Andrew Cecere
US BANCORP \DE\About Andrew Cecere
Andrew Cecere, 64, is U.S. Bancorp’s Chairman and Chief Executive Officer and will transition to Executive Chairman following the April 15, 2025 annual meeting; he has nearly 40 years at the company and previously served as CFO, COO, President, and CEO since 2017 . Under his leadership, USB rebuilt capital after the MUFG Union Bank acquisition, managed expenses flat over five quarters, returned to positive operating leverage in 2H24, and advanced digital/technology initiatives positioning the bank for 2025 growth . 2024 pay-versus-performance shows cumulative TSR at $100 vs. peer KBW Bank Index $106 (base $100 in 2019), with Adjusted ROE at 12.47% (2022: 15.9%, 2023: 14.95%) and net income of $6,299 million; equity-heavy pay aligns with these measures . U.S. Bancorp’s 2024 revenue was $27,335 million per peer-table reference .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| U.S. Bancorp | Chairman & CEO | May 2024–present | Continued board leadership; oversaw capital rebuild and efficiency programs post MUFG Union Bank acquisition . |
| U.S. Bancorp | Chairman, President & CEO | Apr 2018–May 2024 | Led diversification, digital capabilities, and scale partnerships; positioned for 2025 growth . |
| U.S. Bancorp | President & CEO | Apr 2017–Apr 2018 | CEO transition and early execution on strategic priorities . |
| U.S. Bancorp | President & COO | Jan 2016–Apr 2017 | Operational leadership, risk and financial discipline . |
| U.S. Bancorp | Vice Chairman & COO | Jan 2015–Jan 2016 | Enterprise operations and risk management . |
| U.S. Bancorp | Vice Chairman & CFO | Feb 2007–Jan 2015 | Deep finance and reporting expertise; capital planning . |
| U.S. Bancorp (pre-Firstar merger) | CFO | 2000–2001 | Finance leadership pre-merger integration . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Donaldson Company, Inc. | Director | 2013–2021 | Served on public company board, including audit experience . |
Fixed Compensation
| Year | Base Salary ($) | Stock Awards ($) | Actual Bonus Paid ($) | Change in Pension Value ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 1,400,000 | 11,000,024 | 4,929,400 | 1,926,261 | 83,642 | 19,339,327 |
| 2023 | 1,350,000 | 10,500,000 | 3,794,175 | 7,210,212 | 62,570 | 22,916,957 |
| 2022 | 1,300,000 | 10,000,000 | 4,785,300 | — | 72,214 | 16,157,514 |
- CEO target annual cash incentive percentage: 350% of base salary in 2023 and 2024 .
Performance Compensation
Annual Cash Incentive Mechanics and 2024 Outcomes
| Component | Weighting | Target | Actual | Result |
|---|---|---|---|---|
| Corporate EPS (adjusted) | 50% | $3.88 | $3.83 (after +$0.19 notable items and −$0.15 CECL reserve variation) | Corporate Result: 97.2% |
| Business Line Pretax Income (weighted across lines) | 50% | Annual plan targets | Weighted average 104% (CB/Consumer 105.3%; Payment Services 99.9%; WCCIB 107.9%) | Business Line Result: 104% |
| Final Payout | — | $4,900,000 target | $4,929,400 paid (no qualitative or risk scorecard adjustments) | ~100% of target based on formula |
- Qualitative adjustments allowed ±25% but none applied for executives in 2024 .
PRSU Earnout – 2022–2024 Performance Period (granted 2022)
| Metric | 2022 | 2023 | 2024 | Final Earnout |
|---|---|---|---|---|
| Adjusted ROE (%) | 15.9% | 14.95% | 12.47% | — |
| Peer Group Ranking | ≥75th percentile | ≥75th percentile | ≥75th percentile | — |
| Earn-out % | 137.0% | 128.7% | 114.1% | 126.6% |
- 2023/2024 PRSUs use ROE matrix; 2025 PRSUs switch to absolute/relative ROTCE with a ±15% TSR modifier; ROTCE target 17.5%, max ≥19.5%, minimum 11.5% (peer median anchors relative scale) .
Long-Term Incentive Structure
- 2024 equity mix: 60% PRSUs (3-year cliff vest), 40% RSUs (ratable over 3 years); dividends on PRSUs accrue and pay only on earned shares at vest .
- 2024 CEO equity grant value: $11,000,000; granted Feb 29, 2024 (counts detailed in Grants table) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Feb 3, 2025) | 1,055,380 common shares; options exercisable within 60 days: 344,740; RSUs: 223,581; total beneficial 1,623,701; less than 1% of outstanding shares . |
| Options outstanding | 102,044 @ $44.32 exp. 2/19/2025; 140,445 @ $39.49 exp. 2/18/2026; 102,251 @ $55.01 exp. 2/16/2027 . |
| RSUs/PRSUs unvested snapshot (12/31/24) | RSUs: 104,862 (2024 grants vest through 2027), 60,765 (2023 grants vest through 2026), 24,152 (2022 grants vest through 2025); PRSUs: 235,939 max (2024–2026), 204,060 max (2023–2025), 134,896 earned (2022–2024) . |
| Stock Ownership Guidelines | CEO must hold 6x base salary; retain 75% of net shares until minimum, then 50% until retirement; all NEOs in compliance as of 12/31/24 . |
| Hedging/Pledging | Prohibited for executives and directors; no pledging of company securities . |
| Deferred Compensation (2024) | No deferrals disclosed for CEO in 2024 . |
Note: Market value references use $47.83 closing price on 12/31/24, per Outstanding Equity Table methodology .
Employment Terms
| Program/Provision | Terms (CEO) |
|---|---|
| Employment/Change-in-Control Agreements | None; no single-trigger cash; equity acceleration only on qualifying termination within 12 months after a change-in-control (RSUs full vest; PRSUs vest at target if before performance end, actual if after) . |
| Severance (Broad-Based Program) | If terminated on 12/31/2024: cash severance would be $6,300,000 (subject to program caps and release/post-termination restrictions) . |
| Disability Benefits | Under Non-Qualified Plan, annual disability benefit equals 60% of current annual cash compensation (subject to restrictive covenants) . |
| Equity on Qualifying Severance/Retirement | For retirement-eligible execs (CEO meets retirement eligibility), unvested PRSUs/RSUs continue per schedule; awards remain subject to clawback/cancellation provisions . |
| Clawback/Forfeiture | Robust clawback for incorrectly reported earnings; cancellation of unvested equity for misconduct or risk-insensitive behavior; mandatory SEC/NYSE recovery policy adopted . |
| Hedging/Pledging Policy | Prohibits hedging and pledging of company stock . |
| Pension/SERP | Present value of accumulated benefits: $34,444,460; supplemental benefit equals 55% of final three-year average cash compensation at age 65 (reduced by Social Security), lump-sum election; eligible for accelerated service credit upon age 60 (≈$1.3 million incremental service credit currently) . |
Board Governance
- Board Service: Director since Jan 2017; committees: Chair, Executive; member, Risk Management; member, Cybersecurity & Technology . Independence: not independent (executive officer) .
- Dual-role implications: CEO+Chairman model maintained through April 15, 2025; thereafter Executive Chairman/CEO split creates bridge; robust Lead Independent Director (Roland Hernandez) authority mitigates independence concerns with agenda approval, executive sessions, and stakeholder engagement .
- Committee independence: Audit, Compensation & Human Resources, Governance, Public Responsibility are 100% independent .
- Meetings/Attendance: Board held 12 meetings in 2024; average attendance 99%; all directors ≥75% attendance; regular executive sessions without management .
- No hedging/pledging for directors; director stock ownership guideline is 5x cash retainer .
SAY-ON-PAY & Shareholder Feedback
- Say-on-Pay approval: 93.5% in 2024; over 92% each of the last seven years; 2024 Stock Incentive Plan approved at 95.3% .
- Engagement: Fall 2024 outreach to top 50 investors (~56% of shares); feedback influenced shift of PRSU metrics in 2025 to ROTCE with TSR modifier .
Compensation Peer Group
- Peer group used for market assessments includes large U.S. banks (e.g., JPMorgan, Bank of America, Citigroup, Wells Fargo, PNC, Truist, Capital One, Fifth Third, Citizens) plus U.S. Bancorp; positioning targeted within a reasonable range of median amounts relative to scope/complexity .
Risk Indicators & Red Flags
- No employment/CoC agreements; no single-trigger acceleration; no tax gross-ups (except relocation); robust clawback; prohibition of hedging/pledging – favorable governance features .
- Related-party transactions overseen; director independence framework applied; example Microsoft relationship deemed immaterial and independent .
- Incentive risk controls include risk scorecards, caps (200% AEIP; 150% PRSUs), sliding scale matrices, and cancellation provisions .
Performance & Track Record
- Strategic achievements: capital rebuild post MUFG Union Bank acquisition, expense discipline (flat over five quarters), positive operating leverage in 2H24, digital and technology modernization, partnerships (Edward Jones, Elan) .
- Pay versus performance: cumulative TSR recovered to $100 vs peer $106; Adjusted ROE strong and top-quartile relative to peers driving PRSU earn-outs above target (126.6% for 2022–2024) .
Equity Vesting Schedules and Insider Selling Pressure
- RSUs vest ratably over three years (approx. 33%/33%/34%); PRSUs cliff vest at three years based on multi-year performance; CEO realized $9,424,964 from stock vesting in 2024 and exercised options on 93,366 shares (value realized $96,354), indicating regular scheduled equity deliveries that may create periodic selling pressure (subject to ownership retention requirements) .
Compensation Structure Analysis
- Mix emphasizes at-risk equity (64% of CEO target total compensation in 2024) and performance linkage to EPS, pretax income, ROE/ROTCE; capped awards and clawbacks mitigate risk .
- Shift from ROE to ROTCE with TSR modifier in 2025 increases alignment to tangible profitability and shareholder outcomes .
- CEO target cash incentive remained at 350% of salary; 2024 payout ~target (Corporate 97.2%; Business Line 104%; no qualitative/risk adjustments) .
Equity Ownership & Alignment (Detailed Snapshot)
| Category | Quantity | Notes |
|---|---|---|
| Common shares (CEO) | 1,055,380 | Includes 14,502 in 401(k); plus 341 held by spouse (no voting/investment power) . |
| Options exercisable (≤60 days) | 344,740 | Legacy grants; expirations 2025–2027; exercise prices $39.49, $44.32, $55.01 . |
| RSUs currently counted | 223,581 | Vested or vesting within 60 days of 2/3/2025 . |
| Ownership % | <1% | Table reports less than 1% . |
| Policy alignment | Compliant with CEO 6x salary guideline; no pledging/hedging; retention requirements in effect . |
Investment Implications
- Alignment: High proportion of performance-based equity (PRSUs) and ROTCE/TSR linkage support pay-for-performance and long-term alignment; strong ownership/retention requirements and anti-hedging/pledging reinforce alignment .
- Selling pressure: Significant scheduled RSU/PRSU vesting and occasional option exercises can create periodic supply; retention requirements (hold-until-retirement) temper immediate sales but monitor Form 4 activity around vest dates for trading signals .
- Retention/transition: CEO’s substantial pension/SERP value and retirement eligibility could suggest lower financial retention risk; 2025 transition to Executive Chairman with a strong Lead Independent Director and incoming CEO mitigates execution risk during succession .
- Downside protection to shareholders: No employment/CoC cash agreements or single-trigger acceleration; robust clawback and capped incentives reduce adverse risk-taking and golden parachute concerns .
- Performance outlook: PRSU earn-outs above target (126.6% for 2022–2024) reflect historically strong Adjusted ROE versus peers; 2025 metric change to ROTCE/TSR suggests continued focus on tangible returns and market-relative performance .