☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to §240.14a-12 |
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☐ | 14a-6(i)(1) and | |||
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FLUSHING FINANCIAL CORPORATION
220 RXR Plaza
Uniondale, New York 11556
(718)961-5400
April 16, 20206, 2023
Dear Stockholder:Shareholder:
You are cordially invited to attend the annual meeting of stockholdersshareholders of Flushing Financial Corporation. The annual meeting will be held at the RXR Plaza Conference Center located at 625 RXR Plaza, Lobby Level, Uniondale, New York 11556,Corporation on May 26, 202016, 2023 at 1:00 p.m., New York time. As part of our precautions regarding the coronavirus orCOVID-19, we are planning for the possibility that theThe annual meeting maywill be held solelyin a virtual-only format.
Shareholders will not be able to attend the 2023 annual meeting in-person at a physical location. However, the virtual 2023 annual meeting will provide shareholders of record as of the close of business on March 22, 2023, the ability to vote their shares and submit questions during the meeting via the virtual annual meeting interface.
If you are a shareholder of record, to sign in to the virtual annual meeting go to www.virtualshareholdermeeting.com/FFIC2023. You will need the 16-digit control number included on your proxy card or Important Notice Regarding the Availability of Proxy Materials (the “Notice”) to register. Beneficial owners of shares held in street name will need to follow the instructions provided by means of remote communication. If we takethe broker, bank or other nominee that holds their shares. Only one shareholder per 16-digit control number can access the virtual annual meeting. We encourage shareholders to log in to this step, we will announcewebsite and access the decision to do so in advance, and details on how to participate will be available athttps://investor-relations.flushingbank.com/.webcast before the virtual annual meeting start time.
The matters to be considered by stockholdersshareholders at the annual meeting are described in the accompanying materials.
It is very important that you be represented at the annual meeting regardless of the number of shares you own. Whether or not you plan to attend the meeting in person, we urge you to vote as soon as possible. You may vote over the Internet, by telephone, or by signing, dating, and returning a proxy card. Voting over the Internet, by telephone or by written proxy will not prevent you from voting in person,during the virtual annual meeting but will ensure that your vote is counted if you are unable to attend.attend the virtual annual meeting. Please review the instructions on the Important Notice Regarding the Availability of Proxy Materials or proxy card regarding each of these voting options.
Your continued support of and interest in Flushing Financial Corporation are sincerely appreciated.
Sincerely, | ||||
Alfred A. DelliBovi | John R. Buran | |||
Chairman of the Board | President and Chief Executive Officer |
FLUSHING FINANCIAL CORPORATION
220 RXR Plaza
Uniondale, New York 11556
(718)961-5400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS
DATE & TIME: | May | |
PLACE: |
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ITEMS OF BUSINESS: | To elect
To approve, on an advisory basis, the Company’s executive compensation; | |
To vote, on an advisory basis, on the frequency of future advisory votes on executive compensation; | ||
To ratify the appointment of BDO USA, LLP by the Audit Committee of the Board of Directors as the Company’s independent registered public accounting firm for the fiscal year ending December 31,
To transact such other business as may properly come before the meeting or any adjournment thereof. | ||
RECORD DATE: | You are entitled to vote at the annual meeting or any adjournment of that meeting only if you were a | |
VOTING BY PROXY: | Please submit a proxy as soon as possible so that your shares can be voted at the meeting in accordance with your instructions. You may submit your proxy (1) over the Internet, (2) by telephone, or (3) by mail. For specific instructions, please refer to the information in the proxy statement and the instructions on the Important Notice Regarding Availability of Proxy Materials or proxy card. |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 16, 2023: The Proxy Statement and our Annual Report to Shareholders for the year ended December 31, 2022 are available at https://materials.proxyvote.com/343873.
BY ORDER OF THE BOARD OF DIRECTORS,
Maria A. Grasso
Corporate Secretary
Uniondale, New York
April 16, 20206, 2023
FLUSHING FINANCIAL CORPORATION
220 RXR Plaza
Uniondale, New York 11556
(718)961-5400
PROXY STATEMENT
Annual Meeting of StockholdersShareholders
To be held on May 26, 202016, 2023
TABLE OF CONTENTS
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Corporate Responsibility and Environmental, Social and Governance Strategies | 15 | |||
Transactions with Related Persons, Promoters and Certain Control Persons | ||||
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Determining Executive Compensation and the Role of the Consultant | ||||
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PROPOSAL NO. 3 ADVISORY VOTE ON THE FREQUENCY OF STOCKHOLDER ADVISORY VOTESON EXECUTIVE COMPENSATION | 58 | |||
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Independent Registered Public Accounting Firm Fees and Services | 60 | |||
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING | ||||
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This proxy statement is furnished to holders of common stock, $0.01 par value per share, of Flushing Financial Corporation (the “Company”), which is the sole stockholdershareholder of Flushing Bank. In this proxy statement we use the term “the Bank” to mean Flushing Bank. Proxies are being solicited on behalf of the Board of Directors of the Company (the “Board of Directors” or “Board”) to be used at the annual meeting of stockholdersshareholders to be held atin a virtual-only format. If you are a shareholder of record, to sign in to the RXR Plaza Conference Center located at 625 RXR Plaza, Lobby Level, Uniondale, New York 11556 virtual annual meeting go to www.virtualshareholdermeeting.com/FFIC2023 at 1:00 p.m., New York time, on May 26, 202016, 2023 and at any adjournment thereof. Only holders of record of the Company’s issued and outstanding common stock as of the close of business on the record date, March 30, 2020,22, 2023, are entitled to notice of and to vote at the annual meeting and any adjournments thereof. We are not mailing the proxy statement and related materials to all stockholders.shareholders. Instead, the proxy statement, the accompanying notice of annual meeting of stockholders,shareholders, the form of proxy, and the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 20192022 can be accessed over the Internet. Printed proxy materials will be mailed to stockholdersshareholders only upon request. All persons who are entitled to vote at the annual meeting will receive in the mail (or by email, if they have agreed to delivery in such manner) an Important Notice Regarding the Availability of Proxy Materials that describes how to access our proxy materials. We will begin distributing the Important Notice Regarding the Availability of Proxy Materials on or about April 16, 2020.6, 2023.
Voting Rights and Quorum Requirement
StockholdersShareholders of record as of the close of business on March 30, 2020,22, 2023, the record date, are entitled to one vote for each share of common stock then held. On the record date, there were 28,213,60229,488,456 shares of common stock outstanding and entitled to be voted and the Company had no other class of equity securities outstanding. Holders of a majority of the outstanding shares of common stock must be present at the annual meeting, either in person or represented by proxy to constitute a quorum for the conduct of business. In order to ensure a quorum, you are requested to vote by proxy even if you plan to attend the annual meeting in person.virtually. You may vote over the Internet, by telephone, or by signing, dating, and returning a proxy card.
Voting over the Internet or by Telephone
If your shares are registered in your name with our transfer agent, you may vote either over the Internet or by telephone. Specific instructions for voting over the Internet or by telephone are set forth on the Important Notice Regarding the Availability of Proxy Materials. These procedures are designed to authenticate each stockholder’sshareholder’s identity and to allow stockholdersshareholders to vote their shares and confirm that their instructions have been properly recorded.
If your shares are registered in the name of a bank or brokerage firm, you may also be able to vote your shares over the Internet or by telephone. A large number of banks and brokerage firms are participating in online programs that allow eligible stockholdersshareholders to vote over the Internet or by telephone. If your bank or brokerage firm is participating in such a program, your voting form will provide instructions. If your voting form does not contain Internet or telephone voting information, please complete and return the paper proxy card in the self-addressed, postage-paid envelope provided by your bank or brokerage firm.
The proxy solicited by this proxy statement, if properly signed and received by the Company in time for the annual meeting, or properly transmitted by telephone or the Internet, and not revoked prior to its use, will be voted in accordance with the instructions it contains. If you return or transmit a proxy without specifying your
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voting instructions, the proxy will be voted FOR election of the nominees for director described herein, FOR the advisory approval of the Company’s executive compensation, ANNUALLY for the frequency of future advisory votes on executive compensation, and FOR ratification of the selection of
BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020.2023. With respect to the transaction of such other business as may properly come before the meeting, each proxy received will be voted in accordance with the best judgment of the persons appointed as proxies. At this time, the Board of Directors knows of no such other business.
If you give a proxy, you may revoke it at any time before it is voted by (1) filing written notice of revocation with the Corporate Secretary of the Company (Corporate Secretary, Flushing Financial Corporation, 220 RXR Plaza, Uniondale, New York 11556); (2) submitting a duly executed proxy bearing a later date; or (3) appearing atattending the virtual only annual meeting and giving the Corporate Secretary notice of your intention to vote in person.vote.
You may either vote for, against, or abstain on each of the proposals. The election of each director nominee, the advisory approval of the Company’s executive compensation and the approvalratification of each other proposal requiresthe appointment of the independent registered public accounting firm require the affirmative vote of a majority of the votes cast (whether in person or represented by proxy), assuming a quorum is present at the meeting. A majority of votes cast means that the number of shares voted “for” a proposal exceeds the number of shares voted “against” that proposal. The advisory vote on the frequency of future advisory votes on executive compensation asks shareholders to express their preference for having such votes every one, two, or three years. We will consider shareholders to have expressed a preference for the frequency that receives the highest number of favorable votes.
New York Stock Exchange (“NYSE”) rules determine whether proposals are routine or not routine. If a proposal is routine, a broker holding shares for an owner in street name may vote for the proposal without voting instructions. If a proposal is not routine, the broker may vote on the proposal only if the owner has provided voting instructions. If a broker does not receive voting instructions for anon-routine proposal, the broker will return a proxy card without a vote on that proposal, which is usually referred to as a “brokernon-vote.” Under current NYSE rules, brokers have discretionary authority to vote shares held in street name with respect to the ratification of the appointment of the independent registered public accounting firm, but not on the election of directors or the advisory approval of the Company’s executive compensation.any other proposal.
Abstentions and brokernon-votes are considered present for purposes of determining the presence of a quorum. Abstentions and brokernon-votes are not “votes cast” on a proposal, so they will have no effect on the outcome of any proposal.
Cost of Solicitation of Proxies
The cost of solicitation of proxies will be borne by the Company. In addition to the solicitation of proxies by mail, Morrow Sodali, LLC, a proxy soliciting firm, will assist the Company in soliciting proxies for the annual meeting and will be paid a fee of $7,500, plus reimbursement forout-of-pocket expenses. Proxies also may be solicited personally or by telephone or telecopy by directors, officers and employees of the Company or the Bank, without additional compensation to these individuals. The Company will also request persons, firms and corporations holding shares in their names, or in the name of their nominees, which are beneficially owned by others, to send proxy materials to and obtain proxies from such beneficial owners and will reimburse such holders for reasonable expenses incurred in connection therewith.
Internet Availability of Proxy Materials
The Company’s proxy statement and annual report to stockholdersshareholders for the year ended December 31, 20192022 are available athttps://materials.proxyvote.com/343873.
ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of 11eleven directors divided into three classes. The directors hold office for staggered terms of three years (and until their successors are elected and qualified). One of the three classes is elected each year to succeed the directors whose terms are expiring. The directors in Classes B and C are serving terms expiring at the annual meeting of stockholdersshareholders in 20212024 and 2022,2025, respectively.
The directors in Class A, whose terms expire at the 20202023 annual meeting, are John J. McCabe, Donna M. O’Brien, Michael J. Russo, and Caren C. Yoh. Each of these directors has been nominated by the Board of Directors, upon the recommendation of its Nominating and Governance Committee, to stand for election for a term expiring at the annual meeting of stockholdersshareholders to be held in 2023.2026. Each of these nominees has consented to being named in this proxy statement as a Board nominee and to serve if elected.
Unless otherwise instructed, it is the intention of the proxy holders to vote the proxies received by them in response to this solicitation FOR the election of the nominees named above as directors. If any such nominee should refuse or be unable to serve, the proxies will be voted for such person as shall be designated by the Board of Directors as recommended by the Nominating and Governance Committee to replace such nominee. The Board of Directors has no reason to believe that any of the Board nominees will refuse or be unable to serve as a director if elected.
Because this election is uncontested, directors are elected by a majority of the votes cast “for” or “against” the nominee at the virtual annual meeting in person or represented by proxy (the number of shares voted “for” a nominee must exceed the number of shares voted “against” the nominee). Votes may be cast “for” or “against” each nominee, or a shareholder may abstain from voting for one or more nominees. If there is a contested election (which is not the case in 2020)2023), directors would be elected by a plurality of votes cast. Pursuant to applicable Delaware law and ourby-laws, abstentions and brokernon-votes will have no effect on the outcome of the vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“FOR” ELECTION OF THE ABOVE NOMINEES AS DIRECTORS.
The following table sets forth certain information regarding the Board nominees and members of the Board of Directors of the Company.
Name | Age(1) | Position(s) with the Company | Director Since(2) | Term Expires | Age(1) | Position(s) with the Company | Director Since(2) | Term Expires | ||||||||||||||||
Alfred A. DelliBovi | 73 | Chairman of the Board | 2014 | 2022 | 76 | Chairman of the Board | 2014 | 2025 | ||||||||||||||||
Michael A. Azarian. | 68 | Director | 2019 | 2021 | ||||||||||||||||||||
Michael A. Azarian | 71 | Director | 2019 | 2024 | ||||||||||||||||||||
John R. Buran | 70 | President, Chief Executive Officer and Director | 2003 | 2022 | 73 | President, Chief Executive Officer and Director | 2003 | 2025 | ||||||||||||||||
James D. Bennett | 81 | Director | 1998 | 2022 | 84 | Director | 1998 | 2025 | ||||||||||||||||
Steven J. D’Iorio | 70 | Director | 2004 | 2021 | 73 | Director | 2004 | 2024 | ||||||||||||||||
Louis C. Grassi | 64 | Director | 1998 | 2021 | 67 | Director | 1998 | 2024 | ||||||||||||||||
Sam S. Han | 66 | Director | 2007 | 2021 | 69 | Director | 2007 | 2024 | ||||||||||||||||
Douglas C. Manditch | 75 | Director | 2020 | 2025 | ||||||||||||||||||||
John J. McCabe | 76 | Director | 2003 | 2020 | (2) | 79 | Director | 2003 | 2023 | (2) | ||||||||||||||
Donna M. O’Brien | 64 | Director | 2004 | 2020 | (2) | 67 | Director | 2004 | 2023 | (2) | ||||||||||||||
Michael J. Russo | 85 | Director | 1984 | 2020 | (2) | |||||||||||||||||||
Caren C. Yoh | 60 | Director | 2015 | 2020 | (2) | 63 | Director | 2015 | 2023 | (2) |
(1) | As of December 31, |
(2) | Nominee forre-election at the |
Set forth below is certain information with respect to the nominees and other directors of the Company. Unless otherwise indicated, the principal occupation listed below for each person has been his or her principal occupation for the past five years. In addition, described below are each director’s particular experiences, qualifications, attributes or skills that contributed to the Board’s conclusion that the person should continue to serve as a director of the Company.
John J. McCabeserved as Chief Equity Strategist of Shay Assets Management, Inc. for over 20 years and asco-manager of the AMF Large Cap Equity Fund managed by Shay Assets Management, until his retirement in December 2015. He has also served as Managing Director of Sterling Manhattan Corp., an investment banking firm, and spent 19 years at Bankers Trust Company serving in various capacities, including Managing Director of the Investment Management Group, Director of Investment Research and member of the Senior Investment Policy Committee. Mr. McCabe is a past director of the New York Society of Security Analysts, having served twice as its President. He is a past Governor of the CFA Institute.
Mr. McCabe brings long-time experience in the securities industry and fund management business, as well as a background of investment banking, to the Company andwhich makes him a valuable member of our Board of Directors.
Donna M. O’Brienis President of Strategic Visions in Healthcare, LLC, a healthcare strategy/policy consulting firm with particular expertise in cancer program planning. With over 25 years of healthcare experience in academic medical centers, multi-institutional health systems and community hospitals, her management positions have included being the Executive Vice President of the Catholic Health System of Long Island (a $1.8 billion regional health system) where she led the formation of the system, and at the University of Texas MD Anderson Cancer Center in Houston where she was responsible for inpatient operations.Houston. Ms. O’Brien has served as a Special Advisor to the Director of the National Cancer Institute. She has served on numerous healthcare organization boards across the country and is currently a member of the Board of Trustees of the College of Holy Cross and on the Board of Directors of the International Cancer Expert Corps. She was a member of the Governor of New York State’s Commission on Healthcare Facilities for the Twenty First Century
Ms. O’Brien’s long history in senior administrative and managementexecutive positions and her experience on other boards makes her a valuable member of our Board of Directors.
Michael J. Russois self-employed as a consulting engineer and serves as Chief Executive Officer and Corporate Secretary of Fresh Meadow Mechanical Corp., a mechanical contracting firm. Mr. Russo is President and Director of Operations of Northeastern Aviation Corp., an aircraft charter and management firm, and is a partner in AMF Associates, a commercial real estate company. Mr. Russo also serves as Chairman of the Board of Trustees of Flushing Hospital Medical Center. Prior to retiring in 2004, Mr. Russo served as Chairman of the Board of Anthony Russo, Inc., a general contracting firm, for over 40 years.
Mr. Russo’s executive experience in a variety of businesses, his knowledge of the Company’s marketplace and his ties to the Company’s community make him a valuable member of our Board of Directors.
Caren C. Yohis the owner of a full service accounting firm in Flushing, Queens since 1989. Ms. Yoh is a Certified Public Accountant and is well known for her expertise in auditing, taxation and estate planning. Ms. Yoh has held various board positions with several business and community organizations including the Asian Advisory Board for Flushing Bank, Flushing Business Improvement District (BID), Flushing Chinese Business Association, New York Hua Liu Tsu Hui Buddhist Temple, Chinese American Women Commerce Association, and LaGuardia Community College Foundation. She also served as President of the Chinese American Entrepreneur Association.
Ms. Yoh’s accounting, tax and management expertise and her general understanding of controls, as well as her firm leadership background, make Ms. Yoh a valuable member of our Board of Directors.
Alfred A. DelliBovihas been Chairman of the Board of Directors of the Company and the Bank since February 3, 2017. He served as President and Chief Executive Officer of the Federal Home Loan Bank of New York (“FHLBNY”) until his retirement in April 2014. During his 21 years at the helm of the FHLBNY, he led a team of financial professionals growing the bankten-fold to $120 billion in assets. The FHLBNY is a wholesale bank that provides liquidity to 330 neighborhood-based lenders in New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands. In December 2011, Mr. DelliBovi was named to the Housing Commission of the Bipartisan Policy Center in Washington, D.C. He served as Deputy Secretary of the U.S. Department of Housing and Urban Development from 1989 until 1992.
Mr. DelliBovi’s extensive knowledge of and business and government experience in the banking industry in which the Company operates, makes Mr. DelliBovi a valuable member of our Board of Directors.
Michael A. Azarianjoined the Board of Directors of the Company and the Bank on February 26, 2019. From 2013 to 2017 he served as Managing Director, Global Consumer Technology Executive at Citibank where he was responsible for the Retail Bank implementation of advanced customer servicing and global common operational processes. Although Mr. Azarian retired from Citibank in 2017, since2017. From June 2018 through July 2021, he has beenwas an Advisory Board Member of CxOCXO Nexus, Inc., which provides automated, role-specific advice to simplify and optimize category and vendor spend management tasks. In August of 2021 Mr. Azarian became a member of the board of directors of CXO Nexus, Inc.
Mr. Azarian’s business experience, with more than 40 years of diversified technology operations experience in the financial services industry, including over 30 years at two industry leaders, JPMorgan Chase and Citigroup, makes Mr. Azarian a valuable addition tomember of our Board of Directors.
James D. Bennettis Chief Executive Officer of Land Enterprises, Inc., a realty investment and management firm. He served as of counsel with the law firm of Farrell, Fritz, P.C. in Uniondale, New York, with a practice in civil law and real estate, until his retirement in August 2015. Prior to July 2001, Mr. Bennett was a partner in the realty law firm of Bennett, Rice & Schure, LLP in Rockville Centre, New York. In the past, he has served as a Trustee of both the Long Island Power Authority and the New York State Conservation Fund Advisory Council, as Supervisor and a Councilman of the Town of Hempstead, and as a Commissioner of the New York State Public Service Commission.
Mr. Bennett’s legal background, including in particular his extensive knowledge and experience as a real estate lawyer practicing in the Company’s marketplace, in light of the importance to the Company of real estate as loan collateral and the retail nature of its branches, makes Mr. Bennett a valuable member of our Board of Directors.
John R. Buran is President and Chief Executive Officer and a Director of the Company and the Bank. He has served as President and Chief Executive Officer of the Company and the Bank since July 2005. He has been a Director of the Company and the Bank since 2003. Prior to that, he served as Executive Vice President and Chief Operating Officer of the Company and the Bank from January 2001 until June 2005. Prior to joining the Company, Mr. Buran held a variety of positions within the Bankingbanking industry, including Executive Vice President of the New York Metro Division of Fleet Bank and Vice President New York Investment Sales at Citibank. He is a former Chairman of the Board and current director of the New York Bankers Association. In 2017 he was electedHe is Chairman of the Board of Thethe Federal Home Loan Bank of New York where he has served as a director since 2010. He served asis a former Director of the Nassau County Interim Finance Authority appointed by Governor Andrew Cuomo from 2012 until January 2020.where he served for eight years.
Mr. Buran’s experience with the Company and his career-long experience in the Bankingbanking industry, including at some of the nation’s largest banks, his community and other activities connecting him to the Company’s marketplace and his extensive knowledge of Banking regulations and other matters as applicable specifically to the Company, make him a valuable member of our Board of Directors. In addition, Mr. Buran’s leadership
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during recent adverse macro-economic circumstances including the Great Recession and the coronavirus pandemic especially qualifies him as a Board member to meet future such challenges.
Alfred A. DelliBovi has been Chairman of the Board of Directors of the Company and the Bank since February 3, 2017. He served as President and Chief Executive Officer of the Federal Home Loan Bank of New York (“FHLBNY”) until his retirement in April 2014. During his 21 years at the helm of the FHLBNY, he led a team of financial professionals growing the bank ten-fold to $120 billion in assets. The FHLBNY is a wholesale bank that provides liquidity to 330 neighborhood-based lenders in New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands. He served as Deputy Secretary of the U.S. Department of Housing and Urban Development from 1989 until 1992. Nominated by President George H.W. Bush, he was confirmed by a unanimous vote of the United States Senate. In addition to serving as the Chief Operating Officer of HUD, in the absence of The Secretary, he served as a voting member of the Resolution Trust Corporation Oversight Board; the Federal Housing Finance Board; and the Interim Board of Freddie Mac.
Mr. DelliBovi’s experience in the banking industry in which the Company operates, coupled with his extensive knowledge of business and government, makes Mr. DelliBovi a valuable member of our Board of Directors.
Steven J. D’Iorio has over 40 years of experience in real estate development and project management, hemanagement. He is a Senior Vice President in Jones Lang LaSallean Executive Managing Director of Project and Development Services group.at Cushman and Wakefield. Mr. D’Iorio manages and executes complex multi-disciplined projects and delivers responsive high quality and cost effective solutions to a diverse array of clients on a global basis.
Mr. D’Iorio’s knowledge of and business experience ofin the real estate market in which the Company operates, in light of the importance to the Company of real estate as loan collateral and the retail nature of its branches, makes Mr. D’Iorio a valuable member of our Board of Directors.
Douglas C. Manditch joined the Board of Directors of the Company and the Bank on November 1, 2020. Prior to joining the Bank, he served as the Chairman of the Board and Chief Executive Officer of Empire Bancorp, Inc. and Empire National Bank since their respective inceptions. Mr. Manditch is a 55-year veteran of the banking industry and has served his entire banking career on Long Island. He served as President and Chief Executive Officer and a director of Long Island Commercial Bank and its holding company, Long Island Financial Corp., from its formation in 1987 until its sale to New York Community Bancorp, Inc. in December 2005. He has also held senior management positions with National Bank of New York City, North Fork Bank and First National Bank of Long Island.
In addition to his banking activities, Mr. Manditch serves on the Board of The Clark Gillies Foundation; the YMCA of Long Island; Island Harvest; the Richard J. O’Brien Foundation; as past Chairman of the New York Bankers Association, Long Island Division; and past Chairman of Independent Bankers Association of New York. He has served on the Board of the Monsignor Thomas Hartman Foundation for Parkinson’s Research, Inc.; Vice Chairman of the Honorary Board of the Suffolk County Coalition Against Domestic Violence; an Honorary Member of The Friends of Sagamore Hill; the Theodore Roosevelt Council of the Boy Scouts of America; Vice Chairman of the Board of Trustees of St. Charles Hospital in Port Jefferson; and Trustee of the Long Island Museum of American Art, History & Carriages in Stony Brook.
Mr. Manditch’s long history in banking and his experience on other boards makes him a valuable member of our Board of Directors.
Louis C. Grassi is Managing Partner and Chief Executive Officer of Grassi & Co., located in Jericho and New York City, with a practice in accounting, tax, technology and management consulting services. He is a licensed Certified Public Accountant and Certified Fraud Examiner, an author and an editor of a national tax and accounting publication. Mr. Grassi is a member of the Board of Directors of BRT Realty Trust. Mr. Grassi is board chair of Moore Stephens North America, a network of accounting and consulting firms.
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Mr. Grassi’s accounting, tax and management expertise, including in particular his experience as a fraud examiner and his general understanding of controls, as well as his firm leadership background, make Mr. Grassi a valuable member of our Board of DirectorsDirectors.
Sam S. Han is President and Founder of The Korean Channel, Inc. and has over 30 years of business experience within the broadcast media industry. Mr. Han started the first Korean-American cable TV station in 1985, which is today the premiere 24 hour Korean broadcasting company servicing the East Coast on Time Warner,Charter Communications, Altice Cablevision, and DirectTV. Mr. Han serves as a member of the Board of Trustees of Flushing Hospital Medical Center and is the founder of Arirang Foundation, anon-profit organization whose mission is to support future generations of Korean-American leaders. Mr. Han was an advisor and member of the Board of Flushing Town Hall from 1998 to 2008.
Mr. Han’s successful business background and his strong personal and professional connection to the markets served by the Company, coupled with his long-time work in the Korean-American communities served by the Company, add to our diversity and make him a valuable member of our Board of Directors.
Director Skills Assessment and Board Diversity
The matrix below summarizes certain skills, experiences, and attributes that our directors bring to the Board to enable effective oversight. The matrix is intended to provide a summary of our director qualifications and is not all inclusive of each director’s strengths or contributions to the Board. Additional details on each director are set forth in their biographies above.
Skills Assessment | DelliBovi | Azarian | Bennett | Buran | D’Iorio | Grassi | Han | Manditch | McCabe | O’Brien | Yoh | |||||||||||||||||||||||||||||||||
Leadership | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||||||
Corporate Governance & Oversight | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||||||
Local Markets | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||||||||
Banking | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||||||
Real Estate | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||||||||||||||||||||||||
Accounting/Finance | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||||||||||||
Technology/Cybersecurity | ✓ | |||||||||||||||||||||||||||||||||||||||||||
Government | ✓ | ✓ | ||||||||||||||||||||||||||||||||||||||||||
Legal | ✓ | |||||||||||||||||||||||||||||||||||||||||||
Tenure and Independence | ||||||||||||||||||||||||||||||||||||||||||||
Director Tenure (years) | 8 | 3 | 24 | 19 | 18 | 24 | 15 | 2 | 19 | 18 | 7 | |||||||||||||||||||||||||||||||||
Independence | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||||||||
Demographics | ||||||||||||||||||||||||||||||||||||||||||||
Age | 76 | 71 | 84 | 73 | 73 | 67 | 69 | 75 | 79 | 67 | 63 | |||||||||||||||||||||||||||||||||
Gender Identity | M | M | M | M | M | M | M | M | M | F | F | |||||||||||||||||||||||||||||||||
African American or Black | ||||||||||||||||||||||||||||||||||||||||||||
Alaskan Native or Native American | ||||||||||||||||||||||||||||||||||||||||||||
Asian | ✓ | ✓ | ||||||||||||||||||||||||||||||||||||||||||
Hispanic or Latinx | ||||||||||||||||||||||||||||||||||||||||||||
Native Hawaiian or Pacific Islander | ||||||||||||||||||||||||||||||||||||||||||||
White | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||||||||
LGBTQ+ |
Executive Officers Who Are Not Directors
The following persons currently serve as executive officers who are not directors of the Company.
Name | Age(1) | Position(s) with the Company | ||
Michael Bingold | Senior Executive Vice President, Chief Retail and Client Development Officer | |||
Thomas M. Buonaiuto | 57 | Senior Executive Vice President, Chief of Staff and Deposit Channel Executive | ||
Susan K. Cullen | Senior Executive Vice President, Treasurer and Chief Financial Officer | |||
Maria A. Grasso | Senior Executive Vice President, Chief Operating Officer and Corporate Secretary | |||
Francis W. Korzekwinski | Senior Executive Vice President and Chief of Real Estate Lending | |||
Douglas J. McClintock | 74 | Senior Executive Vice President and General Counsel | ||
Astrid Burrowes | Executive Vice President, Chief Accounting Officer | |||
Theresa Kelly | Executive Vice President, Business Banking |
(1) | As of December 31, |
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Set forth below is certain information with respect to the executive officers who are not directors of the Company.
Michael Bingold has been Senior Executive Vice President/Chief Retail and Client Development Officer of the Company since December 2019. Prior to that, he had been Executive Vice President/Director of Distribution and Client Development of the Company since August 2014. Mr. Bingold joined the Company in May 2013 as Senior Vice President/Chief of Staff. Prior to joining the Company, he was Small Business Region Director for New York City, Boston and Florida at Citibank from 2010 to 2013. Prior to this position, he held various senior manager positions at Citibank, including East Division Sales Director, Mass Affluent Sales Director and Area Director.
Thomas M. Buonaiuto has been Senior Executive Vice President/Chief of Staff and Deposit Channel Executive of the Company since November 2020. Prior to that, he had been President and Chief Operating Officer, and a director of Empire Bancorp Inc. and Empire National Bank since their respective inceptions. Mr. Buonaiuto served as Executive Vice President and Chief Financial Officer of Union State Bank until its acquisition by KeyCorp in 2007. Prior to this, Mr. Buonaiuto was Executive Vice President and Chief Financial Officer of the Long Island Commercial Bank, and its holding company Long Island Financial Corp., and served in that capacity until its acquisition by New York Community Bancorp in 2005.
Susan K. Cullen has been Senior Executive Vice President, Treasurer and Chief Financial Officer of the Company since February 2016. Ms. Cullen joined the Company in August 2015 as Executive Vice President/Chief Accounting Officer. Prior to joining the Company, she held the positions of Executive Vice President/SEC Reporting and Investor Relations, from January 2014 to July 2015, and Executive Vice President/Chief Risk Officer, from June 2012 to January 2014, at Hudson Valley Bank. Prior to Hudson Valley Bank, she was an audit partner with Grant Thornton, LLP in the Financial Service Practice. Ms. Cullen is a Certified Public Accountant.
Maria A. Grassohas been Senior Executive Vice President and Chief Operating Officer of the Company since January 2014. Ms. Grasso had been Executive Vice President and Chief Operating Officer of the Company since May 2006. Prior to joining the Company, she was Senior Vice President of the Long Island Queens Division of The Bank of New York. From 1997 to 2002, she was Senior Vice President NY Metro Division of Fleet Bank, N.A. Prior to that, she held several senior management positions at NatWest Bank and Chase Manhattan Bank, N.A.
Francis W. Korzekwinski has been Senior Executive Vice President and Chief of Real Estate Lending of the Company since January 2014. Prior to that, he had been an Executive Vice President and Chief of Real Estate Lending of the Company since December 2006. Mr. Korzekwinski joined the Company in 1993 as Assistant Vice President of Commercial Real Estate and was promoted to Vice President in 1995. Prior to joining the Company, Mr. Korzekwinski was Vice President, Mortgage Officer at Bankers Federal Savings Bank, FSB for five years. Prior to that, he served as Vice President of Secondary Marketing for a mortgage banking company.
Douglas J. McClintock has been Senior Executive Vice President and General Counsel of the Company since January 2022. Prior to joining the Company, he was Executive Vice President, General Counsel and Corporate Secretary of Emigrant Bank from July 2013 to May 2021, and a consultant for Emigrant Bank from June 2021 to November 2021. Prior to this, Mr. McClintock was a partner at Alston & Bird from September 2011 to July 2013, and a partner of Dentons from 2009 to 2011. Prior to that, Mr. McClintock was an associate and then a partner at Thacher Proffitt & Wood from 1975 to 2008.
Astrid Burrowes has been Executive Vice President/Controller of the Company since January 2016 and Executive Vice President/Chief Accounting Officer of the Company since February 2016. Prior to that she has been Senior Vice President and Controller of the Company since March 2008. Prior to joining the Company, from 1998 to 2008, she was Senior Vice President and Controller of Delta Financial Corporation, a mortgage banking company. From 1994 to 1998, she was with KPMG, LLP, a public accounting firm. From 1984 to 1994, Ms. Burrowes held various positions at Roslyn Savings Bank. Ms. Burrowes is a Certified Public Accountant.
Theresa Kelly has been Executive Vice President/Business Banking of the Company since January 2014. Prior to that, she had been Senior Vice President/Business Banking of the Company since May 2006. Prior to joining the Company, Ms. Kelly held various Senior Vice President positions within the Commercial Banking Group and Business Financial Services Group for Bank of America since 2000. Prior to her work at Bank of America, Ms. Kelly worked at Citibank as Senior Relationship Manager-Business and Professional Sales.
The following persons currently serve as officers of the Company.
Name | Age(1) | Position(s) with the Company | ||||
Allen M. Brewer | 70 | Senior Executive Vice President | ||||
Barbara A. Beckmann | 64 | |||||
| Executive Vice President | |||||
Ruth E. Filiberto | 64 | Executive Vice President | ||||
| 53 | Executive Vice President | ||||
James P. Jacovatos | 60 | Executive Vice President | ||||
| 56 | Executive Vice President | ||||
Gary P. Liotta | 63 | Executive Vice President | ||||
Rosina Manzi | 61 | Executive Vice President | ||||
Patricia Mezeul | 63 | Executive Vice President | ||||
| 49 | Senior Vice President | ||||
| 47 | Senior Vice President | ||||
Yan Nuriyev | 39 | Senior Vice President | ||||
Joanne Orelli | 56 | Senior Vice President | ||||
Albert H. Savastano | 50 | Senior Vice President | ||||
Patricia Tiffany | 64 | Senior Vice President | ||||
Richard A. White | 54 | Senior Vice President |
(1) | As of December 31, |
Allen M. Brewer has been Senior Executive Vice President/Chief Information Officer of the Company since December 2020. Prior to that, he had been Executive Vice President/Chief Information Officer of the Company since August 2014. Mr. Brewer joined the Company in December 2008 as Senior Vice President/Chief Information Officer. Prior to joining the Company, Mr. Brewer served as President of ALEL Management Corporation, a technology consulting firm, since 2007. Mr. Brewer held the position of Executive Vice President at Alliance Consulting, a global IT solutions organization servicing the financial services industry, from 2004 to 2008. Prior to that, Mr. Brewer served as Chief Information Officer of Corporate Systems at American International Group, Vice President at J.P. Morgan Chase, and Managing Director for Global Cash Management at Citigroup.
Barbara A. Beckmannhas been Executive Vice President/Director of Operations since January 2016. Prior to that she had been Senior Vice President/Director of Operations of the Company since February 2008. Ms. Beckmann joined the Company in 2006 as Vice President and Operations Manager. Prior to joining the Company, she was a Vice President and Division Operations Manager for The Bank of New York. From 1997 to 2004, she held several management positions at FleetBoston Financial, including Vice President, District Operations Manager and New York Risk Management Team Leader.
Allen M. Brewer has been Executive Vice President/Chief Information Officer of the Company since August 2014. Prior to that, he had been Senior Vice President/Chief Information Officer of the Company since December 2008. Prior to joining the Company, Mr. Brewer served as President of ALEL Management Corporation, a technology consulting firm, since 2007. Mr. Brewer held the position of Executive Vice President at Alliance Consulting, a global IT solutions organization servicing the financial services industry, from 2004 to 2008. Prior to that, Mr. Brewer served as Chief Information Officer of Corporate Systems at American International Group, Vice President at J.P. Morgan Chase, and Managing Director for Global Cash Management at Citigroup.
Ruth E. Filiberto has been Executive Vice President/Director of Human Resources of the Company since January 2016. Prior to that she had been Senior Vice President/Director of Human Resources of the Company since August 2007. Prior to joining the Company, Ms. Filiberto held various positions, including Vice President/Director, within the Human Resources department at First Data Corporation from 1993 to 2006.
Ronald Hartmann
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Vincent E. Giovinco has been Executive Vice President/Director of Commercial Real Estate Lending of the Company since January 2014. Prior to that, he had been a Senior Vice President/Commercial Real Estate Lending of the Company since February 2007. Mr. Hartmann joined the Company in December 1998 as Assistant Vice President/Loan Officer. Mr. Hartmann was promoted to Vice President/Loan Officer in 2000.April 2020. Prior to joining the Company, Mr. HartmannGiovinco was Vice President Commercial Real Estate Lending Officer for Long Island Savings Bank, and prior to that he served asFirst Senior Vice President in charge of Loan Workouts for Crossland Federal Savings Bank.
James P. Jacovatos has been Executive Vice President, Real Estate Credit Center Manager of the Company since January 2016. Prior to that, he had been Senior Vice President/Real Estate Credit Center Manager of the Company since joining the Company in June 2013. Prior to joining the Company, Mr. Jacovatos held various banking related consulting positions, and prior to that he served as President and CEO of Hanover Community Bank.
JeoungAlan J. (A.J.) Jinhas been Executive Vice President/Residential,Mixed-Use, and Small Multi-Family Real Estate Lending of the Company since January 2014. Prior to that, he had been Senior Vice President/Residential,Mixed-Use, and Small Multi-Family Real Estate Lending of the Company since February 2007. Mr. Jin joined the Company in July 1998 as Assistant Secretary/Commercial Loan Officer. Mr. Jin was promoted to Assistant Vice President/Commercial Loan officer in 2000 and to Vice President/Mortgage Loan Officer in 2002. Prior to joining the Company, Mr. Jin was Assistant Vice President, Consumer Lending Loan Officer at Korea Exchange Bank.
Gary P. Liotta has been Executive Vice President/Chief Risk Officer of the Company since August 2014. Prior to that, he had been Senior Vice President/Chief Risk Officer of the Company since April 2010. Prior to joining the Company, Mr. Liotta was Vice President of Investment Management for Morgan Stanley from 2002 to 2010. Prior to that, he was Vice President at Lehman Brothers and an Audit Manager for Ernst and Young. He has also held officer positions at the Federal Home Loan Bank of New York and JP Morgan Chase. Mr. Liotta is a Certified Public Accountant.
Rosina Manzihas been Executive Vice President/Chief Audit Officer of the Company since October 2017. Prior to joining the Company, Ms. Manzi held various positions, including Senior Vice President/Chief Compliance Officer at Astoria Bank from 1984 to 2017. Ms. Manzi is a Certified Internal Auditor, Certified Financial Services Auditor, and a Certified Anti-Money Laundering Specialist.
Patricia Mezeul has been Executive Vice President/Director of Government Banking of the Company since August 2014. Prior to that, she had been Senior Vice President/Director of Government Banking of the Company since January 2008. Prior to joining the Company, Ms. Mezeul held the position of Vice President, Senior Team Leader for Commerce Bank from 2002 to 2008 where she successfully established a Government Banking team.
Frank J. AkalskiTheodoros Kalogiannis has been Senior Vice President and President/Director of Portfolio Management since January 2018. Prior to that, he had been Vice President/Portfolio Management Team Leader of the Company since March 2017. Mr. Kalogiannis joined the Company in 2014 as Vice President/Senior Loan Workout Officer.
Douglas Liang has been Senior Vice President/Chief Investment Officer since July 2020. Prior to that, he had been Senior Vice President/Treasury since December 2014, and before that Vice President/Treasury since January 2014. Mr. Liang joined the Company as Assistant Vice President/Treasury in December 2014. Prior to joining the Company, from 2009 to 2014, he was First Vice President and Director of Investments for Astoria Bank.September 2012.
Kevin M. KennedyYan Nuriyev has been Senior Vice President/Chief Technology Officer of the Company since July 2019.February 2021. Prior to joining the Company, Mr. KennedyNuriyev was a Chief Technology Officer and Chief Information Security Officer at Steadfast FinancialQuantridge from 20092018 to 2019.2021. Prior to that he held Informationwas a Technology rolesAdvisor at Trafelet CapitalMcKinsey & Company, and Vice President at Banco Santander from 2008 to 2019. Mr. Nuriyev also holds several securities licenses in Financial Industry Regulatory Authority (FINRA).
Joanne Orelli has been Senior Vice President/Loan Servicing Collections and Foreclosure Manager since May 2017. Prior to that, she had been Senior Vice President/Collections and Foreclosure of the Company since January 2013, and Vice President/Collections Foreclosure since 2010. Since joining the Company in 2004, Ms. Orelli has focused her career in Collections and Loans Servicing.
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Albert H. Savastano has been Senior Vice President/Director of Investor Relations since February 2021. Prior to joining the Company, Mr. Savastano was Portfolio Manager at Norges Bank Investment Management until 2009.from 2011 to 2020. Mr. Kennedy had Military Operational Specialty in Cybersecurity and Electronic communications in the United States Marine Corp between 2001 and 2007, andSavastano is an Iraq War Veteran with Reserve and Active status.a Chartered Financial Analyst.
Patricia Tiffany has been Senior Vice President/Senior Director of Marketing since January 2019. Prior to that, she was Senior Vice President/Director of Marketing since January 2014. Ms. Tiffany joined the Company in 2009 as Vice President and Director of Marketing. Prior to joining the Company, from 2004 to 2009, she was a Senior Vice President with Citigroup in the Consumer Lending Group. From 1988 to 2004, she held numerous senior marketing positions at JPMorgan Chase in its Credit Card Services Division.
Richard A. White, PhD has been Senior Vice President/Chief Information Security Officer of the Company since August 2018. Prior to joining the Company, Dr. White was a Managing Director of Oxford Solutions since 2013. Dr. White held the position of Chief Information Security Officer with the United States Capitol Police, the Law Enforcement Branch for the U.S. House of Representatives and U.S. Senate in Washington, D.C. from 2010 to 2013. Dr. White has a Ph.D. in Information Technology, is a Subject Matter Expert and Final Content Reviewer for University of Maryland University College Cyber Security Information Assurance (CSIA) courses, and holds certifications in information technology, including NSA Information Assessment Methodology, Checkpoint Security Engineer, and Microsoft Systems Engineer.
The Board of Directors has determined that tennine of the eleven members of the Board are independent under the Nasdaq director independence standards. Under these standards, a director is not independent if he or she has certain specified relationships with the Company or any other relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment as a director. Mr. Manditch is not independent as a result of the consulting fees he receives from the Company and the Bank. Mr. Buran is not independent because he is an executive officer of the Company. In evaluating the independence of the remaining directors, the Board considered the payments described below under the heading “Corporate Governance—Transactions with Related Persons, Promoters and Certain Control Persons” and determined that they did not impair independence.
Meetings and Committees of the Board of Directors
The Board of Directors meets on a monthly basis and may have additional special meetings upon the request of the Chairman of the Board, the President or a majority of directors in office at the time. During 2019,2022, the Board of Directors held 12twelve regular meetings and fivefour special meetings. No director attended less than 75% of the meetings of the Board of Directors and its committees on which they served.
At least quarterly, the independent directors meet in executive session with no members of Company management present.
The Board of Directors has established the following committees:
Compensation Committee. The Compensation Committee of the Board of Directors (the “Compensation Committee”) is composed of Messrs. RussoHan (Chairman), DelliBovi, Grassi,D’Iorio, and Han,Grassi, and Ms. O’Brien, all of whom are independent under Nasdaq independence standards and satisfy the additional Nasdaq independence standards for compensation committee members. The Compensation Committee has primary responsibility for establishing and administering the compensation and benefit programs of the Company for its executive officers and other key personnel, administering awards to members of the Board of Directors who are not employees of the Company or the Bank (“Outside Directors”) under the 2014 Omnibus Incentive Plan and granting, subject to concurrent approval by the Board of Directors, awards to employees under the 2014 Omnibus Incentive Plan. The Compensation Committee has the authority to retain or obtain advice from compensation consultants, legal counsel and other experts. The charter of the Compensation Committee is publicly available on the Company’s website at http://www.flushingbank.com by following the links to investor relations, corporate profile, and then corporate governance, and then Compensation Committee Charter. The Compensation Committee meets on an as needed basis.basis, but no less than three times a year. During 2019,2022, the Compensation Committee met four times. The charter of the Compensation Committee is not available on the Company’s website, but is attached as Appendix A.
Audit Committee. The Audit Committee of the Board of Directors (the “Audit Committee”) is composed of Messrs. Grassi (Chairman), DelliBovi,Azarian, and RussoDelliBovi, and Ms. Yoh, all of whom are independent under Nasdaq independence standards and satisfy the SEC independence requirements for audit committee members. The Audit Committee meets at least quarterly to assist the Board of Directors in meeting its oversight responsibilities. The Audit Committee has sole authority to appoint and replace the Company’s independent registered public accounting firm and is directly responsible for the compensation and oversight of the work of that firm. The Audit Committee reviews the results of regulatory examinations, the financial reporting process, the systems and processes of internal control and compliance, and the audit process of the Company’s independent registered public accounting firm. The Audit Committee has the authority to engage independent counsel and other advisers. The charter of the Audit Committee is notpublicly available on the Company’s website but is attached as Appendix Bat http://www.flushingbank.com by following the links to the Company’s proxy statement for its 2019 annual meeting of stockholders.investor relations, corporate profile, and then corporate governance, and then Audit Committee Charter. During 2019,2022, the Audit Committee met five times. The Report of the Audit Committee is included on page 46.60.
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Nominating and Governance Committee. The Nominating and Governance Committee of the Board of Directors (the “Nominating and Governance Committee”) is composed of Messrs. Grassi (Chairman), Bennett, DelliBovi, Han, McCabe, and Russo,McCabe, all of whom are independent under Nasdaq independence standards. The
Nominating and Governance Committee has primary responsibility for recommending to the Board of Directors the slate of director nominees to be proposed by the Board for election by the stockholdersshareholders (as well as any director nominees to be elected by the Board to fill interim vacancies). The Nominating and Governance Committee also recommends the directors to be selected for membership on the various Board committees and the chairs of those committees. The Nominating and Governance Committee is responsible for developing and recommending to the Board appropriate corporate governance policies and procedures and for approving proposed related party transactions involving directors or executive officers and the Company. The Nominating and Governance Committee has the authority to engage consultants, legal counsel and search firms to assist it in fulfilling its responsibilities. The charter of the Nominating and Governance Committee is publicly available on the Company’s website athttp://www.flushingbank.com by following the links to investor relations, corporate profile, and then corporate governance, and then Nominating and Governance Committee Charter. During 2019,2022, the Nominating and Governance Committee met two times.once.
Other Committees. In addition to the committees described above, the Board of Directors has established an Executive Committee, an Insurance Committee, an Investment and Asset Liability Committee, an Information Technology Committee, and a Risk and Compliance Committee.
Bank Board and Committees. The business of the Bank is conducted at regular and special meetings of the Bank’s Board of Directors (the “Bank Board”) and its committees. The Bank Board and the Board of Directors are identically constituted. During 2019,2022, the Bank Board held 12twelve regular meetings. The Bank Board maintains an Executive Committee, an Insurance Committee, an Investment and Asset Liability Committee, a Compensation Committee, a Nominating and Governance Committee, an Information Technology Committee, a Risk and Compliance Committee, and an Audit Committee. The membership of these committees is the same as that of the comparable committees of the Company’s Board of Directors. These committees serve substantially the same functions at the Bank level as those at the Company level. The Bank Board also maintains a Loan Committee. No director attended less than 75% of the meetings of the Bank Board and its committees on which they served. Directors of the Bank are nominated by the Bank Board nominating and governance committee and elected by the Company as sole stockholdershareholder of the Bank.
Election of Directors by Majority Voting Standard
In 2013, the Board of Directors amended the Company’sby-laws to adopt a majority voting standard for all uncontested director elections (defined as elections in which the number of nominees does not exceed the number of open director positions). Theby-laws provide that in uncontested elections, director nominees must be elected by a majority of the votes cast at the annual meeting of shareholders. Incumbent directors who fail to receive a majority of votes—and who under Delaware law would otherwise remain in office until a successor is elected—are required to, within 10 business days of certification of election results, submit to the Board of Directors a letter of resignation for consideration by the Nominating and Governance Committee, which is required to act promptly. The Board of Directors, with the recommendation of the Nominating and Governance Committee, will determine whether to accept or reject such resignation, or what other action should be taken, in accordance with the Company’sby-laws. Plurality voting will continue to apply if the number of nominees exceeds the number of open director positions. The Board of Director’s decision to adopt a majority voting standard for the election of directors in uncontested elections demonstrates the Company’s continued commitment to best practices in corporate governance and the best interests of its stockholders.shareholders.
In evaluating director candidates for purposes of recommending director candidates to the Board, the Nominating and Governance Committee will consider the following factors: the candidate’s moral character and
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personal integrity; whether the candidate has expertise and experience relevant to the Company’s business (including knowledge of the communities and markets served by the Bank); whether the candidate’s expertise and experience complements the expertise and experience of the other directors; whether the candidate would be
considered independent under the Nasdaq independence standards; whether the candidate would be independent of any particular constituency and able to represent the interests of all stockholdersshareholders of the Company; the congeniality of the candidate with the other directors; whether the candidate would have sufficient time available to devote to Board activities; and any other factors deemed relevant by the Nominating and Governance Committee.
The Nominating and Governance Committee may establish additional criteria and is responsible for assessing the appropriate balance of criteria required of Board members. Although we do not have a written policy with respect to Board diversity, the Nominating and Governance Committee and the Board believe that a diverse board leads to improved Company performance by encouraging new ideas, expanding the knowledge base available to management and fostering a boardroom culture that promotes innovation and vigorous deliberation. Consequently, when evaluating potential nominees, the Nominating and Governance Committee considers individual characteristics that may bring diversity to the Board, including gender, race, national origin, age, professional background, unique skill sets and areas of expertise.expertise (such as, by way of example, but without limitation, cyber-security, information technology, real estate, legal and leadership).
The Nominating and Governance Committee will consider director candidates recommended by stockholdersshareholders of the Company as described below. Stockholders owning at least 1% of the Company’s outstanding common stockShareholders may recommend an individual for consideration by submitting to the Nominating and Governance Committee the name of the individual; his or her background (including education and employment history); a statement of the particular skills and expertise that the candidate would bring to the Board; the name, address and number of shares of the Company owned by the stockholdershareholder submitting the recommendation; any relationship or interest between such stockholdershareholder and the proposed candidate; and any additional information that would be required under applicable SEC rules to be included in the Company’s proxy statement if such proposed candidate were to be nominated as a director.
Such submissions should be addressed to Flushing Financial Corporation Nominating and Governance Committee, at the Company’s executive offices. In order for a candidate to be considered by the committee for any annual meeting, the submission must be received by the committee no later than the November 1 preceding such annual meeting.
The Nominating and Governance Committee will evaluate the biographical information and background material relating to each potential candidate and may seek additional information from the submitting stockholder,shareholder, the potential candidate, and/or other sources. The committee may hold interviews with selected candidates. Individuals recommended by stockholdersshareholders will be considered under the same factors as individuals recommended by other sources.
Since its formation in 1994, the Company has separated the roles of Chairman of the Board and Chief Executive Officer. We believe it is the Chief Executive Officer’s responsibility to run the Company and the Chairman’s responsibility to lead the Board. As directors continue to have more oversight responsibilities than ever before, we believe it is beneficial to have an independent Chairman whose sole job is leading the Board. The Board expects that the time Mr. Buran will be required to devote to the CEO position will continue to be significant and demanding. By having another director serve as Chairman of the Board, Mr. Buran will be able to focus his entire energy on running the Company.
Corporate Responsibility and Environmental, Social and Governance Strategies
The Company recognizes the importance of Environmental, Social and Governance (“ESG”) strategies and has continued to enhance its initiatives through 2022.
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Environmental Sustainability. The Company is focused on the environment and committed to fostering sustainable practices. In order to achieve this, the Company has focused on reducing its carbon footprint and assessing the environmental impact in underwriting. To reduce its carbon footprint, the Company is transitioning to hybrid vehicles for Company cars and uses energy-efficient appliances and LED lighting where possible. Moreover, the adoption of digital banking enables the Company to support its customers in their efforts to consume less fuel and paper. For certain types of loans such as construction loans, the Company requires environmental impact studies.
Supporting our Customers, Communities, and Employees. Since its founding in 1929, the Company has always focused on its customers, giving back to the communities and ensuring its employees are satisfied and engaged. In order to attend to its customers’ needs and add value, the Company took a leadership position and eliminated consumer overdraft, insufficient funds, and transfer fees on consumer checking accounts. In addition, as part of the Company’s ongoing support to small businesses and low income families, it has made more the 1,400 small business loans and continues to be a significant lender for rent-controlled and rent stabilized multifamily buildings in the New York City area. While community events have changed during the pandemic, the Company continued its support of Neighborhood Housing Services of New York City, United Way of Long Island and Asian Americans For Equality, as well as a plethora of other organizations. To stay connected to the communities, the Company sponsors three advisory boards made up of local community and civic leaders, which meet quarterly to share ideas on ways to support the communities’ needs and growth. The Company will continue to actively support the communities, customers and employees in its multicultural markets, while remaining a responsible corporate citizen. For additional information, see Shareholder Outreach on page 26.
The Company also recognizes employees are its most valuable asset as well as the importance of diversity, equity and inclusion. To further support its employees, the Diversity and Inclusion Committee was created in 2020, which spearheads the Corporate Leadership Development Program, designed to facilitate professional development and exposure for all employees. In addition, in order to support the employees’ financial wellbeing, the Company offers benefit programs to assist employees to achieve their financial goals, including helping them save and preparing them for retirement. Furthermore, the Company has an employee base that reflects a broad representation of backgrounds. As of March 3, 2022, females represent 59% of employees and 33% of the executive team.
Governance.The key items in the Company’s governance program are the strength of the Board, the oversight of crucial risks and the policies the Company has in place to minimize conflicts of interest. The Company’s strong governance program provides oversight to the executive management team, offers additional perspectives on risk management and corporate strategy and sets the tone for corporate culture. In order to minimize conflicts of interest and support good governance from the Board, the Company does not allow hedging or pledging of the Company’s common stock by directors and executive officers. In addition, the Company has in place stock ownership guidelines, the CEO and CFO have compensation clawback provisions and lending is not permitted to officers, directors or affiliated parties.
Risk Management
The Board has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Board regularly reviews information regarding the Company’s credit, liquidity and operations, as well as the risks associated with each. The Company’s Chief Risk Officer provides monthly updates to the Board with regard to the Bank’s Enterprise Risk Management. The Company’s Management Risk
and Compliance Committee meets quarterly to oversee the mitigation of risks to the Company’s strategic plan and to oversee the Company’s compliance with consumer regulations. The Company’s Information and Technology Committee, which meets at a minimum once a quarter, is responsible for overseeing the Company’s technology strategy which includes reviewing risk management and risk assessment guidelines, policies regarding information technology security, and cybersecurity risk tolerance. The Company’s Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive and employee
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compensation plans and arrangements. The Audit Committee oversees the results of the independent registered public accounting firm’s annual attestation of the Company’s financial statements and the Company’s internal audit department’s control testing. The Nominating and Governance Committee manages risks associated with the independence of the Board of Directors and potential conflicts of interest. The Bank Board’s Loan Committee oversees general risks related to the Company’s lending policies. The Investment Committee oversees risk related to the Company’s investment policy, liquidity policy, and interest rate risk management policy. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks. The Board is confident, as outlined above, that the proper independent oversight is in place to properly mitigate the Company’s risks.
Transactions with Related Persons, Promoters and Certain Control Persons
Transactions between related persons (including directors and executive officers of the Company and the Bank and their immediate family members) and the Company, the Bank or their affiliates are subject to approval by the Nominating and Governance Committee, as set forth in its charter. Officers and directors are regularly reminded of their obligation to seek Nominating and Governance Committee approval of any related party transaction or potential conflict of interest. The Nominating and Governance Committee considers all factors that it deems relevant, including the nature of the related party’s interest in the transaction, whether the terms are no less favorable than could be obtained in arms-length dealings with unrelated third parties and the materiality of the transaction to the Company.
Under the Bank’s lending policies, mortgage loans are not made to directors and executive officers. Additionally, there were no loans outstanding to an immediate family member of a director during 2019.2022.
StockholderOn October 30, 2020, the Company completed its merger with Empire Bancorp, Inc. (“Empire”) pursuant to the terms of that certain Agreement and Plan of Merger (the “Merger Agreement”) dated as of October 24, 2019 by and among the Company, Empire and a wholly-owned subsidiary of the Company. Pursuant to the Merger Agreement, the consulting agreement with Flushing Bank (the “Consulting Agreement”), originally entered into on October 24, 2019, became effective. Pursuant to the Consulting Agreement, Mr. Manditch will provide consulting services to Flushing Bank for a term of three years, subject to extension on terms mutually acceptable to Mr. Manditch and Flushing Bank (subject to earlier termination as provided therein). The Consulting Agreement provides for the payment of consulting fees to Mr. Manditch in the amount of $16,666.66 per month and certain customary other terms. In addition, the Consulting Agreement contains non-competition and non-solicitation provisions during the term of the Consulting Agreement and for a one-year period after the termination thereof, as well as confidentiality provisions. During 2022, Mr. Manditch received fees of approximately $200,000 pursuant to the consulting agreement.
Shareholder Communications with the Board of Directors
The Board of Directors has adopted the following policy by which stockholdersshareholders may communicate with the Board or with individual directors or Board committees. The communication should be in writing, addressed to the Board or applicable committee or directors, c/o Corporate Secretary, Flushing Financial Corporation, at the Company’s executive offices. The Corporate Secretary will review all such correspondence received and will periodically, at least quarterly, forward to the applicable directors a summary of all such correspondence together with copies of correspondence that the Corporate Secretary believes should be seen in its entirety. Correspondence or summaries will be forwarded to the applicable directors on an expedited basis where the Corporate Secretary deems it appropriate. Communications raising concerns related to the Company’s accounting, internal controls, or auditing matters will be immediately brought to the attention of the Company’s Chief Audit Officer and the Chairman of the Audit Committee and will be handled in accordance with the procedures established by the Audit Committee with respect to such matters.
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Directors may at any time review a log of correspondence received by the Company that is addressed to the director (or to the full Board or a Board committee on which he or she serves) and may request copies of any such correspondence.
The Company believes that it is important for directors to directly hear concerns expressed by stockholders.shareholders. Accordingly, it is the Company’s policy that Board members are expected to attend the annual meeting of stockholdersshareholders absent a compelling commitment that prevents such attendance. All of the members of the Board of Directors at the time of the 20192022 annual meeting attended suchthe virtual annual meeting.
Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics that applies to all of its directors, officers and employees. This code is publicly available on the Company’s website athttp://www.flushingbank.comby following the links to investor relations, corporate profile, and then governance documents, and then Code of Business Conduct and Ethics. Any substantive amendments to the code and any grant of a waiver from a provision of the code requiring disclosure under applicable SEC or Nasdaq rules will be disclosed in a report on Form8-K.
Compensation Committee Interlocks and Insider Participation
During 2019,2022, the Compensation Committee consisted of Messrs. Russo (Chairman), DelliBovi, Grassi and Han, and Ms. O’Brien. None of the members of the Compensation Committee is a former officer of the Company or the Bank.
Under the Bank’s lending policies, residential mortgage loans to immediate family members of directors are made at market rates of interest and other normal terms but with reduced origination fees. There were no such loans outstanding to an immediate family member of a director during 2019.2022.
Role of Executive Officers in Compensation Decisions
The Chairman of the Board of Directors and the Chief Executive Officer annually review the performance of each named executive officer (other than the Chief Executive Officer whose performance is reviewed by the Compensation Committee). The conclusions reached and recommendations based on these reviews, including with respect to salary adjustments and annual award amounts, are presented to the Compensation Committee. The Compensation Committee can exercise its discretion in modifying any recommended adjustments or awards to executive officers. Our Chief Executive Officer makes recommendations to the Compensation Committee with respect to compensation for other executive officers, including the structure and terms of these executives’ annual cash incentives and long-term equity incentives. Our Chief Executive Officer considers factors such as tenure, individual performance, responsibilities and experience levels of the executives, as well as the compensation of the executives relative to one another, when making recommendations regarding appropriate total compensation of our executives. Certain executives assist the Chief Executive Officer in structuring his proposals regarding the design of the annual cash incentives and long-term equity incentives; however, executives do not play any role in setting their own compensation. Our Chief Executive Officer either discusses his recommendations with the Chairman of the Compensation Committee or has management present them at Compensation Committee meetings. The compensation and benefits personnel within our human resources department supports the Compensation Committee in the performance of its responsibilities. During fiscal year 2019,2022, our Chief Financial Officer and Executive Vice President of Human Resources regularly attended the Compensation Committee meetings to provide perspectives on the competitive landscape, the needs of the business and information about our financial performance. The Compensation Committee periodically meets in executive session without management to deliberate on executive compensation matters. The Compensation Committee considers, but is not bound to and does not always accept, the Chief Executive Officer’s recommendations regarding executive compensation. The Compensation Committee reviews all
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recommendations in light of our compensation philosophy and generally seeks input from the Committee’s compensation consultant prior to making any final decisions.
Determining Executive Compensation and the Role of the Consultant
The Company’s executive compensation program is intended to link management’s pay with the Company’s annual and long-term performance. The Compensation Committee believes it is important to attract and retain highly qualified executive officers by providing compensation opportunities that are both competitive with the market for executive talent and consistent with the Company’s performance. The Compensation Committee has retained Pearl Meyer (the “Consultant” or “Pearl Meyer”), an independent nationally recognized compensation
consulting firm, to advise the Compensation Committee with respect to compensation of the Company’s executive officers. The Consultant is retained by the Compensation Committee and reports directly to the Compensation Committee. The Consultant was instrumental in the development of the pay for performance philosophy of the Company and the development of the shareholder approved 2005 and 2014 Omnibus Incentive Plans.Plan. In 2019, as in prior years,2022, the Compensation Committee engagedformally re-engaged the Consultant. The Consultant discussed with the Compensation Committee the philosophy for determining the 20192022 compensation and discussed trends in the executive compensation arena to be considered. For a discussion of the elements involved in the Compensation Committee’s decisions regarding executive compensation, see “Executive Compensation—Compensation Discussion and Analysis.”
The Company uses a combination of cash and stock-based incentive compensation to attract and retain qualified candidates to serve on the Board of Directors.
For the fiscal year ended December 31, 2019,2022, members of the Board of Directors who are not employees of the Company or the Bank (“Outside Directors”) were entitled to receive an annual retainer of $37,500 from the Bank with no additional retainer from the Company. In addition, in 2019,2022, the Chairman of the Board received a fee of $75,000 for services to the Company and the Bank in those capacities. The Chairman of the Audit Committee received an additional annual retainer of $15,000, the Chairman of the Compensation Committee received an additional annual retainer of $10,000, and the Chairman of the Nominating and Governance Committee received an additional annual retainer of $7,500. Outside Directors also received meeting fees of $1,500 for each Board or Bank Board meeting attended, $1,300 for each Audit Committee meeting attended, and $1,000 for each other committee meeting attended, whether or not they are members of such committee. However, where the Board of Directors and the Bank Board meet on the same day, directors receive only a single Board meeting fee for such meetings. Similarly, directors receive only a single committee meeting fee where identically constituted committees of the Board of Directors and Bank Board meet on the same day.
Outside Directors who are members of the Loan Committee also receive a fee from the Bank for conductingon-site inspections of proposed real estate collateral for certain loans.
Pursuant to the Company’s 2014 Omnibus Incentive Plan, under which equity awards granted on or after May 20, 2014 were made, each Outside Director receives an annual award of 4,800 restricted stock units (“RSUs”), or shares of restricted stock if so determined by the Compensation Committee, as of January 30 of each year. Upon initial election or appointment to the Board of Directors or a change to Outside Director status, an Outside Director receives a prorated portion of the annual award consisting of 400 shares of restricted stock (or RSUs if so determined by the Compensation Committee) for each full or partial month from the date of such person’s election or appointment or change in status to the following January 30.
Each award to an Outside Director vests with respect toone-third of the underlying shares on the January 30 following the date of grant, and an additionalone-third of the underlying shares on each of the two subsequent January 30, provided the award holder is a director of the Company on each such date. In the event the Outside Director ceases to be a director of the Company before an award has fully vested, the unvested portion of the award is forfeited. Awards to Outside Directors become fully vested in advance of such schedule upon a change of control of the Company or the Bank (if the director is a member of the Board of Directors at such time) or upon termination of the director’s service on the Board of Directors due to death, disability or retirement. For this purpose, retirement means a director’s termination of service after five years of service as an Outside Director if the director’s age plus years of service as an Outside Director equals or exceeds 55.
Unless the Compensation Committee provides otherwise, dividends or dividend equivalents on these awards are paid on a current basis, and the awards are settled in stock, generally at the time they vest. An RSU award entitles the award holder to receive one share of common stock (or the fair market value of a share in cash or other property) at a specified future time.
On January 30, 2020,26, 2023, the Compensation Committee approved a grant of Company stock in the form of 4,800 RSUs to each Outside Director, which vests in full one year from the date of grant, thus deviating from the formula in the Company’s 2014 Omnibus Incentive Plan as outlined above. The Compensation Committee’s recommendation to the Board to grant equity at a value of $100,000, not to exceed 4,800 RSUs, with a one year vesting period was a continuation of equity grant practices implemented in January of 2019.
Director Stock Ownership Guidelines
In November 2015, the Compensation Committee formally established Director Stock Ownership Guidelines for Outside Directors as a way to more closely align the interests of Outside Directors with those of the Company’s shareholders. These guidelines provide a direct link between Outside Director rewards and Company results and encourage Outside Directors to consider Company performance from a long-term as well as short-term perspective.
These stock ownership guidelines require Outside Directors to hold at least 5,000 shares of the Company’s common stock after the greater of five full years of board service or five years from the implementation of these guidelines. Compliance with these guidelines is mandatory for all Outside Directors of the Company.
The Bank has an unfunded noncontributory defined benefit Outside Director Retirement Plan, which provides benefits to each Outside Director who became an Outside Director before January 1, 2004 who has at least five years of service as an Outside Director and whose years of service as an Outside Director plus age equals or exceeds 55. Benefits are also payable to an Outside Director who became an Outside Director before January 1, 2004 and whose status as an Outside Director terminates due to death or disability or who is an Outside Director upon a change of control of the Company or the Bank. Any person who became an Outside Director after January 1, 2004 is not eligible to participate in the Outside Director Retirement Plan. Upon termination, an eligible director will be paid an annual retirement benefit equal to $48,000. Such benefit will be paid in equal monthly installments for 120 months.
In the event of a change of control, benefits under the plan will be paid in a cash lump sum; each eligible director will receive the equivalent of 120 months of benefits. In the event of an Outside Director’s death, the surviving spouse will receive the equivalent benefit. No benefit will be paid to an Outside Director who is removed for cause. The Company has guaranteed the payment of benefits under the Outside Director Retirement Plan. A director’s right to receive benefits under the plan is no greater than the right of an unsecured general creditor of the Bank or the Company.
Deferred Compensation Program for Outside Directors
The Bank has adopted an Outside Director Deferred Compensation Plan pursuant to which Outside Directors may elect to defer all or a portion of their annual retainer, meeting fees, and inspection fees. Deferred amounts are credited with earnings based on certain mutual fund investments. The deferred amounts plus earnings thereon will be paid to the director in cash after the director’s termination of service, either in a lump sum or, if the director so elects, in annual installments over a period not to exceed five years. The Company has guaranteed the payment of benefits under the Outside Director Deferred Compensation Plan. A director’s right to receive benefits under the plan is no greater than the right of an unsecured general creditor of the Bank or the Company. As of December 31, 2019,2022, there were no participants in this plan.
The Company and the Bank have entered into an indemnity agreement with each of the directors which agreements provide for mandatory indemnification of each director to the full extent permitted by law for any claim arising out of such person’s service to the Company or the Bank. The agreements provide for advancement of expenses and specify procedures for determining entitlement to indemnification.
The table below summarizes the compensation paid by the Company to Outside Directors for the fiscal year ended December 31, 2019.2022.
Name (1) | Fees Earned or Paid in Cash(2) ($) | Stock Awards(3) ($) | Option Awards ($) | Change in Pension Value and Deferred Compensation Earnings ($)(4) | All Other Compensation ($) | Total ($) | Fees Earned or Paid in Cash(2) ($) | Stock Awards(3) ($) | Option Awards ($) | Change in Pension Value and Deferred Compensation Earnings ($)(4) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||||
Alfred A. DelliBovi | 176,000 | 100,000 | — | — | — | 276,000 | 174,500 | 99,984 | — | — | — | 274,484 | ||||||||||||||||||||||||||||||||||||
Michael A. Azarian | 69,475 | 96,503 | — | — | — | 165,978 | 72,300 | 99,984 | — | — | — | 172,284 | ||||||||||||||||||||||||||||||||||||
James D. Bennett | 81,500 | 100,000 | — | — | — | 181,500 | 75,500 | 99,984 | — | — | — | 175,484 | ||||||||||||||||||||||||||||||||||||
Steven J. D’Iorio | 92,500 | 100,000 | — | — | — | 192,500 | 88,000 | 99,984 | — | — | — | 187,984 | ||||||||||||||||||||||||||||||||||||
Louis C. Grassi | 104,000 | 100,000 | — | — | — | 204,000 | 102,000 | 99,984 | — | — | — | 201,984 | ||||||||||||||||||||||||||||||||||||
Thomas S. Gulotta(5) | 72,200 | 100,000 | — | — | — | 172,200 | ||||||||||||||||||||||||||||||||||||||||||
Sam S. Han | 74,000 | 100,000 | — | — | — | 174,000 | 73,000 | 99,984 | — | — | — | 172,984 | ||||||||||||||||||||||||||||||||||||
Douglas C. Manditch | 86,000 | 99,984 | — | — | 200,000 | (5) | 385,984 | |||||||||||||||||||||||||||||||||||||||||
John J. McCabe | 87,000 | 100,000 | — | — | — | 187,000 | 88,000 | 99,984 | — | — | — | 187,984 | ||||||||||||||||||||||||||||||||||||
Donna M. O’Brien | 80,500 | 100,000 | — | — | — | 180,500 | 83,000 | 99,984 | — | — | — | 182,984 | ||||||||||||||||||||||||||||||||||||
John E. Roe, Sr.(6) | 37,500 | 100,000 | — | — | — | 137,500 | ||||||||||||||||||||||||||||||||||||||||||
Michael J. Russo | 89,500 | 100,000 | — | — | — | 189,500 | ||||||||||||||||||||||||||||||||||||||||||
Michael J. Russo(6) | 86,000 | 99,984 | — | — | — | 185,984 | ||||||||||||||||||||||||||||||||||||||||||
Caren C. Yoh | 79,000 | 100,000 | — | — | — | 179,000 | 77,500 | 99,984 | — | — | — | 177,484 |
(1) | John Buran, the President and Chief Executive Officer of the Company and the Bank, is also a director of the Company and the Bank but is not included in this table because, as an employee of the Company and the Bank, he receives no compensation for his services as director. The compensation received by Mr. Buran as an employee of the Company and the Bank is shown in the Summary Compensation Table on page |
(2) | Reflects the amount of compensation earned in |
(3) | Reflects the grant date fair value of awards (excluding the effect of estimated forfeitures) granted in the fiscal year ended December 31, |
(4) | Messrs. Azarian, DelliBovi, D’Iorio, Manditch, and Han, and Mses. O’Brien and Yoh are not eligible to participate in the Outside Director Retirement Plan because it was frozen before they satisfied the eligibility requirements. Messrs. Bennett, Grassi, McCabe, and Russo have maximized their annual retirement benefit under the Outside Director Retirement Plan based on their years of service. |
(5) |
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(6) | Mr. |
Compensation Discussion and Analysis
Executive Summary
The Company maintains its commitment to alignThis Compensation Discussion and Analysis (“CD&A”) explains our executive compensation toprograms for our named executive officers (“NEOs”) captured in the Company’s performance. Ourtable below. The CD&A also describes the processes followed by the Compensation Committee of the Board (“Compensation Committee’ or “the Committee”) for making pay decisions as well as its rationale behind other matters which effect the compensation strategy has been developed to driveof the Company’s success while improving shareholder value. The Company accomplishes this by:NEOs.
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Our Compensation Committee has the primary responsibility for approving our compensation philosophy and programs as they relate to our named executive officers.
We welcome and value the opinions of our shareholders to ensure that there is ongoing open dialogue related to compensation and other relevant governance matters. Though the Company feels that our 2019 compensation philosophy and programs continued to drive execution and link pay to performance, last year’sSay-On-Pay vote received the support of approximately 67% of votes cast. As a result of the voting, the Company has taken action over the past year to once again engage our shareholders to obtain a better understanding of their views and make enhancements to our compensation programs. In 2019, we made the following changes to our compensation programs, which were well received by our shareholders and were carried forward when setting 2020 compensation for the Company’s executives:
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Base Salary—the benchmarking analyses prepared by our independent compensation consultant Pearl Meyer, used to set 2019 (and 2020) pay levels, indicated that the base salary of some of the Company’s named executive officers were above the median. Accordingly, the Compensation Committee did not award base salary increases for the fiscal year 2019 and 2020 to the following named executive officers—President & CEO, Chief Operating Officer, and the Chief of Real Estate Lending. Other named executive officer salaries received standard merit increases for 2019 because they were positioned at or below the median of their respective roles in the market. Additionally, in 2020 the Compensation Committee did not award a base salary increase to the Chief Financial Officer as her base salary was above the median.
John R. Buran | President and Chief Executive Officer | |
| Senior Executive Vice President, Treasurer and Chief Financial Officer | |
Maria A. Grasso | Senior Executive Vice President, Chief Operating Officer and Corporate Secretary | |
Francis W. Korzekwinski | Senior Executive Vice President and Chief of | |
Michael Bingold | Senior Executive Vice President/Chief Retail and |
Executive Summary
20192022 Performance Highlights
The Company continues to focus on managing expenses, growing our loans and deposits, andremains a leading community bank in the greater New York City metropolitan area while ensuring our clients experience the “small“Small enough to know you largeyou. Large enough to help you”you.” customer experience. Our institution’s strong capital, ourThe Company’s ability to continue to grow core deposits and our traditionally strong credit disciplinemaintain a well-diversified and low risk loan portfolio, while managing asset quality with consistently disciplined underwriting enabled us to performrecord our second-best core earnings in 2022 despite a challenging interest rate environment.
The Company continued to execute well, maintain its service capacity, mitigate risk and manage its capital structure for financial strength and stability, as outlined in 2019. Our solidthe performance in 2019 is reflected by the following:highlights below:
Performance Area | Highlights | |
Shareholders Returns & Value Creation | • | |
• Cash returned to shareholders through dividends and share repurchases was | ||
• We paid dividends of | ||
• | ||
Profitable Growth | • | |
• Strong GAAP and Core Return on Average Equity for 2022 of 11.44% and 11.42%, respectively, a decrease of 1.16% and 2.26%, respectively, during | ||
• Net |
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• Average deposits, including mortgage escrow, increased 0.6% during 2022 to $6.5 billion, with core deposits comprising 84.0% of | ||
• Average noninterest bearing deposits increased 10.4% during 2022 and comprised 15.8% of total average deposits (including escrow deposits) compared to 14.4% a year ago. | ||
Asset Quality Stability | • | |
• For the | ||
• The | ||
Strategic Accomplishments | • | |
• | ||
• In May 2022, the Bank’s Complete Checking Account was officially certified by the national Cities for Financial Empowerment Fund (CFE Fund) as meeting the Bank on National Account Standards. The National Safe Account Standards, co-created by consumer advocates, leading national nonprofit organizations, civic leaders, and other financial institutions, designate both core and strongly recommended features that ensure low cost, high functionality, and consumer safety. | ||
• In June 2022, the Company opened a new full-service branch in Elmhurst, New York. The Bank has a long history of serving the diverse, multicultural markets of the New York City Metropolitan area. This new Elmhurst location expands our presence in Queens and deepens our relationship with the residents and businesses that reflect the diversity of this market. At the ribbon cutting ceremony, the Bank’s President and CEO, John R. Buran, presented a |
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RISE Save for College Program. The community scholarship for the NYC Kids RISE Save for College Program will support the kindergarten students at P.S. 110Q. The Bank also presented a grant check to Neighborhood Housing Services of Queens that will help fund their First Time Home Buyer, Affordable Housing and Rental Assistance Programs. | ||
• In May 2022, the Company announced it had leased a new Suffolk County location in the Hauppauge Industrial Park which opened its doors to the public in March 2023 as a full-service branch. Additionally, in November of 2022, the Company announced it leased a new Brooklyn location in Bensonhurst with intentions to open this new, full-service branch |
2022 Compensation Actions At-A-Glance
Base Salary—The benchmarking analyses prepared by our independent compensation consultant firm Pearl Meyer, used to set 2022 pay levels, indicated that the base salary of the President & CEO, Senior Executive Vice President/Chief Operating Officer, and the Senior Executive Vice President/Chief Real Estate Lending Officer were generally aligned within a competitive range of the market. The analysis also revealed that the base salary of Ms. Cullen, the Company’s Senior Executive Vice President/Treasurer and Chief Financial Officer was below the median and that the base salary of Mr. Bingold, the Senior Executive Vice President/Chief Retail and Client Development Officer was slightly above the median. Accordingly, the Compensation Committee resolved to increase Ms. Cullen’s and Mr. Bingold’s base salaries, effective as of January 1, 2022, by approximately 4% and 8%, respectively, to better align their total compensation versus our peers.
In November of 2022 and in January of 2023, the Compensation Committee convened to review 2022 Company performance and pay levels versus a benchmarking analysis provided by Pearl Meyer which is used to set 2023 pay levels. The Pearl Meyer analysis indicated that the base salaries of the NEOs were generally aligned within a competitive range of the market. Accordingly, the Compensation Committee did not adjust any of the NEOs’ base salaries in January of 2023.
• | Annual Performance Based Annual Incentives—Based on our 2022 financial performance achievements and consistent with our program design, the NEOs received annual incentive awards payouts of 99.7% of target. See Performance-Based Annual Incentives below. |
Performance Based Equity—For 2022, the Compensation Committee again granted target long-term incentive awards using a 50%/50% mix of performance based restricted stock units and time-based restricted stock units to each of the NEOs. Performance based restricted stock unit awards vest at the end of a three-year performance period (subject to achievement of performance goals) and time-based restricted stock units vest ratably over a five-year period.
The Compensation Committee implemented a performance vesting equity component to the annual long term incentive grant in 2019, in an effort to further align executive compensation with that of the long-term interests of our shareholders. Based on the Company’s achievement of the performance goals in the three-year performance period (2020-2022), the Compensation Committee determined that the 2020 performance restricted stock units were earned at 75% of target. See Long-Term Equity Incentive Compensation below.
Impact of Advisory Say-On-Pay Vote
At our 2022 Annual Meeting of Shareholders, 94% of the votes cast on Say-On-Pay were voted in approval of the compensation of the NEOs. These results reinforced support of our current NEO compensation programs which garnered 93% of the votes cast on Say-On-Pay in 2021. The Compensation Committee and senior management continued their shareholder engagement efforts in 2022 and into 2023. During 2022, we directly telephoned, emailed, and/or engaged in discussions with over 18 of our largest institutional investors representing
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approximately 55% of our total outstanding shares. Where investors were not readily available, we followed up where appropriate to maximize our connectivity. We were successful in establishing direct discussions with approximately a quarter of our largest institutional investors. When we were not able to engage in direct communication, we encouraged open dialogue with our shareholders throughout the year. Several institutions confirmed that they are not structured to engage in open dialogue and continue to outsource their proxy voting. More details about our approach to shareholder outreach are described below.
Shareholder Outreach
We value the opinions of our shareholders and look forward to a continued, open dialogue on compensation matters and other issues relevant to our business. We want our shareholders to fully understand our rationale for our approach to executive compensation, and we want to understand the views of our shareholders. Although our current executive compensation program contains continuations or versions of arrangements that were put in place historically and under different circumstances, we continue to evolve its design and features in light of current best practices and shareholders’ feedback.
To foster our dialogue with shareholders and more specifically to respond to Say-On-Pay results, we formalized our annual shareholder interaction into an organized and comprehensive shareholder outreach program initiated under the auspices of our Compensation Committee. Our outreach and engagement efforts during 2022 were led by our Executive Vice President/Director of Human Resources. In addition, the outreach program was advised by our independent compensation consulting firm and external counsel. Discussions centered on executive compensation matters, but also touched on other topics which included Environmental, Social and Governance (“ESG”) initiatives and other business-related matters. While we devoted much time and effort in 2022 to communicating information regarding our executive compensation policies and practices, we also were keenly interested in feedback from our shareholders as to how we might improve those practices and policies. We generally seek a collaborative and mutually beneficial approach to many issues of importance to investors that affect our business, and to ensure that our corporate governance practices remain appropriate. This approach is especially important in the context of executive compensation matters.
The results of our outreach program were helpful in gauging the pulse of our institutional investors. Specifically, top institutional investors continue to appreciate the changes made to the Company’s compensation programs back in 2019. Further, some top institutional shareholders stated their understanding that such changes in the Company’s compensation programs take time to fully implement and ultimately be positively reflected in future benchmarking analyses performed either by institutional investor firms or proxy advisory firms. New institutional investor feedback touched on board succession/refreshment and renewed interest in the ESG initiatives/criteria of the Company. The Company recognizes the value and the importance of how it manages relationships with employees, customers, and in communities where the Company operates, as well as the Company’s transparency of accurate audit/accounting methods and the ability of our shareholders to vote on important issues. These criteria and others are captured in the Company’s June 2022 inaugural ESG Report which can be found on the Bank’s website at https://investor.flushingbank.com/esg/default.aspx. Also see Corporate Responsibility and Environmental, Social and Governance Strategies on page 15.
Key Governance Features
The following practices highlight our compensation governance structure:
What We do | What We Don’t Do | |
✓ Pay for performance
✓ 50% of our annual long-term incentives in performance-based awards ✓ Utilize a5-year vesting period on | ✘ Hedging of company stock
✘ Pledging of company stock ✘ Repricing of stock options ✘ Issue new employment agreements with excise tax gross ups feature |
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What We do | What We Don’t Do | |
✓ Require our executive officers to own stock through robust stock ownership ✓ Include a maximum cap on our annual cash incentive plan
✓ Conduct an annual “say on pay” vote
✓ Conduct annual shareholder outreach
✓ Conduct an annual risk assessment of our compensation program
✓ Engage an independent compensation advisor
✓ Have an independent compensation committee |
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What Guides Our Compensation Program
Our Executive Compensation Philosophy and Objectives
The Compensation Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of specific annual, long-term and strategic goals of the Company in a risk appropriate fashion, and which aligns executives’ interests with those of the shareholders rewarding performance at or above established goals, with the ultimate objective of improving shareholder value. The Compensation Committee evaluates both performance and compensation to ensure that the Company maintains its ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive relative to the compensation paid to similarly situated executives of our peers. The Compensation Committee targets total direct compensation to be within a competitive range of the median of the markets we draw talent from, taking into consideration experience, role, contributions, and criticality.
Elements of Compensation
Our compensation philosophy is supported by the following principal elements of pay:
Compensation | How It’s Paid | Purpose | ||
Base Salary | Cash (Fixed) | Provide a competitive base salary relative to similar positions in the market and enable the Company to attract and retain highly skilled executive talent. | ||
Annual Incentives | Cash (Variable— Performance based) | Focus executives on achieving annual financial and strategic objectives that promote growth, profitability, and returns. | ||
Long-Term Incentives | Equity (Variable—50% Performance Based) | Provide incentive for executives to reach financial goals and align their long-term economic interests with those of shareholders through meaningful use of equity compensation. |
The pay mix of total direct compensation for our NEOs includes base salary, performance-based annual incentives, and both long-term performance and time-based equity incentives. We believe that these compensation components help balance the incentive for our executives to achieve annual goals but not take undue risk.
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The Decision-Making Process
Role of the Compensation Committee
Our Compensation Committee has the primary responsibility for approving our compensation philosophy and programs as they relate to our NEOs. The Committee is comprised of independent, non-employee members of the Board. The Committee works very closely with its independent consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year. Details of the Committee’s authority and responsibilities are specified in the Compensation Committee’s charter, which is publicly available on the Company’s website at http://www.flushingbank.com by following the links to investor relations, corporate profile, and then corporate governance, and then Compensation Committee Charter.
The Committee makes all final decisions regarding the elements of our NEOs’ compensation, except for the CEO, whose compensation is determined by the independent members of the full Board, based upon recommendations of the Committee.
The Role of Management
Members of our management team attend regular meetings where executive compensation, Company and individual performance, and competitive compensation levels and practices are discussed and evaluated. The Committee and subsequently the independent members of the Board review the CEO’s performance and make all final determinations regarding CEO compensation after conducting their review. For other NEOs, the Committee reviews the CEO’s assessment of their performance and proposed pay decisions. Only the Committee members are allowed to vote on decisions regarding NEO compensation.
The CEO reviews his recommendations pertaining to other executives’ (non-NEO) pay with the Compensation Committee providing transparency and oversight. Decisions on non-NEO pay are made by the CEO in consultation with the Compensation Committee.
Role of Compensation Consultant
The Compensation Committee has the sole authority to retain, terminate, obtain advice from, oversee and compensate its outside advisors, including its compensation consultant. The Compensation Committee has the funding it needs for these purposes.
Since 2003, theThe Compensation Committee has retained Pearl Meyer in 2022 as its independent executive compensation consultant. None of the Company’s management team participated in the Compensation Committee’s decision to retain Pearl Meyer. Pearl Meyer reports directly to the Compensation Committee and the Compensation Committee may replace Pearl Meyer or hire additional consultants at any time. Pearl Meyer attends meetings of the Compensation Committee, as requested, and communicates with the Chairman of the Compensation Committee between meetings. However, the Compensation Committee makes all decisions regarding the compensation of the Company’s executive officers.
Pearl Meyer provides various executive compensation services to the Compensation Committee with respect to the Company’s executive officers and other key employees at the Compensation Committee’s request. The services Pearl Meyer provides include advising the Compensation Committee on the principal aspects of the executive compensation program and evolving best practices, and providing market information and analysis regarding the competitiveness of our program design and awards in relationship to our performance.
None of the Company’s management team participated in the Compensation Committee’s decision to retain Pearl Meyer. Pearl Meyer reports directly to the Compensation Committee, and the Compensation Committee may replace Pearl Meyer or hire additional consultants at any time.
The Compensation Committee regularly reviews the services provided by its outside consultants and believes that Pearl Meyer is independent in providing executive compensation consulting services. The Compensation Committee conducted a specific review of its relationship with Pearl Meyer in 2019,2022 and determined that Pearl Meyer’s work for the Compensation Committee did not raise any conflicts of interest taking into account the “independence factors” identified by the SEC and NASDAQ.
The Compensation Committee continues to monitor the independence of its compensation consultant on a periodic basis.
In 2019, as in prior years,2022, Pearl Meyer prepared an executive compensation analysis with regard to the named executive officers.NEOs. This analysis included a review of the competitiveness of compensation levels, a pay for performance analysis, and a retention analysis. Pearl Meyer utilized a group of publicly-traded financial institutions (collectively the “Peer Group”), disclosed in its analysis below, and published industry survey sources, including the American Bankers Association (“ABA”) 2019 Compensation and Benefits survey and the Pearl Meyer 2019 Banking Compensation Survey Report (Northeast).below.
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Use of Peer Group
The Peer Group analysis is typically performed and reviewed annually. In order to capture an appropriate view of the Company’s competitors, Pearl Meyer utilized the following Peer Group, consisting of 23 banks, which are close to the Company’s size (generally, no more than twice as large and no less than half the size of the Company in terms of assets) and which are located in major urban/suburban areas of the Northeast United States. At the time the Peer Group analysis was performed, the median asset size of the Peer Group and the Company was $7.1$9.5 billion and $6.3$8.1 billion, respectively.
Berkshire Hills Bancorp, Inc. | Lakeland Bancorp, Inc. | |
NBT Bancorp Inc. | ||
Northwest Bancshares, | ||
Community Bank System, Inc. | ||
Dime Community Bancshares, Inc. | ||
Eagle Bancorp, Inc. | ||
First of Long Island Corporation | S&T Bancorp, Inc. | |
First Commonwealth Financial Corporation | Tompkins Financial Corporation | |
Independent Bank Corporation | TrustCo Bank Corp NY | |
Washington Trust Bancorp, Inc. | ||
WSFS Financial Corporation | ||
Year over year changes to the Peer Group includeincluded the removal of SterlingBoston Private Financial Holdings and Bridge Bancorp and Sun Bancorp Inc. due to merger and acquisition activityactivity. Additionally, Customers Bancorp was removed as they exceeded the desired asset range. Columbia Financial, ConnectOne Bancorp, and the addition of Bridge Bancorp Inc., First of Long Island Corporation and KearnyOceanFirst Financial Corporation were added to the above group as these banksthey meet the selection criteria (e.g. assets ranges and regional location) and also have significant business through specialty lending activities in metropolitan New York and New Jersey. All other peer banks continued to meet the selection criteria (e.g., assets ranges and regional location) and have similar business models.
In determining the amount of compensation for the named executive officers,NEOs, the Compensation Committee typically reviews each element of total compensation against the Peer Group. Total compensation is comprised of annual base salary, annual earned bonus, the grant date value of long-term incentive awards, and other proxy-reported compensation not captured in salary, bonus, or long-term incentives. Based on the recommendation of Pearl Meyer, the Compensation Committee then considers setting salaries within a competitive range of the Peer Group based on individual performance. The Compensation Committee continues to focus on maintaining total compensation within our updated disclosed philosophy by assuring the variable components of compensation have a strongpay-for-performance orientation.
The Compensation Committee considered factors other than amounts paid by the Peer Group and other sources of compensation data when determining compensation amounts, such as the individual executive’s level of responsibility, individual performance, the financial and operational performance of the Company, and the Company’s performance in relation to internal budgeted amounts and performance of competitors. Indicators of financial and operational performance considered by the Compensation Committee include, among others, total assets, core operatingpre-tax income, core operating earnings per diluted common share, core operating return on average equity and book value per share. The achievements of certain strategic goals that are part of the Company’s Strategic Plan were also taken into consideration. The Compensation Committee also compared the Company’s performance against the performance of the Peer Group with respect to certain other indicators, including such performance measures as total shareholder return, return on average assets, net interest margin, and efficiency ratio.
Impact of AdvisorySay-On-Pay Vote
At our 2019 Annual Meeting of Shareholders, 67% of the votes cast onSay-On-Pay were voted in approval of the compensation of the named executive officers. These results were an increase in the proportion of votes cast in favor of our executive compensation program as compared to our 2018Say-On-Pay vote of 55%. Though there was an increase in year over year support for approval of the compensation of the named executive officers, the Company recognizes that there is still progress to be made. The Company enhanced its shareholder engagement and made several substantive changes to its compensation program beginning in 2019 to address the issues most frequently raised during engagement meetings. The Company believes that this process has yielded a stronger compensation program that will continue to earn increased support from shareholders.
Shareholder Outreach
We value the opinions of our shareholders and look forward to a continued, open dialogue on compensation matters and other issues relevant to our business. We want our shareholders to fully understand our rationale for providing the compensation packages to our named executive officers that we currently offer and we want to understand the views of our shareholders on those programs. Although almost all of our current programs are continuations or versions of arrangements that were put in place historically and under different circumstances, we continue to evolve the programs in light of current best practices and shareholders’ feedback.
In order to foster our dialogue with shareholders and more specifically to respond tosay-on-pay voting, we formalized our annual shareholder interaction into an organized and comprehensive shareholder outreach program initiated under the auspices of our Compensation Committee. The outreach program during 2019 (and early 2020) was led by our Executive Vice President/Director of Human Resources. In addition, the outreach program was advised by our independent compensation consulting firm and counsel. The agenda of the outreach program centered on executive compensation matters but touched on other governance and related matters as well. While we devoted much time and effort in 2019 to communicating information regarding our executive compensation policies and practices, we also were keenly interested in feedback from our investors as to how we might improve those practices and policies from the perspective of our shareholders. We generally seek a collaborative and mutually beneficial approach to many issues of importance to investors that affect our business, and to ensure that our corporate governance practices remain appropriate. This approach is especially important in the context of executive compensation matters. In our shareholder outreach during 2019, we directly telephoned, emailed, and/or engaged in discussions with over 15 of our largest institutional investors representing a majority of our total outstanding shares. Where investors were not readily available, we followed up where appropriate to maximize our connectivity. We were successful in establishing direct discussions with approximately half of our largest institutional investors. When we were not able to engage in direct communication we encouraged open dialogue with our shareholders throughout the year. The Company listened to investor’s feedback and noted some common themes which are outlined in the table below.29
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The results of our outreach program were extremely informative to us and the common themes that prevailed led the Compensation Committee to take a closer look at our current compensation programs and implement changes outlined in the table above.
Allocation ofOur 2022 Executive Compensation Program In Detail
The mix of total direct compensation for our named executive officers includes base salary, performance-based annual incentives, and both long-term performance and time-based equity incentives. We believe that these compensation components help balance the incentive for our executives to achieve annual goals but not take undue risk.
We feel this is a good balance of compensation that both encourages appropriate risk taking but mitigates the prospect of taking unnecessary risk.
Our 2019 Executive Compensation Components
For the fiscal year ended December 31, 2019, the Company introduced long-term equity incentive compensation in the form of performance based restricted stock units to the principal components of compensation for the named executive officers which were as follow:
base salary;
performance-based annual incentive compensation;
time-based restricted stock units;
performance based restricted stock units;
retirement benefits; and
perquisites and other personal benefits.
Base Salary
Base salary is designed to provide competitive levels of guaranteed compensation to executives based upon their experience, duties and scope of responsibility. The Company pays base salaries because it provides a basic level of compensation and is necessary to recruit and retain executives. The Compensation Committee also uses annual base salary adjustments to reflect an individual’s performance or changed responsibilities. Base salary levels are also important because they are used to determine the target amount of the performance-based incentive bonuses and the amount of retirement benefits.
In determining the base salary of named executive officers,our NEOs, the Compensation Committee considered a variety of factors including the individual executive’s level of responsibility and individual performance and the financial and operational performance of the Company and the Bank relative to internal budgeted amounts and performance of competitors. The benchmarking analysis prepared by Pearl Meyer for 20192022 indicated that the base salary levels of the Company’s named executive officersPresident & CEO, Senior Executive Vice President/Chief Operating Officer, and the Senior Executive Vice President/Chief Real Estate Lending Officer were generally at oraligned within a competitive range of the market. The analysis also showed that the base salary of Ms. Cullen, the Company’s Senior Executive Vice President/Treasurer and Chief Financial Officer was below the median and that the base salary of Mr. Bingold, the Senior Executive Vice President/Chief Retail and Client Development Officer was slightly above the median. Accordingly, the Compensation Committee did not awardresolved to increase Ms. Cullen’s and Mr. Bingold’s base salary increases for threesalaries, effective as of January 1, 2022, by approximately 4% and 8%, respectively, to better align their total compensation versus our named executive officers as discussed above. Base salary increases set by the Compensation Committee for our two named executive officers, for the fiscal year 2019, were intended to position short-term cash compensation levels at the median of the Peer Group adjusted by the results of an assessment of the Company’s performance during the year, as well as each individual executive’s contribution to such performance.peers.
Performance-Based Annual IncentiveIncentives
The Company offers named executive officersNEOs the opportunity to earn performance-based annual cash incentive bonuses to drive achievement of performance goals for the year. These bonuses are provided consistent with the Company’s Annual Incentive Plan for Executives and Senior Officers (the “Incentive Bonus Plan”), which is adopted under the authority of our Omnibus Plan.
Under the Incentive Bonus Plan for 2022, the target bonus for each NEO as a percentage of his or her base salary was as follows:
• CEO/President | fifty percent (50%) | |
• Senior Executive Vice President | forty percent (40%) |
For all of our named executive officersNEOs the performance criteria used were solely based on Company financial performance metrics. These criteria consisted of of:
core operating earnings per diluted common shareshare; and
core operating return on average equity, with each of these factors weighted equally.
The Compensation Committee concluded that these performance criteria continued to be appropriate. They are recognized industry metrics and are appropriate for the Company in particular by combining and equally weighting financial performance incentives based on a traditional operating basis per common share and performance incentives based on the return on equity, which is a well-recognized measuremeasures of performance and profitability in the banking industry. Target level performance for these factors was set as follows:
Core operating earnings per diluted common share of $1.72. For this purpose, core operating earnings per diluted common share excludes the effects of the net gains or losses from the sale of securities, net gains or losses from fair value adjustments, and net gains or losses from the sale of assets, gains from life insurance proceeds, merger expenses, and accelerated employee benefits upon officer’s death.
Core operating return on average equity of 8.84%. For this purpose, the items excluded above for determining core operating earnings per diluted common share are also excluded.
The Company uses core operating results to set Incentive Bonus Plan target performance rather than using accounting principles generally accepted in the United States (“GAAP”) measures because core operating results exclude onetimeone-time gains and losses and, othernon-recurring items. items that may be related to strategic decisions involving long-term opportunities or risk mitigation. The Company believes this measure of earnings is an important indication of ongoing operations (as defined in the Reconciliation of GAAP and Core Earnings table
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provided in Exhibit 99.1 on the Company’s current report on Form8-K filed on January 30, 2020)26, 2023). Additionally, theThe Company believes this earnings measure is important to management and investors in evaluating its ongoing operating performance.
The target performance levels were consistent with the Company’s 2019 Strategic Plan as approved by the Board of Directors. For each performance factor, the threshold performance level was set at 80% of the target level, and the maximum performance level was set at 110% of the target level. Performance results within these benchmarks are linearly interpolated. Target, minimum and maximum bonus amounts for established performance targets were subject to reduction, but not increase, at the discretion of the Compensation Committee.
The target performance levels for 2022 were consistent with the Company’s Strategic Plan as approved by the Board of Directors and were set in early 2022. The performance levels determined as set forth below for the Incentive Bonus Plan for 20192022 were designed by the Compensation Committee consistent with the Company’s 20192022 Strategic Plan and in the context of numerous complex and uncertain risks to our 20192022 performance as described in our Annual Report on Form10-K for the fiscal year ended December 31, 2019. Those risks included in particular uncertainties beyond our control2022, filed with the Securities and inherent in our business, such as the direction of interest ratesExchange Commission on March 14, 2023. The targets set for 2022 represented a decrease compared to actual 2021 achievement levels and the actions of government
agencies. Several of these factors were considered in particular. First, while we were and continue to be unable to predict the direction and timing of future interest rate changes, the Compensation Committee noted that if interest rates rose during 2019, then the result could have increased our cost of deposits, which could have reduced our net interest margin. Second, we would be affected by the monetary and fiscal policies of various agencies of the United States Government, including the Federal Reserve System. In view of changing conditions in the national economy and in the money markets, itFor 2022, target level performance was difficult for us to predict future changes in monetary policy or the effect of such changes on the business or financial condition of the Company or the Bank. These uncertain factors were exacerbated in the context of indications in early 2019 by the Federal Reserve that it would be increasing interest rates over time from historically low levels.
Under the Incentive Bonus Plan for 2019, the target bonus for each named executive officer as a percentage of his or her base salary wasset as follows:
The Compensation Committee met in January 2020 to determineCore operating earnings per diluted common share of $2.54. For this purpose, core operating earnings per diluted common share excludes the amounts earned under the Incentive Bonus Plan and determined that quantitative Company-wide performance approximated target level on both performance criteria. The chart below provides the performance level needed for eacheffects of the three payout levels,net gains or losses from the Company’s actualsale of securities, net gains or losses from fair value adjustments, and net gains or losses from the disposition of assets, net amortization of purchase accounting adjustments, and merger expenses.
Core operating return on average equity of 11.27%. For this purpose, the items excluded above for determining core operating earnings per diluted common share are also excluded.
As a result of the above considerations and based on our 2022 financial performance achievements and consistent with our program design, the resulting achievement in relation to target:NEOs received annual incentive awards payouts of 99.7% of target.
Below Threshold | Threshold | Target | Maximum | Above Maximum | Achievement | Percentage to Target | Performance Levels | Actual Results | ||||||||||||||||||
Performance Factors | Below Threshold | Threshold | Target | Maximum | Achievement | Payout (as a % of Target) | ||||||||||||||||||||
Core operating earnings per diluted common share | <$1.38 | $1.38 | $1.72 | $1.89 | >$1.89 | $1.65 | 96% | <$2.03 | $2.03 | $2.54 | $2.79 | $2.49 | 98.0% | |||||||||||||
Core operating return on average equity | <7.07% | 7.07% | 8.84% | 9.72% | >9.72% | 8.42% | 95% | <9.02% | 9.02% | 11.27% | 12.40% | 11.42% | 101.3% | |||||||||||||
Bonus Achievement (% of target) | 0% | 60% | 100% | 125% | 125% | 91% | ||||||||||||||||||||
Payout (as a % of Target) | 0% | 60% | 100% | 125% | — | 99.7% |
The amount of compensation earned by each named executive officerof the NEO’s under the Incentive Bonus Plan for 20192022 is shown in the Summary Compensation Table on page 3238 in theNon-Equity Incentive Plan Compensation column.
Long-Term Equity Incentive Compensation
The Company provides the named executive officersNEOs with long-term equity incentive compensation to encourage them to focus on long-term Company performance and to provide an opportunity for them to increase their ownership stake in the Company. Long-term equity incentive compensation awards are structured in accordance with the shareholder-approved Omnibus Plan.
The Compensation Committee periodically evaluates the use of all forms of long-term equity incentive instruments. In recent years theAnnual equity grants to senior executives have provided forthe NEOs in 2022 consisted of a 50/50 mix of performance-based and time-based vesting in equal installments over a five-year period from the date of grant. Beginning in 2019, the level of time-based restricted stock units was reduced and equity as follows:
performance based restricted stock units were also granted as a new component of the long term incentive compensation mix, vesting at the end of the three-year performance period (subject to achievement of performance goals) in an effort to better align the Company’s current long-term incentive approach with its compensation philosophy; and objectives.
Accordingly, in January 2019, the Compensation Committee granted a mix of both time based and performance based31
time-based restricted stock units to each of our named executive officers. In order to align named executive officer equity compensation with shareholder interests and to also limit shareholder dilution, the
Compensation Committee believes that restricted stock units in both forms are the appropriate long-term equity vehicle. The size and terms of these awards were intended to provide incentives that focus our management team on the task of creating long-term shareholder value. The sizes of these awards were determined by a number of factors, including the individual performance of the named executive officers, market data, and overall Company performance metrics. In determining to award restricted stock units rather than stock options, the Compensation Committee considered the practical and quantitative aspects of its recent Company-wide utilization of shares (burn rate) and the availability of shares for future grant under the Company’s Omnibus Plan. The grants are shown in detail in the Grants of Plan Based Awards Table on page 33.
With respect to the grant of time based restricted stock grants units, the vesting schedule is the same as the majority of our prior grants. Specifically, those grants vest 20% on each of the first five anniversaries of the grant, which is intended to encouragesupports our leadership retention of our executive teamobjectives and to motivate them to consider Company performance from afocuses the NEOs on long-term as well as a short-term horizon.performance.
As noted above beginning for 2019, theThe Compensation Committee introduced agrants performance vesting equity component to the annual long term incentive grant process. Specifically, performance based and time-based restricted stock units comprised 50%to each of each named executive officer’s long term incentive compensation mix vesting atour NEOs to align with shareholder interests and to also limit shareholder dilution. Target award opportunities are determined using various factors, including individual performance, market data, and overall Company performance metrics.
The table below shows the endannual equity awards, the number of target performance-based restricted stock units and time-based restricted stock units, and the grant date fair value of the three-year performance period (subject to achievement of performance goals). The grants are shown in detailawards, as reported in the Grants of Plan Based Awards Tablein 2022 table on page 33.39 for each of the NEOs:
2022 Annual Equity Awards | ||||||||||||||||
Performance Based(1) | Time-Based(2) | |||||||||||||||
NEO | # of Units | Grant Date $ Value | # of Units | Grant Date $ Value | ||||||||||||
John R. Buran | 11,750 | $ | 295,043 | 11,750 | $ | 295,043 | ||||||||||
Susan K. Cullen | 5,800 | $ | 145,638 | 5,800 | $ | 145,638 | ||||||||||
Maria A. Grasso | 6,200 | $ | 155,682 | 6,200 | $ | 155,682 | ||||||||||
Francis W. Korzekwinski | 5,800 | $ | 145,638 | 5,800 | $ | 145,638 | ||||||||||
Michael Bingold | 5,800 | $ | 145,638 | 5,800 | $ | 145,638 |
(1) | Performance based restricted stock units vest at the end of the three-year performance period subject to achievement of performance goals as described below. |
(2) | Time-based restricted stock units vest 20% on each of the first five anniversaries of the grant, generally subject to continued employment. |
In January 2019,2022, the Compensation Committee determined the performance metrics for the performance based restricted stock units which were the following two equally weighted metrics: (1) total losses,charge offs, and (2) increase tangible book value.value per share. Performance based restricted stock units will be earned, if at all, based on the achievement of the two equally-weightedequally weighted performance goals during the three-year performance period as determined by the Compensation Committee in its absolute and sole discretion. For each performance goal, the amount of performance restricted stock units that may be earned (as a percentage of the target grant amount) at each of the threshold, target and maximum levels are as follows:
Below Threshold | Threshold | Target | Maximum | |||||||||||||
Earned PRSUs | 0 | % | 50 | % | 100 | % | 150 | % |
Performance below the threshold-level during the performance period will result in no performance based restricted units being earned with respect to the applicable performance goal. Performance above the maximum-levelmaximum level during the performance period will result in no more than the maximum performance based restricted units being earned with respect to the applicable performance goal. In addition, performance between the threshold-levelthreshold- level and maximum-level will be calculated using linear interpolation.
Tax-QualifiedIn January of 2023, the Company’s 2020 performance based restricted stock unit grant settled following completion of the three-year performance period (2020-2022). Target level performance for these grants was set in 2020 as follows for the two equally weighted metrics:
Total charge-offs of 0.30% for the performance period. For this purpose, “total charge offs” meant the three-year total of net loans charged off divided by average loans over the same period.
Increase Tangible Book Value of 15.00% for the performance period. For this purpose, “increase tangible book value” meant the three-year increase in tangible equity.
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Based on the Company’s achievement of the performance goals in the three-year performance period, the Compensation Committee determined that the 2020 performance restricted stock units were earned at 75% of target.
Performance Levels | Actual Results | |||||||||||
Performance Factors | Below Threshold | Threshold | Target | Maximum | Achievement | Payout (as a % of Target) | ||||||
Total charge-offs | >0.35% | 0.35% | 0.30% | 0.25% | 0.13% | 150% | ||||||
Increase Tangible Book Value | <12.00% | 12.00% | 15.00% | 16.50% | 11.44% | 0% | ||||||
Payout (as a % of Target) | 0% | 50% | 100% | 150% | — | 75% |
The 2020 performance based restricted stock unit grants that were earned by each of our NEOs are captured in the Outstanding Equity Awards at 2022 Fiscal Year-End Table on page 41.
Other Compensation Practices, Policies and Programs
Executive Stock Ownership Guidelines
The Compensation Committee has formally established Executive Stock Ownership Guidelines for executive officers as a way to more closely align the interests of key executives with those of the Company’s shareholders. These guidelines provide a direct link between executive rewards and Company results and encourage executives to consider Company performance from a long-term as well as short-term perspective.
These stock ownership guidelines apply to all long-term equity awards made to executive officers on or after June 1, 2006. The amount to be retained depends on the executive’s position. The President/CEO, Senior Executive Vice Presidents, and Executive Vice Presidents are required to retain 50% of their “profit shares” and certain Senior Vice Presidents must retain 25% of their “profit shares.” Profit shares are defined as net shares acquired upon vesting of full-value awards following payment of applicable taxes with respect to the award. Shares subject to the ownership guidelines must be retained while the executive is employed by the Company until the executive reaches age 61, after which time the executive may dispose annually of 20% of the aggregate number of profit shares then held. Compliance with these guidelines is mandatory for all executive officers of the Company.
Compensation Clawback Features
We are subject to Section 304 of the Sarbanes-Oxley Act of 2002, which requires the recovery of any bonus, or other incentive-based or equity-based compensation received from the Company, as well as any profits realized from the sale of securities of the Company, from our CEO and CFO if we are required to restate our financials due to material noncompliance with any financial reporting requirements as a result of misconduct. We have never been required to recover any compensation from our CEO or CFO under this provision. The Company intends to adopt a clawback policy consistent with the requirements of Exchange Act Rule 10D-1 after NASDAQ releases final listing standards in accordance with such rule.
Anti-hedging/Pledging Policy
We have a policy prohibiting our executive officers and directors from engaging in any form of hedging transaction (derivatives, equity swaps, forwards, etc.) in our stock, including, among other things, short sales and transactions involving publicly traded options. In addition, with limited exceptions, our executive officers are prohibited from holding our stock in margin accounts and from pledging our stock as collateral for loans. Our Insider Trading Policy, which is applicable to all levels of employees and to our directors, also prohibits all hedging transactions in our equity securities, regardless of whether or not such securities were granted as our compensation. These policies further align executives’ interests with those of our shareholders.
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Retirement Benefits
Tax-Qualified Retirement Benefits
The Company providestax-qualified retirement benefits to substantially all of its employees, including the named executive officers,NEOs, in order to provide a competitive compensation package within the market in which the Company operates.
In 2006, the Company froze its defined benefit Retirement Plan and replaced it with the Defined Contribution Retirement Program (“DCRP”). Under the DCRP, employees receive an annual Company contribution equal to 4% of their eligible base salary (up to tax law limits). In 2019, the Company froze eligibility to the DCRP, excluding new hires who joined the Company after 2019.
The Company offers atax-qualified retirement savings plan pursuant to which all full-time employees are eligible to contribute up to 25% of their annual salary on apre-tax basis (subject to tax law limits). The Company matches 50% of the first 6% of salary contributed by the employee. Additionally, the Company may make a profit sharingprofit-sharing contribution in an amount determined by the Company’s Board of Directors each year in its discretion. For 2019,2022, the contribution was approximately 2%5% of eligible compensation (defined generally as base salary and annual bonus, subject to tax law limits).
Supplemental Retirement Benefits
In addition to thetax-qualified retirement benefits discussed above, the Company provides the named executive officers and certain other executives with the opportunity to participate in a supplemental retirement plan, the Supplemental Savings Incentive Plan (“SSIP”), which offers these individuals the opportunity to receive certain benefits not permitted to be provided under thetax-qualified plans due to tax law limitations. However, the SSIP does not provide credits for DCRP contributions which cannot be made to thetax-qualified plan to the extent base salary exceeds tax law limits.
The SSIP allows participating executives to defer a portion of their compensation. For amounts earned for 2019 or later, participating executives have the ability to defer up to 80% of their base salary and 100% of their bonus and incentive compensation into the SSIP. The Bank matches 50% of each participant’s eligible contributions to the SSIP. The maximum amount of the match, which varies by participant, is generally between 5% and 7% of base salary.
The Company also credits each participant’s account in the SSIP with a number of phantom shares of common stock of the Company equal to the number of shares of common stock that would have been contributed to the participant’s profit sharingprofit-sharing account under thetax-qualified plan but were not due to tax law limits. When dividends are paid on the common stock, dividend equivalents are deemed reinvested in additional phantom shares. These amounts are required to remain invested as phantom shares of Company common stock (whose value is determined by reference to the price of the Company’s common stock) until the participant’s termination of employment, thereby further aligning our executives’ interests with those of our stockholders.shareholders. The Company wants management-level employees to have a significant investment in Company common stock and believes it is appropriate to have a portion of their supplemental retirement benefits invested in this way.
Pursuant to the terms of his employment agreement, Mr. Buran participated in a supplemental executive retirement plan (the “SERP”) as discussed in detail under the heading “Potential Payments Upon Termination or Change of Control” on page 38.46.
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Perquisites and Other Personal Benefits
Perquisites and other benefits represent a small part of the Company’s overall compensation package and are offered only after consideration of business need. Perquisites and other personal benefits provided to the named executive officersNEOs are reviewed annually. The named executive officersNEOs are provided with the use of a Company automobile or a car allowance. The use of company automobiles and car allowance are largely for business purposes. Named executive officersNEOs bear the tax cost attributable to their personal usage of the Company automobile. Attributed costs of this perquisite and other personal benefits for the named executive officersNEOs for the fiscal year ended December 31, 20192022, are not included in the Summary Compensation Table on page 3238 since the aggregate incremental cost to the Company due to personal use for each named executive officer was less than $10,000.
Each named executive officerNEO and certain other officers are offered the opportunity to participate in the Bank Owned Life Insurance (“BOLI”) provided by the Bank. In the event of a BOLI participant’s death while employed by the Bank, his or her beneficiaries are entitled to a death benefit from the policy equal to two times the participant’s base salary at the time of death. Upon retirement from the Bank with five years of service, the death benefit coverage under the policy reduces to one time the base salary plus $50,000. Upon a participant’s termination of employment from the Bank, after five years of service but before eligibility for retirement, the death benefit coverage under the policy reduces to one time the base salary. At the time the Bank purchased the insurance policy providing for this coverage, it paid a single premium intended to fully fund the policy. The Summary Compensation Table on page 3238 reflects the value of the insurance coverage provided under the policy in accordance with Internal Revenue Service guidelines.
Employment Agreements
The Company has entered into employment agreements with the named executive officers.NEOs. Information regarding payments to the named executive officersNEOs pursuant to such employment agreements upon termination of employment or a change of control is provided under the heading “Potential Payments Upon Termination or Change of Control” on page 38.
Executive Stock Ownership Guidelines
In 2006, the Compensation Committee formally established Executive Stock Ownership Guidelines for executive officers as a way to more closely align the interests of key executives with those of the Company’s shareholders. These guidelines provide a direct link between executive rewards and Company results and encourage executives to consider Company performance from a long-term as well as short-term perspective.
These stock ownership guidelines apply to all long-term equity awards made to executive officers on or after June 1, 2006. The amount to be retained depends on the executive’s position. The President/CEO, Senior Executive Vice Presidents, and Executive Vice Presidents are required to retain 50% of their “profit shares” and certain Senior Vice Presidents must retain 25% of their “profit shares.” Profit shares are defined as net shares acquired upon stock option exercises or vesting of full-value awards following payment of applicable taxes with respect to the award. Shares subject to the ownership guidelines must be retained while the executive is employed by the Company until the executive reaches age 61, after which time the executive may dispose annually of 20% of the aggregate number of profit shares then held. Compliance with these guidelines is mandatory for all executive officers of the Company.
Tax Deductibility of Executive Compensation
The deductibility of compensation paid to certain of our executive officers in excess of $1 million is limited by Section 162(m) of the Internal Revenue Code, subject to grandfathering rules for certain compensation paid pursuant to arrangements in effect as of November 2, 2017. The “performance based” compensation exception to Section 162(m) that existed under prior law has been repealed.46.
Risk Assessment of Executive Officer Compensation
In 2019,2022, we continued to enhance our risk assessment processes to comply with the United States Department of the Treasury’s requirement that all incentive plans be reviewed to ensure they do not motivate unnecessary or excessive risk that threatens the value of the Company. The Company is regulated by the Federal Reserve and the Bank, which is a New York State chartered commercial bank, is regulated by the New York Department of Financial Services and the Federal Deposit Insurance Corporation. We have always adhered to a conservative and balanced approach to risk. Our management and Board conduct regular reviews of our business in an effort to ensure we remain within appropriate regulatory guidelines and appropriate practice. We believe that our compensation programs reflect a balanced approach to rewarding performance across many different types of financial, customer, and employee performance measures.
Risk Assessment of Senior Executive Officer Plans
The Compensation Committee has reviewed the compensation programs for senior executive officers with the Company’s Chief Risk Officer. The Incentive Bonus Plan, which provides annual performance-based incentive compensation to our named executive officersNEOs and other senior officers, contains a number of features that discourage our executives from taking unnecessary and excessive risk, including the following:
Performance targets are determined by the Compensation Committee and the Board based on the Company’s Strategic Plan as approved by the Board.
The performance measures applicable for the Chief Executive Officer and Senior Executive Vice Presidents are 100% based on Company-wide performance, and the measures applicable for the other participants, including the Executive Vice Presidents, are at least 70% based on Company-wide
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There is a limit on the amount which can be paid to any executive under the plan, regardless of the amount by which performance exceeds target levels.
The Compensation Committee and the Board have discretion to reduce the amount of annual incentive payable below the amount otherwise earned under the plan formula, if it believes that the formulaic payout is not warranted that year, and in the past have exercised such discretion.
While the annual Incentive Bonus Plan rewards achievement of short-term goals, the Company has several programs which encourage long-term value creation. Equity awards under the Company’s Omnibus Plan are granted by the Compensation Committee subject to Board approval. In recent yearsSince 2019 the equity grants to senior executives have provided for vestingboth time-based restricted stock units that vest in equal installments over a five-year period from the date of grant. Beginning in 2019,grant and performance based restricted stock units were granted as a new component of the long term incentive compensation mix, vestingthat vest after at the end of the three-year performance period (subject to achievement of performance goals). Moreover, the Company’s Executive Stock Ownership Guidelines require executive officers to hold a specified percentage of the shares acquired as equity awards throughout the period of their employment. In addition, the Company’s Supplemental Savings Incentive Plan provides that amounts that cannot be credited astax-qualified profit sharing profit-sharing contributions be credited in the form of phantom shares of Company common stock and be held in such form until termination of employment.
We believe that our approach to goal setting, setting of targets with payouts at multiple levels of performance, evaluation of performance results, and negative discretion in the payout of incentives helps to mitigate excessive risk-taking that could harm our value or reward poor judgment by our executives. Features of our programs reflect sound risk management practices. We believe that we have allocated our compensation among base salary and shortshort- and long termlong-term incentive compensation in such a way as to not encourage excessive risk-taking. Moreover, the multi-year vesting of our equity awards and our share ownership guidelines enhance risk management over time.
In addition, both the senior executive officer plans and the employee compensation plans are subject to controls which mitigate the risks inherent in these plans. These controls include our risk review with the Company’s Chief Risk Officer, accounting processes, internal and external audit functions, and processes surrounding internal control over financial reporting and disclosure controls.
Compensation Clawback Features
We are subject to Section 304 of the Sarbanes-Oxley Act of 2002, which requires the recovery of any bonus or other incentive-based or equity-based compensation received from the Company, as well as any profits realized from the sale of securities of the Company, from our CEO and CFO if we are required to restate our financials due to material noncompliance with any financial reporting requirements as a result of misconduct. We have never been required to recover any compensation from our CEO or CFO under this provision.
Anti-hedging/Pledging Policy
We have a policy prohibiting our executive officers and directors from engaging in any form of hedging transaction (derivatives, equity swaps, forwards, etc.) in our stock, including, among other things, short sales and transactions involving publicly-traded options. In addition, with limited exceptions, our executive officers are prohibited from holding our stock in margin accounts and from pledging our stock as collateral for loans. Our Insider Trading Policy, which is applicable to all levels of employees and to our directors, also prohibits all hedging transactions in our equity securities, regardless of whether or not such securities were granted as our compensation. These policies further align executives’ interests with those of our stockholders.36
The Compensation Committee of the Board of Directors of the Company has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
THE COMPENSATION COMMITTEE |
Alfred A. DelliBovi Steven J. D’Iorio Louis C. Grassi, CPA
Donna M. O’Brien |
The table below summarizes the total compensation of each of the named executive officers for the fiscal years ended December 31, 2019, 20182022, 2021 and 2017.2020. The Company has entered into employment agreements with the named executive officers. A description of the material terms of these employment agreements is provided under the heading “Potential Payments Upon Termination or Change of Control” on page 38.46.
Name and Principal Position | Year | Salary(1) ($) | Bonus ($) | Stock Awards(2) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(3) ($) | All Other Compensation ($) | Total ($) | Year | Salary(1) ($) | Bonus ($) | Stock Awards(2) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(3) ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
John R. Buran | 2019 | 1,055,000 | — | 525,930 | — | 480,745 | 13,930 | 132,497 | (4) | 2,208,102 | 2022 | 1,055,000 | — | 590,085 | — | 525,910 | — | 191,494 | (4) | 2,362,489 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
President and Chief Executive | 2018 | 1,055,000 | — | 535,990 | — | 494,243 | (24,530 | ) | 163,310 | 2,224,013 | 2021 | 1,055,000 | — | 507,650 | — | 659,375 | 49,727 | 262,508 | 2,534,260 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Officer of the Company and the Bank | 2017 | 1,020,000 | 32,000 | 575,025 | — | 480,632 | 1,759 | 177,167 | 2,286,583 | 2020 | 1,055,000 | — | 465,065 | — | 492,688 | 6,813 | 150,149 | 2,169,715 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susan K. Cullen | 2019 | 448,766 | — | 259,608 | — | 163,317 | — | 58,125 | (5) | 929,816 | 2022 | 466,454 | — | 291,276 | — | 186,157 | — | 83,126 | (5) | 1,027,013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Executive Vice President, | 2018 | 440,000 | — | 263,764 | — | 164,904 | — | 69,089 | 937,757 | 2021 | 448,800 | — | 251,056 | — | 224,400 | — | 108,972 | 1,033,228 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasurer and Chief Financial Officer of the Company, Senior Executive Vice President/ Finance of the Bank | | 2017 | | | 400,000 | | | 10,000 | | 262,268 | | | — | | | 150,787 | | | — | | | 69,999 | | | 893,054 | | 2020 | 448,800 | — | 229,564 | — | 167,673 | — | 64,641 | 910,678 | |||||||||||||||||||||||||||||||||||||
Maria A. Grasso | 2019 | 542,045 | — | 277,512 | — | 197,600 | — | 67,991 | (6) | 1,085,148 | 2022 | 542,045 | — | 311,364 | — | 216,164 | — | 95,196 | (6) | 1,164,769 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Executive Vice | 2018 | 542,045 | — | 282,805 | — | 203,148 | — | 83,060 | 1,111,058 | 2021 | 542,045 | — | 284,284 | — | 271,023 | — | 128,900 | 1,226,252 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and Chief Operating Officer of the Company and the Bank, and Corporate Secretary | 2017 | 526,258 | 13,000 | 281,201 | — | 198,381 | — | 89,997 | 1,108,837 | 2020 | 542,045 | — | 245,396 | — | 202,509 | — | 75,635 | 1,065,585 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Francis W. Korzekwinski | 2019 | 470,957 | — | 259,608 | — | 171,686 | 107,065 | 060,658 | (7) | 1,069,974 | 2022 | 470,957 | — | 291,276 | — | 187,815 | — | 84,844 | (7) | 1,034,892 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Executive Vice President | 2018 | 470,957 | — | 263,764 | — | 176,506 | (36,221 | ) | 73,876 | 948,882 | 2021 | 470,957 | — | 251,056 | — | 235,479 | (20,872 | ) | 113,762 | 1,050,382 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
and Chief of Real Estate Lending of the Company and the Bank | 2017 | 457,240 | 11,500 | 262,268 | — | 172,364 | 54,712 | 79,821 | 1,037,905 | 2020 | 470,957 | — | 229,564 | — | 175,951 | 91,593 | 67,351 | 1,035,416 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael Bingold | 2019 | 310,274 | — | 111,900 | — | 134,882 | — | 44,066 | (8) | 601,122 | 2022 | 399,423 | — | 291,276 | — | 159,518 | — | 72,656 | (8) | 922,873 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Executive Vice President | 2018 | 298,763 | — | 105,788 | — | 104,511 | — | 50,097 | 559,159 | 2021 | 370,000 | — | 251,056 | — | 185,000 | — | 91,776 | 897,832 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
and Chief Retail and Client Development Officer of the Company and the Bank | 2017 | 283,250 | — | 105,188 | — | 89,869 | — | 53,124 | 531,430 | 2020 | 370,000 | — | 229,564 | — | 138,233 | — | 55,369 | 793,166 |
(1) | Amounts shown are not reduced to reflect the named executive officers’ elections, if any, to defer receipt of salary into the 401(k) Savings Plan or the Supplemental Savings Incentive Plan (“SSIP”). Amounts deferred into the SSIP in |
(2) | Reflects the grant date fair value (excluding the effect of estimated forfeitures) |
(3) | Reflects the actuarial change in the present value of the named executive officer’s benefits under the Retirement Plan, which is the Bank’s only defined benefit pension plan. For 2022, the actuarial change in present value of Mr. Buran’s and Mr. Korzekwinski’s benefits under the Retirement Plan was $(24,321) and $(146,533), respectively. Amounts are determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. The Retirement Plan was frozen effective September 30, 2006. Ms. Cullen, |
(4) | Consists of |
(5) | Consists of |
(6) | Consists of |
(7) | Consists of |
(8) | Consists of |
Grants of Plan Based Awards in 20192022
All stock andnon-equity incentive plan awards granted by the Company to the named executive officers in 20192022 are shown in the following table. They were all granted under the 2014 Omnibus Incentive Plan.
Estimated Future Payouts underNon-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number Units(3) (#) | Grant Date Fair Value of Stock Awards(4) ($) | |||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||
John R. Buran | 1/31/2019 | 316,500 | 527,500 | 659,375 | ||||||||||||||||||||||||||||||||
1/31/2019 | 5,875 | 11,750 | 17,625 | 262,965 | ||||||||||||||||||||||||||||||||
1/31/2019 | 11,750 | 262,965 | ||||||||||||||||||||||||||||||||||
Susan K. Cullen | 1/31/2019 | 107,712 | 179,520 | 224,400 | ||||||||||||||||||||||||||||||||
1/31/2019 | 2,900 | 5,800 | 8,700 | 129,804 | ||||||||||||||||||||||||||||||||
1/31/2019 | 5,800 | 129,804 | ||||||||||||||||||||||||||||||||||
Maria A. Grasso | 1/31/2019 | 130,091 | 216,818 | 271,023 | ||||||||||||||||||||||||||||||||
1/31/2019 | 3,100 | 6,200 | 9,300 | 138,756 | ||||||||||||||||||||||||||||||||
1/31/2019 | 6,200 | 138,756 | ||||||||||||||||||||||||||||||||||
Francis W. Korzekwinski | 1/31/2019 | 113,030 | 188,383 | 235,479 | ||||||||||||||||||||||||||||||||
1/31/2019 | 3,100 | 5,800 | 8,700 | 129,804 | ||||||||||||||||||||||||||||||||
1/31/2019 | 5,800 | 129,804 | ||||||||||||||||||||||||||||||||||
Michael Bingold | 1/31/2019 | 88,800 | 148,000 | 185,000 | ||||||||||||||||||||||||||||||||
1/31/2019 | 1,000 | 2,000 | 3,000 | 44,760 | ||||||||||||||||||||||||||||||||
1/31/2019 | 3,000 | 67,140 |
Estimated Future Payouts under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number Units(3) (#) | Grant Date Fair Value of Stock Awards(4) ($) | |||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||
John R. Buran | 1/27/2022 | 316,500 | 527,500 | 659,375 | ||||||||||||||||||||||||||||||||
1/27/2022 | 5,875 | 11,750 | 17,625 | 295,043 | ||||||||||||||||||||||||||||||||
1/27/2022 | 11,750 | 295,043 | ||||||||||||||||||||||||||||||||||
Susan K. Cullen | 1/27/2022 | 112,032 | 186,720 | 233,400 | ||||||||||||||||||||||||||||||||
1/27/2022 | 2,900 | 5,800 | 8,700 | 145,638 | ||||||||||||||||||||||||||||||||
1/27/2022 | 5,800 | 145,638 | ||||||||||||||||||||||||||||||||||
Maria A. Grasso | 1/27/2022 | 130,091 | 216,818 | 271,023 | ||||||||||||||||||||||||||||||||
1/27/2022 | 3,100 | 6,200 | 9,300 | 155,682 | ||||||||||||||||||||||||||||||||
1/27/2022 | 6,200 | 155,682 | ||||||||||||||||||||||||||||||||||
Francis W. Korzekwinski | 1/27/2022 | 113,030 | 188,383 | 235,479 | ||||||||||||||||||||||||||||||||
1/27/2022 | 2,900 | 5,800 | 8,700 | 145,638 | ||||||||||||||||||||||||||||||||
1/27/2022 | 5,800 | 145,638 | ||||||||||||||||||||||||||||||||||
Michael Bingold | 1/27/2022 | 96,000 | 160,000 | 200,000 | ||||||||||||||||||||||||||||||||
1/27/2022 | 2,900 | 5,800 | 8,700 | 145,638 | ||||||||||||||||||||||||||||||||
1/27/2022 | 5,800 | 145,638 |
(1) | Reflects total amounts payable under the Incentive Bonus Plan at threshold, target and maximum levels of performance. For |
(2) | Reflects the threshold, target and maximum payouts for the performance restricted stock units for the three-year performance period beginning January 1, |
(3) | All of these awards are grants of restricted stock units. They vest 20% per year beginning on the first anniversary of the date of grant subject to continued employment, but vest in full upon the holder’s retirement, death or disability, or upon a change of control. See “Long-Term Equity Incentive Compensation” on page 31. The restricted stock units provide for current payment of cash dividends. |
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(4) | Reflects the grant date fair value (excluding the effect of estimated forfeitures) for each award. Amounts assume target level performance for the performance restricted stock units. Assumptions used in the calculation of such amounts are included in note |
Outstanding Equity Awards at 20192022 FiscalYear-End
Stock Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
Name: | Grant Date | Number of Shares or Units of Stock That Have Not Vested(1) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares Units or Other Rights That Have Not Vested(3) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) ($) | Grant Date | Number of Shares or Units of Stock That Have Not Vested(1) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares Units or Other Rights That Have Not Vested(3) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) (#) | ||||||||||||||||||||||||||||||
John R. Buran | 1/31/2019 | 11,750 | 253,918 | 17,625 | 380,876 | 1/27/2022 | 11,750 | 227,715 | 11,750 | 227,715 | ||||||||||||||||||||||||||||||
1/28/2021 | 12,067 | 233,858 | 17,625 | 341,573 | ||||||||||||||||||||||||||||||||||||
1/30/2018 | 15,200 | 328,472 | — | — | 1/30/2020 | 7,050 | 136,629 | — | — | |||||||||||||||||||||||||||||||
1/31/2017 | 12,300 | 265,803 | — | — | 1/30/2020 | (4) | 8,813 | 170,796 | — | — | ||||||||||||||||||||||||||||||
1/26/2016 | 10,000 | 216,100 | — | — | 1/31/2019 | 4,700 | 91,086 | — | — | |||||||||||||||||||||||||||||||
1/27/2015 | 6,000 | 129,660 | — | — | 1/30/2018 | 3,800 | 73,644 | — | — | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Totals | 55,250 | 1,193,953 | 17,625 | 380,876 | 48,180 | 933,728 | 29,375 | 569,288 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Susan K. Cullen | 1/31/2019 | 5,800 | 125,338 | 8,700 | 188,007 | 1/27/2022 | 5,800 | 112,404 | 5,800 | 112,404 | ||||||||||||||||||||||||||||||
1/30/2018 | 7,480 | 161,643 | — | — | 1/28/2021 | 5,974 | 115,776 | 8,700 | 168,606 | |||||||||||||||||||||||||||||||
1/31/2017 | 5,610 | 121,232 | — | — | 1/30/2020 | 3,480 | 67,442 | — | — | |||||||||||||||||||||||||||||||
1/26/2016 | 3,000 | 64,830 | — | — | 1/30/2020 | (4) | 4,350 | 84,303 | — | — | ||||||||||||||||||||||||||||||
|
|
|
| 1/31/2019 | 2,320 | 44,962 | — | — | ||||||||||||||||||||||||||||||||
1/30/2018 | 1,870 | 36,241 | — | — | ||||||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Totals | 21,890 | 473,043 | 8,700 | 188,007 | 23,794 | 461,128 | 14,500 | 281,010 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Maria A. Grasso | 1/31/2019 | 6,200 | 133,982 | 9,300 | 200,973 | 1/27/2022 | 6,200 | 120,156 | 6,200 | 120,156 | ||||||||||||||||||||||||||||||
1/28/2021 | 6,960 | 134,885 | 9,300 | 180,234 | ||||||||||||||||||||||||||||||||||||
1/30/2018 | 8,020 | 173,312 | — | — | 1/30/2020 | 3,720 | 72,094 | — | — | |||||||||||||||||||||||||||||||
1/31/2017 | 6,015 | 129,984 | — | — | 1/30/2020 | (4) | 4,650 | 90,117 | — | — | ||||||||||||||||||||||||||||||
1/26/2016 | 5,600 | 121,016 | — | — | 1/31/2019 | 2,480 | 48,062 | — | — | |||||||||||||||||||||||||||||||
1/27/2015 | 2,940 | 63,533 | — | — | 1/30/2018 | 2,005 | 38,857 | — | — | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Totals | 28,775 | 621,828 | 9,300 | 200,973 | 26,015 | 504,171 | 15,500 | 300,390 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Francis W. Korzekwinski | 1/31/2019 | 5,800 | 125,338 | 8,700 | 188,007 | 1/27/2022 | 5,800 | 112,404 | 5,800 | 112,404 | ||||||||||||||||||||||||||||||
1/30/2018 | 7,480 | 161,643 | — | — | 1/28/2021 | 5,974 | 115,776 | 8,700 | 168,606 | |||||||||||||||||||||||||||||||
1/31/2017 | 5,610 | 121,232 | — | — | 1/30/2020 | 3,480 | 67,442 | — | — | |||||||||||||||||||||||||||||||
1/26/2016 | 5,200 | 112,372 | — | — | 1/30/2020 | (4) | 4,350 | 84,303 | — | — | ||||||||||||||||||||||||||||||
1/27/2015 | 2,740 | 59,211 | — | — | 1/31/2019 | 2,320 | 44,962 | — | — | |||||||||||||||||||||||||||||||
|
|
|
| 1/30/2018 | 1,870 | 36,241 | — | — | ||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Totals | 26,830 | 579,796 | 8,700 | 188,007 | 23,794 | 461,128 | 14,500 | 281,010 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Michael Bingold | 1/31/2019 | 3,000 | 64,830 | 3,000 | 64,830 | 1/27/2022 | 5,800 | 112,404 | 5,800 | 112,404 | ||||||||||||||||||||||||||||||
1/30/2018 | 3,000 | 64,830 | — | — | 1/28/2021 | 5,974 | 115,776 | 8,700 | 168,606 | |||||||||||||||||||||||||||||||
1/31/2017 | 2,250 | 48,623 | — | — | 1/30/2020 | 3,480 | 67,442 | — | — | |||||||||||||||||||||||||||||||
1/26/2016 | 2,000 | 43,220 | — | — | 1/30/2020 | (4) | 4,350 | 84,303 | — | — | ||||||||||||||||||||||||||||||
1/27/2015 | 1,100 | 23,771 | — | — | 1/31/2019 | 1,200 | 23,256 | — | — | |||||||||||||||||||||||||||||||
|
|
|
| 1/30/2018 | 750 | 14,535 | — | — | ||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||
Totals | 11,350 | 245,274 | 3,000 | 64,830 | 21,554 | 417,716 | 14,500 | 281,010 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(1) |
|
(2) | Market value is based on the closing market price of the Company’s common stock on December 31, |
(4) | The amount reported is the actual number shares underlying the performance restricted stock units granted in 2020 that were earned based on achievement of the performance goals attained during the 2020-2022 performance cycle that ended on December 31, 2022, and remained subject to continued time-based vesting through January 26, 2023. |
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Stock Vested in 20192022
Stock Awards | ||||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||
John R. Buran | 23,900 | 534,898 | ||||||
Susan K. Cullen | 5,240 | 117,152 | ||||||
Maria A. Grasso | 12,690 | 284,015 | ||||||
Francis W. Korzekwinski | 11,620 | 260,064 | ||||||
Michael Bingold | 4,200 | 93,990 |
Stock Awards | ||||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||
John R. Buran | 33,908 | 834,187 | ||||||
Susan K. Cullen | 16,586 | 408,171 | ||||||
Maria A. Grasso | 18,030 | 443,783 | ||||||
Francis W. Korzekwinski | 16,586 | 408,171 | ||||||
Michael Bingold | 8,086 | 198,404 |
The table below shows the present value of accumulated benefits payable to each of the named executive officers, including the number of years of service credited to each such named executive officer, under the Bank’s Retirement Plan determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements.
Name | Plan Name | Number of Years Credited Service(1) (#) | Present Value of Accumulated Benefit(2) ($) | Payments During Last Fiscal Year ($) | Plan Name | Number of Years Credited Service(1) (#) | Present Value of Accumulated Benefit(2) ($) | Payments During Last Fiscal Year ($) | ||||||||||||||||||||||||
John R. Buran | Retirement Plan | 5.8 | 279,738 | — | Retirement Plan | 5.8 | 311,957 | — | ||||||||||||||||||||||||
Susan K. Cullen(3) | Retirement Plan | — | — | — | Retirement Plan | — | — | — | ||||||||||||||||||||||||
Maria A. Grasso(3) | Retirement Plan | — | — | — | Retirement Plan | — | — | — | ||||||||||||||||||||||||
Francis W. Korzekwinski | Retirement Plan | 13.0 | 609,612 | — | Retirement Plan | 13.0 | 533,800 | — | ||||||||||||||||||||||||
Michael Bingold(3) | Retirement Plan | — | — | — | Retirement Plan | — | — | — |
(1) | Number of years of credited service was frozen under the Retirement Plan as of September 30, 2006. |
(2) | Present value of accumulated benefit as of December 31, |
(3) | Ms. Grasso, Ms. Cullen and Mr. Bingold joined the Company in May of 2006, August of 2015 and May of 2013, respectively. Ms. Grasso, Ms. Cullen, and Mr. Bingold are not eligible for the Bank’s Retirement Plan because they did not satisfy the one year of service eligibility requirement prior to the plan freeze. |
Participants in the Retirement Plan earn a full annual retirement benefit at normal retirement age (the later of age 65 or the fifth anniversary of participation) equal to the sum of (1) 2% of “average annual earnings” (the average annual base salary for the three consecutive years out of the final ten years of service which produces the highest average)times years of credited service prior to March 1, 1993, up to 30 years,plus (2) 1.6% of “average annual earnings” times years of credited service after February 28, 1993,plus (3) 0.45% of “average annual earnings” in excess of “average social security compensation” (as determined pursuant to Internal Revenue Service regulations)times years of credited service after February 28, 1993. The total years of credited service taken into account cannot exceed 35 years. Participants also earn a full annual retirement benefit upon retirement at age 62 with 20 years of service. Participants earn a reduced annual early retirement benefit upon retirement at age 60 (without regard to their years of service) or if their ageplusthe number of years of credited service equals 75. The early retirement benefit is generally the full retirement benefit reduced by 0.25% for each month the benefit commences prior to age 65 (prior to age 62 if the retiree has 20 years of service).
The Retirement Plan was frozen effective as of September 30, 2006. As a result, no additional benefits will accrue after that date. In applying the above benefit formulas, compensation and service after September 30, 2006 are disregarded, except that service after that date will continue to be recognized in determining vested service and eligibility for early retirement. Compensation taken into account under the plan was limited by the Internal Revenue Code. The limit that was in effect at the time of the plan freeze was $210,000.
42
Benefits under the Retirement Plan are paid in the form of a monthly annuity for the life of the retiree. Retirees may elect one of several actuarially equivalent alternative annuity forms of benefit under which monthly benefits would be reduced during the life of the retiree but benefits would continue to be payable after the retiree’s death, either for the life of the retiree’s beneficiary or for a specified number of years
Annual benefits under the Retirement Plan are limited by federal tax laws. As a general rule, during 20192022, annual benefits were limited to $225,000.$245,000. The Retirement Plan is funded by the Bank on an actuarial basis. Participants earn a vested right to their accrued retirement benefit upon completion of five years of service with the Bank or its participating affiliates.
Nonqualified Deferred Compensation
Pursuant to the Bank’s Supplemental Savings Incentive Plan (“SSIP”), eligible officers, including all of the named executive officers, may defer a portion of their compensation and receive matching credits with respect to such deferrals. Deferral elections are made by eligible executives in December of each year for amounts to be earned for the following year. For amounts earned prior to 2019, eligible executives were able to elect to defer up to 15% of salary less 6% of their compensation as defined under the Bank’s 401(k) Savings Plan. For amounts earned for 2019 or later, participating executives may elect to defer up to 80% of their base salary and 100% of their bonus and incentive compensation into the SSIP. The Bank matches 50% of each participant’s eligible contributions to the SSIP. The maximum amount of the match, which varies by participant, is generally between 5% and 7% of base salary.
All of the above credits may be invested by executives in any funds available under the SSIP. The table below shows the funds available under the SSIP, and their annual rate of return for the calendar year ended December 31, 2019,2022, as reported by the administrator of the SSIP.
Name of Fund | Rate of Return | |||
| ||||
American Funds Growth Fund of America R3 | )% | |||
Fidelity Government Cash Reserves Fund | % | |||
Goldman Sachs Equity Income Fund | )% | |||
Goldman Sachs Small Cap Growth Insights Fund | )% | |||
Goldman Sachs Government Income Fund | )% | |||
JPMorgan Strategic Income Opportunities A | % | |||
PIMCO Total Return Admin | )% | |||
Virtus NFJ Small-Cap Value Fund | (16.01 | )% | ||
Thornburg International Value R3 | )% |
Supplemental credits, in the amount that would have been credited to a participant’s account in the 401(k) Savings Plan as discretionary profit sharing contributions but for tax code limitations, are credited under the SSIP in the form of phantom shares (whose value is determined by reference to the Company’s common stock). When dividends are paid on the common stock, dividend equivalents on such phantom shares are deemed reinvested in additional phantom shares. All phantom shares credited under the SSIP are required to remain invested as phantom shares until the participant’s termination of employment.
Amounts deferred by a participant are always fully vested. Matching credits and supplemental credits vest in accordance with the same schedule as the corresponding contributions under thetax-qualified plan, which generally vest in 20% increments upon completion of each of the first five years of service, but vest in full upon the participant’s retirement, death, or disability or upon a change of control. All of the named executive officers are 100% vested under the SSIP, with the exception of Ms. Cullen who is 80% vested.SSIP.
Benefits under the SSIP are paid in cash, in either a lump sum payment or in annual installments, as elected by the executive. Amounts credited prior to 2010 cannot be distributed prior to a participant’s termination of employment. For amounts credited beginning in 2010, a participant may elect to have all or a portion of the compensation deferred at the participant’s election, together with the related matching credits, (to the extent vested), distributed prior to termination of employment. The participant must specify the amount and date of distribution at the time he or she elects to defer the compensation, and the distribution date must be at least two years after the deferral election is made.
Pursuant to Mr. Buran’s employment agreement, the Company annually credited $50,000 to a bookkeeping account as a supplemental retirement benefit (“SERP”) from 2006-2015. Amounts credited to Mr. Buran’s SERP account may be invested in the same funds available under the SSIP, which funds are listed above. Mr. Buran’s SERP is discussed in further detail under the heading “Potential Payments Upon Termination or Change of Control” on page 38.46.
44
The following table provides information regarding contributions, earnings and account balances under the SSIP and the SERP. An executive’s right to receive benefits under these arrangements is no greater than the right of an unsecured general creditor of the Bank or the Company.
Nonqualified Deferred Compensation Table
Name | Executive Contributions in Last Fiscal Year(1) ($) | Registrant Contribution in Last Fiscal Year(2) ($) | Aggregate Earnings (Loss) in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions in Last Fiscal Year(3) ($) | Aggregate Balance at Last Fiscal Year End(4) ($) | Executive Contributions in Last Fiscal Year(1) ($) | Registrant Contribution in Last Fiscal Year(2) ($) | Aggregate Earnings (Loss) in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions in Last Fiscal Year(3) ($) | Aggregate Balance at Last Fiscal Year End(4) ($) | ||||||||||||||||||||||||||||||
John R. Buran | 189,900 | 97,226 | 668,251 | (5) | 209,275 | 4,657,245 | (6) | 189,900 | 142,272 | (928,499 | )(5) | 361,424 | 5,067,369 | (6) | ||||||||||||||||||||||||||
Susan K. Cullen | 50,531 | 32,107 | 54,334 | — | 328,265 | 55,975 | 45,471 | (230,071 | ) | — | 642,882 | |||||||||||||||||||||||||||||
Maria A. Grasso | 64,503 | 41,772 | 112,914 | 94,307 | 870,535 | 65,046 | 57,360 | (192,018 | ) | 141,860 | 959,256 | |||||||||||||||||||||||||||||
Francis W. Korzekwinski | 94,192 | 34,459 | 72,933 | — | 1,471,936 | |||||||||||||||||||||||||||||||||||
Francis W.Korzekwinski | 119,192 | 46,925 | (87,843 | ) | 73,813 | 1,973,191 | ||||||||||||||||||||||||||||||||||
Michael Bingold | 30,717 | 18,170 | 54,846 | — | 313,273 | 43,937 | 35,008 | (120,029 | ) | — | 566,872 |
(1) | Reflects amounts deferred into the SSIP. These amounts are also included in the “Salary” column in the Summary Compensation Table on page |
(2) | Reflects Bank credits under the SSIP, including amounts credited in |
(3) | Reflectsin-service withdrawals of amounts deferred by participant and related matching contributions. |
(4) | Consists of account balance at December 31, |
(5) | Reflects unrealized |
(6) | Reflects |
Potential Payments Upon Termination or Change of Control
The following table summarizes the potential payments and benefits that each of the named executive officers would be entitled to receive upon termination of employment under various circumstances and upon a change of control of the Company or the Bank. In each case, the table assumes the executive’s termination, or the change of control occurred on December 31, 2019.2022. The table does not include payments the executive would be entitled to receive in the absence of one of these specified events, such as, amounts payable under the Bank’s Retirement Plan (shown in the Pension Benefits Table) and amounts payable under the SSIP (shown in the Nonqualified Deferred Compensation Table) that were vested prior to the event. The table below also does not include benefits provided on anon-discriminatory basis to salaried employees generally, including accrued vacation,paid time off, and amounts payable undertax-qualified plans.
Potential Payments Upon Termination of Employment
Cash Severance Payment | SSIP or SERP Account(1) | Continuation of Medical/ Welfare Benefits(2) | Accelerated Vesting of Equity Awards(3) | Excise Tax Gross-Up | Employee Benefit Trust(4) | Bank Owned Life Insurance (BOLI)(5) | Total Termination Benefits | |||||||||||||||||||||||||
John R. Buran | ||||||||||||||||||||||||||||||||
Voluntary Resignation Without Good Reason or Termination for Cause | — | $ | 1,138,426 | — | — | — | — | — | $ | 1,138,426 | ||||||||||||||||||||||
Retirement | — | $ | 1,138,426 | $ 95,587 | $ | 1,447,870 | — | — | — | $ | 2,681,883 | |||||||||||||||||||||
Death(6) | — | $ | 1,138,426 | — | $ | 1,447,870 | — | — | $ | 2,110,000 | $ | 4,696,296 | ||||||||||||||||||||
Disability(6) | $ | 2,120,044 | $ | 1,138,426 | — | $ | 1,447,870 | — | — | — | $ | 4,706,340 | ||||||||||||||||||||
Voluntary Resignation for Good Reason or Termination Without Cause(7) | $ | 5,408,212 | $ | 1,138,426 | $ 95,587 | — | — | — | — | $ | 6,642,225 | |||||||||||||||||||||
Change of Control(8) | $ | 5,421,710 | $ | 1,138,426 | $ 95,587 | $ | 1,447,870 | — | $65,457 | — | $ | 8,169,050 | ||||||||||||||||||||
Susan K. Cullen | ||||||||||||||||||||||||||||||||
Voluntary Resignation Without Good Reason or Termination for Cause | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Retirement | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Death(6) | — | $ | 24,985 | — | $ | 598,381 | — | — | $ | 897,600 | $ | 1,520,966 | ||||||||||||||||||||
Disability(6) | $ | 632,593 | $ | 24,985 | — | $ | 598,381 | — | — | — | $ | 1,255,959 | ||||||||||||||||||||
Voluntary Resignation for Good Reason or Termination Without Cause(7) | $ | 1,387,234 | — | $254,635 | — | — | — | — | $ | 1,641,869 | ||||||||||||||||||||||
Change of Control(8) | $ | 1,388,821 | $ | 24,985 | $254,635 | $ | 598,381 | — | $19,638 | — | $ | 2,286,460 | ||||||||||||||||||||
Maria A. Grasso | ||||||||||||||||||||||||||||||||
Voluntary Resignation Without Good Reason or Termination for Cause | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Retirement | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Death(6) | — | — | — | $ | 755,810 | — | — | $ | 1,084,090 | $ | 1,839,900 | |||||||||||||||||||||
Disability(6) | $ | 764,024 | — | — | $ | 755,810 | — | — | — | $ | 1,519,834 | |||||||||||||||||||||
Voluntary Resignation for Good Reason or Termination Without Cause(7) | $ | 1,766,807 | — | $314,478 | — | — | — | — | $ | 2,081,285 | ||||||||||||||||||||||
Change of Control(8) | $ | 1,772,354 | — | $314,478 | $ | 755,810 | — | $31,012 | — | $ | 2,873,654 | |||||||||||||||||||||
Francis W. Korzekwinski | ||||||||||||||||||||||||||||||||
Voluntary Resignation Without Good Reason or Termination for Cause | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Retirement | — | — | $260,170 | $ | 705,134 | — | — | — | $ | 965,304 | ||||||||||||||||||||||
Death(6) | — | — | — | $ | 705,134 | — | — | $ | 941,916 | $ | 1,647,050 | |||||||||||||||||||||
Disability(6) | $ | 663,824 | — | — | $ | 705,134 | — | — | — | $ | 1,368,958 | |||||||||||||||||||||
Voluntary Resignation for Good Reason or Termination Without Cause(7) | $ | 1,535,094 | — | $260,170 | — | — | — | — | $ | 1,795,264 | ||||||||||||||||||||||
Change of Control(8) | $ | 1,539,914 | — | $260,170 | $ | 705,134 | — | $27,041 | — | $ | 2,532,259 |
Cash Severance Payment | SERP Account(1) | Continuation of Medical/ Welfare Benefits(2) | Accelerated Vesting of Equity Awards(3) | Excise Tax Gross-Up | Employee Benefit Trust(4) | Bank Owned Life Insurance (BOLI)(5) | Total Termination Benefits | |||||||||||||||||||||||||
John R. Buran | ||||||||||||||||||||||||||||||||
Voluntary Resignation Without Good Reason or Termination for Cause | — | $ | 1,199,248 | — | — | — | — | — | $ | 1,199,248 | ||||||||||||||||||||||
Retirement | — | $ | 1,199,248 | $120,092 | $ | 1,218,362 | — | — | — | $ | 2,537,702 | |||||||||||||||||||||
Death(6) | — | $ | 1,199,248 | — | $ | 1,218,362 | — | — | $ | 2,110,000 | $ | 4,527,610 | ||||||||||||||||||||
Disability(6) | $ | 2,120,044 | $ | 1,199,248 | — | $ | 1,218,362 | — | — | — | $ | 4,537,654 | ||||||||||||||||||||
Voluntary Resignation for Good Reason or Termination Without Cause(7) | $ | 5,669,035 | $ | 1,199,248 | $120,092 | — | — | — | — | $ | 6,988,375 | |||||||||||||||||||||
Change of Control(8) | $ | 5,802,500 | $ | 1,199,248 | $120,092 | $ | 1,218,362 | — | — | — | $ | 8,340,202 | ||||||||||||||||||||
Susan K. Cullen | ||||||||||||||||||||||||||||||||
Voluntary Resignation Without Good Reason or Termination for Cause | — | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||
Retirement | — | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||
Death(6) | — | — | — | $ | 601,633 | — | — | $ | 933,600 | $ | 1,535,233 | |||||||||||||||||||||
Disability(6) | $ | 657,964 | — | — | $ | 601,633 | — | — | — | $ | 1,259,597 | |||||||||||||||||||||
Voluntary Resignation for Good Reason or Termination Without Cause(7) | $ | 1,490,017 | — | $211,279 | — | — | — | — | $ | 1,701,296 | ||||||||||||||||||||||
Change of Control(8) | $ | 1,528,260 | — | $211,279 | $ | 601,633 | — | — | — | $ | 2,341,172 | |||||||||||||||||||||
Maria A. Grasso | ||||||||||||||||||||||||||||||||
Voluntary Resignation Without Good Reason or Termination for Cause | — | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||
Retirement | — | — | $218,735 | $ | 654,366 | — | — | — | $ | 873,101 | ||||||||||||||||||||||
Death(6) | — | — | — | $ | 654,366 | — | — | $ | 1,084,090 | $ | 1,738,456 | |||||||||||||||||||||
Disability(6) | $ | 764,024 | — | — | $ | 654,366 | — | — | — | $ | 1,418,390 | |||||||||||||||||||||
Voluntary Resignation for Good Reason or Termination Without Cause(7) | $ | 1,842,300 | — | $218,735 | — | — | — | — | $ | 2,061,035 | ||||||||||||||||||||||
Change of Control(8) | $ | 1,897,159 | — | $218,735 | $ | 654,366 | — | — | — | $ | 2,770,260 | |||||||||||||||||||||
Francis W. Korzekwinski | ||||||||||||||||||||||||||||||||
Voluntary Resignation Without Good Reason or Termination for Cause | — | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||
Retirement | — | — | $162,014 | $ | 805,809 | — | — | — | $ | 967,823 | ||||||||||||||||||||||
Death(6) | — | — | — | $ | 805,809 | — | — | $ | 941,914 | $ | 1,747,723 | |||||||||||||||||||||
Disability(6) | $ | 663,824 | — | — | $ | 805,809 | — | — | — | $ | 1,469,633 | |||||||||||||||||||||
Voluntary Resignation for Good Reason or Termination Without Cause(7) | $ | 1,600,089 | — | $162,014 | — | — | — | — | $ | 1,762,103 | ||||||||||||||||||||||
Change of Control(8) | $ | 1,648,353 | — | $162,014 | $ | 805,809 | — | — | — | $ | 2,616,176 |
Cash Severance Payment | SSIP or SERP Account(1) | Continuation of Medical/ Welfare Benefits(2) | Accelerated Vesting of Equity Awards(3) | Excise Tax Gross-Up | Employee Benefit Trust(4) | Bank Owned Life Insurance (BOLI)(5) | Total Termination Benefits | Cash Severance Payment | SERP Account(1) | Continuation of Medical/ Welfare Benefits(2) | Accelerated Vesting of Equity Awards(3) | Excise Tax Gross-Up | Employee Benefit Trust(4) | Bank Owned Life Insurance (BOLI)(5) | Total Termination Benefits | |||||||||||||||||||||||||||||||||||||||||||||||||
Michael Bingold | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Voluntary Resignation Without Good Reason or Termination for Cause | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||
Retirement | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||
Death(6) | — | — | — | $ | 288,494 | — | — | $ | 740,000 | $ | 1,028,494 | — | — | — | $ | 682,587 | — | — | $ | 800,000 | $ | 1,482,587 | ||||||||||||||||||||||||||||||||||||||||||
Disability(6) | $ | 743,523 | — | — | $ | 288,494 | — | — | — | $ | 1,032,017 | $ | 563,808 | — | — | $ | 682,587 | — | — | — | $ | 1,246,395 | ||||||||||||||||||||||||||||||||||||||||||
Voluntary Resignation for Good Reason or Termination Without Cause(7) | $ | 1,080,783 | — | $ | 339,847 | — | — | — | — | $ | 1,420,630 | $ | 1,264,928 | — | $ | 237,049 | — | — | — | — | $ | 1,501,977 | ||||||||||||||||||||||||||||||||||||||||||
Change of Control(8) | $ | 1,050,412 | — | $ | 339,847 | $ | 288,494 | — | $ | 16,193 | — | $ | 1,694,946 | $ | 1,290,140 | — | $ | 237,049 | $ | 682,587 | — | — | — | $ | 2,209,776 |
(1) | Mr. Buran is the only executive officer of the Company and the Bank who was entitled to receive a SERP benefit. The terms of the SERP are described below. |
(2) | Reflects present value of such benefits using a |
(3) | Reflects the value of restricted stock units and performance restricted stock units at target whose vesting is accelerated on the termination of employment or change of control, in each case based on the closing price of the Company’s common stock on December 31, |
(4) | See description under “Change of Control Arrangements” following this table. |
(5) | Death benefit under the BOLI policy is equal to two times the named executive officer’s base salary if the executive dies while employed by the Bank. With the exception of Ms. Cullen and Mr. Bingold, if death occurs after retirement the death benefit reduces to one time the base salary plus $50,000. If death occurs after termination of employment from the Bank with five years of service, the death benefit reduces to one time the base salary. For Ms. Cullen and Mr. Bingold if death occurs after retirement |
(6) | In the event of termination of employment on account of death or disability prior to a change of control, the Compensation Committee may, in its sole discretion, award the executive officer a bonus for the year of termination, in an amount determined by the Compensation Committee either at the time of termination of employment or at the time bonuses to active employees are awarded, in which case the Company would pay such bonus to the executive officer or, in the event of death, to his or her designated beneficiaries or estate, as the case may be. In the event of the executive officer’s termination of employment on account of death or disability after a change of control, the Company would pay the executive officer or, in the event of death, his or her designated beneficiaries or estate, as the case may be, a pro rata portion of the bonus for the year of termination, determined by multiplying the amount of the bonus earned by the executive officer for the preceding calendar year by the number of full months of employment during the year of termination, and then dividing by 12. The table does not include these amounts. |
(7) | If termination occurs prior to a change of control, the executive’s Cash Severance Payment will include a pro rata portion of the bonus payable for the year in which the termination occurred (to the extent the performance goals for the year were satisfied). |
(8) | If termination follows a change of control, the executive’s Cash Severance Payment will include a pro rata portion of his or her bonus payable for the year in which termination occurred (based on the amount of bonus earned in the prior year). |
The Company and the Bank were parties to employment agreements during 20192022 with Messrs. Buran, Korzekwinski and Bingold and Mses. Cullen and Grasso, (collectively, the “Employment Agreements”). The Employment Agreements provide for termination of the executive’s employment by the Bank or the Company with or without cause at any time. The executive would be entitled to a lump sum severance payment and certain health and welfare benefits upon the occurrence of certain events: (1) the Company’s or the Bank’s termination of the executive’s employment for reasons other than for cause, (2) the executive’s resignation during the60-day period commencing six months following a change of control (as defined below) with the exception of Ms. Cullen and Mr. Bingold whose agreements do not cover this event, or (3) the executive’s resignation from the Bank and the Company following an event which constitutes “good reason.” Good reason is defined as:
failure tore-elect the executive to his or her current offices;
• | failure to re-elect the executive to his or her current offices; |
a material adverse change in the executive’s functions, duties or responsibilities;
relocation of the executive’s place of employment outside of Queens and/or Nassau Counties (unless such location has been agreed to by the executive);
47
failure to renew the Employment Agreement by the Bank or Company;
a material breach of the Employment Agreement by the Bank or the Company; or
failure of a successor company to assume the Employment Agreement.
The lump sum severance payment under the Employment Agreements would be equal to the salary payments and bonuses (based on the highest bonus received under the bonus plan in the last three years preceding termination, with the exception of Ms. Cullen and Mr. Bingold whose bonus is based on the average bonus, if any, for the three most recent calendar years ended prior to the date of termination, or total calendar years of employment prior to the date of termination if fewer than three years) otherwise payable if the executive’s employment had continued for an additional 24 months (36 months in the case of Mr. Buran). In addition, the executive will receive a pro rata portion of his or her bonus payable for the year of termination (which, in the case of termination after a change of control, is based on the amount of bonus receivedearned under the bonus plan in the prior year). Each named executive officer’s Employment Agreement, with the exception of Ms. Cullen and Mr. Bingold, with the Company provides that if the executive receives payments that would be subject to the excise tax on excess parachute payments imposed by Section 4999 of the Internal Revenue Code, the executive will be entitled to receive an additional payment, or“gross-up,” in an amount necessary to put the executive in the sameafter-tax position as if such excise tax had not been imposed.
The Employment Agreements entitle the executives to receive continued health and welfare benefits (including group life, disability, medical and dental benefits) for 24 months (36 months in the case of Mr. Buran) equivalent to those provided to active employees during such period, including dependent coverage. In addition, if the executive is age 55 or older at the end of such period, the executive and his or her spouse are entitled to lifetime coverage under the Bank’s retiree medical program at the level and cost-sharing percentage in effect at the time of the executive’s termination of employment.
In the event an executive terminates employment due to “disability,” which is defined generally to mean the inability of the executive to perform his or her duties for 270 consecutive days due to incapacity, each Employment Agreement provides that the executive would receive 100% of his or her salary for the first six months, 75% for the next six months and 60% for the remainder of the term of the Employment Agreement (less any benefits payable to the executive under any disability insurance coverage maintained by the Company or the Bank). The Employment Agreements have approximately atwo-year term (approximately three years in the case of Mr. Buran). Mr. Bingold’s initial term is approximately three years as of December 31, 2019 due to the timing of Mr. Bingold commencing his employment agreement in December 2019. These payments are shown in the Cash Severance Payment column of the above table.
In the event of an executive’s termination due to death or disability prior to a change of control, the Compensation Committee has discretion to determine whether a bonus will be paid for the year of termination. If such termination occurs after a change of control, the executive is entitled to a pro rata bonus for the year of termination based on the amount of bonus received in the prior year.
Under Mr. Buran’s Employment Agreement, the Company credited $50,000 during each of the years 2006 through 2015 to a bookkeeping account maintained by the Company and the Bank (the “SERP Account”) for the purpose of providing supplemental retirement benefits. Amounts credited to the SERP Account are invested as directed by Mr. Buran in certain funds made available by the Bank with Mr. Buran’s consent. Upon Mr. Buran’s termination of employment with the Company or the Bank by reason of his death, or upon his voluntary resignation without “good reason,” or upon his termination for “cause” (which means (1) willful failure to perform his duties under the Employment Agreement and failure to cure such failure within sixty days following written notice thereof from the Company or the Bank, or (2) intentional engagement in dishonest conduct in connection with his performance of services for the Company or the Bank, or (3) conviction of a felony), the amount then credited to the SERP Account will be promptly paid to him (or in the case of his death, to his designated beneficiaries or his estate) in a cash lump sum. However, upon Mr. Buran’s termination of employment with the Company or the Bank by reason of his retirement, disability, voluntary resignation within
one year following an event that constitutes “good reason” or discharge without “cause,” or for any reason
48
following a “change of control” (as defined below), the Company or the Bank will pay him a cash lump sum equal to (1) $500,000, without regard to the amount then credited to his SERP Account, or (2) the amount then credited to his SERP Account if such amount is greater than $500,000. Since the amount credited to the SERP account currently exceeds $500,000, the amount credited to the SERP Account will be paid to Mr. Buran upon any termination of his employment.
The Employment Agreements provide that in the event the executive’s employment terminates due to death, the executive’s beneficiaries (or estate) would receive a lump sum payment of the executive’s earned but unpaid salary, plus, in the case of Mr. Buran, payment of his SERP benefits described above.
In the event an executive terminates employment for reasons not described above or the executive’s employment is terminated for cause, the executive is entitled to receive only his or her earned but unpaid salary and any benefits payable under the terms of the Company’s and the Bank’s benefit plans.
All outstanding equity awards will become fully vested upon termination of employment due to death, disability, or retirement, with performance restricted stock units vesting at target (other than in the case of retirement, in which case they vest based on actual achievement of the performance goals at the end of the performance period). For these purposes, disability generally means the inability to perform the essential functions of employment due to disability or incapacity for 270 consecutive days, and retirement generally means termination of employment either (i) after attainment of age 65 with five years of service, or (ii) when termination is preceded by at least five years of continuous service and the sum of age plus years of service equals or exceeds 75 years. The treatment of equity awards upon a change of control is discussed below.
Change of Control Arrangements
Upon a change of control (as defined below), in addition to the provisions of the Employment Agreements described above, (1) all outstanding restricted stock/units and performance restricted stock units held by then-current employees will immediately vest (with performance restricted stock units vesting at target to the extent the change in control occurs prior to the end of the performance period, and at actual achievement of the performance goals to the extent the change of control occurs after the end of the performance period); (2) all outstanding stock options held by then-current employees will become immediately exercisable;exercisable (as of December 31, 2022 there were no outstanding stock options); and (3) the Employee Benefit Trust which was established by the Company to satisfy its obligations under certain employee benefit plans will terminate and any trust assets remaining after certain benefit plan contributions will be distributed to all full-time employees of the Company or one of its subsidiaries with at least one year of service, in proportion to their compensation over the four most recently completed calendar years plus the portion of the current year prior to the termination of the Employee Benefit Trust. In February of 2022 the remaining assets in the Employee Benefit Trust were used to satisfy benefit plan obligations in the Flushing Bank 401(k), subsequently the Employee Benefit Trust was terminated.
A “change of control” is generally defined, for purposes of the Employment Agreements and benefit plans maintained by the Company or the Bank, to mean:
the acquisition of all or substantially all of the assets of the Bank or the Company;
the occurrence of any event if, immediately following such event, a majority of the members of the board of directors of the Bank or the Company or of any successor corporation shall consist of persons other than Current Members (defined as any member of the Board of Directors as of the completion of the Company’s initial public offering and any successor of a Current Member whose nomination or election has been approved by a majority of the Current Members then on the Board of Directors);
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the acquisition of beneficial ownership of 25% or more of the total combined voting power of all classes of stock of the Bank or the Company by any person or group; or
consummation of (and, in some cases, approval by the stockholdersshareholders of the Bank or the Company of an agreement providing for) the merger or consolidation of the Bank or the Company with another corporation where the stockholdersshareholders of the Bank or the Company, immediately prior to the merger or consolidation, would not beneficially own, directly or indirectly, immediately after the merger or consolidation, shares entitling such stockholdersshareholders to 50% or more of the total combined voting power of all classes of stock of the surviving corporation.
Risk Assessment ofNon-Executive Compensation Plans
In 2019,2022, we continued to enhanceenhanced our risk assessment processes to comply with the Treasury Department requirement that all incentive plans be reviewed to ensure they do not motivate unnecessary and excessive risk that threatens the value of the Company. The Company is regulated by the Federal Reserve and the Bank, which is a New York State chartered commercial bank is regulated by the New York Department of Financial Services and the Federal Deposit Insurance Corporation. We have always adhered to a conservative and balanced approach to risk. Our management and Board conduct regular reviews of our business to ensure we remain within appropriate regulatory guidelines and appropriate practice.
In connection with the foregoing, we conducted a thorough review of our compensation plans throughout our operations. In addition to the plans for our senior executive officers (discussed in the Compensation Discussion and Analysis) we reviewed our:
bank goal and incentive programs for lending officers in both the commercial and residential and mixed use areas;
retail banking incentive programs; and
business banking incentive plans.
In this review we assessed the relevant features of the particular plans and programs, including metrics, targets and award amounts, including among other things:
whether the participant has access to or influences in any material respect the financial accounting or reporting of transactions;
whether and to what extent the participant’s transactions may be material to the Company;
what risks the business of the participant faces;
what risk factors of the Company are exposed to a particular business unit of the participant;
whether the incentive is designed reasonably to achieve the intended goals;
whether the incentive in the past has resulted in excessive risk to the Company;
whether incentive pay is high in comparison with base compensation;
whether adjustments may be made based on quality as well as quantity of performance; and
whether a plan is subject to controls on award determinations.
Both programs for mortgage loan officers have performance targets and potential award amounts set by senior management. Payment of awards is subject to reduction below the amount earned under the plan formula
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for unethical conduct or if management believes reduction is appropriate for other performance-related reasons. The potential risk of having an incentive award tied to loan origination volume is mitigated by the Company’s requirement that all loan originations, including the borrowers and the terms, be approved by the Company’s
Bank’s Loan Committee (and, for loans above specified amounts, the Loan Committee of the Board). In addition, the employee’s bonus in any year is generally reduced to reflect delinquent loans made by the employee in the prior three years. Both the Retail and Business Banking incentive programs reward employees for various metrics of performance, which may include individual sales efforts as well as teamwork. Awards under these programs in the aggregate are not material to the Company. In addition, all of the employee compensation plans are subject to controls which mitigate the risks inherent in these plans. These controls include our accounting processes, internal and external audit functions,function, and processes surrounding internal control over financial reporting and disclosure controls.
In accordance with The Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC requires disclosure of the CEO to the median employee pay ratio. For our 2019 proxy statement, we identified our median employee by examining 2018 Box1 W-2 compensation, excluding our CEO, who were employed by us on December 31, 2018 whether on a full-time or part-time basis. We annualized the compensation for any full-time or part time employees that were not employed by us for all of 2018. For purposes of this proxy statement, we used the same median employee identified for the 20182021 proxy statement and calculated the annual total compensation for such employee using the same methodology we use for our CEO and other named executive officers as set forth in the 2019 Summary Compensation Table on page 32.38.
The Company believes that there has been no changes that would significantly affect the pay ratio calculation as there has been no material change in our workforce population or compensation programs in 2019.2022.
The annual total compensation for fiscal year 20192022 for our CEO was $2,208,102$2,362,489 as noted in the 20192022 Summary Compensation Table and for our median employee it was $106,454.$76,043. The resulting ratio of our CEO’s pay to the pay of our median employee for fiscal year 20192022 was 2131 to 1.
Year | Summary Compensation Table Total for PEO 1 | Compensation Actually Paid to PEO 2 | Average Summary Compensation Table Total for Non-PEO NEOs 3 | Average Compensation Actually Paid to Non-PEO NEOs 4 | Value of Initial Fixed $100 Investment Based On: | Net Income (thousands) 7 | Core Operating Earnings per Diluted Common Share 8 | |||||||||||||||||||||||||
Total Shareholder Return 5 | Peer Group Total Shareholder Return 6 | |||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||||||||||||||||||||||||
2022 | $ | 2,362,489 | $ | 2,041,226 | $ | 1,037,387 | $ | 877,141 | $ | 103 | $ | 96 | $ | 76,945 | $ | 2.49 | ||||||||||||||||
2021 | $ | 2,534,260 | $ | 3,186,480 | $ | 1,051,924 | $ | 1,395,980 | $ | 124 | $ | 114 | $ | 81,793 | $ | 2.81 | ||||||||||||||||
2020 | $ | 2,169,715 | $ | 1,834,306 | $ | 951,211 | $ | 778,408 | $ | 82 | $ | 90 | $ | 34,674 | $ | 1.70 |
1 | The dollar amounts reported in column (b) are the amounts of total compensation reported for John R. Buran (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation — Summary Compensation Table” on page 38. |
2 | The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Buran, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Buran during the applicable year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to Mr. Buran’s total compensation for each year to determine the compensation actually paid: |
Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards (i) | Equity Award Adjustments (ii) | Reported Change in the Actuarial Present Value of Pension Benefits (iii) | Pension Benefit Adjustments (iv) | Compensation Actually Paid to PEO | ||||||||||||||||||
2022 | $ | 2,362,489 | ($ | 590,085 | ) | $ | 268,822 | — | — | $ | 2,041,226 | |||||||||||||
2021 | $ | 2,534,260 | ($ | 507,650 | ) | $ | 1,209,597 | ($ | 49,727 | ) | — | $ | 3,186,480 | |||||||||||
2020 | $ | 2,169,715 | ($ | 465,065 | ) | $ | 136,469 | ($ | 6,813 | ) | — | $ | 1,834,306 |
(i) | The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. |
(ii) | The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option |
awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
Year | Year End Fair Value of Equity Awards | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | |||||||||||||||||||||
2022 | $ | 458,015 | ($ | 271,353 | ) | — | $ | 3,102 | — | $ | 79,058 | $ | 268,822 | |||||||||||||||
2021 | $ | 674,025 | $ | 463,652 | — | $ | 35,044 | — | $ | 36,876 | $ | 1,209,597 | ||||||||||||||||
2020 | $ | 386,575 | ($ | 260,706 | ) | — | ($ | 27,830 | ) | — | $ | 38,430 | $ | 136,469 |
(iii) | The amounts included in this column are the amounts reported in “Change in Pension and Nonqualified Deferred Compensation” column of the Summary Compensation Table for each applicable year. |
(iv) | There is no pension service cost or prior pension service cost in any applicable year. |
3 | The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Buran, who has served as our CEO since 2005) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Buran) included for purposes of calculating the average amounts in each applicable year (2020-2022) are the same and as follows: Susan K. Cullen, Maria A. Grasso, Francis W. Korzekwinski and Michael Bingold. |
4 | The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Buran), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Buran) during the applicable year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Buran) for each year to determine the compensation actually paid, using the same methodology described above in Note 2: |
Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Value of Equity Awards | Average Equity Award Adjustments (i) | Average Reported Change in the Actuarial Present Value of Pension Benefits | Average Pension Benefit Adjustments (iii) | Average Compensation Actually Paid to Non-PEO NEOs | ||||||||||||||||||
2022 | $ | 1,037,387 | ($ | 296,297 | ) | $ | 136,051 | — | — | $ | 877,141 | |||||||||||||
2021 | $ | 1,051,924 | ($ | 259,363 | ) | $ | 598,201 | $ | 5,218 | (ii) | — | $ | 1,395,980 | |||||||||||
2020 | $ | 951,211 | ($ | 233,522 | ) | $ | 83,617 | ($ | 22,898 | ) | — | $ | 778,408 |
Year | Average Year End Fair Value of Equity Awards | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Average Equity Award Adjustments | |||||||||||||||||||||
2022 | $ | 229,982 | ($ | 131,882 | ) | — | $ | 2,200 | — | $ | 35,751 | $ | 136,051 | |||||||||||||||
2021 | $ | 344,366 | $ | 221,338 | — | $ | 14,794 | — | $ | 17,703 | $ | 598,201 | ||||||||||||||||
2020 | $ | 194,110 | ($ | 116,674 | ) | — | $ | (10,748 | ) | — | $ | 16,929 | $ | 83,617 |
(ii) | For 2021, the positive adjustment of $5,218 reflects the average of the amount that results from reversing the compensation (including both positive and negative amounts) reported in the “Change in Pension Value and Nonqualified Deferred Compensation” column of the Summary Compensation Table for 2021. |
(iii) | There is no pension service cost or prior pension service cost in any applicable year. |
5 | Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
6 | The peer group used for this purpose is the following published weighted industry index: S&P U.S. BMI Banks – Mid-Atlantic Region Index. |
7 | The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. |
8 | While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that Core Operating Earnings per Diluted Common Share is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to Company performance. Core Operating Earnings per Diluted Common Share excludes the effects of the net gains or losses from the sale of securities, net gains or losses from fair value adjustments, and net gains or losses from the disposition of assets, net amortization of purchase accounting adjustments, and merger expenses. |
ADVISORY APPROVAL OF EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted in 2010, requires that we include in this proxy statement an advisory stockholdershareholder vote on the compensation of the Company’s named executive officers as described in this proxy statement. Because the vote is advisory, it is not binding on us, and neither the Board of Directors nor the Compensation Committee will be required to take any action as a result of the outcome of the vote. However, our Board of Directors, our Compensation Committee, and management value the opinions expressed by our stockholdersshareholders and will consider the outcome of the vote when making future decisions regarding the compensation of our named executive officers.
At our 20192022 Annual Meeting, approximately 67%94% of the votes cast on thesay-on-pay proposal were in favor of our named executive officers’ compensation. As a resultThe voting results were consistent with the 2021 Say-On-Pay results of the voting, the93%. The Company has taken actionacted over the past year to once again engage our shareholders to better understand their views and make enhancements, if necessary, to our compensation programs, as outlined in the Compensation Discussion & Analysis section of this proxy statement, which include:
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Compensation Philosophy—We target a competitive range built around the median for each named executive officer, taking into consideration experience, role, contributions, and criticality. Ultimate pay outcomes, such as earned bonuses and the value of equity grants when they are realized by participants will be highly dependent on Company and individual performance.
Base Salary—the The benchmarking analysesanalysis prepared by our independent compensation consultant Pearl Meyer used to set 2019 (and 2020) pay levels,for 2022 indicated that the base salary of somethe President & CEO, Senior Executive Vice President/Chief Operating Officer, and the Senior Executive Vice President/Chief Real Estate Lending Officer were generally aligned within a competitive range of the market. The analysis also showed that the base salary of Ms. Cullen, the Company’s named executive officers wereSenior Executive Vice President/Treasurer and Chief Financial Officer was below the median and that the base salary of Mr. Bingold, the Senior Executive Vice President/Chief Retail and Client Development Officer was slightly above the median. Accordingly, the Compensation Committee did not awardresolved to increase Ms. Cullen’s and Mr. Bingold’s base salary increases for the fiscal year 2019salaries, effective as of January 1, 2022, by approximately 4% and 20208%, respectively, to the following named executive officers—President & CEO, Chief Operating Officer, and the Chief of Real Estate Lending. Other named executive officer salaries received standard merit increases for 2019 because they were positioned at or below the median ofbetter align their respective roles in the market. Additionally, in 2020 the Compensation Committee did not award a base salary increase to the Chief Financial Officer as her base salary was above the median.total compensation versus our peers.
Performance Based Equity—For 2022, the Compensation Committee implementedagain granted target long-term annual incentive awards using a performance vesting equity component to the annual long term incentive grant in 2019 as we seek to further align the named executive officer’s compensation with that50%/50% mix of the long term interests of our shareholders. Specifically, performance based restricted stock units comprised 50%and time-based restricted stock units to each of the each named executive officer’s long term incentive compensation mix vestingNEOs. Performance based restricted stock unit awards vest at the end of a three-year performance period (subject to achievement of performance goals). By focusing on performance-based pay opportunities tied to specific performance goals, the Compensation Committee seeks to ensure the named executive officer’s pay is properly aligned with Company performance and the value provided to our shareholders. The Compensation Committee again awarded performance based restricted stock units in 2020.
The Compensation Committee will continue to consider the outcome of the Company’ssay-on-pay votes when making future compensation decisions for the named executive officers. In response to the voting results for the frequency of thesay-on-pay vote we are continuing to provide our stockholders with the opportunity to annually provide an advisorysay-on-pay vote.
The Compensation Committee has overseen the development of our compensation program that is described in the Compensation Discussion and Analysis section of this proxy statement and in the tables and narrative in the Executive Compensation section of this proxy statement. The Compensation Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of specific strategic goals of the Company, and that the Company’s executive compensation program has succeeded in
aligning executive pay with Company performance. In addition, our program aligns executives’ interests with those of the stockholdersshareholders by imposing five-year time based vesting on restricted stock unit awards and long-term stock retention requirements, with the ultimate objective of improving stockholdershareholder value. Beginning inSince 2019, performance based restricted stock units werehave also been granted as a new component of the long term incentive compensation mix, vesting at the end of the three-year performance period (subject to achievement of performance goals) in an effort to better align the Company’s current long-term incentive approach with its compensation philosophy and objectives. The program is also designed to attract and to retain highly talented executives who are critical to the successful implementation of the Company’s strategic business plan.
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Our Board of Directors believes that our enhanced executive compensation program is well-designed, appropriately aligns executive pay with Company performance, and incentivizes desirable executive performance. Therefore, the Board recommends that shareholders vote in favor of the following resolution:
RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the Company’s named executive officers as described in this proxy statement, including the Compensation Discussion and Analysis, the compensation tables, and the accompanying narrative disclosure.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION.
ADVISORY VOTE ON THE FREQUENCY OF STOCKHOLDER ADVISORY VOTES
ON EXECUTIVE COMPENSATION
The Dodd-Frank Act and related regulations require that at least once every six years we provide our stockholders with an opportunity to vote, on an advisory basis as to whether future advisory votes on the compensation of the Company’s named executive officers should occur every one, two or three years.
In 2017, our stockholders voted, on a similar advisory basis, in favor of the annual submission to our stockholders of the Company’s named executive officers’ compensation, and the Board of Directors adopted this approach. The Board continues to believe that future advisory votes on executive compensation should occur annually. We believe that this frequency is the best approach for the Company for a number of reasons, including the following:
We believe that the success of our compensation programs in aligning pay with Company performance can be effectively evaluated by considering the results of our programs annually.
An annual vote on executive compensation provides shareholders with another means of communicating with our Board of Directors. Additionally, the Company’s stockholders have the opportunity to communicate with the Board on matters of concern to them, including executive compensation, under our existing policies, as discussed under “Corporate Governance—Shareholder Communications with the Board of Directors.”
Stockholders will be able to specify one of four choices for this proposal—one year, two years, three years, or abstain. Stockholders are not voting to approve or disapprove the Board’s recommendation. This advisory vote on the frequency of future advisory votes on executive compensation is not binding on the Board of Directors. The Board will consider the outcome of the vote in determining the frequency of future advisory votes on executive compensation. However, notwithstanding the outcome of the shareholder vote, the Board may in the future decide to conduct advisory votes on executive compensation on a less frequent basis and may vary its practice based on factors such as discussions with stockholders and the adoption of major changes to compensation programs.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION SHOULD OCCUR ANNUALLY.
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PROPOSAL NO. 4
RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023
The Audit Committee has selected BDO USA, LLP (“BDO USA”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023. Shareholder approval for the appointment of our independent registered public accounting firm is not required, but the Audit Committee and the Board of Directors are submitting the selection of BDO USA for ratification by the Company’s shareholders at the annual meeting. If the shareholders do not ratify the selection of BDO USA, the Audit Committee will reconsider its selection. BDO USA served as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2022. Representatives of BDO USA are expected to attend the 2023 virtual annual meeting. The representatives will have an opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
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AUDIT COMMITTEE MATTERS
The Audit Committee of the Board of Directors is comprised of four Outside Directors, each of whom is independent within the meaning of the Nasdaq independence standards and satisfies the SEC independence requirements for Audit Committee members. In accordance with its written charter adopted by the Board of Directors, the Audit Committee assists the Board of Directors in fulfilling its responsibility for oversight of the Company’s accounting, auditing and financial reporting practices. Management is responsible for the Company’s financial reporting process, including the internal control function, and for preparing the Company’s financial statements in accordance with generally accepted accounting principles and assessing the effectiveness of the Company’s internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for examining those financial statements and expressing an opinion as to the conformity of those financial statements with generally accepted accounting principles as well as expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
In discharging its oversight responsibility, the Audit Committee (1) reviewed and discussed the audited financial statements of the Company at and for the fiscal year ended December 31, 2019,2022, with management and the independent registered public accounting firm, (2) discussed with the independent registered public accounting firm the matters required to be discussed by PCAOB Auditing Standard No. 16, “Communication with Audit Committees,”the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC, (3) received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and (4) discussed with the independent registered public accounting firm its independence from the Company.
In addition, the Audit Committee monitored the Company’s progress in assessing compliance with Section 404 of the Sarbanes-Oxley Act of 2002, and reviewed management’s report on internal control over financial reporting and the independent registered public accounting firm’s opinion on the Company’s internal control over financial reporting.
Based on the reviews and discussions with management and the independent registered public accounting firm referred to above, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in its Annual Report on Form10-K for the fiscal year ended December 31, 2019,2022, for filing with the Securities and Exchange Commission.
Audit Committee Financial Expert
The Board of Directors of the Company has determined that Louis C. Grassi, the Chairman of the Audit Committee, and Caren C. Yoh, an Audit Committee member, are both considered “audit committee financial experts” as defined under SEC rules. Mr. Grassi is a Certified Public Accountant and a Certified Fraud Examiner. Ms. Yoh is a Certified Public Accountant.
Independent Registered Public Accounting Firm Fees and Services
To help ensure the independence of the independent registered public accounting firm, the Audit Committee has adopted a policy for the pre-approval of all audit and non-audit services to be performed for the Company by
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its independent registered public accounting firm. In accordance with this policy, the Audit Committee approves in advance all audit and non-audit services to be provided by the Company’s independent registered public accounting firm.
The Audit Committee reviewed all audit and non-audit services provided by BDO USA with respect to the fiscal year ended December 31, 2022, and concluded that the provision of such services was compatible with maintaining their independence in the conduct of their auditing functions. All audit and non-audit services provided by BDO USA described in the table below were pre-approved by the Audit Committee. The following table sets forth the aggregate fees billed for audit and non-audit services to the Company during the fiscal years ended December 31, 2022 and 2021, by BDO USA.
Fiscal Year Ended December 31, | ||||||||
2022 | 2021 | |||||||
Audit Fees | $ | 669,100 | $ | 595,700 | ||||
Audit-Related Fees | 67,920 | 58,900 | ||||||
All Other Fees | 180,500 | 143,240 | ||||||
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Total Fees | $ | 917,520 | $ | 797,840 |
Audit Fees are fees billed for professional services rendered in connection with the audit of the Company’s annual financial statements and internal control over financial reporting, and reviews of the Company’s quarterly financial statements.
Audit-Related Fees are fees for assurance and related services, consisting primarily of audits of, and consultation with respect to, employee benefit plans.
All Other Fees consisted of work associated with SEC registration statements.
In accordance with its charter, the Audit Committee approves in advance all audit and non-audit services to be provided by the Company’s independent registered public accounting firm. During fiscal 2022 and 2021, all audit and non-audited services provided by BDO USA were pre-approved by the Audit Committee in accordance with its charter.
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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Stock Ownership of Certain Beneficial Owners
To the knowledge of the Company, the following institutions were the beneficial owners of more than 5% of the outstanding shares of common stock of the Company as of March 3, 2023.
Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percent of Class(1) | ||||||
BlackRock, Inc.(2) | 2,531,562 | 8.58 | % | |||||
55 East 52nd Street | ||||||||
New York, New York 10055 | ||||||||
Dimensional Fund Advisors LP(3) | 2,474,176 | 8.39 | % | |||||
6300 Bee Cave Road Building One | ||||||||
Austin, Texas 78746 | ||||||||
GAMCO Investors, Inc.(4) | 1,815,950 | 6.16 | % | |||||
One Corporate Center | ||||||||
Rye, New York 10580 | ||||||||
Frontier Capital Management Co., LLC(5) | 1,628,334 | 5.52 | % | |||||
99 Summer Street | ||||||||
Boston, Massachusetts 02110 | ||||||||
The Vanguard Group (6) | 1,609,601 | 5.46 | % | |||||
100 Vanguard Boulevard | ||||||||
Malvern, Pennsylvania 19355 | ||||||||
Wellington Management Group LLP(7) | 1,497,403 | 5.08 | % | |||||
280 Congress Street | ||||||||
Boston, Massachusetts 02210 |
(1) | On March 3, 2023, the total number of outstanding shares of the Company’s common stock was 29,488,456. |
(2) | According to its Schedule 13G/A filed with the SEC on February 3, 2023, Blackrock, Inc. has sole dispositive power with regard to 2,531,562 shares of common stock and sole voting power with regard to 2,464,696 of |
(3) | According to its Schedule |
(4) |
Stock Ownership of Management The following table sets forth information regarding the beneficial ownership of the common stock of the Company as of March 3, 2023, by each director of the Company, by each named executive officer and by all current directors and executive officers as a group. 62
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