DEF 14A of Great Southern Bancorp, Inc.
Filed Mar 28, 2024 · FY20230001174947-24-000448
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 8, 2024
Each director elected at the Annual Meeting will hold office for a three-year term expiring in 2027, or until that director’s successor is elected and qualified. We expect that the other directors will continue in office for the remainder of their terms. The nominees for director have indicated that they are willing and able to serve as director if elected and have consented to being named as nominees in this proxy statement. If the nominees should for any reason become unavailable for election, it is intended that the proxies will be voted for the substitute nominees as shall be designated by the present Board of Directors, upon the recommendation of the Corporate Governance and Nominating Committee, unless the proxies direct otherwise. The principal occupation and business experience for the last five years and certain other information with respect to each nominee is set forth below. The information concerning the nominees has been furnished by them to us. Nominees to Serve a Three-Year Term Expiring at the 2027 Annual Meeting Thomas J. Carlson, age 71, was first appointed a director of Bancorp and Great Southern in 2001. Mr. Carlson is an attorney and practiced bankruptcy law until 1998. Thereafter, until 2022, he developed various apartment and housing projects in Missouri, Kansas and Oklahoma. Mr. Carlson served twice on the Springfield City Council from 1983 through 1993 and from 1997 through 2009, including seven terms as Mayor of the City of Springfield. In 2022, he founded the Springfield Daily Citizen, a nonprofit digital newspaper operating from the campus of Missouri State University. Mr. Carlson’s many years of service on the Springfield City Council and as Mayor of the City of Springfield give him deep ties to the Springfield community and a thorough understanding of local business and economic matters. He also brings to the Board knowledge and experience in real estate and legal matters. Debra Mallonee (Shantz) Hart, age 60, was first appointed a director of Bancorp and Great Southern in 2017. Ms. Hart is an attorney and practiced law for more than 25 years, representing clients in the areas of real estate development, real estate finance and business law. She is now engaged full-time in real estate development and management. Ms. Hart served as vice president and general counsel for John Q. Hammons Hotels for thirteen years. She has developed real estate for affordable housing purposes since 2008 in Missouri, Arkansas and Oklahoma. Active in the community, Ms. Hart has served on numerous community and non-profit boards, including the Board of Public Utilities of Springfield, Mo., Community Partnership of the Ozarks, Springfield Area Chamber of Commerce Board and Executive Committee (Chairman 2016), Discovery Center, Community Foundation of the Ozarks, Care to Learn (Chairman 2023/2024) and Springfield Boy’s and Girl’s Club Trust Advisory Board. Ms. Hart’s many years of service on numerous community and non-profit boards give her deep ties to the Springfield community and a thorough understanding of local business and economic matters. She also brings to the Board knowledge and experience in real estate and legal matters. Joseph W. Turner, age 59, joined Great Southern in 1991 and became an officer of Bancorp in 1995. Mr. J. Turner became a director of Bancorp and Great Southern in 1997 and currently serves as President and Chief Executive Officer of Bancorp and Great Southern. Prior to joining Great Southern, Mr. J. Turner was an attorney with the Kansas City, Missouri law firm of Stinson LLP. Mr. J. Turner is the son of William V. Turner, who is a director and the Chairman of the Board of Bancorp and Great Southern. Mr. J. Turner is also the brother of Julie Turner Brown, who is a director of Bancorp and Great Southern. Mr. J. Turner currently serves as a board member at CoxHealth. Mr. J. Turner’s many years of experience as an executive of the Company, including as Chief Executive Officer since 2000, have given him invaluable knowledge of all aspects of the Company’s business and operations and strong leadership and organizational skills. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES NAMED IN THIS PROXY STATEMENT. Information with Respect to the Continuing Directors In addition to the nominees proposed for re-election to the Bancorp Board of Directors, the following individuals are also members of the Bancorp Board, each serving for a term ending on the date of the annual meeting of stockholders in the year indicated. The principal occupation and business experience for the last five years and certain other information with respect to each continuing director of Bancorp is set forth below. The information concerning the continuing directors has been furnished by them to us. Directors Serving a Term Expiring at the 2025 Annual Meeting Julie Turner Brown, age 62, was first appointed a director of Great Southern and Bancorp in 2002. Ms. Brown is an attorney and shareholder with the Springfield, Missouri law firm of Carnahan Evans, P.C., having joined the firm in 1996. Ms. Brown is active in local civic affairs, previously serving on the Boards of Community Foundation of the Ozarks, Care to Learn, Ozarks Technical College Foundation, Boys and Girls Club, the Foundation for Springfield Public Schools and Springfield Innovations, Inc., among others. Ms. Brown is the daughter of William V. Turner, who is a director and the Chairman of the Board of Bancorp and Great Southern, and the sister of Joseph W. Turner, who is a director and the Chief Executive Officer and President of Bancorp and Great Southern. Ms. Brown’s legal background and experience make her a particularly valuable resource to the Board. Ms. Brown also has strong ties to the local community through her involvement in civic affairs. Earl A. Steinert, Jr., age 87, was first appointed a director of Great Southern and Bancorp in 2004. Mr. Steinert was a practicing certified public accountant from 1962 until his retirement in 2006. He is the owner of EAS Investment Enterprises Inc., which owns and operates hotels in Springfield, Missouri, and was the managing general partner/owner of Mid-American Real Estate Partners, which owned and operated apartments. Mr. Steinert was a member of the American Institute of Certified Public Accountants and Missouri Society of CPAs. Mr. Steinert brings to the Board more than 40 years of experience in public accounting, as well as knowledge and experience in commercial real estate matters. William V. Turner, age 91, has served as Chairman of the Board of Great Southern since 1974, Chief Executive Officer of Great Southern from 1974 to 2000, and President of Great Southern from 1974 to 1997. Mr. W. Turner has served in similar capacities with Bancorp since its formation in 1989. Mr. W. Turner has also served as Chairman of the Board and President of Great Southern Financial Corporation (a subsidiary of Great Southern) since its incorporation in 1974. Mr. W. Turner is the father of Joseph W. Turner, who is a director and the Chief Executive Officer and President of Bancorp and Great Southern. Mr. W. Turner is also the father of Julie Turner Brown, who is a director of Bancorp and Great Southern. Mr. W. Turner’s service as Chairman of Great Southern for more than 40 years, including 26 years as Chief Executive Officer, has given him a thorough understanding of the Company’s business and the banking industry and invaluable institutional knowledge. Directors Serving a Term Expiring at the 2026 Annual Meeting
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 8, 2024
Kevin R. Ausburn, age 68, was first appointed a director of Bancorp and Great Southern in 2017. Mr. Ausburn is currently the Chairman and Chief Executive Officer of SMC Packaging Group in Springfield, Mo. He has served with many civic and charitable organizations, including Springfield Business Development Corporation, Ozarks Trails Council – Boy Scouts of America Board, Association of Independent Corrugated Converters Board, Good Government Committee, Voice of Business Committee, Council of Churches of the Ozarks Foundation, and Community Foundation of the Ozarks – Audit/Operations Committee. He is also a certified public accountant. Mr. Ausburn’s background as a senior executive, owner and operator of multiple businesses in the Springfield area provides a long history of entrepreneurship and managerial knowledge that are particularly valuable to the Board. He also brings to the Board knowledge and experience regarding local business and economic matters. Amelia A. Counts, age 52, was first appointed a director of Bancorp and Great Southern Bank effective January 1, 2024. Ms. Counts is currently a regional vice president of sales at St. Louis-based Wise F&I. She has more than 25 years of experience in sales and marketing of information technology and software solutions, primarily in the automotive finance and insurance industry. Ms. Counts currently serves on the Board of Trustees for the Missouri State University Foundation and acts as co-chair of the Foundation’s newly formed Bears WIN, or Women’s Impact Network. She was also recently selected to serve as vice-chair of the Missouri State University Presidential Search Committee. She previously served on the Missouri State University Board of Governors from 2017 to 2023, acting as chair in 2021. In addition, Ms. Counts is a board member of St. Louis Artworks and an Alumni Advisory Board member for Delta Zeta Sorority – Epsilon Nu Chapter. Ms. Counts’s business experience and background in sales and marketing, along with her extensive involvement with the local community, make her a valuable addition to the Board. Ms. Counts was identified as a director candidate by the Chief Executive Officer of Bancorp. Steven D. Edwards, age 58, was first appointed a director of Bancorp and Great Southern effective September 1, 2022. Mr. Edwards retired in 2022 as President and Chief Executive Officer of CoxHealth, a community-based, not-for-profit health system headquartered in Springfield, Missouri. He joined CoxHealth in 1992 and held various leadership positions there before being named President and Chief Executive Officer in 2012. In that role, he was responsible for the strategic direction and daily operations of CoxHealth, which has six hospitals, more than 80 clinics and more than 12,000 employees throughout southwest Missouri. Mr. Edwards has served on numerous boards of civic and charitable organizations, including Drury University’s Board of Trustees, The Healthy Living Alliance, Burrell Behavioral Health Center and the Community Blood Center of the Ozarks, City Utilities of Springfield and is the past Chair of the Missouri Hospital Association. Mr. Edwards’s experience as the chief executive officer of a large organization and strong ties to the local community make him a valuable member of the Board. Douglas M. Pitt, age 57, was first appointed a director of Bancorp and Great Southern in 2015. Mr. Pitt has been a technology entrepreneur for decades, currently as the owner of Pitt Technology Group, LLC. His former company, ServiceWorld Computer Center, was a past recipient of the Springfield Area Chamber of Commerce Small Business of the Year Award and was recognized as the Springfield Business Journal’s Philanthropic Business of the Year. Mr. Pitt is also the owner of Pitt Development Group, LLC, a medical office specialty real estate development company. Mr. Pitt is a well-known philanthropist and civic leader, both locally and internationally. He currently serves as a board member of WorldServe International, which operates one of the largest water drilling companies in East Africa. Locally, he founded Care to Learn, a non-profit organization with a mission to fund child health, hunger and hygiene needs. Mr. Pitt is also past Chairman of the Springfield Area Chamber of Commerce. Mr. Pitt’s experience as a business owner and entrepreneur, particularly in the information technology and real estate industries, as well as his significant community involvement, provide knowledge and leadership that are valuable to the Board. Director Independence The Board of Directors of Bancorp has determined that directors Ausburn, Carlson, Counts, Edwards, Hart, Pitt and Steinert are “independent directors,” as that term is defined in Rule 5605 of the Listing Rules of the NASDAQ Stock Market. These directors constitute a majority of the Board.
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| ● | recommending to the Board the appropriate level of compensation and the appropriate mix of cash and equity compensation for directors; |
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| Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | All Other Compensation ($) | Total ($) | | Kevin R. Ausburn | $55,300 | $23,460 | --- | $78,760 | | Julie Turner Brown | 49,500 | 23,460 | --- | 72,960 | | Thomas J. Carlson | 55,200 | 23,460 | --- | 78,660 | | Steven D. Edwards | 50,700 | 23,460 | --- | 74,160 | | Larry D. Frazier(2) | 55,000 | 23,460 | --- | 78,460 | | Debra Mallonee (Shantz) Hart | 55,200 | 23,460 | --- | 78,660 | | Douglas M. Pitt | 55,200 | 23,460 | --- | 78,660 | | Earl A. Steinert | 55,200 | 23,460 | --- | 78,660 |
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The estimated average market rates of interest for 2023 as shown in the table above are based on the interest rate index and margin for each loan that would have been used if Great Southern’s cost of funds was not used. Interest rate reset dates were factored into the index rates used. The estimated difference in interest from actual rate amounts to average market rate amounts shown in the table above represents the difference in interest actually paid during 2023 and interest that would have been paid if the estimated market rates of interest for 2023 were charged. Employment of Benjamin H. Whitlock. Benjamin H. Whitlock, the son-in-law of Bancorp Chief Executive Officer and director Joseph W. Turner, is employed by Great Southern as a Commercial Lending Relationship Manager in the Springfield, Missouri market. For 2023, Mr. Whitlock’s compensation included salary of $114,505, bonus of $17,188, a stock option award with a grant date fair value of $11,730, 401(k) employer match of $5,582, life insurance premiums of $231 and perquisites and other personal benefits of $6,540. Employment of S. Turner Brown. S. Turner Brown, the son of Bancorp director Julie Turner Brown, is employed by Great Southern as a Commercial Lending Relationship Manager in the St. Louis market. For 2023, Mr. Brown’s compensation included salary of $159,583, bonus of $12,908, a stock option award with a grant date fair value of $11,730 and life insurance premiums of $231. EXECUTIVE COMPENSATION Compensation Discussion and Analysis In this section, we provide an overview and analysis of our compensation programs, the material compensation policy decisions we have made under those programs, and the material factors that we considered in making those decisions. Following this section, you will find a series of tables containing specific information about compensation paid or payable to the following individuals, whom we refer to as our “named executive officers”:
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| ● | focus management on long term goals through long-term incentives; |
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| ● | emphasize long-term stock ownership of Bancorp stock by executive officers; and |
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While the primary components of our compensation program have been base salary, annual incentive bonus and long-term incentives in the form of stock options, the Committee also takes into account the full compensation package provided to the individual, including pension benefits, termination agreements, insurance, perquisites and other benefits. In structuring Mr. J. Turner’s base salary for 2023 and 2024, the Committee reviewed several surveys of base salaries paid to the chief executive officers of groups of financial institutions comparable to us in size and performance on a nationwide basis and based in the Midwest region. Most recently, the Committee considered the following information:
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Mr. J. Turner’s base salary of $435,000 for 2023 and $448,050 for 2024 was below the average chief executive officer base salary in each of the surveys noted above. Base Salaries We provide the opportunity for our named executive officers and other executives to earn a competitive annual base salary. We do so in order to attract and retain an appropriate caliber of talent for the position, and to provide a base wage that is not subject to our performance risk. Our base salary levels reflect a combination of factors, including competitive pay levels, the executive’s experience and tenure, our overall annual strategic plan for salary increases, the executive’s individual performance, and changes in responsibility. We review salary levels annually to recognize these factors. We do not target base salary at any particular percentage of total compensation. Each of Messrs. W. and J. Turner has an employment agreement with Bancorp. These agreements provide that the annual base salaries payable to Messrs. W. and J. Turner may be reduced only as part of an overall program, implemented prior to a change in control, applied uniformly and equitably to all members of our senior management. Since 2005, in recognition of the increased responsibilities assumed by Mr. J. Turner and at Mr. W. Turner’s suggestion, Mr. W. Turner’s base annual salary has remained at $200,000 and he has waived his right to receive the annual cash bonus previously provided for under his employment agreement (discussed below under “-Bonuses”), which bonus right was formally eliminated by an amendment to Mr. W. Turner’s employment agreement in 2019. As indicated above, Mr. J. Turner’s base salary was $435,000 for 2023 and increased to $448,050 for 2024. Information regarding the Committee’s considerations in setting Mr. J. Turner’s base salary for 2024 is provided in the preceding section. For 2023, Messrs. Copeland, Baker and Bugh each had a base salary of $470,000, which was increased to $493,500 each for 2024. In setting the base salaries of the executive officers other than Mr. W. Turner, the Committee takes into account the responsibilities of the position and the experience level of the individual executive, as well as our financial performance and the size and complexity of our operations. In structuring the base salaries for 2024 for Messrs. Copeland, Baker and Bugh, the Committee reviewed compensation information from the same sources and criteria as those identified for Mr. J. Turner related to their respective positions. Bonuses Under their employment agreements, Messrs. W. and J. Turner were each previously entitled to receive annual cash bonuses equal to one-half of one percent of our fiscal year pre-tax earnings. Since 2005, Mr. W. Turner had waived his right to this bonus, with the understanding that Mr. J. Turner’s bonus, if any, could be increased by one-fourth of one percent of our fiscal year pre-tax earnings. The Compensation Committee approved this arrangement in recognition of the additional responsibilities that Mr. J. Turner had assumed from Mr. W. Turner. Mr. W. Turner’s bonus right was formally eliminated, and Mr. J. Turner’s bonus percentage was formally increased to 0.75% of our fiscal year pre-tax earnings, by amendments to their employment agreements in 2019. Effective March 5, 2020, Mr. J. Turner’s employment agreement was further amended to increase his bonus percentage to 1.00% of our fiscal year pre-tax earnings. The Compensation Committee considered a variety of factors in determining this bonus percentage increase, including the financial success of the Company, peer-based compensation data and Mr. J. Turner’s overall compensation (including non-cash compensation). We believe that Mr. J. Turner’s bonus arrangement provides an appropriate short-term incentive to increase our earnings, when coupled with the incentives Mr. J. Turner has through his substantial stock holdings to increase our earnings over the long term. The amount of this bonus ($943,642 for 2021, $942,022 for 2022 and $853,441 for 2023) is included in the Summary Compensation Table below under the “Non-Equity Incentive Plan Compensation” column. Under our 2023 Annual Incentive Bonus Plan, each of the named executive officers other than Messrs. W. and J. Turner (Messrs. Copeland, Baker and Bugh) had a cash bonus opportunity of up to 9.35% of base annual salary, consisting of a targeted bonus opportunity of 8.50% of base salary and a maximum bonus opportunity of 9.35% of base salary (110% of the targeted opportunity), based on the extent to which the Company achieved targeted quarterly earnings per share results (the “quarterly bonus opportunity”). In addition, Mr. Copeland was entitled to earn a separate cash bonus equal to 0.06 percent of the Company’s fiscal year pre-tax earnings. Bonuses paid to the participating named executive officers under our 2023 Annual Incentive Bonus Plan are included in the Summary Compensation Table below under the “Non-Equity Incentive Plan Compensation” column. Messrs. W. Turner and J. Turner did not participate in our 2023 Annual Incentive Bonus Plan. For the quarterly periods during 2023, the targeted and actual levels of earnings per share for the quarterly bonus opportunity were as follows: First Quarter 2023
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| Targeted EPS | Percentage received for quarterly bonus opportunity | | $1.47 | 50% | | 1.55 | 75% | | 1.63 | 100% | | 1.71 | 110% |
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| Targeted EPS | Percentage received for quarterly bonus opportunity | | $1.43 | 50% | | 1.51 | 75% | | 1.59 | 100% | | 1.67 | 110% |
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| Targeted EPS | Percentage received for quarterly bonus opportunity | | $1.42 | 50% | | 1.50 | 75% | | 1.58 | 100% | | 1.66 | 110% |
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| Targeted EPS | Percentage received for quarterly bonus opportunity | | $1.54 | 50% | | 1.62 | 75% | | 1.71 | 100% | | 1.79 | 110% |
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Earnings per share for the fourth quarter of 2023, calculated in accordance with GAAP, were $1.11, which was below the targeted goal derived from budget projections. Accordingly, no bonus was awarded for the quarterly bonus opportunity for the fourth quarter of 2023. For 2024, the bonus arrangements for Messrs. Copeland, Baker and Bugh were revised, such that each may earn a cash bonus of up to 10.625% percent of their base salary amount based on the extent to which the Company achieves targeted earnings per share results. In addition, Mr. Copeland is eligible to earn a separate cash bonus equal to 0.06 percent of the Company’s fiscal year pre-tax earnings. Stock Options General. Stock options have been an integral part of our executive compensation program. They are intended to encourage ownership and retention of Bancorp’s stock by key employees as well as non-employee members of the Board of Directors. Through stock options, the objective of aligning key employees’ long-term interests with those of stockholders may be met by providing key employees with the opportunity to build, through the achievement of corporate goals, a meaningful stake in Bancorp. In 2022, Bancorp’s stockholders approved the 2022 Omnibus Incentive Plan. Upon approval of the 2022 plan by stockholders, Bancorp’s Board of Directors froze the 2018 Omnibus Incentive Plan, which means that no new grants of awards will be made under that plan, but outstanding awards under the plan were not affected. The committee administering our equity plans (the “Plan Committee”), which is now the Compensation Committee, but was a separately constituted Stock Option Committee prior to January 19, 2022, considers additional options each year as needed to attract and retain employees. These grants typically have been made late in the third quarter or early in the fourth quarter of each year, though the Plan Committee retains discretion to grant options at any time during the year. Our senior management group provides recommendations to the Plan Committee for option grants for rank-and-file employees. Mr. J. Turner provides recommendations to the Plan Committee for grants to members of the senior management group other than himself. All options granted by the Plan Committee are subject to ratification by the Board of Directors, which typically occurs on the same day as the Plan Committee approval. We do not coordinate the timing of stock option grants with the release of material non-public information. Option grants made during 2023 to the named executive officers are included in the Summary Compensation and Grants of Plan-Based Awards tables. As required by the applicable plan, stock options have an exercise price that is equal to no less than the market value of Bancorp’s common stock on the date of grant, which is the date on which the Board of Directors ratifies the approval of the grant by the Plan Committee. To provide an incentive for a sustained increase in the value of our Common Stock, stock options granted to employees typically do not begin vesting until the second anniversary of the grant date, with 25% of the option vesting on that second anniversary date and 25% vesting on each anniversary date thereafter through the fifth anniversary date. The 2022 Omnibus Incentive Plan authorizes the granting of stock options, stock appreciation rights and restricted stock awards, as well as restricted stock units, performance shares and performance units. Although no incentives other than stock options have been granted to date under the 2022 plan, the Plan Committee and the Board may consider the utilization of other types of permitted incentive awards in the future. Alternative Cash Payment. The Compensation Committee has authorized the Company’s management to offer certain officers who have expressed their intent to retire from their full-time officer position within six years the opportunity to elect to receive an alternative cash payment in lieu of their typical annual stock option award, to the extent the Committee determines to grant such stock option awards. The cash payment will be made over time in annual installments, generally in December of each year, with the first installment occurring the year after the election is made and the final installment occurring (a) upon the officer’s separation from service with the Company or (b) at such later time as may be necessary to ensure compliance with Section 409A of the Internal Revenue Code. Payment of installments prior to the final installment is subject to the officer’s continued employment with the Company. The value of the alternative cash payment is calculated using the Company’s applicable per share expense calculation, determined in connection with the Company’s annual stock option award process (which typically occurs in the fourth quarter). Eligible officers must elect the alternative cash payment prior to being awarded a stock option and, once made, the election may not be rescinded. As reflected in the Summary Compensation and Grants of Plan-Based Awards tables, Mr. Copeland is the only named executive officer who elected to receive an alternative cash payment in lieu of a stock option award in 2023. Retirement and Other Benefits We participate in a multi-employer defined benefit pension plan covering all employees who have met minimum service requirements. Effective July 1, 2006, this plan was closed to new participants. Employees already in the plan as of that date generally continue to accrue benefits. For information regarding benefits payable under this plan to the named executive officers, see “Pension Benefits.” We have a defined contribution retirement plan covering substantially all of our employees. During 2023, we matched 100% of the employee’s contribution on the first 3% of the employee’s compensation, and also matched 50% of the employee’s contribution on the next 2% of the employee’s compensation. Our matching contributions for 2023 under this plan to the named executive officers are reflected in the Summary Compensation Table under the “All Other Compensation” column. In addition to the basic term life insurance coverage maintained for nearly all employees (providing a maximum death benefit of $60,000), Great Southern maintains supplemental term life insurance coverage for all personnel with an “officer” designation, which provides an additional death benefit of $175,000 (“Officer Life Insurance Coverage”). Each named executive officer has Officer Life Insurance coverage of $175,000, other than Mr. W. Turner whose coverage has been age-adjusted to $87,500, and each named executive officer other than Mr. W. Turner (who does not have the basic term life insurance benefit) has the maximum coverage ($60,000) under the basic term life insurance benefit. Premiums paid on behalf of the named executive officers for the Officer Life Insurance Coverage are reflected in the Summary Compensation Table under the “All Other Compensation” column. As part of its health insurance coverage, Great Southern also provides long-term disability coverage to all employees generally. Each of the named executive officers other than Mr. W. Turner (who does not participate in Great Southern’s health insurance plan) is entitled to the maximum long-term disability benefit of $10,000 per month. Great Southern pays the premiums on separate, individual term life (providing a death benefit of $8 million) and long-term disability insurance policies maintained by Mr. J. Turner; these premiums are reflected in the Summary Compensation Table under the “All Other Compensation” column. Perquisites and Other Personal Benefits
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We provide the named executive officers with perquisites and other personal benefits that we and the Committee believe are reasonable and consistent with our overall compensation program to better enable us to attract and retain superior employees for key positions. The Committee periodically reviews the levels of perquisites and other personal benefits provided to the named executive officers. Payments Upon Termination or Change in Control Each of Messrs. W. and J. Turner has an employment agreement with Bancorp that provides for certain payments and benefits if their employment is terminated under certain scenarios, including, but not limited to, within the 12 months preceding, at the time of or within 24 months after a change in control. See “Employment Agreements.” These employment agreements thus require a “double trigger” in order for any payments or benefits under the agreements to be provided to Messrs. W. or J. Turner in connection with or following a change in control – in other words, both a change in control and an involuntary termination of employment (which includes a voluntary termination by the executive following a material reduction in his duties, responsibilities or benefits) must occur. The purpose of providing the change in control payments and benefits is to attract and retain top level executives of the highest caliber and mitigate the risk to these executives that their employment will be involuntarily terminated in the event we are acquired. At the same time, the mere sale of our company will not automatically trigger a payout, as our intention is to induce the executive to remain employed following a change in control so long as the acquiring company so desires without a material reduction in the executive’s duties, responsibilities or benefits. Each of the employment agreements with Messrs. W. and J. Turner previously contained a tax gross up provision which provided generally that if the executive received payments or benefits in connection with a change in control, then to the extent such payments or benefits constituted “parachute payments” under Section 280G of the Internal Revenue Code, he generally would be paid an additional amount (referred to as a “gross up payment”) that would offset, on an after tax basis, the effect of any excise tax consequently imposed on him under Section 4999 of the Internal Revenue Code. The employment agreements were amended on November 17, 2021 to eliminate the gross up provision. As amended, each employment agreement now provides that if the severance benefits payable to the executive would be a parachute payment under Section 280G of the Internal Revenue Code and trigger the excise tax under Section 4999 of the Internal Revenue Code, then the severance benefits will be reduced to the executive’s threshold under Section 280G of the Internal Revenue Code so that no excise taxes are payable by the executive, unless the executive would receive a greater net-after-tax benefit if he received all of his severance benefits and paid the applicable excise tax himself. We do not have employment or severance agreements with any of our other named executive officers. To mitigate the risk of loss of benefits to these officers if a change in control occurs, their unvested stock options (like the unvested stock options of all other employees) will vest in full upon a change in control.
Summary Compensation Table
Summary Compensation Table The following table sets forth information concerning the compensation paid to or earned by the named executive officers for the years ended December 31, 2023, 2022 and 2021:
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($) | Option Awards $(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings($)(5) | All Other Compensation ($)(6) | Total ($) | | William V. Turner | 2023 | $254,130 | $--- | $--- | $91,494 | $--- | $96,000 | $185,536 | $627,160 | | Chairman of the | 2022 | 254,130 | 600 | --- | 105,144 | --- | --- | 180,113 | 539,987 | | Board of Bancorp and | 2021 | 254,130 | --- | --- | 89,590 | --- | 59,000 | 180,281 | 583,001 | | Great Southern | | | | | | | | | | | Joseph W. Turner | 2023 | $487,463 | $--- | $--- | $91,494 | $853,441 | $157,000 | $189,844 | $1,779,242 | | Chief Executive | 2022 | 467,991 | 1,000 | --- | 105,144 | 942,022 | --- | 180,758 | 1,696,915 | | Officer and President | 2021 | 441,469 | --- | --- | 89,590 | 943,642 | 14,000 | 182,302 | 1,671,003 | | of Bancorp and Great | | | | | | | | | | | Southern | | | | | | | | | | | Rex A. Copeland | 2023 | $467,838 | $--- | $--- | $--- | $68,685 | $110,000 | $72,700 | $719,223 | | Treasurer of Bancorp | 2022 | 413,015 | 1,000 | --- | 64,704 | 70,550 | --- | 32,673 | 581,942 | | and Senior Vice | 2021 | 366,048 | --- | --- | 54,910 | 61,920 | 27,000 | 33,305 | 543,183 | | President and Chief | | | | | | | | | | | Financial Officer of | | | | | | | | | | | Great Southern | | | | | | | | | | | Kevin L. Baker | 2023 | $467,213 | $--- | $--- | $56,304 | $17,478 | $79,000 | $13,431 | $633,426 | | Chief Credit Officer | 2022 | 397,602 | 1,000 | --- | 64,704 | 68,000 | --- | 12,431 | 543,737 | | and Vice President | 2021 | 339,123 | --- | --- | 54,910 | 57,687 | 29,000 | 11,831 | 492,551 | | of Great Southern | | | | | | | | | | | John M. Bugh | 2023 | $467,213 | $--- | $--- | $56,304 | $17,478 | $--- | $24,771 | $565,766 | | Chief Lending Officer | 2022 | 397,559 | 1,000 | --- | 64,704 | 68,200 | --- | 36,529 | 567,992 | | and Vice President | 2021 | 338,334 | --- | --- | 54,910 | 57,511 | --- | 32,975 | 483,730 | | of Great Southern | | | | | | | | | |
Summary Compensation Table
| (1) For Messrs. W. and J. Turner, the 2023, 2022 and 2021 amounts in the table include directors’ fees of $54,000 each year. | | (2) For 2022, reflects special bonuses paid during the year to all full-time and part-time employees totaling $1,000 and $600 per employee, respectively. | | (3) Represents the grant date fair value of the award determined in accordance with ASC Topic 718 using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option-pricing model to calculate the grant date fair value of these awards are included in Note 20 of the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC. Mr. Copeland, who otherwise would have received an option award in 2023 with a grant date fair value of $56,304, elected to receive an alternative cash payment, the amount of which ($45,043, payable in annual installments) is included for him in 2023 under the “All Other Compensation” column. | | (4) Represents incentive bonus awards earned for the years shown in the table. | | (5) Represents the changes during the years shown in the table in the actuarial present value of the named executive officer’s accumulated benefit under Great Southern’s multi-employer defined benefit pension plan. The assumptions used for this calculation were the same as those used for the calculation of the present value of accumulated benefit in the table under “Pension Benefits.” Mr. Bugh is not eligible for this benefit. | | (6) For Messrs. W. Turner, J. Turner, Copeland, and Bugh, the 2023 amounts in the table include the aggregate incremental cost to Bancorp of certain perquisites and other personal benefits provided to them, comprised of the following: for Mr. W. Turner, the payment of club dues, use of tickets to various local sporting events and use of a company car and driver; Mr. J. Turner, personal use of company aircraft, the payment of club dues and use of tickets to various local sporting events; Mr. Copeland, personal use of company aircraft, the payment of club dues and use of tickets to various local sporting events; and for Mr. Bugh, the payment of club dues. SEC rules require that each perquisite or other personal benefit provided to a named executive officer that exceeds the greater of $25,000 or 10% of the total amount of perquisites and other personal benefits for that officer be quantified. There were no such perquisites or other personal benefits provided to named executive officers during 2023 that are required to be quantified, other than $41,720 for personal use of company aircraft for Mr. J. Turner. For Mr. Baker, the aggregate incremental cost to Bancorp of the perquisites and other personal benefits provided to him during 2023 was less than $10,000; in accordance with the rules of the SEC, the amounts of these perquisites and other personal benefits are not included in the table. For Messrs. W. Turner, J. Turner, Copeland, Baker and Bugh, the amounts in the table for 2023 also include, among other items not required under SEC rules to be identified and quantified because their value does not exceed $10,000, the following: (a) company matching contributions under our 401(k) plan (Mr. W. Turner - $9,867, Mr. J. Turner - $13,200, Mr. Copeland - $13,200, Mr. Baker - $13,200 and Mr. Bugh - $13,200); (b) officer life insurance premiums (Mr. W. Turner - $116, Mr. J. Turner - $231, Mr. Copeland - $231, Mr. Baker - $231 and Mr. Bugh - $231); (c) additional life insurance and long-term disability insurance premiums (Mr. J. Turner - $24,826 and $26,430, respectively); (d) reimbursement for tax liability resulting from payment |
Summary Compensation Table
of additional term life insurance and long-term disability insurance premiums (Mr. J. Turner - $47,704); (e) reimbursement for tax liability resulting from use of company car and driver (Mr. W. Turner - $16,163); (f) benefit payments under our pension plan to Mr. W. Turner - $129,000; and (g) alternative cash payment to Mr. Copeland in lieu of an option award - $45,043.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth certain information with respect to grants of plan-based awards to the named executive officers during 2023.
Grants of Plan-Based Awards
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares | All Other Option Awards: Number of Securities Under- | Exercise Price of | Grant Date Fair Value of | | Name | Grant Date | Thres- hold ($)(1) | Target ($)(1) | Maximum ($)(1) | Thres- hold ($) | Target ($) | Maximum ($) | of Stock or Units (#) | lying Options (#)(2) | Option Awards ($/Sh) | Stock and Option Awards(3) | | William V. Turner | n/a | $--- | $--- | $--- | --- | --- | --- | --- | --- | --- | --- | | | 11/15/23 | --- | --- | --- | --- | --- | --- | --- | 7,800 | $53.22 | $91,494 | | Joseph W. Turner | n/a | $--- | $--- | $--- | --- | --- | --- | --- | --- | --- | --- | | | 11/15/23 | --- | --- | --- | --- | --- | --- | --- | 7,800 | $53.22 | $91,494 | | Rex A. Copeland | n/a | $--- | $--- | $43,945 | --- | --- | --- | --- | --- | --- | --- | | | 11/15/23(4) | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Kevin L. Baker | n/a | $--- | $--- | $43,945 | --- | --- | --- | --- | --- | --- | --- | | | 11/15/23 | --- | --- | --- | --- | --- | --- | --- | 4,800 | $53.22 | $56,304 | | John M. Bugh | n/a | $--- | $--- | $43,945 | --- | --- | --- | --- | --- | --- | --- | | | 11/15/23 | --- | --- | --- | --- | --- | --- | --- | 4,800 | $53.22 | $56,304 |
Grants of Plan-Based Awards
| (1) Under our 2023 Annual Incentive Bonus Plan, participating officers, which included Messrs. Copeland, Baker and Bugh, could earn a cash bonus of up to 9.35% of base annual salary based on the achievement of targeted earnings per share, as reflected in the table. Mr. Copeland was eligible to earn an additional cash bonus for 2023 equal to 0.06 percent of the Company’s pre-tax net income. Under his employment agreement, Mr. J. Turner was entitled to an annual cash bonus for 2023 equal to one percent of the Company’s pre-tax net income. Mr. W. Turner was not entitled to an annual cash bonus pursuant to his employment agreement. See “Compensation Discussion and Analysis-Bonuses.” The actual bonus amounts awarded to the named executive officers for 2023 are set forth in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column. | | (2) Represents a stock option grant under Bancorp’s 2022 Omnibus Incentive Plan that is scheduled to vest in 25% annual increments beginning November 15, 2025. | | (3) Represents the grant date fair value of the award determined in accordance with ASC Topic 718 using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option-pricing model to calculate the grant date fair value of these awards are included in Note 20 of the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC. | | (4) Mr. Copeland, who otherwise would have been granted on November 15, 2023, an option to purchase 4,800 shares at an exercise price of $53.22, vesting in 25% annual increments beginning November 15, 2025, elected to receive an alternative cash payment of $45,043, payable in annual installments (subject to continued employment with the Company through each payment date) approximately as follows: $6,756 on December 31, 2024, $6,756 on December 31, 2025, $6,756 on December 31, 2026, $6,756 on December 31, 2027, $9,009 on December 29, 2028 and $9,009 on July 13, 2029. See “Compensation Discussion and Analysis—Stock Options-Alternative Cash Payment.” |
Grants of Plan-Based Awards
Each of Messrs. W. and J. Turner has an employment agreement with Bancorp. For descriptions of these agreements, see “Employment Agreements.”
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023 The following table provides information regarding each unexercised stock option held by each of our named executive officers as of December 31, 2023:
Outstanding Equity Awards at December 31, 2023
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | William V. Turner | 6,000 | --- | --- | 32.5900 | 10/15/2024 | --- | --- | --- | --- | | | 6,000 | --- | --- | 50.7100 | 11/18/2025 | --- | --- | --- | --- | | | 6,000 | --- | --- | 41.3000 | 10/24/2026 | --- | --- | --- | --- | | | 6,000 | --- | --- | 52.2000 | 11/15/2027 | --- | --- | --- | --- | | | 7,000 | --- | --- | 55.0000 | 11/28/2028 | --- | --- | --- | --- | | | 5,250 | 1,750(1) | --- | 60.1500 | 11/20/2029 | --- | --- | --- | --- | | | 3,750 | 3,750(2) | --- | 41.7400 | 10/26/2030 | --- | --- | --- | --- | | | 1,938 | 5,812(3) | --- | 57.9800 | 11/17/2031 | --- | --- | --- | --- | | | --- | 7,800(4) | --- | 61.5500 | 11/16/2032 | --- | --- | --- | --- | | | --- | 7,800(5) | --- | 53.2200 | 11/15/2033 | --- | --- | --- | --- | | Total | 41,938 | 26,912 | | | | | | | | | Joseph W. Turner | 6,000 | --- | --- | 50.7100 | 11/18/2025 | --- | --- | --- | --- | | | 6,000 | --- | --- | 41.3000 | 10/24/2026 | --- | --- | --- | --- | | | 6,000 | --- | --- | 52.2000 | 11/15/2027 | --- | --- | --- | --- | | | 7,000 | --- | --- | 55.0000 | 11/28/2028 | --- | --- | --- | --- | | | 5,250 | 1,750(1) | --- | 60.1500 | 11/20/2029 | --- | --- | --- | --- | | | 3,750 | 3,750(2) | --- | 41.7400 | 10/26/2030 | --- | --- | --- | --- | | | 1,938 | 5,812(3) | --- | 57.9800 | 11/17/2031 | --- | --- | --- | --- | | | --- | 7,800(4) | --- | 61.5500 | 11/16/2032 | --- | --- | --- | --- | | | --- | 7,800(5) | --- | 53.2200 | 11/15/2033 | --- | --- | --- | --- | | Total | 35,938 | 26,912 | | | | | | | | | Rex A. Copeland | 4,200 | --- | --- | 50.7100 | 11/18/2025 | --- | --- | --- | --- | | | 4,200 | --- | --- | 41.3000 | 10/24/2026 | --- | --- | --- | --- | | | 4,200 | --- | --- | 52.2000 | 11/15/2027 | --- | --- | --- | --- | | | 4,200 | --- | --- | 55.0000 | 11/28/2028 | --- | --- | --- | --- | | | 3,150 | 1,050(6) | --- | 60.1500 | 11/20/2029 | --- | --- | --- | --- | | | 2,250 | 2,250(7) | --- | 41.7400 | 10/26/2030 | --- | --- | --- | --- | | | 1,188 | 3,562(8) | --- | 57.9800 | 11/17/2031 | --- | --- | --- | --- | | | --- | 4,800(9) | --- | 61.5500 | 11/16/2032 | --- | --- | --- | --- | | Total | 23,388 | 11,662 | | | | | | | | | Kevin L. Baker | 625 | --- | --- | 32.5900 | 10/15/2024 | --- | --- | --- | --- | | | 2,500 | --- | --- | 50.7100 | 11/18/2025 | --- | --- | --- | --- | | | 2,500 | --- | --- | 41.3000 | 10/24/2026 | --- | --- | --- | --- | | | 2,800 | --- | --- | 52.2000 | 11/15/2027 | --- | --- | --- | --- | | | 3,500 | --- | --- | 55.0000 | 11/28/2028 | --- | --- | --- | --- | | | 2,850 | 950(10) | --- | 60.1500 | 11/20/2029 | --- | --- | --- | --- | | | 2,250 | 2,250(7) | --- | 41.7400 | 10/26/2030 | --- | --- | --- | --- | | | 1,188 | 3,562(8) | --- | 57.9800 | 11/17/2031 | --- | --- | --- | --- | | | --- | 4,800(9) | --- | 61.5500 | 11/16/2032 | --- | --- | --- | --- | | | --- | 4,800(11) | --- | 53.2200 | 11/15/2033 | --- | --- | --- | --- | | Total | 18,213 | 16,362 | | | | | | | |
Outstanding Equity Awards at December 31, 2023
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | John M. Bugh | 1,750 | --- | --- | 32.5900 | 10/15/2024 | --- | --- | --- | --- | | | 1,750 | --- | --- | 50.7100 | 11/18/2025 | --- | --- | --- | --- | | | 2,500 | --- | --- | 41.3000 | 10/24/2026 | --- | --- | --- | --- | | | 2,800 | --- | --- | 52.2000 | 11/15/2027 | --- | --- | --- | --- | | | 3,500 | --- | --- | 55.0000 | 11/28/2028 | --- | --- | --- | --- | | | 2,850 | 950(10) | --- | 60.1500 | 11/20/2029 | --- | --- | --- | --- | | | 2,250 | 2,250(7) | --- | 41.7400 | 10/26/2030 | --- | --- | --- | --- | | | 1,188 | 3,562(8) | --- | 57.9800 | 11/17/2031 | --- | --- | --- | --- | | | --- | 4,800(9) | --- | 61.5500 | 11/16/2032 | --- | --- | --- | --- | | | --- | 4,800(11) | --- | 53.2200 | 11/15/2033 | --- | --- | --- | --- | | Total | 18,588 | 16,362 | | | | | | | |
Outstanding Equity Awards at December 31, 2023
| (1) Vesting schedule is as follows: 1,750 shares on November 20, 2024. | | (2) Vesting schedule is as follows: 1,875 shares on October 26, 2024 and 2025. | | (3) Vesting schedule is as follows: 1,938 shares on November 17, 2024 and 1,937 shares on November 17, 2025 and 2026. | | (4) Vesting schedule is as follows: 1,950 shares on November 16, 2024, 2025, 2026 and 2027. | | (5) Vesting schedule is as follows: 1,950 shares on November 15, 2025, 2026, 2027 and 2028. | | (6) Vesting schedule is as follows: 1,050 shares on November 20, 2024. | | (7) Vesting schedule is as follows: 1,125 shares on October 26, 2024 and 2025. | | (8) Vesting schedule is as follows: 1,188 shares on November 17, 2024 and 1,187 shares on November 17, 2025 and 2026. | | (9) Vesting schedule is as follows: 1,200 shares on November 16, 2024, 2025, 2026 and 2027. | | (10) Vesting schedule is as follows: 950 shares on November 20, 2024. | | (11) Vesting schedule is as follows: 1,200 shares on November 15, 2025, 2026, 2027 and 2028. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table sets forth information about stock options exercised during the year ended December 31, 2023, by each named executive officer:
Option Exercises and Stock Vested
| | Option Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | | William V. Turner | --- | $--- | | Joseph W. Turner | --- | $--- | | Rex A. Copeland | --- | $--- | | Kevin L. Baker | --- | $--- | | John M. Bugh | 1,500 | $35,941 |
Option Exercises and Stock Vested
| (1) Represents amount realized upon exercise of stock options, based on the difference between the market value of the shares acquired at the time of exercise and the exercise price. |
Option Exercises and Stock Vested
Pension Benefits Great Southern participates in the Pentegra Financial Institutions Retirement Fund, a multi-employer comprehensive defined benefit pension plan. Effective July 1, 2006, this plan was closed to new participants. Employees already in the plan as of that date generally continue to accrue benefits. Mr. W. Turner is no longer accruing additional benefits under the plan. A participant becomes fully vested after five years of service or upon attaining age 65 regardless of the number of years of service. The annual benefit for normal retirement (after attaining age 65) is calculated as follows: [(2% x years of service prior to 7/1/2006 x “high-five average salary” through 6/30/2006) – (1% x years of service prior to 7/1/2006 x “high-five average salary” through 6/30/2006)] + (1% x years of service before and after 7/1/2006 x “high-five average salary” before and after 7/1/2006) = annual benefit The “high-five average salary” refers to the participant’s average annual salary for the five consecutive years of highest salary. A participant retiring with 30 years of service (15 prior to 07/01/2006 and 15 after 07/01/2006) and a high-five average salary of $40,000 ($30,000 prior to July 1, 2006) would receive an annual benefit of $16,500 computed as ((2% x 15 x $30,000) – (1% x 15 x $30,000) + (1% x 30 x $40,000)); $9,000 – $4,500 + $12,000 = $16,500. A participant becomes eligible for early retirement at age 45, in which case the benefit, otherwise payable beginning at age 65, is reduced by applying an early retirement factor based on his or her age when payments begin. The factor is determined by subtracting the following from 100%: 6% for each year between age 60 and 65, 4% for each year between age 55 and 60 and 3% for each year between age 45 and 55. If payments were to begin at age 55, the early retirement factor would be 50%. A participant taking early retirement at age 55 with 18 years of service and a high-five average salary of $90,000 prior to July 1, 2006 and 12 years of service after July 1, 2006 and a high-five average salary of $100,000 ($90,000 before July 1, 2006) receives an annual benefit of $23,100 computed as (((2% x 18 x $90,000) – (1% x 18 x $90,000) + (1% x 30 x $100,000)) x 50%). Each of Messrs. J. Turner, Copeland and Baker are currently eligible for early retirement under the pension plan. The regular form of retirement benefit (whether normal or early) is guaranteed for the life of the participant, but not less than 120 monthly installments. If a retired participant dies before receiving 120 monthly installments, his or her beneficiary would be entitled to the present value of the unpaid installments in a lump sum (or in installments, at the election of the participant or his or her beneficiary). If a participant dies in active service after having become vested, his or her beneficiary is entitled to a lump sum death benefit equal to the present value of 120 monthly retirement benefit installments which would have been payable had the participant’s retirement benefits commenced on the first day of the month after the month in which he or she died. The benefit under the pension plan is subject to Internal Revenue Service annual compensation limits (generally $330,000 for 2023 and $345,000 for 2024). The following table sets forth information regarding benefits payable to the named executive officers under the pension plan.
Option Exercises and Stock Vested
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | William V. Turner | Pentegra Retirement Fund | 24 | $830,000 | $129,000 | | Joseph W. Turner | Pentegra Retirement Fund | 32 | 1,291,000 | --- | | Rex A. Copeland | Pentegra Retirement Fund | 23 | 791,000 | --- | | Kevin L. Baker | Pentegra Retirement Fund | 18 | 488,000 | --- | | John M. Bugh | Not eligible under the plan | --- | --- | --- |
Option Exercises and Stock Vested
The information contained in the table above was provided to us by Pentegra Retirement Services. The amounts shown for the present value of accumulated benefit were calculated by Pentegra Retirement Services assuming an age 65 retirement date, a discount rate of 4.83% and the Pri-2012 Mortality table (with Scale MP-2021). The following table sets forth information regarding the qualified plan service cost to the named executive officers under the pension plan.
Option Exercises and Stock Vested
| | | Qualified Plan Service Cost | | | | | | For the Year Ended December 31, | | | | Name | Plan Name | 2023 | 2022 | 2021 | | William V. Turner | Pentegra Retirement Fund | $--- | $--- | $--- | | Joseph W. Turner | Pentegra Retirement Fund | 43,000 | 40,000 | 39,000 | | Rex A. Copeland | Pentegra Retirement Fund | 41,000 | 40,000 | 39,000 | | Kevin L. Baker | Pentegra Retirement Fund | 31,000 | 37,000 | 36,000 | | John M. Bugh | Not eligible under the plan | --- | --- | --- |
Option Exercises and Stock Vested
The information contained in the table above was provided to us by Pentegra Retirement Services. For the years ending December 31, 2023, 2022 and 2021, a discount rate of 5.02%, 2.83% and 2.52%, respectively, was used in the above table. Employment Agreements On November 4, 2019, Messrs. W. and J. Turner (the “Employees”) entered into amended and restated employment agreements with Bancorp (the “Amended and Restated Employment Agreements”). The Amended and Restated Employment Agreements amended and restated the prior employment agreements Messrs. W. and J. Turner had with Bancorp in order to revise provisions regarding bonuses and the deferral of certain compensation, ensure compliance with Section 409A of the Internal Revenue Code, clarify provisions regarding confidential information and make certain other changes. Each Amended and Restated Employment Agreement provides for an initial term ending on September 30, 2027 and provides for an extension of one year, in addition to the then-remaining term, on each October 1st (commencing October 1, 2020), as long as (1) Bancorp has not notified the Employee at least 90 days in advance that the term will not be extended further and (2) the Employee has not received an unsatisfactory performance review by the Board of Directors of Bancorp or Great Southern. The Amended and Restated Employment Agreements provide for annual base salaries not less than the Employee’s annual base salary in effect on November 4, 2019 ($200,000 in the case of Mr. W. Turner and $380,055 in the case of Mr. J. Turner), and do not permit a reduction in annual base salary except as part of an overall program, implemented prior to a change in control (as defined in the Amended and Restated Employment Agreements), applied uniformly and equitably to all members of senior management. The Amended and Restated Employment Agreements also provide for participation in benefit plans and the receipt of fringe benefits to the same extent as the other executive officers of Bancorp and Great Southern and equitable participation in any performance-based and discretionary bonuses awarded to the executive officers of Bancorp and Great Southern. In addition, Mr. J. Turner is entitled to an annual bonus equal to a specified percentage of Bancorp’s fiscal year pre-tax earnings. This percentage was increased from 0.75% to 1.00% pursuant to an amendment to Mr. J. Turner’s Amended and Restated Employment Agreement entered into as of March 5, 2020. Each Amended and Restated Employment Agreement provides that if the Employee’s employment is involuntarily terminated and the Employee has offered to continue to provide the services contemplated by and on the terms provided in his Amended and Restated Employment Agreement and such offer has been declined, then during the remaining term of the agreement the Employee will be entitled to receive (1) on a monthly basis, 1/12th of his annual salary and 1/12th of the average annual amount of cash bonus and cash incentive compensation for the two full fiscal years preceding the date of termination; (2) in the case of Mr. J. Turner’s agreement, continuation of specified health insurance benefits for him and his dependents until their death or the expiration of the remaining term of the agreement (whichever first occurs); (3) in the case of Mr. J. Turner’s agreement, continuation of specified other insurance benefits until his death or the expiration of the remaining term of the agreement (whichever first occurs); and (4) if the involuntary termination occurs within the 12 months preceding, at the time of, or within 24 months after a change in control of Bancorp, an amount in cash equal to 299% of the Employee’s “base amount” (as defined in Section 280G of the Internal Revenue Code). The term “involuntary termination” is defined as termination of the Employee’s employment by Bancorp or Great Southern (other than for cause, or due to death, permanent disability, retirement or a prohibition by law from participating in the conduct of the affairs of a depository institution) without the Employee’s consent or by the Employee following a material reduction of or interference with his duties, responsibilities or benefits without his consent. Each Amended and Restated Employment Agreement previously provided that if the payments and benefits provided to the Employee pursuant to the agreement, either alone or together with other payments and benefits the Employee has the right to receive from Bancorp and its subsidiaries, would constitute a “parachute payment” under Section 280G of the Internal Revenue Code, then the Employee would be paid an additional amount that would offset the effect of any resulting excise tax imposed under Section 4999 of the Internal Revenue Code as well as any other taxes imposed as a result of this offsetting payment (the “Gross Up Provision”). The Amended and Restated Employment Agreements were amended on November 17, 2021 to eliminate the Gross Up Provision. As amended, each Amended and Restated Employment Agreement now provides that if the severance benefits payable to the Employee would be a parachute payment under Section 280G of the Internal Revenue Code and trigger the excise tax under Section 4999 of the Internal Revenue Code, then the severance benefits will be reduced to the Employee’s threshold under Section 280G of the Internal Revenue Code so that no excise taxes are payable by the Employee, unless the Employee would receive a greater net-after-tax benefit if he received all of his severance benefits and paid the applicable excise tax himself. Each Amended and Restated Employment Agreement provides that if the Employee dies while employed under the Employment Agreement, his estate or designated beneficiary will receive (1) the salary the Employee would have earned if he had remained employed through the 180th day after the date of his death; (2) the amounts of any benefits or awards which were earned with respect to the fiscal year in which the Employee died and the amount of any bonus or incentive compensation for that fiscal year, pro-rated in accordance with the portion of the fiscal year elapsed prior to his death; and (3) any unpaid deferred amounts described in the next paragraph. Each Amended and Restated Employment Agreement provides that to the extent the Employee’s total compensation for any taxable year ending on or before December 31, 2019 exceeds the greater of $1,000,000 or the maximum amount of compensation deductible by the Company under Section 162(m) of the Internal Revenue Code (the greater of these two amounts referred to below as the “maximum allowable amount”), the excess amount must be deferred, with interest (at an annual rate equal to the federal short-term rate under Section 1274(d)(1) of the Internal Revenue Code, determined as of the last day of the calendar year in which the Employee’s compensation is first not deductible under Section 162(m) of the Internal Revenue Code) compounded annually, as provided in the agreement. Potential Payments Upon Termination of Employment Messrs. W. and J. Turner. The following tables summarize the approximate value of the termination payments and benefits that Messrs. W. and J. Turner would have received if their employment had been terminated on December 31, 2023 under the circumstances shown. The tables also exclude (i) amounts accrued through December 31, 2023 that would be paid in the normal course of continued employment, such as accrued but unpaid salary and bonus amounts, (ii) vested account balances under Great Southern’s 401(k) plan and (iii) vested account balances under our defined benefit pension plan, as described under “Pension Benefits.” William V. Turner
Option Exercises and Stock Vested
| Termination Scenario | Salary and Bonus Continuation ($) | Continuation of Health and Other Insurance Benefits ($) | Life Insurance Benefit ($) | Accelerated Vesting of Stock Options ($) | Payment of 299% of “Base Amount” ($) | | If termination for cause occurs | $--- | $--- | $--- | $--- | $--- | | If voluntary termination (not constituting “involuntary termination” under Employment Agreement) occurs | $--- | $--- | $--- | $--- | $--- | | If “involuntary termination” under Employment Agreement (not within 12 months prior to, at the time of or within 24 months after change in control) occurs | $950,019(1) | $--- | $--- | $--- | $--- | | If “involuntary termination” under Employment Agreement occurs within 12 months prior to, at the time of or within 24 months after a change in control | $950,019(1) | $--- | $--- | $121,814(2) | $1,135,506(3) | | If termination occurs as a result of death | $100,000(4) | $--- | $87,500(5) | $121,814(2) | $--- | | If termination occurs due to disability | $--- | $--- | $--- | $121,814(2) | $--- |
Option Exercises and Stock Vested
| (1) Represents the total salary and bonus continuation payments payable monthly to Mr. W. Turner under his employment agreement, as described under “Employment Agreements,” for the remaining term of the agreement (i.e., through September 30, 2028, assuming Mr. W. Turner’s employment were “involuntarily terminated” (as defined under “Employment Agreements”) on December 31, 2023). The monthly payment amount would be $16,667. | | (2) Represents the value of acceleration of unvested stock options, based on the closing price of Bancorp’s common stock on December 29, 2023 ($59.35) and the exercise prices of the options. All unvested options vest upon a change in control, regardless of whether Mr. W. Turner’s employment is “involuntarily terminated.” All unvested options also vest in the event Mr. W. Turner’s employment is terminated due to death or disability. | | (3) Represents the lump sum amount payable to Mr. W. Turner under his employment agreement in the event his employment is “involuntarily terminated” within the 12 months preceding, at the time of or within 24 months after a change in control of Bancorp, as described under “Employment Agreements.” | | (4) Represents the amount of Mr. W. Turner’s salary that he would have earned had he remained employed by Bancorp through the 180th day after the date of death, payable to Mr. W. Turner’s estate or designated beneficiary in accordance with his employment agreement. | | (5) Represents the death benefit payable under the supplemental life insurance policy maintained by Great Southern for Mr. W. Turner and other officers. |
Option Exercises and Stock Vested
Joseph W. Turner
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| Termination Scenario | Salary and Bonus Continuation ($) | Continuation of Health and Other Insurance Benefits ($) | Life Insurance Benefit ($) | Accelerated Vesting of Stock Options ($) | Payment of 299% of “Base Amount” ($) | | If termination for cause occurs | $--- | $--- | $--- | $--- | $--- | | If voluntary termination (not constituting “involuntary termination” under Employment Agreement) occurs | $--- | $--- | $--- | $--- | $--- | | If “involuntary termination” under Employment Agreement (not within 12 months prior to, at the time of or within 24 months after change in control) occurs | $6,544,702(1) | $33,497(2) | $--- | $--- | $--- | | If “involuntary termination” under Employment Agreement occurs within 12 months prior to, at the time of or within 24 months after a change in control | $6,544,702(1) | $33,497(2) | $--- | $121,814(3) | $4,252,146(4) | | If termination occurs as a result of death | $217,500(5) | $--- | $235,000(6) | $121,814(3) | $--- | | If termination occurs due to disability(7) | $--- | $--- | $--- | $121,814(3) | $--- |
Option Exercises and Stock Vested
| (1) Represents the total salary and bonus continuation payments payable monthly to Mr. J. Turner under his employment agreement, as described under “Employment Agreements,” for the remaining term of the agreement (i.e., through September 30, 2028, assuming Mr. J. Turner’s employment were “involuntarily terminated” (as defined under “Employment Agreements”) on December 31, 2023). The monthly payment amount would be $114,819. | | (2) Represents the approximate cost to Bancorp of providing the health and other insurance benefits described under “Employment Agreements,” to which Mr. J. Turner would be entitled for the remaining term of his employment agreement (i.e., through September 30, 2028, assuming Mr. J. Turner’s employment were terminated on December 31, 2023). Amount shown represents the aggregate share of the premium payments to be made by Bancorp, based on the monthly premium rates in effect on December 31, 2023. | | (3) Represents the value of acceleration of unvested stock options, based on the closing price of Bancorp’s common stock on December 29, 2023 ($59.35) and the exercise prices of the options. All unvested options vest upon a change in control, regardless of whether Mr. J. Turner’s employment is “involuntarily terminated.” All unvested options also vest in the event Mr. J. Turner’s employment is terminated due to death or disability. | | (4) Represents the lump sum amount payable to Mr. J. Turner under his employment agreement in the event his employment is “involuntarily terminated” within the 12 months preceding, at the time of or within 24 months after a change in control of Bancorp, as described under “Employment Agreements.” | | (5) Represents the amount of Mr. J. Turner’s salary that he would have earned had he remained employed by Bancorp through the 180th day after the date of death, payable to Mr. J. Turner’s estate or designated beneficiary in accordance with his employment agreement. | | (6) Represents the aggregate death benefits payable under the supplemental life insurance coverage maintained by Great Southern for Mr. J. Turner and other officers ($175,000) and the term life insurance coverage maintained for all employees generally ($60,000). Does not include the death benefit ($8 million) payable under a separate term life insurance policy maintained by Mr. J. Turner for which Great Southern pays the premiums. | | (7) Under this scenario, Mr. J. Turner would be entitled to benefits under (i) the long-term disability insurance coverage maintained by Great Southern for Mr. J. Turner and other officers and (ii) a separate long-term disability insurance policy maintained by Mr. J. Turner for which Great Southern pays the premiums. |
Option Exercises and Stock Vested
Messrs. Copeland, Baker and Bugh. None of Messrs. Copeland, Baker or Bugh has an employment or severance agreement with Bancorp or any of its subsidiaries. Each of Messrs. Copeland, Baker and Bugh held unvested stock options as of December 31, 2023, the vesting of which accelerates upon a change in control of Bancorp or upon a termination of employment due to death or disability. If a change in control of Bancorp had occurred on December 31, 2023, or if their employment had terminated on that date due to death or disability, the values that would have been realized with respect to the unvested options held by Messrs. Copeland, Baker and Bugh as a result of the accelerated vesting of such options (based on the closing price of Bancorp’s common stock on December 29, 2023 ($59.35) and the exercise prices of the options) are $44,502, $73,926 and $73,926, respectively. If vesting also accelerated with respect to the alternative cash payment Mr. Copeland elected to receive in lieu of a stock option grant during 2023, he would have realized an additional $45,043 in value. Great Southern maintains supplemental life insurance for Messrs. Copeland, Baker and Bugh, along with other officers. If Messrs. Copeland, Baker and Bugh were to have died on December 31, 2023, the death benefit payable for each officer under the supplemental life insurance coverage would have been $175,000. This is in addition to the term life insurance benefit generally available to all employees (which would have provided a death benefit of $60,000 for each of Messrs. Copeland, Baker and Bugh). Compensation Committee Report The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained above with management and, based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. Submitted by the Compensation Committee of Bancorp’s Board of Directors:
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| Kevin R. Ausburn Thomas J. Carlson Amelia A. Counts Steven D. Edwards Debra Mallonee (Shantz) Hart Douglas M. Pitt Earl A. Steinert, Jr. |
Option Exercises and Stock Vested
CEO Pay Ratio As required by the Dodd-Frank Act and the SEC’s implementing rules, we are providing the following information about the relationship of the compensation of our President and CEO, Joseph W. Turner, to the compensation of our median employee. The pay ratio set forth below is a reasonable estimate determined in a manner consistent with the SEC’s rules. For 2023, our last completed fiscal year:
Option Exercises and Stock Vested
| ● | the annual total compensation of our median employee was $38,061; |
Option Exercises and Stock Vested
| ● | the annual total compensation of our President and CEO was $1,779,242; and |
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| ● | the ratio of the annual total compensation of our President and CEO to the annual total compensation of our median employee was 47 to 1. |
Option Exercises and Stock Vested
To identify our median employee, as well as to determine the annual total compensation of our median employee and our President and CEO, we took the following steps:
Option Exercises and Stock Vested
| ● | To identify the “median employee,” we compared the amount of total cash earnings (base salary, bonus, paid time off and any other cash payments) during the year ended December 31, 2023 for each employee (other than our President and CEO) included in our payroll records as of December 31, 2023. Earnings were annualized for those employees who were not employed for the full year. Because there was an |
Option Exercises and Stock Vested
| even number of employees in the population, we designated the employee with the lower level of compensation between the two middlemost employees as the median employee. |
Option Exercises and Stock Vested
| ● | Once we identified our median employee, we combined all of the applicable elements of such employee’s compensation for 2023 in accordance with the SEC’s rules for reporting compensation in the Summary Compensation Table, and used the amount that would be reportable in the “Total” column of that table as such employee’s annual total compensation. |
Option Exercises and Stock Vested
| ● | With respect to the annual total compensation of our President and CEO, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table included in this proxy statement. |
Option Exercises and Stock Vested
Pay Versus Performance As required by the Dodd-Frank Act and the SEC’s implementing rules, we are providing the following information about the relationship between executive compensation actually paid and certain measures of financial performance. For further information concerning the Company’s compensation philosophy and how the Company seeks to align executive compensation with its performance, see the “Compensation Discussion and Analysis” section above. The following table sets forth information concerning the compensation of our named executive officers (“NEOs”) for each of the fiscal years ended December 31, 2023, 2022, 2021 and 2020 and our financial performance for each fiscal year:
Option Exercises and Stock Vested
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | Net Income (in thousands) (7) | Diluted Earnings Per Common Share(8) | | 2023 | $1,779,242 | $1,648,996 | $636,394 | $560,841 | $107.03 | $100.08 | $67,800 | $5.61 | | 2022 | 1,696,915 | 1,769,914 | 558,415 | 619,756 | 104.07 | 98.03 | 75,948 | 6.02 | | 2021 | 1,671,003 | 1,838,211 | 525,616 | 621,300 | 100.94 | 113.59 | 74,627 | 5.46 | | 2020 | 1,604,219 | 1,194,469 | 551,353 | 336,824 | 81.25 | 85.98 | 59,313 | 4.21 |
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| (1) Represents the total compensation of our principal executive officer (“PEO”), Joseph W. Turner, as reported in the Summary Compensation Table (“SCT”) for each year indicated. Refer to the “Summary Compensation Table” above. Mr. J. Turner served as our PEO during those years. |
Option Exercises and Stock Vested
| (2) Represents the amount of “compensation actually paid” to Mr. J. Turner, as computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid to Mr. J. Turner during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. J. Turner’s total compensation for each year to determine the compensation actually paid: |
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Reconciliation of PEO SCT Total and Compensation Actually Paid
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| | 2023 | 2022 | 2021 | 2020 | | Total compensation as reported in SCT | $1,779,242 | $1,696,915 | $1,671,003 | $1,604,219 | | Pension values reported in SCT for covered fiscal year | (157,000) | --- | (14,000) | (258,000) | | Pension value attributable to covered fiscal year’s service and any change in pension value attributable to plan amendments made in covered fiscal year | 43,000 | 40,000 | 39,000 | 34,000 | | Fair value of equity awards granted during covered fiscal year | (91,494) | (105,144) | (89,590) | (54,750) | | Fair value of equity awards granted in covered fiscal year and that were unvested at end of such covered fiscal year - valued at year-end | 130,806 | 110,370 | 103,075 | 94,125 | | Change in fair value from end of prior fiscal year to end of covered fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year | (15,594) | 19,565 | 102,823 | (152,630) | | Change in fair value from end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during covered fiscal year | (39,964) | 8,208 | 25,900 | (72,495) | | Total compensation actually paid to PEO | $1,648,996 | $1,769,914 | $1,838,211 | $1,194,469 |
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| (3) Represents the average of the total compensation of each of our non-PEO NEOs as reported in the SCT for each year indicated. The non-PEO NEOs included in this calculation for each year are as follows: William V. Turner, Rex A. Copeland, Kevin L. Baker and John M. Bugh. |
Option Exercises and Stock Vested
| (4) Represents the average of the total compensation actually paid to our named non-PEO NEOs as reported in the SCT, as computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid to the non-PEO NEOs during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the non-PEO NEOs as a group for each year to determine the compensation actually paid: |
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Reconciliation of Non-PEO NEOs SCT Total and Compensation Actually Paid
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| | 2023 | 2022 | 2021 | 2020 | | Total compensation as reported in SCT | $636,394 | $558,415 | $525,616 | $551,353 | | Pension values reported in SCT for covered fiscal year | (95,000) | --- | (38,333) | (128,000) | | Pension value attributable to covered fiscal year’s service and any change in pension value attributable to plan amendments made in covered fiscal year | 36,000 | 38,500 | 37,500 | 32,500 | | Fair value of equity awards granted during covered fiscal year | (51,026) | (74,814) | (63,580) | (38,325) | | Fair value of equity awards granted in covered fiscal year and that were unvested at end of such covered fiscal year - valued at year-end | 72,950 | 78,533 | 73,150 | 65,888 | | Change in fair value from end of prior fiscal year to end of covered fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year | (11,033) | 13,695 | 70,055 | (100,476) | | Change in fair value from end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during covered fiscal year | (27,444) | 5,427 | 16,892 | (46,116) | | Total average compensation actually paid to non-PEO NEOs | $560,841 | $619,756 | $621,300 | $336,824 |
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| (5) Represents the cumulative four-year total return to shareholders of our common stock and assumes that the value of the investment was $100 on December 31, 2019 and that the subsequent dividends were reinvested. The stock price performance included in this column is not necessarily indicative of future stock price performance. |
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| (6) Represents a cumulative four-year total return to shareholders of a peer group calculated using the same method described in footnote (5). For all years listed, the peer group used is the S&P U.S. BMI Banks Midwest Region Index. |
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| (7) Represents our reported net income reflected in the Company’s audited financial statements for each year indicated. |
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| (8) Represents our diluted earnings per common share, for each year indicated, which we believe represents the most important financial performance measure that was used to link compensation actually paid to our PEO and non-PEO NEOs for the most recent fiscal year to Company performance. |
Relationship Between Compensation Actually Paid to our NEOs and Company Performance
Relationship Between Compensation Actually Paid to our NEOs and Company Performance The following graphs show the relationship between the compensation actually paid to our PEO and the average of the compensation actually paid to our other NEOs to our total shareholder return, net income and diluted earnings per common share and the relationship between our cumulative total shareholder return and the cumulative total shareholder return of the peer group, each over the four most recently completed fiscal years as reported in the table above: PROPOSAL II. ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION We are required, like most other publicly held companies, to include a non-binding vote to approve the compensation of our executives in our proxy statement pursuant to the Dodd-Frank Act and the SEC’s implementing rules, commonly known as a “say on pay” vote. The Dodd-Frank Act requires that we include a say on pay vote in our annual meeting proxy statement at least once every three years, and that at least once every six years we hold a non-binding, advisory vote on the frequency of future say on pay votes (commonly referred to as a “say on pay frequency vote”), with stockholders having the choice of every year, every two years or every three years. We last held a say on pay frequency vote at our 2018 annual meeting of stockholders, and the most votes were received for a frequency of every year. Our Board of Directors determined, in light of those results, that we would include a say on pay vote in our annual meeting proxy materials every year until the next required say on pay frequency vote, which will be held at the upcoming Annual Meeting. See “Proposal III. Advisory (Non-Binding) Vote on the Frequency of Future Advisory Votes on Executive Compensation.” The say on pay proposal at the Annual Meeting gives stockholders the opportunity to endorse or not endorse the compensation of the Company’s named executive officers as disclosed in this proxy statement. The proposal will be presented at the Annual Meeting as a resolution in substantially the following form: RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the Company’s proxy statement for the annual meeting pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved. This vote will not be binding on Bancorp’s Board of Directors and may not be construed as overruling a decision by the Board or create or imply any additional fiduciary duty on the Board. Nor will it affect any compensation paid or awarded to any executive. The Compensation Committee and the Board may, however, take into account the outcome of the vote when considering future executive compensation arrangements. The purpose of our compensation policies and procedures is to attract and retain experienced, highly qualified executives critical to our long-term success and enhancement of stockholder value. The Board of Directors believes that our compensation policies and procedures achieve this objective, and therefore recommends that stockholders vote FOR this proposal. PROPOSAL III. ADVISORY (NON-BINDING) VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION Under the Dodd-Frank Act, in addition to providing stockholders with the opportunity to cast an advisory vote on executive compensation, we are required this year to include in this proxy statement and present at the Annual Meeting a non-binding stockholder vote on whether an advisory vote on executive compensation should be held every year, every two years or every three years. At our 2018 annual meeting of stockholders, when we last held this frequency vote, our stockholders expressed a preference to hold a say on pay vote every year. Based on the results of the 2018 frequency vote, our Board of Directors determined to hold a say on pay vote every year until the next required say on pay frequency vote at this year’s Annual Meeting. After considering the practices by other companies in this area, the Board and Compensation Committee continue to believe that holding an advisory vote on executive compensation each year is the optimal interval for conducting and responding to a say on pay vote. Stockholders have the opportunity to choose among four options (holding the advisory vote on executive compensation every year, every two years, every three years or abstaining) and, therefore, stockholders will not be voting to approve or disapprove the Board’s recommendation. Although this advisory vote on the frequency of the say on pay vote is nonbinding, the Board and the Compensation Committee may take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation. The Board of Directors recommends that stockholders vote for a say on pay frequency of “ONE YEAR” (meaning every year).
PRINCIPAL STOCKHOLDERS AND STOCK HOLDINGS OF MANAGEMENT
| to such shares, 8,000 shares which may be acquired through option exercises, 7,381 shares held in a trust account for Ms. Brown’s children, 104,890 shares held by the Turner Family Foundation, a charitable foundation of which Ms. Brown, Mr. J. Turner and Mr. W. Turner are directors, and 1,566,024 shares held by the Turner Family Limited Partnership, of which Ms. Brown and Mr. J. Turner are the general partners. Ms. Brown and Mr. J. Turner share voting and dispositive powers over the 1,566,024 shares held by the Turner Family Limited Partnership, and Ms. Brown, Mr. J. Turner and Mr. W. Turner share voting and dispositive powers over the 104,890 shares held by the Turner Family Foundation. |
PRINCIPAL STOCKHOLDERS AND STOCK HOLDINGS OF MANAGEMENT
| (4) Includes 7,000 shares which may be acquired through option exercises. Mr. Steinert has sole voting and dispositive power as to all 946,596 shares listed in the table. | | (5) As reported in an amended Schedule 13G filed with the SEC on January 26, 2024 by BlackRock, Inc. (“BlackRock”). With respect to the shares listed in the table, BlackRock reported having sole voting power as to 805,259 shares and sole dispositive power as to 827,351 shares. | | (6) As reported in an amended Schedule 13G filed with the SEC on February 9, 2024 by Dimensional Fund Advisors, LP (“Dimensional”). With respect to the shares listed in the table, Dimensional reported having sole voting power as to 720,765 shares and sole dispositive power as to 735,261 shares. |