DEF 14A of Capital One Financial Corp
Filed Mar 20, 2018 · FY20170001193125-18-089172
Highlights of Our 2017 Compensation Programs
| ∎ | All Equity Awards Contain Performance and Recovery Provisions. All equity awards contain performance and recovery provisions that are designed to further enhance alignment between pay and performance and to balance risk by: (i) reducing performance share award values at vesting if the Company does not achieve positive Adjusted ROA (Adjusted ROTCE for performance shares granted in 2018); (ii) utilizing performance thresholds to determine the amount of equity delivered |
Components of Our 2017 Compensation Programs
Components of Our 2017 Compensation Programs The CEO’s compensation for the 2017 performance year was composed of equity awards designed to provide the CEO with an incentive to focus on long-term performance and the opportunity for a year-end incentive award based on the Compensation Committee’s evaluation of the Company’s performance and the CEO’s contributions to that performance. All of the CEO’s compensation is subject to a three-year deferred vesting or payout schedule. See “Chief Executive Officer Compensation” beginning on page 48 for a description of the compensation paid to our CEO. NEO compensation for the 2017 performance year was composed of a mix of cash and equity-based compensation consisting of: cash salary and RSU salary, determined at the beginning of the performance year; and cash-settled RSUs and long-term incentive awards, determined following the end of the performance year based on the Compensation Committee’s evaluation of Company and individual performance during the past year. The long-term incentive awards granted for the 2017 performance year are equity-based and consisted of performance shares (25% of target compensation) and stock-settled RSUs (25% of target compensation). See “NEO Compensation” beginning on page 58 for a description of compensation to the named executive officers other than the CEO. The charts below show the elements of compensation as an approximate percentage of the CEO’s and the NEOs’ total target compensation.
Say on Pay and Response to Stockholder Feedback
| Capital One’s Voluntary Non-Qualified Deferred Compensation Programs | 82 | | 2017 Non-Qualified Deferred Compensation Table | 83 | | Potential Payments Upon Termination or Change of Control | 84 | | 2017 Potential Payments and Benefits Upon Termination or Change of Control Table | 88 | | Estimated Ratio of CEO Compensation to Median Employee Compensation | 89 | | Section VI - Equity Compensation Plans | 91 | | Equity Compensation Plan Information | 91 | | 1999 Directors Plan | 91 | | Section VII - Compensation Committee Report | 93 | | Section VIII - Audit Committee Report | 94 | | Section IX - Election of Directors (Item 1 on Proxy Card) | 95 | | Section X - Ratification of Selection of Independent Auditors (Item 2 on Proxy Card) | 96 | | Section XI - Advisory Approval of Capital One’s 2017 Named Executive Officer Compensation (Item 3 on Proxy Card) | 98 | | Section XII - Ratification of 25% Ownership Threshold for Stockholders to Request a Special Meeting of Stockholders (Item 4 on Proxy Card) | 99 | | Section XIII - Other Business | 102 | | Other Business | 102 | | Annual Report to Stockholders | 102 | | Stockholder Proposals for 2019 Annual Stockholder Meeting | 102 | | Section XIV - Frequently Asked Questions | 103 | | Appendix A - Special Meeting Excerpt from Capital One’s Certificate of Incorporation | 107 |
Our Director Nominees
Our Director Nominees
Our Director Nominees
| Name | Age | Occupation | Director Since | Independent | Other Public Boards | | Richard D. Fairbank | 67 | Chairman, CEO and President, Capital One Financial Corporation | 1994 | No | 0 | | Aparna Chennapragada | 41 | Vice President of Product Management, AR & VR, Google | 2018 | ✓ | 0 | | Ann Fritz Hackett | 64 | Partner and Co-Founder, Personal Pathways, LLC | 2004 | ✓ | 1 | | Lewis Hay, III | 62 | Former Chairman, Chief Executive Officer and President, NextEra Energy, Inc. | 2003 | ✓ | 2 | | Benjamin P. Jenkins, III | 73 | Former Senior Advisor, Managing Director and Vice Chairman for Retail Banking, Morgan Stanley & Co. | 2013 | ✓ | 0 | | Peter Thomas Killalea | 50 | Owner and President, Aoinle, LLC | 2016 | ✓ | 2 | | Pierre E. Leroy | 69 | Managing Partner, Aspiture, LLC | 2005 | ✓ | 0 | | Peter E. Raskind | 61 | Former Owner, JMB Consulting, LLC | 2012 | ✓ | 0 | | Mayo A. Shattuck III | 63 | Chairman, Exelon Corporation | 2003 | ✓ | 3 | | Bradford H. Warner | 66 | Former President of Premier and Small Business Banking, Bank of America Corporation | 2008 | ✓ | 0 | | Catherine G. West | 58 | Former Special Advisor, Promontory Financial Group | 2013 | ✓ | 0 |
Our Director Nominees
| 12 | CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT |
Our Director Nominees
Our director nominees have specific experiences that, in the aggregate, meet an articulated set of director skills established by the Governance and Nominating Committee and align with the Company’s long-term strategy and operational objectives, including:
Our Director Nominees
| Strategy | Experience setting a long-term corporate vision or direction, developing desirable products and customer segments, assessing geographies in which to operate, and evaluating competitive positioning | | Digital/Technology | Leadership and understanding of technology, digital platforms and new media, cyber risk, and data analytics | | Retail/Commercial Banking | Retail and/or commercial banking industry experience at an executive level | | Risk Management/Compliance | Significant understanding with respect to the identification, assessment and oversight of risk management programs and practices | | Public Company Senior Executive Management | Experience as a chief executive officer or other senior executive at a public company | | Public Accounting/Financial Reporting | Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements | | Financial Services | Leadership experience as an executive or board member in the financial services industry | | Compensation/Human Resources | Understanding of the issues involved with executive compensation, succession planning, human resource management, and talent management and development | | Public Company Board Service | Experience serving as a director on a large public company board |
Our Director Nominees
Nine of our director nominees have significant understanding of technology platforms and systems and their associated risks, two have experience with digital consumer product development, six have held senior executive responsibilities at large banks, seven could qualify as “audit committee financial experts” under the relevant New York Stock Exchange (“NYSE”) standards, and five serve or have served as chief executive officers. Our Board has significant experience in strategy development, risk management and the financial services industry through extensive careers in executive leadership positions and consulting engagements. In addition, a majority of our director nominees have public company board experience. The Governance and Nominating Committee and the Board regularly review the Board’s membership in light of Capital One’s business model and strategic goals and objectives, the regulatory environment and financial market conditions, and consider whether the Board continues to possess the skills and experience to oversee the Company in achieving these goals, and may seek additional directors as a result of its considerations. We believe our director nominees collectively possess the appropriate combination of skills and qualifications, independence, knowledge of Capital One and its industry and business acumen that enables the Board to operate in an engaged and effective manner.
What We Look For in Director Nominees
What We Look For in Director Nominees The evaluation and selection of director nominees is a key aspect of the Governance and Nominating Committee’s regular evaluation of the composition of and criteria for membership on the Board. When considering director nominees, including incumbent directors eligible for re-election, nominees to fill vacancies on the Board and nominees recommended by stockholders, the Governance and Nominating Committee is focused on the objective of developing a Board composed of directors that meet the criteria set forth below.
Director Independence
Director Independence Except for our CEO, who is the Company’s founder, the Board has affirmatively determined that the other members of our Board are independent under Capital One’s Director Independence Standards, which have been adopted by the Board as part of Capital One’s Corporate Governance Guidelines. The Board has concluded this based on a thorough assessment of whether each of its non-management members is “independent” under these standards. These standards reflect the director independence requirements set forth in the listing standards of the NYSE and other applicable legal and regulatory rules, and also describe certain categorical relationships that the Board has determined to be immaterial for purposes of determining director independence. The categorical relationships the Board has deemed immaterial for purposes of determining director independence are: (i) relationships between Capital One and an entity where the director serves solely as non-management director; (ii) transactions between Capital One and a director or a director’s immediate family (or their primary business affiliations) that fall below the numerical thresholds in the NYSE listing standards (or do not otherwise preclude independence under those standards), and that are ordinary course, on arm’s-length market terms, and, in the case of extensions of credit, followed usual underwriting procedures, contain no other unfavorable features and are in compliance with applicable legal and regulatory rules; and (iii) discretionary contributions to not-for-profit organizations, foundations, or universities in which a director serves as an executive officer that in any of the last three fiscal years do not exceed the greater of $1 million or 2% of the organization’s consolidated gross revenues. The Board has determined that each of Ms. Chennapragada, Ms. Hackett, Mr. Hay, Mr. Jenkins, Mr. Killalea, Mr. Leroy, Mr. Raskind, Mr. Shattuck, Mr. Warner and Ms. West is independent under these standards. The Board also determined that former director Patrick W. Gross, who retired from the Board on May 4, 2017, was independent under these standards during the period he served on the Board. In making these determinations, the Governance and Nominating Committee and the Board reviewed certain information obtained from non-management directors’ responses to a questionnaire asking about their relationships with Capital One, and those of their immediate family members and primary business or charitable affiliations and other potential conflicts of interest, as well as certain information obtained through internal diligence conducted on Capital One’s businesses related to transactions, relationships or arrangements between Capital One and a non-management director or their immediate family members, primary business or charitable affiliations. Following this review, the Board determined that the relationships or transactions complied with the Corporate Governance Guidelines and the related NYSE standards.
Director Independence
| CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT | 15 |
Director Independence
| Biographies of Director Nominees |
Director Independence
| Richard D. Fairbank Chairman, Chief Executive Officer and President, Capital One Financial Corporation Director Since: 1994 Age: 67 | Capital One Committees: ∎ None Capital One Companies: ∎ Capital One Bank (USA), National Association (Chair) ∎ Capital One, National Association (Chair) Additional Public Directorships (current): ∎ None Mr. Fairbank is founder, Chairman, and Chief Executive Officer of Capital One Financial Corporation. As an innovator and entrepreneurial leader, Mr. Fairbank has grown Capital One from a start-up to one of the ten largest banks in America and 100 largest companies in the country as ranked by Fortune Magazine. Mr. Fairbank has been the CEO since the Company’s Initial Public Offering in November 1994 and has served as the Chairman and CEO since February 1995. He has driven strong organic business growth and executed a series of strategic acquisitions across retail and direct banking, credit cards, auto lending, and technology. Prior to Capital One, Mr. Fairbank was Vice President and head of the banking practice at Strategic Planning Associates, Inc. (now Mercer, a global consulting subsidiary of Marsh & McLennan Companies). Mr. Fairbank served on MasterCard International’s Global Board of Directors from February 2004 until May 2006. Capital One is regularly cited by Fortune Magazine as a “Best Place to Work” (#17 in 2018) and in 2016 the Company was ranked #1 on InformationWeek’s “Elite 100.” Skills and Qualifications: Since the founding of the Company, Mr. Fairbank has been responsible for overseeing both the Company’s strategic direction as well as management of Capital One’s day-to-day operations. Mr. Fairbank has extensive experience in financial services and had led the development, growth, and transformation of the Company’s business capabilities, including technology, risk management, brand, customer experience, and talent development and diversity. Mr. Fairbank holds an MBA from the Stanford Graduate School of Business and a bachelor’s degree in economics from Stanford University. This combination of experiences and expertise provide Mr. Fairbank the ability to provide strong leadership and insight to the Board of Directors. |
Director Independence
| Aparna Chennapragada Vice President of Product Management, AR & VR, Google Director Since: 2018 (new nominee) Age: 41 | Capital One Committees: ∎ None Capital One Companies: ∎ None Additional Public Directorships (current): ∎ None Ms. Chennapragada, a computer scientist and product executive trained at IIT and MIT, has more than 15 years of experience in leading teams, driving strategy, and developing successful flagship products. Ms. Chennapragada has been Vice President of Product Management at Google, a multinational technology company, since October 2017, where she currently oversees product management for new product areas in augmented reality and virtual reality. Prior to her current role, Ms. Chennapragada was a Senior Director and Technical Assistant to the CEO at Google from May 2016 to September 2017, where she helped drive various company-wide product efforts. She was a Director and Group Product Manager on Google Now from March 2013 to April 2016. From September 2010 to February 2013, Ms. Chennapragada was a Senior Product Manager on Google Search, and from July 2008 to September 2010, Ms. Chennapragada led the development of new algorithmic features for YouTube and Google. Prior to joining Google, Ms. Chennapragada served in various roles at Akamai Technologies, Inc. from September 1999 to June 2008. Skills and Qualifications: Ms. Chennapragada is an accomplished executive and has experience in technology innovation and development, leading change initiatives, product development, strategy, machine learning, and talent management. She brings significant insights on mobile, artificial intelligence, and technology’s transformational impact on business and consumers. This combination of skills provides the Board of Directors with valuable insight on these and other matters. |
Director Independence
| 16 | CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT |
Director Independence
| Ann Fritz Hackett Partner and Co-Founder, Personal Pathways, LLC Lead Independent Director Director Since: 2004 Age: 64 | Capital One Committees: ∎ Compensation Committee ∎ Governance and Nominating Committee (Chair) ∎ Risk Committee Capital One Companies: ∎ Capital One, National Association Additional Public Directorships (current): ∎ Fortune Brands Home & Security, Inc. Ms. Hackett is a partner and co-founder of Personal Pathways, LLC. The company’s flagship product is a web-based enterprise collaboration insights platform. Prior to her role at Personal Pathways, she served as the President of Horizon Consulting Group, LLC since founding the company in 1996, providing strategic, organizational and human resources advice to clients worldwide. She has worked with boards of directors, chief executive officers and senior executives to identify strategic opportunities and execute solutions during periods of business and financial challenges and transformation. Prior to Horizon Consulting, Ms. Hackett was Vice President and Partner of a leading national strategy consulting firm where she served on the Management Committee and, among other strategy consulting assignments, led Human Resources and developed her expertise in managing cultural change, creating performance management processes and a performance-based culture, nurturing leadership talent and planning for executive succession. Ms. Hackett is also a member of the Tapestry Networks’ Lead Director Network, a select group of lead directors who collaborate on matters regarding board leadership. She also served as a director of Beam, Inc. (formerly Fortune Brands, Inc.) from December 2007 until April 2014. Skills and Qualifications: Ms. Hackett has experience in strategy, technology development, leading change initiatives, talent management and succession planning and in creating performance management processes and performance-based compensation programs. She also has experience in corporate governance and risk matters as a result of her participation with public company boards of directors and related governance committees, non-profit boards and consulting engagements. This combination of skills provides the Board of Directors with valuable insight on these and other matters. |
Director Independence
| Lewis Hay, III Former Chairman, Chief Executive Officer and President, NextEra Energy, Inc. Director Since: 2003 Age: 62 | Capital One Committees: ∎ Compensation Committee ∎ Governance and Nominating Committee Capital One Companies: ∎ Capital One, National Association Additional Public Directorships (current): ∎ Harris Corporation ∎ Anthem, Inc. (formerly WellPoint, Inc.) Mr. Hay served in a variety of executive positions at NextEra Energy, Inc. (“NextEra”) (formerly FPL Group, Inc.), including Chief Executive Officer (2001-2012), Chairman (2002-2012) and President (2001-2006). NextEra is one of the nation’s leading electricity-related services companies and the largest renewable energy generator in North America. Mr. Hay served as Executive Chairman of NextEra from July 2012 until he retired in December 2013 and as a director of NextEra from June 2001 through December 2013. While at NextEra, he also served as Chief Executive Officer of Florida Power & Light Company from January 2002 to July 2008. He joined NextEra Energy in 1999 as Vice President, Finance and Chief Financial Officer and served as President of NextEra Energy Resources, LLC (formerly FPL Energy, LLC) from March 2000 until December 2001. He currently serves as an Operating Advisor for Clayton, Dubilier & Rice, LLC, a private equity investment firm. Mr. Hay is a former chairman of both the Edison Electric Institute, the association of U.S. shareholder-owned electric companies, and the Institute of Nuclear Power Operations. Mr. Hay also served as Chair of the Electricity Subsector Coordinating Council, an organization that coordinated government and electricity industry cyber security initiatives, as well as on President Obama’s Council on Jobs and Competitiveness. Skills and Qualifications: Mr. Hay has extensive knowledge of the complex strategic, operational, management, regulatory, financial and governance issues faced by a large public company. His background in leading finance and accounting, treasury, credit, investor relations, mergers and acquisitions and information systems functions, as well as his understanding of enterprise risk management, executive compensation and public company governance, provides the Board of Directors with valuable insight on these and other matters. |
Director Independence
| CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT | 17 |
Director Independence
| Benjamin P. Jenkins, III Former Senior Advisor, Managing Director and Vice Chairman for Retail Banking, Morgan Stanley & Co. Director Since: 2013 Age: 73 | Capital One Committees: ∎ Audit Committee ∎ Compensation Committee ∎ Risk Committee Capital One Companies: ∎ Capital One, National Association Additional Public Directorships (current): ∎ None Mr. Jenkins served as Senior Advisor, Managing Director, and Vice Chairman for Retail Banking at Morgan Stanley & Co., a financial services firm, from January 2009 to January 2011. Prior to that, he had a 38-year career with Wachovia Corporation (now Wells Fargo & Company), a financial services company, where he was Vice Chairman and President of the General Banking Group. He is credited with advancing the profitability of the General Bank through improvements in customer service and the reduction of customer attrition to industry-leading levels. He and his team were instrumental in the integration of the First Union/Wachovia and Wachovia/SouthTrust mergers, and Mr. Jenkins led the successful expansion of Wachovia’s banking network. He also previously served on the boards of Visa USA and Visa International. Skills and Qualifications: Mr. Jenkins’ experience in corporate banking, banking operations, investment banking, acquisition integration, and management of customer relationships brings valuable insight to the Board of Directors in overseeing, among other areas, matters critical to Capital One’s banking business. |
Director Independence
| Peter Thomas Killalea Owner and President, Aoinle, LLC Director Since: 2016 Age: 50 | Capital One Committees: ∎ Compensation Committee ∎ Risk Committee Capital One Companies: ∎ Capital One, National Association Additional Public Directorships (current): ∎ MongoDB, Inc. ∎ Akamai Technologies, Inc. Mr. Killalea has been an advisor to private technology-driven companies since November 2014 and is the Owner and President of Aoinle, LLC, a consulting firm. From May 1998 to November 2014, Mr. Killalea served in various leadership roles at Amazon.com, Inc., most recently as its Vice President of Technology for the Kindle Content Ecosystem from 2008 to November 2014. He served as its Vice President of Infrastructure and Distributed Systems from 2003 to 2008 and prior to that as Chief Information Security Officer and Vice President of Security. He led the infrastructure and distributed systems team, which later became a key part of the Amazon Web Services platform. He also led the product development and engineering teams for the Kindle Content Ecosystem. Mr. Killalea serves on the editorial board of ACM Queue (Association for Computing Machinery). He was appointed to the board of Akamai Technologies, Inc. in March 2018, and has served on the board of MongoDB, Inc. since December 2015. He served on the board of Xoom Corporation (acquired by PayPal Inc.) from March 2015 to November 2015. Skills and Qualifications: Mr. Killalea’s product, technology, and security experience in the technology industry, including his experience advising technology companies in various stages of growth and his various leadership roles, including as Chief Information Security Officer, at Amazon.com, Inc., bring valuable insight to the Board of Directors on these and other matters. |
Director Independence
| 18 | CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT |
Director Independence
| Pierre E. Leroy Managing Partner, Aspiture, LLC Director Since: 2005 Age: 69 | Capital One Committees: ∎ Audit Committee ∎ Compensation Committee Capital One Companies: ∎ Capital One Bank (USA), National Association Additional Public Directorships (current): ∎ None Mr. Leroy established an advisory and private equity firm in April 2015, Aspiture, LLC (“Aspiture”), which invests primarily in digital companies offering unique customer solutions. Mr. Leroy served as Executive Chairman from March 2012 and Chief Executive Officer from July 2012 until June 2013 of Vigilant Solutions, Inc. (formerly Vigilant Video, Inc.), an industry-leading pioneer of innovative intelligence solutions that help law enforcement protect officers, families and communities. Mr. Leroy retired in 2005 from Deere & Company as President of both the Worldwide Construction & Forestry Division and the Global Parts Division. Deere & Company is a world leader in providing advanced products and services for agriculture, forestry, construction, lawn and turf care, landscaping and irrigation, and also provides financial services worldwide and manufactures and markets engines used in heavy equipment. During his professional career with Deere & Company, Mr. Leroy served in a number of positions in Finance, including Treasurer, Vice-President and Treasurer, and Senior Vice-President and Chief Financial Officer. Mr. Leroy also served as a director of United Rentals, Inc. from April 2012 to May 2015, RSC Holdings Inc. and RSC Equipment Rental from May 2008 to April 2012 (when RSC was acquired by United Rentals), and Beam, Inc. (formerly Fortune Brands, Inc.) from September 2003 to February 2012. Skills and Qualifications: Mr. Leroy’s experience in capital markets and asset-liability management, and his experience as CEO and Executive Chairman of a digital analytic software company and managing partner of an advisory and consulting business, in addition to his experience in leading and managing large complex international marketing, engineering and manufacturing organizations and serving on other public company boards, provides the Board of Directors with valuable insight on these and other matters. |
Director Independence
| Peter E. Raskind Former Owner, JMB Consulting, LLC Director Since: 2012 Age: 61 | Capital One Committees: ∎ Governance and Nominating Committee ∎ Risk Committee (Chair) Capital One Companies: ∎ Capital One Bank (USA), National Association Additional Public Directorships (current): ∎ None Until its merger with PNC Financial Services Group in December 2008, Mr. Raskind served as Chairman, President and Chief Executive Officer of National City Corporation, one of the largest banks in the United States. Through an extensive banking career, Mr. Raskind has served in a number of leadership roles and held positions of successively greater responsibility in a broad range of consumer and commercial banking disciplines, including cash management services, corporate finance, international banking, corporate trust, retail and small business banking, operations and strategic planning. Mr. Raskind served as a director of United Community Banks, Inc. from May 2011 to January 2012 and Visa USA and Visa International. He also served on the board of directors of the Consumer Bankers Association, was a member of the Financial Services Roundtable, and served on the executive committee of the National Automated Clearing House Association. In addition, until 2017, Mr. Raskind was the owner of JMB Consulting, LLC, which he established in February 2009 to provide consulting services to financial services firms and investors. In 2011, he served as Interim Chief Executive Officer of the Cleveland Metropolitan School District, and in 2010, he served as Interim Chief Executive Officer of the Cleveland-Cuyahoga County Port Authority. Skills and Qualifications: Mr. Raskind is experienced in corporate banking, retail banking, wealth management/trust, mortgage, operations, technology, strategy, product management, asset/liability management, risk management and acquisition integration from his extensive career in banking. He provides the Board of Directors with valuable insight on these and other matters. |
Director Independence
| CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT | 19 |
Director Independence
| Mayo A. Shattuck III Chairman, Exelon Corporation Director Since: 2003 Age: 63 | Capital One Committees: ∎ Compensation Committee (Chair) ∎ Governance and Nominating Committee Capital One Companies: ∎ Capital One, National Association Additional Public Directorships (current): ∎ Gap, Inc. ∎ Alarm.com ∎ Exelon Corporation Mr. Shattuck is Chairman of the Board of Chicago-based Exelon Corporation (“Exelon”), the nation’s largest competitive energy provider and commercial nuclear plant operator. From March 2012 through February 2013, he served as Executive Chairman of the Board of Exelon. Prior to joining Exelon, he was Chairman, President and Chief Executive Officer of Constellation Energy Group, a leading supplier of electricity to large commercial and industrial customers, a position he held from 2001 to 2012. Mr. Shattuck was previously at Deutsche Bank, where he served as Chairman of the Board of Deutsche Banc Alex. Brown and, during his tenure, served as Global Head of Investment Banking and Global Head of Private Banking. From 1997 to 1999, Mr. Shattuck served as Vice Chairman of Bankers Trust Corporation, which merged with Deutsche Bank in 1999. From 1991 to 1997, Mr. Shattuck was President and Chief Operating Officer and a director of Alex. Brown & Sons, a major investment bank, which merged with Bankers Trust in 1997. Mr. Shattuck is also Vice Chairman of Johns Hopkins Medicine, Trustee of Johns Hopkins University and former Chairman of the Institute of Nuclear Power Operators. Skills and Qualifications: Mr. Shattuck’s experience in global corporate finance and lending, corporate strategy, capital markets, risk management, executive compensation and private banking, as well as his experience in leading two large, publicly-held companies and serving on other public company boards, provides the Board of Directors with valuable insight on these and other matters. |
Director Independence
| Bradford H. Warner Former President of Premier and Small Business Banking, Bank of America Corporation Director Since: 2008 Age: 66 | Capital One Committees: ∎ Audit Committee (Chair) ∎ Risk Committee Capital One Companies: ∎ Capital One Bank (USA), National Association Additional Public Directorships (current): ∎ None Mr. Warner served in a variety of executive positions at BankBoston, FleetBoston and Bank of America from 1975 until his retirement in 2004. These positions included President of Premier and Small Business Banking, Executive Vice President of Personal Financial Services, and Vice Chairman of Regional Bank. Throughout his banking career, Mr. Warner served in leadership roles for many of the major business lines and functional disciplines that constitute commercial banking, including leadership of retail and branch banking, consumer lending (credit cards, mortgage and home equity), student lending and small business; various corporate banking functions, including community banking and capital markets businesses, such as underwriting, trading and sales of domestic and international fixed income securities, foreign exchange and derivatives; international banking businesses in Asia, northern Latin America and Mexico; and several investment-related businesses, including private banking, asset management and brokerage. He also served on the most senior management policy and governance committees at BankBoston, FleetBoston and Bank of America. Skills and Qualifications: Mr. Warner’s experience in a broad range of commercial, consumer, investment and international banking leadership roles, as well as his experience in corporate banking functions, customer relationships, corporate culture change management, enterprise risk management and technology, brings valuable insight to the Board of Directors in overseeing, among other matters, a broad range of matters critical to Capital One’s banking business. |
Director Independence
| 20 | CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT |
Director Independence
| Catherine G. West Former Special Advisor, Promontory Financial Group Director Since: 2013 Age: 58 | Capital One Committees: ∎ Audit Committee ∎ Risk Committee Capital One Companies: ∎ Capital One Bank (USA), National Association Additional Public Directorships (current): ∎ None Ms. West served as a Special Advisor to Promontory Financial Group, a financial services consulting firm, from May 2013 until her departure in October 2013, and as Managing Director from April 2012 until April 2013. From March 2011 to April 2012, Ms. West was the Associate Director and Chief Operating Officer of the Consumer Financial Protection Bureau (“CFPB”), a federal agency tasked with regulating U.S. consumer protection with regard to financial services and products, where she led the start-up of the agency’s infrastructure. While at the CFPB, Ms. West also played an integral part in implementing a Consumer Response unit designed to solicit views from consumers regarding their experiences with financial institutions and leveraged those views to effect policy change. She was previously the Chief Operating Officer of J.C. Penney from August 2006 to December 2006. From March 2000 to July 2006, Ms. West was an executive officer at Capital One Financial Corporation where she served in roles that included President of the U.S. Card business and Executive Vice President of U.S. Consumer Operations. Skills and Qualifications: Ms. West has a multifaceted background in financial services with more than 25 years of experience in financial services operations, regulatory matters, technology platform conversions, process automation and innovation, and strategy development. She has experience in leveraged buyouts, initial public offerings, and mergers and acquisitions, and has a keen understanding of both business strategy and the regulatory perspective. Ms. West provides the Board with valuable insight on these and other matters. |
Director Independence
| Board Leadership Structure |
Director Independence
Our Board has carefully considered the critical issue of Board leadership in the context of Capital One’s specific circumstances, culture, strategic objectives and challenges. The diverse backgrounds and experiences of our directors provide the Board with broad perspectives from which to determine the leadership structure best suited for Capital One and the long-term interests of Capital One’s stockholders and other stakeholders. We believe that our existing Board leadership structure, with Mr. Fairbank acting as CEO and Chairman of the Board, provides the most effective governance framework and allows our Company to benefit from Mr. Fairbank’s talent, knowledge and leadership as the founder of Capital One and allows him to use the in-depth focus and perspective gained in running the Company to effectively and efficiently guide our Board. Capital One appropriately maintains strong independent and effective oversight of our business and affairs through our empowered Lead Independent Director; all-independent Board committees with independent chairs that oversee the Company’s operations, risks, performance and business strategy; experienced and committed directors; and frequent executive sessions without management (including Mr. Fairbank) in attendance.
Annual Assessment of Director Nominees
Annual Assessment of Director Nominees Each year the Chair of the Governance and Nominating Committee conducts an individual director assessment process. This process includes candid, one-on-one discussions between the Governance and Nominating Committee’s Chair and each Board member regarding the individual performance and effectiveness of the directors nominated by the Board for re-election by Capital One’s stockholders. The Lead Independent Director is also assessed annually through a process facilitated by another independent member of the Board. See “Annual Assessment of the Lead Independent Director” beginning on page 22 for a description of that process.
Annual Assessment of Director Nominees
| Solicitation | | The Governance and Nominating Committee Chair meets with Board members in separate, one-on-one sessions to solicit feedback on the other directors’ individual strengths and contributions in areas such as meeting preparation, knowledge of company business and strategy, personal knowledge and subject-matter expertise, corporate culture, ethics and candor. | | Evaluation | | The Governance and Nominating Committee Chair synthesizes the feedback and reports the results to the Governance and Nominating Committee, the Chairman of the Board and the Board, as appropriate. Each director leaves the room during the discussion of his or her assessment and candidacy. The Governance and Nominating Committee also reviews other considerations such as related person transactions, conflicts of interest and independence. | | Nomination | | The Governance and Nominating Committee recommends director candidates for nomination to the Board, and the Board nominates one or more directors to stand for re-election by Capital One’s stockholders. | | Follow-Up | | The Governance and Nominating Committee’s Chair shares input and feedback from the assessments with the individual directors. |
Information About Our Current Board Committee Membership and 2017 Committee Meetings
Information About Our Current Board Committee Membership and 2017 Committee Meetings
Information About Our Current Board Committee Membership and 2017 Committee Meetings
| Director | Audit | Risk | Governance and Nominating | Compensation | | Richard D. Fairbank | | | | | | Aparna Chennapragada(1) | | | | | | Ann Fritz Hackett | | | | | | Lewis Hay, III | | | | | | Benjamin P. Jenkins, III | | | | | | Peter Thomas Killalea | | | | | | Pierre E. Leroy | | | | | | Peter E. Raskind | | | | | | Mayo A. Shattuck III | | | | | | Bradford H. Warner | | | | | | Catherine G. West | | | | | | TOTAL MEETINGS HELD IN 2017 | 14 | 8 | 4 | 5 |
Information About Our Current Board Committee Membership and 2017 Committee Meetings
Chair Member
Information About Our Current Board Committee Membership and 2017 Committee Meetings
| Ms. Chennapragada was appointed to the Board of Directors on March 1, 2018.(1) |
Information About Our Current Board Committee Membership and 2017 Committee Meetings
| CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT | 29 |
Compensation Committee Consultant
| ∎ | Reviewed the compensation program for Capital One’s directors and provided competitive compensation data and director compensation program recommendations for review |
Compensation Committee Consultant
| ∎ | Provided information on executive and director compensation trends and analyses of the implications of such trends for Capital One |
Committee Membership Determinations
Committee Membership Determinations Annually, the Governance and Nominating Committee assesses and considers membership for each of the Board’s standing committees. This review takes into account, among other factors, committee needs, director experience, committee succession planning and the desire to balance membership continuity with new insights. The Chair of the Governance and Nominating Committee facilitates discussions with management, committee chairs, the Chairman of the Board, and individual directors, as needed and shares that feedback with the Governance and Nominating Committee. The Governance and Nominating Committee makes recommendations for committee membership and Chairs to the full Board.
Committee Membership Determinations
| Executive Officers |
Committee Membership Determinations
| Robert M. Alexander Chief Information Officer Age: 53 | Mr. Alexander joined Capital One in April 1998. From April 1998 to May 2007, Mr. Alexander had responsibility at various times for a number of Capital One’s lending businesses, including the U.S. consumer credit card and installment loan businesses. Mr. Alexander became Chief Information Officer in May 2007, and in this role he is responsible for overseeing all technology activities for Capital One. |
Committee Membership Determinations
| 32 | CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT |
Committee Membership Determinations
| Jory A. Berson Chief Human Resources Officer Age: 47 | Mr. Berson joined Capital One in July 1992. From July 1992 to June 2009, Mr. Berson held a variety of roles at Capital One, including President, Financial Services and President, U.S. Card. In June 2009, Mr. Berson became Chief Human Resources Officer, and in this role Mr. Berson is responsible for overseeing Capital One’s Human Resources strategy, recruitment efforts and development programs. | | R. Scott Blackley Chief Financial Officer Age: 49 | Mr. Blackley joined Capital One in March 2011. Mr. Blackley became the Company’s CFO in May 2016 and served as the Company’s Principal Accounting Officer from July 2011 to May 2017 and Controller from March 2011 to March 2017. Prior to joining the Company, Mr. Blackley held various executive positions at Fannie Mae, most recently as Senior Vice President and Chief Financial Officer of the Capital Markets Group. Mr. Blackley’s early career included senior roles in consulting and public accounting, including an appointment to the US Securities and Exchange Commission as a Professional Accounting Fellow and as a Partner with KPMG, LLP. | | Kevin S. Borgmann Senior Advisor to the CEO Age: 46 | Mr. Borgmann joined Capital One in August 2001. Since that time he has served in a variety of roles in Capital One’s Corporate Strategy, Partnership Finance, Upmarket Acquisitions, Credit Card, Auto Finance and Risk departments, including serving as Senior Vice President with the Credit Card Division from March 2008 until September 2010, President of Capital One Auto Finance from September 2010 until October 2012, Deputy Chief Risk Officer from October 2012 to January 2013, and Chief Risk Officer from January 2013 through January 2018. In February 2018, Mr. Borgmann became Senior Advisor to the Chairman and CEO and executive team, with a focus on strategy, risk management, and executive recruiting matters. | | Matthew W. Cooper General Counsel Age: 46 | Mr. Cooper joined Capital One in January 2009. From January 2009 to January 2018, Mr. Cooper held a variety of roles within Capital One’s Legal Department, including Chief Counsel, Litigation from January 2009 to February 2014; Chief Counsel, Global Card from July 2012 to January 2017; and Chief Counsel, Legal from January 2016 to February 2018. In February 2018, Mr. Cooper became General Counsel, and in this role Mr. Cooper is responsible for overseeing Capital One’s Legal Department and he also manages Capital One’s internal audit department for administrative purposes. Prior to joining Capital One, Mr. Cooper served in various executive roles within the legal department of the General Electric Company and one of its successor companies, Genworth Financial. | | John G. Finneran, Jr. Chief Risk Officer and Corporate Secretary Age: 68 | Mr. Finneran joined Capital One in September 1994 as General Counsel and Corporate Secretary, responsible for managing Capital One’s legal, governmental affairs, corporate governance, regulatory relations and corporate affairs departments, and managed Capital One’s internal audit department for administrative purposes. In February 2018, Mr. Finneran became Chief Risk Officer and Corporate Secretary, responsible for overseeing Capital One’s credit, compliance, operational, market and liquidity, and enterprise risk management functions, as well as continuing to lead Capital One’s corporate governance function. | | Frank G. LaPrade, III Chief Enterprise Services Officer and Chief of Staff to the CEO Age: 51 | Mr. LaPrade joined Capital One in January 1996. Since that time he has served in various positions, including as Capital One’s Deputy General Counsel responsible for managing the company’s litigation, employment, intellectual property and transactional practice areas. In 2004, Mr. LaPrade became Chief of Staff to the Chief Executive Officer. In 2010, Mr. LaPrade added responsibilities as Chief Enterprise Services Officer. In that capacity, Mr. LaPrade manages Enterprise Services for Capital One, including Technology, Digital, Design, Growth Ventures, Brand, Enterprise Supplier Management, External Affairs, Workplace Solutions, and Corporate Security. |
Committee Membership Determinations
| CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT | 33 |
Committee Membership Determinations
| Christopher T. Newkirk President, International and Small Business Age: 47 | Mr. Newkirk joined Capital One in September 2008, leading U.S. Card Partnership Analytics through January 2010. From February 2010 to June 2013, Mr. Newkirk led U.S. Card Customer Management. From July 2013 to November 2016, Mr. Newkirk led the Company’s International Card business, most recently as Executive Vice President and Head of International Card, where he was responsible for all aspects of Capital One’s credit card businesses in the United Kingdom and Canada. In November 2016, Mr. Newkirk became President, International and Small Business, where he is responsible for leading Capital One’s International credit card businesses and Capital One’s small business credit card business in the United States and, beginning in April 2017, small business banking. | | Kleber Santos President, Retail and Direct Banking Age: 44 | Mr. Santos joined Capital One in January 2006 as director of Corporate Strategy. From July 2008 to February 2010, he served as head of marketing and analytics for Capital One’s Retail and Direct Bank. From August 2014 to March 2017, Mr. Santos served as Executive Vice President of the Consumer Bank. Mr. Santos became president of the Retail and Direct Bank in March 2017, providing strategic direction and leadership for the Retail and Direct Bank organization. Prior to joining Capital One, Mr. Santos’ experience includes serving as an engagement manager and U.S. payments expert at McKinsey & Company, where he led a variety of projects for the leading credit card issuers and banks in the U.S. Mr. Santos is second lieutenant of infantry in the Brazilian Army Reserve Forces. | | Michael C. Slocum President, Commercial Banking Age: 61 | Mr. Slocum joined Capital One in August 2007. From August 2007 to September 2011, Mr. Slocum was Executive Vice President of Capital One’s Banking Business, leading the company’s Commercial Banking business including lending, deposit products and capital markets. Mr. Slocum became President, Commercial Banking in September 2011, and in this role he is responsible for leading all aspects of Commercial Banking including Corporate and Commercial Real Estate Banking, Capital Markets, Treasury Services and all related operations. Before joining Capital One, Mr. Slocum served in various leadership roles at Wachovia Bank (now Wells Fargo & Company), a provider of consumer and commercial financial services, including as the Regional Chief Executive Officer for Northeastern US. | | Michael J. Wassmer President, U.S. Card Age: 48 | Mr. Wassmer joined Capital One in July 1994. Since that time, Mr. Wassmer has served in roles of increasing responsibility across the Company, expanding his leadership scope and experience driving strategy and analysis, finance, operations and risk management. From 2013 to November 2016, Mr. Wassmer served as Executive Vice President of the Company’s U.S. Branded Card business where he was responsible for leading credit, marketing and strategy for the domestic Branded Consumer and Small Business Card businesses. In November 2016, Mr. Wassmer became President, U.S. Card and is currently responsible for leading the Company’s consumer credit card business in the United States. In his over 20 years of leadership in the Company’s Card business, Mr. Wassmer has been responsible for driving significant transformation and growth, including the launch and oversight of the Company’s flagship consumer and small business products. | | Sanjiv Yajnik President, Financial Services Age: 61 | Mr. Yajnik joined Capital One in July 1998. From July 1998 to June 2009, Mr. Yajnik led several businesses within Capital One, including Capital One Europe, Capital One Canada, and Capital One Small Business Services. Mr. Yajnik became President, Financial Services in June 2009. In this role he is responsible for overseeing Capital One’s Auto Finance and Home Loans businesses. Prior to joining Capital One, Mr. Yajnik held a broad range of positions, including General Manager at Circuit City Stores (USA), Market Manager at PepsiCo (Canada), and Chief Engineer at Mobil Oil (International). |
Committee Membership Determinations
| 34 | CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT |
Committee Membership Determinations
| Related Person Transactions |
Committee Membership Determinations
Our Board has approved a written Related Person Transaction policy, which sets forth policies and procedures for reviewing, and approving or ratifying, transactions with directors, director nominees, executive officers, stockholders holding 5% or more of Capital One’s voting securities, or any of their immediate family members or affiliated entities (Related Persons). The policy covers transactions, arrangements and relationships where Capital One is a participant, the aggregate amount of the transaction exceeds $120,000, and a Related Person has a direct or indirect material interest (Related Person Transactions). Under the policy, Related Person Transactions must be approved or ratified by the Governance and Nominating Committee. The Governance and Nominating Committee will only approve or ratify a Related Person Transaction if, after reviewing all relevant facts and circumstances, it determines the Related Person Transaction is not inconsistent with the best interests of the Company and its stockholders. In reviewing Related Person Transactions for approval or ratification, the Governance and Nominating Committee will consider all relevant facts and circumstances, which may include: the benefits to the Company resulting from the transaction; the nature and extent of the Related Person’s interest in the transaction; whether the transaction would impact a director’s independence; whether Capital One’s Code of Business Conduct and Ethics would be implicated (including whether the transaction would create a conflict of interest or appearance of a conflict of interest); whether the transaction raises any concerns with respect to reputational risk; the availability of other sources for comparable products or services; and the terms of the transaction and the terms available to unrelated third parties or to Capital One’s associates, generally. The Governance and Nominating Committee has pre-approved the following types of Related Person Transactions as being not inconsistent with the best interests of Capital One and its stockholders. These include transactions involving: director and executive compensation otherwise disclosed in the Company’s proxy statement and/or approved by the Compensation Committee or the Board; amounts that are not material and where the relationship arises only from a Related Person being an employee (other than as an executive officer) or a director of, or having immaterial financial holdings in, another entity; and financial services, including loans, extensions of credit, or other financial services and products provided by Capital One to a Related Person that are in the ordinary course, non-preferential, do not involve features unfavorable to the Company, and comply with all applicable laws, rules, and regulations (including the Sarbanes-Oxley Act of 2002 and Regulation O of the Board of Governors of the Federal Reserve, and the Federal Deposit Insurance Corporation Guidelines). If a matter before the Governance and Nominating Committee involves a member of the Committee, the member must be recused and may not participate in deliberations or vote on the matter. If Capital One learns of a Related Person Transaction that was not pre-approved under the policy, the Committee will consider the options available, including ratification, revision or termination of the transaction. From time to time in the ordinary course of its business, Capital One issues loans and provides other financial services and products to directors, executive officers and/or nominees for director, or to a director’s, executive officer’s or director nominee’s immediate family member, including persons sharing the household of such director, executive officer or director nominee (other than a tenant or employee). Such loans and other financial services and products are made in the ordinary course of business; are on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans and financial services and products with persons not related to the Company; and do not involve more than the normal risk of collectability or present other features unfavorable to the Company. Matthew W. Cooper is Capital One’s General Counsel. Mr. Cooper’s brother-in-law is a partner at the international law firm of McGuireWoods LLP (“McGuireWoods”). Capital One has engaged McGuireWoods from time to time in the ordinary course of business and on an arm’s length basis. The relationship between Capital One and McGuireWoods began before Mr. Cooper was employed by Capital One and also pre-dates Mr. Cooper’s brother-in-law’s association with McGuireWoods. Mr. Cooper’s brother-in-law does not work on any Capital One matters and his ownership in the firm is less than 1%. In 2017, Capital One made aggregate payments to McGuireWoods of approximately $8.6 million for legal services. This relationship was ratified by the Governance and Nominating Committee.
Committee Membership Determinations
| CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT | 35 |
Committee Membership Determinations
| Environmental, Social and Governance Practices |
Committee Membership Determinations
At Capital One, we provide financial solutions to help people succeed and to make life better in the communities in which we operate. Our approach to corporate social responsibility continues to evolve each year, but we remain focused on three core elements: our people, our community, and our environmental footprint. We are committed to helping our customers, associates, and communities succeed. For more information regarding our environmental, social and governance practices, see “Corporate Social Responsibility” located in Capital One’s Newsroom on our website at press.capitalone.com.
Section III - Director Compensation
Section III - Director Compensation
Section III - Director Compensation
| Director Compensation Objectives |
Section III - Director Compensation
The Board approves the compensation for non-management directors based on recommendations made by the Compensation Committee. The Board has designed the director compensation program to achieve four primary objectives:
Section III - Director Compensation
| ∎ | Attract and retain talented directors with the skills and capabilities to perpetuate Capital One’s success |
Section III - Director Compensation
| ∎ | Fairly compensate directors for the work required in a company of Capital One’s size and scope |
Section III - Director Compensation
| ∎ | Recognize the individual roles and responsibilities of the directors |
Section III - Director Compensation
| ∎ | Align directors’ interests with the long-term interests of Capital One stockholders |
Section III - Director Compensation
Management directors do not receive compensation for their service on the Board. In 2017, Mr. Fairbank was Capital One’s only management director.
Section III - Director Compensation
| Director Compensation Procedures |
Section III - Director Compensation
The Compensation Committee annually reviews the compensation program for Capital One’s non-management directors. FW Cook provides competitive compensation data and director compensation program recommendations to the Compensation Committee for review. See the discussion under “Compensation Committee Consultant” on page 32 for further information on the role and responsibilities of FW Cook. The competitive compensation data includes the compensation (cash, equity and other benefits) of non-management directors within Capital One’s peer comparator group. See the discussion under “Market Data” on page 68 for further information on the selection of the peer comparator group. The Compensation Committee considers this information, and FW Cook’s recommendations, and finalizes a proposed director compensation structure. The proposed structure is then reviewed and approved by the full Board, typically in the second quarter of each year. Based on their review of competitive market data and guidance from FW Cook in the second quarter of 2017, the Compensation Committee determined that the Company’s director compensation program meets the objectives listed above.
Section III - Director Compensation
| Director Compensation Structure |
Section III - Director Compensation
On May 4, 2017, the Board approved a compensation program for Capital One’s non-management directors for the period from May 4, 2017 through Capital One’s 2018 Annual Meeting that is similar to the program for the preceding year. The compensation program consists of an annual cash retainer of $90,000 for service on the Board. In addition, directors receive cash retainers for committee service and for service as committee chairs and Lead Independent Director. Based upon the analysis and data provided by FW Cook, the Board increased the committee chair retainers from $45,000 to $60,000 for the Risk Committee chair, from $30,000 to $45,000 for the Audit Committee chair, and from $30,000 to $35,000 for the Compensation Committee and Governance and Nominating Committee chairs, to reflect the scope of responsibilities of the committee chairs and to align with compensation levels within Capital One’s peer comparator group. See “Compensation of Directors” below for details regarding the retainers. In addition, each non-management director serving on May 3, 2017, other than Mr. Gross, received on such date an award of 2,061 restricted stock units of Capital One common stock (“RSUs”) with a grant date fair value of $170,012 valued at $82.49 per share. All RSUs were granted under the 2004 Stock Incentive Plan and were valued based on the fair market value of a share of Capital One common stock on the date of grant. The RSUs vest one year from the date of grant and delivery of the underlying shares is deferred until the director’s service with the Board ends. Mr. Gross retired from the Board effective May 4, 2017.
Section III - Director Compensation
| CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT | 41 |
Section III - Director Compensation
| Compensation of Directors |
Section III - Director Compensation
Directors of Capital One received the following compensation in 2017:
Section III - Director Compensation
| Director Name | Fees Earned or Paid in Cash (3) | Stock Awards (4) | Option Awards | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation (5) | Total | | Richard D. Fairbank (1) | — | — | — | — | — | — | | Patrick W. Gross (2) | $75,000 | $ — | — | — | $15,000 | $90,000 | | Ann Fritz Hackett | $217,500 | $170,012 | — | — | $15,000 | $402,512 | | Lewis Hay, III | $135,000 | $170,012 | — | — | $10,000 | $315,012 | | Peter T. Killalea | $135,000 | $170,012 | — | — | $15,000 | $320,012 | | Benjamin P. Jenkins, III | $150,000 | $170,012 | — | — | $15,000 | $335,012 | | Pierre E. Leroy | $135,000 | $170,012 | — | — | $15,000 | $320,012 | | Peter E. Raskind | $157,500 | $170,012 | — | — | $15,000 | $342,512 | | Mayo A. Shattuck III | $157,500 | $170,012 | — | — | $15,000 | $342,512 | | Bradford H. Warner | $157,500 | $170,012 | — | — | $15,000 | $342,512 | | Catherine G. West | $135,000 | $170,012 | — | — | $15,000 | $320,012 |
Section III - Director Compensation
| Management directors do not receive compensation for their service on the Board. In 2017, Mr. Fairbank was Capital One’s only management director.(1) |
Section III - Director Compensation
| Mr. Gross retired from the Board effective May 4, 2017. Amounts shown represent cash payments made during 2017 for the compensation program in effect for the period from May 5, 2016 through Capital One’s 2017 Annual Meeting.(2) |
Section III - Director Compensation
| Represents cash payments made during 2017, which include half of the payments made under the compensation program for the period from May 4, 2017 through Capital One’s 2018 Annual Meeting and half of the payments made under the compensation program for the period from May 5, 2016 through Capital One’s 2017 Annual Meeting.(3) |
Section III - Director Compensation
| Represents the grant date fair value of RSUs granted during 2017, calculated in accordance with FASB ASC Topic 718.(4) |
Section III - Director Compensation
| Each non-management director serving on May 4, 2017 elected to direct contributions from Capital One in an aggregate amount of up to $15,000 to charitable organization(s) of his or her choice.(5) |
Section III - Director Compensation
Under the most recently approved director compensation program, retainers are as follows:
Section III - Director Compensation
| ∎ | Lead Independent Director Retainer: $50,000 |
Section III - Director Compensation
| ∎ | Chair of the Risk Committee: $60,000 |
Section III - Director Compensation
| ∎ | Chair of the Audit Committee: $45,000 |
Section III - Director Compensation
| ∎ | Chair of the Compensation Committee or Governance and Nominating Committee: $35,000 |
Section III - Director Compensation
| ∎ | Member of the Risk Committee (other than the chair): $30,000 |
Section III - Director Compensation
| ∎ | Member of the Audit Committee, Compensation Committee or Governance and Nominating Committee (other than the chair): $15,000 |
Section III - Director Compensation
| ∎ | Member of the Capital One, National Association Trust Committee: $10,000 |
Section III - Director Compensation
In addition, prior to 2013, directors were offered the opportunity to elect to forego their cash retainers for a grant of non-qualified stock options under the 2004 Stock Incentive Plan. The outstanding options expire 10 years from the date of grant. In 2013, the Compensation Committee determined to no longer include stock options as part of the director compensation program. Upon termination from Board service (other than by removal for cause), a director will have the remainder of the full option term to exercise any vested stock options.
Section III - Director Compensation
| 42 | CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT |
Section III - Director Compensation
The following table shows the number of RSUs outstanding, including accrued dividend equivalents, and the total number of stock options outstanding for each non-management director as of December 31, 2017:
Section III - Director Compensation
| Director Name | Number of Outstanding RSUs | Number of Outstanding Stock Options | | Patrick W. Gross | — | — | | Ann Fritz Hackett | 42,361 | 6,361 | | Lewis Hay, III | 42,361 | 40,746 | | Peter T. Killalea | 5,151 | — | | Benjamin P. Jenkins, III | 12,608 | — | | Pierre E. Leroy | 41,361 | — | | Peter E. Raskind | 16,192 | 10,425 | | Mayo A. Shattuck III | 42,361 | 22,155 | | Bradford H. Warner | 35,585 | 34,529 | | Catherine G. West | 12,608 | — |
Section III - Director Compensation
| Other Benefits |
Section III - Director Compensation
Under the Capital One Financial Corporation Non-Employee Directors Deferred Compensation Plan, non-management directors may voluntarily defer all or a portion of their cash compensation and receive deferred income benefits. Participants in the plan can direct their individual deferrals among seventeen investments available through the plan. Directors that elected a deferral receive their deferred income benefits in cash when they cease serving as directors, upon certain other distribution events specified in the plan, or at such earlier time as authorized by the Compensation Committee. Upon a change of control, Capital One will pay to each director within 30 days of the change of control a lump sum cash payment equal to such director’s account balance as of the date of the change of control. Capital One offers non-management directors the opportunity to direct a contribution of up to $10,000 annually from Capital One to charitable organization(s) of their choice. Each non-management director serving on May 4, 2017 elected to make such a charitable contribution in 2017. In addition, all directors serving on May 4, 2017 were eligible, and nine directors elected, to participate in a charitable contribution program available to Capital One associates under which Capital One made a contribution of $5,000 to a charitable organization of their choice. Directors also receive reimbursements for certain board-related expenses including external educational seminars and travel-related costs incurred to attend Board meetings. Such reimbursements are not included as compensation for the directors in the table above.
Section III - Director Compensation
| Stock Ownership Requirements |
Section III - Director Compensation
Capital One requires non-management directors to retain all shares underlying RSUs granted to them by Capital One until their service with the Board ends. The Board may grant an exception for any case where this requirement would impose a financial hardship on a director. No directors have been granted an exception to this requirement for any outstanding awards of RSUs.
Section III - Director Compensation
| CAPITAL ONE FINANCIAL CORPORATION | 2018 PROXY STATEMENT | 43 |
CEO Compensation by Performance Year
| ∎ | The Summary Compensation Table reports the change in pension value and non-qualified deferred compensation earnings and all other compensation. These amounts generally are not a result of current year compensation determinations and are not shown above. |
NEO Compensation by Performance Year
| | | Base Salary | | Year-End Incentive | Long-Term Incentives | | | | | Name | Performance Year | Cash Salary | RSU Salary (1) | Cash- Settled RSUs | Stock- Settled RSUs | Performance Shares | Option Awards | Total | | R. Scott Blackley | 2017 | $900,000 | $686,784 | $637,850 | $1,169,408 | $1,169,408 | $— | $4,563,450 | | | 2016 | $630,000 | $410,039 | $574,075 | $1,462,513 | $487,562 | $— | $3,564,189 | | Frank G. LaPrade, III | 2017 | $1,013,000 | $760,051 | $760,058 | $1,264,075 | $1,264,075 | $— | $5,061,259 | | | 2016 | $983,000 | $737,037 | $737,085 | $1,350,876 | $810,560 | $600,370 | $5,218,928 | | John G. Finneran, Jr. | 2017 | $1,051,000 | $788,025 | $788,018 | $1,312,560 | $1,312,560 | $— | $5,252,163 | | | 2016 | $1,020,000 | $765,015 | $765,059 | $1,274,551 | $764,713 | $509,804 | $5,099,142 | | | 2015 | $990,000 | $743,004 | $743,028 | $1,237,063 | $742,263 | $494,803 | $4,950,161 | | Sanjiv Yajnik | 2017 | $995,000 | $746,064 | $746,025 | $1,366,282 | $1,366,282 | $— | $5,219,653 | | | 2016 | $966,000 | $724,037 | $724,047 | $1,206,083 | $723,616 | $482,401 | $4,826,184 | | | 2015 | $937,000 | $703,050 | $703,006 | $1,171,039 | $702,623 | $468,416 | $4,685,134 | | Stephen S. Crawford | 2017 | $1,600,000 | $1,235,007 | $612,507 | $1,019,868 | $1,019,868 | $— | $5,487,250 | | | 2016 | $1,598,000 | $1,199,016 | $1,199,004 | $1,996,526 | $1,197,968 | $887,336 | $8,077,850 | | | 2015 | $1,552,000 | $1,164,054 | $1,164,028 | $1,938,029 | $1,162,818 | $861,334 | $7,842,263 |
NEO Compensation by Performance Year
| ∎ | The Summary Compensation Table reports the change in pension value and non-qualified deferred compensation earnings and all other compensation. These amounts generally are not a result of current year compensation determinations and are not shown above. |
Pension and Non-Qualified Deferred Compensation Plans
Pension and Non-Qualified Deferred Compensation Plans Capital One does not have any active pension plans for the NEOs. We offer a voluntary, non-qualified deferred compensation plan that restores participating NEOs, excluding the CEO, to the level of savings they would have achieved if they had not been impacted by IRS limits governing our qualified 401(k) plan. It also allows the NEOs, excluding the CEO, to defer additional pre-tax compensation in order to save for retirement. Capital One annually reviews programs and practices at our peer comparator companies and across the financial services industry. We also review changes in the legal and regulatory environment pertaining to retirement programs. Each of our named executive officers participated in Capital One’s Voluntary Non-Qualified Deferred Compensation Plan (“VNQDCP”) in 2017. The CEO participates in the VNQDCP on a non-voluntary basis, as his cash bonus is mandatorily deferred in the VNQDCP for three years. Details of the VNQDCP can be found under “Capital One’s Voluntary Non-Qualified Deferred Compensation Programs” beginning on page 82.
Section V - Named Executive Officer Compensation
| 2017 Summary Compensation Table |
Section V - Named Executive Officer Compensation
| Name and Principal Position | Year | Salary (5) | Bonus (6) | Stock Awards (7) | Option Awards (8) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings (9) | All Other Compensation (10) | Total | | Richard D. Fairbank Chairman, CEO and President (1) | 2017 | $0 | $3,727,500 | $10,535,121 | $1,750,018 | $4,161 | $158,970 | $16,175,770 | | | 2016 | $0 | $2,677,500 | $12,285,042 | $1,750,003 | $3,407 | $205,185 | $16,921,137 | | | 2015 | $0 | $2,677,500 | $13,440,028 | $1,750,000 | $3,357 | $144,289 | $18,015,174 | | R. Scott Blackley Chief Financial Officer (2)(3) | 2017 | $826,538 | $0 | $3,210,934 | $0 | — | $225,176 | $4,262,648 | | | 2016 | $617,769 | $0 | $2,597,024 | $0 | — | $132,046 | $3,346,839 | | Frank G. LaPrade, III Chief Enterprise Services Officer (2) | 2017 | $1,009,538 | $0 | $3,658,572 | $600,370 | — | $198,420 | $5,466,900 | | | 2016 | $974,577 | $0 | $3,329,446 | $530,369 | — | $193,202 | $5,027,594 | | John G. Finneran, Jr. Chief Risk Officer and Corporate Secretary (2) | 2017 | $1,047,423 | $0 | $3,592,348 | $509,804 | $978 | $218,997 | $5,369,550 | | | 2016 | $1,016,538 | $0 | $3,487,369 | $494,803 | $778 | $219,255 | $5,218,743 | | | 2015 | $988,500 | $0 | $3,661,947 | $478,405 | $785 | $199,231 | $5,328,868 | | Sanjiv Yajnik President, Financial Services (2) | 2017 | $991,654 | $0 | $3,399,810 | $482,401 | — | $259,729 | $5,133,594 | | | 2016 | $962,654 | $0 | $3,300,705 | $468,416 | — | $203,132 | $4,934,907 | | | 2015 | $934,462 | $0 | $3,439,765 | $448,606 | — | $219,681 | $5,042,514 | | Stephen S. Crawford Senior Advisor to the CEO (2)(4) | 2017 | $1,619,231 | $0 | $5,628,505 | $887,336 | — | $181,516 | $8,316,588 | | | 2016 | $1,592,692 | $0 | $5,463,891 | $861,334 | — | $280,676 | $8,198,593 | | | 2015 | $1,549,462 | $0 | $6,039,153 | $916,676 | — | $272,031 | $8,777,322 |
Section V - Named Executive Officer Compensation
| The amounts shown in this column represent the change in the actuarial present value of the accumulated pension benefits for Messrs. Fairbank and Finneran under the Cash Balance Pension Plan and the Excess Cash Balance Plan.(9) |
Section V - Named Executive Officer Compensation
| Represents Company contributions under qualified and non-qualified deferred compensation programs and other supplemental executive retirement benefits.(c) |
Section V - Named Executive Officer Compensation
| 2017 Grants of Plan-Based Awards |
2017 Grants to NEOs (other than the CEO)
| 2017 Grants of Plan-Based Awards Table |
2017 Grants to NEOs (other than the CEO)
| 2017 Option Exercises and Stock Vested Table |
2017 Grants to NEOs (other than the CEO)
| 2017 Outstanding Equity Awards at Fiscal Year-End Table |
2017 Grants to NEOs (other than the CEO)
| Pension Benefits |
Capital One Pension Benefit Programs
| 2017 Pension Benefits Table |
Capital One Pension Benefit Programs
| Capital One’s Voluntary Non-Qualified Deferred Compensation Programs |
Capital One Pension Benefit Programs
| 2017 Non-Qualified Deferred Compensation Table |
Capital One Pension Benefit Programs
| Potential Payments Upon Termination or Change of Control |
Voluntary Termination with Good Reason or Involuntary Termination Without Cause
| 2017 Potential Payments and Benefits Upon Termination or Change of Control Table |
Voluntary Termination with Good Reason or Involuntary Termination Without Cause
| Represents potential payments and benefits upon change of control for involuntary termination without cause or voluntary termination for good reason. “Acceleration and Continuation of Equity Awards” represents the value of equity where vesting is accelerated upon change of control, assuming, where applicable, that all performance metrics have been achieved at their target level.(2) |
Voluntary Termination with Good Reason or Involuntary Termination Without Cause
| Represents the value of potential payments made on the executive’s behalf for continuation of medical and welfare benefits during the non-competition or severance period, as applicable. Includes programs such as medical, dental, insurance, outplacement services and related benefits. Only includes programs that are specific to the named executive officers; does not include the value of programs generally available to all associates upon separation from the Company.(7) |
Section IX - Election of Directors
Section IX - Election of Directors