Steven Fradkin - Vice Chairman | NORTHERN TRUST (NTRS) Executive Profile & Compensation

About Steven Fradkin

Steven L. Fradkin is Vice Chairman of Northern Trust Corporation (effective October 1, 2024), after serving in senior roles including President of Wealth Management, President of Asset Servicing, and Chief Financial Officer . He has 35.0 years of credited service under Northern Trust’s pension plans, reflecting long-tenured experience within the firm’s businesses . In 2024, Northern Trust delivered ROE of 17.4% (adjusted ROE 13.7%), diluted EPS of $9.77, and record total revenue of $8.3B, with trust, investment and other servicing fees up 8% year over year . Performance stock units granted in 2022 paid out at 129.8% of target based on three-year ROE outcomes to 2024; Mr. Fradkin received 24,946 shares upon PSU distribution on February 18, 2025 .

Past Roles

Organization	Role	Years	Strategic Impact
Northern Trust Corporation	Vice Chairman	Since Oct 1, 2024	Enhance growth initiatives and foster deeper client franchise connections .
Northern Trust Corporation	President, Wealth Management	Through Q3 2024	Wealth Management revenue +11% YoY; trust/investment/servicing fees +10% YoY; pre-tax margin 37.8%; AUM +12% .
Northern Trust Corporation	President, Asset Servicing	Not disclosed	Led Asset Servicing historically; role cited among prior leadership positions .
Northern Trust Corporation	Chief Financial Officer	Not disclosed	CFO role cited among prior leadership positions .

External Roles

Not disclosed in the 2025 Proxy Statement; skip.

Fixed Compensation

Metric	2022	2023	2024
Base Salary ($)	$662,500	$675,000	$675,000
Short-Term Annual Cash Incentive ($)	$1,320,000	$1,147,500	$1,147,500
All Other Compensation ($)	$26,230	$25,575	$25,117
Change in Pension Value ($)	— (not reported due to rate-driven decrease)	$645,057	— (rate-driven decrease)
Total Reported Compensation ($)	$5,368,837	$5,573,187	$4,525,211

Notes:

2024 “Stock Awards” were $2,677,594 and are part of total compensation above .

Pension value changes for Mr. Fradkin are sensitive to discount rate movements under the Traditional Formula; 2024 rate increases reduced present values vs. 2023 .

Performance Compensation

Long-Term Incentives Awarded for 2024 Performance (granted Feb 2025)

Component	Value ($)	Structure
Performance Stock Units (PSUs)	$1,740,375	3-year performance; 50% absolute ROE vs target, 50% relative ROE vs peer group; payout 0–150% .
Restricted Stock Units (RSUs)	$937,125	Time-based vesting, ratable over 4 years (25% per year) .
Short-Term Annual Cash Incentive	$1,147,500	Cash award under NPIP for prior-year performance .

2024 Equity Grants (granted Feb 21, 2024 – for 2023 performance)

Type	Grant Date	Shares/Units	Fair Value ($)	Vesting	Performance Metrics
RSUs	2/21/2024	11,731	$937,190	25% annually over 4 years	N/A
PSUs – Target	2/21/2024	21,785	$1,740,404	Earn over 3 years	50% absolute ROE vs 11–12% target; 50% relative ROE vs peer group .
PSUs – Threshold/Maximum	2/21/2024	5,447 / 32,678	N/A	Earn over 3 years	Payout scale from 0% to 150% .

PSU Payout History (2022 grant, performance period 2022–2024)

Corporate PSU payout 129.8% of target; Mr. Fradkin received 24,946 shares on Feb 18, 2025 .

PSU Design for 2025 Awards (for NEOs)

Metric (50% weight each)	Target/Payout Scale
Three-Year Average Annual ROE (absolute)	11–12% → 100% vesting; ≤6% → 0%; ≥14% → 150% .
ROE vs Performance Peer Group	50th percentile → 100%; <25th → 0%; highest percentile → 150% .

Equity Ownership & Alignment

Item	Detail
Total Beneficial Ownership	246,596 shares; less than 1% of outstanding .
Unvested RSUs at FY-end	26,716 units; market value $2,738,390 (at $102.50/share) .
Unearned PSUs at FY-end	93,464 units (target basis); market value $9,580,060 (at $102.50/share) .
Options (Exercisable/Unexercisable at FY-end)	None listed outstanding as of 12/31/2024 .
2024 Option Exercises	62,363 shares; value realized $1,110,714 .
2024 Stock Vested	32,994 shares; value realized $2,660,996 .
RSU Vesting Schedule (units)	3/1/2025: 10,288; 3/1/2026: 8,049; 3/1/2027: 5,565; 3/1/2028: 2,814 .
Hedging/Pledging	Prohibited by Securities Transactions Policy (short selling, margining, pledging, hedging) .
Ownership Guidelines	CFO/COO/Business Unit Heads: 4x base salary; all NEOs met/exceeded guidelines as of 12/31/2024 .

Alignment signals:

Significant unvested RSUs and PSUs create multi-year retention and performance alignment .

Hedging/pledging prohibitions prevent misalignment risk via collateralization or downside hedges .

Employment Terms

Provision	Key Terms
Severance Plan (U.S. employees, including executives)	Lump sum based on years of service (e.g., two weeks per year up to 25 years, 52 weeks for ≥25 years), COBRA subsidy/reduced premiums, plan vesting, and outplacement; limits apply per IRC §§401(a)(17)/409A .
Change-in-Control (CiC) Plan	Double-trigger; cash severance = 2x salary + average bonus (3x for CEO), pro-rata bonus, 24 months welfare benefits (36 months for CEO); excise tax cutback (no gross-ups) .
CiC Treatment of Equity	PSUs convert pro-rata (actual) and at target; continued vesting with employment; RSUs convert and continue vest; accelerated upon qualifying termination if acquirer cannot assume awards .
Clawback/Recoupment	Rule 10D-1 policy requires recovery of erroneously awarded incentive-based comp upon accounting restatements; additional forfeiture/recoupment for misconduct and ex-post risk outcomes .

Estimated CiC Economics (as of 12/31/2024)

Component	Amount ($)
Cash Severance	$3,955,000
Pro-Rata Bonus	$1,302,500
Welfare Benefits	$42,116
RSUs (value at $102.50)	$2,965,501
PSUs (target basis, incl. dividends)	$6,750,907
Total	$15,016,024

Performance & Track Record

Area	2024 vs 2023
Wealth Management Revenue (FTE basis)	$3.21B vs $2.88B (+11%) .
Wealth Mgmt Trust/Investment/Servicing Fees	$2.10B vs $1.90B (+10%) .
Wealth Management Pre-Tax Margin	37.8% vs 33.9% .
Wealth Management AUM	$450.7B vs $402.5B (+12%) .

Corporate context (for executive compensation alignment):

ROE 17.4%; pre-tax margin 32.1%; EPS $9.77; trust/investment/servicing fees $4.73B (+8%); record total revenue $8.3B (includes Visa exchange gain) .

Compensation Structure Analysis

Long-term incentives are 70% of NEO incentive pay; PSUs are 65% of LTI, RSUs 35%—emphasizing performance-based equity over time-based equity .
PSU metrics tightened via balanced absolute/relative ROE with a 0–150% range; 2025 design maintains 11–12% absolute ROE target and peer-relative calibration .
No excise tax gross-ups; no single-trigger benefits; no repricing of underwater options; dividend equivalents not paid on unvested awards—shareholder-friendly features .

Say-on-Pay & Shareholder Feedback

2024 vote on 2023 NEO compensation received ~95% support; Board/Committee continues engagement and validates pay-performance alignment annually .

Equity Ownership & Pledging

Strict prohibitions on hedging, margining, pledging, and derivatives on company stock under the Securities Transactions Policy .

Investment Implications

Alignment: Large unvested PSUs/RSUs, strict anti-hedging/pledging, and 4x salary ownership guidelines indicate high “skin in the game,” with PSU design tied to ROE and peer-relative performance—supporting long-term value creation .
Retention risk: Multi-year vesting (RSUs through 2028) and PSU performance periods reduce near-term departure risk; CiC plan is market-standard double-trigger, limiting windfall scenarios and preserving continuity .
Trading signals: 2024 option exercise (62,363 shares, $1.11M realized) and material stock vesting ($2.66M) highlight potential supply from executive distributions; hedging/pledging restrictions reduce forced selling pressure, but scheduled RSU vesting dates can be monitored for liquidity events .
Performance momentum: PSU payout at 129.8% for 2022–2024 and improved Wealth Management metrics under Fradkin’s leadership support execution credibility as Vice Chairman focused on growth initiatives .