DEF 14A of Lakeland Financial Corp
Filed Feb 27, 2025 · FY20240000721994-25-000096
What happens if a director nominee is unable to stand for re-election?
What happens if a director nominee is unable to stand for re-election? The Board may, by resolution, provide for a lesser number of directors or designate a substitute nominee. In the latter case, shares represented by proxies may be voted for a substitute nominee. Proxies cannot be voted for more than 11 nominees. As of the date of this proxy statement, we have no reason to believe any nominee will be unable to stand for re-election.
Director Compensation
Director Compensation During 2024, directors who were not employees of Lakeland Financial or Lake City Bank were paid the following retainer fees:
Director Compensation
| Component | Amount | | Annual Director Retainer | $35,000 | | Annual Audit Committee Chairman Additional Retainer | 15,000 | | Annual Lead Independent Director Retainer | 15,000 | | Annual Governance Committee Chairman Additional Retainer | 10,000 | | Annual Compensation Committee Chairman Additional Retainer | 10,000 | | Annual Corporate Risk Committee Chairman Additional Retainer | 10,000 | | Annual Stock Grant (number of shares) | 1,300 |
Director Compensation
Each director of Lakeland Financial is also a director of Lake City Bank and is not compensated separately for service on Lake City Bank’s Board. Mr. Findlay, who is Chairman of the Board and also serves as our Chief Executive Officer, and Ms. Pruitt, who is a director and also serves as our President, are not paid any fees for their service as directors. The directors’ fees are reviewed annually by the Compensation Committee. Under the 2017 Equity Incentive Plan, directors may be awarded non-qualified stock options or stock grants at the discretion of the Compensation Committee, subject to an annual limitation for each director of 10,000 shares subject to stock options or stock appreciation rights and 10,000 shares subject to stock awards. In 2025, each non-employee director will receive two separate awards of 650 shares, for a total award of 1,300 shares, of Lakeland Financial stock upon approval by the Board of the first award in January and the second award in July. All final decisions regarding director compensation, whether in cash or equity, are made by the full board after receiving recommendations from the Compensation Committee. If the 2025 Equity Incentive Plan is approved by our shareholders at the annual meeting, all future equity awards to directors shall be made from the 2025 Equity Incentive Plan. Since 2011, the Board has maintained a stock ownership policy that currently requires directors hold a minimum of 5,000 shares of Lakeland Financial within five years a becoming a director. At the time the ownership requirement was set at its current level, 5,000 shares represented approximately the same value as five times the annual cash retainer for directors. This requirement will be reviewed each year by the Nominating and Corporate Governance Committee and may be adjusted to maintain a similar ratio. As of December 31, 2024, all of our non-employee directors met the requirements of our stock ownership policy. The following table provides information on 2024 compensation for non-employee directors who served during 2024.
Director Compensation
| Name (a) | Fees Earned or Paid in Cash(1) (b) | Stock Awards(2)(3) (c) | Total (d) | | A. Faraz Abbasi | $35,000 | $78,631 | $113,631 | | Blake W. Augsburger | 60,000 | 78,631 | 138,631 | | Robert E. Bartels, Jr. | 35,000 | 78,631 | 113,631 | | Darrianne P. Christian | 45,000 | 78,631 | 123,631 | | Michael L. Kubacki(4) | 11,667 | 40,970 | 52,636 | | Emily E. Pichon | 45,000 | 78,631 | 123,631 | | Steven D. Ross | 35,000 | 78,631 | 113,631 | | Brian J. Smith | 35,000 | 78,631 | 113,631 | | Bradley J. Toothaker | 50,000 | 78,631 | 128,631 | | M. Scott Welch | 35,000 | 78,631 | 113,631 |
Director Compensation
(1)We maintain the Lakeland Financial Corporation Directors Fee Deferral Plan under which non-employee directors are permitted to defer receipt of their directors fees and earn a rate of return based upon the performance of our stock. The amounts shown in this column include amounts that may have been deferred by the directors. We may, but are not required to fund the deferred fees into a trust which may hold our stock. The plan is nonqualified and the directors have no interest in the trust. The deferred fees and any earnings thereon are unsecured obligations of Lakeland Financial. No director received preferential or above-market earnings on deferred compensation. Any shares held in the trust are treated as treasury shares and may not be voted on any matter presented to shareholders. The number of shares attributable to each director under the plan is set forth in the footnotes to the Beneficial Ownership Table below. (2)Represents the grant date fair value for fully vested stock awards based on a share price of $63.03 as of January 9, 2024 and $57.94 as of July 9, 2024, in accordance with FASB ASC Topic 718 - “Compensation-Stock Compensation.” See the discussion of equity awards in Note 14 of the Notes to Consolidated Financial Statements for Lakeland Financial’s financial statements for the year ended December 31, 2024. The number of fully vested shares granted during 2024 for each non-employee director was 1,300, 650 on January 9, 2024 and 650 on July 9, 2024. (3)As of December 31, 2024, none of our non-employee directors held any outstanding stock awards or options. (4)Mr. Kubacki retired on April 9, 2024.
Director Compensation
| 2025 PROXY STATEMENT | 19 |
A. Faraz Abbasi
A. Faraz Abbasi
A. Faraz Abbasi
| Age 52 Director Since 2022 Committees Audit, Compensation (Chair) | | | | | | | | | Background •Managing Partner at Indianapolis, Indiana-based Centerfield Capital, a private equity investment firm that works closely with equity sponsors, independent sponsors, business owners and management teams who seek subordinated debt and equity financing to build companies and create value. •Responsible for overseeing the partnership and investor relations. •Member of the Partnership’s Investment Committee. •In sales and operations at Praxair, Inc. and Rodel, Inc. before joining Centerfield in 2001. Director Qualifications We consider Mr. Abbasi to be a qualified candidate for service on the Board as well as the Audit Committee and the Compensation Committee due to his experience and leadership working with investors and companies from a variety of sectors. | | | | | | | | | | | | | | | | Industry | Brand | Technology | Board | Finance | Corporate Governance & Ethics |
A. Faraz Abbasi
| 2025 PROXY STATEMENT | 25 |
Blake W. Augsburger
Blake W. Augsburger
Blake W. Augsburger
| Age 61 Director Since 2011 Committees Compensation, Nominating and Corporate Governance (Chair) | | | | | | | | Background •Founder and Chief Executive Officer of LEA Professional, which designs and manufactures audio amplifiers for the commercial, residential and professional audio markets. •Former Executive Vice President and America’s Country Manager for Harman International Industries, Inc., a Fortune 500 company that designs and manufactures audio and infotainment products and systems. •Served for ten years as the President of the Harman Professional Division, which is based in Northridge, California. Director Qualifications We consider Mr. Augsburger to be a qualified candidate for service on the Board as well as the Nominating and Corporate Governance Committee and the Compensation Committee due to his leadership skills and expertise developed as a former executive of a large, complex public company. | | | | | | | | | | | | | | Industry | Brand | Technology | Board | Corporate Governance & Ethics |
Blake W. Augsburger
Robert E. Bartels, Jr.
Blake W. Augsburger
| Age 60 Director Since 2002 Committees Audit, Nominating and Corporate Governance (Vice Chair) | | | | | | | | | Background •Partner in Incedo LLC, a family office and real estate management company managing investments and business interests. •Former President and Chief Executive Officer of Martin’s Supermarkets, Inc., a regional supermarket chain headquartered in South Bend, Indiana. Director Qualifications We consider Mr. Bartels to be a qualified candidate for service on the Board as well as the Audit Committee and the Nominating and Corporate Governance Committee due to his skills and expertise acquired as the former leader of a successful business that is prominent in many of our markets. Mr. Bartels was a third-generation family business owner with approximately 37 years of supermarket and retail experience, including 21 years of executive practice. | | | | | | | | | | | | | | | | Brand | Board | Finance | Human Capital Management | Risk Management | Corporate Governance & Ethics |
Blake W. Augsburger
| 26 | |
Darrianne P. Christian
Darrianne P. Christian
Darrianne P. Christian
| Age 53 Director Since 2018 Committees Compensation (Vice Chair), Corporate Risk (Chair) | | | | | | | Background •Currently involved with leading strategic initiatives for BCforward, a global information technology consulting and workforce fulfillment firm founded by Ms. Christian and her husband, Justin Christian, in 1998. •Former program manager and an IT consultant from 1995-2003 and former officer with the Central Intelligence Agency from 1990-1995. •Board member of Newfields (formerly the Indianapolis Museum of Art) and the Eskenazi Foundation. •Works closely with the Justin and Darrianne Christian Center for Diversity and Inclusion at DePauw University. Director Qualifications We consider Ms. Christian to be qualified to serve on the Board as well as the Compensation Committee and the Corporate Risk Committee due to her personal and professional engagement with several prominent nonprofits located in Indianapolis and her professional experience in the technology sector, which we believe will be valuable as we work to ensure that we remain innovative in providing technology-driven solutions to our clients. | | | | | | | | | | | | Technology | Board | Risk Management | Corporate Governance & Ethics |
David M. Findlay
David M. Findlay
David M. Findlay
| Age 63 Director Since 2010 Committees Corporate Risk | | | | | | | | | | Background •Presently serves as the Chairman of the Board and Chief Executive Officer of Lakeland Financial and Lake City Bank. •Served as President and Chief Executive Officer from 2014-2023, President and Chief Financial Officer from 2010-2014 and Chief Financial Officer from 2000-2010. •Served as the Chief Financial Officer of Quality Dining, Inc., then a publicly traded company with its headquarters in South Bend, Indiana, prior to joining Lakeland Financial in September 2000. •Served in various capacities with The Northern Trust Company in Chicago, Illinois prior to joining Quality Dining, Inc. Director Qualifications We consider Mr. Findlay to be qualified to serve on the Board due to his familiarity with Lakeland Financial’s operations he has acquired as its President and Chief Financial Officer, his experience in the financial services industry and his prior experience as the Chief Financial Officer of a publicly traded company. | | | | | | | | | | | | | | | | | | Industry | Brand | Board | Finance | Human Capital Management | Risk Management | Corporate Governance & Ethics |
David M. Findlay
| 2025 PROXY STATEMENT | 27 |
Emily E. Pichon
Emily E. Pichon
Emily E. Pichon
| Age 61 Director Since 2002 Committees Compensation, Nominating and Corporate Governance | | | | | | | | | | Background •Chairman of ETP Asset Holdings, Inc., formerly known as ExTech Plastics Inc. & ETP Inc., a former extruder of plastic sheet. •President of the Olive B. Cole Foundation, officer and director of the M E Raker Foundation Inc. and the Howard P. Arnold Foundation, Inc., each a private charitable foundation focused on northeast Indiana education, economic development and/or conservation based in Fort Wayne, Indiana. Director Qualifications We consider Ms. Pichon to be qualified to serve on the Board as well as the Nominating and Corporate Governance Committee and the Compensation Committee due to her experience with several prominent charitable foundations located in Fort Wayne and her education and training as an attorney. | | | | | | | | | | | | | | | | | | Industry | Brand | Board | Finance | Human Capital Management | Risk Management | Corporate Governance & Ethics |
Kristin L. Pruitt
Kristin L. Pruitt
Kristin L. Pruitt
| Age 53 Director Since 2023 Committees Corporate Risk | | | | | | | | | Background •Presently serves as President of Lakeland Financial and Lake City Bank. •Served as Executive Vice President, Chief Administrative Officer, 2019-2023, Executive Vice President and General Counsel, 2014-2019, and Senior Vice President and General Counsel, 2008-2014. •Served as Assistant General Counsel and Chief Compliance Officer at 1st Source Bank in South Bend, Indiana prior to joining Lakeland Financial in 2008. •Previously practiced law with Skadden, Arps, Slate, Meagher & Flom in Washington DC and with Baker and Daniels in South Bend, Indiana. Director Qualifications We consider Ms. Pruitt to be qualified to serve on the Board due to her experience with Lakeland Financial’s operations acquired as its Chief Administrative Officer and her experience in the financial services industry. | | | | | | | | | | | | | | | | Industry | Brand | Board | Human Capital Management | Risk Management | Corporate Governance & Ethics |
Kristin L. Pruitt
| 28 | |
Steven D. Ross
Steven D. Ross
Steven D. Ross
| Age 70 Director Since 2000 Committees Audit, Corporate Risk (Vice Chair) | | | | | | | | | Background •Former owner of Ross and Associates, a real estate management company. •Former President of Heartland Coffee Company, a regional coffee and beverage service company, based in Warsaw, Indiana. •Former President of Bertsch Services, Inc., a regional food service and vending company, which was based in Warsaw, Indiana prior to its sale. Director Qualifications We consider Mr. Ross to be a qualified candidate for service on the Board as well as the Audit Committee and the Corporate Risk Committee due to his skills and expertise acquired as president of a successful business in Kosciusko County and his knowledge of the business community in this region. | | | | | | | | | | | | | | | | Industry | Board | Finance | Human Capital Management | Risk Management | Corporate Governance & Ethics |
Brian J. Smith
Brian J. Smith
Brian J. Smith
| Age 60 Director Since 2011 Committees Audit (Vice Chair), Corporate Risk | | | | | | | | | Background •Co-Chief Executive Officer of Heritage Financial Group, Inc., a real estate investment and management and consumer finance company, based in Elkhart, Indiana. Director Qualifications We consider Mr. Smith to be a qualified candidate for service on the Board as well as the Audit Committee and the Corporate Risk Committee due to his expertise in the manufactured housing and consumer finance industries, which is a significant industry in northern Indiana, and his knowledge of the Elkhart, Indiana market as a prominent member of the business community. Additionally, Mr. Smith has a strong financial background as a certified public accountant, which adds meaningful expertise to the Audit Committee. | | | | | | | | | | | | | | | | Industry | Board | Finance | Human Capital Management | Risk Management | Corporate Governance & Ethics |
Brian J. Smith
| 2025 PROXY STATEMENT | 29 |
Bradley J. Toothaker
Bradley J. Toothaker
Bradley J. Toothaker
| Age 56 Director Since 2011 Committees Audit (Chair), Corporate Risk | | | | | | | | | | Background •Executive Chairman and former Chief Executive Officer of Bradley Company, a large Midwest-based, full-service real estate company. Director Qualifications We consider Mr. Toothaker to be a qualified candidate for service on the Board as well as the Audit Committee and the Corporate Risk Committee due to his extensive knowledge of the real estate sector in our region and his knowledge of the Northern Indiana market. | | | | | | | | | | | | | | | | | | Industry | Brand | Board | Finance | Human Capital Management | Risk Management | Corporate Governance & Ethics |
M. Scott Welch
M. Scott Welch
M. Scott Welch
| Age 64 Director Since 1998 Committees Compensation, Nominating and Corporate Governance | | | | | | | | | | Background •Chief Executive Officer of Welch Packaging Group, Inc., which is primarily engaged in producing industrial and point of purchase packaging and is headquartered in Elkhart, Indiana. •Lead Director of the board of Patrick Industries, Inc. Director Qualifications We consider Mr. Welch to be a qualified candidate for service on the Board as well as the Nominating and Corporate Governance Committee and the Compensation Committee due to his skills and expertise in the manufacturing industry and his past experience with growing and leading organizations. | | | | | | | | | | | | | | | | | | Industry | Brand | Board | Finance | Human Capital Management | Risk Management | Corporate Governance & Ethics |
M. Scott Welch
| 30 | |
Comparison to Peer Group
Comparison to Peer Group In establishing compensation of the named executive officers, the Compensation Committee utilizes market data regarding the compensation practices of other financial institutions of a similar asset size and complexity. Such institutions include, but are not limited to, the members of the peer group prepared by Pearl Meyer & Partners in 2023. For the 2023 compensation survey, the peer group generally included financial institutions with total assets of $4.9 billion to $18.0 billion with a focus on institutions located in the central region of the United States. The Compensation Committee may also consider data from additional financial institutions by evaluating relevant similarities such as business-line focus and long-term operating and financial stability. For example, institutions with a similar focus on complex commercial lending may be considered by the Compensation Committee even if they fall outside of the general asset size of our other peers. The Compensation Committee believes this comprehensive practice is useful in creating an overall compensation program that is competitive in the marketplace and attracts and retains qualified, talented executives. While the Compensation Committee believes that it is prudent to consider such comparative information in determining compensation practices, it does not set strict parameters for using this data. Rather, the Compensation Committee uses comparative data to ensure that executive compensation is not inconsistent with appropriately defined peer organizations. The Compensation Committee believes that the current executive officers of the Company have established a sound track record of long-term performance that warrants compensation at or around the median level of compensation among similarly situated financial institutions. For purposes of peer analysis in assessing performance, Lakeland Financial generally considers a peer group that includes commercial banks of similar asset size, financial performance and organizational structure as well as those that are key competitors for executive talent. Given the ever-changing landscape within the banking industry, the group of banks appropriate for comparative analysis is continually evolving. In connection with its 2023 analysis of the Company’s executive compensation programs, Pearl Meyer & Partners compiled a market reference group of 20 other publicly traded bank holding companies headquartered in the central United States, with median assets of $7.1 billion and stable-to-strong performance history. The Compensation Committee believes this peer group continued to be appropriate for 2024 for comparative analysis. The companies included in this peer group, excluding companies that have been acquired or otherwise no longer exist, are listed below:
Comparison to Peer Group
| Park National Corporation – Newark, Ohio Old Second Bancorp, Inc. – Aurora, Illinois Community Trust Bancorp – Pikeville, Kentucky First Merchants Corporation – Muncie, Indiana City Holding Company – Charleston, West Virginia Independent Bank Corporation – Ionia, Michigan Midland States Bancorp – Effingham, Illinois CNB Financial Corporation – Clearfield, Pennsylvania Horizon Bancorp – Michigan City, Indiana QCR Holdings, Inc. – Moline, Illinois | First Commonwealth Financial Corp. – Indiana, Pennsylvania 1st Source Corporation – South Bend, Indiana First Busey – Champaign, Illinois Peoples Bancorp – Marietta, Ohio Republic Bancorp – Louisville, Kentucky Stock Yards Bancorp – Louisville, Kentucky German American – Jasper, Indiana First Financial Corporation – Terre Haute, Indiana MidWestOne Financial – Iowa City, Iowa Mercantile Bank Corporation – Grand Rapids, Michigan |
Comparison to Peer Group
| 36 | |
Payouts for 2024 Performance
Payouts for 2024 Performance The Compensation Committee determined that it was in the best interest of the shareholders to allow the established performance thresholds and targets to stand in determining payouts under the LTI Program and the EIB Plan for 2024, other than with respect to the EIB for Mr. Donovan. The Compensation Committee believes that Mr. Donovan went above and beyond in his efforts to resolve certain matters facing the Company during 2024, and accordingly increased his EIB bonus payout from 100% of target to 110% of target. The Compensation Committee continues to believe that the plans are well designed to fairly compensate employees and create appropriate alignment with shareholders.
Payouts for 2024 Performance
| 2025 PROXY STATEMENT | 37 |
Annual Bonus
Annual Bonus The Compensation Committee typically determines eligibility for annual bonus payments using the parameters defined in the Company’s Executive Incentive Bonus Plan, as may be amended from time to time (the “EIB Plan”), which is a performance-based bonus plan for selected Lake City Bank corporate officers and includes the named executive officers. The Compensation Committee retains the right to modify the program or withhold payment at any time. Since the EIB Plan’s inception in 2002, Lakeland Financial’s performance has warranted payouts on an annual basis. Eligible participants in the EIB Plan, including the named executive officers, may earn an annual performance-based bonus based on Lakeland Financial’s overall performance (“Company performance”) as well as the individual participant’s performance (“individual performance”). The total target bonus opportunity is a percentage of average rate of salary during the year. As set forth in the EIB Plan, 50% of the bonus earned is determined by Company performance and 50% is determined by individual performance. Generally, a participant must be employed through the date of payment to earn a bonus, but participants may earn a pro rata bonus at the actual level of performance upon the date of a qualifying retirement or if terminated in connection with a change in control. No unearned bonuses are payable in the event of a participant’s death or disability. The payout for Company performance is based on our actual net income for that year compared to the targeted net income. We calculate this by using our net income after the 401(k) match and incentive compensation costs. The Compensation Committee approves a targeted net income amount after reviewing the previous year’s actual net income in conjunction with the Board’s and management’s expectations for that particular year. The target net income amount is generally reviewed and adjusted each year in order to provide a proper level of incentive to the officers and, in the Compensation Committee’s view, is not set at a level that makes it substantially certain that the target will be obtained. The Company performance payout percentage is determined based upon achieving certain performance levels of net income as defined in the table below. The payout percentage is the actual percentage of target net income attained when actual net income equals or exceeds 70% of target, up to the maximum of 150%.
Annual Bonus
| Performance Level | Target Net Income Percentage | 2024 Net Income | Company Performance Payout Percentage | | Maximum Performance | 150% | $140,217,000 | 150% | | Target Performance | 100% | 93,478,000 | 100% | | Threshold Performance | 70% | 65,434,600 | 50% | | <Threshold Performance | <70% | <65,434,600 | 0% |
Annual Bonus
The actual net income used for bonus calculations for all participants in the EIB Plan for 2024 was $93,478,000, or 100% of the targeted amount, and bonus payouts for Company performance were paid out based on that level. Individual performance payouts under the EIB Plan are determined by the formulas described below, although the Compensation Committee reserves the right to modify the payouts in its sole discretion. The payout for individual performance is determined by the participant’s achievement of individual performance goals that are established for the year. The Compensation Committee also has the discretion to reward achievements that are not the subject of any pre-established goals. In 2024, the Compensation Committee determined that the named executive officers achieved their respective individual performance goals. The percent of eligible salary and individual performance payout percentages for each named executive officer are listed in the table below.
Annual Bonus
| Name | Target Bonus as Percent of Eligible Salary | Individual Performance Payout Percentage | | David M. Findlay | 50% | 100% | | Kristin L. Pruitt | 45% | 100% | | Lisa M. O’Neill | 40% | 100% | | Eric H. Ottinger | 40% | 100% | | J. Rickard Donovan | 30% | 110% |
Annual Bonus
| 40 | |
Annual Bonus
The 2024 individual goals are set forth below:
Annual Bonus
| David M. Findlay •Work with Management Committee to complete the strategic initiatives in the 2024 Strategic Plan, achieve financial performance targets contained in the 2024 budget, ensure that succession planning is in place bankwide and ensure the bank is prepared as it approaches $10 billion asset size. •Provide effective leadership of the Company's Management Team. •Focus on ensuring personal connectivity to each member of Senior Leadership Council. •Play a significant role in key vendor relationships. •Effectively coordinate senior management's involvement with the Board of Directors. •Represent Lake City Bank in the external community. | | Kristin L. Pruitt •Expand external client and community engagement. •Focus on boardroom presence with a more formal role. •Develop increased technical competencies on the Credit Administration front. •Develop a formal role in investor relations. •Continue oversight of ESG matters and the road to $10 billion asset size. | | Lisa M. O’Neill •Work with Strategy and Innovation Committee and Pricing Committee to identify growth opportunities. •Thoughtfully plan and implement technology innovations. •Continue to develop the Lake City Bank data lake. •Manage active engagement on Fintech opportunities. •Assist Finance and Treasury departments as they build out the automated forecasting model. •Develop a governance structure for the use of artificial intelligence at the bank. | | Eric H. Ottinger •Manage the coordination of workflows between Credit Administration, Commercial Banking and Commercial Loan Operations. •Develop standardized loan covenants to incorporate in loan submissions and business loan agreements. •Manage commercial real estate exposure following Federal Reserve guidance levels. •Continue to develop the Business Development Program. •Foster continued relationships between Regional Credit Officers and Commercial Banking teams. | | J. Rickard Donovan •Lead the integration of legal and compliance with other risk areas within the bank. •Manage the IOI matter, outside counsel, insurers and bank-related parties through the litigation process. •Assist compliance group as they manage the impact and implementation of the bank's efforts to comply with Rule 1071. •Build relationships among the Indianapolis team. •Manage and support efforts of the disclosure task force. |
Annual Bonus
| 2025 PROXY STATEMENT | 41 |
Annual Bonus
For 2024, our overall performance and achievement of individual goals resulted in aggregate bonus payments of approximately $3.9 million paid to 285 employees and ranged from 3% to 50% of base salary. The bonuses paid to our named executive officers in 2025 and 2024 are included in the table below.
Annual Bonus
| Name | Bonus Paid in 2024 for 2023 Performance | Bonus Paid in 2025 for 2024 Performance | Percentage Change | | David M. Findlay | $271,365 | $357,250 | 31.6% | | Kristin L. Pruitt | 137,340 | 197,550 | 43.8% | | Lisa M. O’Neill | 97,960 | 136,000 | 38.8% | | Eric H. Ottinger | 120,190 | 147,200 | 22.5% | | J. Rickard Donovan | 55,335 | 75,900 | 37.2% |
Long-Term Incentive Program – Performance-Based Awards
Long-Term Incentive Program – Performance-Based Awards The Compensation Committee follows a historical practice of making annual performance-based equity grants, with such practice referred to informally as the Long-Term Incentive Program (“LTI Program”). The LTI Program is designed to provide for performance-based payouts based upon key financial criteria over rolling three-year periods as recommended by Mr. Findlay and approved by the Compensation Committee. The Compensation Committee has made grants under the LTI Program each year since 2006. At the discretion of the Compensation Committee, awards under the LTI Program consist of performance-based restricted stock units rather than cash to provide for additional alignment with shareholders and stock price performance over the performance period. The purpose of the LTI Program is to motivate select officers, including our named executive officers, to collectively produce outstanding results, encourage superior performance, increase productivity and aid in attracting and retaining key employees. Mr. Findlay recommends, subject to the Compensation Committee’s approval, the performance measures and performance targets to be used for each performance period. The Compensation Committee currently utilizes three key financial measures: revenue growth rate, diluted earnings per share growth rate and average return on beginning equity. Performance targets can be based on a combination of Lakeland Financial’s goals, business unit and/or individual goals and other such factors as determined and approved by the Compensation Committee. Different performance targets may be established for different participants for any performance period, although currently all executives have the same performance targets. Unless the Compensation Committee determines otherwise, a new three-year performance period will begin each year under the LTI Program. The maximum number of performance periods open to measurement at any time is three. Our named executive officers and other select officers receive earned LTI Program payouts on a yearly basis at the conclusion of each successive three-year performance period. The Compensation Committee believes that by making annual awards that consider Company performance over rolling three-year periods, the Compensation Committee is incentivizing our named executive officers to focus on consistent and sustainable performance rather than taking outsized risks in any one particular year.
Long-Term Incentive Program – Performance-Based Awards
| 42 | |
Long-Term Incentive Program – Performance-Based Awards
The amount of the LTI award for each performance period is based upon achieving certain performance levels for each of the three measurement criteria as defined in the tables below. The Company employs linear interpolation to determine the payout in the event a measurement criterion falls between the threshold and target or target and maximum performance levels.
3 YEAR REVENUE GROWTH
| | Performance Level | | | | | Performance Period | < Threshold Performance | Threshold Performance | Target Performance | Maximum Performance | | | | | | | | 2025-2027 | <1.90% | 1.90% | 4.50% | 7.80% | | 2024-2026 | <2.00% | 2.00% | 4.75% | 8.25% | | 2023-2025 | <3.00% | 3.00% | 7.00% | 12.10% | | Vesting | 0% of target award | 16.67% of target award | 33.33% of target award | 50% of target award |
3 YEAR DILUTED EARNINGS PER SHARE GROWTH
| | Performance Level | | | | | Performance Period | < Threshold Performance | Threshold Performance | Target Performance | Maximum Performance | | | | | | | | 2025-2027 | <1.80% | 1.80% | 4.50% | 8.00% | | 2024-2026 | <2.00% | 2.00% | 5.00% | 9.00% | | 2023-2025 | <2.50% | 2.50% | 6.25% | 11.10% | | Vesting | 0% of target award | 16.67% of target award | 33.33% of target award | 50% of target award |
3 YEAR AVERAGE RETURN ON BEGINNING EQUITY
| | Performance Level | | | | | Performance Period | < Threshold Performance | Threshold Performance | Target Performance | Maximum Performance | | | | | | | | 2025-2027 | <9.75% | 9.75% | 13.00% | 15.75% | | 2024-2026 | <10.50% | 10.50% | 14.00% | 17.00% | | 2023-2025 | <13.25% | 13.25% | 17.75% | 21.50% | | Vesting | 0% of target award | 16.67% of target award | 33.33% of target award | 50% of target award |
3 YEAR AVERAGE RETURN ON BEGINNING EQUITY
| | 2022-2024 | | Weighted Payout Percentage | | Performance Metric | Target Performance | Actual Performance | | | 3 Year Revenue Growth | 7.00% | 4.40% | 22.50% | | 3 Year Diluted Earnings Per Share Growth | 6.25% | -0.99% | 0.00% | | 3 Year Average Return on Beginning Equity Growth | 14.00% | 15.20% | 40.00% | | Payout Percentage | | | 62.50% |
3 YEAR AVERAGE RETURN ON BEGINNING EQUITY
| Name | Performance Period 2021-2023 Payout Shares | Performance Period 2022-2024 Payout Shares | | David M. Findlay | 18,880 | 11,560 | | Kristin L. Pruitt | 7,670 | 4,696 | | Lisa M. O’Neill | 7,080 | 4,335 | | Eric H. Ottinger | 7,670 | 4,696 | | J. Rickard Donovan | 4,779 | 2,926 |
3 YEAR AVERAGE RETURN ON BEGINNING EQUITY
Shares delivered pursuant to the LTI Program described above are currently granted under the shareholder-approved 2017 Equity Incentive Plan, as may be amended from time to time (the “2017 Equity Incentive Plan”). Pursuant to the terms of the 2017 Equity Incentive Plan and restricted stock unit award agreements governing the terms of the LTI Program awards, unvested awards are forfeited upon termination of employment other than a termination in connection with a change in control or due to the participant’s death, disability or retirement. If the Lakeland Financial Corporation 2025 Equity Incentive Plan (the "2025 Equity Incentive Plan") is approved by our shareholders at the annual meeting, the 2025 Equity Incentive Plan will replace the 2017 Equity Incentive Plan and all future awards shall be made from the 2025 Equity Incentive Plan. See Proposal 3 for further information regarding the 2025 Equity incentive Plan. For awards granted in 2023 and 2024, such awards will generally vest at the target level of performance, prorated for the portion of the performance period during which the executive was employed upon a participant’s death, disability, or qualifying retirement. In the event of a change in control if the awards are assumed by a successor, such awards will fully vest based upon actual performance through the date of the change in control if the participant incurs a qualifying termination of employment. For awards that may be granted in 2025 under the 2017 Equity Incentive Plan and prior to the approval of the 2025 Equity Incentive Plan, such awards will generally vest at the actual level of performance, prorated for the portion of the performance period during which the executive was employed upon a participant's death, disability or qualifying retirement. In the event of a change in control if the awards are assumed by a successor, such awards will fully vest based upon the greater of actual or target performance through the date of the change in control if the participant incurs a qualifying termination of employment.
Long-Term Incentive Program – Time-Based Awards
Long-Term Incentive Program – Time-Based Awards The Compensation Committee determined that beginning with the LTI Program awards for 2022, it would make 75% of the awards in the form of performance-based restricted stock units and 25% in the form of time-based restricted stock units, vesting over the same three performance periods as the performance-based restricted stock units. The Compensation Committee believed that this change would strengthen the LTI Program as a retention tool by moderately raising the floor during difficult years and lowering the ceiling during high-performing years. Beginning with the LTI Program awards in 2025, the Compensation Committee has determined that 60% of the awards will be in the form of performance-based restricted stock units and 40% in the form of time-based restricted stock units, vesting over the same three performance periods as the performance-based restricted stock units. In 2023, 2024 and 2025, each named executive officer was granted the following time-based restricted stock units:
Long-Term Incentive Program – Time-Based Awards
| Name | Performance Period 2023-2025 Number of Share Awards Payable in 2026 | Performance Period 2024-2026 Number of Share Awards Payable in 2027 | Performance Period 2025-2027 Number of Share Awards Payable in 2028 | | David M. Findlay | 4,000 | 4,000 | 8,448 | | Kristin L. Pruitt | 1,625 | 2,500 | 4,832 | | Lisa M. O’Neill | 1,625 | 1,625 | 3,432 | | Eric H. Ottinger | 1,625 | 1,625 | 3,432 | | J. Rickard Donovan | 1,013 | 1,013 | 2,139 |
Long-Term Incentive Program – Time-Based Awards
No other stock-based awards were issued in 2024 to the named executive officers under our 2017 Equity Incentive Plan as set forth on the 2024 Outstanding Equity Awards at Fiscal Year End Table.
Change in Control and Employment Agreements
Change in Control and Employment Agreements The Company has change in control agreements with each of Mr. Findlay, Ms. Pruitt, Ms. O'Neill and Mr. Ottinger. The change in control agreements are discussed more fully in the Potential Payments upon Termination or Change in Control section below.
Assessment of Compensation Risk
In analyzing the risks inherent in the Company’s annual bonus plan, as described under the Annual Bonus section above, the Compensation Committee determined as follows: •Bonus amounts are tied to financial performance and personal performance against individualized goals, including non-financial goals. •Threshold goals are reasonably achievable with good performance and are sufficiently challenging but not overly difficult to achieve. •Payouts are interpolated based on the percentage of net income achieved. •Reasonable bonus maximums exist as part of an overall balanced pay mix. With respect to the LTI Program as described under the Long-Term Incentive Plan section above, the Compensation Committee concluded that the program was well designed to align the Company’s strategic objectives with long-term value creation for the following reasons: •Performance metrics factor in risk of capital and measures that take into consideration balance sheet, income statement and equity factors. •Threshold goals are reasonably achievable with good performance and are sufficiently challenging but not overly difficult. The LTI Program includes neither steep cliffs for not achieving goals nor exponential upside for achieving them. Reasonable leverage exists above threshold goals to achieve maximum payouts. •Incentives are capped at reasonable levels. •Maximum awards are an appropriate portion of total pay. •The three-year performance period discourages measures that do not benefit the Company over the long term. •Denomination in Company stock gives incentive to focus on sustained value creation and further alignment with shareholder interests. The Compensation Committee completed similar analyses for the other compensation programs available to employees and concluded that the amounts provided under such programs are reasonable as part of a balanced pay mix and appropriately incentivize performance without encouraging the manipulation of earnings, other performance metrics or other improper behavior in order to enhance the benefits payable under such programs. The Compensation Committee then reviewed the overall executive compensation structure and reached the following conclusions based on the following key risk categories: •Strategic Risk: The Compensation Committee determined that the performance metrics align with the Company’s strategy and objectives for long-term value creation for our shareholders, properly reward various performance outcomes and account for risk over a longer-term time horizon. •Cultural Risk: Lakeland Financial has strong corporate values that emphasize ethical behavior, actions that contribute to building long-term value rather than short-term performance, teamwork and investment in people and infrastructure. Our senior executives have little incentive to be overly focused on short-term stock price performance. •Governance Risk: The Compensation Committee is independent, has access to consultants and other advisers independent of management, has an appropriate level of expertise and is fully educated on all material incentive plans and programs. •Pay-Mix Risk: Lakeland Financial has market-competitive salaries which reduces the pressure to focus on short-term performance in order to achieve reasonable annual compensation. The Compensation Committee believes the mix between short-term and longer-term incentives is appropriately balanced. •Performance Measurement Risk: The Compensation Committee has a disciplined process of establishing goals for and evaluating the performance of Mr. Findlay in executive sessions at which he is not present. The Compensation Committee also reviews and approves Mr. Findlay’s goals for and performance assessments of the other named executive officers. Financial performance measures consider the income statement, balance sheet and statement of cash flows so that management is accountable for all aspects of Lakeland Financial’s financial health. The Company considers both financial and non-financial performance outcomes in assessing executives’ performance and compensation.
Assessment of Compensation Risk
•Annual Incentive Risk: Annual bonuses for Executives are earned based on both financial and non-financial performance. Target bonuses are reasonably achievable with good performance. The Compensation Committee believes the goals are challenging but not overly difficult to achieve. The bonus payout curves do not use steep cliffs to determine target bonus payouts or offer exponential upside for maximum payouts. •Long-Term Incentive Risk: The LTI Program uses different performance metrics and measurement periods than annual incentives so that short-term performance is not overemphasized. Performance-based restricted stock units under the LTI Program do not use overly stretched goals or accelerated payout curves. The target and maximum payouts under the LTI Program are reasonable in light of our overall pay mix. Long-term incentives focus on measures of sustainable value creation for long-term investors. After considering all components of the compensation paid to the named executive officers, the Compensation Committee has determined that the compensation is reasonable and not excessive and does not encourage imprudent risk-taking or other improper behavior. In making this determination, the Compensation Committee considered many factors, including: •Management has positioned Lakeland Financial for future success through the planning and execution of Lakeland Financial’s strategic plan. •Management has consistently led Lakeland Financial to strong levels of performance in recent years. •The shareholder return performance of Lakeland Financial over the past five years has outpaced the performance of companies in Lakeland Financial’s peer group. •Lakeland Financial is well positioned in the communities it serves as a result of the direction that this management team has taken the Company.
2024 Summary Compensation Table
2024 Summary Compensation Table The following table sets forth information concerning the compensation of our Chief Executive Officer, Chief Financial Officer and our other three most highly compensated executive officers in 2024, 2023 and 2022.
2024 Summary Compensation Table
| Name and Principal Position (a) | Year (b) | Salary(1) (c) | Bonus(2) (d) | Stock Awards(3)(4) (e) | Non-Equity Incentive Plan Compensation (f) | All Other Compensation(5) (g) | Total (h) | | David M. Findlay Chairman and Chief Executive Officer | 2024 | $712,385 | $— | $945,120 | $357,250 | $33,911 | $2,048,666 | | | 2023 | 684,923 | — | 1,066,080 | 271,365 | 28,258 | 2,050,626 | | | 2022 | 658,515 | — | 1,221,280 | 353,100 | 26,498 | 2,259,393 | | Kristin L. Pruitt President | 2024 | 437,692 | — | 590,700 | 197,550 | 29,662 | 1,255,604 | | | 2023 | 396,692 | — | 521,035 | 137,340 | 25,450 | 1,080,517 | | | 2022 | 337,154 | — | 496,145 | 144,664 | 27,295 | 1,005,258 | | Lisa M. O’Neill Executive Vice President, Chief Financial Officer | 2024 | 337,692 | — | 383,955 | 136,000 | 22,509 | 880,156 | | | 2023 | 308,385 | — | 433,095 | 97,960 | 18,639 | 858,079 | | | 2022 | 288,308 | — | 457,980 | 123,692 | 21,390 | 891,370 | | Eric H. Ottinger Executive Vice President, Chief Commercial Banking Officer | 2024 | 366,885 | — | 383,955 | 147,200 | 33,506 | 931,546 | | | 2023 | 352,423 | — | 433,095 | 120,190 | 29,621 | 935,329 | | | 2022 | 338,693 | — | 496,145 | 145,306 | 31,318 | 1,011,462 | | J. Rickard Donovan(6) Senior Vice President, General Counsel | 2024 | 229,000 | 6,900 | 239,234 | 69,000 | 31,364 | 575,498 | | | 2023 | 216,346 | — | 269,852 | 55,335 | 60,683 | 602,216 | | | — | — | | — | — | — | — |
2024 Summary Compensation Table
(1)Salary reported includes amounts deferred at the officer’s election pursuant to the Company’s deferred compensation plans. Salary amounts deferred in 2024 are included in the Nonqualified Deferred Compensation table, below. (2)The Compensation Committee awarded Mr. Donovan an additional discretionary bonus for his efforts in resolving certain matters facing the Company during 2024. See "Payouts for 2024 Performance" and "Annual Bonus" above for further information about Mr. Donovan's discretionary bonus under the EIB Plan. (3)For 2024, the amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718 for performance-based restricted stock unit awards granted under our LTI Program for the 2024-2026 performance period. For 2022 and subsequent years, awards are split to include 25% time based and 75% performance based shares. For 2023 and 2022, the amounts represent such grant date fair value for performance-based restricted stock unit awards granted for the 2023-2025 and 2022-2024 performance periods. Because the currently outstanding restricted stock units do not pay or accumulate dividend equivalents during the applicable three-year vesting periods, these amounts were calculated based on the Company’s closing share price on the date of grant discounted by the present value of the dividends expected to be paid on the underlying shares during the vesting period. Expected dividends are calculated using the most recent dividend rate declared by the Board on the grant date. The Company uses a discount rate equal to the three year Treasury rate on the grant date. See the discussion of equity awards in Note 14 of the Notes to Consolidated Financial Statements for Lakeland Financial’s financial statements for the year ended December 31, 2024 for further information regarding these awards. (4)The values above are based on the probable outcome of performance conditions at the time of grant. The maximum value that could be paid out based on time and performance for each individual under the respective performance-based restricted stock unit award is as follows:
2024 Summary Compensation Table
| Name | 2022 | 2023 | 2024 | | David M. Findlay | $1,679,260 | $1,465,860 | $1,229,540 | | Kristin L. Pruitt | 682,199 | 683,446 | 812,213 | | Lisa M. O’Neill | 629,723 | 595,506 | 527,938 | | Eric H. Ottinger | 682,199 | 595,506 | 527,938 | | J. Rickard Donovan | — | 371,029 | 328,931 |
2024 Summary Compensation Table
(5)The amounts for 2024 set forth in column (f) as “all other compensation” include 401(k) plan matching contributions, country club memberships and cell phone stipends we paid as follows:
2024 Summary Compensation Table
| Name | 401(k) Match | Cell Phone Stipend | Country Club Membership | Total | | David M. Findlay | $20,700 | $1,809 | $11,402 | $33,911 | | Kristin L. Pruitt | 20,700 | 1,809 | 7,153 | 29,662 | | Lisa M. O’Neill | 20,700 | 1,809 | — | 22,509 | | Eric H. Ottinger | 20,700 | 1,809 | 10,997 | 33,506 | | J. Rickard Donovan | 17,169 | 1,809 | 12,386 | 31,364 |
2024 Summary Compensation Table
(6)Mr. Donovan was not a named executive officer prior to 2023.
2024 Summary Compensation Table
| 2025 PROXY STATEMENT | 49 |
2024 Grants of Plan-Based Awards
2024 Grants of Plan-Based Awards The following table provides information on annual cash bonuses under our EIB Plan and on long-term equity performance awards. These plans are described in more detail in the Compensation Discussion and Analysis section. The estimated amounts set forth in the table are subject to the terms of the respective plan and Company and individual performance, as described in the Compensation Discussion and Analysis section.
2024 Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards(4) | | | All Other Stock Awards | Grant Date Fair Value of Stock and Option Awards (j) | | Name (a) | Grant Date (b) | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (shares) (f) | Target (shares) (g) | Maximum (shares) (h) | Number of Shares (i) | | | David M. Findlay | | | | | | | | | | | LTI Program - Performance Based | 2/6/2024(1) | | | | 6,000 | 12,000 | 18,000 | | $708,840 | | LTI Program - Time Based | 2/6/2024(2) | | | | | | | 4,000 | 236,280 | | EIB Plan | —(3) | $178,625 | $357,250 | $535,875 | | | | | | | Kristin L. Pruitt | | | | | | | | | | | LTI Program - Performance Based | 2/6/2024(1) | | | | 3,750 | 7,500 | 11,250 | | 443,025 | | LTI Program - Time Based | 2/6/2024(2) | | | | | | | 2,500 | 147,675 | | EIB Plan | —(3) | 98,775 | 197,550 | 296,325 | | | | | | | Lisa M. O’Neill | | | | | | | | | | | LTI Program - Performance Based | 2/6/2024(1) | | | | 2,438 | 4,875 | 7,313 | | 287,966 | | LTI Program - Time Based | 2/6/2024(2) | | | | | | | 1,625 | 95,989 | | EIB Plan | —(3) | 68,000 | 136,000 | 204,000 | | | | | | | Eric H. Ottinger | | | | | | | | | | | LTI Program - Performance Based | 2/6/2024(1) | | | | 2,438 | 4,875 | 7,313 | | 287,966 | | LTI Program - Time Based | 2/6/2024(2) | | | | | | | 1,625 | 95,989 | | EIB Plan | —(3) | 73,600 | 147,200 | 220,800 | | | | | | | J. Rickard Donovan | | | | | | | | | | | LTI Program - Performance Based | 2/6/2024(1) | | | | 1,519 | 3,037 | 4,556 | | 179,396 | | LTI Program - Time Based | 2/6/2024(2) | | | | | | | 1,013 | 59,838 | | EIB Plan | —(3) | 34,500 | 69,000 | 103,500 | | | | | |
2024 Grants of Plan-Based Awards
(1)This row represents possible payments for the performance period running from 2024-2026. The LTI Program is described in the sections entitled “Long-Term Incentive Program - Performance-based Awards” and "Long-Term Incentive Program - Time-based Awards" in the Compensation Discussion and Analysis section. (2)This row represents time-based restricted stock unit grants that vest over a three-year year period from 2024-2026. The LTI Program is described in the sections entitled “Long-Term Incentive Program - Performance-based Awards” and "Long-Term Incentive Program - Time-based Awards" in the Compensation Discussion and Analysis section. (3)This row represents possible payments pursuant to the EIB Plan for 2024 performance. The plan is described in the section entitled “Annual Bonus” in the Compensation Discussion and Analysis section. The bonus payout for 2024 performance is shown in the column entitled “Non Equity Incentive Plan Compensation” in the Summary Compensation Table above. (4)The Compensation Discussion and Analysis describes the performance conditions applicable to these grants under Compensation Decisions – Long-Term Incentive Program.
2024 Grants of Plan-Based Awards
| 50 | |
2024 Outstanding Equity Awards at Fiscal Year-End
2024 Outstanding Equity Awards at Fiscal Year-End The following table sets forth information concerning outstanding option awards and stock awards held by the individuals named in the Summary Compensation Table as of December 31, 2024. Market values for outstanding stock awards are based on the closing price of Lakeland Financial stock on December 31, 2024 (the last trading day of the year) of $68.76.
2024 Outstanding Equity Awards at Fiscal Year-End
| Name (a) | Grant Date (b) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (c)(1) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (d)(1) | | David M. Findlay | 2/6/2024 | 12,000 | $825,120 | | | 2/6/2024(2) | 4,000 | 275,040 | | | 2/7/2023 | 6,000 | $412,560 | | | 2/7/2023(3) | 4,000 | 275,040 | | | 2/1/2022 | 12,000 | 825,120 | | | 2/1/2022(4) | 4,000 | 275,040 | | Kristin L. Pruitt | 2/6/2024 | 7,500 | 515,700 | | | 2/6/2024(2) | 2,500 | 171,900 | | | 2/7/2023 | 2,438 | 167,637 | | | 2/7/2023(3) | 1,625 | 111,735 | | | 2/1/2022 | 4,875 | 335,205 | | | 2/1/2022(4) | 1,625 | 111,735 | | Lisa M. O’Neill | 2/6/2024 | 4,875 | 335,205 | | | 2/6/2024(2) | 1,625 | 111,735 | | | 2/7/2023 | 2,438 | 167,637 | | | 2/7/2023(3) | 1,625 | 111,735 | | | 2/1/2022 | 4,500 | 309,420 | | | 2/1/2022(4) | 1,500 | 103,140 | | Eric H. Ottinger | 2/6/2024 | 4,875 | 335,205 | | | 2/6/2024(2) | 1,625 | 111,735 | | | 2/7/2023 | 2,438 | 167,637 | | | 2/7/2023(3) | 1,625 | 111,735 | | | 2/1/2022 | 4,875 | 335,205 | | | 2/1/2022(4) | 1,625 | 111,735 | | J. Rickard Donovan | 2/6/2024 | 3,037 | 208,824 | | | 2/6/2024(2) | 1,013 | 69,654 | | | 2/7/2023 | 1,519 | 104,446 | | | 2/7/2023(3) | 1,013 | 69,654 | | | 2/1/2022 | 3,037 | 208,824 | | | 2/1/2022(4) | 1,013 | 69,654 |
2024 Outstanding Equity Awards at Fiscal Year-End
(1)The awards vest based upon the achievement of certain performance thresholds over a three-year period, as described in the section entitled “Long-Term Incentive Program” in the Compensation Discussion and Analysis section above. Restricted stock units subject to awards made in 2024, 2023, and 2022 vest, if at all, on January 1 of 2027, 2026 and 2025, respectively. Additionally, as the vesting is based on actual performance during the performance periods through December 31, 2024, the 2022 awards are reported at target performance, the 2023 awards are reported at threshold performance and the 2024 awards are reported at target performance. (2)This row represents time-based restricted stock unit grants that vest over a three-year year period from 2024-2026.
2024 Outstanding Equity Awards at Fiscal Year-End
| 2025 PROXY STATEMENT | 51 |
2024 Option Exercises and Stock Vested
2024 Option Exercises and Stock Vested The following table sets forth information concerning the exercise of options and the vesting of stock awards in 2024 by the individuals named in the Summary Compensation Table.
2024 Option Exercises and Stock Vested
| | Stock Awards | | | Name (a) | Stock Awards Number of Shares Acquired on Vesting(1) (b) | Value Realized on Vesting(2) (c) | | David M. Findlay | 18,880 | $1,226,634 | | Kristin L. Pruitt | 7,670 | 498,320 | | Lisa M. O’Neill | 7,080 | 459,988 | | Eric H. Ottinger | 7,670 | 498,320 | | J. Rickard Donovan | 4,779 | 310,492 |
2024 Option Exercises and Stock Vested
(1)Amounts include the number of restricted stock units that vested in 2024. (2)The amounts reflect the value realized upon the vesting of restricted stock units based on the closing price of Lakeland Financial stock on the vesting date.
2024 Option Exercises and Stock Vested
| 52 | |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation Effective January 1, 2004, we adopted the Lake City Bank Deferred Compensation Plan (the “Deferred Compensation Plan”). The purpose of the Deferred Compensation Plan is to provide an option for salary deferrals at the participant’s voluntary election for certain individuals without regard to statutory limitations under tax qualified plans. The Deferred Compensation Plan is available to all of our executive officers. The plan is funded solely by participant contributions and does not receive a Company match. Participants may defer a portion of their salary or bonus under the Deferred Compensation Plan. Deferred amounts are tracked by the Company in a deferral account. The Company will credit earnings and losses to the participant’s deferred account based on the performance of one or more measurements funds selected by the participant from a pool of measurement funds selected by the Compensation Committee. The participant’s deferred account balance will be distributed in a lump sum following the participant’s termination of employment or death. Participants may elect to receive the funds in a lump sum or in annual installments for up to 10 years following retirement on or after the participant’s attainment of age 55 and five years of service. Withdrawals are not allowed during their employment, except in the event of a financial hardship as approved by the Compensation Committee or if the participant makes an in service distribution election prior to the time of the deferral in accordance with the terms of the Deferred Compensation Plan. All deferral elections and associated distribution schedules are irrevocable. Earnings or losses on deferrals are the result of market performance of the selected investments.
Nonqualified Deferred Compensation
| Name (a) | Executive Contributions in Last FY (b) | Registrant Contributions in Last FY (c) | Aggregate Earnings in Last FY (d) | Aggregate Withdrawals/ Distributions (e) | Aggregate Balance at Last FYE (f) | | David M. Findlay(1) | $67,841 | $— | $509,918 | $— | $3,021,172 | | Kristin L. Pruitt(2) | 26,370 | — | 34,980 | 95,665 | 225,403 | | Lisa M. O’Neill(3) | 20,000 | — | 9,881 | — | 70,697 | | Eric H. Ottinger(4) | 112,525 | — | 71,759 | — | 550,187 | | J. Rickard Donovan | — | — | — | — | — |
Nonqualified Deferred Compensation
(1)With respect to Mr. Findlay, $67,841 of the 2024 contributions were reported in the Summary Compensation Table as non-equity incentive compensation. The 2024 aggregate earnings were not considered above market interest, and as such, were not reported in the Summary Compensation Table. $2,036,217 of the aggregate balance as of December 31, 2024 has been reported as compensation to the executive in the Summary Compensation Table in previous years. (2)With respect to Ms. Pruitt, $26,370 of the 2024 contributions were reported in the Summary Compensation Table as non-equity incentive compensation. The 2024 aggregate earnings were not considered above market interest, and as such, were not reported in the Summary Compensation Table. $225,403 of the aggregate balance as of December 31, 2024 has been reported as compensation to the executive in the Summary Compensation Table in previous years. (3)With respect to Ms. O’Neill, $10,000 and $10,000 of the 2024 contributions were reported in the Summary Compensation Table as salary and non-equity incentive compensation, respectively. The 2024 aggregate earnings were not considered above market interest, and as such, were not reported in the Summary Compensation Table. $28,500 of the aggregate balance as of December 31, 2024 has been reported as compensation to the executive in the Summary Compensation Table in previous years. (4)With respect to Mr. Ottinger, $88,487 and $24,038 of the 2024 contributions were reported in the Summary Compensation Table as salary and non-equity incentive compensation, respectively. The 2024 aggregate earnings were not considered above market interest, and as such, were not reported in the Summary Compensation Table. $250,690 of the aggregate balance as of December 31, 2024 has been reported as compensation to the executive in the Summary Compensation Table in previous years. As noted above, all contributions to the plan are funded solely by voluntary participant contributions which represent a deferral of annual salary or non-equity incentive compensation and there are no Company matching contributions. All aggregate earnings shown above represent investment and interest return on participant contributions.
Nonqualified Deferred Compensation
| 2025 PROXY STATEMENT | 53 |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The following table sets forth information concerning potential payments and benefits under our compensation programs and benefit plans to which the named executive officers would be entitled upon a hypothetical termination of employment as of December 31, 2024. As is more fully described below, all of the named executive officers except for Mr. Donovan were subject to change in control agreements with Lakeland Financial that were in effect on December 31, 2024 (each, a “Change in Control Agreement”). These agreements provide payments and benefits to executives terminated in connection with a change in control of Lakeland Financial. Except for the payments and benefits provided by the Change in Control Agreements, all other payments and benefits provided to any named executive officer upon termination of employment are the same as the payments and benefits provided to other eligible executives of Lakeland Financial. For purposes of estimating the value of certain equity awards, we have assumed a price per share of our common stock of $68.76 which was the closing price of our stock on December 31, 2024, the last trading day of the year.
Potential Payments Upon Termination or Change in Control
| Name | Type of Payment | Voluntary Retirement | Termination- Death or Disability | Termination, by the Company Other than for Cause, or by the Executive for Good Reason, in Connection with Change in Control(1) | | David M. Findlay | Cash Severance Payment | $— | $— | $2,143,500 | | | LTI Program(2) | 1,100,160 | 1,100,160 | 1,218,427 | | | EIB Plan(3) | 357,250 | — | 357,250 | | | Continuation of Medical/Dental Benefits(4) | — | — | 11,900 | | | Total Termination Benefits | 1,457,410 | 1,100,160 | 3,731,077 | | Kristin L. Pruitt | Cash Severance Payment | — | — | 1,273,100 | | | LTI Program(2) | — | 527,160 | 656,228 | | | EIB Plan(3) | — | — | 197,550 | | | Continuation of Medical/Dental Benefits(4) | — | — | 145 | | | Total Termination Benefits | — | 527,160 | 2,127,023 | | Lisa M. O’Neill | Cash Severance Payment | — | — | 952,000 | | | LTI Program(2) | 446,940 | 446,940 | 494,986 | | | EIB Plan(3) | 136,000 | — | 136,000 | | | Continuation of Medical/Dental Benefits(4) | — | — | 34,388 | | | Total Termination Benefits | 582,940 | 446,940 | 1,617,374 | | Eric H. Ottinger | Cash Severance Payment | — | — | 1,030,400 | | | LTI Program(2) | — | 446,940 | 494,986 | | | EIB Plan(3) | — | — | 147,200 | | | Continuation of Medical/Dental Benefits(4) | — | — | 24,791 | | | Total Termination Benefits | — | 446,940 | 1,697,377 | | J. Rickard Donovan | Cash Severance Payment | — | — | — | | | LTI Program(2) | 278,478 | 278,478 | — | | | EIB Plan(3) | 69,000 | — | — | | | Continuation of Medical/Dental Benefits(4) | — | — | — | | | Total Termination Benefits | 347,478 | 278,478 | — |
Potential Payments Upon Termination or Change in Control
(1)The amounts set forth are gross amounts payable upon a termination without cause or a resignation by the executive for good reason (a “Termination”) in connection with a change in control and are subject to a modified 280G cutback provision, which may result in a reduced payment. (2)Under the 2017 Equity Incentive Plan, a prorated portion of outstanding awards will vest upon a qualifying retirement, with such number determined based upon target performance for the portion of the performance period during which the retiring executive was employed. Only Mr. Findlay, Ms. O'Neill and Mr. Donovan would qualify for such treatment upon a retirement as of December 31, 2024. Awards will be prorated based upon the period during which the executive was employed. Awards made in 2022 and after are split to include 25% time based and 75% performance based shares. Upon a termination in connection with a change in control, outstanding awards will vest based upon actual performance though the date of the change in control. (3)Under the EIB Plan, a participant forfeits his or her bonus eligibility upon terminating employment prior to the date of payment. However, a prorated bonus is payable to a participant upon a qualifying retirement, based upon actual performance under relevant performance metrics through the date of such retirement. Only Mr. Findlay, Ms. O'Neill and Mr. Donovan would qualify for such treatment upon a retirement as of December 31, 2024. The calculations above assume a level of individual and Company performance of 100% for Mr. Findlay, Ms. Pruitt, Ms. O'Neill, Mr. Ottinger and Mr. Donovan. In addition, in the event of a termination in connection with a change in control of the Company, bonuses for any completed performance periods are payable. For purposes of the table above, it is assumed that each executive’s employment terminated on December 31, 2024 and, therefore, the table includes the full 2024 bonus amounts. (4)We have estimated the amounts due for 18 months of medical, dental and vision benefits based on our monthly COBRA continuation rates.
Potential Payments Upon Termination or Change in Control
| 54 | |
CEO Pay Ratio
CEO Pay Ratio For our 2024 CEO Pay Ratio disclosure, we calculated our median employee as of the December 31, 2023 payroll using our entire employee population. The compensation data we used to determine our median employee was the same as that used in the summary compensation table for our named executive officers, including our CEO. We annualized the salary of full-time employees hired during the year and the salary of part-time permanent employees hired during the year was annualized at their part-time rate. For 2025, we used the same median employee as used for 2024 as there have been no material changes in our employee population or employee compensation arrangements that we believe would result in a significant change to the pay ratio. Based on this methodology, the total compensation of our median employee was $57,060, the total compensation of our CEO was $2,048,666 and the ratio of this to our median employee total compensation was approximately 36:1.
CEO Pay Ratio
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Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, we are providing the following disclosure regarding the relationship between executive compensation actually paid (as determined under Securities and Exchange Commission rules) to our named executive officers ("NEOs") and certain financial performance of the Company for the fiscal years listed below.
Pay Versus Performance
| Year | Summary Compensation Table Total for CEO(6) | Compensation Actually Paid to CEO | Average Summary Compensation Table Total for Non-CEO Named Executive Officers(7) | Average Compensation Actually Paid to Non-CEO Named Executive Officers | Value of Initial Fixed $100 Investment Based on: | | Net Income | 3 Year Diluted Earnings Per Share Growth | | | | | | | | Total Shareholder Return | Peer Group Total Shareholder Return(8) | | | | | 2024(1) | $2,048,666 | $567,465 | $909,839 | $325,849 | $160.24 | $132.60 | $93,478,188 | | (0.99%) | | 2023(2) | 2,050,626 | (854,147) | 869,035 | (158,823) | 147.44 | 96.65 | 93,766,695 | | 3.42% | | 2022(3)(4) | 2,259,393 | 1,409,519 | 931,885 | 622,052 | 159.87 | 97.52 | 103,817,138 | | 6.13% | | 2021(5) | 1,919,909 | 3,544,175 | 798,633 | 1,413,929 | 171.90 | 124.06 | 95,732,847 | | 6.11% | | 2020(6) | 1,658,750 | (95,717) | 688,981 | 82,264 | 112.55 | 89.69 | 84,337,021 | | 13.96% |
Pay Versus Performance
(1)The awards for the 2024-2026 performance period has an estimated payout at 56%. The awards for the 2023-2025 performance period has an estimated payout at 25%. The awards for the 2022-2024 performance period paid out at 63%. (2)The awards for the 2023-2025 performance period has an estimated payout at 25%. The awards for the 2022-2024 performance period has an estimated payout at 63%. The awards for the 2021-2023 performance period paid out at 118%. (3)The awards for the 2022-2024, 2023-2025 and 2024-2026 performance periods are 75% performance-based and 25% time-based. (4)The awards for the 2022-2024 performance period has an estimated payout at 120%. The awards for the 2021-2023 performance period has an estimated payout at 143%. The awards for the 2020-2022 performance period paid out at 118%. (5)The awards for the 2021-2023 performance period has an estimated payout at 141%. The awards for the 2020-2022 performance period has an estimated payout at 106%. The awards for the 2019-2021 performance period paid out at 66%. (6)The CEO in years 2020 through 2024 was Mr. Findlay. (7)The Non-CEO NEOs in 2024 and 2023 were Ms. Pruitt, Ms. O'Neill, Mr. Ottinger and Mr. Donovan. The Non-CEO NEOs in 2022, 2021 and 2020 were Ms. Pruitt, Ms. O'Neill, Mr. Ottinger and Mr. Gavin. (8)The peer group used is the KBW NASDAQ Bank Index. The following table reconciles the Summary Compensation Table to the Pay Versus Performance Table above.
Pay Versus Performance
| | CEO | | | | | | Year | 2020 | 2021 | 2022 | 2023 | 2024 | | Summary Compensation Table Total Compensation | $1,658,750 | $1,919,909 | $2,259,393 | $2,050,626 | $2,048,666 | | Less Grant Date Fair Value of Stock Awards in Fiscal Year | (711,040) | (905,600) | (1,221,280) | (1,066,080) | (945,120) | | Add Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | 32,304 | 1,222,963 | (460,518) | (825,386) | 186,132 | | Add Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | (690,163) | 1,129,303 | 300,530 | (865,854) | (286,858) | | Add Change in Fair Value as of Stock Awards Granted in Prior Fiscal Years for which Applicable Vesting Conditions were Satisfied during Fiscal Year | (385,568) | 177,600 | 531,394 | (147,453) | (435,355) | | Compensation Actually Paid | (95,717) | 3,544,175 | 1,409,519 | (854,147) | 567,465 |
Pay Versus Performance
| 2025 PROXY STATEMENT | 57 |
Pay Versus Performance
| | Non-CEO Named Executive Officers | | | | | | Year | 2020 | 2021 | 2022 | 2023 | 2024 | | Summary Compensation Table Total Compensation | $688,981 | $798,633 | $931,885 | $869,035 | $909,839 | | Less Grant Date Fair Value of Stock Awards in Fiscal Year | (264,418) | (345,260) | (465,613) | (414,269) | (399,461) | | Add Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | 15,855 | 471,168 | (175,573) | (293,665) | 103,889 | | Add Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | (247,045) | 421,596 | 127,129 | (279,733) | (131,622) | | Add Change in Fair Value as of Stock Awards Granted in Prior Fiscal Years for which Applicable Vesting Conditions were Satisfied during Fiscal Year | (111,109) | 67,792 | 204,224 | (40,191) | (156,796) | | Compensation Actually Paid | 82,264 | 1,413,929 | 622,052 | (158,823) | 325,849 |
Limits on Outside Director Compensation
Limits on Outside Director Compensation The 2025 Equity Incentive Plan provides for annual limits on the amount of equity-based compensation that can be awarded to non-employee directors.
Limits on Outside Director Compensation
| 2025 PROXY STATEMENT | 63 |