Date and Time

Wednesday, April 26, 2017

9:00 a.m. (local time)

Place

Popular Center Building

PH Floor

209 Muñoz Rivera Avenue

San Juan, Puerto Rico

Record Date

February 27, 2017

Items of Business

In San Juan, Puerto Rico, on March 9, 2017.

By Order of the Board of Directors,

Javier D. Ferrer

Executive Vice President, Chief Legal Officer and Secretary

Popular’s Corporate Governance Guidelines provide that at least two-thirds of the Board shall consist of directors who the Board has determined have no material relationship with Popular and who are otherwise “independent” under the director independence standards of NASDAQ. The Board, with the assistance of the Corporate Governance and Nominating Committee, conducts an annual review of any relevant business relationships that each director may have with Popular and whether each director meets the independence standards of NASDAQ. The Board has determined that all of its directors and

nominees, except for Mr. Carrión, have no material relationship with Popular and meet the independence standards of NASDAQ.

As part of the process to determine Ms. Ferré’s independence, the Board considered payments made by Popular in the ordinary course of business to various entities related to Ms. Ferré in connection with advertising activities of Popular and its affiliates and determined that these business relationships are not material and did not impair the ability of Ms. Ferré to act independently.

Each year, the Board evaluates whether Popular’s leadership structure is in the best interest of Popular. The Board does not have a policy on whether the Chairman and CEO positions should be separate or combined. Since 1994, Mr. Carrión has served as Popular’s Chairman and CEO. The Board believes that this leadership structure best serves the interests of Popular as it allows for a clearly defined leadership role and for increased efficiency and better leadership coordination. It also allows the CEO to work more closely and collegially with the members of the Board to continue to determine the direction of Popular. The Board could in the future decide to separate the

Chairman and CEO positions if it determines that doing so would serve the best interests of Popular.

Popular’s Corporate Governance Guidelines require the designation of a Lead Director when the Chairman of the Board is not an independent director. The Lead Director is an independent director elected annually by a majority of the independent members of the Board. On February 24, 2017, Mr. Teuber was reappointed as the Lead Director. The Corporate Governance Guidelines provide that the Lead Director will have the responsibilities listed below.

Lead Director Responsibilities

Popular encourages directors to participate in continuing director education programs. To assist the Board in remaining current with its duties, committee responsibilities and the many important developments impacting our business, Popular participates in the NYSE-Governance Services Board

Leadership Program. This program offers our directors access to a wide range of in-person, peer-based and webinar educational programs on corporate governance, committee duties, board leadership and industry developments.

The Board met 12 times during 2016. Each director attended 75% or more meetings of the Board and the meetings of committees of the Board on which each such director served. While Popular has not adopted a formal policy with respect to directors’ attendance at the meetings of shareholders, Popular encourages directors to attend all meetings. All of Popular’s directors, except Mr. Unanue, attended the 2016 annual meeting of shareholders and all directors are

expected to attend the 2017 annual meeting. The Corporate Governance Guidelines require the independent directors to meet in executive session once every in-person regularly scheduled Board meeting. During 2016, the independent directors held executive sessions without Popular’s management after each regularly scheduled in-person Board meeting.

Our Board conducts an annual self-assessment aimed at improving its performance. As part of such assessment, each director completes a written questionnaire that is designed to gather suggestions for improving Board effectiveness and solicit feedback on a wide range of issues, including:

Each of the four standing Board committees also conducts its own written annual self-assessment, which generally includes issues such as:

Responses to the Board and committee self-assessments, including written comments, are tabulated to show trends since prior years. Responses are not attributed to individual directors in order to promote openness and transparency. The Board self-assessment report is discussed by the Corporate Governance and Nominating Committee and then the Chair of the Corporate Governance and Nominating Committee leads the discussion with the full Board. The committee self-assessment reports are discussed at each committee, followed by a discussion with the full Board led by the Committee Chair. The Corporate Governance and Nominating Committee annually discusses the format and process to be used to carry out the Board and committee self-assessment.

The Corporate Governance and Nominating Committee Charter provides that, in nominating candidates, the Committee will take into consideration such factors as it deems appropriate, which may include judgment, skill, diversity, experience with business and other organizations, the interplay of the candidate’s experience with the experience of the existing Board members, and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board. In practice, the Board has determined that for a community-based financial institution such as

Popular it is more important to look for candidates with broad management experience than for persons with a specific skill set. Collectively, the members of our Board embody a range of viewpoints, backgrounds and expertise.

Under Popular’s Corporate Governance Guidelines, the Board should, based on the recommendations of the Corporate Governance and Nominating Committee, select new nominees for the position of independent director by considering the criteria outlined below:

Criteria for Nomination

The Corporate Governance and Nominating Committee does not have a specific diversity policy with respect to the director nomination process. Rather, the Committee considers diversity in the broader sense of how a candidate’s viewpoints, experience, skills, background and other demographics could assist the Board in light of the Board’s composition at the time. The Board believes

that each director contributes to the overall diversity by providing a variety of personal and professional experiences and backgrounds. The Board believes that, as shown below, the current directors and nominees reflect an appropriate diversity of gender, age, race, geographical background and experience and are committed to considering diversity issues in evaluating the composition of the Board.

The Corporate Governance and Nominating Committee will consider nominees recommended by shareholders. Generally, nominees are recommended by the Chairman of the Board and CEO or by existing directors. There are no differences in the manner in which the Corporate Governance and Nominating Committee evaluates nominees for director in the event the nominee is recommended by a shareholder. There were no nominees for director recommended by shareholders for consideration by the Corporate Governance and Nominating Committee for election at the 2017 meeting. Shareholders who wish to submit nominees for director for consideration by the Corporate Governance and Nominating Committee for election at Popular’s 2018 annual meeting of shareholders may do so by submitting in writing advance notice of such nominations not more than

180 days nor less than 90 days in advance of the anniversary date of the preceding year’s annual meeting. In the case of a special meeting or in the event that the date of the annual meeting is more than 30 days before or after such anniversary date, notice by the shareholder must be delivered not earlier than the 15th day following the day on which notice is mailed, or a public announcement is first made by Popular of the date of such meeting. Under Popular’s Restated By-Laws, a shareholder’s nomination must be accompanied by certain information, including the nominee’s name and a brief description of the nominee’s judgment, skills, diversity and experience with businesses and other organizations. Such information must be addressed to the CLO and Secretary (751) at Popular, Inc., 209 Muñoz Rivera Avenue, San Juan, Puerto Rico 00918.

Popular’s Board recognizes that one of its most important duties is to ensure senior leadership continuity by overseeing the development of executive talent and planning for the efficient succession of the CEO and other executive officers. The Board has delegated primary responsibility for succession planning to the Compensation Committee. The Compensation Committee reviews annually a management succession plan, developed by the CEO, and reports annually to the Board on the management succession plan. The principal components of this plan are: (1) a proposed plan for

emergency CEO succession, (2) a proposed plan for CEO succession in the ordinary course of business, and (3) the CEO’s plan for management succession for the other policy-making officers of Popular. The succession plan includes an assessment of the experience, performance, skills and planned career paths for possible candidates within the senior management team. Development initiatives supporting the succession plan include job enhancements and rotations, the Popular Leadership Academy, specialized external trainings and competency assessments.

The Board has adopted a Code of Ethics to be followed by Popular’s employees, officers (including the CEO, CFO and Corporate Comptroller) and directors to achieve conduct that reflects our ethical principles. Directors, NEOs, executive officers and employees are required to read and comply with the Code. Popular requires that all new employees take Code training shortly after their start date and also provides periodic Code training to all employees. All employees must certify annually that they have read the Code and complete a declaration on possible

conflicts of interest. In addition, other persons performing services for Popular by contract or other agreement may be subject to the Code of Ethics for Service Providers.

The Code provides that any waivers for NEOs, executive officers or directors may be made only by the independent members of the Board and must be promptly disclosed to the shareholders. During 2016, Popular did not receive nor grant any request from directors, NEOs or executive officers for waivers under the provisions of the Code. The Code was last

revised on September 22, 2016 and is available on the Corporate Governance section of Popular’s website at www.popular.com/en/investor-relations/. Popular will post on its website any amendments to the Code and any waivers to the CEO, the CFO, the Corporate Comptroller or directors.

Popular expects employees to report behavior that

concerns them or that may represent a violation of the Code. Popular offers several channels by which employees may raise an issue or concern, including any actual or potential violations of the Code. One such method is EthicsPoint, a website and telephone hotline that is available 24/7. EthicsPoint reports can be submitted anonymously.

Any shareholder who desires to contact the Board or any of its members may do so by writing to:

Popular’s CLO and Secretary reviews all correspondence addressed to the Board or any of its members and provides the Board with copies of all communications that deal with the functions of the Board or its committees, or that otherwise require Board attention. Communications received by the Audit Committee that are not related to accounting or auditing matters may, in its discretion, be forwarded by the Audit Committee or any of its members to other committees of the Board or Popular’s management for review.

Shareholder requests to have a proposal included in Popular’s proxy statement should be directed to the attention of Popular’s CLO and Secretary. The deadline for submission of a proposal for inclusion in Popular’s proxy statement for the 2018 annual meeting of shareholders is November 9, 2017. Under Popular’s Restated By-Laws, if a shareholder wishes to submit a matter for consideration at the 2018 annual meeting of shareholders (including any shareholder proposal or director nomination), a shareholder must submit such matter in writing to the CLO and Secretary not more than 180 days nor less than 90 days in advance of the anniversary date of the preceding year’s annual meeting. In the case of a

special meeting or in the event that the date of the 2018 annual meeting of shareholders is more than 30 days before or after such anniversary date, notice by a shareholder must be delivered not earlier than the 15th day following the day on which notice is mailed, or a public announcement is first made by Popular of the date of such meeting, whichever occurs first. Such proposal, however, would not be included in the proxy statement for such meeting. Shareholders may obtain a copy of Popular’s Restated By-Laws by writing to the CLO and Secretary. All communications referred to in this section should be sent to Popular’s principal executive offices at 209 Muñoz Rivera Avenue, San Juan, Puerto Rico, 00918.

We may be party to transactions, arrangements or relationships with our directors, director nominees, executive officers or greater than 5% shareholders, or their immediate family members (each, a “Related Person”). We have adopted a written Policy on Related Party Transactions (the “Related Party Policy”) to identify and evaluate potential conflicts of interest, independence factors and disclosure obligations arising out of transactions, arrangements or relationships between Related Persons and us.

Transactions covered by the Related Party Policy may also be subject to restrictions pursuant to Federal Reserve Board Regulation O, Loans to Executive Officers, Directors and Principal Shareholders, which is the subject of a separate policy.

Our Policy on Related Party Transactions

The Related Party Policy governs the review, approval or ratification of transactions, arrangements or relationships: (i) in which Popular or any subsidiary is a participant; (ii) the aggregate amount involved will or may be expected to exceed $120,000 in any given year; and (iii) a Related Person has or will have a direct or indirect material interest. These transactions must be submitted to the Audit Committee for their review, evaluation and approval, unless pre-approved under the Related Party Policy.

Directors and executive officers must notify the CLO of any related party transaction in which they, or their immediate family members, have a material interest. Any unit or division proposing a related party transaction must also notify the CLO by completing a Related Party Transaction Request Form. After review by the CLO, the form is submitted for consideration and approval of the Audit Committee. The form must contain, among other things, a description of the proposed transaction, its benefits to Popular and an assessment of whether the proposed related party transaction is on terms that are comparable to the terms available to an unrelated third party or to employees generally. Only disinterested members of the Audit Committee will participate in the review and determination of whether a related party transaction is approved. The Audit Committee will approve or

ratify transactions with Related Persons when the transaction is deemed to be in, or is not inconsistent with, the best interest of Popular.

Pre-Approved Categories of Related Party Transactions

In accordance with the terms of the Related Party Policy, certain types of transactions are pre-approved and certain recurring transactions are approved annually, without the need to submit the corresponding form to the Audit Committee. Pre-approved transactions include certain banking-related services and transactions in the ordinary course of business involving financial products and services provided by, or to, Popular, including loans, provided such transactions are in compliance with the Sarbanes-Oxley Act of 2002, Federal Reserve Board Regulation O and other applicable laws and regulations. In the event Popular becomes aware of a transaction with a Related Person that has not been approved under the terms of the Related Party Policy, the Audit Committee considers all relevant facts and circumstances regarding the transaction with the Related Person and evaluates all options available to Popular, including ratification, revision or termination. The Audit Committee also examines the facts and circumstances pertaining to the failure of reporting such related party transaction to the Committee, as required by the Related Party Policy, and may take such actions as it deems appropriate.

Related Party Transactions

In 2016, Popular and its subsidiaries contributed approximately $663,000 to Fundación Banco Popular, Inc. (the “BPPR Foundation”) through the matching of employee contributions. Popular also contributed $100,000 from the proceeds of BPPR’s Holiday Special to the BPPR Foundation. In addition, BPPR contributed approximately $485,000 in restricted funds to be contributed by the BPPR Foundation to EnterPrize Events, Inc., a non-profit organization that will create a seed fund to invest in technology start-ups. The BPPR Foundation is a Puerto Rico not-for-profit corporation created to improve the quality of life in Puerto Rico. As BPPR’s philanthropic

arm, it provides a scholarship fund for employees’ children and supports education and community development projects. Popular provides human and operational resources to support the activities of the BPPR Foundation, which during 2016 amounted to approximately $1,162,000, including maintenance and the amortization of leasehold improvements for the BPPR Foundation’s headquarters. BPPR and the Puerto Rico employees of Popular, through voluntary personal donations, are the main source of funds of the BPPR Foundation. The Board of Directors of BPPR appoints six of the ten members of the Board of Trustees. The remaining four trustees are appointed by the Board of Trustees of the BPPR Foundation. Mr. Carrión is the Chairman, and Messrs. Alvarez and Negrón are members, of the BPPR Foundation’s Board of Trustees.

The Popular Community Bank Foundation, Inc. (the “PCB Foundation”), a New York not for-profit corporation, was created to strengthen the social and economic well-being of the communities served by Popular Community Bank. The PCB Foundation is Popular Community Bank’s philanthropic arm and provides support to charitable organizations for community development and education. During 2016, Popular Community Bank made a contribution to the PCB Foundation of approximately $95,000 in connection with the matching of employee contributions. It also made additional contributions of approximately $171,000. Popular Community Bank and its employees, through voluntary personal donations, are the main source of funds of the PCB Foundation. Messrs. Carrión, Alvarez, Vázquez, Chinea and Negrón are members of the Board of Directors of the PCB Foundation.

Certain directors and NEOs have immediate family members who are employed by subsidiaries of Popular. The compensation of these family members is established in accordance with the corresponding subsidiary’s employment and compensation practices applicable to employees with similar qualifications and responsibilities or holding similar positions. A son of Mr. Carrión is employed as a Vice President and Manager of the Business Development and International Banking Division of BPPR. He received compensation in the amount of approximately $142,000 for fiscal year 2016 and other benefits and payments that did not exceed $20,000. His

compensation was approved and ratified by the Audit Committee under the Related Party Policy.

BPPR has loan transactions with Popular’s directors and officers, and other Related Persons, and proposes to continue such transactions in the ordinary course of its business, on substantially the same terms, including interest rates and collateral, as those prevailing for comparable loan transactions with third parties. Except as discussed below, the extensions of credit have not involved and do not currently involve more than normal risks of collection or present other unfavorable features.

In June 2006, a brother-in-law of Mr. Unanue, a director of Popular, obtained a $828,000 mortgage loan from Popular Mortgage, then a subsidiary of BPPR, secured by a residential property. The loan was a fully amortizing 30-year loan with a fixed annual rate of 7%. Mr. Unanue was not a director of Popular at the time the loan was made. The loan was made in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing for comparable loan transactions with third parties at that time. The borrower became delinquent on his payments commencing in July 2010 and, after exhausting various collection and loss mitigation efforts, BPPR commenced foreclosure procedures in November 2010. As of December 31, 2011, Popular had recorded a loss of approximately $65,000 on the loan. In March 2012, the loan was restructured under the terms of BPPR’s loan modification program. The restructured loan is a 40-year loan with a fixed annual rate of 2.5% during the first 5 years, increasing 1% each year thereafter up to a rate of 6.75%. While the principal amount of the restructured loan subject to interest payment is $750,321, the borrower also agreed to repay an additional amount of $158,100 upon cancellation of the restructured loan. The total payments to be made by the borrower represent the entirety of the amount owed prior to restructuring the loan, including accrued interest. The borrower is current on his payment obligations under the restructured loan. Payments of principal and interest of $12,071 and $17,622, respectively, were made during 2016. As of December 31, 2016, the outstanding balance of the loan was $856,397. The largest outstanding balance of the loan during 2016 was $867,474.

In March 2012, BPPR also entered into an agreement with Mr. Unanue’s same brother-in-law to pay $97,000 of the approximately $139,000 in credit card and personal loan debt (including accrued interest) owed by him. These loans were made in the ordinary course of business prior to the date that Mr. Unanue joined the Board. The borrower has agreed to make monthly payments of $538.00 until the amount is paid in full. During 2016, the borrower paid $6,456 and the outstanding debt balance as of December 31, 2016 was $68,486.

In October 2012, a sister of Mr. Guerrero, an Executive Vice President of BPPR, obtained a $179,200 mortgage loan from Popular Mortgage, secured by a residential property. The loan was a fully amortizing 30-year loan with a fixed annual rate of 3.375 %. The loan was made in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing for comparable loan transactions with third parties at that time. The borrower became delinquent on her payments commencing in May 2016, and after exhausting various collection and loss mitigation efforts, BPPR and borrower entered into a deed in lieu of foreclosure on October 2016. As a result of the transaction, BPPR acquired the residential property that secured the loan and recorded a loss of $20,212. Payments of principal and interest of $1,608 and $2,353 respectively, were made during 2016. As of October 2016, the outstanding balance of the loan was $166,369 and the largest outstanding balance of the loan during 2016 was $167,977.

Commencing in May 2013, a brother-in-law of Mr. Negrón became delinquent on four commercial loans, three of which were originated by BPPR and one which was originated by Westernbank and acquired by BPPR as part of a Federal Deposit Insurance Corporation (“FDIC”) assisted transaction in 2010. The BPPR loans were made in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing for comparable loan transactions with third parties at that time. The loans had maturity dates ranging from April 2013 to August 2023 and interest rates ranging from 6.50% to 9.30%. During 2016, no payments of principal and interest were made on the loans. Two of the loans were secured by real estate and BPPR commenced collection and foreclosure proceedings in February 2014. The foreclosure proceedings were completed in June 2016 and the property was transferred to BPPR, which was the successful bidder, for a value of $367,500. At the time of foreclosure, the aggregate amount of principal and interest owed on such loans was $672,604 and $128,707, respectively, and BPPR had charged-off an aggregate amount of $478,804. The largest outstanding balance of the loans during 2016 was $801,311.

During 2016, the same brother-in-law of Mr. Negrón also had a participation in two entities, each of which has a real estate development loan with BPPR. The loans were made in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing for comparable loan transactions with third parties at that time. The first loan, in the amount of $1,650,000, is to an entity in which he owns a 50% equity interest and was originated by Westernbank in 2003. BPPR acquired this loan as part of the FDIC assisted transaction in 2010. Mr. Negrón’s brother-in-law personally guarantees the loan. It is payable from the proceeds of the sale of residential units and bears interest at a rate equal to 4.25%. The outstanding balance on the loan as of December 31, 2016 was $117,370. During 2016, $5,533 and $5,266 were paid in principal and interest, respectively. The second loan, in the amount of $500,000, was to an entity in which Mr. Negrón’s brother-in-law owns a 33% equity interest and which was secured by undeveloped land. Mr. Negrón’s brother-in-law personally guaranteed the loan. The loan was scheduled to mature in December 2018 and it bore interest at a floating rate equal to the prime rate. In June 2016, the loan had a principal balance of $395,000 and BPPR entered into a discounted payoff transaction for the amount of $310,000 in exchange for the release of the collateral and the personal guarantees on the loan. During 2016, $10,000 and $6,624 were paid in principal and interest, respectively. The largest outstanding balance of the loan during 2016 was $405,000. The discounted payoff was approved by the Audit Committee pursuant to the Related Party Policy.

In September 2008, a brother of Mr. Negrón obtained a $390,000 commercial loan from BPPR, secured by a commercial property. The loan was a fully amortizing 15-year loan with a variable interest rate of prime plus .50%. The loan was made in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing for comparable loan transactions with third parties at that time. In January 2015, BPPR approved the first of three 6-month temporary reductions to the borrower’s monthly principal payments in the aggregate amount of $13,500. In August 2016, the term of the temporary loan modifications expired and the borrower started to pay the loan under its original terms. The outstanding balance on the loan as of December 31, 2016 was $221,250, and $23,700 and $9,547 were paid during 2016 in principal and interest, respectively. The largest outstanding balance of the loan during 2016 was $244,950. This transaction was ratified by the Audit Committee pursuant to the Related Party Policy.

Motivate and Reward High Performance

Ensuring and sustaining a proper pay-performance relationship is one of our key objectives. For Popular, performance means a combination of financial results, strategic accomplishments and a demonstration of leadership competencies, all designed to support our company’s business strategy and drive long-term shareholder value.

Base salary, as well as short- and long-term incentive compensation opportunities, are generally targeted at

market median. Our short-term incentive and performance share awards provide the opportunity to earn increased pay (up to 1.5 times target) for superior performance and similar downside should we not achieve our performance goals. Furthermore, our incentive design seeks to dissuade our executives from taking excessive or unnecessary risks.

As depicted in the following charts, our NEOs’ 2016 target incentive program had a strong focus on performance and shareholder alignment.

Align Executives with Shareholder Interests and Build Long-Term Shareholder Value

At Popular’s annual shareholders meeting in April 2016, the vast majority of voting shareholders (97.72%) approved our overall executive compensation policies and practices. We believe that this illustrates our shareholders’ support of our compensation philosophy and performance-based pay program. The perspectives of shareholders and industry best practices were taken into consideration by management and the Committee as they developed strategic objectives, business plans and compensation elements supporting the 2016 compensation decisions. The Committee plans to continue to consider our shareholders’ perspectives on an annual basis.

A significant component of our compensation program is equity-based pay designed to promote long-term value by rewarding sustained earnings growth, long-term return on shareholders’ investment and the retention of key high-performing talent.

Performance shares promote value creation by rewarding executives for future increases in earnings (EPS) and stock appreciation (TSR) depending on the degree of achievement of pre-established EPS and TSR targets.

Restricted stock is awarded upon consideration of corporate and individual performance. It promotes executive stock ownership and retention as the shares vest over time, further aligning our executives’ interests with those of our shareholders.

In addition, our NEOs are subject to stock ownership guidelines to reinforce their orientation toward long-term shareholder value. The CEO and other NEOs must reach (within five years of appointment) and subsequently retain shares equivalent to six times and three times their base salary, respectively. Any shares pledged to secure grandfathered loans and any unvested performance shares are not considered to satisfy the requirement. As of February 2017, all NEOs had either met the requirement or were on track to comply within the designated timeframe.

Popular’s executive compensation program seeks to attract, motivate and retain the talent needed to successfully deliver future earnings stability and growth. Our mix of salary and performance-based short- and long-term incentives provides a competitive offering to attract the best executive talent and promote its long-term career retention. In consultation with management and its independent compensation consultant, the Committee balances

competitiveness and retention features while considering individual performance, experience and qualifications, as well as market practices and Popular’s financial performance. The following key components of our compensation program, combined with strong succession and development initiatives, drive our ability to secure top executive-level talent over the long term.

The leadership component of Popular’s executive incentive program encompasses the NEOs’ demonstration of our leadership competencies in areas such as strategic thinking, customer focus, talent management and building effective teams. The Committee determined that the NEOs exhibited strong leadership in 2016 to address the challenging

and uncertain short- and long-term social and macroeconomic conditions in our main market of Puerto Rico. They led multiple complex strategic initiatives that yielded the strengthening of our franchise and market position (increasing our Puerto Rico market share in 7 out of 9 categories on a third-quarter year-over-year basis), continued

improvements in credit quality, limited exposure to the Puerto Rico public sector and the approval of key elements of our capital return strategy for shareholders. Based on the above, the Committee

granted the following leadership awards to our NEOs: 30% for Mr. Carrión, 25% for Mr. Alvarez and 20% for Messrs. Vázquez, Ferrer and Soriano.

Popular’s equity incentive aligns our executives’ compensation with sustained long-term performance and the interests of our shareholders. Each NEO has a target long-term equity award opportunity that reflects market practice for similar roles. The actual long-term incentive awards will range from zero to 1.5 times the target award.

In January 2016, the Committee approved NEO equity grants consisting of two components (each accounting for one-half of the target award value):

Performance shares

Performance shares reward our future performance and vest only if pre-defined performance goals are achieved. Awards are granted based on target award level and vest on the third anniversary of grant according to actual performance during the 2016-2018 period. Two measures, weighted equally, are used to determine vesting:

Each performance measure has a pre-defined threshold (minimum result for which an incentive would be payable), target and maximum (stretch goal) level of performance that determines vesting at the end of the 3-year period. Performance below

threshold results in forfeiture of the shares allocated to the corresponding performance measure. Dividend equivalents are accrued and paid at the end of the performance period based on the actual number of shares earned.

Restricted stock

Restricted stock supports executive ownership and retention. The value of awards granted may vary from zero to 1.5 times the executive’s target award based upon consideration of the prior year’s corporate and individual performance assessed by the Committee on a holistic basis. Once granted, shares vest on a pro-rata basis, with 20% vesting annually over the first 4 years and the remaining 20% vesting at retirement.

Our vest-at-retirement provision supports our desire to balance rewards with appropriate risk mitigation, as well as position the grants as a retirement benefit.

Awards granted in 2016 considered performance in 2015, during which we strengthened our operational and financial results, recording an adjusted net income from continuing operations of $374.8 million (a reconciliation of the non-GAAP financial measures is provided in Appendix A to this Proxy Statement). The year ended with stable credit quality and solid capital levels (Common Equity Tier 1 ratio of 16.2%). These events placed our organization in a much stronger position moving into 2016 and beyond.

Performance Vesting of 2014 Transition Award (Vested in September 2016)

In September 2014, the Committee approved a one-time performance-contingent transition award to motivate and retain its executive officers as they implemented Popular’s strategy during continued challenging economic conditions subsequent to its repayment of financial assistance under the United States Treasury Department’s Capital Purchase Program. The award consisted of a combination of equity and cash with payments over a two-year period, subject to time- and performance-based vesting conditions:

The transition award concluded with the 2016 vesting as it is not a part of our ongoing executive compensation program.

Benefits and Perquisites

Perquisites and special executive benefits do not represent a significant portion of our executive compensation program. During 2016, perquisites such as non-work related security, the use of company-owned automobiles and personal tickets to events sponsored by Popular were offered on a limited basis to NEOs. We do not provide club memberships for NEOs or other executives. Popular owns an apartment in New York City, which is used by the CEO primarily for business purposes during his frequent visits to New York in support of Popular’s operations and other company-related affairs.

Role of the Compensation Committee

In accordance with its charter, a copy of which is available at www.popular.com, the Committee establishes Popular’s general compensation philosophy and oversees the compensation program for executive officers, including our NEOs. It also reviews and approves the overall purpose and goals of our incentive compensation system and benefit

plans. In addition, it reviews plans for executive officers’ development and succession. The Committee met six times during 2016. Throughout the year, the Committee maintained regular communication with its external advisors, non-member directors and management to discuss topics such as emerging legislative and regulatory trends and best practices.

The Committee assesses the effectiveness of its compensation program by reviewing its strategic objectives and business plans, considering each NEO’s scope of responsibility, reviewing market reference data, and assessing the relationship between pay and performance (Popular relative to peers and executives relative to their performance goals). The Committee also evaluates whether our compensation programs meet Popular’s goals by monitoring engagement and retention of executives, and by assessing the relationship between company and individual performance and actual payouts. Furthermore, in conjunction with the annual review of the compensation plans with the CRO, the Committee monitors and evaluates whether the design of incentive plans fosters an environment of prudent risk-taking and sound business decisions.

The Committee may modify payments or adjust the compensation program in light of economic or business results, regulatory requirements, risk assessments or results of the annual shareholders advisory vote on executive compensation. It may also recoup previously awarded incentives due to a financial restatement, a materially inaccurate performance metric or misconduct.

The Committee’s main activities in 2016 included:

Executive Compensation

Governance

Benefits

Other