Webcast is being recorded. It is now my pleasure to turn today's meeting over to Bill Demchak, Chairman and Chief Executive Officer of The PNC Financial Services Group. Please go ahead.
Thank you and good morning, everybody. On behalf of our board of directors and the management team, we're pleased that you have joined us this morning for our 2025 Annual Meeting of Shareholders. As Chairman of The PNC Financial Services Group, I will preside as the chair of this meeting. To begin, let me provide an overview of how our meeting will proceed. After calling the meeting to order, I will briefly introduce the other participants in today's meeting. Next, our Corporate Secretary will provide a report on procedural matters. I will then introduce the proposals to be acted upon at this meeting. We'll pause for any questions regarding those proposals and allow for any voting or. Sorry.
Allow for the voting to be completed. After the polls are closed, our Corporate Secretary will report on the preliminary voting results. Following that, I'll adjourn the meeting and provide remarks on our 2024 business performance. I will use any remaining time to take general questions submitted by shareholders through our virtual meeting portal. I now call this meeting to order. The polls are open, and you may vote through the virtual meeting portal at any time before the polls are closed. The polls will close promptly after we introduce and address any questions related to the proposals to be acted upon at this meeting. If you plan to vote or change your vote during the meeting, please do so as soon as possible. All director nominees have joined the meeting today, and we are also joined by the members of our Management Executive Committee.
Tom Kelly of PricewaterhouseCoopers, our independent auditor, is also in attendance. Joining me today on the panel are Laura Long, our General Counsel, Laura Gleason, our Corporate Secretary, and Bryan Gill, the Director of Investor Relations. This meeting will be conducted in accordance with the regulations for conduct which are available on the virtual meeting portal. By attending this meeting, you agree to abide by these regulations. Because this is a meeting of our shareholders, only those who entered the meeting as a shareholder using a control number will be permitted to vote and submit questions. Shareholder questions are welcome. To vote or submit questions, please follow the instructions available on the virtual meeting portal. We will only answer questions submitted in writing via the portal and, consistent with our regulations for conduct, you can submit questions at any time during the meeting.
We will now turn to the formalities that are necessary for record keeping. Laura, will you present the secretary's report?
Thank you, Bill. I have in my possession an affidavit from Broadridge Financial Solutions, PNC's distribution and tabulation agent. The affidavit provides that the proxy materials for this meeting were mailed to shareholders commencing on March 12th, 2025, the day we began providing access to our proxy materials. These materials were distributed to PNC's shareholders of record as of January 31st, 2025. Janice W. Castillo has been appointed as the judge of election for this meeting. The judge of election has been furnished with a listing of all shareholders of record. Janice Castillo is supervising the voting and she has delivered her oath of office to me. The affidavit, notice and oath will be filed with the records of this meeting.
The judge of election has certified that at the beginning of this meeting there were present in person, via virtual format or by proxy, shares of voting stock entitled to cast approximately 355 million votes, or approximately 90% of the total voting power. Therefore, a quorum is present. Copies of the minutes of the 2024 Annual Meeting of Shareholders are available for me upon request. I would like to remind those attending the meeting that today's presentation contains forward-looking information and non-GAAP financial information. Cautionary statements about reliance on this information are included in today's presentation, which is also available on our corporate website, pnc.com under Investor Relations, and I urge you to read the cautionary statements regarding such information. This concludes my report.
Thank you, Laura. Based on your report, I confirm that this meeting has been properly convened. The purpose of this meeting is to consider and act upon three proposals. First, the election of 13 directors. Second, the ratification of the Audit Committee selection and PricewaterhouseCoopers as our independent registered public accounting firm for 2025, and third, the advisory approval of the compensation of our named executive officers. I will now ask for a single motion to introduce these proposals. May I have such a motion,
Mr. Chairman?
My name is Bryan Gill. I'm a shareholder and I so move.
May I have a second to this motion,
Mr. Chairman?
My name is Laura Long. I'm a shareholder and I second the motion.
I declare that these proposals have been properly introduced and moved. We will now pause to allow for questions related to these three proposals. Questions unrelated to these proposals will be addressed as appropriate during the general question and answer session following the conclusion of the formal business of this meeting. If multiple questions are submitted on the same topic, we will do our best to summarize them and respond collectively to allow us to address as many questions as possible. We'll make every effort to address questions and comments that are consistent with the regulations for conduct. As a reminder for those who intend to vote or change their vote during the meeting, the polls will be closed after the question and answer session regarding the proposals has concluded.
No questions related to these proposals have been submitted.
All proposals are now formally before the meeting and the polls will close shortly. If you intend to vote or change your vote, please do so now. Shareholders who voted by proxy prior to this meeting do not need to take any further action. Shareholders who have not voted or wish to change their vote may do so now through the virtual meeting portal. We will pause briefly to allow any final votes to be cast. At this time, I declare the polls to be closed and I'd like to call upon the Corporate Secretary to report the preliminary voting results.
Thank you, Bill. The judge of election has provided a preliminary report to me which confirms that a majority of the votes cast were for the election of all 13 director nominees. For the ratification of the selection of PricewaterhouseCoopers as PNC's independent registered public accounting firm for 2025, and for the advisory approval of the compensation of PNC's named executive officers. I will file the preliminary report with the records of this meeting and the final vote tally will be disclosed on a Form 8-K that PNC will file with the SEC.
Thank you, Laura. Subject to certification and the final voting results by the judge of election, I declare that all three proposals have been approved. This concludes the formal business of the meeting and the formal part of the annual meeting is now adjourned. Now, before we begin the general question and answer session, I'd like to take a few moments to reflect on 2024. As I hope you've seen by now, 2024 was a great year for PNC. We generated record revenue and delivered positive operating leverage and strengthened capital levels while returning $3 billion to shareholders through dividends and share buybacks. Our businesses are performing well and we continue to execute against our strategic priorities.
As an example of that execution in practice, in 2024, we announced plans to invest $1.5 billion over five years to open more than 200 branches and renovate more than 1,400 existing branches. Since that announcement, we've opened 20 new branches, six of those in first quarter 2025, which will help us scale our presence in priority markets across the Southwest and Southeast. All of these accomplishments are a reflection of the hard work and dedication of our 55,000+ employees. I want to take a moment to thank them for everything that they did to help us deliver strong results and to show up for our customers, each other and our communities. I'd like to thank our entire board for their continued guidance and support and also acknowledge Doug Dachille, who joined our board in February of this year and brings substantial financial services expertise.
I also want to welcome Mark Wiedman, who we appointed to the president role early this month. I'm thrilled Mark has joined us in this capacity. He brings very deep experience in financial services that complement the strength of our leadership team. I've known Mark for 20 years and we're quite fortunate that the timing was right for him to join us. Of course, I'd like to thank you, our shareholders, for your continued trust in our company. Now, before we move on to the question and answer period, I want to spend a few minutes just addressing the current environment. You know, we continue to monitor and evaluate the impact of tariffs and what that impact might be on our economy, our customers and our company. In that effort, we've been communicating with clients to gauge their understanding of the potential impact on their businesses and daily lives.
While it's still very early, the operating environment remains unpredictable at best. We have demonstrated time and again that we perform well in periods of uncertainty, delivering for our customers and our shareholders. As always, we continue to focus on the things that we can control with an emphasis on providing superior products and services to meet the needs of our customers. I'm optimistic about the competitive positioning of our company. Thank you again for your support of our company. I will pause now to allow for questions from our shareholders and the remaining time allocated for this meeting. I'll respond personally or designate another person to respond to questions that we receive that are appropriate for discussion.
As a reminder, if you have a question about a matter of concern to you individually and not of general concern to our shareholders, please contact our investor relations team through the website pnc.com. We have allocated an hour for the meeting, including questions. We will address as many of these questions as possible within that timeframe.
Okay, your first question is how will continued inflation and a significant shift in fiscal policy impact PNC's earnings outlook over the next several years?
As you probably heard, in our first quarter earnings, we reiterated the outlook for earnings this year, which included, you know, record net interest income, controlled expenses, good fee growth and otherwise a pretty strong year. You know, the question at the moment, of course, is the uncertainty surrounding the forward economy given the various announcements coming out of Washington with respect to tariffs and other things. The simplest answer I could give is why we can't predict the future economy in normal times, we certainly can't do it today. Having said that, you know, we have proven time and again that we perform well in downturns. We're structured to do so, you know, given the conservative nature of our balance sheet, our capital, our liquidity, and the way we choose and underwrite credits. I think we'll be fine no matter what comes.
The question is a valid one just given, you know, the uncertainties facing our economy going forward.
Okay, thank you. Moving on to your next question. Can you remind me of PNC's overdraft policy? These fees are a huge hardship to account holders, especially those of low income people. Have you considered reducing your overdraft fees to $5?
You know, we haven't reduced our fees to $5, but I'm proud that we actually led the industry through the introduction of Low Cash Mode to cause a dramatic decrease in overdraft fees caused by the industry. Low Cash Mode is something that we put out and patented that basically gives our customers warnings that they are potentially in overdraft mode and then gives them a period of time to cure it and at most causes charges one overdraft. Today, just with that basic policy shift, we've saved our customers over $1 billion over the last handful of years. I'd also remind people that we at other banks offer accounts that don't charge overdraft at all. Of course, you can't overdraft on those accounts.
It is kind of up to our customers to choose the utility they receive or not as a function of whether or not they want to overdraft their account.
Yeah.
Thank you. Your next question, giving employees and directors stock- based compensation dilutes existing shareholders. Can you provide some color on why you feel this type of compensation is appropriate?
Sure. You know, both our executives and board members are subject to PNC stock ownership requirements, which in simple form ties personal wealth closely to the long term performance of PNC in the interests of our shareholders, which is, I think, quite a good thing. The programs in the end are not actually dilutive to existing shareholders in the sense that through our share buyback programs, we typically retire at least that many shares and then some. You know, in the end it's not dilutive. It ties us to the performance of the company and frankly causes us to make decisions here, you know, as if this was our own, our own business. Right.
Your next question is what is PNC's minimum wage policy and how is PNC ensuring fair compensation for its workforce across income levels?
The lowest entry point we have in the company is $18. Even that entry point varies by, you know, market and different job function. Importantly, the $18 number is basically available to people in their first job right out of high school. There is not a degree required. The other thing that happens is unlike many other companies these days, we actually have a defined pension program, we have a 401(k) program and match. Of course we have health benefits that come along with that job over a very short period of time. People who are entry level move up the ladder here at PNC. When we look at this two and three and four and five years out, they are well into, you know, an earnings cycle that provides a good life for people.
The final thing that I mentioned that we just rolled out, I guess a couple of years ago now, is our Guild Education program, which allows employees at all levels to continue their education, including getting a bachelor's degree. We pay for that. You think about somebody entering the company with a high cost of college. You can kind of come here with a great wage, go to school while you're here, have health care and start saving for your retirement the day you get out of high school.
Thank you. The next question is on the topic of offshoring. Does PNC utilize offshore employees? If so, how many offshore employees do you have and what business functions do they support? Secondly, why does PNC utilize offshore employees rather than keeping those jobs in the United States?
I'll answer the second part first. I mean, we have offshore employees to the extent we have offshore operations. So we have employees in, you know, Canada and parts of Europe and so forth to support our clients at various places. I think we have in total about 2,000 of our 56,000+ workforce are based outside of the U.S., you know, doing business for our customers. Having an employee base outside of the U.S. ensures business continuity in some forms as geographic risks increase, form of natural disasters and other events. Practically, as we grow, you know, and expand, it's unlikely that we'll have more of our employees in other countries.
Thanks. Your next question is, can you provide an update on PNC's dividend and when it may increase?
I know the answer to that. I don't know. I don't know what we've announced outside. Laura is shaking her head no. What I would say is we have a history of increasing our dividend at very healthy levels and our intention would be to continue to do that.
The next question is regarding branches in general. Several branches in my community have been closed. After a branch closure, how do you address staffing levels at the remaining branches close by to accommodate increased customer volume?
That's a great question. You know, talk about general concepts for a second, which is, to the best of our ability, if we close one branch, we try to find that employee, you know, an opportunity at one of the other branches or one of our virtual care centers or any number of other things. We have been aware of employee shortages at various branches, not just ones that, you know, we've consolidated branches to. We have aggressively tried to respond to that with new hires, training, compensation increases to make sure we have less turnover. Rest assured, our full intention is to give customers a great experience inside of the branch and, importantly, to allow our employees to do their job without feeling overburdened by customer flow.
Thank you, Bill. At this time, we have no further questions.
Thank you, Bryan. Thank all of you for your questions. Again, if you have additional questions or your question was not answered, you can reach out to our investor relations group through the corporate website. Thank you all for attending and thank you for your interest in PNC.
The conference has ended. You may disconnect your lines.