Northern Trust Corp DEF 14A, filed Mar 6, 2024

Northern Trust Corp (NTRS)

DEF 14A 2024-03-06 For: 2024-04-16

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Added on June 12, 2026

About this DEF 14A

Northern Trust Corp filed this DEF 14A on March 6, 2024.

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☐		Preliminary Proxy Statement

☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒		Definitive Proxy Statement

☐		Definitive Additional Materials

☐		Soliciting Material under §240.14a-12



☒		No fee required

☐		Fee paid previously with preliminary materials

☐		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11


Date:		Tuesday, April 16, 2024

Time:		10:30 a.m., Central Time

Access:		Our Annual Meeting can be accessed virtually at www.virtualshareholdermeeting.com/NTRS2024. There will be no physical, in-person meeting.

Purposes:		The purposes of the Annual Meeting are to:

		● elect eleven directors to serve on the Board of Directors until the 2025 Annual Meeting of Stockholders or until their successors are elected and qualified; ● approve, by an advisory vote, 2023 named executive officer compensation; ● ratify the appointment of KPMG LLP as Northern Trust Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2024; ● consider a stockholder proposal to ascertain voting preferences, if properly presented at the Annual Meeting; and ● transact any other business that may properly come before the Annual Meeting.

Record Date:		You can, and should, vote if you were a stockholder of record at the close of business on February 26, 2024.


PROXY SUMMARY			1


ITEM 1—ELECTION OF DIRECTORS			10


INFORMATION ABOUT THE NOMINEES FOR DIRECTOR			11

Biographical Information			11

Director Skills and Experience Matrix			17

BOARD AND BOARD COMMITTEE INFORMATION			18


Board Committees			18
Audit Committee			19
Business Risk Committee			19
Capital Governance Committee			19
Corporate Governance Committee			20
Executive Committee			20
Human Capital and Compensation Committee			20

CORPORATE GOVERNANCE			21


Key Governance Practices			21
Director Independence			21
Related Person Transactions Policy			22
Executive Sessions			22
Board Evaluations			23
Board Leadership Structure			23
Risk Oversight			24
Corporate Governance Guidelines			25
Code of Business Conduct and Ethics			25
Director Nominations and Qualifications and Proxy Access			26
Stockholder Engagement			26
Sustainability			27
Human Capital Management			29
Communications with the Board and Independent Directors			30
Securities Transactions Policy and Policy Against Hedging			30

ITEM 2—ADVISORY VOTE ON EXECUTIVE COMPENSATION			31


COMPENSATION DISCUSSION AND ANALYSIS			32


Our Named Executive Officers			32
Executive Summary			33
Guiding Principles for Executive Compensation			38
Risk Management			38
Executive Compensation Program Elements			40
Executive Compensation Determination Process			41
2023 Compensation Design and Decisions			42
Other Compensation Practices			50

HUMAN CAPITAL AND COMPENSATION COMMITTEE REPORT			53



EXECUTIVE COMPENSATION			54


Summary Compensation Table			54
Grants of Plan-Based Awards			55
Description of Certain Awards Granted in 2023			56
Outstanding Equity Awards at Fiscal Year-End			57
Option Exercises and Stock Vested			58
Pension Benefits			58
Nonqualified Deferred Compensation			61
Potential Payments Upon Termination of Employment or a Change in Control of the Corporation			62
CEO Pay Ratio			65

PAY VERSUS PERFORMANCE			66


DIRECTOR COMPENSATION			69


Annual Retainer and Other Fees			69
Deferral of Compensation			69
Stock Ownership Guidelines			69
Director Compensation Table			70

EQUITY COMPENSATION PLAN INFORMATION			71


AUDIT COMMITTEE REPORT			72


AUDIT MATTERS			73


Fees of Independent Registered Public Accounting Firm			73
Pre-Approval Policies and Procedures of the Audit Committee			73

ITEM 3—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			74


ITEM 4—STOCKHOLDER PROPOSAL TO ASCERTAIN VOTING PREFERENCES			75


STOCKHOLDER PROPOSALS FOR 2025 ANNUAL MEETING			78


SECURITY OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS			79


Delinquent Section 16(a) Reports			79

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS			80


GENERAL INFORMATION ABOUT THE ANNUAL MEETING			81


HELPFUL RESOURCES			85


							Long-Term Incentives
Executive	Year		Salary (1)		Short-Term Annual Cash Incentive		Performance Stock Units		Restricted Stock Units		Total Incentive Compensation (2)		Total
Michael G. O’Grady Chairman and Chief Executive Officer		2023	$	1,000,000	$	500,000	$	5,005,000	$	2,695,000	$	8,200,000	$	9,200,000
Michael G. O’Grady Chairman and Chief Executive Officer		2022		1,000,000		1,000,000		5,525,000		2,975,000		9,500,000		10,500,000
Jason J. Tyler Chief Financial Officer		2023		600,000		990,000		1,501,500		808,500		3,300,000		3,900,000
Jason J. Tyler Chief Financial Officer		2022		600,000		1,080,000		1,638,000		882,000		3,600,000		4,200,000
Peter B. Cherecwich President—Asset Servicing		2023		675,000		1,147,500		1,740,375		937,125		3,825,000		4,500,000
Peter B. Cherecwich President—Asset Servicing		2022		675,000		1,320,000		2,002,000		1,078,000		4,400,000		5,075,000
Steven L. Fradkin President—Wealth Management		2023		675,000		1,147,500		1,740,375		937,125		3,825,000		4,500,000
Steven L. Fradkin President—Wealth Management		2022		675,000		1,320,000		2,002,000		1,078,000		4,400,000		5,075,000
Daniel E. Gamba(3) President—Asset Management		2023		675,000		1,147,500		1,740,375		937,125		3,825,000		4,500,000
Daniel E. Gamba(3) President—Asset Management		2022		—		—		—		—		—		—


What We Do		What We Do Not Do

✓ Majority Independent Directors ✓ Engaged Lead Director ✓ Proxy Access Rights ✓ Stockholder Right to Call Special Meetings ✓ Frequent Executive Sessions for Independent Directors ✓ Annual Strategic Planning Meeting with Board and Executive Officers ✓ Regular Rotations of Committee Chairs ✓ Regular Reviews of Governance Documents ✓ Annual Board Self-Evaluations		✗ Plurality Voting in Uncontested Director Elections ✗ Staggered Board ✗ Poison Pill ✗ Supermajority Voting Requirements ✗ Overboarding of Directors


What We Do				What We Do Not Do

✓ Closely align pay and performance, with the Human Capital and Compensation Committee validating this alignment annually ✓ Ensure performance-based compensation comprises the most significant portion of incentive compensation, with 65% of long-term incentives being awarded in performance stock units based on performance over a three-year period ✓ Subject short- and long-term incentive awards to potential forfeiture or clawback in the event of misconduct resulting in a restatement of our financial statements and certain other types of misconduct ✓ Ensure our executives meet robust stock ownership guidelines, including holding requirements for any executive below the stock ownership guidelines ✓ Use an independent compensation consultant to advise the Human Capital and Compensation Committee ✓ Ensure overlapping membership between the Human Capital and Compensation Committee and our Audit and Business Risk Committees				✗ Excise tax gross-ups for executive change in control arrangements ✗ Single-trigger change in control benefits ✗ Short selling, margining, hedging, pledging or hypothecating company shares permitted under our Securities Transactions Policy ✗ Compensation plans that encourage excessive risk-taking ✗ Excessive perquisites ✗ Repricing of underwater options ✗ Dividend equivalents distributed on unvested performance or restricted stock unit awards


Stockholder Submission		Window for Submission

Proposals for inclusion in the proxy statement	g	On or before November 6, 2024

Other proposals (not included in the proxy statement)	g	Between November 17, 2024 and December 17, 2024

Director nomination under proxy access provisions	g	Between October 7, 2024 and November 6, 2024

Notification of intent to solicit proxies in support of director nominees other than the Corporation’s nominees	g	On or before February 15, 2025


AUDIT COMMITTEE
MEMBERS Jay L. Henderson (Chair) Linda Walker Bynoe Dean M. Harrison Marcy S. Klevorn David H. B. Smith, Jr.		KEY RESPONSIBILITIES / AREAS OF OVERSIGHT
		The Audit Committee assists the Board in its oversight of: ● the integrity of the Corporation’s consolidated annual and quarterly financial statements and earnings releases; ● the Corporation’s compliance with accounting, legal and regulatory requirements; ● the qualifications and independence of the Corporation’s public accountants; and ● the performance of the Corporation’s internal audit function and public accountants.
The Board has determined that all members of the Audit Committee are independent under SEC rules and NASDAQ listing standards. The Board also has determined that all Audit Committee members have the financial experience and knowledge required for service on the Committee, and that Messrs. Harrison, Henderson, and Smith and Ms. Bynoe each satisfy the definition of “audit committee financial expert,” under SEC rules. The Audit Committee met seven times in 2023.


BUSINESS RISK COMMITTEE
MEMBERS Dean M. Harrison (Chair) Susan Crown Marcy S. Klevorn Siddharth N. “Bobby” Mehta		KEY RESPONSIBILITIES / AREAS OF OVERSIGHT
		The Business Risk Committee assists the Board in its oversight of: ● the risk management policies of the Corporation’s global operations; ● the operation of the Corporation’s global risk management framework; and ● management’s procedures for identifying, measuring, aggregating, and reporting on: ^¡ the Corporation’s risk-based capital requirements; and ^¡ the risks inherent in the businesses of the Corporation and its subsidiaries in the following categories, as well as related risk themes: credit risk, market and liquidity risk, fiduciary risk, operational risk, compliance risk and strategic risk.
The Board has determined that all members of the Business Risk Committee are independent under SEC rules and NASDAQ listing standards. The Business Risk Committee met eight times in 2023. As noted above, the Business Risk Committee has established a Cybersecurity Risk Oversight Subcommittee to assist the Business Risk Committee with oversight of cybersecurity risk. The Subcommittee consists of the following directors: Marcy S. Klevorn (Chair), Dean M. Harrison, and Siddharth N. “Bobby” Mehta. The Cybersecurity Risk Oversight Subcommittee met eight times in 2023.


CAPITAL GOVERNANCE COMMITTEE
MEMBERS David H. B. Smith, Jr. (Chair) Jay L. Henderson Siddharth N. “Bobby” Mehta Donald Thompson		KEY RESPONSIBILITIES / AREAS OF OVERSIGHT
		The Capital Governance Committee assists the Board in its oversight of the capital management and resolution planning activities of the Corporation, including: ● the capital management assessments, forecasting, and stress-testing processes and activities of the Corporation and its subsidiaries, including with respect to the annual Comprehensive Capital Analysis and Review (“CCAR”) exercise; ● the Corporation’s annual capital plan, including proposed capital actions; ● the Corporation’s and the Bank’s regulatory capital ratios and capital levels; and ● the Corporation’s and the Bank’s resolution plans.
The Board has determined that all members of the Capital Governance Committee are independent under SEC rules and NASDAQ listing standards. The Capital Governance Committee met seven times in 2023.


CORPORATE GOVERNANCE COMMITTEE
MEMBERS Linda Walker Bynoe (Chair) Jay L. Henderson Jose Luis Prado Charles A. Tribbett III		KEY RESPONSIBILITIES / AREAS OF OVERSIGHT
		The Corporate Governance Committee assists the Board with: ● the identification of candidates for nomination or appointment as directors; ● the oversight of the Board’s committee structure; ● the oversight of the annual evaluation of the Board and its committees; ● the development of the Corporation’s Corporate Governance Guidelines; ● the appointment of a successor in the event of the unanticipated death, disability or resignation of the Corporation’s CEO; ● the procedures relating to stockholder communications with the Board; and ● other environmental, social, and governance (“ESG”) matters of significance to the Corporation and its subsidiaries.
The Board has determined that all members of the Corporate Governance Committee are independent under SEC rules and NASDAQ listing standards. The Corporate Governance Committee met four times in 2023.


EXECUTIVE COMMITTEE
MEMBERS Michael G. O’Grady (Chair) Linda Walker Bynoe Dean M. Harrison Jay L. Henderson David H. B. Smith, Jr. Donald Thompson		KEY RESPONSIBILITIES / AREAS OF OVERSIGHT
		The Board appoints an Executive Committee so that there will be a committee of the Board empowered to act for the Board, to the full extent permitted by law, between meetings of the Board if necessary and appropriate. In the event of a triggering event, the Executive Committee is also responsible for directing the execution of appropriate resolution and recovery plans.
The Executive Committee did not meet in 2023.


HUMAN CAPITAL AND COMPENSATION COMMITTEE
MEMBERS Donald Thompson (Chair) Susan Crown Jay L. Henderson Jose Luis Prado Charles A. Tribbett III		KEY RESPONSIBILITIES / AREAS OF OVERSIGHT
		The Human Capital and Compensation Committee assists the Board in its oversight of: ● the compensation of the directors and executive officers; ● employee benefit and equity-based plans; ● DE&I strategies and initiatives; ● management development and succession planning; and ● other human capital management matters of significance.
The Board has determined that all members of the Human Capital and Compensation Committee are independent under SEC rules and NASDAQ listing standards. The Human Capital and Compensation Committee met five times in 2023.



Who We Engage	How We Engage	Who Participates

● Institutional investors ● Sell-side analysts ● Retail stockholders ● Pension funds ● Bondholders ● Proxy advisory firms ● Credit rating agencies ● ESG rating agencies ● Stewardship teams	● One-on-one and group meetings, in-person and virtually ● Quarterly earnings calls ● Industry and sell-side events ● Proactive outreach ● Written and electronic communications	● Executive management ● Investor relations team ● Senior leadership ● Board members ● Subject matter experts
		Key Topics of Engagement
		● Overall business strategy
		● Current business conditions
		● Financial performance ● Business continuity and operational resilience ● Sustainability, corporate citizenship, and social impact ● Corporate governance and executive compensation practices ● Human capital management
Key Engagement Resources
● Quarterly earnings ● Annual meeting ● Annual proxy statement ● Annual report ● Other SEC filings	● Northern Trust’s website ● Sustainability report ● Public events and presentations ● Disclosures to various ratings assessors



Engagement by the Numbers
~540 Investor Interactions	~260 Investor Meetings Hosted	~140 Investor Interactions with C-Suite
~40% Common Stock Outstanding Engaged


Our 2022 named executive officer compensation was approved on an advisory basis by our stockholders at our 2023 Annual Meeting of Stockholders. Approximately 97% of the votes present and entitled to vote at the meeting, including abstentions, supported approval of 2022 named executive officer compensation. Although such advisory votes are nonbinding, the Board reviews and thoughtfully considers the voting results when determining compensation policies and making future compensation decisions for named executive officers. Additionally, as mentioned under “Stockholder Engagement” beginning on page 26 of this Proxy Statement, it is our practice to engage proactively and routinely with stockholders throughout the year to help further their understanding of our performance and strategies and to allow us to receive direct feedback on issues relating to the Corporation. The decisions made by the Board and the Human Capital and Compensation Committee with respect to compensation for 2023 reflect the Board and the Committee’s belief, based on the results of the advisory vote on 2022 named executive officer compensation and our ongoing dialogue with stockholders, that our stockholders generally support our overall executive compensation program.


Guiding Principle		Impact on Compensation Design

Linked to Long-Term Performance		● Performance stock units, which constitute 65% of long-term incentive compensation, are based on achievement of three-year average ROE targets on an absolute basis and our three-year average ROE relative to that of our performance peer group.

Aligned with Stockholder Interests		● Majority of incentive compensation is delivered in long-term incentives (approximately 94% of 2023 total incentive compensation for Mr. O’Grady). ● Executives are subject to robust stock ownership guidelines.

Positioned Competitively in the Marketplace		● Compensation levels are developed with reference to similar roles at a peer group of comparable companies.

Discourages Inappropriate Risk-Taking		● Short- and long-term incentives are subject to potential forfeiture or clawback in the event of a restatement of our financial statements and certain types of misconduct, including inappropriate risk-taking resulting in “significant risk outcomes.” ● Short-term cash incentive compensation awards and performance stock unit payouts are capped. ● Human Capital and Compensation Committee can exercise negative discretion to reduce incentive compensation. ● Compensation program balances short-term and long-term performance objectives.


Element	Link to Compensation Philosophy	Rationale/Key Features

Base Salary	● Targeted at competitive levels among compensation peer group companies.	● Base salaries provide a fixed level of income consistent with a named executive officer’s position and responsibilities, competitive pay practices and internal equity principles.

Incentive Compensation	● Total incentive funding for the Corporation is established as a percentage of pre-tax income. ● Individual awards are targeted at competitive levels among compensation peer group companies, with actual awards varying to reflect both company and individual performance. ● Allocated in a mix that is predominantly equity-based (at least 75% for the CEO and 70% for other named executive officers).	● The Human Capital and Compensation Committee determines incentive awards based on a holistic assessment of corporate, business unit and individual performance along with consideration of internal equity and external market data.

Annual Cash Incentive	● Provides cash award to reward prior-year performance.	● Represents no more than 25% of incentive compensation for the CEO and 30% of incentive compensation for other named executive officers.

Performance Stock Units	● Provides deferred incentive compensation subject to future long-term performance outcomes. ● Aligned with stockholders’ interests by motivating executive officers to act as owners.	● Comprises 65% of equity compensation. ● The number of shares that will vest will be determined based on three-year average absolute and relative ROE performance.

Restricted Stock Units	● Provides deferred incentive compensation subject to time-based vesting requirements. ● Aligned with stockholders’ interests by motivating executive officers to act as owners and provides enhanced retention.	● Comprises 35% of equity compensation. ● Vests ratably over four years.

Retirement, Health and Welfare Benefits	● Targeted at competitive levels among peer group companies.	● Benefits are designed with broader employee populations in mind and are not specifically structured for executive officers.


Compensation Peer Group

● BlackRock, Inc.		● Truist Financial Corporation

● Fifth Third Bancorp		● T. Rowe Price Group, Inc.

● Franklin Resources, Inc.		● The Bank of New York Mellon Corporation

● KeyCorp		● The Charles Schwab Corporation

● M&T Bank Corporation		● The PNC Financial Services Group, Inc.

● State Street Corporation		● U.S. Bancorp



MICHAEL G. O’GRADY

Chairman and Chief Executive Officer
2023 TOTAL DIRECT COMPENSATION	Overview of Responsibilities and Performance Evaluation As the Corporation’s Chairman and CEO, Mr. O’Grady is primarily responsible for leading the development and implementation of our corporate strategies; managing risk; developing our senior leaders; and embodying our guiding principles of service, expertise and integrity. To determine Mr. O’Grady’s 2023 compensation, the Human Capital and Compensation Committee and the Board considered the performance of the Corporation under Mr. O’Grady’s leadership, the performance of the Corporation’s leadership team as a whole, and how well Mr. O’Grady fulfilled his specific individual performance objectives. Mr. O’Grady’s individual performance objectives were set in early 2023 at the direction of the Human Capital and Compensation Committee and the full Board. In early 2024, the Human Capital and Compensation Committee and the Board evaluated Mr. O’Grady’s performance against the individual objectives established for him in 2023. The Human Capital and Compensation Committee and the Board considered not only whether Mr. O’Grady satisfied each of his individual performance objectives, but also how he satisfied such objectives. The Human Capital and Compensation Committee and the Board also considered how Mr. O’Grady’s compensation compared to that of peer CEOs. Performance Factors Key performance results considered by the Human Capital and Compensation Committee and the Board in determining Mr. O’Grady’s compensation for 2023 are reflected below.
	Performance Area	Key Performance Results
	Financial	● Total consolidated revenue remained flat at $6.8 billion in 2023 as compared to 2022, in a challenging environment. ● ROE of 10.0% for 2023, down from 12.7% for 2022, but within our target range of 10 - 15%. ● Diluted earnings per share of $5.08 for 2023, compared to $6.14 for 2022, a decrease of 17%. ● Noninterest income of $4.8 billion for 2023, compared to $4.9 billion for 2022, a decrease of 2%. ● Pre-tax margin of 21.6% for 2023, compared to 26.1% for 2022. ● Noninterest expense as a percentage of trust, investment and other servicing fees of 121% for 2023, compared to 112% for 2022.
	Business / Strategic	● High levels of client satisfaction across each of the businesses. ● Client relationships across the globe maintained and developed through outreach and engagement efforts. ● Meaningful progress on enterprise data and digital initiatives. ● Significant investment to enhance the technology environment focused on reliability, security, productivity and the delivery of high-value service and innovative solutions for clients.
	Risk	● Strong organizational resilience while operating in an environment of increased geopolitical, macroeconomic, and other risks, with a focus on continued delivery of a high-level of service to meet our clients’ needs. ● Key enterprise risk management programs progressed. ● Established new Global Head of Regulatory Affairs role, with a focus on, among other things, overseeing continuous enhancement of our risk management and controls globally.
	Talent	● Continued disciplined talent management practices, inclusive of leadership succession planning to foster workforce resiliency today and in the future. ● Enterprise initiatives to promote adaptive and engaged workforce progressed.
	Leadership	● Continued commitment to civic leadership and philanthropic giving, inclusive of launching the first annual Northern Trust Anchor Award, a $1 million grant. ● Strong employee engagement among senior management and the broader employee population.



JASON J. TYLER

Chief Financial Officer
2023 TOTAL DIRECT COMPENSATION	Overview of Responsibilities and Performance Evaluation As the Corporation’s Chief Financial Officer, Mr. Tyler is primarily responsible for financial reporting and control, management reporting and analysis, liquidity management, capital planning and investor relations. To determine Mr. Tyler’s 2023 compensation, in addition to overall company performance, the CEO and Human Capital and Compensation Committee considered how well Mr. Tyler fulfilled his specific individual performance objectives. The CEO and the Committee considered not only whether Mr. Tyler satisfied each of his individual performance objectives, but also how he satisfied such objectives. The CEO and the Committee also considered how Mr. Tyler’s compensation compared to that of peer CFOs and the additional experience and tenure he has gained in his role as CFO. Performance Factors Key performance results considered by the CEO and the Human Capital and Compensation Committee in determining Mr. Tyler’s compensation for 2023 are reflected below.
	Performance Area	Key Performance Results
	Financial	● Total consolidated revenue remained flat at $6.8 billion in 2023 as compared to 2022, in a challenging environment. ● ROE of 10.0% for 2023, down from 12.7% for 2022, but within our target range of 10 - 15%. ● Diluted earnings per share of $5.08 for 2023, compared to $6.14 for 2022, a decrease of 17%. ● Noninterest income of $4.8 billion for 2023, compared to $4.9 billion for 2022, a decrease of 2%. ● Pre-tax margin of 21.6% for 2023, compared to 26.1% for 2022. ● Noninterest expense as a percentage of trust, investment and other servicing fees of 121% for 2023, compared to 112% for 2022.
	Business / Strategic	● Significant investment portfolio repositionings executed, de-risking the portfolio and enhancing regulatory capital and liquidity ratios. ● Continued the efforts of the Productivity Office tasked with coordinating and leading our efforts to deploy our resources efficiently, resulting in more than $100 million in savings. ● $977.7 million in capital returned to common stockholders in 2023, enabled by the strength of Northern Trust’s financial position. ● Business diversity program efforts and initiatives to further encourage the economic development of diverse suppliers progressed. ● Strong investor relations program with high quality stockholder dialogue.
	Risk	● Strong balance sheet and liquidity positions maintained, enabling support of clients’ liquidity needs. ● Robust regulatory capital ratios, with the Common Equity Tier 1 ratio at 11.4% as of December 31, 2023.
	Talent	● Continued to provide executive sponsorship to the Black Business Resource Council, driving engagement and focus of diverse talent and development initiatives. ● Facilitated numerous leadership changes in the Finance organization, evidencing robust talent planning and commitment to employee development.
	Leadership	● Actively enhanced engagement with stakeholders, including regulators, clients and stockholders during challenges that confronted the industry.



PETER B. CHERECWICH

President—Asset Servicing
2023 TOTAL DIRECT COMPENSATION	Overview of Responsibilities and Performance Evaluation As the Corporation’s President of Asset Servicing, Mr. Cherecwich is primarily responsible for the overall performance of such business. To determine Mr. Cherecwich’s 2023 compensation, in addition to overall company performance, the CEO and Human Capital and Compensation Committee considered how well Mr. Cherecwich fulfilled his specific individual performance objectives. The CEO and the Committee considered not only whether Mr. Cherecwich satisfied each of his individual performance objectives, but also how he satisfied such objectives. The CEO and the Committee also considered how Mr. Cherecwich’s compensation compared to that of peers. Performance Factors Key performance results considered by the CEO and the Human Capital and Compensation Committee in determining Mr. Cherecwich’s compensation for 2023 are reflected below.
	Performance Area	Key Performance Results
	Financial	● Asset Servicing business revenue, on a fully taxable equivalent basis, of $4.14 billion for 2023, compared to $4.10 billion for 2022, an increase of 1%. ● Asset Servicing business pre-tax margin of 20.8% for 2023, compared to 24.5% for 2022. ● Asset Servicing business trust, investment and other servicing fees of $2.46 billion for 2023, compared to $2.50 billion for 2022, a decrease of 1% in a challenging environment. ● Asset Servicing business assets under custody/administration of $14.4 trillion for 2023, compared to $12.7 trillion for 2022, an increase of 13%. ● Asset Servicing business noninterest expense as a percentage of trust, investment and other servicing fees of 133% for 2023, compared to 124% for 2022.
	Business / Strategic	● Competitive position of the Asset Servicing business strengthened further within target markets, with Northern Trust receiving “Transfer Agent of the Year” and “Best Global Custodian for Asset Owners” by Funds Europe Awards and AsianInvestor Asset Management Awards, respectively. ● Front Office Solutions expanded its global presence in serving the data and operations needs of institutional investors with the addition of new clients in Europe and the Middle East. ● Data modernization accelerated through our Matrix Data Platform, pairing data mesh with other technologies for our asset servicing platforms globally. ● Data science and digital infrastructure strategies executed through Investment Data Science (IDS) and in partnership with Equity Data Science (EDS) enabling Northern Trust to be recognized as “Best Data Science Solution Provider (IDS/EDS)” at the 2023 Hedgeweek US Awards and “Best Data Management Solution (IDS/EDS)” at the 2023 HFM US Services Awards. ● Strong momentum in key growth areas such as capital markets solutions, currrency mangement, and the Fixed Income Clearing Corporation Sponsored Repo program.
	Risk	● Continued investment by the Assert Servicing business in its ability to resiliently provide capabilities to its clients and the markets in which they invest, including controls supporting information technology resiliency and third party risk oversight.
	Talent	● Numerous organizational changes to capitalize on synergies across the Asset Servicing business and provide career development to employees.
	Leadership	● Strong engagement within the Asset Servicing business through tailored communications, engagement initiatives and client events.



STEVEN L. FRADKIN

President—Wealth Management
2023 TOTAL DIRECT COMPENSATION	Overview of Responsibilities and Performance Evaluation As the Corporation’s President of Wealth Management, Mr. Fradkin is primarily responsible for the overall performance of such business. To determine Mr. Fradkin’s 2023 compensation, in addition to overall company performance, the CEO and Human Capital and Compensation Committee considered how well Mr. Fradkin fulfilled his specific individual performance objectives. The CEO and the Committee considered not only whether Mr. Fradkin satisfied each of his individual performance objectives, but also how he satisfied such objectives. The CEO and the Committee also considered how Mr. Fradkin’s compensation compared to that of peers. Performance Factors Key performance results considered by the CEO and the Human Capital and Compensation Committee in determining Mr. Fradkin’s compensation for 2023 are reflected below.
	Performance Area	Key Performance Results
	Financial	● Wealth Management business revenue, on a fully taxable equivalent basis, of $2.88 billion for 2023, compared to $2.94 billion for 2022, a decrease of 2%. ● Wealth Management business pre-tax margin of 33.9% for 2023, compared to 38.0% for 2022. ● Wealth Management business trust, investment and other servicing fees of $1.90 billion for 2023, compared to $1.94 billion for 2022, a decrease of 2%. ● Wealth Management business noninterest expense as a percentage of trust, investment and other servicing fees of 99% for 2023, compared to 94% for 2022.
	Business / Strategic	● Competitive position of the Wealth Management business maintained within target markets, with Northern Trust named the “Best Private Bank for Family Offices, U.S.” and the “Best Private Bank for Succession Planning, U.S.” by publications of the Financial Times Group. ● Continued focus on the strongly positioned family office and ultra-high-net-worth segments. ● The Northern Trust Institute further developed as a center of industry-leading advice to clients across the continuum of family wealth issues. ● Successful execution of the Wealth Management business’s holistic approach to addressing unique client needs, including through Goals Driven Wealth Management^™ solutions.
	Risk	● Delivery of exceptional client service continued, including a strong focus on client data protection, and fraud controls. ● Low levels of financial risk maintained, with continued strong loan portfolio quality despite challenging macroeconomic conditions.
	Talent	● Invested in the growth of our sales force through committed efforts to hire Wealth Strategists across the U.S.
	Leadership	● Strong leadership of The Northern Trust Institute, facilitating the publication of the book “Secrets of Enterprising Families.” ● Strong employee engagement within the Wealth Management business.



DANIEL E. GAMBA

President—Asset Management
2023 TOTAL DIRECT COMPENSATION	Overview of Responsibilities and Performance Evaluation As the Corporation’s President of Asset Management, Mr. Gamba is primarily responsible for the overall performance of such business. To determine Mr. Gamba’s 2023 compensation, in addition to overall company performance, the CEO and Human Capital and Compensation Committee considered how well Mr. Gamba fulfilled his specific individual performance objectives. The CEO and the Committee considered not only whether Mr. Gamba satisfied each of his individual performance objectives, but also how he satisfied such objectives. The CEO and the Committee also considered how Mr. Gamba’s compensation compared to that of peers. Performance Factors Key performance results considered by the CEO and the Human Capital and Compensation Committee in determining Mr. Gamba’s compensation for 2023 are reflected below.
	Performance Area	Key Performance Results
	Financial	● Consolidated assets under management of $1.4 trillion for 2023, compared to $1.2 trillion for 2022, an increase of 15%.
	Business / Strategic	● Renewed focus on segments with a demonstrated long-term track record of performance, including the Tax Advantaged Equity platform and high yield capability, with an emphasis on providing support to our Asset Servicing and Wealth Management businesses. ● Reinvestment in 50 South Capital, our boutique alternatives firm providing access to private equity and hedge fund investment opportunities. ● Client relationships developed and maintained across the globe and contributions to the new business performance realized within Asset Servicing and Wealth Management businesses in 2023.
	Risk	● Focus on the strength of the control framework within the Asset Management business in the face of increased geopolitical market impacts and counterparty risks.
	Talent	● Effective development of the Asset Management business leadership team, including through internal mobility and addition of external talent.
	Leadership	● Early advocacy of bolstering inclusion within the Asset Management business through internal and external engagement initiatives. ● Promotion of active partnering with our other business units to deliver value for clients holistically.



Performance Stock Unit Performance Schedule February 2024 Grants

Three-Year Average Annual Rate of ROE (50% Weighting)	Percentage of Stock Units Vested		Three-Year Average Annual Rate of ROE vs. Performance Peer Group (50% Weighting)	Percentage of Stock Units Vested

≤ 6%		0%	< 25^th Percentile		0%

8.5%		50%	25^th Percentile		50%

11% to 12%		100%	50^th Percentile		100%

≥ 14%		150%	Highest Percentile		150%


Reconciliation of Net Income and ROE to Adjusted Net Income and Adjusted ROE

($ In Millions)	2023			2022			2021			Average

Net Income Applicable to Common Stock (GAAP)		$1,065.5			$1,294.2			$1,503.5			$1,287.7

Add adjustments for:

Net available for sale security losses recognized from sale or intent to sell		169.5			213.0			—			127.5

Federal Deposit Insurance (FDIC) special assessment		84.6			—			—			28.2

Severance-related charges		38.7			32.0			—			23.6

Pension settlement charges		—			44.1			—			14.7

Subtract adjustments for tax impact related to:

Net available for sale security losses recognized from sale or intent to sell		(43.0)			(53.6)			—			(32.2)

FDIC special assessment		(21.5)			—			—			(7.2)

Severance-related charges		(9.8)			(8.0)			—			(5.9)

Pension settlement charges		—			(11.1)			—			(3.7)

Adjusted Net Income Applicable to Common Stock (Non-GAAP)	$	1,284.0		$	1,510.6		$	1,503.5		$	1,432.7

Average Common Equity (GAAP)	$	10,611.9		$	10,196.5		$	10,812.1		$	10,540.2

ROE (GAAP)		10.0	%		12.7	%		13.9	%		12.2	%

Adjusted ROE (Non-GAAP)		12.1	%		14.8	%		13.9	%		13.6	%



Stock Ownership Guidelines* Expected Ownership as Multiple of Base Salary

Chairman / CEO			8x

President			5x

Chief Operating Officer / Chief Financial Officer / Business Unit Heads			4x

Chief Accounting Officer			0.5x

Other Executive Officers			3x


Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)(1)		Non-Equity Incentive Plan Compensation ($)(2)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3)		All Other Compensation ($)(4)		Total ($)
Michael G. O’Grady Chairman and Chief Executive Officer		2023	$	1,000,000	$	—	$	8,500,150	$	500,000	$	138,719	$	35,891	$	10,174,760
		2022		987,500		—		8,500,158		1,000,000		289,639		39,342		10,816,639
		2021		950,000		—		6,825,124		2,500,000		144,932		29,177		10,449,233
Jason J. Tyler Chief Financial Officer		2023		600,000		—		2,520,087		990,000		155,469		18,383		4,283,939
		2022		587,500		—		2,520,081		1,080,000		141,988		18,539		4,348,108
		2021		537,500		—		1,750,089		1,080,000		79,182		16,392		3,463,163
Peter B. Cherecwich President—Asset Servicing		2023		675,000		—		3,080,055		1,147,500		174,409		24,038		5,101,002
		2022		662,500		—		3,360,107		1,320,000		188,623		23,480		5,554,710
		2021		625,000		—		2,450,145		1,440,000		106,833		29,773		4,651,751
Steven L. Fradkin President—Wealth Management		2023		675,000		—		3,080,055		1,147,500		645,057		25,575		5,573,187
		2022		662,500		—		3,360,107		1,320,000		—		26,230		5,368,837
		2021		625,000		—		2,600,135		1,440,000		—		25,991		4,691,126
Daniel E. Gamba President—Asset Management		2023		478,125		—		4,800,038		1,147,500		20,986		45,393		6,492,042
		—		—		—		—		—		—		—		—
		—		—		—		—		—		—		—		—


Name	Contributions to TIP and Supplemental TIP ($)(a)		Perquisites and Other Personal Benefits ($)(b)		Tax Reimbursements and Other ($)(c)		Total ($)
Mr. O’Grady	$	30,000	$	4,983	$	908	$	35,891
Mr. Tyler		18,000		351		32		18,383
Mr. Cherecwich		20,250		3,271		517		24,038
Mr. Fradkin		20,250		4,940		385		25,575
Mr. Gamba		—		26,093		19,300		45,393


			Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)					Estimated Future Payouts Under Equity Incentive Plan Awards (2)						All Other Stock Awards: Number of Shares of Stock or Units (#)(3)		Grant Date Fair Value of Stock and Option Awards ($)(4)
Name	Grant Date		Thres- hold ($)	Target ($)		Maximum ($)		Thres- hold (#)		Target (#)		Maximum (#)
Mr. O’Grady		—		$	1,000,000	$	6,643,800
		2/22/2023													31,660	$	2,975,090
		2/22/2023							14,699		58,796		88,194				5,525,060
Mr. Tyler		—			1,080,000		3,321,900
		2/22/2023													9,386		882,002
		2/22/2023							4,358		17,432		26,148				1,638,085
Mr. Cherecwich		—			1,320,000		3,321,900
		2/22/2023													11,472		1,078,024
		2/22/2023							5,327		21,305		31,958				2,002,031
Mr. Fradkin		—			1,320,000		3,321,900
		2/23/2023													11,472		1,078,024
		2/23/2023							5,327		21,305		31,958				2,002,031
Mr. Gamba		—			—		3,321,900
Mr. Gamba		4/3/2023													54,720		4,800,038



	Option Awards							Stock Awards

Name	Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)	Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)(1)		Market Value of Shares or Units of Stock That Have Not Vested ($)(2)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4)
Mr. O’Grady		24,651	—	$	60.85		2/10/2024		66,659	$	5,624,686		152,934	$	12,904,571
		23,739	—		70.21		2/17/2025
		34,489	—		58.25		2/16/2026
		40,649	—		88.06		2/21/2027
Mr. Tyler		2,466	—		60.85		2/10/2024		18,869		1,592,166		43,518		3,672,049
		2,968	—		70.21		2/17/2025
		4,599	—		58.25		2/16/2026
		3,873	—		88.06		2/21/2027
Mr. Cherecwich		26,132	—		88.06		2/21/2027		24,715		2,085,452		56,865		4,798,269
Mr. Fradkin		34,489	—		58.25		2/16/2026		25,089		2,117,010		57,865		4,882,649
Mr. Fradkin		27,874	—		88.06		2/21/2027
Mr. Gamba		—	—		—		—		54,720		4,617,274		—		—


Name	3/1/2024		4/3/2024		3/1/2025		4/3/2025		3/1/2026		4/3/2026		3/1/2027		4/3/2027
Mr. O’Grady		25,437		—		19,754		—		13,874		—		7,594		—
Mr. Tyler		6,379		—		5,858		—		4,286		—		2,346		—
Mr. Cherecwich		9,385		—		7,344		—		5,235		—		2,751		—
Mr. Fradkin		9,629		—		7,474		—		5,235		—		2,751		—
Mr. Gamba		—		13,680		—		13,680		—		13,680		—		13,680


	Performance Stock Unit Awards Granted In
Name	2021		2022		2023
Mr. O’Grady		45,519		48,619		58,796
Mr. Tyler		11,672		14,414		17,432
Mr. Cherecwich		16,341		19,219		21,305
Mr. Fradkin		17,341		19,219		21,305
Mr. Gamba		—		—		—