DEF 14A of Mechanics Bancorp
Filed Apr 15, 2025 · FY20240001518715-25-000066
TO BE HELD ON MAY 29, 2025
| | PAGE | | Insider Trading Policy and Rule 10b5-1 Trading Plans | 32 | | Contacting the Board of Directors | 32 | | Director Compensation | 33 | | EXECUTIVE OFFICERS | 34 | | 2024 EXECUTIVE COMPENSATION PROGRAM | 37 | | OTHER PRACTICES, POLICIES AND GUIDELINES | 44 | | Recoupment of Incentive Compensation | 44 | | Hedging Policy | 44 | | Policy Regarding Options and Similar Equity Awards | 44 | | Health and Welfare Benefits | 44 | | 401(k) Savings Plan | 44 | | Perquisites and Other Personal Benefits | 45 | | Executive Employment Agreements and Change in Control Agreements | 45 | | 2024 SUMMARY COMPENSATION TABLE | 47 | | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | 49 | | Employment Agreements | 49 | | 2014 Plan | 50 | | 2014 Plan Award Agreements | 50 | | Deferred Compensation Agreement | 51 | | Pay Versus Performance | 52 | | PROPOSAL 2 ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION | 55 | | Overview | 55 | | Vote Required and Board Recommendation | 55 | | AUDIT COMMITTEE REPORT | 56 | | PROPOSAL 3 ADVISORY (NON-BINDING) RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 57 | | Overview | 57 | | Fees of Independent Registered Public Accounting Firm | 57 |
OUR DIRECTOR NOMINEES
OUR DIRECTOR NOMINEES Our Board of Directors (the “Board”) is currently comprised of eight directors, eight of whom are nominated and standing for election at the Annual Meeting. You are therefore being asked to elect eight directors this year to serve a one-year term on the Board until the 2026 annual meeting of shareholders, until their respective successors are duly elected and qualified, or until their earlier death, resignation or removal. For more information about the background and qualifications of the director nominees and the entire Board, please see “Proposal 1 — Election of Directors” on page 11 of this Proxy Statement. The Board’s nominees are:
OUR DIRECTOR NOMINEES
| Name | Age | Tenure(1) | Position/Committees | | Mark K. Mason | 65 | 15 years | Executive Chair | | Scott M. Boggs | 70 | 13 years | Audit, Enterprise Risk Management and Executive | | Sandra A. Cavanaugh | 70 | 7 years | Compensation Chair, Enterprise Risk Management, Executive, Audit and Nominating and Governance | | Jeffrey D. Green | 61 | 5 years | Audit Chair, Nominating and Governance | | Joanne R. Harrell | 70 | 3 years | Nominating and Governance Chair, Enterprise Risk Management and Compensation | | James R. Mitchell, Jr. | 75 | 5 years | Audit, Compensation and Executive | | Nancy D. Pellegrino | 68 | 6 years | Enterprise Risk Management Chair, Compensation and Nominating and Governance | | S. Craig Tompkins | 74 | 2 years | Enterprise Risk Management, Compensation and Nominating and Governance |
OUR DIRECTOR NOMINEES
(1) Rounded to the nearest year.
PROPOSAL 1 ELECTION OF DIRECTORS
PROPOSAL 1 ELECTION OF DIRECTORS
Introduction
Introduction HomeStreet’s Board currently consists of eight members, eight of whom are nominated and standing for election at the Annual Meeting. You are therefore being asked to elect eight directors this year to serve a one-year term on the Board until the 2026 annual meeting of shareholders, until their respective successors are duly elected and qualified or until their earlier death, resignation or removal.
The Board of Directors
The Board of Directors The following table sets forth certain information with respect to HomeStreet’s Board of Director nominees, including each nominee’s age as of March 31, 2025.
The Board of Directors
| Director | Age | Director Since | | Mark K. Mason, Chairman | 65 | 2010 | | Scott M. Boggs | 70 | 2012 | | Sandra A. Cavanaugh | 70 | 2018 | | Jeffrey D. Green | 61 | 2020 | | Joanne R. Harrell | 70 | 2022 | | James R. Mitchell, Jr., Lead Independent Director | 75 | 2020 | | Nancy D. Pellegrino | 68 | 2019 | | S. Craig Tompkins | 74 | 2023 |
The Board of Directors
Under our Bylaws, any director nominee’s eligibility to serve as a director of the Company is subject to any required notification to, or approval, nonobjection or requirement of, the Board of Governors of the Federal Reserve System, the Washington State Department of Financial Institutions or any other regulatory entity having jurisdiction over the Company. The number of directors may be increased or decreased from time to time by our Board, provided that a reduction in the number of directors may not shorten the term of an incumbent. Our Bylaws permit our Board to establish by resolution the authorized number of directors, which shall be between seven and thirteen directors. Newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board may be filled solely by the affirmative vote of a majority of the remaining directors then in office, unless otherwise provided by law or by resolution of the Board. All of our director nominees, except for Mr. Mason, satisfy the definition of “independent director” under the corporate governance rules of The Nasdaq Stock Market (“Nasdaq”).
Key Qualifications
Key Qualifications The following table sets forth certain key qualifications and skills of our Board. The lack of a mark for a particular item does not mean that the director does not possess that qualification, characteristic, skill or experience. We look to each director to be knowledgeable in these areas; however, the mark indicates that the item is a particularly prominent qualification, characteristic, skill or experience that the director brings to our Board. Our Board composition reflects our Board’s desire that directors have the broad expertise and perspective needed to govern our business and strengthen and support senior management.
Key Qualifications
| Qualification | Mark Mason | Scott Boggs | Sandra Cavanaugh | Jeffrey Green | Joanne Harrell | James Mitchell Jr. | Nancy Pellegrino | S. Craig Tompkins | | Financial Expertise Literacy | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Corporate Governance | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Public Company Board Experience | ✓ | ✓ | ✓ | ✓ | | ✓ | ✓ | | | Strategic Planning | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Legal | ✓ | | | | | ✓ | | ✓ | | Capital Markets | ✓ | | | | | ✓ | | ✓ | | Technology Cybersecurity | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | | Audit | ✓ | ✓ | ✓ | ✓ | | ✓ | | ✓ | | Human Capital Management | ✓ | | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Marketing | ✓ | | ✓ | ✓ | ✓ | ✓ | ✓ | | | Regulatory Risk Management | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Business Development | ✓ | | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Business Operations | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Public Company Executive Experience | ✓ | ✓ | ✓ | | ✓ | ✓ | ✓ | ✓ | | Accounting | ✓ | ✓ | | ✓ | | ✓ | | | | Industry Experience | ✓ | | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Key Qualifications
Upon recommendation of the Nominating and Governance Committee (the “N&G Committee”), the Board has nominated Mark K. Mason, Scott M. Boggs, Sandra A. Cavanaugh, Jeffrey D. Green, Joanne R. Harrell, James R. Mitchell, Jr., Nancy D. Pellegrino and S. Craig Tompkins for re-election to the Board with a one-year term set to expire at the Company’s next annual meeting of shareholders to be held in 2026. Biographical information about each of the nominees is contained in the following section. A discussion of the qualifications, attributes and skills of each nominee that led our Board and the N&G Committee to the conclusion that she or he should serve as a director appears following each of the director nominee biographies. Mark K. Mason, Director, Chairman, Chief Executive Officer and President Mr. Mason has been the Company’s Chief Executive Officer (“CEO”) and a member of the Company’s Board and HomeStreet Bank’s Chairman of the Board and Chief Executive Officer since January 2010. He became Chairman of the Board of the Company in March 2015 after serving as Vice Chairman of the Board since January 2010. Mr. Mason brings extensive business, managerial and leadership experience to our Board. From 1998 to 2002, Mr. Mason was president, chief executive officer and chief lending officer for Bank Plus Corporation and its wholly owned banking subsidiary, Fidelity Federal Bank, where Mr. Mason also served as the chief financial officer from 1994 to 1995 and as chairman of the board of directors from 1998 to 2002. From February 2008 to October 2008, Mr. Mason also served as president of a startup energy company, TEFCO, LLC. He has served on the boards of directors of Hanmi Financial Corp., San Diego Community Bank and The Bjurman Barry Family of Mutual Funds. Mr. Mason is on the boards of directors of the Pacific Bankers Management Institute (the parent company of the Pacific Coast Banking School) and The Washington Bankers Association and is an advisory board member of Seattle University’s Albers School of Business and Economics. Mr. Mason is a certified public accountant (inactive) and holds a bachelor’s degree in business administration with an emphasis in Accounting from California State Polytechnic University. Mr. Mason was selected to serve as a director because of his position as our CEO and his significant experience as an executive officer, director of and consultant to other banks and mortgage companies, his credit and lending experience, mergers and acquisitions experience, finance and accounting education and experience and his relationships in the banking industry and the capital markets. He currently chairs the HomeStreet Board of Directors and Executive Committee. Scott M. Boggs, Director Mr. Boggs joined HomeStreet Bank in 2006 as a member of its board of directors and became a director of the Company in February 2012. Mr. Boggs served as the Lead Independent Director of the Board from March 2015 through June 2018. Prior to joining HomeStreet Bank’s board of directors, Mr. Boggs was employed by Microsoft Corporation from 1993 to 2003 where he served in a variety of positions, including vice president, corporate controller from 1998 to 2003. Mr. Boggs was also an adjunct professor for the Seattle University Albers School of Business and Economics, teaching accounting and information systems from 2004 until 2009. Mr. Boggs previously served as a trustee and chair of the audit committee and budget and investments committee of the Financial Executives Research Foundation from 2002 to 2008, as director, chair of the pension committee and a member of the audit committee of the Cascade Natural Gas Corporation from 2004 to 2007, and director, vice chair of audit committee and designated financial expert of the Safeco family of mutual funds from 2002 to 2004. He is a former member of the Seattle University Internal Audit Advisory Board, the King County Strategic Technology Advisory Council, the Seattle University Accounting Advisory Board and the Financial Executives International. Mr. Boggs started his career as a certified public accountant (currently inactive) with Deloitte, Haskins & Sells from 1977 to 1985, and he received his bachelor’s degree in Accounting from the University of Washington. Mr. Boggs was selected to serve as a director because of his significant accounting and financial experience, his accounting credentials and degree and his experience as a designated financial expert on audit committees. He currently chairs the HomeStreet Board of Directors Finance Committee. Sandra A. Cavanaugh, Director Ms. Cavanaugh joined the Board in May 2018. Ms. Cavanaugh has more than 30 years of executive experience in the financial services, banking and asset management industries. As President and CEO of Russell’s U.S. Private Client Services Group and President and CEO of Russell Investment Funds from January 2010 until her retirement in June 2016, Ms. Cavanaugh oversaw the operation of a $45 billion mutual fund family. Prior to joining Russell Investments, Ms. Cavanaugh was an executive vice president for SunTrust in 2009 and held several executive leadership positions at Washington Mutual from 1997 to 2009, including President of WM Funds Distributor and Shareholder Services and President of WM Financial Services. Ms. Cavanaugh also held various senior positions with AIM Mutual Funds, First Interstate Bank and American Savings Bank. Since her retirement in 2016, Ms. Cavanaugh has provided consulting services to help financial services companies build and execute brand, product and distribution strategies. In addition to her executive career, Ms. Cavanaugh has held several board and advisory roles with private, non-profit and public companies, including United Way of King County. She received her bachelor’s degree in History with a minor in business from California State University, Fresno and had previously held active NASD/FINRA securities licenses, Series 7, 24, and 63. Ms. Cavanaugh was selected to serve as a director because of her extensive executive management experience which encompasses expertise in human capital management, risk management, sales and distribution, marketing and strategy and is considered an expert in the financial services industry. She currently chairs the HomeStreet Board of Directors Compensation Committee. Jeffrey D. Green, Director Mr. Green, CPA was appointed as a member of the Board in June 2020. Mr. Green has over 30 years of experience in public accounting serving the financial institutions, mortgage banking and financial services industry. He retired as the Financial Institutions National Practice leader and an audit and client service Partner of Moss Adams LLP, a national accounting, tax, and advisory firm, having served with the firm since 1990. From 2013 to 2018, Mr. Green was Moss Adams’ Financial Institutions National Practice Leader, and in that role, was responsible for the firm’s national financial institutions practice covering; accounting, auditing, internal control, financial and consulting services provided to financial services clients. From 2007 to 2013 Mr. Green was the Managing Partner of Moss
Key Qualifications
Adams’ Everett, Washington practice office, and in that role, was responsible for personnel, financial performance, quality control and sales and marketing for the 120 plus employee office. Over his career in public accounting, Mr. Green gained significant experience working with the boards and audit committees of publicly traded banking and lending institutions while managing major client relationships across multiple markets. In his roles, Mr. Green developed deep expertise in complex accounting, auditing (external and internal), internal control (including SOX and FDICIA), financial reporting, risk management, loan file review, information technology, regulatory compliance, corporate governance and strategic matters facing financial services companies. In addition to his financial and risk management experience, he also brings extensive business, managerial and leadership experience to the Board. Mr. Green holds a Bachelor of Science in business administration with a focus in accounting from Washington State University and is a certified public accountant. He is member of the Washington State Society of Certified Public Accountants, the American Institute of Certified Public Accountants and the National Association of Corporate Directors. Mr. Green was selected to serve because of his background as an audit partner for public companies in the financial services industry, his extensive expertise in community banking, financial expertise, knowledge of internal control and risk management, and his qualification as an audit committee “financial expert” under SEC rules. He currently chairs the HomeStreet Board of Directors Audit Committee. Joanne R. Harrell, Director Ms. Harrell joined the board in January 2022. She brings extensive experience in executive roles within the high-tech, telecommunications and non-profit sectors. Ms. Harrell has a strong record of creating public-private partnerships that lead to innovative solutions to pressing civic and societal issues. From 2001 until her retirement in October 2021, Ms. Harrell worked for Microsoft Corporation where she led teams in the sales, marketing and services disciplines focused on enterprise, public sector and original equipment manufacturing customers and partners. Ms. Harrell served as a Regent for the University of Washington from 2009 to 2022 and was Board Chair in 2012. Prior to joining Microsoft in 2001, Ms. Harrell was President and Chief Executive Officer of the United Way of King County, Washington and held executive positions with US West Communications, Inc. and AT&T, Inc. Ms. Harrell holds a B.A. in communications-advertising and an M.B.A in marketing from the University of Washington. She is a member of the Board of Directors of the Fred Hutch Cancer Care Center and chairs the Board of Equal Opportunity Schools. Ms. Harrell remains active with the University of Washington as an Adjunct Professor and is the immediate-past Fritzky Endowed Chair in Leadership at the Foster Business School. Ms. Harrell was selected to serve as director because of her experience in the areas of marketing, sales, strategy, communications, community service and diversity, social responsibility, sustainability, public affairs and corporate citizenship, in addition to her extensive background in executive management. She currently chairs the HomeStreet Board of Directors Nominating and Governance Committee. James R. Mitchell, Jr., Director Mr. Mitchell joined the Board in January 2020. Mr. Mitchell has worked in commercial banking for more than 40 years, including founding Puget Sound Bank in 2004, where he served as president and chief executive officer from inception until the merger of that bank with Heritage Bank in January 2018. He was also a member of the Board of Directors of Puget Sound Bank from 2004 through January 2018, serving as chairman of the board from 2004 through 2008. After the merger of Puget Sound Bank and Heritage Bank, Mr. Mitchell served as the market president for King County for Heritage Bank for the next year, until January 2019, and then as a consultant to Heritage Bank until January 2020. Prior to founding Puget Sound Bank, Mr. Mitchell served as a Senior Vice President at Sterling Bank, where he opened and grew the Seattle corporate banking office, from 2002 to 2004, and a Senior Vice President and team leader for the Seattle corporate banking team of U.S. Bank from 1990 through 2002. Mr. Mitchell served on the Board of Directors of the Washington Bankers Association from 2011 to 2018, the Board of Directors of the Western Bankers Association from 2015 to 2018, and the board of Bellevue LifeSpring, a nonprofit organization, from 2009 to 2017. Mr. Mitchell received his bachelor’s degree from Seattle University, a Masters of Business Administration from the University of Washington and his juris doctorate from Southwestern University School of Law. Mr. Mitchell was selected to serve as a director based on his knowledge of the banking industry, experience as a chief executive officer and director of a bank, and expertise in commercial banking. He is currently the Lead Independent Director of the HomeStreet Board of Directors and chairs the Credit Committee. Nancy D. Pellegrino, Director Ms. Pellegrino joined the Board in October 2019. She previously served as a Director on the Board of Puget Sound Bank (2015-2018) helping lead it to its successful merger with Heritage Financial Corp. Ms. Pellegrino brings to the board room more than 30 years of financial services experience in the private banking, wealth and asset management industries. She served as Managing Director and Regional CEO for Citi Private Bank and President for BNY Mellon Wealth Management for the PNW from 2000 to 2013. Prior to her move to Seattle, she was with Banc One’s Trust Company and Private Asset Management division in Texas and Ohio (1990-2000) as Senior Vice President and Regional Sales Manager and Director. After beginning her career in the oil and gas business in Texas, Ms. Pellegrino became Vice President for Business Development and head of the Oil and Gas Asset Management Division for Texas Commerce Bank Trust Company (1982-1990). Post-retirement from the financial services industry, she has provided consulting services to individuals, teams and organizations, drawing on her board and leadership experience. Over the past 24 years, she has served in leadership positions on the boards of numerous nonprofit organizations in the Pacific Northwest in healthcare, human services, and the arts. Ms. Pellegrino is currently Director Emeritus and past Board Chair for Woodland Park Zoo and remains involved as an advisor to it and the Fred Hutch Cancer Center. She received her bachelor’s degree from Vanderbilt University and is a graduate of the Northwestern University Graduate Trust School and University of Virginia’s Darden School of Business “Leading Strategic Change” program. She has held active NASD/FINRA securities licenses 6, 7, 24, 63 and 66, and the Certified Trust Financial Advisor designation. Ms. Pellegrino was selected to serve as director because of her extensive executive leadership experience in the financial services industry encompassing human capital management, business development, marketing, strategy, risk management and both corporate and non-profit board experience as well as for her commitment to the PNW community. She currently chairs the HomeStreet Board of Directors Enterprise Risk Management Committee. S. Craig Tompkins, Director
Key Qualifications
Mr. Tompkins joined the Board in May 2023. Mr. Tompkins has been the Executive Vice President and General Counsel of Reading International and has served in a variety of officer and director capacities with Reading and its predecessors (Craig Corporation, Citadel Holding Corporation and Reading Entertainment, Inc.) since February 1993. Prior to this, Mr. Tompkins was a partner at Gibson Dunn & Crutcher from 1984 to 1993 practicing as a corporate, securities and banking lawyer. Mr. Tompkins was a principal equity holder in and, between 2007 to 2017, served as the Executive Chairperson and from 2017 to 2022 as the Chairperson of Marshall & Stevens, Incorporated, a privately held valuation and consulting firm specializing in the valuation of real estate, business enterprises and alternative energy assets. From 1993 to 2006, Mr. Tompkins served as a director and as the Chairperson of the Audit Committee of G&L Realty (an NYSE REIT specializing in medical properties), and from 1998 to 2001 as a director and member, of the Compensation Committee, and of the Special Independent Committee of Fidelity Federal Bank, FSB. Mr. Tompkins is also the Chairperson and Chief Executive Officer of Kirtland Farms, Inc. (a Tompkins family-owned agricultural operation in Southern Oregon). Mr. Tompkins holds a Bachelor of Arts from Claremont McKenna College, and a Juris Doctorate from the Harvard Law School. Mr. Tompkins was selected to serve as a director based on his experience in legal and corporate governance, financial expertise and literacy, audit, compensation and human capital management, and strategic planning. THE BOARD UNANIMOUSLY RECOMMENDS VOTING “FOR” THE ELECTION OF EACH OF THE EIGHT DIRECTOR NOMINEES.
Director Compensation
Director Compensation Non-Employee Director Compensation All directors of the Company also serve as directors of HomeStreet Bank. We believe that our overall non-employee director compensation program is reasonable and appropriate based on our review of Peer Group financial institution data and the data provided by Pearl Meyer, the Compensation Committee’s independent external compensation consultant. In 2024, our non-employee directors were paid an annual retainer of $130,000. Committee chairs of the Compensation Committee, N&G Committee and ERM Committee earned an additional $15,000 annual retainer. The Audit Committee chair earned an additional $20,000 annual retainer. Chairs of the Bank’s Finance Committee and Credit Committee earned an additional $10,000 annual retainer. The Lead Independent Director received an additional annual retainer of $30,000. Members of the Executive Committee were paid an additional annual retainer of $10,000. All fees are paid on a quarterly basis, in cash. Director Stock Ownership Guidelines Our Principles of Corporate Governance contain stock ownership guidelines pursuant to which each non-executive director is expected to own shares of the Company’s common stock totaling at least three (3) times the annual retainer fee, valued at the closing price of the common stock on the date of acquisition, (the “Minimum Ownership Level”) at all times from and after the third anniversary of such director’s appointment or election to the Board until the end of such director’s service to the Company as a director. Directors are not required to acquire additional stock to increase their holdings to the Minimum Ownership Level in the event of a decline in the stock value. However, if a sale or other transfer from a director’s account results in the director owning less than the Minimum Ownership Level in shares of the Company’s common stock, the director is then required to re-establish his or her Minimum Ownership Level. Stock received by non-executive directors as part of their director compensation may be counted toward the accumulation of the Minimum Ownership Level. As of March 31, 2025, all directors who have been on the Board for three years or more are in compliance with our stock ownership guidelines, measured based on the annual retainer fee paid to directors in 2024. Compensation for Employee Directors Employee directors do not receive compensation for serving on our Board. Accordingly, Mark K. Mason, who serves as Chairman and is an executive of the Company, is not paid any additional retainer or compensation for his services as a director and Chairman. 2024 Director Compensation Table The following table shows the compensation earned by our non-employee directors for 2024.
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | | Scott M. Boggs | 150,000 | | Sandra A. Cavanaugh | 155,000 | | Jeffrey A. Green | 150,000 | | Joanne R. Harrell | 145,000 | | James R. Mitchell, Jr. | 180,000 | | Nancy D. Pellegrino | 145,000 | | S. Craig Tompkins | 130,000 |
Annual Cash Incentives
Annual Cash Incentives All of our NEOs are eligible to receive incentive awards, which are intended to focus executives on short-term financial and strategic goals that are designed to contribute to long-term value. Mr. Mason and Mr. Michel, who are non-commissioned NEOs, are eligible to participate in the Annual Incentive Plan, which provides an opportunity to receive an annual incentive award that is contingent on achieving pre-defined annual corporate objectives, as well as individual goals which target their respective areas of responsibility. Mr. Endresen, who is a commissioned NEO, is eligible for annual incentive awards under a separate arrangement, which provides for incentive payout opportunities based on business unit performance results. Non-Commissioned Incentive Plan Awards The Annual Incentive Plan provided our non-commissioned NEOs with the opportunity to earn a performance-based annual cash incentive award. Actual bonus payouts depend on the achievement of pre-established performance objectives and can range from 0% to 150% of target award amounts. Target annual incentive opportunities are expressed as a percentage of base salary and were established by the Compensation Committee for 2024 based on the NEO’s level of responsibility and the NEO's ability to impact overall results. The Compensation Committee also considers comparable market data in setting target award amounts. The 2024 target award opportunities in terms of percentage of salary for the non-commissioned NEOs were as follows:
Annual Cash Incentives
| Non-Commissioned NEO(1) | Target Opportunity as % of Base Salary | | Mark K. Mason | 75% | | John M. Michel | 60% |
Annual Cash Incentives
(1)The target opportunities for Messrs. Mason and Michel as a percentage of base salary were unchanged from the 2023 levels. Actual awards for the CEO are assessed by the Compensation Committee based on performance against corporate financial goals and individual performance. Actual awards for the other non-commissioned NEOs are based on the achievement of corporate or business unit financial goals and individual performance objectives as assessed and recommended by the CEO and approved by the Compensation Committee. For 2024, the Compensation Committee established the following balance between corporate and individual goals:
Annual Cash Incentives
| Non-Commissioned NEO | Corporate Goals Weight | Individual Goals Weight | | Mark K. Mason (1) | 80% | 20% | | John M. Michel (2) | 80% | 20% |
Annual Cash Incentives
(1)Mr. Mason’s corporate goal achievements are more heavily weighted because he is responsible for Company-wide results as CEO. (2)Mr. Michel's corporate goal achievements are more heavily weighted because his oversight directly affects Company-wide results. Corporate Performance Goals, Metrics and Results In 2024, corporate performance measured against our 2024 strategic plan (“2024 Plan”) was the basis for awards. The target level, thresholds and maximums were established by the Board based on the 2024 Plan. Any performance results below the threshold would result in no payout. Performance results between threshold and target and between target and maximum would be calculated on a straight-line interpolation basis. Below are the performance measures used for 2024: •Core ROAA: Defined as net income, adjusted to exclude any non-core items such as loss on loan sale, deferred tax allowance and merger expenses. •Core ROATE: Defined as net income, excluding any amortization of intangible assets and adjusted to exclude any non-core items such as loss on loan sale, and merger expenses, as a percentage of total average tangible equity, which is average equity less average intangible assets. •Efficiency Ratio: Defined as noninterest expenses, adjusted to exclude any nonrecurring or unusual items, as a percentage of the total of net interest income and noninterest income, adjusted to exclude any nonrecurring or unusual items. In 2024, loss on loan sale and merger expenses were excluded as nonrecurring items. A lower ratio is a more positive result. •Nonperforming Assets (“NPAs”) to Total Assets: Defined as nonperforming loans plus other real estate owned divided by total assets. This is considered a key measure of the quality of HomeStreet Bank’s loan portfolio. Credit risk management remains a major focus of HomeStreet Bank. A lower ratio is a more positive result. •Core Deposit Balances: Core deposits for these purposes is defined as total deposits less certificates of deposit. Core deposits are the most beneficial source of funding due to their relatively low cost and tendency to be more stable. Growth is calculated as the change from the average core deposits for the fourth quarter of the current year as compared to the average core deposits for the fourth quarter of the prior year. Any deposits added through mergers or acquisitions are excluded from the computation and any deposits sold are removed from this computation. A core ROATE of 11% or higher is required to receive a combined award in excess of 100% of target opportunity. The following table provides the Threshold, Target and Maximum percentiles of the corporate performance goals set by the Board, the Company’s results, the weighting of each performance measure and the computed award for 2024:
Annual Cash Incentives
| | Corporate Performance Goals (1) | | | Company Results | Excess (Shortfall) To Target | Weighting | Computed Award | | Performance Measure | Threshold | Target | Maximum | | | | | | Core ROAA | (0.15)% | (0.10)% | 0.75% | (0.23)% | (0.13)% | 20% | —% | | Core ROATE | (2.10)% | (1.40)% | 10.00% | (3.6)% | (2.20)% | 30% | —% | | Efficiency Ratio | 111.50% | 106.20% | 63.70% | 116.0% | (9.80)% | 20% | —% | | NPAs to Total assets | 0.68% | 0.45% | 0.34% | 0.63% | (0.18)% | 20% | 12.2% | | Core Deposit Balances (average) | $3,299,000 | $3,666,000 | $4,033,000 | $3,231,083 | (11.86)% | 10% | —% | | Total | . | | | | | | 12.2% |
Annual Cash Incentives
(1)For core ROAA, core ROATE and efficiency ratio, see Appendix A for reconciliations of these non-GAAP results of operations to the nearest comparable GAAP measures. The Compensation Committee has the discretion to reduce or increase the payouts to the extent it determines appropriate to reflect the business environment and market conditions that may affect the Company’s financial and stock price performance. No such discretion was exercised by the Compensation Committee for payouts earned in 2024. Individual Performance Goals. Individual performance goals are established at the beginning of each plan year. An NEO’s individual goals may relate to responsibilities, projects and initiatives specific to the executive’s business or function that are not covered in the corporate performance measurements. To assess individual performance against the goals, the Compensation Committee selected qualitative goals for the CEO tied to key strategic initiatives that are aligned with the Company’s 2024 – 2026 Strategic Plan as approved by the Board, as well as his responsibility in the areas of profitability, diversification, business growth and credit quality as such areas correlate to the 2024 – 2026 Strategic Plan. Similarly, the CEO recommended qualitative goals for Mr. Michel, the other non-commissioned NEO, based on the specific department and business goals that support the Company’s 2024 – 2026 Strategic Plan, which were adopted by the Compensation Committee.
Mr. Michel, Executive Vice President, Chief Financial Officer
2024 Annual Incentive Plan Results Based on the corporate results and the evaluation of individual performance achievements described above, the Compensation Committee approved the following Annual Incentive Plan incentive award payouts:
Commissioned NEO Incentive Plan Arrangements
Commissioned NEO Incentive Plan Arrangements Mr. Endresen, our commissioned NEO, is eligible for annual incentive awards under a separate arrangement, which provides for payout opportunities based on business unit performance results to incentivize him to generate profitable quality loans for HomeStreet Bank, which aligns with his roles and responsibilities. We believe a commissioned program is consistent with competitor practices for similar positions and generally provides for a larger portion of his compensation to be at-risk. Mr. Endresen’s incentive plan is comprised of two parts: a production incentive, which is paid out monthly and a profitability incentive, 50% of which is paid out quarterly with the remaining 50% paid in the following year. The production incentive is based on loan commitments originated by the Company’s commercial real estate (“CRE”) business unit, with a higher rate paid for Fannie Mae loan commitments. The profitability incentive is based on the income before tax of the CRE business unit, which includes corporate funding and overhead allocations. We are not disclosing the payout formulas used due to confidentiality and competitive concerns. The profitability incentive payout is subject to a discount based on levels of classified loans in the CRE portfolio. This incentive discount is intended to encourage loan production consistent with the safety and soundness of HomeStreet Bank. Performance Goals, Metrics and Results The following table shows the performance measures, and 2024 results, for Mr. Endresen:
Commissioned NEO Incentive Plan Arrangements
| Performance Measures | Target | | Results | | Results (% of Target) | | CRE Business Unit: Mr. Endresen | | | | | | | Profitability (1) | | 86.8 million | | 86.4 million | 99.6% | | Loan Production (2) | | 500.0 million | | 115.3 million | 23.1% |
Commissioned NEO Incentive Plan Arrangements
(1)Profitability is a percentage of the pre-tax income (after determining allocation of consolidated Company overhead expenses) of the related business units. The Compensation Committee decided to exclude the impact of the sale of $990 million of multifamily loans in the fourth quarter of 2024 from the profitability measure as it was considered a non-core item. (2)Loan production is total dollar amount of loan commitments in the current year for the related business unit. For commercial real estate loan production payouts vary by certain channels. 2024 Award Payouts Based on the performance results described above, the following incentive awards were paid to Mr. Endresen:
Commissioned NEO Incentive Plan Arrangements
| | Target Payout ($) | Actual Payout | | | NEO | | ($) | % of Target | | William D. Endresen | 527,675 | 441,782 | 83.7% |
Long-Term Incentives
Long-Term Incentives Our long-term incentive compensation consists of a combination of time-based restricted share units ("RSUs") and performance share units ("PSUs") that are granted under the 2014 Plan. 2024 Target Long-Term Incentive Award Grants. In 2024, the Company granted long-term incentive awards consisting of 50% PSUs and 50% RSUs, as approved by the Compensation Committee. The value of the equity awards determined by the Compensation Committee was based on a target value as a percentage of base salary. The Compensation Committee determines the target by reviewing Peer Group data and appropriate market data relevant to the banking industry and sets targets at levels intended to create a meaningful opportunity for reward predicated on increasing shareholder value. In addition to considering competitive market data, the Compensation Committee also considers an individual’s performance history, experience, an individual’s potential for future advancement and promotions, the CEO’s recommendations for awards other than his own, and the value of existing vested and unvested outstanding equity awards. The relative weight given to each of these factors varies among individuals at the Compensation Committee’s discretion. The table below shows the grant date fair value of long-term incentive awards granted in 2024 to each of the NEOs:
Long-Term Incentives
| | RSUs | | PSUs | | Total | | | NEO | Value ($) | Shares (#) | Value ($) | Target Shares (#) | Value ($) | Target Shares (#) | | Mark K. Mason | 481,463 | 46,744 | 376,996 | 33,333 | 858,459 | 80,077 | | John M. Michel | 165,336 | 16,052 | 181,548 | 16,052 | 346,884 | 32,104 | | William D. Endresen | 121,138 | 11,761 | 133,017 | 11,761 | 254,155 | 23,522 |
Long-Term Incentives
The PSUs are earned and vested based on achieving a specified company performance result and continued employment over the three-year performance period. In each case, the vesting of the award is also contingent on the NEO’s employment with the Company not having been terminated for any reason other than retirement, death or disability prior to the date the Compensation Committee certifies the achievement of the performance goal for the relevant performance period. The RSUs awarded annually as part of our long-term incentive plan vest incrementally in three equal installments on the first, second and third anniversaries from the grant date. In each case, the vesting of the award is contingent on the NEO’s employment with the Company not having been terminated for any reason other than retirement, death or disability prior to the applicable vesting date. A Closer Look at PSUs. PSUs are designed to focus the NEOs on long-term value creation for shareholders. PSUs are earned and vest at the end of a three-year performance period based on the Company’s total shareholder return (“TSR”) relative to a peer group. TSR is calculated as the change in share price from January 1, of the beginning of the three-year period to December 31 at the end of the three-year period assuming that all dividends are reinvested in shares on the date paid. The PSU peer group consists of all companies included in the KBW Regional Banking Index at the end of the Performance Period (excluding the Company itself, if it happens to be a component company on that date). For results in between the 25th and 50th or 50th and 75th, there will be a straight-line interpolation calculation. If achievement is below the 25th percentile or the Company’s absolute TSR over the performance period is negative, then 0% of the PSUs will vest.
Long-Term Incentives
| | Threshold | Target | Maximum | | Relative TSR performance | 25th percentile | 50th percentile | 75th percentile | | Payment as a % of target | 50% | 100% | 150% |
Long-Term Incentives
2022 – 2024 Performance Period Results and Payouts. For the 2022-2024 performance period, PSUs would have been earned based on the same design as the PSUs for the 2024-2026 Performance Period. The following chart shows the threshold, target and maximum metrics for the 2022 – 2024 PSUs and performance for this period.
Long-Term Incentives
| | Threshold | Target | Maximum | Results | | TSR Percentile Rank | 25th percentile | 50th percentile | 75th percentile | zero percentile | | Payout as a % of Target | 50% | 100% | 150% | 0% |
Long-Term Incentives
No 2022 PSUs were earned based on the results for the three-year period ended December 31, 2024:
Long-Term Incentives
| NEO | Target Share (#) | Award (#) | | Mark K. Mason | 7,710 | — | | John M. Michel | 2,647 | — | | William D. Endresen | 1,940 | — |
Policy Regarding Options and Similar Equity Awards
Policy Regarding Options and Similar Equity Awards We do not currently grant new awards of stock options, stock appreciation rights or similar option-like equity awards. Accordingly, we have no specific policy or practice on the timing of grants of such awards in relation to the disclosure of material nonpublic information. In the event we determine to grant new awards of stock options or similar equity awards in the future, the HR and Compensation Committee will evaluate the appropriate steps to take in relation to the foregoing.
Executive Employment Agreements and Change in Control Agreements
Executive Employment Agreements and Change in Control Agreements We use employment agreements to attract and retain certain executives and the talent, skills, experience and expertise that they provide to the Company, with a goal of protecting and striking the right balance among such executives, the Company and the shareholders and providing necessary stability and skilled leadership for the Company. The Company has entered into employment agreements with each of the NEOs, which provide for certain severance benefits in the event of a qualified termination with each of the NEOs. Mr. Mason’s employment agreement also provides for certain severance benefits in the event of a qualifying termination that occurs in connection with a change in control. The Company does not maintain a standard severance plan subject to the Employment Retirement Income Security Act of 1974. Mr. Mason’s employment agreement, effective January 25, 2018, provides for an annual base salary of not less than $700,000 and eligibility for an annual performance-based incentive bonus with a target award equal to 75% of his annual salary, provided that the Board or the Compensation Committee may set a lower or higher bonus amount based on individual and Company performance and Peer Group data supplied by the Company's outside compensation consultant. Mr. Mason’s target award was increased to 100% effective January 2021, decreased to 75% effective January 2023, and his base salary was increased to $855,088 effective March 2024. In the event of a termination without cause or termination by him for good reason (as those terms are defined in the agreement), Mr. Mason will receive the termination benefits described in the table below. On March 5, 2025, the term of Mr. Mason’s employment agreement was extended to December 31, 2027, with an automatic renewal for successive one-year terms absent notice from either party not to renew within 180 days before the end of the term. Mr. Michel’s initial employment agreement, effective May 11, 2020, provides for an annual base salary of not less than $435,000 and eligibility for an annual performance-based incentive bonus with a target award equal to 60% of his annual salary, provided that the Board or the Compensation Committee may set a lower or higher bonus amount based on individual and Company performance and Peer Group data supplied by the Company’s outside compensation consultant. Mr. Michel's base salary was increased to $489,398, effective March 2024. In the event of a termination without cause or termination by him for good reason (as those terms are defined in the agreement), Mr. Michel will receive the termination benefits described in the table below. On March 5, 2025, the term of Mr. Michel’s employment agreement was extended to December 31, 2027, with an automatic renewal for successive one-year terms absent notice from either party not to renew within 180 days before the end of the term. Mr. Endresen’s employment agreement, effective February 26, 2018 provides for an annual base salary of not less than $315,000 and a loan production commissioned based incentive plan. Mr. Endresen’s base salary was increased to $430,300 effective March 2024. On February 25, 2021, the Company entered into an amended and restated Executive Employment Agreement with Mr. Endresen, which amended and restated his prior agreement dated February 26, 2018. The material terms of his Executive Employment Agreement remain the same as they were under his prior agreement. On March 5, 2025, the term of Mr. Endresen’s Employment Agreement was extended to December 31, 2027, with an automatic renewal for successive one-year terms absent notice from either party not to renew within 180 days before the end of the term. Please refer to the section entitled “Potential Payments upon Termination or Change in Control” for information regarding certain severance payments and benefits provided to our NEOs. Mason Deferred Compensation Agreement The Compensation Committee determined that Mr. Mason’s equity awards for the performance period commencing January 1, 2024 and ending on December 31, 2026 (the "Deferred Compensation Performance Period"), exceeded the limits under the Company's 2014 Equity Incentive Plan (the "Equity Plan") on annual awards to a single individual participant for PSUs. To make up for the shortfall with respect to Equity Plan awards as a result of the annual limits under the Equity Plan, the Company entered into a deferred compensation agreement with Mr. Mason, which provides that the Company will pay Mr. Mason a deferred compensation amount (the “PSU Deferred Compensation Amount”) with a target payout of $119,093, subject to the terms of the deferred compensation agreement. The PSU Deferred Compensation Amount will be earned and vest at the end of Deferred Compensation Performance Period based on the Company’s TSR relative to a peer group. TSR is calculated as the change in share price from January 1, of the beginning of the three-year period to December 31 at the end of the three-year period assuming that all dividends are reinvested in shares on the date paid. The PSU peer group consists of all companies included in the KBW Regional Banking Index at the end of the Performance Period (excluding the Company itself, if it happens to be a component company on that date). For results in between the 25th and 50th or 50th and 75th, there will be a straight-line interpolation calculation. If achievement is below the 25th percentile, or the Company’s absolute TSR over the Deferred Compensation Performance Period is negative, then 0% of the PSU Deferred Compensation Amount will vest.
Executive Employment Agreements and Change in Control Agreements
| | Threshold | Target | Maximum | | Relative TSR performance | 25th percentile | 50th percentile | 75th percentile | | Payment as a % of target | 50% | 100% | 150% |
Executive Employment Agreements and Change in Control Agreements
The PSU Deferred Compensation Amount, to the extent earned, will become vested and payable following the end of the Deferred Compensation Performance Period, on the date that the Compensation Committee certifies the achievement of the TSR performance goals applicable to the 2024-2026 PSUs granted to Mr. Mason, subject to Mr. Mason’s continued service through such date (with certain exceptions). Please refer to the section entitled “Potential Payments upon Termination or Change in Control” for information regarding the treatment of the PSU Deferred Compensation Amount in connection with certain terminations of employment or a change in control.
2024 SUMMARY COMPENSATION TABLE
2024 SUMMARY COMPENSATION TABLE The following table sets forth certain information regarding the compensation awarded to, earned by, or paid to our named executive officers during 2024 and 2023, to the extent required by SEC executive compensation disclosure rules.
2024 SUMMARY COMPENSATION TABLE
| Name and Principal Positions | Year | Salary ($) | Stock Awards ($) (1) | Non-Equity Plan Compensation Earnings ($) (2) | All Other Compensation ($) (3) | Total ($) | | Mark K. Mason | 2024 | 850,298 | 858,459 | 253,570 | 21,142 | 1,983,469 | | Chief Executive Officer | 2023 | 824,040 | 825,697 | 185,410 | 28,962 | 1,864,109 | | John M. Michel | 2024 | 486,658 | 346,884 | 116,100 | 70,014 | 1,019,656 | | Chief Financial Officer, EVP | 2023 | 471,625 | 283,500 | 84,900 | 64,862 | 904,887 | | William D. Endresen | 2024 | 427,890 | 254,155 | 441,782 | 17,937 | 1,141,764 | | Commercial Real Estate President, EVP | 2023 | 414,678 | 207,759 | 608,221 | 27,278 | 1,257,936 |
2024 SUMMARY COMPENSATION TABLE
(1)Amounts represent the aggregate grant date fair market value computed in accordance with FASB ASC Topic 718. See grant date fair value table above for additional information regarding the issuance of these awards. These amounts do not represent the actual value that may be realized by the NEO upon vesting or settlement of such awards. For each RSU award, the grant date fair value is calculated using the closing price of our common stock on the grant date. For the PSUs, consistent with ASC Topic 718, the full grant date fair value was determined using a Monte Carlo simulation performed as of the date of grant by an independent third party and therefore is not subject to probable or maximum outcome assumptions. The following table includes the assumptions used to calculate the grant date fair value of PSUs reported for fiscal years 2024 and 2023.
2024 SUMMARY COMPENSATION TABLE
| | 2024 | 2023 | | Volatility of common stock | 58.1% | 42.7% | | Average volatility of peer companies | 33.6% | 45.0% | | Average correlation coefficient of peer companies | 0.7527% | 0.8029% | | Risk-free interest rate | 4.0% | 4.2% | | Expected term in years | 3 years | 3 years |
2024 SUMMARY COMPENSATION TABLE
(2)Represents amounts earned for services rendered during the fiscal year, whether or not actually paid during such fiscal year under the Annual Incentive Plans. (3)Includes (i) 401k matching contributions; (ii) other fringe benefits including health club memberships and parking; (iii) for Mr. Michel, housing and relocation benefits of $52,447 and $47,895 in 2024 and 2023, respectively.
2024 SUMMARY COMPENSATION TABLE
| Outstanding Equity Awards at 2024 Fiscal Year-End | | | | | | | | | STOCK AWARDS | | | | | NEO | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) (1) | Market Value of Shares or Units of Stock That Have Not Vested ($) (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) | | Mark K. Mason | 1/1/22 | 2,750 | 31,405 | — | — | | | 1/1/23 | 9,899 | 113,047 | — | — | | | 1/1/23 | — | — | 7,424 | 84,782 | | | 1/1/24 | 46,744 | 533,816 | — | — | | | 1/1/24 | — | — | 50,000 | 570,994 | | John M. Michel | 1/1/22 | 883 | 10,084 | — | — | | | 1/1/23 | 3,399 | 38,817 | — | — | | | 1/1/23 | — | — | 2,549 | 29,110 | | | 1/1/24 | 16,052 | 183,314 | — | — | | | 1/1/24 | — | — | 24,078 | 274,971 | | William D. Endresen | 1/1/22 | 647 | 7,389 | — | — | | | 1/1/23 | 2,491 | 28,447 | — | — | | | 1/1/23 | — | — | 1,868 | 21,333 | | | 1/1/24 | 11,761 | 134,311 | — | — | | | 1/1/24 | — | — | 17,642 | 201,466 |
2024 SUMMARY COMPENSATION TABLE
(1)Amount shown reflects the number of RSUs that had not vested as of December 31, 2024. In each case, the vesting of RSUs is contingent on the NEO’s employment with the Company not having been terminated for any reason other than retirement, death or disability prior to the applicable vesting date. In addition, such awards may vest in connection with a change in control in certain circumstances. For more information, please see “Long-Term Incentives” on page 42 of this Proxy Statement, and “Potential Payments upon Termination or Change in Control” on page 49 of this Proxy Statement. (2)Based on the December 31, 2024 closing market price of the Company’s shares of common stock on Nasdaq of $11.42 per share. (3)Includes PSU awards granted in 2023 and 2024. Vesting of PSUs is based on achievement of a performance goal that was based on TSR. For PSUs granted in 2023, the performance period covers fiscal years 2023 – 2025. For PSUs granted in 2024, the performance period covers fiscal years 2024 – 2026. Excludes PSUs issued in 2022 that were forfeited as the performance metrics were not met. In each case, the vesting of the award is also contingent on the NEO’s employment with the Company not having been terminated for any reason other than retirement, death or disability prior to the date the Compensation Committee certifies the achievement of performance goals for the relevant performance period. Pursuant to SEC rules, the amounts included in the table for PSUs granted in 2024 are based on maximum award amounts given the Company’s current performance trends, which would result in above target payout and the amounts included in the table for PSUs granted in 2023 are based on threshold award amounts given the Company’s current performance trends, which would result in a below threshold payout. In addition, such awards may vest in connection with a change in control in certain circumstances. For more information, please see “Long-Term Incentives” on page 42 of this Proxy Statement, and “Potential Payments upon Termination or Change in Control” on page 49 of this Proxy Statement.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Pay Versus Performance
Pay Versus Performance This section provides disclosure about the relationship between executive compensation actually paid to the Company’s principal executive officer (PEO) and non-PEO NEOs and certain financial performance measures of the Company for the fiscal years listed below. This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Securities Exchange Act of 1934 (the “Pay Versus Performance Rules”) and does not necessarily reflect how the Compensation Committee evaluates compensation decisions.
Pay Versus Performance
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non-PEO NEOs (4) | Total Shareholder Return | Net Income (in thousands) | | 2024 | $1,983,469 | $2,069,641 | $1,080,710 | $1,116,024 | $110.87 | $(144,344) | | 2023 | 1,864,109 | 944,692 | 1,081,412 | 793,688 | 37.35 | (27,508) | | 2022 | 1,819,537 | (678,861) | 980,060 | 168,560 | 81.12 | 66,540 |
Pay Versus Performance
(1) The following table lists the PEO and non-PEO NEOs for each of fiscal years 2024, 2023 and 2022.
Pay Versus Performance
| Year | PEO | Non-PEO NEOs | | 2024 | Mark K. Mason | John M. Michel and William D, Endresen | | 2023 | Mark K. Mason | John M. Michel and William D, Endresen | | 2022 | Mark K. Mason | John M. Michel, William D, Endresen, Darrell S. van Amen and Godfrey B. Evans |
Pay Versus Performance
(2) The dollar amounts reported represent the amount of “compensation actually paid,” as calculated in accordance with the Pay Versus Performance Rules. These dollar amounts do not reflect the actual amounts of compensation earned by or paid to the NEOs during the applicable year. For purposes of calculating “compensation actually paid,” the fair value of equity awards is calculated in accordance with ASC Topic 718 using the same assumption methodologies used to calculate the grant date fair value of awards for purposes of the Summary Compensation Table (refer to “2024 Summary Compensation Table” for additional information). (3) The following table shows the amounts deducted from and added to the Summary Compensation Table total to calculate “compensation actually paid” to Mr. Mason in accordance with the Pay Versus Performance Rules for 2024:
Pay Versus Performance
| Equity Award Adjustments | | | | | | Year | Reported Summary Compensation Table Total for PEO | Less: Reported Value of Equity Awards | Plus: Equity Award Adjustments | Compensation Actually Paid to PEO | | 2024 | $1,983,469 | $858,459 | $944,631 | $2,069,641 |
Pay Versus Performance
(4) The following table shows the amounts deducted from and added to the average Summary Compensation Table total compensation to calculate the average “compensation actually paid” to the non-PEO NEOs in accordance with the Pay Versus Performance Rules for 2024:
Pay Versus Performance
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Less: Average Reported Value of Equity Awards | Plus: Average Equity Award Adjustments | Average Compensation Actually Paid to Non-PEO NEOs | | 2024 | $1,080,710 | $300,519 | $335,833 | $1,116,024 |
Relationship Between “Compensation Actually Paid” and Performance Measures
Relationship Between “Compensation Actually Paid” and Performance Measures In accordance with the Pay Versus Performance Rules, the charts below illustrate how “compensation actually paid” to the NEOs aligns with the Company’s financial performance as measured by TSR and net income. Compensation Actually Paid and TSR Compensation Actually Paid and Net Income