DEF 14A of Bankwell Financial Group, Inc., Apr 16, 2024

DEF 14A of Bankwell Financial Group, Inc.

Filed Apr 16, 2024 · FY20230001505732-24-000073

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Certificate of Incorporation of the Company provides that the number of directors shall not be less than six (6) or more than sixteen (16) and permits the exact number to be determined from time to time by our Board of Directors. Nine (9) of our current directors and one (1) new director have been nominated for election to serve until the next Annual Meeting and until their successors are elected and qualified. For so long as Lawrence B. Seidman and his affiliated funds continue to own at least five percent (5%) of the outstanding shares of Company common stock, Mr. Seidman will be entitled under his Agreement with the Company to be a nominee to the Board of Directors and the Bank’s Board of Directors, subject to satisfaction of all reasonable corporate governance requirements applicable to non-employee directors and legal and regulatory requirements regarding service and election as a director. In addition, Mr. Gruseke’s employment agreement provides that he will serve as a director of the Company and the Bank on an uncompensated basis during the term of the agreement. Except for Mr. Gruseke’s employment agreement and the Agreement dated February 5, 2020 between Mr. Seidman and the Company, as amended by an Amendment dated as of July 30, 2022, pursuant to which the Company’s Board of Directors agreed to nominate Mr. Seidman to serve as a director of the Company and which are included as exhibits to the Company’s periodic reports under Section 13 of the Securities Exchange Act (the “Exchange Act”), there are no arrangements or understandings between any director, or nominee for directorship pursuant to which such director or nominee was selected as a director or nominee. The following table sets forth the names and certain information about each nominee for director. Director Gail E.D. Brathwaite has decided to retire from the Board of Directors and is not standing for re-election.

  2. ELECTION OF DIRECTORS

    | Name | Age | Position with the Company(1) | Director Since | | Eric J. Dale | 59 | Director and Vice Chairman | 2008(2) | | Darryl M. Demos | 63 | Director | 2022 | | Blake S. Drexler | 66 | Director and Chairman | 2007(3) | | Jeffrey R. Dunne | 69 | Director | 2023 | | Christopher R. Gruseke | 63 | Director, President and CEO | 2015(4) | | Anahaita N. Kotval | 56 | Director | 2023 | | Todd H. Lampert | 60 | Director and Corporate Secretary | 2007(3) | | Kevin D. Leitão | 60 | — | — | | Carl M. Porto | 81 | Director | 2015 | | Lawrence B. Seidman | 76 | Director | 2020 |

  3. ELECTION OF DIRECTORS

    (1)All current directors hold the same position(s) at the Bank and Mr. Leitão, if elected as a director of the Company, will also be elected as a director of the Bank. (2)Director of the Bank of Fairfield from 2008-2013. As indicated above, present director of Bankwell Bank. (3)Director of the Bank of New Canaan from 2001-2013. As indicated above, present director of Bankwell Bank. (4)Director of the Bank of New Canaan from 2009-2011. Director of BNC Financial Group, Inc. from 2009-2012.

  4. Recommendation

    Recommendation The Board of Directors recommends that the shareholders vote “FOR” the nominees set forth above.

  5. INFORMATION ABOUT THE BOARD OF DIRECTORS

    INFORMATION ABOUT THE BOARD OF DIRECTORS The principal occupation and business experience for at least the last five years for our director nominees is included below. Unless otherwise indicated, principal occupations shown for each director have extended for five or more years. Eric J. Dale, Esq., Director, Vice Chairman of the Board. Mr. Dale joined RealTruck, Inc. as its General Counsel and Head of Real Estate Transactions effective April 2023. Prior to that, Mr. Dale served as a partner in Balance Point Capital, a middle market private equity and debt firm, from January 2019 through May 2022. Prior to Balance Point, Mr. Dale was an executive at Nielsen PLC (NYSE: NLSN) and served as that company's Chief Legal Officer from August 2015 through January 2019. Prior to joining Nielsen, Mr. Dale had been a Partner with the law firm of Robinson & Cole, LLP in Stamford, Connecticut since 2002. He was a director of a public company, Zerotree Technologies, Inc., from 2000 until its merger with e-Media, LLC in 2002. Mr. Dale joined our Board of Directors in 2008 and served on the board of The Bank of Fairfield from its organization until its merger with The Bank of New Canaan. Mr. Dale’s experience as an investor, as a lawyer in private practice and as a corporate general counsel provides our Board of Directors with valuable insight regarding business and legal matters. Darryl M. Demos, Director. Mr. Demos brings more than 30 years of experience in technology, data and consulting expertise across all major banking areas. Mr. Demos advises a range of technology, FinTech and other financial services organizations on technology, cost, human capital, leadership and strategic issues. From 2021 to 2022, Mr. Demos was an Executive Vice President for Curinos, a global provider of data technology to the financial services industry. Mr. Demos oversaw engineering, product management and client success areas, in addition to serving on the Executive Leadership Committee. Prior to Curinos, Mr. Demos spent 11 years as the General Manager (and a Board member) at Novantas, an industry leader in technology solutions and analytic advisory services for financial institutions. Prior to Novantas, he was the General Manager of Verint, a global technology and data company focused on customer engagement. He was a founder and CEO of Demos Solutions which was purchased by Verint in 2006. He began his career at KPMG, working in the audit and consulting divisions. Mr. Demos earned a B.A. from Williams College and an M.S. from the Stern School of Business at New York University and was a CPA for 10 years. Mr. Demos’ experience with data, cloud, cost management and technology issues and his substantial financial industry and banking knowledge and network provides our Board of Directors with valuable expertise on a wide range of mission critical topics. Blake S. Drexler, Director, Chairman of the Board. Mr. Drexler has been a portfolio manager with Mariner Capital since 2011. From 2004 to 2011, he was a private equity investor and partner in both 5-Mile Ventures and Great Point Partners, both located in Rowayton, Connecticut. He was previously Managing Director of Derivative Products at Greenwich Capital Markets for 22 years and a member of the Chicago Board of Trade, The Chicago Mercantile Exchange and the Chicago Board Options Exchange. Mr. Drexler joined our Board of Directors in 2001 and served on the board of The Bank of New Canaan from its organization. He served as Executive Chairman of the Company from August 2014 to February 2015. Mr. Drexler’s financial acumen and experience and his community involvement and leadership skills provide our Board of Directors with significant knowledge and expertise regarding the business and market area of the Bank. Jeffrey R. Dunne, Director. Mr. Dunne is a Vice Chairman at CBRE, Inc. and oversees the New York Capital Markets team that sells income producing multi-family, office, retail and industrial assets. The team’s business is largely transacted in the New York Region, although the group also sells portfolios throughout the United States. Mr. Dunne is active in various charity and community organizations and sits on the Board of Trustees of the Wakeman Boys & Girls Club, the Real Estate Advisory Board at Pennsylvania State University’s Smeal School of Business and Bishop Caggiano’s Real Estate Board. In 2012, Mr. Dunne was honored by the March of Dimes, receiving its annual Real Estate Award and in 2013, he received the Edward S. Gordon Award. He is a graduate of Pennsylvania State University and holds an MBA from New York University. Mr. Dunne's knowledge of local and national real estate markets, financial acumen and his community involvement and leadership skills provide our Board of Directors with knowledge and experience regarding the business and market area of the Bank. Christopher R. Gruseke, Director, President and Chief Executive Officer of the Company and the Bank. Mr. Gruseke was appointed to these positions and nominated as a director in February 2015. He joined the Company as Chief Strategic Officer in January 2015. He was a founding investor and director of Bankwell Financial Group’s predecessors, BNC Financial Group, Inc., and The Bank of New Canaan. He brings more than 25 years of capital markets, operations, sales and finance experience to his role at the Company. Most recently, he was a member of the Executive Committee at CRT Capital, a Stamford, Connecticut-based broker/dealer. He also served as Co-Chief Operating Officer and a member of the Board of Greenwich Capital Markets. Mr. Gruseke earned a B.A. from Williams College and an M.S. from the Stern School of Business at New York University. His familiarity with Bankwell’s market area and finance background are valuable to our Board of Directors. Anahaita N. Kotval, Esq., Director. Ms. Kotval has been the Chief Executive Officer of Lifting Up Westchester, Inc., a nonprofit that provides community based services to Westchester County residents experiencing homelessness and hunger, since 2017. She began her career as a prosecutor for the Enforcement Division of the SEC and then spent 13 years at the Royal Bank of Scotland, ultimately serving as Managing Director and General Counsel of its investment bank in the Americas, RBS Greenwich Capital. She transitioned to the non-profit sector in 2011 as the Chief Operating Officer and General Counsel at Inspirica, Inc., a Stamford, Connecticut based nonprofit focused on serving the homeless. She was a director of OneMain Holdings, Inc., a public consumer finance company, from 2012 to 2018, serving as Chair of its Compliance Committee, and on its Audit and Governance Committees. She is currently on the Board of the Pro Bono Partnership and Non-profit Westchester and the Advisory Board of the Tompkins Charitable Gift Fund, Inc. and has served on the boards of My Sister’s Place, the Westchester Community Foundation, the Fairfield County Community Foundation, the Women’s Bond Club of New York and the Legal and Compliance Division of the Securities Industry Financial Markets Association. Ms. Kotval received a B.S. magna cum laude in Applied Math and Economics from Brown University and a J.D. cum laude from Harvard Law School. Her legal background, extensive risk management, compliance and governance experience in the financial services industry, and community involvement make her a valuable addition to our Board of Directors. Todd H. Lampert, Esq., Director and Corporate Secretary. Mr. Lampert is the founder of and has been the managing member of the law firm of Lampert, Toohey & Rucci, LLC located in New Canaan, Connecticut, since its inception in 1993, where he is the head of the litigation department, representing banks and title companies in

  6. INFORMATION ABOUT THE BOARD OF DIRECTORS

    construction and real estate matters for over 30 years. From 1985 to 1987, Mr. Lampert was a stock broker with Series 7 and Series 63 licenses. He joined our Board of Directors in 2007 and served on the board of The Bank of New Canaan from its organization. Mr. Lampert also served on the board of directors of Waveny Health Care from 2012 to 2018 and was the Chairman from 2016 to 2018. In 2022, Mr. Lampert founded Recovery Education & Applied Learning, LLC, an online educational platform designed to help parents with adolescents and young adults struggling with addiction and substance use disorders. Mr. Lampert’s legal and community knowledge provide our Board of Directors with an understanding of legal and community issues. Kevin D. Leitão, Esq., Nominee. Mr. Leitão is the founder of Leitão Law LLC, in New Canaan, Connecticut. He has more than 30 years of experience as an in-house counsel, a compliance and risk management executive and in private practice. Mr. Leitão’s primary focus since 2000 has been on the integration of technology into the products and services offered by banks and other financial services companies, including regulatory compliance and information risk management advice on digital initiatives. His most recent in-house role was General Counsel of Hulett Bancorp and Summit National Bank which received approval from the OCC for new business activities involving FinTech platforms during his tenure. From 2018 to 2020, Mr. Leitão served as General Counsel at WebBank, where he was the executive owner of compliance and played a key role in managing lending platform relationships, product counseling, and supporting business development. Prior to founding Leitão Law in 2017, he was Of Counsel at Ballard Spahr, focused on digital financial services and information risk management. From 2013 to 2015, Mr. Leitão served as Associate General Counsel and Compliance Officer for the mobile wallet company, SoftCard (a joint venture of AT&T, Verizon Wireless and T-Mobile). His senior compliance roles also include serving as a Managing Director and Senior Compliance Officer at TIAA from 2008 – 2013 and Chief Compliance Officer for the Merrill Lynch Global Bank Group. Mr. Leitão began his career as a corporate and regulatory lawyer at LeBoeuf, Lamb in New York City. Mr. Leitão holds an A.B. from Brown University, a M.Phil. in Criminology from Cambridge University (as a recipient of a Marshall Scholarship from the UK government) and a J.D. from Yale Law School. Mr. Leitão’s broad and deep experience with financial technology, digital financial products, regulatory compliance and information risk management for banks and other financial services companies provides our Board of Directors with valuable expertise to support innovation initiatives and compliance and risk management matters. Carl M. Porto, Esq., Director. Mr. Porto is an attorney and former Managing Principal in the law firm of Parrett, Porto, Parese & Colwell, Professional Corporation, from 1969 to 2018, with offices in Hamden, Bridgeport and Guilford. Mr. Porto was formerly on the boards of The Bank of New Haven, Start Bank (n/k/a New Haven Bank), Citizens Bank of Connecticut and Citizens Bank of Rhode Island. He is a member of the Connecticut Bar Association and the New Haven County Bar Association. He received a B.A. from Boston University and a J.D. from the University of Connecticut School of Law. Mr. Porto's legal and business expertise are valuable to our Board of Directors. Lawrence B. Seidman, Director. Mr. Seidman has served as Manager of Seidman and Associates, LLC and related investment groups located in Parsippany, New Jersey, the principal business of which includes investments in financial institutions since 1995. Mr. Seidman formerly served on the board of Stonegate Bank from January 2009 to September 2018, ASB Bancorp Inc. and its wholly owned subsidiary, Asheville Savings Bank, from February 2016 to September 2018, Center Bancorp, Inc. from May 2007 to July 2014, Naugatuck Valley Financial Corporation from November 2014 to January 2016, MSB Financial Corp. and its banking subsidiary Millington Bank from July 2016 to July 2020. Mr. Seidman is a consultant to Malvern Bancorp, Inc. and its banking subsidiary, Malvern Bank and ARCTRUST Capital Advisors, L.P., a private Real Estate Investment Trust. Mr. Seidman’s many years of banking experience, both as a director and as an investor, are valuable to our Board of Directors.

  7. INFORMATION ABOUT MANAGEMENT

    INFORMATION ABOUT MANAGEMENT A brief description of the background of each of our executive officers who is not also a director nominee is set forth below. No executive officer has any family relationship, as defined in Item 401 of Regulation S-K, with any other executive officer or director. Steven H. Brunner, Executive Vice President and Chief Risk and Operations Officer of the Company and the Bank. Mr. Brunner, age 42, joined the Company in August 2022 as Senior Vice President and Chief Risk and Operation Officer. He became Chief Operations Risk and Officer in June 2023 and was promoted to Executive Vice President in January 2024. From 2021 to July 2022, he served as Global Head of Financial Crimes at Wex, Inc. a global financial technology payments company. From 2012 to 2021, Mr. Brunner held multiple compliance and risk management positions at Sterling National Bank, serving as BSA/AML/OFAC Compliance & Security Officer from 2017 until the bank’s merger with Webster Financial Bank. During his 9 years at Sterling National Bank, the bank grew its assets from $3 billion to over $30 billion. Prior thereto, Mr. Brunner held similar risk management roles at Ally Financial, Inc. (2011-2012) and AXA Equitable (2004-2011). Mr. Brunner earned his B.S. in Economic Crime Investigation, with a concentration in Computer Security from Utica University. Christine Chivily, Executive Vice President and Chief Credit Officer of the Company and the Bank. Ms. Chivily, age 65, joined the Company in April 2013. She has over 40 years of experience in banking and real estate finance. She previously served in a risk management role for the CRE and C&I loan portfolios at People's United Bank. Her prior experience also includes five years as Director of Freddie Mac’s New England region for multifamily properties and 11 years as Senior Credit Officer at RBS Greenwich Capital. She also has over 10 years of combined experience in lending, loan administration and workouts at other various banking institutions. Ms. Chivily serves on the Board of Inspirica, Inc. Ms. Chivily received her B.A. from Mt. Holyoke College. Ryan J. Hildebrand, Executive Vice President and Chief Innovation Officer of the Company and the Bank. Mr. Hildebrand, age 41, joined the Company in June 2023. Prior to joining the Company, from 2021 to 2023, he served as the Strategic Innovation Officer at Lincoln Savings Bank and as the President of Lincoln Savings Bank’s financial technology subsidiary, LSBX, which experienced significant deposit and revenue growth under his leadership. Prior to this role, Mr. Hildebrand held the position of Head of Fintech Banking at Cross River Bank, which established numerous new partnerships during his tenure from 2019 to 2021. In 2013, he co-founded Seed, the pioneering business neobank, which he later sold to Cross River Bank in 2019. Before that, Mr. Hildebrand was Head of Finance and Strategy at Simple Bank from 2011 to 2013, where he played an integral role in its sale to Banco Bilbao Vizcaya Argentaria (BBVA). Mr. Hildebrand received his B.A. in Accounting from Oregon State University. Matthew McNeill, Executive Vice President and Chief Banking Officer of the Company and the Bank. Mr. McNeill, age 48, joined the Company in March 2020. He has more than 20 years of experience in Commercial Banking. He most recently served as Head of Commercial Lending at Metropolitan Commercial Bank. During his 7 years at Metropolitan Commercial Bank the bank grew its lending assets from $400 million to over $3 billion. Mr. McNeill has additionally held lending roles at HSBC Bank US and Banco Santander. Mr. McNeill has also served as Managing Partner at American Real Estate Lending, a Commercial Real Estate finance company. Courtney E. Sacchetti, Executive Vice President and Chief Financial Officer of the Company and the Bank. Ms. Sacchetti, age 48, joined the Company in January 2017 and served as Director of Financial Planning & Analysis for the Company through December 2022. She was appointed CFO and EVP of the Bank and Company effective January 1, 2023. Ms. Sacchetti has more than 20 years of experience in finance. Prior to her joining Bankwell, she spent 18 years at GE Capital, joining the company’s Financial Management Program (FMP). Ms. Sacchetti serves on the Board of Trustees for Cheshire Academy (Cheshire, CT). She received her B.A. and MBA from Union College.

  8. Director Compensation

    Director Compensation We believe that to successfully recruit and retain talented directors of the caliber needed to effectively direct the Company, our director compensation package should be highly competitive compared to our peer group. We consider institutions of similar asset size located in the Northeastern region of the United States to be the peer group. Additional public survey data may be consulted to assist us in determining competitive director compensation. We also believe that director compensation should serve to solidify the alignment of the shareholders' interests with that of our Board of Directors and relate to our success or the success of us or our affiliates. The board and committees of the Company and the Bank (collectively, “Bankwell”) meet jointly and we pay a combined fee for service on both. We pay each director (other than our CEO) an annual retainer for services on the Board of Directors and Committees. The Chairman of the Board, Vice Chairman and the Chairs of each committee receive an additional retainer for their service in such capacity. This compensation was recommended by the Compensation Committee and approved by our Board of Directors after careful and extended evaluation and consideration of the results of the competitive review of director compensation completed by the independent compensation consultant hired by the Compensation Committee to review our Board of Directors' compensation relative to its peer group. We established the Bankwell Deferred Compensation Plan for Directors, or the Directors Plan, in 2008, which was amended and restated in 2023 to comply with recent SEC rule changes. This non-qualified deferred compensation plan is designed to enable non-employee directors to defer receipt of cash compensation on a tax-advantaged basis. Non-employee directors may elect to defer all (and not less than all) of such director’s cash compensation for a calendar year. Amounts deferred under the Directors Plan are credited to a book account and deemed invested in the Company’s common stock. The Directors Plan is indirectly funded through a so-called “Rabbi Trust,” which is administered by an independent third party trustee. Funds held in the Rabbi Trust are invested in our common stock through open market purchases by the trustee. A director’s deferred compensation is paid (in common stock) following retirement, except under certain specified circumstances that permit earlier payment, including a severe financial hardship resulting from illness or accident, loss of property or other similar extraordinary and unforeseeable circumstances. Each non-employee director also receives an annual restricted stock award as recommended by the Compensation Committee and approved by the Board of Directors. In 2023, the Board of Directors approved grants of 1,600 shares of common stock to each director. Prior years' grants vested in four annual installments, but in 2023, the Compensation Committee determined to vest all restricted stock grants in three annual installments. Accordingly, the 2023 annual director grant vests in three substantially equal annual installments commencing on February 7, 2025. In addition, for his service as Corporate Secretary, Mr. Lampert received an annual restricted stock award of 400 shares of common stock, granted on February 7, 2024 and which vests on the anniversary of the effective date of the grant. On December 29, 2023, the Compensation Committee recommended (after consultation with the Company’s independent compensation consultants) and the Board of Directors approved a special one-time grant of 2,500 shares of common stock for each non-employee director, in recognition of the industry complexity and significant additional time commitment required from directors in 2023 due to general economic conditions and industry events. One third of this special grant vested on December 29, 2023, one third vested on February 7, 2024, and the remaining balance will vest February 7, 2025. The following table sets forth for the year ended December 31, 2023, the compensation paid or awarded by the Company and Bank to each person who served as a director during 2023 (other than Mr. Gruseke, our Chief Executive Officer, whose compensation is presented in the Summary Compensation Table).

  9. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Total Compensation ($)(3) | | George P. Bauer(4) | 17,292 | — | 17,292 | | Gail E.D. Brathwaite | 56,800 | 123,738 | 180,538 | | Richard E. Castiglioni(4) | 27,708 | — | 27,708 | | Eric J. Dale | 84,000 | 123,738 | 207,738 | | Darryl M. Demos | 46,800 | 123,738 | 170,538 | | Blake S. Drexler | 138,250 | 123,738 | 261,988 | | Jeffrey R. Dunne | 42,083 | 123,738 | 165,821 | | James M. Garnett, Jr.(5) | 57,467 | 123,738 | 181,205 | | Anahaita N. Kotval | 25,375 | 123,738 | 149,113 | | Todd H. Lampert | 79,375 | 123,738 | 203,113 | | Victor S. Liss(4) | 31,792 | — | 31,792 | | Carl M. Porto | 55,792 | 123,738 | 179,530 | | Lawrence B. Seidman | 59,800 | 123,738 | 183,538 | | Total | 722,534 | 1,237,380 | 1,959,914 |

  10. Director Compensation

    (1)Stock awards represent the aggregate fair market value on the date of the grant for any grants made during 2023 and excludes any stock vesting from grants made prior to 2023. (2)As of December 31, 2023, each director had the following number of unvested shares under restricted stock awards outstanding: Bauer (6,740), Brathwaite 9,127), Castiglioni (7,620), Dale (10,887), Demos (4,867), Drexler (10,887), Dunne 3,267), (Garnett 9,127), Kotval (3,267), Lampert (11,287), Liss (7,620), Porto (9,127), and Seidman (7,067). (3)Compensation in the form of perquisites and other personal benefits provided by the Company has been omitted for each director as the total amount of those perquisites and personal benefits for each constituted less than $10,000 for the year ended December 31, 2023. (4)Mr. Bauer, Mr. Castiglioni, and Mr. Liss did not stand for reelection at the 2023 annual meeting and, accordingly, their terms as directors ended on May 31, 2023. Ms. Kotval was elected at the 2023 annual meeting. (5)Mr. Garnett passed away in February 2024 and all of his unvested restricted stock has fully vested. Directors are entitled to the protection provided by the indemnification provisions in the Company's current certificate of incorporation and bylaws, the certificate of incorporation and bylaws of the Bank, as well as individual indemnification agreements.

  11. 2023 Compensation Highlights

    2023 Compensation Highlights Our executive compensation program has three primary elements: base salary, annual incentives, and long-term equity incentives. Each of these compensation elements serve 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 sustainable shareholder value creation. Based on our performance and consistent with the design of our program, the Compensation Committee made the following executive compensation decisions for fiscal 2023: •Base Salaries. For 2023, the Compensation Committee approved a merit-based salary increase of 5.0% for Mr. Gruseke, 5.9% for Mr. McNeill, 3.2% for Ms. Chivily, and 9.7% for Ms. Waitz. •Annual Cash Bonus. Based on the Company’s performance in 2023 as measured against our strategic and financial goals for the year, the Compensation Committee granted bonuses to Messrs. Gruseke and McNeill and Ms. Chivily as detailed in the Summary Compensation Table. Ms. Waitz, whose employment ended on June 3, 2023, was paid a pro rata portion of her 2023 target bonus under the terms of her employment agreement as set forth in the Summary Compensation Table. •Long-Term Equity Incentives. In 2023, the Compensation Committee approved restricted stock awards to the NEOs based on the Compensation Committee’s assessment of the Company’s 2022 financial performance, competitive positioning and individual performance. Half of the awards vest in 1/3 increments on each of the first three anniversaries of the date of grant. The remaining 50% of the awards are performance-based awards. Each year following the performance-based grant, 1/3 of these shares are eligible to vest. Each 1/3 may vest within a minimum of 0% to a maximum of 200% of the original number of shares in the tranche. The Compensation Committee will determine the percentage of these awards that will vest based on an assessment of the Company’s performance against key benchmarks including Return on Average Assets and such other financial performance measures as determined by the Compensation Committee in its discretion. The Committee considers the Company’s performance both against its internal budgets as well as against similar community banking institutions. In addition, the Compensation Committee, in conjunction with Pearl Meyer & Partners, LLC the Company’s independent compensation consultant, has done a significant review of compensation practices with respect to executive pay. The Compensation Committee has adopted a more formulaic approach in 2024 based on specific performance metrics for determining both annual cash bonus and long term equity incentive awards.

  12. Best Compensation Practices & Policies

    | What We Do | | What We Don’t Do | | | ✓ | Emphasize variable pay over fixed pay, with a significant portion tied to performance | ✓ | No tax gross ups | | ✓ | Provide for “double-trigger” severance benefits upon a change in control | ✓ | No repricing or exchange of underwater options without shareholder approval | | ✓ | Maintain executive share ownership/retention policy | ✓ | No option or stock appreciation rights granted below fair market value | | ✓ | Maintain an anti-hedging and anti-pledging policy | ✓ | No significant perquisites | | ✓ | Use an independent compensation consultant | | | | ✓ | Maintain a "clawback" policy | | |

  13. The Decision-Making Process

    The Decision-Making Process The Role of the Compensation Committee. The Compensation Committee, which is comprised solely of independent directors, oversees the compensation program for our executives, including our named executive officers. The Compensation Committee works very closely with an independent compensation consultant and management to examine the effectiveness of our executive compensation program throughout the year. The Compensation Committee makes all final compensation and equity award decisions regarding our named executive officers. The Chief Executive Officer is not present during voting or deliberations on his compensation. The Role of Management. Members of our management team attend regular meetings where executive compensation, corporate and individual performance, and competitive compensation levels and practices are discussed and evaluated. Only the Compensation Committee members are allowed to vote on decisions regarding executive officer compensation. The Chief Executive Officer reviews his recommendations pertaining to all executives’ pay with the Compensation Committee, which provides transparency and oversight. The Role of the Independent Consultant. The Compensation Committee engages an independent compensation consultant to provide expertise on competitive pay practices, program design, and an objective assessment of any inherent risks of any programs. Pursuant to authority granted to it under its charter, the Compensation Committee has hired Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its independent consultant. Pearl Meyer is retained by, and reports directly to, the Compensation Committee, and provided no other services to the Company. Based on standards promulgated by the SEC and Nasdaq to assess compensation advisor independence, as well as the analysis conducted by Pearl Meyer in its independence review, the Compensation Committee has concluded that Pearl Meyer is an independent and conflict-free advisor to the Compensation Committee. The Role of Peer Group Companies. The Compensation Committee strives to set a competitive level of total compensation for each executive officer as compared with executive officers in similar positions at peer companies. For purposes of setting 2023 compensation levels, the Compensation Committee considered publicly available data from industry compensation surveys and public filings from the group of peer companies listed below. Industry survey data was collected from surveys of financial institution holding companies or financial institutions with an asset size ranging from approximately $1.1-$6.7 billion, reflecting approximately 0.3x – 2.0x the Company’s current assets. Selection criteria also included companies with comparable business models that are located in the Northeast or Mid-Atlantic U.S.

  14. The Decision-Making Process

    This peer group has been updated from the peer group disclosed in the 2023 Proxy Statement. Seven banks have been removed from the prior year’s group, either due to consolidation or a lack of alignment with the Bank’s business model, and replaced with seven banks that meet our previously described criteria. It is important to note that this market data is not the sole determinant in setting pay levels for our executive officers. The Compensation Committee also considers corporate and individual performance and the nature of an individual’s role with the Company, as well as the individual’s experience and contributions to their current role when making its compensation-related decisions.

  15. Executive Cash Bonus Program

    Executive Cash Bonus Program The Company’s executive bonus program, which is administered by the Compensation Committee, is designed to provide cash compensation to our executive management for achieving the Company’s annual financial goals and strategic initiatives. Actual award payouts depend on the Compensation Committee’s assessment of achievement of financial, operating and individual performance goals and can range from 0% to 200% of the target award opportunity. Target award opportunities, which are set forth in each executive’s employment agreement, are expressed as a percentage of base salary as follows:

  16. Executive Cash Bonus Program

    | Name | 2023 Base Salary ($) | Target Award Opportunity (as a % of Base Salary) | Target Award Opportunity ($) | | Christopher R. Gruseke | 630,000 | 45% | 283,500 | | Matthew McNeill | 450,000 | 40% | 180,000 | | Christine Chivily | 320,000 | 30% | 96,000 | | Laura J. Waitz | 340,000 | 30% | 102,000 |

  17. Executive Cash Bonus Program

    Annual cash bonuses are an integral part of the Company’s compensation program and are intended to reward executives for achieving annual financial and strategic goals. Awards are based upon specific operating results and individual performance. Accordingly, when making final award decisions, the Compensation Committee takes a holistic view of performance results and considers the following key factors: •Relative financial performance; •Financial performance compared to prior year and internal budget expectations; •General economic conditions and degree of difficulty in attaining budget goals; •One time, or non-recurring events, whether positive or negative; and •Input from the Chief Executive Officer on the individual performance of the other NEOs. In addition to the compensation peer group described above, the Compensation Committee uses various other groups of competitors against which it tracks and assesses our relative performance to ensure a balanced perspective (i.e., regulatory, business/strategy mode, geographic, etc.). The Compensation Committee may use its business discretion to increase or decrease the recommended bonuses based on all available information, including performance relative to peers, individual performance, and any other relevant factor. 2023 Results and Award Payouts. For 2023, actual annual bonus award payouts were based on a combination of specific financial results and strategic achievements as assessed by the Compensation Committee. In conducting its assessment, the Committee considered 2023 performance in the following areas: •Return on average assets: 1.13% •Return on average tangible common equity: 14.70% •Noninterest expense to average assets: 1.55% •Net interest margin: 2.98% •Total capital ratio (Bank): 12.32% •CET1 ratio (Company): 9.28% •Fully diluted tangible book value: $33.39 Based on our performance described above, the Compensation Committee approved annual incentive awards for Messrs. Gruseke and McNeill and Ms. Chivily as indicated below. Ms. Waitz received a pro rata portion of her target award in accordance with the terms of her employment agreement.

  18. Executive Cash Bonus Program

    | Name | Target Award Opportunity (as a % of Base Salary) | Target Award Opportunity ($) | Actual Award (as a % of Target Award) | Actual Award ($) | | Christopher R. Gruseke | 45% | 283,500 | 123% | 350,000 | | Matthew McNeill | 40% | 180,000 | 153% | 275,000 | | Christine Chivily | 30% | 96,000 | 130% | 125,000 | | Laura J. Waitz* | 30% | 102,000 | 43%* | 43,595 |

  19. Executive Cash Bonus Program

    *Ms. Waitz's employment ended on June 3, 2023. She was paid a pro rata portion of her target award (based on her days of service in 2023) under the terms of her employment agreement.

  20. Long-Term Equity Incentive Plan

    Long-Term Equity Incentive Plan In 2022, our Board of Directors unanimously adopted, and shareholders approved, the 2022 Bankwell Financial Group, Inc. Stock Plan (the “2022 Plan”). The 2022 Plan replaced the 2012 Stock Plan (the “2012 Plan”), which expired on September 19, 2022. No further awards may be issued under the 2012 Plan, but all awards under the 2012 Plan that are outstanding will continue to be governed by the terms, conditions and procedures set forth in the 2012 Plan and any applicable award agreement. The 2022 Plan is designed to promote the long-term growth and profitability of the Company, attract and retain individuals of outstanding competence, and provide participants with incentives that are closely linked to the interests of all Company shareholders. The stock-based awards granted under the 2022 Plan align the interests of executives with those of shareholders. When the Company performs well, executives are rewarded along with other shareholders. We also believe that stock-based awards are of great value in recruiting and retaining highly qualified personnel who are in great demand. Annual long term equity awards reflect the executive’s position with the Company and his or her contribution to the Company. The Compensation Committee generally grants equity awards in the first quarter of each year in recognition of prior year performance (which coincides with base salary adjustments and incentive bonus awards), but may grant awards at any time, including in connection with an individual’s initial employment with the Company, a subsequent promotion or in recognition of specific achievements. Historically, the Committee has established the value of the annual award utilizing a range of 0 to 200% of the Target Equity Award. The Target Equity Award is based on a percentage of the executive’s base salary, which, in the case of Messrs. Gruseke and McNeill is set forth in each executive’s employment agreement. During 2023, the Compensation Committee approved restricted stock grants to the NEOs, half of which vest based on service and half of which vest based on the achievement of the performance goals, as follows:

  21. Long-Term Equity Incentive Plan

    | Name | Target Value ($) | Service-Vesting Restricted Stock (# of Shares) | Performance-Vesting Restricted Stock (# of Shares) | | Christopher R. Gruseke | 467,378 | 7,772 | 7,771 | | Matthew McNeill | 336,333 | 5,593 | 5,592 | | Christine Chivily | 137,991 | 2,295 | 2,294 | | Laura J. Waitz* | 12,930 | 3,060 | 3,060 |

  22. Long-Term Equity Incentive Plan

    *Ms. Waitz's employment ended on June 3, 2023. Under the terms of the 2023 restricted stock agreement, she vested in a pro rata portion of the performance-vesting shares (430 shares) granted in 2023 and forfeited 3,060 service-vesting shares and 2,629 performance-vesting shares. Restricted stock awards are intended to provide the NEOs with a direct ownership interest in the Company during the vesting period and also support the Company’s leadership retention objectives. Awards which vest based on service vest in 1/3 increments on each of the first three anniversaries of the date of grant. The remaining 50% of the awards are performance-based awards. Each year following the performance-based grant, 1/3 of these shares are eligible to vest. Each 1/3 may vest within a minimum of 0% to a maximum of 200% of the original number of shares in the tranche. The Compensation Committee will determine the percentage of these awards that will vest based on an assessment of the Company’s performance against key benchmarks including Return on Average Assets and such other financial performance measures as determined by the Compensation Committee in its discretion. The Committee considers the Company’s performance both against its internal budget as well as against similar community banking institutions. Target award amounts for restricted stock awards set forth in the above table were determined based on the closing price of our common stock on the date of the grant on January 25, 2023, which was $30.07. More information about equity awards made during 2023 is set forth in the “Outstanding Equity Awards at 2023 Fiscal Year End” Table that follows. As noted, prior year equity grants vest in three annual installments, with the vesting percentage of performance- vesting restricted stock determined on an annual basis. The table below details target and actual performance-vesting restricted stock grants for 2023 and prior years that vested in 2023 based on the Compensation Committee’s assessment of the Company’s performance in 2022 or 2023 against benchmarks determined by the Compensation Committee in its discretion. The grants of these restricted shares were disclosed in the Summary Compensation Tables in the years of the respective grants. Performance shares vesting in 2023 based on 2022 performance vested at 200% of the target and performance shares vesting in 2023 based on 2023 performance vested at 100% of the target.

  23. Long-Term Equity Incentive Plan

    | Name | Number of Performance-Vesting Restricted Stock at Target Which Vested in 2023 (# of Shares) | Value of Performance-Vesting Restricted Stock at Target which Vested in 2023 ($) | Number of Performance-Vesting Restricted Stock Above Target which Vested in 2023 (# of Shares) | Value of Performance-Vesting Restricted Stock Above Target which Vested in 2023 ($) | | Christopher R. Gruseke (1) | 7,047 | 211,869 | 3,847 | 115,869 | | Matthew McNeill | 2,960 | 89,061 | 2,960 | 89,061 | | Christine Chivily | 2,990 | 84,673 | 2,990 | 84,673 | | Laura J. Waitz | 2,157 | 63,402 | 2,157 | 64,364 |

  24. Long-Term Equity Incentive Plan

    (1) Mr. Gruseke’s Performance-Vesting Restricted Stock Above Target included 3,847 shares based on the Company’s 2022 performance and 3,200 shares based on the Company’s 2023 performance.

  25. Executive Employment Agreements

    Executive Employment Agreements The Company has entered into employment agreements with each Bankwell executive in connection with their initial employment or promotion to an executive position. These agreements are designed to promote stability and continuity of senior management who are critical to the Company’s continued success. The employment agreements with Bankwell executives provide that, during the term of the contract, the executive’s base salary will not be reduced and the executive will remain eligible for participation in the Company’s executive incentive compensation (including its Long-Term Equity Plan) and benefit programs. Each agreement specifies the executive’s target annual bonus opportunity expressed as a percentage of base salary (45% for Mr. Gruseke, 40% for Mr. McNeill, 30% for Ms. Chivily, and 30% for Ms. Waitz). Mr. Gruseke’s agreement provides for a rolling three-year term and automatically renews for successive three-year terms on each successive January 5th unless either the Company or Mr. Gruseke has given the other written notice of election not to renew at least 90 days prior to the January 5th anniversary date. Mr. McNeill’s and Ms. Chivily's agreements provide for a one-year term with both renewing annually for successive one-year terms on January 1st of each successive year, provided the Company gives the executive written notice of its election to extend for an additional one year by October 1st of the current year. Ms. Waitz's agreement provided for a rolling two year term. Each executive is also subject to non-compete and non-solicitation covenants for the six months (12 months in the case of Mr. Gruseke) following termination.

  26. Other Benefits

    Other Benefits In addition to the plans described above and the severance benefits described below under “Severance Benefits”, our executives are also entitled to benefits that are available to all of our employees. These include medical and dental benefits, group term life insurance, and short- and long-term disability protection. In addition, our named executive officers are provided supplemental disability benefits and split-dollar life insurance with a maximum $250,000 benefit. The economic benefit of employer-paid premiums for split-dollar life insurance agreements and group term life insurance are disclosed under “All Other Compensation” in the Summary Compensation Table.

  27. Severance Benefits

    Severance Benefits We believe that companies should provide reasonable severance benefits to employees. With respect to executive management, these severance benefits should reflect the fact that it may be difficult for the employee to find comparable employment within a short period of time. Therefore, the employment agreements with Messrs. Gruseke and McNeill and Mses. Chivily and Waitz provide for severance benefits in the event of the executive’s involuntary termination of employment without cause or termination of employment by the executive for “Good Reason” (as defined in the agreements) and provide increased benefits in the case of termination in connection with a Change in Control (as defined in the agreements). In the event of a qualified termination, we also provide COBRA reimbursement based on the difference between active participant cost and COBRA cost for between one and two years, and, in the event of a Change in Control, immediately vest all equity compensation of the executive. In addition, terminated executives would be entitled to receive any benefits that they otherwise would have been entitled to receive under our 401(k) plan. Certain payments may be delayed for six months following termination to the extent necessary to comply with Section 409A of the Internal Revenue Code. Severance Benefits absent a Change in Control. Mr. Gruseke’s agreement provides for severance in the event of termination of his employment by the Company without cause or by Mr. Gruseke for “Good Reason.” Such severance is equal to the sum of (i) two times the sum of his then current base salary and annual bonus and any other cash compensation earned for the calendar year prior to the calendar year in which the termination occurs; and (ii) the value of equity awards that are forfeited as a result of such termination. In addition, he would be entitled to receive a pro rata annual bonus that he would have earned for the year in which the termination occurs, based upon achievement of applicable performance goals for such year, payable when annual bonuses are paid to the Company’s similarly situated executives. The agreements with both Mr. McNeill and Ms. Chivily entitle the executive to severance in the event of termination of the executive’s employment by the Company without cause or by the executive for “Good Reason” (including failure to extend the term) equal to (i) one times the executive’s then current base salary plus (ii) a pro rated target bonus for the year of termination. Ms. Waitz’s agreement provided for severance in the event of termination of her employment by the Company without cause or by her for “Good Reason” (including failure to extend the term) consisting of (i) a lump sum payment of two (2) times her annual salary plus (ii) a pro rated target bonus for the year of termination. The Company terminated Ms. Waitz’s employment effective June 3, 2023. The Company paid her severance in accordance with her employment agreement, which is reflected under “All Other Compensation” in the Summary Compensation Table. Severance Benefits in Connection with a Change in Control. All of the Change in Control benefits are “double trigger” and require termination of employment in connection with a Change in Control. Accordingly, no change in control benefits are paid to an executive unless his or her employment is terminated without cause or the executive resigns for “Good Reason” within 24 months of the Change in Control. Mr. Gruseke’s agreement provides payments in an amount equal to three (3) times his average annual compensation that was includible in his gross income for the immediately preceding five (5) taxable years if his employment is terminated without Cause or he terminates his employment for “Good Reason” within 24 months of a Change in Control. If the Change in Control payments to him would subject him to the excise tax under Internal Revenue Code Section 280G (the “280G Excise Tax”), then: (i) such payments will be reduced by the minimum amount required so that no amount payable to Mr. Gruseke will be subject to the 280G Excise Tax or (ii) at Mr. Gruseke’s option, he can elect to receive the full amount of the such payments and be subject to and responsible for the payment of all taxes of any kind payable thereon, including the 280G Excise Tax. Employment agreements with Mr. McNeill and Ms. Chivily provide for Change in Control protection consisting of a lump sum payment of (i) two (2) times the sum of the executive’s annual salary and target bonus plus (ii) a pro rated target bonus for the year of termination. The agreements also provide that if the Change in Control payments exceed the limit on such payments pursuant to Internal Revenue Code Section 280G, the executive shall receive the greatest of the following, whichever gives the executive the highest net after-tax amount (after taking into account federal, state, local and social security taxes): (i) the Change in Control payments or (ii) one dollar less than the amount of such payments that would subject the executive to the 280G Excise Tax. Relative to the overall value of the Company, these potential change in control benefits are relatively minor. The Compensation Committee regularly reviews the aggregate amount of all our Change in Control obligations and, based upon advice historically provided by both its independent compensation consultant and investment bankers, has determined that the potential Change in Control benefits under our existing plans and agreements fall within an appropriate range of deal value.

  28. Risk Assessment

    Risk Assessment The Company’s existing governance and organizational structure incorporates a substantial risk management component through the retention of an independent accounting firm (separate from the Company’s auditors) that performs internal audit reviews, the utilization of ALCO and a Directors Loan Committee, both comprised of independent directors of the Company. In connection with the design and approval of our incentive programs, management and, in the case of executive incentive plans, the Compensation Committee, regularly evaluate whether the program is likely to encourage employees to take excessive or imprudent risk. The Compensation Committee has concluded that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on our business. Although a material portion of our executive compensation program is performance-based, the Committee has focused on aligning our compensation policies with the long-term interests of our shareholders and avoiding rewards that could create excessive or inappropriate risks to the Company, as evidenced by the following: •Our executive compensation program reflects an appropriate mix of compensation elements and balances current and long-term performance objectives, cash and equity compensation, and risks and rewards associated with executive roles. •We use a variety of performance goals that are consistent with our business objectives, measure performance from different and balanced perspectives, and correlate to long-term value. These goals directly tie to our audited financial statements and are reviewed by our accounting department as well as our external auditors. •Our performance goals are tied to our annual budget and set at levels that we believe are reasonable in light of past and expected performance and market conditions. •Equity incentive awards generally vest over a period of three years, in order to focus our executives on long-term performance and to enhance retention. Vesting requirements encourage executives to avoid short-term actions that are to the Company’s long-term detriment. •Our stock retention guidelines require executives to retain all vested restricted stock (net of shares withheld for or used to pay taxes) until they achieve the specified ownership level and thereafter maintain such ownership level. These guidelines subject executives to the possibility of significant market penalties in the event they make decisions that benefit the Company in the short-term but ultimately prove detrimental to the Company’s long-term interests.

  29. Summary Compensation Table

    Summary Compensation Table The following table provides information regarding the total compensation of our CEO and the Company’s two most highly compensated executive officers other than the CEO who were serving as executive officers as of December 31, 2023 and each former executive officer, who would have been one of the two most highly compensated executives but for the fact that such individual was no longer employed by the Company on December 31, 2023 (collectively, the “Named Executive Officers” or “NEOs”) for our fiscal years ended December 31, 2023 and 2022. Except as set forth in the notes to the table, all cash compensation for each of our NEOs was paid by the Bank, where each serves in the capacity indicated below at both the Company and the Bank.

  30. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | | Christopher R. Gruseke President and CEO | 2023 | 630,000 | 350,000 | 467,378 | 15,033 | 1,462,411 | | | 2022 | 600,000 | 540,000 | 422,899 | 14,660 | 1,577,559 | | Matthew McNeill EVP and Chief Banking Officer | 2023 | 450,000 | 275,000 | 336,333 | 11,268 | 1,072,601 | | | 2022 | 425,000 | 340,000 | 310,633 | 10,453 | 1,086,086 | | Christine Chivily EVP and Chief Credit Officer | 2023 | 320,000 | 125,000 | 137,991 | 22,607 | 605,598 | | | 2022 | 310,000 | 162,750 | 298,366 | 18,678 | 789,794 | | Laura J. Waitz EVP and Chief Operating Officer(4) | 2023 | 155,769 | 43,595 | 12,930(4) | 690,696 | 902,990 | | | 2022 | 310,000 | 186,000 | 298,366 | 15,422 | 809,788 |

  31. Summary Compensation Table

    (1)These amounts represent cash bonus incentives earned for performance in 2023 and 2022, respectively, and paid in the subsequent year. (2)These amounts represent the aggregate fair market value of shares granted (calculated in accordance with FASB ASC Topic 718) made to the Named Executive Officers named above, in all cases pursuant to the Company’s stock plans. All shares granted represent unvested restricted stock that will vest in accordance with the terms of the grant. The value of restricted stock awards that vest based on achieving performance measures (“performance shares”) is based on the target number of performance shares granted. The value of the award at grant date assuming the highest level of performance conditions will be achieved (200%) will be as follows:

  32. Summary Compensation Table

    | Named Executive Officer | 2023 Stock Awards Maximum Value ($) | 2022 Stock Awards Maximum Value($) | | Christopher R. Gruseke | 701,067 | 634,349 | | Matthew McNeill | 504,400 | 465,950 | | Christine Chivily | 206,987 | 447,549 | | Laura J. Waitz | 25,860 | 447,549 |

  33. Summary Compensation Table

    (3)The 2023 amounts listed represent: For Mr. Gruseke, a $9,150 matching contribution made by the Company under the Company’s 401(k) Plan, a $3,564 life and AD&D insurance premium and $2,319 in BOLI imputed income; for Mr. McNeill, a $9,900 matching contribution made by the Company under the Company’s 401(k) Plan, a $810 life and AD&D insurance premium and $558 in BOLI imputed income; for Ms. Chivily, a $9,900 matching contribution made by the Company under the Company’s 401(k) Plan, a $6,858 life and AD&D insurance premium and $1,249 in BOLI imputed income; and for Ms. Waitz, $680,000 is severance paid under terms of her employment agreement, a $3,894 matching contribution made by the Company under the Company’s 401(k) Plan, a $1,645 life and AD&D insurance premium and $557 in BOLI imputed income. (4)Ms. Waitz's employment terminated on June 3, 2023. Value of Stock Awards granted in 2023 is net of forfeitures resulting from her termination of employment.

  34. Outstanding Equity Awards at 2023 Fiscal Year-End

    Outstanding Equity Awards at 2023 Fiscal Year-End The following table provides information regarding outstanding equity awards held by each of our named executive officers on December 31, 2023. There are no option awards outstanding as of December 31, 2023.

  35. Outstanding Equity Awards at 2023 Fiscal Year-End

    | | | Stock awards | | | | | Name | Grant Date | Number of shares or units of stock that have not vested (#)(1) | Market value of shares or units of stock that have not vested ($)(2) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)(3) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)(2)(3)(4) | | Christopher R. Gruseke(5) | 1/4/2021 | 1,789 | 53,992 | 1,789 | 53,992 | | | 1/13/2022 | 4,111 | 124,070 | 4,110 | 124,040 | | | 1/25/2023 | 7,772 | 234,559 | 7,771 | 234,529 | | Matthew McNeill(6) | 1/4/2021 | 1,448 | 43,701 | 1,448 | 43,701 | | | 1/13/2022 | 3,020 | 91,144 | 3,019 | 91,113 | | | 1/25/2023 | 5,593 | 168,797 | 5,592 | 168,767 | | Christine Chivily(7) | 1/4/2021 | 972 | 29,335 | 971 | 29,305 | | | 1/13/2022 | 1,370 | 41,347 | 1,370 | 41,347 | | | 7/1/2022 | 1,667 | 50,310 | 1,667 | 50,310 | | | 1/25/2023 | 2,295 | 69,263 | 2,294 | 69,233 | | Laura Waitz(8) | 1/4/2021 | — | — | 410 | 12,374 | | | 1/13/2022 | — | — | 289 | 8,722 | | | 7/1/2022 | — | — | 352 | 10,623 | | | 1/25/2023 | — | — | 430 | 12,977 |

  36. Outstanding Equity Awards at 2023 Fiscal Year-End

    (1)Reflects unvested service-based vesting shares (“time-based shares”). All time-based shares vest in three substantially equal annual installments commencing on the initial vesting date. (2)The closing price market value per share on December 31, 2023 was $30.18 per share. (3)Reflects performance-based vesting shares ("performance shares"). With respect to performance shares, 1/3 of each grant is eligible to vest each year in the applicable three-year performance period at between 0% to 200% of each such tranche as determined by the Compensation Committee’s assessment of Company performance against key benchmarks selected by the Compensation Committee. (4)Assumes target payouts for all performance shares. (5)Mr. Gruseke was awarded the following restricted stock grants:

  37. Outstanding Equity Awards at 2023 Fiscal Year-End

    | Grant Date | Grant Date Per Share Value | Time-Based Shares | Performance Shares | Time-Based Initial Vesting Date | | 1/4/2021 | $18.97 | 5,371 | 5,371 | 1/2/2022 | | 1/13/2022 | $34.29 | 6,167 | 6,166 | 2/7/2023 | | 1/25/2023 | $30.07 | 7,772 | 7,771 | 2/7/2024 |

  38. Outstanding Equity Awards at 2023 Fiscal Year-End

    (6)Mr. McNeill was awarded the following restricted stock grants:

  39. Outstanding Equity Awards at 2023 Fiscal Year-End

    | Grant Date | Grant Date Per Share Value | Time-Based Shares | Performance Shares | Time-Based Initial Vesting Date | | 1/4/2021 | $18.97 | 4,348 | 4,348 | 1/2/2022 | | 1/13/2022 | $34.29 | 4,530 | 4,529 | 2/7/2023 | | 1/25/2023 | $30.07 | 5,593 | 5,592 | 2/7/2024 |

  40. Outstanding Equity Awards at 2023 Fiscal Year-End

    (7)Ms. Chivily was awarded the following restricted stock grants:

  41. Outstanding Equity Awards at 2023 Fiscal Year-End

    | Grant Date | Grant Date Per Share Value | Time-Based Shares | Performance Shares | Time-Based Initial Vesting Date | | 1/4/2021 | $18.97 | 2,916 | 2,915 | 1/2/2022 | | 1/13/2022 | $34.29 | 2,056 | 2,055 | 2/7/2023 | | 7/1/2022 | $31.48 | 2,500 | 2,500 | 2/7/2023 | | 1/25/2023 | $30.07 | 2,295 | 2,294 | 2/7/2024 |

  42. Outstanding Equity Awards at 2023 Fiscal Year-End

    (8)Ms. Waitz was awarded the following restricted stock grants:

  43. Outstanding Equity Awards at 2023 Fiscal Year-End

    | Grant Date | Grant Date Per Share Value | Time-Based Shares | Performance Shares | Time-Based Initial Vesting Date | | 1/4/2021 | $18.97 | 2,916 | 2,915 | 1/2/2022 | | 1/13/2022 | $34.29 | 2,056 | 2,055 | 2/7/2023 | | 7/1/2022 | $31.48 | 2,500 | 2,500 | 2/7/2023 | | 1/25/2023 | $30.07 | 3,060 | 3,059 | 2/7/2024 |

  44. Outstanding Equity Awards at 2023 Fiscal Year-End

    As a result of the termination of Ms. Waitz’s employment on June 3, 2023, she was entitled to vest in a pro-rata portion of the tranche of unvested performance-based shares scheduled to vest in 2024 based on 2023 performance (which are reflected in the table above) and forfeited all unvested time-based shares and the remainder of unvested performance-based shares.

  45. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning our variable pay-for-performance philosophy and how we align executive compensation with our performance, refer to “EXECUTIVE COMPENSATION – Compensation Discussion and Analysis.”

  46. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total for CEO (1) | Compensation Actually Paid to CEO (2) | Average Summary Compensation Table Total for Non-CEO NEO's (3) | Average Compensation Actually Paid to Non-CEO NEO's (4) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return (5) | Net Income (in thousands) (6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | 2023 | $1,462,411 | $1,498,073 | $1,079,912 | $896,778 | $166 | $36,663 | | 2022 | $1,577,559 | $1,554,518 | $1,156,516 | $996,113 | $158 | $37,429 | | 2021 | $1,262,362 | $1,678,862 | $721,930 | $933,909 | $171 | $26,586 |

  47. PAY VERSUS PERFORMANCE

    (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Gruseke (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “EXECUTIVE COMPENSATION – Summary Compensation Table.” (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Gruseke, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Gruseke during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Gruseke’s total compensation for each year to determine the compensation actually paid.

  48. PAY VERSUS PERFORMANCE

    | Year | Reported Summary Compensation Table Total for CEO | Reported Value of Equity Awards (A) | Equity Award Adjustments (B) | Compensation Actually Paid to CEO | | 2023 | $1,462,411 | $(467,378) | $503,040 | $1,498,073 | | 2022 | $1,577,559 | $(422,899) | $399,858 | $1,554,518 | | 2021 | $1,262,362 | $(243,968) | $660,468 | $1,678,862 |

  49. PAY VERSUS PERFORMANCE

    (A) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. (B) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows:

  50. PAY VERSUS PERFORMANCE

    | Year | Year End Fair Value of Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2023 | $469,088 | $8,849 | $— | $11,605 | $— | $13,498 | $503,040 | | 2022 | $362,960 | $(46,239) | $— | $69,580 | $— | $13,557 | $399,858 | | 2021 | $352,767 | $203,338 | $— | $93,982 | $— | $10,381 | $660,468 |

  51. PAY VERSUS PERFORMANCE

    (3) The dollar amounts reported in column (d) represent the average of the amounts reported for our named executive officers (NEOs) as a group (excluding Mr. Gruseke) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Gruseke) included for purposes of calculating the average amounts in each applicable year were Matthew McNeill (CBO), Christine Chivily (CCO), and Laura Waitz (COO) in 2023 and Matthew McNeill (CBO) and Penko Ivanov (CFO) in 2022 and Matthew McNeill (CBO) and Christine Chivily (CRO & CCO) in 2021. (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to our NEOs as a group (excluding Mr. Gruseke), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Gruseke) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Gruseke) for each year to determine the compensation actually paid, using the same methodology described above in Note 2: Consistent with the requirements of Item 401(v) of Regulation S-K, no adjustment was made for severance paid to Mr. Ivanov in 2022 or to Ms. Waitz in 2023 as reflected in the “All Other Compensation” column of the Summary Compensation Table in the Proxy Statement for the 2023 Annual Meeting and this Proxy Statement, respectively.

  52. PAY VERSUS PERFORMANCE

    | Year | Average Reported Summary Compensation Table Total for Non-CEO NEOs | Average Reported Value of Equity Awards | Average Equity Award Adjustments | Average Compensation Actually Paid to Non-CEO NEOs | | 2023 | $1,079,912 | $(174,632) | $(8,502) | $896,778 | | 2022 | $1,156,516 | $(229,314) | $68,911 | $996,113 | | 2021 | $721,930 | $(137,789) | $349,768 | $933,909 |

  53. PAY VERSUS PERFORMANCE

    | Year | Average Year End Fair Value of Equity Awards Granted in the Year | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Average Equity Awards Adjustments | | 2023 | $175,270 | $3,745 | $— | $4,930 | $(198,476) | $6,029 | $(8,502) | | 2022 | $133,303 | $(15,391) | $— | $4,981 | $(60,491) | $6,509 | $68,911 | | 2021 | $238,533 | $85,461 | $— | $20,011 | $— | $5,763 | $349,768 |

  54. PAY VERSUS PERFORMANCE

    (5) Cumulative Total Shareholder Return (TSR) is calculated by dividing the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between our share price at the end and the beginning of the measurement period by our share price at the beginning of the measurement period. (6) The dollar amounts reported represent the amount of net income reflected in our audited financial statements for the applicable year.

  55. Analysis of the Information Presented in the Pay versus Performance Table

    Analysis of the Information Presented in the Pay versus Performance Table As described in more detail in the section “EXECUTIVE COMPENSATION – Compensation Discussion and Analysis,” our executive compensation program reflects a variable pay-for-performance philosophy. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance Table.