santander consumer usa holdings...

Table of Contents

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATIONPROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐

Check the appropriate box: ☐ Preliminary Proxy Statement

☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material Pursuant to Section 240.14a-12

Santander Consumer USA Holdings Inc.(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

☒ No fee required.

☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)

Title of each class of securities to which transaction applies:

(2)

Aggregate number of securities to which transaction applies:

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how itwas determined):

(4)

Proposed maximum aggregate value of transaction:

(5)

Total fee paid:

☐ Fee paid previously with preliminary materials.

☐ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filingby registration statement number, or the Form or Schedule and the date of its filing.

(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

Table of Contents

Table of Contents

CONSUMERUSA

1601ElmSt.Suite800Dallas,Texas75201|214.634.1110

April28,2017

DearStockholders,

ThankyouforyourinterestinSantanderConsumerUSA(“SC”andthe“Company”).Weareproudtoleadthisdynamic,disciplinedandmaturingcompany,whichhasbeenaleaderinautomotivefinancefornearlytwodecades.YouareinvitedtoattendtheAnnualMeetingofStockholdersonMonday,June12,2017.TheAnnualMeetingwillbeginpromptlyat3p.m.,localtime,at1601ElmStreet,Suite800,Dallas,Texas75201.

Throughoutitsevolution,SChasremainedasustainableandprofitablebusiness.AttheheartoftheCompanyphilosophyisourdisciplinedapproachtothemarket,andensuringthatwehaveaSimple,PersonalandFairframeworkforourcustomers,employeesandconstituents.

SantanderConsumerUSAcontinuestodeliverstrong,stableperformancethroughcycles,whichislargelyattributabletosevendifferentiators: » Compliance,consumerandemployeefocusedculture » Data-drivenunderwritingdiscipline » Strongandgrowingcapitalbase » Deep,sustainedanddiverseaccesstofunding » BancoSantanderS.A.ownershipandsupport » LargestproviderforFiatChrysler(FCA) » Efficient,scalable,technology-drivenplatform

SantanderConsumerUSAremainsfocusedonourfourbusinesspillars–vehiclefinance,servicingloansforothers,fundingandliquidity,andinstillingacultureofcompliance.Inthepastyear,SCbalancedefficiencyanddisciplinedunderwritingwhileworkingtomaximizevolumeandprofitability.Wecontinuedtoleveragescaleandtechnologyforourloanplatformsandportfolios.WemaintainedleadershipintheABSmarketswhileoptimizingdiversesourcesofliquidity.AndwemadesignificantprogressinstrengtheningtheCompany’scomplianceandriskmanagementprocesses.

WeareoptimisticaboutSC’sprospectsfor2017asourfundamentalscontinuetostrengthen,andweremaincommittedtobetterservingourcustomersandcreatingvalueforallourstakeholders.

TheNoticeofAnnualMeetingandProxyStatementonthefollowingpagescontaininformationabouttheofficialbusinessoftheAnnualMeeting.Whetherornotyouexpecttoattend,pleasevoteyoursharesnow.Ofcourse,ifyouattendtheAnnualMeetinginpersonyouwillhavetheopportunitytorevokeyourproxyandvoteyoursharesinperson.Thisproxystatementisalsoavailableathttp://www.proxypush.com/SC.

WegratefullyacknowledgeyourcontinuinginterestinSantanderConsumerUSA,andwehopeyouwillattendtheAnnualMeeting.

Sincerely,

WilliamRainerChairmanoftheBoard

JasonKulas

PresidentandChiefExecutiveOfficer

Table of Contents

CONSUMERUSA

1601ElmSt.Suite800Dallas,Texas75201|214.634.1110

NOTICEOFANNUALMEETINGOFSTOCKHOLDERSTOBEHELDJUNE12,2017

NOTICEISHEREBYGIVENthattheAnnualMeetingofStockholdersofSantanderConsumerUSAHoldingsInc.willbeheldat1601ElmStreet,Suite800,Dallas,Texas75201,at3p.m.,localtime,onJune12,2017forthefollowingpurposes: 1. Toelect12directorstotheBoardofDirectors; 2. ToratifytheappointmentofPricewaterhouseCoopersLLPasourindependentregisteredpublicaccountingfirmforthecurrentfiscalyear;and 3. TotransactanybusinessasmayproperlycomebeforetheAnnualMeetinginaccordancewiththetermsofourThirdAmendedandRestatedBylaws.

TheBoardofDirectorshasfixedthecloseofbusinessonApril13,2017astherecorddateforthedeterminationofstockholdersentitledtonoticeof,andtovoteat,theAnnualMeeting.

ByOrderoftheBoardofDirectors,

ChristopherPfirrmanChiefLegalOfficer,GeneralCounselandCorporateSecretaryApril28,2017

Table of Contents

TABLEOFCONTENTS

TABLEOFCONTENTS 2017ProxySummary 1

CorporateGovernance 6

Proposal1:ElectionOfDirectors 6

DirectorIndependence 13

BoardLeadershipStructureandRiskOversight 14

BoardCommittees 15

DirectorCompensation 18

NominationofDirectors 20

ExecutiveOfficers 21

Audit 23

Proposal2:RatificationofAppointmentofIndependentRegisteredPublicAccountingFirm 23

AuditFeesandRelatedMatters 24

ReportoftheAuditCommittee 25

Compensation 26

CompensationDiscussionandAnalysis 26

CompensationCommitteeReport 40

ExecutiveCompensationTables 41

AdditionalGovernanceInformation 48

RelatedPartyTransactions 48

StockOwnershipInformation 51

OtherGovernanceInformation 53

QuestionsandAnswers 54 SC2017ProxyStatement

1

Table of Contents

PROXYSUMMARY

2017PROXYSUMMARYTHISSUMMARYHIGHLIGHTSINFORMATIONCONTAINEDELSEWHEREINTHISPROXYSTATEMENT.ITDOESNOTCONTAINALLOFTHEINFORMATIONTHATYOUSHOULDCONSIDER.PLEASEREADTHEENTIREPROXYSTATEMENTCAREFULLYBEFOREVOTING.

ImportantTerms

» “Board”–theBoardofDirectorsofSC

» “CommonStock”–sharesofSCcommonstock,parvalue$.01pershare

» “Company”,“us”,“we”,“our”and“SC”–SantanderConsumerUSAHoldingsInc.and,whereappropriate,SantanderConsumerUSAHoldingsInc.anditssubsidiaries

» “PwC”–PricewaterhouseCoopersLLP

» “Santander”and“SAN”–BancoSantander,S.A.

» “SBNA”–SantanderBank,N.A.,asubsidiaryofSHUSAandanaffiliateofSC

» “SHUSA”–SantanderHoldingsUSA,Inc.,SC’smajoritystockholderandasubsidiaryofSantander

YourVoteYourvoteisveryimportant.TheBoardisrequestingyoutoallowyourCommonStocktoberepresentedatour2017annualmeetingbyproxiesnamedontheproxycard.

ThisProxyStatementisbeingsenttoyouinconnectionwiththisrequestandhasbeenpreparedfortheBoardbyourmanagement.ThisProxyStatementisbeingsenttoourstockholdersonoraboutApril28,2017.

HowtoVoteYoumayvoteyoursharespriortotheAnnualMeetingviatheInternet,bytelephoneorbymail.

INTERNET

TELEPHONE

MAIL

Gotowww.proxypush.com/sc Dialtoll-free855-782-8499 Mark,signanddateyourYouwillneedthecontrolnumberincludedinyourProxyCard/Voting

InstructionForm.

YouwillneedthecontrolnumberincludedinyourProxyCard/Voting

InstructionForm.

ProxyCard/VotingInstructionFormandreturnitinthe

postage-paidenvelopeprovided.

SC2017ProxyStatement

1

Table of Contents

PROXYSUMMARY

SummaryofVotingItemsandVotingRecommendations

PROPOSALS

BOARDRECOMMENDATION

ITEM1.ElectionofDirectors(Page6)

WeareaskingstockholderstovoteoneachdirectornomineetotheBoardnamedintheProxyStatement.TheBoardandtheExecutiveCommitteebelievethateachdirectornomineehasthequalifications,experienceandskillsnecessarytorepresentstockholdersthroughserviceontheBoard.

FORALL

ITEM2.RatificationofAppointmentofIndependentRegisteredPublicAccountingFirm(Page23)

TheAuditCommitteehasappointedPwCtoserveastheCompany’sindependentregisteredpublicaccountingfirmforthefiscalyearendingDecember31,2017.TheAuditCommitteeandtheBoardbelievethatthecontinuedretentionofPwCtoserveastheindependentauditorisinthebestinterestsoftheCompanyanditsstockholders.Asamatterofgoodcorporategovernance,stockholdersarebeingaskedtoratifytheAuditCommittee’sappointmentofPwC.

FOR

NomineesforElectionasDirectorsTheBoardrecommendsavoteFORtheelectionofeachofthefollowingnomineesfordirector:

NAME

AGE

DIRECTORSINCE

INDEPENDENT

COMMITTEEMEMBERSHIP

WilliamRainer 70 2015 ● BoardChair,EC(Chair)

StephenA.Ferriss 71 2013 ● BoardViceChair,CC(Chair),AC,EC

JoséDoncel 56 2015 ---

BrianGunn 44 2015 RC

VictorHill 53 2015 RCOC,RC

EdithE.Holiday 65 2016 ● CC,RCOC

MarkP.Hurley 58 2016 ● RC(Chair),AC,RCOC

JasonA.Kulas 46 2015 EC

JavierMaldonado 54 2015 CC,EC,RCOC

RobertJ.McCarthy 63 2015 ● RCOC(Chair),AC,CC

WilliamF.Muir 62 2016 ● AC(Chair),RC

ScottPowell 55 2016 ---

AC:AuditCommittee,CC:CompensationCommittee,EC:ExecutiveCommittee,RC:RiskCommittee,RCOC:RegulatoryandComplianceOversightCommittee

2


Table of Contents

PROXYSUMMARY

2016BUSINESSHIGHLIGHTS

»Totalautooriginationsof$22billion

»Morethan900,000unitsoriginated

»LargestproviderforFiatChrysler(FCA)

»Morethan$38billionincommittedliquidity

»Santandersupporttotaling$6.3billion

»Issuedandsold$8.3billioninbondsacrossthreedistinctplatforms

»Twonewrevolvingwarehousefacilitiesestablished,includingonenewlender

»FormedOfficeofConsumerPractices

»Real-timecallmonitoringrolledoutforallinbound/outboundcallcenterlines

»LaunchedIdeasIntoActioncampaigntoencourageemployeestosubmitideastoimproveprocessandbetterservecustomers

»Totaled$12billion

»Servicingfeeincomeof$156million


3

Table of Contents

PROXYSUMMARY

GovernanceHighlights

AnnualelectionofalldirectorsAnnualevaluationofCEObyBoardAnnualBoardandCommitteeself-evaluationsandannualindividualdirectorevaluationsStrongBoardprovidingchallengetomanagementopinionsStrongindependentChairmanoftheBoardOrientationprogramfornewdirectorsandcontinuingeducationforalldirectorsRobuststockownershipguidelinesforindependentdirectorsStrongriskoversightbyfullBoardandBoardCommitteesRegularexecutivesessionsofnon-managementdirectors

CompensationProgramOurexecutivecompensationprogramisdesignedtoreinforcethelinkbetweenthelong-terminterestsofourexecutiveofficersandourstockholders.Asignificantportionofourexecutiveofficers’incentivecompensationisdeferredandpayableinSCshares,andtherefore,directlyalignedwiththeCompany’sperformance,includingtotalstockholderreturn.

ELEMENT

KEYCHARACTERISTICS

PURPOSE

BaseSalary

Fixedcashcompensationcomponent,reviewedatleast

annually,thatreflectstheexecutive’sposition,responsibilities,qualifications,tenureand

contributionstotheCompany

OfferssecurityforexecutivesandallowstheCompanytomaintainastablemanagementteam

AnnualIncentiveAwardProgram

Comprisedofbothshort-termandlong-termincentives;asignificantportionofannualbonusesaredeferredandhalfarepayableincashandhalfarepayableinSC

equityawards

Designedtomotivateandrewardtheachievementof

Companyandindividualperformancegoals,appropriatelybalancecompensationriskandalignmanagementand

stockholderinterests

RetirementBenefits;WelfareBenefits;

Perquisites

Indirectcompensationconsistingofaretirementplan,healthandwelfareplansandminimalperquisites

Providesexecutiveswithsecurityduringemploymentandintoretirementandpromotesemployeehealth,which

assistsintheretentionofourexecutives

4


Table of Contents

PROXYSUMMARY KeyFeaturesofourCompensationProgram

TieannualincentivecompensationtotheachievementofmeaningfulCompanyandindividualperformancegoals

Subjectasignificantportionofannualincentivecompensationtodeferral

PayasignificantportionofannualincentivecompensationinSCstock

SubjectOmnibusIncentivePlanawardsto“double-trigger”changeincontrolvesting

Subjectincentivecompensationtoarobustmalusandclawbackpolicy

Conditionasignificantportionofcompensationontheacceptanceofconfidentiality,non-compete,non-solicitandotherrestrictivecovenants

Useaprominentindependentcompensationconsultant

Usearepresentativeandrelevantpeergroup

Structureperformance-basedcompensationtobetax-deductiblewhereappropriate

Imposeannuallimitsonnon-employeedirectorcompensation

Maintainindependentnon-employeedirectorstockownershipguidelines

Conductarobustannualcompensationriskassessment

Donotrepriceunderwaterstockoptions

Donotgrantdiscountedstockoptions

DonotallowhedgingorpledgingofSCstockbyexecutiveofficersordirectors

Awarded2016TotalDirectCompensationTheamountsreportedasAwardedTotalDirectCompensationbelowdifferfromtheamountsdeterminedunderSECrulesasreportedfor2016intheSummaryCompensationTablesetforthonpage41ofthisProxyStatement.Thetablebelowisasupplementto–notasubstitutefor–theSummaryCompensationTable.

NAMEANDPRINCIPALPOSITION

SALARY

($)

ANNUALBONUS(1)

SHORT-TERMINCENTIVE

LONG-TERMINCENTIVE(2)

SIGN-ON/RETENTIONBONUS(2)

AWARDED

TOTALDIRECTCOMPENSATION($)

CASH($)

RSUS($) CASH($)

RSUS($) CASH($)

RSUS($)

JasonKulasPresidentandCEO

1,800,000

491,750

491,750

491,750

491,750

—

—

3,767,000

IsmailDawoodCFO

724,750

420,450

420,450

280,300

280,300

1,221,555

—

3,347,805

RichardMorrinCOO

531,923

214,500

214,500

143,000

143,000

—

480,000

1,726,923

KalyanSeshanCRO

665,000

193,500

193,500

129,000

129,000

—

—

1,310,000

ChristopherPfirrmanCLOandGeneralCounsel

649,418

156,000

156,000

104,000

104,000

300,000

300,000

1,769,418

(1)Amountsincludetheannualbonusearnedin2016andawardedin2017.(2)Subjecttofuturevestingandforfeitureconditions. SC2017ProxyStatement

5

Table of Contents

CORPORATEGOVERNANCE-PROPOSAL1:ELECTIONOFGOVERNANCE

CORPORATEGOVERNANCEProposal1:ElectionofDirectors

WHATYOUAREVOTINGON:

Atthe2017AnnualMeeting,12directorsaretobeelectedtoholdofficeuntilthe2018AnnualMeetinganduntiltheirsuccessorsareelectedandqualified,oruntilthedirectorseitherresignorareremovedfromoffice.

IntroductionAsofthedateofourAnnualMeeting,theBoardwillconsistof12members.ThecurrentmembersareJoséDoncel,StephenA.Ferriss,BrianGunn,VictorHill,EdithE.Holiday,MarkP.Hurley,JasonA.Kulas,JavierMaldonado,RobertJ.McCarthy,WilliamF.Muir,ScottPowellandWilliamRainer.EachmemberofourBoardisalsoamemberoftheboardofdirectorsofSantanderConsumerUSAInc.,anIllinoiscorporation,awholly-ownedsubsidiaryofSC(“SCIllinois”).

SHUSAhastherighttonominateeightmembersoftheBoard.See“CorporateGovernance—NominationofDirectors.”SHUSAhasnominatedMr.Doncel,Mr.Ferriss,Mr.Gunn,Mr.Hill,Mr.Kulas,Mr.Maldonado,Mr.PowellandMr.RainerforelectiontotheBoard.TheBoardhasnominatedMs.Holiday,Mr.Hurley,Mr.McCarthyandMr.MuirforelectiontotheBoard.TheBoardhasdeterminedthatMr.Ferriss,Ms.Holiday,Mr.Hurley,Mr.McCarthy,Mr.MuirandMr.Rainerareindependentdirectors.

EachofthedirectorselectedattheAnnualMeetingwillbeelectedforaone-yeartermwhichexpiresatthenextAnnualMeetingandwillserveuntilthedirector’ssuccessorhasbeenelectedandqualified,oruntilthedirector’searlierresignationorremoval.

InformationConcerningtheNomineesBiographicalinformationforeachnomineeforelectiontotheBoardappearsbelow.Theinformationisbasedentirelyuponinformationprovidedbytherespectivenominees.

THEBOARDOFDIRECTORSRECOMMENDSAVOTEFOREACHOFTHENOMINEES.

6


Table of Contents


JOSÉDONCEL

DIRECTORSINCE:2015AGE:56

EXPERIENCEMr.DoncelhasservedasaseniorexecutiveofSantanderandpredecessorcompaniessince1993,mostrecentlyasSeniorExecutiveVicePresidentandDirectoroftheAccountingandControlDivisionsinceOctober2014,asSeniorExecutiveVicePresidentandDirectoroftheCorporateDivisionofInternalAuditfromJune2013toOctober2014,andasSeniorExecutiveVicePresidentandDirectorGeneraloftheRetailBankingManagementControlAreafromApril2013toJune2013.HewaspreviouslyemployedbyArthurAndersenAuditores,S.A.,DivisionofFinancialInstitutions.Mr.DonceliscurrentlyamemberoftheboardsofdirectorsofSHUSAandSBNA.HeisalsochairmanoftheboardsofdirectorsofBancodeAlbacete,S.A.,AdministracióndeBancosLatinoamericanosSantander,S.L.,GrupoEmpresarialSantander,S.L.,SantanderInvestmentI,S.A.,andAblasaParticipaciones,S.L.,andamemberoftheboardsofdirectorsofSantanderHoldingInternacional,S.A.,SantusaHolding,S.L,IngenieríadeSoftwareBancario,S.L.,Geoban,S.A.andProdubanServiciosInformáticosGenerales,S.L.Mr.DoncelholdsadegreeineconomicandbusinesssciencesfromtheUniversidadComplutensedeMadrid.Mr.Doncelhasextensiveexperienceinleadership,financeandriskmanagement,andwebelieveheisqualifiedtoserveontheBoard.

STEPHENA.FERRISS


Vice-ChairmanoftheBoard

COMMITTEES

»Audit

»Compensation(Chair)

»Executive

EXPERIENCEMr.FerrisshasservedasadirectorofSHUSAsince2012andisalsothechairmanoftheboardsofSantanderBanCorpandBancoSantanderPuertoRico.Mr.FerrisswasadirectorofSBNAfrom2012to2015andwasalsoadirectorofIberchemfrom2007until2013.Previously,heservedasPresidentandChiefExecutiveOfficerofSantanderCentralHispanoInvestmentServices,Inc.from1999to2002,andheldvariousrolesatBankersTrust,includingManagingDirectorandPartneroftheBankersTrustGlobalInvestmentBankinLondonandNewYork.PriortoBankersTrust,Mr.Ferrissspent19yearsatBankofAmerica.HealsopreviouslyservedastheseniorindependentdirectorofManagementConsultingGroupPLC,London.Mr.FerrissgraduatedfromColumbiaCollegeandreceivedamaster’sdegreeinLatinAmericanInternationalEconomicsfromColumbiaUniversitySchoolofInternationalandPublicAffairs.Mr.Ferrisshasextensiveexperienceinmanagementandinternationalfinance,andwebelieveheisqualifiedtoserveontheBoard.


7

Table of Contents


BRIANGUNN


COMMITTEES

»Risk

EXPERIENCEMr.GunnhasservedasChiefRiskOfficerandSeniorExecutiveVicePresidentofSHUSAsinceJune2015,andisamemberofSHUSA’sCEOExecutiveCommittee.InFebruary2016,hewasnamedChiefRiskOfficerandSeniorExecutiveVicePresidentofSBNAandalsoservesonSBNA’sCEOExecutiveCommittee.PriortojoiningSHUSA,Mr.GunnservedastheChiefRiskOfficerofAllyFinancialServicesfrom2011toJune2015.Priortothatrole,Mr.GunnwasChiefRiskOfficerofAlly’sGlobalAutomotiveServicesdivision.BeforejoiningAlly,hespent10yearsinavarietyofriskmanagementpositionsatGECapitalincludingChiefRiskOfficerofGEMoneyCanada.Heholdsabachelor’sdegreeinfinancefromProvidenceCollegeandamaster’sdegreeinbusinessadministrationfromHofstraUniversity.Mr.Gunnhasextensiveexperienceinriskmanagementandfinance,andwebelieveheisqualifiedtoserveontheBoard.

VICTORHILL


COMMITTEES

»RegulatoryandComplianceOversight

»Risk

EXPERIENCEMr.HillhasservedasManagingDirectorandChiefExecutiveOfficerofSantanderConsumer(UK)plc(“SCUK”)since2005.Mr.Hillhasoverthirtyyears’experienceintheUKmotorfinanceindustry,thelastseventeenattheboardlevel.HebeganhiscareerwithFirstNationalMotorplc(f/k/aLombardNorthCentralplc),wherehefocusedonoperations,inparticular,customerserviceandcollections.In2005,hewasresponsibleforthelaunchofSCUKandhasledthebusinessoverthepasttwelveyears,duringwhichtimeSCUKundertookamajoracquisitionandintegrationoftheautoloansportfoliofromGECapitalBankin2009.Mr.HillcurrentlyservesontheboardsofdirectorsofSantanderConsumer(UK)Plc,HyundaiCapitalUKLtd(JV),PSAFinanceUKLtd(JV),FirstNationalMotorPlcandPSAFinancePlc.HehaspreviouslyservedasadirectorofGECapitalBankLimitedandofseveralcompaniesintheAbbeyNationalGroup.Mr.HillqualifiedasaCharteredDirectorin2007,achievedaFellowshipoftheInstituteofDirectorsinLondonin2012,andbecameaQualifiedMediatorforCivilandCommercialDisputesin2008.Mr.Hillhasextensiveexperienceinmanagementandintheautofinanceindustry,andwebelieveheisqualifiedtoserveontheBoard.

8


Table of Contents


EDITHE.HOLIDAY


COMMITTEES

»Compensation


EXPERIENCEMs.HolidayisamemberoftheboardsofdirectorsofHessCorporation,WhiteMountainsInsuranceGroupLtd.,andCanadianNationalRailwayandisamemberoftheboardsofdirectorsortrusteesofvariousinvestmentcompaniesintheFranklinTempletonGroupofFunds,servingasLeadDirectoroftheTempletonFunds.ShealsoservedontheboardsofdirectorsofRTIInternationalMetals,Inc.from1999to2015,andoftheHJHeinzCompanyfrom1994to2013.Ms.HolidaywasalsothePresident,SecretaryandTreasurerofComcastTWHoldings,Inc.from2006to2007.From1990to1993,Ms.HolidaywasAssistanttothePresidentoftheUnitedStatesandSecretaryoftheU.S.Cabinet.From1989to1990,sheservedasGeneralCounseloftheU.S.TreasuryDepartment,andfrom1988to1989,sheservedasCounselortotheSecretaryandAssistantSecretaryforPublicAffairsandPublicLiaisonoftheU.S.TreasuryDepartment.Priortothat,Ms.Holidayheldvariousotherpositionsingovernmentandinprivatepractice.Ms.HolidayholdsaB.S.andaJ.D.fromtheUniversityofFloridaandisamemberoftheStateBarsofFloridaandGeorgiaandtheDistrictofColumbiaBar.Ms.Holidayhasextensiveexperienceinlegalandregulatorymattersandinpublicservice,andwebelievethatsheisqualifiedtoserveontheBoard.

MARKP.HURLEY


COMMITTEES

»Audit


»Risk(Chair)

EXPERIENCEMr.Hurleyco-foundedFiduciaryNetwork,aspecialtyfinancebusinessfocusedonwealthmanagementcompanies,andhasservedasitsChairmanandChiefExecutiveOfficersince2006.Mr.HurleyservedasChairmanandChiefExecutiveOfficerofUndiscoveredManagers,amutualfundcompanythathefounded,from1997until2004,whenitwassoldtoJPMorgan.HepreviouslywasaManagingDirectoratMerrillLynchandaVicePresidentatGoldmanSachsandservedastheDirectorofResolutionsattheOfficeofThriftSupervision,U.S.TreasuryDepartment.Mr.HurleycurrentlyservesontheboardofdirectorsoftheUniversityofNorthTexasFoundation.Heholdsabachelor’sdegreeinengineeringandhistoryfromtheUnitedStatesMilitaryAcademyandamaster’sdegreeinbusinessadministrationfromtheStanfordGraduateSchoolofBusiness.Mr.HurleyalsowasaCaptainintheU.S.ArmyFieldArtillery,servingforfiveyears.Mr.Hurleyhasextensivemanagerialandfinanceexperience,andwebelieveheisqualifiedtoserveontheBoard.


9

Table of Contents


JASONA.KULAS



COMMITTEES

»Executive

EXPERIENCEMr.KulashasservedasourChiefExecutiveOfficer(“CEO”)sinceJuly2015andasourPresidentsinceFebruary2016,havingpreviouslyservedasourPresidentfromNovember2013toJuly2015andourChiefFinancialOfficerfromJanuary2007toJuly2015.SinceJuly2015,hehasalsoservedasadirector,havingpreviouslyservedonourBoardfrom2007to2012.HealsoservedasadirectorofSHUSAfromOctober2015toSeptember2016.Priortojoiningus,Mr.KulaswasaManagingDirectorininvestmentbankingforJPMorganSecurities,Inc.,wherehewasemployedfrom1995to2007.HealsoworkedpreviouslyatDun&BradstreetandasanadjunctprofessoratTexasChristianUniversity.Mr.KulasalsocurrentlyservesontheboardofdirectorsofthenonprofitSantanderConsumerUSAInc.Foundation.Heholdsabachelor’sdegreeinchemistryfromSouthernMethodistUniversityandamaster’sdegreeinbusinessadministrationfromTexasChristianUniversity.Mr.Kulashasextensiveknowledgeandexperienceinfinanceandintheconsumerfinanceindustry,andwebelieveheisqualifiedtoserveontheBoard.

JAVIERMALDONADO


COMMITTEES

»Compensation

»Executive


EXPERIENCEMr.MaldonadohasservedasSeniorExecutiveVicePresident,GlobalHeadofCostControlofSantandersinceOctober2015.HehasheldnumerousmanagementpositionsatSantanderanditsaffiliates,includingSeniorExecutiveVicePresidentofSantander,HeadoftheNewGeneralDirectorateforCoordinationandControlofRegulatoryProjectsofSantander,fromSeptember2014toOctober2015;ExecutiveCommitteeDirector,HeadofInternalControlandCorporateDevelopment,forSantander(UK)plcfromMay2012toSeptember2014;VicePresidentinChargeofClosedFundsandComplaintsforBancoSantanderBrazilfromOctober2011toApril2012;andGeneralManagerforSantanderintheMiddleEastfromJanuary2011toSeptember2011.Previously,Mr.MaldonadowasanattorneywithBaker&McKenzieandCorporateandInternationalLawDepartmentHeadatJ.Y.Hernandez-CanutLawFirm.Mr.MaldonadohasservedasadirectorofSHUSAsinceApril2015andhasservedasvice-chairmanoftheboardofdirectorsofSHUSAsinceOctober2015.HealsocurrentlyservesasadirectorofBancoSantanderPuertoRico,SantanderBanCorpandSantanderInvestmentSecurities(“SIS”).Mr.MaldonadoalsoservesasadirectorofSaudiHollandiBankRiyadh.HeholdslawdegreesfromNorthwesternUniversityandUNEDUniversity.Mr.Maldonadohasextensiveknowledgeandexperienceininternationalfinanceandlegalandregulatoryaffairs,andwebelieveheisqualifiedtoserveontheBoard.

10


Table of Contents


ROBERTJ.McCARTHY


COMMITTEES

»Audit

»Compensation

»RegulatoryandComplianceOversight(Chair)

EXPERIENCEIn2014,Mr.McCarthyretiredfromMarriottInternational,Inc.,whereheservedasChiefOperationsOfficer.Mr.McCarthyjoinedMarriottin1975,whereheservedinvariousleadershippositions,includingSeniorVicePresident,NortheastRegionfrom1995to2000;ExecutiveVicePresident,Operationsfrom2000to2002;President,NorthAmericafrom2003to2009;GroupPresidentfrom2009to2011;andChiefOperationsOfficerfromDecember2011untilFebruary2014.Mr.McCarthyhasservedasChairmanofHotelDevelopmentPartnerssinceMarch2014.HecurrentlyisamemberoftheBoardofTrusteesatVillanovaUniversityandamemberoftheBoardofPriton,LLC.Previously,Mr.McCarthyservedasadirectoroftheServiceSourceFoundation,asamemberoftheboardoftheAutismLearningCenter,asamemberoftheDean’sAdvisoryBoardatCornellUniversitySchoolofHotelAdministration,asamemberoftheDean’sAdvisoryBoardatVillanovaUniversitySchoolofBusinessandasamemberoftheboardofmanagersatAvendra,LLC.Heholdsabachelor’sdegreeinbusinessadministrationfromVillanovaUniversityandisagraduateoftheAdvancedManagementProgramattheWhartonSchoolofBusinessattheUniversityofPennsylvania.Mr.McCarthyhasextensivemanagerialandfinanceexperience,andwebelieveheisqualifiedtoserveontheBoard.

WILLIAMF.MUIR


COMMITTEES

»Audit(Chair)

»Risk

EXPERIENCEIn2014,Mr.MuirretiredfromAllyFinancialInc.(formerlyknownasGeneralMotorsAcceptanceCorporation(“GMAC”)),whereheservedasPresidentandheadofitsGlobalAutomotiveServicesbusinesssince2004.Inthatrole,heledAlly’sautomotivefinance,insurance,vehicleremarketingandservicingoperations.Priortothattime,heservedasExecutiveVicePresidentandChiefFinancialOfficerofGMACfrom1998to2004.From1996to1998,Mr.Muirservedasexecutive-in-chargeofoperationsandthenexecutivedirectorofplanningatDelphiAutomotiveSystems,aformersubsidiaryofGeneralMotors(“GM”).PriortoservingatDelphiAutomotiveSystems,heservedinvariousexecutivecapacitiessincefirstjoiningGMACin1992andalsoservedinanumberofcapacitieswithGMsincejoiningGMin1983.Mr.MuiralsoservedasChairmanoftheAllyInsuranceGroupfrom1999to2014andamemberoftheAllyBankboardofdirectorsfrom2004to2014.Mr.Muirreceivedabachelor’sdegreeinindustrialengineeringandoperationsresearchfromCornellUniversityin1977.Heearnedamaster’sdegreeinbusinessadministrationfromHarvardUniversityin1983.Mr.Muirhasextensiveexperienceinmanagement,financeandtheautofinanceindustry,andwebelievethatheisqualifiedtoserveontheBoard.


11

Table of Contents


SCOTTPOWELL


EXPERIENCEMr.PowellhasservedastheChiefExecutiveOfficerandadirectorofSHUSAsinceMarch2015,andheisamemberofSHUSA’sBoardExecutiveCommittee.HehasalsoservedasChiefExecutiveOfficerandadirectorofSBNAsinceJuly2015,andheisamemberofSBNA’sBoardExecutiveCommittee.Previously,Mr.PowellheldnumerousmanagementrolesatJPMorganChase&Co.anditspredecessorBankOneCorporation,includingHeadofBankingandConsumerLendingOperations,ChiefExecutiveOfficerofConsumerBankingandRetailInvestments,HeadofConsumerLending,andChiefRiskOfficer,Consumer.Healsospent14yearsatCitigroupanditspredecessorsinseniorriskmanagementpositions.Mostrecently,beforejoiningSHUSA,Mr.PowellwasExecutiveChairmanofNationalFloodServicesInc.Mr.PowellisadirectorofthePhippsHousesandTheEndFundinNewYorkCity.Mr.PowellgraduatedfromtheUniversityofMinnesotaandreceivedamaster’sdegreeinbusinessadministrationfromtheUniversityofMaryland.Mr.Powellhasextensiveexperienceinmanagement,finance,riskmanagementandconsumerandautolending,andwebelieveheisqualifiedtoserveontheBoard.

WILLIAMRAINER


ChairmanoftheBoard

COMMITTEES

»Executive(Chair)

EXPERIENCEMr.Rainerhasextensiveexperienceandhasheldnumerousleadershiprolesinthefinancialservicesindustry.From2001to2004,Mr.RainerservedastheChairmanandChiefExecutiveOfficerofOneChicago,LLC,aregulatedfuturesexchange.HealsoservedastheChairmanoftheCommodityFuturesTradingCommissionfrom1999to2001,asChairmanoftheUnitedStatesEnrichmentCorporationfrom1994to1998,andasFounderofGreenwichCapitalMarkets,Inc.from1981to1988.Previously,Mr.RainerheldvariousleadershippositionsatKidder,Peabody&Co.,Inc.FromJuly2015toMarch2016,heservedasadirectorofBancoSantanderInternational(“BSI”),andfromDecember2015toMarch2016,heservedaschairmanoftheboardofSIS.Mr.RainerservedasdirectorofIQFunds,afamilyofclosed-endmutualfunds,from2004until2010.From1996to2000andfrom2004to2008,Mr.RainerservedasatrusteeforSouthernMethodistUniversity.HehasservedasamemberoftheDean’sCounciloftheHarvardDivinitySchoolsince2003andasitsChairfrom2005throughJune2013.HeiscurrentlytheChairmanofShortridgeAcademy,Ltd.andNewBraunfelsCommunications,Inc.Mr.Rainerreceivedhisbachelor’sdegreeineconomicsandmaster’sdegreeinbusinessadministrationfromSouthernMethodistUniversity.Mr.Rainerhasextensiveknowledgeandexperienceinfinance,regulatoryaffairs,andleadershipoffinancialservicesfirms,andwebelieveheisqualifiedtoserveontheBoard.

12


Table of Contents

CORPORATEGOVERNANCE-DIRECTORINDEPENDENCE DirectorIndependence

DIRECTOR

ORGANIZATION

RELATIONSHIP

SCTRANSACTION/RELATIONSHIP

Mr.Ferriss

SHUSA Director

MajorityStockholder

SBNA FormerDirector

Affiliate

SantanderCentralHispanoInvestmentServices,Inc.

FormerCEO

Affiliate

SantanderBanCorp ChairmanoftheBoard

Affiliate

BancoSantanderPuertoRico ChairmanoftheBoard

Affiliate

Ms.Holiday

SC

IndependentAdvisor

During2016,SCpaidMs.Holiday$18,739foradvisoryservicestotheBoardpriortoherappointmentas

adirector.

Mr.Muir

SC

IndependentAdvisor

During2016,SCpaidMr.Muir$18,739foradvisoryservicestotheBoardprior

tohisappointmentasadirector.

Mr.Rainer BSI FormerDirector

Affiliate

SIS FormerChairman

Affiliate


13

Becauseweareacontrolledcompany,weareexemptfromtherequirementintheNewYorkStockExchange(“NYSE”)ListedCompanyRulesthatamajorityofourdirectorsmustbeindependent.Inaddition,weareexemptfromtherequirements(i)thatourExecutiveCommittee(whichhastheresponsibilitiesunderitscharterofaNominatingandGovernanceCommittee)becomposedsolelyofdirectorswhomeettheindependencestandardsundertheNYSEListedCompanyRulesand(ii)thatourCompensationCommitteebecomposedsolelyofdirectorswhomeetadditional,heightenedindependencestandardsundertheNYSEListedCompanyRulesandtherulesoftheSecuritiesandExchangeCommission(“SEC”).TheCompanyissubjecttotherequirementthatallmembersofourAuditCommitteesatisfyindependencerequirementssetforthundertheNYSEListedCompanyRulesandmeettheadditionalcriteriaforindependenceofauditcommitteememberssetforthinRuleof10A-3(b)(1)undertheSecuritiesExchangeActof1934(the“ExchangeAct”).

UndertheNYSEListedCompanyRules,tobeconsideredindependent,thedirectormustnothaveadisqualifyingrelationship,asdefinedintheNYSEListedCompanyRules;andtheBoardmustaffirmativelydeterminethatthedirectorotherwisehasnodirectorindirectmaterialrelationshipwiththeCompany.Inmakingindependencedeterminations,theBoardcomplieswithallNYSEandSECcriteriaandconsidersallrelevantfactsandcircumstances.TheBoardhasdeterminedthatMr.Ferriss,Ms.Holiday,Mr.Hurley,Mr.McCarthy,Mr.MuirandMr.Rainer(the“IndependentDirectors”)areindependentasdefinedbytheNYSEListedCompanyRules.TheBoardalsodeterminedthatBlytheMastersandHeidiUeberroth,eachofwhomresignedfromtheBoardduring2016,andWolfgangSchoellkopf,whoresignedfromtheBoardin2017,wereindependentasdefinedbytheNYSEListedCompanyRules.

InassessingtheindependenceoftheIndependentDirectors,theBoardconsidered,withoutlimitation,thefollowingtransactions,relationshipsandarrangements:

TheBoardhasalsodeterminedthateachmemberoftheAuditCommittee(Mr.Ferriss,Mr.Hurley,Mr.McCarthyandMr.Muir)isan“auditcommitteefinancialexpert”inaccordancewiththe

definitionestablishedbytheSEC.Further,allofthedirectors,exceptforMr.Kulas(the“OutsideDirectors”),qualifyasoutsidedirectorsasdefinedbytheNYSEListedCompanyRules.

Table of Contents

CORPORATEGOVERNANCE-BOARDLEADERSHIPSTRUCTUREANDRISKOVERSIGHT

BoardLeadershipStructureandRiskOversight

14


TheBoardisresponsiblefortheoversightofmanagementonbehalfofourstockholders.TheBoardanditscommitteesmeetperiodicallythroughouttheyearto(i)reviewstrategy,businessandfinancialperformance,riskandcontrolmatters,andcompensationandmanagementdevelopment,and(ii)provideguidancetoandoversightof,andotherwiseassessandadvise,theCEOandotherseniorexecutives.TheBoard’sleadershipstructure,describedbelow,isdesignedtoensurethatauthorityandresponsibilityareeffectivelyallocatedbetweentheBoardandmanagement.

TheBoarddoesnothaveanyformalpolicyonwhetherthesamepersonshouldserveasboththeCEOandChairmanoftheBoard,astheBoardbelievesthatitshouldhavetheflexibilitytomakethedeterminationoftheappropriateleadershipforusatanygivenpointintime.InJuly2015,theBoarddecidedtoseparatethepositionsofChairmanoftheBoardandCEO.Currently,Mr.RainerservesastheindependentChairmanofourBoard.WebelievethathavinganindependentChairmancancreateanenvironmentthatleadstoobjectiveevaluationandoversightofmanagement’sperformance,increasesmanagementaccountabilityandimprovestheabilityoftheBoardtomonitorwhethermanagement’sactionsareinthebestinterestsofallstockholders.Asaresult,atthistime,webelievethatMr.RainerservingasourindependentChairmanenhancestheeffectivenessoftheBoardasawhole.TheBoardwillcontinuetoreviewtheBoard’sleadershipperiodicallyandmaymodifythisstructurefromtimetotimeifitisinthebestinterestsofourCompanyandourstockholders.

TheChairmanoftheBoardleadstheBoard,setsthetoneforitscultureandensuresitseffectivenessinoverseeingtheCompanyanditsmanagement.TheChairmanpresidesatallmeetingsoftheBoard,aswellasexecutivesessionsofoutsidedirectorsand,inconsultationwiththeCEO,otherdirectorsandmanagement,establishestheagendaforeachBoardmeeting.TheChairmanalsohasthepowertocallspecialmeetingsoftheBoard.Mr.FerrissservesastheBoard’sVice-Chairman,whoactsasChairmanoftheBoardifMr.Rainerisabsent.

TheCompanyhasestablishedariskgovernancestructurethatassignsresponsibilityforriskmanagementamongfront-linebusinesspersonnel,anindependentriskmanagementfunction,andinternalaudit.Accordingtothismodel,businessownersmaintainresponsibilityforidentifyingandmitigatingtherisksgeneratedthroughtheirbusinessactivities.TheChiefRiskOfficer(“CRO”),whoreportstotheCEOandisindependentofanybusinessline,isresponsiblefordevelopingandmaintainingariskframeworkthatensuresrisksareappropriatelyidentifiedandmitigated,andforreportingontheoveralllevelofriskintheCompany.TheCROisalsoaccountabletotheRiskCommitteeandtoSHUSA’sChiefRiskOfficer.TheCROischargedwiththeimplementationandexecutionoftheenterpriseriskmanagement(“ERM”)programundertheoversightoftheBoardanditscommittees.

RiskmanagementisoverseenbytheBoardthroughfourstandingcommittees:theRiskCommittee,theAuditCommittee,theCompensationCommitteeandtheRegulatoryandComplianceOversightCommittee,eachofwhichischairedbyanindependentdirector.Committeechairsareresponsibleforcallingmeetingsoftheircommittees,presidingatmeetingsoftheircommittees,

approvingagendasandmaterialsfortheircommitteemeetings,servingasaliaisonbetweencommitteemembersandtheBoard,andbetweencommitteemembersandseniormanagement,includingtheCEOandCRO,andworkingdirectlywiththeseniormanagementresponsibleforcommitteematters.EachBoardcommitteeprovidesregularreportstotheBoardregardingmattersreviewedbytheBoardcommittee.

Inadditiontoreceivinganddiscussingreportsofrisksunderthepurviewofaparticularcommittee,theBoardmonitorsourriskcultureandreviewsspecificandaggregateriskstheCompanyfaces.Further,atleastannually,theBoardapproves,attherecommendationoftheRiskCommittee,aRiskAppetiteStatement(a“RAS”),whichdefinesthelevelsandtypesofriskstheCompanyiswillingtoassumetoachieveitsbusinessplanswhilecontrollingriskexposureswithinourriskcapacity.Inaddition,theRASestablishesprinciplesforrisktakingintheaggregateandforeachrisktype,andissupportedbyacomprehensivesystemofrisklimits,escalationtriggersandcontrolprograms.

TheRiskCommitteeischargedwithresponsibilityforestablishinggovernanceovertheERMprocess,providingoversightofriskpoliciesandriskmanagementperformance.TheRiskCommitteemonitorsouraggregateriskpositionandreviewsreportsfrommanagementonthecomprehensiveportfolioofriskcategoriesandthepotentialimpacttheseriskscanhaveonourriskprofile.AcomprehensiveriskreportissubmittedregularlybytheCROtotheRiskCommitteeandtotheBoardprovidingmanagement’sviewofourriskposition.Further,theRiskCommitteereviewsandrecommendsfortheBoard’sapprovaltheRASandanERMPolicyalongwithvarioussub-policiesgoverning,withoutlimitation,enterpriserisk,creditrisk,informationrisk,marketandliquidityrisk,operationalrisk,modelriskandstrategicrisk.TheRiskCommitteealsoprovidesoversightofourimpactonSHUSA’scompliancewithitscapitaladequacyassessmentprocess,includingitsComprehensiveCapitalandReview(“CCAR”)submissionsandresolutionplanning.TheRiskCommitteealsoreviewsandconcursintheappointment,replacement,performanceandcompensationoftheCRO.

TheAuditCommitteeischargedwithoversightrelatingtotheintegrityofourfinancialstatementsandfinancialreportingprocess,theintegrityofoursystemsofinternalaccountingandfinancialcontrolsandinternalandexternalauditing,includingthequalificationsandindependenceofourindependentregisteredpublicaccountingfirm.TheAuditCommitteeoverseestheperformanceofourinternalauditfunction,reviewsandconcursintheappointment,replacement,performanceandcompensationofourChiefAuditExecutiveandapprovesourinternalauditfunction’sannualauditplan,charter,policiesandbudget.TheAuditCommitteealsoreceivesregularupdatesontheauditplan’sstatusandresultsincludingsignificantreportsissuedbyourinternalauditfunctionandthestatusofmanagement’scorrectiveactions.TheAuditCommitteealsoreviewsriskmanagementpoliciesandproceduresrelatedtofinancialandaccountingmatters,including,withoutlimitation,ourSupplementalStatementofEthicsandCodeofEthicsfortheCEOandSeniorFinancialOfficers.

Table of Contents

CORPORATEGOVERNANCE-BOARDCOMMITTEES

BoardCommittees

NAMEAUDIT

COMPENSATION

EXECUTIVE

REGULATORYANDCOMPLIANCE

OVERSIGHT

RISK

StephenA.Ferriss ● Chair ●

BrianGunn ●

VictorHill ● ●

EdithE.Holiday ● ●

MarkP.Hurley ● ● Chair

JasonA.Kulas ●

JavierMaldonado ● ● ●

RobertJ.McCarthy ● ● Chair

WilliamF.Muir Chair ●

WilliamRainer Chair


15

TheCompensationCommitteeworkstoensurethatthecompensationprogramscoveringourexecutives,businessunitsandrisk-takingemployeesappropriatelybalanceriskwithincentivessuchthatbusinessperformanceisachievedwithouttakingimprudentoruneconomicrisks.Atleastannually,theCompensationCommitteeconductsanassessmentofthecompensationpoliciesandpracticesforouremployees,includingourexecutiveofficers.TheassessmentincludeswhethersuchcompensationpoliciesandpracticescreatedrisksthatwerereasonablylikelytohaveamaterialadverseeffectontheCompany.

TheRegulatoryandComplianceOversightCommitteeischargedwiththeoversightofriskrelatingtotheeffectivenessofourcompliancemanagementsystem.TheRegulatoryandComplianceOversightCommitteealsooverseesourprogressinremediatingrisksidentifiedinriskassessmentfindings,internalauditfindingsandoutstandingcorrectiveactionsidentifiedbyregulatorsinexaminationreports,enforcementactionsandothercommunications.

InadditiontotheBoardandBoardcommittees,theCEOandCROdelegateriskmanagementresponsibilitytomanagementcommitteesincludingtheEnterpriseRiskManagementCommittee(“ERMC”),whichisco-chairedbyourCEOandCRO.TheERMCisresponsibleforERMgovernanceandoversight.TheERMCmaintainsandmonitorscompliancewiththeRASandthelimitsandescalationsdefinedinit.TheERMCoverseesimplementationofriskpoliciesacrosstheCompanywithapprovalbytheBoardortheappropriateBoardcommittee.TheERMCalsoreviewsandreportstotheBoardorappropriateBoardcommitteesonkeyriskexposures,trends,andconcentrationsandsignificantcompliancemattersandprovidesguidanceonthestepstomonitor,controlandreportmajorrisks.

Inaddition,theAssetLiabilityCommittee(“ALCO”)isresponsibleformanagingmarket,liquidityandassetandliabilityrisks.ALCOischairedbytheCFO,andtheCROisamemberofALCO.

TheBoardhasfivestandingcommittees:theAuditCommittee;theCompensationCommittee;theExecutiveCommittee;theRegulatoryandComplianceOversightCommittee;andtheRisk

Committee.ThechartersforeachcommitteemaybefoundonSC’swebsiteathttp://investors.santanderconsumerusa.com.

Table of Contents


Thefollowingsummarizesthemembershipofeachcommittee,aswellastheprimaryrolesandresponsibilitiesofeachcommitteeandthenumberoftimeseachcommitteemetin2016.

AUDITCOMMITTEE

NUMBEROFMEETINGSIN2016:22

MEMBERS

AMONGOTHERTHINGS,OURAUDITCOMMITTEE:

»Mr.Muir(Chair)

»Mr.Ferriss

»Mr.Hurley

»Mr.McCarthy

» Reviewsfinancialreportingpolicies,procedures,andinternalcontrols.

»

Administerstheappointment,compensation,andoversightofourindependentregisteredpublicaccountingfirm.

»

Pre-approvesaudit,audit-related,andnon-auditservicestobeperformedbyourindependentregisteredpublicaccountingfirm.

»

Reviewsandapprovesorratifiesallrelated-partytransactions.

»

Overseesourinternalauditfunction,includingapprovaloftheannualinternalauditplanandthereviewoftheperformanceoftheChiefAuditExecutive.

»

Reviewscertainriskmanagementpoliciesandprocedures,certainpolicies,processes,andproceduresregardingcompliancematters,aswellasourSupplementalStatementofEthicsandCodeofEthicsfortheChiefExecutiveOfficerandSeniorFinancialOfficers.

TheBoardhasdeterminedthateachofthemembersis“independent”asdefinedbySection10A(m)(3)oftheExchangeAct,Rule10A-3undertheExchangeAct,andtheNYSEListedCompanyRules.TheBoardhasalsodeterminedthateachofthemembersis“financiallyliterate”asrequiredbySection303A.07oftheNYSEListedCompanyRulesandan“auditcommitteefinancialexpert”asdefinedintheSEC’srules.

COMPENSATIONCOMMITTEE


MEMBERS

AMONGOTHERTHINGS,OURCOMPENSATIONCOMMITTEE:

»Mr.Ferriss(Chair)

»Ms.Holiday

»Mr.Maldonado

»Mr.McCarthy

» ReviewsandapprovesthecompensationoftheCEOandeachotherexecutiveofficer.

»

ReviewsandmakesrecommendationstotheBoardregardingthecompensationoftheIndependentDirectors.

»

Approvesandevaluatesallcompensationplans,policiesandprogramsoftheCompanyastheyaffectourdirectors,CEOandotherexecutiveofficers.

»

Setsperformancemeasuresandgoalsandverifiestheattainmentofperformancegoalsunderperformance-basedincentivecompensationarrangementsapplicabletoourexecutiveofficers.

»

Monitorsandassesseswhethertheoveralldesignandperformanceofourcompensationplans,policiesandprogramsdonotencourageemployees,includingourNEOs,totakeexcessiverisk.

»

Overseesthemanagementdevelopment,successionplanning,andretentionpracticesforourexecutiveofficers.

TheBoardhasdeterminedthatMr.Ferriss,Ms.Holiday,Mr.Maldonado,andMr.McCarthyqualifyas“outside”directorswithinthemeaningofInternalRevenueCodeSection162(m)(“Section162(m)”).TheBoardhasdeterminedthatMr.Ferriss,Ms.HolidayandMr.McCarthyare“independent”asdefinedbytheNYSEListedCompanyRulesandqualifyas“non-employee”directorswithinthemeaningofRule16b-3undertheSecuritiesExchangeActof1934,asamended(“Rule16b-3”).Mr.Ferriss,Ms.HolidayandMr.McCarthyconstituteasubcommitteeoftheCompensationCommitteewhenconsideringissuesgovernedbyRule16b-3.

16


Table of Contents


EXECUTIVECOMMITTEE


MEMBERS AMONGOTHERTHINGS,OUREXECUTIVECOMMITTEE:

»

»

»

»

Mr.Rainer(Chair)

Mr.Ferriss

Mr.Kulas

Mr.Maldonado

»

ActsontheBoard’sbehalfbetweenBoardmeetingsonallmattersthatmaybelawfullydelegated. »

ConsidersandrecommendscandidatesforelectiontotheBoard. »

LeadstheannualperformanceevaluationsoftheBoardandBoardcommittees.

»

ReviewsandadvisestheBoardonourcorporategovernance.

TheBoardhasdeterminedthatMr.RainerandMr.Ferrissare“independent”asdefinedbytheNYSEListedCompanyRules.

REGULATORYANDCOMPLIANCEOVERSIGHTCOMMITTEE


MEMBERS

AMONGOTHERTHINGS,OURREGULATORYANDCOMPLIANCEOVERSIGHTCOMMITTEE:

»

»

»

»

»

Mr.McCarthy(Chair)

Mr.Hill

Ms.Holiday

Mr.Hurley

Mr.Maldonado

»

Providesoversightandassessestheeffectivenessofourcompliancemanagementsystem.

»

OverseesourcompliancefunctionincludingtheChiefComplianceOfficer.

»

Overseesourprogressinrespondingtointernalauditfindings,riskassessmentfindings,andoutstandingcorrectiveactionsidentifiedbyregulatorsinexaminationreports,enforcementactionsandothercommunications.

»

ReviewsourregulatorycorrespondenceandreportsreceivedfromorsubmittedtoregulatorstoensureeffectivecommunicationbetweentheCompanyanditsrespectiveregulators.

TheBoardhasdeterminedthatMr.McCarthy,Ms.HolidayandMr.Hurleyare“independent”asdefinedbytheNYSEListedCompanyRules.

RISKCOMMITTEE


MEMBERS

AMONGOTHERTHINGS,OURRISKCOMMITTEE:

»

»

»

»

Mr.Hurley(Chair)

Mr.Gunn

Mr.Hill

Mr.Muir

»

Assessesandmanagesourenterpriserisk,creditrisk,marketrisk,operationalrisk,liquidityriskandotherriskmatters.

»

Providesoversightofourriskgovernancestructureinordertoevaluateandcontrolourrisks,includingtheapprovalofourRiskAppetiteStatement.

»

OverseesourriskmanagementfunctionincludingthereviewoftheperformanceoftheCRO.

»

Overseesandmanagesouractivitiesrelatedtocapitalplanningandanalysis.

TheBoardhasdeterminedthatMr.HurleyandMr.Muirare“independent”asdefinedbytheNYSEListedCompanyRules.


17

Table of Contents

CORPORATEGOVERNANCE-DIRECTORCOMPENSATION

DirectorCompensation

IndependentNon-EmployeeDirectorStockOwnershipGuidelines

18


EffectiveJuly15,2015,weadoptedadirectorcompensationprogramthatprovidedforthefollowingcompensationforindependentmembersoftheBoardofDirectors: » Anannualcashretainerof$100,000(paidquarterlyinarrears);plus

» AnannualgrantofrestrictedstockorRSUswithagrantdatefairmarketvalueequalto$50,000,vestingontheearlierofthe1stanniversaryofthegrantdateorthe1stAnnualStockholderMeetingfollowingthegrantdate(withthegrantdateoccurringatoraroundthestartoftheapplicabletermofservice);plus

» $70,000incashannuallyforservingasthechairofanycommitteeoftheBoard(paidquarterlyinarrears);plus

» $20,000incashannuallyforservingasanon-chairmemberofanycommitteeoftheBoard(paidquarterlyinarrears);plus

» $600,000incashannuallyifthedirectoralsoservesastheChairmanoftheBoard(paidquarterlyinarrears).

TheCompensationCommitteeperiodicallyreviewstheformandamountofdirectorcompensationandrecommendschangestotheBoard,asappropriate.Asaresultofitsreviewin2016,theCompensationCommitteerecommendedthattheBoardrevisetheindependentdirectorcompensationprogramtoreducetheadditionalcashretainerfortheChairmanoftheBoardfrom$600,000to$450,000.EffectiveOctober1,2016,theBoardapprovedtheCompensationCommittee’srecommendationtoreducetheadditionalcashretainerfortheChairmanoftheBoardfrom$600,000to$450,000.Therewerenootherchangestotheindependentdirectorcompensationprogramin2016.

Therevisedindependentdirectorcompensationprogramwasapprovedbyournon-independentdirectors,whodonotreceivecompensationfortheirserviceontheBoard.

Inordertoaligntheeconomicinterestsofourindependentnon-managementdirectorswiththoseofourstockholders,theBoardhasdeterminedthatourindependentdirectorsshouldholdameaningfulequitystakeinSC.Tothatend,ourIndependentNon-EmployeeDirectorStockOwnershipGuidelines(adoptedbytheBoardin2016)requireseachofourindependentdirectorstoacquireandretainsharesorshareequivalentsofourCommonStockwithatargetvaluenotlessthanfivetimestheannualequityretainer.

Thereisnorequiredtimeperiodwithinwhichanindependentdirectormustattaintheapplicablestockownershiptarget.However,untilthestockownershiptargetisachieved,theindependentdirectorswillberequiredtoretain100%ofallsharesofourCommonStockreceivedunderSC’sindependentdirectorcompensationprogram,aftertakingintoaccountanyapplicabletaxesdueonthevestingofthoseshares.

Asofthedatehereof,alldirectorsareincompliancewiththeIndependentNon-EmployeeDirectorStockOwnershipGuidelines.

Table of Contents

CORPORATEGOVERNANCE-DIRECTORCOMPENSATION DirectorCompensationTableforFiscalYear2016

NAME

FEESEARNEDORPAIDINCASH

($)

STOCKAWARDS(1)($)

ALLOTHERCOMPENSATION

($)

TOTAL($)

StephenA.Ferriss 153,425 50,000(7) — 203,425

EdithE.Holiday(2) 12,274 45,068(8) 18,739(10) 76,081

MarkP.Hurley(3) 92,826 58,219(9) — 151,045

BlytheMasters(4) 408,016 — 3,424(11) 411,440

RobertJ.McCarthy 160,000 50,000(7) — 210,000

WilliamF.Muir(2) 12,274 45,068(8) 18,739(10) 76,081

WilliamRainer 474,674 50,000(7) — 524,674

WolfgangSchoellkopf(5) 210,000 50,000(7) — 260,000

HeidiUeberroth(6) 168,856 — 16,986(11) 185,842

(1)Toalignourindependentdirectors’compensationwithstockholderinterests,eachindependentdirectorisgrantedaRSUawarduponelectionorre-election.In2016,exceptforMs.HolidayandMr.Muir,eachRSUawardwasgrantedonNovember1,2016.TheawardsforMs.HolidayandMr.MuirweregrantedonDecember7,2016.Eachawardwillvestupontheearlierof(i)thefirstanniversaryofthegrantdateand(ii)thefirstannualstockholdermeetingfollowingthegrantdate.ThiscolumnrepresentstheaggregategrantdatefairvaluecomputedinaccordancewithFASBASCTopic718,basedontheclosingpriceofourCommonStockontheapplicablegrantdate,butexcludingtheeffectofpotentialforfeitures.

(2)Ms.HolidayandMr.MuirwereappointedtotheBoardonNovember29,2016.

(3)Mr.HurleywasappointedtotheBoardonApril17,2016.

(4)Ms.MastersresignedfromtheBoardeffectiveJuly12,2016.

(5)Mr.SchoellkopfresignedfromtheBoardeffectiveApril21,2017.

(6)Ms.UeberrothresignedfromtheBoardeffectiveOctober18,2016.

(7)RepresentsagrantofRSUsonNovember1,2016forserviceasanindependentdirectorfromthedirector’selectionatthe2016AnnualMeetingoftheStockholdersthroughthe2017AnnualMeetingoftheStockholders.TheRSUswillvestontheearlierof(i)thefirstanniversaryofthegrantdateand(ii)thefirstAnnualMeetingoftheStockholdersfollowingthegrantdate.

(8)RepresentsagrantofRSUsonDecember7,2016forserviceasanindependentdirectorfromthedirector’sappointmenttotheBoardonNovember29,2016throughthe2017AnnualMeetingoftheStockholders.TheRSUswillvestontheearlierof(i)thefirstanniversaryofthegrantdateand(ii)thefirstAnnualMeetingoftheStockholdersfollowingthegrantdate.

(9)RepresentsagrantofRSUsonNovember1,2016,withagrantdatefairmarketvalueof(i)$50,000forserviceasanindependentdirectorfromthedirector’selectionatthe2016AnnualMeetingoftheStockholdersthroughthe2017AnnualMeetingoftheStockholdersand(ii)$8,219forserviceasanindependentdirectorfromApril17,2016toJune15,2016(thedaybeforethe2016AnnualMeetingoftheStockholders).TheRSUswillvestontheearlierof(i)thefirstanniversaryofthegrantdateand(ii)thefirstAnnualMeetingoftheStockholdersfollowingthegrantdate.

(10)

RepresentscashpaidforserviceasanindependentcontractoradvisortotheboardfromOctober24,2016untilNovember29,2016.

(11)

RepresentscashpaymentstocompensateformerdirectorsfortheprorataportionofequityretainerearnedfromJune16,2016untiltheirresignationsfromtheBoard.


19

ThefollowingtableprovidesinformationregardingcompensationforeachindependentmemberoftheBoardin2016.Underour

independentdirectorcompensationprogram,onlyindependentdirectorsarecompensatedfortheirserviceontheBoard.

Table of Contents

CORPORATEGOVERNANCE-NOMINATIONOFDIRECTORS

NominationofDirectors

20


TheShareholdersAgreement,byandamongSC,SHUSA,ThomasG.Dundon,andcertainotherholdersofourCommonStock,whichwerefertoastheShareholdersAgreement,providesSHUSAwithspecialrightstonominatedirectorstotheBoardofDirectors.See“RelatedPartyTransactions—ShareholdersAgreement”forfurtherinformation.PursuanttotheShareholdersAgreement,SHUSAisentitledtonominateeightmembersofourBoard.TheShareholdersAgreementprovidesfurtherthatSHUSAmayremoveanydirectornominatedbySHUSAwithorwithoutcause.Inaddition,SHUSAhastherighttodesignateareplacementtofillavacancyontheBoardcreatedbythedepartureofadirectorthatwasnominatedbySHUSA,andwearerequiredtotakeallactionwithinourpowertocausesuchvacancytobefilledbysuchdesignatedreplacement(includingbypromptlyappointingsuchdesigneetotheBoard).

TheShareholdersAgreementprovidesthatMr.DundonwillserveasamemberoftheBoard(i)solongasMr.DundonistheCEOoftheCompanyor(ii)if(a)heownsatleast5%ofourthen-outstandingsharesofCommonStock(excludingsharesacquiredpursuanttoanyequity-basedcompensationplan)and(b)hisemploymentwasnotterminatedbytheCompanyforcauseorbyhimwithoutgoodreason(subjecttocertainexceptions)andhehascontinuedtocomplywithcertainprovisionsofhisemploymentagreementwiththeCompany.Mr.DundonvoluntarilyresignedfromtheBoardonApril1,2016.

WithrespecttodirectorsnotnominatedbySHUSA,theBoardisresponsibleforselectingnomineesforelectiontotheBoardbyourstockholders.Generally,theBoardbeginsidentifyingnomineesbyfirstevaluatingthecurrentmembersoftheBoardwillingtocontinueinservice.CurrentmembersoftheBoardwithskillsandexperiencethatarerelevanttoourbusinessandwhoarewillingtocontinueinserviceareconsideredforre-nomination.IfanymemberoftheBoarddoesnotwishtocontinueinserviceoriftheBoarddecidesnottore-nominateamemberforre-election,theBoardthenidentifiesthedesiredskillsandexperienceofanewnomineeinlightofthecriteriadescribedbelow.Generally,theBoardidentifiescandidatesfordirectornomineesinconsultationwithsittingmembersoftheBoardandwithmanagement,throughtheuseofsearchfirmsorotheradvisers,throughrecommendationssubmittedbyotherdirectorsorstockholdersandthroughsuchothermethodsastheBoarddeemsappropriate.Inidentifyingandevaluatingapotentialdirectornominee,theBoardconsiders,amongotherthings,thefollowingfactors:

» Ourneedswithrespecttotheparticulartalentsandexperienceofourdirectors;

» Thenominee’sknowledge,skillsandexperience,includingexperienceinfinance,administrationorpublicservice,inlightofprevailingbusinessconditionsandtheknowledge,skillsandexperiencealreadypossessedbyothermembersoftheBoard;

» Whetherthenomineeisindependent,asthattermisdefinedundertheNYSEListedCompanyRules;

» Thefamiliarityofthenomineewithourindustry; » Thenominee’sexperienceinlegalandregulatoryaffairs;

» Thenominee’sexperiencewithaccountingrulesandpractices;and

» ThedesiretobalancethebenefitofcontinuitywiththeperiodicinjectionofthefreshperspectiveprovidedbynewBoardmembers.

Initsidentificationandevaluationprocess,theBoardcollectsinformationaboutcandidatesthroughinterviews,detailedquestionnaires,backgroundchecksandothermeansthattheBoarddeemshelpfulinsuchprocess.

TheBoard’sgoalistoassembleaBoardthatbringstogetheravarietyofperspectivesandskillsderivedfromhighqualitybusinessandprofessionalexperience.Indoingso,theBoardwillalsoconsidercandidateswithappropriatenon-businessbackgrounds.

TheBoardisalsocommittedtodiversifiedBoardmembership.TheBoardwillnotdiscriminateonthebasisofrace,nationalorigin,gender,sexualorientation,religion,ordisabilityinselectingnominees.Diversityandinclusionarevaluesembeddedintoourcultureandarefundamentaltoourbusiness.Inkeepingwiththosevalues,whenassessingacandidate,theBoardconsidersthedifferentviewpointsandexperiencesthatacandidatecouldbringtotheBoardandhowthoseviewpointsandexperiencescouldenhancetheBoard’seffectivenessintheexecutionofitsresponsibilities.TheBoardisalsocommittedtoseekinghighlyqualifiedwomenandindividualsfromminoritygroupstoincludeinthepoolfromwhichnewcandidatesareselected.Inaddition,theBoardassessesthediversityoftheBoardandcommitteesasapartofitsannualself-evaluationprocess.

Otherthantheforegoing,therearenostatedminimumcriteriafordirectornominees.TheBoardmayalsoconsidersuchotherfactorsasitmaydeeminourbestinterestsandthebestinterestsofourstockholders.WealsobelieveitmaybeappropriateforkeymembersofourmanagementtoparticipateasmembersoftheBoard.

SubjecttotherightsofourmajoritystockholderandMr.Dundon,stockholdersmaynominatecandidatesforelectiontotheBoard.InordertonominateacandidateforelectiontotheBoard,stockholdersmustfollowtheproceduressetforthinourBylaws,includingtimelyreceiptbytheSecretaryoftheCompanyofnoticeofthenominationandcertainrequireddisclosureswithrespectbothtothenominatingstockholderandtherecommendeddirectornominee.Forcompletedescriptionoftherequirementsandproceduresforstockholdernominations,pleaserefertoourBylaws.

Directorsmaybeelectedbyapluralityofvotescastatanymeetingcalledfortheelectionofdirectorsatwhichaquorumispresent.ThepresenceofamajorityoftheholdersofourCommonStock,whetherinpersonorbyproxy,constitutesaquorum.TheBoarddidnotreceiveanyrecommendationsfromstockholders(otherthanSHUSA)requestingthattheBoardconsideracandidateforinclusionamongthenomineesinourProxyStatementforthisAnnualMeeting.However,ourpolicyisthatwewillconsideranysuchrecommendationaslongasthestockholdermakingtherecommendationprovidestoustheinformationconcerningtherecommendedindividualthatisrequiredunderourBylaws.

Table of Contents

EXECUTIVEOFFICERS

EXECUTIVEOFFICERS

NAME AGE POSITION

JasonA.Kulas 46 PresidentandChiefExecutiveOfficer

IsmailDawood 45 ChiefFinancialOfficer

RichardMorrin 47 ChiefOperatingOfficer

ChristopherPfirrman 57 ChiefLegalOfficerandGeneralCounsel

KalyanSeshan 49 ChiefRiskOfficer

DonaldGoin 46 ChiefInformationOfficer

MaryBarnes 66 ChiefComplianceOfficer

LisaVanRoekel 47 ChiefHumanResourcesOfficer


21

Thenames,ages,andcurrentpositionsofourexecutiveofficersasofthedateofthisProxyStatementarelistedinthetablebelow.Eachexecutiveofficer,includingtheCEO,iselectedbytheBoard.Eachexecutiveofficerholdsofficeuntilhisor

hersuccessoriselectedandqualified.Therearenofamilyrelationshipsamongtheexecutiveofficersnoristhereanyagreementorunderstandingbetweenanyofficerandanyotherpersonpursuanttowhichtheofficerwaselected.

JasonA.KulasPresidentandChiefExecutiveOfficerMr.Kulas’sbiographyisincludedunder“CorporateGovernance—Proposal1:ElectionofDirectors—InformationConcerningtheNominees”above.

IsmailDawoodChiefFinancialOfficerMr.DawoodjoinedusasourChiefFinancialOfficerinDecember2015.Priortojoiningus,Mr.DawoodservedasExecutiveVicePresidentandChiefFinancialOfficeroftheInvestmentServicesdivisionofTheBankofNewYorkMellonCorporation(“BNYMellon”)sinceApril2013,asExecutiveVicePresidentandDirectorofInvestorRelationsandFinancialPlanningandAnalysisofBNYMellonfromJune2009toMarch2013andasSeniorVicePresidentandGlobalHeadofCorporateDevelopmentandStrategyofBNYMellonfromNovember2006toMay2009.HealsoservedinvariousseniorrolesatWachoviaCorporation,wherehewasemployedfrom1994to2006,includingManagingDirectorofStructuredTreasuryActivitiesandManagingDirectorofCorporateDevelopment.Mr.Dawoodholdsamaster’sdegreeinbusinessadministrationfromtheWhartonSchoolofBusinessandabachelor’sdegreeinfinancefromSt.John’sUniversity,Jamaica(Queens),NewYorkandisaCharteredFinancialAnalyst(CFA)charterholder.

RichardMorrinChiefOperatingOfficerMr.MorrinhasservedasourChiefOperatingOfficersinceFebruary2016,havingjoinedusasourExecutiveVicePresident,NewBusinessinAugust2011.Priortojoiningus,Mr.Morrinheldavarietyofmanagementpositionsin21yearsofcombinedserviceatAllyFinancialandGeneralMotorsAcceptanceCorp.Mostrecently,hemanagedthecommerciallendingoperationsforAllyautomotivedealersintheUnitedStatesandCanada.Mr.MorrinisalsoamemberoftheboardofdirectorsofSantanderConsumerInternationalPuertoRico,LLC,awholly-ownedsubsidiaryofSCIllinois(“SCI”).Heholdsabachelor’sdegreeineconomicsfromtheUniversityofPennsylvaniaandamaster’sdegreeinbusinessadministrationfromtheUniversityofVirginia.

ChristopherPfirrmanChiefLegalOfficerandGeneralCounselMr.PfirrmanhasservedasourChiefLegalOfficerandGeneralCounselSinceSeptember2015.(HistitlechangedfromSeniorChiefLegalOfficerandGeneralCounselinDecember2016.)HewaspreviouslyemployedbySHUSA,andmostrecently,servedasSeniorExecutiveVicePresidentandGeneralCounselofSHUSAandofSBNAfromJanuary2012toSeptember2015.HeservedasSBNA’sSeniorVicePresidentandDeputyGeneralCounselfrom2000toJanuary2012,andhewasanattorneyinthelawfirmofEdwards&Angell,LLP(nowLockeLordLLP)from1996to2000.Hereceivedabachelor’sdegreefromFairfieldUniversityinConnecticutandaJurisDoctoratefromtheCollegeofWilliamandMaryinVirginia.HeisamemberoftheMassachusettsandConnecticutbars.

Table of Contents

EXECUTIVEOFFICERS

22


KalyanSeshanChiefRiskOfficerMr.SeshanhasservedasourChiefRiskOfficersinceSeptember2015.Priortojoiningus,heservedasSeniorVicePresidentandChiefRiskOfficerofNationstarMortgagefromNovember2013toSeptember2015.Mr.SeshanwaspreviouslyemployedbyJPMorganChaseasSeniorVicePresidentandHeadofDefaultStrategiesofMortgageCapitalMarketsfromOctober2010toNovember2013;ChiefRiskOfficerofMortgageDefaultfromApril2009toOctober2010;andChiefRiskOfficerofChaseAutoandEducationFinancefromOctober2007toApril2009.Hereceivedamaster’sdegreeinbusinessadministrationfromtheIndianInstituteofManagementandabachelor’sdegreeinmathematicsfromLoyolaCollege,MadrasUniversity.

DonaldGoinChiefInformationOfficerMr.Goinre-joinedusasourChiefInformationOfficerinAugust2015havingservedasourChiefInformationOfficerfromJanuary2003toSeptember2011.HewasemployedbyCapitalOneFinancialServicesasDigitalOperationsOfficerfromMarch2014toAugust2015,byCapitalOneAutoFinanceasManagingVicePresident,CustomerOperationsfromMarch2013toMarch2014andasChiefInformationOfficerfromSeptember2011toMarch2013.Priortojoiningus,heheldavarietyofconsultingandtechnologymanagementrolesatRaytheonE-Systems,SouthwestAirlinesandIONATechnologies.HecurrentlyservesontheSt.JudeCharitiesTechnologyAdvisoryCouncil.Mr.GoinpursuedgraduatestudiesatDukeUniversityandreceivedabachelor’sdegreeincomputersciencefromtheUniversityofTexasatDallas.Mr.GoinservedhonorablyintheUnitedStatesMarineCorps.

MaryBarnesChiefComplianceOfficerMs.BarneshasservedasourChiefComplianceOfficersinceJanuary2017,havingjoinedusasourSeniorVicePresident,ConsumerComplianceinApril2016.Previously,Ms.Barnesservedasaconsultant,providingcomplianceandriskmanagementconsultingservicestolargefinancialinstitutionswithaspecialemphasisoncomprehensivecompliancegovernance,controls,assessment,mitigationandremediation,withTreliantRiskAdvisorsasaSeniorAdvisorfrom2013to2016andwithNorthHighlandCompanyasaPrincipalfrom2011-2013.Priortothat,sheservedasacomplianceandriskmanagementprofessionalwithvariouscompanies,includingKPMGLLP,whereshewasaPrincipalintheRiskAdvisorypractice,andBankofAmerica,whereshewasaSeniorVicePresident.Ms.Barnesearnedabachelor’sdegreeinindustrialengineeringfromtheUniversityofTexasatArlington.

LisaVanRoekelChiefHumanResourcesOfficerMs.VanRoekelhasservedasourChiefHumanResourcesOfficersinceMarch2016,havingpreviouslyservedasourHeadofHumanResourcesfrom2006to2009.Previously,sheservedastheInterimChiefHumanResourcesOfficerofSHUSAfromDecember2015toFebruary2016;astheChiefHumanResourcesOfficerofSBNAfromDecember2013toFebruary2016;andastheDeputyManagingDirector,HumanResourcesofSBNAfromJuly2012toDecember2013.Ms.VanRoekelisalsoamemberoftheboardofdirectorsofSCI.Sheholdsabachelor’sdegreeandamaster’sdegreeinjournalismfromEastTexasStateUniversity.

Table of Contents

AUDIT-PROPOSAL2:RATIFICATIONOFAPPOINTMENTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM

AUDIT

Proposal2: RatificationofAppointmentofIndependentRegisteredPublicAccountingFirm

WHATYOUAREVOTINGON:

WeareaskingourstockholderstoratifytheappointmentofPricewaterhouseCoopersLLPasourindependentregisteredpublicaccountingfirmfor2017.


23

OurAuditCommitteeisresponsiblefortheappointment,compensation,retention,andoversightoftheindependentregisteredpublicaccountingfirmretainedtoperformtheauditofourfinancialstatementsandourinternalcontroloverfinancialreporting.TheAuditCommitteehasappointedtheaccountingfirmofPwCtoserveastheCompany’sindependentregisteredpublicaccountingfirmforthefiscalyearendingDecember31,2017.

StockholderRatificationofAppointmentofIndependentRegisteredPublicAccountingFirmAproposaltoratifytheappointmentofPwCtoserveasourindependentregisteredpublicaccountingfirmforthefiscalyearendingDecember31,2017willbepresentedattheAnnualMeeting.RepresentativesofPwCareexpectedtobepresentatthemeeting.Theywillhavetheopportunitytomakeastatementiftheydesiretodosoandwillbeavailabletorespondtoappropriatequestionsfromstockholders.

StockholderratificationoftheselectionofPwCasourindependentregisteredpublicaccountingfirmisnotrequiredbyourBylawsorotherapplicablelegalrequirement.However,theBoardissubmittingtheselectionofPwCtoourstockholdersforratificationasamatterofgoodcorporategovernance.Ifourstockholdersfailtoratifytheselection,theAuditCommitteewillreconsiderwhetherornottoretainthatfirm.Eveniftheselectionisratified,theAuditCommitteeatitsdiscretionmaydirecttheappointmentofadifferentindependentregisteredpublicaccountingfirmatanytimeduringtheyearifitdeterminesthatsuchachangewouldbeinourbestinterestsandourstockholders’bestinterests.

TheaffirmativevoteoftheholdersofamajorityofthesharesofCommonStockentitledtovoteonthismatterattheAnnualMeeting,whetherinpersonorrepresentedbyproxy,willapprovetheproposaltoratifyPwCasourindependentregisteredaccountingfirmforthefiscalyearendingDecember31,2017.

PriorChangeinAuditorIn2015,theAuditCommitteedecidedtoopentheannualindependentauditorselectionprocesstoseveralindependentregisteredpublicaccountingfirms,includingourpreviousauditor,Deloitte&ToucheLLP(“Deloitte”)andourcurrentauditorPwC.

TheAuditCommittee,withtheassistanceofmanagement,performedanevaluationoffirmstodeterminetheCompany’sindependentauditorforthe2016fiscalyear.Asaresultofthisprocess,onDecember9,2015,theAuditCommitteeformallyapprovedtheengagementofPwCasourindependentauditorforthefiscalyearendingDecember31,2016.OnDecember9,2015,weinformedDeloittethatitwasbeingdismissedasourindependentauditor.

DeloitteservedasourindependentauditorforthefiscalyearsendedDecember31,2014andDecember31,2015.ThereportsofDeloitteonourconsolidatedfinancialstatementsforthefiscalyearsendedDecember31,2014andDecember31,2015didnotcontainanadverseopinionoradisclaimerofopinion,norweretheyqualifiedormodifiedastouncertainty,auditscope,oraccountingprinciples.DuringthefiscalyearsendedDecember31,2014andDecember31,2015therewere:(i)nodisagreementswithDeloitteonanymatterofaccountingprinciplesorpractices,financialstatementdisclosures,orauditingscopeorprocedures,whichdisagreements,ifnotresolvedtothesatisfactionofDeloittewouldhavecausedDeloittetomakereferencetothesubjectmatterofthedisagreementsinconnectionwithitsreports,and(ii)no“reportable”eventsasthattermisdefinedinItem304(a)(1)(v)ofRegulationS-K,exceptforamaterialweaknessinourinternalcontroloverfinancialreportingasofJune30,2015inconnectionwiththepreparationandreviewofourCondensedConsolidatedStatementofCashFlows(“SCF”)ReportandasofDecember31,2015,materialweaknessesinconnectionwiththepreparationofourSCFaswellasourcreditlossallowancemethodology,ouridentificationofloansmodifiedastroubleddebtrestructurings,ourcreditlossallowancemodelsandourcontrolenvironment.InformationregardingthematerialweaknesseswasdescribedinManagement’sReportonInternalControlsoverFinancialReportingincludedinItem9AofourAnnualReportonForm10-KfortheyearendedDecember31,2015,asfiledwiththeSEC.DeloittediscussedthesecontroldeficiencieswiththeAuditCommittee,andtheAuditCommitteeauthorizedDeloittetodiscusssuchcontroldeficiencieswithPwCandtorespondfullytoanyinquiriesofPwCregardingsuchcontroldeficiencies.

DuringourfiscalyearsendedDecember31,2014andDecember31,2015,neitherwe,noranyoneonourbehalf,consultedPwCwithrespectto:(i)theapplicationofaccountingprinciplestoaspecifiedtransaction,eithercompletedorproposed,orthetypeofauditopinionthatmightberenderedonourconsolidated

Table of Contents

AUDIT-AUDITFEESANDRELATEDMATTERS

THEBOARDOFDIRECTORSUNANIMOUSLYRECOMMENDS

AVOTEFORTHERATIFICATIONOFOURAPPOINTMENTOFPWCASOURINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM

FORTHECURRENTFISCALYEAR.

AUDITFEESANDRELATEDMATTERSAuditandNon-AuditFees

(1)Representsfeesbilled,orexpectedtobebilled,fortheauditofourfinancialstatementsincludedinourAnnualReportonForm10-K,reviewoffinancialstatementsincludedinourQuarterlyReportsonForm10-Q,andtheauditofourinternalcontroloverfinancialreporting.

(2)Representsfeesbilled,orexpectedtobebilled,forassurancerelatedservices.Suchservicesduring2016and2015principallyincludedattestationreportsrequiredunderservicesagreements,consenttousetheauditor’sreportinconnectionwithvariousdocumentsfiledwiththeSEC,comfortlettersissuedtounderwritersforsecuritiesofferingsandcertainotheragreeduponprocedures.

(3)Representsfeesbilled,orexpectedtobebilled,fortaxcompliance,taxadviceandtaxplanning.

(4)Includesfeesforservicesin2016relatingtotheauditofourfinancialstatementsincludedinourFiscalYear2015AnnualReportonboth(i)Form10-K,asfiledwiththeSEConMarch31,2016and(ii)Form10-K/A,asfiledwithSEConOctober27,2016.

AuditCommitteePre-ApprovalofAuditandNon-AuditServicesofIndependentAuditor

24


financialstatements,andneitherawrittenreportwasprovidedtousnororaladvicewasprovidedtousthatPwCconcludedwasanimportantfactorconsideredbyusinreachingadecisionastotheaccounting,auditing,orfinancialreportingissue;or(ii)anymatter

thatwaseitherthesubjectofadisagreement(asdefinedinItem304(a)(1)(iv)ofRegulationS-Kandtherelatedinstructions)orareportableevent(asdescribedinItem304(a)(1)(v)ofRegulationS-K).

ThefollowingtablespresentfeesforprofessionalauditservicesrenderedbyPwCandDeloitte,respectively,fortheauditsofourannualfinancialstatementsandtheeffectivenessofinternal

controlsfortheyearsendedDecember31,2016and2015,andfeesforotherservicesrenderedbyPwCandDeloitte,respectively,during2016and2015.

PricewaterhouseCoopersLLP

2016

2015

AuditFees(1) $10,523,000 —

Audit-RelatedFees(2) $1,892,000 —

TaxFees(3) $210,000 —

AllOtherFees — —

Deloitte&ToucheLLP

2016

2015

AuditFees(1) — $5,889,452(4)

Audit-RelatedFees(2) — $1,255,532

TaxFees(3) — —

AllOtherFees — —

TheAuditCommitteehasimplementedprocedurestoensurethatallauditandpermittednon-auditservicesprovidedtousarepre-approvedbytheAuditCommittee.Specifically,theAuditCommitteepre-approvestheuseofanindependentaccountantforspecificauditandnon-auditservices,withinapprovedmonetarylimits.Ifaproposedservicehasnotbeenpre-approved,thenitmustbespecificallypre-approvedbytheAuditCommitteebeforeitmaybeprovidedbyourindependentaccountant.Anypre-approvedservicesexceedingthepre-approvedmonetarylimitsrequirespecificapprovalbytheAuditCommittee.The

AuditCommitteemaydelegatepre-approvalauthoritytooneormoreofitsmemberswhenexpeditionofservicesisnecessary.

Alloftheaudit-related,taxandallotherservicesprovidedbyeachofDeloitteandPwCtousin2016wereapprovedbytheAuditCommitteebymeansofspecificpre-approvalsorpursuanttoproceduresestablishedbytheAuditCommittee.TheAuditCommitteehasdeterminedthatallnon-auditservicesprovidedbyeachofDeloitteandPwCin2016werecompatiblewithmaintainingitsindependenceintheconductofitsauditingfunctions.

Table of Contents

AUDIT-REPORTOFTHEAUDITCOMMITTEE

REPORTOFTHEAUDITCOMMITTEE


25

ThisreportreviewstheactionstakenbyourAuditCommitteewithregardtoourfinancialreportingprocessduring2016andparticularlywithregardtoauditedconsolidatedfinancialstatementsasofDecember31,2016and2015andforeachofthethreeyearsendedDecember31,2016.

TheAuditCommitteeiscomprisedoffournon-managementdirectors.TheBoardhasdeterminedthateachmemberofourAuditCommitteehasnomaterialrelationshipwiththeCompanyundertheBoard’sdirectorindependencestandardsandthateachisindependentunderthelistingstandardsoftheNYSE,andtheSEC’sstandardsrelatingtotheindependenceofauditcommittees.TheBoardhasalsodeterminedthateachmemberisfinanciallyliterateandisan“auditcommitteefinancialexpert”asdefinedbytheSEC.

TheAuditCommitteeoperatesunderawrittencharteradoptedbytheBoardthatispublishedontheinvestorrelationssectionofSC’swebsiteathttp://investors.santanderconsumerusa.com.Weannuallyreviewourwrittencharterandourpractices.WehavedeterminedthatourcharterandpracticesareconsistentwiththelistingstandardsoftheNewYorkStockExchangeandtheprovisionsoftheSarbanes-OxleyActof2002.

ThepurposeoftheAuditCommitteeistoassistBoardoversightof(i)ourindependentregisteredpublicaccountingfirm’squalificationsandindependence,(ii)theperformanceoftheinternalauditfunctionandthatoftheindependentregisteredpublicaccountingfirm,(iii)management’sresponsibilitiestoassurethatthereisinplaceaneffectivesystemofcontrolsreasonablydesignedtosafeguardtheassetsandincomeoftheCompany,(iv)theintegrityofourfinancialstatements,and(v)compliancewithourethicalstandards,policies,plansandprocedures,andwithlawsandregulations.

WediscussedwithPwCthemattersrequiredtobediscussedbyPublicCompanyAccountingOversightBoard(“PCAOB”)AuditingStandardNo.1301(CommunicationswithAuditCommittees),includingPwC’soverallauditscopeandauditapproachassetforthinthetermsoftheirengagementletter;PwC’soverallauditstrategyforsignificantauditrisksidentifiedbythem;andthenatureandextentofthespecializedskillsnecessarytoperformtheplannedaudit.Inaddition,wemonitortheaudit,audit-relatedandtaxservicesprovidedbyPwC.DetailsofthefeespaidtoPwCcanbefoundinthisProxyStatementunder“Audit—AuditFeesandRelatedMatters”.

PwCprovidedusthewrittendisclosuresandtheletterrequiredbyPCAOB’sEthicsandIndependenceRule3526(CommunicationswithAuditCommitteesConcerningIndependence),andwediscussedandconfirmedwithPwCtheirindependence.WehaveconsideredwhetherPwC’sprovisionofanynon-auditservicestousiscompatiblewithmaintainingauditorindependence.Wehaveconcludedthattheprovision

ofanynon-auditservicesbyPwCwascompatiblewithPwC’sindependenceintheconductofitsauditingfunctions.

Managementisresponsibleforourinternalcontroloverfinancialreporting,thefinancialreportingprocessandourConsolidatedFinancialStatements.TheindependentauditorisresponsibleforperforminganindependentauditofourConsolidatedFinancialStatementsandoftheeffectivenessofinternalcontroloverfinancialreportinginaccordancewithauditingstandardspromulgatedbythePCAOB.OurInternalAuditDepartment,undertheChiefAuditExecutive,isresponsibletotheAuditCommitteeforpreparinganannualauditplanandconductinginternalauditsintendedtoevaluateourinternalcontrolstructureandcompliancewithapplicableregulatoryrequirements.ThemembersoftheAuditCommitteearenotprofessionallyengagedinthepracticeofaccountingorauditing;asnotedabove,theAuditCommittee’sresponsibilityistomonitorandoverseetheseprocesses.

Weregularlymeetandholddiscussionswithourmanagementandinternalauditorsandwiththeindependentauditor,includingsessionswiththeinternalauditorsandwiththeindependentauditorwithoutmembersofmanagementpresent.ManagementrepresentedtousthatourConsolidatedFinancialStatementswerepreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica(“U.S.GAAP”).WereviewedanddiscussedourConsolidatedFinancialStatementswithmanagementandPwC.

WealsodiscussedwithPwCthequalityofouraccountingprinciples,thereasonablenessofcriticalaccountingestimatesandjudgments,andthedisclosuresinourConsolidatedFinancialStatements,includingdisclosuresrelatingtosignificantaccountingpolicies.Basedonourdiscussionswithourmanagement,internalauditorsandPwC,aswellasareviewoftherepresentationsgiventousandPwC’sreportstous,werecommendedtotheBoard,andtheBoardapproved,inclusionoftheauditedConsolidatedFinancialStatementsinourAnnualReportonForm10-KfortheyearendedDecember31,2016,asfiledwiththeSEC.

SubmittedbytheAuditCommitteeoftheBoardofDirectors:WilliamF.Muir,ChairStephenA.FerrissMarkP.HurleyRobertJ.McCarthy

ThisreportshallnotbedeemedtobeincorporatedbyreferencebyanygeneralstatementincorporatingbyreferencethisProxyStatementintoanyfilingunderTheSecuritiesActof1933orExchangeAct,andshallnototherwisebedeemedfiledundertheseActs.

Table of Contents

COMPENSATION-COMPENSATIONDISCUSSIONANDANALYSIS

COMPENSATIONCompensationDiscussionandAnalysisExecutiveSummary

26


Introduction.ThisCompensationDiscussionandAnalysis(“CD&A”)describesthematerialelementsofcompensationawardedto,earnedby,orpaidtoeachofourexecutiveofficerswhoareincludedintheSummaryCompensationTableofthisProxyStatement,whowecollectivelyrefertoasour“namedexecutiveofficers”or“NEOs”andfocusesontheinformationcontainedinthefollowingtablesandrelatedfootnotesprimarilyfortheyear2016.

NAMEDEXECUTIVEOFFICERS

NAME

TITLE

JasonA.Kulas


IsmailDawood

ChiefFinancialOfficer

RichardMorrin

ChiefOperatingOfficer

KalyanSeshan

ChiefRiskOfficer

ChristopherPfirrman

ChiefLegalOfficerandGeneralCounsel

ThisCD&Aexplainstheoverallobjectivesofourexecutivecompensationprogram,howeachelementofourexecutivecompensationprogramisdesignedtosatisfytheseobjectives,andthepoliciesunderlyingour2016compensationprogram.

Wedesignourexecutivecompensationprogramtobeconsistentwithbestpractices,supportourbusinessesinachievingtheirkeygoalsandimperatives,anddrivestockholdervalue.Webelievethatourpayprograms,whichareintendedtocomplywithdirectivesfromourregulators,aregovernedbyasetofsoundprinciplesandaredesignedtomitigateexcessiverisk-taking.

2016BusinessPerformanceHighlights.Withnetincomeof$766millionand$21.9billionintotaloriginations,ourfullyear2016financialresultsdemonstrateourcontinuedprofitabilityandstrongreturns.Additionally,weachievedareturnonaverageassetsof2%andareturnonaverageequityof15.8%,andissued$8.3billioninsecuritizations.

Inlinewithourgoalofbalancingrisk/rewardmanagementwithincomeandprofitability,theseresultswereaccomplishedwhilealsotakingameasuredapproachtooriginationsinacompetitivemarketandimprovingthecreditqualityofourbalancesheet.

2016CompensationHighlights.Ourcompensationdecisionsfor2016reflectthedirectrelationshipbetweenthepayopportunitiesforourNEOsandperformanceforourstockholders.Basedonourstrongnetincomeof$766million,earnedinanincreasinglycompetitivemarket,theCompensationCommitteeapprovedfundingof102%oftargetoftheSCExecutiveBonusPool(the“BonusPool”).

The102%fundingoftheBonusPoolwasfurthersupportedbytheaccomplishmentofkeygoalsrelatedto:(i)oursurveyandprogramtomeasureandreportcustomersatisfaction;(ii)completionofcriticalregulatory,complianceandriskmilestonesand(iii)retentionofkeytalent.

AspartofourcontinualassessmentandevaluationofourcompensationprogramforNEOs,werestructuredtheannualbonustargetopportunitiesforcertainofourNEOstoadjustfortheelimination,goingforward,oftheSANPerformanceAwards(see“SANPerformanceAwards”inthisCD&Aforfurtherinformationregardingtheeliminationofsuchawardsandthecorrespondingadjustmentsmade).Additionally,we(i)extendedthevestingperiodfromthreetofiveyearsforthedeferredequityportionofannualincentiveawardstoourCEOand(ii)foreachofourNEOs,exceptforMorrin,addedperformancevestingconditionsforaportionoftheRSUsandlong-termcashgrantedaspartoftheannualincentiveawardfor2016.Thesechangesfurtherreinforceourphilosophythatpaybelinkedtoourperformanceinboththenear-andlong-term.

KeyExecutiveCompensationPrinciples.ThefundamentalprinciplesthatwefollowindesigningandimplementingcompensationprogramsforourNEOsareto:

» Attract,motivate,andretainhighlyskilledexecutiveswiththebusiness

experienceandacumennecessaryforachievingourlong-termbusinessobjectives;

» Linkpaytoperformanceandalign,toanappropriateextent,theinterestsofmanagementwiththoseofourstockholders;

» Appropriatelybalanceriskandfinancialresults;and » Supportourcorevalues,strategicmission,andvision.

Weaimtoprovideatotalcompensationpackagethatiscomparabletothatofotherfinancialinstitutionswithwhomwecompeteforbusinessandfortalent,takingintoaccountpubliclyavailableinformationprovidedbyourindependentcompensationconsultant.Withinthisframework,weconsidereachcomponentofeachNEO’scompensationpackageindependently;thatis,wedonotevaluatewhatpercentageeachcomponentcomprisesofthetotalcompensationpackage.In2016,wetookintoaccountourperformance,individualperformance,levelofresponsibility,andtrackrecordwithintheorganizationinsettingeachNEO’scompensation.

Table of Contents

COMPENSATION-COMPENSATIONDISCUSSIONANDANALYSIS 2016CompensationActionsHowwecompensatedourCEO

JASONA.KULAS

AGE:46TITLE:PresidentandChiefExecutiveOfficer

INDIVIDUALPERFORMANCEGOALS(InadditiontooverallBonusPoolobjectivesdiscussedbelow)»Financial–Achieveannualbudgetandmaximize

liquidity»Risk–Activelydrive,support,andenforcerisk

managementstandards»Leadership–Setthetonefororganization

2016COMPENSATIONDECISIONS»BaseSalary–Remainedat$1,800,000for2016,

whichwasseteffectiveJuly1,2015,inrecognitionofhispromotiontoCEO

»AnnualBonus–Annualbonusawardof$1,967,000

(95%ofMr.Kulas’stargetbonus),providedinamixofcurrentanddeferredcashandRSUawards

»SANPerformanceAward–20,536PSUs

PERFORMANCEASSESSMENTInadditiontoMr.Kulas’scontributiontowardtheoverallBonusPoolobjectivesdiscussedbelow,theCompensationCommitteespecificallyrecognizedthatMr.Kulas:Financial»Ledafocusedapproachtomarketfortheexitfromourpersonallendingbusiness,beginningwitha

timelysaleofinstallmentlendingassetsinearly2016»Successfullycollaboratedwithbankandinstitutionaldebtinvestorstoachievecontinuedstrengthin

excessliquidity»Continuedtomeetspecificongoingandupdatedmilestonestoreduceintragroupdebt

Risk»LedouractiveparticipationintheSantanderUSRiskandCapitalTransformation(“CART”)efforts,

ensuringactivetrackingofimportantdeadlinesandactivecollaborationwithSHUSAonallCARTprojects

»Achieved96%on-timecompletionratesbyourassociatesforregulatorycomplianceandrisktraining,

directlyfollowingupwithassociateswhowerepastdueinordertoreinforcetheimportanceofregulatorycompliance

»Reinforcedtheimportanceofacultureofcomplianceandafocusontheconsumerinregulartownhall

meetingsandinallemployeecommunicationsLeadership»Continuedtointegratethe“Simple,Personal,Fair”globalculturalinitiativeintothebusiness

»EnhancedcommunicationandcollaborationwithinandacrossourexecutiveteamandwithSantander

andSHUSA


27

Table of Contents


HowwecompensatedourotherNEOs

ISMAILDAWOOD

AGE:45TITLE:ChiefFinancialOfficer

INDIVIDUALPERFORMANCEGOALS PERFORMANCEASSESSMENT

(InadditiontooverallBonusPoolobjectivesdiscussedbelow)»Meetorexceed2016budgetfornetincome,

accountingfornon-controllablefactors»Deliverexpensemanagementdiscipline

»Remediateanyidentifiedaudit/controlrelated

deficiencieswithinprescribedtimeframes»Establishformalfinancialreportingprocessesto

ensureentireorganizationisoperatingfromsamesetoffinancialinformation

»Evaluatetalentandfinanceorganizationandexecute

anyneededchangesinfirsthalfof2016»Successfullyonboardnewauditors

»SuccessfullypartnerwithRiskorganizationon

continuedimprovementinoverallRiskandComplianceculture

2016COMPENSATIONDECISIONS»BaseSalary–Increasedfrom$650,000to$724,750,

perDecember2016letteragreement,tore-balancecompensation

»AnnualBonus–Annualbonusawardof$1,401,500

inaccordancewithDecember2016letteragreement,providedinamixofcurrentanddeferredcashandRSUawards

»Sign-onCashBonus–InMarch2016,Mr.Dawood

receivedaone-timecashbonusof$1,221,555inconnectionwithhisrecruitmentasCFO

InadditiontoMr.Dawood’scontributiontowardtheoverallBonusPoolobjectivesdiscussedbelow,theCompensationCommitteespecificallyrecognizedthatMr.Dawood:»Effectivelyengagedandsustainedregulatoryinteraction

»Significantlyimprovedourregulatoryposture

»Increasedthemanagementskill-setteamthroughseniorkeyhires

»Successfullydroveremediationprogramsagainstourmaterialweaknesses

28


Table of Contents


RICHARDMORRIN

AGE:47TITLE:ChiefOperatingOfficer


(InadditiontooverallBonusPoolobjectivesdiscussedbelow)»Activelydrive,support,andenforceriskmanagement

standards»Alignglobalcultureinitiativetobusinessobjectives

»Enhance/improvecommunicationswithdealershipsby

creatingrobust“DealerEngagementProgram”»Ensurereturnonassethurdlesareachievedineach

originationchannel»Ensure“DealerPerformanceManagement”program

properlyreports,analyzes,andreactstodealershipsthatdeliverpoorperformance

»Meetorexceed2016budgetfornetincome,

accountingfornon-controllablefactors2016COMPENSATIONDECISIONS»BaseSalary–Increasedfrom$520,000to$650,000,

inordertoalignwithmarket»AnnualBonus–Annualbonusawardof$715,000

(110%ofMr.Morrin’stargetbonus),providedinamixofcurrentanddeferredcashandRSUawards

»SANPSUAward–5,172PSUs

»SpecialRetentionBonus–Specialretentionaward

grantedinMarch2016of54,114RSUs(withagrantdatefairvalueof$480,000)

InadditiontoMr.Morrin’scontributiontowardtheoverallBonusPoolobjectivesdiscussedbelow,theCompensationCommitteespecificallyrecognizedthatMr.Morrin:»Effectivelybalancedrisk/rewardmanagementwithincomeandprofitability

»Providedstrongengagementandinteractionwithmultipleregulatoryparties

»Wasagreatcollaborator;proactivelybroughtappropriatepartiestogethertofindeffectiveandefficient

solutionstoproblems»Wasastrongtalentmanagerleader,adeptatidentifyingtalentandbuilding/developingeffective

teams


29

Table of Contents


KALYANSESHAN

AGE:49TITLE:ChiefRiskOfficer


(InadditiontooverallBonusPoolobjectivesdiscussedbelow)»Deliveronregulatoryimprovementgoals

»Ensurestrategicplanandbusinessstrategiesalignto

Board-approvedRiskAppetiteStatementandprovidereturnonequity

»RefinecurrentRiskandControlSelfAssessment

(RCSA)program»Establish“DealerManagementProgram”

»EnsureliquidityandIRRismanagedinaccordance

withregulatoryexpectations»Establishstrongandeffectiveworkingrelationships

withregulators»Continuetoenhanceriskgovernanceandreporting

principles2016COMPENSATIONDECISIONS»BaseSalary–Increasedfrom$490,000to$665,000,

effectiveJanuary2016,inordertoalignwithmarket»AnnualBonus–Annualbonusawardof$645,000

(110%ofMr.Seshan’stargetbonus),providedinamixofcurrentanddeferredcashandRSUawards

»SANPerformanceAward–5,628PSUs

InadditiontoMs.Seshan’scontributiontowardtheoverallBonusPoolobjectivesdiscussedbelow,theCompensationCommitteespecificallyrecognizedthatMr.Seshan:»Madesignificantprogressonregulatoryimprovementgoals

»Demonstratedabalancedapproachofriskandrewardandensuredthatappropriateriskmanagement

practicesweresupportiveofbusinessgoals»Builtcrediblerelationshipswithregulatorsandworkedcloselywithlinesofbusinessestoresolve

outstandingregulatorymatters

30


Table of Contents


CHRISTOPHERPFIRRMAN

AGE:56TITLE:ChiefLegalOfficerandGeneralCounsel


(InadditiontooverallBonusPoolobjectivesdiscussedbelow)»ContributetocultureofRiskManagementand

Compliancefunctions»EnhanceBoardandmanagementstructuresand

policyprocedures»BuildoutandoverseeConsumerPracticesfunction

»Manageoutsidelegalexpense

»BuildandstrengthenlegalfunctiontoalignwithSC

objectives»CoordinateSCpoliciesandpracticeswithSHUSA

»Contributetowardsmeetingorexceedingbudgetfor

netincome,accountingfornon-controllablefactors2016COMPENSATIONDECISIONS»BaseSalary–$649,418;nochangefrom2015

»AnnualBonus–Annualbonusawardof$520,000

(100%ofMr.Pfirrman’stargetbonus),providedinamixofcurrentanddeferredcashandRSUawards

»SANPSUAward–3,118PSUs

»SpecialRetentionBonus–Inaccordancewitha

retentionagreement,Mr.PfirrmanreceivedaspecialretentionbonusinDecember2016intheamountof$600,000,providedinamixofcurrentanddeferredcashandRSUawards

InadditiontoMr.Pfirrman’scontributiontowardtheoverallBonusPoolobjectivesdiscussedbelow,theCompensationCommitteespecificallyrecognizedthatMr.Pfirrman:»Ledseveralsubstantialandstrategiclegalmatters

»Wasadrivingforcebehindsignificantregulatoryimprovements

»Wasapragmaticbusinessadvisorandlegalpartneroncomplexcommercialandregulatoryissues

»DemonstratedsoundjudgmentandwasatrustedcolleaguetopeersinallaspectsofhisChiefLegal

Officerrole»Oversawsignificantimprovementinourgovernancepractices


31

Table of Contents


PROCESSFORDETERMININGEXECUTIVECOMPENSATIONCompensationCommitteeTheCompensationCommitteesetsthecompensationforourexecutiveofficers,includingourNEOs,andhasoversightof,amongotherthings,adoption,modification,andterminationofthetermsofourexecutiveequity-basedincentiveplan(s)(inwhichourNEOsparticipate)andapprovalofamountspaidtoourNEOsunderthoseplans.TheCommitteeoperatesunderawrittencharteradoptedbytheBoardthatispublishedontheinvestorrelationssectionofourwebsiteathttp://investors.santanderconsumerusa.com.TheCompensationCommitteeconductsanin-depthassessmentofeachNEO’sperformanceagainstSCandindividualgoalsandthenappliesitsjudgmenttomakecompensationdecisions.TheCommitteeutilizesaformulatoapproveabonuspoolforexecutiveofficersandcertainotherseniormembersofmanagement(see“SCBonusPool”inthisCD&Aforfurtherinformation),butdoesnototherwiserelyonaformulaormatrixtomakeindividualcompensationdecisions.TheCommitteebelievesthisprocessprovidesaccountabilityforperformanceagainstSCandindividualgoalsandenablestheCommitteetoassesseffectivelythequalityoftheperformanceandleadershipdemonstratedbyeachNEO.Importantly,theCompensationCommitteebelievesthattheprocessalsodifferentiatesamongeachNEO’sperformanceandmotivateseachNEO’sshort-termandlong-termresultsaswellaspromotesinnovationandbusinesstransformationwithinSC.ToadvisetheCommitteeinfulfillingitsdutiesandresponsibilities,theCommitteeretainedFredericW.Cook&Co.,Inc.(“Cook&Co.”)for2016toactasitsindependentconsultant.Cook&Co.reportsdirectlytothe

&Co.ascompensationconsultantstotheCommitteehavenotpresentedanyconflictofinterest.InitsroleofindependentcompensationconsultanttotheCompensationCommittee,Cook&Co.attendedCommitteemeetingsandprovidedindependentadviceoncurrenttrendsandbestpracticesincompensationdesignandprogramalternativesandadvisedonplansorpracticesthatmayimprovecompensationprogrameffectiveness.Cook&Co.alsoevaluatedourcompensationpracticesinlightofregulatoryexpectationsandprovidedfeedbackonsuchregulatoryexpectationstotheCommittee.Cook&Co.maymeetwithourCEOregardingthecompensationofourexecutiveofficers,includingourNEOs,butdoesnotmeetwithourCEOtodiscussanyaspectofhiscompensation.Cook&Co.assistedtheCompensationCommitteebyprovidingpreliminarycompetitivemarketandindustryinformationregardingcompensationforourNEOsandexecutiveofficersfor2016.Inprovidingsuchinformation,Cook&Co.developedaConsumerFinancepeergroup,composedofconsumerfinancecompanieswithwhichSCcompetesdirectlyforbothbusinessandtalent,andageneralBankingpeergroupwithwhichwecompetefortalent.Indeterminingcompaniesforinclusioninthepeergroup,Cook&Co.consideredcomparableindustryandbusinessmodelandcomparablesize.InreviewingNEOpaylevels,theCompensationCommitteeconsideredthemarketdataprovidedbyCook&Co.frombothpeergroups,andconsideredthesizeofthefirmsandthenatureoftheirbusinessesinusingthisdata.

32


CommitteeandperformsnootherworkforSC.Aspartofits2016reviewofCook&Co.,theCommitteeanalyzedCook&Co.’sindependencefrommanagementandwhetherhiringCook&Co.wouldraiseaconflictofinterest.TheCommitteeperformedthisanalysisbytakingintoconsiderationthefollowingfactorssetforthinSection303A.05oftheNYSEListedCompanyManual:

» AnyotherservicesprovidedtousbyCook&Co.;

» TheamountoffeesCook&Co.receivedfromusasapercentageofCook&Co.’stotalrevenue;

» PoliciesandproceduresCook&Co.utilizestopreventconflictsofinterest;

» Anybusinessorpersonalrelationshipoftheindividualcompensation

advisorofCook&Co.withanymemberoftheCompensationCommitteeoranexecutiveofficerofours;

» AnybusinessorpersonalrelationshipofCook&Co.withanexecutiveofficerofours;

» AnySCstockownedbyCook&Co.ortheCompensationCommittee’sindividualadvisor;and

» AnybusinessorpersonalrelationshipofCook&Co.withanexecutiveofficerofours.

WithrespecttotheCompensationCommittee’sevaluationofCook&Co.’sindependence,SCdidnotpayanyfeestoCook&Co.beforeitsappointmentinOctober2015,orsincethattimeotherthaninconnectionwithworkperformedfortheCommittee.TheCommitteedetermined,basedonitsanalysisoftheabovefactors,thatCook&Co.isindependentfrommanagementandthattheworkofCook&Co.andtheindividualcompensationadvisorsemployedbyCook

TheCompensationCommitteedidnotaimtosettargetcompensationatanyspecificpositioningagainstthepeergroupsbutusedthepeergroupsasageneralreferencepointasitmadecompensationdecisionsforourNEOsandexecutiveofficers.ThefollowingtablesetsforthourConsumerFinanceandBankingpeergroups.

PEERGROUPS

CONSUMERFINANCE

BANKING

AllyFinancialInc.

CapitalOneFinancialCorporation

ConsumerPortfolioServices,Inc.

CreditAcceptanceCorp.

DiscoverFinancialServices

PRAGroup,Inc.

SpringleafHoldings,Inc.

SynchronyFinancial

BOKFinancialCorporation

CITGroupInc.

CitizensFinancial

Group,Inc.

ComericaIncorporated

FifthThirdBancorpBanks

HuntingtonBancsharesIncorporated

KeyCorp.Banks

RegionsFinancialCorporation

SunTrustBanks,Inc.

SVBFinancialGroup

ThePNCFinancialServicesGroup,Inc.

ZionsBancorporation

Table of Contents

COMPENSATION-COMPENSATIONDISCUSSIONANDANALYSIS ConsiderationofSay-on-PayVote

PRINCIPALCOMPONENTSOFEXECUTIVECOMPENSATIONOverviewofComponents

ELEMENT

DESCRIPTIONANDPURPOSE

BaseSalary

»

Fixedcashcompensationcomponentthatreflectstheofficer’spositionandresponsibilities.

»

OffersstabilityforNEOsandallowsustomaintainastablemanagementteam.

AnnualBonus

»

AnnualbonusprogramdesignedtomotivateandrewardtheachievementofSCand/orindividualperformancegoals.

»

For2016,theCompensationCommitteeawardedbonusestoourNEOsbaseduponabonuspoolmethodologyadoptedbytheCommittee.

»

Theannualbonusiscomprisedofbothshort-termandlong-termincentives.AportionofthebonusisdeferredincashandRSUs(asmorefullydescribedbelow),aspartofabalanceddesignintendedtoappropriatelybalancecompensationrisk.

»

For2016,exceptforMr.Morrin,aportionofthedeferredcashandRSUsarealsosubjecttofutureSantanderandSCperformancegoalstofurtherencouragelong-term,sustainableperformance.Additionally,forallNEOs,paymentofthedeferredcashandRSUsisspecificallyconditionedupontheabsenceofseveralnegativeriskand/orlegalevents,including,butnotlimitedto,anyofthefollowing:(i)materialfailureswithrespecttoriskmanagementbyusandanyofouraffiliates;(ii)anymaterial,negativerestatementofourfinancialstatementsasaresultofactivitiescarriedoutonorafterJanuary1,2016;(iii)materialbreachbytheNEOofanyofourinternalrulesorregulations;or(iv)amaterial,negativechangeinourcapitalizationorriskprofile.

Long-TermEquity-BasedIncentiveCompensation

»

NEOs(otherthanMr.Dawood)receivedagrantofperformance-basedRSUsin2016underthe2015SANPerformanceAwardprogram,whichvestinMarch2019basedonascorecardofSantanderperformancegoals.Theseawardsarenotintendedtobemadeinfutureyears.

»

Inadditiontothelong-termincentivecomponentsoftheannualbonus,certainofourNEOsreceivedcertainone-timeretentiongrantsoftime-vestingRSUsin2016,whichgenerallyvestoverathree-yearperiodsubjecttocontinuedservice(withcertainexceptions).

»

Alignslong-termNEOandstockholderinterestsandencouragesretention.

Retirement,HealthandWelfareBenefits;

Perquisites

»

ProvideNEOswithstabilityduringemploymentandintoretirementandarecompetitivewithoverallmarketpractices.

EmploymentAgreements

»

SeverancebenefitsprovidedtocertainNEOsuponcertainterminationsofemployment(asmorefullydescribedbelow).

»

FacilitatesretentionofNEOsbyprovidingincomestabilityintheeventofjobloss.


33

TheCompensationCommitteevaluesinputfromourstockholdersonourexecutivecompensationprogramandourprinciplesandobjectiveswhendeterminingexecutivecompensation.OnewaytheCommitteereceivesthatinputisthroughtheresultsofanadvisorystockholdervoteonexecutivecompensation(the“Say-on-Payvote”).WeholdaSay-on-Payvoteeverythreeyears,mostrecentlyin2015,basedon

thepreferenceexpressedbyourstockholdersatour2015AnnualMeeting.Inthe2015Say-on-Payvote,asignificantmajorityofourstockholders,over85%ofvotescast,approved,onanadvisorybasis,thecompensationforourNEOs.TheCommitteedidnottakeanyspecificactionswithrespectto2017compensationdecisionsforourNEOsasaresultofthe2015Say-on-Payvote.

TheCompensationCommitteeusesthefollowingelementsofcompensationtoattractandretainNEOsandmaintainastableteamofeffectiveleaders,tobalancethecompensationofourNEOswiththeshort-termandlong-termobjectivesofSC,andtoaligntheinterestsofourNEOswiththeinterestsofallofourstockholders.For2016,thecompensationthatwepaidtoourNEOsconsistedprimarilyofbasesalaryandshort-and

long-termincentiveopportunities,aswedescribemorefullybelow.Inaddition,ourNEOswereeligibleforparticipationincompany-widehealthandwelfarebenefitsplans,andweprovidedourNEOswithcertainhealthandwelfarebenefitsandperquisitesnotavailabletoouremployeesgenerally,aswedescribemorefullybelow.TheprincipalelementsofcompensationavailabletoourNEOsin2016wereasfollows:

Table of Contents


BaseSalary

AnnualBonuses

34


BasesalaryreflectseachNEO’slevelofresponsibility,leadership,andtenure,aswellastheCompensationCommittee’sevaluationofeachNEO’scontributiontotheperformanceandprofitabilityofSC.InestablishingeachNEO’sannualbasesalary,theCommitteeconsideredmarketsalarydata,ourbudget,achievementofperformanceobjectives,andourCEO’sassessmentoftheotherNEOs’performance.ExceptforMr.SeshanandMr.Pfirrman,thebasesalariesofourNEOsweregenerallysetinaccordancewitheachNEO’semploymentagreement.WhileeachsuchNEO’semploymentagreementprovidesforthepossibilityofincreasesinbasesalary,annualincreasesarenotguaranteed.

ThefollowingtableprovidesdetailregardingeachNEO’sbasesalaryasofDecember31,2016:

NAME

BASESALARY($)

JasonKulas 1,800,000

IsmailDawood 724,750

RichardMorrin 650,000

KalyanSeshan 665,000

ChristopherPfirrman 649,418

TheCompensationCommitteeapprovedincreasesinbasesalariesforcertainNEOsduring2016.Formoreinformationregardingthesebasesalaryincreases,see“2016CompensationActions”inthisCD&A.

Introduction.For2016,theannualcompensationofourNEOsincludedbonuspaymentspayableincashandRSUspursuanttoSC’sSeniorExecutiveAnnualBonusPlan(the“BonusPlan”).TheBonusPlanisintendedtoprovideanincentiveforsuperiorworkandtomotivatecoveredkeyexecutivestowardevengreaterachievementandbusinessresults,totietheirgoalsandintereststothelong-terminterestsofourstockholders,andtoenableustoattractandretainhighly-qualifiedexecutives.TheBonusPlanisabonusplanunderwhichourexecutiveofficers,includingourNEOs,willbeeligibletoreceivebonuspaymentsforaspecifiedperiod(forexample,ourfiscalyear).BonusesundertheBonusPlanmaybeperformance-basedordiscretionary.IndividualBonusTargets.TheCompensationCommitteeassignedtoeachNEOatargetbonusawardopportunityundertheBonusPlanfor2016basedontheNEO’sroleandresponsibilities,rateofbasesalary,andcompetitivepracticesatourcompensationpeergroups.ThefollowingtableprovidesdetailregardingeachNEO’stargetbonusundertheBonusPlanforperformancein2016:

NAME

TARGETBONUS($)

JasonKulas 2,070,000

IsmailDawood N/A

RichardMorrin 650,000

KalyanSeshan 588,500


Mr.Dawood’s2016bonuswasdeterminedunderthetermsofhisemploymentagreement.WeoriginallyenteredintotheemploymentagreementwithMr.DawoodinDecember2015whenhejoinedus.InordertorecruitMr.Dawood,hisemploymentagreementguaranteedhisannualbonusamountfor2016,andprovidedforanadditionalannuallong-termRSUawardvaluedat$330,000.InDecember2016,Mr.Dawood’semploymentagreementwasamendedtoconformthestructureofhiscompensationopportunitieswithcertainSCandSantanderpoliciesdescribedfurtherbelowunder“FormofAwards:MixofCurrentandDeferredCashandRSUs,”andtofurtherencourageMr.Dawood’sretention.Aspartofthatamendment,histargetbonuswasincreasedfrom110%to140%ofhisbasesalary,andhisannuallong-termRSUawardswereeliminated.Theamountofhisguaranteedbonusfor2016wassetat$1,401,500.Thisamountincludesboththeincreasedtargetbonuspercentageandthevalueoftheforegoneannuallong-termRSUawardfor2016.Mr.Dawood’semploymentagreementdoesnotprovideforaguaranteedbonusamountfor2017orlater.

Table of Contents


SCBONUSPOOLMETRIC

WEIGHTINGOFSC

BONUSPOOLMETRIC

Results,StrategyandCustomers

»NetIncomefor2016vs.budget

»ReturnonRisk-WeightedAssets(RoRWA)vs.budget 70%

»Implementationofcomprehensivesurveyandprogramtomeasureandreportcustomersatisfaction

Regulatory,ComplianceandRisk

»Completionofcriticalmilestones 20%

EmployeesandCulture

»Improvedemployeeenablement 10%

»Retentionofkeytalent(90%top-ratedperformers)

SHUSAAdjustment Formulaic

DiscretionaryAdjustment +/-20%


35

SCBonusPool.TheCompensationCommitteeapprovedtheBonusPoolasamethodologyforsettingtheoverallfundingofBonusPlanawardswithrespectto2016forourexecutiveofficers,includingourNEOs,andcertainseniormembersofmanagement.ThetargetamountoftheBonusPoolisthesumoftheindividualtargetbonusamounts.TheBonusPool

methodologyincorporatesabalanced,“scorecard”approachthatconsidersourfinancialperformanceagainstbudgetedfinancialgoals,aswellasperformancerelatedtocustomersatisfaction,regulatorycompliance,employees,andculture.TheCommitteeapprovedthefollowingmetricsfortheBonusPoolfor2016:

Forpurposesofthe2016BonusPool: » “Netincome”isdefinedunderU.S.GAAP.

» “RoRWA”(or“returnonrisk-weightedassets”)isanon-GAAPmeasureandisdefinedastheratioofnetincometototalrisk-weightedassets.(Undercertainbankingregulators’risk-basedcapitalguidelines,assetsandcreditequivalentamountsofderivativesandoff-balancesheetexposuresareassignedtobroadriskcategories.Theaggregatedollaramountineachriskcategoryismultipliedbytheassociatedriskweightofthecategory.Theresultingweightedvaluesareaddedtogetherwiththemeasureformarketrisk,resultinginourtotalrisk-weightedassets.)

For2016,weperformedslightlybelowtargetonournetincomeandRoRWAgoals.ForpurposesoftheBonusPlan:

» Ournetincomefor2016was$766million,slightlybelowour2016budgetednetincomeof$775million,and

» OurRoRWAfor2016was2.05%,slightlybelowour2016budgetedRoRWAof2.08%.

TheCompensationCommitteedeterminedthatwehadmetthegoalsrelatedto:

» Implementationofacomprehensivesurveyandprogramtomeasureandreportcustomersatisfaction;

» Completionofcriticalmilestones;and » Retentionofkeytalent.

TheCompensationCommittee,however,determinedthatSChadnotmetitsgoalsregardingemployeeenablement.

ThefinalcalculatedscoreoftheBonusPoolbeforetheexerciseofanydiscretionaryadjustmentwas94.7%.TheBonusPoolprovidesthatthisfinalcalculatedscorebeadjustedbythedifferencebetweenourbonusplanscoreandthefinalscoreunderSHUSA’sbonusplan,multipliedby20%.SHUSA’sbonusplanscoreforthispurposewas102%;therefore,anadjustmentof1.5%wasappropriate.

Table of Contents


SCBONUSPOOLMETRIC

RESULTS

TARGET

WEIGHTING

FINALSCBONUSPOOL%

Results,StrategyandCustomers

»NetIncomefor2016vs.budget Slightlybelowtarget

70%

69.2% »ReturnonRisk-WeightedAssets(RoRWA)vs.budget Slightlybelowtarget »Implementationofcomprehensivesurveyandprogramtomeasureandreportcustomer

satisfaction

Goalsmet

Regulatory,ComplianceandRisk

»Completionofcriticalmilestones

Goalsmet 20%

20%

EmployeesandCulture

»Improvedemployeeenablement

Goalsnotmet 10% 5.5%

»Retentionofkeytalent(90%top-ratedperformers)

Goalsmet

SHUSAAdjustment

Exercised Formulaic 1.5%

DiscretionaryAdjustment Exercised +/-20% 5.8%

TOTAL

102%

36


WhiletwoofthemetricsfortheBonusPoolwereslightlybelowtargetandtheemployeeenablementgoalwasnotachieved,netincomewasstronginanincreasinglycompetitivemarketandourNEOsmadesignificantstridesinachievingtheirindividualgoals,instillingacultureofcomplianceandbalancingrisk/rewardmanagementwithincomeandprofitability.Asnotedabove,the

CompensationCommitteemayuseitsdiscretiontoadjustthefinalBonusPoolfundingupordownby20percentagepointsineitherdirection.Accordingly,theCommitteeinitsdiscretiondeterminedthattheBonusPoolshouldbefundedat102%oftargetfor2016,summarizedasfollows:

IndividualPerformanceAssessmentsandAwardDeterminations.Asdescribedabove,ourperformanceresultedinanapprovedfundingof102%oftheBonusPooltarget.Wemultiplythisbonuspoolpercentagebytheapplicabletargetbonusamountofeachexecutiveofficer,includingeachNEO,toestablishaninitialstartingpointforeachexecutivesubjecttotheBonusPool.

Eachexecutive’sawardundertheBonusPlanissubjecttoadiscretionaryadjustment,eitherpositiveornegative,basedontheevaluationoftheexecutive’sperformancebytheCompensationCommittee.Innoevent,however,willtheaggregatetotaloftheactualbonusamountsexceedtheaggregatetotaloftheBonusPool.TheCommitteebelievesthatthisindividualperformancereviewanddiscretionaryadjustmentsservestockholderinterestsbyprovidingtheCommitteewithameanstodifferentiatecompensationoutcomesamongourNEOsbasedonthequalityoftheperformanceandleadershipdemonstratedbyeachNEO.

TheCompensationCommitteeconductedadetailedevaluationandassessmentofeachNEO’s2016performanceagainstpre-establishedperformancemeasuresthatweretiedtofinancialperformanceandstrategicinitiatives,includingriskandcompliancemeasures.AllofourNEOsreceivedaperformanceratingofmeetsorexceedsexpectations.See

“2016CompensationActions”inthisCD&Afortheadditionalinformationontheindividualperformancegoalsandassessments.

For2016,followingthereviewofourperformanceandeachNEO’sindividualperformance,theCompensationCommitteeapprovedawardsundertheBonusPlanforeachsuchNEOasfollows:

NAMEDEXECUTIVEOFFICER

2016BONUSPLANAWARD

($)

%OFTARGETBONUS

AWARDED

JasonKulas

1,967,000 95%

IsmailDawood

1,401,500 N/A*

RichardMorrin

715,000 110%

KalyanSeshan

645,000 110%

ChristopherPfirrman

520,000

100%

*Note:Mr.Dawood’s2016bonusamountwasdeterminedpursuanttohisemploymentagreementasdiscussedabove.

Table of Contents



CASHPORTIONOF2016BONUSAWARD($)

RSUPORTIONOF2016BONUSAWARD($)

JasonKulas

983,500 983,500

IsmailDawood

700,750 700,750

RichardMorrin

357,500 357,500

KalyanSeshan

322,500 322,500

ChristopherPfirrman

260,000 260,000


37

For2016,awardsundertheBonusPlanwerepayableincashandRSUsasdiscussedbelow.TheseamountswillappearintheSummaryCompensationTableofourproxystatementsoverseveralyearsasfollows:

» TheimmediatelypayablecashamountsoftheBonusPlanawardsare

reflectedinthe“Bonus”columnofthe“—SummaryCompensationTable.”

» ThedeferredcashamountsoftheBonusPlanawardsaresubjecttoadditionalvestingrequirementsdiscussedbelowandwillbereflectedinthe“AllOtherCompensation”columnofthe“—SummaryCompensationTable”forsubsequentyearstotheextentearnedandvested.

» TheRSUportionoftheBonusPlanawardsweregrantedunderSC’sOmnibusIncentivePlaninMarch2017(the“OmnibusPlan”)andwillbereflectedinthe“StockAwards”columnofthe“—SummaryCompensationTable”for2017.

FormofAwards:MixofCurrentandDeferredCashandRSUs.Asweareacontrolledcompany,ownedindirectlybySantander,certainofourexecutiveofficers,includingourNEOs,andotheridentifiedstaffaresubjecttoDirective2013/36/EU

(“CRDIV”)promulgatedbytheEuropeanParliamentandCounciloftheEuropeanUnion.UnderSantander’sManagementBoardCompensationPolicyandIdentifiedStaffPlan,certainidentifiedstaff,includingallofourexecutiveofficersandallofourNEOs,arerequiredtodeferreceiptofaportionoftheirvariablecompensation(includingallbonusespaidundertheBonusPlan)inordertocomplywithCRDIV.Ultimately,thesepoliciesareintendedtoensurethatannualbonusawardsencouragesustainable,long-termperformanceconsistentwithourriskappetiteandriskmanagementpoliciesandarealignedwithlong-termstockholderinterests.

Accordingly,eachNEO’saggregateawardundertheBonusPlanfor2016waspayable50%incash(aportionofwhichwaspaidimmediatelyandaportionofwhichwasdeferred)and50%intheformofstock-settledRSUs(aportionofwhichwasvestedandsettledimmediatelyandaportionofwhichwassubjecttovesting).AfterthesharessubjecttotheRSUsaresettled,theywillremainsubjecttotransferandsalerestrictionsforoneyear.ThefollowingtablereflectstheportionsofeachNEO’sawardfor2016thatwaspayableinformofcashandRSUs:

TheportionofthetotalawarddeferredisbasedonSantanderpoliciesasimplementedbyus.Underthosepolicies,Mr.Kulashas50%ofhisBonusPlanawarddeferred,andtheotherNEOshave40%oftheirBonusPlanawardsdeferred.

Thedeferredportion(whethercashorRSUs)becomesearnedandvestedannuallyoveravestingperiodoffiveyearsforMr.KulasandthreeyearsfortheotherNEOs.Generally,theexecutivemustremaincontinuouslyemployedwithusthrougheachvestingdate.

Forthe2016awards,additionalcorporateperformancegoalswereaddedinorderforMr.Kulastoearnthevestinginstallmentsinyearsthree,four,andfive,andfortheotherNEOs(otherthanMr.Morrin)toearnthevestinginstallmentforyearthree.Theseperformancegoalsfurtherencouragesustainable,long-termperformanceandreflecttheintenttonotmakefuturegrantsundertheSANPerformanceAwardprogram.

Theperformancemetricsareweighted50%towardsSantanderperformanceand50%towardsSCperformanceandfollowabalanced,“scorecard”approach.

» TheSantandergoalsrelateequallyto(1)growthinSantanderearningspershare(“EPS”)over2015-2018,(2)Santander’srelativetotalshareholderreturn(“TSR”)over2016-2018,(3)attainmentbySantanderofcertaincapitalratiogoalsbyDecember31,2018,and(4)growthinSantander’sRoRWAover2015-2018.

» SC’sgoalsrelateequallyto(1)SCattainingaspecifiedlevelofEPSbyDecember31,2018,(2)SC’srelativeTSRover2016-2018,(3)SCattainingcertaincapitalratiogoalsbyDecember31,2018,(4)SCattainingaspecifiedlevelofreturnonassetsbyDecember31,2018,and(5)SCattainingaspecifiedlevelofexpenseratiobyDecember31,2018.

Performancebelowtargetgoalsforeachcomponentresultinbelow-targetpayouts,andperformancebelowcertainthresholdgoalswillresultinnopayoutforeachcomponent.Noamountgreaterthanthetargetawardcanbeearned.

Thepaymentofthedeferredportionofthe2016awardsundertheBonusPlanisconditionedonavoidanceofcertaineventsorconduct,including:(1)ourdeficientfinancialperformance;(2)

Table of Contents



TOTALAMOUNTDEFERRED($)

CASHDEFERRED($)

RSUsDEFERRED($)

JasonKulas

983,500 491,750

491,750

IsmailDawood

560,600 280,300

280,300

RichardMorrin

286,000 143,000

143,000

KalyanSeshan

258,000 129,000

129,000

ChristopherPfirrman

208,000 104,000

104,000

Long-TermEquity-BasedIncentiveCompensation

38


materialbreachbytheNEOofanyofourmaterialinternalrulesorregulations;(3)materialnegativerestatementofourfinancialstatements(otherthananyrestatementundertakenasaresultofachangeinaccountingstandards);(4)materialnegativechangeinourcapitalizationorriskprofilepriortotheapplicablesettlementdate;or(5)certainotherdetrimentalconductbytheNEO.Theseconditionsareintendedtofurtherreinforcea

businessculturethatpromotesconductbasedonthehighestethicalstandardsconsistentwithourriskmanagementpolicies.

OurNEOshadthefollowingamountsoftheirvariablecompensationfor2016deferredpursuanttothedesigndescribedabove:

Introduction.InadditiontoRSUsgrantedasaportionoftheBonusPlanaward,whichareaformoflong-termequityincentive,theCompensationCommitteemay,initsdiscretion,grantadditionallong-termincentiveawardsunderourOmnibusPlan.Theseawardsmaybeintheformofrestrictedstock,RSUs,stockoptions,orotherformsofawardpermittedundertheOmnibusPlan.

Long-termequity-basedincentivecompensationencouragesourNEOstocreateandsustainstockholdervalueoverlongerperiods.Inaddition,long-termequity-basedincentivecompensationpromotesretentionbecauseitsfullvaluecannotberealizeduntilvestingoccurs,whichgenerallyrequirescontinuedemploymentformultipleyears,typically,threetofiveyears.

2016Awards.InMarch2016,theCompensationCommitteemadeaspecialretentionawardofRSUstoMr.Morrinintheamountof$480,000,vestingannuallyoverthreeyears.Thegrantwaspartofaretentionprogramfollowingthetransitionintheexecutiveteamduring2016.

Also,inNovember2016,Mr.Pfirrmanreceivedpaymentofaretentionbonusintheamountof$600,000,payableinamixofimmediateanddeferredcashandRSUs.ThiswaspartofaretentionawardpreviouslygrantedbySHUSAandstructuredsoastocomplywithCRD-IV.

SANPerformanceAwards.Wepreviouslyawardedperformance-basedRSUs(“PSUs”)undertheOmnibusPlanaspartoftheSANPerformanceAwardprogram.ThePSUsbecomeearnedbasedonmulti-yearperformanceofSantander.Theawardsmadein2015becomeearnedbasedonSantander’srelativeTSRperformanceover2014-2017.SantanderchangedthedesignforthePSUsgrantedin2016,asdescribedinmoredetailbelow.SantanderandtheCompensationCommitteedonotintendtocontinuethisprogramforfutureyears,andasnotedabovethishasresultedinchangestothetargetbonusopportunityforcertainofourNEOsandadesignchangetoRSUsgrantedundertheBonusPlantoincludeafutureperformancerequirementforaportionofthevestingforourNEOs(exceptforMr.Morrin).

OurNEOs,otherthanMr.Dawood,receivedagrantofPSUsundertheSANPerformanceAwardprograminNovember2016.

Mr.Dawooddidnotreceiveanawardundertheprogrambecausetheawardswerebasedon2015performanceandhisemploymentwithusdidnotbeginuntilDecember2015.ThefollowingtableliststhetargetnumberofPSUsgranted:

NEO PSUsGRANTED

JasonKulas 20,536

RichardMorrin 5,172

KalyanSeshan 5,628


UndertheSANPerformanceAwardprogram,thePSUsreflectedinthechartabovewillbecomevestedinMarch2019basedontheachievementofarangeofperformancegoalsbySantander:

GOAL

WEIGHTING

SANEPSgrowth,2015-2017,relativetoacompetitorgroup 25%

SANreturnontangibleequityin2017 25%

SANemployeesatisfaction(#ofmarketsinwhichSANgroupmemberiswithintop3bankstoworkforin2017)

20%

SANcustomersatisfaction(#ofmarketsinwhichSANgroupmemberiswithintop3banksincustomersatisfactionindexin

2017)

15%

Individualcustomerloyaltygoals,asof12/31/17 7.5%

Corporatecustomerloyaltygoals,asof12/31/17 7.5%

SettlementofthePSUsiscontingentonourNEOremainingemployedthroughtheMarch2019settlementdate.AswithBonusPlanRSUs,thePSUsarealsoconditionedonavoidanceofcertain

Table of Contents



39

eventsorconductbytheexecutive,including:(1)ourdeficientfinancialperformance;(2)materialbreachbytheNEOofanyofourmaterialinternalrulesorregulations;(3)materialnegativerestatementofourfinancialstatements(otherthananyrestatementundertakenasaresultofachangeinaccountingstandards);(4)materialnegativechangeinourcapitalizationorriskprofilepriortotheapplicablesettlementdate;or(5)certainotherdetrimentalconductbyourNEO.AfterthesharessubjecttothePSUsaresettled,theywillremainsubjecttotransferandsalerestrictionsforoneyear.

OtherCompensationInadditiontothebenefitsthatallofouremployeesareeligibletoreceive,ourNEOsareeligibletoreceivecertainotherbenefitsandperquisites.For2016,theadditionalbenefitsandperquisitesincludedacarallowanceandcompany-paidannualpremiumsforexecutivemedical,dentalanddisabilitybenefits.Thesebenefitsandperquisitesaregenerallyconsistentwiththosepaidtosimilarlysituatedexecutives.

RetirementBenefitsEachofourNEOsiseligibletoparticipateinourqualifieddefinedcontributionretirementplan(i.e.,401(k)Plan)underthesametermsasourothereligibleemployees,includingwithrespecttotheSCmatchingcontributionunderthe401(k)Plan.WeprovidethesebenefitsinordertofosterthedevelopmentofourNEOs’long-termcareerswithSC.WedonotprovidedefinedbenefitpensionbenefitsornonqualifiedorexcessretirementbenefitstoanyofourNEOs.

EmploymentAgreementsWehaveenteredintoemploymentagreementswitheachofourNEOs(exceptforMr.SeshanandMr.Pfirrman),establishingkeyelementsofcompensationinadditiontoourgenerally-applicableplansandprogramsandthatincludecertainrestrictivecovenants,suchasthoseprohibitingpost-employmentcompetitionorsolicitationbyourNEOs.Webelievethattheseagreementsprovidestabilitytousandfurthertheobjectivesofourcompensationprogram,includingourobjectiveofattractingandretainingthehighestqualityexecutivestomanageandleadus.See“Compensation—PotentialPaymentsuponTerminationorChangeofControl—EmploymentAgreements”inthisProxyStatementforadditionalinformationregardingourNEOemploymentagreements.

ClawbackPolicyIn2016,weadoptedaPolicyonMalusandClawbackRequirements(the“ClawbackPolicy”).TheClawbackPolicycontainsaframeworkunderwhichwewillimplementintoourincentivecompensationarrangements(1)provisionsthatcancauseunvestedcompensationtobereducedorforfeitedduringtheapplicablevestingperiod(oftenreferredtoas“malus”provisions)and(2)provisionsthatcancausepreviouslyearnedandpaidcompensationtoberepaid(oftenreferredtoas“clawback”provisions).Malusandclawbackprovisionsserveseveralpurposes,suchastoensurethatourincentivecompensationawardsarebasedonsustainable,appropriateandcompliantperformance;thatsuchperformanceisachievedconsistentlywithinapplicableriskframeworks;andthatouremployeesarediscouragedfrommanipulatingperformance

orfinancialmetricsorengaginginotherbehaviorsthatcouldadverselyimpactus.

EmployeescoveredbytheClawbackPolicyinclude,ataminimum,(1)employeesoremployeegroupsidentifiedas“coveredemployees”undertheGuidanceonSoundIncentiveCompensationPoliciesadoptedbyU.S.bankingagencies,(2)employeesdeterminedtobe“identifiedstaff”underCRDIVand(3)anyotheremployeeswhoreceiveincentivecompensationawardsthatwedetermineshouldbesubjecttomalusorclawbackrequirements.

IncentivecompensationcoveredbytheClawbackPolicywillinclude,ataminimum,(1)“incentivecompensationarrangements”withinthemeaningoftheGuidanceonSoundIncentiveCompensationPolicies,(2)“variableremuneration”withinthemeaningofCRDIVand(3)anyotherincentivecompensationarrangementsthatwedetermineshouldbecoveredbymalusorclawbackrequirements.

TheClawbackPolicyrequiresourapplicableincentivecompensationagreementstoreflectalldesignfeaturesofanymalusandclawbackrequirements,includingtriggeringevents,coveredemployeesandtimeperiodsduringwhichcompensationmaybesubjecttomalusandclawbackprovisions.Allofourmalusandclawbackrequirementsareintendedtobeenforceabletothemaximumextentpermittedbyapplicablelaw.

UndertheClawbackPolicy,malusprovisionsinclude,ataminimum,thefollowingtriggeringevents:(1)“detrimentalconduct”(asdescribedbelow);(2)breachofpost-employmentcovenants;and(3)themalustriggeringeventsrequiredbySantander’sremunerationpoliciesasineffectfromtimetotime,whichcurrentlyincludethefollowingcategoriesofevents:

» Significantriskmanagementfailuresatorbyus,orbyabusinessunitorcontrolorsupportfunctionofours;

» Materialrestatementofourfinancialstatements,exceptwhenappropriatepursuanttoachangeinaccountingstandards;

» Violationbythebeneficiaryofinternalregulations,policiesorcodesofconduct;

» SignificantchangesinthefinancialcapitalorriskprofileofSantander;

» Significantincreasesinrequirementstooureconomicorregulatorycapitalbasewhennotforeseenatthetimeofgenerationofexposures;

» Regulatorysanctionsorcriminalconvictionsforactsthatcouldbeattributabletousortothepersonnelresponsiblefortheacts;

» Anymisconduct,whetherindividualorcollective,inparticularwithrespecttomarketingofunsuitableproducts;and

» PoorfinancialperformanceofSantander.

ThemalustriggeringeventsundertheClawbackPolicyarenotlimitedtotheforegoingandwillbecustomizedandadjustedasappropriate.

UndertheClawbackPolicy,clawbackprovisionsinclude,ataminimum,thefollowingtriggeringevents:(1)“detrimentalconduct”(asdescribedbelow);(2)breachofpost-employmentcovenants;and(3)breachofapplicableanti-hedgingpolicies.TheclawbacktriggeringeventsundertheClawbackPolicyarenotlimitedtotheforegoingandwillbecustomizedandadjustedasappropriate.

Table of Contents

COMPENSATION-COMPENSATIONCOMMITTEEREPORT

40


“Detrimentalconduct”undertheClawbackPolicyreferstocategoriesofemployeeconductspecifiedinincentivecompensationagreementsthatmaytriggerarighttoapplymalusorclawbackprovisionsagainsttheemployee.ThefollowinglistscategoriesofconductthatareconsidereddetrimentalconductundertheClawbackPolicy:

» Anemployee’sconductthatwouldpermitustoterminatetheemployeefor“cause”;

» Anemployee’scommissionofacriminalactthatvictimizesusora

customer,employeeorcounterpartyofoursorsubjectsustopublicridiculeorembarrassment;

» Improperorintentionalconductbyanemployeecausingreputationalharmtousorourcustomers;

» Anemployee’sbreachofafiduciarydutyowedtousoracustomerorformercustomerofours;

» Anemployee’sintentionalviolationof,orgrosslynegligentdisregardfor,

ourpolicies,rulesorprocedures,includinginconnectionwiththesupervisionoroversightofotheremployees;or

» Anemployeetakingormaintainingtradingpositions,orexecutinghisorherdutiesorresponsibilitiesinamannerthatresultsinaneedtorestatefinancialresultsinasubsequentreportingperiodorthatresultinasignificantfinanciallosstous.

TheClawbackPolicyisadministeredbyourChiefHumanResourcesOfficer,withtheadviceofourexecutive-levelmanagementhumanresourcescommittee,subjecttooversightandgovernancebyourCompensationCommittee.

TaxConsiderationsSection162(m)generallydisallowsafederaltaxdeductiontopubliccompaniesforcompensationgreaterthan$1millionpaidinanytaxyeartospecifiedexecutiveofficersunlessthecompensationqualifiesas“performance-basedcompensation”underthatsection.However,pursuanttothetransitionprovisionsunderSection162(m),certaincompensationarrangementsthatareenteredintobyacorporationbeforeitispubliclyheld,andthataredisclosedinthecorporation’sregistrationstatement,maynotbesubjecttothedeductibilitylimitsofSection162(m)foraperiodofapproximatelythreeyearsfollowingtheconsummationofthecorporation’spublicoffering(the“Exemption”).

TotheextentthattheyarenotintendedtoqualifyfortheExemption,certainofourcompensationarrangementsaredesignedtopermitustograntawardsthatmayqualifyas“performance-basedcompensation.”However,itispossiblethatawardsintendedtoqualifyforthetaxdeductionmaynotsoqualifyifallrequirementsofthe“performance-basedcompensation”exemptionarenotmet.Furthermore,theCompensationCommitteebelievesthatthetaxdeductionisonlyoneofseveralrelevantconsiderationsinsettingexecutivecompensationandtakesintoaccountamultitudeoffactorsinmakingexecutivecompensationdecisions.

Accordingly,theCommitteemay,incertaincircumstances,approvecompensationarrangementsthatprovideforcompensationthatisnotdeductibleforfederalincometaxpurposes.

CompensationRiskAssessmentAtleastannually,theCompensationCommitteeconductsanassessmentofthecompensationpoliciesandpracticesforouremployees,includingourexecutiveofficers,andwhethersuchpoliciesandpracticescreatedrisksthatwerereasonablylikelytohaveamaterialadverseeffectonus.Ourmanagementcompensationteamandanexecutive-levelmanagementhumanresourcescommitteeassisttheCommitteewithsuchriskassessmentandhelpensureourcompensationprogramsalignwithourgoalsandcompensationphilosophiesand,alongwithotherfactors,operatetomitigateagainsttheriskthatsuchprogramswouldencourageexcessiverisk-taking.

Webelieveourcompensationprogramsstriketheappropriatebalancebetweenshort-termandlong-termcomponents.Weconsiderthepotentialrisksinourbusinesswhendesigningandadministeringourcompensationprograms,andwebelieveourbalancedapproachtoperformancemeasurementandcompensationdecisionsworkstomitigatetheriskthatindividualswillbeencouragedtoundertakeexcessiveorinappropriaterisk.Ourcompensationprogramalsoissubjecttointernalcontrols,andwerelyonprinciplesofsoundgovernanceandgoodbusinessjudgmentinadministeringourcompensationprograms.

Basedonitsassessment,theCompensationCommitteehasdetermined,initsreasonablebusinessjudgment,thatourcompensationpoliciesandpracticesasgenerallyapplicabletoourexecutiveofficersandemployeesdonotcreaterisksthatarereasonablylikelytohaveamaterialadverseeffectonusandinsteadpromotebehaviorsthatsupportlong-termsustainabilityandstockholdervaluecreation.

CompensationCommitteeReportTheCompensationCommitteehasreviewedtheCD&AasrequiredbyItem402(b)ofRegulationS-KanddiscusseditwithSC’smanagement.Basedonsuchreviewanddiscussionswithmanagement,theCommitteehasrecommendedtotheBoardthattheCD&AbeincludedinthisProxyStatement.

SubmittedbytheCompensationCommittee:StephenA.Ferriss,ChairEdithE.HolidayJavierMaldonadoRobertJ.McCarthy

Table of Contents

COMPENSATION-EXECUTIVECOMPENSATIONTABLES

EXECUTIVECOMPENSATIONTABLESSummaryCompensationTableThefollowingtablesetsforththetotalcompensationpaidoraccruedfortheyearsendedDecember31,2016,2015,and2014(ifapplicable)foreachindividualwhoservedasourChiefExecutiveOfficerorChiefFinancialOfficerduring2016,andourthreeothermosthighlycompensatedexecutiveofficerswhowereservingasexecutiveofficersonDecember31,2016.TheseofficersarereferredtothroughoutthisProxyStatementasour“NEOs.”

NAMEANDPRINCIPALPOSITION

YEAR

SALARY($)(1)

BONUS($)(2)

STOCKAWARDS

($)(3)

OPTIONAWARDS

($)(4)

ALLOTHERCOMPENSATION

($)(5)

TOTAL($)

JasonKulasPresidentandCEO

2016 1,800,000 491,750 1,139,658 — 30,002 3,461,410 2015 1,392,581 446,304 540,479 764,000 25,541 3,168,905

2014 890,000

510,000

—

2,728,346

41,954

4,170,300

IsmailDawoodCFO

2016 724,750 1,642,005 — — 18,312 2,385,067

2015 32,500

—

1,330,018

—

—

1,362,518

RichardMorrinCOO

2016 531,923 214,500 765,372 — 43,772 1,555,567 2015 391,631 535,818 127,520 — 27,895 1,082,864

2014 340,000

76,500

—

—

36,875

453,375

KalyanSeshanCRO

2016 665,000 193,500 312,710 — 110,199 1,281,409

2015 158,308

395,821

—

277,200

3,323

834,652

ChristopherPfirrmanCLOandGeneralCounsel

2016 649,418

256,000

541,515

—

122,100

1,569,033

(1)Thebasesalaryamountsinthiscolumnrepresentactualbasecompensationpaidorearnedthroughtheendoftheapplicableyear.

(2)Theamountsinthiscolumnincludethenon-deferredcashportionoftheannualbonusearnedundertheBonusPlanfortheapplicableyear.See“CompensationDiscussionandAnalysis—PrincipalComponentsofExecutiveCompensation—AnnualBonuses”foradditionalinformation.Amountsinthiscolumnmayalsoincludeothercashsign-on,retentionorotherspecialbonuses.For2016,thisincludes(i)forMr.Dawood,aone-timecashsign-onbonusof$1,221,555inconnectionwithhisrecruitmentasCFO;and(ii)forMr.Pfirrman,$100,000asthenon-deferredcashportionofaretentionbonusawardgrantedinDecember2016.See“CompensationDiscussionandAnalysis—PrincipalComponentsofExecutiveCompensation—Long-TermEquityBasedIncentiveCompensation”foradditionalinformation.

(3)Theamountsinthiscolumnrepresenttheaggregategrantdatefairvalueoftheawardsdetailedunder“Fiscal2016GrantsofPlan-BasedAwards”inthisProxyStatement,whichfor2016werecomprisedof:

» RSUawardsgrantedinearly2016astheequityportionofannualbonusesundertheBonusPlangrantedforperformancein2015; » PSUsawardedundertheSANPerformanceAwardprograminNovember2016;and » Otherone-timeRSUawardsgrantedtocertainofourNEOs.

SECrulesrequiretheSummaryCompensationTabletoincludeineachyear’samounttheaggregategrantdatefairvalueofstockawardsgrantedduringtheyear.Typically,wegrantRSUawardsearlyintheyearaspartoftheannualbonusawardforprioryearperformance.Asaresult,theamountsforRSUawardsgenerallyappearintheSummaryCompensationTablefortheyearaftertheperformanceyearuponwhichtheywerebasedand,therefore,theSummaryCompensationTabledoesnotfullyreflecttheCompensationCommittee’sviewofitspay-for-performanceexecutivecompensationprogramforaparticularperformanceyear.Forexample,amountsshownas2016compensationinthe“StockAwards”columnreflectRSUawardsgrantedinFebruary2016for2015performance.See“CompensationDiscussionandAnalysis—PrincipalComponentsofExecutiveCompensation”foradiscussionabouthowtheCommitteeviewedits2016compensationdecisionsforourNEOs.ThegrantdatefairvalueofthestockawardsincludedintheSummaryCompensationTablerepresentstheaggregategrantdatefairvaluecomputedinaccordancewithFASBASCTopic718,basedontheclosingpriceofourCommonStockontheapplicablegrantdate,butexcludingtheeffectofpotentialforfeitures.Additionaldetailsonaccountingforequity-basedcompensationcanbefoundinNote1,“DescriptionofBusiness,BasisofPresentation,andSignificantAccountingPoliciesandPractices—StockBasedCompensation”andNote16,“EmployeeBenefitPlans”ofourconsolidatedfinancialstatementsfiledwiththeSEConForm10-KforthefiscalyearendedDecember31,2016.ForthePSUsgrantedundertheSANPerformanceAwardprogram,thegrantdatefairvaluewasbasedonanassumedprobableoutcomethatthefulltargetvalueoftheawardswouldbeearned(whichisalsothemaximumvalueofthoseawards).TheactualvalueofthePSUswilldependonachievementofspecifiedSantanderperformanceovertheapplicableperformanceperiods.See“CompensationDiscussionandAnalysis—PrincipalComponentsofExecutiveCompensation—Long-TermEquityBasedIncentiveCompensation”foradditionalinformation.Also,seethe“OutstandingEquityAwardsatFiscal2016YearEnd”tableinthisProxyStatementforadditionalinformationregardingthevestingparametersthatareapplicabletotheseawards.

(4)TheamountsinthiscolumnrepresentthegrantdatefairvalueofstockoptionsgrantedintheapplicableyearcomputedinaccordancewithFASBASCTopic718,butexcludingtheeffectofpotentialforfeitures.NostockoptionsweregrantedtoourNEOsin2016.Fordetailsontheassumptionsforcomputingthegrantdatefairvalueofstockoptionsgrantedinprioryears,seeNote1,“DescriptionofBusiness,BasisofPresentation,andSignificantAccountingPoliciesandPractices—StockBasedCompensation,”inthe“EmployeeBenefitPlans”footnotetoourconsolidatedfinancialstatementsfiledwiththeSEConForm10-Kfortheapplicablefiscalyear.

(5)Theamountsinthiscolumnforthemostrecentyeararedetailedbelowinthe“AllOtherCompensationTable.”Theamountsinthiscolumnincludetheamountoflong-termcashawardsgrantedinprioryearsasthedeferredcashportionofannualbonusawardsundertheBonusPlanthatbecameearnedandvestedintheapplicableyear.


41

Table of Contents


AllOtherCompensationTable

NAME

CARALLOWANCE

($)

SC

CONTRIBUTIONTODEFINED

CONTRIBUTIONPLAN

EXECUTIVEDISABILITYBENEFITS

($)(a)

HOUSINGALLOWANCE

($)

DEFERREDANNUALVARIABLE

COMPENSATION($)(b)

PERSONALTRAVELEXPENSES

($)

OTHER(c)($)

TOTAL($)

JasonKulas

9,600

15,900

3,034

—

—

—

1,468

30,002

IsmailDawood

—

13,500

2,571

—

—

—

2,241

18,312

RichardMorrin

9,600

11,746

3,237

—

17,595

—

1,594

43,772

KalyanSeshan

9,600

9,046

3,489

27,371

—

22,738

37,955

110,199

ChristopherPfirrman

9,600

18,044

3,894

88,374

—

—

2,188

122,100

(a)AmountrepresentstheannualpremiumspaidbySCforNEOexecutivelifeanddisabilitybenefits.

(b)Reflectstheamountoflong-termcashawardsgrantedinprioryearsasthedeferredcashportionofannualbonusawardsundertheBonusPlanthatbecameearnedandvestedin2016.See“Compensation—CompensationDiscussionandAnalysis—PrincipalComponentsofExecutiveCompensation—AnnualBonuses”foradditionalinformation.

(c)Representsgross-upamountpaidtoNEOfortaxablefringebenefits.

42


Table of Contents

COMPENSATION-EXECUTIVECOMPENSATIONTABLES Fiscal2016GrantsofPlan-BasedAwardsThefollowingtableprovidesinformationregardingshort-termawardsandlong-termawardsgrantedtoourNEOsundertheOmnibusPlanduringtheyearendedDecember31,2016.Seethe“OutstandingEquityAwardsatFiscal2016YearEnd”tablebelowforadditionalinformationregardingthevestingparametersthatareapplicabletotheseawards.

NAME

TYPEOFAWARD(1)

GRANTDATE

ESTIMATEDFUTUREPAYOUTSUNDEREQUITY

INCENTIVEPLANAWARDS(2)

ALLOTHERSTOCK

AWARDS:NUMBEROFSHARESOFSTOCKORUNITS(#)(3)

ALLOTHEROPTIONAWARDS:

NUMBEROFSECURITIESUNDERLYINGOPTIONS(#)

EXERCISEORBASEPRICEOFOPTIONAWARDS($/SH)

GRANT

DATEFAIRVALUEOFSTOCKANDOPTIONAWARDS($)(4)

THRESHOLD

(#)

TARGET(#)

JasonKulas

RSU 4/7/16 — — 78,298 — — 803,346

RSU 4/28/16 — — 6,656 — — 89,262

PSU

11/1/16

770

20,536

—

—

—

247,050

IsmailDawood

—

—

—

—

—

—

—

—

RichardMorrin

RSU 3/29/16 — — 54,114 — — 480,000

RSU 4/5/16 — — 21,293 — — 223,152

PSU

11/1/16

194

5,172

—

—

—

62,220

KalyanSeshan

RSU 4/5/16 — — 23,377 — — 245,000

PSU

11/1/16

211

5,628

—

—

—

67,710

ChristopherPfirrman

RSU 4/5/16 — — 19,465 — — 204,000

PSU 11/1/16 117 3,118 — — — 37,515

RSU

11/16/16

—

—

21,645

—

—

300,000

(1)TypeofAward:

» RSU–restrictedstockunit » PSU–SANPerformanceAwardprogramRSU

(2)TheamountsshownunderthesecolumnsrepresentpotentialaggregatethresholdandtargetpayoutsforachievementbySantanderofthresholdandtargetperformancelevelsforawardsgrantedundertheSANPerformanceAwardprogram.The“threshold”levelreferstoanamountequalto3.75%ofourNEO’stargetaward,ortheminimumamountpayableifaperformancetargetisreachedundertheprogram.The“target”levelreferstoanamountequalto100%ofourNEO’stargetaward.

(3)ThiscolumnshowsthenumberofRSUsgrantedin2016toourNEOs.ForRSUsgrantedundertheBonusPlantoMr.KulasonApril7,2016andApril28,2016,50%ofsuchRSUsvestedandsettledimmediatelyandtheremainderwillvestandbesettledinthreeequalinstallmentsonthefirstthreeanniversariesofthegrantdate.ForRSUsgrantedundertheBonusPlantoMessrs.Morrin,SeshanandPfirrmanonApril5,2016,60%ofsuchRSUsvestedandsettledimmediatelyandtheremainderwillvestandbesettledinthreeequalinstallmentsonthefirstthreeanniversariesofthegrantdate.FortheretentionawardRSUsgrantedtoMr.MorrinonMarch29,2016,one-thirdofsuchRSUswillvestandsettleoneachofthefirstthreeanniversariesofthegrantdate.FortheretentionawardRSUsgrantedtoMr.PfirrmanonNovember16,2016,onethirdofsuchRSUsvestedandsettledimmediatelyandtheremainderwillvestandbesettledintwoequalinstallmentsonthefirsttwoanniversariesofthegrantdate.AfterthesharessubjecttotheRSUsaresettled,theywillremainsubjecttotransferandsalerestrictionsforaperiodofoneyear.

(4)ThiscolumnshowstheaggregategrantdatefairvalueofRSUsandPSUsgrantedtoourNEOsin2016.Generally,theaggregategrantdatefairvalueistheamountthatSCexpectstoexpenseinitsfinancialstatementsovertheaward’svestingscheduleasfollows:

» ForRSUs,fairvalueiscalculatedbasedontheclosingpriceofourCommonStockontheNYSEonthegrantdate(resultingina$8.87perunitvalueforMarch29,

2016,a$10.48perunitvalueforApril5,2016,a$10.26perunitvalueforApril7,2016,a$13.41perunitvalueforApril28,2016,anda$13.86perunitvalueforNovember16,2016).

» ForPSUs,thefairvalueisbasedonwholesharevalueattarget(whichisalsothemaximumvalueofthoseawards).Theactualvalueofunitsreceivedwilldependon

Santander’sfutureperformance,asdescribedin“Compensation—CompensationDiscussionandAnalysis–ComponentsofAnnualCompensation–Long-TermEquityBasedIncentiveCompensation.”


43

Table of Contents


OutstandingEquityAwardsatFiscal2016Year-EndThefollowingtableprovidesinformationregardingalloutstandingequityawardsheldbyourNEOsasofDecember31,2016.

OPTIONAWARDS

STOCKAWARDS

NAME

NUMBEROFSECURITIESUNDERLYING

UNEXERCISEDOPTIONS

EXERCISABLE(#)

NUMBEROFSECURITIESUNDERLYINGUNEXERCISED

OPTIONSUNEXERCISABLE

(#)

EQUITYINCENTIVE

PLANAWARDS:

NUMBEROFSECURITIESUNDERLYING

UNEXERCISEDUNEARNEDOPTIONS(#)

OPTIONEXERCISEPRICE($)

OPTIONEXPIRATION

DATE

NUMBEROF

SHARESOR

UNITSOFSTOCKTHATHAVENOT

VESTED(#)

MARKETVALUEOF

SHARESOR

UNITSOFSTOCKTHATHAVENOT

VESTED($)(a)

EQUITYINCENTIVEPLAN

AWARDS:NUMBER

OFUNEARNEDSHARES,UNITSOROTHERRIGHTSTHAT

HAVENOTVESTED(#)

EQUITYINCENTIVEPLAN

AWARDS:MARKET

ORPAYOUTVALUEOF

UNEARNEDSHARES,UNITSOROTHERRIGHTSTHAT

HAVENOTVESTED($)(a)

JasonKulas

239,096 — — 9.21 Dec.2021 68,918(b)

930,393 — —

166,019 — — 9.21 Dec.2021 11,950(c)

161,325 — —

73,252 — — 12.10 Dec.2021 39,149(d)

528,512 — — 136,759 205,139(1) — 24.00 Jan.2024 3,328(d) 44,928 — — 33,333 66,667(2) — 26.48 July2025 — — 3,940(e) 53,190

—

— — — — — — 20,536(f) 277,236

IsmailDawood

— —

—

—

—

56,911(g)

768,299

—

—

RichardMorrin

85,982 — — 9.21 Dec.2021 1,509(c) 20,372 — —

41,048 — — 9.21 Dec.2021 54,114(h)

730,539 — — 18,112 — — 12.10 Dec.2021 8,518(i) 114,993 — —

—

— — — — — — 5,172(f) 69,822

KalyanSeshan

8,000 32,000(3) — 21.74 Sept.2025 9,351(i) 126,239 — —

—

— — — — — — 5,628(f) 75,978

ChristopherPfirrman

— — — — — 7,786(i) 105,111 — — — — — — — 14,430(j) 194,805 — —

—

— — — — — — 3,118(f) 42,093

VestingofoptionandstockawardsreflectedinthetableissubjecttocontinuousservicewithSC,exceptthatunvestedawardsmayvestuponterminationbyusfor“cause,”terminationbytheofficerfor“goodreason”orterminationduetotheofficer’s“disability”ordeath(ineachcaseasdefinedintheapplicableawardagreement).Theterminationvestingprovisionsgenerallyarecoveredinthefootnotesbelow.VestingofawardsmayalsobeimpactedbyachangeincontrolofSC,asmorefullydescribedin“Compensation—PotentialPaymentsuponTerminationorChangeinControl—EquityCompensationPlans”inthisProxyStatement.NotesRelatingtoOptionAwards

(1)ReflectoptionsgrantedunderourManagementEquityPlanonJanuary24,2014.UnvestedoptionsvestinsubstantiallyequalinstallmentsonJanuary24,2017,2018,and2019,withoneyearofacceleratedvestingintheeventofterminationduetodisabilityordeath.

(2)ReflectoptionsgrantedundertheOmnibusPlanonJuly1,2015.UnvestedoptionsvestinsubstantiallyequalinstallmentsonJuly1,2017and2018,withfullvestingintheeventofterminationduetodisabilityordeath.

(3)ReflectoptionsgrantedundertheOmnibusPlanonSeptember22,2015.UnvestedoptionsvestinsubstantiallyequalinstallmentsonSeptember22,2017,2018,2019,and2020,withfullvestingintheeventofterminationduetodisabilityordeath.

NotesRelatingtoStockAwards(allgrantedundertheOmnibusPlan)

(a)ThemarketvalueofthestockawardsisbasedontheclosingpricepershareofourCommonStockontheNYSEonDecember31,2016,whichwas$13.50.

(b)ReflectrestrictedsharesgrantedonDecember31,2013,whichvestinsubstantiallyequalinstallmentsonDecember31,2017and2018,withfullvestingintheeventofterminationbyuswithoutcauseorintheeventofterminationduetodisabilityordeath.

(c)ReflectRSUsgranted(toMr.MorrinonFebruary27,2015andtoMr.KulasonApril10,2015)insettlementofthedeferredstockportionoftheofficer’s2014annualbonus.Mr.Kulas’soutstandingRSUsvestinequalinstallmentsonApril10,2017and2018.Mr.Morrin’soutstandingRSUsvestinequalinstallmentsonFebruary27,2017and2018.AllRSUscontinuetovestpursuanttotheiroriginalscheduleintheeventofterminationbyuswithoutcause,terminationbytheofficerforgoodreason,orterminationduetodisabilityordeath.

(d)ReflectRSUsgrantedonApril7,2016andApril28,2016,insettlementofthedeferredstockportionoftheofficer’s2015annualbonus.TheunvestedRSUsgrantedonApril7,2016,vestinequalinstallmentsonApril7,2017,2018,and2019.TheunvestedRSUsgrantedonApril28,2016vestinequalinstallmentsonApril28,2017,2018,and2019.AllRSUscontinuetovestpursuanttotheiroriginalscheduleintheeventofterminationbyuswithoutcause,terminationbytheofficerforgoodreason,orterminationduetodisabilityordeath.

(e)ReflectPSUsgrantedonJune17,2015aspartoftheSANPerformanceAwardprogramfor2015.ThePSUsvestinequalinstallmentsonJune17,2017and2018basedonSAN’sachievingacertainTSRpositionrelativetoitspeergroupfortheapplicableperformanceperiod.AllPSUscontinuetovestpursuanttotheiroriginalscheduleandsubjecttotheiroriginalperformanceconditionsintheeventofterminationbyuswithoutcause,terminationbytheofficerforgoodreason,orterminationduetodisabilityordeath.

(f)ReflectPSUsgrantedonNovember1,2016aspartoftheSANPerformanceAwardprogramfor2016.ThePSUsvestinoneinstallmentonMarch15,2019basedonSAN’sachievementofanumberofperformanceconditionsrelatedtoearningspershare(25%ofthePSUs),returnontangibleequity(25%ofthePSUs),employeesatisfaction(20%ofthePSUs),customersatisfaction(15%ofthePSUs),individualcustomerloyaltygoals(7.5%ofthePSUs)andcorporatecustomerloyaltygoals(7.5%ofthePSUs).AllPSUscontinuetovestpursuanttotheiroriginalscheduleandsubjecttotheiroriginalperformanceconditionsintheeventofterminationbyuswithoutcause,terminationbytheofficerforgoodreason,orterminationduetodisabilityordeath.

44


Table of Contents

COMPENSATION-EXECUTIVECOMPENSATIONTABLES (g)ReflectRSUsgrantedonDecember16,2015pursuanttoMr.Dawood’sofferletter.TheRSUsvestinequalinstallmentsonDecember16,2017and2018.TheRSUsalsovestfullyifweterminateMr.Dawood’semploymentwithoutcause,ifheterminateshisemploymentforgoodreason,orifhisemploymentterminatesduetohisdisabilityordeath.

(h)ReflectRSUsgrantedonMarch29,2016asaretentionaward.TheRSUsvestinequalinstallmentsonMarch29,2017,2018,and2019.TheRSUsalsovestfullyifweterminatetheofficer’semploymentwithoutcause,ifheterminateshisemploymentforgoodreason,orifhisemploymentterminatesduetohisdisabilityordeath.

(i)ReflectRSUsgrantedonApril5,2016insettlementofthedeferredstockportionoftheofficer’s2015annualbonus.TheRSUsvestinequalinstallmentsonApril5,2017,2018,and2019.AllRSUscontinuetovestpursuanttotheiroriginalscheduleintheeventofterminationbyuswithoutcause,terminationbytheofficerforgoodreason,orterminationduetodisabilityordeath.

(j)ReflectRSUsgrantedonNovember16,2016asaretentionaward.TheRSUsvestinequalinstallmentsonNovember16,2017and2018.TheRSUsalsovestfullyifweterminatetheofficer’semploymentwithoutcauseorifhisemploymentterminatesduetohisdisabilityordeath.

Fiscal2016OptionExercisesandStockVestedThefollowingtableprovidesinformationregardingtheexerciseofstockoptionsandsharesacquiredbyourNEOsuponthevestingofrestrictedstockandRSUsheldbyourNEOsin2016.

OPTIONAWARDS STOCKAWARDS

NAME

NUMBEROFSHARESACQUIREDONEXERCISE

(#)

VALUEREALIZEDONEXERCISE($)(1)

NUMBEROFSHARESACQUIREDONVESTING(#)

VALUEREALIZEDONVESTING($)(2)

JasonKulas — —

39,149

401,669 — — 5,975 61,901 — — 3,328 44,628 —

—

34,459

465,197

IsmailDawood — — 28,456 391,839

RichardMorrin

— —

755

7,935 —

—

12,775

133,882

KalyanSeshan — — 14,026 146,992ChristopherPfirrman

— —

11,679

122,396 —

—

7,215

100,000

(1)AmountsreflecttheaggregatedifferencebetweenthemarketpriceofourCommonStockattheexercisedateandtheexercisepriceoftheoptions.

(2)AmountsreflectthemarketvalueofourCommonStockonthedayonwhichtherestrictedstockandRSUsvested.

POTENTIALPAYMENTSUPONTERMINATIONORCHANGEOFCONTROL


45

EquityCompensationPlansUnderourpriorequitycompensationplan,theManagementEquityPlan,vestingofawardsissubjecttoaccelerationuponachangeincontrol(asdefinedintheplan)ofus.Specifically,unlessotherwiseprovidedbytheCompensationCommittee,(1)time-vestingoptionswillautomaticallyvestandbecomeexercisable,and(2)performance-vestingoptionswillvesttotheextentthatweachievetheapplicableaveragereturnonequitytargetstartingatthebeginningofapre-establishedfive-yearperformanceperiodandendinguponthedateofthechangeincontrol.NofurtherawardswillbegrantedundertheManagementEquityPlan.

Weoriginallyadoptedourcurrentequitycompensationplan,theOmnibusPlan,onDecember28,2013,andwerestatedtheOmnibusPlaneffectiveJune16,2016,withtheapprovalofourstockholders.

ForOmnibusPlanawardsgrantedbeforeJune16,2016,intheeventofachangeincontrol(asdefinedintheplan)ofus,unlessotherwiseprovidedbytheCompensationCommittee,

(1)alltime-vestingoptionswillbecomefullyexercisable;(2)alltime-vestingrestrictedstockawardsandRSUswillbecomefullyvested;and(3)allperformance-vestingawardswillbecomevestedtotheextentthattheapplicableperformancetargetsaremetthroughthedateofthechangeincontrol.

ForOmnibusPlanawardsgrantedonorafterJune16,2016,intheeventofachangeincontrol(asdefinedintherestatedplan)ofus,(1)awardsgrantedtonon-employeedirectorswillfullyvest;and(2)forawardsgrantedtoallotherserviceproviders,vestingwilldependonwhethertheawardsareassumed,converted,orreplacedbytheresultingentity:

» Forawardsthatarenotassumed,converted,orreplaced,(i)time-vestingawardswillfullyvestuponthechangeincontrol;and(ii)performance-vestingawardswillvestbasedonthegreaterofachievementofallperformancegoalsatthe“target”levelortheactuallevelofachievementofperformancegoalsasofthechangeincontrol,andwillbeproratedbasedontheportionoftheperformanceperiodthathadbeencompletedthroughthedateofthechangeincontrol.

Table of Contents


46


» Forawardsthatareassumed,convertedorreplaced,noautomaticvestingwilloccuruponthechangeincontrol.Instead,theawards,asadjustedinconnectionwiththetransaction,willcontinuetovestinaccordancewiththeirterms.Inaddition,time-vestingawardswillfullyvestiftheawardrecipienthasaterminationofemploymentwithintwoyearsafterthechangeincontrolbythecompanyotherthanforcauseorbytherecipientforgoodreason(eachasdefinedintheapplicableawardagreement).Forperformance-vestingawards,theamountvestinguponinvoluntaryterminationwithintwoyearsofachangeincontrolwillbebasedonthegreaterof(i)achievementofallperformancegoalsatthe“target”levelor(ii)theactuallevelofachievementofperformancegoalsasofthechangeincontrol.

AllawardsundertheManagementEquityPlanandtheOmnibusPlanarealsosubjecttoanychangeincontrolandemploymentterminationprovisionscontainedinapplicableawardagreementsandemploymentagreements.Seethefootnotestothe“Compensation—ExecutiveCompensationTables—OutstandingEquityAwardsatFiscal2016YearEnd”tableofthisProxyStatementforinformationregardingvestingofoutstandingequityawardsuponemploymenttermination.

EmploymentAgreementsWearepartytoemploymentagreementswithMessrs.Kulas,Morrin,andDawood.Theseagreementsprovidetheseindividualswith,amongotherthings,paymentsandbenefitsintheeventofterminationofemploymentunderthevariouscircumstancesdescribedbelow.

AchangeincontroldoesnotaffectthetimingoramountofseverancepaymentstoourNEOsundertheiremploymentagreements.

EmploymentAgreementswithJasonKulasandRichardMorrinWeenteredintoemploymentagreementswithMessrs.KulasandMorrinonMay1,2009,andAugust24,2011,respectively,whichsetforththetermsandconditionsofMessrs.Kulas’andMorrin’semploymentwithus.Eachoftheemploymentagreementshadaninitialtermofthreeyears,whichhaspassed,andeachautomaticallyextendsannuallyforadditionalone-yearterms,unlesseitherpartyprovidesnoticeofnon-renewalatleastthreemonthspriortotheextensiondate.

EachofMessrs.KulasandMorrinwillbeentitledtothefollowingunderhisemploymentagreementifterminatedbyuswithoutcause(asdefinedintheagreement)(butexcludingterminationduetodeathordisability)oruponresignationbecauseofareductioninbasesalaryortargetbonusopportunity,ineachcasesubjecttotheexecutionofageneralreleaseandwaiverinfavorofSC: » 12monthsofsalarycontinuation;

» Fullannualperformancebonusforthecalendaryearinwhichtheterminationofemploymentoccurs;

» Certaindeferredbonuspayments; » Acceleratedvestingandsettlementofequity-related

awards;and » 12monthsofcontinuedmedical,dental,andlifeinsurancecoverage.

EachofMessrs.KulasandMorrinwillbeentitledtothefollowingunderhisemploymentagreementifhisemploymentterminatesduetodisability(asdefinedintheagreement):(1)participationinourshort-termsalarycontinuationprogramfor13weeks;(2)subsequentparticipationinourlong-termandindividualdisabilityinsuranceprogrampursuanttoitsterms;and(3)proratedannualbonusesfortheyearofterminationand,incertaincases,forsubsequentyears.

EachofMessrs.KulasandMorrinwillbeentitledtothefollowingunderhisemploymentagreementifhisemploymentterminatesduetodeath: » 12monthsofsalarycontinuation;

» Fullannualperformancebonusforthecalendaryearinwhichtheterminationofemploymentoccurs;

» Certaindeferredbonuspayments;and » 12monthsofcontinuedmedicalanddentalinsurancecoverage.

EachofMessrs.KulasandMorrinissubjecttothefollowingrestrictivecovenantsunderhisemploymentagreement: » Perpetualconfidentiality;

» Non-solicitationofouremployeesandouraffiliateemployeesduringemploymentandforoneyearafter;

» Non-competitionduringemploymentandforanyperiodwhilereceivingseverancepaymentsundertheagreement;

» Cooperationinthecontextoflitigationinvolvingouraffiliatesorusduring

employmentandforthependencyofanysuchlitigationorotherproceeding;and

» Perpetualnon-disparagementofus,ouraffiliates,andourofficersanddirectorsandouraffiliates’officersanddirectors.

EmploymentAgreementwithIsmailDawoodOnDecember1,2016,Mr.Dawoodenteredintoanamendedandrestatedemploymentletteragreementwithus,whichsetsforththetermsandconditionsofMr.Dawood’semploymentwithus.Undertheagreement,ifMr.Dawood’semploymentisterminatedbyusotherthanforcauseandotherthanduetodeathordisability(ineachcaseasdefinedintheagreement),orifheresignswithgoodreason(asdefinedintheagreement),hewillbeentitledtoreceiveterminationbenefits,contingentonhisexecutionofareleaseofclaims,whichincludethefollowing:(1)alumpsumpaymentequalto225%ofhisannualbasesalary;and(2)alumpsumcashpaymentequalto12monthsofcompany-paidhealthcarecoverageforMr.Dawoodandhiseligibledependents.

Further,ifMr.Dawood’semploymentwasterminatedotherthanforcauseandotherthanduetodeathordisability,orifheresignedwithgoodreason,hewasentitledtoreceive:(1)alumpsumcashpaymentequalto$330,000ifhisterminationoccurredpriortopaymentofhis2016annualbonus(andhedidnotreceiveanybonus);and(2)fullvestingofhissign-onawardof85,367RSUs.

Table of Contents

COMPENSATION-EXECUTIVECOMPENSATIONTABLES TablesIllustratingPotentialPaymentsuponTerminationorChangeinControlThefollowingtableprovidesinformationregardingthepaymentsandbenefitstowhicheachNEOwouldbeentitledintheeventofterminationofsuchindividual’semploymentwithSCunderspecifiedcircumstancesandintheeventofachangeincontrolofSC.Exceptasotherwisenoted,theamountsshown(1)areestimatesonlyand(2)assumethattheapplicableterminationofemploymentwaseffective,orthatthechangeincontroloccurred,asofDecember31,2016.

NAME

CASH($)

EQUITY($)(7)

PERQUISITES/BENEFITS($)

TOTAL($)

JasonKulas

Terminationduetodeath 4,213,304(1) 1,995,584 1,018,130(8) 7,227,018Terminationduetodisability 1,921,554(2) 1,995,584 — 3,917,138TerminationbySCwithoutcause 4,213,304(1) 1,995,584 7,183(9) 6,216,071TerminationbyNEOforgoodreason 446,304(6) 1,065,191 — 1,511,495Changeincontrol(notermination) — 1,665,158 — 1,665,158

IsmailDawood Terminationduetodeath — 768,299 1,000,000(10) 1,768,299Terminationduetodisability — 768,299 50,820(11) 819,119TerminationbySCwithoutcause 1,960,688(3) 768,299 16,239(12) 2,745,226TerminationbyNEOforgoodreason 1,960,688(3) 768,299 16,239(12) 2,745,226Changeincontrol(notermination) — 768,299 — 768,299

RichardMorrin Terminationduetodeath 1,488,261(4) 935,726 1,007,200(8) 3,431,187Terminationduetodisability 659,511(2) 935,726 — 1,595,237TerminationbySCwithoutcause 1,488,261(4) 935,726 7,176(9) 2,431,163TerminationbyNEOforgoodreason 123,261(5) 935,726 — 1,058,987Changeincontrol(notermination) — 865,904 — 865,904

KalyanSeshan Terminationduetodeath 98,000(6) 202,217 — 300,217Terminationduetodisability 98,000(6) 202,217 — 300,217TerminationbySCwithoutcause 98,000(6) 202,217 — 300,217TerminationbyNEOforgoodreason 98,000(6) 202,217 — 300,217Changeincontrol(notermination) — 126,239 — 126,239

ChristopherPfirrman Terminationduetodeath 81,600(6) 342,009 — 423,609Terminationduetodisability 81,600(6) 342,009 — 423,609TerminationbySCwithoutcause 81,600(6) 342,009 — 423,609TerminationbyNEOforgoodreason 81,600(6) 147,204 — 228,804Changeincontrol(notermination) — 105,111 — 105,111

(1)Includesannualbasesalaryof$1,800,000,$1,967,000forthefullannualperformancebonusfor2016,andpaymentofdeferredcashportionofbonusawardstotaling$446,304.

(2)Assumesthat:(i)theNEOfirstreceivescompensationunderourshort-termsalarycontinuationprogram13weekspriortoDecember31,2016andbeginsreceivingcompensationandbenefitsunderourlong-termandindividualdisabilityinsuranceprogramonDecember31,2016,(ii)targetlevelofannualcashperformancebonusisachievedin2016andnobonusispayableforsubsequentyearsduetoourNEOreceivingcompensationandbenefitsunderourlong-termandindividualdisabilityinsuranceprogram,and(iii)theNEOiseligibleforourshort-termsalarycontinuationbenefits.See“Compensation—PotentialPaymentsuponTerminationorChangeinControl—EmploymentAgreements”foradditionalinformation.

(3)Includes225%ofbasesalaryeffectiveasofDecember31,2016,and$330,000pursuanttoMr.Dawood’semploymentagreement.

(4)Includesannualbasesalaryof$650,000,$715,000forthefullannualperformancebonusfor2016andpaymentofdeferredcashportionofbonusawardstotaling$123,261.

(5)Representstheunpaiddeferredcashportionofthe2014and2015bonusawards.

(6)Representstheunpaiddeferredcashportionofthe2015bonusaward.

(7)Representsthevalueofacceleratedvestingofoptionawardsandstockawards.Seethefootnotestothe“Compensation—ExecutiveCompensationTables—OutstandingEquityAwardsatFiscal2016YearEnd”tableofthisProxyStatementforinformationregardingvestinguponemploymenttermination.See“Compensation—PotentialPaymentsuponTerminationorChangeinControl—EquityCompensationPlans”aboveforinformationregardingvestinguponchangeincontrol.Amountsreflectedassumethatallapplicableperformancetargetsforanyperformance-vestingawardsareachieved.

(8)Representspaymentoflifeinsuranceproceedsand12monthsofcontinueddependentmedicalanddentalbenefits.Assumesnoincreaseinthecostofwelfarebenefits.

(9)Represents12monthsofcontinuedmedicalanddentalbenefitsandlifeinsurancecoverage.Assumesnoincreaseinthecostofwelfarebenefits.

(10)

IncludeslifeinsurancepaymenttobemadetoMr.Dawood’sbeneficiariesunderourexecutivelifeinsurancepolicyifMr.DawooddiedonDecember31,2016.

(11)

Representscostofsupplementaldisabilitycoveragetopay60%ofannualizedbasesalaryuntilage65.

(12)

Includes12monthsofcontinuedmedicalanddentalbenefitsforMr.Dawoodandhisdependents.


47

Table of Contents

ADDITIONALGOVERNANCEINFORMATION-RELATEDPARTYTRANSACTIONS

ADDITIONALGOVERNANCEINFORMATION

48


RelatedPartyTransactionsTransactionsbyuswithrelatedpartiesaresubjecttoaformalwrittenpolicy,aswellasregulatoryrequirementsandrestrictions.Underourwrittenpolicy,ourdirectorsanddirectornominees,executiveofficersandholdersofmorethan5%ofourCommonStock,includingtheirimmediatefamilymembers,willnotbepermittedtoenterintoarelatedpartytransactionwithus,asdescribedbelow,withouttheconsentofourAuditCommittee.Anyrequestforustoenterintoatransactioninwhichtheamountinvolvedexceeds$120,000andanysuchpartyhasadirectorindirectmaterialinterest,subjecttocertainexceptions,willberequiredtobepresentedtoourAuditCommitteeforreview,considerationandapproval.ManagementwillberequiredtoreporttoourAuditCommitteeanysuchrelatedpartytransactionandsuchrelatedpartytransactionwillbereviewedandapprovedordisapprovedbythedisinterestedmembersofourAuditCommittee.

Thefollowingisasummaryofmaterialprovisionsofvarioustransactionswehaveenteredintowithourexecutiveofficers,directors(includingnominees),5%orgreaterstockholdersandanyoftheirimmediatefamilymembersorentitiesaffiliatedwiththem.Webelievethetermsandconditionssetforthinsuchagreementsarereasonableandcustomaryfortransactionsofthistype.

ShareholdersAgreementInconnectionwithourinitialpublicofferinginJanuary2014,weenteredintotheShareholdersAgreement,withSHUSA,DDFS,LLC(“DDFS”)SponsorAutoFinanceHoldingsSeriesLP(“SponsorAuto”)andMr.Dundon.TheShareholdersAgreement,asamended,providesthesestockholders,amongotherthings,certainrightsrelatedtodirectornominations,approvalsovercertainactionstakenbyusandregistrationrights.

BoardComposition

TheShareholdersAgreementprovidesthatSHUSAhastherighttonominateanumberofdirectorsequaltotheproduct(roundeduptothenearestwholenumberofdirectors)of(i)afraction,thenumeratorofwhichisthenumberofsharesofourCommonStockthen-heldbySHUSAandthedenominatorofwhichisthetotalnumberofourthen-outstandingsharesofCommonStockand(ii)thenumberofdirectorsconstitutingourentireBoardiftherewerenovacancies.

TheShareholdersAgreementalsoprovidesthatMr.Dundonwillhavetherighttoserveasadirectorforsolongas(x)heisourCEOor(y)heownsatleast5%ofourthen-outstandingsharesofCommonStock(excludingsharesacquiredbyDDFSorMr.Dundonpursuanttoanyequity-basedcompensationplan)andhascontinuedtocomplywithcertainprovisionsofhisemploymentagreementwiththeCompany.Mr.Dundon,whoresignedfromtheBoardonApril1,2016,haselectednottoexercisethisrightintheShareholdersAgreementandhasdecidednottostandforelectionasadirectoratour2017AnnualMeeting.

TheShareholdersAgreementprovidesthatwewilltakeallactionwithinourpowertocausetheindividualsnominatedpursuanttotheprovisionsoftheShareholdersAgreementtobeincludedintheslateofnomineesrecommendedbytheBoardtoourstockholdersforelectionasdirectorsateachAnnualMeetingofourstockholdersandtocausetheelectionofeachsuchnominee,includingsolicitingproxiesinfavoroftheelectionofsuchnominees.EachofSHUSAandDDFShascommittedunderthetermsoftheShareholdersAgreementtovoteallsharesofCommonStockownedbysuchstockholdertocausetheelection

orre-electionoftheindividualsnominatedpursuanttotheprovisionsoftheShareholdersAgreementdescribedabove.Inaddition,SHUSAhastherighttodesignateareplacementtofillavacancyontheBoardcreatedbythedepartureofadirectorwhowasnominatedbySHUSA,andwearerequiredtotakeallactionwithinourpowertocausesuchvacancytobefilledbysuchdesignatedreplacement(includingbypromptlyappointingsuchdesigneetotheBoard).

ApprovalRights

TheShareholdersAgreementalsoprovidesthatthefollowingactionsbyuswillrequiretheapprovalofamajorityofthedirectorsnominatedbySHUSAforsolongasSHUSA’sshareownershipisgreaterthan20%ofouroutstandingsharesofCommonStock:

» ExceptasrequiredbychangesinlaworGAAP,anychangetoourmaterialaccountingpolicies;

» ExceptasrequiredbychangesinlaworchangeswhichareconsistentwithchangestothetaxpoliciesorpositionsofaffiliatesofSantanderintheUnitedStates,anychangetoourmaterialtaxpoliciesorpositions;and

» Anychangeinourprincipallineofbusinessorofcertainofourmaterialsubsidiaries.

PutandCallRights

TheShareholdersAgreementalsoprovidesthatDDFSandSHUSAhavecertainputandcallrightsrelatingtothesharesofCommonStockownedbyDDFS.OnJuly2,2015,Mr.DundonenteredintoaSeparationAgreementwiththeCompany,DDFS,SHUSAandSantander,underwhichhisrolesasChairmanoftheBoardandCEOwereterminatedeffectiveasofJuly2,2015.TheSeparationAgreementprovided,amongotherthings,thatMr.DundonresignasChairmanoftheBoard,asourCEOandasanofficerand/ordirectorofanyofoursubsidiarycompanies.Also,inconnectionwith,andpursuantto,theSeparationAgreement,onJuly2,2015,Mr.Dundon,theCompany,DDFS,SHUSAandSantanderenteredintoanamendmenttotheShareholdersAgreement(“SecondAmendment’).TheSecondAmendmentamended,forpurposesofcalculatingthepricepersharetobepaidintheeventthataputorcalloptionwasexercisedwithrespecttothesharesofourCommonStockownedbyDDFSinaccordancewiththetermsandconditionsoftheShareholdersAgreement,thedefinitionoftheterm“AverageStockPrice”tomean$26.83.

PursuanttotheSeparationAgreement,SHUSAwasdeemedtohavedeliveredasofJuly3,2015anirrevocablenoticetoexerciseacalloptionwithrespecttoall34,598,506sharesofourCommonStockownedbyDDFSandconsummatethetransactionscontemplatedbysuchcalloptionnotice,subjecttothereceiptofrequiredregulatoryapprovalsandanyotherapprovalsrequiredbylaw(the“CallTransaction”).BecausetheCallTransactionwasnotconsummatedpriortoOctober15,2015(the“CallEndDate”)asaresultofafailuretoobtainrequiredregulatoryapprovals,DDFSisfreetotransferanyorallsharesofourCommonStockitowns,subjecttothetermsandconditionsoftheAmendedandRestatedLoanAgreement,datedasofJuly16,2014,betweenDDFSandSantander(the“LoanAgreement”).TheLoanAgreementprovidesfora$300millionrevolvingloanwithamaturitydateofApril15,2017.PursuanttotheLoanAgreement,29,598,506sharesofourCommonStockownedbyDDFSarepledgedascollateralunderarelatedpledgeagreement(the“PledgeAgreement”).BecausetheCallTransactionwasnotcompletedonorbeforetheCallEndDate,interestwillaccrueonthepricepaidpershareinthe

Table of Contents


SCP2017ProxyStatement

49

CallTransactionattheovernightLIBORrateonthethirdbusinessdayprecedingtheconsummationoftheCallTransactionplus100basispointswithrespecttoanysharesofourCommonStockultimatelysoldintheCallTransaction.TheShareholdersAgreementfurtherprovidesthatSantandermay,atitsoption,becomethedirectbeneficiaryoftheCallOption,andSantanderhasexercisedthisoption.Ifconsummatedinfull,DDFSwouldreceiveapproximately$928.3millionplusinterestthathasaccruedsincetheCallEndDate.Todate,theCallTransactionhasnotbeenconsummated.

PursuanttotheLoanAgreement,ifatanytimethevalueofourCommonStockpledgedunderthePledgeAgreementislessthan150%oftheaggregateprincipalamountoutstandingundertheLoanAgreement,DDFShasanobligationtoeither(a)repayaportionofsuchoutstandingprincipalamountsuchthatthevalueofthepledgedcollateralisequaltoatleast200%oftheoutstandingprincipalamount,or(b)pledgeadditionalsharesofourCommonStocksuchthatthevalueoftheadditionalsharesofCommonStock,togetherwiththe29,598,506sharesalreadypledgedunderthePledgeAgreement,isequaltoatleast200%oftheoutstandingprincipalamount.AsofthedateofthisProxyStatement,thevalueofthepledgedcollateralislessthan150%ofaggregateprincipalamountoutstandingundertheLoanAgreement,andDDFShasnottakenanyofthecollateralpostingactionsdescribedinclauses(a)or(b)above.IfSantanderdeclarestheborrower’sobligationsundertheLoanAgreementdueandpayableasaresultofaneventofdefault(includingwithrespecttothecollateralpostingobligationsdescribedabove),underthetermsoftheLoanAgreementandthePledgeAgreementSantander’sabilitytorealizeuponthesharesofourCommonStocksubjecttothePledgeAgreementis,subjecttocertainexceptions,limitedtotheexercisebySHUSAand/orSantanderoftherighttodeliverthecalloptionnoticeandtoconsummatetheCallTransactionatthepricespecifiedintheShareholdersAgreement.IftheborrowerfailstopayobligationsundertheLoanAgreementwhendue,includingbecauseofSantander’sdeclarationofsuchobligationsasdueandpayableasaresultofaneventofdefault,ahigherdefaultinterestratewillapplytosuchoverdueamounts.

Inconnectionwith,andpursuantto,theSeparationAgreement,onJuly2,2015,DDFSandSantanderenteredintoanamendmenttotheLoanAgreementandanamendmenttothePledgeAgreementthatprovide,amongotherthings,thattheoutstandingbalanceundertheLoanAgreementshallbecomedueandpayableupontheconsummationoftheCallTransactionandthattheamountotherwisepayabletoDDFSundertheCallTransactionshallbereducedbytheamountoutstandingundertheLoanAgreement,includingprincipal,interestandfees,andfurtherthatanynetcashproceedsreceivedbyDDFSonaccountofsalesofourCommonStockaftertheCallEndDateshallbeappliedtotheoutstandingbalanceundertheLoanAgreement.

OnAugust31,2016,Mr.Dundon,DDFS,theCompany,SantanderandSHUSAenteredintoaSecondAmendmenttotheSeparationAgreement,andMr.Dundon,DDFS,SantanderandSHUSAenteredintoaThirdAmendmenttotheShareholdersAgreement,wherebythepricepersharetobepaidtoDDFSinconnectionwiththeCallTransactionwasreducedfrom$26.83to$26.17,thearithmeticmeanofthedailyvolume-weightedaveragepriceforashareofourCommonStockforeachofthe10consecutivecompletetradingdaysimmediatelypriortoJuly2,2015,thedateonwhichtheCallOptionwasexercised.

OnApril17,2017,theLoanAgreementmaturedandbecamedueandpayablewithanunpaidprincipalbalanceofapproximately$290millionasofthatdate.BecausetheborrowerfailedtopayobligationsundertheLoanAgreementonApril17,2017,theborrowerisindefaultandiscurrentlybeingchargedthedefaultinterestrateasdefinedbytheLoanAgreement.TheLoan

AgreementgenerallydefinesthedefaultinterestrateastheBaseRateplus2%.TheBaseRateasdefinedintheLoanAgreementisthehigherof(i)thefederalfundsrateplus1⁄2of1%or(ii)theprimerate,whichistheannualrateofinterestpubliclyannouncedbytheNewYorkBranchofSantanderfromtimetotime.AsofApril21,2017,theprimerateasannouncedbytheNewYorkBranchofSantanderwas4%.

Other

TheShareholdersAgreementprovidesthatneitherSHUSAnorwearepermittedtotakeanyactionthatwouldcauseDDFSorSponsorAutotoberequiredtoregisterasabankholdingcompany.TheShareholdersAgreementalsoprovidesthatSHUSA,DDFSandSponsorAutohavepreemptiverightstopurchasetheirrespectiveproportionatesharesofanyissuancebyusofequitysecurities,securitiesconvertibleintoorexercisableforequitysecuritiesorsecuritiesthatincludeanequitycomponent,subjecttocertainexceptions.

OtherArrangementsGuarantees

Santanderhasprovidedguaranteesofthecovenants,agreements,andourobligationsunderthegoverningdocumentsofourwarehousefacilitiesandprivatelyissuedamortizingnotes.Theseguaranteesarelimitedtoourobligationsasservicer.Beginninginfiscalyear2015,wehaveagreedtopaySantanderandSHUSAafeeof12.5basispointsonsuchfacilitiesandnotesinexchangeforprovidingsuchguarantees.Forthefiscalyear2016,weincurred$6.4millioninfeesunderthisarrangement.

CurrentlyOutstandingBorrowingArrangements

Santanderhasextendedvariouscreditfacilities(the“SantanderCreditFacilities”)tous.

SantanderConsumerFunding3LLC(asubsidiaryofours)hasacommittedfacilityinaninitialamountof$1,750millionestablishedwiththeNewYorkBranchofSantanderinDecember2011.In2016,thelargestoutstandingprincipalbalanceonthisfacilitywas$1,000million,andasofDecember31,2016,thebalanceofthelinewas$1,000million.In2016,wepaid$28.9millionininterestandfeesonthislineofcredit.Theeffectiveinterestrateonthisfacilityin2016was2.86%.ThecurrentmaturityofthefacilityisDecember29,2017.OnMarch4,2016,thisfacilitywasamendedtoreducethecommittedamountfrom$1,750millionto$1,000million.

SantanderConsumerFunding5LLC(asubsidiaryofours)hasacommittedfacilityinaninitialamountof$1,750millionestablishedwiththeNewYorkBranchofSantanderinDecember2011.In2016,thelargestoutstandingprincipalbalanceonthisfacilitywas$1,000millionandasofDecember31,2016,thebalanceofthelinewas$1,000million.In2016,wepaid$22.4millionininterestandfeesonthislineofcredit.Theeffectiveinterestrateonthisfacilityin2016was2.88%.ThecurrentmaturityofthefacilityisDecember31,2018.OnMarch4,2016,thisfacilitywasamendedtoreducethecommittedamountfrom$1,750millionto$1,000million.

SantanderConsumerCaptiveAutoFundingLLC(asubsidiaryofours)hasacommittedfacilityof$500millionestablishedwiththeNewYorkbranchofSantanderonMay31,2013.In2016,thelargestoutstandingprincipalbalanceonthisfacilitywas$500million,andasofDecember31,2016,thebalanceofthelinewas$500million.In2016,wepaid$14.0millionininterestandfeesonthislineofcredit.Theeffectiveinterestrateonthisfacilityin2016was3.04%.ThecurrentmaturityofthefacilityisDecember29,2017.

SantanderConsumerCaptiveAutoFunding5LLC(asubsidiaryofours)hasacommittedfacilityof$500millionestablishedwith

Table of Contents


50


theNewYorkbranchofSantanderonMay31,2013.In2016,thelargestoutstandingprincipalbalanceonthisfacilitywas$475millionandasofDecember31,2016,thebalanceofthelinewas$175million.In2016,wepaid$2.6millionininterestandfeesonthislineofcredit.Theeffectiveinterestrateonthisfacilityin2016was3.87%.ThecurrentmaturityofthefacilityisDecember31,2018.

SantanderConsumerABSFunding2,LLC(asubsidiaryofours)establishedacommittedfacilityof$300millionwithSHUSAonMarch6,2014.In2016,thelargestoutstandingprincipalbalanceonthisfacilitywas$300million,andasofDecember31,2016,theoutstandingprincipalbalanceofthelinewas$300million.In2016,wepaid$6.1millionininterestandfeesonthislineofcredit.Theeffectiveinterestrateonthisfacilityin2016was2.25%.ThisfacilitymaturedonMarch6,2017andwasreplacedonthesamedaywitha$300milliontermpromissorynoteexecutedbySCIllinoisastheborrowerandSHUSAasthelender.InthequarterendedMarch31,2017,thelargestoutstandingprincipalbalanceonthenotewas$300million,andasofMarch31,2017,theoutstandingprincipalbalanceonthenotewas$300million.InthequarterendedMarch31,2017,wepaidzeroinprincipalandzeroininterestandfeesonthisnote.Interestaccruesonthisnoteatarateequaltothree-monthLIBORplus1.35%.ThenotehasamaturitydateofMarch6,2019.

TheCompanyhasacommittedfacilityinaninitialamountof$1,500millionestablishedwithSHUSAonMarch4,2016.In2016,thelargestoutstandingprincipalbalanceonthisfacilitywas$200million,andasofDecember31,2016,thebalanceofthelinewaszero.In2016,wepaid$20.1millionininterestandfeesonthislineofcredit.Theeffectiveinterestrateonthisfacilityin2016was3.74%.ThecurrentmaturityofthisfacilityisMarch1,2019.OnNovember1,2016,thisfacilitywasamendedtoincreasethecommittedamountto$3,000million.

SPAINRevolvingFundingLLC(asubsidiaryofours)establishedacommittedfacilityof$750millionwiththeNewYorkbranchofSantanderonApril3,2017.AsofApril15,2017,theoutstandingprincipalbalanceofthefacility(whichwasalsothelargestoutstandingprincipalbalanceasofApril15,2017)waszero,andwehavepaidzeroininterestandfeesonthisfacility.Borrowingsunderthisfacilitybearinterestatarateequaltoone-monthLIBORplusaspread(basedonthequalityofthecollateralforthefacility)rangingfrom0.60%to0.90%.ThecurrentmaturitydateofthefacilityisDecember31,2018.

SCIllinoisasborrowerexecuteda$650milliontermpromissorynotewithSHUSAaslenderonMarch31,2017.InthequarterendedMarch31,2017,thelargestoutstandingprincipalbalanceonthenotewas$650million,andasofMarch31,2017,theoutstandingprincipalbalanceonthenotewas$650million.InthequarterendedMarch31,2017,wepaidzeroinprincipalandzeroininterestandfeesonthisnote.Interestaccruesonthisnoteattherateof4.20%.ThenotehasamaturitydateofMarch31,2022.

AnysecureddrawingsoutstandingundertheSantanderCreditFacilitiesatthetimeofthefacilities’maturitywillamortizetomatchthematuritiesandexpectedcashflowsofthecorrespondingcollateral.Thecurrentmaturityofeachfacilityislistedabove.Santanderhastheoptiontoallowustorenewthesefacilities.Thesefacilitiescurrentlypermitunsecuredborrowing.

ServicingArrangements

WeareundercontractwithSBNAtoservicethebank’sretailandrecreationalvehicleloanportfolio,whichhadabalanceof$531millionasofDecember31,2016.For2016,SBNApaid$5.2milliontouswithrespecttothisagreement.

ThroughSeptember30,2014,wewereundercontractwithSBNAtoservicethebank’sportfolioofChryslerdealerloans

eitherpurchasedfromusororiginatedunderaflowagreementwithus.EffectiveOctober1,2014,thiscontractwasterminatedandreplacedwithanewcontractwhichtransferredtheservicingofallChryslerdealerloanstoSBNAfromus,requiredSBNAtopayusaone-timefeeof$607,000relatedtothetransferofsuchservicingandrequiredSBNAtopayusarelationshipmanagementfeebasedontheperformanceandyieldsofChryslerdealerloansheldbySBNA.OnApril15,2016,therelationshipmanagementfeewasreplacedwithanoriginationfeeandannualrenewalfeeforeachloan.For2016,SBNApaidus$419,000inrelationshipmanagementfeesand$3.9millioninoriginationandrenewalfeesrelatedtotheseloans.Additionally,for2016,wepaidservicingfeesof$110,000toSBNAunderthiscontract.

UntilMay9,2015,wewerepartytoaflowagreementwithSBNAwherebyweservicedallChryslerconsumervehicleleasesoriginatedundertheagreementandcertainleasessoldtoSBNA.Additionally,wereceivedanoriginationfeeonallleasesoriginatedundertheflowagreement.AsofDecember31,2016,thisportfolioofservicedleaseshadabalanceof$1,297million.For2016,SBNApaidus$7.7millioninservicingfeesrelatedtotheseleases.

OnMarch29,2017,weenteredintoaMasterSecuritiesPurchaseAgreementwithSantander,underwhichwehavetheoptiontosellacontractuallydeterminedamountofeligibleprimeloanstoSantander,throughtheSPAINsecuritizationplatform,foratermendinginDecember2018.Weprovideservicingonallloansoriginatedunderthisarrangement.ForthethreemonthsendedMarch31,2017,wesold$700millionofloanstoSantanderunderthisagreement.

EmploymentofFamilyMembersofDirectorsorExecutiveOfficers

Fromtimetotime,wemayemployindividualswhoareimmediatefamilymembersofourdirectorsorexecutiveofficers,butonlyiftheyareatleastasqualifiedasotherapplicants.

WehaveemployedKennethDundonasourSeniorVicePresident,OriginationsQualityControl.KennethDundonisthebrotherofourformerdirectorandCEO,ThomasDundon.For2016,KennethDundonreceivedcompensationhavinganaggregatevalueof$359,444.WebelievethatthecompensationpaidtoKennethDundoniscomparabletothecompensationwepaytootheremployeesinequivalentpositionswithsimilarlevelsofperformance,skillandexperience.

OtherAgreements

ProdubanServiciosInformaticosGenerales,S.L.,aSantanderaffiliate,isundercontractwithustoprovideprofessionalservices,telecommunications,andinternaland/orexternalapplications.Expensesincurredtotaled$93,000fortheyearendedDecember31,2016.

OnJune30,2014,weenteredintoanindemnificationagreementwithSBNAwherebyweindemnifySBNAforanycreditorresiduallossesonapoolof$48.2millioninleasesoriginatedunderaflowagreementwithSBNA.Atthetimeoftheindemnificationagreement,weestablisheda$48.2millioncollateralaccountwithSBNAinrestrictedcashthatwillbereleasedovertimetoSBNA,inthecaseoflosses,andtous,inthecaseofpaymentsandsaleproceeds.AsofDecember31,2016,thebalanceinthecollateralaccountwas$11.3million.AsofDecember31,2016,wehadarecordedliabilityof$2.7millionrelatedtotheresiduallossescoveredundertheindemnificationagreement.

Weperiodicallysellloanandleasecontractstoaffiliatesundercertainagreements.AlthoughnosuchsalesoccurredduringtheyearendedDecember31,2016,wesoldleasestoSBNAwith

Table of Contents


StockOwnershipInformation


51

adepreciatednetcapitalizedcostof$369.1millionandanetbookvalueof$317.3millioninChryslerCapitalleases.Thissalewaseffectedthroughthetransferofaspecialunitofbeneficialinterest(SUBI)inourtitlingtrust.Proceedsfromthesaleofleaseswere$322.9millionforagainof$4.6millionfortheyearendedDecember31,2014.Weretainedservicingrightsontheleasessoldinthistransaction.

OnSeptember16,2014,wesold$18.2millionofreceivablesfromdealerstoSBNA,resultinginagainof$347,000.Wewereentitledtoadditionalproceedsonthissaletotaling$694,000ifcertainconditions,includingcontinuedexistenceandperformanceofthesoldloans,weremetatthefirstandsecondanniversariesofthesale.Atthefirstandsecondanniversarydatesofthesale,whichoccurredduringtheyearsendedDecember31,2015and2016,respectively,wereceived$347,000and$347,000,respectively,inadditionalproceedsrelatedtothesaleduetothesatisfactionofconditionsspecifiedatthetimeofthesale.

InDecember2015,weformedanewwholly-ownedsubsidiary,SCI,andSCIopeneddepositaccountswithBancoSantanderPuertoRico.AsofDecember31,2016,SCIhadcashof$98.8millionondepositwithBancoSantanderPuertoRico.ThedepositaccountswereenteredintointheordinarycourseofbusinessandonsubstantiallythesametermsasBancoSantanderPuertoRico’sotheraccountholders.

During2015,SISpurchasedaportionofClassBnotesofSDART2013-3,aconsolidatedsecuritizationTrust,withaprincipalbalanceof$725,000.In2016,SISwaspaid$2,000ininterestontheClassBnotes.In2016,thelargestoutstandingprincipalbalanceoftheClassBnoteswas$510,000,andasofDecember31,2016,theoutstandingprincipalbalanceoftheClassBnoteswaszero.TheeffectiveinterestrateoftheClassBnotesin2016was1.19%.

Inaddition,SISpurchasedaninvestmentintheClassA3notesofCCART2013-A,asecuritizationTrustformedbyusin2013.AlthoughCCART2013-AisnotaconsolidatedentityoftheCompany,wecontinuetoservicetheassetsoftheassociatedtrust.In2016,SISwaspaid$2,000ininterestontheClassA3notes.In2016,thelargestoutstandingprincipalbalanceoftheClassA3noteswas$743,000,andasofDecember31,2016,theoutstandingprincipalbalanceoftheClassA3noteswaszero.TheeffectiveinterestrateoftheClassA3notesin2016was0.91%.

SISalsoservesasco-manageroncertainofoursecuritizations.AmountspaidtoSISasco-managerfortheyearendedDecember31,2016totaled$1.1million.ThepaymentstoSISasco-managerofoursecuritizationsweremadeintheordinarycourseofbusinessandonsubstantiallythesametermsasotherco-managersofoursecuritizations.

WehaveenteredintointerestrateswapsandcapswithSantanderanditsaffiliateswithanotionalvalueofapproximately$7.3billionasofDecember31,2016.Interestexpenseontheseagreementsincludesamountstotaling$16.1millionfortheyearendedDecember31,2016.

WearepartytoaMasterServicesAgreementwithacompanyinwhichwehaveacostmethodinvestmentandholdawarranttoincreaseourownershipifcertainvestingconditionsaresatisfied.TheMasterServicesAgreementenablesustoreviewcreditapplicationsofretailstorecustomers.WebeganreviewingapplicationsundertermsofthisAgreementonOctober24,2013.Wedidnotoriginateanyloansin2016underthisagreementand,effectiveAugust17,2016,weceasedfundingneworiginationsfromalloftheretailersforwhichwereviewcreditapplicationsunderthisagreement.

UnderanagreementwithMr.Dundon,weareprovidedaccesstoasuiteataneventcenterthatisleasedbyMr.Dundon,andwhichweuseforbusinesspurposes.WereimburseMr.Dundonfortheuseofthisspaceonaperiodicbasis.In2016,wereimbursedMr.Dundon$200,000fortheuseofthisspace.

TwoofthefundsthatinvestedinSponsorAuto,CCPIIAutoHoldingsLLCandKKR2006AutoHoldingsILLC,alsoweretheequityinvestorsintwoLLCsthatwereformedin2011andwereconsolidatedinourfinancialstatementsduetoourbeingtheprimarybeneficiaryoftheentities.OnAugust30,2013,thefundsabandonedtheirinterestsintheentities,resultinginourhavingfullownershipoftheentities,whichcontinuetobeconsolidatedinourfinancialstatements.Eachfund’sinvestmentineachLLCwas$5,000.AtthetimetheLLCswereformed,weenteredintoindemnificationagreementswitheachofthefundswherebywereimbursedthefunds,onagrossed-upbasis,foralltaxestheyincurredrelatedtotheirinvestmentsintheLLCs.Paymentsundertheseindemnificationagreementshavetotaled$28.1million,allofwhichwaspaidduringtheyearendedDecember31,2012.In2016,werecovered$940,000ofthereimbursedamountsasaresultoftaxrefundstothefunds.AtDecember31,2016,wehadareceivableof$4.2million,representingtheremainingamountoftheindemnificationpaymentsthatweexpecttorecoverasthefundsreceiveadditionaltaxrefunds.Additionally,oneofthefundsservedasthemanagingmemberoftheVIEsuntiltheabandonment.

OnOctober21,2013,weenteredintoaleaseforapproximately373,000squarefeetatapropertythatnowservesasourcorporateheadquarters,andinwhichpropertyMr.KulasandMr.Dundonhaveaminorityequityinvestment.AsofDecember31,2016,futureminimumleasepaymentsovertheremainderofthe12-yeartermofthelease,whichextendsthrough2026,totalapproximately$69.0million.For2016,weincurred$4.9millioninleaseexpensesonthisproperty.

ThefollowingtableprovidesinformationregardingthebeneficialownershipofourCommonStockasofMarch31,2017(unlessotherwisenoted)by:(i)eachpersonknowntobeneficiallyownmorethan5%ofourCommonStock;(ii)eachofourdirectors;(iii)eachofourNEOs;and(iv)allcurrentdirectorsandexecutiveofficersasagroup.

Forpurposesofthistable,“beneficialownership”(asdefinedinRule13d-3oftheExchangeAct)takesintoaccountsharesastowhichtheindividualhasorsharesvotingorinvestmentpoweraswellassharesthatmaybeacquiredwithin60days(suchasbyexercisingvestedstockoptions,orthevestingofRSUs)andisdifferentfrombeneficialownershipforpurposesofSection16

oftheExchangeAct.Asaresult,thenumbersbelowmaydifferfromthenumbersreportedinformsfiledpursuanttoSection16.

Toourknowledgeandunlessotherwiseindicated,eachstockholderlistedbelowhassolevotingandinvestmentpowerovertheshareslistedasbeneficiallyownedbysuchstockholder.Percentageofownershipisbasedupon359,394,898sharesofCommonStockoutstandingasofMarch31,2017.Numberofsharesheldbybeneficialownersofmorethan5%ofourCommonStockareasofthedateoftheapplicableSECfilingsmadebythoseowners(unlessotherwisenoted),however,percentageshavebeenrecalculatedasofMarch31,2017.

Table of Contents

ADDITIONALGOVERNANCEINFORMATION-STOCKOWNERSHIPINFORMATION

NAMEOFBENEFICIALOWNER

SHARESOWNED

NUMBER

PERCENTAGE

Beneficialownersof5%ormoreofourCommonStock:

ThomasG.Dundon(1)(2) 41,838,031 11.64%

SantanderHoldingsUSA,Inc.(2)(3) 210,995,049 58.71%

WellingtonManagementGroupLLP(4) 23,209,017 6.46%

DirectorsandNamedExecutiveOfficers:

JasonA.Kulas(5) 962,855 *

IsmailDawood 36,949 *

RichardMorrin(6) 184,298 *

ChristopherPfirrman(7) 23,306 *

KalyanSeshan(8) 30,710 *

JoséDoncel — *

StephenA.Ferriss(9) 8,691 *

BrianGunn — *

VictorHill — *

EdithE.Holiday — *

MarkP.Hurley — *

JavierMaldonado — *

RobertJ.McCarthy 2,271 *

WilliamF.Muir — *

ScottPowell — *

WilliamRainer 2,271 *

Allexecutiveofficersanddirectorsasagroup(19persons) 1,286,787 *

* Lessthan1%oftheoutstandingbeneficialownership(1)ThisinformationisbasedsolelyontheSchedule13GfiledonFebruary17,2016byourformerdirectorandCEO,ThomasG.Dundon,2100RossAvenue,Suite800,Dallas,Texas75201.Includes323,176sharesofrestrictedstockand6,847,379stockoptionsthatarecurrentlyexercisableorexercisedsubjecttorequiredregulatoryapproval,overwhichMr.Dundonhassolevotinganddispositivepower.Furtherincludes34,598,506sharesownedbyDDFSLLC,aDelawarelimitedliabilitycompanysolelyownedbyMr.Dundon,overwhichMr.DundonandDDFSLLChavesharedvotinganddispositivepower.

(2)DDFS(seeNote1)andSHUSA(whichcollectivelyowned245,593,555shares,or68.34%ofouroutstandingCommonStockasofMarch31,2017)arepartiestotheShareholdersAgreement,whichprovidescertainBoardnominationrightstoSHUSAandcertainvotingobligationsinconnectionwiththoserights.DuetotheseBoardnominationrightsandvotingobligations,eachofDDFSandSHUSAmaybedeemedtobeneficiallyownallsharesbeneficiallyownedbyeachotherpartywhicharesubjecttosuchvotingobligations.PursuanttotheSeparationAgreement,SHUSAwasdeemedtohavedeliveredasofJuly3,2015anirrevocablenoticetoexerciseacalloptionwithrespecttoallthesharesofourCommonStockownedbyDDFSandconsummatetheCallTransaction,subjecttothereceiptofrequiredbankregulatoryapprovalsandanyotherapprovalsrequiredbylaw.ThetabledoesnotreflectshareswhichmaybedeemedtobebeneficiallyownedbyDDFSorSHUSAsolelybyvirtueoftheShareholdersAgreementortheconsummationoftheCallTransaction.29,598,506sharesownedbyDDFSarepledgedassecurityforalineofcreditextendedtoDDFSbyanaffiliateofSantander.Formoreinformation,pleasesee“RelatedPartyTransactions—ShareholdersAgreement—PutandCallRights”inthisProxyStatement.

(3)RepresentssharesownedbySHUSA,75StateStreet,Boston,Massachusetts02109,awhollyownedsubsidiaryofSantander.

(4)ThisinformationisbasedsolelyontheSchedule13GfiledonFebruary09,2017,byWellingtonManagementGroupLLP(“Wellington”).Wellington,aninvestmentadviserandparentholdingcompany,reportedthatithadsharedvotingpowerwithrespectto20,207,263ofsuchsharesandshareddispositivepowerwithrespectto23,209,017shares.Wellingtonreportedthatitsclientshavetherighttoreceive,orthepowertodirectthereceiptof,dividendsfrom,ortheproceedsfromthesaleof,allsuchsharesownedofrecordbysuchclients.TheaddressofWellington’sprincipalbusinessofficeisWellingtonManagementCompanyLLP,280CongressStreet,Boston,Massachusetts02210.

(5)Includes736,973sharesofCommonStockthatMr.Kulashastherighttoacquirewithin60daysupontheexerciseofstockoptionsorthevestingofRSUs.

(6)Includes147,981sharesofCommonStockthatMr.Morrinhastherighttoacquirewithin60daysupontheexerciseofstockoptionsorthevestingofRSUs.

(7)Includes2,595sharesofCommonStockthatMr.Pfirrmanhastherighttoacquirewithin60daysupontheexerciseofstockoptionsorthevestingofRSUs.

(8)Includes11,117sharesofCommonStockthatMr.Seshanhastherighttoacquirewithin60daysupontheexerciseofstockoptionsorthevestingofRSUs.

(9)Includes5,207sharesofCommonStockthatMr.Ferrisshastherighttoacquirewithin60daysupontheexerciseofstockoptionsorthevestingofRSUs.

52


Table of Contents

OTHERGOVERNANCEINFORMATION OtherGovernanceInformation


53

CodeofConductandEthics

WehaveadoptedourBusinessConductStatementasourCodeofConductandEthicsapplicabletoallofficers,directorsandemployees.TheBusinessConductStatementispubliclyavailableonourwebsiteathttp://investors.santanderconsumerusa.com.

CorporateGovernanceGuidelines

Inperformingitsrole,theBoardisguidedbyourCorporateGovernanceGuidelines,whichestablishaframeworkforthegovernanceoftheBoardandthemanagementofourCompany.TheguidelineswereadoptedbytheBoardandreflectregulatoryrequirementsandbroadlyrecognizedgovernancebestpractices,includingtheNYSEcorporategovernancelistingstandards.Theyarereviewedregularlyandupdatedasappropriate.Thefulltextcanbefoundonourwebsiteathttp://investors.santanderconsumerusa.com.

DirectorAttendance

During2016,theBoardheld21meetings.Eachincumbentdirectorattendedatleast75%oftheaggregatenumberofmeetingsoftheBoardandcommitteesoftheBoardonwhichheorsheserved,exceptforMr.Maldonado,whoattended44%ofthemeetingsoftheBoardandcommitteesoftheBoardonwhichheserved.Theoutsidedirectorsmetregularlyinexecutivesessions,withourindependentChairmanoftheBoardchairingthesessionsofoutsidedirectors.Weencourageallincumbentdirectors,aswellasallnomineesforelectionasdirector,toattendtheAnnualMeeting.Noneofourincumbentdirectorsattendedour2016AnnualMeeting,exceptforMr.Kulas.

CommunicationwithDirectors

StockholdersorotherinterestedpartiesdesiringtocommunicatewiththeBoard,withournon-managementdirectors,withourChairmanoftheBoardorthechairofanyoftheBoardcommitteesorwithanyindividualdirectormaydosoinwritingtoSantanderConsumerUSAHoldingsInc.,Attn:(NameofBoardMember(s)),c/oOfficeoftheSecretary,1601ElmStreet,Suite800,Dallas,Texas75201,orbye-mailc/otheOfficeoftheSecretaryatcorporate.secretary@santanderconsumerusa.com.

Section16(a)BeneficialOwnershipReportingCompliance

Section16(a)oftheExchangeActrequiresourdirectorsandexecutiveofficersandbeneficialownersofmorethan10%ofourCommonStocktofilereportswiththeSECwithrespecttotheirownershipofCommonStock.Directors,executiveofficersandpersonsowningmorethan10%ofourCommonStockarerequiredtofurnishuswithcopiesofallSection16(a)reportstheyfile.

Basedsolelyonourreviewofthecopiesofsuchreportsreceivedbyusandanywrittenrepresentationsfromreportingpersonsthatnootherreportswererequiredofthosepersons,webelievethatduring2016allsuchreportsrequiredtobefiledbyourdirectors,executiveofficersandbeneficialownersofmorethan10%ofourCommonStockwerefiled,exceptforaninadvertentfailuretofileaninitialstatementofbeneficialownershipuponMr.Hurley’sappointmenttotheBoardinApril2016.

Table of Contents

QUESTIONSANDANSWERS

QUESTIONSANDANSWERS

54


ProxyMaterialsandVotingInformation1.HowdoestheBoardrecommendthatIvoteonmatterstobeconsideredattheAnnualMeeting?

TheBoardrecommendsthatyouvoteasfollows:

AGENDAITEM

DESCRIPTION

BOARDRECOMMENDATION

1

ElectionofDirectors FORALL

2

RatificationofPwCastheCompany’sindependentregisteredpublicaccountingfirmfor2017

FOR

2.Whoisentitledtovote?

OnlyholdersofrecordofourCommonStockatthecloseofbusinessonApril13,2017,whichtheBoardofDirectorshassetastherecorddate,areentitledtonoticeof,andtovoteat,theAnnualMeeting.Asoftherecorddate,wehad359,418,551sharesofCommonStockoutstandingandentitledtovoteattheAnnualMeeting,andoursharesofCommonStockwereheldbyapproximately20stockholdersofrecord.EachstockholderofrecordofCommonStockontherecorddatewillbeentitledtoonevoteforeachshareheldonallmatterstobevoteduponattheAnnualMeeting.Therearenocumulativevotingrightsintheelectionofdirectors.

3.WhatconstitutesquorumattheAnnualMeeting?

Thepresence,inpersonorbyproxy,ofamajorityofthevotesentitledtobecastonamattertobevotedonattheAnnualMeetingconstitutesaquorumforactiononthatmatter.ThesharesofCommonStockrepresentedbyproperlyexecutedproxycardsorproperlyauthenticatedvotinginstructionsrecordedelectronicallythroughtheInternetorbytelephone,willbecountedforpurposesofdeterminingthepresenceofaquorumattheAnnualMeeting.Abstentionsandbrokernon-voteswillbecountedtowardfulfillmentofquorumrequirements.Abrokernon-voteoccurswhenanomineeholdingsharesforabeneficialownerdoesnotvoteonaparticularproposalbecausethenomineedoesnothavediscretionaryvotingpowerwithrespecttothatproposalandhasnotreceivedinstructionsfromthebeneficialowner.

4.HowdoIvotewithoutattendingtheAnnualMeeting?

Whetheryouholdsharesdirectlyasastockholderofrecordorthroughabroker,trustee,orothernominee,youmaydirecthowyoursharesarevotedwithoutattendingtheAnnualMeeting.YoumaygivevotinginstructionsbytheInternet,bytelephoneorbymail.Instructionsareontheproxycardorinstructioncard.Theproxyholderswillvoteallproperlyexecutedproxiesthataredeliveredinresponsetothissolicitation,andnotlaterrevoked,inaccordancewiththeinstructionsgivenbyyou.

Ifyouareastockholderofrecordontherecorddate,thenyourproxymustbereceivednolaterthan5:00p.m.,EasternTimeonJune11,2017tobecounted.Ifyouarethebeneficialownerofyoursharesheldthroughabroker,trusteeorothernominee,pleasefollowtheinstructionsofyourbroker,trusteeorothernomineeindeterminingthedeadlineforsubmittingyourproxy.

5.HowcanIrevokemyproxy?

AstockholderofrecordwhohasgivenaproxymayrevokeitatanytimepriortoitsexerciseattheAnnualMeetingbyeither(i)givingwrittennoticeofrevocationtoourCorporateSecretary,(ii)properlysubmittingadulyexecutedproxybearingalaterdate,or(iii)appearinginpersonattheAnnualMeetingandvotinginperson.

Ifyouarethebeneficialownerofsharesheldthroughabroker,trustee,orothernominee,youmustfollowthespecificinstructionsprovidedtoyoubyyourbroker,trustee,orothernomineetochangeorrevokeanyinstructionsyouhavealreadyprovidedtoyourbroker,trustee,orothernominee.

6.Whatisthedifferencebetweena“stockholderofrecord”anda“beneficial”stockholderofsharesheldinstreetname?

Ifyoursharesareowneddirectlyinyournameinanaccountwithourtransferagent,Computershare,youareconsideredthe“stockholderofrecord”ofthosesharesinyouraccount.

Ifyoursharesareheldinanaccountwithabroker,bank,orothernomineeascustodianonyourbehalf,youareconsidereda“beneficial”stockholderofthoseshares,whichareheldin“streetname.”Thebroker,bank,orothernomineeisconsideredthestockholderofrecordforthoseshares.Asthebeneficialowner,youhavetherighttoinstructthebroker,bank,orothernomineeonhowtovotethesharesinyouraccount.

7.Howwillyoutreatmyvotinginstructions?

Ifyouprovidespecificvotinginstructions,yourshareswillbevotedasinstructed.

IfyouholdsharesasthestockholderofrecordandsignandreturnaproxycardorvotebyInternetortelephonewithoutgivingspecificvotinginstructions,thenyourshareswillbevotedinaccordancewiththerecommendationsoftheBoard.TheBoardrecommends(1)avotefortheelectionofalldirectornomineesand(2)avotefortheratificationoftheappointmentofPwCasourindependentregisteredpublicaccountingfirm.Intheeventthatanydirectornomineeisunavailableforelection,suchsharesmaybevotedfortheelectionofsuchsubstitutenomineeornominees,ifany,astheBoardmayselect.

Thepersonsidentifiedashavingtheauthoritytovotetheproxiesgrantedbytheproxycardwillalsohavediscretionaryauthoritytovote,totheextentpermittedbyapplicablelaw,onsuchotherbusinessasmayproperlycomebeforetheAnnualMeetingandanypostponementoradjournment.TheBoardisnotawareof

Table of Contents

QUESTIONSANDANSWERS


55

anyothermattersthatarelikelytobebroughtbeforetheAnnualMeeting.IfanyothermatterisproperlypresentedforactionattheAnnualMeeting,includingaproposaltoadjournorpostponetheAnnualMeetingtopermitustosolicitadditionalproxiesinfavorofanyproposal,thepersonsnamedintheproxycardwillvoteonsuchmatterintheirowndiscretion.

Asabeneficialstockholder,youmustprovidevotinginstructionstoyourbroker,bank,orothernomineebythedeadlineprovidedintheproxymaterialsyoureceivefromyourbroker,bank,orothernomineetoensureyoursharesarevotedthewayyouwouldlike.Ifyoudonotprovidevotinginstructionstoyourbroker,bank,orothernominee,whetheryoursharescanbevotedonyourbehalfdependsonthetypeofitembeingconsideredforvote.UnderNYSErules,brokersarepermittedtoexercisediscretionaryvotingauthorityonlyon“routine”matters.Therefore,yourbrokermayvoteonItemNo.2(RatificationoftheAppointmentofPwCasourIndependentRegisteredPublicAccountingFirmfor2017)evenifyoudonotprovidevotinginstructions,becauseitisconsideredaroutinematter.YourbrokerisnotpermittedtovoteontheotherAgendaItemsifyoudonotprovidevotinginstructions,becausethoseitemsinvolvemattersthatareconsiderednon-routine.

8.Whatisabrokernon-vote?

Ifyourbrokerdoesnotreceiveinstructionsfromyouonhowtovoteyoursharesanddoesnothavediscretiontovoteonaproposalbecauseitisanon-routinematter,thebrokermayreturntheproxywithoutvotingonthatproposal.Thisisknownasa“brokernon-vote.”Abrokernon-voteisdeemedasnotentitledtovoteatthemeetingwithregardtoaproposalsothatitdoesnothaveanyeffectontheoutcomeofavote.

9.Whatarethevotingrequirementstoelectdirectorsandtoapproveeachoftheproposals?

AttheAnnualMeeting,stockholderswillconsiderandactupon(1)theelectionof12directors(2)theratificationoftheappointmentofourindependentregisteredpublicaccountingfirmand(3)suchotherbusinessasmayproperlycomebeforetheAnnualMeeting.

OurThirdAmendedandRestatedBylaws(the“Bylaws”)providethatdirectorsareelectedbyapluralityofthevotescast.ThismeansthatthedirectornomineewiththemostvotesforaparticularseatontheBoardiselectedforthatseat.OnlyvotesactuallycastwillbecountedforpurposesofdeterminingwhetheradirectornomineereceivedthemostvotesforaparticularseatontheBoard.Abstentionsandthewithholdingofauthoritybyastockholder(includingbrokernon-votes)astotheelectionofdirectors(Proposal1)arenottreatedasvotes“cast”andthushavenoeffectontheresultsoftheelection.

UnderourBylaws,theratificationoftheappointmentofourindependentregisteredpublicaccountingfirm(Proposal2)mustbeapprovedbytheaffirmativevoteofamajorityofthevotespresentinpersonorrepresentedbyproxyatthemeetingandentitledtovoteonthematter.Abrokernon-voteisdeemedasnotentitledtovoteatthemeetingwithregardtoaproposalso

thatitdoesnothaveanyeffectontheoutcomeofProposal2.AbstentionswillbetreatedasvotesagainstProposal2.

AsofMarch31,2017,ourdirectorsandexecutiveofficersbeneficiallyowned1,286,787sharesofCommonStockeligibletobevotedattheAnnualMeeting,constitutingapproximately0.36%oftheoutstandingCommonStock.Inaddition,SHUSA,ourcontrollingstockholderandasubsidiaryofSantander,owns210,995,049sharesofCommonStock,constitutingapproximately58.71%oftheoutstandingCommonStockeligibletobevoted.Webelievethatourdirectors,executiveofficersandSHUSAwillvotealloftheirsharesofCommonStockinfavoroftheelectionofeachofthedirectornomineesandinfavorofProposal2,andtherefore,theoutcomeofthesemattersisreasonablyassured.

10.Whatis“householding”andhowdoesitaffectme?

IfyouandotherpersonsinyourhouseholdownsharesofourCommonStockasthebeneficialowner,yourbrokerorbankmayhavegivennoticethatyourhouseholdwillreceiveonlyonecopyofourannualreportandproxystatement.Thispracticeisknownas“householding.”Unlessyourespondedtothatnoticethatyoudidnotwishtoparticipateinhouseholding,youwouldbedeemedtohaveconsentedtoparticipating,andonlyonecopyofourannualreportandProxyStatementwouldbesenttoyouraddress(however,eachstockholderwouldcontinuetoreceiveaseparateproxycard).Thisprocedurereducesourprintingcostsandpostagefees.

Anystockholderwhowishestoreceivehisorherownsetofourannualreportsandproxystatements,orwhosharesanaddresswithanotherstockholderoftheCompanyandtogetherwouldliketoreceiveonlyonesetofannualdisclosuredocuments,shouldcontactusat1601ElmSt.,Suite800,Dallas,Texas75201Attention:CorporateSecretary,beingsuretosupplythenamesofallstockholdersatthesameaddress,thenameofthebankorbrokeragefirm,andtheaccountnumber(s).Youcanalsoreachusat(214)634-1110.Therevocationofconsenttohouseholdingshouldbeeffective30daysafterthenoticeisreceived.

AnnualMeetingInformation11.ArethereanyothermatterstobevoteduponattheAnnualMeeting?

WedonotknowofanymatterstobevotedonbystockholdersattheAnnualMeetingotherthanthoseincludedinthisProxyStatement.YourexecutedproxygivestheproxyholdersauthoritytovoteyoursharesinaccordancewithitsbestjudgmentwithrespecttoanyothermatterthatmayproperlycomebeforethestockholdersattheAnnualMeetinginaccordancewithRule14a-4(c)oftheSEC’sproxyrules,andtheproxyholdersintendtoexerciseitsjudgmentaccordinglyinsuchcircumstances.

12.HowcanIvoteinpersonattheAnnualMeeting?

SharesheldinyournameasthestockholderofrecordontherecorddatemaybevotedinpersonattheAnnualMeeting.

Table of Contents

QUESTIONSANDANSWERS

56


SharesforwhichyouarethebeneficialownerbutnotthestockholderofrecordmaybevotedinpersonattheAnnualMeetingonlyifyouobtainalegalproxyfromthebroker,trustee,orothernomineethatholdsyoursharesgivingyoutherighttovotetheshares.EvenifyouplantoattendtheAnnualMeeting,werecommendthatyouvotebyproxyasdescribedbelowsothatyourvotewillbecountedifyoulaterdecidenottoattendtheAnnualMeeting.

Thevoteyoucastinpersonwillsupersedeanypreviousvotesthatyoumayhavesubmitted,whetherbyInternet,telephone,ormail.

13.HowcanIattendtheAnnualMeeting?

ToattendtheAnnualMeeting,youmustbeaholderofourCommonStockasoftherecorddateofApril13,2017,andrequestanadmissionticketinadvancebyfollowingtheinstructionsbelow.

IfyoursharesareowneddirectlyinyournameinanaccountwithComputershare,ourstocktransferagent,youmustprovideyournameandaddressasshownonyouraccountorvotingmaterialswithyouradmissionticketrequest.Ifyouholdyoursharesinanaccountwithabroker,bank,orothernominee,youmustincludeproofofyourstockownership,suchasacopyoftheportionofyourNoticeorproxycardthatshowsyournameandaddressoraletterfromyourbroker,bank,orothernomineeconfirmingyourstockownershipasofApril13,2017.Thee-mailnotificationreceivedwithelectronicdeliveryofproxymaterialsisnotsufficientproofofstockownership.

PleasesendyourAnnualMeetingadmissionticketrequestandproofofstockownershipasdescribedabovetotheOfficeoftheSecretarybyoneofthefollowingmethods: Email: [email protected]

Mail: SantanderConsumerUSAHoldingsInc.OfficeoftheCorporateSecretary1601ElmStreet,Suite800Dallas,Texas75201

TicketrequestsmustbereceivednolaterthanJune5,2017.Pleaseincludeyourmailingaddressaswellasyoure-mailaddressortelephonenumberinyouremailormailcommunicationincaseweneedtocontactyouregardingyourticketrequest.Youwillreceiveyouradmissionticketbymail.Onthedayofthemeeting,eachstockholdermusthaveanadmissiontickettoenterthemeeting.Alongwiththeadmissionticket,eachstockholderwillberequiredtopresentaformofgovernment-issuedphotoidentification,suchasadriver’slicenseorpassport.Theadmissionticketisnottransferable.

Largebags,backpacksandpackages,suitcases,briefcases,personalcommunicationdevices(e.g.,cellphones,smartphones,andtablets),cameras,recordingequipment,andotherelectronicdeviceswillnotbepermittedinthemeeting,andattendeeswillbesubjecttoasecurityinspection.

StockholderProposalsandCompanyInformation14.HowcanIsubmitastockholderproposalforthe2018AnnualMeeting?

StockholderproposalssubmittedpursuanttoSECRule14a-8forinclusioninour2018proxystatementandacteduponatour2018AnnualStockholderMeeting(the“2018AnnualMeeting”)mustbereceivedbyusatourexecutiveofficesat1601ElmSt.,Suite800,Dallas,Texas75201,Attention:OfficeoftheSecretary,nolaterthan120calendardaysbeforetheone-yearanniversaryofthedateofourproxystatementreleasedtostockholdersinconnectionwiththe2017AnnualMeeting.Asaresult,anynoticegivenbyastockholderpursuanttoSECRule14a-8)mustbereceivednoearlierthanFebruary12,2018andnolaterthanMarch14,2018.If,however,the2018AnnualMeetingtakesplacemorethan30daysbeforeorafterJune12,2018,thenthedeadlineforstockholderproposalssubmittedpursuanttoSECRule14a-8forinclusioninour2018proxystatementandacteduponatour2018AnnualMeetingshallbeadatethatwedeterminetobeareasonabletimebeforewebegintoprintandsendourProxyMaterials.Inthisevent,wewilldisclosethisdeadlineinapublicfilingwiththeSEC.

Stockholderproposalssubmittedforconsiderationatthe2018AnnualMeetingbutnotsubmittedpursuanttoSECRule14a-8,includingstockholdernominationsforcandidatesforelectionasdirectors,generallymustbedeliveredtotheSecretaryatourexecutiveofficesnotlaterthan90daysorearlierthan120daysbeforethefirstanniversaryofthedateofthe2017AnnualMeeting.Asaresult,anynoticegivenbyastockholderpursuanttotheprovisionsofourBylaws(otherthannoticepursuanttoSECRule14a-8)mustbereceivednoearlierthanFebruary12,2018andnolaterthanMarch14,2018.However,ifthedateofthe2018AnnualMeetingoccursmorethan30daysbeforeormorethan60daysafterJune12,2018,noticebythestockholderofaproposalmustbedeliverednoearlierthanthecloseofbusinessonthe120thdaypriortothedateofsuchAnnualMeetingandnolaterthanthecloseofbusinessonthe90thdaypriortothedateofsuchAnnualMeetingor,ifthefirstpublicannouncementofthedateoftheAnnualMeetingislessthan100dayspriortothedateofsuchAnnualMeeting,the10thdayfollowingthedayonwhichwefirstmakeapublicannouncementofthedateoftheAnnualMeeting.StockholderproposalsornominationsmustincludethespecifiedinformationconcerningthestockholderandtheproposalornomineeasdescribedinourBylaws.ThechairmanoftheAnnualMeetingmayrefusetoacknowledgeorintroduceanystockholderproposalornominationifnoticethereofisnotreceivedwithintheapplicabledeadlinesordoesnotcomplywithourBylaws.IfastockholderfailstomeetthesedeadlinesorfailstosatisfytherequirementsofourBylaws,thepersonsnamedasproxieswillbeallowedtousetheirdiscretionaryvotingauthoritytovoteonanysuchproposalornominationastheydetermineappropriateifandwhenthematterisraisedattheAnnualMeeting.

Table of Contents

QUESTIONSANDANSWERS

ByOrderoftheBoardofDirectors,

ChristopherPfirrmanChiefLegalOfficer,GeneralCounselandCorporateSecretary SC2017ProxyStatement

57

15.Whopaysforthisproxysolicitation?

ProxieswillbesolicitedfromourstockholdersbymailandthroughtheInternet.Wewillpayallexpensesinconnectionwiththesolicitation,includingpostage,printingandhandling,andtheexpensesincurredbybrokers,custodians,nomineesandfiduciariesinforwardingproxymaterialtobeneficialowners.WemayengageaproxysolicitationfirmtosolicitproxiesinconnectionwiththeAnnualMeeting,andweestimatethatthefeepayableforsuchserviceswouldbelessthan$10,000.Itispossiblethatourdirectors,officersandotheremployeesmaymakefurthersolicitationspersonallyorbytelephone,facsimileormail.Ourdirectors,officersandotheremployeeswillreceivenoadditionalcompensationforanysuchfurthersolicitations.

16.HowcanIobtainacopyoftheAnnualReportonForm10-K?

Uponwrittenrequest,wewillprovidetoyoubymailafreecopyofourAnnualReportonForm10-K(includingfinancialstatementsandfinancialstatementschedules)forthefiscalyearendedDecember31,2016.Pleasedirectyourrequestto1601ElmSt.,Suite800,Dallas,Texas75201Attention:CorporateSecretary.TheAnnualReportonForm10-Kmayalsobeaccessedonourwebsiteathttp://investors.santanderconsumerusa.com.

Table of Contents

Table of Contents

ANNUAL MEETING OF SANTANDER CONSUMER USA HOLDINGS INC.Date: June 12, 2017

Time: 3:00 P.M. (Local Time) Place: 1601 Elm Street, Suite 800, Dallas, TX 75201

Please make your marks like this: ☒ Use dark black pencil or pen only

The Board of Directors Recommends a Vote FOR proposals 1 and 2.

1:

Election of Directors

DirectorsRecommend

ä

For Withhold 01 José Doncel ☐ ☐ For 02 Stephen A. Ferriss ☐ ☐ For 03 Brian Gunn ☐ ☐ For 04 Victor Hill ☐ ☐ For 05 Edith E. Holiday ☐ ☐ For 06 Mark P. Hurley ☐ ☐ For 07 Jason A. Kulas ☐ ☐ For 08 Javier Maldonado ☐ ☐ For 09 Robert J. McCarthy ☐ ☐ For 10 William F. Muir ☐ ☐ For 11 Scott Powell ☐ ☐ For 12 William Rainer ☐ ☐ For

2:

To ratify the appointment ofPricewaterhouseCoopers LLP as ourindependent registered public accountingfirm for the current fiscal year.

For☐

Against☐

Abstain☐

For

3:

Includes authorization to vote upon anybusiness as may properly come before theAnnual Meeting, or any adjournment orpostponement thereof, in accordance withthe terms of our Third Amended andRestated Bylaws.

Authorized Signatures - This section mustbe completed for your Instructions to beexecuted.

Please Sign Here Please Date Above

Please Sign Here Please Date Above

Please sign exactly as your name(s) appears on your stock certificate. If held in jointtenancy, all persons should sign. Trustees, administrators, etc., should include titleand authority. Corporations should provide full name of corporation and title ofauthorized officer signing the proxy.

Annual Meeting of Santander Consumer USA Holdings Inc.to be held on Monday, June 12, 2017

for Holders as of April 13, 2017This proxy is being solicited on behalf of the Board of Directors

INTERNETGo Towww.proxypush.com/sc

VOTE BY:

TELEPHONE

855-782-8499• Cast your vote online. OR • Use any touch-tone telephone.• View Meeting Documents.

•

Have your Proxy Card/VotingInstruction Form ready.

MAIL

•

Follow the simple recorded instructions.

OR • Mark, sign and date your Proxy Card/Voting Instruction Form. • Detach your Proxy Card/Voting Instruction Form.

• Return your Proxy Card/Voting Instruction Form in the postage-paid envelope provided.

The undersigned hereby appoints Jason A. Kulas and Christopher Pfirrman, and each oreither of them, as the true and lawful attorneys of the undersigned, with full power ofsubstitution and revocation, and authorizes them, and each of them, to vote all the shares ofcapital stock of Santander Consumer USA Holdings Inc. which the undersigned is entitled tovote at said meeting and any adjournment or postponement thereof upon the mattersspecified and upon such other matters as may be properly brought before the meeting or anyadjournment or postponement thereof, conferring authority upon such true and lawfulattorneys to vote in their discretion on such other matters as may properly come before themeeting and revoking any proxy heretofore given.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTEDOR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED FOR THE ELECTIONOF THE DIRECTORS IN ITEM 1 AND FOR THE PROPOSAL IN ITEM 2 ANDAUTHORITY WILL BE DEEMED GRANTED TO VOTE UPON ANY BUSINESS ASMAY PROPERLY COME BEFORE THE ANNUAL MEETING, OR ANYADJOURNMENT OR POSTPONEMENT THEREOF, IN ACCORDANCE WITH THETERMS OF OUR THIRD AMENDED AND RESTATED BYLAWS.

All votes must be received by 5:00 P.M., Eastern Time, June 11, 2017.

PROXY TABULATOR FOR

SANTANDER CONSUMER USA HOLDINGS INC.

P.O. BOX 8016 CARY, NC 27512-9903

EVENT #

CLIENT #

Table of Contents

Proxy — Santander Consumer USA Holdings Inc. Annual Meeting of Stockholders June 12, 2017 3:00 P.M. (Local Time)

This Proxy is Solicited on Behalf of the Board of Directors

The undersigned appoints Jason A. Kulas and Christopher Pfirrman (the“Named Proxies”) and each of them as proxies for the undersigned, withfull power of substitution, to vote the shares of common stock of SantanderConsumer USA Holdings Inc., a Delaware corporation (the “Company”),the undersigned is entitled to vote at the Annual Meeting of Stockholdersof the Company to be held at the offices of Santander Consumer USAHoldings Inc., at 1601 Elm Street, Suite 800, Dallas, Texas 75201, onJune 12, 2017 at 3:00 P.M. (Local Time) and all adjournments orpostponements thereof. The Board of Directors of the Company recommends a vote “FOR” allnominees for director, and “FOR” proposal 2. This proxy, when properly executed, will be voted in the mannerdirected herein. If no direction is made, this proxy will be voted“FOR” all nominees for director and “FOR” each proposal. In theirdiscretion, the Named Proxies are authorized to vote upon such othermatters that may properly come before the Annual Meeting or anyadjournment or postponement thereof. You are encouraged to specify your choice by marking the appropriatebox (SEE REVERSE SIDE) but you need not mark any box if youwish to vote in accordance with the Board of Directors’recommendation. The Named Proxies cannot vote your shares unlessyou sign and return this card.