Christopher Gorman

About Christopher Gorman

Christopher M. Gorman, age 64, has served as Chairman, Chief Executive Officer, and President of KeyCorp since May 1, 2020, and has been a director since 2019 . Under his leadership in 2024, Key secured a $2.8B strategic minority investment from Scotiabank and improved capital and liquidity, including CET1 rising 190 bps to 11.9% and a 14% YoY improvement in 4Q24 net interest income exit rate, while investment banking fees grew 25% YoY and AUM exceeded $61B . Compensation outcomes reflect pay-for-performance: 2024 annual incentive funded at ~101% on metrics including Adjusted EPS, ROTCE, CET1, relative performance, and operational excellence; 2022 performance awards vested at 0% on below-threshold cumulative EPS and bottom-quartile ROTCE versus peers, underscoring alignment to results . Key’s long-term incentives emphasize performance with ROTCE vs peers, cumulative EPS, and a TSR modifier, and 2024 added a two-year Capital & Earnings Improvement Award tied to marked CET1 and cumulative EPS with strict caps and a post-vesting holding period .

Past Roles

External Roles

Fixed Compensation

Note: 2024 “Total” includes $7.57M Capital & Earnings Improvement Award within stock awards; excluding that, total would be ~$11.07M .

Performance Compensation

• Annual Incentive (2024): Committee-approved funding 100.6% based on financial and strategic scorecard .

• Long-Term Incentives (Core Program):

  • 2025 LTI mix: 60% Performance Awards (3-year cliff; metrics: Adjusted ROTCE vs peers, Cumulative Adjusted EPS; +/-15% TSR modifier; capital requirement vesting hurdle), 30% RSUs (4-year ratable), 10% premium-priced options (110% of grant-date price; 4-year ratable) .
  • 2022 Performance Awards (2012-2024 cycle) paid 0% (18th percentile ROTCE vs peer goal, cumulative EPS $4.63 vs $5.49 threshold), indicating downside realization when targets are missed .

• Capital & Earnings Improvement Award (granted 12/30/2024):

  • Two-year performance period (2025–2026); performance conditions: marked CET1 and cumulative EPS aligned with Scotiabank investment goals; vest in Jan 2027 subject to certification, with an additional 1-year holding period to Jan 2028; max 150% of target shares; vesting-date value capped at 2.5x grant-date value; forfeiture on voluntary/involuntary non-CoC termination; double-trigger on CoC . CEO target grant: $7,570,295 (490,940 shares at target) .

• Actual Incentives: CEO’s 2024 actual annual incentive $2.7M; 2025 target LTI tied to 2024 performance $6.9M; total pay decision $10.8M (100% of target) .

Equity Ownership & Alignment

• Ownership guidelines: CEO must hold shares equal to 6x base salary; executives subject to post-vesting holding until guidelines met; hedging and pledging KeyCorp securities are prohibited .
• Outstanding Awards and Vesting Cadence:
  • RSUs outstanding: 157,407 (grant 2/16/2024; vest 2025–2028), 92,933 (2/17/2023; vest 2025–2027), 49,116 (2/14/2022; vest 2025–2026), 20,626 (2/15/2021; vest 2025) .
  • Performance awards outstanding (target basis): 314,814 (2024 grant; vests 2027), 123,911 (2023 grant; vests 2026), plus 490,940 Capital & Earnings Improvement Award (vests/certifies Jan 2027; settles Jan 2028) .
  • Options outstanding include 204,081 at $15.48 (granted 2/16/2024), plus multiple prior-year tranches; 2024 options priced at 110% of grant-date close .

Implication for potential selling pressure: Concentrated vest/settlement windows in Feb 2025–2028 (annual), and Jan 2027/Jan 2028 for special awards; combined with insider policy pre-clearance and holding requirements, these dates are relevant for liquidity events rather than discretionary selling .

Employment Terms

• No individual executive employment agreements; no tax gross-ups; no single-trigger CoC benefits .
• Clawbacks: KeyCorp Compensation Recovery Policy applies to restatements and robust risk-based clawback/forfeiture features across plans .
• Perquisites (CEO): Limited program; personal aircraft use authorized with $125,000 annual cap; 2024 “Transportation” perq reported at $98,231; executive security and physical also provided; 401(k) matching .

Board Governance

• Board service: Director since 2019; not independent (management director) .
• Roles: Chairman and CEO; chairs the Executive Committee; board maintains independent Lead Director with robust oversight duties (agenda approval, shareholder engagement, CEO evaluation co-lead) and independent committee chairs (Audit, Risk, Compensation, NCGC, Technology) .
• Board/committee cadence and attendance: 7 board meetings in 2024; ~98% average attendance; independent director executive sessions at every regular meeting .

Director Compensation (as CEO/Director)

• As an employee director, Gorman receives no additional pay for board service (non-employee director schedule shown for others; 2024 cash retainer $100k and deferred shares $140k; rising to $105k/$145k in 2025) .

Say-on-Pay & Shareholder Feedback

• Say-on-pay approval: ~93% at 2023 annual meeting; ~89% at 2024 annual meeting, indicating broad but moderating support .
• Active shareholder engagement program; feedback integrated into compensation design and disclosures .

Compensation Structure Analysis

• Strong pay at risk: 86% of average NEO target pay variable; majority long-term .
• Metric rigor and outcomes: Annual plan balanced across profitability (EPS, ROTCE), capital (CET1), relative metrics, and operational excellence; 2022 LTI paid 0% on underperformance, demonstrating negative leverage to missed goals .
• 2024 supplemental awards: Capital & Earnings Improvement Awards align directly to Scotiabank investment outcomes with value caps, forfeiture on non-CoC exits, and additional 1-year holding—supporting retention and alignment but a potential scrutiny point given their one-time nature .

Performance & Track Record

• 2024 highlights under Gorman: +190 bps CET1 to 11.9%; 4Q NII exit +14% YoY; investment banking fees +25% YoY; AUM >$61B; improved criticized loans and low net charge-offs (41 bps) .
• LTI results: 2022 awards vested at 0% (cumulative EPS $4.63 vs $5.49 threshold; 18th percentile ROTCE), reflecting economic headwinds and balance sheet repositioning; 2023 awards expected to pay well below target per CD&A narrative (final certification pending) .

Risk Indicators & Red Flags

• Combined CEO/Chairman role balanced by a strong independent Lead Director and fully independent standing committees .
• No hedging/pledging permitted; robust clawback framework; no single-trigger CoC; no SERP accruals since 2009 .
• One-time supplemental performance awards (2024) could face investor scrutiny despite rigorous design and caps .
• Aircraft perquisite exists but capped and disclosed with actual 2024 use value .

Equity Vesting Schedule Snapshot (CEO)

Board Service, Committees, and Independence Considerations

• Director since 2019; Chair/CEO since 2020; not independent; executive committee chair .
• Lead Independent Director (Cutler) empowered to set agendas, call meetings, liaise with shareholders, and co-lead CEO evaluation—mitigating combined role risks .
• 2024 committee meetings: Audit (14), Risk (13), Compensation (8), NCGC (6), Technology (5); all committees fully independent; ~98% attendance –.

Investment Implications

• Alignment and incentives: High proportion of at-risk and performance-vested equity, with demonstrated zero payouts when objectives are missed (2022 LTI), supports tight pay-performance linkage; 2024 annual bonus near target mirrors improved capital metrics and relative performance stabilization .
• Retention and potential supply: Significant RSU/performance award vesting in Feb 2025–2028 and special award settlement in 2027/2028 suggest identifiable windows for potential insider sales, though pre-clearance and holding requirements reduce discretionary timing risks .
• Governance balance: While CEO also serves as Chair, an empowered Lead Independent Director and independent committees, plus strong attendance and executive sessions, mitigate independence concerns; say-on-pay support remains high (89–93%) .
• One-time awards: The Capital & Earnings Improvement Award is performance-capped and tied to Scotiabank investment outcomes; monitor progress on marked CET1 and cumulative EPS to assess realizability and any future adjustments or precedent risk .