Committee Responsibilities
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The
charter of each of our standing committees fully describes that committee's responsibilities. The following summary highlights the committees' key areas of oversight.
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Committee
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Primary Responsibilities and Membership
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Audit
Held 14 meetings during 2016
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Assisting the Board of Directors in overseeing the quality and integrity of our financial statements, including matters related to internal controls; our compliance with legal and regulatory requirements;
the qualifications, performance and independence of our independent auditor; and the integrity of the financial reporting processes, both internal and external;
▶
appointing,
compensating, retaining and overseeing the work of the independent auditor; and
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overseeing the internal audit function and approving the appointment and compensation of the Chief Audit
Executive.
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Current Members
: Roland A. Hernandez (Chair), Warner L. Baxter,
Karen S. Lynch and Scott W. Wine
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Capital Planning
This committee was formed in January
2017
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Overseeing the capital planning and capital management processes and actions, including stress testing processes, scenarios and results;
▶
reviewing and
approving the Comprehensive Capital Analysis and Review and recommending approval to the Board of Directors;
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monitoring our company's capital adequacy;
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reviewing and approving our resolution and recovery plans and recommending approval to the Board of Directors; and
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reviewing and approving the issuance or repurchase of equity securities and other
significant financial transactions and equity investments.
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Current Members
: Warner L. Baxter (Chair), Marc N. Casper, Andrew
Cecere, Richard K. Davis, Doreen Woo Ho and O'dell M. Owens, M.D., M.P.H.
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Community Reinvestment and Public Policy
Held 4
meetings during 2016
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Reviewing and considering our position and practices on matters of public interest and public responsibility and similar issues involving our relationship with the community at large;
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reviewing our activities related to corporate culture, including those focused on ethical business culture and diversity and inclusion initiatives;
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reviewing our
activities, performance and compliance with the Community Reinvestment Act and fair lending regulations;
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reviewing our reputation-building and brand management activities, including overseeing
management of reputational risk; and
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reviewing our activities and programs with respect to corporate social responsibility, including sustainability and corporate political
contributions.
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Current Members
: Kimberly J. Harris (Chair), Marc N. Casper,
Roland A. Hernandez and Karen S. Lynch
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2017
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Table of Contents
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Corporate Governance
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Committee
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Primary Responsibilities and Membership
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Compensation and Human Resources (the "Compensation Committee")
Held 7 meetings during 2016
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Discharging the Board's responsibilities relating to the compensation of our executive officers;
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recommending to
the Board for approval executive officer incentive compensation plans and all equity-based incentive plans;
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approving other compensation plans, practices and programs applicable to the company's
executive officers, including performance goals and objectives;
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recommending to the independent directors for approval the compensation program for our non-employee directors;
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evaluating and discussing with the appropriate officers of our company the incentives for risk taking contained in our incentive compensation plans and programs; and
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evaluating the CEO's performance and overseeing succession planning for executive officers other than our CEO.
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Current Members
: Arthur D. Collins, Jr. (Chair), Olivia F.
Kirtley, David B. O'Maley, O'dell M. Owens, M.D., M.P.H., and Scott W. Wine
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Governance
Held 6 meetings during 2016
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Discharging the Board's responsibilities relating to corporate governance matters, including developing and recommending to the Board a set of corporate governance principles;
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overseeing succession planning for our CEO;
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identifying and recommending to the Board individuals qualified to become directors;
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ensuring our company's sales practices are aligned with our stated values, strategy and risk appetite;
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conducting an annual performance evaluation of the Board, its committees, and its members;
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overseeing the evaluation of management; and
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making recommendations to the Board regarding any shareholder proposals.
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Current Members
: Douglas M. Baker, Jr. (Chair), Arthur D. Collins,
Jr., Kimberly J. Harris, David B. O'Maley and Craig D. Schnuck
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Risk Management
Held 6 meetings during
2016
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Overseeing our overall risk management function, which governs the management of credit, interest rate, liquidity, market, capital, operational, compliance and strategic risk;
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reviewing and approving our company's risk management framework and risk appetite statement;
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monitoring our company's risk profile relative to its risk appetite; and
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reviewing and evaluating significant capital expenditures and potential mergers and acquisitions.
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Current Members
: Olivia F. Kirtley (Chair), Douglas M. Baker, Jr.,
Andrew Cecere, Richard K. Davis, Doreen Woo Ho and Craig D. Schnuck
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Executive
Held 0 meetings during 2016
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The Executive Committee has authority to exercise all powers of the Board of Directors, as permitted by law and our bylaws, between regularly scheduled Board meetings.
Current Members
: Richard K. Davis (Chair), Douglas M. Baker, Jr., Warner L. Baxter, Arthur D. Collins, Jr., Kimberly J. Harris, Roland A. Hernandez,
Olivia F. Kirtley and David B. O'Maley
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U.S.
Bancorp
2017
Proxy
Statement
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Table of Contents
Corporate Governance
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Risk Oversight by the Board of Directors
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As
part of its responsibility to oversee the management, business and strategy of our company, the Board of Directors has approved a risk management framework that establishes
governance and risk management requirements for all risk-taking activities. This framework includes company- and business-level risk appetite statements that set boundaries for the types and amount of
risk that may be undertaken in pursuing business objectives and initiatives.
The
Board of Directors oversees management's performance relative to the risk management framework, risk appetite statements, 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,
our Board's responsibility is to oversee our company's risk management processes by informing itself concerning our material risks and evaluating whether management has reasonable risk management and
control processes in place to address the material risks.
To
fulfill its risk oversight responsibility, the Board:
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reviews our company's strategic objectives and financial performance in light of its risk appetite;
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oversees the amounts and types of risk taken by management in executing the corporate strategy;
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oversees management's performance relative to risk management and control of the company's risk-taking activities;
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evaluates the role of incentive compensation in managing our company's risk appetite;
and
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oversees talent management and succession planning.
The
Board's risk oversight function is primarily carried out through its committees. As described in the preceding discussion of committee responsibilities:
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the
Audit Committee
is focused on
financial statement and accounting risk and internal controls;
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the
Capital Planning Committee
oversees capital planning and capital management and reviews and approves significant financial transactions and equity investments;
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the
Community Reinvestment and Public Policy
Committee
reviews activities related to corporate culture and oversees our company's activities with respect to reputational risk;
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the
Compensation Committee
oversees our company's compensation policies and arrangements to ensure that they do not encourage inappropriate levels of risk-taking by management with respect to our company's strategic goals, and
to determine whether any of them give rise to risks that are reasonably likely to have a material adverse effect on our company. More information on the evaluation performed by the Compensation
Committee is included below in "Compensation Discussion and Analysis Decision Making and Policies Risk Considerations in Setting Compensation Plans and
Programs";
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the
Governance Committee
reviews
the responsibilities of each Board committee to ensure that all significant risk categories are overseen by at least one committee and ensures our company's sales practices are aligned with our stated
values, strategy and risk appetite; and
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the
Risk Management Committee
is
primarily responsible for oversight of overall enterprise risk, including credit, interest rate, liquidity, market, operational, compliance, Bank Secrecy Act/Anti-Money Laundering, strategic,
reputation and other key risks faced by the company. The Risk Management Committee is also responsible for reviewing and evaluating significant capital expenditures and potential mergers and
acquisitions.
In
addition, 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; starting in 2017,
the Capital Planning Committee
will be included in this joint session. Finally, at each meeting of the full Board of Directors, each committee gives a detailed review of the matters it discussed and conclusions it reached during
its recent meetings.
Each
Board committee carries out its responsibilities using reports from management containing information relevant to the risk areas under that committee's oversight. The committees must therefore be
confident that an appropriate risk
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Corporate Governance
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monitoring
structure is in place at the management level in order to be provided accurate and useful informational reports. The management-level risk oversight structure is robust. Our company relies
on comprehensive risk management processes to identify, aggregate and measure, manage, and monitor risks. This system enables the Board of Directors to establish a mutual understanding with management
of the effectiveness of our company's risk management practices and capabilities, to review our company's risk exposure and to elevate certain key risks for discussion at the Board level. A framework
exists to account for the introduction of emerging risks or any increase in risks routinely taken, which would either be largely controlled by the risk limits in place or identified through the
frequent risk reporting that occurs throughout our company.
The
Executive Risk Committee
, which is chaired by the Chief Risk Officer and which includes the CEO and other
members of the executive management team, oversees execution against the risk management framework and risk appetite statement. The Executive Risk Committee meets monthly, and more
frequently when circumstances merit, to provide executive management oversight of our risk management framework, assess appropriate levels of risk exposure and actions that may be required for
identified risks to be adequately mitigated, promote effective management of all risk categories, and foster the establishment and maintenance of an effective risk culture. The Executive Risk
Committee members manage large, sophisticated groups within our company that are dedicated to controlling and monitoring risk to the levels deemed appropriate by the Board of Directors and executive
management. These individuals, together with our company's controller, treasurer and others, also provide the Board's committees with the information the committees need and request in order to carry
out their oversight responsibilities.
The
Executive Risk Committee focuses on current and emerging risks, including strategic and reputational risks, directing timely and comprehensive actions. The following senior operating committees
have also been established, each responsible for overseeing a specified category of risk:
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the
Asset and Liability Management
Committee
ensures that the policies, guidelines and practices established to manage our financial risks, including interest rate risk, market risk, liquidity
risk, operations risk and capital adequacy, are followed;
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the
Capital Management Operating
Committee
provides oversight of the company's programs related to stress testing, capital planning and capital adequacy, and resolution and recovery, as well
as oversight of the company's compliance with capital regulation;
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the
Compliance Risk Management
Committee
provides direction regarding the management of compliance risk to the company's business lines and risk management programs and shares institutional
knowledge regarding compliance risk management and mitigation across the company;
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the
Disclosure Committee
assists
the CEO and the CFO in fulfilling their responsibilities for oversight of the accuracy and timeliness of the disclosures made by the company;
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the
Enterprise Financial Crimes Compliance Operating
Committee
is responsible for the management and implementation of the company's program on enterprise financial crimes across business lines to ensure a
consistent control infrastructure and culture of compliance throughout the company;
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the
Enterprise IT Governance
Committee
ensures that delivery of the company's information technology services, including information security and business continuity, are aligned with the
company's priorities and risk appetite;
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the
Executive Credit Management Group
ensures that products
that have credit risk are supported by sound credit practices; reviews asset quality, trends, portfolio performance statistics and loss forecasts; and
reviews and adjusts credit policies accordingly;
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the
Incentive Review Committee
reviews and evaluates all of our company's incentive compensation programs and policies for risk sensitivity and mitigation;
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the
International Risk Oversight
Committee
is responsible for overseeing the company's foreign operations and cross-border activity;
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the
Operational Risk Committee
provides direction and oversight of the company's operational risk management framework and corporate control programs, including significant operational risk events;
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Bancorp
2017
Proxy
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the
Reputation Risk Operating
Committee
is dedicated to the oversight of risk associated with activities and issues that may negatively impact the reputation of the company;
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the
Sales Culture Oversight
Committee
oversees and provides direction regarding a coordinated and unified approach to risks associated with sales practices and services at the company;
and
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the
Trust Management Committee
oversees the fiduciary activities of the Wealth Management and Securities Services business line.
The
company's Board and management-level committees are supported by a "three lines of defense" model for establishing effective checks and balances. The first line of defense, the business lines,
manages risks in conformity with established limits and policy requirements. In turn, business leaders and their risk officers establish programs to ensure conformity with these limits and policy
requirements. The second line of defense, which includes the Chief Risk Officer's organization as well as policy and oversight activities of corporate support functions, translates risk appetite and
strategy into actionable risk limits and policies. The second line of defense monitors the first line of defense's compliance with limits and policies, and provides reporting and escalation of
emerging risks and other concerns to senior management and the Risk Management Committee of the Board of Directors. The third line of defense, internal audit, is responsible for providing the Audit
Committee and senior management with independent assessment and assurance regarding the effectiveness of the company's governance, risk management, and control processes.
Board Leadership Structure
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Board Leadership Policies and Practices
Our Board believes that a strong, independent Board of Directors is critical to effective oversight of management. The Board regularly and carefully considers
the critical issue of the best independent leadership structure for the Board, and maintains a flexible policy regarding the issue of whether the position of Chairman should be held by an independent
director. At least annually, the Board reviews the Board's and company's needs and the leadership attributes of its directors and executives to determine whether our company is best served at that
particular time by having the CEO or another director hold the position of Chairman.
In
order to ensure strong independent Board leadership when the position of Chairman is not held by an independent director, the independent directors elect a Lead Director with the substantial
leadership responsibilities detailed below. The Lead Director is elected annually upon the recommendation of the Governance Committee, with the expectation that he or she will generally serve three,
and may serve up to five, consecutive terms.
In
addition to strong independent leadership of the full Board, each of the Audit Committee, Governance Committee, and Compensation Committee is composed solely of independent directors. This means
that independent directors oversee critical, risk-sensitive matters such as the quality and integrity of our financial statements; the compensation of our executive officers, including the CEO; the
nomination of directors; and the evaluation of the Board, its committees, and its members. Each of the full Board and these key committees meet in executive session on a regular basis.
Leadership Decisions in 2017
Richard K. Davis has served as our CEO since December 2006 and as Chairman since December 2007. On the date of the annual meeting, Andrew Cecere, our current
President and Chief Operating Officer, who has 31 years of experience with the company, will become CEO and Mr. Davis will continue serving as Chairman of the Board. Mr. Cecere
has been serving as a director, and David B. O'Maley has been serving as the Board's independent Lead Director, since January 2017.
The
independent directors believe that Mr. Davis's continued leadership of the Board will constitute a valuable resource to the Board and Mr. Cecere, and will help facilitate a smooth
transition of the CEO role. In addition, having the former CEO serve as Executive Chairman and having the incoming CEO serve as a director will create a strong bridge between the Board and management
during the transition. The Board will also continue to benefit from the independent leadership provided by a strong Lead Director. More information about the Executive Chairman and Lead Director roles
and the leaders in those positions follows.
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Corporate Governance
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Executive Chairman
Mr. Davis, who has 24 years of experience at U.S. Bancorp, including 12 years as President and 10 years as CEO, has the knowledge,
expertise and experience to understand and clearly articulate to the Board the opportunities and risks facing U.S. Bancorp and to lead discussions on important matters affecting our business.
The
primary responsibilities of the Executive Chairman will be as follows:
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set Board meeting agendas in collaboration with the CEO and Lead Director, who has final approval authority;
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preside at Board meetings;
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provide support and advice on Board matters to the incoming CEO;
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help ensure that the Board is provided with full information on the company and its industry;
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set shareholder meeting agendas in collaboration with the CEO, and preside at meetings of the shareholders; and
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chair the Board's Executive Committee.
Lead Director
Mr. O'Maley brings a wealth of experience in the financial services industry and on our Board to his new role as Lead Director. As the former Chairman
and CEO of a large financial services company, Mr. O'Maley contributes substantial financial industry and risk management expertise to the Board. He is one of our longer-tenured directors, has
served as Chair of the Compensation Committee, and is currently a member of the Compensation and Governance Committees, as well as the Executive Committee. He was elected Lead Director by the
independent directors after the completion of the expected three-year tenure of Mr. Collins as the company's previous Lead Director.
Role of Lead Director
The Board recognizes the importance of strong independent leadership. Accordingly, it entrusts the Lead
Director with the following responsibilities and authority:
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lead executive
sessions of the Board's independent or non-management directors, and preside at any session of the Board where the Chairman is not
present;
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act as a regular
communication channel between our independent directors and the CEO;
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approve the Board
meeting agendas;
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approve Board
meeting schedules to ensure there is sufficient time for discussion of all agenda items;
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approve
information sent from management to the Board;
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as appropriate, be
the representative of the independent directors in discussions with our major shareholders regarding their concerns and
expectations;
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as appropriate,
call special Board meetings or special meetings of the independent directors;
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approve, on behalf
of the Board, the retention of consultants who report directly to the Board;
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assist the Board
and company officers in assuring compliance with and implementation of our Corporate Governance
Guidelines;
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advise the
independent Board committee chairs in fulfilling their designated roles and responsibilities to the Board;
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review shareholder
communications addressed to the full Board or to the Lead Director;
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interview all
Board candidates and make recommendations to the Governance Committee and the Board; and
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communicate, as appropriate, with the company's regulators.
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Bancorp
2017
Proxy
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Table of Contents
Corporate Governance
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Majority Vote Standard for Election of Directors
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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. 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.
If
each member of the Governance Committee fails to receive the required vote in favor of his or her election in the same election, then those independent directors who did receive the required vote
will appoint a committee amongst themselves to consider the resignations and recommend to the Board whether to accept them. However, if the only directors who received the required vote in the same
election constitute three or fewer directors, all directors may participate in the decision regarding whether to accept the resignations.
Each
director nominee named in this proxy statement has tendered an irrevocable, contingent resignation as a director in accordance with our Corporate Governance Guidelines, which resignation will
become effective if he or she fails to receive the required vote for election at the annual meeting and the Board accepts his or her resignation.
Policy Regarding Service on Other Boards
Our Board of Directors has established a policy that restricts our directors from serving on the boards of directors of more than three public companies in
addition to their service on our Board of Directors unless the
Board determines that such service will not impair their service on our Board. Currently, no director exceeds this restriction.
Policy Regarding Attendance at Annual Meetings
Board members are expected to attend all annual meetings of shareholders in person. All of our directors attended last year's annual meeting of shareholders.
Director Transition Policy
Our Governance Committee annually reviews each director's contributions to the Board and considers each director's effectiveness and the composition of the
Board during the annual review process. The Board believes that any director's continued service on the Board should also be evaluated for continued 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 reaches the age of 72.
Succession Planning and Management Development
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A
primary responsibility of the Board is planning for succession with respect to our company's CEO, as well as overseeing succession planning for other senior management positions.
The Board's process targets the building of enhanced management depth, considers continuity and stability within our company, and responds to our company's evolving needs and changing circumstances.
Toward that goal, the executive talent development and succession planning process is integrated into the Board's annual activities.
The
Board works with the Governance Committee to evaluate a number of potential internal and external candidates as successors to the CEO, and considers emergency, temporary scenarios as well as
long-term succession. The Compensation Committee is responsible for reviewing succession planning for executive officer positions other than the CEO. The CEO makes available to the Board his or her
recommendations and evaluations of potential successors, along with a review of any development plans recommended for those individuals.
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Bancorp
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Certain Relationships and Related Transactions
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Certain Relationships and Related Transactions
Review of Related Person Transactions
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The
Board has adopted a written Related Person Transactions Policy for the review, evaluation and approval or ratification of transactions between our company and its related
persons. "Related persons" under this policy include our directors, director nominees, executive officers, holders of more than 5% of our common stock, and their respective immediate family members.
Their "immediate family members" include children, stepchildren, parents, stepparents, spouses, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and any
person (other than a tenant or employee) sharing the person's household.
Except
as described below, the policy requires the Governance Committee of the Board to review and evaluate and either approve or disapprove all transactions or series of transactions in
which:
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the amount involved will, or may be expected to, exceed $120,000 in any fiscal year;
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our company is or will be a participant; and
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a related person has a direct or indirect interest.
The
Board has determined that the Governance Committee does not need to review or approve certain transactions even if the amount involved will exceed $120,000, including the following
transactions:
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lending and other financial services transactions or relationships that are in the ordinary course of business and
non-preferential, and comply with applicable laws;
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transactions in which the related person's interest derives solely from his or her services as a director of, and/or
his or her ownership of less than ten percent of the equity interest (other than a general partner interest) in, another corporation or organization that is a party to the transaction;
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transactions in which the related person's interest derives solely from his or her ownership of a class of equity
securities of our company and all holders of that class of equity securities received the same benefit on a pro rata basis;
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transactions where the rates or charges involved are determined by competitive bids, or that involve the rendering of
services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority; and
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employment and compensation arrangements for any executive officer and compensation arrangements for any director,
provided that such arrangements have been approved by the Compensation Committee.
When
considering whether to approve or ratify a transaction, the Governance Committee will consider facts and circumstances that it deems relevant to its determination,
including:
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the nature and extent of the related person's interest in the transaction;
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whether the transaction is on substantially the same terms as those prevailing at the time for comparable transactions
with persons not affiliated with our company;
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the materiality of the transaction to each party;
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whether our company's Code of Ethics could be implicated, including whether the transaction would create a conflict of
interest or appearance of a conflict of interest;
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whether the transaction is in the best interest of our company; and
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in the case of a non-employee director, whether the transaction would impair his or her independence.
No
director is allowed to participate in the deliberations or vote on the approval or ratification of a transaction if that director is a related person with respect to the transaction under review.
On an annual basis the Governance Committee assesses all ongoing relationships with related persons to confirm that the transactions are still appropriate.
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Bancorp
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Certain Relationships and Related Transactions
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Related Person Transactions
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Lending Transactions
During 2016, U.S. Bancorp and our banking and investment subsidiaries engaged in transactions in the ordinary course of business with some of our directors,
executive officers and the persons that we know beneficially owned more than 5% of our common stock on December 31, 2016, and the entities with which they are associated. All loans and loan
commitments and any transactions involving other financial products and services in connection with these transactions were made in the ordinary course of business, on substantially the same terms,
including current interest rates and collateral, as those prevailing at the time for comparable transactions with others not related to our banking and investment subsidiaries and did not involve more
than the normal risk of collectibility or present other unfavorable features.
Transactions with Entities Affiliated with Directors or Executive Officers
During 2016, U.S. Bank operated 33 branches and 69 ATMs in grocery stores owned by Schnuck Markets, Inc., of which Craig D. Schnuck, one of our
directors, beneficially owns approximately 13% of the outstanding capital stock. Mr. Schnuck's sister, Nancy A. Diemer, and his four brothers, Scott C. Schnuck, Todd R. Schnuck, Mark J. Schnuck
and Terry E. Schnuck, each beneficially own approximately 13% of the outstanding capital stock of Schnuck Markets as well. In addition, each of Mr. Schnuck's brothers is a director of, and
holds the following officer positions with, Schnuck Markets: Scott C. Schnuck, Chairman of the Executive Committee; Todd R. Schnuck, Chairman and Chief Executive Officer; Mark J. Schnuck, Vice
President; and Terry E. Schnuck, Assistant Secretary. Rent and fee payments by U.S. Bank to Schnuck Markets were approximately $2.8 million in 2016. The consolidated gross revenues of Schnuck
Markets in 2016 were approximately $2.7 billion. These transactions were conducted at arm's length in the ordinary course of business of each party to the transaction. As discussed above under
the heading "Corporate Governance Director Independence," the Board of Directors has determined that this relationship is immaterial to Mr. Schnuck, and that
Mr. Schnuck is an independent director.
During
2016, we paid Little & Co., a design and branding agency, approximately $1.7 million in professional fees for brand strategy and design work. The President of
Little & Co. is the brother of Andrew Cecere, who is currently our President and Chief Operating Officer and a director and who will begin serving as our CEO on April 18, 2017.
The selection of Little & Co. was made based on our regular sourcing and competitive bidding process, without the involvement of Mr. Cecere. The fees we paid to
Little & Co. were negotiated on an arm's length basis and were not material to our 2016 marketing and advertising expense. The branding work concluded in 2016, and we do not intend to
continue the engagement or to have Little & Co. bid for future work, in order to avoid the appearance of any conflict of interest with Mr. Cecere.
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Bancorp
2017
Proxy
Statement
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Table of Contents
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Compensation Discussion and Analysis
|
Compensation Discussion and Analysis
This section explains how we compensated the individuals who served as our CEO or CFO for all or a part of 2016 and each of our three other
most highly compensated executive officers for 2016 (our named executive officers, or "NEOs"):
-
▶
-
Richard K. Davis
, who serves as
Chairman and Chief Executive Officer;
-
▶
-
Terrance R. Dolan
, who has served
as Vice Chairman and Chief Financial Officer since August 1, 2016; Mr. Dolan previously served as Vice Chairman, Wealth Management and Securities Services;
-
▶
-
Kathleen A. Rogers
, who served as
our Vice Chairman and Chief Financial Officer until August 1, 2016; Ms. Rogers has remained an employee of our company after stepping down from her executive role;
-
▶
-
Andrew Cecere
, who serves as
President and Chief Operating Officer;
-
▶
-
P.W. (Bill) Parker
, who serves as
a Vice Chairman and is our Chief Risk Officer; and
-
▶
-
Jeffry H. von Gillern
, who serves
as Vice Chairman, Technology and Operations Services.
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Table of Contents
Compensation Discussion and Analysis
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Executive Compensation Highlights
|
The
following table sets forth the components of our NEOs' total direct compensation and results for 2016:
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Component
|
|
How It Works
|
|
2016 Actions and Results
|
|
|
Base Salary
|
|
Salary levels are intended to reward experience and demonstrated skills and competencies relative to the market value of the position
|
|
Several of the NEOs received raises, which were largely designed to better align their base salaries with those of similarly situated executives in our peer group.
|
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Annual Cash Incentive Compensation
|
|
▶
Target award amounts are set as a percentage of each NEO's base salary
▶
Earnings per share ("EPS") is the performance metric for the corporate component (weighted
35%)
|
|
The cash incentive awards for 2016 performance that were paid to the NEOs who served as executive officers
for the whole year ranged from 96.3% to 96.7% of their individual target award amounts.
|
|
|
|
|
▶
Pretax income is the performance metric for the business line component (weighted 65%)
▶
Individual
performance and sensitivity to risk during the year can modify payout amounts
|
|
These payout levels were primarily based on corporate EPS results of 96.7% of target performance and
business line pretax income results that ranged from 62.7% to 116.9% of target performance.
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Long-Term Incentive Compensation
|
|
Performance-Based Restricted Stock Units
(75% of total annual grant value)
▶
Return on
average common equity ("ROE"), measured on both an absolute and relative basis, is the performance metric
▶
One-year performance period provides the executives with a clear line of sight, while a
four-year ratable vesting period fosters a long-term perspective
▶
Depending on performance, 0% to 125% of the target number of units may be earned
|
|
All of our NEOs received a more valuable long-term incentive award in 2016 as part of our company's one-time
Appreciation Award program for all employees. Under this program, the Compensation Committee enhanced the value of our NEOs' long-term incentive awards by 10%. In addition, several NEOs received equity awards of increased value to better align their
long-term incentive awards with those of similarly situated executives in our peer group.
|
|
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|
Stock Options
(25% of total annual grant value)
▶
Non-qualified
stock options with four-year ratable vesting and a ten-year term
▶
Exercise price equal to the fair market value of a share of our common stock on the date of grant
|
|
Based on absolute and relative ROE results in 2016, the NEOs earned 106.1% of the target number of
performance-based restricted stock units ("PRSUs") granted to them in early 2016.
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Bancorp
2017
Proxy
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Table of Contents
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Compensation Discussion and Analysis
|
High Percentage of At-Risk Compensation
A high percentage of our NEOs' total direct compensation is dependent on our company's financial performance, both in the year in which the
compensation is granted and in the long term. This structure provides our NEOs with incentives that are in line with the interests of our other shareholders.
The
charts below show the percentage of our NEOs' 2016 total direct compensation, at target levels, that was dependent on our company's financial performance when awarded. (The chart for non-CEO NEOs
is based on target compensation for the incumbent NEOs at the time the decisions were made in January 2016. Numbers in that chart do not add up to 100% because of rounding.)
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CEO Target Pay Mix
|
|
Other NEO Target Pay Mix (average)
|
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|
Rigorous Performance Goals
The Board establishes financial targets at the beginning of the fiscal year for our company's EPS and ROE performance and our business lines' pretax income
performance. The Compensation Committee applies these targets to the executive officers' annual cash incentive awards and PRSUs, with the intent that they be challenging yet reasonably achievable
goals.
Strong Corporate and Financial Performance
The Compensation Committee believes that the company's compensation structure has been effective at encouraging the achievement of superior financial and
operating results relative to our peers in an uncertain economic environment, while maintaining reasonable risk tolerances.
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Compensation Discussion and Analysis
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In
2016, our company again led its peer group in the most commonly used performance metrics for the banking industry, despite lackluster economic growth and an unfavorable interest rate backdrop.
|
|
|
#1 in Return on Average Assets
1
|
|
#1 in Return on Average Common Equity
1
|
|
|
|
#1 in Efficiency Ratio
1,
2
-
1.
-
Source: Company
reports. The peer companies included in these bar graphs are listed under the heading "Peer Group Composition" on page 43 of this proxy statement.
-
2.
-
Efficiency ratio
computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding securities gains (losses). See Non-GAAP Financial Measures on
page 79.
Our consistent superior financial performance over time has increased long-term value for
our shareholders.
Total Shareholder Return
3
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1-Year
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|
3-Year
|
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|
5-Year
|
|
|
10-Year
|
|
|
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U.S. Bancorp
|
|
|
23.4%
|
|
|
10.9%
|
|
|
16.4%
|
|
|
6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KBW Bank Index (BKX)
|
|
|
28.5%
|
|
|
12.2%
|
|
|
20.9%
|
|
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S&P 500 Index
|
|
|
11.9%
|
|
|
8.9%
|
|
|
14.6%
|
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
3.
-
Source: FactSet and
Bloomberg as of December 31, 2016. Reflects annualized returns.
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31
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Bancorp
2017
Proxy
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Table of Contents
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Compensation Discussion and Analysis
|
Sound Compensation Practices
Our executive compensation program incorporates many strong governance features, including the following:
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Bancorp
2017
Proxy
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32
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Table of Contents
Compensation Discussion and Analysis
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Philosophy and Objectives of Our Executive Compensation Program
|
Compensation Program Goals
The Compensation Committee has designed the executive compensation program to attract, motivate, reward and retain the management talent required to achieve
our corporate objectives and increase shareholder value, while at the same time making the most efficient use of our resources and strongly emphasizing pay for performance.
The
Compensation Committee achieves these objectives through a compensation package that:
-
▶
-
links a significant portion of total compensation to corporate, business line and individual performance, which we
believe will create long-term shareholder value;
-
▶
-
provides total compensation that is market competitive, permitting us to hire and retain high-caliber individuals at
all levels of management;
-
▶
-
emphasizes stock-based compensation, encouraging our executive officers to think and act as long-term shareholders;
-
▶
-
subjects equity awards to multi-year vesting in order to enhance executive retention 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.
Pay for Performance
U.S. Bancorp operates in a highly complex business environment, where it competes with many well-established financial institutions. Our long-term business
objective is to maximize shareholder value by consistently delivering superior returns on common equity that exceed the cost of equity. If we are successful in achieving this objective, the
Compensation Committee believes the results will benefit our shareholders.
Accordingly,
our executive compensation program is designed to reward our executives for achieving annual and long-term financial results that further our long-term business objective. The annual cash
incentive plan rewards performance relative to corporate and business line financial plans established at the beginning of the fiscal year, and the PRSUs are earned based on achievement of ROE targets
that are also established at the beginning of the fiscal year and that directly measure the return generated by the company on its shareholders' investment. At the same time, the Compensation
Committee carefully weighs the risks inherent in these programs against the goals of the programs and the company's risk appetite. Additional discussion of the risk oversight undertaken by the
Compensation Committee can be found below under "Decision Making and Policies Risk Considerations in Setting Compensation Plans and Programs."
Compensation Elements
Our executive officers' total direct compensation consists of three elements: base salary, annual cash incentive compensation, and long-term incentive
compensation (75% of which is payable in PRSUs and 25% of which is payable in stock options). Each of these elements of total direct compensation is described in detail below. Our Compensation
Committee emphasizes long-term incentive compensation for the reasons discussed above but does not have a firm policy regarding allocation of compensation amounts among the elements. When evaluating
an executive officer's compensation compared to market levels and those of other members of our company's executive officer group, the Compensation Committee considers both the value of each element
and of the total direct compensation package.
Executive
officers are also eligible to receive health benefits under the same plans available to our other employees, matching contributions to their U.S. Bank 401(k) Savings Plan accounts on the
same basis as our other employees, and retirement benefits that are earned over their career with the company. Perquisites for executive officers are limited, consisting primarily of financial
planning expenses, home security, parking and executive physicals. Executive officers do not receive gross-up payments for tax liabilities resulting from perquisites.
In
2016 we terminated legacy severance agreements that several of our executive officers had held. Those agreements had provided cash benefits in the event of a termination of employment in connection
with a change-in-control of the company and included excise tax gross-up payments. Equity awards can be accelerated on a double-trigger basis, as
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33
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2017
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Table of Contents
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Compensation Discussion and Analysis
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described
in "Potential Payments Upon Termination or Change-in-Control," but the executive officers are no longer entitled to receive any cash benefits upon any employment termination scenario that
does not involve death or disability.
The
Compensation Committee considers the salary of executive officers relative to those executives' peers in our industry and will make market-based adjustments as it deems
appropriate. Salaries can also be adjusted to reflect experience and tenure in a position, internal pay equity within the executive officer group, increased scope of responsibilities and individual
performance.
2016 Actions and Results:
In January 2016, the Compensation Committee increased the base salaries of several of the incumbent NEOs from their 2015
amounts as follows:
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|
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|
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|
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|
|
|
NEO
|
|
2016 Base Salary
|
|
2015 Base Salary
|
|
% Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard K. Davis
|
|
|
$
|
1,400,000
|
|
|
|
$
|
1,300,000
|
|
|
|
7.7
|
%
|
|
|
|
|
|
|
|
|
|
Kathleen A. Rogers
|
|
|
$
|
575,000
|
|
|
|
$
|
475,000
|
|
|
|
21.1
|
%
|
|
|
|
|
|
|
|
|
|
Andrew Cecere
|
|
|
$
|
800,000
|
|
|
|
$
|
750,000
|
|
|
|
6.7
|
%
|
|
|
|
|
|
|
|
|
|
P.W. (Bill) Parker
|
|
|
$
|
625,000
|
|
|
|
$
|
625,000
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
Jeffry H. von Gillern
|
|
|
$
|
575,000
|
|
|
|
$
|
550,000
|
|
|
|
4.5
|
%
|
|
|
|
|
|
|
|
|
|
These raises were largely motivated by market alignment considerations. In particular, Ms. Rogers's salary was increased by a relatively high percentage to bring her
compensation into alignment with compensation paid to other CFOs in our industry. Ms. Rogers had been serving in the CFO role for only one year at the time of this increase, which was put in
place as part of a multi-year plan to achieve market alignment incrementally. Her base salary was subsequently decreased when she stepped down from her executive role in August
2016.
When Mr. Dolan was promoted from Vice Chairman, Wealth Management and Securities Services, to Vice Chairman and Chief Financial Officer in August 2016, his annual base
salary was increased from $525,000 to $575,000 to reflect his increased responsibilities.
Annual Cash Incentive Awards
|
How We Determine Our NEOs' Annual Cash Incentive Awards
All management-level employees, including the NEOs and our other executive officers, have the opportunity to earn annual cash incentive awards that reflect
their responsibility levels and reward achievement of corporate and business line goals. The awards made to our NEOs are granted under our 2006 Executive Incentive Plan (the "EIP").
The
formula for calculating each NEO's
Annual Cash Incentive Payout
consists of the following
elements:
-
▶
-
Each NEO's
Target Award Amount
,
which is set by the Compensation Committee as a percentage of his or her base salary (
Target Award
Percentage
×
Base Salary
)
-
▶
-
The
Bonus Funding Percentage
applicable to each NEO, which includes a combination of corporate and business line performance metrics
-
▶
-
The Compensation 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
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U.S.
Bancorp
2017
Proxy
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34
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Table of Contents
Compensation Discussion and Analysis
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|
Setting the Target Award Amounts
The Target Award Amount for each executive officer is based on the officer's level of responsibility within the organization as well as market-based and
internal pay equity considerations.
2016 Actions and Results:
In January 2016, the Compensation Committee set the following Target Award Percentages for the NEOs, which in each case would
be applied to the NEO's base salary to determine his or her Target Award Amount:
|
|
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|
|
NEO
|
|
|
Target Award Percentage
|
|
|
|
|
|
|
Richard K. Davis
|
|
|
225
|
%
|
|
|
|
|
|
Andrew Cecere
|
|
|
150
|
%
|
|
|
|
|
|
Terrance R. Dolan
Kathleen A. Rogers
P.W. (Bill) Parker
Jeffry H. von Gillern
|
|
|
125
|
%
|
|
|
|
|
|
These levels were not changed from the NEOs' 2015 Target Award Percentages. The percentage of Ms. Rogers's base salary used to calculate her annual cash incentive award
was subsequently decreased when she stepped down from her executive role in August 2016.
Mr. Dolan's Target Award Percentage did not change when he was promoted to CFO. His Target Award Amount for 2016 was calculated using his increased base salary, however
(125% × $575,000).
Calculating the Bonus Funding Percentage
Each year, the Compensation Committee targets an aggregate amount of annual cash incentive awards to be granted to all management-level employees in each
business line. The actual size of the pool that funds payouts can range from 0% to 200% of the target amount (the
Bonus Funding
Percentage
) based on the company's and the business line's performance against EPS and pretax income targets included in the annual financial plan. The Board
establishes these financial targets at the beginning of the fiscal year with the intent that they be challenging yet reasonably achievable goals.
The
Bonus Funding Percentage for each of our revenue-producing business lines is based on the company's EPS performance compared to the target amount in the annual financial plan (weighted 35%) and
that business line's pretax income performance compared to the target amount in the annual financial plan (weighted 65%); for each of the business lines in a support function, the 65% of the Bonus
Funding Percentage assigned to pretax income performance is calculated based on the weighted average results of all of the revenue-producing business lines in their group. The calculation is described
in detail below. Adjustments may be made to EPS or pretax income results to mitigate anomalies so that the results more realistically reflect the company's or business line's performance.
The
Compensation Committee believes that EPS and business line pretax income are appropriate performance metrics for the executive officers' annual cash incentive awards for the following
reasons:
-
▶
-
EPS is an important indicator of profitability that aligns 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 business line pretax income targets are the fundamental drivers of the company's revenues and income before taxes;
-
▶
-
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; and
-
▶
-
the Compensation Committee values the clear alignment of incentives for executive officers and other management-level
employees resulting from shared performance metrics.
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Compensation Discussion and Analysis
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The
Bonus Funding Percentage for each business line is calculated as follows:
-
▶
-
The percentages by which actual corporate EPS differs from the EPS target and actual business line pretax income
differs from target pretax income are each multiplied by a leverage factor of four to magnify the positive or negative variation of actual results. For example, if the actual corporate EPS were 5%
greater than the EPS target, the formula would multiply 5% by four to arrive at 20%. The 20% would then be added to 100% to get the
EPS Bonus Funding
Result
of 120%. If the actual business line pretax income were 3% below target, the formula would multiply 3% by four to arrive at 12%. The 12% would then be
subtracted from 100%, resulting in a
Pretax Income Bonus Funding Result
of 88%. Neither the EPS Bonus Funding Result
nor the Pretax Income Bonus Funding Result may be less than 0% or greater than 200%.
-
▶
-
The EPS Bonus Funding Result is multiplied by 35% to yield the
Corporate
Component
, and the Pretax Income Bonus Funding Result is multiplied by 65% to yield the
Business Line
Component
.
-
▶
-
The Corporate Component is then added to the Business Line Component to arrive at the
Bonus
Funding Percentage
for that business line. For example, a 120% EPS Bonus Funding Result weighted 35% and an
88% Pretax Income Bonus Funding Result weighted 65% results in a Bonus Funding Percentage of 99.2%.
The
Bonus Funding Percentage used for most annual cash incentive plan participants in corporate-wide support functions that do not produce revenue the
Overall Bonus Funding Percentage
is calculated slightly differently, with 35% based on the EPS
Bonus Funding Result and 65% based on the weighted average Pretax Income Bonus Funding Results of all of the company's business lines.
2016 Actions and Results:
Actual EPS was $3.24, compared to the target level of $3.35. After applying the leverage factor to the difference between
target and actual EPS, the EPS Bonus Funding Result was 88.3%.
Pretax income results ranged from 62.7% to 116.9% of target performance across our company's 29 revenue-producing business lines, which generated Pretax Income Bonus Funding
Results of 0% to 167.7% following application of the leverage factor. The weighted average Pretax Income Bonus Funding Results of all of the company's business lines, which was used to calculate the
Overall Bonus Funding Percentage following application of the leverage factor, was 101.2%.
After applying the 35% weighting to the EPS Bonus Funding Result of 88.3% and the 65% weighting to the applicable Pretax Income Bonus Funding Result and adding them together,
the Bonus Funding Percentages for the 29 revenue-producing business lines in 2016 ranged from 30.9% to 139.9%. The Overall Bonus Funding Percentage in 2016 was 96.7%.
The Bonus Funding Percentage used in January 2017 to calculate the annual cash incentive awards for executive officers with leadership responsibilities for the entire company
or for a corporate-wide support function in 2016 was the Overall Bonus Funding Percentage. Accordingly, the awards granted to Messrs. Davis, Cecere and Parker were calculated by using the
Overall Bonus Funding Percentage. The Overall Bonus Funding Percentage was also used to calculate Mr. Dolan's award because he had assumed leadership responsibilities for the entire company
during the course of the year. When Ms. Rogers stepped down from her executive role in August 2016, she took a position within a
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business line that has a corporate-wide support function; accordingly, her award calculation was also made by using the Overall Bonus Funding Percentage.
The Bonus Funding Percentage for the Technology and Operations Services business line, led by Mr. von Gillern, is calculated differently from all others in that 35% is
based on the EPS Bonus Funding Result, 50% is based on the weighted average Pretax Income Bonus Funding Results of all of the company's revenue-producing business lines, and 15% is based on that
business line's expense management performance compared to plan. The Compensation Committee considers expense management to be particularly important to Technology and Operations Services because this
business line has responsibility for a significant portion of the company's overall expenditures.
The resulting Bonus Funding Percentages were as follows for the NEOs:
|
|
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NEO
|
|
Bonus Funding Percentage
|
|
|
|
Richard K. Davis
Terrance R. Dolan
Kathleen A. Rogers
Andrew Cecere
P.W. (Bill) Parker
|
|
96.7% (the Overall Bonus Funding Percentage)
|
|
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|
Jeffry H. von Gillern
|
|
96.3% (the Bonus Funding Percentage for the Technology and Operations Services business line, for which Mr. von Gillern has responsibility)
|
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|
Factoring in Individual Performance and Risk Sensitivity
The Compensation Committee considers the performance of the business lines managed by each executive officer and that executive officer's individual
performance during the year. The Bonus Funding Percentage to be applied to an executive's Target Award Amount can be adjusted downward as well as upward based on these performance reviews. The
Compensation Committee also uses a formal "risk scorecard" analysis, which can result in downward or upward adjustments to the Bonus Funding Percentage to reflect the executives' demonstrated
sensitivity to risk. The Compensation 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 performance improvements are suggested or where inappropriate risk-taking behaviors have occurred.
Individual
performance criteria for all executive officers include performance relative to risk management, leadership, employee engagement, community involvement, involvement in special projects and
new initiatives, and talent management, as well as factors including credit quality and audit, regulatory and compliance results. Finally, the Compensation Committee reviews the level of our corporate
performance relative to our peer group in the principal profitability measures used by the Board in assessing corporate performance, as well as in relative levels of total shareholder return, as a
check on the appropriateness of the award levels in the context of these operational performance measures.
Individual Performance and Risk Sensitivity Modifications Have Been Used Sparingly
Modifications to our NEOs' Bonus Funding Percentage based on their individual performance and risk
sensitivity have historically been modest in scope and have resulted in decreased award payouts more often than increased payouts.
NEOs during 20132015, for example, collectively received increases three times, resulting in modifications of +4%, +5%, and +10%, and
received decreases six times, resulting in modifications of 3%, 5% (three awards), and 7% (two awards). As described below, no such
modifications were made in 2016.
2016 Actions and Results:
The Compensation Committee determined that each NEO's applicable Bonus Funding Percentage appropriately reflected that
executive's performance and contribution to the company in 2016. Accordingly, no performance-based modifications were made to the NEOs' Bonus Funding Percentages. An analysis of the NEOs' risk
scorecard results also yielded no modifications.
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Compensation Discussion and Analysis
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The resulting Annual Cash Incentive Payouts for 2016 were as follows for the NEOs serving in their executive roles at the time of the payout calculation in January
2017:
|
|
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|
|
|
|
|
|
|
|
|
NEO
|
|
Percentage of Target
Award Amount Paid Out
|
|
Dollar Value
of Payout
|
|
|
|
|
|
|
|
|
|
|
|
Richard K. Davis
|
|
|
96.7
|
%
|
|
|
$
|
3,046,050
|
|
|
|
|
|
|
|
|
Terrance R. Dolan
|
|
|
96.7
|
%
|
|
|
$
|
695,031
|
|
|
|
|
|
|
|
|
Andrew Cecere
|
|
|
96.7
|
%
|
|
|
$
|
1,160,400
|
|
|
|
|
|
|
|
|
P.W. (Bill) Parker
|
|
|
96.7
|
%
|
|
|
$
|
755,469
|
|
|
|
|
|
|
|
|
Jeffry H. von Gillern
|
|
|
96.3
|
%
|
|
|
$
|
692,156
|
|
|
|
|
|
|
|
|
As described above, the calculation of Mr. Dolan's Annual Cash Incentive Payout was based on the base salary and Bonus Funding Percentage applicable to him when he was
serving as CFO; his Target Award Percentage did not shift during the year.
Ms. Rogers's Annual Cash Incentive Payout of $466,000 was determined by using a prorated Target Award Amount to reflect the differing base
salaries and Target Award Percentages applicable to the time she spent in her executive and non-executive roles in 2016.
Recoupment of Annual Cash Incentive Payouts
The Compensation Committee will evaluate the facts and circumstances surrounding a restatement of earnings, if any, and, in its sole discretion, may adjust
and recoup cash incentive amounts paid to our CEO, any executive officers or any other employees as it deems appropriate, if attributable to incorrectly reported earnings.
Long-Term Incentive Awards
|
Establishing the Structure and Value of the Equity Awards
The Compensation Committee grants the executive officers equity awards to align their interests with those of long-term shareholders. As in each of the last
several years, 75% of the value of each NEO's long-term incentive award in 2016 was granted in the form of PRSUs, and 25% was granted in the form of stock options. These awards were granted under the
U.S. Bancorp 2015 Stock Incentive Plan.
The
Compensation Committee believes that this award structure provides appropriately balanced incentives. The PRSUs receive more weight to emphasize the critical importance of corporate financial
performance. On the other hand, the stock options add an extra incentive for long-term success because of their ten-year term and also provide more direct alignment with shareholder returns.
PRSUs
are earned according to a formula tied to our one-year ROE performance, as described in detail below. Both earned PRSUs and stock options vest ratably over four years from the grant date, and
PRSU awards are settled in shares of our common stock. Cash dividends on unvested PRSUs are accrued during the performance period, but accrued dividends are only paid after the end of the performance
period on shares actually earned by the executives.
Each
year in January, the Compensation Committee determines the dollar value of that year's long-term incentive awards to be granted to the executive officers, and the grants are made in February. In
setting each year's award amounts, the Compensation 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 concerns, and corporate performance.
2016 Actions and Results:
In January 2016, the Compensation Committee approved a one-time Appreciation Award for all employees. The purpose of the award
was to recognize our employees for their loyalty and commitment in a difficult environment and to align their interests with those of shareholders. Employees whose compensation packages generally do
not include equity awards received a grant of a set number of restricted stock units. Employees in higher pay grades, including the executive officers, received a 10% enhancement in the value of their
long-term incentive award.
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In addition, the Compensation Committee increased the "base" value of the annual equity award to be received by several of the incumbent NEOs from their 2015 amounts as shown
below (values reflect the fair market value of the award on the date of grant):
|
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|
|
|
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|
NEO
|
|
"Base" Value of 2016
Equity Award
(excluding value of
one-time
Appreciation Award)
|
|
Value of 2015
Equity Award
|
|
% Increase
|
|
Total Value of 2016
Equity Award
(including value of
one-time
Appreciation Award)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard K. Davis
|
|
|
$
|
7,750,000
|
|
|
|
$
|
7,750,000
|
|
|
|
0
|
%
|
|
|
$
|
8,525,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A. Rogers
|
|
|
$
|
1,500,000
|
|
|
|
$
|
1,000,000
|
|
|
|
50
|
%
|
|
|
$
|
1,650,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Cecere
|
|
|
$
|
5,250,000
|
|
|
|
$
|
5,000,000
|
|
|
|
5
|
%
|
|
|
$
|
5,775,000
|
|
|
|
|
|
|
|
|
|
|
|
|
P.W. (Bill) Parker
|
|
|
$
|
2,200,000
|
|
|
|
$
|
2,000,000
|
|
|
|
10
|
%
|
|
|
$
|
2,420,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffry H. von Gillern
|
|
|
$
|
1,600,000
|
|
|
|
$
|
1,500,000
|
|
|
|
6.7
|
%
|
|
|
$
|
1,760,000
|
|
|
|
|
|
|
|
|
|
|
|
|
As with the base salary increases described above, the increases in "base" value of the annual equity awards were largely driven by market alignment considerations,
particularly with respect to Ms. Rogers as she began her second year as Vice Chairman and Chief Financial Officer.
In addition to the equity award with a total value of $1,540,000 (including the Appreciation Award) that Mr. Dolan received in February 2016 as Vice Chairman, Wealth
Management and Securities Services, he received an equity award with a value of $100,000 upon his promotion to Vice Chairman and Chief Financial Officer.
Selecting the Performance Metrics and Performance Period for the PRSU Awards
The number of PRSUs earned each year is determined according to a formula that uses a comparison of our actual ROE to target results established in our
company's annual financial plan, as well as our ROE performance relative to that of our peer group companies. 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 prudent management of the tradeoffs between risk and return, requiring 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.
The
Compensation Committee believes that using a one-year performance period for the PRSUs provides important clarity for the NEOs and a strong pay and performance link. The one-year performance
period creates a clear sense that strong leadership and effort will directly affect the number of shares ultimately received. The Compensation Committee has carefully considered using a longer cycle
for its performance-based equity awards, but believes that the continued uncertainty in the economy and the financial industry, as well as the regulatory environment affecting our business,
could have a significant effect on the company's ROE over a longer time horizon that could mute the effects of management performance.
The
link between performance and pay would be weakened and the incentive effect of the award reduced if members of executive management perceived that the relationship between their performance and
the ultimate value of their award may be largely diluted by factors outside of their control. In addition, the PRSUs vest over a four-year period, which encourages executives to improve corporate
performance during this longer period so that the company's stock price, and consequently the value of the award, increase while the award vests.
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Table of Contents
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Compensation Discussion and Analysis
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Determining the Percentage of Target PRSUs Earned
At the time of each PRSU grant, the Compensation Committee establishes a one-year target level for U.S. Bancorp's absolute level of ROE, as well as a sliding
scale of ROE achievement and corresponding incremental increases or decreases in award earn-out amounts. The absolute ROE target aligns with the company's annual financial
plan, which is approved by the company's Board of Directors after consideration of, among other things, the degree of achievability. Target ROE is therefore designed to be a goal that is challenging
yet reasonably achievable.
The
ROE levels used in the PRSU performance matrix established by the Compensation Committee have been lowered over the last several years. These shifts in minimum, target and maximum ROE levels are
directly linked to year-over-year changes in the company's annual financial plans that reflect external pressures on this performance metric. Industry-wide returns on common equity have been pressured
by the impact of persistently low interest rates, sluggish economic growth, higher structural expenses driven by increased regulatory requirements, and higher capital and liquidity constraints imposed
by regulations.
The
Compensation Committee also establishes a sliding scale of ROE achieved relative to the ROE of our financial peer companies (which are listed below under "Peer Group Composition"), with median
performance as the target level and corresponding increases or decreases in award earn-out amounts. The Compensation Committee uses a performance matrix reflecting both the absolute and relative ROE
scales to determine the final PRSU award amounts earned by interpolation using the actual ROE level achieved during the year.
The
Compensation Committee established the following performance matrix at the time the 2016 PRSU awards were granted, providing for the actual award amounts to range from 0% to 125% of the target
number of units in each award:
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|
2016 ROE PERFORMANCE MATRIX
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Target PRSUs Earned
|
|
|
|
|
Company
|
|
|
|
Company ROE of 17.5% or more
|
|
|
|
75%
|
|
112.5%
|
|
125%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROE
|
|
|
|
Company ROE Target (14.0%)
|
|
|
|
50%
|
|
100%
|
|
112.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Result
|
|
|
|
Company ROE of 10.5% or less (but >0%)
|
|
|
|
25%
|
|
50%
|
|
75%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Vertical Axis)
|
|
|
|
Company ROE of 0% or less
|
|
|
|
0%
|
|
0%
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
Peer Group
ROE Ranking
at 25th %ile
or below
|
|
Peer Group
ROE Ranking
at Median
|
|
Peer Group
ROE Ranking
at 75th %ile
or above
|
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|
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|
Peer Group ROE Ranking (Horizontal Axis)
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|
The
Compensation Committee believes that the PRSU earn-out structure provides an important balance between rewarding the achievement of absolute performance goals and strong relative performance. For
example, if our absolute ROE is less than the specified ROE minimum for U.S. Bancorp, the target award number will not be earned, even if our relative ROE is at or above the
75
th
percentile in the peer group ROE ranking. Conversely, if our relative ROE is significantly below the median in the peer group, the executive will earn a below-target number
of units, even if U.S. Bancorp's absolute ROE substantially exceeds the target ROE.
Thus,
executives are not rewarded for poor performance simply because peer group members have even worse performance, nor are they rewarded for exceeding expectations (set at the beginning of the
performance year) 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.
2016 Actions and Results:
Our ROE in 2016 was 13.4%, compared to the target absolute level (on the vertical axis) of
14.0%. In relation to its financial peer group, U.S. Bancorp's 2016 ROE ranked first, which was above the 75th percentile (on the horizontal axis). The final calculation resulted in the number
of PRSUs earned being equal to 106.1% of the target number of units granted.
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The number of units earned by each NEO for 2016 performance, as well as the number of stock options granted to each NEO in 2016, are reported in the Outstanding Equity Awards
at 2016 Fiscal Year-End table later in this proxy statement.
Decision Making and Policies
|
Who Is Involved in Making Compensation Decisions
Executive compensation policy, practices and amounts are determined by the Compensation Committee, which is composed entirely of independent outside
directors. The Compensation Committee has responsibility for setting each component of compensation for our CEO with the assistance and guidance of Frederic W. Cook & Co., Inc.
("FW Cook"), its independent compensation consultant. Our CEO and our executive vice president of human resources, also with the help of FW Cook, develop initial recommendations for all components of
compensation for the executive officers other than the CEO and present their recommendations to the Compensation Committee for review and approval. The Compensation Committee also annually reviews the
total amount and types of compensation paid to non-management members of the Board of Directors and recommends any changes to the independent directors for approval.
The
Compensation Committee retains FW Cook to:
-
▶
-
provide advice regarding compensation program design, competitive practices, market trends and peer group composition;
-
▶
-
make recommendations to the Compensation Committee in setting the pay of our CEO;
-
▶
-
provide the same advisory services to the Compensation Committee and our CEO and executive vice president of human
resources regarding the compensation of the other executive officers; and
-
▶
-
advise the Compensation Committee on director compensation.
FW
Cook does not provide any other services to our company. Following a review of the relationship between the company and FW Cook in 2016, the Compensation Committee concluded that FW Cook's work for
the Compensation Committee does not raise any conflicts of interest.
What Information Is Considered When Determining Compensation
In January of each year, the Compensation Committee takes the following actions with respect to compensation of our executive officers for the previous and
upcoming year:
-
▶
-
calculates the percentage of target PRSUs earned based on the previous year's absolute and relative ROE results;
-
▶
-
determines the Annual Cash Incentive Payout for each executive officer based on the previous year's corporate and
business line performance and after considering whether any modification to the executive's Bonus Funding Percentage is warranted based on his or her individual performance and sensitivity to risk
during the previous year;
-
▶
-
sets the upcoming year's base salary, Target Award Percentage for the annual cash incentive plan, and value and
structure of the long-term incentive award for each executive officer;
-
▶
-
establishes performance and aggregate payout targets for the upcoming year's annual cash incentive plan; and
-
▶
-
establishes the performance matrix for the upcoming year's PRSU awards.
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Table of Contents
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Compensation Discussion and Analysis
|
These
decisions are informed by a year's worth of information gathering and analysis on performance, risk, market practices and shareholder views, as summarized below:
As
indicated above, the Compensation Committee performs several market checks per year in which it assesses the alignment of relative compensation levels within our peer group with relative
performance levels to ensure that our pay levels are competitive with those of the companies with which we compete for executive talent, while remaining reasonable and appropriate. The Committee
believes that the relative compensation of our NEOs within our peer group is appropriate, given U.S. Bancorp's asset size relative to the group and that it has consistently led its peers in the common
industry measures of ROE, ROA and efficiency ratio over many years.
In
making executive compensation determinations, our Compensation Committee has also considered the results of the non-binding, advisory shareholder votes on our executive compensation program in each
year since 2009. Our shareholders approved our executive compensation program in each of those years, most recently approving it by 96.2% of shares present and entitled to vote at our 2016 annual
meeting of shareholders. The Compensation Committee will continue to consider the results from this year's and future advisory shareholder votes regarding our executive compensation program.
In
addition, in 2016 the company continued its annual shareholder engagement program, described on page 18 of this proxy statement, which includes discussion of executive compensation matters with
some of our largest shareholders. The Compensation Committee was mindful of our shareholders' endorsement of the Compensation Committee's decisions and policies to date and decided to retain its
general approach to executive compensation during 2016, with an emphasis on short- and long-term incentive compensation that rewards our most senior executives when they deliver value for our
shareholders.
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Bancorp
2017
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42
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Compensation Discussion and Analysis
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Peer Group Composition
When performing market checks on the level of compensation of our CEO and the other executive officers, the Compensation Committee has been using the same
peer group of financial services companies that management and the Board use for annual financial performance comparisons. This single peer group has been in place since 2009 and is composed of the
following companies, ranked in order of asset size as of December 31, 2016:
2016 U.S. Bancorp Peer Group
|
|
|
▶
JPMorgan Chase & Co.
▶
Bank of America Corporation
▶
Wells
Fargo & Company
▶
U.S. Bancorp
▶
The PNC Financial Services Group, Inc.
|
|
▶
BB&T Corporation
▶
SunTrust Banks, Inc.
▶
Fifth Third
Bancorp
▶
KeyCorp
▶
Regions Financial Corporation
|
This
group was recommended by management and chosen by the Board for financial comparison purposes because these financial institutions, along with U.S. Bancorp, are the ten largest financial services
companies based in the United States that provide broadly comparable retail and commercial banking services, and they are the companies with which we compete for market share across our major business
lines.
Some
of the companies in the peer group are significantly larger than we are, and some are significantly smaller. Within this group, U.S. Bancorp is the fourth largest by asset size, total revenue,
and total deposits. All of these peer companies are included in the KBW Bank Index, which we believe is the most appropriate stock market index to use for financial comparison purposes, and which is
used in the Stock Performance Chart presented on page 145 of our 2016 Annual Report.
Our
Compensation Committee has altered the peer group it is using for performing market checks on executive and director compensation for 2017 and going forward by removing Regions Financial
Corporation and KeyCorp and adding Citigroup and Capital One Financial. The Board does not use Citigroup and Capital One Financial for financial comparison purposes because both companies' business
mix is very different from our company's, but the Compensation Committee has decided to adopt the altered peer group for compensation purposes because it believes that these two institutions are more
meaningful competitors in the marketplace for executive talent than are the two smallest institutions in our financial peer group.
The
Compensation Committee also reviews and uses compensation data from a large group of diversified financial services companies as an additional point of comparison.
Risk Considerations in Setting Compensation Plans and Programs
Overview:
Taking carefully considered risks is an integral part of any business strategy, and our compensation program is not intended to
encourage management decisions that 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. We also structure our compensation program to comply with all relevant regulatory requirements, including, where applicable,
foreign regulations that may be different from those in the United States.
Role of the Incentive Review Committee:
As a large financial services company, we have been subject to a continuing review of incentive
compensation policies and practices undertaken by the Federal Reserve Board since 2009. While participating in that review, we have undertaken a thorough 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 compensation plans
are correctly risk rated, the plans are
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Compensation Discussion and Analysis
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designed
to adequately mitigate risk inherent therein, and the plans are 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 is
responsible for the ultimate review and recommendation of all company incentive plans.
This
committee reviews plan elements such as 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 U.S. Bancorp's goals and objectives and with the company's 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 our 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 procedures 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" analysis measuring adequacy of risk management is undertaken for all senior management-level employees, including the executive officers; all employees who have credit
responsibility and who participate in annual corporate cash incentive plans; and all employees who have been identified by the company as persons able, individually or as part of a group, to 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 Compensation Committee and discussed the areas where compensation-related risks were being
addressed by plan modifications, or were mitigated by internal controls or otherwise.
Role of the Compensation Committee:
The Compensation Committee also conducts an annual risk assessment of the compensation packages and
components for the executive officers. The Compensation Committee assesses the incentives for risk taking contained in the compensation program and balances them with the other goals of the
compensation program. The Compensation Committee meets at that time with members of senior management for a discussion of the material risks our company faces, in order to assess those risks and the
overall risk tolerance of the company approved by the Board of Directors in relation to the levels of risk inherent in the compensation plans and programs and the performance targets set each year.
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In
evaluating the incentives for risk taking in compensation plans and policies for executive officers, the Compensation Committee considered the following risk-mitigating aspects of those plans and
policies:
|
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|
|
Overall 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 four-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.
|
|
|
|
|
Annual Cash Incentive Risk Mitigation Factors
|
|
|
|
|
▶
Broad Corporate Focus:
The award payouts for all participants in the annual cash incentive plan, including our
executive officers, are dependent to a large degree on our corporate EPS performance. This structure provides a common, consistent focus on the achievement of annual goals important to our overall success, while mitigating the incentives to take
excessive risks in order to achieve goals that are more closely linked to individual performance.
|
|
|
|
|
▶
Specific Risk Sensitivity Analysis:
A "risk scorecard" analysis is performed for all senior management-level employees,
including executive officers, and is reviewed by our Incentive Review Committee. The results of this analysis may result in decreases in Annual Cash Incentive Payouts when inadequate risk management is demonstrated.
|
|
|
|
|
▶
Clawback Policy:
The company's incentive compensation "clawback" policy discourages risk taking that would lead to
improper financial reporting.
|
|
|
|
|
Long-Term Incentive Risk Mitigation Factors
|
|
|
|
|
▶
Specific Equity Cancellation Provisions:
The equity award agreements for executive officers contain a provision that
cancels the vesting of equity awards if it is determined that the executive exhibited an inadequate sensitivity to risk that caused a material adverse impact on the company or the executive's line of business.
|
|
|
|
|
▶
Choice of Performance Metric:
The PRSUs use ROE as the measure of corporate performance for determining the final
number of units earned under the award. 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.
|
|
|
|
|
▶
Maximum PRSU Amount Limited to 125% of Target:
The number of units that may be earned under the performance formula is
capped at a modest level, which limits the potential incentive to take excessive risk in order to receive a greater number of shares.
|
|
|
|
|
▶
Sliding Scale Earn-Out Calculation:
The PRSU performance matrix takes into account the amount of variance from the ROE
target and peer group ROE results, mitigating the incentive for excessive risk taking that may result from an "all-or-nothing" award.
|
|
|
|
|
▶
Meaningful Stock Ownership Requirements:
As described below, executives are required to hold significant amounts of
company stock, which fosters the alignment of executives' interests with those of our long-term shareholders.
|
|
|
|
|
▶
Policy Prohibiting Hedging of Shares:
Executives are prohibited from taking actions designed to hedge or offset any
decrease in the market value of our common stock.
|
|
|
Based
on a consideration of the foregoing reviews and factors, the Compensation Committee has determined that risks arising from the company's compensation policies and practices for its employees are
not reasonably likely to have a material adverse effect on the company.
Stock Ownership Requirements
The Compensation Committee believes that significant ownership of our common stock by our executive officers directly aligns their interests with those of our
other shareholders and also helps balance the incentives for risk taking
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45
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U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Compensation Discussion and Analysis
|
inherent
in equity-based awards. We have had a requirement for many years that our executives hold significant amounts of company stock. The current required ownership levels are:
|
|
|
Executive Officer
|
|
Ownership Level
|
CEO
|
|
6x base salary
|
|
|
|
Other executive officers
|
|
3x base salary
|
|
|
|
Unvested
equity awards are not included in determining whether an executive officer satisfies these ownership levels. Until the applicable ownership level is met, the executive officers must hold 100%
of the after-tax value of any vested stock award or exercised option.
As
of December 31, 2016, all of our executive officers were in compliance with the stock ownership requirements. Most executive officers complied by holding stock valued in excess of their
applicable salary multiple, and those who have not yet reached those levels (the most recently appointed executive officers) complied by holding 100% of the after-tax value of any vested stock award
or exercised option.
Deductibility of Performance-Based Compensation
Annual cash incentive awards for the NEOs are granted under the EIP, which is designed to allow the company to issue awards that qualify as performance-based
compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section 162(m)"). Accordingly, the annual cash incentive plan sets the maximum award level that can
be given to any NEO under the plan for any year at 0.2% of the company's net income for the year. The Compensation Committee then uses negative discretion to reduce the payout amount of an executive's
cash incentive award to an amount that is determined based on the formula described above: Target Award Amount × (Bonus Funding Percentage +/- Individual Performance and Risk
Sensitivity). The maximum award amount under the EIP was established principally to position these awards to comply with regulations under Section 162(m), and is not indicative of the expected
payout amounts.
Annual
equity awards are granted to our NEOs under the U.S. Bancorp 2015 Stock Incentive Plan. Based on the design of that plan, the PRSUs and stock options granted to NEOs are intended to qualify as
performance-based compensation under Section 162(m).
We
review all compensation programs and payments to determine the tax impact on the company as well as on the executive officers. In addition, we review the impact of our programs against other
considerations, such as accounting impact, shareholder alignment, market competitiveness, effectiveness and perceived value to executives. Because many different factors influence a well-rounded,
comprehensive executive compensation program, the Compensation Committee may award compensation that is not deductible under Section 162(m). In addition, there can be no assurance that
compensation awards intended to qualify for tax deductibility under Section 162(m) will ultimately be determined by the Internal Revenue Service to so qualify.
Compensation Committee Report
The Compensation and Human Resources Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon
this review and discussion, the Compensation and Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and
in our 2016 Annual Report on Form 10-K.
Compensation and Human Resources Committee of the Board of Directors of U.S. Bancorp
|
|
|
Arthur D. Collins, Jr.,
Chair
|
|
O'dell M. Owens, M.D., M.P.H.
|
Olivia F. Kirtley
|
|
Scott W. Wine
|
David B. O'Maley
|
|
|
|
|
|
|
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
|
46
|
Table of Contents
Executive Compensation
|
|
Executive Compensation
Summary Compensation Table
|
The
following table shows the cash and non-cash compensation awarded to or earned by our NEOs for 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and
Principal Position
|
|
|
Year
|
|
|
Salary
($)
|
|
|
Stock
Awards
($)
1
|
|
|
Option
Awards
($)
2
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
3
|
|
|
Change in
Pension Value
and
Non-Qualified
Deferred
Compensation
Earnings
($)
4
|
|
|
All Other
Compensation
($)
5
|
|
|
Total
($)
|
|
Richard K. Davis
|
|
|
2016
|
|
|
1,400,000
|
|
|
6,393,750
|
|
|
2,131,250
|
|
|
3,046,050
|
|
|
2,359,264
|
|
|
15,680
|
|
|
15,345,994
|
|
Chairman and
|
|
|
2015
|
|
|
1,300,000
|
|
|
5,812,500
|
|
|
1,937,500
|
|
|
2,304,900
|
|
|
202,478
|
|
|
27,632
|
|
|
11,585,010
|
|
Chief Executive Officer
|
|
|
2014
|
|
|
1,200,000
|
|
|
5,625,000
|
|
|
1,875,000
|
|
|
2,465,100
|
|
|
8,192,618
|
|
|
15,358
|
|
|
19,373,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrance R. Dolan
6, 7
|
|
|
2016
|
|
|
545,833
|
|
|
1,230,000
|
|
|
410,000
|
|
|
695,031
|
|
|
357,515
|
|
|
15,672
|
|
|
3,254,051
|
|
Vice Chairman and
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A. Rogers
7, 8
|
|
|
2016
|
|
|
460,417
|
|
|
1,237,500
|
|
|
412,500
|
|
|
466,000
|
|
|
390,191
|
|
|
39,961
|
|
|
3,006,569
|
|
Former Vice Chairman and
Chief Financial Officer
|
|
|
2015
|
|
|
475,000
|
|
|
750,000
|
|
|
250,000
|
|
|
485,688
|
|
|
298,453
|
|
|
14,705
|
|
|
2,273,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Cecere
|
|
|
2016
|
|
|
800,000
|
|
|
4,331,250
|
|
|
1,443,750
|
|
|
1,160,400
|
|
|
884,538
|
|
|
31,478
|
|
|
8,651,416
|
|
President and
|
|
|
2015
|
|
|
750,000
|
|
|
3,750,000
|
|
|
1,250,000
|
|
|
920,250
|
|
|
43,399
|
|
|
28,053
|
|
|
6,741,702
|
|
Chief Operating Officer
|
|
|
2014
|
|
|
725,000
|
|
|
3,187,500
|
|
|
1,062,500
|
|
|
1,047,263
|
|
|
1,400,038
|
|
|
27,883
|
|
|
7,450,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.W. (Bill) Parker
|
|
|
2016
|
|
|
625,000
|
|
|
1,815,000
|
|
|
605,000
|
|
|
755,469
|
|
|
163,105
|
|
|
24,868
|
|
|
3,988,442
|
|
Vice Chairman and
|
|
|
2015
|
|
|
625,000
|
|
|
1,500,000
|
|
|
500,000
|
|
|
678,125
|
|
|
241,507
|
|
|
24,545
|
|
|
3,569,177
|
|
Chief Risk Officer
|
|
|
2014
|
|
|
550,000
|
|
|
1,312,500
|
|
|
437,500
|
|
|
627,688
|
|
|
471,963
|
|
|
24,170
|
|
|
3,423,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffry H. von Gillern
7
|
|
|
2016
|
|
|
575,000
|
|
|
1,320,000
|
|
|
440,000
|
|
|
692,156
|
|
|
133,795
|
|
|
18,595
|
|
|
3,179,546
|
|
Vice Chairman, Technology
and Operations Services
|
|
|
2015
|
|
|
550,000
|
|
|
1,125,000
|
|
|
375,000
|
|
|
587,125
|
|
|
57,651
|
|
|
21,589
|
|
|
2,716,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
1.
-
Stock Awards
The amounts in this column are calculated based on the number of 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.
The 2016 values in this table reflect the fair market value of each officer's target payout for the 2016 PRSUs on the grant date. The number of units subject to
each of these awards that were earned based on our actual 2016 performance is equal to 106.1% of the awards' respective target amounts. The fair market value of the maximum potential payout amounts
for these awards on the grant date was as follows: (i) Mr. Davis, $7,992,188; (ii) Mr. Dolan, $1,537,500; (iii) Ms. Rogers, $1,546,875;
(iv) Mr. Cecere, $5,414,063; (v) Mr. Parker, $2,268,750; and (vi) Mr. von Gillern, $1,650,000.
-
2.
-
Option Awards
The amounts in this column are based on the fair value of the stock option awards as estimated using the Black-Scholes option-pricing model in accordance with
FASB ASC Topic 718. The assumptions used to arrive at the Black-Scholes value are disclosed in Note 17 to our consolidated financial statements included in our 2016 Annual Report on
Form 10-K.
-
3.
-
Non-Equity Incentive Plan Compensation
The amounts in this column relate to awards granted under our EIP in January 2016, determined in January 2017 based on 2016 performance, and paid out in February
2017. The EIP and these awards are discussed above in the "Compensation Discussion and Analysis" section of this proxy statement.
Ms. Rogers's award was paid out under our Annual Incentive Plan, the corporate incentive plan for management-level employees, because she was no longer an
executive officer at the time the annual cash incentive payout determinations were made.
|
|
|
|
|
|
47
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Executive Compensation
|
-
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 and the
U.S. Bancorp Non-Qualified Retirement Plan. 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 2016 are generally larger than those reported for 2015 for the respective NEOs. These larger "change" values are
primarily due to the lower discount rates for year-end 2016, which are approximately 15 basis points lower than for year-end 2015, as well as higher annual cash incentive plan payout amounts in 2016
as compared to 2015.
The net present values of the pension benefits as of December 31, 2016, 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 2016 Annual Report
on Form 10-K for these specific assumptions. Additional information about our Pension Plan and Non-Qualified Retirement 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Parking
Reimbursement
($)
|
|
|
Matching
Contribution into
401(k) Savings Plan
($)
|
|
|
Reimbursement
of Financial
Planning Expenses
($)
|
|
|
Executive
Physical
($)
|
|
|
Home Security
System
Expenses
($)
|
|
|
Other
($)
a
|
|
|
Total
($)
|
|
Mr. Davis
|
|
|
4,485
|
|
|
10,600
|
|
|
|
|
|
|
|
|
345
|
|
|
250
|
|
|
15,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Dolan
|
|
|
4,485
|
|
|
10,600
|
|
|
|
|
|
|
|
|
587
|
|
|
|
|
|
15,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Rogers
|
|
|
3,215
|
|
|
10,600
|
|
|
5,977
|
|
|
7,648
|
|
|
|
|
|
12,521
|
|
|
39,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Cecere
|
|
|
4,485
|
|
|
10,600
|
|
|
12,975
|
|
|
2,755
|
|
|
663
|
|
|
|
|
|
31,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Parker
|
|
|
4,485
|
|
|
10,600
|
|
|
3,035
|
|
|
6,748
|
|
|
|
|
|
|
|
|
24,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. von Gillern
|
|
|
4,485
|
|
|
10,600
|
|
|
320
|
|
|
2,653
|
|
|
537
|
|
|
|
|
|
18,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
a.
-
The amount for
Mr. Davis represents a matching contribution under our charitable matching gifts program, which applies to all of our employees and directors. The amount for Ms. Rogers represents travel
costs to Minneapolis during the time she served as Vice Chairman and Chief Financial Officer.
Our company occasionally allows its executives the personal use of tickets for sporting and
special events previously acquired by our company for the purpose of business entertainment. There is no incremental cost to our company for the use.
-
6.
-
Mr. Dolan served as Vice Chairman
and Chief Financial Officer beginning August 1, 2016. He previously served as Vice Chairman, Wealth Management and Securities Services.
-
7.
-
Mr. Dolan
was not an NEO in 2014 or 2015. Ms. Rogers and Mr. von Gillern were not NEOs in 2014. Accordingly, the table above reflects only their compensation for years they were NEOs.
-
8.
-
Ms. Rogers
served as Vice Chairman and Chief Financial Officer through July 31, 2016. She has remained an employee of our company after stepping down from her executive role.
Grants of Plan-Based Awards
|
The
following table summarizes the equity and non-equity plan-based awards granted in 2016 to the NEOs. The first line of information for each executive contains information about
the 2016 annual cash incentive awards that each executive was granted under our EIP, and the remaining information relates to PRSUs and stock options granted in 2016 under the U.S. Bancorp 2015 Stock
Incentive Plan.
|
|
|
|
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
|
48
|
Table of Contents
Executive Compensation
|
|
Grants of Plan-Based Awards for Fiscal 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of
Compensation
Committee
Meeting at
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
1
|
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
4
|
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
|
|
|
Exercise
or Base
Price of
Option
|
|
|
Grant Date
Fair Value
of Stock
and Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Grant
Date
|
|
|
Which Grant
Was Approved
|
|
|
Target
($)
2
|
|
|
Maximum
($)
3
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
Options
(#)
5
|
|
|
Awards
($/Sh)
|
|
|
Awards
($)
6
|
|
Richard K.
|
|
|
|
|
|
|
|
|
3,150,000
|
|
|
11,776,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Davis
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
0
|
|
|
161,908
|
|
|
202,385
|
|
|
|
|
|
|
|
|
6,393,750
|
|
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
207,320
|
|
|
39.49
|
|
|
2,131,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrance R.
|
|
|
|
|
|
|
|
|
718,750
|
|
|
11,776,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dolan
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
0
|
|
|
29,247
|
|
|
36,558
|
|
|
|
|
|
|
|
|
1,155,000
|
|
|
|
|
7/18/16
|
|
|
7/18/16
|
|
|
|
|
|
|
|
|
0
|
|
|
1,790
|
|
|
2,237
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,455
|
|
|
39.49
|
|
|
385,000
|
|
|
|
|
7/18/16
|
|
|
7/18/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,331
|
|
|
41.88
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A.
|
|
|
|
|
|
|
|
|
718,750
|
|
|
11,776,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rogers
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
0
|
|
|
31,337
|
|
|
39,171
|
|
|
|
|
|
|
|
|
1,237,500
|
|
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,127
|
|
|
39.49
|
|
|
412,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew
|
|
|
|
|
|
|
|
|
1,200,000
|
|
|
11,776,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cecere
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
0
|
|
|
109,679
|
|
|
137,098
|
|
|
|
|
|
|
|
|
4,331,250
|
|
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140,445
|
|
|
39.49
|
|
|
1,443,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.W. (Bill)
|
|
|
|
|
|
|
|
|
781,250
|
|
|
11,776,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parker
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
0
|
|
|
45,961
|
|
|
57,451
|
|
|
|
|
|
|
|
|
1,815,000
|
|
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,852
|
|
|
39.49
|
|
|
605,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffry H. von
|
|
|
|
|
|
|
|
|
718,750
|
|
|
11,776,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gillern
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
0
|
|
|
33,426
|
|
|
41,782
|
|
|
|
|
|
|
|
|
1,320,000
|
|
|
|
|
2/18/16
|
|
|
1/18/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,802
|
|
|
39.49
|
|
|
440,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
1.
-
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
These columns show the potential payments for each of these executive officers under our EIP for 2016 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, in each case ranging 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 our 2016 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 Committee establishes a target
cash incentive amount for each NEO each year, expressed as a percentage of the executive's base salary.
The Target Award Amount shown for each of Ms. Rogers and Mr. Dolan in this column reflects the base salary and Target Award Percentage applicable
to them for the portion of 2016 each spent as Vice Chairman and Chief Financial Officer. The actual amount paid to Mr. Dolan in February 2017 under the EIP was based on his Target Award Amount
as CFO, whereas the actual amount paid to Ms. Rogers under the Annual Incentive Plan in February 2017 was based on her contributions to our company in 2016 in both executive and non-executive
roles.
-
3.
-
Maximum Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Our EIP provides the opportunity for each participant in the plan to earn a maximum cash incentive amount equal to 0.2% of our net income for the performance
year. Our net income for the 2016 fiscal year was $5.888 billion, and 0.2% of net income was $11.776 million. As described above in "Compensation Discussion and
Analysis Deductibility of Performance-Based Compensation," the maximum amounts calculated in accordance with the EIP are not indicative of amounts the Compensation Committee
expects to pay out.
|
|
|
|
|
|
49
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Executive Compensation
|
-
4.
-
Estimated Future Payouts under Equity Incentive Plan Awards
These columns show the potential number of PRSUs that could have been earned by each of these executive officers in 2016. Depending on performance, 0% to 125% of
the target number of PRSUs granted to the executive officers could have been earned. The number of units earned is determined using a sliding scale based on (i) our 2016 ROE result versus a
predetermined target and (ii) our 2016 ROE ranking within our peer group. Based on our actual 2016 performance compared to the targets set in the award agreements for each executive, the number
of units earned is equal to 106.1% of their respective targets. Additional information regarding how the PRSU awards are earned is included above in "Compensation Discussion and
Analysis Long-Term Incentive Awards," and the actual number of units earned by each NEO is included in the Outstanding Equity Awards at 2016 Fiscal Year-End table below.
The earned PRSUs vest at 25% per year, with vesting dates of February 18, 2017, 2018, 2019 and 2020 to coincide with the grant date for the annual awards.
In conjunction with his promotion to CFO, Mr. Dolan received an additional grant on July 18, 2016, with the same vesting schedule as his annual award. The PRSUs accrue an amount equal to
the dividends paid on our shares of common stock, which is paid at the end of the performance period on the number of units earned.
-
5.
-
Option Awards
These stock options vest at 25% per year, with vesting dates of February 18, 2017, 2018, 2019 and 2020 to coincide with the grant date for the annual
awards. In conjunction with his promotion to CFO, Mr. Dolan received an additional grant on July 18, 2016, with the same vesting schedule as his annual award.
-
6.
-
Grant Date Fair Value of Stock and Option Awards
The grant date fair value of the PRSUs 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. The Black-Scholes option pricing model was used to estimate the grant date fair value of the options in this column. Use of this model should not be construed as an endorsement of its
accuracy. All stock option pricing models require predictions about the future movement of the stock price.
The assumptions used to develop the grant date valuations for the options granted on February 18, 2016, were as follows: risk-free rate of return of
1.29%, dividend rate of 2.6%, volatility rate of 35.69%, quarterly reinvestment of dividends, and an
average term of 5.5 years. The assumptions used to develop the grant date valuations for the options granted on July 18, 2016, were as follows: risk-free rate return of 1.21%, dividend
rate of 2.6%, volatility rate of 35.35%, quarterly reinvestment of dividends, and an average term of 5.5 years.
No adjustments have been made for non-transferability or risk of forfeiture. The real value of the stock options in this table will depend on the actual
performance of our common stock during the applicable period and the fair market value of our common stock on the date the options are exercised.
|
|
|
|
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
|
50
|
Table of Contents
Executive Compensation
|
|
Outstanding Equity Awards
|
The
following table shows the unexercised stock options and the unvested restricted stock, restricted stock units and PRSUs held at the end of fiscal year 2016 by the NEOs.
Outstanding Equity Awards at 2016 Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Number of Securities
Underlying Unexercised
Options
(#)
Exercisable
|
|
|
Number of Securities
Underlying Unexercised
Options
(#)
Unexercisable
|
|
|
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
|
|
Richard K. Davis
|
|
|
|
|
|
207,320
|
(2)
|
|
39.49
|
|
|
2/18/2026
|
|
|
|
|
|
|
|
|
|
|
39,541
|
|
|
118,624
|
(3)
|
|
44.32
|
|
|
2/19/2025
|
|
|
|
|
|
|
|
|
|
|
82,383
|
|
|
82,383
|
(4)
|
|
40.32
|
|
|
2/20/2024
|
|
|
|
|
|
|
|
|
|
|
108,114
|
|
|
36,038
|
(5)
|
|
33.99
|
|
|
2/14/2023
|
|
|
|
|
|
|
|
|
|
|
294,696
|
|
|
|
|
|
28.63
|
|
|
2/15/2022
|
|
|
|
|
|
|
|
|
|
|
260,172
|
|
|
|
|
|
28.70
|
|
|
2/16/2021
|
|
|
|
|
|
|
|
|
|
|
300,122
|
|
|
|
|
|
23.86
|
|
|
2/16/2020
|
|
|
|
|
|
|
|
|
|
|
305,625
|
|
|
|
|
|
25.35
|
|
|
10/22/2019
|
|
|
|
|
|
|
|
|
|
|
707,726
|
|
|
|
|
|
31.04
|
|
|
1/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
171,784
|
(6)
|
|
8,824,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102,588
|
(7)
|
|
5,269,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,102
|
(8)
|
|
3,755,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,630
|
(9)
|
|
2,189,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrance R. Dolan
|
|
|
|
|
|
2,331
|
(2)
|
|
41.88
|
|
|
7/18/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,455
|
(2)
|
|
39.49
|
|
|
2/18/2026
|
|
|
|
|
|
|
|
|
|
|
6,632
|
|
|
19,899
|
(3)
|
|
44.32
|
|
|
2/19/2025
|
|
|
|
|
|
|
|
|
|
|
13,291
|
|
|
13,292
|
(4)
|
|
40.32
|
|
|
2/20/2024
|
|
|
|
|
|
|
|
|
|
|
18,688
|
|
|
6,230
|
(5)
|
|
33.99
|
|
|
2/14/2023
|
|
|
|
|
|
|
|
|
|
|
54,029
|
|
|
|
|
|
28.63
|
|
|
2/15/2022
|
|
|
|
|
|
|
|
|
|
|
47,305
|
|
|
|
|
|
28.70
|
|
|
2/16/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,899
|
(6)
|
|
97,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,031
|
(6)
|
|
1,594,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,208
|
(7)
|
|
883,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,794
|
(8)
|
|
605,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,369
|
(9)
|
|
378,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A. Rogers
|
|
|
|
|
|
40,127
|
(2)
|
|
39.49
|
|
|
2/18/2026
|
|
|
|
|
|
|
|
|
|
|
5,102
|
|
|
15,308
|
(3)
|
|
44.32
|
|
|
2/19/2025
|
|
|
|
|
|
|
|
|
|
|
4,881
|
|
|
|
|
|
28.63
|
|
|
2/15/2022
|
|
|
|
|
|
|
|
|
|
|
1,331
|
|
|
|
|
|
28.70
|
|
|
2/16/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,248
|
(6)
|
|
1,707,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,235
|
(7)
|
|
679,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,581
|
(10)
|
|
286,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,133
|
(11)
|
|
109,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Cecere
|
|
|
|
|
|
140,445
|
(2)
|
|
39.49
|
|
|
2/18/2026
|
|
|
|
|
|
|
|
|
|
|
25,511
|
|
|
76,533
|
(3)
|
|
44.32
|
|
|
2/19/2025
|
|
|
|
|
|
|
|
|
|
|
46,683
|
|
|
46,683
|
(4)
|
|
40.32
|
|
|
2/20/2024
|
|
|
|
|
|
|
|
|
|
|
63,711
|
|
|
21,237
|
(5)
|
|
33.99
|
|
|
2/14/2023
|
|
|
|
|
|
|
|
|
|
|
184,187
|
|
|
|
|
|
28.63
|
|
|
2/15/2022
|
|
|
|
|
|
|
|
|
|
|
165,564
|
|
|
|
|
|
28.70
|
|
|
2/16/2021
|
|
|
|
|
|
|
|
|
|
|
183,374
|
|
|
|
|
|
25.35
|
|
|
10/22/2019
|
|
|
|
|
|
|
|
|
|
|
374,636
|
|
|
|
|
|
31.04
|
|
|
1/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116,369
|
(6)
|
|
5,977,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,186
|
(7)
|
|
3,399,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,424
|
(8)
|
|
2,127,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,121
|
(9)
|
|
1,290,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Executive Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Number of Securities
Underlying Unexercised
Options
(#)
Exercisable
|
|
|
Number of Securities
Underlying Unexercised
Options
(#)
Unexercisable
|
|
|
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
|
|
P.W. (Bill) Parker
|
|
|
|
|
|
58,852
|
(2)
|
|
39.49
|
|
|
2/18/2026
|
|
|
|
|
|
|
|
|
|
|
10,204
|
|
|
30,615
|
(3)
|
|
44.32
|
|
|
2/19/2025
|
|
|
|
|
|
|
|
|
|
|
19,222
|
|
|
19,223
|
(4)
|
|
40.32
|
|
|
2/20/2024
|
|
|
|
|
|
|
|
|
|
|
22,086
|
|
|
7,363
|
(5)
|
|
33.99
|
|
|
2/14/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,764
|
(6)
|
|
2,505,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,472
|
(7)
|
|
1,359,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,056
|
(8)
|
|
876,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,709
|
(9)
|
|
447,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffry H. von Gillern
|
|
|
|
|
|
42,802
|
(2)
|
|
39.49
|
|
|
2/18/2026
|
|
|
|
|
|
|
|
|
|
|
7,653
|
|
|
22,961
|
(3)
|
|
44.32
|
|
|
2/19/2025
|
|
|
|
|
|
|
|
|
|
|
14,500
|
|
|
14,500
|
(4)
|
|
40.32
|
|
|
2/20/2024
|
|
|
|
|
|
|
|
|
|
|
20,387
|
|
|
6,796
|
(5)
|
|
33.99
|
|
|
2/14/2023
|
|
|
|
|
|
|
|
|
|
|
13,508
|
|
|
|
|
|
28.63
|
|
|
2/15/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,464
|
(6)
|
|
1,821,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,854
|
(7)
|
|
1,019,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,865
|
(8)
|
|
660,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,039
|
(9)
|
|
412,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
1.
-
The amounts in this column are calculated
using a per share value of $51.37, the closing market price of a share of our common stock on December 30, 2016, the last business day of the year.
-
2.
-
These
non-qualified stock options vest at the rate of 25% per year, with vesting dates of February 18, 2017, 2018, 2019 and 2020.
-
3.
-
These non-qualified stock
options vest at the rate of 25% per year; 25% vested on February 19, 2016, with remaining vesting to occur on February 19, 2017, 2018 and 2019.
-
4.
-
These non-qualified stock
options vest at the rate of 25% per year; 25% vested on each of February 20, 2015 and 2016, with remaining vesting to occur on February 20, 2017 and 2018.
-
5.
-
These non-qualified stock
options vest at the rate of 25% per year; 25% vested on each of February 14, 2014, 2015 and 2016, with remaining vesting to occur on February 14, 2017.
-
6.
-
These PRSUs, the number of
which was determined based on our actual 2016 performance compared to the targets set in the applicable award agreements, vest at the rate of 25% per year, with vesting dates of February 18,
2017, 2018, 2019 and 2020.
-
7.
-
These PRSUs, the number of
which was determined based on our actual 2015 performance compared to the targets set in the applicable award agreements, vest at the rate of 25% per year; 25% vested on February 19, 2016, with
remaining vesting to occur on February 19, 2017, 2018 and 2019.
-
8.
-
These PRSUs, the number of
which was determined based on our actual 2014 performance compared to the targets set in the applicable award agreements, vest at the rate of 25% per year; 25% vested on each of February 20,
2015 and 2016, with remaining vesting to occur on February 20, 2017 and 2018.
-
9.
-
These PRSUs, the number of
which was determined based on our actual 2013 performance compared to the targets set in the applicable award agreements, vest at the rate of 25% per year; 25% vested on each of February 14,
2014, 2015 and 2016, with remaining vesting to occur on February 14, 2017.
-
10.
-
These restricted stock
units vest at the rate of 25% per year; 25% vested on February 20, 2015 and 2016, with remaining vesting to occur on February 20, 2017 and
2018.
-
11.
-
These restricted shares
vest at the rate of 25% per year; 25% vested on each of February 14, 2014, 2015 and 2016, with remaining vesting to occur on February 14, 2017.
|
|
|
|
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
|
52
|
Table of Contents
Executive Compensation
|
|
Option Exercises and Stock Vested
|
The
following table summarizes information with respect to stock option awards exercised and restricted stock, restricted stock units, and PRSUs vested during fiscal 2016 for each of
the NEOs.
Option Exercises and Stock Vested during Fiscal 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Richard K. Davis
|
|
|
1,669,118
|
|
|
19,085,830
|
|
|
147,274
|
|
|
5,843,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrance R. Dolan
|
|
|
55,205
|
|
|
1,195,578
|
|
|
25,216
|
|
|
1,000,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A. Rogers
|
|
|
|
|
|
|
|
|
11,070
|
|
|
438,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Cecere
|
|
|
821,691
|
|
|
9,400,192
|
|
|
89,080
|
|
|
3,533,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.W. (Bill) Parker
|
|
|
122,981
|
|
|
1,982,544
|
|
|
33,404
|
|
|
1,325,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffry H. von Gillern
|
|
|
96,476
|
|
|
745,006
|
|
|
27,302
|
|
|
1,082,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
1.
-
Value Realized on Exercise
Value determined by subtracting the exercise price per share from the market value per share of our common stock at the time of exercise and multiplying the
difference by the number of shares acquired on exercise.
-
2.
-
Value Realized on Vesting
Value determined by multiplying the number of vested shares or units by the opening market price of a share of our common stock on the vesting date, or on the
next business day in the event the vesting date is not a business day.
Defined Benefit Pension Plans
The U.S. Bank Pension Plan was created through the merger of the former U.S. Bancorp's career average pay defined benefit plan, known as the "U.S. Bancorp
Cash Balance Pension Plan," and the former Firstar Corporation's non-contributory defined benefit plan, which was primarily a final average pay plan. Under the U.S. Bank Pension Plan, benefits are
calculated using a final average pay formula, based upon the employee's years of service and average salary during the five consecutive years of service in which compensation was the highest during
the ten years prior to retirement, with a normal retirement age of 65.
Effective
January 1, 2010, our company established a new cash balance formula for certain current and all future eligible employees. Participants will receive annual pay credits based on
eligible pay multiplied by a percentage determined by their age and years of service. Participants will also receive an annual interest credit. Participants in the pension plan
that elected to receive pension benefits using the cash balance formula had their existing benefits in the pension plan frozen and will earn future benefits under the cash balance formula.
Substantially
all employees are eligible to receive benefits under the U.S. Bank Pension Plan. Participation requires one year of service with U.S. Bancorp or its affiliates, and 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 post-2009 cash balance formula. Messrs. Cecere, Parker and von
Gillern were the only NEOs who elected to receive pension benefits using the cash balance formula.
Although
no new benefits are accrued under the former U.S. Bancorp Cash Balance Pension Plan formula and Firstar Corporation's plan formula 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.
|
|
|
|
|
|
53
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Executive Compensation
|
Federal
laws limit the amount of compensation we may consider when determining benefits payable under qualified defined benefit pension plans. We also maintain a non-contributory, non-qualified
retirement plan that pays the excess
pension benefits that would have been payable under our current and prior qualified defined benefit pension plans if the federal limits were not in effect.
Mr. Davis
and Ms. Rogers earned benefits under the former Firstar Corporation plan that will be included in their ultimate retirement benefits. Messrs. Cecere, Dolan, Parker and
von Gillern earned benefits under the former U.S. Bancorp Cash Balance Pension Plan that will be included in their ultimate retirement benefits.
Supplemental Retirement Benefits
Certain of our executive officers, including all of the NEOs except for Ms. Rogers, are eligible for a supplemental benefit that augments benefits
earned under the U.S. Bank Pension Plan and the non-qualified excess benefits discussed above. The supplemental benefit ensures that eligible executives receive a total retirement benefit equal to a
fixed percentage of the executive's final average cash compensation. In the case of Messrs. Dolan, Parker and von Gillern, their supplemental benefits were frozen in 2001. For purposes of this
supplemental benefit, final average cash compensation includes annual base salary, annual cash bonuses and other cash compensation awards as determined by the Compensation Committee. Eligibility for
these supplemental benefits has been determined by the Compensation Committee based on individual performance and level of responsibility.
Vesting
of the supplemental benefit is generally subject to certain conditions, including that an executive officer provide a certain number of years of service determined by the Compensation
Committee. Mr. Davis is eligible for an amount of total retirement benefits at age 62 equal to 60% of the average cash compensation during his five consecutive years of service in which he is
most highly compensated, and he is fully vested in these benefits. Mr. Cecere is eligible for an amount of total retirement benefits at age 65 equal to 55% of the average cash compensation
during his final three years of service, reduced by his estimated retirement benefits from Social Security. Mr. Cecere is fully vested in a portion of his supplemental benefit, with his vested
portion increasing on a pro rata basis up to age 60. Mr. Dolan has a frozen monthly annuity of $522 in which he is fully vested, payable as early as his termination date. Mr. Parker has
a frozen monthly annuity benefit of $1,761 in which he is fully vested, payable as early as his termination date. Mr. von Gillern also has a frozen monthly annuity benefit of $138 in which he
is fully vested, payable as early as his termination date.
For
Mr. Davis, the standard form of payment of the supplemental benefit is a ten-year certain, single life annuity. For a portion of Mr. Cecere's supplemental benefit, the standard form
is either a lump sum or a joint and survivor annuity, depending on the present value of the lump sum at retirement, and for the remaining portion of the benefit, the standard form is a joint and
survivor annuity. For the supplemental benefits for Messrs. Dolan, Parker and von Gillern, the standard form is either a lump sum or a joint and survivor annuity, depending on the present value
of the lump sum at retirement. Each of Messrs. Davis and Cecere has the option of electing to receive his supplemental benefit in other various forms of annuity benefits. In general, this
election must be made prior to the applicable officer's retirement date. In addition, Mr. Davis has the option to elect to receive the pre-2005 portion of his supplemental benefit as a lump sum
distribution, and Mr. Cecere has the option to elect to receive his entire supplemental benefit as a lump sum. This election must be made at least 12 months prior to the applicable
officer's retirement date, and Mr. Cecere has made such an election.
The
present value of the supplemental benefit for Messrs. Dolan, Parker and von Gillern is currently less than $400,000, so their supplemental benefit will be paid in a lump sum. Each of
Messrs. Dolan, Parker and von Gillern has the option
to make an election to receive his supplemental benefit as an annuity if the election is made 12 months prior to the applicable officer's termination date, the officer is over age 55, and the
present value exceeds $50,000. The amount of the lump sum distribution equals the actuarial equivalent of the annuity form of payment and is calculated using substantially similar actuarial
assumptions as for our pension plan obligations discussed in Note 16 to our consolidated financial statements included in our 2016 Annual Report on Form 10-K. The means of calculating
the various annuity benefits are described in the pension plan.
|
|
|
|
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
|
54
|
Table of Contents
Executive Compensation
|
|
Pension Benefits for Fiscal 2016
The following table summarizes information with respect to each plan that provides for payments or other benefits at, following, or in connection with the
retirement of any of the NEOs.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
|
Number of
Years
Credited
Service
(#)
|
|
|
Present
Value of
Accumulated
Benefits
($)
1, 2
|
|
|
Payments
During Last
Fiscal Year
($)
|
|
Richard K. Davis
|
|
U.S. Bancorp Non-Qualified Retirement Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Benefits
|
|
|
23
|
|
|
22,366,779
|
|
|
|
|
|
|
Excess Benefit
|
|
|
23
|
|
|
9,683,129
|
|
|
|
|
|
|
U.S. Bank Pension Plan
|
|
|
23
|
|
|
787,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
32,837,775
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrance R. Dolan
|
|
U.S. Bancorp Non-Qualified Retirement Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Benefits
|
|
|
3
|
|
|
59,460
|
|
|
|
|
|
|
Excess Benefit
|
|
|
18
|
|
|
1,836,350
|
|
|
|
|
|
|
U.S. Bank Pension Plan
|
|
|
18
|
|
|
518,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
2,414,108
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A. Rogers
|
|
U.S. Bancorp Non-Qualified Retirement Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Benefits
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Excess Benefits
|
|
|
28
|
|
|
1,006,328
|
|
|
|
|
|
|
U.S. Bank Pension Plan
|
|
|
28
|
|
|
669,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
1,675,946
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Cecere
|
|
U.S. Bancorp Non-Qualified Retirement Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Benefits
|
|
|
31
|
|
|
2,901,178
|
|
|
|
|
|
|
Excess Benefit
|
|
|
31
|
|
|
3,409,158
|
|
|
|
|
|
|
U.S. Bank Pension Plan
|
|
|
31
|
|
|
557,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
6,867,367
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.W. (Bill) Parker
|
|
U.S. Bancorp Non-Qualified Retirement Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Benefits
|
|
|
18
|
|
|
233,838
|
|
|
|
|
|
|
Excess Benefit
|
|
|
33
|
|
|
1,969,681
|
|
|
|
|
|
|
U.S. Bank Pension Plan
|
|
|
33
|
|
|
692,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
2,895,526
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffry H. von Gillern
|
|
U.S. Bancorp Non-Qualified Retirement Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Benefits
|
|
|
1
|
|
|
12,973
|
|
|
|
|
|
|
Excess Benefit
|
|
|
16
|
|
|
594,645
|
|
|
|
|
|
|
U.S. Bank Pension Plan
|
|
|
16
|
|
|
263,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
871,278
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
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 2016 Annual
Report on Form 10-K. These assumptions include the use of a 4.13% discount rate for the supplemental and excess plans and a 4.28% discount rate for the qualified pension plan. The mortality
assumptions used are based on the RP 2014 mortality table projected generationally using a customized RPEC_2014 scale. The average pay used for the benefit calculations was historical pay through the
measurement date (December 31, 2016).
|
|
|
|
|
|
55
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Executive Compensation
|
The amounts in this column were calculated based on the earliest age at which the applicable officer is entitled to receive unreduced
retirement benefits and ignore any vesting requirements. The earliest age of unreduced retirement benefits is 62 for Mr. Davis and 65 for Messrs. Dolan, Cecere, Parker, and von Gillern
and Ms. Rogers.
-
2.
-
In the event of the death of one of the
officers in this table, a pre-established percentage of the officer's pension benefits will be paid to the officer's beneficiary. The actual percentage paid to the beneficiary is dependent on the form
of payment of benefits elected by the officer. The default percentage is 50% to the officer's spouse. An additional lump sum death benefit may be payable based on certain actuarial calculations. The
present value of the payments to an officer's beneficiary would not exceed the total present value of accumulated benefits shown in this column.
-
3.
-
Mr. Davis is 100% vested and
eligible to begin receiving his U.S. Bank Pension Plan benefit and the pre-2005 portion of his excess and supplemental benefits upon retirement. The remainder of his excess and supplemental benefits
are payable upon the later of age 62 or retirement. The portion of his benefits available at retirement are reduced by an early retirement benefit formula specified in the applicable plan for each
year prior to his reaching age 62. The early retirement benefit formula reduces the annual pension benefit amount payable to Mr. Davis due to the longer benefit payment period related to the
earlier commencement of benefits.
-
4.
-
Messrs. Dolan,
Parker, and von Gillern and Ms. Rogers are currently vested in 100% of their pension benefits.
-
5.
-
Mr. Cecere is 100% vested and
eligible to begin receiving his U.S. Bank Pension Plan benefit and the pre-2005 portion of his excess and supplemental benefits upon retirement at any age. The remainder of his excess and supplemental
benefits are payable upon the later of age 62 or 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.
Nonqualified Deferred Compensation
|
Under
the U.S. Bank Executive Employees Deferred Compensation Plan (2005 Statement) (the "Executive Deferred Compensation Plan"), members of our senior management, including all of
our executive officers, may choose to defer all or a part of their annual base salary and annual cash incentive payments. The minimum amount that can be deferred in any calendar year is $1,000. 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,
2016, through December 30, 2016:
|
|
|
Fund Name
|
|
2016 Returns
|
Stable Value Fund
|
|
1.74%
|
|
|
|
Bond Index Fund
|
|
2.52%
|
|
|
|
Active Bond Fund
|
|
2.46%
|
|
|
|
US Large Cap Equity Index Fund
|
|
11.86%
|
|
|
|
US Small-Mid Equity Index Fund
|
|
16.08%
|
|
|
|
Active US Small-Mid Equity Fund
|
|
14.52%
|
|
|
|
International Equity Index Fund
|
|
2.41%
|
|
|
|
Active International Equity Fund
|
|
1.24%
|
|
|
|
Deferred Savings U.S. Bancorp Stock Fund
|
|
23.13%
|
|
|
|
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. Plan participants are allowed to change their investment elections at any time, but the
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U.S.
Bancorp
2017
Proxy
Statement
|
|
56
|
Table of Contents
Executive Compensation
|
|
changes
are only effective at the beginning of the following calendar quarter. 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 plan 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 executive officer 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 executive officer, payment of the amounts credited to his or her account under the plan in a
lump-sum cash 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 officer has a balance, except
the stock fund, which is generally paid in shares. If a participant dies before the entire deferred amount has been distributed, the undistributed portion will be paid to the participant's
beneficiary. The benefits under the plan otherwise are not transferable by the participant.
Prior
to the establishment of the Executive Deferred Compensation Plan, members of our senior management could defer annual salary and annual cash incentive compensation into a prior U.S. Bancorp
deferred compensation plan. Mr. Davis has deferred amounts under our prior plan.
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 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Executive
Contributions
in Last FY
($)
|
|
|
Registrant
Contributions
in Last FY
($)
|
|
|
Aggregate
Earnings
in Last FY
($)
1
|
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
|
Aggregate
Balance
at Last FYE
($)
|
|
Richard K. Davis
|
|
|
|
|
|
|
|
|
707,078
|
|
|
|
|
|
3,764,695
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrance R. Dolan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A. Rogers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Cecere
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.W. (Bill) Parker
|
|
|
223,781
|
|
|
|
|
|
35,896
|
|
|
|
|
|
1,325,279
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffry H. von Gillern
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
1.
-
The amount reported in this column
represents the change during the last fiscal year in the value of the underlying investment fund or U.S. Bancorp stock fund in which the executive officer's deferred amounts were deemed to be invested
and any increases in the deferred amounts due to dividends payable upon those funds.
-
2.
-
Of this amount, $776,000 represents
deferrals of cash compensation from prior years that were reported in the Summary Compensation Table in our proxy statement for the relevant years. The remaining balance represents the cumulative
earnings on the original deferred amounts.
-
3.
-
Of this amount, $456,251 represents
deferrals of cash compensation that was earned in 2014, 2015 and 2016. These amounts were included as part of the pay reported in the Summary Compensation Table in our proxy statement for the relevant
years.
Potential Payments Upon Termination or Change-in-Control
|
General
Any NEO whose employment is voluntarily or involuntarily terminated is entitled to the payments or other benefits that the officer has accrued and is vested
in under the benefit plans discussed above in this proxy statement, including under the heading "Pension Benefits." Except as is specifically described below with respect to disability, death or
|
|
|
|
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|
57
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Executive Compensation
|
termination
of employment following a change-in-control of U.S. Bancorp, no NEO is entitled to any other benefits upon any employment termination or change-in-control scenario.
Payments Made Upon Disability
Cash Payments:
Under the terms of the U.S. Bancorp Non-Qualified Retirement Plan, Messrs. Davis and Cecere are eligible for an annual disability benefit
that is equal to 60% of their current annual cash compensation. The definition of disability is similar to that used for the disability plan covering all employees. The definition of annual cash
compensation is the same definition as is used to calculate supplemental pension benefits under this plan, without using a five-year average.
Messrs. Dolan,
Parker, and von Gillern and Ms. Rogers are eligible for an annual disability benefit of $150,000 (equal to 50% of their annual cash compensation, up to $300,000 of
compensation) under the terms of the U.S. Bank Long-Term Disability Insurance Plan insured by Hartford Life and Accident Insurance Company. Optional additional disability insurance is available for
purchase by those NEOs. The definition of disability is generally that a participant is unable to perform material duties of his or her own occupation for 24 months following the six-month
elimination period, or any occupation after 24 months, and suffers a loss of at least 20% in predisability earnings. The definition of annual cash compensation is actual cash compensation for a
one-year period ending September 30. The disability benefit for any of the officers would be reduced by any benefits payable under the U.S. Bank Pension Plan, Social Security or worker's
compensation. The payments continue until the participant dies, ceases to have a disability or reaches normal retirement age.
Effect on Equity Awards:
If the employment of any of our officers who have received equity compensation awards is terminated due to disability, the terms of our
stock option and PRSU agreements provide that the vesting and other terms of those awards will continue as if the termination of employment did not occur. With the exception of Ms. Rogers, no
financial information for the event of disability is set forth below in the Potential Payments Upon Disability, Death, or Termination After a Change-in-Control table for the equity awards held by our
NEOs, as there is no immediate financial impact upon the occurrence of any of these events. Ms. Rogers holds unvested restricted stock and restricted stock units she was granted before becoming
an executive officer, and the agreements governing those awards provide for the acceleration of any unvested restricted shares or restricted stock units in the event of long-term disability.
Payments Made Upon Death
Cash Payments:
NEOs are eligible to receive life insurance benefits under the same plans available to our other employees. Their benefit is equal to their annual
cash compensation up to $300,000. In addition, optional term life insurance is available for purchase. As this benefit is generally available to all salaried employees and does not discriminate in
scope, terms, or operation in favor of the officers, the value has not been quantified in the Potential Payments Upon Disability, Death, or Termination After a Change-in-Control table.
Effect on Equity Awards:
All of our equity award agreements provide for the acceleration of any unvested award upon the death of the NEO. For PRSUs, the target
number of units will vest if the death occurs before the performance period has ended, and the earned number of units will vest if the death occurs on or after the last day of the performance period.
The stock option agreements generally provide that the administrator of the officer's estate has a three-year period after death during which to exercise the options.
Payments Upon Termination After a Change-in-Control
Cash Payments:
During 2016, we terminated the legacy severance agreements several of our executive officers had held. These agreements had provided for cash
benefits upon a termination of employment under certain circumstances within 24 months of a change-in-control. None of our NEOs is currently entitled to any cash payments in connection with a
change-in-control of U.S. Bancorp.
Effect on Equity Awards:
All of our equity award agreements provide for acceleration of the vesting of any unvested award if an NEO's employment is terminated
within 12 months after a change-in-control of U.S. Bancorp other than for cause. For PRSUs, the target number of units will vest if the qualifying termination occurs before the performance
period has ended, and the earned number of units will vest if the qualifying termination occurs on or after the last day of the performance period. Accelerated stock options may be exercised at any
time during the 12 months following the NEO's termination.
|
|
|
|
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
|
58
|
Table of Contents
Executive Compensation
|
|
Quantification of Estimated Payments and Benefits
The following table shows potential annual cash payments to the NEOs upon disability and the potential benefits the NEOs could accrue through accelerated
equity vesting upon death or termination of employment (other than for cause) following a change-in-control of U.S. Bancorp. No information regarding pension amounts payable to the NEOs is shown in
the following table; applicable pension amounts payable to these executive officers are discussed above under the heading "Pension Benefits."
The
amounts shown assume that termination was effective as of December 30, 2016, the last business day of the year, and are estimates of the amounts that would be paid to the executives upon
termination in addition to the base salary and cash incentive payments earned by the executives during 2016. The actual amounts to be paid can only be determined at the time of an executive's
termination.
Potential Payments Upon Disability, Death, or Termination After a Change-in-Control
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Type of Payment
|
|
|
Annual
Disability
Payments
($)
|
|
|
Payments
Upon Death
($)
|
|
|
Payments Upon
Termination After a
Change-In-Control
($)
|
|
Richard K. Davis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Pay
|
|
|
840,000
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
1,827,630
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Equity Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
1
|
|
|
|
|
|
4,835,933
|
|
|
4,835,933
|
|
|
|
PRSUs
2
|
|
|
|
|
|
20,039,642
|
|
|
20,039,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,667,630
|
|
|
24,875,575
|
|
|
24,875,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrance R. Dolan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Pay
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Equity Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
1
|
|
|
|
|
|
862,529
|
|
|
862,529
|
|
|
|
PRSUs
2
|
|
|
|
|
|
3,559,992
|
|
|
3,559,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
150,000
|
|
|
4,422,521
|
|
|
4,422,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A. Rogers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Pay
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Equity Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
1
|
|
|
|
|
|
584,630
|
|
|
584,630
|
|
|
|
Restricted Stock, Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Units and PRSUs
2
|
|
|
396,268
|
(3)
|
|
2,784,100
|
|
|
2,784,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
546,268
|
(4)
|
|
3,368,730
|
|
|
3,368,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Cecere
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Pay
|
|
|
480,000
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
696,240
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Equity Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
1
|
|
|
|
|
|
3,092,990
|
|
|
3,092,990
|
|
|
|
PRSUs
2
|
|
|
|
|
|
12,796,267
|
|
|
12,796,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,176,240
|
|
|
15,889,257
|
|
|
15,889,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Executive Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Type of Payment
|
|
|
Annual
Disability
Payments
($)
|
|
|
Payments
Upon Death
($)
|
|
|
Payments Upon
Termination After a
Change-In-Control
($)
|
|
P.W. (Bill) Parker
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Pay
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Equity Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
1
|
|
|
|
|
|
1,255,381
|
|
|
1,255,381
|
|
|
|
PRSUs
2
|
|
|
|
|
|
5,188,421
|
|
|
5,188,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
150,000
|
|
|
6,443,802
|
|
|
6,443,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffry H. von Gillern
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Pay
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceleration of Unvested Equity Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
1
|
|
|
|
|
|
948,702
|
|
|
948,702
|
|
|
|
PRSUs
2
|
|
|
|
|
|
3,915,524
|
|
|
3,915,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
150,000
|
(4)
|
|
4,864,226
|
|
|
4,864,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
1.
-
Value computed for each stock option
grant by multiplying (i) the difference between (a) $51.37, the closing market price of a share of our common stock on December 30, 2016, the last business day of the year, and
(b) the exercise price per share for that option grant by (ii) the number of shares subject to that option that vest.
-
2.
-
Value determined by multiplying the
number of shares or units that vest by $51.37, the closing market price of a share of our common stock on December 30, 2016, the last business day of the year. The value of the PRSUs is based
on the number of units earned in the applicable performance period.
-
3.
-
Represents the one-time value realized
through accelerated vesting of restricted stock and restricted stock units. Not an annual amount.
-
4.
-
Ms. Rogers and Mr. von
Gillern elected to purchase additional disability insurance, which is not included in this table.
|
|
|
|
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
|
60
|
Table of Contents
Director Compensation
|
|
Director Compensation
Compensation for 2016
Our non-employee directors received the following cash fees for serving on the Board in 2016:
|
|
|
|
|
|
|
|
Retainer
|
|
Annual retainer for service on the Board
|
|
$
|
90,000
|
|
|
|
|
|
|
Additional annual retainer for Lead Director
|
|
$
|
50,000
|
|
|
|
|
|
|
Additional annual retainer for chairs of Community Reinvestment and Public Policy, Compensation and Human Resources, and Governance Committees
|
|
$
|
20,000
|
|
|
|
|
|
|
Additional annual retainer for chairs of Audit and Risk Management Committees
|
|
$
|
32,500
|
|
|
|
|
|
|
Additional annual retainer for other members of Audit and Risk Management Committees
|
|
$
|
7,500
|
|
|
|
|
|
|
Each
non-employee director who served on U.S. Bancorp's primary banking subsidiary's board of directors or on any ad hoc committee of the U.S. Bancorp Board of Directors received $1,500 per meeting
for that service. Each non-employee director was also paid $1,500 for each meeting he or she attended that was not a regularly scheduled Board or committee meeting.
In
addition, each non-employee director received an annual award of restricted stock units with a grant date fair value of approximately $140,000 under the U.S. Bancorp 2015 Stock Incentive Plan. This
plan provides that no non-employee director may receive an equity award or awards with an aggregate grant date fair value in excess of $600,000 in any calendar year. The restricted stock units were
fully vested at the time of grant, but the underlying shares will not be delivered until the director ceases to serve on the board. Each non-employee director may elect to have all of his or her
shares delivered promptly following cessation of service or to have the shares delivered through ten annual installments. Each non-employee director is entitled to receive additional fully vested
restricted stock units having a fair market value equal to the amount of dividends he or she would have received had restricted stock been awarded instead of restricted stock units.
The
Compensation Committee retained FW Cook to provide advice regarding competitive compensation practices, peer analysis and recommendations to the Compensation Committee for guidance with respect to
director compensation in 2016. To determine director compensation for 2016, the Compensation Committee reviewed director compensation information for our peer group companies to check the alignment of
our compensation package with market practice and current trends.
Director Stock Ownership Guidelines
The Compensation Committee has established stock ownership guidelines for each non-employee director equal to five times the annual cash retainer. New
directors must satisfy this guideline within five years after joining the Board. As of December 31, 2016, all of the directors have sufficient holdings to meet or exceed the stock ownership
requirements, or have not yet served on our Board for five years.
Deferred Compensation Plan Participation
Under the U.S. Bank Outside Directors Deferred Compensation Plan (2005 Statement) (the "Director Deferred Compensation Plan"), our non-employee directors may
choose to defer all or a part of their cash fees. The minimum amount that can be deferred in any calendar year is $1,000. Cash fees that are deferred are deemed to be
invested in one of several investment funds, including a U.S. Bancorp common stock fund, as selected by the participant.
These
investment alternatives are the same as those available under the Executive Deferred Compensation Plan. See "Executive Compensation Nonqualified Deferred Compensation" above
for the rates of return for 2016 for each of these investment options (also known as measurement funds). The terms of the Director Deferred Compensation Plan are substantially the same as the terms of
the Executive Deferred Compensation Plan described in that section.
|
|
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61
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U.S.
Bancorp
2017
Proxy
Statement
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Table of Contents
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Director Compensation
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Director Compensation for Fiscal 2016
The following table shows the compensation of the individuals who served as members of our Board of Directors during any part of fiscal year 2016.
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Name
1
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Fees Earned or
Paid in Cash
($)
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Stock
Awards
($)
2
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All Other
Compensation
($)
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Total
($)
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Douglas M. Baker, Jr.
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117,500
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140,007
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257,507
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Warner L. Baxter
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100,500
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151,668
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252,168
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Marc N. Casper
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100,500
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139,980
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240,480
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Arthur D. Collins, Jr.
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140,000
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(3)
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140,007
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1,000
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(4)
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281,007
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Kimberly J. Harris
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110,000
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140,007
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250,007
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Roland A. Hernandez
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130,000
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140,007
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270,007
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Doreen Woo Ho
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124,500
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140,007
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264,507
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Joel W. Johnson
5
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105,000
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(3)
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140,007
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3,000
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(4)
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248,007
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Olivia F. Kirtley
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130,000
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(3)
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140,007
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270,007
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Karen S. Lynch
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97,500
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151,668
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249,168
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David B. O'Maley
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111,500
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140,007
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3,000
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(4)
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254,507
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O'dell M. Owens, M.D., M.P.H.
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109,500
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140,007
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249,507
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Craig D. Schnuck
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97,500
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140,007
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237,507
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Patrick T. Stokes
5
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122,500
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(3)
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140,007
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262,507
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Scott W. Wine
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105,000
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(3)
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140,007
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245,007
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1.
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Richard K. Davis, our Chairman and Chief
Executive Officer, is not included in this table because he was an employee of U.S. Bancorp during 2016 and therefore received no compensation for his service as director. The compensation he received
as an employee of U.S. Bancorp is shown above in the Summary Compensation Table.
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2.
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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 director serving at the time received a grant of 3,578 restricted stock
units on January 19, 2016 (grant date fair value: $140,007). Mr. Baxter and Ms. Lynch joined the Board in December 2015, and each was granted an additional 298 restricted stock
units on January 19, 2016, for their 2015 service (grant date fair value: $11,661). Mr. Casper joined the Board in March 2016, and he was granted 3,289 restricted stock units on
April 21, 2016 (grant date fair value: $139,980).
No non-employee director held any stock options as of December 31, 2016. The directors held restricted stock
units as of December 31, 2016, as follows:
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Name
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Restricted
Stock Units
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Name
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Restricted
Stock Units
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Mr. Baker
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62,853
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Ms. Kirtley
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70,275
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Mr. Baxter
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3,950
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Ms. Lynch
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3,950
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Mr. Casper
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3,331
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Mr. O'Maley
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69,225
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Mr. Collins
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65,503
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Dr. Owens
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61,497
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Ms. Harris
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10,895
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Mr. Schnuck
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76,764
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Mr. Hernandez
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20,125
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Mr. Stokes
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64,156
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Ms. Woo Ho
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20,123
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Mr. Wine
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8,789
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Mr. Johnson
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67,694
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3.
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Messrs. Collins, Johnson, Stokes
and Wine and Ms. Kirtley chose to defer their cash fees under the Director Deferred Compensation Plan.
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4.
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Represents matching contributions under
our charitable matching gifts program, which applies to all of our employees and directors.
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5.
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Messrs. Johnson
and Stokes did not stand for re-election at the 2016 annual meeting.
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U.S.
Bancorp
2017
Proxy
Statement
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62
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Table of Contents
Audit Committee Report and Payment of Fees to Auditor
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Audit Committee Report and Payment of Fees to Auditor
Audit Committee Report
The consolidated financial statements of U.S. Bancorp for the year ended December 31, 2016, were audited by Ernst & Young LLP,
independent auditor for U.S. Bancorp.
As
part of its activities, the Audit Committee has:
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1.
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Reviewed and discussed with management the audited financial statements of U.S. Bancorp;
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2.
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Discussed with the independent auditor the matters required to be discussed under
Auditing Standard No. 1301,
Communications with Audit Committees,
as adopted by the U.S. Public Company Accounting Oversight Board ("PCAOB"),
Statement of Auditing Standards
No. 99 (Consideration of Fraud in a Financial Statement Audit)
, and under the SEC, PCAOB and NYSE rules;
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3.
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Received the written disclosures and letter from the independent auditor required by applicable requirements of the PCAOB regarding the independent
accountant's communications with the audit committee concerning independence; and
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4.
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Discussed with the independent auditor their independence.
Based
on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements of U.S. Bancorp for
the year ended December 31, 2016, be included in U.S. Bancorp's Annual Report on Form 10-K filed with the SEC.
Audit Committee of the Board of Directors of U.S. Bancorp
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Roland A. Hernandez,
Chair
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Karen S. Lynch
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Warner L. Baxter
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Scott W. Wine
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Fees to Independent Auditor
The following aggregate fees were billed to us for professional services by Ernst & Young LLP for fiscal years 2016 and 2015:
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($ in millions)
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2016
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2015
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Audit Fees
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$
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11.3
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$
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11.0
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Audit-Related Fees
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4.7
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5.2
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Tax Fees
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6.0
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4.9
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All Other Fees
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1.4
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1.0
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Total
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$
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23.4
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$
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22.1
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Audit Fees:
Audit fees consist of fees billed to us by Ernst & Young LLP for the audit of our consolidated financial statements
included in our Annual Reports on Form 10-K, reviews of our financial statements included in each of our Quarterly Reports on Form 10-Q, and audits of financial statements of our
subsidiaries required by regulation, as well as procedures required by regulators, comfort letters, consents and assistance provided with our regulatory filings.
Audit-Related Fees:
Audit-related fees consist of fees billed to us by Ernst & Young LLP for audits of pension and other employee
benefit plan financial statements, audits of the financial statements of certain of our subsidiaries and affiliated entities, reviews of internal controls not related to the audit of our consolidated
financial statements, and internal control reports for various lines of business to support their customers' business requirements.
Tax Fees:
Tax fees consist of fees billed to us by Ernst & Young LLP for tax compliance and review, tax planning and other tax
services. The aggregate fees billed for tax compliance and review services, including the preparation of and assistance with federal, state and local income tax returns, sales and use filings, and
foreign and other tax compliance, provided to us by Ernst & Young LLP was $4.5 million in 2016 and $4.1 million in 2015. In addition to fees being paid
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63
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U.S.
Bancorp
2017
Proxy
Statement
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Table of Contents
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Audit Committee Report and Payment of Fees to Auditor
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for
tax compliance services, we paid $1.5 million and $0.8 million for tax planning and other tax services provided to us by Ernst & Young LLP during 2016 and 2015,
respectively.
All Other Fees:
Other fees billed to us by Ernst & Young LLP in 2016 and 2015 primarily related to advisory services for internal
control, regulatory reporting and quality assurance programs.
Administration of Engagement of Independent Auditor
The Audit Committee is responsible for appointing, compensating, retaining and overseeing the work of our independent auditor, including approving the
services provided by the independent auditor and the associated fees. The Audit Committee has established a policy for pre-approving the services provided by our independent auditor in accordance with
the auditor independence rules of the SEC. This policy requires the review and pre-approval by the Audit Committee of all audit and permissible non-audit services provided by our independent auditor
and an annual review of the financial plan for audit fees. To ensure that auditor independence is maintained, the Audit Committee annually pre-approves the audit services to be provided by our
independent auditor and the related estimated fees for such services, as well as the nature and extent of specific types of audit-related, tax and other non-audit services to be provided by the
independent auditor during the year.
As
the need arises, other specific permitted services are pre-approved on a case-by-case basis during the year. A request for pre-approval of services on a case-by-case basis must be submitted by our
controller or chief risk officer. These requests are required to include information on the nature of the particular service to be provided, estimated related fees and management's assessment of the
impact of the service on the auditor's independence. The Audit Committee has delegated to its chair pre-approval authority between meetings of the Audit Committee. Any pre-approvals made by the chair
must be reported to the Audit Committee. The Audit Committee will not delegate to management the pre-approval of services to be performed by our independent auditor.
All
of the services provided by our independent auditor in 2016 and 2015, including services related to the Audit-Related Fees, Tax Fees and All Other Fees described above, were approved by the Audit
Committee under its pre-approval policies after consideration of any impact of these services on the auditor's independence.
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U.S.
Bancorp
2017
Proxy
Statement
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64
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Table of Contents
Proposal 2 Ratification of Selection of Independent Auditor
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Proposal 2 Ratification of Selection of Independent Auditor
The Audit Committee has selected Ernst & Young LLP as our independent auditor for the 2017 fiscal year. Ernst &
Young LLP began serving as our independent auditor for the fiscal year ended December 31, 2003. Our Audit Committee has carefully considered the selection of Ernst &
Young LLP as our independent auditor, and has also considered whether there should be regular rotation of the independent external audit firm.
The
Audit Committee annually reviews Ernst & Young LLP's independence and performance in connection with the committee's determination of whether to retain Ernst &
Young LLP or engage another firm as our independent auditor. In determining whether to reappoint Ernst & Young LLP as U.S. Bancorp's independent auditor, the Audit Committee took
into consideration a number of factors, including the qualifications of Ernst & Young LLP, the lead audit partner, and other key personnel; the length of time the firm has been engaged;
the quality of the historical and recent performance on the U.S. Bancorp audit; Ernst & Young LLP's capability and expertise in handling the breadth and complexity of our operations; the
appropriateness of Ernst & Young LLP's fees on an absolute basis and as compared to peer firms; and the advisability and potential impact of selecting a different independent audit firm.
In
accordance with SEC rules and company policies, lead and concurring audit partners are subject to a maximum of five years of service in that capacity. The process for selecting the audit firm's
lead engagement partner involves meetings with the candidates for the role by management; review and discussion with the Chair of the Audit Committee, who meets with selected candidates; and further
discussion with the full committee.
The
members of the Audit Committee believe the continued retention of Ernst & Young LLP to serve as our independent auditor is in the best interests of our company and its shareholders.
While we are not required to do so, we are submitting the selection of Ernst & Young LLP to serve as our independent auditor for the 2017 fiscal year for ratification in order to
ascertain the views of our shareholders on this appointment. If the selection is not ratified, the Audit Committee will reconsider its selection. Representatives of Ernst & Young LLP are
expected to be present at the annual meeting, will be available to answer shareholder questions, and will have the opportunity to make a statement if they desire to do so.
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FOR
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The Board of Directors recommends that you vote "FOR" ratification of the selection of Ernst & Young LLP as the independent auditor of U.S.
Bancorp for the 2017 fiscal year.
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65
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U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
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Proposal 3 Advisory Vote on Executive Compensation
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Proposal 3 Advisory Vote on Executive Compensation
Executive compensation is an important matter to us. We are asking our shareholders to provide advisory approval of the compensation of our
executive officers named in the Summary Compensation Table, as we have described it in the "Compensation Discussion and Analysis" and "Executive Compensation" sections of this proxy
statement. We have been conducting annual advisory votes on executive compensation since 2009 and expect to conduct the next advisory vote at our 2018 annual meeting of shareholders, pending the
outcome of the advisory vote on the frequency of future advisory votes on executive compensation in Proposal 4.
We
have designed our executive compensation program to attract, motivate, reward and retain the senior management talent required to achieve our corporate objectives and increase shareholder value.
Our compensation policies and procedures are centered on a pay-for-performance philosophy and are strongly aligned with the long-term interests of our shareholders.
Our
company is presenting this proposal, which gives you as a shareholder the opportunity to endorse or not endorse our executive pay program by voting "FOR" or "AGAINST" the following resolution:
"RESOLVED,
that the shareholders approve, on an advisory basis, the compensation of the named executive officers, as described in the Compensation Discussion and Analysis, the compensation tables and
the related disclosure contained in this proxy statement."
As
discussed in the "Compensation Discussion and Analysis" section earlier in this proxy statement, the Compensation Committee of the Board of Directors believes that the compensation of our NEOs in
2016 was reasonable and appropriate, reflected the performance of our company, and aligned our executives' interests with those of our shareholders to support long-term value creation.
This
vote, which is required pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is not intended to address any specific item of compensation, but
rather our overall compensation policies and procedures relating to our NEOs described in this proxy statement. Accordingly, your vote will not directly affect or otherwise limit any existing
compensation or award arrangement of any of our NEOs.
Because
your vote is advisory, it will not be binding upon the Board of Directors. However, the Board values shareholders' opinions and the Compensation Committee will take into account the outcome of
the vote when considering future executive compensation arrangements.
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FOR
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The Board of Directors recommends that you vote "FOR" approval of the compensation of our named executive officers, as disclosed in this proxy
statement.
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U.S.
Bancorp
2017
Proxy
Statement
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66
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Table of Contents
Proposal 4 Advisory Vote on the Frequency of Future Advisory Votes on Executive
Compensation
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Proposal 4 Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation
In addition to the advisory approval of our executive compensation program in Proposal 3, we are seeking an advisory vote from you as a
shareholder regarding the frequency with which shareholders should have an opportunity to have an advisory vote on our executive compensation program. We are providing you the option of selecting a
frequency of every "ONE YEAR," "TWO YEARS" or "THREE YEARS."
Our
shareholders were provided with the opportunity to vote on the frequency of advisory votes on our executive compensation program in 2011. At that time, our shareholders opted for an annual vote.
Based on the results of the 2011 vote, our Board of Directors adopted a policy to hold an annual advisory vote on our executive compensation program. Since the time of our initial frequency vote, it
has become widely accepted practice to hold the advisory vote on executive compensation annually, and we have found that an annual vote facilitates shareholder engagement on executive compensation
matters.
We
therefore recommend that you select "ONE YEAR" when voting on the frequency of advisory votes on executive compensation. Although this vote, which is required pursuant to Section 14A of the
Exchange Act, is non-binding, our Board of Directors values the opinions of our shareholders and will consider the outcome of the vote when determining the frequency of future advisory votes on
executive compensation. A frequency vote similar to this one will occur at least once every six years.
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ONE YEAR
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The Board of Directors recommends that you select "ONE YEAR" for the frequency of future advisory votes on executive
compensation.
Proposal 5 Shareholder Proposal Regarding Independent Chairman
The Board of Directors recommends that you vote "AGAINST" the shareholder proposal set forth below.
Gerald
R. Armstrong, 621 Seventeenth Street, No. 2000, Denver, Colorado 80293-2001, 303.355.1199, the owner of 7,276 shares of our common stock, has advised us that he plans
to introduce the following resolution at the annual meeting. In accordance with rules of the SEC, the text of the proponent's resolution and supporting statement is printed verbatim from his
submission.
That
the shareholders of U.S. BANCORP request its Board of Directors to adopt a policy, and amend the by-laws as necessary, to require the Chairman of the Board of Directors be an independent member
of the Board of Directors.
This
policy should not be implemented to violate any contractual obligation and should specify: (a) how to select a new "independent" chairman if the current chairman ceases to be independent
during the time between annual meetings of shareholders; and, (b) that compliance is excused if no independent director is available and willing to serve as Chairman.
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67
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U.S.
Bancorp
2017
Proxy
Statement
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Table of Contents
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Proposal 5 Shareholder Proposal Regarding Independent Chairman
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The reasons given by the proponent for the resolution are as follows:
U.S.
BANCORP and WELLS FARGO & COMPANY opposed this proposal of the proponent many times in past annual meetings.
In
the fall of 2016 after Wells Fargo & Company admitted its several problems, it abandoned the dual role of one person serving as its Chairman of the Board while being Chief Executive Officer
and appointed an "independent" Chairman and "independent" Vice-Chairman of the Board. Obviously, its Board finally realized the seriousness of the issues and the
impact of its paying $210,000,000 in fines. More recently, it increased high-end estimates of reasonably possible potential litigation losses to $1,700,000,000.
This
proposal's proponent is a long-term shareholder of U.S. BANCORP and was responsible for its elimination of classified three-year terms for directors and super-majority voting requirements, and
gained a policy prohibiting officers and directors from pledging their U.S. BANCORP shares as collateral.
He
is familiar with U.S. BANCORP's problems which originated under an administration where one person served as Chairman and Chief Executive Officer and was accountable only to himself. The
shareholders' dividends remain reduced by 34.11%.
DuPont's
failures were placed upon its Board Chair and Chief Executive Officer who was ousted by its board in the same manner that Target Corporation's board ousted its Chairman/Chief Executive
Officer a year earlier. Studies have confirmed that underperforming companies lack an independent chairman and companies, worldwide, are routinely separating the positions of chairman and CEO (CEO
Succession 2000-2009: A Decade of Convergence and Compression, Booz & Co., Summer, 2010).
Norges
Bank Investment Management has stated in support of a similar proposal:
"The
roles of Chairman of the Board and CEO are fundamentally different and should not be held by the same person. There should be a clear division of responsibilities between these positions to
insure a balance of power and authority on the Board."
If
you agree, please vote "FOR" this proposal.
Board of Directors' Response
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The Board should retain the flexibility to determine the most effective leadership structure for U.S. Bancorp.
Our Board believes that a strong, independent Board of Directors is critical to effective oversight of management. Our Board regularly and carefully considers
the critical issue of the best independent leadership structure for the Board, and maintains a flexible policy regarding the issue of whether the position of Chairman should be held by an independent
director. At least annually, the Board reviews the Board's and company's needs and the leadership attributes of its directors and executives to determine whether our company is best served at that
particular time by having the CEO or another director hold the position of Chairman.
The
Board has deep knowledge of our strategic goals, the unique opportunities and challenges we face, and the various strengths and capabilities of our directors and U.S. Bancorp's senior management.
Thus, rather than taking a "one-size fits all" approach to Board leadership, the Board is best positioned to determine the most effective leadership structure for U.S. Bancorp at any given time.
U.S. Bancorp's shareholders are best served by our current leadership structure.
Richard K. Davis has served as our CEO since December 2006 and as Chairman since December 2007. On the date of the annual meeting, Andrew Cecere, our current
President and Chief Operating Officer, who has 31 years of experience with the company, will become CEO and Mr. Davis will continue on the Board as Executive Chairman. Mr. Cecere
has been serving as a director, and David B. O'Maley has been serving as the Board's independent Lead Director, since January 2017.
The
independent directors believe that Mr. Davis's continued leadership of the Board will constitute a valuable resource to the Board and Mr. Cecere, and will help facilitate a smooth
transition of the CEO role. In addition, having the former CEO continue to serve as Executive Chairman and having the incoming CEO serve as a director will create a strong
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U.S.
Bancorp
2017
Proxy
Statement
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68
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Table of Contents
Proposal 5 Shareholder Proposal Regarding Independent Chairman
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bridge
between the Board and management during the transition. The Board will also continue to benefit from the independent leadership provided by a strong Lead Director.
U.S. Bancorp's corporate governance practices provide for strong independent leadership and effective independent oversight of our company.
The Board is committed to the highest standards of good governance and has adopted policies and practices to provide for Board independence and effective
oversight of management:
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▶
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In accordance with the Corporate Governance Guidelines, the Board has a strong, independent Lead Director. Whenever
the Chairman of the Board is not an independent director, the independent members of the Board elect an independent director to act as Lead Director based on the recommendation of our Governance
Committee. The Lead Director is expected to serve in that capacity for three to five years, and has substantial leadership responsibilities. These responsibilities are described above under the
caption "Corporate Governance Board Leadership Structure."
-
▶
-
The Lead Director conducts executive sessions of the Board at every regular Board meeting and may call for an
executive session of independent directors at any time, and approves all Board meeting agendas and schedules. The Lead Director provides independent oversight of management and meaningful coordination
between our Chairman and our independent directors.
-
▶
-
Each of the Audit Committee, Compensation and Human Resources Committee, and Governance Committee is composed solely
of independent directors. This means the independent directors oversee critical, risk-sensitive matters such as the quality and integrity of our financial statements; the compensation of our executive
officers, including the CEO; the nomination of directors; and the evaluation of the Board, its committees, and its members. These committees also meet in executive session on a regular basis.
-
▶
-
All Board members have complete access to management and the authority to retain legal, accounting and other outside
consultants to advise the Board and the committees as they deem appropriate.
The proposal's suggestion that U.S. Bancorp's dividend rate is attributable to its Board leadership structure is misleading.
In March 2009, the Board prudently reduced U.S. Bancorp's quarterly cash dividend rate to preserve capital in the face of the severe U.S. economic crisis. The
proposal incorrectly suggests that this dividend reduction was somehow attributable to the Chairman and CEO positions being held by the same person. Instead, U.S. Bancorp's dividend rate is determined
by the Board based on U.S. Bancorp's capital position and the limitations imposed by federal bank regulators. Since March 2009, U.S. Bancorp's quarterly cash dividend rate has been increased by 460%.
|
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AGAINST
|
The Board of Directors recommends that you vote "AGAINST" this proposal seeking the adoption of a policy requiring that the Chairman of the Board be an
independent director.
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69
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|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Security Ownership of Certain Beneficial Owners and Management
|
Security Ownership of Certain Beneficial Owners and Management
The following tables show how many shares of our common stock were beneficially owned as of February 7, 2017, by each current director
and director nominee, each of the NEOs, all of our directors and executive officers as a group, and each person who is known by us to beneficially own more than 5% of our voting securities.
Unless
otherwise noted, the shareholders listed in the tables have sole voting and investment power with respect to the shares of common stock owned by them. None of the shares beneficially owned by
our directors or executive officers are subject to any pledge, in accordance with our company policy prohibiting them from pledging or hedging our common stock.
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Name of Beneficial Owner
|
|
|
Outstanding
Shares of
Common
Stock
1
|
|
|
Options Exercisable
Within 60 Days of
February 7, 2017
|
|
|
Restricted
Stock
Units
2
|
|
|
Deferred
Compensation
3
|
|
|
Total
|
|
|
Percent of
Common Stock
|
|
Douglas M. Baker, Jr.
|
|
|
1,000
|
|
|
|
|
|
66,159
|
|
|
|
|
|
67,159
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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Warner L. Baxter
|
|
|
|
|
|
|
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6,929
|
|
|
|
|
|
6,929
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
Marc N. Casper
|
|
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|
|
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6,307
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|
|
|
|
|
6,307
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|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Andrew Cecere
|
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|
413,794
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|
774,230
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|
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96,986
|
|
|
|
|
|
1,285,010
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Arthur D. Collins, Jr.
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|
|
|
|
|
|
|
|
68,824
|
|
|
27,479
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|
|
96,303
|
|
|
*
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|
|
|
|
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|
|
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|
|
|
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Richard K. Davis
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|
792,807
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|
1,559,253
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|
|
156,323
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|
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73,266
|
|
|
2,581,649
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Terrance R. Dolan
|
|
|
30,239
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|
|
68,065
|
|
|
27,232
|
|
|
|
|
|
125,536
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|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Kimberly J. Harris
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|
|
|
|
|
|
|
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13,913
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|
|
|
|
|
13,913
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Roland A. Hernandez
|
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|
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|
23,194
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|
|
2,381
|
|
|
25,575
|
|
|
*
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
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Doreen Woo Ho
|
|
|
|
|
|
|
|
|
23,192
|
|
|
1,895
|
|
|
25,087
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
Olivia F. Kirtley
|
|
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10,649
|
|
|
|
|
|
73,623
|
|
|
24,649
|
|
|
108,921
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Karen S. Lynch
|
|
|
|
|
|
|
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|
6,929
|
|
|
|
|
|
6,929
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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David B. O'Maley
|
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253,439
|
|
|
|
|
|
72,567
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|
12,096
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|
|
338,102
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
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O'dell M. Owens, M.D., M.P.H.
|
|
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|
|
|
|
|
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64,796
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|
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71,869
|
|
|
136,665
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
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P.W. (Bill) Parker
|
|
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193,559
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93,404
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|
|
38,251
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|
|
|
|
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325,214
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|
|
*
|
|
|
|
|
|
|
|
|
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|
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Kathleen A. Rogers
|
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48,540
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16,465
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15,513
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|
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80,518
|
|
|
*
|
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Craig D. Schnuck
|
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80,148
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80,148
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*
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|
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Jeffry H. von Gillern
|
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71,702
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88,448
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29,954
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|
|
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190,104
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*
|
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Scott W. Wine
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400
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|
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11,795
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|
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8,376
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|
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20,571
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*
|
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|
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All directors and executive officers as a group (29 persons)
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2,196,863
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3,220,187
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1,043,891
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240,046
|
|
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6,700,987
|
|
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*
|
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|
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|
|
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|
|
|
|
|
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|
|
|
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|
-
*
-
Indicates
less than 1%.
-
1.
-
Common Stock
|
|
|
|
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
|
70
|
Table of Contents
Security Ownership of Certain Beneficial Owners and Management
|
|
-
▶
-
For Mr. Dolan, includes 5,515 shares held in the U.S. Bank 401(k)
Savings Plan;
-
▶
-
For Ms. Rogers, includes 11 shares held in a trust in which
Ms. Rogers is trustee; 6,929 shares held in the U.S. Bank 401(k) Savings Plan; and 2,133 shares of restricted stock subject to future vesting conditions;
-
▶
-
For Mr. von Gillern, includes 14,120 shares held in the U.S. Bank 401(k)
Savings Plan;
-
▶
-
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 103,581 shares
held in the U.S. Bank 401(k) Savings Plan for the accounts of certain executive officers; and 9,345 shares of restricted stock granted to certain executive officers that are subject to future vesting
conditions.
-
2.
-
Restricted Stock Units
Restricted stock units (including performance-based restricted stock units held by our executive officers) are distributable in an equivalent number of shares of
our common stock upon settlement. Restricted stock units granted to our officers are settled as they vest, and restricted stock units granted to our directors are immediately vested but do not settle
until the director ceases to serve on the Board. The number of restricted stock units that are currently vested, or that vest within 60 days of February 7, 2017, is included in this
column.
-
3.
-
Deferred Compensation
Certain of our directors and officers 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 or officer's retirement or other termination of employment or service with U.S. Bancorp. The directors and officers have no voting or investment power as
to these shares. The number of shares to which the directors and officers would have been entitled had their employment or service with U.S. Bancorp been terminated as of February 7, 2017, is
included in this column.
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|
Name of Beneficial Owner
|
|
|
Shares of
Common Stock
|
|
|
Percent of
Common Stock
|
|
BlackRock, Inc.
1
|
|
|
109,633,386
|
|
|
6.47
|
%
|
|
|
|
|
|
|
|
|
Warren E. Buffett
Berkshire Hathaway Inc.
2
|
|
|
103,333,840
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|
|
6.10
|
%
|
|
|
|
|
|
|
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|
The Vanguard Group
3
|
|
|
100,621,144
|
|
|
5.94
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%
|
|
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|
|
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|
-
1.
-
BlackRock, Inc.
Based on Amendment No. 7 to Schedule 13G filed with the SEC on January 27, 2017, by BlackRock, Inc., on behalf of itself and certain
of its subsidiaries. BlackRock, Inc. has sole voting power over 94,225,753 shares, sole dispositive power over 109,620,674 shares, and shared voting and dispositive powers over 12,712 shares.
The address for BlackRock is 55 East 52nd Street, New York, NY 10055.
-
2.
-
Warren E. Buffett and Berkshire Hathaway Inc.
Based on Amendment No. 2 to Schedule 13G filed with the SEC on February 16, 2016, by Warren E. Buffett, Berkshire Hathaway Inc., a
holding company which Mr. Buffett may be deemed to control, and other members of the filing group of which none beneficially owns more than 5% of the outstanding shares of U.S. Bancorp common
stock. Mr. Buffett has sole voting and dispositive powers over 884,230 shares, and shared voting and dispositive powers over 102,449,610 shares. Berkshire Hathaway Inc. has sole voting
and dispositive powers over no shares, and shared voting and dispositive powers over 102,449,610 shares. The address for each of Mr. Buffett and Berkshire Hathaway is 3555 Farnam Street,
Omaha, NE 68131.
-
3.
-
The Vanguard Group
Based on Amendment No. 2 to Schedule 13G filed with the SEC on February 10, 2017, by The Vanguard Group, on behalf of itself and certain of
its subsidiaries. The Vanguard Group has sole voting power over 2,560,053 shares, shared voting power over 340,935 shares, sole dispositive power over 97,747,781 shares and shared dispositive power
over 2,873,363 shares. Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd., wholly-owned subsidiaries of The Vanguard Group, beneficially own 2,072,867 and 1,287,682
shares, respectively. The address for The Vanguard Group is 100 Vanguard Boulevard, Malvern, PA 19355.
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71
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Questions and Answers About the Annual Meeting and Voting
|
Questions and Answers About the Annual Meeting and Voting
Why did I receive the proxy materials?
We have furnished the proxy materials to you over the Internet or mailed you a printed copy of these materials because the Board of Directors of U.S. Bancorp
is soliciting your proxy to vote your shares of our common stock at the annual meeting of shareholders to be held on April 18, 2017, or at any adjournments or postponements of the meeting.
What is a proxy?
It is your designation of another person to vote stock you own. That other person is called a proxy. If you designate someone as your proxy in a written
document, that document also is called a proxy or a proxy card. When you designate a proxy, you also may direct the proxy how to vote your shares. We refer to this as your "proxy vote." Andrew Cecere,
our incoming CEO, and Laura F. Bednarski, our Corporate Secretary, have been designated as the proxies to cast the votes of our shareholders at our 2017 annual meeting of shareholders.
How can I access the proxy materials and vote my shares?
The instructions for accessing the proxy materials and voting can be found in the information you received
either by mail or e-mail. Depending on how you received the proxy materials, you may vote by Internet, telephone or mail. We encourage you to vote by
Internet.
-
▶
-
If you are a shareholder who
received a notice by mail regarding the Internet availability of the proxy materials:
You may access the proxy materials and voting instructions over
the Internet via the web address provided in the notice. In order to access this material and vote, you will need the control number provided on the notice you received in the mail. You may
vote by following the instructions on the notice or on the website.
-
▶
-
If you are a shareholder who
received an e-mail directing you to the proxy materials:
You may access the proxy materials and voting instructions over the Internet via the web
address provided in the e-mail. In order to access these materials and vote, you will need the control number provided in the e-mail. You may vote by following the instructions in the e-mail
or on the website.
-
▶
-
If you are a shareholder who
received the proxy materials by mail:
You may vote your shares by following the instructions provided on the proxy card or voting instruction form. If
you vote by Internet or telephone, you will need the control number provided on the proxy card or voting instruction form. If you vote by mail, please complete, sign and date the proxy card or
voting instruction form and mail it in the accompanying pre-addressed envelope.
What is the purpose of the meeting?
At our annual meeting, shareholders will act upon the matters outlined in the notice of annual meeting of shareholders and described in this proxy statement.
Management will also report on our 2016 performance and, once the business of the annual meeting is concluded, respond to questions from shareholders.
Why did I receive a notice regarding the Internet availability of proxy materials instead of a printed copy of the proxy materials?
In accordance with rules adopted by the SEC, we are furnishing our proxy materials to our shareholders primarily over the Internet instead of mailing printed
copies of those materials to each shareholder. By doing so, we reduce costs and lessen the environmental impact of our proxy solicitation. On or about March 7, 2017, we mailed a notice of
Internet availability of the proxy materials to most of our shareholders who had not previously requested printed materials. The notice contains instructions about how to access our proxy materials
and vote online. This notice is not a proxy card and cannot be used to vote your shares. If you would like to receive a paper copy of our proxy materials, please follow the instructions on the notice.
We
provided some of our shareholders, including shareholders who have previously requested to receive paper copies of the proxy materials and some of our shareholders who are participants in our
benefit plans, with paper copies of the proxy materials instead of a notice. If you received paper copies of the notice or proxy materials, we encourage you to
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|
U.S.
Bancorp
2017
Proxy
Statement
|
|
72
|
Table of Contents
Questions and Answers About the Annual Meeting and Voting
|
|
sign
up to receive all of your future proxy materials electronically, as described under "How can I receive my proxy materials by e-mail in the future?" below.
Who is entitled to vote at the meeting?
The Board has set February 21, 2017, as the record date for the annual meeting. If you were a shareholder of record at the close of business on
February 21, 2017, you are entitled to vote at the meeting. As of the record date, 1,693,223,546 shares of our common stock were issued and outstanding and, therefore, eligible to vote
at the meeting.
What are my voting rights?
Holders of our common stock are entitled to one vote per share. Therefore, a total of 1,693,223,546 votes are entitled to be cast at the meeting. There
is no cumulative voting.
How many shares must be present to hold the meeting?
In accordance with our bylaws, shares equal to at least one-third of the voting power of our outstanding shares of common stock as of the record date must be
present at the meeting in order to hold the meeting and conduct business. This is called a quorum. Your shares are counted as present at the meeting if:
-
▶
-
you have properly submitted a proxy vote by Internet, telephone or mail, even if you abstain from voting on one or
more matters;
-
▶
-
you are present and vote in person at the meeting; or
-
▶
-
you hold your shares in street name (as discussed below) and you provide voting instructions to your broker, bank,
trust or other nominee or you do not provide voting instructions but your broker, bank, trust or other nominee uses its discretionary authority to vote your shares on the ratification of the selection
of our independent auditor.
What is the difference between a shareholder of record and a "street name" holder?
If your shares are registered directly in your name with our transfer agent, Computershare Investor Services, you are considered the shareholder of record
with respect to those shares.
If
your shares are held in a stock brokerage account or by a bank, trust or other nominee, then the broker, bank, trust or other nominee is considered to be the shareholder of record with respect to
those shares. However, you still are considered the beneficial owner of those shares and your shares are said to be held in "street name." Street name holders generally cannot vote their shares
directly and must instead instruct the broker, bank, trust or other nominee how to vote their shares using the voting instruction form provided by it.
How do I vote if my shares are held in the U.S. Bank 401(k) Savings Plan?
If you hold any shares in the U.S. Bank 401(k) Savings Plan, you are receiving, or being provided access to, the same proxy materials as any other shareholder
of record. However, your proxy vote will serve as voting instructions to the plan trustee. Your voting instructions must be received at least five days prior to the annual meeting in order to count.
In accordance with the terms of the plan, the trustee will vote all of the shares held in the plan in the same proportion as the actual proxy votes submitted by plan participants at least five days
prior to the annual meeting.
Can I vote my shares in person at the meeting?
If you are a shareholder of record, you may vote your shares in person by completing a ballot at the meeting. Even if you currently plan to attend the
meeting, we recommend that you also submit your proxy as described above so that your vote will be counted if you later decide not to attend the meeting.
If
you are a street name holder, you may vote your shares in person at the meeting only if you obtain a signed letter or other document from your broker, bank, trust or other nominee giving you the
right to vote the shares at the meeting.
If
you are a participant in the U.S. Bank 401(k) Savings Plan, you may submit a proxy vote as described above, but you may not vote your 401(k) Savings Plan shares in person at the meeting.
What if I am a shareholder of record and do not specify how I want my shares voted?
If you submit your proxy by Internet or submit a signed proxy card and do not specify how you want to vote your shares, we will vote your shares in accordance
with the recommendations of the Board. Our telephone voting procedures do not permit you to submit your proxy vote by telephone without specifying how you want your shares voted.
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73
|
|
U.S.
Bancorp
2017
Proxy
Statement
|
Table of Contents
|
Questions and Answers About the Annual Meeting and Voting
|
What if I hold my shares in street name and do not provide voting instructions?
If you hold your shares in street name and do not provide voting instructions, your broker, bank, trust or other nominee has discretionary authority to vote
your shares on the ratification of the selection of Ernst & Young LLP as our independent auditor. However, in the absence of your specific instructions as to how to vote, your broker,
bank, trust or other nominee does not have discretionary authority to vote on any other proposal. Such a situation results in a "broker non-vote," which does not have an effect on the outcome of the
proposal. It is important, therefore, that you provide instructions to your broker, bank, trust or other nominee so that your vote with respect to the other proposals is counted.
What vote is the voting standard and what is the effect of abstentions?
You may vote "FOR," "AGAINST" or "ABSTAIN" for each nominee for the Board of Directors (Proposal 1), the ratification of the selection of independent auditor
(Proposal 2), the advisory vote on executive compensation (Proposal 3), and the shareholder proposal regarding an independent chairman (Proposal 5). You may
vote "ONE YEAR," "TWO YEARS," "THREE YEARS" or "ABSTAIN" for the advisory vote on the frequency of future advisory votes on executive compensation (Proposal 4).
The
following table summarizes the voting standard applicable to each proposal and the effect of an "ABSTAIN" vote in each instance.
|
|
|
|
|
Proposal
|
|
Voting Standard
|
|
Effect of "ABSTAIN" Vote
|
Election of directors
|
|
The nominee is elected if the number of votes cast "FOR" him or her exceeds the number of votes cast "AGAINST" him or her
|
|
No effect
|
|
|
|
|
|
Advisory vote on the frequency of future advisory votes on executive compensation
|
|
The option of "ONE YEAR," "TWO YEARS" or "THREE YEARS" that receives the most votes is approved
|
|
No effect
|
|
|
|
|
|
All other proposals
|
|
The proposal is approved if "FOR" votes are cast by the majority of shares present and entitled to vote
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Same effect as "AGAINST" vote
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What does it mean if I receive more than one notice of Internet availability of proxy materials, proxy card, voting instruction form, or e-mail with instructions on how to access the proxy materials?
If you receive more than one notice of Internet availability of proxy materials, set of paper proxy materials, or e-mail with instructions on how to access
the proxy materials, it means that you hold shares in more than one account. To ensure that all of your shares are voted, vote separately for each notice of Internet availability of proxy materials,
proxy card, voting instruction form, and e-mail you receive.
Can I change my vote after submitting my proxy?
Yes. You may revoke your proxy and change your vote at any time before your proxy is voted at the annual meeting. If you are a shareholder of record, you may
revoke your proxy and change your vote by:
-
▶
-
voting again over the Internet or by telephone by no later than 11:59 p.m., Eastern time, on April 17,
2017, or by submitting a proxy card with a later date and returning it so that it is received by April 17, 2017; or
-
▶
-
submitting written notice of revocation to our Corporate Secretary at the address shown on page 77 of this
proxy statement so that it is received by April 17, 2017.
Attending
the meeting will not revoke your proxy unless you specifically request to revoke it or submit a ballot at the meeting. To request an additional proxy card, or if you have any questions about
the annual meeting or how to vote or revoke your proxy, you should write to Investor Relations, U.S. Bancorp, 800 Nicollet Mall, Minneapolis, MN 55402 or call 866.775.9668.
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U.S.
Bancorp
2017
Proxy
Statement
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74
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Table of Contents
Questions and Answers About the Annual Meeting and Voting
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If
you hold your shares in street name, contact your broker, bank, trust or other nominee regarding how to revoke your proxy and change your vote. If you are a participant in the U.S. Bank 401(k)
Savings Plan, you may revoke your proxy and change your vote as described above, but only until 11:59 p.m., Eastern time, on April 13, 2017.
Will my vote be kept confidential?
Yes. We have procedures to ensure that all proxies, ballots and voting tabulations that identify shareholders are kept permanently confidential, except as
follows: to meet legal requirements, to assert claims for or defend claims against our company, to allow authorized individuals to count and certify the results of the shareholder vote if a proxy
solicitation in opposition to the Board takes place, or to respond to shareholders who have written comments on proxy cards or who have requested disclosure. We also have the voting tabulations
performed by an independent third party.
Who will count the votes?
Representatives of Broadridge Financial Solutions, Inc., our tabulation agent, will tabulate the votes and act as independent inspectors of election.
How do I attend the meeting?
You are entitled to attend the annual meeting only if you were, or you hold a valid legal proxy naming you
to act for, one of our shareholders on the record date. Before we will admit you to the meeting, we must be able to
confirm:
-
▶
-
your identity by
reviewing a valid form of photo identification, such as a driver's license; and
-
▶
-
that you were, or
are validly acting for, a shareholder of record on the record date by:
-
-
verifying your name and
stock ownership against our list of registered shareholders, if you are the record holder of your shares;
-
-
reviewing other
evidence of your stock ownership, such as the notice of Internet availability that was mailed to you or your most recent brokerage or bank statement, if you hold your shares in street name;
or
-
-
reviewing a written
proxy that shows your name and is signed by the shareholder you are representing, in which case either the shareholder must be a registered shareholder of record or you must have a brokerage
or bank statement for that shareholder as described above.
Please let us know if you plan to attend the meeting by responding affirmatively when prompted during Internet or telephone voting or by marking the
attendance box on your proxy card.
At the entrance to the meeting, we will verify that your name appears in our stock records, or will inspect your brokerage or bank statement as your
proof of ownership or any written proxy you present as the representative of a shareholder. We will decide in our sole discretion whether the documentation you present for admission to the
meeting meets the requirements described above. The admission of persons who are guests of shareholders is subject to the discretion of management. Anyone needing special assistance should
call Investor Relations at 866.775.9668. Please allow ample time for the admission procedures described above.
If you are not able to attend the meeting, you will still be able to access an audio replay of the management presentation given at the meeting from
our website. You can find instructions on how to access the replay and the presentation materials on our website at www.usbank.com by clicking on "About U.S. Bank" and then "Webcasts &
Presentations."
Who pays for the cost of proxy preparation and solicitation?
We pay for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokerage firms, banks, trusts or other nominees
for forwarding proxy materials to street name holders. We have retained Alliance Advisors, LLC, to assist in the solicitation of proxies for the annual meeting for a fee of $15,000, plus
associated costs and expenses.
We
are soliciting proxies primarily by mail. In addition, our directors, officers and employees may solicit proxies by telephone, facsimile, e-mail or in person. They will not receive any additional
compensation for these activities.
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U.S.
Bancorp
2017
Proxy
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Table of Contents
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Questions and Answers About the Annual Meeting and Voting
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Does the company "household" annual meeting materials?
The SEC rules allow a single copy of the notice of Internet availability of proxy materials or proxy statement and annual report to be delivered to multiple
shareholders sharing the same address and last name, or who we reasonably believe are members of the same family, and who consent to receive a single copy of these materials in a manner provided by
these rules. This practice is referred to as "householding." Although we do not household for our registered shareholders, we understand that some brokers, banks, trusts and other nominees household
U.S. Bancorp notices of Internet availability of proxy materials or proxy statements and annual reports, delivering a single copy of each to multiple shareholders sharing an address unless contrary
instructions have been received from the affected shareholders. Once you have received notice from your broker, bank, trust or other nominee that they will be householding materials to your address,
householding will continue until you are notified otherwise or until you revoke your consent.
If,
at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of our notice of Internet availability of proxy materials or proxy statement or annual
report, or if you are receiving multiple copies of any of these documents and wish to receive only one, please notify your broker, bank, trust or other nominee. We will deliver promptly upon written
or oral request a separate copy of our notice of Internet availability of proxy materials, proxy statement and/or our annual report to a shareholder at a shared address to which a single copy was
delivered. For copies of any of these documents, shareholders should write to Investor Relations, U.S. Bancorp, BC-MN-H23K, 800 Nicollet Mall, Minneapolis, Minnesota 55402, or call 866.775.9668.
How can I receive my proxy materials by e-mail in the future?
Instead of receiving future paper copies of the notice of Internet availability of proxy materials or our proxy materials by mail, you can elect to receive an
e-mail with links to these documents, your control number and instructions for voting over the Internet. Opting to receive your proxy materials by e-mail will save the cost of producing and mailing
documents to you and will also help conserve environmental resources. Your e-mail address will be kept separate from any other company operations and will be used for no other purpose.
If
we mailed you a notice of Internet availability of proxy materials or a printed copy of our proxy statement and annual report and you would like to sign up to receive these materials by e-mail in
the future, you can choose this option by:
-
▶
-
following the instructions provided on your proxy card or voting instruction form if you received a paper copy of the
proxy materials;
-
▶
-
following the instructions provided when you vote over the Internet; or
-
▶
-
going to http://enroll.icsdelivery.com/usb and following the instructions provided.
You
may revoke this request at any time by following the instructions at http://enroll.icsdelivery.com/usb. Your election is permanent unless you revoke it later.
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U.S.
Bancorp
2017
Proxy
Statement
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76
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Table of Contents
Other Matters
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Other Matters
Annual Report to Shareholders and Form 10-K
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If
you received a paper copy of the proxy materials, our 2016 Annual Report to Shareholders, including financial statements for the year ended December 31, 2016, accompanies
this proxy statement. The 2016 Annual Report to Shareholders is also available on our website at www.usbank.com by clicking on "About U.S. Bank" and then "Annual Report." Copies of our 2016 Annual
Report on Form 10-K, which is on file with the SEC, are available to any shareholder who submits a request in writing to Investor Relations, U.S. Bancorp, BC-MN-H23K, 800 Nicollet Mall,
Minneapolis, Minnesota 55402. Copies of any exhibits to the Form 10-K are also available upon written request and payment of a fee covering our reasonable expenses in furnishing the exhibits.
Section 16(a) Beneficial Ownership Reporting Compliance
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Section 16(a)
of the Exchange Act requires our executive officers, controller and directors to file initial reports of ownership and reports of changes in ownership of our
securities with the SEC. Our executive officers, controller and directors are required to furnish us with copies of these reports. Based solely on a review of the Section 16(a) reports
furnished to us with respect to 2016 and written representations from our executive officers, controller and directors, we believe that all Section 16(a) filing requirements applicable to those
persons during 2016 were satisfied.
Contacting U.S. Bancorp's Board of Directors
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Shareholders
or any other interested party may communicate with our Board of Directors by sending a letter addressed to our Board of Directors, non-employee directors, Chairman, Lead
Director or specified individual directors to:
The
Office of the Corporate Secretary
U.S. Bancorp
BC-MN-H21O
800 Nicollet Mall
Minneapolis, MN 55402
Any
such letters will be delivered to the Lead Director, or to a specified director if so addressed. Letters relating to accounting matters will also be delivered to our chief risk officer for
handling in accordance with the Audit Committee's policy on investigation of complaints relating to accounting matters.
Deadlines for Submitting Proposals and Nominating Directors for the 2018 Annual Meeting
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Submitting a Shareholder Proposal for Inclusion in Our Proxy Statement
In order for a shareholder proposal to be considered for inclusion in our proxy statement for the 2018 annual meeting of shareholders, we must receive the
written proposal at our principal executive offices at U.S. Bancorp, BC-MN-H21O, 800 Nicollet Mall, Minneapolis, Minnesota 55402, Attention: Corporate Secretary, on or before November 7, 2017.
The proposal must comply with SEC regulations regarding the inclusion of shareholder proposals in company-sponsored proxy materials.
Nominating a Director for Inclusion in Our Proxy Statement (Proxy Access Nominees)
A shareholder or group of up to 20 shareholders that has held at least 3% of our company's stock for at least three years is able to nominate directors to
fill up to 20% of the Board seats (but at least two directors) for inclusion in our proxy statement if the shareholder(s) and nominee(s) satisfy the requirements specified in our bylaws and notice is
received between 150 and 120 days before the anniversary of the date the proxy statement for the prior year's annual meeting was released to shareholders.
In
order for a nominee to be considered for inclusion in our proxy statement for the 2018 annual meeting of shareholders, we must receive written notice of the nomination at our principal executive
offices at U.S. Bancorp, BC-MN-H21O, 800 Nicollet Mall, Minneapolis, Minnesota, Attention: Corporate Secretary, no earlier than October 8,
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77
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U.S.
Bancorp
2017
Proxy
Statement
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Table of Contents
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Other Matters
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2017,
and no later than November 7, 2017. The notice must contain the specific information required by our bylaws. You can find a copy of our bylaws on our website at www.usbank.com by clicking
on "About U.S. Bank" and then "Corporate Governance" and then "Restated Bylaws."
Other Shareholder Proposals and Director Nominations (Advance Notice Provisions)
Our bylaws provide that a shareholder may nominate from the floor a director for election at the annual meeting if proper written notice is received by the
Corporate Secretary of U.S. Bancorp at our principal executive offices in Minneapolis, Minnesota, at least 120 days in advance of the anniversary of the prior year's annual meeting. A
shareholder may present from the floor a proposal other than a director nomination if proper written notice is received by the Corporate Secretary at least 120 days in advance of the
anniversary of the date the proxy statement for the prior year's annual meeting was released to shareholders.
For
the 2018 annual meeting of shareholders, notices of director nominations and shareholder proposals to be made from the floor must be received on or before December 19, 2017, and
November 7, 2017, respectively. The notice must contain the specific information required by our bylaws. You can find a copy of our bylaws on our website at www.usbank.com by clicking on "About
U.S. Bank" and then "Corporate Governance" and then "Restated Bylaws."
Shareholder
proposals and director nominations for which notice is received by us after November 7, 2017, and December 19, 2017, respectively, may not be presented in any manner at the
2018 annual meeting.
Other Matters for Consideration
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We
do not know of any other matters that may be presented for consideration at the annual meeting. If any other business does properly come before the annual meeting, the persons
named as proxies above under the heading "Questions and Answers About the Annual Meeting and Voting What is a proxy?" will vote as they deem in the best interests of U.S. Bancorp.
Laura
F. Bednarski
Corporate Secretary
Dated:
March 7, 2017
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U.S.
Bancorp
2017
Proxy
Statement
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78
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Table of Contents
Non-GAAP Financial Measures
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Non-GAAP Financial Measures
Return on Tangible Common Equity
Return on tangible common equity (ROTCE) is calculated by dividing net earnings applicable to common shareholders by tangible common shareholders' equity. We
believe that ROTCE is a meaningful way for holders of U.S. Bancorp common stock to assess the company's use of equity.
The
calculation of U.S. Bancorp's ROTCE for 2007 through 2016 follows:
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Years ended December 31 (Dollars in Millions)
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2016
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2015
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2014
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2013
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2012
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2011
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2010
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2009
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2008
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2007
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Net income applicable to U.S. Bancorp common shareholders
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$
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5,589
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$
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5,608
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$
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5,583
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$
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5,552
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$
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5,383
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$
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4,721
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$
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3,332
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$
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1,803
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$
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2,819
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$
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4,258
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Intangibles amortization (net-of-tax)
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116
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113
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129
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145
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178
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194
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239
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252
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231
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244
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Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization (a)
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5,705
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5,721
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5,712
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5,697
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5,561
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4,915
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3,571
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2,055
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3,050
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4,502
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Average total equity
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47,988
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45,502
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43,524
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41,287
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38,736
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33,116
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28,799
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27,021
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23,324
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21,709
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Less: Average preferred stock
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5,501
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4,836
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4,756
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4,804
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4,381
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2,414
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1,742
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4,445
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2,246
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1,000
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Less: Average noncontrolling interests
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649
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689
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687
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1,370
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1,125
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916
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750
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714
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754
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712
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Less: Average intangible assets, other than mortgage servicing rights
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10,142
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10,134
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10,160
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10,084
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10,046
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10,227
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10,530
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10,169
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9,381
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9,302
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Average U.S. Bancorp common shareholders' equity, excluding intangible assets (b)
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31,696
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29,843
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27,921
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25,029
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23,184
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19,559
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15,777
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11,693
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10,943
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10,695
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Return on tangible common equity (a)/(b)
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18.0
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%
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19.2
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%
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20.5
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%
|
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22.8
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%
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24.0
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%
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25.1
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%
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22.6
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%
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17.6
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%
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27.9
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%
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42.1
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%
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