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ITEM 5.02
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DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
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On April 23, 2019, Comerica Incorporated (“Comerica”) announced that Curtis C. Farmer has been named Chief Executive Officer and President of Comerica and of its subsidiary, Comerica Bank, effective April 23, 2019. Comerica also announced that Ralph W. Babb, Jr. has been named Executive Chairman of Comerica and Comerica Bank, effective April 23, 2019. Mr. Babb ceased to hold the additional title of Chief Executive Officer of Comerica and Comerica Bank as of April 23, 2019, the effective date of Mr. Farmer’s promotion. As Executive Chairman, Mr. Babb will continue to chair the Comerica Board of Directors and the Comerica Bank Board of Directors.
In his new role, Mr. Farmer will be responsible for all lines of business and Credit, as well as the support and operations teams of Comerica and Comerica Bank, including Finance, Human Resources, Risk, Technology, Legal and Marketing. Mr. Farmer will continue reporting to Mr. Babb.
Mr. Farmer, 56, was first appointed President of Comerica and Comerica Bank in April 2015. Before that, he served as Vice Chairman (April 2011 to April 2015) and Executive Vice President (October 2008 to April 2011) of Comerica and Comerica Bank. Prior to joining Comerica, Mr. Farmer served as Executive Vice President and Wealth Management Director of Wachovia Corporation from October 2005 to October 2008. During his 23 years of service to Wachovia, he held a variety of positions of increasing scope and responsibility.
In connection with his promotion, on April 23, 2019, Mr. Farmer received an annualized increase of $79,000 to his base salary. As Chief Executive Officer and President, Mr. Farmer’s 2019 Annual Executive Incentive Program (“AEI”) individual incentive target under the Comerica Incorporated 2016 Management Incentive Plan, as amended and/or restated from time to time (the “MIP”), will be 115% of base salary, and his AEI individual incentive maximum will be 230% of base salary.
Also in connection with the promotion to Chief Executive Officer, Mr. Farmer received equity grants valued at a total of $1.5 million as of the grant date of April 23, 2019. 65% of the equity award was allocated toward a target number of performance-based restricted stock units under the senior executive long-term performance program (“SELTPP”); 25% of the equity award was allocated toward restricted stock units, and 10% of the equity award was allocated toward stock options. All of the equity grants were made under Comerica’s 2018 Long-Term Incentive Plan. The target grant of SELTPP restricted stock units is subject to Comerica’s standard SELTPP agreement (2019 version). It will be eligible to vest based on Comerica’s average return on common equity excluding certain non‑performance items (“ROCE”) over a three‑year performance period (2019‑2021), relative to a goal ROCE established toward the beginning of the performance period, with settlement occurring after the end of the performance period. The grant of restricted stock units is subject to Comerica’s standard employee non-cliff restricted stock unit agreement, with 50% of the shares vesting on the third anniversary of the grant date and 25% vesting on each of the fourth and fifth anniversaries of the grant date. The grant of stock options is subject to Comerica’s standard non-qualified stock option agreement, with the stock options vesting 25% per year over four years and having a term of 10 years. Additional information about Comerica's executive compensation program can be found in its 2019 Proxy Statement.
Mr. Babb's compensation will continue with no changes in connection with his appointment as Executive Chairman.