DFS Discover Financial Services

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On February 22, 2021, the board of directors of Discover Financial Services (the “Company”) appointed David L. Rawlinson II as a director of the Company and to serve on the Audit Committee. A copy of the press release announcing the appointment of Mr. Rawlinson is attached as Exhibit 99.1 to this report.

There are no arrangements or understandings between Mr. Rawlinson and any other person pursuant to which Mr. Rawlinson was selected as a director. There are no transactions involving Mr. Rawlinson that would be required to be reported under Item 404(a) of Regulation S-K.

In connection with his appointment as a director of the Company, Mr. Rawlinson will be eligible for compensation under the Company’s Directors’ Compensation Plan (the “Plan”). Under the Plan, Mr. Rawlinson will receive an annual retainer for his service as a director of $105,000 and will receive an annual committee member fee of $20,000 for his service on the Audit Committee, each prorated from the date of his appointment as a director.

In addition, on February 22, 2021, Mr. Rawlinson received a grant of 394 restricted stock units under the Plan, which is the annual equity award prorated from the date of his appointment as a director. The restricted stock unit awards vest on the earlier of the first anniversary of the date of grant or immediately prior to the first annual meeting of shareholders following the date of grant, subject to the terms and conditions of the Plan. All restricted stock unit awards are to be settled in shares of Company common stock. Like other eligible directors under the Plan, Mr. Rawlinson will be eligible to receive subsequent awards of restricted stock units under the Plan on the date of each annual shareholders meeting. Under the Plan, the amount of such subsequent awards of restricted stock units shall be equal to the number obtained by dividing $150,000 by the fair market value (as defined in the Plan) of a share of Company common stock on such day.