DEF: KeyCorp Sets 2026 Annual Meeting Agenda, Proposes New Equity Plan

KeyCorp announces its 2026 Annual Meeting of Shareholders, seeking approval for director elections, auditor ratification, executive compensation, and a new equity compensation plan, following a strong 2025 performance.

Summary

• KeyCorp's 2026 Annual Meeting of Shareholders will be held virtually on Thursday, May 14, 2026, at 8:30 a.m., ET.
• Shareholders will vote on the election of 14 directors, ratification of Ernst & Young LLP as independent auditors for fiscal year 2026, advisory approval of executive compensation (say-on-pay), and approval of the KeyCorp 2026 Equity Compensation Plan.
• The company reported a strong 2025, achieving record revenue, growing commercial clients by 2%, commercial loans by 6% (C&I loans by 9%), and average client deposits and relationship households by 2%.
• Investment banking and debt placement fees had their second-best year, and assets under management reached a record $70 billion as of December 31, 2025.
• Full-year record revenue was up 16% year-over-year, net interest income up 23%, and fees up 7.5%. Pre-provision net revenue grew by 44% compared to 2024.
• The company ended 2025 with a Common Equity Tier 1 (CET1) ratio of 11.8% and a Marked CET1 ratio of 10.4%.
• KeyCorp repurchased $200 million in shares in Q4 2025 and plans over $1.2 billion in repurchases in 2026.
• The net charge-off ratio remained low at 41 bps in 2025.
• The 2023 Performance Awards for Named Executive Officers (NEOs) vested at 0% due to financial performance falling below threshold levels for Adjusted Cumulative EPS and relative Return on Tangible Common Equity (ROTCE) for the 2023-2025 period.
• The 2025 Annual Incentive Plan performed at 123% of target, but the Compensation Committee exercised discretion to reduce funding to 120%.
• The 2025 say-on-pay proposal received approximately 63% shareholder support, a meaningful decrease from the prior year's 89%. In response, the company made several refinements to its executive compensation program, including no one-time awards in 2025 and increased focus on pre-set financial goals in the annual incentive plan.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a generally positive filing, highlighting strong 2025 financial performance and proactive responses to shareholder feedback on compensation, despite the 0% vesting of 2023 performance awards and lower say-on-pay support.

Positives

• Record revenue in 2025, up 16% year-over-year (adjusted).
• Net interest income up 23% year-over-year.
• Fees up 7.5% year-over-year.
• Pre-provision net revenue grew by 44% compared to 2024 (adjusted).
• Strong client momentum: commercial clients grew by 2%, commercial loans by 6% (C&I loans by 9%), average client deposits and relationship households grew by 2%.
• Second best year in history for investment banking and debt placement fees.
• Record assets under management of $70 billion as of December 31, 2025.
• Peer-leading capital position with CET1 ratio of 11.8% and Marked CET1 ratio of 10.4%.
• Repurchased $200 million shares in Q4 2025, with planned repurchases of over $1.2 billion in 2026.
• Low net charge-off ratio at 41 bps in 2025.
• Commitment to achieve 15%+ return on tangible common equity and 3.25%+ net interest margin by year-end 2027.
• Strong corporate governance practices, including annual director elections, majority voting, independent lead director, and active shareholder engagement.
• Expanded shareholder outreach and refinements to executive compensation in response to say-on-pay feedback, including no one-time awards in 2025.

Negatives

• The 2023 Performance Awards for NEOs vested at 0% due to financial performance falling below threshold levels for Adjusted Cumulative EPS and relative Return on Tangible Common Equity (ROTCE) for the 2023-2025 performance period.
• The 2025 say-on-pay proposal received approximately 63% shareholder support, a meaningful decrease from the prior year's 89% and the historic average of over 92% (2020-2024).
• The Compensation Committee exercised discretion to reduce the 2025 Annual Incentive Plan funding from a calculated 123.2% to 120%, reflecting slightly below target performance on Enterprise Priorities.
• Underperformance on earnings and ROTCE in the 2023-2025 period was attributed to Key's balance sheet position and actions taken to preserve capital, including intentionally shrinking the balance sheet, and regional banking failures in March 2023.

Risks

• Enterprise-wide risks, including credit risk, market risk, liquidity risk, model risk, operational risk, technology risk (including related to cybersecurity and AI), compliance risk, reputation risk, strategic risk, and climate and sustainability risks.
• Compensation-related risks, as the company designs its compensation programs to appropriately balance risk and reward and monitors them to ensure they do not inadvertently create incentives that encourage excessive risk-taking.
• Cybersecurity and AI risks, as technology and innovation are central to the business, and delivering secure products and services is paramount.
• Regulatory environment risks, as a regulated financial services institution operating in a complex regulatory landscape.
• Market disruption risks, with the Compensation Committee shifting to absolute Adjusted ROTCE for 2026 Performance Awards due to 'relative disruption in Key's Peer Group due to increased M&A and transactional activity that may limit the usefulness of relative comparisons'.

Future Outlook

The company remains very optimistic about its ability to realize KeyCorp's earnings potential and deliver value to shareholders and stakeholders. It is making substantial progress toward its commitment to achieve a 15%+ return on tangible common equity and 3.25%+ net interest margin by year-end 2027. The company is committed to a more meaningful return of capital in 2026, with planned share repurchases of over $1.2 billion. The 2025 Annual Incentive Plan funding rate of 120% reflects positioning for continued sound, profitable growth in 2026. The 2026 Long-Term Incentive Plan metrics (Adjusted ROTCE and Cumulative Adjusted EPS) are consistent with long-term financial plans and require meaningful improvement over the 3-year performance period (2026-2028). The proposed 2026 Equity Compensation Plan is estimated to provide sufficient share reserve for approximately 3 years.

Management Comments

• Christopher M. Gorman, Chairman and CEO: "I remain very optimistic about our ability to realize KeyCorp's earnings potential while concurrently delivering value for you, our shareholders, and every stakeholder we serve."
• Todd J. Vasos, Chair of the Compensation and Organization Committee and Lead Independent Director: "Key had a strong year in 2025, reflecting steady execution and continued momentum across the entire organization."
• Todd J. Vasos: "We continue to have conviction in our executive team, under the leadership of our Chairman and CEO, Chris Gorman, and in the strategic priorities that the team has implemented in recent years to create a simpler, more profitable bank."
• Todd J. Vasos: "The Board and executive team were disappointed with the outcome at our 2025 Annual Meeting [say-on-pay vote]."
• Todd J. Vasos: "We believe our actions are responsive to our investors feedback and we look forward to continuing the dialogue."

Industry Context

StockSavvy.ai notes that KeyCorp's strong 2025 performance, particularly in revenue and net interest income growth, positions it favorably within the regional banking sector, which has faced challenges including increased M&A activity and interest rate volatility. The company's focus on differentiated fee-based businesses like investment banking and wealth management aligns with a broader industry trend among regional banks to diversify revenue streams beyond traditional lending. The emphasis on peer-leading capital ratios and planned share repurchases also reflects a sector-wide focus on capital management and shareholder returns in a dynamic regulatory and economic environment. The shift in long-term incentive metrics from relative to absolute ROTCE acknowledges the disruption in peer comparisons due to M&A, a common issue in the current banking landscape.

Comparison to Industry Standards

• KeyCorp's 2025 Total Shareholder Return (TSR) of 26% ranked #2 among its peers (Citizens Financial Group, Inc., Fifth Third Bancorp, Huntington Bancshares Incorporated, M&T Bank Corporation, The PNC Financial Services Group, Inc., Regions Financial Corporation, Truist Financial Corporation, U.S. Bancorp, and Zions Bancorporation).
• The company maintained 'peer-leading capital ratios,' specifically a Common Equity Tier 1 (CET1) ratio of 11.8% and a Marked CET1 ratio of 10.4%.
• The 2023 Performance Awards for NEOs vested at 0% due to underperformance on Adjusted Cumulative EPS and relative Return on Tangible Common Equity (ROTCE), with ROTCE falling to the bottom quartile of its Peer Group.
• KeyCorp's executive compensation practices are benchmarked against a peer group including Citizens Financial Group, Inc., Comerica Incorporated, Fifth Third Bancorp, Huntington Bancshares Incorporated, M&T Bank Corporation, The PNC Financial Services Group, Inc., Regions Financial Corporation, Truist Financial Corporation, U.S. Bancorp, and Zions Bancorporation.
• KeyCorp's distinctive commercial and investment banking capabilities focused on middle-market clients often lead it to compete with large universal banks and boutique investment firms rather than solely its regional bank peers.

Management Changes

Corporate Governance

Related Party Transactions

• Banking, credit, and other transactions with directors, executive officers, immediate family members, and affiliated entities occurred in the ordinary course of business on comparable arms-length terms, complying with Regulation O.
• KeyBank and Scotiabank engaged in ordinary course foreign exchange and derivatives transactions on comparable terms.
• Investment Agreement with The Bank of Nova Scotia (Scotiabank) in August 2024 for the purchase of common shares (approximately 14.9% stake), granting Scotiabank director designation rights (Jacqueline L. Allard and Somesh Khanna). Scotiabank is subject to certain standstill and voting restrictions.
• The son of Andrew J. Randy Paine III (Head of Institutional Bank) is employed by the Company in a non-executive officer position and received total compensation of less than $200,000 in 2025, with compensation established in the ordinary course.

Stakeholder Impact

• Shareholders: Direct impact from say-on-pay vote, director elections, auditor ratification, and equity plan approval. Positive impact from planned share repurchases ($1.2 billion+ in 2026) and strong 2025 financial performance (26% TSR). Negative impact from 0% vesting of 2023 performance awards.
• Employees: Impacted by the 2026 Equity Compensation Plan, which provides equity-based compensation. Compensation programs are designed to attract, retain, motivate, and develop talent.
• Customers: Benefit from continued investments in communities and financial empowerment programs.
• Communities: Key delivered over $65 billion in lending and investments for affordable housing, community development, small business lending, and renewable energy. Volunteered approximately 54,000 hours.
• Regulators: The company operates in a highly regulated environment, with the Board overseeing compliance and risk management.

Next Steps

• Hold 2026 Annual Meeting of Shareholders on May 14, 2026.
• Shareholders to vote on election of 14 directors, ratification of Ernst & Young LLP as independent auditors for 2026, advisory approval of executive compensation, and approval of the 2026 Equity Compensation Plan.
• Planned share repurchases of over $1.2 billion in 2026.
• Continue to engage shareholders to strengthen the compensation program.
• Compensation Committee to perform another comprehensive review of the Peer Group in fall 2026 or sooner if needed.
• File a Registration Statement on Form S-8 for the 2026 Equity Compensation Plan after shareholder approval.
• Next shareholder vote on the frequency of future say-on-pay votes is expected at the 2029 Annual Meeting.

Key Dates

Recommendation

KeyCorp demonstrated strong financial performance in 2025 with record revenue and significant growth in key metrics, coupled with a commitment to shareholder returns through planned buybacks. However, the 0% vesting of 2023 performance awards and the notable decline in say-on-pay support indicate underlying concerns regarding long-term incentive alignment and shareholder sentiment. While management has responded to feedback, the full impact of these changes and the company's ability to consistently achieve its ambitious 2027 targets remain to be seen. The stock appears to be in a period of strategic adjustment and governance refinement, warranting a neutral "hold" stance for now.

Keywords

KeyCorp, SEC Filing, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Financial Performance, Shareholder Vote, Equity Compensation Plan, Banking Industry, Risk Management, Capital Ratios, Share Repurchase, Net Interest Income, Pre-Provision Net Revenue, Assets Under Management, Cybersecurity, Artificial Intelligence, Say-on-Pay, Director Election, Auditor Ratification