A bank doled out $19 million to two executives just to keep them from walking away—but there are strings attached

The 14th-largest bank with $222 billion in total assets offered up extra retention bonuses to its head of consumer banking, Brendan Coughlin, and chief financial officer, John Woods.

They are in the horse race to replace current CEO and Chairman Bruce Van Saun, the Rhode Island-headquartered bank said this week. But he hasn’t announced a retirement date, and the company hasn’t signaled his exit.

Accordingly, the Citizens board on Thursday gave Coughlin a mixed cash-and-stock award valued at $12 million and gave Woods an award valued at $7 million. The awards are a blend of time-based restricted stock units, performance share awards, and cash.

Here’s the rub: The performance share units and restricted stock units won’t vest for another three years. And Coughlin would have to pay back $2 million and Woods would be on the hook for $1 million—the size of their respective cash bonuses—if they resign or get fired within three years. The “leadership succession awards” are meant to keep Coughlin and Woods in their seats and off the market until 2027.

“Given the strength of our leadership team and the success in transforming our business our executives are highly attractive in the market,” said the Citizens board this week. “In addition, the board has deemed it critical for the company to retain key executives who have been identified as potential medium-term CEO succession candidates.”

The varying sizes of the awards were intentional, the company said, and designed so that both executives would have comparable levels of equity ownership in the bank. Coughlin joined Citizens in 2020, and has less outstanding equity than Woods, who assumed his position in March 2017. The bonuses are on top of the $3.9 million the bank paid Coughlin and $4.3 million to Woods in 2023, company disclosures show.

Van Saun, 66, has been the chairman and CEO since 2013 and chairs the bank’s executive committee. 

Citizens declined to comment beyond the financial filings.