DEF 14A of Northwest Bancshares, Inc.
Filed Mar 7, 2025 · FY20240001193125-25-049104
PROPOSAL 1 — ELECTION OF DIRECTORS
PROPOSAL 1 — ELECTION OF DIRECTORS Our Board of Directors is expected to consist of 11 members, effective immediately following the Annual Meeting. Our Bylaws provide that directors are divided into three classes, as nearly equal in number as reasonably possible, such that approximately one-third of the directors are to be elected annually. Our directors are generally elected to serve for a three-year period, or a shorter period if the director is elected to fill a vacancy, and until their respective successors shall have been elected and qualified. Four directors will be elected at the Annual Meeting and will serve until their successors have been elected and qualified. The Board of Directors, based on the recommendation of the Nominating and Corporate Governance Committee has nominated Robert M. Campana, Timothy B. Fannin, John P. Meegan and Mark A. Paup to serve as directors for three-year terms. Each individual is currently a member of the Board of Directors. The table below sets forth certain information regarding our nominees and the composition of our Board of Directors as of December 31, 2024 (with age information as of December 31, 2024), including those Board members continuing in office following December 31, 2024 and the terms of office of Board members. It is intended that the proxies solicited on behalf of the Board of Directors (other than proxies in which the vote is withheld as to a nominee) will be voted at the Annual Meeting for the election of the nominees identified below. If one or more nominees is unable to serve, the shares represented by all such proxies will be voted for the election of such substitute or substitutes as the Board of Directors may nominate, based on the recommendation of the Nominating and Corporate Governance Committee. At this time, the Board of Directors knows of no reason why the nominees might be unable to serve, if elected. Except as indicated herein, there are no arrangements or understandings between the nominees and any other person pursuant to which such nominees were selected. The Board of Directors unanimously recommends that you vote “FOR” each of the persons nominated by the Board of Directors.
PROPOSAL 1 — ELECTION OF DIRECTORS
| Name | Age | Positions held in Northwest Bancshares, Inc. | Director since | Current term to expire | | NOMINEES | | | | | | Robert M. Campana | 65 | Director | 2015 | 2025 | | Timothy B. Fannin | 71 | Chairman of the Board | 2013 | 2025 | | John P. Meegan | 65 | Director | 2010 | 2025 | | Mark A. Paup | 59 | Director | 2016 | 2025 | | DIRECTORS CONTINUING IN OFFICE | | | | | | Pablo A. Vegas | 51 | Director | 2022 | 2026 | | Amber L. Williams | 50 | Director | 2023 | 2026 | | Louis J. Torchio | 62 | President, Chief Executive Officer and Director | 2022 | 2026 | | Deborah J. Chadsey | 67 | Director | 2012 | 2027 | | Wilbur R. Davis | 70 | Director | 2020 | 2027 | | Timothy M. Hunter | 62 | Vice Chairman of the Board | 2015 | 2027 | | David M. Tullio | 59 | Director | 2020 | 2027 |
Compensation Discussion and Analysis
On June 18, 2024, the Company announced the departure of John J. Golding, former Chief Consumer Banking Officer, effective June 17, 2024. Executive Summary. The Company is a bank holding company headquartered in Columbus, Ohio. The Company operates Northwest Bank (also referred to herein as the “Bank”), a full-service financial institution headquartered in Warren, Pennsylvania. Through this subsidiary, the Company, as of December 31, 2024, operates 130 full-service financial centers, eleven free standing drive-up facilities, and 169 automated teller machines in Pennsylvania, New York, Ohio and Indiana. The Company has operated as a community-oriented financial institution since 1896 and has demonstrated a pattern of sustained expansion resulting from strong internal growth combined with a series of mergers, acquisitions, and new office openings. 2024 Business Highlights. Throughout 2024, despite industry-wide challenges, we continued to make strategic decisions to better position Northwest for growth and continued success. This included a securities portfolio repositioning successfully completed in 2Q, a continued focus on growing our Commercial lending portfolio, and investments in colleagues and technology to create the infrastructure needed to support future growth. Commercial loans grew to $2 billion at December 31, 2024, an increase of $350 million from prior year end. Amidst industry funding and liquidity challenges, we successfully navigated the landscape, culminating in a 1.4% increase in total deposits, reaching $12.14 billion by the end of 2024. This achievement not only underscores our ability to maintain a stable and diversified deposit base but also reflects our capacity to adapt and grow during challenging market conditions. We continue to lead our peers with one of the lowest cost of funds while maintaining one of the lowest uninsured deposit bases in the nation at less than 25% of total deposits (12% when excluding intercompany and collateralized deposits) with an overall average deposit balance of $18,000 per account. Reported net income for the year declined by $34.6 million to $100.3 million, or $0.79 per diluted share, adjusted net income (excluding securities repositioning loss and merger/restructuring expenses) decline by $7 million to $132.8 million, or $1.04 per diluted share. Furthermore, we delivered above budgeted returns on average shareholders’ equity and assets, with annualized adjusted returns for 2024 at 8.49% and 0.92%, respectively, showcasing our commitment to delivering value to our shareholders. Additionally, our net interest income was flat vs prior year, which reflects our ability to effectively manage the interest rate environment and optimize our balance sheet. Despite the macroeconomic challenges, our asset quality remains stable with overall delinquency at approximately 0.9% and 90-day delinquency at just 0.2%. In addition, our capital levels remain strong with Tangible Common Equity to Tangible Assets Ratio increasing to 8.65% and all regulatory capital ratios comfortably above “Well Capitalized” levels providing flexibility for future growth and capital management strategies. 2024 Compensation Highlights. Our executive compensation program has three primary elements: base salary, annual incentives, and long-term equity incentives. Each of these compensation elements serves a specific purpose in our compensation strategy. Base salary is an essential component to any market-competitive compensation program. Annual incentives reward the achievement of short-term goals, while long-term incentives drive our NEOs to focus on long-term sustainable shareholder value creation. Based on our performance and consistent with the design of our program, the Compensation Committee made the following executive compensation decisions for fiscal 2024:
Compensation Discussion and Analysis
| • | Annual Incentives. Based on our results relative to the financial performance objectives under the Management Bonus Plan, initial funding results were 92.47% of target. However, based on its assessment of actual overall performance, the Compensation Committee approved funding of the Management Bonus Plan at 100% of target, and further adjusted each NEO’s actual award payout based on individual performance. |
Compensation Discussion and Analysis
| • | Long-Term Equity Incentives. For 2024, long-term equity incentive awards were granted to the NEOs using an equally weighted mix of performance stock units (“PSUs”) and restricted stock units (“RSUs”). However, to place a heavier emphasis on performance, the Compensation Committee granted Mr. Torchio’s award using a mix of 55% of PSUs and 45% RSUs. The PSUs granted in 2022 did not vest as the required threshold performance criteria (rROAA) were not met. |
Compensation Discussion and Analysis
| • | One-Time RSU Grant to Mr. Torchio. As previously disclosed on our Form 8-K filed in November 2024, on December 20, 2024, the Compensation Committee approved a one-time grant of RSUs to Mr. Torchio. Since assuming the role of CEO in August 2022, Mr. Torchio has played a pivotal role in transforming our business and operations, positioning the Company for long-term success. Under his leadership, the Company has made significant progress, and the Compensation Committee believes Mr. Torchio’s continued service is critical to sustaining this momentum. To reinforce stability and ensure continuity in leadership, the Compensation Committee approved a one-time RSU grant valued at $2,000,000, which will cliff vest after four years of continued employment. The RSUs will be settled in two installments — the first installment on the vesting date, and the second installment will be deferred on a mandatory basis until six months following the date Mr. Torchio leaves the Company. |
Compensation Discussion and Analysis
| • | One-Time New Hire Equity Grant to Mr. Schosser. As previously disclosed on our Form 8-K filed in March 2024, Mr. Schosser joined the Company on March 18, 2024, as Chief Financial Officer. In connection with his appointment, Mr. Schosser received a new-hire equity grant on March 20, 2024, consisting of RSUs valued at $250,008 and PSUs valued at $350,011. |
Compensation Discussion and Analysis
| What we do | | What we don’t do | | | ✔ | Place an emphasis on performance-based, variable compensation | ✗ | We do not allow repricing of underwater stock options without shareholder approval | | ✔ | Maintain robust stock ownership guidelines | ✗ | We do not have excessive perquisites | | ✔ | Annual say-on-pay vote | ✗ | We do not allow hedging or short sales or pledging of our securities | | ✔ | Double-trigger vesting for equity awards in the event of a change in control under our long-term incentive plan | ✗ | We do not pay dividends or dividend equivalents on unearned performance-based awards | | ✔ | Maintain a recoupment (“clawback”) policy | ✗ | We do not have tax gross ups | | ✔ | Use an independent compensation consultant | ✗ | We do not allow short selling or the use of Company stock as collateral for loans | | ✔ | Limit the value of equity awards that may be granted to non-employee directors | | |
Executive Compensation Decision-Making Process
| • | assist in developing goals for the short- and long-term incentive plans; |
Executive Compensation Decision-Making Process
Pearl Meyer reports directly to the Compensation Committee and does not provide any other services to the Company. The Compensation Committee analyzed whether the work of Pearl Meyer raised any conflicts of interest, taking into consideration the following factors, among others: (i) the provision of other services to the Company by Pearl Meyer; (ii) the amount of fees the Company paid to Pearl Meyer as a percentage of Pearl Meyer’s total revenues; (iii) Pearl Meyer’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Pearl Meyer or the individual compensation advisors employed by Pearl Meyer with any executive officer of the Company; (v) any business or personal relationship of the individual compensation advisors with any member of the Compensation Committee; and (vi) any stock of the Company owned by Pearl Meyer or the individual compensation advisors employed by Pearl Meyer. The Compensation Committee determined, based on its analysis of the above factors, among others, that the work of Pearl Meyer and the individual compensation advisors employed by Pearl Meyer as compensation consultants to the Company have not created any conflicts of interest. The Role of Peer Group Companies. The Compensation Committee strives to set a competitive level of total compensation for each NEO as compared with executive officers in similar positions at peer companies. In evaluating NEO compensation, we utilize market information which is supported by benchmark data from our peer group, as well as Pearl Meyer and McLagan, an Aon Hewitt company (“McLagan”), both nationally recognized compensation consulting firms. We establish compensation targets for substantially all of our employees so that their total cash compensation opportunity would be approximately between 15% below to 15% above the market median for fully qualified and experienced employees. For the year ended December 31, 2024, we utilized financial services survey data from McLagan in reviewing compensation for substantially all employees, including executive officers. McLagan was utilized by the Company based on their comprehensive set of reports within the financial services industry. McLagan provides complete compensation coverage for each job position in the financial services industry by extensive analysis of salaries, incentive eligible positions, incentive amounts with regard to base salaries, and total cash compensation. In addition, analysis by company size and geographic location is performed and categorized by jobs based on levels of responsibility and experience. On an annual basis, with assistance from Pearl Meyer, the Company conducts a benchmarking and peer group exercise with the Compensation Committee. In the fall of 2023, Pearl Meyer presented a review of the Company’s peer group using publicly traded U.S. banks with assets as of September 30, 2023, ranging from approximately 50% to 200% of the Company’s asset size. The Compensation Committee considered the “compatibility” and “comparability” of each company when selecting the 2024 peer group. The Compensation Committee reviewed, among other things, each peer company’s asset size, earnings, portfolio mix, geographical location, organizational structure and governance, number of employees, number of financial centers and service offerings. Following selection and approval by the Compensation Committee of the peer group listed in the table, the Company was positioned near the median of the group in terms of asset size.
2024 Executive Compensation Program in Detail
Mr. Golding received a 6% increase in 2024 at the same time as the others listed in the table above. Annual Incentives. We provide performance-based cash incentive awards to eligible personnel, including executive officers, under the Management Bonus Plan. Cash incentives are used to motivate and reward achievement of corporate and individual performance objectives which are strategically aligned with enhancing shareholder value. Funding for the Management Bonus Plan is based on an assessment of the Company’s actual performance relative to the Compensation Committee’s pre-established financial performance levels based on a combination of financial factors as well as a comparison against a predetermined peer group. Actual payouts depend on the achievement of pre-determined financial performance objectives and can range from 0% to 150% of target award amounts. Management Bonus Plan Target Opportunity. Target annual bonus opportunities are expressed as a percentage of base salary and were established by the NEOs’ level of responsibility and their ability to impact overall results. The Compensation Committee also considers market data in setting target award amounts. Target award opportunities for 2024 were as follows:
2024 Executive Compensation Program in Detail
| | | Annual target bonus | | | Name | 2024 Base salary | Percent | Dollar | | Louis J. Torchio | $874,470 | 70% | $612,129 | | Douglas M. Schosser | 600,000 | 55% | 330,000 | | William W. Harvey, Jr. | 721,000 | 50% | 360,500 | | Gregory J. Betchkal | 589,860 | 50% | 294,930 | | Jacques M. DesMarteau | 477,405 | 55% | 262,573 | | Scott J. Watson | 405,794 | 40% | 162,318 |
2024 Executive Compensation Program in Detail
Financial Performance Objectives, Levels & Results. For the year ended December 31, 2024, the Management Bonus Plan required that two threshold metrics be satisfied in order for any cash incentive payout to be considered. These threshold metrics included achievement of net charge-offs of 0.50% or less and total loan delinquency of 3.00% or less. Once these threshold metrics were met, the financial factors considered to determine the payout level for the year ended December 31, 2024 were: adjusted return on average assets (“adjusted ROAA”), adjusted return on average equity (“adjusted ROAE”), efficiency ratio, and loan growth. Individual performance ratings also are considered when determining the actual payout amount. After the conclusion of the fiscal year, the CEO may suggest that the Compensation Committee consider discretionary adjustments to cash incentive awards that are consistent with the long-term advancement of our strategic initiatives. The Management Bonus Plan sets levels of corporate performance targets, resulting in cash incentive payments to the NEOs in amounts ranging from 0% to 150% of target depending on actual performance.
2024 Executive Compensation Program in Detail
| | | Performance range | | | | | | | Performance measures | Weighing | Threshold (50% funded) | Target (100% funded) | Maximum (150% funded) | Actual adjusted result (1) | % of target | Weighted % payout | | Adjusted ROAA | 40% | 0.74% | 0.87% | 1.10% | 0.92% | 110.90% | 44.36% | | Adjusted ROAE | 30% | 6.97% | 8.20% | 10.66% | 8.49% | 105.90% | 31.77% | | Efficiency Ratio (2) | 15% | 67.50% | 65.00% | 60.00% | 64.11% | 108.90% | 16.34% | | Loan Growth | 15% | 3.23% | 4.62% | 6.00% | (1.39)% | —% | —% |
2024 Executive Compensation Program in Detail
| • | Three of the four Management Bonus KPIs (adjusted ROAA, adjusted ROAE, and Efficiency Ratio) showed strong progress and achieved above target performance. |
2024 Executive Compensation Program in Detail
| | Target bonus | | Actual bonus | | | Name | Percent | Dollar | Percent | Dollar | | Louis J. Torchio | 70% | $612,100 | 77.0% | $673,300 | | Douglas M. Schosser | 55% | 330,000 | 60.5% | 363,000 | | William W. Harvey, Jr. | 50% | 360,500 | 52.5% | 378,500 | | Gregory J. Betchkal | 50% | 294,900 | 55.0% | 324,400 | | Jacques M. DesMarteau | 55% | 262,600 | 60.5% | 288,800 | | Scott J. Watson | 40% | 162,300 | 40.0% | 162,300 |
2024 Executive Compensation Program in Detail
As a result of Mr. Golding’s termination of employment on June 17, 2024, Mr. Golding was not eligible to receive a bonus for fiscal year 2024. Long-Term Stock-Based Compensation. The purpose of our 2022 Equity Incentive Plan is to promote the long-term financial success of the Company and its subsidiaries, including Northwest Bank, by providing a means to attract, retain and reward individuals who contribute to that success and to further align their interests with those of the Company’s shareholders through the ownership of shares of Company stock. In 2024, the Compensation Committee granted long-term incentive compensation that is balanced between retention and forward-looking performance incentives. To place a heavier emphasis on performance, the Compensation Committee granted Mr. Torchio’s award using a mix of 50% PSUs and 40% RSUs. Awards granted to the other NEOs used a combination of RSUs and PSUs as follows:
2024 Executive Compensation Program in Detail
| Award type | Weighting | Design at-a-glance | | PSUs | 50% | PSUs align executive pay with achievement of financial metrics that are the most impactful to shareholders. Performance is measured against both relative and absolute metrics to provide a comprehensive and balanced evaluation of our long-term business performance. NEOs can earn between 0% and 150% of their target award opportunity. If achievement warrants and the executive remains employed by the Company, PSUs vest at the end of the three-year performance period to the extent performance is achieved. | | RSUs | 50% | RSUs granted to NEOs in fiscal 2024 vest in equal installments each year on the first three anniversaries of the grant date. |
2024 Executive Compensation Program in Detail
| | | Long term incentive target award opportunity | | | Name | Base salary | Percent | Value | | Louis J. Torchio | $849,000 | 90% | $764,100 | | Douglas M. Schosser | 600,000 | 65% | 390,000 | | William W. Harvey, Jr. | 721,000 | —% | — | | Gregory J. Betchkal | 572,680 | 60% | 343,608 | | Jacques M. DesMarteau | 463,500 | 60% | 278,100 | | Scott J. Watson | 393,975 | 35% | 137,891 |
2024 Executive Compensation Program in Detail
Mr. Golding, our former Chief Consumer Banking Officer, also received a grant of RSUs and PSUs consistent with our standard equity grant practices. The target value of Mr. Golding’s long-term incentive awards was $177,289, or 45%, of his then current base salary. All of Mr. Golding’s outstanding awards of RSUs and PSUs were forfeited as of June 17, 2024 upon his termination of employment. Fiscal 2024 Annual Long-Term Incentive Grants. For fiscal 2024, the NEOs received the following awards (excluding any one-time grants or awards):
2024 Executive Compensation Program in Detail
| | PSUs | | RSUs | | | Name | Target # of units | Target value | # of units | Value | | Louis J. Torchio (1) | 37,534 | $424,500 | 30,027 | $339,600 | | Douglas M. Schosser (1) | 17,242 | 195,000 | 17,242 | 195,000 | | William W. Harvey, Jr. | — | — | — | — | | Gregory J. Betchkal | 15,191 | 171,804 | 15,191 | 171,804 | | Jacques M. DesMarteau | 12,295 | 139,050 | 12,295 | 139,050 | | Scott J. Watson | 6,096 | 68,946 | 6,096 | 68,946 |
2024 Executive Compensation Program in Detail
The number of units was calculated using the per-share closing price of the Company’s common stock on the grant date approved by the Board. Executives may earn the performance share unit portion of their awards by achieving certain metrics as established by the Compensation Committee over a three-year performance period. All awards granted under our 2018 Equity Incentive Plan and 2022 Equity Incentive Plan are subject to clawback if the Company is required to prepare an accounting restatement due to material noncompliance of the Company as a result of misconduct, with any financial reporting requirement under federal securities laws. In addition, awards are subject to clawback under the Company’s Clawback Policy designed to comply with SEC and Nasdaq rules regarding the recoupment of erroneously awarded compensation. See “Other Practices, Policies and Guidelines—Clawback Policy”. A Closer Look at PSUs. The Compensation Committee believes that PSUs provide appropriate incentives for management to focus on long-term financial results, and that these performance goals correlate with the value of our common stock. NEOs can earn between 0% and 150% of their target award opportunity. The actual number of PSUs that are earned and vested is based on the achievement of pre-determined financial performance metrics against the KRX index at the end of a three-year performance period, as outlined in the following table:
2024 Executive Compensation Program in Detail
| | Performance range | | | | | Threshold | Target | Maximum | | Peer Group Rank | 25th percentile | 50th percentile | 75th percentile | | PSU Payout (as a % of Target) | 50% | 100% | 150% |
Other Practices, Policies & Guidelines
If the ownership requirement has not been met by the fifth anniversary of the date the NEO became subject to the ownership requirement multiple, then 100% of net shares acquired annually from employee equity awards must be retained until requirements are met. Shares that count towards the ownership requirement include shares owned and vested and unvested RSUs. Non-Qualified Stock Options, whether vested or unvested, and unvested PSUs do not count towards the ownership requirement. All NEOs currently meet the stock ownership requirements. Clawback Policy. The Company has adopted the Northwest Bancshares, Inc. Clawback Policy (the “Clawback Policy”), which adheres to the listing standards of Nasdaq and with Rule 10D-1 under the Exchange Act. This Clawback Policy requires recoupment of certain cash and equity incentive compensation paid to or deferred by certain executives in the event the Company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the federal securities laws. Under the Clawback Policy, recoupment is required if the Board determines that incentive-based compensation received by an executive exceeds the amount of incentive-based compensation that otherwise would have been received, had it been calculated based on the restated amounts. The Clawback Policy is disclosed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Insider Trading Policy. The Company maintains insider trading policies and procedures governing the purchase, sale, and/or other dispositions of the Company’s securities by directors, officers, and employees that the Company believes are reasonably designed to promote compliance with insider trading laws, rules, and regulations, as well as Nasdaq listing standards. In addition, it is the Company’s policy to comply with applicable securities and state laws, including insider trading laws, when engaging in transactions in the Company’s securities. A copy of the Company’s insider trading policy was filed as Exhibit 19 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. No Pledging or Hedging Company Securities. We have adopted a policy that prohibits our insiders from (i) pledging our stock as collateral against a loan or line of credit or holding our stock in a margin account; and (ii) conducting any hedging activities (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) designed to offset any decrease in the market value with respect to our stock. Policies and Practices Related to the Grant of Certain Equity Awards. In accordance with Item 402(x) of Regulation S-K, we are required to disclose certain information related to certain equity awards granted close in time to the release of material non-public information. Neither our Board nor our Compensation Committee takes material non-public information into account when determining the timing of equity awards, nor do we time the disclosure of material non-public information for the purpose of impacting the value of executive compensation. We generally issue equity awards to our executive officers on a limited and infrequent basis, and not in accordance with any fixed schedule. During fiscal 2024, there were no equity awards granted to any NEOs within four business days preceding the filing of any report on Form 10-K, 10-Q, or 8-K that disclosed material nonpublic information. When the Company grants RSUs or PSUs to employees, the Company makes a determination of the target value of the grant. To determine the number of shares subject to a grant of RSUs, the Company divides the target value of the grant by the closing price of one share of the Company’s common stock on the date of grant. To determine the number of shares subject to a grant of PSUs, the Company divides the value of the grant that would be obtained if target performance were to be achieved by the closing price of one share of the Company’s common stock on the date of grant. Retirement Plans. Substantially all of our employees hired prior to August 1, 2020, including our NEOs, are eligible to participate in the Northwest Bank Pension Plan (the “Pension Plan”), a tax-qualified defined benefit plan. See “Defined Benefit Plan.” Effective January 1, 2024, all employees who have attained age 18 are also eligible to make elective deferrals to our 401(k) plan. Under our 401(k) plan, we provide “safe harbor” matching contributions equal to 100% of an eligible employee’s elective deferrals up to 4% of the employee’s eligible compensation. Employees are eligible for the safe harbor matching contributions commencing on the first day of the month following the month in which 90 days of credited service is completed. We have also adopted a non-qualified supplemental executive retirement plan for the benefit of certain individuals whose benefits under the defined benefit plan are limited by restrictions contained in the Internal Revenue Code. Messrs. Torchio and Harvey participate in the supplemental executive retirement plan. See “Supplemental Executive Retirement Plan.” Other Benefits and Perquisites. Executive officers participate in the same employee benefits programs generally available to all employees. Mr. Harvey participated in the Senior Managers’ Life Insurance Plan, which was frozen to new participants prior to January 1, 2000. Under this plan, Mr. Harvey had the option to continue his individual policy into retirement. This plan was designed to allow participants to waive an equal amount of coverage in the group term life insurance plan in order to purchase a whole life insurance plan using their own funds in conjunction with the amount Northwest Bank would have spent for his group term premium expense. The benefit then becomes a split dollar arrangement. The officer’s coverage is provided through two sources: the group term life insurance plan, which has a carve-out provision funded by bank-owned life insurance, and an individual policy owned by the executive. The Senior Managers’ Life Insurance Plan thus gave Mr. Harvey a means to obtain post-retirement life insurance that is not available through the group term life plan. Executive perquisites are kept to a minimal level and therefore do not play a significant role in executive compensation. For the NEOs in fiscal 2024, executive perquisites consisted of social clubs. These benefits and their incremental cost to the Company are described in the fiscal 2024 Summary Compensation Table and its footnotes. The Compensation Committee believes these perquisites to be reasonable, comparable with peer companies and consistent with the Company’s overall compensation practices. Employment Agreements/Change in Control Agreements. We have entered into employment agreements with Messrs. Torchio and Schosser and change in control agreements with Messrs. Betchkal, DesMarteau and Watson. These agreements are designed to give us the ability to retain the services of the designated executives while reducing, to the extent possible, unnecessary disruptions to our operations. The employment agreements with Messrs. Torchio and Schosser provide for a base salary, annual bonus payments and long-term incentive equity grants as well as severance benefits in connection with certain terminations of an executive’s employment. The change in control agreements provide for a base salary, as well as severance benefits in connection with certain terminations of an executive’s employment. The agreements were negotiated directly with, and recommended for approval by, the Compensation Committee. The Compensation Committee believes such agreements necessary to retain executive talent and consistent with market practice.
Other Practices, Policies & Guidelines
On September 20, 2023, as a result of Mr. Harvey’s retirement announcement, the Company and Northwest Bank entered into a Retirement Agreement pursuant to which Mr. Harvey transitioned from his role as Chief Financial Officer concurrently with the appointment of Mr. Schosser as our Chief Financial Officer on March 18, 2024, and retired as Chief Operating Officer and as a director from the Company Northwest Bank on December 31, 2024. In addition, on June 17, 2024, as a result of Mr. Golding’s involuntary termination by us, the Company and Northwest Bank entered into a Confidential Separation Agreement and General Release with Mr. Golding. For a more detailed discussion of these agreements and the payments that would be received by the NEOs under these agreements in connection with certain terminations of employment, see “Employment Agreements/Change in Control Agreements” and “Potential Payments to Named Executive Officers”. Impact of Accounting and Tax. In consultation with our advisors, we evaluate the tax and accounting treatment of each of our compensation programs at the time of adoption and on an annual basis to ensure that we understand the financial impact of the program. Furthermore, Section 162(m) of the Internal Revenue Code generally limits the tax deductibility of annual compensation paid by public companies for certain executive officers to $1 million. The Compensation Committee continues to have the flexibility to award compensation that is not tax deductible if it determines that such award is in the Company’s best interests. Review of Risk Related to Compensation Policies and Procedures. The Compensation Committee is responsible for the oversight of employee compensation policies and procedures, including the determination of whether any material risk is imposed on the Company from the annual cash incentive plan, long-term stock-based compensation plan and/or employment or change in control agreements. After reviewing the compensation policies and procedures, including the determination of whether any incentive/variable compensation programs encourage excessive risk taking by employees, the Compensation Committee has concluded such plans do not pose material risk to the Company. Compensation Committee Report. The Compensation Committee has reviewed and discussed the section titled “Compensation Discussion and Analysis” with management. Based on this review and discussion, the Compensation Committee recommended to the Board that the section titled “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Respectfully submitted by the members of the Compensation Committee of the Board:
Executive Compensation
| Summary compensation table | | | | | | | | | | Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($)(1) | Non-equity incentive plan compensation ($)(2) | Change in pension value and nonqualified deferred compensation earnings ($)(3) | All other compensation ($)(4) | Total ($) | | Louis J. Torchio President, Chief Executive Officer and Director | 2024 | 865,672 | — | 2,195,449 | 673,300 | 95,792 | 27,661 | 3,857,874 | | | 2023 | 816,615 | 258,331 | 511,417 | 206,000 | 107,523 | 32,835 | 1,932,721 | | | 2022 | 529,548 | 26,477 | 151,159 | 436,000 | 13,422 | 34,285 | 1,190,891 | | Douglas M. Schosser Chief Financial Officer | 2024 | 450,000 | — | 822,281 | 363,000 | — | 75,454 | 1,710,735 | | William W. Harvey, Jr. Former Chief Operating Officer, Chief Financial Officer and Director | 2024 | 721,000 | 36,500 | — | 378,500 | 35,381 | 27,464 | 1,198,845 | | | 2023 | 714,538 | 208,727 | 358,001 | 164,400 | 154,127 | 34,876 | 1,634,669 | | | 2022 | 643,526 | 32,176 | 259,565 | 429,940 | — | 39,641 | 1,404,848 | | Gregory J. Betchkal Chief Risk Officer | 2024 | 583,933 | — | 286,502 | 324,400 | — | 17,364 | 1,212,199 | | | 2023 | 438,385 | 136,068 | 550,639 | 120,700 | — | 15,733 | 1,261,525 | | Jacques M. DesMarteau (5) Chief Commercial Banking Officer | 2024 | 472,607 | — | 231,884 | 288,800 | — | 118,122 | 1,111,413 | | Scott J. Watson Chief Information Officer | 2024 | 401,716 | — | 114,971 | 162,300 | 18,977 | 19,666 | 717,630 | | | 2023 | 379,058 | 80,153 | 110,781 | 58,100 | 39,193 | 22,023 | 689,308 | | | 2022 | 367,987 | 14,719 | 110,084 | 122,900 | — | 22,949 | 638,639 | | John J. Golding (6) Former Chief Consumer Banking Officer | 2024 | 226,913 | — | 147,825(7) | — | 14,796 | 1,635,379 | 2,024,913 | | | 2023 | 379,058 | 85,553 | 142,441(7) | 63,500 | 53,949 | 34,003 | 758,504 | | | 2022 | 367,987 | 18,399 | 141,549(7) | 133,700 | — | 41,255 | 702,890 |
Executive Compensation
| Grants of plan-based awards for the year ended December 31, 2024 | | | | | | | | | | | Name | Grant date | Estimated future payouts under non-equity-incentive plan awards (1) | | | Estimated future payouts under equity-incentive plan awards | | | All other stock awards: number of shares of stock or units (#) | Grant date fair value of stock and option awards ($)(2) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Louis J. Torchio | | 153,032 | 612,129 | 918,194 | | | | | | | | 3/20/2024(3) | | | | — | 30,027 | — | 30,027 | 293,964 | | | 3/20/2024(4) | | | | 18,767 | 37,534 | 56,301 | — | 340,433 | | | 12/20/2024(5) | | | | — | 149,813 | — | 149,813 | 1,561,051 | | Douglas M. Schosser | | 82,500 | 330,000 | 495,000 | | | | | | | | 3/20/2024(3) | | | | — | 17,242 | — | 17,242 | 168,799 | | | 3/20/2024(4) | | | | 8,621 | 17,242 | 25,863 | — | 156,385 | | | 3/20/2024(6) | | | | — | 22,105 | — | 22,105 | 216,408 | | | 3/20/2024(6) | | | | 15,474 | 30,947 | 46,421 | — | 280,689 | | William W. Harvey, Jr. | | 90,125 | 360,500 | 540,750 | | | | | | | | 3/20/2024(3) | | | | — | — | — | — | — | | | 3/20/2024(4) | | | | — | — | — | — | — | | Gregory J. Betchkal | | 73,733 | 294,930 | 442,395 | | | | | | | | 3/20/2024(3) | | | | — | 15,191 | — | 15,191 | 148,720 | | | 3/20/2024(4) | | | | 7,596 | 15,191 | 22,787 | — | 137,782 | | Jacques M. DesMarteau | | 65,643 | 262,573 | 393,860 | | | | | | | | 3/20/2024(3) | | | | — | 12,295 | — | 12,295 | 120,368 | | | 3/20/2024(4) | | | | 6,148 | 12,295 | 18,443 | — | 111,516 | | Scott J. Watson | | 40,580 | 162,318 | 243,477 | | | | | | | | 3/20/2024(3) | | | | — | 6,096 | — | 6,096 | 59,680 | | | 3/20/2024(4) | | | | 3,048 | 6,096 | 9,144 | — | 55,291 | | John J. Golding | 3/20/2024(7) | | | | — | 7,838 | — | 7,838 | 76,734 | | | 3/20/2024(7) | | | | 3,919 | 7,838 | 11,757 | — | 71,091 |
Executive Compensation
| Outstanding equity awards at December 31, 2024 | | | | | | | | | | | Name | Option awards | | | | | Stock awards | | | | | | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#)(1) | Market value of shares or units of stock that have not vested ($) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(2) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(2) | | Louis J. Torchio | 6,240 | —(5) | — | 16.59 | 5/14/2028 | 201,969 | 2,663,971 | 68,082 | 898,002 | | | 10,698 | 1,782(6) | — | 17.27 | 5/22/2029 | | | | | | | 11,140 | 4,330(7) | — | 9.71 | 5/20/2030 | | | | | | | 12,376 | 3,094(8) | — | 13.68 | 5/25/2031 | | | | | | Douglas M. Schosser | — | — | — | — | — | 39,347 | 518,987 | 48,189 | 635,613 | | William W. Harvey, Jr. | 13,923 | 1,547(3) | — | 14.15 | 5/18/2026 | 22,217 | 293,042 | 25,423 | 335,329 | | | 12,376 | 3,094(4) | — | 15.57 | 5/17/2027 | | | | | | | 15,470 | —(5) | — | 16.59 | 5/14/2028 | | | | | | | 13,261 | 2,209(6) | — | 17.27 | 5/22/2029 | | | | | | | — | 4,330(7) | — | 9.71 | 5/20/2030 | | | | | | | — | 3,094(8) | — | 13.68 | 5/25/2031 | | | | | | Gregory J. Betchkal | — | — | — | — | — | 38,535 | 508,277 | 28,223 | 372,261 | | | — | — | — | — | — | | | | | | Jacques M. DesMarteau | — | — | — | — | — | 26,884 | 354,600 | 12,295 | 162,171 | | | — | — | — | — | — | | | | | | Scott J. Watson | 5,349 | 891(6) | — | 17.27 | 5/22/2029 | 14,380 | 189,672 | 16,351 | 215,670 | | | 8,986 | 3,494(7) | — | 9.71 | 5/20/2030 | | | | | | | 9,984 | 2,496(8) | — | 13.68 | 5/25/2031 | | | | | | John J. Golding | 3,688 | —(9) | — | 15.57 | 6/21/2025 | — | — | — | — | | | 12,480 | —(9) | — | 16.59 | 6/21/2025 | | | | | | | 10,698 | —(9) | — | 17.27 | 6/21/2025 | | | | | | | 11,140 | —(9) | — | 9.71 | 6/21/2025 | | | | | | | 12,376 | —(9) | — | 13.68 | 6/21/2025 | | | | |
Executive Compensation
| Option exercises and stock vested for the year ended December 31, 2024 | | | | | | | Option awards | | Stock awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting ($) | | Louis J. Torchio | — | — | 14,034 | 156,587 | | Douglas M. Schosser | — | — | — | — | | William W. Harvey, Jr. | 13,614 | 28,011 | 16,991 | 194,280 | | Gregory J. Betchkal | — | — | 12,000 | 137,577 | | Jacques M. DesMarteau | — | — | 7,516 | 81,924 | | Scott J. Watson | — | — | 5,843 | 65,464 | | John J. Golding | — | — | 8,770 | 98,346 |
Executive Compensation
| Pension benefits at and for the year ended December 31, 2024 | | | | | | Name | Plan name | Number of years credited service (#) | Present value of accumulated benefit ($) | Payments during last fiscal year ($) | | Louis J. Torchio | Northwest Bank Pension Plan | 7 | 233,126 | — | | | Northwest Savings Bank Non-Qualified Supplemental Retirement Plan | 7 | 156,349 | — | | Douglas M. Schosser (1) | Northwest Bank Pension Plan | — | — | — | | William W. Harvey, Jr. | Northwest Bank Pension Plan | 29 | 1,008,672 | — | | | Northwest Savings Bank Non-Qualified Supplemental Retirement Plan | 29 | 204,291 | — | | Gregory J. Betchkal (1) | Northwest Bank Pension Plan | 1 | — | — | | Jacques M. DesMarteau (1) | Northwest Bank Pension Plan | 1 | — | — | | Scott J. Watson | Northwest Bank Pension Plan | 6 | 157,507 | — | | John J. Golding | Northwest Bank Pension Plan | 8 | 220,006 | — | | | Northwest Savings Bank Non-Qualified Supplemental Retirement Plan | 8 | 23,375 | — |
Pay Versus Performance
Pay Versus Performance In accordance with SEC rules, we provide the following disclosure regarding executive “compensation actually paid” (“CAP”) and certain performance for the fiscal years listed below. You should refer to our CD&A for a complete description of how executive compensation relates to the Company’s performance and how the Compensation Committee makes its decisions on executive compensation matters.
Pay Versus Performance
| | Principal Executive Officer (“PEO”)(1) | | | | Non-PEO NEOs (2) | | Value of initial fixed $100 investment based on: | | Company metrics | | | | Summary compensation on table total (3) | | Compensation actually paid (4) | | Average summary compensation on table total ($) | Average compensation actually paid ($) | Total shareholder return ($)(6) | Peer group total shareholder return ($)(7) | Net income (in thousands) ($)(8) | Return on average assets (ROAA”)(9) | | Year | 1st PEO ($) | 2nd PEO ($)(5) | 1st PEO ($) | 2nd PEO ($) | | | | | | | | 2024 | — | 3,857,874 | — | 3,626,065 | 1,190,164 | 1,287,225 | 108.85 | 141.59 | 100,278 | 0.70% | | 2023 | — | 1,932,963 | — | 1,897,705 | 1,094,014 | 1,029,588 | 96.63 | 114.99 | 134,957 | 0.95% | | 2022 | 802,002 | 1,190,891 | 580,603 | 1,255,743 | 862,057 | 933,361 | 101.06 | 107.54 | 133,666 | 0.94% | | 2021 | 1,688,530 | — | 1,758,462 | — | 730,276 | 793,259 | 96.62 | 128.28 | 154,323 | 1.08% | | 2020 | 1,558,296 | — | 1,498,796 | — | 730,029 | 624,237 | 82.01 | 90.81 | 74,854 | 0.58% |
Pay Versus Performance
| (1) Mr. Seiffert served as Chairman, President and CEO prior to his death on May 24, 2022. At this time, Mr. Harvey was appointed interim President and CEO. On August 17, 2022, Mr. Torchio was appointed President and CEO. Given these events, the Company has disclosed Mr. Seiffert’s total compensation and compensation actually paid for the time he served as CEO in 2022, and the full year for 2021 as “1st PEO” and has disclosed Mr. Torchio’s total compensation and compensation actually paid as the “2nd PEO” for 2022 and subsequent years. Mr. Torchio’s compensation prior to his becoming our CEO is included in the non-PEO NEOs disclosure for 2021. Mr. Harvey’s total compensation and compensation actually paid is included in the non-PEO NEO disclosures for all years presented. |
Pay Versus Performance
| (2) Non-PEO NEOs average calculation includes Messrs. Schosser, Harvey, Betchkal, DesMarteau and Watson for 2024; Messrs. Harvey, Betchkal, Golding and Watson for 2023; Messrs. Harvey, Golding, Reitzes and Watson for 2022; and Messrs. Harvey, Torchio, Golding and Reitzes for 2021. |
Pay Versus Performance
| (3) The dollar amounts reported in this column are the amounts of total compensation reported for each PEO for each corresponding year in the “Total” column of the Summary Compensation Table. |
Pay Versus Performance
| (4) The amounts reported in these columns represent the amount of CAP to Mr. Torchio and the other NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid t o Mr. Torchio or to the other NEOs as a group during the applicable year. In accordance with the requirements |
Pay Versus Performance
| of Item 402(v) of Regulation S-K, the following adjustments were made in calculating Mr. Torchio’s total compensation and the average total compensation for the other NEOs as a group for each year to determine the CAP: |
Pay Versus Performance
| | 1st PEO | | | | | 2nd PEO | | | | | Non-PEO NEOs | | | | | | Adjustments from Summary Compensation Table | 2024 | 2023 | 2022 | 2021 | 2020 | 2024 | 2023 | 2022 | 2021 | 2020 | 2024 | 2023 | 2022 | 2021 | 2020 | | Deduction for change in actuarial present values reported under the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column in the Summary Compensation Table | $— | — | — | (137,564) | (145,802) | $(95,792) | (107,523) | (13,422) | — | — | $(10,872) | (61,817) | (5,165) | (37,407) | (112,070) | | Increase for service cost of pension plans | — | — | — | 125,912 | 123,751 | 97,784 | 107,191 | 34,469 | — | — | 18,988 | 35,572 | 34,476 | 49,157 | 50,293 | | Increase/deduction for prior service cost of pension plans | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | | Deduction for amounts reported under the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table | — | — | (460,279) | (196,620) | (112,358) | (2,195,449) | (511,417) | (151,159) | — | — | (291,128) | (290,466) | (163,187) | (109,081) | (63,358) | | Increase based on fair value of awards granted during year that remain unvested as of year-end, determined as of year-end | — | — | — | 165,456 | 142,627 | 1,904,312 | 521,964 | 176,755 | — | — | 360,131 | 292,849 | 187,724 | 92,029 | 80,413 | | Increase/deduction for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | — | — | — | 47,665 | (76,589) | 72,404 | (34,149) | 13,591 | — | — | 28,005 | (29,268) | 13,133 | 30,379 | (58,861) | | Increase based on fair value of awards granted during year that vested during year, determined as of vesting date | — | — | 273,656 | 36,252 | 16,390 | — | — | — | — | — | — | — | — | 19,836 | 9,251 | | Increase/deduction for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during year | — | — | (46,666) | 7,331 | (23,366) | (20,007) | (19,238) | (6,270) | — | — | (10,380) | (18,337) | (7,086) | 4,978 | (22,080) | | Deduction of fair value of awards granted prior to year that were forfeited during year | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | | Increase based on dividends or other earnings paid during year prior to vesting date of award | — | — | 11,890 | 21,500 | 15,847 | 4,939 | 7,914 | 10,888 | — | — | 2,316 | 7,041 | 11,409 | 13,092 | 10,620 | | Total adjustments | $— | — | (221,399) | 69,932 | (59,500) | $(231,809) | (35,258) | 64,852 | — | — | $97,060 | (64,426) | 71,304 | 62,983 | (105,792) |
Pay Versus Performance
Fair values set forth in the t able above are computed in accordance with FASB ASC 718 as of the end of the respective fiscal year, other than fair values of awards that vest in the covered year, which are valued as of the applicable vesting date or fair values of awards that were forfeited in the covered year, which are valued as of the last day of the year immediately preceding the covered year.
Pay Versus Performance
| (5) Mr. Torchio was appointed as the CEO on August 20, 2022. The disclosure for 2022 includes salary of $270,769 for his service as the CEO and $258,779 for his service prior to becoming the CEO. |
Pay Versus Performance
| (6) TSR is cumulative for the measurement periods beginning on December 31, 2019 and ending on December 31, 2024, calculated in accordance with Item 201(e) of Regulation S-K. |
Pay Versus Performance
| (7) Peer group total shareholder return reflects the value of $100 investment in the Nasdaq Bank Index. |
Pay Versus Performance
| (8) The dollar amounts reported represent the amount of net income as required to be reflected in the Company’s audited financial statements for the applicable year. |
Pay Versus Performance
| (9) ROAA (GAAP) is defined as net income divided by average assets. |
Relationship Between Financial Measures and Compensation Actually Paid
Relationship Between Financial Measures and Compensation Actually Paid The following illustrations provide a graphical description of CAP, as calculated in accordance with SEC rules, versus the following measures:
Relationship Between Financial Measures and Compensation Actually Paid
| • | the Company’s cumulative TSR and the Company’s peer group TSR; |
Relationship Between Financial Measures and Compensation Actually Paid
| • | the Company’s net income; and |
Relationship Between Financial Measures and Compensation Actually Paid
| • | the Company selected measure, which is R OAA. |
Defined Benefit Plan
Defined Benefit Plan Northwest Bank maintains the Northwest Bank Pension Plan (the “Pension Plan”), covering substantially all employees who started prior to August 1, 2020 and who satisfy the eligibility requirements of age 21 and the completion of one year of service. The Pension Plan is noncontributory and funded entirely by the employer. Northwest Bank annually contributes an amount necessary to at least satisfy the actuarially determined minimum funding requirements under Section 430 of the Internal Revenue Code and the corresponding requirements under the Employee Retirement and Income Security Act of 1974, as amended (“ERISA”). For the plan year ended December 31, 2024, there was no required contribution and therefore, the Bank elected to not contribute as management determined that the Pension Plan was in a well-funded position. The benefits under the Pension Plan are payable after the participant has attained both normal retirement date (which is age 65) and completed five years of service. Benefits are computed using the plan formula, eligible base pay and years of credited service. Upon retirement, benefits are payable as a lifetime annuity and the participant has the option to select from several choices of actuarially equivalent benefits. Early retirement is available as early as age 55 with the completion of five years of service or any time after the completion of 25 years of service but the benefit is reduced on an actuarial basis to account for early payment. The Pension Plan formula for employees hired prior to January 1, 2008, and applicable to their service up through March 31, 2013, was 1.6% of five-year average monthly base pay plus 0.6% of average monthly base pay in excess of covered compensation (35 year average of the maximum taxable wage bases) multiplied by credited service up to a maximum of 25 years. The formula also provided an additional benefit equal to 0.6% of five-year average monthly base pay multiplied by credited service between 25 years and 35 years. The benefits computed under this formula were frozen effective March 31, 2013 and a new formula was adopted. Mr. Harvey was employed prior to March 31, 2013 and earned a portion of his pension benefit under this formula. For service commencing January 1, 2013, which includes NEOs, benefits for all participants under the Pension Plan will be equal to 1% of eligible base pay for each calendar year that a participant completes at least 1,000 hours of service. Effective August 1, 2020, the Pension Plan was amended to preclude new participants. Those employees in an eligible position that were hired, rehired, or acquired on or before July 31, 2020, will continue to vest and accrue additional benefits for each year they are credited with 1,000 hours or more of service. Employees, including NEOs, that are hired, rehired, acquired, or transfer to an eligible job classification on or after August 1, 2020, are not eligible to participate in the Pension Plan. The accrued annual pension benefit as of December 31, 2024, for Messrs. Torchio, Harvey and Watson were $20,638, $111,322 and $18,350, respectively. As of December 31, 2024, Messrs. Torchio and Watson qualified for early retirement under the Retirement Plan. If Messrs. Torchio and Watson had retired on December 31, 2024 and began receiving benefit payments immediately upon retirement, their annual pension benefit would have been $17,489 and $11,220, respectively. As of December 31, 2024, Mr. Harvey is no longer an employee and is eligible to make an election regarding the form of distribution of accrued benefit in accordance with the plan terms. Messrs. Schosser, Betchkal and DesMarteau were not eligible to participate in the Pension Plan due to joining the Company subsequent to the Pension Plan’s soft freeze in 2020.
Potential Payments to Named Executive Officers
Potential Payments to Named Executive Officers The following tables show potential payments that would be made to the NEOs upon specified events, assuming such events occurred on December 31, 2024, pursuant to each individual’s employment agreement or change in control agreement, and pursuant to stock benefits that have been granted under our equity incentive plans. In addition to the payments and benefits listed in the following tables, certain of the NEOs may be eligible to receive benefits under our pension plan, supplemental executive retirement plan or post-retirement life insurance benefits, however, these benefits would be provided regardless of the reason for any NEOs termination of employment. See “Defined Benefit Plan” and “Supplemental Executive Retirement Plan”.
Potential Payments to Named Executive Officers
| Louis J. Torchio | | | | | | | Type of benefit | Involuntary termination without just cause or termination for good reason (1) | Voluntary termination (2) | Death (3) | Disability (4) | Retirement (5) | | Severance Pay | $2,623,410 | — | 874,470 | 87,447 | — | | Bonus Payment (6) | 2,019,900 | — | 673,300 | 673,300 | — | | Stock Option Vesting Acceleration (7) | 15,068 | — | 15,068 | 15,068 | — | | RSA Acceleration (7) | 56,915 | — | 59,915 | 56,915 | — | | RSU Acceleration (7) | 2,607,056 | — | 2,607,056 | 2,607,056 | — | | PSU Acceleration (7) | 898,002 | — | 384,860 | 384,860 | — | | Health Care and Other Benefits Continuation | 66,421(8) | — | 25,673 | 66,421 | — |
Potential Payments to Named Executive Officers
| Douglas M. Schosser | | | | | | | Type of benefit | Involuntary termination without just cause or termination for good reason (1) | Voluntary termination (2) | Death (3) | Disability (4) | Retirement (5) | | Severance Pay | $1,800,000 | — | 600,000 | 60,000 | — | | Bonus Payment (6) | 1,089,000 | — | 363,000 | 363,000 | — | | Stock Option Vesting Acceleration (7) | — | — | — | — | — | | RSA Acceleration (7) | — | — | — | — | — | | RSU Acceleration (7) | 518,987 | — | 518,987 | 518,987 | — | | PSU Acceleration (7) | 635,613 | — | 158,903 | 158,903 | — | | Health Care and Other Benefits Continuation | 76,457(8) | — | 60,102 | 76,457 | — | | William W. Harvey, Jr. | | | | | | | Type of benefit | Involuntary termination without just cause or termination for good reason (1) | Voluntary termination (2) | Death (3) | Disability (4) | Retirement (5) | | Severance Pay | $2,163,000 | — | 721,000 | 72,100 | — | | Bonus Payment (6) | 1,245,000 | 36,500 | 415,000 | 415,000 | 36,500 | | Stock Option Vesting Acceleration (7) | 15,068 | — | 15,068 | 15,068 | — | | RSA Acceleration (7) | 88,241 | — | 88,241 | 88,241 | — | | RSU Acceleration (7) | 204,801 | — | 204,801 | 204,801 | — | | PSU Acceleration (7) | 335,329 | — | 228,642 | 228,642 | — | | Health Care and Other Benefits Continuation | 76,457(8) | — | 60,102 | — | — |
Potential Payments to Named Executive Officers
| (1) The employment agreements provide for a lump-sum severance payment of three times the highest rate of base salary and three times the highest rate of cash bonus during the prior three years. |
Potential Payments to Named Executive Officers
| (2) No amounts incorporated in this section for anyone other than Mr. Harvey as he was the only Executive to receive a Holiday Bonus in 2024, and qualify for this potential payment. No other payments are provided upon Voluntary termination. |
Potential Payments to Named Executive Officers
| (3) The employment agreements provide for a lump sum death benefit equal to one year of base salary. The employment agreements also provide for the continuation of medical and dental benefits to the executive’s eligible dependents for a period of three years after the executive’s death under the same terms immediately prior to termination. |
Potential Payments to Named Executive Officers
| (4) Messrs. Schosser and Torchio receive base salary for one year following the termination of their employment due to disability and Mr. Harvey would receive base salary for the longer of (i) the remaining term of the employment agreements, or (ii) one year following the termination of their employment due to disability, provided that such base salary amount will be reduced by amounts paid to the NEO under any short-term or long-term disability insurance plan maintained by the Company. Each NEO also receives medical and dental benefits previously provided for a period of up to 36 months under the same terms immediately prior to a termination due to disability. |
Potential Payments to Named Executive Officers
| (5) See retirement definitions detailed in footnotes 6 & 7. None of the NEOs meet the retirement definitions per each plan and therefore no amounts have been included for them other than for Mr. Harvey for his Holiday Bonus payment. |
Potential Payments to Named Executive Officers
| (6) The Management Bonus Plan will be paid to employees that are active at the time of payment or those that have retired after December 31st of the prior year and are age 65 with a minimum of 5 years of Northwest service or Age 55 with a minimum of 25 years of Northwest service, as defined by the Plan. |
Potential Payments to Named Executive Officers
| (7) The 2022 Equity Incentive Plan and 2018 Equity Incentive Plan defines retirement as Age 65 with a minimum of 5 years Northwest service. There are no NEOs that meet the definition at this time, therefore there would be no vesting at retirement or voluntary termination. Equity award agreements for all participants, including NEOs, provide for the acceleration of unvested equity awards in the event of disability, death, and in certain corporate transactions, including a Change in Control as defined under the 2022 Equity Incentive Plan and the 2018 Equity Incentive Plan. The 2022 Equity Incentive Plan and the 2018 Equity Incentive Plan and related forms of equity award agreements have been filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. |
Potential Payments to Named Executive Officers
| (8) The employment agreements provide for medical and dental coverage for 36 months from the date of termination at substantially identical terms to the coverage maintained by the employer for the executive and their eligible dependents prior to termination unless the executive obtains similar benefits from another employer. |
Potential Payments to Named Executive Officers
| Gregory J. Betchkal | | | | | | | Type of benefit | Involuntary termination without just cause or termination for good reason following a change in control (1) | Voluntary termination (2) | Death (3) | Disability (4) | Retirement (5) | | Severance Pay | $1,179,721 | — | 589,860 | 58,986 | — | | Bonus Payment (6) | 648,800 | — | 324,400 | 324,400 | — | | Stock Option Vesting Acceleration (7) | — | — | — | — | — | | RSA Acceleration (7) | — | — | — | — | — | | RSU Acceleration (7) | 508,277 | — | 508,277 | 508,277 | — | | PSU Acceleration (7) | 372,261 | — | 150,363 | 150,363 | — | | Health Care and Other Benefits Continuation | 50,971(8) | — | 60,102 | — | — |
Potential Payments to Named Executive Officers
| Jacques M. DesMarteau | | | | | | | Type of benefit | Involuntary termination without just cause or termination for good reason following a change in control (1) | Voluntary termination (2) | Death (3) | Disability (4) | Retirement (5) | | Severance Pay | $954,810 | — | 477,405 | 47,741 | — | | Bonus Payment (6) | 577,600 | — | 288,800 | 288,800 | — | | Stock Option Vesting Acceleration (7) | — | — | — | — | — | | RSA Acceleration (7) | — | — | — | — | — | | RSU Acceleration (7) | 354,600 | — | 354,600 | 354,600 | — | | PSU Acceleration (7) | 162,171 | — | 40,543 | 40,543 | — | | Health Care and Other Benefits Continuation | 29,532(8) | — | 38,208 | — | — | | Scott J. Watson | | | | | | | Type of benefit | Involuntary termination without just cause or termination for good reason following a change in control (1) | Voluntary termination (2) | Death (3) | Disability (4) | Retirement (5) | | Severance Pay | $1,217,383 | — | 405,794 | 40,579 | — | | Bonus Payment (6) | 486,900 | — | 162,300 | 162,300 | — | | Stock Option Vesting Acceleration (7) | 12,159 | — | 12,159 | 12,159 | — | | RSA Acceleration (7) | 42,551 | — | 42,551 | 42,551 | — | | RSU Acceleration (7) | 147,121 | — | 147,121 | 147,121 | — | | PSU Acceleration (7) | 215,670 | — | 117,977 | 117,977 | — | | Health Care and Other Benefits Continuation | 25,673(8) | — | — | — | — |
Potential Payments to Named Executive Officers
| (1) The change in control agreements for Messrs. Betchkal and DesMarteau provide for the lump-sum payment of two times the highest rate of base salary and two times the highest rate of cash bonus during the prior three years in the event the executive’s employment is terminated by us without “just cause” or by the executive for “good reason” within 24 months following a change in control. The change in control agreements for Mr. Watson provides for the lump-sum payment of three times the highest rate of base salary and three times the highest rate of cash bonus during the prior three years in the event the executive’s employment is terminated by us without “just cause” or by the executive for “good reason” within 24 months following a change in control. |
Potential Payments to Named Executive Officers
| (2) No payments are provided upon Voluntary termination. |
Potential Payments to Named Executive Officers
| (3) The change in control agreements provide for a lump sum death benefit equal to one year of base salary. The change in control agreements also provide for the continuation of medical and dental benefits to the executive’s eligible dependents for a period of three years after the executive’s death under the same terms immediately prior to termination. |
Potential Payments to Named Executive Officers
| (4) All NEOs receive their base salary for the longer of (i) the remaining term of the change in control agreements, or (ii) one year following the termination of their employment due to disability, provided that such base salary amount shall be reduced by any amounts paid to the NEO under any short-term or long-term disability insurance plans we maintain. Each NEO also receives medical and dental benefits previously provided for a period of up to 36 months under the same terms immediately prior to termination due to disability. |
Potential Payments to Named Executive Officers
| (5) See retirement definitions detailed in footnotes 6 & 7. None of the NEOs meet the retirement definitions per each plan and therefore no amounts have been included for them. |
Potential Payments to Named Executive Officers
| (6) The Management Bonus Plan will be paid to employees that are active at the time of payment or those that have retired after December 31st of the prior year and are age 65 with a minimum of 5 years of Northwest service or Age 55 with a minimum of 25 years of Northwest service, as defined by the Plan. |
Potential Payments to Named Executive Officers
| (7) The 2022 Equity Incentive Plan and 2018 Equity Incentive Plan defines retirement as Age 65 with a minimum of 5 years Northwest service. There are no NEOs that meet the definition at this time, therefore there would be no vesting at retirement or voluntary termination. Equity award agreements for all participants, including NEOs, provide for the acceleration of unvested equity awards in the event of disability, death, and in certain corporate transactions including a Change in Control as defined under the 2022 Equity Incentive Plan and 2018 Equity Incentive Plan. The 2022 Equity Incentive Plan and 2018 Equity Incentive Plan and related forms of equity award agreements have been filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. |
Potential Payments to Named Executive Officers
| (8) The change in control agreements provide for 24 months of medical and dental coverage for Messrs. Betchkal and DesMarteau and 36 months for Mr. Watson from the date of termination at substantially identical terms to the coverage maintained by the employer for the executive and their eligible dependents prior to termination unless the executive obtains similar benefits from another employer. |
Director Compensation
Director Compensation The following table sets forth certain information as to the total remuneration to our directors for the year ended December 31, 2024. Compensation for Messrs. Torchio and Harvey is described in the Summary Compensation Table, and they did not receive additional compensation for their service as a director.
Director Compensation
| Director compensation table | | | | | | | Name | Fees earned or paid in cash ($) | Stock awards ($)(1) | Change in pension value and nonqualified deferred compensation earnings ($)(2) | All other compensation ($)(3) | Total ($) | | Robert M. Campana | 79,500 | 47,004(4) | 8,542 | 7,036 | 142,082 | | Deborah J. Chadsey | 82,500 | 47,004(5) | 22,309 | 7,149 | 158,962 | | Wilbur R. Davis | 78,500 | 47,004(6) | 163,223 | 4,943 | 293,670 | | Timothy B. Fannin | 126,000 | 47,004(7) | 15,465 | 7,426 | 195,895 | | Timothy M. Hunter | 102,500 | 47,004(8) | 25,297 | 7,118 | 181,919 | | John P. Meegan | 88,500 | 47,004(9) | 21,125 | 7,149 | 163,778 | | Mark A. Paup | 73,500 | 47,004(10) | 17,145 | 6,596 | 144,245 | | David M. Tullio | 78,500 | 47,004(11) | 7,600 | 4,360 | 137,464 | | Pablo A. Vegas | 73,500 | 47,004(12) | 2,164 | 3,352 | 126,020 | | Amber L. Williams | 76,000 | 47,004(13) | — | 342 | 123,346 |
Director Compensation
| (1) Reflects the aggregate grant date fair value of restricted shares of 4,156 shares granted to each director on March 20, 2024 with a grant date market value of $11.31 per share, calculated in accordance with FASB ASC Topic 718. This award vests fully one-year from the date of grant. The assumptions used in the valuation of these awards are included in Notes 1(q) and 15(c) to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC. |
Director Compensation
| (2) Reflects change in pension value and nonqualified deferred compensation for each director as follows: Mr. Campana, $5,397 and $3,145; Ms. Chadsey, $6,466 and $15,843; Mr. Davis, $8,858 and $154,365; Mr. Fannin, $15,465 and $0; Mr. Hunter, $4,555 and $20,742; Mr. Meegan, $3,954 and $17,171; Mr. Paup, $2,233 and $14,912; Mr. Tullio, $3,364 and $4,236; Mr. Vegas, $2,164 and $0; Ms. Williams, $0 and $0. |
Director Compensation
| (3) Reflects dividends on unvested restricted shares and taxable value of excess life insurance for each director as follows: Mr. Campana, $5,822 and $1,214; Ms. Chadsey, $5,930 and $1,219; Mr. Davis, $3,586 and $1,357; Mr. Fannin $5,930 and $1,496; Mr. Hunter $5,930 and $1,188; Mr. Meegan, $5,930 and $1,219; Mr. Paup, $5,822 and $774; Mr. Tullio, $3,586 and $774; Mr. Vegas, $2,938 and $414; Ms. Williams, $0 and $342. |
Director Compensation
| (4) At December 31, 2024, Mr. Campana had 36,556 vested stock options, 6,644 unvested stock options and 6,647 unvested shares of restricted stock. |
Director Compensation
| (5) At December 31, 2024, Ms. Chadsey had 43,756 vested stock options, 6,644 unvested stock options and 6,647 unvested shares of restricted stock. |
Director Compensation
| (6) At December 31, 2024, Mr. Davis had 5,760 vested stock options, 1,440 unvested stock options and 4,696 unvested shares of restricted stock. |
Director Compensation
| (7) At December 31, 2024, Mr. Fannin had 32,956 vested stock options, 6,644 unvested stock options and 6,647 unvested shares of restricted stock. |
Director Compensation
| (8) At December 31, 2024, Mr. Hunter had 43,756 vested stock options, 6,644 unvested stock options and 6,647 unvested shares of restricted stock. |
Director Compensation
| (9) At December 31, 2024, Mr. Meegan had 36,556 vested stock options, 6,644 unvested stock options and 6,647 unvested shares of restricted stock. |
Director Compensation
| (10) At December 31, 2024, Mr. Paup had 36,556 vested stock options, 6,644 unvested stock options and 6,647 unvested shares of restricted stock. |
Director Compensation
| (11) At December 31, 2024, Mr. Tullio had 5,760 vested stock options, 1,440 unvested stock options and 4,696 unvested shares of restricted stock. |
Director Compensation
| (12) At December 31, 2024, Mr. Vegas had 0 vested stock options, 0 unvested stock options and 4,156 unvested shares of restricted stock. |
Director Compensation
| (13) At December 31, 2024, Ms. Williams had 0 vested stock options, 0 unvested stock options and 4,156 unvested shares of restricted stock. |
Director Compensation
Amounts included in the “Stock Awards” column for the year ended December 31, 2024 represent the value of current year grants under our 2022 Equity Incentive Plan pursuant to applicable Securities and Exchange Commission regulations that require that we report the full grant-date fair value of grants in the year in which such grants are made. The amount included in the “Change in pension value and nonqualified deferred compensation earnings” column reflects the change in the estimated present value of future benefits under our retirement plans for directors as well as the amount of interest paid on deferred compensation over the applicable federal rate. The full Board determines director compensation. In determining director compensation, we utilize market information that is provided by our Chief People Officer, which is supported by survey data from various sources, as well as through consultation with Pearl Meyer, an independent executive compensation consulting firm. The following table sets forth cash compensation received by each director of the Company and Northwest Bank for the year ended December 31, 2024.
Director Compensation
| | Board service | | Board Committee service | | | | | | | | Director | Board retainer | Independent Chairman and Vice Chairman | Audit Committee member | Compensation Committee member | Innovation and Technology Committee member | Nominating and Corporate Governance Committee member | Risk Management Committee member | Trust Committee member | Total Compensation | | Robert M. Campana | $57,500 | — | — | 6,000 | 10,000(3) | — | 6,000 | — | $79,500 | | Deborah J. Chadsey | 57,500 | — | 7,500 | — | — | 5,000 | 12,500(3) | — | 82,500 | | Wilbur R. Davis | 57,500 | — | — | 6,000 | 5,000 | 10,000(3) | — | — | 78,500 | | Timothy B. Fannin | 57,500 | 51,000(1) | 7,500 | — | — | 5,000 | — | 5,000 | 126,000 | | Timothy M. Hunter | 57,500 | 15,000(2) | 7,500 | 12,500(3) | — | 5,000 | — | 5,000 | 102,500 | | John P. Meegan | 57,500 | — | 15,000(3) | — | — | 5,000 | 6,000 | 5,000 | 88,500 | | Mark A. Paup | 57,500 | — | — | — | 5,000 | — | 6,000 | 5,000 | 73,500 | | David M. Tullio | 57,500 | — | — | 6,000 | 5,000 | — | — | 10,000(3) | 78,500 | | Pablo A. Vegas | 57,500 | — | — | 6,000 | 5,000 | 5,000 | — | — | 73,500 | | Amber L. Williams | 57,500 | — | 7,500 | — | — | 5,000 | 6,000 | — | 76,000 |
Director Compensation
| (1) Denotes Chairman of the Board. |
Director Compensation
| (2) Denotes Vice Chairman of the Board. |
Director Compensation
| (3) Denotes Committee Chairperson. |
Director Compensation
| Northwest Bancshares, Inc. Board and Board Committee meetings held for the year ended December 31, 2024 | | | | | | | | | Northwest Bancshares, Inc. Board | Northwest Bancshares, Inc. Special Board | Audit Committee | Compensation Committee | Innovation and Technology Committee | Nominating and Corporate Governance Committee | Risk Management Committee | Trust Committee | | 6 | 2 | 4 | 5 | 4 | 2 | 5 | 4 |
Director Compensation
Deferred Compensation Plan for Directors. We sponsor a non-qualified deferred compensation plan for directors (“Deferred Compensation Plan”) that enables a director to elect to defer all or a portion of their directors’ fees. The amounts deferred are credited with interest at the taxable equivalent rate received by Northwest Bank on its bank owned life insurance policies that insure the directors’ lives. Deferred amounts are payable upon retirement of a director on or after attaining age 59-1/2 but no later than age 72, in the form of a lump sum or installments over a three-, five- or ten-year period. In addition, the director may elect to receive payments upon reaching a predetermined age. Payments to a director, or to their designated beneficiary, may also be made from the Deferred Compensation Plan upon the director’s death, total and permanent disability, or termination of service from the Board. Participants in the Deferred Compensation Plan would not recognize taxable income with respect to the Deferred Compensation Plan benefits until the assets are actually distributed. Active directors are provided between $110,500 and $200,000 of term life coverage through our group life insurance policy. Coverage is subject to standard age reductions starting at age 65. Retirement Plan for Directors. We maintain a retirement plan for outside directors (the “Directors Plan”). Directors who have served on the Board for five years or more, were appointed as a director prior to September 30, 2022 and are not Northwest Bank employees are eligible to receive benefits under the Directors Plan. Upon a director’s retirement from the Board on or after five years of service and the attainment of age 60, the director is entitled to receive a retirement benefit equal to 60% of the annual retainer paid immediately prior to retirement plus 60% of the Board meeting fees paid for the director’s attendance at Board meetings at the annual rate which was in effect immediately prior to their retirement. If a director retires after five years or more of service but before attaining age 60, the director is entitled to one-half of the benefits otherwise available to them. Retirement benefits commence on the first day of the calendar quarter following the director’s attainment of age 65, or if retirement occurs later, on the first day of the calendar quarter following retirement. Such retirement benefits are paid for a period equal to the lesser of the number of a director’s completed full years of service, their life, or ten years. In the event the director dies before normal retirement age or after normal retirement age but before all retirement benefits to which they are entitled have been received, the director’s beneficiary or estate shall be paid a lump sum equal to the present value of the benefits that would have been paid had the director lived until all accrued retirement benefits had been paid. The Directors Plan for outside directors was amended to freeze all benefits earned through December 31, 2012 based on the plan formula using years of service and a director’s compensation as of December 31, 2012. The amendments also provide that, for service commencing January 1, 2013, additional benefits will be earned equal to 1.25% of career average fees paid in cash for each year in the future. During the year ended December 31, 2024, we recognized expense of $114,611 for the Directors Plan. Effective September 30, 2022, the Directors Plan was amended to preclude new participants. Those directors who were serving as a director on or before September 30, 2022, to continue to vest and accrue additional benefits under the Directors Plan. Any director who becomes a director after September 30, 2022, will not be eligible to participate in the plan. Directors Equity Awards. Options granted to directors under our 2018 Equity Incentive Plan vest over either a five- or seven-year period, depending on year of grant. All nonstatutory options granted under the plan expire upon the earlier of ten years from the date of grant or, up to one year following the date the optionee ceases to be a director. However, in the event of termination of service due to death, disability, normal retirement or a change of control of the Company, nonstatutory options may be exercised for up to ten years from the date of grant. No options were granted under the 2022 Equity Incentive Plan. Restricted shares granted to directors under our 2022 Equity Incentive Plan fully vest one year after the day of grant and restricted shares granted under our 2018 Equity Incentive Plan vest over either a five- or seven-year period, depending on year of grant, with the first vesting on the day of grant. However, all awards will vest at the earlier of age 72 plus five years of service or upon a change in control, death or disability. All unvested awards will expire upon voluntary or involuntary termination before age 72. Dividends on the restricted shares granted under the 2022 Equity Incentive Plan are declared but not paid until thirty days after the vesting date but participants can vote the unvested restricted shares. Dividends on restricted shares under the 2018 Equity Incentive Plan are paid on the unvested restricted stock and participants can vote the unvested restricted stock pursuant to the plans.