DEF 14A

DEF 14A 1 d58902ddef14a.htm DEF 14A DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐

Check the appropriate box:


☐		Preliminary Proxy Statement
☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material under §240.14a-12

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(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):


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	(4)	Date Filed:

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NOTICE OF 2021

ANNUAL MEETING

OF STOCKHOLDERS

Dear Stockholders:

You are invited to attend Synchrony Financial’s 2021 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 20, 2021 at 11:00 a.m., Eastern Time, for the following purposes:

• To elect the 12 directors named in the proxy statement for the coming year;

• To approve our named executive officers’ compensation in an advisory vote;

• To select the frequency of the vote to approve our named executive officers’ compensation in an advisory vote;

• To ratify the selection of KPMG LLP as our independent registered public accounting firm for 2021; and

• To consider any other matters that may properly come before the meeting or any adjournments or postponements of the meeting.

The meeting will be held virtually to provide expanded access, improved communication and cost savings for our stockholders and Synchrony Financial. Hosting a virtual meeting enables increased stockholder attendance and participation because stockholders can participate from any location. We ensure that at our virtual meeting, all attendees are afforded the same rights and opportunities to participate as they would at an in-person meeting. During the live Q&A session of the meeting, we answer questions as they come in, and we commit to publishing each question received following the meeting. The live webcast is available to stockholders and the general public at the time of the meeting, and a replay of the meeting is made publicly available on the company’s website. The website address for the virtual meeting is: www.virtualshareholdermeeting.com/SYF2021.

To participate in the meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or in the instructions that accompanied your proxy materials. The meeting will begin promptly at 11:00 a.m., Eastern Time. Online check-in will begin at 10:45 a.m., Eastern Time, and you should allow for time to complete the online check-in procedure. You are eligible to vote if you were a stockholder of record at the close of business on March 25, 2021. Proxy materials are being mailed or made available to stockholders on or about April 6, 2021. Whether or not you plan to attend the meeting, please submit your proxy by mail, internet or telephone to ensure that your shares are represented at the meeting.

Sincerely,

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Jonathan S. Mothner

Executive Vice President,

General Counsel and Secretary

April 6, 2021

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PROXY

LOGISTICS

AT A GLANCE

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DATE

May 20, 2021

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TIME

11:00 a.m. Eastern Time

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VIRTUAL MEETING

WEBSITE ADDRESS

www.virtualshareholder-meeting.com/SYF2021

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RECORD DATE

March 25, 2021

IMPORTANT NOTICE

REGARDING INTERNET

AVAILABILITY OF PROXY

MATERIALS FOR THE 2021

ANNUAL MEETING TO BE

HELD ON MAY 20, 2021

Our proxy materials relating to our Annual Meeting (notice, proxy statement and annual report) are available at www.proxyvote.com.

2021 ANNUAL MEETING AND PROXY STATEMENT / 1

TABLE OF

CONTENTS


PROXY SUMMARY		4

CORPORATE GOVERNANCE		10

Item 1–Election of Directors		16

Committees of the Board of Directors		25

Board of Directors’ Leadership Structure and Role in Risk Oversight		28

Attendance at Meetings		30

Meetings of Non-Management and Independent Directors		30

Communications With the Board of Directors		30

Code of Conduct		31

Governance Principles		31

Management Development and Compensation Committee Interlocks and Insider Participation		31

COMPENSATION MATTERS		32

Item 2–Advisory Vote to Approve Named Executive Officer Compensation		32

Management		32

Compensation Discussion and Analysis		34

Compensation Philosophy		39

2020 Executive Compensation		50

Independent Directors’ Compensation		59

Item 3–Advisory Vote on Frequency of Say-on-Pay Vote		62

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AUDIT MATTERS		63

Independent Auditor		63

Item 4–Ratification of Selection of KPMG LLP as Independent Registered Public Accounting Firm of the Company for 2021		64

Audit Committee Report		64

BENEFICIAL OWNERSHIP		65

Related Person Transactions		67

FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING		68

Voting Information		68

Proxy Solicitation and Document Request Information		70

Information About Attending the 2021 Annual Meeting		70

ADDITIONAL INFORMATION		71

Other Business		71

Annual Report and Company Information		71

Stockholder Proposals for the 2022 Annual Meeting		71

Important Notice Regarding Internet Availability of Proxy Materials for the 2021 Annual Meeting to be held on May 20, 2021		71

2021 ANNUAL MEETING AND PROXY STATEMENT / 3


PROXY SUMMARY

This summary highlights certain information in this proxy statement in connection with our 2021 Annual Meeting of Stockholders (the “Annual Meeting”). As it is only a summary and does not contain all of the information you should consider, please review the complete proxy statement before you vote. In this proxy statement, references to the “Company” and to “Synchrony” are to Synchrony Financial. For answers to frequently asked questions regarding the Annual Meeting, please refer to pages 68-70 of this proxy statement. Proxy materials are being mailed or made available to stockholders on or about April 6, 2021.
LOGISTICS		VOTING
	DATE May 20, 2021		BY MAIL You may date, sign and promptly return your proxy card by mail in a postage prepaid envelope (such proxy card must be received by May 19, 2021).
	TIME 11:00 a.m. Eastern Time		BY TELEPHONE

	VIRTUAL MEETING WEBSITE ADDRESS www.virtualshareholdermeeting.com/SYF2021		You may use the toll-free telephone number shown on your Notice of Internet Availability of Proxy Materials (the “Notice”) or proxy card up until 11:59 p.m., Eastern Time, on May 19, 2021.
	RECORD DATE March 25, 2021		BY THE INTERNET In Advance
			You may vote online by visiting the internet website address indicated on your Notice or proxy card or scan the QR code indicated on your Notice or proxy card with your mobile device, and follow the on-screen instructions until 11:59 p.m., Eastern Time, on May 19, 2021.
ELIGIBILITY TO VOTE
You are eligible to vote if you were a stockholder of record at the close of business on March 25, 2021.

			At the Annual Meeting
			You may attend the virtual Annual Meeting by visiting this internet website address: www. virtualshareholdermeeting.com/SYF2021.

AGENDA

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Election of 12 directors

named in this proxy

statement

Majority of votes cast

Page Reference — 16

BOARD

RECOMMENDATION

FOR

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Advisory approval

of our named executive

officers’ compensation

Majority of votes cast

Page Reference —32

BOARD

RECOMMENDATION

FOR

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Advisory vote

on frequency

of say-on-pay vote

Majority of votes cast

Page Reference — 62

BOARD

RECOMMENDATION

EVERY YEAR

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Ratify the selection of

KPMG LLP as our independent

registered public accounting

firm for 2021

Majority of votes cast

Page Reference — 64

BOARD

RECOMMENDATION

FOR

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2020 PERFORMANCE 2020 marked a year of unprecedented challenges. The COVID-19 pandemic impacted the economy, Synchrony’s business, as well as our partners, customers and employees. Despite the challenges, Synchrony took quick and decisive action and delivered strong results. We moved to keep our employees safe through work from home arrangements and enhanced our employee benefits and wellness programs, provided relief for our customers and reprioritized resources and work streams. We also took actions to manage our costs and re-direct the business to the new realities. We transformed how we work and reduced our physical site footprint, implemented a temporary freeze on hiring and promotions as well as travel and expense restrictions, insourced certain work at a lower cost, and reduced or eliminated other work. Our goal was to successfully manage through the short-term environment, while preparing the Company for a post-pandemic return to strong growth and long-term value creation. We kept focused on our commitment to executing our commercial strategies which resulted in several key successes: • Renewed 41 key relationships • Signed 25 new partnerships • Launched promising new programs with Verizon and Venmo, as well as within our Payment Solutions and CareCredit businesses. • Significantly enhanced our digital initiatives and shifted resources to focus on transforming digital capabilities in response to the pandemic, such as digital collections and our efforts to enable consumers to apply for credit in store or pay merchants contactless. • Expanded human capital initiatives at all levels including care for employees in response to the pandemic and executing on our diversity and inclusion (D&I) initiatives. We accomplished all these commercial strategy successes while maintaining strong relative performance against our direct peers, ranking first in 2020 efficiency ratio, second in 2020 return on equity and second in 5-year loan receivables growth. Our Total Shareholder Return (TSR) ranked second among direct peers as we maintained profitability in all four quarters over the past year. During 2020, the Company also operated with a strong balance sheet including liquid assets as a percentage of total assets were 19.1%, CET 1 Capital Ratio was 15.9%, and our allowance coverage ratio rose to 12.5%. All of the above accomplishments are signs of a healthy business that we believe is poised to grow in a post-pandemic rebound. FISCAL YEAR 2020 FINANCIAL PERFORMANCE HIGHLIGHTS* • $1.4 billion Net Earnings • $2.27 Diluted Earnings Per Share • Returned $1.5 billion in capital to common stockholders in the form of share repurchases and dividends • Industry leading Efficiency Ratio of 36.3% * Direct peers include American Express Company, Capital One Financial Corporation and Discover Financial Services. ** For Synchrony, Efficiency Ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income.						STRONG NET EARNINGS $1.4B $2.27 DILUTED EARNINGS PER SHARE RETURNED CAPITAL TO STOCKHOLDERS $1.5B

2021 ANNUAL MEETING AND PROXY STATEMENT / 5

PROXY SUMMARY

The charts below highlight our 5-year receivables growth, 2020 return on equity and 2020 efficiency ratio performance against our direct peers during the 5-year or one-year period ending December 31, 2020. These are key metrics we believe reflect our overall performance and fundamental strengths.

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The chart below shows our one-year total stockholder return (TSR), which ranks second against our direct peers.

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PROXY SUMMARY

BUSINESS AND STRATEGIC UPDATES

We believe the relative performance results shown above are a result of the decisive re-prioritizing of strategic actions we took when the pandemic hit in March 2020. Management acted quickly to change how we operate the business and where we allocate capital and resources. After reviewing strategic and other challenges presented by the COVID-19 pandemic, including the impact to our employees and the economy, we evaluated ways to respond to the pandemic’s impact on the Company’s financial performance and to set the foundation for stronger growth post-pandemic. As a result, management, with the input of the Management Development and Compensation Committee (“MDCC” or “Committee”) and the Board of Directors (the “Board”), refocused the organization on three key areas: our COVID-19 response; our updated strategic priorities; and cost management. Significant accomplishments in 2020 under each area are listed in the chart below and details of our refocused objectives and associated accomplishments are provided later in the Compensation Discussion and Analysis (“CD&A”):





COVID-19 RESPONSE	STRATEGIC BUSINESS PRIORITIES	COST MANAGEMENT

• Moved Employees to Work from Home • Enhanced Employee Benefits and Created New Wellness Programs • Implemented Pandemic Safety Protocols • Maintained Customer Service Levels • Maintained Rigor in Risk & Compliance Requirements • Provided Partner Support and Customer Relief	• Launched Venmo & Verizon Programs • Maintained Strong Balance Sheet through Capital and Liquidity Efficiency • Expanded Hospital Network • Added Point-of-Sale Capabilities • Added New Programs including Walgreens • Renewed Current Programs including Sam’s Club and Mattress Firm • Added Digital Collections Capabilities • Supported Growth with Credit Transformation • Drove D&I Progress	• Actions taken to realize future overall cost reductions of $210 million+ in 2021 • Implemented Hiring Freeze • Updated Site/Real Estate Strategy • Leveraged IT Efficiencies • Restructured Functional and Operational Departments • Maintained Profitability in all 4 Quarters of 2020

Management took these actions to ensure the continued engagement and motivation of the key talent needed to execute our long-term strategy and make us stronger and more competitive after the pandemic.

While we refocused the organization on these new objectives in response to COVID-19, we continued to execute key components of our commercial strategy in 2020:

•

Remained focused on investing in our digital and mobile capabilities, bringing to market new features, channels and experiences for our customers and enhancing our existing digital design and user experience including purchase and servicing accounts. These investments drove growth in our existing programs, including by supporting our partners as they adapt to the rapidly evolving environment resulting from the COVID-19 pandemic, and were critical to securing renewals and winning new programs such as Venmo and Verizon.

•

In Retail Card, continued to diversify our portfolio by adding promising new partners, including Verizon, and launching the first-ever Venmo Credit Card.

•

In Payment Solutions, continued to enhance our Synchrony-branded networks. The Synchrony HOME credit card is accepted at hundreds of thousands of home-related retail locations nationwide, including both partner locations and retailers outside of our program network. The Synchrony Car Care network, which comprises merchants selling automotive parts, repair services and tires, covers more than 1,000,000 locations across the United States. We also renewed our strategic partnership with Mattress Firm.

•

In CareCredit, continued to work on broader acceptance and further expansion of the network, launching partnerships with three new health systems; acquiring Allegro Credit, a leading provider of point-of-sale consumer financing for audiology products and dental services; extending Pets Best’s relationship with Progressive; and, in January 2021, announcing a new program agreement with Walgreens to become the issuer of the first co-branded credit card program for a national health retailer in the United States.

2021 ANNUAL MEETING AND PROXY STATEMENT / 7

PROXY SUMMARY

OUR NAMED EXECUTIVE OFFICERS

The executive officers whose compensation we discuss in this CD&A and whom we refer to as our named executive officers (“NEOs”) for 2020 are Margaret M. Keane, Executive Chair (and former CEO); Brian D. Doubles, President and CEO (and former President); Brian J. Wenzel, Sr., Executive Vice President, CFO; Neeraj Mehta, former Executive Vice President, CEO—Payment Solutions and Chief Commercial Officer; and Thomas M. Quindlen, Executive Vice President and CEO—Retail Card.

On January 11, 2021, as part of a planned succession process, the Board approved the following events, each effective April 1, 2021:

•

Margaret Keane, 61, transitioned roles from CEO to Executive Chair of the Board.

•

Brian Doubles, 45, succeeded Ms. Keane to become President and CEO, and joined the Board as a director.

Ms. Keane was appointed Synchrony’s President and CEO in 2014 and has served as a director since 2013. Ms. Keane previously served as President and CEO of the North American retail finance business of GE from 2011 to 2014. Mr. Doubles was Synchrony’s President from May 2019 until April 2021. He previously served as Synchrony’s Executive Vice President and CFO from 2014 to 2019 and as CFO of GE’s North American retail finance business from 2009 to 2014.

MIX OF PAY

A majority of our NEOs’ compensation is performance-based and therefore at risk. The only fixed compensation paid is base salary, which represents approximately 9% of the CEO’s total direct compensation and no more than 22% of the other NEOs’ total direct compensation as shown below in the 2020 mix of direct pay charts for our CEO and CFO:

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Below we illustrate the pay trend of our CEO pay from 2017 through 2020 which reflects our consideration of both market pay levels and performance.

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PROXY SUMMARY

2020 SAY-ON-PAY ADVISORY VOTE AND STAKEHOLDER ENGAGEMENT ON EXECUTIVE COMPENSATION

At our 2020 annual meeting of stockholders, our investors supported the compensation for our named executive officers with more than 91% of the votes approving the advisory say-on-pay item. Our MDCC considers the results of our say-on-pay advisory vote as part of its review of our overall compensation programs and policies. In 2020, we continued our regular engagement with stakeholders regarding our compensation program. In some cases, Richard Hartnack, former Chair of the Board and Chair of the MDCC, participated in the meetings with stockholders, and feedback received was regularly shared and discussed with our full Board and the MDCC. We also engaged with proxy advisory firms and sought regulatory perspectives.

BEST PRACTICE COMPENSATION PROGRAMS AND POLICIES

The MDCC has implemented the following measures as part of our executive compensation programs:


WHAT WE DO		WHAT WE DON’T DO

	Substantial portion of executive pay based on performance against goals set by the MDCC		No hedging or pledging of Company stock

	Risk governance framework underlies compensation decisions		No employment agreements for executive officers

	Stock ownership requirements for executive officers		No tax gross-ups for executive officers

	Minimum vesting of 12 months for any options or stock appreciation rights		No discretion to accelerate the vesting of awards

	Minimum vesting of 12 months for any restricted stock units (“RSUs”)		No cash buyouts of stock options or stock appreciation rights with exercise prices that are not in-the-money

	Compensation subject to claw-back in the event of misconduct and expanded to “no fault” in the case of financial restatements for all NEOs		No payout of dividends on unvested equity prior to the vesting date

	Limited perquisites		No backdating or repricing of stock option awards

	Use of peer company benchmarking, targeting median among peers with additional consideration based on the size, scope and impact of role, market data, leadership skills, length of service and both company and individual performance and contributions

	Double-trigger vesting of equity and long-term incentive plan awards upon change in control

	One-year “Say-on-Pay” frequency

	Independent compensation consultant advises the MDCC

	Include relative performance metric by applying a Total Shareholder Return modifier to our long-term performance awards that will be linked to stockholder returns relative to peers

2021 ANNUAL MEETING AND PROXY STATEMENT / 9

CORPORATE GOVERNANCE

We believe that strong corporate governance is integral to building long-term value for our stockholders and enabling effective Board oversight. We are committed to governance policies and practices that serve the interests of the Company and its stockholders. The Board monitors emerging issues in the governance community and regularly reviews our governance practices to incorporate evolving best practices and stockholder feedback.

A FEW OF OUR CORPORATE GOVERNANCE

BEST PRACTICES INCLUDE:

BOARD OVERSIGHT OF COVID-19

Since March 2020, the Board and its committees have engaged with management on the Company’s response to the COVID-19 pandemic. The Board kept informed through regular updates on the impact of the pandemic, including matters relating to employees, operations, financial performance, partners, and related legal and regulatory matters. The Board reviewed a detailed and comprehensive risk management dashboard with weekly updates on topics including employees, credit metrics, operational metrics, information systems, and financial performance. The Board added special virtual Board and Board committee meetings where, for example, the Risk Committee oversaw and monitored cyber risks of work from home; the MDCC actively engaged its independent consultant on the impact of the pandemic on compensation programs; and the Technology Committee engaged with management on the tools required to continue innovating in a work from home setting.

BOARD’S ROLE IN STRATEGY

As part of the Company’s regular, annual strategic planning process, the Board and management developed a strategic plan focusing on growing the core and diversifying the business. Once the pandemic hit at the end of first quarter 2020, the Board took action immediately, scheduling special Board meetings, as well as special committee meetings, and engaging with management to assess strategic risks and opportunities to position Synchrony for success in the post-COVID-19 world. Through a series of meetings, the Board oversaw and supported management’s adoption of new strategic business priorities, as discussed above.

Looking ahead, the Company remains focused on improving all aspects of the customer experience, starting with a quick, seamless account opening

process all the way through account self-servicing features. We plan to continue to invest heavily in digital innovations to develop new products and services that drive deeper customer relationships.

BOARD REFRESHMENT

The Nominating and Corporate Governance Committee routinely assesses the composition of our Board to ensure that we have the right mix of skills and experience to maximize our Board’s potential and align our Board’s strengths with our strategic direction. To this end, the Board appointed Bill Parker as a new independent director in July 2020. Mr. Parker has significant executive experience in the financial services industry, specifically as the former chief risk officer of U.S. Bancorp, and has significant executive experience and expertise spanning leadership, risk management, and credit. During his tenure with U.S. Bancorp, Mr. Parker helped lead the bank through the 2008 financial crisis as chief credit officer with a focus on credit policy and navigated the bank through the subsequent regulatory reforms as chief risk officer.

BOARD COMMITMENT TO DIVERSITY AND ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS

Since our IPO, the Board has consistently believed that sustainable, long-term stockholder value creation requires caring for our business, our customers, our partners, our employees, our communities, and the environment. The pandemic underscores the importance of Board engagement on all environmental, social and governance matters (ESG), including D&I. We believe diversity makes our business stronger, more innovative and more successful. We have strong hiring practices for women, minorities, veterans, the LGBTQ community and people with disabilities. We promote this inclusive culture by sponsoring eight

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different employee D&I Networks. We also have one of the most diverse board of directors of any financial services company or commercial bank in the Fortune 200 based on 2020 proxy statement disclosures. Our Board includes seven directors (out of 12) who are women and/or minorities, as well as cognitive diversity with expertise in consumer banking, credit cards, retail, technology, cyber security, risk management, marketing, government affairs, healthcare and accounting.

The Board also supported in elevating attention to social injustice and racial equity. For example:

•

Mr. Aguirre led an all-employee event on the role diversity plays in business and the steps Synchrony is taking to ensure diverse talent is represented at all levels of the organization.

•

Synchrony held an all-employee town hall with Mr. Alves and Ms. Richie where employees had the opportunity to engage directly on D&I in the workplace.

•

Directors participated in our annual two-day Diversity Experience, attended by 2,500 employees virtually.

•

Mr. Aguirre and Ms. Keane discussed board diversity at the Women Corporate Directors 2020 Americas Institute conference.

•

Mr. Alves and Ms. Keane co-authored an op-ed in Fortune about the need for companies to lead on D&I matters during this time.

Corporate and social responsibility demonstrates the kind of company we are and reflects how we build and maintain trust and credibility with our stakeholders, including our customers, partners, employees and stockholders. You can read more about our ESG efforts in our ESG report at www.synchrony.com.

BOARD OVERSIGHT OF CYBER SECURITY AND TECHNOLOGY

The protection and security of financial and personal information of our consumers is one of the Company’s highest priorities. To that end, we have an extensive cyber security governance framework in place. The Board and its Risk Committee receive regular reports on cyber security and oversee a comprehensive information security program that includes administrative, technical and physical safeguards and provides an appropriate level of protection to maintain the confidentiality, integrity, and availability of our Company’s and our

customers’ information. This includes protecting against any known or evolving threats to the security or integrity of customer records and information, and against unauthorized access to or use of customer records or information. Our information security program is continuously adapting to an evolving landscape of emerging threats and available technology, and we have developed a security strategy and implemented multiple layers of controls embedded throughout our technology environment that establish multiple control points between threats and our assets. We evaluate the effectiveness of the key security controls through ongoing assessment and measurement. When the Company’s employees shifted to working remotely due to the pandemic, this cyber security governance framework set the foundation for the Risk Committee to engage seamlessly with management and actively oversee and monitor the cyber risks of work from home.

A key part of our strategic focus is the continued development of innovative, efficient, and flexible technology to deliver products and services that meet the needs of our partners and enables us to operate our business efficiently. The integration of our technology with our partners is at the core of our value proposition, enabling us to help our partners anticipate and deliver the experiences and tools consumers want, while reducing fraud and enhancing customer service. Recognizing the importance of technology and innovation to our future success, the Company’s Technology Committee provides regular updates to the full Board on industry developments and best practices. The Chair of the Technology Committee is Art Coviello, a leader in the technology industry and former Executive Vice President of EMC Corporation and Executive Chairman of RSA Security, Inc.

STOCKHOLDER ENGAGEMENT

We continue to value our stockholders’ perspectives on our strategy and governance practices. We believe that maintaining a dialogue with our stockholders allows us to better understand and respond to their perspectives on matters of importance to them. In 2020, we engaged with representatives of a majority of our outstanding shares on a variety of topics, including our growth plans, business strategy, board composition, compensation practices and ESG issues.

2021 ANNUAL MEETING AND PROXY STATEMENT / 11

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE PRACTICES

OUR GOVERNANCE HIGHLIGHTS INCLUDE:

10 out of 12 directors are independent

Experienced Board members with a diversity of skills and experiences

7 out of 12 directors are women and/or minorities

Two out of four Board committee chairs are women and/or minorities

Each of the Audit Committee, MDCC, Nominating and Corporate Governance Committee and Risk Committee is comprised exclusively of independent directors

Lead Independent Director of the Board

Regular meetings of independent directors in executive session without management

Annual election of all directors

Majority voting standard for directors in uncontested elections

Stockholder special meetings may be called upon the request of a majority of stockholders

Single-class voting structure (one share, one vote)

No stockholder rights plan

Stock ownership requirements for our executive officers and directors

Stockholder proxy access

Nominating and Corporate Governance Committee regularly reviews overall corporate governance framework and oversees the Company’s ESG efforts

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CORPORATE GOVERNANCE

BOARD LEADERSHIP STRUCTURE

Since our IPO, we have chosen to elect a Chair of the Board separate from our CEO. The separation of roles has allowed our Chair to focus on the organization and effectiveness of the Board. At the same time, it has allowed our CEO to focus on executing our strategy and managing our operations, performance and risks.

As previously announced, on April 1, 2021 as part of a planned succession process, the following events occurred:

•

Richard Hartnack retired as non-Executive Chair;

•

Margaret Keane transitioned roles from CEO to Executive Chair;

•

Brian Doubles succeeded Ms. Keane as CEO and, was appointed to the Board; and

•

Jeffrey Naylor was appointed Lead Independent Director of the Board.

The Board thoroughly evaluated its leadership structure in the period leading up to the Company’s CEO transition. The Board believes that Ms. Keane, as the former CEO and a long-time executive in the business, is best situated to serve as Chair at this time because her deep understanding of our operations, our people and our strategic plan, along with her strong leadership skills, make her uniquely qualified to provide the continuity needed to ensure a smooth transition of the CEO role, especially in the volatile and uncertain environment created by the COVID-19 pandemic.

The roles of Chair and CEO continue to be separate at the Company. The Board believes that the separation is in the best interests of the Company’s stockholders because it allows the Chair to focus on the organization and effectiveness of the Board and allows the CEO to focus on executing the Company’s strategy and managing its operations, performance and risk.

The Board believes that the Lead Independent Director brings to the Board experience, oversight, and expertise from outside the Company that will allow him to provide strong independent oversight of management. The responsibilities and authority of the Lead Independent Director include:

• presiding at all Board meetings at which the Chair is not present, including executive sessions of the independent directors;

• authorization to call meetings of the independent directors;

• serving as a liaison between the Chair and the independent directors;

• setting the agendas for and leading executive sessions for the independent directors;

• facilitating discussion among the independent directors on key issues and concerns outside of Board meetings;

• briefing the CEO on matters arising in executive sessions and serving as a conduit to the CEO of views, concerns, and issues of the independent directors;

• approving information sent to the Board, including the quality, quantity, appropriateness and timeliness of such information;

• along with the Board, monitoring and providing input on the CEO’s performance;

• approving meeting agendas for the Board;

• approving meeting schedules to assure there is sufficient time for discussion of all agenda items;

• authorization to retain outside advisors and consultants who report directly to the Board on Board-wide issues; and

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