DEF 14A
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
 
Filed by the
Registrant 
Filed by a Party other than the Registrant ☐
Check the appropriate box:
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(
2
))
 
Definitive Proxy Statement
 
Definitive Additional
Materials
 
Soliciting Material under §
240.14a-12
 
 
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Bread Financial Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
 
No fee required
 
Fee paid previously with preliminary materials
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11.
 
 
 
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Dear Fellow Bread

Financial Stockholders

 

 

 

I am pleased to report that Bread Financial achieved significant progress against its strategic objectives in 2023. Our talented team of executive leaders and associates navigated a challenging macroeconomic environment, generating responsible growth while significantly strengthening our capital position and enhancing financial resiliency. We continued to invest strategically in the business, advancing our technology capabilities to better serve our brand partners and cardholders.

 

On behalf of the entire Board of Directors, I would like to express my gratitude to our outstanding team of 7,000 global associates for their dedication and hard work throughout the year. I would also like to thank you, our stockholders, for your continued support and confidence. Bread Financial has achieved significant operational, financial, and strategic progress over the past several years of its transformation, and we enter 2024 well-positioned to build on this positive momentum.

Experienced Leadership

Led by President and Chief Executive Officer Ralph Andretta, Bread Financial’s executive leadership team

is distinguished by its depth of financial services sector experience and track record in navigating cyclical economic conditions and regulatory dynamics. Our executive team brings a wealth of knowledge and expertise to their roles, and I am confident in their leadership managing and adapting to varied macroeconomic and regulatory challenges and uncertainties through responsible, disciplined decision-making.

As the business prepares for the anticipated implementation of the Consumer Financial Protection Bureau’s final rule limiting the safe-harbor amount that credit card issuers are permitted to charge customers

 

 

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for late fees, our management team, again, stands ready. For more than a year since the rule was proposed, the Company has worked diligently to develop comprehensive mitigation strategies to help offset the expected financial impact on the business. In developing these mitigation plans, our leadership team has worked closely with our brand partners to ensure that Bread Financial’s value proposition remains compelling and continues to provide an exceptional experience for cardholders. We remain laser-focused on generating strong returns through prudent capital and risk management.

Board Oversight

Our Board is deeply engaged and committed to sound corporate governance through a strong and effective oversight structure that supports the Company’s mission, vision, and values, as well as overall performance. The composition of our Board reflects diversity across experience, perspectives, gender and ethnicity, which ensures we bring breadth and depth to our governance responsibilities. Each Director is committed to fostering transparency, accountability, and collaboration, enabling effective oversight of the Company’s operations, strategic direction, and risk mitigation efforts.

As part of our ongoing commitment to Board refreshment and succession planning, I am pleased to announce a new independent director nominee to this year’s slate of directors. We are excited that John Fawcett, most recently the former executive vice president and chief financial officer of CIT Group Inc., has agreed to join our Board, if elected, and in doing so would bring decades of additional executive-level banking and financial services expertise to our Board, among other skills. Together with the appointment of banking-industry veteran Joyce St. Clair to our Board in July 2023, the nomination of Mr. Fawcett reflects the continued transformation of our business into a pure-play financial services institution, focused on providing simple, personalized payment, lending and saving solutions.

Capital Allocation

We seek to build long-term stockholder value by employing a disciplined capital allocation strategy focused on profitable growth and strengthened

financial resilience. To enhance our growth, we have continued to diversify our product offering, while renewing and expanding our brand partner relationships. At the same time, we carefully manage our risk by strategically tightening credit in response to the macroeconomic headwinds and in anticipation of the aforementioned regulatory changes.

Over the past year, Bread Financial achieved considerable progress in strengthening its balance sheet. During this time frame, we increased capital and reduced our parent debt. With these important balance sheet actions, we have enhanced our financial resilience and flexibility for strategic capital allocation.

To further drive responsible, profitable growth, we continue to invest in a range of technology innovations. These investments, which include data and customer analytics, and enhanced digital capabilities, help deliver exceptional value and experiences for our brand partners and cardholders. These investments also generate operational efficiencies, enabling us to reinvest in strategic initiatives that support long-term growth and achievement of our targeted returns

Environmental, Social and Governance (ESG)

Bread Financial has long been committed to responsible business practices. The Board oversees the Company’s ESG strategy and programs, including initiatives that promote diversity, equity, inclusion, and belonging (DEIB), environmental stewardship, and stakeholder engagement. Rooted in all facets of our daily operations and long-term goals, our sustainability strategy encompasses corporate governance, customer experience, associate engagement, protecting our planet, and community investing. By acting responsibly, we build trust and credibility with our stakeholders, reduce risks, and create lasting value for our business and society.

In an evolving regulatory environment, our Board remains focused on maintaining the highest standards of corporate governance. Our Corporate Governance Guidelines provide the framework for the governance of the Company, addressing, among other things, the Board’s roles and responsibilities, director qualifications, Board leadership and Board structure and processes.

 

 

 

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           Bread Financial | 2024 Proxy Statement       

 

 


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Additionally, our eight independent director nominees, coupled with clear and distinct separation between the Board Chair and CEO positions, further ensures optimal Board composition and oversight effectiveness.

 

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Managing Our Business Responsibly

  

 

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Empowering Customers

   LOGO   Engaging Our Associates
   LOGO   Protecting Our Planet
   LOGO   Creating Possibilities for Our Communities

Conclusion

We have strengthened our financial resilience while delivering solid financial performance that has built enduring value for all stakeholders. The future of Bread Financial is bright, and the Board remains confident in our strategic direction and outlook. Bread Financial continues to execute on our long-term vision and achieving goals that ensure our success and sustainability. On behalf of the entire Board, thank you for your confidence and support.

Sincerely,

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Roger H. Ballou

Chair of the Board of Directors

 

 

 

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        Bread Financial | 2024 Proxy Statement          

 

 


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Notice of Annual

Meeting of

Stockholders

 

         
        

 

 

         

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Date & Time:

  

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Place:

  

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Record Date:

 

Tuesday, May 14, 2024

9:00 a.m., Central Time

   Via Webcast @ www. proxydocs.com/BFH    March 20, 2024
       
 

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How to Vote:

     
 

You are cordially invited to attend the virtual meeting, but whether or not you expect to attend, we urge you to grant your proxy to vote your shares by telephone or through the Internet by following the instructions included on the Notice of Internet Availability of Proxy Materials that you received, or if you received a paper copy of the proxy card, to mark, date, sign and return the proxy card in the envelope provided. You may still vote electronically if you attend the virtual meeting, even if you have given your proxy (other than for shares held in the Bread Financial 401(k) Plan), subject to the requirement to provide a proof of legal proxy for shares held by brokers or other nominees.

       

 

         

Items of Business

 

    01 | ELECTION OF DIRECTORS
    02 | ADVISORY VOTE ON EXECUTIVE COMPENSATION
    03 | APPROVAL OF 2024 OMNIBUS INCENTIVE PLAN
    04 | RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR 2024
    05 | SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF

 

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Admission

 

 

Important Notice Regarding Admission to the 2024 Virtual Annual Meeting of Stockholders:

The meeting will be held on Tuesday, May 14, 2024 at 9:00 a.m. Central Time. Stockholders or their legal proxy holders who wish to attend the Annual Meeting of Stockholders may register in advance at www.proxydocs.com/BFH and enter the control number on their proxy card, Notice of Internet Availability of Proxy Materials or instructions accompanying their proxy materials previously received. See additional instructions for admission and attendance under the heading “Attending the Virtual Annual Meeting” below in this proxy statement. This year’s meeting will be held exclusively online; we are not holding an in-person meeting. Stockholders will be able to attend, vote and submit questions (both before, and during a portion of, the meeting) virtually.

The Notice of Internet Availability of Proxy Materials or, if requested, a printed copy of the Proxy Materials, was first mailed on or about April 3, 2024 to all stockholders of record as of March 20, 2024.

 

By order of the Board of Directors,   

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Joseph L. Motes III    April 3, 2024
Corporate Secretary   

7500 Dallas Parkway, Suite 700

Plano, Texas 75024

 

  

 

Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on May 14, 2024: This proxy statement and annual report on Form 10-K for the year ended December 31, 2023 are available at www.proxydocs.com/BFH or on the Securities and Exchange Commission’s website at www.sec.gov.

 

         

 

 

 

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      Bread Financial | 2024 Proxy Statement             

 

 


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Table of

Contents

 

Proxy Summary      i  
Agenda and Voting Recommendations      1  
Corporate Governance      2  
Board of Directors and Committees      4  
Board and Committee Evaluations      9  
Director Selection Process      11  
Board’s Role in Risk Oversight      14  
Certain Relationships and Related Party Transactions      18  
Investor Engagement      19  
Commitment to Sustainability      24  
Proposal 1: Election of Directors      32  
Executive Officers      46  
Compensation & Human Capital Committee Report      50  

 

          Compensation Discussion & Analysis      51    
  Named Executive Officers      51    
  Company Highlights and 2023 Focus Areas      52    
  Say-On-Pay and Stockholder Engagement      56    
  Compensation Principles and Governance      60    
  Compensation Programs      63    
  Compensation Determination Process      77    
  Compensation Policies and Practices      80    
  Other Plans or Agreements Governing Executive Compensation      82    
      
Director and Executive Officer Compensation      83  
Security Ownership of Certain Beneficial Owners      102  
Proposal 2: Advisory Vote on Executive Compensation      104  
Proposal 3: Approval of the 2024 Omnibus Incentive Plan      105  
Audit Committee Report      116  
Proposal 4: Ratification of the Selection of the Independent Registered Public Accounting Firm      117  
Additional Information      120  
Questions and Answers about the Proxy Process      120  
Attending the Virtual Annual Meeting      126  
Incorporation by Reference      127  
Delinquent Section 16(a) Reports      127  
Householding of Annual Meeting Materials      128  
Other Matters      129  
Forward-Looking Statements      129  
Appendix A – Non-GAAP Financial Measures Reconciliation      A-1  
Appendix B – 2024 Omnibus Incentive Plan      B-1  
 

 

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Proxy

Summary

 

 

This summary highlights certain information about Bread Financial, including our core practices, business highlights, corporate governance, sustainability strategy and compensation program. Stockholders are encouraged to read our entire Proxy Statement and 2024 Annual Report carefully before voting.

 

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        Bread Financial | 2024 Proxy Statement      i     

 

 


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Items of Business

 

 

01 | ELECTION OF DIRECTORS

The Board of Directors recommends that stockholders vote FOR the election of each of the nominees.

02 | ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Board of Directors recommends that stockholders vote FOR the compensation paid to our named executive officers as disclosed in this proxy statement.

03 | APPROVAL OF THE 2024 OMNIBUS INCENTIVE PLAN

The Board of Directors recommends that stockholders vote FOR the approval of the 2024 Omnibus Incentive Plan.

04 | RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors recommends that stockholders vote FOR the ratification of the selection of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for 2024.

Bread Financial

 

 

We are a tech-forward financial services company providing simple, personalized payment, lending and saving solutions. We create opportunities for our customers and brand partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, we deliver growth for our brand partners through a comprehensive suite of payment solutions that includes private label and co-brand credit cards and Bread Pay buy now, pay later products. We also offer direct-to-consumer products that give customers more access, choice and freedom through our branded Bread CashbackTM American Express® Credit Card and Bread SavingsTM products.

Core Practices that Drive our Success

 

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     ii      Bread Financial | 2024 Proxy Statement       

 

 


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2023 Business Highlights & Awards

 

 

Despite the headwinds of challenging macroeconomic conditions and an uncertain regulatory environment, we made great progress in 2023 against our strategic objectives. Below is a snapshot of certain of our business highlights and recognitions from 2023. These figures are either as of, or for the year ended, December 31, 2023, as applicable, and the comparative figures in parentheses are year-over-year comparisons relative to 2022. A more detailed discussion of our 2023 strategic objectives and achievements can be found below under “Compensation Discussion and Analysis—Company Highlights and 2023 Focus Areas” beginning on page 52.

 

NET INCOME (continuing operations)

 

$737M( LOGO $513M)

  LOGO   

EARNINGS PER DILUTED SHARE (continuing operations)

 

$14.74( LOGO $10.27)

 

LOGO

 

REVENUE

 

$4.3B ( LOGO 12%)

  LOGO   

AVERAGE LOANS

 

$18.2B( LOGO 3%)

 

LOGO

 

PPNR*

 

$2.2B ( LOGO 16%)

  LOGO   

COMMON EQUITY TIER 1 CAPITAL RATIO

 

12.2%( LOGO 3.5%)

 

LOGO

 

REDUCED PARENT UNSECURED DEBT BY:

 

~$500M

  LOGO   

GREW CONSUMER DEPOSITS TO:

 

$6.5B

 

LOGO

 

*

Pretax pre-provision earnings (PPNR) is a non-GAAP financial measure; see the reconciliation included in Appendix A.

 

 

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        Bread Financial | 2024 Proxy Statement     iii     

 

 


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SELECTED 2023

Awards & Recognitions

 

 

 

   

LOGO

 

Bloomberg Gender

Equality Index

       

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Benchmark Portal

Center of Excellence

       

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Great Place to

Work Certified

                     
               
   

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Ragan Workplace

Wellness Award

       

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Newsweek’s America’s

Most Responsible Companies

       

LOGO

 

Newsweek’s America’s

Most Trustworthy Companies

 

 

 

 

 

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     iv      Bread Financial | 2024 Proxy Statement       

 

 


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2024 Director Nominees

 

 

 

 

 

   

 

   

 

   

 

   

 

   

 

  Committee Memberships  

Directors

  Occupation   Age  

Director

Since

  Independent   Audit  

Compensation

& HC

  N&CG   Risk &
Technology
 

LOGO

 

Ralph J. Andretta

  President and CEO, Bread Financial Holdings, Inc.   63   2020    

 

   

 

   

 

   

 

   

 

 

 

 

 

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Roger H. Ballou

  Former CEO and Director of CDI Corporation   73   2001          

 

   

 

 

 

 

 

LOGO

 

John J. Fawcett

  Former EVP and Chief Financial Officer of CIT Group Inc.   65   N/A        

 

     

 

 

 

 

 

LOGO

 

John C. Gerspach, Jr.

  Former CFO of Citigroup, Inc.   70   2020     µ    

 

   

 

   

LOGO

 

Rajesh Natarajan

  Chief Product and Strategy Officer of Globalization Partners   54   2020      

 

   

 

       

LOGO

 

Joyce St. Clair

  Former EVP and Chief Human Resources Officer of Northern Trust Corporation   65   2023      

 

     

 

     

LOGO

 

Timothy J. Theriault

  Former EVP, Global CIO and Advisor to CEO of Walgreens Boots Alliance, Inc.   63   2016        

 

   

 

    µ  

LOGO

 

Laurie A. Tucker

  Founder and Chief Strategy Officer of Calade Partners LLC   67   2015      

 

    µ    

 

 

 

 

 

LOGO

 

Sharen J. Turney

  Former CEO of Victoria’s Secret   67   2019      

 

  µ      

 

 

 

 

 

µ Chair  Member

 

 

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        Bread Financial | 2024 Proxy Statement     v     

 

 


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Director Nominees Snapshot

 

 

 

INDEPENDENCE      DIRECTOR TENURE    AGE DISTRIBUTION   DIVERSITY  
Independent   8    0-4 years   5    <50 years   0   Female   33.3%
LOGO    LOGO    LOGO   LOGO
Non-Independent   1      5-9 years   3    50-60 years   1   National Diversity   11%
LOGO    LOGO    LOGO   LOGO
     10-14 years   0    61-75 years   8   Ethnic Diversity   11%
     LOGO    LOGO   LOGO
     15+ years   1    Average Age: 65   Director Self-Identification of Race/Ethnicity:
     LOGO       

1 Asian

0 Black

Hispanic or Latinx

8 White

 
    

 

Average Director Tenure:

6.4 years

      

EXPERIENCE/QUALIFICATIONS/SKILLS/ATTRIBUTES

 

 

 

LOGO    Accounting / Auditing / Risk Management

 

     LOGO    Corporate Finance / Capital Management

 

   LOGO      9/9      LOGO      5/9  
LOGO    Business Operations         LOGO    Financial Expertise / Literacy   
   LOGO      9/9      LOGO      9/9  
LOGO    CEO / Executive Leadership         LOGO    Human Capital / Compensation   
   LOGO      9/9     

LOGO

     8/9  
LOGO    Corporate Governance / Ethics         LOGO    Independence   
   LOGO      4/9     

LOGO

     8/9  
LOGO    IT / Cybersecurity / Privacy         LOGO    Mergers & Acquisitions   
   LOGO      6/9      LOGO      5/9  
LOGO    International Operations         LOGO    Other Public Company Board Experience

 

   LOGO      9/9      LOGO      5/9  
LOGO    Relevant Industry Experience   
   LOGO    9/9

A detailed breakdown of our director nominees’ skills and qualifications can be found below under “Proposal 1: Election of Directors - Skills Matrix and Description of Director Knowledge, Skills and Experience.”

 

 

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     vi      Bread Financial | 2024 Proxy Statement       

 

 


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BOARD INDEPENDENCE

    

BOARD AND COMMITTEE

MEETINGS IN FISCAL 2023

  DIRECTOR ELECTIONS

Independent Board Committees: All

         
       7        Full Board Meetings  

ANNUAL

Frequency of Board Elections

   
Independent Director Nominees      19        Audit Committee  

MAJORITY

Voting Standard for Uncontested Elections

LOGO

 

8/9

     7        Compensation & Human Capital Committee
   

75

 

Mandatory

Retirement Age

     4        Nominating & Corporate
Governance Committee
 
   
       4        Risk & Technology Committee    

 

 

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        Bread Financial | 2024 Proxy Statement     vii     

 

 


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Corporate Governance Highlights

 

 

 

LOGO  

• Proxy access for stockholders

 

• Majority voting for uncontested director elections

 

• Responsive, active and ongoing stockholder engagement program

 

 

• Annual election of all directors

 

• Stockholder right to call a special meeting

 

• Annual advisory vote on executive compensation

 

• No poison pill

 

  LOGO
 

• Independent Chair of the Board of Directors

 

• Annual Board and committee self-assessments

 

• Individual director assessments by independent third-party facilitator

 

• All independent director nominees, except CEO

 

• Independent directors frequently meet in executive session

 

• Diverse and highly-skilled Board, with three female directors and one ethnically-diverse director

 

• Demonstrated commitment to Board refreshment and Board diversity, with 7 new directors nominated since 2019

 

• Committed to seeking women and underrepresented minority candidates to include in every pool from which Board nominees are chosen

 

• Skills matrix-driven nominee selection and Board composition

 

• Two female directors serve as Board committee chairs

 

 

• All financially literate Audit Committee members and multiple Audit Committee Financial Experts

 

• Strong commitment to ESG matters and sustainability

 

• Mandatory retirement age of 75 years for directors

 

• Comprehensive director onboarding program

 

• Significant stock ownership requirements for directors and executive officers

 

• Prohibition on hedging, pledging and speculative trading of Company securities

 

• Codes of Ethics for associates, directors and senior financial officers, with annual acknowledgment and training

 

• Limitations on directors’ public company board and audit committee service

  LOGO
 

• Active Board and committee oversight of the Company’s business plan, corporate strategy and risk management

 

• Monitors the “tone at the top” and our workplace culture and values

 

• Active Board engagement in managing talent and succession planning for executives

 

• Periodic reports and presentations to Board and Audit and Risk & Technology committees focusing on cybersecurity

 

• Annual dedicated Board retreat focused on corporate strategy

 

• Risk & Technology Committee oversight of our enterprise risk management and enterprise technology functions

 

• Nominating & Corporate Governance Committee oversight of ESG matters

 

• Compensation & Human Capital Committee oversight of human capital management strategies and diversity, equity, inclusion and belonging (DEIB) initiatives

 

 

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     viii      Bread Financial | 2024 Proxy Statement       

 

 


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Sustainability Highlights

 

 

Our Board of Directors is committed to integrating ESG principles throughout our business in ways that optimize opportunities to make positive impacts while advancing long-term financial and reputational goals. Our Board-approved strategy is intended to drive additional progress on initiatives that promote sustainability, diversity, equity, inclusion and belonging, and increased transparency in our disclosures.

 

 

LOGO

A few highlights of our 2023 accomplishments as they align with the tenets of our sustainability framework are set forth below. Additional information regarding our Commitment to Sustainability begins on page 24.

Managing our Business Responsibly

 

  Obtained inaugural issuer credit ratings with the major credit ratings agencies

 

  Further integrated safety and soundness practices throughout our business
  Established and implemented comprehensive Data Management Strategy

 

  Added staff to advance supplier diversity and sustainable sourcing
 

 

Empowering Our Customers

 

  Enhanced customer self-service options and reduced call time

 

  Launched Bread CashbackTM mobile app
  “Center of Excellence” certification from Benchmark Portal for industry-leading 18th consecutive time

 

  Launched Financial Wellness Hub on breadfinancial.com
 

 

Engaging Our Associates

 

  Created Office of People, Policy and Governance

 

  Launched New Associate Connect Business Resource Group
  Engaged new 401(k) provider and introduced “Free Money” Associate Program

 

  Earned Great Place to Work Certification® in both the U.S. and India
 

 

 

LOGO

        Bread Financial | 2024 Proxy Statement     ix     

 

 


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LOGO

 

Protecting Our Planet

 

  Completed enhanced climate risk evaluations and scenario analysis
  Implemented new carbon accounting tool
 
  Enhanced our paperless adoption program
  Expanded our biodegradable, renewable plastic material for use in our proprietary card, Bread CashbackTM
 

 

Creating Possibilities for Our Communities

 

  $8 million in total community investment

 

  Awarded $1 million in grants to 21 charities focused on financial wellness
  Opened the Employment Innovations School powered by Bread Financial at My Possibilities in Dallas, Texas

 

  Increased associate volunteer hours by more than 160%

 

 

 

 

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     x      Bread Financial | 2024 Proxy Statement       

 

 


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LOGO

 

Stakeholder Engagement & Transparency

 

 

 

80%

We contacted stockholders representing approximately 80% of our shares

  

63%

Holders of approximately 63% of our shares responded and engaged

~150

Total number of equity investors we engaged with

  

~100

Total number of debt investors we engaged with

 

LOGO     LOGO     LOGO

Stockholder Engagement

Management and, where appropriate, directors engage with stockholders through various means, including investor meetings, conferences and video/phone calls. We use the information and viewpoints gathered in our discussions with stockholders to help inform our priorities and strategies. Below are certain key topics frequently discussed with our stockholders.

   

Sustainability & ESG Engagement

We actively seek the input of a broad range of stakeholders in advancing our sustainability objectives, including further integrating ESG into our business strategy. In 2023 we conducted our fourth materiality assessment, engaging with the various stakeholders listed below to better understand their views and ensure we are prioritizing issues important to them, and our long-term business success.

   

Commitment to Transparency

We are committed to visibility and transparency into our business and to sharing our perspectives on matters of interest to our stakeholders, including our commitment to social responsibility. Below are certain examples of our commitment to transparency.

• Business strategy and outlook

 

• Board composition and succession planning

 

• Risk management

 

• ESG

 

• Corporate governance

 

• Data privacy and security

 

• Executive compensation, including response to our annual say-on-pay votes

 

For more detail, see “Corporate Governance – Investor Engagement” (page 19) and “Compensation Discussion and Analysis–Say-On-Pay and Stockholder Engagement” (page 56).

   

• Associates

 

• Brand partners

 

• Customers

 

• Stockholders

 

• Regulators and government officials

 

• Community and non-governmental organizations

 

For more detail, see “Commitment to Sustainability” beginning on page 24 of this proxy statement.

   

• Financial reporting presentation now aligns more closely to bank holding company peers, allowing for greater comparability for investors

 

• Enhanced compensation disclosures

 

• Annual Sustainability Report

 

• Other disclosures addressing matters critical to stakeholders can be found on our website, including:

 

• Human Rights Statement

 

• Environmental Policy Statement

 

• Codes of Ethics

 

• Supplier Code of Conduct

 

• Political Contributions and Activity Policy

 

 

LOGO

        Bread Financial | 2024 Proxy Statement     xi     

 

 


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LOGO

 

Executive Compensation Summary & Responsiveness

 

 

Executive Compensation Program Goals and Components

Our executive compensation program supports our business strategy by properly incentivizing and rewarding our executives for performance, aligning our executives’ interests with the long-term interests of our stockholders, and allowing us to attract, retain and motivate the highest level of executive talent to guide our business and successfully execute our strategy. We seek to achieve these objectives by linking individual pay with the Company’s performance on a diverse set of financial and non-financial measures, as well as key strategic goals. Our compensation programs are structured to encourage our executives to deliver strong results over the short-term while making decisions that create sustained value for our stockholders over the long-term.

Consistent with our compensation philosophy, the total target direct compensation of our named executive officers (NEOs) is heavily weighted towards variable, at-risk compensation that is tied to performance, with 87% of our CEO’s total pay at risk and 79% of our other NEOs’ average total pay at risk. The 2023 performance-based component for our CEO and our other NEOs comprised 62% and 60%, respectively, of such executive officers’ total direct compensation.

 

2023 CEO TARGET PAY MIX(1)

 

 

2023 AVERAGE NEO TARGET PAY MIX(1)

 

LOGO   LOGO

 

(1)

These pay mix charts exclude amounts listed in the column titled “All Other Compensation” in the Summary Compensation Table included in this proxy statement.

 

 

LOGO

     xii      Bread Financial | 2024 Proxy Statement       

 

 


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LOGO

 

Below is a more detailed summary of each component of our executive compensation program. We use each component of compensation to satisfy one or more of our compensation objectives. The Company places a significant portion of the overall target compensation for our executive officers “at risk,” without encouraging excessive or unnecessary risk-taking.

 

  

 

   Form of Payment  

Performance

Period

 

Performance

Criteria

  Objectives  

For More

Information

Base Salary

    

 

  Cash; Fixed   Ongoing   Alignment of salary with performance is evaluated on an annual basis  

• Compensates for day-to-day performance

• Attracts, retains and rewards NEOs with competitive fixed pay

• Reflects experience and job scope

  Page 64

Annual Incentive Compensation (AIC)

    

 

  Cash; Performance-Based   One Year   Results of metrics on balanced scorecard, adjusted upwards or downwards by strategic modifiers  

• Incentivizes performance on a range of financial and non-financial metrics in the following categories: Stockholder, Associate and Customer

• Rewards successful execution of key annual strategic goals

  Page 64

Long-Term Equity Incentive Compensation (LTIC)

   LOGO   60% Performance-Based RSUs (PBRSUs)   Three-Year Cliff Vesting   Return on Equity (ROE)  

• Aligns incentives with stockholder interests and long-term financial objectives

• Focuses our executives on delivering exceptional performance

  Page 72
   LOGO   40% Time-Based RSUs (TBRSUs)   Vests Ratably Over Three-Year Period   Time-based, subject to continued employment  

• Increases retention

• Promotes direct alignment with stockholder interests

• Rewards creation of long-term value

  Page 72

 

 

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        Bread Financial | 2024 Proxy Statement     xiii     

 

 


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Say-on-Pay Responsiveness

At our 2023 annual meeting of stockholders, we held an advisory vote on our 2022 executive compensation program, and approximately 75% of the votes cast were in support of the program. While still representing significant support for our compensation practices, we were nonetheless disappointed in the results of last year’s say-on-pay vote, and we are focused on understanding and responding to our stockholders’ feedback reflected in this vote.

In 2023, we engaged in proactive and extensive outreach with investors, including:

 

   

reaching out to stockholders representing approximately 80% of our common stock

 

   

actively engaging with stockholders representing approximately 63% of our common stock (approximately 150 discrete stockholders)

 

   

actively engaging on executive compensation matters with stockholders representing approximately 41% of our common stock

 

   

Our CFO participating in meetings with approximately 120 discrete stockholders, and in many cases meeting multiple times throughout the year with particular stockholders

 

   

Our CEO participating in meetings with approximately 80 discrete stockholders, and in many cases meeting multiple times throughout the year with particular stockholders

 

   

Our Board Chair participating in meetings with certain larger stockholders, where appropriate, representing approximately 18% of our common stock

For more information regarding our engagement efforts with both equity and debt investors, please see “Corporate Governance – Investor Engagement.” For additional information regarding our engagement efforts with our stakeholders more broadly, please see “Proxy Summary - Stakeholder Engagement & Transparency.”

Through our engagement efforts, we sought to elicit stockholders’ perspectives related to our executive compensation program, including program design elements, and specific actions to inform appropriate responses to the say-on-pay vote. The feedback received during these meetings was then shared and discussed with the Compensation & Human Capital Committee.

A detailed discussion regarding the feedback we heard from stockholders, and how we are responding, can be found under “Compensation Discussion and Analysis—Say-On-Pay and Stockholder Engagement” beginning on page 56 below.

 

 

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     xiv      Bread Financial | 2024 Proxy Statement       

 

 


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Agenda

& Voting

Recommendations

 

         

 

LOGO

Proposal 01

 

             

 

LOGO

Proposal 02

 

              
 

 

ELECTION OF DIRECTORS

The Board of Directors recommends that stockholders vote FOR the election of each of the following nine director nominees:

 

     

 

ADVISORY VOTE ON
EXECUTIVE COMPENSATION

The Board of Directors recommends that stockholders vote FOR the compensation paid to our named executive officers as disclosed in this proxy statement.

   
 

• Ralph J. Andretta

• Roger H. Ballou (Chair)

• John J. Fawcett

• John C. Gerspach, Jr.

 

• Rajesh Natarajan

• Joyce St. Clair

• Timothy J. Theriault

• Laurie A. Tucker

• Sharen J. Turney

       
 

 

LOGO

Proposal 03

 

     

 

LOGO

Proposal 04

 

   
 

 

APPROVAL OF 2024 OMNIBUS
INCENTIVE PLAN

The Board of Directors recommends that stockholders vote FOR the approval of the 2024 Omnibus Incentive Plan.

     

 

RATIFICATION OF THE SELECTION OF
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors recommends that stockholders vote FOR the ratification of the selection of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for 2024.

 

   

 

 

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        Bread Financial | 2024 Proxy Statement     1     

 

 


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Corporate

Governance

      

 

Overview

 

 

Corporate governance at Bread Financial is designed to promote the diverse priorities and interests of our stakeholders, strengthen Board and management accountability and foster responsible decision-making. Just as we are committed to delivering sustainable financial performance, we remain considerate of the material risks and opportunities involved in delivering value to our stockholders, brand partners, customers, vendors, associates and communities.

Following a long tradition of sound governance, our Board of Directors continues to develop, support and oversee the implementation of sustainable, stakeholder-centric practices consistent with the evolving governance environment, our stakeholders’ expectations, and the commitments we have made to them. Our Board is guided by our Corporate Governance Guidelines, which provide a framework for the governance of the Company. These guidelines address, among other things, the roles and responsibilities of our Board, the qualification and selection of directors, director orientation and education, board leadership, board structure, director time commitments and board process. Our Board reviews the Corporate Governance Guidelines, Committee charters and other governance policies annually and updates them as appropriate to address evolving corporate governance practices.

 

 

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     2      Bread Financial | 2024 Proxy Statement       

 

 


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Board Leadership

 

 

 

Our Board of Directors oversees and interacts with management to serve the long-term interests of the Company and our stockholders. In assessing these interests, the Board considers, as appropriate, the day-to-day needs of other stakeholders, including our associates and surrounding communities. Focus areas such as Company strategy, risk assessment and mitigation, cybersecurity, compliance, leadership development and succession, human capital management, operational performance, corporate governance, community investment and sustainability comprise the Board’s typical span of oversight.

Our bylaws require the Board of Directors to select a Board chair from among the directors and a chair for each Board committee, while our Corporate Governance Guidelines allow the Board to decide, in its business judgment, the appropriate leadership structure for our Company. The Board periodically

reviews the Company’s leadership structure to determine what best serves the Company and our stockholders. The Board currently believes having a non-executive chair is best practice, and, since December 2009, a non-executive director has occupied the role of Board chair. This structure provides a clear and distinct separation between the Board Chair and our Chief Executive Officer and enables our CEO to focus on the day-to-day operation of our business.

The Board Chair, among other duties, presides over Board meetings and executive sessions, promotes the effective flow of constructive feedback between Board members and management, advises and counsels the CEO, assists in setting meeting agendas and facilitates Board communication with our stockholders. Assuming the stockholders elect our director nominees, Mr. Ballou will continue his term as our non-executive Board Chair.

 

 

Director Independence

 

 

 

We have adopted general standards for determining director independence that are consistent with the NYSE listing standards. For a director to be deemed independent, the Board of Directors must affirmatively determine that the director has no material relationship with us or our subsidiaries, affiliates or any member of our senior management or their affiliates. Our Board annually reviews the independence of its non-employee directors. In making this determination, the Board considers relationships and transactions during the past three years between each director or any member of their immediate family, on the one hand, and our company, our subsidiaries, affiliates and senior management, on the other hand. For relationships not covered by certain bright-line criteria set forth in the NYSE listing standards, the determination of whether the relationship is material and, therefore, whether the director would be independent, is made by the Board of Directors. Directors have an affirmative obligation to inform our Board of any material changes in their circumstances or relationships that may impact their designation as

“independent.” Additional independence requirements established by the SEC and the NYSE apply to members of the Audit Committee and Compensation & Human Capital Committee.

Our Board undertook a review of director independence and considered transactions and relationships between each of the director nominees and the Company (including our subsidiaries, affiliates and senior management). Among other things, the Board considers whether directors serve as officers or directors of other companies with which the Company engages in business or has some other form of relationship. As a result of its director independence review, the Board of Directors affirmatively determined that none of director nominees Ballou, Fawcett, Gerspach, Natarajan, St. Clair, Theriault, Tucker or Turney has a material relationship with the Company (including our subsidiaries, affiliates and senior management) and, therefore, each is independent as defined by the rules and regulations of the SEC and the listing standards of the NYSE.

 

 

 

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        Bread Financial | 2024 Proxy Statement     3     

 

 


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Board of Directors and Committees

 

 

 

We are managed under the direction of our Board of Directors. Under our bylaws, the size of our Board may be between six and twelve directors. Our Nominating & Corporate Governance Committee regularly assesses the appropriate size of the Board. We currently have eight directors, including seven non-employee directors. All directors are elected annually and serve a one-year term. Our Board has nominated an additional non-employee director, John J. Fawcett, for election to the Board at the 2024 annual meeting. Accordingly, assuming all director nominees are elected, nine directors will be elected at the annual meeting, and the size of the Board will be increased to nine.

During 2023, our Board of Directors met 7 times. Each of our directors attended at least 75% of the meetings of the Board and Board committees on which they served during such director’s tenure, other than Ms. St. Clair. Ms. St. Clair joined the Board in July 2023 and her absences related to scheduling conflicts with the existing Board calendar due to prior commitments. In accordance with our Corporate Governance Guidelines, we expect all director nominees to attend the annual stockholder meeting. All director nominees attended the 2023 virtual annual meeting of stockholders.

Our Board has four standing committees, consisting of the Audit Committee, Compensation & Human Capital Committee, Nominating & Corporate Governance Committee and Risk & Technology Committee. Our Board has adopted a written charter for each committee, which sets forth their respective roles and responsibilities. The charters for each of these committees, as well as our Corporate Governance Guidelines and our Codes of Ethics for our senior financial officers, our Board members and our associates, are posted on our website at www.breadfinancial.com.

Our Board has determined that all current members and nominees of each of our standing committees are independent and fulfill the requirements applicable to their designated committees. In addition, the Board has determined that all current members and nominees of the Audit Committee are financially literate and each of Mr. Ballou, Mr. Gerspach and Mr. Fawcett possesses accounting or related financial management expertise within the meaning of the NYSE listing standards and are Audit Committee financial experts within the meaning of applicable SEC rules.

 

 

 

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     4      Bread Financial | 2024 Proxy Statement       

 

 


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LOGO

 
      
       

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Members

Roger H. Ballou

John C. Gerspach, Jr. (Chair)

Timothy J. Theriault

*John J. Fawcett

 

Independent/
Financially Literate

Each member is independent
and financially literate.

 

Audit Committee
Financial Experts

Mr. Ballou, Mr. Gerspach and *Mr. Fawcett

 

*  If John J. Fawcett is elected as a director, he will serve on the Audit Committee after the 2024 annual meeting. Mr. Fawcett is independent, financially literate and an Audit Committee Financial Expert.

  

Roles and Responsibilities

 

The Audit Committee’s primary roles and responsibilities include:

 

• assisting our Board in fulfilling its oversight responsibilities with respect to the integrity of our consolidated financial statements; our compliance with legal and regulatory requirements; the independent registered public accounting firm’s qualifications and independence; the performance of our internal audit department and the independent registered public accounting firm; and our financial function, including annual operating budget, corporate debt and capital planning

 

• preparing the Audit Committee report included in this proxy statement

 

• reviewing our consolidated financial statements and related disclosures to be included in filings with the SEC

 

• appointing, compensating, and overseeing our independent registered public accounting firm

 

• approving audit and permissible non-audit services to be performed by our independent registered public accounting firm

 

• overseeing our internal audit function

 

• reviewing and approving related party transactions

 

• reviewing the audit practices, guidelines and policies of our bank subsidiaries

 

• reviewing certain business and client contracts of the Company and our bank subsidiaries, as well as proposed acquisition or divesture, merger, outsourcing or similar agreements exceeding certain thresholds

 

• establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters

 

• overseeing our finance function and reviewing significant finance-related policies

 

• providing risk oversight as set forth under the caption “Board’s Role in Risk Oversight” below

 

         
      

 

 

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Members

Roger H. Ballou

Joyce St. Clair

Laurie A. Tucker

Sharen J. Turney (Chair)

 

Independent

Each member is independent

  

Roles and Responsibilities

 

The Compensation & Human Capital Committee’s primary roles and responsibilities include:

 

• overseeing matters relating to executive compensation and our benefit plans, as well as strategies and policies related to human capital management

 

• annually reviewing the compensation levels of our executive officers

 

• reviewing and approving the compensation for our non-CEO executive officers

 

• evaluating the CEO’s performance and recommending for approval by the independent directors of the Board the compensation of our CEO

 

• reviewing and approving our compensation philosophy, programs and plans for associates

 

• reviewing and discussing with management our succession planning for key executive officers

 

• periodically reviewing director compensation practices and recommending appropriate revisions to the Board

 

• administering certain matters with respect to our equity-based compensation plans

 

• reviewing and recommending for approval by the Board our Compensation Recoupment Policy and administering such policy

 

• reviewing disclosure related to human capital management and executive and director compensation in our proxy statements and discussing the Compensation Discussion and Analysis annually with management

 

• reviewing management’s human capital management strategies, including initiatives, policies and practices related to recruiting, retention and career development and associate engagement and effectiveness

 

• reviewing our associate DEIB initiatives, policies and practices

 

• preparing the Compensation & Human Capital Committee report included in this proxy statement

 

• providing risk oversight as set forth under the caption “Board’s Role in Risk Oversight” below

 

Compensation & Human Capital Committee Interlocks and Insider Participation

 

No member of the Compensation & Human Capital Committee is or has ever been one of our officers or other associates. No interlocking relationship exists between our executive officers or the members of our Compensation & Human Capital Committee and the board of directors or compensation committee of any other company.

 

         
      

 

 

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Members

Rajesh Natarajan

Laurie A. Tucker (Chair)

Sharen J. Turney

* John J. Fawcett

 

Independent

Each member is independent

 

*  If John J. Fawcett is elected as a director, he will serve on the Nominating & Corporate Governance Committee after the 2024 annual meeting. Mr. Fawcett is independent.

  

Roles and Responsibilities

 

The Nominating & Corporate Governance Committee’s primary roles and responsibilities include:

 

• identifying qualified Board members

 

• recommending to the Board the director nominees for each annual stockholder meeting (or to fill vacancies), the composition of Board committees, the Board chair and the chair for each Board committee

 

• developing criteria for the selection of directors, including procedures for reviewing potential nominees proposed by stockholders

 

• reviewing with the Board the desired experience, mix of skills and other qualities, including diversity of race/ethnicity and gender, to assure appropriate composition of the Board

 

• reviewing and monitoring the size and composition of the Board and its committees

 

• developing a Board succession plan and making recommendations to the Board on director succession matters

 

• reviewing our Corporate Governance Guidelines to ensure they reflect best practices and recommending proposed changes to the Board

 

• administering and leading the Board in its annual self-assessment performance review of the Board and its committees

 

• overseeing compliance with our Code of Ethics and related ethics complaints

 

• overseeing our ESG and sustainability strategies, including the review of target, standards and metrics to track performance, and receiving reports and advising management on related strategies, policies, guidelines and programs

 

• overseeing our initiatives, programs, practices and formal reporting related to sustainability topics, including those related to climate change, human rights, social impact and other related matters

 

• providing risk oversight as set forth under the caption “Board’s Role in Risk Oversight” below

 

         
      

 

 

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Members

John C. Gerspach, Jr.

Rajesh Natarajan

Joyce St. Clair

Timothy J. Theriault (Chair)

 

Independent

Each member is independent

  

Roles and Responsibilities

 

The Risk & Technology Committee’s primary roles and responsibilities include:

 

• assisting our Board in fulfilling its oversight responsibilities with respect to (1) our Enterprise Risk Management (ERM) Framework, including our policies, guidelines and practices related to credit, market, liquidity, strategic, reputational, operational, compliance, model and other identified risks; and the performance of our risk management function, including our Chief Risk Officer and (2) our enterprise technology function, including our Chief Technology Officer

 

• overseeing our risk assessment and ERM governance

 

• reviewing and recommending to the Board for approval our ERM Framework and Enterprise Risk Appetite Statements

 

• reviewing and assessing our operation within our ERM Framework and our established risk appetite

 

• reviewing and assessing the alignment of our strategy and capital plans with our risk appetite statements

 

• reviewing and discussing with our Chief Risk Officer each of our bank subsidiaries’ risk assessment and risk management governance, practices, guidelines and policies, as well as related processes and methodologies

 

• monitoring risk management- and technology-related regulatory developments and trends

 

• reviewing and overseeing our compliance with applicable laws and regulations

 

• overseeing our enterprise technology function, including governance, planning and strategy

 

• overseeing cybersecurity and other information technology risks

 

• advising on significant enterprise technology projects, investments and expenditures

 

• providing risk oversight as set forth under the captions “Board’s Role in Risk Oversight” and “Board Oversight of Information Security and Cybersecurity” below

 

         
      

 

 

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Executive Sessions

 

 

We regularly conclude our Board meetings with executive sessions. In most instances, either the Board chair or the CEO leads the Board in a director-only executive session. After the CEO leaves the meeting, the Board chair then leads the non-management members of the Board in an executive session. Each committee meeting may also conclude, at the election of such committee members, with an executive session. At the conclusion of quarterly meetings of the Audit Committee, Mr. Gerspach, the committee chair, typically leads an executive session during which the Chief Financial Officer, the Vice President of Global Audit and representatives of the independent registered public accounting firm may each meet separately with the committee. At the conclusion of quarterly meetings of the Risk & Technology Committee, the committee typically meets with the Chief Risk Officer in executive session apart from management. The Compensation & Human Capital Committee meets in executive session to discuss compensation matters regarding the CEO. The Board and each of its standing committees meet in executive session to review and discuss the results of their respective annual evaluations.

Board and Committee Evaluations

 

 

Our Board conducts an annual evaluation of the Board and its committees, which is administered and overseen by the Nominating & Corporate Governance Committee. As part of the Board evaluation, each director completes a written questionnaire on an anonymous, unattributed basis that is designed to assess the Board’s performance and to solicit feedback for improving Board effectiveness. Directors consider various topics related to Board composition, structure, effectiveness and responsibilities, as well as the overall mix of skills, experience, diversity and backgrounds represented on the Board. In addition, each Board committee conducts a similar evaluation to assess committee performance and effectiveness, the results of which are reviewed by the respective committees in executive session and reported to the Board. The Board meets in executive session to discuss the evaluation results, including input received from the committees. Following such discussion, the Board takes action, either directly or with the assistance of management, to implement changes as appropriate to address feedback and any areas of concern identified in the evaluation process. In 2023, the Nominating & Corporate Governance Committee supplemented its annual evaluation process by engaging an independent third party to interview each director and gain additional insight, as set forth in more detail below.

Annual Evaluation Process

 

REVIEW OF PROCESS

 

Our Nominating & Corporate Governance Committee annually examines our evaluation process, determining the appropriate format, approach and questions to ensure process effectiveness

 

 

 

u

 

QUESTIONNAIRE

 

Directors provide written responses to the Board and committee evaluations on an anonymous, unattributed basis, assessing performance and effectiveness and identifying areas for improvement

 

 

 

u

 

SUMMARY OF RESULTS

 

The General Counsel provides summarized results to the Board and each committee. The results are discussed with the full Board and each committee during executive sessions

 

 

 

u

 

FOLLOW UP

 

Evaluation results that require follow up or identify areas for improvement are considered and implemented, as appropriate

 

 

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2023 Individual Director Interviews with Third-Party Facilitator

 

 

DIRECTOR INTERVIEWS

 

In 2023, the Nominating & Corporate Governance Committee supplemented its annual evaluation process by engaging an independent third party to conduct candid, one-on-one interviews with each director to gain additional insight on, among other things, individual director performance, Board and committee performance and effectiveness and board dynamics

 

 

 

u

 

INDIVIDUAL DIRECTOR FEEDBACK

 

The third party synthesized the results and comments from the interviews and had subsequent conversations with each director to provide individualized feedback from the evaluation process

 

 

 

u

 

BOARD DISCUSSION/FEEDBACK

 

The third party also met with the full Board in executive session to review the results and feedback regarding the Board and discuss any opportunities identified through the interview and evaluation process

 

Feedback Incorporated

Over the past few years, feedback from the Board evaluation process has led to, among other things:

 

    engaging an independent third-party to facilitate individual director evaluations

 

    an annual dedicated Board retreat focused on the Company’s strategy

 

    Board refreshment and changes in Board composition

 

    addition of directors with financial experience, as well as expertise in areas critical to our business strategy and operations

 

    outside presentations on emerging risks, industry trends, competitive environment and other topics of interest
    enhancements to our director onboarding and education program

 

    ongoing improvements of materials and information provided to the Board

 

    diversification of the location of Board meetings

 

    more frequent updates and additional information provided on our bank subsidiaries

 

    additional time allocated for discussions

 

    periodic check-ins by our Board Chair with individual directors
 

 

 

 

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Director Selection Process

 

 

Identifying and Evaluating Candidates for Directors

 

The Nominating & Corporate Governance Committee is responsible for reviewing with the Board the qualifications for Board membership and for identifying, assessing and recommending qualified candidates for the Board’s consideration. The committee developed and maintains a skills matrix that is based on the Company’s strategic plan and is reviewed and updated on a regular basis. The skills matrix assists the committee in its consideration of existing directors and potential candidates to ensure the Board has the appropriate balance of experience, skills and attributes.

The committee uses a variety of methods for identifying and evaluating potential director candidates, including third-party search firms, recommendations from current Board members, senior executives and stockholders, and research using subscription-based portal resources. Regardless of the method used, the Board has committed to ensuring that every pool from which Board nominees

are chosen includes women and underrepresented minority candidates. The committee will consider all candidates identified through the methods described above, and will evaluate each of them, including incumbent directors and candidates recommended by stockholders, based on the same criteria.

The committee conducts comprehensive reviews and assessments of potential candidates and discusses their qualifications and expected contributions to the Board during committee and Board meetings. Any candidates that advance from this process are interviewed by members of the Nominating & Corporate Governance Committee and other Board members, including the Chair. The committee recommends favorable candidates to the Board for approval.

 

 

Director Qualifications and Nominations to the Board

 

There are no firm prerequisites to qualify as a candidate for our Board of Directors, but we seek a diverse group of directors who possess the requisite background, knowledge, experience, expertise and time, as well as, where appropriate, diversity with respect to race/ethnicity and gender, and who will strengthen and increase the diversity, skills and qualifications of our Board. When selecting director nominees, the Nominating & Corporate Governance Committee also considers other relevant factors as it deems appropriate, including the current composition of the Board, the balance of management and independent directors, and the need for Audit Committee or other particular expertise. We seek director candidates who have sufficient time to make a significant contribution to our Board, to our Company and to our stockholders. Each member of our Board is expected to ensure that other existing and

planned future commitments do not materially interfere with their service as a director. Directors are expected to attend meetings of the Board and the Board committees on which they serve and to spend the time needed to prepare for meetings.

When determining the slate of directors, the Nominating & Corporate Governance Committee considers current Board members as well as potential candidates identified through the methods mentioned above. After completing a thorough evaluation of current directors and any potential candidates, the committee provides its recommendations to our Board for review and approval. After careful consideration, the Board will determine the director nominees to recommend to our stockholders for election or re-election at our annual stockholder meeting.

 

 

 

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Board Refreshment

Our Board has maintained an active and successful Board refreshment process, with 7 new directors nominated since 2019, increasing the Board’s diversity and providing it with a strong mix of experience, skills and backgrounds.

 

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Stockholder Recommendations and Nominations of Director Candidates

 

In addition to other methods for identifying director candidates described above, our stockholders may recommend or nominate one or more persons for election to our Board of Directors in accordance with the requirements discussed below.

Stockholder Recommendations. Stockholders who wish to recommend a prospective nominee for our Nominating & Corporate Governance Committee to consider for election to our Board may notify our Corporate Secretary in writing with whatever supporting material the stockholder considers appropriate. Recommendations should be addressed to: Joseph L. Motes III, Corporate Secretary, Bread Financial Holdings, Inc., 7500 Dallas Parkway, Suite 700, Plano, Texas 75024.

Stockholder Nominations. Stockholders may nominate one or more persons for election to our Board at an annual meeting of stockholders if the stockholder complies with the nomination requirements set forth in our bylaws and any applicable rules and regulations of the SEC. For additional information on the process and deadlines for director nominations by stockholders, see

“Additional Information – What is the deadline for submitting proposals, including director nominations, for our 2025 annual meeting” below.

Section 3.4 of our bylaws sets forth an advance notice procedure for director nominations that are not submitted for inclusion in the proxy statement but that a stockholder instead wishes to present at an annual meeting. Such nominations will not be included in the proxy statement and form of proxy distributed by our Board of Directors.

Further, Section 3.5 of our bylaws provides proxy access rights that permit eligible stockholders to nominate persons for election to our Board in our proxy statement. These proxy access rights permit any stockholder, or group of up to 20 stockholders, owning continuously for at least 3 years shares of our company representing an aggregate of at least 3% of the voting power entitled to vote in the election of directors, to nominate and include in our proxy materials director nominees constituting up to 20% of our Board, provided that the stockholder(s) and the nominee(s) satisfy the requirements set forth in our bylaws.

 

 

Director Succession and Retirement Policy

 

 

Director succession planning is also a focus of the Nominating & Corporate Governance Committee with an emphasis on striking a balance between board refreshment and the need for new or additional skill sets, with maintaining the institutional knowledge about our business and operating history. Our Corporate Governance Guidelines provide for a mandatory retirement age of 75, but allow directors turning 75 to complete their term. Our guidelines also allow our Board of Directors to nominate for re-election a director who has surpassed the age of 75 if it is in the best interests of the Company and its stockholders.

Within the next few years, two of our current Board members, Mr. Ballou (age 73) and Mr. Gerspach (age 70), will reach our mandatory retirement age of 75. Mr. Ballou is our Board Chair and serves on our Audit Committee and Compensation & Human Capital Committee and Mr. Gerspach is the Chair of our Audit Committee and also serves on our Risk & Technology Committee. With this in mind, our Nominating & Corporate Governance Committee has been actively engaged in director succession planning to help ensure the Board is well-positioned with directors who have the appropriate leadership, expertise and other valuable attributes that these directors currently provide.

 

 

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Director Service on Other Public Company Boards

 

 

Pursuant to our Corporate Governance Guidelines, directors must advise the Board Chair in advance of accepting any invitation to serve on another public company board. Our directors are also prohibited from serving on more than four other public company boards, and our CEO may not serve on more than one other public company board. Further, a director who serves on the Audit Committee cannot simultaneously serve on more than two other public company audit committees. These provisions are in place to help ensure directors are able to comply with our expectations on a director’s time and availability.

Director Orientation and Education

 

 

We have a director orientation program that familiarizes new directors with our business, and includes presentations by senior management on several areas, including director duties, applicable securities laws, as well as our policies, key associates, strategic plans, financial reporting, Code of Ethics and auditing processes. All directors are invited to attend the orientation presentations. In addition, our directors are assigned certain of our associate training courses relating to, among other topics, our Code of Ethics, information security, privacy, insider trading and regulatory compliance.

For ongoing director education, outside experts are periodically invited to present to the Board on various topics of interest to help enhance our directors’ knowledge and keep them current on corporate and other developments relevant to our business and to their work as directors. Board members are also regularly informed of upcoming director education courses and encouraged to attend such courses as they deem appropriate.

Board’s Role in Risk Oversight

 

 

Our Board of Directors, as a whole and through its committees, maintains responsibility for the oversight of risk management, including monitoring the “tone at the top” and our risk culture and overseeing emerging and strategic risks. Our Board exercises this oversight both directly and indirectly through its four standing committees, each of which is delegated responsibility for risks within their respective areas of oversight. Our CEO and other senior leaders regularly report to the Board and its committees to discuss risks, including credit risk, market risk, liquidity risk, operational risk (including cybersecurity matters), compliance risk, model risk and reputational risk. These reports, along with reports from each Board committee regarding topics discussed at meetings, assist in the Board’s oversight of risk. On at least an annual basis, our Board reviews our long-term strategic plans, including discussion of strategic, operational and competitive risks.

 

 

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The chart below provides an overview of the allocation of risk management responsibilities among each of the Board committees.

 

Committees

  Primary Areas of Risk Oversight

Risk & Technology Committee

 

• provides oversight on our enterprise risk management framework, including significant enterprise risk management-related strategies, guidelines, policies and risk limits

 

• provides oversight on our enterprise technology function, including governance, planning and strategy

 

• evaluates risk information provided by our Chief Risk Officer and reports to the Board those material risks that might adversely affect the achievement of our strategic, financial, compliance, operational and enterprise objectives

 

• monitors and evaluates trends and developments in technology, as well as industry trends, that may affect our strategic plans

 

• reviews and assesses whether we are operating in accordance with our established risk appetite and assesses the alignment of our strategy and capital plans with our risk appetite statements

 

• meets with senior executives and receives reports on risk topics, including, regulatory examination reports, enterprise technology, cybersecurity and physical security, privacy compliance, disaster recovery plans and procedures, operational risk, fraud management, and data-related risks

 

• provides oversight on the Company’s compliance with applicable laws and regulations

 

• reviews risk assessment and risk management governance and practices at our bank subsidiaries

 

• provides oversight as set forth under the caption “Board Oversight of Information Security and Cybersecurity” below

 

Audit Committee

 

• provides oversight on risks relating to the Company’s consolidated financial statements, financial reporting and accounting processes and controls

 

• provides oversight on our finance function, including annual operating budget, corporate debt and capital planning

 

• reviews with management matters related to the effectiveness of the Company’s operational risk management control environment and the status of corrective actions

 

• together with the Risk & Technology Committee, reviews the Company’s major financial risk exposures and management’s response to monitor and control such exposures, including financial risks relating to litigation or other legal, regulatory or compliance matters

 

• together with the Risk & Technology Committee, reviews key guidelines and policies governing the Company’s significant processes for risk assessment and risk management

 

Compensation & Human Capital Committee

 

• provides oversight on risks related to compensation matters, including the design of our compensation programs to ensure they align the interests of participants with those of our stockholders and provide safeguards against and do not promote excessive risk-taking by program participants

 

• approves performance targets and ranges in our annual and long-term incentive programs and the subsequent achievement of previously-approved performance targets

 

• provides oversight on risks related to human capital management, including recruiting, retention and career development, DEIB and management succession planning

 

Nominating & Corporate Governance Committee

 

• provides oversight on risks related to corporate governance, including governance matters that could impact the Company’s performance or reputation or that are of concern to stockholders, including board composition, diversity and refreshment, director succession planning and corporate ethics

 

• provides oversight on risks related to ESG and sustainability issues, including climate change, human rights, social impact and other related matters

 

 

 

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Board Oversight of Information Security and Cybersecurity

 

 

 

Protecting our clients’, customers’ and associates’ personal information and maintaining the security of our systems and networks are priorities at Bread Financial. Our Board is committed to ensuring that the Company has effective controls and protections to maintain the trust of our clients, customers and associates in an evolving environment.

Our Board considers cybersecurity risk to be a critical part of its risk oversight function and has delegated to the Risk & Technology Committee primary oversight of cybersecurity and other information technology risks, including oversight of management’s implementation of our cybersecurity risk management program. The Audit Committee also reviews cybersecurity matters as part of its oversight of major financial risk exposures. 

The Risk & Technology Committee receives regular reports from management on our cybersecurity risks as well as updates on, among other things, the evolving threat environment, vulnerability assessments, and management’s efforts to monitor, detect and prevent cyber threats to the Company. In addition, management updates the committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Risk & Technology Committee periodically reports to the Board regarding its activities, including those related to cybersecurity. Board members receive presentations on cybersecurity topics from our Chief Information Security Officer (CISO) or external experts as part of the Board’s continuing education.

Our management team, including our CISO, Chief Risk Officer and Chief Operational Risk Officer, is responsible for assessing and managing our material risks from cybersecurity threats. Our management team has primary responsibility for our overall cybersecurity management and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.

 

We maintain an information and cybersecurity risk management program that is designed to protect the confidentiality, integrity and availability of critical information and information systems. The program is designed based on the National institute of Standards and Technology Cybersecurity Framework. We use this framework as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

Our cybersecurity risk management program includes:

 

    risk assessments designed to help identify material cybersecurity risks to our critical systems, information products, services, and our broader enterprise IT environment

 

    A security team principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents

 

    The use of external service providers, where appropriate, to assess, test, train or otherwise assist with aspects of our security controls

 

    Security tools deployed in the IT environment for protection against and monitoring for suspicious activity

 

    Cybersecurity awareness training of our associates, including incident response personnel and senior management

 

    A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents

 

    A third-party risk management process for service providers, suppliers and vendors
 

 

 

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Board Oversight of Strategy

 

 

 

Our Board and its committees are actively engaged with management to provide guidance on, and oversight of, the Company’s corporate strategy. The Board oversees strategy and strategic risk through robust and constructive engagement with management, taking into consideration the Company’s key priorities, trends impacting our business, regulatory developments and innovations and disruptors in our industry. The Board has an annual strategic planning retreat, which includes

presentations from senior management regarding strategic plans and priorities for the business, and discussions on risks and opportunities facing the Company. In addition, various elements of our strategy are regularly discussed at meetings of the Board and its committees. To assess performance against the Company’s strategic plans, the Board receives regular updates on progress and execution and provides direction to senior management throughout the year.

 

 

Management Oversight of Risk

 

 

 

Our management is responsible for the day-to-day handling of risks our Company faces and implementing and supervising risk management processes and policies. We have a comprehensive Enterprise Risk Management (ERM) program that is designed to ensure that all significant risks are identified, measured, monitored and addressed. Our ERM program reflects our risk appetite, governance, culture and reporting. We manage enterprise risk using our Board-approved ERM Framework, which includes board-level oversight, risk management committees, and a dedicated risk management team led by our Chief Risk Officer. Our Chief Risk Officer is responsible for establishing and implementing standards for the identification, management, measurement, monitoring and reporting of risk on an enterprise-wide basis. The Chief Risk Officer regularly reports on risk management matters to the Risk & Technology

Committee as well as the Risk and Compliance Committees of our bank subsidiaries.

We also operate several internal management risk committees to oversee our risks, including a Bank Risk Management Committee and an IT Governance Committee at each of our bank subsidiaries. The Bank Risk Management Committees and IT Governance Committees are the highest-level management committees at our bank subsidiaries to oversee risks and are responsible for risk governance, risk oversight and making recommendations on the risk appetite for our bank subsidiaries. Each of our internal management risk committees provides risk governance, risk oversight and monitoring for their respective risk category(ies) of responsibility. Each committee reviews key risk exposures, trends and significant compliance matters and provides guidance on steps to monitor, control and escalate significant risks.

 

 

 

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Certain Relationships and Related Party Transactions

 

 

 

Since the beginning of the last fiscal year, the Company has not entered into any transactions, nor are there any proposed transactions, in which the Company was, or is to be, a participant and in which any related person had or is expected to have a direct or indirect material interest.

Our Board of Directors has adopted a written Related Party Transactions Policy, which prohibits us from entering into any “related party transaction” unless the Audit Committee approves such transaction in accordance with the guidelines set forth in the policy, or the transaction is approved by a majority of disinterested directors of the Company. In approving any related party transaction, the Audit Committee must determine that the transaction is beneficial to the Company and the terms of the related party transaction are fair to the Company.

Our Related Party Transactions Policy defines a “related party” to include directors, director nominees, executive officers, five percent or greater stockholders of the Company or an immediate family member of any of these persons. A “related party transaction” includes any transaction or series of related transactions in which: (1) the Company, or any of its subsidiaries, is a participant, (2) the aggregate amount exceeds $120,000 and (3) the related party has or will have a direct or indirect material interest.

Our Related Party Transactions Policy deems the following transactions to be pre-approved and does not require further review:

 

(1)

compensation of directors that has been approved in accordance with the Compensation & Human Capital Committee charter;

 

(2)

employment and compensation of an executive officer that has been approved in accordance with the Compensation & Human Capital Committee charter;

(3)

a transaction in which the interest of the related party arises solely from the ownership of a class of the Company’s equity securities and all holders of that class receive the same benefit on a pro rata basis;

 

(4)

transactions involving certain indemnification payments and payments under directors and officers liability insurance policies;

 

(5)

a transaction in which the rates or charges involved therein are determined by competitive bids;

 

(6)

a transaction that involves services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services; and

 

(7)

certain company charitable contributions.

At each Audit Committee meeting, management recommends any related party transactions, if applicable, to be entered into by the Company. After review, the Audit Committee approves or disapproves such transactions and at each subsequently scheduled meeting, management is required to update the Audit Committee as to any material change to those approved transactions. If management becomes aware of an existing related party transaction that has not been pre-approved by the Audit Committee, management must promptly notify the chair of the Audit Committee and the Audit Committee will review and determine whether to ratify such transaction. The Audit Committee establishes such guidelines as it determines are necessary or appropriate for management to follow in its dealings with related parties in related party transactions.

 

 

 

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Investor Engagement

 

 

Engagement with our stockholders and our debtholders remains an important part of our corporate governance practices and is essential to our commitment to transparency.

Our Board and management value the insights, opinions and feedback of our stockholders and other stakeholders. In addition to regularly engaging in dialogue with stockholders through quarterly earnings calls, investor meetings and conferences and other communication channels, we also proactively engage with our stockholders and debtholders throughout the year to discuss matters relevant to our business. Investor interactions most frequently involve our CEO, CFO and/or investor relations team, but other members of management, including our General Counsel, Chief Sustainability Officer and executive compensation team, as well as our Board Chair, also met with our stockholders in 2023. Our Board and our Compensation & Human Capital Committee receive regular updates throughout the year from our investor relations team and management on our investor engagement and feedback received from stockholders and other investors. This engagement allows us to:

 

   

provide visibility and transparency into our business, including our corporate governance, ESG and compensation practices;

 

   

share our perspectives on issues that are important to our investors and better understand their views and expectations and answer any questions they may have; and

 

   

use the information and viewpoints gathered in our discussions with stockholders to help inform our priorities, strategies and practices.

 

 

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2023 Engagement

We continued to increase our investor engagement in 2023, demonstrating our ongoing commitment to transparency and our desire to engage in two-way dialogue with our investors.

 

Contacted investors

representing approximately

80%

of our common stock

    

 

Investors representing

approximately

63%

of our common stock

responded and engaged

   

Engaged with

approximately

150

discrete equity investors

Engaged with

approximately

100

discrete debt investors

    

CFO met with over

200

discrete equity and debt investors

   

CEO met with over

80

discrete equity and debt investors

Attended

11

industry conferences

    

Held

11

non-deal roadshows

   

Held

15

meetings with ratings agencies

Investors representing approximately

41%

of our common stock engaged on executive compensation issues

    

Investors representing approximately

43%

of our common stock engaged on ESG-related issues

   

Board Chair met with investors representing approximately

18%

of our common stock

    

 

Key Topics Discussed

 

•  business strategy and outlook

•  board composition and succession planning

•  risk management

•  ESG/sustainability

•  corporate governance

•  data privacy and security

•  executive compensation, including response to our annual say-on-pay votes

 

   

 

 

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Timeline of Annual Stockholder Engagement

We believe that stockholder engagement is an ongoing process that should occur throughout the year during multiple touchpoints. The following provides an overview of our engagement process throughout the year:

 

Engagement Process

Early Spring

 

Publish our proxy statement and annual report; offer to engage with stockholders on executive compensation and other matters that stockholders may wish to discuss in advance of our annual meeting

  

Mid-Spring

 

Annual meeting of stockholders; analyze voting results following the annual meeting to evaluate stockholder support

  

Summer

 

Publish our ESG Report; outreach to stockholders to share our ESG Report with them and engage on ESG-related matters

  

Fall/Winter

 

Seek to engage with institutional stockholders, which we have found is a better time of year for these stockholders to engage with us on a broad range of topics

 

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Throughout the year, engage with stockholders in one-on-one meetings and during conferences, road shows and earnings calls

Say-on-Pay Responsiveness

 

At our 2023 annual meeting of stockholders, we held an advisory vote on our 2022 executive compensation program, and approximately 75% of the votes cast were in support of the program. While still representing significant support for our compensation practices, we were nonetheless disappointed in the results of last year’s say-on-pay vote, and we are focused on understanding and responding to our stockholders’ feedback reflected in this vote.

As referenced above under “—2023 Engagement,” we engaged in proactive and extensive outreach with investors in 2023. Through our engagement efforts, we sought to elicit stockholders’ perspectives related to

our executive compensation program, including program design elements, and specific actions to inform appropriate responses to the say-on-pay vote. Stockholders representing approximately 41% of our common stock did engage with us on compensation-related matters, and the feedback received during these meetings was then shared and discussed with the Compensation & Human Capital Committee.

A detailed discussion regarding the feedback we heard from stockholders, and how we are responding, can be found under “Compensation Discussion and Analysis—Say-On-Pay and Stockholder Engagement” beginning on page 56 below.

 

 

Communications with the Board of Directors

 

 

 

Our Board of Directors has adopted a process for stockholders and other interested parties to communicate with the Board or any individual director. Stockholders and other interested parties may send communications to the Board or any individual director in care of Joseph L. Motes III, Corporate Secretary, Bread Financial Holdings, Inc., 7500 Dallas Parkway, Suite 700, Plano, Texas 75024. All communications will be compiled and submitted to the Board or the individual directors on a periodic basis. The Corporate Secretary, however, reserves the right not to forward any abusive, threatening, or otherwise inappropriate communications.

Stockholders and other interested parties may also submit questions or comments to the Board through our Ethics Office by email at CorporateEthics@breadfinancial.com or, on an anonymous basis if desired, through the Ethics Helpline at (877) 217-6218 or www.breadfinancial.ethicspoint.com. Concerns relating to accounting, internal control over financial reporting or auditing matters will be brought to the attention of the Audit Committee and handled in accordance with our procedures with respect to such matters.

 

 

 

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Code of Ethics

 

 

 

Our Board has adopted a Code of Ethics that applies to our associates, officers and directors, and provides an overview of policies and procedures and guidance for behaving ethically and responsibly. In addition, our Board has adopted a Code of Ethics for Senior Financial Officers and a Code of Ethics for Board Members, which supplement the Code of Ethics and provide additional guidance applicable to those designated individuals. Each of these Codes of Ethics is posted on our website at www.breadfinancial.com. A

copy of each is also available upon written request directed to Joseph L. Motes III, Corporate Secretary, Bread Financial Holdings, Inc., 7500 Dallas Parkway, Suite 700, Plano, Texas 75024. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to or waiver from a provision of our Code of Ethics for designated officers or directors by posting such information on our website.

 

 

Political Contributions and Activity

 

 

 

Engagement in political, legislative and regulatory processes can be important to the success of the Company. The Company works to educate government officials and impact legislative and regulatory matters (at the federal, state and local levels) on issues important to the best interests of the Company and its associates, customers, and brand partners. This effort often involves working with industry partners and outside consultants and, at times, engaging directly with government officials and their staffs. We have adopted a Political Contributions and Activity Policy that sets forth the ways by which the Company and its associates may participate in political, legislative and regulatory processes. All Company political contributions and activities comply

with applicable laws, and we disclose our contributions publicly as required by law.

Eligible associates may also voluntarily participate in the political process by supporting the Company’s non-partisan political action committee (PAC), which is governed by comprehensive federal regulations that require the filing of reports with the Federal Election Commission among other reporting and disclosure requirements. Our General Counsel provides oversight for the Company’s political engagements. For further information, please see our Political Contributions and Activity Policy, available on our website at www.breadfinancial.com.

 

 

 

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CEO and Key Executive Succession Planning

 

 

 

Our Board recognizes the importance of identifying and developing executive talent to ensure we continue to have effective executive leadership in place both now and in the future. The Board has delegated to the Compensation & Human Capital Committee the responsibility to review and discuss with management our succession planning for key executive officers.

At least annually, the Board reviews the Company’s leadership pipeline and talent and management succession planning with the CEO. Our CEO meets with his direct reports at least annually to review potential successors for key executive positions, identifying and assessing each such potential successor’s relevant experience, strengths and skills as well as any areas where additional development may better prepare an individual for a future role. Where appropriate, development plans to address any gaps in skills or other attributes of such successors are also reviewed

to ensure that potential successors are well-equipped for the role to which they might be elevated. Our CEO then meets with our Board in executive session to discuss and provide recommendations and assessments of potential successors for key executive positions.

Our independent directors also meet in executive session, either with our Chief People & Culture Officer or using reports and information provided, to discuss and plan for CEO succession. Our Board makes sure it has sufficient opportunities to meet with, and assess development plans for, potential CEO and key executive successors, including through management presentations to the Board and committees, attendance at Board meetings, our annual Board strategy retreat, and periodic informal meetings and communications.

 

 

Trading in Company Securities

 

 

 

We have insider trading policies that prohibit our directors, executive officers and associates from engaging in hedging transactions with respect to Bread Financial securities. We further prohibit our directors, executive officers and certain other senior leaders and individuals (covered persons) from trading in puts or calls or engaging in short sales with respect to Bread Financial securities and from holding Company securities in a margin account or otherwise

pledging Company securities as collateral for a loan. These covered persons are also subject to other trading restrictions, including the ability to trade in Company securities only during designated trading windows and the requirement to pre-clear with the General Counsel’s office all transactions in Company securities, including entering into any Rule 10b5-1 trading plans.

 

 

 

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Commitment

to Sustainability

 

         
        

 

Our Board of Directors is committed to sustainability, including integrating ESG principles into our business strategy in ways that optimize opportunities to make positive impacts while advancing long-term financial and reputational goals. Management’s approach to sustainability focuses on ethics and integrity, risk management, and seeking out proactive initiatives that add value to our business and stakeholders. As our business has transformed over the years, our culture of caring and doing the right thing has deliberately evolved into a principled, stakeholder-driven approach, that serves as the underpinning of our sustainability strategy. We hold ourselves accountable to our stakeholders and the pillars of that strategy, while also aligning with relevant global frameworks. Our mission is to challenge the status quo in financial services solutions by delivering simple, smart products backed by a seamless experience to our customers and partner base.

Sustainability Highlights for 2023

 

 

 

  LOGO  
44%   women
senior leaders
(director level
and above)
  $8M  

 

community
investment

 

LOGO

 

  LOGO  
100%  

renewable energy sourced at our headquarters in Columbus, Ohio

 

  $7.5M  

new commitments to support small businesses

 

 

 

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Sustainability Strategy and Oversight

 

 

Strategy and Governance

Businesses are facing increasing scrutiny and elevated expectations from their stakeholders surrounding their role and ability to address the world’s complex environmental and social issues, as well as demonstrate comparable and consistent measures of their impact. To that end, sustainability has evolved into a strategic priority for Bread Financial as we position ourselves effectively for the future. By accounting for and integrating environmental, social and governance strategies with that of our overall business, we are better able to: mitigate risk; drive innovation and operational efficiency; attract and retain talent; enhance reputation and brand value; and strengthen stakeholder relationships. We believe our ability to create long-term value for all our stakeholders is linked to our effective management of environmental, social and governance issues. To that end, our sustainability strategy has evolved to more deeply embed these priorities into our business strategy and operations.

In 2023 we conducted our fourth materiality assessment. The purpose of the assessment was to engage internal and external stakeholders on corporate responsibility topics. The findings help Bread Financial validate and inform our sustainability strategy and focus those initiatives that maximize impact for the business and our stakeholders.

Through an online anonymous survey, participants were asked to rank the importance of 21 topics. High-level outcomes of the analysis are included below. Complete results will be published in our 2023 Sustainability Report. While not every topic presented can be deemed highly important, all are relevant to our sustainability commitments and activities. We will continue to manage them as required, in line with the expectations of our customers, partners, investors, associates and other key stakeholders.

 

Top 5 Topics:    Bottom 5 Topics:

Business Ethics and Integrity

Customer Privacy, Cybersecurity

Customer Satisfaction

Fair & Responsible Banking

Risk Management and Compliance

  

Greenhouse Gas Emissions

Low Carbon Products and Services

Physical Climate Risk

Renewable Energy

Water Management

The five tenets of our sustainability strategy:

 

 

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LOGO    Managing Our Business Responsibly

Sustainability Governance

Our Board of Directors is responsible for overseeing the successful implementation of our sustainability strategy and receives at least biannual updates on key environmental and social priority topics. Our Nominating & Corporate Governance Committee provides oversight on our ESG and sustainability strategies and consults with management on related initiatives, policies, guidelines, programs and practices. Our Compensation & Human Capital Committee provides oversight on human capital management strategies and also reviews our DEIB initiatives, policies and practices on a quarterly basis. Our Compensation & Human Capital Committee, along with our Board of Directors, receives regular updates from senior management and third-party consultants on human capital trends and developments, and other key human capital matters that drive our ongoing success and performance.

We believe that strong governance related to ethics and integrity, risk management and compliance, and business continuity supports the long-term success of our Company, building trust and credibility with our stakeholders. We have a long history of excellence in corporate governance and compliance practices, including an emphasis on accountability and authenticity in line with our values. In 2022, we developed our Sustainability Framework, which helps us more effectively manage and optimize opportunities to make positive environmental, social, and governance impacts, while advancing our long-term financial and reputational goals and focusing on stakeholder value creation.

Our Sustainability Framework covers:

 

  Roles, Responsibilities, and Accountability

 

  Management
  Assessment

 

  Internal and External Reporting
 

 

Our strong governance over social and environmental topics is reflected in many of our policies and practices, including our Corporate Governance Guidelines, Codes of Ethics for our associates, senior financial officers and Board members, Environmental Policy Statement, Human Rights Statement and Supplier Code of Conduct. Our Code of Ethics outlines the values and principles we agree to embody, maintain and protect, and provides guidance to help us make sound decisions and perform our duties ethically and responsibly. If unethical conduct is suspected, we encourage associates to speak up and report it through a variety of channels, including Bread Financial’s Ethics Helpline, which is operated by an independent third-party and available 24/7 to all stakeholders.

We continue to embed sustainability into our ERM program, risk assessment and audit process. Our robust ERM program helps ensure we maintain strict control of data security to safeguard the privacy of our customers and brand partners and comply with all applicable laws and regulations governing our business. Our risk management teams coordinate with subject matter experts throughout the business to identify, monitor and mitigate material risks. These teams maintain disciplined testing programs and provide regular updates to the Board. We leverage sophisticated encryption configurations and cybersecurity technologies on our systems, devices and third-party connections and further review vendor encryption to ensure proper information security safeguards are maintained.

 

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LOGO    Empowering Customers

Customers

 

Bread Financial creates opportunities for our customers through digitally-enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Our digital offerings and market-leading payment, lending and saving solutions are relevant across generational segments and provide flexibility to meet consumers’ evolving payment needs. Our strategy is rooted in driving best-in-class experiences and building trust through choices that offer ease to customers, to both meet them where they are and provide solutions to help them on their financial journeys.

Creating a seamless, secure and value-added customer experience is critical to the success of our financial services business. We consistently monitor and gather real-time customer insights and feedback across customer financial journeys to ensure our services match our standards. We leverage these insights to better understand, anticipate and respond to the needs of both our customers and associates. Our goal is to consistently create personalized and effortless experiences across all channels.

Bread Financial recognizes that we are uniquely qualified to help promote financial wellness and help our customers, associates and communities meet their financial goals. We empower people by providing education and training, expanding access to financial literacy tools, supporting community programs, and

exercising fair and responsible banking. We are an active member of Financial Health Network, an organization of business leaders, policy makers and innovators working together to improve financial health for everyone. Helping individuals make informed decisions that allow them to thrive financially is part of our mission at Bread Financial.

Strategic vision for financial wellness:

Design and deliver solutions that support and improve financial wellness for all.

Bread Financial continues to build out a comprehensive financial wellness platform to deliver content and tools that support our customers and associates in their decision-making. In 2023, we launched the Financial Education Hub on breadfinancial.com with 50+ articles on a wide range of personal finance topics. One of our brand partners is linking their site to the Hub and rewarding customers for educating themselves through the articles.

We were certified as a Center of Excellence by BenchmarkPortal for the quality of our customer service operations for the 18th time since 2003. BenchmarkPortal awards this designation to customer service contact centers that rank in the top 10% of those surveyed, demonstrating superior performance on both cost- and quality-related metrics compared with industry peers.

 

 

LOGO    Engaging our Associates

Associates

 

As of December 31, 2023, we employed approximately 7,000 associates worldwide, with the majority concentrated in the United States. We prioritize transparency and open communication with our associates, continuously listening and acting on their feedback, including through our annual Associate Survey, more frequent pulse surveys and other communications. We maintain a culture of engagement, working to recognize and reward our associates through various initiatives and recognition platforms that help drive retention.

As of December 31, 2023, approximately 63% of our total workforce and 44% of our senior leaders were female, while approximately 44% of our total workforce and 15% of our senior leaders were minorities, respectively.

We leverage our “Empowered to Thrive” associate value proposition to consistently deliver personalized and fulfilling experiences for our associates. The framework aligns with our vision, mission, values and brand promise to our customers.

 

 

 

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Our “Empowered to Thrive” Associate Value Proposition:

 

 

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We recognize that associates in good health are more likely to excel in their roles, stay engaged, and positively impact their communities. That’s why we provide exclusive access to LivingWell, our award-winning holistic wellbeing program. LivingWell offers straightforward, inclusive, and affordable solutions tailored to meet associates wherever they are on their wellness journey. By connecting associates and their families with resources that support their overall wellbeing, LivingWell enhances financial confidence and allows them to thrive.

2023 Recognition of Our Associate Wellness Efforts:

 

Ragan Workplace Wellness Award in financial wellness for providing resources and programs designed to help associates and their families improve their financial confidence.   Healthy KC Platinum Level Certification – the highest level of distinction – from the Greater Kansas City Chamber of Commerce for demonstrating a commitment to associate well-being.   Gold-level recognition from the Healthy Business Council of Ohio for demonstrating a commitment to offering programs and resources that support associate well-being.

At Bread Financial, we embrace and promote diversity, equity and inclusion to create a sense of belonging, drive value for all stakeholders and accelerate responsible, sustainable growth. We strive to build an inclusive culture that attracts and values diversity of thought, experience, background, skills and ideas. We believe our people are our most important asset and we are at our best when we embrace the diverse perspectives of our associates, clients, customers and communities.

To reflect our commitment to creating an inclusive workplace, we renamed the function to “Diversity, Equity, Inclusion & Belonging” in 2023. Our efforts are coordinated through the DEIB Office, with dedicated leadership and a growing Council. The DEIB Council is comprised of associates and leaders from across the business. The diversity leader reports to our Chief People & Culture Officer, a direct report of our CEO. The Board Compensation & Human Capital Committee oversees human capital management including DEIB.

 

 

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Actions supporting our commitment include the integration of DEIB with aligned priorities that extend beyond our workplace, to include our brand partners, customers, suppliers and the community. We continue to expand our foundational training around conscious inclusion for all associates and leaders, and introduced a new DEIB training for senior leaders called “Evolution.” This program examines our Company’s mission, vision and behaviors through the lens of DEIB aiming to drive the growth of our business. Our entire Executive Leadership Team underwent unconscious bias awareness training, and new tools were introduced in our recruiting and hiring practices to further improve our processes in this area.

Notable 2023 accolades include:

 

  For the fifth consecutive year selected for the Bloomberg Gender-Equality Index, which distinguishes companies committed to
   

transparency in gender reporting and advancing women’s equality

 

  Newsweek’s Greatest Workplaces for Diversity
 

 

At Bread Financial, we are committed to supporting our communities by increasing our business with local suppliers that are minority-owned and small businesses. Our Supplier Diversity Program ensures diverse suppliers have fair and equal opportunities to be included in our sourcing and procurement process. We seek to build mutually-beneficial relationships that create value for our customers, our brand partners and our Company.

We hired a full-time Supplier Diversity and Sustainable Sourcing associate in 2023 and added new tools and infrastructure to lay the foundation for partnering with competitive, highly qualified diverse suppliers throughout our supply chain.

The Business Resource Groups (BRGs) at Bread Financial play a vital role in advocating for our Supplier Diversity Program both within the Company and with external stakeholders. Our procurement team works closely with the BRGs to exchange ideas and resources, as well as to pinpoint internal opportunities and identify potential diverse suppliers.

Bread Financial proudly supports a host of associate-led BRGs that provide our colleagues with an authentic experience. Our BRGs are empowered to develop and lead initiatives aligned with our sustainability strategy. We have eight chartered BRGs that celebrate distinct dimensions of diversity and help cultivate a culture of inclusion. In 2023, we added the New Associate Connect BRG, in response to feedback gathered from our associate engagement surveys. In addition to our BRGs, we also have an associate-driven Environmental Committee, which focuses on environmental education, sustainability, and conservation best practices, and a Sustainability and Community Engagement Committee, which activates our annual giving campaigns and volunteer initiatives.

 

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LOGO    Protecting the Planet

Environment

We have a role to play in protecting and preserving our planet, and we are committed to addressing environmental risks by adopting sustainable practices throughout our business, including identifying and assessing financial risks associated with climate change. As such, work is underway to identify and integrate low-carbon solutions into product and service offerings while reducing our environmental impacts through resource efficiency. In 2023 we were recognized by USA Today as one of America’s Climate Leaders.

Our approach to environmental management includes measures to reduce the waste we send to landfills, cultivating a more sustainable supply chain, and reducing our greenhouse gas (GHG) emissions. We also continuously seek innovative ways to boost efficiency, such as utilizing renewable energy sources and high-efficiency electrical equipment, including LED and motion detector lighting and high-efficiency HVAC units.

 

 

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We measure our GHG emissions (Scopes 1, 2, and 3) across our Company. We annually report to CDP and in 2023 issued our inaugural Task Force on Climate-related Financial Disclosures (TCFD) report based on 2022 data. We also partnered with our suppliers to evaluate ways to reduce GHG emissions through the procurement of low carbon, renewable plastic material for our credit card products. We continued to employ recycling bins for aluminum, plastic and paper in our Company’s physical offices; we also recycle toner cartridges, electronics equipment and batteries.

In 2023 we created an Earth Day-inspired campaign to incentivize cardholders to be more environmentally conscious and go paperless. This campaign was enhanced through our partnership with The Nature Conservancy, whereby we planted a tree for every cardholder who opted for paperless statements, which resulted in the planting of 150,000 trees.

Bread Financial’s Environmental Policy Statement is the foundation for our approach to environmental management and demonstrates our recognition of the risks that environmental challenges, including climate change, pose to our business and stakeholders. We have initiated measures to incorporate and institutionalize climate-related risks within our ERM program, and we remain dedicated to consistently identifying opportunities to enhance our oversight of these risks. Our Environmental Policy Statement outlines a range of actions to promote environmentally responsible practices covering all parts of our business operations, including engaging with internal and external stakeholders to inform our environmental priorities.

We will continue to engage with suppliers throughout our global value chain to measure and manage environmental impacts in order to conserve resources, reduce costs, and promote ethical sourcing practices. Supplier risk assessments are performed regularly, and we expect our suppliers to adhere to our Supplier Code of Conduct.

 

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LOGO    Creating Possibilities for Our Communities

Community

At Bread Financial, community-centric values are woven into our Company and culture. We’re committed to making bold, strategic investments that strengthen our communities, foster independence, and create opportunities for our associates to engage through volunteerism and supported giving. We work hard to align our community initiatives with our business priorities in a way that will be good for society and good for our business.

Notable 2023 highlights include:

 

 

$8 million in total community investment.

 

 

Awarded $1 million in grants to 21 charities focused on financial wellness.

 

 

Partnered with the Cleveland Cavaliers to support The Nature Conservancy through their “Plant a Billion Trees” program.

 

 

In 2023 My Possibilities opened the Employment Innovations School powered by Bread Financial. Additionally, Bread Financial invested $60,000 to support vocational training programs within the school for adults with intellectual or developmental disabilities.

 

 

Committed $7.5 million to the Pelion Ventures VIII Fund, a small business investment company that makes equity investments in early-stage technology companies. The Fund supports permanent job creation and retention, working closely with entrepreneurs to build innovative, enduring and job-creating companies.

 

 

Associates donated more than $1.0 million to non-profits through associate giving campaigns and programs.

 

 

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Our Board and Executive Leadership Team believe we have the responsibility and resources to enable positive change in building a more sustainable, resilient future for all those we serve. The Office of Sustainability works together with our associate-driven Sustainability & Community Relations Committee and our BRGs to activate our non-profit partnerships, coordinate and plan volunteer opportunities, and execute internal fundraising campaigns.

We define success in terms of our ongoing efforts to reduce inequalities through quality education, addressing food insecurities, good health and well-being, and empowering individuals in low to moderate income communities. Our charitable giving efforts include various foodbanks, Nationwide Children’s Hospital, The Nature Conservancy, My Possibilities, and Junior Achievement, among others.

We provide our associates with volunteer opportunities and encourage them to give back, which helps us advance one of our core values, to “Pay it Forward” in the communities where we live and do business. We provide a generous matching gifts benefit and a “dollars-for-doers” program, each of which create opportunities for our associates to give back in their own way.

Through Help Right Here, associates can help each other during times of financial hardship. Our associates can apply anonymously for a grant of up to $1,250 for assistance during events like critical illness or injury, domestic violence, or loss due to extreme weather. We match associate donations to the program and partner with other social services organizations to provide supporting services, such as temporary shelter, food and clothing, or other financial support. In 2023, 106 associates received a grant from Help Right Here.

Our commitment to our communities has always been core to our culture and values. We will continue to empower our communities through bold, strategic investments that create opportunity by reducing barriers to self-sufficiency.

We routinely engage with our stockholders to better understand their views on environmental, social and governance matters, carefully considering the feedback we receive and acting when appropriate. For more information, please visit our corporate website: https://investor.breadfinancial.com/sustainability/our-strategy

 

 

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Proposal 1:

Election of Directors

 

         
        

 

 

Our Nominating & Corporate Governance Committee evaluated and recommended to our Board of Directors, and our Board has nominated, the following nine individuals, Ralph J. Andretta, Roger H. Ballou, John J. Fawcett, John C. Gerspach, Jr., Rajesh Natarajan, Joyce St. Clair, Timothy J. Theriault, Laurie A. Tucker and Sharen J. Turney, for election as a director, each to hold office for a term of one year until the annual meeting of stockholders in 2025 and until his or her respective successor is duly elected and qualified. With the exception of Mr. Fawcett, each of the director nominees currently serves on our Board of Directors. Mr. Fawcett was recommended to the Nominating & Corporate Governance Committee by a third-party search firm.

The Nominating & Corporate Governance Committee and the Board of Directors determined that each nominee brings a strong and unique background and set of skills to our Board of Directors, enhancing, as a whole, our Board’s competence and experience in a variety of areas, including executive management and board service, internal controls and corporate governance, financial and accounting acumen, digital technology, data security and privacy, an understanding of the industries in which we operate, including financial institutions and related risk management and regulatory compliance, as well as risk assessment and management. Specifically, in nominating these nine directors for election at our 2024 annual meeting of stockholders, consideration was given to such directors’ past service on our Board of Directors and its committees, as applicable, and the information illustrated in our skills matrix and discussed in each of such directors’ individual biographies set forth below. Our Board of Directors recommends that our stockholders vote in favor of each of these director nominees.

 

         

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   The Board of Directors recommends that stockholders vote FOR the election of each of the nine director nominees.

 

 

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Skills Matrix and Description of Director Knowledge, Skills and Experience:

 

 

The matrix below provides information regarding our nominees’ knowledge, skills and experience that are most relevant in light of our Company’s business, long-term strategies and risks. Additional description regarding each of these categories is available in the key following this matrix. Our nominees represent a broad range of backgrounds and experience, and each nominee possesses numerous other competencies not identified below. The fact that a nominee is not designated as having a particular attribute does not indicate that the nominee does not possess that attribute or would not be able to make a meaningful contribution to the Board’s decision-making or oversight in that area. Demographic information regarding our nominees, including diversity, is also included in the matrix.

 

 

KNOWLEDGE, SKILLS & EXPERIENCE

    LOGO       LOGO       LOGO       LOGO       LOGO       LOGO       LOGO       LOGO       LOGO  

Accounting/Auditing/Risk Management

                                                     

Business Operations

                                                     

CEO/Executive Leadership

                                                     

Corporate Governance/Ethics

                                                               

Corporate Finance/Capital Management

                                                             

Financial Expertise/Literacy

                                                     

Human Capital/Compensation

                                                       

Independence

                                                       

Information Technology/Cybersecurity/Privacy

                                                           

International Operations

                                                     

Mergers & Acquisitions

                                                             

Other Public Company Board Experience

                                                             

 

 Relevant Industry 

 Experience 

 

 

Banking/Financial Services

                                                         
 

Business Services

                                                       
 

Data Processing

                                                                   
 

e-Commerce/Digital

                                                           
 

Loyalty/Marketing

                                                               
 

Regulated Industry

                                                         
 

Retail

                                 

DEMOGRAPHICS

 

RACE/ETHNICITY (per the U.S. Census)

 

African American/Black

                                                                       

American Indian/Alaska Native

                                                                       

Asian

                                                                     

Native Hawaiian/Pacific Islander

                                                                       

White

                                                       

Other

                 

GENDER

 

Male

                                                           

Female

                                                                 

AGE (as of May 14, 2024)

    63       73       65       70       54       65       63       67       67  

BOARD TENURE (years served as of May 14, 2024)

    4       23       0       4       4       1       8       9       5  

OTHER PUBLIC BOARDS (serving on as of March 20, 2024)

    0       0       0       0       1       0       0       1       1  

 

 

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ACCOUNTING / AUDITING /
RISK MANAGEMENT

As a public company, our complex accounting and financial reporting functions are subject to a rigorous program of controls and procedures and our Board plays an important role in oversight of our robust audit and enterprise risk management organizations. Directors with experience in these areas are critical to evaluating and providing effective oversight of our consolidated financial statements and financial reporting and our management of the risks inherent in our business operations.

   

LOGO

 

CORPORATE FINANCE / CAPITAL MANAGEMENT

Our corporate finance activities include debt financing transactions, debt and equity market transactions and stock repurchase programs. We allocate capital in various ways to run our operations, grow our business and return value to stockholders. Director experience in these areas is important for effective oversight of our Company’s financial affairs and capital planning and management.

       

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BUSINESS OPERATIONS

Our business is complex, employing approximately 7,000 associates worldwide and using sophisticated technologies to provide tech-forward payment, lending and saving solutions. Directors with “hands-on” experience developing and implementing operating plans and business strategies at companies with similarly sophisticated business operations have a practical understanding of how such organizations operate in increasingly sophisticated and disruptive competitive environments.

   

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FINANCIAL EXPERTISE / LITERACY

Our business involves complex financial transactions, accounting and reporting requirements. Directors with an understanding of finance and financial reporting processes are able to effectively monitor and assess our operating and strategic performance and ensure accurate financial reporting and robust controls. Substantially all of our nominees are financially literate and two of our nominees satisfy the “accounting or related financial management expertise” criteria set forth in the New York Stock Exchange listing standards.

       

LOGO

 

CEO / EXECUTIVE LEADERSHIP

Executive leaders have an understanding of organizations and the drivers of individual and team growth and development. Directors with experience serving as a CEO or senior executive enhance the Board’s perspective of our organization’s operations and challenges.

   

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HUMAN CAPITAL / COMPENSATION

The success of our enterprise depends in part on our ability to attract, retain and develop top leaders and a high-performing workforce in markets that are highly competitive for available talent. Directors who have board-level experience with public company executive compensation and broad-based incentive planning, or who have managed or overseen the human resources/compensation function at an operating company help position our Company for success in these areas.

       

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CORPORATE GOVERNANCE / ETHICS

We are an ethics-driven organization, and our Board – and in particular the Nominating & Corporate Governance Committee – provides a foundation for and oversight of our integrity-based culture. Our Board’s good governance practices and our Company’s focus on ESG matters and sustainability benefit from directors who are well-informed with respect to today’s dynamic governance and ethics environment and who have experience serving on the nominating & corporate governance or comparable committees of other boards.

   

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INDEPENDENCE

Independent directors are uniquely situated to provide unbiased oversight of our management and to work with our senior leaders to develop our Company’s strategic plans. Our Board currently consists of, and if all of the director nominees are elected at the annual meeting, will continue to consist exclusively of independent directors, other than the CEO. All directors currently serving on the Board’s standing committees are independent, and if all of the director nominees are elected at the annual meeting, each of those committees will continue to be populated exclusively by independent directors.

 

 

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INFORMATION TECHNOLOGY / CYBERSECURITY / PRIVACY

Our tech-forward business depends on the effective use of complex information technology systems, the safeguarding of data from cybersecurity risks and the protection and use of consumer data in accordance with applicable privacy regulations and good stewardship practices. Directors with experience implementing or overseeing sophisticated technology and technology strategies, the management and mitigation of cybersecurity and information technology risks and compliance with privacy regulations help ensure proper risk management and oversight of these important drivers of our business.

   

LOGO

 

MERGERS & ACQUISITIONS

We have historically made acquisitions and dispositions and may continue to do so in the future. Board members with experience in material M&A transactions enhance the decision-making underlying strategic M&A activities and ensure informed oversight of the processes attendant to completing complex transactions.

       

LOGO

 

INTERNATIONAL OPERATIONS

While our business operations are currently primarily operated in the United States, we have associates and offices in countries located outside of the United States, principally in India, and may expand international operations at some point in the future. The quality of our Board’s oversight and strategic guidance is enhanced by directors whose understanding of diverse business environments, economic conditions and cultures has been informed by service as a director or senior leader at one or more companies with international operations.

   

LOGO

 

OTHER PUBLIC COMPANY BOARD EXPERIENCE

Public companies must comply with a variety of complex accounting, disclosure and other compliance obligations, and public company boards have significant oversight and other duties. Directors with experience serving on the boards and board committees of other public companies understand public company reporting responsibilities, corporate governance trends and practices and other issues commonly faced by public companies, and have insight into board operations, board/management relations, agenda setting, succession planning and other board duties and activities. Our Corporate Governance Guidelines include limits on the number of other public company boards and audit committees on which our directors may serve.

 

 

 

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RELEVANT INDUSTRY EXPERIENCE

Our Nominating & Corporate Governance Committee uses a skills matrix to identify the diverse skills and experience our Board needs to address the dynamic environment in which we operate our business. Directors with experience in industries in which we or our customers operate provide us with a better understanding of the challenges and opportunities facing our business

 

  

 

 

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2024 Director Nominees and Proposed Committee Memberships:

 

 

 

 

 

    

 

   Committee Membership

Name

   Independent    Audit    Compensation & HC    N&CG    Risk &
Technology

Ralph J. Andretta

    

 

    

 

    

 

    

 

    

 

Roger H. Ballou (Chair)

             

 

    

 

John J. Fawcett

          

 

       

 

John C. Gerspach, Jr.

      Chair     

 

    

 

  

Rajesh Natarajan

       

 

    

 

     

Joyce St. Clair

       

 

       

 

  

Timothy J. Theriault

          

 

    

 

   Chair

Laurie A. Tucker

       

 

      Chair     

 

Sharen J. Turney

       

 

   Chair        

 

 

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AGE

 

63

 

 

DIRECTOR SINCE

 

2020

 

 

COMMITTEES:

None

 

  

 

Ralph J. Andretta    PRESIDENT  |  CEO, BREAD FINANCIAL HOLDINGS, INC.

   

 

Experience and Qualifications

 

• President and Chief Executive Officer of Bread Financial since February 2020

 

• Managing Director and Head of US Cards for Citigroup from 2011 to November 2019; and prior to that, he held positions in charge of loyalty, co-brand and product development

 

• Global affinity and international card executive at Bank of America from 2010 to 2011

 

• Served 18 years with American Express prior to 2010

 

• Member of Nationwide Children’s Hospital Board of Trustees from 2020 to present

 

• Member of Women’s Sports Foundation Board of Trustees from January 2023 to present

 

• Bachelor’s degree in accounting and finance from Siena College

 

      

Skills

 

   

• Mr. Andretta’s role as our current Chief Executive Officer provides a link to the Company’s management and a unique level of insight into the Company’s operations

 

• His financial, capital allocation and global operations experience together with his expertise in the banking and financial services, data and loyalty/marketing industries add important and relevant diversity to the Board’s overall mix of skills

 

• Our Board of Directors believes Mr. Andretta is well-qualified for re-election as a Director

 

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AGE

 

73

 

DIRECTOR SINCE

 

2001

 

CHAIR OF THE BOARD SINCE

 

2020

 

COMMITTEES:

Audit

Compensation & Human Capital

      

Roger H. Ballou   FORMER CEO AND DIRECTOR OF CDI CORPORATION

   

 

Experience and Qualifications

 

• Chief Executive Officer and a Director of CDI Corporation, a public company engaged in providing staffing and outsourcing services, from October 2001 until January 2011

 

• Self-employed consultant from October 2000 to October 2001, and since 2012

 

• Chairman and Chief Executive Officer of Global Vacation Group, Inc. from April 1998 to September 2000

 

• Senior advisor for Thayer Capital Partners from September 1997 to April 1998

 

• From April 1995 to August 1997, he served as Vice Chairman and Chief Marketing Officer, then as President and Chief Operating Officer, of Alamo Rent-a-Car, Inc.

 

• Bachelor’s degree from the Wharton School of the University of Pennsylvania

 

• MBA from the Tuck School of Business at Dartmouth

 

 

   

Skills

 

   

• Mr. Ballou’s qualifications include executive and/or board-level experience in the banking, financial services, business services, data and marketing industries and information technology, financial, global operations and M&A expertise and service on public company boards, including as a member or chair of public company Audit, Compensation, Nominating and Corporate Governance, Risk and Executive Committees

 

 

• Our Board of Directors values Mr. Ballou’s significant executive and public company Board experience as well as his Audit Committee financial expertise which, together with his global operations, banking and other relevant industry experience, strengthen and diversify the Board’s mix of skills, and the Board believes Mr. Ballou is well-qualified for re-election as a Director

 

     

Other Public Directorships in the Past Five Years

 

• Univest Financial Corporation

 Chair of the Compensation Committee

 Member of the Audit Committee, Risk Committee and Executive Committee

• RCM Technologies, Inc.

 Lead Independent Director

 Member of the Audit Committee and Nominating & Corporate Governance Committee

• Loyalty Ventures Inc.

 Chairman of the Board

 Member of the Compensation Committee and Corporate Governance and Nominating Committee

 

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AGE

 

65

 

NOMINEE FOR

DIRECTOR

 

 

COMMITTEES:

Audit

Nominating & Corporate Governance

(beginning after the annual meeting, if elected)

      

John J. Fawcett    

FORMER EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER OF CIT GROUP INC.

   

 

Experience and Qualifications

 

• Executive Vice President and Chief Financial Officer of CIT Group Inc. from April 2017 until its acquisition by First Citizens BancShares in January 2022

 

• Interim Chief Financial Officer of Citizens Financial Group, Inc. from December 2016 to March 2017

 

• Director of Rabobank (Utrecht-Americas Holding Company), a Dutch multinational banking and financial services company from 2016 to 2017, where he served as the chair of the Audit Committee

 

• Executive Vice President and Chief Financial Officer of Royal Bank of Scotland (RBS) Americas and Citizens Financial Group from January 2008 to April 2015

 

• Served in senior financial leadership positions with increasing responsibility at Citigroup Inc. from 1987 to 2007, including as Chief Financial Officer, Global Transactions Services and Chief Financial Officer, Commercial Markets Business

 

• KPMG senior audit manager from 1980 to 1987, specializing in banking and financial services audit engagements

 

• Bachelor’s degree in accounting and MBA from St. John’s University

 

 

   

Skills

 

   

• Mr. Fawcett’s qualifications include significant executive-level banking and financial services experience in all aspects of finance, including strategic planning, financial analysis, accounting, treasury management, tax, M&A, complex transactions and investor relations experience.

 

• Our Board of Directors believes Mr. Fawcett’s significant executive banking and financial expertise, particularly with respect to banking, financial, accounting, international operations and business operations will benefit our business and the Board’s overall mix of skills, making him well-qualified for election as a Director.

 

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AGE

 

70

 

DIRECTOR SINCE

 

2020

 

COMMITTEES:

Audit (Chair)

Risk & Technology

      

John C. Gerspach, Jr.     FORMER CFO OF CITIGROUP, INC.

   

 

Experience and Qualifications

 

• Self-employed consultant since March 2022

 

• Chief Financial Officer of Citigroup, Inc. from 2009 to 2019 and was employed by Citigroup, Inc. in various capacities of increasing experience and responsibilities since 1990

 

• Chief Financial Officer of Penn Central Industries Group from 1986 to 1990

 

• Comptroller of the Defense Contracting Group at ITT Corporation from 1980 to 1986

 

• Served in various roles with Arthur Andersen & Company at the beginning of his career

 

• Member of the Financial Accounting Standards Advisory Council (FASAC) from 2010 to 2013

 

• Bachelor’s degree in accountancy from the University of Notre Dame

 

• Certified Public Accountant in the State of New York from 1977 to 2019.

   

Skills

 

   

• Mr. Gerspach’s qualifications include executive-level experience in the banking and financial services industry for a global corporation, including roles in audit, accounting, risk management and international operations

 

• Our Board of Directors believes Mr. Gerspach’s expertise, particularly with respect to banking, financial, audit, risk management and global operations, will benefit our business and the Board’s overall mix of skills, making him well-qualified for re-election as a Director

 

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AGE

 

54

 

DIRECTOR SINCE

 

2020

 

COMMITTEES:

Nominating & Corporate Governance

Risk & Technology

      

Rajesh Natarajan

 

CHIEF PRODUCT AND STRATEGY OFFICER OF GLOBALIZATION PARTNERS

   

 

Experience and Qualifications

 

• Chief Product and Strategy Officer of Globalization Partners since March 2022

 

• Executive Vice President of Products and Engineering of RingCentral, Inc. from December 2020 to December 2021

 

• Executive Vice President and Chief Product and Technology Officer of Ancestry.com from February 2017 to November 2020

 

• Served in senior leadership positions with increasing responsibility in the areas of technology and product development at Intuit, Inc. from 2014 to 2017, including as Senior Vice President and Chief Information Security and Fraud Officer

 

• Served in senior leadership positions with increasing responsibility in the areas of technology and product development at PayPal Holdings, Inc. from 2006 to 2014, including as Vice President, Platform Engineering and Operations

 

• Served in various management positions with increasing responsibility in the area of technology from 1995 to 2006 with Sabre Holdings Corporation, including as an early member of the development team that founded Travelocity.com

 

• Bachelor’s degree in mechanical engineering from Jawaharlal Nehru Technology University in India

 

• Master’s degree in industrial engineering from Clemson University

 

 

   

Skills

 

   

• Mr. Natarajan’s qualifications include executive experience in roles requiring expertise in information technology, cybersecurity, engineering, operations and product development.

 

 

• Our Board of Directors believes Mr. Natarajan’s expertise, particularly with respect to business operations, technology development, information technology and cybersecurity, will benefit our business and the Board’s overall mix of skills, making him well-qualified for re-election as a Director.

 

   

Other Current Public Directorships

 

• HealthEquity, Inc.

 Member of the Cybersecurity and Technology Committee and Audit and Risk Committee

 

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AGE

 

65

 

DIRECTOR SINCE

 

2023

 

COMMITTEES:

Compensation & Human Capital

Risk & Technology

      

Joyce St. Clair

 

FORMER EXECUTIVE VICE PRESIDENT AND CHIEF HUMAN RESOURCES OFFICER OF NORTHERN TRUST CORPORATION.

   

 

Experience and Qualifications

 

• Executive Vice President and Chief Human Resources Officer of Northern Trust Corporation from July 2018 until her retirement in April 2022

 

• Served in senior leadership positions with increasing responsibility at Northern Trust Corporation since joining the firm in 1992, including as Executive Vice President and Chief Capital Management Officer from 2015 to 2018, as President of Enterprise Operations from 2014 to 2015, as President of Operations and Technology from 2011 to 2014, and as Chief Risk Officer from 2007 to 2011

 

• Served as an associate partner for Accenture prior to joining Northern Trust Corporation

 

• Appointed by President Obama to serve as a member of the advisory committee of the Pension Benefit Guaranty Corporation (PBGC) from 2016 until her term expired in 2019

 

• Bachelor’s degree from Indiana University, Kelley School of Business

 

• MBA from the Booth School of Business at the University of Chicago

 

 

   

Skills

 

   

• Ms. St. Clair’s qualifications include significant executive-level experience in the financial services industry, with expertise in global compliance, risk and control, regulatory relations, transaction processing, securities operations, technology, cyber security, regulatory capital and liquidity requirements, human capital operations and metrics and board governance.

 

• Our Board of Directors believes Ms. St. Clair’s financial expertise, particularly with respect to compliance, risk, regulatory relations, technology, cyber security, regulatory capital and liquidity requirements and human capital operations will benefit our business and the Board’s overall mix of skills, making her well-qualified for re-election as a Director.

 

LOGO

 

 

 

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AGE

 

63

 

DIRECTOR SINCE

 

2016

 

COMMITTEES:

Audit

Risk & Technology (Chair)

      

Timothy J. Theriault

 

FORMER EVP, GLOBAL CIO AND ADVISOR TO CEO OF WALGREENS BOOTS ALLIANCE, INC.

   

 

Experience and Qualifications

 

• Advisor to the Chief Executive Officer of Walgreens Boots Alliance, Inc. from June 2015 until November 2016

 

• Executive Vice President and Global Chief Information Officer of Walgreens Boots Alliance, Inc. from July 2014 to June 2015

 

• Served in senior leadership positions with increasing responsibility at Walgreen Co. from October 2009 to July 2014, including as Senior Vice President and Chief Information, Innovation and Improvement Officer

 

• Served in various executive and management positions with increasing responsibility in the area of information technology with Northern Trust Corporation from May 1991 to October 2009 and July 1982 to October 1989.

 

• Director of End User Computing and Advanced Technologies for S. C. Johnson & Son, Inc., from October 1989 to May 1991

 

• Current Director and a member of the Financial & Investment Committee and Compliance Committee of Wellmark Blue Cross and Blue Shield

 

• Former lead Director of the Depository Trust Clearing Corporation

 

• Bachelor’s degree from Illinois State University

 

• Completed the Harvard Business School advanced management program

 

 

   

Skills

 

   

• Mr. Theriault brings significant expertise in information technology and cybersecurity to our Board

 

• Together with his financial sophistication, banking, global operations, risk management and compensation experience gained as a senior executive in the financial services, health care and retail industries and service on public company Boards, including as a member of public

 

 

company Audit and Compensation Committees, Mr. Theriault’s expertise and experience broaden the Board’s skill set and enhance its ability to understand and oversee risk, including those associated with information technology, cybersecurity and bank regulatory matters

 

• The Board of Directors believes Mr. Theriault is well-qualified for re-election as a Director

   

Other Public Directorships in Past Five Years

 

• Vitamin Shoppe, Inc.

 

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AGE

 

67

 

DIRECTOR SINCE

 

2015

 

COMMITTEES:

Compensation & Human Capital

Nominating & Corporate Governance (Chair)

      

Laurie A. Tucker

 

FOUNDER AND CHIEF STRATEGY OFFICER OF CALADE PARTNERS LLC

   

 

Experience and Qualifications

 

• Founder and Chief Strategy Officer for marketing consultancy firm, Calade Partners LLC since January 2014

 

• Senior Vice President-Corporate Marketing of FedEx Services, Inc., a subsidiary of FedEx Corporation, a public company engaged in transportation, e-commerce and business services, from 2000 to 2013 and was employed by FedEx in various capacities of increasing experience and responsibilities since 1978

 

• Bachelor’s degree and an MBA from the University of Memphis

 

   

Skills

 

   

• Ms. Tucker’s qualifications include financial and compensation expertise, global operations experience and strong leadership skills developed as a public company Board member, including as a member of public company Audit, Compensation and Nominating and Corporate Governance Committees, and as a senior executive serving in various roles at a large multinational public company

 

 

• These credentials, together with her expertise and experience in e-commerce, retail, technology, customer service and corporate marketing, add significant value to the Board of Directors, making her well-qualified for re-election as a Director

   

Other Current Public Directorships

 

• Forward Air Corporation

 Chair of the Corporate Governance and Nominating Committee

 Member of the Executive Committee

 

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AGE

 

67

 

DIRECTOR SINCE

 

2019

 

COMMITTEES:

Compensation & Human Capital (Chair)

Nominating & Corporate Governance

      

Sharen J. Turney    FORMER CEO OF VICTORIA’S SECRET

   

 

Experience and Qualifications

 

• Chief Executive Officer of Russia-based jeans brand Gloria Jeans from November 2018 until November 2019

 

• Director of Sweden-based designer sock and underwear brand Happy Socks AB from January 2018 until November 2019

 

• President and Chief Executive Officer of Victoria’s Secret, a division of publicly-traded national retailer L Brands, Inc., from July 2006 until February 2016

 

• President and Chief Executive Officer of Victoria’s Secret Direct, the brand’s catalogue and e-commerce arm, from May 2000 until July 2006

 

• Served for 10 years in various executive roles including President and Chief Executive Officer of Neiman Marcus Direct, the direct marketing division of luxury brand retailer Neiman Marcus Group

 

• Served as an advisor to several retailers and technology companies

 

• Director of FULLBEAUTY Brands from July 2016 to September 2018

 

• Director of Nationwide Children’s Hospital, Inc., including as Chairman of the Board of its Research Institute, from 2012 to 2018

 

• Formerly served on the Baker Retailing Center Industry Advisory Board at Wharton School at the University of Pennsylvania

 

• Director of the University of Oklahoma Foundation, where she serves as the Chair of the Audit Committee and a member of the Investment Committee

 

• Bachelor’s degree from the University of Oklahoma

 

 

   

Skills

 

   

• Ms. Turney’s qualifications include executive and/or Board-level experience in the retail industry, including as an executive officer of a Fortune 500 fashion retailer, loyalty, marketing and digital/e-commerce expertise, global operations experience, service on public company Boards, including as a member of public company Compensation and Nominating and Corporate Governance Committees, financial expertise and executive

 

 

leadership at companies operating in industries relevant to our business

 

• Our Board of Directors believes Ms. Turney’s expertise, particularly with respect to her retail and digital/e-commerce marketing experience, will benefit our business and enhance our understanding of our customers’ businesses, making her well-qualified for re-election as a Director

 

   

Other Current Public Directorships

 

• Paycom Software, Inc.

 Member of the Compensation Committee and Nominating & Corporate Governance Committee

 

Other Public Directorships in the Past Five Years

 

• M/I Homes, Inc.

 

• Academy Sports and Outdoors, Inc.

 Member of the Compensation Committee and Nominating & Corporate Governance Committee

 

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Role of Proxies in Election of Directors

 

 

The persons named as your proxies will have full discretion to cast votes for other persons in the event any nominee is unable to serve. Our Board of Directors has no reason to believe that any nominee will be unable to serve if elected. In an uncontested election, if a quorum is present, directors are elected by a majority of the votes cast, at the meeting or by proxy. This means that the nine nominees will be elected if they receive more “For” votes than “Against” votes. In accordance with Section 3.3.1 of our bylaws, any nominee who is currently serving as a director and does not receive a majority of votes cast shall immediately tender his or her resignation for consideration by our Board of Directors. Our Board of Directors will then evaluate whether to accept or reject such resignation, or whether other action should be taken. The Board of Directors will publicly disclose its decision to accept or reject such resignation and its rationale within 90 days from the date of certification of the director election results.

 

 

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Executive

Officers

 

         
      

 

 

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Age: 63

 

Ralph J. Andretta   PRESIDENT | CHIEF EXECUTIVE OFFICER | DIRECTOR

 

 

 

 

 

Biographical Information

 

• Mr. Andretta’s biographic information appears under Proposal One: Election of Directors in this proxy statement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Age: 58

  Perry S. Beberman EXECUTIVE VICE PRESIDENT | CHIEF FINANCIAL OFFICER
 

 

 

 

Biographical Information

 

• Joined Bread Financial as Executive Vice President and Chief Financial Officer in July 2021.

 

• Served in various leadership roles with increasing responsibility at Bank of America from 2005 to June 2021, including as Senior Vice President and Finance Executive of Bank of America’s consumer and wealth management lending products from October 2019 to June 2021.

 

• Joined Bank of America following its acquisition of MBNA in 2005, where he had spent more than 17 years in leadership roles with increasing responsibility.

 

• Serves as a member of the Finance Committee, Governance Committee and Advisory Committee of Ronald McDonald House of Greater Delaware.

 

• Director of Reach Riverside Corp., where he serves as the Treasurer and Chair of the Finance Committee and a member of the Executive Committee and Strategic Planning Committee.

 

• Holds a Bachelor’s degree in business administration and an MBA from the University of Delaware.

 

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Age: 45

  Allegra S. Driscoll EXECUTIVE VICE PRESIDENT | CHIEF TECHNOLOGY OFFICER
 

 

 

 

Biographical Information

 

• Joined Bread Financial as Executive Vice President and Chief Technology Officer in January 2024.

 

• Came to Bread Financial from American Express where she served as SVP, Chief Information Officer of the Global Commercial Services Unit from April 2022 to January 2024 and SVP, Chief Information Officer of the Corporate Systems Unit and Head of Technology Strategy & Transformation from January 2020 to April 2022.

 

• Served in senior leadership positions with increasing responsibility at Credit Suisse from September 2010 to December 2019, including as the Managing Director, COO Global Markets Technology and IHC Technology during 2019.

 

• Served in various leadership positions with increasing responsibility at Goldman Sachs from May 2001 to July 2010.

 

• Member of the Advisory Board of the CTO Forum, a not-for-profit organization composed of senior technology executives, business leaders and academicians, focused on key technology issues and accelerating innovation across organizations.

 

• Director of Boscobel House and Gardens, a not-for-profit organization.

 

• Holds a Bachelor’s degree in computer science from Barnard College, Columbia University.

 

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Age: 59

  Valerie E. Greer EXECUTIVE VICE PRESIDENT | CHIEF COMMERCIAL OFFICER
 

 

 

 

Biographical Information

 

• Joined Bread Financial as Executive Vice President and Chief Commercial Officer in June 2020.

 

• Before joining Bread Financial, led the U.S. cards co-brand business at Citigroup, where Ms. Greer worked from September 2011 to April 2020.

 

• Served as the General Manager, Partnerships for JPMorgan Chase from 2006 to 2011.

 

• Served in senior leadership positions with increasing responsibility at HSBC from 1994 to 2006, including as the Executive Director of HSBC’s private label business from 2003 to 2006.

 

• Director of Ruling Our eXperiences, Inc., a girls not-for-profit organization where she serves as a member of the Development Committee.

 

• Holds a Bachelor’s degree from University of Manitoba and an MBA from the Kellogg School of Management at Northwestern University.

 

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Age: 50

 

Tammy M. McConnaughey EXECUTIVE VICE PRESIDENT, CHIEF CREDIT

 

                          RISK AND OPERATIONS OFFICER

 

 

 

 

Biographical Information

 

• Has served as Executive Vice President overseeing Operations and Credit Risk of Bread Financial since January 2021; originally joined the Company in 1992.

 

• Prior to her current role, Ms. McConnaughey served in increasingly senior leadership positions over her thirty-year tenure with the Company across collections, customer care, operations and credit risk.

 

• Director of Mid-Ohio Food Collective, a not-for-profit organization.

 

• Holds a Bachelor’s degree in business from Mount Vernon Nazarene University.

 

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Age: 62

 

Joseph L. Motes III EXECUTIVE VICE PRESIDENT | CHIEF ADMINISTRATIVE

 

                   OFFICER | GENERAL COUNSEL | SECRETARY

 

 

 

 

Biographical Information

 

• Has served as Executive Vice President, Chief Administrative Officer, General Counsel and Secretary of Bread Financial since June 2019; originally joined the Company as General Counsel and Secretary in July 2015.

 

• Before joining Bread Financial, Mr. Motes was a partner at Akin, Gump, Strauss, Hauer & Feld, LLP, where he worked for nearly 20 years and was the lead relationship partner for the Company.

 

• Holds a Bachelor’s degree in geology from Trinity University and a J.D. from Southern Methodist University Dedman School of Law, where he served as Editor-in-Chief of the SMU Law Review.

 

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Age: 51

  J. Bryan Campbell SENIOR VICE PRESIDENT | CHIEF ACCOUNTING OFFICER
 

 

 

 

Biographical Information

 

• Joined Bread Financial as Senior Vice President and Chief Accounting Officer in November 2021.

 

• Came to Bread Financial from American Express Company, where he served as Vice President of Finance within the Controllership leadership team from February 2017 to November 2021, Vice President of Finance – Head of External Reporting from March 2015 to February 2017, and in other roles of increasing responsibility from August 2007 to March 2015.

 

• Served as Assistant Controller at General Electric Company from 2006 to 2007.

 

• Held various strategic and finance roles at Credit Suisse, Deloitte and KPMG from 1995 to 2006.

 

• Holds a Bachelor’s degree in accounting and finance from the University of Colorado at Boulder and is a Certified Public Accountant in the state of Colorado.

 

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Compensation &

Human Capital

Committee Report

 

         
      

The Compensation & Human Capital Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation & Human Capital Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

This report has been furnished by the members of the Compensation & Human Capital Committee.

Roger H. Ballou

Joyce St. Clair

Laurie A. Tucker

Sharen J. Turney, Chair

 

 

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Compensation

Discussion & Analysis

         
      

 

 

Named Executive Officers

 

 

This Compensation Discussion and Analysis (CD&A) describes the material compensation elements for each of Bread Financial’s named executive officers (NEOs) and provides an overview of the compensation policies and practices applicable to our NEOs.

 

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Ralph Andretta

President and CEO

  Perry Beberman

Executive VP, Chief
Financial Officer

  Valerie Greer

Executive VP, Chief
Commercial Officer

  Tammy
McConnaughey

Executive VP,

Chief Credit Risk and
Operations Officer

  Joseph Motes

Executive VP, Chief

Administrative Officer,

General Counsel and

Secretary

 

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Defined Terms in this CD&A

 

• AIC —

  Annual Incentive Compensation

• CHCC —

  Compensation & Human Capital Committee

• DEIB —

  Diversity, Equity, Inclusion and Belonging

• ERM —

  Enterprise Risk Management

• ESG —

  Environmental, Social & Governance

• LTIC —

  Long-Term Equity Incentive Compensation

• NCL —

  Net Credit Loss

• NEO —

  Named Executive Officer

• NPS —

  Net Promoter Score

• PBRSU —

  Performance-Based Restricted Stock Unit

• PPNR —

  Pretax Pre-provision Earnings

• ROE —

  Return on Equity

• RSU —

  Restricted Stock Unit

• rTSR —

  Relative Total Stockholder Return

• SLAs —

  Service Level Agreements

• TBRSU —

  Time-Based Restricted Stock Unit
 

 

 

 

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Company Highlights and 2023 Focus Areas

 

 

 

Overview

Since the beginning of 2020, when our current Chief Executive Officer joined the Company and began building our current executive leadership team, we have significantly improved our business and positioned the Company for future success, including through:

 

   

streamlining the Company into a pure-play financial services institution, focused on providing simple, personalized payment, lending and saving solutions, and rebranding to Bread Financial;

 

   

recruiting and retaining top talent from other large financial institutions, bringing a depth of experience and success in navigating evolving economic and regulatory environments;

 

   

diversifying our product mix through growth of our co-brand credit card programs, the introduction of new proprietary credit cards and the launch of Bread PayTM product offerings, while leveraging our legacy expertise in the private label credit card business;

 

   

winning new brand partnerships with AAA, Dell Technologies, the New York Yankees, the NFL and other prominent brands, and, just as importantly, investing in and growing the businesses of our existing brand partners;

 

   

making strategic investments in digital and technology, in order to improve our core capabilities and deliver exceptional digital and mobile experiences for our customers;

 

   

fortifying our balance sheet and dramatically improving our capital ratios;

 

   

significantly decreasing our parent debt levels, while also increasing our access to the capital markets by becoming a rated issuer with the major credit ratings agencies;

 

   

diversifying our funding mix, including through the expansion and sophistication of our direct-to-consumer deposits programs; and

 

   

enhancing our engagement and transparency with our stockholders and other stakeholders.

2023 Focus Areas and Achievements

For 2023, our areas of focus included the following, which we shared with our stockholders early in 2023:

 

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Despite the headwinds of challenging macroeconomic conditions and an uncertain regulatory environment, we achieved significant progress in 2023 against these key focus areas.

 

 

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