PNC FINANCIAL SERVICES GROUP INC

In the first quarter of each year, the HR Committee evaluates performance for the prior year to (1) determine the prior year’s total incentive compensation awards and (2) set the total compensation target for the current year.

The HR Committee believes that an effective executive compensation program requires a comprehensive evaluation of performance across multiple categories. This evaluation generally includes a review of financial performance, how we executed against our strategic objectives and how we manage risk, customer experience, talent management, financial accountability and leadership. In determining the amount of incentive awards against the incentive compensation targets, the HR Committee may consider these performance metrics without assigning a specific weight or formula to any one metric.

The HR Committee has not adopted a formula-driven compensation program, believing that formulas may reward short-term results or behaviors that do not serve the long-term interests of our shareholders. Metrics that rely solely on formulas may also be inappropriately skewed by results outside of management’s control. Finally, the HR Committee believes that formulas may undervalue important strategic objectives that do not translate to easily or immediately quantifiable metrics. As a result, the HR Committee evaluates a variety of quantitative and qualitative metrics to attain a comprehensive understanding of PNC’s overall performance.

To the extent possible, the performance metrics reviewed by the HR Committee align the objectives of our management, shareholders and bank regulatory framework. In some cases, our stakeholders have different objectives that cannot be easily reconciled; for example, shareholders seeking higher returns may be willing to tolerate more risk than a federal banking regulator would accept. This is another reason that we rely on multiple metrics, representing performance against a range of goals, and include the ability to make significant adjustments for risk management performance.

HR Committee evaluates performance quarterly. Our CEO reviews PNC’s quarterly and annual performance with the HR Committee. During these quarterly reviews, the HR Committee receives a report on the following metrics, with comparisons to the prior year’s results, the current year’s budget or peer performance results, as appropriate:

We also adjust some of these metrics for certain events as described in more detail in the “—2024 performance and compensation decisions—2024 performance” section.

Evaluating performance against strategic priorities, risk performance, talent management and succession planning. In addition to these metrics, the HR Committee regularly reviews PNC’s performance against its strategic priorities and meets with the Chief Risk Officer on a quarterly basis to review and discuss risk performance. The HR Committee also reviews the talent trends throughout our workforce quarterly, including talent recruitment, development, retention and employee engagement trends. In addition, as part of its Board-delegated duties, the HR Committee is responsible for regularly discussing succession planning and overseeing and evaluating succession plans for PNC’s senior executive management (other than the Chief Risk Officer, the General Auditor and their direct reports, which are handled by the Risk and Audit Committees respectively). Senior executives are accountable for succession plans in their respective lines of business and for supporting the development of all potential successors, and this is taken into consideration by the HR Committee in evaluating performance.