Skip to Content

Corporate Governance

Start of Content

UNITED SERVICES AUTOMOBILE ASSOCIATION COMPENSATION AND WORKFORCE COMMITTEE OF THE BOARD OF DIRECTORS CHARTER

Last Updated August 2024

I. SCOPE AND PURPOSE

The Compensation and Workforce Committee (Committee) is established by the Board of Directors (Board) of United Services Automobile Association (USAA) to assist the Board in its oversight of USAA's compensation and workforce policies, practices and programs. The Committee's primary purposes are to (a) oversee compensation related to senior executives, executive development and employee benefits, (b) oversee the total rewards philosophy and strategy of USAA and (c) evaluate whether USAA's incentive compensation plans and arrangements encourage employees to take risks that are beyond USAA's ability to manage effectively. The Committee will assess the performance and pay of the Chief Executive Officer (“CEO”) and recommend CEO performance goals and compensation. The Committee is also responsible for reviewing and approving the performance goals and compensation of executive vice presidents and heads of a USAA Company or Staff Agency (“CoSA”) and recommending Board compensation.

II. RESPONSIBILITIES

The Committee shall have the following responsibilities:

A. Compensation
  1. At least annually, review and as appropriate, approve, USAA's overall total rewards philosophy and strategy and, in consultation with senior management, oversee the development of compensation programs.
  2. Annually review the general salary plan for the ensuing fiscal year.
  3. Annually review and approve the peer group for benchmarking CEO, executive vice presidents and heads of CoSA, and Board compensation.
  4. Annually review the compensation of directors for service on the Board and its committees and recommend changes in compensation to the Board as appropriate.
  5. Annually review and recommend to the Board the CEO's financial and nonfinancial performance goals, evaluate the CEO's performance against the approved goals and, based on this evaluation, recommend to the Board the CEO's performance rating, compensation, benefits and perquisites. The CEO may not be present during voting or deliberations on their compensation.
  6. For executive vice presidents and heads of CoSA, annually review and approve their financial and nonfinancial performance goals, evaluate and approve their performance rating against approved goals and based on this evaluation, approve their compensation, benefits and perquisites. This provision does not apply to the positions of (i) Chief Risk Officer, which is delegated to the Risk and Compliance Committee, (ii) Chief Audit Executive, which is delegated to the Finance and Audit Committee, and (iii) President of USAA Federal Savings Bank (FSB), which is the responsibility of the FSB Board of Directors or a committee thereof.
  7. For executive vice presidents and heads of CoSA: (i) review and approve appointments, compensation, and termination, and (ii) review severance plan amounts and approve any exceptions to the severance plan formula. This provision does not apply to the positions of (i) Chief Risk Officer, which is delegated to the Risk and Compliance Committee, (ii) Chief Audit Executive, which is delegated to the Finance and Audit Committee, and (iii) President of FSB, which is the responsibility of the FSB Board of Directors or a committee thereof.
  8. Monitor and, at least annually, review and discuss with the appropriate officers of USAA, including the Chief Risk Officer, the overall incentive compensation and sales practices for USAA employees and officers to assess whether USAA's incentive compensation plans and arrangements and sales practices are consistent with safety and soundness, satisfy regulatory expectations, and do not encourage imprudent risk taking inconsistent with the long-term health of USAA.
  9. Periodically review and approve the Incentive Compensation Policy and review and approve incentive compensation plans and arrangements that apply to senior executives in accordance with the Incentive Compensation Policy, or any material modifications thereto.
  10. Annually review and evaluate annual and long-term enterprise performance against applicable metrics and/or score cards for incentive compensation plans and arrangements that apply to senior executives and determine annual and long-term performance scores for such plans and arrangements.
  11. Oversee the design and administration of USAA's benefit plans including the delegation and allocation of authority, financial status, reasonableness of the structure and components of such plans, and review and approve such benefit plans and any major modifications and amendments thereto, as may be appropriate.
B. Executive Vice President and Heads of CoSA Succession Planning
  1. Review and provide input to regular succession plans for executive vice presidents and heads of CoSA.
C. Workforce Programs and Policies:
  1. Review, significant talent programs and practices.
  2. Review executive development programs for the Executive Management Group.
  3. Review other personnel practices and programs that have substantial effect on the well-being of employees or on the reputation or financial strength of USAA.
  4. At least quarterly receive reports on workforce culture.
D. Compensation and Workforce Committee Performance
  1. Annually review and assess the Committee's performance and provide the results to the Board.
  2. Annually review the Committee Charter and recommend any necessary changes for approval by the Board.
  3. Recommend to the Board, as necessary, investigations into any matters under the Committee's purview.
E. Other:
  1. The Committee shall perform such other duties as may be delegated to it from time to time by the Board.
  2. The Committee may delegate its authority to subcommittees, which shall report regularly to the Committee.
  3. The Committee shall coordinate its work with other committees as it deems appropriate.
  4. The Committee shall periodically meet with the Executive Vice President, Chief Human Resources Officer.

III. Duration

The Committee shall continue in existence until dissolved by the Board.

IV. CHAIR AND VICE CHAIR

The Chair and the Vice Chair of the Committee (Committee Chair and Committee Vice Chair) shall be elected by the Board at least annually, or as necessary, with due consideration given to nominee(s) recommended by the Nominating and Governance Committee. In the event of the death, disability or other incapacity that prevents the Committee Chair from properly performing their duties, the duties of the Committee Chair shall pass to the Committee Vice Chair until a new Committee Chair is elected as provided for herein.

V. COMMITTEE MEMBERSHIP

The Committee shall consist of at least three members, including the Chair and Vice Chair. The membership of the Committee shall be through appointment by the Board, on consideration of nominee(s) recommended by the Nominating and Governance Committee. The Committee will be comprised solely of independent directors as set forth in the Corporate Governance Guidelines. The Board shall have the authority to fill any vacancies and to remove any Committee member for any reason. No less than annually, the Board shall assess Committee members' independence and determine if they meet applicable requirements.

VI. OUTSIDE CONSULTANTS

The Committee shall have the sole authority, without further approval by the Board to select, retain, evaluate the performance of, and terminate such outside consultants (including any compensation consultant(s)) as it determines appropriate to assist it in the performance of its functions, or to advise or inform the Committee. The Committee shall be able to approve, without further approval by the Board, any compensation payable by USAA to such consultant(s), including the fees, terms, and other conditions for the performance of such services. The Committee shall take appropriate measures to maintain the independence of any such consultant(s) including pre-approving all services performed by such consultant for USAA other than services performed for the Committee in connection with non-employee director compensation matters.

VII. MEETINGS

The Committee shall meet at such times and shall conduct such business as required to fulfill its responsibilities under this Charter, with at least four regular meetings per year. Agendas and materials will be provided to Committee members in advance of any regular meetings. Special meetings may be held as called by the Committee Chair in consultation with the Chairman.

A majority of the members of the Committee shall constitute a quorum and the affirmative vote of a majority of the members of the Committee participating in any meeting of the Committee is necessary for the approval of any Committee business. The Committee may also act by unanimous written consent. Meetings by telephonic or video conference call are authorized and actions taken during such meetings shall have the same force and effect as actions taken in an in-person meeting.

Meetings are to be attended only by members of the Committee, the appointed recorder, designated management, and guests approved by the Committee Chair.

VIII. MINUTES AND REPORTS

The Corporate Secretary, in collaboration with the Committee Chair, shall designate a person to record the proceedings of the Committee's meetings. The records of the Committee meetings shall be confidential and retained in accordance with USAA's records retention schedule.

The Committee Chair may authorize the creation and distribution of reports or position papers as appropriate. The Committee shall make regular reports to the Board regarding its deliberations and actions and to make recommendations to the Board.

IX. EFFECTIVE DATE

This charter was approved by the Board on August 22, 2024 to be effective August 31, 2024 and shall govern the operation of the Committee hereafter.