Citizens Financial Group, the 14th-largest bank in the U.S. with $222 billion in total assets, recently implemented significant retention bonuses for two of its top executives: Brendan Coughlin, head of consumer banking, and John Woods, chief financial officer. These retention bonuses are part of a strategic move to secure leadership stability and ensure continuity in potential CEO succession.
Both executives are considered key candidates to succeed the current CEO and Chairman, Bruce Van Saun, who has not yet announced his retirement. To retain these executives until at least 2027, the Citizens board has awarded Coughlin a $12 million package and Woods a $7 million package, consisting of a mix of time-based restricted stock units, performance share awards, and cash.
The retention awards come with strict conditions:
- Vesting Period: The performance share units and restricted stock units will not vest for another three years.
- Clawback Clause: If Coughlin or Woods resigns or is terminated within the next three years, they must repay their respective cash bonuses of $2 million and $1 million.
The Citizens board emphasized the importance of these awards, citing the high market value of their executives due to the strength of the leadership team and the bank’s successful transformation efforts. The goal is to maintain leadership stability and ensure that potential CEO successors remain with the bank.
The disparity in the bonus amounts was intentional to equalize the level of equity ownership between Coughlin, who joined Citizens in 2020, and Woods, who has been with the bank since 2017 and has accumulated more equity.
In addition to these new awards, the company disclosed that in 2023, Coughlin received $3.9 million and Woods $4.3 million in compensation.
Bruce Van Saun, 66, has been at the helm of Citizens Financial Group since 2013, and under his leadership, the bank has navigated significant growth and transformation.