Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A (RULE 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION 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 Pursuant to Section 240.14a-12 Santander Consumer USA Holdings Inc. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than Registrant) Payment of Filing Fee (Check the appropriate box): ☒ No fee required. ☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: ☐ Fee paid previously with preliminary materials.
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UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATIONPROXY 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 Pursuant to Section 240.14a-12
Santander Consumer USA Holdings Inc.(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ No fee required.
☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filingfee is calculated and state how it was determined):
(4)
Proposed maximum aggregate value of transaction:
(5)
Total fee paid:
☐ Fee paid previously with preliminary materials.
☐ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paidpreviously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERSTO BE HELD JUNE 11, 2019
NOTICE IS HEREBY GIVEN thattheAnnualMeetingofStockholderswillbeheldat1601ElmStreet,Suite800,Dallas,Texas75201,at2P.M.localtimeonJune11,2019forthefollowingpurposes:
2019 PROXY SUMMARYTHIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT. ITDOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER. PLEASE READ THEENTIRE PROXY STATEMENT CAREFULLY BEFORE VOTING.
Your VoteYourvoteisveryimportant.TheBoardisrequestingyoutoallowyourCommonStocktoberepresentedatour2019annualmeetingbyproxiesnamedontheproxycard.ThisProxyStatementisbeingsenttoyouinconnectionwiththisrequestandhasbeenpreparedfortheBoardbyourmanagement.ThisProxyStatementisbeingsenttoourstockholdersonoraboutApril30,2019.
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PROXY SUMMARY
How to VoteYoumayvoteyoursharespriortotheAnnualMeetingviatheInternet,bytelephone,orbymail.
INTERNET
TELEPHONE
MAIL
Go to www.proxypush.com/sc Dial toll-free 855-782-8499 Mark, sign, and date yourYouwillneedthecontrolnumberincludedinyourProxyCard/Voting
Information Concerning the NomineesBiographicalinformationforeachnomineeforelectiontotheBoardappearsbelow.Theinformationisbasedentirelyuponinformationprovidedbytherespectivenominees.
THE BOARDRECOMMENDS A VOTE FOREACH OF THE NOMINEES.
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CORPORATE GOVERNANCE - PROPOSAL 1: ELECTION OF GOVERNANCE
Director IndependenceBecauseweareacontrolledcompany,weareexemptfromtherequirementintheNYSEListedCompanyRulesthatamajorityofourdirectorsmustbeindependent.Inaddition,weareexemptfromtherequirements(i)thatourExecutiveCommittee(whichunderitscharterhastheresponsibilitiesofaNominatingandGovernanceCommittee)becomposedsolelyofdirectorswhomeettheindependencestandardsundertheNYSEListedCompanyRulesand(ii)thatourCompensationCommitteebecomposedsolelyofdirectorswhomeetadditional,heightenedindependencestandardsundertheNYSEListedCompanyRulesandtherulesoftheSEC.TheCompanyissubjecttotherequirementthatallmembersofourAuditCommitteesatisfyindependencerequirementssetforthundertheNYSEListedCompanyRulesandmeettheadditionalcriteriaforindependenceofauditcommitteememberssetforthinRule10A-3(b)(1)undertheExchangeAct.UndertheNYSEListedCompanyRules,tobeconsideredindependent,adirectormustnothaveadisqualifyingrelationship,asdefinedintheNYSEListedCompanyRules,andtheBoardmustaffirmativelydeterminethatthedirectorotherwisehasnodirectorindirectmaterialrelationshipwiththeCompany.Inmakingindependencedeterminations,theBoardcomplieswithallNYSEandSECcriteriaandconsidersallrelevantfactsandcircumstances.TheBoardhasdeterminedthatMr.Ferriss,Ms.Holiday,Mr.McCarthy,Mr.Muir,andMr.RainerareIndependentDirectors.InassessingtheindependenceoftheIndependentDirectors,theBoardconsidered,withoutlimitation,thefollowingtransactions,relationships,andarrangements:
Director CompensationOnlyIndependentDirectorsarecompensatedfortheirserviceontheBoard.ThecompensationprogramforIndependentDirectorswasapprovedbyournon-independent,disinteresteddirectors,whodonotreceiveanycompensationfortheirBoardservice.TheprogramprovidedthefollowingcompensationforIndependentDirectors:
Independent Director Stock Ownership GuidelinesInordertoaligntheeconomicinterestsofourIndependentDirectorswiththoseofourstockholders,theBoardhasdeterminedthatourIndependentDirectorsshouldholdameaningfulequitystakeinSC.Tothatend,ourIndependentNon-EmployeeDirectorStockOwnershipGuidelinesrequireeachofourIndependentDirectorstoacquireandretainsharesorshareequivalentsofourCommonStockwithatargetvaluenotlessthanfivetimestheannualequityretainerof$50,000.ThereisnorequiredtimeperiodwithinwhichanIndependentDirectormustattaintheapplicablestockownershiptarget.However,untilthestockownershiptargetisachieved,anIndependentDirectorisrequiredtoretain100%ofallsharesofourCommonStockreceivedunderSC’sIndependentDirectorcompensationprogram,otherthansharesreceivedwithavalueequaltotheamountoftaxesdueonincomerealizedinconnectionwiththevestingorexerciseofawards.Asofthedatehereof,alldirectorsareincompliancewiththeIndependentNon-EmployeeDirectorStockOwnershipGuidelines.
Director Compensation Table for 2018ThefollowingtableprovidesinformationregardingcompensationforeachIndependentDirectorin2018.Underourdirectorcompensationprogram,onlyIndependentDirectorsarecompensatedfortheirserviceontheBoard.
Nomination of DirectorsTheShareholdersAgreement,byandamongSC,SHUSA,andcertainotherholdersofourCommonStock,whichwerefertoasthe“ShareholdersAgreement,”providesSHUSAwithspecialrightstonominatedirectorstotheBoard.Pleasesee“AdditionalGovernanceInformation—RelatedPartyTransactions—ShareholdersAgreement”forfurtherinformation.PursuanttotheShareholdersAgreement,SHUSAisentitledtonominatesevenmembersoftheBoard.TheShareholdersAgreementprovidesfurtherthatSHUSAmayremoveanydirectornominatedbySHUSAwithorwithoutcause.Inaddition,SHUSAhastherighttodesignateareplacementtofillavacancyontheBoardcreatedbythedepartureofadirectorthatwasnominatedbySHUSA,andwearerequiredtotakeallactionwithinourpowertocausesuchvacancytobefilledbysuchdesignatedreplacement(includingbypromptlyappointingsuchdesigneetotheBoard).WithrespecttodirectorsnotnominatedbySHUSA,theBoardisresponsibleforselectingnomineesforelectiontotheBoardbyourstockholders.Generally,theBoardbeginsidentifyingnomineesbyfirstevaluatingthecurrentmembersoftheBoardwillingtocontinueinservice.CurrentmembersoftheBoardwithskillsandexperiencethatarerelevanttoourbusinessandwhoarewillingtocontinueinserviceareconsideredforre-nomination.IfanymemberoftheBoarddoesnotwishtocontinueinserviceoriftheBoarddecidesnottore-nominateamemberforre-election,theBoardthenidentifiesthedesiredskillsandexperienceofanewnomineeinlightofthecriteriadescribedbelow.Generally,theBoardidentifiescandidatesfordirectornomineesinconsultationwithsittingmembersoftheBoardandwithmanagement,throughtheuseofsearchfirmsorotheradvisors,throughrecommendationssubmittedbyotherdirectorsorstockholders,andthroughsuchothermethodsastheBoarddeemsappropriate.Inidentifyingandevaluatingapotentialdirectornominee,theBoardconsiders,amongotherthings,thefollowingfactors:
Scott PowellPresident and Chief Executive OfficerMr.Powellisdiscussedaboveunder“CorporateGovernance—Proposal1:ElectionofDirectors—InformationConcerningtheNominees.”
Juan Carlos Alvarez de SotoChief Financial OfficerMr.AlvarezdeSotojoinedusasourChiefFinancialOfficerinOctober2017.Priortojoiningus,Mr.AlvarezdeSotoservedasCorporateTreasurerforSHUSAfrom2009to2017,overseeingSHUSA’sliquidityriskmanagement,assetliabilitymanagement,andtreasuryfunctions.PriortojoiningSHUSA,from2005to2008,hewasSeniorVicePresidentandHeadofTreasuryandInvestmentsforBancoSantander’sInternationalPrivateBankingatBSIandBancoSantanderSuisse.Inthisrolehemanagedateamofinvestmentprofessionals,overseeingtheassetsofBancoSantander’sinternationalhigh-net-worthclients.From2000to2004,Mr.AlvarezdeSotoheldthepositionofDirecteurAdjointforSantanderCentralHispanoSuisse,GenevaandwasHeadofTreasury,TradingandAsset-Allocation.Mr.AlvarezdeSotoholdsamaster’sdegreeinfinancefromGeorgeWashingtonUniversityandabachelor’sdegreeinmanagementfromTulaneUniversity,andisaCharteredFinancialAnalyst.
Sandra BroderickHead of OperationsMs.BroderickhasservedasourExecutiveVicePresident,HeadofOperationssinceOctober2017.Ms.BroderickjoinsusfromU.S.Bank,wheresheservedasExecutiveVicePresident,OperationsExecutivesinceMarch2017.Priortothat,Ms.BroderickservedasManagingDirector,OperationsExecutiveatJPMorganChasefromMarch2002toMarch2017,whereshealsoservedasHeadofOperationsfortheirAutomotiveFinancebusinessbeginningin2012.Ms.BroderickwasalsoaSeniorOperationsDirectoratGECapitalfromDecember1995toSeptember1998andaSeniorVicePresidentofOperationsExecutiveatBankOnefromSeptember1998toMarch2002.Ms.BroderickattendedStateUniversityofNewYorkatBuffalo.
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EXECUTIVE OFFICERS
Fahmi KaramHead of Pricing and AnalyticsFahmiKaramhasservedasourExecutiveVicePresident,HeadofPricingandAnalyticssinceMay2018.Inthisrole,Mr.Karam’sresponsibilitiesincludepricingstrategyandoptimizationacrossallofourchannels,modeldevelopmentandmonitoringaswellasstrategicanalytics.HepreviouslyservedasourExecutiveVicePresident,StrategyandCorporateDevelopmentsinceSeptember2015,overseeingfinancialplanningandanalysis,assetacquisitionandsalesandotherstrategicinitiatives.PriortojoiningSC,Mr.KaramwasatJPMorganInvestmentBankfor12years,wherehemostrecentlyservedasanExecutiveDirector.PriortoJPMorgan,Mr.KaramservedasaSeniorAssociateatDeloitteAuditAssuranceServicesfortwoyears.Mr.Karamreceivedabachelor’sandmastersofAccountingfromBaylorUniversity.HeisaCertifiedPublicAccountant.
Richard MorrinPresident, Chrysler Capital and Auto RelationshipsMr.MorrinhasservedasourPresident,ChryslerCapitalandAutoRelationshipssinceOctober2017.HepreviouslyservedasourChiefOperatingOfficersinceFebruary2016,havingjoinedusasourExecutiveVicePresident,NewBusinessinAugust2011.Priortojoiningus,Mr.Morrinheldavarietyofmanagementpositionsin21yearsofcombinedserviceatAllyFinancialandGeneralMotorsAcceptanceCorp.Mr.Morrinholdsabachelor’sdegreeineconomicsfromtheUniversityofPennsylvaniaandamaster’sdegreeinbusinessadministrationfromtheUniversityofVirginia.
Christopher PfirrmanChief Legal Officer, General Counsel, and Corporate SecretaryMr.PfirrmanhasservedasourChiefLegalOfficer,GeneralCounsel,andCorporateSecretarysinceSeptember2015.HewaspreviouslyemployedbySHUSA,andmostrecently,servedasSeniorExecutiveVicePresidentandGeneralCounselofSHUSAandofSBNAfromJanuary2012toSeptember2015.HeservedasSBNA’sSeniorVicePresidentandDeputyGeneralCounselfromJanuary2000toJanuary2012,andhewasanattorneyinthelawfirmofEdwards&Angell,LLP(nowLockeLordLLP)from1996to2000.Hereceivedabachelor’sdegreefromFairfieldUniversityinConnecticutandalawdegreefromtheCollegeofWilliamandMaryinVirginia.HeisamemberoftheMassachusettsandConnecticutbars.
Sunil SajnaniHead of Digital and Service for OthersSunilSajnanihasservedasourExecutiveVicePresident,HeadofDigitalandServiceforOtherssinceMarch2019.HepreviouslyservedasourChiefAuditExecutivefromMay2015untilMarch2019.Priortojoiningus,Mr.SajnaniheldavarietyofmanagementpositionsatConn’s,Inc.,mostrecentlyservingastheHeadofInternalAudit,EnterpriseRiskManagementandRegulatoryCompliancefromNovember2013untilMay2015.PriortoConn’s,Mr.SajnaniworkedatAllyBankandPwC.Hereceivedabachelor’sdegreeinFinancialEconomicsfromtheUniversityofMichiganatAnnArborandamaster’sdegreeinaccountingfromEasternMichiganUniversity.Mr.SajnaniisaCertifiedPublicAccountantandaCertifiedRegulatoryComplianceManager.
Mikenzie SariChief Human Resources OfficerMikenzieSarihasservedasourChiefHumanResourcesOfficersinceSeptember2018.ShepreviouslyservedasManagingDirector,HumanResourcesforWholesaleBankingatSantanderBank,N.A.,andChiefHumanResourcesOfficerofSantanderInvestmentSecuritiesfromFebruary2016toSeptember2018.SheservedasManagingDirector,HumanResourcesofWholesaleBankingatMitsubishiUFJFinancialGroupfromApril2013toJanuary2016.Ms.Sarireceivedabachelor’sdegreeinmechanicalengineeringfromNorthwesternUniversityandamaster’sdegreeinbusinessadministrationfromKelloggSchoolofManagement.
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AUDIT - PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
AUDITProposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm
Stockholder Ratification of Appointment of Independent Registered Public Accounting FirmAproposaltoratifytheappointmentofPwCtoserveasourindependentregisteredpublicaccountingfirmforthefiscalyearendingDecember31,2019willbepresentedatthe2019AnnualMeeting.PwCauditedourconsolidatedfinancialstatementsfor2017and2018.RepresentativesofPwCareexpectedtobepresentatthemeeting.Theywillhavetheopportunitytomakeastatementiftheydesiretodosoandwillbeavailabletorespondtoappropriatequestionsfromstockholders.StockholderratificationoftheselectionofPwCasourindependentregisteredpublicaccountingfirmisnotmandatedbyourBylawsorotherwiserequired.However,theBoardissubmittingtheselectionofPwCtoourstockholdersforratificationasamatterofgoodcorporategovernance.Ifourstockholdersfailtoratifytheselection,theAuditCommitteewillreconsiderwhetherornottoretainthatfirm.Eveniftheselectionisratified,theAuditCommitteeatitsdiscretionmaydirecttheappointmentofadifferentindependentregisteredpublicaccountingfirmatanytimeduringtheyearifitdeterminesthatsuchachangewouldbeinourbestinterestsandourstockholders’bestinterests.TheaffirmativevoteoftheholdersofamajorityofthesharesofCommonStockentitledtovoteonthismatteratthe2019AnnualMeeting,whetherinpersonorrepresentedbyproxy,willapprovetheproposaltoratifyPwCasourindependentregisteredaccountingfirmforthefiscalyearendingDecember31,2019.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
FOR THE RATIFICATION OF OUR APPOINTMENT OF PWCAS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE CURRENT FISCAL YEAR.
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AUDIT - REPORT OF THE AUDIT COMMITTEE
AUDIT FEES AND RELATED MATTERSAudit and Non-Audit FeesThefollowingtablespresentfeesforprofessionalauditservicesrenderedbyPwCfortheauditsofourannualfinancialstatementsandtheeffectivenessofinternalcontrolsfortheyearsendedDecember31,2018and2017,andfeesforotherservicesrenderedbyPwCduring2018and2017.
Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent AuditorTheAuditCommitteehasimplementedprocedurestoensurethatallauditandpermittednon-auditservicesprovidedtousarepre-approvedbytheAuditCommittee.Specifically,theAuditCommitteepre-approvestheuseofanindependentaccountantforspecificauditandnon-auditservices,withinapprovedmonetarylimits.Ifaproposedservicehasnotbeenpre-approved,thenitmustbespecificallypre-approvedbytheAuditCommitteebeforeitmaybeprovidedbyourindependentaccountant.Anypre-approvedservicesexceedingthepre-approvedmonetarylimitsrequirespecificapprovalbytheAuditCommittee.TheAuditCommitteemaydelegatepre-approvalauthoritytooneormoreofitsmemberswhenexpeditionofservicesisnecessary.Alloftheaudit-related,tax,andotherservicesprovidedbyPwCtousin2018wereapprovedbytheAuditCommitteebymeansofspecificpre-approvalsorunderproceduresestablishedbytheAuditCommittee.TheAuditCommitteehasdeterminedthatallnon-auditservicesprovidedbyPwCin2018werecompatiblewithmaintainingitsindependenceintheconductofitsauditingfunctions.
REPORT OF THE AUDIT COMMITTEEThisreportreviewstheactionstakenbyourAuditCommitteewithregardtotheCompany’sfinancialreportingprocessduring2018andparticularlywithregardtotheCompany’sauditedconsolidatedfinancialstatementsasofDecember31,2018and2017andforthethreeyearsendedDecember31,2018.TheAuditCommitteeiscomprisedofthreenon-managementBoardmembers.TheBoardhasdeterminedthateachmemberofourAuditCommitteehasnomaterialrelationshipwiththeCompanyundertheBoard’sdirectorindependencestandardsandthateachisindependentundertheNYSE’slistingstandardsandtheSEC’sstandardsrelatingtotheindependenceofauditcommittees.TheBoardhasalsodeterminedthateachmemberisfinanciallyliterateandthatourchair(Mr.Muir)isan“auditcommitteefinancialexpert”asdefinedbytheSEC.TheAuditCommitteeoperatesunderawrittencharteradoptedbytheBoardthatispublishedontheinvestorrelationssectionofourwebsiteathttp://investors.santanderconsumerusa.com.TheAuditCommitteeannuallyreviewsitswrittencharterandpractices,andhasdeterminedthatitscharterandpracticesareconsistentwiththelistingstandardsoftheNYSEandtheprovisionsoftheSarbanes-OxleyActof2002.ThepurposeoftheAuditCommitteeistoassistBoardoversightof(i)ourindependentregisteredpublicaccountingfirm’squalificationsandindependence,(ii)theperformanceoftheinternalauditfunctionandthatoftheindependentregisteredpublicaccountingfirm,(iii)management’sresponsibilitiestoensurethatthereisinplaceaneffectivesystemofcontrolsreasonablydesignedtosafeguardtheassetsandincomeoftheCompany,(iv)theintegrityofourfinancialstatements,and(v)compliancewithourethicalstandards,policies,plans,andprocedures,andwithlawsandregulations.TheAuditCommitteediscussedwithPwCthemattersrequiredtobediscussedbyPublicCompanyAccountingOversightBoard(“PCAOB”)AuditingStandardNo.1301(CommunicationswithAuditCommittees),includingPwC’soverallauditscopeandaudit
Submitted by the Audit Committee of the Board:William F. Muir, ChairStephen A. FerrissRobert J. McCarthyThisreportshallnotbedeemedtobeincorporatedbyreferencebyanygeneralstatementincorporatingbyreferencethisProxyStatementintoanyfilingundertheSecuritiesActorExchangeAct,andshallnototherwisebedeemedfiledundertheseActs.
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COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS
COMPENSATIONCompensation Discussion and AnalysisExecutive SummaryIntroduction. ThisCD&Adescribesthematerialelementsofcompensationawardedto,earnedby,orpaidtoeachofourNEOs,andfocusesontheinformationcontainedinthefollowingtablesandrelatedfootnotesprimarilyfortheyear2018.
NAMED EXECUTIVE OFFICER TITLE
Scott Powell
PresidentandCEO
Juan Carlos Alvarez de Soto
ChiefFinancialOfficer
Reza Leaali
ChiefTechnologyOfficer
Richard Morrin
President,ChryslerCapitalandAutoRelationships
Sandra Broderick
HeadofOperations
ThisCD&Aexplainstheoverallobjectivesofourexecutivecompensationprogram,howeachelementofourexecutivecompensationprogramisdesignedtosatisfytheseobjectives,andthepoliciesunderlyingour2018compensationprogram.TheCompensationCommitteedesignsourexecutivecompensationprogramtobeconsistentwithbestpractices,supportourbusinessesinachievingtheirkeygoalsandimperatives,anddrivestockholdervalue.TheCompensationCommitteebelievesthatourcompensationprograms,whichareintendedtocomplywithallapplicablelaws,regulationsanddirectivesfromourregulators,aregovernedbyasetofsoundprinciplesandaredesignedtomitigateexcessiverisk-taking.2018 Business Performance Highlights .Withnetincomeof$916millionand$28.8billionintotaloriginations,ourfullyear2018financialresultsdemonstrateourcontinuedstrengthandconsistency.Ourearningsandoriginationswereupduringeachquarter,drivenbyourrenewedfocusondealerexperience,robustpricingapproachandstablecreditperformance.Additionally,weachievedareturnonaverageassets(“ROA”)of2.2%andareturnonaverageequity(“ROE”)of13.3%.
COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS
Allocation of Compensation Between SC and SHUSA for Mr. Powell. ScottPowellservesasourCEOandalsoservesastheCEOofourparent,SHUSA.OurCompensationCommitteeandSHUSA’sCompensationandTalentManagementCommittee(the“SHUSACompensationCommittee”)jointlydeterminedthefollowingapproachtoallocatingMr.Powell’scompensationbetweenSCandSHUSAfor2018:
COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS
PROCESS FOR DETERMINING EXECUTIVE COMPENSATIONCompensation CommitteeTheCompensationCommitteeretainsthefinalauthorityregardingandultimatelysetsthecompensationforourexecutiveofficers,includingourNEOs,andhasoversightof,amongotherthings,adoption,modification,andterminationofthetermsofourexecutiveincentiveplans,andapprovalofamountspaidtoourNEOsunderthoseplans.TheCompensationCommitteeoperatesunderawrittencharteradoptedbytheBoardthatispublishedontheinvestorrelationssectionofourwebsiteathttp://investors.santanderconsumerusa.com.Pursuanttoitscharter,theCompensationCommitteemaydelegateresponsibilitiestosubcommitteesconsistingofoneormoreofitsmembers,whomustreportontheiractivitiestotheCompensationCommittee.BancoSantander’sBoardRemunerationCommitteeandBoardofDirectorsaswellasSHUSA’sCompensationCommitteealsoreview,validateandapprovethecompensationprovidedtocertainmembersofourandSHUSA’smanagementteam,includingMr.Powell.TheCompensationCommitteeconductsanin-depthassessmentofeachNEO’sperformanceagainsthisorherindividualgoals,aswellasagainstSC’sperformance,andthenappliesitsjudgmenttomakecompensationdecisions.TheCompensationCommitteeutilizesaformulatoapproveabonuspoolforexecutiveofficersandcertainotherseniormembersofmanagement(pleasesee“PrincipalComponentsofExecutiveCompensation—AnnualBonuses—SCBonusPool”inthisCD&Aforfurtherinformation),butdoesnototherwiserelyonaformulaormatrixtomakeindividualcompensationdecisions.TheCompensationCommitteebelievesthisprocessprovidesaccountabilityforperformanceagainstSCandindividualgoalsandenablestheCompensationCommitteetoassesseffectivelythequalityoftheperformanceandleadershipdemonstratedbyeachNEO.Importantly,theCompensationCommitteebelievesthattheprocessalsodifferentiatesamongeachNEO’sperformanceandmotivateseachNEO’sshort-termandlong-termresultsaswellaspromotesinnovationandbusinesstransformationwithinSC.ToadvisetheCompensationCommitteeinfulfillingitsdutiesandresponsibilities,theCompensationCommitteeretainedPayGovernanceLLC(“PayGovernance”)in2018toactasitsindependentconsultantandadviseonexecutivecompensation.PayGovernancereporteddirectlytotheCompensationCommitteeandperformednootherworkforSCin2018.Aspartofits2018engagementofPayGovernance,theCompensationCommitteeanalyzedPayGovernance’sindependencefrommanagementandwhetherhiringPayGovernancewouldraiseaconflictofinterest.TheCompensationCommitteeperformedthisanalysisbytakingintoconsiderationthefollowingfactorssetforthinSection303A.05oftheNYSEListedCompanyManual:
COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS
Consideration of Say-on-Pay VoteTheCompensationCommitteevaluesinputfromourstockholdersonourexecutivecompensationprogramandourprinciplesandobjectiveswhendeterminingexecutivecompensation.OnewaytheCompensationCommitteereceivesthatinputisthroughtheresultsofanadvisorystockholdervoteonexecutivecompensation(the“Say-on-Payvote”).WeholdaSay-on-Payvoteeverythreeyears,mostrecentlyin2018,basedonthepreferenceexpressedbyourstockholdersatour2015AnnualMeeting.Inthe2018Say-on-Payvote,asignificantmajorityofourstockholders(over98%ofvotescast)approved,onanadvisorybasis,thecompensationforourNEOs.TheCompensationCommitteedidnottakeanyspecificactionswithrespectto2018compensationdecisionsforourNEOsasaresultofthe2018Say-on-Payvote.OurnextSay-on-Payvoteisexpectedtobeheldatour2021AnnualMeeting.
PRINCIPAL COMPONENTS OF EXECUTIVE COMPENSATIONOverview of ComponentsTheCompensationCommitteeusesthefollowingelementsofcompensationtoattractandretainNEOsandmaintainastableteamofeffectiveleaders,tobalancethecompensationofourNEOswiththeshort-termandlong-termobjectivesofSC,andtoaligntheinterestsofourNEOswiththeinterestsofallofourstockholders.For2018,thecompensationthatwepaidtoourNEOsconsistedprimarilyofbasesalaryandshort-andlong-termincentiveopportunities,asdescribedmorefullybelow.Inaddition,ourNEOswereeligibleforparticipationincompany-wideretirement,healthandwelfarebenefitsplans,andprovidedwithcertainhealthandwelfarebenefitsandperquisitesnotavailabletoouremployeesgenerally,asdescribedmorefullybelow.TheprincipalelementsofcompensationavailabletoourNEOsin2018wereasfollows:
COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS
Base SalaryBasesalaryreflectseachNEO’slevelofresponsibility,leadership,andtenure,aswellastheCompensationCommittee’sevaluationofeachNEO’scontributiontotheperformanceandprofitabilityofSC.InestablishingeachNEO’sannualbasesalary,theCompensationCommitteeconsideredmarketsalarydata,ourbudget,achievementofperformanceobjectives,andourCEO’sassessmentoftheotherNEOs’performance.ThefollowingtableprovidesdetailregardingeachNEO’sannualbasesalaryratefor2018:
COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS
SC Bonus Pool .TheCompensationCommitteeapprovedtheBonusPoolasamethodologyforsettingtheoverallfundingofBonusPlanawardswithrespectto2018forourexecutiveofficers,includingourNEOs,andcertainotherseniormembersofmanagement.ThetargetamountoftheBonusPoolisthesumoftheindividualtargetbonusamounts.TheBonusPoolmethodologyincorporatesabalanced,“scorecard”approachthatconsidersourfinancialperformanceagainstbudgetedfinancialgoals,aswellasperformancerelatedtocustomersatisfaction,regulatorycompliance,employees,andculture.TheCompensationCommitteeapprovedthefollowingmetricsfortheBonusPoolfor2018:
Individual Performance Assessments and Award Determinations. Asdescribedabove,ourperformanceresultedinanapprovedfundingof110%oftheBonusPooltarget.ThisBonusPoolpercentageismultipliedbytheapplicabletargetbonusamountofeachexecutiveofficer,includingeachNEO,toestablishaninitialstartingpointforeachexecutive’sannualbonusamount.Eachexecutive’sawardundertheBonusPlanissubjecttoadiscretionaryadjustment,eitherpositiveornegative,basedontheevaluationoftheexecutive’sperformancebytheCompensationCommittee.Innoevent,however,willtheaggregatetotaloftheactualbonusamountsexceedtheaggregatetotaloftheBonusPool.TheCompensationCommitteebelievesthatthisindividualperformancereviewandthesediscretionaryadjustmentsservestockholderinterestsbyprovidingtheCompensationCommitteewithameanstodifferentiatecompensationoutcomesamongourNEOsbasedonthequalityoftheperformanceandleadershipdemonstratedbyeachNEO.TheCompensationCommitteeconductedadetailedevaluationandassessmentofeachNEO’s2018performanceagainstpre-establishedperformancemeasuresthatweretiedtofinancialperformanceandstrategicinitiatives,includingriskandcompliancemeasures.Pleasesee“2018CompensationActions”inthisCD&Afortheadditionalinformationontheindividualperformancegoalsandassessments.
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COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS
Form of Awards: Mix of Current and Deferred Cash and Equity. Asweareacontrolledcompany,ownedindirectlybyBancoSantander,certainofourexecutiveofficers,includingourNEOs,andotheridentifiedstaffaresubjecttoDirective2013/36/EU(“CRDIV”)promulgatedbytheEuropeanParliamentandCounciloftheEuropeanUnion.UnderBancoSantander’sManagementBoardCompensationPolicyandIdentifiedStaffPlan,certainidentifiedstaff,includingallofourexecutiveofficersandallofourNEOs,arerequiredtodeferreceiptofaportionoftheirvariablecompensation(includingallbonusespaidundertheBonusPlan)inordertocomplywithCRDIV.Ultimately,thesepoliciesareintendedtoensurethatannualbonusawardsencouragesustainable,long-termperformanceconsistentwithourriskappetiteandriskmanagementpolicies,andarealignedwithlong-termstockholderinterests.Accordingly,eachNEO’saggregateawardundertheBonusPlanfor2018waspayable50%incash(aportionofwhichwaspaidimmediatelyandaportionofwhichwasdeferred)and50%intheformofstock-settledRSUsand,forMr.Powell,SantanderADRs(aportionofwhichwasvestedandsettledimmediatelyandaportionofwhichwassubjecttovesting).Afterthesharessubjecttotheequityawardsaresettled,theywillremainsubjecttotransferandsalerestrictionsforoneyear.ThefollowingtablereflectstheportionsofeachNEO’sbonusawardfor2018thatwerepayableintheformofcashandequity:
COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS
Performance Cycles. Whileamulti-yearaward,theSRIPisevaluatedincyclesandawardsareevaluatedandsettledonanannualbasis.Likeourannualbonuses,SRIPawardsaremadeearlyintheyearfollowingeachperformanceyear.Forthe2018performanceyear,35%ofthemulti-yeartargetawardwasatstakeforMr.Powell,Mr.AlvarezdeSotoandMr.Morrin.ForMr.LeaaliandMs.Broderick,46.66%oftheirtotaltargetawardwasatstakeforthe2018performanceyearbecause2018wasthefirstcycleforwhichMr.LeaaliandMs.BroderickwereeligibletoreceiveaSRIPaward.ThegoalsfortheNEOstoearn2018SRIPawardsincludedtheachievementof,orsignificantprogresson,certainregulatoryandcompliancegoals.Performance Assessments and Award Determinations. BecauseweachievedtheSRIPgoalsfor2018,theCompensationCommitteegrantedtheNEOstheirrespectiveSRIPawardsfor2018performance,asfollows:
Form of Awards: Mix of Current and Deferred Cash and RSUs. Aswithourannualbonuses,inordertocomplywithCRDIV,eachNEO’saggregateawardundertheSRIPfor2018waspayable50%incash(aportionofwhichwaspaidimmediatelyandaportionofwhichwasdeferred)and50%intheformofstock-settledRSUsor,withregardtoMr.Powellinstock-settledSCRSUsandBancoSantanderADRs(aportionofwhichwassettledimmediatelyandaportionofwhichwassubjecttovesting).AfterthesharessubjecttotheRSUsandtheADRsaresettled,theywillremainsubjecttotransferandsalerestrictionsforoneyear.ThefollowingtablereflectstheportionsofeachNEO’sSRIPawardfor2018thatwaspayableintheformofcashandRSUs:
Other CompensationInadditiontothebenefitsthatallofouremployeesareeligibletoreceive,ourNEOsareeligibletoreceivecertainotherbenefitsandperquisites.For2018,theadditionalbenefitsandperquisitesincludedcompany-paidannualpremiumsforexecutivedisabilitybenefits.Thesebenefitsandperquisitesaregenerallyconsistentwiththosepaidtooursimilarlysituatedexecutives.
Employment Agreements and Severance PolicyWehaveenteredintoemploymentagreementsandofferletterswithcertainofourNEOs,establishingkeyelementsofcompensationinadditiontoourgenerallyapplicableplansandprograms,whichincludecertainrestrictivecovenants,suchasthoseprohibitingpost-employmentcompetitionorsolicitation.WealsohaveimplementedSHUSA’sEnterpriseSeverancePolicy,whichprovidespost-terminationbenefitsforeligibleemployees,includingcertainofourNEOs,whodonototherwisehaveanycontractualrighttoseverancebenefits.WebelievethattheseagreementsprovidestabilitytoSCandfurthertheobjectivesofourcompensationprograms,includingourobjectiveofattractingandretainingthehighestqualityexecutivestomanageandleadus.Pleasesee“Compensation—PotentialPaymentsuponTerminationorChangeinControl”inthisProxyStatementforadditionalinformationregardingourNEOemploymentagreements,offerlettersandseverancepolicies.
2018 Grants of Plan-Based AwardsThefollowingtableprovidesinformationregardingplanawardsgrantedtoourNEOsin2018.Pleaseseethe“OutstandingEquityAwardsatFiscalYear-End”tablebelowforadditionalinformationregardingthevestingparametersthatareapplicabletotheseawards.
NAME
GRANT
DATE
ALL OTHER STOCK AWARDS: NUMBER OFSHARES OF STOCK OR UNITS
POTENTIAL PAYMENTS UPON TERMINATIONOR CHANGE IN CONTROLEquity Compensation PlansWeoriginallyadoptedourcurrentequitycompensationplan,theOmnibusPlan,onDecember28,2013,andwerestatedtheOmnibusPlaneffectiveJune16,2016,withtheapprovalofourstockholders.ForOmnibusPlanawardsgrantedbeforeJune16,2016,intheeventofachangeincontrol(asdefinedintheplan)ofSC,unlessotherwiseprovidedbytheCompensationCommittee:(1)alltime-vestingoptionswillbecomefullyexercisable,(2)alltime-vestingrestrictedstockawardsandRSUswillbecomefullyvested,and(3)allperformance-vestingawardswillbecomevestedtotheextentthattheapplicableperformancetargetsaremetthroughthedateofthechangeincontrol.ForOmnibusPlanawardsgrantedonorafterJune16,2016,intheeventofachangeincontrol(asdefinedintherestatedplan)ofSC,(1)awardsgrantedtonon-employeedirectorswillfullyvest,and(2)forawardsgrantedtoallotherserviceproviders,vestingwilldependonwhethertheawardsareassumed,converted,orreplacedbytheresultingentity:
Employment Agreement with Scott Powell and Richard MorrinSHUSAenteredintoanemploymentletteragreementwithMr.PowelldatedSeptember14,2018relatingtohisemploymentresponsibilitiesforus,SHUSA,andSantanderduringtheperiodfromJanuary1,2018—December31,2019.TheagreementsetsMr.Powell’ssalaryfor2018at$3millionandhistargetbonusfor2018at$4.25million.UnderMr.Powell’semploymentletteragreement,ifheisterminatedbyusorbySHUSAwithoutcause(asdefinedintheagreement)orifheterminatesemploymentwithusorwithSHUSAforgoodreason(asdefinedintheagreement),hewillbeentitledtothefollowing:
Table Illustrating Potential Payments upon Termination or Change in ControlThefollowingtableprovidesinformationregardingthepaymentsandbenefitstowhichourNEOswouldbeentitledintheeventofterminationofsuchindividual’semploymentwithSCunderspecifiedcircumstancesandintheeventofachangeincontrolofSC.Exceptasotherwisenoted,theamountsshown(1)areestimatesonlyand(2)assumethattheapplicableterminationofemploymentwaseffective,orthatthechangeincontroloccurred,asofDecember31,2018.
NAME
CASH ($)
EQUITY ($) (1)
PERQUISITES/BENEFITS ($)
TOTAL ($)
Scott Powell Termination due to death
—
394,860
—
394,860
Termination due to disability
—
394,860
—
394,860
Termination by SC without cause
5,158,298(2)
394,860
—
5,553,158
Termination by NEO for good reason
5,158,298(2)
394,860
—
5,553,158
Change in control (no termination)
—
—
—
—
Juan Carlos Alvarez de Soto (3) Termination due to death
EQUITY COMPENSATION PLAN INFORMATIONWecurrentlyadministeroneequityplan:ourOmnibusPlan.ThefollowingtableprovidesinformationasofDecember31,2018regardingsharesofourCommonStockthatmaybeissuedundertheseequityplans.
PLAN CATEGORY
NUMBER OF SECURITIES TO BE ISSUED UPON
EXERCISE OF OUTSTANDING OPTIONS, WARRANTS, AND RIGHTS
(#)(a)
WEIGHTED-AVERAGE EXERCISE PRICE OF
OUTSTANDING OPTIONS, WARRANTS, AND RIGHTS
($) (1)(b)
NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE
UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES
Equity compensation plans not approved bysecurity holders
—
—
—
Total 1,344,175 13.15 2,057,009 (1)Weighted-averageexercisepriceisbasedsolelyonoutstandingoptions.
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COMPENSATION - PAY RATIO DISCLOSURE
PAY RATIO DISCLOSUREAsrequiredbySECrules,weareprovidingthefollowinginformationabouttherelationshipoftheannualtotalcompensationofourmediancompensatedemployeeandtheannualtotalcompensationofScottPowell,ourCEO.For2018,theannualtotalcompensationofourmediancompensatedemployee(otherthanourCEO)was$52,992;andtheannualtotalcompensationofourCEO,asreportedintheSummaryCompensationTableincludedabove,was$3,260,064.Asaresult,theratioofourCEO’sannualtotalcompensationtotheannualtotalcompensationofourmedianemployeewasapproximately62to1.TheSEC’srulesforidentifyingthemedianemployeeandcalculatingthepayratiobasedonthatemployee’sannualtotalcompensationallowcompaniestoadoptavarietyofmethodologies,toapplycertainexclusions,andtomakereasonableestimatesandassumptionsthatreflecttheiremployeepopulationsandcompensationpractices.Asaresult,thepayratioreportedbyothercompaniesmaynotbecomparabletothepayratioreportedabove,asothercompanieshavedifferentemployeepopulationsandcompensationpracticesandmayutilizedifferentmethodologies,exclusions,estimates,andassumptionsincalculatingtheirpayratios.ThepayratioreportedaboveisareasonableestimatecalculatedinamannerconsistentwithSECrulesbasedonthemethodologydescribedbelow.Wehavedeterminedthattherehavebeennochangesinouremployeepopulationoremployeecompensationarrangementsthatwereasonablybelievewouldresultinasignificantchangeinourpayratiodisclosure.Thus,aspermittedbySECrules,weareusingthesamemediancompensatedemployeethatweidentifiedforpurposesoflastyear’spayratiodisclosure.Wetookthefollowingstepstoidentifythemedianoftheannualtotalcompensationofallouremployees,aswellastodeterminetheannualtotalcompensationofourmedianemployeeandourCEO.
The Board unanimously recommends a vote “AGAINST” the proposal.Thisstockholderpreviouslysubmittedsubstantiallythesameproposalinconnectionwithour2018AnnualMeeting.Atthattime,theBoardopposedtheproposal,anditwasdefeatedbyourstockholdersbyavoteof:
ADDITIONAL GOVERNANCE INFORMATION - RELATED PARTY TRANSACTIONS
ADDITIONAL GOVERNANCE INFORMATIONRelated Party TransactionsTransactionsbyuswithrelatedpartiesaresubjecttoaformalwrittenpolicy,aswellasregulatoryrequirementsandrestrictions.Underourwrittenpolicy,ourdirectorsanddirectornominees,executiveofficers,andholdersofmorethan5%ofourCommonStock,includingtheirimmediatefamilymembers,willnotbepermittedtoenterintoarelatedpartytransactionwithus,asdescribedbelow,withouttheconsentofourAuditCommittee.Anyrequestforustoenterintoatransactioninwhichtheamountinvolvedexceeds$120,000andanysuchpartyhasadirectorindirectmaterialinterest,subjecttocertainexceptions,willberequiredtobepresentedtoourAuditCommitteeforreview,consideration,andapproval.ManagementwillberequiredtoreporttoourAuditCommitteeanysuchrelatedpartytransactionandsuchrelatedpartytransactionwillbereviewedandapprovedordisapprovedbythedisinterestedmembersofourAuditCommittee.Thefollowingisasummaryofmaterialprovisionsofvarioustransactionswehaveenteredintowithourexecutiveofficers,directors(includingnominees),5%orgreaterstockholdersandanyoftheirimmediatefamilymembersorentitiesaffiliatedwiththem.Webelievethetermsandconditionssetforthinsuchagreementsarereasonableandcustomaryfortransactionsofthistype.
Other ArrangementsGuaranteesBancoSantanderhasprovidedguaranteesofthecovenants,agreements,andourobligationsunderthegoverningdocumentsofourwarehousefacilitiesandprivatelyissuedamortizingnotes.Theseguaranteesarelimitedtoourobligationsasservicer.Beginninginfiscalyear2015,wehaveagreedtopayBancoSantanderandSHUSAafeeof12.5basispointsonsuchfacilitiesandnotesinexchangeforprovidingsuchguarantees.Forfiscalyears2018and2017,weincurred$5.0millionand$6.0million,respectively,infeesunderthisarrangement.
Other AgreementsOnJune30,2014,weenteredintoanindemnificationagreementwithSBNAwherebyweindemnifySBNAforanycreditorresiduallossesonapoolof$48.2millioninleasesoriginatedunderaflowagreementwithSBNA.Atthetimeoftheindemnificationagreement,weestablisheda$48.2millioncollateralaccountwithSBNAinrestrictedcashthatwillbereleasedovertimetoSBNA,inthecaseoflosses,andtous,inthecaseofpaymentsandsaleproceeds.AsofDecember31,2018,thebalanceinthecollateralaccountwaszero.For2018,wedidnotincuranyindemnificationexpenses.InJanuary2015,weagreedtoindemnifySBNAforresiduallosses,uptoacap,oncertainleasesoriginatedundertheCompany’spriorflowagreementwithSBNAbetweenSeptember24,2014andMay9,2015forwhichSBNAandtheCompanyhaddifferingresidualvalueexpectationsatleaseinception.Atthetimeoftheagreement,theCompanyestablishedacollateralaccountheldbySBNAtocovertheexpectedlosses.AsofDecember31,2018,thebalanceinthecollateralaccountwas$40,000.AsofDecember31,2018,wehadarecordedliabilityof$39,000relatedtotheresiduallossescoveredundertheagreement.Ourwholly-ownedsubsidiarythroughSCIllinois,SantanderConsumerInternationalPuertoRico,LLC(“SCI”),hasopeneddepositaccountswithBSPR.AsofDecember31,2018,SCIhadcashof$8.9millionondepositwithBSPR.ThedepositaccountswereenteredintointheordinarycourseofbusinessandonsubstantiallythesametermsasBSPR’sotheraccountholders.
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ADDITIONAL GOVERNANCE INFORMATION - RELATED PARTY TRANSACTIONS
ADDITIONAL GOVERNANCE INFORMATION - OTHER GOVERNANCE INFORMATION
Other Governance InformationCode of Conduct and EthicsWehaveadoptedtheSHUSACodeofEthicsfortheCEOandSeniorFinancialOfficersandarelatedSCAddendumthatappliestoourCEOandourseniorfinancialofficers(the“CodeofEthics”).TheCodeofEthicsispubliclyavailableonourwebsiteathttp://investors.santanderconsumerusa.com.WeintendtodiscloseanyamendmentstoorwaiversofaprovisionoftheCodeofEthicsrequiredtobedisclosedbyapplicableSECrulesbypostingsuchinformationonourwebsiteavailableathttp://investors.santanderconsumerusa.comand/orinourpublicfilingswiththeSEC.
Director AttendanceDuring2018,theBoardheld10meetings.Eachincumbentdirectorattendedatleast75%oftheaggregatenumberofmeetingsoftheBoardandcommitteesoftheBoardonwhichheorsheserved,exceptforMr.Maldonado,whoattended61%ofthemeetingsoftheBoardandcommitteesoftheBoardonwhichheserved.TheIndependentDirectorsmetregularlyinexecutivesessions,withourindependentChairmanoftheBoardchairingthesessionsofIndependentDirectors.WeencouragealldirectorstoattendourAnnualMeeting.Mr.Aditya,Mr.Ferriss,Mr.Hill,Ms.Holiday,Mr.Maldonado,Mr.McCarthy,Mr.Muir,Mr.PowellandMr.Rainerattendedour2018AnnualMeeting.
Communication with DirectorsStockholdersorotherinterestedpartiesdesiringtocommunicatewiththeBoard,withournon-managementdirectors,withourChairmanoftheBoardorthechairofanyoftheBoardcommitteesorwithanyindividualdirectormaydosoinwritingaddressedtoSantanderConsumerUSAHoldingsInc.,Attn:(NameofBoardMember(s)),c/oOfficeoftheSecretary,1601ElmStreet,Suite800,Dallas,Texas75201,orbye-mailc/otheOfficeoftheSecretaryatcorporate.secretary@santanderconsumerusa.com.
QUESTIONS AND ANSWERSProxy Materials and Voting Information1. How does the Board recommend that I vote on matters to be considered at the Annual Meeting?TheBoardrecommendsthatyouvoteasfollows:
2. Who is entitled to vote?OnlyholdersofrecordofourCommonStockatthecloseofbusinessonApril15,2019,whichtheBoardhassetastherecorddate,areentitledtonoticeof,andtovoteat,theAnnualMeeting.Asoftherecorddate,wehad351,781,132sharesofCommonStockoutstandingandentitledtovoteattheAnnualMeeting,andoursharesofCommonStockwereheldbyapproximately8stockholdersofrecord.EachholderofrecordofCommonStockontherecorddatewillbeentitledtoonevoteforeachshareheldonallmatterstobevoteduponattheAnnualMeeting.Therearenocumulativevotingrightsintheelectionofdirectors.
3. What constitutes a quorum at the Annual Meeting?Thepresence,inpersonorbyproxy,ofamajorityofthevotesentitledtobecastonamattertobevotedonattheAnnualMeetingconstitutesaquorumforactiononthatmatter.ThesharesofCommonStockrepresentedbyproperlyexecutedproxycards,orproperlyauthenticatedvotinginstructionsrecordedelectronicallythroughtheInternetorbytelephone,willbecountedforpurposesofdeterminingthepresenceofaquorumattheAnnualMeeting.Abstentionsandbrokernon-voteswillbecountedtowardfulfillmentofquorumrequirements.Abrokernon-voteoccurswhenanomineeholdingsharesforabeneficialownerdoesnotvoteonaparticularproposalbecausethenomineedoesnothavediscretionaryvotingpowerwithrespecttothatproposalandhasnotreceivedinstructionsfromthebeneficialowner.
4. How do I vote without attending the Annual Meeting?Whetheryouholdsharesdirectlyasastockholderofrecordorthroughabroker,trustee,orothernominee,youmaydirecthowyoursharesarevotedwithoutattendingtheAnnualMeeting.YoumaygivevotinginstructionsbytheInternet,bytelephoneorbymail.Instructionsareontheproxycardorinstructioncard.Theproxyholderswillvoteallproperlyexecutedproxiesthataredeliveredinresponsetothissolicitation,andnotlaterrevoked,inaccordancewiththeinstructionsgivenbyyou.Ifyouareastockholderofrecordontherecorddate,thenyourproxymustbereceivednolaterthan5:00P.M.EasternTimeonJune10,2019tobecounted.Ifyouarethebeneficialownerofyoursharesheldthroughabroker,trusteeorothernominee,pleasefollowtheinstructionsofyourbroker,trusteeorothernomineeindeterminingthedeadlineforsubmittingyourproxy.
5. How can I revoke my proxy?AstockholderofrecordwhohasgivenaproxymayrevokeitatanytimepriortoitsexerciseattheAnnualMeetingbyeither(i)givingwrittennoticeofrevocationtoourCorporateSecretary,(ii)properlysubmittingadulyexecutedproxybearingalaterdate,or(iii)appearinginpersonattheAnnualMeetingandvotinginperson.Ifyouarethebeneficialownerofsharesheldthroughabroker,trustee,orothernominee,youmustfollowthespecificinstructionsprovidedtoyoubyyourbroker,trustee,orothernomineetochangeorrevokeanyinstructionsyouhavealreadyprovidedtoyourbroker,trustee,orothernominee.
6. What is the difference between a “stockholder of record” and a “beneficial” stockholder of shares held in street name?Ifyoursharesareowneddirectlyinyournameinanaccountwithourtransferagent,Computershare,youareconsideredthe“stockholderofrecord”ofthosesharesinyouraccount.Ifyoursharesareheldinanaccountwithabroker,bank,orothernomineeascustodianonyourbehalf,youareconsidereda“beneficial”stockholderofthoseshares,whichareheldin“streetname.”Thebroker,bank,orothernomineeisconsideredthe
7. How will you treat my voting instructions?Ifyouprovidespecificvotinginstructions,yourshareswillbevotedasinstructed.
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QUESTIONS AND ANSWERS
IfyouholdsharesasthestockholderofrecordandsignandreturnaproxycardorvotebyInternetortelephonewithoutgivingspecificvotinginstructions,thenyourshareswillbevotedinaccordancewiththerecommendationsoftheBoard.TheBoardrecommends(1)avotefortheelectionofalldirectornominees,(2)avotefortheratificationoftheappointmentofPwCasourindependentregisteredpublicaccountingfirm,and(3)avoteagainstthestockholderproposal.Intheeventthatanydirectornomineeisunavailableforelection,suchsharesmaybevotedfortheelectionofsuchsubstitutenomineeornominees,ifany,astheBoardmayselect.Thepersonsidentifiedashavingtheauthoritytovotetheproxiesgrantedbytheproxycardwillalsohavediscretionaryauthoritytovote,totheextentpermittedbyapplicablelaw,onsuchotherbusinessasmayproperlycomebeforetheAnnualMeetingandanypostponementoradjournment.TheBoardisnotawareofanyothermattersthatarelikelytobebroughtbeforetheAnnualMeeting.IfanyothermatterisproperlypresentedforactionattheAnnualMeeting,includingaproposaltoadjournorpostponetheAnnualMeetingtopermitustosolicitadditionalproxiesinfavorofanyproposal,thepersonsnamedintheproxycardwillvoteonsuchmatterintheirowndiscretion.Asabeneficialstockholder,youmustprovidevotinginstructionstoyourbroker,bank,orothernomineebythedeadlineprovidedintheproxymaterialsyoureceivefromyourbroker,bank,orothernomineetoensureyoursharesarevotedthewayyouwouldlike.Ifyoudonotprovidevotinginstructionstoyourbroker,bank,orothernominee,whetheryoursharescanbevotedonyourbehalfdependsonthetypeofitembeingconsideredforvote.UnderNYSErules,brokersarepermittedtoexercisediscretionaryvotingauthorityonlyon“routine”matters.Therefore,yourbrokermayvoteonProposal2(RatificationoftheAppointmentofPwCastheCompany’sIndependentRegisteredPublicAccountingFirmfor2019)evenifyoudonotprovidevotinginstructions,becauseitisconsideredaroutinematter. Your broker is not permitted to vote on the other Agenda Proposals if you do not providevoting instructions, because those items involve matters that are considered non-routine .
8. What is a broker non-vote?Ifyourbrokerdoesnotreceiveinstructionsfromyouonhowtovoteyoursharesanddoesnothavediscretiontovoteonaproposalbecauseitisanon-routinematter,thebrokermayreturntheproxywithoutvotingonthatproposal.Thisisknownasa“brokernon-vote.”Abrokernon-votewithrespecttoaproposalistreatedasnotentitledtovoteatthemeetingwithregardtothatproposal,andthereforedoesnothaveanyeffectontheoutcomeofthevoteonthatproposal.
9. What are the voting requirements to elect directors and to approve each of the proposals?AttheAnnualMeeting,stockholderswillconsiderandactupon(1)theelectionof10directors;(2)theratificationoftheappointmentofourindependentregisteredpublicaccountingfirm;(3)thestockholderproposal;and(4)suchotherbusinessasmayproperlycomebeforetheAnnualMeeting.OurBylawsprovidethatdirectorsareelectedbyapluralityofthevotescast.ThismeansthatthedirectornomineewiththemostvotesforaparticularseatontheBoardiselectedforthatseat.OnlyvotesactuallycastwillbecountedforpurposesofdeterminingwhetheradirectornomineereceivedthemostvotesforaparticularseatontheBoard.Abstentionsandthewithholdingofauthoritybyastockholder(includingbrokernon-votes)astotheelectionofdirectors(Proposal1)arenottreatedasvotes“cast”andthushavenoeffectontheresultsoftheelection.UnderourBylaws,theratificationoftheappointmentofourindependentregisteredpublicaccountingfirm(Proposal2)mustbeapprovedbytheaffirmativevoteofamajorityofthevotespresentinpersonorrepresentedbyproxyatthemeetingandentitledtovoteonthematter.Abrokernon-votewithrespecttoaproposalistreatedasnotentitledtovoteatthemeetingwithregardtothatproposal,andthereforedoesnothaveanyeffectontheoutcomeofthevoteonthatproposal.AnabstentiononanyofProposal2,willbetreatedasavoteagainsttherelevantproposal.AsofMarch25,2019,ourdirectorsandexecutiveofficersbeneficiallyowned306,132sharesofCommonStockeligibletobevotedattheAnnualMeeting,constitutingapproximately0.09%oftheoutstandingCommonStock.Inaddition,SHUSA,ourcontrollingstockholderandasubsidiaryofBancoSantander,owns245,593,555sharesofCommonStock,constitutingapproximately69.83%oftheoutstandingCommonStockeligibletobevoted.Webelievethatourdirectors,ourexecutiveofficers,andSHUSAwillvotealloftheirsharesofCommonStockinfavoroftheelectionofeachofthedirectornominees,infavorofProposals,2andagainstProposal3,andtherefore,theoutcomeofthesemattersisreasonablyassured.
10. What is “householding” and how does it affect me?IfyouandotherpersonsinyourhouseholdownsharesofourCommonStockasthebeneficialowner,yourbrokerorbankmayhavegivennoticethatyourhouseholdwillreceiveonlyonecopyofourannualreportandproxystatement.Thispracticeisknownas“householding.”Unlessyourespondedtothatnoticethatyoudidnotwishtoparticipateinhouseholding,youwouldbedeemedtohaveconsentedtoparticipating,andonlyonecopyofourannualreportandProxyStatementwouldbesenttoyouraddress(however,eachstockholderwouldcontinuetoreceiveaseparateproxycard).Thisprocedurereducesourprintingcostsandpostagefees.
Annual Meeting Information11. Are there any other matters to be voted upon at the Annual Meeting?WedonotknowofanymatterstobevotedonbystockholdersattheAnnualMeetingotherthanthoseincludedinthisProxyStatement.YourexecutedproxygivestheproxyholdersauthoritytovoteyoursharesinaccordancewiththeirbestjudgmentwithrespecttoanyothermatterthatmayproperlycomebeforeourstockholdersattheAnnualMeetinginaccordancewithRule14a-4(c)oftheSEC’sproxyrules,andtheproxyholdersintendtoexercisetheirjudgmentaccordinglyinsuchcircumstances.
12. How can I vote in person at the Annual Meeting?SharesheldinyournameasthestockholderofrecordontherecorddatemaybevotedinpersonattheAnnualMeeting.SharesforwhichyouarethebeneficialownerbutnotthestockholderofrecordmaybevotedinpersonattheAnnualMeetingonlyifyouobtainalegalproxyfromthebroker,trustee,orothernomineethatholdsyoursharesgivingyoutherighttovotetheshares.EvenifyouplantoattendtheAnnualMeeting,werecommendthatyouvotebyproxyasdescribedbelowsothatyourvotewillbecountedifyoulaterdecidenottoattendtheAnnualMeeting.Thevoteyoucastinpersonwillsupersedeanypreviousvotesthatyoumayhavesubmitted,whetherbyInternet,telephone,ormail.
13. How can I attend the Annual Meeting?ToattendtheAnnualMeeting,youmustbeaholderofourCommonStockasoftherecorddateofApril15,2019,andrequestanadmissionticketinadvancebyfollowingtheinstructionsbelow.IfyoursharesareowneddirectlyinyournameinanaccountwithComputershare,ourstocktransferagent,youmustprovideyournameandaddressasshownonyouraccountorvotingmaterialswithyouradmissionticketrequest.Ifyouholdyoursharesinanaccountwithabroker,bank,orothernominee,youmustincludeproofofyourstockownership,suchasacopyoftheportionofyourNoticeorproxycardthatshowsyournameandaddressoraletterfromyourbroker,bank,orothernomineeconfirmingyourstockownershipasofApril15,2019.Thee-mailnotificationreceivedwithelectronicdeliveryofproxymaterialsisnotsufficientproofofstockownership.PleasesendyourAnnualMeetingadmissionticketrequestandproofofstockownershipasdescribedabovetotheOfficeoftheSecretarybyoneofthefollowingmethods: Email: [email protected]
Stockholder Proposals and Company Information14. How can I submit a stockholder proposal for the 2020 Annual Meeting?StockholderproposalssubmittedpursuanttoSECRule14a-8forinclusioninour2020proxystatementandactionatour2020AnnualStockholderMeeting(the“2020AnnualMeeting”)mustbereceivedbyusatourexecutiveofficesat1601ElmSt.,Suite800,Dallas,Texas75201,Attention:OfficeoftheSecretary,nolaterthanthecloseofbusiness120calendardaysbeforetheone-yearanniversaryofthedateofthisProxyStatement’sreleasetostockholdersinconnectionwiththe2019AnnualMeeting.Asaresult,any
15. Who pays for this proxy solicitation?ProxieswillbesolicitedfromourstockholdersbymailandthroughtheInternet.Wewillpayallexpensesinconnectionwiththesolicitation,includingpostage,printing,andhandling,andtheexpensesincurredbybrokers,custodians,nominees,andfiduciariesinforwardingproxymaterialtobeneficialowners.WemayengageaproxysolicitationfirmtosolicitproxiesinconnectionwiththeAnnualMeeting,andweestimatethatthefeepayableforsuchserviceswouldbelessthan$10,000.Itispossiblethatourdirectors,officers,andotheremployeesmaymakefurthersolicitationspersonally,electronically,orbytelephone,facsimile,ormail.Ourdirectors,officers,andotheremployeeswillreceivenoadditionalcompensationforanysuchfurthersolicitations.
16. How can I obtain a copy of the Annual Report on Form 10-K?Upon written request, we will provide to you by mail a free copy of our Annual Report on Form 10-K (including financial statements andfinancial statement schedules) for the fiscal year ended December 31, 2018. Pleasedirectyourrequestto1601ElmSt.,Suite800,Dallas,Texas75201Attention:CorporateSecretary.TheAnnualReportonForm10-Kmayalsobeaccessedonourwebsiteathttp://investors.santanderconsumerusa.com.
By Order of the Board,
Christopher Pfirrman
Chief Legal Officer, General Counsel, and Corporate Secretary
ANNUAL MEETING OF SANTANDER CONSUMER USA HOLDINGS INC.Date: June 11, 2019
Time: 2:00 P.M. (Local Time)Place: 1601 Elm Street, Suite 800, Dallas, TX 75201 Please make your marks like this: ☒ Use dark black pencil or pen only
The Board of Directors Recommends a Vote FOR the election of thenominees for director, FOR proposal 2 and AGAINST proposal 3.
1:
Election of Directors
Directors
Recommendä For Withhold
01 Mahesh Aditya ☐ ☐ For 02 José Doncel ☐ ☐ For 03 Stephen A. Ferriss ☐ ☐ For 04 Victor Hill ☐ ☐ For 05 Edith E. Holiday ☐ ☐ For 06 Javier Maldonado ☐ ☐ For 07 Robert J. McCarthy ☐ ☐ For 08 William F. Muir ☐ ☐ For 09 Scott Powell ☐ ☐ For 10 William Rainer ☐ ☐ For
2:
To ratify the appointment ofPricewaterhouseCoopers LLP as ourindependent registered public accounting firmfor the current fiscal year.
For☐
Against☐
Abstain☐
For
3:
Stockholder proposal requesting that theBoard of Directors prepare a report related tothe monitoring and management of certainrisks related to vehicle lending.
For☐
Against☐
Abstain☐
Against
4:
Includes authorization to vote upon anybusiness as may properly come before theAnnual Meeting, and any adjournment orpostponement thereof, in accordance with theterms of our Third Amended and RestatedBylaws.
Authorized Signatures - This section must becompleted for your Instructions to be executed.
Please Sign Here Please Date Above
Please Sign Here Please Date Above
Please sign exactly as your name(s) appears on your stock certificate. If held in joint tenancy, all personsshould sign. Trustees, administrators, etc., should include title and authority. Corporations should provide fullname of corporation and title of authorized officer signing the proxy.
Annual Meeting of Santander Consumer USA Holdings Inc.to be held on Tuesday, June 11, 2019
for Holders as of April 15, 2019This proxy is being solicited on behalf of the Board of Directors
INTERNETGo Towww.proxypush.com/SC
VOTE BY:
TELEPHONE
855-782-8499• Cast your vote online. OR
• Use any touch-tone telephone.
• View Meeting Documents. •
Have your Proxy Card/VotingInstruction Form ready.
MAIL
•
Follow the simple recordedinstructions.
OR • Mark, sign and date your Proxy Card/Voting InstructionForm.
• Detach your Proxy Card/Voting Instruction Form.
• Return your Proxy Card/Voting Instruction Form in thepostage-paid envelope provided.
The undersigned hereby appoints Scott Powell and Christopher Pfirrman, and each oreither of them, as the true and lawful attorneys of the undersigned, with full power ofsubstitution and revocation, and authorizes them, and each of them, to vote all the sharesof capital stock of Santander Consumer USA Holdings Inc. which the undersigned isentitled to vote at said meeting and any adjournment or postponement thereof upon thematters specified and upon such other matters as may be properly brought before themeeting or any adjournment or postponement thereof, conferring authority upon such trueand lawful attorneys to vote in their discretion on such other matters as may properlycome before the meeting and revoking any proxy heretofore given.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTEDOR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED FOR THEELECTION OF THE DIRECTORS IN PROPOSAL 1, FOR PROPOSAL 2, ANDAGAINST PROPOSAL 3, AND AUTHORITY WILL BE DEEMED GRANTED TOVOTE UPON ANY BUSINESS AS MAY PROPERLY COME BEFORE THEANNUAL MEETING, AND ANY ADJOURNMENT OR POSTPONEMENTTHEREOF, IN ACCORDANCE WITH THE TERMS OF OUR THIRD AMENDEDAND RESTATED BYLAWS.
PROXY TABULATOR FOR
SANTANDER CONSUMER USA HOLDINGS INC.
P.O. BOX 8016 CARY, NC 27512-9903
Table of Contents
Proxy — Santander Consumer USA Holdings Inc. Annual Meeting of Stockholders June 11, 2019 2:00 P.M. (Local Time)
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned appoints Scott Powell and Christopher Pfirrman (the “NamedProxies”) and each of them as proxies for the undersigned, with full power ofsubstitution, to vote the shares of common stock of Santander Consumer USAHoldings Inc., a Delaware corporation (the “Company”), the undersigned isentitled to vote at the Annual Meeting of Stockholders of the Company to beheld at the offices of Santander Consumer USA Holdings Inc., at 1601 ElmStreet, Suite 800, Dallas, Texas 75201, on June 11, 2019 at 2:00 P.M. (LocalTime) and all adjournments or postponements thereof. The Board of Directors of the Company recommends a vote “FOR” allnominees for director, “FOR” proposal 2, and “AGAINST” proposal 3. This proxy, when properly executed, will be voted in the manner directedherein. If no direction is made, this proxy will be voted “FOR” allnominees for director, “FOR” proposal 2, and “AGAINST” proposal 3. Intheir discretion, the Named Proxies are authorized to vote upon such othermatters that may properly come before the Annual Meeting and anyadjournment or postponement thereof. You are encouraged to specify your choice by marking the appropriatebox (SEE REVERSE SIDE) but you need not mark any box if you wish tovote in accordance with the Board of Directors’ recommendation. TheNamed Proxies cannot vote your shares unless you sign and return thiscard.