2021 Peer Group
The 2021 peer group was determined using a similar approach, and excluded IBERIABANK Corporation, which was acquired by First Horizon National Corporation, and Keycorp because their assets exceeded three times that of TCF’s and thus was no longer comparable based on key metrics. We added South State Corporation, Webster Financial Corporation, and Wintrust Financial Corporation to our peer group since those peers met TCF’s qualitative and quantitative criteria for the 2021 peer group:
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2021 Peer Group
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• Associated Banc-Corp
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• First Horizon National Corporation
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• South State Corporation
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• BankUnited, Inc.
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• First Republic Bank
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• Synovus Financial Corp.
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• CIT Group Inc.
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• Huntington Bancshares Incorporated
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• Valley National Bancorp
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• Comerica Incorporated
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• M&T Bank Corporation
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• Webster Financial Corporation
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• East West Bancorp, Inc
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• People’s United Financial, Inc.
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• Wintrust Financial Corporation
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• F.N.B. Corporation
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• Regions Financial Corporation
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• Zions Bancorporation, N.A.
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• First Citizens BancShares, Inc.
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Our total assets as of December 31, 2020 were slightly below the median of the 2021 peer group while our total revenue in 2020 was above the median of the 2021 Peer Group, as shown below. Total assets for the 2021 peer group ranged from $32.6 billion to $147.4 billion while total revenue ranged from $0.9 billion to $6.3 billion.
(Source: S&P Global Market Intelligence)
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Compensation of Named Executive Officers
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The compensation of our NEOs primarily consists of base salary, annual cash incentives and long-term equity awards. The amount and mix of these elements are individually calibrated to each executive based on his or her level of responsibility and expected impact on our results. Executives also participate in our retirement plans, and may receive discretionary awards to recognize extraordinary performance as approved by the Compensation Committee. Each component of compensation is intended to accomplish one or more of the compensation objectives discussed below.
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Compensation Component
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Objective
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Determination
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Base Salary
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Provide a measure of income stability competitive with organizations of comparable size and complexity to allow executives to focus on the execution of our strategic goals and to attract and retain highly qualified NEOs.
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The Compensation Committee reviews base salary market practices at least annually through the use of a peer group comparative analysis prepared by its compensation consultant. The Compensation Committee reviews the base salaries of the NEOs individually and uses a variety of peer data in determining salary levels.
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Annual Cash Incentive Awards
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Designed to (i) encourage, recognize and reward achievement of annual corporate financial metrics and individual performance objectives, (ii) reward NEOs for shareholder value creation, and (iii) align NEO and shareholder interests.
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Annual cash incentive awards are set based on predetermined performance metrics. The performance metrics are based on one or more performance criteria chosen by the Compensation Committee from a list of measures set forth in the annual incentive plan, with the Compensation Committee retaining discretion over the final payments made.
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Long-Term Equity Incentive Awards
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Designed to reward NEOs for shareholder value creation, to align NEO and shareholder interests, and to retain and motivate talented NEOs. Long-term incentives are equity-based and are provided under shareholder-approved plans that permit us to grant a variety of equity-based awards, including restricted stock, restricted stock units, and stock options.
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Long-term incentives are generally determined using a formula-based approach further described below under “Compensation of Named Executive Officers – NEO Pay Determinations – 2020 Long-Term Equity Compensation.” The size, form and performance criteria, if any, of long-term incentive awards are determined by the Compensation Committee based on a number of factors, including its evaluation of market practice, base salary, length of service, responsibilities of the NEO, ownership of TCF common stock and the quantity, amount, and vesting schedule of previous grants.
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NEO Pay Determinations
In overseeing executive compensation, the Compensation Committee seeks to construct a compensation structure that will attract and retain highly qualified executives by providing compensation that is competitive relative to those companies with which we compete for executive talent. The Compensation Committee also believes strongly in linking compensation paid to each NEO to performance.
In determining compensation, the Compensation Committee considers a number of factors, including, among others, overall performance in the areas of scope of responsibility, management and communication skills, department objectives, leadership qualities, innovation and creative abilities, risk controls and difficulties encountered in achieving results, as well as specified corporate financial metrics. The Compensation Committee uses competitive market data as a reference point when setting each component of compensation and target compensation levels, but ultimately uses its own business judgment and expertise to determine the appropriate components and levels of compensation for our executive officers, including the NEOs. After evaluating these factors and taking the Chief Executive Officer’s recommendations into consideration, the Compensation Committee establishes base salary levels, annual cash incentive opportunities and long-term incentive awards for each NEO other than the Chief Executive Officer. A similar process is followed by the Compensation Committee in determining the Chief Executive Officer’s compensation.
Base Salary
The Compensation Committee generally attempts to set base salaries at levels which it believes are appropriate to attract and retain highly qualified executives using data provided by its compensation consultant and other sources, as appropriate. When determining the base salaries under each executive’s employment agreement, the Compensation Committee considered a variety of factors for each executive, including:
•individual performance, skills and achievements;
•level of experience and corresponding current compensation, if applicable; and
•ability to contribute to our performance.
2020 Annual Cash Incentive Plan
We provide an annual cash-based incentive plan in which our executive officers participate because we believe it is a critical tool for:
•holding executive leadership accountable for the financial results of the organization;
•rewarding and reinforcing the behaviors and achievements that produce positive financial results; and
•hiring and retaining the best executive talent in the banking industry.
Under our annual incentive plan, each year the Compensation Committee selects eligible executives who will participate in the annual incentive plan and sets the amount of each participant’s threshold, target and maximum amounts that can be paid under the annual incentive plan, determined as a percentage of the participant’s base salary. The Compensation Committee also establishes one or more performance measures and a formula to determine the amount of the award that will be earned at different levels of achievement of the performance measures, while retaining discretion as to the amount of the final payments made pursuant to the awards. For 2020, the Compensation Committee set the potential incentive payment, expressed as a percentage of base salary, as follows:
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Name
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Salary
($)
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Threshold (% of salary)
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Threshold Incentive Payment ($)
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Target (% of salary)
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Target Incentive Payment ($)
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Maximum (% of salary)
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Maximum Incentive Payment ($)
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David T. Provost(1)
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950,000
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50%
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475,000
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100%
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950,000
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200%
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1,900,000
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Craig R. Dahl(2)
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1,050,000
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50%
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525,000
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100%
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1,050,000
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200%
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2,100,000
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Brian W. Maass
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575,000
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45%
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258,750
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90%
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517,500
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180%
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1,035,000
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Dennis L. Klaeser(3)
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750,000
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40%
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300,000
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80%
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600,000
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160%
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1,200,000
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Gary Torgow
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950,000
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50%
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475,000
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100%
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950,000
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200%
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1,900,000
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Thomas C. Shafer
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950,000
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50%
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475,000
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100%
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950,000
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200%
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1,900,000
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Michael S. Jones
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665,000
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45%
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299,250
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90%
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598,500
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180%
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1,197,000
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(1)Pursuant to his employment agreement entered into upon being hired as Chief Executive Officer on October 28, 2020, Mr. Provost was not eligible to receive an annual incentive award for fiscal year 2020.
(2)Mr. Dahl did not receive a payment pursuant to the annual incentive plan due to his departure from TCF on October 27, 2020.
(3)Mr. Klaeser received a pro-rated payment under the annual incentive plan in connection with his retirement on October 1, 2020 pursuant to his letter agreement.
2020 Performance Metrics
Annual Incentive Plan Metrics
Under the annual incentive plan, the Compensation Committee is responsible for establishing the corporate and individual performance measures that, when compared to actual results, determine the amount of payout that is earned with respect to the annual incentive plan. In setting these goals, the Compensation Committee considers a number of factors, including our annual budget, our short- and long-term business strategy, and investor performance expectations. In the first quarter of 2020, the Compensation Committee determined that the performance measures under the annual incentive plan for each NEO would consist of corporate financial metrics weighted at 80% and individual performance metrics weighted at 20%.
The 2020 corporate financial metrics, weighted at 80%, were (a) adjusted earnings per share (weighted at 75% of the corporate metrics), and (b) adjusted efficiency ratio (weighted at 25% of corporate metrics). The Compensation Committee believed these metrics reflect the most reliable, comprehensive financial indicators of our performance relative to our key 2020 strategic priorities of increasing profitable loan growth and improving our operating efficiency. The corporate financial metrics were set at levels representing growth and improvement over 2019, and generally corresponded to our budgeted financial plan established prior to the start of the COVID-19 pandemic, which negatively impacted our 2020 financial results.
The Compensation Committee established threshold, target and maximum performance goals for each of the two corporate financial metrics for 2020, with threshold representing the minimum level of performance for which the executive officer would earn a payment. For performance below the threshold level for one of the corporate financial metrics, the executive officer would not earn a payment for that metric; however, each metric is independently evaluated for purposes of determining payments. Maximum represents the level of performance required to achieve the maximum payment on each of the metrics. If performance exceeds the maximum level for any corporate or individual performance metric, the executive officer will not earn a further incentive above the maximum incentive for such metric. Actual performance between threshold, target and maximum performance levels is interpolated linearly to determine the exact level of achievement.
The Compensation Committee measured individual performance based on non-formulaic achievements, such as the implementation of actions to achieve revenue growth and profitability, managing TCF’s response to COVID-19, natural disasters and civil unrest in markets, implementing work-from-home transitions, managing liquidity and credit in light of the volatile economic environment, managing the TCF/Chemical merger integration process including TCF’s systems conversion, executing our planned merger with Huntington, improving practices related to risk management, engaging in leadership development, and continuing to build the TCF brand and culture.
2020 Annual Incentive Payments
Our annual incentive plan, in which each of our NEOs except for Mr. Provost participated, included corporate performance metrics of adjusted earnings per share and adjusted efficiency ratio. Given that financial goals for fiscal 2020 were set based on our 2020 budget prior to the start of the COVID-19 pandemic, they quickly became outdated and did not reflect our evolving corporate financial performance expectations as the pandemic progressed. As such, our pre-pandemic financial goals established for 2020 were not met, and the Compensation Committee determined in January 2021 to adjust our corporate performance metrics to account for the impact of Covid-related reserve changes and for severance expenses related to executive separations from TCF.
The Compensation Committee determined that we achieved the corporate metrics of $3.71 in adjusted earnings per share, and a 59.87% adjusted efficiency ratio, resulting in a payout of 55% of target, as shown in the following table:
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Assigned Weight
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2020 Corporate Goal Levels (% payout opportunities)
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2020 Actual Performance
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Weighted Average Achievement
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Threshold (50%)
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Target (100%)
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Maximum (150%)
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Performance
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% of Target
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Adjusted Earnings Per Share(1)
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75%
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$3.69
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$4.10
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$4.51
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$3.71
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52.4%
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39.3%
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Adjusted Efficiency Ratio(2)
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25%
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60.5%
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58.0%
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56.5%
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59.87%
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62.6%
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15.7%
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TOTAL
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100%
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55%
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(1)Adjusted Earnings Per Share under our annual incentive plan is our reported net income, excluding (a) merger-related expenses, (b) allowance rate for credit losses in excess of those budgeted, and (c) expenses related to unplanned executive departures.
(2)Adjusted Efficiency Ratio under our annual incentive plan is our reported efficiency ratio, excluding expenses related to TCF/Chemical merger expenses, operating lease depreciation, intangibles, historic tax credit and unplanned executive departures.
The Compensation Committee believed that because of the extraordinary events of 2020, including the COVID-19 pandemic, TCF’s financial results did not fully reflect the many significant accomplishments of TCF management, including successfully implementing CECL credit loss accounting and responding immediately to the COVID-19 pandemic, civil unrest and natural disasters in key markets by supporting customers and team members and providing significant donations to our communities in need. In addition, management ensured we had sufficient liquidity and capital in light of the new economic environment. The Compensation Committee took note of the fact that TCF’s first quarter 2020 performance was on plan with loan growth exceeding the budget for January and February and with a growing loan pipeline. To properly reward executives for these achievements, and to ensure retention of executive talent in the face of circumstances like the proposed Huntington merger, the Compensation Committee exercised positive discretion and determined to make awards under the annual incentive plan at 90% of target for each executive other than Mr. Torgow as described below.
The Compensation Committee determined that Messrs. Maass, Shafer and Jones each achieved 90% of his individual performance metrics, resulting in total annual incentive payments of 90% of his base salary, as set forth in the table below. The Compensation Committee took into account the significant achievements of each executive and the fact that this level of payout was in line with our peers in the banking industry. The Compensation Committee reviewed Mr. Torgow’s performance in 2020, including his stewardship of TCF through its executive personnel changes, the post-merger integration following the TCF/Chemical merger, and the identification and negotiation of the Huntington merger, and determined that Mr. Torgow’s exemplary performance and the fact that he did not receive a retention award following the TCF/Chemical merger justified an award of maximum performance for his individual performance metrics, as well as the application of positive discretion to Mr. Torgow’s annual incentive payment resulting in a total award for Mr. Torgow of $1.5 million as set forth below.
The following table reflects amounts earned and actually paid under our annual incentive plan to those NEOs who participated in, and received payments under, our annual incentive plan in 2020.
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Named Executive Officer(1)
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Performance Metrics
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Target Incentive
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Corporate
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Individual
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Potential Payout
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% of Salary
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Value(2)
($)
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Result
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Weight
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Result
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Weight
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% of Target
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Value ($)
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Discretion(3)
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Actual Payout ($)
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Brian W. Maass
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90%
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517,500
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55%
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80%
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90%
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20%
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62%
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320,850
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+45%
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465,750
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Gary Torgow
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100%
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950,000
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55%
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80%
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150%
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20%
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74%
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703,000
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+113%
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1,500,000
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Thomas C. Shafer
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100%
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950,000
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55%
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80%
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90%
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20%
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62%
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589,000
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+45%
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855,000
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Michael S. Jones
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90%
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598,500
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55%
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80%
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90%
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20%
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62%
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371,070
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+45%
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538,650
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(1)Messrs. Provost and Dahl did not receive payments under the annual incentive plan. In accordance with his letter agreement, Mr. Klaeser received a prorated payment of his 2020 annual incentive opportunity in the amount of $450,000 in connection with the termination of his employment.
(2)Represents percentage of base salary for each NEO in accordance with our annual incentive plan.
(3)Discretionary increases reported under the “Bonus” column in the Summary Compensation Table.
The Compensation Committee had the authority to reduce or eliminate the payments under the annual incentive plan for each NEO in its discretion, which could include its subjective evaluation of performance as well as evaluation of each NEO’s individual performance and risk management considerations.
2020 Long-Term Equity Compensation
We deliver a significant portion of our executive officer compensation through long-term equity grants made under shareholder-approved plans that are specifically designed to:
•ensure that executives have material “skin in the game,” thereby aligning executive and shareholder interests;
•reward executives for building long-term, sustainable shareholder value; and
•complement our annual cash incentive plan to appropriately balance executive focus on both short- and long-term objectives.
Long-Term Incentive Awards
In May 2020, we continued our long-standing practice of granting annual long-term equity incentive awards to our NEOs. In setting the amount of equity awards in 2020, the Compensation Committee considered a variety of factors, including the terms of each executive officer’s employment agreement, peer group data and the Compensation Committee’s assessment of individual retention risk. In 2020, the Compensation Committee established annual long-term incentive awards with grant date fair values as indicated in the table below, as described below under “Components of Annual Long-term Incentive Awards.” The actual value that the NEOs realize from these 2020 long-term equity incentive awards may differ from the grant date fair value of such awards due to share price appreciation or depreciation and performance of TCF’s common stock relative to its peers.
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Name
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PRSUs(2)
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TRSUs
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Approximate Grant Date Fair Value -
PRSUs(2) ($)
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Approximate Grant Date Fair Value -
TRSUs ($)
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Approximate Grant Date Fair Value of Award ($)
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David T. Provost(1)
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-
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-
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-
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-
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—
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Craig R. Dahl
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80,918
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46,700
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1,814,991
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1,209,997
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3,024,988
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Brian W. Maass
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19,226
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11,096
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431,239
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287,497
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718,736
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Dennis L. Klaeser
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16,050
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9,263
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360,002
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240,004
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600,006
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Gary Torgow
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80,918
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46,700
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1,814,991
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1,209,997
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3,024,988
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Thomas C. Shafer
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29,224
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16,866
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655,494
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436,998
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1,092,492
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Michael S. Jones
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22,236
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12,833
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498,753
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332,503
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831,256
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(1)Mr. Provost did not receive an annual long-term equity award but did receive 3,860 shares of restricted stock with an approximate grant date fair value of $100,013 for his service as a non-employee Director following his termination of employment.
(2)Amount shown is the target amount of the 2020 annual long-term equity award.
Components of Annual Long-Term Incentive Awards
The 2020 long-term equity incentive awards granted to our NEOs in May 2020 consisted of a mix of PRSUs and TRSUs, as set forth in the table above. The TRSUs vest in equal 25% increments on each of the first four anniversaries of the May 6, 2020 grant date. The PRSUs are subject to conditional vesting based on TCF’s Total Shareholder Return (“TSR”) compared to the 2020 Peer Group at the end of the three-year performance period ending April 30, 2023, provided that pursuant to the terms of the Huntington merger, awards will be paid at the greater of actual or target performance based on TCF’s TSR compared to the 2020 Peer Group as of the end of the last completed quarter prior to the consummation of the Huntington merger. The Compensation Committee established threshold, target and maximum performance levels for each selected performance metric with payments for achievement 50% if TSR is at the 25th percentile of the 2020 Peer Group, 100% if TSR is at the 50th percentile of the 2020 Peer Group, and 150% if TSR is at or above the 75th percentile of the 2020 Peer Group. Results between the 25th and 50th percentile and between the 50th and 75th percentile are interpolated.
See “Compensation of Named Executive Officers – 2020 Long-term Equity Compensation – Long-Term Incentive Awards” above for a table that describes the grant date fair value of our annual long-term awards.
Other Forms of Compensation
Retirement and Other Benefits
The Compensation Committee believes that benefits are an important aspect of our ability to attract and retain quality employees, and believes that our benefit programs are consistent with market practices based on its supervision of management’s analysis of industry peers and other employers with whom we compete for employees. Each NEO generally has access to the benefits provided to all full-time employees, including the TCF 401K Plan (the “401(k) Plan”). Standard benefits received by each NEO as a full-time employee have no impact on the amount of other elements of compensation awarded to the NEO.
401(k) Plans and Deferred Compensation Plan
Under the TCF 401K Plan, we offer matching contributions after six months of service. The TCF 401K Plan qualifies as an employee stock ownership plan and a qualified tax or deferred compensation plan, or 401(k) Plan, under the Code.
The Code limits the amount of employee contributions and Company matching contributions under 401(k) Plans for certain individuals, including each NEO. We created the TCF Financial Corporation Deferred Compensation Plan (the “Deferred Compensation Plan”), a nonqualified supplemental plan, to address these limitations. For the 81 participants as of January 31, 2021, eligible participants, including each of our NEOs, are eligible to contribute a portion of their salary to the Deferred Compensation Plan. Amounts contributed to the Deferred Compensation Plan are matched at 5% of the amount contributed to the Deferred Compensation Plan. The Compensation Committee believes the Deferred Compensation Plan is an important tool to attract and retain executive talent.
Pension Benefits in 2020
Effective June 30, 2006, we stopped accepting new participants in the Chemical Pension Plan. Since all Legacy Chemical NEOs joined TCF (Legacy Chemical at that time) after 2006 (and all Legacy TCF NEOs joined TCF in 2019), none of our NEOs are participants in the Chemical Pension Plan. In addition, in July 2017, the Compensation Committee determined to freeze the Chemical Pension Plan such that no additional benefits would be accrued under the Chemical Pension Plan. We terminated Chemical Pension Plan, which was overfunded, effective August 31, 2019.
We assumed the obligations of the Legacy TCF Cash Balance Pension Plan in connection with the TCF/Chemical merger, which was frozen in 2004 and had further compensation credits discontinued in 2006. We terminated the Legacy TCF Cash Balance Pension Plan effective November 1, 2019. Mr. Dahl was the only NEO participating in the Legacy TCF Cash Balance Pension Plan. His pension benefits are disclosed below in the “Pension Benefits in 2020” table and described in the narrative following that table.
Insurance Benefits
NEOs are eligible for the same group medical, dental, disability, life insurance and other similar benefits that are generally available to our full-time employees.
Perquisites
Perquisites received by NEOs include use of Company-owned or leased automobiles or car allowances, use of a driver, club memberships, executive physicals, life and disability insurance, incentive trips, and tax return preparation. Messrs. Torgow and Provost, and Mr. Dahl during his tenure as CEO, may receive personal use of our corporate aircraft. The purpose of these perquisites is to provide competitive benefits, reduce security risks, and enhance scheduling and efficient use of the NEOs’ time. The Compensation Committee reviews the perquisites of the NEOs and other officers annually.
Looking Forward: 2021 Annual Cash and Long-Term Incentives
For 2021, the Compensation Committee determined that core net income is the best corporate performance metric to measure our financial performance for our annual cash incentive, and that 80% of each participating NEO’s annual cash incentive award will be tied to that metric. Consistent with 2020, the remaining 20% of the cash incentive awards will be tied to individual performance objectives. The Compensation Committee also determined levels for threshold, target, and maximum payouts for the corporate performance metric for use in 2021 for all NEOs. The details of the 2021 bonus structure will apply only in the event the Huntington merger does not close. If the Huntington merger does close, executive bonus opportunities will be reviewed by Huntington. For 2021, in accordance with the Huntington merger agreement, the Compensation Committee approved the granting of TRSUs vesting in 25% annual increments over a period of four years.
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Compensation & Governance Best Practices
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Recovery (“Clawback”) of Performance-Based Compensation
The Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) requires recovery of certain compensation from the Principal Executive Officer and the Principal Financial Officer in the event of a restatement of financial results due to misconduct. The Audit Committee is responsible for determining whether annual cash incentive or long-term incentive compensation paid to the Principal Executive Officer or the Principal Financial Officer should be recovered in the event of a restatement.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) required the SEC to issue rules that require all public companies to adopt additional mandatory clawback policies to recover any incentive-based compensation paid to current and former executive officers based on financial information that was subsequently required to be restated due to material noncompliance with any financial reporting requirements. In 2015 the SEC issued proposed rules. There are a number of areas addressed by the proposed rules, however, that require clarification and will likely result in material changes to the proposed rules. As a result, the Compensation Committee believes it is appropriate to await comprehensive final rules and subsequent changes to Nasdaq Listing Rules before it adopts a clawback policy.
Compensation Policies and Practices as They Relate to Risk Management
On an annual basis, the Compensation Committee performs a review of our incentive compensation policies and practices for senior executive officers and others, individually or in the aggregate, who may have the potential to expose TCF to material levels of risk. The Compensation Committee bases this review in part on an analysis of such compensation arrangements by our incentive compensation risk officer. The analysis and the Compensation Committee’s review considers, among other things, the balance between short- and long-term components of incentive compensation for the senior executive officers, the factors used to determine eligibility for annual cash incentive awards, terms of vesting for long-term incentive awards to the senior executive officers, risk management considerations, and how these elements relate to TCF’s most significant risks. In the case of senior executive officers, the Compensation Committee places significant reliance on its ability to reduce or withhold an award if it determines that the executive incurred excessive risk. We believe that our incentive compensation arrangements, and compensation policies and practices in general, are not reasonably likely to have a material adverse effect on TCF.
Stock Ownership Guidelines for Executive Officers
Our stock ownership guidelines are designed to encourage share ownership so that our executives have a direct stake in TCF and to align their interests with the long-term interests of our shareholders. The ownership guidelines cover all NEOs and are as follows:
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Position
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Required Salary Multiple
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Chief Executive Officer
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5x base salary
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All other executive officers
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3x base salary
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In general, stock ownership is determined in the same manner as beneficial ownership for SEC reporting purposes. The following share types are included under these guidelines: shares directly owned, family-owned shares, retirement plan shares and unvested time-based restricted stock. Stock options that are unexercised, regardless of their vesting status and in-the-money value, are not counted toward satisfaction of these guidelines. Unvested performance-based restricted stock is also not counted toward stock ownership.
Executives are required to comply with these guidelines within five years of becoming subject to this policy. Individuals who acquire shares of common stock under our equity-based incentive plans must hold at least 50% of all net after-tax acquired shares until the earlier of the date at which they satisfy our stock ownership guidelines, or 36 months following acquisition of such shares. Currently, all named executive officers are either in compliance with the guidelines or within the five-year compliance window.
The Board adopted the Stock Ownership Guidelines because it believes that it is in our and our shareholders’ best interests to further align the long-term financial interests of executive management with those of our shareholders by encouraging stock ownership among our executives. The Board believes that executive stock ownership demonstrates a long-term commitment to our growth and profitability.
Anti-Hedging and Anti-Pledging Prohibitions under our Insider Trading Policy
Our Insider Trading Policy prohibits our directors, executive officers and employees from engaging in any transaction which could hedge or offset decreases in the market value of our common stock. In addition, all of directors and executives, including our NEOs, are prohibited from pledging stock under our Insider Trading Policy.
Deductibility of Executive Compensation
Internal Revenue Code Section 162(m) generally prohibits a federal income tax deduction to public companies for compensation over $1,000,000 paid to a “covered employee.” A “covered employee” includes (i) the Chief Executive Officer, (ii) the Chief Financial Officer, (iii) the three other most highly compensated executive officers, and (iv) any individual who was a covered employee for any taxable year beginning after December 31, 2016. Before 2018, we were permitted to receive a federal income tax deduction for qualifying “performance-based” compensation as defined under Code Section 162(m) without regard to this $1,000,000 limitation. However, U.S. tax legislation eliminated the performance-based exception. These new rules became effective starting in 2018 for us, except that certain awards that were granted on or before November 2, 2017 may still qualify as performance-based compensation. To the extent that in 2018 or any later year, the aggregate amount of any covered employee’s salary, bonus, and amount realized from option exercises and vesting of restricted stock units or other equity awards, and certain other compensation amounts that are recognized as income for federal income tax purposes by the covered employee exceeds $1,000,000 in any year, we will not be entitled to a federal income tax deduction for the amount over $1,000,000 in that year.
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Compensation Committee Report
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The Compensation Committee has reviewed and discussed the preceding Compensation Discussion and Analysis with management. Based on that review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Amendment to TCF’s Annual Report on Form 10-K.
Arthur A. Weiss, Chair
Karen L. Grandstrand
Barbara J. Mahone
Vance K. Opperman
Roger J. Sit
Jeffrey L. Tate
Compensation Committee Interlocks and Insider Participation
Directors Grandstrand, Mahone, Opperman, Sit, Tate, and Weiss served on the Compensation Committee in 2020. None of these Directors has ever served as an officer or employee of TCF or any of its subsidiaries. The Board has determined that all members of the Compensation Committee were independent for 2020 under standards outlined under “Director Independence and Related Person Transactions “and under applicable Nasdaq rules. Certain relationships with Directors are disclosed herein under “Director Independence and Related Person Transactions - What Transactions Were Considered Non-Material?”
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Summary Compensation Table
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The following summary compensation table (the “Summary Compensation Table”) identifies the cash and non-cash compensation awarded to or earned by the NEOs in 2020, 2019, and 2018. The positions listed in the table are those in which the NEO served at December 31, 2020.
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Name and
Principal Position
|
Year
|
|
Salary
($)
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|
Bonus
($)(1)
|
|
Stock
Awards
($)(2)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)(3)
|
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)(4)
|
|
All Other
Compensation
($)(5)
|
|
Total
($)
|
David T. Provost(6)
|
2020
|
|
383,655
|
|
—
|
|
|
100,013
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|
|
—
|
|
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—
|
|
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—
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|
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10,383,178
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10,866,846
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|
Chief Executive Officer and Former Vice Chairman
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2019
|
|
931,731
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—
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2,855,154
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—
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1,341,780
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—
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117,204
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5,245,869
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2018
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456,731
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—
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2,980,668
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—
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—
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—
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96,181
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3,533,580
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Craig R. Dahl(7)
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2020
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920,192
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—
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3,024,988
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—
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—
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—
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11,393,318
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15,338,498
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|
Former President and Chief Executive Officer
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2019
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423,077
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—
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—
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—
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2,039,230
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3,890
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35,515
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2,501,712
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Brian W. Maass
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2020
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586,058
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144,900
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718,736
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—
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320,850
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—
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82,085
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1,852,629
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|
Executive Vice President and Chief Financial Officer
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2019
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208,846
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—
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2,500,011
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—
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724,328
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—
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25,665
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3,458,850
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Dennis L. Klaeser(8)
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2020
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605,769
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—
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600,006
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—
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450,000
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—
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2,937,334
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4,593,109
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Former Executive Vice President and Chief Financial Officer
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2019
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735,577
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—
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601,629
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—
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847,440
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—
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75,785
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2,260,431
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2018
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703,846
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—
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993,556
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—
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612,000
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—
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47,383
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2,356,785
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Gary Torgow
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2020
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986,538
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797,000
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3,024,988
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—
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703,000
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—
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94,442
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5,605,968
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Executive Chairman
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2019
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931,731
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—
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2,855,154
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—
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1,341,780
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—
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117,733
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5,246,398
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2018
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456,731
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—
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2,980,688
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—
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—
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—
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69,170
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3,506,589
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Thomas C. Shafer
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2020
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986,538
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266,000
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1,092,492
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—
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589,000
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—
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88,209
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3,022,239
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Chief Operating Officer of TCF, Chief Executive Officer of TCF Bank
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2019
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931,731
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—
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5,137,196
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—
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1,341,780
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—
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152,931
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7,563,638
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2018
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903,846
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—
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993,556
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—
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969,000
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—
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59,252
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2,925,654
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Michael S. Jones
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2020
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677,788
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167,580
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831,256
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—
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371,070
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—
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52,127
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2,099,821
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Executive Vice President of TCF, President and Chief Operating Officer of TCF Bank
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(1)Represents amounts paid pursuant to the Compensation Committee’s exercise of positive discretion in awards made under our annual incentive plan.
(2)The values of all stock awards reported in this column were computed in accordance with ASC 718. Represents the following amounts: Mr. Provost – $100,013 of restricted stock awards granted as compensation for Mr. Provost’s service as a non-employee director; Mr. Dahl – $1,814,991 of PRSUs and $1,209,997 of TRSUs; Mr. Maass – $431,239 of PRSUs and $287,497 of TRSUs; Mr. Klaeser – $360,002 of PRSUs and $240,004 of TRSUs; Mr. Torgow – $1,814,991 of PRSUs and $1,209,997 of TRSUs; Mr. Shafer – $655,494 of PRSUs and $436,998 of TRSUs; and Mr. Jones – $498,753 and $332,503 of TRSUs. The fair value of the PRSUs awards are based on the target payout under the awards, or 1.0x the number of units granted. The value of the PRSUs at the grant date based on the maximum payout to Messrs. Dahl, Maass, Klaeser, Torgow, Shafer, and Jones would have been $2,722,487, $646,859, $540,003, $2,722,487, $983,241, and $748,130, respectively. None of the restricted stock or restricted stock unit awards are entitled to dividends until the awards vest. TCF’s accounting policy and assumptions for stock-based compensation are described in Notes 2 and 22 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.
(3)For a further description of how the Compensation Committee determined incentive payments awarded in 2020, see "Compensation of Named Executive Officers – NEO Pay Determinations – 2020 Annual Cash Incentive Plan" in the CD&A of this Amendment.
(4)There were no above-market or preferential earnings on our nonqualified deferred compensation plans. We assumed the obligations of the Legacy TCF Cash Balance Pension Plan in connection with the TCF/Chemical merger in 2019. Mr. Dahl was the only NEO participating in the Legacy TCF Cash Balance Pension Plan, which was terminated effective November 1, 2019. As of December 31, 2020, there were no longer any outstanding obligations under the Legacy TCF Cash Balance Pension Plan.
(5)Amounts shown in the “All Other Compensation” column for 2020 consist of the following:
(a)Mr. Provost: $10,229,567 in severance payments; $49,999 in cash payments for his service as a director of TCF; $14,250 of employer contributions to the 401(k) Plan; $3,030 consisting of the taxable portion of employer paid premiums for life insurance; $2,769 consisting of the taxable portion of employer paid premiums for disability insurance; $4,154 in car allowances; $350 in cell phone reimbursements; and $79,059 in Company-paid club dues.
(b)Mr. Dahl: $11,213,931 in severance payments; $105,960 of employer contributions to the Deferred Compensation Plan; $10,602 of employer contributions to the 401(k) Plan; $6,337 consisting of the taxable portion of employer paid premiums for life insurance; $3,533 in executive tax service; $20,266 in Company-paid club dues; and $32,690 in dividend equivalents earned on TRSUs.
(c)Mr. Maass: $38,829 of employer contributions to the Deferred Compensation Plan; $14,250 of employer contributions to the 401(k) Plan; $1,193 consisting of the taxable portion of employer paid premiums for life insurance; $12,411 in Company car payments; $3,750 in executive tax service; and $11,651 in dividend equivalents earned on TRSUs.
(d)Mr. Klaeser: $2,816,267 in severance payments; $71,667 in compensation pursuant to Mr. Klaeser’s post-employment consulting agreement with TCF; $14,250 of employer contributions to the 401(k) Plan; $4,798 consisting of the taxable portion of employer paid premiums for life insurance; $8,439 consisting of the taxable portion of employer paid premiums for disability insurance; $7,500 in taxable payments for relocation; $630 in cell phone reimbursements; $7,300 in Company-paid club dues; and $6,484 in dividend equivalents earned on TRSUs.
(e)Mr. Torgow: $14,250 of employer contributions to the 401(k) Plan; $5,940 consisting of the taxable portion of employer paid premiums for life insurance; $11,215 in car allowances; $9,649 consisting of the taxable portion of employer paid premiums for disability insurance; $630 in cell phone reimbursements; $3,723 in company-paid club dues; and $49,035 in dividend equivalents earned on TRSUs.
(f)Mr. Shafer: $9,865 of employer contributions to the Deferred Compensation Plan; $14,250 of employer contributions to the 401(k) Plan; $5,940 consisting of the taxable portion of employer paid premiums for life insurance; $11,215 in car allowances; $10,304 consisting of the taxable portion of employer paid premiums for disability insurance; $630 in cell phone reimbursements; $18,296 in Company-paid club dues; and $17,709 in dividend equivalents earned on TRSUs.
(g)Mr. Jones: $1,694 of employer contributions to the Deferred Compensation Plan; $14,250 of employer contributions to the 401(k) Plan; $2,632 in deemed compensation for incentive travel award $2,070 consisting of the taxable portion of employer paid premiums for life insurance; $4,469 for an annual executive physical; $8,750 in executive tax service; and $4,786 in Company-paid club dues; and $13,475 in dividend equivalents earned on TRSUs.
(6)“Salary” column represents W-2 wages paid to Mr. Provost for the duration of his employment at TCF in 2020. Mr. Provost served as our Executive Vice Chairman until May 8, 2020, at which time his employment with TCF ended. He remained Vice Chairman of TCF’s Board of Directors and received compensation as an external Director until he was named Chief Executive Officer of TCF on October 28, 2020. Mr. Provost remains a non-independent Director of TCF, for which he does not receive compensation.
(7)“Salary” column represents W-2 wages paid to Mr. Dahl for the duration of his employment at TCF in 2020. Mr. Dahl served as our President, Chief Executive Officer and a Director until his employment with TCF ceased on October 27, 2020.
(8)“Salary” column represents W-2 wages paid to Mr. Klaeser for the duration of his employment at TCF in 2020. Mr. Klaeser served as our Executive Vice President, Chief Financial Officer until his employment with TCF ceased on October 1, 2020.
Employment, Separation and Release, and Consulting Agreements
Provisions of the employment, separation and release, and consulting agreements for Messrs. Provost, Dahl, Maass, Klaeser, Torgow, Shafer and Jones are described below under “Executive Compensation – Employment, Separation and Release, and Consulting Agreements.”
Amount of Salary and Bonus in Proportion to Total Compensation
The relationship of salary to the NEOs’ total compensation will vary from year to year primarily depending on the amount of non-equity incentive compensation (annual cash incentive) and grant date fair value of long-term awards, as discussed in the CD&A.
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Grants of Plan-Based Awards in 2020
|
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|
The following table shows plan-based awards granted to the NEOs in 2020:
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All Other Stock Awards:
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Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Award
|
|
Number of Shares of Stock (#)
|
|
Grant Date Fair Value of Stock Awards
($)(9)
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Name
|
|
Grant Date
|
|
Threshold
($)
|
Target
($)
|
Max
($)
|
|
Threshold (#)
|
Target
(#)
|
Max
(#)
|
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|
Provost
|
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—
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—
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—
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—
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—
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—
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|
—
|
|
—
|
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05/06(2)
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—
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—
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—
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—
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—
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—
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3,860
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100,013
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Dahl
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525,000
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1,050,000
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2,100,000
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—
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—
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—
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—
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—
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|
05/06(3)(4)
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—
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—
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—
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40,459
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80,918
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121,377
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—
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1,814,991
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05/06(5)(6)
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—
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—
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—
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—
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—
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—
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46,700
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1,209,997
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Maass
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258,750
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517,500
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1,035,000
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—
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—
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—
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—
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—
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05/06(3)
|
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—
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—
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—
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9,613
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19,226
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28,839
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431,239
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05/06(5)
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—
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—
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—
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—
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—
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—
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11,096
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287,497
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Klaeser
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300,000
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600,000
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1,200,000
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—
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—
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—
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—
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—
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05/06(3)(7)
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—
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—
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—
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8,025
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16,050
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24,075
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—
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360,002
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05/06(5)(8)
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—
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—
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—
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—
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—
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—
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9,263
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240,004
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Torgow
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475,000
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950,000
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1,900,000
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—
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—
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—
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—
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—
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05/06(3)
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—
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—
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—
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40,459
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80,918
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121,377
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—
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1,814,991
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05/06(5)
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—
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—
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—
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—
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—
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—
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46,700
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1,209,997
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Shafer
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475,000
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950,000
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1,900,000
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—
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—
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—
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—
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—
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05/06(3)
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—
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—
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—
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14,612
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29,224
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43,836
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—
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655,494
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05/06(5)
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—
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—
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—
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—
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—
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—
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16,866
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436,998
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Jones
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299,250
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598,500
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1,197,000
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—
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—
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—
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|
—
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|
—
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|
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|
05/06(3)
|
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—
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—
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|
—
|
|
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11,118
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22,236
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33,354
|
|
—
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498,753
|
|
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05/06(5)
|
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—
|
|
—
|
|
—
|
|
|
—
|
—
|
—
|
|
12,833
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|
332,503
|
|
(1)For each NEO, amounts reported represent the potential payout range pursuant to our annual incentive plan, with all payments subject to achievement of corporate and individual performance objectives and the discretion of the Compensation Committee. The annual incentive plan is further explained in “Compensation of Named Executive Officers – NEO Pay Determinations – 2020 Annual Cash Incentive Plan” in the CD&A of this Amendment. Actual amounts earned under the annual incentive plan in 2020 are included in the column entitled “Non-Equity Incentive Plan Compensation” of the Summary Compensation Table above. Pursuant to his employment agreement entered into on December 13, 2020, Mr. Provost was not eligible in 2020 for an annual incentive award. Mr. Klaeser received a prorated award under our annual incentive plan in connection his departure from TCF in October 2020. Mr. Dahl did not receive an award under our annual incentive plan due to his departure from TCF in October 2020.
(2)Represents shares of restricted stock granted in 2020 under the 2019 Stock Plan for Mr. Provost’s service as a non-employee Director.
(3)Represents the award of PRSUs granted in 2020 under the 2019 Stock Plan and the Omnibus Plan, with a performance period that ends on April 30, 2023. The vesting is subject to the achievement of pre-established performance targets and the NEO’s continued service through the vesting date. Any vested units will convert to shares of our common stock on a one-for-one basis. PRSUs that do not vest will be forfeited.
(4)On October 27, 2020, Mr. Dahl’s award vested in full at target in connection with his departure from TCF.
(5)Represents the award of TRSUs granted in 2020 under the 2019 Stock Plan and the Omnibus Plan. The TRSUs vest in equal 25% increments on each of the first four anniversaries of the May 6, 2020 grant date. See “Compensation of Named Executive Officers – NEO Pay Determinations – 2020 Long-Term Equity Compensation” in the CD&A of this Amendment for a description of the terms of these awards. Any vested units will convert to shares of our common stock on a one-for-one basis. TRSUs that do not vest will be forfeited.
(6)Upon his ceasing employment with TCF on October 27, 2020, Mr. Dahl’s award vested in full.
(7)Upon his retirement on October 1, 2020, Mr. Klaeser’s award vested in full at target in connection with his departure from TCF.
(8)Upon his retirement on October 1, 2020, Mr. Klaeser’s award vested in full.
(9)The values shown are the aggregate grant date fair value for initial awards computed in accordance with ASC 718. The PRSUs are valued based on the probable outcome of the performance conditions, payout at the target level.
|
|
|
|
|
|
Outstanding Equity Awards at December 31, 2020
|
|
|
The following table shows all equity awards that were outstanding at December 31, 2020 for each NEO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
Stock Awards
|
|
|
Year of
|
|
Number of Securities
Underlying Unexercised
Options
(#)
|
|
Option
Exercise
Price
|
|
Option
Expiration
|
|
Number of
Shares or
Units of Stock
That Have Not
Vested
|
|
Market Value
of Shares or Units of
Stock
That Have
Not Vested
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights
That Have Not
Vested
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units or
Other Rights
That Have Not
Vested
|
Name
|
|
Award
|
|
Exercisable
|
|
Unexercisable
|
|
($)(1)
|
|
Date
|
|
(#)
|
|
($)(2)
|
|
(#)
|
|
($)(2)
|
Provost
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,860(3)
|
|
142,897
|
|
—
|
|
—
|
Maass
|
|
2018
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,927(4)
|
|
71,338
|
|
—
|
|
—
|
|
|
2018
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,808(4)
|
|
140,972
|
|
—
|
|
—
|
|
|
2018
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,673(4)(5)
|
|
321,074
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,422(6)
|
|
163,702
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,632(5)(7)
|
|
245,517
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
28,556(8)(9)
|
|
1,057,143
|
|
—
|
|
—
|
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,096(10)
|
|
410,774
|
|
—
|
|
—
|
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
19,226
|
|
711,747
|
Torgow
|
|
2018
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,284(8)(12)
|
|
528,794
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
27,117(13)
|
|
1,003,871
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,742(8)(14)
|
|
545,749
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,120(8)(15)
|
|
522,722
|
|
—
|
|
—
|
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
46,700(10)
|
|
1,728,834
|
|
—
|
|
—
|
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
80,918
|
|
2,995,584
|
Shafer
|
|
2017
|
|
5,329
|
|
3,552
|
|
53.72
|
|
2/21/2027
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2017
|
|
3,435
|
|
2,288
|
|
46.95
|
|
8/9/2027
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,643(8)(18)
|
|
134,864
|
|
—
|
|
—
|
|
|
2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
627(8)(19)
|
|
23,212
|
|
—
|
|
—
|
|
|
2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
341(8)(20)
|
|
12,624
|
|
—
|
|
—
|
|
|
2018
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,761(8)(12)
|
|
176,252
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,059(8)(15)
|
|
261,324
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,559(13)
|
|
501,954
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
54,032(8)(21)
|
|
2,000,265
|
|
—
|
|
—
|
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
16,866(10)
|
|
624,379
|
|
—
|
|
—
|
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
29,224
|
|
1,081,872
|
Jones
|
|
2018
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,665(4)
|
|
98,658
|
|
—
|
|
—
|
|
|
2018
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,992(4)(5)
|
|
443,944
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,492(4)
|
|
203,314
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,237(5)(7)
|
|
304,934
|
|
—
|
|
—
|
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25,224(8)(21)
|
|
933,792
|
|
—
|
|
—
|
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12,833(10)
|
|
475,078
|
|
—
|
|
—
|
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22,236
|
|
823,177
|
(1)Represents the closing market price of our common stock on the date of the stock option award.
(2)Market value was determined using the 2020 year-end closing stock price of $37.02 per share as reported on Nasdaq.
(3)Represents a restricted stock award granted to Mr. Provost on May 6, 2020 as compensation for his service as a non-employee director prior to being named Chief Executive Officer on October 28, 2020 that vests on May 6, 2021.
(4)Vested on January 1, 2021.
(5)Represents PRSUs granted by Legacy TCF and assumed by us in the TCF/Chemical merger (as adjusted for the exchange ratio applied during the TCF/Chemical merger) and converted to earned PRSUs on the TCF/Chemical merger date, which are now only subject to time-based vesting requirements. PRSUs granted in 2018 were converted to earned PRSUs at the maximum level of performance and awards granted in 2019 were converted to earned PRSUs at the target level of performance based on Legacy TCF’s performance as measured at June 30, 2019, under the terms of the TCF/Chemical merger agreement.
(6)Represents service-based restricted stock awards granted by Legacy TCF that we assumed in the TCF/Chemical merger (as adjusted for the exchange ratio applied during the TCF/Chemical merger) and that vest(ed) pro-rata on April 1, 2020, January 1, 2021 and 2022.
(7)Vests on January 1, 2022.
(8)TRSUs including accrued dividend equivalent units from grant date.
(9)Vest(ed) in equal 50% increments on December 1, 2020 and August 1, 2021.
(10)Accrues cash dividends and vests in equal 25% increments on May 6, 2021, 2022, 2023, and 2024.
(11)Represents awards of PRSUs granted at target level with vesting based on TCF’s total shareholder return as compared against the 2020 Peer Group over the three-year performance period ending April 30, 2023.
(12)Vest(ed) in equal 20% increments on February 27, 2019, 2020, 2021, 2022, and 2023.
(13)Represents PRSUs granted by us that were converted to earned PRSUs in the TCF/Chemical merger, which are now subject only to time-based vesting requirements, at rates equal to the target level of performance based on our performance as measured at June 30, 2019, under the terms of the PRSU agreements. The earned PRSUs granted to Messrs. Torgow and Shafer in 2019, were converted into earned PRSUs at a rate equal to 100% of the target number of shares on the TCF/Chemical merger date, and vest on December 31, 2021.
(14)Vest(ed) in equal one-third increments on February 25, 2020, 2021, and 2022.
(15)Vest(ed) in equal 20% increments on February 25, 2020, 2021, 2022, 2023, and 2024.
(16)Represents stock options that vest ratably on the anniversary date of the February 21, 2017 grant date over a period of five years.
(17)Represents stock options that vest ratably on the anniversary date of the August 9, 2017 grant date over a period of five years.
(18)Vests on August 31, 2021.
(19)Vests on February 21, 2022.
(20)Vests on August 9, 2022.
(21)Vest(ed) in equal 50% increments on August 1, 2020 and 2021.
|
|
|
|
|
|
Option Exercises and Stock Vested in 2020
|
|
|
The following table shows information for option exercises and vesting of stock awards in 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of Shares
Acquired on
Exercise
(#)
|
|
Value Realized
on Exercise
($)
|
|
Number of Shares
Acquired on Vesting
(#)(1)
|
|
Value Realized
on Vesting
($)(2)
|
Provost
|
|
—
|
|
—
|
|
|
122,753
|
|
3,109,021
|
Dahl
|
|
—
|
|
—
|
|
266,461
|
|
8,363,064
|
Maass
|
|
—
|
|
—
|
|
63,982
|
|
2,322,002
|
Klaeser
|
|
—
|
|
—
|
|
64,887
|
|
1,584,091
|
Torgow
|
|
—
|
|
—
|
|
53,963
|
|
2,031,934
|
Shafer
|
|
—
|
|
—
|
|
69,011
|
|
2,058,291
|
Jones
|
|
—
|
|
—
|
|
55,845
|
|
2,075,336
|
(1)The number of shares shown reflects the gross number of shares covered by awards that vested in 2020. Shares for the required tax withholding were deducted from the gross number of shares vested, resulting in a smaller number of shares acquired upon vesting.
(2)Amounts were calculated using the closing stock price as reported on Nasdaq on the vesting dates of the stock awards.
The following table shows information on the defined benefit pension plan benefits of the NEOs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Plan Name
|
Number of Years
Credited Service
(#)(2)
|
Present Value of
Accumulated
Benefit
($)
|
Payments
During Last
Fiscal Year
($)(3)
|
Provost
|
—
|
—
|
|
|
—
|
Dahl
|
Legacy TCF Cash Balance Pension Plan(1)
|
5.75
|
—
|
|
|
92,776
|
Maass
|
—
|
—
|
|
|
—
|
Klaeser
|
—
|
—
|
|
|
—
|
Torgow
|
—
|
—
|
|
|
—
|
Shafer
|
—
|
—
|
|
|
—
|
Jones
|
|
|
|
|
|
(1)We assumed the obligations under the Legacy TCF Cash Balance Pension Plan in connection with the TCF/Chemical merger.
(2)The number of years of credited service is less than actual years of service with Legacy TCF or its subsidiaries because the plan was frozen during the NEO’s tenure with Legacy TCF or its subsidiaries. Mr. Dahl was not given credit for service other than for his actual years of service with Legacy TCF or its subsidiaries through April 1, 2006, the date the plan was frozen. Benefits were assumed to commence at age 65.
(3)The Board of Directors of Legacy TCF approved the termination of the Legacy TCF Cash Balance Pension Plan effective November 1, 2019. Mr. Dahl’s accumulated benefit balance was paid in full using the weighted-average interest rate in effect during 2020. The balance was transferred as part of an in-service rollover entirely into the TCF 401(k) Plan. For a discussion of the valuation methods and material assumptions applied in quantifying the present value of the current accrued benefit under Legacy TCF Cash Balance Pension Plan, see Note 23 “Retirement Plans” of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.
|
|
|
|
|
|
Nonqualified Deferred Compensation in 2020
|
|
|
The following table shows certain information for TCF’s nonqualified account-type plans for the NEOs. In September 2006, the TCF board approved the TCF Financial Corporation Deferred Compensation Plan (the “Deferred Compensation Plan”, formerly the Chemical Financial Corporation Deferred Compensation Plan), a voluntary nonqualified supplemental retirement program for a select group of management personnel.
The TCF 401K Supplemental Plan (the “Supplemental Plan”) shown below is a Legacy TCF nonqualified supplemental program for the TCF 401K Plan, a qualified tax or deferred plan under Section 401(k) of the Code which we assumed in connection with the TCF/Chemical merger.
The TCF contributions shown in the table for the Supplemental Plan are matching contributions which are made at the same rate as under the TCF 401K Plan. For further information about this plan, refer to the CD&A under “Compensation of Named Executive Officers – Other Forms of Compensation.” The Deferred Stock Plan is also a Legacy TCF plan that we assumed in connection with the TCF/Chemical merger which consists solely of previously-deferred vested TCF common stock. The Supplemental Plan was amended October 23, 2019 to discontinue future deferrals by participants effective as of January 1, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Contributions in Last Fiscal Year
|
|
Registrant Contributions in Last Fiscal Year
|
|
Aggregate Earnings in Last Fiscal Year
|
|
Aggregate Withdrawals/Distributions
|
|
Aggregate Balance at December 31, 2020
|
Name
|
Plan
|
|
($)(1)
|
|
($)(2)
|
|
($)(3)
|
|
($)(4)
|
|
($)(5)
|
Provost
|
Deferred Compensation Plan
|
|
—
|
|
|
—
|
|
|
58,057
|
|
|
14,706
|
|
|
588,908
|
Dahl
|
Deferred Compensation Plan
|
|
138,029
|
|
|
6,901
|
|
|
24,416
|
|
|
3,720
|
|
|
173,066
|
|
Supplemental Plan
|
|
265,100
|
|
|
99,059
|
|
|
(608,294)
|
|
|
89,669
|
|
|
2,450,879
|
|
Deferred Stock Plan
|
|
—
|
|
|
—
|
|
|
(289,195)
|
|
|
(1,441,457)
|
|
|
940,493
|
Maass
|
Deferred Compensation Plan
|
|
293,029
|
|
|
14,651
|
|
|
54,742
|
|
|
3,446
|
|
|
365,867
|
|
Supplemental Plan
|
|
144,866
|
|
|
24,178
|
|
|
(65,584)
|
|
|
12,567
|
|
|
503,473
|
Klaeser
|
Deferred Compensation Plan
|
|
—
|
|
|
—
|
|
|
616,562
|
|
|
28,333
|
|
|
5,312,127
|
Torgow
|
Deferred Compensation Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,703
|
|
|
1,300,207
|
Shafer
|
Deferred Compensation Plan
|
|
599,842
|
|
|
9,865
|
|
|
2,388
|
|
|
(189,829)
|
|
|
1,986,885
|
Jones
|
Deferred Compensation Plan
|
|
33,890
|
|
|
1,694
|
|
|
8,090
|
|
|
—
|
|
|
43,673
|
|
Supplemental Plan
|
|
|
|
|
|
(146,250)
|
|
|
18,314
|
|
|
484,274
|
|
Deferred Stock Plan
|
|
—
|
|
|
—
|
|
|
(33,051)
|
|
|
(595,121)
|
|
|
—
|
(1)Amounts included in this column are included in the “Salary” column in the Summary Compensation Table, with the exception that $402,534 of Mr. Shafer’s contribution and $99,059 of Mr. Dahl’s contribution related to their annual incentive plan award paid in 2020.
(2)The amounts shown in this column are reported as compensation in the Summary Compensation Table.
(3)Amounts for Messrs. Dahl and Jones consist of dividend equivalents and unrealized appreciation or depreciation on the deemed account investments, primarily TCF common stock. There were no above-market or preferential earnings or appreciation in 2020 or previous years. Amounts included in this column are not included in the Summary Compensation Table.
(4)Amounts consist of dividends on deemed investments in TCF common stock and distributions of vested shares which were included for each participant in the Summary Compensation Table in the years granted. The dividends are also included in the Aggregate Earnings in Last Fiscal Year column of this table.
(5)The aggregate balance at last fiscal year-end shown in this column includes contributions in prior years which were reported as “Salary” and “All Other Compensation” on the Summary Compensation Table for the applicable year.
Material Information Regarding the Deferred Compensation Plan
•Our NEOs are all eligible to participate in the Deferred Compensation Plan. Participants may elect to defer up to 60% of their base compensation and up to 85% of their bonus or severance compensation to the Deferred Compensation Plan. The election to defer compensation under the Deferred Compensation Plan is irrevocable for each plan year as of the beginning of the plan year. Participant contributions are made into a grantor trust for the purpose of providing for payment of the deferred compensation under this plan. The investment of employee contributions are self-directed by participants within an established array of money market, equity and fixed income mutual funds. The aggregate earnings on these investments, by each NEO who is a participant in the Deferred Compensation Plan, are included in the table above, and are attributable to the specific investments selected by each participant. Participants may change the designation of their investments at such times as mutually agreed by the parties. As of December 31, 2020, participants could change their investment designation on a daily basis.
•Participants elect, in advance of the deferral of their compensation, when the funds will be distributable. The aggregate balances of the participants are distributable upon the participant’s termination of employment; the participant’s death or disability; or at a specified time, as determined by the participant. In addition, distributions may be made from the Deferred Compensation Plan in the event of an unforeseeable emergency. The Deferred Compensation Plan allows distributions to be made in a lump sum or up to 15 annual installments. Participants may change their current distribution election as long as the change is made at least 12 months prior to their first payment and is delayed by at least 5 years. The Deferred Compensation Plan is unfunded for tax purposes and for purposes of ERISA.
Material Information Regarding the Supplemental Plan
•Covered compensation and contributions under a 401(k) plan are subject to certain limits imposed by the IRS. Legacy TCF maintained the Supplemental Plan to allow Legacy TCF NEOs to make pre-tax contributions from their salary and annual cash incentives at the same rate as under the TCF 401K Plan up to a total of 50% of covered pay and to receive an employer matching contribution at the same rate as under the TCF 401K Plan on their contributions up to 5% of pay. Employee contributions to the Supplemental Plan were invested, at the employee’s election, in the same investment choices that were available in the TCF 401K Plan.
•The amounts allocated to the accounts of each of the NEOs that participated primarily consisted of deemed TCF common stock. Earnings on deemed TCF common stock investments in the plan during the period of January 1, 2020 through December 31, 2020 consisted of $1.40 per share in dividend equivalents and depreciation of $9.92 per share. Dividend-equivalent distributions are made from the Supplemental Plan at the same time and at the same rate as to holders of TCF common stock generally.
•Distributions from the Supplemental Plan occur in a lump sum in the event of death or disability. Participants may also elect to receive a lump sum distribution either six months after termination, on a date certain or in the event of a change in control, or may receive a series of no more than ten annual payments following termination.
•Deemed investments in TCF common stock selected by the NEOs generally cannot be changed during employment (except in certain change in control situations) and such investments are distributed in-kind upon termination of employment, either in a lump sum six months thereafter or in annual installments, as elected by the participant.
Material Information Regarding the Deferred Stock Plan
•There were no contributions to the Deferred Stock Plan in 2020. The accounts of the NEOs are deemed to be invested in shares of TCF common stock. Distributions are made in-kind in the form of TCF common stock. Distributions are made in accordance with the terms of the restricted stock agreements applicable to the shares that have been deferred into the Deferred Stock Plan. Shares of restricted stock contributed to the Deferred Stock Plan are not entitled to dividends until they vest. TCF has established a trust fund to hold assets for the payment of benefits as they come due.
•TCF’s cost of the Deferred Stock Plan in 2020 was $15,696 for recordkeeper and trustee expenses.
•At December 31, 2020, the total investment in TCF common stock under the Deferred Stock Plan was 30,486 shares valued at $1,128,592.
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Employment, Separation and Release, and Consulting Agreements
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Below is a summary of employment and other arrangements with our NEOs. Change in Control, Cause, and Good Reason for each individual are defined below. Other capitalized terms not defined below have the meaning assigned to them in such individual’s agreement. For more information on termination and other severance payment rights of each NEO, see “Potential Payments Upon Termination or Change in Control” herein.
David T. Provost Executive Employment Agreement
On December 13, 2020, we entered into an employment agreement with Mr. Provost for an initial two (2)–year period (extending for an additional two (2)–year period from the date of a Change in Control). Under Mr. Provost’s employment agreement, he is entitled to receive:
•an annual salary of at least $1.00, subject to annual review and adjustment;
•participation in annual bonus opportunity and equity programs starting in calendar year 2021, with a target bonus opportunity of $950,000;
•participation in long-term equity or equity-based incentive programs, with an annual aggregate grant date target value equal to at least $1.9 million;
•participation in the same benefit plans as apply to TCF’s senior executives generally on the same terms and conditions; and
•certain specified perquisites, including an auto allowance and payment of certain membership fees.
If Mr. Provost’s employment is terminated by TCF without Cause or by him for Good Reason (each a “qualifying termination”), not within six (6) months before or two (2) years after a Change in Control, subject to the execution of a release, Mr. Provost will be eligible to receive:
•the sum of (i) the greater of (a) $1.9 million and (b) two (2.0) times his then base salary, plus (ii) two (2.0) times the average of his bonuses under TCF’s annual incentive plan for each of the three (3) most recently completed calendar years of his employment with TCF (with each such bonus calculated at the higher of $1.5 million and actual bonus paid);
•twelve (12) months of outplacement services through an external firm following termination; and
•a lump sum health care stipend of $10,000 that may be used for any purpose.
In addition, under his employment agreement, in the event Mr. Provost (i) is terminated by TCF without Cause, (ii) terminates his employment for Good Reason, (iii) dies, (iv) is terminated due to a Disability or (v) retires on one (1) year’s advance notice, all equity-based awards will be treated as follows: all unvested stock options will immediately vest, the restrictions on all time-vesting restricted stock will lapse, all TRSUs will immediately vest, and all PRSUs will be settled at one hundred percent (100%) of target.
Under his employment agreement, if Mr. Provost experiences a qualifying termination within two (2) years following a Change in Control, or within six (6) months before the date of a Change in Control, subject to the execution of a release, he will be entitled to change in control severance as follows:
•the sum of (i) the greater of (a) $2.85 million and (b) three (3.0) times his then base salary, plus (ii) three (3.0) times the average of his bonuses under TCF’s annual executive incentive plan for each of the three (3) most recently completed calendar years of his employment with TCF, payable in one lump sum cash payment (with each such bonus calculated at the higher of $1.5 million and actual bonus paid);
•twelve (12) months of outplacement services through an external firm following termination; and
•a lump sum health care stipend of $10,000 that may be used for any purpose.
In addition, upon a qualifying termination within two (2) years following a Change in Control, any outstanding unvested stock options on the employment termination date will one hundred percent (100%) vest, any remaining unvested TRSUs will automatically one hundred percent (100%) vest, and any unvested PRSUs automatically will vest (converted at the greater of target and the level of achievement of actual performance) at one hundred percent (100%).
Under his employment agreement, Mr. Provost agreed to covenants of confidentiality, non-competition, non-solicitation and non-disparagement.
Craig R. Dahl Amended and Restated Employment and Separation and Release Agreements
Amended and Restated Employment Agreement
On November 6, 2019, we entered into an amended and restated employment agreement with Mr. Dahl, pursuant to which he was entitled to receive:
•an annual salary of at least $1,050,000, subject to annual review and increase;
•annual target bonus opportunity that is no less than 100% of base salary;
•annual equity-based award with a target value equal to 200% of base salary; and
•perquisites including but not limited to an auto allowance and payment of certain membership fees.
In addition, if Mr. Dahl’s employment was terminated by TCF without Cause or by Mr. Dahl for Good Reason, subject to Mr. Dahl’s execution and non-revocation of a release of claims, Mr. Dahl was eligible to receive:
•a lump sum equal to 2.5 times the sum of (i) his annual base salary and (ii) the average of his annual bonus for the three most recently completed fiscal years;
•any earned but unpaid annual bonus;
•the acceleration and vesting of all outstanding equity awards; and
•payment of monthly COBRA insurance premiums for up to twenty-four months.
Separation and Release Agreement
In connection with Mr. Dahl’s departure, TCF and Mr. Dahl entered into a separation and release agreement (the “Dahl separation agreement”) effective as of October 27, 2020, pursuant to which Mr. Dahl received (a) one lump sum payment of $11,213,931, less applicable withholding taxes, and (b) payments totaling $1,500,000, less applicable withholding taxes, payable in equal monthly installments on the first day of each month for a period of eighteen months, commencing on May 1, 2021. Mr. Dahl’s separation was a Termination without Cause, and any outstanding unvested equity awards vested automatically at one hundred percent (100%) in accordance with his employment agreement.
Mr. Dahl’s right to receive the benefits described in the Dahl separation agreement are in lieu of any other compensation and is conditioned upon his compliance with the non-competition and non-solicitation restrictions set forth in the Dahl separation agreement and employment agreement.
Brian W. Maass Employment Agreement
On December 13, 2020, we entered into an amended and restated employment agreement with Brian Maass, our Chief Financial Officer, that amended and restated his prior executive employment agreement with TCF, dated December 13, 2019, which will continue through December 13, 2022, and automatically renews for successive one-year periods unless either party provides the other party with notice of intention to terminate at least 30 days before an anniversary of the effective date. Under Mr. Maass’ employment agreement, he is entitled to receive:
•an annual salary of at least $575,000, subject to annual review and adjustment;
•annual cash incentive opportunity with a target value equal to 100% of base salary;
•an annual equity-based award with a target value equal to 150% of base salary;
•participation in the same benefit plans as apply to TCF salaried employees generally, and on the same terms and conditions; and
•certain specified perquisites, including an auto allowance and payment of certain membership fees.
If Mr. Maass’ employment is terminated by TCF without Cause or by him for Good Reason, each a qualifying termination, not within six months before or two years after a Change in Control, subject to his execution and non-revocation of a release of claims, Mr. Maass will be eligible to receive:
•1.5 times the sum of (i) his then current base salary and (ii) the average of his annual bonus for the three most recently completed calendar years, payable in equal installments over 78 weeks; provided, that, Mr. Maass will not be entitled to such severance payment if he experiences a qualifying termination within two years of the TCF/Chemical merger date;
•12 months of outplacement services through an external firm following termination; and
•A lump sum health care stipend of $10,000.
Upon a qualifying termination within six (6) months before or two (2) years following a Change in Control (not to include the TCF/Chemical merger), Mr. Maass will be eligible to receive:
•2.0 times the sum of (i) his then current base salary and (ii) the average of his annual bonus for the three most recently completed calendar years;
•12 months of outplacement services through an external firm following termination; and
•A lump sum health care stipend of $10,000.
Under his employment agreement, if Mr. Maass experiences a qualifying termination within two years following a Change in Control, or within six months before the date of a Change in Control, we will pay him the above-described severance payment in a lump sum cash payment; provided, that, the TCF/Chemical merger will not constitute a Change in Control. In addition, if he experiences a qualifying termination after the Change in Control, his outstanding equity awards will vest as described below, except that PRSUs will vest at the greater of target or actual performance.
Under Mr. Maass’ employment agreement, he is not entitled to any additional severance payments in the event of his termination due to death, Disability or Retirement with one year’s advance notice.
In addition, under his employment agreement, in the event he (a) is terminated by us without Cause, (b) terminates his employment for Good Reason, (c) dies, (d) is terminated due to a Disability, or (e) retires on one year’s advance notice, all equity-based awards will be treated as follows: all unvested stock options will immediately vest, the restrictions on all time-vesting restricted stock will lapse, all TRSUs will immediately vest and be convertible into shares of our common stock, and all PRSUs will be settled at 100% of target.
Dennis L. Klaeser Employment Agreement and Consulting Agreement
Employment and Letter Agreement
On July 1, 2018, we entered into an employment agreement with Mr. Klaeser, effective July 1, 2018, which was supplemented by his letter agreement dated December 13, 2019. The employment agreement, as supplemented by the letter agreement, continued through October 1, 2020, when he incurred a Termination without Cause and received Change in Control Severance Pay as defined in his employment agreement. Under Mr. Klaeser’s employment agreement, as supplemented, he was entitled to receive:
•an annual salary of $750,000, subject to annual review and adjustment;
•annual target bonus opportunity that is no less than 80% of base salary;
•annual equity-based award with a target value equal to 80% of base salary
•perquisites including but not limited to an auto allowance and payment of certain membership fees; and
•participation in the same benefits plans as apply to TCF senior executives generally, and on the same terms and conditions.
When Mr. Klaeser’s employment ended on October 1, 2020, he received the following Change in Control Severance Pay:
•a lump sum payment equal to two times the sum of (a) his then current Base Salary and (b) the average of his annual bonus for the three most recently completed calendar years;
•his pro rata bonus for 2020;
•the acceleration and vesting of all outstanding equity awards;
•12 months of outplacement services through an external firm following termination; and
•a lump sum health care stipend of $10,000
Consulting Agreement
On August 5, 2020, we entered into a consulting agreement with Mr. Klaeser (the “Klaeser consulting agreement”). The Klaeser consulting agreement has a two (2)-year term that commenced on October 2, 2020, and provides that Mr. Klaeser will receive an annual fee equal to $215,000 as compensation for providing consulting services in connection with strategic matters for TCF. In addition, Mr. Klaeser is eligible to receive a success fee for each successful transaction for which Mr. Klaeser provides material support during the term of the Klaeser consulting agreement. Any success fee is calculated in accordance with the terms of the Klaeser consulting agreement. In connection with the Huntington merger, Mr. Klaeser will receive a success fee in satisfaction of the obligations under the Klaeser consulting agreement upon consummation of the Huntington merger, subject to certain conditions.
Gary Torgow Executive Employment Agreement
On December 13, 2020, we entered into an employment agreement with Mr. Torgow that supersedes his prior amended and restated retention agreement with TCF, dated March 10, 2020 (the “retention agreement”). Mr. Torgow’s employment agreement provides for an initial two (2)–year period (extending for an additional two (2)–year period from the date of a “Change in Control” (as defined in his employment agreement)). Under Mr. Torgow’s employment agreement, he is entitled to receive:
•an annual salary of $950,000, subject to annual review and increase;
•annual target bonus opportunity that is equal to 100% of base salary;
•annual equity-based award with a target value equal to 200% of base salary;
•participation in the same benefit plans as apply to TCF’s senior executives generally on the same terms and conditions; and
•certain specified perquisites, including an auto allowance and payment of certain membership fees.
If Mr. Torgow’s employment is terminated by TCF without “Cause” or by him for “Good Reason” (each as defined in his employment agreement, and each a “qualifying termination”), not within six (6) months before or two (2) years after a Change in Control, subject to the execution of a release, Mr. Torgow will be eligible to receive:
•the sum of (i) two (2.0) times his then base salary, plus (ii) two (2.0) times the average of his bonuses under TCF’s annual executive inventive plan for each of the three (3) most recently completed calendar years of his employment with TCF (with each such bonus calculated at the higher of $1.5 million and actual bonus paid), payable in one lump sum cash payment;
•twelve (12) months of outplacement services through an external firm following termination; and
•a lump sum health care stipend of $10,000 that may be used for any purpose.
In addition, under his employment agreement, in the event Mr. Torgow (i) is terminated by TCF without Cause, (ii) terminates his employment for Good Reason, (iii) dies, (iv) is terminated due to a Disability or (v) retires on one (1) year’s advance notice, all equity-based awards will be treated as follows: all unvested stock options will immediately vest, the restrictions on all time-vesting restricted stock will lapse, all TRSUs will immediately vest, and all PRSUs will be settled at one hundred percent (100%) of target.
Under his employment agreement, if Mr. Torgow experiences a qualifying termination within two (2) years following a Change in Control, or within six (6) months before the date of a Change in Control, subject to the execution of a release, he will be entitled to change in control severance as follows:
•the sum of (i) three (3.0) times his then base salary, plus (ii) three (3.0) times the average of his bonuses under TCF’s annual executive inventive plan for each of the three (3) most recently completed calendar years of his employment with TCF (with each such bonus calculated at the higher of $1.5 million and actual bonus paid), payable in one lump sum cash payment;
•twelve (12) months of outplacement services through an external firm following termination; and
•a lump sum health care stipend of $10,000 that may be used for any purpose.
In addition, upon a qualifying termination within two (2) years following a Change in Control, any outstanding unvested stock options on the employment termination date will one hundred percent (100%) vest, any remaining unvested TRSUs will automatically one hundred percent (100%) vest, and any unvested PRSUs automatically will vest (converted at the greater of target and the level of achievement of actual performance) at one hundred percent (100%).
Thomas C. Shafer Amended and Restated Employment Agreement
On December 13, 2020, we entered into an amended and restated employment agreement with Mr. Shafer that amended and restated his prior employment agreement with TCF, dated July 31, 2019. Mr. Shafer’s amended and restated employment agreement provides for an initial two (2)–year period, and automatically renews for successive one (1)- year periods unless either party provides the other party with notice of intention to terminate at least 30 days before an anniversary of the effective date, in which case the agreement will terminate at the end of the then-current term. Under Mr. Shafer’s employment agreement, he is entitled to receive:
•an annual salary of $950,000, subject to annual review and adjustment;
•annual target bonus opportunity that is no less than 100% of base salary;
•annual equity-based award with a target value equal to 200% of base salary;
•participation in the same benefit plans as apply to TCF’s senior executives generally on the same terms and conditions; and
•certain specified perquisites, including an auto allowance and payment of certain membership fees.
If Mr. Shafer’s employment is terminated by TCF without Cause or by him for Good Reason, each a qualifying termination, not within six months before or two years after a Change in Control, subject to his execution and non-revocation of a release of claims, Mr. Shafer will be eligible to receive:
•two times the sum of (a) his then current base salary and (b) the average of his annual bonus for the three most recently completed fiscal years (with each such bonus calculated at the higher of $1.5 million and actual bonus paid), payable in equal installments over 104 weeks; provided, that, Mr. Shafer will not be entitled to such severance payment if he experiences a qualifying termination within two years of the TCF/Chemical merger date;
•12 months of outplacement services through an external firm following termination; and
•a lump sum health care stipend of $10,000.
In addition, under his employment agreement, in the event he (a) is terminated by us without Cause, (b) terminates his employment for Good Reason, (c) dies, (d) is terminated due to a Disability, or (e) his Retirement on one year’s advance notice, all equity-based awards will be treated as follows: all unvested stock options will immediately vest, the restrictions on all time-vesting restricted stock will lapse, all TRSUs will immediately vest and be convertible into shares of our common stock, and all PRSUs will be settled at 100% of target.
Upon a qualifying termination within six (6) months before or two (2) years following a Change in Control, Mr. Shafer will be eligible to receive:
•the sum of (i) three (3.0) times his then base salary, plus (ii) three (3.0) times the average of his bonuses under TCF’s annual executive inventive plan for each of the three (3) most recently completed calendar years of his employment with TCF (with each such bonus calculated at the higher of $1.5 million and actual bonus paid), payable in one lump sum cash payment;
•twelve (12) months of outplacement services through an external firm following termination; and
•a lump sum health care stipend of $10,000 that may be used for any purpose.
In addition, upon a qualifying termination within two (2) years following a Change in Control, any outstanding unvested stock options on the employment termination date will one hundred percent (100%) vest, any remaining unvested TRSUs will automatically one hundred percent (100%) vest, and any unvested PRSUs automatically will vest (converted at the greater of target and the level of achievement of actual performance) at one hundred percent (100%).
Under Mr. Shafer’s employment agreement, he is not entitled to any additional severance payments in the event of his termination due to death, Disability or Retirement with one year’s advance notice.
Michael S. Jones Employment Agreement
On December 13, 2020, we entered into an amended and restated employment agreement with Michael Jones, our Senior Executive Vice President of TCF and President and Chief Operating Officer of TCF Bank, that amended and restated his prior executive employment agreement with TCF, dated August 1, 2019, which will continue through December 13, 2022, and automatically renews for successive one-year periods unless either party provides the other party with notice of intention to terminate at least 30 days before an anniversary of the effective date. Under Mr. Jones’ employment agreement, he is entitled to receive:
•an annual salary of at least $665,000, subject to annual review and adjustment;
•annual cash incentive opportunity and long-term incentive awards, at levels commensurate with his position; and
•participation in the same benefit plans as apply to TCF salaried employees generally, and on the same terms and conditions
If Mr. Jones’ employment is terminated by TCF without Cause or by him for Good Reason, each a qualifying termination, not within six months before or two years after a Change in Control, subject to his execution and non-revocation of a release of claims, Mr. Jones will be eligible to receive:
•1.5 times the sum of (i) his then current base salary and (ii) the average of his annual bonus for the three most recently completed calendar years, payable in equal installments over 78 weeks; provided, that, Mr. Jones will not be entitled to such severance payment if he experiences a qualifying termination within two years of the TCF/Chemical merger date;
•12 months of outplacement services through an external firm following termination; and
•a lump sum health care stipend of $10,000.
Upon a qualifying termination within six (6) months before or two (2) years following a Change in Control, Mr. Jones will be eligible to receive:
•2.0 times the sum of (i) his then current base salary and (ii) the average of his annual bonus for the three most recently completed calendar years; provided, that, Mr. Jones will not be entitled to such severance payment if he experiences a qualifying termination within two years of the TCF/Chemical merger date;
•12 months of outplacement services through an external firm following termination; and
•a lump sum health care stipend of $10,000.
Under his employment agreement, if Mr. Jones experiences a qualifying termination within two years following a Change in Control, or within six months before the date of a Change in Control, we will pay him the above-described severance payment in a lump sum cash payment; provided, that, the TCF/Chemical merger will not constitute a Change in Control. In addition, if he experiences a qualifying termination after the Change in Control, his outstanding equity awards will vest as described below, except that PRSUs will vest at the greater of target or actual performance.
Under Mr. Jones’ employment agreement, he is not entitled to any additional severance payments in the event of his termination due to death, Disability or Retirement with one year’s advance notice.
In addition, under his employment agreement, in the event he (a) is terminated by us without Cause, (b) terminates his employment for Good Reason, (c) dies, (d) is terminated due to a Disability, or (e) his Retirement on one year’s advance notice, all equity-based awards will be treated as follows: all unvested stock options will immediately vest, the restrictions on all time-vesting restricted stock will lapse, all TRSUs will immediately vest and be convertible into shares of our common stock, and all PRSUs will be settled at 100% of target.
Definitions under Employment, Separation, and Consulting Agreements
Definitions of “Change in Control”
For purposes of the employment agreements with Messrs. Provost, Klaeser, Torgow, Shafer, Maass and Jones, a Change in Control is deemed to occur upon: (a) the acquisition by a party of 40% or more of the voting stock of TCF’s then-outstanding securities; (b) holders of TCF common stock approving a merger or acquisition that results in TCF’s voting stock representing less than 60% of the shares outstanding immediately prior to such merger or acquisition; (c) a majority of the members of TCF’s Board are replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of appointment or election; or (d) the acquisition by a party of TCF’s assets that have a total gross fair market value equal to or exceeding forty percent (40%) of the total gross fair market value of TCF’s assets in a single transaction or within a 12-month period ending with the most recent acquisition.
For purposes of Mr. Dahl’s employment agreement, a Change in Control is deemed to occur upon: (a) the acquisition by a party of 40% or more of the voting stock of TCF’s then-outstanding securities; (b) a change in a majority of our Board over a two-year period (other than if such Directors were nominated by at least two-thirds of the Directors who were Directors at the beginning of the period, or whose nomination was so approved); or (c) holders of TCF common stock approving (i) a merger or acquisition that results in TCF’s voting stock representing less than 60% of the shares outstanding immediately prior to such merger or acquisition, (but, a change of control will not be deemed to have occurred if the merger, consolidation, sale or disposition of assets is not subsequently consummated), (ii) a plan of complete liquidation of TCF, or (iii) an agreement for the sale of all or substantially all of TCF’s assets.
Definitions of “Cause” and “Good Reason”
For purposes of the employment agreements with Messrs. Provost, Klaeser, Torgow, Shafer, Maass and Jones, “Cause” generally means: (a) removal by order of a regulatory agency having jurisdiction over TCF; (b) executive’s material breach of any provision in the employment agreement, which continues uncured after 20 days’ written notice from TCF; (c) executive’s failure or refusal to materially perform all lawful services required of executive by his employment position, which failure continues after 20 days’ written notice from TCF; (d) executive’s commission of fraud, embezzlement, theft, or a crime constituting moral turpitude, which, in the reasonable good-faith judgment of the Board, renders continued employment harmful to TCF; (e) executive’s misappropriation of TCF assets or property; or (f) executive’s conviction with respect to any felony or other crime which, in the reasonable good faith judgment of TCF’s Board, adversely affects TCF and its reputation.
For purposes of Mr. Dahl’s employment agreement, “Cause” generally includes: (a) the deliberate and continued failure to devote substantially all business time and best efforts to the performance of duties after 30 days’ written notice from the Board; (b) a deliberate and material violation of reasonable and lawful instructions of the Board; (c) gross misconduct; (d) conviction of a felony or any criminal charge involving moral turpitude and all appeals from such conviction have been exhausted; or (e) failure or refusal to comply with a reasonable and lawful policy, standard or regulation of TCF in any material respect, relating to sexual harassment, other unlawful harassment or workplace discrimination.
For purposes of Messrs. Provost’s, Torgow’s, and Shafer’s, employment agreements, “Good Reason” generally means: (a) any material reduction in executive’s aggregate compensation or benefits, without a corresponding reduction to the base salaries of other TCF executives if such were made prior to a Change in Control; (b) any material reduction in executive’s status, position or responsibilities, including service on the Board; (c) any requirement (without executive’s consent) that he be principally based at any office or location more than 60 miles from executive’s principal work location as of the effective date of the agreement or (d) any material breach of the agreement by TCF.
For purposes of Messrs. Klaeser’s, Maass’, and Jones’ employment agreements, “Good Reason” generally means: (a) any material reduction in executive’s base salary, as it may be adjusted, without a corresponding reduction to the base salaries of other TCF executives; (b) any material reduction in executive’s status, position or responsibilities, including service on the Board; (c) any requirement (without executive’s consent) that he be principally based at any office or location more than 60 miles from executive’s principal work location as of the effective date of the agreement; or (d) any material breach of the agreement by TCF.
For purposes of Mr. Dahl’s employment agreement, “Good Reason” generally means: (a) any material diminution in the scope of his authority and responsibility; (b) a material diminution in his base compensation, including bonus opportunity, benefits or perquisites; (c) a material change in geographic location at which he must perform the services; (d) requiring Mr. Dahl to report to a supervisor other than TCF’s Board; or (e) any other action or inaction that constitutes a material breach by TCF of the agreement. Additionally, under Mr. Dahl’s employment agreement, “Good Reason” also includes the failure of any acquirer of or successor to TCF to assume the obligations of TCF under Mr. Dahl’s employment agreement in connection with a change in control.
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Potential Payments Upon Termination or Change in Control
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Each of our employment agreements with Messrs. Provost, Torgow, Shafer, Maass, and Jones provide for certain severance payments upon termination of employment and upon a qualifying termination following a change in control of TCF, but not including our TCF/Chemical merger, each subject to the executive’s execution of a general release and waiver of claims against us or our affiliates.
Potential Post-Employment Payments Due to Our Named Executive Officers
The following table shows potential post-employment payments due to each NEO upon termination from TCF under various circumstances, including a change in control of the Company, assuming that those events occurred on December 31, 2020. For purposes of the table, a “Qualifying Termination upon a Change in Control” means the executive’s termination without Cause by us or executive’s termination of his employment for Good Reason, each within six months before or two years after a Change in Control. We report amounts in the table without any reduction for possible delay in the commencement or timing of payments. For Messrs. Dahl and Klaeser, the table below sets forth the actual payments and estimated benefits received in connection with Mr. Dahl’s departure from TCF on October 27, 2020 and Mr. Klaeser’s departure on October 1, 2020.
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Acceleration of Vesting
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Termination Scenario
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Cash Payments(1) ($)
|
Benefits(2) ($)
|
Stock Options(3) ($)
|
TRSUs(4)
($)
|
PRSUs(5)
($)
|
Restricted
Stock
Awards
($)
|
Total
($)
|
David T. Provost
|
|
|
|
|
|
|
|
Termination For Cause or Retirement without Notice
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Retirement with Notice(8)
|
—
|
—
|
—
|
—
|
—
|
—
|
|
—
|
|
Death or Disability
|
—
|
—
|
—
|
—
|
—
|
—
|
|
—
|
|
Without Cause
|
4,910,000
|
|
25,000
|
—
|
—
|
—
|
—
|
|
4,935,000
|
|
Good Reason
|
4,910,000
|
|
25,000
|
—
|
—
|
—
|
—
|
|
4,935,000
|
|
Qualifying Termination Upon a Change in Control
|
7,360,000
|
25,000
|
—
|
—
|
—
|
—
|
|
7,385,000
|
|
Craig R. Dahl
|
|
|
|
|
|
|
|
Termination For Cause or Retirement without Notice
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Retirement with Notice
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Death or Disability
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Without Cause
|
11,213,931
|
—
|
—
|
2,593,905
|
2,185,595
|
564,293(6)
|
16,557,724
|
|
Good Reason
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Qualifying Termination Upon a Change in Control
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian W. Maass
|
|
|
|
|
|
|
|
Termination For Cause or Retirement without Notice
|
8,846
|
—
|
—
|
—
|
—
|
—
|
8,846
|
|
Retirement with Notice(7)
|
8,846
|
—
|
—
|
—
|
—
|
—
|
8,846
|
|
Death or Disability
|
8,846
|
—
|
—
|
1,467,917
|
1,278,338
|
376,012(6)
|
3,131,113
|
Without Cause
|
1,726,057
|
25,000
|
—
|
1,467,917
|
1,278,338
|
376,012(6)
|
4,873,324
|
|
Good Reason
|
1,726,057
|
25,000
|
—
|
1,467,917
|
1,278,338
|
376,012(6)
|
4,873,324
|
|
Qualifying Termination Upon a Change in Control
|
2,295,127
|
25,000
|
—
|
1,467,917
|
1,278,338
|
376,012(6)
|
5,442,394
|
|
Dennis L. Klaeser
|
|
|
|
|
|
|
|
Termination For Cause or Retirement without Notice
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Retirement with Notice
|
—
|
—
|
—
|
—
|
—
|
|
—
|
|
—
|
|
Death or Disability
|
—
|
—
|
—
|
—
|
—
|
|
—
|
|
—
|
|
Without Cause
|
—
|
—
|
—
|
—
|
—
|
|
—
|
|
—
|
|
Good Reason
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Qualifying Termination Upon a Change in Control
|
3,266,267
|
—
|
—
|
587,774
|
895,756
|
—
|
4,749,797
|
|
Gary Torgow
|
|
|
|
|
|
|
|
Termination For Cause or Retirement without Notice
|
14,615
|
—
|
—
|
—
|
—
|
—
|
14,615
|
|
Retirement with Notice(8)
|
14,615
|
—
|
—
|
3,375,134
|
3,999,455
|
—
|
7,389,204
|
|
Death or Disability
|
14,615
|
—
|
—
|
3,375,134
|
3,999,455
|
—
|
7,389,204
|
|
Without Cause
|
4,924,615
|
25,000
|
—
|
3,375,134
|
3,999,455
|
—
|
12,324,204
|
|
Good Reason
|
4,924,615
|
25,000
|
—
|
3,375,134
|
3,999,455
|
—
|
12,324,204
|
|
Qualifying Termination Upon a Change in Control
|
7,374,615
|
25,000
|
—
|
3,375,134
|
3,999,455
|
—
|
14,774,204
|
|
Thomas C. Shafer
|
|
|
|
|
|
|
|
Termination For Cause or Retirement without Notice
|
14,615
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,615
|
|
Retirement with Notice(8)
|
14,615
|
|
—
|
|
—
|
|
3,250,629
|
|
1,583,826
|
|
—
|
|
4,849,071
|
|
Death or Disability
|
14,615
|
|
—
|
|
—
|
|
3,250,629
|
|
1,583,826
|
|
—
|
|
4,849,071
|
|
Without Cause
|
4,924,615
|
|
25,000
|
|
—
|
|
3,250,629
|
|
1,583,826
|
|
—
|
|
9,784,071
|
|
Good Reason
|
4,924,615
|
|
25,000
|
|
—
|
|
3,250,629
|
|
1,583,826
|
|
—
|
|
9,784,071
|
|
Qualifying Termination Upon a Change in Control
|
7,374,615
|
|
25,000
|
|
—
|
|
3,250,629
|
|
1,583,826
|
|
—
|
|
12,234,071
|
|
Michael S. Jones
|
|
|
|
|
|
|
|
Termination For Cause or Retirement without Notice
|
10,231
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10,231
|
|
Retirement with Notice(7)
|
10,231
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10,231
|
|
Death or Disability
|
10,231
|
|
—
|
|
—
|
|
1,422,345
|
|
1,572,054
|
|
301,972(6)
|
3,306,602
|
|
Without Cause
|
2,133,577
|
|
25,000
|
|
—
|
|
1,422,345
|
|
1,572,054
|
|
301,972(6)
|
5,454,949
|
|
Good Reason
|
2,133,577
|
|
25,000
|
|
—
|
|
1,422,345
|
|
1,572,054
|
|
301,972(6)
|
5,454,949
|
|
Qualifying Termination Upon a Change in Control
|
2,838,026
|
|
25,000
|
|
—
|
|
1,422,345
|
|
1,572,054
|
|
301,972(6)
|
6,159,397
|
|
(1)Represents any unpaid salary plus cash payments pursuant to the executive employment agreements described above as follows:
•Mr. Provost: In the event of a termination without Cause or for Good Reason (unrelated to a qualifying termination upon a Change in Control), two times $1.9 million (the higher of $1.9 million and two times Mr. Provost’s base salary), plus two times $1.5 million (the higher of $1.5 million and the average of the last three actual bonuses paid), plus $10,000 health care stipend that may be used for any purpose. In the event of a qualifying termination upon a Change in Control, three times $2.85 million (the higher of $2.85 million and three times Mr. Provost’s base salary), plus three times $1.5 million, plus $10,000 health care stipend that may be used for any purpose.
•Mr. Dahl: represents $11,213,931 paid pursuant to his separation and release agreement.
•Messrs. Torgow, and Shafer: In the event of a termination without Cause or for Good Reason (unrelated to a qualifying termination upon a Change in Control), two times the executives’ base salary, plus two times $1.5 million (the higher of $1.5 million and the average of the last three actual bonuses paid), plus $10,000 health care stipend that may be used for any purpose. In the event of a qualifying termination upon a Change in Control, three times the executives’ base salary plus three times $1.5 million (the higher of $1.5 million and the average of the last three actual bonuses paid), plus $10,000 health care stipend that may be used for any purpose.
•Messrs. Maass and Jones: In the event of a termination without Cause or for Good Reason (unrelated to a qualifying termination upon a Change in Control), 1.5 times the executive’s base salary plus the average of the executive’s cash bonuses under our annual cash incentive plan for each of the most recent three complete calendar years (or such lesser number of completed calendar years that the executive has been employed by us), plus $10,000 health care stipend that may be used for any purpose. In the event of a qualifying termination upon a Change in Control, two times the executive’s base salary plus the average of the executive’s cash bonuses under our annual cash incentive plan for each of the most recent three complete calendar years (or such lesser number of completed calendar years that executive has been employed by us).
•Mr. Klaeser: represents Change in Control Severance paid pursuant to his employment agreement, as supplemented, consisting of two times the executive’s base salary plus the average of the executive’s cash bonuses under our annual cash incentive plan for each of the most recent three complete calendar years.
(2)Includes the value of executive-level outplacement services for a period not to exceed 12 months, estimated at $25,000.
(3)Mr. Shafer is the only named executive officer with unvested stock options; however, none were in-the-money at December 31, 2020.
(4)Amount represents the market value, including dividend equivalents and accrued cash dividends as applicable, of the full vesting of unvested TRSUs in accordance with each of the NEO’s employment agreements or separation agreements. The valuation of these awards is based on the closing price of our common stock as reported on Nasdaq of $37.02 per share on December 31, 2020.
(5)Amount represents the market value, excluding dividend equivalents, of unvested PRSUs that were granted in 2020 with vesting assumed to be target, and unvested PRSUs that were converted into earned PRSUs as of the TCF/Chemical merger date. The earned PRSUs granted to Messrs. Klaeser, Torgow and Shafer in 2018 and 2019, as applicable, were converted into earned PRSUs at rates equal to 112.5% and 100%, respectively, of the target number of shares on the TCF/Chemical merger date. The Legacy TCF PRSUs granted to Messrs. Dahl, Maass and Jones in 2018 and 2019 were converted into earned PRSUs at rates equal to 150% and 100%, respectively, of the target number of shares on the TCF/Chemical merger date. The market value of these awards is based on the closing price of our common stock as reported on Nasdaq of $37.02 per share on December 31, 2020.
(6)Amount represents the market value of unvested Legacy TCF restricted stock awards that were converted as of the TCF/Chemical merger date. The awards did not include dividend rights for unvested shares. The market value of these awards is based on the closing price of our common stock as reported on Nasdaq of $37.02 per share on December 31, 2020. Represents full vesting of the Legacy TCF restricted stock awards under the executive’s employment agreement or award agreement, as applicable.
(7)Under Messrs. Maass’ and Jones’ employment agreements, neither executive is eligible for Retirement with one year’s advance notice because neither are yet 55 years of age.
(8)Assumes one year’s advance notice. Pursuant to Messrs. Provost’s, Torgow’s and Shafer’s employment agreements, the executive is eligible for retirement with at least ten (10) years of service with TCF (including service with legacy banks if TCF recognizes such service in the executive’s original hire date) on or after reaching age fifty-five (55).
The following pay ratio and supporting information compares the annual total compensation of our employees other than our CEO (including full-time, part-time, seasonal and temporary employees) and the combined total compensation of Messrs. Provost and Dahl for the time each served as our CEO during 2020, as required by regulations promulgated pursuant to Section 953(b) of the Dodd-Frank Act. The pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
Since two individuals served as our CEO during 2020, we combined the annual total compensation of each of Mr. Provost and Mr. Dahl (for the time each served as CEO) pursuant to Instruction 10 to Item 402(u) of Regulation S-K in order to arrive at the annual total combined compensation of $15,338,499. Mr. Dahl had annual total compensation of $15,338,498, which includes base salary, stock awards, perquisites and severance as shown in the Summary Compensation Table herein. Mr. Provost had annual total compensation as CEO of $1.00 which includes base salary only, since the bulk of Mr. Provost’s compensation and severance was paid prior to his assuming the role of CEO on October 28, 2020.
For 2020, the median of the annual total compensation of all employees of our company (other than our CEO) was $51,900. The median employee that was used for 2020 is the same employee that was identified for purposes of our 2019 disclosure since there has been no change in our employee population or employee compensation arrangements since that median employee was identified that we believe would significantly impact our pay ratio disclosure.
Based on this information, the ratio of the total compensation of our CEO to the median of the annual total compensation of all other employees was 296 to 1.
To determine the pay ratio, we took the following steps:
We determined that as of December 31, 2019, the determination date, our employee population consisted of approximately 8,022 individuals, primarily located in the United States, but including our Canadian employees. This population consists of full-time, part-time, temporary and seasonal employees of TCF and each of its direct and indirect subsidiaries. However, it does not include independent contractors who were employed by and had their compensation determined by unaffiliated third parties. To identify the “median employee” from our employee population, we compared the wages of our employees as reflected in our payroll records and reported in Box 5, Medicare Wages, to the Internal Revenue Service on Form W-2 for 2019. Because we offer a variety of compensation arrangements to our employees, including base salary, bonus, commissions and other incentive arrangements, we believe this was the most appropriate and comprehensive methodology for capturing the many different compensation arrangements we offer. We identified our median employee using this compensation measure, which was consistently applied to all of our employees included in the calculation.
We annualized the compensation of employees that we hired in 2019, who were not employed for the full year (including the employees we assumed in connection with our Merger), by dividing their 2019 W-2 Box 5, Medicare Wages, by (a) the number of regular hours they worked in 2019, plus (b) the number of overtime hours they worked in 2019 times 1.5, and then multiplied the result by their full-time or part-time standard annual hours. We annualized compensation for part-time employees without making a full-time equivalent adjustment for part-time employees. Amounts paid in Canadian dollars were converted to U.S. dollars using the 2019 12-month average exchange rate. We used first quarter wages to annualize the compensation for three Legacy TCF employees that were on leave after the TCF/Chemical merger date.
Once we identified our median employee, we calculated such employee’s annual total compensation for 2020 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $51,900.
To calculate Mr. Dahl’s compensation as part-year CEO, we calculated the sum of Mr. Dahl’s: (i) base salary, (ii) stock awards granted in 2020, (iii) any actual change in pension value for 2020, and (iv) all other compensation reportable pursuant to Item 402(c)(2)(ix) paid to Mr. Dahl. To calculate Mr. Provost’s compensation as part-year CEO, we calculated the base salary he received as CEO beginning on October 28, 2020 (other compensation paid to Mr. Provost was paid prior to his appointment as CEO).
Due to the departure of Mr. Dahl on October 27, 2020, we do not anticipate similar severance amounts paid to Mr. Dahl to be included in annual total compensation paid to our CEO in future years. To illustrate what we believe would be the truest reflection of our CEO total compensation for 2020 and the ratio of that compensation to that of our median employee, we created an adjusted CEO compensation total using Mr. Dahl’s: (i) base salary annualized for 2020, (ii) stock awards granted in 2020, (iii) any actual change in pension value for 2020, (iv) all other compensation reportable pursuant to Item 402(c)(2)(ix) paid to Mr. Dahl (excluding any severance payments), and (v) his annual incentive plan award calculated at 90% of target which is consistent with the payments made to our NEOs except for Mr. Torgow. This calculation resulted in annual total compensation of $5,201,753. Using this calculation, the ratio of the total compensation of our CEO to the median of the annual total compensation of all other employees would be 100 to 1.
TCF’s compensation of non-employee Directors in 2020, including cash and other non-cash compensation, is shown in the following table. Upon his departure from employment in May, Mr. Provost was granted a non-employee director stock award and received cash compensation for the time he served as a non-employee director prior to being named CEO on October 28, 2020. These amounts for Mr. Provost are included in the Summary Compensation Table. Mr. Torgow and Mr. Shafer are executive officers of TCF and do not receive any compensation for their service as Director.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Fees Earned or Paid in Cash ($)(1)
|
Stock Awards ($)(2)
|
All Other Compensation ($)(3)
|
Total ($)
|
Peter Bell
|
100,000
|
100,013
|
|
13,750
|
|
213,763
|
|
Karen L. Grandstrand
|
100,000
|
100,013
|
|
17,000
|
|
217,013
|
|
Richard H. King
|
100,000
|
100,013
|
|
15,000
|
|
215,013
|
|
Ronald A. Klein
|
100,000
|
100,013
|
|
20,000
|
|
220,013
|
|
Barbara J. Mahone
|
100,000
|
100,013
|
|
—
|
|
200,013
|
|
Barbara L. McQuade
|
100,000
|
100,013
|
|
11,000
|
|
211,013
|
|
Vance K. Opperman
|
100,000
|
100,013
|
|
—
|
|
200,013
|
|
Roger J. Sit
|
100,000
|
100,013
|
|
10,000
|
|
210,013
|
|
Julie H. Sullivan
|
100,000
|
100,013
|
|
16,000
|
|
216,013
|
|
Jeffrey L. Tate
|
100,000
|
100,013
|
|
20,000
|
|
220,013
|
|
Arthur A. Weiss
|
100,000
|
100,013
|
|
—
|
|
200,013
|
|
Franklin C. Wheatlake
|
100,000
|
100,013
|
|
20,000
|
|
220,013
|
|
Theresa M.H. Wise
|
100,000
|
100,013
|
|
—
|
|
200,013
|
|
(1)Represents the aggregate dollar amount of all fees earned or paid in cash for services as a Director, including any fees voluntarily deferred.
(2)Represents the grant date fair value computed in accordance with ASC 718. The amounts reported represent the annual equity retainer grants made to each Director on May 6, 2020. Dividends are accrued in cash at the rate paid to shareholders of TCF common stock, to be paid upon vesting on May 6, 2021.
(3)Includes matching charitable gift contributions by the TCF Foundation on behalf of Directors. The material terms regarding the matching charitable gift program are described below under “Material Information Regarding Directors’ Compensation.” The amounts for Messrs. Bell, King, Klein, Sit, Tate, Wheatlake, and Mses. Grandstrand, McQuade, and Dr. Sullivan reflect $13,750, $15,000, $20,000, $10,000, $20,000, $20,000, $17,000, $11,000, and $16,000 in contributions, respectively, made in 2020 that were matched by the TCF Foundation in 2020.
|
|
|
|
|
|
Material Information Regarding Directors’ Compensation
|
|
|
The following terms represent the structure of our Director compensation program:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Effective August 1, 2019
|
|
Annual Cash Retainer
|
|
|
$100,000
|
|
Annual Equity Retainer
|
|
|
$100,000
|
|
•Employee Directors (Messrs. Provost, Torgow and Shafer) are not compensated for service as Directors.
•Effective January 1, 2020, TCF offers the TCF Matching Gift Program to supplement donations made by non-employee Directors to charitable organizations of their choice up to a maximum of $20,000 annually.
•Non-employee Directors may defer fees and stock grants under the TCF Directors Deferred Compensation Plan (the “Directors Deferred Compensation Plan”) until the end of their Board service.
•Stock Ownership Guidelines:
–Non-employee Directors are required to own shares of TCF common stock worth an amount equal to five times their cumulative cash and equity retainers.
–All shares of TCF common stock owned directly or indirectly by a Director will be considered in determining whether the Stock Ownership Guidelines have been met. Stock options will not be counted toward the Stock Ownership Guidelines.
–Directors have until the fifth anniversary of their appointment to the Board to reach the applicable target ownership level.
•Indemnification rights are provided to Directors under TCF’s Articles of Incorporation and Bylaws, to the fullest extent permitted under the Michigan Business Corporation Act, and through Directors and Officers Insurance maintained by TCF.
•TCF reimburses Directors for travel and other expenses to attend Board meetings or attend to other Board business as a business expense.