8-K: First Citizens BancShares Appoints Gregory L. Smith as Chief Information & Operations Officer

First Citizens BancShares has appointed Gregory L. Smith as its new Chief Information & Operations Officer, effective January 9, 2023.

Summary

• First Citizens BancShares has appointed Gregory L. Smith as Chief Information & Operations Officer for both BancShares and its subsidiary, First Citizens Bank.
• Mr. Smith's responsibilities include the strategic enablement of technology, operations, cyber, and data functions across the enterprise.
• He joins from TD Bank Financial Group, where he held various leadership roles, including head of Transformation and Corporate Operations.
• Mr. Smith's employment terms include an annual base salary of $600,000, a $100,000 signing bonus, and long-term cash payments of $100,000 each in 2025, 2026, and 2027.
• He is also eligible for performance bonuses of up to $1.8 million each for the 2024 and 2025 performance years.
• Mr. Smith will participate in the Long-Term Incentive Plan with a target award equal to 300% of his base salary.
• A relocation package includes a $50,000 allowance and coverage of closing costs and moving expenses.
• The appointment was announced on January 16, 2024, and is effective from January 9, 2023.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the appointment of a highly qualified executive and the company's focus on growth and innovation. The compensation package is also a positive indicator.

Positives

• The appointment of Gregory L. Smith brings extensive experience in operations, transformation, and technology leadership to First Citizens.
• The newly created position of Chief Information & Operations Officer highlights the company's focus on technology and operational excellence.
• The compensation package, including base salary, bonuses, and long-term incentives, is designed to attract and retain top talent.
• The relocation package supports Mr. Smith's transition to the Raleigh, NC area.

Negatives

• The signing bonus and relocation allowance are subject to repayment on a pro rata basis if Mr. Smith's employment terminates before January 8, 2026, under certain conditions.
• The long-term cash payments and performance bonuses are contingent on Mr. Smith's active employment on the applicable payment dates.

Risks

• The success of Mr. Smith's appointment depends on his ability to effectively implement strategic technology and operational changes.
• There is a risk of repayment of the signing bonus and relocation allowance if Mr. Smith leaves the company before January 8, 2026, under certain circumstances.
• The performance bonuses are contingent on achieving pre-established project and strategic objectives, which may not be guaranteed.

Future Outlook

The company aims to enable business capabilities to continue driving excellence and innovation with the appointment of Mr. Smith.

Management Comments

• Frank B. Holding, Jr., Chairman and CEO, stated that Mr. Smith's extensive background and experience make him well-suited for the role.
• Mr. Holding also mentioned that it is critical to enable business capabilities to continue driving excellence and innovation as First Citizens continues to grow and evolve.

Industry Context

The appointment of a Chief Information & Operations Officer reflects the increasing importance of technology and operations in the financial services industry, as banks seek to enhance efficiency and innovation.

Comparison to Industry Standards

• The compensation package for Mr. Smith, including a base salary of $600,000 and potential bonuses of up to $1.8 million, is competitive with similar executive roles at other large financial institutions.
• For example, comparable roles at banks like Truist, PNC, and US Bancorp often include similar base salaries and performance-based incentives.
• The focus on technology and operations is consistent with industry trends, as banks invest heavily in digital transformation and cybersecurity.
• First Citizens' asset base of over $200 billion places it among the top 20 US financial institutions, comparable to regional and national banks like Regions Financial and KeyCorp.

Management Changes

Stakeholder Impact

• Shareholders may view the appointment positively, as it signals a commitment to technology and operational excellence.
• Employees may benefit from the leadership and expertise of Mr. Smith.
• Customers may experience improved services and innovation as a result of the new leadership.

Next Steps

• Mr. Smith will assume his responsibilities as Chief Information & Operations Officer.
• He will work on the strategic enablement of technology, operations, cyber, and data functions.
• The Joint Compensation, Nominations and Governance Committee of the Boards will approve his participation in the Long-Term Incentive Plan.

Key Dates

Keywords

Chief Information & Operations Officer, CIOO, executive appointment, technology, operations, First Citizens BancShares, First Citizens Bank, Gregory L. Smith, financial services, banking