DEF 14A of First Commonwealth Financial Corp /Pa/
Filed Mar 14, 2024 · FY20230001193125-24-067884
Our Director Nominees
Our Director Nominees You are being asked to vote on the election of the fifteen (15) director nominees listed below. Detailed information about each nominee’s background, skills and expertise can be found under “Proposal 1 – Election of Directors.”
Our Director Nominees
| Name Current Position | Age | Director Since | Independent | Audit | Governance | Compensation & Human Resources | Risk | | Julie A. Caponi Retired Assistant Treasurer of Arconic | 62 | 2007 | YES | Chair | | | 🌑 | | Ray T. Charley Chief Executive Officer of Thomi Co. | 72 | 1998 | YES | | 🌑 | 🌑 | | | Gary R. Claus Retired Tax Partner of PWC | 71 | 2011 | YES | 🌑 | | 🌑 | | | David S. Dahlmann Retired President and CEO of Southwest National Corporation and Southwest Bank | 74 | 1998 | YES | | | | Chair | | Johnston A. Glass Retired President and CEO of First Commonwealth Bank | 74 | 1986 | YES | | | | 🌑 | | Jon L. Gorney Retired Executive Vice President of National City Corporation | 73 | 2013 | YES | | | | 🌑 | | Jane Grebenc EVP and Chief Revenue Officer; President, First Commonwealth Bank | 65 | 2020 | NO | | | | 🌑 | | David W. Greenfield Retired General Counsel of Kennametal, Inc. | 73 | 2010 | YES | | Chair | 🌑 | | | Patricia A. Husic Former President and CEO of Centric Financial Corp and Centric Bank | 59 | 2023 | YES | | | | 🌑 | | Bart E. Johnson Managing Member of Serenity Pools, LLC | 58 | 2017 | YES | 🌑 | | | 🌑 | | Luke A. Latimer Chair, CEO & President of R&L Development, Inc. | 47 | 2011 | YES | | 🌑 | | | | Aradhna M. Oliphant Chief Operations and Strategy Officer, Wallis Annenberg Legacy Foundation | 58 | 2019 | YES | | 🌑 | 🌑 | | | T. Michael Price President and CEO of First Commonwealth Financial Corporation | 61 | 2012 | NO | | | | | | Robert J. Ventura Executive Managing Director of Ventura Group LLC | 74 | 2004 | YES | 🌑 | | Chair | | | Stephen A. Wolfe President and CEO of Indiana Regional Medical Center | 59 | 2017 | YES | | | 🌑 | |
Our Director Nominees
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Compensation of Directors
Compensation of Directors Our Governance Committee annually reviews and recommends the type and amount of compensation paid to non-employee directors. Mr. Price and Ms. Grebenc receive no additional compensation for serving as a director. The primary objectives of the Committee’s annual review are to confirm continued alignment with business and shareholder interests, evaluate our director compensation program relative to our peers, and identify and respond to continued changes in director compensation in light of the competitive environment. The Governance Committee conducted its annual compensation review for 2023 in October 2022 and maintained the current level of director compensation.
Director Compensation Schedule
Director Compensation Schedule In 2023 our Non-Management directors were compensated according to the following schedule:
Director Compensation Schedule
| Board Member Retainer(1) | $82,750 | | Committee Member Retainer | $8,000 | | Committee Chair Premium(2) | $12,000 | | Audit Committee Chair Premium(2) | $14,500 |
Director Compensation Schedule
| (1) Half of the annual retainer fee for service on the Board of Directors is paid in cash and half is paid in shares of common stock based on the closing price of the Company’s stock on the date of the annual meeting of Shareholders. Directors who own shares having a value of at least $400,000 may elect to receive their full retainer in cash. |
Director Compensation Schedule
| (2) The Chair of each Committee is paid a premium for the additional time and effort required to chair the committee. The premium is in addition to the Committee Member Retainer. |
Director Compensation Schedule
In addition to the fees described above, the non-executive Chair receives an annual retainer fee of $100,000.
Director Compensation in 2023
Director Compensation in 2023 The following table shows the compensation paid to our non-employee directors during 2023:
Director Compensation in 2023
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | | Julie A. Caponi | 105,250 | 0 | 8,000 | 113,250 | | Ray T. Charley | 57,375 | 41,375 | 0 | 98,750 | | Gary R. Claus | 98,750 | 0 | 0 | 98,750 | | David S. Dahlmann | 102,750 | 0 | 8,000 | 110,750 | | Johnston A. Glass | 90,750 | 0 | 20,000 | 110,750 | | Jon L. Gorney | 149,375 | 41,375 | 8,000 | 198,750 | | David W. Greenfield | 69,375 | 41,375 | 0 | 110,750 | | Patricia A. Husic | 81,188 | 0 | 5,333 | 86,521 | | Bart E. Johnson | 49,375 | 41,375 | 8,000 | 98,750 | | Luke A. Latimer | 90,750 | 0 | 0 | 90,750 | | Aradhna M. Oliphant | 57,375 | 41,375 | 0 | 98,750 | | Robert J. Ventura | 110,750 | 0 | 0 | 110,750 | | Stephen A. Wolfe | 49,375 | 41,375 | 0 | 90,750 |
Director Compensation in 2023
| (1) “Fees Earned or Paid in Cash” consists of retainer fees for service on the Board of Directors and committees of First Commonwealth Financial Corporation. |
Director Compensation in 2023
| (2) “Stock Awards” consists of the portion of the annual retainer paid in shares of common stock based upon the grant date fair value of the shares. |
Director Compensation in 2023
| (3) “All Other Compensation” consists of cash retainer fees for service on the Credit Committee of First Commonwealth Bank. |
Director Compensation in 2023
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Director Compensation in 2023
Upon the recommendation of our Governance Committee, the Board of Directors has nominated the fifteen (15) persons named below for election at the 2023 Annual Meeting of Shareholders to serve until the next annual meeting and until his or her successor is elected and qualified. Relevant biographical information concerning each nominee, including the nominee’s business experience and qualifications, is set forth below. Julie A. Caponi. Ms. Caponi, age 62, was a Certified Public Accountant from 1986 until December 2023. In January 2018, she retired from her position as Assistant Treasurer of Arconic Inc. (formerly known as Alcoa Inc.), a manufacturer of engineered products from aluminum and other lightweight metals, having served in that capacity since May 2013. Ms. Caponi previously served as Vice President-Audit of Arconic from 2005 to 2013 and as Assistant Controller of Arconic from 2000 to 2005. Before joining Arconic, Ms. Caponi was an audit partner at Deloitte, principally serving clients in the financial services industry. Ms. Caponi joined our Board in 2007 and currently chairs our Audit Committee, serves as a member of our Risk Committee, and is a director of First Commonwealth Bank. Ms. Caponi has served as a Director of First Western Financial, Inc., a bank holding company in Denver, Colorado, since 2017 and is Chair of the audit and a member of the compensation committees of First Western Financial. Ms. Caponi earned a Bachelor of Science Degree in Accounting from the Indiana University of Pennsylvania. Ms. Caponi’s qualifications for service on our Board include her leadership experience and her expertise in financial accounting, auditing and internal controls. Ray T. Charley. Mr. Charley, age 72, has served as the Chief Executive Officer of Thomi Co., an operator of retail grocery stores in Greensburg, Pennsylvania, since 1983. Mr. Charley served as a director of Southwest National Corporation from 1989 and joined our Board in 1998 upon the completion of our merger with Southwest National Corporation. Mr. Charley is a member of our Governance Committee and our Compensation and Human Resources Committee and is also a director of First Commonwealth Bank. He is the Chair of the Westmoreland Frick Hospital Foundation of Excela Health, an operator of hospitals and other health care facilities in Western Pennsylvania, and a former officer of Excela Health Holding Co. Mr. Charley also serves as a director and in leadership capacities for various charitable organizations. Mr. Charley earned a Bachelor’s degree from Duquesne University and a law degree from the Pennsylvania State University Dickinson School of Law. Mr. Charley’s qualifications for service on our Board include his business acumen and his commitment to sound governance and oversight as demonstrated by his extensive experience as a director in the financial services industry. Gary R. Claus. Mr. Claus, age 71, is a Certified Public Accountant. Mr. Claus spent 35 years as a tax accountant at PriceWaterhouseCoopers, where he was admitted as a Partner in 1986 and served as the Pittsburgh Tax Site Leader from 1992 through 2004. He served as an executive search and talent consultant from 2008 until his retirement in October 2017. Mr. Claus joined our Board in April 2011, serves as a member of our Audit Committee and our Compensation and Human Resources Committee and is also a director of First Commonwealth Bank. Mr. Claus has a wide variety of experience advising clients ranging from large publicly held companies to small privately owned companies, including manufacturers, law firms and other service companies. He is also active in professional, community and church organizations, serving as Chairman of the Board of Goodwill of Southwestern Pennsylvania and Chairman of the Board of Trustees of Robert Morris University. Mr. Claus earned a Bachelor of Science degree in Accounting from Robert Morris University and completed the Advanced Human Resources Executive Program at the University of Michigan. Mr. Claus’s qualifications for Board service include his extensive professional experience in accounting, executive compensation and human resources. David S. Dahlmann. Mr. Dahlmann, age 74, is retired. He was formerly Vice Chairman of First Commonwealth Financial Corporation from 1998 to 2002, President and Chief Executive Officer of Southwest National Corporation from 1991 to 1998 and President and Chief Executive Officer of Southwest Bank from 1991 until its merger with First Commonwealth Bank in 2002. He was a director of Southwest National Corporation from 1991 and joined our Board in 1998 upon the completion of our merger with Southwest National Corporation. He served as the Chairman of the Board of First Commonwealth Financial
Director Compensation in 2023
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Director Compensation in 2023
Corporation and First Commonwealth Bank from 2006 until April 2021. Mr. Dahlmann formerly served on the Board of Directors of the Federal Reserve Bank of Cleveland and as an Adjunct Professor at Saint Vincent College in Latrobe, Pennsylvania, and he has served as a director for numerous charitable, educational and civic associations. Mr. Dahlmann chairs our Risk Committee and is a director of First Commonwealth Bank. He earned a Bachelor’s Degree in Economics and Masters of Business Administration degrees from the Indiana University of Pennsylvania. Mr. Dahlmann’s qualifications for Board service include his extensive career as a director and executive in the financial services industry and his expertise and experience in corporate governance matters. Johnston A. Glass. Mr. Glass, age 74, is retired. Mr. Glass has served on our Board since 1986. He served as Vice Chairman of First Commonwealth Financial Corporation and as President and Chief Executive Officer of First Commonwealth Bank and its predecessor, NBOC Bank, until his retirement in 2005. Mr. Glass serves as member of our Risk Committee and is a director of First Commonwealth Bank. Mr. Glass served as a director of First National Bank of Santa Fe until May 2013. He has served as a director and officer of numerous civic and non-profit associations and as past director of the Pennsylvania Bankers Association. He earned a Bachelor of Science degree from the Pennsylvania State University. Mr. Glass’s qualifications for Board service include his extensive leadership experience in the banking industry, his thorough understanding of First Commonwealth and its business and his long history of service as a director of First Commonwealth and other organizations. Jon L. Gorney. Mr. Gorney, age 73, is a management consultant. He joined our Board in January 2013 and was elected as Chair of the Board of First Commonwealth Financial Corporation and First Commonwealth Bank in April 2021. Mr. Gorney serves as a member of our Risk Committee and is a director of First Commonwealth Bank. Mr. Gorney began his 37-year career in the financial services industry with National City Corporation. He served as Executive Vice President of National City Corporation from 1992 through 2008 and oversaw all technology and operations for National City. From 2004 through 2006, Mr. Gorney also served as Chairman and Chief Executive Officer of National Processing Company, a majority subsidiary of National City that was the second largest merchant card processor in the United States. Mr. Gorney joined PNC Financial Services Group through the acquisition of National City in December 2008 and served as an Executive Vice President until his retirement in June 2010. While at PNC, Mr. Gorney co-chaired the company-wide integration of PNC and National City and was responsible for the leadership and development of a single operating organization for PNC. He currently serves as a director of Professional Bank, Coral Gables, Florida. Mr. Gorney earned a Bachelor of Science degree in Computer Science from the University of Dayton. His qualifications for Board service include his extensive experience as a financial services executive and his strong expertise in financial services information technology and operations. Jane Grebenc. Ms. Grebenc, age 65, has served as Executive Vice President and Chief Revenue Officer of First Commonwealth Financial Corporation and President of First Commonwealth Bank since May 31, 2013. Ms. Grebenc is a member of our Risk Committee and director of First Commonwealth Bank. Ms. Grebenc’s financial services career includes executive leadership roles at a variety of institutions, including Park View Federal Savings Bank, Key Bank, and National City Bank. She was formerly the Executive Vice President in charge of the retail, marketing, IT and operations and the mortgage segments at Park View Federal Savings Bank from 2009 until 2012, the Executive Vice President in charge of the Wealth Segment at Key Bank from 2007 until 2009 and the Executive Vice President / Branch Network at National City Bank prior to 2007. Ms. Grebenc received her Bachelor of Science degree in Economics from John Carroll University, and she earned her MBA in Finance and Marketing from Case Western Reserve University. Her qualifications for service on our Board include her thorough understanding of the banking and financial services industry. David W. Greenfield. Mr. Greenfield, age 73, is retired. He has served on our Board since April 2010 and is a member of our Compensation and Human Resources Committee and Chair of our Governance Committee. He is also a director of First Commonwealth Bank. Mr. Greenfield was formerly Vice President, Secretary and General Counsel of Kennametal, Inc., a global manufacturer of tooling, engineered
Director Compensation in 2023
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Director Compensation in 2023
components and advanced materials consumed in production processes from 2001 until his retirement in 2010. Prior to joining Kennametal in 2001, Mr. Greenfield was a shareholder of Buchanan Ingersoll & Rooney P.C., a Pittsburgh-based law firm, focusing on corporate, financial and transactional issues involving public and private companies. He also served as Senior Vice President, General Counsel and Secretary of Meritor Automotive, Inc. and Associate General Counsel of Rockwell International Corporation. He is also active in a number of charitable, educational and civic organizations, and also serves as a trustee of Warren Wilson College in Asheville, North Carolina. Mr. Greenfield earned a Bachelor of Arts degree from the University of Pittsburgh and a law degree from Wake Forest University School of Law. Having practiced law for over 35 years and served in executive capacities for three publicly traded companies, Mr. Greenfield has extensive experience in corporate governance, ethics and compliance matters and the execution of corporate strategy and is therefore qualified to serve as a director. Patricia A. Husic. Ms. Husic, age 59, served as President, Chief Executive Officer, and a Director of Centric Financial Corp. and Centric Bank in Harrisburg, Pennsylvania, from 2007 until the acquisition by First Commonwealth. She was a co-founder of Centric Financial in 2007. Ms. Husic joined our Board on February 1, 2023, upon the closing of the acquisition. She is also a director of First Commonwealth Bank and a member of the Risk Committee. Prior to founding Centric, Ms. Husic served as President, COO and Director of Vartan Bank from 2005 until the acquisition in 2007 by Centric Financial. She served as Executive Vice President, Chief Operating Officer and Chief Financial Officer of Vartan Bank from 2004 to 2005. Previously, Ms. Husic was a member of the executive management team at Pennsylvania State Bank from 1991 to 2004, overseeing accounting, finance, and management information systems, during her tenure. She currently serves on the board of the American Bankers Mutual Insurance, LTD and as a director and secretary of the Central Pennsylvania Food Bank. Ms. Husic served as Chair of the Pennsylvania Bankers Association in 2013 and founded the Women in Banking program at the association during that time. She also served on the board of the American Bankers Association from 2016 to 2019. Ms. Husic has been recognized by American Banker magazine as one of the Most Powerful Women in Banking for the years 2015-2021. She earned her Bachelor’s degree in Accounting and Management Information Systems from Temple University and is a Certified Public Accountant. Ms. Husic brings over 30 years of experience and leadership in the banking industry and provides an important connection between First Commonwealth and its Eastern Pennsylvania markets. Bart E. Johnson. Mr. Johnson, age 58, is Managing Member of Serenity Pools, LLC, a pool construction company serving the greater Columbus Ohio region. He previously served as President and Chief Executive Officer of AgriCommunicators, Inc., a multi-channel communications firm specializing in the agricultural community. Mr. Johnson served as a director of DCB Financial Corp., the bank holding company for The Delaware County Bank and Trust Company, from 2010 until the merger of DCB Financial Corp with First Commonwealth. Mr. Johnson was appointed to our Board following the merger in April 2017. He is also a director of First Commonwealth Bank and serves as a member of our Audit Committee and Risk Committee. He earned a Bachelor’s degree in Agricultural Economics from The Ohio State University. Mr. Johnson has expertise in business, marketing and communications, and his background and association with Delaware County, Ohio and the regional community provides an important connection between First Commonwealth and its Central Ohio market. Luke A. Latimer. Mr. Latimer, age 47, is Chairman, Chief Executive Officer and President of R&L Development, a heavy construction company in New Alexandria, Pennsylvania. He previously served as Executive Vice President and Treasurer of R&L Development from 1999 to October 2015. Mr. Latimer is a General Partner of SML Limited Partnership, a real estate holding and development partnership in New Alexandria, Pennsylvania. Mr. Latimer joined our Board in April 2011. He also serves as a director of First Commonwealth Bank and is a member of our Governance Committee. Mr. Latimer has served as a Director of First Western Financial, Inc., a bank holding company in Denver, Colorado, since July 2015, and serves on the Audit and Governance Committees of the First Western Financial Board. He previously served as Chairman of the Board of Directors of First National Bank of Santa Fe and a director of New Mexico Banquest Corporation, a bank and bank holding company in Santa Fe, New Mexico, until May 2013. Mr. Latimer earned a Bachelor of Science degree in Business Management from Saint Vincent College. His qualifications for service as a director include his extensive business experience and his years of service as a director in the financial services industry.
Director Compensation in 2023
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Director Compensation in 2023
Aradhna M. Oliphant. Ms. Oliphant, age 58, serves as the Chief Operations and Strategy Officer of the Wallis Annenberg Legacy Foundation, a philanthropic foundation based in Los Angeles, California. She previously served as President and Chief Executive Officer of Leadership Pittsburgh, Inc., a leadership development and networking organization in Southwestern Pennsylvania, from 2005 until 2022. Ms. Oliphant has also held leadership positions at The Forbes Funds, an affiliate of the Pittsburgh Foundation, The Children’s Festival Chorus in Pittsburgh, and Princeton Pro Musica in New Jersey. She has also served as an Adjunct Professor of Business Management and Psychology at various universities in New Jersey including Rider University, College of New Jersey, and College of St. Elizabeth. Ms. Oliphant joined our Board in April 2019 and serves as a member of our Compensation and Human Resources Committee and Governance Committee. She is also a director of First Commonwealth Bank. Ms. Oliphant earned a Bachelor of Arts Degree in Humanities and a Master of Arts Degree in Psychology from University of Bhopal, India, and a Master of Business Administration from Rutgers University, New Jersey. She has received Honorary Doctorates from Waynesburg University and Robert Morris University, both in Pennsylvania. Ms. Oliphant’s qualifications for service on our Board include her extensive leadership, professional development and business experience, and strong network and reputation among leaders across the business, foundation, public and civic sectors. T. Michael Price. Mr. Price, age 61, is the President and Chief Executive Officer of First Commonwealth Financial Corporation and Chief Executive Officer of First Commonwealth Bank. He has been a director of the Company since March 2012 and is also a director of First Commonwealth Bank. He served as Interim President and Chief Executive Officer of the Company from January 2012 until being appointed to serve in that capacity on a permanent basis in March 2012. Mr. Price served as President of First Commonwealth Bank from November 2007 until May 2013. Before joining First Commonwealth, Mr. Price served as Chief Executive Officer of the Cincinnati and Northern Kentucky Region of National City Bank from July 2004 to November 2007 and as Executive Vice President and Head of Small Business Banking of National City Bank prior to July 2004. He currently serves on the Board of Directors of Indiana Regional Medical Center and is the First Vice Chairman of the Pennsylvania Bankers Association Board of Directors. Mr. Price received his Bachelor of Science degree from the University of Utah, and he earned his MBA from Cleveland State University. Mr. Price’s qualifications for service on our Board include his thorough understanding of the banking and financial services industry, which he has attained through more than 25 years of executive leadership experience. Robert J. Ventura. Mr. Ventura, age 74, is Executive Managing Director of Ventura Group, LLC, an investment banking firm in Pittsburgh, Pennsylvania, and formerly served in a similar capacity as Managing Director of Raptor Partners, LLC, from June 2010 through August 2012 and as Principal of Ventura Group, LLC. Mr. Ventura previously served as Director of Acquisitions and Divestitures and Director of Financial Planning and Analysis during a 15-year career with Rockwell International Corporation, a diversified global manufacturing company. Mr. Ventura served as a director of GA Financial, Inc. from 1998 and joined our Board in 2004 at the completion of our acquisition of GA Financial, Inc. Mr. Ventura chairs our Compensation and Human Resources Committee, serves as a member of our Audit Committee and is also a director of First Commonwealth Bank. He earned a Bachelor of Science degree in Industrial Engineering from the University of Pittsburgh and Masters of Business Administration degree from Duquesne University and has held Series 79 and 63 securities licenses. Mr. Ventura’s qualifications for Board service include his expertise in business and financial analysis and mergers and acquisitions and his experience as a director in the financial services industry. Stephen A. Wolfe. Mr. Wolfe, age 59, has served as President and Chief Executive Officer of Indiana Regional Medical Center, an independent community hospital in Indiana, Pennsylvania, since 1999. Mr. Wolfe is the Founder, President and Chairman of the Pennsylvania Mountains Healthcare Alliance, a regional health information organization that facilitates the exchange of electronic health information among healthcare providers, and is the Chairman of the Pennsylvania Mountain Care Network, a collaborative network of three hospitals in Western Pennsylvania. Mr. Wolfe joined our Board in April 2017 and serves as a director of First Commonwealth Bank and as a member of our Compensation and Human Resources Committee. He is active in numerous civic and charitable organizations, having served as Chairman of the
Director Compensation in 2023
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Director Compensation in 2023
Indiana County Chamber of Commerce, a member of the Indiana County Development Corporation and Center for Economic Operations, the co-founder and Chairman of the Seeds of Faith Christian Academy and Campaign Chair for the United Way. Mr. Wolfe earned a Bachelor of Science degree in Pharmacy from Temple University and a Masters in Public Administration from Penn State University. Mr. Wolfe contributes extensive experience in business, strategic planning and execution and organizational development to our Board of Directors. Each director elected this year will continue in office until a successor has been elected. Each nominee has indicated that he or she will serve if elected. We do not anticipate that any nominee will be unable or unwilling to stand for election, but if that happens, your proxy will be voted for another person nominated by the Board. The Board may also choose to reduce the number of directors to be elected, as permitted by our By-laws. The Board of Directors recommends that you vote “FOR” each of the nominees listed above.
Director Compensation in 2023
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Executive Summary
| • | The short-term incentive program rewards growth in core earnings per share (Core EPS), core pre-tax pre-provision return on average assets (PTPP ROA) and Core Efficiency Ratio. The performance goals were set to meet or exceed the consensus estimate of analysts and exceed peer performance. |
Executive Summary
| • | Our long-term incentive program for the 2023-2025 performance cycle rewards our relative performance for core return on tangible common equity (ROTCE) and total shareholder return (TSR). |
2023 Financial and Strategic Accomplishments
| • | Deposits grew by $430 million or 5.4% (excluding acquired deposits) in an intensely competitive market for deposits. Loans grew $421 million or 5.5% (excluding acquired loans), as management tempered loan growth to maintain liquidity. |
Summary of Executive Compensation Actions
| • | We adopted an Annual Incentive Plan (AIP) in 2023 and granted awards to our NEOs under the 2023 AIP. For the 2023 AIP, we retained Core EPS, Core PTPP ROA, and Core Efficiency Ratio as performance measures. The terms of the 2023 AIP were materially the same as previous years. |
Summary of Executive Compensation Actions
| • | We granted awards to our NEOs under the 2023-2025 LTIP consisting of 50% time-vesting restricted stock units (RSUs) and 50% performance-vesting restricted stock units (PRSUs). Vesting of PRSUs continues to be contingent on relative performance of TSR and Core ROTCE relative to our performance peer group. |
Summary of Executive Compensation Actions
| • | In 2024, we paid AIP awards to the NEOs based on 2023 performance. Core EPS fell between the Target and Superior levels, Core Efficiency Ratio fell between the Threshold and Target levels, while Core PTPP ROA did not achieve the Threshold performance level. The calculated award under the AIP equated to 96.9% of the Target award for risk management executives and 87.7% of the Target award for other participants. The Committee exercised discretion to pay all participants at 100% of the Target award recognizing the Company’s strong performance relative to peers in a challenging operating environment. See “Executive Compensation Decisions in 2023 – Annual Incentive Plan” for a discussion of the factors considered by the Committee in determining the payout under the AIP. |
Summary of Executive Compensation Actions
| • | In 2024, pursuant to our 2021-2023 LTIP we approved the award of common stock equal to 200% of the target award level for the PRSUs and the vesting of time-vesting RSUs. TRS fell at the 87th percentile of the peer group, and Core ROTCE fell at the 78th percentile of the peer group, in each case achieving the Superior performance level. |
Summary of Executive Compensation Actions
| • | In 2024, the Committee approved a discretionary contribution to the Non-Qualified Deferred Compensation Plan in the amount of $12,500 each for 17 participants in the Plan, including the NEOs. |
CEO Pay At-A-Glance
| (1) CEO compensation for 2017 through 2020 includes one-fifth of the grant date fair value of 60,000 restricted stock units granted in December 2015 which vested on the fifth anniversary of the grant date. |
Advisory Vote on Executive Compensation
| Summary of Executive Compensation Practices | | | | Align executive pay with performance and align executive interests with shareholders | ✓ | Assess performance with financial, strategic and total return measures | | | ✓ | Consider competitive pay opportunity, as well as realized pay, in managing and aligning overall executive compensation arrangements and individual pay decisions | | | ✓ | Limit the use of perquisites | | | ✓ | Establish equity-based award levels that represent a substantial component of executives’ pay opportunities | | | ✓ | Vest 50% of long-term incentive award based on relative performance of Core ROTCE and TSR, which are closely aligned with shareholders | | | ✓ | Require directors and executives to maintain significant share ownership | | Maintain effective governance of our programs | ✓ | Incentive compensation subject to a “claw back” policy in the event of an accounting restatement, as required by NYSE and SEC rules | | | ✓ | Conduct executive sessions of the Compensation & Human Resources Committee without management present | | | ✓ | Prohibit liberal share recycling within the equity plan | | | ✓ | Prohibit re-pricing of equity awards | | | ✓ | Prohibit hedging or pledging of company stock by directors or executive officers | | | ✓ | Utilize an independent compensation consultant that serves only the Compensation and Governance Committees of the Board | | | ✓ | Conduct risk assessment to ensure the compensation programs do not encourage inappropriate risk taking | | Protect shareholders | ✓ | Offer agreements with double trigger change of control termination and do not offer tax gross-ups | | | ✓ | Require executives to agree to reasonable protective covenants including confidentiality and non-solicitation provisions | | | ✓ | Emphasize the role of total return relative to others in our industry |
Compensation Philosophy and Objectives
| • | Competitive Compensation. We will provide compensation opportunities to executive officers that, in the aggregate, reflect the median practices of similarly-sized banks in the Mid-Atlantic and Midwest, adjusted for individual variance in skill and contribution. |
Compensation Philosophy and Objectives
| • | Promote Long-Term Share Ownership. We use share ownership to support risk management efforts, balancing demands for short-term results with long-term consequences. All long-term incentive awards are paid with shares of Company stock, and all executives are expected to maintain a significant investment in the Company in accordance with our share ownership and retention guidelines. |
Compensation Philosophy and Objectives
| • | Provide Reasonable Income Security. We provide change of control agreements to our executive officers consistent with industry standards and competitive requirements. These agreements are designed to foster stability and retain well-qualified executives by providing reasonable income protection upon termination of employment following a change of control. All agreements are “double trigger,” requiring both a change of control and the loss of employment, and no agreement provides for any gross-up of taxes. |
Base Salary
| • | Considering the competitive marketplace for executive talent, primarily through a comparison to base salaries for comparable positions with companies in our compensation peer group. |
Incentive Compensation
| • | an annual incentive plan, or AIP, which provides for the payment of annual cash awards based on the attainment of annual corporate performance measures and, in the case of risk management executives, individual performance measures, and |
Incentive Compensation
| • | a long-term incentive compensation plan, or LTIP, which provides performance-based equity compensation determined by the attainment of corporate performance measures relative to the Company’s performance peer group over a rolling three-year period and time-vesting restricted stock units. |
Role of the Compensation Committee
| • | determine the CEO’s salary, bonus and other incentive and equity compensation and review and approve the individual and corporate goals assigned to the CEO and evaluate the performance of the CEO in light of those goals; |
Role of the Compensation Committee
| • | approve the salary, bonus and other incentive and equity compensation of the other executive officers and review and approve the individual and corporate goals assigned to the executive officers and the CEO’s evaluation of the performance of the executive officers in light of those goals; |
Role of Executives in Establishing Compensation
| • | making recommendations on performance measures and goals for our incentive plans; |
Role of Executives in Establishing Compensation
| • | making recommendations regarding corporate titles, base salaries, annual and long-term incentive award opportunities, discretionary awards and other employment terms for executive officers; |
Independent Compensation Consultant
Independent Compensation Consultant The Committee engaged Meridian Compensation Partners LLC (Meridian) as its independent compensation consultant for 2023. During 2023, Meridian provided the Committee with peer executive compensation data and advised the Committee regarding various matters brought before the Committee, including the Committee’s evaluation of the design of short- and long-term incentive programs, the Board’s evaluation of the CEO and the evaluation of our performance and compensation against the performance and compensation of our compensation peer group, which is described under “Peer Comparisons” and elsewhere in this CD&A. The Committee has the sole authority to retain and terminate Meridian as its compensation consultant and approve fees and other engagement terms. The Committee has determined that Meridian is independent from management based upon the consideration of relevant factors, including:
Independent Compensation Consultant
| • | that Meridian does not provide any services to the Company except advisory services to the Committee and the Governance Committee; |
Independent Compensation Consultant
| • | that the amount of fees received from the Company by Meridian is not material as a percentage of Meridian’s total revenue; |
Independent Compensation Consultant
| • | that Meridian has policies and procedures that are designed to prevent conflicts of interest; |
Independent Compensation Consultant
| • | that Meridian and its employees who provide services to the Committee do not have any business or personal relationship with any member of the Committee or any executive officer of the Company; and |
Independent Compensation Consultant
| • | that Meridian and its employees who provide services to the Committee do not own any stock of the Company. |
Independent Compensation Consultant
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Peer Comparisons
Peer Comparisons The Committee reviews a peer compensation assessment annually as a market check for the Company’s executive pay and performance. During 2023, this assessment was performed using compensation data provided by Meridian from our compensation peer group, as described below. The compensation peer group is intended to:
Peer Comparisons
| • | serve as a point of reference for defining the range of competitive pay practices, including the range of target total pay opportunities appropriate for First Commonwealth executive officers; |
Peer Comparisons
| • | help the Committee test the alignment of actual pay delivered relative to Company performance and calibrate future payouts. |
Peer Comparisons
The compensation peer group selected by the Committee is comprised of 18 publicly-traded commercial banks with headquarters in the Mid-Atlantic and Midwest. The Committee reviews the compensation peer group annually based on analysis and recommendations from Meridian and periodically adds or removes members from the compensation peer group based on changes in the size, business model and demographic profile of First Commonwealth and peer banks. The peer group companies utilized by the Committee to determine NEO compensation for 2023 are listed below.
Peer Comparisons
| (2) Financial performance for the Company and its peers is based on the average of the following performance metrics: Core EPS growth; Core ROAA; Efficiency Ratio; Core ROTCE; and Total Shareholder Return. |
Annual Incentive Plan
Annual Incentive Plan The Committee approved AIP participation for the NEOs in February 2023. The 2023 AIP utilized corporate performance measures to maximize the alignment between executive incentive pay and corporate performance. The Committee retained Core EPS, Core PTPP ROA, and Core Efficiency Ratio as corporate performance measures. The Committee retained an individual performance component for those executive officers with risk management responsibilities (our Chief Credit Officer, Chief Risk Officer and Chief Audit Executive) with a weighting of 30%. The table below lists the performance goals for the 2023 AIP and their respective weightings and threshold, target and superior performance levels, and results:
Annual Incentive Plan
| | Performance Range | | | | Weighting | | | Performance Goal(3) | Threshold | Target | Superior | Core Results (Non-GAAP) | Risk Executives | All Other NEOs | | Core EPS | $1.58 | $1.66 | $1.73 | $1.70 | 40% | 50% | | Core PTPP ROA | 2.12% | 2.15% | 2.29% | 2.00% | 15% | 25% | | Core Efficiency Ratio | 53.5% | 51.5% | 49.8% | 52.9% | 15% | 25% | | Individual Performance | Varies by participant | | | See below | 30% | 0% | | | | | | | 100% | 100% |
Annual Incentive Plan
Core EPS fell between the Target and Superior levels, Core Efficiency Ratio fell between the Threshold and Target levels, and Core PTPP ROA fell below the Threshold level. The Committee determined that Mr. Karrip achieved the Target performance level for his individual performance measures based on levels of credit costs, non-performing and criticized loans. When evaluating the Company’s performance under the 2023 AIP, the Committee noted that the Target performance levels called for EPS growth at the 92nd percentile of the peer group and Core PTPP ROA at the 82nd percentile of the peer group based on published earnings estimates when the Committee approved the AIP awards. The Committee also considered that the Company delivered financial results that substantially exceeded the median of the peer group and that the management team capably navigated a challenging operating environment with intense competition for funding and volatility stemming from several high profile bank failures. Based on these considerations, the Committee exercised discretion
Annual Incentive Plan
| (3) Core financial results exclude one-time acquisition costs. |
Annual Incentive Plan
| 32 | FIRST Commonwealth ∎ 2024 Proxy Statement |
Annual Incentive Plan
to adjust the AIP payout for each NEO to 100% of the target award. The table below sets forth the amount earned by each NEO under the original design of the 2023 AIP, the amount of the discretionary award to each NEO and the total amount paid to each NEO under the 2023 AIP.
Annual Incentive Plan
| | Original Plan Design | | | Final Payout | | | Executive | Percent of Target Earned | Amount Earned | Committee Discretion | Percent of Target | Amount | | T. Michael Price | 87.7% | $315,643 | $44,357 | 100% | $360,000 | | James R. Reske | 87.7% | $177,549 | $24,951 | 100% | $202,500 | | Jane Grebenc | 87.7% | $194,515 | $27,335 | 100% | $221,850 | | Brian G. Karrip | 96.9% | $159,679 | $5,121 | 100% | $164,800 | | Norman J. Montgomery | 87.7% | $138,532 | $19,468 | 100% | $158,000 |
Long-Term Incentive Plans
Long-Term Incentive Plans
2023-2025 LTIP
2023-2025 LTIP In January 2023, the Committee established a LTIP for the three-year performance cycle from 2023 through 2025. Awards under the 2023-2025 LTIP consist of
2023-2025 LTIP
| • | 50% performance-vesting RSUs; and |
2023-2025 LTIP
| • | 50% time-vesting RSUs which vest in a single installment on the third anniversary of the award. |
2023-2025 LTIP
The table below identifies the performance goals for the PRSUs awarded under the 2023-2025 LTIP.
2023-2025 LTIP
| | | Performance Range | | | | Performance Goal | Weighting | Threshold | Target | Superior | | Core ROTCE Relative to Peers | 50% | 25th %ile | 50th %ile | 75th %ile | | TSR Relative to Peers | 50% | 25th %ile | 50th %ile | 75th %ile |
2023-2025 LTIP
The performance peer group for the 2023-2025 LTIP is comprised of all publicly traded United States banks and thrifts having total assets greater than or equal to 50% and less than or equal to 200% of the total assets of the Company as of December 31, 2025. The number of shares that may be earned for the PRSUs ranges from 40% of the target award for threshold performance to 200% of the target award for superior performance.
2021-2023 LTIP
2021-2023 LTIP 2023 represented the final year of the performance cycle for the PRSUs issued pursuant to the 2021-2023 LTIP. Vesting was based upon First Commonwealth’s achievement of the following performance goals: (1) core ROTCE in relation to the performance peer group; and (2) TSR in relation to the performance peer group. The table below lists the performance goals for the 2021-2023 LTIP and their respective weightings and threshold, target and superior performance levels, and results:
2021-2023 LTIP
| | | Performance Range | | | | | | Performance Goal | Weighting | Threshold | Target | Superior | Results | Payout | | Core ROTCE Relative to Peers | 50% | 25th %ile | 50th %ile | 75th %ile | 78th %ile | 200% | | TSR Relative to Peers | 50% | 25th %ile | 50th %ile | 75th %ile | 87th %ile | 200% | | Award Level (% of target) | | 40% | 100% | 200% | | |
2021-2023 LTIP
| FIRST Commonwealth ∎ 2024 Proxy Statement | 33 |
2021-2023 LTIP
Based upon these results, in February 2024 the Committee approved the vesting of the following PRSUs and time-vesting RSUs to the NEOs:
2021-2023 LTIP
| Executive | Performance- Vesting RSUs | Time- Vesting RSUs | Total Shares | | T. Michael Price | 24,300 | 12,150 | 36,450 | | James R. Reske | 13,400 | 6,700 | 20,100 | | Jane Grebenc | 16,900 | 8,450 | 25,350 | | Brian G. Karrip | 12,600 | 6,300 | 18,900 | | Norman J. Montgomery | 11,500 | 5,750 | 17,250 |
Agreements with Executives
Agreements with Executives We provide employment and change of control agreements to certain executive officers (including the NEOs) to promote stability and continuity of executive officers and ensure their interests are aligned with shareholders. Terms of these agreements consider marketplace practices and First Commonwealth’s unique needs and are tailored to the individual executive with a focus on retention and recruitment. The change of control agreements contain a “double trigger,” providing benefits only upon an involuntary termination or constructive termination of the executive officer in connection with a change of control. The agreements do not provide for any tax gross-ups payments upon a change of control event. The Committee considers change of control agreements to be necessary in the current financial services industry legal, regulatory and economic environment. Details on employment agreements and change of control agreements are included under “Potential Payments Upon Termination or Change of Control” on page 45.
Summary Compensation Table
Summary Compensation Table The table below shows compensation of our named executive officers.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | T. Michael Price President and Chief Executive Officer | 2023 | 586,000 | 56,857 | 402,615 | 315,643 | 26,040 | 1,387,155 | | | 2022 | 511,333 | 12,500 | 305,712 | 496,650 | 24,475 | 1,350,670 | | | 2021 | 488,000 | 0 | 324,429 | 402,600 | 36,170 | 1,251,199 | | James R. Reske Executive Vice President and Chief Financial Officer | 2023 | 445,833 | 37,451 | 204,225 | 177,549 | 59,385 | 924,443 | | | 2022 | 423,167 | 12,500 | 194,544 | 297,500 | 57,946 | 985,657 | | | 2021 | 414,000 | 0 | 178,903 | 248,400 | 55,401 | 896,704 | | Jane Grebenc Executive Vice President and Chief Revenue Officer | 2023 | 490,667 | 39,835 | 229,024 | 194,515 | 26,040 | 980,081 | | | 2022 | 477,000 | 12,500 | 218,862 | 377,213 | 24,475 | 1,110,050 | | | 2021 | 467,000 | 0 | 225,632 | 280,200 | 23,525 | 996,357 | | Brian G. Karrip Executive Vice President and Chief Credit Officer | 2023 | 410,000 | 17,621 | 191,096 | 159,679 | 24,295 | 802,691 | | | 2022 | 398,333 | 12,500 | 184,122 | 280,000 | 22,190 | 897,145 | | | 2021 | 390,000 | 0 | 168,223 | 234,000 | 19,296 | 811,519 | | Norman J. Montgomery | 2023 | 392,000 | 31,968 | 180,885 | 138,532 | 13,400 | 756,785 | | Executive Vice President, Business Integration Group Manager | 2022 | 373,333 | 12,500 | 166,752 | 263,900 | 12,200 | 828,685 | | | 2021 | 355,000 | 0 | 153,537 | 213,000 | 11,600 | 733,137 |
Summary Compensation Table
| (1) Annual salary includes compensation deferred at the election of the named executive officer pursuant to First Commonwealth’s 401(k) plan and non-qualified deferred compensation plan. |
Summary Compensation Table
| (2) Bonus for 2023 represents a discretionary contribution to each NEO’s non-qualified deferred compensation plan in the amount of $12,500 and a discretionary bonus representing the difference between the amount earned and the target performance award under the 2023 AIP. Refer to the Compensation Discussion & Analysis – Executive Compensation Decisions in 2023 for additional details. |
Summary Compensation Table
| (3) Stock awards for 2023 consist of time-based and performance-based restricted stock unit awards (“RSUs”) granted under the Company’s 2023-2025 long-term incentive plan (“LTIP”). The performance-based RSUs vest only if the Company achieves certain performance goals. The vesting of time-based and performance based RSUs is further contingent upon the officer remaining employed with the Company until the end of the performance period (i.e., December 31, 2025). |
Summary Compensation Table
| All stock awards are reflected at their grant date fair value, as determined pursuant to Accounting Standards Codification Topic 718, Stock Compensation (“ASC 718”). Assumptions used in the calculation of this amount are included in Note 20 to the Company’s audited financial statements for the fiscal year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K. The amounts reflected for performance-based RSUs assume that we will achieve the required performance goals at target levels and that the officer will continue to be employed by us through vesting. |
Summary Compensation Table
| The following table provides the grant date fair value of performance-based RSUs granted during 2023 assuming target and superior performance: |
Summary Compensation Table
| Name | At Target ($) | At Superior ($) | | T. Michael Price | 208,587 | 417,174 | | James R. Reske | 105,805 | 211,610 | | Jane Grebenc | 118,653 | 237,306 | | Brian G. Karrip | 99,003 | 198,007 | | Norman J. Montgomery | 93,713 | 187,426 |
Summary Compensation Table
| (4) Represents the calculated awards earned by the named executive officers based on the corporate and individual performance goals established under our 2023 Annual Incentive Plan. |
Summary Compensation Table
| FIRST Commonwealth ∎ 2024 Proxy Statement | 37 |
Summary Compensation Table
| (5) The amounts shown under the heading “All Other Compensation” for 2023 include, with respect to each named executive officer, (i) matching contributions made by First Commonwealth under First Commonwealth’s 401(k) plan, (ii) professional advisory fees for financial planning and tax preparation services; and (iii) membership dues paid to country clubs: |
Summary Compensation Table
| Name | Matching 401(k) Contributions ($) | Professional Advisory Fees ($) | Country Club Dues ($) | | T. Michael Price | 13,400 | 12,640 | 0 | | James R. Reske | 13,400 | 14,365 | 10,958 | | Jane Grebenc | 13,400 | 12,640 | 0 | | Brian G. Karrip | 13,400 | 0 | 10,895 | | Norman J. Montgomery | 13,400 | 0 | 0 |
Summary Compensation Table
| The amount of “All Other Compensation” shown for Mr. Reske includes $14,480 for the reimbursement of living expenses and $6,182 for the payment of taxes in respect of such reimbursement. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table shows information on plan-based awards to the named executive officers during 2023:
Grants of Plan-Based Awards
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards (#)(3) | Grant Date Fair Value of Stock Awards ($)(4) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | T. Michael Price | 1/30/2023 | — | — | — | 5,520 | 13,800 | 27,600 | 13,800 | 402,615 | | | 2/20/2023 | 180,000 | 360,000 | 630,000 | — | — | — | — | — | | James R. Reske | 1/30/2023 | — | — | — | 2,800 | 7,000 | 14,000 | 7,000 | 204,225 | | | 2/20/2023 | 101,250 | 202,500 | 354,375 | — | — | — | — | — | | Jane Grebenc | 1/30/2023 | — | — | — | 3,140 | 7,850 | 15,700 | 7,850 | 229,024 | | | 2/20/2023 | 110,925 | 221,850 | 388,237 | — | — | — | — | — | | Brian G. Karrip | 1/30/2023 | — | — | — | 2,620 | 6,550 | 13,100 | 6,550 | 191,096 | | | 2/20/2023 | 82,400 | 164,800 | 288,400 | — | — | — | — | — | | Norman J. Montgomery | 1/30/2023 | — | — | — | 2,480 | 6,200 | 12,400 | 6,200 | 180,885 | | | 2/20/2023 | 79,000 | 158,000 | 276,500 | — | — | — | — | — |
Grants of Plan-Based Awards
| (1) Amounts reflected under the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” column of the table above represent the cash award opportunities for named executive officers under our 2023 AIP based upon the “threshold,” “target” and “maximum” (referred to as “superior” in the AIP) levels of performance for all relevant performance goals. The amount actually earned by each named executive officer under the 2023 AIP is included in the Summary Compensation Table under the column “Non-Equity Incentive Plan Compensation.” |
Grants of Plan-Based Awards
| (2) The amounts reflected under the “Estimated Future Payouts Under Equity Incentive Plan Awards” column of the table above represent the number of performance restricted stock units that may be issued to our named executive officers under the 2023-2025 LTIP based upon the “threshold,” “target” and “maximum” (referred to as “superior” in the LTIP) levels of performance for the relevant performance goals. |
Grants of Plan-Based Awards
| (3) The amounts reflected in the “All Other Stock Awards” column of the table represent the number of time-vesting restricted stock units that were granted to each of our named executive officers under the 2023-2025 LTIP. |
Grants of Plan-Based Awards
| (4) The amounts shown under “Grant Date Fair Value of Stock Awards” are calculated in accordance with ASC Topic 718 assuming, in the case of performance-based RSUs, that applicable performance goals are achieved at the target level. |
Grants of Plan-Based Awards
| 38 | FIRST Commonwealth ∎ 2024 Proxy Statement |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table presents the number and market value of unvested stock awards held by the named executive officers as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year-End
| | Grant Date | Stock Awards | | | | | Name | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | T. Michael Price | 1/30/2023 | 13,800 | 213,072 | 13,800 | 213,072 | | | 1/28/2022 | 8,800 | 135,872 | 8,800 | 135,872 | | | 2/18/2021 | 12,150 | 187,596 | 12,150 | 187,596 | | James R. Reske | 1/30/2023 | 7,000 | 108,080 | 7,000 | 108,080 | | | 1/28/2022 | 5,600 | 86,464 | 5,600 | 86,464 | | | 2/18/2021 | 6,700 | 103,448 | 6,700 | 103,448 | | Jane Grebenc | 1/30/2023 | 7,850 | 121,204 | 7,850 | 121,204 | | | 1/28/2022 | 6,300 | 97,272 | 6,300 | 97,272 | | | 2/18/2021 | 8,450 | 130,468 | 8,450 | 130,468 | | Brian G. Karrip | 1/30/2023 | 6,550 | 101,132 | 6,550 | 101,132 | | | 1/28/2022 | 5,300 | 81,832 | 5,300 | 81,832 | | | 2/18/2021 | 6,300 | 97,272 | 6,300 | 97,272 | | Norman J. Montgomery | 1/30/2023 | 6,200 | 95,728 | 6,200 | 95,728 | | | 1/28/2022 | 4,800 | 74,112 | 4,800 | 74,112 | | | 2/18/2021 | 5,750 | 88,780 | 5,750 | 88,780 |
Outstanding Equity Awards at Fiscal Year-End
| (1) Shares reflected in this column include time-vesting RSUs granted to each named executive officer under our 2021-2023 LTIP, 2022-2024 LTIP, and 2023-2025 LTIP. |
Outstanding Equity Awards at Fiscal Year-End
| (2) Market values are calculated using the closing market price of First Commonwealth’s stock on the NYSE on the last trading day of 2023 ($15.44 per share). |
Outstanding Equity Awards at Fiscal Year-End
| (3) Shares reflected in this column represent the number of shares that would be issued to each named executive officer under our 2021-2023 LTIP, 2022-2024 LTIP, and 2023-2025 LTIP, assuming that the target level of performance is achieved for each plan. |
Outstanding Equity Awards at Fiscal Year-End
| FIRST Commonwealth ∎ 2024 Proxy Statement | 39 |
Option Exercises and Stock Vested
Option Exercises and Stock Vested We had no outstanding stock options during 2023. The following table presents information concerning shares of restricted stock held by named executive officers that vested during 2023:
Option Exercises and Stock Vested
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | T. Michael Price(2) | 24,852 | 408,318 | | James R. Reske(2) | 13,680 | 224,762 | | Jane Grebenc(2) | 17,328 | 284,699 | | Brian G. Karrip(2) | 12,882 | 211,651 | | Norman J. Montgomery(2) | 10,260 | 168,572 |
Option Exercises and Stock Vested
| (1) Calculated by multiplying the number of shares acquired on vesting by market value of the shares on the vesting date using the closing market price of First Commonwealth’s stock on the NYSE on the vesting date. |
Option Exercises and Stock Vested
| (2) Consists of shares issued for RSUs awarded under the 2020-2022 LTIP which vested on February 20, 2023. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation We maintain a non-qualified deferred compensation plan in which each named executive officer may contribute up to 25% of his or her base salary and up to 100% of his or her annual incentive payment. Amounts held in the plan may be invested at the discretion of the executive in First Commonwealth stock and eligible mutual funds. Plan assets are distributed in a lump sum or annual installments following the later of the termination of the officer’s employment or the attainment of age 62. Amounts held in the plan are not subject to vesting or forfeiture. The following table presents executive and employer contributions, aggregate earnings, withdrawals and distributions and year-end balance for each of the named executive officers for 2023:
Nonqualified Deferred Compensation
| Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(1) | Aggregate Earnings in Last FY ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | | T. Michael Price | 152,865 | 20,940 | 51,423 | 0 | 1,207,450 | | James R. Reske | 0 | 17,300 | 49,110 | 0 | 561,769 | | Jane Grebenc | 0 | 19,460 | 2,581 | 0 | 38,519 | | Brian G. Karrip | 60,000 | 16,300 | 11,521 | 0 | 178,155 | | Norman J. Montgomery | 52,780 | 15,380 | 56,917 | 0 | 604,339 |
Nonqualified Deferred Compensation
| (1) Amounts contributed to the non-qualified deferred compensation plan are invested at the discretion of the participant in First Commonwealth stock and third party investment vehicles, such as mutual funds and money-market accounts. These amounts are included in the Salary column of the Summary Compensation Table. |
Nonqualified Deferred Compensation
| (2) Earnings reflect the market return on plan investments and include interest, dividends, appreciation (or depreciation), and plan fees in the net asset value of investments held in each named executive officer’s Non-Qualified Deferred Compensation Plan account. |
Nonqualified Deferred Compensation
| 40 | FIRST Commonwealth ∎ 2024 Proxy Statement |
Pay Versus Performance
Pay Versus Performance In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below.
Pay Versus Performance
| Year | Summary Compensation Table Total for T. Michael Price¹ ($) | Compensation Actually Paid to T. Michael Price 1,2,3 ($) | Average Summary Compensation Table Total for Non-PEO NEOs¹ ($) | Average Compensation Actually Paid to Non-PEO NEO 1,2,3 ($) | Value of Initial Fixed $100 Investment based on: 4 | | Net Income ($ Thousands) | Core ROTCE 5 | | | | | | | TSR ($) | Peer Group TSR ($) | | | | 2023 | 1,387,155 | 1,692,137 | 866,000 | 1,036,214 | 123.66 | 107.32 | 157,063 | 20.86% | | 2022 | 1,355,337 | 1,406,268 | 957,245 | 960,390 | 107.81 | 98.38 | 128,181 | 17.49% | | 2021 | 1,251,199 | 1,599,524 | 859,429 | 1,045,870 | 120.20 | 118.61 | 138,257 | 17.98% | | 2020 | 1,004,817 | 713,566 | 704,673 | 538,904 | 79.11 | 87.24 | 73,447 | 10.78% |
Pay Versus Performance
| 1. | T. Michael Price was our PEO for the disclosed period. Individuals comprising the Non-PEO NEOs for each year presented are listed below. |
Pay Versus Performance
| 2020 | 2021 | 2022 | 2023 | | James R. Reske | James R. Reske | James R. Reske | James R. Reske | | Jane Grebenc | Jane Grebenc | Jane Grebenc | Jane Grebenc | | Brian G. Karrip | Brian G. Karrip | Brian G. Karrip | Brian G. Karrip | | Matthew C. Tomb | Norman J. Montgomery | Norman J. Montgomery | Norman J. Montgomery |
Pay Versus Performance
| 2. | The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. |
Pay Versus Performance
| 3. | Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the Summary Compensation Table. |
Pay Versus Performance
| Year | Summary Compensation Table Total for T. Michael Price ($) | Exclusion of Stock Awards and Option Awards for T. Michael Price ($) | Inclusion of Equity Values for T. Michael Price ($) | Compensation Actually Paid to T. Michael Price ($) | | 2023 | 1,387,155 | (402,615) | 707,597 | 1,692,137 |
Pay Versus Performance
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | 866,000 | (201,308) | 371,522 | 1,036,214 |
Pay Versus Performance
| F IRST Commonwealth ∎ 2024 Proxy Statement | 41 |
Pay Versus Performance
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
Pay Versus Performance
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for T. Michael Price ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for T. Michael Price ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for T. Michael Price ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for T. Michael Price ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for T. Michael Price ($) | Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for T. Michael Price ($) | Total Inclusion of Equity Values for T. Michael Price ($) | | 2023 | 472,437 | 171,052 | 0 | 64,108 | 0 | 0 | 707,597 |
Pay Versus Performance
| Year | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2023 | 236,218 | 100,383 | 0 | 34,921 | 0 | 0 | 371,522 |
Pay Versus Performance
| 4. | The Peer Group TSR set forth in this table utilizes the S&P BMI U.S. Banks Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2023. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the S&P BMI U.S. Banks Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
Pay Versus Performance
| 5. | We determined Core ROTCE to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEOs and Non-PEO NEOs in 2023. This performance measure may not have been the most important financial performance measure for prior years and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control First Commonwealth has entered into agreements with certain executive officers and key employees, including each named executive officer, which provide for the payment of severance and benefits in the event of a qualifying termination of employment following a change of control. In addition, Mr. Price, Mr. Reske, Ms. Grebenc and Mr. Karrip are parties to employment agreements that entitle these officers to receive severance payments and benefits if their employment is terminated under certain circumstances. These agreements are summarized below. Except as provided in these agreements, First Commonwealth has not agreed to pay severance or provide benefits to any of the named executive officers following the termination of his or her employment.
Change of Control Agreements
| • | the aggregate amount of any contributions by First Commonwealth to the executive’s Non-Qualified Deferred Compensation Plan account during the twelve-months prior to the change of control. |
Description of the 2024 Stock Plan
| Total Potential Dilution (or overhang) = | (shares to be issued on exercise or conversion of outstanding equity awards under a plan) + (shares proposed to be authorized under the new plan) Total number of issued and outstanding shares |