Truist Financial Corp

This advisory (non-binding) proposal requests shareholder approval of Truist’s executive compensation as disclosed in the proxy statement. Management is seeking endorsement to signal shareholder support for its mix of base salary, annual incentive performance awards (AIP), and long-term incentives (PSUs, RSUs, and LTIP awards), which the Compensation and Human Capital Committee describes as largely at-risk and tied to financial and strategic metrics. The program includes a structured AIP scorecard (60% financial measures, 40% strategic priorities), multi-year PSU/LTIP performance metrics (adjusted EPS, ROTCE, and relative TSR), clawback and forfeiture provisions for negative risk outcomes, and stock ownership requirements. The Board frames this vote as a validation of the Committee’s recent design changes made in response to lower say-on-pay support in 2025, including enhanced disclosures, a clarified approach to one-time awards (none granted in 2025), and revised AIP design. Approving the proposal would indicate shareholder acceptance of the Company’s pay-for-performance approach and governance safeguards; rejecting it would likely trigger further engagement and potential program changes. Given recent outcomes (59% support in 2025), the Board has emphasized disclosure improvements and process changes to address investor concerns. The Board recommends a FOR vote, arguing the program aligns pay with long-term shareholder value while preserving risk controls and independent oversight by the Compensation and Human Capital Committee.

This management proposal asks shareholders to approve an amended and restated 2022 Incentive Plan that increases the share reserve by 31 million shares (in addition to previously authorized but unused shares), extends the plan term to ten years from shareholder approval, and modernizes plan features and change‑of‑control treatment. Management argues additional shares are necessary for recruiting, retention, and ongoing long‑term incentive programs; the company’s analysis estimates the requested pool will last approximately four years under current grant practices, but actual run‑rate will depend on grant frequency and stock price. The A&R Plan includes shareholder‑friendly guardrails: limited share recycling (shares used to pay exercise price or tax withholding count against the reserve), minimum one‑year vesting (with limited exceptions), caps on non‑management director annual compensation (aggregate limit of $750,000 or $1,000,000 for a non‑Executive Chair), no dividends on unvested awards, no automatic repricing or reloads, and robust clawback provisions. The proposal also clarifies treatment of assumed/substituted awards, updates tax and administrative provisions to comply with Section 409A, and provides typical change‑of‑control protections (no automatic single‑trigger acceleration absent non‑assumption by successor, deemed performance at target or actual as specified). Approving the plan maintains Truist’s ability to deliver equity‑based incentives aligned with shareholder value creation; a rejection would constrain equity grants and could force increased cash compensation or limit retention tools. The Board recommends a FOR vote, citing competitiveness, governance features, and conservative dilution metrics (projected overhang to ~5.5% post-approval).

The shareholder proponent (The Heritage Foundation, via Bowyer Research) argues that Truist’s public positions, philanthropy, DEI programs, healthcare coverage stances, emissions targets, and partnerships reflect ideological commitments that may conflict with values of segments of the bank’s customer base, causing reputational, legal, and regulatory risks; the proponent requests a board-commissioned evaluation and report on alignment and risk mitigation. Management counters that the Company already has robust governance, non-discrimination policies (Code of Ethics, Enterprise Fair Access and Fair Lending), and active Board/committee oversight (Risk Committee, Nominating & Governance, Compensation & Human Capital) that collectively assess and manage these reputational and compliance risks and that the requested report would be duplicative, non‑decision‑useful, and a diversion of resources. Company disclosures, regulatory compliance obligations, and public sustainability and inclusion commitments provide existing transparency, according to management, and the Board therefore recommends voting AGAINST. For investors evaluating the merits, the dispute centers on whether an additional dedicated report would materially improve shareholder insight beyond existing disclosures and oversight: proponents claim targeted analysis of policy‑to‑customer alignment is warranted given perceived brand risk; management asserts established ERM processes, public filings, and committee oversight already address such risks and that further reporting would be duplicative. Company‑specific context includes recent shareholder engagement on compensation and governance, public CSR/ESG reporting, and a broad footprint where reputational considerations can affect client relationships and deposit flows; the practical impact of either vote will hinge on how much additional, specific, and actionable information investors believe is missing from existing disclosures and oversight.