DEF 14A of Axos Financial, Inc.
Filed Sep 25, 2024 · FY20240001299709-24-000193
Board Nominees – 2024
Board Nominees – 2024 The Company’s Board is divided into three classes designated as Class I, Class II and Class III (see Corporate Governance, Board of Directors Composition and Independence). There are currently four Class II directors whose terms expire at the 2024 Annual Meeting. The members of the Board of Directors of the Company also are the members of the Board of Directors of Axos Bank (the “Bank”), a consolidated subsidiary of the Company. The Board of Directors, upon recommendation of the Nominating/Corporate Governance Committee, has nominated the four Class II directors named below for election to the Board to hold office for a three-year term expiring at the 2027 Annual Meeting or until a successor is elected and qualified. Unless otherwise instructed, the proxy holders named in the enclosed proxy intend to vote the proxies received by them for the election of these nominees. If, prior to the Annual Meeting, any nominee of the Board of Directors becomes unable to serve as a director, the proxy holders will vote the proxies received by them for the election of a substitute nominee selected by the Board of Directors as permitted by the rules of the Securities and Exchange Commission (the “SEC”).
Board Nominees – 2024
| Vote Required If a quorum is present and voting, the four Class II nominees receiving the highest number of votes will be elected to the Board. Because there are only as many nominees as there are directors to be elected at this year’s meeting, a director nominee is assured of being elected if he or she receives any “For” votes, regardless of how many negative votes (“Withhold”) are cast for that director. Proxies submitted without direction pursuant to this solicitation will be voted “FOR” each of the four Class II nominees nominated by the Board. |
Class II Director Nominees for Terms Ending at the 2027 Annual Meeting of Stockholders
Class II Director Nominees for Terms Ending at the 2027 Annual Meeting of Stockholders
Class II Director Nominees for Terms Ending at the 2027 Annual Meeting of Stockholders
| Gregory Garrabrants | Background •Mr. Garrabrants brings to the Board more than twenty-five years of experience in financial services. •Mr. Garrabrants also possesses particular strengths with respect to leadership and management skills. •Prior to joining the Company, Mr. Garrabrants was a senior vice president and the head of corporate business development at the nation’s seventh largest thrift focusing on entry into new business segments, mergers and acquisitions, joint ventures and strategic alliances. •Before his senior executive roles at banking institutions, Mr. Garrabrants served the financial services industry as an investment banker, management consultant and attorney for over 15 years. •He was an investment banker at Goldman Sachs specializing in advising management and directors on issues such as strategic planning, capital and liquidity management, balance sheet management, asset/liability management, and enhancement of stockholder value. •Prior to Goldman Sachs, Mr. Garrabrants served as a management consultant at McKinsey & Company (“McKinsey”). •At McKinsey, Mr. Garrabrants led teams that worked with senior management of money center banks, non-bank financial services companies, insurance companies and asset managers on strategy development, sales force effectiveness, risk management, organizational design and corporate restructuring. •Prior to McKinsey, Mr. Garrabrants worked as a summer associate at Skadden, Arps, Slate, Meagher & Flom, Munger, Tolles & Olson, and Morrison & Foerster focusing on corporate and securities law and clerked for the Honorable Steven V. Wilson of the United States District Court for the Central District of California. •Prior to graduate school, he began his career at Deloitte Consulting in the financial advisory services and litigation support practices. Director Qualifications The Company believes Mr. Garrabrants’ qualifications to serve on the Board, in addition to those discussed above, include his extensive experience in banking, investment banking, strategic planning and team leadership. The Company believes that his 17 years of service to the Company reflect his skills to attract high quality new customers, build new banking and securities products and services and to develop management teams responsive to current and future business changes. Education Mr. Garrabrants earned his Juris Doctorate, magna cum laude, from the Northwestern University School of Law and his MBA, with the highest distinctions, from the J.L. Kellogg Graduate School of Management at Northwestern University. He has a Bachelor of Science degree in Industrial and Systems Engineering and a minor in Economics from the University of Southern California where he graduated with high honors. | | President and Chief Executive Officer (since October 2007) Director Since: March 2008 Age: 52 Axos Financial Committees: •None Axos Bank Committees: •None | |
Class II Director Nominees for Terms Ending at the 2027 Annual Meeting of Stockholders
| Paul J. Grinberg Independent Director | Background •Mr. Grinberg brings to the Board extensive executive management, operational, M&A, accounting and financial reporting expertise. •Mr. Grinberg currently serves as the President of PG Mountain Capital, a company which provides consulting and advisory services to private equity and venture capital firms and their related businesses. •Mr. Grinberg also serves as the CEO and Chairman of Mountain Lake Acquisition Corp. (“MLAC”) a special purpose acquisition company formed to effect a business combination with one or more businesses. On August 8, 2024, MLAC filed its Form S-1 with the SEC to become publicly listed under the ticker MLACU. •Mr. Grinberg previously served as Chairman of Social Leverage Acquisition Corp I (NYSE: SLAC), a special purpose acquisition company formed to effect a business combination with one or more businesses. •Mr. Grinberg also previously served as an executive with Encore Capital Group (Nasdaq: ECPG), an international specialty finance company with operations in fifteen countries, from September 2004 through December 2018. •His most recent position was President, International, overseeing Encore’s International operations. •Before that, he served as Group Executive, International and Corporate Development and Executive Vice President and Chief Financial Officer. •Prior to joining Encore, Mr. Grinberg served as President of Brio Consulting Group, a company he founded that provided financial strategy and consulting services to private equity and venture-backed companies. •Before that, Mr. Grinberg served as Chief Financial Officer of Stellcom, Inc., a systems integration firm focused on providing mobile and wireless engineering solutions to Fortune 1000 companies, and as Executive Vice President and Chief Financial Officer of TeleSpectrum Worldwide, Inc., a publicly traded company that provided outsourced call center solutions to Fortune 500 companies. •Mr. Grinberg began his career at Deloitte & Touche LLP, ultimately becoming a partner in the firm’s Merger and Acquisition Services Group. Director Qualifications The Company believes Mr. Grinberg’s qualifications to serve on the Board, in addition to those discussed above, include his 20 years of experience in banking as a director of the Company, his nearly 26 years of experience as a public company executive and CFO in the financial services industry, his public accounting experience including public and private company auditing, his M&A advisory experience and his experience analyzing financial strategies for growing businesses. Education Mr. Grinberg earned a MBA (graduating Beta Gamma Sigma) from Columbia University and a bachelor’s degree in accounting (graduating magna cum laude) from Yeshiva University. | | Chairman of the Board of Directors (since February 2017) Director Since: April 2004 Age: 63 Axos Financial Committees: •Audit (Chair) •Compensation •Nominating/Corporate Governance Axos Bank Committees: •Audit (Chair) •Compliance and Independent Credit Review | |
Class II Director Nominees for Terms Ending at the 2027 Annual Meeting of Stockholders
| Uzair Dada Independent Director | Background •Mr. Dada has a strong business and financial background focused on technology and marketing. •He is the Founder and CEO (since 2001) of Iron Horse (“IH”), an award-winning growth marketing technology and services company serving an array of Fortune 500 and high tech companies. •Under Mr. Dada's leadership, IH has introduced a suite of proprietary demand generation solutions and technologies that are widely recognized for their innovation. Director Qualifications The Company believes Mr. Dada’s qualifications to serve on the Board, in addition to those discussed above, include his valuable digital marketing technology and systems integration experience, his IT compliance and auditing experience and his strong business and financial background. Education Mr. Dada is a graduate of the University of California, Berkeley and the J.L. Kellogg Graduate School of Management at Northwestern University. | | Director Since: January 2015 Age: 57 Axos Financial Committees: •None Axos Bank Committees: •Technology (Chair) •Credit | |
Class II Director Nominees for Terms Ending at the 2027 Annual Meeting of Stockholders
| Sara Wardell-Smith Independent Director | Background •Ms. Wardell-Smith brings extensive experience to the Board in the areas of wholesale banking, financial institutions, global payments and fintech partnerships. •Ms. Wardell-Smith is the former head of Visa's commercial business across North America and was responsible for product, partnerships, sales and platforms. While at Visa, she led financial institution initiatives related to card issuance, real-time payments, cross-border payments, and new payment flows. •Prior to Visa, Ms. Wardell-Smith was an executive vice president at Wells Fargo and served on the management committee. During her long tenure at Wells Fargo, Ms. Wardell-Smith held senior leadership positions in a number of banking divisions that served consumers, commercial businesses and institutional clients. These divisions included the financial institutions group, the global treasury management group, the foreign exchange group and the corporate and investment banking division. •Ms. Wardell-Smith is an experienced board member and advisor. She currently serves as an independent board member at R&T Deposit Solutions, a provider of deposit and treasury management solutions for the financial services industry. She is also an independent board member at the Provenance Blockchain Foundation, an organization focused on enabling financial institutions and fintech firms to securely issue, transact and service digitally native financial assets at scale on the Provenance blockchain. •For the past few years, Ms. Wardell-Smith has also served as an advisor at NYCA, a venture capital firm focused on connecting fintech companies to the global financial system. •Previously, Ms. Wardell-Smith served on the U.S. board of Revolut, a fintech company offering certain banking services. She also served on the boards of the CLS Group and CLS Bank International which operate a large multi-currency cash settlement system designed for financial institutions. •Prior to that, Ms. Wardell-Smith was a member of the Working Group on U.S. Renminbi Trading and Clearing, and on the board of the Global Foreign Exchange Division. Director Qualifications The Company believes Ms. Wardell-Smith's qualifications to serve on the Board, in addition to those discussed above, include her strong leadership and extensive financial institutions expertise from her operating experience at global Fortune 500 companies, in addition to her service on several boards of major fintech companies and financial institutions. Education Ms. Wardell-Smith has a Bachelor of Science degree in International Finance from the University of San Francisco. | | Director Since: December 2023 Age: 53 Axos Financial Committees: •None Axos Bank Committees: •Asset/Liability •Compliance and Independent Credit Review | |
Continuing Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders
Continuing Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders
Continuing Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders
| James S. Argalas Independent Director | Background •Mr. Argalas brings to the Board extensive experience in the financial and investment sectors. •In 2009, he founded Presidio Union, LLC, a company that specializes in providing financial analysis and corporate advisory services to early stage growth companies and their investors, taking an active role in developing ventures that have the potential to create significant stockholder value. •Prior to founding Presidio Union, Mr. Argalas was a Principal at Watershed Asset Management and NM Rothschild, where he was responsible for investments in distressed credit, liquidations, real estate, special situations, and debt and equity investments in Asia-Pacific. •Prior to joining Watershed, Mr. Argalas was an Associate Principal with McKinsey & Company and the FICC desk at Goldman Sachs. Director Qualifications The Company believes Mr. Argalas’ qualifications to serve on the Board, in addition to those discussed above, include his experience investing in complex debt securities, real estate and other special investment situations including investments in early stage financial technology ventures. Education Mr. Argalas has a MBA from the J.L. Kellogg Graduate School of Management at Northwestern University with majors in Finance, Entrepreneurship and International Business; in addition, Mr. Argalas holds a Bachelor of Science degree in Engineering from the University of Michigan, and a Bachelor of Science degree in Foreign Service from Georgetown University. | | Director Since: August 2011 Age: 53 Axos Financial Committees: •None Axos Bank Committees: •Asset/Liability (Chair) •Compliance and Independent Credit Review | |
Continuing Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders
| James J. Court Independent Director | Background •Mr. Court currently is Chief Executive Officer of Navogen, LLC (“Navogen”), a business and technology consulting firm. Mr. Court started Navogen in December of 2018. •Previously, Mr. Court served as Chairman and President of First American’s Property & Casualty Insurance Group (“First American”). Mr. Court joined First American in 1999 and has previously served in senior management roles including Chief Operating Officer and Chief Information Officer; his responsibilities at First American included overseeing all three Property & Casualty operating units. •Prior to joining First American, Mr. Court held information technology and operations positions at MGE UPS Systems and Printronix, Inc. •Further, Mr. Court has led successful business and technology transformations in both the financial services and manufacturing sectors. Director Qualifications The Company believes Mr. Court’s qualifications to serve on the Board, in addition to those discussed above, include his experience as CEO, COO and CIO for information technology firms as well his insurance industry knowledge, particularly real estate title insurance and property and casualty insurance. Education Mr. Court holds a MBA from the Graziadio School of Business and Management at Pepperdine University, a Bachelor of Science degree in Information Systems from the University of Redlands, and an Associate degree in Electronic Engineering Technology. | | Director Since: April 2011 Age: 62 Axos Financial Committees: •Compensation (Chair) •Nominating/Corporate Governance Axos Bank Committees: •Technology | |
Continuing Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders
| Stefani D. Carter Independent Director | Background •Ms. Carter has been a practicing attorney since 2005, specializing in civil litigation, contractual disputes and providing general counsel and advice to small businesses and individuals. •Ms. Carter currently serves as an arbitrator and is the principal of three entities, Stefani Carter & Associates, LLC, a consulting and legal services firm, Stable Realty, LLC, a real estate investments firm, and Dallas HERO, a non-profit focusing on local ballot initiatives. •From 2020 to 2023, Ms. Carter served as a litigation shareholder at Ferguson Braswell Fraser Kubasta PC (“FBFK”), a full-service law firm. •Prior to FBFK, Ms. Carter served as senior counsel at the law firm of Estes Thorne & Carr PLLC for three years. •In addition, Ms. Carter served as an elected representative of House District 102 in the Texas House of Representatives between 2011 and 2015. •From 2008 to 2011, Ms. Carter was employed as an associate attorney at the law firm of Sayles Werbner, PC and from 2007 to 2008 was a prosecutor in the Collin County District Attorney’s Office. •Prior to serving as a prosecutor, Ms. Carter was an associate attorney at Vinson & Elkins LLP from 2005 to 2007. •Ms. Carter currently serves as the Lead Director, the Chair of the Nominating and Corporate Governance Committee, and as a Member of the Related Party Transactions Committee of Braemar Hotels & Resorts, Inc. (NYSE: BHR), a luxury lodging real estate investment trust. •In addition, Ms. Carter currently serves as the Chairman of the Board of Directors, as a Member of the Nominating and Corporate Governance Committee, and as a Member of the Executive Committee of Wheeler Real Estate Investment Trust, Inc. (NASDAQ: WHLR), a retail real estate investment trust. Director Qualifications The Company believes that Ms. Carter's qualifications, in addition to those discussed above, include her extensive experience in advising and counseling clients in civil litigation and contractual disputes, her many experiences as an elected official, and her experience serving on other public company boards. Education Ms. Carter has a Juris Doctor from Harvard Law School, a Master's in Public Policy from Harvard University's John F. Kennedy School of Government, and a Bachelor of Arts in Government as well as a Bachelor of Journalism in News/Public Affairs from the University of Texas at Austin. | | Director Since: August 2021 Age: 46 Axos Financial Committees: •Nominating/Corporate Governance (Chair) •Compensation Axos Bank Committees: •Asset/Liability | |
Continuing Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders
| Roque A. Santi Independent Director | Background •Mr. Santi currently serves as a member of the Board of Directors of ECC Capital Corp. •Mr. Santi previously served as Enterprise CFO with Roosevelt Management Company, LLC, in New York through October 2023, where he developed and implemented strategic plans and directed personnel responsible for the oversight of financial control function. •Prior to joining Roosevelt Management, he served from 2010 to 2019 as President, CEO, CFO and board member for Elderlife Financial Services, LLC, where he organized the recapitalization and buildout of a national direct lending unit and developed a unique "financial concierge" service for the senior living industry during the financial crisis. •From 2004 to 2019, Mr. Santi was President and CFO with ECC Capital Corporation. •Mr. Santi's experience includes being a Partner with Ernst & Young LLP and Arthur Andersen LLP, and a Manager with Deloitte & Touche. •Mr. Santi served as a member of the board of ElderLife Financial Services, LLC through 2021, and was a member of the board of Federal National Holdings, Inc. Director Qualifications The Company believes that Mr. Santi's qualifications, in addition to those discussed above, include his over 37 years of executive leadership and expertise in the lending and mortgage industry and experience in both large corporate and entrepreneurial C suites together with his experience serving on other boards. Education Mr. Santi has a bachelor's degree in Accounting from Pace University in New York, New York, and has been a Certified Public Accountant since 1988 – Certified in Maryland and Virginia (status - inactive). | | Director Since: August 2022 Age: 61 Axos Financial Committees: •Audit Axos Bank Committees: •Audit •Asset/Liability •Credit | |
Continuing Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders
Continuing Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders
Continuing Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders
| Tamara N. Bohlig Independent Director | Background •Ms. Bohlig brings to the Board more than 30 years of experience, driving billions in aggregate revenue and accumulated assets under management for companies at the intersection of technology, financial services, and health care. •Over her 30 year career, Ms. Bohlig has led corporate and product marketing teams in developing, launching, and managing more than 30 enterprise and consumer products and services, including the marketing of 250+ investment products and 100+ platform services. •Today, Ms. Bohlig is the Chief Marketing Officer (“CMO”) for Vida Health, and a small business owner-operator. •Earlier, Ms. Bohlig served as CMO of AssetMark and SmartBiz Loans, helping the former take its asset management platform public on the New York Stock Exchange. •She also served as a senior executive across business development, client experience, and marketing for Charles Schwab & Co., Inc.’s investor retail and investment management divisions. •Her early career included vice president roles in marketing for JPMorgan Chase, N.A. (formerly WaMu and Providian), as well as product management, sales, and marketing roles for Hewlett-Packard, P&G, and General Mills. Director Qualifications The Company believes Ms. Bohlig’s qualifications to serve on the Board, in addition to those discussed above, include her directly relevant experience in the asset management and brokerage industries, specifically as it relates to business development, client experience, product management and marketing. Education Ms. Bohlig holds two degrees from Northwestern University, including an MBA from the J.L. Kellogg Graduate School of Management, and a bachelor of arts in sociology. | | Director Since: August 2019 Age: 55 Axos Financial Committees: •None Axos Bank Committees: •Compliance and Independent Credit Review (Chair) •Technology | |
Continuing Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders
| Nicholas A. Mosich Independent Director | Background •Mr. Mosich has extensive knowledge of the real estate development and investment banking industries acquired through his career as a Managing Member of Ion Capital Partners, LLC / Arroyo Vista Partners, LLC, both discretionary investment funds that acquire land for residential development projects in California. •Mr. Mosich serves as General Partner of Southwest Aviation Complex, LP, a fixed base operation at Van Nuys Airport and as General Partner of Vineyard Ventures, LP, a Washington real estate venture. •Mr. Mosich also brings 40 years of capital markets and business management experience, most recently as an Executive Vice President and Board Member of The Seidler Companies Incorporated, a NYSE member firm (“Seidler”). •While at Seidler, Mr. Mosich was responsible for overseeing its Private Client Service operations and Investment Banking Operations. •He was a Managing Director of Seidler’s Community Bank Group, active in mergers and acquisitions, raising public and private capital for emerging growth banks including an active role as a co-manager of the Axos initial public offering. •Previously, Mr. Mosich was a partner at McGoodwin James & Company, a venture capital firm headquartered in Costa Mesa. At McGoodwin, he was active in funding later stage venture companies and making private investments in public companies. Director Qualifications The Company believes Mr. Mosich’s qualifications to serve on the Board, in addition to those discussed above, include his experience developing residential real estate in California and providing capital market services to small banks and other businesses. Education Mr. Mosich completed his undergraduate degree (cum laude) at the University of Michigan and received a MBA from Stanford University. | | Vice Chairman of the Board (since October 2010) Director Since: May 2009 Age: 69 Axos Financial Committees: •Audit Axos Bank Committees: •Audit •Credit | |
Continuing Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders
| Edward J. Ratinoff Independent Director | Background •Mr. Ratinoff currently holds the position of Founder and Managing Principal of James Investment Partners, a privately-held real estate investment platform based in Los Angeles. •Mr. Ratinoff previously served as Managing Director and Head of Acquisitions for Phoenix Realty Group, an institutional real estate investment firm focused on opportunistic multifamily investments. •Mr. Ratinoff also held the position of Managing Director and west coast head for the J.E. Robert Companies. In this role, Mr. Ratinoff was responsible for all equity and debt transactions throughout the western United States for the real estate investment funds sponsored by the firm and was a member of the investment committees for both JER Partners and JER Investors Trust (NYSE: JRT). •Mr. Ratinoff has also served as Principal with FowlerFlanagan Partners and held senior positions focusing on real estate investment banking with McDonald Investments, Chase Securities and BT Alex Brown, executing public and private capital markets transactions for west coast-based real estate companies. Director Qualifications The Company believes Mr. Ratinoff’s qualifications to serve on the Board, in addition to those discussed above, include his experience investing and managing multifamily real estate projects and providing capital markets financing for real estate assets. Education Mr. Ratinoff received a Bachelor of Arts in Architecture and City Planning from the University of California, Berkeley, and a MBA from the J.L. Kellogg Graduate School of Management at Northwestern University. | | Director Since: April 2010 Age: 59 Axos Financial Committees: •None Axos Bank Committees: •Compliance and Independent Credit Review •Credit (Chair) | |
Continuing Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders
| Corporate Governance |
The Director Nominating Process
| Compensation of Non-Employee Directors |
The Director Nominating Process
| | What We Do | | What We Do Not Do | | Emphasis on Equity Compensation: The majority of non-employee director compensation is in the form of equity-based awards (restricted stock units). Equity Ownership Requirements: All non-employee directors are required to own at least five times his or her annual cash retainer in common stock of AX, with a five-year transition period. | | Fees for attending meetings - attendance is expected and compensation is not dependent on Board meeting schedule. Undue focus on short-term stock performance - pay aligns with compensation philosophy, not short-term fluctuations in stock price. | |
Fiscal Year 2024 Non-Employee Director Compensation
Fiscal Year 2024 Non-Employee Director Compensation In accordance with applicable SEC rules and regulations, the following table reports all compensation the Company paid to non-employee directors during fiscal year 2024:
Fiscal Year 2024 Non-Employee Director Compensation
| Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total Compensation | | James S. Argalas | $40,000 | $258,540 | $298,540 | | Tamara N. Bohlig | 40,000 | 258,540 | 298,540 | | Stefani D. Carter | 40,000 | 258,540 | 298,540 | | James J. Court | 53,000 | 284,394 | 337,394 | | Uzair Dada | 40,000 | 258,540 | 298,540 | | Paul J. Grinberg | 132,000 | 782,084 | 914,084 | | Nicholas A. Mosich | 66,000 | 329,639 | 395,639 | | Edward J. Ratinoff | 40,000 | 258,540 | 298,540 | | Roque A. Santi | 40,000 | 258,540 | 298,540 | | Sara Wardell-Smith(3) | 23,333 | 238,185 | 261,518 |
Fiscal Year 2024 Non-Employee Director Compensation
(1)The amounts in this column represent the annual cash fees paid to our non-employee directors for service during fiscal year 2024. (2)The stock awards included for each non-employee director above consist of RSUs. The value for each of these awards is its grant date fair value calculated by multiplying the number of units subject to the award by the NYSE closing price per share on the date such award was granted. The table below shows the award number of units, the grant date, the per-unit fair value, and the total grant date fair value for the stock awards shown. (3)Ms. Wardell-Smith commenced service on the Board on December 1, 2023.
Fiscal Year 2024 Grants of Plan-Based Awards
Fiscal Year 2024 Grants of Plan-Based Awards This table shows all plan-based awards that the Company made to non-employee directors during fiscal year 2024:
Fiscal Year 2024 Grants of Plan-Based Awards
| Name | Grant Date | RSUs | Base Price of RSUs (per Unit) | Grant Date Fair Value of RSUs | | James S. Argalas | 8/31/2023 | 6,000 | $43.09 | $258,540 | | Tamara N. Bohlig | 8/31/2023 | 6,000 | 43.09 | 258,540 | | Stefani D. Carter | 8/31/2023 | 6,000 | 43.09 | 258,540 | | James J. Court | 8/31/2023 | 6,600 | 43.09 | 284,394 | | Uzair Dada | 8/31/2023 | 6,000 | 43.09 | 258,540 | | Paul J. Grinberg | 8/31/2023 | 18,150 | 43.09 | 782,084 | | Nicholas A. Mosich | 8/31/2023 | 7,650 | 43.09 | 329,639 | | Edward J. Ratinoff | 8/31/2023 | 6,000 | 43.09 | 258,540 | | Roque A. Santi | 8/31/2023 | 6,000 | 43.09 | 258,540 | | Sara Wardell-Smith(1) | 12/15/2023 | 4,500 | 52.93 | 238,185 |
Fiscal Year 2024 Grants of Plan-Based Awards
(1)Ms. Wardell-Smith commenced service on the Board on December 1, 2023.
Fiscal Year 2024 Grants of Plan-Based Awards
| Item 2. Advisory Vote on Executive Compensation | | | | | | The board of directors recommends a vote “FOR” the approval, in a non-binding and advisory stockholder vote, of the compensation of the company’s named executive officers as disclosed in this proxy statement. | |
Fiscal Year 2024 Grants of Plan-Based Awards
The Company’s compensation policies and decisions are designed to promote the Company’s business strategies and the interest of its stockholders by providing incentive needed to attract, motivate and retain key executives who are critical to our long-term success as a financial institution. Stockholders are urged to read the “Compensation Discussion and Analysis” section of this Proxy Statement, which discusses how our compensation design and practices reflect our compensation philosophy. The Compensation Committee and the Board of Directors believe that its compensation design and practices are effective in implementing the Company’s strategic goals and business strategies. We are asking our stockholders for a non-binding and advisory vote to approve the compensation of our Named Executive Officers under Section 14A of the Exchange Act. This proposal, commonly known as a “say-on-pay” proposal, is brought annually and gives our stockholders the opportunity to express their views on the compensation of the Named Executive Officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the compensation practices described in this Proxy Statement. Accordingly, the Board of Directors recommends that you vote in favor of the following resolution: “RESOLVED, that the stockholders of Axos Financial, Inc. approve, on a non-binding and advisory basis, the compensation of its Named Executive Officers as disclosed in the Proxy Statement for the 2024 Annual Meeting, including the Summary Compensation Table and the Compensation Discussion and Analysis set forth in such Proxy Statement and other related tables and disclosures.”
Fiscal Year 2024 Grants of Plan-Based Awards
| Vote Required The affirmative vote of the holders of a majority of the outstanding shares represented in person or by proxy at the Annual Meeting and entitled to vote on this item will be required to approve it. As this is an advisory vote, the result will not be binding on the Company, the Board of Directors or the Compensation Committee, although the Compensation Committee will consider the outcome of the vote when evaluating the compensation program. Proxies submitted without direction pursuant to this solicitation will be voted “FOR” the approval of the compensation of the Company’s Named Executive Officers, as disclosed in this Proxy Statement. |
Fiscal Year 2024 Grants of Plan-Based Awards
| Executive Officers |
Fiscal Year 2024 Grants of Plan-Based Awards
Officers are appointed for indefinite terms of office and may be removed or replaced by the Board or by the President and Chief Executive Officer. There are no family relationships among any of our directors and executive officers. The following information is furnished with respect to our executive officers.
Fiscal Year 2024 Grants of Plan-Based Awards
| Gregory Garrabrants President and Chief Executive Officer | •Mr. Garrabrants’ background and experience prior to joining the Company are discussed under Item 1. Election of Directors. | | Executive Officer since: 2007 | | | Age: 52 | |
Fiscal Year 2024 Grants of Plan-Based Awards
Officer holds the position with the Company and the Bank.
Fiscal Year 2024 Grants of Plan-Based Awards
| Eshel Bar-Adon Executive Vice President, Strategic Partnerships and Chief Legal Officer | •Prior to joining the Company in 2011, Mr. Bar-Adon served as Executive Vice President and Chief Legal Officer of a leading specialty finance firm, Seneca One Finance, Inc. •During his tenure, he served as Acting President and was a member of the Company’s Executive Committee. | | Executive Officer since: 2019 | | | Age: 69 | |
Fiscal Year 2024 Grants of Plan-Based Awards
Officer holds the position with the Company and the Bank.
Fiscal Year 2024 Grants of Plan-Based Awards
| Thomas Constantine Executive Vice President, Chief Credit Officer | •Prior to joining the Company in 2010, Mr. Constantine served as a senior examiner with the former Office of Thrift Supervision (OTS). •Mr. Constantine has more than 35 years of experience in the banking and financial services industries previously working in various roles, including as a portfolio manager, commercial real estate loan officer, chief lending officer and chief credit officer. | | Executive Officer since: 2019 | | | Age: 62 | |
CEO Pay Ratio
CEO Pay Ratio SEC rules require most publicly traded companies to provide information regarding the relationship of the median annual total compensation of our employees, other than our CEO, to the annual total compensation of Mr. Garrabrants, our CEO. We identified the median employee by calculating the total compensation of all persons excluding the CEO who were employed by us as of June 30, 2024, including full-time and part-time employees. We considered regular pay for salaried and hourly employees, overtime, equity compensation and taxable cash benefits, including cash incentive payments, and referral fee income, for the fiscal year ended June 30, 2024 as reflected by our internal payroll records. We made annualizing adjustments to the compensation of full time employees who joined us mid-year. We then ranked the fiscal year 2024 compensation received by all of the employees in our employee population other than our CEO to determine our median employee. Once we identified our median employee, we calculated such employee’s annual total compensation in the same manner as our named executive officers’ compensation is determined for purposes of the Summary Compensation Table. Based on this methodology, we determined that: •The annual total compensation of our median employee was $95,736. •The annual total compensation of Mr. Garrabrants, our Chief Executive Officer, was $13,861,409. •The ratio of Mr. Garrabrants’ total compensation for 2024 to that of the median employee was 145 to 1. Mr. Garrabrants’ RSU award included in his fiscal year 2024 compensation calculation is highly dependent on the Company’s performance, as described in the preceding pages, and may not be realized by Mr. Garrabrants. If the Company does not outperform its peers in fiscal year 2025, Mr. Garrabrants would not be awarded any RSUs and his received fiscal year 2024 compensation would be reduced to $4,427,777 and the ratio to median employee to 46 to 1.
Summary Compensation Table
Summary Compensation Table The following table shows all compensation earned and equity incentives awarded during fiscal year 2024 and the preceding two fiscal years for our CEO, CFO, and the other three most highly compensated executive officers. All individuals listed in the following table are referred to in this Proxy Statement as the “Named Executive Officers.”
Summary Compensation Table
| Name and Title | Year(1) | Salary(2) | Non-Equity Incentive Plan Compensation(3) | Bonus(4) | Stock Awards(5) | All Other Compensation(6) | Total | | Gregory Garrabrants, | 2024 | $700,000 | $3,714,577 | $— | $9,433,632 | $13,200 | $13,861,409 | | President and Chief Executive Officer | 2023 | 700,000 | 4,667,806 | — | 5,225,526 | 12,200 | 10,605,532 | | | 2022 | 700,000 | 4,230,387 | — | 8,792,836 | 11,600 | 13,734,823 | | Thomas Constantine | 2024 | 350,000 | — | 435,000 | 480,069 | 13,200 | 1,278,269 | | Executive Vice President, Chief Credit Officer | 2023 | 330,000 | — | 475,000 | 455,057 | 12,200 | 1,272,257 | | | 2022 | 310,000 | — | 435,000 | 410,077 | 11,600 | 1,166,677 | | Raymond Matsumoto | 2024 | 400,000 | — | 600,000 | 575,019 | 13,200 | 1,588,219 | | Executive Vice President, Chief Operating Officer | 2023 | 385,000 | — | 565,000 | 555,037 | 12,200 | 1,517,237 | | | 2022 | 365,000 | — | 535,000 | 480,040 | 11,600 | 1,391,640 | | David Park(7) | 2024 | 420,000 | — | 553,945 | 502,018 | 11,250 | 1,487,213 | | Executive Vice President, Commercial Banking and Treasury Management | 2023 | 380,000 | — | 433,000 | 391,764 | 10,250 | 1,215,014 | | Derrick K. Walsh(8) | 2024 | 330,000 | — | 490,000 | 475,055 | 11,250 | 1,306,305 | | Executive Vice President, Chief Financial Officer | 2023 | 315,000 | — | 460,000 | 445,033 | 10,250 | 1,230,283 | | | 2022 | 300,000 | — | 430,000 | 866,164 | 9,750 | 1,605,914 |
Summary Compensation Table
(1)Fiscal year in which salary and non-equity incentives and bonuses were earned. For stock awards, the fiscal year of the accounting grant date. (2)Salary for fiscal year 2024 approved by the Compensation Committee in September 2023. (3)Payments under Non-Equity Incentive Plans were earned in accordance with the employment contracts of Mr. Garrabrants. Amount for Mr. Garrabrants includes cash bonus plus $2.9 million of vested performance units for fiscal year 2023 and cash bonus plus $3.0 million of vested performance units for fiscal year 2022. (4)Bonus earned during the fiscal years listed. (5)Aggregate value of RSUs based upon the accounting grant date and calculated in accordance with ASC 710 and 718. The actual value at the end of the vesting period may be significantly higher or lower than the value presented depending upon the market value of the common stock at that time. For Mr. Garrabrants, the $9.4 million, $5.2 million and $8.8 million value of the stock award for fiscal years 2024, 2023 and 2022 included in the table above, represents the ASC 718 aggregate grant date value of the RSU awards issuable in connection with the one-year renewal of his employment agreement. See the section “Impact of One-Year Renewal of Agreement on CEO RSU Award Grant Date” for a further description of these award. As required by Item 402 of Regulation S-K, the table above presents the aggregate grant date value notwithstanding the RSU award represents a multi-year incentive award. The presentation required by Item 402 with respect to this award reduces the comparability of Mr. Garrabrants’ compensation year-over-year because it presents a multi-year incentive award as only being compensation in a single year. The resulting expense allocation will be spread across all vesting years in accordance with ASC 718. The total of the compensation expense of $23.5 million is being recognized in the income statement over fiscal years 2022 through 2029. (6)All other compensation amounts are 401(k) matching contributions. (7)Mr. Park was not an NEO in fiscal year 2022. (8)Mr. Walsh received a one-time grant of 10,000 RSUs upon promotion to CFO in fiscal year 2022.
Grants of Plan-Based Awards in Fiscal Year 2024
Grants of Plan-Based Awards in Fiscal Year 2024 The table below shows all plan-based awards the Company made during fiscal year 2024 to the Named Executive Officers:
Grants of Plan-Based Awards in Fiscal Year 2024
| Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units(1) | Closing Price of Stock on Date of Grant | | Grant Date Fair Value of Stock and Option Awards(2) | | | Gregory Garrabrants(3) | 01/01/24 | 113,672 | | 82.99 | | 9,433,632 | | Thomas Constantine | 09/15/23 | 5,779 | 42.40 | | 245,030 | | | | 03/15/24 | 4,755 | 49.43 | | 235,040 | | | Raymond Matsumoto | 09/15/23 | 6,722 | 42.40 | | 285,013 | | | | 03/15/24 | 5,867 | 49.43 | | 290,006 | | | David Park | 09/15/23 | 5,378 | 42.40 | | 228,027 | | | | 03/15/24 | 5,543 | 49.43 | | 273,990 | | | Derrick K. Walsh | 09/15/23 | 5,543 | 42.40 | | 235,023 | | | | 03/15/24 | 4,856 | 49.43 | | 240,032 | |
Grants of Plan-Based Awards in Fiscal Year 2024
(1)RSUs for Mr. Garrabrants vest in one-fourth increments on each of the first four fiscal year-ends following the date of grant; for all others, vesting is in one-third increments on each of the first three anniversaries of the date of grant. (2)Aggregate value of RSU awards based upon the accounting grant date and calculated in accordance with ASC 710 and 718. The actual value at the end of the vesting period may be significantly higher or lower than the value presented depending upon the market value of the common stock at that time. (3)The January 1, 2024 award to Mr. Garrabrants (to be issued in September 2025, if the Company performance criteria is achieved) reflects estimated RSU awards totaling 113,672 RSUs at an average price of $82.99 determined through Monte Carlo simulation in accordance with ASC 718.
Outstanding Equity Awards at Fiscal Year-End 2024
Outstanding Equity Awards at Fiscal Year-End 2024 This table shows the equity awards that have been previously awarded to each of the Named Executive Officers and which remained outstanding as of June 30, 2024 all of which consist of RSUs:
Outstanding Equity Awards at Fiscal Year-End 2024
| | Stock Awards | | | | | Name | Number of Shares or Units of Stock That Have Not Vested | Date of Grant(1) | Market Value of Shares or Units of Stock That Have Not Vested(2) | | | Gregory Garrabrants | 119,588 | 08/25/21 | | 6,834,454 | | | 179,308 | 09/14/23 | 10,247,452 | | | Thomas Constantine | 1,359 | 08/25/21 | 77,667 | | | | 1,505 | 03/23/22 | 86,011 | | | | 4,077 | 09/23/22 | 233,001 | | | | 4,064 | 03/15/23 | 232,258 | | | | 5,779 | 09/15/23 | 330,270 | | | | 4,755 | 03/15/24 | 271,748 | | | Raymond Matsumoto | 1,494 | 08/25/21 | 85,382 | | | | 1,863 | 03/23/22 | 106,470 | | | | 4,982 | 09/23/22 | 284,721 | | | | 4,947 | 03/15/23 | 282,721 | | | | 6,722 | 09/15/23 | 384,162 | | | | 5,867 | 03/15/24 | 335,299 | | | David Park | 792 | 08/25/21 | 45,263 | | | | 1,136 | 03/23/22 | 64,922 | | | | 3,384 | 09/23/22 | 193,396 | | | | 3,622 | 03/15/23 | 206,997 | | | | 5,378 | 09/15/23 | 307,353 | | | | 5,543 | 03/15/24 | 316,782 | | | Derrick K. Walsh | 3,334 | 09/23/21 | 190,538 | | | | 1,430 | 09/24/21 | 81,725 | | | | 1,433 | 03/23/22 | 81,896 | | | | 3,986 | 09/23/22 | 227,800 | | | | 3,975 | 03/15/23 | 227,171 | | | | 5,543 | 09/15/23 | 316,782 | | | | 4,856 | 03/15/24 | 277,520 | |
Outstanding Equity Awards at Fiscal Year-End 2024
(1)RSUs for Mr. Garrabrants vest in one-fourth increments on each of the first four fiscal year-ends following the date of grant. For all others, vesting is in one-third increments on each of the first three anniversaries of the date of grant. (2)The values contained in this column were calculated by multiplying the number of shares by $57.15, which was the closing price of the Company’s common stock reported on the NYSE on June 28, 2024, the last trading day of fiscal year 2024.
Stock Vested in Fiscal Year 2024
Stock Vested in Fiscal Year 2024 This table shows the RSUs that vested for each Named Executive Officer during fiscal year 2024:
Stock Vested in Fiscal Year 2024
| | Stock Awards | | | | Name | Number of Shares Acquired on Vesting | Value Realized on Vesting | | | Gregory Garrabrants | 179,358 | | 10,250,310 | | Thomas Constantine | 10,370 | 470,475 | | | Raymond Matsumoto | 11,894 | 539,839 | | | David Park | 7,867 | 357,338 | | | Derrick Walsh | 13,459 | 581,506 | |
Stock Vested in Fiscal Year 2024
The value realized upon vesting is based on the number of shares vesting multiplied by the market price of a Company share on the applicable vesting date.
Pay Versus Performance
Pay Versus Performance The following table shows a comparison of summary compensation and compensation actually paid (“CAP”), as computed in accordance with Item 402(v) of Regulation S-K, to the Company’s CEO as the Company’s Principal Executive Officer (“PEO”) and the average of such measures for the Company’s Named Executive Officers other than the Company’s PEO (“Non-PEO NEO”) relative to the Company’s measures of financial performance for each of the fiscal years indicated. Given the Company’s compensation programs for its PEO and Non-PEO NEOs are heavily weighted toward stock-based compensation, the CAP presented herein is dependent upon the performance of the Company’s stock price, which may result in significant differences between CAP and compensation presented in the Summary Compensation Table in any given year.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO(1) | | Compensation Actually Paid to PEO(1)(2) | | Average Summary Compensation Table Total for Non-PEO NEO(1) | | Average Compensation Actually Paid to Non-PEO NEOs(1),(3) | | Value of Initial Fixed $100 Investment Based on: | | Net Income (In Thousands) | Return on Average Common Equity | | | | | | | | | | | Axos Total Shareholder Return(4) | Peer Group Total Shareholder Return(4) | | | | 2024 | | 13,861,409 | | 28,823,246 | | 1,415,002 | | 2,005,992 | 258.83 | 147.89 | $450,008 | 21.64% | | 2023 | 10,605,532 | | 5,859,824 | | 1,308,698 | | 1,469,939 | | 178.62 | 123.55 | 307,165 | 17.22% | | 2022 | 13,734,823 | | 24,909,780 | | 1,489,318 | | 979,109 | | 162.36 | 149.73 | 240,716 | 15.61% | | 2021 | 5,184,508 | | 11,991,308 | | 1,185,961 | | 2,549,105 | | 210.10 | 159.42 | 215,707 | 16.51% |
Pay Versus Performance
(1)NEOs included in the above table are compromised of the following individuals. In accordance with SEC rules, only the Company’s CEO, CFO and three highest-paid NEOs from the Summary Compensation Table are included.
Pay Versus Performance
| Fiscal Year | PEO | Non-PEO NEOs | | 2024 | Gregory Garrabrants | Thomas Constantine, Raymond Matsumoto, David Park, Derrick K. Walsh | | 2023 | Gregory Garrabrants | Thomas Constantine, Raymond Matsumoto, David Park, Derrick K. Walsh | | 2022 | Gregory Garrabrants | Thomas Constantine, Raymond Matsumoto, Andrew J. Micheletti, Brian Swanson, Derrick K. Walsh | | 2021 | Gregory Garrabrants | Eshel Bar-Adon, Raymond Matsumoto, Andrew J. Micheletti, Brian Swanson |
Pay Versus Performance
(2)The following summarizes the amounts deducted and added to the Summary Compensation Table Total for PEO to calculate CAP to PEO:
Pay Versus Performance
| | Fiscal Year | | | | | | 2024 | 2023 | 2022 | 2021 | | Amounts reported in the Summary Compensation Table as Stock Awards granted during the fiscal year which are based on grant date fair values | $(9,433,632) | $(5,225,526) | $(8,792,836) | $— | | Fair value as of the end of the fiscal year of equity awards granted during the fiscal year which remain outstanding and unvested as of the end of the fiscal year | 16,743,807(a) | 3,275,492(b) | 16,945,327(c) | — | | Change in fair value during the fiscal year of awards granted in prior years that remain outstanding and unvested as of the end of the fiscal year | 2,117,903 | 858,642 | — | 2,917,200 | | Fair value as of the vesting date for awards that were granted and vested during the fiscal year | 3,415,856 | — | 4,287,266 | — | | Change in fair value from the end of the prior fiscal year to the vesting date for awards granted in prior years that vested during the fiscal year | 2,117,903 | 429,321 | (1,264,800) | 3,889,600 | | Fair value as of the end of the prior fiscal year of awards granted in prior years that did not meet the applicable vesting conditions during the fiscal year | — | (4,083,637) | — | — | | Net difference between Summary Compensation Table Total for PEO and CAP to PEO | $14,961,837 | $(4,745,708) | $11,174,957 | $6,806,800 |
Pay Versus Performance
(a)Includes RSUs related to awards made to Mr. Garrabrants on January 1, 2024 to be issued, if at all, in September 2025 based on the Company’s performance in connection with the renewal of his employment agreement. See “Impact of One-Year Renewal on CEO RSU Award Grant Date” and footnote 5 to the Summary Compensation Table for additional information regarding the fiscal year 2024 estimated award. Amount also includes 179,308 RSUs granted on September 14, 2023 which remain unvested as of June 30, 2024. (b)Reflects an aggregated estimated RSU award totaling 83,050 RSUs, related to awards made to Mr. Garrabrants on January 1, 2023 which were issued in September 2024 based on the Company’s performance in connection with the renewal of his employment agreement. See “Impact of One-Year Renewal on CEO RSU Award Grant Date” and footnote 5 to the Summary Compensation Table for additional information regarding the fiscal year 2023 estimated award. (c)Includes $4,083,637 reflecting an aggregated estimated RSU award totaling 113,909 RSUs, related to awards made to Mr. Garrabrants on January 1, 2022 based on the Company’s performance in connection with the renewal of his employment agreement. See footnote 5 to the Summary Compensation Table for additional information regarding the fiscal year 2022 award. (3)The following summarizes the average amounts deducted and added to the Average Summary Compensation Table Total for Non-PEO Named Executive Officers to calculate at Average CAP to Non-PEO Named Executive Officers:
Pay Versus Performance
| | Fiscal Year | | | | | | 2024 | 2023 | 2022 | 2021 | | Amounts reported in the Summary Compensation Table as Stock Awards granted during the fiscal year which are based on grant date fair values | $(508,040) | $(461,723) | $(749,258) | $(510,473) | | Fair value as of the end of the fiscal year of equity awards granted during the fiscal year which remain outstanding and unvested as of the end of the fiscal year | 634,979 | 488,573 | 559,274 | 801,457 | | Change in fair value during the fiscal year of awards granted in prior years that remain outstanding and unvested as of the end of the fiscal year | 406,560 | 81,648 | (340,008) | 897,969 | | Change in fair value from the end of the prior fiscal year to the vesting date for awards granted in prior years that vested during the fiscal year | 57,491 | 52,743 | 19,783 | 174,191 | | Net difference between Average Summary Compensation Table Total for Non-PEO NEOs and Average CAP to Non-PEO NEOs | $590,990 | $161,241 | $(510,209) | $1,363,144 |
Pay Versus Performance
(4)Axos Total Shareholder Return and Peer Group Total Shareholder Return assumes $100 was invested in AX common stock and in the ABAQ Total Return Index (ticker: XABQ), respectively, on June 30, 2020. The charts and narrative below are based on the information above in order to present the relationship between Company’s PEO’s CAP and the Company’s Average CAP for Non-PEO NEO with the indicated measure of financial performance, for the last four fiscal years.
Compensation Actually Paid versus Company and Peer Group Total Stockholder Returns
Compensation Actually Paid versus Company and Peer Group Total Stockholder Returns
Compensation Actually Paid versus Company and Peer Group Total Stockholder Returns
| | PEO CAP | | Average CAP for Non-PEO NEO | | | Company Shareholder Returns | | Peer Group Shareholder Returns |
Compensation Actually Paid versus Company and Peer Group Total Stockholder Returns
Axos total shareholder return and peer group total shareholder return are impacted by external factors related to broader equity markets. PEO CAP and Average CAP for Non-PEO NEO include significant equity components and are calculated using the fiscal year-end share prices, which inherently are impacted by external factors related to broader equity markets.
Compensation Actually Paid versus Net Income
Compensation Actually Paid versus Net Income
Compensation Actually Paid versus Net Income
| | PEO CAP | | Average CAP for Non-PEO NEO | | Net Income |
Compensation Actually Paid versus Net Income
The Company’s net income has increased in each of the past four fiscal years reflecting the successful leadership of the PEO and the Non-PEO NEOs; however, net income is dependent on a variety of factors, some of which are not directly linked to how compensation actually paid to the Company’s executive officers is determined for purposes of this disclosure, including the share price of the Company’s common stock during the applicable fiscal year.
Compensation Actually Paid versus Return on Average Common Equity
Compensation Actually Paid versus Return on Average Common Equity
Compensation Actually Paid versus Return on Average Common Equity
| | PEO CAP | | Average CAP for Non-PEO NEO | | Average Common Equity |
Compensation Actually Paid versus Return on Average Common Equity
The Company’s return on average common equity has ranged from 15.61% to 21.64% over the past four fiscal years. Return on average common equity is dependent on a variety of factors, some of which are not directly linked to how compensation actually paid to the Company’s executive officers is determined for purposes of this disclosure, including the share price of the Company’s common stock during the applicable fiscal year. For fiscal year 2024, the Company considers the following performance measures to be the most important performance measures to link CAP to the Company’s PEO to Company performance:
Compensation Actually Paid versus Return on Average Common Equity
| Net income | Total return to stockholders | | Return on average common equity | Market capitalization | | Average common equity | |
Compensation Actually Paid versus Return on Average Common Equity
For fiscal year 2024, the Company considers the following performance measures to be the most important performance measures to link CAP to the Company’s Non-PEO NEO to Company performance:
Compensation Actually Paid versus Return on Average Common Equity
| Overall and relative performance of the Named Executive Officer | | Corporate performance, including return on average common equity | | Peer bank Named Executive Officer compensation levels | | Business unit performance |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control A change in control may be in the best interest of our common stockholders. We believe it is appropriate to align the compensation of the CEO and the CFO with the benefits of our stockholders. Since their long-term stock compensation is designed to be significant and such compensation vests in future years, we provide them with accelerated vesting of RSUs and cash compensation in certain situations where we believe a change in control of the Company and (or) terminating them is in the best interest of the common stockholders. Generally, such compensation is not significant to the CEO or the CFO if such termination is the result of material failures in the performance of their duties as generally described in their employment contracts. This section discusses the incremental compensation that would be payable by the Company in the event of a change-in-control of the Company or a termination of employment of certain Named Executive Officers with the Company for various described reasons, sometimes referred to in this section as a “triggering event.” In accordance with applicable SEC rules the following discussion assumes that the triggering event in question – death, disability, change in control or termination – occurred on June 30, 2024. With respect to calculations based on the Company’s stock price, we used $57.15, which was the reported closing price of one share of the Company’s common stock on NYSE on June 28, 2024, the last trading day of fiscal year 2024. Pursuant to applicable SEC rules, the analysis contained in this section does not consider or include payments made to a Named Executive Officer with respect to contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms, or operation in favor of executive officers of the Company, such as employee group term life insurance. In addition, in connection with any actual termination of employment, the Company may determine to enter into an agreement or to establish an arrangement providing additional benefits or amounts, or altering the terms of benefits provided upon the events discussed below, any actual amounts paid or distributed may be higher or lower than reported below. Factors that could affect these amounts include, for example, the timing during the year of any event and the Company’s stock price. The Company believes that severance protections can play a valuable role in attracting and retaining key executive officers. The Compensation Committee evaluates the level of severance benefits consistent with competitive practices. The following is a general discussion of the primary categories of triggering events which apply to certain of the Company’s Named Executive Officers.
Transactions with Our Directors and Officers
Transactions with Our Directors and Officers In the ordinary course of its business and subject to applicable banking regulations, the Bank makes loans to and engages in other banking transactions with its directors, officers and employees and their associates. Other than loans pursuant to our Loan Program, such loans and other banking transactions are generally made on the same terms as those prevailing at the time for comparable transactions with persons of comparable creditworthiness that have no affiliation with the Company or the Bank. Loans are made only to persons affiliated with the Company and the Bank if they do not involve more than the normal risk of collectability of loans made to non-affiliated persons and if they do not present any other unfavorable features. As discussed above, the Bank offers the Loan Program under which each eligible borrower may obtain loans to finance the purchase, construction, maintenance or improvement of a primary residence for terms of 9 years to 30 years at interest rates that are below market rates on loans made to persons unaffiliated with the Bank and the Company. Outstanding loans to all directors and executives who elected to participate in the Loan Program made up approximately 34% of the total balance outstanding for the Loan Program. As of June 30, 2024, none of the loans under the Loan Program or to our directors or executive officers were classified by the Bank as non-accrual, past due, restructured or potential problem loans. The table below provides information on our employee loans and the directors and executive officers who participated in the Loan Program:
Transactions with Our Directors and Officers
| (in thousands) Name | Largest Aggregate Principal Outstanding for 2024 | | Principal Outstanding at June 30, 2024 | | Principal Paid During 2024 | | Interest Paid During 2024 | | Loans Paid off during 2024 | | Interest Rate Payable (%)(1) | | Greg Garrabrants(2) Chief Executive Officer | | 8,592.5 | | 8,458.3 | | 134.2 | | 39.2 | | — | 0.43% | | James S. Argalas Director | 7,162.4 | | 6,958.9 | | 203.5 | | 66.1 | | — | | 1.02% | | Paul J. Grinberg(2) Director | 4,699.6 | | 4,699.6 | | — | | 23.8 | | — | | 0.56% | | Andrew J. Micheletti EVP, Finance | 2,809.8 | | 2,748.0 | | 61.8 | | 80.4 | | — | | 2.89% | | David Park EVP, Commercial Banking & Treasury Management | 1,353.4 | | 1,305.8 | | 47.6 | | 5.7 | | — | | 0.43% | | Thomas Constantine EVP, Chief Credit Officer | 1,249.9 | | 1,202.6 | | 47.3 | | 5.2 | | — | | 0.39% | | Brian Swanson EVP, Head of Consumer Bank | 1,239.0 | | 1,195.7 | | 43.3 | | 6.1 | | — | | 0.43% | | Derrick Walsh EVP, Chief Financial Officer | 910.7 | | 881.6 | | 29.1 | | 3.4 | | — | | 0.41% | | Nicholas Mosich Director | 715.8 | | 688.6 | | 27.2 | | 3.3 | | — | | 0.43% | | Eshel Bar-Adon EVP, Strategic Partnerships and Chief Legal Officer | 652.6 | | 631.6 | | 21.0 | | 2.5 | | — | | 0.43% | | Raymond Matsumoto EVP, Chief Operating Officer | 487.5 | | 470.3 | | 17.2 | | 2.1 | | — | | 0.43% | | John Tolla Chief Risk Officer | 445.7 | | 431.3 | | 14.4 | | 1.7 | | — | | 0.43% | | Non-director or executive officer employee loans | | | 57,655.7 | | | | | | | | |
Transactions with Our Directors and Officers
(1)All loans in the table made pursuant to the Bank’s Loan Program. The interest rates reflect the mid-term Applicable Federal Rate (“AFR”) at time of loan origination. (2)Loan type is a construction loan with principal payments to commence upon completion of construction.