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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant 

Filed by a Party other than the Registrant  
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material under §240.14a-12
DISCOVER FINANCIAL SERVICES
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
No fee required.
Fee paid previously with preliminary materials.
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.




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Learn More
2022 Annual Report*
https://investorrelations.discover.com/
investor-relations/financials/annual-reports/default.aspx
*The information in the Annual Report is not incorporated by reference into,
and does not form part of, this proxy statement.



Message from our Independent Chairman
March 17, 2023
Dear Fellow Shareholders:
It is an honor to serve as your independent Board Chair and to invite you to the Discover Financial Services’ 2023 Annual Meeting of Shareholders. This year’s Annual Meeting will again be held virtually to allow shareholders to join from any location and at no cost.
On behalf of your Board, I thank you for your continued support. We value your investment and our ongoing engagement. Discover remains committed to its mission to help people achieve brighter financial futures, and we remain committed to representing your interests. We look forward to continuing our dialogue.
As we emphasized last year, your Board recognizes the importance of thoughtful refreshment to build and maintain an appropriate and diverse balance of skills, experiences and backgrounds. To this end, we are recommending you add Beverley Sibblies as a new member of the Board this year. Ms. Sibblies brings deep leadership, financial and banking experience to the Board gained from service as a chief financial officer and chief accounting officer of a multinational consumer finance company and will strongly complement the other members of your Board. She has served as an independent member of the Discover Bank board for 7 years and already provides valuable contributions to the company.
In accordance with the retirement policy we announced last year, Cynthia Glassman and Michael Moskow, will be retiring from the Board at this year’s Annual Meeting. We will miss the leadership, commitment and perspectives that both have provided over their years of service. They have been outstanding directors, and the Board thanks them for their service.
Your vote is important! Whether or not you plan to attend the Annual Meeting, please read the enclosed proxy statement and vote as soon as possible via the Internet, by telephone or, if you receive a paper Proxy Card or voting instruction form in the mail, by mailing the completed Proxy Card or voting instruction form. Using the Internet or telephone voting systems or mailing your completed Proxy Card will not prevent you from voting at the meeting if you are a shareholder of record and wish to do so.
All shareholders of record of our outstanding shares of common stock at the close of business on March 13, 2023, will be entitled to vote at the Annual Meeting. For more information on how to register and attend this year’s Annual Meeting of Shareholders, please refer to the Questions and Answers about the Annual Meeting and Voting section which begins on page 83 of the enclosed proxy statement.
Important information about the matters to be acted upon at the meeting is included in the notice of meeting and proxy statement. Our 2022 Annual Report contains information about our Company and its financial performance.
I am very much looking forward to our 2023 Annual Meeting of Shareholders.
Very truly yours,
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THOMAS G. MAHERAS
Independent Chairman
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This proxy statement is dated March 17, 2023, and is first being sent or made available to shareholders on or about March 29, 2023.
www.discover.com
1


Notice of 2023 Annual Meeting of Shareholders
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Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting To Be Held on May 11, 2023: Our Proxy Statement and our Annual Report, which includes our Form 10-K for the fiscal year ended December 31, 2022, are available free of charge on our website at: www.discover.com.
You are cordially invited to attend the Annual Meeting via the website below, but whether or not you attend, you are urged to vote. Your prompt action will aid the Company in reducing the expense of proxy solicitation.
Date and Time
May 11, 2023
9:00 a.m., Central Time
Website
www.meetnow.global/MDTA9YP
Record Date
You are entitled to notice of and to vote at the meeting and at any adjournment or postponement of the meeting if you were a shareholder of record as of the close of business on March 13, 2023.
Items of BusinessBoard Recommendation
1To elect twelve members of the Board of Directors named in the Proxy Statement as nominees, each for a term of one year.
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FOR each director nominee
2To conduct an advisory, non-binding vote to approve named executive officer compensation.
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FOR
3To conduct an advisory vote on the frequency of future advisory votes on named executive officer compensation.
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FOR a frequency period of every year (an annual vote)
4To approve the Discover Financial Services 2023 Omnibus Incentive Plan.
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FOR
5To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2023.
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FOR
To transact any other business as may properly come before the meeting or any adjournment or postponement of the meeting.
It is important that your shares be represented and voted at the Annual Meeting. You can vote your shares by completing and returning your Proxy Card or by voting on the Internet or by telephone. The only voting securities of the Company are shares of our common stock, $0.01 par value per share (the “Common Stock”), of which there were 259,360,576 shares outstanding as of the Record Date (excluding treasury stock). See the Questions and Answers About the Annual Meeting and Voting section beginning on page 83 for more details.
Advance Voting Methods
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Internet
Go to www.investorvote.com/dfs
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Telephone
Call toll free 1-800-652-VOTE (8683) within the USA, territories & Canada
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Mail
Follow the instructions on your proxy card
We encourage you to enroll in electronic delivery of proxy materials in the future. Enrolling in future electronic delivery provides convenient access to proxy materials and helps us reduce paper usage and printing and mailing expenses. If you are a registered shareholder, please sign up at www.computershare.com/investor. If you are a beneficial owner, please contact your broker for instructions.
Attending the Virtual Annual Meeting
Our 2023 Annual Meeting will be a virtual meeting, conducted via live audio webcast only. No physical meeting will be held. If you plan to attend the meeting virtually via the website listed above, please follow the registration instructions as outlined in the Questions and Answers About the Annual Meeting and Voting section beginning on page 83 for more details.
This booklet contains our Notice of Annual Meeting and 2023 Proxy Statement. Our 2022 Annual Report contains information about our Company and its financial performance. Our ESG Tear Sheet and Diversity, Equity & Inclusion (DE&I) Report contain additional information about our Company and actions we have taken to fulfill our responsibilities to a wide variety of stakeholders including our shareholders. Our Annual Report, ESG Tear Sheet and DE&I Report are not a part of our proxy solicitation materials.
By Order of the Board of Directors,
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Hope D. Mehlman
Executive Vice President, Chief Legal Officer, General Counsel and Secretary
March 17, 2023
2
2023 Proxy Statement


Proxy Highlights
This summary highlights selected information about the matters to be voted on at the Annual Meeting. You should read the entire Proxy Statement before voting. For more complete information regarding the Company’s 2022 performance, please review the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Voting Roadmap
PROPOSAL
1
Election of Directors  FURTHER INFORMATION BEGINNING ON PAGE 9
Our Board recommends a vote FOR each director nominee:
Jeffrey S. Aronin
Joseph F. Eazor
David L. Rawlinson II
Mary K. Bush
Roger C. Hochschild
Beverley A. Sibblies
Gregory C. Case
Thomas G. Maheras
Mark A. Thierer
Candace H. Duncan
John B. Owen
Jennifer L. Wong
Director Nominees
Our Board selected these nominees based on their broad and diverse spectrum of experience and expertise, reputation for integrity, experience in positions with a high degree of responsibility, and their commitment to represent the interest of all shareholders. Detailed information about each nominee’s qualifications, experience, skills and expertise along with professional contributions can be found starting on page 9.    
Skills and Experiences
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CEO or CFO
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Public Board
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Financial Services Industry
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Audit Qualified
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Technology and/or Cybersecurity
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Government / Regulatory
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Risk Management
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Corporate Governance
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Brand Marketing
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International
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Strategy and Business Development
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Compensation / Succession Planning
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Climate / Sustainability
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Demographic Information
Tenure (years)1515158641401093
Age557460696058606247616348
GenderMFMFMMMMMFMF
Race/Ethnicity
Black/African American
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Asian/Other Pacific Islander
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White/Caucasian
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www.discover.com
3

Proxy Highlights
Corporate Governance Highlights
The Board believes strong corporate governance is critical to achieving the Company’s long-term goals and maintaining the trust and confidence of investors, employees, customers, regulatory agencies, and other stakeholders. The following are highlights of our 2022 Corporate Governance Program:
Board Independence
ü  All directors are independent except CEO; Board committees are 100% independent
ü  Non-Executive Board Chairman is independent
ü  Regular executive sessions of independent directors
Board Performance
ü  All directors attended at least 75% of meetings of our Board and committees on which they serve
ü  Diverse Board with mix of skills, tenure and age; 31% of our directors are women and 50% of the Board’s committees are chaired by women
ü  Annual Board, committee and director performance evaluations
ü  Director education and access to experts
Best Practices
ü  Risk aware culture overseen by a separate Risk Oversight Committee
ü  Significant shareholder ownership requirements for Executives and Board
ü  Longstanding commitment to sustainability
Shareholder Engagement
ü  Annual election of directors with majority voting standard and no supermajority voting requirements
ü  Shareholders have proxy access with market standard conditions for director nominations
ü  All directors attend the annual meeting
ü  Shareholders have the right to call special meetings at market standard threshold in accordance with our Bylaws
4
2023 Proxy Statement

Proxy Highlights
PROPOSAL
2
Advisory Vote to Approve Named Executive
Officer Compensation
SEE PAGE 26
Our Board recommends a vote FOR this Proposal
Performance Highlights
In 2022, the Company’s accomplishments included:
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Grew profit before taxes and reserves (“PBTR”) significantly at 11% year-over-year driven by sales, new account and loan growth coupled with net interest margin expansion
Based on net income of $4,392 million, the Company achieved PBTR of $6,284 million(1)
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Strong credit performance from disciplined management and favorable macroeconomic conditions
Total net charge-off rate on average loans outstanding of 1.82% was consistent with the prior year rate of 1.84%
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Invested in acquisition marketing, new products, enhanced capabilities, compliance and personnel to support growth
Total loans up 20% year-over-year reflecting strong new account growth driven by investments in account acquisition and robust sales volume which was up 16% from the prior year
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Enhanced shareholder returns with share repurchases and larger dividends
The Company increased the quarterly dividend to $0.60 per share of common stock and approved a $4.2 billion share repurchase plan in April 2022
Executive Compensation Highlights
The Company’s 2022 executive compensation program and compensation decisions were based on the following principles:
Pay-for-Performance
Our compensation should reflect financial and non-financial performance over short- and long-term periods at the Company and individual performance levels.
Balanced Compensation Structure
We seek to deliver a mix of fixed and variable compensation that aligns the interests of our executive officers with our shareholders and appropriately balances risk and reward.
Market-Competitive Pay Opportunity
Our compensation should be competitive relative to our peers and the broader market in order to attract, motivate and retain top executive talent.
(1)Profit before taxes and reserves (“PBTR”) is a non-GAAP financial measure which should be viewed in addition to, not as a substitute for, the Company’s reported results. PBTR is derived by adding the change in the allowance for credit losses of $552 million, the reclassification of the liability for expected credit losses on unfunded commitments of $(10) million, and income tax expense of $1,350 million to net income of $4,392 million. The Compensation and Leadership Development Committee believes that PBTR is a critical measure of the core operating performance of the business that increases focus on factors the Company’s incentive-eligible employees are most able to directly impact and influence. Please see “Annex A” for a reconciliation of PBTR growth to net income growth calculated in accordance with GAAP.
www.discover.com
5

Proxy Highlights
(Performance-Based)
ElementBase SalaryShort-Term Incentive (“STI”)Long-Term Incentive (“LTI”)
HighlightsFixed cash compensation based on scope of responsibility, impact on the organization, expertise, experience, and individual performance.Annual cash bonus opportunity based on Company financial performance, primarily PBTR, other performance factors, risk and individual performance.Annual equity award opportunity based on financial performance, other performance factors, risk and individual performance; granted as a mix of PSUs and RSUs with PSU awards determined based on three-year adjusted EPS performance.
2022 CEO Target Pay Mix9.7%19.5%
RSUs 17.7%
PSUs 53.1%
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2022 Average of All Other Named Executive Officers ("NEOs") Target Pay Mix17.6%25.2%
RSUs 22.9%
PSUs 34.3%
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Highlights of our program include:
We DoWe Do Not
ü  Pay-for-performance
ü  Align compensation plans and programs with shareholder interests
ü  Maintain oversight by an independent Compensation and Leadership Development Committee
ü  Apply share ownership guidelines to directors and NEOs
ü  Apply incentive award limits to NEOs
ü  Include clawback provisions to recover incentive compensation under certain circumstances
ü  Regularly evaluate risk performance in incentive compensation design and decisions for our NEOs
ü  Provide balanced change in control benefits with a double trigger and no excise tax gross-ups
ü  Include non-competition and non-solicitation provisions in our long-term incentive awards
ü  Limit perquisites
×    Maintain employment contracts with our NEOs
×    Provide special benefit plans to our executives not generally available to other employees
×    Allow directors and NEOs to hedge or pledge Company securities
×    Provide single trigger change in control severance arrangements or provide excise tax gross-ups
PROPOSAL
3
Advisory Vote on the Frequency of Future Advisory Votes on Named Executive Officer CompensationSEE PAGE 58
Our Board recommends a vote FOR a frequency period of every year (an annual vote)
PROPOSAL
4
Approval of the Discover Financial Services 2023 Omnibus Incentive Plan SEE PAGE 59
Our Board recommends a vote FOR this Proposal
PROPOSAL
5
Ratification of Appointment of Independent Registered Public
Accounting Firm 
SEE PAGE 66
Our Board recommends a vote FOR this Proposal
Questions and Answers
Please see the Questions and Answers About the Annual Meeting and Voting section beginning on page 83 for important information about the proxy materials, voting, and the Annual Meeting.
6
2023 Proxy Statement


Table of Contents
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Except as otherwise indicated or unless the context otherwise requires, “Discover Financial Services,” “Discover,” “DFS,” “we,” “us,” “our,” and “the Company” refer to Discover Financial Services and its subsidiaries.
We own or have rights to use the trademarks, trade names and service marks that we use in conjunction with the operation of our business, including, but not limited to: Discover®, PULSE®, Cashback Bonus®, Discover Cashback Checking®, Discover it®, College Covered®, and Diners Club International®. All other trademarks, trade names and service marks included in this proxy statement are the property of their respective owners.
www.discover.com
7


Board and Governance Matters
PROPOSAL
1
Election of Directors
The Board of Directors recommends that you vote “FOR” the election of each director nominee. Proxies solicited by our Board will be voted “FOR” the election of each nominee unless otherwise instructed.
The Board believes strong corporate governance is critical to achieving the Company’s long-term goals and maintaining the trust and confidence of investors, employees, customers, regulatory agencies, and other stakeholders. The Board oversees the Company’s business and directs its management. The non-employee directors of the Board are not involved in day-to-day operations. Instead, the Board meets periodically with management to review the Company’s executive succession plans, Annual Operating Plan (the “Annual Plan”), multi-year strategic plan and performance against such plans, risks, and business strategies. Directors also consult with management about the Company’s performance outside of formal meetings, which include opportunities for directors to have in-depth conversations with management about particular areas of the business.
All of the director nominees set forth below are standing for election at the Annual Meeting. Director nominees stand for election at each annual meeting of shareholders. Each director holds office until his or her successor has been duly elected and qualified or the director’s earlier resignation, death or removal. The nominees below are current directors of the Company, with the exception of Ms. Sibblies, and each nominee, including Ms. Sibblies, has indicated that he or she will serve if elected. We do not anticipate that any nominee will be unable or unwilling to stand for election, but if that happens, your proxy will be voted for another person nominated by the Board. The Board may also choose to reduce the number of directors to be elected, as permitted by our Bylaws. The experience, qualifications, attributes and skills of each of the Company’s director nominees are set forth below.
After serving more than 13 years on our Board, including as Chair of the Audit Committee, Dr. Glassman will be retiring from the Board at the 2023 Annual Meeting. In addition, after serving more than 15 years on our Board, including as Chair of the Risk Oversight Committee, Mr. Moskow will also be retiring in May. Both directors are not standing for re-election in accordance with the Company’s director retirement age policy. The Board has determined to extend Ms. Bush’s service in accordance with the Company’s policy until the 2024 Annual Meeting of Shareholders. In addition, Ms. Sibblies, who brings extensive financial services experience to the Board, which includes serving as a chief financial officer and chief accounting officer of a multinational consumer finance company, is being recommended as a director nominee to be elected at this year’s Annual Meeting. In light of these changes, the size of our Board will be reduced to 12 as of the Annual Meeting.
The Board believes that an effective board consists of a diverse group of individuals who bring a variety of complementary skills and experiences. The Nominating, Governance and Public Responsibility Committee and the Board consider the skills and experiences of the directors in the broader context of the Board’s overall composition, with a view toward constituting a board that has the best skill set and experience to oversee the Company’s business. Our directors have a combined wealth of leadership experience derived from extensive service guiding large, complex organizations as executive leaders or board members, and in government. They collectively have substantive knowledge and skills applicable to our business, including in the areas of regulation, public accounting and financial reporting, finance, risk management, business development, cybersecurity and technology, marketing, operations, strategic planning, management development and succession, compensation, corporate governance, public policy, climate/sustainability, international matters, banking, and financial services.
The Nominating, Governance and Public Responsibility Committee regularly reviews the composition of the Board and its assessment of the Board’s performance in light of our evolving business requirements to maintain a Board with the appropriate mix of skills and experiences needed for the broad set of challenges that the Company confronts. Annually, the Independent Chairman conducts individual interviews with each director that include topics such as Board and committee performance and effectiveness, leadership of the Board and committees, and the performance of individual directors. The Independent Chairman then reports the results of these interviews to the full Board during its self-evaluation. The full Board evaluates such results and also conducts an evaluation of the Independent Chairman. In addition, each committee annually conducts a self-evaluation.
8
2023 Proxy Statement

Board and Governance Matters
Our Director Nominees
 dfs-20230317_g50.jpg 
JEFFREY S. ARONIN Independent
Career Highlights
Founder, chairman and chief executive officer of Paragon Biosciences, LLC, an affiliated global life science innovation and investment firm
Established and is chairman of several of Paragon’s portfolio companies - Harmony Biosciences (Nasdaq – HRMY), Castle Creek Biosciences, Emalex Biosciences, Evozyne and CIRC Biosciences since 2017
Previously served as CEO of several global biopharmaceutical companies focused on therapies for people with high unmet medical needs
Relevant Skills and Experience
CEO, compensation and succession planning
Strategy, business development, international business, finance and brand marketing
Operations and day-to-day management of a global corporation in a regulated industry
Structuring and execution of strategic corporate transactions, including mergers and acquisitions
Other Public Company Board Service
Current: Harmony Biosciences Holdings, Inc. (2017 - present)
During Past Five Years: None
Discover Committees
Compensation and Leadership Development
Race/Ethnicity: White
Gender: Male
Director Since: 2007
Age: 55
 dfs-20230317_g51.jpg 
MARY K. BUSHIndependent
Career Highlights
Founder and chairman of Bush International, LLC, a financial and business strategy advisory firm, since 1991
Inaugural head and managing director of the Federal Housing Finance Board, where she established financial policies and oversaw management and safety and soundness for the nation’s Federal Home Loan Banks
Founder and former head of the international finance department of Fannie Mae, where she led funding transactions globally
Appointed by President Reagan as the U.S. Alternate Executive Director of the International Monetary Fund Board
Served on the U.S. Department of the Treasury’s Advisory Commission on the Auditing Profession
Relevant Skills and Experience
Banking, international finance, corporate governance and public policy
Corporate finance and strategy and the operations and regulation of financial services businesses
Other Public Company Board Service
Current: Bloom Energy (2007 - present); T. Rowe Price Group, Inc. (2013 - present)
During Past Five Years: ManTech International Corporation (2006 - 2022); Marriott International, Inc. (2008 - 2020)
Discover Committees
Nominating, Governance and Public Responsibility (Chair); Risk Oversight
Race/Ethnicity: Black
Gender: Female
Director Since: 2007
Age: 74
www.discover.com
9

Board and Governance Matters
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GREGORY C. CASE Independent
Career Highlights
Chief executive officer of Aon plc, a leading global professional services firm providing advice and solutions in risk, retirement and health, since 2005 and member of Aon’s board of directors
President of Aon plc 2005 to 2018
Worked at McKinsey & Company, an international management consulting firm, for 17 years prior to joining Aon, most recently serving as head of the Financial Services Practice
Relevant Skills and Experience
20 years of experience in the insurance and financial services industries, including in the areas of risk management services, insurance and reinsurance brokerage, and through his management consulting and banking experience
Business operations and the day-to-day management of a large, regulated global financial corporation
Public company CEO, strategy and business development
Compensation and succession planning, finance and risk management
Other Public Company Board Service
Current: Aon plc (2005 - present)
During Past Five Years: None
Discover Committees
Compensation and Leadership Development (Chair)
Race/Ethnicity: White
Gender: Male
Director Since: 2007
Age: 60
  dfs-20230317_g53.jpg
CANDACE H. DUNCANIndependent
Career Highlights
Retired managing partner of the Washington, D.C. metropolitan area of KPMG LLP, a global network of professional firms providing audit, tax and advisory services, who served until November 2013
Member of KPMG LLP board of directors from 2009 to 2013
Served as chair of KPMG’s board’s nominating committee as well as the partnership and employer of choice committee
Served in various roles at KPMG, including managing partner for audit for the Midatlantic area and audit partner in charge for the Virginia business unit
Relevant Skills and Experience
Leading and managing a large accounting firm’s growth priorities across its audit, tax and advisory functions in key markets
Strong financial and accounting background, gained through her many years of experience at KPMG LLP, including her experience as a lead audit partner for major international and domestic companies
Served clients on a wide range of accounting and operational issues, public securities issuances and strategic corporate transactions
Public company accounting, financial statements and corporate finance, corporate governance and risk management
Other Public Company Board Service
Current: Teleflex Inc. (2015 - present)
During Past Five Years: FTD Companies, Inc. (2014 - 2019)
Discover Committees
Audit; Nominating, Governance and Public Responsibility
Race/Ethnicity: White
Gender: Female
Director Since: 2014
Age: 69
10
2023 Proxy Statement

Board and Governance Matters
 dfs-20230317_g54.jpg 
JOSEPH F. EAZOR Independent
Career Highlights
Retired in August 2022 as president and chief executive officer of Clario (formerly ERT and Bioclinica), a global data and technology company for clinical trials since assuming role in October 2020
Former president and chief executive officer of Conifer Health Solutions, LLC, a healthcare business solutions organization, from January 2020 to August 2020
Former executive vice president and chief customer officer of Oracle Corporation, from July 2019 to January 2020
Former chief executive officer of Rackspace, a leading managed cloud company, from 2017 to 2019
Former president and chief executive officer of EarthLink, Inc., a leading communications and IT services provider, from 2014 to 2017
Former business unit leader for Hewlett-Packard and Electronic Data Systems Corporation
Relevant Skills and Experience
Public company CEO with experience in technology and cybersecurity
Cybersecurity experience, including business operations incorporating data protection and transmission, proactive strategy and response development, and incident evaluation, management and communications strategy
International strategy and business development in technology and IT services
Management consulting experience from his time as a senior partner with McKinsey & Company and as a partner and board member of A.T. Kearney, Inc.
Other Public Company Board Service
Current: None
During Past Five Years: Clario (formerly ERT and Bioclinica) (2020 - 2023), EarthLink (2014 - 2017), Commvault Systems (2015 - 2018)
Discover Committees
Audit
Race/Ethnicity: White
Gender: Male
Director Since: 2016
Age: 60
 dfs-20230317_g55.jpg 
ROGER C. HOCHSCHILD
Career Highlights
Chief executive officer and president of Discover since October 2018
President and chief operating officer of Discover from 2004 to 2018
Executive vice president, chief administrative and strategic officer for Morgan Stanley from 2001 to 2004
Executive vice president, chief marketing officer - Discover from 1998 to 2001, when Discover was a part of Morgan Stanley
Relevant Skills and Experience
Deep understanding of the Company’s business and the financial services industry
Strategic planning and business development, risk management, consumer financial services, brand marketing, and information technology and cybersecurity
Operations and the day-to-day management of a global financial corporation, which plays a critical role in board discussions regarding strategic planning and business development for the Company
Other Public Company Board Service
Current: Principal Financial Group (2015 - present)
During Past Five Years: None
Discover Committees
None
Race/Ethnicity: White
Gender: Male
Director Since: 2018
Age: 58
www.discover.com
11

Board and Governance Matters
 dfs-20230317_g56.jpg 
THOMAS G. MAHERAS Independent Chairman
Career Highlights
Managing partner of Tegean Capital Management, LLC since 2008 and a partner of Iron Park Capital Management, LLC since 2019, two investment advisory firms
Former chairman and co-chief executive officer of Citi Markets and Banking, the investment banking division of Citigroup, Inc., where he held roles of increasing responsibility after starting his career as a fixed-income trader at Salomon Brothers
Served as chairman of the U.S. Treasury Department Borrowing Advisory Committee
Served as an executive committee member of the Board of Directors of the Securities Industry and Financial Markets Association
Relevant Skills and Experience
Government and regulatory, risk management, banking and capital markets experience, including 23 years at Citigroup, Inc. where his responsibilities included leading the global capital markets business
Operations and the day-to-day management of a global financial services organization
CEO, financial background and banking and financial services
Other Public Company Board Service
Current: None
During Past Five Years: None
Discover Committees
Risk Oversight
Race/Ethnicity: White
Gender: Male
Director Since: 2008
Independent Chairman
Since: 2020
Age: 60
12
2023 Proxy Statement

Board and Governance Matters
 dfs-20230317_g57.jpg 
JOHN OWEN Independent
Career Highlights
Retired in March 2021 as chief operating officer of Regions Financial Corp., one of the nation’s largest full-service providers of consumer and commercial banking, wealth management and mortgage products and services after a successful 12-year tenure with Regions
Held various senior management roles at Regions including head of Operations and Technology, head of Consumer Services Group, head of Regional Banking Group, and head of Enterprise Services and Consumer Banking
Served on the boards of directors for the Birmingham Business Alliance, Innovation Depot and the United Way of Central Alabama, as well as the advisory board for the UAB Collat School of Business
Relevant Skills and Experience
Over 38 years of experience in banking and information technology that spans multiple industries including banking, insurance, airlines, and the defense industry
Valuable expertise in information security, cybersecurity, strategy and operations, and technological innovation within the financial services industry
Under his leadership at Regions, the bank consistently evolved how it served its customers, such as unveiling an overhauled and upgraded mobile app for both iOS and Android devices
Oversaw Regions’ technological transformation, including the deployment of new mobile applications and the streamlining of technical infrastructure to improve the customer experience all within a full-service digital environment
Leadership and clear understanding of the overall governance structure associated with a highly regulated industry such as banking
Public company compliance, technology and climate and sustainability experience
Other Public Company Board Service
Current: None
During Past Five Years: None
Discover Committees
Risk Oversight
Race/Ethnicity: White
Gender: Male
Director Since: 2022
Age: 62
www.discover.com
13

Board and Governance Matters
 dfs-20230317_g58.jpg 
DAVID L. RAWLINSON II Independent
Career Highlights
President and chief executive officer of Qurate Retail, Inc., a Fortune 500 global retailer, since October 2021, and previously served as president and chief executive officer-elect for Qurate Retail, Inc. since August 2021
Chief executive officer of NielsenIQ (formerly Nielsen Global Connect), a global data company from February 2020 to August 2021
Joined W.W. Grainger, Inc., an industrial supplies company in 2012 and beginning in November 2015, served as President of the Global Online Business at Grainger until February 2020
Served as a White House Fellow and in appointed positions for both the George W. Bush and Obama administrations
Relevant Skills and Experience
Global e-commerce, consumer trends, consumer data, and digital business-to-business operations
Formerly ran or oversaw compliance and cybersecurity functions or projects
Public company CEO, strategy and business development, and audit qualified
Government and regulatory, and climate and sustainability experience
Other Public Company Board Service
Current: Qurate Retail, Inc. (2021 - present)
During Past Five Years: Nielson Holdings plc (2017 - 2021)
Discover Committees
Audit
Race/Ethnicity: Black
Gender: Male
Director Since: 2021
Age: 47
 dfs-20230317_g59.jpg 
BEVERLEY A. SIBBLIES Independent
Career Highlights
Founder and President of BAS Financial Corp., a family office that provides personalized financial services since 2009
Former chief financial officer and chief accounting officer of HSBC Finance Corporation, a multi-product, multi-channel consumer finance company with operations in the United States, Canada and the United Kingdom
Former executive vice president and chief financial officer of EMC Mortgage Corporation, a Texas based, wholly-owned subsidiary of Bear Stearns Companies Inc.
Chair of the Audit & Risk Committee of Discover Bank
Relevant Skills and Experience
Over 37 years of experience in financial services
Maintaining a corporate culture that emphasizes the importance of compliance with laws and regulations and consumer protection
Articulate in corporate strategy, as well as institutional risk appetite and polices
Other Public Company Board Service
Current: None
During Past Five Years: None
Discover Committees
Ms. Sibblies’ committee assignments have not yet been determined
Race/Ethnicity: Black
Gender: Female
Age: 61
14
2023 Proxy Statement

Board and Governance Matters
 dfs-20230317_g60.jpg 
MARK A. THIERER Independent
Career Highlights
Managing partner of AssetBlue Investment Group since June 2017
Interim chief executive officer of Dentsply Sirona Inc., a manufacturer of dental implants, from October 2017 through February 2018
Chief executive officer of OptumRx, a pharmacy care services company, from July 2015 until September 2017
Chairman and chief executive officer of Catamaran Corporation, one of the nation’s largest pharmacy benefit management companies, from March 2011 until it combined with OptumRx in 2015
Relevant Skills and Experience
Public company CEO, strategy, business development, corporate governance, and technology and cybersecurity
Leadership experience and knowledge of operations and the day-to-day management of a national corporation
Structuring and execution of strategic corporate transactions, including mergers and acquisitions
Other Public Company Board Service
Current: P3 Health Partners, Inc. (2021 - present), Senior Connect Acquisition Corp. (2021 - present)
During Past Five Years: Xeris Pharmaceuticals, Inc. (2019 – 2021)
Discover Committees
Compensation and Leadership Development; Nominating, Governance and Public Responsibility
Race/Ethnicity: White
Gender: Male
Director Since: 2013
Age: 63
 dfs-20230317_g61.jpg 
JENNIFER L. WONG Independent
Career Highlights
Chief operating officer of Reddit, Inc., a community and discussion platform, since 2018, where she oversees business strategy and growth, and related teams for the company
Previously served as president of digital at Time, Inc. and then its chief operating officer from 2016 to 2018, where she led growth strategy and digital business transformation
Chief business officer from 2011 to 2015 at Popsugar, Inc., a media and technology company, where she led business operations and the company’s media and commerce businesses
Held several executive management roles at AOL and worked with a range of digital media and technology clients at McKinsey & Company earlier in her career
Relevant Skills and Experience
Building digital products and platforms and understanding of digital and social media as an essential marketing tool
Cybersecurity experience, including proactive strategy and response development and incident evaluation, management and communications strategy
Technology, business strategy and growth development, and brand marketing
Other Public Company Board Service
Current: IMAX Corporation (March 2023 - present)
During Past Five Years: Group Nine Acquisition Corp. (2021 - 2022)
Discover Committees
Risk Oversight
Race/Ethnicity: Asian
Gender: Female
Director Since: 2019
Age: 48
www.discover.com
15


Corporate Governance
Process for Nominating Directors
Nomination of Directors
The Nominating, Governance and Public Responsibility Committee is responsible for identifying, evaluating, and recommending candidates to the Board. The Nominating, Governance and Public Responsibility Committee may consider director candidates from a wide range of sources, including shareholders, officers, and directors. The Board is responsible for nominating directors for election by the shareholders and filling any vacancies on the Board that may occur. The Company has also recently revised its Corporate Governance Policies in light of its commitment to providing a director nomination process that is fair and equitable to all nominating shareholders. The Corporate Governance Policies can be found on the investor relations page of our internet site, www.discover.com.
Shareholder Recommendations for Director Candidates
Fulfilling its responsibility to identify, evaluate, and recommend director candidates, the Nominating, Governance and Public Responsibility Committee accepts shareholder recommendations of director candidates and evaluates such candidates in the same manner as other candidates. The Nominating, Governance and Public Responsibility Committee determines the need for additional or replacement Board members, then identifies and evaluates the director candidate under the Director Qualifications described below based on the information the Nominating, Governance and Public Responsibility Committee receives with the recommendation or which it otherwise possesses, which may be supplemented by certain inquiries. If the Nominating, Governance and Public Responsibility Committee determines, in consultation with other directors, including the Chairman of the Board, that a more comprehensive evaluation is warranted, the Nominating, Governance and Public Responsibility Committee may then obtain additional information about the director candidate’s background and experience, including by means of interviews. The Nominating, Governance and Public Responsibility Committee and the Chairman of the Board will then evaluate the director candidate further, again using the qualification criteria described herein. The Nominating, Governance and Public Responsibility Committee receives input on such director candidates from other directors, including the Chairman of the Board, and recommends director candidates to the full Board for nomination. The Nominating, Governance and Public Responsibility Committee may engage a third party to assist in identifying director candidates or to assist in gathering information regarding a director candidate’s background and experience. If the Nominating, Governance and Public Responsibility Committee engages a third party, the Company pays for these services.
Shareholders who wish to recommend a candidate for the Nominating, Governance and Public Responsibility Committee’s consideration must submit the recommendation in writing in accordance with the Policy Regarding Director Candidates Recommended by Shareholders, available through the investor relations page of our internet site, www.discover.com.
In 2022, there were no director candidates submitted by shareholders. Shareholders may make recommendations at any time, but recommendations for consideration as nominees at the annual meeting of shareholders must be received not less than 120 days before the first anniversary of the date that the proxy statement was released to shareholders in connection with the previous year’s annual meeting.
To submit a candidate for consideration for nomination at the 2024 Annual Meeting of Shareholders, shareholders must submit the recommendation, in writing, by November 30, 2023. The written notice must demonstrate that it is being submitted by a shareholder of record of the Company and include information about each proposed director candidate, including name, age, business address, principal occupation, principal qualifications, and other relevant biographical information. In addition, the shareholder must confirm the candidate’s consent to serve as a director. Shareholders must send recommendations to Discover Financial Services, 2500 Lake Cook Road, Riverwoods, Illinois 60015, Attention: Corporate Secretary, and they will be forwarded to the Nominating, Governance and Public Responsibility Committee.
In addition, shareholders may nominate director candidates by complying with the advance notice or proxy access Bylaw provisions or Rule 14a-19 under the Exchange Act discussed at the end of this Proxy Statement in the Shareholder Proposals and Director Nominations for the 2024 Annual Meeting section.
Director Qualifications
Our Corporate Governance Policies describe our director qualifications. The Board seeks members who combine a broad and relevant spectrum of experience and expertise with a reputation for integrity. Directors should have experience in positions with a high degree of responsibility and be leaders in the companies or institutions with which they are affiliated. Directors should be selected based upon their potential contributions to the Board and management and their ability to represent the interests of shareholders. Also, the Board will consider the diversity of a candidate’s perspectives, background, and other demographics. Generally, no director is permitted to serve on more than three additional public company boards (in addition to the Company’s Board).
16
2023 Proxy Statement

Corporate Governance
Retirement Age Policy
The Nominating, Governance and Public Responsibility Committee continues to evaluate the composition of the Board and its Committees, including the mix of skills and experience of existing directors, as well as the potential benefits from new and different perspectives and skill sets. The Company’s Corporate Governance Policies reflect the Board’s recognition of the importance of periodic Board refreshment and maintaining an appropriate balance of tenure, diversity, skills, experience and perspectives on the Board. In 2022, the Policies were amended to provide that beginning with the Company’s 2023 Annual Meeting, directors will not be eligible for re-election after their 75th birthday and directors who have reached the age of 75 should not expect to be re-nominated for election by the Board. To ensure the appropriate mix of skills and experience is maintained and allow for an orderly transition of leadership on our Board and its Committees, the amended Policies further provide that if more than two directors are impacted by this requirement at any one annual meeting of shareholders, the Board may determine to extend a director’s service until the subsequent annual meeting of shareholders. In accordance with the Policies, Dr. Glassman and Mr. Moskow will not be nominated for re-election in 2023. The Board has determined to extend Ms. Bush’s service in accordance with the Company’s Policies until the 2024 Annual Meeting of Shareholders.
Information Concerning Nominees for Election as Directors
Director Independence
Our Board of Directors adopted our Corporate Governance Policies, which contain the director independence guidelines and provide that a majority of the members of the Board and each member of the Audit Committee, the Compensation and Leadership Development Committee (the “Compensation Committee”), the Nominating, Governance and Public Responsibility Committee and the Risk Oversight Committee must consist of directors who are independent. The Board uses these guidelines to assist it in determining whether directors qualify as “independent” pursuant to the guidelines and the requirements set forth in the New York Stock Exchange’s (“NYSE”) Corporate Governance Rules (the “Rules”). In each case, the Board broadly considers all relevant facts and circumstances and applies the guidelines and the Rules in determining whether directors qualify as “independent.”
When assessing the independence of director nominees, the Nominating, Governance and Public Responsibility Committee considers the impact that tenure may have on the independence of certain longer-tenured incumbent Board nominees. The Nominating, Governance and Public Responsibility Committee and the Board determined that the independence of our longer-tenured Directors had not been diminished as these directors continued to thoughtfully challenge and provide reasoned, balanced, and insightful guidance to management. The Board values the perspectives that such directors contribute to Board discussions, having served Discover during periods of various industry and company-specific developments and with different members of management over the years.
Pursuant to our Corporate Governance Policies and the Rules, the Board reviewed the independence of each current director and Ms. Sibblies. During this review, the Board considered transactions and relationships between directors or any member of their immediate family (or any entity of which a director or an immediate family member is an executive officer, general partner or significant equity holder) and the Company and its subsidiaries and affiliates. The Board also considered whether there were any transactions or relationships between directors or any member of their immediate family and members of the Company’s senior management. The purpose of this review was to determine whether any such relationships or transactions existed that were inconsistent with a determination that the director is independent.
As a result of this review, the Board affirmatively determined that Jeffrey S. Aronin, Mary K. Bush, Gregory C. Case, Candace H. Duncan, Joseph F. Eazor, Cynthia A. Glassman, Thomas G. Maheras, Michael H. Moskow, John B. Owen, David L. Rawlinson, Beverley A. Sibblies, Mark A. Thierer, and Jennifer L. Wong are independent of the Company and its management under the standards set forth in the Corporate Governance Policies and the Rules. The Board determined that one of our directors, Roger C. Hochschild, is not independent because of his employment as our Chief Executive Officer and President (“CEO”).
In determining that each of the directors other than Mr. Hochschild is independent, the Board considered, among other things, certain relationships, which it determined were immaterial to the directors’ independence. The Board considered that the Company and its subsidiaries in the ordinary course of business have, during the last three years, sold products and services to, and/or purchased products and services from, companies at which some of our directors were officers during 2022. In each case, the amount paid to or received from these companies in each of the last three years did not exceed the greater of $1,000,000 or 2% of that organization’s consolidated gross revenues, the threshold set forth in our Corporate Governance Policies and the Rules. Our Corporate Governance Policies are available through the investor relations page of our internet site, www.discover.com, and in print free of charge to any shareholder who requests a copy.
www.discover.com
17

Corporate Governance
Board Roles and Responsibilities
Board and Committee Meetings
Our Board held 12 meetings during 2022. Each director attended at least 75% of the total number of meetings of the Board and the standing committees on which such director served that were held while the director was a member. Our Board has established the following standing committees: Audit, Compensation and Leadership Development, Nominating, Governance and Public Responsibility, and Risk Oversight. The membership and function of each committee and the number of meetings held by each committee during 2022 is described below.
AUDITMEMBERS
15 Meetings in 2022
Dr. Glassman (Chair)
Ms. Duncan
Mr. Eazor
Mr. Rawlinson
REPORT: Page 67
Primary Responsibilities
Oversee the integrity of our consolidated financial statements, our system of internal control over financial reporting, the management of our exposure to risk, and the qualifications and independence of our independent registered public accounting firm.
Oversee the internal audit function, including the performance of our Chief Audit Executive.
Sole authority and responsibility to select, determine the compensation of, evaluate the performance of, and, when appropriate, replace our independent registered public accounting firm.
Oversee the Company’s compliance with legal and regulatory requirements.
COMPENSATION AND LEADERSHIP DEVELOPMENTMEMBERS
7 Meetings in 2022
Mr. Case (Chair)
Mr. Aronin
Mr. Thierer
REPORT: Page 45
Primary Responsibilities
Annually review and approve the corporate goals and objectives relevant to the compensation of the CEO and evaluate his performance in light of these goals.
Determine the compensation of our executive officers and other appropriate officers.
Oversee risk management associated with our compensation practices.
Oversee our incentive and stock-based compensation plans.
Oversee plans for management development and succession.
NOMINATING, GOVERNANCE AND PUBLIC RESPONSIBILITYMEMBERS
7 Meetings in 2022
Ms. Bush (Chair)
Ms. Duncan
Mr. Thierer
Primary Responsibilities
Identify and recommend candidates for election to our Board and each Board committee.
Consider matters of corporate governance and make recommendations or take action.
Oversee our policies, programs, strategies and reporting related to environmental, social and governance matters.
Oversee the annual evaluation of the members of our Board and its committees, and management.
Recommend director compensation and benefits.
Review annually our Corporate Governance Policies.
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2023 Proxy Statement

Corporate Governance
RISK OVERSIGHTMEMBERS
7 Meetings in 2022
Mr. Moskow (Chair)
Ms. Bush
Mr. Maheras
Mr. Owen
Ms. Wong
Primary Responsibilities
Oversee the enterprise-wide risk management framework, make recommendations to the Board on risk management policies and the Company’s risk appetite and tolerance, oversee risk management governance and policies and perform other functions pursuant to the Federal Reserve’s regulations.
Oversee the performance of our Chief Risk Officer.
Review and approve the Company’s information security program and review the quality and effectiveness of the Company’s technology security.
Oversee capital planning and liquidity risk management activities.
Our Board has adopted a written charter for each of the Audit, Compensation and Leadership Development, Nominating, Governance and Public Responsibility and Risk Oversight Committees setting forth the roles and responsibilities of each committee. The committee charters are available through the investor relations page of our internet site, www.discover.com.
All members of the Audit, Compensation and Leadership Development, Nominating, Governance and Public Responsibility, and Risk Oversight Committees satisfy the standards of independence applicable to members of such committees. In addition, the Board has determined that all members of the Audit Committee are financially literate and are “audit committee financial experts” as such term is defined in Item 407(d) of Regulation S-K under the Securities and Exchange Act of 1934 (the “Exchange Act”) and have accounting or related financial management expertise.
Board Leadership Structure
The Company has had an independent Chairman separate from the CEO role since 2019. Mr. Maheras serves as the Company’s independent Chairman since May 2020.
The Company’s Bylaws, as well as the Board of Directors Corporate Governance Policies, provide that the office of the Chairman and the office of the Chief Executive Officer may be, but need not be, held by the same person. The Company has a strong independent Board, with all directors except for Mr. Hochschild having been determined to be independent under NYSE listing standards. Further, as previously noted, all standing committees of the Board are composed solely of independent directors. The Board continues to believe that having an Independent Chairman, separate from the Chief Executive Officer role, is the most appropriate leadership structure at this time. Although the Board believes that this best serves the interests of the Company and its shareholders, the Board retains the flexibility to combine the roles in the future. The Board recognizes its responsibility for the establishment and maintenance of the most effective leadership structure for the Company, taking into account all relevant facts and circumstances. Pursuant to the Board of Directors Corporate Governance Policies, the Board has indicated that it will appoint a Lead Director whenever the position of Chairman is not held by an independent director.
The Independent Chairman:
presides at all meetings of the Board, and has the authority to call, and will lead, non-employee director sessions and independent director sessions;
approves Board meeting agenda items and the schedule of Board meetings;
helps facilitate communication between senior management and the independent directors;
will be available, as appropriate, for consultation and direct communication with shareholders;
acts as a mentor to the CEO; and
participates and provides leadership on CEO performance evaluation, succession planning, and compensation decisions.
Non-Employee Director Meetings
In accordance with our Corporate Governance Policies, the non-employee directors meet regularly in executive sessions without management present. Our Corporate Governance Policies also require that if any non-employee directors are not independent, then the independent directors will meet in a separate independent director session at least once per year. Currently, all non-employee directors are independent. The Independent Chairman presides over executive and independent director sessions.
www.discover.com
19

Corporate Governance
Environmental, Social, and Governance (“ESG”)
Our ESG Philosophy
We make it our mission every day to contribute to a more equitable and sustainable world so everyone can achieve a brighter financial future. Guided by our ESG philosophy, and our governance commitment to “Doing the Right Thing” in everything we do, our approach identifies strategic ESG areas to further scale our impact:
DE&I (Diversity, Equity & Inclusion): We make DE&I a part of everything we do so our employees can thrive, and we can best serve our customers.
Social Impact: We use our full platform of jobs, products, supplier spend, philanthropy, and more to advance equity - and motivate others to effect change.
Environmental Sustainability: We contribute to a more sustainable world through resource conservation and reducing our operational impact.
ESG Governance Framework
The Nominating, Governance and Public Responsibility Committee, in coordination with other committees of the Board, oversees our policies, programs, strategies and reporting related to ESG matters. Our ESG program is led by our Chief ESG and Social Impact Officer who reports to a member of our Executive Committee and provides regular updates to the Nominating, Governance and Public Responsibility Committee. We also plan to issue our inaugural 2022 ESG Report later this year which will detail our progress across these areas.
Board Role in Risk Oversight
The Board is responsible for approving the Company’s enterprise-wide risk management framework, which is described in the Company’s Enterprise Risk Management Policy and certain additional risk management policies. The Board receives reports of material exceptions to such policies. The Board has also delegated certain of its risk oversight responsibilities to its committees and regularly receives reports from the committees on risk management matters. Additionally, the Board approves the risk appetite and limits, and capital targets and thresholds of the Company. It also appoints the Chief Risk Officer, Chief Compliance Officer (who reports to the Chief Risk Officer), Chief Audit Executive and other risk management function leaders, as appropriate. The Board regularly devotes time during its meetings to review and discuss the most significant risks facing the Company over the short-, medium-, and long-term, and management’s responses to those risks. During these discussions, the CEO, the Chief Risk Officer, the Chief Legal Officer, General Counsel and Secretary and/or the Chief Financial Officer present management’s assessment of risks, the timeframe over which the risk may occur, a description of the most significant risks facing the Company, and any mitigating factors and plans or practices in place to address and monitor those risks. Within these discussions, the Board receives updates from senior executives including the Chief Risk Officer and the Chief Information Security Officer on the risks posed to the Company by cybersecurity threats and the Company’s information security program, including the results of tabletop simulations performed by management. In addition to these discussions, the Board receives annual information security training.
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2023 Proxy Statement

Corporate Governance
RISK OVERSIGHT COMMITTEE
The Risk Oversight Committee is responsible for overseeing our risk management policies and the operations of the Company’s enterprise-wide risk management framework, and capital planning and liquidity risk management activities. The Risk Oversight Committee is responsible for, among other things:
approving and periodically reviewing our risk management policies;
overseeing the operation of policies and procedures which establish risk management governance, and risk-control infrastructure;
overseeing the operation of processes and systems for implementing and monitoring compliance with such policies and procedures;
reviewing and making recommendations to the Board, as appropriate, regarding the Company’s risk management framework, key risk management policies and the Company’s risk appetite and tolerance;
receiving and reviewing regular reports from our Chief Risk Officer on current and emerging risks, the status of and changes to risk exposures, policies, procedures and practices, and the steps management has taken to monitor and control risk exposures;
reviewing and approving the Company’s information security program, which seeks to mitigate information security risks, including cybersecurity risks;
review the quality and effectiveness of the Company’s technology security, and periodically review, appraise and discuss with management the quality and effectiveness of the Company’s information technology security, data privacy and disaster recovery capabilities; and
receiving reports regarding compliance with risk appetite limits, risk management policies, procedures and controls.
The Risk Oversight Committee shares information with (which it may do through the Chair of the Committee) and meets in joint session with the Audit Committee as necessary or desirable to provide the committees with the information necessary to permit them to fulfill their duties and responsibilities with respect to oversight of risk management matters. For example, at least quarterly, the Risk Oversight and Audit Committees meet in joint session and receive updates from the Chief Information Security Officer on the Company’s information security program, including trends and developments regarding information security risks and threats and the results of tabletop simulations performed by management.
The Risk Oversight Committee also authorizes the Company’s Risk Committee, which is comprised of the members of the Company’s Executive Committee and the Discover Bank President. The Chief Risk Officer, a member of the Executive Committee, serves as the Risk Committee chair. The Risk Committee provides a forum for key members of our executive management team to review and discuss credit, market, liquidity, operational, legal and compliance and strategic risks across the Company and for each business unit.
AUDIT COMMITTEE
Our Audit Committee assists the Board in the oversight of, among other things, the integrity of our consolidated financial statements, our compliance with legal and regulatory requirements, our system of internal controls and the qualifications and independence of our independent registered public accounting firm. With respect to compliance matters, our Audit Committee approves our Compliance Policy and reinforces the importance of compliance risk management. The Audit Committee assists the Board in its oversight of the Company’s anti-money laundering program. In addition, the Audit Committee receives reporting on the effectiveness of our Compliance Risk Management Program. Our Audit Committee also, taking into consideration the Board’s allocation of the review of risk among various committees of the Board, receives and reviews reports from the Chief Risk Officer, Chief Compliance Officer and other members of management as the Audit Committee deems appropriate. These reports include a review of the guidelines and policies for assessing and managing the Company’s exposure to risks, the corporation’s major financial risk exposures, and the steps management has taken to monitor and control such exposures. The Audit Committee shares information with (which it may do through the Chair of the Committee) and meets in joint session with the Risk Oversight Committee as necessary or desirable to provide the committees with the information necessary to permit them to fulfill their duties and responsibilities with respect to oversight of risk management matters.
The Audit Committee provides oversight of the Company’s internal audit function. The Audit Committee reviews and approves the appointment, replacement and compensation of the Chief Audit Executive and the charter, budget and staffing levels of the Company’s internal audit function. The Audit Committee reviews and approves the rolling twelve month audit plan. The Audit Committee also receives periodic reports from the Chief Audit Executive on the status of the annual audit plan, including significant results and the status of corrective actions. In addition, the Audit Committee provides oversight of the Company’s compliance with legal and regulatory requirements. The Audit Committee reviews and approves the budget and staffing levels of the Company’s Compliance department, its annual testing plan and the Company’s Compliance policy.
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Corporate Governance
COMPENSATION AND LEADERSHIP DEVELOPMENT COMMITTEE
The Compensation Committee is responsible for overseeing risk management associated with the Company’s employee compensation practices. It annually reviews the Company’s compensation plans and practices to assess whether employee plans contain features that might encourage excessive risk-taking that could threaten the value of the Company, are reasonably likely to have a material adverse effect on the Company or could result in a failure to comply with regulatory requirements. The Compensation Committee regularly reviews reports from the Company’s Chief Risk Officer, and meets with the Chief Risk Officer and the Risk Oversight and Audit Committees of the Board of Directors to discuss the annual employee incentive compensation risk assessment and to review outcomes of certain risk events and any impact to compensation decisions.
Separately, the Compensation Committee meets with the Company’s Chief Risk Officer to monitor the results of the Company’s incentive compensation program payments for certain employees, including our NEOs.
The Compensation Committee also oversees the Company’s succession planning process. On an annual basis, management conducts succession planning for all of the Company’s officer level roles, including our NEOs. Management further identifies critical roles beyond the officer level where there are or may be uniquely strong needs for immediate successors, where restructuring of the role is not likely to be a viable succession plan, and where having the role unfilled for a period of time could create regulatory, risk management or business continuity gaps. Annually, our CEO and Chief Human Resources Officer partner to conduct succession planning for our NEOs and other executives. For each of our NEOs, the role is reviewed to determine options for succession and development needed to increase succession readiness. Consideration is given to external hiring where appropriate. Management then reviews NEO succession plans with the Compensation Committee and the Board.
Code of Ethics and Business Conduct
The Company maintains a Code of Ethics and Business Conduct applicable to all directors, officers and employees, including senior financial officers, and provides a statement of Discover’s policies for conducting business legally and ethically. The Code of Ethics and Business Conduct is available without charge through the investor relations page of our internet site, www.discover.com, or by writing to the attention of: Investor Relations, Discover Financial Services, 2500 Lake Cook Road, Riverwoods, Illinois 60015. Any waivers of the provisions of this Code of Ethics and Business Conduct for directors or executive officers may be granted only in exceptional circumstances by the Board, or an authorized committee thereof, and will be promptly disclosed to the Company’s shareholders as may be required under the Securities and Exchange Commission (“SEC”) or NYSE rules.
Board and Director Evaluations
In order to monitor and improve its effectiveness, and to solicit and act upon feedback they receive, the Board and its committees annually engage in a formal self-evaluation process. The Nominating, Governance and Public Responsibility Committee begins the process each year by reviewing and approving the self-evaluation process to ensure the independence and integrity of the process. In addition, they consider the substantive topics that will be part of the self-evaluation, which may include how directors feel about board operations, regulatory matters, strategic and financial oversight, oversight of risk management, executive compensation, succession planning, and governance matters, among many other topics. The Nominating, Governance and Public Responsibility Committee has assigned the Independent Chairman with the task of interviewing each director in these areas. The Independent Chairman then reports the findings to the Nominating, Governance and Public Responsibility Committee and full Board to facilitate a discussion of the results.
Each standing committee also conducts its own self-evaluation. They evaluate their performance against the requirements of their charters and other aspects of their responsibilities. The full Board and each committee then discuss the results of their respective self-evaluations, frequently in executive session, highlighting actions to be taken in response to the self-evaluation. Finally, the full Board conducts an evaluation of the Independent Chairman to ensure that he continues to satisfy the Board’s obligations and expectations of the role.
Board Education
We provide orientation to new directors to help familiarize them with our industry and lines of business as well as our legal, compliance, regulatory, and risk profile. Similarly, we provide directors joining a new committee orientation on the requirements and responsibilities relevant to that particular committee. Discover also periodically offers educational sessions on a variety of topics throughout the year for all members of the Board, including legal and regulatory training as well as annual information security training. These sessions are designed to allow directors to develop a deeper understanding of a business issue, complex financial product or regulatory requirement. Directors are also encouraged to attend additional continuing education opportunities offered by third parties.
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2023 Proxy Statement

Corporate Governance
Shareholder Engagement
We have long valued the feedback and perspectives of our shareholders and are committed to continued engagement with shareholders. As a result, throughout the year our CEO, CFO, other members of senior management, Investor Relations, and Corporate Governance teams continuously engaged with investors and other stakeholders, including key governance contacts at our larger investors. In 2022, we engaged in direct outreach with shareholders representing approximately half of our outstanding shares. These discussions often focused on one or more of the following areas: company strategy and results, environmental, social and governance matters, board composition, and executive compensation. Additionally, our senior executives engaged with stakeholders at numerous investor and industry conferences throughout the year. The Nominating, Governance and Public Responsibility Committee and the Board receive updates several times a year on shareholder communications and investor feedback and use this feedback to identify issues and concerns that may require action or enhancements to our policies, practices or disclosures. In prior years, as a result of shareholder feedback, the Company, among other things, amended its bylaws to provide shareholders with proxy access on widely adopted terms and annually publishes metrics around gender pay equity, enhanced our disclosure regarding the racial and gender composition of our Board, provided the Company’s most recent EEO-1 data in its ESG Tear Sheet and DE&I Report and formalized the Nominating, Governance and Public Responsibility Committee’s oversight of environmental, social and governance matters. In the first quarter of 2022, the Board adopted a new mandatory retirement age policy, beginning with the Company’s 2023 Annual Meeting of Shareholders, to focus on Board refreshment and composition and amended the Nominating, Governance and Public Responsibility Committee’s name to highlight its ESG oversight role.
Special Meetings
Based on the nearly unanimous support by shareholders at the 2019 Annual Meeting of Shareholders, the Board implemented the shareholders right to call a special meeting at the 25% threshold. In engagement with our shareholders since then, including meetings with shareholders representing approximately half of our outstanding shares in 2022, neither management nor the Board has received any feedback to indicate that shareholders were dissatisfied with the Board’s implementation of the special meeting right as further evidenced by the fact that no stakeholders have come forward to ask the Board to change the threshold. Based on shareholder feedback, our peers’ practices and the level of concentration of our shareholder base, the Board continues to believe that the 25% threshold strikes the right balance.
Proxy Access
The Company’s Bylaws permit a shareholder or group of up to 20 shareholders, owning at least 3% of the outstanding shares of common stock of the Company continuously for at least 3 years, to nominate and include in the Company’s proxy materials director nominees constituting up to the greater of two individuals or 20% of the Board.
Majority Voting
Shareholders vote for the election of all of our directors on an annual basis using a majority voting standard, and, through our annual vote on executive compensation, to regularly express their opinion on our compensation programs. Our certificate of incorporation does not include any supermajority voting requirements.
Board Attendance at Annual Shareholder Meeting
The Company’s Corporate Governance Policies state that each director, unless he or she is unable to attend a meeting due to extenuating circumstances, will attend annual meetings of shareholders where all of our shareholders are invited to attend, ask questions and express their views. All of our directors last year attended the 2022 virtual Annual Meeting of Shareholders.
Correspondence to Directors
Shareholders and other stakeholders are welcome to contact any member of our Board by writing to: Discover Financial Services, 2500 Lake Cook Road, Riverwoods, Illinois 60015, Attention: Corporate Secretary. The Board’s Policy Regarding Communications by Shareholders and Other Interested Parties with the Board of Directors is available through the investor relations page of our internet site, www.discover.com. Shareholder and interested party communications received in this manner will be handled in accordance with applicable procedures.
To facilitate engagement, correspondence should include the following information: (i) if the person submitting the communication is a shareholder, a statement of the type and amount of the securities of the Company that the person beneficially owns; (ii) if the person submitting the communication is not a shareholder and is submitting the communication to the non-management directors as an interested party, the nature of the person’s interest in the Company; (iii) any special interest, meaning an interest not in the capacity of a shareholder of the Company, of the person in the subject matter of the communication; and (iv) the address, telephone number and e-mail address, if any, of the person submitting the communication.
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Corporate Governance
Director Compensation
Director Compensation and Role of the Nominating, Governance and Public Responsibility Committee
Our Directors’ Compensation Plan was approved by our shareholders in 2011, and provides for annual compensation for our non-employee directors. Directors who also are our employees do not receive any compensation under the Directors’ Compensation Plan. The compensation paid to our non-employee directors is delivered to further advance the interests of the Company and its shareholders by encouraging increased share ownership to promote long-term shareholder value. The Nominating, Governance and Public Responsibility Committee maintains guidelines which recommend that directors hold five times the annual cash retainer in Company stock within five years of appointment to the Board. As of the Record Date, ten out of our twelve non-employee directors have met and exceeded the Company’s stock ownership guidelines for directors. The remaining directors were appointed in 2021 and 2022 and are on track to meet the ownership guidelines within the timeframe specified in the guidelines. Ms. Sibblies will be subject to these stock ownership guidelines upon her election at the Annual Meeting.
The Nominating, Governance and Public Responsibility Committee is responsible for reviewing the effectiveness of the non-employee director compensation and benefit programs in supporting the Company’s ability to attract, retain, and motivate qualified directors. The Nominating, Governance and Public Responsibility Committee reviews director compensation at least every other year and considers a variety of factors, including our financial performance, general market conditions, director compensation at companies with which we compete for talent, director responsibilities, and trends in director compensation practices. Any changes in director compensation are recommended by the Nominating, Governance and Public Responsibility Committee to our Board for approval. In December 2021, the Nominating, Governance and Public Responsibility Committee recommended to the Board and the Board approved the following increases effective January 2022: equity retainer from $150,000 to $170,000; Compensation Committee membership fee from $10,000 to $15,000; and Nominating, Governance and Public Responsibility membership fee from $5,000 to $10,000. The Board also approved an additional one-time fee for Dr. Glassman and Ms. Duncan in recognition of additional work performed on a special committee tasked with oversight of an investigatory matter (the “Special Committee”).
In 2022, the Company paid non-employee directors as follows:
Cash Compensation
Each non-employee director receives the following cash compensation under the Directors’ Compensation Plan for service on our Board and each standing committee of our Board:
An annual retainer fee of $105,000;
An Independent Chairman annual retainer of $210,000;
A committee chair retainer fee of: (i) $30,000 each for the chairpersons of the Audit Committee and Risk Oversight Committee; (ii) $25,000 for the chairperson of the Compensation Committee; and (iii) $20,000 for the chairperson of the Nominating, Governance and Public Responsibility Committee; and
A non-chair committee membership fee of: (i) $20,000 for each member of each of the Audit Committee and Risk Oversight Committee; (ii) $15,000 for each member of the Compensation Committee; and (iii) $10,000 for each member of the Nominating, Governance and Public Responsibility Committee.
Each non-employee director may elect to defer receipt of his or her cash compensation under the Directors’ Voluntary Nonqualified Deferred Compensation Plan until the director terminates service with the Company. A bookkeeping account is maintained for each participant and interest is credited to the deferred amount based on 120% of the quarterly long-term applicable federal rate in effect. The Board also approved a one-time cash payment of $20,000 for Dr. Glassman and Ms. Duncan for additional work performed as members of the Special Committee.
Stock Compensation
Pursuant to the Directors’ Compensation Plan, we may issue awards of up to a total of 1,000,000 shares of our Common Stock to our non-employee directors. Each non-employee director receives an annual grant of $170,000 in restricted stock units (“RSUs”) for service on our Board, beginning with the first annual meeting at which the director is elected to our Board. For those directors joining our Board on a date other than the date of an annual meeting, each director receives a grant of $170,000 in RSUs on the date on which the director becomes a member of our Board, adjusted on a pro-rata basis by multiplying such award by a fraction where the numerator is the number of months between such date and the next annual meeting of shareholders and the denominator is twelve.
The number of RSUs granted is determined by dividing the grant date fair value by our share closing price on the date of grant and converting into a whole number of RSUs. The 2022 RSU grants vest on the earlier of the first anniversary of the date of grant or immediately prior to the first annual meeting of shareholders following the date of grant, subject to the director’s continued service through such date. Unless provided otherwise in the RSU agreement, RSUs granted to each non-employee director will become fully vested before the end of the regular restriction period if (i) such director is terminated due to disability or death or (ii) a change in control occurs. Upon vesting, the RSUs are converted into shares of our Common Stock. RSUs include the right to receive dividend equivalents in the same amount and at the same time as dividends are paid to all Discover common shareholders. Each non-employee director may elect to defer the receipt of his or her stock compensation until the director terminates service with the Company. A bookkeeping account is maintained for each participant, which reflects the number of RSUs to which the participant is entitled under the terms of the Directors’ Compensation Plan.
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2023 Proxy Statement

Corporate Governance
Reimbursements
Directors are reimbursed for reasonable expenses incurred in attending Board, committee and shareholder meetings, including reasonable expenses for travel, meals and lodging.
2022 Non-Employee Director Compensation Table
The table below sets forth cash and stock compensation (including deferred compensation) paid to non-employee directors for their Board service for the year ended December 31, 2022.
DirectorFees Earned or
Paid in Cash
($)
Stock
Awards
($)
(1)
Total
($)
Jeffrey S. Aronin120,000 170,067 290,067 
Mary K. Bush145,000 170,067 315,067 
Gregory C. Case(2)
130,000 170,067 300,067 
Candace H. Duncan(2), (3)
155,000 170,067 325,067 
Joseph F. Eazor(2)
125,000 170,067 295,067 
Cynthia A. Glassman(3)
155,000 170,067 325,067 
Thomas G. Maheras335,000 170,067 505,067 
Michael H. Moskow135,000 170,067 305,067 
John B. Owen(4)
72,917 155,844 228,761 
David L. Rawlinson II125,000 170,067 295,067 
Mark A. Thierer(2)
130,000 170,067 300,067 
Jennifer L. Wong125,000 170,067 295,067 
(1)Reflects RSUs granted under the Directors’ Compensation Plan described above. Amounts reflect the grant date fair value of the 2022 RSUs, which were granted on May 19, 2022 for all then-serving non-employee directors and on June 6, 2022 for Mr. Owen. These amounts reflect the RSUs’ grant date fair value calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (“FASB ASC Topic 718”) and may not correspond to the actual value that might be realized by the named individuals. Additional details on accounting for stock-based compensation can be found in Note 2: “Summary of Significant Accounting Policies - Stock-based Compensation” and Note 10: “Stock-Based Compensation Plans” of our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022. As of December 31, 2022, each non-employee director held the following number of RSUs, including deferred RSUs: Mr. Aronin - 58,941; Ms. Bush - 53,709; Mr. Case - 74,864; Ms. Duncan - 19,848; Mr. Eazor - 2,925; Dr. Glassman - 1,634; Mr. Maheras - 50,325; Mr. Moskow - 46,624; Mr. Owen - 1,404; Mr. Rawlinson - 3,319; Mr. Thierer - 18,965; and Ms. Wong - 8,280.
(2)The amounts listed for these individuals in the “Fees Earned or Paid in Cash” column were deferred under the Directors’ Voluntary Nonqualified Deferred Compensation Plan.
(3)Includes a one-time committee membership fee of $20,000 for each member of the Special Committee.
(4)Mr. Owen’s fees were pro-rated based on his June 6, 2022 appointment date. In addition, since Mr. Owen joined the Board on June 6, 2022, he received a pro-rata grant of $155,844 for the period commencing on the date he joined the Board and ending on the date immediately prior to the 2023 Annual Meeting. His stock award amount includes the grant date fair value of his pro-rated award.
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Executive Compensation
PROPOSAL
2
Advisory Vote to Approve Named Executive Officer Compensation
The Board of Directors recommends a vote “FOR” approval of the NEO compensation as disclosed pursuant to Item 402 of SEC Regulation S-K, including in the “Compensation Discussion and Analysis,” the compensation tables, and any related information contained in this Proxy Statement. Proxies solicited by the Board will be voted “FOR” this proposal unless otherwise instructed.
What are Shareholders Being Asked to Approve?
Pursuant to SEC rules, we must conduct an advisory, non-binding vote on the compensation of our NEOs at least once every three years. At our 2017 annual meeting, we recommended, and our shareholders overwhelmingly supported an annual frequency for this advisory, non-binding vote. As such, the Board has determined that the Company will continue to hold this advisory, non-binding vote on the compensation of our NEOs each year.
Therefore, we are asking you to approve the compensation of our NEOs as disclosed in the “Compensation Discussion and Analysis” (beginning on page 27), the compensation tables (beginning on page 46), and any related material contained in this Proxy Statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives you, as a shareholder, the opportunity to endorse or not endorse our executive pay program and policies through the following resolution:
“Resolved, that the shareholders approve, on an advisory, non-binding basis, the compensation of our NEOs, as disclosed in the ‘Compensation Discussion and Analysis,’ the compensation tables and any related narrative contained in this Proxy Statement.”
What is the Board’s Recommendation on Voting on This Proposal?
The Board unanimously recommends a vote “FOR” approval of the NEO compensation as disclosed pursuant to Item 402 of SEC Regulation S-K, including in the “Compensation Discussion and Analysis,” the compensation tables, and any related information contained in this Proxy Statement. Proxies solicited by the Board will be voted “FOR” this proposal unless otherwise instructed.
As described in detail in the “Compensation Discussion and Analysis” (beginning on page 27), our compensation program for our NEOs is substantially performance-based and designed to attract, retain and motivate our NEOs, who are critical to our success. The compensation our NEOs earned in 2022 reflected Company performance and remained consistent with our balanced compensation structure and commitment to aligning NEOs’ interests with those of our shareholders. The Board continues to believe the compensation program for our NEOs is effective in achieving the desired results.
Is the Shareholder Advisory Vote to Approve NEO Compensation Binding on the Company?
No. Under the SEC rules, your vote is advisory and will not be binding upon the Company or the Board. However, the Compensation Committee values the opinions of our shareholders and will review and consider the voting results when considering future executive compensation arrangements.
How Many Votes are Required to Approve This Proposal?
This advisory vote requires the affirmative vote of a majority of the shares of Common Stock represented at the Annual Meeting and entitled to vote thereon. You may “abstain” from voting on this proposal. Shares voting “abstain” on this proposal will be counted as present at the Annual Meeting for purposes of this proposal and your abstention will have the effect of a vote against this proposal.
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2023 Proxy Statement


Compensation Discussion and Analysis
Section Table of Contents
Executive Summary
This Compensation Discussion and Analysis focuses on the executive compensation amounts and programs for the Company’s named executive officers (“NEOs”) who are shown below and listed in the “2022 Executive Compensation Tables.” We summarize below the structure of our executive compensation program and provide an overview of how and why the Compensation Committee made specific compensation decisions involving NEO compensation. Our fundamental objective was to create a highly motivational compensation program that was retentive and also aligned with shareholders’ interests. We also refer you to our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information regarding the Company’s 2022 financial results and our ESG Tear Sheet and DE&I Report for the current state of other employee-related initiatives, including our efforts to promote Diversity, Equity and Inclusion.
2022 NEOs
ROGER C.
HOCHSCHILD
Chief Executive Officer
and President (“CEO”)
JOHN T. GREENE
Executive Vice
President, Chief
Financial Officer
AMIR S. AROONI(1)
Executive Vice
President, Chief
Information Officer (“CIO”)
DANIEL P. CAPOZZI
Executive Vice
President, President -
US Cards
DIANE E. OFFEREINS(2)
Executive Vice
President, President -
Payment Services
(1)In February 2023, Mr. Arooni notified the Company he will be leaving. His final day with the Company is expected to be September 30, 2023, to allow for a transition to a new CIO.
(2)On March 9, 2023, the Company announced Ms. Offereins will be retiring from the Company. It is expected that her final day with the Company will be June 30, 2023.
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Compensation Discussion and Analysis
Compensation Principles
The Company’s 2022 executive compensation program and compensation decisions were based on the following principles:
1 
Pay-for-
Performance
2  
Balanced
Compensation Structure
3 
Market-Competitive
Pay Opportunity
Performance Highlights
In 2022, the Company’s accomplishments included:
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Grew profit before taxes and reserves (“PBTR”) significantly at 11% year-over-year driven by sales, new account and loan growth coupled with net interest margin expansion
Based on net income of $4,392 million, the Company achieved PBTR of $6,284 million(1)
dfs-20230317_g38.jpg
Strong credit performance from disciplined management and favorable macroeconomic conditions
Total net charge-off rate on average loans outstanding of 1.82% was consistent with the prior year rate of 1.84%
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Invested in acquisition marketing, new products, enhanced capabilities, compliance and personnel to support growth
Total loans up 20% year-over-year reflecting strong new account growth driven by investments in account acquisition and robust sales volume which was up 16% from the prior year
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Enhanced shareholder returns with share repurchases and larger dividends
The Company increased the quarterly dividend to $0.60 per share of common stock and approved a $4.2 billion share repurchase plan in April 2022
(1)Profit before taxes and reserves (“PBTR”) is a non-GAAP financial measure which should be viewed in addition to, not as a substitute for, the Company’s reported results. PBTR is derived by adding the change in the allowance for credit losses of $552 million, the reclassification of the liability for expected credit losses on unfunded commitments of $(10) million, and income tax expense of $1,350 million to net income of $4,392 million. The Compensation Committee believes that PBTR is a critical measure of the core operating performance of the business that increases focus on factors the Company’s incentive-eligible employees are most able to directly impact and influence. Please see “Annex A” for a reconciliation of PBTR growth to net income growth calculated in accordance with GAAP.
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2023 Proxy Statement

Compensation Discussion and Analysis
Our executive compensation program is designed to motivate, retain and attract top executive talent to achieve our strategic objectives and align shareholder and executive interests. Annual cash incentives use PBTR as the primary measure of the Company’s financial performance to establish award levels. The Compensation Committee and the full Board believe that PBTR is a critical measure of the core operating performance of the business and focuses on factors the Company’s incentive-eligible employees are most able to directly impact and influence. Long-term incentives (“LTI”) are granted in the form of restricted stock units (“RSUs”) and performance stock units (“PSUs”), with PSU award values and vesting tied to cumulative earnings per share (“EPS”) performance over a three-year performance period. We believe the link between our financial results and executive incentives demonstrate our continued commitment to paying for performance.
Our financial results and compensation earned by NEOs for 2022 reflected another exceptional year of Company performance and we believe the 2022 compensation earned by our NEOs remained consistent with our balanced compensation structure and commitment to aligning our NEOs’ interests with those of our shareholders. We performed well compared with goals in 2022 in many areas, and significantly exceeded our PBTR goal for 2022. We believe our incentive plans helped motivate performance, resulting in our 2020-2022 PSU performance payouts and 2022 short-term incentive (“STI”) funding each being above target. As a result of this very strong performance, our STI pool and our 2020-2022 PSU awards were funded at maximum. The Compensation Committee believes that the alignment of our incentive payouts and performance demonstrate the success of our incentive plans.
2022 highlighted the strength of our integrated digital banking and payments model and advancement of our strategic priorities against a fluid and unusual macroeconomic and monetary policy backdrop. Significant investments in branding and acquisition continued to drive new accounts, and we added field personnel to support this robust growth. We focused on expanding our data and analytics platforms to enhance our capabilities. We continued to actively manage our funding costs and remained disciplined around credit management. Year-over-year loan growth was driven by strong consumer spending, robust new account growth and payment rate moderation. We remained flexible and committed to our employees’ needs as our workforce returned to the office in 2022. We believe that these and other factors allowed our business to successfully navigate through the challenges of the last several years and emerge well positioned to create long-term value for our customers and shareholders.
Summary of Chief Executive Officer and All Other NEOs’ Compensation
Consistent with our compensation philosophy, a large portion of each NEO’s compensation is performance-based compensation. The chart below summarizes the 2022 elements of compensation that comprised our CEO’s target total direct compensation opportunity and the average target total direct compensation for all other NEOs. Approximately 90% of the CEO’s 2022 target total direct compensation and approximately 82% of all other NEOs target total direct compensation was variable and tied to Company financial performance. See “2022 Decision-Making Process” for more details on how the factors considered by the Compensation Committee impacted compensation decisions and see “2022 Summary Compensation Table” for the Compensation Committee’s actual compensation decisions.
2022 CEO TARGET PAY MIX2022 AVERAGE OF All OTHER NEOs TARGET PAY MIX
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dfs-20230317_g63.jpg
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Compensation Discussion and Analysis
Overview of Performance
In 2022, the Discover team successfully executed on our business priorities as we made meaningful investments for growth against a fluid economic backdrop. These investments, combined with our differentiated business model, enabled us to produce the second strongest year for earnings in our company’s history, giving us significant momentum going into 2023 and beyond. Throughout the year we acted on opportunities to strengthen our business and drive long-term value for our customers and shareholders, and continued efforts to improve risk management and compliance. We continued to expand our Payments business with increased network volume and new strategic partnerships. We believe that the quality of our earnings and the strength of our balance sheet combined with our disciplined approach to underwriting and focus on prime consumers position us to generate resilient returns through a range of economic environments. Highlights of 2022 results include:
Strong execution against business priorities drove net income of $4,392 million, and PBTR of $6,284 million.(1)
Revenue net of interest expense was $13.3 billion, up 10% from 2021, driven by higher net interest income from loan growth and margin expansion.
Total expenses were up 9% from 2021 as we continue to invest in growth and capabilities.
Credit performance was overall strong across all of our lending products driven by the favorable economic trends and our disciplined approach to credit management.
Payment Services had strong network volume growth, up 5% year-over-year.
Card loans were up 21% reflecting strong sales volume growth, up 16% year-over-year, robust new account growth, and payment rate moderation.
Organic student loans increased 4% from 2021 supported by a moderation in the payment rate.
Personal loans were up 15% from 2021 due to higher originations and lower payment rates.
The Company reviewed its compensation plans and programs in 2022 and determined that they are not designed to nor do they create an incentive to engage in excessive risk-taking. More details regarding our 2022 performance and executive compensation can be found in the sections hereafter, including a summary of the compensation approach for our CEO under “Summary of Chief Executive Officer and All Other NEO’s Compensation.” We encourage you to read this section of the Proxy Statement in conjunction with the advisory, non-binding vote that we are conducting on the compensation of our NEOs.
Governance Matters
2022 Advisory Vote on NEO Compensation
At our 2022 Annual Meeting, shareholders indicated strong support for our executive compensation program with approximately 95% of votes cast in favor of our “Say-on-Pay” proposal. The Compensation Committee values the opinions of our shareholders and considered the Say-on-Pay vote results in connection with its evaluation of the Company’s executive compensation program and, after considering such vote results, did not make any changes to the Company’s executive compensation program in response to the 2022 Say-on-Pay vote.
(1)Profit before taxes and reserves (“PBTR”) is a non-GAAP financial measure which should be viewed in addition to, not as a substitute for, the Company’s reported results. PBTR is derived by adding the change in the allowance for credit losses of $552 million, the reclassification of the liability for expected credit losses on unfunded commitments of $(10) million, and income tax expense of $1,350 million to net income of $4,392 million. The Compensation Committee believes that PBTR is a critical measure of the core operating performance of the business that increases focus on factors the Company’s incentive-eligible employees are most able to directly impact and influence. Please see “Annex A” for a reconciliation of PBTR growth to net income growth calculated in accordance with GAAP.
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Compensation Discussion and Analysis
Practices and Policies Supporting Strong Corporate Governance and Compensation Programs
We continue to maintain our disciplined approach to executive compensation with a focus on pay-for-performance, strong governance, risk management, and simplicity as evidenced by the following practices:
We DoWe Do Not
dfs-20230317_g64.jpg  Pay-for-performance: The majority of the compensation for our NEOs is in the form of variable cash and equity compensation linked to the short-term and long-term financial and strategic performance of the Company. Incentive compensation metrics are tied to the profitable operation and growth of the Company and NEOs’ individual goals are designed to be aligned to financial and strategic outcomes.
dfs-20230317_g64.jpg  Shareholder alignment: Our compensation program is designed to be aligned with our long-term interests and those of our shareholders, with a majority of NEO target direct compensation delivered as LTI awards. LTI awards are granted in the form of PSUs and RSUs. PSUs represent the majority of the target annual LTI grant value for our NEOs and are earned based on performance against EPS targets over a three-year performance period. In addition, the value of LTI awards fluctuates based on the Company’s stock price over the applicable performance periods.
dfs-20230317_g64.jpg  Independent oversight: Our Compensation Committee includes only directors who are independent under applicable NYSE listing standards and the Compensation Committee is advised by an independent compensation consultant.
dfs-20230317_g64.jpg  Share ownership guidelines for NEOs: Our CEO must own shares with a value of at least seven times his base salary and our other NEOs must own shares with a value of at least three times their respective base salaries. Each NEO must achieve his or her ownership guideline within five years of appointment.
dfs-20230317_g64.jpg  Incentive award limits: Incentive awards have maximum payout caps.
dfs-20230317_g64.jpg  Clawback of incentive compensation: Our equity awards provide for clawbacks that allow us to recover shares issued pursuant to RSUs and PSUs under certain circumstances.
dfs-20230317_g64.jpg  Risk management: We regularly evaluate the risk impact of the design of our incentive compensation program. The compensation decisions for our NEOs include a risk review that is considered before we make annual STI and LTI awards and before the determination of vesting for all outstanding stock grants which may result in a reduction in the number of the shares vesting.
dfs-20230317_g64.jpg  Double trigger change in control: Our change in control severance policy and equity award agreements include a double trigger.
dfs-20230317_g64.jpg  Restrictive covenants: LTI awards to NEOs are subject to non-competition and non-solicitation provisions.
dfs-20230317_g64.jpg  Limited perquisites: Perquisites provided to our NEOs are generally limited to access to an executive gym, charitable contributions and security. The Compensation Committee approved the use of chartered aircraft by Mr. Hochschild and his family for travel, including personal travel. On occasion, our NEOs may use Company tickets for sporting, cultural or other events for personal use when they are not otherwise used for business purposes.
x   No employment contracts for NEOs: We do not have individual employment contracts with any of our NEOs.
x   No special benefit plans: We do not provide any benefit plans to our executives that are not generally available to other employees and we do not provide any supplemental executive retirement plan benefits to any executive.
x   No hedging or pledging: Directors and executive officers, including NEOs, are prohibited from hedging Company securities, holding Company securities in a margin account or otherwise pledging Company securities, including as collateral for a loan.
x   No excise tax gross-ups: We do not provide excise tax gross-ups for any employee.
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Compensation Discussion and Analysis
Compensation Program and Objectives
The Company’s 2022 executive compensation program and compensation decisions were based on the following principles:
Pay-for-Performance
Our compensation should reflect financial and non-financial performance over short- and long-term periods at the Company and individual performance levels.
Balanced Compensation Structure
We seek to deliver a mix of fixed and variable compensation that aligns the interests of our executive officers with our shareholders and appropriately balances risk and reward.
Market-Competitive Pay Opportunity
Our compensation should be competitive relative to our peers and the broader market in order to attract, motivate and retain top executive talent.
Pay-for-Performance
Our compensation program is grounded in a pay-for-performance philosophy that is designed to reward achievement of the Company’s financial and strategic performance objectives. In determining executive compensation, the Compensation Committee considers financial performance and strategic performance factors, relative performance, risk performance, regulatory compliance, internal pay equity and individual NEO performance. The majority of compensation for our NEOs is in the form of variable compensation, a substantial portion of which is paid in RSUs and PSUs tied to the long-term performance of the Company and designed to be aligned with shareholder interests. Performance factors considered by the Compensation Committee in setting and determining executive compensation included the following:
Financial Performance: For 2022, the main factors the Compensation Committee considered in evaluating financial performance were the Company’s PBTR performance and EPS.
Other Performance Factors: The Compensation Committee also considered Company performance with respect to the following factors:
Other Financial Metrics: Company performance relative to the Company’s Annual Operating Plan (the “Annual Plan”), and prior year results for the following: net income; return on equity (“ROE”) (and risk-adjusted returns); total revenue (defined as net interest income plus other income); net charge-offs; and operating expenses.
Key Focus Areas: Extent to which the Company improved brand consideration and product awareness; identified and pursued next generation growth opportunities in banking and payments; enhanced technology, analytics and digital capabilities; progressed on maturing risk management and compliance; and made progress toward enterprise-wide diversity, equity and inclusion goals.
Relative Performance: Company performance against a select group of competitors on profitability, credit performance, growth, Total Shareholder Return (“TSR”), and other measures.
Risk Performance: Company performance with respect to risk management, capital adequacy, and regulatory compliance.
Individual Performance: Each NEO’s performance relative to individual objectives, including relative impact, experience, and internal pay equity.
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Compensation Discussion and Analysis
Balanced Compensation Structure
The Compensation Committee determines the total direct compensation opportunity (sum of base salary, target STI and LTI opportunities) for each of our NEOs at the beginning of the year, based on Company and individual performance during the prior year as well as the overall skills and experiences of the executive, internal pay equity and the Compensation Committee’s assessment of their future potential. Target STI and LTI opportunities are established for and communicated to the NEOs at the beginning of the year or, if applicable, at the time of any subsequent change in STI or LTI opportunity. The actual year-end STI awards paid and LTI awards made to the NEOs are determined by the Compensation Committee based on its evaluation of financial performance, primarily PBTR for STI, and other performance factors, risk performance and individual performance, and adjusted EPS for LTI (as described beginning on page 37). The Compensation Committee also considers compensation levels of other executives in similar roles both within the Company and at industry peers before making compensation decisions. The Compensation Committee uses its judgment instead of solely relying on a formulaic structure, which it believes provides the right level of transparency while maintaining the flexibility necessary to pay amounts it deems appropriate for performance. The Compensation Committee has determined that a balance of the following pay components provides an effective combination of risk and reward:
(Performance-Based)
ElementBase SalaryShort-Term Incentive (“STI”)Long-Term Incentive (“LTI”)
HighlightsFixed cash compensation based on scope of responsibility, impact on the organization, expertise, experience, and individual performance.Annual cash bonus opportunity based on Company financial performance, primarily PBTR, other performance factors, risk and individual performance.Annual equity award opportunity based on financial performance, other performance factors, risk and individual performance; granted as a mix of PSUs and RSUs with PSU awards determined based on three-year adjusted EPS performance.
2022 CEO Target Pay Mix9.7%19.5%
RSUs 17.7%
PSUs 53.1%
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2022 Average of All Other NEOs Target Pay Mix17.6%25.2%
RSUs 22.9%
PSUs 34.3%
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Review of Compensation Policies and Practices Related to Risk Management
The Compensation Committee is responsible for overseeing risk management associated with the Company’s compensation practices. The Company’s Chief Risk Officer reviews and confirms with the Compensation Committee at least annually all employee compensation plans in which employees (including the NEOs) participate, and evaluates whether these plans contain any features that might encourage imprudent risk-taking that could threaten the value of the Company or are reasonably likely to have a material adverse effect on the Company.
The Compensation Committee also monitors a separate, on-going risk assessment by senior management of the Company’s employee compensation practices in order to evaluate compliance with the Interagency Guidance on Sound Incentive Compensation Policies issued by the Federal Reserve Board and other bank regulators in 2010, and any updates thereto that may be issued from time to time. Based on an assessment of enterprise risk events, the Company’s Chief Risk Officer may direct senior leaders from the Company’s Human Resources, Legal, and Risk Management teams to compile and analyze information about the Company’s incentive compensation practices and payment history and to conduct interviews with business line managers to understand how evaluation of business risk events affect certain STI and LTI performance measures and compensation decisions. After evaluation of the data, and prior to current year incentive compensation decisions, the Chief Risk Officer prepares a report of the risk assessment, which includes any recommendations for risk adjustments to incentive compensation in connection with risk events. In addition, prior to vesting, the Chief Risk Officer reviews a risk assessment of business and individual risk performance over the past three years and certifies whether outstanding LTI awards should vest without adjustment. The Chief Risk Officer’s performance during the period is reviewed by the Risk Oversight Committee.
In 2022, the Compensation Committee conducted its assessment with the assistance of our Chief Risk Officer to consider whether any element of the compensation structure, design, review, or decision-making process could be reasonably likely to have a material adverse effect on the Company. The Compensation Committee found that incentive compensation continues to be firmly tied to current and future Company performance and is designed to appropriately balance risk and reward and determined that our incentive compensation plans are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee evaluated our NEOs’ performance against risk goals before determining compensation for our NEOs, creating a direct link between our incentive compensation and risk management.
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Compensation Discussion and Analysis
In 2022, in connection with its compensation decisions, the Compensation Committee reviewed reports from and met with the Company’s Chief Risk Officer and the Risk Oversight and Audit Committees of the Board of Directors in joint meetings (the “Joint Meetings”) to discuss the annual incentive compensation risk assessment and to review outcomes of certain risk events and any impact on compensation decisions. The annual risk assessment did not result in the identification of any risks related to our incentive compensation plans that are, either individually or in the aggregate, reasonably likely to encourage imprudent risk-taking that could threaten the value of the Company or have a material adverse effect on the Company. Following the Joint Meetings, the Committee assessed and finalized incentive compensation decisions.
Market-Competitive Pay Opportunity
The Compensation Committee reviewed and considered competitive market data from the following sources when approving NEO compensation: proxy data from an established peer group of companies (discussed below) and other market survey data from companies within the financial services industry and others with whom we compete for talent. For benchmarking purposes, the peer group used in the analysis consists of 16 financial services companies of a similar business nature and revenue size to the Company, from which the Company might expect to draw and compete for executive talent. Given that the Company has few direct competitors of similar scope, size, and business model, this peer group is somewhat varied in nature and primarily represents companies that are similar in business areas with a focus on credit card providers, regional financial institutions that have significant credit card and/or loan operations, payments processing and data/transaction processing companies.
In 2021, the Compensation Committee reviewed the peer group based on the criteria noted above and decided to remove CIT Group Inc. and add Bread Financial Holdings, Inc. (formerly Alliance Data Systems Corp.). Bread Financial Holdings was identified as an appropriate peer based on comparable financials, significant peer group overlap and industry while CIT Group Inc. was determined to be a less suitable peer based on its smaller size and lack of peer group overlap. This change was effective with respect to the 2022 peer group.
The 2022 peer group consisted of the following companies:
Ally Financial, Inc.
American Express Company
Bread Financial Holdings, Inc.
Capital One Financial Corporation
Comerica Incorporated
Fidelity National Information
Services, Inc.
Fifth Third Bancorp
Fiserv, Inc.
KeyCorp
M&T Bank Corporation
Mastercard Incorporated
PayPal Holdings, Inc.
Regions Financial Corporation
Synchrony Financial
The Western Union Company
Visa, Inc
In 2022, the Compensation Committee reviewed the peer group based on the criteria noted above and decided to remove Bread Financial Holdings, Inc. and The Western Union Company and add Citizens Financial Group, Inc. Citizens Financial Group, Inc. was identified as an appropriate peer based on comparable financials and market size, significant peer group overlap, and industry. Bread Financial Holdings, Inc. and The Western Union Company were determined to be less suitable peers based on their lower assets and market size. This change will be effective with respect to the peer group used to evaluate 2023 compensation decisions.
The 2023 peer group consists of the following companies:
Ally Financial, Inc.
American Express Company
Capital One Financial Corporation
Citizens Financial Group, Inc.
Comerica Incorporated
Fidelity National Information Services, Inc.
Fifth Third Bancorp
Fiserv, Inc.
KeyCorp
M&T Bank Corporation
Mastercard Incorporated
PayPal Holdings, Inc.
Regions Financial Corporation
Synchrony Financial
Visa Inc.
Components of Compensation
2022 compensation decisions for our NEOs were closely tied to our 2022 financial performance and consisted of three key components - base salary, STI, and LTI, with a significant portion of total compensation tied to long-term Company performance. These components are summarized below.
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Compensation Discussion and Analysis
Base Salary
We provide our NEOs with market-competitive annual base salaries to attract and retain an appropriate caliber of talent for each position. Annually, we review our competitive market, including market data provided by the Compensation Consultant, for our peer group and the broader market. Based on our review of the competitive market data, management recommended to the Compensation Committee no base salary adjustments to the NEOs in 2022. After considering management’s recommendation, the Compensation Committee approved no base salary adjustments to the NEOs for 2022. See “2022 Summary Compensation Table” for a summary of 2022 NEO base salaries.
Short-Term Incentive Program
In 2022, we continued to offer our NEOs the opportunity to earn a market-competitive annual cash award through our STI program. Awards may be earned based primarily on the Company’s financial performance, while incorporating other secondary performance factors, risk performance, and individual performance. The STI opportunity is provided to create additional motivation for the executives to achieve our annual business goals and to enable us to attract and retain an appropriate caliber of talent for each position, recognizing that similar annual STI opportunities are provided at other companies with which we compete for talent. Our NEOs have target STI opportunities, represented on the “Grants of Plan-Based Awards for 2022” table, which were communicated to them at the beginning of the year.
The Compensation Committee considered market changes, individual performance, experience, and internal pay equity in setting 2022 STI targets. Based on our review of the competitive market data, management recommended to the Compensation Committee no changes to the NEOs STI targets in 2022. After considering management’s recommendation, the Compensation Committee approved no changes to the STI targets of the NEOs for 2022.
Our STI awards are subject to a clawback that allows the Company to reclaim paid amounts under certain circumstances.
In 2022, PBTR was the primary performance factor considered when the Committee approved annual incentive funding. PBTR performance against Compensation Committee-approved targets establishes the pool for funding company-wide STI awards. PBTR is derived by adding changes in the allowance for credit losses and reclassification of the liability for expected credit losses on unfunded commitments to pretax income. PBTR is a non-GAAP financial measure that should be viewed in addition to, and not as a substitute for, the Company’s reported results. The Compensation Committee believes that PBTR is a critical measure of the core operating performance of the business and focuses on factors the Company’s incentive-eligible employees are most able to directly impact and influence.
In 2022, the Compensation Committee approved STI funding goals that aligned with the Company’s 2022 Annual Plan. The performance/ payout curve defined potential funding levels based on various levels of PBTR performance. The curve was structured to provide threshold funding of 70% of target and maximum funding of 130% of target based on PBTR performance. For the CEO and executive officers, including the NEOs, a 1.5x multiplier is then applied resulting in threshold funding of 55% of target and maximum funding of 145% of target to reflect the contribution to and responsibility for overall organization performance. In each case, the numbers presented are starting points, and the Committee has discretion to reduce or increase the funded amounts. The Compensation Committee can provide for individual performance recognition by applying an individual performance modifier of +/- 20% which can produce individual awards ranging from 44% of target to a maximum payout of 174 % of target. The Committee expects it will continue to review multiple facets of Company performance when ultimately approving the STI funding level.
When the Committee approved the 2022 funding goal and curve in February 2022, it considered multiple factors, including the annual plan, historical performance and general market conditions and determined that a PBTR goal based on the Company’s 2022 Annual Plan reflected appropriate challenge.
In 2022, based on net income of $4,392 million, the Company achieved PBTR of $6,284 million,(1) reflecting a 11%(1) year-over-year increase and $969 million higher than our 2022 Annual Plan. For incentive plan purposes, the Committee exercised discretion and excluded losses on certain equity investments resulting in an adjusted PBTR of $6,495 million. When determining individual 2022 STI compensation decisions for NEOs, the Compensation Committee assessed PBTR performance and made adjustments to the STI payouts for each of the NEOs based on a number of factors, including performance against established compliance and individual goals.
(1)Profit before taxes and reserves (“PBTR”) is a non-GAAP financial measure which should be viewed in addition to, not as a substitute for, the Company’s reported results. PBTR is derived by adding the change in the allowance for credit losses of $552 million, the reclassification of the liability for expected credit losses on unfunded commitments for $(10) million, and income tax expense of $1,350 million to net income of $4,392 million. The Compensation Committee believes that PBTR is a critical measure of the core operating performance of the business that increases focus on factors the Company’s incentive-eligible employees are most able to directly impact and influence. Please see “Annex A” for a reconciliation of PBTR growth to net income growth calculated in accordance with GAAP.
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Compensation Discussion and Analysis
The Compensation Committee also considered secondary Company performance factors, including performance against the 2022 Annual Plan, net income, ROE (and risk-adjusted returns), EPS, total revenue (defined as net interest income plus other income), net charge-offs, operating expenses, key focus areas, relative performance, risk performance, regulatory compliance, internal equity, and individual performance. The Compensation Committee believes this approach provides the appropriate level of transparency while maintaining the flexibility to adjust awards for extraordinary circumstances that positively or negatively affect the Company’s financial performance. This approach is also designed to allow the Compensation Committee to evaluate whether pay is commensurate with risks taken and the quality of performance results.
See “2022 Decision-Making Process” below for more details on the factors considered by the Compensation Committee in compensation decisions and see “2022 Summary Compensation Table” for actual STI payouts to the NEOs.
Long-Term Incentive Program
The Compensation Committee, with input from the Compensation Consultant, continues to emphasize stock-based compensation for our NEOs to align their long-term interests with those of our shareholders. The Compensation Committee believes that the use of RSUs and PSUs that vest over a multi-year period focuses executives on the Company’s long-term interests without leading to imprudent risk-taking. In addition, we believe time-vested RSUs and time-vested and performance-based PSUs represent an efficient method of delivering long-term incentive compensation, generally using fewer shares than other types of stock-based award vehicles while delivering value that is ultimately tied to Company operational or stock price performance.
For 2022, the Compensation Committee approved a combination of RSUs that generally vest ratably over a three-year period and performance-based PSUs tied to a three-year Company performance and vesting period (all pending evaluation against the Company’s risk policies).
Awards of RSUs and PSUs are subject to a clawback that allows the Company to reclaim previously granted awards under certain circumstances.
The Compensation Committee sets long-term incentive compensation opportunity commensurate with level in the organization to appropriately motivate the individuals and further align their interests with those of our shareholders. The Compensation Committee established a target LTI value for the NEOs, represented as a percentage of their base salaries, and determined that approximately 71% of the target compensation of the CEO and, on average, approximately 57% of the target compensation of the other NEOs, would be in the form of LTI compensation. In addition, the Compensation Committee established a target PSU and RSU mix as a percentage of the total target LTI of each NEO, as represented below (excluding Ms. Offereins’ one-time RSU grant described in the “2022 Summary Compensation Table” footnotes).
LONG-TERM INCENTIVE ANNUAL TARGET AWARD MIX
CEOAll other NEOs
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The LTI award consists of a forward-looking stock award with an initial grant value based on the NEO’s established LTI target. Actual LTI awards may vary from target based on the Compensation Committee’s assessment of performance, succession planning considerations, and a variety of other factors. The number of PSUs and RSUs granted is determined by dividing the dollar value of each recipient’s award by the fair market value of a share of common stock on the date of grant. The PSU and RSU grants were made in February 2022 to each of the NEOs. In early 2022, in recognition of Mr. Hochschild’s performance as CEO, and to continue to bring his compensation closer to market-competitive levels, the Compensation Committee approved a 5% increase in his LTI target, delivering his entire 2022 target direct compensation increase in the form of LTI. For the other NEOs, management recommended, and the Compensation Committee approved, no changes to their 2022 LTI targets. In recognition of Mr. Capozzi’s performance leading US Cards, the Compensation Committee approved a LTI award that was 13% above his 2022 annual LTI target, and Ms. Offereins received a one-time RSU grant in February 2022 in recognition of her leadership in connection with a Company investment, as discussed in the “2022 Summary Compensation Table” footnotes. See “2022 Decision-Making Process” below for more details on how the factors considered by the Compensation Committee impacted compensation decisions and see “2022 Summary Compensation Table” for the actual LTI grant values.
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Compensation Discussion and Analysis
Performance Stock Units
2022 PSU Awards
Performance-based PSUs are granted annually at the beginning of a three-year performance period to further reinforce the NEOs’ accountability for the Company’s future financial and strategic goals and performance by tying a significant portion of compensation directly to the Company’s EPS. The majority of the 2022 LTI awards for NEOs consisted of PSUs (75% for the CEO, and 60% for the other NEOs), which were granted under the Company’s 2014 Omnibus Incentive Plan. Under this program, the PSUs award levels will be determined and vest and convert to shares of Common Stock if and to the extent the Company achieves specific cumulative EPS performance goals over a three-year performance period and provided the executive remains employed by the Company for the three-year performance period (with exceptions for certain termination events), and are subject to an evaluation of compliance with the Company’s risk policies over the three-year period prior to vesting. The performance period for the 2022 award of PSUs began on January 1, 2022 and ends on December 31, 2024. The EPS performance target is established during the annual business planning process and is intended to push the Company and the NEOs to achieve higher performance within the Company’s risk framework. Target PSU payout will be achieved if the Company meets its cumulative business plan goals, while achievement of maximum and threshold performance goals are each expected to be infrequent in occurrence. Participants will receive no portion of the award if the minimum performance is not met. If the Company exceeds the target performance hurdles, the NEO can potentially earn an award in excess of the target, up to a maximum of one and one-half times the target award based on Company performance. The awards will receive dividend equivalents in cash which will accumulate and pay out if and when the underlying shares are released to the NEOs.
2020 PSU Payouts
The performance period for our PSUs granted in February 2020 was completed on December 31, 2022. The Compensation Committee approved performance targets at the start of the 2020 PSU performance period. Following the completion of the performance period in 2022, the Compensation Committee approved a payout factor of 150% of target. The cumulative diluted EPS, excluding reserves, over the three-year period was $41.01 versus a target of $33.86, which resulted in a payout factor of 150% of the target amount. A cumulative diluted EPS, excluding reserves, of $16.93 and $37.25 was required to receive a minimum and maximum payout, respectively. In assessing the appropriate payout for these PSUs, the Compensation Committee considered the EPS, excluding reserves, over the performance period attributable to effective NEO execution of key business decisions and strategies, including strong focus on growth and credit risk management. Consistent with the Company’s pay-for-performance philosophy and in accordance with the provisions of the 2014 Omnibus Incentive Plan, the Compensation Committee may adjust target amounts to reflect the impact of factors that management cannot directly control and to minimize payout factors from being artificially inflated or impaired by factors unrelated to the ongoing operations of the business. The final payout of these PSUs was determined after confirmation of compliance with the Company’s risk policies, and employees received earned shares (which remain subject to clawback provisions, and for NEOs, subject to the share ownership guidelines and share retention requirements) when they vested in February 2023.
Restricted Stock Units
In addition to time-based vesting, RSUs are subject to market variability tied to the Company stock price and are intended to align the interests of senior executives with the long-term interests of the Company and its shareholders as well as motivate future contributions and decisions aimed at increasing shareholder value. RSUs generally vest and convert to shares ratably over a three-year period, subject to compliance with the Company’s risk policies and assuming the executive remains employed by the Company through the vesting date (with exceptions for certain termination events). The awards deliver dividend equivalents in cash, which are paid to the NEOs in the same amount and at the same time as dividends are paid to all Company common shareholders.
2022 Decision-Making Process
Factors Affecting Compensation Decisions
The primary Company performance factor considered by the Compensation Committee for purposes of making variable compensation decisions for 2022 was the Company’s PBTR. Although no set weight is assigned to any performance metric or goal, we believe that a profit-based measure best reflects overall Company performance and drives EPS, which we believe is the representative measure most directly tied to the return to our common shareholders. We believe PBTR is also a balanced measure aligned with total performance to motivate executives to focus on the overall returns of the Company and not drive performance on one measure or one business unit over another. In 2022, the Compensation Committee considered the Company’s PBTR along with other performance factors, including: performance against Annual Plan; net income; ROE (and risk-adjusted returns); EPS; total revenue (defined as net interest income plus other income); net charge-offs and operating expenses; key focus areas; relative performance; risk performance; regulatory compliance; internal pay equity; and individual performance.
For the PSU portion of the LTI program, the primary metric the Compensation Committee established for performance-vesting purposes was cumulative EPS achievement over a three-year performance period. In making final award determinations for the 2020-2022 PSUs, the Compensation Committee also factored in individual compliance with the Company’s risk policies including an assessment of any
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Compensation Discussion and Analysis
imprudent risks taken over the three-year vesting period, inclusive of the performance period. The Compensation Committee retains discretion to adjust EPS performance for the impact of unusual or non-recurring events not reflected in business plan assumptions including legislative, accounting or other regulatory changes, one-time, unusual tax events, and significant changes in planned share repurchases where such events are not attributable to NEO performance for purposes of PSU vesting.
The Compensation Committee also considered the need to attract, motivate, and retain a talented management team and to design our compensation program in a way that remains competitive with other companies with which we compete for senior executive talent.
For 2022, after consideration of all the aforementioned factors and the Compensation Committee’s emphasis on pay-for-performance, the Compensation Committee made compensation decisions for each of the NEOs as detailed in the “2022 Summary Compensation Table.” STI was paid after the Compensation Committee meeting in January 2023 and LTI was granted after the regularly scheduled Committee meeting in February 2022.
Overall Company and Business Segment Performance
The Compensation Committee believes that the actions taken throughout 2022 by the Company’s CEO and the other NEOs helped the Company pursue our business objectives, including continued growth. The following achievements, among other things, enabled the Company’s success in 2022 and we believe gives the Company significant momentum going into 2023 and beyond:
Maintained strong credit performance across all of our lending products demonstrating our consistent and disciplined approach to credit management.
Total loans increased 20% year-over year, driven by strong sales and new account growth along with payment rate moderation.
Operating efficiency ratio(1) of 39% reflects strong revenue expansion and disciplined cost management. We made prudent investments in marketing, technology, and our servicing and collections organizations, driving growth for the Company in 2022.
Payment Services had strong network volume growth, up 5% year-over-year.
In April 2022 our Board of Directors approved a new $4.2 billion repurchase plan; we repurchased $2.4 billion shares in 2022 subject to the Federal Reserve’s limitations.
Financial Performance
The primary factor that our Compensation Committee considered in making 2022 compensation decisions was the Company’s PBTR growth. The Company achieved PBTR of $6,284 million,(2) which represented a year-over-year increase of 11%.(2) The PBTR was $969 million higher than our 2022 Annual Plan primarily driven by loan growth. The Compensation Committee considered that PBTR performance was also the result of revenue growth and operating expense management in line with the 2022 Annual Plan expectations.
Other Performance Factors
Other Financial Metrics
The Compensation Committee considered other secondary 2022 financial metrics set forth below. No single secondary financial metric was by itself significant to the Compensation Committee’s determination of any individual’s compensation. The Committee subjectively balanced 2022 financial performance across these secondary metrics in the aggregate in determining individual compensation.
(1)Operating efficiency ratio represents total operating expense divided by revenue net of interest expense.
(2)Profit before taxes and reserves (“PBTR”) is a non-GAAP financial measure which should be viewed in addition to, not as a substitute for, the Company’s reported results. PBTR is derived by adding the change in the allowance for credit losses of $552 million, the reclassification of the liability for expected credit losses on unfunded commitments of $(10) million, and income tax expense of $1,350 million to net income of $4,392 million. The Compensation Committee believes that PBTR is a critical measure of the core operating performance of the business that increases focus on factors the Company’s incentive-eligible employees are most able to directly impact and influence. Please see “Annex A” for a reconciliation of PBTR growth to net income growth calculated in accordance with GAAP.
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2023 Proxy Statement

Compensation Discussion and Analysis
The following financial metrics were considered by the Compensation Committee (dollars in millions, except per share amounts):
20222021% Change
Total Revenue(1)
$13,337 $12,087 10 %
Net Charge-off Dollars$1,817 $1,631 11 %
Operating Expense$5,236 $4,805 %
Net Income$4,392 $5,449 (19)%
Diluted Earnings Per Share$15.50 $17.83 (13)%
Return on Equity31 %43 %
Key Focus Areas
The Compensation Committee also considered the Company’s progress on key focus areas, including improving brand consideration and product awareness, identifying and pursuing next generation growth opportunities in banking and payments, enhancing technology, analytics and digital capabilities, progress on maturing risk management and compliance programs and overall talent, as well as leading diversity, equity and inclusion efforts when making overall compensation decisions. The Compensation Committee reviewed and subjectively balanced performance in these key focus areas with other secondary factors and PBTR in the aggregate in determining individual compensation.
The following secondary performance factors were reviewed by the Compensation Committee:
Total loans increased 20% year-over year driven by strong sales and new account growth along with payment rate moderation.
Digital Banking revenue grew $1,863 million or 16% year-over-year reflecting higher average receivables, net interest margin expansion due to higher market rates and higher net discount and interchange revenue due to strong sales volume.
Consumer Deposit balances increased from the prior year driven by strong marketing, robust portfolio activity, and the benefit of a rising rate environment. We continued to optimize our funding mix with average consumer deposit growth of $6 billion, driving deposits to represent 64% of total funding as of the fourth quarter, down slightly from 68% in 4Q21, primarily due to strong loan growth requiring increased funding needs from wholesale channels.
Total net charge-off rate of 1.82% was consistent with the prior year rate of 1.84%.
Operating efficiency ratio(2) of 39% reflects strong revenue growth offset by increased operating expenses. The increase in expenses was primarily due to higher marketing expense, employee compensation (driven by higher headcount in our servicing and collections organizations) and professional fees.
Payment Services had strong network volume growth, up 5% year-over-year.
Company and individual risk performance with respect to legal and regulatory matters.
Relative Performance
The Compensation Committee also considers the Company’s performance relative to our largest business competitors in the U.S. market in both the Digital Banking and Payment Services segments. In 2022, Discover performed better than the majority of its largest competitors on metrics such as ROE and continued to grow new accounts in our lending and banking products.
Risk Performance
The Compensation Committee considers risk performance across the Company and within each business segment in making final compensation decisions for each NEO, both as it relates to an individual’s specific objectives as well as contributions to the strengthening of risk management, internal controls, and compliance practices. The Compensation Committee reviewed overall performance and risk adjusted returns and capital levels relative to the Annual Plan and established risk appetite limits. The Compensation Committee also considered the Company’s progress in addressing legal and regulatory matters and performance against compliance goals.
(1)Total revenue equals the sum of net interest income and other income.
(2)Operating efficiency ratio represents total other expense divided by revenue net of interest expense.
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Compensation Discussion and Analysis
Individual Performance
The Compensation Committee considers individual performance in making final compensation decisions for each NEO, both as it relates to an individual’s specific objectives as well as each individual’s relative role impact, experience, internal pay equity, and contributions to the success of the overall enterprise. As noted above, as part of its compensation determinations, the Compensation Committee also assesses each NEO’s contributions to the success of the business in strengthening its risk management, internal controls, and compliance practices, which reinforces these objectives as priorities throughout the organization. The Compensation Committee believes this holistic approach optimizes the link between executive rewards and the benefits to shareholders, and enhances the importance of a compliance-focused culture. Actual STI payouts are displayed in the 2022 Summary Compensation Table.
The highlights below therefore reflect each member of management’s contribution to managing our business while also pursuing our established business strategy.
ROGER C. HOCHSCHILDChief Executive Officer and President
2022 COMPENSATIONKey Achievements
dfs-20230317_g67.jpg
Exceeded PBTR performance target by $1B.
Maintained strong financial risk management performance including consumer credit risk and liquidity risk.
Continued technology transformation with Data and Analytics driving more value through more effective modeling, expanded data sources, and stronger platforms with increasing automation.
Enhanced focus on developing technology talent through new Advanced Analytics Resource Center.
Focused ‘tone from the top’ on importance and priority of risk management, strong collaboration throughout the organization; and improved on regulatory risk management through operational improvement and compliance management systems.
Advanced diversity, equity and inclusion commitment including growth of Chatham customer care center on Chicago’s South side and new site announcement in Whitehall neighborhood of Columbus.
JOHN T. GREENE Executive Vice President, Chief Financial Officer
2022 COMPENSATIONKey Achievements
dfs-20230317_g68.jpg
Contributed to Company exceeding PBTR performance target by $1B.
Maintained strong financial risk management performance including consumer credit risk and liquidity risk.
Continued enhancements in Financial Planning and Analysis (“FP&A”) including improved data transparency, enhanced loss forecasting and automation of key models.
Strong liquidity and capital management, including regulatory responses and relationships.
Delivered $90MM in supplier savings.
Demonstrated thought leadership in risk management through successful implementation to new general ledger and management reporting systems.
Increased spend with diverse suppliers by 20% to $103 million in 2022.
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2023 Proxy Statement

Compensation Discussion and Analysis
AMIR S. AROONI Executive Vice President, Chief Information Officer
2022 COMPENSATIONKey Achievements
dfs-20230317_g69.jpg
Delivered key projects to drive business priorities including a new product launch and internal operational and systems projects.
Strengthened risk management, including enhancements to the control environment and support of DSL action plans as well as support for the Compliance Management System.
Chicago CIO of the year by the Society of Information Management (SIM) Chicago Chapter.
Continued execution on delivery of modernized approach to technology at Discover, including efforts across: reliability, automation, workforce management, and employee experience.
Rolled out additional engineering excellence and cultural practices through the Discover Technology Academy and drove the upskilling of our technical workforce.
DANIEL P. CAPOZZI Executive Vice President, President - US Cards
2022 COMPENSATIONKey Achievements
dfs-20230317_g70.jpg
Contributed to Company exceeding PBTR performance target by $1B.
Managed strong credit performance with net charge-off rate beating plan by 40 basis points.
Gained sales and loan market share through exceeding plan for new account acquisition, sales, and pre-tax income targets.
Continued advancement of authentication and fraud detection capabilities, implementing real-time verification with the Social Security Administration and next generation models / strategies.
Launched online privacy protection benefit on track for 2.9M registrations.
Developed and implemented highly successful integrated 2023 planning process.
Demonstrated consistent proactive engagement with Risk Management, progressed against all open issues and gaps in process controls.
Supported the Company’s commitment to diversity, equity, and inclusion, through continued support of Chatham customer care center in Chatham, Illinois.
DIANE E. OFFEREINSExecutive Vice President, President - Payment Services
2022 COMPENSATIONKey Achievements
dfs-20230317_g71.jpg
Delivered payment services profits 12% favorable to plan.
Maintained momentum with payments partners.
Maintained and expanded global merchant footprint.
Led efforts to strengthen risk management, including enhancements to the control environment.
Supported payments DEI council; representation flat or up across all levels.
(1)As described above, one-time award received by Ms. Offereins in recognition of her leadership pursuant to a Company investment that delivered a substantial benefit to the Company.
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Compensation Discussion and Analysis
Role of NEOs in Compensation Decisions
Our CEO, Chief Human Resources & Administrative Officer and senior Company Human Resources personnel, and the Compensation Consultant meet with the Compensation Committee to discuss preliminary compensation decisions for the NEOs and senior officers. The Chief Risk Officer reviews and confirms all preliminary compensation decisions for NEOs. The Compensation Committee considers overall contribution to Company performance and individual responsibility for business segment, functional, and/or strategic goals. The Compensation Committee also meets with the Risk Oversight and Audit Committees of the Board of Directors to discuss the impact of risk performance on compensation recommendations. This allows for ample review and consideration of Company, business segment, individual and risk performance in determining base salary, LTI awards, and bonus decisions. No NEO is involved in his or her own pay recommendations or decisions. The role of the Compensation Committee and its consultant are discussed under “Other Compensation Decision Considerations.” The decisions of the Compensation Committee for 2022 performance are reflected above under “Components of Compensation.”
Other Compensation Decision Considerations
Role of the Compensation and Leadership Development Committee
The Compensation Committee is responsible for the review and approval of all aspects of the Company’s executive compensation program and makes all decisions regarding the compensation of the NEOs. Specifically, the Compensation Committee has responsibility to, among other things:
Review, approve, and administer all compensation programs affecting NEOs and evaluate whether such programs are aligned with the Company’s compensation structure policies;
Annually review and approve:
Performance criteria, goals, and award vehicles used in our compensation plans for our NEOs, and
Performance of and compensation delivered to our NEOs;
Review the Company’s compensation practices to evaluate whether such practices take into account risk outcomes in making compensation determinations and do not encourage imprudent risk-taking;
Oversee the Company’s management development and succession planning efforts; and
Review and approve any contracts, policies, or programs related to compensation, contractual arrangements, or severance plans affecting NEOs.
As described under “2022 Decision-Making Process — Role of NEOs in Compensation Decisions,” the Compensation Committee consults with management with respect to the compensation of the NEOs, other than the CEO.
The Compensation Committee’s charter is available through the investor relations page of our internet site, www.discover.com.
Role of the Compensation Consultant
The Compensation Committee regularly consults with its external independent Compensation Consultant, Pay Governance, in performing its duties. The Compensation Consultant attended Compensation Committee meetings, including executive sessions without management present. The Compensation Committee has broad authority to retain and dismiss its Compensation Consultant, and establish the scope of its consultant’s work. While the Compensation Consultant reports to the Compensation Committee, the Compensation Consultant also works with the Company’s Human Resources department and senior management to facilitate Compensation Committee work, as approved by the Committee Chair. The Compensation Consultant provides experiential guidance to the Compensation Committee on what is considered fair and competitive practice in the industry, primarily with respect to the compensation of the CEO, but also for other senior Company officers. Pay Governance is independent of management and under the terms of its agreement with the Compensation Committee, the Compensation Consultant generally provides services only to the Compensation Committee. Other than executive compensation consulting services noted above, the Compensation Consultant performs no other services for the Company and has no relationship with the Company or management except as it may relate to performing such services. The Compensation Committee has assessed the independence of the Compensation Consultant pursuant to SEC rules and concluded that no conflict of interest exists that would prevent the Compensation Consultant from independently representing the Compensation Committee.
During 2022, management also retained the services of Willis Towers Watson to assist the Company in conducting an assessment of the competitiveness of the pay opportunity and practices provided to Company executives.
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2023 Proxy Statement

Compensation Discussion and Analysis
Other Arrangements, Policies and Practices Related to Our Executive Compensation Program
Share Ownership Guidelines
The Company maintains Share Ownership Guidelines for NEOs and other executives. The guidelines recommend that the multiples set forth below of annual base salary be held in shares of Company Common Stock at the close of each year. The guidelines are reviewed annually by the Compensation Committee.
Shares to be counted toward ownership targets include actual Common Stock held, including stock held in “street” accounts, and unvested RSUs. The guidelines provide that recommended ownership levels must be attained within five years of appointment (or the inception or modification date of the guidelines, if later). To monitor progress toward meeting the guidelines, the Compensation Committee reviewed current executive ownership levels at its October meeting, ahead of year-end executive compensation decisions. If a NEO or other executive is not on schedule to meet the guidelines, the Compensation Committee may award the executive compensation in the form of stock that would have otherwise been awarded as cash bonus year-end compensation.
As of December 31, 2022, using the 10-day average closing stock price ending prior to December 31, 2022, the following multiples of base salary were held in shares of Company Common Stock by each of our NEOs:
Executive OfficerRequired
Multiple
Actual
Multiple
Roger C. Hochschild7X77X
John T. Greene3X4X
Amir S. Arooni3X5X
Daniel P. Capozzi3X4X
Diane E. Offereins3X19X
Clawbacks
Our equity awards include clawback provisions that allow for the recovery of shares issued pursuant to a stock grant under certain circumstances. The Company is authorized to reclaim any shares received upon conversion of RSUs and PSUs for a three-year period preceding the date on which the Company restates its financial statements due to material noncompliance with financial reporting requirements. In addition, the Company may recover equity compensation paid to our NEOs within two years prior to termination with the Company if the NEO violates non-competition and non-solicitation covenants or breaches obligations to the Company under the confidentiality, intellectual property, or other restrictive covenants including breach of the Company’s risk policies and Code of Conduct. The Company continues to monitor its clawback provisions to ensure that they are consistent with applicable laws and will review and modify its clawback provisions as necessary to reflect the final New York Stock Exchange listing rules adopted to implement the compensation recovery requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Prohibition on Hedging and Pledging
Under Company policy, directors and members of the Management Committee (which include all our executive officers) who are subject to the requirements of Section 16 of the Exchange Act are prohibited from hedging Company securities, holding Company securities in a margin account, or otherwise pledging Company securities, including as collateral for a loan.

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Compensation Discussion and Analysis
Retirement and Other Benefits
All employees are offered a benefits package that is intended to be competitive with those offered by companies with which we compete for talent, and our NEOs participate in our benefit plans and programs on the same basis as our employees generally. Relocation benefits are also made available. The Company offers benefits such as medical, disability, and life coverage to promote employee health and protect against catastrophic expenses. The Discover 401(k) Plan provides employees with the opportunity to save for retirement. We also maintain the Discover Pension Plan which was frozen as of December 31, 2008. The Company does not currently offer any supplemental benefits or deferred compensation programs to our NEOs.
Additional information regarding Company contributions to the Discover 401(k) Plan is provided in the footnotes to the “2022 Summary Compensation Table.” Additional information regarding the Discover Pension Plan is provided after the “2022 Pension Benefits” table.
We provide relocation assistance to newly hired and current senior executives who must relocate to accept our job offer or a new role within the Company. Such relocation assistance is generally pursuant to our relocation program, which is designed to cover the costs directly resulting from the Company-requested relocation and includes tax gross-up payments for taxable relocation benefits under the program. In connection with Mr. Arooni’s planned relocation to our Riverwoods, Illinois office, he was provided relocation assistance starting in 2020 when he joined the Company and continuing through his current employment, in accordance with such program.
In February 2023, Mr. Arooni notified the Company he will be leaving. In order to allow for transition to a new CIO, the Company entered into an arrangement to retain Mr. Arooni through September 30, 2023. The Compensation Committee approved a transition bonus in the amount not to exceed $3 million, with the actual payout to be determined based on the successful execution of the management transition within the agreed upon timeframe. In reviewing and approving the transition bonus, the Compensation Committee considered among other things the pro rata portion of Mr. Arooni’s target cash bonus and LTI for 2023 that will otherwise be forfeited at the time of his termination of employment.
On March 9, 2023, the Company announced Ms. Offereins will be retiring from the Company. It is expected that her final day with the Company will be June 30, 2023. Ms. Offereins will not receive benefits under the Severance Plan but will receive retirement benefits as outlined pursuant to the terms of the applicable program documents and any underlying award agreements.
The Compensation Committee approved the ongoing use of chartered aircraft for Mr. Hochschild and his family for all travel, including personal travel. While the Company generally limits perquisites provided to senior executives, the Compensation Committee believes that this benefit serves the best interest of the Company and its shareholders by providing for Mr. Hochschild’s personal security and allowing for efficiency in his air travel . The benefit is taxable to Mr. Hochschild and is reflected as a perquisite provided by the Company in the “2022 Summary Compensation Table” for the applicable year. The Company does not reimburse Mr. Hochschild for the taxes associated with the personal use of the chartered aircraft.
Executive Change in Control Severance Policy and Severance Plan
The Company provides severance protection to our NEOs and other executives under a Change in Control Severance Policy to allow executives to focus on acting in the best interests of shareholders regardless of the impact on their own employment. Change in control severance protections are commonly provided at other companies with which we compete for talent. Benefits under our policy are paid in the event of a double trigger, meaning an involuntary termination (by the Company without just cause or by the executive for good reason or death or disability as set forth in the Change in Control Severance Policy) within two years following or six months prior to a change in control. No excise tax gross-ups are provided for any employees.
The Company also sponsors a broad-based Severance Plan that provides severance benefits to eligible employees, including NEOs, who are involuntarily terminated (without cause in connection with a workforce reduction, closure or other similar event as set forth in the Severance Plan) to provide security in the event of an unanticipated job loss. The Severance Plan will not pay benefits to an employee receiving benefits under the Change in Control Severance Policy.
The Change in Control Severance Policy, the Severance Plan, and the estimated payments for each of our NEOs are detailed in the “2022 Potential Payments upon a Termination or Change in Control Table.”
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2023 Proxy Statement

Compensation Discussion and Analysis
Compensation Committee Report
The Compensation Committee establishes the compensation program for the CEO and for the other NEOs. The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and, based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement, its Annual Report on Form 10-K, and such other filings with the Securities and Exchange Commission as may be appropriate.
Submitted by the Compensation and Leadership Development Committee of the Board of Directors:
Gregory C. Case (Chair)
Jeffrey S. Aronin
Mark A. Thierer
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2022 Executive Compensation Tables
The narrative, tables, and footnotes below describe the total compensation paid for 2022 to the Chief Executive Officer, Chief Financial Officer, and the next three most highly compensated individuals (collectively, the “NEOs”) who were serving as executive officers of the Company on December 31, 2022.
2022 Summary Compensation Table
The following table contains information regarding the components of total compensation of the NEOs for the Company’s year ended December 31, 2022, and to the extent required by SEC executive compensation disclosure rules, the years ended December 31, 2021 and 2020. The information included in this table reflects compensation earned by the NEOs for services rendered to the Company during the respective period.
ExecutiveYear
Salary(1)
($)
Bonus(2)
($)
Stock
Awards
(3)
($)
Non-Equity
Incentive Plan
Compensation
(4)
($)
Change in
Pension Value
and NQDC
Earnings
(5)
($)
All Other
Compensation
(6)
($)
Total
($)
Roger C. Hochschild20221,100,000 — 8,000,133 1,196,250 345,692 10,642,075 
CEO and President20211,100,000 — 7,600,006 3,190,000 197,212 12,087,218 
20201,118,539 — 7,350,078 1,771,000 49,654 67,988 10,357,259 
John T. Greene2022700,000 — 2,275,211 1,507,275 — 45,790 4,528,276 
EVP, Chief Financial2021700,000 — 2,275,118 1,522,500 — 42,690 4,540,308 
Officer2020726,923 — 2,389,093 845,000 — 32,613 3,993,629 
Amir S. Arooni(7)
2022640,000 — 2,080,144 1,044,000 — 518,632 4,282,776 
EVP, Chief Information
Officer
Daniel P. Capozzi(7)
2022700,000 — 2,575,068 1,575,788 41,169 4,892,025 
EVP, President - 2021698,462 — 2,275,118 1,522,500 42,528 4,538,608 
US Cards
Diane E. Offereins2022700,000 — 3,275,228 1,370,250 45,335 5,390,813 
EVP, President -2021700,000 1,000,000 2,275,118 1,522,500 42,753 5,540,371 
Payment Services2020726,923 — 2,389,093 845,000 39,376 42,795 4,043,187 
(1)Represents the actual payments made to the NEOs.
(2)Represents award received by Ms. Offereins in recognition of her leadership pursuant a Company investment that delivered a substantial benefit to the Company.
(3)Represents the aggregate grant date fair value of RSU and PSU awards granted to the NEOs pursuant to FASB ASC Topic 718. The value of PSUs is based on the probable outcome of the performance conditions on the grant date. The grant date fair value of the PSUs granted in 2022, assuming the highest level of performance conditions is met, was $9,000,150 for Mr. Hochschild; $2,047,653 for Mr. Greene; $1,872,055 for Mr. Arooni; $2,317,623 for Mr. Capozzi; and $2,047,653 for Ms. Offereins. Ms. Offereins’ 2022 value includes her RSU award received in recognition of her leadership pursuant to a Company investment that delivered a substantial benefit to the company, grant date fair market value of $1,000,017. Please see “Components of Compensation” for further details on our LTI program. Additional details on accounting for stock-based compensation can be found in Note 2: “Summary of Significant Accounting Policies — Stock-based Compensation” and Note 10: “Stock-Based Compensation Plans” of our consolidated financial statements in our Annual Report on Form 10-K.
(4)Represents the annual cash short-term incentive earned for the year and paid to the NEOs within the first two and a half months of the following year if employed on the payment date.
(5)Represents the actuarial increase during the year in the pension value, primarily due to the change in the Pension Plan discount rate and mortality tables. The change in pension value for eligible NEOs resulted in negative amounts in 2022 for Mr. Hochschild $87,677, Mr. Capozzi $7,607, and Ms. Offereins $60,786. Messrs. Greene and Arooni do not participate in the Pension Plan. For details on the valuation method and assumptions used in calculating the present value of accumulated benefit, please see Note 11: “Employee Benefit Plans” of our consolidated financial statements in our Annual Report on Form 10-K. There were no above market nonqualified deferred compensation earnings for the NEOs. A description of the Company’s pension benefits is provided under “2022 Pension Benefits.”
(6)Represents the incremental cost to the Company of providing certain perquisites and other personal benefits. For 2022, these amounts include:
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2023 Proxy Statement

2022 Executive Compensation Tables
Executive
401(k) Contributions(a)
($)
Charitable Contributions(b)
($)
Air Travel(c)
($)
Relocation(d)
Other(e)
($)
Total
($)
Roger C. Hochschild23,950 14,500 301,677 — 5,565 345,692 
John T. Greene23,950 14,500 — — 7,340 45,790 
Amir S. Arooni23,950 — — 489,562 5,120 518,632 
Daniel P. Capozzi23,950 9,500 — — 7,719 41,169 
Diane E. Offereins23,950 16,000 — — 5,385 45,335 
(a)Represents the Company’s contributions to the Discover 401(k) Plan for each NEO during each calendar year. All NEOs received 401(k) plan matching contributions consistent with the formula applicable to all eligible U.S. employees.
(b)Represents contributions made by the Company to charitable organizations chosen by each NEO, as well as contributions made on behalf of certain NEOs under our charitable contribution matching programs, under which personal contributions meeting the guidelines of our program are eligible for Company matching contributions (exceeding the amount generally available to the broader employee population).
(c)For Mr. Hochschild, the Compensation Committee approved Mr. Hochschild’s use of charter aircraft for all of his and his family’s travel, including personal travel. The amount disclosed includes the incremental cost to the Company and represents the amount accrued for payment or paid directly to the third-party vendor from which the Company leases corporate aircraft for such travel in 2022.
(d)Represents amounts paid to or on behalf of Mr. Arooni related to his relocation to Discover’s corporate headquarters in Riverwoods, IL, inclusive of: (i) tax gross-ups, $179,533, (ii) relocation reimbursements, $51,079, (iii) administrative fees, $1,752, (iv) tax equalization, $255,402, for time worked between his home in the Netherlands and Discover’s corporate headquarters, and (v) tax preparation fees, $1,796, related to his relocation and time worked between his home in the Netherlands and in the USA. These reimbursement expenses were valued on the basis of the aggregate incremental cost to the Company and represent the amount accrued for payment or paid directly to Mr. Arooni or the third-party vendor, as applicable.
(e)Includes the incremental cost to Discover for airline concierge status, personal security assessment and additional personal security services to each NEO, access to/use of the Company’s Executive Fitness Center, and estimated resale value of Company tickets for sporting, cultural or other events for personal use when they are not otherwise used for business purposes.
(7)Mr. Arooni was not an NEO during 2020 or 2021 and Mr. Capozzi was not an NEO during 2020.
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2022 Executive Compensation Tables
Grants of Plan-Based Awards for 2022
The following table includes the 2022 target STI opportunities, and the RSU and PSU LTI awards made to NEOs in the year ending December 31, 2022. For more information regarding these grants, see the discussion in the “Compensation Discussion and Analysis” (beginning on page 27).
NameGrant Date
Estimated future payouts under non-
equity incentive plan awards
(1)
Estimated future payouts under
equity incentive plan awards
(2)
All Other Stock
Awards:
Number of
Shares of
Stock
or Units
(3)
(#)
Grant Date
Fair Value of
Stock and
Option
Awards
(4)
($)
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Roger C. Hochschild968,000 2,200,000 3,828,000 
2/25/202216,128 2,000,033 
2/25/2022— 48,384 72,576 6,000,100 
John T. Greene462,000 1,050,000 1,827,000 
2/25/20227,339 910,109 
2/25/2022— 11,008 16,512 1,365,102 
Amir S. Arooni352,000 800,000 1,392,000 
2/25/20226,710 832,107 
2/25/2022— 10,064 15,096 1,248,037 
Daniel P. Capozzi462,000 1,050,000 1,827,000 
2/25/20228,306 1,030,027 
2/25/2022— 12,459 18,689 1,545,041 
Diane E. Offereins462,000 1,050,000 1,827,000 
2/25/20227,339 910,109 
2/25/20228,064 1,000,017 
2/25/2022— 11,008 16,512 1,365,102 
(1)Represents potential payout under the annual STI program. Awards can range from 55% to 145% of target, primarily based on annual Company PBTR performance including a 1.5x multiplier for NEOs, and the ability to recognize individual performance through the use of an individual performance modifier of +/- 20%, which when applied can result in a STI award range from 44% of target to a maximum payout of 174%. The numbers presented are guides, and the Committee has discretion to reduce awards to 0 or increase awards but not above maximum payout. The Compensation Committee also considers other secondary Company-wide metrics as described in more detail under “Components of Compensation — Short-Term Incentive Program.” Actual payout amounts for 2022 are included in the “Non-Equity Incentive Plan Compensation” column of the “2022 Summary Compensation Table”.
(2)Represents PSUs awarded in February 2022 under the 2014 Omnibus Incentive Plan. PSUs will vest and convert to shares of Common Stock on February 1, 2025, within the represented threshold and maximum amounts, depending on the extent the Company exceeds specific cumulative EPS performance goals over the three-year performance period and provided the executive remains employed by the Company through the vesting date (with exceptions for certain termination events as detailed below), and are subject to an evaluation of compliance with the Company’s risk policies. The entire PSU award will be canceled if the minimum cumulative EPS performance threshold is not met. To the extent the NEO voluntarily terminates from the Company or is terminated for cause prior to the scheduled vesting date, other than as described below, none of the PSUs will vest and the entire award will be forfeited. In certain instances of a termination of the NEO’s employment prior to the scheduled vesting date, including due to (i) involuntary termination such as a reduction in force or elimination of the executive’s position, provided that a fully-executed irrevocable release agreement is executed and subject to a risk review or (ii) the executive’s eligible retirement, a pro-rata portion of the PSUs will vest and convert to shares following the conclusion of the performance and vesting periods, based on actual performance. In the event of death or disability, the award will vest and shares will convert and be paid at the end of the performance period based on actual performance achieved. In the event of a change in control of the Company during the first year of the performance period, the award will convert to cash at target performance and be paid out according to the vesting schedule or sooner in the event of a qualified termination following the change in control event. In the event of a change in control of the Company during the second or third year of the performance period, performance will be measured through the last day of the Company’s quarter preceding the change in control and the award will then be converted to cash and paid out according to the vesting schedule or sooner in the event of a qualified termination following the change in control event.
(3)Represents RSUs awarded in February 2022 under the 2014 Omnibus Incentive Plan, which are expected to vest and convert in three equal installments on February 1, 2023, 2024 and 2025. In certain instances of a termination of the NEO’s employment prior to the scheduled vesting date, including due to (i) involuntary termination such as a reduction in force or elimination of the executive’s position, provided that a fully-executed irrevocable release agreement is executed and subject to a risk review or (ii) the executive’s eligible retirement, a pro-rata portion of the RSUs will vest and convert to shares. Vesting of these RSUs will be accelerated in the event of termination of the executive’s employment due to (i) a change in control or (ii) the executive’s death or disability. Unvested RSUs will be canceled in the event of a termination of employment for any other reason. Ms. Offereins awards include both her annual RSU award and her one-time RSU award in recognition of her leadership pursuant to a Company investment that delivered a substantial benefit to the Company.
(4)Represents the aggregate grant date fair value of the awards pursuant to FASB ASC Topic 718. Additional details on accounting for stock-based compensation can be found in Note 2: “Summary of Significant Accounting Policies - Stock-based Compensation” and Note 10: “Stock-Based Compensation Plans” of our consolidated financial statements contained in our Annual Report on Form 10-K.
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2023 Proxy Statement

2022 Executive Compensation Tables
Outstanding Equity Awards at 2022 Year-End
The following table provides information regarding outstanding stock awards held by each of the NEOs as of December 30, 2022. As of December 30, 2022, none of our NEOs held outstanding stock options.
Stock Awards(1)
Number of
Shares, Units or
Other Rights That
Have Not Vested
(#)
Market Value of
Shares, Units or
Other Rights That
Have Not Vested
($)
Equity Incentive
Plan Awards:
Number of Unearned
Shares, Units or
Other Rights That
Have Not Vested
(#)
Equity Incentive Plan
Awards: Market or
Payout Value of Unearned
Shares, Units or Other
Rights That Have Not
Vested
($)
Roger C. Hochschild(2)
7,177 
(3)
702,126 91,035 
(8)
8,905,954 
13,486 
(4)
1,319,335 72,576 
(9)
7,100,110 
15,471 
(5), (6)
1,513,528 
96,893 
(7)
9,479,042 
John T. Greene3,732 
(3)
365,102 21,801 
(8)
2,132,792 
6,460 
(4)
631,982 16,512 
(9)
1,615,369 
7,339 
(5)
717,974 
25,196 
(7)
2,464,925 
Amir S. Arooni6,173 
(3)
603,905 19,932 
(8)
1,949,948 
5,906 
(4)
577,784 15,096 
(9)
1,476,842 
6,710 
(5)
656,439 
Daniel P. Capozzi3,200 
(3)
313,056 21,801 
(8)
2,132,792 
6,460 
(4)
631,982 18,689 
(9)
1,828,345 
8,306 
(5)
812,576 
21,599 
(7)
2,113,030 
Diane E. Offereins3,732 
(3)
365,102 21,801 
(8)
2,132,792 
6,460 
(4)
631,982 16,512 
(9)
1,615,369 
14,778 
(5), (6)
1,445,732 
25,196 
(7)
2,464,925 
(1)All equity award values are based on a December 30, 2022 closing stock price of $97.83 per share of our Common Stock. RSUs include the right to receive dividend equivalents in the same amount and at the same time as dividends are paid to all Company common shareholders. PSUs include the right to receive dividend equivalents, which will accumulate and pay out in cash, if and when the underlying shares are released to the NEOs.
(2)Excludes 430,763 deferred RSUs for Mr. Hochschild, as described in “2022 Nonqualified Deferred Compensation” table. These shares will convert to shares of Common Stock when Mr. Hochschild leaves the Company.
(3)These RSUs vested and converted to shares of Common Stock on February 1, 2023.
(4)These RSUs vested or are expected to vest and convert to shares of Common Stock in equal installments on February 1, 2023 and 2024.
(5)These RSUs vested or are expected to vest and convert to shares of Common Stock in equal installments on February 1, 2023, 2024 and 2025.
(6)Balance is reduced by number of shares withheld to satisfy the tax withholding obligation incurred in connection with the satisfaction of the Company’s retirement eligibility provision.
(7)These PSUs vested and converted to shares of Common Stock on February 1, 2023, based on EPS performance and after a satisfactory risk policies review. Amounts reported reflect the actual delivery level as determined by the Compensation Committee following its review of performance and risk assessment.
(8)Assuming applicable performance conditions based on cumulative EPS and successful risk policy review are satisfied, PSUs will vest and convert to shares of Common Stock on February 1, 2024. As required under applicable SEC guidance, because cumulative performance exceeded the target level, unvested PSUs are shown at the amounts corresponding to, and assuming achievement of, the maximum performance level for the full performance period. The final payout will be determined by the Compensation Committee and may be less than amount shown.
(9)Assuming applicable performance conditions based on cumulative EPS and successful risk policy review are satisfied, PSUs will vest and convert to shares of Common Stock on February 1, 2025. As required under applicable SEC guidance, because performance during the first year of the performance period exceeded the target level, unvested PSUs are shown at the amounts corresponding to, and assuming achievement of, the maximum performance level for the full performance period. The final payout will be determined by the Compensation Committee and may be less than amount shown.
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2022 Executive Compensation Tables
Stock Vested for 2022
The following table provides information regarding the number of stock awards that vested and the subsequent value realized from the vesting of such stock awards during the 2022 year.
Stock Awards
NameNumber of Shares
Acquired on
Vesting
(#)
Value Realized on
Vesting
(1)
($)
Roger C. Hochschild(2)
117,914 13,712,675 
John T. Greene3,732 1,225,731 
Amir S. Arooni9,126 1,077,051 
Daniel P. Capozzi20,656 2,437,821 
Diane E. Offereins(2)
46,113 5,247,870 
(1)The amount shown represents the closing price of a share of our Common Stock on the scheduled vesting date multiplied by the number of RSUs and PSUs that vested.
(2)Balance includes shares withheld to satisfy the tax withholding obligation incurred in connection with the satisfaction of the Company’s retirement eligibility provision.
2022 Pension Benefits
The following table lists the amounts we estimate as the present value of accumulated benefits that the Discover Pension Plan will pay to each of the participating NEOs upon the normal retirement age of 65.
NamePlan Name
Number of Years
of Credited
Service
(1)
(#)
Present Value of
Accumulated
Benefit
(2)(3)
($)
Roger C. HochschildDiscover Financial Services Pension Plan9.1667 193,913 
John T. Greene(4)
Discover Financial Services Pension Plann/an/a
Amir S. Arooni(4)
Discover Financial Services Pension Plann/an/a
Daniel P. CapozziDiscover Financial Services Pension Plan0.5833 10,614 
Diane E. OffereinsDiscover Financial Services Pension Plan9.0833 261,260 
(1)For actuarial valuation purposes, credited service is attributed through the measurement date of December 31, 2008, the date that the Discover Pension Plan was frozen.
(2)Service credit and actuarial values are calculated as of December 31, 2022, the plan’s measurement date for the last year.
(3)For details on the assumptions used in calculating the present value of the accumulated benefits and additional information about the Discover Pension Plan, please see Note 11: “Employee Benefit Plans” of our consolidated financial statements in our Annual Report on Form 10-K.
(4)Mr. Greene and Mr. Arooni do not participate in the Discover Pension Plan as they were hired after it was frozen.
Effective December 31, 2008, the Discover Pension Plan, a defined benefit pension plan, was frozen for all participants, although additional service will count towards vesting and retirement eligibility for any participant, including NEOs, in the Discover Pension Plan as of December 31, 2008.
Accrued, frozen benefits under the Discover Pension Plan are determined with reference to career-average pay limited to $170,000 per year, and for each calendar year of service prior to 2009 generally equal to: (i) 1% of the participant’s eligible annual pay; plus (ii) 0.5% of the participant’s eligible annual pay which exceeded the participant’s Social Security covered compensation limit for that year. The estimated annual benefits payable under the Discover Pension Plan at the earliest age at which a participant may retire with an unreduced benefit (age 65) are set forth above. Early retirement terms under the Pension Plan vary depending upon service dates. Certain participants are eligible for early retirement upon reaching age 55 with 10 years of service. Other participants must reach age 55 with 20 years of service. Mr. Hochschild and Ms. Offereins are eligible for early retirement. In the event of early retirement, the accumulated benefit presented in the table above would be reduced under factors that vary based upon a participant’s age at the time of early retirement commencement.
50
2023 Proxy Statement

2022 Executive Compensation Tables
2022 Nonqualified Deferred Compensation
The founders’ grant of RSUs reflected in the table below was a one-time award made under the 2007 Omnibus Incentive Plan in connection with the Company’s 2007 spin-off. These RSUs vested and will convert to shares of Company common stock following a termination of service.
NamePlan NameExecutive
Contributions
in Last FY
($)
Registrant
Contributions
in Last FY
($)
Aggregate
Earnings in
Last FY
(1)
($)
Aggregate
Withdrawals/
Distributions
($)
Aggregate
Balance at
Last FYE
($)
Roger C. Hochschild2007 Omnibus Incentive Plan— — (7,637,428)— 42,141,544 
(1)Reflects decrease in value of deferred RSUs due to decrease in stock price as compared to December 31, 2021. Excludes cash dividend equivalent payments of $990,755 paid on deferred RSUs for Mr. Hochschild.
Potential Payments upon a Termination or Change in Control
Change in Control Severance Policy
The Company sponsors a Change in Control Severance Policy (the “Policy”) that applies to members of our management including the NEOs.
If any NEO is involuntarily terminated, other than for cause (such as a material breach, fraud, violation of law, etc., as defined in the Policy), or voluntarily terminates for good reason (such as a material diminution in authority or base salary, target STI and/or target LTI compensation, etc., as defined in the Policy), or has a termination of employment due to death or disability, within six months prior to or two years following the occurrence of a change in control (as defined in the Policy), upon Discover’s timely receipt of a fully-executed release in a form satisfactory to Discover, such NEO would be entitled to receive:
A lump sum cash payment equal to 1.5 times the sum of his or her annual base salary plus average cash bonus paid in the prior three years or, if the NEO has been an employee for less than three years, the number of years the NEO has been employed by the Company;
A lump sum cash payment equal to the prorated target cash bonus under the Company’s incentive compensation plans for the year of termination, or if no target was established for the year of termination, the annual cash bonus for the prior year;
Full vesting of all stock-based awards granted to the NEO under the Company’s incentive compensation plans;
Outplacement services for a period of two years at the Company’s expense with a firm selected by the Company;
Certain legal fees if the NEO commences litigation after exhausting the internal administrative claims procedure and, as a result, becomes entitled to receive benefits in an amount greater than those offered by the Company prior to such litigation; and
A lump sum cash payment equal to the difference between COBRA (for medical, dental and vision) and active employee premiums for 24 months.
Any NEO eligible for change in control benefits described above will be given the opportunity to enter into a non-competition agreement with the Company, and if he or she enters into the non-competition agreement, he or she would be eligible to receive a salary continuation payment equal to 1.5 times the sum of his or her annual base salary plus average cash bonus paid in the prior three years or, if the NEO has been an employee for less than three years, the number of years the NEO has been employed by the Company.
If benefits payable under the Policy together with other Company benefits payable to the NEO would subject the NEO to an excise tax under the Internal Revenue Code, the benefits payable under the Policy will be reduced to the extent necessary to prevent any portion of the benefits from becoming nondeductible by the Company or subject to the excise tax, but only if, by reason of that reduction, the net after-tax benefit received by the NEO exceeds the net after-tax benefit the NEO would receive if no reduction was made. No excise tax gross-ups are provided for any employees.
Severance Plan
The Company sponsors a broad-based welfare benefits plan that provides severance benefits to eligible employees, including the NEOs, who are involuntarily terminated in connection with a workforce reduction, closure, or other similar event as set forth in the Severance Plan. The Severance Plan will not pay benefits to an employee terminated for cause (as defined in the plan), or an employee receiving benefits under the Change in Control Severance Policy.
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51

2022 Executive Compensation Tables
If any NEO experiences an eligible termination, as defined in the Severance Plan, upon Discover’s timely receipt of a fully-executed release in a form satisfactory to Discover, such NEO would be entitled to receive:
A lump sum cash payment of 12 months of his or her annual base salary plus target annual cash bonus;
A lump sum cash payment equal to the prorated target annual cash bonus under the Company’s incentive compensation plan for any prior year and the year of termination (to the extent earned and not yet paid);
A pro-rata portion of the PSUs will vest and convert to shares following the conclusion of the performance and vesting periods based on actual performance and a pro-rata portion of the RSUs will vest and convert to shares;
Outplacement services for a period of one year at the Company’s expense with a firm selected by the Company; and
A lump sum cash payment equal to 12 months of the applicable premium for group health plan coverage in place prior to termination of employment, plus a payment for income taxes on such amount.
2022 Potential Payments upon a Termination or Change in Control Table
The following table sets forth the payments that each of our NEOs would have received under various termination scenarios on December 31, 2022. With regard to the payments upon a change in control, the amounts detailed below assume that each NEO’s employment wa