DEF 14A of Enterprise Financial Services Corp, Mar 19, 2024

DEF 14A of Enterprise Financial Services Corp

Filed Mar 19, 2024 · FY20230001025835-24-000023

Open on EDGAR

  1. PROPOSAL 1. ELECTION OF DIRECTORS

    PROPOSAL 1. ELECTION OF DIRECTORS The Board, upon recommendation of its Nominating and Governance Committee, has nominated for election the 14 persons named below, each to hold office until the next annual meeting of shareholders or until their successors are elected and have qualified. It is intended that proxies solicited will be voted for such nominees. There is no cumulative voting for our directors. The Board believes that each nominee named below will be able to serve, but should any nominee be unable to serve as a director, the persons named in the proxies have advised that they will vote for the election of such substitute nominee as the Board may propose. Under our mandatory retirement policy, a director is generally required to retire at the next annual meeting of shareholders after the later of: reaching age 72 or the fourth anniversary of the director’s initial election to the Board, and may not stand for election or re-election thereafter. However, a director need not retire and may stand for re-election if the Board, by unanimous vote, approves a waiver for such director, provided that any such waiver must be renewed annually and no waiver will be made or renewed for any director after reaching the age of 75. The following biographical information is furnished with respect to each member of the Board, whom also serve as directors and officers (with respect to James B. Lally) of one or more of the Company’s subsidiaries, including Enterprise Bank & Trust (the “Bank” or “EB&T”). In connection with election of the Board nominees to the Company's Board, these nominees will also be elected to the board of directors of the Bank. There are no family relationships between or among any directors or executive officers, or nominees thereof, of the Company. Except as noted in the director biographies below, none of the Company’s directors or executive officers serves as a director of (i) any company other than EFSC that has a class of securities registered under or that is subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or (ii) any investment company registered under the Investment Company Act of 1940, as amended. Other than Mr. Lally, all of our director nominees have been determined to be independent as defined in Nasdaq Rule 5605(a)(2). In some cases, the relationships that we analyzed include relationships that a director has as a partner, member, shareholder, officer or employee of an organization that has a relationship with the Company. They may also include relationships where a family member of a director is a partner, member, shareholder or officer of an organization that is a competitor of, or has a relationship with, the Company.

  2. PROPOSAL 1. ELECTION OF DIRECTORS

    | Name of Nominee | Age | Director Since | | Lyne B. Andrich | 57 | 2022 | | Michael A. DeCola | 70 | 2007 | | Robert E. Guest, Jr. | 69 | 2002 | | James M. Havel | 69 | 2014 | | Michael R. Holmes | 65 | 2015 | | Nevada A. Kent, IV | 68 | 2017 | | James B. Lally | 56 | 2017 | | Marcela Manjarrez | 50 | 2022 | | Stephen P. Marsh | 68 | 2022 | | Daniel A. Rodrigues | 68 | 2022 | | Richard M. Sanborn | 61 | 2020 | | Eloise E. Schmitz | 59 | 2017 | | Sandra A. Van Trease | 63 | 2005 | | Lina A. Young | 59 | 2022 |

  3. PROPOSAL 1. ELECTION OF DIRECTORS

    The biographies of the director nominees below contain information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experience, qualifications, attributes or skills that caused the Nominating and Governance Committee and the Board to determine that the person should serve as a director. Lyne B. Andrich served as Executive Vice President and Chief Financial Officer of CoBiz Financial Inc. (Nasdaq: COBZ) from May 2003 to January 2019, Chief Operating Officer from December 2017 to January 2019 and Controller from May 1997 to May 2003. Ms. Andrich has served on the Board of Directors and as a member of the Audit Committee of Fortis Bancorp (formerly known as Fortis Financial Inc.) (a privately held company) since May 2019, the Chairperson since May 2020 and member of the Compensation Committee since January 2023. She has previously served as a member of the Board of Governors for the Denver Zoological Foundation from June 2009 to December 2022 and served as its Chair of the Audit and Finance Committee. Ms. Andrich previously served on the Board of Directors and as a member of the Audit Committee of Whiting Petroleum, Inc. (NYSE: WLL) from September 2019 to August 2020, and served as an advisory board member for the Federal Reserve Bank of Kansas City’s Community Depository Institutions Advisory Council from 2016 through 2018. She brings to the Board extensive banking, financial, auditing, and public company experience. Michael A. DeCola served as Vice Chairman of HBM Holdings Company (“HBM”) from February 2019 through December 2019. Mr. DeCola was the Chief Executive Officer of HBM from January 2014 to February 2019 (President and Chief Executive Officer from January 2014 through September 2018). Mr. DeCola served as Chairperson of the Board of Mississippi Lime Company, a portfolio company of HBM from January 2014 through December 2019. Mr. DeCola was previously the Chairperson of the St. Louis Regional Business Council and is the former Chairperson of the United Way of Greater St. Louis and a member of the Executive Committee. Mr. DeCola serves on the advisory board of several private, family-owned businesses. He brings to the Board extensive executive management experience and connections within the St. Louis business community. Robert E. Guest, Jr. was a partner at the Affinity Law Group from November 2007 to April 2023. Mr. Guest brings significant legal experience in commercial activities and in merger and acquisitions. Mr. Guest has over forty years of legal experience and practices in the areas of business growth, mergers and acquisitions, mezzanine debt and capital market financing. Mr. Guest serves on the Board of Directors of the St. Louis Aquarium Foundation and advises private and family-owned businesses on properly installing advisory or fiduciary boards. Bob received his Bachelor of Science degree in accounting from Missouri State University and his Juris Doctor from the University of Missouri at Columbia School of Law. Mr. Guest brings significant experience in legal risk management and strategic business planning to the Board. James M. Havel has served as the Executive Vice President and Chief Financial Officer at Clayco since March 2019. Previously, he served as Executive Vice President and Chief Financial Officer of Express Scripts Holding Company (Nasdaq: ESRX) from October 2017 through January 2019. Mr. Havel currently serves on the board of directors of Carestream Dental. From April 2016 through November 2016, Mr. Havel served as Chief Operating Officer of Vatterott Education Centers, a privately-held post-secondary trade school. From January 2015 through March 2016, Mr. Havel served as a financial executive with Express Scripts Holding Company. From April 2011 through December 2014, Mr. Havel served as the Chief Financial Officer of Major Brands Holdings. Prior to July 2010, Mr. Havel was a partner with Ernst & Young LLP. Mr. Havel has also previously advised public and private companies on acquisitions and strategic planning in connection with independent consulting work. Mr. Havel brings extensive financial experience in both public and private company environments to the Board as well as a public accounting background that provides him with insight into the broad range of businesses and industries the Company serves. Michael R. Holmes has served as Chairperson Emeritus of the Board for Rx Outreach, Inc., since May 2020, having previously served as Chairperson of the Board of Rx Outreach, Inc. since February 2016. Rx Outreach, Inc. is a non-profit pharmacy that dispenses more than 30,000 months of medicine each week to low income individuals across the United States. Previously, he served as President of Rx Outreach, Inc. from October 2010 through January 2016. Prior to that, he served as Executive Vice President of Express Scripts from December 2005 through October 2010, responsible for Corporate Strategy, Research and Clinical Services, Human Resources, Corporate Real Estate, Security, Procurement, and all of its domestic subsidiary businesses. Mr. Holmes has broad public company senior management experience as well as consumer, financial and investment expertise. Mr. Holmes also brings to the Board a valuable perspective on community engagement and underserved markets. Nevada A. Kent, IV served as an Adjunct Professor of Accounting at Washington University from August 2012 to May 2020. Previously, Mr. Kent worked with Pricewaterhouse Coopers, LLP as Market Managing Partner from July 2004 through June 2012, and Partner from August 1977 through June 2004, performing audit engagements, merger and acquisition engagements, litigation support, and security offerings. Mr. Kent also serves on a number of non-public boards and has over 35 years of auditing experience, including involvement in supervisor roles. He brings his extensive finance and accounting insight to the Board. James B. Lally joined the Company in 2003 as senior vice president and was named president of the Bank’s Clayton unit in 2008. In 2011, he was appointed President of the St. Louis region and three years later assumed responsibility for commercial banking in all regions. In May 2016, Mr. Lally was named Executive Vice President of EFSC, with responsibility for the Company’s wealth management, private banking and mortgage businesses, as well as its community development entity. Mr. Lally was named President of EFSC in August 2016 and subsequently became EFSC CEO in May 2017. Prior to EFSC, Mr. Lally served in various commercial banking roles for US Bank and Commerce Bank in St. Louis. Mr. Lally has over 30 years of public banking experience. Mr. Lally brings to the Board his deep knowledge of the financial services industry, the Company and its business. Marcela Manjarrez has served as Chief Executive Officer of M Strategic Communications Consulting since September 2022. Previously, Ms. Manjarrez served as Executive Vice President, Chief Communications Officer of Centene Corporation (NYSE: CNC) from March 2015 to May 2022. From June 2014 to March 2015, Ms. Manjarrez served as Vice President, Public Affairs for the Federal Reserve Bank of St. Louis. Ms. Manjarrez currently serves on the Board of Directors of Clayco as well as a number of charitable organizations, including St. Louis Symphony Orchestra, Opera Theatre of St. Louis, National Alliance for Hispanic Health and Counterpublic. Additionally, Ms. Manjarrez serves as an advisory board member for Washington University in St. Louis’ Center for Finance and Accounting Research. Ms. Manjarrez brings to the Board her extensive experience in communications.

  4. PROPOSAL 1. ELECTION OF DIRECTORS

    Stephen P. Marsh served as Chairperson of the Company’s bank subsidiary, Enterprise Bank & Trust (“EB&T”), from 2008 to 2022 and as a member of EB&T’s Board of Directors since 2008. Mr. Marsh previously served as the Executive Vice President, Chairman and Chief Executive Officer of EB&T from 2008 until 2014; and Executive Vice President, Chairman and Chief Credit Officer from 2014 until his retirement in April 2016. Mr. Marsh also served as the President of EB&T from 2006 to 2008 and President of Commercial Banking at EB&T from 2003 to 2006. Prior to joining EB&T, Mr. Marsh served as president and senior loan officer of Southwest Bank from 1992 to 2003. Mr. Marsh serves on the board of directors and Finance Committee of Loyola Academy and previously served on the board of St. Joseph’s Institute for the Deaf, Unity Health Services and the University City Planning Commission. Mr. Marsh brings to the Board his deep level of understanding of the financial services industry combined with his risk management experience in the areas of credit management and regulatory compliance. Daniel A. Rodrigues has served as executive partner at Hidden Creek Equity since February 2019. Mr. Rodrigues has also served as a member of EB&T’s Board of Directors since May 2016. Previously, Mr. Rodrigues served as the vice president and general manager of KLX Aerospace Solutions from May 2016 to April 2017. Mr. Rodrigues also previously served as chief operating officer for Herndon Products, Inc. from January 2008 to May 2016. Mr. Rodrigues also serves as executive Chairperson at JGB Enterprises, Inc. and serves on the Dean’s Advisory Board of Parks College. Mr. Rodrigues brings to the Board his extensive experience in operations and technology as well of his deep knowledge of EB&T. Richard M. Sanborn served as a Director, President, and Chief Executive Officer of Seacoast Commerce Banc Holdings (“Seacoast”) (OTC: SCBH) and Seacoast Commerce Bank from October 2007 until it was acquired by the Company in November 2020. Mr. Sanborn previously served on the board of the Federal Reserve Bank of San Francisco, is the past Chair of the Federal Reserve Banks Community Depository Institution Advisory Council, a past Chair of the California Bankers Association, a past member of the American Bankers Association Government Relations Council, a past member of the Independent Community Bankers Association Lending Advisory Committee, and is a current member of the National Association of Corporate Directors. Mr. Sanborn has a B.S. in Accounting from Bentley University and a M.B.A. from California Pacific University. He brings deep knowledge of the banking industry and prior management and leadership experience of another financial institution to the Board. Eloise E. Schmitz has been the chief executive officer and co-founder since 2013 of LoanNEX in St. Louis, Missouri, a residential mortgage SaaS platform serving mortgage originators and investors. She is also owner and partner of Adreon Investments, an investment partnership in independent restaurants in the St. Louis area. Previously, Ms. Schmitz was executive vice president and chief financial officer of Charter Communications, Inc. (Nasdaq: CHTR). She also has extensive corporate banking experience, having served at the former Mercantile Bank in St. Louis (now US Bank) and the former First Union National Bank in Charlotte, NC (now Wells Fargo). Ms. Schmitz has previously served on several non-public boards including the Board of Trustees for Villa Duchesne Oak Hill in St. Louis, the Advisory Board to Palace Capital Management, LLC, the H. Sophie Newcomb College Institute Director Advisory Council, and the Advisory Board of Women in Cable Television. Ms. Schmitz is a graduate of Tulane University. Ms. Schmitz brings her extensive experience in corporate banking and financial analysis to the Board. Sandra A. Van Trease served as the Group President of BJC HealthCare, the largest healthcare institution in the St. Louis area, from 2004 through July 2020. Ms. Van Trease was President and Chief Executive Officer at UNICARE, an operating unit of Well Point Inc., a health insurance company, from 2002 through 2004. As an executive of RightChoice (NYSE: RIT) a health insurance company, from 1994 to 2002, she served as its President, Chief Financial Officer and Chief Operating Officer from 2000 through 2002. Ms. Van Trease previously served on the board of directors of Peabody Energy (NYSE: BTU) where she also served as a Chair of their Audit Committee and Chair of the Health, Safety, Security and Environmental Committee. Ms. Van Trease serves as a director of QuikTrip Corporation (a privately held company) and a member of their Audit Committee since June 2022, a director of Drury Development Corporation (a privately held company) and a member of their Audit Committee as well as a director for the University of Health Sciences and Pharmacy (formerly known as the St. Louis College of Pharmacy), and previously served as a director for Vizient Mid-America and the National Association of ACO’s, in addition to several community organizations. Ms. Van Trease has a MBA and is a non-practicing Certified Public Accountant and Certified Management Accountant. Ms. Van Trease brings her executive management experience and knowledge of publicly-traded company boards as well as strong community service experience to the Board. Lina A. Young served as Senior Vice President, Chief Information Officer of Peabody Energy (NYSE: BTU) from July 2010 to August 2021. Ms. Young served on a number of non-profit boards, including the Regional Board of Npower, which creates pathways to economic prosperity by launching digital careers for military veterans and young adults from underserved communities, from 2015 through 2019. Ms. Young has served on the Board of ABC to CEO, a non-profit organization preparing the next generation of young women for leadership roles in the C-suite, since February 2023. Ms. Young holds a Bachelor’s degree in Computer Science from Tulane School of Engineering, a Master’s degree in Information Management and a Master’s degree in Telecommunications from Washington University School of Engineering and Applied Science. Ms. Young brings to the Board deep experience in information technology and knowledge of cyber security risks.

  5. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The following table sets forth compensation paid to each of the Company’s non-employee directors during 2023.

  6. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash (a) | Stock Awards (b) | All Other Compensation (c) | Total Annual Compensation | | Lyne B. Andrich | $67,056 | $64,444 | $— | $131,500 | | Michael A. DeCola | 29 | 186,721 | — | 186,750 | | Robert E. Guest, Jr. | 77,052 | 63,948 | — | 141,000 | | James M. Havel | 57 | 136,943 | — | 137,000 | | Michael R. Holmes | 74,052 | 63,948 | — | 138,000 | | Nevada A. Kent, IV | 78,524 | 65,476 | — | 144,000 | | Marcela Manjarrez | 64,031 | 61,469 | — | 125,500 | | Stephen P. Marsh | 63,296 | 63,204 | 400 | 126,900 | | Daniel A. Rodrigues | 66,952 | 66,798 | — | 133,750 | | Richard M. Sanborn | 62,056 | 64,444 | — | 126,500 | | Eloise E. Schmitz | 66,280 | 66,220 | — | 132,500 | | Sandra A. Van Trease | 32 | 148,468 | — | 148,500 | | Lina A. Young | 66,552 | 63,948 | — | 130,500 | | (a) Includes fractional shares paid in cash. | | | | | | (b) The amounts shown in this column represent the grant date fair value, computed in accordance with Financial Accounting Standards Board Codification Topic 718, Compensation-Stock Compensation (“ASC 718”). For more information, please refer to Note 15 – Shareholders’ Equity and Compensation Plans included in the Company’s 2023 Consolidated Financial Statements on Form 10-K filed with the Securities and Exchange Commission on February 26, 2024. | | | | | | (c) Includes fees for advisory board meetings. | | | | |

  7. DIRECTOR COMPENSATION

    In 2023, non-employee directors received a $110,000 annual retainer, except for Mr. DeCola who received a $180,000 retainer for his service as Chairperson of the Board and Executive Committee. Annual retainers are paid in July of each year for the upcoming 12-month period. For committee service, the Chairpersons received an additional retainer as follows: Audit and Risk Committees - $18,000 for each committee, and Compensation and Nominating and Governance Committees - $15,000 for each committee. Non-Chairperson committee members received a retainer for Audit and Risk Committees of $7,500 for each committee and for Compensation and Nominating and Governance Committees of $5,000 for each committee. For January 2023 - June 2023, directors received $1,250 per board meeting attended and non-chairperson committee members received $1,000 per committee meeting attended. Non-employee directors receive a minimum of $60,000 of their retainer in shares of EFSC common stock unless a non-employee director elects to receive 100% of such director’s retainer fees in shares. Any election to receive 100% of the retainer fees in shares will remain in effect until revoked by the non-employee director. The number of shares received by the non-employee director depends on the fair market value of the Company’s common stock on the date of grant. Shares are granted on the date that the cash retainer or meeting fees would otherwise have been paid. Shares are fully vested upon grant.

  8. COMPENSATION DISCUSSION AND ANALYSIS

    Principles. Our compensation philosophy is to provide competitive compensation that rewards executives for performance and management of risk. We develop and administer compensation programs consistent with the following principles: •Compensation will include a substantial performance-based component which is: ◦based on clearly defined goals; ◦aligned with measurable business results, appropriate risk management and increase in shareholder value; and ◦linked to successful implementation of our business plan. •Compensation is designed to attract, motivate and retain top talent. •Compensation will be fair and market competitive. Executive Compensation at a Glance. 2023 Say on Pay Vote Results: 80% approval of compensation program Pay “At Risk”: 75% of CEO’s total compensation was variable; average of 65% variable compensation for all other NEOs 2023 Short-Term Incentive Plan (“STIP”) Payments: •The 2023 STIP metrics and weightings were unchanged from the 2022 STIP. The metrics and weightings were: ◦40% earnings per share (“EPS”) ◦20% return on average tangible common equity (“ROATCE”) ◦15% loan growth ◦10% ratio of nonperforming assets to total assets Long-Term Incentive Plan (“LTIP”) for NEOs: •60% performance-based restricted stock units (“RSUs”); •25% non-qualified stock options; and •15% time-based RSUs. 2023 Payout Results: •STIP payments for the NEOs, excluding discretionary amounts, were paid in the range of 105-109% of target. •LTIP awards for the 2021-2023 performance period resulted in performance awards at 169% of target. •Discretionary bonuses were paid to the NEOs for the Company’s financial and operational performance in a challenging environment.

  9. COMPENSATION DISCUSSION AND ANALYSIS

    | | What we do: | | What we don’t do: | | ✓ | Align short and long-term incentive plan targets with business goals and shareholder interests | ✓ | Provide Section 280G gross-up payments | | ✓ | Conduct annual say on pay advisory vote | ✓ | Reward executives for taking excessive, inappropriate or unnecessary risk | | ✓ | Conduct shareholder outreach | ✓ | Allow repricing or backdating of equity awards | | ✓ | Retain an independent compensation consultant to advise our Compensation Committee | ✓ | Spring-load equity awards | | ✓ | Use performance metrics that compare our performance to external benchmarks | ✓ | Provide multi-year guaranteed salary increases or guaranteed bonuses | | ✓ | Maintain insider trading policy | ✓ | Rely exclusively on shareholder return as our only performance metric | | ✓ | Maintain clawback policy that applies to NEOs and other executives | ✓ | Award incentives for below-threshold performance | | ✓ | Maintain a stock ownership policy for executive officers | ✓ | Pay dividends on unearned or unvested equity awards | | ✓ | Reevaluate and update the composition of our peer group regularly | ✓ | Permit hedging and pledging (unless preapproved) of our stock by executives | | ✓ | Limit vesting of performance-based RSUs in the event the results of a total shareholder return performance metric are negative | ✓ | Have single trigger vesting on our equity-based compensation awards |

  10. COMPENSATION DISCUSSION AND ANALYSIS

    | Name | Base Salary (1) | Bonus (2) | Short-term Annual Incentive Compensation (3) | Long-term Incentive Compensation (4) | NEO Perquisites (5) | Total | | James B. Lally | 25% | 4% | 21% | 49% | 1% | 100% | | Keene S. Turner | 32% | 4% | 20% | 43% | 1% | 100% | | Scott R. Goodman | 35% | 4% | 19% | 39% | 3% | 100% | | Douglas N. Bauche | 37% | 4% | 18% | 36% | 5% | 100% | | Mark G. Ponder | 36% | 8% | 18% | 35% | 3% | 100% |

  11. Overview of the Compensation Process

    Overview of the Compensation Process The Committee administers the Company’s executive compensation programs under the authority of its charter approved by the Board. The Committee has responsibility for establishing, implementing and monitoring compliance with the Company’s compensation philosophy. The Committee has overall responsibility relating to compensation for the officers and other employees of the company. Other than with respect to Named Executive Officers and other executive officers, the Committee delegates certain of those functions to management. In the case of Named Executive Officers and other executive officers, the Committee establishes and reviews base salaries, short-term incentives, and long-term incentives, including measurement metrics and goals. With respect to executives below this level, the Committee reviews management’s recommendations with respect to these matters. In the case of our non-executive employees, the Committee reviews, approves, and monitors overall compensation practices. The Committee retains oversight over compensation programs that are delegated to management, including evaluating compensation structure and practices to determine that they do not encourage inappropriate risk to the Company. Performance Reviews. The Executive Committee is responsible for overseeing and delivering the annual performance review of the Chief Executive Officer. This review is based on the financial performance of the Company, the change in shareholder value, growth in the human capital of the organization, effective succession planning, leading the organization’s culture, the Company’s overall management of risk, and development and execution of our strategy. The Executive Committee meets and reviews the overall assessment of the Chief Executive Officer without the Chief Executive Officer being present. The Executive Committee reports the Chief Executive Officer’s rating to the Compensation Committee. Our Chief Executive Officer conducts and approves performance evaluations for the other Named Executive Officers and shares the evaluations with the Compensation Committee. A Compensation Committee member presents the Committee’s decisions for compensation of each Named Executive Officer to the full Board. Compensation Consultant. The Committee has the authority to directly engage the services of a Compensation consultant or other advisors. Willis Towers Watson (“WTW”) was retained by the Committee to serve as the Company’s independent compensation consultant for 2023. In connection with the 2023 retention, the Committee assessed WTW’s independence, considering the factors set forth in Nasdaq Rule 5605(d)(3) regarding compensation advisor independence, consistent with the Committee’s Charter. The Committee did not find any conflict of interest with respect to WTW in 2023. WTW’s work for the Committee in 2023 included: (i) presentation of market competitive data for purposes of the Committee’s analysis of the Company’s compensation for executive officers; (ii) providing business and technical advice on executive compensation matters, including short-term and long-term incentive compensation and recent trends; (iii) pay for performance and shareholder meeting analysis; (iv) review of nonemployee director compensation; (v) an assessment of the Company’s peer group used for compensation purposes; and (vi) updates on regulatory changes. Comparisons to Peer Group. The Committee uses competitive data to compare its compensation levels to a group of peer companies with respect to the following elements of compensation for Named Executive Officers: •Base salary; •Short-term annual incentives; •Equity compensation elements such as performance contingent grants of stock; and •Other elements that to date have been reported publicly under SEC rules. The Committee selects the peer group with the advice of the Company’s compensation consultant and input from management. The peer group companies were selected to reflect financial institutions of comparable asset size to the Company with operations that are comparable to the Company’s lines of business. The Committee believes that these component companies represent institutions that compete for the Company’s talent pool. The Committee does not set rigid benchmarks for compensation of Named Executive Officers. The Committee’s objective is to offer total target compensation for Named Executive Officers that is competitive with the Company’s peers considering the relative performance of the executive and the Company. The Committee evaluates the competitiveness of the Company’s executive compensation by comparisons to the peer group to be competitive and enhance retention. In 2023, our peer group consisted of the following companies:

  12. Compensation Components

    The increases align each NEO’s base compensation to a band of total compensation similar to peers. In making its determinations regarding base compensation and STIP, the Committee generally attempts to pay NEOs at approximately the 50th percentile for target levels of performance. The Committee generally prefers that LTIP opportunities are targeted in a manner such that total direct compensation will fall between the 50th and 75th percentile of the Company’s peers at target level of performance in order to retain and incent high quality executives in a manner consistent with shareholder interests. Short-Term Incentive Plan. Our STIP is designed to align compensation with the Company’s and an executive’s performance in a given year. The program sets a threshold, target and exceptional level of short-term incentive awards that an NEO is eligible to earn. In the first quarter of each year, our CEO, with the input of other members of management where appropriate, presents proposed performance metrics and goals to the Committee for review and approval. The relative importance of each goal in comparison to all goals is determined, and the resulting weightings determine potential incentive payments for each goal. The Committee also references external market data to determine appropriate target levels of payments. Each NEO’s 2023 target STIP opportunity was as follows:

  13. Compensation Components

    | Named Executive Officer | STIP Target as a % of Base Salary | | James B. Lally | 80% | | Keene S. Turner | 55% | | Scott R. Goodman | 50% | | Douglas N. Bauche | 45% | | Mark G. Ponder | 45% |

  14. Compensation Components

    For performance below threshold level of any goal, there is no payment with respect to that goal. Payout for performance between the threshold, target and exceptional levels is determined using straight-line interpolation. The program provides the Committee discretion to make awards subject to a maximum. The Company’s 2023 STIP utilized five metrics and goals, consistent with our strategic plan, that were applied across all NEOs and other members of senior management. The Committee believes the metrics and goals align the interests of NEOs and other members of senior management’s incentives with the interests of the Company’s shareholders and encourage superior performance in critical areas, such as efficient operations, profitability, prudent growth and effective risk management. Following is a summary table of the STIP performance metrics and goals, and the actual results of the Company for 2023 as modified as described below the table:

  15. Compensation Components

    | Named Executive Officer | LTIP Target as a % of Base Salary | | James B. Lally | 175% | | Keene S. Turner | 120% | | Scott R. Goodman | 100% | | Douglas N. Bauche | 90% | | Mark G. Ponder | 90% |

  16. Compensation Components

    The Committee also considers external market data to determine competitive dollar levels of long-term incentive compensation and an appropriate mix between base salary, annual incentive, and long-term incentives. Grants under the LTIP include performance and time-based restricted stock units and non-qualified stock options. Performance based units vest upon achievement of performance goals during a three-year period. Time-based units and options vest in full at the end of the three-year period. The Committee has allocated a significant portion of NEO stock awards to include performance criteria. The Committee believes that stock awards with performance conditions provide more competitive equity compensation to executives and greater alignment with shareholders. In addition, granting performance-based awards with overlapping three-year performance periods incentivizes and rewards our executives for long-term Company success. Each year management makes a recommendation to the Committee for grants to Named Executive Officers other than the CEO. The Committee reviews this proposal in light of the Committee’s goals and philosophies for incentive compensation, the Company’s strategy and long-term goals, and marketplace information, including market data provided by compensation consultants. The Committee makes the final determination of the amount and structure of grants to each Named Executive Officer.

  17. Long-Term Incentive Plan Awards for 2021-2023 Performance Period

    Long-Term Incentive Plan Awards for 2021-2023 Performance Period Grants for the performance period provided for the possibility of awards at a threshold, target and exceptional level based on the Company’s performance against two financial goals: (1) TSR, and (2) PPNR. In addition, grants for Named Executive Officers have a weighting of 40% based on continued service through the end of the performance periods. The 40% based on continued service includes 25% in stock options and 15% in time-based restricted stock units. In February 2021, the Committee made the decision to replace EPS with PPNR for the 2021-2023 LTIP cycle. The Committee believed that PPNR was the better profitability measure in the pandemic environment, and considered the expected volatility associated with the adoption of the current expected credit losses methodology (CECL). The performance goals and actual outcomes for the period are set forth below:

  18. Long-Term Incentive Plan Awards for 2021-2023 Performance Period

    | 2021 - 2023 Performance Period | | | | | | | Goal | Weight | Threshold | Target | Exceptional | Actual | | TSR | 30% | 40th percentile | 60th percentile | 80th percentile | 68th percentile | | PPNR ($ in thousands) | 30% | $500,471 | $534,920 | $555,797 | $642,468 | | Continued Service | 40% | N/A | N/A | N/A | N/A | | | 100% | | | | |

  19. Long-Term Incentive Plan Awards for 2021-2023 Performance Period

    In determining actual performance against the cumulative PPNR goal, the Company excluded the merger-related positive impact from the Company’s acquisition of First Choice. The Committee believes that this adjustment is appropriate for two reasons: (i) this adjustment creates a better “apples to apples” comparison between the Company and our peer companies, most of which did not consummate an acquisition in 2021; and (ii) the effect of this merger was not contemplated at the time that the original goals were set three years ago. The cumulative effect of this adjustment was a reduction to reported PPNR of $45.8 million. This adjustment did not impact the TSR calculation. For each goal, achieving threshold performance pays at 25% of target value and achieving exceptional performance pays at 200% of target value. For performance below threshold level of any goal, there is no payment with respect to that goal. Payout for performance falling between the threshold, target and exceptional levels is determined using straight-line interpolation. Based on the Company’s actual performance during the 2021-2023 performance period, the Company awarded shares for the PPNR goal at the maximum level (200% of target) and awarded shares between target and exceptional for the TSR goal (138% of target). This resulted in performance awards at 169% of the aggregate target level. Our Named Executive Officers received the following respective awards under the LTIP, including time-based service awards, for the 2021-2023 performance period:

  20. Long-Term Incentive Plan Awards for 2021-2023 Performance Period

    | 2021-2023 LTIP Award | | | | | | | Shares of Common Stock | | | Stock Options | | Named Executive Officer | Performance Award | Service Award | Total | Service Award | | James B. Lally | 22,612 | 3,345 | 25,957 | 17,637 | | Keene S. Turner | 11,593 | 1,715 | 13,308 | 9,042 | | Scott R. Goodman | 8,051 | 1,191 | 9,242 | 6,280 | | Douglas N. Bauche | 6,064 | 897 | 6,961 | 4,730 | | Mark G. Ponder | 5,797 | 857 | 6,654 | 4,521 |

  21. Long-Term Incentive Plan Awards for 2021-2023 Performance Period

    The shares awarded were in the form of common stock.

  22. Long-Term Incentive Open Grants for 2022-2024 and 2023-2025 Performance Periods

    Long-Term Incentive Open Grants for 2022-2024 and 2023-2025 Performance Periods Long-Term Incentive Plan grants are open with respect to the 2022-2024 and 2023-2025 performance periods. Grants for Named Executive Officers are reflected in the Summary Compensation Table in the year of grant on page 29 and the Grants of Plan-Based Awards table on page 35. The LTIP grants relating to the 2022-2024 performance periods vest 30% based on TSR return goals, 30% based on EPS goals, and 40% based on continued service through the end of the performance period. LTIP grants for the 2023-2025 performance periods are the same as the 2022-2024 cycle. For both cycles, the 40% based on continued service includes 25% in stock options and 15% in time-based restricted stock units. For each performance-based goal, achieving threshold performance pays at 25% of target value and achieving exceptional performance pays at 200% of target value. For performance below threshold level of any goal, there is no payment with respect to that goal. Payout for performance falling between the threshold, target and exceptional levels is determined using straight-line interpolation. The open grants to Named Executive Officers under these LTIP grants will be paid in the form of immediately vested shares of common stock or stock options, as applicable. Named Executive Officer Perquisites. We provide perquisites and other personal benefits to Named Executive Officers that we believe are reasonable and consistent with our overall compensation program. See the “All Other Compensation - Supplemental Table” on page 30 for more information on these items. Retirement Plans. We expect executives to plan for and fund their own retirement through a defined contribution 401(k) plan that is generally available to most of the employees of the Company and a Deferred Compensation Plan that permits certain executives to defer a limited portion of salary and incentive payouts into any of several hypothetical investment alternatives. The Company has historically provided a Company match to the 401(k) plan. There are no Company contributions to the Deferred Compensation Plan. We do not maintain defined benefit retirement or supplemental executive retirement plans or provide for post-retirement benefits.

  23. Change in Control Severance Benefits

    Change in Control Severance Benefits We have entered into employment agreements with certain of our Named Executive Officers granting them “double-trigger” change in control severance benefits (i.e., the benefit is triggered if the executive experiences a qualifying termination upon a change in control of the Company), as more fully described under the heading “Executive Employment Agreements” on page 25. The Committee believes these employment agreements providing double-trigger change in control severance benefits serve the best interests of the Company and its shareholders by ensuring that, in considering any proposed change in control, the Named Executive Officers would be able to advise the Board objectively about the transaction, without being unduly influenced by personal concerns such as the loss of employment following a change in control. These arrangements are also intended to promote stability and continuity of executive management. Information on applicable payments under such employment agreements for Named Executive Officers is contained under the heading “Executive Employment Agreements” on page 25 and “Potential Payments Upon Termination or Change in Control” on page 38.

  24. Sections 280G and 4999

    Sections 280G and 4999 Our Named Executive Officers are not entitled to any tax gross-up in the event they are subject to taxes under Sections 280G or 4999 of the Code, in connection with a change in control.

  25. EXECUTIVE EMPLOYMENT AGREEMENTS

    EXECUTIVE EMPLOYMENT AGREEMENTS

  26. Executive Employment Agreement with Mr. Lally

    Executive Employment Agreement with Mr. Lally Effective May 2, 2017, the Company entered into an Executive Employment Agreement with Mr. Lally. The agreement provides for his continuous employment until the agreement is terminated in accordance with its provisions. The agreement provides Mr. Lally with severance compensation in the event of his termination under certain circumstances. The agreement contains restrictive covenants prohibiting Mr. Lally from competing with the Company during the term of his employment and for a period of either (i) 24 months following either an involuntary termination by the Company without Cause or a voluntary termination by Mr. Lally for Good Reason; or (ii) 12 months following any other terminations (the “Restricted Period”). The Employment Agreement also prohibits Mr. Lally from soliciting employees and certain customers of the Company or any of its affiliates during the Restricted Period. In addition, confidentiality provisions in the Employment Agreement prohibit the use or disclosure of confidential information. The Company and Mr. Lally entered into an amendment to Mr. Lally’s agreement effective August 4, 2023. Under the amendment, if Mr. Lally’s employment is terminated by the Company without “Cause” or by Mr. Lally for “Good Reason” as defined in the agreement, he will be entitled to severance compensation, paid over the course of two (2) years, equal to two (2) years of base salary and an amount equal to two times the greater of (x) the average of the actual cash bonuses paid to Mr. Lally under the Company’s short-term incentive plan (the “STIP”) with respect to the two (2) fiscal years preceding the date of Mr. Lally’s termination of employment, and (y) the cash target incentive under the STIP for the year of Mr. Lally’s termination of employment as though all “target levels” of performance for such year are completely achieved. Mr. Lally would also be entitled to two years of continued medical benefits. If Mr. Lally is terminated without Cause or if he voluntarily terminates his employment for Good Reason in connection with a Change in Control (a “Change in Control Termination”), Mr. Lally will be entitled to (i) a lump sum cash payment equal to thirty-six (36) months of base salary, (ii) a lump sum cash payment equal to three (3) times the greater of (x) the average of the actual cash bonuses paid to Mr. Lally under the Company’s STIP with respect to the two (2) fiscal years preceding the date of Mr. Lally’s termination of employment, and (y) the cash target incentive under the STIP for the year of Mr. Lally’s termination of employment as though all “target levels” of performance for such year are completely achieved, (iii) a pro-rated short-term incentive award for the year in which Mr. Lally’s termination of employment occurs, (iv) continued medical benefits for a period of eighteen (18) months following Mr. Lally’s termination of employment, and (v) a lump sum cash payment equal to the value of an additional eighteen (18) months of continuation of medical benefits. In addition, if Mr. Lally experiences a Change in Control Termination, his performance-based equity awards will vest at the greater of target level or the level that corresponds to the Company’s actual performance as of the date of Mr. Lally’s termination of employment. The amendment further expands the geographic scope of Mr. Lally’s non-competition covenant to reflect the expansion of the Company’s operating territory since his original employment agreement was executed. A “Change in Control” is defined as the first to occur of any of the following events: (i) any person, other than one or more of the directors of the Company on the effective date of the agreement or any person that any such director controls, becomes the beneficial owner of 50% of more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors of the Company (the “Company Outstanding Voting Securities); (ii) any person becomes the beneficial owner of 50% or more of the combined voting power of the then outstanding voting securities of the Bank entitled to vote generally in the election of directors of the Bank; (iii) consummation of a reorganization, merger or consolidation (a “Business Combination”) of the Company, unless, in each case, following such Business Combination (a) all or substantially all of the Persons who were the beneficial owners, respectively, of the Company Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, a voting securities entitled to vote generally in the election of directors of the Company resulting from such Business Combination, (b) no person (excluding any company resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company resulting from such Business Combination except to the extent such ownership existed prior to the Business Combination, and (c) at least a majority of the members of the Company Board resulting from the Business Combination are Continuing Directors (as defined in the agreement) at the time of the execution of the definitive agreement, or the action of the Company Board, providing for such Business Combination; (iv) consummation of the sale, other than in the ordinary course of business, of substantially all of the combined assets of the Company and its subsidiaries in a transaction or series of related transactions during the course of any twelve-month period; or (v) the date on which Continuing Directors (as defined in the agreement) cease for any reason to constitute at least a majority of the Company Board. In the event that any payments Mr. Lally would receive in connection with a change in control would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (“Section 280G”), such payments will be reduced to the extent that such reduction would cause Mr. Lally’s net after-tax benefit to be greater than the net after-tax benefit he would have received had the Company paid the full amount of the transaction payments. Upon any other termination, disability or death, neither Mr. Lally nor his estate will be entitled to any severance compensation.

  27. Executive Employment Agreement with Mr. Turner

    Executive Employment Agreement with Mr. Turner Effective September 13, 2013, and as amended on February 27, 2015, and October 29, 2015, the Company entered into an Executive Employment Agreement with Mr. Turner. Mr. Turner’s agreement, as amended, provides for a continuous term until the agreement is terminated in accordance with its provisions. The agreement provides Mr. Turner with severance compensation in the event of his termination under certain circumstances. The agreement also has confidentiality, non-compete and non-solicitation provisions for his period of employment and for a period of one year after termination of his employment. The Company and Mr. Turner entered into an amendment to Mr. Turner’s agreement effective August 4, 2023. Under the amendment, if Mr. Turner’s employment is terminated in a “Termination Other Than for Cause,” as defined in the agreement, including any termination not by reason of Cause, disability, death, voluntary termination, or Change in Control, and “Constructive Terminations,” as defined in the agreement, he will be entitled to severance compensation equal to one year of base salary and target level bonus, paid over a period of one year. Mr. Turner would also be entitled to one year of continued medical benefits. If Mr. Turner’s employment is terminated in a “Termination Upon Change in Control” as defined in the agreement, he will be entitled to severance compensation equal to two years of base salary and bonus based on the greater of (x) the average of the actual cash bonuses paid to Mr. Turner under the STIP with respect to the two fiscal years preceding the date of his termination of employment, and (y) the cash target incentive under the STIP for the year of his termination of employment as though all “target levels” of performance for such year are completely achieved payable in a lump sum payment within 10 days after his satisfaction of the release provisions contained in the agreement. Mr. Turner would also be entitled to two years of continued medical benefits and the performance-based equity awards will vest at the greater of target level or the level that corresponds to the Company’s actual performance as of the date of Mr. Turner’s termination of employment. Change in Control is generally defined the same as in Mr. Lally’s agreement, except that it also includes the acquisition by a person or group of 30% or more of the total voting power of the stock of the Company. In the event that any payments Mr. Turner would receive in connection with a change in control would constitute “parachute payments” within the meaning of Section 280G, the amendment provides that such payments will be reduced to the extent that such reduction would cause Mr. Turner’s net after-tax benefit to be greater than the net after-tax benefit he would have received had the Company paid the full amount of the transaction payments. Upon any other termination, disability or death, neither Mr. Turner nor his estate will be entitled to any severance compensation.

  28. Executive Employment Agreement with Mr. Goodman

    Executive Employment Agreement with Mr. Goodman Effective October 11, 2013, the Company entered into an Amended and Restated Executive Employment Agreement with Mr. Goodman that replaced and superseded his original employment agreement dated January 1, 2005. The agreement provides for his continuous employment until the agreement is terminated in accordance with its provisions. The agreement provides Mr. Goodman with severance compensation in the event of his termination under certain circumstances. The agreement also has confidentiality, non-compete and non-solicitation provisions for his period of employment and for a period of one year after termination of his employment. The Company and Mr. Goodman entered into an amendment to Mr. Goodman’s agreement effective August 4, 2023. Under the amendment, if Mr. Goodman’s employment is terminated in a “Termination Other Than for Cause” as defined in the agreement, including any termination not by reason of Cause, disability, death, voluntary termination, or Change in Control, and “Constructive Terminations,” as defined in the agreement, he will be entitled to severance compensation equal to one year of base salary and target level bonus, paid in a lump sum payment on the 60th day following Mr. Goodman’s termination. Mr. Goodman would also be entitled to one year of continued medical benefits. If Mr. Goodman’s employment is terminated in a “Termination Upon a Change in Control”, he will be entitled to severance pay equal to two years of base salary plus two times the greater of (x) the average of the actual cash bonuses paid to Mr. Goodman under the STIP with respect to the two fiscal years preceding the date of his termination of employment, and (y) the cash target incentive under the STIP for the year of his termination of employment as though all “target levels” of performance for such year are completely achieved, payable in a lump sum payment within 10 days after his satisfaction of the release provisions contained in the agreement. Mr. Goodman would also be entitled to two years of continued medical benefits and the performance-based equity awards will vest at the greater of target level or the level that corresponds to the Company’s actual performance as of the date of Mr. Goodman’s termination of employment. Change in Control is generally defined the same as in Mr. Lally’s agreement. In the event that any payments Mr. Goodman would receive in connection with a change in control would constitute “parachute payments” within the meaning of Section 280G, the amendment provides that such payments will be reduced to the extent that such reduction would cause Mr. Goodman’s net after-tax benefit to be greater than the net after-tax benefit he would have received had the Company paid the full amount of the transaction payments. Upon any other termination, disability or death, neither Mr. Goodman nor his estate will be entitled to any severance compensation.

  29. Executive Employment Agreement with Mr. Bauche

    Executive Employment Agreement with Mr. Bauche Effective March 1, 2019, the Company entered into an Amended and Restated Executive Employment Agreement with Mr. Bauche that replaces and supersedes the original employment agreement dated and effective January 15, 2015. The agreement provides for his continuous employment until the agreement is terminated in accordance with its provisions. The agreement provides Mr. Bauche with severance compensation in the event of his termination under certain circumstances. The agreement also has confidentiality, non-compete and non-solicitation provisions for his period of employment and for a period of one year after termination of his employment (unless his employment is terminated without Cause or he voluntarily terminates with Good Reason (as defined in the agreement) three months prior to or 12 months following a Change in Control, in which case the non-compete and non-solicitation provisions are in effect for his period of employment and for a period of 18 months after termination of his employment). If Mr. Bauche’s employment is terminated by the Company without Cause or he voluntarily terminates his employment with Good Reason, he will be entitled to severance compensation equal to one year of base salary and target level bonus, paid over a period of one year, beginning on the first payroll after the 60th day following Mr. Bauche’s termination. Mr. Bauche will also receive continued medical benefits for a period of 12 months. Upon any other termination, disability or death, neither Mr. Bauche nor his estate will be entitled to any severance compensation. The Company and Mr. Bauche entered into an amendment to Mr. Bauche’s agreement effective August 4, 2023. Under the amendment, if Mr. Bauche’s employment is terminated by the Company without Cause or he voluntarily terminates his employment with Good Reason three months prior or 12 months following a Change in Control (which is generally defined the same as in Mr. Lally’s agreement) he will be entitled to severance compensation equal to 24 months of base salary; bonus based on two times the greater of (x) the average of the actual cash bonuses paid to Mr. Bauche under the STIP with respect to the two fiscal years preceding the date of his termination of employment, and (y) the cash target incentive under the STIP for the year of his termination of employment as though all “target levels” of performance for such year are completely achieved; and a pro-rated short-term incentive award for the year in which Mr. Bauche’s termination of employment occurs, paid in a lump sum on the 60th day following Mr. Bauche’s termination. Mr. Bauche would also be entitled to two years of continued medical benefits and the performance-based equity awards will vest at the greater of target level or the level that corresponds to the Company’s actual performance as of the date of Mr. Bauche’s termination of employment. The amendment further expands the geographic scope of Mr. Bauche’s non-competition covenant to reflect the expansion of the Company’s operating territory since his original employment agreement was executed. In the event that any payments Mr. Bauche would receive in connection with a change in control would constitute “parachute payments” within the meaning of Section 280G, such payments will be reduced to the extent that such reduction would cause Mr. Bauche’s net after-tax benefit to be greater than the net after-tax benefit he would have received had the Company paid the full amount of the transaction payments.

  30. Executive Employment Agreement with Mr. Ponder

    Executive Employment Agreement with Mr. Ponder Effective March 1, 2019, the Company entered into an Executive Employment Agreement with Mr. Ponder. The agreement provides for his continuous employment until the agreement is terminated in accordance with its provisions. The agreement provides Mr. Ponder with severance compensation in the event of his termination under certain circumstances. The agreement also has confidentiality, non-compete and non-solicitation provisions for his period of employment and for a period of one year after termination of his employment (unless his employment is terminated without Cause or he voluntarily terminates with Good Reason (as defined in the agreement) three months prior to or 12 months following a Change in Control, in which case the non-compete and non-solicitation provisions are in effect for his period of employment and for a period of 18 months after termination of his employment). If Mr. Ponder’s employment is terminated by the Company without Cause or he voluntarily terminates his employment with Good Reason, he will be entitled to severance compensation equal to one year of base salary and target level bonus, paid over a period of one year, beginning on the first payroll after the 60th day following Mr. Ponder’s termination. Mr. Ponder will also receive continued medical benefits for a period of 12 months. Upon any other termination, disability or death, neither Mr. Ponder nor his estate will be entitled to any severance compensation. The Company and Mr. Ponder entered into an amendment to Mr. Ponder’s agreement effective August 4, 2023. Under the amendment, if Mr. Ponder’s employment is terminated by the Company without Cause or he voluntarily terminates his employment with Good Reason three months prior or 12 months following a Change in Control (which is generally defined the same as in Mr. Lally’s agreement) he will be entitled to severance compensation equal to 24 months of base salary; bonus based on two times the greater of (x) the average of the actual cash bonuses paid to Mr. Ponder under the STIP with respect to the two fiscal years preceding the date of his termination of employment, and (y) the cash target incentive under the STIP for the year of his termination of employment as though all “target levels” of performance for such year are completely achieved; and a pro-rated short-term incentive award for the year in which Mr. Ponder’s termination of employment occurs, paid in a lump sum on the 60th day following Mr. Ponder’s termination. Mr. Ponder would also be entitled to two years of continued medical benefits and the performance-based equity awards will vest at the greater of target level or the level that corresponds to the Company’s actual performance as of the date of Mr. Ponder’s termination of employment. The amendment further expands the geographic scope of Mr. Ponder’s non-competition covenant to reflect the expansion of the Company’s operating territory since his original employment agreement was executed. In the event that any payments Mr. Ponder would receive in connection with a change in control would constitute “parachute payments” within the meaning of Section 280G, such payments will be reduced to the extent that such reduction would cause Mr. Ponder’s net after-tax benefit to be greater than the net after-tax benefit he would have received had the Company paid the full amount of the transaction payments.

  31. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table shows the compensation paid to the Company’s Named Executive Officers that were named as such during the years ended December 31, 2023, 2022 and 2021.

  32. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2) | Option Awards ($) (3) | Non-Equity Incentive Plan Compensation ($) (4) | All Other Compensation ($) (5) | Total ($) | | James B. Lally | 2023 | $861,443 | $150,000 | $1,272,594 | $382,804 | $736,891 | $41,706 | $3,445,438 | | President and Chief Executive Officer – EFSC; and Chief Executive Officer – EB&T | 2022 | 784,077 | — | 2,080,526 | 299,997 | 960,000 | 35,616 | 4,160,216 | | | 2021 | 697,885 | — | 777,478 | 221,873 | 719,644 | 33,186 | 2,450,066 | | Keene S. Turner | 2023 | 583,732 | 75,000 | 598,384 | 179,995 | 359,767 | 27,000 | 1,823,878 | | Senior Executive Vice President and Chief Financial Officer – EFSC and EB&T | 2022 | 500,271 | — | 1,174,587 | 146,626 | 420,750 | 25,500 | 2,267,734 | | | 2021 | 449,808 | 100,000 | 398,617 | 113,748 | 329,415 | 24,600 | 1,416,188 | | Scott R. Goodman | 2023 | 475,963 | 60,000 | 403,046 | 121,258 | 255,281 | 41,018 | 1,356,566 | | Senior Executive Vice President – EFSC and President – EB&T | 2022 | 427,924 | 30,000 | 1,024,638 | 97,874 | 326,250 | 36,008 | 1,942,694 | | | 2021 | 390,674 | 30,000 | 276,824 | 79,002 | 257,379 | 33,938 | 1,067,817 | | Douglas N. Bauche | 2023 | 415,962 | 50,000 | 317,844 | 95,617 | 201,329 | 41,226 | 1,121,978 | | Senior Executive Vice President and Chief Credit Officer –EFSC and EB&T | 2022 | 368,808 | — | 713,069 | 74,996 | 253,125 | 35,496 | 1,445,494 | | | 2021 | 335,674 | 20,000 | 208,490 | 59,503 | 196,925 | 33,186 | 853,778 | | Nicole M. Iannacone | 2022 | 357,925 | — | 706,902 | 73,003 | 246,375 | 25,500 | 1,409,705 | | Senior Executive Vice President, Chief Legal Officer and Corporate Secretary – EFSC and EB&T | 2021 | 321,539 | 55,000 | 199,287 | 56,874 | 188,237 | 24,600 | 845,537 | | Mark G. Ponder | 2023 | 400,962 | 90,000 | 306,694 | 92,245 | 201,143 | 28,386 | 1,119,430 | | Senior Executive Vice President and Chief Administrative Officer – EFSC and EB&T | | | | | | | | |

  33. SUMMARY COMPENSATION TABLE

    (1)In 2023, Messrs. Lally, Turner, Goodman and Bauche and Ponder, received bonuses of $150,000, $75,000, $60,000, $50,000 and $40,000, respectively, in connection with the Company’s financial and operational performance in a volatile economic and business environment. Additionally, in 2023 Mr. Ponder received a bonus of $50,000, in connection with his role of leading a core system conversion. In 2022, Mr. Goodman received a bonus of $30,000 in connection with the integration of the California market. In 2021, Messrs. Turner, Goodman and Bauche and Ms. Iannacone, received bonuses of $100,000, $30,000, $20,000 and $55,000, respectively, for their role in the First Choice acquisition. (2)The amounts shown in this column represent the grant date fair value, computed in accordance with ASC 718, disregarding estimates of forfeiture, of share denominated performance and service contingent grants of restricted stock units. For more information, please refer to Note 15 – Shareholders’ Equity and Compensation Plans included in the Company’s 2023 Consolidated Financial Statements on Form 10-K filed with the SEC on February 26, 2024. For performance-based awards, the grant value reflects the performance component of the grant at target and the market condition component of the grant reflects the grant date fair value derived using a Monte Carlo simulation. The maximum value of the awards granted during 2023 is $2,317,764 for Mr. Lally; $1,089,809 for Mr. Turner; $734,041 for Mr. Goodman; $578,886 for Mr. Bauche; and $558,600 for Mr. Ponder. (3)The amounts shown in the column represent the grant date fair value computed in accordance with ASC 718 of stock option grants. For more information, please refer to Note 15 – Shareholders’ Equity and Compensation Plans included in the Company’s 2023 Consolidated Financial Statements on Form 10-K filed with the SEC on February 26, 2024. (4)The amounts shown in this column constitute the STIP award earned by each NEO based on the Board’s evaluation of each Officer’s performance. These awards are discussed in further detail under the heading “Compensation Components - Short-Term Incentive Plan” in the Compensation Discussion and Analysis section above. (5)This column indicates amounts for various benefits provided to the NEOs as shown in the following supplemental table.

  34. Pay versus Performance

    Pay versus Performance Our CEO, Mr. Lally, was the Company’s principal executive officer (“PEO”) for each year. NEOs for 2023 include Messrs. Turner, Goodman, Bauche and Ponder. NEOs for 2020-2022 include Messrs. Turner, Goodman and Bauche and Ms. Iannacone. The peer group is the S&P Regional Banks Select Industry Index.

  35. Pay versus Performance

    | Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (1) | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs (1) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($000s) | Diluted Earnings Per Share | | | | | | | TSR | Peer Group TSR | | | | 2023 | $3,445,438 | $2,116,497 | $1,355,463 | $898,728 | $100 | $103 | $194,059 | $5.07 | | 2022 | $4,160,216 | $4,835,417 | $1,766,407 | $1,995,112 | $108 | $111 | $203,043 | $5.31 | | 2021 | $2,450,066 | $3,099,999 | $1,045,830 | $1,276,627 | $102 | $130 | $133,055 | $3.86 | | 2020 | $1,556,996 | $1,165,813 | $776,407 | $621,177 | $74 | $93 | $74,384 | $2.76 |

  36. Pay versus Performance

    (1) Compensation actually paid is detailed in the table below:

  37. Pay versus Performance

    | Compensation Actually Paid to PEO | | | | | | | 2023 | 2022 | 2021 | 2020 | | Total compensation in the Summary Compensation Table | $3,445,438 | $4,160,216 | $2,450,066 | $1,556,996 | | Deduction for stock award values included in the Summary Compensation Table | (1,272,594) | (2,080,526) | (777,478) | (405,101) | | Deduction for stock option values included in the Summary Compensation Table | (382,804) | (299,997) | (221,873) | — | | Addition for the fair value as of the end of the year of awards granted during the year that are outstanding and unvested at the end of the year | 1,133,826 | 2,825,436 | 1,370,239 | 311,273 | | Change in fair value as of the end of the year, from the end of the prior year, of any awards granted in any prior year that are outstanding and unvested as of the end of the year | (505,980) | 168,262 | 269,631 | (149,253) | | Change in fair value as of the vesting date, from the end of the prior year, of awards granted in a prior year that vested in the current year | (301,389) | 62,026 | 87,429 | (148,102) | | Subtraction for the prior year fair value of awards granted in a prior year that failed to meet the applicable vesting conditions during the year | — | — | (78,015) | — | | Compensation Actually Paid | $2,116,497 | $4,835,417 | $3,099,999 | $1,165,813 |

  38. Pay versus Performance

    (1) Compensation actually paid is detailed in the table below, continued:

  39. Pay versus Performance

    | Average Compensation Actually Paid to Non-PEO NEOs | | | | | | | 2023 | 2022 | 2021 | 2020 | | Total compensation in the Summary Compensation Table | $1,355,463 | $1,766,407 | $1,045,830 | $776,407 | | Deduction for stock award values included in the Summary Compensation Table | (406,492) | (904,799) | (270,804) | (141,725) | | Deduction for stock option values included in the Summary Compensation Table | (122,279) | (98,125) | (77,282) | — | | Addition for the fair value as of the end of the year of awards granted during the year that are outstanding and unvested at the end of the year | 362,170 | 1,151,323 | 477,273 | 108,899 | | Change in fair value as of the end of the year, from the end of the prior year, of any awards granted in any prior year that are outstanding and unvested as of the end of the year | (185,159) | 58,608 | 94,328 | (55,701) | | Change in fair value as of the vesting date, from the end of the prior year, of awards granted in a prior year that vested in the current year | (104,975) | 21,698 | 34,388 | (66,703) | | Subtraction for the prior year fair value of awards granted in a prior year that failed to meet the applicable vesting conditions during the year | — | — | (27,106) | — | | Compensation Actually Paid | $898,728 | $1,995,112 | $1,276,627 | $621,177 |

  40. Pay versus Performance

    Our pay for performance philosophy results in a significant portion of total compensation for the NEOs being comprised of performance-based awards with both short and long-term targets. The financial performance metrics used in the performance awards are selected by the Compensation Committee to align compensation with shareholder interests and long-term value creation, while ensuring a competitive wage as compared to our peers. This has resulted in a significant level of compensation at-risk for the NEOs. In 2023, our CEOs and other NEOs total compensation included 75% and 65%, respectively, that was at risk.

  41. Compensation Actually Paid versus Net Income

    Compensation Actually Paid versus Net Income

  42. Compensation Actually Paid versus Cumulative TSR

    Compensation Actually Paid versus Cumulative TSR

  43. Compensation Actually Paid versus EPS

    Compensation Actually Paid versus EPS Compensation actually paid to our NEOs includes the end-of-year fair value of awards granted during the year, changes in the fair value of awards granted in prior fiscal years, and other changes related to forfeited awards, as applicable. Select items that impacted compensation actually paid and our financial measures in the table and graph above include: •In 2020, the Company increased its allowance for credit losses due to the heightened risk to the economy and its customers because of the COVID-19 pandemic. The Company also completed an acquisition at the end of 2020, which increased the provision for credit losses and merger expense. These activities resulted in a decline in net income and EPS when compared to 2019. STIP payouts were above target, but below exceptional, and the three-year cumulative LTIP performance payouts were at 119% of target out of a maximum award of 200%. Equity markets were volatile in 2020 due to the pandemic and both the Company’s stock and the peer index had a negative return. The negative total shareholder return in 2020 reduced a portion of the LTIP award that uses this metric in the performance criteria to 29% of the targeted amount. •In 2021, the Company completed another acquisition that resulted in additional provision for credit losses and merger expenses for the year. The Company also closed certain branch locations and recognized a related impairment charge. In support of its customers, the Company was an active participant in the Paycheck Protection Program that generated additional interest and fee income on loans. The total shareholder return for the both the Company and the peer index rebounded in 2021 with double digit returns. STIP payouts in 2021 were above target but below exceptional levels and the three-year cumulative LTIP performance payouts were at 59% of target out of a maximum award of 200%. No LTIP shares were awarded based on the three-year cumulative total shareholder return in 2021. •In 2022, rising interest rates benefited the Company’s asset-sensitive balance sheet, resulting in an increase to net income and EPS. The Company’s total shareholder return increased in 2022, while the peer index declined. STIP payouts in 2022 were at the exceptional level and LTIP performance awards were at 132% of the aggregate target level. As noted in the compensation discussion and analysis, the NEOs also received a one-time Special Award in 2022 to increase retention. •In 2023, net interest income continued to expand due to organic growth and an increase in market interest rates. In the industry, three large regional banks failed at the beginning of the year. The rise in short-term rates and robust deposit competition after the bank failures increased deposit costs. The provision for credit losses increased from a historically low level in 2022 and noninterest expense expanded due to higher deposit servicing costs and employee compensation and benefits. The total shareholder return for both the Company and the peer index were negative in 2023 as a result of the market disruption following the bank failures. STIP payments in 2023 were below the exceptional level due to the decline in EPS in 2023 from 2022. The LTIP performance awards were at 169% of the aggregate target level and were reflective of the three-year cumulative EPS and TSR targets. The following financial measures were used by the Compensation Committee in determining executive compensation for 2023:

  44. Compensation Actually Paid versus EPS

    | Important Financial Performance Measures | | Earnings per share | | Loan growth | | Return on average tangible common equity | | Nonperforming assets to total assets |

  45. GRANTS OF PLAN-BASED AWARDS

    GRANTS OF PLAN-BASED AWARDS

  46. GRANTS OF PLAN-BASED AWARDS

    | | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (# of shares or units) (2) | | | All Other Stock Awards (# of shares or units) | All Other Option Awards (# of securities underlying options) | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards (3) | | Name | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | | | James B. Lally | 2/28/2023 | $350,000 | $700,000 | $1,050,000 | | | | | | | | | | 2/28/2023 | | | | 4,176 | 16,704 | 33,408 | 4,176 | 20,438 | $54.46 | $1,655,398 | | Keene S. Turner | 2/28/2023 | 165,000 | 330,000 | 495,000 | | | | | | | | | | 2/28/2023 | | | | 1,964 | 7,854 | 15,708 | 1,964 | 9,610 | 54.46 | 778,379 | | Scott R. Goodman | 2/28/2023 | 121,250 | 242,500 | 363,750 | | | | | | | | | | 2/28/2023 | | | | 1,323 | 5,290 | 10,580 | 1,323 | 6,474 | 54.46 | 524,304 | | Douglas N. Bauche | 2/28/2023 | 95,625 | 191,250 | 286,875 | | | | | | | | | | 2/28/2023 | | | | 1,043 | 4,172 | 8,344 | 1,043 | 5,105 | 54.46 | 413,461 | | Mark G. Ponder | 2/28/2023 | 92,250 | 184,500 | 276,750 | | | | | | | | | | 2/28/2023 | | | | 1,006 | 4,026 | 8,052 | 1,006 | 4,925 | 54.46 | 398,939 |

  47. GRANTS OF PLAN-BASED AWARDS

    (1)The material terms of the annual cash incentive awards are described in the section titled “Compensation Components - Short-Term Incentive Plan,” in the Compensation Discussion and Analysis section above. (2)The amounts shown reflect the threshold, target, and maximum incentive grants under the Amended and Restated 2018 Stock Incentive Plan. These awards are denominated in shares. If performance conditions are met, the awards will be made in shares of Company stock. For more information on these awards, see under the heading “Compensation Components - Long-Term Incentive Plan”, in the Compensation Discussion and Analysis section above. (3)The aggregate grant date fair value of the grants were computed in accordance with ASC 718. The grant value reflects the performance component of the grant at target and the market condition component of the grant reflects the grant date fair value derived using a Monte Carlo simulation. For more information, please refer to Note 15 – Shareholders’ Equity and Compensation Plans included in the Company’s 2023 Consolidated Financial Statements on Form 10-K filed with the SEC on February 26, 2024.

  48. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END The following table sets forth the outstanding equity awards as of December 31, 2023, for each NEO.

  49. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

    | | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Grant Date (1) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (2) | Market Value of Shares or Units of Stock That Have Not Vested ($) | 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 ($) (3) | | James B. Lally | — | 17,637 | $43.81 | 2/25/2021 | 2/25/2031 | | | | | | | — | 20,325 | $48.34 | 2/24/2022 | 2/24/2032 | | | | | | | — | 20,438 | $54.46 | 2/28/2023 | 2/28/2033 | | | | | | Total | — | 58,400 | | | | 31,715 | $1,416,075 | 19,420 | $867,103 | | Keene S. Turner | — | 9,042 | $43.81 | 2/25/2021 | 2/25/2031 | | | | | | | — | 9,934 | $48.34 | 2/24/2022 | 2/24/2032 | | | | | | | — | 9,610 | $54.46 | 2/28/2023 | 2/28/2033 | | | | | | Total | — | 28,586 | | | | 18,687 | $834,375 | 9,298 | $415,156 | | Scott R. Goodman | — | 6,280 | $43.81 | 2/25/2021 | 2/25/2031 | | | | | | | — | 6,631 | $48.34 | 2/24/2022 | 2/24/2032 | | | | | | | — | 6,474 | $54.46 | 2/28/2023 | 2/28/2033 | | | | | | Total | — | 19,385 | | | | 17,462 | $779,678 | 6,236 | $278,437 | | Douglas N. Bauche | — | 4,730 | $43.81 | 2/25/2021 | 2/25/2031 | | | | | | | — | 5,081 | $48.34 | 2/24/2022 | 2/24/2032 | | | | | | | — | 5,105 | $54.46 | 2/28/2023 | 2/28/2033 | | | | | | Total | — | 14,916 | | | | 11,919 | $532,183 | 4,853 | $216,686 | | Mark G. Ponder | — | 4,521 | $43.81 | 2/25/2021 | 2/25/2031 | | | | | | | — | 4,878 | $48.34 | 2/24/2022 | 2/24/2032 | | | | | | | — | 4,925 | $54.46 | 2/28/2023 | 2/28/2033 | | | | | | Total | — | 14,324 | | | | 11,846 | $528,924 | 4,671 | $208,560 |

  50. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

    (1)Options cliff vest three years after the date of grant. (2)Shares or units of stock shall vest on the following dates for each Named Executive Officer as follows: Mr. Lally: 7,983 on February 24, 2024, 3,592 on January 31, 2025, 4,176 on January 31, 2026, 7,982 on February 24, 2026 and 7,982 on February 24, 2028; Mr. Turner: 4,989 on February 24, 2024, 1,756 on January 31, 2025, 1,964 on January 31, 2026, 4,989 on February 24, 2026 and 4,989 on February 24, 2028; Mr. Goodman: 4,989 on February 24, 2024, 1,172 on January 31, 2025, 1,323 on January 31, 2026, 4,989 on February 24, 2026 and 4,989 on February 24, 2028; Mr. Bauche: 3,326 on February 24, 2024, 898 on January 31, 2025, 1,043 on January 31, 2026, 3,326 on February 24, 2026 and 3,326 on February 24, 2028; Mr. Ponder: 3,326 on February 24, 2024, 862 on January 31, 2025, 1,006 on January 31, 2026, 3,326 on February 24, 2026 and 3,326 on February 24, 2028. (3)The amounts shown reflect incentive grants under the Amended and Restated 2018 Stock Incentive Plan that would be earned based on performance through the end of 2023. The settlements for these grants are contingent on the Company’s results for a three-year period. These grants are discussed in further detail under the heading “Compensation Components - Long-Term Incentive Plan,” in the Compensation Discussion and Analysis section above.

  51. OPTION EXERCISES AND STOCK VESTED

    OPTION EXERCISES AND STOCK VESTED The following table sets forth information concerning the value realized by each NEO with respect to any option exercises or vesting of stock awards for each NEO during 2023.

  52. OPTION EXERCISES AND STOCK VESTED

    | | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (1) | Value Realized on Exercise | Number of Shares Acquired on Vesting (1) | Value Realized on Vesting | | Name | (#) | ($) | (#) | ($) | | James B. Lally | — | $— | 25,957 | $1,025,821 | | Keene S. Turner | — | — | 13,308 | $525,932 | | Scott R. Goodman | — | — | 9,242 | $365,244 | | Douglas N. Bauche | — | — | 6,961 | $275,099 | | Mark G. Ponder | — | — | 6,654 | $262,966 | | (1) Includes shares acquired that were subsequently withheld to pay for taxes. | | | | |

  53. NONQUALIFIED DEFERRED COMPENSATION

    NONQUALIFIED DEFERRED COMPENSATION The following table sets forth information for each NEO during 2023 with respect to our Deferred Compensation Plan. Our Deferred Compensation Plan permits certain executives to participate and defer up to 25% of their base salary and/or up to 100% of their eligible bonus for a plan year. Participants can direct the investment of their accounts among the hypothetical investment alternatives made available under the plan and their accounts are adjusted for deemed investment gains or losses resulting from such investment directions. Participants make an irrevocable election when they elect to participate for a plan year to receive the vested account balance following their retirement date, or at a future date not less than five years after the beginning of the plan year. Participants may make hardship withdrawals under specific circumstances.

  54. NONQUALIFIED DEFERRED COMPENSATION

    | Name | Executive Contributions in Last Fiscal Year (1) | Aggregate Earnings in Last Fiscal Year | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last Fiscal Year End | | James B. Lally | $75,000 | $154,220 | $— | $938,029 | | Mark G. Ponder | — | 6,572 | — | 37,693 |

  55. NONQUALIFIED DEFERRED COMPENSATION

    (1) Amounts in this column have been reported in the “Salary” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table on page 29.

  56. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Our Named Executive Officers are entitled to severance and change in control compensation under certain termination of employment events. The amounts potentially payable to our NEOs under our Deferred Compensation Plan are set forth under the Nonqualified Deferred Compensation section above. The following table quantifies the amount of such compensation which would have been received if the qualifying event had occurred as of December 31, 2023. In the case of acceleration of unvested equity awards, the amount shown is based upon the closing price of $44.65 per share for our common stock as of December 31, 2023, and reflects the value of performance awards at target, RSUs and the net cash equivalent due the holder offset by any exercise or “strike” price for stock options.

  57. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    | | Voluntary Termination / For Cause | Acceleration of Unvested Equity Awards Upon Disability / Death | Total Compensation Upon Termination Other Than for Cause | Severance Upon Change in Control Termination | Acceleration of Unvested Equity Awards Upon a Change in Control | Total Compensation Upon Change in Control Termination | | Name | (a) | (b) | (c) | (d) | (e) | (d+e) | | James B. Lally | none | $2,818,255 | $3,635,609 | $6,153,414 | $2,818,255 | $8,971,669 | | Keene S. Turner | none | 1,506,183 | 935,654 | 2,396,824 | 1,506,183 | 3,903,007 | | Scott R. Goodman | none | 1,230,471 | 746,859 | 1,922,749 | 1,230,471 | 3,153,220 | | Douglas N. Bauche | none | 882,819 | 635,609 | 1,584,422 | 882,819 | 2,467,241 | | Mark G. Ponder | none | 866,436 | 594,500 | 1,488,643 | 866,436 | 2,355,079 |

  58. CHIEF EXECUTIVE OFFICER PAY RATIO

    CHIEF EXECUTIVE OFFICER PAY RATIO Our compensation and benefits philosophy and overall structure are broadly similar across the organization to encourage and reward all employees who contribute to our success. We strive to ensure our employees’ pay reflects the level of their impact and responsibilities and is market competitive. The SEC requires companies to disclose the ratio of the annual total compensation of our chief executive officer to the median annual total compensation of our employees. The paragraphs that follow describe our methodology and the resulting pay ratio for the year ended December 31, 2023. We previously identified our median employee using our employee population and annual compensation as of December 31, 2022. There have been no significant changes in our employee population, our employee compensation arrangements, or our median employee’s circumstances that we believe would significantly impact our pay ratio disclosure. Therefore, we calculated the 2023 pay ratio using the same median employee that we used to calculate our 2022 pay ratio. The annual total compensation of our median employee for 2023 was $85,771. Our CEO’s compensation as reported in the Summary Compensation Table was $3,445,438 for the year ended December 31, 2023. Based on these compensation amounts, our estimate of the ratio of annual total compensation of the CEO to the annual total compensation of our median employee was 40:1. Our pay ratio is a reasonable estimate calculated based on rules and guidance provided by the SEC based on our payroll and employment records and the methodology described above. The SEC rules allow for varying methodologies for companies to identify their median employee; and other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Consequently, the pay ratios reported by other companies are unlikely to be relevant or meaningful for purposes of comparison to our pay ratio as reported here. This information is being provided for compliance purposes. Neither the Compensation Committee nor management of the Company used the pay ratio measure in making compensation decisions.