Santander CONSUMER USA | 2018 PROXY STATEMENT for Annual Meeting of Stockholders

TABLE OF CONTENTS

TABLE OF CONTENTS

PROXY SUMMARY

2018 PROXY SUMMARY

THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT. IT DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER. PLEASE READ THE ENTIRE PROXY STATEMENT CAREFULLY BEFORE VOTING.

Important Terms

Your Vote

Your vote is very important. The Board is requesting you to allow your Common Stock to be represented at our 2018 annual meeting by proxies named on the proxy card.

This Proxy Statement is being sent to you in connection with this request and has been prepared for the Board by our management. This Proxy Statement is being sent to our stockholders on or about April 30, 2018.

PROXY SUMMARY

How to Vote

You may vote your shares prior to the Annual Meeting via the Internet, by telephone, or by mail.

Summary of Voting Proposals and Voting Recommendations

PROXY SUMMARY

Nominees for Election as Directors

The Board recommends a vote FOR the election of each of the following nominees for director:

PROXY SUMMARY

2017 BUSINESS HIGHLIGHTS*

»  Total auto originations of $20.1 billion   »  More than 800,000 units originated   »  Largest provider for Fiat Chrysler (“FCA”)

»  Total funding of $40.3 billion at the end of 4Q17   »  Banco Santander support totaling $7.8 billion   »  Issued and sold $9.2 billion in bonds across three distinct platforms   »  Inaugural lease securitization

»  Received non-objection to CCAR submission   »  Terminated 2014 Written Agreement with the Federal Reserve

»  Totaled $8.6 billion   »  Servicing fee income of $118 million

NET INCOME OF $1.2 BILLION RETURN ON AVERAGE ASSETS OF 3.0% RETURN ON AVERAGE EQUITY OF % 21.0 ADJUSTED NET INCOME OF $627 MILLION ADJUSTED RETURN ON AVERAGE ASSETS OF 1.6% ADJUSTED RETURN ON AVERAGE EQUITY OF % 11.1 VEHICLE FUNDING AND CULTURE OF SERVICED FINANCE LIQUIDITY COMPLIANCE FOR OTHERS

PROXY SUMMARY

Corporate Governance Highlights

Executive Compensation Program—Overview

Our executive compensation program is designed to reinforce the link between the long-term interests of our executive officers and our stockholders. A significant portion of our executive officers’ incentive compensation is deferred and payable in SC shares, and therefore directly aligned with the Company’s performance, including total stockholder return.

PROXY SUMMARY

Key Features of Our Executive Compensation Program

CORPORATE GOVERNANCE - PROPOSAL 1: ELECTION OF GOVERNANCE

CORPORATE GOVERNANCE

Proposal 1: Election of Directors

Introduction

As of the date of the Annual Meeting, the Board will consist of 10 members. The current members are Mahesh Aditya, José Doncel, Stephen A. Ferriss, Victor Hill, Edith E. Holiday, Javier Maldonado, Robert J. McCarthy, William F. Muir, Scott Powell, and William Rainer. Mr. Aditya and Mr. Powell are also members of the board of directors of Santander Consumer USA Inc., an Illinois corporation and wholly-owned subsidiary of SC (“SC Illinois”). Brian Gunn resigned as a member of the Board and of the SC Illinois board of directors effective April 19, 2018.

SHUSA has the right to nominate seven members of the Board. Please see “Corporate Governance—Nomination of Directors” for more information. SHUSA has nominated Mr. Aditya, Mr. Doncel, Mr. Ferriss, Mr. Hill, Mr. Maldonado, Mr. Powell, and Mr. Rainer for election to the Board. The Board has nominated Ms. Holiday, Mr. McCarthy, and Mr. Muir for election to the Board. The Board has determined that Mr. Ferriss, Ms. Holiday, Mr. McCarthy, Mr. Muir, and Mr. Rainer are Independent Directors.

Each of the directors elected at the Annual Meeting will be elected for a one-year term, which expires at the next Annual Meeting, and will serve until the director’s successor has been elected and qualified, or until the director’s earlier resignation or removal.

Information Concerning the Nominees

Biographical information for each nominee for election to the Board appears below. The information is based entirely upon information provided by the respective nominees.

CORPORATE GOVERNANCE - PROPOSAL 1: ELECTION OF GOVERNANCE

CORPORATE GOVERNANCE - PROPOSAL 1: ELECTION OF GOVERNANCE

CORPORATE GOVERNANCE - PROPOSAL 1: ELECTION OF GOVERNANCE

CORPORATE GOVERNANCE - PROPOSAL 1: ELECTION OF GOVERNANCE

CORPORATE GOVERNANCE - PROPOSAL 1: ELECTION OF GOVERNANCE

CORPORATE GOVERNANCE - DIRECTOR INDEPENDENCE

Director Independence

Because we are a controlled company, we are exempt from the requirement in the NYSE Listed Company Rules that a majority of our directors must be independent. In addition, we are exempt from the requirements (i) that our Executive Committee (which under its charter has the responsibilities of a Nominating and Governance Committee) be composed solely of directors who meet the independence standards under the NYSE Listed Company Rules and (ii) that our Compensation Committee be composed solely of directors who meet additional, heightened independence standards under the NYSE Listed Company Rules and the rules of the SEC. The Company is subject to the requirement that all members of our Audit Committee satisfy independence requirements set forth under the NYSE Listed Company Rules and meet the additional criteria for independence of audit committee members set forth in Rule 10A-3(b)(1) under the Exchange Act.

Under the NYSE Listed Company Rules, to be considered independent, a director must not have a disqualifying relationship, as defined in the NYSE Listed Company Rules, and the Board must affirmatively determine that the director otherwise has no direct or indirect material relationship with the Company. In making independence determinations, the Board complies with all NYSE and SEC criteria and considers all relevant facts and circumstances. The Board has determined that Mr. Ferriss, Ms. Holiday, Mr. McCarthy, Mr. Muir, and Mr. Rainer are Independent Directors. The Board also determined that Wolfgang Schoellkopf and Mark Hurley, each of whom resigned from the Board during 2017, were independent as defined by the NYSE Listed Company Rules.

In assessing the independence of the Independent Directors, the Board considered, without limitation, the following transactions, relationships, and arrangements:

The Board has also determined that each member of the Audit Committee (Mr. Ferriss, Mr. McCarthy, and Mr. Muir) is an “audit committee financial expert” in accordance with the definition established by the SEC.

CORPORATE GOVERNANCE - BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT

Board Leadership Structure and Risk Oversight

The Board is responsible for the oversight of management on behalf of our stockholders. The Board and its committees meet periodically throughout the year to (i) review strategy, business and financial performance, risk and control matters, and compensation and management development; and (ii) provide guidance to and oversight of, and otherwise assess and advise, the CEO and other senior executives. The Board’s leadership structure, described below, is designed to ensure that authority and responsibility are effectively allocated between the Board and management.

The Board does not have any formal policy as to whether the same person should serve as both the CEO and Chairman of the Board, as the Board believes that it should have the flexibility to make the determination of the appropriate leadership for us at any given point in time. Currently, Mr. Rainer serves as the independent Chairman of the Board. We believe that having an independent Chairman can create an environment that leads to objective evaluation and oversight of management’s performance, increases management accountability, and improves the ability of the Board to monitor whether management’s actions are in the best interests of all stockholders. As a result, at this time, we believe that Mr. Rainer serving as our independent Chairman enhances the effectiveness of the Board as a whole. The Board will continue to review the Board’s leadership periodically and may modify this structure from time to time if it is in the best interests of our Company and our stockholders.

The Chairman of the Board leads the Board, sets the tone for its culture, and ensures its effectiveness in overseeing the Company and its management. The Chairman presides at all meetings of the Board, as well as executive sessions of Independent Directors, and, in consultation with the CEO, other directors, and management, establishes the agenda for each Board meeting. The Chairman also has the power to call special meetings of the Board. Mr. Ferriss serves as the Board’s Vice-Chairman, who acts as Chairman of the Board if Mr. Rainer is absent.

The Company has established a risk governance structure that assigns responsibility for risk management among front-line business personnel, an independent risk management function, and internal audit. According to this model, business owners maintain responsibility for identifying and mitigating the risks generated through their business activities. The Chief Risk Officer, who reports to the CEO and is independent of any business line, is responsible for developing and maintaining a risk framework that ensures risks are appropriately identified and mitigated, and for reporting on the overall level of risk in the Company. The Chief Risk Officer is also accountable to the Risk Committee and to SHUSA’s Chief Risk Officer. The Chief Risk Officer is charged with the implementation and execution of the enterprise risk management (“ERM”) program under the oversight of the Board and its committees.

Risk management is overseen by the Board through four standing committees: the Risk Committee, the Audit Committee, the Compensation Committee, and the Regulatory and Compliance Oversight Committee, each of which is chaired by an Independent Director. Committee chairs are responsible for calling meetings of their committees, presiding at meetings of their committees, approving agendas and materials for their committee meetings, serving as a liaison between committee members and the Board and between committee members and senior management (including the CEO and Chief Risk Officer), and working directly with the senior management responsible for committee matters. Each Board committee provides regular reports to the Board regarding matters reviewed by the Board committee.

In addition to receiving and discussing reports of risks under the purview of a particular committee, the Board monitors our risk culture and reviews specific and aggregate risks the Company faces. Further, at least annually, the Board approves, at the recommendation of the Risk Committee, a Risk Appetite Statement (a “RAS”), which defines the levels and types of risks the Company is willing to assume to achieve its business plans while controlling risk exposures within our risk capacity. In addition, the RAS establishes principles for risk-taking in the aggregate and for each risk type, and is supported by a comprehensive system of risk limits, escalation triggers, and control programs.

The Risk Committee is charged with responsibility for establishing governance over the ERM process and provides oversight of risk policies and risk management performance. The Risk Committee monitors our aggregate risk position and reviews reports from management on the comprehensive portfolio of risk categories and the potential impact these risks can have on our risk profile. A comprehensive risk report is submitted regularly by the Chief Risk Officer to the Risk Committee and to the Board, providing management’s view of our risk position. Further, the Risk Committee reviews and recommends for the Board’s approval the RAS and the ERM Policy along with various sub-policies governing, without limitation, enterprise risk, credit risk, information risk, market and liquidity risk, operational risk, model risk, and strategic risk. The Risk Committee also provides oversight of our impact on SHUSA’s compliance with its capital adequacy assessment process, including its CCAR submissions and resolution planning. In addition, the Risk Committee oversees the Company’s information and cyber risk management program. The Risk Committee also reviews and concurs in the appointment, replacement, performance, and compensation of the Chief Risk Officer.

The Audit Committee is charged with oversight relating to the integrity of our financial statements and financial reporting process, the integrity of our systems of internal accounting and financial controls, and internal and external auditing, including the qualifications and independence of our independent registered public accounting firm. Please see “Audit—Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm” for discussion of PwC, our proposed independent registered public accounting firm for 2018. The Audit Committee oversees the performance of our internal audit function; reviews and concurs in the appointment, replacement, performance, and compensation of our Chief Audit Executive; and approves our internal audit function’s

CORPORATE GOVERNANCE - BOARD COMMITTEES

annual audit plan, charter, policies, and budget. The Audit Committee also receives regular updates on the audit plan’s status and results including significant reports issued by our internal audit function and the status of management’s corrective actions.

The Compensation Committee works to ensure that the compensation programs covering our executives, business units, and risk-taking employees appropriately balance risk with incentives such that business performance is achieved without taking imprudent or inefficient risks. At least annually, the Compensation Committee conducts an assessment of the compensation policies and practices for our employees, including our executive officers. The assessment includes whether such compensation policies and practices created risks that were reasonably likely to have a material adverse effect on the Company.

The Regulatory and Compliance Oversight Committee is charged with the oversight of risk relating to the effectiveness of our compliance management system. The Regulatory and Compliance Oversight Committee also oversees our progress in remediating risks identified in risk assessment findings, internal audit findings, and outstanding corrective actions identified by regulators in examination reports, enforcement actions, and other communications.

In addition to the Board and the Risk Committee, the CEO and Chief Risk Officer delegate risk responsibility to management committees. These committees include the Asset Liability Committee and the Enterprise Risk Management (“ERM”) Committee. The Chief Risk Officer participates on each of these committees.

Board Committees

The Board has five standing committees: the Audit Committee, the Compensation Committee, the Executive Committee, the Regulatory and Compliance Oversight Committee, and the Risk Committee. The charters for each committee may be found on SC’s website at http://investors.santanderconsumerusa.com.

CORPORATE GOVERNANCE - BOARD COMMITTEES

The following summarizes the membership of each Board committee, as well as the primary roles and responsibilities of each committee and the number of times each committee met in 2017.

CORPORATE GOVERNANCE - BOARD COMMITTEES

CORPORATE GOVERNANCE - DIRECTOR COMPENSATION

Director Compensation

Only Independent Directors are compensated for their service on the Board. The 2017 compensation program for Independent Directors was approved by our non-independent, disinterested directors, who do not receive any compensation for their Board service. The program provided the following compensation for Independent Directors:

The Compensation Committee periodically reviews the form and amount of director compensation and recommends changes to the non-independent, disinterested Board members (who do not receive any director compensation from us), as appropriate. There were no changes to the Independent Director compensation program in 2017.

Independent Director Stock Ownership Guidelines

In order to align the economic interests of our Independent Directors with those of our stockholders, the Board has determined that our Independent Directors should hold a meaningful equity stake in SC. To that end, our Independent Non-Employee Director Stock Ownership Guidelines (adopted by the Board in 2016) require each of our Independent Directors to acquire and retain shares or share equivalents of our Common Stock with a target value not less than five times the annual equity retainer of $50,000.

There is no required time period within which an Independent Director must attain the applicable stock ownership target. However, until the stock ownership target is achieved, an Independent Director is required to retain 100% of all shares of our Common Stock received under SC’s Independent Director compensation program, other than shares received with a value equal to the amount of taxes due on income realized in connection with the vesting or exercise of awards.

As of the date hereof, all directors are in compliance with the Independent Non-Employee Director Stock Ownership Guidelines.

Director Compensation Table for 2017

The following table provides information regarding compensation for each Independent Director in 2017. Under our director compensation program, only Independent Directors are compensated for their service on the Board.

CORPORATE GOVERNANCE - NOMINATION OF DIRECTORS

Nomination of Directors

The Shareholders Agreement, by and among SC, SHUSA, and certain other holders of our Common Stock, which we refer to as the “Shareholders Agreement,” provides SHUSA with special rights to nominate directors to the Board. Please see “Additional Governance Information—Related Party Transactions—Shareholders Agreement” for further information. Pursuant to the Shareholders Agreement, SHUSA is entitled to nominate seven members of the Board. The Shareholders Agreement provides further that SHUSA may remove any director nominated by SHUSA with or without cause. In addition, SHUSA has the right to designate a replacement to fill a vacancy on the Board created by the departure of a director that was nominated by SHUSA, and we are required to take all action within our power to cause such vacancy to be filled by such designated replacement (including by promptly appointing such designee to the Board).

With respect to directors not nominated by SHUSA, the Board is responsible for selecting nominees for election to the Board by our stockholders. Generally, the Board begins identifying nominees by first evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of the Board does not wish to continue in service or if the Board decides not to re-nominate a member for re-election, the Board then identifies the desired skills and experience of a new nominee in light of the criteria described below. Generally, the Board identifies candidates for director nominees in consultation with sitting members of the Board and with management, through the use of search firms or other advisors, through recommendations submitted by other directors or stockholders, and through such other methods as the Board deems appropriate. In identifying and evaluating a potential director nominee, the Board considers, among other things, the following factors:

In its identification and evaluation process, the Board collects information about candidates through interviews, detailed questionnaires, and other means that the Board deems helpful in such process.

The Board’s goal is to assemble a Board that brings together a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the Board will also consider candidates with appropriate non-business backgrounds.

The Board is also committed to diversified Board membership. The Board will not discriminate, including on the basis of race, national origin, gender, sexual orientation, religion, or disability, in selecting nominees. Diversity and inclusion are values embedded into our culture and are fundamental to our business. In keeping with those values, when assessing a candidate, the Board considers the different viewpoints and experiences that a candidate could bring to the Board and how those viewpoints and experiences could enhance the Board’s effectiveness in the execution of its responsibilities. The Board is also committed to seeking highly qualified women and individuals from minority groups to include in the pool from which new candidates are selected. In addition, the Board assesses the diversity of the Board and committees as a part of its annual self-evaluation process.

Other than the foregoing, there are no stated minimum criteria for director nominees. The Board may also consider such other factors as it may deem in our best interests and the best interests of our stockholders. We also believe it may be appropriate for key members of our management to participate as members of the Board.

Subject to the rights of our majority stockholder, stockholders may nominate candidates for election to the Board. In order to nominate a candidate for election to the Board, stockholders must follow the procedures set forth in our Bylaws, including timely receipt by the Secretary of the Company of notice of the nomination and certain required disclosures with respect both to the nominating stockholder and the recommended director nominee. For a complete description of the requirements and procedures for stockholder nominations, please refer to our Bylaws.

Directors may be elected by a plurality of votes cast at any meeting called for the election of directors at which a quorum is present. The presence of a majority of the holders of our Common Stock, whether in person or by proxy, constitutes a quorum. The Board did not receive any recommendations from stockholders (other than SHUSA) requesting that the Board consider a candidate for inclusion among the nominees in this Proxy Statement. However, our policy is that we will consider any such recommendation as long as the stockholder making the recommendation provides to us the information concerning the recommended individual that is required under our Bylaws.

EXECUTIVE OFFICERS

EXECUTIVE OFFICERS

The names, ages, and current positions of our executive officers as of the date of this Proxy Statement are listed in the table below. Each executive officer, including the CEO, is elected by the Board. Each executive officer holds office until his or her successor is elected and qualified, or until he or she is removed from, or resigns from, that office. There are no family relationships among the executive officers nor is there any agreement or understanding between any officer and any other person pursuant to whom the officer was elected.

Scott Powell

President and Chief Executive Officer

Mr. Powell is discussed above under “Corporate Governance—Proposal 1: Election of Directors—Information Concerning the Nominees.”

Juan Carlos Alvarez de Soto

Chief Financial Officer

Mr. Alvarez de Soto joined us as our Chief Financial Officer in October 2017. Prior to joining us, Mr. Alvarez de Soto served as Corporate Treasurer for SHUSA from 2009 to 2017, overseeing SHUSA’s liquidity risk management, asset liability management, and treasury functions. Prior to joining SHUSA, from 2005 to 2008, he was Senior Vice President and Head of Treasury and Investments for Banco Santander’s International Private Banking at BSI and Banco Santander Suisse. In this role he managed a team of investment professionals, overseeing the assets of Banco Santander’s international high-net-worth clients. From 2000 to 2004, Mr. Alvarez de Soto held the position of Directeur Adjoint for Santander Central Hispano Suisse, Geneva and was Head of Treasury, Trading and Asset-Allocation. Mr. Alvarez de Soto holds a master’s degree in finance from George Washington University and a bachelor’s degree in management from Tulane University, and is a Chartered Financial Analyst.

Joshua Baer

Chief Risk Officer

Mr. Baer has served as our Chief Risk Officer since March 2018, joining us from SHUSA, where he served as Head of Operations and Risk Strategy since May 2017. Prior to SHUSA, Mr. Baer worked at Capital One for 13 years, most recently as the Head of Consumer Credit Risk Analytics since 2010. Mr. Baer holds a bachelor’s degree in finance from James Madison University and a master’s degree in business administration from the Haas School of Business at the University of California, Berkeley.

Sandra Broderick

Executive Vice President, Head of Operations

Ms. Broderick has served as our Executive Vice President, Head of Operations since October 2017. Ms. Broderick joins us from U.S. Bank, where she served as Executive Vice President, Operations Executive since March 2017. Prior to that, Ms. Broderick served as Managing Director, Operations Executive at JP Morgan Chase from March 2002 to March 2017, where she also served as Head of Operations for their Automotive Finance business beginning in 2012. Ms. Broderick was also a Senior Operations Director at GE Capital from December 1995 to September 1998 and a Senior Vice President of Operations Executive at Bank One from September 1998 to March 2002. Ms. Broderick attended State University of New York at Buffalo.

EXECUTIVE OFFICERS

Reza Leaali

Chief Technology Officer

Mr. Leaali has served as our Chief Technology Officer since February 2018. He previously served as Chief Information Officer for Wells Fargo from 2002 to 2018 and for PurchasePro from 2001 to 2002. Prior to that, Mr. Leaali held the position of Chief Architect at Ingram Micro from 1995 to 2001. Mr. Leaali holds a bachelor’s degree in computer science from North London University.

Richard Morrin

President, Chrysler Capital and Auto Relationships

Mr. Morrin has served as our President, Chrysler Capital and Auto Relationships since October 2017. He previously served as our Chief Operating Officer since February 2016, having joined us as our Executive Vice President, New Business in August 2011. Prior to joining us, Mr. Morrin held a variety of management positions in 21 years of combined service at Ally Financial and General Motors Acceptance Corp. Most recently, he managed the commercial lending operations for Ally automotive dealers in the United States and Canada. Mr. Morrin holds a bachelor’s degree in economics from the University of Pennsylvania and a master’s degree in business administration from the University of Virginia.

Christopher Pfirrman

Chief Legal Officer, General Counsel, and Corporate Secretary

Mr. Pfirrman has served as our Chief Legal Officer, General Counsel, and Corporate Secretary since September 2015. He was previously employed by SHUSA, and most recently, served as Senior Executive Vice President and General Counsel of SHUSA and of SBNA from January 2012 to September 2015. He served as SBNA’s Senior Vice President and Deputy General Counsel from January 2000 to January 2012, and he was an attorney in the law firm of Edwards & Angell, LLP (now Locke Lord LLP) from 1996 to 2000. He received a bachelor’s degree from Fairfield University in Connecticut and a law degree from the College of William and Mary in Virginia. He is a member of the Massachusetts and Connecticut bars.

Lisa VanRoekel

Chief Human Resources Officer

Ms. VanRoekel has served as our Chief Human Resources Officer since March 2016, having previously served as our Head of Human Resources from 2006 to 2009. Previously, she served as the Interim Chief Human Resources Officer of SHUSA from December 2015 to February 2016; as the Chief Human Resources Officer of SBNA from December 2013 to February 2016; as the Deputy Managing Director, Human Resources of SBNA from July 2012 to December 2013; and as the HR Corporate Business Director of SBNA from March 2009 to July 2012. Ms. VanRoekel holds bachelor’s and master’s degrees in journalism from East Texas State University.

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

AUDIT

Proposal 2: Ratification of Appointment of Independent Registered

                     Public Accounting Firm

Our Audit Committee is responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm retained to perform the audit of our financial statements and our internal control over financial reporting. The Audit Committee has appointed the accounting firm of PwC to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018.

Stockholder Ratification of Appointment of Independent Registered Public Accounting Firm

A proposal to ratify the appointment of PwC to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2018 will be presented at the 2018 Annual Meeting. PwC audited our consolidated financial statements for 2017. Representatives of PwC are expected to be present at the meeting. They will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from stockholders.

Stockholder ratification of the selection of PwC as our independent registered public accounting firm is not mandated by our Bylaws or otherwise required. However, the Board is submitting the selection of PwC to our stockholders for ratification as a matter of good corporate governance. If our stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee at its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our best interests and our stockholders’ best interests.

The affirmative vote of the holders of a majority of the shares of Common Stock entitled to vote on this matter at the 2018 Annual Meeting, whether in person or represented by proxy, will approve the proposal to ratify PwC as our independent registered accounting firm for the fiscal year ending December 31, 2018.

AUDIT - REPORT OF THE AUDIT COMMITTEE

AUDIT FEES AND RELATED MATTERS

Audit and Non-Audit Fees

The following tables present fees for professional audit services rendered by PwC for the audits of our annual financial statements and the effectiveness of internal controls for the years ended December 31, 2017 and 2016, and fees for other services rendered by PwC during 2017 and 2016.

Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditor

The Audit Committee has implemented procedures to ensure that all audit and permitted non-audit services provided to us are pre-approved by the Audit Committee. Specifically, the Audit Committee pre-approves the use of an independent accountant for specific audit and non-audit services, within approved monetary limits. If a proposed service has not been pre-approved, then it must be specifically pre-approved by the Audit Committee before it may be provided by our independent accountant. Any pre-approved services exceeding the pre-approved monetary limits require specific approval by the Audit Committee. The Audit Committee may delegate pre-approval authority to one or more of its members when expedition of services is necessary.

All of the audit-related, tax, and other services provided by PwC to us in 2017 were approved by the Audit Committee by means of specific pre-approvals or under procedures established by the Audit Committee. The Audit Committee has determined that all non-audit services provided by PwC in 2017 were compatible with maintaining its independence in the conduct of its auditing functions.

REPORT OF THE AUDIT COMMITTEE

This report reviews the actions taken by our Audit Committee with regard to the Company’s financial reporting process during 2017 and particularly with regard to the Company’s audited consolidated financial statements as of December 31, 2017 and 2016 and for the three years ended December 31, 2017.

The Audit Committee is comprised of three non-management Board members. The Board has determined that each member of our Audit Committee has no material relationship with the Company under the Board’s director independence standards and that each is independent under the NYSE’s listing standards and the SEC’s standards relating to the independence of audit committees. The Board has also determined that each member is financially literate and is an “audit committee financial expert” as defined by the SEC.

The Audit Committee operates under a written charter adopted by the Board that is published on the investor relations section of our website at http://investors.santanderconsumerusa.com. The Audit Committee annually reviews its written charter and practices, and has determined that its charter and practices are consistent with the listing standards of the NYSE and the provisions of the Sarbanes-Oxley Act of 2002.

The purpose of the Audit Committee is to assist Board oversight of (i) our independent registered public accounting firm’s qualifications and independence, (ii) the performance of the internal audit function and that of the independent registered public accounting firm, (iii) management’s responsibilities to ensure that there is in place an effective system of controls reasonably designed to safeguard the assets and income of the Company, (iv) the integrity of our financial statements, and (v) compliance with our ethical standards, policies, plans, and procedures, and with laws and regulations.

The Audit Committee discussed with PwC the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301 (Communications with Audit Committees), including PwC’s overall audit scope and audit approach as set forth in the terms of their engagement letter, PwC’s overall audit strategy for significant audit risks identified by them, and the nature and extent of the specialized skills necessary to perform the planned audit. In addition, the Audit Committee monitors

AUDIT - REPORT OF THE AUDIT COMMITTEE

the audit, audit-related, and tax services provided by PwC. Details of the fees paid to PwC can be found in this Proxy Statement under “Audit—Audit Fees and Related Matters.”

PwC provided the Audit Committee the written disclosures and the letter required by PCAOB’s Ethics and Independence Rule 3526 (Communications with Audit Committees Concerning Independence), and the Audit Committee discussed and confirmed with PwC their independence. The Audit Committee has considered whether PwC’s provision of any non-audit services to us is compatible with maintaining auditor independence. The Audit Committee has concluded that the provision of any non-audit services by PwC was compatible with PwC’s independence in the conduct of its auditing functions.

Management is responsible for our internal control over financial reporting, the financial reporting process, and our consolidated financial statements. The independent auditor is responsible for performing an independent audit of our consolidated financial statements and of the effectiveness of internal control over financial reporting in accordance with auditing standards promulgated by the PCAOB. Our Internal Audit Department, under the Chief Audit Executive, is responsible to the Audit Committee for preparing an annual audit plan and conducting internal audits intended to evaluate our internal control structure and compliance with applicable regulatory requirements. The members of the Audit Committee are not professionally engaged in the practice of accounting or auditing; as noted above, the Audit Committee’s responsibility is to monitor and oversee these processes.

The Audit Committee regularly meets and holds discussions with our management and internal auditors and with the independent auditor, including sessions with the internal auditors and with the independent auditor without members of management present. Management represented to the Audit Committee that our consolidated financial statements were prepared in accordance with GAAP. The Audit Committee reviewed and discussed our consolidated financial statements with management and PwC.

The Audit Committee also discussed with PwC the quality of our accounting principles, the reasonableness of critical accounting estimates and judgments, and the disclosures in our consolidated financial statements, including disclosures relating to significant accounting policies. Based on the Audit Committee’s discussions with our management, internal auditors, and PwC, as well as a review of the representations given to the Audit Committee and PwC’s reports, the Audit Committee recommended to the Board, and the Board approved, inclusion of the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on February 28, 2018.

Submitted by the Audit Committee of the Board:

William F. Muir, Chair

Stephen A. Ferriss

Robert J. McCarthy

This report shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or Exchange Act, and shall not otherwise be deemed filed under these Acts.

COMPENSATION - PROPOSAL 3: NON-BINDING, ADVISORY APPROVAL OF NEO COMPENSATION (“SAY-ON-PAY”)

COMPENSATION

Proposal 3: Non-Binding, Advisory Approval of NEO Compensation (“Say-on-Pay”)

As described in detail in the CD&A and the related compensation tables and narrative discussion beginning on page 26 of this Proxy Statement, our executive compensation programs are designed to reward our NEOs for the achievement of short-term and long-term strategic and operational goals, align NEO and stockholder interests, attract and retain quality leadership, and support a pay-for-performance philosophy, while at the same time avoiding the encouragement of unnecessary or excessive risk taking.

In accordance with Section 14A of the Exchange Act, the Board is asking our stockholders to indicate their support for our executive compensation programs as described in this Proxy Statement. This vote is referred to as a “Say-on-Pay” vote. This vote is not intended to address any specific term of compensation, but rather the overall compensation of our NEOs and the philosophy, policies, and practices described in this Proxy Statement. Accordingly, the Board is asking our stockholders to vote FOR the following resolution at the 2018 Annual Meeting:

“RESOLVED, that the stockholders of Santander Consumer USA Holdings Inc. (the “Company”) hereby approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules, including in the “Compensation Discussion and Analysis” and the compensation tables and related narrative discussion included in the Proxy Statement for the 2018 Annual Meeting of Stockholders.”

Although this vote regarding the compensation of our NEOs is not binding, the Board values the opinions of our stockholders and will consider the result of the vote when determining future executive compensation arrangements.

At the 2015 Annual Meeting, our stockholders approved a non-binding, advisory proposal to hold triennial Say-on-Pay votes. In consideration of the results of this advisory vote, the Board has adopted a policy providing for triennial Say-on-Pay votes. Unless the Board modifies this policy, our next Say-on-Pay vote following this vote will be held at our 2021 Annual Meeting.

The affirmative vote of the holders of a majority of the shares of Common Stock entitled to vote on this matter at the Annual Meeting, whether in person or represented by proxy, will approve, on an advisory basis, the compensation paid to the Company’s NEOs.

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Compensation Discussion and Analysis

Executive Summary

Introduction. This CD&A describes the material elements of compensation awarded to, earned by, or paid to each of our NEOs, and focuses on the information contained in the following tables and related footnotes primarily for the year 2017.

This CD&A explains the overall objectives of our executive compensation program, how each element of our executive compensation program is designed to satisfy these objectives, and the policies underlying our 2017 compensation program.

The Compensation Committee designs our executive compensation program to be consistent with best practices, support our businesses in achieving their key goals and imperatives, and drive stockholder value. The Compensation Committee believes that our compensation programs, which are intended to comply with all applicable laws and regulations and directives from our regulators, are governed by a set of sound principles and are designed to mitigate excessive risk-taking.

2017 Business Performance Highlights. With net income of $1.2 billion ($627 million adjusted net income) and $20.1 billion in total originations, our full year 2017 financial results demonstrate our continued profitability and strong returns. Additionally, we achieved a return on average assets (“ROA”) of 3% (1.6% adjusted ROA) and a return on average equity (“ROE”) of 21.0% (11.1% adjusted ROE), and issued $9.2 billion in securitizations.¹

In line with the Compensation Committee’s goal of balancing risk/reward management with income and profitability, the above results were accomplished while also taking a measured approach to originations in a competitive market and improving the credit quality of our balance sheet.

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2017 Compensation Highlights. The Compensation Committee’s compensation decisions for 2017 reflect the direct relationship between the pay opportunities for our NEOs and performance for our stockholders. Based on our strong financial performance in an increasingly competitive market, consistent economic stability, robust customer relations, and steady regulatory compliance, the Compensation Committee approved funding of 95% of the target amount of the SC Executive Bonus Pool (the “Bonus Pool”).

The 95% funding of the Bonus Pool was further supported by the accomplishment of key goals related to our survey and program to measure and report customer satisfaction and completion of critical regulatory, compliance, and risk milestones.

As part of the continual assessment and evolution of our compensation programs for NEOs, the Compensation Committee oversaw the first performance year of a Special Regulatory Incentive Program (the “SRIP”) in 2017. Under the SRIP, specified NEOs are eligible to receive a multi-year targeted award based on their performance at SC and achievement of companywide objectives. For 2017, the SRIP was tailored to incentivize NEOs to achieve key regulatory milestones and each of our NEOs participated in the program. For more information, please see “Principal Components of Executive Compensation—SRIP” in this CD&A.

Allocation of Compensation Between SC and SHUSA for Mr. Powell. On August 27, 2017, the Board appointed Scott Powell to succeed Jason Kulas as our CEO. Mr. Powell also continued (and continues) to serve as the CEO of our parent, SHUSA. In connection with his appointment, our Compensation Committee and SHUSA’s compensation committee jointly determined the following approach to allocating Mr. Powell’s compensation between SC and SHUSA for 2017:

Given the allocation of compensation between us and SHUSA for Mr. Powell’s services, the assessment of Mr. Powell’s performance and decisions about the total amount of his 2017 bonus were made jointly by our Compensation Committee and SHUSA’s compensation committee. Please see SHUSA’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 for information about Mr. Powell’s total compensation paid by SHUSA, including the amounts reported in this Proxy Statement for amounts attributable to his service as our CEO. Our Compensation Committee will review this allocation approach for 2018 compensation with SHUSA and, depending on the expected allocation of Mr. Powell’s duties for 2018, may change the approach next year.

Key Executive Compensation Principles. The fundamental principles that the Compensation Committee follows in designing and implementing compensation programs for our NEOs are to:

The Compensation Committee aims to provide a total compensation package that is comparable to that of other financial institutions with whom we compete for business and for talent, taking into account publicly available information provided by our independent compensation consultant. Within this framework, the Compensation Committee considers each component of each NEO’s compensation package independently; that is, the Compensation Committee does not evaluate what percentage each component comprises of the total compensation package. In 2017, the Compensation Committee took into account SC’s performance and each NEO’s individual performance, level of responsibility, and track record within the organization in setting the NEO’s compensation.

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2017 Compensation Actions

How we compensated our CEO serving at the end of 2017

How we compensated our other NEOs serving at the end of 2017

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PROCESS FOR DETERMINING EXECUTIVE COMPENSATION

Compensation Committee

The Compensation Committee sets the compensation for our executive officers, including our NEOs, and has oversight of, among other things, adoption, modification, and termination of the terms of our executive incentive plan(s), and approval of amounts paid to our NEOs under those plans. The Compensation Committee operates under a written charter adopted by the Board that is published on the investor relations section of our website at http://investors.santanderconsumerusa.com. Pursuant to its charter, the Compensation Committee may delegate responsibilities to subcommittees consisting of one or more of its members, who must report on their activities to the Compensation Committee.

The Compensation Committee conducts an in-depth assessment of each NEO’s performance against his or her individual goals, as well as against SC’s performance, and then applies its judgment to make compensation decisions. The Compensation Committee utilizes a formula to approve a bonus pool for executive officers and certain other senior members of management (please see “Principal Components of Executive Compensation—Annual Bonuses—SC Bonus Pool” in this CD&A for further information), but does not otherwise rely on a formula or matrix to make individual compensation decisions. The Compensation Committee believes this process provides accountability for performance against SC and individual goals and enables the Compensation Committee to assess effectively the quality of the performance and leadership demonstrated by each NEO. Importantly, the Compensation Committee believes that the process also differentiates among each NEO’s performance and motivates each NEO’s short-term and long-term results as well as promotes innovation and business transformation within SC.

To advise the Compensation Committee in fulfilling its duties and responsibilities, the Compensation Committee retained Pay Governance LLC (“Pay Governance”) in July 2017 to act as its independent consultant and advise on executive compensation. Pay Governance reported directly to the Compensation Committee and performed no other work for SC in 2017. As part of its 2017 engagement of Pay Governance, the Compensation Committee analyzed Pay Governance’s independence from management and whether hiring Pay Governance would raise a conflict of interest. The Compensation Committee performed this analysis by taking into consideration the following factors set forth in Section 303A.05 of the NYSE Listed Company Manual:

The Compensation Committee determined, based on its analysis of the above factors, that Pay Governance is independent from management and that the work of Pay Governance and the individual compensation advisors employed by Pay Governance as compensation consultants to the Compensation Committee have not presented any conflict of interest.

Pay Governance assisted the Compensation Committee in 2017 by providing market and industry information regarding executive compensation. In providing such information, Pay Governance identified consumer finance and banking companies with which we compete directly for both business and talent. In identifying those companies, Pay Governance considered institutions in comparable industries and product markets, with comparable business models, and of comparable sizes. While the Compensation Committee considered all available information when determining NEO compensation for 2017, including the data provided by Pay Governance, it did not engage in any benchmarking of NEO compensation for 2017.

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Consideration of Say-on-Pay Vote

The Compensation Committee values input from our stockholders on our executive compensation program and our principles and objectives when determining executive compensation. One way the Compensation Committee receives that input is through the results of an advisory stockholder vote on executive compensation (the “Say-on-Pay vote”). We hold a Say-on-Pay vote every three years, most recently in 2015, based on the preference expressed by our stockholders at our 2015 Annual Meeting. In the 2015 Say-on-Pay vote, a significant majority of our stockholders approved, on an advisory basis, the compensation for our NEOs. The Compensation Committee did not take any specific actions with respect to 2017 compensation decisions for our NEOs as a result of the 2015 Say-on-Pay vote.

As in 2015, the Compensation Committee will assess the results of this year’s Say-on-Pay Vote with careful consideration of our stockholders’ preferences and will determine what, if any, changes should be made to our executive compensation programs currently in place. Even with a full ratification of the compensation decisions, the Compensation Committee will continue to review our NEOs’ performance against their individual goals and the goals of SC.

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PRINCIPAL COMPONENTS OF EXECUTIVE COMPENSATION

Overview of Components

The Compensation Committee uses the following elements of compensation to attract and retain NEOs and maintain a stable team of effective leaders, to balance the compensation of our NEOs with the short-term and long-term objectives of SC, and to align the interests of our NEOs with the interests of all of our stockholders. For 2017, the compensation that we paid to our NEOs consisted primarily of base salary and short- and long-term incentive opportunities, as described more fully below. In addition, our NEOs were eligible for participation in company-wide health and welfare benefits plans, and provided with certain health and welfare benefits and perquisites not available to our employees generally, as described more fully below. The principal elements of compensation available to our NEOs in 2017 were as follows:

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Base Salary

Base salary reflects each NEO’s level of responsibility, leadership, and tenure, as well as the Compensation Committee’s evaluation of each NEO’s contribution to the performance and profitability of SC. In establishing each NEO’s annual base salary, the Compensation Committee considered market salary data, our budget, achievement of performance objectives, and our CEO’s assessment of the other NEOs’ performance.

The following table provides detail regarding each NEO’s annual base salary rate for 2017:

The Compensation Committee approved increases in base salaries for certain NEOs during 2017. For more information regarding these base salary increases, please see “2017 Compensation Actions” in this CD&A.

Annual Bonuses

Introduction. For 2017, the annual compensation of our NEOs included bonuses payable in cash and RSUs under SC’s Senior Executive Annual Bonus Plan (the “Bonus Plan”).

The Bonus Plan is intended to provide an incentive for superior work and to motivate covered key executives toward even greater achievement and business results, to tie their goals and interests to the long-term interests of our stockholders, and to enable us to attract and retain highly-qualified executives. Under the Bonus Plan, our executive officers, including our NEOs and certain senior members of management, are eligible to receive bonus payments for a specified period (for example, our fiscal year), which may be performance-based or discretionary.

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Individual Bonus Targets. The Compensation Committee assigned to each NEO a target bonus award opportunity under the Bonus Plan for 2017 based on the NEO’s role and responsibilities, rate of base salary, and competitive practices at our compensation peer groups. The following table provides detail regarding each NEO’s target bonus under the Bonus Plan for performance in 2017:

SC Bonus Pool. The Compensation Committee approved the Bonus Pool as a methodology for setting the overall funding of Bonus Plan awards with respect to 2017 for our executive officers, including our NEOs, and certain senior members of management. The target amount of the Bonus Pool is the sum of the individual target bonus amounts. The Bonus Pool methodology incorporates a balanced, “scorecard” approach that considers our financial performance against budgeted financial goals, as well as performance related to customer satisfaction, regulatory compliance, employees, and culture. The Compensation Committee approved the following metrics for the Bonus Pool for 2017:

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”Cost of Credit Ratio” is defined as the ratio of the sum of total provision over the prior 12 months to the average 12-month customer loan balances (excluding all of the public balance sheet). “Contribution to Group Capital” is defined as net profit minus capital deductions and 11% of change in risk-weighted assets. “Net Profit” is defined as net profit after tax, prior to minority interests, and adjusted for significant one-time items, including tax reform and other tax-related items, hurricane-related provisions, certain legal reserves, a settlement with Thomas G. Dundon, and other non-recurring items. “RoRWA” (or “return on risk-weighted assets”) is defined as the ratio of net income to total risk-weighted assets. (Under certain banking regulators’ risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The aggregate dollar amount in each risk category is multiplied by the associated risk weight of the category. The resulting weighted values are added together with the measure for market risk, resulting in our total risk-weighted assets.)

For 2017, we performed below target on our Net Profit and RoRWA goals. For purposes of the Bonus Plan:

We performed above target on both categories in the Regulatory & Risk metric. On the Customers & Employees metric, we performed only slightly below target on two categories, and below target on the other two categories. As for capital creation, while performance was slightly below target, our capabilities in 2017 continued to be strong and show signs of improving going into 2018.

The final calculated score of the Bonus Pool before the exercise of any discretionary adjustment was 89.64%. The Bonus Pool provides that this final calculated score be adjusted by the difference between our bonus plan score and the final score under SHUSA’s bonus plan, multiplied by 20%. After reviewing SHUSA’s bonus plan score, the Compensation Committee determined that an adjustment of 2.50% was appropriate.

While some of the metrics for the Bonus Pool were below target, net income was strong in an increasingly competitive market and our NEOs made significant strides in achieving their individual goals, instilling a culture of compliance and balancing risk/reward management with income and profitability. As noted above, the Compensation Committee may use its discretion to adjust the final Bonus Pool funding up or down by 20 percentage points in either direction. Accordingly, the Compensation Committee in its discretion determined that the Bonus Pool should be funded at 95% of target for 2017, summarized as follows:

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Individual Performance Assessments and Award Determinations. As described above, our performance resulted in an approved funding of 95% of the Bonus Pool target. This Bonus Pool percentage is multiplied by the applicable target bonus amount of each executive officer, including each NEO, to establish an initial starting point for each executive subject to the Bonus Pool.

Each executive’s award under the Bonus Plan is subject to a discretionary adjustment, either positive or negative, based on the evaluation of the executive’s performance by the Compensation Committee. In no event, however, will the aggregate total of the actual bonus amounts exceed the aggregate total of the Bonus Pool. The Compensation Committee believes that this individual performance review and these discretionary adjustments serve stockholder interests by providing the Compensation Committee with a means to differentiate compensation outcomes among our NEOs based on the quality of the performance and leadership demonstrated by each NEO.

The Compensation Committee conducted a detailed evaluation and assessment of each NEO’s 2017 performance against pre-established performance measures that were tied to financial performance and strategic initiatives, including risk and compliance measures. Please see “2017 Compensation Actions” in this CD&A for the additional information on the individual performance goals and assessments.

For 2017, following the review of our performance and each NEO’s individual performance, the Compensation Committee approved awards under the Bonus Plan for each NEO as follows:

For 2017, awards under the Bonus Plan were payable in cash and RSUs as discussed below. These amounts will appear in the Summary Compensation Table of our proxy statements over several years as follows:

Form of Awards: Mix of Current and Deferred Cash and RSUs. As we are a controlled company, owned indirectly by Banco Santander, certain of our executive officers, including our NEOs, and other identified staff are subject to Directive 2013/36/EU (“CRD IV”) promulgated by the European Parliament and Council of the European Union. Under Banco Santander’s Management Board Compensation Policy and Identified Staff Plan, certain identified staff, including all of our executive officers and all of our NEOs, are required to defer receipt of a portion of their variable compensation (including all bonuses paid under the Bonus Plan) in order to comply with CRD IV. Ultimately, these policies are intended to ensure that annual bonus awards encourage sustainable, long-term performance consistent with our risk appetite and risk management policies, and are aligned with long-term stockholder interests.

Accordingly, each NEO’s aggregate award under the Bonus Plan for 2017 (except for Mr. Powell, whose bonus award’s cash and equity mix is described above under “Compensation Discussion and Analysis—Executive Summary—Allocation of Compensation Between SC and SHUSA for Mr. Powell”) was payable 50% in cash (a portion of which was paid immediately and a portion of which was deferred) and 50% in the form of stock-settled RSUs (a portion of which was vested and settled immediately and a portion of which was subject to vesting). After the shares subject to the RSUs are settled, they will remain subject to transfer and sale restrictions for one year.

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The following table reflects the portions of each NEO’s bonus award for 2017 that were payable in the form of cash and RSUs:

The portion of the total award deferred is based on Banco Santander policies as implemented by SC. Under those policies, each of Mr. Powell and Mr. Kulas had 50% of his Bonus Plan award deferred, and each of the other NEOs had 40% of his respective Bonus Plan awards deferred.

The deferred portion (whether cash or RSUs) becomes earned and vested annually over a vesting period of five years for Mr. Powell and Mr. Kulas, and three years for the other NEOs. Generally, an executive must remain continuously employed with us through each vesting date; however, under the terms of their separation agreements, Mr. Kulas’s and Mr. Cochran’s bonus plan awards will continue to vest without regard to their continued employment.

There are additional corporate performance goals in order for Mr. Powell and Mr. Kulas to earn the vesting installments in years three, four, and five, and for certain other NEOs (for 2017, Mr. Cochran and Mr. Pfirrman) to earn the vesting installment for year three. These performance goals further encourage sustainable, long-term performance. Mr. Alvarez de Soto’s and Mr. Morrin’s awards for 2017 are not subject to additional performance goals. The performance metrics are weighted 50% towards Banco Santander performance and 50% towards SC performance and follow a balanced, “scorecard” approach:

Performance below target goals for any component will result in below-target payouts, and performance below certain threshold goals will result in no payout for the component. No amount greater than the target award can be earned.

The payment of the deferred portion of the 2017 awards under the Bonus Plan is conditioned on avoidance of certain events or conduct, including: (1) our deficient financial performance; (2) material breach of any of our material internal rules or regulations; (3) material negative restatement of our financial statements (other than any restatement undertaken as a result of a change in accounting standards); (4) material negative change in our capitalization or risk profile prior to the applicable settlement date; and (5) certain other detrimental conduct. These conditions are intended to further reinforce a business culture that promotes conduct based on the highest ethical standards consistent with our risk management policies.

Our NEOs had the following amounts of their variable compensation for 2017 deferred under the design described above:

Long-Term Incentive Compensation

Introduction. In addition to RSUs granted as a portion of the Bonus Plan award, which are a form of long-term equity incentive, the Compensation Committee may, in its discretion, grant additional long-term incentive awards under our Omnibus Plan. These awards

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may be in the form of restricted stock, RSUs, stock options, or other forms of award permitted under the Omnibus Plan. The Compensation Committee did not grant any such awards in 2017.

2016 SAN Performance Awards. Although no performance-based RSU (“PSU”) awards were made under the SAN Performance Award program in 2017, and none are expected to be made going forward, awards made in 2015 became earned in 2017 and awards made in 2016 continue to vest until 2019. The PSUs become earned based on the multi-year performance of Banco Santander. The awards made in 2015 became earned based on Banco Santander’s relative TSR performance over 2014–2017. PSUs granted in 2016 vest in March 2019 based on the achievement of a range of performance goals by Banco Santander:

Settlement of the PSUs is contingent on the NEOs remaining employed through the March 2019 settlement date. As with Bonus Plan RSUs, the PSUs are also conditioned on avoidance of certain events or conduct by the executive, including: (1) our deficient financial performance; (2) material breach by the NEO of any of our material internal rules or regulations; (3) material negative restatement of our financial statements (other than any restatement undertaken as a result of a change in accounting standards); (4) material negative change in our capitalization or risk profile prior to the applicable settlement date; or (5) certain other detrimental conduct by our NEO. After the shares subject to the PSUs are settled, they will remain subject to transfer and sale restrictions for one year.

SRIP

Introduction. We, in conjunction with SHUSA, instituted a Special Regulatory Incentive Program (SRIP) in 2017 to provide a multi-year targeted award tied to participants’ status and standing at SC, as well as our general financial stability and our passing key regulatory milestones. The SRIP is tailored to maximize incentives for performance. Participants are eligible to receive awards that track the same payment procedure and timing as annual bonus awards. SRIP awards are essentially additional discretionary bonuses that our high-performing senior executives are eligible for, contingent upon accomplishing entity-wide performance goals.

Target Opportunities. Under the SRIP, we set total target opportunities for each NEO over the life of the multi-year program, a percentage of which would be at stake during separate performance cycles. We set $2,000,000 as Mr. Powell’s total target award; $1,000,000 as the total target award for Mr. Morrin, Mr. Cochran, Mr. Kulas, and Mr. Dawood; $823,250 as the total target award for Mr. Alvarez de Soto, and $559,250 as the total target award for Mr. Pfirrman.

Performance Cycles. While a multi-year award, the SRIP will be evaluated in cycles and awards will be evaluated and settled on an annual basis. Like our annual bonuses, SRIP awards will be made early in the year following each performance year. For the 2017 performance year, 25% of each NEO’s multi-year target award was at stake. The goals for the NEOs to earn 2017 SRIP awards included our passing the CCAR (an annual review or “stress test” of financial institutions) and securing approval of the capital plan’s external dividends and capital distributions.

Performance Assessments and Award Determinations. Because we achieved both of the SRIP goals for 2017, the Compensation Committee granted the NEOs 25% of their respective SRIP awards at stake for 2017 performance, as follows:

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Form of Awards: Mix of Current and Deferred Cash and RSUs. As with our annual bonuses, in order to comply with CRD IV, each NEO’s aggregate award under the SRIP for 2017 was payable 50% in cash (a portion of which was paid immediately and a portion of which was deferred) and 50% in the form of stock-settled RSUs (a portion of which was settled immediately and a portion of which was subject to vesting). After the shares subject to the RSUs are settled, they will remain subject to transfer and sale restrictions for one year. The following table reflects the portions of each NEO’s SRIP award for 2017 that was payable in the form of cash and RSUs:

The portion of the total SRIP award deferred is based on Banco Santander policies as implemented by SC. Under those policies, Mr. Powell and Mr. Kulas have 50% of their SRIP awards deferred, and the other NEOs have 40% of their SRIP awards deferred.

The deferred portion of the SRIP (whether cash or RSUs) becomes earned and vested annually over a vesting period of three years (for Mr. Alvarez de Soto, Mr. Morrin, Mr. Pfirrman, and Mr. Cochran) or five years (for Mr. Powell and Mr. Kulas). Generally, an executive must remain continuously employed with us through each vesting date; however, under the terms of their separation agreements, Mr. Kulas’s and Mr. Cochran’s SRIP awards will continue to vest as though they were still employed.

The additional corporate performance goals applicable to certain NEOs’ annual bonuses are also applicable to the deferred portions of those NEOs’ SRIP awards. In order for Mr. Powell and Mr. Kulas to earn the vesting installments in years three, four, and five, and for other NEOs (for 2017, Mr. Cochran and Mr. Pfirrman) to earn the vesting installment for year three, they must meet performance goals. These performance goals further encourage sustainable, long-term performance. Mr. Alvarez de Soto’s and Mr. Morrin’s awards for 2017 are not subject to performance goals.

As with payment of the deferred portion of Bonus Plan awards, payment of the deferred portion of SRIP awards is also conditioned on avoidance of certain events or conduct by the executive, including: (1) our deficient financial performance; (2) material breach of any of our material internal rules or regulations; (3) material negative restatement of our financial statements (other than any restatement undertaken as a result of a change in accounting standards); (4) material negative change in our capitalization or risk profile prior to the applicable settlement date; and (5) certain other detrimental conduct. After the shares subject to the SRIP RSUs are settled, they will remain subject to transfer and sale restrictions for one year.

Our NEOs had the following amounts of their SRIP awards for 2017 deferred under the design described above: