DEF 14A of Equity Bancshares Inc
Filed Mar 14, 2024 · FY20230001193125-24-067333
ITEM 1: ELECTION OF DIRECTORS
ITEM 1: ELECTION OF DIRECTORS
CLASSIFICATION OF THE COMPANY’S DIRECTORS
CLASSIFICATION OF THE COMPANY’S DIRECTORS In accordance with the terms of our Articles, our Board is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms, and prior to our 2024 Annual Meeting is comprised as follows:
CLASSIFICATION OF THE COMPANY’S DIRECTORS
| • | The Class I directors are R. Renee Koger, James S. Loving, Jerry P. Maland and Shawn D. Penner. Their term will expire at the Annual Meeting of Stockholders held in 2025; |
CLASSIFICATION OF THE COMPANY’S DIRECTORS
| • | The Class II directors are Kevin E. Cook, Brad S. Elliott, Junetta M. Everett and Gregory H. Kossover. Their term will expire at this year’s Annual Meeting of Stockholders. |
CLASSIFICATION OF THE COMPANY’S DIRECTORS
| • | The Class III directors are Leon H. Borck, Gregory L. Gaeddert and Benjamen M. Hutton. Their term will expire at the Annual Meeting of Stockholders to be held in 2026. |
ELECTION PROCEDURES; TERM OF OFFICE
ELECTION PROCEDURES; TERM OF OFFICE At each annual meeting of stockholders, or special meeting in lieu thereof, upon the expiration of the term of a class of directors, the successors to such directors will be elected to serve from the time of election and qualification until the third annual meeting following his or her election and the election and qualification of his or her successor or until such director’s earlier death, resignation or removal. Any additional directorships resulting from an increase in the number of directors will be distributed by the Board among the three classes so that, as nearly as possible, each class will consist of approximately one-third of the directors. The Corporate Governance and Nominating Committee has recommended, and the independent members of the Board have approved the nomination of Kevin E. Cook, Brad S. Elliott, Junetta M. Everett and Gregory H. Kossover to serve as Class II directors. If elected, each of the nominees will serve through the 2027 Annual Meeting of Stockholders. Each nominee receiving the affirmative vote of the holders of a majority of the Class A Common Stock present in person or represented by proxy at the Annual Meeting will be elected. Unless instructed to abstain or vote against one or more of the nominees, all shares of Class A Common Stock represented by proxy will be voted FOR the election of the nominees. If instructed to abstain or vote against one or more but not all of the nominees, all shares of Class A Common Stock represented by any such proxy will be voted FOR the election of the nominee or nominees, as the case may be, for whom no instruction to abstain or vote against has been given. If a nominee becomes unavailable to serve as a director for any reason before the election, the shares represented by proxy will be voted for such other person, if any, as may be designated by the Board. The Board has no reason to believe that any nominee will be unavailable to serve as a director. All of the nominees have consented to being named herein and to serve if elected. Any director vacancy occurring after the election may be filled by the affirmative vote of the majority of the directors then in office, even if the remaining directors constitute less than a quorum of the full Board. In accordance with our Articles, the term of a director elected to fill a vacancy shall expire upon the expiration of the term of office of the class of directors in which such vacancy occurred.
NOMINEES FOR ELECTION
NOMINEES FOR ELECTION The following table sets forth the name, age, position with the Company and director class for each nominee for election as a director of the Company:
NOMINEES FOR ELECTION
| Name | Age | Current Position with Equity | Class | | Kevin E. Cook | 59 | Director | II | | Brad S. Elliott | 57 | Director, Chairman and Chief Executive Officer | II | | Junetta M. Everett | 68 | Director | II | | Gregory H. Kossover | 61 | Director | II |
NOMINEES FOR ELECTION
The biography of each of the director nominees set forth below contains information regarding the person’s service as a director and/or executive officer, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the Corporate Governance and Nominating Committee and the Board to determine that the person should serve as a director.
NOMINEES FOR ELECTION
| KEVIN E. COOK DIRECTOR SINCE: 2021 AGE: 59 | Mr. Cook was a Partner and business leader at Forvis, LLP a national CPA and advisory firm until his retirement in September 2019. He brings to the Company his insights and expertise from his exceptional 33-year career in public accounting providing solutions to financial services companies. His skills focused on developing and leading Forvis, LLP financial services practice into the marketplace through quality, reputation, networking, brand, and high-level advisement. Various leadership positions during his career included national tax leader financial services practice, national leader outsourcing services practice, and regional leader for Kansas City, Iowa and Wisconsin financial services practice. During his time at Forvis, LLP, Mr. Cook worked with some the firm’s largest financial services clients which gives him unique insights into financial reporting, taxation, mergers and acquisitions, strategic planning and corporate governance matters. Mr. Cook also currently serves as Board Chair and as a member of the Board of Governors of Nebraska Wesleyan University. He has also served as a director for numerous non-profit, civic, and charitable organizations. Mr. Cook is a graduate of Nebraska Wesleyan University with a Bachelor of Science degree in Accounting. QUALIFICATIONS: Mr. Cook’s experience and qualifications provide sound leadership to the Board of Directors. In addition, as a former practicing public accountant servicing the financial institution space, Mr. Cook brings extensive accounting, management, strategic planning and financial skills important to the oversight of our financial reporting, enterprise and operational risk management. | | BRAD S. ELLIOTT DIRECTOR SINCE: 2002 AGE: 57 | Mr. Elliott is our founder, Chairman and Chief Executive Officer. He also serves as Chairman and Chief Executive Officer of Equity Bank. Mr. Elliott began his banking career and was employed in various capacities by Home State Bank and Trust for six years following graduation from McPherson College with a Bachelor of Science degree in Finance and Management. He then joined Sunflower Bank as a Market President for two years before joining American Traffic Systems as its director of operations in Scottsdale, Arizona. Mr. Elliott then returned to Wichita to serve as Director of Marketing at Koch Industries, Inc., a privately held multinational corporation. He then rejoined Sunflower Bank as its Regional President. Mr. Elliott founded Equity Bancshares in 2002. He is a graduate of the Stonier Graduate School of Banking and has served on the Board of Directors for the Wichita Area Chamber of Commerce, as Trustee and Chair of the finance committee for the Board of Directors of McPherson College, and as the President of the Wichita State University Shocker Athletic Scholarship Organization. He has also served on the PCS Advisory Board, Via Christi Health Board of Directors and as Treasurer, and the Kansas Bankers Association. Mr. Elliott currently serves on Pentegra’s Defined Contribution Plan Board of Directors. QUALIFICATIONS: Mr. Elliott adds financial services experience, especially lending and asset and liability management to the Board, as well as a deep understanding of the Company’s business and operations. Mr. Elliott also brings risk and operations management and strategic planning expertise to the Board, skills that are important as the Company continues to implement its business strategy to acquire and integrate growth opportunities. |
NOMINEES FOR ELECTION
| JUNETTA M. EVERETT DIRECTOR SINCE: 2020 AGE: 68 | Ms. Everett, RDH, joined Delta Dental of Kansas (DDKS), a dental benefits administrator in 1987 and served as Vice President Provider Relations for 26 years and the same position for Surency Life and Health, a DDKS subsidiary that administered ancillary products in 5 states. A key contributor and participant in the corporation’s strategic planning, budgeting, and programs, she reported to the CEO and was responsible for directing and controlling all functions of the provider network for state and national business including training, contracting, compliance, audits, and building relationships. Everett serves on multiple boards and committees, including the Wichita Regional Chamber of Commerce as 2020 Board Chair and Vice Chair of Diversity, Equity and Inclusion, and the Kansas Health Foundation as Board Chair having previously served as Finance Chair and a member of the audit and governance committees. Other services include the Sedgwick County District 2 Advisory board, Wichita State University (WSU) Foundation Board, National Advisory Council and was appointed by the Governor of Kansas to the WSU Board of Trustees in 2021. Ms. Everett hold both a Bachelors of Art and Science from Wichita State University. QUALIFICATIONS: Ms. Everett brings to the Board significant leadership and business experience, knowledge of healthcare, insurance, governance and compliance while also providing valuable insight into promoting intentional inclusion in the workplace. Her background includes serving on the Board of a community developed credit union and its supervisory committee. This coupled with her business acumen including, the review and approvals of financials, decision making, and independent diversified thinking qualifies her to serve on this board. Her diversity of experience, style, and deep business contacts contributes to the overall success of the board and ultimately the bank. | | GREGORY H. KOSSOVER DIRECTOR SINCE: 2011 AGE: 61 | Mr. Kossover served as Executive Vice President and Chief Financial Officer of the Company from October 2013 through April 2020, at which point he transitioned to the role of Executive Vice President and Chief Operating Officer, prior to his retirement from banking in May of 2023. He has served as a member of our Board since December 2011. Mr. Kossover is currently the President and Chief Financial Officer of Vantage Point Properties. Prior to joining the Company, Mr. Kossover served as President of Physicians Development Group, a builder and manager of senior living facilities in the Wichita, Kansas metropolitan area, from 2012 to 2013. From 2004 to 2011 he served as Chief Executive Officer of Value Place, LLC, one of the largest economy extended stay lodging franchises in the United States. Mr. Kossover previously served as Treasurer of Western Financial Corporation, a publicly-held thrift holding company. Mr. Kossover graduated from Emporia State University with a Bachelor of Science degree in Accounting and has successfully completed the Uniform Certified Public Accountants exam. QUALIFICATIONS: Mr. Kossover’s leadership and financial experience provide important oversight of our financial reporting and enterprise and operational risk management to the Board. |
NOMINEES FOR ELECTION
The election of each nominee for director will require the affirmative vote of the holders of a majority of the Class A Common Stock present in person or represented by proxy at the Annual Meeting. An abstention with respect to one or more nominees for director will have the effect of a vote against such nominee or nominees. A broker non-vote will not affect the outcome of this proposal.
NOMINEES FOR ELECTION
| | THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES. |
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth certain information with respect to directors, nominees and the executive officers of the Company:
DIRECTORS AND EXECUTIVE OFFICERS
| Name | Age | Position(s) with the Company | Class | Director’s Term Expires | | Nominees: | | | | | | Kevin C. Cook | 59 | Director | II | 2024 | | Brad S. Elliott | 57 | Director, Chairman and Chief Executive Officer | II | 2024 | | Junetta M. Everett | 68 | Director | II | 2024 | | Gregory H. Kossover | 61 | Director | II | 2024 | | Directors Continuing until 2025: | | | | | | R. Renee Koger | 62 | Director | I | 2025 | | James S. Loving | 68 | Director | I | 2025 | | Jerry P. Maland | 73 | Director | I | 2025 | | Shawn D. Penner | 53 | Director | I | 2025 | | Directors Continuing until 2026: | | | | | | Leon H. Brock | 77 | Director | III | 2026 | | Gregory L. Gaeddert | 62 | Director | III | 2026 | | Benjamin J. Hutton | 43 | Director | III | 2026 | | Non-Director Executive Officers: | | | | | | Julie A. Huber | 53 | Executive Vice President, Strategic Initiatives | | | | Ann M. Knutson | 54 | Chief Human Resources Officer | | | | Chris M. Navratil | 37 | Chief Financial Officer | | | | David E. Pass | 55 | Chief Information Officer | | | | Brett A. Reber | 64 | General Counsel | | | | Richard A. Sems | 52 | President of Equity Bank | | | | Krzysztof P. Slupkowski | 37 | Chief Credit Officer | | |
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is the background, business experience, attributes, qualifications and skills of the Company’s continuing directors and executive officers. Executive officers serve at the discretion of the Board.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING
| R. RENEE KOGER DIRECTOR SINCE: 2003 AGE: 62 | Ms. Koger has served as a member of our Board since 2003. Ms. Koger is currently a partner, leading the Estate Planning and Tax Planning practice groups, with the law firm of Wise & Reber, L.C. where she has practiced since 1991. Ms. Koger has served on local boards and volunteer organizations, including various philanthropic end endeavors. She has served as past president of the McPherson Chamber of Commerce and chair of the United Way Fund. Ms. Koger graduated from Oklahoma State University with degrees in Agricultural Economics and Accounting, and from the University of Tulsa with her Juris Doctorate. She passed the CPA exam in 1987. Ms. Koger has been on the board of the Company since its inception. QUALIFICATIONS: Ms. Koger brings legal, accounting and tax experience to the Board, providing oversight to our financial reporting, enterprise and operational risk management. | | JAMES S. LOVING DIRECTOR SINCE: 2022 AGE: 68 | Mr. Loving is a veteran executive of the downstream petroleum industry, with 35 years of experience in the energy sector. Mr. Loving served as President of the National Cooperative Refinery Association (“NCRA”) for 20 years prior to retirement following the successful integration of NCRA into an acquiring organization. In this role, he oversaw finance, human resources, operations, and stakeholder management while navigating the cyclical challenges and dramatic changes within the energy industry over that time. In addition to his role with NCRA, Mr. Loving has served on several company and public service boards. He holds a bachelor’s degree in Civil Engineering from the University of Wisconsin, as well as a MBA from the University of Utah. QUALIFICATIONS: Mr. Loving’s experience and qualifications provide sound leadership to the Board. He brings deep energy sector knowledge, in addition to company management, board development, and leadership expertise to the Board. |
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING
| JERRY P. MALAND DIRECTOR SINCE: 2016 AGE: 73 | Mr. Maland was appointed to the Company’s Board upon the closing of the merger of the Company and Community First Bancshares, Inc. in 2016. Mr. Maland served as a director of Community First Bancshares, Inc. following its formation in 1997, and served as Chairman of the board for both Community First Bank and Community First Bancshares, Inc. Mr. Maland is the former owner of McDonald’s restaurants in Harrison, Berryville, and Eureka Springs. He previously served on the Board of Directors of Security Bank and First Commercial Corporation from 1984 until forming Community First Bank in 1997. Mr. Maland is a graduate of Luther College in Decorah, Iowa QUALIFICATIONS: Mr. Maland brings extensive bank management and oversight experience, as well as local knowledge of our markets to the Board. | | SHAWN D. PENNER DIRECTOR SINCE: 2003 AGE: 53 | Mr. Penner has served as a member of our Board since 2003. Mr. Penner is the owner of Shamrock Development, LLC, a real estate development firm, which he founded in 1997. He also serves as a director of First Federal of Olathe Bancorp, Inc., First Federal Savings and Loan Bank, and GPV, Inc. Mr. Penner previously worked as a national bank examiner for the Office of the Comptroller of the Currency. Mr. Penner graduated from Wichita State University with a Bachelors of Business Administration and a Master of Business Administration degrees. He currently serves as a member of the Wichita State University Foundation Board of Directors as well as Chair of the Foundation’s Investment Committee. QUALIFICATIONS: Mr. Penner brings experience as an executive and local knowledge of our markets as well as bank regulatory and investment experience to the Board. |
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING
| LEON H. BORCK DIRECTOR SINCE: 2021 AGE: 77 | Mr. Borck is the Chairman of Innovative Livestock Services, Inc. and Ward Feed Yard where he has served since 1980. Mr. Borck joined the Company’s Board following our merger with American State Bancshares, Inc. in 2021 where he served as Chairman of the Board from 2001 through the date of the merger. He earned his degree in Agricultural Economics at Kansas State University. Mr. Borck has served on the boards of various companies and philanthropic organizations. QUALIFICATIONS: Mr. Borck’s senior level management, board, bank oversight and extensive agricultural experience in the markets in which the Company operates provides him with a unique perspective which is beneficial to the Board. | | GREGORY L. GAEDDERT DIRECTOR SINCE: 2007 AGE: 62 | Mr. Gaeddert has served as a member of our Board since 2007. Mr. Gaeddert has served as Managing Partner of B12 Capital Partners, LLC since 2006. Prior to co-founding B12 Capital Partners, LLC in 2006, Mr. Gaeddert was employed in various capacities by Commerce Bancshares, Inc. and its affiliates, including serving as Kansas City officer manager for its private equity arm, Capital For Business, Inc. He also served in various management roles for Commerce Bank in Wichita and Kansas City, including serving as Executive Vice President and Commercial Group Manager, Executive Committee and Senior Loan Committee member for the Wichita Bank. Mr. Gaeddert currently serves on the Board of Directors for several of B12 Capital Partners’ portfolio companies. He is also a member of the board of the Mennonite Economic Development Committee (“MEDA”) and serves on the MEDA Mauritius Foundation and as a member of the investment committee of the MEDA Risk Capital Fund. Mr. Gaeddert graduated from Bethel College with a degree in Economics and Business Administration and he earned a Master of Business Administration degree from the University of Kansas. QUALIFICATIONS: Mr. Gaeddert experience and qualifications provide sound leadership to the Board. In addition, Mr. Gaeddert brings strong investment, accounting and financial skills important to the oversight of our financial reporting, enterprise and operational risk management. |
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING
| BENJAMEN M. HUTTON DIRECTOR SINCE: 2020 AGE: 43 | Mr. Hutton has served as a member of our Board since 2020. Mr. Hutton is the Chief Executive Officer of Hutton Corporation, a regional design and construction firm, where he has been employed since 2006. Mr. Hutton has served on the boards of various civic and nonprofit organizations including, among others, Associated General Contractors of Kansas, Kansas Big Brothers Big Sisters, Trinity Academy and the Wichita Chamber of Commerce of which he is a past chair. He is also actively involved with The Greater Wichita Partnership and Visit Wichita. Mr. Hutton holds a Bachelors of Science in Construction from Kansas State University as well as a Masters of Business Administration from Friends University. QUALIFICATIONS: Mr. Hutton’s senior level management, board, and construction experience in addition to his community involvement in the markets in which the company operates provides him with a unique perspective which is beneficial to the Board. |
NON-DIRECTOR EXECUTIVE OFFICERS
NON-DIRECTOR EXECUTIVE OFFICERS
NON-DIRECTOR EXECUTIVE OFFICERS
| JULIA A. HUBER EXECUTIVE VICE PRESIDENT AGE: 53 | Ms. Huber serves as Executive Vice President, Strategic Initiatives. Ms. Huber joined Equity Bank in 2003 and has served in a variety of leadership roles over a period of nineteen years, including overseeing our operations, human resources, compliance, sales and training, strategy implementation, and has managed the integration process for each community bank we have acquired. Ms. Huber served as President of Signature Bank following our acquisition of Signature Bank in 2007. Ms. Huber graduated from McPherson College with a Bachelor of Science degree in Business Administration and History, received her Master of Business Administration from Baker University in 2014 and is a graduate of the Stonier Graduate School of Banking and the Bank Leaders of Kansas. Ms. Huber has been recognized as one of the Wichita Business Journal’s Women in Business in 2013 and Women Who Lead in 2019. Ms. Huber was also inducted to the Wichita Business Journals 40 Under 40 Hall of Fame in 2020 and was named a Wichita Business Journal Executive of the Year in 2021. Ms. Huber currently serves as Board Trustee for McPherson College and is a Board Member of the Kansas Bankers Association. | | ANN M. KNUTSON CHIEF HUMAN RESOURCES OFFICER AGE: 54 | Ms. Knutson joined the Company in June 2023 as Chief Human Resources Officer. Ms. Knutson brings 25 years of human resources experience to the team. Prior to the Company, she was a Senior Vice President of Summit Credit Union in her native Wisconsin. The Milwaukee BizTimes recognized Ms. Knutson as a “Notable Woman in Human Resources” in 2021. She was an Adjunct Instructor at the Graduate School of Banking in Madison, WI from 2017 to 2022. Ms. Knutson also served as Senior Vice President of Human Resources at Bank Five Nine. She received her Master of Science degree in Management from Cardinal Stritch University. | | CHRIS M. NAVRATIL CHIEF FINANCIAL OFFICER AGE: 37 | Mr. Navratil serves as the Chief Financial Officer of Equity Bancshares. Mr. Navratil joined Equity as a Senior Vice President within Finance in February 2019. Prior to his promotion to Company CFO, Mr. Navratil served as Equity Bank CFO, overseeing financial and balance sheet strategy, liquidity, financial planning and analysis, investor outreach and more. Before Equity Bank, he spent seven years, including two as a Senior Manager within the Financial Institution Audit Practice, with Crowe LLP a public accounting firm in Chicago, Illinois. Mr. Navratil received his master’s degree in accountancy from Northern Illinois University in 2011. |
NON-DIRECTOR EXECUTIVE OFFICERS
| DAVID E. PASS CHIEF INFORMATION OFFICER AGE: 55 | Mr. Pass joined Equity Bank in July 2023 and serves as Executive Vice President, Chief Information Officer. Mr. Pass brings more than 23 years in financial services information technology with him to Equity Bank, including serving as either Chief Information Security Officer or Chief Information Officer at two publicly traded companies. Most recently, Mr. Pass served as an EVP on the technology team at UMB Bank, overseeing transformation, enterprise architecture, applications, and enterprise fraud teams. Before UMB, Mr. Pass spent 17 years as the CIO of CoBiz Financial, which was acquired by BOK Financial in 2018. He is a 1992 graduate of the University of Northern Colorado receiving a Bachelor of Science in Business & Finance. | | BRETT A. REBER GENERAL COUNSEL AGE: 64 | Mr. Reber serves as Executive Vice President and General Counsel. Prior to joining the Company, he practiced for 30 years with Wise & Reber, L.C., a full-service commercial and civil law firm in McPherson Kansas, as the firm’s managing member. He graduated from the University of Kansas with a Bachelors in General Studies Degree and earned his Juris Doctor degree from the University of Tulsa College of Law. Following law school, Mr. Reber served as a law clerk to the United States District Court Judge Thomas R. Brett in the Northern District of Oklahoma. He has been active in bar association activities and has served as the President of the Kansas Bar Association Young Lawyers Section. He is a Fellow of the Kansas Bar Foundation and American Bar Foundation, and is a member of the American, Kansas, and Oklahoma bar associations, and the Kansas Association of Defense Counsel. Mr. Reber is active in state and local community affairs. He is a trustee of the Julia J. Mingenback Foundation and a Director of the McPherson Industrial Development Company. | | RICHARD M. SEMS PRESIDENT OF EQUITY BANK AGE: 52 | Mr. Sems joined Equity Bank as President in May 2023. Before that, Mr. Sems was the Chief Banking Officer for First Bank in St. Louis, MO. Mr. Sems served as President and CEO of Reliance Bank from 2013 to 2016 and Regional President of PNC Financial Services from 2009-2013. He worked as the President and CEO of Missouri Banking and served as EVP and Managing Director of Corporate Planning of National City Corporation from 2000-2009. Mr. Sems also spent time with PWC, working as a manager from 1993 to 1998 and is an Inactive CPA. He has a B.S in Accounting from Grove City College in Pennsylvania and an MBA – Corporate Strategy from the University of Michigan Ross Business School. He serves on the board of trustees for Grove City College. | | KRZYSZTOF P. SLUPKOWSKI CREDIT OFFICER AGE: 37 | Mr. Slupkowski has been Equity Bank’s Chief Credit Officer since September 2023. Krzysztof joined Equity in 2018 and has worked with its largest borrowers as Metro Market Chief Credit Officer guiding credit decisions for Equity’s locations in Wichita, Kansas City, and Tulsa. Prior to joining Equity, Mr. Slupkowski worked in various credit functions for Commerce Bancshares. Krzysztof earned his Master of Business Administration from Wichita State University. |
COMMITTEES OF THE BOARD
| • | evaluating the compensation of our directors; |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The Board’s philosophy for director compensation is to provide the Company with the best opportunity to compete for, attract, and retain qualified board members, compensate board members fairly and in alignment with stockholder’s interests, and be fiscally responsible for the long-term success and viability of the Company. The Compensation Committee evaluates the competitiveness of director compensation on an ongoing basis and makes pay recommendations to the full Board for approval at least annually, utilizing data from compensation studies, surveys, and proxy disclosures of public peer companies, among other information. The Compensation Committee retained Blanchard Consulting Group to conduct a comprehensive Board of Directors compensation study in 2023, which provided us with director compensation data from our peer group and survey data sources. The evaluation found that the Company’s director compensation for the average director was between the 50th and 75th percentile values of our peer group. No changes were made to retainer compensation in 2023 as compared to 2022. Since the directors of the Company are representing the stockholders, the Company feels these directors should also be stockholders of the Company. Including equity as part of the annual director compensation package increases the share ownership of directors and increases their interest in the Company. For the 2023 service year, we paid each of our non-employee directors a cash retainer of $32,000 and issued each common stock with a value of $33,000 for their service as a director. In addition, we paid the non-employee members of our Compensation, Corporate Governance and Nominating, Trust, and Risk committees $3,500 for services on such committees during the same period. The chairman of each of these committees earned $9,500 for serving in such role. Each member of our Audit Committee received a retainer of $4,500 for serving on the committee during the period. The chairman of our Audit Committee received a retainer of $14,000 for serving in such role. We paid our non-employee directors that serve on Equity Bank’s Credit Committee a retainer of $40,000 for serving on the committee. Pursuant to our director compensation policy we prepay our directors’ fees on May 1 of each year and the fees are earned over a one-year period. We also reimburse all non-employee directors for their reasonable out-of-pocket travel expenses incurred in attending meetings of our Board or any committees of the Board. Common stock issuance to non-employee directors is made in the form of one-year vesting restricted stock awards which vest at the end of the service period. If the director were to leave during the service period the shares would not vest and prepaid director fees would be subject to the Company’s clawback policy. In May 2019, the Company adopted stock ownership guidelines for outside directors. The guidelines require Board members to obtain and maintain beneficial ownership (by Company grant and through individual purchase) of $500,000 of value in the Company’s stock within five years of adopting the guidelines or initial election to the Board. We believe that stock ownership of our directors aligns their interests with those of our long-term stockholders. All of our directors also serve as directors of Equity Bank. During 2023, our directors did not receive any additional compensation for service on the board of Equity Bank. Mr. Elliott did not receive any additional compensation for service on either board. The following table sets forth the compensation earned during for the fiscal year ended December 31, 2023 by each non-employee director who served on our Board in 2023:
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | All Other Compensation ($) | Total ($) | | Gary C. Allerheiligen(3) | 17,667 | 11,000 | — | 28,667 | | Leon H. Borck | 37,833 | 33,000 | — | 70,833 | | Kevin E. Cook | 45,167 | 33,000 | — | 78,167 | | Junetta M. Everett | 35,500 | 33,000 | — | 68,500 | | Gregory L. Gaeddert | 49,500 | 33,000 | — | 82,500 | | Benjamen M. Hutton | 36,667 | 33,000 | — | 69,667 | | R. Renee Koger | 39,000 | 33,000 | — | 72,000 | | Gregory H. Kossover (4) | 61,000 | 22,000 | 180,011 | 263,011 | | James S. Loving | 43,667 | 33,000 | — | 76,667 | | Jerry P. Maland | 37,500 | 33,000 | — | 70,500 | | Shawn D. Penner | 81,500 | 33,000 | — | 114,500 |
DIRECTOR COMPENSATION
| (1) For the 2022 and 2023 service years, director retainer and committee fees were prepaid on May 1 and earned over the service period ending April 30 of the proceeding year. |
DIRECTOR COMPENSATION
| (2) In addition to retainer and committee fees, for the 2022 and 2023 service years, each director of the Company also received a one-year vesting restricted stock issuance with a grant date fair value equal to $33,000 which was issued in the form of 1,070 and 1,540 shares, respectively. These shares vest at the anniversary of their issuance. |
DIRECTOR COMPENSATION
| (3) Mr. Allerheiligen retired from the Company’s board effective April 30, 2023. The amounts reflected in the table above are fees and stock awards earned in 2023 related to the 2022 service year. |
DIRECTOR COMPENSATION
| (4) Mr. Kossover served as the Chief Operating Officer of the company prior to his retirement from banking in April of 2023. All Other Compensation in the table reflects payment earned for service in that role. Mr. Kossover did not receive stock awards for his service on the Board prior to the 2023 service year. |
2023 Executive Compensation Program Highlights
| Compensation Component | Purpose and Objectives | Key Features and Performance Metrics | | Base Salary | Salaries provide market competitive pay commensurate to job responsibilities. | • Annual adjustments based on achievement of individual performance goals, market competitive considerations, and changes in responsibilities, when applicable. | | Executive Incentive Plan (“EIP”) | Motivates and rewards NEOs for achievement of strategic and tactical goals over the performance period, generally in relation to the Board approved budget. | • NEO must be employed on the date the incentive award is paid. • Business performance metrics for 2023: (a) adjusted pre-tax income relative to budget; (b) net over-head ratio relative to budget; and (c) individual performance objectives. • Corporate performance accounts for 85% of EIP opportunity. • This award is paid in cash. • Payouts are subject to satisfactory regulatory ratings. | | Long Term Incentive Plan (“LTI”) – Time Vested RSUs (“TRSUs”) | Promotes retention of talent; aligns NEO interests with long-term value creation as well as stockholder interests. | • 50% of total long-term incentive. • TRSUs vest ratably over three years from the date of grant. • NEO must be employed on the date of vesting, with exceptions. • NEO performance must be in good standing for the measurement period. | | Long Term Incentive Plan (“LTI”) – Performance RSUs (“PRSUs”) | Promotes retention of talent; aligns NEO interests with long-term value creation as well as stockholder interests. | • 50% of total long-term incentive earned at target. • PRSUs cliff vest at end of three-year measurement period. • 50% of performance criteria weighted to relative total stock return. • 50% of performance criteria weighted to relative core EPS growth. • 100% of the award is subject to forfeiture if below 35th percentile of applicable index. • NEO must be employed on the date of vesting, with exceptions. • NEO performance must be in good standing for the measurement period. |
Compensation Philosophy
| • | Drive performance relative to clearly defined goals, balancing short-term operational objectives with long-term strategic goals; |
Compensation Philosophy
| • | Align executives’ long-term interests with stockholders by placing a substantial portion of total compensation at risk, contingent on Company performance and the executive’s ongoing employment; |
Compensation Philosophy
| • | Encourage our executives to take actions that are aligned with the interests of long-term stockholders through the use of stock- based compensation; |
Best Practices
| What We Do | | | Pay for performance. | Annual advisory say on pay vote. | | Above target and maximum long-term incentive payouts only when we outperform our peer benchmarks. | Stock ownership guidelines and stock holding requirements for the Board, Executive Vice Presidents and CEO. | | Incentive plan directly linked to strategic and objective financial goals. | Total direct target compensation that is market competitive with actual pay that varies based on performance. | | A significant portion of long-term incentives earned based on relative TSR performance. Our long-term incentive plans have multi-year vesting periods. | A Compensation Committee composed entirely of independent directors overseeing the Company’s executive compensation policies. | | Robust clawback policy allowing for recoup of any excess compensation paid to the NEOs if the Company restates its financial results upon which an award is based or if the NEO engages in misconduct. | Annual risk assessments performed. | | Annual peer group review. | Independent compensation consultant. | | Caps/maximums in place for our incentive plans. | A “double-trigger” is required (both a change-in-control and qualifying termination event must occur) in order to issue any change-in-control severance payments to our NEOs. |
Best Practices
| What We Do Not Do | | No tax-gross ups in our change in control arrangements. | | No repricing of stock options without stockholder approval. | | No excessive perquisites. | | No incentive plans which encourage inappropriate risk taking. |
Program Elements and Pay Decisions
| • | performance-based annual cash incentives; |
Program Elements and Pay Decisions
| • | long-term equity incentive compensation (awarded in the form of Restricted Stock Units with three-year ratable vesting periods and Performance Share Units with three-year cliff vesting periods); and |
Program Elements and Pay Decisions
| Name | Base Salary (1) | Bonus | Target Short- term Annual Incentive Compensation (2) | Target Long-term Incentive Compensation (3) | NEO Perquisites (4) | Total | At-Risk | | Brad S. Elliott | 35% | 0% | 26% | 22% | 17% | 100% | 58% | | Chris M. Navratil | 49% | 0% | 24% | 24% | 3% | 100% | 48% | | Julie A. Huber | 43% | 0% | 21% | 21% | 15% | 100% | 55% | | Brett A. Reber | 42% | 0% | 19% | 21% | 18% | 100% | 52% | | Richard A. Sems | 44% | 0% | 28% | 24% | 4% | 100% | 52% |
Program Elements and Pay Decisions
| (2) For more information, see the heading “Annual Executive Incentive Plan” below. |
Program Elements and Pay Decisions
| (3) For more information, see the heading “Long-Term Incentive Plan” below. |
Annual Executive Incentive Plan (“EIP”)
Annual Executive Incentive Plan (“EIP”) We typically pay an annual cash incentive award to our NEOs. Annual incentive awards are intended to recognize and reward those NEOs who contribute meaningfully to our performance for the year. The Compensation Committee determines whether such bonuses will be paid for any year and the amount of any bonus paid is based upon an annually established formula and specific performance measures. The Company’s design of the performance-based cash incentive plan (Annual Executive Incentive Plan (“EIP”)) exists to align executive pay with performance, drive the Company’s strategic goals, and drive superior financial results. The EIP is designed to achieve the following goals and objectives:
Annual Executive Incentive Plan (“EIP”)
| • | recognize and reward achievement of the Company’s annual business goals critical to driving our long-term strategy: |
Annual Executive Incentive Plan (“EIP”)
| • | motivate and reward superior performance; |
Annual Executive Incentive Plan (“EIP”)
| • | attract and retain talent needed for the Company’s success; |
Annual Executive Incentive Plan (“EIP”)
| • | be competitive with market; |
Annual Executive Incentive Plan (“EIP”)
| • | encourage teamwork and collaboration through shared goals; and |
Annual Executive Incentive Plan (“EIP”)
| • | promote sound risk management practices. |
Annual Executive Incentive Plan (“EIP”)
Incentive Opportunity All executive officers participate in the EIP, which is administered by the Compensation Committee. The EIP is an annual incentive plan designed to encourage participants to focus on key performance goals during the performance period, which in 2023, was January 1, 2023 through December 31, 2023. The EIP provides participants with an opportunity to earn variable rewards that are contingent on a combination of Company and Individual performance. For Company goals interpolation is used to determine the incentive payouts when performance goals are between threshold and target, and target and maximum. If performance is below a stated threshold, then no payment is made for the applicable component. Individual goals are paid at 100% if identified goals are achieved. Payouts are subject to satisfactory regulatory ratings. Any EIP payouts are also subject to the Company’s Clawback Policy and can be adjusted by the Compensation Committee based on extraordinary events.
Annual Executive Incentive Plan (“EIP”)
| 2023 EIP Award Opportunity as a Percent of Salary (Interpolated between performance levels) | | | | | | Threshold (80% of goals) | Target (100% of goals) | Maximum (130% of goals) | | NEO | Threshold (50% payout) (1) | Target (100% payout) (1) | Maximum (150% payout) (1) | | Brad S. Elliott | 43% | 75% | 107% | | Chris M. Navratil | 29% | 50% | 71% | | Julie A. Huber | 29% | 50% | 71% | | Brett A. Reber | 26% | 45% | 64% | | Richard A. Sems | 37% | 65% | 93% |
Annual Executive Incentive Plan (“EIP”)
| (1) The individual component of each executive’s incentive opportunity is assumed to be paid at 100% in each of the scenarios. |
Annual Executive Incentive Plan (“EIP”)
2023 corporate goals in the EIP and actual results (dollars in thousands):
Annual Executive Incentive Plan (“EIP”)
| | Weighting of Performance | Threshold/ Target/ | 2023 EIP Performance Goals | | | 2023 Actual Results / | | Performance Measure | Measure | Stretch | Threshold | Target | Maximum | Pay Out % | | Adjusted Pre-tax Income, relative to the Budget Adjusted Pre-tax Income (000s) | 60% | 80% / 100% / 130% | $48,260 | $60,325 | $78,423 | $62,871 (2) / 107.0% | | Net-over-head Ratio (non-interest income relative to non-interest expense) relative to Budget for Equity Bank | 25% | 80% / 100% / 130% | 20.4% | 25.5% | 33.2% | 25.7% (3) / 101.0% |
Annual Executive Incentive Plan (“EIP”)
| (1) The 2023 Plan defined adjusted net income as a percentage of budgeted amount determined using the same calculations, defined as the amount of net income of the Company as determined by GAAP and reported on our Securities and Exchange Commission (“SEC”) filings adjusted as follows: (a) increased by provision for taxes; (b) adjusted for the elimination of net securities (gains) or losses; (c) elimination of extraordinary items; (d) elimination of unbudgeted merger expenses; (e) increased by the provision for loan losses and reduced by the excess of actual net charge-offs over budgeted provision for loan losses which results in no benefit to earnings realized by the release of loan loss provision, (f) decreased by the amount of tax credit investment amortization reflected in non-interest expense; and (g) other items determined as approved by the Compensation Committee. |
Annual Executive Incentive Plan (“EIP”)
| (2) Company GAAP pre-tax income of $2,415 was adjusted as follows. |
Annual Executive Incentive Plan (“EIP”)
| | 2023 | | Pre-Tax GAAP income (loss) | $2,415 | | Securities (gain) loss | 51,909 | | Merger Expenses | 297 | | Tax credit partnership amortization | 3,799 | | Provision for credit losses | 4,451 | | Adjusted pre-tax income | $62,871 |
Annual Executive Incentive Plan (“EIP”)
| (3) Adjustments to Equity Bank non-interest income and non-interest expense in calculating the net-over-head ratio. |
Annual Executive Incentive Plan (“EIP”)
| | 2023 | | Non-interest income | $(19,129) | | Securities (gain) loss | 51,909 | | Adjusted non-interest income | $32,780 | | Non-interest expense | $133,718 | | Merger expenses | (297) | | Incentive accrual | (2,132) | | Tax partnership investment amortization | (3,799) | | Adjusted non-interest expense | $127,490 |
Annual Executive Incentive Plan (“EIP”)
In addition to the above Company-based metrics enumerated above, 15% of each NEO’s EIP award is based on his or her leadership rating and contributions toward the achievement of corporate goals and performance measures achieved above (see “Individual Performance” section for more detail). Each of our NEO’s achieved 100% of the earning opportunity assigned to the leadership rating, which was capped at 100%. The 2023 EIP awards are summarized below:
Annual Executive Incentive Plan (“EIP”)
| | Company Component | | | | Individual Performance Component | | | | Name | Weighting | Award Percentage Achievement | Company Component Total | Weighting | Award Percentage Achievement | Individual Performance Component Total | 2023 EIP Total | | Brad S. Elliott | 85% | 105.3% | $524,327 | 15% | 100% | $87,892 | $612,219 | | Chris M. Navratil | 85% | 105.3% | $123,041 | 15% | 100% | $20,625 | $143,666 | | Julie A. Huber | 85% | 105.3% | $138,703 | 15% | 100% | $23,250 | $161,953 | | Brett A. Reber | 85% | 105.3% | $123,824 | 15% | 100% | $20,756 | $144,580 | | Richard A. Sems | 85% | 105.3% | $348,988 | 15% | 100% | $58,500 | $407,488 |
Annual Executive Incentive Plan (“EIP”)
The following table shows the total payout opportunity and the total actual payout of annual cash incentives for the performance year January 1, 2023 through December 31, 2023.
Annual Executive Incentive Plan (“EIP”)
| NEO | 2023 Incentive Target | % of Target Incentive | | Brad S. Elliott | $585,945 | 104.5% | | Chris M. Navratil | $137,500 | 104.5% | | Julie A. Huber | $155,003 | 104.5% | | Brett A. Reber | $138,375 | 104.5% | | Richard A. Sems | $390,000 | 104.5% |
Annual Executive Incentive Plan (“EIP”)
Individual Performance The Compensation Committee believes individual performance of our NEOs is relevant in all compensation decisions. The Compensation Committee formally considers individual performance in determining annual merit base salary changes and for the determination of the individual performance portion of the EIP. The Compensation Committee measures individual performance for NEOs using an annual goal setting process that aligns individual goals with the annual budget, the strategic plan and key business initiatives. Individual performance adjustments reflect the level of achievement for our NEOs against annual individual performance goals. Individual performance for all employees, including our NEOs, is assessed using an annual performance management process. Goals are established at the beginning of the year and performance is assessed against these goals at the end of the year. Performance goals align our annual business plans and long-term strategic plans, including financial and operating metrics, business development, governance and risk management, people and organization development and customer experience. For 2023, all our NEOs met or exceeded expectations relative to their individual performance goals.
Annual Executive Incentive Plan (“EIP”)
| NEO | Performance Highlights | | Brad S. Elliott | • Mr. Elliott’s 2023 performance goals aligned with enhancement of stockholder value and were primarily based on business performance and organizational development; • Mr. Elliott successfully reset the leadership team, recruiting Rick Sems, President, Ann Knutson, CHRO, and David Pass, CIO while also internally promoting Chris Navratil, CFO and Krzysztof Slupkowski, CCO; • Additionally, he was responsible for the Company’s active community involvement, strong and constructive regulatory relationships and stockholder engagement; and • Mr. Elliott provided leadership in negotiating the twentieth merger transaction in the Company’s history in the form of our announced merger with Rockhold BanCorp. | | Chris M. Navratil | • Mr. Navratil successfully transitioned to the CFO role for the Company after serving in senior leadership roles within the Finance department since joining Equity in 2019. • Led the analysis and execution of Equity Bank’s bond portfolio repositioning during the fourth quarter 2023. • Led the Bank’s response to the banking turmoil that engulfed the industry landscape in March of 2023, including proactive measures to enhance liquidity, improve internal communication and prepare for any potential negative outcomes that may have impacted the bank. • Oversaw the transition of the Company’s stock listing from the Nasdaq to the New York Stock Exchange, adding bottom line value to the organization as well as enhanced visibility to the marketplace. |
Annual Executive Incentive Plan (“EIP”)
| NEO | Performance Highlights | | Julie A. Huber | • Ms. Huber successfully led the due diligence procedures around multiple potential M&A targets during 2023, including Rockhold BanCorp which resulted in the signing of a definitive merger agreement during the fourth quarter. • Led the Bank’s efforts to enhance our banking footprint through the development and deployment of an ITM strategy which will allow our customers increased access to core banking functions during extended hours as compared to the legacy branch approach. Significant infrastructural strides were made in 2023, with more than 30 machines being fully placed into service by the end of the year. • Transitioned into a leadership role for the operations teams, including loan, deposit, treasury and service center personnel. | | Brett A. Reber | • Mr. Reber successfully led legal initiatives including special asset litigation, regulatory applications and personnel disputes among others. • Led the workout initiatives around previously acquired loans which contributed to revenue in 2023 and will continue to contribute in 2024. • Successfully negated potential losses related to multiple credits in 2023 through asset sale negotiations and proactive workout steps. • Contributed to due diligence around multiple M&A targets, including Rockhold BanCorp. | | Richard A. Sems | • Mr. Sems successfully transitioned into the President role for the Company, immediately contributing to the executive team. • Led the negotiation and on-site transition of operations and personnel for the Company’s announced merger transaction with Rockhold BanCorp. • Repositioned the incentive programs in place for customer facing roles to better align with the interests of the organization and our shareholders. |
Long-Term Incentive Equity Plan (“LTIP”)
Long-Term Incentive Equity Plan (“LTIP”) The Company believes that equity compensation is a critical component of a total direct compensation package which enhances the Company’s ability to recruit, retain and reward key talents needed for the Company’s success, align executives’ interests with those of our stockholders, encourage executives’ best performance and provide incentives for long-term sustained performance. Our stockholder-approved stock incentive plan allows us to execute our philosophy by providing equity compensation to our key executives and Board members. The Compensation Committee approves equity awards to members of the executive management team, including the NEOs, pursuant to the Company’s stockholder-approved Equity Bancshares, Inc. 2022 Omnibus Equity Inventive Plan (the “Plan”). In determining the form of equity to be granted the Compensation Committee considered many factors including the ability to drive corporate performance, retention, executive officers’ current stock ownership level, tax and accounting treatment and the impact on dilution. Awards were made in consideration of market practice and alignment with the Company’s compensation philosophy. The LTIP is designed to support the Company’s pay for performance philosophy and reward key executives for creating long-term stockholder value. More specifically, the LTIP is designed to meet the following objectives:
Long-Term Incentive Equity Plan (“LTIP”)
| • | Performance: Reward key executives for driving long-term, sustained performance (e.g., stock price, specific performance measures). |
Long-Term Incentive Equity Plan (“LTIP”)
| • | Stockholder Alignment: Align executives with stockholder interests through performance goals and focus on stockholder value appreciation. |
Long-Term Incentive Equity Plan (“LTIP”)
| • | Ownership: Ensure executives have an ownership/equity interest. |
Long-Term Incentive Equity Plan (“LTIP”)
| • | Retention: Promote the retention of senior executives. |
Long-Term Incentive Equity Plan (“LTIP”)
| • | Sound Risk Management: Provide a balanced view of performance and align rewards with the time horizon of risk. |
Long-Term Incentive Equity Plan (“LTIP”)
| • | Market Competitive: Position executive total compensation to provide market competitive opportunities that are aligned with performance. Similar to the EIP, the long-term incentive plan is designed to only provide above target or maximum long-term incentive payouts when we outperform our peer benchmarks. |
Long-Term Incentive Equity Plan (“LTIP”)
Treatment of LTIP Awards Under Termination Events The Long-Term Incentive Plan details treatment of performance-vested restricted stock units (“PRSUs”) and time-vested restricted stock units (“TRSUs”) under various employment termination events.
Long-Term Incentive Equity Plan (“LTIP”)
| Termination Event | Time-Based RSU (TRSU) and Time-Based Stock Options (TSO) | Performance-Based RSU (PRSU) | | Death | Unvested TRSUs and TSOs will vest immediately | A pro-rata portion of PRSUs will vest immediately at target level. Pro-rata portion will be calculated based on the number of months worked during the performance period as a percentage of the total 3-year performance period (36 months). | | Disability | Unvested TRSUs and TSOs will vest immediately | A pro-rata portion of PRSUs will continue to vest and payout will be determined based on the actual performance after the performance period ends. Pro-rata portion will be calculated based on the number of months worked during the performance period as a percentage of the total 3-year performance period (36 months). | | Involuntary Termination without Cause (including Termination by Executive for Good Reason) | A pro-rata portion of unvested TRSUs and TSOs will vest immediately. Pro-rata portion will be calculated based on the number of months worked after last vesting month during the vesting period as a percentage of the number of months from the last vesting month to the end of the 36-month vesting period. | A pro-rata portion of PRSUs will vest immediately and payout will be determined based on the actual performance measured on the most recent completed fiscal quarter before termination. If actual performance cannot be determined, prorated PRSUs will be paid at target performance level. Pro-rata portion will be calculated based on the number of months worked during the performance period as a percentage of the total 3-year performance period (36 months). | | Retirement (as defined in the Company’s retirement plan or retirement policy) | A pro-rata portion of unvested TRSUs and TSOs will vest immediately. Pro-rata portion will be calculated based on the number of months worked after last vesting month during the vesting period as a percentage of the number of months from the last vesting month to the end of the 36-month vesting period. | A pro-rata portion of PRSUs will vest immediately and payout will be determined based on the actual performance measured on the most recent completed fiscal quarter before termination. If actual performance cannot be determined, prorated PRSUs will be paid at target performance level. Pro-rata portion will be calculated based on the number of months worked during the performance period as a percentage of the total 3-year performance period (36 months). | | Termination for Cause | Forfeiture | Forfeiture |
Long-Term Incentive Equity Plan (“LTIP”)
2023 LTIP Awards The Compensation Committee considers market practices, external competitiveness, stockholder interests and advice from our independent compensation consultant in establishing the amount and characteristics of equity award grants. The Compensation Committee determined the level of long-term incentive grants for fiscal year 2023 at the beginning of the fiscal year. Prior to making the grants, the Compensation Committee established an intended long-term incentive value for each NEO. When setting these intended values, the Compensation Committee considered competitive market data from the peer group prepared by our independent compensation consultant and target total compensation opportunities. We intend that the value of long-term incentive awards for our NEOs be market competitive when considered within the framework of the NEO’s total compensation opportunity. Individual performance or other factors may result in awards which are above or below the market median. These factors include tenure and experience, succession planning and retention, subjective evaluations of performance, historical grant levels and other recent compensation actions with respect to the individual. The actual value of equity awards realized by any individual may differ significantly (up or down) from the intended value due to changes in our stock price over the life of the awards and the extent to which performance goals are met in the case of PRSUs. The 2023 annual equity grants were comprised of 50% PRSUs and 50% TRSUs. The Compensation Committee established the target levels of achievement to be challenging yet reasonably attainable, with threshold awards set at expected levels of achievement, and maximum awards set at an aggressive and difficult level of achievement. Levels of achievement for both goals were assessed using a combination of budget, our historical performance, peer group performance, and the Company’s subjective estimates for future performance. The Compensation Committee has discretion to adjust the performance vested awards by +/- 20% depending on extraordinary events or the Company’s performance in other areas.
Long-Term Incentive Equity Plan (“LTIP”)
| 2023 Equity Award Opportunities at Target Performance | | | | | Named Executive Officer | TRSU (# of shares at Target) | PRSU (# of shares at Target) | Value at Target ($000) | | Brad S. Elliott (1) | 8,591 | 8,591 | $495 | | Chris M. Navratil (2) | 1,094 | 1,094 | $63 | | Julie A. Huber | 2,604 | 2,604 | $150 | | Brett A. Reber | 2,518 | 2,518 | $145 | | Richard A. Sems (3) | — | — | — |
Long-Term Incentive Equity Plan (“LTIP”)
| (1) Excludes TRSUs for Mr. Elliott, which were awarded per his employment agreement provisions (see “Other Equity Awards” for more detail). |
Long-Term Incentive Equity Plan (“LTIP”)
| (2) Mr. Navratil received a 2023 grant from the Company in his previous role as Chief Financial Officer of Equity Bank. |
Long-Term Incentive Equity Plan (“LTIP”)
| (3) Mr. Sems was not employed by the company as of the 2023 issuance date. |
Long-Term Incentive Equity Plan (“LTIP”)
PRSUs have a three-year performance period (January 1, 2023 – December 31, 2025) with performance criteria reflecting two key financial measures of equal weighting: the three year change in Total Stockholder Return (“TSR”) and the three year average core earnings per share (“EPS”) growth. These goals were selected to reflect our focus on the Company’s long-term strategic goals and objectives which include sound risk management and stockholder value enhancement over the long-term time horizon, relative to our peers.
Long-Term Incentive Equity Plan (“LTIP”)
| 3-year TSR & EPS Performance Relative to Index (1) | 3-year Performance Relative to Peer Group | Payout Schedule | | 75th percentile | Stretch | 150% of target | | 55th percentile | Target | 100% of target | | 35th percentile | Threshold | 50% of target | | Below the 35th percentile | Below Threshold | 0% of target |
Long-Term Incentive Equity Plan (“LTIP”)
| (1) Will be measured based on the Company performance relative to an index of U.S. exchange traded commercial banks with assets between $3 billion and $10 billion at the time of grant. Index constituents acquired as of the end of the performance period will be removed for the entire performance period and not be replaced. In 2023, the peer index consisted of 70 banks with a median asset size of $6.6 billion. |
Long-Term Incentive Equity Plan (“LTIP”)
Each measure’s performance is determined independently. A payout percentage will be interpolated between 50% and 150% dependent on the reported percentile to peers. The PRSU grants will vest as soon as practical after performance results are known and the Compensation Committee reviews and certifies the results. TRSU grants have an incremental vesting schedule which vests 33.33% per year beginning on the first anniversary of the grant date. Below, we detail the equity award earning opportunity per executive officer as a percent of salary.
Long-Term Incentive Equity Plan (“LTIP”)
| | 2023 Grant Date Value of Equity Award Opportunity as a % of Salary on Grant Date | | | | | | | PRSUs | | | | NEO | TRSUs | Threshold | Target | Maximum | | Brad S. Elliott (1) | 32.50% | 16.25% | 32.50% | 48.75% | | Chris M. Navratil (2) | 15.00% | 7.50% | 15.00% | 22.50% | | Julie A. Huber | 25.00% | 12.50% | 25.00% | 37.50% | | Brett A. Reber | 25.00% | 12.50% | 25.00% | 37.50% | | Richard A. Sems (3) | — | — | — | — |
Long-Term Incentive Equity Plan (“LTIP”)
| (1) Excludes time vested restricted stock units for Mr. Elliott, which were awarded per his employment agreement provisions (see “Other Equity Awards” for more detail). |
Long-Term Incentive Equity Plan (“LTIP”)
| (2) Reflects grants received by Mr. Navratil in his previous role as Chief Financial Officer of the Bank. |
Long-Term Incentive Equity Plan (“LTIP”)
| (3) Mr. Sems was not employed with the company as of the issuance date. |
Long-Term Incentive Equity Plan (“LTIP”)
2021 PRSUs PRSUs were awarded to all NEOs who were actively employed on February 7, 2021 (the “2021 PRSUs”). The vesting was based on two relative performance metrics of equal weighting, as measured during the period beginning January 1, 2019 and ending December 31, 2023: (a) relative total stockholder return (“Relative TSR”) and (b) relative average of core earnings per share (“Relative EPS”) growth (a non-GAAP measure). For the first metric, Relative TSR, the Company’s total stockholder return during the performance period was in the 86th percentile of the reference group, which was at the top end of Target performance. For the second metric, Relative EPS, the Company’s average core earnings per share was in the 54th percentile of the reference group, which was also above the top end of the Target range. As a result, total payout associated with the 2021 PRSUs was 124.6% of Target.
Long-Term Incentive Equity Plan (“LTIP”)
| Relative “Core EPS” Growth | 2021 RSU Payout Percentage of Target | Relative “TSR” Performance | 2021 RSU Payout Percentage of Target | | 75th Percentile and Above | 150% | 75th Percentile and Above | 150% | | 55th Percentile | 100% | 55th Percentile | 100% | | 35th Percentile | 50% | 35th Percentile | 50% | | Below 35th Percentile | 0% | Below 35th Percentile | 0% |
Long-Term Incentive Equity Plan (“LTIP”)
| | 2022-2024 Performance Cycle | | | | Named Executive Officer | PRSUs Target (# of shares) | PRSUs Vested (# of shares) | PRSUs Vested (% of Target) | | Brad S. Elliott | 10,672 | 13,297 | 124.6% | | Chris M. Navratil | 1,132 | 1,410 | 124.6% | | Julie A. Huber | 3,227 | 4,020 | 124.6% | | Brett A. Reber | 2,859 | 3,562 | 124.6% | | Richard A. Sems (1) | — | — | — |
Long-Term Incentive Equity Plan (“LTIP”)
| (1) Mr. Sems was not employed by the Company on grant date. |
Long-Term Incentive Equity Plan (“LTIP”)
Other Equity Awards Under his employment agreement, Mr. Elliott is eligible to be considered to receive an annual equity award having an aggregate target value not to exceed the amount equal to 25% of the combined total of his Base Salary and Incentive Payment (within the meaning of his employment agreement). The additional equity award, if granted, is split two-thirds stock options and one-third TRSUs. As such, on January 30, 2023, Mr. Elliott received an aware of 22,635 stock options and 4,342 TRSUs. The options carry a strike price of $28.80 and using a Black-Scholes pricing model each option was valued at $11.05 per share. This stock option award vest 25% at grant date with the remainder vesting ratably over three years beginning on the first anniversary of the grant date. The award carries a ten-year term. The TRSUs vest 25% on the date of grant, then 25% per year for the next three years. Bifurcation of these additional share grants between full value equity awards and options is important to the Company, as value under the options is only realized through share price appreciation further aligning the compensation of these executives with our stockholders. As part of Messrs. Navratil and Sems employment agreements each received an option grant upon beginning their roles with the Company. Mr. Sems, on May 15, 2023, received an option award of 56,370 shares which carry a strike price of $21.84 and using a Black-Scholes pricing model were valued at $8.87 per share. The award will vest ratably over five years beginning on the first anniversary date and have a ten-year term. Mr. Navratil, on August 10, 2023, received an option award of 13,429 shares which carry a strike price of $26.52 and using a Black-Scholes pricing model were valued at $11.17 per share. The award vested 20% at issuance with the remainder vesting ratably over four years and will have a ten-year term.
The Compensation Committee Independent Compensation Consultant
The Compensation Committee Independent Compensation Consultant Pursuant to its Charter, the Committee has the sole authority to retain, terminate, obtain advice from, oversee and compensate its outside advisors, including its compensation consultant. The Committee has access to the funding it needs to solicit advisory services to meet their requirements. The Compensation Committee engaged Blanchard Consulting Group as its independent compensation consultant in 2023 to advise the Compensation Committee by providing a comprehensive executive compensation review. In 2023, Blanchard Consulting Group provided the Committee with a director compensation review. These reports allow us to evaluate our pay practices as compared to peer, banking industry survey data, and industry best practices. Blanchard Consulting Group is a national firm with an exclusive focus on the banking and financial services industry. Blanchard Consulting Group did not provide additional services other than compensation consulting to the Compensation Committee. The Compensation Committee conducted an assessment of potential conflicts of interest and independence issues for Blanchard Consulting Group and no conflicts of interest or independence issues relating to either Company’s services were identified by the Compensation Committee. The Compensation Committee and executive management utilized the Blanchard reports to assist with executive and director pay decisions during 2023 but did not solely rely on them.
Peer Group for 2023 Compensation Decisions
Peer Group for 2023 Compensation Decisions Understanding the competitive landscape is a key element the Compensation Committee considers in setting program targets and making compensation decisions. The Compensation Committee considers competitive market data and advice from its independent compensation consultant, including benchmarking data (i.e 25th, 50th and 75th percentile) guidance on established and emerging best practices relating to executive compensation and general education to members of the Compensation Committee as needed throughout the year. A primary data source used in setting competitive market-based compensation levels for the NEOs and directors is the information publicly disclosed by a custom peer group. The peer group is based on geographic location and asset size and was utilized as part of the Blanchard Consulting Group executive compensation study in 2023. In 2023, the peer group’s 2022 year-end asset size ranged from approximately $3.2 billion to $9.6 billion. The median asset size was $6.2 billion, with the Company’s assets at approximately $5.0 billion for the same time period (the same timeframe as the peer executive compensation reported and analyzed in Blanchard’s 2023 executive compensation study). Currently, the Company’s assets are approximately $5.0 billion. Our current peer group consists of the below twenty-two banks, located in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, South Dakota, and Texas.
Peer Group for 2023 Compensation Decisions
| | 2023 Compensation Peer Group | | | Great Southern Bancorp, Inc. | HBT Financial, Inc. | Hills Bancorporation | | Southside Bancshares, Inc. | Capital Federal Financial, Inc. | South Plains Financial, Inc. | | Pathward Financial, Inc. | CrossFirst Bankshares, Inc. | Old Second Bancorp, Inc. | | Midland States Bancorp, Inc. | QCR Holdings, Inc. | West Bancorporation, Inc. | | National Bank Holdings Corporation | MidWestOne Financial Group, Inc. | Guaranty Bancshares, Inc. | | Byline Bancorp, Inc. | First Mid Bancshares, Inc. | Bridgewater Bancshares, Inc. | | Triumph Financial, Inc. | FirstSun Capital Bancorp | Southern Missouri Bancorp, Inc. | | Third Coast Bancshares, Inc. | | |
Employment Agreements
Employment Agreements On November 5, 2021, the Company entered into new employment agreements with Messrs. Elliott, Reber and Ms. Huber. These employment agreements supersede and replace their prior employment agreements. The employment agreement with Mr. Elliott, CEO and Chairman of the Board, provides for an initial three-year term that is automatically extended for an additional three-years unless either party gives notice of non-renewal at least 90 days before the end of the then-current term. The employment agreements with Mr. Reber and Mrs. Huber have an initial three-year term that is automatically extended for successive one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then-current term. On November 6, 2023 the Company entered into an employment agreement with Mr. Navratil. The initial term of the agreement is three years, and the term is automatically extended for successive one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then-current term. On May 2, 2023 the Company entered into an employment agreement with Mr. Sems, the terms of which were established through arms’ length negotiation. The initial term of the agreement three years, and the term is automatically extended for successive one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then-current term. We use multi-year employment agreements to foster retention and succession planning, to be competitive and to protect the business with restrictive covenants, such as non-competition, non-solicitation and confidentiality provisions. The employment agreements provide for severance pay in the event of the involuntary termination of the executive’s employment without cause (or, where applicable, termination for good reason), which allows these executives to remain focused on the Company’s interests and, where applicable, serves as consideration for the restrictive covenants in their employment agreements. Employment agreement terms, at the date of agreement, for our NEOs (other than Mr. Newell) are summarized as follows:
Employment Agreements
| Mr. Elliott | | | Term | An initial three-year term that is automatically extended for successive additional three-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then- current term. | | Base Salary | $725,000 | | Annual Bonus | Under his employment agreement, Mr. Elliott has a target bonus opportunity of 75% of his base salary, subject to his achievement of performance criteria established by the Compensation Committee. | | Long-Term Incentive Award | Under his employment agreement, Mr. Elliott is entitled to receive an annual equity incentive award with a total grant value equal to 65% of his base salary. | | Non-Competition Period | During employment and for 12 months following termination of employment. | | Non-Solicitation Period | During employment and for 12 months following termination of employment. |
Employment Agreements
| Mr. Navratil | | | Term | An initial three-year term that is automatically extended for successive additional one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then- current term. | | Base Salary | $275,000 | | Annual Bonus | Under his employment agreement, Mr. Navratil has a target bonus opportunity of 50% of his base salary, subject to his achievement of performance criteria established by the Compensation Committee. | | Long-Term Incentive Award | Under his employment agreement, Mr. Navratil is entitled to receive an annual equity incentive award with a total grant value equal to 50% of his base salary. | | Non-Competition Period | During employment and for 12 months following termination of employment. | | Non-Solicitation Period | During employment and for 12 months following termination of employment. |
Employment Agreements
| Ms. Huber | | | Term | An initial three-year term that is automatically extended for successive additional one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then- current term. | | Base Salary | $285,000 | | Annual Bonus | Under her employment agreement, Ms. Huber has a target bonus opportunity of 50% of her base salary, subject to her achievement of performance criteria established by the Compensation Committee. | | Long-Term Incentive Award | Under her employment agreement, Ms. Huber is entitled to receive an annual equity incentive award with a total grant value equal to 50% of her base salary. | | Non-Competition Period | During employment and for 12 months following termination of employment. | | Non-Solicitation Period | During employment and for 12 months following termination of employment. |
Employment Agreements
| Mr. Reber | | | Term | An initial three-year term that | | Base Salary | $280,500 | | Annual Bonus | Under his employment agreement, Mr. Reber has a target bonus opportunity of 45% of his base salary, subject to his achievement of performance criteria established by the Compensation Committee. | | Long-Term Incentive Award | Under his employment agreement, Mr. Reber is entitled to receive an annual equity incentive award with a total grant value equal to 50% of his base salary. | | Non-Competition Period | During employment and for 12 months following termination of employment. | | Non-Solicitation Period | During employment and for 12 months following termination of employment. |
Employment Agreements
| Mr. Sems | | | Term | An initial three-year term that is automatically extended for successive additional one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then- current term. | | Base Salary | $600,000 | | Annual Bonus | Under his employment agreement, Mr. Sems has a target bonus opportunity of 65% of his base salary, subject to his achievement of performance criteria established by the Compensation Committee. | | Long-Term Incentive Award | Under his employment agreement, Mr. Sems is entitled to receive an annual equity incentive award with a total grant value equal to 55% of his base salary. | | Non-Competition Period | During employment and for 12 months following termination of employment. | | Non-Solicitation Period | During employment and for 12 months following termination |
Equity Compensation Grant Practices
Equity Compensation Grant Practices The Compensation Committee is solely responsible for the development of the schedule of equity awards made to our Chief Executive Officer and other NEOs. As a general matter, the Committee’s process is independent of any consideration of the timing of the release of material non-public information, including with respect to the determination of grant dates or stock option exercise prices. Similarly, we have never timed the release of material non-public information to affect the value of the executive compensation. In general, the release of such information reflects long-established timetables for the disclosure of material non-public information such as earnings reports or, with the respect to other events reportable under federal securities laws, the applicable requirements of such laws with respect to timing of disclosure. The Compensation Committee’s decisions are reviewed by, and must be approved by, the Company’s full Board of Directors.
CEO Pay Ratio
CEO Pay Ratio The Company is making its disclosure of the CEO Pay Ratio, as required by Section 953(b) of the Dodd-Frank Wall Street reform and Consumer Protection Act and Item 402(u) of SEC Regulation S-K. We identified the median employee in 2023 by examining the Box 5 wages reported on the 2023 Form W-2 for all individuals, excluding the CEO, who received compensation during 2023 through December 31, 2023. This employee population included all full-time, part-time or seasonal employees as of December 31, 2023. Once we identified our median employee, we determined their annual total compensation in a manner consistent with the CEO compensation provided in the ‘Summary Compensation Table’. For 2023, the total compensation paid to the CEO was $2,646,119. The total of all compensation paid to the median employee was $45,060. The CEO pay to median employee pay was approximately 59:1. The pay ratio identified above is a reasonable estimate calculated in a manner consistent with SEC rules. Pay ratios that are reported by our peers may not be directly comparable to ours because of differences in the composition of each company’s workforce, as well as the assumptions and methodologies used in calculated the ratio, as permitted by SEC rules.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table provides information regarding the compensation of our named executive officers for the years ended December 31, 2023, 2022 and 2021. Except as set forth in the notes to the table, all cash compensation for these executive officers was paid by Equity Bank, where each serves in the same capacity.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards (1) ($) | Option Awards (2) ($) | Non-equity Incentive Plan Compensation ($) | All Other Compensation (3) ($) | Total ($) | | Brad S. Elliott | 2023 | 779,593 | — | 619,920 | 250,117 | 612,219 | 384,270 | 2,646,119 | | Chief Executive Officer and | 2022 | 758,240 | — | 593,693 | 244,893 | 739,410 | 177,111 | 2,513,347 | | Chairman of the Board | 2021 | 725,010 | — | 652,530 | 25,000 | 744,326 | 152,635 | 2,299,501 | | Chris M. Navratil (4,5) | 2023 | 242,885 | — | 63,014 | 150,000 | 143,666 | 16,636 | 616,201 | | Executive Vice President and | | | | | | | | | | Chief Financial Officer | | | | | | | | | | Julie A. Huber | 2023 | 309,172 | — | 149,990 | — | 161,953 | 110,574 | 731,689 | | Executive Vice President, | 2022 | 298,755 | — | 142,507 | — | 194,263 | 35,364 | 670,889 | | Strategic Initiatives | 2021 | 285,000 | — | 142,504 | — | 195,065 | 31,885 | 654,454 | | Brett A. Reber | 2023 | 306,042 | — | 145,037 | — | 144,580 | 126,570 | 722,229 | | Executive Vice President and | | | | | | | | | | General Counsel | | | | | | | | | | Richard A. Sems (4,6) | 2023 | 377,308 | 250,000 | — | 500,000 | 407,448 | 54,310 | 1,589,066 | | Executive Vice President | | | | | | | | | | President | | | | | | | | | | Eric R. Newell (7) | 2023 | 294,314 | — | 220,032 | — | — | 140,686 | 655,032 | | Executive Vice President and | 2022 | 381,453 | — | 195,788 | — | 336,716 | 31,784 | 945,741 | | Chief Financial Officer | 2021 | 356,000 | — | 195,805 | — | 316,758 | 21,735 | 890,298 |
SUMMARY COMPENSATION TABLE
| (1) These amounts represent the aggregate grant-date fair value of time and performance based restricted stock unit awards, determined in accordance with FASB ASC Topic 718. The grant-date fair value of restricted stock units is determined by the closing price of the Company’s stock on the date of grant. See Note 17 to the consolidated financial statements for the year ended December 31, 2023. |
SUMMARY COMPENSATION TABLE
| (2) These amounts represent the aggregate grant-date fair value of stock option awards, determined in accordance with FASB ASC Topic 718. See Note 17 to the consolidated financial statements for the year ended December 31, 2023 for a discussion of the associated assumptions used in the valuation of stock-option awards. |
SUMMARY COMPENSATION TABLE
| (3) See table below summarizing the components of ‘All Other Compensation.’ |
SUMMARY COMPENSATION TABLE
| (4) Executive was not a NEO prior to 2023. |
SUMMARY COMPENSATION TABLE
| (5) Upon his promotion, Mr. Navratil received an equity award. |
SUMMARY COMPENSATION TABLE
| (6) Upon his hire, Mr. Sems received a cash sign-on bonus as well as an equity award. |
SUMMARY COMPENSATION TABLE
| (7) Mr. Newell resigned his role as Chief Financial Officer of the Company effective August 10, 2023 prior to his departure from the Company in September of 2023. |
GRANTS OF PLAN-BASED AWARDS TABLE
GRANTS OF PLAN-BASED AWARDS TABLE The following table shows the plan-based awards granted during the year ended December 31, 2023 to each of our named executive officers:
GRANTS OF PLAN-BASED AWARDS TABLE
| | | | Estimate Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | Name and Principal Position | Award Description | Grant Date | Threshold ($) | Target ($) | Max ($) | Threshold (#) | Target (#) | Max (#) | All Other Stock Awards | Grant Date Fair Value ($) | | Brad S. Elliott | EIP | | 336,918 | 585,945 | 834,972 | | | | | | | Chief Executive Officer and | RSU | 1/30/2023 | — | — | — | — | 8,591 | — | 4,342 | 372,470 | | Chairman of the Board | PSU(1) | 1/30/2023 | — | — | — | 2,148 | 4,296 | 6,443 | — | 123,725 | | | PSU(2) | 1/30/2023 | — | — | — | 2,148 | 4,295 | 6,443 | — | 123,725 | | | Options | 1/30/2023 | — | — | — | — | — | — | 22,635 | 250,117 | | Chris M. Navratil | EIP | | 79,063 | 137,500 | 195,938 | | | | | | | Executive Vice President and | RSU | 1/30/2023 | — | — | — | — | 1,094 | — | — | 31,507 | | Chief Financial Officer | PSU(1) | 1/30/2023 | — | — | — | 274 | 547 | 821 | — | 15,754 | | | PSU(2) | 1/30/2023 | — | — | — | 274 | 547 | 821 | — | 15,753 | | | Options | 8/10/2023 | — | — | — | — | — | — | 13,429 | 150,000 | | Julie A. Huber | EIP | | 89,126 | 155,003 | 220,879 | | | | | | | Executive Vice President, | RSU | 1/30/2023 | — | — | — | — | 2,604 | — | — | 74,995 | | Strategic Initiatives | PSU(1) | 1/30/2023 | — | — | — | 651 | 1,302 | 1,953 | — | 37,497 | | | PSU(2) | 1/30/2023 | — | — | — | 651 | 1,302 | 1,953 | — | 37,498 | | Brett A. Reber | EIP | | 79,566 | 138,375 | 197,184 | | | | | | | Executive Vice President and | RSU | 1/30/2023 | — | — | — | — | 2,518 | — | — | 72,518 | | General Counsel | PSU(1) | 1/30/2023 | — | — | — | 630 | 1,259 | 1,889 | — | 36,260 | | | PSU(2) | 1/30/2023 | — | — | — | 630 | 1,259 | 1,889 | — | 36,259 | | Richard A. Sems | EIP | | 224,250 | 390,000 | 555,750 | | | | | | | Executive Vice President, | RSU | | — | — | — | — | — | — | — | — | | President of Equity Bank | PSU(1) | | — | — | — | — | — | — | — | — | | | PSU(2) | | — | — | — | — | — | — | — | — | | | Options | 5/15/2023 | — | — | — | — | — | — | 56,370 | 500,000 | | Eric R. Newell | EIP | | — | — | — | | | | | | | Executive Vice President and | RSU | 1/30/2023 | — | — | — | — | 3,820 | — | — | 110,016 | | Chief Financial Officer, Former | PSU(1) | 1/30/2023 | — | — | — | 955 | 1,910 | 2,865 | — | 55,008 | | | PSU(2) | 1/30/2023 | — | — | — | 955 | 1,910 | 2,865 | — | 55,008 |
GRANTS OF PLAN-BASED AWARDS TABLE
| (1) The PSUs vest on the third anniversary of the grant date subject to meeting the Adjusted Earnings Per Share performance criteria as described in detail in the Compensation Discussion and Analysis section of this document. |
GRANTS OF PLAN-BASED AWARDS TABLE
| (2) The PSUs vest on the third anniversary of the grant date subject to meeting the Total Stockholder Return performance criteria as described in detail in the Compensation Discussion and Analysis section of this document. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth information relating to outstanding equity awards held by the named executive officers as of December 31, 2023:
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | Option Awards | | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (14) | | Brad S. Elliott | 30,665 | — | — | 14.25 | 12/31/2024 | | | | | 32,643 | — | — | 21.21 | 1/28/2026 | | | | | 16,853 | — | — | 33.50 | 2/17/2027 | | | | | 34,177 | — | — | 32.29 | 2/12/2029 | | | | | 2,775 | 1,338(1) | — | 22.08 | 1/29/2031 | | | | | 10,904 | 10,903(2) | — | 31.64 | 1/28/2032 | | | | | 5,659 | 16,976(3) | — | 28.80 | 1/30/2033 | | | | | | | | | | 6,293 (6) | 213,333 | | | | | | | | 10,672 (7) | 361,781 | | | | | | | | 6,900 (10) | 233,910 | | | | | | | | 7,447 (11) | 252,453 | | | | | | | | 11,847 (12) | 401,613 | | | | | | | | 8,591 (13) | 291,235 | | Chris M. Navratil | 2,650 | 10,599 (4) | — | 26.52 | 8/10/2033 | | | | | | | | | | 377 (6) | 12,780 | | | | | | | | 1,132 (7) | 38,375 | | | | | | | | 750 (8) | 25,425 | | | | | | | | 251 (9) | 8,509 | | | | | | | | 632 (10) | 21,425 | | | | | | | | 948 (11) | 32,137 | | | | | | | | 1,094 (12) | 37,087 | | | | | | | | 1,094 (13) | 37,087 | | Julie A. Huber | 7,500 | — | — | 33.15 | 1/30/2027 | | | | | | | | | | 1,076 (6) | 36,476 | | | | | | | | 3,227 (7) | 109,395 | | | | | | | | 1,501 (10) | 50,884 | | | | | | | | 2,252 (11) | 76,343 | | | | | | | | 2,604 (12) | 88,276 | | | | | | | | 2,604 (13) | 88,276 | | Brett A. Reber | | | | | | | | | | | | | | | 953 (6) | 32,307 | | | | | | | | 2,859 (7) | 96,920 | | | | | | | | 1,330 (10) | 45,087 | | | | | | | | 1,995 (11) | 67,631 | | | | | | | | 2,518 (12) | 85,360 | | | | | | | | 2,518 (13) | 85,360 | | Richard A. Sems | — | 56,370 (5) | — | 21.84 | 5/15/2033 | | | | Eric R. Newell | — | — | — | — | — | | | | | | | | | | —) | — |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (1) Represents time-vested options granted on January 29, 2021. A portion of the options vested at grant. The remaining options vest in three equal annual installments on the anniversary of the grant date, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (2) Represents time-vested options granted on January 28, 2022. A portion of the options vested at grant. The remaining options vest in three equal installments on the anniversary of the grant date, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (3) Represents time-vested options granted on January 30, 2023. A portion of the options vested at grant. The remaining options vest in three equal installments on the anniversary of the grant date, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (4) Represents time-vested options granted on August 10, 2023. A portion of the options vested at grant. The remaining options vest in four equal installments on the anniversary of the grant date, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (5) Represents time-vested options granted on May 15, 2023. The options vest in five equal installments on the anniversary of the grant date, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (6) Represents TRSUs granted on January 29, 2021. The units vest in three equal annual installments beginning on January 29, 2022, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (7) Represents PRSUs granted on January 29, 2021. Cliff vesting of these units will occur on the later of the third anniversary date or the date at which sufficient data is available to determine vesting criteria are met. If vesting criteria are not met, the units will be forfeited. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (8) Represents TRSUs granted on February 7, 2019. The units vest in five equal annual installments beginning on February 7, 2020, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (9) Represents TRSUs granted on February 7, 2020. The units vest in five equal annual installments beginning on February 7, 2021, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (10) Represents TRSUs granted on January 28, 2022. The units vest in three equal annual installments beginning on January 28, 2023, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (11) Represents PRSUs granted on January 28, 2022. Cliff vesting of these units will occur on the later of the third anniversary date or the date at which sufficient data is available to determine vesting criteria are met. If vesting criteria are not met, the units will be forfeited. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (12) Represents TRSUs granted on January 30, 2023. The units vest in three equal annual installments beginning on January 30, 2024, subject to the continued employment of the executive. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (13) Represents PRSUs granted on January 30, 2023. Cliff vesting of these units will occur on the later of the third anniversary date or the date at which sufficient data is available to determine vesting criteria are met. If vesting criteria are not met, the units will be forfeited. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (14) Market values based on the Company’s closing stock price of $33.90 as of December 31, 2023. |
OPTION EXERCISES AND STOCK VESTED SUMMARY TABLE
OPTION EXERCISES AND STOCK VESTED SUMMARY TABLE The following table provides information about shares received upon vesting of restricted shares and exercise of options during the year ended December 31, 2023:
OPTION EXERCISES AND STOCK VESTED SUMMARY TABLE
| Name and Principal Position | Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Shares Received Upon Vesting (#) | Value Realized on Vesting ($) | | Brad S. Elliott | — | — | 26,046 | 774,284 | | Chris M. Navratil | — | — | 1,569 | 47,615 | | Julie A. Huber | — | — | 5,867 | 175,775 | | Brett A. Reber | — | — | 5,669 | 169,534 | | Richard A. Sems | — | — | — | — | | Eric R. Newell | — | — | 5,424 | 134,921 |
NON-QUALIFIED DEFERRED COMPENSATION TABLE
NON-QUALIFIED DEFERRED COMPENSATION TABLE This table provides information about the NEOs’ earnings and balances under our SERP during the year ended December 31, 2023:
NON-QUALIFIED DEFERRED COMPENSATION TABLE
| Name and Principal Position | Company Contributions in 2023 (1) | Aggregate Earnings in 2023 (2) | Aggregate Balance at December 31, 2023 | | Brad S. Elliott | $228,378 | $27,620 | $255,998 | | Chris M. Navratil (3) | — | — | — | | Julie A. Huber | 90,002 | 10,216 | 100,218 | | Brett A. Reber | 87,003 | 11,377 | 98,380 | | Richard A. Sems (3) | — | — | — | | Eric R. Newell (4) | 120,000 | — | — |
NON-QUALIFIED DEFERRED COMPENSATION TABLE
| (1) These amounts are included in the Summary Compensation Table for fiscal year 2023. |
NON-QUALIFIED DEFERRED COMPENSATION TABLE
| (2) These amounts have not been reflected in the Summary Compensation Table for fiscal year 2023. |
NON-QUALIFIED DEFERRED COMPENSATION TABLE
| (3) Messrs. Navratil and Sems were not NEOs at the time the 2023 contributions were made. |
NON-QUALIFIED DEFERRED COMPENSATION TABLE
| (4) Mr. Newell’s account was forfeit upon his resignation from the Company. No payouts were made. |
NON-QUALIFIED DEFERRED COMPENSATION TABLE
The SERP is unfunded and unsecured. Company contributions are notional and are at the discretion of the Compensation Committee. Company contributions credited to a participant’s account under the SERP are credited with hypothetical investment earnings based on participant investment elections made from among deemed investment options available under the SERP (which currently mirror the investment elections available under the Bank’s 401(k) retirement savings plan).
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL As discussed under “Other Factors Affecting Executive Compensation,” on page 38, we have entered into employment agreements, which include change of control provisions, with each of our named executive officers (collectively, the “agreements”). The agreements are designed to promote stability and continuity of our senior executive management. Each agreement includes a “double trigger” structure which provides that the executive officer will not receive a “change of control” payment unless both (i) a change in control occurs and (ii) the executive’s employment terminates involuntarily for reasons other than for cause or voluntarily for good reason within 12 or 24 months, dependent on executive, in either case following the change in control. Under the agreements, a change of control will be deemed to have occurred if:
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| 1. | Any person, entity or a “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of the Company or Equity Bank (“Bank”) securities possessing 50% or more of: |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| • | the then outstanding shares of the Company or the Bank; |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| • | the combined voting power of the Company’s or the Bank’s then outstanding securities; or |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| • | the fair market value of all of the Company’s or the Bank’s the outstanding securities. |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
Provided the person, entity or group did not previously own 50% or more of the applicable metric above.
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| 2. | The majority of the members of the Board of Directors of the Company is replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors of the Company prior to the date of the appointment or election |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| 3. | The consummation of a merger or consolidation of the Company or the Bank with any other entity other than: |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| • | a merger or consolidation which would result in the voting securities of the Company or the Bank outstanding immediately prior to such merger or consolidation continuing to represent 50% or more of the combined voting power of the voting securities of the Company or the Bank or such surviving entity or any parent hereof outstanding immediately after such merger or consolidation; or |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| • | a Merger or consolidation effected to implement a recapitalization of the Company or the Bank in which no person, entity or group is or becomes the beneficial owner, directly or indirectly, of securities of the Company or the Bank representing 50% or more of the ownership interests summarized under ‘1’ above. |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| 4. | Any sale of all, or substantially all, of the assets of the Company or the Bank. |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
For purposes of the employment agreements, termination for “good reason”, generally, means that the executive has terminated employment because the executive’s compensation has been reduced, or the executive’s job duties have been materially changed or the executive’s principal place of employment has changed by more than 30 miles. If the circumstances that create the “good reason” are resolved within 30 days following notice being provided, a “good reason” termination is generally not available. The agreements generally require that the executive not disclose or use confidential information of the Company both during and after the conclusion of the executive’s employment, and not solicit employees of the Company or the Bank and/or not compete with the Company or the Bank during the term of the agreement and during the associated restricted period under the agreement. Each of the agreements includes a continuation multiple which is used to calculate potential payments under the agreement as follows:
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| Name and Principal Position | Continuation Multiple | | Brad S. Elliott | 2.99 | | Chris M. Navratil | 2.99 | | Julie A. Huber | 2.99 | | Brett A. Reber | 2.99 | | Richard A. Sems | 2.99 | | Eric R. Newell | 2.99 |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
In the event an executive experiences a termination that qualifies under the ‘dual trigger’ requirements within the contract after a change in control, compensation and benefits under the agreements include: (1) payment of the sum of the base salary for the most recent calendar year ending before the date of the change in control and the amount of other cash payments received during such calendar year multiplied by the continuation multiple; and (2) the immediate vesting of all stock options, restricted shares and RSUs. The agreements also include a provision that limits change-in-control payments to executives in order to eliminate any potential excise taxes under Section 4999 of the Internal Revenue Code. In the event the calculated payment exceeds the Section 280G limit, the benefits will be reduced to an amount below the limit. The following table includes the amount of compensation payable to each of the NEOs upon a termination of employment under certain circumstances as of December 31, 2023:
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| Name and Principal Position | Benefit | Term Without Cause / Good Reason | Change in Control | Death or Disability | | Brad S. Elliott | Compensation Continuation | $779,593 | $4,161,518 | $— | | Chief Executive Officer and | Equity Award Vesting (1,2) | 1,754,325 | 1,754,325 | 1,754,325 | | Chairman of the Board | | | | | | Chris M. Navratil | Compensation Continuation | 242,885 | 1,155,189 | — | | Executive Vice President and | Equity Award Vesting (1,2) | 212,824 | 212,824 | 212,824 | | Chief Financial Officer | | | | | | Julie A. Huber | Compensation Continuation | 309,172 | 1,408,664 | — | | Executive Vice President, | Equity Award Vesting (1,2) | 449,650 | 449,650 | 449,650 | | Strategic Initiatives | | | | | | Brett A. Reber | Compensation Continuation | 306,042 | 1,347,360 | — | | Executive Vice President and | Equity Award Vesting (1,2) | 412,665 | 412,665 | 412,665 | | Chief Credit Officer | | | | | | Richard A. Sems | Compensation Continuation | 377,308 | 2,346,420 | — | | Executive Vice President, | Equity Award Vesting (1,2) | — | — | — | | President of Equity Bank | | | | | | Eric R. Newell | Compensation Continuation | — | — | — | | Executive Vice President and | Equity Award Vesting (1,2) | — | — | — | | Chief Financial Officer, Former | | | | |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| (1) Equity awards are subject to pro-rata vesting in the event of death, disability, termination without cause, or termination for good reason of the named executive. The value reflected within the table is the maximum number of shares under these scenarios at the Target vesting threshold. |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| (2) All values are based on the market price of the Company’s stock as of December 31, 2023, or $33.90. |
POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL
| (3) Each of the employee agreements include a provision that limits change-in-control payments to executives in order to eliminate any excise taxes under section 4999 of the Internal Revenue Code. In the event the calculated payment exceeds the Section 280(G) limit, the benefits will be reduced to a level below that threshold. |