fee required. | |||
| ☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
| |||
| (1) | Title of each class of securities to which transaction applies: | |||
|
| ||||
| (2) | Aggregate number of securities to which transaction applies:
| |||
|
| ||||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): | |||
|
| ||||
| (4) | Proposed maximum aggregate value of transaction: | |||
|
| ||||
| (5) | Total fee paid: | |||
|
| ||||
| ☐ | Fee paid previously with preliminary materials. | |||
| ☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
| (1) | Amount Previously Paid: | |||
|
| ||||
| (2) | Form, Schedule or Registration Statement No.: | |||
|
| ||||
| (3) | Filing Party: | |||
|
| ||||
| (4) | Date Filed: | |||
|
| ||||
Table of Contents
Table of Contents
| Page 1 | ||
| Page 2 | ||
| Page 3 | ||
| Page 12 | ||
| Page 13 | ||
| Page 14 | ||
| Page 22 | ||
| Page 44 | ||
| Page 47 | ||
| Page 48 | ||
| Page 49 | ||
| Executive Compensation Tables and Other Compensation Disclosures |
Page 71 | |
| Page 83 | ||
| Page 84 | ||
| Page 85 | ||
| Page 86 | ||
| Page 87 | ||
| Page 90 | ||
| Page 91 | ||
| Page 92 | ||
| Page 94 | ||
| Page 98 | ||
| Page 100 | ||
| Page 102 | ||
Table of Contents
| LETTER TO STOCKHOLDERS | ||||
| Dear Fellow Stockholder:
On behalf of our Board of Directors, we cordially invite you to our 2021 Annual Meeting of Stockholders to be held on Tuesday, April 13, 2021 at 9:00 a.m., Eastern Time, via live webcast available at www.virtualshareholdermeeting.com/BK2021.
From any vantage point, and by any measure, 2020 was an unprecedented year replete with unique challenges. Through it all, BNY Mellon adapted and adjusted to ensure we continued to deliver on our commitments. Our priority throughout the year was — and continues to be — ensuring that we support our employees, clients, customers, communities and stockholders.
As a dedicated corporate citizen and recognizing the massive impact of the COVID-19 pandemic, we continue to seek ways to provide support to frontline workers and communities at large. As part of these efforts, we committed over $20 million of aid to nonprofit partners across the globe to deliver relief from the COVID-19 pandemic and strengthen the wellbeing of underrepresented communities. Our support strategically focused on bolstering public health infrastructure, providing front-line relief and social service aid to those most affected by the COVID-19 pandemic. In addition, management and the Board of Directors closely collaborated throughout the year to ensure that we created a stable, healthy and supportive environment for our employees, especially our essential in-office staff.
In 2020, some much needed light was shed on social justice and racial equality issues in our communities. We remain steadfast in our commitment to making and sustaining necessary, positive change to build and strengthen a diverse, equitable and inclusive culture. For example, to drive significant positive movement and accelerate progress with respect to our most underrepresented ethnic talent populations, and help position our firm as a competitive choice with Black and Latinx professionals, we set some concrete, short-term representation goals in the U.S. In addition, we are proud to have one of the most diverse Boards of Directors among our peers. We value the perspectives our directors bring to bear on these issues of great importance facing our business and the communities in which we operate. We believe that our director nominees will continue to partner with management to drive our commitment to social justice and racial equality initiatives in our communities.
We value the opportunity that our Annual Meeting provides to share our perspectives regarding our performance in 2020 and our continuing strategy to drive sustainable, long-term value for stockholders. In the context of the challenges precipitated by the COVID-19 pandemic and ensuing economic and market volatility, we maintained a comprehensive strategic agenda for 2020, and our Board of Directors and management engaged in regular, candid and constructive dialogue about all aspects of the business.
At this year’s Annual Meeting, you will be asked to vote on several items, including the election of directors, our 2020 executive compensation program (the “say-on-pay” vote), the ratification of KPMG LLP to serve as our independent auditor for 2021, and a stockholder proposal, if properly presented. Detailed information about the director nominees, including their specific experience and qualifications, begins on page 14. Our “Compensation Discussion & Analysis” begins on page 49. Our Audit Committee report and corresponding disclosures about our continuing relationship with KPMG LLP begins on page 83. We encourage you to read the proxy statement for more information.
Your vote is important to us, and we hope that you will participate in the Annual Meeting by voting as promptly as possible through any of the means described in this proxy statement. Instructions on how to vote and attend the virtual annual meeting begin on page 94.
Looking forward, we are excited about the business opportunities we have to serve our clients and drive change as we advance, and to harness the lessons learned, from the challenges of 2020. Thank you for your investment in BNY Mellon. |
|
Sincerely,
TODD GIBBONS Chief Executive Officer and Director
March 2, 2021 |
JOSEPH J. ECHEVARRIA Chair of the Board
|
| BNY Mellon Ø | 2021 Proxy Statement | 1 |
Table of Contents
|
|
NOTICE OF ANNUAL MEETING | |||
TUESDAY, APRIL 13, 2021
9:00 a.m., Eastern Time
Via Live Webcast Available At www.virtualshareholdermeeting.com/BK2021
Record Date: February 16, 2021
|
AGENDA |
BOARD RECOMMENDATION |
| 1. To elect the 12 nominees named in this proxy statement to serve on our Board of Directors until the 2022 Annual Meeting |
FOR each director nominee | |
| 2. To provide an advisory vote for approval of the 2020 compensation of our named executive officers, as disclosed in this proxy statement |
FOR | |
| 3. To ratify the appointment of KPMG LLP as our independent auditor for 2021 |
FOR | |
| 4. To consider a stockholder proposal regarding stockholder requests for a record date to initiate written consent, if properly presented |
AGAINST | |
We will also act on any other business that is properly raised at the meeting.
|
Please note that the 2021 Annual Meeting of Stockholders will be held solely by means of remote communication. You will be able to attend the Annual Meeting, vote your shares and submit your questions, if any, during the meeting via a live webcast available at www.virtualshareholdermeeting.com/BK2021. Additional details, including instructions for accessing the live webcast for the Annual Meeting and obtaining technical support, can be found in the “Annual Meeting Q&A” section starting on page 94 of the 2021 Proxy Statement.
|
March 2, 2021
By Order of the Board of Directors,
JAMES J. KILLERLANE III
Corporate Secretary
IT IS IMPORTANT THAT YOU CAREFULLY READ YOUR PROXY STATEMENT AND VOTE.
|
|
VIA THE INTERNET Visit the website listed on your proxy card
|
|
BY TELEPHONE Call the telephone number listed on your proxy card
|
|
|
|
VIA VIRTUAL MEETING PLATFORM Attend the Annual Meeting (see page 94 for more information)
|
|
|
|
BY MAIL Mail in a completed proxy card
| |||||||
|
Important Notice
Regarding the Availability of Proxy Materials for the Annual Meeting
|
| 2 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| INTRODUCTION | ||||
The following summary highlights certain information contained in this proxy statement and provides context related to the matters to be voted on at the 2021 Annual Meeting of Stockholders of The Bank of New York Mellon Corporation (the “company,” “BNY Mellon,” “we,” “our” or “us”). You should read the entire proxy statement carefully before voting.
Business Highlights
Established in 1784 by Alexander Hamilton, we were the first company listed on the New York Stock Exchange (NYSE: BK). With a history of more than 235 years, BNY Mellon is a global company that manages and services assets for financial institutions, corporations and individual investors in 35 countries. We power success across the financial world for individuals and institutions through unique insights, thinking and actions. Businesses, communities and global economies rely on us because we prioritize client experience, collaboration, innovation and resilience. As the “bank of banks,” our unique perspective, informed by one of the largest datasets in the world, powers the financial industry. At BNY Mellon, we understand the best way to succeed at anything is to Consider Everything.
Throughout the COVID-19 pandemic, we have remained focused on the health and wellbeing of our employees, providing continuity of service to our clients and maintaining our balance sheet strength while using it to support clients and markets. We were proud to provide the infrastructure for several critical government programs for COVID-19 pandemic relief, including the Term Asset-Backed Securities Loan Facility, Municipal Liquidity Facility, Primary Dealer Credit Facility and the Payment Protection Program. Despite the unprecedented global market disruption, we stayed fully operational, demonstrating our resiliency and our capacity to support our clients when they needed us most. Our lower risk, fee-based business model positioned us relatively well for the challenging environment and we generated significant capital.
In the early days of the COVID-19 pandemic, we were quick to initiate our business continuity plans and to restrict activities such as travel and in-person participation in events and large meetings. We quickly transitioned the vast majority of our employees, including our senior management and key personnel, to working from home, which opened up space for us to create social distancing for the small number of essential in-office staff. These essential in-office staff are primarily performing roles that cannot be done remotely. We are taking a conservative and measured approach in assessing how, and when, we will return employees to our offices when the COVID-19 pandemic subsides. This phased, enterprise-wide approach is principles-based, centrally coordinated and localized based on the situation. Our guiding principles are adherence to government/jurisdictional guidelines, facility preparedness, business function prioritization, and staff safety and wellbeing.
BNY Mellon’s holistic approach to employee wellbeing is designed to create a healthy, resilient and vibrant workforce and to support the health, wellbeing and safety of our employees in all our facilities. Our programs provide employees easy access to resources to help improve their physical health, emotional resilience, financial wellbeing and social connections. Our programs include:
| • | A comprehensive Supporting You Now COVID-19 framework, which communicates the array of measures to support our employees during the COVID-19 pandemic. These measures include expanded employee assistance program benefits, telehealth coverage, increased back-up dependent care benefits, virtual babysitting services and toolkits for managers and employees to conduct supportive conversations around life balance needs. |
| • | Our Global Wellbeing Program, which uses multiple internal communication channels to promote employee wellbeing. We engage employees and their covered spouses/domestic partners in various activities through a digital app and website that facilitates connecting and getting healthy with others. Ideally suited to a remote work scenario, this platform was adapted to better address employee needs during the COVID-19 pandemic, and offers activities including global team step challenges, healthy habit promotions and guided meditation and yoga sessions. |
| • | MeQuilibrium (“meQ”), a digital stress management program that we launched early in the COVID-19 pandemic and that focuses on developing personal resiliency. The meQ microsite helps improve employee mental health and wellbeing by providing quick tips for helping to manage the day-to-day anxiety caused by COVID-19. |
| BNY Mellon Ø | 2021 Proxy Statement | 3 |
Table of Contents
| INTRODUCTION | ||||
| • | Our ‘It’s OK’ campaign, which aligned with World Mental Health Day in October. Our aim was to remind ourselves and our colleagues that it’s OK to pause to focus on self-care, to check in on a teammate or to take care of responsibilities outside of work. |
In addition to supporting our employees, we were committed to supporting community initiatives. We committed over $20 million of aid to nonprofit partners across the globe to deliver relief from the COVID-19 pandemic. Our community response included:
| • | Philanthropic donations to the hardest-hit areas in support of global public health infrastructure through non-profit partners, including the CDC Foundation, the International Medical Corps and Save the Children. |
| • | Commitments to local hospitals including: Brooklyn Hospital and New York-Presbyterian Hospital. |
| • | Providing 600 tablets to the NYC Health + Hospitals system. This commitment from our Technology team enables COVID-19 patients to connect with loved ones while they are in isolation at the hospital. |
| • | Supporting local organizations that provide front-line and direct relief in the COVID-19 outbreak, including by providing personal protective equipment, medical equipment, meals, shelter, transportation, sanitation items, educational supplies, childcare programs and financial support during the COVID-19 pandemic to first responders, healthcare, transit and other front-line workers, and some of our communities’ most vulnerable populations. |
While 2020 was a year of disruption and challenges, we have remained focused on our strategic priorities: driving growth, scaling and digitizing our operating model and evolving our high-performance culture. Integral to the advancement of these priorities are the values and behaviors that shape what we do and how we do it. To that end, in 2020, the company introduced a new set of company values: Passion for Excellence, Integrity, Strength in Diversity, and Courage to Lead; as well as key behaviors supporting those values. Together, our purpose and values drive our culture, which is built on our commitment to diversity and inclusion, leadership and development, employee engagement and wellbeing, and community impact.
| 4 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| INTRODUCTION | ||||
2020 Financial Performance Highlights
A detailed discussion of our 2020 performance can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Annual Report to stockholders. The following presents certain information regarding our 2020 performance that the Human Resources and Compensation Committee (“HRC Committee”) of our Board of Directors (the “Board”) considered in approaching compensation decisions for 2020, as detailed in the “Compensation Discussion & Analysis” section of this proxy statement, which begins on page 49.
| Reported EPS | OEPS* | |
|
|
| |
| * For a reconciliation and explanation of this Non-GAAP measure, see Annex A.
| ||
Multi-Year Relative Total Stockholder Return (“TSR”)
| BNY Mellon Ø | 2021 Proxy Statement | 5 |
Table of Contents
| INTRODUCTION | ||||
Recognition and Awards
We were honored to be the recipients of a number of awards and recognitions through 2020, including the following:
| Global Custodian of the Year
— Global Investor MENA Awards |
|
Best Global Custodian for International Clients
— The Asset Triple A Award |
|
Alternatives Fund Services Project of the Year (EZOPS)
— Global Custodian Magazine
|
|
Best in Collateral Management
— The Asset Triple A Award | ||||||
| 2020 Best Model Bank Award, Payment Operations
— Celent Model Bank |
|
Technology Innovation of the Year, ESG Data Analytics Application
— Global Investment Group Investment Excellence
|
|
2020 Best Places to Work for LGBTQ Equality, 100% Score
— The Human Rights Campaign
|
|
2020 Disability Equality Index Best Places To Work, 100% Score
— Disability: IN | ||||||
| 2020 Bloomberg Gender Equality Index
— Bloomberg |
|
2020 DJSI North America Index
— S&P Dow Jones Indices
|
|
2020 FTSE4Good Russell Index
— FTSE Russell |
|
2020 Fortune World’s Most Admired Companies
— Fortune Magazine |
Environmental, Social and Governance (“ESG”)
As one of the most trusted financial institutions, we are committed to operating responsibly and sustainably. We integrate our commitment to environmental sustainability and human rights across our business. We also work to improve the effectiveness of our supply chain and seek suppliers whose corporate values align with ours. Additionally, we engage with stakeholders on public policy initiatives important to our company. Our highlights in these areas include:
| • | financial aid contributed to nonprofit partners across the globe in support of COVID-19 relief efforts and the wellbeing of underrepresented communities; |
| • | the creation of an ESG Data Analytics application as a cloud-based solution that mass-customizes investment portfolios to clients’ individual ESG factor preferences; and |
| • | the launch of the Considering Climate at BNY Mellon Report, according to the TCFD Guidelines. |
Additional detail regarding the company’s Enterprise Environmental, Social and Governance (“Enterprise ESG”) strategy, including its commitments to culture and purpose, responsible business and global citizenship, and the Board’s oversight role, can be found starting on page 33.
| 6 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| INTRODUCTION | ||||
Board Leadership and Composition
The 12 director nominees standing for election at the Annual Meeting contribute to the Board’s overall depth of experience, diversity, differing perspectives and institutional knowledge. 11 of the director nominees are independent, including the Chair of the Board, Joseph Echevarria. The only nominee who is a member of management is our Chief Executive Officer (“CEO”), Todd Gibbons.
| * | Does not include M. Amy Gilliland and K. Guru Gowrappan, each of whom is a nominee and currently does not serve on the Board. |
Our Board is committed to fostering and maintaining its diversity. In addition to valuing diversity of viewpoints, professional experience, tenure, education, skills and expertise, the Board also seeks to include directors with diverse backgrounds, including with respect to race, gender, ethnicity and sexual orientation, to capture the benefits inherent in diverse perspectives. As a result of this commitment, our Board has approved a slate of nominees for election at the 2021 Annual Meeting that is 25% female and over 41% diverse on the basis of race or ethnicity. In addition, four of the six standing committees of the Board are chaired by a diverse director based on race or gender.
Detailed information about each nominee’s qualifications, experience, skills and expertise along with select professional and community contributions can be found starting on page 14.
| BNY Mellon Ø | 2021 Proxy Statement | 7 |
Table of Contents
| INTRODUCTION | ||||
Director Nominees and Committee Membership
Name and Occupation Linda Z. Cook Partner and Managing Director of EIG Global Energy Partners and CEO of Harbour Energy, Ltd. Joseph J. Echevarria Independent Chair of the Board of The Bank of New York Mellon Corporation; Retired CEO of Deloitte LLP Thomas P. "Todd" Chief Executive Officer of The Bank of New York Mellon Corporation M. Amy Gilliland(2) Senior Vice President of General Dynamics Corporation and President of General Dynamics Information Technology Jeffrey A. Goldstein Senior Advisor at Canapi Ventures, Advisor Emeritus at Hellman & Friedman LLC, and Former Under Secretary of the Treasury for Domestic Finance K. Guru Gowrappan(2) Executive Vice President of Verizon Communications Inc. and CEO of Verizon Media Group and Executive Vice President of Verizon Communications Inc. Ralph Izzo Chairman, President and CEO of Public Service Enterprise Group Incorporated Edmund F. "Ted" Kelly Retired Chairman of Liberty Mutual Group Elizabeth E. Robinson Retired Global Treasurer of The Goldman Sachs Group, Inc. Samuel C. Scott III Retired Chairman, President & CEO of Ingredion Incorporated Frederick O. Terrell Senior Advisor at Centerbridge Partners, L.P. Alfred W. "Al" Zollar Executive Partner at Siris Capital Group, LLC Director Since 2016 2015 2019 2014 2020 2004 2016 2016 2003 2020 2019 Independent Audit Corp. Gov., Nom. & Social Resp. Finance Human Res. & Comp. Risk Technology Other Current Public Company BoardsName and Occupation Linda Z. Cook Partner and Managing Director of EIG Global Energy Partners and CEO of Harbour Energy, Ltd. Joseph J. Echevarria Chairman of the Board of The Bank of New York Mellon Corporation; Retired CEO of Deloitte LLP Thomas P. "Todd" Gibbons Chief Executive Officer of The Bank of New York Mellon Corporation Jeffrey A. Goldstein Senior Advisor at Canapi Ventures, Advisor Emeritus at Hellman & Friedman LLC, and Former Under Secretary of the Treasury for Domestic Finance Ralph Izzo Chairman, President and CEO of Public Service Enterprise Group Incorporated Edmund F. "Ted" Kelly Retired Chairman of Liberty Mutual Group Jennifer B. Morgan Global Head of Portfolio Transformation and Talent of The Blackstone Group Inc. Elizabeth E. Robinson Retired Global Treasurer of The Goldman Sachs Group, Inc. Samuel C. Scott III Retired Chairman, President & CEO of Ingredion Incorporated Frederick O. Terrell Senior Advisor at Centerbridge Partners, L.P. Alfred W. "Al" Zollar Executive Partner at Siris Capital Group, LLC Director Since 2016 2015 2019 2014 2020 2004 2016 2016 2003 2020 2019 Independent Audit Corp. Gov., Nom. & Social Resp. Finance Human Res. & Comp. Risk Technology Other Current Public Company Boards 0 3 0 1 1 0 0 1 1 1 2
| (1) | Jennifer B. Morgan, an independent director and a member of the Board’s Audit Committee and Technology Committee, will not be standing for re-election at our 2021 Annual Meeting. |
| (2) | Ms. Gilliland and Mr. Gowrappan are nominees who currently do not serve on our Board. Subject to their election at our 2021 Annual Meeting, the CGNSR Committee will consider and make a recommendation to the Board regarding the appointments of Ms. Gilliland and Mr. Gowrappan to one or more committees of the Board. |
| (3) | Financial expert within the meaning of the Securities and Exchange Commission (“SEC”) rules. |
‘C’ indicates Committee Chair.
| 8 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| INTRODUCTION | ||||
Corporate Governance Highlights
We believe that the strength of our business reflects the high standards set by our governance structure. Several of our key governance practices are outlined below. For a detailed discussion of our corporate governance framework, please refer to “Corporate Governance and Board Information” beginning on page 22.
| Robust Stockholder Rights |
Active, Independent Board |
Our Culture | ||
|
• Annual election of directors
• Special meeting rights for stockholders, individually or in a group, holding 20% of our outstanding common stock
• Written consent rights that allow stockholders representing at least the minimum number of votes that would be necessary to take action at a meeting to take the action without formally meeting
• Proxy access allows stockholders, individually or in a group of up to 20, holding 3% of our outstanding stock for at least 3 years, to nominate up to 20% of the Board
• Majority voting in uncontested director elections (each director must be elected by a majority of votes cast)
• A director who does not receive a majority of votes cast is required to tender his or her resignation upon certification of the vote
• No supermajority voting: stockholder actions require only a majority of votes cast (not a majority of shares present and entitled to vote)
• No “poison pill” or (stockholders’ rights plan) |
• Active engagement with stakeholders
• Independent board comprised solely of independent directors, other than our CEO, who meet in regular executive sessions
• Strong independent board leadership: The roles of Chair and CEO currently are separate; if combined in the future, an independent Lead Director will be appointed by the independent directors
• Our independent Chair may call a special meeting of the independent directors or full Board
• Board succession and refreshment initiative led by the CGNSR Committee. In addition to the two new director nominees who currently do not serve on our Board, six of the incumbent directors nominated for election at the 2021 Annual Meeting have been added to the Board in the last five years.
• High rate of attendance at Board and committee meetings, with average 2020 attendance of approximately 95%
• To enhance alignment of director and stockholder interests, a substantial portion of director compensation is paid in equity, all of which is required to be retained until retirement
• Board and committees have access to independent legal, financial and other advisors
• Independent directors have unlimited access to company officers and employees
• Committees report on their activities to the Board at each Board meeting to ensure oversight and accountability |
• We are risk-aware and protect against excessive risk-taking through multiple lines of defense, including Board oversight
• Our codes of conduct, which apply to all employees and directors, are rooted in our values (passion for excellence, integrity, strength in diversity, and courage to lead); promote honesty and accountability; and provide a framework for ethical conduct
• Robust anti-hedging and anti-pledging policies prohibit executive officers and directors from engaging in hedging or pledging transactions with respect to company securities
• Innovative and evolving education and talent development at all levels, including robust director orientation and continuing education
• Committed to a robust corporate governance framework as signatories to the Commonsense Principles 2.0, a public statement of sound, long-term-oriented corporate governance principles
• Comprehensive Enterprise ESG program that includes Board committee-level reporting and oversight
• Endorsed the Business Roundtable’s Statement on the Purpose of a Corporation, publicly reinforcing our commitment to all our stakeholders
• Published the Considering Climate at BNY Mellon report as part of our commitment to explore the Task Force on Climate-related Financial Disclosure (“TCFD”) guidelines to address climate risk | ||
| BNY Mellon Ø | 2021 Proxy Statement | 9 |
Table of Contents
| INTRODUCTION | ||||
Compensation Principles and Practices
Our compensation program is designed to compensate our executive officers for performance in a manner that is aligned with our stockholders’ interests and consistent with our high standards for risk management. For 2020, the HRC Committee determined to maintain its general approach to our annual compensation program. Accordingly, our 2020 executive compensation program continued to feature operating earnings per share (“OEPS”) as the key performance assessment metric for determining incentive awards. The following table summarizes the key components of our compensation program for 2020, and a detailed discussion, including with respect to the compensation decisions for our Named Executive Officers (“NEOs”), is provided in the “Compensation Discussion & Analysis” section of this proxy statement, which begins on page 49.
| Program Feature
|
Practice
| |
|
Balanced approach for incentive compensation |
• Incentive compensation is earned on a combination of corporate and individual performance
• Impact of the individual modifier permits incentive award increases of up to 50% and decreases down to $0, providing flexibility for greater differentiation based on individual performance and, if appropriate, business unit performance
• Earnout on Performance Share Units (“PSUs”) granted in 2018, 2019 and 2020 tied to 3-year average revenue growth, as adjusted, and 3-year average operating margin, as adjusted, to augment the OEPS metric in our balanced scorecard with complementary top- and bottom-line metrics; Earnout on PSUs granted in 2021 tied to Return on Average Tangible Common Equity and relative Total Stockholder Return to focus on revenue growth, expense management, capital efficiency, and greater alignment with stockholder interests
| |
| Directly link pay to performance |
• Incentive compensation deferred in the form of PSUs comprises 50% of target total incentive compensation for our CEO and comprises 45% for our other continuing NEOs
• Incentive compensation deferred in the form of restricted stock units (“RSUs”) comprises 25% of target total incentive compensation for our continuing NEOs
• Corporate component metric for incentive compensation based on OEPS reinforces management’s focus on company-wide performance and organic growth
| |
| Promote long-term stock ownership |
• Deferred equity (PSUs and RSUs) comprises 75% of target total incentive compensation for our CEO and comprises 70% for our other continuing NEOs
• PSUs cliff vest after the end of a three-year performance period, and RSUs vest in equal installments over three years
• Robust policies prohibit hedging and pledging of company stock and derivative securities
• Our CEO must acquire and retain company stock equal to six times base salary, and other NEOs must acquire and retain stock equal to four times base salary, plus, in each case, an additional amount equal to one times base salary to provide a cushion against stock volatility | |
| 10 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| INTRODUCTION | ||||
2020 Target Direct Compensation Structure*
| * | Calculations include annual target incentive compensation only to our continuing NEOs and exclude one-time awards made in connection with hiring or to promote continuity as discussed below. |
| BNY Mellon Ø | 2021 Proxy Statement | 11 |
Table of Contents
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS | > Resolution | |||
Proposal
We are asking stockholders to elect the 12 nominees named in this proxy statement to serve on our Board until the 2022 Annual Meeting of Stockholders or until their successors have been duly elected and qualified.
Background
| • 10 nominees currently serve on our Board and are standing for re-election. Two of the nominees, M. Amy Gilliland and K. Guru Gowrappan, currently do not serve on our Board.
• 11 nominees are independent, and one nominee serves as the company’s CEO.
| ||||
| • The Board and its Corporate Governance, Nominating and Social Responsibility Committee (the “CGNSR Committee”) have concluded that each of our nominees should be recommended for nomination or re-nomination as a director, as applicable, after considering, among other factors, the nominee’s (1) professional background and experience, (2) senior level management and policy-making positions, (3) other public company board experience, (4) diversity and (5) intangible attributes. In addition, in the case of nominees considered for re-nomination, the Board and the CGNSR Committee considered such nominees’ (6) prior BNY Mellon Board experience and (7) attendance and participation at Board meetings throughout such nominee’s tenure on the Board. Additional information regarding the Board’s director nomination process begins on page 25. |
The Board recommends that you vote “FOR” each of the nominees described below.
| |||
|
• The nominees have skills and expertise in a wide range of areas, including technology and cybersecurity, accounting, financial services and private equity, financial regulation, media and product development, operations, management of complex, global businesses, insurance, and risk management. Information about each director nominee, including each nominee’s professional experience, skills and expertise, is provided starting on page 14.
• The nominees are able to devote the necessary time and effort to BNY Mellon matters. | ||||
Voting
Each director will be elected if more votes are cast “for” the director’s election than are cast “against” the director’s election. Abstentions and broker non-votes are not counted as a vote cast either “for” or “against” the director’s election and therefore have no effect on voting outcomes. Pursuant to our Corporate Governance Guidelines, if any incumbent director fails to receive a majority of the votes cast, the director will be required to tender his or her resignation promptly after the certification of the stockholder vote. The CGNSR Committee will promptly consider the tendered resignation and recommend to the Board whether to accept or reject it, or whether other actions should be taken. More information on our voting standard and the CGNSR Committee’s consideration of tendered resignations is provided on page 21 below.
We are unaware of any reason that a nominee named in this proxy statement would be unable to serve as a director if elected. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such other person as may be nominated in accordance with our by-laws, as described on page 21. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
| BNY Mellon Ø | 2021 Proxy Statement | 13 |
Table of Contents
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| BNY Mellon Ø | 2021 Proxy Statement | 15 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| 16 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| BNY Mellon Ø | 2021 Proxy Statement | 17 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| 18 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
| BNY Mellon Ø | 2021 Proxy Statement | 19 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Nominees |
Each of the nominees for election as director was elected as a director at our 2020 Annual Meeting of Stockholders, other than (i) Ms. Gilliland and Mr. Gowrappan, who currently do not serve on the Board, and (ii) Mr. Izzo, who joined the Board effective August 10, 2020. Our Board believes that the nominees meet the criteria outlined above and discussed in more detail in “Director Nomination Process” starting on page 25, and collectively exhibit the diversity and depth and breadth of experience to contribute to an engaged board capable of effectively and thoughtfully overseeing the company’s management. No current director or nominee has a family relationship to any other director, nominee for director or executive officer. Ms. Morgan, who was elected as a director at our 2020 Annual Meeting of Stockholders, will not be standing for re-election. The Board is grateful to Ms. Morgan for her dedication and invaluable contributions during her tenure as a director of the company.
Skills and Experience Finance - experience in understanding and overseeing financial reporting and internal controls Leadership - overseeing a company or a significant business unit giving him/her leadership qualities and the ability to identify and develop those qualities in others Technology - experience with companies that used or developed technology to improve quality and innovate products and services to increase client satisfaction Global - knowledge of the opportunities and challenges of a large company with a global footprint Governance - knowledge or expertise in current corporate governance trends and practices Risk - knowledge or expertise with respect to risk management processes across a large organization in a regulated industry Financial Services Experience - experience within or leading a financial services company Demographic Background Board Tenure Completed Years 4 5 1 n/a 6 n/a 0 16 4 17 1 2 Gender Male Female Age Years Old 62 64 64 46 65 40 63 75 52 76 66 66 Race/Ethnicity African American/Black White/Caucasian Hispanic/Latino Asian Linda Z. cook Joseph j. echevarria Thomas p. "todd" gibbons M.Amy Gilliland* Jeffrey A. Goldstein K.guru Gowrappan* Ralph Izzo* Edmund F. "ted" Kelly Elizabeth E. Robinson Samuel C. Scott III Frederick O. Terrell Alfred w. "al" zollar
| * | Ms. Gilliland and Mr. Gowrappan are nominees who currently do not serve on our Board. Mr. Izzo joined the Board effective August 10, 2020. |
| 20 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS | > Corporate Governance and Board Information | |||
Our Corporate Governance Practices
We believe that the strength of BNY Mellon’s business reflects the high standards set by our governance structure, which provides guidance in managing the company from the Board down. This structure benefits all our stakeholders, including our stockholders, clients, employees and communities. Several of our key governance practices are outlined below.
|
INDEPENDENCE
|
ü Our Board is composed entirely of independent directors (other than our CEO) who regularly meet in executive sessions, led by our independent Chair at Board meetings and committee Chairs at committee meetings.
ü Our independent Chair (or if there is not an independent Chair, the Lead Director), selected annually by our independent directors, has broad powers, including:
• acting as a liaison between and among the other independent directors, the CEO and management generally;
• presiding over Board and stockholder meetings;
• the right to call a special meeting of the independent directors or the full Board;
• reviewing and approving Board meeting agendas, materials and schedules;
• leading executive sessions and meetings of independent directors;
• being available to meet with major stockholders and regulators as applicable; and
• consulting with the Chair of the HRC Committee on CEO performance, compensation and succession, and reviewing the emergency CEO succession management plan with the CGNSR Committee annually.
ü All Board committees are composed entirely of independent directors.
|
|
ACTIVE ENGAGEMENT
|
ü We had a high rate of director attendance at Board and committee meetings in 2020, averaging approximately 95%.
ü We actively engage with our stakeholders through multiple initiatives, reaching out to investors representing over 50% of our outstanding common shares as well as proxy advisory firms and other stakeholders.
ü Stockholders and other interested parties can directly contact our Board (see “Contacting the Board” on page 43 and “Helpful Resources” on page 100).
|
| 22 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
|
BOARD GOVERNANCE
|
ü Our Corporate Governance Guidelines require that the CGNSR Committee consider enhanced director qualifications in connection with director nominations, including a nominee’s character and integrity, diversity characteristics and record of accomplishment in senior-level roles.
ü Our Board, each of our standing committees, and each of our individual directors conduct annual self-evaluations that have resulted in enhancements to Board functioning (see “Evaluation of Board and Committee Effectiveness” on page 27).
ü Our by-laws permit holders in the aggregate of 20% of our outstanding common stock to call a special stockholder meeting.
ü Our Restated Certificate of Incorporation, as amended, allows for action by written consent of stockholders representing at least the minimum number of votes that would be necessary to take the action at a meeting.
ü Our Corporate Governance Guidelines provide that directors will annually select either an independent Chair or a Lead Director based on the best interests of the company. Joseph J. Echevarria currently serves as the independent Chair of the Board.
ü Our Corporate Governance Guidelines provide the CGNSR Committee with the discretion to recommend to the Board, and the Board the discretion to approve, a nominee for re-election who would be 75 years of age or older at the time of election if, after considering the criteria for selecting director nominees, the capacity of such nominee to continue to make meaningful contributions to the Board and the needs of the company, the Board determines that the re-nomination is in the best interests of the company.
ü Policies related to trading in company securities by executive officers and directors prohibit the hedging and pledging of company securities.
ü Our comprehensive Enterprise ESG program includes Board committee-level reporting and oversight, including with respect to environmental management, sustainability, diversity and inclusion, and governance.
ü We signed and committed to apply the Commonsense Principles 2.0, a public statement of corporate governance principles intended to provide a framework for sound, long-term-oriented governance.
ü We have endorsed the Business Roundtable’s Statement on the Purpose of a Corporation, publicly reinforcing our commitment to all stakeholders.
ü In the first quarter of 2021, we published the Considering Climate at BNY Mellon report as part of our commitment to the TCFD guidelines to address climate risk.
ü Our Board participates in information sessions during regularly scheduled and special meetings, receiving business, regulatory and other updates from senior management, including risk executives and our General Counsel. In addition, our Board regularly receives reports from the chair of each standing committee to ensure oversight and transparency regarding the committee’s activities.
|
| ROBUST PROGRAMS |
ü A significant portion of director compensation is paid in deferred stock units, which must be held as long as the director serves on the Board.
ü Our codes of conduct, which apply to our directors, as well as all of our employees, are rooted in our company values (passion for excellence, integrity, strength in diversity, and courage to lead), provide a framework for the highest standards of professional conduct, and foster a culture of honesty and accountability.
ü We continue to enhance our robust orientation program for new directors, which includes interviews with other directors as well as senior leadership across businesses and functions; extensive review of corporate governance documents, corporate policies and other documents; and training in all resources available to directors. In addition, all directors are encouraged to participate in thoughtfully selected continuing education programs for which expenses are reimbursed.
|
| WHAT WE DON’T DO |
× No staggered board.
× No “poison pill” (stockholders’ rights plan).
× No supermajority voting. Action by stockholders requires only a majority of the votes cast (not a majority of the shares present and entitled to vote).
× No plurality voting in uncontested director elections. Each director must be elected by a majority of the votes cast.
|
| BNY Mellon Ø | 2021 Proxy Statement | 23 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| 24 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| BNY Mellon Ø | 2021 Proxy Statement | 25 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| 26 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
Evaluation of Board and Committee Effectiveness
Annually, the Board and each of our standing committees conduct a self-evaluation aimed at continually enhancing Board and individual director performance. The Board and management then work together to take appropriate action in light of the results of the self-evaluations.
Design of Assessment Process CGNSR Committee and independent Chair (or Lead Director, as applicable) determine the process, scope and
contents of the Board's annual performance evaluation. The process is generally designed to facilitate a multi-year perspective and year-over-year comparability of feedback and assessment results. Evaluation and Director Self-Assessment Each
director is provided with one evaluation questionnaire for the full Board and one for each standing committee on which such director serves. Each director also participates in annual, individual interviews guided by our General Counsel which allow
each director an Opportunity to elaborate his or her questionnaire submissions and to provide candid reflection on personal contributions, the performance of other directors and Board and committee effectiveness generally. Topics covered as part of
the evaluation process: Director contribution and performance Board structure and size, and Board dynamics Strategic priorities for the Board to focus oversight Range of business, professional and other backgrounds necessary for a director to serve
the company Content and form of information provided to the Board by management Review and Presentation of Findings With the assistance of an independent, third-party consultant, the questionnaire responses and interview feedback are aggregated and
a report is prepared for the Board and each Committee. Each standing committee self-evaluation is conducted by the respective committee Chairs in executive session at the next scheduled committee meeting after feedback is gathered. The independent
Chair (or Lead Director, as applicable) leads an executive session of the full Board in which Board self-evaluation results are presented and the standing committee self-evaluations are reported. Follow-Up and Accountability Self-evaluation results
are compared to prior year results to track improvements and promote long-term accountability. Board and management take appropriate action as necessary to address additional considerations. Areas in which director feedback has led to further
discussion and enhancement s: Adjustments to content. timing and style of Board presentation materials Allocation of timing among committee and Board meetings and executive sessions Board and management succession
| BNY Mellon Ø | 2021 Proxy Statement | 27 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| 28 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
Table of Contents
Table of Contents
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| 32 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
Enterprise ESG Governance
The work of considering and integrating ESG issues across all levels of our enterprise extends from the highest level of leadership to employees across the globe.
|
Entity
|
Primary Responsibilities for Enterprise ESG Strategy
| |
| CGNSR Committee | Consists of independent directors who regularly review our Enterprise ESG performance, monitor progress against long-term goals and provide guidance to management.
| |
| Executive Committee | Responsible for progress and success; approves and monitors progress on long-term goals, anticipates market trends and future client needs, and drives business innovation.
| |
| Management and Staff |
• Enterprise ESG Team: Leads strategy development and governance processes, provides subject matter expertise, collaborates with company functions and departments to assist in development of ESG integration initiatives, manages public reporting and disclosures related to ESG activities, facilitates external stakeholder input, and collaborates with experts and facilitates on thought leadership.
• Subject Matter Experts: Staff across varying areas of the company who manage the day-to-day execution of policies, practices and programs that relate to ESG across the business.
• Employee Groups: Committees that engage local and regional employees in initiatives to support the company’s social or environmental impact; includes employee/business resource groups (“E/BRGs”), sustainability ambassadors, and volunteer and philanthropic fundraising committees.
| |
We plan to publish our 14th annual report covering ESG topics in summer 2021. Past reports can be found on www.bnymellon.com/csr. For additional detail regarding the company’s governance as it relates to environmental sustainability and climate change-related matters, please see our Considering Climate at BNY Mellon report, which was prepared in accordance with the TCFD guidelines, available at https://www.bnymellon.com/us/en/about-us/global-impact/enterprise-esg/csr.html.
Spotlight on Diversity and Inclusion
Diversity and Inclusion (“D&I”) forms an integral component of our Culture & Purpose strategy. Our D&I efforts are aimed at considering and integrating ESG issues across all levels of our enterprise to ensure the highest level of leadership and engagement on a global employee basis.
| 34 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
Our governance framework supports this mission by balancing appropriate levels of accountability at the Board and among senior management with adequate representation and input from our employees across the globe.
| Entity
|
Primary Responsibilities for D&I Efforts
| |
| HRC Committee | Consists of independent directors who are responsible for overseeing our programs for diversity and inclusion.
| |
| Executive Committee | Sets goals to improve workforce diversity, with particular emphasis on diversifying our senior management ranks, and have their bonuses and incentives tied to performance against goals, including D&I goals. Executive ownership and accountability of D&I outcomes sustains the focus on gender equality and improving ethnic/racial representation in our U.S. workforce.
| |
| Global Diversity and Inclusion Team and Diversity and Inclusion Advisory Council |
• Global Diversity and Inclusion Team: Our Office of Global Diversity and Inclusion has appointed a global head and regional leads in EMEA, the Americas and India. These dedicated experts partner with our business leaders and employees, and engage stakeholders—including clients, investors and regulators—to share ideas and successes.
• Diversity and Inclusion Advisory Council: This group of senior managers, representing all of our business, functions and regions, is interactive, results-oriented and forward-looking, serving as both a sounding board to the CEO and catalyst for change. Each member is also involved with each of our E/BRGs, some holding formal leadership roles, to ensure connectivity, alignment and governance across D&I groups.
| |
| E/BRGs | Our E/BRG members drive our D&I strategy across business lines and regions, engaging employees globally as D&I champions and brand ambassadors. These groups provide our employees with opportunities to share, collaborate and support one another through shared interests, common attributes and cultural heritage. They offer mentoring and reverse mentoring programs; professional development workshops; leadership skill-building and cross-border teaming; volunteering and pro bono opportunities; and other activities that can raise an employee’s visibility, enhance professional capability and capacity, and build trusted working relationships with global colleagues, clients and partners.
| |
| BNY Mellon Ø | 2021 Proxy Statement | 35 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| 36 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
Successful management of our company requires the understanding, identification and management of risk. We oversee risk through multiple lines of defense, as described in the below table.
|
Entity
|
Primary Responsibilities for Risk Management
| |
| Risk Committee, consisting entirely of independent directors |
• Review and approval of significant enterprise-wide risk management policies and associated risk management frameworks of the company.
• Review and approval of the company’s risk appetite statement on an annual basis, and approval of any material amendment to the statement.
• Review of significant risk exposures and the steps management has taken to identify, monitor, control and report such exposures, including risks such as credit, market, liquidity, operational, strategic and model risks and risks associated with incentive compensation plans.
• Evaluation of risk exposure and tolerance.
• Review and evaluation of the company’s practices with respect to risk assessment and risk management.
• Review, with respect to risk management and compliance, of (1) issues identified by the company’s Risk and Compliance department and the Internal Audit department (“Internal Audit”), and management’s responses and follow-ups, (2) significant examination reports and associated matters identified by regulatory authorities and management’s responses, and (3) the Risk and Compliance department’s scope of work and its planned activities.
| |
| Audit Committee, consisting entirely of independent directors |
• Review and discussion of policies with respect to risk assessment and risk management.
• Oversight responsibility with respect to the integrity of our company’s financial reporting and systems of internal controls regarding finance and accounting, as well as our financial statements.
• Coordinate with the Risk Committee to ensure each Committee has received and, when appropriate, discussed the information necessary to fulfill each Committee’s respective responsibilities and duties with respect to areas of common interest (including, among other matters, the company’s methods for identifying and managing risks).
• Review of periodic reports regarding corporate-wide compliance with laws and regulations.
• Review of any items escalated by the Risk Committee that have significant financial statement impact or require significant financial statement/regulatory disclosures.
• Review processes for managing and assessing risk through the Risk Committee and management-level risk committees.
| |
| Management |
• Chief Risk Officer: Implement an effective risk management framework and daily oversight of risk.
• Internal Audit: Provide reliable and timely information to our Board and management regarding our company’s effectiveness in identifying and appropriately controlling risks.
• Senior Risk and Control Committee: Review significant risk events, emerging risks and drivers of risk. Serve as the most senior management-level risk governance body at the company, and review on an ongoing basis the top risks. Provide oversight for all risk management, compliance and ethics activities and processes, including the risk framework.
| |
| BNY Mellon Ø | 2021 Proxy Statement | 37 |
Table of Contents
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
Committees and Committee Charters
Our Board has established six standing committees, each consisting entirely of independent directors. A description of each standing committee is provided below. Each committee makes recommendations to our Board as appropriate and reports periodically to the entire Board. Four of the six standing committees are chaired by a diverse director. Additional information about the standing committees can be found in their charters, which are available on our website (see “Helpful Resources” on page 100).
| Audit
6 Independent Members 11 Meetings in 2020 |
Joseph J. Echevarria (Chair), Linda Z. Cook, Ralph Izzo, Jennifer B. Morgan, Samuel C. Scott III, Frederick O. Terrell*
Overseeing Independent Registered Public Accountant. Our Audit Committee has direct responsibility for the appointment, compensation, annual evaluation, retention and oversight of the work of the registered independent public accountants engaged to prepare an audit report or to perform other audit, review or attestation services for us. The Committee is responsible for the pre-approval of all audit and permitted non-audit services performed by our independent registered public accountants and each year, the Committee recommends that our Board request stockholder ratification of the appointment of the independent registered public accountants.
Overseeing Internal Audit Function. The Committee acts on behalf of our Board in monitoring and overseeing the performance of our internal audit function. The Committee reviews the organizational structure, qualifications, independence and performance of Internal Audit and the scope of its planned activities, at least annually. The Committee also approves the appointment of our internal Chief Auditor, who functionally reports directly to the Committee and administratively reports to the CEO, and annually reviews his or her performance and, as appropriate, replaces the Chief Auditor.
Overseeing Internal Controls over Financial Statements and Reports. The Committee oversees the operation of a comprehensive system of internal controls covering the integrity of our financial statements and reports, compliance with laws, regulations and corporate policies. Quarterly, the Committee reviews a report from the company’s Disclosure Committee and reports concerning the status of our annual review of internal control over financial reporting, including (1) information about (a) any significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect our ability to record, process, summarize and report financial information and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in our internal control over financial reporting, and (2) management’s responses to any such circumstance. The Committee also oversees our management’s work in preparing our financial statements, which will be audited by our independent registered public accountants.
Financial Planning and Analysis. The Committee reviews: (1) financial forecasts, operating budgets, capital expenditures and expense management programs, and progress relative to targets and relative to competitors; and (2) plans with regard to net interest revenue, investment portfolio activities and progress relative to such plans and activities.
Members and Financial Expert. The Committee consists entirely of directors who meet the independence requirements of listing standards of the NYSE, Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations of the Federal Deposit Insurance Corporation (“FDIC”). All members are financially literate within the meaning of the NYSE listing standards as interpreted by |
| * | Mr. Izzo joined the Audit Committee in August 2020, when he joined the Board. Mr. Terrell joined the committee in May 2020, and Mr. Zollar was a member of the committee until May 2020. Ms. Morgan is currently a member of the committee but will not be standing for re-election as a director at the 2021 Annual Meeting. |
| BNY Mellon Ø | 2021 Proxy Statement | 39 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| our Board and are outside directors, independent of management, and are not large customers of the company, under the FDIC’s rules and regulations. Our Board has determined that (i) each of Messrs. Echevarria, Izzo, Scott and Terrell and Ms. Morgan (a) satisfy the definition of “audit committee financial expert” as set out in the rules and regulations under the Exchange Act, based upon their experience actively supervising a principal accounting or financial officer or public accountant, and (b) has “banking or financial management expertise” as set out in the FDIC’s rules and regulations, and (ii) each of Messrs. Echevarria, Izzo, Scott and Terrell and Messes. Cook and Morgan has accounting or related financial management expertise within the meaning of the NYSE listing standards as interpreted by our Board. | ||||
| Corporate Governance, Nominating and Social Responsibility Committee
4 Independent Members 12 Meetings in 2020 |
Samuel C. Scott III (Chair), Linda Z. Cook, Joseph J. Echevarria, Ralph Izzo*
Corporate Governance Matters. As further described on page 25, the CGNSR Committee assists our Board in identifying, reviewing and recommending individuals qualified to become Board members. The Committee periodically considers the size of our Board and recommends changes to the size as warranted and is also responsible for developing and recommending to our Board changes to our Corporate Governance Guidelines from time to time as may be appropriate. In addition, the Committee oversees the evaluation process of our Board and its committees, reviews the structure and responsibilities of the Board’s committees and annually considers committee assignments, recommending changes to those assignments as necessary.
Oversight of Director Compensation and Benefits. The Committee reviews non-employee director compensation on an annual basis and makes recommendations to our Board on appropriate compensation, and is responsible for approving compensation arrangements for non-employee members of the Boards of our significant subsidiaries.
ESG and Corporate Social Responsibility. The Committee promotes a culture that emphasizes and sets high standards for corporate citizenship and reviews corporate performance against those standards. The Committee is responsible for the oversight of the company’s significant ESG program and initiatives, including Enterprise ESG strategy and governance, strategic philanthropy and employee community involvement, public policy and advocacy (including lobbying and political contributions), environmental sustainability and management, supply chain ESG considerations, and significant reporting related to such matters. The Committee also provides oversight for the company’s compliance with the Community Reinvestment Act and Fair Lending laws and considers the impact of the company’s businesses, operations and programs from a social responsibility perspective, taking into account the interests of stockholders, clients, suppliers, employees, communities and regulators.
For additional information regarding the company’s commitment to ESG and corporate social responsibility and recent initiatives, see “Oversight of Environmental, Social and Governance Matters” on page 33 and “Helpful Resources” on page 100. | |||
| Finance
3 Independent Members 8 Meetings in 2020 |
Jeffrey A. Goldstein (Chair), Joseph J. Echevarria, Elizabeth E. Robinson
The Finance Committee assists the Board in fulfilling its responsibilities with respect to the monitoring and oversight of the company’s financial resources and strategies. The Committee’s responsibilities and duties include reviewing the company’s capital structure, annual capital plan, capital raising and capital distributions as well as the financial aspects of our recovery and resolution plans. In addition, the Committee is responsible for approving and recommending to our Board our annual capital plan submission to the applicable regulators as well as our capital management policy. | |||
| * | Mr. Izzo joined the CGNSR Committee in August 2020, when he joined the Board. |
| 40 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| Human
5 Independent Members |
Linda Z. Cook (Chair), Jeffrey A. Goldstein, Edmund F. “Ted” Kelly, Samuel C. Scott III, Frederick O. Terrell*
Compensation and Benefits. The HRC Committee is generally responsible for overseeing our employee compensation and benefit policies and programs, our management development and succession programs, the development and oversight of a succession plan for the CEO position and our diversity and inclusion programs. The Committee also administers and makes equity and/or cash awards under plans adopted for the benefit of our employees to the extent required or permitted by the terms of these plans, establishes any related performance goals and determines whether and the extent to which these goals have been attained. The Committee also evaluates and approves the total compensation of the CEO and all other executive officers and makes recommendations concerning equity-based plans, which recommendations are subject to the approval of our entire Board. The Committee also oversees certain retirement plans that we sponsor to ensure that: (1) they provide an appropriate level of benefits in a cost-effective manner to meet our needs and objectives in sponsoring such plans; (2) they are properly and efficiently administered in accordance with their terms to avoid unnecessary costs and minimize any potential liabilities to us; (3) our responsibilities as plan sponsor are satisfied; and (4) financial and other information with respect to such plans is properly recorded and reported in accordance with applicable legal requirements.
CEO Compensation. The Committee reviews and approves corporate goals and objectives relevant to the compensation of our CEO, reviews his performance in light of those goals and objectives, and determines and approves his compensation on the basis of its evaluation. With respect to the performance evaluation and compensation decisions regarding our CEO, the Committee reports its preliminary conclusions to the other independent directors of our full Board in executive session and solicits their input prior to finalizing its decisions.
Executive Compensation. The Committee establishes the compensation of executive officers, oversees executive compensation and reviews the appointment, promotion, performance and potential of senior managers of the company.
Delegated Authority. The Committee has delegated to our CEO the responsibility for determining equity awards to certain employees, other than to himself or to our executive officers, who are eligible to receive grants under our 2019 Long-Term Incentive Plan (“LTIP”). This delegated authority extends to both annual equity awards and equity awards granted outside of the annual awards process (“off-cycle awards”). Our CEO’s delegated authority is subject to certain limitations, including the aggregate shares represented by plan awards that may be granted to any one individual in any calendar year (100,000, to any one individual, with a maximum of 1,000,000 aggregate shares represented by plan awards for off-cycle awards in any calendar year). In addition, the Committee may delegate limited authority to our CEO to grant awards under the LTIP beyond these limits in connection with specific acquisitions or similar transactions.
Management Involvement. Our management provides information and recommendations for the Committee’s decision-making process regarding the amount and form of executive compensation, except that no member of management will participate in the decision-making process with respect to his or her own compensation. The “Compensation Discussion & Analysis” starting on page 49 discusses the role of our CEO in determining or recommending the amount and form of executive compensation. In addition, we address the respective roles of our management, its advisors and the Committee’s independent outside compensation advisor in determining and recommending executive compensation on page 42.
| |||
| * | Mr. Terrell joined the HRC Committee in May 2020. |
| BNY Mellon Ø | 2021 Proxy Statement | 41 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Corporate Governance and Board Information |
| Risk Committee
4 Independent Members |
Edmund F. “Ted” Kelly (Chair), Jeffrey A. Goldstein, Elizabeth E. Robinson, Alfred W. “Al” Zollar*
See “Oversight of Risk” on page 37 above for a discussion of the Risk Committee’s duties and responsibilities, which include: (1) review and approval of significant enterprise-wide risk management policies and associated risk management frameworks; (2) review and approval of the company’s risk appetite statement; (3) review of significant risk exposures; (4) evaluation of risk exposure and tolerance; (5) review and evaluation of the company’s practices with respect to risk assessment and risk management; and (6) review, with respect to risk management and compliance, of certain significant management and/or regulatory reports. Our Board has determined that Mr. Kelly satisfies the independence requirements to serve as Chair of the Risk Committee set out in the Board of Governors of the Federal Reserve System rules and has experience in identifying, assessing and managing risk exposures of large, complex financial firms based upon his senior leadership experience at a multi-line insurance company. | |||
| Technology
3 Independent Members 6 Meetings in 2020 |
Alfred W. “Al” Zollar (Chair), Jennifer B. Morgan**, Elizabeth E. Robinson
Technology Planning and Strategy. The Technology Committee is responsible for reviewing and approving the company’s technology planning and strategy, reviewing significant technology investments and expenditures, and monitoring and evaluating existing and future trends in technology that may affect our strategic plans, including monitoring overall industry trends. The Committee receives reports from management concerning the company’s technology and approves related policies or recommends such policies to the Board for approval, as appropriate. The Committee also oversees risks associated with technology. For example, in addition to the cybersecurity program update that is provided to the full Board on an annual basis, the Technology Committee is regularly apprised of information security and cybersecurity matters through periodic and as-needed reporting from management. |
Compensation Consultants to the HRC Committee
| * | Mr. Zollar joined the Risk Committee in May 2020. |
| ** | Ms. Morgan is currently a member of the Technology Committee but will not be standing for re-election at the 2021 Annual Meeting. |
| 42 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
Table of Contents
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Director Compensation |
| BNY Mellon Ø | 2021 Proxy Statement | 45 |
Table of Contents
| ITEM 1. ELECTION OF DIRECTORS > Director Compensation |
2020 Director Compensation Table
The following table provides information concerning the compensation of each independent director who served in 2020. Mr. Gibbons did not receive any compensation for his services as a director.
| Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($)(2) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings |
All Other ($)(3) |
Total ($) | ||||||||||||||||||||
| Linda Z. Cook |
$ | 150,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 335,000 | |||||||||||||||
| Joseph J. Echevarria(1) |
$ | 305,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 490,000 | |||||||||||||||
| Jeffrey A. Goldstein(1) |
$ | 145,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 330,000 | |||||||||||||||
| Ralph Izzo(1) |
$ | 27,500 | $ | 0 | $ | 0 | $ | 0 | $ | 27,500 | |||||||||||||||
| Edmund F. “Ted” Kelly |
$ | 155,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 340,000 | |||||||||||||||
| Jennifer B. Morgan(1) |
$ | 125,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 310,000 | |||||||||||||||
| Elizabeth E. Robinson(1) |
$ | 125,000 | $ | 185,000 | $ | 0 | $ | 125,000 | $ | 435,000 | |||||||||||||||
| Samuel C. Scott III |
$ | 145,000 | $ | 185,000 | $ | 0 | $ | 1,043 | $ | 331,043 | |||||||||||||||
| Frederick O. Terrell |
$ | 55,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 240,000 | |||||||||||||||
| Alfred W. “Al” Zollar |
$ | 145,000 | $ | 185,000 | $ | 0 | $ | 0 | $ | 330,000 | |||||||||||||||
| (1) | Elected to defer all or part of cash compensation pursuant to the Director Deferred Compensation Plan. |
| (2) | Amount shown represents the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codification (or “FASB ASC”) 718 Compensation-Stock Compensation for 4,947 deferred stock units granted to each independent director in April 2020, using the valuation methodology for equity awards set forth in note 17 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Annual Report”). As of December 31, 2020, each of Mses. Cook, Morgan and Robinson and Messrs. Echevarria, Goldstein, Kelly, Scott, Terrell and Zollar owned 4,947 unvested deferred stock units. |
| (3) | The amount disclosed for Ms. Robinson reflects compensation paid in connection with her role as Chair of the Board of Directors of BNY Mellon Government Securities Services Corp. The amount disclosed for Mr. Scott reflects the amount of a 5% discount on purchases of phantom stock when dividend equivalents are reinvested under the Bank of New York Directors Plan. |
| 46 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION | ||||
Item 2. Advisory Vote on Compensation
|
|
Page 48 |
| ||
|
|
Page 49 |
| ||
|
|
Page 49 |
| ||
|
|
Page 54 |
| ||
|
|
Page 55 |
| ||
|
|
Page 65 |
| ||
|
|
Page 70 |
| ||
|
|
Page 70 |
| ||
| EXECUTIVE COMPENSATION TABLES AND OTHER COMPENSATION DISCLOSURES |
|
Page 71 |
| |
|
|
Page 71 |
| ||
|
|
Page 73 |
| ||
|
|
Page 74 |
| ||
|
|
Page 75 |
| ||
|
|
Page 76 |
| ||
|
|
Page 77 |
| ||
|
|
Page 79 |
| ||
|
|
Page 82 |
| ||
| BNY Mellon Ø | 2021 Proxy Statement | 47 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION
|
> Resolution | |||
Proposal
We are asking our stockholders to approve the following resolution:
RESOLVED, that the stockholders approve the 2020 compensation of the named executive officers (“NEOs”), as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K of the SEC (including the “Compensation Discussion & Analysis,” the compensation tables and other narrative executive compensation disclosures).
We highly value dialogue and engagement with our stockholders and other stakeholders, including employees, clients and the communities we serve, with respect to our executive compensation program.
Background
| • We have provided our stockholders with the opportunity for an annual advisory vote on our executive compensation program since 2009 and have consistently received support, with an average of 97% stockholder approval at our Annual Meetings during the prior three years. For direct stockholder feedback on our executive compensation framework and other issues of importance to our investors, we have continued our annual investor engagement process during 2020 and 2021, reaching out to investors representing over 50% of our outstanding common shares as well as proxy advisory firms and other stakeholders.
• Our approach to compensation continues to be designed to directly link pay to performance, recognize both corporate and individual performance, promote long-term stock ownership, attract, retain and motivate talented executives and balance risk and reward, while taking into consideration stakeholder feedback and market trends and practices. |
The Board recommends that you vote “FOR” the approval of the 2020
|
Voting
Your vote on this resolution is advisory. Although the Board is not required to take any action in response, the Board and the HRC Committee intend to evaluate the results of the 2021 vote when making future decisions regarding the compensation of our NEOs.
| 48 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION
|
> Compensation Discussion & Analysis | |||
Overview
In this Compensation Discussion & Analysis, we review the objectives and elements of the company’s executive compensation program, its alignment with company performance, and the 2020 compensation decisions for our NEOs. The company’s say-on-pay proposals over the previous three years have received an average of 97% support from stockholders, with last year’s say-on-pay proposal receiving the support of 95% of stockholders. After considering the vote and other factors in its annual review of our programs, the HRC Committee determined to maintain its general approach to our annual compensation program for 2020. Accordingly, our 2020 executive compensation program continued to feature OEPS as the key performance assessment metric for determining incentive awards. In addition, the HRC Committee determined to continue to base the earnout for the PSU awards made in 2020 on average operating margin and average revenue growth. Following company engagement with our stakeholders, the HRC Committee determined to revise the PSU metrics for the 2021 awards to include Return on Average Tangible Common Equity (“ROTCE”) and relative TSR which is designed to reinforce alignment with stockholder interests (as discussed in more detail on page 63).
Named Executive Officers
Our NEOs for 2020 are set forth in the table below.
| Thomas P. “Todd” Gibbons Chief Executive Officer
|
| Robin Vince Vice Chair and CEO of Market Infrastructure
|
| Emily H. Portney Senior Executive Vice President and Chief Financial Officer (“CFO”)
|
| Bridget E. Engle Senior Executive Vice President and Head of Technology and Operations
|
| Catherine M. Keating Senior Executive Vice President and CEO of Wealth Management
|
| Michael P. Santomassimo Former Senior Executive Vice President and CFO
|
| Mitchell E. Harris Former Senior Executive Vice President and CEO of Investment Management
|
Leadership Transition
The HRC Committee’s review of our 2020 compensation program and the individual compensation decisions made by the HRC Committee for our NEOs were informed by the transitions in a number of key leadership positions that occurred during 2020. In addition to appointing Mr. Gibbons as CEO, the Board appointed Mr. Vince to serve as Vice Chair of the company and CEO of Market Infrastructure and Ms. Portney to serve as CFO. Ms. Engle’s responsibilities were expanded to include the company’s operations function. Ms. Keating was appointed as an executive officer of the company, in recognition of the importance of Wealth Management to the long-term strategy of the company. Accordingly, the HRC Committee considered these new and expanded responsibilities of our NEOs in making compensation decisions. The discussion regarding “NEO Appointments and Compensation” begins on page 56.
| BNY Mellon Ø | 2021 Proxy Statement | 49 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
COVID-19 Pandemic Response
The company has implemented a number of policies and programs designed to support our operations and resiliency, as well as the safety and wellbeing of our employees and their families in light of the unprecedented circumstances surrounding the COVID-19 pandemic. A description of programs and resources provided to our employees during the COVID-19 pandemic can be found in the “Introduction” on page 3. Throughout the year, the HRC Committee met to discuss the company’s COVID-19 pandemic response and receive updates from management, and compensation decisions for 2020 considered management’s performance in maintaining the operations of the company and building a caring, healthy and resilient culture supportive of employee wellbeing.
In addition, the HRC Committee considered the impact of the COVID-19 pandemic on the company’s financial performance and the corresponding effect on the company’s incentive plan results and PSU earnout. Those decisions are discussed in more detail beginning on page 57.
2020 Key Compensation Practices
The following table summarizes the key features of our executive compensation program. As highlighted in the table, each component of the program is designed to compensate our executive officers for performance in a manner that is aligned with our stockholders’ interests and consistent with our high standards for risk management.
| Program Feature | Practice | |
|
Balanced approach for incentive compensation |
• Incentive compensation is earned on a combination of corporate and individual performance
• Impact of the individual modifier permits incentive award increases of up to 50% and decreases down to $0, providing flexibility for greater differentiation based on individual performance and, if appropriate, business unit performance
• Earnout on PSUs granted in 2018, 2019 and 2020 tied to 3-year average revenue growth, as adjusted, and 3-year average operating margin, as adjusted, to augment the OEPS metric in our balanced scorecard with complementary top- and bottom-line metrics; Earnout on PSUs granted in 2021 tied to ROTCE and relative TSR to focus on revenue growth, expense management, capital efficiency, and greater alignment with stockholder interests | |
|
Directly link pay to performance |
• Incentive compensation deferred in the form of PSUs comprises 50% of target total incentive compensation for our CEO and comprises 45% for our other continuing NEOs
• Incentive compensation deferred in the form of RSUs comprises 25% of target total incentive compensation for our continuing NEOs
• Corporate component metric for incentive compensation based on OEPS reinforces management’s focus on company-wide performance and organic growth | |
|
Promote long-term stock ownership |
• Deferred equity (PSUs and RSUs) comprises 75% of target total incentive compensation for our CEO and comprises 70% for our other continuing NEOs
• PSUs cliff vest after the end of a three-year performance period, and RSUs vest in equal installments over three years
• Robust policies prohibit hedging and pledging of company stock and derivative securities
• Our CEO must acquire and retain company stock equal to six times base salary, and other NEOs must acquire and retain stock equal to four times base salary, plus, in each case, an additional amount equal to one times base salary to provide a cushion against stock volatility | |
| 50 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Executive Pay Practice Highlights
The HRC Committee takes a rigorous approach to the review and consideration of the pay practices that we have adopted. Accordingly, there are certain practices that we undertake to ensure we serve our stockholders’ long-term interests or the interests of our other stakeholders and to align with our high risk management standards, and other practices that have not been implemented because we believe they do not serve these goals.
| What we do: | What we don’t do: | |
|
ü Directly link pay to performance
ü Require sustained financial performance to earn full amount of long-term awards
ü Promote long-term stock ownership through deferred equity compensation and stock ownership requirements
ü Balance risk and reward in compensation
ü Use a balanced approach for determining incentives with both corporate and individual goals
ü Balance incentives for short- and long-term performance with a mix of performance metrics, fixed and variable compensation and cash and equity
ü Conduct a robust stakeholder outreach program
ü Comprehensive clawback and recoupment policies |
× No fixed-term employment agreements
× No single-trigger change-in-control benefits
× No excessive severance benefits
× No excessive perquisites or benefits
× No severance-related tax gross-ups
× No hedging, pledging or short sales of our stock
× No dividend equivalents paid on unearned incentive PSUs or RSUs | |
The “Risk Assessment” discussion beginning on page 61 and the “How We Address Risk and Controls” section on page 70 contain more information about our compensation risk management practices. Each of our pay practices, including with respect to our Clawback and Recoupment Policy, are described more fully beginning on page 68.
| BNY Mellon Ø | 2021 Proxy Statement | 51 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
2020 Incentive Compensation Elements
We believe that the structure and elements of our 2020 incentive compensation program for our NEOs align the interests of our executives with the interests of our stockholders by focusing our executives on the achievement of sustainable, long-term growth for the company. The following chart provides an overview of these structural elements, including the relevant vesting and performance standards that provide a multi-year perspective on 2020 achievements. These pay components are unchanged from the prior year, except in the case of the performance metrics for the 2021 PSU awards, as discussed further on page 63.
| Element |
Performance Metrics |
|
How It Pays | Links to Performance | ||||
| Cash |
Award grant based on OEPS
|
• Single cash payment in February 2021
|
• OEPS ties to organic growth, which we believe is key to ensuring both revenue and costs are optimized
• ROTCE and relative TSR focus on top- and bottom-line metrics, capital efficiency and enhancing the alignment of compensation with stockholder interests
• Equity awards motivate and reward achievement of long-term growth and reinforce the alignment of the interests of executive officers and stockholders
| |||||
| PSUs
|
Award earnout for 2021 grants to be based on ROTCE and relative TSR |
• Granted in February 2021
| ||||||
| • Earned between 0% – 150% based on the achievement of performance metrics over 3-year period
• Cliff vest after the end of 3-year performance period
| ||||||||
| RSUs |
Award grant based on OEPS |
• Granted in February 2021
• RSUs vest in equal installments over three years
| ||||||
| 52 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
2020 Compensation Outcomes
The following table provides a summary of the HRC Committee’s key compensation decisions and the impact of performance on the compensation of our continuing NEOs for 2020.
| Compensation Category |
Key Decisions and Impact of Performance | |
| Base Salary and Target Incentive Decisions |
| |
|
Base Salary |
• No changes were made to the base salaries for Mr. Gibbons, Ms. Engle and Ms. Keating.
• To reflect her new role as CFO of the company, the HRC Committee set Ms. Portney’s base salary at $600,000.
• Upon joining the company as Vice Chair of the company and CEO of Market Infrastructure, Mr. Vince’s base salary was set at $750,000.
| |
|
Target Incentives |
• In August 2020, the HRC Committee approved an increase to Mr. Gibbons’ target incentive from $9.75 million to $13.25 million for 2020 to reflect his appointment as CEO.
• In connection with their new and/or expanded roles, Ms. Portney’s target incentive was set at $4.4 million on an annualized basis, Ms. Engle’s target incentive was increased to $6.4 million, and Mr. Vince’s target incentive was set at $9.25 million, pro-rated for the portion of the year he was employed by the company.
• Ms. Keating’s target incentive of $4.4 million was unchanged from the prior year.
| |
|
Factors Considered |
• Input from independent compensation consultant, CAP, on market trends, compensation program practices, and compensation levels.
• Peer group and industry compensation practices with respect to the CEO, CFO, Vice Chair and Head of Technology and Operations positions.
| |
| Incentive Compensation Outcomes |
| |
|
Objective Metrics |
• Minimum Funding Requirement Met: Common equity Tier 1 ratio of at least 8.5% was met
• OEPS: 2020 OEPS was $0.01 lower than 2019 OEPS
| |
|
Corporate Component |
• Approved corporate component of 95%
| |
| • Earnings during 2020 reflect, among other items, the inability to engage in planned buybacks due to regulatory restrictions related to the economic impact of the COVID-19 pandemic
• Impact of market outperformance is limited to 25% under our balanced scorecard
• Individual modifier provides greater differentiation based on individual performance by permitting incentive award increases of up to 50% and decreases down to $0, and individual NEO modifiers ranged from 98% to 110%
| ||
|
2018 PSU Awards |
• Earned at 85%
• Reflected impacts of equity markets and currency translation per metrics’ definitions; HRC Committee exercised discretion (per award terms) to adjust for interest rate environment due to the COVID-19 pandemic
| |
| BNY Mellon Ø | 2021 Proxy Statement | 53 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
The graphs below summarize key aspects of our 2020 performance that the HRC Committee considered in evaluating the 2020 performance of our named executive officers. For a more detailed discussion of our 2020 performance, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Annual Report to stockholders.
| Reported EPS | OEPS* | |
|
|
* For a reconciliation and explanation of this Non-GAAP measure, see Annex A. | |
| Multi-Year Relative TSR
| ||
|
| ||
| 54 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
2020 Target Direct Compensation Structure*
2020 Target Incentive Compensation Elements*
PSUs are earned between 0% – 150% based on the achievement of performance metrics over a three-year performance period and cliff-vest after the three-year performance period.
RSUs generally vest in equal installments over three years.
| * | Calculations include annual target incentive compensation only to our continuing NEOs and exclude one-time awards made in connection with hiring or to promote continuity as discussed below. |
| BNY Mellon Ø | 2021 Proxy Statement | 55 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
NEO Appointments and Compensation
The HRC Committee oversaw a year of transition for our NEOs, including new appointments and expanded roles for some of our NEOs consistent with the company’s long-term strategy and focus on organic growth.
Mr. Gibbons was appointed CEO, effective March 30, 2020. Previously, he served as Interim CEO beginning on September 27, 2019. Following Mr. Gibbons’ appointment, the HRC Committee approved in August 2020 an increase to Mr. Gibbons’ target incentive from $9,750,000 to $13,250,000 for 2020. There was no change to his base salary of $1,250,000.
Ms. Portney was appointed CFO, effective July 19, 2020. She succeeded Michael Santomassimo, who resigned as CFO effective July 17, 2020. Prior to her appointment as CFO, Ms. Portney led the client management, sales and service teams for the company’s Asset Servicing business globally and oversaw the Americas region for the Asset Servicing business. On August 10, 2020, the HRC Committee approved a new compensation arrangement for Ms. Portney in connection with her appointment as CFO of the company. Ms. Portney’s base salary was set at $600,000 and her annualized target incentive was set at $4,400,000, establishing Ms. Portney’s 2020 annualized target direct compensation at $5,000,000. The amounts set forth in the “2020 Annual Target Direct Compensation Table” reflect Ms. Portney’s annualized target, and the amounts in the “Awarded 2020 Total Direct Compensation Table” reflect her effective 2020 base salary and target incentive level at a blended rate, taking into consideration the compensation levels that applied for the period prior to, and the increased compensation levels that applied for the period following, her appointment as CFO.
Mr. Vince was appointed Vice Chair of the company and CEO of Market Infrastructure, effective October 1, 2020. In connection with his appointment, the HRC Committee set his base salary at $750,000, effective upon the commencement of his employment with the company, and approved a target incentive for 2020 of $9,250,000, pro-rated for the portion of the year he was employed with the company (and to be paid in an amount not less than the pro-rated target). The HRC Committee also awarded a $500,000 cash sign-on bonus paid upon his start with the company, a buy-out award consisting of $3,948,159 in cash which was paid in January 2021, and an equity buy-out award of 98,337 RSUs granted in November 2020 that vests in two installments in connection with the forfeiture of awards from his previous employer. Mr. Vince may be entitled to receive additional buyout awards if he is required to forfeit certain other awards from his former employer as a result of his employment with the company. In addition, any equity awards that Mr. Vince is granted (other than RSUs granted in connection with his buyout award) prior to his turning 55 years old will continue to vest according to their terms if Mr. Vince complies with all applicable covenants and (i) his employment is terminated without cause, (ii) his employment is terminated pursuant to mutual agreement, or (iii) he voluntarily resigns as a result of a material and adverse change in duties, responsibilities or scope of his position except to the extent required by law or regulation. Also, in accordance with the terms of his offer letter, RSUs granted to Mr. Vince in connection with his buyout awards shall continue to vest unless his employment is terminated for cause. The amounts set forth in the “2020 Annual Target Direct Compensation Table” reflect Mr. Vince’s annualized target, and the amounts in the “Awarded 2020 Total Direct Compensation Table” reflect his compensation approved by the HRC Committee and are pro-rated for the portion of 2020 that Mr. Vince was employed by the company.
Ms. Engle was appointed Head of Technology and Operations in August 2020. Prior to this appointment, Ms. Engle served as Head of Technology. In connection with her appointment as Head of Technology and Operations, Ms. Engle’s target total direct compensation for 2020 was increased to $7,000,000, reflecting an unchanged base salary of $600,000 as compared to the prior year and an increased target incentive of $6,400,000 to reflect her expanded responsibilities.
Ms. Keating, Senior Executive Vice President and CEO of Wealth Management, was appointed an executive officer of the company effective October 1, 2020. Her base salary for 2020 was set at $600,000, and her target incentive was set at $4,400,000, both of which were unchanged from the period prior to her appointment.
In determining the appropriate levels of compensation described above for Mr. Gibbons, Ms. Portney, Mr. Vince, and Ms. Engle, the HRC Committee sought input and advice from its independent compensation consultant, CAP, on market trends and compensation program practices with respect to setting compensation levels for the CEO, CFO, Vice Chair and Head of Technology and Operations positions, including companies in our peer group and in our industry.
| 56 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
2020 Annual Target Direct Compensation
In the first quarter of each year, the HRC Committee establishes annual target total direct compensation for each executive by considering competitive data, executive position and level of responsibility and, for executives other than our CEO, our CEO’s recommendation. Targets are reviewed annually and adjusted if determined to be appropriate by the HRC Committee. The HRC Committee may also adjust target compensation to reflect changes in or new responsibilities, as discussed above.
In 2020, the total target direct compensation for each continuing NEO was as follows:
| Name |
Salary | Target Incentive | Annual Target Total Direct Compensation(1) | |||
| Thomas P. “Todd” Gibbons Chief Executive Officer |
$1,250,000 | $13,250,000 | $14,500,000 | |||
| Robin Vince Vice Chair and CEO of Market Infrastructure |
$750,000 | $9,250,000 | $10,000,000 | |||
| Emily H. Portney Senior Executive Vice President and Chief Financial Officer |
$600,000 | $4,400,000 | $5,000,000 | |||
| Bridget E. Engle Senior Executive Vice President and Head of Technology and Operations |
$600,000 | $6,400,000 | $7,000,000 | |||
| Catherine M. Keating Senior Executive Vice President and CEO of Wealth Management |
$600,000 | $4,400,000 | $5,000,000 | |||
| (1) | Amounts in this column reflect annualized targets for Mr. Vince and Ms. Portney. As discussed in more detail on page 56, their actual incentive award targets were pro-rated or blended based on the portion of the year they were in their new roles. |
One-Time Equity Awards
During 2020, the HRC Committee also made one-time grants of RSUs to certain members of the Executive Committee (other than Mr. Gibbons), designed to provide for continuity among our management team during and beyond the search for and transition to a permanent CEO. These awards generally will vest in full on the third anniversary of the grant date, subject to the executive’s continued employment through such date, and are not eligible for retirement vesting treatment. Ms. Engle received a grant of 40,404 RSUs in February 2020, and Ms. Keating received a grant of 20,202 RSUs in February 2020 and a grant of 20,706 RSUs in August 2020. Mr. Santomassimo received a grant of 40,404 RSUs in February 2020, which was forfeited in connection with his resignation.
2020 Incentive Awards
One hundred percent of the total incentive award for each NEO is conditional upon the company meeting a minimum funding requirement and is subject to reduction or elimination based on an individual risk scorecard. Incentive awards, including the effect of the individual modifier, can range from 0% up to 150% of the individual’s target award. This allows the HRC Committee to differentiate payouts based on each NEO’s achievement of individual and business goals set in support of overall corporate objectives and tied directly to each individual’s areas of responsibility and leadership goals.
Minimum Funding Requirement
A common equity Tier 1 ratio of at least 8.5% was established as a minimum funding requirement for our incentive compensation. Payment of incentive compensation to any executive is conditioned upon meeting this goal. This threshold funding goal was met for 2020, with a common equity Tier 1 ratio of 13.1% at December 31, 2020, calculated under the Advanced Approach.
Balanced Scorecard
We use a “balanced scorecard” approach for our incentive compensation determinations. Our approach is designed to be a comprehensive analysis by the HRC Committee of corporate and individual performance based on quantitative and qualitative metrics as appropriate. Our balanced scorecard provides for the following:
| • | Corporate Component. The corporate component of the balanced scorecard is based on objective company-wide performance metrics that are designed to drive achievement of near-term business strategies. The HRC Committee establishes the applicable metric or metrics at the start of the performance period and has |
| BNY Mellon Ø | 2021 Proxy Statement | 57 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
| discretion to consider other factors to obtain a holistic picture of our performance (additional detail on the factors considered is provided below). Consistent with its approach to the 2019 balanced scorecard design, the HRC Committee based 100% of the 2020 corporate component on OEPS. |
| • | Individual Modifier. The individual modifier portion of the balanced scorecard provides an opportunity to recognize and differentiate individual actions and contributions in final pay decisions. For 2020, as in 2019, the HRC Committee established the parameters of the individual modifier to permit incentive award increases of up to 50% and decreases down to $0, providing flexibility for differentiation based on individual performance. |
| • | Risk Assessment. The HRC Committee has the discretion to reduce an individual’s corporate component, individual modifier and/or total incentive award based on an assessment of the individual’s risk scorecard, as described in the “Risk Assessment” section on page 61. |
As illustrated below, incentive awards are paid out in a combination of cash, PSUs (which are earned between 0% – 150% based on the achievement of performance metrics over a three-year performance period and cliff-vest at the end of such period) and RSUs (which vest in equal installments over three years).
| * | In calculating the number of PSUs and RSUs to grant, the HRC Committee divided the value of PSUs and RSUs awarded by $44.22, the average closing price of our common stock on the NYSE for the 15 trading days from January 4, 2021 through January 25, 2021, to mitigate the impact of short-term volatility in our stock price. |
Corporate Component
The corporate component metrics are reviewed annually by the HRC Committee to select a measure or set of measures that align with our strategy and are appropriate for measuring annual performance. The same corporate component metrics and goals apply to each NEO.
In February 2020, the HRC Committee determined to maintain management’s focus on company-wide performance, including driving organic growth, which we believe is the key to ensure both revenue and costs are optimized. Organic growth emphasizes the expansion of our business independent of external factors such as market performance (including the impact of the COVID-19 pandemic). As a result, as in 2019, the HRC Committee again established OEPS as the sole corporate component metric. The HRC Committee may also consider other factors (including, for example, our performance relative to our peers, market conditions, relative TSR and interest rate environment) in determining the earnout within the OEPS earnout range and also in determining the overall corporate component payout.
OEPS. In February 2020, the HRC Committee established the guidelines below for a range of incentive payouts based on a comparison of 2020 OEPS to 2019 OEPS. The guidelines set by the HRC Committee include the intended upside and downside leverage, which is the amount by which our prior year and current year OEPS is magnified to determine the OEPS earnout portion of the corporate component. No leverage is applied if OEPS growth is within 3% to 7% as compared against the prior year OEPS. As adopted by the HRC Committee for purposes of the corporate component metric, OEPS is defined as reported earnings per share excluding merger and integration, restructuring, litigation expense and other significant, unusual items considered by the HRC Committee in its discretion.
| 58 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Earnout Grid:
| 2020 OEPS | Percent of 2019 OEPS ($4.02) | Earnout Range as a Percent of Target |
Intended Leverage | |||
|
> $4.62 |
> 115% |
150% |
| |||
|
$4.29 — $4.62
|
107% — 115%
|
100% — 140%
|
3:1
| |||
|
$4.14 — $4.29
|
103% — 107%
|
98% — 100%
|
1:1
| |||
| $3.41 — $4.14
|
85% — 103%
|
40% — 98%
|
4:1
| |||
| < $3.41
|
< 85%
|
0%
|
| |||
HRC Committee Determinations
Our 2020 OEPS was $4.01, and our OEPS for 2019 was $4.02.
In considering the company’s performance in 2020, the HRC Committee determined that it was appropriate to adjust OEPS to account for the impact of not being able to engage in planned share buybacks due to regulatory restrictions adopted in response to the economic impact of the COVID-19 pandemic. The HRC Committee also determined to continue its practice of including only 25% of any market-driven impact on OEPS. The HRC Committee considered other impacts of the COVID-19 pandemic on company performance but determined not to make any additional adjustments.
These considerations yielded a calculated OEPS for purposes of the corporate component of $4.14, which corresponds to an earnout of 98% of target. The HRC Committee further determined to decrease the final earnout in its discretion to 95%.
Individual Modifier
In February 2020, the HRC Committee approved individual modifier strategic and leadership objectives for our NEOs. The HRC Committee approved and recommended to the Board strategic and leadership objectives for Ms. Portney in October 2020 in connection with her appointment as CFO. Strategic objectives were approved for Mr. Vince in December 2020 in connection with the commencement of his employment. The HRC Committee did not approve specific leadership objectives for Mr. Vince given his joining the company late in 2020. The strategic and leadership objectives for each of our NEOs include tailored goals related to the business function of the NEO and also include individual goals related to leadership, talent and succession, and diversity and inclusion. None of the individual strategic and leadership objectives had any specific weighting; the objectives are intended to be used, together with other information the HRC Committee determines relevant, to develop a holistic evaluation of individual performance.
In December 2020, January 2021 and February 2021, the HRC Committee reviewed and considered each continuing NEO’s performance, including considering recommendations and performance assessments from our CEO for each of the other NEOs. In the first quarter of 2021, the HRC Committee determined each continuing NEO’s individual modifier. For Mr. Gibbons, the HRC Committee reviewed his performance self-assessment and finalized its decision after reporting its preliminary evaluation to the other independent directors and soliciting their input. For each of the other continuing NEOs, the HRC Committee reviewed his or her performance self-assessment, considered the December 2020, January 2021, and February 2021 feedback from our CEO, considered applicable business unit performance, and finalized its decision after soliciting input from the other independent directors.
| BNY Mellon Ø | 2021 Proxy Statement | 59 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Based on the determinations below, the HRC Committee granted Mr. Gibbons 97% of his target total incentive award (25% of which was in the form of cash, 50% in the form of PSUs and 25% in the form of RSUs). The remaining NEOs were granted percentages ranging from 93% to 105% of their target total incentive awards (30% of which was in the form of cash, 45% in the form of PSUs and 25% in the form of RSUs).
| Name |
Key Results | Corporate Component |
Individual Modifier |
% of Target Earned |
||||||||||
| Thomas P. “Todd” Gibbons Chief Executive Officer |
Strategic: adjusting for the impact of the COVID-19 pandemic, OEPS exceeded prior year; sustained investments through cost discipline and productivity gains; led the company’s COVID-19 pandemic response focusing on support and execution, creating stress scenarios for the firm and establishing a firmwide control exceptions management process ahead of transition to work from home; all resiliency efforts met or exceeded 2020 outcomes despite the COVID-19 pandemic, natural disasters in Tennessee and unprecedented market volatility; focused improvement on the client experience, investing in developing deep and credible relationships with clients
Leadership: executed a smooth leadership transition in Asset Management; led the firm in the adoption of rigorous diversity and inclusion goals; worked closely with Board on succession planning and continuing director refreshment |
95 | % | 102 | % | 97 | % | |||||||
| Robin Vince Vice Chair and CEO of Market Infrastructure |
Strategic: developed relationships with key internal and external stakeholders; developed an initial understanding of the company’s major business lines and operations, in particular for Clearance and Collateral Management, Treasury Services, Markets and Pershing | 95 | % | 100 | % | 100 | %(1) | |||||||
| Emily H. Portney Senior Executive Vice President and Chief Financial Officer |
Strategic: executed strategic initiatives designed to promote growth in strong partnership with risk management; continued to advance initiatives with respect to third party governance and financial reporting; began rollout of technology solutions designed to enhance financial reporting systems
Leadership: managed a smooth CFO transition; improved employee engagement with a focus on attracting, retaining and developing diverse talent |
95 | % | 110 | % | 105 | % | |||||||
| Bridget E. Engle Senior Executive Vice President and Head of Technology and Operations |
Strategic: enhanced the stability, resiliency and cybersecurity of the firm’s infrastructure; met all resiliency targets despite the COVID-19 pandemic; strengthened risk culture through fully integrated risk management and information security programs; successfully completed merger of operations and technology functions to increase efficiency and resiliency
Leadership: significantly increased employee satisfaction scores within group; successfully built and launched engagement site for technology employees; developed systems to reinforce culture of active and continuous learning; continued to focus recruiting efforts to promote diversity |
95 | % | 105 | % | 100 | % | |||||||
| Catherine M. Keating Senior Executive Vice President and CEO of Wealth Management |
Strategic: delivered growth from client base; successfully enhanced products and solutions for wealth management clients; continued to leverage and improve technology solutions for an improved client and advisor experience
Leadership: met goals for executive succession management planning; improved wealth management leadership structure with a focus on diversity; lead cross-firm initiative to reduce silos and increase organic growth |
95 | % | 98 | % | 93 | % | |||||||
| (1) | Per the terms of Mr. Vince’s offer letter, he received 100% of his target incentive of $9,250,000, prorated for the portion of the year he was employed. |
In addition to the individual compensation decisions described above, the HRC Committee awarded Mr. Harris, who retired in October 2020, an annual incentive of $1,608,264 in cash and 84,862 RSUs after taking into consideration his years of service to the company. In addition, because Mr. Harris is over the age of 60, his previously granted equity awards will continue to vest according to their terms so long as Mr. Harris complies with all applicable covenants. Upon Mr. Santomassimo’s resignation in July 2020, he forfeited all unvested equity awards and was not awarded any incentive compensation for 2020.
| 60 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Awarded 2020 Total Direct Compensation
Based on the corporate component and individual modifier determinations described above, the total direct compensation awarded to each of our NEOs in respect of 2020 was as follows:
| Named Executive Officers |
Awarded Salary |
Awarded Incentive Compensation |
Total % of Target |
Awarded Total Compensation(1) | ||||||||||||||||||
|
Cash |
PSUs(2) |
RSUs(3) |
||||||||||||||||||||
| Thomas P. “Todd” Gibbons Chief Executive Officer |
$ | 1,250,000 | $ | 3,209,813 | $ | 6,419,624 | $ | 3,209,813 | 97 | % | $14,089,250 | |||||||||||
| Robin Vince Vice Chair and CEO of Market Infrastructure |
$ | 187,500 | $ | 697,541 | $ | 1,046,312 | $ | 581,284 | 100 | % | $2,512,637 | |||||||||||
| Emily H. Portney Senior Executive Vice President and Chief Financial Officer |
$ | 539,583 | $ | 1,083,926 | $ | 1,625,890 | $ | 903,272 | 105 | % | $4,152,671 | |||||||||||
| Bridget E. Engle(3) Senior Executive Vice President and Head of Technology and Operations |
$ | 600,000 | $ | 1,915,200 | $ | 2,872,800 | $ | 1,596,000 | 100 | % | $6,984,000 | |||||||||||
| Catherine M. Keating(3) Senior Executive Vice President and CEO of Wealth Management |
$ | 600,000 | $ | 1,228,920 | $ | 1,843,380 | $ | 1,024,100 | 93 | % | $4,696,400 | |||||||||||
| Michael P. Santomassimo(4) Former Senior Executive Vice President and Chief Financial Officer |
$ | 475,000 | — | — | — | — | $ 475,000 | |||||||||||||||
| Mitchell E. Harris Former Senior Executive Vice President and CEO of Investment Management |
$ | 499,809 | $ | 1,608,264 | $ | — | $ | 3,752,617 | 95 | % | $5,860,690 | |||||||||||
| (1) | The amounts reported as Awarded Total Direct Compensation differ substantially from the amounts determined under SEC rules as reported for 2020 in the “Total” column of the “2020 Summary Compensation Table” set forth on page 71. The above table is not a substitute for the “2020 Summary Compensation Table” and excludes the one-time equity awards granted by the HRC Committee in 2020 as discussed on page 57. |
| (2) | PSUs are earned between 0% – 150% based on the achievement of performance metrics over the 2021 – 2023 performance period. RSUs vest in equal installments over three years. |
| (3) | In addition to the incentive award disclosed in the table, Ms. Engle received $1,878,382 and Ms. Keating received $1,724,777 in RSUs described in more detail on page 57. |
| (4) | Mr. Santomassimo resigned in July 2020, did not receive an annual incentive award and forfeited all unvested equity. Mr. Santomassimo also received $1,878,382 in RSUs that were forfeited upon his resignation. |
Risk Assessment
In connection with its incentive compensation determinations, the HRC Committee assesses an individual risk scorecard for each NEO to formally connect our NEOs’ compensation with appropriate levels of risk-taking. The risk scorecard takes into account liquidity, operational, reputational, market, credit and technology risk categories by measuring:
| • | maintenance of an appropriate compliance program, including adhering to our compliance rules and programs; |
| • | protection of the company’s reputation, including reviewing our business practices to ensure that they comply with laws, regulations and policies, and that business decisions are free from actual or perceived conflicts; |
| • | management of operational risk, including managing operational losses and maintaining proper controls; |
| • | compliance with all applicable credit, market and liquidity risk limits, including understanding and monitoring risks associated with relevant businesses and new client acceptance, as well as appropriately resolving or escalating risk issues to minimize losses; and |
| • | meeting the company’s Internal Audit expectations, including establishing an appropriate governance culture, achieving acceptable audit results and remediating control issues in a timely manner. |
| BNY Mellon Ø | 2021 Proxy Statement | 61 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
The risk scorecard results for each continuing NEO were taken into account by the HRC Committee in determining each of the corporate component and individual modifier elements of the balanced scorecard, as well as the total incentive award. The HRC Committee has the ability to reduce or fully eliminate an NEO’s incentive award if the executive’s risk scorecard result is significantly below expectation. In addition, in the event that the NEO’s risk scorecard rating is lower than our acceptable risk tolerance, any previously awarded but unvested RSUs and PSUs will be subject to review and potential forfeiture, as determined by the HRC Committee. No downward adjustments were made to any continuing NEO’s incentive award for 2020 as a result of the risk assessment.
Reduction, Forfeiture or Clawback in Certain Circumstances
The company may cancel or claw back all or any portion of the RSUs and PSUs that constitute a portion of an NEO’s incentive award and may claw back some or all of an incentive award paid to an NEO in the form of cash if the NEO engages in conduct prohibited by our forfeiture and recoupment policy or our cash recoupment policy, respectively. For more information on these forfeiture and recoupment policies, see page 68.
PSUs
As part of our incentive compensation program, we grant PSUs each year to enhance the alignment of compensation with stockholder interests and to motivate and reward achievement of long-term growth. The PSUs granted each year are part of the total incentive compensation award for the prior year and are determined based on company and individual performance for the prior year as described above; for example, we consider the February 2020 PSU grant to be part of 2019 incentive compensation award. PSUs cliff vest after the end of three-year performance periods based on achievement of company performance metrics and continued service, with certain exceptions. The PSUs granted in 2018, which vested in February 2021, were earned at 85%, as described below. The PSUs granted in 2019 and 2020, which will vest in 2022 and 2023, respectively, will earn between 0% — 150%, in each case based on the achievement of performance metrics over the applicable three-year performance period. Granting awards annually with overlapping, multi-year performance periods allows the HRC Committee to annually review and update, as appropriate, the structure and performance metrics that we use in our PSU program.
Recent PSUs
Our recent PSU awards, including all awards outstanding for any portion of 2021, are illustrated below:
| 62 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
February 2018 PSUs
As previously disclosed in our 2019 proxy statement, the PSUs granted in February 2018 were to be earned between 0% — 150% based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year performance period commencing in 2018. The final payout determination was to be made by the HRC Committee in its discretion after considering any relevant adjustments, including market-related impacts.
At the end of the 2018-2020 performance period, the HRC Committee determined adjusted average operating margin and average revenue growth to be 32.6% and $236 million, respectively. In its determination, the HRC Committee reflected the equity market and currency translation adjustments included in the metric definitions and an additional discretionary adjustment as contemplated by the award terms for interest rates due to the unexpected effects of the COVID-19 pandemic. The HRC Committee set the resulting earnout at 85% by considering the noted factors and the Company’s overall performance relative to its peers.
February 2020 PSUs
PSUs granted in February 2020, the amounts of which were determined based on 2019 performance as discussed in last year’s proxy statement, are earned based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year performance period commencing in 2020. In connection with establishing the performance metrics for the 2020 PSUs, the HRC Committee considered the fact that OEPS had been used as the sole performance metric for the corporate component of the 2019 balanced scorecard and, similar to its approach to the 2019 PSUs, determined that use of average revenue growth and average operating margin would serve as complementary performance metrics that are consistent with the company’s emphasis on organic growth over market-related factors.
In its planning process, the HRC Committee determined that the earnout percentage for the February 2020 PSUs is to be based on the following table, with the final earnout percentage subject to the HRC Committee’s discretion:
|
Average Revenue Growth, as adjusted ($ in millions)
| ||||||||||||||||||||||||||||||
| Average Operating Margin, as adjusted
|
$0
|
$150
|
$200
|
$250
|
$300
|
$375
| ||||||||||||||||||||||||
|
34% or greater |
85% | 109% | 125% | 150% | 150% | 150% | ||||||||||||||||||||||||
|
33% |
75% | 90% | 100% | 115% | 134% | 150% | ||||||||||||||||||||||||
|
32% |
50% | 73% | 84% | 100% | 116% | 133% | ||||||||||||||||||||||||
|
31% |
43% | 62% | 71% | 85% | 99% | 100% | ||||||||||||||||||||||||
|
30% |
25% | 36% | 42% | 50% | 58% | 66% | ||||||||||||||||||||||||
|
29% or less |
0% | 29% | 33% | 40% | 47% | 53% | ||||||||||||||||||||||||
February 2021 PSUs
In February 2021, the HRC Committee determined to revise the metrics for determining the PSU earnout. The 2021 PSU earnout (which will occur in 2024) will be based on ROTCE and relative TSR. In determining the metrics for the February 2021 PSU grants, the HRC Committee considered the long-term business strategy and priorities of the company, the use of both absolute and relative metrics, feedback received during stakeholder engagement and market practice. The HRC Committee believes that the metrics approved reinforce operational performance and alignment with stockholder interests. PSUs granted in February 2021, the amounts of which were determined based on 2020 performance as discussed above, will be earned over a three-year performance period commencing in 2021.
| BNY Mellon Ø | 2021 Proxy Statement | 63 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Other Compensation and Benefits Elements
Retirement and Deferred Compensation Plans
In connection with the 2007 merger, we assumed certain existing arrangements affecting the provision of retirement benefits to certain of our NEOs, maintaining qualified and non-qualified defined benefit and defined contribution plans in which eligible employees, including our NEOs, may participate. Our NEOs are eligible to participate in deferred compensation plans, which enable eligible employees to defer the payment of taxes on a portion of their compensation until a later date. To limit pension accruals, we froze all accruals under the Legacy BNY SERP as of December 31, 2014 and under our other U.S. defined benefit pension plans (including the BNY Mellon Tax-Qualified Retirement Plan and the Legacy BNY Excess Plan) as of June 30, 2015. For a description of these plans and our NEOs’ participation therein, see “2020 Pension Benefits” and “2020 Nonqualified Deferred Compensation” below.
Perquisites
Our NEOs are eligible to participate in company-wide benefit plans. In addition, we provide the following limited benefits, consistent with market practices, that are reportable under SEC rules as perquisites (see footnotes to the “2020 Summary Compensation Table” below):
| • | Our policy regarding corporate aircraft usage provides that the CEO should make reasonable use of the company aircraft for security purposes and to make the most efficient use of his time, including with respect to personal travel. The HRC Committee receives and reviews an aircraft usage report on a semi-annual basis. |
| • | Mr. Gibbons is covered by a legacy life insurance policy assumed by the company in the 2007 merger. |
| 64 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
HRC Committee Role and Process
The HRC Committee structures the process for determining individual NEO compensation to ensure that compensation is linked with performance and appropriately aligns executives’ interests with stockholders’ interests. Below is a summary of the process cycle undertaken by the HRC Committee to establish compensation targets, monitor performance and progress, and make final determinations regarding compensation for our NEOs.
Stakeholder Feedback
We believe it is important to consider feedback and input from our stakeholders, including stockholders, employees, clients and the communities we serve.
We have consistently received support for our executive compensation program, with an average of 97% stockholder approval at our Annual Meetings of Stockholders during the prior three years. We continue to actively engage with our stakeholders throughout the year.
For direct stockholder feedback on our executive compensation framework and other issues of importance to our investors, we have continued our annual investor engagement process during 2020 and 2021, reaching out to investors representing over 50% of our outstanding common shares as well as proxy advisory firms and other stakeholders. See “Active Stockholder Engagement Program” on page 29 for additional information on our outreach.
Role of Compensation Consultants
The HRC Committee has retained CAP as its independent compensation consultant. CAP regularly attends HRC Committee meetings and assists the committee in its analysis and evaluation of compensation matters related to our executives. For more information on CAP and its role as independent compensation consultant to the HRC Committee, see page 42.
| BNY Mellon Ø | 2021 Proxy Statement | 65 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Benchmarking
| Peer Group
The HRC Committee and our management use a peer group to provide a basis for assessing relative company performance and to provide a competitive reference for pay levels and practices. In evaluating and selecting companies for inclusion in the peer group, the HRC Committee targets complex financial companies with which we typically compete for executive talent and business. Our 2020 peer group is listed in the box to the right. The HRC Committee selected these companies based on:
• mix of businesses (e.g., asset management, asset servicing and clearing services) and other financial services companies with similar business models that operate in a similar regulatory environment;
• relative size in terms of revenue, market capitalization and assets under management, as well as total assets and net income;
• position as competitors for customers and clients, executive talent and investment capital; and
• global presence. |
BlackRock, Inc. The Charles Schwab Corporation Franklin Resources, Inc. JPMorgan Chase & Co. Morgan Stanley Northern Trust Corporation The PNC Financial Services Group, Inc. Prudential Financial, Inc. State Street Corporation U. S. Bancorp Wells Fargo & Company |
The 2020 peer group selected by the HRC Committee was unchanged from 2019.
Compensation Benchmarking
Compensation information is collected from peer group proxy statements to assist the HRC Committee in assessing the competitiveness of targeted and actual compensation. Peer group information is also used to analyze market trends and compensation program practices. For certain NEOs, data relating to the peer group is supplemented with industry data from surveys conducted by national compensation consulting firms and other data to assess the compensation levels and practices in the businesses and markets in which we compete for executive talent. Peer group data and other information provided to the HRC Committee by CAP was used by the HRC Committee as a consideration in setting 2020 target compensation levels for our continuing NEOs.
Financial Performance Benchmarking
The peer group is also used to provide the HRC Committee with relative financial performance assessments. The metrics reviewed include revenue growth, EPS growth, operating margin, return on equity, return on tangible common equity, and TSR on a one- and three-year basis. This analysis provides additional context for the HRC Committee in its review of compensation outcomes as well as compensation program design.
Peer group data reviewed by the HRC Committee was considered holistically and was used as an input, but not the sole input, for the committee’s compensation decisions.
Stock Ownership Guidelines
Under our stock ownership guidelines, each NEO is required to own a number of shares of our common stock with a value equal to a multiple of base salary within five years of becoming a member of our Executive Committee. The officer cannot sell or transfer to a third party any shares until he or she achieves the applicable ownership guideline.
| Stock Ownership Requirement(1) |
Stock Retention Requirement(2) | |||||
| CEO | Must hold shares of our common stock equal to six times base salary |
50% of net after-tax shares must be held until age 60 | ||||
| Other NEOs | Must hold shares of our common stock equal to four times base salary |
50% of net after-tax shares must be held for one year after vesting date | ||||
| (1) | All of our NEOs are also expected to hold, as an administrative practice, an additional amount of company stock above their guideline amount equal to one times base salary in order to provide a cushion against stock volatility. |
| (2) | Applies to shares received from the vesting of RSUs, PSUs, restricted stock and other long-term equity awards granted after appointment to the Executive Committee and that were unvested as of, or granted after, August 2012 (excluding shares from certain awards granted to Ms. Engle in connection with her commencement of employment in 2017). |
| 66 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Mr. Vince has until October 2025, Ms. Portney has until July 2025, and Ms. Keating has until July 2023, which in each case is five years from becoming a member of the Executive Committee, to meet the stock ownership and administrative guidelines outlined above. As of the record date, Mr. Gibbons and Ms. Engle meet the stock ownership and administrative guidelines. To determine each NEO’s ownership stake for purposes of the guidelines, we include shares owned directly, shares held in our employee stock purchase and retirement plans and shares held in certain trusts. We also include 50% of unvested restricted stock and RSUs that do not have performance conditions or for which the applicable performance conditions have been met. Unearned performance shares, awards that remain subject to performance conditions and stock options are not counted toward compliance with the stock ownership guidelines.
Hedging and Pledging
We have a robust policy regarding transactions in company securities according to which our executive officers, including each of our NEOs, and directors are prohibited from engaging in hedging transactions with respect to company securities and from pledging company securities beneficially owned by them. In addition, executive officers and directors are prohibited from engaging in short sales of our stock, purchasing our stock on margin and buying or selling any puts, calls or other options involving our securities (other than any stock options that may be granted pursuant to our compensation program). Prior to engaging in any transaction in company stock or derivative securities (including transactions in employee benefit plans and gifts), our executives and directors are required to pre-clear such transaction with our legal department and obtain that department’s affirmative approval to enter into the transaction.
Our non-executive officer employees (who are not subject to the policies applicable to our executive officers and directors described above) are subject to policies and procedures designed to ensure that transactions in company stock are conducted in compliance with applicable rules and regulations and are free from conflicts of interest. All employees are prohibited from the following with respect to company securities:
| • | engaging in short sale transactions; |
| • | engaging in short-term trading; |
| • | purchasing company securities on margin; and |
| • | engaging in any derivative transaction involving or having its value based on company securities. |
| BNY Mellon Ø | 2021 Proxy Statement | 67 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Clawback and Recoupment
In addition to forfeiture provisions included in our incentive award agreements for executives based on risk outcomes during the vesting period, we have comprehensive forfeiture and recoupment policies that apply to equity and cash incentive awards granted to our employees. Material provisions applicable to NEOs (U.S.-based) are summarized below. The company continues to monitor regulatory requirements as may be applicable to its recoupment policies.
|
If...
|
Then...
| |||
| Risk-Based Forfeiture
|
||||
| ...the risk scorecard rating is lower than our acceptable risk tolerance
|
|
...unvested RSUs and PSUs will be subject to review and potential forfeiture, as determined by the HRC Committee | ||
| Equity Award Cancellation
|
||||
| ...the individual directly or indirectly engages in conduct, or it is discovered that the individual engaged in conduct, that is adverse to the interests of the company, including failure to comply with the company’s rules or regulations, fraud, or conduct contributing to any financial restatements or irregularities
|
|
...the company may cancel all or any portion of unvested equity awards and require repayment of any shares of common stock (or values thereof) or amounts (including dividends and dividend equivalent payments) that were acquired from the award | ||
| ...during the course of employment, the individual engages in solicitation and/or diversion of customers or employees and/or competition with the company
|
||||
| ...following termination of employment with the company for any reason, the individual violates any post-termination obligations or duties owed to the company under any agreement with the company
|
||||
| ...any compensation otherwise payable or paid to the individual is required to be forfeited and/or repaid to the company pursuant to applicable regulatory requirements
|
||||
| ...with respect to awards granted after 2018, the individual violates any obligation under the applicable award agreement (including failing to satisfy notice requirements, breaching non-competition or non-solicitation provisions while any portion of the award is outstanding or breaching the confidentiality or non-disparagement provisions)
|
||||
| Cash Recoupment
|
||||
| ...the company determines within three years of the award date that there is a reasonable belief that the individual has engaged in conduct that is adverse to the company’s interests (including failing to comply with the company’s rules or regulations or engaging in fraud or other conduct that directly or indirectly causes or contributes to a financial restatement or other irregularity of the company during the award performance period)
|
|
...the company may claw back some or all of a cash incentive award made to the individual | ||
| ...(1) required by any applicable law, (2) an employee engages in competition with the company during the course of employment, or (3) an employee violates any post-termination obligations or duties owed to the company under any agreement with the company
|
Severance Benefits
Stockholder Approval of Future Executive Severance Arrangements. In July 2010, the Board adopted a policy that, unless an arrangement receives prior stockholder approval, the company will not enter into a future severance arrangement with an executive that provides for severance benefits (as defined in the policy) in an amount exceeding 2.99 times the sum of annual base salary and target bonus for the year of termination (or, if greater, for the year before the year of termination).
| 68 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
Executive Severance Plan. The Bank of New York Mellon Corporation Executive Severance Plan (the “Executive Severance Plan”) was adopted in July 2010 and amended in August 2016 and February 2018. Under the Executive Severance Plan, participants terminated by the company without “cause” are eligible to receive severance in the amount of one times base salary and may be eligible for a pro-rata annual bonus for the year of termination, as determined on a case-by-case basis. If a pro-rata annual bonus is awarded, it will be paid at year end after an evaluation of corporate and individual performance, among other considerations. The following table sets forth the severance benefits available under the Executive Severance Plan.
| Reason for Termination |
Severance Payment |
Bonus | Benefit Continuation |
Outplacement Services | |||||||||||||
| By the company without “cause” |
1 times base salary |
Pro-rata annual bonus paid at year end at the discretion of management and the HRC Committee | 1 year | 1 year | |||||||||||||
| By the company without “cause” or by the participant for “good reason” within two years following a “change in control” |
2 times base salary and 2 times target annual bonus |
Pro-rata target annual bonus for the year of termination | 2 years | 1 year | |||||||||||||
Executive Severance Plan participants are selected by the HRC Committee and include each of our continuing NEOs. To receive benefits under the plan, a participant must sign a release and waiver of claims in favor of the company and agree not to compete against the company, or solicit our customers and employees, for so long as he or she is receiving benefits under the plan.
We do not provide any severance-related tax gross-ups. If any payment under the Executive Severance Plan would cause a participant to become subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986 (“IRC”), then payments and benefits will be reduced to the amount that would not cause the participant to be subject to the excise tax if such a reduction would put the participant in a better after-tax position than if the participant were to pay the tax. In addition, the amount of payments and benefits payable under the plan will be reduced to the extent necessary to comply with our policy regarding stockholder approval of future executive severance arrangements as described above.
Confidentiality, Notice, and Restrictive Covenants Agreements. The obligations and duties applicable to each of our NEOs include certain covenants pursuant to a Confidentiality, Notice, and Restrictive Covenants Agreement entered into with the company. Each such agreement requires written notice of the executive’s resignation of employment for any reason and includes covenants regarding the executive’s protection of confidential information (including indefinite non-disclosure of confidential information), non-solicitation obligations (including non-solicitation of company employees and non-interference with any company relationships with customers, clients or employees) for at least one year following the expiration of the applicable notice period, and assignment of inventions to the company.
Tax Considerations
The HRC Committee considers certain tax implications when designing our executive compensation programs and certain specific awards. We generally design our compensation programs so that compensation paid to the NEOs can qualify for available income tax deductions. However, the HRC Committee believes that stockholders’ interests may best be served by offering compensation that is not fully deductible, where appropriate, to attract, retain and motivate talented executives. Accordingly, the HRC Committee has discretion to authorize compensation that does not qualify for income tax deductibility.
| BNY Mellon Ø | 2021 Proxy Statement | 69 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Compensation Discussion & Analysis |
How We Address Risk and Control
On an annual basis, our Chief Risk Officer meets with the HRC Committee to review the company’s compensation plans and arrangements, including those in which members of the Executive Committee participate, to ensure they are well-balanced and do not encourage imprudent risk-taking.
Using a risk-related performance evaluation program with adjustments determined by a senior management committee responsible for control functions and later reviewed by the HRC Committee, we identify employees who, individually or as a group, are responsible for activities that may expose us to material amounts of risk. The incentive compensation of identified employees is directly linked to risk management either through a “risk scorecard” or through the inclusion of a standard risk goal as part of our performance management process. This approach allows the HRC Committee the ability to fully eliminate an incentive award if risk performance is below acceptable standards.
With respect to our NEOs, there are several controls intended to link incentive compensation to appropriate risk-taking. As a threshold matter, a common equity Tier 1 ratio for the company of at least 8.5% was established as a minimum funding requirement for our incentive compensation. Payment of incentive compensation is conditional upon the company meeting this goal. The HRC Committee’s incentive compensation determinations are also based on a risk assessment for both the company as a whole and for each individual. In addition, all of our NEOs’ equity awards are subject to 100% forfeiture during, and clawback following, the vesting period and all of their cash incentives are subject to 100% clawback within three years following the grant date, in each case based on ongoing risk assessments under our comprehensive recoupment policy.
We are also subject to regulation by various U.S. and international governmental and regulatory agencies with respect to executive compensation matters and how risk factors into and is affected by compensation decisions. Our programs have been designed to comply with these regulations, and the HRC Committee regularly monitors new and proposed regulations as they develop to determine if additional action is required.
Based on the above, we believe that our compensation plans and practices are well-balanced and do not encourage imprudent risk-taking that threatens our company’s value or creates risks that are reasonably likely to have a material adverse effect on the company.
The HRC Committee has reviewed and discussed the foregoing “Compensation Discussion & Analysis” with management. On the basis of such review and discussions, the HRC Committee recommended to the Board that the “Compensation Discussion & Analysis” be included in the company’s 2020 Annual Report and this proxy statement.
By: The Human Resources and Compensation Committee
| Linda Z. Cook, Chair |
| Edmund F. “Ted” Kelly |
| Jeffrey A. Goldstein |
| Samuel C. Scott III |
| Frederick O. Terrell |
| 70 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION | > Executive Compensation Tables and Other Compensation Disclosures | |||
2020 Summary Compensation Table
The “2020 Summary Compensation Table” and “2020 Grants of Plan-Based Awards” Table, on this page 71 and on page 73, are in accordance with SEC rules and do not reflect the manner in which our HRC Committee thinks about and determines compensation. In particular, the SEC rules require that we report equity-based awards for the year that they are granted, even though the equity-based portion of our incentive compensation is awarded for services performed the prior year.
| Name and Principal Position |
Year | Salary | Bonus(1) | Stock Awards(2)(3) |
Option Awards |
Non-Equity Incentive Plan Compensation |
Change in |
All Other Compensation(5) |
Total Compensation | |||||||||||||||||||||||||||
| Thomas P. “Todd” Gibbons Chief Executive Officer |
|
2020 |
|
$ |
1,250,000 |
|
$ |
— |
|
$ |
4,535,332 |
|
$ |
— |
|
|
$3,209,813 |
|
|
$297,241 |
|
|
$98,169 |
|
|
$ 9,390,555 |
| |||||||||
|
|
2019 |
|
$ |
800,000 |
|
$ |
— |
|
$ |
9,531,679 |
|
$ |
— |
|
|
$1,609,688 |
|
|
$527,375 |
|
|
$56,959 |
|
|
$12,525,701 |
| ||||||||||
|
|
2018 |
|
$ |
650,000 |
|
$ |
— |
|
$ |
4,609,078 |
|
$ |
— |
|
|
$2,157,750 |
|
|
$ — |
|
|
$36,850 |
|
|
$ 7,453,678 |
| ||||||||||
| Robin Vince(6) Vice Chair & Chief Executive Officer of Global Market Infrastructure |
|
2020 |
|
$ |
187,500 |
|
$ |
500,000 |
|
$ |
3,451,629 |
|
$ |
— |
|
|
$697,541 |
|
|
$ — |
|
|
$66,905 |
|
|
$ 4,903,575 |
| |||||||||
| Emily H. Portney(6) Chief Financial Officer |
|
2020 |
|
$ |
539,583 |
|
$ |
— |
|
$ |
1,249,093 |
|
$ |
— |
|
|
$1,083,926 |
|
|
$ — |
|
|
$19,342 |
|
|
$ 2,891,944 |
| |||||||||
| Bridget E. Engle Chief Operations & Technology Officer |
|
2020 |
|
$ |
600,000 |
|
$ |
— |
|
$ |
4,898,744 |
|
$ |
— |
|
|
$1,915,200 |
|
|
$ — |
|
|
$26,250 |
|
|
$ 7,440,194 |
| |||||||||
|
|
2019 |
|
$ |
600,000 |
|
$ |
— |
|
$ |
2,729,796 |
|
$ |
— |
|
|
$1,378,275 |
|
|
$ — |
|
|
$20,400 |
|
|
$ 4,728,471 |
| ||||||||||
|
|
2018 |
|
$ |
600,000 |
|
$ |
— |
|
$ |
2,388,988 |
|
$ |
— |
|
|
$2,585,000 |
|
|
$ — |
|
|
$17,500 |
|
|
$ 5,591,488 |
| ||||||||||
| Catherine M. Keating(6) Chief Executive Officer of Wealth Management |
|
2020 |
|
$ |
600,000 |
|
$ |
— |
|
$ |
3,200,044 |
|
$ |
— |
|
|
$1,228,920 |
|
|
$ — |
|
|
$26,250 |
|
|
$ 5,055,214 |
| |||||||||
|
|
|
| ||||||||||||||||||||||||||||||||||
| Mitchell E. Harris Former Chief Executive Officer of Investment Management |
|
2020 |
|
$ |
499,809 |
|
$ |
— |
|
$ |
3,696,513 |
|
$ |
— |
|
|
$1,608,264 |
|
|
$ 22,121 |
|
|
$71,246 |
|
|
$ 5,897,953 |
| |||||||||
|
|
2019 |
|
$ |
650,000 |
|
$ |
— |
|
$ |
4,889,928 |
|
$ |
— |
|
|
$1,686,825 |
|
|
$149,022 |
|
|
$27,000 |
|
|
$ 7,402,775 |
| ||||||||||
|
|
2018 |
|
$ |
650,000 |
|
$ |
— |
|
$ |
6,229,333 |
|
$ |
— |
|
|
$1,984,500 |
|
|
$ — |
|
|
$26,750 |
|
|
$ 8,890,583 |
| ||||||||||
| Michael P. Santomassimo Former Chief Financial Officer |
|
2020 |
|
$ |
475,000 |
|
$ |
— |
|
$ |
4,672,431 |
|
$ |
— |
|
|
$ — |
|
|
$ — |
|
|
$48,865 |
|
|
$ 5,196,296 |
| |||||||||
|
|
2019 |
|
$ |
583,333 |
|
$ |
— |
|
$ |
3,326,455 |
|
$ |
— |
|
|
$1,275,000 |
|
|
$ — |
|
|
$25,667 |
|
|
$ 5,210,455 |
| ||||||||||
|
|
2018 |
|
$ |
500,000 |
|
$ |
— |
|
$ |
740,050 |
|
$ |
— |
|
|
$1,350,000 |
|
|
$ — |
|
|
$23,750 |
|
|
$ 2,613,800 |
| ||||||||||
| (1) | The amount for Mr. Vince reflects his cash sign-on bonus. |
| (2) | The amounts disclosed in this column include the grant date fair value of RSUs and PSUs granted in 2020, 2019 and 2018. For 2020, the grant date fair values of PSUs were: $3,023,570 for Mr. Gibbons; $1,941,655 for Ms. Engle; $922,036 for Ms. Keating; $2,376,336 for Mr. Harris; and $1,796,188 for Mr. Santomassimo. At the maximum level of performance, the PSU values would be: $4,535,378 for Mr. Gibbons; $2,912,506 for Ms. Engle; $1,383,078 for Ms. Keating; $3,564,528 for Mr. Harris; and $2,694,281 for Mr. Santomassimo. Amounts disclosed for Mr. Santomassimo were forfeited upon his resignation. |
| (3) | The amounts disclosed in this column are computed in accordance with FASB ASC Topic 718 (“ASC 718”) using the valuation methodology for equity awards set forth in note 17 to the consolidated financial statements in our 2020 Annual Report. |
| (4) | The amounts disclosed in this column represent the amount of increase in the then-present value of the executive’s accumulated pension benefit. For 2020, present values are determined in accordance with the assumptions used for purposes of measuring our pension obligations under FASB ASC 715 as of December 31, 2020, including a discount rate of 2.80%, with the exception that benefit payments are assumed to commence at the earliest age at which unreduced benefits are payable. For 2018, the change in present value of accumulated benefit was negative $519,664 for Mr. Gibbons and negative $20,158 for Mr. Harris. These negative numbers are not reflected in the amounts disclosed above. |
| BNY Mellon Ø | 2021 Proxy Statement | 71 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
| (5) | The items comprising “All Other Compensation” for 2020 are: |
| Name |
Perquisites |
Contributions to Defined Contribution Plans(b) |
Insurance Premiums(c) |
New Hire Payments(d) |
Total | ||||||||||||||||||||
| Thomas P. “Todd” Gibbons |
$ | 48,819 | $ | 39,250 | $ | 10,100 | $ | — | $ | 98,169 | |||||||||||||||
| Robin Vince |
$ | — | $ | 3,750 | $ | — | $ | 63,155 | $ | 66,905 | |||||||||||||||
| Emily H. Portney |
$ | — | $ | 19,342 | $ | — | $ | — | $ | 19,342 | |||||||||||||||
| Bridget E. Engle |
$ | — | $ | 26,250 | $ | — | $ | — | $ | 26,250 | |||||||||||||||
| Catherine M. Keating |
$ | — | $ | 26,250 | $ | — | $ | — | $ | 26,250 | |||||||||||||||
| Mitchell E. Harris |
$ | 47,000 | $ | 24,246 | $ | — | $ | — | $ | 71,246 | |||||||||||||||
| Michael P. Santomassimo |
$ | 34,615 | $ | 14,250 | $ | — | $ | — | $ | 48,865 | |||||||||||||||
| (a) | “Perquisites and Other Personal Benefits” for Mr. Gibbons consist of personal use of company aircraft ($48,819), determined by the direct hourly operating cost for use of the aircraft multiplied by the number of hours of personal use, less any reimbursements to the company. We calculated the direct hourly operating cost for use of the aircraft by adding the total amount spent by us for fuel, maintenance, landing fees, travel and catering associated with the use of corporate aircraft in 2020 and divided this number by the total number of flight hours logged in 2020. “Perquisites and Other Personal Benefits” for Mr. Harris and Mr. Santomassimo ($47,000 and $34,615, respectively) consist of payment for earned, but unused vacation days. These payments were made in accordance with payroll procedures applicable to all employees in the United States. |
| (b) | “Contributions to Defined Contribution Plans” consist of matching and non-elective contributions under our 401(k) plan and non-elective company contributions under The Bank of New York Mellon Corporation Defined Contribution IRC Section 401(a)(17) Plan (the “BNY Mellon 401(k) Benefits Restoration Plan”). See “2020 Nonqualified Deferred Compensation” below on page 77 for more details regarding the BNY Mellon 401(k) Benefits Restoration Plan. In addition, for Mr. Gibbons, Ms. Portney, Ms. Engle, Ms. Keating, Mr. Vince and Mr. Harris, the amount includes non-elective company contributions totaling 2% of base salary under our 401(k) plan. |
| (c) | Represent taxable payments made by us for Mr. Gibbons’ universal life insurance policy. |
| (d) | New hire payments for Mr. Vince represent $30,000 payment for legal fees and $33,155 for gross-up on payment of legal fees included as part of his new hire offer. |
| (6) | Because Ms. Portney, Ms. Keating and Mr. Vince were only NEOs in 2020, no disclosure is included for them for 2018 and 2019. |
| 72 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
2020 Grants of Plan-Based Awards
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
All Other Stock Awards(3) |
||||||||||||||||||
| Name |
Award Type |
Grant Date |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
Number of Shares of Stock or Units (#) |
Grant Date Fair Value of Stock Awards ($)(4) | ||||||||||
| Thomas P. “Todd” Gibbons |
EICP |
— |
— |
$3,312,500 |
$4,968,750 |
|||||||||||||||
| PSUs |
2/10/2020 |
— |
65,037 |
97,556 |
$3,023,570 | |||||||||||||||
| RSUs |
2/10/2020 |
32,518 |
$1,511,762 | |||||||||||||||||
| Robin Vince |
EICP |
— |
— |
$697,541 |
$1,046,312 |
|||||||||||||||
| RSUs |
11/2/2020 |
98,337 |
$3,451,629 | |||||||||||||||||
| Emily H. Portney |
EICP |
— |
— |
$1,037,250 |
$1,555,875 |
|||||||||||||||
| RSUs |
2/10/2020 |
26,868 |
$1,249,093 | |||||||||||||||||
| Bridget E. Engle |
EICP |
— |
— |
$1,920,000 |
$2,880,000 |
|||||||||||||||
| PSUs |
2/10/2020 |
— |
41,765 |
62,648 |
$1,941,655 | |||||||||||||||
| RSUs |
2/10/2020 |
23,203 |
$1,078,707 | |||||||||||||||||
| RSUs |
2/10/2020 |
40,404 |
$1,878,382 | |||||||||||||||||
| Catherine M. Keating |
EICP |
— |
— |
$1,320,000 |
$1,980,000 |
|||||||||||||||
| PSUs |
2/10/2020 |
— |
19,833 |
29,750 |
$922,036 | |||||||||||||||
| RSUs |
2/10/2020 |
11,900 |
$553,231 | |||||||||||||||||
| RSUs |
2/10/2020 |
20,202 |
$939,191 | |||||||||||||||||
| RSUs |
8/10/2020 |
20,706 |
$785,586 | |||||||||||||||||
| Mitchell E. Harris |
EICP |
— |
— |
$1,692,910 |
$2,539,365 |
|||||||||||||||
| PSUs |
2/10/2020 |
— |
51,115 |
76,673 |
$2,376,336 | |||||||||||||||
| RSUs |
2/10/2020 |
28,397 |
$1,320,177 | |||||||||||||||||
| Michael P. Santomassimo(5) |
EICP |
— |
— |
$1,500,000 |
$2,250,000 |
|||||||||||||||
| PSUs |
2/10/2020 |
— |
38,636 |
57,954 |
$1,796,188 | |||||||||||||||
| RSUs |
2/10/2020 |
21,464 |
$ 997,861 | |||||||||||||||||
| RSUs |
2/10/2020 |
40,404 |
$1,878,382 | |||||||||||||||||
| (1) | Represents the cash portion of incentive compensation amounts to be paid for performance during 2020 under The Bank of New York Mellon Corporation Executive Incentive Compensation Plan (the “EICP”). There was no threshold payout under this plan for 2020. |
| (2) | Represents the portion of the NEO’s incentive compensation award granted in the form of PSUs under the LTIP for performance during 2019. The amounts shown under the “Maximum” column represent the maximum payout level of 150% of target; there is no threshold payout level. Upon vesting, the PSUs will be paid out in shares of BNY Mellon common stock. PSUs cannot be sold during the period of restriction. During this period, dividend equivalents on the PSUs will be reinvested and paid to the executives at the same time as the underlying shares. These units will be earned between 0% – 150% based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year period. The earned units generally will cliff vest after the end of the performance period if the executive remains employed by us. In the event that the NEO’s risk scorecard rating is lower than acceptable risk tolerance, any unvested PSUs will be subject to review and potential forfeiture, as determined by our HRC Committee. |
| (3) | For Mr. Gibbons, Ms. Portney, Ms. Engle, Ms. Keating, Mr. Harris and Mr. Santomassimo, represents the portion of the NEO’s incentive compensation award granted in the form of RSUs under the LTIP for performance during 2019. These RSUs vest in equal installments over three years. For Ms. Engle and Ms. Keating, also represents special awards intended to promote continuity through the CEO search and beyond which cliff vest after three years. For Mr. Vince, represents his buyout awards. Mr. Santomassimo forfeited his equity grants and his ability to receive a non-equity incentive award upon his resignation from the company. |
| (4) | The aggregate grant date fair value of awards presented in this column is calculated in accordance with ASC 718. |
| (5) | Upon his voluntary termination from the company in 2020, Mr. Santomassimo forfeited the equity awards listed on this table and forfeited his opportunity to receive a non-equity incentive award under the terms of the EICP for 2020. |
| BNY Mellon Ø | 2021 Proxy Statement | 73 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
2020 Outstanding Equity Awards at Fiscal Year-End
The market value of unvested or unearned awards is calculated using a $42.44 per share value, which was the closing price per share of our common stock on the NYSE on December 31, 2020 (the last trading day of the year).
|
Option Awards |
Stock Awards(2) | |||||||||||||||||
|
Number of Securities |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
Equity or Other |
Equity or Other | ||||||||||||
| Name |
Year
of |
Exercisable | Unexercisable | |||||||||||||||
|
Thomas P. |
2018 |
9,431 |
$400,252 |
|||||||||||||||
|
2019 |
84,264 |
$3,576,164 |
||||||||||||||||
|
2020 |
32,518 |
$1,380,064 |
||||||||||||||||
|
2018-2020 |
46,836.800(4) |
$1,987,754 | ||||||||||||||||
|
2019-2021 |
69,639.982(3) |
$2,955,521 | ||||||||||||||||
|
2020-2022 |
67,188.244(3) |
$2,851,469 | ||||||||||||||||
|
Robin Vince |
2020 |
98,337 |
$4,173,422 |
|||||||||||||||
|
Emily H. Portney |
2018 |
5,937 |
$251,966 |
|||||||||||||||
|
2019 |
18,950 |
$804,238 |
||||||||||||||||
|
2020 |
26,868 |
$1,140,278 |
||||||||||||||||
|
Bridget E. Engle |
2018 |
6,843 |
$290,417 |
|||||||||||||||
|
2019 |
17,495 |
$742,488 |
||||||||||||||||
|
2020 |
63,607 |
$2,699,481 |
||||||||||||||||
|
2018-2020 |
18,881.254(4) |
$801,320 | ||||||||||||||||
|
2019-2021 |
27,809.154(3) |
$1,180,220 | ||||||||||||||||
|
2020-2022 |
43,146.470(3) |
$1,831,136 | ||||||||||||||||
|
Catherine M. Keating |
2018 |
6,120 |
$259,733 |
|||||||||||||||
|
2019 |
4,307 |
$182,789 |
||||||||||||||||
|
2020 |
52,808 |
$2,241,172 |
||||||||||||||||
|
2019-2021 |
11,411.682(3) |
$484,312 | ||||||||||||||||
|
2020-2022 |
20,489.021(3) |
$869,554 | ||||||||||||||||
|
Mitchell E. Harris |
2012 |
31,621 |
0 |
$22.03 |
2/22/2022 |
|||||||||||||
|
2018 |
12,746 |
$540,940 |
||||||||||||||||
|
2019 |
22,385 |
$950,019 |
||||||||||||||||
|
2020 |
28,397 |
$1,205,169 |
||||||||||||||||
|
2018-2020 |
63,300.978(4) |
$2,686,494 | ||||||||||||||||
|
2019-2021 |
64,048.056(3) |
$2,718,199 | ||||||||||||||||
|
2020-2022 |
52,805.742(3) |
$2,241,076 | ||||||||||||||||
| Michael P. Santomassimo |
2018 |
0 |
$0 |
|||||||||||||||
|
2019 |
0 |
$0 |
||||||||||||||||
|
2020 |
0 |
$0 |
||||||||||||||||
|
2018-2020 |
0 |
$0 | ||||||||||||||||
|
2019-2021 |
0 |
$0 | ||||||||||||||||
|
2020-2022 |
0 |
$0 | ||||||||||||||||
| (1) | Refers to the year of grant for stock options and RSUs and to the performance period for PSUs. |
| 74 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
| (2) | RSUs vest in accordance with the following schedule: |
|
Year of Grant |
||
|
2018 |
Generally 1/3 vest per year over a three-year period, with the remaining unvested RSUs having vested on 2/26/2021. For Ms. Portney, 2,139 will vest on 3/8/2021, 2,138 will vest on 3/8/2022 and 1,660 will vest on 3/8/2023. For Ms. Keating, 6,120 will vest on 7/9/2021. | |
|
2019 |
Generally 1/3 vest per year over a three-year period, with the remaining unvested RSUs having vested 1/2 on 2/11/2021 and 1/2 vesting on 2/11/2022. For Mr. Gibbons, 29,962 will vest on 10/28/2021 and 29,962 will vest on 10/28/2022. | |
|
2020 |
Generally 1/3 vest per year over a three-year period, with the remaining unvested RSUs having vested 1/3 on 2/10/2021, 1/3 vesting on 2/10/2022 and 1/3 vesting on 2/10/2023. For Ms. Engle, 40,404 will vest on 2/10/2023. For Ms. Keating, 20,202 will vest on 2/10/2023 and 20,706 will vest on 8/10/2023. For Mr. Vince, 71,594 will vest on 1/17/2022 and 26,743 will vest on 1/17/2023. |
PSUs are earned and vest in accordance with the following schedule:
|
Year of Grant |
||
|
2018 |
Earned, between 0% – 150% of target, based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year period; earned PSUs cliff vest at the end of the performance period (on 2/26/2021). | |
|
2019 |
Earned, between 0% – 150% of target, based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year period; earned PSUs cliff vest at the end of the performance period (on 2/11/2022). | |
|
2020 |
Earned between 0% – 150% of target, based on average revenue growth (as adjusted) and average operating margin (as adjusted), each over a three-year period; earned PSUs cliff vest at the end of the performance period (on 2/10/2023). |
| (3) | Includes accrued dividends on the PSUs granted in 2019 and 2020, assuming target performance. |
| (4) | Includes accrued dividends on the PSUs granted in 2018, which were earned based on performance as of December 31, 2020 but remained subject to ongoing time-vesting conditions. |
2020 Option Exercises and Stock Vested
| Option Awards |
Stock Awards | |||||||||||||||||||
| Name |
Number of Shares Acquired on Exercise(#) |
Value Realized ($) |
Number of Shares Acquired on Vesting(#) |
Value Realized on Vesting ($) | ||||||||||||||||
| Thomas P. “Todd” Gibbons |
— | $ | — | 128,532 | $ | 5,504,669 | ||||||||||||||
| Robin Vince |
— | $ | — | — | $ | — | ||||||||||||||
| Emily H. Portney |
— | $ | — | 18,612 | $ | 761,235 | ||||||||||||||
| Bridget E. Engle |
— | $ | — | 33,944 | $ | 1,531,575 | ||||||||||||||
| Catherine M. Keating |
— | $ | — | 8,275 | $ | 327,384 | ||||||||||||||
| Mitchell E. Harris |
— | $ | — | 80,700 | $ | 3,648,999 | ||||||||||||||
| Michael P. Santomassimo |
— | $ | — | 14,527 | $ | 661,145 | ||||||||||||||
| BNY Mellon Ø | 2021 Proxy Statement | 75 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
| Name |
Plan Name(1) | Number of Years Credited Service (#) |
Present |
Payments During Last Fiscal Year ($) | ||||
| Thomas P. “Todd” Gibbons |
BNY Mellon Tax-Qualified Retirement Plan | 28.08 | $1,370,112 | $0 | ||||
| Legacy BNY Excess Plan | 28.08 | $2,228,515 | $0 | |||||
| Legacy BNY SERP | 27.58 | $3,852,737 | $0 | |||||
| Mitchell E. Harris |
BNY Mellon Tax-Qualified Retirement Plan | 10.75 | $ 440,104 | $0 | ||||
| Legacy Mellon IRC Section 401(a)(17) Plan | 10.75 | $ 642,029 | $0 | |||||
| (1) | Benefit accruals under the Legacy BNY SERP were frozen as of December 31, 2014, and benefit accruals under the Legacy BNY Excess Plan, Legacy Mellon IRC Section 401(a)(17) Plan and BNY Mellon Tax-Qualified Retirement Plan were frozen as of June 30, 2015. |
| (2) | The present values shown above are based on benefits earned as of December 31, 2020 under the terms of the various plans as summarized below. Present values are determined in accordance with the assumptions used for purposes of measuring our pension obligations under FASB ASC 715 as of December 31, 2020, including a discount rate of 2.80%, with the exception that benefit payments are assumed to commence at the earliest age at which unreduced benefits are payable. |
| 76 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
2020 Nonqualified Deferred Compensation
The following table provides information with respect to each defined contribution or other plan that provides for nonqualified deferred compensation in which the NEOs participate. For 2020, each of our NEOs participated in the BNY Mellon 401(k) Benefits Restoration Plan, and Mr. Harris participated in the Mellon Elective Deferred Compensation Plan for Senior Officers. Each of these plans is described below.
| Name |
Executive Contributions in Fiscal Year 2020 |
Registrant Contributions in Fiscal Year 2020(1) |
Aggregate Earnings in Fiscal Year 2020 |
Aggregate Withdrawals/ Distributions |
Aggregate Balance at End of Fiscal Year 2020 |
|||||||||||||||
| Thomas P. “Todd” Gibbons |
$ | 0 | $ | 19,300 | $ | 13,290 | $ | 0 | $ | 83,707 | ||||||||||
| Robin Vince |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
| Emily Portney |
$ | 0 | $ | 5,092 | $ | 1,919 | $ | 0 | $ | 11,411 | ||||||||||
| Bridget E. Engle |
$ | 0 | $ | 6,300 | $ | 3,527 | $ | 0 | $ | 25,054 | ||||||||||
| Catherine Keating |
$ | 0 | $ | 6,300 | $ | 2,647 | $ | 0 | $ | 15,627 | ||||||||||
| Mitchell E. Harris(2) |
$ | 0 | $ | 4,296 | $ | 87,367 | $ | 0 | $ | 2,564,982 | ||||||||||
| Michael Santomassimo |
$ | 0 | $ | 0 | $ | 5,646 | $ | 0 | $ | 19,849 | ||||||||||
| (1) | These amounts represent company contributions under the BNY Mellon 401(k) Benefits Restoration Plan and are included in the “All Other Compensation” column of the “2020 Summary Compensation Table” on page 71. |
| (2) | Amounts for Mr. Harris reflect aggregate balances and earnings in the Mellon Elective Deferred Compensation Plan for Senior Officers. |
| BNY Mellon Ø | 2021 Proxy Statement | 77 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
BNY Mellon Nonqualified Deferred Compensation Plans
| 78 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
| 80 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
| Named Executive Officer |
By Company Without Cause |
Termination in Connection with Change of Control |
Death | |||||||||
| Thomas P. “Todd” Gibbons |
||||||||||||
| Cash Severance(1) |
$1,250,000 | $15,750,000 | $— | |||||||||
| Pro-rated Bonus(1) |
$6,419,626 | $6,625,000 | $— | |||||||||
| Health and Welfare Benefits |
$1,497 | $2,994 | $— | |||||||||
| Additional Stock Award Vesting(2) |
$2,636,056 | $2,636,056 | $2,636,056 | |||||||||
| TOTAL |
$10,307,179 | $25,014,050 | $2,636,056 | |||||||||
| Robin Vince |
||||||||||||
| Cash Severance(1) |
$750,000 | $11,675,000 | $— | |||||||||
| Pro-rated Bonus(1) |
$1,278,825 | $1,278,825 | $— | |||||||||
| Health and Welfare Benefits |
$17,377 | $34,754 | $— | |||||||||
| Additional Stock Award Vesting(2) |
$— | $— | $— | |||||||||
| TOTAL |
$2,046,202 | $12,988,579 | $— | |||||||||
| Emily H. Portney |
||||||||||||
| Cash Severance(1) |
$600,000 | $5,003,250 | $— | |||||||||
| Pro-rated Bonus(1) |
$1,987,198 | $1,901,625 | $— | |||||||||
| Health and Welfare Benefits |
$17,592 | $35,184 | $— | |||||||||
| Additional Stock Award Vesting(2) |
$2,262,023 | $2,262,023 | $2,262,023 | |||||||||
| TOTAL |
$4,866,813 | $9,202,082 | $2,262,023 | |||||||||
| Bridget E. Engle |
||||||||||||
| Cash Severance(1) |
$600,000 | $8,240,000 | $— | |||||||||
| Pro-rated Bonus(1) |
$3,511,200 | $3,520,000 | $— | |||||||||
| Health and Welfare Benefits |
$17,239 | $34,478 | $— | |||||||||
| Additional Stock Award Vesting(2) |
$7,776,188 | $7,776,188 | $7,776,188 | |||||||||
| TOTAL |
$11,904,627 | $19,570,666 | $7,776,188 | |||||||||
| Catherine M. Keating |
||||||||||||
| Cash Severance(1) |
$600,000 | $6,040,000 | $— | |||||||||
| Pro-rated Bonus(1) |
$2,253,020 | $2,420,000 | $— | |||||||||
| Health and Welfare Benefits |
$16,531 | $33,062 | $— | |||||||||
| Additional Stock Award Vesting(2) |
$4,091,382 | $4,091,382 | $4,091,382 | |||||||||
| TOTAL |
$6,960,933 | $12,584,444 | $4,091,382 | |||||||||
| (1) | Amounts shown assume that no NEO received payment from any displacement program, supplemental unemployment plan or other separation benefit other than the Executive Severance Plan. Amounts have been calculated in accordance with the terms of the applicable agreements. For terminations by the company without cause, amounts will be paid in installments over a one-year period following termination. For terminations in connection with a change of control, amounts will be paid in a lump sum. |
| (2) | The value of “Additional Stock Award Vesting” represents the value at December 31, 2020 of all shares of restricted stock units (along with cash dividends accrued on the restricted stock units) and earned PSUs (along with dividend equivalents on the PSUs) on that date that were subject to service-based restrictions, which restrictions lapse on or after certain terminations of employment, including following a change of control, to the extent such restrictions would not lapse on retirement alone. Information relating to the vesting of stock awards on retirement can be found in “BNY Mellon Retirement Plans” on page 76 above. |
| BNY Mellon Ø | 2021 Proxy Statement | 81 |
Table of Contents
| ITEM 2. ADVISORY VOTE ON COMPENSATION > Executive Compensation Tables and Other Compensation Disclosures |
Set forth below is the annual total compensation of our median employee, the annual total compensation of Mr. Gibbons, and the ratio of those two values:
| • | The 2020 annual total compensation of the median employee of BNY Mellon (other than our CEO) was $77,487(1); |
| • | The 2020 annual total compensation of our CEO, Mr. Gibbons, was $9,392,052(2); and |
| • | For 2020, the ratio of the annual total compensation of Mr. Gibbons to the annual total compensation of our median employee was 121 to 1. |
Background
We identified our median employee (who is located in the U.S.) using our world-wide employee population (without exclusions) as of October 31, 2020 and measuring compensation based on total pay actually received over the period November 1, 2019 – October 31, 2020.
As required by SEC rules, we calculated 2020 annual total compensation for our median employee using the same methodology that we use to determine our NEOs’ annual total compensation for the “2020 Summary Compensation Table”.
The pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
| (1) | The median employee’s total compensation includes the value of company-paid benefits applicable to the median employee. |
| (2) | For purposes of the CEO pay ratio disclosure, Mr. Gibbons’ annual total compensation includes the amount reported in the “Total” column of the “2020 Summary Compensation Table” on page 71, plus the value of company-paid benefits applicable to Mr. Gibbons. |
| 82 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
Table of Contents
| ITEM 3. RATIFICATION OF KPMG LLP | > Resolution | |||
Proposal
We are asking stockholders to ratify the Audit Committee’s appointment of KPMG LLP (“KPMG”) as our independent registered public accountants for the year ending December 31, 2021.
Background
The Audit Committee and the Board believe that the continued retention of KPMG to serve as our independent registered public accounting firm for the 2021 fiscal year is in the best interests of the company and its stockholders.
| Our Audit Committee has direct responsibility:
• For the selection, appointment, compensation, retention and oversight of the work of our independent registered public accountants engaged to prepare an audit report or to perform other audit, review or attestation services for us.
• To negotiate and approve all audit engagement fees and terms and all non-audit engagements of the independent registered public accountants.
• To annually evaluate KPMG, including its qualifications and independence, and to replace KPMG as our independent registered public accountant, as appropriate.
• To discuss with management the timing and process for implementing the five-year mandatory rotation of the lead engagement partner. |
The Board
recommends that you vote “FOR” ratification of the appointment of KPMG LLP as our independent
|
KPMG or its predecessors have served as our independent registered public accounting firm since the merger in 2007 and previously served as the independent registered public accountant of Mellon since 1972. As in prior years, in 2020, the Audit Committee engaged in a review of KPMG in connection with considering whether to recommend that stockholders ratify the selection of KPMG as BNY Mellon’s independent auditor for 2021. In that review, the Audit Committee considered the continued independence of KPMG; the breadth and complexity of BNY Mellon’s business and its global footprint and the resulting demands placed on its auditing firm; KPMG’s demonstrated understanding of the financial services industry in general and BNY Mellon’s business in particular; and the professionalism of KPMG’s team, including their exhibited professional skepticism, objectivity and integrity.
To assist the Audit Committee with its review, management prepares an annual assessment of KPMG that includes (1) an analysis of KPMG’s known legal risks and significant proceedings that may impair KPMG’s ability to perform BNY Mellon’s annual audit, (2) the results of a survey of management and Audit Committee members regarding KPMG’s overall performance and (3) KPMG’s fees and services compared to services provided by KPMG and other auditing firms to peer companies. In addition, KPMG provides to, and reviews with, the Audit Committee an analysis of KPMG’s independence, including the policies that KPMG follows with respect to rotating key audit personnel so that there is a new partner-in-charge at least every five years.
We expect that representatives of KPMG will be present at the Annual Meeting to respond to appropriate questions, and they will have the opportunity to make a statement if they desire.
Voting
Adoption of this proposal requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting by the holders of our common stock voting electronically at the Annual Meeting or by proxy. Unless contrary instructions are given, shares represented by proxies solicited by the Board will be voted “for” the ratification of the selection of KPMG as our independent registered public accountants for the year ending December 31, 2021.
If the selection of KPMG is not ratified by our stockholders, the Audit Committee will reconsider the matter. If selection of KPMG is ratified, the Audit Committee in its discretion may still direct the appointment of a different independent registered public accountant at any time during the year if it determines that such a change is in the best interests of the company and our stockholders.
| 84 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 3. RATIFICATION OF KPMG LLP | > Report of the Audit Committee | |||
On behalf of our Board, the Audit Committee oversees the operation of a comprehensive system of internal controls with respect to the integrity of our financial statements and reports, compliance with laws, regulations and corporate policies and the qualifications, performance and independence of our independent registered public accounting firm. The Committee’s function is one of oversight, since management is responsible for preparing our financial statements, and our independent registered public accountants are responsible for auditing those statements.
Accordingly, the Audit Committee has reviewed and discussed with management the audited financial statements for the year ended December 31, 2020 and management’s assessment of internal control over financial reporting as of December 31, 2020. The Audit Committee has also discussed with KPMG the conduct of the audit of our financial statements, as well as the quality of the company’s accounting principles and the reasonableness of critical accounting estimates and judgments. KPMG issued its unqualified report on our financial statements and the operating effectiveness of our internal control over financial reporting.
The Committee has also discussed with KPMG the matters required to be discussed in accordance with Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard, Communications with Audit Committees. The Committee has also received the written disclosures and the letter from KPMG required by applicable PCAOB standards regarding the independent accountants’ communications with the Audit Committee concerning auditor independence, and has conducted a discussion with KPMG regarding its independence. The Audit Committee has determined that KPMG’s provision of non-audit services is compatible with its independence.
Based on these reviews and discussions, the Audit Committee recommended to the Board that our audited financial statements for the year ended December 31, 2020 be included in our 2020 Annual Report.
By: The Audit Committee
Joseph J. Echevarria, Chair
Linda Z. Cook
Ralph Izzo
Jennifer B. Morgan
Samuel C. Scott III
Frederick O. Terrell
| BNY Mellon Ø | 2021 Proxy Statement | 85 |
Table of Contents
| ITEM 3. RATIFICATION OF KPMG LLP | > Services Provided by KPMG LLP | |||
Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees
We have been advised by KPMG that it is an independent public accounting firm registered with the PCAOB and that it complies with the auditing, quality control and independence standards and rules of the PCAOB and the SEC. The appointment of KPMG as our independent registered public accounting firm for the 2020 fiscal year was ratified at our 2020 Annual Meeting of Stockholders. The following table reflects the fees earned by KPMG for services provided to us for 2020 and 2019:
| Description of Fees |
Amount of Fees Paid to KPMG for 2020 |
Amount of Fees Paid to KPMG for 2019 |
||||||
| Audit Fees(1) |
$ |
21,905,000 |
|
$ |
21,101,000 |
| ||
| Audit-Related Fees(2) |
$ |
22,711,000 |
|
$ |
23,122,000 |
| ||
| Tax Fees(3) |
$ |
2,189,000 |
|
$ |
2,464,000 |
| ||
| All Other Fees(4) |
$ |
637,000 |
|
$ |
48,000 |
| ||
| Total |
$ |
47,442,000 |
|
$ |
46,735,000 |
| ||
| (1) | Includes fees for professional services rendered for the audit of our annual financial statements for the fiscal year (including services relating to the audit of internal control over financial reporting under the Sarbanes-Oxley Act of 2002), for reviews of the financial statements included in our quarterly reports on Form 10-Q and for other services that only our independent registered public accountant can reasonably provide. |
| (2) | Includes fees for services that were reasonably related to performance of the audit of the annual financial statements for the fiscal year, other than “Audit Fees,” such as service organization reports (under Statement on Standards for Attestation Engagements 16), employee benefit plan audits and internal control reviews. |
| (3) | Includes fees for tax return preparation and tax planning. |
| (4) | Includes fees for regulatory and other advisory services. |
Other Services Provided by KPMG LLP
KPMG also provided services to entities associated with us that were charged directly to those entities and accordingly were not included in the amounts disclosed in the table above. These amounts included $14.5 million for 2020 and $14.2 million for 2019 for the audits and tax compliance services for mutual funds, collective funds and other funds advised by us. Also excluded from the amounts disclosed in the table above are fees billed by KPMG to joint ventures or equity method investments in which we have an interest of 50% or less.
Our Audit Committee has established pre-approval policies and procedures applicable to all services provided by our independent registered public accountants. In accordance with SEC rules, our pre-approval policy has two different approaches to pre-approving audit and permitted non-audit services performed by our independent registered public accountants. Proposed services may be pre-approved pursuant to policies and procedures established by the Audit Committee that are detailed as to a particular class of service without consideration by the Audit Committee of the specific case-by-case services to be performed (“class pre-approval”). If a class of service has not received class pre-approval, the service will require specific pre-approval by the Audit Committee before it is provided by our independent registered public accountants (“specific pre-approval”). A list of services that has received class pre-approval from our Audit Committee (or its delegate) is attached to our Audit and Permitted Non-Audit Services Pre-Approval Policy, a copy of which is available on our website (see “Helpful Resources” on page 100). For 2020, 100% of the fees associated with the independent registered public accounting firm services were pre-approved by the Audit Committee.
| 86 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
|
ITEM 4. STOCKHOLDER PROPOSAL REGARDING STOCKHOLDER REQUESTS FOR A RECORD DATE TO INITIATE WRITTEN CONSENT |
> Stockholder Proposal | |||
Proposal and Background
John Chevedden, on behalf of Kenneth Steiner, c/o John Chevedden, 2215 Nelson Ave., No. 205, Redondo Beach, CA 90278, the beneficial owner of more than $2,000 of our common stock, has given notice that he intends to introduce the following resolution at the Annual Meeting. In accordance with the applicable proxy regulations, the text of the proponent’s proposal and supporting statement and any graphics, for which we accept no responsibility, are set forth immediately below:
Proposal 4—Improve Shareholder Written Consent
Shareholders request that our board of directors take the steps necessary to enable 10% of shares to request a record date to initiate written consent.
Currently it takes the formal backing 25% of all shares that normally cast ballots at the annual meeting to do so little ask for a record date for written consent.
Plus any action taken by written consent would still need 65% supermajority approval from the shares that normally cast ballots at the annual meeting. This 65% vote requirement gives overwhelming supermajority protection to management that will remain unchanged.
Enabling 10% of shares to apply for a record date for written consent makes sense because scores of companies do not even require 1% of stock ownership to do so little as request a record date.
Taking action by written consent is a means shareholders can use to raise important matters outside the normal annual meeting cycle like the election of a new director.
Now more than ever shareholders need to have the option to take action outside of a shareholder meeting since online shareholder meetings are a shareholder engagement wasteland.
With the near universal use of online annual shareholder meetings which can be only 10-minutes long, shareholders no longer have the right for engagement with other shareholders, management and directors at a shareholder meeting. Special shareholder meetings can now be online meetings which has an inferior format to even a Zoom meeting.
Shareholders are also severely restricted in making their views known at online shareholder meetings because all challenging questions and comments can be screened out by management.
For example, to bar constructive criticism Goodyear management hit the mute button right in the middle of a formal shareholder proposal presentation at its 2020 shareholder meeting.
Plus AT&T management would not even allow the proponents of shareholder proposals to read their proposals by telephone at the 2020 AT&T online annual meeting during the pandemic.
Please see:
AT&T investors denied a dial-in as annual meeting goes online
https://whbl.com/2020/04/17/att-investors-denied-a-dial-in-as-annual-meeting-goes-online/100 7928/
Imagine the control a management like AT&T could have over an online special shareholder meeting.
Online meetings also give management a blank check to make false statements because shareholders who are not physically present cannot challenge false statements.
Now more than ever shareholders need to have the option to take action outside of a shareholder meeting since online shareholder meetings are a shareholder engagement wasteland.
Proposal 4—Improve Shareholder Written Consent
| BNY Mellon Ø | 2021 Proxy Statement | 87 |
Table of Contents
|
ITEM 4. REGARDING STOCKHOLDER REQUESTS FOR A RECORD DATE TO INITIATE WRITTEN CONSENT |
> Board’s Response | |||
Voting
Adoption of this proposal requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting by the holders of our common stock voting electronically at the Annual Meeting or by proxy. Unless contrary instructions are given, shares represented by proxies solicited by the Board will be voted “against” the stockholder proposal regarding requests for a record date to initiate written consent.
Board’s Response
After careful consideration of this proposal, we have concluded that it is not in the best interests of our stockholders. We therefore recommend that you vote AGAINST this proposal for the following reasons:
| The company’s Restated Certificate of Incorporation already permits stockholders to take action by written consent with appropriate safeguards. Our Restated Certificate of Incorporation provides stockholders who own at least 20% of our outstanding shares of common stock and who satisfy other procedural requirements set forth in the Restated Certificate of Incorporation the ability to take action by written consent. Moreover, a stockholder action by written consent will be effective if approved by the same number of shares that would be required to approve the item at a meeting of our stockholders. The stockholder proposal falsely asserts that a record date for written consent can only be requested by holders of 25% of the shares outstanding. | The Board recommends a vote “AGAINST” the stockholder
|
The stockholder proposal also falsely asserts that the approval of 65% of shares outstanding is necessary to approve any action by written consent. Notably, because there are no current supermajority voting requirements in the Restated Certificate of Incorporation, our by-laws or otherwise, the stockholder proposal refers to a supermajority voting standard that does not exist. Such inaccuracies are particularly misleading given that the purported purpose of this stockholder proposal is to change the stock ownership threshold for stockholders to request a record date to act by written consent, yet the stockholder proposal overstates the current share ownership requirement. The stockholder written consent provisions set forth in our Restated Certificate of Incorporation were thoroughly considered by our Board and strike a suitable balance between enabling our stockholders an efficient and accessible means to take corporate action while at the same time limiting the risk that a limited group of minority stockholders could draw significant corporate resources, including costs and management attention, by using numerous requests for action by written consent to push forward an action that lacks sufficient stockholder support to merit calling a special meeting.
Our existing written consent provisions were designed carefully, with considerable stockholder feedback, and were supported overwhelmingly by stockholders at our 2019 Annual Meeting. Following receipt of a stockholder proposal regarding enhancing stockholder written consent rights from the same proponent for our 2018 Annual Meeting, our Board committed to understanding stockholder perspectives in this area and included the topic as a focus of its corporate governance agenda for that year. In devising written consent provisions that would best serve the interests of the company and our stockholders, the Board evaluated a number of factors, including stockholder feedback, market practice among our peers, the time and resources required to effect action by written consent, and the strength of our overall corporate governance program, including the ability that stockholders otherwise have to make their voices heard to the Board and management (e.g., by calling a special meeting or submitting proxy access nominations). The written consent provisions currently set forth in our Restated Certificate of Incorporation are the result of this careful deliberation and stockholder engagement by the Board, were proposed by the Board in our 2019 Proxy Statement and received the support of 97.67% of votes cast by stockholders.
We have adopted strong corporate governance policies and practices that promote accountability and stockholder engagement. The company is committed to ensuring that we remain responsive and accountable to our stockholders and other stakeholders, and our corporate governance practices and policies are regularly assessed by management and our Board to that end. We have implemented a number of measures to ensure that stockholders are afforded greater influence over the governance of the company, including meaningful proxy access rights that permit stockholders owning 3% or more of our common stock the right to nominate director candidates constituting up to 20% of our Board, special meeting rights for stockholders, and written consent rights, all with appropriate
| 88 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ITEM 4. REGARDING STOCKHOLDER REQUESTS FOR A RECORD DATE TO INITIATE WRITTEN CONSENT |
> Board’s Response | |||
safeguards that empower and protect stockholders and their interests. We also conduct a proactive year-round stakeholder engagement program that provides stockholders with the opportunity to provide feedback on corporate governance, corporate responsibility and executive compensation matters. A further discussion of our corporate governance framework can be found on page 22.
The existing written consent provisions set forth in our Restated Certificate of Incorporation were carefully designed to empower stockholders while providing appropriate protection against the risk that a small minority of stockholders would be able to unilaterally initiate a written consent solicitation, causing disruption and expense to the company. The stockholder proposal would remove important protections that our written consent right provides to all stockholders, ignores our robust corporate governance standards and, in several cases, misleadingly misstates them by falsely stating that share ownership thresholds to utilize the company’s written consent right are higher than those actually in effect. For all these reasons, we therefore recommend that you vote AGAINST this stockholder proposal.
| BNY Mellon Ø | 2021 Proxy Statement | 89 |
Table of Contents
| ADDITIONAL INFORMATION | ||||
| Page 91 | ||
| Page 92 | ||
| Beneficial Ownership of Shares by Holders of More Than 5% of Outstanding Stock |
Page 92 | |
| Beneficial Ownership of Shares by Directors and Executive Officers |
Page 93 | |
| Page 93 | ||
| Page 94 | ||
| Page 98 | ||
| Page 98 | ||
| Page 98 | ||
| Page 98 | ||
| Page 99 | ||
| Page 100 | ||
| 90 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ADDITIONAL INFORMATION | > Equity Compensation Plans | |||
The following table shows information relating to the number of shares authorized for issuance under our equity compensation plans as of December 31, 2020.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted average exercise price of outstanding options, warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in second column) | |||
| Equity compensation plans |
||||||
| Approved by stockholders |
14,898,994(1) | $24.29 | 35,553,162(2) | |||
| Not approved by stockholders |
86,573(3) | — | — | |||
| Total |
14,985,567(4) | $24.29(5) | 35,553,162 | |||
| (1) | Includes 14,866,515 shares of common stock that may be issued pursuant to outstanding options, RSUs, PSUs and escrowed dividends awarded under the LTIP; 5,623 shares of common stock that may be issued pursuant to outstanding director deferred share units under the Mellon Director Equity Plan (2006); and 26,856 shares of common stock that may be issued pursuant to outstanding stock options under The Bank of New York Mellon Corporation Employee Stock Purchase Plan. The number of shares of common stock that may be issued pursuant to outstanding unearned PSUs reflects the target payout. At maximum payout, the number of shares would increase by 435,539. For additional information about how PSUs are earned, see “Recent PSUs” on page 62. |
| (2) | Includes 5,127,280 shares of common stock that remain available for issuance under The Bank of New York Mellon Corporation Employee Stock Purchase Plan and 30,425,882 shares of common stock that remain available for issuance under the LTIP. |
| (3) | Includes 86,573 shares of common stock that may be issued pursuant to deferrals under the Bank of New York Directors Plan, which is described in further detail under “Director Compensation” beginning on page 44 above. |
| (4) | The weighted average term for the expiration of outstanding stock options under our equity compensation plans is 0.9 years. |
| (5) | This weighted-average exercise price relates only to the options described in footnote 1. Shares underlying RSUs, PSUs and deferred share units are deliverable without the payment of any consideration, and therefore these awards have not been taken into account in calculating the weighted-average exercise price. |
| BNY Mellon Ø | 2021 Proxy Statement | 91 |
Table of Contents
| ADDITIONAL INFORMATION | > Information on Stock Ownership | |||
Beneficial Ownership of Shares by Holders of
More Than 5% of Outstanding Stock
As of February 16, 2021, we had 876,951,416 shares of common stock outstanding. Based on filings made under Section 13(d) and 13(g) of the Exchange Act reporting ownership of shares and percent of class as of December 31, 2020, the only persons known by us to be beneficial owners of more than 5% of our common stock as of February 16, 2021 were as follows:
| Name and Address of Beneficial Owner |
Shares of Common Stock Beneficially Owned |
Percent of Class | ||||||||
| Warren E. Buffett and Berkshire Hathaway Inc.(1) 3555 Farnam Street |
74,346,864 | 8.4 | % | |||||||
| The Vanguard Group(2)
|
64,062,939 | 7.23 | % | |||||||
| Dodge &
Cox(3) |
61,388,437 | 6.9 | % | |||||||
| BlackRock, Inc.(4)
|
56,473,493 | 6.4 | % | |||||||
| (1) | Based on a review of the Schedule 13G/A filed on February 16, 2021 by Warren E. Buffett, Berkshire Hathaway Inc. and certain other reporting persons. The Schedule 13G/A discloses that Mr. Buffett had shared voting power as to 74,346,864 shares and shared dispositive power as to 74,346,864 shares, and Berkshire Hathaway Inc. had shared voting power as to 74,346,864 shares and shared dispositive power as to 74,346,864 shares (including shares beneficially owned by certain subsidiaries of Berkshire Hathaway Inc. as a result of being a parent holding company or control person). |
| (2) | Based on a review of the Schedule 13G/A filed on February 10, 2021 by The Vanguard Group. The Schedule 13G/A discloses that The Vanguard Group had shared voting power as to 1,305,186 shares, sole dispositive power as to 60,481,660 shares and shared dispositive power as to 3,581,279 shares. |
| (3) | Based on a review of the Schedule 13G/A filed on February 11, 2021 by Dodge & Cox. The Schedule 13G/A discloses that Dodge & Cox had sole voting power as to 58,105,482 shares and sole dispositive power as to 61,388,437 shares. |
| (4) | Based on a review of the Schedule 13G/A filed on February 1, 2021 by BlackRock, Inc. The Schedule 13G/A discloses that BlackRock, Inc. had sole voting power as to 47,045,364 shares and sole dispositive power as to 56,473,493 shares. |
We and our affiliates engage in ordinary course brokerage, asset management or other transactions or arrangements with, and may provide ordinary course financial services to, holders of 5% or more of our outstanding common stock, including asset servicing, clearing, issuer services, treasury services, global markets, broker-dealer, liquidity investment and credit services. These transactions are negotiated on an arm’s-length basis and contain terms and conditions that are substantially similar to those offered to other customers under similar circumstances. Please also refer to the “Business Relationships and Related Party Transactions Policy” starting on page 31 for additional information.
| 92 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ADDITIONAL INFORMATION > Information on Stock Ownership |
Beneficial Ownership of Shares by Directors
and Executive Officers
The table below sets forth the number of shares of our common stock beneficially owned as of the close of business on February 16, 2021 by each director, each nominee for director, each individual included in the “2020 Summary Compensation Table” on page 71 above and our current directors and executive officers as a group, based on information furnished by each person. Sole voting and sole investment power with respect to the shares shown in the table below are held either by the individual alone or by the individual together with his or her immediate family. Each of our directors and executive officers is subject to our robust anti-hedging and anti-pledging policy, which is described above under “Hedging and Pledging” on page 67.
| Beneficial Owners |
Shares of Common Stock Beneficially Owned(1)(2) | |
| Linda Z. Cook |
14,101 | |
| Joseph J. Echevarria |
52,864 | |
| Bridget Engle |
48,248 | |
| Thomas P. “Todd” Gibbons |
416,019(3) | |
| M. Amy Gilliland |
0 | |
| Jeffrey A. Goldstein |
49,362 | |
| K. Guru Gowrappan |
0 | |
| Mitchell E. Harris |
87,047 | |
| Ralph Izzo |
1,594 | |
| Catherine M. Keating |
14,988 | |
| Edmund F. Kelly |
64,106 | |
| Jennifer B. Morgan |
12,570 | |
| Lester J. Owens |
15,348 | |
| Emily Portney |
32,706 | |
| Elizabeth E. Robinson |
15,804 | |
| Michael P. Santomassimo |
21,824 | |
| Samuel C. Scott III |
75,287 | |
| Frederick Terrell |
5,110 | |
| Robin Vince |
0 | |
| Alfred W. Zollar |
8,502 | |
| All current directors and executive officers, as a group (23 persons) |
1,049,508 | |
| (1) | On February 16, 2021, none of the individuals named in the above table beneficially owned more than 1% of our outstanding shares of common stock. All current directors and executive officers as a group beneficially owned approximately 0.12% of our outstanding stock on February 16, 2021. |
| (2) | Includes the following amounts of common stock which the indicated individuals and group have the right to acquire under our equity plans and deferred compensation plans within 60 days of February 16, 2021: Ms. Cook, 14,101; Mr. Echevarria, 52,864; Ms. Engle, 25,586; Mr. Gibbons, 55,925; Mr. Goldstein, 49,362; Mr. Harris, 75,584; Mr. Izzo 1,594; Mr. Kelly, 59,672; Ms. Morgan, 12,570; Ms. Portney 2,139; Ms. Robinson, 15,804; Mr. Scott, 71,325; Mr. Terrell, 5,110; Mr. Zollar, 8,502; and current directors and executive officers as a group, 412,825. |
| (3) | Includes 155,927 shares held in Mr. Gibbons’ Grantor Retained Annuity Trust. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors and executive officers and any beneficial owner of more than 10% of any class of our equity securities to file with the SEC initial reports of beneficial ownership and reports of changes in ownership of any of our securities. These reports are made on documents referred to as Forms 3, 4 and 5. Our directors and executive officers must also provide us with copies of these reports. We have reviewed the copies of the reports that we have received and written representations that no Form 5 was required from the individuals required to file the reports. Based on this review, we believe that during 2020 each of our directors and executive officers timely complied with applicable reporting requirements for transactions in our equity securities.
| BNY Mellon Ø | 2021 Proxy Statement | 93 |
Table of Contents
| ADDITIONAL INFORMATION | > Annual Meeting Q&A | |||
The Board is soliciting your proxy for our 2021 Annual Meeting of Stockholders and any adjournment of the meeting, for the purposes set forth in the Notice of Annual Meeting. Out of consideration for the health and wellbeing of our stockholders, employees, partners and communities, and in light of limitations on travel and large gatherings due to the COVID-19 pandemic, after consultation with management, the Board considered management’s proposal and approved proceeding with a virtual meeting format for the 2021 Annual Meeting of Stockholders. Accordingly, and as provided in the Notice of Annual Meeting, the 2021 Annual Meeting of Stockholders will be conducted solely by means of remote communication. The meeting will be held via a live webcast, with the Board, the director nominees who currently do not serve on our Board and certain members of management joining the webcast from remote locations.
The format of our Annual Meeting has been designed to ensure that stockholders are afforded the same opportunity to participate as they would at an in-person meeting. Accordingly, all the members of our Board and certain members of management are expected to be available for questions, and we are committed to acknowledging each relevant question we receive pursuant to our Rules of Conduct (see “How Can I Submit A Question At The Annual Meeting?” below for additional information).
| Q: | Who Can Attend The Annual Meeting? How Do I Attend? |
| A: | You can attend the Annual Meeting exclusively virtually at www.virtualshareholdermeeting.com/BK2021. If you are a holder of record of our common stock at the close of business on February 16, 2021 (the “record date”), you are entitled to notice of the Annual Meeting and may participate at the Annual Meeting by voting your shares. Once you access the virtual meeting platform, you can login by entering the 16-digit control number found on your Notice, proxy card or voting instruction form that accompanied your proxy materials. Using the 16-digit control number, you may login to the virtual meeting platform starting at 8:45 a.m. Eastern Time, and the meeting will begin promptly at 9:00 a.m. Eastern Time. |
| You may also visit www.virtualshareholdermeeting.com/BK2021 and login as a guest in the event that you do not have a 16-digit control number. You will not be able to vote your shares or submit questions during the meeting if you participate as a guest through the virtual meeting platform. |
The recording, distribution or reproduction of the Annual Meeting, or any portion of the Annual Meeting, for any reason is strictly prohibited.
| Q: | What If I Am Having Technical Difficulties Or Want Additional Information? |
| A: | If you are experiencing technical difficulties accessing the Annual Meeting, you may call the technical support numbers posted on the log-in page of the virtual meeting platform. For additional stockholder support or if you have any other questions, please contact us at https://www.bnymellon.com/us/en/investor-relations/investor-contacts.html. |
| Q: | How Can I Submit A Question At The Annual Meeting? |
| A: | As part of the Annual Meeting, we will hold a live question and answer session during which we intend to answer all questions properly submitted during the Annual Meeting in accordance with the Annual Meeting Rules of Conduct that are pertinent to the company and the Annual Meeting matters and as time permits. The Annual Meeting Rules of Conduct will be made available on the virtual meeting platform. Questions that we determine do not conform with the Annual Meeting Rules of Conduct, are not otherwise directly related to the business of the company and are not pertinent to the Annual Meeting matters will not be answered. Consistent with our past practice for in-person annual meetings, each stockholder will be limited to one question so as to allow us to respond to as many stockholder questions as possible in the allotted time. We will address substantially similar questions, or questions that relate to the same topic, in a single response. |
| 94 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ADDITIONAL INFORMATION > Annual Meeting Q&A |
We ask that all stockholders provide their name and contact details when submitting a question through the virtual meeting platform so that we may address any individual concerns or follow up matters directly. If you have a question of personal interest that is not of general concern to all stockholders, or if a question posed at the Annual Meeting was not otherwise answered, we encourage you to contact us separately after the Annual Meeting by visiting https://www.bnymellon.com/us/en/investor-relations/investor-contacts.html.
Once you login to the virtual meeting platform at www.virtualshareholdermeeting.com/BK2021, you may select the “Q&A” button on the bottom right side of the virtual meeting platform interface and then type your question into the “Submit a Question” field and click “Submit”.
Please note that stockholders will need their valid 16-digit control number to ask questions at the Annual Meeting. See “Who Can Attend The Annual Meeting? How Do I Attend?” above for information on how to obtain your 16-digit control number. If you are a “beneficial owner,” also known as a “street name” holder, please see “What If I Am A “Beneficial Owner?”’ below for more information.
| Q: | Who Can Vote At The Annual Meeting? |
| A: | Only stockholders as of the record date, February 16, 2021, may vote electronically during the Annual Meeting. On the record date, we had 876,951,416 shares of common stock outstanding. You are entitled to one vote for each share of common stock that you owned on the record date. The shares of common stock held in our treasury will not be voted. Your vote is important. Whether or not you plan to attend the Annual Meeting, we encourage you to vote your shares promptly. Please see “What If I Am A “Beneficial Owner?”’ below for information on providing voting instructions if you hold your shares of common stock through a broker, bank or other nominee. |
| Q: | What Is A Proxy? |
| A: | Your proxy gives us authority to vote your shares and tells us how to vote your shares at the Annual Meeting or any adjournment. Three of our employees, who are called “proxies” or “proxy holders” and are named on the proxy card, will vote your shares at the Annual Meeting according to the instructions you give on the proxy card or by telephone or over the Internet. |
| Q: | How Are Proxy Materials Being Distributed? |
| A: | We are using the SEC rule that allows companies to furnish proxy materials to their stockholders over the Internet. In accordance with this rule, on or about March 2, 2021, we sent a Notice or a full set of proxy materials to our stockholders of record at the close of business on February 16, 2021. The Notice contains instructions on how to access the Proxy Statement and 2020 Annual Report via the internet and how to vote. If you receive a Notice, you will not receive a printed copy of the proxy materials in the mail. Instead, the Notice instructs you on how to access and review all of the important information contained in the proxy materials. The Notice also instructs you on how you may submit your proxy via the Internet. This proxy statement will also be available on our website at www.bnymellon.com/proxy as well as on the virtual meeting platform. |
The electronic method of delivery will enable us to reduce our environmental impact, decrease our postage and printing expenses and expedite delivery of proxy materials to you, and we encourage you to take advantage of the availability of the proxy materials on the Internet. If you received a Notice and would like to receive a copy of our proxy materials, follow the instructions contained in the Notice to request a copy electronically or in paper form on a one-time or ongoing basis. Stockholders who do not receive the Notice will receive either a paper or electronic copy of this proxy statement and the 2020 Annual Report, which will be sent on or about March 2, 2021.
| BNY Mellon Ø | 2021 Proxy Statement | 95 |
Table of Contents
| ADDITIONAL INFORMATION > Annual Meeting Q&A |
| Q: | How Do I Vote? What Are The Different Ways I Can Vote My Shares? |
| A: | If you are a “stockholder of record” (that is, you hold your shares of our common stock in your own name), you may vote your shares by using any of the following methods. Depending on how you hold your shares, you may receive more than one proxy card. |
|
Electronically at the Annual Meeting If you are a registered stockholder or hold a proxy from a registered stockholder (and meet other requirements as described in “Who Can Attend the Annual Meeting? How Do I Attend?” above), you may attend the Annual Meeting and vote electronically through the virtual meeting platform.
| |
|
|
By Submitting a Proxy by Mail To submit a proxy by mail, complete, sign, date and return the proxy card in the postage-paid envelope provided to you.
| |
|
By Submitting a Proxy by Telephone To submit a proxy by telephone, call the toll-free telephone number listed on the proxy card. The telephone voting procedures, as set forth on the proxy card, are designed to authenticate your identity, to allow you to provide your voting instructions and to confirm that your instructions have been properly recorded. If you vote by telephone, you should not return your proxy card.
| |
|
By Submitting a Proxy by Internet To submit a proxy by Internet prior to the Annual Meeting, use the Internet site listed on the proxy card. The Internet voting procedures, as set forth on the proxy card, are designed to authenticate your identity, to allow you to provide your voting instructions and to confirm that your instructions have been properly recorded. If you vote by Internet, you should not return your proxy card.
|
| Q: | What If I Am A “Beneficial Owner?” |
| A: | If you are a “beneficial owner,” also known as a “street name” holder (that is, you hold your shares of our common stock through a broker, bank or other nominee), you will receive instructions on how to access the virtual meeting platform and participate and vote at the meeting (including, if your broker, bank or other nominee elects to do so, instructions on how to vote your shares by telephone or over the Internet) as part of your proxy materials provided by the record holder. You must follow those instructions to be able to access the Annual Meeting and have your shares voted. |
| Q: | If I Vote By Proxy, How Will My Shares Be Voted? What If I Submit A Proxy Without Indicating How To Vote My Shares? |
| A: | If you vote by proxy through mail, telephone or over the Internet, your shares will be voted in accordance with your instructions. If you sign, date and return your proxy card without indicating how you want to vote your shares, the proxy holders will vote your shares in accordance with the following recommendations of the Board: |
| Proposal 1
|
FOR the election of each nominee for director.
| |
| Proposal 2
|
FOR the advisory resolution to approve the 2020 compensation of our NEOs.
| |
| Proposal 3
|
FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021.
| |
| Proposal 4
|
AGAINST the stockholder proposal regarding stockholder requests for a record date to initiate written consent, if properly presented.
| |
In addition, if other matters are properly presented for voting at the Annual Meeting, the proxy holders are also authorized to vote on such matters as they shall determine in their sole discretion. As of the date of this proxy statement, we have not received notice of any other matters that may be properly presented for voting at the Annual Meeting.
| 96 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ADDITIONAL INFORMATION > Annual Meeting Q&A |
| Q: | What If I Want To Revoke My Proxy? |
| A: | You may revoke your proxy at any time before it is voted at the Annual Meeting by: |
| • | delivering a written notice of revocation to our Corporate Secretary at 240 Greenwich Street, New York, NY 10286 or via email to CorporateSecretary@bnymellon.com; |
| • | submitting another signed proxy card with a later date; |
| • | submitting another proxy by telephone or over the Internet at a later date; or |
| • | attending the Annual Meeting and voting electronically. |
| Q: | What Is A Quorum? |
| A: | A quorum is the minimum number of shares required to conduct business at the Annual Meeting. Under our by-laws, to have a quorum, a majority of the outstanding shares of stock entitled to vote at the Annual Meeting must be represented electronically or by proxy at the meeting. Abstentions and broker non-votes (as defined below) are counted as present for determining the presence of a quorum. Inspectors of election appointed for the Annual Meeting will tabulate all votes cast electronically or by proxy at the Annual Meeting. In the event a quorum is not present at the Annual Meeting, we expect that the Annual Meeting will be adjourned or postponed to solicit additional proxies. |
| Q: | What Vote Is Required For Approval Of A Proposal At The Annual Meeting? |
| A: | Our by-laws provide for a majority vote standard in an uncontested election of directors, such as this year’s election. Accordingly, each of the 12 nominees for director will be elected if more votes are cast “for” a director’s election than are cast “against” such director’s election, as discussed further under “Majority Voting Standard” on page 21 above. All other matters to be voted on at the Annual Meeting require the favorable vote of a majority of the votes cast on the applicable matter electronically at the Annual Meeting or by proxy for approval. |
Abstentions and broker non-votes are not treated as votes cast, will not have the effect of a vote for or against a proposal or for or against a director’s election, and will not be counted in determining the number of votes required for approval or election.
| Q: | What If I Hold My Shares Through A Broker? |
| A: | If your shares are held through a broker, the broker will ask you how you want your shares to be voted. If you give the broker instructions, your shares will be voted as you direct. If you do not give instructions, one of two things can happen, depending on the type of proposal. For the ratification of the auditor (Proposal 3), the broker may vote your shares in its discretion. For all other proposals, the broker may not vote your shares at all if you do not give instructions (this is referred to as a “broker non-vote”). As a result, on each of these items (other than Proposal 3), if you hold your shares in street name, your shares will be voted only if you give instructions to your broker. |
| BNY Mellon Ø | 2021 Proxy Statement | 97 |
Table of Contents
| ADDITIONAL INFORMATION | > Other Information | |||
Stockholder Proposals for 2022 Annual Meeting
Stockholder proposals intended to be included in our proxy statement and voted on at our 2022 Annual Meeting of Stockholders (other than proxy access nominations) must be received at our offices at 240 Greenwich Street, New York, NY 10286, Attention: Corporate Secretary or via email at CorporateSecretary@bnymellon.com, on or before November 2, 2021. Stockholders who wish to submit a proxy access nomination for inclusion in our proxy statement in connection with our 2022 Annual Meeting of Stockholders may do so by submitting a nomination in compliance with the procedures and along with the other information required by our by-laws to 240 Greenwich Street, New York, NY 10286, Attention: Corporate Secretary, or via email at CorporateSecretary@bnymellon.com, no earlier than October 3, 2021 and no later than November 2, 2021. Applicable SEC rules and regulations and the provisions of our by-laws govern the submission, and our consideration, of stockholder proposals or proxy access candidates for inclusion in the 2022 Annual Meeting proxy statement and form of proxy.
Pursuant to our by-laws, in order for any business not included in the notice of meeting for the 2022 Annual Meeting of Stockholders to be brought before the meeting by a stockholder entitled to vote at the meeting (including nominations of candidates for director), the stockholder must give timely written notice of that business to our Corporate Secretary. To be timely, the notice must not be received any earlier than November 2, 2021 (at least 120 days prior to March 2, 2022), nor any later than December 2, 2021 (90 days prior to March 2, 2022). The notice also must contain the information required by our by-laws. The foregoing by-law provisions do not affect a stockholder’s ability to request inclusion of a proposal in our proxy statement within the procedures and deadlines set forth in Rule 14a-8 of the SEC’s proxy rules and referred to in the paragraph above. A proxy may confer discretionary authority to vote on any matter at a meeting if we do not receive notice of the matter within the timeframes described above. A copy of our by-laws is available upon request to: The Bank of New York Mellon Corporation, 240 Greenwich Street, New York, NY 10286, Attention: Corporate Secretary or via email at CorporateSecretary@bnymellon.com and can also be found on our Corporate website (see “Helpful Resources” on page 100 for information on how to access our by-laws electronically). The officer presiding at the meeting may exclude matters that are not properly presented in accordance with these requirements.
How Our Board Solicits Proxies; Expenses of Solicitation
We will pay all costs of soliciting proxies. We have retained Georgeson, Inc. to assist with the solicitation of proxies for a fee of approximately $40,000, plus reimbursement of reasonable out-of-pocket expenses. We must also pay brokerage firms, banks, broker-dealers and other similar organizations representing beneficial owners certain fees associated with:
| • | Forwarding the Notice of Internet Availability to beneficial owners, |
| • | Forwarding printed materials by mail to beneficial owners who specifically request such materials, and |
| • | Obtaining beneficial owners’ voting instructions. |
We may also use our officers and employees, at no additional compensation, to solicit proxies either personally or by telephone, Internet, letter or facsimile.
To reduce the expense of delivering duplicate proxy materials to our stockholders, we are relying on SEC rules that permit us to deliver only one proxy statement to multiple stockholders who share an address unless we receive contrary instructions from any stockholder at that address. This practice, known as “householding,” reduces duplicate mailings, saves printing and postage costs as well as natural resources and will not affect dividend check mailings. If you wish to receive a separate copy of the 2020 Annual Report or proxy statement, or if you wish to receive separate copies of future annual reports or proxy statements, please contact our Annual Meeting provider, Broadridge, by phone at 1-800-579-1639, by Internet at www.proxyvote.com or by email at sendmaterial@proxyvote.com. We will deliver the requested documents promptly upon your request.
| 98 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ADDITIONAL INFORMATION > Other Information |
As of the date of this proxy statement, we do not know of any other matters that may be presented for action at the meeting. Should any other business properly come before the meeting, the persons named on the enclosed proxy will, as stated therein, have discretionary authority to vote the shares represented by such proxy in accordance with their best judgment.
March 2, 2021
By Order of the Board,
James J. Killerlane III
Corporate Secretary
| BNY Mellon Ø | 2021 Proxy Statement | 99 |
Table of Contents
| ADDITIONAL INFORMATION | > Helpful Resources | |||
Annual Meeting
|
2021 Virtual Meeting Platform
|
www.virtualshareholdermeeting.com/BK2021
| |
|
2021 Proxy Statement
|
www.bnymellon.com/proxy
| |
|
2020 Annual Meeting of Stockholders Voting Results
|
https://www.bnymellon.com/us/en/investor-relations/annual
-meeting | |
Corporate Governance
|
By-laws
|
https://www.bnymellon.com/content/dam/bnymellon/documents/pdf /investor-relations/the-bank-of-new-york-mellon-corporation -amended-and-restated-by-laws.pdf.coredownload.pdf
| |
|
Committee Charters
|
https://www.bnymellon.com/us/en/investor-relations/corporate -governance.html | |
|
Corporate Governance Guidelines
|
https://www.bnymellon.com/us/en/investor-relations/corporate -governance/corporate-governance-guidelines.html
| |
|
Contacting the Board
|
https://www.bnymellon.com/us/en/investor-relations/corporate -governance/communications-with-independent-chairman.html
| |
|
Employee Code of Conduct
|
https://www.bnymellon.com/us/en/investor-relations/employee -code-of-conduct.html
| |
|
Directors’ Code of Conduct
|
https://www.bnymellon.com/content/dam/bnymellon/documents/pdf /investor-relations/directors-code-of-conduct.pdf.coredownload.pdf
| |
|
Audit and Permitted Non-Audit Services Pre-Approval Policy
|
https://www.bnymellon.com/content/dam/bnymellon/documents/pdf /investor-relations/audit-and-permitted-non-audit-services-pre-approval -policy.pdf.coredownload.pdf
| |
| 100 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
| ADDITIONAL INFORMATION > Helpful Resources |
Enterprise ESG
|
2019 Corporate Social Responsibility Report
|
https://www.bnymellon.com/csr
| |
|
Human Rights Statement
|
https://www.bnymellon.com/us/en/about-us/global-impact/enterprise-esg /human-rights-statement.html
| |
|
Equal Employment Opportunity/ Affirmative Action policy
|
https://www.bnymellon.com/content/dam/bnymellon/documents/pdf/csr /equal-employment-opportunity-and-affirmative -action.pdf.coredownload.pdf
| |
|
Notice of Affirmative Action Programs and Notice to Veterans and Individuals with Disabilities
|
https://www.bnymellon.com/content/dam/bnymellon/documents/pdf/csr /notice-of-affirmative-action-programs-and-notice-to-veterans-and -individuals-with-disabilities.pdf.coredownload.pdf
| |
|
Sexual and Other Discriminatory Harassment policy
|
https://www.bnymellon.com/content/dam/bnymellon/documents/pdf/csr /sexual-and-other-discriminatory-harassment.pdf.coredownload.pdf
| |
|
Health and Safety Statement
|
https://www.bnymellon.com/content/dam/bnymellon/documents/pdf/csr /health-and-safety-statement.pdf.coredownload.pdf
| |
|
UK Modern Slavery Act Statement
|
https://www.bnymellon.com/emea/en/modern-slavery-act.html
| |
|
Supplier Code of Conduct
|
https://www.bnymellon.com/content/dam/bnymellon/documents /pdf/csr/bny-mellon-supplier-code-of-conduct.pdf.coredownload.pdf
| |
|
Gender Equality Statement |
https://www.bnymellon.com/content/dam/bnymellon/documents/pdf/csr /gender-equality-statement.pdf.coredownload.pdf
| |
The Bank of New York Mellon Corporation
|
Corporate Website
|
https://www.bnymellon.com
| |
|
2020 Annual Report
|
https://www.bnymellon.com/us/en/investor-relations/annual-reports-and-proxy.html
| |
|
Regulatory Filings
|
https://www.bnymellon.com/us/en/investor-relations/regulatory-filings.html
| |
|
Frequently Asked Questions
|
https://www.bnymellon.com/us/en/investor-relations/shareholder-information.html
| |
|
Company Profile
|
https://www.bnymellon.com/us/en/about-us/about-bny-mellon.html
| |
|
Leadership
|
https://www.bnymellon.com/us/en/about-us/leadership.html
| |
|
Earnings Press Releases
|
https://www.bnymellon.com/us/en/investor-relations/quarterly-earnings.html
| |
|
Credit Ratings
|
https://www.bnymellon.com/us/en/investor-relations/bondholder-information.html
| |
| BNY Mellon Ø | 2021 Proxy Statement | 101 |
Table of Contents
| ANNEX A: NON-GAAP RECONCILIATION | ||||
Reconciliation of net income and diluted EPS
The following table reconciles our net income applicable to common shareholders of The Bank of New York Mellon Corporation and diluted earnings per common share. These measures exclude the effects of certain items, as specified in the table. We believe that these measures are useful to permit investors to view the financial measures on a basis consistent with how management views the businesses.
| Net Income |
Diluted EPS |
|||||||||||||||
|
2019 |
2020 |
2019 |
2020 |
|||||||||||||
| Net income available to common—reported |
$4,272 | $3,423 | $4.51 | $3.83 | ||||||||||||
| Add: Net impact of notable items |
(467)(a) | 159(b) | (0.49)(a) | 0.18(b) | ||||||||||||
| Net income available to common—operating |
$3,805 | $3,582 | $4.02 | $4.01 | ||||||||||||
| (a) | Includes a gain on sale of an equity investment, severance, net securities losses and litigation expense recorded in the fourth quarter of 2019. Also includes a lease-related impairment and a net reduction of reserves for tax-related exposure of certain investment management funds both recorded in the third quarter of 2019. |
| (b) | Includes litigation expense, severance, losses on business sales and real estate charges recorded in the fourth quarter of 2020. |
| 102 | BNY Mellon Ø | 2021 Proxy Statement |
Table of Contents
The Bank of New York Mellon Corporation
240 Greenwich Street
New York, NY 10286
+1 212 495 1784
www.bnymellon.com
Table of Contents
|
|
| |
| THE BANK OF NEW YORK MELLON CORPORATION 240 GREENWICH STREET NEW YORK, NY 10286 ATTN: JAMES J. KILLERLANE III |
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on April 8, 2021 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/BK2021 | |
|
You may attend the Annual Meeting via live webcast on the Internet and vote at the meeting Have the information that is printed in the box marked by the arrow available and follow the instructions. | ||
|
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on April 8, 2021 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. | ||
|
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||||
| D33907-P47631-Z78713-Z78714 KEEP THIS PORTION FOR YOUR RECORDS | ||||
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY | ||||
|
|
THE BANK OF NEW YORK MELLON CORPORATION |
|||||||||||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR all nominees for director, FOR Proxy Item 2, FOR Proxy Item 3, and AGAINST Proxy Item 4. |
||||||||||||||||||||||||||||||||||||
|
1. |
Election of Directors |
|||||||||||||||||||||||||||||||||||
|
Nominees: |
For | Against | Abstain | |||||||||||||||||||||||||||||||||
|
1a. Linda Z. Cook |
☐ | ☐ | ☐ | For | Against | Abstain | ||||||||||||||||||||||||||||||
|
1b. Joseph J. Echevarria |
☐ |
☐ |
☐ |
1k. Frederick O. Terrell |
☐ |
|
☐ |
|
|
☐ |
|
|||||||||||||||||||||||||
|
1c. Thomas P. “Todd” Gibbons |
☐ |
☐ |
☐ |
1l. Alfred W. “Al” Zollar |
☐ |
|
☐ |
|
|
☐ |
|
|||||||||||||||||||||||||
|
1d. M. Amy Gilliland |
☐ |
☐ |
☐ |
2. |
Advisory resolution to approve the 2020 compensation of our named executive officers. |
☐ |
|
☐ |
|
|
☐ |
|
||||||||||||||||||||||||
|
1e. Jeffrey A. Goldstein |
☐ |
☐ |
☐ |
3.
|
Ratification of KPMG LLP as our independent auditor for 2021. |
☐ |
|
☐ |
|
|
☐ |
|
||||||||||||||||||||||||
|
1f. K. Guru Gowrappan |
☐ |
☐ |
☐ |
4. |
Stockholder proposal regarding stockholder requests for a record date to initiate written consent. |
☐ |
|
☐ |
|
|
☐ |
|
||||||||||||||||||||||||
|
1g. Ralph Izzo |
☐ |
☐ |
☐ |
|||||||||||||||||||||||||||||||||
|
1h. Edmund F. “Ted” Kelly |
☐ |
☐ |
☐ |
|||||||||||||||||||||||||||||||||
|
1i. Elizabeth E. Robinson |
☐ |
☐ |
☐ |
|||||||||||||||||||||||||||||||||
|
1j. Samuel C. Scott III |
☐ |
☐ |
☐ |
|||||||||||||||||||||||||||||||||
| Note: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. |
|
|||||||||||||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX]
|
Date
|
Signature (Joint Owners)
|
|
Date
|
|
|||||||||||||||||||||||||||||||
Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Statement and the 2020 Annual Report to Shareholders are available at www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
D33908-P47631-Z78713-Z78714
Proxy — THE BANK OF NEW YORK MELLON CORPORATION (the “Corporation”)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned hereby appoints James J. Killerlane III, Zachary J. Levine and Blair F. Petrillo or any of them, each with full power of substitution, as attorneys and proxies of the undersigned to vote all The Bank of New York Mellon Corporation Common Stock which the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Corporation to be held on Tuesday, April 13, 2021, at 9:00 a.m., via live webcast at www.virtualshareholdermeeting.com/BK2021 and at any adjournment of such meeting, as fully and effectually as the undersigned could do if personally present, and hereby revokes all previous proxies for said meeting. Where a vote is not specified, the proxies will vote the shares represented by this Proxy FOR the election of all nominees for director, FOR Proxy Item 2, FOR Proxy Item 3, and AGAINST Proxy Item 4, and will vote in their discretion on such other matters that may properly come before the meeting and at any adjournment of such meeting.
Participants in the 401(k), ESOP, Deferred Share Award and/or Deferred Compensation Plans: Your vote will provide voting instructions to the trustee of the plan to vote the proportionate interest as of the record date. If no instructions are given by the vote cut-off date of April 8, 2021 at 11:59 EDT, the trustee will vote, subject to review by the voting fiduciary, unvoted shares in the same proportion as voted shares. Consequently, a failure to sign and return a ballot is not equivalent to voting with respect to any of the propositions on the ballot.
Participants in the UK Stock Accumulation Plan (“SAP”): If voting instructions are properly provided, shares will be voted in accordance with those instructions. If you properly sign and return the attached ballot but fail to provide a specific voting direction for a particular proposition on the ballot, then any shares you hold in the SAP will be voted in accordance with the recommendation of the Board of Directors on such proposition. If you do not properly sign and return the ballot or provide instructions by telephone or Internet, then for shares held in the SAP, no vote will be recorded. Consequently, a failure to provide instructions is not equivalent to voting with respect to any proposition on the ballot.
This proxy is solicited on behalf of the Board of Directors of the Corporation, and may be revoked prior to its exercise. The Board of Directors recommends votes FOR the election of all nominees for director, FOR Proxy Item 2, FOR Proxy Item 3, and AGAINST Proxy Item 4.
(Continued and to be marked, dated and signed, on the reverse side.)