Citizens Financial Group just placed a pair of golden handcuffs on two executives who could one day lead the bank.
14th largest bank with total assets of $222 billion. additional bonuses for retention head of consumer banking Brendan Coughlin and chief financial officer John Woods.
They are in the race to replace current CEO and Chairman Bruce Van Saun, the Rhode Island-headquartered bank said this week. But he has not announced a retirement date and the company has not signaled his departure.
Accordingly, the citizens’ board on Thursday gave Coughlin a mixed cash and stock award valued at $12 million and Woods a $7 million award. The awards are a mixture of restricted stock awards, performance awards and cash.
Here’s the catch: Income shares and restricted shares won’t vest for another three years. And Coughlin will have to pay back $2 million and Woods will have to pay $1 million (the size of their respective cash bonuses) if they resign or are fired within three years. The “management succession awards” are intended to keep Coughlin and Woods in place and off the market until 2027.
“Given the strength of our leadership team and success in transforming our business, our leaders are highly attractive in the marketplace,” Citizens Council said this week. “In addition, the board of directors considered it critical for the company to retain key executives who have been identified as potential candidates for the position of CEO in the medium term.”
The different compensation levels were intentional and designed to ensure both executives had comparable levels of ownership of the bank’s shares, the company said. Coughlin joined Citizens in 2020 and has less outstanding capital than Woods, who took over in March 2017. The bonuses exceed the $3.9 million the bank paid Coughlin and the $4.3 million to Woods in 2023. company disclosure shows.
Van Saun, 66, has been the bank’s chairman and chief executive since 2013 and heads the bank’s executive committee.
Citizens refused to comment on the situation beyond financial statements.