COF-K Capital One Financial Corporation

Proxy Statement 2023 Capital One

Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information you should consider in voting your shares. Please read the complete proxy statement and our Annual Report to Stockholders for the fiscal year ended December 31, 2022 (“Annual Report”) carefully before voting.

How to Vote

Your vote is important. You may vote your shares in advance of the meeting via the Internet, by telephone, by mail, or in person at the 2023 Annual Stockholder Meeting. Please refer to the section “How do I vote?” on page 156 for detailed voting instructions. If you vote via the Internet, by telephone, or plan to vote in person at the 2023 Annual Stockholder Meeting, you do not need to mail in a proxy card.

 

INTERNET		TELEPHONE		MAIL		IN PERSON
Visit www.proxyvote.com. You will need the control number printed on your notice, proxy card, or voting instruction form.		If you received a paper copy of the proxy materials, dial toll-free (1-800-690-6903) or use the telephone number on your voting instruction form. You will need the control number printed on your proxy card or voting instruction form.		If you received a paper copy of the proxy materials, send your completed and signed proxy card or voting instruction form using the enclosed postage- paid envelope.		Follow the instructions under “Can I attend the 2023 Annual Stockholder Meeting?” on page 155 and request a ballot when you arrive at the meeting.

On March [    ], 2023, we began sending our stockholders a Notice Regarding the Internet Availability of Proxy Materials (“Notice”).

Voting Item 1: Election of Directors

Voting Item 2: Approval of Amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation to Remove Remaining Supermajority Voting Requirements and References to Signet Banking Corporation

Voting Item 4: Advisory Vote on Our Named Executive Officer Compensation (“Say on Pay”)

Our executive compensation program is designed to attract, retain, motivate, and reward leaders who can foster strong business results and promote our long-term success. We believe our executive compensation program strongly links rewards with both business and individual performance over multiple time horizons. We aim to align our executives’ interests with those of our stockholders while supporting safety and soundness and appropriately balancing risk.

2022 Company Performance

Each year the Compensation Committee (“Committee”) and the Independent Directors review and evaluate the Company’s qualitative and quantitative performance to make determinations regarding the compensation of our NEOs based on Capital One’s pay-for-performance philosophy. The Committee seeks to directly link the compensation of the NEOs with the Company’s performance and the executives’ contributions to that performance over multiple time horizons.

In 2022, Capital One delivered very strong financial results and made significant progress on our long-term strategic initiatives. We made long-term investments in transformation, talent, technology and digital capabilities, and risk management. Double-digit revenue growth, sound through-cycle underwriting, and strong credit performance drove near-record profitability, allowing the Company to invest for the future, distribute significant capital to stockholders, and maintain a strong balance sheet. Each of our major lines of business delivered solid growth and returns. Our Domestic Card business delivered very strong revenue growth, enabled by the increase in credit card loan balances and strong new accounts and record purchase volume. We continued to expand our national Consumer Bank franchise with 5.5% deposit growth, and we fully implemented our elimination of overdraft fees for our consumer banking customers, saving these customers hundreds of millions of dollars. Our Auto Finance and Commercial Bank businesses also delivered solid growth and returns while navigating an evolving competitive and economic environment.

Operating expenses increased, driven by economic factors, growth, and our continued investments in technology and talent. Our operating efficiency ratio⁽¹⁾⁽²⁾ improved 79 basis points to 44.2%, as revenue outpaced operating expense growth. Adjusted operating efficiency ratio⁽¹⁾⁽³⁾ improved slightly to 44.5%. We increased marketing investments by $1.1 billion, or 40%, as we took advantage of opportunities to welcome new customers, deepen existing relationships, and grow our consumer franchises. As a result, our total efficiency ratio⁽¹⁾⁽²⁾ increased 151 basis points to 56.0% and our adjusted total efficiency ratio⁽¹⁾⁽³⁾ increased to 56.3%.

Diluted earnings per share (“EPS”) was $17.91, driven by revenue growth and strikingly strong credit. EPS was down from 2021 but the second-highest level in Capital One’s history and well above pre-pandemic levels of total and per share profitability. We distributed significant capital to stockholders, as we completed $4.8 billion in common share repurchases and paid $954 million in common dividends. After significantly outperforming banks and the broader market in 2021, Capital One shares ended 2022 at $92.96, down 35.9% from year end 2021 and below the KBW Bank Index which was down 23.7%. Valuations and stock price performance for the banking sector, and for large consumer lenders specifically, came under pressure in 2022, primarily due to economic uncertainty and stock market volatility.

In 2022, Capital One launched new products, signed new partners, and continued to reimagine the customer experience. We earned a number of external awards and accolades related to our products and customer experiences and continued to be recognized for our high levels of customer satisfaction and advocacy. Net Promoter Scores, which measure how likely our customers are to recommend Capital One products and services, remained extremely high across all of our major businesses. We continued to harness the operating, risk, and customer experience benefits of our migration to the public cloud, and are realizing cost benefits of our full exit from data centers in 2020. We also strengthened our risk and control environment and continued to enhance cybersecurity capabilities. After sustained investment and focus across the Company, the Office of the Comptroller of the Currency (“OCC”) formally closed Capital One’s cyber-related consent order.

In 2022, Capital One invested in recruiting, developing, and retaining talent. We welcomed thousands of new associates and have maintained strong associate morale and engagement. We continued to focus on our diversity and inclusion efforts, including record diverse representation of new executive hires and promotees as well as continued progress in diverse representation among campus and professional hire pipelines. In September 2022, we welcomed associates back to our offices in our hybrid working model and have realized recruiting, retention and productivity benefits from offering associates flexibility in how they balance in-office and virtual work. We also invested in the community through our Capital One Impact Initiative, and combined philanthropic support with skills-based associate volunteerism to serve and support nonprofits across our footprint.

We believe Capital One’s portfolio of structurally-attractive businesses, coupled with our long-term investments in talent, technology, and digital capabilities, positions us well to weather any potential economic stress while continuing to grow and create long-term stockholder value. In 2022, we realized the benefits of these investments while continuing to position the Company for long-term competitiveness and success. In particular, the Committee and the Independent Directors specifically considered the following quantitative and qualitative Company performance when awarding compensation for the 2022 performance year to our NEOs⁽¹⁾:

See “Executive Summary” beginning on page 79 and “Year-End Incentive Opportunity” beginning on page 93 for more information regarding the Company’s 2022 performance.

Highlights of Our 2022 Compensation Programs

We believe that our NEO compensation programs balance risk and financial results, reward NEOs for their achievements, promote our overall compensation objectives, and encourage appropriate, but not excessive, risk-taking. Our compensation programs are structured to encourage our executives to deliver strong results over the short term while making decisions that create sustained value for our stockholders over the long term. Key features of our 2022 compensation programs include:

2022 Compensation Decisions

2022 CEO Performance Year Compensation

The CEO’s compensation for the 2022 performance year was composed of an equity award designed to provide the CEO with an incentive to focus on long-term performance and the opportunity for a year-end incentive award based on the Committee’s evaluation of the Company’s performance and the CEO’s contributions to that performance. Mr. Fairbank’s total compensation for performance year 2022 was approximately $26.13 million and consisted of:

The chart below shows Mr. Fairbank’s actual total compensation for performance year 2022:

The table below shows Mr. Fairbank’s compensation awards as they are attributable to the performance years indicated. The table shows how the Committee views compensation actions and to which year the compensation awards relate. This table differs substantially from the Summary Compensation Table and Pay Versus Performance table required for this proxy statement beginning on page 120 and page 136, respectively, and is therefore not a substitute for the information required in those tables. See “Chief Executive Officer Compensation” beginning on page 91 for a description of the compensation paid to our CEO and “2022 CEO Compensation Program and Components” beginning on page 91 for additional information regarding Mr. Fairbank’s 2022 performance year compensation.

2022 NEO Performance Year Compensation

NEO (other than the CEO) compensation for the 2022 performance year was composed of a mix of cash and equity-based compensation and consisted of (i) a base salary and (ii) an annual year-end incentive opportunity which consisted of a cash incentive and a long-term incentive opportunity. The long-term incentive opportunity was comprised of performance shares and stock-settled RSUs as determined by the Committee and the Independent Directors. The chart below shows the elements of NEO compensation as an approximate percentage of NEO 2022 actual total compensation:

See “NEO Compensation” beginning on page 106 for a description of compensation to the NEOs (other than the CEO).

Say on Pay and Response to Stockholder Feedback

The Committee and the Board value the input of our stockholders. At our 2022 Annual Stockholder Meeting, approximately 94% of our stockholders supported our NEO compensation. See “Consideration of Stockholder Feedback and 2022 Say on Pay Vote” beginning on page 86 for additional information regarding our Say on Pay vote.

In recent years, in response to feedback received from our stockholders, the Committee and the Independent Directors have made significant improvements to our executive compensation program, practices, and disclosures. The changes aim to simplify the program structure, further align our executive compensation practices with best practices and principles and enhance the transparency of our disclosures.

Voting Item 5: Approval and Adoption of the Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan

Voting Item 6: Ratification of Selection of Our Independent Registered Public Accounting Firm

Voting Items 7-9: Stockholder Proposals

Table of Contents

The Governance and Nominating Committee balances these considerations when assessing the composition of the Board, and has determined that all of our director nominees possess the personal characteristics, level of commitment to the Company, diversity, skills, and experience that align with the Company’s long-term strategy and that enable the Board to operate in an engaged and effective manner.

Other Considerations

For new candidates, the Governance and Nominating Committee also considers the results of the candidate’s interviews with directors and/or members of senior management and any background checks the Governance and Nominating Committee deems appropriate. In 2022, Capital One continued its engagement with Spencer Stuart, a third-party director search firm to identify and evaluate potential director candidates based on the criteria and principles described above.

When evaluating incumbent directors, the Governance and Nominating Committee also considers the director’s performance throughout the year, including the director’s attendance, preparation for, and participation in Board and committee meetings, the director’s annual evaluation, including feedback received from fellow Board members, and the director’s willingness to serve for an additional term, as further described in the section “Annual Assessment of Individual Director Nominees” on page 32.

Skills and Experience of Our Director Nominees

The Governance and Nominating Committee and the Board regularly review the Board’s membership in light of Capital One’s business model and strategic goals and objectives, the regulatory environment, and financial market conditions. In its review, the Governance and Nominating Committee considers whether the Board continues to possess the appropriate mix of skills and experience to oversee the Company in achieving these goals, and may seek additional directors as a result of this review. Our director nominees have the requisite experiences that, in the aggregate, meet an articulated set of director skills established by the Governance and Nominating Committee. These skills collectively allow our director nominees to effectively oversee the Company and create an engaged, effective, and strategically-oriented board.

Section II - Corporate Governance at Capital One

Overview of Corporate Governance at Capital One

Capital One is dedicated to strong and effective corporate governance that provides the appropriate framework for the Board to engage with and oversee the Company. Robust and dynamic corporate governance policies and practices are the foundation of an effective and well-functioning board, and are vital to preserving the trust of our stakeholders, including customers, stockholders, regulators, suppliers, associates, our communities, and the general public.

Information About Our Corporate Governance Policies and Guidelines

The Board has adopted Corporate Governance Guidelines to formalize its governance practices and provide its view of effective governance. Our Corporate Governance Guidelines embody many of our long-standing practices, policies, and procedures, which collectively form a corporate governance framework that promotes the long-term interests of our stockholders, promotes responsible decision-making and accountability, and fosters a culture that allows our Board and management to pursue Capital One’s strategic objectives.

To maintain and enhance independent oversight, our Board regularly reviews and refreshes its governance policies and practices as changes in corporate strategy, the regulatory environment and financial market conditions occur, and in response to stakeholder feedback and engagement.

The Board has also adopted Capital One’s Code of Conduct, which applies to Capital One’s directors, executives and associates, including Capital One’s CEO, CFO, Principal Accounting Officer, and other persons performing similar functions. The Code of Conduct reflects Capital One’s commitment to honesty, fair dealing, and integrity, and guides the ethical actions and working relationships of Capital One’s directors, executives, and associates in their interactions with investors, current and potential customers, fellow associates, competitors, governmental entities, the media, and other third parties with whom Capital One has contact.

For a description of the key governance practices of our Board, see “Key Board Governance Practices” beginning on page 27.

The following corporate governance documents are available at www.capitalone.com under “Investors,” then “Governance & Leadership,” then “Board of Directors and Committee Documents” or “Organizational and Governance Documents,” as applicable.

Board Leadership Structure

The Independent Directors, each year in conjunction with the Board’s self-assessment, evaluate the continued effectiveness of the Board’s leadership structure in the context of Capital One’s specific circumstances, culture, strategic objectives, and challenges. The diverse backgrounds and experiences of our directors provide the Board with broad perspectives from which to determine the leadership structure best suited for Capital One and the long-term interests of Capital One’s stockholders and other stakeholders.

We believe that our existing Board leadership structure of combined Chairman/CEO and Lead Independent Director provides the most effective governance framework and allows our Company to benefit from

Mr. Fairbank’s talent, knowledge, and leadership as the founder of Capital One and allows him to use the in-depth focus and perspective gained in running the Company to effectively and efficiently lead our Board. As CEO, Mr. Fairbank oversees Capital One’s day-to-day operations and strategic planning, and as Chairman of the Board he leads the Board in its oversight role, including with respect to strategic matters and risk management.

The Company and the Board also benefit from an active and empowered Lead Independent Director who provides strong, independent leadership for the Board. The Board at least annually evaluates its leadership structure, including the effectiveness of the combined Chairman/CEO and Lead Independent Director leadership structure, and currently believes that the Chairman and CEO roles should be held by the same person.

Recognizing the importance of independent perspectives to the Board to balance the combined Chairman and CEO roles, Capital One appropriately maintains strong independent and effective oversight of our business and affairs through our Lead Independent Director; fully-independent Board committees with independent chairs that oversee the Company’s operations, risks, performance, and business strategy; experienced and committed directors; and frequent executive sessions. Our Independent Directors act as a strong counterbalance to our combined roles of Chairman of the Board and CEO.

Lead Independent Director

Our Board believes that an active and empowered Lead Independent Director is key to providing strong, independent leadership for the Board. The Lead Independent Director position, elected annually by the other Independent Directors upon the recommendation of the Governance and Nominating Committee, is a critical aspect of our corporate governance framework. Ms. Hackett, as Lead Independent Director, brings extensive experience leading companies that provide strategic organization and human resource consulting services to boards of directors and senior management teams. The Board believes that Ms. Hackett’s experience enables her to provide valuable and independent views to the boardroom, and ensure active communication between management and our Independent Directors to support their oversight responsibilities, including with respect to management of risks and opportunities presented by the markets in which Capital One competes.

The Lead Independent Director’s responsibilities include:

In evaluating candidates for Lead Independent Director, the Independent Directors consider several factors, including each candidate’s corporate governance experience, Board service and tenure, leadership roles, and ability to meet the necessary time commitment. For an incumbent Lead Independent Director, the Independent Directors also consider the results of the candidate’s annual Lead Independent Director assessment. For a description of the Lead Independent Director annual assessment process, see “Annual Assessment of the Lead Independent Director” beginning on page 32.

Key Board Governance Practices

2022 Board Meetings and Attendance

Our Perspectives on Overall Board Composition and Refreshment

In recent years, investors have become increasingly focused on the composition of corporate boards and policies and practices that encourage board refreshment. At Capital One, we appreciate that our investors share our passion for cultivating a board that encompasses the optimal mix of diverse backgrounds, experiences, skills, expertise, qualifications, and an unwavering commitment to integrity and good judgment, all in order to thoughtfully oversee, advise, and guide management as they work to achieve our long-term strategic objectives.

The Governance and Nominating Committee, under the direction of its chair, who also serves as the Company’s Lead Independent Director, assesses the composition of, and criteria for, membership on the Board and its committees on an ongoing basis. In fulfilling this responsibility, the Governance and Nominating Committee has taken a long-term view and continuously assesses the resiliency of the Board over the next ten to fifteen years in alignment with the Company’s strategic direction to determine what actions may be desirable to best position the Board and the Company for success.

In assessing Board resiliency, the Governance and Nominating Committee considers a variety of factors, including board skills, industry experience, diversity, board size, tenure, evergreen recruiting, and staged refreshment. As a result of these long-term strategic resiliency assessments, the Governance and Nominating Committee has articulated a set of principles on board composition, including the following:

Guidelines require the Corporate Secretary to deliver a copy of the submitted information to the Chair of the Governance and Nominating Committee. The Governance and Nominating Committee will consider potential nominees proposed by stockholders on the same basis as it considers other potential nominees.

In addition, an eligible stockholder or group of stockholders may use Capital One’s “proxy access” bylaws to include stockholder-nominated director candidates in the Company’s proxy materials for the annual stockholder meeting. Our Bylaws permit up to 20 stockholders owning 3% or more of the Company’s outstanding common shares of voting stock continuously for at least three years to nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the Board (whichever is greater) provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in the Bylaws.

Director Independence

Except for our CEO, who is the Company’s founder, the Board has affirmatively determined that the other members of our Board are independent under Capital One’s Director Independence Standards (the “Independence Standards”), which have been adopted by the Board as part of Capital One’s Corporate Governance Guidelines. The Independence Standards reflect the director independence requirements set forth in the listing standards of the New York Stock Exchange (“NYSE”) and other applicable legal and regulatory rules, and also describe certain categorical relationships that the Board has determined to be immaterial for purposes of determining director independence.

The categorical relationships that the Board has deemed immaterial for purposes of determining director independence are: (i) relationships between Capital One and an entity where the director serves solely as a non-management director; (ii) transactions between Capital One and a director or a director’s immediate family member (or their primary business affiliations) that fall below the numerical thresholds in the NYSE listing standards (or do not otherwise preclude independence under those standards), and that are ordinary course, on arm’s-length market terms, and, in the case of extensions of credit, followed usual underwriting procedures, present no more than the normal collectability risk or other unfavorable features and are in compliance with applicable legal and regulatory requirements; and (iii) discretionary contributions made by Capital One to not-for-profit organizations, foundations, or universities in which a director (or immediate family member) serves as an executive officer that in any single fiscal year within the last three years do not exceed the greater of $1 million or 2% of that entity’s consolidated gross revenues.

In making its independence recommendations, the Governance and Nominating Committee and the Board evaluate information obtained from non-management directors’ responses to a questionnaire inquiring about their relationships with Capital One, and those of their immediate family members and primary business or charitable affiliations and other potential conflicts of interest, as well as certain information related to transactions, relationships, or arrangements between Capital One and a non-management director or their immediate family members, primary business, or charitable affiliations. Following this review, the Board determined that each of the director nominees (excluding our CEO) is independent under the Independence Standards. The Board also determined that Ms. Catherine West was independent during the period in 2022 when she served on the Board.

Capital One’s Corporate Governance Guidelines, including information relating to the Independence Standards, are available at www.capitalone.com under “Investors,” then “Governance & Leadership,” then “Organizational and Governance Documents.”

Director Onboarding and Education

The Company, in consultation with the Governance and Nominating Committee, has established director onboarding and continuing director education programs to support our directors in fulfilling their responsibilities and to assist them in keeping current on industry, corporate, regulatory, and other developments.

All new directors participate in the Company’s director onboarding program to provide training relating to the Company’s values, strategic plans, accounting policies, financial reporting, risk management, code of ethics, key regulatory issues, competition, and industry dynamics. As part of this onboarding program, over a period of approximately 18 months, new directors meet with members of senior management serving in various roles and functions, as well as Board committee chairs, the Lead Independent Director, and individual directors, to review and discuss information about the Company, the business, the boardroom, and individual director roles and responsibilities. Additionally, new directors are assigned an experienced director to serve as a mentor to facilitate their onboarding to the Board and the Company.

As we continue to enhance our director onboarding experience, the Company developed and implemented the committee onboarding program, which is designed to facilitate and accelerate directors’ integration and contribution to the committees on which they serve.

Our continuing director education program is designed to provide: (i) regular updates on external opportunities for continuing education offered by applicable regulators, professional organizations, and academic institutions; (ii) internal director education programs; (iii) various board-related publications; and (iv) access to various peer-to-peer networks. Our directors are also encouraged to pursue other educational opportunities, at the Company’s expense, to enhance directors’ ability to perform their duties.

Executive Sessions

Our Independent Directors regularly convene executive sessions led by the Lead Independent Director at Board and committee meetings as needed. The executive sessions allow the Independent Directors to discuss strategy, CEO and senior management performance and compensation, succession planning, Board effectiveness, and other matters without management present.

In 2022, the Independent Directors of the Board met in executive session without members of management present and the Independent Directors of each committee also met in executive session without members of management present. During these executive sessions, Directors have access to all the members of senior management upon request, such as the CEO, CFO, General Counsel and Corporate Secretary, Chief Risk Officer, Chief Audit Officer, Chief Information Security Officer, Chief Technology Risk Officer, Chief Credit Review Officer, and Chief Compliance Officer. The Lead Independent Director and/or any director may request additional executive sessions of the Independent Directors.

Directors Are Actively Engaged Outside of Board Meetings

Engagement outside of Board meetings provides our directors with additional insight into our business and industry. It also provides our Board with valuable perspective on the performance of our Company, Board, CEO, and other members of senior management.

Annual Board and Committee Evaluations

Annually, in compliance with the NYSE listed company rules and other applicable laws, rules, and regulations, the Board and its committees conduct formal self-evaluations to assess and improve the Board’s effectiveness and functionality. The Board believes that in addition to serving as a tool to evaluate and improve performance,

evaluations can serve several other purposes, including the promotion of good governance and the integrity of financial reporting, reduction of risk, informing the Board refreshment process, strengthening the Board-management partnership, and helping set and oversee Board expectations of management. In assessing their performance, the Board and its committees take a multi-year perspective to identify and evaluate trends and assure themselves that areas identified for improvement are addressed appropriately and in a timely manner.

To ensure the process stays fresh and continues to generate rich insights, the Board follows a cyclical, programmatic approach when conducting Board and committee evaluations. This approach includes regular, holistic reviews of the evaluation framework, methodology, and form. While the Board and each of its committees conducts a formal evaluation annually, the Board considers its performance and that of its committees continuously throughout the year and shares feedback with management.

Each year, the Board and its committees may conduct their annual evaluations through one or a combination of evaluative approaches, including written surveys, individual director interviews, group discussions in executive session, and/or engagement of a third-party facilitator.

As part of the Board’s self-evaluation process, directors consider various topics related to Board composition, effectiveness, structure, and performance and the overall mix of director skills, experience, and background. Specifically, topics considered during the 2022 annual Board and committee self-evaluations process included:

Annual Assessment of Individual Director Nominees

Each year the Chair of the Governance and Nominating Committee conducts an individual director assessment process. This process includes candid, one-on-one discussions between the Governance and Nominating Committee’s Chair and each Board member regarding the individual performance and effectiveness of the directors nominated by the Board for re-election by Capital One’s stockholders. Directors may also provide feedback on any other individual director’s performance at any time, regardless of whether it is part of the formal assessment process.

Annual Assessment of the Lead Independent Director

To support the Independent Directors in selecting the Lead Independent Director, the Governance and Nominating Committee oversees an annual process to evaluate the performance and effectiveness of the Lead Independent Director. Each year, the Governance and Nominating Committee designates one Independent Director as a facilitator, who solicits feedback and perspectives from all directors on the Lead Independent Director. The facilitator then shares the results with the Governance and Nominating Committee and, as appropriate, the Board, without the Lead Independent Director present. The Independent Directors consider the results of this assessment in the annual selection of the Lead Independent Director.

The Lead Independent Director is currently Ms. Hackett. As Lead Independent Director, Ms. Hackett has a strong record of active engagement both inside and outside the boardroom, including regular meetings with federal regulators and company executives in one-on-one and group settings. Ms. Hackett is also an active member of Tapestry Networks’ Lead Director Network, a select group of lead independent directors from America’s most successful companies who share a commitment to improving corporate performance and earning stockholder trust through more effective board leadership. Leveraging her significant experience serving in leadership capacities in a variety of environments, Ms. Hackett has fostered a culture of collaboration, diligence, trust, and mutual respect that allows the Board to work effectively to provide oversight of and effective challenge to management. Based on her performance, the Independent Directors unanimously supported Ms. Hackett’s re-election as Lead Independent Director for a one-year term beginning May 2022.

Annual Performance Assessment of the CEO

Led by the Lead Independent Director, the Independent Directors annually assess the performance of Mr. Fairbank as Capital One’s CEO through a process developed and overseen by the Governance and Nominating Committee. This process includes an in-depth discussion of the CEO’s performance by the Independent Directors in executive session during which directors consider a variety of factors. The areas assessed relate to overall CEO performance, leadership, financial and operating performance, governance and risk management, strategic performance, and customer and associate satisfaction. The Independent Directors also consider feedback from the Board and self-assessment materials provided by Mr. Fairbank regarding his and the Company’s performance and achievements during the performance year. For additional information, see “Chief Executive Officer Compensation” beginning on page 91.

The annual CEO performance assessment is completed as part of Capital One’s year-end compensation process. The Compensation Committee manages year-end compensation decisions within the context of such assessment and recommends compensation for the CEO based on such assessment to the full Board. The Lead Independent Director and Chair of the Compensation Committee jointly share the feedback from the CEO performance assessment with Mr. Fairbank in a closed session.

The Board’s Role in Corporate Oversight

Capital One is dedicated to strong and effective corporate governance that provides the appropriate framework for the Board to engage with and oversee the Company. Our Board is accountable for oversight of Capital One’s business affairs and operations. In carrying out this responsibility, among other things, the Board oversees management’s development and implementation of the Company’s (i) corporate culture; (ii) corporate strategy; (iii) financial performance and associated risks; (iv) the enterprise-wide risk management framework, including cybersecurity risk; (v) succession planning for the Company’s CEO and other key executives; and (vi) policies, programs, and strategies related to ESG matters.

The Board regularly reviews and approves key governance policies and plans. Our Corporate Governance Guidelines formalize the Company’s governance practices and facilitate efficient and effective Board oversight. These Guidelines enable our Board to engage in responsible decision-making, work with management to pursue Capital One’s strategic objectives and promote the long-term interests of our stockholders. For information regarding the Board’s role in oversight of the Company’s policies, programs, and strategies related to environmental and social practices, see “Environmental, Social, and Governance Practices” beginning on page 48.

Corporate Culture

Capital One believes that a strong ethical corporate culture is a key element of sound and sustainable corporate governance practices, beginning at the top with senior leadership. The Board plays a critical role in supporting and overseeing Capital One’s corporate culture, mission, values, and setting the “tone at the top” by adopting policies, a code of ethics, a philosophy for hiring, and compensation practices that promote ethical behavior, compliance

with laws and regulations, including those pertaining to consumer protection and privacy, effective internal controls and risk management, and sound governance. The Company’s governance and risk management programs also support a strong and sustainable culture in several ways, including through the governance framework, risk management program, ethics program, and talent management and compensation policies and practices.

The Board and its committees have many opportunities to oversee and engage with management on the Company’s culture throughout the year including through, among other things:

Corporate Strategy

The Board, in fulfilling its responsibility to oversee Capital One’s business affairs and operations, manage risk and maximize long-term stockholder value, is accountable for reviewing and overseeing the creation and implementation of Capital One’s strategy. Management is responsible for developing, communicating, and implementing a strategy that allows Capital One to: (i) invest in long-term capabilities and opportunities; (ii) secure competitive, endgame positions in our key businesses; (iii) attract and retain customers; (iv) grow resiliently; (v) promote ethical behavior and compliance with applicable laws and regulations; (vi) withstand economic stress and market volatility; and (vii) adhere to the Board’s established risk appetite. These strategies allow us to deliver long-term benefits and returns to our stockholders while helping associates grow, customers succeed, and communities thrive.

The development and assessment of Capital One’s strategy is an ongoing, iterative process that involves the Board, the CEO, Division Presidents, the CFO, the General Counsel and Corporate Secretary, the Chief Risk Officer, the Chief Audit Officer, all other Executive Committee Members, numerous lines of business and enterprise leaders and the Corporate Strategy team. Each year, the Board participates in an annual Board strategy meeting at which the Board reviews and discusses the Company’s long-term strategy with the CEO and key senior leaders. The Board provides effective challenge, feedback, and input on the Company’s strategy, strategic priorities, and investments. Following the Board strategy meeting, the Chief Risk Officer meets with the Board to provide a risk assessment of Capital One’s strategic initiatives. After review, the Board approves the Company’s strategic plan. Furthermore, the Risk Department regularly provides the Risk Committee, among other things, with a report of the Company’s performance against its risk appetite metrics, assessments of the external environment and the Company’s positioning in context of key risk categories

The Board regularly reviews the financial, competitive, and risk performance of the Company and updates on key strategic objectives. Each line of business reports to the Board the progress on their strategic and financial initiatives at least annually. Capital One uses various tools to assess performance against strategic initiatives including: financial performance, competitive positioning and market share, technology capabilities, performance against risk appetites and limits, customer satisfaction and advocacy scores, qualitative progress reports, talent

management, system availability and downtime statistics, risk ratings and measurements, and market-based indicators. Utilizing these performance measurement tools, the Board is able to carefully monitor the progress and assess the effectiveness of our strategic plan and engages in informed discussions with management regarding financial performance and trajectory, capital allocation, strategy implementation, and risk-mitigation plans, as appropriate.

Financial Performance and Associated Risks

The Board oversees the Company’s financial performance by reviewing with management, on a regular basis, the Company’s quarterly and annual financial statements. The Audit Committee oversees the integrity of the Company’s financial statements by, among other things, obtaining independent assurance as to the completeness and accuracy of its financial statements from an independent registered public accounting firm, whose qualifications, independence, and performance, it reviews on an annual basis. The Audit Committee also oversees the integrity of the Company’s internal controls over financial reporting by, among other things, reviewing periodic assessments of the adequacy and effectiveness of the Company’s financial controls performed by both the Company’s independent registered public accounting firm and internal audit function. In addition, the Board, either directly or through the Risk Committee, plays an integral role in the oversight of capital planning and adequacy, funding and liquidity risk management, market risk management, investment portfolio management, and other asset liability management matters.

Risk Oversight

Effective risk management and control processes are critical to our safety and soundness, our ability to predict and manage the challenges that Capital One and the financial services industry face and, ultimately, our long-term corporate success. The enterprise-wide risk management framework defines the Board’s appetite for risk taking and enables senior management to understand, manage and report on risk. The risk management framework is implemented enterprise-wide and includes seven risk categories: compliance, credit, liquidity, market, operational, reputation and strategic.

The Board’s role in risk oversight of Capital One is consistent with its leadership structure, with the CEO and other members of senior management having responsibility for assessing and managing Capital One’s risk exposure on a day-to-day basis, and the Board and its committees providing oversight in connection with these efforts. The Board’s oversight focuses on our material risks and any notable emerging themes to ensure that Capital One’s risk management is adequate. The Chair of the Risk Committee, in collaboration with the Lead Independent Director, helps ensure that the Board has appropriate discussions on risk topics. The Risk Committee is responsible for reviewing and recommending to the Board for approval certain risk appetites taking into account the Company’s structure, risk profile, complexity, activities, size, and other appropriate risk-related factors. The Risk Committee considers both current risk, including timeframes reflected by those risks, as well as emerging risks and future threats.

At the management level, senior management committees serve as governance forums for the CEO, Chief Risk Officer, and other management executives to receive and discuss risk management information, reports, views, and escalated matters from lines of business, the Risk Department, the Audit Department and other areas of the Company. Enterprise-wide risk management is generally the responsibility of the Chief Risk Officer, who has accountability for proposing risk appetite and reporting levels related to all seven risk categories. The Chief Risk Officer is also responsible for ensuring that the Company has an overall enterprise risk framework and that it routinely assesses and reports on enterprise level risks. The Chief Risk Officer reports both to the CEO and to the Risk Committee, and updates the Risk Committee regularly on the Company’s performance on risk appetite metrics in addition to ad hoc reports on emerging risks.

The Board meets with outside advisors periodically, as appropriate and necessary, and is empowered to consult at any time with outside advisors related to future threats and trends. The Audit Committee also plays an important risk oversight function, and oversees elements of compliance, including financial reporting that encompasses disclosure controls and procedures. The Compensation Committee oversees compensation policies and practices

to ensure balanced risk-taking in our compensation programs, practices and decisions as further described in “Risk Assessment of Compensation Policies and Practices” on page 37 below. Finally, the Board as a whole oversees the entire enterprise-wide risk framework for the Company, including the oversight of strategic risk.

Cybersecurity and Technology Risk

As a financial services company entrusted with the safeguarding of sensitive information, our Board believes that a strong enterprise cyber program is vital to effective risk management. As part of its program of regular oversight, the Risk Committee of the Board is responsible for overseeing cyber risk, information security, and technology risk, including management’s actions to identify, assess, mitigate, and remediate material cyber issues and risks. The Risk Committee receives at least quarterly reports from the Chief Information Security Officer and Chief Technology Risk Officer on the Company’s technology and cyber risk profile, enterprise cyber program, and key enterprise cyber initiatives. In addition, the Risk Committee discusses matters escalated to it by the Technology and Cyber Risk Committee, a management-level committee dedicated to the discussion of enterprise-wide cybersecurity and technology risk issues whose responsibilities include, among other things, discussion of cyber and technology risks. The Risk Committee coordinates with the full Board regarding the strategic implications of cyber and technology risks.

The Chief Information Officer, Chief Information Security Officer, and Chief Technology Risk Officer also follow a risk-based escalation process to notify the Risk Committee outside of the quarterly reporting cycle when they identify an emerging risk or material issue. The Risk Committee annually reviews and recommends the Company’s information security policy and information security program to the Board for approval. At least annually, the Board reviews and discusses the Company’s technology strategy with the Chief Information Officer; reviews and discusses the Company’s cybersecurity strategy with the Chief Information Security Officer and Chief Technology Risk Officer; and approves the Company’s technology strategic plan. In addition, the Risk Committee participates in periodic cyber education sessions.

Succession Planning

Pursuant to our Corporate Governance Guidelines, the Board is responsible for maintaining a succession plan for the CEO and certain key executive roles. A planning process has been developed and maintained to identify, develop, and assess successors to the CEO and certain key executives. The Board reviews and updates these succession plans at least annually. Our Board believes that the directors and the CEO should work together on executive succession planning and that the entire Board should be involved. Each year, as part of Capital One’s succession planning process, our CEO provides the Board with recommendations on, and evaluations of, potential CEO successors. The Board considers a number of factors such as experience, skills, competencies, diversity, and potential in its review of the senior executive team to assess which executives possess or can develop the attributes that the Board believes are necessary to lead and achieve the Company’s goals. Among other steps taken to promote this process throughout the year, executives one and two levels below the CEO often attend Board meetings and present to the Board, providing the Board with numerous opportunities to interact with our senior management and assess their leadership capabilities. Additionally, each line of business and the Risk, Audit, and Finance functions engage in succession planning for key roles at least once per year. The Chief Human Resources Officer reviews these line of business succession plans.

Our Board proactively reviewed plans for temporary emergency successors across key roles in late 2022. The temporary emergency succession plan is intended to identify the leaders who can assume the responsibilities in the immediate short-term to ensure business continuity, day-to-day management of the team and business for our senior management and key roles. Our Board also has established steps to address emergency CEO succession planning for an unplanned CEO succession event. Our emergency CEO succession planning is intended to enable our Company to respond to an unexpected CEO transition by continuing our Company’s safe and sound operation and minimizing potential disruption or loss of continuity to our Company’s operations and strategy. The Board reviews annually the CEO’s emergency successor recommendations. As a result of this evergreen process, there is a named CEO emergency successor should the CEO become unexpectedly unable to serve.

Risk Assessment of Compensation Policies and Practices

The Compensation Committee oversees all of our compensation policies and practices, including our incentive compensation policies and practices, with a view toward ensuring that such policies and practices encourage balanced risk-taking, are compatible with effective controls and risk management, align with our business strategy, and enable the Company to attract and retain top talent, especially in key job functions. Every two years, the Compensation Committee reviews and approves the Incentive Compensation Governance Policy, which applies to all Company associates and governs incentive compensation decisions. The Incentive Compensation Governance Policy provides the framework for oversight of the design of incentive compensation programs. In setting executive compensation, the Compensation Committee assesses each of the NEOs against one or more performance objectives specifically designed to evaluate the degree to which the NEOs balanced risks inherent in their specific roles. The Compensation Committee also implements additional risk-balancing features for certain equity awards, as described in more detail in the “Compensation Discussion and Analysis” beginning on page 78.

In addition, the Compensation Committee reviews the Company’s NEO and other senior executive compensation programs as well as any other material incentive compensation programs, plans or agreements. During these reviews, the Compensation Committee discusses the Company’s most significant risks, including the Company’s status with respect to managing those risks and the relationship of those risks to compensation programs. The review includes discussion and analysis of risk-balancing features embedded in these incentive compensation programs and other actions taken by the Company to appropriately balance risk and achieve conformance with regulatory guidance. The Compensation Committee also discusses these programs with the Company’s Chief Risk Officer, Chief Human Resources Officer, and the Compensation Committee’s independent compensation consultant, as appropriate. Based on these discussions, the Compensation Committee believes our compensation programs are consistent with safety and soundness, operate in a manner that appropriately balances risk, and are not reasonably likely to have a material adverse effect on the Company.

The Compensation Committee’s active oversight, together with the Company’s interactions and discussions with its regulators, has further enhanced the Company’s risk management and control processes with respect to incentive compensation at the Company and supported our continued compliance with the interagency guidance on sound incentive compensation practices.

Stockholder Engagement

We value the input and insights of our stockholders and are committed to continued meaningful engagement with investors. As a result, we engage in continuous outreach throughout the year to discuss with our stockholders the issues that are important to them, listen to their expectations for us, and share our views. During our discussions, we also seek to provide visibility and transparency into our business, our performance, and our governance and compensation practices. We report stockholder feedback to our Board to help them respond to stockholders’ concerns and feedback.

Stockholder Engagement Program

In 2022, we engaged in direct outreach and discussions with stockholders representing approximately 72% of our outstanding shares. Key topics of focus included Company strategy, financial performance, business trends, ESG matters, executive compensation, and board composition. Key features of our stockholder engagement program include: (i) continuous, year-round outreach; (ii) meaningful board-driven engagement; (iii) regular board reporting; and (iv) stockholder-driven improvements.

Continuous Outreach

Our CEO, CFO, and Investor Relations team meet frequently with stockholders and the investment community regarding Company strategy and performance. In addition, members of management, including our Investor Relations, Governance and Securities, and Executive Compensation teams, as well as our General Counsel and Corporate Secretary and our CFO, meet with key governance contacts at our larger stockholders.

Meaningful Engagement

Our goal is to engage with our stockholders in a manner characterized by both transparency and respect, fostering collaborative and mutually beneficial discussions. Depending on the topics discussed with investors, our engagement with stockholders may include the Lead Independent Director, the Chair of the Compensation Committee, or the Chair of the Governance and Nominating Committee (if different from the Lead Independent Director).

Regular Board Reporting

The Governance and Nominating Committee, the Compensation Committee, and the Board request and receive reports several times a year from our Investor Relations team and members of management and actively discuss stockholders’ feedback and insights. Our Board and management review and evaluate stockholder input to identify issues and concerns that may require Board action or enhancements to our policies, practices, or disclosure.

Board’s Response to Stockholder Feedback

In response to stockholder feedback, we have made the following improvements to our corporate governance and executive compensation practices and disclosures:

Stockholder Engagement Cycle

While our Investor Relations team and management meet continuously throughout the year, the following chart describes the typical annual cycle of our formal stockholder engagement.

Board Committees

Our Board has four standing committees: Audit, Compensation, Governance and Nominating, and Risk. Each of our committees:

Chair     Member

Committee Membership Determinations

Annually, the Governance and Nominating Committee assesses and considers membership for each of the Board’s standing committees. This review takes into account, among other factors, committee needs, director experience, committee succession planning, and the desire to balance membership continuity with new insights.

The Chair of the Governance and Nominating Committee facilitates discussions with management, committee chairs, the Chairman of the Board, and individual directors, as needed, and shares that feedback with the Governance and Nominating Committee. The Governance and Nominating Committee makes recommendations for committee membership and chairs to the full Board.

The Charters of the Audit, Compensation, Governance and Nominating, and Risk Committees are available on our website at www.capitalone.com, under “Investors,” then “Governance & Leadership,” then “Board of Directors and Committee Documents.”

Compensation Committee Consultant

The Compensation Committee has the authority to retain and terminate legal counsel and other consultants and to approve such consultants’ fees and other retention terms. The Compensation Committee has retained the services of Frederic W. Cook & Co., Inc. (“FW Cook”), an independent executive compensation consulting firm. FW Cook reports to the Compensation Committee and its engagement may be terminated by the Compensation Committee at any time.

The Compensation Committee determines the scope and nature of FW Cook’s assignments. In 2022, FW Cook performed the following work for the Compensation Committee:

Consultants from FW Cook typically attend Compensation Committee meetings and executive sessions of the Compensation Committee upon request of the Chair of the Compensation Committee, including meetings held jointly with the Independent Directors to review or approve the compensation for the CEO and the other executive officers and to provide an independent perspective regarding such compensation practices.

FW Cook does not provide any additional services to the Company or its management other than the services provided to the Compensation Committee. The Compensation Committee has considered factors relevant to FW Cook’s independence from management under SEC and NYSE rules and has determined that FW Cook is independent from management.