Proxy
Summary
This summary highlights certain information about Bread Financial, including with respect to our business, corporate governance, sustainability strategy and executive compensation program. Stockholders are encouraged to read our entire Proxy Statement and 2024 Annual Report carefully before voting.
| Bread Financial | 2025 Proxy Statement | i |
Items of Business
01 |ELECTION OF DIRECTORS
The Board of Directors recommends that stockholders vote FOR the election of each of the nominees.
02 |ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Board of Directors recommends that stockholders vote FOR the compensation paid to our named executive officers as disclosed in this proxy statement.
03 |RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors recommends that stockholders vote FOR the ratification of the selection of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for 2025.
Bread Financial
We are a tech-forward financial services company that provides simple, personalized payment, lending, and saving solutions to millions of U.S. consumers. Our payment solutions, including Bread Financial general purpose credit cards and savings products, empower our customers and their passions for a better life. Additionally, we deliver growth for some of the most recognized brands in travel & entertainment, health & beauty, jewelry and specialty apparel through our private label andco-brand credit cards andpay-over-time products providing choice and value to our shared customers.
Core Practices that Drive our Success
| ii | Bread Financial | 2025 Proxy Statement |
2024 Business Highlights & Awards
Despite the headwinds of challenging macroeconomic conditions and an uncertain regulatory environment, we made great progress in 2024 towards achieving our strategic objectives. Below is a snapshot of certain of our business highlights and recognitions from 2024. These figures are as of December 31, 2024. A more detailed discussion of our 2024 strategic objectives and achievements can be found below under “Compensation Discussion and Analysis—Company Highlights and 2024 Focus Areas” beginning on page 52.
| 85% OF LOANS SECURED THROUGH AT LEAST: 2026 | 9 OF 10 LARGEST PROGRAMS SECURED THROUGH AT LEAST: 2028 |
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| LOWERED DOUBLE LEVERAGE RATIO TO 105%, ACHIEVING TARGET OF: <115% | INCREASED COMMON EQUITY TIER 1 CAPITALRATIO TO: 12.4% |
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| INCREASED TANGIBLE BOOK VALUE PER COMMON SHARE* TO: $46.97 | REPURCHASED NEARLY ALL OF OUR CONVERTIBLE NOTES: $306M (principal amount repurchased) |
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| GREW CONSUMER DEPOSITS TO: $7.7B | CONSUMER DEPOSITS ACCOUNTED FOR: 43% of total funding |
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| * | Tangible book value per common share is a non-GAAP financial measure; see the reconciliation included in Appendix A. |
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| Bread Financial | 2025 Proxy Statement | iii |
Select 2024
Corporate Citizenship & Workplace Awards
| Newsweek’s America’s Most Responsible Companies | Newsweek’s Most Trustworthy Companies in America | Great Place to Work Certified (both U.S. and India) |
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| Great Place to Work - Best Workplaces in Fintech (India) | Benchmark Portal Center of Excellence | PLANSPONSOR - 2024 Plan Sponsor of the Year |
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| iv | Bread Financial | 2025 Proxy Statement |
2025 Director Nominees
| Committee Memberships |
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| Directors · Occupation · Age · Director Since · Independent · Audit · Compensation & HC · N&CG · Risk &Technology |
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| Ralph J. Andretta | President and CEO, Bread Financial Holdings, Inc. | 64 | 2020 | |
| Roger H. Ballou | Former CEO and Director of CDI Corporation | 74 | 2001 | ● | ● | ● | |
| John J. Fawcett | Former EVP and Chief Financial Officer of CIT Group Inc. | 66 | 2024 | ● | ● | | ● | |
| John C. Gerspach, Jr. | Former CFO of Citigroup, Inc. | 71 | 2020 | ● | µ | | ● | |
| Praniti Lakhwara | Chief Information Officer of Zscaler | 49 | 2024 | ● | | ● | |
| Rajesh Natarajan | Chief Product and Strategy Officer of Globalization Partners | 55 | 2020 | ● | | ● | | ● |
| Joyce St. Clair | Former EVP and Chief Human Resources Officer of Northern Trust Corporation | 66 | 2023 | ● | | ● | | ● |
| Timothy J. Theriault | Former EVP, Global CIO and Advisor to CEO of Walgreens Boots Alliance, Inc. | 64 | 2016 | ● | ● | | µ |
| Laurie A. Tucker | Founder and Chief Strategy Officer of Calade Partners LLC | 68 | 2015 | ● | | ● | µ | |
| Sharen J. Turney | Former CEO of Victoria’s Secret | 68 | 2019 | ● | | µ | ● | |
µ Chair● Member
| Bread Financial | 2025 Proxy Statement | v |
Director Nominees Snapshot
| INDEPENDENCE · DIRECTOR TENURE · AGE DISTRIBUTION |
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| Independent | 9 | 0-4 years | 3 | <50 years | 1 |
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| Non-Independent | 1 | 5-9 years | 5 | 50-60 years | 1 |
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| NOMINEES WHO ARE DIVERSE BY RACE OR GENDER | 5 | 10-14 years | 1 | 61-75 years | 8 |
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| 15+ years | 1 | Average Age: 65 | |
| Average Director Tenure: 6.8 years |
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Director Experience and Qualifications
| Accounting / Auditing / Risk Management | | Corporate Finance / Capital Management | |
| 10/10 | | 5/10 |
| Business Operations | | Financial Expertise / Literacy |
| 10/10 | | 10/10 |
| CEO / Executive Leadership | | Human Capital / Compensation |
| 10/10 | | 8/10 |
| Corporate Governance / Ethics | | Mergers & Acquisitions |
| 4/10 | | 6/10 |
| IT / Cybersecurity / Privacy | | Other Public Company Board Experience |
| 7/10 | | 5/10 |
| International Operations | | Relevant Industry Experience |
| 10/10 | | 10/10 |
| vi | Bread Financial | 2025 Proxy Statement |
| BOARD REFRESHMENT · BOARD AND COMMITTEE MEETINGS IN FISCAL 2024 · DIRECTOR ELECTIONS |
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| 6 | Number of New Directorsin Last 5 Years | | 7 | | Full Board Meetings | ANNUAL Frequency of Board Elections |
| 75 | Mandatory Retirement Age | | 20 | | Audit Committee | MAJORITY Voting Standard for Uncontested Elections |
| 7 | | Compensation & Human Capital Committee | |
| 4 | | Nominating & CorporateGovernance Committee | |
| 4 | | Risk & Technology Committee | |
| Bread Financial | 2025 Proxy Statement | vii |
Corporate Governance Highlights
| • Proxy access for stockholders • Majority voting for uncontested director elections • Responsive, active and ongoing stockholder engagement program | | • Annual election of all directors • Stockholder right to call a special meeting • Annual advisory vote on executive compensation • No poison pill |
| • Independent Chair of the Board of Directors • Annual Board and committee self-assessments • Periodic individual director assessments by independent third-party facilitator • All independent director nominees, except CEO • Independent directors regularly meet in executive sessions • Demonstrated commitment to Board refreshment, with 6 new directors in the last 5 years • Committed to ensuring director nominees represent a range of backgrounds, skills, experiences, perspectives and qualifications • Skills matrix-driven nominee selection and Board composition • Two female directors serve as Board committee chairs | | • All financially literate Audit Committee members and multiple Audit Committee Financial Experts • Strong commitment to operating responsibly by integrating sustainability into our business strategy and operations • Mandatory retirement age of 75 years for directors • Robust director onboarding program • Significant stock ownership requirements for directors and executive officers • Prohibition on hedging, pledging and speculative trading of Company securities • Codes of Ethics for associates, directors and senior financial officers, with annual acknowledgment and training • Limitations on directors’ public company board and audit committee service | |
| • Active Board and committee oversight of the Company’s business plan, corporate strategy and risk management • Monitors the “tone at the top” and our workplace culture and values • Active Board engagement in managing talent and succession planning for executives • Periodic reports and presentations to Board and Audit and Risk & Technology committees focusing on cybersecurity and emerging technologies | | • Annual dedicated Board retreat focused on corporate strategy • Risk & Technology Committee oversight of our enterprise risk management and enterprise technology functions • Nominating & Corporate Governance Committee oversight of sustainability-related matters • Compensation & Human Capital Committee oversight of human capital management strategies and initiatives | |
| viii | Bread Financial | 2025 Proxy Statement |
Sustainability Highlights
Our sustainability strategy is representative of the responsible business practices that are integrated in every facet of our enterprise operations. Additionally, it reflects routine feedback from our key stakeholders to ensure we appropriately prioritize the critical aspects of our business that enable achievement of our long-term financial and reputational goals.
A few highlights of our 2024 accomplishments as they align with the tenets of our sustainability framework are set forth below. Additional information regarding our Commitment to Sustainability begins on page 25.
Managing our Business Responsibly
| • | Continued rollout of Operational Excellence initiative, driving efficiency and value-creation across the enterprise |
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| • | Began issuing sustainability questionnaires to suppliers as part of our sustainable sourcing initiatives |
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| • | Established an AI Governance Council to assess risks and opportunities associated with AI |
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| • | Enhanced our Enterprise Risk Management Program |
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Empowering Our Customers
| • | Enhanced predictive insights capabilities to anticipate customer needs |
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| • | Continued the roll out of the Bread Financial mobile app, which will be available to all customers in 2025 |
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| • | Certified as a Center of Excellence by BenchmarkPortal for the 19th Year |
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| • | Recognized by GOBankingRates and money.com for our high-yield savings accounts |
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Engaging Our Associates
| • | Received multiple awards and recognitions for our workplace culture |
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| • | Offered new medical care navigation partner and expanded virtual care options |
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| • | Achieved high ratings for collaboration and belonging on associate surveys |
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| • | Enhanced our Career Navigator tool with new trainings and learning pathways |
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| • | Deposited money in all eligible associates’ 401(k) plans, regardless of whether they contribute themselves |
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| • | Earned Great Place to Work Certification® in both the U.S. and India |
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| Bread Financial | 2025 Proxy Statement | ix |
Protecting Our Planet
| • | Established GHG emissions reduction targets |
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| • | Developed new Sustainable IT Framework |
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| • | Issued questionnaires to key suppliers to begin assessing their responsible business practices |
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| • | Issued nearly 1.5 million sustainable plastic cards |
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Creating Possibilities for Our Communities
| • | $9.8M in charitable donations |
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| • | Over 10,000 associate volunteer hours |
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| • | Increased associate donations and participation in our annual Giving Campaign, with donations reaching $1.5 million |
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| • | Improved community impact measurement process to better align with business goals and track investment impact |
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| x | Bread Financial | 2025 Proxy Statement |
Stakeholder Engagement & Transparency
| 81% We contacted stockholders representing81% of our shares | 58% Holders of 58% of our sharesresponded and engaged |
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| ~170 Total number of equity investors we engaged with | ~115 Total number of debt investors we engaged with |
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| Stockholder Engagement Management and, where appropriate, directors engage with stockholders through various means, including investor meetings, conferences and our 2024 Investor Day. Below are certain key topics frequently discussed with our stockholders. | Other Stakeholder Engagement We actively seek the input of a broad range of stakeholders in advancing our business objectives. In 2024 we engaged with the stakeholders below to better understand their views and ensure we are prioritizing issues that are important to them and align with our long-term business success. | Commitment to Transparency We are committed to visibility and transparency into our business and to sharing our perspectives on matters of interest to our stakeholders. Below are certain examples of our commitment to transparency. |
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| • Business strategy and outlook • Board composition and succession planning • Risk management • Sustainability • Corporate governance • Data privacy, cybersecurity and emerging technologies, including AI • Executive compensation, including response to our annual say-on-pay votes For more detail, see “Corporate Governance – Investor Engagement” (page 19) and “Compensation Discussion and Analysis – Say-On-Pay and Stockholder Engagement” (page 57). | • Associates • Brand partners • Customers • Debt investors • Regulators and government officials • Community and non-governmental organizations For more detail, see “Corporate Governance – Investor Engagement” (page 19). | • Financial reporting presentation and metrics now align more closely to bank holding company peers, allowing for greater comparability with many of our peers • Enhanced compensation disclosures • Annual Sustainability Report • Other disclosures addressing matters critical to stakeholders can be found on our website or as exhibits to our SEC filings, as applicable, including: • Human Rights Statement • Environmental Policy Statement • Codes of Ethics • Insider Trading Policy • Compensation Recoupment Policy • Supplier Code of Conduct • Political Contributions and Activity Policy |
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| Bread Financial | 2025 Proxy Statement | xi |
Executive Compensation Summary & Responsiveness
Executive Compensation Program Goals and Components
Our executive compensation program supports our business strategies by properly incentivizing and rewarding our executives for performance, aligning our executives’ interests with the long-term interests of our stockholders, and allowing us to attract, retain and motivate the highest level of executive talent to guide our business and successfully execute on our strategies. We seek to achieve these objectives by linking individual pay with the Company’s performance on a range of financial andnon-financial measures, as well as key strategic goals. Our compensation programs are structured to encourage our executives to deliver strong results over the short-term while making decisions that create sustained value for our stockholders over the long-term.
Consistent with our compensation philosophy, the total target direct compensation of our named executive officers (NEOs) is heavily weighted towards variable, at-risk compensation that is tied to performance, with 88% of our CEO’s total pay at risk and 79% of our other NEOs’ average total pay at risk for 2024. The 2024 performance-based component for our CEO and our other NEOs comprised 62% and 60%, respectively, of such executive officers’ total direct compensation.
| 2024 CEO TARGET PAY MIX(1) | 2024 AVERAGE NEO TARGET PAY MIX(1) |
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| (1) | These pay mix charts exclude amounts listed in the column titled “All Other Compensation” in the Summary Compensation Table included in this proxy statement. |
| xii | Bread Financial | 2025 Proxy Statement |
Below is a more detailed summary of each component of our executive compensation program. We use each component of compensation to satisfy one or more of our compensation objectives. The Company places a significant portion of the overall target compensation for our executive officers “at risk,” without encouraging excessive or unnecessary risk-taking.
| Form of Payment | | Performance Period | | Performance Criteria | | Objectives | | For More Information | |
| Base Salary | | Cash; Fixed | | Ongoing | | Alignment of salary with performance is evaluated on an annual basis | | • Compensates for day-to-day performance • Attracts, retains and rewards NEOs with competitive fixed pay • Reflects experience and job scope | | Page 63 |
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| Annual Incentive Compensation (AIC) | | Cash; Performance-Based | | One Year | | Based on results of balanced scorecard for the year | | • Incentivizes performance on a range of financial and non-financial metrics in the following categories: Stockholder, Customer and Associate • Rewards successful execution of key annual strategic goals | | Page 63 |
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| Long-Term Equity Incentive Compensation (LTIC) | | 60% Performance-Based RSUs (PBRSUs) | | Three-Year Cliff Vesting | | Return on Equity (ROE)* | | • Aligns incentives with stockholder interests and long-term financial objectives • Focuses our executives on delivering exceptional performance | | Page 72 |
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| 40% Time-Based RSUs (TBRSUs) | | Vests Ratably Over Three-Year Period | | Time-based | | • Increases retention • Promotes direct alignment with stockholder interests • Rewards creation of long-term value | | Page 72 | |
| * | In response to feedback we received from our stockholders through our engagement efforts in 2024, we have re-designed our 2025 PBRSU grants to include multiple performance metrics, including Earnings Per Share and a relative TSR modifier. For more detail on these changes and the other feedback we received from our stockholders regarding our compensation practices, please see “Compensation Discussion and Analysis—Say-On-Pay and Stockholder Engagement” beginning on page 57 below. |
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| Bread Financial | 2025 Proxy Statement | xiii |
