Bread Financial Holdings, Inc DEF 14A, filed Apr 3, 2024

About this DEF 14A

Bread Financial Holdings, Inc. (BFH)

DEF 14A 2024-04-03 For: 2024-05-14

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Added on June 12, 2026

Members

Roger H. Ballou

John C. Gerspach, Jr. (Chair)

Timothy J. Theriault

*John J. Fawcett

Independent/
Financially Literate

Each member is independent
and financially literate.

Audit Committee
Financial Experts

Mr. Ballou, Mr. Gerspach and *Mr. Fawcett

* If John J. Fawcett is elected as a director, he will serve on the Audit Committee after the 2024 annual meeting. Mr. Fawcett is independent, financially literate and an Audit Committee Financial Expert.

Roles and Responsibilities

The Audit Committee’s primary roles and responsibilities include:

• assisting our Board in fulfilling its oversight responsibilities with respect to the integrity of our consolidated financial statements; our compliance with legal and regulatory requirements; the independent registered public accounting firm’s qualifications and independence; the performance of our internal audit department and the independent registered public accounting firm; and our financial function, including annual operating budget, corporate debt and capital planning

• preparing the Audit Committee report included in this proxy statement

• reviewing our consolidated financial statements and related disclosures to be included in filings with the SEC

• appointing, compensating, and overseeing our independent registered public accounting firm

• approving audit and permissible non-audit services to be performed by our independent registered public accounting firm

• overseeing our internal audit function

• reviewing and approving related party transactions

• reviewing the audit practices, guidelines and policies of our bank subsidiaries

• reviewing certain business and client contracts of the Company and our bank subsidiaries, as well as proposed acquisition or divesture, merger, outsourcing or similar agreements exceeding certain thresholds

• establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters

• overseeing our finance function and reviewing significant finance-related policies

• providing risk oversight as set forth under the caption “Board’s Role in Risk Oversight” below

Bread Financial Holdings, Inc filed this DEF 14A on April 3, 2024.

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				Managing Our Business Responsibly
				Empowering Customers
				Engaging Our Associates
				Protecting Our Planet
				Creating Possibilities for Our Communities



Date & Time:	Place:	Record Date:
Tuesday, May 14, 2024 9:00 a.m., Central Time	Via Webcast @ www. proxydocs.com/BFH	March 20, 2024

How to Vote:
You are cordially invited to attend the virtual meeting, but whether or not you expect to attend, we urge you to grant your proxy to vote your shares by telephone or through the Internet by following the instructions included on the Notice of Internet Availability of Proxy Materials that you received, or if you received a paper copy of the proxy card, to mark, date, sign and return the proxy card in the envelope provided. You may still vote electronically if you attend the virtual meeting, even if you have given your proxy (other than for shares held in the Bread Financial 401(k) Plan), subject to the requirement to provide a proof of legal proxy for shares held by brokers or other nominees.


		Items of Business

		01 \| ELECTION OF DIRECTORS

		02 \| ADVISORY VOTE ON EXECUTIVE COMPENSATION

		03 \| APPROVAL OF 2024 OMNIBUS INCENTIVE PLAN

		04 \| RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR 2024

		05 \| SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF


By order of the Board of Directors,

Joseph L. Motes III		April 3, 2024
Corporate Secretary		7500 Dallas Parkway, Suite 700 Plano, Texas 75024


Proxy Summary			i

Agenda and Voting Recommendations			1

Corporate Governance			2

Board of Directors and Committees			4

Board and Committee Evaluations			9

Director Selection Process			11

Board’s Role in Risk Oversight			14

Certain Relationships and Related Party Transactions			18

Investor Engagement			19

Commitment to Sustainability			24

Proposal 1: Election of Directors			32

Executive Officers			46

Compensation & Human Capital Committee Report			50



		Compensation Discussion & Analysis			51

		Named Executive Officers			51

		Company Highlights and 2023 Focus Areas			52

		Say-On-Pay and Stockholder Engagement			56

		Compensation Principles and Governance			60

		Compensation Programs			63

		Compensation Determination Process			77

		Compensation Policies and Practices			80

		Other Plans or Agreements Governing Executive Compensation			82


Director and Executive Officer Compensation			83

Security Ownership of Certain Beneficial Owners			102

Proposal 2: Advisory Vote on Executive Compensation			104

Proposal 3: Approval of the 2024 Omnibus Incentive Plan			105

Audit Committee Report			116

Proposal 4: Ratification of the Selection of the Independent Registered Public Accounting Firm			117

Additional Information			120

Questions and Answers about the Proxy Process			120

Attending the Virtual Annual Meeting			126

Incorporation by Reference			127

Delinquent Section 16(a) Reports			127

Householding of Annual Meeting Materials			128

Other Matters			129

Forward-Looking Statements			129

Appendix A – Non-GAAP Financial Measures Reconciliation			A-1

Appendix B – 2024 Omnibus Incentive Plan			B-1


NET INCOME (continuing operations) $737M( $513M)				EARNINGS PER DILUTED SHARE (continuing operations) $14.74( $10.27)

REVENUE $4.3B ( 12%)				AVERAGE LOANS $18.2B( 3%)

PPNR* $2.2B ( 16%)				COMMON EQUITY TIER 1 CAPITAL RATIO 12.2%( 3.5%)

REDUCED PARENT UNSECURED DEBT BY: ~$500M				GREW CONSUMER DEPOSITS TO: $6.5B


BOARD INDEPENDENCE		BOARD AND COMMITTEE MEETINGS IN FISCAL 2023		DIRECTOR ELECTIONS
Independent Board Committees: All
		7	Full Board Meetings	ANNUAL Frequency of Board Elections

Independent Director Nominees		19	Audit Committee	MAJORITY Voting Standard for Uncontested Elections
8/9		7	Compensation & Human Capital Committee	MAJORITY Voting Standard for Uncontested Elections

75	Mandatory Retirement Age	4	Nominating & Corporate Governance Committee

		4	Risk & Technology Committee



		• Proxy access for stockholders • Majority voting for uncontested director elections • Responsive, active and ongoing stockholder engagement program		• Annual election of all directors • Stockholder right to call a special meeting • Annual advisory vote on executive compensation • No poison pill

		• Independent Chair of the Board of Directors • Annual Board and committee self-assessments • Individual director assessments by independent third-party facilitator • All independent director nominees, except CEO • Independent directors frequently meet in executive session • Diverse and highly-skilled Board, with three female directors and one ethnically-diverse director • Demonstrated commitment to Board refreshment and Board diversity, with 7 new directors nominated since 2019 • Committed to seeking women and underrepresented minority candidates to include in every pool from which Board nominees are chosen • Skills matrix-driven nominee selection and Board composition • Two female directors serve as Board committee chairs		• All financially literate Audit Committee members and multiple Audit Committee Financial Experts • Strong commitment to ESG matters and sustainability • Mandatory retirement age of 75 years for directors • Comprehensive director onboarding program • Significant stock ownership requirements for directors and executive officers • Prohibition on hedging, pledging and speculative trading of Company securities • Codes of Ethics for associates, directors and senior financial officers, with annual acknowledgment and training • Limitations on directors’ public company board and audit committee service

		• Active Board and committee oversight of the Company’s business plan, corporate strategy and risk management • Monitors the “tone at the top” and our workplace culture and values • Active Board engagement in managing talent and succession planning for executives • Periodic reports and presentations to Board and Audit and Risk & Technology committees focusing on cybersecurity		• Annual dedicated Board retreat focused on corporate strategy • Risk & Technology Committee oversight of our enterprise risk management and enterprise technology functions • Nominating & Corporate Governance Committee oversight of ESG matters • Compensation & Human Capital Committee oversight of human capital management strategies and diversity, equity, inclusion and belonging (DEIB) initiatives


80% We contacted stockholders representing approximately 80% of our shares		63% Holders of approximately 63% of our shares responded and engaged

~150 Total number of equity investors we engaged with		~100 Total number of debt investors we engaged with



Stockholder Engagement Management and, where appropriate, directors engage with stockholders through various means, including investor meetings, conferences and video/phone calls. We use the information and viewpoints gathered in our discussions with stockholders to help inform our priorities and strategies. Below are certain key topics frequently discussed with our stockholders.	Sustainability & ESG Engagement We actively seek the input of a broad range of stakeholders in advancing our sustainability objectives, including further integrating ESG into our business strategy. In 2023 we conducted our fourth materiality assessment, engaging with the various stakeholders listed below to better understand their views and ensure we are prioritizing issues important to them, and our long-term business success.	Commitment to Transparency We are committed to visibility and transparency into our business and to sharing our perspectives on matters of interest to our stakeholders, including our commitment to social responsibility. Below are certain examples of our commitment to transparency.
• Business strategy and outlook • Board composition and succession planning • Risk management • ESG • Corporate governance • Data privacy and security • Executive compensation, including response to our annual say-on-pay votes For more detail, see “Corporate Governance – Investor Engagement” (page 19) and “Compensation Discussion and Analysis–Say-On-Pay and Stockholder Engagement” (page 56).	• Associates • Brand partners • Customers • Stockholders • Regulators and government officials • Community and non-governmental organizations For more detail, see “Commitment to Sustainability” beginning on page 24 of this proxy statement.	• Financial reporting presentation now aligns more closely to bank holding company peers, allowing for greater comparability for investors • Enhanced compensation disclosures • Annual Sustainability Report • Other disclosures addressing matters critical to stakeholders can be found on our website, including: • Human Rights Statement • Environmental Policy Statement • Codes of Ethics • Supplier Code of Conduct • Political Contributions and Activity Policy


		Relevant Industry Experience
				9/9


Committees		Primary Areas of Risk Oversight

Risk & Technology Committee		• provides oversight on our enterprise risk management framework, including significant enterprise risk management-related strategies, guidelines, policies and risk limits • provides oversight on our enterprise technology function, including governance, planning and strategy • evaluates risk information provided by our Chief Risk Officer and reports to the Board those material risks that might adversely affect the achievement of our strategic, financial, compliance, operational and enterprise objectives • monitors and evaluates trends and developments in technology, as well as industry trends, that may affect our strategic plans • reviews and assesses whether we are operating in accordance with our established risk appetite and assesses the alignment of our strategy and capital plans with our risk appetite statements • meets with senior executives and receives reports on risk topics, including, regulatory examination reports, enterprise technology, cybersecurity and physical security, privacy compliance, disaster recovery plans and procedures, operational risk, fraud management, and data-related risks • provides oversight on the Company’s compliance with applicable laws and regulations • reviews risk assessment and risk management governance and practices at our bank subsidiaries • provides oversight as set forth under the caption “Board Oversight of Information Security and Cybersecurity” below

Audit Committee		• provides oversight on risks relating to the Company’s consolidated financial statements, financial reporting and accounting processes and controls • provides oversight on our finance function, including annual operating budget, corporate debt and capital planning • reviews with management matters related to the effectiveness of the Company’s operational risk management control environment and the status of corrective actions • together with the Risk & Technology Committee, reviews the Company’s major financial risk exposures and management’s response to monitor and control such exposures, including financial risks relating to litigation or other legal, regulatory or compliance matters • together with the Risk & Technology Committee, reviews key guidelines and policies governing the Company’s significant processes for risk assessment and risk management

Compensation & Human Capital Committee		• provides oversight on risks related to compensation matters, including the design of our compensation programs to ensure they align the interests of participants with those of our stockholders and provide safeguards against and do not promote excessive risk-taking by program participants • approves performance targets and ranges in our annual and long-term incentive programs and the subsequent achievement of previously-approved performance targets • provides oversight on risks related to human capital management, including recruiting, retention and career development, DEIB and management succession planning

Nominating & Corporate Governance Committee		• provides oversight on risks related to corporate governance, including governance matters that could impact the Company’s performance or reputation or that are of concern to stockholders, including board composition, diversity and refreshment, director succession planning and corporate ethics • provides oversight on risks related to ESG and sustainability issues, including climate change, human rights, social impact and other related matters


Contacted investors representing approximately 80% of our common stock	Investors representing approximately 63% of our common stock responded and engaged	Engaged with approximately 150 discrete equity investors

Engaged with approximately 100 discrete debt investors	CFO met with over 200 discrete equity and debt investors	CEO met with over 80 discrete equity and debt investors

Attended 11 industry conferences	Held 11 non-deal roadshows	Held 15 meetings with ratings agencies

Investors representing approximately 41% of our common stock engaged on executive compensation issues	Investors representing approximately 43% of our common stock engaged on ESG-related issues	Board Chair met with investors representing approximately 18% of our common stock

	Key Topics Discussed • business strategy and outlook • board composition and succession planning • risk management • ESG/sustainability • corporate governance • data privacy and security • executive compensation, including response to our annual say-on-pay votes



44%	women senior leaders (director level and above)	$8M	community investment


100%	renewable energy sourced at our headquarters in Columbus, Ohio	$7.5M	new commitments to support small businesses


Top 5 Topics:		Bottom 5 Topics:

Business Ethics and Integrity Customer Privacy, Cybersecurity Customer Satisfaction Fair & Responsible Banking Risk Management and Compliance		Greenhouse Gas Emissions Low Carbon Products and Services Physical Climate Risk Renewable Energy Water Management


Ragan Workplace Wellness Award in financial wellness for providing resources and programs designed to help associates and their families improve their financial confidence.		Healthy KC Platinum Level Certification – the highest level of distinction – from the Greater Kansas City Chamber of Commerce for demonstrating a commitment to associate well-being.		Gold-level recognition from the Healthy Business Council of Ohio for demonstrating a commitment to offering programs and resources that support associate well-being.



		ACCOUNTING / AUDITING / RISK MANAGEMENT As a public company, our complex accounting and financial reporting functions are subject to a rigorous program of controls and procedures and our Board plays an important role in oversight of our robust audit and enterprise risk management organizations. Directors with experience in these areas are critical to evaluating and providing effective oversight of our consolidated financial statements and financial reporting and our management of the risks inherent in our business operations.						CORPORATE FINANCE / CAPITAL MANAGEMENT Our corporate finance activities include debt financing transactions, debt and equity market transactions and stock repurchase programs. We allocate capital in various ways to run our operations, grow our business and return value to stockholders. Director experience in these areas is important for effective oversight of our Company’s financial affairs and capital planning and management.


		BUSINESS OPERATIONS Our business is complex, employing approximately 7,000 associates worldwide and using sophisticated technologies to provide tech-forward payment, lending and saving solutions. Directors with “hands-on” experience developing and implementing operating plans and business strategies at companies with similarly sophisticated business operations have a practical understanding of how such organizations operate in increasingly sophisticated and disruptive competitive environments.						FINANCIAL EXPERTISE / LITERACY Our business involves complex financial transactions, accounting and reporting requirements. Directors with an understanding of finance and financial reporting processes are able to effectively monitor and assess our operating and strategic performance and ensure accurate financial reporting and robust controls. Substantially all of our nominees are financially literate and two of our nominees satisfy the “accounting or related financial management expertise” criteria set forth in the New York Stock Exchange listing standards.


		CEO / EXECUTIVE LEADERSHIP Executive leaders have an understanding of organizations and the drivers of individual and team growth and development. Directors with experience serving as a CEO or senior executive enhance the Board’s perspective of our organization’s operations and challenges.						HUMAN CAPITAL / COMPENSATION The success of our enterprise depends in part on our ability to attract, retain and develop top leaders and a high-performing workforce in markets that are highly competitive for available talent. Directors who have board-level experience with public company executive compensation and broad-based incentive planning, or who have managed or overseen the human resources/compensation function at an operating company help position our Company for success in these areas.


		CORPORATE GOVERNANCE / ETHICS We are an ethics-driven organization, and our Board – and in particular the Nominating & Corporate Governance Committee – provides a foundation for and oversight of our integrity-based culture. Our Board’s good governance practices and our Company’s focus on ESG matters and sustainability benefit from directors who are well-informed with respect to today’s dynamic governance and ethics environment and who have experience serving on the nominating & corporate governance or comparable committees of other boards.						INDEPENDENCE Independent directors are uniquely situated to provide unbiased oversight of our management and to work with our senior leaders to develop our Company’s strategic plans. Our Board currently consists of, and if all of the director nominees are elected at the annual meeting, will continue to consist exclusively of independent directors, other than the CEO. All directors currently serving on the Board’s standing committees are independent, and if all of the director nominees are elected at the annual meeting, each of those committees will continue to be populated exclusively by independent directors.



		INFORMATION TECHNOLOGY / CYBERSECURITY / PRIVACY Our tech-forward business depends on the effective use of complex information technology systems, the safeguarding of data from cybersecurity risks and the protection and use of consumer data in accordance with applicable privacy regulations and good stewardship practices. Directors with experience implementing or overseeing sophisticated technology and technology strategies, the management and mitigation of cybersecurity and information technology risks and compliance with privacy regulations help ensure proper risk management and oversight of these important drivers of our business.						MERGERS & ACQUISITIONS We have historically made acquisitions and dispositions and may continue to do so in the future. Board members with experience in material M&A transactions enhance the decision-making underlying strategic M&A activities and ensure informed oversight of the processes attendant to completing complex transactions.


		INTERNATIONAL OPERATIONS While our business operations are currently primarily operated in the United States, we have associates and offices in countries located outside of the United States, principally in India, and may expand international operations at some point in the future. The quality of our Board’s oversight and strategic guidance is enhanced by directors whose understanding of diverse business environments, economic conditions and cultures has been informed by service as a director or senior leader at one or more companies with international operations.						OTHER PUBLIC COMPANY BOARD EXPERIENCE Public companies must comply with a variety of complex accounting, disclosure and other compliance obligations, and public company boards have significant oversight and other duties. Directors with experience serving on the boards and board committees of other public companies understand public company reporting responsibilities, corporate governance trends and practices and other issues commonly faced by public companies, and have insight into board operations, board/management relations, agenda setting, succession planning and other board duties and activities. Our Corporate Governance Guidelines include limits on the number of other public company boards and audit committees on which our directors may serve.


		Committee Membership

Name	Independent	Audit	Compensation & HC	N&CG	Risk & Technology

Ralph J. Andretta

Roger H. Ballou (Chair)	●	●	●

John J. Fawcett	●	●		●

John C. Gerspach, Jr.	●	Chair			●

Rajesh Natarajan	●			●	●

Joyce St. Clair	●		●		●

Timothy J. Theriault	●	●			Chair

Laurie A. Tucker	●		●	Chair

Sharen J. Turney	●		Chair	●


Age: 63		Ralph J. Andretta PRESIDENT \| CHIEF EXECUTIVE OFFICER \| DIRECTOR

		Biographical Information • Mr. Andretta’s biographic information appears under Proposal One: Election of Directors in this proxy statement.