DEF 14A of Esquire Financial Holdings, Inc., Apr 18, 2024

DEF 14A of Esquire Financial Holdings, Inc.

Filed Apr 18, 2024 · FY20230001558370-24-005276

Open on EDGAR

  1. ANNUAL MEETING OF STOCKHOLDERS

    | 2. | the approval of the Esquire Financial Holdings, Inc. 2024 Equity Incentive Plan; |

  2. PROPOSAL I—ELECTION OF DIRECTORS

    PROPOSAL I—ELECTION OF DIRECTORS Our Board of Directors is comprised of nine members. Our bylaws provide that directors are divided into three classes, with one class of directors elected annually. Our directors are generally elected to serve for a three-year period and until their respective successors shall have been elected and shall qualify. Three directors will be elected at the Annual Meeting to serve for a three-year period until their respective successors shall have been elected and one director will be elected at the Annual Meeting to serve a one-year term until her respective successor shall have been elected and shall qualify. The Board of Directors has nominated the following persons to serve as directors for three-year terms: Anthony Coelho, Richard T. Powers, and Andrew C. Sagliocca. The Board of Directors has nominated Rena Nigam to serve as director for a one-year term. All nominees are currently directors of Esquire Financial and Esquire Bank, National Association (“Esquire Bank” or the “Bank”) . The Board of Directors recommends a vote “FOR” the election of the nominees. The table below sets forth certain information regarding the nominees, the other current members of our Board of Directors whose term of office will continue following the Annual Meeting, and executive officers who are not directors, including the terms of office of board members. It is intended that the proxies solicited on behalf of the Board of Directors (other than proxies in which the vote is withheld as to any nominee) will be voted at the Annual Meeting for the election of the proposed nominees. If a nominee is unable to serve, the shares represented by all such proxies will be voted for the election of such substitute as the Board of Directors may determine. At this time, the Board of Directors knows of no reason why any of the nominees might be unable to serve, if elected.

  3. PROPOSAL I—ELECTION OF DIRECTORS

    | | | | | Current | | | Position(s) Held | | Director | Term | | Name | With Esquire Financial | Age (1) | Since (2) | Expires | | NOMINEES | | | | | | Anthony Coelho | Chairman | 81 | 2010 | 2024 | | Rena Nigam | Director | 50 | 2024 | 2024 | | Richard T. Powers | Director | 76 | 2006 | 2024 | | Andrew C. Sagliocca | Vice Chairman, Chief Executive Officer, and President | 56 | 2008 | 2024 | | CONTINUING DIRECTORS | | | | | | Todd Deutsch | Director | 51 | 2015 | 2025 | | Selig Zises | Director | 82 | 2009 | 2025 | | Joseph Melohn | Director | 37 | 2022 | 2026 | | Robert J. Mitzman | Director | 69 | 2007 | 2026 | | Kevin C. Waterhouse | Director | 56 | 2006 | 2026 | | EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS | | | | | | Eric S. Bader | Executive Vice President and Chief Operating Officer | 47 | N/A | N/A | | Ari P. Kornhaber | Executive Vice President, Head of Corporate Development | 52 | N/A | N/A | | Michael Lacapria | Senior Vice President, Chief Financial Officer | 46 | N/A | N/A |

  4. PROPOSAL I—ELECTION OF DIRECTORS

    | (1) As of April 1, 2024. |

  5. PROPOSAL I—ELECTION OF DIRECTORS

    | (2) Includes service with Esquire Bank and Esquire Financial. |

  6. PROPOSAL I—ELECTION OF DIRECTORS

    The biographies of each of the nominees, continuing board members who will constitute the Board following the Annual Meeting and executive officers are set forth below. With respect to directors and nominees, the biographies also contain information regarding the person’s business experience and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee to determine that the person should serve as a director. Each director of Esquire Financial is also a director of Esquire Bank.

  7. Directors

    Directors Anthony Coelho, Chairman. Mr. Coelho has served as Chair of the Advisory Board for Bender Consulting Services since 2002 and was Chair and a Board Member for the American Association of People with Disabilities and the Lead Independent Director of Service Corporation International. Mr. Coelho was a prominent member of the U.S. House of Representatives from 1978 – 1989. While a member of the House of Representatives, he authored the Americans with Disabilities Act, widely recognized as one of the most important pieces of civil rights legislation in the last 40 years. Mr. Coelho’s former and current business affiliations include service on a number of corporate boards and as CEO of Wertheim Schroder Investment Services. Mr. Coelho has been a member of the Esquire Bank board of directors since 2010 and has been Chairman of the Board of Directors since August 2018. Mr. Coelho provides the Board with valuable perspective on general business oversight, as well as potential strategic initiatives. Todd Deutsch, Director. Mr. Deutsch is a private investor and entrepreneur. Since 2012, Mr. Deutsch has managed his family office. From 2009 to 2012, Mr. Deutsch was the Portfolio Manager/Principal at Bascom Hill Partners, a wealth management services company. Prior to running his family office and Bascom Hill Partners, Mr. Deutsch spent twenty years as a trader with Goldman Sachs and various hedge funds. Mr. Deutsch has been a member of the Esquire Bank board of directors since 2015. Mr. Deutsch provides the Board with extensive financial and business experience as well as valuable insight into managing and overseeing a business. Joseph Melohn, Director. Mr. Melohn is a private investor and entrepreneur. Since 2006, Mr. Melohn has served as the President of The Expansion Group Inc., and Expansion VC a venture capital firm focused on early and growth stage companies. His responsibilities include managing and supervising a real estate portfolio and all family office investments. Mr. Melohn has invested in technology, energy, and consumer marketplace companies, as well as having worked with many funds in the asset-based lending sector. Mr. Melohn has been a member of the Esquire Bank board of directors since 2022. Mr. Melohn provides the Board with extensive financial and business experience as well as valuable insight into the technology and banking industry. Robert J. Mitzman, Director. Mr. Mitzman has over 40 years of experience in the worldwide specialized courier industry. In 1981, Mr. Mitzman founded the Quick Group of Companies (“Quick”), a globally renowned and award-winning organization at the forefront of revolutionizing the time-critical logistics industry. As its Chairman and Chief Executive Officer, Mr. Mitzman grew Quick into an international specialized courier company with offices around the globe to provide complex, and often life-saving, logistics solutions to companies with time and mission-critical needs in the fields of life science, pharma and biotech, aerospace, automotive, and technology. Mr. Mitzman is currently an active private investor, managing his family office and real estate holdings. Mr. Mitzman has been a member of the Board of Directors for Esquire Bank since 2007. Mr. Mitzman provides the Board with extensive executive management experience as a Chief Executive Officer with global strategic, operating, human capital, and technology experience. Rena Nigam, Director. Ms. Nigam is the Founder and Chief Executive Officer of Meytier Inc., an AI-enabled, hiring and talent intelligence platform which works with companies across multiple business sectors. Ms. Nigam founded Meytier Inc. in 2019. Other previous executive appointments include President and Board Member of Incedo Inc. from 2015 through 2018, and Co-Founder of Aspark (acquired by Liquidhub, now a part of Capgemini) from 2011 to 2014, both focused on technology innovation. Ms. Nigam has 25 years of experience in high growth global ventures as an executive, entrepreneur, and investor across publicly traded and private companies as well as innovation in the financial services technology and payments space. Ms. Nigam is a passionate advocate for advancing women in technology and finance and her extensive experience in the financial services industry provides the Board with unique experience and insight on the needs and challenges of the banking sector as well as Esquire Bank. Richard T. Powers, Director. Mr. Powers served as Esquire Bank’s President and Chief Executive Officer from Esquire Bank’s pre-opening organizational stage in 2005 through 2008. Prior to joining Esquire Bank, Mr. Powers was President, U.S. Direct Services for Fiserv CBS. Mr. Powers has over 40 years of experience in all areas of the financial services industry, both banking and brokerage. He has served as President and Chief Operating Officer of Waterhouse National Bank and Executive Vice President and Chief Operations Officer of North Fork Bank, among other banking positions. Since 2009, Mr. Powers has been the owner of RT Powers & Associates, a banking and financial services consultant firm and he is recognized as an expert witness for banking technology patent infringement. Mr. Powers is a founding organizer of Esquire Bank. Mr. Powers provides the Board with important experience and insight into the financial services industry. Andrew C. Sagliocca, Vice Chairman, Chief Executive Officer and President. Mr. Sagliocca has served as President and Chief Executive Officer of Esquire Bank since January 2009 and its financial holding company since inception. In 2023, Mr. Sagliocca was also appointed as Vice Chairman of the Board. Prior to his time in his current role, Mr. Sagliocca served as Esquire’s Chief Financial Officer when he joined in February 2007. Prior to joining Esquire, Mr. Sagliocca was a senior financial officer for 13 years at North Fork Bank and was formerly a manager in KPMG LLP’s Financial Services Group, specializing in financial institutions. Mr. Sagliocca has over 35 years of experience in the financial services industry. Mr. Sagliocca’s extensive experience in financial services provides the Board with a unique perspective on Esquire Bank’s business and strategic direction. Kevin Waterhouse, Director. Mr. Waterhouse is Vice President and Investment Advisor of L.M. Waterhouse & Company, a Valhalla, New York-based registered investment advisory firm. Mr. Waterhouse has worked at L.M. Waterhouse since 2002. Mr. Waterhouse previously served as First Vice President of Operations & Product Development of Waterhouse National Bank. Mr. Waterhouse is a founding organizer of Esquire Bank. Mr. Waterhouse provides the Board with a valuable perspective on general business oversight as well as on potential strategic initiatives. Selig A. Zises, Director. Mr. Zises is a retired investor. Mr. Zises was the founder and CEO of Integrated Resources, a financial services company, from 1969 to 1988. Mr. Zises is a founding organizer of Esquire Bank. Mr. Zises’ extensive experience in the financial services industry provides the Board with an important perspective on the Bank’s business and strategic direction.

  8. Meetings and Committees of the Board of Directors

    | ● | to reward the executive management team for the enhancement of stockholder value based on our annual performance and the market price of our stock; |

  9. Meetings and Committees of the Board of Directors

    | ● | to provide compensation rewards that are adequately balanced between short-term and long-term performance goals; |

  10. Meetings and Committees of the Board of Directors

    | ● | to maintain compensation levels that are competitive with other financial institutions, particularly those in our peer group based on asset size and market area. |

  11. Executive Officer Compensation

    | Summary Compensation Table | | | | | | | | | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) | All Other Compensation ($) (2) | Total ($) | | Andrew C. Sagliocca | 2023 | $700,000 | $1,000,000 | $1,304,640 | - | $72,260 | $3,076,900 | | Vice Chairman, Chief Executive Officer and President | 2022 | $672,404 | $750,000 | $1,057,500 | - | $54,081 | $2,533,985 | | Eric S. Bader | 2023 | $575,000 | $500,000 | $652,320 | - | $63,026 | $1,790,346 | | Executive Vice President and Chief Operating Officer | 2022 | $550,000 | $375,000 | $528,750 | - | $51,856 | $1,505,606 | | Ari P. Kornhaber | 2023 | $575,000 | $650,000 | $724,800 | - | $68,716 | $2,018,516 | | Executive Vice President, Head of Corporate Development | 2022 | $550,000 | $375,000 | $528,750 | - | $51,929 | $1,505,679 |

  12. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table shows stock awards outstanding for each of our NEOs as of December 31, 2023.

  13. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards | | | | | Stock Awards | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Grant Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested (2) ($) | | Andrew C. Sagliocca | 8/1/2014 | 10,000 | - | 12.50 | 8/1/2024 | 1/23/2018 | 5,000(3) | 249,800 | | | 9/1/2015 | 26,677 | - | 12.50 | 9/1/2025 | 12/10/2018 | 10,000(4) | 499,600 | | | 9/1/2016 | 58,250 | - | 12.50 | 9/1/2026 | 12/19/2019 | 21,667(5) | 1,082,483 | | | | | | | | 12/16/2020 | 34,000(6) | 1,698,640 | | | | | | | | 12/9/2021 | 30,450(7) | 1,521,282 | | | | | | | | 12/19/2022 | 25,000(8) | 1,249,000 | | | | | | | | 12/15/2023 | 27,000(9) | 1,348,920 | | Eric S. Bader | 8/1/2014 | 6,550 | - | 12.50 | 8/1/2024 | 1/23/2018 | 2,500(3) | 124,900 | | | 9/1/2015 | 17,785 | - | 12.50 | 9/1/2025 | 12/10/2018 | 5,000(4) | 249,800 | | | 9/1/2016 | 29,125 | - | 12.50 | 9/1/2026 | 12/19/2019 | 10,834(5) | 541,267 | | | | | | | | 12/16/2020 | 17,000(6) | 849,320 | | | | | | | | 12/9/2021 | 15,225(7) | 760,641 | | | | | | | | 12/19/2022 | 12,500(8) | 624,500 | | | | | | | | 12/15/2023 | 13,500(9) | 674,460 | | Ari P. Kornhaber | 8/1/2014 | 10,000 | - | 12.50 | 8/1/2024 | 1/23/2018 | 2,500(3) | 124,900 | | | 9/1/2015 | 8,892 | - | 12.50 | 9/1/2025 | 12/10/2018 | 5,000(4) | 249,800 | | | 5/2/2016 | 7,500 | - | 12.50 | 5/2/2026 | 12/19/2019 | 10,834(5) | 541,267 | | | 9/1/2016 | 29,125 | - | 12.50 | 9/1/2026 | 12/16/2020 | 17,000(6) | 849,320 | | | | | | | | 12/9/2021 | 15,225(7) | 760,641 | | | | | | | | 12/19/2022 | 12,500(8) | 624,500 | | | | | | | | 12/15/2023 | 15,000(9) | 749,400 |

  14. Outstanding Equity Awards at Fiscal Year End

    | (1) All stock option awards are fully vested. |

  15. Outstanding Equity Awards at Fiscal Year End

    | (2) Amounts shown are based on the fair market value of Esquire Financial common stock on December 31, 2023 of $49.96. |

  16. Outstanding Equity Awards at Fiscal Year End

    | (3) Vest over six years, one third in each year commencing on January 23, 2022. |

  17. Outstanding Equity Awards at Fiscal Year End

    | (4) Vest over six years, one third in each year commencing on December 10, 2022. |

  18. Outstanding Equity Awards at Fiscal Year End

    | (5) Vest over six years, one third in each year commencing on December 19, 2023. |

  19. Outstanding Equity Awards at Fiscal Year End

    | (6) Vest over six years, one third in each year commencing on December 16, 2024. |

  20. Outstanding Equity Awards at Fiscal Year End

    | (7) Vest over six years, one third in each year commencing on December 9, 2025. |

  21. Outstanding Equity Awards at Fiscal Year End

    | (8) Vest over six years, one third in each year commencing on December 19, 2026. |

  22. Outstanding Equity Awards at Fiscal Year End

    | (9) Vest over six years, one third in each year commencing on December 15, 2027. |

  23. Pay Versus Performance

    Pay Versus Performance Pay Versus Performance Table. The table below provides for the years ended December 31, 2023, 2022 and 2021, the compensation for our NEOs for the past three years as set forth in the Summary Compensation Table, the Compensation Actually Paid to our CEO and, on an average basis, our Non-CEO NEOs, our Total Shareholder Return (“TSR”), and our Net Income.

  24. Pay Versus Performance

    | | | | | | Value of | | | | | | | | Initial Fixed | | | | | | Average | | $100 | | | | | | Summary | Average | Investment | | | | Summary | | Compensation | Compensation | Based On | | | | Compensation | Compensation | Table Total | Actually Paid | Total | | | | Table Total | Actually Paid | for Non-CEO | to Non-CEO | Shareholder | Net | | Year | for CEO(1) | to CEO(2) | NEOs(3) | NEOs(4) | Return | Income | | 2023 | $3,076,900 | $4,065,937 | $1,904,431 | $2,400,180 | $264 | $41,010,649 | | 2022 | $2,533,985 | $4,168,117 | $1,505,643 | $2,322,709 | $227 | $28,518,378 | | 2021 | $2,244,563 | $3,645,142 | $1,332,946 | $2,033,235 | $164 | $17,925,228 |

  25. Pay Versus Performance

    | (1) Our CEO for each year presented is Andrew C. Sagliocca. |

  26. Pay Versus Performance

    | (2) These amounts represent the exclusions and inclusions of certain amounts for the CEO as set forth in the table below. |

  27. Pay Versus Performance

    | (3) The individuals comprising the Non-CEO NEOs for each year presented are Eric S. Bader and Ari P. Kornhaber. |

  28. Pay Versus Performance

    | (4) These amounts represent the exclusions and inclusions of certain amounts for the Non-CEO NEOs as set forth in the table below. |

  29. Pay Versus Performance

    Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the CEO and the Non-CEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the Summary Compensation Table.

  30. Pay Versus Performance

    | | Summary | | | Compensation | | | Compensation Table | Exclusion of Stock | Inclusion of Equity | Actually Paid to | | Year | Total for CEO ($) | Awards for CEO ($) | Awards for CEO ($) | CEO ($) | | 2023 | $3,076,900 | $1,304,640 | $2,293,677 | $4,065,937 | | 2022 | $2,533,985 | $1,057,500 | $2,691,632 | $4,168,117 | | 2021 | $2,244,563 | $945,168 | $2,345,747 | $3,645,142 | | | Average Summary | | | Average | | | Compensation Table | Average Exclusion of | Average Inclusion of | Compensation | | | Total for Non-CEO | Stock Awards for | Equity Awards for | Actually Paid to | | Year | NEOs ($) | Non-CEO NEOs ($) | Non-CEO NEOs ($) | Non-CEO NEOs ($) | | 2023 | $1,904,431 | $688,560 | $1,184,309 | $2,400,180 | | 2022 | $1,505,643 | $528,750 | $1,345,816 | $2,322,709 | | 2021 | $1,332,946 | $472,584 | $1,172,873 | $2,033,235 |

  31. Pay Versus Performance

    The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:

  32. Pay Versus Performance

    | | Year-End Fair | | Change in Fair | | | | | Value of Equity | Change in Fair | Value from Last | Value of Dividends | | | | Awards Granted | Value from Last | Day of Prior Year | or Other Earnings | | | | During Year That | Day of Prior Year | to Vesting Date of | Paid on Stock or | | | | Remained | to Last Day of | Unvested Equity | Option Awards | | | | Unvested as of | Year of Unvested | Awards that | Not Otherwise | Total - Inclusion of | | | Last Day of Year | Equity Awards for | Vested During | Included for | Equity Values for | | Year | for CEO ($) | CEO ($) | Year for CEO ($) | CEO ($) | CEO ($) | | 2023 | $1,348,920 | $844,984 | $99,773 | $ - | $2,293,677 | | 2022 | $1,081,500 | $1,492,932 | $117,200 | $ - | $2,691,632 | | 2021 | $959,175 | $1,386,572 | $ - | $ - | $2,345,747 | | | Average Year-End Fair | | Average Change in Fair | Average Value of | | | | Value of Equity | Average Change in Fair | Value from Last | Dividends | | | | Awards Granted | Value from Last | Day of Prior Year | or Other Earnings | | | | During Year That | Day of Prior Year | to Vesting Date of | Paid on Stock or | | | | Remained | to Last Day of | Unvested Equity | Option Awards | Total - Average | | | Unvested as of | Year of Unvested | Awards that | Not Otherwise | Inclusion of | | | Last Day of Year | Equity Awards | Vested During | Included | Equity Values for | | | for Non-CEO | for Non-CEO | Year for Non-CEO | for Non-CEO | for Non-CEO | | Year | NEOs ($) | NEOs ($) | NEOs ($) | NEOs ($) | NEOs ($) | | 2023 | $711,930 | $422,495 | $49,884 | $ - | $1,184,309 | | 2022 | $540,750 | $746,466 | $58,600 | $ - | $1,345,816 | | 2021 | $479,588 | $693,285 | $ - | $ - | $1,172,873 |

  33. Relationship Between Compensation Actually Paid and Performance Measures

    Relationship Between Compensation Actually Paid and Performance Measures We believe the tables above demonstrate the alignment between the compensation actually paid to our NEOs and the Company’s performance measures. The following charts provide the relationship between Compensation Actually Paid to our CEO, the average of Compensation Actually Paid to our other NEOs, the Company’s total TSR, and the Company’s net income over the three most recently completed fiscal years.

  34. Director Compensation

    Director Compensation The following table sets forth for the year ended December 31, 2023 certain information as to total compensation paid to non-employee directors. Mr. Sagliocca did not receive any additional compensation for service on our Board or Esquire Bank’s Board.

  35. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) (3) | Option Awards ($)(2) | Total ($) | | Anthony Coelho | 202,000 | 195,020 | - | 397,020 | | Todd Deutsch | 73,000 | 80,018 | - | 153,018 | | Marc Grossman (4) | 22,833 | - | - | 22,833 | | Russ M. Herman (4) | 22,833 | - | - | 22,833 | | Joseph Melohn | 52,000 | 80,018 | - | 132,018 | | Robert J. Mitzman | 76,000 | 80,018 | - | 156,018 | | Richard T. Powers | 78,000 | 80,018 | - | 158,018 | | Kevin C. Waterhouse | 83,000 | 80,018 | - | 163,018 | | Selig Zises | 70,000 | 80,018 | - | 150,018 |

  36. Director Compensation

    | (1) These amounts represent restricted stock awards granted to certain directors in December 2023. The stock awards were granted on December 15, 2023 at a per share fair value of $48.32 as determined under ASC Topic 718. |

  37. Director Compensation

    | (2) At December 31, 2023, Directors Coelho, Deutsch, Grossman, Herman, Mitzman, Powers, Waterhouse and Zises held 42,231, 23,750, 14,250, 1,584, 42,231, 3,000, 9,750, and 0 outstanding stock options, respectively. |

  38. Director Compensation

    | (3) At December 31, 2023, Directors Coelho, Deutsch, Grossman, Herman, Melohn, Mitzman, Powers, Waterhouse and Zises held 23,037, 7,174, 1,334, 1,501, 2,656, 9,407, 7,906, 4,073, and 7,906 unvested restricted stock awards, respectively. |

  39. Director Compensation

    | (4) Directors Russ M. Herman and Marc Grossman discontinued service on the Board upon the expiration of their terms at the 2023 Annual Meeting. |