mtb-def14a_20180417.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.   )

 

Filed by the Registrant

Filed by a Party other than the Registrant

 

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

 

M&T BANK CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1)

Title of each class of securities to which transaction applies:

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

(4)

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(5)

Total fee paid:

 

 

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

 

(2)

Form, Schedule or Registration Statement No.:

 

 

(3)

Filing Party:

 

 

(4)

Date Filed:

 

 

 

 

 


 


One M&T Plaza

Buffalo, New York 14203

March 7, 2018

Dear Shareholder,

You are cordially invited to attend the 2018 Annual Meeting of Shareholders of M&T Bank Corporation.  The Annual Meeting will be held on the 10th Floor of One M&T Plaza in Buffalo, New York, on Tuesday, April 17, 2018, at 11:00 a.m.

Shareholders will be asked to vote on the following matters:

 

1.

election of 17 directors for one-year terms and until their successors have been elected and qualified;

 

2.

advisory approval of the 2017 compensation of M&T Bank Corporation’s Named Executive Officers;

 

3.

ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of M&T Bank Corporation for the year ending December 31, 2018; and

 

4.

transaction of such other business as may properly come before the meeting and any adjournments thereof.

Information about these matters can be found in the proxy statement.

Your vote is important.  Whether or not you plan to attend the Annual Meeting, please indicate your vote by promptly executing and returning the enclosed proxy card, or by voting by telephone or over the Internet.  Shareholders of record as of the close of business on February 28, 2018, the record date, are entitled to receive notice of and to vote at the Annual Meeting.

We urge you to vote for the election of the 17 nominees, to approve the 2017 compensation of M&T Bank Corporation’s Named Executive Officers, and to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of M&T Bank Corporation for the year ending December 31, 2018.

Sincerely,

RENÉ F. JONES

Chairman of the Board and

Chief Executive Officer

 


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 17, 2018

The Proxy Statement and 2017 Annual Report of M&T Bank Corporation (“M&T”) are available at http://ir.mandtbank.com/proxy.cfm.

YOUR VOTE IS IMPORTANT

It is important that your shares be represented and voted at the 2018 Annual Meeting of Shareholders.  If your M&T shares of common stock are registered in your name with M&T’s transfer agent, Computershare, you are considered to be a “shareholder of record” and your proxy materials were mailed directly to you.  You may vote in person at the meeting.  You may also vote your shares by telephone, over the Internet or by mailing your signed proxy card in the postage-paid envelope you were provided.  If your M&T shares of common stock are held by a broker, trustee, bank or other nominee, then that nominee is considered the shareholder of record and the shares are considered held in “street name” and you are the beneficial owner of the shares.  M&T provided its proxy materials to that nominee for distribution to you along with its voting instruction card.  As the beneficial owner of the shares, you have the right to direct your broker, trustee, bank or other nominee on how to vote and you are also invited to attend the meeting.  However, if you are a beneficial owner, you are not the shareholder of record and you may not vote your street name shares in person at the meeting unless you follow the instructions from your nominee, which includes obtaining a legal proxy from the nominee that holds your shares.  Please refer to the information your broker, trustee, bank or other nominee provided to you to determine what voting options are available to you.  New York Stock Exchange rules do not permit brokers to vote street name shares on “non-routine” matters such as the election of directors, executive compensation and other “significant matters” unless they have received voting instructions from the beneficial owner.  M&T therefore encourages shareholders whose shares are held in street name to promptly direct their vote for all of the agenda items using the proxy instruction card sent by the broker, trustee, bank or other nominee.

DISCONTINUE MULTIPLE MAILINGS

If you are a shareholder of record and have more than one account in your name or at the same address as other shareholders of record, you may authorize M&T to discontinue mailings of multiple annual reports and proxy statements.  To discontinue multiple mailings, or to reinstate multiple mailings, please either mail your request to M&T Bank Corporation, Attention:  Shareholder Relations, One M&T Plaza, Buffalo, New York 14203, or send your request to Shareholder Relations via electronic mail at ir@mtb.com.


 


One M&T Plaza

Buffalo, New York 14203

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

 

 

 

 

 

March 7, 2018

MARIE KING

Corporate Secretary

 

 


TABLE OF CONTENTS

 

 

 

PAGE

GENERAL INFORMATION – QUESTIONS AND ANSWERS

 

1

 

 

 

PROPOSAL 1

 

4

ELECTION OF DIRECTORS

 

4

NOMINEES FOR DIRECTOR

 

5

DIRECTOR COMPENSATION

 

14

Elements of 2017 Directors’ Fees

 

14

2017 Director Compensation Table

 

14

M&T Bank Corporation 2008 Directors’ Stock Plan

 

15

M&T Bank Directors’ Fees

 

15

CORPORATE GOVERNANCE OF M&T BANK CORPORATION

 

16

Corporate Governance Standards

 

16

Availability of Corporate Governance Standards

 

16

Codes of Ethics

 

16

Board Diversity

 

17

Board Independence

 

17

Board Leadership Structure

 

19

Board’s Role in Risk Oversight

 

19

Board Attendance

 

19

Communications with the Board of Directors

 

19

Board Committees and Member Composition During 2017

 

20

Audit Committee

 

20

Executive Committee

 

21

Nomination, Compensation and Governance Committee

 

21

Risk Committee

 

22

NOMINATION, COMPENSATION AND GOVERNANCE COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

 

23

STOCK OWNERSHIP INFORMATION

 

24

Directors and Named Executive Officers Stock Ownership Table

 

24

M&T Bank Corporation Insider Trading Policy

 

25

Beneficial Owners Holding More Than 5% of M&T Bank Corporation’s Common Stock Table

 

25

Section 16(a) Beneficial Ownership Reporting Compliance

 

26

TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS

 

27

PROPOSAL 2

 

28

ADVISORY, NON-BINDING PROPOSAL TO APPROVE THE 2017 COMPENSATION OF M&T BANK CORPORATION’S NAMED EXECUTIVE OFFICERS

 

28

COMPENSATION DISCUSSION AND ANALYSIS

 

29

Named Executive Officers

 

29

Executive Summary

 

30

Overview of M&T Bank Corporation

 

30

2017 Performance Results and Executive Compensation Highlights

 

30

Compensation Philosophy and Objectives

 

31

Components of Executive Compensation

 

31

Roles and Responsibilities

 

32

Peer Group

 

34

Benchmarking

 

34

Consideration of Shareholder Advisory Vote on Executive Compensation

 

35

2017 Compensation Determinations

 

35

Summary of 2018 Executive Compensation Determinations

 

40

Sound Compensation and Governance Practices

 

41

Stock Ownership Guidelines

 

41

Forfeiture Policy

 

41

Discretionary Incentive Award Guidelines

 

42

Incentive Compensation Governance

 

42

Enhanced Ability to Adjust Compensation in the Event of an Adverse Risk Outcome

 

42

Tax Matters

 

42

NOMINATION, COMPENSATION AND GOVERNANCE COMMITTEE REPORT

 

43

EXECUTIVE COMPENSATION

 

44

2017 Summary Compensation Table

 

44

CEO Pay Ratio

 

45

Grants of Plan-Based Awards

 

46

2017 Grants of Plan-Based Awards Table

 

46

Outstanding Equity Awards at Fiscal Year-End

 

47

Outstanding Equity Awards at 2017 Fiscal Year-End Table

 

47

Options Exercised and Stock Vested

 

49

2017 Options Exercised and Stock Vested Table

 

49

Pension Benefits

 

49

2017 Pension Benefits Table

 

49

Explanation of Pension Benefits Table

 

50

Qualified Pension Plan

 

50

Supplemental Pension Plan

 

51

Nonqualified Deferred Compensation

 

52

2017 Nonqualified Deferred Compensation Table

 

52

Overview of Nonqualified Deferred Compensation Plans

 

52

Potential Payments Upon Termination or Change-in-Control

 

55

2017 Post-Employment Benefits Table

 

55

Severance Pay Plan

 

55

Accelerated Vesting of Equity Awards

 

55

PROPOSAL 3

 

56

PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF M&T BANK CORPORATION FOR THE YEAR ENDING DECEMBER 31, 2018

 

56

INDEPENDENT PUBLIC ACCOUNTANTS

 

57

Fees to Independent Auditors Table

 

57

Audit Fees

 

57

Audit-Related Fees

 

57

Tax Fees

 

57

All Other Fees

 

57

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

 

58

Report of the Audit Committee

 

58

NOTICE PURSUANT TO SECTION 726(d) OF THE NEW YORK BUSINESS CORPORATION LAW

 

60

OTHER MATTERS

 

60

 

 

 

 

i

 

 


PROXY STATEMENT

GENERAL INFORMATION – QUESTIONS AND ANSWERS

Why am I being provided this proxy statement?

M&T Bank Corporation (“we” or “M&T”) is providing this proxy statement to you because the Board of Directors is soliciting your proxy to vote your shares of M&T common stock at the 2018 Annual Meeting of Shareholders (the “Annual Meeting”), or any adjournment or adjournments thereof.  This proxy statement contains information about matters to be voted upon at the Annual Meeting and certain other information required by the U.S. Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”).

We are first mailing this proxy statement and the accompanying form of proxy on or about March 7, 2018 to M&T common shareholders of record as of February 28, 2018.  A copy of M&T Bank Corporation’s Annual Report for 2017, including financial statements, accompanies this proxy statement, but is not part of the proxy solicitation materials.

Where will the Annual Meeting be held and when?

The Annual Meeting will be held on the 10th floor of One M&T Plaza in Buffalo, New York, on Tuesday, April 17, 2018, at 11:00 a.m.  M&T’s mailing address is One M&T Plaza, Buffalo, New York 14203, and its telephone number is (716) 842-5138.

Who is entitled to receive notice of and to vote at the Annual Meeting?

Common shareholders of record at 5:00 p.m. on February 28, 2018 are entitled to receive notice of and to vote at the Annual Meeting.  On February 28, 2018, M&T had outstanding 148,509,336 shares of common stock, $0.50 par value per share.  Each share of common stock is entitled to one vote.  Shares may not be voted at the Annual Meeting unless the owner is present or represented by proxy, as more fully explained in this proxy statement.

How can I vote by proxy?

You can vote by proxy by completing and returning the physical proxy card accompanying this proxy statement or by following the telephone or Internet voting procedures described on the proxy card.  The telephone and Internet voting procedures are designed to authenticate that you are a shareholder by use of a control number and allow you to confirm that your instructions have been properly recorded.  If you are a shareholder of record, the method by which you vote will not limit your right to vote at the Annual Meeting if you later decide to attend in person.

 

 

1

 


May I revoke my proxy?

How you hold your shares (shareholder of record or in street name) determines how and when you may revoke your proxy.  A shareholder of record may revoke a proxy that has been previously given at any time before it is exercised by giving written notice of such revocation or by delivering a later dated proxy, in either case, to the Corporate Secretary, at One M&T Plaza, Buffalo, New York 14203, or by voting in person at the Annual Meeting.  A beneficial owner of shares in street name must follow the instructions from his or her broker, trustee, bank or other nominee to revoke his or her previously given proxy.

How will my proxy be voted?

Your proxy will be voted in accordance with the directions you provide.  If you sign, date and return your proxy card but do not specify how you want to vote your shares, your shares will be voted FOR the election as directors of the 17 persons named under the section titled “NOMINEES FOR DIRECTOR”; FOR approving the 2017 compensation of M&T Bank Corporation’s Named Executive Officers; and FOR ratifying the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of M&T for the year ending December 31, 2018.

What is required for a quorum at the Annual Meeting?

The presence in person or by proxy of the holders of a majority of the outstanding shares of common stock constitutes a quorum for the transaction of business at the Annual Meeting.  Broker non-votes will be counted as being present or represented at the Annual Meeting for purposes of establishing a quorum, but, under NYSE rules, brokers will not be permitted to vote in the election of directors or on the advisory vote to approve the compensation of M&T Bank Corporation’s Named Executive Officers unless specific voting instructions are provided to the broker.  We therefore encourage beneficial owners of shares whose shares are held in street name to direct their vote for all agenda items on the form of proxy or instruction card sent by his or her broker, trustee, bank or other nominee.

What happens if an incumbent director nominee does not receive a majority of votes in favor of his or her election?

Pursuant to M&T’s Amended and Restated Bylaws, in an uncontested election of directors, the affirmative vote of a majority of the votes cast with respect to the nominee is required for the election of such nominee as a director, assuming a quorum is present or represented at the Annual Meeting.  If an incumbent director does not receive the required affirmative vote, that director would be required to tender his or her resignation to the Board of Directors for consideration in accordance with the Amended and Restated Bylaws.

What approval is necessary to approve Proposals 2 and 3?

For each of Proposals 2 and 3, the affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve the 2017 compensation of M&T Bank Corporation’s Named Executive Officers and to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of M&T for the year ending December 31, 2018.

An abstention will not constitute a vote cast and therefore will not affect the outcome of the vote on the election of directors, the advisory vote to approve the 2017 compensation of M&T Bank Corporation’s Named Executive Officers, or the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm of M&T for the year ending December 31, 2018.  Broker

 

2

 

 


non-votes will not constitute votes cast for the election of directors or for the approval of the compensation of M&T Bank Corporation’s Named Executive Officers, and therefore will have no effect on the outcome of either of these proposals.

Who is paying for the solicitation of proxies?

M&T will bear the cost of soliciting proxies in the accompanying form of proxy.  We are making this solicitation by mail, by telephone and in person using the services of some employees of M&T or its subsidiaries at nominal cost.  We will reimburse brokers, trustees, banks and other nominees for expenses they incur in mailing proxy materials to beneficial owners of M&T’s common stock.

How do I propose actions for the 2019 Annual Meeting of Shareholders?

In order for a shareholder proposal for the 2019 Annual Meeting of Shareholders to be eligible for inclusion in M&T’s proxy statement, we must receive it at our principal executive offices no later than November 7, 2018.  You must provide your proposal to us in writing and your notice must contain the information required by M&T’s Amended and Restated Bylaws.

M&T’s Amended and Restated Bylaws state that no business may be brought before an annual meeting of shareholders unless it is specified in the notice of the meeting or is otherwise brought before the meeting by the Board of Directors or by a shareholder entitled to receive notice of and to vote who has delivered notice to M&T (containing the information specified in the Amended and Restated Bylaws) not less than 120 days prior to the anniversary of the date on which M&T first mailed its proxy materials for the preceding year’s annual meeting of shareholders.  These requirements are separate from and in addition to the SEC’s requirements that a shareholder must meet in order to have a shareholder proposal included in M&T’s proxy statement.  A shareholder wishing to submit a proposal for consideration at the 2019 Annual Meeting of Shareholders, either under SEC Rule 14a-8 or otherwise, should do so no later than November 7, 2018.

What do I have to bring in order to attend the Annual Meeting in person?

In order to be admitted to the Annual Meeting, you will need to bring a valid photo ID or other satisfactory proof of identification.  If you are a beneficial owner of shares in street name, you must also bring evidence of your M&T share ownership that can include a notice from your broker, trustee, bank or other nominee regarding the availability of these proxy materials or a recent account statement from the broker, trustee, bank, or other nominee that holds your shares and confirms your beneficial ownership of those shares.

 

 

3

 


PROPOSAL 1

ELECTION OF DIRECTORS

M&T’s current Board of Directors is comprised of persons who were identified as being qualified director candidates by management and the Board of Directors.  Upon the recommendation of the Nomination, Compensation and Governance Committee (the “NCG Committee”), the Board of Directors recommends the following 17 persons for election as directors of M&T, to hold office until the 2019 Annual Meeting of Shareholders and until their successors have been elected and qualified.  Thirteen of the 17 nominees listed below were elected at the 2017 Annual Meeting of Shareholders.  

If any nominee for any reason, becomes unavailable for election, or if a vacancy occurs before the election (which events are not expected), it is intended that the shares represented by the proxies will be voted for such other person, if any, as the NCG Committee shall designate.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH
OF THE 17 NOMINEES.

 

 

Each nominee’s business experience, including occupation, current public company directorships, and public company directorships held at any time during the past five years is provided.  Additionally, the specific experience, qualifications and skills, including education, of each nominee that was considered by the NCG Committee are listed.  The information with respect to each nominee is as of February 28, 2018, and includes each nominee’s affiliations with M&T’s subsidiary banks, Manufacturers and Traders Trust Company (also known as “M&T Bank”) and Wilmington Trust, National Association (“Wilmington Trust, N.A.”).  The information contained in this proxy statement concerning the nominees is based upon statements made or confirmed to M&T by or on behalf of such nominees, except to the extent certain information is contained in M&T’s records.

The Board of Directors believes that the experience, qualifications and skills of each of the director nominees contributes to an effective and well-functioning board providing oversight of M&T’s business and management.

 

4

 

 


NOMINEES FOR DIRECTOR

 

BRENT D. BAIRD. BAIRD

 

Chairman of the

Nomination, Compensation and Governance

Committee

Member of the
Executive Committee

Director since 1983

Mr. Baird, age 79, is a private investor.  He is the former President and Chief Executive Officer of Merchants Group Inc. and a former general partner of Trubee, Collins & Co., Inc.  Mr. Baird served as a director of Todd Shipyards Corporation (NYSE: TOD) from 1992 to 2011.  He is a director of M&T Bank and a member of its Executive Committee and its Trust and Investment Committee.  Mr. Baird is also a member of M&T Bank’s Directors Advisory Council of the New York City/Long Island Division.

Experience, Qualifications and Skills

Mr. Baird has significant investment management and corporate governance expertise having served in numerous executive positions in public and private companies.  Mr. Baird holds a Bachelor of Arts with Honors from Williams College.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C. ANGELA BONTEMPO

 

Chair of the

Audit Committee

Director since 1991

Ms. Bontempo, age 77, is a self-employed health care consultant.  She serves as a consultant to Community Health Systems, Inc. (NYSE: CYH), to Enterprise Analysis Corp. in Stamford, Connecticut and to Ciminelli Properties, LLC in Buffalo, New York.  Ms. Bontempo also serves as a member of the Niagara University’s Business School Council.  She formerly served as President and Chief Executive Officer and as a director of Saint Vincent Health System in Erie, Pennsylvania, as President and Chief Executive Officer of Bryant & Stratton College, a system of proprietary colleges headquartered in Buffalo, New York, as Senior Vice President and Executive Director of the Roswell Park Cancer Institute in Buffalo, New York and as a director of iPorta Corporation in Toronto, Ontario, Canada.  Ms. Bontempo is a director of M&T Bank and the Chair of its Examining Committee.

Experience, Skills and Qualifications

Ms. Bontempo has extensive experience overseeing financial personnel and auditing and financial reporting.  She has considerable executive leadership and decision-making skills gained through her positions at not-for-profit organizations, privately held companies and professional associations.  Ms. Bontempo holds a Bachelor of Arts in Education and a Bachelor of Arts in Theology from St. Joseph’s College, an Associate in Applied Science in Nursing from Maria College, a Master of Science in Microbiology from Howard University and a Master of Health Administration from St. Louis University.  She further holds an Advanced Certification in Finance from Yale University.

 

 

 

5

 


ROBERT T. BRADY

 

Vice Chairman of the Board of Directors

Member of the Nomination, Compensation and Governance

Committee

 

Member of the

Executive Committee

Director since 1994

Mr. Brady, age 77, serves as Vice Chairman of M&T’s Board of Directors and as its lead independent director.  He is the former Chairman of the Board and Chief Executive Officer of Moog Inc. (NYSE: MOG.A), a worldwide manufacturer of control systems and components for aircraft, spacecraft, automated machinery and medical equipment.  He served as Moog’s Executive Chairman from 2011 until his retirement on January 31, 2014.  Mr. Brady is a director of Astronics Corporation (NASDAQ: ATRO) where he serves as a member of the Audit and the Compensation and Nominating/Governance Committees.  He is a director of Multisorb Technologies, a privately held company that specializes in packaging technology located in Buffalo, New York.  Mr. Brady is also a director of ENrG, Inc., a privately held manufacturing company located in Buffalo, New York and serves on its Audit and Compensation Committees. Mr. Brady is a director of CUBRC, Inc., a research, development, testing and systems integration company located in Buffalo, New York.  He previously served as a director of Seneca Foods Corporation (NASDAQGS: SENEA) and of National Fuel Gas Company (NYSE: NFG).  Mr. Brady is a director of the Albright-Knox Art Gallery in Buffalo, New York and serves on the University at Buffalo Council.  Mr. Brady is a director of M&T Bank and a member of its Executive Committee.

Experience, Skills and Qualifications

Mr. Brady is an experienced and successful business leader with a track record of helping companies innovate, grow and create jobs.  He brings insight into risk management, operational risk and strategic planning.  In addition to his significant leadership experience with several public companies, Mr. Brady has considerable corporate governance experience.  Mr. Brady holds a Bachelor of Science degree in Mechanical Engineering from Massachusetts Institute of Technology and a Master of Business Administration from Harvard Business School.

 

 

 

T. JEFFERSON CUNNINGHAM III

Member of the

Risk Committee

Director since 2001

Mr. Cunningham, age 75, is the Chairman and Chief Executive Officer of Magnolia Capital Management, Ltd., a registered investment adviser in Cold Spring, New York.  He is the former Chairman of the Board and Chief Executive Officer of Premier National Bancorp, Inc. and Premier National Bank, and of Premier’s predecessors.  Mr. Cunningham had a distinguished career in various executive-level positions with several U.S. and European financial institutions.  He is a trustee of Open Space Institute, an environmental conservation organization dedicated to protecting significant landscapes in New York State, where he serves on several committees and as Chairman of its Finance Committee.  He is an advisory director of the Community Foundations of the Hudson Valley in Poughkeepsie, New York.  Mr. Cunningham is a director of M&T Bank, a member of its Risk Committee, and the Chairman of M&T Bank’s Directors Advisory Council of the Hudson Valley Division.

Experience, Skills and Qualifications

Mr. Cunningham has extensive experience with commercial and investment banking strategy, both domestically and internationally.  He brings in-depth knowledge of risk management, fiduciary oversight responsibility and a valuable international perspective to M&T’s business activities.  Mr. Cunningham holds a Bachelor of Arts in Economics from Cornell University and a Master of Business Administration from Stanford University.

 

 

 

6

 

 


GARY N. GEISEL

 

Member of the Nomination, Compensation and Governance Committee

Member of the

Risk Committee

Director since 2009

 

Mr. Geisel, age 69, is the former Chairman of the Board and Chief Executive Officer of Provident Bankshares Corporation and Provident Bank.  He previously served as Chairman of the Board of Saint Agnes Hospital in Baltimore, Maryland having served on its Finance, Governance, Compensation and Executive Committees.  Mr. Geisel is a former director of Goodwill Industries of the Chesapeake and served as its Chairman and on the Executive Committee.  He is a former director of Annapolis Life Care, Inc., a continuing-care retirement community operator in Annapolis, Maryland, where he served as a member of its Finance and Audit Committee.  Mr. Geisel is also a member of the Finance Committee of the Baltimore Community Foundation.  He is a director of Urban Teachers, a non-profit teacher preparation program in Baltimore, Maryland and serves as the Chairman of its Compensation Committee.  Mr. Geisel is a director of M&T Bank and a member of its Risk Committee and serves as Chairman of M&T Bank’s Directors Advisory Council of the Baltimore-Washington Division.  

Experience, Skills and Qualifications

Mr. Geisel brings financial acumen with over 30 years of experience in the banking industry as well as exceptional executive leadership.  He holds a Bachelor of Science from Edinboro University of Pennsylvania, a Master of Business Administration from Duquesne University and completed banking programs at the Stonier Graduate School of Banking.

 

 

 

 

 

 

 

 

 

 

 

RICHARD S. GOLD

 

President and

Chief Operating Officer

 

Director since

December 2017

 

Mr. Gold, age 57, was appointed President and Chief Operating Officer and a Director of M&T and of M&T Bank effective December 20, 2017.  He served as an Executive Vice President of M&T from 2007 to 2017 and as Chief Risk Officer of M&T from 2014 to April 3, 2017.  Mr. Gold served as a Vice Chairman of M&T Bank from 2014 to 2017 and as Chief Risk Officer of M&T Bank from 2014 to April 3, 2017.  He was an Executive Vice President of M&T Bank from 2006 to 2014.  Mr. Gold is an Executive Vice President and a Director of Wilmington Trust, N.A. He serves on the Buffalo Seminary Board of Trustees in Buffalo, New York and on the Board of Directors of the Westminster Foundation in Buffalo, New York. Mr. Gold is also a director of the Buffalo Niagara Partnership, a member of the Consumer Bankers Association Board of Directors and has been an adjunct professor at the State University of New York at Buffalo's School of Management since 2012.

Experience, Skills and Qualifications

Mr. Gold joined M&T Bank in 1989 as an Executive Associate and has over 30 years of experience in banking.  He has served M&T Bank in numerous executive and managerial positions in retail banking, consumer lending, mortgage, business banking and risk, and oversight of the legal division, which have provided him with valuable institutional knowledge.  Mr. Gold holds a Bachelor of Science from Cornell University School of Industrial and Labor Relations and a Master of Business Administration from New York University Stern School of Business.

 

 

 

7

 


RICHARD A. GROSSI

 

Member of the

Audit Committee

Director since 2015

 

Mr. Grossi, age 70, is the former Senior Vice President and Chief Financial Officer of Johns Hopkins Medicine in Baltimore, Maryland where he served as such from 1996 to 2015.  He currently serves as a consultant for Johns Hopkins Medicine and other organizations.  Mr. Grossi is a director and the Treasurer of Biotechnology Institute of Maryland, a non-profit scientific training program in Baltimore, Maryland.  He is also a member of the Trustee Audit Committee of Catholic Charities of Maryland.  Mr. Grossi has more than 40 years of experience in higher education and the health care industry.  He is a director of M&T Bank and a member of its Examining Committee and a member of M&T Bank’s Directors Advisory Council of the Baltimore-Washington Division.

Experience, Skills and Qualifications

Mr. Grossi’s areas of expertise include financial analysis and management, organizational design and development, human resource management, systems selection and implementation, operational and financial responsibility for large functional units, and responsibility for major facility construction and control.  He is experienced in strategic planning, cash management and treasury, new business initiatives, trustee interactions in financial decisions, oversight of budgeting and capital planning, general accounting and financial reporting.  Mr. Grossi holds a Bachelor of Business Administration in Accounting and a Master of Business Administration in Financial Management from Pace University.

 

 

 

 

 

 

 

 

 

 

 

 

JOHN D. HAWKE, JR.

 

Chairman of the

Risk Committee

Director since 2012

 

Mr. Hawke, age 84, is Senior Counsel with the Washington, D.C. based international law firm of Arnold & Porter LLP, where he previously served as a partner and as Chairman of the firm, having established one of the nation’s premier financial services practices.  He has extensive experience with financial regulation and bank supervision, having served as the Comptroller of the Currency from 1998 to 2004, Under-Secretary of the Treasury for Domestic Finance from 1995 to 1998 and as General Counsel to the Board of Governors of the Federal Reserve System from 1975 to 1978.  Mr. Hawke is a director of M&T Bank and serves as Chairman of its Risk Committee.

Experience, Skills and Qualifications

As Comptroller of the Currency, Mr. Hawke was a member of the Basel Committee on Banking Supervision, the Board of Directors of the Federal Deposit Insurance Corporation and the Federal Financial Institutions Examination Council.  He taught courses on federal regulation of banking and bank acquisitions at the Georgetown University Law Center and at the Morin Center for Banking Law Studies at Boston University School of Law. Mr. Hawke has published extensively on matters relating to the regulation of banking institutions.  He holds a Bachelor of Arts in English from Yale University and a Bachelor of Laws from Columbia University Law School.

 

8

 

 


RENÉ F. JONES

 

Chief Executive Officer

 

Chairman of the

Board of Directors

 

Member of the

Executive Committee

 

Director since

December 2017

 

Mr. Jones, age 53, was appointed Chairman of the Board and Chief Executive Officer of M&T and of M&T Bank effective December 20, 2017. He is a member of the Executive Committee of M&T Bank. Mr. Jones served as an Executive Vice President of M&T from 2006 to 2017.  He served as Chief Financial Officer of M&T and M&T Bank from 2005 to 2016 and as a Vice Chairman of M&T Bank from 2014 to 2017.  Mr. Jones is the Chairman, Chief Executive Officer and President of Wilmington Trust, N.A. and is the Chairman of its Trust and Investment Committee.  He also serves as a director of a number of principal subsidiaries of M&T Bank.  Mr. Jones serves on the Board of Directors of the Westminster Foundation in Buffalo, New York, Roswell Park Cancer Institute’s Alliance Foundation in Buffalo, New York and the Jacobs Institute, a non-profit medical device innovation center in Buffalo, New York.  He is a director and member of the Finance Committee of Independent Health in Buffalo, New York. Mr. Jones is on the Board of Overseers of the Massachusetts Historical Society and is a trustee of the Burchfield Penny Art Center in Buffalo, New York.  

Experience, Skills and Qualifications

Mr. Jones joined M&T Bank in 1992 as an Executive Associate and has over 25 years of experience in banking.  He has served M&T Bank in numerous executive and managerial positions in the finance, wealth and institutional services, human resources, consumer lending, mortgage, and treasury divisions which have provided him with valuable institutional knowledge.  Mr. Jones received a Bachelor of Science in Management Science from Boston College and a Master of Business Administration with concentrations in Finance, Organization and Markets from the University of Rochester Simon School of Business.

 

 

 

 

 

 

RICHARD H. LEDGETT, JR.

 

 

Director since

August 2017

 

Mr. Ledgett, age 60, is a private consultant. He served as Deputy Director and Chief Operating Officer of the National Security Agency (“NSA”), the largest intelligence organization in the U.S., from January 2014 until his retirement in April 2017, and worked for the NSA for 29 years.  Mr. Ledgett is a member of the U.S. Naval Academy’s Cyber Board of Advisors and has served as an instructor and course developer at the National Cryptologic School within the NSA in Washington, D.C. and as an adjunct faculty member at the National Intelligence University in Washington, D.C. He is a director of M&T Bank.  

 

Experience, Skills and Qualifications

Mr. Ledgett brings four decades of specialty expertise in the areas of intelligence, cyber security and cyber operations.  He holds a Bachelor of Science in Psychology from the University of the State of New York in Albany, New York and a Master of Science in Strategic Intelligence from the Defense Intelligence College.

 

 

 

9

 


NEWTON P.S. MERRILL

 

Director since 2015

 

Mr. Merrill, age 78, is a private investor with a distinguished five decade financial services career, including in executive positions at the Bank of Boston and The Bank of New York where he was the head of Private Client Services, Personal Trust, Asset Management and Private Banking businesses at his retirement in 2003.  He serves as Chairman of Mellon Optima L/S Strategy Fund LLC, as a director of National Integrity Life Insurance Co. in Cincinnati, Ohio, and as an Advisory Board Member and director of York Capital Management and related funds.  Mr. Merrill is a director of FT Crosby Education Foundation, Inc., a non-profit educational foundation.  He is a trustee and Chairman Emeritus of Woods Hole Oceanographic Institution in Woods Hole, Massachusetts, and a trustee and Chairman Emeritus of the Museum of the City of New York. Mr. Merrill is a director of M&T Bank and a member of its Trust and Investment Committee and an Advisory Member of the Trust and Investment Committee of Wilmington Trust, N.A.

Experience, Skills and Qualifications

Mr. Merrill has a wide range of banking and managerial experience with financial institutions and has considerable knowledge of investment banking and venture capital as well as private client services, asset management and fiduciary responsibility.  He holds a Bachelor of Arts in Engineering and Applied Physics from Harvard College.

 

 

 

 

 

 

 

 

MELINDA R. RICH

 

Director since 2009

 

Ms. Rich, age 60, is Vice Chairman of Rich Products Corporation, a privately owned global manufacturer and supplier of frozen foods headquartered in Buffalo, New York.  She is Chair of Rich Products Corporation’s Finance and Audit Committee, and Compensation Committee, and a member of its Executive Committee.  Ms. Rich is President of Rich Entertainment Group, which consists of various businesses in the sports, entertainment and restaurant industries.  She is a director of Rich Holdings, Inc., as well as several other entities within the Rich Products Corporation family of companies.  Ms. Rich is a director of Grove Entertainment, a production company in New York City.  She serves as a trustee of Cleveland Clinic in Cleveland, Ohio.  Ms. Rich serves as a director of a number of charitable foundations, including Rich Family Foundation, DreamCatcher Foundation, Inc. and Cleveland Rock and Roll, Inc./ Rock and Roll Hall of Fame & Museum.  She is a former director of Wm. Wrigley, Jr. Company.  Ms. Rich is a director of M&T Bank.  

Experience, Skills and Qualifications

Ms. Rich brings considerable knowledge of executive compensation matters, leadership roles and service to civic and community organizations.  She provides a valuable international perspective on public policy, societal and economic issues.  Ms. Rich holds a Bachelor of Arts in Psychology from the University of Colorado.  She received an Honorary Doctorate of Humane Letters from the Culinary Institute of America, an Honorary Doctorate of Laws from D’Youville College and an Honorary Doctorate of Humane Letters from Canisius College.

 

 

10

 

 


ROBERT E. SADLER, JR.

 

Member of the

Risk Committee

 

Chairman of the Executive Committee

Director since 1999

 

Mr. Sadler, age 72, was a consultant to M&T from 2010 to April 1, 2017.  He joined M&T Bank in 1983 and held a number of executive positions, including Vice Chairman of the Board of Directors from 2007 until his retirement in June 2010.  From June 2005 to January 2007, Mr. Sadler served as President and Chief Executive Officer of M&T and M&T Bank.  He serves as a director of Delaware North Companies, Inc., a privately held global hospitality and food service company headquartered in Buffalo, New York.  Mr. Sadler served as a director of Gibraltar Industries, Inc. (NASDAQ: ROCK) from 2004 to 2015 and as a director of Security Mutual Life Insurance Company of New York until 2015.  He is a director of M&T Bank, Chairman of its Executive Committee, and a member of its Risk Committee and its Trust and Investment Committee.  Mr. Sadler is a member of the Trust and Investment Committee of Wilmington Trust, N.A. and serves as the Chairman of the Florida Advisory Council of Wilmington Trust, N.A.

Experience, Skills and Qualifications

Mr. Sadler brings in-depth knowledge of the financial services industry including significant financial experience and valuable institutional knowledge through his executive roles with M&T.  He holds a Bachelor of Arts from Washington and Lee University and a Master of Business Administration from Emory University.

 

 

 

 

 

 

 

 

DENIS J. SALAMONE

 

Member of the Audit Committee

 

Director since 2015

Mr. Salamone, age 64, joined M&T’s Board of Directors effective with the closing of M&T’s acquisition of Hudson City Bancorp, Inc. and Hudson City Savings Bank (“Hudson City”) in November 2015.  He served as Chairman and Chief Executive Officer of Hudson City from September 2014 until November 1, 2015.  Mr. Salamone joined Hudson City in 2001 as Senior Executive Vice President and served on its Board of Directors.  Between 2002 and 2014, he held several senior executive positions at Hudson City, including President and Chief Operating Officer.  Prior to joining Hudson City, Mr. Salamone was an accountant with PricewaterhouseCoopers LLP for 26 years, 16 years as a partner where he served as the Global Financial Services leader for Audit and Business Advisory Services.  Mr. Salamone is a member of the American Institute of CPAs and a member of the New York State Society of CPAs. He serves as Vice Chairman of the Board of Trustees for St. Francis College in Brooklyn Heights, New York, as Chairman of the Board of Trustees of the Ridgewood, New Jersey YMCA, as a trustee of the Valley Hospital in Ridgewood, New Jersey and as a trustee of Table to Table in Englewood Cliffs, New Jersey.  Mr. Salamone is a director of M&T Bank and a member of its Examining Committee.

Experience, Skills and Qualifications

Mr. Salamone has more than 35 years of experience in the financial services industry and brings significant accounting skills and knowledge of financial reporting and risk management.  He holds a Bachelor of Science in Accounting from St. Francis College.

 

 

 

11

 


JOHN R. SCANNELL

Director since

November 2017

Mr. Scannell, age 54, is the Chairman of the Board and Chief Executive Officer of Moog Inc. (NYSE: MOG.A), a worldwide manufacturer of control systems and components for aircraft, spacecraft, automated machinery and medical equipment.  He was appointed Vice President of Moog in 2005 and Chief Financial Officer in 2007.  In 1999, Mr. Scannell became the General Manager of Moog Ireland and joined the Aircraft Group in East Aurora, New York in 2003.  He joined Moog in 1990 as an Engineering Manager of Moog Ireland and later become Operations Manager of Moog GmbH in Germany.  Mr. Scannell is a director of Albany International Corp. (NYSE: AIN) where he serves as a member of the Compensation Committee.  He is a director of M&T Bank.

 

Experience, Skills and Qualifications

Mr. Scannell brings significant business and management experience and valuable international business expertise.  He holds a Bachelor of Science and a Master of Science in Electrical Engineering from the University College at Cork, Ireland and a Master of Business Administration from Harvard Business School.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DAVID S. SCHARFSTEIN

Member of the Audit Committee

 

Director since 2017

Mr. Scharfstein, age 57, is the Edmund Cogswell Converse Professor of Finance and Banking at Harvard Business School and Senior Associate Dean, Doctoral Programs at Harvard Business School.  From 1987 until joining the Harvard Business School faculty in 2003, he was a finance professor at the Massachusetts Institute of Technology Sloan School of Management.  Mr. Scharfstein is a member of the Executive Committee of the American Finance Association and a Research Associate of the National Bureau of Economic Research.  He served as President of the American Finance Association, as Senior Advisor to the U.S. Treasury Secretary from September 2009 to May 2010, and as a member of the Financial Advisory Roundtable of the Federal Reserve Bank of New York.  Mr. Scharfstein is a director of M&T Bank and a member of its Examining Committee.

Experience, Skills and Qualifications

Mr. Scharfstein is widely published on a broad range of topics in corporate finance and banking.  He provides diversity of viewpoint by virtue of his academic background and brings valuable perspectives in the areas of finance, risk management and capital management.  Mr. Scharfstein holds a Bachelor of Arts from Princeton University and a Doctor of Philosophy in Economics from the Massachusetts Institute of Technology.

 

 

 

12

 

 


HERBERT L. WASHINGTON

Member of the

Audit Committee

Director since 1996

Mr. Washington, age 67, has been President of H.L.W. Fast Track, Inc., a fast food restaurant enterprise located in Youngstown, Ohio, which owns and operates 23 McDonald’s franchises in Ohio and Pennsylvania since 1980.  He was appointed as a director to the Federal Reserve Bank of New York for a three-year term in 1993.  Mr. Washington served as Chairman of the Federal Reserve Bank of New York, Buffalo Branch Board from 1992 to 1993.  He is a director of the Youngstown Ohio Chamber of Commerce and of the Big Ten Athletic Advisory Committee.  Mr. Washington is a director of M&T Bank and a member of its Examining Committee.

Experience, Skills and Qualifications

Mr. Washington brings extensive business acumen, valuable entrepreneurial skills and financial regulation experience.  He holds a Bachelor of Arts in Education from Michigan State University.

 

 

 

 

13

 


DIRECTOR COMPENSATION

The following table sets forth M&T’s 2017 compensation structure for directors’ fees (for directors who are not salaried officers of M&T or its subsidiaries):

Elements of 2017 Directors’ Fees

 

Fees

Compensation

 

Annual Board Retainer

$

85,000

 

Board Attendance Fees – Per Meeting Attended

$

3,000

 

Committee Attendance Fees – Per Meeting Attended

$

3,000

 

Annual Audit Committee Chair Retainer

$

20,000

 

Annual Audit Committee (other than Chair) Retainer

$

10,000

 

Annual Risk Committee Chair Retainer

$

20,000

 

Annual Risk Committee (other than Chair) Retainer

$

10,000

 

Meetings with Regulators – Per Meeting Attended

$

3,000

 

 

Pursuant to the terms of the M&T Bank Corporation 2008 Directors’ Stock Plan (“Directors’ Stock Plan”), each director can elect to receive payment of his or her annual compensation in cash, in shares of M&T common stock, or in a combination of cash and shares of common stock for services as a director or advisory director of M&T and its subsidiaries.  Compensation is paid at the end of each calendar quarter in an amount equal to one quarter of a director’s annual retainer and the meeting fees earned during such quarter.  All directors are entitled to reimbursement for travel expenses incidental to their attendance at meetings.  The Board of Directors has determined that no fees (retainer, attendance or otherwise) will be paid to a director who is a salaried officer of M&T or any of its subsidiaries, or where such individual receives payment for services provided to M&T or any of its subsidiaries immediately after ceasing to be a salaried officer.

The following table sets forth the compensation of M&T’s directors in fiscal year 2017:

2017 Director Compensation

 

Name

Fees

Earned or

Paid in

Cash(1)

 

Stock

Awards(2)

 

All Other

Comp.

 

Total

 

Edward G. Amoroso

$

15,863

 

$

15,470

 

 

 

 

$

31,333

 

Brent D. Baird

$

229

 

$

201,021

 

 

 

 

$

201,250

 

C. Angela Bontempo

$

84,473

 

$

83,527

 

 

 

 

$

168,000

 

Robert T. Brady

$

77,424

 

$

76,576

 

 

 

 

$

154,000

 

T. Jefferson Cunningham III

$

93,226

 

$

92,774

 

 

 

 

$

186,000

 

Gary N. Geisel

$

103,984

 

$

103,216

 

 

 

 

$

207,200

 

Richard A. Grossi

$

82,965

 

$

82,235

 

 

 

 

$

165,200

 

John D. Hawke, Jr.

$

96,334

 

$

95,666

 

 

 

 

$

192,000

 

Richard H. Ledgett, Jr.

$

29,939

 

$

29,478

 

 

 

 

$

59,417

 

Newton P.S. Merrill

$

72,977

 

$

72,023

 

 

 

 

$

145,000

 

Melinda R. Rich

$

60,727

 

$

60,273

 

 

 

 

$

121,000

 

Robert E. Sadler, Jr.

$

71,391

 

$

70,859

 

$

50,000

 

$

192,250

 

Denis J. Salamone

$

73,626

 

$

72,874

 

 

 

 

$

146,500

 

John R. Scannell

$

14,633

 

$

14,534

 

 

 

 

$

29,167

 

David S. Scharfstein

$

55,310

 

$

54,940

 

 

 

 

$

110,250

 

Herbert L. Washington

$

79,419

 

$

78,581

 

 

 

 

$

158,000

 

 

 

(1)

The amounts listed in this column show only the amount of fees paid in cash, which is paid at the end of each calendar quarter.

 

14

 

 


 

(2)

The amounts listed in this column reflect fees paid in the form of M&T common stock, which is paid at the end of each calendar quarter.  The value of M&T common stock paid is based on the grant date fair value, which equals the value as of the last business day of each calendar quarter on which the shares of common stock are quoted on the NYSE.

 

(3)

Mr. Amoroso did not stand for reelection at the 2017 Annual Meeting; thus, the amounts shown represent only those fees earned during his service on the board.

 

(4)

Includes fees paid to directors for their service on M&T Bank Director Advisory Councils.

 

(5)

In accordance with the policy of the Board of Directors, any director who receives payments from M&T is not eligible to receive directors’ fees.  Mr. Sadler was a paid consultant to M&T until April 1, 2017 when the agreement was terminated.  The amounts shown represent the pro-rated compensation earned by Mr. Sadler in 2017 under the consulting arrangement with M&T as well as fees earned following termination of his consulting arrangement when he became eligible to receive directors’ retainers and fees, including for service on Wilmington Trust, N.A.’s Florida Advisory Council.

M&T Bank Corporation 2008 Directors’ Stock Plan

Pursuant to the terms of the Directors’ Stock Plan, each director can elect to receive payment of his or her annual compensation in cash, in shares of M&T common stock, or in a combination of cash and shares of M&T common stock for services as a director or advisory director of M&T and its subsidiaries.  The number of shares of M&T common stock paid is determined by dividing the amount of such compensation payable in shares of M&T common stock by the closing price of M&T’s common stock on the NYSE on the business day immediately preceding the day the compensation is payable.  Shares of M&T common stock received in payment of fees vest immediately upon grant.

M&T Bank Directors’ Fees

M&T directors, who also serve as directors of M&T Bank, if not salaried officers of M&T or its subsidiaries, receive attendance fees for each M&T Bank board, council or committee meeting attended, unless any such meeting is held concurrently with a meeting of the M&T board or committee, of which they are also a member.  Except as described below, such attendance fees and the cash versus stock allocations are identical to the schedule of fees paid to directors of M&T for board and committee meetings attended described above.

Mr. Baird, as a member of the Directors Advisory Council of the New York City/Long Island Division of M&T Bank, received an annual retainer of $15,000 and a fee of $1,750 for each meeting he attended.  Mr. Cunningham, as Chairman of the Directors Advisory Council of the Hudson Valley Division of M&T Bank, received a fee of $1,000 for each meeting he attended.  Mr. Geisel, as Chairman of the Directors Advisory Council of the Baltimore-Washington Division of M&T Bank, received a fee of $300 for each meeting he attended.  Mr. Grossi, as a member of the Directors Advisory Council of the Baltimore-Washington Division of M&T Bank, received a fee of $300 for each meeting he attended.  Effective April 1, 2017, Mr. Sadler, as Chairman of the Wilmington Trust, N.A. Florida Advisory Council, received a fee of $2,000 for each meeting he attended.  

 

 

15

 


CORPORATE GOVERNANCE OF M&T BANK CORPORATION

Corporate Governance Standards

M&T’s Board of Directors believes that the purpose of sound and effective corporate governance is to ensure that shareholder value is maximized in a manner that is consistent with legal requirements and the highest standards of business ethics and integrity.  The Board has consistently adhered to corporate governance standards that the board believes promotes this purpose.  The Board initially adopted corporate governance practices in 1997 and adopted formal corporate governance standards in 2003.  Annually, the Board evaluates, in light of best practices and regulatory guidance, its Corporate Governance Standards.

The Board last amended its Corporate Governance Standards in October 2017.  The current Corporate Governance Standards are available on M&T’s website at www.ir.mandtbank.com/corpgov.cfm.  These standards address, among other things, director qualifications and responsibilities, board committees, director compensation and independence, director orientation and continuing education, annual performance evaluations, corporate disclosure policy, controls and procedures regarding financial reporting and disclosure, and codes of business conduct and ethics.

Pursuant to M&T’s Amended and Restated Bylaws, in an uncontested election when a quorum is represented, the affirmative vote of a majority of the votes cast with respect to such director nominee is required for the election of that nominee as a director.  If an incumbent director in an uncontested election does not receive the affirmative vote of a majority of the votes cast with respect to such director, that director is required to tender his or her resignation to the Board of Directors.  The Board will then determine whether or not to accept such resignation, taking into account the recommendation of the NCG Committee.  The Board will publicly disclose, in a press release or SEC filing, its decision to accept or reject such resignation within 90 days after the certification of the election results.

Availability of Corporate Governance Standards

In addition to being available on M&T’s website at www.ir.mandtbank.com/corpgov.cfm, any shareholder can request copies of M&T’s Corporate Governance Standards, the charters for each of the Audit Committee, Risk Committee, Nomination, Compensation and Governance Committee, or the Executive Committee, as well as our Code of Business Conduct and Ethics, and our Code of Ethics for CEO and Senior Financial Officers.  To make a request, shareholders may either mail their request to M&T Bank Corporation, Attention:  Shareholder Relations, One M&T Plaza, Buffalo, New York 14203, or send such request to Shareholder Relations via electronic mail at ir@mtb.com.

Codes of Ethics

M&T makes its policies and procedures available to all of our employees.  These policies include our Code of Business Conduct and Ethics.  Further, M&T requires all employees to annually certify that they have read and are familiar with the employee policies and procedures and their content, including our Code of Business Conduct and Ethics, and that they will adhere to such policies and procedures.

 

16

 

 


M&T’s Code of Business Conduct and Ethics applies to our directors, officers, advisors and employees, as well as to our agents and representatives, including consultants.  Our Code of Business Conduct and Ethics requires that individuals avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner, and otherwise act with integrity and in the best interests of M&T.  In addition, our Code of Business Conduct and Ethics expects individuals to report any observed illegal or unethical behavior and provides a retaliation-free reporting mechanism.  Our Code of Business Conduct and Ethics is a guide to help ensure that all individuals live up to the highest ethical standards.

M&T also maintains a Code of Ethics for CEO and Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer, Controller and all other senior financial officers designated by the Chief Financial Officer from time to time.  This Code of Ethics supplements our Code of Business Conduct and Ethics and is intended to promote honest and ethical conduct, full and accurate financial reporting and compliance with laws, as well as other matters.

Our Code of Business Conduct and Ethics and the Code of Ethics for CEO and Senior Financial Officers is available on M&T’s website at www.ir.mandtbank.com/corpgov.cfm.

In accordance with SEC rules, M&T will post on its website or file a Form 8-K to report any amendment to or waiver from any provision in the Code of Ethics for CEO and Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer, Controller, or persons performing similar functions.

Board Diversity

M&T strives to foster an inclusive workplace environment that respects and values individual differences.  We believe that employee diversity enhances the organization’s ability to innovate, and therefore to maintain a competitive advantage.  Likewise, M&T values diversity among its board members for these same reasons.  Our Corporate Governance Standards provide that the NCG Committee, in discharging its duties of reviewing the qualifications of director nominees, considers, among other factors, diversity, age, skills and experience in the context of the needs of the Board of Directors and regulatory obligations and guidance.  In light of these guidelines, the NCG Committee endeavors to appoint a slate of nominees that represents diversity with respect to educational background, business experience, life skills, geographic representation and community involvement, as well as gender, race and national origin.  The NCG Committee does not assign specific weight to any particular criteria; its goal is to identify nominees that, considered as a group, will possess the talents, skill sets and characteristics necessary for the Board of Directors to fulfill its responsibilities.

Board Independence

Pursuant to our Corporate Governance Standards, the Board conducts an annual review of director independence.  As a result of the review performed in April 2017, the Board determined, based upon the recommendation of the NCG Committee, that 12 of the 14 members then serving as directors met the NYSE standard for independence.  In February 2018, the Board conducted its annual director independence review and, based upon the recommendation of the NCG Committee, determined that of the 17 nominees standing for election as directors at the Annual Meeting, all of whom are currently serving as such, 14 meet the NYSE standard for independence.  Currently, only Messrs. Jones, Gold and Sadler are not deemed to be independent.  

 

 

17

 


The Board applies the standards of the SEC, NYSE and M&T’s Corporate Governance Standards to assist it in making independence determinations.  The Board considers all relevant facts and circumstances in determining whether a material relationship exists with M&T. Material relationships that the Board may consider include commercial, banking, consulting, legal, accounting, industrial, charitable and family relationships.  The NYSE rules set forth specific relationship that will always bar independence.  Under the NYSE “bright-line” tests, each of the following relationships will automatically bar a director from being independent:  

 

A director employed by M&T;

 

A director’s receipt of more than $120,000 per year in direct compensation from M&T (other than director fees and pension or other forms of deferred compensation for prior service not contingent upon continued service);

 

A director’s affiliation or employment with M&T’s internal or external auditors;

 

A director (or immediate family member) who has been an executive officer of another company where any executive officer of M&T serves or served on that company’s compensation committee; or

 

A director employed by (or an immediate family member is an executive officer of) a company that makes payments to, or receives payments from, M&T in an amount in excess of the greater of $1 million or 2% of such other company’s consolidated gross revenues.

An employee-director of M&T (or a director with an immediate family member who is an M&T executive officer) will not be independent until three years after the employment relationship ends.  The other bright-line tests will bar independence if they existed at any time during the prior three years.  

In making its determination as to the independence of the directors, the Board considered specific transactions, relationships and arrangements with directors and their immediate family members and any such person’s business affiliations.  For each of Mr. Hawke and Ms. Rich, payments by M&T to a company (in the case of Ms. Rich, a director-affiliated travel agency and, in the case of Mr. Hawke, the international law firm from which he is a retired partner and now an employee and does not share in the profits of the firm) for services in an amount that did not exceed the greater of $1 million or 2% of such company’s consolidated gross revenues.  The Board determined that neither Mr. Hawke nor Ms. Rich have a direct or indirect material interest in the transactions with the entities that M&T engaged for professional and transactional services.  Additionally, the Board considers ordinary course banking and financial services transactions provided by M&T and its subsidiaries as generally described in the section titled “TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS,” in making its determination as to independence.  

The Board, upon the recommendation of the NCG Committee, considered all relevant facts and circumstances, including these transactions, relationships and arrangements and, consistent with the applicable independence standards, determined that none impair the relevant director’s independence as a director of M&T or as a member of any of the committees on which he or she serves. Based on its review of all relevant information, the Board affirmatively determined that, other than Messrs. Jones, Gold and Sadler, who do not meet the NYSE bright-line independence standards, each member of the Board of Directors is “independent” and does not have any material relationships with M&T or its subsidiaries.  

 

18

 

 


Board Leadership Structure

Chairman and Lead Independent Director

Mr. Jones was elected as M&T’s Chairman of the Board and appointed Chief Executive Officer on December 20, 2017, following the death of Robert G. Wilmers who had held those posts for more than 30 years.  Mr. Jones has been an employee of M&T for over 25 years and has been a member of executive management for 13 years.  The Board believes that in light of Mr. Jones’ significant broad-based experience with M&T, his leadership tenure with the organization, and his close working relationship with Mr. Wilmers, that the same leadership structure is appropriate for the Board of Directors as it fosters effective decision-making and clear accountability.  The Board adheres to the Corporate Governance Standards on this topic and annually elects a non-executive Vice Chairman of the Board of Directors who performs the duties of lead independent director.  Mr. Brady has served as the lead independent director since June 2015.  The lead independent director presides over the executive sessions of the non-management directors.

Executive Sessions of the Non-Management Directors

The non-management directors meet at regularly scheduled executive sessions without management.  Mr. Brady, Vice Chairman of the Board of Directors and the lead independent director, presides at these meetings.  In the absence of the lead independent director, the non-management directors determine which director will preside at such meetings.

Board’s Role in Risk Oversight

The Board of Directors has delegated its risk oversight duties to the Risk Committee.  At each Board meeting, the Board receives separate reports from the Chairman of the Risk Committee as well as the Chair of the Audit Committee.  In 2017, the Audit Committee and the Risk Committee held one joint meeting.  M&T’s risk governance committees, including the Management Risk Committee, which is the primary management-level risk committee, provide regular reports to the Risk Committee.  Further, M&T’s Chief Risk Officer provides regular reports directly to the Risk Committee and twice per year to the Audit Committee.

Board Attendance

The Board of Directors held 15 meetings in 2017.  Each of the directors attended at least 75% of the total number of meetings of the Board and each committee on which the director served.

M&T’s Corporate Governance Standards encourage all members of the Board of Directors to attend its Annual Meeting of Shareholders, absent exigent circumstances.  Of the nominees standing for election at the Annual Meeting, 14 were elected at the 2017 Annual Meeting of Shareholders and each of those directors attended that meeting, except for Mr. Salamone, who had a death in his family.

Communications with the Board of Directors

Any shareholder or other interested party wishing to communicate with the Board of Directors or any individual director may submit his or her written correspondence to M&T Bank Corporation’s Corporate Secretary, One M&T Plaza, Buffalo, New York 14203.  The Corporate Secretary may facilitate direct communications to the Board, the lead independent director, the non-management directors as a group, or individual directors, by reviewing and summarizing such communications.

 

 

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Board Committees and Member Composition During 2017

 

Committee Member

Audit

Executive

Nomination,

Compensation

and Governance

Risk

Brent D. Baird(1)

 

Chairman

 

C. Angela Bontempo

Chair

Financial Expert

 

 

 

Robert T. Brady(1)

 

 

T. Jefferson Cunningham III

 

 

 

Risk Management

Expert

Gary N. Geisel

 

 

Risk Management

Expert

Richard S. Gold(2)

 

 

 

 

Richard A. Grossi

Financial Expert

 

 

 

John D. Hawke, Jr.

 

 

 

Chairman

René F. Jones(1)

 

 

 

Richard H. Ledgett, Jr.

 

 

 

 

Newton P.S. Merrill

 

 

 

 

Melinda R. Rich

 

 

 

 

Robert E. Sadler, Jr.(1)

 

Chairman

 

Denis J. Salamone

 

 

 

John R. Scannell

 

 

 

 

David S. Scharfstein

 

 

 

Herbert L. Washington

 

 

 

Robert G. Wilmers(1)(3)

 

Chairman

 

 

 

(1)

On December 20, 2017, Mr. Jones was elected to the Board of Directors and the Executive Committee was reconstituted.  Messrs. Baird, Brady, Jones and Sadler were appointed as the members of the Executive Committee.  Mr. Sadler was appointed Chairman of the Executive Committee to succeed Mr. Wilmers.

 

(2)

Mr. Gold was elected to the Board of Directors on December 20, 2017.

 

(3)

Mr. Wilmers passed away on December 16, 2017.  He served as Chairman of the Executive Committee until his death.

Audit Committee

The Audit Committee has the authority and responsibility to engage and discharge the independent registered public accounting firm, pre-approve all audit and non-audit services to be provided by such firm, review the plan and results of the auditing engagement, review management’s evaluation of the adequacy of M&T’s system of internal controls over financial reporting, direct and supervise investigations into matters within the scope of its duties, and perform the duties set forth in its written charter and such other duties as are required by applicable laws or securities exchange rules.  In addition, the Audit Committee serves as the Examining Committee for Wilmington Trust, N.A. and reviews the activities of the Examining Committee of M&T Bank.  Ms. Bontempo (Chair) and Messrs. Grossi, Salamone, Scharfstein and Washington served as members of the Audit Committee during 2017, and each currently serves as a member.  The Audit Committee held six meetings in 2017, including one joint meeting with the Risk Committee.

The Audit Committee is comprised solely of directors who are not officers or employees of M&T and who the Board has determined have the requisite financial literacy to serve on the Audit Committee.  The Board determined that no member of the Audit Committee has any material relationship with M&T that might interfere with the exercise of the member’s independent judgment and that each member meets the standards of independence established by the SEC and the NYSE.  In addition, the Board of Directors has determined that at least one member of the Audit Committee meets the NYSE standard of having “accounting or related financial management expertise.”  The Board, based upon the

 

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recommendation of the NCG Committee, after reviewing all relevant facts and circumstances, determined that Ms. Bontempo and Mr. Grossi each is an “audit committee financial expert.”  

The Audit Committee is governed by a written charter approved by the Board of Directors.  The Audit Committee Charter is available on M&T’s website at www.ir.mandtbank.com/corpgov.cfm.

Executive Committee

The Board of Directors has empowered its Executive Committee to act when the Board of Directors is not in session, during which time the Executive Committee possesses all of the Board’s powers in the management of the business and affairs of M&T Bank Corporation, except as otherwise limited by law.  Messrs. Wilmers (Chairman), Baird and Brady served as members of the Executive Committee during 2017.  On December 20, 2017, following the death of Mr. Wilmers, the Board of Directors reconstituted the Executive Committee and Messrs. Sadler (Chairman), Baird, Brady and Jones were appointed as the members of the Executive Committee, and each currently serves as a member.  The Executive Committee did not meet in 2017.  

The Executive Committee is governed by a written charter approved by the Board of Directors.  The Executive Committee Charter is available on M&T’s website at www.ir.mandtbank.com/corpgov.cfm.

Nomination, Compensation and Governance Committee

The Nomination, Compensation and Governance Committee is responsible for evaluating the efforts of M&T and of the Board of Directors to maintain effective corporate governance practices and identifying candidates for election to the Board of Directors.  In addition, the NCG Committee is responsible for administering M&T’s equity compensation plans and awarding grants thereunder.  It administers various equity and incentive plans, including the M&T Bank Corporation Annual Executive Incentive Plan, the M&T Bank Corporation 2005 Incentive Compensation Plan, the Directors’ Stock Plan, the M&T Bank Corporation 2009 Equity Incentive Compensation Plan (“Equity Incentive Compensation Plan”) and the M&T Bank Corporation Employee Stock Purchase Plan.  The NCG Committee recommends the remuneration and benefits of directors and Section 16 reporting officers of M&T and its subsidiaries.  It is also responsible for reviewing with management the Compensation Discussion and Analysis (“CD&A”) and providing a report recommending to the Board of Directors whether such CD&A should be included in the proxy statement.  Messrs. Baird (Chairman), Brady and Geisel served as members of the NCG Committee throughout 2017, and each currently serves as a member.  The NCG Committee held eight meetings in 2017.

The NCG Committee considers nominees for director that are recommended by various persons or entities, including, but not limited to, non-management directors, the Chief Executive Officer and other executive officers of M&T, and shareholders.  In evaluating all nominees for director, including those recommended by shareholders, the NCG Committee considers whether each nominee has all the requisite experience, attributes and qualifications for board membership and not just certain specific qualities or skills. In addition, the NCG Committee takes into account any contractual rights that persons or entities have with respect to nominees for director.  

In considering nominees for director, including those recommended by shareholders, the NCG Committee reviews the qualifications and independence of the potential nominee in light of the composition of the current Board of Directors and its various committees.  This assessment includes, among other considerations, the potential nominee’s qualification as independent, diversity, age, skills,

 

 

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experience, tenure, contribution and appropriate geographic balance in the context of the needs of the Board of Directors and its committees.

The NCG Committee will consider candidates nominated by shareholders that are properly submitted in writing to M&T’s Corporate Secretary at One M&T Plaza, Buffalo, New York 14203 and received no later than 120 days prior to the anniversary of the date on which M&T first mailed its proxy materials for the preceding year’s Annual Meeting of Shareholders.  For the 2019 Annual Meeting of Shareholders, M&T’s Corporate Secretary must receive those nominations on or before November 7, 2018.

The NCG Committee is comprised solely of directors who are not officers or employees of M&T.  The Board determined that no member of the NCG Committee has any material relationship with M&T that might interfere with the exercise of the member’s independent judgment and that each member meets the standards of independence established by the SEC and the NYSE.

The NCG Committee is governed by a written charter approved by the Board of Directors.  The NCG Committee Charter is available on M&T’s website at www.ir.mandtbank.com/corpgov.cfm.

Risk Committee

The Risk Committee assists the Board of Directors in its oversight of M&T’s risk management function, including the strategies, policies, procedures and systems established by management to identify, assess, measure and manage the major risks facing M&T.  In discharging its duties of risk oversight, the Risk Committee provides input to management on risk appetite, risk profile and regulatory requirements and approves the effectiveness of M&T’s risk management framework.  Messrs. Hawke (Chairman), Cunningham, Geisel and Sadler served as members of the Risk Committee throughout 2017, and each currently serves as a member.  The Risk Committee held 13 meetings in 2017, including one joint meeting with the Audit Committee.

Regulation YY promulgated by the Federal Reserve Board (“FRB”) in February 2014, requires that publicly traded bank holding companies with total consolidated assets of $50 billion or more must maintain a risk committee chaired by an independent director and by January 1, 2015, include at least one member meeting the FRB standards of experience in identifying, assessing and managing risk exposures of large, complex financial firms commensurate with the company’s structure, risk profile complexity, activities and size (a “risk management expert”). The Board, based upon the recommendation of the NCG Committee, after reviewing all relevant facts and circumstances, determined that Messrs. Cunningham and Geisel each is a “risk management expert.”  

The Risk Committee is governed by a written charter approved by the Board of Directors.  The Risk Committee Charter is available on M&T’s website at www.ir.mandtbank.com/corpgov.cfm.

 

 

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NOMINATION, COMPENSATION AND GOVERNANCE COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Baird (Chairman), Brady and Geisel served as members of the NCG Committee throughout 2017, and each currently serves as a member.  No individual who served as a member of the NCG Committee during 2017 was at any time an officer or employee of M&T or any of its subsidiaries.

The Board of Directors determined that all members of the NCG Committee are independent and have no financial or personal relationships with M&T requiring disclosure pursuant to the SEC rules (other than director compensation, equity ownership and transactions made in the ordinary course of business with its banking or other operating subsidiaries as described in this proxy statement).

 

 

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STOCK OWNERSHIP INFORMATION

The tables below set forth direct and indirect ownership of common stock and restricted common stock by each of our directors, each of the named executive officers, all directors and executive officers as a group, and by each person who is known to be the beneficial owner of more than 5% of M&T’s common stock as of February 28, 2018, together with the percentage of total shares outstanding represented by such ownership.

For purposes of these tables, beneficial ownership has been determined in accordance with the provisions of Rule 13d-3 of the Exchange Act, where, in general, a person is deemed to be the beneficial owner of a security if such person has or shares the power to vote or to direct the voting of the security or the power to dispose or to direct the disposition of the security, or if such person has the right to acquire the beneficial ownership of the security within 60 days.

Directors and Named Executive Officers Stock Ownership

 

Name of Beneficial Owner

Number of Shares

Percentage of Class

Brent D. Baird

 

31,681

 

 

*

C. Angela Bontempo

 

12,925

 

(1)

*

Robert T. Brady

 

16,615

 

(2)

*

T. Jefferson Cunningham III

 

23,852

 

(3)

*

Gary N. Geisel

 

20,742

 

 

*

Richard S. Gold

 

38,954

 

(4)

*

Richard A. Grossi

 

1,862

 

 

*

John D. Hawke, Jr.

 

5,828

 

 

*

René F. Jones

 

52,179

 

 

*

Richard H. Ledgett, Jr.

 

176

 

 

*

Newton P.S. Merrill

 

1,251

 

 

*

Melinda R. Rich

 

14,108

 

 

*

Robert E. Sadler, Jr.

 

112,347

 

(5)

*

Denis J. Salamone

 

163,897

 

(6)(7)

*

John R. Scannell

 

85

 

 

*

David S. Scharfstein

 

332

 

 

*

Herbert L. Washington

 

11,899

 

(8)

*

Darren J. King

 

57,317

 

(6)(9)(10)

*

Kevin J. Pearson

 

35,756

 

(9)

*

Doris P. Meister

 

1,142

 

 

*

Current directors and executive officers as a group (28 persons)

 

717,643

 

(6)(9)

*

 

 

*

Less than 1%

 

(1)

Includes 400 shares held by trusts for which Ms. Bontempo is a trustee and in which she has a pecuniary interest and investment power.

 

(2)

Includes 8,000 shares held by a charitable remainder annuity trust of which Mr. Brady and his spouse are co-trustees and of which Mr. Brady’s spouse is the current annuity beneficiary for the lesser of her life or 21 years.

 

(3)

Includes 12,574 shares held through client accounts at Magnolia Capital Management, Ltd., a registered investment advisory firm of which Mr. Cunningham is the Chief Executive Officer and controlling shareholder and over which he has dispositive and voting powers over such shares.  Mr. Cunningham has no pecuniary interest in such shares.

 

(4)

Includes 2.155 shares held jointly with a close relative of Mr. Gold.  Also includes 17 shares held indirectly as custodian for his son.

 

(5)

Includes 26,157 shares owned by the Sadler Family Foundation, a charitable foundation formed by Mr. Sadler.  Mr. Sadler is a trustee of the Sadler Family Foundation and holds voting and dispositive power over the shares owned by it. Also includes 33,993 shares owned by a close relative of Mr. Sadler.

 

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(6)

Includes the following shares subject to options granted under (a) M&T’s incentive compensation plans, and (b) plans of companies acquired by M&T, the obligations of which have been assumed by M&T and converted into options to receive shares of M&T common stock, all of which are currently exercisable or are exercisable within 60 days after February 28, 2018:  Mr. King – 10,000  shares; Mr. Salamone – 57,358 shares; and all directors and executive officers as a group – 67,358 shares.  Out-of-the-money options are included in the shares presented as beneficially owned to the extent they are currently exercisable or exercisable within 60 days after February 28, 2018.  

 

(7)

Includes 5,000 shares owned by the Salamone Family Foundation, a non-profit corporation formed by Mr. Salamone.  Mr. Salamone is a trustee of the Salamone Family Foundation and holds voting and dispositive power over the shares owned by it.

 

(8)

Includes 500 shares owned by a close relative of Mr. Washington.

 

(9)

Includes the following shares through participation in the M&T Bank Corporation Retirement Savings Plan: Mr. King – 2,267 shares; Mr. Pearson – 2,721 shares; and all directors and executive officers as a group – 17,646 shares.  Such individuals retain voting and investment power over their respective shares in the Retirement Savings Plan.

 

(10)

Includes 1,158 shares held indirectly as custodian for Mr. King’s children.

M&T Bank Corporation Insider Trading Policy

All of M&T’s directors, officers and employees are subject to M&T’s Insider Trading Policy which prohibits short-term trading in M&T’s securities, including but not limited to, the use of such strategies as exchange-traded options and the use of puts and calls, caps and collars and short sales.  This policy effectively serves as an anti-hedging policy.

The following table sets forth certain information with respect to all persons or groups known by M&T to be the beneficial owners of more than 5% of its outstanding common stock as of February 28, 2018.

Beneficial Owners Holding More Than 5% of M&T Bank Corporation’s Common Stock

 

Name and Address of Beneficial Owner

Amount and Nature of

Beneficial Ownership

 

 

Percentage of

Class

 

Vanguard Group, Inc.

100 Vanguard Blvd.

Malvern, PA 19355

 

14,132,091

 

(1)

 

9.52

%

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

 

10,307,904

 

(2)

 

6.94

%

State Street Corporation

One Lincoln Street

Boston, MA 02111

 

7,763,321

 

(3)

 

5.23

%

 

 

(1)

Vanguard Group, Inc. (“Vanguard”) filed an amended Schedule 13G with the SEC on February 9, 2018 reporting that it is deemed to be the beneficial owner of in excess of 5% of the outstanding shares of M&T common stock. Vanguard reported that it has sole voting power with respect to 203,979 of the indicated shares, shared voting power with respect to 28,677 of the indicated shares, sole dispositive power with respect to 13,904,406 of the indicated shares, and shared dispositive power with respect to 227,685 of the indicated shares.

 

(2)

BlackRock, Inc. (“BlackRock”) filed an amended Schedule 13G with the SEC on January 25, 2018 reporting that it is deemed to be the beneficial owner of in excess of 5% of the outstanding shares of M&T common stock. BlackRock reported that it has sole voting power with respect to 9,051,563 of the indicated shares and sole dispositive power with respect to all 10,307,904 of the indicated shares, which includes shares beneficially owned by certain subsidiaries of BlackRock.

 

(3)

State Street Corporation (“State Street”) filed a Schedule 13G with the SEC on February 14, 2018 reporting that it is deemed to be the beneficial owner of in excess of 5% of the outstanding shares of M&T common stock.  State Street reported that it has shared voting power and shared dispositive power with respect to all 7,763,321 of the indicated shares, which includes shares beneficially owned by certain subsidiaries of State Street.

 

 

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M&T is the sponsor of a number of employee benefit plans that hold an aggregate of 3,150,871 shares of M&T common stock as of February 28, 2018.  Its principal banking subsidiary, M&T Bank, has sole voting authority over 875,423 of these shares.  The remaining 2,275,448 shares of M&T common stock are voted by the trustee of the applicable employee benefit plan pursuant to the instructions of the participants in accordance with the terms of each such plan.  Certain of the directors and executive officers of M&T hold indirect beneficial interests in the holdings of these employee benefit plans.  See also footnotes (6) and (9) to the table set forth above titled “Directors and Named Executive Officers Stock Ownership.”

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Exchange Act, M&T’s directors and our Section 16 reporting officers, and persons who beneficially own more than 10% of M&T’s outstanding shares of common stock are required to report their beneficial ownership of the common stock and any changes in that beneficial ownership to the SEC and the NYSE.  M&T believes that these filing requirements were satisfied by all of its directors and Section 16 reporting officers during 2017.  In making the foregoing statement, M&T relied on copies of the reporting forms received by it or on the written representations from such reporting persons that no additional forms were required to be filed under the applicable rules of the SEC.

 

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TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS

During 2017, Mr. Wilmers was the beneficial owner of a 50% interest in an entity that is unaffiliated with M&T and which owns commercial aircraft that is leased to a commercial aviation service.  From time to time, M&T or its subsidiaries engaged the aviation service for air transportation services for business use by Mr. Wilmers.  In 2017, M&T paid $735,189 to the aviation service company for aircraft transportation costs.  M&T determined that the fees paid to the aviation service company for such business use are fair and competitive. 

Mr. Sadler entered into a two-year consulting agreement with M&T effective July 1, 2016, pursuant to which he was paid a consulting fee of $200,000 per year.  M&T and Mr. Sadler voluntarily terminated this agreement effective April 1, 2017.

Directors and executive officers of M&T and their immediate family members and affiliated entities are, and have been, customers of, and have had transactions with the banking and other operating subsidiaries of M&T, and additional transactions may be expected to take place in the future between such persons and M&T’s subsidiaries. Any financial services provided to directors, executive officers and their immediate family members and affiliated entities are offered in the ordinary course of business, upon substantially the same terms and conditions, including price, as we provide to similarly situated customers.  M&T’s subsidiary banks also extend credit to some of the directors and their immediate family members and affiliated entities.  All such extensions of credit outstanding at any time since January 1, 2017, comply with our policies and procedures and Federal Reserve Board Regulation O. All extensions of credit were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to M&T or its subsidiary banks, and did not involve more than the normal risk of collectability or present other unfavorable features.  As described in “Board Independence” under the section titled “CORPORATE GOVERANCE OF M&T BANK CORPORATION,” such related party or affiliate transactions are one factor considered by the Board of Directors in its review of director independence.

M&T’s Code of Business Conduct and Ethics, which is applicable to our directors, officers, advisors and employees, as well as to our agents and representatives, including consultants, requires that individuals avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner, and otherwise act with integrity and in the best interests of M&T.  The Code of Business Conduct and Ethics expects individuals to report any observed illegal or unethical behavior, and provides a retaliation-free reporting mechanism.  

 

 

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PROPOSAL 2

ADVISORY, NON-BINDING PROPOSAL TO APPROVE THE 2017 COMPENSATION OF M&T BANK CORPORATION’S NAMED EXECUTIVE OFFICERS

M&T Bank Corporation believes that its 2017 compensation policies and practices are centered on a pay-for-performance culture and are strongly aligned with the long-term interests of its shareholders, while reducing incentives for unnecessary and excessive risk taking.  Our executive compensation programs are described in detail in the sections titled “COMPENSATION DISCUSSION AND ANALYSIS” and “EXECUTIVE COMPENSATION.”

Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), enacted on July 21, 2010, requires that all U.S. public companies provide their shareholders with an advisory vote on the compensation of their named executive officers.  On January 25, 2011, the SEC adopted final rules implementing this requirement.  At each Annual Meeting of Shareholders since M&T’s 2011 Annual Meeting of Shareholders, the Board of Directors has provided shareholders with the ability to vote on the compensation of M&T’s NEOs.

This proposal, commonly known as a “say-on-pay” proposal, gives shareholders the opportunity to vote on the overall compensation program of M&T and specifically as it applies to the NEOs through the following resolution:

“RESOLVED, that the 2017 compensation paid to M&T Bank Corporation’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby approved.”

The shareholder vote on this matter is advisory, meaning that it will serve as a recommendation to the Board of Directors, but will not be binding.  The NCG Committee will consider the outcome of this vote when determining future executive compensation arrangements.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF
THE 2017 COMPENSATION OF M&T BANK CORPORATION’S NAMED EXECUTIVE OFFICERS.

 

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Named Executive Officers

This Compensation Discussion and Analysis provides information regarding the compensation of all individuals who served as M&T’s Chief Executive Officer (“CEO”) during 2017 and four other named executive officers (“NEOs”), which include, pursuant to Item 402 of Regulation S-K, M&T’s principal financial officer (“CFO”) and the three most highly compensated executive officers other than the CEOs and CFO.  The NEOs are members of our executive leadership team (“Management Group”).  For 2017, our NEOs were the following individuals:

 

 

 

Name

Title

Robert G. Wilmers(1)

Chairman

Chief Executive Officer

(through December 16, 2017)

René F. Jones(2)

Chairman

Chief Executive Officer

(appointment effective December 20, 2017)

Darren J. King

Executive Vice President

Chief Financial Officer

 

Richard S. Gold(3)

President

Chief Operating Officer

(appointment effective December 20, 2017)

Kevin J. Pearson(4)

Executive Vice President

Vice Chairman – M&T Bank

 

Doris P. Meister

Executive Vice President

Wealth Management

 

 

 

(1)

Mr. Wilmers passed away on December 16, 2017.

 

(2)

Mr. Jones began the year as Vice Chairman with oversight responsibilities of M&T’s Wealth and Institutional Services, Treasury and Human Resources divisions.  He served in that capacity until he was appointed CEO on December 20, 2017.

 

(3)

Mr. Gold began the year as Vice Chairman and Chief Risk Officer (“CRO”) with additional oversight responsibilities for M&T’s Legal Division. As of April 3, 2017, Mr. Gold moved out of the role of CRO and expanded his oversight responsibilities to include Retail Banking, Mortgage and Consumer Lending and Marketing divisions in addition to the Legal Division. On December 20, 2017 Mr. Gold was appointed President and Chief Operating Officer.

 

(4)

Mr. Pearson began the year as Vice Chairman with oversight responsibilities for M&T’s Commercial Banking and Credit divisions. As of April 3, 2017, Mr. Pearson’s oversight responsibilities expanded to include M&T’s Technology and Banking Operations divisions.

 

 

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Executive Summary

Overview of M&T Bank Corporation

 

M&T's vision is focused on long-term sustained performance.  We strive to consistently maintain a conservative risk profile and a strong financial position so we can maintain high levels of service to our customers and communities throughout economic cycles.

Our objectives include:

 

M&T Bank Corporation is a financial holding company that through its subsidiary banks offers a wide range of retail and commercial banking, trust, wealth advisory and investment services to its customers.  Founded in 1856, M&T strives to be the best company our employees work for, the best bank our customers ever do business with, and the best investment our shareholders ever make. M&T concluded 2017 as one of the 20 largest U.S. based commercial bank holding companies with over 775 domestic branches and 1,800 ATMs across our footprint.

 

Dedication to the creation and preservation of shareholder value

 

Conservative credit standards

 

Disciplined but opportunistic acquisition strategy

 

Focus on operating efficiency

2017 Performance Results and Executive Compensation Highlights

M&T’s 2017 financial performance met its business plan on several key metrics including net income, earnings per common share (“EPS”), and return on assets. M&T’s financial performance in 2017 reflected elevated expenses associated with pre-merger Wilmington Trust Corporation litigation matters. Excluding these legal-related expenses, operating expenses were well controlled. M&T’s total shareholder return (“TSR”) remains in the top quartile of its peer group over the long term (10-, 15- and 20-year periods). The executive compensation actions described on the following pages were taken in January 2018 related to 2017 performance, which includes the following highlights:

 

net operating return on average tangible assets and tangible common shareholders’ equity of 1.23% and 13.00%, respectively, compared to 1.14% and 12.25% in 2016;(1)

 

diluted earnings per share were $8.70, an increase of 12%;

 

net charge-offs totaled $140 million for the year (equal to 0.16% of average loans);

 

received a “Non-Objection” to the 2017 Capital Plan from regulators;

 

repurchased $1.2 billion of common stock and paid an additional $457 million of common dividends to our shareholders, in accordance with the 2016 and 2017 Capital Plans;

 

increased common dividends for the first time in more than nine years; and

 

recognized as the 8th largest Small Business Association lender in the U.S. and 4th largest in the eastern U.S.

 

(1)

For more information, see Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in M&T’s Form 10-K for the year ended December 31, 2017, filed with the SEC on February 22, 2018.

 

 

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Compensation Philosophy and Objectives

The objectives of M&T’s executive compensation programs are to attract talented staff, develop leaders and retain executive officers capable of maximizing performance for the benefit of M&T and its shareholders.  Our long-standing compensation philosophy is to emphasize long-term equity-based compensation for our NEOs.  This philosophy allows us to align our compensation with performance in the following important ways:

 

by explicitly linking the size of equity awards to be granted to the NEOs to the year over year performance of M&T;

 

by tying the NEOs’ ultimate realized compensation to the future value of M&T common stock, in alignment with our shareholders;

 

by balancing growth with prudent risk taking, through the use of performance-based restricted stock unit awards (“PSUs”) that only vest once certain levels of performance are met; and

 

through a culture of stock ownership and retention, including in accordance with M&T’s Stock Ownership Guidelines, resulting in each NEO having a substantial financial stake tied to the long-term performance of M&T.

Components of Executive Compensation

The components of executive compensation, described below, align with M&T’s philosophy to emphasize long-term equity-based compensation while providing executive compensation that will attract and retain executive officers capable of achieving M&T’s performance objectives.

 

Compensation Element

Objective

Determination of Award Levels & Key Features

Base Salary

Provides conservative pay reflective of an executive’s role, responsibilities and individual performance

Provides a fixed element

Scope of the executive’s responsibilities

Experience

Internal and external comparison

Past and expected future performance  

Short-Term:

Cash Incentive

(“STI”)

Provides discretionary annual incentive opportunity generally reflective of overall bank and individual performance

Pool funded based on a percent of net operating income (“NOI”)

Rewards NEOs based on:

corporate performance as reflected by financial results (including key metrics such as NOI, EPS, Return on Tangible Common Equity (“ROTCE”) and TSR)

achievement of annual performance objectives (financial and non-financial)

risk management and adherence to risk appetite

other key initiatives for the year

Long-Term:

Equity-Based Incentive

(“LTI”)

Provides discretionary equity-based incentive opportunity generally reflective of overall bank and individual performance

Aligns executives with the goal of sustained long-term shareholder value

Provides strong retention tool

Equity-based incentives awarded to NEOs in 2018 for 2017 performance are in the form of PSUs and stock options.

 

PSUs Key Features:

Vesting: 3 year period

Performance Measurement: Prior year ROTCE (rate established by the NCG Committee prior to the annual grant date)

Stock Options Key Features:

Vesting: 3 year annual pro-rata

Option Term: 10 years

 

Rewards NEOs based on a review of the following factors:

corporate performance relative to peers

absolute corporate performance for the immediately preceding year relative to the business plan

Long-term, sustained corporate performance

Peer compensation market data

 

 

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Roles and Responsibilities

M&T’s executive compensation programs are administered through the joint efforts of various constituents in an effort to ensure sound governance over compensation determinations.

Role of the NCG Committee

The NCG Committee is responsible for determining the compensation of the NEOs and then reviews such determinations with the full Board of Directors.  As discussed below, in determining the amount and mix of compensation to be paid to each NEO, the NCG Committee reviews the compensation levels of the NEOs relative to a group of commercial banking peers and considers the financial performance of M&T relative to that peer group as well as certain other factors, including M&T’s performance and relative shareholder return, compensation mix strategy, risk management and individual and corporate performance.

The NCG Committee’s responsibilities include:

 

annually reviewing and approving the corporate goals and objectives relevant to CEO compensation and evaluating the CEO’s performance in light of those goals and objectives;

 

annually reviewing and approving the base salaries and annual incentive opportunities of the NEOs;

 

annually reviewing and approving equity award opportunities of the NEOs; and

 

determining and approving the overall total direct compensation (“TDC”) determinations for the NEOs.

Additionally, the NCG Committee receives reports from the CFO and CRO regarding M&T’s financial performance and risk management performance, respectively, prior to finalizing TDC for the NEOs. The following table provides an overview of the executive compensation and governance related responsibilities of the NCG Committee. The NCG Committee’s independent compensation consultant participates in meetings throughout the year, as requested.

 

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Role of Independent Compensation Consultant

In 2017, the NCG Committee continued to retain the services of McLagan, an Aon Hewitt company. McLagan’s role is to provide analysis and advice to the NCG Committee relative to the amount and form of executive compensation, attend NCG Committee meetings, as requested, and advise the NCG Committee on market trends, regulatory issues and other developments that may impact M&T’s executive compensation programs.  In 2017, McLagan performed the following services for the NCG Committee:

 

reviewed the peer group used for compensation benchmarking for the NEOs;

 

conducted detailed market analysis on executive and director compensation relative to our peer group, including all elements of TDC, and advised on general industry pay practices;

 

advised the NCG Committee on setting NEO base salaries, annual cash incentives and long-term incentives, including the reasonableness of the levels of such compensation; and

 

advised the NCG Committee on regulatory issues which primarily focused on the Dodd-Frank Act.

 

 

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M&T also engaged McLagan to provide additional services.  Specifically, McLagan provided compensation consulting services to management during 2017 in an amount that did not exceed $120,000.  Management engaged McLagan for these services after consultation with the NCG Committee.  The NCG Committee determined that, based on an assessment of NYSE factors, McLagan was independent and that engagement of McLagan did not present any conflicts of interest.  McLagan also determined that it was independent from our management and confirmed this in a written statement delivered to the NCG Committee.

Role of the Chief Executive Officer and the President

The Chief Executive Officer and the President provide a performance assessment for the members of Management Group (including the other NEOs) and make compensation recommendations to the NCG Committee in this regard.  Ultimate decision-making authority for the compensation determinations for all NEOs, including the Chief Executive Officer and the President, however, lies solely with the NCG Committee.

Peer Group

On an annual basis, the NCG Committee compares compensation levels for each of the NEOs and M&T’s financial performance to a group of commercial banking institutions of similar business makeup, size and geographic reach.  M&T selected the ten commercial banking companies listed below using the group of U.S. based commercial bank holding companies having assets between $50 billion and $250 billion as of December 31, 2016, and removing those that had a significantly dissimilar business mix, or had a substantial international presence:

BB&T Corporation (BBT)

Citizens Financial Group, Inc. (CFG)

Comerica Incorporated (CMA)

Fifth Third Bancorp (FITB)

Huntington Bancshares Incorporated (HBAN)

KeyCorp (KEY)

PNC Financial Services Group, Inc. (PNC)

Regions Financial Corporation (RF)

SunTrust Banks, Inc. (STI)

Zions Bancorporation (ZION)

 

The 2017 peer group was expanded to include Citizens Financial Group, Inc. and continues to include PNC Financial Services Group, Inc., notwithstanding the fact that it is outside the asset size criterion, due to its similar business makeup and presence in many of the markets where M&T Bank conducts commercial banking activities.  

Benchmarking

Based on the analysis performed by McLagan in November 2017, the TDC of the NEOs relative to comparable executives employed by members of the peer group (in all cases using 2016 performance year compensation awards) were as follows:

 

TDC for Messrs. Wilmers, Jones (as Vice Chairman), King, Gold (as Vice Chairman) and Pearson was in the bottom quartile; and

 

TDC for Ms. Meister was approximately at the 75th percentile.

 

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After the appointments of Mr. Jones to the position of Chairman and CEO and Mr. Gold to the position of President and COO, the NCG Committee reviewed the benchmarking analysis previously prepared by McLagan relative to these new positions and made the pay determinations as outlined below. Based on this information, TDC for Messrs. Jones and Gold was in the bottom quartile for their respective new roles.

We provide a brief explanation of the factors used to determine each component of the NEOs’ compensation in the sections that follow.

Consideration of Shareholder Advisory Vote on Executive Compensation

The NCG Committee views the shareholder vote on executive compensation as an important expression of whether its shareholders agree with the NCG Committee’s decisions on aligning compensation with performance, particularly long-term performance.  In connection with the shareholder advisory vote at the 2017 Annual Meeting of Shareholders, 97.91% of the shares that were voted on that matter approved of the compensation of the NEOs.  The NCG Committee considered this to be a strong indication that other shareholders believe that the NEOs’ compensation is aligned with the performance of M&T.

2017 Compensation Determinations

Factors Considered in Making Determinations

The NCG Committee has traditionally based its compensation decisions on quantitative and qualitative measures, including net income, EPS, return on assets, various capital ratios, composition of earnings, asset quality relative to the banking industry, responsiveness to the economic environment, achievement of business plans, and TSR.  The NCG Committee assessed the performance of each NEO in light of the business plan, risk management and adherence to risk appetite, and relative to the performance of the firms in the peer group, the details of which are set forth under the heading “Individual Performance Assessments.”

The NCG Committee considers a number of factors specific to each executive’s role when determining the amount and mix of compensation to be paid.  These factors are briefly summarized in the table below:

 

Executive Officer

Factors Included Among NCG Committee Considerations

CEO

The NCG Committee, in consultation with the independent compensation consultant, determines the compensation for the CEO based upon its review of various corporate goals and objectives, consisting primarily of management’s annual business plan, which is approved by the Board of Directors.

NEOs other than the

CEO

Recommendations of the CEO and the President and other applicable members of Management Group, in consultation with the independent compensation consultant, and an assessment of individual performance.

All NEOs

 

Financial performance of M&T (on a “net operating” basis, as defined by M&T) over the most recent fiscal year and prior years;

Achievement of M&T, compared to its corporate, financial, strategic and operational objectives and business plans, and compared to the performance of the peer group firms;

Cumulative shareholder return;

Performance relative to risk management objectives; and

Compensation of comparable executives at the peer group firms.

 

 

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Individual Performance Assessments

 

Robert G. Wilmers

Chairman

Chief Executive Officer

(through 12/16/2017) 

 

 

As Chairman and Chief Executive Officer, Mr. Wilmers was responsible for M&T’s overall financial performance. M&T achieved its annual business plan for 2017. Mr. Wilmers’ continued focus on, and accountability to M&T’s key priorities has allowed M&T to continue to invest in its employees and optimize its business model, setting the stage for continued growth and success. In 2017, Mr. Wilmers signed the CEO Action for Diversity & Inclusion pledge, signaling M&T’s commitment to foster an inclusive environment for all employees.

René F. Jones

Chairman

Chief Executive Officer

(appointed 12/20/2017)

 

 

While serving as Vice Chairman in 2017, Mr. Jones’ oversight responsibilities included M&T’s Wealth and Institutional Services, Treasury and Human Resources divisions. Under his leadership, these divisions made significant investments in key infrastructure projects that will support future strategic initiatives. Mr. Jones also provided strategic guidance and support for M&T’s CCAR submission as well as for technology, systems and processes to streamline M&T’s financial reporting, risk and compliance infrastructure. Mr. Jones was appointed Chairman and Chief Executive Officer on December 20, 2017.

 

Darren J. King

Executive Vice President

Chief Financial Officer

 

In his first full year as Chief Financial Officer, Mr. King oversaw M&T’s continued growth (compared to peers) in net income and earnings per share. Under his leadership, M&T received a non-objection to its 2017 capital plan from the Federal Reserve.

Richard S. Gold

President

Chief Operating Officer

(appointed 12/20/2017)

 

 

While serving as Vice Chairman and Chief Risk Officer, Mr. Gold oversaw the buildout of M&T’s risk management infrastructure including the successful completion of all requirements of the Federal Reserve’s Written Agreement, which was terminated in July 2017. In April, Mr. Gold moved out of the role of CRO and expanded his oversight responsibilities to include the Business Banking, Retail Banking, Mortgage and Consumer Lending, Marketing and Legal divisions. Mr. Gold was appointed President and Chief Operating Officer on December 20, 2017.

Kevin J. Pearson

Executive Vice President

Vice Chairman – M&T Bank

 

 

While serving as Vice Chairman in 2017, Mr. Pearson’s oversight responsibilities included M&T’s Commercial Banking business, Credit, Technology and Banking Operation divisions. Under his leadership, M&T maintained its strong credit quality in 2017 and the Credit, Technology and Banking Operations divisions made significant enhancements to infrastructure and optimized critical processes.  

 


 

36

 

 


Doris P. Meister

Executive Vice President

Wealth Management

 

 

As Executive Vice President, Ms. Meister maintains overall responsibility for M&T’s Wealth Management businesses. Under her leadership, a strong senior leadership team was assembled to position the division for continued success and the division took critical foundational steps to bring together separate organizational units to position the division for enhanced profitability.

Base Salary

The NCG Committee made 2017 base salary determinations for the NEOs in January 2017.  At that time, given M&T’s performance in 2016 compared to both that of the peer group and its business plan and the individual performance of each of the NEOs, the NCG Committee determined that the base salaries for the NEOs should be as follows:

 

Named Executive Officer

2017 Base Salary

 

2016 Base Salary

 

 

Percentage

Change

 

Robert G. Wilmers

$

975,000

 

$

950,000

 

 

 

2.6

%

René F. Jones

$

745,000

 

$

725,000

 

 

 

2.8

%

Darren J. King

$

650,000

 

$

600,000

 

 

 

8.3

%

Richard S. Gold

$

745,000

 

$

725,000

 

 

 

2.8

%

Kevin J. Pearson

$

745,000

 

$

725,000

 

 

 

2.8

%

Doris P. Meister

$

800,000

 

$

-

 

(1)

-

 

 

(1)

Ms. Meister was not an NEO in 2016.

Annual Cash Incentives

The NEOs participate in annual cash incentive plans that provide for discretionary grants of cash awards to the NEOs as determined by the NCG Committee. Due to the discretionary structure of the plans, the NEOs do not have, and historically have not had, target levels of awards or stated goals and payout levels under those plans.  Consequently, the NCG Committee considered the following factors in making the award determinations in January 2018 for 2017 performance:  

 

the performance of M&T during 2017 relative to its business plan and relative to the peer group used for performance purposes;

 

the contribution of each of the NEOs to that performance;

 

compensation peer group market data for the roles occupied by each of the NEOs; and

 

effective risk management and adherence to M&T’s risk appetite statement.

 

 

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Based upon these factors, the NCG Committee determined that it was appropriate to award each of the NEOs a cash incentive for 2017 performance as follows:  

 

Named Executive Officer

Bonus Paid in 2018

for 2017 Performance(1)

 

Bonus Paid in 2017

for 2016 Performance

 

 

Percentage

Change

 

Robert G. Wilmers

$

600,000

 

$

340,000

 

 

 

76.5

%

René F. Jones

$

1,100,000

 

$

380,000

 

 

 

189.5

%

Darren J. King

$

530,000

 

$

400,000

 

 

 

32.5

%

Richard S. Gold

$

755,000

 

$

380,000

 

 

 

98.7

%

Kevin J. Pearson

$

755,000

 

$

400,000

 

 

 

88.8

%

Doris P. Meister

$

450,000

 

$

-

 

(2)

-

 

 

(1)

Notwithstanding M&T’s moderately strong financial performance in 2016, incentive compensation pools for 2016 were reduced due to elevated expenses. The decision was made to have executives bear the burden of these reductions.  Therefore, bonuses paid to each NEO in 2018, when compared to bonuses paid in 2017, reflect an increase resulting from restoration of the incentive pools to previous levels which can be attributed to an increase in 2017 performance.

 

(2)

Ms. Meister was not an NEO in 2016.

Equity-Based Incentives

Also consistent with its philosophy of linking compensation to M&T’s performance for the benefit of M&T’s shareholders, M&T provides long-term incentive opportunities to its executive officers through discretionary grants of equity-based compensation under the Equity Incentive Compensation Plan.  The NCG Committee determines the dollar value of equity awards to be made to the NEOs at its meeting in January of each year.  Following that meeting, the equity awards are granted on the last business day of January.  In granting of equity awards, the NCG Committee generally assesses the following factors:

 

the performance of M&T relative to prior years; and

 

the performance of M&T for the immediately preceding year relative to its business plan and the peer group used for performance purposes.

M&T reintroduced stock options for senior managers, including the NEOs, in 2018 and gave a portion of their 2018 equity award in the form of stock options.  Prior to 2007, M&T primarily granted stock options as its long term incentive vehicle.  Since entering the Troubled Asset Relief Program in 2009, M&T has used time- and performance-based restricted shares or units.  While there has been a shift away from the predominance of stock options over the last ten years, particularly in the financial services industry, they continue to play an important, albeit smaller, role in a balanced long-term incentive portfolio. M&T believes stock options create close alignment with shareholder experience, and due to their ten-year term, support the business strategy by providing a link to long-term business objectives and sustained long-term value creation.

 

PSUs were also granted in 2018, consistent with prior years, and represent the remaining portion of NEO equity awards.  M&T believes PSUs align executives with the goal of sustained long-term shareholder value, while at the same time serving as a retention tool.

 

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In summary, the equity awards granted to the NEOs on January 31, 2018 were in the form of stock options and PSUs. The equity awards granted on January 31, 2017 and January 29, 2016 were exclusively in the form of PSUs.

 

Named Executive Officer

2018 Equity Awards(1),(2)

 

2017 Equity Awards

 

Percentage Change 2018 vs. 2017

 

2016 Equity Awards

 

Percentage

Change 2017 vs. 2016

Robert G. Wilmers

$

-

 

$

1,457,000

 

 

0.0

%

$

1,675,000

 

 

-13.0

%

 

René F. Jones

$

2,500,000

 

$

1,044,000

 

 

139.5

%

$

1,200,000

 

 

-13.0

%

 

Darren J. King

$

900,000

 

$

750,000

 

 

20.0

%

$

750,000

 

 

0.0

%

 

Richard S. Gold

$

1,500,000

 

$

1,044,000

 

 

43.7

%

$

1,200,000

 

 

-13.0

%

 

Kevin J. Pearson

$

1,500,000

 

$

1,109,000

 

 

35.3

%

$

1,275,000

 

 

-13.0

%

 

Doris P. Meister

$

1,000,000

 

$

871,000

 

 

14.8

%

$

-

 

 

0.0

%

(3)

 

(1)

The 2018 Equity Awards were split between PSUs and stock options as follows:  Mr. Jones - $1,875,000 in PSUs and $625,000 in stock options; Mr. King - $675,000 in PSUs and $225,000 in stock options; Mr. Gold - $1,125,000 in PSUs and $375,000 in stock options; Mr. Pearson - $1,125,000 in PSUs and $375,000 in stock options; Ms. Meister - $750,000 in PSUs and $250,000 in stock options.

 

(2)

Notwithstanding M&T’s moderately strong financial performance in 2016, equity compensation pools for 2016 were reduced due to elevated expenses. The decision was made to have executives bear the burden of these reductions.  Therefore, equity awarded to each NEO in 2018, when compared to equity awarded in 2017, reflects an increase resulting from restoration of the equity compensation pools to previous levels which can be attributed to an increase in 2017 performance.

 

(3)

Ms. Meister was not an NEO in 2016.

Perquisites

Generally, M&T provides limited perquisites to its NEOs.  The perquisites that are provided are designed to assist NEOs in being productive and are limited to those that management and the NCG Committee believe are consistent with M&T’s overall compensation philosophy.  Given the importance of developing business relationships for M&T’s success, the NEOs are reimbursed for certain initiation fees and dues they incur for club memberships deemed advisable for business purposes, tax preparation, parking, meals and executive physical examinations.

Retirement and Other Benefits

M&T maintains two tax-qualified retirement plans for its employees, one a defined benefit plan and the other a defined contribution plan.  Each of the NEOs participates in the defined benefit plan, except for Messrs. Jones and King, who have elected to have their benefit under the defined contribution plan.  Messrs. Jones and King made this election pursuant to a one-time election that was offered to all participants in the defined benefit plan in late 2005 to remain in the defined benefit plan and earn future benefits under a new reduced benefit formula or to retain the frozen benefit in the defined benefit plan and earn future benefits under a new defined contribution plan beginning January 1, 2006.

In addition, M&T maintains nonqualified defined benefit and defined contribution retirement plans to supplement retirement benefits for the NEOs in order to make up for benefits that cannot otherwise be provided in the qualified plan due to Internal Revenue Service limits; however, total compensation recognized for this purpose is capped at $350,000.  The nonqualified plans are not funded, except as benefits are actually paid to executive officers upon retirement.  Additional information regarding these retirement plans and arrangements is provided in the sections titled “Pension Benefits” and “Nonqualified Deferred Compensation.”

 

 

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M&T does not believe it is appropriate to provide the NEOs with severance packages beyond what is provided to employees of M&T, generally.  Consequently, the NEOs have historically participated in the M&T Bank Corporation Severance Pay Plan (“Severance Pay Plan”), which provides for post-employment severance payments that are tiered based upon an employee’s position and years of service, and the continuation of certain employee benefits.  Upon a “Qualifying Event” (defined in the Severance Pay Plan as any permanent, involuntary termination of a participant’s active employment as a result of a reduction in force, restructuring, outsourcing or elimination of position), an NEO would be entitled to benefits under the Severance Pay Plan.

Other than benefits that are generally available to employees, M&T does not maintain any individual severance or change-in-control arrangements.  M&T’s compensation plans do not contain payments or benefits to NEOs that are specifically triggered by a change-in-control, except that M&T’s Equity Incentive Compensation Plan provides that, upon a change-in-control, all employees, including the NEOs, would become fully vested in any outstanding awards that were not already vested.  M&T has elected to provide such acceleration because of a belief that the principal purpose of providing executive officers and other employees with equity incentives is to align their interests with those of M&T’s shareholders and that this alignment should be enhanced, not weakened, in the context of a change-in-control.  Accelerating the vesting of equity-based compensation upon a change-in-control allows employees the same opportunity as other shareholders to sell shares freely following the completion of the transaction and realize the economic benefits of such transaction, without forcing them to be exposed to the post-closing performance of the acquirer.

Summary of 2018 Executive Compensation Determinations

The supplemental chart below shows the mix of annual base salary, annual cash incentive and equity awards approved by the NCG Committee for each NEO in January 2018:

 

 

 

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The NCG Committee made 2018 base salary determinations for the NEOs in January 2018.  Given M&T’s performance in 2017, compared to both that of the peer group and its business plan, the salaries of M&T’s NEOs relative to our peer group, the individual performance of each of the NEOs as discussed above, and the appointment of Mr. Jones as Chairman and CEO, the NCG Committee determined that the salaries for Messrs. Gold and Pearson and Ms. Meister should remain unchanged for 2018 and that the salaries for Messrs. Jones and King should be increased for 2018 as follows:

 

Named Executive Officer

2018 Base Salary

2017 Base Salary

 

Change

 

Percentage Change

 

René F. Jones

$

900,000

 

 

$

745,000

 

$

155,000

 

 

21

%

Darren J. King

$

670,000

 

 

$

650,000

 

$

20,000

 

 

3

%

 

Sound Compensation and Governance Practices

M&T’s executive compensation programs are managed in consideration of the Interagency Guidance on Sound Incentive Compensation Policies and other regulatory requirements.  In light of these requirements, M&T has adopted certain governance practices, which are more fully described below.

Stock Ownership Guidelines

M&T’s philosophy has been to foster a culture for its NEOs to acquire and retain M&T common stock.  However, M&T implemented formal Stock Ownership Guidelines for our Management Group in order to further align the interests of our executive officers with those of our shareholders.  The Stock Ownership Guidelines mandate that executive officers own a significant amount of common stock measured as a multiple of base salary as follows (see table set forth above titled “Directors and Named Executive Officers Stock Ownership” for the actual number of shares owned by the NEOs):

 

Chairman and Chief Executive Officer – five times annualized base salary;

 

other NEOs – three times annualized base salary; and

 

other members of Management Group – two times annualized base salary.

M&T requires its executive officers to achieve the targeted stock ownership levels within five years of being promoted or named to the applicable executive officer position, or the effective date of the Stock Ownership Guidelines, whichever is later.  Shares counted toward these guidelines include any shares held by the executive directly or through a broker, shares held through an M&T Retirement Savings Plan, and shares held as restricted stock, restricted stock units, or restricted stock awards, whether vested or unvested.  Unexercised stock options do not count. If a Management Group member fails to meet the requirements of this policy, the individual must hold all shares acquired from stock option exercises and restricted stock grants, net of shares withheld for taxes or payment of exercise price, until they meet the holding requirement of the Stock Ownership Guidelines.  As of the date of this proxy statement, all Management Group members are in compliance with the Stock Ownership Guidelines.

Forfeiture Policy

M&T’s Forfeiture Policy sets forth the circumstances under which the NCG Committee may cause a downward adjustment in current year compensation as well as cause all or part of unvested equity awards to be cancelled.  Such circumstances include, but are not limited to, action or inaction on the part of an employee that results in a significant loss event (either to M&T as a whole or to a significant business line), a restatement of the financial statements due to material noncompliance with applicable financial reporting requirements, or a violation of M&T’s risk policies or procedures.

 

 

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Discretionary Incentive Award Guidelines

Notwithstanding the discretionary nature of the incentive awards granted to the NEOs, M&T formalized guidelines that are to be considered when making incentive award determinations in order to strengthen the link between such awards and M&T’s performance, including creation of shareholder value, as well as consideration of risk management metrics.

Incentive Compensation Governance

M&T works continuously to ensure effective controls are in place for its incentive compensation programs. As part of M&T’s enhanced enterprise risk framework, control functions, including Human Resources, Finance, Compliance, Legal, Internal Audit, and Risk Management, are actively involved in the oversight of M&T’s incentive compensation programs. In addition, M&T’s CRO meets with the NCG Committee to discuss M&T’s risk scorecard, which details the CRO’s assessment of risk management at M&T.

Active and effective oversight of M&T’s incentive compensation practices is also provided by the NCG Committee. The NCG Committee is responsible for maintaining M&T’s Forfeiture Policy and determining the appropriate pay mix and total compensation for M&T’s NEOs.  Additionally, the NCG Committee is responsible for establishing the appropriate performance measure for PSUs.  The NCG Committee shares one member with the Risk Committee which helps to ensure the prioritization of risk management matters in incentive compensation determinations.

Enhanced Ability to Adjust Compensation in the Event of an Adverse Risk Outcome

Working together, the components of the executive compensation programs continue to drive alignment of our NEOs’ interests with those of our shareholders, are consistent with the safety and soundness of M&T, and provide an enhanced ability to account for the duration of risks and adjust compensation in the event of adverse risk outcomes.

Tax Matters

Internal Revenue Code Section 162(m) and related regulations in effect for 2017 generally impose a $1 million cap on the deductibility of compensation paid to certain executive officers of a publicly held corporation, subject to certain exceptions.  One exception is for “performance-based compensation” paid under shareholder approved plans.  The executive officers to whom Section 162(m) applies for 2017 includes M&T’s Chief Executive Officer and the next three most highly compensated executive officers (other than the Chief Financial Officer).  The PSUs that were awarded to Messrs. Wilmers, Gold and Pearson in January, 2015, January 2016 and January 2017, and the PSUs that were awarded to Mr. Jones in January 2017 are intended to be deductible under Section 162(m) pursuant to the performance-based compensation exception.  The cash incentive awards paid to the then-NEOs for 2015, 2016 and 2017 performance (except for the CFO) are also intended to be deductible under Section 162(m) pursuant to this exception.  While the NCG Committee considers the desirability of limiting M&T’s non-deductible expenses as one factor when it makes compensation determinations, the NCG Committee believes in preserving its ability to award compensation to the NEOs that is not deductible under Section 162(m) for competitive purposes when it is in the best interest of M&T, although the NCG Committee has taken action in recent years to maximize the deductibility of compensation awarded to the NEOs as performance-based compensation. The “Tax Cuts and Jobs Act” enacted in December 2017 generally amended Section 162(m) to eliminate the performance-based compensation exception and expand the pool of includable executive officers to include the CFO for 2018.

 

42

 

 


NOMINATION, COMPENSATION AND GOVERNANCE COMMITTEE REPORT

The Nomination, Compensation and Governance Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of SEC Regulation S-K with management.  Based on such review and discussions, the Nomination, Compensation and Governance Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

This report was adopted on February 21, 2018 by the Nomination, Compensation and Governance Committee of the Board of Directors:

Brent D. Baird, Chairman

Robert T. Brady

Gary N. Geisel

 

 

 

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EXECUTIVE COMPENSATION

The following table contains information concerning the compensation of M&T’s NEOs in the fiscal years ended December 31, 2017, 2016 and 2015.

2017 Summary Compensation Table

 

Name and

Principal Position

Yr.

Salary

($)

Bonus

($)

Stock

Awards(1)

($)

Option

Awards

($)

Non-

Equity

In-

centive

Plan

Comp.

($)

Change in

Pension

Value and

Non-

Qualified

Deferred

Comp.

Earnings(2)

($)

All Other

Comp.(3),(4)

($)

Total

($)

Robert G. Wilmers(5)

2017

$ 958,077

$    600,000

$ 1,457,115

$       -

$         -

$   953,692

$    184,088

$    4,152,972

 

Chairman &

Chief Executive Officer

2016

    950,000

       340,000

    1,675,067

          -

            -

      352,353

       183,987

       3,501,407

 

(through December 16, 2017)

2015

    950,000

       425,000

    1,675,107

          -

            -

      460,688

       184,655

       3,695,450

 

René F. Jones

2017

$ 745,000

$ 1,100,000

$ 1,044,025

$       -

$         -

$     34,241

$    115,981

$    3,039,247

 

Chairman &

Chief Executive Officer

2016

    725,000

       380,000

    1,200,081

          -

            -

        14,200

       131,589

       2,450,870

 

(effective December 20, 2017)

2015

    700,000

       475,000

    1,175,053

          -

            -

                  -

       136,898

       2,486,951

 

Darren J. King(6)

2017

$ 650,000

$    530,000

$    750,098

$       -

$         -

$     13,961

$      88,193

$    2,032,252

 

Chief Financial Officer

2016

    600,000

       400,000

       750,105

          -

            -

          5,795

         85,763

       1,841,663

 

 

2015

                -

                   -

                   -

          -

            -

                  -

                  -

                      -

 

Richard S. Gold

2017

$ 745,000

$    755,000

$ 1,044,025

$       -

$         -

$   162,746

$      99,343

$    2,806,113

 

President

2016

    725,000

       380,000

    1,200,081

          -

            -

        88,348

       104,715

       2,498,144

 

Chief Operating Officer

2015

    675,000

       475,000

    1,175,053

          -

            -

        36,809

       101,362

       2,463,224

 

Kevin J. Pearson

2017

$ 745,000

$    755,000

$ 1,109,053

$       -

$         -

$   174,938

$ 1,044,113

$    3,828,104

 

Executive Vice President

2016

    725,000

       400,000

    1,275,003

          -

            -

        92,460

       377,229

       2,869,692

 

 

2015

    675,000

       500,000

    1,175,053

          -

            -

        32,680

       114,903

       2,497,636

 

Doris P. Meister(6)

2017

$ 800,000

$    450,000

$    871,050

$       -

$         -

$               -

$      48,196

$    2,169,246

 

Executive Vice President

2016

                -

                   -

                   -

          -

            -

                  -

                  -

&