Peter Cherecwich
NORTHERN TRUSTAbout Peter Cherecwich
Peter B. Cherecwich is Chief Operating Officer of Northern Trust Corporation, appointed effective October 1, 2024, after serving as President, Asset Servicing since 2017; he previously led Global Fund Services (2010–2017), was COO of Asset Servicing (2008–2014), and Head of Institutional Strategy & Product Development (2007–2008), and earlier held executive and operational roles at State Street Corporation . He is 59 years old . Under his purview, Asset Servicing delivered 2024 revenue of $4.37B (FTE), trust/investment/servicing fees of $2.63B, AUC/A of $15.6T, and a 20.2% pre-tax margin, while Northern Trust overall reported record consolidated revenue of $8.3B, ROE of 17.4%, and diluted EPS of $9.77 for 2024 . Northern Trust’s pay-versus-performance disclosure shows 2024 Compensation Actually Paid alongside TSR and Adjusted ROE, with Adjusted ROE of 13.7% and Corporation TSR value of $113.12 on a fixed $100 basis since 2019 year-end .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Northern Trust Corporation | Chief Operating Officer | 2024–present | Focused on operational excellence, resiliency, effective risk management/controls, and scalable growth as part of “One Northern Trust” . |
| Northern Trust Corporation | President, Asset Servicing | 2017–2024 | Strengthened market position; 2024 Asset Servicing revenue $4.37B (FTE), AUC/A $15.6T; recognized with “Best Global Custodian for Asset Owners” and “Custody Deal of the Year” awards . |
| Northern Trust Corporation | President, Global Fund Services | 2010–2017 | Led fund services globally, supporting Asset Servicing growth trajectory . |
| Northern Trust Corporation | COO, Asset Servicing | 2008–2014 | Built operational infrastructure and control framework in Asset Servicing . |
| Northern Trust Corporation | Head, Institutional Strategy & Product Development | 2007–2008 | Drove strategy and product development for institutional clients . |
| State Street Corporation | Executive/Operational Roles | Pre-2007 | Senior roles in global operations and client management prior to joining Northern Trust . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| State Street Corporation | Executive/Operational roles | Pre-2007 | Prior leadership experience before joining Northern Trust . |
Fixed Compensation
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | 662,500 | 675,000 | 675,000 |
| Base Salary Changes (2024) | — | — | No base salary increases in 2024 |
Performance Compensation
- Program structure: Incentives are predominantly equity (≥70% for NEOs), split 65% PSUs and 35% RSUs; PSUs are earned on 3-year average ROE (50% absolute vs target, 50% relative vs peer group) and RSUs vest ratably over 4 years .
- 2024 annual cash incentive (NPIP): $1,072,500; 2023: $1,147,500; 2022: $1,320,000 .
- 2024 incentive equity awarded in Feb 2025: PSUs $1,626,625; RSUs $875,875 .
- 2023 incentive equity awarded in Feb 2024: PSUs $1,740,375; RSUs $937,125 .
- PSU payout precedent: 2022-granted PSUs paid out at 129.8% of target based on 3-year Adjusted ROE (13.6%) and relative ROE at 83.7th percentile; Cherecwich received 24,946 shares on Feb 18, 2025 .
Incentive Mix and Mechanics
| Component | Design | Weighting | Targets / Scale | Vesting |
|---|---|---|---|---|
| Annual Cash (NPIP) | Prior-year performance cash award | ≤30% of total incentive for NEOs | Determined by corporate and individual performance | Paid in cash following year . |
| PSUs | 3-year performance on ROE | 65% of LTI | Absolute ROE: 11–12% target; Relative ROE vs peer median; scale 0–150% | 3-year cliff after performance period . |
| RSUs | Time-based equity | 35% of LTI | N/A | 25% per year over 4 years . |
2024 Individual Performance Considerations (role transition Oct 1, 2024)
| Area | Highlights |
|---|---|
| Financial metrics | Asset Servicing: revenue $4.37B (FTE), fees $2.63B, AUC/A $15.6T, margin 20.2% . |
| Strategic execution | Strengthened competitive position; advanced A‑Suite “Friends & Family Network” (>4,000 members); data science initiatives (IDS/EDS) recognized with industry awards . |
| Talent & culture | Established COO operating model; made key hires to support resiliency and operational excellence . |
Equity Ownership & Alignment
| Ownership Detail | Amount / Policy |
|---|---|
| Beneficial ownership (12/31/2024) | 46,032 shares; plus 26,132 options (exercisable) = total beneficial 72,164 . |
| Outstanding/unvested RSUs | 26,586 units (market value $2,725,065 at $102.50/share) . |
| Outstanding PSUs (max at 150%) | 2022: 28,829; 2023: 31,957; 2024: 32,678 (actual payout contingent on performance) . |
| RSU vesting schedule | 3/1/2025: 10,158; 3/1/2026: 8,049; 3/1/2027: 5,565; 3/1/2028: 2,814 . |
| 2024 stock vested | 31,430 shares vested; value realized $2,536,059; no option exercises in 2024 . |
| Ownership guidelines | COO guideline is 4x base salary; all NEOs met/exceeded guidelines as of 12/31/2024 . |
| Hedging/pledging | Prohibited: short selling, margining, pledging, hedging derivatives on NTRS securities . |
| Clawback | Rule 10D‑1 recoupment policy for erroneously awarded incentive-based compensation following restatement . |
Employment Terms
- Severance plan (U.S.): Lump sum severance based on service (two weeks per year up to <25 years or 52 weeks for ≥25 years), COBRA subsidy, vesting in retirement plans, and potential NPIP special payment; subject to release and 409A limits .
- Change-in-control plan (double trigger): For NEOs, 2x salary plus average cash incentive (3-year), pro-rata incentive, and 24 months of welfare benefits; CEO at 3x; excise tax cutback if applicable (no gross-ups) .
Potential Payments (Assumed event on 12/31/2024; $102.50/share assumption for equity)
| Scenario | RSUs ($) | PSUs ($) | Cash Severance ($) | Pro‑Rata Bonus ($) | Welfare ($) | Total ($) |
|---|---|---|---|---|---|---|
| Retirement | 2,948,396 | 6,750,907 | — | — | — | 9,699,302 |
| Death | 2,948,396 | 6,750,907 | — | — | — | 9,699,302 |
| Disability | 2,948,396 | 6,750,907 | — | — | — | 9,699,302 |
| Severance (non‑CIC) | 2,948,396 | 6,750,907 | — | — | — | 9,699,302 |
| Termination in connection with CIC | 2,948,396 | 6,750,907 | 3,955,000 | 1,302,500 | 36,720 | 14,993,523 |
Compensation & Incentives (Multi‑Year)
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 662,500 | 675,000 | 675,000 |
| Stock Awards (Grant‑date fair value) | 3,360,107 | 3,080,055 | 2,677,594 |
| Annual Cash Incentive (NPIP) | 1,320,000 | 1,147,500 | 1,072,500 |
| Change in Pension Value | 188,623 | 174,409 | 120,460 |
| All Other Compensation | 23,480 | 24,038 | 26,937 |
| Total | 5,554,710 | 5,101,002 | 4,572,491 |
LTI Grants Detail (Awarded for prior-year performance)
| Metric ($) | 2023 Perf. Year (Granted Feb 2024) | 2024 Perf. Year (Granted Feb 2025) |
|---|---|---|
| PSUs | 1,740,375 | 1,626,625 |
| RSUs | 937,125 | 875,875 |
Performance & Track Record
- Asset Servicing KPIs under Cherecwich (2024): Revenue $4.37B (FTE), fees $2.63B, AUC/A $15.6T; margin 20.2%; competitive wins and product/data platform advancements (A‑Suite, IDS/EDS) .
- Corporation results (2024): Record consolidated revenue $8.3B; pre‑tax margin 32.1%; ROE 17.4%; diluted EPS $9.77; trust/investment/servicing fees $4.73B .
- PSU payout history: 2022 grant paid at 129.8% on 3‑year Adjusted ROE 13.6% and relative ROE at 83.7th percentile .
Governance & Pay Practices
- Committee oversight: Human Capital and Compensation Committee (independent), overlapping membership with Audit and Business Risk; uses Meridian Compensation Partners as independent consultant; peer groups include BNY Mellon, State Street, Schwab, PNC, U.S. Bancorp, etc. .
- Policies: No excise tax gross‑ups; no single‑trigger CIC; clawbacks; prohibition on hedging/margining/pledging; no underwater option repricing .
- Say‑on‑Pay: 2024 vote on 2023 NEO compensation received ~95% support; ongoing shareholder engagement (~50% of shares engaged in 2024) .
Equity Ownership & Alignment Signals
| Indicator | Assessment |
|---|---|
| Ownership scale | Material vested and unvested equity plus exercisable options (beneficial ownership 72,164 including options) supports alignment . |
| Guideline compliance | Meets/exceeds 4x salary guideline for COO; holding requirement if below guidelines . |
| Selling pressure | 2024 equity vested of 31,430 shares indicates scheduled supply; no 2024 option exercises reported . |
| Risk mitigants | Clawbacks and anti-hedging/pledging reduce misalignment risks . |
Employment Terms (Additional)
- Severance mechanics, COBRA subsidy changes, and NPIP proration windows disclosed; severance capped under 409A limits and offset against other severance sources .
- Equity treatment on termination: Death/disability → full vesting; severance/retirement → continued vesting; CIC conversion to acquirer units with continued service vesting and acceleration upon qualifying termination .
Investment Implications
- High at-risk, equity-heavy pay with PSUs tied to ROE (absolute and peer-relative) aligns incentives to capital returns; 2022 PSU payout of 129.8% evidences strong recent multi-year performance capture .
- Scheduled RSU vesting (e.g., 10,158 on 3/1/2025; 8,049 on 3/1/2026) and unearned PSU overhang create predictable supply but are mitigated by ownership guidelines and anti-hedging/pledging policies .
- Double-trigger CIC protection (2x salary + average bonus, pro-rata bonus, benefits) reduces retention risk during strategic change without gross-ups, while clawbacks and committee oversight constrain risk-taking .
- Operational track record in Asset Servicing (AUC/A growth, data/analytics platforms, awards) and transition to enterprise COO role under “One Northern Trust” should continue to emphasize resiliency, productivity, and scalable growth; corporate 2024 ROE (17.4%) and margin improvements support confidence .