Santander Consumer USA Holdings Inc.d18rn0p25nwr6d.cloudfront.net/CIK-0001580608/f3ea... · Santander Holdings USA, Inc., SC’s majority stockholder and a subsidiary of Banco Santander

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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

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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)

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SantanderCONSUMERUSA|2018PROXYSTATEMENTforAnnualMeetingofStockholders

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1601ElmSt.Suite800Dallas,Texas75201|214.634.1110

April30,2019

SantanderConsumerUSAHoldingsInc.(“SC”or“SantanderConsumer”)continuestobeastrong,profitablecompanythatremainsaleaderinautomotivefinanceaswecontinuetoapplylargebankstandardstoouroperationsandculture.Overthelastyearwemadegainsinoriginationsacrosseverychannel,maintainedconsistentcreditperformance,andmadeinvestmentsinouremployees,customersandcommunities.SantanderUS’missionistohelppeopleandbusinessesprosper,andSantanderConsumerisworkingeverydaytoensurethatourbusinessalignswiththatvision.Weareparticularlypleasedwiththeprogresswehavemadeontheregulatoryfront.Inthelastyear,theFederalReserveterminatedits2015WrittenAgreementwithourparent,SantanderHoldingsUSA,Inc.andprogressatSantanderConsumerplayedabigroleinthat.ThesameistrueforthepassinggradethatSHUSAearnedintheFederalReserve’scapitalstresstest,receivinganon-objectionforthesecondconsecutiveyear.Westillhaveworktodoontheregulatoryfront,butwetookimportantstepsforwardin2018,settingusupforcontinuedregulatoryprogress.AsSC’sfundamentals,operationsandgovernancecontinuetostrengthen,SantanderConsumeriswellpositionedforcontinuedandlong-termsuccess.Asthistransformationcontinues,weremaincommittedtobetterservingourcustomersandcreatingvalueforallourstakeholders.TheNoticeofAnnualMeetingandProxyStatementonthefollowingpagescontaininformationabouttheofficialbusinessoftheAnnualMeeting.Whetherornotyouexpecttoattend,pleasevoteyoursharesnow.Ofcourse,ifyouattendtheAnnualMeetinginpersonyouwillhavetheopportunitytorevokeyourproxyandvoteyoursharesinperson.Thisproxystatementisalsoavailableathttp://www.proxypush.com/SC.YouareinvitedtoattendtheAnnualMeetingofStockholdersonTuesday,June11,2019.TheAnnualMeetingwillbeginpromptlyat2p.m.,CentralTime,at1601ElmStreet,Suite800,Dallas,TX75201.WethankyouforyourcontinuinginterestinSantanderConsumerUSA,andwehopeyouwillattendtheAnnualMeeting.

Sincerely,

William RainerChairman of the Board

Scott Powell

President and CEO

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1601ElmSt.Suite800Dallas,Texas75201|214.634.1110

NOTICE OF ANNUAL MEETING OF STOCKHOLDERSTO BE HELD JUNE 11, 2019

NOTICE IS HEREBY GIVEN thattheAnnualMeetingofStockholderswillbeheldat1601ElmStreet,Suite800,Dallas,Texas75201,at2P.M.localtimeonJune11,2019forthefollowingpurposes:

1. Toelect10directorsnamedintheProxyStatementtotheBoardofDirectors;

2. ToratifytheappointmentofPricewaterhouseCoopersLLPasourindependentregisteredpublicaccountingfirmforthecurrentfiscalyearend;and

3. Tovoteonastockholderproposal,ifproperlypresentedattheAnnualMeeting,requestingthattheBoardofDirectorsprepareareportrelatedtothemonitoringandmanagementofcertainrisksrelatedtovehiclelending.

StockholderswillalsotransactanyotherbusinessasmayproperlycomebeforetheAnnualMeetinginaccordancewiththetermsofourThirdAmendedandRestatedBylaws.TheBoardofDirectorshasfixedthecloseofbusinessonApril15,2019astherecorddateforthedeterminationofstockholdersentitledtonoticeof,andtovoteat,theAnnualMeeting.

ByOrderoftheBoardofDirectors,

Christopher PfirrmanChief Legal Officer, General Counsel, and Corporate SecretaryApril30,2019

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TABLE OF CONTENTS

TABLE OF CONTENTS 2019 Proxy Summary 1

Corporate Governance 7

Proposal1:ElectionofDirectors 7

DirectorIndependence 13

BoardLeadershipStructureandRiskOversight 14

BoardCommittees 15

DirectorCompensation 18

NominationofDirectors 19

Executive Officers 20

Audit 22

Proposal2:RatificationofAppointmentofIndependentRegisteredPublicAccountingFirm 22

AuditFeesandRelatedMatters 23

ReportoftheAuditCommittee 23

Compensation 25

CompensationDiscussionandAnalysis 25

ExecutiveCompensationTables 40

EquityCompensationPlanInformation 47

PayRatioDisclosure 48

Stockholder Proposal 49

Additional Governance Information 52

RelatedPartyTransactions 52

StockOwnershipInformation 56

OtherGovernanceInformation 57

Questions and Answers 58

SC2019ProxyStatement

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PROXY SUMMARY

2019 PROXY SUMMARYTHIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT. ITDOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER. PLEASE READ THEENTIRE PROXY STATEMENT CAREFULLY BEFORE VOTING.

Important Terms

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

» “Board”–theBoardofDirectorsofSC

» “BSI”–BancoSantanderInternational,anaffiliateofSC

» “BSPR”–BancoSantanderPuertoRico,anaffiliateofSC

» “Bylaws”–theThirdAmendedandRestatedBylawsofSC

» “CCAR”–theUnitedStatesFederalReserveBoard’sComprehensiveCapitalAnalysisandReview

» “CD&A”–theCompensationDiscussionandAnalysissectionofthisProxyStatement

» “CommonStock”–sharesofSCcommonstock,parvalue$0.01pershare

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

» “CompensationCommittee”–SC’sCompensationandTalentManagementCommittee

» “ExchangeAct”–theSecuritiesExchangeActof1934,asamended

» “GAAP”–UnitedStatesgenerallyacceptedaccountingprinciples,theaccountingstandardadoptedbytheSEC

» “IndependentDirectors”–ourindependentdirectorsasdefinedbytheNYSEListedCompanyRules(asdeterminedbytheBoard),includingMr.Ferriss,Ms.Holiday,Mr.McCarthy,Mr.Muir,andMr.Rainer

» “NEOs”–our“namedexecutiveofficers,”asdeterminedunderRule402ofRegulationS-K,andasdesignatedinthisProxyStatement

» “NYSE”–theNewYorkStockExchange

» “OmnibusPlan”–SC’sOmnibusIncentivePlan

» “PwC”–PricewaterhouseCoopersLLP

» “RSU”–restrictedstockunit

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

» “SEC”–theUnitedStatesSecuritiesandExchangeCommission

» “SecuritiesAct”–theSecuritiesActof1933,asamended

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

» “SRIP”–SpecialRegulatoryIncentiveProgram

» “SIS”–SantanderInvestmentSecurities,anaffiliateofSCandformerlyknownasSantanderCentralHispanoInvestmentServices,Inc.

Your VoteYourvoteisveryimportant.TheBoardisrequestingyoutoallowyourCommonStocktoberepresentedatour2019annualmeetingbyproxiesnamedontheproxycard.ThisProxyStatementisbeingsenttoyouinconnectionwiththisrequestandhasbeenpreparedfortheBoardbyourmanagement.ThisProxyStatementisbeingsenttoourstockholdersonoraboutApril30,2019.


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PROXY SUMMARY

How to VoteYoumayvoteyoursharespriortotheAnnualMeetingviatheInternet,bytelephone,orbymail.

INTERNET

TELEPHONE

MAIL

Go to www.proxypush.com/sc Dial toll-free 855-782-8499 Mark, sign, and date yourYouwillneedthecontrolnumberincludedinyourProxyCard/Voting

InstructionForm.

YouwillneedthecontrolnumberincludedinyourProxyCard/Voting

InstructionForm.

ProxyCard/VotingInstructionFormandreturnitinthe

postage-paidenvelopeprovided.

Summary of Voting Proposals and Voting Recommendations

PROPOSALS

BOARD RECOMMENDATION

PROPOSAL 1. Election of Directors (Page 7)

WeareaskingstockholderstovoteoneachdirectornomineetotheBoardnamedinthisProxyStatement.TheBoardandtheExecutiveCommitteebelievethateachdirectornomineehasthequalifications,experience,andskillsnecessarytorepresentstockholdersthroughserviceontheBoard.

FOR ALL

PROPOSAL 2. Ratification of Appointment of Independent Registered Public AccountingFirm (Page 22)

TheAuditCommitteehasappointedPwCtoserveastheCompany’sindependentregisteredpublicaccountingfirmforthefiscalyearendingDecember31,2019.TheAuditCommitteeandtheBoardbelievethatthecontinuedretentionofPwCtoserveasourindependentauditorisinthebestinterestsoftheCompanyanditsstockholders.Asamatterofgoodcorporategovernance,stockholdersarebeingaskedtoratifytheAuditCommittee’sappointmentofPwC.

FOR

PROPOSAL 3. Stockholder Proposal (if properly introduced at the Annual Meeting)(Page 49)

AGAINST

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PROXY SUMMARY

Nominees for Election as DirectorsTheBoardrecommendsavoteFORtheelectionofeachofthefollowingnomineesfordirector:

NAME

AGE

DIRECTOR SINCE

INDEPENDENT

COMMITTEE MEMBERSHIP

William Rainer 73 2015 ● BoardChair,EC(Chair)

Stephen A. Ferriss 73 2013 ● BoardViceChair,CC,RC(Chair),AC,EC

Mahesh Aditya 56 2017 ---

José Doncel 58 2015 ---

Victor Hill 55 2015 RCOC,RC

Edith E. Holiday 67 2016 ● CC(Chair),RCOC

Javier Maldonado 56 2015 CC,EC,RCOC

Robert J. McCarthy 65 2015 ● RCOC(Chair),AC,CC

William F. Muir 64 2016 ● AC(Chair),RC,RCOC

Scott Powell 57 2016 EC

» AC: Audit Committee» CC: Compensation and Talent Management Committee» EC: Executive Committee» RC: Risk Committee» RCOC: Regulatory and Compliance Oversight Committee


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PROXY SUMMARY

2018 BUSINESS HIGHLIGHTS

»Totalautooriginationsof$28.8billion*

»LargestproviderforFiatChrysler(“FCA”)

»Total2018fundingof$48.7billionincluding(amongothers):

»BancoSantandersupportof$7.0billion

»$13.3billioninbondsacrossthreedistinctplatforms

»Terminated2015WrittenAgreementwiththeFederalReserve

»ReceivedFederalReserve’ssecondconsecutivecapitalstresstestnon-objection

»Resolvedtwomaterialweaknessesin2018

»Totaled$9.0billion

»Servicingfeeincomeof$107million

* IncludesloansoriginatedbySBNAunderanOriginationServicesAgreementwithSC.

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PROXY SUMMARY

Corporate Governance Highlights

Annual election of all directors

Annual joint evaluation of CEO by Board and SHUSA’s Board of Directors

Annual Board and Committee self-evaluations and annual individual director evaluations

Strong Board providing challenge to management opinions

Strong independent Chairman of the Board

Orientation program for new directors and continuing education for all directors

Robust stock ownership guidelines for independent directors

Strong risk oversight by full Board and Board Committees

Regular executive sessions of non-management directors

Executive Compensation Program—OverviewOurexecutivecompensationprogramisdesignedtoreinforcethelinkbetweenthelong-terminterestsofourexecutiveofficersandourstockholders.Asignificantportionofourexecutiveofficers’incentivecompensationisdeferredandpayableinSCshares,andthereforedirectlyalignedwiththeCompany’sperformance,includingtotalstockholderreturn.

ELEMENT

KEY CHARACTERISTICS

PURPOSE

Base Salary

Fixedcashcompensationcomponent,reviewedatleastannually,thatreflectstheexecutive’sposition,

responsibilities,qualifications,tenure,andcontributionstotheCompany

OfferssecurityforexecutivesandallowstheCompanytomaintainastablemanagementteam

Annual IncentiveAward Program

Comprisedofbothshort-termandlong-termincentives;asignificantportionofannualbonusesaredeferred;halfpayableincashandhalfpayableinSC

equityawards;includesaspecial,multi-yearregulatoryincentiveprogramintendedtofocus

executivesonregulatoryandcompliancetransformationinitiatives

MotivatesandrewardsexecutivesforachievementofCompanyandindividualperformancegoals,

appropriatelybalancescompensationrisk,andalignsmanagementandstockholderinterests

Retirement Benefits;Welfare Benefits;

Perquisites

Indirectcompensationconsistingofaretirementplan,healthandwelfareplans,andminimalperquisites

Providesexecutiveswithsecurityduringemploymentandintoretirementandpromotesemployeehealth,whichassistsintheretentionofourexecutives


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PROXY SUMMARY

Key Features of Our Executive Compensation Program

Ties annual incentive compensation to the achievement of meaningful Company and individual performance goals

Subjects a significant portion of annual incentive compensation to deferral

Pays a significant portion of annual incentive compensation in SC stock

Subjects Omnibus Plan awards to “double-trigger” change in control vesting

Subjects incentive compensation to a robust malus and clawback policy

Conditions a significant portion of compensation on the acceptance of confidentiality, non-solicit, and other restrictive covenants

Supported by a prominent independent compensation consultant

Imposes annual limits on non-employee director compensation

Maintains independent non-employee director stock ownership guidelines

Conducts a robust annual compensation risk assessment

Does not reprice underwater stock options

Does not grant discounted stock options

Does not allow hedging or pledging of SC stock by executive officers or directors

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CORPORATE GOVERNANCE - PROPOSAL 1: ELECTION OF GOVERNANCE

CORPORATE GOVERNANCEProposal 1: Election of Directors

WHAT YOU ARE VOTING ON:

AttheAnnualMeeting,10directorsaretobeelectedtoholdofficeuntilthe2020AnnualMeetinganduntiltheirsuccessorsareelectedandqualified,or

untilthedirectorseitherresignorareremovedfromoffice.

IntroductionAsofthedateoftheAnnualMeeting,theBoardwillconsistof10members.ThecurrentmembersareMaheshAditya,JoséDoncel,StephenA.Ferriss,VictorHill,EdithE.Holiday,JavierMaldonado,RobertJ.McCarthy,WilliamF.Muir,ScottPowell,andWilliamRainer.Mr.AdityaandMr.PowellarealsomembersoftheboardofdirectorsofSantanderConsumerUSAInc.,anIllinoiscorporationandwholly-ownedsubsidiaryofSC(“SCIllinois”).SHUSAhastherighttonominatesevenmembersoftheBoard.Pleasesee“CorporateGovernance—NominationofDirectors”formoreinformation.SHUSAhasnominatedMr.Aditya,Mr.Doncel,Mr.Ferriss,Mr.Hill,Mr.Maldonado,Mr.Powell,andMr.RainerforelectiontotheBoard.TheBoardhasnominatedMs.Holiday,Mr.McCarthy,andMr.MuirforelectiontotheBoard.TheBoardhasdeterminedthatMr.Ferriss,Ms.Holiday,Mr.McCarthy,Mr.Muir,andMr.RainerareIndependentDirectors.EachofthedirectorselectedattheAnnualMeetingwillbeelectedforaone-yearterm,whichexpiresatthenextAnnualMeeting,andwillserveuntilthedirector’ssuccessorhasbeenelectedandqualified,oruntilthedirector’searlierresignationorremoval.

Information Concerning the NomineesBiographicalinformationforeachnomineeforelectiontotheBoardappearsbelow.Theinformationisbasedentirelyuponinformationprovidedbytherespectivenominees.

THE BOARDRECOMMENDS A VOTE FOREACH OF THE NOMINEES.


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MAHESHADITYA

DIRECTORSINCE:2017 AGE:56

EXPERIENCEMr.AdityahasservedastheChiefRiskOfficerofSHUSAsinceMay2018andasChiefRiskOfficerofSBNAsinceApril2018.Previously,heservedastheChiefOperatingOfficerofSHUSAfromMay2017toMay2018.PriortojoiningSHUSA,heservedastheChiefRiskOfficerandwasamemberoftheOperatingCommitteeofVisaInc.fromJune2014toFebruary2017.Priortothatrole,fromApril2011untilJune2014,Mr.AdityawasemployedbyJPMorganChase,firstastheChiefRiskOfficerofRetailBankingandthenlatertheChiefRiskOfficerofMortgageBanking.Previously,hewasemployedastheHeadofRiskforMortgageandBusinessBankingatCapitalOneBankfrom2009to2011.HecurrentlyservesontheboardofdirectorsofBSPRandhaspreviouslyservedasamemberoftheboardofEarlyWarningSystems.Mr.AdityaholdsadegreeinelectricalengineeringfromBangaloreUniversityandamaster’sdegreeinbusinessadministrationfromtheFacultyofManagementStudies,DelhiUniversity.Mr.Adityahasextensiveexperienceinriskmanagementandfinance,andwebelieveheisqualifiedtoserveontheBoard.

JOSÉDONCEL


EXPERIENCEMr.DoncelhasservedasaseniorexecutiveofBancoSantanderanditspredecessorcompaniessince1989,mostrecentlyasSeniorExecutiveVicePresidentandDirectoroftheAccountingandControlDivisionsinceOctober2014,asSeniorExecutiveVicePresidentandDirectoroftheCorporateDivisionofInternalAuditfromJune2013toOctober2014,andasSeniorExecutiveVicePresidentandDirectorGeneraloftheRetailBankingManagementControlAreafromApril2013toJune2013.HewaspreviouslyemployedbyArthurAndersenAuditores,S.A.,DivisionofFinancialInstitutions.Mr.DonceliscurrentlyamemberoftheboardsofdirectorsofSHUSAandSBNA.HeisalsoamemberoftheboardsofdirectorsofmultipleBancoSantandersubsidiaries.Mr.DoncelholdsadegreeineconomicandbusinesssciencesfromtheUniversidadComplutensedeMadrid.Mr.Doncelhasextensiveexperienceinleadership,finance,andriskmanagement,andwebelieveheisqualifiedtoserveontheBoard.

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STEPHEN A.FERRISS


Vice-Chairmanof the Board

COMMITTEES

»Audit

»Compensation

»Executive

»Risk(Chair)

EXPERIENCEMr.FerrisshasservedasadirectorofSHUSAsince2012.HealsoisthechairmanoftheboardsofdirectorsSantanderBanCorpandBSPRandadirectorofBSI.Mr.FerrisswasalsoadirectorofSBNAfrom2012to2015.Previously,heservedasPresidentandCEOofSIS(formerlyknownasSantanderCentralHispanoInvestmentServices,Inc.)from1999to2002,andheldvariousrolesatBankersTrust,includingManagingDirectorandPartneroftheBankersTrustGlobalInvestmentBankinLondonandNewYork.PriortoBankersTrust,Mr.Ferrissspent19yearsatBankofAmerica.Mr.FerrissgraduatedfromColumbiaCollegeandreceivedamaster’sdegreeinLatinAmericaninternationaleconomicsfromColumbiaUniversitySchoolofInternationalandPublicAffairs.Mr.Ferrisshasextensiveexperienceinmanagementandinternationalfinance,andwebelieveheisqualifiedtoserveontheBoard.

VICTORHILL


COMMITTEES

»RegulatoryandComplianceOversight

»Risk

EXPERIENCEMr.HillhasworkedwithintheUKmotorfinanceindustryforover35years,18ofthematboardlevel.HebeganhiscareerwithinLombardMotorFinancein1982andmovedtoFirstNationalMotorFinancein1998,joiningtheboardofdirectorsin2000.Mr.HillwasresponsibleforthelaunchofSantanderConsumerFinance(UK)plc(“SCUK”),anaffiliateofSC,in2005,andcontinuestoleadthatbusinesstodayasCEO.HeledtheacquisitionoftheUKmotorfinanceportfoliofromGEMoneyin2009andcurrentlyservesasadirectoroftwojointventuresubsidiaries,HyundaiCapitalUKandPSAFinance.Mr.Hillhasheldanumberofdirectorships,registeredatCompaniesHouseinLondon,buthiscurrentresponsibilitiesincludedirectorshipsoffivecompaniesincludingSCUK,HyundaiCapitalUKLtd,PSAFinanceUKLtd,PSAFinanceplc,andSantanderConsumerUSAHoldingsInc.HequalifiedasaCharteredDirectorin2007andachievedFellowshipoftheInstituteofDirectors,inLondon,during2012.HealsoqualifiedasaMediatorforCivilandCommercialDisputesin2008.Mr.Hillhasextensivemanagementexperiencewithintheautofinanceindustry,andwebelievethatheisqualifiedtoserveontheBoard.


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EDITH E.HOLIDAY


COMMITTEES

»Compensation(Chair)»RegulatoryandComplianceOversight

EXPERIENCEMs.HolidayisamemberoftheboardsofdirectorsofHessCorporation(NYSE:HES),WhiteMountainsInsuranceGroupLtd.(NYSE:WTM),andCanadianNationalRailway(NYSE:CNI),andisamemberoftheboardsofdirectorsortrusteesofvariousinvestmentcompaniesintheFranklinTempletonGroupofFunds,servingasLeadDirectoroftheFranklinandTempletonFunds.ShealsoservedontheboardsofdirectorsofRTIInternationalMetals,Inc.from1999to2015,andoftheH.J.HeinzCompanyfrom1994to2013.Ms.HolidaywasalsothePresident,Secretary,andTreasurerofComcastTWHoldings,Inc.from2006to2007.From1990to1993,Ms.HolidaywasAssistanttothePresidentoftheUnitedStatesandSecretaryoftheU.S.Cabinet.From1989to1990,sheservedasGeneralCounseloftheU.S.TreasuryDepartment,andfrom1988to1989sheservedasCounselortotheSecretaryandAssistantSecretaryforPublicAffairsandPublicLiaisonoftheU.S.TreasuryDepartment.Priortothat,Ms.Holidayheldvariousotherpositionsingovernmentandinprivatepractice.Ms.HolidayholdsabachelorofscienceandalawdegreefromtheUniversityofFlorida.Ms.Holidayhasextensiveexperienceinlegalandregulatorymattersandinpublicservice,andwebelievethatsheisqualifiedtoserveontheBoard.

JAVIERMALDONADO


COMMITTEES

»Compensation

»Executive

»RegulatoryandComplianceOversight

EXPERIENCEMr.MaldonadohasservedasSeniorExecutiveVicePresident,GlobalHeadofCostControlofBancoSantandersinceOctober2015.HehasheldnumerousmanagementpositionsatBancoSantanderanditsaffiliates,includingSeniorExecutiveVicePresident,HeadoftheNewGeneralDirectorateforCoordinationandControlofRegulatoryProjectsofBancoSantander;ExecutiveCommitteeDirector,HeadofInternalControlandCorporateDevelopment,forSantander(UK)plcfromMay2012toSeptember2014;VicePresidentinChargeofClosedFundsandComplaintsforBancoSantanderBrazilfromOctober2011toApril2012;andGeneralManagerforBancoSantanderintheMiddleEastfromJanuary2011toSeptember2011.Previously,Mr.MaldonadowasanattorneywithBaker&McKenzieandCorporateandInternationalLawDepartmentHeadatJ.Y.Hernández-CanutLawFirm.Mr.MaldonadohasservedasadirectorofSHUSAsinceApril2015andhasservedasvice-chairmanoftheboardofdirectorsofSHUSAsinceOctober2015.HealsocurrentlyservesasadirectorofSBNA,BSPR,BSI,SantanderBanCorpandSIS.Mr.MaldonadoalsoservesasadirectorofAlawwalBank(formerly,SaudiHollandiBank).HeholdslawdegreesfromNorthwesternUniversityandUNEDUniversity.Mr.Maldonadohasextensiveknowledgeandexperienceininternationalfinanceandlegalandregulatoryaffairs,andwebelieveheisqualifiedtoserveontheBoard.

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ROBERT J.McCARTHY


COMMITTEES

»Audit

»Compensation

»RegulatoryandComplianceOversight(Chair)

EXPERIENCEIn2014,Mr.McCarthyretiredfromMarriottInternational,Inc.,whereheservedasChiefOperationsOfficersince2012.Mr.McCarthyjoinedMarriottin1975,whereheservedinvariousleadershippositions,includingSeniorVicePresident,NortheastRegionfrom1995to2000;ExecutiveVicePresident,Operationsfrom2000to2002;President,NorthAmericafrom2003to2009;GroupPresidentfrom2009to2011;andChiefOperationsOfficerfromMarch2012untilFebruary2014.Mr.McCarthyhasservedasChairmanofHotelDevelopmentPartnerssinceMarch2014.HecurrentlyisamemberoftheBoardofTrusteesatVillanovaUniversityandamemberoftheboardofdirectorsofRLJLodgingTrust(NYSE:RLJ).Previously,Mr.McCarthyservedasadirectoroftheServiceSourceFoundation,asamemberoftheboardofdirectorsoftheAutismLearningCenter,asamemberoftheDean’sAdvisoryBoardatCornellUniversitySchoolofHotelAdministration,asamemberoftheDean’sAdvisoryBoardatVillanovaUniversitySchoolofBusiness,andasamemberoftheboardofmanagersatAvendra,LLC.Heholdsabachelor’sdegreeinbusinessadministrationfromVillanovaUniversityandisagraduateoftheAdvancedManagementProgramattheWhartonSchoolofBusinessattheUniversityofPennsylvania.Mr.McCarthyhasextensivemanagerialandfinanceexperience,andwebelieveheisqualifiedtoserveontheBoard.

WILLIAM F.MUIR


COMMITTEES

»Audit(Chair)

»Risk

»RCOC

EXPERIENCEIn2014,Mr.MuirretiredfromAllyFinancialInc.(formerlyknownasGeneralMotorsAcceptanceCorporation(“GMAC”)),whereheservedasPresidentandheadofitsGlobalAutomotiveServicesbusinessstartingin2004.Inthatrole,heledAlly’sautomotivefinance,insurance,vehicleremarketing,andservicingoperations.Priortothattime,heservedasExecutiveVicePresidentandChiefFinancialOfficerofGMACfrom1998to2004.From1996to1998,Mr.MuirservedasExecutive-in-ChargeofOperationsandthenExecutiveDirectorofPlanningatDelphiAutomotiveSystems,aformersubsidiaryofGeneralMotors(“GM”).PriortoservingatDelphiAutomotiveSystems,heservedinvariousexecutivecapacitiesuponjoiningGMACin1992andalsoservedinanumberofcapacitieswithGMsincejoiningGMin1983.Mr.MuiralsoservedasChairmanoftheAllyInsuranceGroupfrom1999to2014andamemberoftheAllyBankboardofdirectorsfrom2004to2016.Mr.Muirreceivedabachelor’sdegreeinindustrialengineeringandoperationsresearchfromCornellUniversityin1977.Heearnedamaster’sdegreeinbusinessadministrationfromHarvardUniversityin1983.Mr.Muirhasextensiveexperienceinmanagement,finance,andtheautofinanceindustry,andwebelievethatheisqualifiedtoserveontheBoard.


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SCOTTPOWELL


President and ChiefExecutive Officer

COMMITTEE

»Executive

EXPERIENCEMr.PowellhasbeenourPresidentandCEOsinceAugust2017,andthePresidentandCEOandadirectorofSHUSAsinceMarch2015.Mr.PowelljoinedtheBoardinSeptember2016andhasbeenamemberofSBNA’sboardofdirectorssinceJuly2015.HealsoservedasCEOofSBNAfromJuly2015untilAugust2017.From2013to2014,beforejoiningSHUSA,Mr.PowellwasExecutiveChairmanofStoneRiverNationalFloodServicesInc.From2002to2012,Mr.PowellheldnumerousmanagementrolesatJPMorganChase&Co.anditspredecessorBankOneCorporation,includingHeadofBankingandConsumerLendingOperations,CEOofConsumerBankingandRetailInvestments,HeadofConsumerLending,andChiefRiskOfficer,Consumer.Mr.PowellalsoworkedatCitigroupanditspredecessorsfrom1988to2002inseniorriskmanagementpositions.Mr.PowellisamemberoftheboardsofdirectorsofthePhippsHousesandtheEndFundinNewYorkCity,aswellasBoys&GirlsClubsofBoston.HeisalsoamemberoftheSupervisoryBoardofTheClearingHouseAssociationL.L.C.Mr.PowellgraduatedfromtheUniversityofMinnesotaandreceivedamaster’sdegreeinbusinessadministrationfromtheUniversityofMaryland.Mr.Powellhasextensiveexperienceinmanagement,finance,riskmanagement,andconsumerandautolending,andwebelieveheisqualifiedtoserveontheBoard.

WILLIAMRAINER


Chairman of the Board

COMMITTEE

»Executive(Chair)

EXPERIENCEMr.Rainerhasextensiveexperienceandhasheldnumerousleadershiprolesinthefinancialservicesindustry.From2001to2004,Mr.RainerservedastheChairmanandCEOofOneChicago,LLC,aregulatedfuturesexchange.HealsoservedastheChairmanoftheCommodityFuturesTradingCommissionfrom1999to2001,asChairmanoftheUnitedStatesEnrichmentCorporationfrom1994to1998,andasFounderofGreenwichCapitalMarkets,Inc.from1981to1988.Previously,Mr.RainerheldvariousleadershippositionsatKidder,Peabody&Co.,Inc.FromJuly2015toMarch2016,heservedasadirectorofBSI,andfromDecember2015toMarch2016,heservedaschairmanoftheboardofSIS.Mr.RainerservedasdirectorofIQFunds,afamilyofclosed-endmutualfunds,from2004until2010.From1996to2000andfrom2004to2008,Mr.RainerservedasatrusteeforSouthernMethodistUniversity.HehasservedasamemberoftheDean’sCounciloftheHarvardDivinitySchoolsince2004andasitsChairfrom2005throughJune2013.HeiscurrentlytheChairmanofShortridgeAcademy,Ltd.andNewBraunfelsCommunications,Inc.Mr.Rainerreceivedhisbachelor’sdegreeineconomicsandmaster’sdegreeinbusinessadministrationfromSouthernMethodistUniversity.Mr.Rainerhasextensiveknowledgeandexperienceinfinance,regulatoryaffairs,andleadershipoffinancialservicesfirms,andwebelieveheisqualifiedtoserveontheBoard.

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CORPORATE GOVERNANCE - DIRECTOR INDEPENDENCE

Director IndependenceBecauseweareacontrolledcompany,weareexemptfromtherequirementintheNYSEListedCompanyRulesthatamajorityofourdirectorsmustbeindependent.Inaddition,weareexemptfromtherequirements(i)thatourExecutiveCommittee(whichunderitscharterhastheresponsibilitiesofaNominatingandGovernanceCommittee)becomposedsolelyofdirectorswhomeettheindependencestandardsundertheNYSEListedCompanyRulesand(ii)thatourCompensationCommitteebecomposedsolelyofdirectorswhomeetadditional,heightenedindependencestandardsundertheNYSEListedCompanyRulesandtherulesoftheSEC.TheCompanyissubjecttotherequirementthatallmembersofourAuditCommitteesatisfyindependencerequirementssetforthundertheNYSEListedCompanyRulesandmeettheadditionalcriteriaforindependenceofauditcommitteememberssetforthinRule10A-3(b)(1)undertheExchangeAct.UndertheNYSEListedCompanyRules,tobeconsideredindependent,adirectormustnothaveadisqualifyingrelationship,asdefinedintheNYSEListedCompanyRules,andtheBoardmustaffirmativelydeterminethatthedirectorotherwisehasnodirectorindirectmaterialrelationshipwiththeCompany.Inmakingindependencedeterminations,theBoardcomplieswithallNYSEandSECcriteriaandconsidersallrelevantfactsandcircumstances.TheBoardhasdeterminedthatMr.Ferriss,Ms.Holiday,Mr.McCarthy,Mr.Muir,andMr.RainerareIndependentDirectors.InassessingtheindependenceoftheIndependentDirectors,theBoardconsidered,withoutlimitation,thefollowingtransactions,relationships,andarrangements:

DIRECTOR

ORGANIZATION

RELATIONSHIP

SC TRANSACTION/ RELATIONSHIP

Mr. Ferriss

SHUSA Director

MajorityStockholder

SBNA FormerDirector

Affiliate

SIS FormerCEO Affiliate

SantanderBanCorp ChairmanoftheBoard

Affiliate

BSPR ChairmanoftheBoard

Affiliate

BSI Director

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

TheBoardhasalsodeterminedthateachmemberofourAuditCommitteeisfinanciallyliterateandthatthechairofourAuditCommittee(Mr.Muir)isan“auditcommitteefinancialexpert”asdefinedbytheSEC.


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CORPORATE GOVERNANCE - BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT

Board Leadership Structure and Risk OversightTheBoardisresponsiblefortheoversightofmanagementonbehalfofourstockholders.TheBoardanditscommitteesmeetperiodicallythroughouttheyearto(i)reviewstrategy,businessandfinancialperformance,riskandcontrolmatters,andcompensationandmanagementdevelopment;and(ii)provideguidancetoandoversightof,andotherwiseassessandadvise,theCEOandotherseniorexecutives.TheBoard’sleadershipstructure,describedbelow,isdesignedtoensurethatauthorityandresponsibilityareeffectivelyallocatedbetweentheBoardandmanagement.TheBoarddoesnothaveanyformalpolicyastowhetherthesamepersonshouldserveasboththeCEOandChairmanoftheBoard,astheBoardbelievesthatitshouldhavetheflexibilitytomakethedeterminationoftheappropriateleadershipforusatanygivenpointintime.Currently,Mr.RainerservesastheindependentChairmanoftheBoard.WebelievethathavinganindependentChairmancancreateanenvironmentthatleadstoobjectiveevaluationandoversightofmanagement’sperformance,increasesmanagementaccountability,andimprovestheabilityoftheBoardtomonitorwhethermanagement’sactionsareinthebestinterestsofallstockholders.Asaresult,atthistime,webelievethatMr.RainerservingasourindependentChairmanenhancestheeffectivenessoftheBoardasawhole.TheBoardwillcontinuetoreviewtheBoard’sleadershipperiodicallyandmaymodifythisstructurefromtimetotimeifitisinthebestinterestsofourCompanyandourstockholders.TheChairmanoftheBoardleadstheBoard,setsthetoneforitsculture,andensuresitseffectivenessinoverseeingtheCompanyanditsmanagement.TheChairmanpresidesatallmeetingsoftheBoard,aswellasexecutivesessionsofIndependentDirectors,and,inconsultationwiththeCEO,otherdirectors,andmanagement,establishestheagendaforeachBoardmeeting.TheChairmanalsohasthepowertocallspecialmeetingsoftheBoard.Mr.FerrissservesastheBoard’sVice-Chairman,whoactsasChairmanoftheBoardifMr.Rainerisabsent.TheCompanyhasestablishedariskgovernancestructurethatassignsresponsibilityforriskmanagementamongfront-linebusinesspersonnel,anindependentriskmanagementfunction,andinternalaudit.Accordingtothismodel,businessownersmaintainresponsibilityforidentifyingandmitigatingtherisksgeneratedthroughtheirbusinessactivities.TheChiefRiskOfficer,whoreportstotheCEOandisindependentofanybusinessline,isresponsiblefordevelopingandmaintainingariskframeworkthatensuresrisksareappropriatelyidentifiedandmitigated,andforreportingontheoveralllevelofriskintheCompany.TheChiefRiskOfficerisalsoaccountabletotheRiskCommitteeandtoSHUSA’sChiefRiskOfficer.TheChiefRiskOfficerischargedwiththeimplementationandexecutionoftheenterpriseriskmanagement(“ERM”)programundertheoversightoftheBoardanditscommittees.RiskmanagementisoverseenbytheBoardthroughfourstandingcommittees:theRiskCommittee,theAuditCommittee,theCompensationCommittee,andtheRegulatoryandComplianceOversightCommittee,eachofwhichischairedbyanIndependentDirector.Committeechairsareresponsibleforcallingmeetingsoftheircommittees,presidingatmeetingsoftheircommittees,approvingagendasandmaterialsfortheircommitteemeetings,servingasaliaisonbetweencommitteemembersandtheBoardandbetweencommitteemembersandseniormanagement(includingtheCEOandChiefRiskOfficer),andworkingdirectlywiththeseniormanagementresponsibleforcommitteematters.EachBoardcommitteeprovidesregularreportstotheBoardregardingmattersreviewedbytheBoardcommittee.Inadditiontoreceivinganddiscussingreportsofrisksunderthepurviewofaparticularcommittee,theBoardmonitorsourriskcultureandreviewsspecificandaggregateriskstheCompanyfaces.Further,atleastannually,theBoardapproves,attherecommendationoftheRiskCommittee,aRiskAppetiteStatement(a“RAS”),whichdefinesthelevelsandtypesofriskstheCompanyiswillingtoassumetoachieveitsbusinessplanswhilecontrollingriskexposureswithinourriskcapacity.Inaddition,theRASestablishesprinciplesforrisk-takingintheaggregateandforeachrisktype,andissupportedbyacomprehensivesystemofrisklimits,escalationtriggers,andcontrolprograms.TheRiskCommitteeischargedwithresponsibilityforestablishinggovernanceovertheERMprocessandprovidesoversightofriskpoliciesandriskmanagementperformance.TheRiskCommitteemonitorsouraggregateriskpositionandreviewsreportsfrommanagementonthecomprehensiveportfolioofriskcategoriesandthepotentialimpacttheseriskscanhaveonourriskprofile.AcomprehensiveriskreportissubmittedregularlybytheChiefRiskOfficertotheRiskCommitteeandtotheBoard,providingmanagement’sviewofourriskposition.Further,theRiskCommitteereviewsandrecommendsfortheBoard’sapprovaltheRASandtheERMPolicyalongwithvarioussub-policiesgoverning,withoutlimitation,enterpriserisk,creditrisk,informationrisk,marketandliquidityrisk,operationalrisk,modelrisk,andstrategicrisk.TheRiskCommitteealsoprovidesoversightofourimpactonSHUSA’scompliancewithitscapitaladequacyassessmentprocess,includingitsCCARsubmissionsandresolutionplanning.Inaddition,theRiskCommitteeoverseestheCompany’sinformationandcyberriskmanagementprogram.TheRiskCommitteealsoreviewsandconcursintheappointment,replacement,performance,andcompensationoftheChiefRiskOfficer.

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CORPORATE GOVERNANCE - BOARD COMMITTEES

TheAuditCommitteeischargedwithoversightrelatingtotheintegrityofourfinancialstatementsandfinancialreportingprocess,theintegrityofoursystemsofinternalaccountingandfinancialcontrols,andinternalandexternalauditing,includingthequalificationsandindependenceofourindependentregisteredpublicaccountingfirm.Pleasesee“Audit—Proposal2:RatificationofAppointmentofIndependentRegisteredPublicAccountingFirm”fordiscussionofPwC,ourproposedindependentregisteredpublicaccountingfirmfor2019.TheAuditCommitteeoverseestheperformanceofourinternalauditfunction;reviewsandconcursintheappointment,replacement,performance,andcompensationofourChiefAuditExecutive;andapprovesourinternalauditfunction’sannualauditplan,charter,policies,andbudget.TheAuditCommitteealsoreceivesregularupdatesontheauditplan’sstatusandresultsincludingsignificantreportsissuedbyourinternalauditfunctionandthestatusofmanagement’scorrectiveactions.TheCompensationCommitteeworkstoensurethatthecompensationprogramscoveringourexecutives,businessunits,andrisk-takingemployeesappropriatelybalanceriskwithincentivessuchthatbusinessperformanceisachievedwithouttakingimprudentorinefficientrisks.Atleastannually,theCompensationCommitteeconductsanassessmentofthecompensationpoliciesandpracticesforouremployees,includingourexecutiveofficers.TheassessmentincludeswhethersuchcompensationpoliciesandpracticescreatedrisksthatwerereasonablylikelytohaveamaterialadverseeffectontheCompany.TheRegulatoryandComplianceOversightCommitteeischargedwiththeoversightofriskrelatingtotheeffectivenessofourcompliancemanagementsystem.TheRegulatoryandComplianceOversightCommitteealsooverseesourprogressinremediatingrisksidentifiedinriskassessmentfindings,internalauditfindings,andoutstandingcorrectiveactionsidentifiedbyregulatorsinexaminationreports,enforcementactions,andothercommunications.InadditiontotheBoardandtheRiskCommittee,theCEOandChiefRiskOfficerdelegateriskresponsibilitytomanagementcommittees.ThesecommitteesincludetheAssetLiabilityCommitteeandtheEnterpriseRiskManagement(“ERM”)Committee.TheChiefRiskOfficerparticipatesoneachofthesecommittees.

Board CommitteesTheBoardhasfivestandingcommittees:theAuditCommittee,theCompensationandTalentManagementCommittee,theExecutiveCommittee,theRegulatoryandComplianceOversightCommittee,andtheRiskCommittee.ThechartersforeachcommitteemaybefoundonSC’swebsiteathttp://investors.santanderconsumerusa.com.

NAME AUDITCOMPENSATION

AND TALENT MANAGEMENT

EXECUTIVEREGULATORY

AND COMPLIANCEOVERSIGHT

RISK

Mahesh Aditya

José Doncel

Stephen A. Ferriss

● ● ● Chair

Victor Hill

● ●

Edith E. Holiday

Chair ●

Javier Maldonado

● ● ●

Robert J. McCarthy

● ● Chair

William F. Muir

Chair ● ●

Scott Powell

●

William Rainer

Chair


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ThefollowingsummarizesthemembershipofeachBoardcommittee,aswellastheprimaryrolesandresponsibilitiesofeachcommitteeandthenumberoftimeseachcommitteemetin2018.

AUDIT COMMITTEE

NUMBEROFMEETINGSIN2018:13MEMBERS

AMONG OTHER THINGS, OUR AUDIT COMMITTEE:

»Mr.Muir(Chair)

»Mr.Ferriss

»Mr.McCarthy

» Reviewsfinancialreportingpolicies,procedures,andinternalcontrols.

» Administerstheappointment,compensation,andoversightofourindependentregisteredpublicaccountingfirm.

»

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

» Reviewsandapprovesorratifiesallrelated-partytransactions.

»

Overseesourinternalauditfunction,includingapprovaloftheannualinternalauditplanandthereviewoftheperformanceofourChiefAuditExecutive.

»

OverseesourcompliancewithlegalandregulatoryrequirementsaswellasethicalstandardsadoptedbytheCompany.

»

Reviewscertainriskmanagementpoliciesandprocedures;certainpolicies,processes,andproceduresregardingcompliancematters;andourSupplementalStatementofEthicsandCodeofEthicsfortheCEOandSeniorFinancialOfficers.

TheBoardhasdeterminedthateachoftheAuditCommitteemembersis“independent”asdefinedbySection10A(m)(3)oftheExchangeAct,Rule10A-3undertheExchangeAct,andtheNYSEListedCompanyRules.TheBoardhasalsodeterminedthateachofthemembersis“financiallyliterate”asrequiredbySection303A.07oftheNYSEListedCompanyRulesandourchair(Mr.Muir)isan“auditcommitteefinancialexpert”asdefinedintheSEC’srules.

COMPENSATION ANDTALENT MANAGEMENTCOMMITTEE

NUMBEROFMEETINGSIN2018:8

MEMBERS

AMONG OTHER THINGS, OUR COMPENSATION AND TALENT MANAGEMENT COMMITTEE:

»Ms.Holiday(Chair)

»Mr.Ferriss

»Mr.Maldonado

»Mr.McCarthy

» ReviewsandapprovesthecompensationoftheCEOandeachotherexecutiveofficer.

» ReviewsandmakesrecommendationstotheBoardregardingthecompensationoftheIndependentDirectors.

»

Approvesandevaluatesallcompensationplans,policies,andpracticesoftheCompanyastheyaffectourCEOandotherexecutiveofficers.

»

Setsperformancemeasuresandgoalsandverifiestheattainmentofperformancegoalsunderperformance-basedincentivecompensationarrangementsapplicabletoourexecutiveofficers.

»

Monitorsandassesseswhethertheoveralldesignandperformanceofourcompensationplans,policies,andprogramsdonotencourageemployees,includingourNEOs,totakeexcessiverisk.

»

Overseesthemanagementdevelopment,successionplanning,andretentionpracticesforourexecutiveofficers.

TheBoardhasdeterminedthatMr.Ferriss,Ms.Holiday,andMr.McCarthyare“independent”asdefinedbytheNYSEListedCompanyRulesandqualifyas“non-employee”directorswithinthemeaningofRule16b-3undertheSecuritiesExchangeActof1934,asamended(“Rule16b-3”).Mr.Ferriss,Ms.Holiday,andMr.McCarthyconstituteasubcommitteeoftheCompensationandTalentManagementCommitteewhenconsideringissuesgovernedbyRule16b-3.

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EXECUTIVECOMMITTEE


MEMBERS

AMONG OTHER THINGS, OUR EXECUTIVE COMMITTEE:

»Mr.Rainer(Chair)

»Mr.Ferriss

»Mr.Maldonado

»Mr.Powell

» ActsontheBoard’sbehalfbetweenBoardmeetingsonallmattersthatmaybelawfullydelegated.

»

ConsidersandrecommendscandidatesforelectiontotheBoard.

»

LeadstheannualperformanceevaluationsoftheBoardandBoardcommittees.

»

ReviewsandadvisestheBoardonourcorporategovernance.

TheBoardhasdeterminedthatMr.RainerandMr.Ferrissare“independent”asdefinedbytheNYSEListedCompanyRules.

REGULATORYAND COMPLIANCEOVERSIGHTCOMMITTEE


MEMBERS

»Mr.McCarthy(Chair)

AMONG OTHER THINGS, OUR REGULATORY AND COMPLIANCE OVERSIGHT COMMITTEE:

»Mr.Hill

»Ms.Holiday

»Mr.Maldonado

»Mr.Muir

» ProvidesoversightoftheCompany’ssignificantbankingandconsumerregulatorycomplianceissues.

» OverseestheCompany’sComplianceProgram,includingtheChiefComplianceOfficer.

»

Overseesourprogressinrespondingtointernalauditfindings,riskassessmentfindings,andoutstandingcorrectiveactionsidentifiedbyregulatorsinexaminationreports,enforcementactions,andothercommunications.

»

ReviewsourregulatorycorrespondenceandreportsreceivedfromorsubmittedtoregulatorstoensureeffectivecommunicationbetweentheCompanyanditsrespectiveregulators.

TheBoardhasdeterminedthatMr.McCarthy,Ms.Holiday,andMr.Muirare“independent”asdefinedbytheNYSEListedCompanyRules.

RISK COMMITTEE

NUMBER OF MEETINGS IN 2018: 14MEMBERS

AMONG OTHER THINGS, OUR RISK COMMITTEE:

»Mr.Ferriss(Chair)

»Mr.Hill

»Mr.Muir

»Assessesandmanages,withoutlimitation,ourenterpriserisk,creditrisk,marketrisk,operationalrisk,liquidityrisk,andotherriskmatters.

»

Providesoversightofourriskgovernancestructureinordertoevaluateandcontrolourrisks,includingtheapprovalofourRiskAppetiteStatement.

»

OverseesourriskmanagementfunctionincludingappointmentandevaluationoftheChiefRiskOfficerandannualreviewoftheChiefRiskOfficer’sproposedpriorities,budgetandstaffingplans.

»

Overseesandmanagesouractivitiesrelatedtocapitalplanningandanalysis.

TheBoardhasdeterminedthatMr.FerrissandMr.Muirare“independent”asdefinedbytheNYSEListedCompanyRules.


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CORPORATE GOVERNANCE - DIRECTOR COMPENSATION

Director CompensationOnlyIndependentDirectorsarecompensatedfortheirserviceontheBoard.ThecompensationprogramforIndependentDirectorswasapprovedbyournon-independent,disinteresteddirectors,whodonotreceiveanycompensationfortheirBoardservice.TheprogramprovidedthefollowingcompensationforIndependentDirectors:

» Anannualcashretainerof$100,000(paidquarterlyinarrears);plus

» AnannualgrantofRSUswithagrantdatefairmarketvalueequalto$50,000,vestingontheearlierofthe1stanniversaryofthegrantdateorthe1stannualstockholdermeetingfollowingthegrantdate(withthegrantdateoccurringatoraroundthestartoftheapplicabletermofservice);plus

» $70,000incashannuallyforservingasthechairofanycommitteeoftheBoard(paidquarterlyinarrears);plus

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

» $450,000incashannuallyifthedirectoralsoservesastheChairmanoftheBoard(paidquarterlyinarrears).TheCompensationCommitteeannuallyreviewstheformandamountofdirectorcompensationandrecommendschangestothenon-independent,disinterestedBoardmembers(whodonotreceiveanydirectorcompensationfromus),asappropriate.TherewerenochangestotheIndependentDirectorcompensationprogramin2018.

Independent Director Stock Ownership GuidelinesInordertoaligntheeconomicinterestsofourIndependentDirectorswiththoseofourstockholders,theBoardhasdeterminedthatourIndependentDirectorsshouldholdameaningfulequitystakeinSC.Tothatend,ourIndependentNon-EmployeeDirectorStockOwnershipGuidelinesrequireeachofourIndependentDirectorstoacquireandretainsharesorshareequivalentsofourCommonStockwithatargetvaluenotlessthanfivetimestheannualequityretainerof$50,000.ThereisnorequiredtimeperiodwithinwhichanIndependentDirectormustattaintheapplicablestockownershiptarget.However,untilthestockownershiptargetisachieved,anIndependentDirectorisrequiredtoretain100%ofallsharesofourCommonStockreceivedunderSC’sIndependentDirectorcompensationprogram,otherthansharesreceivedwithavalueequaltotheamountoftaxesdueonincomerealizedinconnectionwiththevestingorexerciseofawards.Asofthedatehereof,alldirectorsareincompliancewiththeIndependentNon-EmployeeDirectorStockOwnershipGuidelines.

Director Compensation Table for 2018ThefollowingtableprovidesinformationregardingcompensationforeachIndependentDirectorin2018.Underourdirectorcompensationprogram,onlyIndependentDirectorsarecompensatedfortheirserviceontheBoard.

NAME

FEES EARNED ORPAID IN CASH

($)

STOCK AWARDS(1)($)

TOTAL ($)

Stephen A. Ferriss

230,000

50,000

280,000

Edith E. Holiday

190,000

50,000

240,000

Robert J. McCarthy

210,000

50,000

260,000

William F. Muir

210,000

50,000

260,000

William Rainer

620,000

50,000

670,000

(1)ToalignourIndependentDirectors’compensationwithstockholderinterests,eachIndependentDirectorisgrantedRSUsuponelectionorre-election.In2018,alldirectorRSUsweregrantedonJune12,2018.Eachawardwillvestupontheearlierof(i)thefirstanniversaryofthegrantdateand(ii)thefirstannualstockholdermeetingfollowingthegrantdate.ThiscolumnrepresentstheaggregategrantdatefairvaluecomputedinaccordancewithFASBASCTopic718,basedontheclosingpriceofourCommonStockontheapplicablegrantdate,butexcludingtheeffectofpotentialforfeitures.ExceptforMr.Ferriss,whoholds5,207vestedoptions,thestockawardsreflectedabovecomprisealloutstandingequityawardsheldbyourIndependentDirectorsattheendof2018.

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CORPORATE GOVERNANCE - NOMINATION OF DIRECTORS

Nomination of DirectorsTheShareholdersAgreement,byandamongSC,SHUSA,andcertainotherholdersofourCommonStock,whichwerefertoasthe“ShareholdersAgreement,”providesSHUSAwithspecialrightstonominatedirectorstotheBoard.Pleasesee“AdditionalGovernanceInformation—RelatedPartyTransactions—ShareholdersAgreement”forfurtherinformation.PursuanttotheShareholdersAgreement,SHUSAisentitledtonominatesevenmembersoftheBoard.TheShareholdersAgreementprovidesfurtherthatSHUSAmayremoveanydirectornominatedbySHUSAwithorwithoutcause.Inaddition,SHUSAhastherighttodesignateareplacementtofillavacancyontheBoardcreatedbythedepartureofadirectorthatwasnominatedbySHUSA,andwearerequiredtotakeallactionwithinourpowertocausesuchvacancytobefilledbysuchdesignatedreplacement(includingbypromptlyappointingsuchdesigneetotheBoard).WithrespecttodirectorsnotnominatedbySHUSA,theBoardisresponsibleforselectingnomineesforelectiontotheBoardbyourstockholders.Generally,theBoardbeginsidentifyingnomineesbyfirstevaluatingthecurrentmembersoftheBoardwillingtocontinueinservice.CurrentmembersoftheBoardwithskillsandexperiencethatarerelevanttoourbusinessandwhoarewillingtocontinueinserviceareconsideredforre-nomination.IfanymemberoftheBoarddoesnotwishtocontinueinserviceoriftheBoarddecidesnottore-nominateamemberforre-election,theBoardthenidentifiesthedesiredskillsandexperienceofanewnomineeinlightofthecriteriadescribedbelow.Generally,theBoardidentifiescandidatesfordirectornomineesinconsultationwithsittingmembersoftheBoardandwithmanagement,throughtheuseofsearchfirmsorotheradvisors,throughrecommendationssubmittedbyotherdirectorsorstockholders,andthroughsuchothermethodsastheBoarddeemsappropriate.Inidentifyingandevaluatingapotentialdirectornominee,theBoardconsiders,amongotherthings,thefollowingfactors:

» Ourneedswithrespecttotheparticulartalentsandexperienceofourdirectors;

» Thenominee’sknowledge,skills,andexperience,includingexperienceinfinance,administration,orpublicservice,inlightofprevailingbusinessconditionsandtheknowledge,skills,andexperiencealreadypossessedbyothermembersoftheBoard;

» Whetherthenomineeisindependent,asthattermisdefinedundertheNYSEListedCompanyRules;

» Thefamiliarityofthenomineewithourindustry;

» Thenominee’sexperienceinlegalandregulatoryaffairs;

» Thenominee’sexperiencewithaccountingrulesandpractices;and

» ThedesiretobalancethebenefitofcontinuitywiththeperiodicinjectionofthefreshperspectiveprovidedbynewBoardmembers.Initsidentificationandevaluationprocess,theBoardcollectsinformationaboutcandidatesthroughinterviews,detailedquestionnaires,andothermeansthattheBoarddeemshelpfulinsuchprocess.TheBoard’sgoalistoassembleaBoardthatbringstogetheravarietyofperspectivesandskillsderivedfromhighqualitybusinessandprofessionalexperience.Indoingso,theBoardwillalsoconsidercandidateswithappropriatenon-businessbackgrounds.TheBoardisalsocommittedtodiversifiedBoardmembership.TheBoardwillnotdiscriminate,includingonthebasisofrace,nationalorigin,gender,sexualorientation,religion,ordisability,inselectingnominees.Diversityandinclusionarevaluesembeddedintoourcultureandarefundamentaltoourbusiness.Inkeepingwiththosevalues,whenassessingacandidate,theBoardconsidersthedifferentviewpointsandexperiencesthatacandidatecouldbringtotheBoardandhowthoseviewpointsandexperiencescouldenhancetheBoard’seffectivenessintheexecutionofitsresponsibilities.TheBoardisalsocommittedtoseekinghighlyqualifiedwomenandindividualsfromminoritygroupstoincludeinthepoolfromwhichnewcandidatesareselected.Inaddition,theBoardassessesthediversityoftheBoardandcommitteesasapartofitsannualself-evaluationprocess.Otherthantheforegoing,therearenostatedminimumcriteriafordirectornominees.TheBoardmayalsoconsidersuchotherfactorsasitmaydeeminourbestinterestsandthebestinterestsofourstockholders.WealsobelieveitmaybeappropriateforkeymembersofourmanagementtoparticipateasmembersoftheBoard.Subjecttotherightsofourmajoritystockholder,stockholdersmaynominatecandidatesforelectiontotheBoard.InordertonominateacandidateforelectiontotheBoard,stockholdersmustfollowtheproceduressetforthinourBylaws,includingtimelyreceiptbytheSecretaryoftheCompanyofnoticeofthenominationandcertainrequireddisclosureswithrespectbothtothenominatingstockholderandtherecommendeddirectornominee.Foracompletedescriptionoftherequirementsandproceduresforstockholdernominations,pleaserefertoourBylaws.Directorsmaybeelectedbyapluralityofvotescastatanymeetingcalledfortheelectionofdirectorsatwhichaquorumispresent.ThepresenceofamajorityoftheholdersofourCommonStock,whetherinpersonorbyproxy,constitutesaquorum.TheBoarddidnotreceiveanyrecommendationsfromstockholders(otherthanSHUSA)requestingthattheBoardconsideracandidateforinclusionamongthenomineesinthisProxyStatement.However,ourpolicyisthatwewillconsideranysuchrecommendationaslongasthestockholdermakingtherecommendationprovidestoustheinformationconcerningtherecommendedindividualthatisrequiredunderourBylaws.


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EXECUTIVE OFFICERS

EXECUTIVE OFFICERSThenames,ages,andcurrentpositionsofourexecutiveofficersasofthedateofthisProxyStatementarelistedinthetablebelow.Eachexecutiveofficer,includingtheCEO,iselectedbytheBoard.Eachexecutiveofficerholdsofficeuntilhisorhersuccessoriselectedandqualified,oruntilheorsheisremovedfrom,orresignsfrom,thatoffice.Therearenofamilyrelationshipsamongtheexecutiveofficersnoristhereanyagreementorunderstandingbetweenanyofficerandanyotherpersonpursuanttowhomtheofficerwaselected.

NAME

AGE

POSITION

Scott Powell

57

PresidentandChiefExecutiveOfficer

Juan Carlos Alvarez de Soto

48

ChiefFinancialOfficer

Joshua Baer

44

ChiefRiskOfficer

Sandra Broderick

61

HeadofOperations

Fahmi Karam

40

HeadofPricingandAnalytics

Reza Leaali

60

ChiefTechnologyOfficer

Richard Morrin

49

President,ChryslerCapitalandAutoRelationships

Christopher Pfirrman

59

ChiefLegalOfficer,GeneralCounsel,andCorporateSecretary

Sunil Sajnani

38

HeadofDigitalandServiceforOthers

Mikenzie Sari

42

ChiefHumanResourcesOfficer

Scott PowellPresident and Chief Executive OfficerMr.Powellisdiscussedaboveunder“CorporateGovernance—Proposal1:ElectionofDirectors—InformationConcerningtheNominees.”

Juan Carlos Alvarez de SotoChief Financial OfficerMr.AlvarezdeSotojoinedusasourChiefFinancialOfficerinOctober2017.Priortojoiningus,Mr.AlvarezdeSotoservedasCorporateTreasurerforSHUSAfrom2009to2017,overseeingSHUSA’sliquidityriskmanagement,assetliabilitymanagement,andtreasuryfunctions.PriortojoiningSHUSA,from2005to2008,hewasSeniorVicePresidentandHeadofTreasuryandInvestmentsforBancoSantander’sInternationalPrivateBankingatBSIandBancoSantanderSuisse.Inthisrolehemanagedateamofinvestmentprofessionals,overseeingtheassetsofBancoSantander’sinternationalhigh-net-worthclients.From2000to2004,Mr.AlvarezdeSotoheldthepositionofDirecteurAdjointforSantanderCentralHispanoSuisse,GenevaandwasHeadofTreasury,TradingandAsset-Allocation.Mr.AlvarezdeSotoholdsamaster’sdegreeinfinancefromGeorgeWashingtonUniversityandabachelor’sdegreeinmanagementfromTulaneUniversity,andisaCharteredFinancialAnalyst.

Joshua BaerChief Risk OfficerMr.BaerhasservedasourChiefRiskOfficersinceMarch2018,joiningusfromSHUSA,whereheservedasHeadofOperationsandRiskStrategysinceMay2017.PriortoSHUSA,Mr.BaerworkedatCapitalOnefor13years,mostrecentlyastheHeadofConsumerCreditRiskAnalyticssince2010.Mr.Baerholdsabachelor’sdegreeinfinancefromJamesMadisonUniversityandamaster’sdegreeinbusinessadministrationfromtheHaasSchoolofBusinessattheUniversityofCalifornia,Berkeley.

Sandra BroderickHead of OperationsMs.BroderickhasservedasourExecutiveVicePresident,HeadofOperationssinceOctober2017.Ms.BroderickjoinsusfromU.S.Bank,wheresheservedasExecutiveVicePresident,OperationsExecutivesinceMarch2017.Priortothat,Ms.BroderickservedasManagingDirector,OperationsExecutiveatJPMorganChasefromMarch2002toMarch2017,whereshealsoservedasHeadofOperationsfortheirAutomotiveFinancebusinessbeginningin2012.Ms.BroderickwasalsoaSeniorOperationsDirectoratGECapitalfromDecember1995toSeptember1998andaSeniorVicePresidentofOperationsExecutiveatBankOnefromSeptember1998toMarch2002.Ms.BroderickattendedStateUniversityofNewYorkatBuffalo.

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EXECUTIVE OFFICERS

Fahmi KaramHead of Pricing and AnalyticsFahmiKaramhasservedasourExecutiveVicePresident,HeadofPricingandAnalyticssinceMay2018.Inthisrole,Mr.Karam’sresponsibilitiesincludepricingstrategyandoptimizationacrossallofourchannels,modeldevelopmentandmonitoringaswellasstrategicanalytics.HepreviouslyservedasourExecutiveVicePresident,StrategyandCorporateDevelopmentsinceSeptember2015,overseeingfinancialplanningandanalysis,assetacquisitionandsalesandotherstrategicinitiatives.PriortojoiningSC,Mr.KaramwasatJPMorganInvestmentBankfor12years,wherehemostrecentlyservedasanExecutiveDirector.PriortoJPMorgan,Mr.KaramservedasaSeniorAssociateatDeloitteAuditAssuranceServicesfortwoyears.Mr.Karamreceivedabachelor’sandmastersofAccountingfromBaylorUniversity.HeisaCertifiedPublicAccountant.

Reza LeaaliChief Technology OfficerMr.LeaalihasservedasourChiefTechnologyOfficersinceFebruary2018.HepreviouslyservedasChiefInformationOfficerforWellsFargofrom2002to2018andforPurchaseProfrom2001to2002.Priortothat,Mr.LeaaliheldthepositionofChiefArchitectatIngramMicrofrom1995to2001.Mr.Leaaliholdsabachelor’sdegreeincomputersciencefromNorthLondonUniversity.

Richard MorrinPresident, Chrysler Capital and Auto RelationshipsMr.MorrinhasservedasourPresident,ChryslerCapitalandAutoRelationshipssinceOctober2017.HepreviouslyservedasourChiefOperatingOfficersinceFebruary2016,havingjoinedusasourExecutiveVicePresident,NewBusinessinAugust2011.Priortojoiningus,Mr.Morrinheldavarietyofmanagementpositionsin21yearsofcombinedserviceatAllyFinancialandGeneralMotorsAcceptanceCorp.Mr.Morrinholdsabachelor’sdegreeineconomicsfromtheUniversityofPennsylvaniaandamaster’sdegreeinbusinessadministrationfromtheUniversityofVirginia.

Christopher PfirrmanChief Legal Officer, General Counsel, and Corporate SecretaryMr.PfirrmanhasservedasourChiefLegalOfficer,GeneralCounsel,andCorporateSecretarysinceSeptember2015.HewaspreviouslyemployedbySHUSA,andmostrecently,servedasSeniorExecutiveVicePresidentandGeneralCounselofSHUSAandofSBNAfromJanuary2012toSeptember2015.HeservedasSBNA’sSeniorVicePresidentandDeputyGeneralCounselfromJanuary2000toJanuary2012,andhewasanattorneyinthelawfirmofEdwards&Angell,LLP(nowLockeLordLLP)from1996to2000.Hereceivedabachelor’sdegreefromFairfieldUniversityinConnecticutandalawdegreefromtheCollegeofWilliamandMaryinVirginia.HeisamemberoftheMassachusettsandConnecticutbars.

Sunil SajnaniHead of Digital and Service for OthersSunilSajnanihasservedasourExecutiveVicePresident,HeadofDigitalandServiceforOtherssinceMarch2019.HepreviouslyservedasourChiefAuditExecutivefromMay2015untilMarch2019.Priortojoiningus,Mr.SajnaniheldavarietyofmanagementpositionsatConn’s,Inc.,mostrecentlyservingastheHeadofInternalAudit,EnterpriseRiskManagementandRegulatoryCompliancefromNovember2013untilMay2015.PriortoConn’s,Mr.SajnaniworkedatAllyBankandPwC.Hereceivedabachelor’sdegreeinFinancialEconomicsfromtheUniversityofMichiganatAnnArborandamaster’sdegreeinaccountingfromEasternMichiganUniversity.Mr.SajnaniisaCertifiedPublicAccountantandaCertifiedRegulatoryComplianceManager.

Mikenzie SariChief Human Resources OfficerMikenzieSarihasservedasourChiefHumanResourcesOfficersinceSeptember2018.ShepreviouslyservedasManagingDirector,HumanResourcesforWholesaleBankingatSantanderBank,N.A.,andChiefHumanResourcesOfficerofSantanderInvestmentSecuritiesfromFebruary2016toSeptember2018.SheservedasManagingDirector,HumanResourcesofWholesaleBankingatMitsubishiUFJFinancialGroupfromApril2013toJanuary2016.Ms.Sarireceivedabachelor’sdegreeinmechanicalengineeringfromNorthwesternUniversityandamaster’sdegreeinbusinessadministrationfromKelloggSchoolofManagement.


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AUDIT - PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

AUDITProposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm


WeareaskingourstockholderstoratifytheappointmentofPwCasourindependentregisteredpublicaccountingfirmfor2019.

OurAuditCommitteeisresponsiblefortheappointment,compensation,retention,andoversightoftheindependentregisteredpublicaccountingfirmretainedtoperformtheauditofourfinancialstatementsandourinternalcontroloverfinancialreporting.TheAuditCommitteehasappointedtheaccountingfirmofPwCtoserveastheCompany’sindependentregisteredpublicaccountingfirmforthefiscalyearendingDecember31,2019.

Stockholder Ratification of Appointment of Independent Registered Public Accounting FirmAproposaltoratifytheappointmentofPwCtoserveasourindependentregisteredpublicaccountingfirmforthefiscalyearendingDecember31,2019willbepresentedatthe2019AnnualMeeting.PwCauditedourconsolidatedfinancialstatementsfor2017and2018.RepresentativesofPwCareexpectedtobepresentatthemeeting.Theywillhavetheopportunitytomakeastatementiftheydesiretodosoandwillbeavailabletorespondtoappropriatequestionsfromstockholders.StockholderratificationoftheselectionofPwCasourindependentregisteredpublicaccountingfirmisnotmandatedbyourBylawsorotherwiserequired.However,theBoardissubmittingtheselectionofPwCtoourstockholdersforratificationasamatterofgoodcorporategovernance.Ifourstockholdersfailtoratifytheselection,theAuditCommitteewillreconsiderwhetherornottoretainthatfirm.Eveniftheselectionisratified,theAuditCommitteeatitsdiscretionmaydirecttheappointmentofadifferentindependentregisteredpublicaccountingfirmatanytimeduringtheyearifitdeterminesthatsuchachangewouldbeinourbestinterestsandourstockholders’bestinterests.TheaffirmativevoteoftheholdersofamajorityofthesharesofCommonStockentitledtovoteonthismatteratthe2019AnnualMeeting,whetherinpersonorrepresentedbyproxy,willapprovetheproposaltoratifyPwCasourindependentregisteredaccountingfirmforthefiscalyearendingDecember31,2019.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE

FOR THE RATIFICATION OF OUR APPOINTMENT OF PWCAS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

FOR THE CURRENT FISCAL YEAR.

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AUDIT - REPORT OF THE AUDIT COMMITTEE

AUDIT FEES AND RELATED MATTERSAudit and Non-Audit FeesThefollowingtablespresentfeesforprofessionalauditservicesrenderedbyPwCfortheauditsofourannualfinancialstatementsandtheeffectivenessofinternalcontrolsfortheyearsendedDecember31,2018and2017,andfeesforotherservicesrenderedbyPwCduring2018and2017.

2018 ($)

2017 ($)

Audit Fees (1)

7,450,000

8,407,000

Audit-Related Fees (2)

975,000

897,500

Tax Fees (3)

332,167

485,000

All Other Fees (4)

6,827

—

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

(2)Representsfeesbilled,orexpectedtobebilled,forassurance-relatedservices.Suchservicesduring2018and2017principallyincludedattestationreportsrequiredunderservicesagreements,consenttousetheauditor’sreportinconnectionwithvariousdocumentsfiledwiththeSEC,comfortlettersissuedtounderwritersforsecuritiesofferings,andcertainotheragreed-uponprocedures.

(3)Representsfeesbilled,orexpectedtobebilled,fortaxcompliance,taxadvice,andtaxplanning.

(4)Representsfeesbilled,orexpectedtobebilled,forcertainresearchsubscriptionservices.

Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent AuditorTheAuditCommitteehasimplementedprocedurestoensurethatallauditandpermittednon-auditservicesprovidedtousarepre-approvedbytheAuditCommittee.Specifically,theAuditCommitteepre-approvestheuseofanindependentaccountantforspecificauditandnon-auditservices,withinapprovedmonetarylimits.Ifaproposedservicehasnotbeenpre-approved,thenitmustbespecificallypre-approvedbytheAuditCommitteebeforeitmaybeprovidedbyourindependentaccountant.Anypre-approvedservicesexceedingthepre-approvedmonetarylimitsrequirespecificapprovalbytheAuditCommittee.TheAuditCommitteemaydelegatepre-approvalauthoritytooneormoreofitsmemberswhenexpeditionofservicesisnecessary.Alloftheaudit-related,tax,andotherservicesprovidedbyPwCtousin2018wereapprovedbytheAuditCommitteebymeansofspecificpre-approvalsorunderproceduresestablishedbytheAuditCommittee.TheAuditCommitteehasdeterminedthatallnon-auditservicesprovidedbyPwCin2018werecompatiblewithmaintainingitsindependenceintheconductofitsauditingfunctions.

REPORT OF THE AUDIT COMMITTEEThisreportreviewstheactionstakenbyourAuditCommitteewithregardtotheCompany’sfinancialreportingprocessduring2018andparticularlywithregardtotheCompany’sauditedconsolidatedfinancialstatementsasofDecember31,2018and2017andforthethreeyearsendedDecember31,2018.TheAuditCommitteeiscomprisedofthreenon-managementBoardmembers.TheBoardhasdeterminedthateachmemberofourAuditCommitteehasnomaterialrelationshipwiththeCompanyundertheBoard’sdirectorindependencestandardsandthateachisindependentundertheNYSE’slistingstandardsandtheSEC’sstandardsrelatingtotheindependenceofauditcommittees.TheBoardhasalsodeterminedthateachmemberisfinanciallyliterateandthatourchair(Mr.Muir)isan“auditcommitteefinancialexpert”asdefinedbytheSEC.TheAuditCommitteeoperatesunderawrittencharteradoptedbytheBoardthatispublishedontheinvestorrelationssectionofourwebsiteathttp://investors.santanderconsumerusa.com.TheAuditCommitteeannuallyreviewsitswrittencharterandpractices,andhasdeterminedthatitscharterandpracticesareconsistentwiththelistingstandardsoftheNYSEandtheprovisionsoftheSarbanes-OxleyActof2002.ThepurposeoftheAuditCommitteeistoassistBoardoversightof(i)ourindependentregisteredpublicaccountingfirm’squalificationsandindependence,(ii)theperformanceoftheinternalauditfunctionandthatoftheindependentregisteredpublicaccountingfirm,(iii)management’sresponsibilitiestoensurethatthereisinplaceaneffectivesystemofcontrolsreasonablydesignedtosafeguardtheassetsandincomeoftheCompany,(iv)theintegrityofourfinancialstatements,and(v)compliancewithourethicalstandards,policies,plans,andprocedures,andwithlawsandregulations.TheAuditCommitteediscussedwithPwCthemattersrequiredtobediscussedbyPublicCompanyAccountingOversightBoard(“PCAOB”)AuditingStandardNo.1301(CommunicationswithAuditCommittees),includingPwC’soverallauditscopeandaudit


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AUDIT - REPORT OF THE AUDIT COMMITTEE

approachassetforthinthetermsoftheirengagementletter,PwC’soverallauditstrategyforsignificantauditrisksidentifiedbythem,andthenatureandextentofthespecializedskillsnecessarytoperformtheplannedaudit.Inaddition,theAuditCommitteemonitorstheaudit,audit-related,andtaxservicesprovidedbyPwC.DetailsofthefeespaidtoPwCcanbefoundinthisProxyStatementunder“Audit—AuditFeesandRelatedMatters.”PwCprovidedtheAuditCommitteethewrittendisclosuresandtheletterrequiredbyPCAOB’sEthicsandIndependenceRule3526(CommunicationswithAuditCommitteesConcerningIndependence),andtheAuditCommitteediscussedandconfirmedwithPwCtheirindependence.TheAuditCommitteehasconsideredwhetherPwC’sprovisionofanynon-auditservicestousiscompatiblewithmaintainingauditorindependence.TheAuditCommitteehasconcludedthattheprovisionofanynon-auditservicesbyPwCwascompatiblewithPwC’sindependenceintheconductofitsauditingfunctions.Managementisresponsibleforourinternalcontroloverfinancialreporting,thefinancialreportingprocess,andourconsolidatedfinancialstatements.TheindependentauditorisresponsibleforperforminganindependentauditofourconsolidatedfinancialstatementsandoftheeffectivenessofinternalcontroloverfinancialreportinginaccordancewithauditingstandardspromulgatedbythePCAOB.OurInternalAuditDepartment,undertheChiefAuditExecutive,isresponsibletotheAuditCommitteeforpreparinganannualauditplanandconductinginternalauditsintendedtoevaluateourinternalcontrolstructureandcompliancewithapplicableregulatoryrequirements.ThemembersoftheAuditCommitteearenotprofessionallyengagedinthepracticeofaccountingorauditing.Asnotedabove,theAuditCommittee’sresponsibilityistomonitorandoverseetheseprocesses.TheAuditCommitteeregularlymeetsandholdsdiscussionswithourmanagementandinternalauditorsandwiththeindependentauditor,includingsessionswiththeinternalauditorsandwiththeindependentauditorwithoutmembersofmanagementpresent.ManagementrepresentedtotheAuditCommitteethatourconsolidatedfinancialstatementswerepreparedinaccordancewithGAAP.TheAuditCommitteereviewedanddiscussedourconsolidatedfinancialstatementswithmanagementandPwC.TheAuditCommitteealsodiscussedwithPwCthequalityofouraccountingprinciples,thereasonablenessofcriticalaccountingestimatesandjudgments,andthedisclosuresinourconsolidatedfinancialstatements,includingdisclosuresrelatingtosignificantaccountingpolicies.BasedontheAuditCommittee’sdiscussionswithourmanagement,internalauditors,andPwC,aswellasareviewoftherepresentationsgiventotheAuditCommitteeandPwC’sreports,theAuditCommitteerecommendedtotheBoard,andtheBoardapproved,inclusionoftheauditedconsolidatedfinancialstatementsinourAnnualReportonForm10-KfortheyearendedDecember31,2018,asfiledwiththeSEConFebruary26,2019.

Submitted by the Audit Committee of the Board:William F. Muir, ChairStephen A. FerrissRobert J. McCarthyThisreportshallnotbedeemedtobeincorporatedbyreferencebyanygeneralstatementincorporatingbyreferencethisProxyStatementintoanyfilingundertheSecuritiesActorExchangeAct,andshallnototherwisebedeemedfiledundertheseActs.

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COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS

COMPENSATIONCompensation Discussion and AnalysisExecutive SummaryIntroduction. ThisCD&Adescribesthematerialelementsofcompensationawardedto,earnedby,orpaidtoeachofourNEOs,andfocusesontheinformationcontainedinthefollowingtablesandrelatedfootnotesprimarilyfortheyear2018.

NAMED EXECUTIVE OFFICER TITLE

Scott Powell

PresidentandCEO


ChiefFinancialOfficer

Reza Leaali

ChiefTechnologyOfficer

Richard Morrin

President,ChryslerCapitalandAutoRelationships

Sandra Broderick

HeadofOperations

ThisCD&Aexplainstheoverallobjectivesofourexecutivecompensationprogram,howeachelementofourexecutivecompensationprogramisdesignedtosatisfytheseobjectives,andthepoliciesunderlyingour2018compensationprogram.TheCompensationCommitteedesignsourexecutivecompensationprogramtobeconsistentwithbestpractices,supportourbusinessesinachievingtheirkeygoalsandimperatives,anddrivestockholdervalue.TheCompensationCommitteebelievesthatourcompensationprograms,whichareintendedtocomplywithallapplicablelaws,regulationsanddirectivesfromourregulators,aregovernedbyasetofsoundprinciplesandaredesignedtomitigateexcessiverisk-taking.2018 Business Performance Highlights .Withnetincomeof$916millionand$28.8billionintotaloriginations,ourfullyear2018financialresultsdemonstrateourcontinuedstrengthandconsistency.Ourearningsandoriginationswereupduringeachquarter,drivenbyourrenewedfocusondealerexperience,robustpricingapproachandstablecreditperformance.Additionally,weachievedareturnonaverageassets(“ROA”)of2.2%andareturnonaverageequity(“ROE”)of13.3%.

Netincomeforthefullyear2018was$916million,or$2.54perdilutedcommonshare.

TheFederalReserveBankofBostonterminatedits2015WrittenAgreementwithourmajorityowner,SHUSA,demonstratingthesignificantimprovementswehavemadewithhowourU.S.businessoperates.

InJune2018,SHUSAannouncedthattheFRBBdidnotobjecttotheplannedcapitalactionsdescribedinSHUSA’s2018CapitalPlanthatwassubmittedaspartofitsannualCCARsubmissions.IncludedinSHUSA’scapitalactionsweredividendpaymentsfortheCompany’sstockholdersthroughthesecondquarterof2019.Alsoincludedwasauthorizationfora$200millionsharerepurchaseprogram,whichwasapprovedbytheBoardinJuly2018andcompletedbytheCompanyinJanuary2019.

ThroughSantanderBankN.A.,fully-launchedaprograminJuly2018leadingto$1.9billioninoriginationsandincreasedFCAdealerreceivables43%year-over-yearto$2.8billion.

AchievedanaverageannualFCApenetrationrateof30%.

WewerealeadingautoloanABSissuerwith$13.3billioninABSofferedandsold.

WeachievedROAof2.2%andROEof13.3%.

InlinewiththeCompensationCommittee’sgoalofbalancingrisk/rewardmanagementwithincomeandprofitability,theaboveresultswereaccomplishedwhilealsotakingameasuredapproachtooriginationsinacompetitivemarketandimprovingthecreditqualityofourbalancesheet.2018 Compensation Highlights. TheCompensationCommittee’scompensationdecisionsfor2018reflectthedirectrelationshipbetweenthepayopportunitiesforourNEOsandperformanceforourstockholders.Basedonourstrongfinancialperformanceinanincreasinglycompetitivemarket,consistenteconomicstability,robustcustomerrelations,andsteadyregulatorycompliance,theCompensationCommitteeapprovedfundingof110%ofthetargetamountoftheSCExecutiveBonusPool(the“BonusPool”).The110%fundingoftheBonusPoolwasfurthersupportedbytheaccomplishmentofkeygoalsrelatedtoouremployeeengagement,customersatisfaction,anddealerloyalty.


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Allocation of Compensation Between SC and SHUSA for Mr. Powell. ScottPowellservesasourCEOandalsoservesastheCEOofourparent,SHUSA.OurCompensationCommitteeandSHUSA’sCompensationandTalentManagementCommittee(the“SHUSACompensationCommittee”)jointlydeterminedthefollowingapproachtoallocatingMr.Powell’scompensationbetweenSCandSHUSAfor2018:

» CashCompensation.Mr.PowellhasremainedonSHUSA’spayrollandcontinuedtoparticipateinSHUSA’sbenefitplans.However,aportionofMr.Powell’ssalarywasallocatedtohisserviceasourCEOduring2018,whichappearsinourfinancialstatementsasacompensationexpense.Asforthecashportionofhis2018annualbonus(includingtheSRIPawardfor2018,describedbelow),wehavepaidandwillcontinuetopaytheallocatedportiondirectly.Fortheyear,Mr.Powellspentapproximately63%ofhistimeonSCmattersand37%ofhistimeonSHUSAmatters.Theseamountsfor2018areshowninthesalaryandbonuscolumns(forthenon-deferredcashportionofthebonus)intheSummaryCompensationTablebelow.ThissameallocationappliestothedeferredcashportionofMr.Powell’s2018bonus,whichamountswillbereportedintheSummaryCompensationTablefortheyearearnedandpaid.

» EquityCompensation.Asdiscussedbelow,50%ofMr.Powell’s2018annualbonus(includingtheportionundertheSRIP)isprovidedintheformofequityawardsthataresubjecttocertainvestingconditions.For2018,toreflectMr.Powell’ssplitinservicebetweenSHUSAandSC,theCompensationCommittee,togetherwiththeSHUSACompensationCommittee,jointlydecidedthattheequityportionofMr.Powell’s2018bonuswouldbeprovided63%inawardsofRSUsunderourequitycompensationplanand37%inawardsofBancoSantanderADRsunderSHUSA’scompensationprogram.ThegrantdatefairvalueofourRSUawardsfor2018servicewillbeshowninthestockawardscolumnintheSummaryCompensationTablefor2019(theyeartheRSUsweregranted).

GiventheallocationofcompensationbetweenusandSHUSAforMr.Powell’sservices,theassessmentofMr.Powell’sperformanceanddecisionsaboutthetotalamountofhis2018bonusweremadejointlybyourCompensationCommitteeandSHUSA’scompensationcommittee.PleaseseeSHUSA’sAnnualReportonForm10-KforthefiscalyearendedDecember31,2018forinformationaboutMr.Powell’stotalcompensationpaidbySHUSA,includingtheamountsreportedinthisProxyStatementforamountsattributabletohisserviceasourCEO.OurCompensationCommitteewillreviewthisallocationapproachfor2019compensationwithSHUSAand,dependingontheexpectedallocationofMr.Powell’sdutiesfor2019,maychangetheapproachnextyear.Key Executive Compensation Principles. ThefundamentalprinciplesthattheCompensationCommitteefollowsindesigningandimplementingcompensationprogramsforourNEOsareto:

» Attract,motivate,andretainhighlyskilledexecutiveswiththebusinessexperienceandacumennecessaryforachievingourlong-termbusinessobjectives;

» Linkpaytoperformanceand,toanappropriateextent,aligntheinterestsofmanagementwiththoseofourstockholders;

» Appropriatelybalanceriskandfinancialresults;and

» Supportourcorevalues,strategicmission,andvision.TheCompensationCommitteeaimstoprovideatotalcompensationpackagethatiscomparabletothatofotherfinancialinstitutionswithwhomwecompeteforbusinessandfortalent,takingintoaccountpubliclyavailableinformationprovidedbyourindependentcompensationconsultant.Withinthisframework,theCompensationCommitteeconsiderseachcomponentofeachNEO’scompensationpackageindependently;thatis,theCompensationCommitteedoesnotevaluatewhatpercentageeachcomponentcomprisesofthetotalcompensationpackage.In2018,theCompensationCommitteetookintoaccountSC’sperformanceandeachNEO’sindividualperformance,levelofresponsibility,andtrackrecordwithintheorganizationinsettingtheNEO’scompensation.

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2018 Compensation ActionsHow we compensated our NEOs

SCOTT POWELL

AGE:57 TITLE:President and Chief Executive Officer

Asdiscussedin“CompensationDiscussionandAnalysis—ExecutiveSummary—AllocationofCompensationBetweenSCandSHUSAforMr.Powell,”Mr.Powell’sperformancein2018wasevaluatedcollectivelybyourBoardandSHUSA’sBoardofDirectors.OurdecisiontopayaprorataportionofMr.Powell’scompensationfor2018wasreachedaftersubstantialdiscussion,reviewofpeergroupdata,andathoroughreviewofMr.Powell’sperformanceandallocationofbusinesstimethroughouttheyear.

Mr.Powellreceivedabasesalaryof$3,000,000forhisworkasCEOofbothSHUSAandSC,with$1,875,000allocatedfortimespentasSC’sCEO.Hisannualbonusawardof$4,250,000forhisworkasCEOofbothSHUSAandSC(100%ofMr.Powell’stargetbonus)wasprovidedinamixofcurrentanddeferredcashandSCRSUandBancoSantanderADRawards,with$2,677,500allocatedtous.Mr.PowellalsoreceivedaSRIPbonusawardof$700,000forhisworkasCEOofbothSHUSAandSC,providedinamixofcurrentanddeferredcashandequityintheformofSCRSUandBancoSantanderADRawards,with63%oftheequityportionandcashportionallocatedtous,foratotalofapproximately$441,000.Asdiscussedabove,thisallocationwasbasedonthepercentageoftimethatMr.Powellworkedforeachorganization.

InaccordancewithaletteragreementbetweenSHUSAandMr.PowelldatedasofSeptember14,2018,SHUSA’sCompensationCommitteeandourCompensationCommitteeincreasedMr.Powell’sannualbasesalaryfrom$2.0millionto$3.0millionandincreasedhisbonustargetto$4.25million,effectiveJanuary1,2018,inrecognitionofhisexpandeddutiesandtobetteralignhistotalcompensationrelativetopeers.

InapprovingMr.Powell’sannualbonusawardfor2018,theCompensationCommittee,amongotheritems,considered:

» hiseffortsdrivingcontinuedprogressonregulatoryissues;

» theCompany’simprovementsincomplianceandoperationalriskmanagement,includingdataquality,cybersecurity,informationsecurity,internalcontrols,andriskcontrolself-assessments;

» continuedimplementationofacultureofriskmanagementandcomplianceinlinewithSantander’svaluesof“Simple,PersonalandFair”;and

» theCompany’soverallfinancialperformancefortheyear,includingnetincomeof$916million,returnonaverageassetsof2.2%andreturnonaverageequityof13.3%.

JUAN CARLOS ALVAREZ DE SOTO

AGE:48 TITLE:Chief Financial Officer

ForhisfirstfullyearofservicetoSCin2018,Mr.AlvarezdeSotoreceivedabasesalaryof$1,000,000aswellasanannualbonusawardof$525,000(102.44%ofMr.AlvarezdeSoto’stargetbonus),whichwasprovidedinamixofcurrentanddeferredcashandRSUawards.Mr.AlvarezdeSotoalsoreceivedaSRIPbonusawardof$288,138,whichwasprovidedinamixofcurrentanddeferredcashandRSUawards.

InsettingMr.AlvarezdeSoto’scompensationfor2018,theCompensationCommittee,amongotheritems,considered:

» theCompany’soverallfinancialperformancefortheyear,includingnetincomeof$916million,returnonaverageassetsof2.2%andreturnonaverageequityof13.3%;

» hiseffortstoincreasetheCompany’soriginationswithhisactiveparticipationinpricingandotherinitiatives;

» continuedeffortsinexpandingtheCompany’spartnerships,includingnewservice-for-othersplatforms;

» strongimprovementofinternalprocessesandthecontrolenvironment;and

» theupgradingofourfinanceteaminordertobettersupportthebusiness.


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REZA LEAALI

AGE:60 TITLE:Chief Technology Officer

Mr.LeaalijoinedusinFebruary2018.Perthetermsofhisofferletter,hereceivedanannualizedbasesalaryof$500,000(pro-ratedto$442,308for2018),anannualbonusawardof$500,000(100%ofMr.Leaali’stargetbonus)providedinamixofcurrentanddeferredcashandRSUawards,a$240,000cashsign-onbonus(whichwassubjecttorepaymentintheeventofMr.Leaali’svoluntaryresignationwithinoneyearofhishiredate),anda$1,182,305grantofRSUs,intendedtocompensateMr.Leaaliforthelostvalueofcertaincompensationthatheforfeitedwithhisformeremployer,andwhichvestinequalannualinstallmentsoverfouryears.Mr.LeaalialsoreceivedaSRIPbonusawardof$175,000,whichwasprovidedinamixofcurrentanddeferredcashandRSUawards,andcertainrelocationbenefitsinconnectionwithhisrequiredrelocationtoDallas.

InsettingMr.Leaali’sannualbonusawardfor2018,theCompensationCommittee,amongotheritems,considered:

» thedeliveryoftechnologyrequirementsformultiplesubstantialinitiatives,includingthealignmentofinformationsecuritypoliciesandprocedureswithSHUSA;

» theformationofanimproveddatacenterstrategydeliveringasignificantupgradesintheCompany’sdatacenters;

» theimplementationofarobusttaxonomytoprioritizetechnologyprojectsinpartnershipwiththeCompany’sbusinessleaders;and

» asignificantreductioninthecustomerimpactofIT-relatedincidentsyear-over-year.

RICHARD MORRIN

AGE:49 TITLE:President, Chrysler Capital and Auto Relationships

For2018,Mr.Morrincontinuedtoreceiveabasesalaryof$850,000.Mr.Morrinwasalsocompensatedwithanannualbonusawardof$1,000,000(114.78%ofMr.Morrin’stargetbonus)andaSRIPbonusawardof$350,000,ineachcaseprovidedinamixofcurrentanddeferredcashandRSUawards.

InsettingMr.Morrin’scompensationfor2018,theCompensationCommittee,amongotheritems,considered:

» theCompany’sdeliveryof$28.8billioninoriginations;

» achievementofanaverageannualFCApenetrationrateof30%;

» hiseffortsinlaunchingtheprimeretailpartnershipwithSBNA;and

» thecontinuedimprovementinChryslerCapital’sJDPowerDealerSatisfactionranking.

SANDRA BRODERICK

AGE:61 TITLE:Head of Operations

For2018,theCompanyprovidedMs.Broderickwithabasesalaryof$850,000inaccordancewiththetermsofherSeptember2017offerletter.Ms.Broderickwasalsocompensatedwithanannualbonusawardof$1,000,000(114.78%ofMs.Broderick’stargetbonus)andaSRIPbonusawardof$350,000,ineachcaseprovidedinamixofcurrentanddeferredcashandRSUawards.Inaddition,perthetermsofherofferletter,Ms.Broderickreceivedthesecond$150,000installmentofacashsign-onbonus,withafinal$150,000installmentpayableinOctober2019.

InsettingMs.Broderick’sannualbonusawardfor2018,theCompensationCommittee,amongotheritems,considered:

» theimplementationofstrongstrategyanddisciplinetoreininexpenses;

» theCompany’sstabledelinquencyandlossperformance;

» herdrivingcontinuedregulatoryandcompliance-relatedinitiatives;and

» thecompletionofacomprehensiverestructureoftheoperationsorganization,includingseniortalentupgrades.

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PROCESS FOR DETERMINING EXECUTIVE COMPENSATIONCompensation CommitteeTheCompensationCommitteeretainsthefinalauthorityregardingandultimatelysetsthecompensationforourexecutiveofficers,includingourNEOs,andhasoversightof,amongotherthings,adoption,modification,andterminationofthetermsofourexecutiveincentiveplans,andapprovalofamountspaidtoourNEOsunderthoseplans.TheCompensationCommitteeoperatesunderawrittencharteradoptedbytheBoardthatispublishedontheinvestorrelationssectionofourwebsiteathttp://investors.santanderconsumerusa.com.Pursuanttoitscharter,theCompensationCommitteemaydelegateresponsibilitiestosubcommitteesconsistingofoneormoreofitsmembers,whomustreportontheiractivitiestotheCompensationCommittee.BancoSantander’sBoardRemunerationCommitteeandBoardofDirectorsaswellasSHUSA’sCompensationCommitteealsoreview,validateandapprovethecompensationprovidedtocertainmembersofourandSHUSA’smanagementteam,includingMr.Powell.TheCompensationCommitteeconductsanin-depthassessmentofeachNEO’sperformanceagainsthisorherindividualgoals,aswellasagainstSC’sperformance,andthenappliesitsjudgmenttomakecompensationdecisions.TheCompensationCommitteeutilizesaformulatoapproveabonuspoolforexecutiveofficersandcertainotherseniormembersofmanagement(pleasesee“PrincipalComponentsofExecutiveCompensation—AnnualBonuses—SCBonusPool”inthisCD&Aforfurtherinformation),butdoesnototherwiserelyonaformulaormatrixtomakeindividualcompensationdecisions.TheCompensationCommitteebelievesthisprocessprovidesaccountabilityforperformanceagainstSCandindividualgoalsandenablestheCompensationCommitteetoassesseffectivelythequalityoftheperformanceandleadershipdemonstratedbyeachNEO.Importantly,theCompensationCommitteebelievesthattheprocessalsodifferentiatesamongeachNEO’sperformanceandmotivateseachNEO’sshort-termandlong-termresultsaswellaspromotesinnovationandbusinesstransformationwithinSC.ToadvisetheCompensationCommitteeinfulfillingitsdutiesandresponsibilities,theCompensationCommitteeretainedPayGovernanceLLC(“PayGovernance”)in2018toactasitsindependentconsultantandadviseonexecutivecompensation.PayGovernancereporteddirectlytotheCompensationCommitteeandperformednootherworkforSCin2018.Aspartofits2018engagementofPayGovernance,theCompensationCommitteeanalyzedPayGovernance’sindependencefrommanagementandwhetherhiringPayGovernancewouldraiseaconflictofinterest.TheCompensationCommitteeperformedthisanalysisbytakingintoconsiderationthefollowingfactorssetforthinSection303A.05oftheNYSEListedCompanyManual:

» AnyotherservicesprovidedtousbyPayGovernance;

» TheamountoffeesPayGovernancereceivedfromusasapercentageofPayGovernance’stotalrevenue;

» PoliciesandproceduresPayGovernanceutilizestopreventconflictsofinterest;

» AnybusinessorpersonalrelationshipoftheindividualcompensationadvisorofPayGovernancewithanymemberoftheCompensationCommitteeoranexecutiveofficerofours;

» AnybusinessorpersonalrelationshipofPayGovernancewithanexecutiveofficerofours;

» AnySCstockownedbyPayGovernanceortheCompensationCommittee’sindividualadvisoratPayGovernance;and

» AnybusinessorpersonalrelationshipofPayGovernancewithanexecutiveofficerofours.TheCompensationCommitteedetermined,basedonitsanalysisoftheabovefactors,thatPayGovernanceisindependentfrommanagementandthattheworkofPayGovernanceandtheindividualcompensationadvisorsemployedbyPayGovernanceascompensationconsultantstotheCompensationCommitteehavenotpresentedanyconflictofinterest.PayGovernanceassistedtheCompensationCommitteein2018byprovidingmarketandindustryinformationregardingexecutivecompensation.Inprovidingsuchinformation,PayGovernanceidentifiedconsumerfinanceandbankingcompanieswithwhichwecompetedirectlyforbothbusinessandtalent.Inidentifyingthosecompanies,PayGovernanceconsideredinstitutionsincomparableindustriesandproductmarkets,withcomparablebusinessmodels,andofcomparablesizes.WhiletheCompensationCommitteeconsideredallavailableinformationwhendeterminingNEOcompensationfor2018,includingthedataprovidedbyPayGovernance,itdidnottargetspecificbenchmarksorlevelsofmarketpaywhensettingNEOcompensationfor2018.


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Consideration of Say-on-Pay VoteTheCompensationCommitteevaluesinputfromourstockholdersonourexecutivecompensationprogramandourprinciplesandobjectiveswhendeterminingexecutivecompensation.OnewaytheCompensationCommitteereceivesthatinputisthroughtheresultsofanadvisorystockholdervoteonexecutivecompensation(the“Say-on-Payvote”).WeholdaSay-on-Payvoteeverythreeyears,mostrecentlyin2018,basedonthepreferenceexpressedbyourstockholdersatour2015AnnualMeeting.Inthe2018Say-on-Payvote,asignificantmajorityofourstockholders(over98%ofvotescast)approved,onanadvisorybasis,thecompensationforourNEOs.TheCompensationCommitteedidnottakeanyspecificactionswithrespectto2018compensationdecisionsforourNEOsasaresultofthe2018Say-on-Payvote.OurnextSay-on-Payvoteisexpectedtobeheldatour2021AnnualMeeting.

PRINCIPAL COMPONENTS OF EXECUTIVE COMPENSATIONOverview of ComponentsTheCompensationCommitteeusesthefollowingelementsofcompensationtoattractandretainNEOsandmaintainastableteamofeffectiveleaders,tobalancethecompensationofourNEOswiththeshort-termandlong-termobjectivesofSC,andtoaligntheinterestsofourNEOswiththeinterestsofallofourstockholders.For2018,thecompensationthatwepaidtoourNEOsconsistedprimarilyofbasesalaryandshort-andlong-termincentiveopportunities,asdescribedmorefullybelow.Inaddition,ourNEOswereeligibleforparticipationincompany-wideretirement,healthandwelfarebenefitsplans,andprovidedwithcertainhealthandwelfarebenefitsandperquisitesnotavailabletoouremployeesgenerally,asdescribedmorefullybelow.TheprincipalelementsofcompensationavailabletoourNEOsin2018wereasfollows:

ELEMENT

DESCRIPTION AND PURPOSE

Base Salary »

FixedcashcompensationcomponentthatreflectstheNEO’spositionandresponsibilities.

» OffersstabilityforNEOs.

Annual Bonus

»

AnnualbonusprogramdesignedtomotivateandrewardtheachievementofSCand/orindividualperformancegoals.

»

Theannualbonusiscomprisedofbothshort-termandlong-termincentives.Aportionofthebonusisdeferredincashandequityaspartofabalanceddesignintendedtoappropriatelybalancecompensationrisk.Paymentofthedeferredcashandequityisspecificallyconditionedupontheabsenceofseveralnegativeriskand/orlegalevents,including,butnotlimitedto,anyofthefollowing:(i)materialfailureswithrespecttoriskmanagementbyusandanyofouraffiliates;(ii)anymaterial,negativerestatementofourfinancialstatementsasaresultofactivitiescarriedoutonorafterJanuary1,2018;(iii)materialbreachofanyofourinternalrulesorregulations;or(iv)amaterial,negativechangeinourcapitalizationorriskprofile.

»

In2019,theCompensationCommitteeawardedbonusestoourNEOsfortheirperformancein2018baseduponabonuspoolmethodologyadoptedbytheCompensationCommittee.ForbonusesawardedtoMr.PowellandMr.AlvarezdeSoto,aportionofthedeferredcashandRSUsarealsosubjecttofutureBancoSantanderandSCperformancegoalstofurtherencouragelong-term,sustainableperformance.

Long-Term IncentiveCompensation

»

NoawardsundertheSANPerformanceAwardprogramweremadein2017or2018,andnoneareexpectedmovingforward.InNovember2016,wemadefinalgrantsofperformance-basedRSUs(PSUs)undertheprogramtocertainNEOs.TheawardsvestedinMarch2019basedonascorecardofBancoSantanderperformancegoals.

» Sometimesusedwithnewhiresinordertoreplacelostcompensationopportunitieswithprioremployers.

»

Alignslong-termNEOandstockholderinterestsandencouragesretention.

SRIP Awards

»

TheCompensationCommitteedesignedtheSRIPtoincentivizeandrewardourNEOsformeetingkeyregulatorycommitments,aspartofourlong-termbusinessstrategy.UndertheSRIP,ourNEOsareeligibletoreceiveawardsthattrackthesamepaymentprocedureandtimingasannualbonusawards.Forperformancein2018,wegrantedSRIPawardstoalloftheNEOsinearly2019.

»

Alignslong-termNEOandstockholderinterests,encouragesretention,andincentivizesachievementofregulatorygoals.

Retirement Benefits;Health and Welfare

Benefits; Perquisites

»

ProvideNEOswithstabilityduringemploymentandintoretirementandarecompetitivewithoverallmarketpractices.

EmploymentAgreements andSeverance Policy

»

SeverancebenefitsprovidedtoNEOsuponcertainterminationsofemployment.

»

FacilitatesretentionofNEOsbyprovidingincomestabilityintheeventofjobloss.

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Base SalaryBasesalaryreflectseachNEO’slevelofresponsibility,leadership,andtenure,aswellastheCompensationCommittee’sevaluationofeachNEO’scontributiontotheperformanceandprofitabilityofSC.InestablishingeachNEO’sannualbasesalary,theCompensationCommitteeconsideredmarketsalarydata,ourbudget,achievementofperformanceobjectives,andourCEO’sassessmentoftheotherNEOs’performance.ThefollowingtableprovidesdetailregardingeachNEO’sannualbasesalaryratefor2018:

NEO

ANNUAL BASE SALARY RATE($)*

Scott Powell**

3,000,000


1,000,000

Reza Leaali***

500,000

Richard Morrin

850,000

Sandra Broderick

850,000

* ThistableprovidestheannualbasesalaryrateforeachNEOasofDecember31,2018.ThebasesalaryactuallypaidtoeachNEOin2018isreflectedinthe

SummaryCompensationTablebelow.

** Mr.Powell’s2018salaryof$3,000,000wassetbyourCompensationCommitteeandSHUSA’sCompensationCommittee.Atotalof$1,875,000wasallocatedtotimespentonSCmattersandrecognizedasacompensationexpenseforus,asdescribedabovein“CompensationDiscussionandAnalysis—ExecutiveSummary—AllocationofCompensationBetweenSCandSHUSAforMr.Powell.”Mr.Powell’sbasesalaryincreasewasapprovedinrecognitionofhisexpandeddutiesandinanefforttobringhiscompensationmoreinlinewithpeers.

*** Mr.LeaalijoinedusinFebruary2018andwaspaidaproratashareofhisannualbasesalary,$442,308.

Annual BonusesIntroduction. For2018,theannualcompensationofourNEOsincludedbonusespayableincashandequityunderSC’sSeniorExecutiveAnnualBonusPlan(the“BonusPlan”).TheBonusPlanisintendedtoprovideanincentiveforsuperiorworkandtomotivatecoveredkeyexecutivestowardevengreaterachievementandbusinessresults,totietheirgoalsandintereststothelong-terminterestsofourstockholders,andtoenableustoattractandretainhighly-qualifiedexecutives.UndertheBonusPlan,ourexecutiveofficers,includingourNEOsandcertainseniormembersofmanagement,areeligibletoreceivebonuspaymentsforaspecifiedperiod(forexample,ourfiscalyear),whichmaybeperformance-basedordiscretionary.Individual Bonus Targets. TheCompensationCommitteeassignedtoeachNEOatargetbonusawardopportunityundertheBonusPlanfor2018basedontheNEO’sroleandresponsibilities,rateofbasesalary,andcompetitivepracticesatourcompensationpeergroups.ThefollowingtableprovidesdetailregardingeachNEO’stargetbonusundertheBonusPlanforperformancein2018:

NEO

TARGET BONUS($)

Scott Powell*

4,250,000


512,500

Reza Leaali

500,000

Richard Morrin

871,250

Sandra Broderick

871,250

* Mr.Powell’s2018bonustargetof$4,250,000wassetbyourCompensationCommitteeandSHUSA’sCompensationCommittee,asdescribedabovein“

CompensationDiscussionandAnalysis—ExecutiveSummary—AllocationofCompensationBetweenSCandSHUSAforMr.Powell.”Mr.Powell’stargetbonusfor2018wasincreasedfrom2017levelsinrecognitionofhisexpandeddutiesandinanefforttobringhiscompensationmoreinlinewithpeers.Asdiscussedabove,63%ofMr.Powell’sfinalbonuspaymentwasallocatedtoSCand37%wasallocatedtoSHUSAinrecognitionoftheallocationofhistimebetweenbothentitiesfortheyear.


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SC Bonus Pool .TheCompensationCommitteeapprovedtheBonusPoolasamethodologyforsettingtheoverallfundingofBonusPlanawardswithrespectto2018forourexecutiveofficers,includingourNEOs,andcertainotherseniormembersofmanagement.ThetargetamountoftheBonusPoolisthesumoftheindividualtargetbonusamounts.TheBonusPoolmethodologyincorporatesabalanced,“scorecard”approachthatconsidersourfinancialperformanceagainstbudgetedfinancialgoals,aswellasperformancerelatedtocustomersatisfaction,regulatorycompliance,employees,andculture.TheCompensationCommitteeapprovedthefollowingmetricsfortheBonusPoolfor2018:

SC BONUS POOL METRIC

WEIGHTING OF SC BONUS POOL METRIC

Customers & Employees

10%

ConsumerCustomerSatisfaction

2.50%

ChryslerCapital(CCAP)DealerLoyalty

1.25%

CoreDealerSatisfaction

1.25%

EmployeeEngagement

5.00%

Regulatory & Risk

20%

CostofCreditRatio(1)

10.00%

CompletedActionPlansforRegulatoryCommitmentsandWrittenAgreements

10.00%

Capital

20%

ContributiontoGroupCapital(1)

20.00%

Profitability

50%

NetProfit(1)

27.50%

RoRWA(1)

22.50%

SHUSA Scorecard Modifier

Formulaic

Discretionary Adjustment

+/- 25%

(1)WegenerallyassessourperformancebasedonfinancialmeasurescalculatedunderGAAP.However,duetoourrelationshipwithBancoSantander,forpurposesofthe2018BonusPool,financialmeasureswerecalculatedunderInternationalFinancialReportingStandards(“IFRS”).DifferencesbetweenIFRSandGAAPintheaccountingtreatmentofcertaintransactionscanresultindifferencesbetweenfinancialmeasurescalculatedunderIFRSandthosecalculatedunderGAAP.WebelieveusingfinancialmeasurescalculatedunderIFRSratherthanGAAPdidnotsignificantlyimpacttheCompensationCommittee’sabilitytoassessourNEOs’performanceforpurposesofdetermining2018BonusPoolawards.”CostofCreditRatio”isdefinedastheratioofthesumoftotalprovisionovertheprior12monthstotheaverage12-monthcustomerloanbalances(excludingALLLofthepublicbalancesheet).“ContributiontoGroupCapital”isdefinedasnetprofitminuscapitaldeductionsand11%ofchangeinrisk-weightedassets.“NetProfit”isdefinedasnetprofitaftertaxandpriortominorityinterests.“RoRWA”(or“returnonrisk-weightedassets”)isdefinedastheratioofnetprofittototalrisk-weightedassets.Undercertainbankingregulators’risk-basedcapitalguidelines,assetsandcreditequivalentamountsofderivativesandoff-balancesheetexposuresareassignedtobroadriskcategories.Theaggregatedollaramountineachriskcategoryismultipliedbytheassociatedriskweightofthecategory.Theresultingweightedvaluesareaddedtogetherwiththemeasureformarketrisk,resultinginourtotalrisk-weightedassets.

For2018,weperformedabovetargetonourNetProfitandRoRWAgoals.ForpurposesoftheBonusPlan,theCompensationCommitteeconsidered:

» ANetProfitfor2018of$835.3million,whichwasaboveour2018goalNetProfitof$744.4million,and

» ARoRWAfor2018of2.09%,whichwasaboveour2018goalRoRWAof1.97%.FortheRegulatory&Riskmetric,weperformedabovetargetinonecategory,CostofCreditRatio,andonlyslightlybelowtargetintheothercategory,CompletedActionPlansforRegulatoryCommitmentsandWrittenAgreements.OntheCustomers&Employeesmetric,weperformedsignificantlyabovetargetononecategoryandonlyslightlybelowtargetoneachofthethreeothercategories.Asforcapitalcreation,whileperformancewasbelowtarget,ourcapabilitiesin2018continuedtobestrongandshowsignsofimprovinggoinginto2019.

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ThefinalcalculatedscoreoftheBonusPoolbeforetheexerciseofanydiscretionaryadjustmentwas105.8%.TheBonusPoolprovidesthatthisfinalcalculatedscorebeadjustedbythedifferencebetweenourbonusplanscoreandthefinalscoreunderSHUSA’sbonusplan,multipliedby20%.AfterreviewingSHUSA’sbonusplanscore,theCompensationCommitteedeterminedthatanadjustmentof-2.50%wasappropriateunderthisformulaicmodifier.WhilesomeofthemetricsfortheBonusPoolwerebelowtarget,netincomewasstronginanincreasinglycompetitivemarketandourNEOsmadesignificantstridesinachievingtheirindividualgoals,instillingacultureofcomplianceandbalancingrisk/rewardmanagementwithincomeandprofitability.Asnotedabove,theCompensationCommitteemayuseitsdiscretiontoadjustthefinalBonusPoolfundingupordownby25percentagepointsineitherdirection.Accordingly,theCompensationCommitteeinitsdiscretiondeterminedthattheBonusPoolshouldbeincreasedby6.69%andfundedat110%oftargetfor2018,summarizedasfollows:

SC BONUS POOL METRIC

RESULTS

TARGET WEIGHTING

FINAL SCBONUS POOL

Customers & Employees

10%

10.05%

ConsumerCustomerSatisfaction

Slightlybelowtarget

2.50%

2.35%

CCAPDealerLoyalty

Abovetarget

1.25%

1.56%

CoreDealerSatisfaction

Slightlybelowtarget

1.25%

1.24%

EmployeeEngagement

Slightlybelowtarget

5.00%

4.90%

Regulatory & Risk

20%

22.50%

CostofCreditRatio

Abovetarget

10.00%

12.50%

CompletedActionPlansforRegulatoryCommitmentsandWrittenAgreements

Attarget

10.00%

10.00%

Capital

20%

16.43%

ContributiontoGroupCapital

Belowtarget

20.00%

16.43%

Profitability

50%

56.83%

NetProfit

Abovetarget

27.50%

31.63%

RoRWA

Abovetarget

22.50%

25.20%

SHUSA Scorecard Modifier

Applied +/- 20%

-2.50%

Discretionary Adjustment

Exercised +/- 25%

6.69%

TOTAL

110%

Individual Performance Assessments and Award Determinations. Asdescribedabove,ourperformanceresultedinanapprovedfundingof110%oftheBonusPooltarget.ThisBonusPoolpercentageismultipliedbytheapplicabletargetbonusamountofeachexecutiveofficer,includingeachNEO,toestablishaninitialstartingpointforeachexecutive’sannualbonusamount.Eachexecutive’sawardundertheBonusPlanissubjecttoadiscretionaryadjustment,eitherpositiveornegative,basedontheevaluationoftheexecutive’sperformancebytheCompensationCommittee.Innoevent,however,willtheaggregatetotaloftheactualbonusamountsexceedtheaggregatetotaloftheBonusPool.TheCompensationCommitteebelievesthatthisindividualperformancereviewandthesediscretionaryadjustmentsservestockholderinterestsbyprovidingtheCompensationCommitteewithameanstodifferentiatecompensationoutcomesamongourNEOsbasedonthequalityoftheperformanceandleadershipdemonstratedbyeachNEO.TheCompensationCommitteeconductedadetailedevaluationandassessmentofeachNEO’s2018performanceagainstpre-establishedperformancemeasuresthatweretiedtofinancialperformanceandstrategicinitiatives,includingriskandcompliancemeasures.Pleasesee“2018CompensationActions”inthisCD&Afortheadditionalinformationontheindividualperformancegoalsandassessments.


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For2018,followingthereviewofourperformanceandeachNEO’sindividualperformance,theCompensationCommitteeapprovedawardsundertheBonusPlanforeachNEOasfollows:

NEO

2018 BONUS PLAN AWARD($)

TARGET BONUS AWARDED(%)

Scott Powell*

4,250,000

100.00


525,000

102.44

Reza Leaali

500,000

100.00

Richard Morrin

1,000,000

114.78

Sandra Broderick

1,000,000

114.78

* Mr.Powell’s2018fullbonusamountof$4,250,000wasinrecognitionofhisserviceasCEOofbothSHUSAandSC.Asdescribedabovein“CompensationDiscussionandAnalysis—ExecutiveSummary—AllocationofCompensationBetweenSCandSHUSAforMr.Powell,”63%ofthecashandequityportionofMr.Powell’s2018bonuswasallocatedtohisserviceasourCEO.

For2018,awardsundertheBonusPlanwerepayableincashandRSUsasdiscussedbelow.TheseamountswillappearintheSummaryCompensationTableofourproxystatementsoverseveralyearsasfollows:

» TheimmediatelypayablecashamountsoftheBonusPlanawardsarereflectedfor2018inthe“Bonus”columnofthe2018SummaryCompensationTable.

» ThedeferredcashamountsoftheBonusPlanawardsaresubjecttoadditionalvestingrequirementsdiscussedbelowandwillbereflectedinthe“AllOtherCompensation”columnofthesummarycompensationtablesforsubsequentyearstotheextentvestedandpaid.

» TheRSUportionoftheBonusPlanawardswasgrantedundertheOmnibusPlaninMarch2019andwillbereflectedinthe“StockAwards”columnofthesummarycompensationtablefor2019.

Form of Awards: Mix of Current and Deferred Cash and Equity. Asweareacontrolledcompany,ownedindirectlybyBancoSantander,certainofourexecutiveofficers,includingourNEOs,andotheridentifiedstaffaresubjecttoDirective2013/36/EU(“CRDIV”)promulgatedbytheEuropeanParliamentandCounciloftheEuropeanUnion.UnderBancoSantander’sManagementBoardCompensationPolicyandIdentifiedStaffPlan,certainidentifiedstaff,includingallofourexecutiveofficersandallofourNEOs,arerequiredtodeferreceiptofaportionoftheirvariablecompensation(includingallbonusespaidundertheBonusPlan)inordertocomplywithCRDIV.Ultimately,thesepoliciesareintendedtoensurethatannualbonusawardsencouragesustainable,long-termperformanceconsistentwithourriskappetiteandriskmanagementpolicies,andarealignedwithlong-termstockholderinterests.Accordingly,eachNEO’saggregateawardundertheBonusPlanfor2018waspayable50%incash(aportionofwhichwaspaidimmediatelyandaportionofwhichwasdeferred)and50%intheformofstock-settledRSUsand,forMr.Powell,SantanderADRs(aportionofwhichwasvestedandsettledimmediatelyandaportionofwhichwassubjecttovesting).Afterthesharessubjecttotheequityawardsaresettled,theywillremainsubjecttotransferandsalerestrictionsforoneyear.ThefollowingtablereflectstheportionsofeachNEO’sbonusawardfor2018thatwerepayableintheformofcashandequity:

NEO

CASH PORTION OF 2018 BONUS AWARD($)*

EQUITY PORTION OF 2018 BONUS AWARD($)*

Scott Powell**

2,125,000

2,125,000


262,500

262,500

Reza Leaali

250,000

250,000

Richard Morrin

500,000

500,000

Sandra Broderick

500,000

500,000

* TheportionofthetotalawarddeferredisbasedonBancoSantanderpoliciesasimplementedbySC.Underthosepolicies,Mr.Powellhad60%ofhisBonusPlan

awarddeferred,andeachoftheotherNEOshad40%oftheirrespectiveBonusPlanawardsdeferred.

** Mr.Powell’s2018bonusamountwasinrecognitionofhisserviceasCEOofbothSHUSAandSC.Asdescribedabovein“CompensationDiscussionandAnalysis—ExecutiveSummary—AllocationofCompensationBetweenSCandSHUSAforMr.Powell,”63%ofthecashandequityportionofMr.Powell’s2018bonuswasallocatedtohisserviceasourCEO.OftheequityportionofMr.Powell’saward,63%wasgrantedinSCRSUsand37%wasgrantedinBancoSantanderADRs.

Thedeferredportion(whethercashorequity)becomesearnedandvestedannuallyoveravestingperiodoffiveyearsforMr.PowellandthreeyearsfortheotherNEOs.Generally,anexecutivemustremaincontinuouslyemployedwithusthrougheachvestingdate.

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AdditionalcorporateperformancegoalsapplyinorderforMr.Powelltoearnthevestinginstallmentsinyearsthree,four,andfiveandforMr.AlvarezdeSototoearnthevestinginstallmentinyearthree.Theseperformancegoalsfurtherencouragesustainable,long-termperformance.TheremainingNEOsawardsfor2018arenotsubjecttoadditionalperformancegoals.Theperformancemetricsareweighted50%towardsBancoSantanderperformanceand50%towardsSCperformanceandfollowabalanced,“scorecard”approach:

» TheSANgoalsrelateequallyto(1)growthinSANearningspershare(EPS)over2017–2020;(2)SAN’srelativetotalshareholderreturn(“TSR”)over2018–2020;and(3)attainmentbySANofcertaincapitalratiogoalsbyDecember31,2020.

» TheSCgoalsrelateequallyto(1)SCattainingaspecifiedlevelofEPSbyDecember31,2020;(2)SCattainingcertaincapitalratiogoalsbyDecember31,2020;(3)SCattainingaspecifiedlevelofreturnonassetsbyDecember31,2020;and(4)SCattainingaspecifiedlevelofexpenseratiobyDecember31,2020.

Performancebelowtargetgoalsforanycomponentwillresultinreduced,below-targetpayouts,andperformancebelowcertainthresholdgoalswillresultinnopayoutforthecomponent.Noamountgreaterthanthetargetawardcanbeearned.Thepaymentofthedeferredportionofthe2018awardsundertheBonusPlanisconditionedonavoidanceofcertaineventsorconduct,including:(1)ourdeficientfinancialperformance;(2)materialbreachofanyofourmaterialinternalrulesorregulations;(3)materialnegativerestatementofourfinancialstatements(otherthananyrestatementundertakenasaresultofachangeinaccountingstandards);(4)materialnegativechangeinourcapitalizationorriskprofilepriortotheapplicablesettlementdate;and(5)certainotherdetrimentalconduct.Theseconditionsareintendedtofurtherreinforceabusinessculturethatpromotesconductbasedonthehighestethicalstandardsconsistentwithourriskmanagementpolicies.OurNEOshadthefollowingamountsoftheirvariablecompensationfor2018deferredunderthedesigndescribedabove:

NEO

TOTAL($)

CASH DEFERRED($)

EQUITY DEFERRED($)

Scott Powell*

2,550,000

1,275,000

1,275,000


210,000

105,000

105,000

Reza Leaali

200,000

100,000

100,000

Richard Morrin

400,000

200,000

200,000

Sandra Broderick

400,000

200,000

200,000

* Asdescribedabovein“CompensationDiscussionandAnalysis—ExecutiveSummary—AllocationofCompensationBetweenSCandSHUSAforMr.Powell,”63%ofthecashandequityportionofMr.Powell’s2018bonuswasallocatedtohisserviceasourCEO.

Long-Term Incentive CompensationIntroduction. InadditiontodeferredRSUsgrantedasaportionoftheBonusPlanaward,whichareaformoflong-termequityincentive,theCompensationCommitteemay,initsdiscretion,grantadditionallong-termincentiveawardsunderourOmnibusPlan.Theseawardsmaybeintheformofrestrictedstock,RSUs,stockoptions,orotherformsofawardpermittedundertheOmnibusPlan.In2018,RSUsweregrantedtotheCompany’sNEOsundertheOmnibusPlanassetforthbelow:

NAMED EXECUTIVE OFFICER

RSUS GRANTED

Reza Leaali

73,344

Mr.LeaalireceivedtheseRSUsascompensationforcertainlostopportunitieswithhispreviousemployer.TheRSUsvestratablyinfourequalannualinstallments.

SRIPIntroduction. We,inconjunctionwithSHUSA,institutedaSpecialRegulatoryIncentiveProgram,orSRIP,in2017toprovideamulti-yeartargetedawardtiedtoparticipants’statusandstandingatSC,aswellasourgeneralfinancialstabilityandourpassingkeyregulatorymilestones.TheSRIPistailoredtomaximizeincentivesforperformance.Participantsareeligibletoreceiveawardsthattrackthesamepaymentprocedureandtimingasannualbonusawards.SRIPawardsareessentiallyadditionaldiscretionarybonusesforwhichourhigh-performingseniorexecutivesareeligible,contingentuponaccomplishingenterprise-wideperformancegoals.Target Opportunities. UndertheSRIP,wesettotaltargetopportunitiesforeachNEOoverthelifeofthemulti-yearprogram,apercentageofwhichwouldbeatstakeduringseparateperformancecycles.Weset$2,000,000asMr.Powell’stotaltargetaward;$823,250forMr.AlvarezdeSoto;$375,000forMr.Leaali;$1,000,000forMr.Morrin;and$750,000forMs.Broderick.ThetargetawardsforMr.LeaaliandMs.Broderickwerepro-ratedbecausetheywerenoteligibleforthefirstcycleawardedforthe2017performanceyear.


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Performance Cycles. Whileamulti-yearaward,theSRIPisevaluatedincyclesandawardsareevaluatedandsettledonanannualbasis.Likeourannualbonuses,SRIPawardsaremadeearlyintheyearfollowingeachperformanceyear.Forthe2018performanceyear,35%ofthemulti-yeartargetawardwasatstakeforMr.Powell,Mr.AlvarezdeSotoandMr.Morrin.ForMr.LeaaliandMs.Broderick,46.66%oftheirtotaltargetawardwasatstakeforthe2018performanceyearbecause2018wasthefirstcycleforwhichMr.LeaaliandMs.BroderickwereeligibletoreceiveaSRIPaward.ThegoalsfortheNEOstoearn2018SRIPawardsincludedtheachievementof,orsignificantprogresson,certainregulatoryandcompliancegoals.Performance Assessments and Award Determinations. BecauseweachievedtheSRIPgoalsfor2018,theCompensationCommitteegrantedtheNEOstheirrespectiveSRIPawardsfor2018performance,asfollows:

NEO

2018 SRIP AWARD

($)

TARGET SRIP AWARDED (%)

Scott Powell*

700,000

100.00


288,138

100.00

Reza Leaali

175,000

100.00

Richard Morrin

350,000

100.00

Sandra Broderick

350,000

100.00

* Mr.Powell’sfull2018SRIPawardof$700,000wasinrecognitionofhisserviceasCEOofbothSHUSAandSC.Asdescribedabovein“CompensationDiscussionandAnalysis—ExecutiveSummary—AllocationofCompensationBetweenSCandSHUSAforMr.Powell,”63%ofMr.Powell’s2018SRIPawardwasallocatedtohisserviceasourCEO.

Form of Awards: Mix of Current and Deferred Cash and RSUs. Aswithourannualbonuses,inordertocomplywithCRDIV,eachNEO’saggregateawardundertheSRIPfor2018waspayable50%incash(aportionofwhichwaspaidimmediatelyandaportionofwhichwasdeferred)and50%intheformofstock-settledRSUsor,withregardtoMr.Powellinstock-settledSCRSUsandBancoSantanderADRs(aportionofwhichwassettledimmediatelyandaportionofwhichwassubjecttovesting).AfterthesharessubjecttotheRSUsandtheADRsaresettled,theywillremainsubjecttotransferandsalerestrictionsforoneyear.ThefollowingtablereflectstheportionsofeachNEO’sSRIPawardfor2018thatwaspayableintheformofcashandRSUs:

NEO

CASH PORTION OF 2018 SRIP AWARD($)

EQUITY PORTION OF 2018 SRIP AWARD($)

Scott Powell*

350,000

350,000


144,069

144,069

Reza Leaali

87,500

87,500

Richard Morrin

175,000

175,000

Sandra Broderick

175,000

175,000

* Asdescribedabovein“CompensationDiscussionandAnalysis—ExecutiveSummary—AllocationofCompensationBetweenSCandSHUSAforMr.Powell,”63%ofboththecashandequityportionofMr.Powell’s2018SRIPawardwasallocatedtohisserviceasourCEO.OftheequityportionofMr.Powell’s2018SRIP,63%wasgrantedinSCRSUsand37%wasgrantedinBancoSantanderADRs.

TheportionofthetotalSRIPawarddeferredisbasedonBancoSantanderpoliciesasimplementedbySC.Underthosepolicies,Mr.Powellhas60%ofhisSRIPawardsdeferred,andtheotherNEOshave40%oftheirrespectiveSRIPawardsdeferred.ThedeferredportionoftheSRIP(whethercashorRSUs)becomesearnedandvestedannuallyoveravestingperiodoffiveyearsforMr.PowellorthreeyearsforallotherNEOs.Generally,anexecutivemustremaincontinuouslyemployedwithusthrougheachvestingdate.TheadditionalcorporateperformancegoalsapplicabletocertainNEOs’annualbonusesarealsoapplicabletothedeferredportionsofthoseNEOs’SRIPawards.InorderforMr.Powelltoearnthevestinginstallmentsinyearsthree,four,andfiveandinorderforMr.AlvarezdeSototoearnthevestinginstallmentinyearthree,theNEOmustmeetperformancegoals.Theseperformancegoalsfurtherencouragesustainable,long-termperformance.TheotherNEOs’SRIPawardsfor2018arenotsubjecttoperformancegoals.AswithpaymentofthedeferredportionofBonusPlanawards,paymentofthedeferredportionofSRIPawardsisalsoconditionedonavoidanceofcertaineventsorconductbytheexecutive,including:(1)ourdeficientfinancialperformance;(2)materialbreachofanyofourmaterialinternalrulesorregulations;(3)materialnegativerestatementofourfinancialstatements(otherthananyrestatementundertakenasaresultofachangeinaccountingstandards);(4)materialnegativechangeinourcapitalizationorriskprofilepriortotheapplicablesettlementdate;and(5)certainotherdetrimentalconduct.

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OurNEOshadthefollowingamountsoftheirSRIPawardsfor2018deferredunderthedesigndescribedabove:

NEO

TOTAL AMOUNT OF SRIPDEFERRED

($)

SRIP CASH DEFERRED($)

SRIP EQUITY

DEFERRED($)

Scott Powell*

420,000

210,000

210,000


115,255

57,628

57,627

Reza Leaali

70,000

35,000

35,000

Richard Morrin

140,000

70,000

70,000

Sandra Broderick

140,000

70,000

70,000

* Asdescribedabovein“CompensationDiscussionandAnalysis—ExecutiveSummary—AllocationofCompensationBetweenSCandSHUSAforMr.Powell,”63%ofthedeferredportionofMr.Powell’s2018SRIPawardwasallocatedtohisserviceasourCEO.

Other CompensationInadditiontothebenefitsthatallofouremployeesareeligibletoreceive,ourNEOsareeligibletoreceivecertainotherbenefitsandperquisites.For2018,theadditionalbenefitsandperquisitesincludedcompany-paidannualpremiumsforexecutivedisabilitybenefits.Thesebenefitsandperquisitesaregenerallyconsistentwiththosepaidtooursimilarlysituatedexecutives.

Retirement BenefitsEachofourNEOsiseligibletoparticipateinourqualifieddefinedcontributionretirementplan(the“401(k)Plan”)underthesametermsasourothereligibleemployees,includingwithrespecttotheSCmatchingcontributionunderthe401(k)Plan.WeprovidethesebenefitsinordertofosterthedevelopmentofourNEOs’long-termcareerswithSC.Wedonotprovidedefinedbenefitpensionbenefits,ornonqualifiedorexcessretirementbenefitstoanyofourNEOs.

Employment Agreements and Severance PolicyWehaveenteredintoemploymentagreementsandofferletterswithcertainofourNEOs,establishingkeyelementsofcompensationinadditiontoourgenerallyapplicableplansandprograms,whichincludecertainrestrictivecovenants,suchasthoseprohibitingpost-employmentcompetitionorsolicitation.WealsohaveimplementedSHUSA’sEnterpriseSeverancePolicy,whichprovidespost-terminationbenefitsforeligibleemployees,includingcertainofourNEOs,whodonototherwisehaveanycontractualrighttoseverancebenefits.WebelievethattheseagreementsprovidestabilitytoSCandfurthertheobjectivesofourcompensationprograms,includingourobjectiveofattractingandretainingthehighestqualityexecutivestomanageandleadus.Pleasesee“Compensation—PotentialPaymentsuponTerminationorChangeinControl”inthisProxyStatementforadditionalinformationregardingourNEOemploymentagreements,offerlettersandseverancepolicies.

CLAWBACK POLICYWemaintainarobustPolicyonMalusandClawbackRequirements(the“ClawbackPolicy”).TheClawbackPolicycontainsaframeworkunderwhichwewillimplementintoourincentivecompensationarrangements(1)provisionsthatcancauseunvestedcompensationtobereducedorforfeitedduringtheapplicablevestingperiod(oftenreferredtoas“malus”provisions)and(2)provisionsthatcancausepreviouslyearnedandpaidcompensationtoberepaid(oftenreferredtoas“clawback”provisions).Malusandclawbackprovisionsserveseveralpurposes,suchasensuringthatourincentivecompensationawardsarebasedonsustainable,appropriate,andcompliantperformance;thatsuchperformanceisachievedconsistentlywithinapplicableriskframeworks;andthatouremployeesarediscouragedfrommanipulatingperformanceorfinancialmetricsorengaginginotherbehaviorsthatcouldadverselyimpactus.EmployeescoveredbytheClawbackPolicyinclude,ataminimum:(1)employeesoremployeegroupsidentifiedas“coveredemployees”undertheGuidanceonSoundIncentiveCompensationPoliciesadoptedbyU.S.bankingagencies,(2)employeesdeterminedtobe“identifiedstaff”underCRDIV,and(3)anyotheremployeeswhoreceiveincentivecompensationawardsthattheCompensationCommitteedeterminesshouldbesubjecttomalusorclawbackrequirements.IncentivecompensationcoveredbytheClawbackPolicywillinclude,ataminimum:(1)“incentivecompensationarrangements”withinthemeaningoftheGuidanceonSoundIncentiveCompensationPolicies,(2)“variableremuneration”withinthemeaningofCRDIV,and(3)anyotherincentivecompensationarrangementsthattheCompensationCommitteedeterminesshouldbecoveredbymalusorclawbackrequirements.


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TheClawbackPolicyrequiresourapplicableincentivecompensationagreementstoreflectalldesignfeaturesofanymalusandclawbackrequirements,includingtriggeringevents,coveredemployees,andtimeperiodsduringwhichcompensationmaybesubjecttomalusandclawbackprovisions.Allofourmalusandclawbackrequirementsareintendedtobeenforceabletothemaximumextentpermittedbyapplicablelaw.UndertheClawbackPolicy,malusprovisionsinclude,ataminimum,thefollowingtriggeringevents:(1)“detrimentalconduct”(asdescribedbelow),(2)breachofpost-employmentcovenants,and(3)themalustriggeringeventsrequiredbyBancoSantander’sremunerationpoliciesasineffectfromtimetotime,whichcurrentlyincludethefollowingcategoriesofevents:

» Significantriskmanagementfailuresatorbyus,orbyabusinessunitorcontrolorsupportfunctionofours;

» Materialrestatementofourfinancialstatements,exceptwhenappropriateduetoachangeinaccountingstandards;

» Violationbythebeneficiaryofinternalregulations,policies,orcodesofconduct;

» SignificantchangesinthefinancialcapitalorriskprofileofBancoSantander;

» Significantincreasesinrequirementstooureconomicorregulatorycapitalbasewhennotforeseenatthetimeofgenerationofexposures;

» Regulatorysanctionsorcriminalconvictionsforactsthatcouldbeattributabletousortothepersonnelresponsiblefortheacts;

» Anymisconduct,whetherindividualorcollective,inparticularwithrespecttomarketingofunsuitableproducts;and

» PoorfinancialperformanceofBancoSantander.ThemalustriggeringeventsundertheClawbackPolicyarenotlimitedtotheforegoingandwillbecustomizedandadjustedasappropriate.UndertheClawbackPolicy,clawbackprovisionsinclude,ataminimum,thefollowingtriggeringevents:(1)“detrimentalconduct”(asdescribedbelow),(2)breachofpost-employmentcovenants,and(3)breachofapplicableanti-hedgingpolicies.TheclawbacktriggeringeventsundertheClawbackPolicyarenotlimitedtotheforegoingandwillbecustomizedandadjustedasappropriate.“Detrimentalconduct”undertheClawbackPolicyreferstocategoriesofemployeeconductspecifiedinincentivecompensationagreementsthatmaytriggerarighttoapplymalusorclawbackprovisionsagainsttheemployee.ThefollowinglistscategoriesofconductthatareconsidereddetrimentalconductundertheClawbackPolicy:

» Anemployee’sconductthatwouldpermitustoterminatetheemployeefor“cause”;

» Anemployee’scommissionofacriminalactthatvictimizesusoracustomer,employee,orcounterpartyofoursorsubjectsustopublicridiculeorembarrassment;

» Improperorintentionalconductbyanemployeecausingreputationalharmtousorourcustomers;

» Anemployee’sbreachofafiduciarydutyowedtousoracustomerorformercustomerofours;

» Anemployee’sintentionalviolationof,orgrosslynegligentdisregardfor,ourpolicies,rules,orprocedures,includinginconnectionwiththesupervisionoroversightofotheremployees;or

» Anemployeetakingormaintainingtradingpositions,orexecutinghisorherdutiesorresponsibilitiesinamannerthatresultsinaneedtorestatefinancialresultsinasubsequentreportingperiodorthatresultsinasignificantfinanciallosstous.

TheClawbackPolicyisadministeredbyourChiefHumanResourcesOfficer,withtheadviceofourexecutive-levelmanagementhumanresourcescommittee,subjecttooversightandgovernancebyourCompensationCommittee.

TAX CONSIDERATIONSU.S.InternalRevenueCodeSection162(m)limitsthedeductibilityofcompensationinexcessof$1millionpaidtocertain“coveredemployees”inanycalendaryear.Underthetaxrulesineffectbefore2018,compensationthatqualifiedas“performance-based”underSection162(m)wasdeductiblewithoutregardtothis$1millionlimit.However,theTaxCutsandJobsActeliminatedthisperformance-basedcompensationexceptioneffectiveJanuary1,2018,subjecttoaspecialrulethat“grandfathers”certainawardsandarrangementsthatwereineffectonorbeforeNovember2,2017.Asaresult,compensationthatourCompensationCommitteestructuredin2017andprioryearswiththeintentofqualifyingasperformance-basedcompensationunderSection162(m)thatispaidonorafterJanuary1,2018maynotbefullydeductible,dependingontheapplicationofthespecialgrandfatherrules.Moreover,fromandafterJanuary1,2018,compensationawardedinexcessof$1milliontocertain“coveredemployees”generallywillnotbedeductible.WhiletheTaxCutsandJobsActmaylimitthedeductibilityofcompensationpaidtocertain“coveredemployees,”ourCompensationCommitteewill—consistentwithitspastpractice—continuetoretainflexibilitytodesigncompensationprogramsthatareinthebestlong-terminterestsoftheCompanyandourstockholders,withdeductibilityofcompensationbeingoneofavarietyofconsiderationstakenintoaccount.

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COMPENSATION RISK ASSESSMENTAtleastannually,theCompensationCommitteeconductsanassessmentofthecompensationpoliciesandpracticesforouremployees,includingourexecutiveofficers,andwhethersuchpoliciesandpracticescreaterisksthatarereasonablylikelytohaveamaterialadverseeffectonus.Ourmanagementcompensationteamandanexecutive-levelmanagementhumanresourcescommitteeassisttheCompensationCommitteewithsuchriskassessmentandhelpensureourcompensationprogramsalignwithourgoalsandcompensationphilosophiesand,alongwithotherfactors,operatetomitigateagainsttheriskthatsuchprogramswouldencourageexcessiverisk-taking.Webelieveourcompensationprogramsstriketheappropriatebalancebetweenshort-termandlong-termcomponents.Weconsiderthepotentialrisksinourbusinesswhendesigningandadministeringourcompensationprograms,andwebelieveourbalancedapproachtoperformancemeasurementandcompensationdecisionsworkstomitigatetheriskthatindividualswillbeencouragedtoundertakeexcessiveorinappropriaterisk.Ourcompensationprogramisalsosubjecttointernalcontrols,andwerelyonprinciplesofsoundgovernanceandgoodbusinessjudgmentinadministeringourcompensationprograms.Basedonitsassessment,theCompensationCommitteehasdetermined,initsreasonablebusinessjudgment,thatourcompensationpoliciesandpracticesasgenerallyapplicabletoourexecutiveofficersandemployeesdonotcreaterisksthatarereasonablylikelytohaveamaterialadverseeffectonusandinsteadpromotebehaviorsthatsupportlong-termsustainabilityandstockholdervaluecreation.

COMPENSATION COMMITTEE REPORTTheCompensationCommitteehasreviewedthisCD&AasrequiredbyItem402(b)ofRegulationS-KanddiscusseditwithSC’smanagement.Basedonsuchreviewanddiscussionswithmanagement,theCompensationCommitteehasrecommendedtotheBoardthatthisCD&AbeincludedinthisProxyStatement.

Submitted by the Compensation Committee:Edith E. Holiday, ChairStephen A. FerrissJavier MaldonadoRobert J. McCarthy


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COMPENSATION - EXECUTIVE COMPENSATION TABLES

EXECUTIVE COMPENSATION TABLESSummary Compensation TableThefollowingtablesetsforththecompensationfor2018foreachindividualwhoservedasourChiefExecutiveOfficerorChiefFinancialOfficerduring2018,andourthreeothermosthighlycompensatedexecutiveofficerswhowereservingasexecutiveofficersonDecember31,2018.TheseofficersarereferredtothroughoutthisProxyStatementasour“NEOs.”Compensationinformationfor2017and2016ispresentedforindividualswhowerealsoourNEOsinthoseyears.

NAME AND PRINCIPALPOSITION YEAR SALARY

($) (2)BONUS($) (3)

STOCK AWARDS

($) (4)

ALL OTHER

COMPENSATION($) (5)

TOTAL ($)

Scott Powell (1)PresidentandChiefExecutiveOfficer

2018 1,875,000 623,700 723,724 37,640 3,260,0642017

455,400 164,798 — — 620,198

Juan Carlos Alvarez de SotoChiefFinancialOfficer

2018 1,000,000 243,941 128,202 28,590 1,400,7332017

250,000 76,936 — 11,136 338,072

Reza LeaaliChiefTechnologyOfficer

2018 442,308 442,500 1,182,305 199,529 2,266,642

Richard MorrinPresident,ChryslerCapitalandAutoRelationships

2018 850,000 405,000 517,049 127,586 1,899,635 2017 770,911 310,238 357,499 69,932 1,508,5802016

531,923 214,500 765,372 43,772 1,555,567

Sandra BroderickHeadofOperations

2018 850,000 555,000 435,611 141,955 1,982,566

(1)ForinformationontheaggregatecompensationthatSCandSHUSApaidMr.Powellforhisservicestoourrespectivecompanies,pleaseseeSHUSA’sAnnualReportonForm10-KforthefiscalyearendedDecember31,2018.

(2)Theamountsinthiscolumnreflectbasesalaryearnedduringtheyear.

(3)Theamountsinthiscolumnincludethenon-deferredcashportionoftheannualbonusearnedundertheBonusPlan,aswellasthenon-deferredcashportionofawardsearnedundertheSRIP.Pleasesee“CompensationDiscussionandAnalysis—PrincipalComponentsofExecutiveCompensation—AnnualBonuses”and“CompensationDiscussionandAnalysis—PrincipalComponentsofExecutiveCompensation—SRIP”foradditionalinformation.Inaddition,forMr.Leaali,thiscolumnincludesa$240,000cashsign-onbonusandforMs.Broderick,thiscolumnincludesa$150,000installmentofhersign-onbonusgrantedpursuanttoherSeptember2017offerletter.

(4)Theamountsinthiscolumnrepresenttheaggregategrantdatefairvalueoftheawardsdetailedunder“2018GrantsofPlan-BasedAwards”inthisProxyStatement,whichconsistedofMr.Leaali’ssign-onbonusand,fortheotherNEOs,RSUawardsgrantedinearly2018astheequityportionofannualbonusesgrantedforperformancein2017.SECrulesrequiretheSummaryCompensationTabletoincludeineachyear’samounttheaggregategrantdatefairvalueofstockawardsgrantedduringtheyear.Typically,wegrantRSUawardsearlyintheyearaspartoftheannualbonusawardforprioryearperformance.Asaresult,theamountsforRSUawardsgenerallyappearintheSummaryCompensationTablefortheyearaftertheperformanceyearuponwhichtheywerebasedand,therefore,theSummaryCompensationTabledoesnotfullyreflecttheCompensationCommittee’sviewofitspay-for-performanceexecutivecompensationprogramforaparticularperformanceyear.Forexample,amountsforMr.Powell,Mr.AlvarezdeSoto,Mr.MorrinandMs.Broderickshownas2018compensationinthe“StockAwards”columnreflectRSUawardsgrantedinMarch2018for2017performance.Pleasesee“CompensationDiscussionandAnalysis—PrincipalComponentsofExecutiveCompensation”foradiscussionabouthowtheCompensationCommitteeviewedits2018compensationdecisionsforourNEOs.

ThegrantdatefairvalueofthestockawardsincludedintheSummaryCompensationTablerepresentstheaggregategrantdatefairvaluecomputedinaccordancewithFASBASCTopic718,basedontheclosingpriceofourCommonStockontheapplicablegrantdate,butexcludingtheeffectofpotentialforfeitures.Additionaldetailsonaccountingforequity-basedcompensationcanbefoundinNote1(“DescriptionofBusiness,BasisofPresentation,andSignificantAccountingPoliciesandPractices—Stock-BasedCompensation”)andNote16(“EmployeeBenefitPlans”)ofourconsolidatedfinancialstatementsfiledwiththeSEConForm10-KforthefiscalyearendedDecember31,2018.

(5)Theamountsinthiscolumnforthemostrecentyeararedetailedbelowunderthe“AllOtherCompensationTable.”Theamountsinthiscolumnincludelong-termcashawardsgrantedinprioryearsasthedeferredcashportionofannualbonusawardsundertheBonusPlanthatbecameearnedandvestedintheapplicableyear.

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All Other Compensation Table

NAMESC

CONTRIBUTION TO 401( k ) PLAN

($)

LIFE & DISABILITY BENEFITS

($) ( a)

HOUSING & RELOCATION

EXPENSES($) ( b )

TAXPAYMENTS

($) ( c )

DEFERRED ANNUAL

VARIABLE COMPENSATION

($) ( d )

TOTAL($)

Scott Powell

— — — 37,640 — 37,640

Juan CarlosAlvarez de Soto

16,500 9,146 — 2,944 — 28,590

Reza Leaali

10,385 — 189,144 — — 199,529

Richard Morrin

16,500 7,916 — 2,549 100,621 127,586

Sandra Broderick

— 10,392 52,867 78,696 — 141,955

(a)AmountrepresentstheannualpremiumspaidbySCforNEOexecutivelifeanddisabilitybenefitsforMr.AlvarezdeSoto,Mr.MorrinandMs.Broderick.

(b)RepresentsrelocationbenefitsgrantedtoMr.LeaaliandMs.Broderickpursuanttotheirrespectiveofferletters,whichincludedhomesaleorleasebuyoutassistance,householdgoodsshipping,andreimbursementofcertainotherrelocationexpenses.

(c)ReflectspaymentsprovidedtoMr.PowelltocovertaxesincurredoncertainhousingcostspaidbytheCompany,paymentsprovidedtoMs.Brodericktocoverthetaxesincurredontherelocationbenefitsdescribedinthistable,paymentstocoverthetaxesontheexecutivelifeanddisabilitybenefitsforMr.AlvarezdeSoto,Mr.MorrinandMs.Broderick,andataxgross-upprovidedonthesign-oncashbonusinstallmentthatwaspaidtoMs.Broderickperthetermsofherofferletter.

(d)Reflectstheamountoflong-termcashawardsgrantedinprioryearsasthedeferredcashportionofannualbonusawardsundertheBonusPlanthatbecameearnedandvestedin2018.Pleasesee“CompensationDiscussionandAnalysis—PrincipalComponentsofExecutiveCompensation—AnnualBonuses”foradditionalinformation.

2018 Grants of Plan-Based AwardsThefollowingtableprovidesinformationregardingplanawardsgrantedtoourNEOsin2018.Pleaseseethe“OutstandingEquityAwardsatFiscalYear-End”tablebelowforadditionalinformationregardingthevestingparametersthatareapplicabletotheseawards.

NAME

GRANT

DATE

ALL OTHER STOCK AWARDS: NUMBER OFSHARES OF STOCK OR UNITS

(#) (1)

GRANT DATE FAIR VALUE OF STOCKAWARDS

($) (2)

Scott Powell

3/1/18

44,896

723,724


3/1/18

7,953

128,202

Reza Leaali

3/1/18

73,344

1,182,305

Richard Morrin

3/1/18

32,075

517,049

Sandra Broderick

3/1/18

27,023

435,611

(1)Alloftheplan-basedawardsthatwegrantedtoourNEOsin2018wereRSUs.ForRSUsgrantedundertheBonusPlantoMr.AlvarezdeSoto,Mr.MorrinandMs.BroderickonMarch1,2018,60%vestedandweresettledimmediatelyandtheremainderwillvestandbesettledinthreeequalinstallmentsonthefirstthreeanniversariesofthegrantdate.ForRSUsgrantedundertheBonusPlantoMr.PowellonMarch1,2018,50%vestedandweresettledimmediatelyandtheremainderwillvestandbesettledinfiveequalinstallmentsonthefirstfiveanniversariesofthegrantdate,withvestinginstallmentsonMarch1,2020,2021,and2022contingentonachievementofcertainperformancegoals.RSUsgrantedtoMr.LeaalionMarch1,2018aspartofaone-timesign-onbonuswillvestinequalinstallmentsonthefirstfouranniversariesofthegrantdate.

(2)ThiscolumnshowstheaggregategrantdatefairvalueofRSUsgrantedtoourNEOsin2018,whichiscalculatedbasedontheclosingpriceofourCommonStockontheNYSEonthegrantdate($16.12onMarch1,2018).Generally,theaggregategrantdatefairvalueistheamountthatSCexpectstoexpenseinitsfinancialstatementsovertheaward’svestingschedule.


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Outstanding Equity Awards at Fiscal Year-EndThefollowingtableprovidesinformationregardingalloutstandingequityawardsheldbyourNEOsasofDecember31,2018.VestingofoptionandstockawardsreflectedinthetableisgenerallysubjecttocontinuousservicewithSC,exceptthatawardsmayvest(orcontinuetovest)uponterminationbyuswithout“cause,”terminationbytheofficerfor“goodreason,”orterminationduetotheofficer’s“disability”ordeath(ineachcaseasdefinedintheapplicableawardagreement).Theterminationvestingprovisionsgenerallyarecoveredinthefootnotesbelow.VestingofawardsmayalsobeimpactedbyachangeincontrolofSC,asmorefullydescribedin“Compensation—PotentialPaymentsuponTerminationorChangeinControl—EquityCompensationPlans”inthisProxyStatement.

OPTION AWARDS

STOCK AWARDS

NAME

NUMBER OF SECURITIES

UNDERLYING UNEXERCISED

OPTIONS(#)

EXERCISABLE

OPTION EXERCISE PRICE ($)

OPTION EXPIRATION

DATE

NUMBER OF

SHARES OR

UNITS OF STOCKTHAT HAVE NOT

VESTED(#)

MARKET VALUE

OF SHARES

OR UNITS OF

STOCK THAT HAVE NOT

VESTED($) (a)

EQUITY INCENTIVE

PLAN AWARDS: NUMBER

OF UNEARNED

SHARES, UNITS, OR

OTHER RIGHTS

THAT HAVE NOT VESTED (#)

EQUITY INCENTIVE

PLAN AWARDS: MARKET

OR PAYOUT VALUE OF UNEARNED

SHARES, UNITS, OR

OTHER RIGHTS

THATHAVE NOT

VESTED($) (a)

Scott Powell

—

—

—

8,978(b)

157,944

13,470(b)

236,916


— — — 2,121(b) 37,308 1,060 18,645

Reza Leaali

—

—

—

73,344(c)

1,290,121

—

—

Richard Morrin

85,982

9.21 12/31/21 18,038(d) 317,288 — — — — — 2,840(e) 49,956 — — — — — 6,378(f) 112,189 — — — — — 12,830(b) 225,680 — —

—

— — — — 5,172(g) 90,975

Sandra Broderick

—

—

—

10,809(b)

190,130

—

—

Notes Relating to Stock Awards (all granted under the Omnibus Plan)

(a)ThemarketvalueofthestockawardsorunitsisbasedontheclosingpricepershareofourCommonStockontheNYSEonDecember31,2018,whichwas$17.59.

(b)ReflectsRSUsgrantedonMarch1,2018insettlementofthedeferredstockportionoftheNEO’s2017annualbonus.Mr.AlvarezdeSoto’s,Mr.Morrin’sandMs.Broderick’soutstandingRSUsvestinequalinstallmentsonMarch1,2019,2020and2021.Mr.Powell’soutstandingRSUsvestinequalinstallmentsonMarch1,2019,2020,2021,2022and2023,withvestinginstallmentsonMarch1,2021,2022and2023contingentonachievementofcertainperformancegoals.AllRSUscontinuetovestundertheiroriginalscheduleintheeventofterminationbyuswithoutcause,terminationbytheNEOforgoodreason,orterminationduetodisabilityordeath.

(c)ReflectsRSUsgrantedtoMr.LeaalionMarch1,2018asasign-onbonus.TheseoutstandingRSUsvestinequalinstallmentsonMarch1,2019,2020,2021and2022.TheRSUscontinuetovestundertheiroriginalscheduleintheeventofterminationbyuswithoutcause,terminationbytheNEOforgoodreason,orterminationduetodisabilityordeath.

(d)ReflectsRSUsgrantedtoMr.MorrinonMarch29,2016asaretentionaward.TheseremainingRSUsvestonMarch29,2019.TheRSUsalsovestfullyifweterminateMr.Morrin’semploymentwithoutcause,ifheterminateshisemploymentforgoodreason,orifhisemploymentterminatesduetohisdisabilityordeath.

(e)ReflectsRSUsgrantedonApril5,2016insettlementofthedeferredstockportionoftheNEO’s2015annualbonus.TheseremainingRSUsvestonApril5,2019.AllRSUscontinuetovestundertheiroriginalscheduleintheeventofterminationbyuswithoutcause,terminationbytheNEOforgoodreason,orterminationduetodisabilityordeath.

(f)ReflectsRSUsgrantedonMarch1,2017insettlementofthedeferredstockportionoftheNEO’s2016annualbonus.TheoutstandingRSUsvestinequalinstallmentsonMarch1,2019and2020.AllRSUscontinuetovestundertheiroriginalscheduleintheeventofterminationbyuswithoutcause,terminationbytheNEOforgoodreason,orterminationduetodisabilityordeath.

(g)ReflectsPSUsgrantedonNovember1,2016aspartoftheSANPerformanceAwardprogramfor2016.ThePSUsvestinoneinstallmentonMarch15,2019basedonSAN’sachievementofanumberofperformanceconditionsrelatedtoearningspershare(25%ofthePSUs),returnontangibleequity(25%ofthePSUs),employeesatisfaction(20%ofthePSUs),customersatisfaction(15%ofthePSUs),individualcustomerloyaltygoals(7.5%ofthePSUs),andcorporatecustomerloyaltygoals(7.5%ofthePSUs).AllPSUscontinuetovestundertheiroriginalscheduleandsubjecttotheiroriginalperformanceconditionsintheeventofterminationbyuswithoutcause,terminationbytheNEOforgoodreason,orterminationduetodisabilityordeath.

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2018 Option Exercises and Stock VestedThefollowingtableprovidesinformationregardingtheexerciseofstockoptionsbyourNEOsandsharesacquiredbyourNEOsuponthevestingofstockawardsin2018.

NAME

OPTION AWARDS

STOCK AWARDS

TOTAL VALUE REALIZED ON

EXERCISE AND VESTING

($)

NUMBER OF SHARES ACQUIRED ON EXERCISE

(#)

VALUE REALIZED ON EXERCISE

($) (1)

NUMBER OF SHARES ACQUIRED ON VESTING

(#)

VALUE REALIZED ON VESTING

($) (2)

Scott Powell

— — 22,448 361,862 361,862

Juan CarlosAlvarez de Soto

— — 4,772 76,925 76,925

Reza Leaali

— — — — —

Richard Morrin

41,048 423,342 755 12,442 —18,112 133,243 18,038 294,019 — — — 2,839 46,474 — — — 3,188 51,391 —

—

—

19,245

310,229

—

Totals

59,160 556,585 44,065 714,555 1,271,140

Sandra Broderick

—

—

16,214

261,370

261,370

(1)AmountsreflecttheaggregatedifferencebetweenthemarketpriceofourCommonStockattheexercisedateandtheexercisepriceoftheoptions.

(2)AmountsreflectthemarketvalueofourCommonStockonthedayonwhichthestockawardsvested.

POTENTIAL PAYMENTS UPON TERMINATIONOR CHANGE IN CONTROLEquity Compensation PlansWeoriginallyadoptedourcurrentequitycompensationplan,theOmnibusPlan,onDecember28,2013,andwerestatedtheOmnibusPlaneffectiveJune16,2016,withtheapprovalofourstockholders.ForOmnibusPlanawardsgrantedbeforeJune16,2016,intheeventofachangeincontrol(asdefinedintheplan)ofSC,unlessotherwiseprovidedbytheCompensationCommittee:(1)alltime-vestingoptionswillbecomefullyexercisable,(2)alltime-vestingrestrictedstockawardsandRSUswillbecomefullyvested,and(3)allperformance-vestingawardswillbecomevestedtotheextentthattheapplicableperformancetargetsaremetthroughthedateofthechangeincontrol.ForOmnibusPlanawardsgrantedonorafterJune16,2016,intheeventofachangeincontrol(asdefinedintherestatedplan)ofSC,(1)awardsgrantedtonon-employeedirectorswillfullyvest,and(2)forawardsgrantedtoallotherserviceproviders,vestingwilldependonwhethertheawardsareassumed,converted,orreplacedbytheresultingentity:

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

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

AllawardsundertheOmnibusPlanarealsosubjecttoanychangeincontrolandemploymentterminationprovisionscontainedinapplicableawardagreementsandemploymentagreements.Pleaseseethefootnotestothe“Compensation—ExecutiveCompensationTables—OutstandingEquityAwardsatFiscalYear-End”tableofthisProxyStatementforinformationregardingvestingofoutstandingequityawardsuponterminationofemployment.


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Employment AgreementsWearepartytoemploymentagreementswithMr.PowellandMr.Morrin.Theagreementsprovidetheapplicableexecutivewithpaymentsandbenefitsintheeventofaterminationofemploymentunderthevariouscircumstancesdescribedbelow.Mr.AlvarezdeSoto,Ms.BroderickandMr.Leaaliallreceivedofferlettersinconnectionwiththeiremployment,whichprovidebasictermssuchasbasesalaryandbonuseligibility,at-willemploymentstatusterminableatwillbyeitherparty,andrestrictivecovenants.Theiragreementsdonotprovideforseverancebenefitsinthecontextofterminationorachangeincontrol,andsoarenotdiscussedinthissection.AchangeincontroldoesnotaffectthetimingoramountofseverancepaymentstoanyofourcurrentlyemployedNEOsundertheiremploymentagreements.

Employment Agreement with Scott Powell and Richard MorrinSHUSAenteredintoanemploymentletteragreementwithMr.PowelldatedSeptember14,2018relatingtohisemploymentresponsibilitiesforus,SHUSA,andSantanderduringtheperiodfromJanuary1,2018—December31,2019.TheagreementsetsMr.Powell’ssalaryfor2018at$3millionandhistargetbonusfor2018at$4.25million.UnderMr.Powell’semploymentletteragreement,ifheisterminatedbyusorbySHUSAwithoutcause(asdefinedintheagreement)orifheterminatesemploymentwithusorwithSHUSAforgoodreason(asdefinedintheagreement),hewillbeentitledtothefollowing:

» Alumpsumpaymentequalto12monthsofbasesalary;

» Apro-ratabonusforthetimeworkedduringtheyearsubjecttotreatmentasvariablecompensationunderCRD-IV;and

» Providedheiswillingtoprovidecontinuedservicesonaconsultingbasisasnecessaryinordertoassistfuturemanagementwithasmoothtransitionofhisresponsibilities,continuedvesting(andpayment)ofallunvesteddeferredvariablecompensationonthesamescheduleasifhehadremainedemployedfortheremainderofthedeferralperiod.

Mr.Powellissubjecttothefollowingrestrictivecovenantsunderhisemploymentletteragreement:

» Perpetualnondisclosureofconfidentialinformation;

» Non-solicitationduringemploymentandforoneyearafter;

» Non-competitionduringemploymentandforoneyearafter;and

» Perpetualnon-disparagementofus.WeenteredintoanemploymentagreementwithMr.MorrinonAugust24,2011,whichsetforththetermsandconditionsofhisemploymentwithus.Theemploymentagreementhadaninitialtermofthreeyears,whichhaspassed,andautomaticallyextendsannuallyforadditionalone-yearterms,unlesseitherpartyprovidesnoticeofnon-renewalatleastthreemonthspriortotheextensiondate.Mr.Morrinwillbeentitledtothefollowingunderhisemploymentagreementifterminatedbyuswithoutcause(asdefinedintheagreement)(butexcludingterminationduetodeathordisability)oruponresignationbecauseofareductioninbasesalaryortargetbonusopportunity,ineachcasesubjecttotheexecutionofageneralreleaseandwaiverinfavorofSC.

» 12monthsofsalarycontinuation;

» Fullannualperformancebonusforthecalendaryearinwhichtheterminationofemploymentoccurs;

» Certaindeferredbonuspayments;

» Acceleratedvestingandsettlementofequity-relatedawards;and

» 12monthsofcontinuedmedical,dental,andlifeinsurancecoverage.Mr.Morrinwillbeentitledtothefollowingunderhisemploymentagreementifhisemploymentterminatesduetodisability(asdefinedintheagreement):(1)participationinourshort-termsalarycontinuationprogramfor13weeks;(2)subsequentparticipationinourlong-termandindividualdisabilityinsuranceprogramunderitsterms;and(3)proratedannualbonusesfortheyearofterminationand,incertaincases,forsubsequentyears.Mr.Morrin’sbeneficiariesorestatewillbeentitledtothefollowingunderhisemploymentagreementifhisemploymentterminatesduetodeath:

» 12monthsofsalarycontinuation;

» Fullannualperformancebonusforthecalendaryearinwhichtheterminationofemploymentoccurs;

» Certaindeferredbonuspayments;and

» 12monthsofcontinuedmedicalanddentalinsurancecoverage.Mr.Morrinissubjecttothefollowingrestrictivecovenantsunderhisemploymentagreement:

» Perpetualconfidentiality;

» Non-solicitationofouremployeesandouraffiliateemployeesduringemploymentandforoneyearafter;

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» Non-competitionduringemploymentandforanyperiodwhilereceivingseverancepaymentsundertheagreement;

» Cooperationinthecontextoflitigationinvolvingouraffiliatesorusduringemploymentandforthependencyofanysuchlitigationorotherproceeding;and

» Perpetualnon-disparagementofus,ouraffiliates,andourofficersanddirectorsandouraffiliates’officersanddirectors.

Severance PolicyIntheeventofaqualifyingtermination,eachNEO,includingMr.AlvarezdeSoto,Ms.BroderickandMr.Leaali,areeligibleforseverancebenefitspursuanttotheSantanderHoldingsUSA,Inc.EnterpriseSeverancePolicy(the“SeverancePolicy”).TheSeverancePolicyprovidesseverancebenefitstoemployeeswhosepositionsareinvoluntarilyterminated(“eligibleemployees”).PursuanttotheSeverancePolicy,aneligibleemployeewouldbeentitledtoalumpsumcashseverancepaymentequaltothreeweeksofbasesalaryforeachyearofservicewiththeSantandergroup,subjecttoaminimumseverancepaymentofthirteenweeksofbasesalaryandamaximumseverancepaymentoffifty-twoweeksofbasesalary.Inaddition,eligibleemployeeswhoelecttocontinuetheirmedical,dentaland/orvisionbenefitsunderCOBRAwillbeeligibleforfullysubsidizedpremiumsforthefirstninetydaysfollowingtheirterminationofemployment.Asaresultoftheiryearsofservicethroughtheendof2018(includingMr.AlvarezdeSoto’sservicewithSHUSA,BancoSantanderandSantanderCentralHispanoSuisse),Mr.AlvarezdeSotowouldhavebeeneligibleforthemaximumseverancebenefitundertheSeverancePolicywhileMs.BroderickandMr.Leaaliwouldhavebeenentitledtotheminimumseverancebenefit.


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Table Illustrating Potential Payments upon Termination or Change in ControlThefollowingtableprovidesinformationregardingthepaymentsandbenefitstowhichourNEOswouldbeentitledintheeventofterminationofsuchindividual’semploymentwithSCunderspecifiedcircumstancesandintheeventofachangeincontrolofSC.Exceptasotherwisenoted,theamountsshown(1)areestimatesonlyand(2)assumethattheapplicableterminationofemploymentwaseffective,orthatthechangeincontroloccurred,asofDecember31,2018.

NAME

CASH ($)

EQUITY ($) (1)

PERQUISITES/BENEFITS ($)

TOTAL ($)

Scott Powell Termination due to death

—

394,860

—

394,860

Termination due to disability

—

394,860

—

394,860

Termination by SC without cause

5,158,298(2)

394,860

—

5,553,158

Termination by NEO for good reason

5,158,298(2)

394,860

—

5,553,158

Change in control (no termination)

—

—

—

—

Juan Carlos Alvarez de Soto (3) Termination due to death

—

55,954

1,500,000(4)

1,555,954


—

55,954

—

55,954


1,000,000

55,954

3,813(5)

1,059,767


—

55,954

—

55,954


—

—

—

—

Richard Morrin Termination due to death

2,531,911(6)

796,088

1,013,423(4)

4,341,422


969,411(7)

796,088

—

1,765,500


2,531,911(6)

796,088

20,120(5)

3,348,120


331,911(8)

796,088

—

1,128,000


—

367,244

—

367,244

Sandra Broderick (3) Termination due to death

—

190,130

1,000,000(4)

1,190,130


—

190,130

—

190,130


212,500

190,130

2,901(5)

405,531


—

190,130

—

190,130


—

—

—

—

Reza Leaali (3) Termination due to death

—

1,290,121

1,350,000(4)

2,640,121


—

1,290,121

—

1,290,121


125,000

1,290,121

6,433(5)

1,421,554


—

1,290,121

—

1,290,121


—

—

—

—

(1)Representsthevalueofacceleratedvestingofoptionawardsandstockawards.Pleaseseethefootnotestothe“OutstandingEquityAwardsatFiscalYear-End”tableofthisProxyStatementforinformationregardingvestinguponemploymentterminationandsee“Compensation—PotentialPaymentsuponTerminationorChangeinControl—EquityCompensationPlans”aboveforinformationregardingvestinguponchangeincontrol.Amountsreflectedassumethatallapplicableperformancetargetsforanyperformance-vestingawardsareachieved.

(2)Includesannualbasesalaryof$1,875,000,$3,118,500forthe2018annualperformanceandSRIPbonuses,andcontinuedvestingofdeferredcashportionofbonusawardstotaling$164,798.Inadditiontotheseamounts,Mr.PowellwouldbeentitledtocertainseverancepaymentsandbenefitspaidbyandallocatedtoSHUSA.Formoreinformationonthesepaymentsandbenefits,pleaseseeSHUSA’sAnnualReportonForm10-KforthefiscalyearendedDecember31,2018.

(3)AsofDecember31,2018,wehadnoemploymentagreementsinplaceforMr.AlvarezdeSoto,Ms.BroderickandMr.Leaali;however,theseNEOswouldbeentitledtocashseverancepaymentsandbenefitspursuanttotheSantanderHoldingsUSA,Inc.EnterpriseSeverancePolicyintheeventofaqualifyingtermination.

(4)RepresentspaymentoflifeinsuranceproceedsundertheCompany’sstandardpolicyequaltotwo(2x)theNEO’sbasesalary,cappedat$1,000,000,plusanyelectedadditionalbenefits.ForMr.Morrin,thisamountalsoincludestheestimatedcostof12months’medicalanddentalbenefitsforMr.Morrin’sdependents.

(5)ForMr.AlvarezdeSoto,Ms.BroderickandMr.LeaalithisamountreflectsninetydaysofCOBRApremiums.ForMr.Morrin,thisamountreflects12monthsofcontinuedmedical,dentalandlifeinsurancecoverage.

(6)Includesannualbasesalaryof$850,000,$1,350,000forthe2018annualperformanceandSRIPbonuses,andcontinuedvestingofdeferredcashportionof2015,2016and2017bonusawardstotaling$331,911.

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(7)Assumesthat:(i)theNEOfirstreceivescompensationunderourshort-termsalarycontinuationprogram13weekspriortoDecember31,2018andbeginsreceivingcompensationandbenefitsunderourlong-termandindividualdisabilityinsuranceprogramonDecember31,2018;(ii)targetlevelofannualcashperformancebonusisachievedin2018andnobonusispayableforsubsequentyearsduetoourNEOreceivingcompensationandbenefitsunderourlong-termandindividualdisabilityinsuranceprogram;and(iii)theNEOiseligibleforourshort-termsalarycontinuationbenefits.Pleasesee“Compensation—PotentialPaymentsuponTerminationorChangeinControl—EmploymentAgreements”foradditionalinformation.

(8)Representstheunpaiddeferredcashportionofthe2015,2016and2017bonusawards.

EQUITY COMPENSATION PLAN INFORMATIONWecurrentlyadministeroneequityplan:ourOmnibusPlan.ThefollowingtableprovidesinformationasofDecember31,2018regardingsharesofourCommonStockthatmaybeissuedundertheseequityplans.

PLAN CATEGORY

NUMBER OF SECURITIES TO BE ISSUED UPON

EXERCISE OF OUTSTANDING OPTIONS, WARRANTS, AND RIGHTS

(#)(a)

WEIGHTED-AVERAGE EXERCISE PRICE OF

OUTSTANDING OPTIONS, WARRANTS, AND RIGHTS

($) (1)(b)

NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE

UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES

REFLECTED IN COLUMN ( a ))(#)(c)

Equity compensation plans approved bysecurity holders

1,344,175

13.15

2,507,009

Equity compensation plans not approved bysecurity holders

—

—

—

Total 1,344,175 13.15 2,057,009 (1)Weighted-averageexercisepriceisbasedsolelyonoutstandingoptions.


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COMPENSATION - PAY RATIO DISCLOSURE

PAY RATIO DISCLOSUREAsrequiredbySECrules,weareprovidingthefollowinginformationabouttherelationshipoftheannualtotalcompensationofourmediancompensatedemployeeandtheannualtotalcompensationofScottPowell,ourCEO.For2018,theannualtotalcompensationofourmediancompensatedemployee(otherthanourCEO)was$52,992;andtheannualtotalcompensationofourCEO,asreportedintheSummaryCompensationTableincludedabove,was$3,260,064.Asaresult,theratioofourCEO’sannualtotalcompensationtotheannualtotalcompensationofourmedianemployeewasapproximately62to1.TheSEC’srulesforidentifyingthemedianemployeeandcalculatingthepayratiobasedonthatemployee’sannualtotalcompensationallowcompaniestoadoptavarietyofmethodologies,toapplycertainexclusions,andtomakereasonableestimatesandassumptionsthatreflecttheiremployeepopulationsandcompensationpractices.Asaresult,thepayratioreportedbyothercompaniesmaynotbecomparabletothepayratioreportedabove,asothercompanieshavedifferentemployeepopulationsandcompensationpracticesandmayutilizedifferentmethodologies,exclusions,estimates,andassumptionsincalculatingtheirpayratios.ThepayratioreportedaboveisareasonableestimatecalculatedinamannerconsistentwithSECrulesbasedonthemethodologydescribedbelow.Wehavedeterminedthattherehavebeennochangesinouremployeepopulationoremployeecompensationarrangementsthatwereasonablybelievewouldresultinasignificantchangeinourpayratiodisclosure.Thus,aspermittedbySECrules,weareusingthesamemediancompensatedemployeethatweidentifiedforpurposesoflastyear’spayratiodisclosure.Wetookthefollowingstepstoidentifythemedianoftheannualtotalcompensationofallouremployees,aswellastodeterminetheannualtotalcompensationofourmedianemployeeandourCEO.

1. Toidentifythe“medianemployee”fromouremployeepopulation,weusedtheamountof“grosswages”fortheidentifiedemployeesasreflectedinourpayrollrecordsforthenine-monthperiodbeginningJanuary1,2017.Forgrosswages,wegenerallyusedthetotalamountofcompensationtheemployeeswerepaidbeforeanytaxes,deductions,insurancepremiums,andotherpayrollwithholding.Wedidnotuseanystatisticalsamplingtechniques.

2. Fortheannualtotalcompensationofourmedianemployee,weidentifiedandcalculatedtheelementsofthatemployee’scompensationfor2018inaccordancewiththerequirementsofItem402(c)(2)(x),resultinginannualtotalcompensationof$52,992.

3. FortheannualtotalcompensationofourCEO,weusedtheamountreportedinthe“Total”columnofour2018SummaryCompensationTableincludedabove.

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STOCKHOLDER PROPOSAL



AttheAnnualMeeting,stockholdersmaybeaskedtovoteonastockholderproposal,whichtheBoardrecommendsavote“AGAINST.”

Proposal 3: Stockholder ProposalThefollowingstockholderproposalhasbeensubmittedtotheCompanyforactionattheAnnualMeetingbytheAFL-CIOReserveFund,81516thSt.,NW,Washington,DC20006.Wehavebeennotifiedtheproponenthascontinuouslyownednofewerthan500sharesofourCommonStocksinceDecember17,2018.Inaccordancewiththeproxyregulations,thefollowingtextsetforthbelowinitalicsisthecompletetextoftheproposal,whichisreproducedassubmittedtousotherthanminorformattingchanges.Allstatementscontainedinthestockholderproposalandsupportingstatementarethesoleresponsibilityoftheproponent.IfproperlypresentedattheAnnualMeeting,theBoardunanimouslyrecommendsavote“AGAINST”theproposal,whichtheBoardbelievesisunnecessaryandnotinthebestinterestsoftheCompanyorourstockholders.RESOLVED:ShareholdersofSantanderConsumerUSAHoldingsInc.(the“Company”)requestthattheBoardofDirectorsprepareareportontheriskofracialdiscriminationinvehiclelendingandanystepsthattheCompanyhastakentopreventracialdiscriminationagainstborrowers.ThereportshallbepreparedatreasonablecostomittingproprietaryinformationandshallbemadeavailableontheCompany’swebsitenolaterthanthe2020annualmeetingofshareholders.

Supporting StatementIntheUnitedStates,vehicleloansarethethirdlargestsourceofconsumerdebtaftermortgagesandstudentloans.TheEqualCreditOpportunityActwasenactedin1974toprohibitracialdiscriminationinallformsoflending,includingvehiclelending.However,thelongstandingproblemofracialdiscriminationinvehiclelendingremainsasignificantpolicyissue.AccordingtotheCenterforResponsibleLending,dealerinterestratemarkupsonvehicleloanshaveresultedinracialdisparitiesforAfricanAmericanandLatinoborrowerscomparedtosimilarlysituatedwhiteborrowers.Adealerinterestratemarkupisthepracticeofaddingadditionalinteresttoavehicleloanthatisnotrelatedtoaborrower’screditworthiness.Borrowersofcoloraremorelikelytobechargeddealerinterestratemarkups.(DelvinDavisandChrisKukla,“RoadtoNowhere:CarDealerInterestRateMarkupsLeadtoHigherInterestRates,NotDiscounts,”November2015;DelvinDavis,“Non-Negotiable:NegotiationDoesn’tHelpAfricanAmericansandLatinosonDealer-FinancedCarLoans,”January2014)ArecentexperimentbytheNationalFairHousingAllianceillustratesthefrequencyofracialdiscriminationforvehicleloans.TheNationalFairHousingAlliancesenteightpairsoftesters,onewhiteandonenon-white,toautodealershipsinVirginiatoinquireaboutpurchasingthesamevehicle.Itfoundthat62.5percentofnon-whitetesterswhoweremorequalifiedthantheirwhitecounterpartsreceivedmorecostlypricingoptions.Non-whitetesterswhoexperienceddiscriminationwouldhavepaidanaverageof$2,662.56moreoverthelifeoftheloanthanless-qualifiedwhitetesters.(LisaRiceandErichSchwartzJr.,“DiscriminationWhenBuyingACar:HowtheColorofYourSkinCanAffectYourCar-ShoppingExperience,”January2018)TheissueofracialdiscriminationinvehiclelendingissignificantlyrelatedtoourCompany’sbusinessbecauseourCompanyisanindirectvehiclelenderthroughautodealerships.In2015,theConsumerFinancialProtectionBureauallegedthattherewerestatisticaldisparitiesinmarkupschargedbyvehicledealerstoprotectedgroupsonloansoriginatedbythosedealersandpurchasedbytheCompany.Inresponse,theDepartmentofJusticeinitiatedaninvestigationofourCompany’spricingofautoloans.OurCompanyresolvedthisinvestigationbyenteringintoaconfidentialagreementwiththeConsumerFinancialProtectionBureau.(CompanyForm10-KforthefiscalyearendedDecember31,2017)Forthesereasons,weurgeyoutovoteFORtheproposal.


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Board Response to the Stockholder Proposal

The Board unanimously recommends a vote “AGAINST” the proposal.Thisstockholderpreviouslysubmittedsubstantiallythesameproposalinconnectionwithour2018AnnualMeeting.Atthattime,theBoardopposedtheproposal,anditwasdefeatedbyourstockholdersbyavoteof:

» For:12.3%;

» Against:83.3%;

» Abstain:0.9%;and

» BrokerNon-Votes:3.4%.TheBoardhascarefullyconsideredtheproposalagainandunanimouslyrecommendsavote“AGAINST”theproposalforthereasonssetforthbelow.InkeepingwiththeCompany’slong-standingcommitmenttofairlendingandtreatingallconsumers,customers,andvendorswiththeutmostrespectandfairness,theBoardandtheCompany’smanagementsharetheproponent’sconcernabout,andareopposedto,discriminationonanyprohibitedbasis,includingonthebasisofrace,inconnectionwithvehiclelending.However,inlightofthesignificantdisclosurethattheCompanyalreadyprovides,theBoardcontinuestobelievethatthepreparationofthereportrequestedbytheproposalisbothunnecessaryandnotinthebestinterestsoftheCompanyorourstockholders.TheCompanyalreadypubliclydisclosesdetailedinformationabouthowtheCompanymanagessignificantrisksassociatedwiththeCompany’sbusiness,includingrisksassociatedwithourcompliancemanagementsystem.AsdisclosedinthisProxyStatement,aspartofourriskmanagementprocess,weregularlyreviewandseektofurtherenhanceourcomplianceandriskmanagementpoliciesandprocedures.TheCompanyisaspecializedconsumerfinancecompanyfocusedonvehiclefinanceandthird-partyservicing,andweengageinbothdirectandindirectlendingactivities.AsaparticipantintheU.S.consumerlendingindustry,theCompanyissubjecttoregulationundervariousU.S.federallaws,includingtheEqualCreditOpportunityAct(the“ECOA”),andissubjecttosupervisionandregulationbyU.S.financialservicesandotherregulatoryagencies,includingtheConsumerFinancialProtectionBureau(the“CFPB”).UndertheECOA,weareprohibitedfromdiscriminatinginanyaspectofcredittransactionsonprohibitedbases,includingrace.AsdescribedinthisProxyStatement,theCompanymaintainsrobustriskmanagementpoliciesandprocedures,includingenterprise-widecomplianceriskmanagementpoliciesandprocedures,developedandmaintainedbyourChiefRiskOfficerandourChiefComplianceOfficer,incoordinationwithourmajoritystockholder,SantanderHoldingsUSA,Inc.(“SHUSA”),itselfahighlyregulatedentity.Underourriskgovernancestructure,theCompany’sriskmanagementprogramisoverseenbytheBoardanditsstandingcommittees.TheBoard’sRegulatoryandComplianceOversightCommitteeoverseesriskrelatingtotheeffectivenessofourcompliancemanagementsystem,includingourcompliancewiththeECOAandotherapplicablelawsandregulations,andoverseesourprogressinremediatingrisksidentifiedinourriskassessmentfindingsorbyregulators,suchastheCFPB.TheRegulatoryandComplianceOversightCommitteeregularlyupdatesthefullBoardwithitsfindings.Moreover,SHUSAprovidesfurtherresourcestobolsterourriskandcomplianceoversight.OurChiefComplianceOfficerhasafunctionalreportinglinetoSHUSA’sChiefComplianceOfficer.OurChiefComplianceOfficeralsoservesonSHUSA’sComplianceCommittee,amanagementcommitteethatreceivesregularreportsfromallofthechiefcomplianceofficersofSHUSA’ssubsidiariesandoverseesadherencetocomplianceriskframeworks,policies,andstandardsofSHUSAanditssubsidiaries(includingtheCompany).Inaddition,theRiskCommitteeofSHUSA’sBoardofDirectorsreviewsrisktopics,enterprise-wideriskissues,andtheoperationsofsignificantbusinesslinesandproductsofSHUSA’ssubsidiaries.Theseenterprise-widecomplianceriskmanagementpoliciesareintendedtofacilitatecompliancewiththeECOA,and,aswediscussontheCompany’swebsiteathttps://santanderconsumerusa.com/legal/fair-lending,theCompanyiscommittedtocompliancewiththeECOAandtofairlendinginbothourdirectandindirectlendingactivities.OurEnterpriseFairLendingPolicy(the“FairLendingPolicy”)providesaframeworkforCompanycompliancewiththeECOAandsetsforthpoliciesspecificallydesignedtopreventdiscriminationonthebasisofraceandallotherprotectedbasesinallourconsumerlendingactivities.UndertheFairLendingPolicy,theCompanymakescreditandlendingproductsandservicesavailabletoallqualifiedapplicantswithoutdiscriminationonanyprohibitedbasis,encouragesallcustomerstocompleteandsubmitapplicationsforcredit,withoutanyregardtoanyprohibitedbasis,andoffersassistancetoandtreatscustomersinafairandconsistentmannerinallaspectsoflendingandservicing.Importantly,ourFairLendingPolicyisnotlimitedtoourdirectlendingbusiness—allofourbusinesslinesarerequiredtocomplywithourFairLendingPolicy.InordertoimplementourFairLendingPolicyacrossallofourbusinesses,includingourindirectlendingactivities,wehavedevelopedandimplementedbusiness-specificprocessesandcontrolstomonitorandensurecompliancewiththeECOAandallotherapplicablelawsandregulations.InaccordancewithourFairLendingPolicy,weeducateautomotivedealerswhooriginateloanstoensurecompliancewithourFairLendingPolicy.Thiseducationisintendedtopreventovertdiscrimination,disparatetreatment,anddisparateimpactonanyprohibitedbasis,includingonthebasisofrace,atindividualautomotivedealerships.CompliancewithourFairLendingPolicyisoverseenbyourChiefComplianceOfficer,whomonitorsfairlendingcomplianceacrosstheCompanythroughdedicatedfairlendingspecialists.Ourcompliancedepartmentconductsperiodictrainingofbusinesspersonnel

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rangingfromassociatestotheBoardtohelpourworkforceandleadersunderstandtheirandtheCompany’sdutiesandresponsibilitiesunderourFairLendingPolicyandundertheECOA.Becausethemajorityofourvehiclelendingactivityrelatestovehicleloansoriginatedthroughindividualautomotivedealers,wehavelimitedcontrolandinsightoverdealercompliancewiththeECOA.Nevertheless,aspartofourcommitmenttofairlendingandtopreventingdiscriminationinlending,wehavetakenadditionalstepstomonitortheactivitiesoftheindividualautomotivedealerswithwhomweengagetoassesstheircompliancewiththeECOA.TheCompanytakesappropriateactionwithrespecttodealersfoundnottobecomplyingwiththeCompany’sfairlendingorotherpolicies,uptoandincludingterminationofthedealerrelationship.Consistentwithregulatoryexpectations,wehaverenewedourcommitmenttoongoingimprovementofouralreadyrobustECOAcomplianceprogramsandpractices,particularlywithrespecttoourindirectoriginationandsecuritizationofvehicleloans.Goingforwardwewillcontinueourcompanywideeffortstoenhanceourriskmanagementandregulatorycomplianceframeworkinfurtheranceofourpolicyoftreatingallconsumerswithrespectandfairness.InlightofwhatwealreadydiscloseregardingtheCompany’sriskmanagementprogramandthepoliciesandprocedureswehaveinplacetoensurecompliancewiththeECOAandtopreventracialandotherformsofprohibiteddiscriminationinvehiclelending,theBoardbelievesthatpreparationofaseparatereportisunnecessaryandduplicativeofexistingdisclosures.Accordingly,theBoardbelievesthatthisproposalisnotinthebestinterestsoftheCompanyorourstockholders.TheBoardrecommendsavote“AGAINST”thisproposalforthereasonsdiscussedabove.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE

AGAINSTPROPOSAL 3.


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ADDITIONAL GOVERNANCE INFORMATION - RELATED PARTY TRANSACTIONS

ADDITIONAL GOVERNANCE INFORMATIONRelated Party TransactionsTransactionsbyuswithrelatedpartiesaresubjecttoaformalwrittenpolicy,aswellasregulatoryrequirementsandrestrictions.Underourwrittenpolicy,ourdirectorsanddirectornominees,executiveofficers,andholdersofmorethan5%ofourCommonStock,includingtheirimmediatefamilymembers,willnotbepermittedtoenterintoarelatedpartytransactionwithus,asdescribedbelow,withouttheconsentofourAuditCommittee.Anyrequestforustoenterintoatransactioninwhichtheamountinvolvedexceeds$120,000andanysuchpartyhasadirectorindirectmaterialinterest,subjecttocertainexceptions,willberequiredtobepresentedtoourAuditCommitteeforreview,consideration,andapproval.ManagementwillberequiredtoreporttoourAuditCommitteeanysuchrelatedpartytransactionandsuchrelatedpartytransactionwillbereviewedandapprovedordisapprovedbythedisinterestedmembersofourAuditCommittee.Thefollowingisasummaryofmaterialprovisionsofvarioustransactionswehaveenteredintowithourexecutiveofficers,directors(includingnominees),5%orgreaterstockholdersandanyoftheirimmediatefamilymembersorentitiesaffiliatedwiththem.Webelievethetermsandconditionssetforthinsuchagreementsarereasonableandcustomaryfortransactionsofthistype.

Shareholders AgreementInconnectionwithourinitialpublicofferinginJanuary2014,weenteredintotheShareholdersAgreementwithSHUSA,DDFS,LLC(“DDFS”),SponsorAutoFinanceHoldingsSeriesLP(“SponsorAuto”)andThomasDundon.TheShareholdersAgreement,asamended,providesSHUSAwith,amongotherthings,certainrightsrelatedtodirectornominations,approvalsovercertainactionstakenbyus,andregistrationrights.DDFS,SponsorAuto,andMr.DundonnolongerhaverightsundertheShareholdersAgreement.

Board CompositionTheShareholdersAgreementprovidesthatSHUSAhastherighttonominateanumberofdirectorsequaltotheproduct(roundeduptothenearestwholenumberofdirectors)of(i)afraction,thenumeratorofwhichisthenumberofsharesofourCommonStockthen-heldbySHUSAandthedenominatorofwhichisthetotalnumberofourthen-outstandingsharesofCommonStockand(ii)thenumberofdirectorsconstitutingourentireBoardiftherewerenovacancies.TheShareholdersAgreementprovidesthatwewilltakeallactionwithinourpowertocausetheindividualsnominatedundertheprovisionsoftheShareholdersAgreementtobeincludedintheslateofnomineesrecommendedbytheBoardtoourstockholdersforelectionasdirectorsateachAnnualMeetingofourstockholdersandtocausetheelectionofeachsuchnominee,includingsolicitingproxiesinfavoroftheelectionofsuchnominees.Inaddition,SHUSAhastherighttodesignateareplacementtofillavacancyontheBoardcreatedbythedepartureofadirectorwhowasnominatedbySHUSA,andwearerequiredtotakeallactionwithinourpowertocausesuchvacancytobefilledbysuchdesignatedreplacement(includingbypromptlyappointingsuchdesigneetotheBoard).

Approval RightsTheShareholdersAgreementalsoprovidesthatthefollowingactionsbyuswillrequiretheapprovalofamajorityofthedirectorsnominatedbySHUSAforsolongasSHUSA’sshareownershipisgreaterthan20%ofouroutstandingsharesofCommonStock:

» ExceptasrequiredbychangesinlaworGAAP,anychangetoourmaterialaccountingpolicies;

» ExceptasrequiredbychangesinlaworchangeswhichareconsistentwithchangestothetaxpoliciesorpositionsofaffiliatesofBancoSantanderintheUnitedStates,anychangetoourmaterialtaxpoliciesorpositions;and

» Anychangeinourprincipallineofbusinessorofcertainofourmaterialsubsidiaries.

Other ArrangementsGuaranteesBancoSantanderhasprovidedguaranteesofthecovenants,agreements,andourobligationsunderthegoverningdocumentsofourwarehousefacilitiesandprivatelyissuedamortizingnotes.Theseguaranteesarelimitedtoourobligationsasservicer.Beginninginfiscalyear2015,wehaveagreedtopayBancoSantanderandSHUSAafeeof12.5basispointsonsuchfacilitiesandnotesinexchangeforprovidingsuchguarantees.Forfiscalyears2018and2017,weincurred$5.0millionand$6.0million,respectively,infeesunderthisarrangement.

Borrowing ArrangementsBancoSantanderhasextendedvariouscreditfacilities(the“SantanderCreditFacilities”)tous.SantanderConsumerFunding5LLC(asubsidiaryofours)hasacommittedfacilityinaninitialamountof$1,750millionestablishedwiththeNewYorkBranchofBancoSantanderinDecember2011.InMarch2016,thisfacilitywasamendedtoreducethecommitted

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amountfrom$1,750millionto$1,000million.In2018,thelargestoutstandingprincipalbalanceonthisfacilitywas$610millionandwepaid$3.3millionininterestandfees.ThecreditfacilitywasterminatedinJuly2018andhasnooutstandingbalance.TheCompanyexecutedacommittedfacilityof$300millionwithSHUSAaslenderonMarch6,2017.In2018,thelargestoutstandingprincipalbalanceonthenotewas$300million,andasofDecember31,2018,theoutstandingprincipalbalanceonthenotewas$300million.In2018,wepaid$10.3millionininterestandfeesonthisnote.Theeffectiveinterestrateonthisnotewas4.09%in2018.ThenotehadamaturitydateofMarch6,2019.ThefacilitywasterminateduponmaturityandreplacedwithatermpromissorynotebetweentheCompanyandSHUSAataninterestrateof3.95%withamaturitydateofMarch5,2021.TheCompanyhasacommittedfacilityinaninitialamountof$1,500millionestablishedwithSHUSAonMarch4,2016.OnNovember1,2016,thisfacilitywasamendedtoincreasethecommittedamountto$3,000million.In2018,thelargestoutstandingprincipalbalanceonthisfacilitywaszero,andasofDecember31,2018,thebalanceofthelinewaszero.In2018,wepaid$30.7millionininterestandfeesonthislineofcredit.Theeffectiveinterestrateonthisfacilityin2018was4.97%.ThecurrentmaturityofthisfacilityisMarch1,2019whichwasrenewedwithanewmaturityofMarch1,2022.SPAINRevolvingFundingLLC(asubsidiaryofours)establishedacommittedfacilityof$750millionwiththeNewYorkbranchofBancoSantanderonApril3,2017.In2018,thelargestoutstandingprincipalbalanceonthisfacilitywas$750millionandwepaid$6.8millionininterestandfees.ThecreditfacilitywasterminatedinAugust2018andhasnooutstandingbalance.SCIllinoisasborrowerexecuteda$650milliontermpromissorynotewithSHUSAaslenderonMarch31,2017.In2018,thelargestoutstandingprincipalbalanceonthenotewas$650million,andasofDecember31,2018,theoutstandingprincipalbalanceonthenotewas$650million.In2018,wepaid$27.6millionininterestandfeesonthisnote.Theeffectiveinterestrateonthisfacilityin2018was4.20%.ThenotehasamaturitydateofMarch31,2022.SCIllinoisasborrowerexecuteda$500milliontermpromissorynotewithSHUSAaslenderonMay11,2017.In2018,thelargestoutstandingprincipalbalanceonthenotewas$500million,andasofDecember31,2018,theoutstandingprincipalbalanceonthenotewas$500million.In2018,wepaid$17.6millionininterestandfeesonthisnote.Theeffectiveinterestrateonthisfacilityin2018was3.49%.ThenotehasamaturitydateofMay11,2020.SCIllinoisasborrowerexecuteda$650milliontermpromissorynotewithSHUSAaslenderonAugust4,2017.In2018,thelargestoutstandingprincipalbalanceonthenotewas$650million,andasofDecember31,2018,theoutstandingprincipalbalanceonthenotewas$650million.In2018,wepaid$22.6millionininterestandfeesonthisnote.Theeffectiveinterestrateonthisfacilityin2018was3.38%.ThenotehasamaturitydateofAugust3,2021.SCIllinoisasborrowerexecuteda$400milliontermpromissorynotewithSHUSAaslenderonOctober10,2017.In2018,thelargestoutstandingprincipalbalanceonthenotewas$400million,andasofDecember31,2017,theoutstandingprincipalbalanceonthenotewas$400million.In2018,wepaid$12.6millionininterestandfeesonthisnote.Theeffectiveinterestrateonthisfacilityin2017was3.10%.ThenotehasamaturitydateofOctober10,2020.SCIllinoisasborrowerexecuteda$250milliontermpromissorynotewithSHUSAaslenderonDecember19,2017.In2018,thelargestoutstandingprincipalbalanceonthenotewas$250million,andasofDecember31,2018,theoutstandingprincipalbalanceonthenotewas$250million.In2018,wepaid$9.4millionininterestandfeesonthisnote.Theeffectiveinterestrateonthisfacilityin2018was3.70%.ThenotehasamaturitydateofDecember20,2021.SCIllinoisasborrowerexecuteda$250milliontermpromissorynotewithSHUSAaslenderonDecember19,2017.In2017,thelargestoutstandingprincipalbalanceonthenotewas$250million,andasofDecember31,2018,theoutstandingprincipalbalanceonthenotewas$250million.In2018,wepaid$10millionininterestandfeesonthisnote.Theeffectiveinterestrateonthisfacilityin2018was3.95%.ThenotehasamaturitydateofDecember19,2022.TheCompanyhasacommittedfacilityinanamountof$500millionwithSHUSAaslenderonJuly27,2018.In2018,thelargestoutstandingprincipalbalanceontheloanwas$425million,andasofDecember31,2018,theoutstandingprincipalbalanceontheloanwaszero.In2018,wepaid$2.9millionininterestandfeesonthisnote.Theeffectiveinterestrateonthisfacilityin2018was4.34%.TheloanhasamaturitydateJuly27,2021.SCIllinoisasborrowerexecuteda$250milliontermpromissorynotewithSHUSAaslenderonDecember14,2018.In2018,thelargestoutstandingprincipalbalanceonthenotewas$250million,andasofDecember31,2018,theoutstandingprincipalbalanceonthenotewas$250million.In2018,wedidnotmakeanypaymentsforinterestorfeesonthisnote.Theeffectiveinterestrateonthisfacilityin2018was5.00%.ThenotehasamaturitydateofDecember14,2022.SCIllinoisasborrowerexecuteda$250milliontermpromissorynotewithSHUSAaslenderonDecember14,2018.In2018,thelargestoutstandingprincipalbalanceonthenotewas$250million,andasofDecember31,2018,theoutstandingprincipalbalanceonthenotewas$250million.In2018,wedidnotmakeanypaymentsforinterestorfeesonthisnote.Theeffectiveinterestrateonthisfacilityin2018was5.25%.ThenotehasamaturitydateofDecember14,2023.

Servicing ArrangementsWeareundercontractwithSBNAtoservicethebank’sretailandrecreationalvehicleloanportfolio,whichhadabalanceof$383millionasofDecember31,2018.For2018,SBNApaid$3.7milliontouswithrespecttothisagreement.


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TheCompanyisrequiredtopermitSBNAafirstrighttoreviewandassessChryslerCapitaldealerlendingopportunities,andSBNAisrequiredtopaytheCompanyoriginationfeeandannualrenewalfeeforeachloanoriginatedundertheagreement.For2018,SBNApaidus$4.2millioninoriginationandrenewalfeesrelatedtotheseloans.TheseagreementsalsotransferredtheservicingofallChryslerCapitalreceivablesfromdealers,includingreceivablesheldbySBNAandbytheCompany,fromtheCompanytoSBNA.For2018,wepaidservicingfeesof$78,000toSBNAunderthiscontract.UndertheagreementwithSBNA,theCompanymayoriginateretailconsumerloansinconnectionwithsalesofvehiclesthatarecollateralheldagainstFloorplanLoansbySBNA.Uponorigination,theCompanyremitspaymenttoSBNA,whosettlesthetransactionwiththedealer.TheCompanyowedSBNA$5.9millionrelatedtosuchoriginationsasofDecember31,2018.TheCompanyreceiveda$9millionreferralfeeinconnectionwithsourcingandservicingarrangementandisamortizingthefeeintoincomeovertheten-yeartermoftheagreementthroughJuly1,2022,theterminationdateoftheagreement.AsofDecember31,2018theunamortizedfeebalancewas$4million.TheCompanyrecognized$900,000ofincomerelatedtothereferralfeefortheyearendedDecember31,2018.Until2015,wewerepartytoaflowagreementwithSBNAwherebyweservicedallChryslerconsumervehicleleasesoriginatedundertheagreementandcertainleasessoldtoSBNA.Additionally,wereceivedanoriginationfeeonallleasesoriginatedundertheflowagreement.AsofDecember31,2018,thisportfolioofservicedleaseshadabalanceof$338,000.For2018,SBNApaidus$1.4millioninservicingfeesrelatedtotheseleases.Beginningin2018,theCompanyagreedtoprovideSBNAwithoriginationsupportservicesinconnectionwiththeprocessing,underwritingandpurchaseofretailloans,primarilyfromChryslerdealers.Inaddition,theCompanyhasagreedtoperformtheservicingforanyloansoriginatedonSBNA’sbehalf.FortheyearendedDecember31,2018,theCompanyfacilitatedthepurchaseof$1.9billionofretailinstallmentcontacts.TheCompanyrecognizedreferralfeeandservicingfeeincomeof$15millionfortheyearendedDecember31,2018.InMarch2017,weenteredintoaMasterSecuritiesPurchaseAgreementwithBancoSantander,underwhichwehavetheoptiontosellacontractuallydeterminedamountofeligibleprimeloanstoBancoSantander,throughtheSPAINsecuritizationplatform,foratermendinginDecember2018.Weprovideservicingonallloansoriginatedunderthisarrangement.In2018,wesold$2,906millionofloansatfairvaluetoBancoSantanderunderthisagreement.Atotallossofapproximately$20.7millionwasrecognizedin2018.Servicingfeeincomeearnedtotaled$35millionfor2018.DuringtheyearendedDecember31,2018,theCompanyre-acquiredcertainclassofnotesamountingtoapproximately$76millionfromunrelatedthirdpartiesthatitpreviouslysoldtoBancoSantanderaspartofSPAINsecuritizationplatform.ThesenoteswerelaterredeemedbyBancoSantanderatparvalue.

Employment ArrangementsMr.PowellservesasourCEOandalsoservesastheCEOofourparent,SHUSA.Mr.PowellremainsonSHUSA’spayroll,andweincuracompensationexpenseforourproportionalshareofhiscompensation.During2018,ourshareofhiscompensationwasbasedonanallocationofMr.Powell’stimebetweentheCompanyandSHUSAof63%and37%,respectively.FormoreinformationabouttheallocationofMr.Powell’scompensationbetweentheCompanyandSHUSAandMr.Powell’scompensationgenerally,pleasesee“Compensation-CompensationDiscussionandAnalysis-AllocationofCompensationBetweenSCandSHUSAforMr.Powell”andCompensation-SummaryCompensationTable”.Inaddition,startingin2018,certainemployeesoftheCompanyandSHUSA,provideservicestoeachother.FortheyearendedDecember31,2018,theCompanyowedSHUSAapproximately$2.6millionandSHUSAowedtheCompanyapproximately$1.2millionforsuchservices.

Other AgreementsOnJune30,2014,weenteredintoanindemnificationagreementwithSBNAwherebyweindemnifySBNAforanycreditorresiduallossesonapoolof$48.2millioninleasesoriginatedunderaflowagreementwithSBNA.Atthetimeoftheindemnificationagreement,weestablisheda$48.2millioncollateralaccountwithSBNAinrestrictedcashthatwillbereleasedovertimetoSBNA,inthecaseoflosses,andtous,inthecaseofpaymentsandsaleproceeds.AsofDecember31,2018,thebalanceinthecollateralaccountwaszero.For2018,wedidnotincuranyindemnificationexpenses.InJanuary2015,weagreedtoindemnifySBNAforresiduallosses,uptoacap,oncertainleasesoriginatedundertheCompany’spriorflowagreementwithSBNAbetweenSeptember24,2014andMay9,2015forwhichSBNAandtheCompanyhaddifferingresidualvalueexpectationsatleaseinception.Atthetimeoftheagreement,theCompanyestablishedacollateralaccountheldbySBNAtocovertheexpectedlosses.AsofDecember31,2018,thebalanceinthecollateralaccountwas$40,000.AsofDecember31,2018,wehadarecordedliabilityof$39,000relatedtotheresiduallossescoveredundertheagreement.Ourwholly-ownedsubsidiarythroughSCIllinois,SantanderConsumerInternationalPuertoRico,LLC(“SCI”),hasopeneddepositaccountswithBSPR.AsofDecember31,2018,SCIhadcashof$8.9millionondepositwithBSPR.ThedepositaccountswereenteredintointheordinarycourseofbusinessandonsubstantiallythesametermsasBSPR’sotheraccountholders.

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TheCompanyhascertaindepositandcheckingaccountswithSBNA,anaffiliatedentity.AsofDecember31,2018,theCompanyhadabalanceof$93millionintheseaccounts.SISservesasco-manageroncertainofoursecuritizations.AmountspaidtoSISasco-managerfortheyearendedDecember31,2018totaled$2.6million.ThepaymentstoSISasco-managerofoursecuritizationsweremadeintheordinarycourseofbusinessandonsubstantiallythesametermsasotherco-managersofoursecuritizations.EffectiveApril1,2017,wecontractedAquanima,aBancoSantanderaffiliate,toprovideprocurementservices.Expensesincurredtotaled$1.5millionfortheyearendedDecember31,2018.DuringtheyearendedDecember31,2018,theCompanyaccrued$1.3millionforitsshareofcertainregulatoryassessmentexpensesthatarepayabletoBancoSantander.WepartnerwithSHUSAtoplaceCyberLiabilityInsuranceinwhichparticipatingnationalentitiesshare$150millionaggregatelimits.WerepaySHUSAforourequitablyallocatedportionofinsurancepremiumsandfees.Expensesincurredtotaled$369,000fortheyearendedDecember31,2018.Inaddition,theCompanypartnerswithSHUSAforvariousotherinsuranceproducts.Expensesincurredtotaled$708,000fortheyearendedDecember31,2018.Wearepartytoataxsharingagreementrequiringtheunitarystatetaxliabilityamongaffiliatesincludedinunitarystatetaxreturnsbeallocatedusingthehypotheticalseparatecompanytaxcalculationmethod.Pursuanttothistaxsharingagreementin2018,wereceivedpaymentsof$1.8millionfromaffiliates.TwoofthefundsthatinvestedinSponsorAutoalsoweretheequityinvestorsintwoentitiesforwhichweweretheprimarybeneficiary.In2013,thefundsabandonedtheirinterestsintheentities,resultinginourhavingfullownershipoftheentities.Atthetimetheseentitieswereformed,weenteredintoindemnificationagreementswitheachofthefundswherebywereimbursedthefunds,onagrossed-upbasis,foralltaxestheyincurredrelatedtotheirinvestmentsintheentities.Paymentsundertheseindemnificationagreementshavetotaled$28.1million,allofwhichwaspaidin2012.In2018,wedidnotrecoveranyofthereimbursedamountsthroughtaxrefundstothefunds.AtDecember31,2018,wehadareceivableof$4.2million,representingtheremainingamountoftheindemnificationpaymentsthatweexpecttorecoverasthefundsreceiveadditionaltaxrefunds.Beginningin2016,weagreedtopaySBNAamarket-ratebasedfeeexpenseforpaymentsmadeSBNAretailbranchlocationsforaccountsservicesbyusandthecostsassociatedwithmodifyingtheAdvancedTellerplatformtothepayments.Weincurred$258,000expensefortheseservicesduringtheyearendedDecember31,2018.In2018,weearned$163,000inrevenuefromSBNAforsubleasingapproximately13,000squarefeetofcorporateofficespace.


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ADDITIONAL GOVERNANCE INFORMATION - STOCK OWNERSHIP INFORMATION

Stock Ownership InformationThefollowingtableprovidesinformationregardingthebeneficialownershipofourCommonStockasofMarch25,2019(unlessotherwisenoted)by:(i)eachpersonknowntobeneficiallyownmorethan5%ofourCommonStock;(ii)eachofourdirectorsanddirectornominees;(iii)eachofourNEOs;and(iv)allcurrentdirectorsandexecutiveofficersasagroup.Forpurposesofthistable,“beneficialownership”(asdefinedinRule13d-3oftheExchangeAct)takesintoaccountsharesastowhichtheindividualhasorsharesvotingorinvestmentpoweraswellassharesthatmaybeacquiredwithin60days(suchasbyexercisingvestedstockoptions,orthevestingofRSUs)andisdifferentfrombeneficialownershipforpurposesofSection16oftheExchangeAct.Asaresult,thenumbersbelowmaydifferfromthenumbersreportedinformsfiledpursuanttoSection16.Toourknowledgeandunlessotherwiseindicated,eachstockholderlistedbelowhassolevotingandinvestmentpowerovertheshareslistedasbeneficiallyownedbysuchstockholder.Percentageofownershipisbasedupon351,715,542sharesofCommonStockoutstandingasofMarch25,2019.Numbersofsharesheldbybeneficialownersofmorethan5%ofourCommonStockareasofthedateoftheapplicableSECfilingsmadebythoseowners(unlessotherwisenoted),however,percentageshavebeenrecalculatedasofMarch25,2019.

NAME OF BENEFICIAL OWNER

SHARES OWNED

NUMBER

PERCENTAGE

Beneficial owners of 5% or more of our Common Stock:

Santander Holdings USA, Inc. (1)

245,593,555

69.83%

Directors and NEOs:

Scott Powell

34,922

*


13,291

*

Sandra Broderick

29,734

*

Reza Leaali

21,243

*

Richard Morrin (2)

166,746

*

Mahesh Aditya

—

*

José Doncel

—

*

Stephen A. Ferriss (3)

17,217

*

Victor Hill

—

*

Edith E. Holiday

7,517

*

Javier Maldonado

—

*

Robert J. McCarthy

10,797

*

William F. Muir

7,517

*

William Rainer

10,797

*

All executive officers and directors as a group (19 persons) (4)

454,273

*

* Lessthan1%oftheoutstandingbeneficialownership

(1)RepresentssharesownedbySHUSA,75StateStreet,Boston,Massachusetts02109,awhollyownedsubsidiaryofBancoSantander.

(2)Includes112,032sharesofCommonStockthatMr.Morrinhastherighttoacquirewithin60daysupontheexerciseofstockoptionsorthevestingofRSUs.

(3)Includes5,207sharesofCommonStockthatMr.Ferrisshastherighttoacquirewithin60daysupontheexerciseofstockoptions.

(4)OnlyincludesthesharesbeneficiallyownedbythosedirectorsandexecutiveofficersservingasofMarch25,2019.

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ADDITIONAL GOVERNANCE INFORMATION - OTHER GOVERNANCE INFORMATION

Other Governance InformationCode of Conduct and EthicsWehaveadoptedtheSHUSACodeofEthicsfortheCEOandSeniorFinancialOfficersandarelatedSCAddendumthatappliestoourCEOandourseniorfinancialofficers(the“CodeofEthics”).TheCodeofEthicsispubliclyavailableonourwebsiteathttp://investors.santanderconsumerusa.com.WeintendtodiscloseanyamendmentstoorwaiversofaprovisionoftheCodeofEthicsrequiredtobedisclosedbyapplicableSECrulesbypostingsuchinformationonourwebsiteavailableathttp://investors.santanderconsumerusa.comand/orinourpublicfilingswiththeSEC.

Corporate Governance GuidelinesInperformingitsrole,theBoardisguidedbyourCorporateGovernanceGuidelines,whichestablishaframeworkforthegovernanceoftheBoardandthemanagementofourCompany.TheguidelineswereadoptedbytheBoardandreflectregulatoryrequirementsandbroadlyrecognizedgovernancebestpractices,includingtheNYSEcorporategovernancelistingstandards.Theyarereviewedregularlyandupdatedasappropriate.Thefulltextcanbefoundonourwebsiteathttp://investors.santanderconsumerusa.com.

Director AttendanceDuring2018,theBoardheld10meetings.Eachincumbentdirectorattendedatleast75%oftheaggregatenumberofmeetingsoftheBoardandcommitteesoftheBoardonwhichheorsheserved,exceptforMr.Maldonado,whoattended61%ofthemeetingsoftheBoardandcommitteesoftheBoardonwhichheserved.TheIndependentDirectorsmetregularlyinexecutivesessions,withourindependentChairmanoftheBoardchairingthesessionsofIndependentDirectors.WeencouragealldirectorstoattendourAnnualMeeting.Mr.Aditya,Mr.Ferriss,Mr.Hill,Ms.Holiday,Mr.Maldonado,Mr.McCarthy,Mr.Muir,Mr.PowellandMr.Rainerattendedour2018AnnualMeeting.

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

Section 16(a) Beneficial Ownership Reporting ComplianceSection16(a)oftheExchangeActrequiresourdirectorsandexecutiveofficersandbeneficialownersofmorethan10%ofourCommonStocktofilereportswiththeSECwithrespecttotheirownershipofCommonStock.Directors,executiveofficersandpersonsowningmorethan10%ofourCommonStockarerequiredtofurnishuswithcopiesofallSection16(a)reportstheyfile.Basedsolelyonourreviewofthecopiesofsuchreportsreceivedbyusandanywrittenrepresentationsfromreportingpersonsthatnootherreportswererequiredofthosepersons,webelievethatduring2018allsuchreportsrequiredtobefiledbyourdirectors,executiveofficersandbeneficialownersofmorethan10%ofourCommonStockweretimelyfiled.


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QUESTIONS AND ANSWERS

QUESTIONS AND ANSWERSProxy Materials and Voting Information1. How does the Board recommend that I vote on matters to be considered at the Annual Meeting?TheBoardrecommendsthatyouvoteasfollows:

AGENDA PROPOSAL

DESCRIPTION

BOARD RECOMMENDATION

1

ElectionofDirectors

FORALL

2

RatificationofAppointmentofIndependentRegisteredPublicAccountingFirm

FOR

3

StockholderProposal

AGAINST

2. Who is entitled to vote?OnlyholdersofrecordofourCommonStockatthecloseofbusinessonApril15,2019,whichtheBoardhassetastherecorddate,areentitledtonoticeof,andtovoteat,theAnnualMeeting.Asoftherecorddate,wehad351,781,132sharesofCommonStockoutstandingandentitledtovoteattheAnnualMeeting,andoursharesofCommonStockwereheldbyapproximately8stockholdersofrecord.EachholderofrecordofCommonStockontherecorddatewillbeentitledtoonevoteforeachshareheldonallmatterstobevoteduponattheAnnualMeeting.Therearenocumulativevotingrightsintheelectionofdirectors.

3. What constitutes a quorum at the Annual Meeting?Thepresence,inpersonorbyproxy,ofamajorityofthevotesentitledtobecastonamattertobevotedonattheAnnualMeetingconstitutesaquorumforactiononthatmatter.ThesharesofCommonStockrepresentedbyproperlyexecutedproxycards,orproperlyauthenticatedvotinginstructionsrecordedelectronicallythroughtheInternetorbytelephone,willbecountedforpurposesofdeterminingthepresenceofaquorumattheAnnualMeeting.Abstentionsandbrokernon-voteswillbecountedtowardfulfillmentofquorumrequirements.Abrokernon-voteoccurswhenanomineeholdingsharesforabeneficialownerdoesnotvoteonaparticularproposalbecausethenomineedoesnothavediscretionaryvotingpowerwithrespecttothatproposalandhasnotreceivedinstructionsfromthebeneficialowner.

4. How do I vote without attending the Annual Meeting?Whetheryouholdsharesdirectlyasastockholderofrecordorthroughabroker,trustee,orothernominee,youmaydirecthowyoursharesarevotedwithoutattendingtheAnnualMeeting.YoumaygivevotinginstructionsbytheInternet,bytelephoneorbymail.Instructionsareontheproxycardorinstructioncard.Theproxyholderswillvoteallproperlyexecutedproxiesthataredeliveredinresponsetothissolicitation,andnotlaterrevoked,inaccordancewiththeinstructionsgivenbyyou.Ifyouareastockholderofrecordontherecorddate,thenyourproxymustbereceivednolaterthan5:00P.M.EasternTimeonJune10,2019tobecounted.Ifyouarethebeneficialownerofyoursharesheldthroughabroker,trusteeorothernominee,pleasefollowtheinstructionsofyourbroker,trusteeorothernomineeindeterminingthedeadlineforsubmittingyourproxy.

5. How can I revoke my proxy?AstockholderofrecordwhohasgivenaproxymayrevokeitatanytimepriortoitsexerciseattheAnnualMeetingbyeither(i)givingwrittennoticeofrevocationtoourCorporateSecretary,(ii)properlysubmittingadulyexecutedproxybearingalaterdate,or(iii)appearinginpersonattheAnnualMeetingandvotinginperson.Ifyouarethebeneficialownerofsharesheldthroughabroker,trustee,orothernominee,youmustfollowthespecificinstructionsprovidedtoyoubyyourbroker,trustee,orothernomineetochangeorrevokeanyinstructionsyouhavealreadyprovidedtoyourbroker,trustee,orothernominee.

6. What is the difference between a “stockholder of record” and a “beneficial” stockholder of shares held in street name?Ifyoursharesareowneddirectlyinyournameinanaccountwithourtransferagent,Computershare,youareconsideredthe“stockholderofrecord”ofthosesharesinyouraccount.Ifyoursharesareheldinanaccountwithabroker,bank,orothernomineeascustodianonyourbehalf,youareconsidereda“beneficial”stockholderofthoseshares,whichareheldin“streetname.”Thebroker,bank,orothernomineeisconsideredthe

7. How will you treat my voting instructions?Ifyouprovidespecificvotinginstructions,yourshareswillbevotedasinstructed.

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IfyouholdsharesasthestockholderofrecordandsignandreturnaproxycardorvotebyInternetortelephonewithoutgivingspecificvotinginstructions,thenyourshareswillbevotedinaccordancewiththerecommendationsoftheBoard.TheBoardrecommends(1)avotefortheelectionofalldirectornominees,(2)avotefortheratificationoftheappointmentofPwCasourindependentregisteredpublicaccountingfirm,and(3)avoteagainstthestockholderproposal.Intheeventthatanydirectornomineeisunavailableforelection,suchsharesmaybevotedfortheelectionofsuchsubstitutenomineeornominees,ifany,astheBoardmayselect.Thepersonsidentifiedashavingtheauthoritytovotetheproxiesgrantedbytheproxycardwillalsohavediscretionaryauthoritytovote,totheextentpermittedbyapplicablelaw,onsuchotherbusinessasmayproperlycomebeforetheAnnualMeetingandanypostponementoradjournment.TheBoardisnotawareofanyothermattersthatarelikelytobebroughtbeforetheAnnualMeeting.IfanyothermatterisproperlypresentedforactionattheAnnualMeeting,includingaproposaltoadjournorpostponetheAnnualMeetingtopermitustosolicitadditionalproxiesinfavorofanyproposal,thepersonsnamedintheproxycardwillvoteonsuchmatterintheirowndiscretion.Asabeneficialstockholder,youmustprovidevotinginstructionstoyourbroker,bank,orothernomineebythedeadlineprovidedintheproxymaterialsyoureceivefromyourbroker,bank,orothernomineetoensureyoursharesarevotedthewayyouwouldlike.Ifyoudonotprovidevotinginstructionstoyourbroker,bank,orothernominee,whetheryoursharescanbevotedonyourbehalfdependsonthetypeofitembeingconsideredforvote.UnderNYSErules,brokersarepermittedtoexercisediscretionaryvotingauthorityonlyon“routine”matters.Therefore,yourbrokermayvoteonProposal2(RatificationoftheAppointmentofPwCastheCompany’sIndependentRegisteredPublicAccountingFirmfor2019)evenifyoudonotprovidevotinginstructions,becauseitisconsideredaroutinematter. Your broker is not permitted to vote on the other Agenda Proposals if you do not providevoting instructions, because those items involve matters that are considered non-routine .

8. What is a broker non-vote?Ifyourbrokerdoesnotreceiveinstructionsfromyouonhowtovoteyoursharesanddoesnothavediscretiontovoteonaproposalbecauseitisanon-routinematter,thebrokermayreturntheproxywithoutvotingonthatproposal.Thisisknownasa“brokernon-vote.”Abrokernon-votewithrespecttoaproposalistreatedasnotentitledtovoteatthemeetingwithregardtothatproposal,andthereforedoesnothaveanyeffectontheoutcomeofthevoteonthatproposal.

9. What are the voting requirements to elect directors and to approve each of the proposals?AttheAnnualMeeting,stockholderswillconsiderandactupon(1)theelectionof10directors;(2)theratificationoftheappointmentofourindependentregisteredpublicaccountingfirm;(3)thestockholderproposal;and(4)suchotherbusinessasmayproperlycomebeforetheAnnualMeeting.OurBylawsprovidethatdirectorsareelectedbyapluralityofthevotescast.ThismeansthatthedirectornomineewiththemostvotesforaparticularseatontheBoardiselectedforthatseat.OnlyvotesactuallycastwillbecountedforpurposesofdeterminingwhetheradirectornomineereceivedthemostvotesforaparticularseatontheBoard.Abstentionsandthewithholdingofauthoritybyastockholder(includingbrokernon-votes)astotheelectionofdirectors(Proposal1)arenottreatedasvotes“cast”andthushavenoeffectontheresultsoftheelection.UnderourBylaws,theratificationoftheappointmentofourindependentregisteredpublicaccountingfirm(Proposal2)mustbeapprovedbytheaffirmativevoteofamajorityofthevotespresentinpersonorrepresentedbyproxyatthemeetingandentitledtovoteonthematter.Abrokernon-votewithrespecttoaproposalistreatedasnotentitledtovoteatthemeetingwithregardtothatproposal,andthereforedoesnothaveanyeffectontheoutcomeofthevoteonthatproposal.AnabstentiononanyofProposal2,willbetreatedasavoteagainsttherelevantproposal.AsofMarch25,2019,ourdirectorsandexecutiveofficersbeneficiallyowned306,132sharesofCommonStockeligibletobevotedattheAnnualMeeting,constitutingapproximately0.09%oftheoutstandingCommonStock.Inaddition,SHUSA,ourcontrollingstockholderandasubsidiaryofBancoSantander,owns245,593,555sharesofCommonStock,constitutingapproximately69.83%oftheoutstandingCommonStockeligibletobevoted.Webelievethatourdirectors,ourexecutiveofficers,andSHUSAwillvotealloftheirsharesofCommonStockinfavoroftheelectionofeachofthedirectornominees,infavorofProposals,2andagainstProposal3,andtherefore,theoutcomeofthesemattersisreasonablyassured.

10. What is “householding” and how does it affect me?IfyouandotherpersonsinyourhouseholdownsharesofourCommonStockasthebeneficialowner,yourbrokerorbankmayhavegivennoticethatyourhouseholdwillreceiveonlyonecopyofourannualreportandproxystatement.Thispracticeisknownas“householding.”Unlessyourespondedtothatnoticethatyoudidnotwishtoparticipateinhouseholding,youwouldbedeemedtohaveconsentedtoparticipating,andonlyonecopyofourannualreportandProxyStatementwouldbesenttoyouraddress(however,eachstockholderwouldcontinuetoreceiveaseparateproxycard).Thisprocedurereducesourprintingcostsandpostagefees.


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

Annual Meeting Information11. Are there any other matters to be voted upon at the Annual Meeting?WedonotknowofanymatterstobevotedonbystockholdersattheAnnualMeetingotherthanthoseincludedinthisProxyStatement.YourexecutedproxygivestheproxyholdersauthoritytovoteyoursharesinaccordancewiththeirbestjudgmentwithrespecttoanyothermatterthatmayproperlycomebeforeourstockholdersattheAnnualMeetinginaccordancewithRule14a-4(c)oftheSEC’sproxyrules,andtheproxyholdersintendtoexercisetheirjudgmentaccordinglyinsuchcircumstances.

12. How can I vote in person at the Annual Meeting?SharesheldinyournameasthestockholderofrecordontherecorddatemaybevotedinpersonattheAnnualMeeting.SharesforwhichyouarethebeneficialownerbutnotthestockholderofrecordmaybevotedinpersonattheAnnualMeetingonlyifyouobtainalegalproxyfromthebroker,trustee,orothernomineethatholdsyoursharesgivingyoutherighttovotetheshares.EvenifyouplantoattendtheAnnualMeeting,werecommendthatyouvotebyproxyasdescribedbelowsothatyourvotewillbecountedifyoulaterdecidenottoattendtheAnnualMeeting.Thevoteyoucastinpersonwillsupersedeanypreviousvotesthatyoumayhavesubmitted,whetherbyInternet,telephone,ormail.

13. How can I attend the Annual Meeting?ToattendtheAnnualMeeting,youmustbeaholderofourCommonStockasoftherecorddateofApril15,2019,andrequestanadmissionticketinadvancebyfollowingtheinstructionsbelow.IfyoursharesareowneddirectlyinyournameinanaccountwithComputershare,ourstocktransferagent,youmustprovideyournameandaddressasshownonyouraccountorvotingmaterialswithyouradmissionticketrequest.Ifyouholdyoursharesinanaccountwithabroker,bank,orothernominee,youmustincludeproofofyourstockownership,suchasacopyoftheportionofyourNoticeorproxycardthatshowsyournameandaddressoraletterfromyourbroker,bank,orothernomineeconfirmingyourstockownershipasofApril15,2019.Thee-mailnotificationreceivedwithelectronicdeliveryofproxymaterialsisnotsufficientproofofstockownership.PleasesendyourAnnualMeetingadmissionticketrequestandproofofstockownershipasdescribedabovetotheOfficeoftheSecretarybyoneofthefollowingmethods: Email: [email protected]

Mail: SantanderConsumerUSAHoldingsInc. OfficeoftheCorporateSecretary 1601ElmStreet,Suite800 Dallas,Texas75201

TicketrequestsmustbereceivednolaterthanJune4,2019.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.

Stockholder Proposals and Company Information14. How can I submit a stockholder proposal for the 2020 Annual Meeting?StockholderproposalssubmittedpursuanttoSECRule14a-8forinclusioninour2020proxystatementandactionatour2020AnnualStockholderMeeting(the“2020AnnualMeeting”)mustbereceivedbyusatourexecutiveofficesat1601ElmSt.,Suite800,Dallas,Texas75201,Attention:OfficeoftheSecretary,nolaterthanthecloseofbusiness120calendardaysbeforetheone-yearanniversaryofthedateofthisProxyStatement’sreleasetostockholdersinconnectionwiththe2019AnnualMeeting.Asaresult,any

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noticegivenbyastockholderpursuanttoSECRule14a-8mustbereceivednolaterthanDecember28,2019.If,however,the2020AnnualMeetingtakesplacemorethan30daysbeforeorafterJune11,2020,thenthedeadlineforstockholderproposalssubmittedpursuanttoSECRule14a-8forinclusioninour2020proxystatementandacteduponatour2020AnnualMeetingshallbeadatethatwedeterminetobeareasonabletimebeforewebegintoprintandsendourProxyMaterials.Inthisevent,wewilldisclosethisdeadlineinapublicfilingwiththeSEC.Stockholderproposalssubmittedforconsiderationatthe2020AnnualMeetingbutnotsubmittedpursuanttoSECRule14a-8,includingstockholdernominationsforcandidatesforelectionasdirectors,generallymustbedeliveredtotheSecretaryatourexecutiveofficesnotlaterthan90daysorearlierthan120daysbeforethefirstanniversaryofthedateofthe2019AnnualMeeting.Asaresult,anynoticegivenbyastockholderpursuanttotheprovisionsofourBylaws(otherthannoticepursuanttoSECRule14a-8)mustbereceivednoearlierthanFebruary12,2020andnolaterthanMarch13,2020.However,ifthedateofthe2020AnnualMeetingoccursmorethan30daysbeforeormorethan60daysafterJune11,2020,noticebythestockholderofaproposalmustbedeliverednoearlierthanthecloseofbusinessonthe120thdaypriortothedateofsuchAnnualMeetingandnolaterthanthecloseofbusinessonthe90thdaypriortothedateofsuchAnnualMeetingor,ifthefirstpublicannouncementofthedateoftheAnnualMeetingislessthan100dayspriortothedateofsuchAnnualMeeting,the10thdayfollowingthedayonwhichwefirstmakeapublicannouncementofthedateoftheAnnualMeeting.StockholderproposalsornominationsmustincludethespecifiedinformationconcerningthestockholderandtheproposalornomineeasdescribedinourBylaws.ThechairmanoftheAnnualMeetingmayrefusetoacknowledgeorintroduceanystockholderproposalornominationifnoticethereofisnotreceivedwithintheapplicabledeadlinesordoesnotcomplywithourBylaws.IfastockholderfailstomeetthesedeadlinesorfailstosatisfytherequirementsofourBylaws,thepersonsnamedasproxieswillbeallowedtousetheirdiscretionaryvotingauthoritytovoteonanysuchproposalornominationastheydetermineappropriateifandwhenthematterisraisedattheAnnualMeeting.

15. Who pays for this proxy solicitation?ProxieswillbesolicitedfromourstockholdersbymailandthroughtheInternet.Wewillpayallexpensesinconnectionwiththesolicitation,includingpostage,printing,andhandling,andtheexpensesincurredbybrokers,custodians,nominees,andfiduciariesinforwardingproxymaterialtobeneficialowners.WemayengageaproxysolicitationfirmtosolicitproxiesinconnectionwiththeAnnualMeeting,andweestimatethatthefeepayableforsuchserviceswouldbelessthan$10,000.Itispossiblethatourdirectors,officers,andotheremployeesmaymakefurthersolicitationspersonally,electronically,orbytelephone,facsimile,ormail.Ourdirectors,officers,andotheremployeeswillreceivenoadditionalcompensationforanysuchfurthersolicitations.

16. How can I obtain a copy of the Annual Report on Form 10-K?Upon written request, we will provide to you by mail a free copy of our Annual Report on Form 10-K (including financial statements andfinancial statement schedules) for the fiscal year ended December 31, 2018. Pleasedirectyourrequestto1601ElmSt.,Suite800,Dallas,Texas75201Attention:CorporateSecretary.TheAnnualReportonForm10-Kmayalsobeaccessedonourwebsiteathttp://investors.santanderconsumerusa.com.

By Order of the Board,

Christopher Pfirrman

Chief Legal Officer, General Counsel, and Corporate Secretary


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CHRYSLERCAPITALRoadLoans.com1601ElmSt.Suite800Dallas,Texas75201|214.634.1110

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ANNUAL MEETING OF SANTANDER CONSUMER USA HOLDINGS INC.Date: June 11, 2019

Time: 2:00 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 the election of thenominees for director, FOR proposal 2 and AGAINST proposal 3.

1:

Election of Directors

Directors

Recommendä For Withhold

01 Mahesh Aditya ☐ ☐ For 02 José Doncel ☐ ☐ For 03 Stephen A. Ferriss ☐ ☐ For 04 Victor Hill ☐ ☐ For 05 Edith E. Holiday ☐ ☐ For 06 Javier Maldonado ☐ ☐ For 07 Robert J. McCarthy ☐ ☐ For 08 William F. Muir ☐ ☐ For 09 Scott Powell ☐ ☐ For 10 William Rainer ☐ ☐ For

2:

To ratify the appointment ofPricewaterhouseCoopers LLP as ourindependent registered public accounting firmfor the current fiscal year.

For☐

Against☐

Abstain☐

For

3:

Stockholder proposal requesting that theBoard of Directors prepare a report related tothe monitoring and management of certainrisks related to vehicle lending.

For☐

Against☐

Abstain☐

Against

4:

Includes authorization to vote upon anybusiness as may properly come before theAnnual Meeting, and any adjournment orpostponement thereof, in accordance with theterms of our Third Amended and RestatedBylaws.

Authorized Signatures - This section must becompleted for your Instructions to be executed.

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 joint tenancy, all personsshould sign. Trustees, administrators, etc., should include title and authority. Corporations should provide fullname of corporation and title of authorized officer signing the proxy.

Annual Meeting of Santander Consumer USA Holdings Inc.to be held on Tuesday, June 11, 2019

for Holders as of April 15, 2019This 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 recordedinstructions.

OR • Mark, sign and date your Proxy Card/Voting InstructionForm.

• Detach your Proxy Card/Voting Instruction Form.

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

The undersigned hereby appoints Scott Powell 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 sharesof capital stock of Santander Consumer USA Holdings Inc. which the undersigned isentitled to vote at said meeting and any adjournment or postponement thereof upon thematters specified and upon such other matters as may be properly brought before themeeting or any adjournment or postponement thereof, conferring authority upon such trueand lawful attorneys to vote in their discretion on such other matters as may properlycome before the meeting 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 THEELECTION OF THE DIRECTORS IN PROPOSAL 1, FOR PROPOSAL 2, ANDAGAINST PROPOSAL 3, AND AUTHORITY WILL BE DEEMED GRANTED TOVOTE UPON ANY BUSINESS AS MAY PROPERLY COME BEFORE THEANNUAL MEETING, AND ANY ADJOURNMENT OR POSTPONEMENTTHEREOF, IN ACCORDANCE WITH THE TERMS OF OUR THIRD AMENDEDAND RESTATED BYLAWS.

PROXY TABULATOR FOR

SANTANDER CONSUMER USA HOLDINGS INC.

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

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Proxy — Santander Consumer USA Holdings Inc. Annual Meeting of Stockholders June 11, 2019 2:00 P.M. (Local Time)

This Proxy is Solicited on Behalf of the Board of Directors

The undersigned appoints Scott Powell and Christopher Pfirrman (the “NamedProxies”) and each of them as proxies for the undersigned, with full power ofsubstitution, to vote the shares of common stock of Santander Consumer USAHoldings Inc., a Delaware corporation (the “Company”), the undersigned isentitled to vote at the Annual Meeting of Stockholders of the Company to beheld at the offices of Santander Consumer USA Holdings Inc., at 1601 ElmStreet, Suite 800, Dallas, Texas 75201, on June 11, 2019 at 2:00 P.M. (LocalTime) and all adjournments or postponements thereof. The Board of Directors of the Company recommends a vote “FOR” allnominees for director, “FOR” proposal 2, and “AGAINST” proposal 3. This proxy, when properly executed, will be voted in the manner directedherein. If no direction is made, this proxy will be voted “FOR” allnominees for director, “FOR” proposal 2, and “AGAINST” proposal 3. Intheir discretion, the Named Proxies are authorized to vote upon such othermatters that may properly come before the Annual Meeting and 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 you wish tovote in accordance with the Board of Directors’ recommendation. TheNamed Proxies cannot vote your shares unless you sign and return thiscard.