DEF 14A of Capital Bancorp Inc
Filed Apr 2, 2024 · FY20230001628280-24-014403
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
Classification of the Company’s Directors
Classification of the Company’s Directors The Company’s Board has established the current size of the Board at eleven (11) members. The Board is divided into three classes of directors serving staggered three-year terms. One class of directors is elected by our stockholders at each annual stockholders’ meeting for a term of three years, and the elected directors hold office until their successors are elected and qualified or until such director’s earlier death, resignation or removal. •The Class I directors are Joshua Bernstein, Scot R. Browning, Fred J. Lewis and Mary Ann Scully, and their terms will expire at the Annual Meeting; •The Class II directors are Edward F. Barry, C. Scott Brannan, Randall J. Levitt, and Deborah Ratner-Salzberg, and their terms will expire at the 2025 annual meeting of stockholders; and •The Class III directors are Jerome R. Bailey, Steven J. Schwartz and James F. Whalen, and their terms will expire at the 2026 annual meeting of stockholders.
Election Procedures; Term of Office
Election Procedures; Term of Office At each annual meeting of stockholders, or special meeting in lieu thereof, upon the expiration of the term of a class of directors, the successors to such directors will be elected to serve from the time of election and qualification until the third annual meeting following his or her election and the election and qualification of his or her successor. There is no cumulative voting with respect to the election of directors. Any change in the Board resulting from an increase or decrease in the number of directors will be distributed by the Board among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.
Nominees for Election as Directors
Nominees for Election as Directors Our Board has approved the nomination of Joshua Bernstein, Scot R. Browning, Fred J. Lewis, and Mary Ann Scully for re-election as Class I directors. Information about the principal occupations, business experience and qualifications of these nominees is provided below under the heading “Qualifications of 2024 Director Nominees and Continuing Directors.”
Board Diversity Disclosure
Board Diversity Disclosure In accordance with the Nasdaq Listing Rule 5606, each Nasdaq-listed company must annually disclose information on each director’s voluntary self-identified characteristics. The table below includes information on the diversity of the Board of Directors based upon such information voluntarily provided by each director.
Board Diversity Disclosure
| Board Diversity Matrix | | | | | | | | | | | As of April 2, 2024 | | | | As of April 4, 2023 | | | | | Total Number of Directors | 11 | | | | 10 | | | | | Part I: Gender Identity | Female | Male | Non- Binary | Did not Disclose Gender | Female | Male | Non- Binary | Did not Disclose Gender | | Directors | 2 | 8 | 0 | 1 | 1 | 8 | 0 | 1 | | Part II: Demographic Background | | | | | | | | | | African American or Black | 0 | 1 | 0 | 0 | 0 | 1 | 0 | 0 | | Alaska Native or Native American | | | | | | | | | | Asian | | | | | | | | | | Hispanic or Latinx | | | | | | | | | | Native Hawaiian or Pacific Islander | | | | | | | | | | White | 2 | 6 | 0 | 0 | 1 | 7 | 0 | 0 | | Two or More Races or Ethnicities | | | | | | | | | | LGBTQ+ | 0 | | | | 0 | | | | | Did Not Disclose Demographic Background | 2 | | | | 1 | | | |
Board Skills and Experience Matrix
Board Skills and Experience Matrix A summary of the attributes and qualifications of our directors is presented below.
Board Skills and Experience Matrix
| Individual Director Characteristics | | | | | | | | | | | | | | Bailey | Barry | Bernstein | Brannan | Browning | Lewis | Levitt | Ratner-Salzberg | Schwartz | Scully | Whalen | | Skills and Experience | | | | | | | | | | | | | Audit/Financial Reporting | | | | • | | | | | • | | | | Corporate Governance | | • | | • | | • | • | • | • | • | | | Strategic Planning/M&A | | • | | • | | | | | | • | | | Risk Management | | • | | • | | | | | | • | | | Public Company Oversight | | • | | • | | | | | | • | | | Financial Services | • | • | • | | • | • | • | | • | • | • | | Market Familiarity | • | | • | | • | • | • | | • | | • | | Real Estate | • | | • | | • | • | | • | | | • | | Tenure and Independence | | | | | | | | | | | | | Tenure (years) | 3 | 9 | 12 | 6 | 22 | 1 | 12 | 8 | 22 | 0(1) | 23 | | Independence | • | | • | • | | • | • | • | • | • | • |
Board Skills and Experience Matrix
(1) Ms. Scully was appointed to the Board of Directors on July 14, 2023.
QUALIFICATIONS OF 2024 DIRECTOR NOMINEES AND CONTINUING DIRECTORS
QUALIFICATIONS OF 2024 DIRECTOR NOMINEES AND CONTINUING DIRECTORS
QUALIFICATIONS OF 2024 DIRECTOR NOMINEES AND CONTINUING DIRECTORS
| Class I Director Nominees: | | | | Joshua B. Bernstein Age: | 61 | Mr. Bernstein has served on the Board of Directors of the Company since 2012 and served on the Board of Directors of the Bank from 2007 to 2012. Since 2005, he has been the Chief Executive Officer of Bernstein Management Corporation and the Managing Principal of that company’s investment and development affiliates. The Bernstein entities own and manage 90 properties encompassing 5,500 apartments and over 4 million square feet of commercial space in the Washington, D.C. metropolitan area. Mr. Bernstein serves as a director on the Washington Board of Truist Bank and he is a member of the Executive Committee of the Federal City Council. Mr. Bernstein is a past Board Chair of the Meyer Foundation and the Sidwell Friends School, and is President of the Diane and Norman Bernstein Charitable Family Foundation. Mr. Bernstein received a Bachelor of Arts in Economics from Tufts University, magna cum laude, a general course degree from the London School of Economics and Political Science, and a Master of Business Administration from Harvard Business School. Mr. Bernstein's qualifications to serve on our Board include his experience in real estate development and operating businesses similar to our typical customers, and his familiarity with and involvement in our key market areas. | | Director Since: | 2012 | | | Committees: Nominating and Corporate Governance; Compensation (Chair); Executive; Environmental, Social & Governance (Chair) | | | | Scot R. Browning Age: | 62 | Mr. Browning has served as President of the Bank, and as a director of the Company and the Bank, since its recapitalization by the current ownership group in 2002. In 2023, Mr. Browning's role changed to President of CRE and Specialty Lending. He is also Vice President and Assistant Secretary of the Company. He has over 30 years of banking experience, with a concentration in commercial lending. He currently oversees the commercial real estate and specialty lending department. In addition, he manages the deposit business development teams. From 1997 to 2002, prior to joining the Bank, he was Senior Vice President, Corporate Lending at United Bank in Bethesda, Maryland and at Century National Bank prior to its acquisition by United Bank. Mr. Browning received a Bachelor of Business Administration in Finance from Stetson University. Mr. Browning also serves on the board of directors of the Business Finance Group, Inc., a Virginia based CDC that originates SBA 504 mortgage loans, and formerly served on the board of directors of Rockville Economic Development, Inc., a partnership formed in 1997 by the City of Rockville to strengthen and broaden the City's economic base through business entrepreneurship. Mr. Browning's qualifications to serve on our Board include his extensive financial knowledge and operational experience, as well as his familiarity and experience with the Bank. | | Director Since: | 2002 | | | Committee: Environmental, Social & Governance | | |
QUALIFICATIONS OF 2024 DIRECTOR NOMINEES AND CONTINUING DIRECTORS
| Fred J. Lewis Age: | 58 | Mr. Lewis has served on the Board of Directors of the Company since February 2023 and on the Board of Directors of the Bank since 2018. Mr. Lewis is the founder and managing partner of Dominion Financial Services as well as the affiliated Dominion Group of companies. Mr. Lewis provides daily strategic oversight in all of The Dominion Group companies with a special focus on operations and fundraising. The Dominion Group companies include Dominion Properties, a "fix and flip" renovation company that operates throughout Maryland; Dominion Financial Services, a private lender of single family fix and flip and small commercial loans in 49 states; Dominion Management, a specialized property manager that manages single family houses throughout Maryland; and Dominion is Insurance, a captive insurance company that insures the business risks associated with all the Dominion Group of Companies. Mr. Lewis is a graduate of the George Washington University. Mr. Lewis's qualifications to serve on our Board include his extensive experience in real estate, commerce and financing, as well as his familiarity and experience with the Bank. | | Director Since: | 2023 | | | Committees: Environmental, Social & Governance | | | | Mary Ann Scully Age: | 72 | Ms.Scully has served on the Board of Directors of the Company since July 2023. Ms. Scully is the Dean of the Joseph A. Sellinger, S.J. School of Business and Management at Loyola University of Maryland. Previously, she was the co-founder of Howard Bank (formerly NASDAQ: HBMD) where she served as the Chief Executive Officer and Chairperson of its Board of Directors from 2004 until its merger with First National Bank of Pennsylvania in 2022. A lifelong banker with more than 40 years of varied executive experiences in the Maryland marketplace, Ms. Scully led teams responsible for both Howard Bank's organic growth and repeated strategic acquisitions that created the Greater Baltimore region's largest locally headquartered banking company and Maryland's third largest locally headquartered bank with more than $2 billion in assets. Mary Ann is a vice chair, director and member of the Executive Committee of the Enoch Pratt Library, vice chair of the board of Mount St Joseph College high school and served until 2022 as Vice Chair of the Greater Baltimore Committee leading their new CEO search committee. She is also a trustee for Mercy High School, the Community Foundation of Howard County Real Estate board, and the Inner Arbor Trust. She also serves on a Maryland State Comptroller work group and advisory council. Ms. Scully has been recognized publicly for her achievements in business and for her works in the community. She was given a lifetime achievement award as the CEO of the year by the Baltimore Business Journal in 2022. Also in 2022, Ms. Scully was inducted into the Business Hall of Fame by the Maryland Chamber of Commerce. In 2021, she was ranked as #14 in the Daily Record Power 100 listing, in 2020, Ms. Scully was inducted into the Business and Civic Hall of fame by the Baltimore Sun, and in 2018, she received the Industrialist of the Year award from the Baltimore Museum of Industry. Ms. Scully was named one of the Top 25 Women to Watch in Banking by American Banker newspaper in 2016 and 2017. She received her Master of Business Administration from Loyola University of Maryland and her Bachelor of Arts from Seton Hill University. She is a Loyola University of Maryland alumni laureate and a Seton Hill University Distinguished Alumna. Her executive experiences combined with her deep business connections inject a new perspective to the Board and qualify her to serve on our Board. | | Director Since: | 2023 | | | Committees: Audit | | |
QUALIFICATIONS OF 2024 DIRECTOR NOMINEES AND CONTINUING DIRECTORS
| Continuing Class III Directors: | | | | Jerome R. Bailey Age: | 47 | Mr. Bailey has served on the Board of Directors of the Bank since 2013 and serves as Vice-Chairman of the Board of the Bank, a position he has held since 2016. Since 2004, Mr. Bailey has been the Managing Member of Bailey Real Estate Holdings, LLC, a residential real estate development and full service asset-management company located in Washington, D.C. Mr. Bailey has acquired and developed close to 1,000,000 square feet of multi-family projects in Washington, D.C. Mr. Bailey is Chair of the Bank’s Loan Committee and is a member of the Bank's Asset/Liability, Strategic Innovation, Finance and Risk Committees. Mr. Bailey received a Bachelor of Business Administration in Actuarial Science from the Howard University. Mr. Bailey's qualifications to serve on our Board include his experience in real estate development and operating businesses similar to our typical customer, and his familiarity with and involvement in our key market areas, as well as his banking experience. | | Director Since: | 2021 | | | Committees: Nominating & Corporate Governance; Audit | | | | Steven J. Schwartz Age: | 69 | Mr. Schwartz was elected by the Board of Directors to serve as Chairman of the Board effective as of January 1, 2020. He has served on the Boards of Directors of the Company and the Bank since 2002. He is an attorney and certified public accountant involved in investment in, and management of, companies in a variety of industries. Mr. Schwartz has been chief financial officer and general counsel to a group of companies involved in construction, real estate development, property management, broadcasting, telecommunications, software development and wholesale distribution for over 40 years. He also manages various marketable securities portfolios for a private foundation and high net worth individuals. In 1999, Mr. Schwartz founded Prudent Capital, which manages funds that lend to and invest in profitable, later-stage operating businesses. He continues to serve as the Portfolio Manager of such funds. He has served as an adjunct professor at Georgetown University’s master’s programs and taught corporate finance and real estate tax. He served as a director of a community bank in Rockville, Maryland, from 1995 until its sale in 1998. Mr. Schwartz is a member of the Bank’s Board and is a member of its Executive, Risk Strategic Innovations and Loan Committees. Mr. Schwartz received a Bachelor of Arts in Economics from the University of Maryland and a Juris Doctor, with honors, from the University of Maryland School of Law. Mr. Schwartz's qualifications to serve on our Board include his qualifications as both an attorney and a certified public accountant, his extensive banking experience and financial knowledge, his operational experience with the Company and his years of knowledge of our constituents. | | Director Since: | 2002 | | | Committees: Audit; Compensation; Executive (Chair); Nominating and Corporate Governance | | |
QUALIFICATIONS OF 2024 DIRECTOR NOMINEES AND CONTINUING DIRECTORS
| James F. Whalen Age: | 62 | Mr. Whalen has served on the Boards of Directors of the Company and the Bank since 2001 and serves as Chairman of the Board of Directors of the Bank, a position he has held since January 2015. Since 1994, Mr. Whalen has been the Chief Executive Officer and owner of Investment Properties, Inc., a commercial real estate development and full service asset-management company located in Rockville, Maryland. Mr. Whalen has developed over 1,000,000 square feet of Class A office, industrial and multi-family projects in the Washington metropolitan area and his company continues to provide a full spectrum of asset management services for projects developed by the firm and third parties. Mr. Whalen is a member of the Bank's Loan, Asset/Liability, Finance and Executive Committees. Mr. Whalen received a Bachelor of Science in Finance from the University of South Carolina. Mr. Whalen's qualifications to serve on our Board include his experience in real estate development and operating businesses similar to our typical customers, and his familiarity with and involvement in our key market areas, as well as his extensive banking experience and his financial knowledge and operational experience with the Company. | | Director Since: | 2001 | | | Committees: Compensation; Nominating and Corporate Governance; Executive | | | | Class II Continuing Directors: | | | | Edward F. Barry Age: | 54 | Mr. Barry is the Chief Executive Officer of the Company and the Bank and has been since September 2012. Mr. Barry has served as a director of the Company since 2015 and as a director of the Bank since September 2012. Since that time, the Bank has rapidly expanded throughout the Washington, D.C. and Baltimore metropolitan areas. Under Mr. Barry’s leadership, the Bank has consistently been recognized as one of the top performing banks in the U.S. In 2017, he was named an Ernst & Young Entrepreneur of the Year for the Mid-Atlantic region. Prior to joining the Bank, Mr. Barry was Senior Vice President, Marketing and Analytics at Capital One Bank where he led the product, analytics and marketing teams for the Small Business and Business Banking divisions. Prior to that he was with Bank of America as a Senior Vice President, Strategic Marketing serving in roles across the Commercial, Consumer and Corporate Strategy groups. He also worked as a consultant at Ernst & Young/Cap Gemini in their Strategy and Transformation practice, responsible for creating and implementing initiatives to drive clients’ e-business sales and marketing strategies. Mr. Barry received a Bachelor of Science in Industrial Relations from Cornell University and a Master of Business Administration from the Darden Graduate School of Business at the University of Virginia. He serves on the board of directors of the Mid-Atlantic Chapter of The Make-A-Wish Foundation. Mr. Barry is a member of the Bank's Loan, Executive, Asset/Liability, Divisions and Human Resources Committees. Mr. Barry's qualifications to serve on our Board include his extensive banking experience and his financial knowledge and operations experience with the Company. | | Director Since: | 2015 | | | Committee: Executive | | |
QUALIFICATIONS OF 2024 DIRECTOR NOMINEES AND CONTINUING DIRECTORS
| C. Scott Brannan Age: | 65 | Mr. Brannan has served on the Board of Directors of the Company since December 2018. Mr. Brannan is Managing Director of the Mitchell & Emily Rales Family Office. Prior to joining the family office, he served as Chief Financial Officer and, prior to that, as Chairman of the Audit Committee of the board of directors of Colfax Corporation, a publicly traded industrial manufacturing company that operated in over 70 countries. At Colfax, Brannan oversaw the financing of the company’s growth, from less than $1 billion in annual revenue to over $4 billion. He also led financial reporting, treasury, taxation, risk management, investor relations and pensions. Mr. Brannan’s corporate experience also includes over a decade at Danaher Corporation (NYSE: DHR), where he held various positions in finance, including Vice President-Administration & Controller and Chief Accounting Officer. In total, Mr. Brannan has participated in over 50 acquisitions, including the strategic analysis, diligence and integration phases. His experience also includes public accountancy, where he most recently served as partner in charge of professional standards for a large regional firm. His career began at Arthur Andersen & Co., with client engagements principally in manufacturing, technology and life sciences, with significant international exposure. He received both Bachelor of Arts and Master’s degrees in Accountancy from Loyola University-Maryland, and has been an active certified public accountant in Maryland since graduating from Loyola. Mr. Brannan's qualifications to serve on our Board include his business and financial expertise. | | Director Since: | 2018 | | | Committee: Audit (Chair) | | | | Randall J. Levitt Age: | 70 | Mr. Levitt has served on the Company's Board of Directors since 2012 and the Bank's Board of Directors since 2004. Since 1996, he has been the President of Nellis Corporation, a Potomac, Maryland based, private capital management firm that manages a national portfolio of commercial real estate and provides wealth advisory services. In addition, he serves as a trustee of the United Jewish Endowment Fund of Greater Washington, DC and a member of the organization's Investment Committee. He also co-chairs the Washington, D.C. metropolitan area real estate division of the American Israel Public Affairs Committee. Mr. Levitt received a Bachelor of Arts from Brandeis University, summa cum laude, and a Juris Doctor from Yale Law School. Mr. Levitt is a member of the Bank's Loan and Asset/Liability Committees and is the Chair of the Bank’s Special Asset Committee. Mr. Levitt's qualifications to serve on our Board include his experience leading a capital management firm, his real estate expertise in the Bank's key market areas and his familiarity with our constituents. | | Director Since: | 2012 | | | Committees: Audit; Executive | | |
QUALIFICATIONS OF 2024 DIRECTOR NOMINEES AND CONTINUING DIRECTORS
| Deborah Ratner- Salzberg Age: | 70 | Ms. Ratner-Salzberg, an attorney, has served on the Company's Board of Directors since 2016. Ms. Ratner-Salzberg retired as Chair, Brookfield Properties DC Region in January 2020, a position she held since December 2018. Prior to that, she was President of Forest City Washington, Inc., a division of Forest City Realty, Inc., a Cleveland, Ohio based real estate firm specializing in the development, construction, ownership and management of mixed-use, commercial, and residential developments, and served in various capacities with Forest City since 1985. Ms. Ratner-Salzberg has been a board member of CubeSmart (formerly known as U-Store-It Trust) (NYSE: CUBE) since 2013, a publicly-traded real estate investment trust focused on self-storage facilities. Ms. Ratner-Salzberg is active with numerous District of Columbia community, charitable and professional organizations, including membership on the board of the Federal City Council, the New York Common Real Estate Advisory Committee, the Foundation for the National Archives, the Jewish Federation of Greater Washington, the United Jewish Endowment Fund, the board of trustees of Kenyon College, and the Board of Plant Word. Ms. Ratner-Salzberg's qualifications to serve on our Board include her experience in corporate governance matters gained through her experience serving on boards of directors and her knowledge and experience in the planning, development, construction and management of new construction, adaptive re-use and redeveloped real estate projects through her prior roles. | | Director Since: | 2016 | | | Committees: Nominating and Corporate Governance (Chair); Environmental, Social and Governance | | |
COMPENSATION OF NON-EMPLOYEE DIRECTORS
COMPENSATION OF NON-EMPLOYEE DIRECTORS The following table sets forth compensation paid or awarded to, or earned by, each of our directors (except for Messrs. Barry and Browning, whose compensation is disclosed under “Summary Compensation Table” below) during 2023. Each of the Company's directors also served as directors of the Bank during 2023.
COMPENSATION OF NON-EMPLOYEE DIRECTORS
| | Fees Earned | | | | | | or Paid in | Stock | Option | | | | Cash | Awards | Awards | Total | | Name | ($) | ($) (1) | ($) (1) | ($) | | Jerome R. Bailey | 71,000 | 40,000 | 39,555 | 150,555 | | Joshua B. Bernstein | 23,800 | 32,000 | 31,644 | 87,444 | | Joseph M. Greene(2) | 1,200 | 10,000 | 9,886 | 21,086 | | Randall J. Levitt | 40,000 | 32,000 | 31,644 | 103,644 | | Fred J. Lewis(3) | 54,800 | 40,000 | 39,555 | 134,355 | | Deborah Ratner-Salzberg | 15,400 | 27,000 | 26,695 | 69,095 | | Steven J. Schwartz | 109,400 | 40,000 | 39,555 | 188,955 | | Mary Ann Scully | 16,400 | — | — | 16,400 | | James F. Whalen | 87,000 | 40,000 | 39,555 | 166,555 | | C. Scott Brannan | 18,000 | 27,000 | 26,695 | 71,695 |
COMPENSATION OF NON-EMPLOYEE DIRECTORS
(1) Represents the grant date fair value of stock awards and option awards calculated in accordance with Financial Accounting Standards Board Account Standards Codification Topic 718 ("FASB ASC Topic 718"). A stock award was granted on January 1, 2023, at a per share price of $23.54. The grant date fair value of options awarded to directors on January 1, 2023 was $11.35. See Note 15 to the consolidated audited financial statements contained in the 2023 Annual Report regarding assumptions underlying valuation of equity awards. The fair market value of shares was based on 100% of the closing price per share of our common stock on the date of grant. (2) Mr. Greene retired from the Company's Board effective February 1, 2023. (3) Mr. Lewis was appointed to the Company's Board of Directors in February 2023, however, he has been a member of the Bank's Board of Directors since 2018. The fees disclosed in this table are fees paid to Mr. Lewis for his service on the Company's and the Bank's Boards of Directors. For the year ended December 31, 2023, the Company's directors, other than the Chairman of the Board, received a $500 monthly retainer in cash. Members of the Company's Audit Committee and Compensation Committee received a $500 monthly retainer in cash. Members of the Nominating and Governance Committee received a $250 monthly retainer in cash. Members and the Chair of the Environmental, Social and Governance Committee received a $200 monthly retainer in cash. Mr. Schwartz received a monthly retainer of $5,000 for his services as Chairman of the Board of the Company. The Chair of the Company's Audit Committee, Compensation Committee and Nominating and Governance Committee received a monthly retainer of $1,000 in cash. For the year ended December 31, 2023, the Bank's directors, other than the Bank’s Chairman of the Board, received $800 in cash for each meeting attended of the Bank's Board of Directors. The Bank’s Chairman of the Board received a monthly retainer of $5,000 in cash. For the year ended December 31, 2023, members of the Bank’s Loan Committee, other than the Bank’s Chairman of the Board, Chief Executive Officer and the Chair of the Loan Committee, who participate in sixty percent or more of the Loan Committee meetings received a monthly retainer of $800 in cash. The Bank’s Loan Committee Chair received a monthly retainer of $2,400 in cash. For the year ended December 31, 2023, members of the Bank’s Audit and Compliance Committee, other than the Chair of the Audit and Compliance Committee, received a $400 monthly retainer in cash. The Chair of the Bank’s Audit and Compliance Committee received a monthly retainer of $800 in cash. For the year ended December 31, 2023, members of the Bank’s Finance Committee, other than Chair of the Finance Committee, received a monthly retainer of $400 in cash. The Chair of the Bank’s Finance Committee received a monthly retainer of $800 in cash. For the year ended December 31, 2023, members of the Bank's Asset/Liability Committee received a monthly retainer of $400 in cash. The Chair of the Bank's Asset/Liability Committee received a monthly retainer of $800 in cash. For the year ended December 31, 2023, members of the Bank's Risk Committee received a monthly retainer of $400 in cash. The Chair of the Bank's Risk Committee received a monthly retainer of $800 in cash. For the year ended December 31, 2023, members and the Chairs of the Bank's Strategic Innovations Committee and Special Assets Committee received a monthly retainer of $200 in cash.
Summary Compensation Table
Summary Compensation Table The following table presents summary information regarding the total compensation awarded to, earned by and paid to our named executive officers for the years ended December 31, 2023 and 2022.
Summary Compensation Table
| | | | | Stock | Option | All other | | | Name and principal | | Salary | Bonus | Awards | Awards | compensation | Total | | position | Year | ($) | ($) | ($)(1) | ($)(2) | ($)(3) | ($) | | Edward F. Barry Chief Executive Officer | 2023 | 603,750 | 175,000 | 175,000 | 126,059 | 38,984 | 1,118,793 | | | 2022 | 562,500 | 164,000 | 164,000 | 175,000 | 37,595 | 1,103,095 | | Steven M. Poynot President and Chief Operating Officer | 2023 | 350,000 | 95,000 | — | 54,799 | 33,409 | 533,208 | | Karl Dicker President of OpenSky™ & Fintech | 2023 | 374,930 | 205,840 | — | 58,676 | 11,846 | 651,292 | | | 2022 | 357,075 | 250,670 | — | 60,705 | 13,362 | 681,812 |
Summary Compensation Table
(1) These amounts represent the aggregate grant date fair value of restricted stock earned in 2023 and 2022, calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are discussed in the Summary of Significant Accounting Policies note and the Stock-Based Compensation note to our consolidated financial statements as of December 31, 2023. The fair market value of shares was based on 100% of the closing price per share of our common stock on the date of grant. (2) These amounts represent the aggregate grant date fair value of option awards for the years ended December 31, 2023 and 2022 calculated in accordance with FASB ASC Topic 718. The assumptions used in calculating the option award amounts are set forth in the Stock-Based Compensation note to our consolidated financial statements as of December 31, 2023 included in our 2023 Annual Report. The 2022 option awards were earned in 2022 and granted in 2023. (3) “All Other Compensation” for the NEOs is further described below.
Nonqualified Deferred Compensation Plan
Nonqualified Deferred Compensation Plan In December 2021, the Board of Directors of the Bank approved and adopted a Nonqualified Deferred Compensation Plan (the "NQDCP"). The NQDCP constitutes an unfunded, nonqualified deferred compensation plan that provides deferred compensation benefits for a select group of management and highly compensated employees. Pursuant to the terms of the NQDCP, the Bank will make discretionary credits to participants' accounts for any year. The credits will vest in full upon completion of ten years of service by the participant. Participants' accounts will bear interest from the annual deemed contribution date of December 31 each year based on the rate of the ten year treasury rate as of December 31 for each following year. Participants are entitled to receive a distribution of their vested accounts generally upon a termination of employment (including by reason of disability or death), which will be distributed in ten equal annual installments. Any amounts credited to a participant's account that are not vested at the time of a distribution event shall be forfeited. For 2023, Mr. Barry, Mr. Poynot, and Mr. Dicker were credited $120,750, $52,500, and $56,240, respectively, as part of the NQDCP.
Pay Versus Performance
Pay Versus Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), we provide the following disclosure regarding executive compensation for our Principal Executive Officer (“PEO”) and to our Non-PEO NEOs and certain Company performance for the fiscal years listed below. The disclosure follows SEC guidelines for smaller reporting companies. The Pay versus Performance table below summarizes the compensation values both previously reported in our Summary Compensation Table, as well as the adjusted values required in this section for the 2023 and 2022 calendar years.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO ($) | Compensation Actually Paid to PEO ($) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | Value of Initial Fixed $100 Investment Based on Total Stockholder Return ($) | Net Income ($) | | 2023 | 1,118,793 | 1,001,287 | 592,250 | 534,548 | 95 | 35,871,000 | | 2022 | 1,103,095 | 834,486 | 681,812 | 559,052 | 91 | 41,804,000 |
Pay Versus Performance
Calculation of Compensation Actually Paid ("CAP"). To calculate the CAP to our PEO and Non-PEO NEOs in the table above according to SEC reporting rules, the following adjustments were made to Total Compensation as reported in the Summary Compensation Table for each covered year:
Pay Versus Performance
| | 2023 | | 2022 | | | | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | | Total Compensation from Summary Compensation Table ($) | 1,118,793 | 592,250 | 1,103,095 | 681,812 | | Less: Stock Awards from Summary Compensation Table ($) | (175,000) | — | (164,000) | — | | Less: Option Awards from Summary Compensation Table ($) | (126,059) | (56,738) | (175,000) | (60,705) | | Add: Fair Value at Year-End of Stock and Option Awards Granted During the Year that are Outstanding and Unvested at the End of the Year ($) | 318,708 | 28,518 | 223,512 | — | | Add: Change in Fair Value of Stock and Option Awards Granted in any Prior Year that are Outstanding and Unvested at the End of the Year ($) | (79,972) | (14,091) | (113,392) | (36,753) | | Add: Change in Fair Value of Stock and Option Awards that Vested as of the Vesting Date as Compared to the End of the Prior Year ($) | (55,183) | (15,391) | (39,729) | (25,302) | | Total Compensation Actually Paid ($) | 1,001,287 | 534,548 | 834,486 | 559,052 |
Pay Versus Performance
The following table presents the relationship between CAP to our PEO and the average compensation amounts paid to the non-PEO NEOs to the Company's Total Stockholder Return ("TSR"). In the table that follows, TSR measures return to an investor for a $100 investment in the Company at December 31, 2021 and reflects reinvestment of all dividends. The TSR amounts in the graph below reflect the values described in the "Pay Versus Performance" table above. The following table presents the relationship between CAP to out PEO and the average compensation amounts paid to the non-PEO NEOs to the Company's net income.
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023 The following table sets forth, on an award by award basis, information concerning all equity awards held by the Named Executive Officers at December 31, 2023. All options were granted with an exercise price of 100% of market value in accordance with the Company’s 2017 Plan, as amended.
Outstanding Equity Awards at December 31, 2023
| | | Option Awards | | | | Stock Awards | | | | | Number of Securities Underlying Unexercised Options | | | | Number of shares or units of stock that have not vested | Market value of shares or units of stock that have not vested | | Name | Grant Date | Exercisable | Unexercisable | Exercise Price ($) | Expiration Date | | | | Edward F. Barry | 01/01/2020 | 15,000 | 5,000 | 14.89 | 2025 | | | | Edward F. Barry | 01/01/2021 | 10,000 | 10,000 | 13.93 | 2026 | | | | Edward F. Barry | 12/31/2021 | 6,250 | 6,250 | 26.41 | 2026 | | | | Edward F. Barry | 01/01/2023 | — | 15,351 | 23.54 | 2028 | | | | Edward F. Barry | 02/15/2021 | | | | | 6,467 | $100,000 | | Edward F. Barry | 02/15/2022 | | | | | 6,330 | 157,000 | | Edward F. Barry | 02/15/2023 | | | | | 7,714 | 164,000 | | Karl Dicker | 12/31/2019 | 12,500 | — | 14.54 | 2024 | | | | Karl Dicker | 12/31/2020 | 6,876 | 2,289 | 13.89 | 2025 | | | | Karl Dicker | 12/31/2021 | 3,028 | 3,027 | 26.41 | 2026 | | | | Karl Dicker | 01/01/2023 | — | 5,325 | 23.54 | 2028 | | | | Karl Dicker | 01/01/2021 | | | | | 1,666 | $23,207 | | Steven M. Poynot | 10/11/2022 | 500 | 1,500 | 24.25 | 2027 | | | | Steven M. Poynot | 01/01/2023 | — | 2,300 | 23.54 | 2028 | | | | Steven M. Poynot | 10/11/2022 | | | | | 1,333 | $32,325 |
Outstanding Equity Awards at December 31, 2023
Options awarded in 2019 through 2023 (grants expiring in 2025 through 2028, respectively) vest evenly over a four year period. Mr. Barry's stock awards vest in three equal annual installments. Mr. Dicker's stock awards vest in three equal installments. Mr. Poynot's stock awards vest in three equal installments.