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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant To Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant    x

Filed by a Party other than the Registrant    ¨

Check the appropriate box:

STATE STREET CORPORATION

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Joseph L. Hooley

Chairman, President and Chief Executive Officer

April 5, 2012

Dear Shareholder:

We cordially invite you to attend the 2012 annual meeting of shareholders of State Street Corporation. The meeting will be held at One Lincoln Street, 36^th Floor, Boston, Massachusetts, on Wednesday, May 16, 2012, at 10:00 a.m.

Details regarding admission to the meeting and the business to be conducted are more fully described in the accompanying notice of annual meeting and proxy statement.

Your vote is very important. Whether or not you plan to attend the meeting, please carefully review the enclosed proxy statement and then cast your vote. We urge you to vote regardless of the number of shares you hold. Please mark, sign, date and mail promptly the accompanying proxy card. If you hold your shares in “street name,” meaning they are held for your account by a broker, bank or other nominee, you will receive separate voting instructions for your shares from your broker, bank or other nominee. Registered shareholders may also vote electronically by telephone or over the Internet by following the instructions included with your proxy card. For shares held in street name, please follow the relevant instructions for telephone and Internet voting provided by the broker, bank or other nominee. To be sure that your vote will be received in time, please cast your vote by your choice of available means at your earliest convenience.

We are pleased to take advantage of the Securities and Exchange Commission rule allowing companies to furnish proxy materials to their shareholders over the Internet. We believe that this e-proxy process expedites shareholders’ receipt of proxy materials and lowers the costs and reduces the environmental impact of the annual meeting. Shareholders receiving e-proxy materials have been sent a notice containing instructions on how to access the proxy statement and annual report over the Internet and how to vote.

We look forward to seeing you at the annual meeting. Your continuing interest in State Street is very much appreciated.

Sincerely,

PLEASE NOTE: If you plan to attend the meeting, please allow time for registration and security clearance. You will be asked to present a valid picture identification acceptable to our security personnel, such as a driver’s license or passport. For security reasons, you and your bags are subject to search prior to your admittance to the meeting. If you own your shares in street name through a broker, bank or other nominee, you should also bring proof of beneficial ownership (for further details, see “Meeting Admission” in the attached Notice of State Street Corporation 2012 Annual Meeting of Shareholders). Public fee-based parking is available at State Street’s headquarters at One Lincoln Street (entrance from Kingston Street). Other public fee-based parking facilities available near One Lincoln Street include the LaFayette Corporate Center and the Hyatt Hotel (entrances from Rue de LaFayette). South Station is the closest MBTA station to One Lincoln Street.

State Street Corporation

One Lincoln Street

Boston, MA 02111-2900

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NOTICE OF STATE STREET CORPORATION 2012 ANNUAL MEETING OF SHAREHOLDERS

April 5, 2012

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STATE STREET CORPORATION

One Lincoln Street, Boston, Massachusetts 02111

PROXY STATEMENT

GENERAL INFORMATION

Why am I receiving these materials?

State Street’s Board of Directors is soliciting your vote by proxy at the 2012 annual meeting of shareholders. This proxy statement includes information that we are required to provide to you under the rules of the Securities and Exchange Commission, or SEC, and that is designed to assist you in voting your shares.

Can I access State Street’s proxy materials and annual report electronically?

As permitted by SEC rules, we are making this proxy statement and our annual report, including our consolidated financial statements for the year ended December 31, 2011, available to our shareholders over the Internet. On April 5, 2012, we mailed our U.S. shareholders as of the record date for the annual meeting, March 15, 2012, a notice containing instructions on how to access these proxy materials online and how to vote. Also on April 5, 2012, we began mailing printed copies of these proxy materials to shareholders that have requested printed copies and to shareholders outside the United States. If you received a notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you request a copy. Instead, the notice instructs you on how to access and review online all of the important information contained in the proxy statement and annual report. The notice also instructs you on how you may submit your proxy over the Internet. If you received a notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the notice.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on May 16, 2012.

The proxy statement and annual report, and the means to vote electronically, are available at www.proxyvote.com. To view this material, you must have available the 12-digit control number located on the notice mailed on April 5, 2012 or the proxy card or, if shares are held in the name of a broker, bank or other nominee, the voting instruction form.

How do I request a printed copy of the proxy materials for future shareholder meetings?

To request a printed copy of the proxy statement, annual report and form of proxy relating to our future shareholder meetings, visit www.proxyvote.com, telephone 1-800-579-1639 or send an email to sendmaterial@proxyvote.com. You must have available the 12-digit control number described above.

What are the directions to the meeting?

Directions to the meeting are as follows:

From the North:

Take Expressway (I-93) South to exit 20 (Purchase Street/South Station) and follow the signs for South Station. Follow exit ramp and cross Summer Street. Turn right onto Lincoln Street. Take first left onto Bedford Street. Take first left onto Kingston Street. Entrance to the garage is on the left.

From the South:

Take Expressway (I-93) North to exit 20 (South Station). Bear left at the ramp to South Station/Chinatown. You will see State Street Financial Center directly ahead. You will be on Lincoln Street. Follow Lincoln

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Street through the major intersection at the lights (pass the entrance to the building). Take left onto Bedford Street. Take first left onto Kingston Street. Entrance to the garage is on the left.

From the West:

Take Mass Turnpike (I-90) to exit 24A (South Station). Turn left on Kneeland Street towards Chinatown. Turn right onto Lincoln Street at the light. Follow Lincoln Street through the major intersection at the lights (pass the entrance to the building). Take left onto Bedford Street. Take first left onto Kingston Street. Entrance to the garage is on the left.

Via Massachusetts Bay Transportation Authority:

Take the MBTA Red Line train to the South Station MBTA stop. Exit the train station and walk across Atlantic Avenue (towards Summer Street and Federal Street). Follow Summer Street to Lincoln Street.

What is the record date for the meeting?

Our Board of Directors has fixed the record date for the annual meeting as of the close of business on March 15, 2012.

How many votes can be cast by all shareholders?

As of the record date, 489,928,399 shares of our common stock were outstanding and entitled to be voted at the meeting. Each share of common stock is entitled to one vote on each matter.

How do I vote?

If your shares are registered in your name, you may vote in person at the annual meeting or by proxy without attending the meeting. Registered shareholders may also vote by telephone or over the Internet by following the instructions included with your proxy card or the notice we mailed to you on April 5, 2012. In addition, if you received a printed proxy card, you may mark, sign, date, and mail the proxy card you received from State Street in the postage-paid return envelope. If you vote by any of the available methods, your shares will be voted at the meeting in accordance with your instructions. If you sign and return the proxy card or vote by telephone or over the Internet but do not provide voting instructions on some or all of the proposals, your shares will be voted by the persons named in the proxy card on all uninstructed proposals in accordance with the recommendations of the Board of Directors given below.

If your shares are held in “street name” by a broker, bank or other nominee, that person, as the record holder of your shares, is required to vote your shares according to your instructions. Your bank, broker or other nominee will send you directions on how to vote those shares, which may include the ability to instruct the voting of your shares by telephone or over the Internet.

If your shares are held by a broker, bank or other nominee and you wish to vote in person at the meeting, you must obtain from the record holder, and bring with you to the meeting, a proxy from the record holder issued in your name. Please note that this proxy from the record holder is in addition to the picture identification and proof of beneficial ownership required for your admission into the meeting.

What are the Board’s recommendations on how to vote my shares?

The Board of Directors recommends a vote:

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Additionally, if other matters are presented at the annual meeting, the persons named in the proxy card as proxy holders are authorized to vote on the additional matters as they determine.

Who pays the cost for soliciting proxies by State Street?

State Street will pay the cost for the solicitation of proxies by the Board. That solicitation of proxies will be made primarily by mail and electronic means. State Street has retained Georgeson Inc. to aid in the solicitation of proxies for a fee of $19,000, plus expenses. Proxies may also be solicited by employees of State Street and its subsidiaries personally, or by mail, telephone, fax or e-mail, without any remuneration to such employees other than their regular compensation. State Street will reimburse brokers, banks, custodians, other nominees and fiduciaries for forwarding these materials to their principals to obtain authorization for the execution of proxies.

What is householding?

Some banks, brokers and other nominee record holders may be “householding” our proxy statements, annual reports and related materials. “Householding” means that only one copy of these documents may have been sent to multiple shareholders in one household. If you would like to receive your own set of State Street’s proxy statements, annual reports and related materials, or if you share an address with another State Street shareholder and together both of you would like to receive only a single set of these documents, please contact your bank, broker or other nominee.

May I change my vote?

If you are a registered shareholder, you may revoke or change your proxy at any time before it is voted by notifying the Secretary in writing, by returning a signed proxy with a later date or submitting an electronic proxy as of a later date or by attending the meeting and voting in person. If your shares are held in street name, you must contact your bank, broker or other nominee for instructions on changing your vote.

What constitutes a quorum?

A majority of the votes entitled to be cast on a matter constitutes a quorum for action on that matter. A share once represented for any purpose at the annual meeting will be deemed present for determination of a quorum for the entire meeting and for any adjournment of the meeting (unless (1) a shareholder attends solely to object to lack of notice, defective notice or the conduct of the meeting on other grounds, and the shareholder does not vote the shares or otherwise consent that they are to be deemed present, or (2) in the case of an adjournment, a new record date is set for that adjourned meeting).

What vote is required to approve each item?

Since it is an uncontested election of directors at the annual meeting, a nominee for director will be elected to the Board of Directors if the votes cast “for” the nominee’s election exceed the votes cast “against” the nominee’s election (Item 1). If the votes cast “against” the nominee’s election exceed the votes cast “for” the nominee’s election, the nominee will not be elected to the Board of Directors. However, under Massachusetts law, if a nominee that is an incumbent director is not elected to the Board of Directors, that incumbent director will “hold over” in office as a director until his or her successor is elected or until there is a decrease in the number of directors. All of the 12 nominees for director are incumbent directors. Under our Corporate Governance Guidelines, in an uncontested election of directors, any director/nominee who does not receive more votes cast “for” his or her election than votes cast “against” his or her election, will submit to the Board a letter

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of resignation for consideration by the Nominating and Corporate Governance Committee. After consideration, that committee would make a recommendation to the Board on action to be taken regarding the resignation. No such tendered resignation will be deemed effective unless and until it is accepted by action of the Board.

The actions concerning the advisory proposal on executive compensation (Item 2) and the ratification of the selection of the independent registered public accounting firm (Item 4) will be approved if the votes cast “for” the action exceed the votes cast “against” the action. Item 2 is a non-binding proposal.

Under NYSE rules, approval of the amended and restated 2006 equity incentive plan (Item 3) requires that: (1) a majority of the common stock issued, outstanding and entitled to vote at the 2012 annual meeting must actually vote on the matter (with abstentions counting as votes and broker non-votes not counting as votes) and (2) votes in favor must constitute at least a majority of the votes cast (with abstentions counting as votes cast and broker non-votes not counting as votes cast).

How is the vote counted?

Votes cast by proxy or in person at the annual meeting will be counted by the persons appointed by State Street to act as tellers for the meeting.

Except as provided above with respect to Item 3, “abstentions” and “broker non-votes” are not counted as votes with respect to any of the items to be voted on at the annual meeting.

If you hold shares through a broker, bank or other nominee, generally the nominee may vote the shares for you in accordance with your instructions. Stock exchange rules permit a broker to vote shares held in a brokerage account on “routine” proposals if the broker does not receive voting instructions from you. Stock exchange and SEC rules, however, prohibit brokers from voting uninstructed shares in the election of directors and executive compensation matters, including the advisory proposal on executive compensation and the proposal on the amendments to the 2006 equity incentive plan. Accordingly, of the matters to be voted on at the 2012 Annual Meeting, the only “routine” proposal is the ratification of the selection of the independent registered accounting firm (Item 4).

Could other matters be decided at the meeting?

We do not know of any matters that may be properly presented for action at the meeting other than Items 1 through 4. Under our by-laws, the deadline for shareholders to notify us of any proposals or director nominations to be presented for action at the 2012 Annual Meeting has passed. However, should any other business properly come before the meeting, the persons named on the enclosed proxy will have discretionary authority to vote the shares represented by such proxies in accordance with their best judgment.

What happens if the meeting is postponed or adjourned?

Your proxy may be voted at the postponed or adjourned meeting. You will still be able to change your proxy until it is voted.

What are my rights as a participant in the Salary Savings Program?

As part of its employee benefits program, State Street maintains a Salary Savings Program, or SSP. If you participate in the SSP with company stock in the SSP and have invested part or all of your account in the Employee Stock Ownership Plan fund as of the record date, you may direct the trustee how to vote your allocated share of State Street Corporation common stock held in your SSP account. You may give the trustee direction over the Internet, by telephone or by mail. If you do not provide timely direction to the trustee as to how to vote your allocated share, the trustee will vote your allocated share on the same proportional basis as the shares that

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are directed by other participants. If a matter arises at the meeting, or such other time as affords no practical means for securing participant direction, the trustee will follow the direction of State Street, unless the trustee determines that doing so would result in a breach of the trustee’s fiduciary duty.

You must direct the trustee in advance of the meeting so that the trustee, the registered owner of all of the shares held in the SSP, can vote in a timely way. Regardless of what method you use to direct the trustee, the trustee must receive your direction no later than 11:59 p.m. Eastern Time on May 14, 2012 for your direction to be counted. Your direction will be held in confidence by the trustee. You may not provide this direction at the annual meeting. You may change your direction to the trustee by timely submitting a new direction. The last direction the trustee receives by 11:59 p.m. Eastern Time on May 14, 2012, will be the only one counted. If your direction by mail is received on the same day as one received electronically, the electronic direction will be followed.

The trustee is providing the annual report and the notice of annual meeting and proxy statement electronically to SSP participants with company stock in the SSP who are active employees and have a company-provided e-mail account and Internet access. Instead of receiving these materials in paper form mailed to your home, you will have on-line access to these materials over the Internet, thus expediting the delivery of materials and reducing printing and mailing costs. An e-mail will be sent to all such participants with detailed instructions to access materials and give your direction to the trustee. You may request that paper copies be sent to you, thereby permitting you to send in your direction by mail if you prefer that method. All other participants will receive their materials in the mail.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Beneficial Owners

The table below sets forth the number of shares of common stock of State Street beneficially owned as of the close of business on December 31, 2011 by each person or entity known to State Street to beneficially own more than 5% of our outstanding common stock.

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Management

The table below sets forth the number of shares of common stock of State Street beneficially owned as of the close of business on March 1, 2012 by (1) each director, (2) the named executive officers for the year ended December 31, 2011, as identified in the Summary Compensation Table on page 55 of this proxy statement, and (3) all current directors and executive officers as a group. For this purpose, beneficial ownership is determined under the rules of the SEC. As of March 1, 2012, there were 489,859,443 shares of State Street common stock outstanding. On March 1, 2012, neither the current executive officers or directors listed below individually, nor those individuals as a group, owned beneficially as much as 1% of the outstanding shares of common stock.

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ITEM 1 – ELECTION OF DIRECTORS

The Board of Directors unanimously recommends that you vote

FOR

each of the nominees for director

Each director elected at the 2012 annual meeting will serve until the next annual meeting of shareholders, except as otherwise provided in State Street’s by-laws. Prior to the 2012 annual meeting, the State Street Board of Directors will consist of 13 members. Effective as of the 2012 annual meeting, the State Street Board of Directors will consist of 12 members. Of the 12 director nominees, 11 are non-management directors and one is the chief executive officer of State Street. All of the non-management directors are independent directors, as determined by the Board in its opinion, under the applicable definition in the New York Stock Exchange, or NYSE, listing standards and the State Street Corporate Governance Guidelines.

Pursuant to State Street’s by-laws, on February 16, 2012, the Board fixed the number of directors at 12 effective as of the 2012 annual meeting. Each of the nominees for election as a director is currently a director. Unless contrary instructions are given, shares represented by proxies solicited by the Board of Directors will be voted for the election of the 12 nominees listed below as directors. We have no reason to believe that any nominee will be unavailable for election at the annual meeting. In the event that one or more nominees is unexpectedly not available to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of directors to be elected at the annual meeting. Information relating to each nominee for election as director is described below, including:

See “Corporate Governance at State Street—Composition of the Board and Director Selection Process” on page 26 of this proxy statement for a further discussion of the Board’s process and reasons for nominating these candidates.

Board Roles: Lead Director; and Executive Committee

Career Highlights and Community Involvement

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Qualifications and Attributes

Mr. Burnes’ significant experience in leading a global organization, with facilities and operations in approximately 20 countries, brings to State Street’s Board a focus on developing new products and new businesses in diverse, international environments. Prior to joining Cabot Corporation in 1987, Mr. Burnes was a partner at the Boston-based law firm of Choate, Hall & Stewart where he practiced corporate and business law for nearly 20 years. Mr. Burnes obtained experience in evaluating complex legal issues that arise in the types of material transactions boards of directors are called on to consider, including mergers and acquisitions and financing transactions. Mr. Burnes holds both an LL.B. and B.A. degree from Harvard University.

Board Roles: Examining and Audit Committee; and Nominating and Corporate Governance Committee

Career Highlights and Community Involvement

Qualifications and Attributes

A German citizen, Dr. Coym’s more than 35 years of experience in investment banking, based primarily in Europe, provides, among other things, insight into the complexities and trends within and influencing the financial services industry, including its participants, customers and regulators, particularly in a region of strategic importance to State Street. Dr. Coym, through his broad advisory experience in foreign markets, brings to the Board an international perspective on the factors motivating and affecting major corporate strategic and financing transactions and product development initiatives. Dr. Coym received an undergraduate degree and a Ph.D. in business studies from The University of Hamburg.

Board Roles: Risk and Capital Committee

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Qualifications and Attributes

Mr. de Saint-Aignan’s extensive experience in risk management, corporate finance, capital markets and firm management brings to the Board a sophisticated understanding of risk, particularly with respect to the implementation of risk evaluation and monitoring programs within a global financial services organization. Mr. de Saint-Aignan’s service on the board of directors and committees of several other companies give him additional perspective on global management and governance. A dual citizen of the United States and France, he was honored with Risk Magazine's Lifetime Achievement Award in 2004. Mr. de Saint-Aignan holds his B.B.A. degree from the Ecole des Hautes Etudes Commerciales and an M.B.A. from Harvard University.

Board Roles: Executive Committee; Executive Compensation Committee; and Risk and Capital Committee (Chair)

Career Highlights and Community Involvement

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Qualifications and Attributes

Dame Amelia Fawcett, a dual American and British citizen, has many years of extensive and diverse financial services experience. At Morgan Stanley, she had responsibility for development and implementation of the company's business strategy (including business integration), as well as oversight of the company’s operational risk functions, infrastructure support and corporate affairs. Prior to joining Morgan Stanley, she was an attorney at the New York-based law firm of Sullivan & Cromwell, practicing primarily in the areas of corporate and banking law in both New York and Paris. In 2002 Dame Amelia was awarded a CBE (Commander of the Order of the British Empire) by the Queen and in 2010 she was awarded a DBE (Dame Commander of the Order of the British Empire) by the Queen, in both instances for services to the finance industry. In addition, she received His Royal Highness The Prince of Wales' Ambassador Award in 2004, an award recognizing responsible business activities that have a positive impact on society and the environment. Dame Amelia’s public policy experience and experience in the European banking markets provides a valuable international financial markets perspective to Board. Dame Amelia received a B.A. degree from Wellesley College, a J.D. degree from the University of Virginia and an honorary degree from the American University in London (Richmond).

Board Roles: Examining and Audit Committee; and Risk and Capital Committee

Career Highlights and Community Involvement

Qualifications and Attributes

As the former Chairman, Chief Executive Officer, President and Chief Operating Officer of Wyman-Gordon, Mr. Gruber offers an in-depth understanding of management and operations for a large, complicated organization outside the financial services industry. Mr. Gruber’s background, technical experience and tenure on State Street’s Board provide a unique perspective on the opportunities and challenges presented to the company’s businesses through market cycles and trends as well as the company’s operations and strategic direction. He has a B.S. degree from Ohio State University.

Board Roles: Executive Compensation Committee; and Nominating and Corporate Governance Committee

Career Highlights and Community Involvement

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Qualifications and Attributes

Ms. Hill is the author of several books and articles focusing on the principles and qualifications for effective leadership and management. Through her research and academic perspectives, affiliation with Harvard Business School, and experience as a public company director, Ms. Hill brings to the Board an effective understanding of market and competitive trends in executive talent development and corporate governance matters. Ms. Hill received an A.B. degree in psychology from Bryn Mawr College, an M.A. in educational psychology from the University of Chicago, and a Ph.D. in behavioral sciences from the University of Chicago and completed her post-doctoral research fellowship at the Harvard Business School.

Board Roles: Chairman of the Board; Executive Committee (Chair); and Risk and Capital Committee

Career Highlights and Community Involvement

Qualifications and Attributes

Mr. Hooley joined State Street in 1986 and has served in various executive positions since joining the Company. In his various roles at State Street, Mr. Hooley has been responsible for all of State Street’s asset servicing and trading activities worldwide and has served on, and now chairs, the company’s Management Committee, which is comprised of the most senior policy-making officers. Mr. Hooley’s leadership experience and core understanding of the company’s full range of services brings to the Board a detailed and thorough perspective on the company’s key operations, strategic initiatives and customer relationships globally. He received his Bachelor of Science degree from Boston College.

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Board Roles: Executive Compensation Committee; and Nominating and Corporate Governance Committee

Career Highlights and Community Involvement

Qualifications and Attributes

As a professor of management practice at Harvard Business School, and through his broad range of financial services experience while at Goldman Sachs and other roles in the industry, Mr. Kaplan adds to the Board a multi-faceted, regionally diverse and practical knowledge of financial, operational and regulatory issues within the financial services industry. Mr. Kaplan’s commitment to community service is represented by his extensive service to several not-for-profit organizations. Mr. Kaplan received his B.S. from the University of Kansas and an M.B.A. from Harvard University and also was previously employed as a Certified Public Accountant for Peat Marwick Mitchell & Co.

Board Roles: Executive Committee; Executive Compensation Committee (Chair); and Examining and Audit Committee

Career Highlights and Community Involvement

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Qualifications and Attributes

Mr. Sergel’s responsibilities as Chief Executive Officer of the North American Electric Reliability Corporation included imposing statutory responsibility and regulating the industry through adoption and enforcement of standards and practices. To do so, he led NERC to establish the first set of legally enforceable standards for the U.S. bulk power system. Prior to joining NERC, he spent twenty-five years with the New England Electric System, where he oversaw the merger with National Grid in 2000. His extensive practical and technical expertise in navigating the energy market through regulatory change and major transactions offers to the Board important perspective on the evolving financial services industry and regulatory environment. Mr. Sergel received a B.S. degree from Florida State University, an M.S. from North Carolina State University, and an M.B.A. from the University of Miami. He served in the United States Air Force reserve from 1973 to 1979.

Board Roles: Examining and Audit Committee (Chair); Executive Committee; Nominating and Corporate Governance Committee; and Risk and Capital Committee

Career Highlights and Community Involvement

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Qualifications and Attributes

Mr. Skates currently is a private investor. His management experience for a large information technology company, combined with his extensive accounting background and board service for varied and significant organizations, provides the State Street Board with a balanced and detailed insight into the Company’s operations, organization and administration. He holds B.A. (cum laude) and M.B.A. degrees from Harvard University.

Board Roles: Executive Committee; and Nominating and Corporate Governance Committee (Chair)

Career Highlights and Community Involvement

Qualifications and Attributes

Mr. Summe has extensive management experience leading large and complex corporate organizations in evolving environments. In particular, at PerkinElmer he led that company’s transformation from a diversified defense contractor to a technology leader in health sciences. His experience in private equity since PerkinElmer has afforded him a deepened exposure to understanding varied business models, practices, strategies and environments and assessing value in varied international regions. At the Carlyle Group, he is responsible for buyout funds in financial services, infrastructure, Japan, the Middle East and Africa. Mr. Summe holds B.S. and M.S. degrees in electrical engineering from the University of Kentucky and the University of Cincinnati, and an M.B.A. with distinction from the Wharton School of the University of Pennsylvania. He has published a number of articles in the Harvard Business Review, Electronic Business, and various technical journals and is in the Engineering Hall of Distinction at the University of Kentucky.

Board Roles: Executive Compensation Committee

Career Highlights and Community Involvement

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Qualifications and Attributes

Mr. Weissman is State Street’s longest serving director, and with this experience provides a firm understanding of the development and evolution of State Street’s products, services and client base, as well as perspective on the businesses’ reaction to market cycles. In addition, his background in information technology and service on the boards of directors of other public companies offers valuable technical and governance insight. Mr. Weissman received a degree in Business Administration and an honorary Doctor of Laws degree from Babson College.

Charles R. LaMantia is retiring as a director at the annual meeting. Dr. LaMantia, age 72, is the former Chairman and Chief Executive Officer of Arthur D. Little, Inc., a worldwide professional service company and has served as a director of State Street since 1993.

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ITEM 2 – APPROVAL OF ADVISORY PROPOSAL ON EXECUTIVE COMPENSATION

The Board of Directors unanimously recommends that you vote

FOR

this proposal (Item 2 on your proxy card)

The Board of Directors recommends that shareholders approve the advisory proposal on executive compensation set forth below. Unless contrary instructions are given, shares represented by proxies solicited by the Board will be voted for the approval of the advisory proposal. This is the fourth consecutive year that our shareholders have had the opportunity to vote on an advisory proposal on executive compensation. In each of the past three years, the “say-on-pay” vote was approved by a significant majority of the votes cast.

The goals of State Street’s compensation program for executive officers are to attract, retain and motivate superior executives and reward them for meeting short-term and long-term financial and strategic goals, and to drive long-term shareholder value and financial stability, in a manner aligned with appropriate risk management principles. Our executive compensation program is described below in this proxy statement under the heading “Executive Compensation – Compensation Discussion and Analysis.”

The advisory vote is provided in accordance with Section 14A of the Securities Exchange Act of 1934, or the Exchange Act, and is non-binding. The outcome of this advisory vote does not overrule any decision by State Street or the Board of Directors (or any of its committees), create or imply any change to the fiduciary duties of State Street or the Board of Directors (or any of its committees), or create or imply any additional fiduciary duties for State Street or the Board of Directors (or any of its committees). Although non-binding, the Executive Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements. Currently, the Board of Directors has determined that State Street will hold an annual advisory vote on executive compensation.

The text of the proposal presented for your approval is as follows:

ITEM 3 – APPROVAL OF AMENDED AND RESTATED 2006 EQUITY INCENTIVE PLAN

The Board of Directors unanimously recommends that you vote

FOR

this proposal (Item 3 on your proxy card)

The Board of Directors recommends that shareholders approve the Board’s proposal to amend and restate our 2006 equity incentive plan to increase by 15.5 million the maximum number of shares of our common stock that may be delivered in satisfaction of awards under the plan and to make the other updates described below. Unless contrary instructions are given, shares represented by proxies solicited by the Board will be voted for the approval of the amended and restated 2006 equity incentive plan.

In February 2012, the Board approved, subject to shareholder approval, the amended and restated 2006 equity incentive plan. The purpose of the plan is to advance State Street’s interests providing for the grant to plan participants of stock-based awards. We are asking our shareholders to approve the amended and restated plan to increase the maximum number of shares available under the plan and to make other updating amendments

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detailed in the description below. The plan was first approved by shareholders in 2006, with 20 million shares, plus up to 8 million shares derived from our prior stock plans, available for delivery in satisfaction of awards under the plan. The plan was amended by our shareholders in 2009 to add 17 million shares for delivery in satisfaction of awards granted under the plan and to make additional updating amendments. As of March 1, 2012, we had delivered 16,207,484 shares, with an additional 25,031,518 shares subject to outstanding awards or related restrictions under the plan.

Summary of Proposed Amendments

The material changes implemented by the proposed amendment and restatement of the 2006 equity incentive plan are as follows:

Securities Authorized for Issuance Under Equity Compensation Plans at March 1, 2012

As indicated above, at March 1, 2012 we had a total of 25,031,518 shares, subject to outstanding awards or related restrictions under the 2006 equity incentive plan. The following table sets forth the number of shares of our common stock subject to outstanding awards and available for future grant under all State Street equity compensation plans (including the 2006 equity incentive plan) as of March 1, 2012, as well as the total number of shares of our common stock that were outstanding as of that date. The table does not include the additional shares that are the subject of the proposed amendment and restatement of the 2006 equity incentive plan being presented for shareholder approval at the annual meeting.

For additional information concerning our securities authorized for issuance under our equity compensation plans at December 31, 2011, see below under the heading “– Securities Authorized for Issuance Under Equity Compensation Plans at December 31, 2011.”

Description of the 2006 Equity Incentive Plan, as Proposed to be Amended and Restated

The following is a summary of the material features of the amended and restated 2006 equity incentive plan, which summary is qualified in its entirety by reference to the entire plan. The summary includes the amendments identified above under “– Summary of Proposed Amendments.” A copy of the entire plan is attached as Appendix A to this proxy statement.

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The purpose of the plan is to advance State Street’s interests by providing for the grant to participants of awards based on State Street’s common stock, as more fully described below. The amendment and restatement of the plan will become effective on the date of its approval by the shareholders. The plan will terminate on the tenth anniversary of such shareholder approval, except that awards made prior to termination may continue in accordance with their terms.

Administration. A committee of the Board, currently the Executive Compensation Committee, will administer the plan. The term “administrator” is used in this proxy statement to refer to the person (the Executive Compensation Committee or other committee, and their delegates) charged with administering the plan. The administrator has full authority to determine who will receive awards and to determine the types of awards to be granted as well as the amounts, terms, and conditions of any awards. Awards may be in the form of options, stock appreciation rights, or SARs, restricted or unrestricted stock, stock units or performance awards or other awards that are convertible into or otherwise based on State Street’s common stock. The administrator has the right to determine any questions that may arise regarding the interpretation and application of the provisions of the plan and to make, administer, and interpret such rules and regulations as it deems necessary or advisable. Determinations of the administrator made under the plan are conclusive and bind all parties.

Limits on Shares Deliverable under the Plan; Limits on Awards. The maximum number of shares of common stock that may be delivered in satisfaction of awards made under the plan is 52.5 million plus the number (not to exceed 8 million) of shares subject to awards outstanding under State Street’s 1997 equity incentive plan that are either forfeited (in the case of restricted stock) or never delivered (for example, because an option expires unexercised) on or after April 19, 2006 (the date the 2006 equity incentive plan was approved by our shareholders and became effective). Shares withheld to pay the exercise price or to satisfy tax withholding requirements, restricted stock that is forfeited, and shares subject to an award that is exercised or satisfied, or that terminates or expires, without the delivery of the shares do not reduce the maximum number of shares available for delivery under the plan. The maximum number of shares of common stock for which stock options may be granted to any person in any calendar year and the maximum number of shares of common stock subject to SARs granted to any person in any calendar year is in each case 2 million. The maximum number of shares of common stock subject to other awards granted to any person in any calendar year is 2 million. In the event of a stock dividend, stock split or other change in our capital structure, the administrator will make appropriate adjustments to the limits described above and will also make appropriate adjustments to the number and kind of shares of stock or securities subject to awards, any exercise prices relating to awards and any other provisions of awards affected by the change. The administrator may also make similar adjustments to take into account other distributions to shareholders or any other event, if the administrator determines that adjustments are appropriate to avoid distortion in the operation of the plan and to preserve the value of awards.

The closing price of State Street common stock, as reported on the New York Stock Exchange on March 1, 2012, was $42.42 per share.

Eligibility. Participation is limited to those key employees and directors, as well as consultants and advisors, who in the administrator’s opinion are in a position to make a significant contribution to the success of State Street and its subsidiaries and who are selected by the administrator to receive an award. As of March 5, 2012, the group of persons from which the administrator may select participants consisted of approximately 8,800 individuals.

Stock Options. The administrator may from time to time award options to any participant subject to the limitations described above. Stock options give the holder the right to purchase shares of common stock within a specified period of time at a specified price, not less than the fair market value of the common stock at the time of grant. Stock options granted under the plan may not be repriced other than in accordance with the applicable stockholder approval requirements of the New York Stock Exchange. Two types of stock options may be granted under the plan: incentive stock options, or “ISOs”, which are subject to special tax treatment as described below, and nonstatutory options, or “NSOs”. Eligibility for ISOs is limited to employees of State Street and its corporate subsidiaries.

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The expiration date of an ISO cannot be more than ten years after the date of the original grant. In the case of NSOs, the expiration date is determined in the discretion of the administrator. The administrator also determines all other terms and conditions related to the exercise of an option, including the time at which options may be exercised and conditions related to the exercise of options.

Stock Appreciation Rights. The administrator may grant SARs under the plan. A SAR entitles the holder upon exercise to receive an amount, delivered in the form of shares of common stock, determined by reference to appreciation in the value of a share of common stock. The value from which appreciation is measured in the case of a SAR may not be less than the fair market value of the common stock on the date of grant. No SAR, once granted, may be repriced other than in accordance with the applicable stockholder approval requirements of the New York Stock Exchange.

Stock Awards; Stock Units. The plan provides for awards of nontransferable shares of restricted common stock, as well as unrestricted shares of common stock. Awards of restricted stock and unrestricted stock may be made in exchange for past services or other lawful consideration. Generally, awards of restricted stock are subject to the requirement that the shares be forfeited or resold to State Street unless specified conditions are met. Subject to these restrictions, conditions and forfeiture provisions, any recipient of an award of restricted stock will have all the rights of a State Street shareholder, including the right to vote the shares and to receive dividends. Other awards under the plan may also be settled with restricted stock. The plan also provides for stock units, including restricted stock units, entitling the recipient to receive shares of common stock (or cash measured by the value of the common stock) in the future on such conditions as the administrator may specify.

Performance Awards. The administrator may also subject awards otherwise available under the plan to the satisfaction of specified performance criteria. The performance criteria used in connection with a particular performance award will be determined by the administrator. In the case of performance awards intended to qualify for exemption under Section 162(m) of the Internal Revenue Code of 1986 as amended, the administrator will use one or more objectively determinable measures of performance relating to any or any combination of the following (measured either absolutely or by reference to an index or indices and determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof): sales; revenue; assets; expenses; expense control; earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets; capital or capital ratios; one or more operating ratios; operating leverage; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price; shareholder return; sales of particular products or services; customer acquisition or retention; acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and the like; reorganizations; or recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings. A performance criterion and any targets with respect thereto determined by the administrator need not be based upon an increase, a positive or improved result or avoidance of loss. To the extent consistent with the requirements for satisfying the performance-based compensation exception under Section 162(m) of the Internal Revenue Code, the administrator may provide in the case of any award intended to qualify for such exception that one or more of the performance criteria applicable to such award will be adjusted in an objectively determinable manner to reflect events (for example, but without limitation, acquisitions or dispositions, changes in accounting principles or interpretations, impairment charges) occurring during the performance period that affect the applicable performance criterion or criteria. No performance award may be granted after State Street’s first meeting of shareholders held in 2017 until the listed performance measures (as originally approved or as subsequently amended) have been resubmitted to and reapproved by State Street’s shareholders in accordance with the requirements of Section 162(m) of the Internal Revenue Code, unless such grant is made contingent upon such approval.

Plan Benefits. The future benefits or amounts that would be received under the plan are discretionary and are therefore generally not determinable at this time. The following individuals and groups of individuals currently serving in office have received the following awards under the plan, stated in aggregate number of shares of common stock underlying options/SARs, performance based awards and other awards, since its

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inception in 2006 and as subsequently amended by shareholders in 2009: Joseph L. Hooley, Chairman, President and Chief Executive Officer, 349,000 options/SARs and 1,013,766 other awards; Edward J. Resch, Executive Vice President and Chief Financial Officer, 226,373 options/SARs and 596,350 other awards; Joseph C. Antonellis, Vice Chairman, 277,545 options/SARs and 576,711 other awards; James S. Phalen, Executive Vice President, 132,989 options/SARs and 560,603 other awards; Scott F. Powers, Executive Vice President, 139,346 options/ SARs and 680,979 other awards; all current executive officers, as a group, 1,278,057 options/SARs and 5,079,420 other awards; all current directors who are not executive officers, as a group, no options/SARs and 182,707 other awards; and all employees, including all current officers who are not executive officers, as a group, 1,199,020 options/SARs and 33,752,926 other awards.

General Provisions Applicable to All Awards. Neither ISOs nor, except for gratuitous transfers to the extent permitted by the administrator, other awards may be transferred other than by will or by the laws of descent and distribution. During a recipient’s lifetime an ISO and, except as the administrator may provide, other non-transferable awards requiring exercise may be exercised only by the recipient. Shares delivered under the plan may consist of either authorized but unissued shares or previously issued shares acquired by State Street.

Mergers and Similar Transactions. In the event of a “change in control” of State Street, as defined in the plan, all options and SARs issued under the plan will become fully exercisable, all shares of restricted stock and restricted stock units will vest, and holders of performance awards as to which the performance period has not ended will (if the transaction involves a payment to shareholders) be cashed out. If options and SARs are granted in substitution for existing awards, the substitute awards will remain exercisable after a termination of employment or other service relationship (other than by reason of death or disability) or retirement for the lesser of the period of seven months or the period ending on the latest date on which the option or SAR could otherwise have been exercised. Also, in connection with or following a change in control, awards may not be amended in any manner adverse to the participant without the participant’s consent.

Whether or not there is a change in control, as defined, in the event of a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition of stock, in which State Street is not the surviving corporation or which results in the acquisition of all or substantially all of State Street’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, a sale or transfer of all or substantially all of State Street’s assets, or a dissolution or liquidation of State Street, the following rules will apply except as otherwise provided in an award. If the transaction is one in which there is an acquiring or surviving entity, the administrator may provide for the assumption of some or all outstanding awards or for the grant of new awards in substitution therefore by the acquirer or survivor or an affiliate of the acquirer or survivor. If the transaction is one in which holders of common stock will receive upon consummation a payment (whether cash, non-cash or a combination of the foregoing), the administrator may likewise cash out some or all awards, except that the terms of payment need not be the same as those applicable to holders of common stock. If the transaction (whether or not there is an acquiring or surviving entity) is one in which there is no assumption, substitution or cash-out, awards will become payable, except that the administrator may impose restrictions on amounts payable to carry out the intent of the plan (subject to the requirement of full vesting if the transaction constitutes a change in control). Existing awards requiring exercise, unless assumed, will terminate upon completion of the transaction.

Amendment. The administrator may at any time or times amend the plan or any outstanding award for any purpose which may at the time be permitted by law, and may at any time terminate the plan as to any future grants of awards. The administrator may not, however, alter the terms of an award so as to affect materially and adversely the participant’s rights under the award without the participant’s consent, unless the terms of the plan so provide or the administrator expressly reserved the right to do so at the time of the award.

Non-U.S. Participants: The administrator may provide for special rules applicable to non-U.S. participants.

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Securities Authorized for Issuance Under Equity Compensation Plans at December 31, 2011

The following table discloses the number of outstanding common stock options, warrants and rights granted by State Street to participants in equity compensation plans, as well as the number of securities remaining available for future issuance under these plans, as of December 31, 2011. The table provides this information separately for equity compensation plans that have and have not been approved by shareholders. The table does not include the additional shares that are the subject of the proposed amendment and restatement of the 2006 equity incentive plan being presented for shareholder approval at the annual meeting.

Individual directors who are not our employees have received stock awards and cash retainers, both of which may be deferred. Directors may elect to receive shares of our common stock in place of cash. If payment is in the form of common stock, the number of shares is determined by dividing the approved cash amount by the closing price on the date of the annual shareholders' meeting. All deferred shares, whether stock awards or common stock received in place of cash retainers, are increased to reflect dividends paid on the common stock and, for certain directors, may include share amounts in respect of an accrual under a terminated retirement plan. Directors may elect to defer 50% or 100% of cash or stock awards until a date that they specify, usually after termination of service on the Board. The deferral may also be paid in either a lump sum or in installments over a two- to ten-year period. Stock awards totaling 212,643 shares of common stock were outstanding at December 31, 2011; awards made through June 30, 2003, totaling 41,737 shares outstanding at December 31, 2011, have not been approved by shareholders. There are no other equity compensation plans under which our equity securities are authorized for issuance that have been adopted without shareholder approval. Awards of stock made or retainer shares paid to individual directors after June 30, 2003 have been or will be made under our 1997 or 2006 Equity Incentive Plan, both of which were approved by shareholders.

Federal Income Tax Effects

The following discussion summarizes certain United States federal income tax consequences of the issuance and receipt of awards under the plan under the law as in effect on the date of this proxy statement. Changes to these tax laws could alter the tax consequences described below. This summary assumes that all awards are exempt from, or comply with, the rules under Section 409A of the Code related to nonqualified deferred compensation. The summary does not purport to cover federal employment tax or other federal tax consequences that may be associated with the plan, nor does it cover state, local or non-U.S. taxes.

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ISOs. An optionee realizes no taxable income upon the grant or, for regular tax purposes, upon the exercise of an ISO. However, the exercise of an ISO may result in an alternative minimum tax liability to the optionee. With certain exceptions, a disposition of shares purchased under an ISO within two years from the date of grant or within one year after exercise produces ordinary income to the optionee (and a deduction to State Street) equal to the value of the shares at the time of exercise less the exercise price. Any additional gain recognized in the disposition is treated as a capital gain to the optionee for which State Street is not entitled to a deduction. If the optionee does not dispose of the shares until after the expiration of these one- and two-year holding periods, any gain or loss to the optionee recognized upon a subsequent sale is treated as a long-term capital gain or loss for which State Street is not entitled to a deduction.

NSOs. In general, in the case of a NSO, the optionee has no taxable income at the time of grant but realizes income in connection with exercise of the option in an amount equal to the excess (at the time of exercise) of the fair market value of the shares acquired upon exercise over the exercise price; a corresponding deduction is available to State Street; and upon a subsequent sale or exchange of the shares, any recognized gain or loss after the date of exercise is treated as capital gain or loss to the optionee for which State Street is not entitled to a deduction.

In general, an ISO that is exercised by the optionee more than three months after termination of employment is treated as an NSO. ISOs are also treated as NSOs to the extent they first become exercisable by an individual in any calendar year for shares having a fair market value (determined as of the date of grant) in excess of $100,000.

Stock Appreciation Rights. A recipient of a stock appreciation right will not have income upon grant of the SAR. The recipient generally will recognize compensation income upon the exercise of the SAR equal to the amount of cash and the fair market value of any stock received; a corresponding deduction is available to State Street. Upon the subsequent sale of the stock, any recognized gain or loss after the date of exercise is treated as capital gain or loss to the recipient for which State Street is not entitled to a deduction.

Restricted Stock Awards. A recipient will not have income upon the grant of restricted stock unless an election under Section 83(b) of the Code is made within 30 days of the date of grant. If a timely 83(b) election is made, then a recipient will have compensation income equal to the value of the stock less the purchase price and State Street will be entitled to a corresponding deduction. There would be no further tax consequences to the recipient upon the vesting of the shares for which an 83(b) election was made. Upon the subsequent sale of the stock, any recognized gain or loss after the date of grant is treated as capital gain or loss to the recipient for which State Street is not entitled to a deduction. If the recipient forfeits shares for which an 83(b) election was made, the recipient is not entitled to a deduction, loss or credit with respect to the taxes paid as a result of making the election. If the recipient does not make an 83(b) election, then when the stock vests the recipient will have compensation income equal to the value of the stock on the vesting date less the purchase price; a corresponding deduction is available to State Street. Upon the subsequent sale of the stock, any recognized gain or loss after the date of vesting is treated as capital gain or loss for which State Street is not entitled to a deduction. If the recipient forfeits shares and no 83(b) election was made, there are no tax consequences to the recipient as a result of the forfeiture.

Restricted Stock Units. A recipient will not have income upon the grant of a restricted stock unit award. A recipient is not permitted to make a Section 83(b) election with respect to a restricted stock unit award. When the restricted stock unit vests, or, if the delivery of the shares has been properly deferred, upon delivery of the shares, the recipient will have compensation income equal to the value of the stock less the purchase price, if any; a corresponding deduction is available to State Street. Upon the subsequent sale of the stock, any recognized gain or loss after the date of vesting (or delivery) is treated as capital gain or loss to the recipient for which State Street is not entitled to a deduction.

Golden Parachute Tax. Under the so-called “golden parachute” provisions of the Code, the accelerated vesting of awards in connection with a change in ownership or control of State Street may be required to be valued and taken into account in determining whether participants have received compensatory payments,

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contingent on the change in control, in excess of certain limits. If these limits are exceeded, a substantial portion of amounts payable to the participant, including income recognized by reason of the grant, vesting or exercise of awards under the plan, may be subject to an additional 20% federal tax and may be nondeductible to State Street.

Section 162(m). Where applicable, Section 162(m) limits the deduction for compensation payable to certain executive officers of State Street. Options under the plan should be able to qualify as performance-based awards not subject to the deduction limitation under Section 162(m) of the Code. The Board may also grant performance awards that are intended to be exempt from the deduction limitation under Section 162(m) of the Code.

ITEM 4 – RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Board of Directors unanimously recommends that you vote

FOR

this proposal (Item 4 on your proxy card)

The Board of Directors recommends that shareholders approve the ratification of the selection of the independent registered public accounting firm described below. Unless contrary instructions are given, shares represented by proxies solicited by the Board will be voted for the approval of the proposal.

The Examining and Audit Committee has appointed Ernst & Young LLP as State Street’s independent registered public accounting firm for the year ending December 31, 2012. Ernst & Young LLP has acted as our independent auditor since 1972. We have been advised by Ernst & Young LLP that it is a registered public accounting firm with the Public Company Accounting Oversight Board (United States) and complies with the auditing, quality control and independence standards and rules of that Board and the SEC.

We expect that representatives of Ernst & Young LLP will be present at the annual meeting to respond to appropriate questions, and they will have the opportunity to make a statement if they desire.

While shareholder ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm is not required, the Board of Directors is submitting the selection of Ernst & Young LLP to the shareholders for ratification to learn the opinion of shareholders on the selection. Unless contrary instructions are given, shares represented by proxies solicited by the Board of Directors will be voted for the ratification of the selection of Ernst & Young LLP as State Street’s independent registered public accounting firm for the year ending December 31, 2012. Should the selection of Ernst & Young LLP not be ratified by the shareholders, the Examining and Audit Committee will reconsider the matter. Even in the event the selection of Ernst & Young LLP is ratified, the Examining and Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if in its view such a change is in the best interests of State Street and its shareholders.

OTHER MATTERS

The Board of Directors does not know of any other matters that may be presented for action at the annual meeting. Should any other business properly come before the meeting, the persons named on the enclosed proxy will, as stated therein, have discretionary authority to vote the shares represented by such proxies in accordance with their best judgment. See the discussion above in this proxy statement under the heading “General Information – Could other matters be decided at the meeting?”

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CORPORATE GOVERNANCE AT STATE STREET

State Street is a financial holding company whose principal subsidiary is State Street Bank and Trust Company, or the Bank. State Street and the Bank are each organized under the laws of the Commonwealth of Massachusetts. In accordance with Massachusetts law and State Street’s by-laws, our Board of Directors has responsibility for overseeing the conduct of our business. Our Board is committed to strong corporate governance practices and is intent on maintaining State Street’s reputation for quality, integrity and high ethical standards.

State Street’s Board of Directors, in its role of overseeing the conduct of our business, is guided by our Corporate Governance Guidelines, or the Guidelines. Among other things, the Guidelines describe the role of the Board of Directors, its responsibilities and functions, the director qualification and selection process and the role of the Lead Director. The Guidelines also contain categorical standards for determining director independence under NYSE listing standards. In general, a director would not be independent under these standards if the director (and in certain circumstances, a member of the director’s immediate family) has, or in the past three years had, certain relationships or affiliations with State Street, its external or internal auditors, or other companies that do business with State Street (including employment by State Street, receipt of a specified level of direct compensation from State Street other than director fees and compensation committee interlocks). The categorical standards also provide specified relationships that, by themselves, would not impair independence. The portion of the Guidelines addressing director independence is attached as Appendix B to this proxy statement. The full Guidelines are available on our website at www.statestreet.com. In addition to the Guidelines, the charters for each principal committee of the Board and our Standard of Conduct for Employees, Standard of Conduct for Directors and Code of Ethics for Senior Financial Officers are also available on our website. Except as may be specifically incorporated by reference in this proxy statement, information on our website is not part of this proxy statement.

Pursuant to the Guidelines, the Board undertook a review of director independence in February 2012. As provided in the Guidelines, the purpose of this review was to determine whether any relationship or transaction was inconsistent with a determination that the director was independent. As a result of this review, the Board, after review and recommendation by the Nominating and Corporate Governance Committee, determined that each of our non-management directors (Dame Amelia and Ms. Hill and Messrs. Burnes, Coym, de Saint-Aignan, Gruber, Kaplan, LaMantia, Sergel, Skates, Summe and Weissman) meets the categorical standards for independence under the Guidelines, has no material relationship with State Street and satisfies the qualifications for independence under listing standards of the NYSE. In making this determination, the Board considered that the following individuals, or their respective family members, have the following relationships or arrangements that are deemed to be immaterial under the categorical standards for independence included in the Guidelines: commercial relationships with an entity for which the State Street director or family member serves as non-employee director or owner of less than a 10% interest and with respect to which the director was uninvolved in the negotiations (Dame Amelia, Ms. Hill and Messrs. Skates, Summe and Weissman); and commercial relationships with an entity for which the State Street director or family member serves as an employee, consultant or executive officer where the director does not receive any special benefits from the transaction and the annual payments to or from the entity are equal to or less than the greater of $1 million or 2% of the consolidated gross annual revenues of the other entity during the most recent completed fiscal year (Ms. Hill and Messrs. Kaplan and Summe). None of these commercial relationships involved amounts paid or received by State Street in 2011 greater than 0 .1% of the director-affiliated entity’s annual gross revenue or 0.1% of State Street’s annual gross revenue.

Although State Street does not have a formal policy regarding attendance of directors at the annual meeting, all directors are encouraged to attend. Of the thirteen directors then on the Board, twelve attended the 2011 annual meeting.

State Street has established and maintains internal controls and procedures designed to ensure the integrity and accuracy of its consolidated financial statements and control of its assets. State Street has established and maintains disclosure controls and procedures designed to ensure that State Street is able to timely record, process and report the information required for public disclosure. State Street is dedicated to maintaining its high standards of financial accounting and reporting.

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We have a Standard of Conduct for Directors, which together with the Standard of Conduct for Employees, promotes ethical conduct and the avoidance of conflicts of interest in conducting our business. We also have a Code of Ethics for Senior Financial Officers (including the Chief Executive Officer), as required by the Sarbanes-Oxley Act and SEC rules. Only our Board may grant a waiver for directors, senior financial officers or executive officers from a provision of the Standard of Conduct for Directors, the Standard of Conduct for Employees or the Code of Ethics for Senior Financial Officers, and any waivers will be posted on our website at www.statestreet.com.

Composition of the Board and Director Selection Process

In connection with nominating directors for election each year and evaluating the need for new director candidates as appropriate, the Nominating and Corporate Governance Committee, with input from the entire Board and management, focuses on the Board’s capabilities and functioning as a whole, including skill sets, diversity, specific business background and global or international experience. The Board expects all nominees to possess the following attributes or characteristics:

Taken as a whole, the Board expects one or more of its members to have the following skill sets, specific business background and global or international experience:

The director biographies set forth in this proxy statement above under the heading “Item 1-Election of Directors” indicate each nominee’s experience, qualifications, attributes and skills that led the Board to conclude he or she should continue to serve as a director of State Street. The Board believes that individually each of the nominees has had substantial achievement in his or her personal and professional pursuits, and has talents, experience and integrity that will contribute to the best interests of State Street and to long-term shareholder value, and the nominees as a group possess the skill sets, specific business background and global or international experience that the Board desires.

State Street does not have a formal or informal policy with respect to diversity, but taken as a whole, strives to have a Board that reflects the diversity (in terms of a number of characteristics, including, gender, race, national origin, age and tenure on the Board) of the company’s key stakeholders and of the various communities in which the company operates. Presently, the Nominating and Corporate Governance Committee and the Board believe the composition of the Board, which currently reflects a range of personal and professional backgrounds, experiences and other characteristics, is reflective of this diversity. As noted above, the Nominating and Corporate Governance Committee includes diversity as a consideration in making its recommendations for nominees for director. The Committee, however, does not assign specific weight to the various factors it considers and no particular criteria is a prerequisite for nomination.

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In carrying out its responsibility to find the best qualified candidates for directors, the Nominating and Corporate Governance Committee will consider proposals from a number of sources, including recommendations for nominees from shareholders submitted upon written notice to the Chair of the Nominating and Corporate Governance Committee, c/o the Office of the Secretary of State Street Corporation, One Lincoln Street, Boston, Massachusetts 02111 (facsimile number (617) 664-8209). The Committee seeks to identify individuals qualified to become directors, consistent with the above criteria established by the Board for director candidates.

The Nominating and Corporate Governance Committee’s process for identifying and evaluating candidates includes actively seeking to identify qualified individuals by reviewing lists of possible candidates, and considering proposals from a number of sources, such as from members of the Board, members of management, employees, shareholders and industry contacts. The Committee’s charter grants it the authority to retain a search firm to assist in conducting this search. Upon identifying a possible candidate, from whatever source, the Committee makes an initial evaluation as to whether the individual would be expected to qualify under the criteria established by the Board for director candidates. A possible candidate whom the Committee feels is an individual who could qualify under the criteria established by the Board is then further evaluated through a process which may include obtaining and examining the individual’s resume, speaking with the person who has recommended the individual, speaking with others who may be familiar with the individual, interviews by members of the Board and the Nominating and Corporate Governance Committee with the individual, discussion at the Committee level of the individual’s possible contribution to State Street and, if appropriate, voting on the individual as a candidate. The Committee evaluates possible nominees for director without regard to whether an individual is recommended by a shareholder or otherwise.

Board Leadership Structure

On January 1, 2011, Mr. Hooley, State Street’s Chief Executive Officer, commenced his role as Chairman of the Board. As Chairman, Mr. Hooley presides at all meetings of the Board during which he is present. State Street has adopted a leadership structure that also incorporates an independent Lead Director of the Board. This position is currently held by Kennett F. Burnes. The Chairman works with the independent Lead Director in setting Board agendas and coordinating other Board activities. The Board of Directors believes that Mr. Hooley’s role as Chairman and Mr. Burnes’ role as Lead Director is the most effective leadership structure for State Street and is in the best interests of the Board, the company and its shareholders at this time. Among the factors leading the Board to this conclusion are:

Mr. Burnes was appointed Lead Director to serve a one-year term as the presiding director of the independent directors of the Board (all directors, except for Mr. Hooley) in May 2011. Mr. Burnes has served in this capacity for two terms. In appointing Mr. Burnes to this position, the Board intended to enhance the role of Lead Director within our corporate governance framework. As Lead Director, Mr. Burnes:

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The independent directors meet in executive session at every regularly scheduled meeting of the Board and otherwise as needed. The Lead Director is authorized to call additional meetings of the independent directors. The meetings of the independent directors promote additional opportunities, outside the presence of management, for the directors to engage together in discussion of pending and other important matters, and the regularity of these meetings fosters continuity for these discussions and allows for a greater depth and scope to the matters discussed. The role of the Lead Director provides another method to communicate the perspectives of the independent directors, including the matters discussed at the separate meetings of the independent directors, and to effectively integrate those perspectives into Board agendas and materials.

A review of the role, responsibilities and effectiveness of the Lead Director is conducted annually by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee conducts a review of the current Lead Director by soliciting feedback from members of the Board, and based upon the review, recommends that the Board of Directors elect a member of the Board as its Lead Director for a one-year term.

Communication with the Board of Directors.

Shareholders and interested parties who wish to contact the Board of Directors or the Lead Director should address correspondence to the Lead Director in care of the Corporate Secretary. The Corporate Secretary will review and forward correspondence to the Lead Director or appropriate person or persons for response.

Lead Director of State Street Corporation

c/o Office of the Secretary

One Lincoln Street

Boston, MA 02111

In addition, State Street has established a procedure for communicating directly with the Lead Director by utilizing a third-party independent provider, regarding concerns about State Street or its conduct, including complaints about accounting, internal accounting controls or auditing matters. An interested party who wishes to contact the Lead Director may use any of the following methods, which are also described on State Street’s website at www.statestreet.com:

For country specific phone numbers please visit www.statestreet.com.

The Lead Director may forward to the Examining and Audit Committee, or to another appropriate group or department, any concerns the Lead Director receives for appropriate review. The Lead Director periodically reports to the non-management directors as a group regarding concerns received.

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Meetings of the Board of Directors

During 2011, the Board of Directors held eleven meetings, and each of the directors attended 75% or more of the total of all meetings of the Board and all meetings of the committees of the Board on which such director served during the year. Each member of the Board is also a member of the Board of Directors of the Bank. The Board of Directors of the Bank held nine meetings during 2011. Each member of State Street’s Executive Committee, Risk and Capital Committee and Examining and Audit Committee is also a member of the corresponding committee of the Bank, and members customarily hold joint meetings of both committees.

Committees of the Board of Directors

The Board of Directors has the following principal committees to assist it in carrying out its responsibilities, each of which operates under a written charter, a copy of which is available on our website at www.statestreet.com. The charter for each committee, which establishes its roles and responsibilities and governs its procedures, has been approved by the Board.

Examining and Audit Committee. The Examining and Audit Committee has direct responsibility for the appointment, compensation, retention, evaluation and oversight of the work of the independent registered public accounting firm for State Street, and sole authority to establish pre-approval policies and procedures for all audit engagements and for any non-audit engagements with the independent auditor. The Committee also oversees the operation of a comprehensive system of internal controls covering the integrity of our financial statements and reports, compliance with laws, regulations, corporate policies, and the qualifications, performance and independence of State Street’s independent auditor. The Committee acts on behalf of the Board in monitoring and overseeing the performance of the internal audit function at State Street and in reviewing certain communications with bank regulatory authorities. The Committee reports periodically to the Board as appropriate, and its specific functions and responsibilities are set forth in the Committee’s charter. The Committee’s members are, Ronald L. Skates, Chair; Peter Coym, David P. Gruber, Charles R. LaMantia and Richard P. Sergel. During 2011, the Committee held 22 meetings.

The Board of Directors has determined that the Examining and Audit Committee consists entirely of directors who meet the independence requirements of the listing standards of the NYSE and the rules and regulations of the SEC. Further, all of the members of the Committee are financially literate, based upon their education and experience, as such qualification under the listing standards of the NYSE is interpreted by the Board. The Board has determined, based upon education and experience as a principal accounting or financial officer or public accountant, or experience actively supervising a principal accounting or financial officer or public accountant, that all members of the Committee, with the exception of Peter Coym, satisfy the definition of “audit committee financial expert” as set out in the rules and regulations under the Exchange Act, and have accounting or related financial management expertise as such qualification under the listing standards of the NYSE is interpreted by the Board. None of the members of the Committee serves on more than two other audit committees of public companies.

Executive Committee. The Executive Committee is authorized to exercise all the powers of the Board of Directors, except as otherwise limited by the laws of the Commonwealth of Massachusetts or its charter. The purpose and function of the Committee is to review, approve and act on matters on behalf of the Board of Directors at times when it is not practical to convene a meeting of the full Board to address such matters. The Committee, dependent on its meeting activities, if any, reports periodically to the Board, as appropriate, and its specific functions and responsibilities are set forth in the Committee’s charter. The Committee’s members are Joseph L. Hooley, Chair, Kennett F. Burnes, Amelia C. Fawcett, Richard P. Sergel, Ronald L. Skates and Gregory L. Summe. The Committee did not meet in 2011.

Executive Compensation Committee. The Executive Compensation Committee, sometimes referred to as the Compensation Committee, oversees the operation of all of our compensation plans, policies and programs in

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which officers who are Section 16 reporting persons participate and certain other incentive, retirement, welfare and equity plans in which all other employees participate. The Committee also oversees the alignment of our incentive compensation arrangements with our safety and soundness. Acting together with the other independent directors, the Committee annually reviews and approves corporate goals and objectives relevant to the chief executive officer’s compensation, evaluates the chief executive officer’s performance, and reviews, determines and approves, in consultation with the other independent directors, the chief executive officer’s compensation level. In addition, the Committee reviews, evaluates and approves the total compensation of all Section 16 officers and oversees State Street’s incentive plans. The Committee is also responsible for approving the terms and conditions of employment and any changes thereto, including any restrictive provisions, severance arrangements, and special arrangements or benefits, of any Section 16 officer. The Committee adopts equity grant guidelines in connection with its overall responsibility for all equity plans, and monitors stock ownership of executive officers. The Committee reports periodically to the Board, as appropriate, and its specific functions and responsibilities are set forth in the Committee’s charter. Its members are Richard P. Sergel, Chair; Amelia C. Fawcett, Linda A. Hill, Robert S. Kaplan and Robert E. Weissman. None of these individuals is or has been an officer or employee of State Street or the Bank. The Board of Directors has determined that the Committee consists entirely of directors who meet the independence requirements of the listing standards of the NYSE. During 2011, the Committee held 8 meetings.

The Board of Directors has formed a subcommittee of the Executive Compensation Committee and appointed Messrs. Sergel (Chair) and Weissman and Dame Amelia as members of the subcommittee. The purpose and authority of the subcommittee is to perform all functions of the Executive Compensation Committee related to the qualification of performance-based compensation for applicable exemptions under Section 162(m), including establishing and administering performance goals and certifying the attainment of those goals. Each of Messrs. Sergel and Weissman and Dame Amelia qualify as outside directors for purposes of Section 162(m) and as non-employee directors for purposes of SEC Rule 16b-3. All references to the Executive Compensation Committee in this proxy statement refer to the subcommittee, as appropriate.

Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee’s principal responsibilities are to assist the Board in overseeing the company’s succession planning process, to identify and recommend nominees for directors of State Street, to recommend to the Board director nominees for each committee, to provide leadership in shaping our corporate governance, including the Corporate Governance Guidelines, and to lead the Board in its annual review of the Board’s performance. The Committee is also responsible for reviewing and approving State Street’s related-person transactions and reviewing the amount and form of director compensation. The Committee reports periodically to the Board, as appropriate, and its specific functions and responsibilities are set forth in the Committee’s charter. Its members are Gregory L. Summe, Chair; Peter Coym, Linda A. Hill, Robert S. Kaplan and Ronald L. Skates. The Board of Directors has determined that the Committee consists entirely of directors who meet the independence requirements of the listing standards of the NYSE. During 2011, the Committee held 7 meetings.

Risk and Capital Committee. The Risk and Capital Committee is responsible for the oversight relating to State Street’s assessment and management of risk, including market, operational, fiduciary, interest-rate, liquidity, business and credit risks and related policies. In addition, the Committee provides oversight on strategic capital governance principles and controls and monitors capital adequacy in relation to risk. The Risk and Capital Committee is also responsible for discharging the duties and obligations of the Board under applicable Basel requirements. The Committee reports periodically to the Board, as appropriate, and its specific functions and responsibilities are set forth in the Committee’s charter. Its members are Amelia C. Fawcett, Chair; Patrick de Saint-Aignan, David P. Gruber, Joseph L. Hooley, Charles R. LaMantia and Ronald L. Skates. During 2011, the Committee held 13 meetings.

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Non-Employee Director Compensation

General

The Nominating and Corporate Governance Committee is responsible for reviewing annually the form and amount of director compensation and for making a related recommendation to the Board. The Committee’s review focuses on compensation for our non-employee directors. Mr. Hooley is the only director that is also one of our employees, and the determination of his compensation is described in this proxy statement under the heading “Executive Compensation.” In conducting its review, the Committee has access to compensation consultants and other resources it deems appropriate, including peer group data. The Committee uses the same peer group as the Compensation Committee uses for purposes of executive compensation generally and, like the Compensation Committee, uses the services of Aon Hewitt as a compensation consultant.

The Nominating and Corporate Governance Committee targets non-employee director compensation at the median of the companies in our peer group. Aon Hewitt prepares a review of director compensation at the peer group and provides the review to the Committee annually. The summary includes data on total compensation for directors at the peer group companies as well as on individual components of that compensation, such as annual retainers, meeting fees and equity awards. Data is also provided that differentiates compensation by board position, such as committee chairs and lead directors. Aon Hewitt also provides data showing trends in director compensation. For 2011 director compensation, management and Aon Hewitt met to review the data with the Committee at a meeting in April 2011. The Committee then made its recommendation to the Board, which, following the May 2011 annual meeting of shareholders, approved director compensation for all non-employee directors effective through the 2012 annual meeting of shareholders.

Director Compensation Arrangements

Compensation

For the period beginning after the 2011 annual meeting of shareholders and ending upon the 2012 annual meeting of shareholders, non-employee directors receive the following compensation:

Pursuant to State Street's Deferred Compensation Plan for Directors, directors may elect to defer the receipt of 50% or 100% of their (1) retainers, (2) meeting fees, and/or (3) annual award of shares of common stock.

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Directors also may elect to receive all of their retainers in cash or shares of common stock. Directors who elect to defer the cash payment of their retainers and/or meeting fees may also make notional investment elections with respect to such deferrals, with a choice of one or more of five notional investment fund returns, including one that tracks the performance of State Street common stock. To the extent the amounts are deferred, they will be paid (a) on the date elected by the director, either the date of the director's termination of service on the Board or a future date specified, and (b) in the form elected by the director as either a lump sum or in installments over a two- to ten-year period.

Director Stock Ownership Guidelines

We have stock ownership guidelines that apply to all directors. The target level of stock ownership is the lesser of 10,000 shares of common stock or common shares worth at least $500,000. The value of those shares is calculated by reference to the closing price of our common stock on the NYSE on the date that we use for the beneficial ownership table in our annual meeting proxy statement. Directors are credited with the value and number of all shares they beneficially own for purposes of the beneficial ownership table as well as all shares awarded as director compensation whether deferred, delayed or subject to vesting or other restrictions. The achievement of these levels is phased-in over a period of seven years for current directors, with the first year commencing on the date of election as director. As of March 1, 2012, the stock ownership of each of our directors exceeded the expected level of ownership under these guidelines or is consistent with a prorated accumulation of shares which would, if continued, exceed the guidelines for those directors whose holdings do not meet the seven-year threshold.

2011 Director Compensation

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Related Person Transactions

The Board has adopted written policies and procedures for the review of any transaction, arrangement or relationship in which State Street is a participant, the amount involved exceeds $120,000, and one of our executive officers, directors, director nominees or 5% shareholders (or their immediate family members), who we refer to as “related persons,” has a direct or indirect material interest.

A related person proposing to enter into such a transaction, arrangement or relationship must report the proposed related-person transaction to State Street’s Chief Legal Officer. The policy calls for the proposed related-person transaction to be reviewed and, if deemed appropriate, approved by the Nominating and Corporate Governance Committee. Whenever practicable, the reporting, review and approval will occur prior to the transaction. If advance review is not practicable or was otherwise not obtained, the Committee will review, and, if deemed appropriate, may ratify the related-person transaction. The policy also permits the Chair of the Committee to review and, if deemed appropriate, approve proposed related-person transactions that arise between Committee meetings, in which case they will be reported to the full Committee at its next meeting. Any related-person transactions that are ongoing in nature will be reviewed annually.

A related-person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the Committee (or the Committee Chair) after full disclosure of the related person’s interest in the transaction. As appropriate for the circumstances, the Committee (or the Committee Chair) will review and consider:

The Committee may approve or ratify the related-person transaction only if the Committee determines that, under all of the circumstances, the transaction is in, or is not inconsistent with, State Street’s best interests. The Committee may, in its sole discretion, impose such conditions as it deems appropriate on State Street or the related person in connection with approval of the related-person transaction.

In addition to the transactions that are excluded by the instructions to the SEC’s related-person transaction disclosure rule, the Board has determined that the following transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related-person transactions for purposes of this policy:

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Based on information provided by the directors and executive officers, and obtained by the legal department, no related-person transactions were required to be reported in this proxy statement under applicable SEC regulations. In addition, neither State Street nor the Bank had extended a personal loan or extension of credit to any directors or executive officers.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The goals of State Street’s compensation program for executive officers are to attract, retain and motivate superior executives and reward them for meeting short-term and long-term financial and strategic goals, and to drive long-term shareholder value and financial stability, in a manner aligned with appropriate risk management principles. In this compensation discussion and analysis, we describe our approach to executive compensation, including philosophy, design, process and risk alignment. We also describe 2011 compensation determinations for specific executive officers.

Overview

In making compensation decisions for our executive officers, the Compensation Committee evaluates a number of relevant factors. Financial performance, capital position and other corporate performance indicators are the predominant factors in determining incentive compensation for executive officers, each of whom has significant policy-making and other influence over our operations. The Committee also evaluates individual performance, market and competitive compensation practices and regulatory and shareholder perspectives in these determinations. This overview reviews several key factors and procedural elements involved in the Committee’s determinations of 2011 executive officer incentive compensation. Many of these factors and elements are further described later in this compensation discussion and analysis, along with others.

Named Executive Officers

The executive officers whose 2011 compensation is described specifically in this compensation discussion and analysis are identified below. We refer to these executive officers as our named executive officers.

Each of the named executive officers serves on our Management Committee, which consists of our senior-most policy-setting executive officers. The compensation philosophy, design, process and risk alignment characteristics applicable to our named executive officers are also generally applicable to all of the other members of our Management Committee.

2011 Corporate Performance

State Street’s 2011 corporate performance reflects the company’s financial stability and capability to advance its business opportunities and strategic priorities in an environment which included volatile equity markets and economic uncertainty – particularly in the second half of the year – in important regions such as Europe. Below are highlights reflecting several indicators by which we monitor our performance and which were among the factors used in evaluating corporate performance for 2011 for compensation purposes.

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State Street’s 2011 financial performance is reviewed in detail in our annual report on Form 10-K, accompanying this proxy statement and on file with the Securities and Exchange Commission.

Compensation Committee Process and Risk Alignment

The Compensation Committee has direct responsibility for executive officer compensation plans, policies and programs at State Street and for establishing the overall compensation philosophy for executive officers, other than the Chief Executive Officer. The Compensation Committee, in consultation with the other independent directors, performs those same functions with respect to the Chief Executive Officer. References in this section to compensation determinations by the Compensation Committee for the Chief Executive Officer are also references to the other independent directors. In making compensation decisions for the other named executive officers, the Committee considers the recommendations of the Chief Executive Officer and input from the other independent directors. The Compensation Committee met seven times for the 2011 compensation cycle and received, considered and evaluated regular reports on a breadth of corporate performance factors, individual performance updates and market and other information.

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One area of particular focus for the Compensation Committee in 2011 was the alignment of incentive compensation with risk. Over the past several years, State Street has implemented various compensation processes and design characteristics to maintain a high level of alignment of its executive compensation programs with risk considerations. These features include, for example: annual risk reviews by the Compensation Committee of compensation plan design presented by the Chief Risk Officer and Chief Human Resources Officer; maintaining significant levels of equity and deferral in incentive compensation awards; integrating forfeiture provisions into executive officer performance-based restricted stock unit and deferred share awards; and establishing a multi-disciplinary control function committee to formally review and assess incentive compensation arrangements throughout the organization. For 2011, the Committee augmented these measures by, among other things: formalizing a recurring process for incorporating input of the Risk and Capital Committee into compensation decisions; standardizing a comprehensive framework for identifying executives and other individuals whose activities may expose State Street to material amounts of risk; and implementing a two-pronged process for risk-based adjustments to incentive compensation awards, as appropriate, for specific personnel both before and after such compensation is awarded. For a further discussion of the risk alignment of our compensation practices, see below under the heading “Alignment of Incentive Compensation and Risk.”

Incentive Compensation Design Elements

The design of the 2011 incentive compensation program for our named executive officers reflects the Compensation Committee’s consideration of a number of factors, including:

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Key elements of our incentive compensation program for our named executive officers for 2011 are described below.

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2011 Compensation Determinations

Philosophy

The goals of State Street’s compensation program for executive officers are to attract, retain and motivate superior executives and reward them for meeting short-term and long-term financial and strategic goals, and to drive long-term shareholder value and financial stability, in a manner aligned with appropriate risk management principles. The Compensation Committee’s compensation objective is to target the total compensation of our executives, consisting of fixed base salary and variable incentive compensation, at the median of a peer group of companies if we attain anticipated performance and, at higher or lower performance levels, to recognize over-performance or under-performance contributing to the relevant performance level.

Total Compensation Approach

The Compensation Committee evaluates individual compensation by looking at total compensation, consisting of base salary and incentive compensation.

Base salary is a fixed annual cash amount and, for all named executive officers, historically has been a smaller portion of total compensation. Base salary rates for all of the named executive officers for 2011 remained unchanged from their levels in 2010. In evaluating base salaries, the Committee is mindful of the $1 million deduction limit on non-performance-based compensation under Section 162(m) of the Internal Revenue Code.

Incentive compensation is a variable amount, composed of both cash and equity. The Committee believes that a significant amount of the incentive compensation portion of total compensation should take the form of deferred equity-based awards, as this serves to align our compensation structure with the performance of our stock and therefore the interests of our shareholders. This approach is also consistent with regulatory guidance applicable to executive compensation at major financial institutions. For 2011, approximately 80% of the incentive compensation for each named executive officer, other than Mr. Antonellis, was in the form of four-year deferred equity awards. Fifty percent of these awards were in the form of four-year performance-based restricted stock units payable based upon a one-year return on equity performance-metric and 50% were in the form of four-year deferred stock awards. Each of these awards vests ratably in four annual installments, except that the amount vesting under the performance-based awards is determined based upon achievement of specified levels of return on common shareholders’ equity in 2012. By placing a significant component of our executives’ compensation in the same form, equity, held by our shareholders and by requiring vesting of that component over a four-year ratable period from the date of award, the Committee believes it has created an incentive structure where the executives share directly with our shareholders in both the rewards and the risks of share ownership. The equity-based awards are described further above under the heading “– Overview – Incentive Compensation Design Elements.”

Due to his role in our organization, the structure of Mr. Antonellis’s incentive compensation is subject to specific requirements of the U.K. Financial Services Authority that are not applicable to our other named executive officers. Among those requirements is that one-half of the non-deferred portion of his incentive compensation award be in the form of equity that is immediately vested, but that cannot be sold for six months. Therefore, in accordance with these regulatory requirements, while Mr. Antonellis received 80% of his 2011 incentive compensation award in the form of equity, 25% of his total equity incentive (20% of his total 2011 incentive compensation) was in the form of immediately vested shares of our common stock that he is prohibited from selling until August 2012. The remainder of Mr. Antonellis’s 2011 equity-based incentive compensation was in the form of performance-based restricted stock units and deferred shares, each representing 37.5% of his 2011 equity-based incentive compensation and 30% of his total 2011 incentive compensation.

In addition, our named executive officers are permitted to defer certain compensation and are entitled to retirement benefits, change in control protection and perquisites that may differ from those generally available to other employees. These other elements of our compensation program for our named executive officers are described below under “– Other Elements of Compensation.”

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Compensation Assessment Framework

For each named executive officer, the Committee makes a determination of the appropriate aggregate level of total compensation for the year. This determination of total compensation is based upon a subjective evaluation of many factors, including assessments of corporate performance, individual performance (including, as applicable, over-performance or under-performance) and market, regulatory and shareholder considerations. The determination of total compensation does not result from a specific formula, and the achievement of any particular goal or target does not automatically result in any particular level of compensation. In evaluating these factors and making 2011 compensation decisions for the named executive officers, the Committee used the following framework:

As it relates to evaluating corporate performance, the above framework incorporates a structured approach by using three separate standardized performance assessments: one focused on each of financial performance, strategic objective performance and risk performance. The Compensation Committee received quarterly updates on each of these areas and progress against annual goals, with a final evaluation at year-end. The Committee’s assessment of these standardized performance assessments factored significantly into the 2011 incentive compensation decisions for named executive officers.

State Street’s consolidated financial performance for 2011 exceeded its 2010 performance in many ways, with increases in revenue and earnings per share, on both a GAAP and an operating basis¹. On a GAAP basis, our 2011 return on average common shareholders’ equity increased compared to 2010, but declined on an operating basis. Our regulatory capital ratios at December 31, 2011 were among the highest in the industry, and we achieved a higher total shareholder return than most of the members of our peer group, including our closest trust bank competitors (Bank of New York Mellon and Northern Trust Corporation). The Committee also recognized management’s significant overall progress toward our corporate strategic objectives of: growing revenue in non-U.S. markets; creating new revenue streams through innovation and cross-selling; expanding electronic trading capabilities; expanding SSgA’s core business; achieving cost savings targets; and supporting our strategic direction.

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Risk performance for 2011 was evaluated based on a separate standardized assessment developed by our Enterprise Risk Management department and the Risk and Capital Committee. The Compensation Committee finalized the parameters of this assessment in a joint meeting with the Risk and Capital Committee in May 2011 and reviewed updates to the assessment in July, September and December of 2011. On each occasion, the risk assessment was reviewed and approved by the Risk and Capital Committee and presented by a representative of that committee to the Compensation Committee for consideration in compensation decisions. The assessment evaluates firm-wide risk performance on a wide number of key risk factors associated with financial, operational, customer, capital and other activities, including stress scenarios. Under this evaluation, the Compensation Committee assessed that State Street’s overall 2011 corporate risk performance met expectations.

Individual Compensation Determinations

Each of the named executive officers, due to their position within our organization, has the opportunity to determine or influence broad corporate activities. Therefore, in determining the 2011 incentive compensation for each of our named executive officers, the Compensation Committee weighed heavily the overall corporate performance assessments described above. In determining the total compensation for each named executive officer, the Committee also considered that officer’s individual performance. On an individual performance basis, the Committee recognized, in particular, the contributions of:

In its compensation determinations, the Committee also evaluated additional key considerations, including market and competitive compensation practices and shareholder perspectives. For a discussion of these additional considerations, see below under the heading “– Additional Key Considerations and Compensation Process Elements.”

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Based on all the above, the Committee determined the 2011 total compensation for each of the named executive officers as set forth in the table below. The table below reflects the process and philosophy by which the Compensation Committee calculated executive compensation in respect of 2011 and is intended to assist shareholders in understanding the elements of total compensation as determined by the Committee. This information differs from the calculation of total compensation in accordance with the rules of the SEC. The data attributed to 2011 under the heading “Summary Compensation Table” on page 55 of this proxy statement reflects 2011 compensation calculated in accordance with the SEC methodology. Footnotes (1)-(3) to the table below describe the relationship between the amounts reported in the table below and those amounts reported in the Summary Compensation Table and related tables beginning on page 55 of this proxy statement. While the table below is presented to explain how the Committee determines compensation, the table and its accompanying disclosure are not a substitute for the tables and disclosures required by the SEC’s rules.

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Additional Key Considerations and Compensation Process Elements

Committee Meetings

The Compensation Committee’s process for determining annual incentive compensation for executive officers for any year ordinarily concludes with its approval and award of compensation, usually in February of the succeeding year. The Committee met seven times in connection with its activities for the 2011 compensation year and considered and evaluated a broad range of corporate performance factors, individual performance updates and market information, as well as evolving trends, practices and guidance in the design, regulation, risk alignment and governance of compensation matters in the U.S. and other jurisdictions. During these meetings, the Committee received regular updates, including from the Committee’s independent compensation consultant and external legal counsel, on these and other matters, particularly with respect to the financial services industry.

“Say-on-Pay” Results

Since 2009, we have annually asked our shareholders to vote at our shareholder meeting to approve a non-binding advisory proposal on executive compensation. In 2011, consistent with the newly enacted Dodd-Frank Act, we asked our shareholders to vote on the frequency on which we should hold these votes. We recommended that we continue to hold the vote annually, and our shareholders approved that recommendation. We are therefore continuing our practice of holding a “say-on-pay” vote at each annual shareholder meeting.

Each year we have presented a “say-on-pay” vote, the proposals have been approved by a significant majority of the votes cast. At our 2011 annual meeting of shareholders, the “say-on-pay” proposal received the approval of 89% of the votes cast at the meeting. The Compensation Committee was aware of and considered this result, and prior “say-on-pay” votes, in making its compensation determinations for 2011. The Committee believes that the results of the 2011 and prior “say-on-pay” votes reflect an overall high level of shareholder support for State Street’s compensation practices, as well as an indication that State Street should continue to monitor and, as appropriate, integrate evolving market and regulatory compensation practices into its compensation programs. In response to these market and regulatory developments, State Street has, among other things, continued a performance-based component to incentive compensation for its named executive officers, maintained a high level of equity composition and deferral for incentive compensation awards to its named executive officers, augmented its processes associated with the alignment of risk and incentive compensation and introduced a risk-based forfeiture provision to deferred equity awards for its material risk takers. These matters are all discussed in greater detail in other sections of this compensation discussion and analysis.

Peer Group and Benchmarking

Among the many factors used in determining executive compensation, we benchmark our total compensation against a peer group of companies with which we compete in business and for executive talent. Our generally applicable peer group, approved by the Compensation Committee, consists of 12 financial services companies

A subset of the above firms, excluding BlackRock, Goldman Sachs, Marsh & McLennan, Franklin Resources and Morgan Stanley, is used for Mr. Hooley. The Committee believes this subset contains the comparator companies most appropriate for evaluating compensation of the Chief Executive Officer position. For Mr. Powers, the Compensation Committee uses a separate peer group of 24 leading investment management

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firms². The Committee views this separate peer group as a more relevant comparator group for Mr. Powers, given his position as the President and Chief Executive Officer of SSgA, our investment management business unit.

During 2011, the Compensation Committee’s independent compensation consultant, Aon Hewitt, compiled compensation paid to comparable executives for the generally applicable peer group for benchmarking purposes. At a December 2011 meeting of the Committee, Aon Hewitt presented a report in which it reviewed the total compensation paid to executives at companies in the peer group for 2010 (the most recent full year for which this specific data was available) and, where the comparable positions existed at State Street among our named executive officers, ranked our total compensation for 2010 compared to the peer group’s median. For Mr. Powers, the Committee uses supplemental data compiled by Towers Watson and McLagan. For these purposes, and as otherwise discussed in this proxy statement, the Committee considers total compensation to consist of base salary and incentive compensation. In early 2012, Aon Hewitt updated its December 2011 report with available data regarding 2011 compensation actions.

Our Compensation Committee’s compensation objective is to target the total compensation of our executives at the median of the peer group if we attain anticipated performance and, at higher or lower performance levels, to recognize over-performance or under-performance contributing to the relevant performance level. By the time of the Committee’s final compensation decisions, Aon Hewitt had supplemented its December 2011 report with available market trend data for 2011 compensation actions. The Committee also recognized that the peer group itself, although selected to comprise appropriate comparator companies, exhibits some variability in size and business lines. In addition, the nature of the roles of executives varies by firm, and several of our executive officers may not have many (or, possibly, any) direct equivalents within the peer group. Therefore, the Compensation Committee referenced peer group data as indicative of appropriate compensation levels for our named executive officers, but formed its own perspective on median compensation ranges for executive positions based on the peer group data, additional available data regarding 2011 market trends and other factors it deemed appropriate. The 2011 total compensation established for each of our named executive officers was within that median range.

Incentive Compensation Guidelines

In the early part of each year, the Compensation Committee establishes guidelines for the amount of annual and other incentive awards for each named executive officer. These guidelines represent an initial payout opportunity based on State Street’s consolidated operating-basis net income before income taxes and incentive compensation, which we refer to as Operating NIBTIC, with adjustments, determined by the Compensation Committee in its discretion, based upon business, risk, capital and other considerations. As applied to the annual component of incentive compensation under the senior executive annual incentive plan, or SEAIP, described below, to qualify for the performance-based compensation exception to the deduction limitation of Section 162(m) of the Internal Revenue Code, these adjustments must only involve a reduction to Operating NIBTIC. For 2011, Operating NIBTIC was $3.33 billion. The Committee did not exercise negative discretion to impose reductions to this performance determination; although, as described, below, the Committee did exercise negative discretion to award compensation for the named executive officers at levels lower than the payout opportunities provided for under the SEAIP and other, non-SEAIP, components of our incentive compensation program. For a discussion of the factors considered by the Committee in determining amounts awarded under the SEAIP and non-SEAIP components of our incentive compensation program, see “– 2011 Compensation Determinations” above.

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We use the SEAIP, approved by our shareholders in 2011, to provide our named executive officers with annual incentive compensation, the payment of which is dependent upon the achievement of annual financial performance goals. To implement the SEAIP, the Compensation Committee in early 2011 assigned each named executive officer a maximum payout opportunity expressed as a percentage of 2011 Operating NIBTIC. The payout opportunity for each of the named executive officers for 2011 (based on 2011 Operating NIBTIC) was as follows: Mr. Hooley, 0.309502%; Mr. Resch, 0.176029%; Mr. Antonellis, 0.171000%; Mr. Phalen, 0.176029%; and Mr. Powers, 0.201176%. The SEAIP allows the Committee to exercise negative discretion to make awards that are less than the payout opportunity. For 2011, the Committee exercised this discretion, and each named executive officer received incentive compensation under the SEAIP in an amount less than the executive’s payout opportunity. Amounts paid under the SEAIP for 2011 were in the form of cash and deferred shares (and, in the case of Mr. Antonellis, also immediately vested shares with a six-month sale restriction). Awards under the SEAIP are intended to qualify for the performance-based compensation exception to the deduction limitation of Section 162(m) of the Internal Revenue Code and are subject to an annual limit of $10 million per individual.

After determining the level of annual incentive payments under the SEAIP, the other, non-SEAIP, component of each named executive officer’s 2011 incentive compensation was paid as long-term performance-based restricted stock units. The Compensation Committee determined the total amount for the non-SEAIP component of incentive compensation for each named executive officer with reference to a payout opportunity guideline expressed as a percentage of 2011 Operating NIBTIC. The 2011 payout opportunity for each of the named executive officers (based on 2011 Operating NIBTIC), set by the Compensation Committee in early 2011, was as follows: Mr. Hooley, 0.185701%; Mr. Resch, 0.094785%; Mr. Antonellis, 0.092077%; Mr. Phalen, 0.094785%; and Mr. Powers, 0.108326%. Unlike for SEAIP awards, the amount resulting from this payout opportunity was not subject to a maximum limit. The Committee used the payout opportunity calculation as a guideline in developing each named executive officer’s total compensation and could increase or decrease this component of incentive compensation, in its discretion, based upon its subjective assessment of the appropriate amount of compensation. For 2011, the Committee exercised negative discretion and awarded to each named executive officer other incentive compensation in an amount less than the payout opportunity.

Prior-Year Performance Award Results

In February 2012, the Committee reviewed 2011 financial results for purposes of determining compensation results under performance-based compensation awarded in prior years, but based in whole or in part on metrics for periods ended December 31, 2011. The results under those awards are as follows:

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Early in each compensation year, the Compensation Committee identifies specific types of objectively determinable factors that could affect performance measures if the factors occur during the year. In doing so, the Committee establishes that the effects of those factors will be excluded from the calculation of the performance measures. Factors that could result in an adjustment to the calculation of the above performance measures include: acquisitions, dispositions and similar transactions and related securities issuances and expenses; changes in accounting principles or law; and restructuring charges and expenses. The Committee retains the power to exercise negative discretion, as it deems appropriate under the relevant circumstances, to reduce the actual payouts under performance awards below the payouts otherwise resulting from the application of adjustments for any of these factors. In reaching the above determinations of 2011 performance relative to specified performance thresholds, the Committee elected to exercise this negative discretion. As a result, the relevant performance award payouts were reduced to the levels that would have applied in the absence of any adjustments.

Compensation Consultant

The Compensation Committee has directly retained the services of Aon Hewitt to provide compensation consulting and compensation data services to the Committee in connection with its annual review of executive compensation. Aon Hewitt regularly participated in meetings and executive sessions of, and advised, the Committee in connection with its services.

The Compensation Committee believes that in order for its compensation consultant to provide the Committee with appropriate advice regarding compensation matters, including the amount, elements and structure of executive compensation, the consultant’s primary representative advising the Committee must be independent of management and the Committee. The Committee has adopted a policy to aid its determination of independence. Under the policy, in determining independence for 2011, the Committee considered the following factors:

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The Compensation Committee uses its discretion in implementing the policy. In particular, in balancing the above factors, the Committee is not required to treat any one or more of the factors as dispositive or more or less heavily weighted than any or all of the other factors.

At a meeting held in December 2011, the Compensation Committee reviewed the independence of Aon Hewitt’s primary representative to the Committee under the policy. In connection with its independence evaluation, the Committee reviewed with the primary representative two relevant relationships.

The primary representative of Aon Hewitt advising the Compensation Committee did not participate in any of these other services by Aon Hewitt or services by McLagan. In both cases, management determined to engage the relevant firm, and the engagements were not approved by the Committee. Total 2011 fees to Aon Hewitt for compensation consultant services to the Compensation Committee were approximately $200,000, or less than 0.002% of Aon Corporation’s 2011 consolidated total revenue. The total 2011 fees to Aon Hewitt and McLagan for services other than compensation consultant services to the Compensation Committee were approximately $430,000, or less than 0.004% of Aon Corporation’s 2011 consolidated total revenue.

With regard to the independence of the primary representative of Aon Hewitt advising the Compensation Committee, in December 2011 that representative presented to the Committee several safeguards developed by Aon Hewitt to promote the independence of the compensation advice it provides. The safeguards include: strong confidentiality requirements and a code of conduct; a strict policy against investing in client organizations; management of multi-service client relationships by separate account executives; clearly defined engagements with compensation committees that are separate from any other services provided; formal segregation of executive compensation services into a separate business unit; no incentives for cross-selling of services, and no compensation rewards based on other results; no offers of more favorable terms for organizations that retain Aon Hewitt for additional services; and consulting work limited to boards, compensation committees and companies, with no representation of individual executives in any capacity.

Following its review of the primary representative of Aon Hewitt advising the Compensation Committee, consistent with its policy, the Committee determined that representative to be independent.

The Compensation Committee supplements the data provided by Aon Hewitt with data prepared by Towers Watson & Co. and, as noted above, McLagan. Towers Watson, like McLagan, was engaged by our Global Human Resources Department based on its specialized expertise in the financial services industry. Towers Watson and McLagan have provided other services to State Street in the past and may do so in the future.

Other Elements of Compensation

Additional elements of our compensation program for our named executive officers include the following.

Forfeiture Provisions

The deferred equity-based awards to our named executive officers granted as part of our 2011 compensation process, consisting of performance-based restricted stock units and deferred shares, each contain provisions

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permitting the reduction or cancellation of the amount to be paid under the award, in whole or in part, upon the occurrence of specified events. The Compensation Committee, in its discretion, determines whether forfeiture is appropriate. The events for which a forfeiture may occur include:

The Committee introduced the first forfeiture provision regarding exposure to inappropriate risks for the 2011 compensation year. This approach is consistent with regulatory guidance applicable to executive compensation at major financial institutions. We have included the other forfeiture provisions in deferred incentive compensation awards for our named executive officers since the 2009 compensation year. The Committee anticipates reviewing the terms of these forfeiture provisions in light of relevant evolving market practices and regulatory guidance and may in the future alter its approach on this element of its compensation practices, as applied to future incentive compensation awards, to enhance its alignment with those practices and guidance, including by modifying the events upon which a reduction or cancellation of the relevant compensation may occur.

Retirement Benefits

Our named executive officers are eligible to participate in our 401(k) defined contribution retirement plan available to our employees generally. This 401(k) plan includes a discretionary performance-based element. We did not make any contributions to the 401(k) plan under this performance-based element in either 2011 or 2012. Effective April 2012, we have also reduced the employer matching contribution to the 401(k) plan from 6% to 5%.

We also maintain a frozen qualified defined benefit pension plan for certain U.S. employees that determines benefits, in general, based on an account balance that is increased annually by interest credits. Each of our named executive officers, other than Mr. Powers, participates in this plan; no additional annual pay credits, however, are provided to their accounts. Because pension benefits under our qualified defined benefit plan are limited by Internal Revenue Code restrictions, we maintain two supplemental pension programs, both of which are frozen: one, with broader eligibility, that is designed to make up for limits imposed by the qualified plan or by the Internal Revenue Code on qualified-plan benefits, and a second that was originally designed to provide, together with other retirement programs, pension benefits for vested participants equal generally to a specified percentage of their compensation. The latter plan now provides for two separate benefit components: (1) a frozen traditional defined benefit component, in which all named executive officers, except for Mr. Powers, participate; and (2) a defined contribution component. These plans are described below under the heading “Pension Benefits as of December 31, 2011.”

Column (h) of the Summary Compensation Table on page 55 of this proxy statement presents, consistent with SEC rules, the 2011 change in pension value for each of our named executive officers participating in our defined benefit retirement programs. Those amounts represent the change in the actuarial present value of the accumulated benefits under our qualified and nonqualified defined benefit pension plans. As noted above, the plans are frozen and none of the named executive officers are receiving additional credits under the plans. The

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change in value presented in the Summary Compensation Table reflects a year-over-year update to applicable actuarial calculation assumptions from December 31, 2010 to December 31, 2011, including a decline in the relevant discount rate assumption resulting from a decline in market interest rates, as well as formula-driven changes due to an additional year of service and age. These updates resulted in increases in the actuarial present value of benefits at December 31, 2011. The table below describes the change in pension value and non-qualified deferred compensation earnings (as presented in the Summary Compensation Table), highlighting the split between (1) the amount attributable to additional service and age and (2) the amount attributable to the actuarial present value effect of the decline in interest rates. The change in pension value presented in the Summary Compensation Table and in the table below represent actuarial calculations based upon assumptions on the relevant dates. The actuarial present value of the accumulated pension benefits calculated on future dates may increase or decrease, based upon assumptions applicable on those future dates and on formula-driven changes due to additional service and age.

Deferred Compensation

We maintain a nonqualified deferred compensation plan that allows executive officers and others to defer both base salary and the cash portion of annual incentive bonuses and to receive a return based on one or more notional investment options selected by the participant. Currently, the investment options include a money market fund, three SSgA funds and a State Street common stock fund. The nonqualified deferred compensation plan supplements deferrals made under our tax-qualified 401(k) plan. We provide these nonqualified deferred compensation benefits because, in our experience, most companies of our size provide a similar benefit to their senior employees. This plan is described below under the heading “2011 Nonqualified Deferred Compensation.”

Perquisites

We provide a modest level of perquisites, such as financial planning, annual physicals and personal liability coverage, to our named executive officers. We provide these benefits because we believe that some level of personal benefits is necessary as part of a competitive compensation arrangement for senior executives. In addition, we provide a driver and other security benefits to our chief executive officer and vice chairman, and we offer parking benefits to our other named executive officers. We do not provide a tax gross-up for the income attributable to any perquisite for our named executive officers.

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Change of Control Agreements

The general structure of our change of control agreements with our named executive officers was put in place several years ago after consideration of appropriate measures to retain key employees in light of a then-threatened hostile bid to acquire State Street. The terms of the agreements have been revised on separate occasions, most recently in 2009, as part of the Committee’s review of the purpose and benefits of these agreements, in light of evolving market practices and trends. Under this program each of our named executive officers is a party to an agreement entitling him to specified change of control benefits. We have continued to provide these agreements because we believe that providing some protection in the event of a change of control is necessary to attract and retain high quality executives and to keep their attention on the business during the period leading up to a possible change of control. Our change in control arrangements are further described below under the heading “Potential Payments Upon Termination Or Change of Control – Change of Control.”

Executive Equity Ownership Guidelines, Practices and Policies

State Street believes that executive stock ownership is an important mechanism to promote alignment of our executives’ interests with those of our shareholders and to effectively incent our executives to meet our financial, operational and strategic goals. In order to foster these benefits appropriately, we have implemented several practices, policies and guidelines. These include:

Stock Ownership Guidelines. We have stock ownership guidelines that apply to all executive officers. The target level of stock ownership is the lesser of 100,000 shares or shares valued at $5,000,000 for the chief executive officer, the lesser of 40,000 shares or shares valued at $2,000,000 for other members of our Management Committee, representing our senior-most policy making executive officers, and 10,000 shares or shares valued at $500,000 for other executive officers. The level of ownership is calculated on the date that we use for the beneficial ownership table in our annual meeting proxy statement and by reference to the closing price of our common stock on the NYSE on that date. The achievement of these levels is phased-in over a period of five years, with the first year commencing on the first January 1 after the person becomes an executive officer. The executive is expected to attain the expected ownership level ratably over five years. As of March 1, 2012, the stock ownership of each of our named executive officers exceeded the expected level of ownership under these guidelines.

Securities Trading Policy; No Hedging or Speculative Trading; Rule 10b5-1 Plans. State Street has a Securities Trading Policy, reviewed and approved annually by the Board of Directors, that contains specific provisions and trading restrictions designed primarily to assist our executive officers, and other designated employees with access to sensitive information, in their compliance with U.S. federal securities laws in connection with their trading in State Street securities. The policy also contains prohibitions against selling State Street securities short, engaging in options trading or hedging transactions in State Street securities and engaging in speculative trading in State Street securities. Limited exceptions to these prohibitions, relating to events associated with equity compensation and employee benefit plans, apply. The policy contemplates that individuals, including our executive officers, may enter into trading plans designed to comply with Rule 10b5-1 under the Exchange Act. Rule 10b5-1 allows corporate executives to prearrange sales of their company’s securities in a manner that avoids concerns about initiating stock transactions while in possession of material non-public information. Our executive officers may, from time to time, adopt trading plans under Rule 10b5-1 and effect transactions in our securities under those plans on a predetermined basis. The Securities Trading Policy is in addition to the generally applicable requirements in the State Street Standard of Conduct, applicable to all employees, that their trading activities must be in compliance with applicable law and that they may not trade on the basis of material non-public information.

Equity Grant Policy. The Compensation Committee has adopted an Equity Grant Policy of general applicability, as described below:

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Except for the setting of the February or March meeting to occur after our public release of annual earnings, there was no program, plan or practice with respect to 2011 of timing equity awards in coordination with the release of material non-public information.

Compensation Committee Report

The Compensation Committee furnishes the following report:

The Committee has reviewed and discussed the Compensation Discussion and Analysis with State Street management. Based on this review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Alignment of Incentive Compensation and Risk

As noted above under the heading “Compensation Discussion and Analysis – Overview – Compensation Committee Process and Risk Alignment,” an area of particular focus for the Compensation Committee in 2011 was the alignment of incentive compensation with risk. The Compensation Committee receives regular updates on regulatory and governmental actions and guidance concerning compensation and related risk and governance matters, particularly with respect to the financial services industry. For 2011, these updates focused primarily on: proposed and final rulemaking under the Dodd-Frank Act, including a proposed rule issued by the Board of Governors of the Federal Reserve System and other banking agencies in March 2011 regarding incentive compensation arrangements; regulatory reviews of our incentive compensation practices; and proposed and final guidance and regulations from national and multi-national banking regulators in Europe and Asia concerning compensation and risk principles. The Committee also received updates on compensation actions, including new design elements, taken by other major financial services firms. These developments focused primarily on aligning compensation with risk principles, and each informed the decisions of the Committee in making its incentive compensation decisions for 2011.