DEF 14A of US Bancorp \de\

Filed Mar 5, 2025 · FY20240001104659-25-020883

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| Compensation Committee report | 59 | | Executive compensation | 60 | | ▶ Summary compensation table | 60 | | ▶ Grants of plan-based awards | 62 | | ▶ Outstanding equity awards | 63 | | ▶ Option exercises and stock vested | 65 | | ▶ Pension benefits | 65 | | ▶ Nonqualified deferred compensation | 68 | | ▶ Potential payments upon termination or change-in-control | 70 | | ▶ Pay ratio | 73 | | ▶ Pay versus performance | 74 | | Director compensation | 78 | | Audit Committee report and payment of fees to auditor | 80 | | Proposal 3 — Ratification of selection of independent auditor | 82 | | Proposal 4 — Shareholder proposal regarding a report on board oversight of risks relating to discrimination | 83 | | Security ownership of certain beneficial owners and management | 86 | | Questions and answers about the annual meeting and voting | 88 | | Other matters | 92 | | ▶ Annual report to shareholders and Form 10-K | 92 | | ▶ Communicating with U.S. Bancorp’s Board of Directors | 92 | | ▶ Deadlines for nominating directors and submitting proposals for the 2026 annual meeting | 92 | | ▶ Other matters for consideration | 93 | | Non-GAAP financial measures | 94 | | Forward-Looking Statements | 96 |
Director nominees at a glance
Director nominees at a glance
Director nominees at a glance
| Name1 | Age | Director Since | Primary Occupation | Committee Memberships | Independent | | Warner L. Baxter | 63 | 12/2015 | Retired Executive Chairman and Former Chairman, President and CEO, Ameren Corporation | A (Chair), CHR, E | | | Dorothy Bridges | 69 | 10/2018 | CEO, Metropolitan Economic Development Association (Meda) | PR (Chair), RM, E | | | Elizabeth L. Buse | 64 | 6/2018 | Former CEO, Monitise plc | A, RM | | | Andrew Cecere | 64 | 1/2017 | Chairman and CEO, U.S. Bancorp | E (Chair), C, RM | Current CEO | | Alan B. Colberg | 63 | 1/2023 | Retired President and CEO, Assurant, Inc. | A, PR | | | Kimberly N. Ellison-Taylor | 54 | 1/2021 | Founder and CEO, KET Solutions, LLC | A, PR | | | Aleem Gillani | 62 | 7/2024 | Retired Corporate Executive Vice President and CFO, SunTrust Banks, Inc. | A, RM | | | Kimberly J. Harris | 60 | 10/2014 | Retired President and CEO, Puget Energy, Inc. | G (Chair), CHR, E | | | Roland A. Hernandez Lead Independent Director | 67 | 1/2012 | Founding Principal and CEO, Hernandez Media Ventures | CHR, G, E | | | Gunjan Kedia | 54 | 1/2025 | President, U.S. Bancorp | E | Incoming CEO | | Richard P. McKenney | 56 | 10/2017 | President and CEO, Unum Group | C, G, RM | | | Yusuf I. Mehdi | 58 | 6/2018 | Executive Vice President, Consumer Chief Marketing Officer, Microsoft Corporation | C (Chair), PR, RM | | | Loretta E. Reynolds | 60 | 10/2022 | Founder and CEO, LEReynolds Group, LLC; Retired Lieutenant General, U.S. Marine Corps | C, PR, RM | | | John P. Wiehoff | 63 | 1/2020 | Retired Chairman and CEO, C.H. Robinson Worldwide, Inc. | RM (Chair), C, E | |
Director nominees at a glance
| A | Audit Committee | PR | Public Responsibility Committee | | CHR | Compensation and Human Resources Committee | RM | Risk Management Committee | | C | Cybersecurity and Technology Subcommittee | E | Executive Committee | | G | Governance Committee | | |
Director nominees at a glance
After ten years of dedicated service on our Board, including most recently as chair of the Compensation and Human Resources Committee and a member of the Governance Committee, Scott W. Wine informed the Board that he would not stand for re-election following expiration of his current term at the 2025 annual meeting.
Director nominees at a glance
| 4 | U.S. Bancorp 2025 Proxy Statement |
2025 incoming CEO compensation decision highlights
2025 incoming CEO compensation decision highlights As previously disclosed by the company on a Form 8-K filed on January 28, 2025, in connection with her election to the role of Chief Executive Officer effective April 15, 2025, the Board’s Compensation and Human Resources Committee determined that Ms. Kedia’s annual long-term equity award for 2025 would be valued at $10 million as of the grant date of February 27, 2025. ▶ The award is part of Ms. Kedia’s total direct compensation for 2025, including her services as CEO beginning in April, and is consistent with the structure and terms of awards granted to other executive officers for 2025. ▶ The award does not contain any special one-time components. ▶ The base salary and target annual cash incentive award that Ms. Kedia will receive as CEO will be determined when she assumes the CEO role. ▶ In alignment with the long-term interests of our shareholders, 60% of the long-term equity award’s value was granted in the form of performance-based restricted stock units (PRSUs) and 40% in the form of restricted stock units (RSUs), each with 3-year vesting periods. ▶ The PRSU award will be earned based on the company’s achievement of ROTCE and TSR financial performance metrics over a three-year performance period (2025-2027) as described in the “Compensation discussion and analysis” section of this proxy statement. In determining the value of Ms. Kedia’s 2025 long-term incentive award, the Compensation and Human Resources Committee considered, among other factors, the announced transition to the CEO role in 2025 and market pay levels.
Director nominee selection process
Director nominee selection process The selection process for first-time director candidates includes the following steps: ▶ identification of one or more desired profiles for director candidates based on the most recent assessment of the skill sets represented on the Board compared to the Board’s needs, as well as feedback received from the Board evaluation process; ▶ identification of candidates by the Governance Committee based upon information provided by a director search firm, suggestions from current directors and executive officers, and any recommendations received from shareholders and other sources; ▶ interviews of candidates by the Lead Independent Director and other directors; ▶ reports presented to the Board by the Governance Committee on the candidates and selection process; ▶ recommendations made by the Governance Committee; and ▶ election by the Board or formal nomination by the Board for inclusion in the slate of directors at the annual meeting. During 2024, Mr. Gillani was identified by a third-party search firm engaged by the Governance Committee to help identify and evaluate individuals for inclusion in the potential pool of director candidates, and was appointed to the Board following the Governance Committee’s and the Board’s review and evaluation process. A shareholder seeking to recommend a prospective candidate for the Governance Committee’s consideration should submit the candidate’s name and sufficient written information about the candidate to permit a determination by the Governance Committee of whether the candidate meets the director selection criteria set forth in our Corporate Governance Guidelines. Recommendations should be sent to the Chair of the Governance Committee in care of the Corporate Secretary of U.S. Bancorp at the address listed on page 92 of this proxy statement.
Board refreshment and nomination considerations
Board refreshment and nomination considerations Our Governance Committee continuously assesses the evolving opportunities and challenges facing our company in order to align the Board’s composition with our company’s leadership needs and strategic direction. The Governance Committee evaluates the composition of the Board against the company’s needs every year, which culminates in the process of nominating new and incumbent directors.
Board refreshment and nomination considerations
| 10 | U.S. Bancorp 2025 Proxy Statement |
Board refreshment and nomination considerations
The Governance Committee’s decision to renominate an incumbent director is informed by the director’s past attendance at meetings, participation in the work of the Board and overall contribution to the Board, as assessed in the annual Board evaluation process. The Board’s commitment to refreshment can require candid conversations with individual directors when the Governance Committee has determined that a different Board composition would increase the Board’s effectiveness. As a result of the Board evaluation and skills-to-strategy alignment processes, directors may decide or be asked not to stand for re-election at the next annual meeting. When a new director is sought, the Governance Committee considers the following factors: ▶ Skills and qualifications: When considering the skills and backgrounds desirable in future Board members, the Governance Committee identifies the professional experience and skill sets represented on the Board and compares them to the skill sets that the Governance Committee believes is important to have represented among the directors at any given time in light of the company’s current business, strategy, risks and opportunities. Any gaps become focus areas for director search efforts. See below for additional information on our directors’ skills and qualifications. ▶ Personal qualities: The Governance Committee will only consider as candidates for director individuals who possess the highest personal and professional ethics and integrity, and who are committed to representing the long-term interests of all our stakeholders. Directors must be able to work in a collegial manner with persons of different educational, business and cultural backgrounds. ▶ Board composition: As required by our Corporate Governance Guidelines, our Governance Committee is responsible for ensuring that the Board’s composition reflects a mix of members representing various backgrounds, perspectives, industries, skills, and professional experiences because the Board benefits from a variety of perspectives, experiences and skill sets in exercising its oversight role. Our Governance Committee regularly reviews the composition of the Board in light of those factors and other personal qualities and attributes represented by the Board’s current members. The Governance Committee incorporates this broad view of board composition into its director nomination process and is committed to ensuring that the Board’s composition appropriately reflects the current and anticipated needs of the Board and our company. ▶ Capacity: Serving on the board of a large financial institution requires a significant commitment of time and energy, and directors must be willing and able to devote sufficient attention to carrying out their duties and responsibilities effectively. The Governance Committee will consider the professional and other demands placed on candidates, including service on the boards of other public or private companies. Unless the Board determines that a director’s service to our company would not be impaired, a director may not serve on more than three other boards of public companies in addition to our Board, and a director who serves as the CEO of a public company may not serve on more than one public company board in addition to our Board (including the board of the company of which he or she serves as CEO). ▶ Tenure and refreshment: Our Governance Committee believes that it is important to maintain a balance of tenure on the Board to benefit from the business, industry and governance experience of longer-serving directors and the fresh perspectives contributed by new directors, while recognizing the value of continuity as Board composition changes. Our Governance Committee aims to have a measured rate of Board refreshment. Retirement and other considerations for incumbent directors: In addition to the factors stated above, the Governance Committee will evaluate any director’s continued service on the Board for appropriateness in each of the following circumstances: the director has a change in employment or other major responsibilities; an employee director ceases to be a company employee; and the director has reached the age of 72 since the last meeting of shareholders at which the director was elected.
Board refreshment and nomination considerations
| U.S. Bancorp 2025 Proxy Statement | 11 |
Skills and qualifications of our director nominees
Skills and qualifications of our director nominees The Governance Committee has identified certain skills, experiences and professional qualifications that are important to be represented on the Board for strong collective oversight of the company’s business and strategy. These skills and qualifications, along with the ways these experiences contribute to the Board’s collective oversight of the development and execution of the company’s strategy, are reflected in the chart below:
Skills and qualifications of our director nominees
| Skill or qualification | Criteria | Link to strategy | | | Chief executive experience | Are current or former CEOs of publicly held or large private corporations | | Have experience overseeing senior leadership, finance, marketing, and execution of corporate strategy from both a management and a board perspective | | Community or sustainability leadership | Have significant professional leadership experience in community service organizations, public policy roles, and/or sustainability matters (or a related certification) | | Provide perspective on our company’s connections to the communities it serves and responsible and sustainable business practices and opportunities | | Corporate governance | Have significant experience serving on and leading the boards of other large corporations and/or professional experience in the corporate governance field | | Help our Board fulfill its oversight function effectively | | Customer experience | Have executive-level experience in a consumer-focused industry other than financial services | | Provide insight into how our company interacts with retail customers | | Digital, technology, or cybersecurity experience | Have executive-level experience in an industry driving digital and/or technological change or cybersecurity experience through prior professional experience (or a related certification/ degree) | | Contribute expertise regarding digital capabilities, technological transformation, information security, or product innovation and evolving customer expectations | | Financial reporting and accounting | Have specialized financial reporting qualifications, such as experience as a CPA or as the CFO of a large corporation | | Are particularly well suited to overseeing the quality and integrity of our company’s financial statements | | Financial services industry experience | Have executive-level experience in the financial services industry | | Possess deep knowledge of the business challenges and opportunities facing our company | | Other regulated industry experience | Have executive-level experience in a regulated industry other than financial services | | Provide a valuable perspective on how an extensive regulatory framework intersects with strategic and operational planning | | Risk management | Have specific risk-management expertise, gained through leadership at a critical infrastructure company, in the financial services industry, at a financial regulator, or in the military | | Are particularly adept at identifying and assessing the varied risks facing our company as a large financial institution |
Skills and qualifications of our director nominees
| 12 | U.S. Bancorp 2025 Proxy Statement |
Skills and qualifications of our director nominees
The following matrix highlights the specific skills and qualifications that our Board views as important when evaluating director nominees. Additional information on the business experience and other qualifications of each director nominee is included in the director’s biography below. Each director also contributes other important skills, expertise, experience, viewpoints, and personal attributes to our Board that are not reflected in the matrix below.
Skills and qualifications of our director nominees
| | Skills and qualifications | | | | | | | | | | Director | CEO experience | Community or sustainability leadership | Corporate governance | Customer experience | Digital, technology, or cybersecurity experience | Financial reporting and accounting | Financial services industry experience | Other regulated industry experience | Risk management | | Baxter | • | • | • | | | • | | • | • | | Bridges | | • | | | | | • | | • | | Buse | | | • | | | | • | | • | | Cecere | • | | • | | | • | • | | • | | Colberg | • | | • | | | • | • | | • | | Ellison-Taylor | | • | | • | • | • | | | | | Gillani | | | | | | • | • | | • | | Harris | • | • | | | | | | • | • | | Hernandez | • | | • | • | | • | | | | | Kedia | | | | • | • | | • | | • | | McKenney | • | | • | | | • | • | | • | | Mehdi | | | | • | • | | | | | | Reynolds | | | | | • | | | | • | | Wiehoff | • | | • | | • | • | | | • | | # of Directors | 7 | 4 | 7 | 4 | 5 | 8 | 7 | 2 | 11 |
Skills and qualifications of our director nominees
| Director | Board age, tenure, and other directorships | | | | | Age (years) | Years on the board (from date first elected) | # of other public company boards | | Baxter | 63 | 9 | 2 | | Bridges | 69 | 6 | 0 | | Buse | 64 | 6 | 1 | | Cecere | 64 | 8 | 0 | | Colberg | 63 | 2 | 1 | | Ellison-Taylor | 54 | 4 | 1 | | Gillani | 62 | 0 | 1 | | Harris | 60 | 10 | 2 | | Hernandez | 67 | 13 | 2 | | Kedia | 54 | 0 | 0 | | McKenney | 56 | 7 | 1 | | Mehdi | 58 | 6 | 0 | | Reynolds | 60 | 2 | 0 | | Wiehoff | 63 | 5 | 2 | | | 61.2 avg. | 5.6 avg. | <1 avg. |
Skills and qualifications of our director nominees
| U.S. Bancorp 2025 Proxy Statement | 13 |
2025 nominees for director
2025 nominees for director Each of the director nominees named below has agreed to serve as a director if elected. Proxies may not be voted for more than 14 nominees. If, for any reason, any nominee becomes unable to serve before the election, the persons named as proxies will vote your shares for a substitute nominee selected by the Board of Directors. Alternatively, the Board of Directors may choose to reduce the number of directors that are nominated for election. In addition, as described below under “Majority vote standard for election of directors,” each of the nominees has tendered his or her contingent resignation as a director in accordance with our Corporate Governance Guidelines, to be effective if he or she fails to receive a majority of the votes cast in an uncontested election and the Board accepts the tendered resignation. Included below is certain information that the director nominees have provided about themselves, as well as additional information that the Board considered in nominating them. Warner L. Baxter Director since December 2015
Committees
Committees ▶ Chair, Audit ▶ Compensation and Human Resources ▶ Executive Business experience: Mr. Baxter, 63, is the retired Executive Chairman and former Chairman, President and Chief Executive Officer of Ameren Corporation, a regulated electric and gas utility company serving customers in Missouri and Illinois. He served as the Executive Chairman from January 2022 to November 2023. Prior to that time, Mr. Baxter served as Chairman, President and Chief Executive Officer of Ameren Corporation from 2014 to January 2022. Mr. Baxter also served as the Chairman of the Board of Directors of the Edison Electric Institution, an association representing all U.S. investor-owned electric companies, from June 2022 to June 2023 and as Vice Chairman from 2020 to June 2022. Mr. Baxter served as Chairman, President and Chief Executive Officer of Ameren Missouri from 2009 to 2014 and as Executive Vice President and Chief Financial Officer of Ameren Corporation from 2003 to 2009. Before joining Ameren, Mr. Baxter served as a Senior Manager at PricewaterhouseCoopers LLP (PwC). Other public company directorships: ▶ Quanta Services, Inc. since 2024 (Audit and Nominating and Corporate Governance Committees) ▶ WEC Energy Group, Inc. since 2025 (Audit and Oversight Committee) ▶ Ameren Corporation from 2014 to 2023 Skills and qualifications: ▶ Chief executive experience: Mr. Baxter’s experience as a recent CEO of a Fortune 500 company provides valuable leadership insight and knowledge of strategic growth to the Board. ▶ Community or sustainability leadership: Mr. Baxter’s leadership relating to the environmental and sustainability strategy at a regulated electric and gas utility company provides him with valuable insights and experience relating to important sustainability and environmental stewardship issues. ▶ Corporate governance: Mr. Baxter has gained significant corporate governance expertise through his prior service as the Executive Chairman and Chairman of a large public company, as well as through his current leadership of the Audit Committee. ▶ Financial reporting and accounting: Through his past experience as the CFO and Controller of a large publicly traded company and through his experience at PwC, Mr. Baxter brings extensive financial reporting and accounting expertise to our Board. ▶ Other regulated industry expertise: As the recent Executive Chairman and former President and CEO of a company in a highly regulated industry, as well as the recent Chairman of the industry association representing all U.S. investor-owned electric companies, Mr. Baxter provides valuable perspective on regulatory and business challenges facing our company. Risk management: As the recent President and CEO of a company in a critical infrastructure industry and through his experience at PwC, Mr. Baxter brings valuable risk management expertise to our Board of Directors.
Committees
| 14 | U.S. Bancorp 2025 Proxy Statement |
Committees
Dorothy Bridges Director since October 2018
Committees
Committees ▶ Chair, Public Responsibility ▶ Risk Management ▶ Executive Business experience: Ms. Bridges, 69, is the Chief Executive Officer of the Metropolitan Economic Development Association (Meda), a nonprofit organization providing business consultancy services, access to capital and marketing opportunities to BIPOC-owned businesses. She has served in this capacity since September 2022. Ms. Bridges served as Senior Vice President of Public Affairs, Outreach and Community Development of the Federal Reserve Bank of Minneapolis, one of the twelve regional banks in the Federal Reserve System, from July 2011 until June 2018. Prior to joining the Federal Reserve Bank of Minneapolis, Ms. Bridges served as the President and Chief Executive Officer of City First Bank, a commercial bank providing financial services in low- and moderate-income communities, from 2008 until July 2011, and as President and Chief Executive Officer of Franklin National Bank, a Minneapolis commercial bank, from 1999 to 2008. Skills and qualifications: ▶ Community or sustainability leadership: Through her experience as the senior leader in charge of public affairs, outreach and community development, and as the CEO of a commercial bank focusing on low- and moderate-income communities, Ms. Bridges brings to our Board expertise in understanding the financial needs of the individuals living in the communities we serve. ▶ Financial services industry expertise: Ms. Bridges’s extensive experience in the banking industry, as a senior leader of a reserve bank and as the CEO of two commercial banks, as well as her current role as the Chair of the American Bankers Association Community Bankers’ Council, gives her valuable industry and regulatory oversight expertise. ▶ Risk management: Through her experience at the Federal Reserve Bank of Minneapolis, Ms. Bridges brings to our Board risk management expertise that is particularly relevant to our company. Elizabeth L. Buse Director since June 2018
Committees
Committees ▶ Audit ▶ Risk Management Business experience: Ms. Buse, 64, is the former Chief Executive Officer of Monitise plc, a global mobile banking and payments company based in the United Kingdom. She served as Co-Chief Executive Officer and Chief Executive Officer of Monitise during 2014 and 2015, after retiring from Visa, Inc., a leading payment network, as Executive Vice President of Global Services, a position she held from 2013 to 2014. Ms. Buse held various senior leadership positions at Visa prior to that time, including Group President for Asia-Pacific, Central Europe, Middle East and Africa from 2010 to 2013. Other public company directorships: ▶ F5, Inc. since 2020 (Talent and Compensation Committee Chair; Audit and Nominating and Environmental, Social, and Governance Committees) Skills and qualifications: ▶ Corporate governance: Through her current and past experience as a director for several public and private financial services technology companies, Ms. Buse brings valuable financial services specific corporate governance best practices experience to our Board. ▶ Financial services industry expertise: As the former CEO of Monitise and as a former senior leader at Visa, Ms. Buse gained broad financial industry expertise that is particularly relevant to our Board. Risk management: Ms. Buse brings to our Board valuable risk management expertise gained through her work in the financial services industry.
Committees
| U.S. Bancorp 2025 Proxy Statement | 15 |
Committees
Andrew Cecere Director since January 2017
Committees
Committees ▶ Cybersecurity and Technology ▶ Risk Management ▶ Chair, Executive Business experience: Mr. Cecere, 64, is the Chairman and Chief Executive Officer of U.S. Bancorp. He has served in this position since May 2024 and previously served as Chairman, President and Chief Executive Officer since April 2018. He served as President and Chief Executive Officer from April 2017 to April 2018, as well as President and Chief Operating Officer from January 2016 to April 2017, after having served as Vice Chairman and Chief Operating Officer from January 2015 until January 2016. From February 2007 until January 2015, Mr. Cecere served as U.S. Bancorp’s Vice Chairman and Chief Financial Officer, after having served as Vice Chairman, Wealth Management and Investment Services of U.S. Bancorp since the merger of Firstar Corporation and U.S. Bancorp in February 2001. Previously, he had served as an executive officer of U.S. Bancorp before its merger with Firstar, including as Chief Financial Officer from 2000 through 2001. Other public company directorships: ▶ Donaldson Company, Inc. from 2013 to 2021 Skills and qualifications: ▶ Chief executive experience: As CEO of U.S. Bancorp, Mr. Cecere brings to all Board discussions and deliberations deep knowledge of our company and its business, which is particularly important following the acquisition and integration of MUFG Union Bank. ▶ Corporate governance: Through his current experience as our Chairman and through his current and past experience on public company boards, Mr. Cecere brings valuable corporate governance experience to our Board. ▶ Financial reporting and accounting: Through his prior service on the audit committee of a public company, as well as his past experience as CFO of U.S. Bancorp, Mr. Cecere brings valuable financial reporting and accounting expertise to our Board. ▶ Financial services industry expertise: Mr. Cecere has deep expertise in the financial services industry, gained through a career of nearly 40 years at U.S. Bancorp. Risk management: Mr. Cecere brings to our Board valuable risk management expertise gained through his work as CFO, Chief Operating Officer, and then CEO of U.S. Bancorp during the challenging regulatory and market environment of recent years.
Committees
| 16 | U.S. Bancorp 2025 Proxy Statement |
Committees
Alan B. Colberg Director since January 2023
Committees
Committees ▶ Audit ▶ Public Responsibility Business experience: Mr. Colberg, 63, is the retired President and Chief Executive Officer of Assurant, Inc., a financial services company providing specialty insurance products and services. He served as Chief Executive Officer and a director of Assurant from January 2015 to December 2021, and as its President from 2014 to May 2021, prior to his retirement in January 2022. Prior to those roles, he served as Executive Vice President of Marketing and Business Development. Before joining Assurant in March 2011, Mr. Colberg served in various senior leadership roles for 22 years at Bain & Company, Inc., a management consulting company, where he served as global head of Bain’s financial services practice, among other roles. Early in his career, Mr. Colberg worked as an accountant for The Procter & Gamble Company. Other public company directorships: ▶ Corebridge Financial, Inc. since 2022 (Chair of the Board; Chair of Nominating and Corporate Governance Committee) ▶ Assurant, Inc. from 2015 to 2021 Skills and qualifications: ▶ Chief executive experience: As the former President and CEO of Assurant, Mr. Colberg provides valuable leadership and management expertise to our Board. ▶ Corporate governance: Mr. Colberg brings significant corporate governance expertise to our Board gained from his experience as the President and CEO of a public company and through his experience as a current and past board member, board chair, and committee chair of multiple public companies, including as the former chair of the Nominating and Governance Committee at CarMax, Inc. ▶ Financial reporting and accounting: Through his service as CEO of Assurant, as a member and chair of the audit committees of the boards of public companies, and his accounting and educational background, Mr. Colberg brings financial reporting and accounting experience to our Board. ▶ Financial services industry expertise: Mr. Colberg’s experience as the former President and CEO of a financial services company and former head of the financial services practice at a large consulting company provides important expertise to our Board on managing the economic and regulatory environment currently facing our company. Risk management: Through his vast experience as the President and CEO of a financial services company and as the global head of the financial services practice at Bain, Mr. Colberg brings valuable risk management experience to our Board.
Committees
| U.S. Bancorp 2025 Proxy Statement | 17 |
Committees
Kimberly N. Ellison-Taylor Director since January 2021
Committees
Committees ▶ Audit ▶ Public Responsibility Business experience: Ms. Ellison-Taylor, 54, is the Founder and Chief Executive Officer of KET Solutions, LLC, a consulting firm focused on business growth, innovation, strategy, transformation and inclusive leadership. She has served in this capacity since April 2021. Ms. Ellison-Taylor served as the Executive Director of Finance Thought Leadership of Oracle Corporation, a Fortune 100 company that provides products and services for enterprise information technology environments, from April 2019 to April 2021. Prior to that, Ms. Ellison-Taylor served as the Global Strategy Leader in the Cloud Business Group of Oracle from September 2018 to March 2019 and as the Global Strategy Director in the Financial Services Industry Group of Oracle from July 2015 until September 2018, where she led worldwide teams to develop and execute strategies dealing with cloud data, information security, fraud prevention and detection, and customer experience. From 2016 to 2018, she also served as the chairman of the American Institute of CPAs, the world’s largest member association representing the accounting profession. Prior to joining Oracle in 2004, she held roles at NASA’s Goddard Space Flight Center, Motorola and KPMG and served as the Chief Information Technology Officer for Prince George’s County Government in Maryland. Other public company directorships: ▶ Marathon Petroleum Corporation since 2024 (Audit and Corporate Governance and Nominating Committees) ▶ EverCommerce Inc. from 2021 to 2024 Skills and qualifications: ▶ Community or sustainability leadership: Ms. Ellison-Taylor brings to our Board current expertise in overseeing climate risk and creating sustainable growth strategies, gained through her certification in the Diligent Climate Leadership Program. ▶ Customer experience: Ms. Ellison-Taylor brings to our Board expertise relating to customer opportunities and expectations, gained through her prior experience as the senior leader of a consumer-focused company. ▶ Digital, technology, or cybersecurity experience: Through her past experiences at a company providing innovative technology products and services, her experience as a Chief Information Technology Officer, her current roles consulting on innovation and transformation and teaching Emerging Technologies and Innovation at Carnegie Mellon University and her ongoing director education in cybersecurity oversight matters, Ms. Ellison-Taylor brings to our Board vast expertise of innovative technology that is particularly relevant to our company. Financial reporting and accounting: Ms. Ellison-Taylor’s experience as a CPA and former chair of the American Institute of CPAs provides valuable financial reporting and accounting expertise to our Board. She is also a Certified Internal Auditor and Certified Information Systems Auditor and brings expertise relating to financial processes, operations and internal controls to our Board.
Committees
| 18 | U.S. Bancorp 2025 Proxy Statement |
Committees
Aleem Gillani Director since July 2024
Committees
Committees ▶ Audit ▶ Risk Management Business experience: Mr. Gillani, 62, is the retired Corporate Executive Vice President and Chief Financial Officer of SunTrust Banks, Inc., a financial services company. He served as Chief Financial Officer of SunTrust from April 2011 to March 2018, as Corporate Treasurer from March 2010 to April 2011 and as Chief Market Risk Officer from 2007 to 2010. Prior to joining SunTrust, Mr. Gillani served in various senior leadership roles at PNC Financial Services Group, Inc., FleetBoston Financial and the Canadian Imperial Bank of Commerce. He was the founding chair of the Market Risk Council for the Risk Management Association (RMA) and served for many years as a director on the RMA board. Other public company directorships: ▶ Federal Home Loan Mortgage Corporation since 2019 (Audit Committee Chair, Nominating and Governance and Executive Committees) Skills and qualifications: ▶ Financial reporting and accounting: Through his service as CFO of SunTrust, as a chair of the audit committee of the board of a public company, and through his educational background, Mr. Gillani brings financial reporting and accounting experience to our Board that makes him particularly well suited to oversee the quality and integrity of our company’s financial statements. ▶ Financial services industry expertise: Mr. Gillani’s experience as the retired CFO of a large financial services company and current service on the Board of the Federal Home Loan Mortgage Company provides valuable expertise to our Board on managing the challenges and opportunities at our company. ▶ Risk management: Mr. Gillani brings to our Board valuable risk management expertise, including experience identifying, assessing and managing risk exposures of large, complex financial firms, gained through his work as CFO and Chief Risk Officer at a financial services company and through his experience on the Federal Home Loan Mortgage Corporation Board. Kimberly J. Harris Director since October 2014
Committees
Committees ▶ Chair, Governance ▶ Compensation and Human Resources ▶ Executive Business experience: Ms. Harris, 60, is the retired President and Chief Executive Officer of Puget Energy, Inc., an energy services holding company, and its subsidiary Puget Sound Energy, Inc., a utility company providing electric and natural gas service in the northwest United States. She served in these positions from March 2011 until her retirement in January 2020. Ms. Harris served as President of Puget Energy and Puget Sound Energy from July 2010 through February 2011 and as Executive Vice President and Chief Resource Officer from May 2007 until July 2010. Prior to joining Puget Energy, Ms. Harris practiced law at Perkins Coie. Other public company directorships: ▶ American Water Works Company, Inc. since 2019 (Governance and Nominations Chair, Executive Development and Compensation, and Safety, Environmental, Technology and Operations Committees) ▶ Ameren Corporation since 2023 (Nominating and Corporate Governance and Nuclear, Operations and Environmental Sustainability Committees) ▶ Puget Energy, Inc. and Puget Sound Energy, Inc. from 2011 to 2020 Skills and qualifications: ▶ Chief executive experience: Ms. Harris’s experience as a CEO provides valuable leadership and executive management perspective to our Board gained by leading a large company through challenging economic and regulatory environments. ▶ Community or sustainability leadership: Ms. Harris’s experience as CEO and former chief resource officer of an energy services holding company provides her with important perspectives on environmental sustainability and related risk matters. ▶ Other regulated industry expertise: Ms. Harris’s experience as the leader of a company in a heavily regulated industry gives her valuable expertise in managing a complex business in the context of an extensive regulatory regime. Risk management: As the recently retired President and CEO and current Board member of companies in critical infrastructure industries, Ms. Harris brings valuable risk management experience and perspectives to our Board.
Committees
| U.S. Bancorp 2025 Proxy Statement | 19 |
Committees
Roland A. Hernandez Director since January 2012 Lead Independent Director
Committees
Committees ▶ Compensation and Human Resources ▶ Governance ▶ Executive Business experience: Mr. Hernandez, 67, is the Founding Principal and Chief Executive Officer of Hernandez Media Ventures, a privately held company engaged in the acquisition and management of media assets. He has served in this capacity since January 2001. Mr. Hernandez served as Chairman of Telemundo Group, Inc., a Spanish-language television and entertainment company, from 1998 to 2000 and as President and Chief Executive Officer from 1995 to 2000. He previously served on the Board of Directors of Belmond Ltd., The Ryland Group, Inc., Sony Corporation, Vail Resorts, Inc., and Walmart Inc. Other public company directorships: ▶ Fox Corporation since 2019 (Audit Committee Chair, Nominating and Corporate Governance Committee) ▶ Take-Two Interactive Software, Inc. since 2019 (Compensation Committee) ▶ MGM Resorts International from 2002 to 2021 Skills and qualifications: ▶ Chief executive experience: Mr. Hernandez’s experience as a former CEO of Telemundo provides valuable leadership insight and operational and strategic knowledge to the Board. ▶ Corporate governance: Through his past experience as the Chairman or Lead Director of several public companies, Mr. Hernandez brings to our Board significant expertise in corporate governance issues and best practices. ▶ Customer experience: Mr. Hernandez brings deep expertise of customer expectations to our Board and adds a perspective on customer opportunities, gained through his prior experience as the leader of a consumer-focused company and through his service on the boards of directors of numerous customer focused companies. ▶ Financial reporting and accounting: With his extensive past and current experience on the audit committees of the boards of public companies, Mr. Hernandez brings broad financial reporting and accounting expertise to our Board. Gunjan Kedia Director since January 2025
Committees
Committees ▶ Executive Business experience: Ms. Kedia, 54, is the President of U.S. Bancorp. She has served in this position and as a member of the U.S. Bank National Association Board of Directors since May 2024. Prior to that, she served as Vice Chair of Wealth, Corporate, Commercial and Institutional Banking from June 2023 to May 2024 and as Vice Chair, Wealth Management and Investment Services from December 2016 to June 2023. Ms. Kedia brings nearly 30 years of financial services experience to her role. Before joining U.S. Bancorp in 2016, she held global executive positions at State Street Financial and BNY. Previously, she was a partner at McKinsey & Company and a core leader of the financial services practice. She began her career at PricewaterhouseCoopers. Skills and qualifications: ▶ Customer experience: Ms. Kedia contributes to our Board a current perspective on client expectations across our consumer, wealth, small business and corporate and institutional clients gained from her long leadership of several businesses. ▶ Digital, technology, or cybersecurity experience: Through her current experience as President with responsibility for all of the company’s revenue lines and prior leadership roles at U.S. Bancorp, Ms. Kedia brings a record of driving growth and productivity, including through digital capabilities and technology transformation initiatives. ▶ Financial services industry expertise: Ms. Kedia has deep expertise in the financial services industry, gained through a career of more than 30 years in the industry. Risk management: Through her extensive experience as the leader of business lines and in executive positions at several financial services companies, and as a partner and core leader of the financial services practice at McKinsey, Ms. Kedia brings valuable risk management experience to our Board.
Committees
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Committees
Richard P. McKenney Director since October 2017
Committees
Committees ▶ Cybersecurity and Technology ▶ Governance ▶ Risk Management Business experience: Mr. McKenney, 56, is the President and Chief Executive Officer of Unum Group, a workplace financial protection benefits company. He has served as President since April 2015 and as Chief Executive Officer since May 2015. Mr. McKenney served as Executive Vice President and Chief Financial Officer of Unum from 2009 to 2015. Prior to joining Unum in 2009, he served as Executive Vice President and Chief Financial Officer at Sun Life Financial, Inc., an international financial services company, from 2006 to 2009. Mr. McKenney began his career at General Electric Company, transitioning his roles from manufacturing to financial leadership. Other public company directorships: ▶ Unum Group since 2015 Skills and qualifications: ▶ Chief executive experience: Mr. McKenney’s experience as a current CEO provides valuable strategic and operational expertise to our Board gained by leading a large company through the current economic and regulatory environment. ▶ Corporate governance: As the current President, CEO and board member of a public company, Mr. McKenney has gained significant corporate governance expertise that is valuable to our Board. ▶ Financial reporting and accounting: Through his past experience as CFO of several companies, Mr. McKenney brings extensive financial reporting and accounting expertise to our Board. ▶ Financial services industry expertise: As the current President and CEO of a financial services company, Mr. McKenney brings to our Board discussions expertise in managing the business environment facing financial services companies and important perspective regarding the regulatory environment for financial services companies. ▶ Risk management: Through his experience as the leader of a financial services company, Mr. McKenney brings experience identifying, assessing and managing risk exposures of large, complex financial firms. Yusuf I. Mehdi Director since June 2018
Committees
Committees ▶ Chair, Cybersecurity and Technology ▶ Public Responsibility ▶ Risk Management Business experience: Mr. Mehdi, 58, is the Executive Vice President, Consumer Chief Marketing Officer, at Microsoft Corporation, a multinational technology company. He has served in that capacity since October 2023. He defines Microsoft’s consumer vision and serves as the champion for the company’s end-user experiences, overseeing product management and go-to-market strategy for Microsoft’s Devices & Creativity, and Search, News & Advertising solution areas. Mr. Mehdi leads product marketing and stewardship for Microsoft Copilot, the Windows platform and ecosystem, the Microsoft Surface device portfolio, Microsoft 365 consumer subscriptions, and Microsoft’s web services including the Edge browser and Bing Search engine. Mr. Medhi served as Vice President of the Modern Life and Devices Group from June 2018 to October 2023 and, prior to that Corporate Vice President of the Windows and Devices Group from 2015 to June 2018. In his tenure at Microsoft, which has spanned over 30-years, Mr. Mehdi has led virtually every aspect of Microsoft’s end user businesses from Windows to Surface to Xbox to Internet Explorer. Skills and qualifications: ▶ Customer experience: Mr. Mehdi’s role defining customer vision and driving end-to-end user experience at a large multinational company brings valuable retail and online business expertise to our Board, as well as adds a perspective on public and social policy issues facing a large consumer retail business. Digital, technology, or cybersecurity experience: Mr. Mehdi’s significant experience in an industry that must adapt in real time to rapid changes in technology and customer expectations is a valuable resource in executing the company’s corporate strategy.
Committees
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Committees
Loretta E. Reynolds Director since October 2022
Committees
Committees ▶ Cybersecurity and Technology ▶ Public Responsibility ▶ Risk Management Business experience: Ms. Reynolds, 60, is the Founder and Chief Executive Officer of LEReynolds Group, LLC, a consulting firm focused on providing information technology and strategic business intelligence services and advising complex global organizations on managing large-scale risk. She has served in this capacity since August 2021. Ms. Reynolds retired from the U.S. Marine Corps in July 2021 after 35 years of service. During her distinguished career with the U.S. Marine Corps, she earned the rank of Lieutenant General in May 2018 and served as Deputy Commandant for Information from July 2018 to July 2021 and Acting Commander of the Marine Corps Forces Space Command from August 2019 to December 2020. She is the third woman to be promoted to Lieutenant General (three-star) in the history of the U.S. Marine Corps. Prior to that, she also served as Commander of the Marine Corps Forces Cyberspace Command from September 2015 to July 2018. Ms. Reynolds also served from 2015 to 2021 as a member of the U.S. Marine Corps Corporate Board, with oversight responsibility for global strategy, capabilities, and missions. Ms. Reynolds has served as a member of the Board of Trustees at the American Public University System since June 2022. Skills and qualifications: ▶ Digital, technology, or cybersecurity experience: Ms. Reynolds brings extensive information technology and cybersecurity expertise to our Board as a result of her 35-year career in various leadership and command roles in the U.S. Marine Corps, including her experience developing, leading and managing the U.S. Marine Corps’ $12 billion global information portfolio spanning intelligence, information technology, networking, cyber, space and information. ▶ Risk Management: Ms. Reynolds brings valuable risk management expertise to our Board through her current role as a consultant advising on large-scale risk management, her commands and strategic leadership roles in the U.S. Marine Corp relating to cyber, space, and information/digital technologies, and her service on the U.S. Marine Corps Corporate Board. John P. Wiehoff Director since January 2020
Committees
Committees ▶ Chair, Risk Management ▶ Cybersecurity and Technology ▶ Executive Business Experience: Mr. Wiehoff, 63, is the retired Chairman and Chief Executive Officer of C.H. Robinson Worldwide, Inc., a multimodal transportation services and third-party logistics company. He served as Chairman from 2006 to 2020. He also served as President from 1999 to 2019 and as Chief Executive Officer from 2002 to 2019. Prior to 1999, Mr. Wiehoff served in various senior leadership roles at C.H. Robinson starting in 1992 and began his career at Andersen Worldwide LLP with several different positions, including audit manager. Other public company directorships: ▶ Polaris Industries, Inc. since 2007 (Chairman, Corporate Governance and Nominating Committee, Compensation Committee) ▶ Union Pacific Corporation since 2023 (Audit and Safety and Service Quality Committees) ▶ Donaldson Company, Inc. from 2003 to 2022 ▶ C.H. Robinson Worldwide, Inc. from 2002 to 2020 Skills and qualifications: ▶ Chief executive experience: Mr. Wiehoff’s experience as the CEO of a Fortune 500 company gives him valuable leadership and business expertise, as well as extensive executive management experience. ▶ Corporate governance: Mr. Wiehoff’s experience as the Chairman of a public company and on the governance committees of numerous public companies provides valuable corporate governance expertise to our Board. ▶ Digital, technology, or cybersecurity experience: Through his experience as the leader at a logistics company, Mr. Wiehoff provides extensive expertise to our Board in executing strategy around technological transformation. ▶ Financial reporting and accounting: Mr. Wiehoff gained broad financial reporting and accounting expertise through his experience as an audit manager for a large accounting firm. Risk management: As the former President and CEO of a logistics company, Mr. Wiehoff brings valuable risk management experience and perspectives to our Board.
Committees
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Committees
Our Board of Directors and management are dedicated to exemplary corporate governance. Good corporate governance is vital to our continued success. Our Board of Directors has adopted Corporate Governance Guidelines to provide a corporate governance framework for our directors and management to effectively pursue our objectives for the benefit of our shareholders. The Board reviews and updates these guidelines and the charters of the Board committees at least annually in response to evolving best practices and business needs, as well as the results of annual Board and committee evaluations. Our Corporate Governance Guidelines can be found at usbank.com by clicking on “About us”, “Investor relations”, “Corporate Governance” and then “Governance documents.”
Majority vote standard for election of directors
Majority vote standard for election of directors Our bylaws provide that in uncontested elections, a nominee for director will be elected to the Board if the number of votes cast “FOR” the nominee’s election exceeds the number of votes cast “AGAINST” that nominee’s election (votes to “ABSTAIN” have no effect on the election of a director). The voting standard for directors in a contested election is a plurality of the votes cast at the meeting. Our Corporate Governance Guidelines provide that director nominees must submit a contingent resignation in writing to the Governance Committee, which becomes effective if the director fails to receive a sufficient number of votes for re-election at the annual meeting of shareholders and the Board accepts the resignation. The Board will nominate for election or re-election as director only candidates who have tendered such a contingent resignation. Our Corporate Governance Guidelines further provide that if an incumbent director fails to receive the required vote for re-election, our Governance Committee will act within 90 days after certification of the shareholder vote to determine whether to accept the director’s resignation, and will submit a recommendation for prompt consideration by the Board. The Board expects the director whose resignation is under consideration to abstain from participating in any decision regarding his or her resignation. The Governance Committee and the Board may consider any factors they deem relevant in deciding whether to accept a director’s resignation.
Majority vote standard for election of directors
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Board-level oversight of risk management structure
Board-level oversight of risk management structure As part of its responsibility to oversee the management, business and strategy of our company, the Board of Directors has approved a Risk Appetite Policy and Risk Management Framework that establish governance and risk management requirements for all risk-taking activities. This framework includes the company’s Risk Appetite Statement that sets boundaries for the types and amount of risk that may be undertaken in pursuing business objectives and initiatives. Under this Framework, and in furtherance of the company’s Risk Appetite Statement, the company has defined qualitative statements and quantitative metrics, in the form of a Risk Appetite Scorecard, with defined limits for monitoring risk appetite across all risk categories. They are complemented by business line concentration and risk metrics and both are incorporated into key business processes, including strategic planning, stress testing, business change management and incentive compensation programs. Since 2023, all changes to metrics between annual Risk Appetite Statement reviews are reviewed and approved by the Board’s Risk Management Committee. The Board of Directors oversees management’s performance relative to the Risk Management Framework, Risk Appetite Statement, company Risk Appetite Scorecard and other policy requirements. While management is responsible for defining the various risks facing our company, formulating risk management policies and procedures, and managing risk exposures on a day-to-day basis, the Board’s responsibility is to oversee our company’s risk management processes by informing itself about our material risks and evaluating whether management has reasonable risk management and control processes in place to address those material risks. The Board’s risk oversight responsibility is primarily carried out through its standing committees, as follows: The Risk Management and Audit Committees meet annually in joint session to give each committee the opportunity to review the risk areas primarily overseen by the other, and all Board members attend this meeting to benefit from the discussion. Finally, at each meeting of the full Board of Directors, each committee gives a detailed report of the matters it discussed and conclusions it reached during its recent meetings.
Reference Guide
| Executive compensation overview | 40 | | Philosophy and objectives of our executive compensation program | 42 | | Base salary | 43 | | Annual cash incentive awards | 43 | | ▶ How we determine our NEOs’ annual cash incentive awards | 43 | | ▶ Setting the Target Award Amounts | 44 | | ▶ Calculating the Final Bonus Funding Percentage | 44 | | ▶ Funding and Payout of Corporate Result | 46 | | ▶ The Qualitative Review | 47 | | ▶ Factoring in individual performance and risk sensitivity | 47 | | Long-term incentive awards | 48 | | ▶ Establishing the structure of the equity awards | 48 | | ▶ Setting the value of the equity awards | 49 | | ▶ Selecting the performance metrics for the 2024 PRSU awards | 50 | | ▶ Setting the levels of absolute and relative ROE for the 2024 PRSU performance matrix | 50 | | ▶ Selecting the performance metrics for the 2025 PRSU awards | 52 | | ▶ Setting the levels of absolute and relative ROTCE for the 2025 PRSU performance matrix | 52 | | Decision making and policies | 53 | | ▶ Who is involved in making executive compensation decisions | 53 | | ▶ How executive compensation is determined | 54 | | ▶ Compensation peer group | 55 | | ▶ Stock ownership and retention requirements | 55 | | ▶ Clawback and forfeiture provisions applicable to executive awards | 56 | | ▶ Change-in-control provisions for executive officers | 56 | | ▶ Hedging and pledging policy | 56 | | ▶ Equity grant policies and practices | 56 | | ▶ Health and other benefits | 56 | | ▶ Risk considerations | 57 |
Elements of 2024 total direct compensation
Elements of 2024 total direct compensation 1. Effective May 5, 2024, following Gunjan Kedia’s promotion to President. Prior to that, her annual cash incentive target was 225%. Ms. Kedia’s base salary and annual incentive target amounts used for purposes of the charts above have been prorated for 2024. 2. Beginning for 2025, PRSU metrics are ROTCE (measured on absolute and relative basis) with a relative total shareholder return (TSR) modifier.
Sound compensation practices
| What we do | | Significant majority of each executive officer’s compensation is at risk | | We may cancel unvested equity awards and reduce cash incentive compensation for executives who demonstrate inadequate sensitivity to risk | | Our robust clawback policies allow us to recoup annual cash incentive payouts attributable to incorrectly reported earnings, and comply with SEC and NYSE rules for recovery of erroneously-awarded incentive compensation determined in the event of an accounting restatement | | We have meaningful stock ownership and hold-until-retirement requirements | | The Committee retains an independent compensation consultant that provides no other services to our company |
Sound compensation practices
| What we don’t do | | No employment or change-in-control agreements for our executive officers | | We do not permit executive officers to hedge or pledge their company stock | | No single-trigger accelerated vesting of equity awards upon a change-in-control of the company | | No tax gross-ups (except in relation to relocation expenses) | | No dividends paid on unearned PRSUs; dividend equivalents accrued on earned PRSUs are not paid until the awards vest |
Compensation program objective
Compensation program objective The Committee has structured our executive compensation program to create long-term shareholder value by attracting and retaining talented leaders and rewarding them for top performance. The Committee achieves this objective through a compensation program that: ▶ links a significant portion of total compensation to corporate and business line performance metrics, which we believe serves to create long-term shareholder value; ▶ provides total compensation that is market competitive, permitting us to hire and retain high caliber individuals; ▶ emphasizes long-term, stock-based compensation, encouraging our executive officers to think and act as long-term shareholders; ▶ subjects equity awards to multi-year performance, vesting and retention requirements that enhance executive ownership and encourage a long-term view of corporate achievement; and ▶ encourages an appropriate sensitivity to risk on the part of senior management, which protects long-term shareholder interests.
Compensation elements
Compensation elements Our NEOs’ total direct compensation consists of three elements: ▶ Base salary; ▶ Annual cash incentive awards; and ▶ Long-term incentive compensation (comprising 60% PRSUs and 40% RSUs).
Annual cash incentive awards
Annual cash incentive awards
How we determine our NEOs’ annual cash incentive awards
How we determine our NEOs’ annual cash incentive awards All executive officers have the opportunity to earn annual cash incentive awards under our Annual Executive Incentive Plan (the AEIP), which are set at target levels that reflect their roles and responsibilities. Potential payout opportunities under the AEIP are designed to reward achievement of corporate and business line goals. The formula for calculating each NEO’s Annual Cash Incentive Payout under the AEIP consists of the following: ▶ Each NEO’s Target Award Amount, which is set by the Committee as a percentage of the NEO’s base salary (Target Award Percentage); ▶ The Final Bonus Funding Percentage applicable to each NEO, which is calculated based on a combination of corporate EPS and business line pretax income performance and subject to a qualitative review by the Committee; and The Committee’s assessment of each NEO’s Individual Performance and Risk Sensitivity, which can increase or decrease the value of the Bonus Funding Percentage applied to each NEO’s Target Award Amount. In no event may individual payouts exceed 200% of an NEO’s Target Award Amount.
How we determine our NEOs’ annual cash incentive awards
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Calculating the Final Bonus Funding Percentage
Calculating the Final Bonus Funding Percentage The Bonus Funding Percentage is calculated using two evenly weighted factors: ▶ the Corporate Result, which is based on EPS performance for 2024, as adjusted; and ▶ the Business Line Result, which is based on applicable business line or corporate pretax income performance for the executive officer. The Committee believes that EPS and pretax income targets are appropriate performance metrics for the executive officers’ annual cash incentive awards for the following reasons: ▶ EPS is a common metric used by investors to evaluate the profitability of a company, showing the earnings (net income) we make on each outstanding share of common stock; ▶ a focus on EPS supports alignment of the interests of the executive officers with those of shareholders; ▶ EPS captures elements of corporate performance that are beyond those of the individual operating business lines, such as corporate funding policies and the management and use of capital; ▶ the pretax income targets are the fundamental drivers of the company’s revenues and income before taxes; and ▶ the EPS and pretax income targets are aligned with annual financial plan targets, which the Board and management have assessed for achievability; accordingly, the targets provide incentives to take appropriate amounts of risk to achieve those goals. In addition, both EPS and pretax income are used across the organization for cash bonus payout calculations, and the Committee believes that using these measures in executive officer incentive award calculations supports alignment with their areas of responsibility.
Calculating the Final Bonus Funding Percentage
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Calculating the Final Bonus Funding Percentage
Both the Corporate Result and Business Line Result are assessed relative to targets included in our company’s annual financial plan. The Board establishes these financial targets for each fiscal year with the intent that they represent challenging, yet achievable, goals. Under the AEIP, the Committee has the authority to adjust results to exclude the effect of certain events. The Final Bonus Funding Percentage is calculated as follows: ▶ Corporate Result: The percentage by which corporate EPS differs from the EPS target is multiplied by a leverage factor to magnify the positive or negative variation from the results, yielding the Corporate Result. A leverage factor of 2:1 is applied to corporate achievement of EPS goals between 80% and 120% of target. For any amount by which corporate achievement of EPS goals is less than 80% or more than 120%, the leverage factor is 1:1. ✓ The target level of EPS set by the Committee for 2024 was $3.88. The target EPS level is intended to reflect the core earnings of the company and, as such, excluded the impact of notable items. Additional information on the calculation of the 2024 Corporate Result, based on adjusted EPS results, is described below. ▶ Business Line Result: A payout component is calculated for each business line based on the percentage by which the business line’s pretax income varies from target, using the same leverage factor as is applied to corporate performance. For executives with leadership responsibilities for the entire company, including Messrs. Cecere, Dolan, and Stern, the Business Line Result is based on the weighted average of the pretax income results of all the company’s business lines. For executives who lead a revenue-producing group, including Mr. Kotwal, the Business Line Result is based on the weighted average pretax income results of the business lines within the group that the executive leads. In connection with her promotion to the role of President during 2024, Ms. Kedia’s Business Line Result for 2024 was determined based on a pro-rated combination of (1) the weighted average of the pretax income results of all the company’s business lines for the period Ms. Kedia held the role of President and (2) the weighted average pretax income results for the business lines within the Wealth, Corporate, Commercial and Institutional Banking group that she led until May 2024. Additional information on the calculation of the 2024 Business Line Result, based on adjusted pretax income results, for each NEO who is a current executive is described below. ▶ Each of the Corporate Result and the Business Line Result is multiplied by 50% and then added together to arrive at the Formulaic Bonus Funding Percentage for each NEO. The Committee performs a Qualitative Review of the Formulaic Bonus Funding Percentage, which includes a holistic assessment of performance on key strategic priorities, as described below. The results of the Committee’s assessment of these additional performance factors allows the Committee to adjust the formulaic bonus calculation by up to 25% (either positively or negatively) to create greater alignment with overall organizational performance if appropriate.
Calculating the Final Bonus Funding Percentage
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Calculating the Final Bonus Funding Percentage
2024 Corporate Result: The Corporate Result was calculated as follows: ▶ The target level of EPS set by the Committee for 2024 was $3.88, as adjusted for notable items. ▶ The company reported EPS results of $3.79, which was adjusted (1) upward by $0.19 for purposes of the Corporate Result to account for notable items, including merger and integration charges related to the MUFG Union Bank acquisition, FDIC special assessment charges and charges related to lease impairments and operational efficiency actions, and certain notable items that the Committee deemed appropriate and (2) downward by $0.15 for loan loss reserve variation as described below. ▶ The resulting adjusted EPS value used to calculate the Corporate Result was $3.83. ▶ The Corporate Result of 97.2% was the outcome after applying the leverage factor to the percentage difference between target and adjusted EPS results.
Funding and Payout of Corporate Result
Funding and Payout of Corporate Result For purposes of computing the Corporate Result used in the Formulaic Bonus Funding Percentage, the Committee adjusts actual reported EPS to (i) remove the impact of any variation in our loan loss reserve build or release on an after-tax basis, while including net charge-offs to capture actual credit losses experienced and (ii) normalize any notable items that impacted EPS during the performance year. The Committee established its approach to adjusting for variation in our loan loss reserve in 2020 in connection with our adoption of the Current Expected Credit Losses (CECL) accounting standard in January 2020. Our adoption of CECL creates the potential for significant accounting volatility and uncertainty with respect to the loan loss reserve that is often dependent upon a number of judgmental factors and economic assumptions. In an effort to measure performance based on actual credit losses, the company excludes changes in the allowance driven by these factors and includes net charge-offs in the determination. For 2024, this calculation resulted in a downward adjustment to our reported EPS of $0.15. It has also been the Committee’s practice to adjust for notable items that are unusual or related to acquisitions. In 2024, the EPS result was adjusted upward by $0.19 to exclude the impact of merger and integration charges related to the MUFG Union Bank acquisition, FDIC special assessment charges and charges related to lease impairments and operational efficiency actions. The Committee adjustments resulted in a total Corporate Result EPS of $3.83.
Funding and Payout of Corporate Result
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Funding and Payout of Corporate Result
2024 Business Line Results: The Business Line Result was calculated as follows: ▶ Pre-tax income targets are established at the beginning of the year for each of our company’s more than 15 revenue-producing business lines in support of our Corporate EPS target. ▶ For 2024, pretax income results, inclusive of the regular adjustments relating to loan loss reserves and CECL described above and adjustments for certain notable items, ranged from 99.9% to 107.9% of target performance across our company’s more than 15 revenue-producing business lines. ▶ These results generated Business Line Results of 99.9% for Payment Services,105.3% for Consumer and Business Banking, and 107.9% for Wealth, Corporate, Commercial and Institutional Banking following application of the leverage factor and the 0% floor and 200% ceiling. ▶ The weighted average Business Line Result of all business lines was 104%. For purposes of computing the Formulaic Bonus Funding Percentage for the Business Line Result, pretax income includes a component for changes in the loan loss reserve driven by loan balances and changes in loan portfolio credit quality. The Committee adjusts these results so that the effect of any variation in our loan loss reserve build or release driven by such changes in loan portfolio credit quality is reduced by 50%. The Committee believes that this adjustment serves to align bonus funding with changes in credit quality while reducing some of the volatility caused by variable judgmental factors. The Committee applies these adjustments for loan loss reserve variation consistently, whether the ultimate impact is positive or negative, and believes that such adjustments maintain accountability for credit quality. The 2024 Business Line Results were as follows for the NEOs who are current executives:
Funding and Payout of Corporate Result
| NEO | Business Line Result | | Andrew Cecere John C. Stern Terrance R. Dolan | 104% (based on weighted average pretax income results for all the company’s business lines) | | Gunjan Kedia | Based on a pro-rated combination of (1) weighted average pretax income results of 104% for all the company’s business lines for the period Ms. Kedia held the role of President and (2) weighted average pretax income results of 107.9% for the business lines within the Wealth, Corporate, Commercial and Institutional Banking group that she led until May 2024 | | Shailesh M. Kotwal | 99.9% (based on weighted average pretax income results for the business lines within the Payment Services group) |
Factoring in individual performance and risk sensitivity
Factoring in individual performance and risk sensitivity The Committee considers the performance of the business lines managed by each executive officer and that executive officer’s individual performance during the year. The Committee also uses a formal “risk scorecard” assessment which, together with the individual performance assessment, can result in downward or upward adjustments to each NEO’s Bonus Funding Award Percentage to reflect that executive’s demonstrated sensitivity to risk. The Committee believes that it is important to retain the ability to recognize outstanding individual performance and risk mitigation in determining Annual Cash Incentive Payouts, as well as to acknowledge circumstances where individual
Long-term incentive awards
Long-term incentive awards
Establishing the structure of the equity awards
Establishing the structure of the equity awards Long-term, equity-based compensation represents the most significant portion of our NEOs’ total compensation package. The Committee uses equity awards to align the NEOs’ interests with those of long-term shareholders. In 2024, 64% of our CEO’s target total direct compensation and between 56% and 67% of our other NEOs’ target total direct compensation consisted of equity awards. Following its approval by shareholders at our 2024 annual meeting held on April 16, 2024, the Committee grants equity awards to executive officers under the U.S. Bancorp 2024 Stock Incentive Plan. Prior to that, equity awards to our executive officers were granted under the U.S. Bancorp 2015 Stock Incentive Plan. In 2024, 60% of the value of each executive officer’s long-term incentive award was granted in the form of PRSUs that will cliff vest (if earned) on the third anniversary of the grant date, following a three-year performance period, and 40% was granted in the form of RSUs that vest ratably over three years from the date of grant. Cash dividends on unvested PRSUs accrue during the performance period but are only paid at vesting on shares earned, if any, by the executives. The mix of performance-based and time-based equity awards, with the mix more heavily weighted toward performance-based equity, is designed to motivate achievement of financial objectives while encouraging retention and stock ownership.
Establishing the structure of the equity awards
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Setting the value of the equity awards
Setting the value of the equity awards Each year in January, the Committee determines the dollar value of the long-term incentive awards to be granted to the executive officers, with the grants being made on a pre-determined date in February or March. In setting each year’s award amounts, the Committee considers the relative market position of the awards and the total compensation for each executive, the proportion of each executive’s total direct compensation to be delivered as a long-term incentive award, internal pay equity, executive performance and changes in responsibility, retention, and corporate performance. 2024 equity value actions: In January 2024, the Committee increased the value of the long-term incentive awards granted to the NEOs in 2024 to align the NEOs’ total compensation more closely with the opportunities available to executives in similar roles at companies in our peer group relative to our size and, for Mr. Dolan, changes in the scope of his leadership role in the organization during 2024. On May 3, 2024, the Committee awarded Ms. Kedia an additional long-term incentive award in connection with her promotion to the role of President, valued at $1,500,000 as of the grant date of May 6, 2024, which was granted 60% in the form of PRSUs and 40% in the form of RSUs under the 2024 Stock Incentive Plan.
Setting the value of the equity awards
| NEO | Value of equity awards granted in 2023 | Value of equity awards granted in 2024 | | Andrew Cecere | $10,500,000 | $11,000,000 | | John C. Stern1 | $600,000 | $2,700,000 | | Gunjan Kedia | $3,500,000 | $6,500,0002 | | Terrance R. Dolan | $4,500,000 | $5,000,000 | | Shailesh M. Kotwal | $3,200,000 | $4,400,000 | | Timothy A. Welsh | $3,500,000 | $5,000,0003 |
Setting the value of the equity awards
1. Based on his prior role as President of the Global Corporate Trust and Custody business, and prior to becoming Chief Financial Officer on September 1, 2023, Mr. Stern received RSUs with a grant date value of $600,000 in March 2023. As previously disclosed by the company on a Form 8-K filed on August 23, 2023, the Committee determined that Mr. Stern would be eligible to receive a long-term equity award consistent with the structure and terms of other executive officers in 2024. 2. Includes the additional long-term incentive award granted to Ms. Kedia on May 6, 2024 in connection with her promotion to the role of President. 3. Only a portion of the equity awards granted to Mr. Welsh in February 2024 with vest dates in 2025 and 2026 continue to vest on the same schedule following his last day of employment on October 4, 2024. The remaining portion of such awards were cancelled in accordance with the terms of the applicable award agreements. 2025 long-term incentive actions: In addition, as previously disclosed by the company on a Form 8-K filed on January 28, 2025, in connection with her election to the role of President and Chief Executive Officer effective April 15, 2025, the Committee determined that Ms. Kedia would receive an annual long-term equity award for 2025, valued at $10 million as of the grant date of February 27, 2025, consistent with the structure and terms of other executive officers in 2025. The award is part of Ms. Kedia’s total direct compensation for 2025, including her time serving as CEO, is tied to the company’s achievement of financial performance metrics over a three-year performance period (2025-2027), and does not contain any special one-time components. The base salary and target annual cash incentive award that Ms. Kedia will receive as Chief Executive Officer have not been determined at this time. In accordance with the structure of all long-term incentive awards granted on that date, 60% of the award’s value was granted in the form of PRSUs and 40% in the form of RSUs. The PRSUs granted to Ms. Kedia will be earned based on the company’s achievement of absolute and relative ROTCE targets over a three-year performance period and a TSR modifier based on the Company’s cumulative three-year TSR performance relative to its financial peer group in alignment with the long-term interests of our shareholders. Additional information on the performance metrics for the 2025 PRSU award is included below. In determining the value of Ms. Kedia’s 2025 long-term incentive award, the Committee considered, among other factors, the announced transition to the CEO role in 2025 and market pay levels.
Setting the value of the equity awards
| U.S. Bancorp 2025 Proxy Statement | 49 |
Selecting the performance metrics for the 2024 PRSU awards
Selecting the performance metrics for the 2024 PRSU awards As part of its 2024 PRSU design review, the Committee determined that it was appropriate for the number of PRSUs earned at the end of the three-year performance period to continue to be determined by a formula that uses a comparison of our actual ROE result to target-level ROE, as well as our ROE performance relative to our peer financial institutions. ROE is used as the performance metric because: ▶ it directly reflects the return generated by the company on our shareholders’ investment; ▶ it encompasses profitability, efficiency, balance sheet management and financial leverage, and is among the most widely used indicators of financial performance in our industry; ▶ achieving a high ROE requires an appropriate balance between achieving the highest return on invested capital and managing risk within the company’s established risk tolerance levels; and ▶ using ROE as a performance metric aligns the interests of the executives with those of long-term shareholders because sustaining a high ROE is a primary driver of strong earnings growth and long-term valuation. Consistent with prior years, the Committee uses a performance matrix, illustrated below, that reflects both absolute and relative ROE scales to determine the final PRSU award amounts earned during the performance period. Target levels of both absolute and relative ROE are established, with maximum and minimum levels also identified. Earned amounts are determined using straight-line interpolation. The Committee believes that the PRSU earn-out structure provides an important balance between rewarding the achievement of absolute performance goals and strong relative performance. Executives are not rewarded for poor performance simply because members of our financial peer group have even worse performance, nor are they rewarded for exceeding expectations if performance relative to peers is substandard. In addition, by using a sliding scale for each ROE performance metric, the matrix takes into account the amount of variance from the ROE target and peer group ROE results, rewarding performance while mitigating the incentive for excessive risk taking that may result from an “all-or-nothing” award.
Setting the levels of absolute and relative ROE for the 2024 PRSU performance matrix
Setting the levels of absolute and relative ROE for the 2024 PRSU performance matrix The target and maximum ROE levels selected by the Committee for the three-year performance period are based on the ROE range included in the company’s profitability goals publicly communicated prior to the grant date. The company’s ROE result may be adjusted from reported results to normalize the effect of significant notable items such as merger-related charges in the event of an acquisition. Since 2020, ROE results include adjustments related to the impact of the CECL accounting standard. The adjustments eliminate the volatility of the accounting standard related to changes in the allowance for credit losses, while including net charge-offs related to actual credit losses experienced. These CECL-related adjustments to the ROE calculation for the PRSU awards were adopted by the Committee in January 2020, when we adopted the accounting standard. The Committee also establishes a sliding scale of ROE achieved relative to the ROE of our financial peer group, which consists of the following institutions: Bank of America Corporation, Citizens Financial Group, Fifth Third Bancorp, JPMorgan Chase & Co., KeyCorp, The PNC Financial Service Group, Inc., Regions Financial Corporation, Truist Financial Corporation and Wells Fargo & Company. This group is used by the company for financial comparison purposes because these companies, along with U.S. Bancorp, are the largest financial services companies based in the United States that provide broadly comparable retail and commercial banking services. The ROE performance matrix provides that performance above the median of peers will increase the payout otherwise earned based on our absolute ROE result, while performance below the median of peers will reduce the award payout. The company’s absolute and relative ROE results for each of the three years within the performance period are applied to the performance matrix to produce a percentage of target PRSUs results for that year. At the end of the performance period, the percentage results for the three years will be averaged to determine the percentage of target PRSUs earned and eligible to vest upon the third anniversary of the grant date.
Setting the levels of absolute and relative ROE for the 2024 PRSU performance matrix
| Year | ROE1 | Peer group ranking2 | Earn out percentage | | 2022 | 15.9% | At or above 75th%ile | 137.0% | | 2023 | 14.95% | At or above 75th%ile | 128.7% | | 2024 | 12.47% | At or above 75th%ile | 114.1% | | Final earnout percentage for PRSU awards granted in 2022 | | | 126.6% |
Selecting the performance metrics for the 2025 PRSU awards
Selecting the performance metrics for the 2025 PRSU awards The Committee determined that ROTCE was an appropriate performance metric for the 2025 PRSU awards because it is a key long-term performance priority under the company’s strategic plan, reflects the profits generated by the company on our shareholders’ investment, and is a useful metric for comparing the profitability of the company and our peers. ROTCE measures the company’s net income applicable to common equity, excluding, on a tax-adjusted basis, the impact of impairment and amortization of intangible assets, as a percentage of average tangible common equity. The Committee believes it is appropriate for use in our long-term incentive program due to the strong correlation between ROTCE and the delivery of positive share price performance to shareholders. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, non-controlling interests, goodwill and certain identifiable intangible assets. For purposes of measuring performance, as provided in our 2024 Stock Incentive Plan or the applicable form of award agreement, ROTCE may be further adjusted by the Committee, in its discretion, to normalize the effect of significant notable items such as discontinued operations, changes in applicable accounting rules or principles, acquisitions, mergers or restructuring costs, and other extraordinary or unusual items or events. ROTCE results also include adjustments related to the impact of the CECL accounting standard. Cumulative three-year TSR performance relative to peers was added as a modifier because it directly reflects the relative performance of our common stock versus our financial peer group over the three-year performance period and further aligns the interests of our executives with the long-term interests of our shareholders. The Committee may adjust TSR for stock splits, reverse stock splits, stock dividends, and other unusual, extraordinary or non-recurring transactions or events, or other similar changes in the capital structure of the company, as applicable.
Setting the levels of absolute and relative ROTCE for the 2025 PRSU performance matrix
Setting the levels of absolute and relative ROTCE for the 2025 PRSU performance matrix The target ROTCE level selected by the Committee for the three-year performance period is based on the ROTCE target guidance publicly communicated by the company at its 2024 Investor Day. The Committee also established a sliding scale of ROTCE achieved relative to the ROTCE of our financial peer group. In connection with its determination to change the performance metrics for the 2025 PRSU design, the Committee evaluated the financial peer group used for the 2024 PRSU awards and determined that it continued to be appropriate. The Committee believes that the 2025 PRSU earn-out structure continues to provide an important balance between rewarding the achievement of absolute performance goals and strong relative performance and sets maximum, target and minimum performance thresholds relative to our financial peer group that are sufficiently rigorous compared to the company’s ROTCE outlook over the next three years, and taking into account differences in our diversified business mix relative to peers. The ROTCE performance matrix provides that performance above the median of peers will increase the payout otherwise earned based on our absolute ROTCE result, while performance below the median of peers will reduce the award payout. The company’s absolute and relative ROTCE results for each of the three years within the performance period will be applied to the performance matrix to produce a percentage of target PRSUs results for that year using straight-line interpolation. At the end of the performance period, the percentage results for the three years will be averaged to determine the percentage of target PRSUs, with that percentage adjusted up or down 15% by application of TSR Modifier Factor which is determined based on the company’s peer group TSR ranking for the performance period. The final number of PRSUs earned and eligible to vest upon the third anniversary of the grant date will be determined by multiplying the percentage of target PRSUs by the TSR Modifier Factor, and then multiplying the result by the target PRSU award number.
Setting the levels of absolute and relative ROTCE for the 2025 PRSU performance matrix
| TSR Modifier | | | Peer Group TSR Ranking | TSR Modifier Factor | | Greater than 75th percentile | 1.15 | | At or between 25th and 75th percentile | No adjustment | | Less than 25th percentile | 0.85 |
How executive compensation is determined
| January — February | | ▶ Review the company’s recent performance in several key financial metrics and compare it to the performance of its peer institutions ▶ Review risk scorecard summaries for each executive officer ▶ Determine the cash incentive payouts to be made under the AEIP based on the previous year’s corporate, business line, and individual performance and sensitivity to risk ▶ Calculate the percentage of target PRSU awards earned for the last completed performance period ▶ Set the executive officers’ base salaries and target award percentages for the coming year under the AEIP ▶ Establish the structure and performance targets for the coming year under the AEIP ▶ Set the structure and amount of the executive officers’ long-term incentive awards ▶ Establish performance targets for the upcoming PRSU awards and the value of equity awards to be granted to executive officers in February or March ▶ Consider risks arising from the company’s incentive compensation plans (see below for more information about the risk consideration process) | | April | | ▶ Review total realizable compensation summary sheets for each executive officer, including compensation outcomes under various termination scenarios ▶ Review Say on Pay voting recommendations from proxy advisors and consider the results of the shareholder vote | | July — October | | ▶ Review comparative compensation information from peer institutions (see below for more information about our compensation peer group), as well as a larger group of diversified financial companies ▶ Receive compensation consultant reports on executive compensation practices and trends in the financial services industry | | December | | ▶ Receive management reports on feedback from fall shareholder engagement conversations ▶ Establish design of executive compensation program for the upcoming year and make preliminary decisions about target levels of compensation ▶ Evaluate the CEO’s performance with input from all of the non-employee directors | | Ongoing | | ▶ Review the company’s year-to-date financial performance relative to the targets included in its incentive compensation plans ▶ Review relevant factors as part of the Qualitative Review process in connection with incentive compensation funding determination ▶ Evaluate the structure of the executive compensation program and assess its effectiveness in creating long-term shareholder value |
Compensation peer group
Compensation peer group The Committee aims to establish compensation that is competitive within a reasonable range of median amounts, taking into consideration each NEO’s performance, tenure in position, and comparability of the NEO’s role with corresponding roles in peer institutions. The Committee used the following group of financial services companies to perform market assessments when setting the compensation of our executive officers in 2024 (listed in descending order of assets as of December 31, 2024):
Compensation peer group
| Company name | Assets1 ($ in millions) | Market capitalization1 ($ in millions) | Revenue2 ($ in millions) | | JPMorgan Chase & Co. | $4,002,814 | $674,865 | $177,556 | | Bank of America Corporation | $3,261,789 | $337,223 | $101,887 | | Citigroup Inc. | $2,357,135 | $133,126 | $81,139 | | Wells Fargo & Company | $1,929,845 | $233,863 | $82,296 | | The PNC Financial Services Group, Inc. | $560,038 | $76,520 | $21,555 | | Truist Financial Corporation | $531,176 | $57,588 | $13,278 | | Capital One Financial Corporation | $490,144 | $68,031 | $39,112 | | Fifth Third Bancorp | $212,927 | $28,351 | $8,479 | | Citizens Financial Group, Inc. | $217,521 | $19,285 | $7,809 | | U.S. Bancorp | $678,318 | $74,616 | $27,335 | | U.S. Bancorp percentile ranking | 51% | 47% | 41% |
Compensation peer group
1. Source: S&P Capital IQ based on company filings and market data; at December 31, 2024 2. Source: S&P Capital IQ based on company filings and market data; for the year ended December 31, 2024; excludes taxable-equivalent adjustments There were no changes to the 2023 peer group; accordingly, the 2024 peer group consisted of the same peer companies. The Committee selects compensation peer group companies that it believes represent our most meaningful competitors in the marketplace for executive talent. The Committee also reviews and uses compensation data from a large group of diversified financial services companies as an additional point of comparison. As a result of this ongoing analysis and resulting compensation adjustments, our executive compensation positioning is generally within market range, recognizing that several positions are unique to our company and do not have clear market comparisons.
Clawback and forfeiture provisions applicable to executive awards
Clawback and forfeiture provisions applicable to executive awards ▶ Clawback of paid cash awards: Under its existing clawback policy, the Committee may adjust and recoup cash incentive amounts paid to any executive officer as it deems appropriate, if attributable to materially misleading reported earnings that require restatement. ▶ Forfeiture of unpaid cash awards: Payouts of annual cash incentive awards can be reduced to $0, regardless of company performance relative to plan metrics, if the executive officer has demonstrated negative personal performance that was significantly insensitive to risk during the performance period. ▶ Cancellation of unvested equity awards: The equity award agreements for executive officers provide that outstanding awards can be canceled if the executive’s conduct has subjected the company to significant financial, reputational or other risk through violations of company policies, laws or regulations; negligent or willful misconduct; or activity resulting in a significant or material control deficiency. ▶ Additional mandatory recovery policy: The Committee has adopted an Incentive-Based Compensation Recovery Policy designed to implement the mandatory incentive-based compensation recovery in compliance with applicable SEC and NYSE rules. The recovery policy applies to the company’s executive officers and requires recovery of incentive-based compensation erroneously received by executive officers after an accounting restatement as required under those rules. This policy is in addition to, and does not replace, the existing policy.
Equity grant policies and practices
Equity grant policies and practices The company currently does not, and during 2024 did not, grant stock options, stock appreciation rights, or similar option-like instruments under either the prior 2015 Stock Incentive Plan or the 2024 Stock Incentive Plan and has no policies or practices to disclose pursuant to Item 402(x) of SEC Regulation S-K. In addition, the company does not schedule equity award grants in anticipation of the release of material, non-public information, nor does the company time the release of material non-public information based on equity grant dates.
Risk considerations
Risk considerations Overview: Prudent risk taking is an integral part of any business strategy, and our compensation program is not intended to encourage management decisions that completely eliminate risk. Rather, the combination of various elements in our program is designed to encourage appropriate sensitivity to risk and mitigate the potential to reward risk taking that may produce short-term results that appear in isolation to be favorable, but that may undermine the successful execution of our long-term business strategy and negatively affect shareholder value. Our compensation practices are also designed to reward performance while maintaining our core commitment to customer service and ethical principles. Together with the company’s processes for strategic planning, its internal control over financial reporting and other financial and compliance policies and practices, the design of our compensation program helps to discourage management actions that demonstrate insensitivity to risk. Role of management: As a large financial services company, we are subject to ongoing regulatory reviews of incentive compensation policies and practices. We routinely undertake a thorough risk analysis of every incentive compensation plan of the company, the individuals covered by each plan and the risks inherent in each plan’s design and implementation. We also conduct validation and back-testing activities to ensure that our compensation plans are correctly risk rated, that they are designed to adequately mitigate inherent risk, and that each plan is administered effectively. The Incentive Review Committee was created to oversee that review and to provide more comprehensive oversight of the relationship between the various kinds of risk we manage and our company’s incentive compensation plans and programs. The Incentive Review Committee meets throughout the year and reviews and approves all company incentive plans. The Incentive Review Committee reviews incentive plan elements such as risk controls, plan participants, performance measures, performance and payout curves or formulas, how target level performance is determined (including whether any thresholds and caps exist), how frequently payouts occur, and the mix of fixed and variable compensation that the plan delivers. The plans and programs are also reviewed from the standpoint of reasonableness (for example, how target pay levels compare to similar plans for similar employee groups at other companies, and how payout amounts relate to the results that generate the payments), how well the plans and programs are aligned with the company’s goals and objectives and with its risk appetite, and from an overall standpoint, whether these plans and programs represent an appropriate mix of short-term and long-term compensation. As part of this review by the Incentive Review Committee, our management team, including senior risk officers and individuals from the compensation department, have identified the risks inherent in these programs and have modified plans and controls where appropriate to mitigate certain potential risks. For example, most business line incentive compensation plans with a credit component track early defaults, or defaults that occur within the first 12 months, and must include a provision that allows the company to offset future payments by the amount of the previously paid incentives related to the early default. In addition, a “risk scorecard” assessment measuring adequacy of risk management is undertaken for senior management-level employees who have the individual ability to pose material risk to the company, including the executive officers; all employees who have credit responsibility and who participate in annual corporate cash incentive plans; and all employees who, as part of a group, can engage in risk-taking behavior that could be material to the company and who participate in annual corporate cash incentive plans. This analysis serves as the basis for annual cash incentive plan adjustments for these employees. Annually, the Incentive Review Committee also addresses risk events that pose a material adverse impact to the company or business line to determine whether an event should trigger cancellation of equity awards. The Incentive Review Committee has reviewed its process with the Committee and discussed the areas where compensation-related risks were being addressed by plan modifications, or were mitigated by internal controls or otherwise.
Risk considerations
| Overall executive compensation program risk mitigation factors | | ▶ Long-term incentive focus: The majority of the total compensation received by executive officers is in the form of equity awards with multi-year vesting schedules, which helps to ensure that executives have significant value tied to long-term stock price performance and mitigates incentives to manage the company with an excessive focus on short-term gain. ▶ Meaningful stock ownership and retention requirements: Executives are required to hold significant amounts of company stock, a portion of which must be held until retirement, which we believe fosters the alignment of executives’ interests with those of our long-term shareholders. ▶ Policy prohibiting hedging of shares: Our executives are prohibited from taking actions designed to hedge or offset any decrease in the market value of our common stock. | | Annual cash incentive risk mitigation factors | | ▶ Specific risk sensitivity analysis: The Committee considers corporate risk management performance in determining the bonus funding percentage. In addition, a “risk scorecard” assessment is performed for executive officers and can result in adjustments to individual award payouts under the AEIP. ▶ Clawback policy: The company’s incentive compensation clawback policies discourage risk taking that could lead to improper financial reporting. ▶ Cap on award value: The maximum annual cash incentive award payable to an executive officer is equal to 200% of that officer’s target award value, which limits the potential incentive to take excessive risk to maximize award value. | | Long-term incentive risk mitigation factors | | ▶ Equity cancellation provisions: Executive officers’ unvested equity awards can be cancelled if their conduct has subjected the company to significant financial, reputational or other risk. ▶ Choice of performance metric: The PRSUs granted between 2022 and 2024 use ROE while the PRSUs granted in 2025 use ROTCE as the measure of corporate performance for determining the final number of units earned under the award. Achieving a high ROE and ROTCE requires an appropriate balance between achieving the highest return on invested capital and managing risk within the company’s established risk tolerance levels. The addition of a TSR modifier to PRSUs granted in 2025 also supports management accountability for our relative stock price performance at the end of the three-year performance period. ▶ Maximum PRSU payout limited: The number of units that may be earned under the performance formula is capped at 150%, which limits the potential incentive to take excessive risk to maximize award value. In addition, for PRSUs granted in 2025, there will be no upward adjustment if our absolute TSR over the three-year performance period is negative. ▶ Sliding scale earn-out calculation: The PRSU performance matrix for PRSUs granted between 2022 and 2024 takes into account the amount of variance from the ROE target and peer group ROE results while the PRSU performance matrix for PRSUs granted in 2025 takes into account the amount of variance from the ROTCE target and peer group ROTCE results, mitigating the incentive for excessive risk taking that may result from an “all-or-nothing” award. |
Summary compensation table for fiscal year 2024
Summary compensation table for fiscal year 2024 The following table shows the cash and non-cash compensation awarded to or earned by our NEOs in fiscal years 2022, 2023 and 2024.
Summary compensation table for fiscal year 2024
| Name and principal position1 | Year | Salary ($) | Stock awards ($)2 | Non-equity incentive plan compensation ($)3 | Change in pension value and non-qualified deferred compensation earnings ($)4 | All other compensation ($)5 | Total ($) | | Andrew Cecere Chairman and Chief Executive Officer | 2024 | 1,400,000 | 11,000,024 | 4,929,400 | 1,926,261 | 83,642 | 19,339,327 | | | 2023 | 1,350,000 | 10,500,000 | 3,794,175 | 7,210,212 | 62,570 | 22,916,957 | | | 2022 | 1,300,000 | 10,000,000 | 4,785,300 | — | 72,214 | 16,157,514 | | John C. Stern Senior Executive Vice President and Chief Financial Officer | 2024 | 700,000 | 2,700,000 | 1,408,400 | 89,164 | 19,606 | 4,917,170 | | | 2023 | 527,308 | 600,000 | 607,260 | 91,970 | 18,600 | 1,845,138 | | Gunjan Kedia President | 2024 | 930,770 | 6,499,995 | 2,292,267 | 225,513 | 189,310 | 10,137,855 | | | 2023 | 725,000 | 3,500,000 | 1,173,050 | 220,797 | 130,447 | 5,749,294 | | | 2022 | 700,000 | 3,250,000 | 1,451,520 | 45,795 | 146,317 | 5,593,632 | | Terrance R. Dolan Vice Chair and Chief Administration Officer | 2024 | 815,000 | 4,999,995 | 2,049,725 | 691,796 | 34,007 | 8,590,523 | | | 2023 | 780,000 | 4,500,000 | 1,409,265 | 1,857,078 | 32,331 | 8,578,674 | | | 2022 | 750,000 | 4,200,000 | 1,840,500 | — | 38,038 | 6,828,538 | | Shailesh M. Kotwal Vice Chair, Payment Services | 2024 | 800,000 | 4,400,009 | 1,774,800 | 188,941 | 95,240 | 7,258,990 | | | 2023 | 700,000 | 3,200,000 | 1,206,800 | 199,606 | 106,695 | 5,413,101 | | | 2022 | 680,000 | 3,000,000 | 1,408,824 | 107,752 | 95,504 | 5,292,080 | | Timothy A. Welsh Former Vice Chair, Consumer and Business Banking | 2024 | 615,385 | 4,999,995 | — | 197,116 | 1,842,402 | 7,654,898 | | | 2023 | 725,000 | 3,500,000 | 1,132,450 | 144,152 | 41,165 | 5,542,767 | | | 2022 | 700,000 | 3,250,000 | 1,440,180 | 62,418 | 37,245 | 5,489,843 |
Summary compensation table for fiscal year 2024
1. Name and principal position Ms. Kedia has served as our President since May 3, 2024. Prior to that she served as Vice Chair, Wealth, Corporate, Commercial and Institutional Banking. Mr. Kotwal served as Vice Chair, Payment Services until February 2, 2025; following that date he serves in an advisory role supporting the leadership transition of the Payments business through June 30, 2025. Mr. Welsh served in his role as Vice Chair, Consumer and Business Banking, until July 31, 2024; he remained employed by the company and served as an advisor to the President through October 4, 2024. The amounts reported here for 2024 reflect compensation paid or awarded for the entire year for each of these NEOs. 2. Stock awards The amounts in this column are calculated based on the number of time-based restricted stock units, or RSUs, and performance-based restricted stock units, or PRSUs, awarded and the fair market value of U.S. Bancorp common stock on the date the award was made in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718. See Note 17 to our consolidated financial statements included in our 2024 Annual Report on Form 10-K for assumptions used to calculate our stock awards. The 2024 values in this table reflect the fair market value of each officer’s RSUs plus the target payout for the PRSUs on the grant date. The number of PRSUs subject to each of these awards will be determined after a three-year performance period beginning on January 1, 2024, and ending December 31, 2026. Depending on our company performance during the performance period, 0% to 150% of the target number of PRSUs granted to the NEOs will be earned. The fair market value of RSUs plus the maximum potential payout amounts for the PRSUs on the grant date(s) for 2024 were as follows: (i) Mr. Cecere, $14,300,031; (ii) Mr. Stern, $3,509,996; (iii) Ms. Kedia, $8,450,006; (iv) Mr. Dolan, $6,500,002; (v) Mr. Kotwal, $5,720,008; and (vi) Mr. Welsh, $6,500,002.
Summary compensation table for fiscal year 2024
| 60 | U.S. Bancorp 2025 Proxy Statement |
Summary compensation table for fiscal year 2024
Non-equity incentive plan compensation The 2024 amounts in this column represent the Annual Executive Incentive Plan, or AEIP, awards. For current executives, such amounts were determined in January 2025 based on 2024 performance and paid out in February 2025. The AEIP and these awards are discussed above in the “Compensation discussion and analysis — Annual cash incentive awards” section of this proxy statement. 4. Change in pension value and non-qualified deferred compensation earnings The amounts in this column represent the increase in the actuarial net present value of all future retirement benefits under the U.S. Bank Pension Plan (the Pension Plan) and the U.S. Bank Non-Qualified Retirement Plan (the Non-Qualified Plan) from December 31, 2023 to December 31, 2024. A number of factors can cause the amounts reflected in this column to vary significantly, including volatility in the discount rate applied to determine the value of future payment streams and changes to mortality assumptions. The change in present value amounts reported for 2024 are smaller than those reported for 2023 for certain NEOs. These smaller increases in value are due to the increase in discount rates in 2024; year-end 2024 rates were roughly 65 basis points higher than for year-end 2023, compared with a roughly 45 basis point decrease from the prior year (which significantly increased the 2023 values). Other factors contributing to the change amounts are increases in pay, age and service. The net present values of the pension benefits as of December 31, 2024, used to calculate the net change in pension benefits were determined using the same assumptions used to determine our pension obligations and expense for financial statement purposes. See Note 16 to our consolidated financial statements included in our 2024 Annual Report on Form 10-K for these specific assumptions. Additional information about our Pension Plan and Non-Qualified Plan is included below under the heading “Pension benefits.” We have not provided above-market or preferential earnings on any nonqualified deferred compensation and, accordingly, no such amounts are reflected in this column. 5. All other compensation The following table describes each component of the All Other Compensation column for fiscal year 2024:
Summary compensation table for fiscal year 2024
| Name | Parking reimbursement ($) | Matching contribution into 401(k) savings plan ($) | Reimbursement of financial planning expenses ($) | Home security system expenses ($) | Commuting expenses ($)a | Housing expenses ($)a | Business club dues ($) | Other ($)b | Total ($) | | Mr. Cecere | 5,400 | 13,800 | 28,801 | 6,979 | — | — | 7,163 | 21,499 | 83,642 | | Mr. Stern | 5,400 | 13,800 | — | — | — | — | — | 406 | 19,606 | | Ms. Kedia | — | 13,800 | 21,236 | — | 103,817 | 40,823 | 6,599 | 3,035 | 189,310 | | Mr. Dolan | 5,400 | 13,800 | 7,000 | — | — | — | 7,807 | — | 34,007 | | Mr. Kotwal | — | 13,800 | — | — | 77,440 | — | — | 4,000 | 95,240 | | Mr. Welsh | 4,050 | 13,800 | 23,670 | — | — | — | 3,579 | 1,797,303 | 1,842,402 |
Summary compensation table for fiscal year 2024
a. The amounts for Ms. Kedia and Mr. Kotwal represent expenses related to corporate housing in Minnesota, air travel expenses related to use of aircraft fractionally-owned by the company or commercial flights, and related parking and ground transportation when commuting between their out-of-state residences and our corporate headquarters in Minnesota. b. The amount for Mr. Cecere represents the incremental cost for personal use of company-owned aircraft for two trips taken by Mr. Cecere and his spouse. The amount for Mr. Stern represents two nominal non-cash gifts. The amount for Ms. Kedia represents (i) a $1,000 matching contribution under our charitable matching gift program, which is available to all our employees, (ii) a $1,885 cost for personal expenses incurred in connection with the attendance of her spouse at a required client event where the presence of spouses was expected, and (iii) a $150 non-cash gift. The amount for Mr. Kotwal represents a matching contribution under our charitable matching gifts program, which is available to all our employees. The amount for Mr. Welsh represents payments made in connection with his termination, including (i) a $400,000 payment equivalent to six months of base salary under the company’s broad-based U.S. Bank Severance Pay Program (the Severance Pay Program), (ii) a $1,350,000 payment equivalent to a pro-rated amount calculated based on his annual incentive target award level of $1,800,000 under the AEIP for the number of full months worked in the period from January 1, 2024 through October 4, 2024, paid following his last day of employment on October 4, 2024 under the Severance Pay Program, (iii) a $46,816 payment for unused vacation, payable on his termination and (iv) a $487 non-cash gift. See “Potential payments upon termination or change-in-control” for additional information on the payments under our Severance Pay Program. The aggregate incremental cost for corporate-owned aircraft is determined by multiplying the total number of personal flight hours by the direct variable operating costs of the aircraft per hour including costs related to fuel, landing and parking fees, and crew expenses. For fractionally-owned aircraft, including amounts referenced in footnote (a) above, the incremental cost is determined by multiplying the total number of personal flight hours by the contracted hourly and fuel charges. As the aircraft are used primarily for business travel, we do not include fixed costs that do not change based on usage, such as crew salaries, aircraft acquisition costs and monthly management fees for fractionally-owned aircraft. In addition, a NEO’s spouse might accompany him or her on a business-related flight on a company-owned aircraft if a seat on that aircraft would otherwise be empty. There is no incremental cost to our company for such flights. Our NEOs are occasionally permitted to use sporting and cultural events tickets. As such tickets were previously acquired by our company for business entertainment, there is no incremental cost to our company for the use of such tickets.
Summary compensation table for fiscal year 2024
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Grants of plan-based awards
Grants of plan-based awards The following table summarizes the equity and non-equity plan-based awards granted to the NEOs in fiscal year 2024.
Grants of plan-based awards for fiscal year 2024
Grants of plan-based awards for fiscal year 2024
Grants of plan-based awards for fiscal year 2024
| Name | Grant date | Committee approval date | Estimated future payouts under non-equity incentive plan awards1 | | Estimated future payouts under equity incentive plan awards4 | | | All other stock awards: number of shares of stock or units (#)5 | Grant date fair value of stock awards ($)6 | | | | | Target ($)2 | Maximum ($)3 | Threshold (#) | Target (#) | Maximum (#) | | | | Andrew Cecere | — | — | 4,900,000 | 9,800,000 | — | — | — | — | — | | | 2/29/24 | 1/22/24 | — | — | 0 | 157,293 | 235,939 | — | 6,600,014 | | | 2/29/24 | 1/22/24 | — | — | — | — | — | 104,862 | 4,400,010 | | John C. Stern | — | — | 1,400,000 | 2,800,000 | — | — | — | — | — | | | 2/29/24 | 1/22/24 | — | — | 0 | 38,608 | 57,912 | — | 1,619,922 | | | 2/29/24 | 1/22/24 | — | — | — | — | — | 25,739 | 1,080,008 | | Gunjan Kedia | — | — | 2,266,667 | 4,533,334 | — | — | — | — | — | | | 2/29/24 | 1/22/24 | — | — | 0 | 71,497 | 107,245 | — | 3,000,014 | | | 2/29/24 | 1/22/24 | — | — | — | — | — | 47,664 | 1,999,981 | | | 5/6/24 | 5/3/24 | — | — | 0 | 21,521 | 32,281 | — | 900,008 | | | 5/6/24 | 5/3/24 | — | — | — | — | — | 14,347 | 599,992 | | Terrance R. Dolan | — | — | 2,037,500 | 4,075,000 | — | — | — | — | — | | | 2/29/24 | 1/22/24 | — | — | 0 | 71,497 | 107,245 | — | 3,000,014 | | | 2/29/24 | 1/22/24 | — | — | — | — | — | 47,664 | 1,999,981 | | Shailesh M. Kotwal | — | — | 1,800,000 | 3,600,000 | — | — | — | — | — | | | 2/29/24 | 1/22/24 | — | — | 0 | 62,917 | 94,375 | — | 2,639,997 | | | 2/29/24 | 1/22/24 | — | — | — | — | — | 41,945 | 1,760,012 | | Timothy A. Welsh | — | — | 1,800,000 | 3,600,000 | — | — | — | — | — | | | 2/29/24 | 1/22/24 | — | — | 0 | 71,497 | 107,245 | — | 3,000,014 | | | 2/29/24 | 1/22/24 | — | — | — | — | — | 47,664 | 1,999,981 |
Grants of plan-based awards for fiscal year 2024
1. Estimated future payouts under non-equity incentive plan awards These columns show the potential payments for each NEO under our AEIP for 2024 performance. Actual annual cash incentive payout amounts are determined in accordance with a formula based on corporate EPS performance and business line pretax income performance, ranging in each case from 0% to 200% of target levels, subject to adjustment for individual performance and risk sensitivity. Additional information regarding how the payout amounts for these awards are determined is included above in “Compensation discussion and analysis — Annual cash incentive awards,” and the actual amounts paid based on 2024 performance are reported above in the “Non-equity incentive plan compensation” column in the “Summary compensation table.” 2. Target estimated future payouts under non-equity incentive plan awards As described above in “Compensation discussion and analysis — Annual cash incentive awards,” the Compensation and Human Resources Committee establishes a target cash incentive amount for each NEO, expressed as a percentage of that NEO’s base salary. 3. Maximum estimated future payouts under non-equity incentive plan awards As described above in “Compensation discussion and analysis — Annual cash incentive awards,” the maximum cash incentive amount for each NEO equals 200% of that NEO’s target amount. 4. Estimated future payouts under equity incentive plan awards — PRSUs The threshold, target and maximum columns each show the potential number of PRSUs that could be earned by each NEO during the three-year performance period beginning on January 1, 2024 and ending December 31, 2026. The number of PRSUs earned will be between 0% and 150% of target based on the company’s absolute and relative ROE performance during the performance period, as set forth in the applicable award agreements. Additional information regarding how the PRSU awards are earned is included above in “Compensation discussion and analysis — Long-term incentive awards.” PRSUs granted on February 29, 2024, as part of our annual award process and earned during the three-year performance period will vest on February 28, 2027. Ms. Kedia received an additional grant on May 6, 2024, corresponding with her appointment to President. Terms of her additional grant align with those of the annual awards. Cash dividends on unvested PRSUs are accrued during the performance period, but accrued dividends are only paid upon vesting on shares earned, if any, by the NEOs.
Grants of plan-based awards for fiscal year 2024
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Grants of plan-based awards for fiscal year 2024
All other stock awards: number of shares of stock or units — RSUs The RSUs granted on February 29, 2024, as part of our annual awards process vest over a three-year period, with 33% of the RSUs vesting on each of February 28, 2025, and February 28, 2026 and the remaining 34% of the RSUs vesting on February 28, 2027. Ms. Kedia received an additional grant on May 6, 2024, in connection with her appointment to President. Terms of her additional grant align with those of the annual awards. The RSUs pay an amount in cash equal to the dividends paid on our shares of common stock. 6. Grant date fair value of stock awards The grant date fair value of the PRSUs and the RSUs was calculated using the target number of units multiplied by the closing market price of a share of our common stock on the grant date in accordance with FASB ASC Topic 718.
Outstanding equity awards at 2024 fiscal year-end
Outstanding equity awards at 2024 fiscal year-end The following table shows the outstanding equity held by the NEOs at the end of fiscal year 2024.
Outstanding equity awards at 2024 fiscal year-end
| | Option awards | | | Stock awards | | | | | Name | Number of securities underlying unexercised options (#) exercisable | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)1 | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)1 | | Andrew Cecere | 102,251 | 55.01 | 2/16/2027 | — | — | — | — | | | 140,445 | 39.49 | 2/18/2026 | — | — | — | — | | | 102,044 | 44.32 | 2/19/2025 | — | — | — | — | | | — | — | — | 104,862(2) | 5,015,549 | — | — | | | — | — | — | — | — | 235,939(3) | 11,284,962 | | | — | — | — | 60,765(4) | 2,906,390 | — | — | | | — | — | — | — | — | 204,060(5) | 9,760,190 | | | — | — | — | 24,152(6) | 1,155,190 | — | — | | | — | — | — | 134,896(7) | 6,452,076 | — | — | | John C. Stern | — | — | — | 25,739(2) | 1,231,096 | — | — | | | — | — | — | — | — | 57,912(3) | 2,769,931 | | | — | — | — | 8,681(4) | 415,212 | — | — | | | — | — | — | 3,321(6) | 158,843 | — | — | | Gunjan Kedia | 27,267 | 55.01 | 2/16/2027 | — | — | — | — | | | — | — | — | 14,347(8) | 686,217 | — | — | | | — | — | — | — | — | 32,281(9) | 1,544,000 | | | — | — | — | 47,664(2) | 2,279,769 | — | — | | | — | — | — | — | — | 107,245(3) | 5,129,528 | | | — | — | — | 20,255(4) | 968,797 | — | — | | | — | — | — | — | — | 68,020(5) | 3,253,397 | | | — | — | — | 7,850(6) | 375,466 | — | — | | | — | — | — | 43,841(7) | 2,096,915 | — | — | | Terrance R. Dolan | 52,829 | 55.01 | 2/16/2027 | — | — | — | — | | | 2,331 | 41.88 | 7/18/2026 | — | — | — | — | | | 37,455 | 39.49 | 2/18/2026 | — | — | — | — | | | 26,531 | 44.32 | 2/19/2025 | — | — | — | — | | | — | — | — | 47,664(2) | 2,279,769 | — | — | | | — | — | — | — | — | 107,245(3) | 5,129,528 | | | — | — | — | 26,042(4) | 1,245,589 | — | — | | | — | — | — | — | — | 87,454(5) | 4,182,925 | | | — | — | — | 10,144(6) | 485,188 | — | — | | | — | — | — | 56,656(7) | 2,709,856 | — | — |
Outstanding equity awards at 2024 fiscal year-end
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Outstanding equity awards at 2024 fiscal year-end
| | Option awards | | | Stock awards | | | | | Name | Number of securities underlying unexercised options (#) exercisable | Option exercise price ($) | 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 ($)1 | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)1 | | Shailesh M. Kotwal | 27,267 | 55.01 | 2/16/2027 | — | — | — | — | | | 37,455 | 39.49 | 2/18/2026 | — | — | — | — | | | — | — | — | 41,945(2) | 2,006,229 | — | — | | | — | — | — | — | — | 94,375(3) | 4,513,956 | | | — | — | — | 18,519(4) | 885,764 | — | — | | | — | — | — | — | — | 62,190(5) | 2,974,548 | | | — | — | — | 7,246(6) | 346,576 | — | — | | | — | — | — | 40,468(7) | 1,935,584 | — | — | | Timothy A. Welsh | — | — | — | 31,458(2) | 1,504,636 | — | — | | | — | — | — | 20,255(4) | 968,797 | — | — | | | — | — | — | — | — | 68,020(5) | 3,253,397 | | | — | — | — | 7,850(6) | 375,466 | — | — | | | — | — | — | 43,841(7) | 2,096,915 | — | — |
Outstanding equity awards at 2024 fiscal year-end
1. The amounts in these columns are calculated using a per share value of $47.83, the closing market price of a share of our common stock on December 31, 2024. 2. The RSUs vest in three annual installments, such that 33% of the RSUs vest on February 28, 2025, and February 28, 2026, respectively, and the remaining 34% of the RSUs vest on February 28, 2027. For Mr. Welsh, the remaining RSUs vest in two annual installments on February 28, 2025 and February 28, 2026, respectively. For additional information on the treatment of his award and the portion of the RSUs cancelled following his termination of employment, see the “Potential payments upon termination or change-in-control” in this proxy statement. 3. The amount shown represents the maximum number of PRSUs that can be earned during the three-year performance period of January 1, 2024, to December 31, 2026. The actual number of PRSUs earned will be between 0% and 150% of target based on the company’s absolute and relative ROE performance during the performance period, as set forth in the applicable award agreements and as determined by the Compensation and Human Resources Committee. Performance for 2024 was above target, but the results could change during the remaining two years of the performance period. Any earned PRSUs will vest on February 28, 2027, the third anniversary of the grant date. No amount is reported for Mr. Welsh as his 2024 PRSU award was cancelled in accordance with the terms of the applicable award agreement. For additional information on the treatment of his award, see the “Potential payments upon termination or change-in-control” in this proxy statement. 4. The RSUs vest in three annual installments commencing on the first anniversary of grant date, such that 33% of the RSUs vest on March 2, 2024, and March 2, 2025, respectively, and the remaining 34% of the RSUs vest on March 2, 2026. 5. The amount shown represents the maximum number of PRSUs that can be earned during the three-year performance period of January 1, 2023, to December 31, 2025. The actual number of PRSUs earned will be between 0% and 150% of target based on the company’s absolute and relative ROE performance during the performance period, as set forth in the applicable award agreements and as determined by the Compensation and Human Resources Committee. Performance for each of 2023 and 2024 was above target, but the results could change during the remaining year of the performance period. Any earned PRSUs will vest on March 2, 2026, the third anniversary of the grant date. 6. The RSUs vest in three annual installments commencing on the first anniversary of grant date, such that 33% of the RSUs vest on March 3, 2023, and March 3, 2024, respectively, and the remaining 34% of the RSUs vest on March 3, 2025. 7. The amount shown represents the actual number of PRSUs earned based on our performance during the three-year performance period beginning on January 1, 2022, and ending December 31, 2024, as compared to the targets set forth in the applicable award agreements and determined by the Compensation and Human Resources Committee. These awards vest on March 3, 2025, the third anniversary of the grant date. The RSUs vest in three annual installments aligning with the annual awards, such that 33% of the RSUs vest on February 28, 2025 and February 28, 2026, respectively, and the remaining 34% of the RSUs vest on February 28, 2027.
Outstanding equity awards at 2024 fiscal year-end
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Outstanding equity awards at 2024 fiscal year-end
The amount shown represents the maximum number of PRSUs that can be earned during the three-year performance period of January 1, 2024 to December 31, 2026. The actual number of PRSUs earned will be between 0% and 150% of target based on the company’s absolute and relative ROE performance during the performance period, as set forth in the applicable award agreements and as determined by the Compensation and Human Resources Committee. Performance for 2024 was above target, but the results could change during the remaining two years of the performance period. Any earned PRSUs will vest on February 28, 2027, aligning with the annual awards.
Option exercises and stock vested
Option exercises and stock vested The following table summarizes information with respect to stock option awards exercised and RSUs and PRSUs vested during fiscal year 2024.
Option exercises and stock vested during fiscal year 2024
Option exercises and stock vested during fiscal year 2024
Option exercises and stock vested during fiscal year 2024
| | Option awards | | Stock awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($)1 | Number of shares acquired on vesting (#) | Value realized on vesting ($)2 | | Andrew Cecere | 93,366 | 96,354 | 222,325 | 9,424,964 | | John C. Stern | — | — | 10,738 | 448,915 | | Gunjan Kedia | — | — | 65,867 | 2,790,001 | | Terrance R. Dolan | 26,583 | 81,179 | 91,632 | 3,883,666 | | Shailesh M. Kotwal | — | — | 64,427 | 2,730,356 | | Timothy A. Welsh | — | — | 65,867 | 2,790,001 |
Option exercises and stock vested during fiscal year 2024
1.
Pension benefits
Pension benefits
Pension benefits for fiscal year 2024
Pension benefits for fiscal year 2024 The following table summarizes information with respect to each plan that provides for payments or other benefits at, following, or in connection with the retirement of any of the NEOs.
Pension benefits for fiscal year 2024
| Name | Plan name | Number of years credited service (#) | Present value of accumulated benefits ($)1, 2 | Payments during last fiscal year ($) | | Andrew Cecere | U.S. Bank Non-Qualified Retirement Plan: | | | | | | Supplemental benefits | 39 | 21,392,806 | — | | | Excess benefit | 39 | 12,046,285 | — | | | U.S. Bank Pension Plan | 39 | 1,005,369 | — | | | Total | | 34,444,460(3) | — | | John C. Stern | U.S. Bank Non-Qualified Retirement Plan: | | | | | | Supplemental benefits | — | — | — | | | Excess benefit | 25 | 271,895 | — | | | U.S. Bank Pension Plan | 25 | 204,649 | — | | | Total | | 476,544 | — |
Pension benefits for fiscal year 2024
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Pension benefits for fiscal year 2024
| Name | Plan name | Number of years credited service (#) | Present value of accumulated benefits ($)1, 2 | Payments during last fiscal year ($) | | Gunjan Kedia | U.S. Bank Non-Qualified Retirement Plan: | | | | | | Supplemental benefits | — | — | — | | | Excess benefit | 31 | 912,177 | — | | | U.S. Bank Pension Plan | 8 | 96,283 | — | | | Total | | 1,008,460 | — | | Terrance R. Dolan | U.S. Bank Non-Qualified Retirement Plan | | | | | | Supplemental benefits | 3 | 71,712 | — | | | Excess benefit | 26 | 7,491,532 | — | | | U.S. Bank Pension Plan | 26 | 1,121,508 | — | | | Total | | 8,684,752 | — | | Shailesh M. Kotwal | U.S. Bank Non-Qualified Retirement Plan | | | | | | Supplemental benefits | — | — | — | | | Excess benefit | 10 | 817,379 | — | | | U.S. Bank Pension Plan | 10 | 159,164 | — | | | Total | | 976,543 | — | | Timothy A. Welsh | U.S. Bank Non-Qualified Retirement Plan | | | | | | Supplement benefits | — | — | — | | | Excess benefit | 8 | 610,786 | — | | | U.S. Bank Pension Plan | 8 | 110,419 | — | | | Total | | 721,205 | — |
Pension benefits for fiscal year 2024
1. The measurement date and material actuarial assumptions applied in quantifying the present value of the current accrued benefits are discussed in Note 16 to our consolidated financial statements included in our 2024 Annual Report on Form 10-K. These assumptions include the use of a 5.70% discount rate for the supplemental and excess plans and a 5.84% discount rate for the qualified pension plan. The mortality assumptions used are based on the white collar PRI-2012 mortality table projected generationally using the MP-2021 improvement scale. The average pay used for the benefit calculations was historical pay through the measurement date (December 31, 2024). The amounts in this column, other than Mr. Welsh’s Excess Benefit, were calculated based on the earliest age at which the applicable NEO is entitled to receive unreduced retirement benefits and ignore any vesting requirements. The earliest age of unreduced retirement benefits is 65 for all our NEOs. As Mr. Welsh ceased active employment in 2024, under the terms of the plan, his Excess Benefit was calculated based on an unreduced benefit at age 62. All of our NEOs are currently vested in 100% of their pension benefits. 2. In the event of the death of one of the NEOs in this table, a pre-established percentage of the NEO’s pension benefits will be paid to the NEO’s beneficiary. The actual percentage paid to the beneficiary is dependent on the form of payment of benefits elected by the NEO. The default percentage is 50% to the NEO’s spouse. An additional lump sum death benefit may be payable based on certain actuarial calculations. The benefit amounts shown in this column assume that each NEO will reach his or her retirement age. Due to the level of discount rates (or any accelerated service), the present value of death benefits commencing immediately would exceed the total present value of accumulated benefits shown in this column by the following amounts: (i) Mr. Cecere, $1,276,201; (ii) Mr. Stern, $162,980; (iii) Ms. Kedia, $201,438; (iv) Mr. Dolan, $86,204; (v) Mr. Kotwal, $63,801; and (vi) Mr. Welsh, $31,296. Mr. Cecere is 100% vested and eligible to begin receiving his benefits upon retirement. If any of the vested benefits are paid before Mr. Cecere reaches age 65, the benefits are reduced by certain early retirement benefit formulas specified in the applicable plan for each year prior to Mr. Cecere’s reaching age 65. These early retirement benefit formulas reduce the annual pension benefit amount payable to Mr. Cecere due to the longer benefit payment period related to the earlier commencement of benefits. Per the standard provisions of the supplemental plan, upon his attainment of age 60, Mr. Cecere became eligible for five accelerated years of service credit for service to age 65. Mr. Cecere is currently eligible for one accelerated year of service credit, worth approximately $1.3 million; this value will gradually be reflected in the table above and will have no extra value if he works to age 65. There is no effect on the applicable early reductions or benefit timing noted above.
Pension benefits for fiscal year 2024
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Understanding our “Pension benefits” table
Understanding our “Pension benefits” table This section provides information regarding the company’s retirement programs in which our NEOs participate, which include the U.S. Bank Pension Plan and the U.S. Bank Non-Qualified Retirement Plan. Our company sponsors the U.S. Bank Pension Plan (the Pension Plan) which was created through the merger of the former U.S. Bancorp’s career average pay defined benefit plan, the U.S. Bancorp Cash Balance Pension Plan (which we refer to as the Old Cash Balance Plan), and the former Firstar Corporation’s non-contributory defined benefit plan, which was primarily a final average pay plan (the Firstar Plan). The Firstar Plan was frozen to new-hire employees on July 3, 2008, and to rehire employees on November 15, 2009. Participation in the Pension Plan requires one year of service with U.S. Bancorp or its affiliates. Employees who were hired or rehired prior to July 3, 2008, or November 15, 2009, respectively, could elect to (i) continue to accrue benefits under the final average pay formula of the Pension Plan, or (ii) accrue benefits under the U.S. Bank 2010 Cash Balance Plan (the 2010 Cash Balance Plan), which represents the cash balance portion of the Pension Plan. In the event of no election, participants defaulted into the 2010 Cash Balance Plan. Participants that elected to receive pension benefits or defaulted into the 2010 Cash Balance Plan had their existing benefits in the Pension Plan frozen and earn future benefits under the cash balance formula, under which participants receive (i) annual pay credits based on eligible pay multiplied by a percentage determined by their age and years of service, and (ii) an annual interest credit. For participants who elected to continue to accrue benefits under the final average pay formula, benefits are calculated using a final average pay formula, based upon the participant’s years of service and average pay of the five-consecutive-year period in which compensation was the highest during the ten years prior to retirement. Normal retirement age is 65. Vesting of benefits requires five years of service for benefits under the final average pay formula and three years of service for benefits under the 2010 Cash Balance Plan. Mr. Dolan is the only NEO (of those eligible at the time) who elected to remain covered by the final average pay formula; all other NEOs are covered by the 2010 Cash Balance Plan. Although no new benefits accrued under the Old Cash Balance Plan and Firstar Plan for service after 2001, benefits previously earned under those plans have been preserved and will be part of a retiree’s total retirement benefit. In order to preserve the relative value of benefits that use the final average pay formula, subsequent changes in compensation (but not in service) may increase the amount of those benefits. Messrs. Cecere and Dolan have earned benefits under the Old Cash Balance Plan that will be included in their ultimate retirement benefits.
Nonqualified deferred compensation
Nonqualified deferred compensation Under the U.S. Bank Executive Employees Deferred Compensation Plan (2005 Statement) (the Executive Deferred Compensation Plan), eligible employees, including members of our senior management and all of our NEOs, may choose to defer all or a part of their annual base salary and annual cash incentive payments. Cash compensation that is deferred is deemed to be invested in one of several investment funds, including a U.S. Bancorp common stock fund, as selected by the participant. Shown below are the rates of return for each of the investment options (also known as measurement funds) available under the Executive Deferred Compensation Plan for the period from January 1, 2024 through December 31, 2024:
Nonqualified deferred compensation
| Fund Name | 2024 Returns | | Stable Value Fund | 3.07% | | Bond Index Fund | 1.30% | | US Large Cap Equity Index Fund | 25.00% | | US Small-Mid Cap Equity Index Fund | 16.95% | | International Equity Index Fund | 3.24% | | U.S. Bancorp Stock Fund | 15.47% |
Nonqualified deferred compensation
Amounts deferred under the Executive Deferred Compensation Plan are credited with earnings and investment gains and losses by assuming that deferred amounts were invested in one or more of the hypothetical investment options selected by the plan participant. Participants are generally allowed to change their investment elections at any time. The measurement funds are merely measuring tools to determine the amount by which account balances will be debited or credited to reflect deemed investment returns on deferred compensation. Although the plan administrator has established procedures permitting a participant to reallocate deferred amounts among these investment alternatives after the initial election to defer, the election to defer is irrevocable, and the deferred compensation will not be paid to the participant until his or her retirement or earlier termination of employment. At that time, the participant will receive, depending upon the payment choice and investment alternatives selected by the participant, payment of the amounts credited to the participant’s account under the plan in a lump-sum payment or in annual installments over 5, 10, 15 or 20 years. Payments are made ratably in cash from each of the investment alternatives in which the participant has a balance. If a participant dies before the entire deferred amount has been distributed, the undistributed portion will be paid to the participant’s beneficiary in a single lump sum. The benefits under the plan are otherwise not transferable.
Nonqualified deferred compensation
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Nonqualified deferred compensation
The following table summarizes information with respect to the participation of the NEOs in any defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified.
Nonqualified deferred compensation for fiscal year 2024
Nonqualified deferred compensation for fiscal year 2024
Nonqualified deferred compensation for fiscal year 2024
| Name | Executive contributions in last FY ($) | Registrant contributions in last FY ($) | Aggregate earnings in last FY ($)1 | Aggregate withdrawals/ distributions ($) | Aggregate balance at last FYE ($) | | Andrew Cecere | — | — | — | — | — | | John C. Stern | — | — | — | — | — | | Gunjan Kedia | 565,290 | 234,610 | 78,636 | — | 878,536(2) | | Terrance R. Dolan | — | — | — | — | — | | Shailesh M. Kotwal | 3,734,343 | 724,080 | 884,014 | — | 5,342,437(3) | | Timothy A. Welsh | 1,429,559 | 339,735 | 264,418 | — | 2,033,712(4) |
Nonqualified deferred compensation for fiscal year 2024
1.
Potential payments upon termination or change-in-control
Potential payments upon termination or change-in-control
Payments upon early retirement
Payments upon early retirement The benefit amounts for each NEO in the Pension benefits table above assume that each NEO will reach his or her retirement age. Due to the level of discount rates, the present value of early retirement benefits commencing immediately would exceed the values in the Pension benefits table by the following amounts: (i) Mr. Cecere, $1,276,201; (ii) Mr. Stern, $29,333; (iii) Ms. Kedia, $21,781; (iv) Mr. Dolan, $0; (v) Mr. Kotwal, $12,047; and (vi) Mr. Welsh, $12,957. The incremental value for Mr. Cecere includes one accelerated year of service for this SERP benefit upon reaching age 60, and his benefits are all now payable upon separation of service. As Messrs. Stern, Kotwal and Welsh and Ms. Kedia have not yet attained age 62, only their qualified retirement benefits can be accelerated.
Payments upon early retirement
| U.S. Bancorp 2025 Proxy Statement | 71 |
Potential payments upon disability, death or termination after a change-in-control
Potential payments upon disability, death or termination after a change-in-control
Potential payments upon disability, death or termination after a change-in-control
| Name | Type of payment | Annual cash disability payments ($) | Payments upon death ($)1 | Payments upon involuntary termination (other than for cause) after a change-In-control ($) | | Andrew Cecere | | | | | | | Base pay | 840,000 | — | — | | | Bonus | 2,957,640 | — | — | | | Unvested RSUs and PRSUs2 | — | 29,559,323 | 29,559,323 | | | Total | 3,797,640 | 29,559,323 | 29,559,323 | | John C. Stern | | | | | | | Base pay | 150,000 | — | — | | | Bonus | — | — | — | | | Unvested RSUs and PRSUs2 | — | 3,651,773 | 3,651,773 | | | Total | 150,000 | 3,651,773 | 3,651,773 | | Gunjan Kedia | | | | | | | Base pay | 150,000 | — | — | | | Bonus | — | — | — | | | Unvested RSUs and PRSUs2 | — | 13,025,161 | 13,025,161 | | | Total | 150,000 | 13,025,161 | 13,025,161 | | Terrance R. Dolan | | | | | | | Base pay | 150,000 | — | — | | | Bonus | — | — | — | | | Unvested RSUs and PRSUs2 | — | 12,928,736 | 12,928,736 | | | Total | 150,000 | 12,928,736 | 12,928,736 | | Shailesh M. Kotwal | | | | | | | Base Pay | 150,000 | — | — | | | Bonus | — | — | — | | | Unvested RSUs and PRSUs2 | — | 10,166,506 | 10,166,506 | | | Total | 150,000 | 10,166,506 | 10,166,506 |
Potential payments upon disability, death or termination after a change-in-control
1. See footnote 2 to the Pension benefits table for additional information about amounts payable to each NEO in the event of their death prior to reaching retirement age. Value determined by multiplying the number of units by $47.83, the closing market price of a share of our common stock on December 31, 2024. PRSU values reflect actual payout for PRSUs granted in 2022 and target payout for PRSUs granted in 2023 and 2024, as applicable.
Potential payments upon disability, death or termination after a change-in-control
| 72 | U.S. Bancorp 2025 Proxy Statement |
Pay ratio
Pay ratio
Pay versus performance
Pay versus performance As required by Section 953(a) of the Dodd-Frank Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain company financial performance metrics. For further information concerning our compensation philosophy and how we align executive compensation with company financial performance, refer to the “Compensation discussion and analysis”, beginning on page 42 of this proxy statement. The following table provides information showing the relationship during 2024, 2023, 2022, 2021 and 2020 between (1) executive compensation “actually paid” (as defined by SEC rules and further described below) to (a) our principal executive officer or PEO (also referred to as our CEO) and (b) our non-PEO named executive officers (also referred to below as other NEOs), on an average basis, and (2) the company’s financial performance. We have identified adjusted Return on Equity (Adjusted ROE) as our Company-Selected Measure that represents, in our view, the most important financial measure used to link compensation actually paid for 2024 to our performance. Adjusted ROE has a material impact on CEO and NEO compensation because it is used to calculate performance-based long-term incentive awards, as described in the “Compensation discussion and analysis” section above.
Pay versus performance
| Year | Summary compensation table total for PEO1 | Compensation actually paid to PEO1, 6 | Average summary compensation table total for non-PEO named executive officers2 | Average compensation actually paid to non-PEO named executive officers2, 6 | Value of initial fixed $100 investment based on: | | Net income (in millions)4 | Adjusted ROE5 | | | | | | | Total shareholder return | Peer Group total shareholder return3 | | | | 2024 | $19,339,327 | $22,927,793 | $7,711,887 | $8,245,789 | $100 | $106 | $6,299 | 12.47% | | 2023 | $22,916,957 | $19,239,627 | $5,566,902 | $5,873,734 | $87 | $97 | $5,429 | 14.95% | | 2022 | $16,157,514 | $14,217,402 | $5,859,631 | $5,004,351 | $83 | $98 | $5,825 | 15.9% | | 2021 | $19,166,276 | $21,662,399 | $5,810,359 | $7,353,727 | $102 | $124 | $7,963 | 13.3% | | 2020 | $16,752,753 | $8,176,718 | $4,747,969 | $2,926,730 | $82 | $90 | $4,959 | 13.0% |
Pay versus performance
1. Andrew Cecere served as our CEO for the entirety of 2024, 2023, 2022, 2021 and 2020. 2. The other NEOs included in this calculation for each year are: 2024 — John C. Stern, Gunjan Kedia, Terrance R. Dolan, Shailesh M. Kotwal and Timothy A. Welsh 2023 — Terrance R. Dolan, John C. Stern, Gunjan Kedia, Shailesh M. Kotwal, Timothy A. Welsh and Jeffry H. von Gillern 2022 — Terrance R. Dolan, Jeffry H. von Gillern, Gunjan Kedia and Timothy A. Welsh 2021 — Terrance R. Dolan, Jeffry H. von Gillern, Gunjan Kedia and Shailesh M. Kotwal 2020 — Terrance R. Dolan, Jeffry H. von Gillern, Gunjan Kedia and Timothy A. Welsh 3. For purposes of calculating the peer group TSR, the KBW Bank Index (Peer Group TSR) was used pursuant to Item 201(e) of Regulation S-K and is reflected in our 2024 Annual Report to Shareholders. In accordance with applicable SEC rules, the Peer Group TSR was calculated on a market capitalization weighted basis according to the respective issuers’ stock market capitalization at the beginning of each period for which a return is indicated. TSR for both the company and the peer group is based on an initial $100 investment, measured on a cumulative basis from the market close on December 31, 2019, through and including the end of the fiscal year for which TSR is being presented in the table. TSR calculations reflect reinvestment of dividends. 4. Net income attributable to U.S. Bancorp as reported in the company’s consolidated financial statements included in our Annual Report on Form 10-K for the years ended December 31, 2020, 2021, 2022, 2023, and 2024. 5. Adjusted ROE is a non-GAAP financial measure. As discussed on pages 50-51 in the “Compensation discussion and analysis” section, adjusted ROE is calculated by adjusting the company’s reported ROE results to exclude notable items that are unusual or related to acquisitions, such as merger-related charges, and adjustments related to the impact of the CECL accounting standard. The adjustments eliminate the volatility of the accounting standard related to changes in the allowance for credit losses, while including net charge-offs related to actual credit losses experienced. The dollar amounts reported in these columns represent the amounts of compensation actually paid to our PEO and average compensation actually paid to our other NEOs, as applicable. Compensation actually paid does not necessarily represent cash
Pay versus performance
| 74 | U.S. Bancorp 2025 Proxy Statement |
Pay versus performance
and/or equity value transferred to our PEO or any other NEO without restriction, but rather is a value calculated in accordance with applicable SEC rules. The additional table below sets forth each of the amounts required by applicable SEC rules to be deducted from and added to the amount of total compensation as reflected in the “Summary compensation table”, to calculate compensation actually paid. Equity award values are calculated in accordance with FASB ASC Topic 718 and PRSUs are earned based on specified performance-criteria. For purposes of calculating the fair value amounts for PRSUs in the table below, (i) total fair value as of year-end is based on the probable outcome of the PRSUs using data through year-end, and (ii) total fair value as of the vesting date is based on the number of shares actually earned based on performance. There were no other assumptions made in the valuation of equity awards, including RSUs and stock options, which differ materially from those disclosed as of the grant date of such equity awards.
Pay versus performance
| | 2024 | | | | PEO | Other NEOs average | | Summary compensation table total | $19,339,327 | $7,711,887 | | DEDUCT: Fair value of equity awards granted during covered fiscal year | $11,000,024 | $4,719,999 | | ADD: Year-end fair value of outstanding and unvested equity awards granted during the covered fiscal year | $12,988,895 | $4,706,122 | | ADD: Change in fair value of outstanding and unvested equity awards granted in prior fiscal years | $2,676,285 | $757,483 | | ADD: Fair value as of vesting date of equity awards granted and vested in covered fiscal year | $0 | $0 | | ADD: Change in fair value as of vesting date of equity awards granted in prior years that vested in the covered fiscal year | $(88,323) | $(26,241) | | DEDUCT: Year-end fair value for any equity awards granted in any prior fiscal year that failed to meet applicable vesting conditions during the covered fiscal year | $0 | $0 | | DEDUCT: Change in actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in Summary compensation table | $1,926,261 | $278,506 | | ADD: Pension service cost attributable to (i) services rendered during the covered fiscal year and (ii) any change in pension value attributable to plan amendments made in the covered fiscal year | $937,894 | $95,043 | | Compensation actually paid | $22,927,793 | $8,245,789 |
Analysis of the information presented in the “Pay versus performance” table
Analysis of the information presented in the “Pay versus performance” table While the company utilizes several performance measures to align executive compensation with company performance, not all of those company measures are presented in the “Pay versus performance” table set forth above. Moreover, the company generally seeks to incentivize positive long-term performance and, therefore, does not specifically align the company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v), the company is providing the following descriptions of the relationships between information presented in the “Pay versus performance” table.
Analysis of the information presented in the “Pay versus performance” table
| TSR: TSR has the most direct and significant impact on CEO and NEO compensation actually paid. This is primarily driven by our compensation program design, which is structured with a significant portion of compensation at-risk, through RSUs and PRSUs. At least 64% of CEO compensation and more than 56% of NEO compensation is directly impacted by TSR. The accompanying graphs show the relationship between (1) compensation actually paid to our CEO and the average of the compensation actually paid to our other NEOs and our cumulative TSR and (2) our cumulative TSR and peer group TSR, over the five fiscal years ending December 31, 2024. |
Analysis of the information presented in the “Pay versus performance” table
| 76 | U.S. Bancorp 2025 Proxy Statement |
Analysis of the information presented in the “Pay versus performance” table
| Net income: The accompanying graph shows the relationship between compensation actually paid to our CEO and the average of the compensation actually paid to our other NEOs and net income attributable to U.S. Bancorp over the five fiscal years ending December 31, 2024 as reported in the company’s consolidated financial statements. |
Analysis of the information presented in the “Pay versus performance” table
| Adjusted ROE*: Adjusted ROE is the company-selected measure of the return generated by the company on shareholders’ investment. As the core metric used to link company performance to compensation actually paid, adjusted ROE has a material impact on CEO and NEO compensation because it is used to calculate performance-based long-term incentive results. The company has currently and historically had high ROE performance relative to peer institutions in our financial peer group. The accompanying graph shows the relationship between compensation actually paid to our CEO and the average of the compensation actually paid to our other NEOs and our adjusted ROE over the five fiscal years ending December 31, 2024. * Non-GAAP financial measure. See footnote 5 above for information on the calculation of Adjusted ROE. |
Analysis of the information presented in the “Pay versus performance” table
| U.S. Bancorp 2025 Proxy Statement | 77 |
Director compensation for fiscal year 2024
Director compensation for fiscal year 2024 The following table shows the compensation of the individuals who served as non-employee members of our Board of Directors during any part of fiscal year 2024.
Director compensation for fiscal year 2024
| Name1 | Fees earned or paid in cash ($) | Stock awards ($)2 | All other compensation ($) | Total ($) | | Warner L. Baxter | 149,500 | 185,013 | — | 334,513 | | Dorothy Bridges | 153,000 | 185,013 | — | 338,013 | | Elizabeth L. Buse | 147,500 | 185,013 | — | 332,513 | | Alan B. Colberg | 127,500 | 185,013 | — | 312,513 | | Kimberly N. Ellison-Taylor | 123,000 | 185,013 | — | 308,013 | | Aleem Gillani | 118,167 | 154,156 | — | 272,323 | | Kimberly J. Harris | 139,000 | 185,013 | — | 324,013 | | Roland A. Hernandez | 159,000(3) | 185,013 | — | 344,013 | | Richard P. McKenney | 133,500(3) | 185,013 | 10,000(4) | 328,513 | | Yusuf I. Mehdi | 154,000 | 185,013 | — | 339,013 | | Loretta E. Reynolds | 133,500 | 185,013 | — | 318,513 | | John P. Wiehoff | 152,500(3) | 185,013 | — | 337,513 | | Scott W. Wine | 134,500(3) | 185,013 | — | 319,513 |
Director compensation for fiscal year 2024
1. Andrew Cecere, our Chairman and Chief Executive Officer, did not receive any compensation for his service as a director. His compensation is set forth in the Summary Compensation Table above. 2. The amounts in this column are calculated based on the fair market value of our common stock on the date the grant was made in accordance with FASB ASC Topic 718. Each non-employee director elected at the 2024 annual meeting received a grant of 4,691 restricted stock units on April 18, 2024, with a grant date fair value of $185,013. Mr. Gillani joined the Board in July 2024 and received a prorated award of 3,561 restricted stock units on July 16, 2024, with a grant date fair value of $154,156, for his partial service during the April 2024 — April 2025 term. No non-employee director held any stock options as of December 31, 2024. The non-employee directors held restricted stock units as of December 31, 2024, as follows:
Director compensation for fiscal year 2024
| Name | Restricted stock units | | Mr. Baxter | 38,785 | | Ms. Bridges | 27,127 | | Ms. Buse | 28,426 | | Mr. Colberg | 11,461 | | Ms. Ellison-Taylor | 17,381 | | Mr. Gillani | 3,599 | | Ms. Harris | 48,003 |
Director compensation for fiscal year 2024
| Name | Restricted stock units | | Mr. Hernandez | 60,249 | | Mr. McKenney | 30,549 | | Mr. Mehdi | 28,426 | | Ms. Reynolds | 12,275 | | Mr. Wiehoff | 21,983 | | Mr. Wine | 45,206 |
Director compensation for fiscal year 2024
3. Messrs. Hernandez, McKenney, Wiehoff, and Wine chose to defer their cash fees under the Director Deferred Compensation Plan. Represents matching contributions under our charitable matching gifts program, which is available to all of our directors and provides matching charitable donations of up to $5,000 per year to qualified non-profit organizations, schools and educational institutions. Mr. McKenney made charitable contributions in each of 2023 and 2024 for which matching contribution amounts were paid in 2024.
Director compensation for fiscal year 2024
| U.S. Bancorp 2025 Proxy Statement | 79 |
Directors and executive officers
Directors and executive officers
Directors and executive officers
| Name of beneficial owner | Outstanding shares of common stock1 | Options exercisable within 60 days of February 3, 2025 | Restricted stock units2 | Deferred compensation3 | Total | Percent of common stock | | Warner L. Baxter | — | — | 39,164 | — | 39,164 | * | | Dorothy Bridges | — | — | 27,393 | — | 27,393 | * | | Elizabeth J. Buse | — | — | 28,705 | — | 28,705 | * | | Andrew Cecere | 1,055,380 | 344,740 | 223,581 | — | 1,623,701 | * | | Alan B. Colberg4 | 10,050 | — | 11,573 | — | 21,623 | * | | Terrance R. Dolan | 133,695 | 52,829 | 95,355 | — | 281,879 | * | | Kimberly N. Ellison-Taylor | — | — | 17,551 | — | 17,551 | * | | Aleem Gillani | 10,000 | — | 3,634 | — | 13,634 | * | | Kimberly J. Harris | — | — | 48,473 | — | 48,473 | * | | Roland A. Hernandez | — | — | 60,839 | 21,617 | 82,456 | * | | Gunjan Kedia | 141,513 | 27,267 | 82,130 | — | 250,910 | * | | Shailesh M. Kotwal5 | 68,366 | 64,722 | 70,676 | — | 203,764 | * | | Richard P. McKenney | 20,000 | — | 30,848 | 26,683 | 77,531 | * | | Yusuf I. Mehdi | — | — | 28,705 | — | 28,705 | * | | Loretta E. Reynolds | — | — | 12,395 | — | 12,395 | * | | John C. Stern | 33,103 | — | 16,089 | — | 49,192 | * | | Timothy A. Welsh6 | 94,657 | — | 77,396 | — | 172,053 | * | | John P. Wiehoff | — | — | 22,199 | 18,875 | 41,074 | * | | Scott W. Wine | 30,838 | — | 45,649 | 37,543 | 114,030 | * | | All directors and current executive officers as a group (26 persons)4 | 1,842,423 | 516,765 | 1,047,340 | 104,718 | 3,511,246 | * |
Directors and executive officers
* Indicates less than 1%. 1. Common stock Includes the following shares beneficially owned by the indicated director or executive officer: ▶ for Mr. Cecere, includes 341 shares held by Mr. Cecere’s spouse, as to which Mr. Cecere has no voting or investment power; and 14,502 shares held in the U.S. Bank 401(k) Savings Plan; ▶ for Mr. Dolan, includes 8,063 shares held in the U.S. Bank 401(k) Savings Plan; for Mr. Welsh, includes 4,232 shares held in the U.S. Bank 401(k) Savings Plan;
Directors and executive officers
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Directors and executive officers
for Mr. Wine, includes 400 shares held in trusts of which Mr. Wine is trustee; and ▶ for all directors and executive officers as a group, includes 27,718 shares held in the U.S. Bank 401(k) Savings Plan for the accounts of certain executive officers. 2. Restricted stock units RSUs (including PRSUs earned based on the applicable performance criteria over the three-year performance period held by our executive officers) are distributable in an equivalent number of shares of our common stock upon settlement. RSUs granted to our officers are settled as they vest, and RSUs granted to our directors are immediately vested but do not settle until the director ceases to serve on the Board. The number of RSUs and PRSUs that are currently vested, or that vest within 60 days of February 3, 2025, is included in this column. 3. Deferred compensation Certain of our directors have deferred cash compensation under our deferred compensation plans. Some of these deferred amounts will be paid out in shares of our common stock upon the director’s termination of service with U.S. Bancorp. The directors have no voting or investment power as to these shares. The number of shares to which the directors would have been entitled had their service with U.S. Bancorp been terminated as of February 3, 2025, is included in this column. 4. Depositary Shares As of February 3, 2025, Mr. Colberg held 5,000 depositary shares, each representing a 1/25th interest in a share of U.S. Bancorp Series N Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock. As of February 3, 2025, Mr. Stephen Philipson held 26 depositary shares, each representing a 1/1000th interest in a share of U.S. Bancorp Series M Non-Cumulative Perpetual Preferred Stock. Mr. Colberg and Mr. Philipson are the only directors or executives who own depositary shares representing the company’s preferred stock. 5. Mr. Kotwal served as Vice Chair, Payment Services until February 2, 2025; and following that date he serves in a non-executive officer capacity as an advisor supporting the leadership transition of the Payments business through June 30, 2025. 6. Mr. Welsh served as the company’s Vice Chair, Consumer and Business Banking, until July 31, 2024; and following that date he served in a non-executive officer capacity as an advisor to the President until October 4, 2024.

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