DEF 14A of Northwest Bancshares, Inc.
Filed Mar 8, 2024 · FY20230001193125-24-063000
PROPOSAL 1 — ELECTION OF DIRECTORS
PROPOSAL 1 — ELECTION OF DIRECTORS Our Board of Directors is expected to consist of 12 members, effective immediately following the Annual Meeting. Our bylaws provide that directors are divided into three classes, as nearly equal in number as reasonably possible, such that approximately one-third of the directors are to be elected annually. Our directors are generally elected to serve for a three-year period, or a shorter period if the director is elected to fill a vacancy, and until their respective successors shall have been elected and shall qualify. Four directors will be elected at the Annual Meeting and will serve until their successors have been elected and qualified. The Nominating and Corporate Governance Committee has nominated Deborah J. Chadsey, Wilbur R. Davis, Timothy M. Hunter and David M. Tullio to serve as directors for three-year terms. Each individual is currently a member of the Board of Directors. The table below sets forth certain information regarding our nominees and the composition of our Board of Directors as of February 20, 2024 (with age information as of December 31, 2023), including the terms of office of Board members. It is intended that the proxies solicited on behalf of the Board of Directors (other than proxies in which the vote is withheld as to a nominee) will be voted at the Annual Meeting for the election of the nominees identified below. If one or more nominees is unable to serve, the shares represented by all such proxies will be voted for the election of such substitute or substitutes as the Nominating and Corporate Governance Committee may recommend. At this time, the Board of Directors knows of no reason why the nominees might be unable to serve, if elected. Except as indicated herein, there are no arrangements or understandings between the nominees and any other person pursuant to which such nominees were selected. None of our Directors or Executive Officers had any shares pledged as collateral as of February 20, 2024. We have adopted a policy that prohibits our insiders from (i) pledging of Northwest Bancshares, Inc. stock as collateral against a loan or line of credit or holding Northwest Bancshares, Inc. stock in a margin account; and (ii) conducting any hedging activities (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) designed to offset any decrease in the market value of Northwest Bancshares, Inc. stock. The Board of Directors unanimously recommends that you vote “FOR” each of the persons nominated by the Board of Directors.
PROPOSAL 1 — ELECTION OF DIRECTORS
| Name (1) | Age | Positions held in Northwest Bancshares, Inc. | Director since | Current term to expire | Shares of common stock beneficially owned (2) | Percent of class | | NOMINEES | | | | | | | | Deborah J. Chadsey | 66 | Director | 2012 | 2024 | 82,260(3) | * | | Wilbur R. Davis | 69 | Director | 2020 | 2024 | 126,518(4) | * | | Timothy M. Hunter | 61 | Vice Chairman of the Board | 2015 | 2024 | 184,410(5) | * | | David M. Tullio | 58 | Director | 2020 | 2024 | 25,438(6) | * | | DIRECTORS CONTINUING IN OFFICE | | | | | | | | Robert M. Campana | 64 | Director | 2015 | 2025 | 86,334(7) | * | | Timothy B. Fannin | 70 | Chairman of the Board | 2013 | 2025 | 54,282(8) | * | | John P. Meegan | 64 | Director | 2010 | 2025 | 136,460(9) | * | | Mark A. Paup | 58 | Director | 2016 | 2025 | 88,384(10) | * | | Pablo A. Vegas | 50 | Director | 2022 | 2026 | 7,418 | * | | Amber L. Williams | 49 | Director | 2023 | 2026 | — | * | | Louis J. Torchio | 61 | President, Chief Executive Officer and Director | 2022 | 2026 | 88,702(11) | * | | William W. Harvey, Jr. | 57 | Senior Executive Vice President, Chief Operating Officer, Chief Financial Officer and Director | 2022 | 2026 | 277,028(12) | * | | EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS | | | | | | | | Gregory J. Betchkal | 60 | Executive Vice President, Chief Risk Officer | N/A | N/A | 12,027(13) | * | | John J. Golding | 60 | Senior Executive Vice President, Chief Consumer Banking Officer | N/A | N/A | 98,497(14) | * | | Scott J. Watson | 57 | Executive Vice President, Chief Information Officer | N/A | N/A | 47,890(15) | * | | All directors, nominees and executive officers as a group (15 persons) | | | | | 1,315,648(16) | 1.0% | | | | | | | (footnotes on following page) | |
PROPOSAL 1 — ELECTION OF DIRECTORS
(footnotes from previous page)
PROPOSAL 1 — ELECTION OF DIRECTORS
| * Less than 1%. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (1) The mailing address for each person listed is 3 Easton Oval, Suite 500, Columbus, Ohio 43219. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (2) See definition of “beneficial ownership” in the table in “Voting Securities and Principal Holders Thereof”. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (3) Includes options to purchase 44,292 shares of common stock, which are exercisable within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (4) Includes options to purchase 4,320 shares of common stock, which are exercisable within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (5) Includes options to purchase 37,092 shares of common stock, which are exercisable within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (6) Includes options to purchase 4,320 shares of common stock, which are exercisable within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (7) Includes options to purchase 30,612 shares of common stock, which are exercisable within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (8) Includes options to purchase 27,012 shares of common stock, which are exercisable within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (9) Includes options to purchase 44,292 shares of common stock, which are exercisable within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (10) Includes options to purchase 42,814 shares of common stock, which are exercisable within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (11) Includes options to purchase 32,522 shares of common stock, which are exercisable, and 7,969 restricted stock units (“RSUs”), which are scheduled to vest, both within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (12) Includes options to purchase 55,765 shares of common stock, which are exercisable, and 5,579 RSUs, which are scheduled to vest, both within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (13) Includes 12,027 RSUs which are scheduled to vest within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (14) Includes options to purchase 41,098 shares of common stock, which are exercisable, and 2,220 RSUs, which are scheduled to vest, both within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (15) Includes options to purchase 19,185 shares of common stock, which are exercisable, and 1,727 RSUs, which are scheduled to vest, both within 60 days of the date as of which beneficial ownership is being determined. |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (16) Includes options to purchase 383,324 shares of common stock, which are exercisable, and 29,522 RSUs, which are scheduled to vest, both within 60 days of the date as of which beneficial ownership is being determined. |
Compensation Discussion and Analysis
Executive Summary. Northwest Bancshares, Inc. (“Company”) is a bank holding company headquartered in Columbus, Ohio. The Company operates Northwest Bank (“Bank”), a full-service financial institution headquartered in Warren, Pennsylvania. Through this subsidiary, the Company, as of December 31, 2023, operates 134 full-service community banking locations, eight free standing drive-through facilities, and 192 automated teller machines in Pennsylvania, New York, Ohio and Indiana. The Company has operated as a community-oriented financial institution since 1896 and has demonstrated a pattern of sustained expansion resulting from strong internal growth combined with a series of mergers, acquisitions, and new office openings. 2023 Business Highlights. Throughout 2023, despite industry-wide challenges, we experienced solid growth and stability across key financial metrics. Total assets reached $14.419 billion by December 31, 2023, marking a $305.8 million increase from the previous year. This growth was underpinned by a $494.4 million increase in gross loans receivable, which rose to $11.415 billion, demonstrating a strategic focus on loan portfolio expansion. Amidst industry funding and liquidity challenges, we successfully navigated the landscape, culminating in a 4.5% increase in total deposits, reaching $11.980 billion by the end of 2023. This achievement not only underscores our ability to maintain a stable and diversified deposit base but also reflects our capacity to adapt and grow during challenging market conditions. We continue to lead our peers with one of the lowest cost of funds and while maintaining one of the lowest uninsured deposit bases in the nation at less than 25% of total deposits (less than 12% when excluding intercompany and collateralized deposits) with an overall average deposit balance of less than $17,000 per account. In tandem with our asset and deposit growth, net income for the year increased by $1.3 million, reaching $135.0 million, or $1.06 per diluted share, when earnings for the banking sector generally declined. Furthermore, we delivered solid returns on average shareholders’ equity and assets, with annualized returns for 2023 at 8.94% and 0.95%, respectively, showcasing our commitment to delivering value to our shareholders. Additionally, our net interest income grew by $15.0 million, reaching $435.7 million for the year, which reflects our ability to effectively manage the interest rate environment and optimize our balance sheet. Despite the macroeconomic challenges, our asset quality remains stable with overall delinquency at approximately 0.82% and 90-day delinquency at just 0.22%. And our capital levels remain strong with Tangible Common Equity (“TCE”) of 8.30% and all regulatory capital ratios comfortably above “Well Capitalized” levels providing flexibility for future growth and capital management strategies. 2023 Compensation Highlights. Our executive compensation program has three primary elements: base salary, annual incentives, and long-term equity incentives. Each of these compensation elements serves a specific purpose in our compensation strategy. Base salary is an essential component to any market-competitive compensation program. Annual incentives reward the achievement of short-term goals, while long-term incentives drive our NEOs to focus on long-term sustainable shareholder value creation. Based on our performance and consistent with the design of our program, the Compensation Committee made the following executive compensation decisions for fiscal 2023:
Compensation Discussion and Analysis
| • | Annual Incentives. Based on our financial performance in 2023, the funding of the Management Bonus was set at 85% of each NEO’s applicable bonus target. |
Compensation Discussion and Analysis
| • | Long-Term Equity Incentives. Long-term equity incentive awards were granted to the NEOs using an equally weighted mix of PSUs and RSUs. |
Compensation Discussion and Analysis
| What we do | | What we don’t do | | | ✓ | Place an emphasis on performance-based, variable compensation | × | We do not allow repricing of underwater stock options without shareholder approval | | ✓ | Maintain robust stock ownership guidelines | × | We do not have excessive perquisites | | ✓ | Annual say-on-pay vote | × | We do not allow hedging or short sales or pledging of our securities | | ✓ | Double-trigger vesting for equity awards in the event of a change in control under our long-term incentive plan | × | We do not pay dividends or dividend equivalents on unearned performance-based awards | | ✓ | Maintain a recoupment (“clawback”) policy | × | We do not have tax gross ups | | ✓ | Use an independent compensation consultant | × | We do not allow short selling or the use of Company stock as collateral for loans |
Executive Compensation Decision-Making Process
| • | assist in developing goals for the short- and long-term incentive plans; |
Executive Compensation Decision-Making Process
Pearl Meyer reports directly to the Compensation Committee and does not provide any other services to the Company. The Compensation Committee analyzed whether the work of Pearl Meyer raised any conflicts of interest, taking into consideration the following factors, among others: (i) the provision of other services to the Company by Pearl Meyer; (ii) the amount of fees the Company paid to Pearl Meyer as a percentage of Pearl Meyer’s total revenues; (iii) Pearl Meyer’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Pearl Meyer or the individual compensation advisors employed by Pearl Meyer with any executive officer of the Company; (v) any business or personal relationship of the individual compensation advisors with any member of the Compensation Committee; and (vi) any stock of the Company owned by Pearl Meyer or the individual compensation advisors employed by Pearl Meyer. The Compensation Committee determined, based on its analysis of the above factors, among others, that the work of Pearl Meyer and the individual compensation advisors employed by Pearl Meyer as compensation consultants to the Company have not created any conflicts of interest. The Role of Peer Group Companies. The Compensation Committee strives to set a competitive level of total compensation for each NEO as compared with executive officers in similar positions at peer companies. In evaluating NEO compensation, we utilize market information which is supported by benchmark data from our peer group, as well as Pearl Meyer and McLagan, an Aon Hewitt company (“McLagan”), both nationally recognized compensation consulting firms. We establish compensation targets for substantially all of our employees so that their total cash compensation opportunity would be approximately between 15% below to 15% above the market median for fully qualified and experienced employees. For the year ended December 31, 2023, we utilized financial services survey data from McLagan in reviewing compensation for substantially all employees, including executive officers. McLagan was utilized by Northwest Bancshares, Inc. based on their comprehensive set of reports within the financial services industry. McLagan provides complete compensation coverage for each job position in the financial services industry by extensive analysis of salaries, incentive eligible positions, incentive amounts with regard to base salaries, and total cash compensation. In addition, analysis by company size and geographic location is performed and categorized by jobs based on levels of responsibility and experience. On an annual basis, with assistance from Pearl Meyer, the Company conducts a benchmarking and peer group exercise with the Compensation Committee. In September 2022, Pearl Meyer presented a review of the Company’s peer group using publicly traded U.S. banks with assets as of June 30, 2022 ranging from approximately 50% to 200% of the Company’s asset size. The Compensation Committee considered the “compatibility” and “comparability” of each company when selecting the 2023 peer group. The Compensation Committee reviewed, among other things, each peer company’s asset size, earnings, portfolio mix, geographical location, organizational structure and governance, number of employees, number of branch offices and service offerings. Following selection and approval by the Compensation Committee of the peer group listed in the table, the Company was positioned near the median of the group in terms of asset size.
2023 Executive Compensation Program in Detail
Annual Incentives. We provide performance-based cash incentive awards to eligible personnel, including executive officers, under the Management Bonus Plan. Cash incentives are used to motivate and reward achievement of corporate and individual performance objectives. Funding for the Management Bonus Plan is based on an assessment of the Bank’s actual performance relative to the Compensation Committee’s pre-established financial performance levels based on a combination of financial factors as well as a comparison against a predetermined peer group. Actual payouts depend on the achievement of pre-determined financial performance objectives and can range from 0% to 150% of target award amounts. Management Bonus Target Opportunity. Target annual bonus opportunities are expressed as a percentage of base salary and were established by the NEO’s level of responsibility and their ability to impact overall results. The Compensation Committee also considers market data in setting target award amounts. Target award opportunities for 2023 were as follows:
2023 Executive Compensation Program in Detail
| | | Annual target bonus | | | Name | 2023 Base salary | Percent | Dollar | | Louis J. Torchio | $824,000 | 55% | $453,200 | | William W. Harvey, Jr. | 721,000 | 50% | 360,500 | | Gregory J. Betchkal | 556,000 | 50% | 278,000 | | John J. Golding | 382,500 | 40% | 153,000 | | Scott J. Watson | 382,500 | 35% | 133,875 |
2023 Executive Compensation Program in Detail
| | | Performance range | | | | | | Performance measures | Weighing | Threshold (25% payout) | Target (100% payout) | Maximum (150% payout) | Actual result | | | ROAA | 25% | 0.94% | 1.14% | 1.25% | 0.95 | | | ROAE | 25% | 8.80% | 10.88% | 12.04% | 8.94 | | | Efficiency Ratio | 25% | 61.92% | 57.74% | 57.22% | 62.15 | %* | | Loan Growth | 25% | 6.00% | 9.84% | 11.00% | 4.53 | |
2023 Executive Compensation Program in Detail
Recognizing that the above strategic actions were not part of the target-setting process at the beginning of 2023, the Compensation Committee determined that performance against the original targets didn’t appropriately reflect the Company’s actual performance achievements for 2023. The Committee also considered Company’s performance at approximately 85% of its original net income budget despite the liquidity disruption in the marketplace which caused a significant increase in industry funding costs due to the unprecedented duration of the inverted yield curve, impact on margin, and the three bank failures which drove uncertainty within the mid-sized regional banking segment. As a result, the Compensation Committee elected to fund the Management Bonus at 85% of each NEO’s applicable bonus target. Management Bonus Payouts. Based on the above results, the Compensation Committee determined that the management bonuses should be paid at a level between the Threshold and Target levels for all NEO, as summarized in the table below:
2023 Executive Compensation Program in Detail
| | Target bonus | | Actual bonus | | | Name | Percent | Dollar | Percent | Dollar | | Louis J. Torchio | 55% | $453,200 | 51.4% | $423,500 | | William W. Harvey, Jr. | 50% | 360,500 | 46.8% | 337,400 | | Gregory J. Betchkal | 50% | 278,000 | 44.6% | 248,000 | | John J. Golding | 40% | 153,000 | 34.0% | 130,100 | | Scott J. Watson | 35% | 133,875 | 31.2% | 119,300 |
2023 Executive Compensation Program in Detail
| Award type | Weighting | Design at-a-glance | | PSUs | 50% | PSUs align executive pay with achievement of financial metrics that are the most impactful to shareholders. Performance is measured against both relative and absolute metrics to provide a comprehensive and balanced evaluation of our long-term business performance. NEOs can earn between 0% and 150% of their target award opportunity. If achievement warrants and the executive remains employed by the Company, PSUs vest at the end of the three-year performance period. | | RSUs | 50% | RSUs granted to NEOs in fiscal 2023 vest in equal installments each year on the first three anniversaries of the grant date. |
2023 Executive Compensation Program in Detail
| | | Long term incentive target award opportunity | | | Name | Base salary | Percent | Value | | Louis J. Torchio | $800,000 | 75% | $600,000 | | William W. Harvey, Jr. | 700,000 | 60% | 420,000 | | Gregory J. Betchkal | 556,000 | 60% | 333,600 | | John J. Golding | 371,315 | 45% | 167,092 | | Scott J. Watson | 371,315 | 35% | 129,960 |
2023 Executive Compensation Program in Detail
| | PSUs | | RSUs | | | Name | Target # of units | Target value | # of units | Value | | Louis J. Torchio | 23,438 | $300,000 | 23,438 | $300,000 | | William W. Harvey, Jr. | 16,407 | 210,000 | 16,407 | 210,000 | | Gregory J. Betchkal* | 13,032 | 166,800 | 13,032 | 166,800 | | John J. Golding | 6,528 | 83,546 | 6,528 | 83,546 | | Scott J. Watson | 5,077 | 64,980 | 5,077 | 64,980 |
2023 Executive Compensation Program in Detail
| * In addition to his regular annual award, on March 6, 2023, Mr. Betchkal received a one-time, new-hire equity grant of 22,339 RSUs, valued at $300,013 using the pre-share closing price of the Company’s common stock on the grant date. These RSUs are not included in the table above and vest in equal one-third tranches starting on the first anniversary of the grant date. |
2023 Executive Compensation Program in Detail
The number of units was calculated using the per-share closing price of the Company’s common stock on the grant date approved by the Board. Executives may earn the performance share unit portion of their awards by achieving certain metrics as established by the Compensation Committee over a three-year performance period. A Closer Look at PSUs. The Compensation Committee believes that PSUs provide appropriate incentives for management to focus on long-term financial results, and that these performance goals correlate with the value of our common stock. NEOs can earn between 0% and 150% of their target award opportunity. The actual number of PSUs that are earned and vested is based on the achievement of pre-determined financial performance metrics at the end of a three-year performance period, as outlined below:
2023 Executive Compensation Program in Detail
| Metric | Weighting | Detail | | Relative Return on Average Assets (“rROAA”) | 100% | • Measured relative to the peer group over a three-year period | | | | • Provides a comprehensive view of relative financial performance and efficiency | | | | • Enables stakeholders to assess the overall health and competitiveness of the Company |
2023 Executive Compensation Program in Detail
| | Performance range | | | | | Threshold | Target | Maximum | | Peer Group Rank | 25th percentile | 50th percentile | 75th percentile | | PSU Payout (as a % of Target) | 50% | 100% | 150% |
Other Practices, Policies & Guidelines
| • | 50% of an executive’s target long-term incentive value was awarded as RSUs vesting in one-third increments on each of the first, second and third anniversaries of the date of the grant; and |
Other Practices, Policies & Guidelines
| • | 50% of the executive’s target long-term incentive value was awarded as PSUs which will have a three year cliff vesting schedule. |
Other Practices, Policies & Guidelines
The number of units was calculated using the per share closing price of the Company’s common stock on the grant date approved by the Board. Executives may earn the performance share unit portion of their awards by achieving certain metrics as established by the Compensation Committee over a three-year performance period. Grants of stock awards to an individual are based primarily on the individual’s level of responsibility, their performance, and market pricing for their individual role. Individual performance is evaluated using certain general elements applicable to all employees, including accountability, collaboration, customer experience, mentoring/coaching, and continuous improvement. Job specific elements for measuring the individual performance of our NEOs include the individual’s contributions to our operations and performance in the following areas: Mr. Torchio – strategic, operational and profitability considerations; Mr. Harvey – strategic, financial records/reporting, administrative, facilities and profitability considerations; Mr. Betchkal – strategic and risk management considerations; Mr. Golding – strategic, consumer banking, administrative and profitability considerations; and Mr. Watson – strategic, information systems, administrative and profitability considerations. These performance measures are not quantitative or otherwise measurable targets. Rather, stock award grants are based on the Named Executive Officer’s overall performance, which factors in how the officer performed in their areas of responsibility. The grant value is based off of a percentage of base determined by market and peer group comparisons for each role. During the year ended December 31, 2023, under the 2022 Equity Incentive Plan, the Compensation Committee granted stock awards to employees, with different amounts given for different roles and levels of responsibility within our organization. Messrs. Torchio, Harvey, Betchkal, Golding and Watson were awarded 23,438, 16,407, 13,032, 6,528 and 5,077 RSUs, respectively, and 23,438, 16,407, 13,032, 6,528 and 5,077 PSUs. In addition, Mr. Betchkal was awarded an additional 22,339 of RSUs during 2023 as a one-time, new-hire equity grant. In 2023, the Company awarded a total of 33,048 RSAs to the independent directors, which fully vest one year from the grant date, a total of 385,751 RSUs to certain employees, which vest over a three-year period with the first vesting occurring one year from the grant date, and a total of 176,623 PSUs to certain employees. Under the 2022 plan, 2,407,254 shares remain available for grant. The Key Performance Indicator (“KPI”) utilized to measure performance relative to the peer group is rROAA. The number of PSUs earned at the end of the three-year performance period will be based on the attainment of performance levels, including threshold, target, and maximum, and associated payouts will be established at the beginning of the performance cycle. Threshold performance will be achieved at the 25th percentile of the approved compensation peer group, Target performance at the 50th percentile of the peer group, and Maximum performance is at the 75th percentile of the peer group. At the end of each performance cycle, actual performance and the resulting payouts will be determined. Performance below “threshold” for a given performance measure will result in forfeiture of the respective PSUs; performance at or above “maximum” for a given performance measure will result in payout equal to 150% of the respective target PSUs. Performance between threshold, target, and maximum will be determined using straight line interpolation and rounded up to the nearest whole number of PSUs. As a condition to receiving an annual performance-based equity incentive award, our NEOs agree that any award is subject to recovery by us if the executive’s actions during that fiscal year that resulted in payment of the award are deemed by the Board of Directors to be illegal, unsafe or unsound or resulted in an elevated risk profile beyond the tolerances established by the Board of Directors. In addition, in the case of PSUs, each award is subject to clawback by the Company as may be required by applicable law, SEC or NASDAQ rule or regulation or the Company’s clawback policy.
Executive Compensation
| Summary compensation table | | | | | | | | | | | Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($)(1) | Option awards ($)(2) | Non-equity incentive plan compensation ($) | Change in pension value and nonqualified deferred compensation earnings ($)(3) | All other compensation ($)(4) | Total ($) | | Louis J. Torchio President, Chief Executive Officer and Director | 2023 | 816,615 | 258,331 | 511,417 | — | 206,000 | 107,523 | 32,835 | 1,932,721 | | | 2022 | 529,548 | 26,477 | 151,159 | — | 436,000 | 13,422 | 34,285 | 1,190,891 | | | 2021 | 375,577 | 15,023 | 99,180 | 9,901 | 127,000 | 49,605 | 46,278 | 722,564 | | William W. Harvey, Jr. Senior Executive Vice President, Chief Operating Officer, Chief Financial Officer and Director | 2023 | 714,538 | 208,727 | 358,001 | — | 164,400 | 154,127 | 34,876 | 1,634,669 | | | 2022 | 643,526 | 32,176 | 259,565 | — | 429,940 | — | 39,641 | 1,404,848 | | | 2021 | 484,392 | 24,220 | 99,180 | 9,901 | 200,200 | 4,877 | 42,102 | 864,872 | | Gregory J. Betchkal Executive Vice President, Chief Risk Officer | 2023 | 438,385 | 136,068 | 550,639 | — | 120,700 | — | 15,733 | 1,261,525 | | John J. Golding Senior Executive Vice President, Chief Consumer Banking Officer | 2023 | 379,058 | 85,553 | 142,441 | — | 63,500 | 53,949 | 34,003 | 758,504 | | | 2022 | 367,987 | 18,399 | 141,549 | — | 133,700 | — | 41,255 | 702,890 | | | 2021 | 357,673 | 17,884 | 99,180 | 9,901 | 119,000 | 43,065 | 27,918 | 674,621 | | Scott J. Watson Executive Vice President, Chief Information Officer | 2023 | 379,058 | 80,153 | 110,781 | — | 58,100 | 39,193 | 22,023 | 689,308 | | | 2022 | 367,987 | 14,719 | 110,084 | — | 122,900 | — | 22,949 | 638,639 | | | 2021 | 357,673 | 10,730 | 80,028 | 7,987 | 115,000 | 40,561 | 21,887 | 633,866 | | Mark T. Reitzes Senior Executive Vice President, Commercial Banking (4d) | 2023 | 192,222 | — | 142,441 | — | — | — | 1,605,572 | 1,940,235 | | | 2022 | 367,987 | 14,719 | 141,549 | — | 133,700 | 20,660 | 23,233 | 701,848 | | | 2021 | 357,673 | 10,730 | 99,180 | 9,901 | 108,200 | 52,081 | 21,282 | 659,047 |
Executive Compensation
| Grants of plan-based awards for the year ended December 31, 2023 | | | | | | | | | | | | Name | Grant date | | Estimated future payouts under non-equity-incentive plan awards | | | Estimated future payouts under equity-incentive plan awards | | | All other stock awards: number of shares or units (#) | Grant date fair value of stock and option awards ($) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Louis J. Torchio | | | 113,300 | 453,200 | 679,800 | | | | | | | | March 15, 2023 | (a) | | | | — | 23,438 | — | 23,438 | 264,381 | | | March 15, 2023 | (b) | | | | 11,719 | 23,438 | 35,157 | — | 247,037 | | William W. Harvey, Jr. | | | 90,125 | 360,500 | 540,750 | | | | | | | | March 15, 2023 | (a) | | | | — | 16,407 | — | 16,407 | 185,071 | | | March 15, 2023 | (b) | | | | 8,204 | 16,407 | 24,611 | — | 172,930 | | Gregory J. Betchkal | | | 69,500 | 278,000 | 417,000 | | | | | | | | March 15, 2023 | (a) | | | | — | 13,032 | — | 35,371(c) | 413,282(c) | | | March 15, 2023 | (b) | | | | 6,516 | 13,032 | 19,548 | — | 137,357 | | John J. Golding | | | 38,250 | 153,000 | 229,500 | | | | | | | | March 15, 2023 | (a) | | | | — | 6,528 | — | 6,528 | 73,636 | | | March 15, 2023 | (b) | | | | 3,264 | 6,528 | 9,792 | — | 68,805 | | Mark T. Reitzes | March 15, 2023 | (a) | | | | — | — | — | 6,528(d) | 73,636 | | | March 15, 2023 | (b) | | | | — | — | — | — | 68,805 | | Scott J. Watson | | | 33,469 | 133,875 | 200,813 | | | | | | | | March 15, 2023 | (a) | | | | — | 5,077 | — | 5,077 | 57,269 | | | March 15, 2023 | (b) | | | | 2,539 | 5,077 | 7,616 | — | 53,512 |
Executive Compensation
| Outstanding equity awards at December 31, 2023 | | | | | | | | | | | | Name | Option awards | | | | | | Stock awards | | | | | | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#)(1) | Market value of shares or units of stock that have not vested ($)(2) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(3) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(2) | | Louis J. Torchio | 5,349 | 891 | (7) | — | 16.59 | 5/14/2028 | 36,163 | 451,314 | 30,548 | 381,239 | | | 8,916 | 3,564 | (8) | — | 17.27 | 5/22/2029 | | | | | | | 8,975 | 6,495 | (9) | — | 9.71 | 5/20/2030 | | | | | | | 9,282 | 6,188 | (10) | — | 13.68 | 5/25/2031 | | | | | | William W. Harvey, Jr. | 1,440 | — | | — | 13.15 | 5/21/2024 | 39,208 | 489,316 | 25,423 | 317,279 | | | 1,547 | 1,547 | (4) | — | 12.37 | 5/20/2025 | | | | | | | 12,376 | 3,094 | (5) | — | 14.15 | 5/18/2026 | | | | | | | 10,829 | 4,641 | (6) | — | 15.57 | 5/17/2027 | | | | | | | 13,260 | 2,210 | (7) | — | 16.59 | 5/14/2028 | | | | | | | 11,052 | 4,418 | (8) | — | 17.27 | 5/22/2029 | | | | | | | 2,167 | 6,495 | (9) | — | 9.71 | 5/20/2030 | | | | | | | 3,094 | 6,188 | (10) | — | 13.68 | 5/25/2031 | | | | | | Gregory J. Betchkal | — | — | — | — | — | — | 35,371 | 441,430 | 13,032 | 162,639 | | John J. Golding | 3,227 | 1,383 | (6) | — | 15.57 | 5/17/2027 | 20,023 | 249,887 | 13,186 | 164,561 | | | 10,698 | 1,782 | (7) | — | 16.59 | 5/14/2028 | | | | | | | 8,916 | 3,564 | (8) | — | 17.27 | 5/22/2029 | | | | | | | 8,975 | 6,495 | (9) | — | 9.71 | 5/20/2030 | | | | | | | 9,282 | 6,188 | (10) | — | 13.68 | 5/25/2031 | | | | | | Mark T. Reitzes | 4,489 | — | (11) | — | 9.71 | 6/09/2024 | — | — | — | — | | | 9,282 | — | (11) | — | 13.68 | 6/09/2024 | | | | | | Scott. J. Watson | 4,458 | 1,782 | (8) | — | 17.27 | 5/22/2029 | 14,127 | 176,305 | 10,255 | 127,982 | | | 7,239 | 5,241 | (9) | — | 9.71 | 5/20/2030 | | | | | | | 7,488 | 4,992 | (10) | — | 13.68 | 5/25/2031 | | | | |
Executive Compensation
| Option exercises and stock vested for the year ended December 31, 2023 | | | | | | | Option awards | | Stock awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting ($) | | Louis J. Torchio | — | — | 6,136 | 66,544 | | William W. Harvey, Jr. | — | — | 12,230 | 131,448 | | Gregory J. Betchkal | — | — | — | — | | John J. Golding | — | — | 6,616 | 71,678 | | Mark T. Reitzes | — | — | 4,221 | 45,935 | | Scott J. Watson | — | — | 4,168 | 45,262 |
Executive Compensation
| Pension benefits at and for the year ended December 31, 2023 | | | | | | Name | Plan name | Number of years credited service (#) | Present value of accumulated benefit ($) | Payments during last fiscal year ($) | | Louis J. Torchio | Northwest Bank Pension Plan | 6 | 195,482 | — | | | Northwest Savings Bank Non-Qualified Supplemental Retirement Plan | 6 | 98,202 | — | | William W. Harvey, Jr. | Northwest Bank Pension Plan | 28 | 1,002,918 | — | | | Northwest Savings Bank Non-Qualified Supplemental Retirement Plan | 28 | 174,665 | — | | John J. Golding | Northwest Bank Pension Plan | 7 | 204,347 | — | | | Northwest Savings Bank Non-Qualified Supplemental Retirement Plan | 7 | 24,239 | — | | Scott J. Watson | Northwest Bank Pension Plan | 5 | 138,530 | — |
Pay Versus Performance
Pay Versus Performance In accordance with SEC rules, we provide the following disclosure regarding executive “compensation actually paid” (“CAP”) and certain Northwest Bancshares, Inc. performance for the fiscal years listed below. You should refer to our CD&A for a complete description of how executive compensation relates to Northwest Bancshares, Inc. performance and how the Compensation Committee makes its decisions.
Pay Versus Performance
| | Principal Executive Officer (“PEO”)(1) | | | | Non-PEO NEOs (2) | | Value of initial fixed $100 investment based on: | | | | | | Summary compensation on table total | | Compensation actually paid (3) | | Average summary compensation on table total ($) | Average compensation actually paid ($) | Total shareholder return ($) | Peer group total shareholder return ($)(5) | Company metrics | | | Year | 1st PEO ($) | 2nd PEO ($)(4) | 1st PEO ($) | 2nd PEO ($) | | | | | Net income (in thousands)($) | Return on average assets (“ROAA”) | | 2023 | — | 1,932,963 | — | 1,897,705 | 1,094,014 | 1,029,588 | 96.63 | 114.99 | 134,957 | 0.95% | | 2022 | 802,002 | 1,190,891 | 580,603 | 1,255,743 | 862,057 | 933,361 | 101.06 | 107.54 | 133,666 | 0.94% | | 2021 | 1,688,530 | — | 1,758,462 | — | 730,276 | 793,259 | 96.62 | 128.28 | 154,323 | 1.08% | | 2020 | 1,558,296 | — | 1,498,796 | — | 730,029 | 624,237 | 82.01 | 90.81 | 74,854 | 0.58% |
Pay Versus Performance
| (1) Mr. Seiffert served as Chairman, President and CEO during the years presented until his death on May 24, 2022. At this time, Mr. Harvey was appointed interim President and CEO. On August 17, 2022, Mr. Torchio was appointed President and CEO. Given these events, the Company has disclosed Mr. Seiffert’s total compensation and compensation actually paid for the time he served as CEO in 2022, and the full year for 2021 as “1st PEO” and has disclosed Mr. Torchio’s total compensation and compensation actually paid as the “2nd PEO” for 2023 and 2022. Mr. Torchio is then included in the non-PEO NEOs disclosure for 2021. Mr. Harvey’s total compensation and compensation actually paid is included in the non-PEO NEO disclosures for all years presented. |
Pay Versus Performance
| (2) Non-PEO NEOs average calculation includes Messrs. Harvey, Betchkal, Golding and Watson for 2023; Messrs. Harvey, Golding, Reitzes and Watson for 2022; and Messrs. Harvey, Torchio, Golding and Reitzes for 2021. |
Pay Versus Performance
| (3) The following table provides a reconciliation between the summary com p ensation on table total and the compensation actually paid: |
Pay Versus Performance
| | 1st PEO | | | | 2nd PEO | | | | Non-PEO NEOs | | | | | Adjustments from Summary Compensation Table total | 2023 | 2022 | 2021 | 2020 | 2023 | 2022 | 2021 | 2020 | 2023 | 2022 | 2021 | 2020 | | Deduction for change in actuarial present values reported under the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column in the Summary Compensation Table | $— | — | (137,564) | (145,802) | $(107,523) | (13,422) | — | — | $(61,817) | (5,165) | (37,407) | (112,070) | | Increase for service cost of pension plans | — | — | 125,912 | 123,751 | 107,191 | 34,469 | — | — | 35,572 | 34,476 | 49,157 | 50,293 | | Increase/deduction for prior service cost of pension plans | — | — | — | — | — | — | — | — | — | — | — | — | | Deduction for amounts reported under the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table | — | (460,279) | (196,620) | (112,358) | (511,417) | (151,159) | — | — | (290,466) | (163,187) | (109,081) | (63,358) | | Increase based on fair value of awards granted during year that remain unvested as of year-end, determined as of year-end | — | — | 165,456 | 142,627 | 521,964 | 176,755 | — | — | 292,849 | 187,724 | 92,029 | 80,413 | | Increase/deduction for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | — | — | 47,665 | (76,589) | (34,149) | 13,591 | — | — | (29,268) | 13,133 | 30,379 | (58,861) | | Increase based on fair value of awards granted during year that vested during year, determined as of vesting date | — | 273,656 | 36,252 | 16,390 | — | — | — | — | — | — | 19,836 | 9,251 | | Increase/deduction for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during year | — | (46,666) | 7,331 | (23,366) | (19,238) | (6,270) | — | — | (18,337) | (7,086) | 4,978 | (22,080) | | Deduction of fair value of awards granted prior to year that were forfeited during year | — | — | — | — | — | — | — | — | — | — | — | — | | Increase based on dividends or other earnings paid during year prior to vesting date of award | — | 11,890 | 21,500 | 15,847 | 7,914 | 10,888 | — | — | 7,041 | 11,409 | 13,092 | 10,620 | | Total adjustments | $— | (221,399) | 69,932 | (59,500) | $(35,258) | 64,852 | — | — | $(64,426) | 71,304 | 62,983 | (105,792) |
Pay Versus Performance
| (4) Mr. Torchio was appointed as the CEO during 2022. The disclosure for 2022 includes salary of $270,769 for his service as the CEO and $258,779 for his service prior to becoming the CEO. |
Pay Versus Performance
| (5) Peer group total shareholder return reflects the value of $100 investment in the NASDAQ Bank Index. |
Pay Versus Performance
In our assessment, the most important financial performance measures used to link CAP, as calculated in accordance with the SEC rules, to our NEOs in 2023 to our performance were:
Pay Versus Performance
| • | ROAA; |
Pay Versus Performance
| • | ROAE and |
Pay Versus Performance
| • | Efficiency ratio. |
Pay Versus Performance
The following illustrations provide a graphical description of CAP, as calculated in accordance with SEC rules, and the following measures, as well as our cumulative TSR versus our peer group’s cumulative TSR:
Pay Versus Performance
| • | the Company’s cumulative TSR and the Company’s peer group TSR; |
Pay Versus Performance
| • | the Company’s net income; and |
Pay Versus Performance
| • | the Company selected measure, which is ROAA. |
Defined Benefit Plan
Defined Benefit Plan Northwest Bank maintains the Northwest Bank Pensio n P lan (“Pension Plan”), covering substantially all employees who started prior to August 1, 2020 and who satisfy the eligibility requirements of age 21 and the completion of one year of service. The plan is noncontributory and funded by the employer. Northwest Bank annually contributes an amount necessary to at least satisfy the actuarially determined minimum funding requirements under Section 430 of the Internal Revenue Code and in accordance with the Employee Retirement and Income Security Act of 1974, as amended (“ERISA”). For the plan year ended December 31, 2023, there was not a required contribution and therefore, the Bank elected to not contribute as management determined that the plan was in a well-funded position. The benefits under the plan are payable on the participant’s normal retirement date which is age 65 and the completion of five years of service. Benefits are computed using the plan formula, eligible base pay and years of credited service. Upon retirement, benefits are payable as a lifetime annuity and the participant has the option to select from several choices of actuarially equivalent benefits. Early retirement is available as early as age 55 with the completion of five years of service or any time after the completion of 25 years of service but the benefit is reduced on an actuarial basis to account for early payment. The plan formula for employees hired prior to January 1, 2008, and applicable to their service up through March 31, 2013, was 1.6% of five-year average monthly base pay plus 0.6% of average monthly base pay in excess of covered compensation (35 year average of the maximum taxable wage bases) multiplied by credited service up to a maximum of 25 years. The formula also provided an additional benefit equal to 0.6% of five-year average monthly base pay multiplied by credited service between 25 years and 35 years. The benefits computed under this formula were frozen effective March 31, 2013 and a new formula was adopted. Mr. Harvey was employed prior to March 31, 2013 and earned a portion of his pension benefit under this formula. For service commencing January 1, 2013, which includes NEOs, benefits for all participants under the plan will be equal to 1% of eligible base pay for each calendar year that a participant completes at least 1,000 hours of service. Effective August 1, 2020, the Pension Plan was amended to include a soft freeze. The soft freeze will allow those employees in an eligible position that were hired, rehired, or acquired on or before July 31, 2020, to continue to vest and accrue additional benefits for each year they are credited with 1,000 hours or more of service. Employees, including NEOs, that are hired, rehired, acquired, or transfer to an eligible job classification on or after August 1, 2020, are not eligible to participate in the Pension Plan. The accrued annual pension benefit as of December 31, 2023, for Messrs. Torchio, Harvey, Golding and Watson were $17,188, $107,872, $19,496 and $14,900 respectively. As of December 31, 2023, Messrs. Torchio, Harvey, Golding and Watson qualified for early retirement under the Retirement Plan. If Messrs. Torchio, Harvey, Golding and Watson had retired on December 31, 2023, and began receiving benefit payments immediately upon retirement, their annual pension benefit would have been $13,420, $63,614, $12,998 and $8,614, respectively. Mr. Betchkal was not eligible to participate in the Pension Plan due to joining the Company subsequent to the Pension Plan’s soft freeze in 2020.
Potential Payments to Named Executive Officers
Potential Payments to Named Executive Officers The following tables show potential payments that would be made to the NEOs upon specified events, assuming such events occurred on December 31, 2023, pursuant to each individual’s employment agreement, pursuant to stock benefits that have been granted under our equity incentive plans and pursuant to our policies with respect to health care and other benefits continuation. For a discussion of additional benefits that would be paid to the NEOs or their beneficiaries upon various termination scenarios, see “Defined Benefit Plan,” “Supplemental Executive Retirement Plan,” and “Life Insurance Coverage”.
Potential Payments to Named Executive Officers
| Louis J. Torchio | | | | | | | | Type of benefit | Involuntary termination or termination for good reason before change in control or within 24 months after change in control (1) | Voluntary termination | Termination for cause | Death (2) | Disability (3) | Retirement | | Severance Pay | $2,472,000 | — | — | 824,000 | 1,510,667 | — | | Bonus Payment | 1,430,493 | 40,831 | — | 476,831 | 476,831 | 40,831 | | Stock Option Vesting Acceleration (4) | 17,991 | — | — | 17,991 | 17,991 | — | | RSA Acceleration (4) | 100,252 | — | — | 100,252 | 100,252 | — | | RSU Acceleration (4) | 351,062 | — | — | 351,062 | 351,062 | — | | PSU Acceleration (4) | 381,239 | — | — | 119,958 | 119,958 | — | | Health Care and Other Benefits Continuation | 73,422(5) | — | — | 49,950 | — | — |
Potential Payments to Named Executive Officers
| William W. Harvey, Jr. | | | | | | | | Type of benefit | Involuntary termination or termination for good reason before change in control or within 24 months after change in control (1) | Voluntary termination | Termination for cause | Death (2) | Disability (3) | Retirement | | Severance Pay | $2,163,000 | — | — | 721,000 | 1,321,833 | — | | Bonus Payment | 1,397,001 | 35,727 | — | 465,667 | 465,667 | 35,727 | | Stock Option Vesting Acceleration (4) | 18,161 | — | — | 18,161 | 18,161 | — | | RSA Acceleration (4) | 167,232 | — | — | 167,232 | 167,232 | — | | RSU Acceleration (4) | 322,084 | — | — | 322,084 | 322,084 | — | | PSU Acceleration (4) | 317,279 | — | — | 110,575 | 110,575 | — | | Health Care and Other Benefits Continuation | 70,913(5) | — | — | 41,345 | — | — |
Potential Payments to Named Executive Officers
| John J. Golding | | | | | | | | Type of benefit | Involuntary termination or termination for good reason before change in control or within 24 months after change in control (1) | Voluntary termination | Termination for cause | Death (2) | Disability (3) | Retirement | | Severance Pay | $1,147,500 | — | — | 382,500 | 701,250 | — | | Bonus Payment | 457,959 | 18,953 | — | 152,653 | 152,653 | 18,953 | | Stock Option Vesting Acceleration (4) | 17,991 | — | — | 17,991 | 17,991 | — | | RSA Acceleration (4) | 113,580 | — | — | 113,580 | 113,580 | — | | RSU Acceleration (4) | 136,307 | — | — | 136,307 | 136,307 | — | | PSU Acceleration (4) | 164,561 | — | — | 64,221 | 64,221 | — | | Health Care and Other Benefits Continuation | 25,673(5) | — | — | — | — | — |
Potential Payments to Named Executive Officers
| (1) The employment agreements provide for the lump-sum payment of three times the highest rate of base salary and three times the highest rate of cash bonus during the prior three years. |
Potential Payments to Named Executive Officers
| (2) The employment agreements provide for a lump sum death benefit equal to one year of base salary. The employment agreements also provide for the continuation of medical and dental benefits to the executive’s eligible dependents for a period of three years after the executive’s death under the same terms immediately prior to termination. |
Potential Payments to Named Executive Officers
| (3) All NEOs receive their base salary for the longer of (i) the remaining term of the agreement, or (ii) one year following the termination of their employment due to disability. The employment agreement provides the executive with their base salary in the first year following disability, reduced by any assumed short-term or long-term disability insurance benefits provided under separate insurance plans we maintain. Each NEO also receives medical and dental benefits previously provided for a period of up to 36 months under the same terms immediately prior to termination due to disability. |
Potential Payments to Named Executive Officers
| (4) Equity award agreements for all participants, including NEOs, provide for the acceleration of unvested equity awards in the event of disability, death, and in certain corporate transactions including a Change in Control as defined under the 2022 Equity Incentive Plan and 2018 Equity Incentive Plan. The 2022 Equity Incentive Plan and 2018 Equity Incentive Plan and related forms of equity award agreements have been filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. |
Potential Payments to Named Executive Officers
| (5) The employment agreements provide for non-taxable medical and dental coverage for 36 months from the date of termination at substantially identical terms to the coverage maintained by the employer for the executive and their eligible dependents prior to termination unless the executive obtains similar benefits from another employer. |
Potential Payments to Named Executive Officers
| Gregory J. Betchkal | | | | | | | | Type of benefit | Involuntary termination or termination for good reason before change in control or within 24 months after change in control (1) | Voluntary termination | Termination for cause | Death (2) | Disability (3) | Retirement | | Severance Pay | $1,668,000 | — | — | 556,000 | 1,019,333 | — | | Bonus Payment | 770,304 | 8,768 | — | 256,768 | 256,768 | 8,768 | | Stock Option Vesting Acceleration (4) | — | — | — | — | — | — | | RSA Acceleration (4) | — | — | — | — | — | — | | RSU Acceleration (4) | 441,430 | — | — | 441,430 | 441,430 | — | | PSU Acceleration (4) | 162,639 | — | — | 40,660 | 40,660 | — | | Health Care and Other Benefits Continuation | 76,457(5) | — | — | 60,102 | — | — |
Potential Payments to Named Executive Officers
| Scott J. Watson | | | | | | | | Type of benefit | Involuntary termination or termination for good reason before change in control or within 24 months after change in control (1) | Voluntary termination | Termination for cause | Death (2) | Disability (3) | Retirement | | Severance Pay | 1,147,500 | — | — | 382,500 | 701,250 | — | | Bonus Payment | 425,559 | 18,953 | — | 141,853 | 141,853 | 18,953 | | Stock Option Vesting Acceleration (4) | 14,518 | — | — | 14,518 | 14,518 | — | | RSA Acceleration (4) | 70,300 | — | — | 70,300 | 70,300 | — | | RSU Acceleration (4) | 106,005 | — | — | 106,005 | 106,005 | — | | PSU Acceleration (4) | 127,982 | — | — | 49,946 | 49,946 | — | | Health Care and Other Benefits Continuation | 25,673(5) | — | — | — | — | — |
Potential Payments to Named Executive Officers
| (1) The change in control agreements provide for the lump-sum payment of three times the highest rate of base salary and three times the highest rate of cash bonus during the prior three years. |
Potential Payments to Named Executive Officers
| (2) The change in control agreements provide for a lump sum death benefit equal to one year of base salary. The change in control also provides for the continuation of medical and dental benefits to the executive’s eligible dependents for a period of three years after the executive’s death under the same terms immediately prior to termination. |
Potential Payments to Named Executive Officers
| (3) All NEOs receive their base salary for the longer of (i) the remaining term of the agreement, or (ii) one year following the termination of their employment due to disability. The change in control agreement provides the executive with their base salary in the first year following disability, reduced by any assumed short-term or long-term disability insurance benefits provided under separate insurance plans we maintain. Each NEO also receives medical and dental benefits previously provided for a period of up to 36 months under the same terms immediately prior to termination due to disability. |
Potential Payments to Named Executive Officers
| (4) Equity award agreements for all participants, including NEOs, provide for the acceleration of unvested equity awards in the event of disability, death, and in certain corporate transactions including a Change in Control as defined under the 2022 Equity Incentive Plan and 2018 Equity Incentive Plan. The 2022 Equity Incentive Plan and 2018 Equity Incentive Plan and related forms of equity award agreements have been filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. |
Potential Payments to Named Executive Officers
| (5) The change in control agreement provides for non-taxable medical and dental coverage for 36 months from the date of termination at substantially identical terms to the coverage maintained by the employer for the executive and their eligible dependents prior to termination unless the executive obtains similar benefits from another employer. |
Director Compensation
Director Compensation The following table sets forth for the year ended December 31, 2023 certain information as to the total remuneration to Northwest Bancshares, Inc.’s directors. Messrs. Torchio and Harvey did not receive separate compensation for their service as a director.
Director Compensation
| Director compensation table | | | | | | | | | Name | Fees earned or paid in cash ($) | Stock awards ($)(1) | Option awards ($) | Non-equity incentive plan compensation ($) | Change in pension value and nonqualified deferred compensation earnings ($)(2) | All other compensation ($)(3) | Total ($) | | Robert M. Campana | 79,250 | 47,002(4) | —(4) | — | 10,422 | 8,851 | 145,525 | | Deborah J. Chadsey | 79,625 | 47,002(5) | —(5) | — | 14,394 | 9,314 | 150,335 | | Wilbur R. Davis | 78,250 | 47,002(6) | —(6) | — | 80,877 | 5,296 | 211,425 | | Timothy B. Fannin | 124,125 | 47,002(7) | —(7) | — | 19,506 | 9,383 | 200,016 | | Timothy M. Hunter | 93,750 | 47,002(8) | —(8) | — | 9,361 | 9,175 | 159,288 | | John P. Meegan | 88,000 | 47,002(9) | —(9) | — | 14,746 | 9,283 | 159,031 | | Mark A. Paup | 73,500 | 47,002(10) | —(10) | — | 7,425 | 8,437 | 136,364 | | David M. Tullio | 79,500 | 47,002(11) | —(11) | — | 6,014 | 4,851 | 137,367 | | Pablo A. Vegas | 72,500 | 47,002(12) | —(12) | — | 3,869 | 3,411 | 126,782 | | Amber L. Williams | 42,333 | 47,002(13) | —(13) | — | — | 180 | 89,515 |
Director Compensation
| (1) Reflects the aggregate grant date fair value of RSAs of 3,672 shares granted to each director on March 15, 2023 with a grant date market value of $12.80 per share. This award vests fully one-year from the date of grant. The assumptions used in the valuation of these awards are included in Notes 1(q) and 14(c) to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission. |
Director Compensation
| (2) Reflects change in pension value and nonqualified deferred compensation for each director as follows: Mr. Campana, $10,422 and $0; Ms. Chadsey, $14,394 and $0; Mr. Davis, $9,328 and $71,549; Mr. Fannin, $19,506 and $0; Mr. Hunter, $9,361 and $0; Mr. Meegan, $14,746 and $0; Mr. Paup, $7,425 and $0; Mr. Tullio, $6,014 and $0; Mr. Vegas, $3,869 and $0; Ms. Williams, $0 and $0. |
Director Compensation
| (3) Reflects dividends on unvested RSAs and taxable value of excess life insurance for each director as follows: Mr. Campana, $7,663 and $1,188; Ms. Chadsey, $8,095 and $1,219; Mr. Davis, $4,077 and $1,219; Mr. Fannin $8,095 and $1,288; Mr. Hunter $7,987 and $1,188; Mr. Meegan, $8,095 and $1,188; Mr. Paup, $7,663 and $774; Mr. Tullio, $4,077 and $774; Mr. Vegas, $2,997 and $414; Ms. Williams, $0 and $180. |
Director Compensation
| (4) At December 31, 2023, Mr. Campana had 30,612 vested stock options, 12,588 unvested stock options and 8,391 unvested shares of restricted stock. |
Director Compensation
| (5) At December 31, 2023, Ms. Chadsey had 44,292 vested stock options, 13,308 unvested stock options and 8,661 unvested shares of restricted stock. |
Director Compensation
| (6) At December 31, 2023, Mr. Davis had 4,320 vested stock options, 2,880 unvested stock options and 4,752 unvested shares of restricted stock. |
Director Compensation
| (7) At December 31, 2023, Mr. Fannin had 27,012 vested stock options, 13,308 unvested stock options and 8,661 unvested shares of restricted stock. |
Director Compensation
| (8) At December 31, 2023, Mr. Hunter had 37,092 vested stock options, 13,308 unvested stock options and 8,661 unvested shares of restricted stock. |
Director Compensation
| (9) At December 31, 2023, Mr. Meegan had 44,292 vested stock options, 13,308 unvested stock options and 8,661 unvested shares of restricted stock. |
Director Compensation
| (10) At December 31, 2023, Mr. Paup had 30,612 vested stock options, 12,588 unvested stock options and 8,391 unvested shares of restricted stock. |
Director Compensation
| (11) At December 31, 2023, Mr. Tullio had 4,320 vested stock options, 2,880 unvested stock options and 4,752 unvested shares of restricted stock. |
Director Compensation
| (12) At December 31, 2023, Mr. Vegas had 0 vested stock options, 0 unvested stock options and 3,672 unvested shares of restricted stock. |
Director Compensation
| (13) At December 31, 2023, Ms. Williams had 0 vested stock options, 0 unvested stock options and 0 unvested shares of restricted stock. |
Director Compensation
Amounts included in the “Stock Awards” column for the year ended December 31, 2023 represent the value of current year grants under our 2022 Equity Incentive Plan pursuant to applicable Securities and Exchange Commission regulations that require that we report the full grant-date fair value of grants in the year in which such grants are made. The amount included in the “Change in pension value and nonqualified deferred compensation earnings” column reflects the change in the estimated present value of future benefits under our retirement plans for directors as well as the amount of interest paid on deferred compensation over the applicable federal rate. The full board of directors determines director compensation. In determining director compensation, we utilize market information that is provided by our Chief Human Resources Officer, which is supported by survey data from various sources, as well as through consultation with Pearl Meyer, an independent executive compensation consulting firm. The following table sets forth for the year ended December 31, 2023 cash compensation received by each nonemployee director of Northwest Bancshares, Inc. and Northwest Bank.
Director Compensation
| | Board service | | Board Committee service | | | | | | | | Director | Board retainer | Independent Chairman and Vice Chairman | Audit Committee member | Compensation Committee member | Nominating and Corporate Governance Committee member | Risk Management Committee member | Trust Committee member | Innovation and Technology Committee member | Total Compensation | | Robert M. Campana | $57,500 | — | — | 6,000 | — | 4,500 | 1,250 | 10,000(3) | $79,250 | | Deborah J. Chadsey | 57,500 | — | — | — | 6,250 | 10,875(3) | — | 5,000 | 79,625 | | Wilbur R. Davis | 57,500 | — | — | 6,000 | 7,500(3) | 6,000 | — | 1,250 | 78,250 | | Timothy B. Fannin | 57,500 | 51,000(1) | 7,500 | — | 5,000 | 3,125 | — | — | 124,125 | | Timothy M. Hunter | 57,500 | 11,250(2) | 7,500 | 12,500(3) | — | — | 5,000 | — | 93,750 | | John P. Meegan | 57,500 | — | 15,000(3) | 4,500 | 1,250 | 6,000 | 3,750 | — | 88,000 | | Mark A. Paup | 57,500 | — | — | — | 1,250 | 6,000 | 3,750 | 5,000 | 73,500 | | David M. Tullio | 57,500 | — | 7,500 | 4,500 | 1,250 | — | 8,750(3) | — | 79,500 | | Pablo A. Vegas | 57,500 | — | — | — | 5,000 | — | 5,000 | 5,000 | 72,500 | | Amber L. Williams | 38,333 | — | — | — | 2,500 | 1,500 | — | — | 42,333 |
Director Compensation
| Northwest Bancshares, Inc. Board and Board Committee meetings held for the year ended December 31, 2023 | | | | | | | | | Northwest Bancshares, Inc. Board | Northwest Bancshares, Inc. Special Board | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | Risk Management Committee | Trust Committee | Innovation and Technology Committee | | 11 | — | 4 | 5 | 6 | 3 | 4 | 4 |
Director Compensation
| (1) Denotes Chairman of the Board. |
Director Compensation
| (2) Denotes Vice Chairman of the Board. |
Director Compensation
| (3) Denotes Committee Chairperson. |
Director Compensation
Deferred Compensation Plan for Directors. We sponsor a non-qualified deferred compensation plan for directors (“Deferred Compensation Plan”) that enables a director to elect to defer all or a portion of their directors’ fees. The amounts deferred are credited with interest at the taxable equivalent rate received by Northwest Bank on its bank owned life insurance policies that insure the directors’ lives. Deferred amounts are payable upon retirement of a director on or after attaining age 59-1/2 but no later than age 72, in the form of a lump sum or installments over a three-, five- or ten-year period. In addition, the director may elect to receive payments upon reaching a predetermined age. Payments to a director, or to their designated beneficiary, may also be made from the Deferred Compensation Plan upon the director’s death, total and permanent disability, or termination of service from the Board. Participants in the Deferred Compensation Plan would not recognize taxable income with respect to the Deferred Compensation Plan benefits until the assets are actually distributed. Active directors are provided between $110,500 and $200,000 of term life coverage through our group life insurance policy. Coverage is subject to standard age reductions starting at age 65. Retirement Plan for Directors. We maintain a retirement plan for outside directors (“Directors Plan”). Directors who have served on the Board for five years or more, were appointed as a director prior to September 30, 2022 and are not Northwest Bank employees are eligible to receive benefits under the Directors Plan. Upon a director’s retirement from the Board on or after five years of service and the attainment of age 60, the director is entitled to receive a retirement benefit equal to 60% of the annual retainer paid immediately prior to retirement plus 60% of the board meeting fees paid for the director’s attendance at board meetings at the annual rate which was in effect immediately prior to their retirement. If a director retires after five years or more of service but before attaining age 60, the director is entitled to one-half of the benefits otherwise available to them. Retirement benefits commence on the first day of the calendar quarter following the director’s attainment of age 65, or if retirement occurs later, on the first day of the calendar quarter following retirement. Such retirement benefits are paid for a period equal to the lesser of the number of a director’s completed full years of service, their life, or ten years. In the event the director dies before normal retirement age or after normal retirement age but before all retirement benefits to which they are entitled have been received, the director’s beneficiary or estate shall be paid a lump sum equal to the present value of the benefits that would have been paid had the director lived until all accrued retirement benefits had been paid. The retirement plan for outside directors was amended to freeze all benefits earned through December 31, 2012 based on the plan formula using years of service and a director’s compensation as of December 31, 2012. The amendments also provide that, for service commencing January 1, 2013, additional benefits will be earned equal to 1.25% of career average fees paid in cash for each year in the future. During the year ended December 31, 2023, we recognized expense of $124,679 for the Directors Plan. Effective September 30, 2022, the Plan was amended to include a soft freeze. The soft freeze will allow those directors who were serving as a director on or before September 30, 2022, to continue to participate in the plan. Any director who becomes a director after September 30, 2022, will not be eligible to participate in the plan. Directors Equity Awards. Options granted under our 2018 Equity Incentive Plan vest over either a five- or seven-year period, depending on year of grant. All nonstatutory options granted under the plan expire upon the earlier of ten years from the date of grant or, up to one year following the date the optionee ceases to be a director. However, in the event of termination of service due to death, disability, normal retirement or a change of control of Northwest Bancshares, Inc., nonstatutory options may be exercised for up to ten years from the date of grant. No options were granted under the 2022 Equity Incentive Plan. RSAs granted under our 2022 Equity Incentive Plan fully vest one year after the day of grant and restricted shares granted under our 2018 Equity Incentive Plan vest over either a five- or seven-year period, depending on year of grant, with the first vesting on the day of grant. However, all awards will vest at the earlier of age 72 plus five years of service or upon a change in control, death or disability. All unvested awards will expire upon voluntary or involuntary termination before age 72. Dividends on the RSAs granted under the 2022 Equity Incentive Plan are declared but not paid until thirty days after the vesting date but participants can vote the unvested RSA. Dividends on restricted shares under the 2018 Equity Incentive Plan are paid on the unvested restricted stock and participants can vote the unvested restricted stock pursuant to the plans.
NOTICE OF A SOLICITATION OF PROXIES IN SUPPORT OF DIRECTOR NOMINEES
NOTICE OF A SOLICITATION OF PROXIES IN SUPPORT OF DIRECTOR NOMINEES