Marcato Capital

MARCH 2015
THE BANK OF NEW YORK MELLON
Q1 2010 Investor Presentation
Disclaimer
Marcato Capital Management LP (Marcato) is an SEC-registered investment adviser based in San Francisco, California. Marcato provides investment
advisory services to its proprietary private investment funds and to certain funds and accounts pursuing a single investment idea (each a Marcato Fund
collectively, the Marcato Funds).
This presentation with respect to The Bank of New York Mellon (the Presentation) is for informational purposes only and it does not have regard to the
specific investment objective, financial situation, suitability or particular need of any specific person who may receive the Presentation, and should not be
taken as advice on the merits of any investment decision. The views expressed in the Presentation represent the opinions of Marcato, and are based on
publicly available information and Marcato analyses. Certain financial information and data used in the Presentation have been derived or obtained from
filings made with the Securities and Exchange Commission (SEC) by the issuer or other companies that Marcato considers comparable. Marcato has not
sought or obtained consent from any third party to use any statements or information indicated in the Presentation as having been obtained or derived
from a third party. Any such statements or information should not be viewed as indicating the support of such third party for the views expressed in the
Presentation. Information contained in the Presentation has not been independently verified by Marcato, and Marcato disclaims any and all liability as to
the completeness or accuracy of the information and for any omissions of material facts. Marcato undertakes no obligation to correct, update or revise the
Presentation or to otherwise provide any additional materials. Neither Marcato nor any of its affiliates makes any representation or warranty, express or
implied, as to the accuracy, fairness or completeness of the information contained herein and the recipient agrees and acknowledges that it will not rely on
any such information.
The Presentation may contain forward-looking statements which reflect Marcatos views with respect to, among other things, future events and financial
performance. Forward-looking statements are subject to various risks and uncertainties and assumptions. If one or more of the risks or uncertainties
materialize, or if Marcatos underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these
statements. Accordingly, forward-looking statements should not be regarded as a representation by Marcato that the future plans, estimates or
expectations contemplated will ever be achieved.
The securities or investment ideas listed are not presented in order to suggest or show profitability of any or all transactions. There should be no assumption
that any specific portfolio securities identified and described in the Presentation were or will be profitable. Under no circumstances is the Presentation to be
used or considered as an offer to sell or a solicitation of an offer to buy any security, nor does the Presentation constitute either an offer to sell or a
solicitation of an offer to buy any interest in the Marcato Funds. Any such offer would only be made at the time a qualified offeree receives the
Confidential Explanatory Memorandum of a Marcato Fund. Any investment in the Marcato Funds is speculative and involves substantial risk, including the
risk of losing all or substantially all of such investment.
Marcato may change its views or its investment positions described in the Presentation at any time as it deems appropriate. Marcato may buy or sell or
otherwise change the form or substance of any of its investments in any manner permitted by law and expressly disclaims any obligation to notify the
market, a recipient of the Presentation or any other party of any such changes.
This document is confidential and intended solely for the addressee and may not be published or distributed without the express written consent of Marcato.
This document is not intended for public use or distribution.
<1>
Table of Contents
I.
Executive Summary
II.
Good Franchise In A Historically Good Business
III. The World Has Changed

IV. Poor Management Through A Changing Environment
V. No New Ideas For A Better Future
VI. Case Study: JPM 2015 Investor Day
VII. Unlocking Potential: Bold Action and New Ideas
A. Common Sense Principles
B.
Business Opportunities
VIII. Unlocking Potential: New Leadership

IX. Valuation
<2>
I. Executive Summary
<3>
Executive Summary
1. BNY Mellon has a good franchise in what has been a good business
2. But the world has changed...
i.
Low rates and volatility pressuring revenues (permanent?)
ii.
Regulatory environment imposing new capital charges and

operating burdens (permanent)
3. Management has done a poor job creating value through this

changing environment and offers no new ideas for facing current
and future challenges
4. BNY Mellon will not reach its potential with small, incremental
adjustments but requires bold action and new ideas
5. New leadership will be necessary to conceive and execute the
strategies necessary to compete in this new world
<4>
Executive Summary
New Leadership Will Have Numerous Opportunities For Improvement:
1. Reconsider Value Proposition to Core Investment Servicing Customers
2. Raise IT Effectiveness to Top Company Priority
3. Reduce Headcount Aggressively
4. Reposition Asset Management
5. Establish Culture of Effectiveness, Urgency, and Accountability
6. Upgrade Regulatory Sophistication and Outreach
7. Refresh the Bank of New York Brand
Successful execution against this plan will produce a more powerful franchise with
higher growth, a more efficient expense base, higher returns on capital, and a
market value that is more than double the current price
<5>
II. Good Franchise In A Historically Good Business
<6>
Leading Market Share in a Concentrated Industry

BK is a leading global custodian and operates in an industry dominated by three major global
custodians (BNY Mellon, State Street, JP Morgan)
Large client base drives high transaction volumes and economies of scale
Global Assets Under Custody
Global Assets Under Administration
BNY Mellon,
19%
State Street,
22%
Other, 30%
Other, 37%
State Street,
14%
JP Morgan,
22%
IFDS, 6%
BNP Paribas,
6%
Citi, 10%
JP Morgan,
14%
~$150 trillion market
HSBC, 9%
BNY Mellon,
11%
~$30 trillion market
Source: Company filings, Marcato estimates, Wall Street and third-party research
Note: Estimated as of March 31, 2014
<7>
Mission Critical, Trust-based Services To Customers Create Barriers to Entry

Economies of Scale
Large providers can leverage economies of scale to deliver custody services at significantly
lower costs than small competitors
Custody involves large fixed costs to build out each processing service for the first customer
of that service
High Switching Costs / Sticky Client Relationships
Preference to centralize back office with a single custody bank provider to maintain
centralized oversight of operations
Customers build their back-office infrastructure around the custodian
Significant time and resources required to establish a custodial service relationship (3 month
on-boarding process)
Low customer attrition with average asset servicing relationships greater than a decade
Legally enforceable multiyear service contracts
Mission critical services at a small price in relation to the assets of its clients (.01% of assets)
<8>
Investment Servicing is a Business Process Outsourcing (BPO) Service
Traditional
Business Process
Outsourcer
Asset Custodian
Specialization In Non-core
Processes
Yes
Yes
Fixed-to-Variable Cost
Conversion
Yes
Yes
Offshore Labor Inputs
Yes
Yes
Technology-Based
Solutions
Yes
Yes
Differentiation Through
Service Quality
Yes
Yes
Multi-year Contracts
Yes
Yes
<9>
Attractive Fee-Based Business Model

BK primarily generates revenue from fees rather than net interest margin
Counter-cyclical elements in fee revenue mitigate the impact of severe market downturns
and provide earnings stability
Revenue Mix(1)
Total Fee Revenue (2008 Financial Crisis)

+4%
$13,000
$12,342
Net interest
revenue
19%
Other
3%
$11,897
Asset
management
fees
26%
-8%
+62%
$10,000
FX volatility
-10%
$7,000
Investment
servicing
fees
52%
+6%
Securities
lending spreads
and volumes
$4,000
2007
Source: Company filings; As of FY14

Note: 2007 adjusted for 6 mos. of Mellon Financial
(1) Adjusted for gains on sale of Wing Hang and One Wall Street building
2008
Securities servicing
Asset and wealth management
FX and other trading activities
Other
< 10 >
Positive Long-term Growth Dynamics

BK should benefit from the long-term global growth of financial assets, growing diversity of
financial instruments, rising regulatory complexity and increasing cross-border activity
Global Financial Assets ($tn)
CAGR %
(10 20)
(90 10)
$1,000
$900
+5%
+4%
+5%
+3%
+8%
+9%
$900
$800
$730
$700
$600
$600
$494
$500
$393
$400
$300
$273
$221
$200
$100
$0
1990
1995
2000
2005
Developing
2010
2015
2020
Advanced
Source: Bain & Company: A World Awash in Money: Capital Trends Through 2020
< 11 >
Conservative Balance Sheet

BKs balance sheet is primarily comprised of low-risk, short-duration assets
Loan accounts are a small and declining mix of total interest-earning assets
Low-yielding cash and interbank investments have accumulated on the balance sheet
Mix of Average Interest-Earning Assets
100%
90%
80%
37%
23%
21%
32%
34%
1%
2%
44%
44%
2009
2010
18%
17%
18%
18%
32%
38%
37%
35%
2%
2%
2%
43%
43%
45%
2012
2013
2014
31%
70%
60%
30%
50%
40%
30%
1%
32%
1%
2%
20%
38%
48%
29%
10%
0%
2007
2008
Cash / interbank investments
2011
Trading account securities
Securities
Loans
Source: Company filings
< 12 >
Conservative Balance Sheet: High-Quality Assets

BKs loan portfolio has consistently experienced less charge-offs through a cycle than a typical commercial bank
BKs investment securities portfolio primarily consists of high-quality AAA / AA- rated securities
Loan Portfolio: Net Charge Off Ratio %
4.0%
3.0%
2.0%
1.0%
2008
2009
2010
2011
BK
BAC
WFC
2012
JPM
2013
2014
Investment Securities Portfolio: Ratings Mix

100%
8%
5%
11%
3%
11%
2%
6%
5%
5%
6%
6%
5%
6%
4%
87%
86%
87%
89%
89%
89%
90%
2008
2009
2010
2012
2013
2014
80%
60%
40%
20%
0%
AAA / AA-
2011
A+ / A-
Other
Source: Company filings, Wall Street research
< 13 >
Conservative Balance Sheet: Liabilities

BKs assets are primarily funded by low-cost custody deposits, a high-quality wholesale funding
source that has proven to be stable and predictable
Custody deposits are attractive funding sources because they originate from very sticky
custody relationships with high switching costs
Deposits
$400
90%
82%
79%
81%
81%
77%
77%
$350
80%
70%
$300
60%
Total Deposits
60%
$250
$222
$234
50%
$192
$200
$160
$150
$100
$132
$88
$92
$34
$141
$66
$73
40%
$58
$35
30%
$36
$22
$50
$70
$92
$98
$104
2008
2009
2010
$125
$134
$152
$161
20%
Interest-Earning Assets % of Deposits
72%
10%
2007
Interest-bearing deposits
2011
Noninterest-bearing deposits
2012
2013
2014
Deposits / Interest-earning assets
< 14 >
Conservative Balance Sheet: Safe Haven

BK has experienced deposit inflow surges during market crises because clients view
BKs balance sheet as a safe haven
September 2001 Attack
Lehman Brothers Bankruptcy
US Debt Ceiling 2011
US Fiscal Cliff 2012
$250
$223
$199
$200
$208
$207
$218
$192
$169
$140 $145
$150
$120
$132
$100
$54
$53
$61
$57
$50
1Q01 2Q01 3Q01 4Q01
3Q08 4Q08 1Q09 2Q09
2Q11 3Q11 4Q11 1Q12
3Q12 4Q12 1Q13
< 15 >
High Capital Ratios

BKs Tier 1 capital ratio has approached multi-year highs
Tier 1 Capital Ratio
18.5%
16.5%
14.5%
12.5%
Consolidation of
certain investment
management
funds(1)
10.5%
8.5%
6.5%
4.5%
2.5%
0.5%
1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14
(1) Reflects methodology revision implemented in June 30, 2014 that consolidates assets of certain investment management funds in risk-weighted assets. Basel III capital ratios are
shown from 1Q14 onwards
< 16 >
Attractive Balance Sheet: Stress Test Performance

BKs business model performs well in government stress tests
Source: Federal Reserve March 2015 DFAST Stress Test
< 17 >
III. The World Has Changed
< 18 >
Net Interest Margin Pressure

BKs earnings are cyclically pressured by decade-low net interest margins due to a prolonged period of low
global interest rates and a growing mix of excess deposits on the balance sheet
Low global interest rates depress net interest revenue, depress trading volatility, increase money market fee
waivers, and depress securities lending spreads
Net Interest Margin (FTE) %
2.50%
2.30%
2.10%
1.90%
1.70%
1.50%
1.30%
1.10%
0.90%
0.70%
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
0.50%
< 19 >
Net Interest Revenue Upside

BK can create $11 - $21 per share of incremental value by 2017 from incremental net interest
revenue depending on the pace of short-term interest rate normalization
Net Interest Revenue Sensitivity
$6,000
$4,884
Net Interest Revenue
$5,000
$3,950
$4,000
$3,000
$2,904
$2,000
$1,000
NIM %
Average Fed Funds Rate %
Incremental EPS @ 27% tax rate
(x) P/E
Incremental Value Per Share
LQA
2017E
(1)
FFER +25bps/qtr (2Q15 - 2017)
91 bps
9 bps
138 bps
213 bps
$0.74
15.0x
$11.07
2017E
(2)
"Fed Dots" Average
170 bps
302 bps
$1.40
15.0x
$20.95
Note: Assumes $55bn of excess deposits (midpoint of $40 - $70bn Company guidance) and 3.5% CAGR on normalized interest-earning assets
(1)
Assumes midpoint of 2014 Investor Day NIM guidance(125bps 150bps)
(2)
September 17, 2014 FOMC projection materials. Assumes ~1.7% NIM rate at 3% FFER
< 20 >
BNY Mellon Has Greater Rates Leverage than State Street
Net Interest Revenue Sensitivity
Impact on current net interest revenue over the next 12 months based on a quarterly 25 bps
increase in global interest rates over the next four quarters (Company internal estimates)
+ 100bps rate "ramp"

LTM Net Interest Revenue (FTE)
% Upside
$149
$2,433
6.1%
$326
$2,942
11.1%
< 21 >
Securities Lending and FX Volatility

Higher interest rates may also potentially drive improvements in securities lending and FX trading revenues
Indexed Ted Spread (3 Mo. LIBOR T. Bills)
FX Volatility
25
350
TED Spread
250
200
150
Averages:
2001 Present: 42
2001 2007: 36
2009 Present: 30
100
~25
50
0
JPM G7 Volatility Index
300
20
15
10
The Fed Funds Rate has a big impact on the TED

spread, which has a big impact on our securities
lending activity...when rates eventually go up and
you get back to the more normalized TED spread,
this will be a much more attractive business
financially
FX volatility now at all-time lows over the past 20

years
As interest rates rise and rate differentials increase,
customers increase their use of carry trade strategies
higher FX volumes
- Bob Kelly, CEO, 3/2/10 CLSA Analyst Day

Source: Bloomberg, Company transcripts
< 22 >
Money Market Fee Waivers

Higher interest rates will also recover significant money market fee waivers
Pre-tax Money Market Fee Waivers
Fee Waiver Recovery
Source: 4/8/14 Analyst Day, 9/4/14 Barclays Global Financial Services Conference
< 23 >
A Changing Regulatory Landscape

Key Regulations
Past
Present
Future
Basel Capital Ratios

Stress Testing (CCAR/ DFAST)
Dodd-Frank
Supplementary Leverage Ratio (SLR)
Liquidity Coverage Ratio (LCR)
European Market Infrastructure Regulation (EMIR)
Volcker Rule
Recovery and Resolution Plans
Foreign Account Tax Compliance Act (FATCA)
Markets in Financial Instruments Directive (MiFID)
Target2 Securities (T2S)
Alternative Investment Fund Managers Directive (AIFMD)
Tri-party Repo Reforms
Money Market Fund Reforms
Data Management Standards
Net Stable Funding Ratio (NSFR)
Total Loss Absorbing Capital (TLAC)
G-SIB Surcharges
Source: Company filings, Industry news, Wall Street research
< 24 >
Key Business Model Implications

New Regulations
Key Implications
Supplementary Leverage
Ratio (SLR)
Higher capital retention, low risk assets need to generate

higher returns, trading book contraction, deposit reduction
and management, higher compliance costs,
Liquidity Coverage Ratio

(LCR)
Lower NIM yields, reallocation of balance sheet towards

HQLA, reduced appetite for non-operational deposits, liability
optimization, higher compliance costs
Stress-Testing (CCAR / DFAST)
Regulatory scrutiny of capital return policies, higher capital

ratios, tighter risk management practices, higher compliance
costs
Basel III
Higher capital ratios, more onerous capital definitions and riskweightings, less leverage, capital penalties for size, complexity
and interconnectedness
Tri-party Repo Reform
Lower intraday credit risk, higher compliance costs
Resolution Plans
Higher compliance costs
More Capital &

Reduced Leverage
Higher Compliance
Expenses
Lower Market, Credit

& Operational Risk
Reduced Size &

Complexity
Source: Company filings, Industry news, Wall Street research
< 25 >
Rising Capital and Liquidity Requirements By 2019

CET1
SLR
15.0%
LCR
8.0%
150%
125%
12.0%
6.0%
6.0%
9.8%
9.0%
8.5%
6.0%
0.5%
US G-SIB(1)
1.0%
B3 G-SIB
Surcharge(2)
2.5%
Capital
Cons.
Buffer
109%
1.0%
Well-Capitalized
Buffer
2.0%
Enhanced SLR
Buffer
100%
100%
4.4%
4.0%
75%
50%
2.0%
3.0%
4.5%
BK @ 4Q14
3.0%
B3
Minimum
Projected
Regulatory
SLR
Minimum
25%
BK @ 4Q14
Projected
Regulatory
BK
(3)
Projected
Regulatory
Source: Wall Street research, Company filings

(1)
Potential US G-SIB surcharge of up to 2%. Estimated 0.5% US surcharge for BK per Citigroup 12/8/14
(2)
B3 potential G-SIB surcharge of 1% - 3.5%. Estimated 1% surcharge for BK per Financial Stability Board
(3)
Per 10/28/14 Investor Day
< 26 >
Key Business Model Implications

Whether or not the rate / volatility environment ever returns to historical levels, the
new regulatory world requires BNY Mellon to reconsider many aspects of the
Company:
Business Lines
Geographical Mix
Client Selection &

Economics
Asset Mix
Labor Mix
Deposit & Liability

Structure
< 27 >
IV. Poor Management Through A Changing

Environment
< 28 >
2007 Mellon Merger Has Failed to Deliver on Promises
< 29 >
2007 Mellon Merger Has Failed to Deliver on Promise

In its 12/4/2006 presentation on the merger with Mellon Financial (Mellon M&A Presentation), BK
outlined a path towards $3.38 in cash EPS by 2009
BK only achieved $2.56 of cash EPS in 2014 (24% below 2009 targets, 5 years later)
12/4/06 Mellon M&A Presentation EPS Targets
Source: Mellon M&A presentation 12/4/2006
< 30 >
Dubious Claimed Merger Synergies

BK claims it achieved $850mm of expense synergies and $325 - $425mm of revenue synergies from the Mellon merger
(claiming that it even exceeded its initial goals)
Despite claimed synergies, revenue growth has been tepid and actual expenses have significantly outgrown revenues
Claimed synergies are dubious, as gross expenses would have massively outgrown revenues without synergy benefits
2007 Mellon Merger Targets
FY2007 FY2014 Total Growth %
Core
(1)
Revenues
Actual
Results
Without
Alleged
Synergies(3)
4%
6%
Core
(2)
Expenses
10%
4%
Core
(1)
Revenues
2%
8%
12%
16%
20%
24%
15%
Core
(2)
Expenses
17%
4%
8%
12%
16%
20%
24%
Mellon merger synergies are unobservable based on post-merger results

Source: M&A presentation 12/4/2006, Company presentation 11/11/08, 10K 2014
(1) Core revenue adjusts for non-operating items such as securities gains (losses), FTE adjustments, discount accretion, earnings attributable to non-controlling interests of
consolidated investment management funds and one-time gains / losses on asset sales (per BNY Mellon 10/28/14 Investor Day methodology)
(2) Core expenses adjusted for intangible amortization, M&I, litigation and restructuring charges, support agreement charges, and charges related to investment management
funds
(3) Assumes $850mm of cost synergies and $375mm of revenue synergies
< 31 >
Noninterest Expense Has Grown Unsustainably

Margins have deteriorated as noninterest expense has grown rapidly against
stagnant fee revenue
Noninterest Expense % of Fee Revenue(1)
95%
93%
92%
91%
90%
89%
88%
87%
85%
80%
77%
75%
70%
2008A
2009A
2010A
2011A
2012A
2013A
2014A

(1)
Noninterest expense excludes amortization of intangible assets, merger & integration charges, litigation and restructuring charges, support agreement charges, charges
related to investment management funds
(2)
Fee revenue excludes non-recurring asset-related gains
< 32 >
Unabated Headcount Growth

Headcount has grown disproportionately versus revenues since the Mellon
merger (22% total growth in headcount vs. 4% total growth in Core Revenue)
Total Headcount
Core Revenue(2) ($bn)

$16.0
55,000
50,300
50,000
$15.0
45,000
$14.0
$14.6
$14.0
41,200
40,000
$13.0
35,000
$12.0
30,000
$11.0
25,000
$10.0
2007
2014
2007
(1)
2014
Source: Company filings, Marcato estimates

(1) 2007 includes annualized impact of Mellon Financial
consolidated investment management funds and one-time gains / losses on asset sales (per BNY Mellon 10/28/14 Investor Day methodology)
< 33 >
Technology Fragmentation Is A Key Source of Excess Costs
Two Custody
Platforms
Five Accounting
Platforms
Major Redundancies
- Back office headcount
- Systems maintenance
- Application development
- Reporting costs
One of the things that is really setting us apart [from our competitors] post-transformation is the
fact that we do have one global platform...When we spend dollars to build the future
functionality, we do it once. And then we leverage it across the world. If you have six accounting
platforms and you were doing a regulatory change six times, thats 1/6 the IT efficiency
- Gunjan Kedia, State Street EVP, 2/25/15
And I think Ive mentioned about the challenges with the merger & acquisitions is we have so
many different fragmented technology in various businesses and various products...I think the
nature of the acquisitions have resulted in lots of fragmentation of technology
- Suresh Kumar, BNY Mellon CTO, 3/13/13
The traditional approach for any of these acquisitions is steeped in the thesis that youll see
more synergies the more simplified your back end, and the more common systems you share,
especially those that benefit from scale. Thats been time-tested in the trust banking business
- Tim Keaney, Former BNY Mellon CEO Investment Services, 2010(1)
Source: Company filings, Company transcript, HBS Case Study
(1) Harvard Business School Case Study: Merger of Equals: The Integration of Mellon Financial and The Bank of New York
< 34 >
Costly M&A Activity

BKs heavy cost structure reflects the significant M&A activity the Company has
undertaken over the years
2007
Global Securities Services
2008
2009
Portsmouth
Financial Systems
2010
2011
BHF Asset
Servicing
Broker-Dealer
2012
2013
2014
Mellon Financial has not been fully integrated seven years after the acquisition
Source: Company filings, CapitalIQ
Note: Cutwater Asset Management acquisition announced in October 2014 and closed in January 2015
< 35 >
Gerald Hassells 2011 Investor Day Targets Have

Failed to Materialize
< 36 >
Missed EPS Targets: 2011 Investor Day

In BKs 11/14/11 Investor Day, CEO Gerald Hassell provided a roadmap for 7 11% EPS
growth between 2011 and 2014
BK fell significantly short of even the low-end of its 2014 EPS targets
2011 Investor Day Earnings Roadmap
Cash EPS Bridge to 2011 Investor Day Target

$3.50
$3.31
$2.96
$3.00
$2.52
$2.50
$2.42
$2.49
$2.00
'14A
$2.56
'14A
$2.56
2014 (@7%)
2014 (@11%)
$1.50
$1.00
Source: BNY Mellon Investor Day 11/14/11
2011A
2012A
2013A
< 37 >
Missed ROE Targets: 2011 Investor Day

In BKs 11/14/11 Investor Day, BK Management also targeted a 10% ROE by FY14
BK fell significantly short of this 10% ROE target in 2014
ROE has deteriorated significantly since 2011
BK Return on Equity %(1)
10.5%
10.0%
9.5%
ROE
Gap
9.0%
9.0%
8.8%
8.5%
8.3%
8.1%
8.0%
7.5%
7.0%
2011
2012
2013
2014
(1) Reflects Company-reported non-GAAP ROE
< 38 >
BNY Mellon Has Underperformed State Street on Key Targets

While BKs results have significantly deteriorated, State Streets results have significantly
improved
Indexed EPS Growth(1)
Return on Equity(2)
150
12.0%
132
11.0%
125
118
104 105
100 100
103
10.3%
10.5%
10.0%
106
9.8%
10.0%
100
9.0%
8.8%
9.0%
8.3%
75
8.1%
8.0%
7.0%
50
2011
2012
2013
(1)
(2)
2014
BK
2011
STT
2012
2013
2014
Adjusted for amortization of intangibles, acquisition and restructuring costs and other one-time items
Reflects State Street ROE adjusted for extraordinary losses and BK non-GAAP ROE %
< 39 >
Flat EPS Growth Despite Certain Beneficial Market Tailwinds

Using the S&P 500 Index as a proxy for the global equity markets, we estimate that a 100-point change in
the value of the S&P 500 Index, sustained for one year, would impact...
...fully diluted earnings per common share by $0.03 to $0.05 (BK 2011 Annual Report)
Indexed Growth (FY2011 = 100): BK EPS Growth vs. Market Indices Growth
160
152
150
140
134
130
120
118
110
107
106
100
90
2011
2012
S&P 500 Index
FTSE 100 Index
BNY Mellon LTM EPS
2013
2014
MSCI World Index

Barclays Capital Global Aggregate Bond Index

Note: Equity market indices represent daily averages over time series. Bond index represents period-ends over time series
< 40 >
Unobservable Cost Reductions

Margins have deteriorated despite Operational Excellence Initiatives, where
BK laid out savings targets of $650 - $700mm by 2015
BK claims that has significantly exceeded its targets through 2013 but there is no
observable evidence in support of this claim
2011 Operational Excellence Targets
Source: BNY Mellon 10K 2013
< 41 >
Expense Growth Does Not Show Evidence of Initiatives

Claimed cost savings imply gross expenses between 2011 and 2013 would have grown
by $1.2bn (or ~12%) if management did not execute its Operational Excellence
initiatives and achieve M&A synergies
Revenue has barely grown over the same time period
2011 2014 Total Growth %
15%
Total Growth (2011 - 2014)
12%
11%
7%
5%
3%
(1%)
2%
Revenue (1)
Expenses, net
(2)
(3)
Expenses, gross

(1)
Adjusted for sale of Shareowner Services sale in 2011, gain/loss related to equity investments, and net income attributable to noncontrolling interest related to consolidated
investment management funds (per BNY 10/28/14 Investor Day pg. 10)
(2)
Adjusted for sale of Shareowner Services sale in 2011, amortization of intangible assets, M&I, litigation and restructuring charges and charges related to investment
management funds
(3)
Net expenses adjusted for $636 of Operational Excellence savings and claimed GIS acquisition expense synergies (2011 = $72mm, 2014 = $120mm)
< 42 >
Bloated Employee Base

Headcount disproportionate to that of comparable companies
Combinations of similar sized investment managers and investment servicers would imply
meaningfully lower headcount levels
Headcount discrepancy not bridgeable by BKs Corporate Trust or Pershing business units
Total Employees
Investment
Servicers
60,000
Investment Managers
Implied Headcount (Asset Manager + Asset Servicer)
Asset Managers
50,300
50,000
Vanguard
30,000
27,470
Asset
Servicers
Total Employees
40,000
~27,000
JPM
(1)
(TSS)
BLK
Capital
JPM
BEN
Group
GIM (2)
PIMCO
41,200
39,200
36,266
34,000
32,700
29,490
STT
(IS)
41,670
39,670
36,736
34,470
33,170
29,960
6,264
5,870
5,700
3,100
~2,500
2,490
1,435
STT
(Inv. Mgmt.)
PIMCO
FII
$2,480
$1,680
20,000
~14,200
12,200
9,266
10,000
~7,000
BK
AUC/A ($tn)
AUM ($bn)
$29
$1,710
STT
(Inv. Serv.)
JPM
(1)
(TSS)
$28
$21
Vanguard
BLK
BEN
Capital Group
IVZ
TROW
$3,100
$4,652
$898
$1,147
$792
$747
JPM
LM
(Global Inv. Mgmt.)
$1,744
$709
$363

(1)
JPMs Treasury & Securities Services division
(2)
JPMs Global Investment Management division
< 43 >
Employee Inefficiency
BKs ever-deepening gap of core revenues / average employee in comparison to State
Street show significant increasing employee inefficiency
Core Revenue / Average Employee(1)
Core Revenue / Average Employee ($bn)
$0.400
$0.370
$0.340
$0.310
$0.280
$0.250
2009
2010
2011
2012
BK
2013
2014
STT

consolidated investment management funds and one-time gains / losses on asset sales (per BNY Mellon 10/28/14 Investor Day methodology). BNY Mellon adjusted for sale of
Shareowner Services and acquisitions of PNC GIS and BHF Asset Servicing
< 44 >
Relative Headcount Trajectory

While macroeconomic factors and regulatory compliance have pressured
headcount and costs for all G-SIB banks, BK has responded least forcefully to
headcount
Indexed Headcount
110%
104%
105%
103%
Indexed Headcount
100%
96%
95%
94%
93%
90%
85%
80%
78%
75%
1Q11
2Q11
BNY Mellon
3Q11
4Q11
1Q12
State Street
2Q12
3Q12
4Q12
JP Morgan (CIB = TSS + IB)
1Q13
(1)
2Q13
3Q13
Bank of America
4Q13
1Q14
Goldman Sachs
2Q14
3Q14
4Q14
Citigroup

(1) CIB represents JP Morgans Corporate and Investment Bank, which includes the results of Investment Banking and Treasury & Securities Services segments
< 45 >
Disproportionately High Professional Fee & Outside Service Expense

While choices around insourcing vs. outsourcing impact headcount comparisons, BK also
spends the greatest % of revenues on professional and outside service fees compared to
other custody, asset management and G-SIB peers
BKs professional, legal and outside services expense has grown by over 10% since 2011
2014 Professional & Outside Service Fees % of Revenues
10.0%
9.0%
9.0%
8.2%
8.0%
7.0%
6.0%
5.0%
4.3%
4.0%
2.9%
3.0%
2.6%
2.0%
1.1%
1.0%
BK
JPM
STT
BAC
GS
BLK
< 46 >
BKs Margins Have Deteriorated While State Streets Margins Have

Improved
BNY Mellon went from a 2%+ margin surplus versus State Street to a 5% margin
deficit
LTM Core Pre-Tax Margin %(1)
35.0%
33.0%
31.0%
+2%
-5%
-3%
29.0%
27.0%
25.0%
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
BK
STT

(1) Adjusts revenue for net securities gains, accretable discount, FTE adjustments, other gains/losses on asset sales, net income attributable to noncontrolling interests in
consolidated investment management funds. Adjusts expenses for amortization of intangible assets, M&I, litigation & restructuring charges, net charge related to investment
management funds, and other one-time charge. BK margins also adjusted for sale of Shareowner Services and GIS / BHF acquisitions
< 47 >
Persistent Underperformance on Key Business Metrics
< 48 >
Key Revenue Drivers Are Decelerating Under Current Management
Investment Servicing LTM Gross New Business Wins ($bn)

$1,900
$1,700
$1,720
$1,500
$1,300
$1,100
$1,294
$1,138
$1,219
$1,415
$1,176
$1,348
$1,125
$1,167
$1,479
$1,226
$1,201
$1,231
$1,216
$1,284
$1,118
$1,273
$900
$700
$706
$1,016
$639
$982
$524
$595
$500
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
BK
2Q13
STT
3Q13
$1,133 $1,141
$1,031
4Q13
1Q14
$529
2Q14
3Q14
$536
4Q14
Investment Management LTM Long-Term Net Inflows ($bn)

$120
$107
$100
$80
$76
$89
$83
$60
$59
$53
$58
$95
$84
$76
$56
$48
$42
$40
$23
$20
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
< 49 >
BK Has Lost Custody Market Share Under Current Management

BK tells investors to not get overly concerned about that new business win rate because
less of the business is geared to AUC(1) and argues that there has been a real shift in nonAUC/A types of businesses(2)
Management pronouncements may help explain inferior AUC/A growth rates but do not
explain inferior asset servicing revenue growth rates
Asset Servicing Fee Growth %(1)
18%
17%
16%
14%
12%
11%
10%
8%
6%
4%
2%
(1) LTM 3Q11 FY14 total growth. Reflects BKs reported asset servicing fees less securities lending revenues within Investment Services segment. Reflects STTs reported servicing fee
revenues which excludes securities finance revenues
< 50 >
BK Has Lost Custody Market Share Under Current Management: Total

Custody Assets
BNY Mellon is about to be surpassed as the worlds largest global custodian
Indexed Custody Asset Growth (3Q11 = 100%)
150%
143%
140%
131%
130%
130%
126%
120%
115%
110%
100%
90%
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
BK
1Q13
STT
2Q13
NTRS
3Q13
JPM
4Q13
1Q14
2Q14
3Q14
4Q14
< 51 >
BK Has Lost Custody Market Share Under Current Management : Equity

Assets
Indexed Equity Custody Growth (3Q11 = 100%)
170%
160%
152%
152%
150%
148%
144%
140%
130%
120%
110%
100%
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
BK
STT
2Q13
NTRS
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
JPM
Source: Company filings, Wall Street estimates, Marcato estimates
< 52 >
BK Has Lost Custody Market Share Under Current Management : Fixed

Income Assets
Indexed Fixed Income Custody Growth (3Q11 = 100%)
150%
139%
140%
130%
120%
113%
110%
105%
103%
100%
90%
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
BK
STT
2Q13
NTRS
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
JPM
Source: Company filings, Wall Street estimates, Marcato estimates
< 53 >
Net Interest Revenue Is Under-earning Due to Excess Accumulation of

Low-Yielding Cash / Interbank Investments (contd)
Net Interest Margin % (FY14)(1)
1.20%
1.16%
1.15%
1.08%
1.10%
1.05%
1.00%
0.97%
0.95%
0.90%
1
Cash / Interbank Investments % of Interest-Earning Assets (FY14)

50.0%
45.0%
40.0%
33.6%
28.4%
30.0%
20.0%
10.0%

(1) Fully-taxed equivalent
< 54 >
BNY Mellon Has Consistently Returned Less Capital to Shareholders Than

State Street
Total Capital Return (% of Average Quarterly Market Capitalization)

3.50%
3.00%
2.97%
2.82%
2.88%
2.44%
2.50%
2.22%
2.00%
1.70%
2.20%
1.82%
1.79%
1.69%
1.14%
1.33%
1.26%
1.00%
1.83%
1.79%
1.59%
1.52%
1.50%
1.91%
1.45%
1.42%
1.42%
0.84%
0.50%
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
BK
4Q13
1Q14
2Q14
3Q14
4Q14
STT
Source: Company filings, CapitalIQ

Note: Capital return = share repurchases + dividends
< 55 >
V. No New Ideas For A Better Future
< 56 >
New Strategy No New Ideas

11/14/11 Investor Day
12/11/13 GS Conference
10/28/14 Investor Day (Flat)
CEO Gerald Hassell: Its part of our

goals that if we get a 4%, 5% revenue
growth in a range, we should be able
to produce positive operating
leverage
CFO Todd Gibbons: Our core fee
business has been growing at about
the 3% to 5% range...on the lower end
of that, to generate positive
operating leverage...is going to be
challenging
Revenue
CAGR
3 5%
3 5%
3.5% 4.5%
Expense
CAGR
2 3%
~3 4 %
~4%(1)
EPS
CAGR
7 11%
7 9%
Despite rhetoric about moving faster and with a greater sense of speed
and urgency, new targets imply business as usual
Source: 11/14/11 Investor Day, 12/11/13 GS Conference, 10/28/14 Investor Day
(1) Per Marcato estimates, see slide 62
< 57 >
No New Ideas
Return on Tangible Equity (non-GAAP)

30%
25%
25%
22%
20 - 22%
20%
20%
18%
18%
17 -19%
15%
10%
2011
2012
2013
9/30/14
2014
2017
Flat
2017
Normalized
New guidance demonstrates little commitment to restoring or improving

returns on tangible equity, even in a normal interest rate environment
Source: 10/28/14 Investor Day
< 58 >
Technology Efficiencies Are Unobservable

Highly touted technology efficiencies (reduced infrastructure spend, reduced
application development costs) are unobservable in key expense lines
Software and professional service expenses have risen 10 18% since 2012
Stated Efficiencies
Indexed Expense $
120
118
114
115
110
110
105
102
100 100
100
95
90
85
80
2012
2013
2014
Software
Professional, Legal and Other Purchased Services
Source: 10/28/14 Investor Day, Company filings
< 59 >
Lack of Accountability on Operating Leverage

Management claims to be focused on operating leverage but offers no consistent benchmark to
be held accountable against
Management has re-defined operating leverage three times in the past year
Operating Leverage Adjustments
2Q14
3Q14
2014
Earnings
Earnings
Investor Day
GAAP revenue
(-/+) Gain (loss) on assets / investments
(-) Investment and other income
(-/+) Net securities gains (losses)
(-) Minority interest of cons. inv. mgmt. funds
(-) Accretable discount
(+) Fully-taxed equivalent adjustment
Adj. Revenue
GAAP Expenses
(-) M&I, restructuring
(-) Amortization
(-) Charge related to i-mgmt funds
Adj. Expenses
Source: Company transcripts, 2Q14 Earnings Release, 3Q14 Earnings Release, 10/28/14 Investor Day
< 60 >
Lack of Accountability on Operating Leverage

Less than 2 weeks apart, Management showed two different methodologies to showcase the best
version of operating leverage and margin improvement to investors
Method 1(1): 3Q14 Earnings (10/17/14)
Commentary
Our operating leverage was up 245 basis

points year-over-year... (Todd Gibbons)
Method 2(2): 2014 Investor Day (10/28/14)

This is one of our real focuses, delivering
positive operating leverage and improving
the operating margins of our
company...And so you can see over the last
12 months, the operating margin has in fact,
improved by 78 bps across the firm (Gerald
Hassell)
3Q14 vs. 3Q13 Results

As presented
3.00%
2.50%
245 bps
1.20%
176 bps
0.80%
1.50%
0.60%
1.00%
0.40%
0.50%
As presented
107 bps
1.00%
2.00%
Results
LTM 3Q14 vs. LTM 3Q13 Results
14 bps
78 bps
77 bps
58 bps
0.20%
10 bps
Operating Leverage
Operating Leverage
Margin Expansion
Method 1
Margin Expansion
Method 2
Source: 10/28/14 Investor Day, Marcato estimates

(1)
Method 1: Adjusted revenue defined as GAAP revenue investment and other income net securities gains minority interest. Adjusted expenses defined as GAAP
expenses M&I and restructuring charges amortization of intangibles charges related to investment management funds
(2)
Method 2: Adjusted revenue defined as GAAP revenue gains (losses) on assets and investments net securities gains minority interest accretable discount + fully-taxed
equivalent. Adjusted expenses defined as GAAP expenses M&I and restructuring charges amortization of intangibles charges related to investment management funds
< 61 >
Guidance Implies Virtually No Operating Leverage on a Core Margin

Basis
2014A
$14,856
2015E
$15,450
4%
2016E
$16,068
4%
'14A - '17E
2017E CAGR
4%
$16,711
4%
(163)
(91)
62
(84)
$14,580
(145)
(91)
62
(70)
$15,206
4%
(120)
(91)
62
(70)
$15,849
4%
(100)
(91)
62
(70)
$16,512
4%
($10,645)
($10,991)
3%
($11,451)
4%
($11,924)
4%
4%
Core Pretax Income

(+) Accretable discount
(+) Net securities gains
$3,935
163
91
$4,215
145
91
$4,398
120
91
$4,588
100
91
5%
(-) FTE
(+) Minority interest
(+/-) Provision for credit losses
(-) Intangible amortization
Pretax Income
(-) Taxes @ 27%
Net Income
(-) Minority interest
(-) Preferred dividends
(-) Participating securities
Net Income to common
(/) FD shares outstanding
Diluted EPS
% growth
(62)
84
48
(298)
$3,961
(1,038)
$2,923
(84)
(73)
(43)
$2,723
1,137
$2.39
(62)
70
(10)
(268)
$4,181
(1,129)
$3,052
(70)
(73)
(43)
$2,866
1,109
$2.59
8%
(62)
70
(10)
(240)
$4,367
(1,179)
$3,188
(70)
(73)
(43)
$3,002
1,075
$2.79
8%
(62)
70
(10)
(216)
$4,561
(1,231)
$3,329
(70)
(73)
(43)
$3,143
1,042
$3.02
8%
Revenue
% growth
(-) Accretable discount
(-) Net securities gains
(+) FTE
(-) Minority interest
Core Revenue
% growth
Core Expense (implied)
% growth
4%
Key Management Guidance Drivers

4% Revenue Growth
8% EPS Growth
70% Buyback Ratio
~$600mm of share dilution per annum
Where is the operating

leverage?
(10%)
5%
4%
5%
(3%)
8%
< 62 >
Expense Growth Assumptions Are Unrealistic

Higher expense growth in flat scenario than normalized scenario?
2014A
Investment Services Segment:
2015E
2016E
2017E
CAGR
"FLAT SCENARIO":
Revenue
$ 10,059 $ 10,411 $ 10,775 $
11,153
Pretax Income (excl. intangible amort., M&I, litigation & restructuring)
$ 3,063 $ 3,216 $ 3,377 $
3,546
Implied Pretax Expenses
7,398 $
7,607
Revenue
$ 10,059 $ 10,562 $ 11,090 $
11,645
Pretax Income (excl. intangible amort., M&I, litigation & restructuring)
$ 3,063 $ 3,400 $ 3,774 $
4,189
Implied Pretax Expenses
7,455
6,996 $
7,195 $
3.5%
5.0%
2.8%
"NORMALIZED SCENARIO":
6,996 $
7,162 $
7,316 $
5.0%
11.0%
2.1%
< 63 >
Questionable Expense Allocation To Meet Segment Targets

Guidance implies ~$250mm of incremental excess expenses will be allocated into the
Other segment
Other has historically been a bucket for excess expenses
Whose bonus is tied to Other expenses?
Illustrative Income Statement (Flat Environment)
PTI @ 8.0% EPS CAGR (1)

(-) M&I, restructuring and legal
(-) i-mgmt. fund charges
(+) FX litigation charge
(+) Intangible amortization
Pretax Income (ex. amort)
(-) Investment Management PTI
% growth
(-) Investment Services PTI
% growth
Other PTI
% growth
2014A
$3,961
(1,130)
(104)
779
298
$3,804
($1,116)
($2,794)
($106)
2015E
$4,167
(450)
268
$3,985
($1,216)
9%
($2,934)
5%
($165)
55%
2016E
$4,353
(450)
240
$4,143
($1,326)
9%
($3,080)
5%
($264)
60%
'14E - '17E
2017E CAGR
5%
$4,546
(450)
216
4%
$4,312
($1,445)
9%
Segment guidance
9%
($3,234)
5%
Segment guidance
5%
51%
($368)
40%
Source: 10/28/14 Investor Day, Bloomberg consensus estimates, Marcato estimates, Management guidance
(1)
See page 62 for implied PTI at 8% EPS CAGR
< 64 >
Speculative Investments in Growth Initiatives

BK will incur hundreds of millions of dollars of expenses to pursue strategic
investments that will only become accretive to earnings in 2017 and 2018
Investment Management
Investment Servicing
< 65 >
Speculative Investments in Growth Initiatives (contd)

Strategic investments are unlikely to reach breakeven until at least 2019, assuming
Management does not underperform on its current plan as it has in the past
Pre-Tax Impact of Initiatives
2013
($36)
(120)
($156)
Investment Management Initiatives

Strategic Platform Investments
Total Investments
2014
($74)
(111)
($185)
2015
($39)
(135)
($175)
2016
(11)
($11)
2017
$44
145
$189
2018
$94
150
$244
2019
$99
155
$255
Cumulative Investment in Initiatives

$200
$100
2013
2014
2015
2016
2017
2018
2019
($100)
($200)
($300)
($400)
($500)
($600)
Source: 10/28/14 Investor Day, 1/17/14 4Q13 Earnings Day Transcript, Marcato estimates
Note: 2013 total investment based on management commentary that 1 2% of 2013 expense growth was due to reinvestment in growth initiatives
< 66 >
Investments in Growth Initiatives Wheres the Growth?

Despite a commitment to investments, Management does not appear equally committed
to growth
BKs normalized revenue growth targets are well below State Streets
Revenue growth disparity is striking because:
1.
BK has greater interest rate sensitivity than State Street
2.
BK derives a greater mix of revenue from faster-growing asset management business lines
3.
BK has greater breadth of capabilities that should drive superior growth from cross-selling
(State Street targets 4 5% revenue CAGR from cross-selling(1))
Long-term Guidance: Normalized Organic Revenue Growth
12%
9%
7% - 10%
6% - 8%
6%
3%
0%
BK
STT

(1) Per State Street 2/17/14 Investor & Analyst Forum. Reflects revenue growth targets attributable to cross-selling to existing clients
< 67 >
Deja Vu All Over Again

Natural organic growth and announced Transformation Process, Initiatives and Strategic
Platform investments should imply higher EPS growth than guidance....
...unless the collective financial impact of actions (yet again) do not drop to the bottom line, just
as with Managements Operational Excellence program launched in 2011
$6,000
$3,961 @ 3.5% CAGR(1)
$5,500
$431
2014 PTI drag of $185mm

2017 PTI benefit of $189mm
Pg. 25, 64 2014 Investor Day
$5,000
$374
$82
At least $500mm
Pg. 66 2014 Investor Day
$4,561
$500
$4,500
($787)
$4,000
$3,961
Incremental regulatory costs

vs. Buffer for poor Management
execution?
$3,500
$3,000
2014 PTI
"Transformation
"Initiatives",
Process"
"Strategic Platform"
Incremental
amortization of
intangibles
Organic growth @
3.5% CAGR,
constant margin
[Gap]
2017 Implied PTI @

8% EPS CAGR

(1) Assumes low-end of consolidated revenue growth guidance of 3.5% - 4.5% in flat scenario
< 68 >
Conclusion
1. This Management team has failed to address the chronic

underperformance of the Company
2. This Management team has responded to its challenges with a
victim mentality blaming the external environment while failing
to control expenses or hold market share
3. New forecasts show no evidence of promised IT or expense
efficiency performance
4. Managements business plan shows inability to identify new
business growth or opportunities created by new regulatory
environment
< 69 >
VI. Case Study: JPM 2015 Investor Day
< 70 >
Case Study: JP Morgan Chases 2015 Investor Day

Revenue / Expense Growth Trends (Index)
JP Morgan has delivered faster revenue growth and deeper expense reductions than BNY Mellon in key investment
services business lines
Treasury Services
1
1
1
1
1
1
Indexed to 2012
2012
Custody and Fund Services
Treasury Services(1)
Revenue
2013
Asset Servicing(1)
Indexed to 2012
+ 5%
2014
+ 8%
Revenue
1
1
1
2012
2013
2014
Investment Services Noninterest Expense

1
1
Indexed to 2012
Adjusted(2)
Actual
+ 7%
+ 2%
1
1
1
2012
2013
Source: 2/24/15 JP Morgan Investor Day, Company filings

(1)
Excludes impact of net interest revenue (not disclosed by business line. Consolidated investment Services net interest revenue is down 4% from 2012 to 2014)
(2)
Adjusted for M&I and restructuring charges
2014
< 71 >

BNY Mellon has allowed expenses to grow significantly faster (in both $ and %) than JP Morgans entire Corporate
& Investment Banking segment (which comprises JP Morgans investment services business)
Control, legal expenses and regulatory fees alone do not explain or justify BNY Mellons dramatic increase in
costs. Investors would need to believe that BNY Mellon experienced more absolute dollar headwinds than a
peer that generates >2x in revenue and operates in business lines with greater regulatory and legal scrutiny
Corporate & Investment Bank Expense Trend
Noninterest Expense(1)
UNLIKELY
$2,573 $12,177
$2.6bn more $ headwind

(controls, legal, regulatory,
etc.) than JPM CIB??
$385
$10,170
$10,379
($123) ($120)
($176)
$104
($636)
2010
2010A 2014A
Shareowner
Services sale
GIS, BHF
M&A
(2)
PF 2010
Amort.
Intangible
Cost
Synergies
(3)
Operational Fund charges (Implied)

Excellence
2014
(4)
$ Net Expense
~$400mm
~$1.8bn
% Net Expense
~2%
~17%
(5)
(5)

(1)
Reflects unadjusted total noninterest expense to provide comparability with JPM expense analysis
(2)
Adjusts for estimated annualized costs on acquired businesses. PNC GIS and BHF Asset Servicing acquired mid-year 2010. Per 2/2/10 PNC M&A investor presentation, PNC GIS
generated $910mm of revenue with 18% pretax margins. BHF expenses estimated by relative transaction value to PNC GIS acquisition
(3)
Per 2/20/10 PNC M&A investor presentation
(4)
Completed savings from initiatives as of 2013, excludes any additional initiatives achieved in 2014
(5)
Change from PF 2010 expense base
< 72 >

JP Morgan is targeting significant net cost reductions in its Corporate & Investment Banking division between now
and 2017 (versus significant expense growth for BNY Mellon)
Every single number that is here is attached to a name and to a particular action. So this is not aspirational at
all, just to be clear (Daniel Pinto, JP Morgan CEO Corporate & Investment Bank, 2/24/15 Analyst Day)
JP Morgan Corporate & Investment Bank 2017 Expense Targets
(1)
2014A 2017E
$ Net Expense
-$2.8bn
+$1.3bn
% Net Expense
-12%
+12%

(1) Implied expense growth based on flat interest rate scenario
< 73 >

All the efficiency opportunities available to JP Morgan Chase for achieving net cost reductions are
equally available to BNY Mellon
AVAILABLE TO BNY MELLON?

Corporate & Investment Bank Expense Initiatives
No Secret Playbook: better results come down to Managements intent and capacity to EXECUTE
< 74 >

Within asset management, JP Morgan has delivered stronger historical results and laid out more
ambitious 2 3 year financial targets
Actual Results
Medium-term Targets
CAGR(2)
J.P.
Morgan
Chase
Revenue
~12%
Pretax
Income
~20%
CAGR(3)
BNY
Mellon
2014 momentum
2009 2014 CAGR
LT AUM
+11%
(-1%)
+13%
(-1%)
Revenue
+1%
(-4%)
+5%
(-3%)
Pretax Income(1)
-1%
(-6%)
+6%
(-2%)
Pretax margin(1)
28%
(-1%)
28%
(-1%)
Revenue
8% - 10%
Pretax
Income
12% - 14%
Source: 2/24/15 JP Morgan Investor Day, 10/28/14 BNY Mellon Investor Day, Company filings
(1) Adjusted for amortization of intangibles
(2) Based on 2015 Investor Day targets of $15bn of revenue and $5bn of pretax income by 2016
(3) Based on 2015-2017 financial goals under normalized rates
< 75 >

Within asset management, JP Morgan is delivering strong actual margins for shareholders, as opposed to
adjusted, pro-forma illustrative margins that do not ultimately create shareholder value
Presented pre-tax margins are adjusted for:

? Distribution and servicing expense (real)
? Money market fee waivers (real)
Amortization of intangible assets
< 76 >
VII. Maximizing Value: Bold Action and New Ideas
< 77 >
A. Common Sense Principles
< 78 >
Common Sense Principles
The principles that will rejuvenate BNY Mellon are common sense:
Vision
A vision for the business. Clearly stated and compelling
Competitive
Advantage
A sustainable competitive advantage that forms the foundation of

the vision
Clear Metrics
Metrics must be aspirational, transparent and achievable
First Class
Management
A first class management team that is unified, stable and of the

highest ethical standard
Execution
A fervent commitment to execution. The CEO must move the

organization to deliver
< 79 >
Vision
1. BNY Mellon will be the bank for the worlds asset managers
Custody
Investment Services
Financing
Risk Management
2. BNY Mellon will be a leader in Wealth Management
Intermediate between the best active managers in the world and high net
worth clients
Provide the best, low cost beta investment products for clients
3. BNY Mellon will excel in managing the most efficient balance sheet in the industry
Balancing return, with risk, with regulatory requirements
Far more complex in the post-crises world
4. BNY Mellon must win the technology race in finance
Creativity, innovation, and production per technologist must be the best in
the industry
Use technology to capitalize on scale
5. BNY Mellon must be the markets safe harbor
< 80 >
Sustainable Competitive Advantage
How BNY Mellon Will Win:

Low-Cost
Structure
BNY Mellon must deliver the lowest cost platform for the
asset management business
Integrated
Solutions
BNY Mellon must provide asset managers with an

integrated platform that leverages scale and breadth of
product; deliver the whole offering
Global
Presence
BNY Mellon must maximize its global footprint
< 81 >
Clear Metrics
Management must establish Clear Metrics that are within

Managements control
Operating
Margins
Targeted operating margins of 35%+
Returns on
Equity
Targeted ROE at 10%+
Headcount
Target highest headcount productivity in the industry.

Start with a 10% - 20% headcount reduction
< 82 >
Execution
Clear Targets
Goals must be clear and measurable

Hold people accountable to meet these goals
Systematic
Measurement
Continuous
Review
Rewards &
Consequences
Follow-up to measure progress and identify weakness

Complete tasks and finish projects
Tie completion back to metrics
< 83 >
B. Business Opportunities
< 84 >
1. Reconsider Value Proposition to Customers

Be the Bank to the Buyside by providing full-service outsourced functions that help buy-side clients manage
new regulatory, liquidity and financing regulations
Expand service potential for the middle and front offices, where new regulations and complexities are
driving demand for a variety of value-added services that trust banks are uniquely positioned to provide
State Street is the market leader and BNY Mellon remains a follower in the middle and front offices
Integrate front and back office offerings to drive better client solutions and stickier relationships
Asset Manager Needs
Custody
Full-Service
Back
Office
Fund accounting & administration

Foreign exchange
Treasury & cash management
Portfolio accounting
Middle
Office
Risk management
Performance analytics
Valuation
Trade and settlement activity
Real-time, detailed data analytics
Front
Office
Risk platforms
Clearing platforms
Compliance platforms
< 85 >
1. Reconsider Value Proposition to Customers (contd)

Reconsider fee schedule and structure to earn appropriate margin for services and ROE
Investment Services Margins
Investment Services ROE (Implied)(1)
35%
30%
30%
Illustrative Investment Services ROE %

Consolidated ROE
Investment Mgmt.
ROE
25%
20%
15%
8.6%
15.0%
17.5%
20.0%
22.5%
25.0%
27.5%
30.0%
8.0%
6.9%
6.8%
6.7%
6.6%
6.5%
6.5%
6.4%
8.5%
7.4%
7.3%
7.2%
7.1%
7.0%
6.9%
6.9%
9.0%
8.0%
7.8%
7.6%
7.5%
7.4%
7.4%
7.3%
9.5%
8.5%
8.3%
8.1%
8.0%
7.9%
7.8%
7.8%
10.0%
9.0%
8.8%
8.6%
8.5%
8.4%
8.3%
8.2%
9%
10%
5%
Adj. PBT Margin

(Reported)
Adj. PBT Margin

(ex. Net Interest Revenue)
Without the subsidy from net interest revenues,

BNY Mellon earns much thinner margins for the valuable services
it provides
Investment Services is unlikely earnings its cost of capital

(~10% cost of equity)

(1) BNY Mellon does not provide segment ROE. Investment Services ROE implied by assigning Investment Management a peer-level ROE and backing in from the consolidated
ROE. Ignores Other segment for illustrative purposes
< 86 >

Seize fast-growing, higher-margin markets within asset management, such as non-US, global ETFs
and alternatives
Projected Long-Term Nominal Growth(1)
25%
Future Growth Markets
20%
15%
15-20%
15-20%
Global ETFs
Asia-Pacific
Revenue targets of 3 4% CAGR in Investment Services

do not reflect ability to capture the long-term growth
prospects of underlying markets
12%
Legacy BK Markets
10%
8-9%
5-6%
5%
4-5%
5%
5%
3-4%
0%
BK 2017 Targets
US Insurance
US Endowments US Foundations
US Retirement
Market
Global Market
US Alternatives
(HF / PE)
(1) Bernstein Asset Managers: Manic About Organic Blackbook 1/27/14
< 87 >

ETFs and Alternative Investments are key long-term growth priorities, where significant portions of
the servicing functions remain insourced
Global ETF Market
Global Alternative Investments Market
Source: State Street 9/9/14 Barclays Conference
< 88 >

Senior leadership should be hands-on and actively focus on cultivating client
relationships, and the CEO needs to be active as the face of the firm to clients
Lou Gerstner, CEO of IBM (1993 2002):
I announced Operation Bear Hug. Each of the fifty
members of the senior management team was to visit a
minimum of five of our biggest customers during the next
three months. The executives were to listen, to show the
customer that we cared, and to implement holding action
as appropriate. Each of their direct reports (a total of more
than 200 executives) was to do the same. For each Bear
Hug visit, I asked that a one- to two-page report be sent to
me and anyone else who could solve that customers
problems
Source: Lou Gerstner Who Says Elephants Cant Dance
< 89 >
2. Raise I.T. Effectiveness To Top Company Priority

Scalable systems are a critical driver of business value and yet appear antiquated and
inefficient to employees, clients and competitors
Platforms have yet to be integrated and have been a major source of expense growth
An entire new architecture may be necessary
Two Custody
Platforms
Employees
Clients
Competitors(1)
Five Accounting
Platforms
Major Redundancies
- Back office headcount
- Systems maintenance
- Application development
- Reporting costs
Upgrade your tech and bring your business processes and products into the 21st century.
The competition is selling cars while BNY is proud of the fact that it sells the cheapest and
fastest horse drawn buggy in town. Banking is not a labor intensive business yet BNY has
managed to turn it into one via underinvestment in tech and revenue generating
professionals
Bank of New York Mellon are letting themselves down with the continuing lack of merger
in their systems
BNYM continue to struggle with service differentials driven by their multiple platforms
custody and accounting
Theyre going to get to a point when it becomes hard to catch up with us just because
our future functionality is just 6x faster
Source: Glassdoor, R&M Global Custody Survey

(1) Per Gunjan Kedia, EVP of State Street, 2/25/15 State Street Analyst Day
< 90 >
2. Raise I.T. Effectiveness To Top Company Priority (contd)

BNY Mellons current model emphasizes labor over technology and automation
However, investing in automation is a long-term competitive necessity for BNY
Mellon to mitigate risk and improve client services
More investments in automation to reduce manual process may be useful but
should take place only after legacy IT systems are re-architected
Labor
Technology
Inflationary
Deflationary
Medium
High
Scalability
Not Scalable
Scalable
Operational Risk
High
(Human Error)
Medium
(Straight-Through Processing)
Long-term Expense Growth

Innovation Potential &
Velocity
< 91 >

Invest in I.T. to drive speed, accuracy and transparency
BNY Mellons antiquated I.T. systems and manual processes results in an unbalanced
mix of spending on labor over technology and innovation
Staff Expense / Information Technology Expense (FY14)
10.0x
9.4x
9.0x
8.0x
1x reduction = ~0.40 of
potential incremental EPS(1)
7.0x
6.0x
5.0x
4.2x
4.0x
3.0x
2.0x
1.0x

(1) At constant $620mm of software expense
< 92 >

I.T. TRANSFORMATION
Strategy
Applications
BUSINESS IMPACT
Compensation Expense
Headcount
Cloud-Enabled Apps
Data Centers
Software Expense
Purchased Services
Shared Services
Returns
ERP Systems
Speed & Transparency
Custody Platforms
Operational Risk
Set Explicit Targets...

How many systems today? How many in
the future?
< 93 >
3. Aggressive Headcount Reduction Initiative

Headcount disproportionate to that of comparable companies
Combinations of similar sized investment managers and investment servicers would imply
meaningfully lower headcount levels
Headcount discrepancy not bridgeable by BKs Corporate Trust or Pershing business units
Total Employees
Investment
Servicers
60,000
Investment Managers
Implied Headcount (Asset Manager + Asset Servicer)
Asset Managers
50,300
50,000
Total Employees
40,000
30,000
27,470
~27,000
BLK
Capital
JPM
BEN
Group
GIM (2)
PIMCO
Asset
Servicers
Vanguard
JPM
(TSS)
41,200
39,200
36,266
34,000
32,700
29,490
STT
(IS)
41,670
39,670
36,736
34,470
33,170
29,960
~7,000
6,264
5,870
5,700
3,100
~2,500
2,490
1,435
STT
(Inv. Mgmt.)
PIMCO
FII
$2,480
$1,680
20,000
~14,200
12,200
9,266
10,000
BK
AUC/A ($tn)
AUM ($bn)
$29
$1,710
STT
(Inv. Serv.)
JPM
(1)
(TSS)
$28
$21
Vanguard
BLK
BEN
Capital Group
IVZ
TROW
$3,100
$4,652
$898
$1,147
$792
$747
JPM
LM
(Global Inv. Mgmt.)
$1,744
$709
$363

(1)
JPMs Treasury & Securities Services division
(2)
JPMs Global Investment Management division
< 94 >
3. Aggressive Headcount Reduction Initiative

Business model requires scalability, efficiency, accuracy, data capture and data security.
Manual human processes are an impediment to all of these things
BK needs better people, not more people
Total Headcount Trajectory
52,000
Relative Headcount to Benchmark(1)

55,000
51,100
50,300
50,000
50,300
49,500
50,000
48,700
48,000
48,000
~10,000
45,000
46,000
~40,000
40,000
44,000
42,500
42,200
35,000
42,000
40,000
2008
2009
2010
2011
2012
2013
2014
30,000
BK
Benchmarking Target
(1) Reference page 94 for analytical support
< 95 >
3. Aggressive Headcount Reduction Initiative (contd)

Successful restructuring precedents support a strategy of targeted, impactful
headcount reductions
Headcount Restructuring in Historical Perspective
Starting
Net Headcount
Headcount (est.) Reductions (est.)
Company
%
Reduction
Period
(Yrs.)
Date
Historical Restructurings
Apple
Xerox
Credit Suisse First Boston
IBM
Merck
Starbucks
Heinz
Legg Mason
Lockheed Martin
10,896
94,600
27,547
301,542
100,000
176,000
41,000
3,550
140,000
4,238
33,500
8,959
81,703
24,000
39,000
8,000
571
17,000
38.9%
35.4%
32.5%
27.1%
24.0%
22.2%
19.5%
16.1%
12.1%
~
~
~
~
~
~
~
~
~
2
4
2
2
4
2
2
2
2
1997 - 1998
2000 - 2003
2002 - 2003
1993 - 1994
2010 - 2013
2008 - 2010
2006 - 2007
2011 - 2012
2010 - 2011
Current Restructurings
Canadian Pacific
Barclays (Investment Bank)
Bank of America
Microsoft
UBS
Hewlett Packard
Valeant
Royal Bank of Scotland
19,500
26,000
284,000
128,000
62,628
331,800
18,000
141,000
6,000
7,000
46,000
18,000
8,628
41,000
2,250
14,000
30.8%
26.9%
16.2%
14.1%
13.8%
12.4%
12.5%
9.9%
N/A
N/A
N/A
N/A
~3
~3
N/A
~4
2012 - 2016E
2014E - TBU
2010 - TBU
2014E - TBU
2013 - 2015E
2012 - 2014E
2013 - TBU
2015 - 2019
Source: Company filings, Company news
< 96 >

OPERATIONAL SIMPLIFICATION
+ Reduce headcount to reach

world-class levels
+ Eliminate multiple layers of
management and bureaucracy
+ Invest in world-class
technology and automation
+ Re-engineer business
processes to improve costs,
speed and transparency
BUSINESS IMPACT
Deliver services to clients at a

fundamentally lower cost point
and with greater service
reliability
Drive greater volumes through
more highly-scaled platforms
Profitably compete for more
business with a lower cost
structure; deliver greater
revenue growth
Improve returns on equity
< 97 >

Lou Gerstner, CEO of IBM (1993 2002):
If we have too many people, lets right-size fast; lets get it
done by the end of the third quarter. I explained that what
I meant by right-size is straightforward: We have to
benchmark our costs versus our competitors and then
achieve best-in-class status. I also remarked that we had to
stop saying that IBM didnt lay off people
Ive had a lot of experience turning around troubled
companies, and one of the first things I learned was that
whatever hard or painful things you have to do, do them
quickly and make sure everyone knows what you are doing
and why. Whether dwelling on a problem, hiding a problem
or dribbling out partial solutions to a problem while you wait
for a high tide to raise your boat dithering and delay
almost always compound a negative situation. I believe in
getting the problem behind me quickly and moving on
Source: Lou Gerstner Who Says Elephants Cant Dance
< 98 >
4. Reposition Asset Management

The Index / ETF industry represents a highly compelling long-term growth opportunity for asset management
ETFs & Index Funds Total AUM ($tn)
Bernstein estimates Index & ETF AUM will grow by 4x
over the next decade
$15.0
$10.0
$5.0
$4.9
$3.8 $4.3
$3.3
$2.6 $3.0
$5.5
$6.3
$7.1
$8.0
$8.9
$12.5
$11.1
$10.0
High-Quality Growth Pathway

Long runway for ETF growth supported by deepening
adoption within new and existing client segments,
financial products, and geographies
'12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25
Index Mutual Funds
ETFs
BlackRock estimates the global ETF industry will grow

by 11% CAGR into 2017, expanding by $3.6tn
Source: Bernstein Asset Managers: Manic About Organic Blackbook 1/27/14, Blackrock 6/17/14 Analyst Day, WisdomTree Investments 11/20/14 Analyst Presentation
< 99 >
4. Reposition Asset Management (contd)

The ETF industry is highly concentrated due to the importance of economies of scale
Index / ETF strategies have highly attractive incremental margins and can be highly profitable at scale
Top 10 ETF Providers by AUM globally ($bn)
$1,200
$1,000
Top 10 players control 87% of the Index / ETF market
$993
$800
$600
$417
$400
$389
$104
$200
$54
$49
$41
$35
$27
$27
ProShares
First Trust
iShares
State Street
Vanguard
PowerShares db x-trackers
Lyxor
Nomura AMC Wisdom Tree
Unit Economics
Index / ETF products carry the highest contribution margins of nearly all investment strategy
Source: Bernstein Asset Managers: Manic About Organic Blackbook 1/27/14, Blackrock 6/17/14 Analyst Day
< 100 >

BNY Mellon is uniquely positioned to capture the HUGE opportunity in passive / index / beta products by
leveraging its large infrastructure base and existing strengths in technology, distribution, human capital
and branding
Opportunity to serve as white-label asset management solution to other asset management
companies, some of whom may already be custody clients
Leverage existing institutional distribution channels with RIAs and broker-dealers
Leverage data, technology and investment insights to become a product development leader
BNY Mellon can scale its existing infrastructure to create a major passive asset manager, but successful
execution requires new leadership, new technology, new product design teams and new marketing
plan
Back Office Functions
Front Office Functions
BK Competencies
BK Competencies
Fund Accounting &

Administration
Product Development
Portfolio Management
Sales & Distribution
Index Calculation
Research & Product

Development
Broker-Dealer Functions
Brand & Marketing

Leverage & scale
Develop & grow
< 101 >

BNY Mellon has experienced the greatest inflows into its more beta / process / scale-driven
investment strategies like Liability-Driven Investments and Index businesses
High-touch, alpha-oriented boutiques make no strategic sense for this Company and are hard
to sell to clients...no competitive advantage
Alpha boutiques should be sold or spun and BNY Mellon should focus its resources on its
competitive advantages within asset management
BNY Mellon Investment Management Inflows (2011 2014) ($bn)
Strong: Orientation
$200
$186
$180
$160
$140
$120
$100
$80
Weak: Orientation
$62
$60
$40
$24
$11
$20
LDI
Index
Active
Alternatives
< 102 >
5. Culture of Effectiveness, Urgency and Accountability

Modernize the culture, with compensation to match lean, faster, and commercially intense
Employee feedback repeatedly emphasizes a culture of bureaucracy, lifetime employment,
stifled creativity, out-of-touch leadership, lack of business integration and poor communication
Employee Feedback
Almost no career opportunities, non-existent training, terrible technology infrastructure, and overly
bureaucratic. The fact that there is actually a committee to oversee other committees that set
internal policies kind of says it all. Unimaginative senior management that is always reacting to
competition. Bloated middle management while underinvesting in products, services, and line
employees that actually drive revenues.
Depending on your point-of-view there aren't high standards for performance. It seems people get
rewarded for providing the bare minimum and it seems cultural. Working with other service groups is
a nightmare as that culture seems pervasive.
They have an if it's not broke, don't fix it mentality, so the creativity and energy needed to drive
ideas forward can only be done if you're truly passionate about what you do...But, I will say that it's
near-impossible to get fired, so job security is incredible.
The merger, even six years later, still shows signs of growing pains. Advancement is nearly stagnant
and so are the salaries. Communication between the various departments is a struggle and they're
constantly shuffling and consolidating.
Source: Glassdoor
< 103 >
5. Culture of Effectiveness, Urgency and Accountability (contd)

Employee Feedback
There seems to be a fairly large number of individuals who don't know what the company does
beyond their own responsibilities and they are ok with that. There is little global awareness.
Politics, dysfunctional org structure, misalignment of systems, and the legacy of two strong financial
institutions that have never really merged.
Invest more in technology and training employees on topics that matter. Keep morale up in the
company and take better steps to retain talented employees.
Main challenge is navigating the variety of corporate cultures which exist due to the lack of
integration.
Advice to Management: Focus on integrating, focus on the experienced employees, and
consolidate the top three tiers of management.
Senior Executives and Senior Mgmt who have been with BONY for 15+ years are not the ones who
will lead the bank to new successful strategies and profitability.
Very large company that can't get out of its own way. Bureaucracies are overwhelming, overly risk
averse; little opportunity to make a value added contribution to the business of one's own client
group...Stated initiatives by Chairman to improve on bureaucracies do not make it down to the
operational level because people are fearful of losing their jobs (presumably). People are stifled of
creativity and line managers are fearful to support and create change for fear of losing job. Massive
culture change is needed.
Source: Glassdoor
< 104 >
5. Culture of Effectiveness, Urgency and Accountability (contd)

FAST ORGANIZATION
ALIGNED INCENTIVES
+ Zero-based budgeting
+ Targets-based program, reset annually
+ Consolidate systems and vendors
+ Targets should be applied as far down the

organization as practical (000s of eligible
officers and executives)
+ Invest in digital automation

+ Fewer layers of management &
organizational bottlenecks
+ Common metrics & reporting
+ Hands-on management; less committee
delegation
BELIEF SYSTEMS
+ Focus on a mix of financial, strategic and

total company performance goals
+ Key metrics: operating margins, ROE, growth,
risk and talent development
LOW-COST OPERATIONS
+ Outcomes drive compensation
+ Greater % of processes as shared services
+ Clients define our success
+ Greater leveraging of systems
+ Deliver results in an uncertain world
+ Compensation and headcount levels
+ Adapt & learn
+ Purchased services costs
< 105 >
+ Discipline improves execution

+ Stay lean to go fast
< 105 >
6. Update Regulatory Sophistication and Outreach Strategy

BNY Mellon needs to hire key leaders and talent to develop a leadership position with regulatory
groups in priority geographies
Sophisticated regulatory outreach requires more than just subject matter experts but also
relationship managers
Demonstrate safety, soundness and vision that comforts key regulatory constituents
Mixed Track Record of Anticipating
Key Regulatory Trends
Todd Gibbons (4/19/11): In terms of the leverage
ratio, I really havent been overly focused on it at
this point. I dont think it will be the constraining
ratio for us...I dont think its going to change
business behavior at this point as I look at it
Todd Gibbons (10/28/14): We now know most of
what the rules are and so far its been the
supplemental leverage ratio that is turning out to
be our binding constraint
Mixed Track Record of Influencing Regulatory

Changes
Rule
BNY Mellon Regulatory Proposal
Final
SLR
Balance sheet daily averaging
SLR
Exclusion or caps on Central Bank deposits
SLR
Exemptions to leverage requirements for

cash deposit surges
LCR
Operational services (not deposits) subject

to legally binding written agreement
LCR
Exclude deposits in connection with prime

brokerage services
LCR
Exclude from operational deposits

instances where bank provides services as
an agent or administrator
LCR
Revise definition of operational services to

include administration of investment assets,
collateral management services, and
settlement of FX transactions
Source: Company transcripts, 1/31/14 Liquidity Coverage Ratio Memo, 6/13/14 Regulatory Capital Rules Memo
< 106 >
6. Update Regulatory Sophistication and Outreach Strategy (contd)

Position BNY Mellon as a problem solver in the global risk management matrix by forming a sovereign advisory franchise
like BlackRock Solutions
In addition to being a $550mm+ revenue business, BlackRock Solutions helps BlackRock strengthen relationships with
key regulators and official institutions, while also burnishing BlackRocks reputation from prestige advisory assignments
BNY Mellon has a unique opportunity to leverage its size, data, systems, expertise, lack of trading conflicts, and low
public profile to support regulatory bodies and official institutions with similar complex assignments
Capabilities
Risk analytics platform
Operations outsourcing
End-to-end investment system
Financial
Markets
Advisory
Valuation and risk assessment

Balance sheet strategy
Disposition of distressed assets
Clients & Assignments

Analyze assets of Fannie Mae and Freddie Mac;
wind-down distressed debt book of Bear Stearns &
AIG
Advised on the creation of a bad bank for certain
RBS assets
Reviewed and valued loan portfolio of 18 financial
firms
Assisted in 2012 Prudential Capital Assessment
Review (PCAR)
< 107 >
6. Update Regulatory Sophistication and Outreach Strategy (contd)

If you cant measure it, you cant manage it
BNY Mellon blames a significant portion of its expense growth since 2011 on regulatory
and compliance costs
Despite the significant increases in regulatory & compliance costs, BNY Mellon has
been unwilling or unable to quantify its compliance expenses
We question how the Company can manage this huge component of expense
growth without detailed visibility and thoughtful analysis of its components and drivers
Compliance and Regulatory Restructuring
Formulate a long-term strategy for tackling compliance and regulatory costs
Immediately conduct a comprehensive review of compliance and regulatory
operations to restructure and streamline the compliance chain, eliminate
redundancies and reduce costs
< 108 >
7. Consider A New Brand Image
< 109 >
BNY
BNY is a company of gigantic

scale and impact.
It is the oldest bank in
America, having been
founded by Alexander
Hamilton in 1784, and over
80% of Fortune 500
companies do business with
BNY.
$28.5
trillion assets under

custody or administration
Source: bnymellon.com
2
$1.7
trillion assets
under management
100
markets across
the globe
Yet in todays market, the

share of conversation in the
news media and among the
public has BNY coming in
behind the majority of its
competitors.
7:1
JP Morgan Chase: BNY Mellon
6:1
Citigroup: BNY Mellon
1:1
State Street: BNY Mellon
Source: Google trend report compiling news articles and public search of each company name in Jan 2015
3
- Bank of New York

- Bank of New York Mellon
- BNY
- BNY Mellon
Over the course of the last

decade, the majority of the
conversation about BNY took
place at the moment the two
companies came together as
one.
Source: Google trend report compiling news articles and public search of each term over the last 9 years.
4
- Bank of New York

- BNY
- BNY Mellon

conversation about BNY took
place at the moment the two
companies came together as
one.
BNY went from being a

relatively popular company in
the public sphere, to losing its
cache soon after the merger.
5
- Bank of New York

- BNY
- BNY Mellon

conversation about BNY
Mellon took place at the
moment the two companies
came together as one.
BNY went from being a

relatively popular company in
the public sphere, to losing its
cache soon after the merger.
The merger did not leave a strong

impression of the new brand, and today the
terms Bank of New York, Bank of New York
Mellon, BNY and BNY Mellon are being
used interchangeably.
6
Whats made this

convergence of brands even
more difficult is that BNY
still operates with a
multitude of boutique
brands under its Investment
Management wing - 14 as of
today - most of which are
not recognizable as a part of
the parent company.
Source: bnymellon.com
7
Over the past two years, BNY

has made an attempt to
develop a stronger public
image of its overarching
brand through a global
advertising campaign.
The ads focused on growing
awareness and significance
of BNY Investment
Management and Servicing
business, and coined a
tagline of Investments
Company for the World.
8
And while the advertising

was well executed, it may
have been developed across
the wrong strategic brief.
Without a singular brand,
the company was still
sending the majority of
investors to work with one of
its 14 boutiques, none of
which are covered in the ads
themselves.
Whats more, it did not seem

to jar the opinions of
individuals within the
category.
We conducted an
anonymous, informal survey
with senior stakeholders in
the finance sector in New
York, and discovered that
their opinions of BNY have
not shifted.
big
custodian
traditional rational old
confused venerable
boring unchanging
stale Hamilton
Source: Most common words used by our sample to describe BNY Mellon today. Bigger words were
mentioned more frequently.
10
JP Morgan Chase
And that lackluster opinion

and lack of interest in the
BNY brand may be
influencing more than just
investors and peers - it may
have a significant influence
on the new talent vying to
work at the company.
Citigroup
BNY Mellon
BNY organic social media

conversation is minimal in
comparison to the competition,
especially where it matters most career interest.
Source: quicksprout.com analysis of social

media engagement in the past 60 days
11
ALL OF THIS DATA LEADS US TO A SINGLE CONCLUSION:
The public brand of BNY has

not taken root with the
press, investors, advisors,
high net worth individuals
nor potential employees.
12

Instead, the BNY brand is

splintered across a multitude
of names, entities and
preconceptions, without a
motivating image the public
can connect with.
13

Instead, the BNY brand is

splintered across a multitude
of names, entities and
preconceptions, without a
motivating image the public
can connect with.
14
In order to succeed,
BNY must immediately
reconsider its
marketing and services
offering in order to
build a brand for the
future.
THE QUESTION IS:
How does BNY

approach this challenge?
First, we must note that the

industry itself has become
revolutionized over the past
decade. Banks today are as
much technology services as
they are finance institutions,
and many have evolved to be
massive marketing machines.
Digital technology is
transforming the financialservices industry, and
banks face the challenge of
fully digitizing their
businesses.
Escalating competition has

created a 5.6% marketing
spend lift in the financial
services sector, raising its
media expenditures beyond
$4.6 billion in 2013.
Source: McKinsey and Associates, How winning banks refocus their IT budgets for digital
CMO Council Marketing Spend Factsheet 2013
16
OUR SOLUTION:
BNY has remained traditional as
other banks embraced calculated
risks to move forward.
BUILD A SINGLE BRAND

(MERGE ALL ENTITIES UNDER ONE NAME)
AND RAISE ITS PUBLIC

IMAGE.
GOING FORWARD, BNY MUST DEVELOP AN

INTEGRATED MARKETING PLAN BASED ON
THREE OBJECTIVES:
CONNECT WITH PRIORITY

TARGETS THROUGH
DIGITAL AND MOBILE.
17
COMBAT CURRENT
PRECONCEPTIONS OF
THE BRAND THROUGH
BRAND ACTIONS.
THE CAMPAIGN IDEA:
18
BUILD A SINGLE BRAND:

IN ORDER TO INCREASE SCALE AND CONNECT WITH MORE INVESTORS, WE MUST
START WITH A LARGE-SCALE EFFORT TO MAKE OUR BRAND MEMORABLE
Magazine
Televison
SEO
Public Relations
19
We advise focusing this abovethe-line effort in key financial

capitals in the world: New York,
London, Shanghai, Hong Kong,
Chicago and San Francisco.
PRINT EXECUTIONS:
20
DIGITAL BILLBOARDS:
21
CONNECT WITH PRIORITY TARGETS:

HIGH NET WORTH INVESTORS, ADVISORS, AND TALENT IN THIS SEGMENT ARE
AHEAD OF THE POPULATION IN DIGITAL, AND WE MUST MEET THEIR ON-DEMAND
NEEDS THROUGH.
Magazine
Televison
Responsive Brand
Digital, Mobile & Tools
SEO
Public Relations
Digital/Mobile Video and

Blog Content
Brand Social
& CRM
22
In coordination with a mass

effort, we will tailor digital and
mobile media and services
directly to our most desirable
target market, connecting with
them when they are most
receptive to our message.
DIGITAL TAKEOVERS:
23
MOBILE APPLICATION:
24
COMBAT PRECONCEPTIONS THROUGH BRAND ACTIONS.

BNY MUST NOT JUST TALK THE TALK, BUT WALK THE WALK. COORDINATING A
SERIES OF PUBLIC EVENTS AND INTERNAL ACTIONS WILL GIVE THE WORLD
PROOF THE BRAND HAS TRULY EVOLVED.
Magazine
Televison
Responsive Brand
Digital, Mobile & Tools
SEO
Public Relations
Digital/Mobile Video and

Blog Content
Brand Social
& CRM
25
New Tools
Public Events &

Sponsorships
Develop
programs that
gives the press
& our target
audience the
proof that BNY
Mellon has
truly evolved.
EXPERIENTIAL BRAND ACTION:
26
DESIRED RESULT
This integrated marketing approach will propel

BNY to become a household name of significant value.
Whats more, it will assist the company in retaining
current customers while encouraging new prospects to
experience BNY firsthand.
Thank You
APPENDIX
What we mean when we say

brand action:
Develop a program that gives

investors, advisors, institutions, high net worth
individuals, potential employees and the press
the belief that BNY Mellon is one of the few
globally great institutions.
29
In order to do so, we must develop or promote our rational actions

and services in order to feed a larger emotional message.
RATIONAL
EMOTIONAL
Develop practices, policies,

behaviors and comms that make the
public feel that BNY Mellons
ambitions match its size.
With those actions in mind, BNY

Mellon becomes an entity whose
forward thinking create trust in
the future.
30
Instead of learning from our competitors,

we should learn from brands outside of our category.
RATIONAL
EMOTIONAL
Employees are allowed to use up

to 20% of their time on projects
outside of their day to day work.
Google is a tech company that

values humanity and innovation
over the pursuit of profit.
31

RATIONAL
EMOTIONAL
Ritz Carlton service employees are

allowed to spend up to $2,000 per
customer to improve their stay.
The Ritz-Carlton is devoted

to making sure I only have
the best experience.
32

RATIONAL
EMOTIONAL
Every Apple store comes equipped

with the Genius Bar to help buyers
deal with product challenges.
Apple is a friendly
face in a cold
technology landscape.
33
SOCIAL
WE BELIEVE
actions like these,
communicated to the public, will
cause a reappraisal of BNY Mellon.
FROM
EXPERIENTIAL
CORE
BEHAVIOR
PRPR
CONSUMER
Consumer
ENGAGEMENT
engagement
PLATFORM
platfor m
COMMUNICATIONS
Ad
CAMPAIGN
Campaign
DIGITAL
One bank, many brands

Stale, old fashioned and slow to advance
TO
TRADITIONAL
ADVERTISING
One brand, one powerful entity: BNY Mellon

Future thinking, with a discerning eye on the past
ADVOCACY
34
VIII. Unlocking Potential: New Leadership
< 110 >
Reflections on Change
And what's interesting, when you promote people into new jobs or bring in new
talent from outside, how you get increasingly different insights into how we operate
our business. Adding these people and promoting these people are making us a
better company. They're raising the bar in terms of the excellence that we expect of
ourselves and we expect of our staff. And it is in fact permeating the entire
organization. As new people come in with new ideas and raise the expectations, it's
helping us better perform as a company.
- Gerald Hassell, CEO
10/28/14 Investor Day
We Believe Shareholders Should Embrace This Advice

And Seek New Leadership
< 111 >
Key Leadership Needs

KEY LEADERSHIP ROLES
KEY SKILLS AND EXPERIENCES
CEO
Cultivate critical relationships with key clients and regulators

Team-building: identify internal and external talent that can drive organizational
change
Invigorate culture by elevating H.R. and implementing organizational structures that
drive accountability and emphasize clients
Block-and-tackle: critically evaluate the business portfolio, focus the strategic
priorities, enforce accountability
CFO
Perform continuous benchmarking of growth, costs and operating metrics against

competitors
Implement rigorous measurement and compensation systems
Centralize business planning and budgeting to drive a unified strategy and reduce
duplicate spending
Critically evaluate return on investments for business initiatives
Implement zero-based budgeting practices
Optimize balance sheet against onerous regulatory constraints
CTO
Consolidate mutant IT systems and platforms that have proliferated over time
Cull unproductive projects; manage, measure and prioritize technology initiatives
Drive automation initiatives that increase employee productivity
< 112 >
Leadership Tenure
Nearly the entire Senior Management team has worked at BNY Mellon for 25+ years
@ BNY Mellon
Executive
Gerald Hassell
Title
CEO
Start Year
1973
Tenure (yrs.)
42
Todd Gibbons
CFO
1986
29
Suresh Kumar
CTO
1986
29
Karen Peetz
President
1998
17
Brian Shea
CEO, Investment Services
1983
32
Kurt Woetzel
President, BNY Mellon Markets Group
1985
30
Curtis Arledge
CEO, Investment Management
2010
Average
26 yrs
Median
29 yrs
Is this the team to deliver fresh perspectives and organizational change?
< 113 >
Available Executive Talent For A New BNY Mellon (Anonymized)

Executive #1
Executive #2
Executive #3
Proven leadership at a large

global financial institution
Operations, risk and

technology experience
Asset management expertise
Capital markets expertise
Regulatory credibility
Emerging markets expertise
Shareholder credibility
We Have Identified Compelling Executive Talent
< 114 >
IX. Valuation Potential
< 115 >
Expense Base and Investment Yield Opportunity
Enhanced Investment Yield Potential
Expense Reduction Categories
Estimated Excess Headcount

BK Staff Expenses
BK Staff Expenses per FTE
Implied Excess Staff Expenses
Other Expense Opportunity:
Software, furniture & equipment
Professional, legal and other purchased services
Net Occupancy Expenses
"Other"
SubTotal
Illustrative Pre-Tax Impact of 5% improvement
~10,000
$5,845
$0.115
$1,148
$942
$1,339
$610
$1,031
$3,922
$196
EPS Impact
Excess Staff Expense Savings
Other OpEx Savings
Total Pre-Tax Savings
Incremental Net Income
Fully Diluted Shares Outstanding (FY15)
$1,148
196
$1,344
$981
1,107
EPS Benefit
Assumed P/E
Value Creation Per Share
$0.89
15.0 x
$13.30
HQLA Assets ($bn)

LCR Runoff ($bn)
LCR Ratio %
Target LCR Ratio %
Excess HQLA ($bn)
$164
$151
109%
100%
$13
HQLA Yield
Non-HQLA Yield
0.7%
1.4%
Incremental Net Interest Revenue

Fully Diluted Shares Outstanding (FY15)
$182
$133
1,107
EPS Benefit
Assumed P/E
Value Creation Per Share
$0.12
15.0 x
$1.80
< 116 >
Direct Incremental Earnings Into Share Buybacks

Margin Initiatives + Share Buybacks
SQ Cash Net Income
OpEx Savings Achieved(1)
Restructuring Costs
Technology reinvestment, after-tax
Enhanced Investment Portfolio

PF Cash Net Income
PF Cash Net Income (ex. Restructuring)
OpEx Savings as % of Run-Rate Savings
Restructuring Costs as % of Run-Rate OpEx Savings
2015
$2,915
$736
(981)
(150)
133
2016
$3,450
$981
(200)
205
2017
$3,876
$981
(225)
267
($262)
$986
$1,023
$2,652
$3,633
75%
100%
$4,437
$4,437
100%
$4,899
$4,899
100%
SQ FDSO
(-) Incremental total shares repurchased(2)
PF FDSO
1,107
1,107
1,073
(18)
1,055
1,035
(33)
1,002
SQ Cash EPS
PF Cash EPS (ex. Restructuring)
$2.63
$3.28
$3.22
$4.21
$3.75
$4.89
EPS Benefit
$0.65
$0.99
$1.14
P/E Multiple
15.0x
15.0x
15.0x
Total Value Creation Per Share

% Premium to Current
$9.74
25%
$14.83
38%
$17.14
44%

(1) Assumes full opex savings run-rate by 2016
(2) Shares repurchased at a ~13%, 45% and 75% premium to the current share price in 2015, 2016 and 2017. Shares repurchased from incremental net income including restructuring
costs
< 117 >
Marcato Proposal: Total Value Creation Opportunity

By restoring BKs earnings trajectory to its potential and eliminating
the credibility discount created from years of stagnant earnings
and missed targets, significant shareholder value can be created
2015
SQ Cash EPS (LTM)
(+) Expense efficiencies & NIM yields
(+) Improved growth profile(1)
PF Cash EPS (LTM)
P/E Multiple
Value Per Share
(+) Cumulative DPS
Adj. Value Per Share
% Premium to Current
$2.63
0.65
0.10
$3.39
15.0x
$50.78
$0.74
$51.52
32%
2016
$3.22
0.99
0.25
$4.45
15.0x
$66.82
$2.08
$68.90
76%
2017
$3.75
1.14
0.45
$5.34
15.0x
$80.05
$3.68
$83.73
114%

(1) At 10% revenue CAGR (high-end of State Streets long-term organic revenue goal) and PF 35% pre-tax margins under Marcato Plan. Assumes incremental net income enables
10mm of incremental cumulative share repurchases by 2017
< 118 >

Marcato Capital

Diunggah oleh

Informasi Dokumen

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Marcato Capital

Diunggah oleh

Hak Cipta:

Format Tersedia

MARCH 2015

THE BANK OF NEW YORK MELLON

Q1 2010 Investor Presentation

Q1 2010 Investor Presentation

Good Franchise In A Historically Good Business

III. The World Has Changed

VIII. Unlocking Potential: New Leadership

Q1 2010 Investor Presentation

Q1 2010 Investor Presentation

Low rates and volatility pressuring revenues (permanent?)

Regulatory environment imposing new capital charges and

3. Management has done a poor job creating value through this

Q1 2010 Investor Presentation

Q1 2010 Investor Presentation

II. Good Franchise In A Historically Good Business

Q1 2010 Investor Presentation

Leading Market Share in a Concentrated Industry

Global Assets Under Administration

~$150 trillion market

Q1 2010 Investor Presentation

Mission Critical, Trust-based Services To Customers Create Barriers to Entry

High Switching Costs / Sticky Client Relationships

Q1 2010 Investor Presentation

Investment Servicing is a Business Process Outsourcing (BPO) Service

Offshore Labor Inputs

Q1 2010 Investor Presentation

Attractive Fee-Based Business Model

Total Fee Revenue (2008 Financial Crisis)

Source: Company filings; As of FY14

Q1 2010 Investor Presentation

Asset and wealth management

FX and other trading activities

Positive Long-term Growth Dynamics

Q1 2010 Investor Presentation

Conservative Balance Sheet

Cash / interbank investments

Trading account securities

Source: Company filings

Q1 2010 Investor Presentation

Conservative Balance Sheet: High-Quality Assets

Investment Securities Portfolio: Ratings Mix

Source: Company filings, Wall Street research

Q1 2010 Investor Presentation

Conservative Balance Sheet: Liabilities

Interest-Earning Assets % of Deposits

Deposits / Interest-earning assets

Source: Company filings

Q1 2010 Investor Presentation

Conservative Balance Sheet: Safe Haven

September 2001 Attack

Lehman Brothers Bankruptcy

US Debt Ceiling 2011

US Fiscal Cliff 2012

1Q01 2Q01 3Q01 4Q01

3Q08 4Q08 1Q09 2Q09

2Q11 3Q11 4Q11 1Q12

3Q12 4Q12 1Q13

Source: Company filings

Q1 2010 Investor Presentation

High Capital Ratios

Q1 2010 Investor Presentation

Attractive Balance Sheet: Stress Test Performance

Source: Federal Reserve March 2015 DFAST Stress Test

Q1 2010 Investor Presentation