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COLUMBIA BANKING SYSTEM, INC.
1301 “A” Street
Tacoma, Washington 98402
April 12, 2019
 | | | Columbia Banking System, Inc. 1301 “A” Street Tacoma, Washington 98402-4200 |
meeting.
www.columbiabank.com in the “About – Investor Relations” section.
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Craig D. Eerkes | | Clint E. Stein | |
Chair, Board of Directors | | | President & Chief Executive Officer |
TIME | 10:00 | ||||||
| April 27, 2022 VIRTUAL MEETING www.virtualshareholdermeeting.com/COLB2022 HOW TO PARTICIPATE Visit www.virtualshareholdermeeting.com/COLB2022 and enter the control number found on your notice, proxy card or instruction form. ITEMS OF BUSINESS | The purposes of the meeting are as follows: | | | | |
| | Board Recommendation | | | Page Reference | ||
(1) To elect the | | | FOR | | |
(2) |
| To approve, on an advisory basis, | | | FOR | | |
(3) To | | | FOR | | |
(4) To transact such other business as may properly come before the meeting or any adjournment thereof. | | | FOR | | |
RECORD DATE | You are entitled to vote at the annual meeting and at any adjournments or postponements of the meeting if you were a shareholder at the close of business on March | | | ||||
| | VOTING | | | | |
| |  | | | By Internet To vote before the meeting, visit www.proxyvote.com. To vote at the meeting, visit www.virtualshareholder meeting.com/ COLB2022 | |
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| |  | | | By Toll Free Number 1-800-690-6903 | |
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| |  | | | By Mail Follow the instructions on your proxy card | |
| | VOTING BY PROXY | Please vote online or by telephone or submit your proxy card (if you received one) as soon as possible so that your shares can be voted at the annual meeting in accordance with your instructions. For specific instructions on voting, please refer to the instructions in the proxy statement and on the Notice of Internet Availability of Proxy Materials you received in the mail or, if you received a hard copy of the proxy materials, on the enclosed proxy card. | |
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The proxy statement was first made available or mailed to shareholders on April 12, 2019.
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COLUMBIA BANKING SYSTEM, INC.
1301 “A” Street
Tacoma, Washington 98402-4200
(253) 305-1900
*
In this proxy statement, the terms the “Company,” “Columbia,” “we,” “us” or “our” refer to Columbia Banking System, Inc., and the terms “the Bank,” or “Columbia Bank” refer to Columbia State Bank, our wholly owned subsidiary.
April 27, 2022.
In this proxy statement, the terms the “Company,” “Columbia,” “we,” “us” or “our” refer to Columbia Banking System, Inc.
Our goal isMarch 15, 2022.
Why did I receive a Notice of Internet Availability of Proxy Materials instead of paper copies of the proxy materials?
In accordance with rules and regulations adopted by the SEC, instead of mailing a printed copy of our proxy materials to all shareholders entitled to vote at the Annual Meeting, we are furnishing the proxy materials to our shareholders over the Internet. If you received the Notice by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice will instruct you as to how you may access and review the proxy materials and submit your vote via the Internet. If you received the Notice by mail and would like to receive a printed copy of the proxy materials, please follow the instructions included in the Notice for requesting such materials.
We mailed the Notice on April 12, 2019 to all shareholders entitled to vote, atand the Annual Meeting. Asminimum vote required for each proposal, please see the section of the date of mailing of the Notice, all shareholdersthis proxy statement entitled “Questions and beneficial owners have the ability to access all of our proxy materials on a website referred to in the Notice. These proxy materials are available free of charge.
What is being voted on at the Annual Meeting?
At the Annual Meeting you will be asked to vote on:
Only shareholders who owned Columbia common stock, either directly or beneficially, as of the close of business on the Record Date are entitled to receive notice of the Annual Meeting and to vote the shares that they held on that date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting.
At the Meeting. Shares held in your name as the shareholder of record may be voted by you in person” beginning at the Annual Meeting. Shares held beneficially in “street name” may be voted by you in person at the Annual Meeting only if you obtain a legal proxy from the broker or other agent that holds your shares, giving you the right to vote the shares, and you bring the legal proxy to the Annual Meeting.
By Mailpage 48. Shareholders who ask for and receive a paper proxy card may vote by mail and should complete, sign and date their proxy card and mail it in the pre-addressed envelope that will accompany the delivery of the paper proxy card. Proxy cards submitted by mail must be received by the time of the meeting in order for your shares to be voted.
By Internet. For shares registered in your name, you may go to http://www.proxyvote.com to transmit a proxy to vote your shares by means of the Internet. You will be required to provide our number and the control number, both of which are contained on the Notice or the proxy card, as applicable. You will then be asked to complete an electronic proxy card. The votes represented by such proxy will be generated on the computer screen, and you will be prompted to submit or revise them as desired. We must receive votes submitted via the Internet by 11:59 p.m. ET on May 21, 2019.
By Telephone. You may grant a proxy to vote your shares by telephone. The telephone voting procedures are designed to authenticate your identity, to allow you to grant a proxy to vote your shares, and to confirm that your instructions have been recorded properly. To vote by telephone, call 1-800-690-6903 by 11:59 p.m. ET on May 21, 2019. Please see the instructions on the Notice or the proxy card, as applicable.
For shares registered in the name of a broker or bank. Most beneficial owners, whose stock is held in “street name,” receive instructions for granting proxies from their banks, brokers or other agents, rather than a proxy card. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name,” and as the beneficial owner, you have the right to direct your broker on how to vote.
A number of brokers and banks are participating in a program provided through Broadridge Financial Solutions Inc. that offers the means to grant proxies to vote shares over the telephone and Internet. If your shares are held in an account with a broker or bank participating in the Broadridge program, you may grant a proxy to vote those shares by calling the telephone number or visiting the website shown on the instruction form received from your broker or bank.
Can I revoke my proxy and/or change my vote?
Yes. You may revoke your proxy and change your vote at any time before the proxy is exercised by filing with Columbia’s Secretary a notice of revocation, voting again by Internet or telephone (only your last Internet or telephone proxy submitted prior to the meeting will be counted), signing and returning a new proxy card with a later date, obtaining a legal proxy from the broker or other agent that holds your shares, or attending the Annual Meeting and voting in person. The powers of the proxy holders will be suspended if you attend the Annual Meeting in person and so request, although attendance at the meeting will not by itself revoke a previously granted proxy.
What are the Board’s recommendations?
The Board recommends a vote (i) FOR the election of the director nominees listed* References in this proxy statement (ii) FOR the approvalto our website address are provided only as a convenience and do not constitute, and should not be viewed as, an incorporation by reference of the Amendment toinformation contained on, or available through, the 2018 Equity Incentive Plan, (iii) FOR the approval, on an advisory basis (non-binding), of the compensation of Columbia’s named executive officers, and (iv) FOR the approval, on an advisory basis (non-binding), of Deloitte as the independent registered public accounting firm for the fiscal year 2019.
If you indicate when voting by Internet or by telephone that you wish to vote as recommended by the Board, or if you sign and return a proxy card without specific instructions as to how to vote, Craig D. Eerkes and Hadley S. Robbins, as the persons named as proxy holders on the proxy card, will vote as recommended by the Board of Directors. If any other matters are considered at the meeting, Mr. Eerkes and Mr. Robbins will vote as recommended by the Board. If the Board does not give a recommendation, Mr. Eerkes and Mr. Robbins will have discretion to vote as they think best.
Will my shares be voted if I do not vote by using the Internet, by telephone or by signing and returning my proxy card?
If your shares are registered in your name and you do not vote by using the Internet, by telephone or by returning a signed proxy card or do not vote in person at the Annual Meeting, your shares willwebsite. Therefore, such information should not be voted.
If your shares are held in “street name” and you do not submit voting instructions to your broker, your broker may vote your shares atconsidered part of this meeting on the advisory (non-binding) approval of the appointment of the independent registered public accounting firm only. If no instructions are given with respect to the election of directors, the approval, on an advisory basis (non-binding), of the compensation of Columbia’s named executive officers or the selection on an advisory (non-binding) basis of the frequency for holding future advisory shareholder votes to approve executive compensation, your broker cannot vote your shares on these proposals.
| | | 1 | | | 2022 Proxy Statement |
TABLE OF CONTENTSHow many votes are needed to hold the Annual Meeting?
A majority of Columbia’s outstanding shares as of the Record Date (a quorum) must be present at the Annual Meeting in order to hold the meeting and conduct business. Shares are counted as present at the meeting if a shareholder is present and votes in person at the meeting or has properly submitted a proxy card. As of the Record Date for the Annual Meeting, 73,469,797 shares of Columbia common stock were outstanding and eligible to vote. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to a matter on which the broker has expressly not voted. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because (i) the broker has not received voting instructions from the beneficial owner and (ii) the broker lacks discretionary voting power to vote such shares.
What vote is required to elect directors?
In an uncontested election, a nominee for election to a position on the Board will be elected as a director if the votes cast For the nominee exceed the votes cast Against the nominee (known as majority voting). The term of any director who does not receive a majority of votes cast in an election held under that standard terminates on the earliest to occur of: (i) 90 days after the date election results are certified; (ii) the date the director resigns; and (iii) the date the Board fills the position. Our Bylaws provide that an election is considered “contested,” and will be held under a plurality standard, if there are shareholder nominees for director pursuant to the advance notice provision in Section 1.17 of our Bylaws who are not withdrawn by the advance notice deadline set forth in that section. You may vote For, Against, or Abstain from voting for the listed nominees. The following will not be votes cast and will have no effect on the election of any director nominee: (i) a share whose ballot is marked as abstain; (ii) a share otherwise present at the meeting but for which there is an abstention; and (iii) a share otherwise present at the meeting as to which a shareholder gives no authority or direction. Shareholders may not cumulate their votes in the election of directors.
What vote is required to approve the Amendment to the 2018 Equity Incentive Plan?
To approve the Amendment to the 2018 Equity Incentive Plan, we must receive the affirmative vote For the proposal by holders of a majority of the shares present in person or by proxy and voting on the proposal. You may vote For, Against or Abstain from approving the proposal. Abstentions and broker non-votes will have no effect on the outcome of the proposal.
What vote is required to approve the advisory (non-binding) resolution on the compensation of Columbia’s executive officers?
The affirmative vote For by a majority of those shares present in person or by proxy and voting on this matter is required on the advisory (non-binding) resolution on the compensation of Columbia’s named executive officers. You may vote For, Against or Abstain from approving the advisory (non-binding) resolution to approve named executive officer compensation. Abstentions and broker non-votes will have no effect on the outcome of the proposal.
What vote is required to approve the advisory (non-binding) proposal on the appointment of the independent registered public accountants?
The proposal to approve, on an advisory basis (non-binding), the appointment of Deloitte as Columbia’s independent registered public accounting firm will be adopted if a majority of the votes present in person or by proxy and voting on this matter are cast For the proposal. You may vote For, Against or Abstain from approving the proposal. Abstentions and broker non-votes will have no effect on the outcome of the proposal.
We have not received timely notice of any shareholder proposals to be considered at the Annual Meeting, and the Board does not know of any other matters to be brought before the Annual Meeting.
Who is soliciting my proxy and who is paying the cost of solicitation?
The Board is soliciting proxies for use at the 2019 Annual Meeting. Certain directors, officers and employees of Columbia and its banking subsidiary, Columbia State Bank, or its trust company subsidiary, Columbia Trust Company, may solicit proxies by mail, telephone, facsimile, or in person.
We will pay for the costs of solicitation. We do not expect to pay any compensation for the solicitation of proxies, except to brokers, nominees and similar record holders for reasonable expenses in mailing proxy materials to beneficial owners of our common stock. However, management may, if it determines it necessary to obtain the requisite shareholder vote, retain the services of a proxy solicitation firm.
How can I find out the results of the voting at the annual meeting?
Preliminary voting results will be announced at the Annual Meeting. We will publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days after the Annual Meeting. After the Form 8-K is filed, you may obtain a copy by visiting our website at www.columbiabank.com, the SEC’s website at www.sec.gov, or by writing to: Columbia Banking System, Inc., Attention: Corporate Secretary, 1301 “A” Street, Tacoma, Washington, 98402-4200.
When are proposals and director nominations for the 2020 Annual Meeting due?
Proposals by shareholders to transact business at Columbia’s 2020 Annual Meeting must be delivered to Columbia’s Secretary no later than January 23, 2020 in order to be considered for inclusion in our proxy statement and proxy card and should contain such information as is required under our Bylaws. Such proposals will also need to comply with the SEC’s regulations regarding the inclusion of shareholder proposals in Columbia-sponsored proxy materials. In order for a shareholder proposal to be raised from the floor during next year’s annual meeting, or for a shareholder to nominate a person or persons for a director, written notice must be received by us no earlier than the 150th day and no later than the 120th day prior to the first anniversary of the 2019 Annual Meeting (meaning no earlier than December 24, 2019, and no later than January 23, 2020), and should contain such information as required under our Bylaws. However, if the date of the 2020 Annual Meeting is more than 30 days before or more than 60 days after the anniversary of the 2019 Annual Meeting, notice must be delivered no earlier than the 150th day and no later than the 120th day prior to the date of the 2020 Annual Meeting or, if the first public announcement of the 2020 Annual Meeting date is less than 100 days before the meeting date, notice must be delivered no later than the 10th day following the date of the Company’s first public announcement of the 2020 Annual Meeting date.
To be in proper form, a shareholder’s notice must include the specified information concerning the proposal or director nominee as described in our Bylaws. The Company will not consider any proposal or nomination that is not timely or otherwise does not meet the Bylaw and SEC requirements for submitting a proposal or nomination.
Notice of intention to present proposals at the 2020 Annual Meeting, or to obtain a copy of the detailed procedures regarding notice requirements for proposals or director nominations, should be directed to Columbia’s Corporate Secretary, 1301 “A” Street, Tacoma, Washington 98402.
Beneficial Owners of More Than Five Percent
As of March 15, 2019 (except as otherwise noted), the shareholders identified in the table below beneficially owned more than 5% of the outstanding Columbia shares. To the Company’s knowledge, based on the public filings which beneficial owners of more than 5% of the outstanding shares of Columbia common shares are required to make with the SEC, there are no other beneficial owners of more than 5% of the outstanding Columbia common shares as of March 15, 2019, other than those set forth below. The percentage ownership data is based on 73,467,373 Columbia common shares outstanding as of March 15, 2019.
Name and Address Number of Shares (1) Percentage Blackrock, Inc. (2) 10,189,781 13.87 % 55 East 52nd Street New York, NY 10055 The Vanguard Group, Inc. (3) 7,687,182 10.46 % 100 Vanguard Blvd. Malvern, PA 19355 T Rowe Price (4) 4,335,517 5.9 % 100 East Pratt St. Baltimore, MD 21202
Beneficial Ownership of Directors and Executive Officers
The following table shows, as of March 15, 2019, the amount of Columbia common stock directly owned (unless otherwise indicated) by (a) each director and director nominee; (b) the executive officers named in the Summary Compensation Table below; and (c) all of our directors and executive officers (including those not named in the Summary Compensation Table) as a group. Except as otherwise noted, we believe that the beneficial owners of the shares listed below, based on information furnished by such owners, have or share with a spouse voting and/or investment power with respect to the shares. Beneficial ownership is determined under the rules of the SEC.
Name Position Number Percentage Craig D. Eerkes Chairman of the Board 10,322 (1) * Hadley S. Robbins Director, President, and Chief Executive Officer 64,964 (2) * Kumi Y. Baruffi Executive Vice President, General Counsel 20,148 (3) * David A. Dietzler Director 12,303 (1) * Ford Elsaesser Director 41,264 (1) * Mark A. Finkelstein Director 7,691 (1) * John P. Folsom Director 48,329 (4) * Eric S. Forrest Director 7,463 (5) * Thomas M. Hulbert Director 47,706 (1) * Michelle M. Lantow Director 15,191 (1) * David C. Lawson Executive Vice President, Chief Human Resources Officer 20,856 (6) * Randal L. Lund Director 3,524 (1) * Andrew L. McDonald Executive Vice President, Chief Credit Officer 43,683 (7) * S. Mae Fujita Numata Director 14,516 (8) * Elizabeth W. Seaton Director 9,691 (1) * Gregory A. Sigrist Executive Vice President, Chief Financial Officer 5,910 (9) * Clint E. Stein Executive Vice President, Chief Operating Officer 35,728 (10) * Janine T. Terrano Director 2,525 (1) * William T. Weyerhaeuser Director 253,437 (11) * Directors and executive officers as a group (20) 677,924 0.92 %
annual meeting.
2022 Proxy Statement | | | 2 | | |
 | Craig D. Eerkes | | Chair of the Board | | ||
| |  Director since: 2014 Age: 69 Other public company directorships: None | |||||
| | | Mr. Eerkes Qualifications: Mr. Eerkes has an extensive financial background and broad experience in highly regulated industries, including his current position as President and Chief Executive Officer of Sun Pacific Energy, Inc. His expertise in community banking and risk management brings strong operational depth to the Board. | |
| | Laura Alvarez Schrag | | | | |
| |  Director since: 2021 Age: 54 Other public company directorships: None | | | Ms. Alvarez Schrag is the President of Pondera Consulting, a human resources management, leadership development and CIS/CRM consulting firm that she founded in 2009. In her prior role as Qualifications: Ms. Alvarez Schrag’s extensive experience in human resources and organizational and leadership development, as well as her expertise in diversity, equity and inclusion consulting, bring valuable perspective to the Board. She is also an ACC Certified Executive Coach from the International Coaching Federation. | |
| | Ford Elsaesser | | | | |
| |  Director since: 2014 Age: 70 Other public company directorships: None | ||||
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Mr. Elsaesser Qualifications: Mr. Elsaesser has extensive business experience and | | ||||
| | | 3 | | | 2022 Proxy Statement |
 | Mark A. Finkelstein | | | |||
| |  Director since: 2014 Age: 63 Other public company directorships: None | |||||
| | | Mr. Finkelstein Qualifications: Mr. Finkelstein has extensive legal background and | |
 | Eric S. Forrest | | | |||
| |  Director since: 2017 Age: 54 Other public company directorships: None | |||||
| | | Mr. Forrest Qualifications: Mr. | |
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 | Michelle M. Lantow | | | |||
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 Director since: 2012 Age: 60 Other public company directorships: None | | | Ms. Lantow Qualifications: Ms. Lantow has a | | ||
2022 Proxy Statement | | | 4 | | |
 | Randal L. Lund | | | |||
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 Director since: 2017 Age: 64 Other public company directorships: None | | | Mr. Lund Qualifications: Mr. Lund is a retired member of the American Institute of Certified Public Accountants and the Oregon Society of Certified Public Accountants. | |
 | Tracy Mack-Askew | | | | |
| |  Director since: 2021 Age: 45 Other public company directorships: None | | | Ms. Mack-Askew is the General Manager-HD Vocational Platform Development of Daimler Trucks North America (DTNA), a position she has held since 2016. She previously served as the Vice President of Engineering for Thomas Built Buses OEM subsidiary of DTNA from 2014-2016. Ms. Mack-Askew has led engineering, purchasing and manufacturing teams over the course of her career and is Executive Sponsor of the Daimler African American Employee Resource Group. She currently serves as a Finance Committee member on the Governing Board of Ronald McDonald House Charities of Oregon and Southwest Washington and is National Chair for the Policies and Procedures Committee of Jack and Jill of America. She holds a Bachelor of Science in Mechanical Engineering from Rensselaer Polytechnic Institute, a Master of Science in Mechanical Engineering from Purdue University and a Master of Arts in Management from Harvard University. Qualifications: Ms. Mack-Askew brings business and organizational leadership, financial acumen and depth of operational experience to the Board. She is also an NACD Governance Fellow. | |
| | S. Mae Fujita Numata | | | ||
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 Director since: 2012 Age: 65 Other public company directorships: None | | | Ms. Numata Qualifications: Ms. Numata’s extensive accounting and banking background provide the Board and Audit Committee with valuable expertise, and she is one of the Board’s designated audit committee financial experts. | |
| | | 5 | | | 2022 Proxy Statement |
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 | Elizabeth W. Seaton | | | |||
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 Director since: 2014 Age: 61 Other public company directorships: None | | | Ms. Seaton Qualifications: Ms. Seaton has broad experience in business leadership, change management, strategic development, mergers and acquisitions and enterprise risk | | ||
| | Clint E. Stein | | | | |
| |  Director since: 2020 Age: 50 Other public company directorships: None | | | Mr. Stein was named President and Chief Executive Officer of Columbia and Columbia Bank effective January 1, 2020. He joined Columbia in December 2005 as Senior Vice President, Chief Accounting Officer and Controller. In May 2012, he was appointed as the acting Chief Financial Officer, and in August 2012, he was appointed Executive Vice President and Chief Financial Officer of Columbia and Columbia Bank. In July 2017, Mr. Stein was appointed Executive Vice President and Chief Operating Officer, while continuing to serve as Chief Financial Officer until May 2018. Mr. Stein is a Certified Public Accountant and holds a Bachelor’s degree in Accounting and Business Administration from the University of Idaho. His post-graduate education includes Graduate School of Bank Financial Management and the Graduate School of Banking at the University of Wisconsin. Mr. Stein was named a CFO of the year in 2015 by the Puget Sound Business Journal. He currently serves on the Executive Council For A Greater Tacoma and the boards for the Washington Bankers Association, and Pacific Coast Banking School. He previously served as a board member for the Tacoma Pierce County Chamber of Commerce and the Oregon Bankers Association. | |
 | Janine T. Terrano | | | |||
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 Director since: 2018 Age: 60 Other public company directorships: None | | | Ms. Terrano Qualifications: Ms. Terrano has a depth of technology, data security and business experience, | |
2022 Proxy Statement | | | 6 | | |
Our current best practices include:
Independent Oversight | | | ✔ | | | Other than the CEO, all directors are independent |
| | ✔ | | | Independent committees | ||
| | ✔ | | | Separation of Board Chair and CEO | ||
Engaged Board/ Shareholder Rights | | | ✔ | | | Annual election of all directors |
| | ✔ | | | Majority vote standard (with plurality carve-out for contested elections) | ||
| | ✔ | | | No directors currently serve on other public company boards | ||
| | ✔ | | | Shareholder right to call special meetings | ||
| | ✔ | | | Annual Say-on-Pay voting | ||
| | ✔ | | | Annual Board and committee self-evaluations | ||
Other Governance Practices | | | ✔ | | | Board diversity of experience, gender, race, age and tenure |
| | ✔ | | | Mandatory retirement age of 75 | ||
| | ✔ | | | Annual review of CEO succession plan by the independent directors with the CEO | ||
| | ✔ | | | Annual review of senior management long-term and emergency succession plans | ||
| | ✔ | | | Executive and director stock ownership requirements | ||
| | ✔ | | | Board oversight of ESG through Corporate Governance Committee |
Chair.
| | | 7 | | | 2022 Proxy Statement |
The committee evaluates all candidates, including shareholder-proposed candidates, using generally the same methods and criteria.
| | Skills & Experience | | | # Board Members | |
| | Legal/Public Policy | | | 7 | |
| | Financial Services Industry | | | 8 | |
| | Corporate Governance | | | 8 | |
| | Financial/Audit & Risk | | | 7 | |
| | M&A | | | 8 | |
| | Skills & Experience | | | # Board Members | |
| | Cybersecurity | | | 7 | |
| | Fintech | | | 5 | |
| | Environmental/Social | | | 8 | |
| | Human Capital Management | | | 7 | |
| | Communications/Marketing | | | 6 | |
2022 Proxy Statement | | | 8 | | |
| | | | % of Total | | ||||||||||
| | RACE | | | Male | | | Female | | | Not Specified | | | Total | |
| | American Indian or Alaska Native | | | 0.13% | | | 0.44% | | | — | | | 0.57% | |
| | Asian | | | 1.64% | | | 3.67% | | | — | | | 5.31% | |
| | Black or African American | | | 0.89% | | | 1.06% | | | — | | | 1.95% | |
| | Hispanic or Latino | | | 1.50% | | | 4.03% | | | 0.04% | | | 5.57% | |
| | Native Hawaiian or Other Pacific Islander | | | 0.49% | | | 0.62% | | | — | | | 1.11% | |
| | Two or More Races | | | 0.97% | | | 1.33% | | | — | | | 2.30% | |
| | White | | | 21.50% | | | 46.42% | | | 0.22% | | | 68.14% | |
| | Not Specified | | | 4.96% | | | 9.38% | | | 0.71% | | | 15.05% | |
| | Total | | | 32.08% | | | 66.95% | | | 0.97% | | | 100.00% | |
| • | Placed 81st of 370 teams in “The People’s Ecochallenge to make Earth a healthier, more equitable, more sustainable place” |
| | | 9 | | | 2022 Proxy Statement |
Bylaws
With
The Board then analyzed the independence of each director and nominee and determined that the following members of the Board meet the standards regarding “independence” required by applicable law, regulation and NASDAQ listing standards, and that each such director is free of relationships that would interfere with the exercise of independent judgment. In determining the independence of each director, the Board considered many factors, including any loans to the directors, each of which (i) were made in the ordinary course of business; (ii) were substantially made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company or the Bank; and (iii) did not involve more than the normal risk of collectability or present other unfavorable features. Such arrangements are discussed in detail in the section entitled “Certain Relationships and Related Transactions.”
Based on these standards, the Board has determined that each of the following current non-employee directors and director nominees is independent:
Based on the standards described above, the Board determined that Hadley S. Robbins, who serves as the President and Chief Executive Officer of the Company, is not independent because he is an executive officer of the Company.
Enterprise Risk Management committees
2022 Proxy Statement | | | 10 | | |
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The following table shows the membership of these committees during 2018.
Committee Membership
Audit Committee. The Audit Committee is comprised of eight directors, each of whom is considered “independent” as defined by the NASDAQ listing standards and applicable SEC rules. The Audit Committee operates under a formal written charter, a copy of which is posted on our website at www.columbiabank.com.committees. The Board has determined that Mr. Dietzler, Ms. Lantow, Mr. Lund and Ms. Numata are “Audit Committee Financial Experts” as defined by SEC rules.
The Audit Committee is responsible for the oversightall of the qualitymembers of such committees qualify as “independent” under applicable laws, the listing standards of Nasdaq and integrityour Corporate Governance Policy. The current members of Columbia’s financial statements, its compliance with legalthe Board, the primary standing committees on which they serve and regulatory requirements, the qualifications and independencekey functions of its independent auditors, the performance of its internal audit function and independent auditors and other significant financial matters. In discharging its duties, the Audit Committee is expected to, among other things:
AUDIT COMMITTEE | ||||||
CURRENT MEMBERS: | | | ||||
R. Lund (Chair)* E. Forrest M. Lantow* T. Mack-Askew S. Numata* J. Terrano MEETINGS IN 2021: 8 *The Board has determined that these members are “audit committee financial experts” within the meaning of the SEC’s regulations and are “financially sophisticated” within the meaning of Nasdaq rules | | | The Audit Committee is responsible for the oversight of the quality and integrity of Columbia’s financial statements, its compliance with legal and regulatory requirements, the qualifications and independence of its independent auditors, the performance of its internal audit function and independent auditors and other significant financial matters. In discharging its duties, the Audit Committee is expected to, among other things: | |||
| | • | | | have the sole authority to appoint, retain, compensate, oversee, evaluate and replace the independent auditors; | ||
| | • | | | review and approve the engagement of the independent auditors to perform audit and non-audit services and related fees; |
| | • |
| | review the integrity of the financial reporting process; |
| | • | | | review the financial reports and disclosures submitted to appropriate regulatory authorities; |
| | • | | | maintain procedures for the receipt, retention and treatment of complaints regarding financial matters; and |
| | • | | | review and approve related party transactions. | ||
| | | The Audit Committee operates under a formal written charter, a copy of which is available in the “About—Investor Relations—Overview—Governance Documents” section of our website at www.columbiabank.com | ||||
Personnel and Compensation Committee. The Personnel and Compensation Committee is comprised of seven directors, each of whom is considered independent as defined by the NASDAQ listing standards and applicable SEC and IRS rules. The Personnel and Compensation Committee is charged with the responsibility of reviewing the performance of our Chief Executive Officer and other key employees and determines, approves and reports to the Board on the elements of their compensation and long-term equity based incentives. The committee may periodically retain an independent consultant to assist the committee in its deliberations regarding compensation for the Chief Executive Officer and other key executives. The committee is directly responsible and has full authority for the appointment, compensation and oversight of compensation consultants, legal counsel and any other advisors retained by the committee. The committee solicits and receives input and recommendations from the Chief Executive Officer with respect to the compensation of the other executive officers. In addition, the Chief Human Resources Officer assists the committee in its work.
The Personnel and Compensation Committee commissioned Pearl Meyer and Partners (“Pearl Meyer”), an independent outside compensation consultant, to conduct a study in June 2017 of the Company’s executive compensation compared to a peer group comprised of other publicly traded financial services companies. The committee has used this report as a reference in making compensation decisions. The Pearl Meyer report provided information on executive base salaries and short-term and long-term incentives based on competitive data from published proxy filings of a peer group of 17 bank holding companies. Further information relating to the Pearl Meyer report is discussed in the section entitled “Compensation Discussion and Analysis.”
In addition, the Personnel and Compensation Committee:
PERSONNEL AND COMPENSATION COMMITTEE | ||||||
CURRENT MEMBERS: | | |||||
M. Lantow (Chair) L. Alvarez Schrag C. Eerkes T. Hulbert S. Numata E. Seaton MEETINGS IN 2021: 8 | | | The Personnel and Compensation Committee is charged with the responsibility of reviewing the performance of our Chief Executive Officer and other key executives and evaluating the elements of their compensation and long-term equity based incentives. In discharging its duties, the committee also: | |||
| | • | | | administers the Company’s incentive compensation plans; | ||
| | • | | | appoints and oversees the independent compensation consultant, and annually reviews | ||
| | • | | | periodically reviews management development activities and succession plans. | ||
| | The Personnel and Compensation Committee operates under a written charter, a copy of which is available in the “About—Investor Relations—Overview—Governance Documents” section of our website at www.columbiabank.com. | |||||
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The Personnel and Compensation Committee operates under a written charter, a copy of which is posted on our website at www.columbiabank.com. The committee meets as needed, and may delegate to one or more of its members the responsibility of meeting with consultants and management to obtain information for presentation and consideration by the entire committee.
Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee is currently comprised of five directors, each of whom is considered “independent” as defined by the NASDAQ listing standards. The committee is responsible for recommending a slate of directors to the full Board for election at the annual meeting, recommending directors to fill vacancies as they occur, monitoring Columbia’s corporate governance principles and practices and making appropriate recommendations for enhancements or other changes to the full Board.
The Corporate Governance and Nominating Committee will consider nominees recommended by shareholders provided that the recommendations are made in accordance with the procedures described in this proxy statement under the section “General Information—When are proposals and director nominations for the 2020 Annual Meeting due?” The committee evaluates all candidates, including shareholder-proposed candidates, using generally the same methods and criteria. The Corporate Governance and Nominating Committee operates under a formal written charter, a copy of which is posted on our website at www.columbiabank.com.TABLE OF CONTENTS
In deciding whether to recommend incumbent directors for re-nomination, the committee evaluates Columbia’s evolving needs and assesses the effectiveness and contributions of its existing directors. The committee is authorized to establish guidelines for the qualification, evaluation and selection of new directors to serve on the Board. The committee has not adopted, nor does it anticipate adopting, specific minimum qualifications for committee-recommended nominees, nor has the committee adopted a formal policy relating
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE | ||||||
CURRENT MEMBERS: | | | | | ||
M. Finkelstein (Chair) C. Eerkes M. Finkelstein T. Hulbert T. Mack-Askew J. Terrano MEETINGS IN 2021: 4 | | | The Corporate Governance and Nominating Committee oversees the Company’s corporate governance principles and practices. It is also responsible for evaluating overall Board composition, assessing the skills, backgrounds and experience that are represented on the Board, and making recommendations for Board nominees accordingly. The committee also: | |||
| | • | | | reviews the level and form of director compensation; | ||
| | • | | | manages the Board and committee self-evaluation process; and | ||
| | • | | | provides oversight of ESG matters | ||
| | The Corporate Governance and Nominating Committee operates under a written charter, a copy of which is available in the “About—Investor Relations—Overview—Governance Documents” section of our website at www.columbiabank.com. | |||||
ENTERPRISE RISK MANAGEMENT COMMITTEE | |||
CURRENT MEMBERS: | | | |
E. Seaton (Chair) L. Alvarez Schrag M. Finkelstein R. Lund S. Numata J. Terrano MEETINGS IN 2021: 4 | | | The Enterprise Risk Management Committee is responsible for the oversight of Columbia’s policies, procedures, and practices related to business, market, and operational risks as they impact the strategic, operational, reporting, and compliance objectives of its strategic plan. The ERM Committee is responsible for reporting risk issues and events to the Board and providing the Board with necessary oversight and advice to set risk tolerances. The Company’s Chief Risk Officer assists the committee in its work. |
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| | The Enterprise Risk Management Committee operates under a written charter, a copy of which is available in the “About—Investor Relations—Overview—Governance Documents” section of our website at www.columbiabank.com. | ||
The committee has the authority and responsibility to monitor and review the appropriateness of the Company’s principles and practices of corporate governance in light of emerging standards and best practices and the needs of the Company and its shareholders, and make such recommendations to the full Board as the Committee considers appropriate. The committee also has the authority and responsibility to review the level and form of director compensation, taking into account such factors as the compensation paid to directors of comparable companies, and recommends any changes to the full Board for consideration. The process and procedures used in determining Board compensation for 2018 are discussed in the section below.
Enterprise Risk Management Committee. The Enterprise Risk Management Committee (the “ERM Committee”) was formed in 2009 and is comprised of six directors, each of whom is considered independent under NASDAQ rules. The ERM Committee works closely with the Audit Committee and is responsible for the oversight of Columbia’s policies, procedures, and practices related to business, market, and operational risks as they impact the strategic, operational, reporting, and compliance objectives of its strategic plan. The ERM Committee is responsible for reporting risk issues and events to the Board and providing the Board with necessary oversight and advice to set risk tolerances. In 2018, the Company appointed a Chief Risk Officer who assists the committee in its work.
Oversight
BOARD OF DIRECTORS |
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| | | Audit | | | | | Enterprise Risk Management | | | | | Personnel and Compensation | | | |||||||||||||
| | | The Audit Committee oversees financial, accounting and internal control risk management. To support independence, the head of the Company’s internal audit function reports directly to the Audit Committee. | | | | | The ERM Committee is responsible for the oversight of Columbia’s policies, procedures, and practices related to business, market, and operational risks as they impact the strategic, operational, reporting, and compliance objectives of its strategic plan. The ERM Committee defines the Company’s overarching risk objectives through risk policies, limits and a risk appetite statement. | | | | | The Personnel and Compensation Committee oversees the management of risks that may be posed by the Company’s compensation practices and programs. As part of this process, the Personnel and Compensation Committee is responsible for reviewing the compensation policies and practices for all employees, not just executive management. | | | |||||||||||||
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TheBoard and its Audit and ERM Committee is responsible for the oversightCommittees, with regular evaluations and reporting on Columbia’s cybersecurity risk management posture. This includes evaluation of Columbia’s policies, procedures and practices relatedcontrol activities to business, market,manage, prevent, detect and operational risks as they impact the strategic, operational, reporting,respond to cybersecurity incidents and/or exercises (initiated by Columbia). Lessons learned and/or recommendations made are actioned, and compliance objectives ofexecutive officers provide oversight to improve cyber-defenses. Columbia is continually enhancing its strategic plan. The ERM Committee defines the Company’s overarching risk objectivescybersecurity capabilities, including through risk policies, limitsmulti-factor authentication, ongoing testing and a risk appetite statement.
The Personnel and Compensation Committee oversees the management of risks that may be posed by the Company’s compensation practices and programs. As part of this process, the Personnel and Compensation Committee is responsible for reviewing the compensation policies and practicesannual training for all employees, not just executive management. In its review of these policies and practices, the Personnel andemployees.
The Corporate Governance and Nominating Committee has authority over director compensation subject to the Board’s authority to approve changes. Directors receive compensation in the form of cash and, as applicable, equity awards in the form of restricted stock or, in the past, stock options.stock. We do not pay directors who are also employees of Columbia or Columbia Bank additional compensation for their service as directors.
Cash Compensation.
| | Annual Cash Compensation | | | Director Compensation Program | |
| | Annual Board Retainer | | | $47,000 | |
| | Board Chair Retainer | | | $45,000 | |
| | Committee Chair Retainer | | | $15,000 – Audit Committee | |
| | $12,000 – Personnel and Compensation Committee | | |||
| | $ 9,000 – All other standing committees | | |||
| | Committee Retainer | | | $ 8,000 – Audit Committee | |
| | $ 6,000 – Personnel and Compensation Committee | | |||
| | $ 4,000 – All other standing committees | |
Equity Compensation. Non-employee directors may from time to time be granted restricted stock awards pursuant to our 2018 Equity CompensationIncentive Plan, the material terms of which are discussed under the section “Executive Compensation – Equity Compensation.” Restricted
forfeiture of all unvested restricted stock awards at the time of such resignation unless otherwise determined by the Corporate Governance and Nominating Committee. However, restricted stock awards will automatically vest upon the occurrence of any of the following events: (a) death of the director; (b) disability of the director, as defined in the 2018 Equity Incentive Plan; or (c) a “change in control” as defined in the 2018 Equity Incentive Plan.
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prohibits all hedging activities by directors and requires directors to obtain pre-clearance by the Company to engage in transactions involving Columbia stock. Even if pre-clearance is granted, directors must make an independent determination that they do not possess material nonpublic information. The Insider Trading Policy also establishes quarterly blackout periods during which directors are prohibited from transacting in Company stock during the periods beginning 15 days before the end of each quarter and ending after the second full trading day after the Company releases its financial results for that period to the public.. and Restrictions on Hedging/Tradingnon-executivenon-employee directors to hold shares equal in value to five times the annual Board cash retainer. As of year-end 2018,2021, all non-executivenon-employee directors satisfied the Stock Ownership Policy requirements other than Mr. Lund, whoMs. Alvarez Schrag and Ms. Mack-Askew, both of whom joined the Board in 2017, and Ms. Terrano, who joined the Board in 2018.2021. See “Stock Ownership Guidelines and No Hedging” in the Compensation Discussion & Analysis below for additional details regarding the Stock Ownership Policy.1820182021 Director Compensation TableName Fees Earned or
Paid in Cash
($)
(1) Stock Awards
($)
(2) Option Awards ($) Non-Equity
Incentive Plan
Compensation Change In Pension Value
and Nonqualified
Deferred Compensation
Earnings
(3) All Other
Compensation
($) Total
($) David A. Dietzler $ 78,000 $ 69,974 — — — — $ 147,974 Craig D. Eerkes 99,250 69,974 — — — — 169,224 Ford Elsaesser 72,000 69,974 — — — — 141,974 Mark A. Finkelstein 67,000 69,974 — — — — 136,974 John P. Folsom 75,750 69,974 — — — — 145,724 Eric Forrest 66,000 69,974 — — 346 — 136,320 Thomas M. Hulbert 82,000 69,974 — — — — 151,974 Michelle M. Lantow 80,000 69,974 — — 4,158 — 154,132 Randal Lund 69,000 69,974 — — — — 138,974 S. Mae Fujita Numata 69,000 69,974 2,857 — 141,831 Elizabeth W. Seaton 69,250 69,974 — — — — 139,224 Janine Terrano 65,000 107,704 172,704 85,750 69,974 — — — — 155,724 (1) (1)Amount shown for Mr. Dietzler represents (i) aeach director reflects the $47,000 Board retainer in the amount of $35,000; (ii) $15,000 received as chairman of the Audit Committee; and (iii) aggregate per meeting board and committee attendance fees of $11,000 and $17,000, respectively.and:Amount shown forFor Mr. Eerkes, represents (i) a retainer in the amount of $35,000; (ii) $26,250$45,000 received as ChairmanChair of the Board from June through December; (iii) aggregate per meeting board and $14,000 received for committee attendance fees of $11,000 and $27,000, respectively.retainer fees.Amount shown forFor Mr. Elsaesser, represents (i) a retainer in the amount of $35,000; (ii) $9,000 received as chairmanchair of the Columbia Trust Company;Company board of directors and (iii) aggregate per meeting board and$14,000 received for committee attendance fees of $11,000 and $17,000, respectively.retainer fees.Amount shown forFor Mr. Finkelstein, represents (i) a retainer in the amount of $35,000; and (ii) aggregate per meeting board and committee attendance fees of $11,000 and $21,000, respectively.Amount shown for Mr. Folsom represents (i) a retainer in the amount of $35,000; (ii) $3,750$4,500 received as chairmanchair of the ERMCorporate Governance and Nominating Committee from January through May;commencing June 2021 and (iii) aggregate per meeting board and$13,000 received for committee attendance fees of $11,000 and $26,000, respectively.retainer fees.Amount shown forFor Mr. Forrest, represents (i) a$15,000 received for committee retainer in the amount of $35,000; and (ii) aggregate per meeting board and committee attendance fees of $11,000 and $20,000, respectively.fees.Amount shown forFor Mr. Hulbert, represents (i) a retainer in the amount of $35,000; (ii) $9,000 received as chairmanchair of the M&A Committee;a standing committee and (iii) aggregate per meeting board and$16,000 received for committee attendance fees of $11,000 and $27,000, respectively.retainer fees.Amount shown forFor Ms. Lantow, represents (i) a retainer in the amount of $35,000; (ii) $12,000 received as chairwomanchair of the Personnel and Compensation Committee;Committee and (iii) aggregate per meeting board and$18,000 received for committee attendance fees of $11,000 and $22,000, respectively.retainer fees.Amount shown forFor Mr. Lund, represents (i) a$15,000 as chair of the Audit Committee and $16,000 received for committee retainer in the amount of $35,000; and (ii) aggregate per meeting board andfees.attendance fees of $11,000 and $23,000, respectively.retainer fees.Amount shown forFor Ms. Numata, represents (i) a$20,000 received for committee retainer in the amount of $35,000; and (ii) aggregate per meeting board and committee attendance fees of $11,000 and $23,000, respectively.fees.Amount shown forFor Ms. Seaton, represents (i) a retainer in the amount of $35,000; (ii) $5,250$9,000 received as chairwomanchair of the ERMEnterprise Risk Management Committee from June through December; and aggregate per meeting board and$13,000 received for committee attendance fees of $10,000 and $19,000, respectively.retainer fees.19Amount shown forFor Ms. Terrano, represents (i) a$16,000 received for committee retainer in the amount of $35,000; and (ii) aggregate per meeting board and committee attendance fees of $11,000 and $19,000, respectively.fees.Amount shown for Mr. Weyerhaeuser represents (i) a retainer in the amount of $35,000; (ii) $18,750 received as Chairman of the Board from January through May; and (iii) aggregate per meeting board and committee attendance fees of $10,000 and $22,000, respectively.(2) (2)For each director, other than Ms. Terrano, represents a restricted stock award of 1,6911,669 shares granted on June 27, 2018May 26, 2021 at the grant date fair value. For Ms. Terrano, includes a restricted stock award of 834 shares granted on January 24, 2018 when she joined the Board, which represents a prorated portion of the 2017 – 2018 Board restricted stock award. The fair value of these awards was determined in accordance with the Compensation—Stock Compensation topic of the FASB ASC 718. Assumptions used to calculate these amounts are set forth in the notes to the Company’s audited financial statements for the fiscal year ended 2018,2021, included in the Company’s 20182021 Annual Report.(3) (3)deferred compensation accounts,Deferred Compensation Accounts (“DCA”), the material terms of which are described below under “Deferred“Deferred Compensation Plan.”(4) Amounts shown for each director reflects dividends received upon the vesting of equity awards. 20182021 10-K Annual Report.ChairwomanChairMark A. FinkelsteinEric S. ForrestWilliam T. WeyerhaeuserElizabeth W. Seaton 20achievements.
achievements in 2021.2018●•• netcore pre-tax, pre-provision income for 2018(1) of $282 million was aour best year on record $172.9 million, representing a 53% increase compared toexceeding the prior year. The increaserecord set just last year of $278 million.• net income was a result of higher net interest income primarily due to income from interest-earning assets acquiredColumbia’s history. In 2021, Columbia Bank ranked as #18 nationally, #1 in the Pacific ContinentalPortland district and moved into the #1 position in the Seattle district with regard to SBA 7a lending.• • which closed on November 1, 2017. Higher rates on earning assets and a decrease in income tax expense in 2018 also contributed to$1.7 billion of the increase, in net income compared to 2017.with the remainder mostly from new and expanded client relationships and generally higher client balances.●•OperatingThe noninterest expense to average assets ratio(1) for 2021 and 2020 were 1.95% and 2.17%, a measure ofrespectively.• efficiency, improved during 2018, declining to 2.60% from 2.67% in 2017. Reported noninterest expense to average assets ratio(1)improved significantlyduring 2021, declining to 1.84% from 2.12% in 2018, decreasing to 2.68% compared to 2.87% in 2017 as a result of higher average assets resulting from the Pacific Continental acquisition.2020.●Record loan originations for 2018 of $1.43 billion, with loan growth of $32.9 million.●•remained solid, with improved significantly during 2021 as borrowers adapted to the continued challenges of the pandemic. Nonperforming assets as a percentage of total nonperforming assets to period-end assets declining to 0.46% compared to 0.63%were 11 basis points at December 31, 2017.the end of 2021, nearly half the ratio of 21 basis points at the end of 2020.●•Our ongoing commitmentAnnounced a definitive agreement to our customerscombine with Umpqua. The combination will create a leading West Coast-focused franchise with over 300 locations throughout Washington, Oregon, Idaho, California and Nevada. The combined company will operate under the communities we serve resultedColumbia Banking System name. Per the terms of the agreement, Umpqua shareholders will receive 0.5958 of a share of Columbia common stock for each Umpqua share of common stock. Regulatory applications have been filed and shareholders from both companies overwhelmingly approved the combination at special shareholder meetings on January 26, 2022. The transaction is expected to close in a low cost deposit base and a core deposit ratio of 95%. Our 12 basis points average cost of total deposits is an important factor in the stability of our net interest margin.mid-2022.2018●•Our shareholders realized a 14% decline in total return on their investment during 2018. The KBW Regional Banking and NASDAQ Composite Indexes had declines in total returns of 18% and 3% respectively, during 2018. Our three-yearCompany’s total shareholder return is 23%,(“TSR”) declined by 6.1% during the year compared to returns of 17% and 37% for the KBW Regional Banking Index (“KRX”) median increase of 33.1%. Notably, the Company entered the year trading at a 16% premium to the median price-to-tangible book value for the KRX. The Company’s underperformance was partly driven by a negative market reaction immediately following the announcement to combine with Umpqua; however, TSR has outperformed the KRX median since the announcement date and NASDAQ Composite Indexes, respectively.year-end 2021 by 4.0% and 9.5%, respectively, as of February 25, 2022. We believe this outperformance is attributed to the strong shareholder support for the merger and comprehensive integration plans underway in anticipation of a mid-2022 close.●•Increases inDividends. Our regular dividends. We raised our regularquarterly cash dividend from $0.88increased to $1.00$0.30 per share during 2018, and paid a special dividendin the third quarter of $0.14 during the year.2021. Our dividend payout ratio was 48%41% for 20182021 compared to 47%62% for 2017. Our 20182020. The annualized dividend yield at year-end 2021 was 3%, based on our closing price at December 31, 2018.3.7%.(1) Operating noninterest expense to average assets is a non-GAAPNon-GAAP financial measure. Please refer to Appendix A for additional information and reconciliations to the most directly comparable GAAP financial measure.212018 Milestones ●• 2018,2021, Columbia Bank ranked seventh7th in deposit market share in the Northwest. The bankBank ranked eighth6th in deposit market share out of 7975 institutions in Washington, seventh7th out of 4640 in Oregon and 14th out of 3230 in Idaho.●•Income, Loan ProductionTop SBA Lender. For the fourth year in a row, Columbia Bank was recognized as the leading SBA 7a lender by the SBA Portland District Office, which covers 30 of 36 counties in Oregon and Depositsfour counties in Southwest Washington. Also in 2021, Columbia Bank became the leading SBA 7a lender in the Seattle District Office region, which spans the vast majority of Washington. The rankings cover the federal fiscal year that ended September 30, 2021 and are based on the number of 7a loans made by each bank during the period. Columbia Bank also remained in the top 20 SBA 7a lenders nationally, ranking No. 18 with a total 357 SBA 7a loans.• achieved record loan productionfunded $559 million of $1.43additional loans to more than 4,800 small businesses through Round Two of the SBA’s Paycheck Protection Program. Through both rounds of the program, we originated approximately 9,300 loans infusing over $1.5 billion into the Pacific Northwest economy. The loans provided relief for companies throughout the yearNorthwest that were affected by the economic fallout from the COVID-19 pandemic. Throughout 2021, our lending teams worked hard to guide borrowers through the SBA forgiveness process and record net incomeas of $172.9 million. Deposits, including core deposits, continued to exceed $10 billion at December 31, 2018.2021, our PPP loan portfolio balance was $188 million.●•811th consecutive year, Columbia Bank was recognized by Forbes on its 20192021 list of “America’s Best Banks,” ranking 20thin the country. The rankings wereForbes ranking was based on asset quality, capital adequacy, net interest margin and profitability of the nation’s 100 largest publicly traded banks and thrifts. Additionally, Forbes also recognized Columbia as the Best-In-State Bank for both Washington and Oregon.●•both monetarilythrough fundraising, volunteerism, company giving and through the volunteer efforts of our employees.employee giving. In 2018, we provided support to organizations that serve the homeless, the arts, chambers of commerce, economic development organizations, public school districts, and numerous other causes.Through generous donations from customers, employees and the community, Columbia’s fourth2021, Columbia celebrated its seventh annual “WarmWarm Hearts Winter Drive” raised $257,033Drive by raising a record $351,611 benefitting families and 6,542 warm winter items to benefit homeless shelters across the Northwest.In addition, our board of directors was recognized for its corporate stewardship including the Board Governance Award by Seattle Business Magazine and a Lifetime Achievement Award from the Puget Sound Business Journal for past board chairman, William Weyerhaeuser.●Workplace Accolades. Our continued commitment to employees contributed to Columbia Bank being named as one of “Washington’s Best Workplaces” in 2018 by the Puget Sound Business Journal for the 12th consecutive year, and a Top Workplaces ranking from the Oregonian.●25th Anniversary. In 2018, Columbia Bank celebrated its 25th anniversary. To celebrate this milestone, Columbia Bank launched its anniversary community giving campaign which celebrates the positive impact that Columbia Bank has had on growth opportunities for families, businesses, and nonprofit organizations throughout the Northwest. Four $25,000 grants were awarded to nonprofit organizationsindividuals struggling with homelessness in the Northwest. Over the past seven years, the campaign has raised over $1.8 million in combined donations. Additionally, in 2021 Columbia provided $75,000 in Warm Homes Grants which provide long-term solutions to help end homelessness and stop the cycle of poverty, and donated $50,000 to the Community Foundation of the North State to aid in the relief efforts helping neighbors and businesses that were impacted by the wildfires in northern California.• • • • • • 10,000 financial literacy kits were distributedthe Committee may choose to children throughout Columbia’s geographic footprint.review compensation analyses prepared by consultants retained by management.• Target DirectFactors in Setting Overall Compensation LevelsThe table below shows the 2018 total target directWhen establishing overall compensation opportunities for our Named Executives. The Committee focuses on target direct compensation as shown below in making annual compensation decisions. 2018 Target Direct Compensation* Current Named Executive
Base Salary Total Hadley S. Robbins,
President and Chief Executive Officer $ 730,000 $ 438,000 $ 675,000 $ 1,825,000 Gregory A. Sigrist**
Executive Vice President, Chief Financial Officer 375,000 150,000 206,250 731,250 Clint E. Stein,
Executive Vice President, Chief Operating Officer*** 427,000 213,500 277,550 918,050 Andrew L. McDonald,
Executive Vice President, Chief Credit Officer 336,000 134,000 184,800 655,200 David C. Lawson,
Executive Vice President, Chief Human Resources Officer 290,000 116,000 159,500 565,500 Kumi Y. Baruffi,
Executive Vice President, General Counsel 290,000 116,000 159,500 565,500 * The amounts reported differ from the amounts determined under SEC rules as reported for 2018 in the Summary Compensation Table set forth under “Compensation Tables” below. The above table is not a substitute for the Summary Compensation Table.** The amounts reflected in the table above are Mr. Sigrist’s annual compensation levels. Mr. Sigrist’s base salary and target annual incentive for 2018 were prorated to reflect the portion of 2018 in which he was employed following his start date on June 4, 2018. Additionally, the one-time sign on cash bonus paid to Mr. Sigrist in connection with his appointment are not included in this table.***Mr. Stein also served as Chief Financial Officer during 2018 prior to Mr. Sigrist’s hire.Compensation PhilosophyIn keeping with our long-term goal to consistently increase earnings per share and shareholder value,the NEOs, the Committee is guided byconsiders the following key principlesfactors:determining themeeting individual objectives;Named Executives:executives compares to executives at peer institutions, with a particular focus on financial institutions with similar corporate objectives and comparable asset size;●Accountability for Business Performance. The executives’the need to provide a competitive executive compensation package to attract and retain superior executive talent; in salary, as well as annual incentive and long-term incentive compensation opportunities, should be tied in part to overall Company financial performance.●Accountability for Individual Performance. To encourage and reflect individual contributions to the Company’s performance, compensation should be tied in part to the individual’s performance.●Alignment with Shareholder Interests. Compensation should be tied in part to the Company’s stock performance through the granting of stock awards with multi-year vesting and performance-based vesting, which serves to align executives’ interests with those of our shareholders.●Competition. Compensation should reflect the competitive marketplace, so that we can attract, retain, and motivate key executives of superior ability who are critical to our future success.●Reasonable Levels of Compensation. Total compensation opportunities and payouts should be reasonable and not excessive. We do not rigidly target or formulaically set compensation at a specific percentile compared to our peers. However, we do target overall compensation for executive officers in amounts that are roughly in line with the median of our peers.23●Independent Oversight. The Committee, composed solely of independent directors, is responsible for reviewing and establishing the compensation for the Named Executives. The Committee periodically receives advice from an independent compensation consultant who has been retained by and reports directly to the Committee and performs no other work for management without the authorization of the Committee. In addition, the Committee may choose to review compensation analyses prepared by consultants retained by management.●Risk Management. Compensation policies and practices should align with sound risk management and be structured not to create incentives that subject the Company to excessive risk. Such policies and practices should strike a healthy balance between contributing to the Company’s growth and promoting a conservative exposure to risk.Our Key Compensation Best Practices✓ Pay-for-performance✓ Share ownership guidelines✓ Double-trigger severance benefits✓ Independent compensation consultant✓ Clawback policy✓ Policy against hedgingX No tax gross-ups on severance paymentsX No equity grants below 100% of fair market valueX No significant perquisitesThe compensation tables that appear later in this proxy statement reflect decisions made by the Committee. We encourage you to refertables while reviewingCommittee and does not provide any other services to the Company. In January 2021, the Committee performed an independence assessment of Pearl Meyer pursuant to SEC and Nasdaq rules and standards. In performing its evaluation, the Committee took into consideration a letter from Pearl Meyer confirming its independence. At the culmination of the evaluation, the Committee determined that Pearl Meyer is an independent advisor. sectionmix of fixed and variable pay advances both the short- and long-term interests of our business and creates long-term shareholder value. The Committee’s decisions regarding the executive compensation program design and individual pay are made in order to understand how ourthe context of the total compensation philosophy is put into action.outlined above, including our financial performance.Named Executives,NEOs, the Committee considers the following factors:
the executives’ respective levels of responsibility and functions within the Company;●the Company’s overall performance and performance relative to its peers during the past year, including meeting its financial and other strategic goals;
how compensation of our executives compares to executives at peer institutions, with a particular focus on financial institutions with similar corporate objectives and comparable asset size;●the executives’ respective levels of responsibility and functions within the Company;
the need to provide a competitive executive compensation package to attract and retain superior executive talent;●each executive’s performance during the past year in meeting individual objectives;●how compensation of our executives compares to executives at peer institutions, with a particular focus on financial institutions with similar corporate objectivesthe recommendations of our Chief Executive Officer in setting compensation for other executives; and comparable asset size;●the alignment of executive compensation decisions and policies with the decisions and policies applicable to other employees;●the need to provide a competitive executive compensation package to attract and retain superior executive talent;●as appropriate, general economic conditions within our market area and the overall banking industry;●the recommendations of our Chief Executive Officer in setting compensation for other executives; and24●the results of the prior year’s shareholder advisory vote on executive compensation, which, consistent with prior years, received solid shareholder support in 2018,the results of the prior year’s shareholder advisory vote on executive compensation, which, consistent with prior years, received solid shareholder support in 2021, reflecting our shareholders’ support for our compensation philosophy and the executive compensation decisions made by the Committee.compensation;compensation; however, other discretionary and subjective components may also be considered if appropriate.the sole authority to retain and terminate a compensation consultant and to approve the consultant’s fees and all other terms of the engagement. The Committee has direct access to outside advisors and consultants throughout the year.The Committee engaged Pearl Meyer with respect& Partners, LLC (“Pearl Meyer”) as its independent compensation consultant. Pearl Meyer reports directly to recommendations regarding 2018 executivethe Committee and does not provide any other services to the Company. In January 2021, the Committee performed an independence assessment of Pearl Meyer pursuant to SEC and Nasdaq rules and standards. In performing its evaluation, the Committee took into consideration a letter from Pearl Meyer confirming its independence. At the culmination of the evaluation, the Committee determined that Pearl Meyer is an independent advisor. decisions. The Committee made these decisions in part based onconsultant, Pearl Meyer’s study ofMeyer provides advice about the Company’s executive compensation program in June 2017 (the “2017 Executive Compensation Study”), as describedprograms for senior executives. Pearl Meyer considers the objectives of these programs, compares the programs to designated peer group companies (discussed below inunder “The Role of Benchmarking.Benchmarking”In accordance) and best practices and provides information and advice on competitive compensation practices and trends, along with SEC rules and NASDAQ listing standards,specific views on the Committee took appropriate actions in 2018 to consider the independence of Pearl Meyer.The 2017 Executive Compensation Study comparedWith the Company’s executiveassistance of its independent advisor, the Committee evaluates, on a periodic basis, industry-specific and general market compensation practices and trends to ensure that our program and NEO pay opportunities remain appropriately competitive. To inform their evaluation, the Committee compares the total compensation opportunities to the compensation programs of a peer group comprised of other publicly traded financial services companies, as described below. The Committee used the report as a tool in setting compensation levels in 2018.Pearl Meyer’s 2017 Executive Compensation Study provided market observations oncomparable executive base salaries and short- and long-term incentive opportunities based on competitive data from published proxy filingspositions of a peer group of 17publicly traded bank holding companies. In consideringThe companies that make up the 2017-2018 peer group are adjusted from time to time to better align with the size and business model characteristics of the Company. In setting 2021 target compensation levels for the NEOs, the Company continued to use the results from a comprehensive market analysis conducted by Pearl Meyer considered the assets, operating revenue, market capitalization, and loan mix and revenue mixin 2019. The 2019-2020 peer group consisted of the following 22 bank holding companies: companies, whichgroup following an acquisition by South State Corporation on June 7, 2020.determinedconducted an in-depth review of the above peer group with the support of Pearl Meyer to beidentify any appropriate changes to the appropriate parameters.peer group. The 2017-2018Committee, after consulting with Pearl Meyer, approved changes to the peer group, which is being used to set target compensation levels for 2022. The new peer group approved by the Committee consists of the following 19 bank holding companies:
companies and reflects the removal of BancorpSouth, Inc., Cadence Bancorporation, First Midwest Bancorp, Inc. and Old National Bancorp due to announced merger transactions:2017-2018 BancorpSouth, Banner CorporationMB Financial,Chemical Financial Corporation**Old National BancorpCVB Financial Corp.Pinnacle Financial Partners, Inc.First Financial BancorpSterling BancorpFirst Interstate BancSystem, Inc.Texas Capital Bancshares, Inc.*First Midwest Bancorp, Inc.Trustmark CorporationFulton Financial Corporation* Glacier Bancorp Inc.* Denotes a company added to the peer group in 2017 and Heartland Financial USA, Inc. were removed from the peer group in 2017 because their size and/or loan mix were determined to no longer fit within the parameters of the peer group.
** Great Western Bancorp, Inc. was removed from the peer group following an acquisition by First Interstate BancSystem, Inc. on or around February 1, 2022.25 for executives currently consists of sixthe following key elements: ●Base Salary ●Retirement Benefits ● Annual Incentive Compensation ● Severance and Change-in-Control Benefits ● ● General Employee Benefitssix key elements reinforces our pay‑for‑performancepay-for-performance philosophy and strengthens our ability to attract and retain highly qualified executives in our highly competitive banking environment. We believe that this mix of fixed and variable pay advances both the short- and long-term interests of our business promotes creating long‑termand creates long-term shareholder value and helps us recruit and retain top executives.value. The Committee’s decisions regarding the executive compensation program design and individual pay are made in the context of the total compensation philosophy outlined above, including our financial performance. Named ExecutivesNEOs are reviewed on an annual basis, as well as at the time of a promotion or other change in responsibilities. In 2018,Effective February 28, 2021, the Committee approved merit-based adjustments to the base salaries of Messrs. Robbins, Stein, McDonald and Lawson of approximately 4%, 5%, 4% and 5%, respectively effective March 2018. The Committee also approved an adjustment to the base salary of Ms. BaruffiMessrs. Stein, Deer, Eid, Merrywell and McDonald of approximately 14%4.00%, 5.19%, 4.62%, 8.24% and 3.75%, respectively, which adjustment was both merit-basedadjustments were a combination of annual merit base and intended to generally reflect market observations from the 2017 Executive Compensation Study.adjustment. Named Executives’NEOs’ target compensation should be at risk, contingent upon the Committee’s assessment of performance. When determining earnedThe 2021 Annual Incentive Plan provided our NEOs the opportunity to earn a performance-based annual cash incentive awards,bonus. In early 2021, the Committee considersapproved the Company’s performance against pre-established financial performance measurestarget award opportunities below for each of the NEOs (expressed as well as the executive’s individual performance and contribution to the Company’s overall performance. Annual cash incentive awards therefore seek to drive progress toward achieving the Company’s annual business objectives and permit individual performance to be recognized.In early 2018, the Committee established target annual cash incentive opportunities for 2018 equal to 60% of base salary for Mr. Robbins (with a maximum of 90% of base salary), 50% of base salary for Mr. Stein (with a maximum of 75%) and 40% of base salary for Messrs. McDonald and Lawson and Ms. Baruffi (with a maximum of 60%percentage of base salary). In connection with his appointment as Chief Financial Officer, the Committee established Mr. Sigrist’sThe lower target annual cash incentiveaward opportunity for 2018 equalMr. McDonald is a result of the Committee’s decision to take into account his SERP entitlements when setting such target opportunities. Mr. McDonald’s SERP entitlements are discussed in further detail under “Post Employment and Termination Benefits-Legacy Supplemental Executive Retirement Plan.” base salary (with a maximumpre-established performance objectives and can range from 0% to 150% of 60% of base salary). Earned annual incentive awards were determinedindividual target award amounts based on the level of achievement of a weighted combination of Corporate (85% of award) and individual (15% of award) performance.goals:measures:
Core Pre-tax, Pre-Provision Return on Average Tangible Common Equity26Ratio of Operating Noninterest Expense to Average Assets
Ratio of Nonperforming Assets (“NPAs”) to period end Total Loans & other real estate owned (“OREO”) Performance Goals Weighting 2018 Actual % Achieved
Average Assets (%)*30% 1.73% 128.13% Core Pretax Return on Average Tangible Common Equity (%)* 25% 20.21% 140.00% 15% 2.60% 102.50% Ratio of Average Non-Performing Assets to period end Total Loans, OREO and OPPO (%)* 15% 0.88% 74.00% Individual Performance N/A N/A N/A 15% ** 100% Total: 115% of Target *(a)Core pretax returns on average assetsPre-tax, Pre-Provision ROAA; Core Pre-tax, Pre-Provision ROATCE; Operating Noninterest Expense / Average Assets and average tangible equity, the ratio of operating noninterest expense to average assets, and the ratio of average nonperforming assets to period end total loans, Other Real Estate Owned (OREO) and Other Personal Property Owned (OPPO)Avg. NPA / Total Loans & OREO are non-GAAP financial measures. Please refer to Appendix A for additional information regarding how these performance measuresand reconciliations to the most directly comparable GAAP financial measure.(b) Defined as net income before taxes, provisions for credit losses and unfunded commitments, business and occupation (“B&O”) taxes and merger-related expenses, divided by average assets. (c) Defined as net income before taxes, provisions for credit losses and unfunded commitments, B&O taxes, amortization of intangibles and merger-related expenses, divided by average tangible common equity. (d) Defined as noninterest expense less (i) merger-related expenses, (ii) B&O taxes, (iii) net cost or benefit of OREO and (iv) provision for unfunded commitments, divided by average assets. (e) Defined as the average of NPAs divided by total loans and OREO as of March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021, as reported in Columbia’s SEC filings. For this purpose, restructured loans are calculated fromnot included in the Company’s audited financial statements.definition of NPAs.** for each Named Executive are discussed below.
