Company: USB-PA
Filing Date: 2025-03-05
Form Type: DEF 14A
Source: 0001104659-25-020883
Chunk: 53

Company: US BANCORP \DE\
Filing Date: 2025-03-05
Form: DEF 14A
Chunk 53
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TABLE OF CONTENTS Compensation discussion and analysis 2025 PRSU awards.For 2025 PRSUs, in order to better align with our strategic plan and emerging practices across our peer group, the Committee determined it appropriate to change the core performance metric used as part of the 2025 PRSU program design from absolute and relative ROE to absolute and relative ROTCE. In addition, the Committee added a relative TSR modifier for purposes of determining the number of PRSUs earned at the end of the three-year performance period to further enhance alignment with shareholder outcomes. Selecting the performance metrics for the 2025 PRSU awards The Committee determined that ROTCE was an appropriate performance metric for the 2025 PRSU awards because it is a key long-term performance priority under the company’s strategic plan, reflects the profits generated by the company on our shareholders’ investment, and is a useful metric for comparing the profitability of the company and our peers. ROTCE measures the company’s net income applicable to common equity, excluding, on a tax-adjusted basis, the impact of impairment and amortization of intangible assets, as a percentage of average tangible common equity. The Committee believes it is appropriate for use in our long-term incentive program due to the strong correlation between ROTCE and the delivery of positive share price performance to shareholders. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, non-controlling interests, goodwill and certain identifiable intangible assets. For purposes of measuring performance, as provided in our 2024 Stock Incentive Plan or the applicable form of award agreement, ROTCE may be further adjusted by the Committee, in its discretion, to normalize the effect of significant notable items such as discontinued operations, changes in applicable accounting rules or principles, acquisitions, mergers or restructuring costs, and other extraordinary or unusual items or events. ROTCE results also include adjustments related to the impact of the CECL accounting standard. Cumulative three-year TSR performance relative to peers was added as a modifier because it directly reflects the relative performance of our common stock versus our financial peer group over the three-year performance period and further aligns the interests of our executives with the long-term interests of our shareholders. The Committee may adjust TSR for stock splits, reverse stock splits, stock dividends, and other unusual, extraordinary or non-recurring transactions or events, or other similar changes in the capital structure of the company, as applicable. Setting the levels of absolute and relative ROTCE for the 2025