UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
________________________
Bread
Financial Holdings, Inc.
(Name of
Registrant as Specified In Its Charter)
NOT
APPLICABLE
(Name of
Person(s) Filing Proxy Statement, if other than the
Registrant)
SECOND
SUPPLEMENT TO PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE
HELD ON MAY 24, 2022
The following information is a
supplement (this “Second Supplement”) to the Definitive Proxy
Statement on Schedule 14A (the “Proxy Statement”), filed by Bread
Financial Holdings, Inc. (the “Company,” “we” or “us”), together
with the Company’s Notice of Internet Availability of its proxy
materials, with the Securities and Exchange Commission (the “SEC”)
on April 13, 2022, as supplemented by the First Supplement filed
with the SEC on May 17, 2022 (the “First Supplement”), in
connection with the solicitation of proxies by the Board of
Directors (the “Board”) for use at the Annual Meeting of
Stockholders of the Company to be held on Tuesday, May 24, 2022, at
9:00 a.m. Central Daylight Time (the “Annual Meeting”).
This Second Supplement is being filed
with the SEC and is being made available to stockholders on or
about May 20, 2022.
THIS SECOND
SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH THE PROXY STATEMENT
AND THE FIRST SUPPLEMENT.
Response to ISS
Recommendation on Say-on-Pay Advisory Vote
On May 12, 2022, Institutional
Shareholder Services (“ISS”) issued its initial report (the “ISS
Initial Report”) regarding the proposals to be considered at the
Annual Meeting, which included a recommendation that its clients
vote “Against” Proposal 2, our advisory vote on compensation paid
to our named executive officers (“NEOs”). This recommendation was
in contrast to that of Glass Lewis and Co., another major proxy
advisory firm, which recommended a vote “For” Proposal 2.
In the Initial ISS Report, ISS
recommended a vote “Against” Proposal 2 for the following stated
reasons: (i) pay-for-performance misalignment from a quantitative
perspective, (ii) lack of disclosure surrounding certain annual and
long-term incentive goals, (iii) concerns regarding the one-time
transitional “gap” equity awards made to NEOs in 2021, and (iv)
severance payments made to our former Chief Financial
Officer.
On May 17, 2022, the Company filed
the First Supplement with the SEC, in which the Company responded
to the concerns raised in the ISS Initial Report. A copy of the
First Supplement can be found on our website at:
investor.breadfinancial.com/financials/sec-filings/.
On May 19, 2022, ISS issued an
updated report (the “ISS Updated Report”) in response to the First
Supplement. In the ISS Updated Report, ISS reduced its overall
quantitative concern over the Company’s pay-for-performance
compensation structure from a High level to a Low level. In
addition, ISS recognized the Company’s responsiveness to ISS’
request for additional disclosure regarding performance goals under
the Company’s annual and long-term incentive programs, which
addressed a concern raised in ISS’ original analysis.
Notwithstanding the foregoing, ISS
re-asserted its recommendation “Against” Proposal 2, noting that a
concern still remained with respect to severance/transition-related
payments made to the Company’s former Chief Financial
Officer.
In response to this concern, the
Company is providing the following clarifying information regarding
the severance compensation paid to its former Chief Financial
Officer in connection with his departure from the Company on April
13, 2021. The Company believes that such additional information
further supports the appropriateness of this one-time severance
arrangement and should be helpful to the Company’s investors in
their assessment of the Company’s 2021 pay outcomes.
Our
former Chief Financial Officer departed at the request of the
Company to allow for new leadership at the Chief Financial Officer
position as part of a transitional period during which the
Company’s new Chief Executive Officer was building a new leadership
team. The payments received by our former Chief Financial Officer
were paid pursuant to the terms of a negotiated Executive General
Release and Enhanced Severance (the “Severance Agreement”) entered
into by our former Chief Financial Officer and the Company.
In return for the
consideration paid to him, our former Chief Financial Officer,
among other things, (i) gave a general release of claims, (ii)
agreed to covenants regarding confidentiality and
non-disparagement, and (iii) reaffirmed and renewed certain other
restrictive covenants in place during the course of his employment,
including non-solicitation (customers and associates) for a period
of one year post-termination and non-competition for a period of
two years post-termination. The Company believes the terms of the
Severance Agreement, including severance pay, were both reasonable
and customary under the circumstances.
We thank you for
your consideration and continued support, and reiterate our request
that you vote “For” Proposal 2 regarding Say-on-Pay. Even if voting
instructions for your proxy have already been given, you may revoke
your prior vote at any time before or during the Annual Meeting in
accordance with the procedures set forth at page 106 of the Proxy
Statement and vote in favor of Proposal 2.
*****
This Second Supplement is filed with
the SEC and made available to our stockholders solely for the
purpose of addressing the ISS concern with respect to Proposal 2.
No changes were otherwise made to Proposal 2 or any other proposals
contemplated by the Proxy Statement.