2017 COMPENSATION DISCUSSION AND ANALYSIS
This section discusses Carver’s executive compensation philosophy, guidelines and programs. It also provides the material factors affecting the Compensation Committee’s decision making as it relates to Carver’s Named Executive Officers. The discussion and analysis is presented to provide shareholders a clear and comprehensive picture of Carver’s executive compensation program, and its individual components. For a full understanding of the information presented, please consider the following information together with the tables and its related narrative and footnotes below.
The following table lists Carver’s Named Executive Officers during the fiscal year ended March 31, 2017.
Name | | Position with Carver During Fiscal 2017 | Michael T. Pugh | | President and Chief Executive Officer | Christina L. Maier | | First Senior Vice President and Chief Financial OfficerCOMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS | John Spencer | | Senior Vice President, Chief Operations and Information Technology Officer | John Fitzpatrick | | First Senior Vice President and Chief Operating Officer | Blondel Pinnock | | Senior Vice President, Chief Lending Officer |
Executive Summary
2016 Shareholder Engagement and Say-On-Pay Results
Carver holds an annual non-binding shareholder advisory vote as part of our requirements under the EESA. Over 83% of our stockholders approved the “say-on-pay” proposal concerning the compensation of our Named Executive Officers described in our proxy statement in 2016. The Compensation Committee considered the significant approval of the “say-on-pay” proposal in its pay deliberations and determined that no significant changes to the Company’s executive compensation program were required for the fiscal year ended March 31, 2017.
Regulatory Programs and Agreements
Carver continues to be a participant in the TARP-CDCI. As such, Mr. Pugh is ineligible to receive cash-based incentive compensation and is subject to other compensation related restrictions. Additionally, on May 24, 2016, the Office of the Comptroller of the Currency (“OCC”) and Carver Federal entered into a Formal Agreement to carry out the compliance matters discussed further in the Carver Current Report on Form 8-K, as filed with the SEC on May 27, 2016. Under the Formal Agreement, Carver must comply with the requirements of the golden parachute regulations under 12 C.F.R. Part 359.
For more information, please refer to the “Compensation-Related Governance,” section in this Compensation Discussion and Analysis.
Compensation Philosophy
The ultimate goal of our compensation philosophy is to create long-term shareholder value by rewarding performance that furthers the strategic goals and growth of the Company. At the same time, the Compensation and Benefits Committee seeks to maintain an executive compensation program that is competitive with comparably-sized financial institutions. The Committee also considers its location and sources of talent in making pay determinations. As a small community bank in New York City, competitive pressures on the ability to attract and retain talent are intense. Most executives and staff are recruited to Carver from money center banks and other larger financial institutions.
The Committee believes that executive compensation should support Carver’s unique business strategy and result in compensation program that:
| · | Enables Carver to attract and retain top talent by providing competitive reward opportunities while at the same time effectively controlling compensation costs; |
| · | Places significant focus on incentive/performance based rewards that are contingent on achievement of Company and individual performance; and |
| · | Enhances Carver’s long-term stockholder value. |
Pay for Performance
Named Executive Officers, other than Mr. Pugh, earn a base salary and participate in the STI Plan and LTI Plan. Due to compensation restrictions under TARP-CDCI, Mr. Pugh, receives a base salary and has the opportunity to receive restricted stock.
Carver does not target a specific pay mix; however, each Named Executive Officer has a significant percentage of their pay at risk through the STI Plan and LTI Plan. The executives’ compensation opportunity is designed to provide pay below targeted pay levels if annual and/or long-term performance goals are not achieved. The compensation program is designed to provide pay at or above targeted pay levels if performance meets or exceeds goals.
Carver’s strategic vision is translated into specific performance goals, which the Committee considers in assessing performance and making total compensation decisions. To foster teamwork in building long-term performance and stockholder value, executive pay reflects a mix of Company, department and individual performance. Carver’s assessment of compensation and performance considers a balanced view of factors critical to understanding Carver’s total performance, as follows.
| · | Internal and External Benchmarks – Executive performance is measured against Carver’s financial, operational and strategic goals for the fiscal year, along with economic and industry factors that may impact performance or strategy. |
| · | Company and Individual Performance – Executives are incentivized to work together as a team to drive overall Company performance; however, each executive is also held accountable and rewarded for achieving individual goals. |
| · | Short and Long-Term Performance – Compensation reflects a balance of short-term performance (i.e., how Carver meets its annual goals) and long-term performance (i.e., building a platform for sustained, profitable growth over multiple years). |
| · | Unique Business Model – Carver’s legacy is anchored in a 65-year history of commitment to providing capital, and thereby expanding wealth enhancing opportunities, to consumers and institutions in historically low to moderate income communities. Opportunities created by a substantial expansion of economic opportunity in these communities in recent years is balanced by significantly greater competition from global institutions and persistently high rates of poverty, and therefore limited assets that can be invested by many of the residents of communities in which Carver operates. Carver’s“Outstanding”rating by the Office of the Comptroller of the Currency following its most recent Community Reinvestment Act (“CRA”) examination in January 2016 (conducted every three years), noted that 75% of Carver’s loans were originated in such communities, far exceeding peer institutions. |
Role of the Compensation Committee
The Compensation Committee operates under a written charter that establishes its responsibilities. A copy of the Compensation Committee Charter can be found on the Company’s website at www.carverbank.com. The Compensation Committee reviews the charter annually to ensure that the scope of the charter is consistent with the Committee’s expected role. Under the charter, the Committee is charged with general responsibility for the oversight and administration of the Company compensation program. The charter gives the Committee the sole responsibility for determining the compensation of the President and Chief Executive Officer based on the Committee’s evaluation of his performance. The charter also authorizes the Committee to engage consultants and other professionals without management approval to the extent deemed necessary to discharge its responsibilities.
The Compensation Committee is comprised of three members of the Board, each of whom is independent. The Compensation Committee met four times during the fiscal year ended March 31, 2017. The Chairman of the Committee reported on Committee actions at subsequent meetings of the Board of Directors.
Decisions regarding other executives are made by the Compensation Committee considering recommendations from the President and Chief Executive Officer and with input from the Senior Vice President and Chief Human Resources Officer. Decisions by the Compensation Committee with respect to compensation of the President and Chief Executive Officer are ratified by the non-executive members Board of Directors.
Interaction with the Compensation Consultant
The Committee has the sole authority to retain and terminate a compensation consultant and to approve the consultant’s fees and all other terms of the engagement. For the fiscal year ended March 31, 2017, the Compensation Committee retained the services of Pearl Meyer & Partners LLC ("Pearl Meyer"), an independent compensation consulting firm, to assist with compensation matters concerning the President and Chief Executive Officer. The Compensation Committee holds regularly scheduled executive sessions without management present with the compensation consultant and has direct access to Pearl Meyer. Pearl Meyer provided support to the Committee, mainly in regard to CEO compensation and performance evaluations during the fiscal year ended March 31, 2017 and attended no meetings of the Committee held in the fiscal year ended March 31, 2017.
Pearl Meyer reports directly to the Compensation Committee and does not provide any other services to the Company. The Compensation Committee has analyzed whether the work of Pearl Meyer as a compensation consultant has raised any conflict of interest, and has determined that the work of Pearl Meyer and the individual compensation advisors employed by Pearl Meyer as compensation consultants to the Company has not created any conflict of interest.
Role of Executives in Committee Deliberations
The Compensation Committee requests the President and Chief Executive Officer and Chief Human Resources Officer to be present at Committee meetings where executive compensation and Company or individual performance are discussed and evaluated. Executives are free to provide insight, suggestions or recommendations regarding executive compensation. However, only the Compensation Committee members are allowed to vote on decisions regarding executive compensation.
The Compensation Committee meets with the President and Chief Executive Officer to discuss his own performance and compensation package, but ultimately decisions regarding his compensation are made solely based upon the Committee’s deliberations with input from the compensation consultant, as requested. The President and Chief Executive Officer is not present at meetings at which his compensation is being discussed and determined. Decisions regarding executives reporting directly to the President and Chief Executive Officer are made by the Compensation Committee considering recommendations from the President and Chief Executive Officer, as well as input from the compensation consultant as requested.
Benchmarking of Compensation
The Compensation Committee periodically benchmarks compensation of executive officers and directors utilizing published industry surveys and publicly disclosed information from a peer group of publicly traded banks. The last comprehensive competitive market assessment by Pearl Meyer was conducted in February 2014. Data are collected from multiple survey sources and reflect banks of similar asset size or region to Carver.
Carver also utilizes a peer group of specific companies to benchmark industry best practices. The original peer group was selected by Pearl Meyer to reflect banks with similar asset size and region to Carver and approved by the Compensation Committee for the fiscal year ended March 31, 2014. Since then, peer banks that have been acquired are deleted from the group and the remaining banks are used to make relative financial comparisons under the LTIP Plan. As of the fiscal year end March 31, 2017, the peer group is as follows.
Peer Group | | | Berkshire Hills Bancorp Inc.
Chemung Financial Corporation
Clifton Savings Bancorp, Inc.
First of Long Island Corporation
Magyar Bancorp Inc.
| Northeast Community Bancorp Inc.
OceanFirst Financial Corporation
Severn Bancorp, Inc.
VSB Bancorp Inc.
|
Total Compensation Program Components
The main components of Carver’s total compensation program are: base salary, annual incentives, and long-term incentives.
The following sections summarize the role of each component, how decisions are made and resulting decisions for the fiscal year ended March 31, 2017 as they relate to the Named Executive Officers.
Base Salary
The purpose of base salary is to provide fixed, competitive pay that recognizes the executives’ role, responsibilities, experience, performance and past and potential contribution to Carver. Carver targets base salaries at the 50th percentile of the market; however, judgment is exercised in determining each executive’s base salary level relative to market. As a result, experienced and/or high performing executives may be paid above the market median and less experienced or average performing executives may be paid below the market median.
Base salaries for Blondel Pinnock and John Spencer were increased by 3% in the fiscal year ended March 31, 2017. The remaining Named Executive Officers did not receive salary adjustments in the fiscal year ended March 31, 2017.
Short-Term Incentive Plan (“STI Plan”)
The purpose of the STI Plan is to motivate and reward actual corporate, department and individual performance on an annual basis. The Compensation Committee reviews the STI Plan each year and, if necessary, adjusts the specific performance metrics, goals and compensation opportunities based on business objectives and the executives’ competitive position. No adjustments were made in the fiscal year ended March 31, 2017.
STI Plan pool funding is based on adjusted operating income (excluding allowances for loan and lease losses, taxes and the impact of any other one-time gains or losses). A threshold level of adjusted operating income is established and funding is adjusted up or down based on the Bank’s actual performance. Incentive payouts can range from 0% of target to a maximum payout of 150% of target (not including additional downside/upside adjustments based on individual performance factors – see explanation below).
The Compensation Committee reserves the right to either increase or decrease the calculated STI Plan pool based on multiple strategic metrics. In the fiscal year ended March 31, 2017, the Compensation Committee had the opportunity to consider:
Upon determination of the final STI pool amount, actual incentive payouts are based on the achievement of corporate and department/strategic goals. Weightings are dependent on the executive’s level (see table below for Named Executive Officers).
In addition to corporate and department goals, the STI Plan design includes an individual modifier that allows incentive awards to be modified (up or down) to reflect overall individual performance and contribution. As such, an individual incentive award can be increased by 30% for exceptional performance or reduced to 0% for poor performance.
For fiscal year 2017, Carver’s annual target incentive ratios for the Named Executive Officers were as follows:
| | STI Plan Weighting | | | Target STI Plan | | | Payout Range (as % of salary) | Executive | | Corporate | | | Dept. / Strategic | | | (as % of salary) | | | (inclusive of individual modifier) | | | | | | | | | | | | | Michael T. Pugh, President and Chief Executive Officer (1) | | | 50 | % | | | 50 | % | | | 30 | % | | 0% - 65.8% | | | | | | | | | | | | | | | | Christina L. Maier, First Senior Vice President and Chief Financial Officer | | | 50 | % | | | 50 | % | | | 50 | % | | 0% – 97.5% | | | | | | | | | | | | | | | | John Spencer, Senior Vice President and Chief Operations and Information Technology Officer (2) | | | 40 | % | | | 60 | % | | | 20 | % | | 0% – 48.8% | | | | | | | | | | | | | | | | John Fitzpatrick, First Senior Vice President and Chief Operating Officer (3) | | | 50 | % | | | 50 | % | | | 50 | % | | 0% - 97.5% | | | | | | | | | | | | | | | | Blondel Pinnock, Senior Vice President and Chief Lending Officer | | | 40 | % | | | 60 | % | | | 20 | % | | 0% - 39.0% |
| (1) | Notwithstanding the specified target incentive ratio designated for Mr. Pugh, Carver is prohibited from paying or accruing a bonus for Mr. Pugh under the STI Plan for any period that Carver continues to retain any financial assistance provided by the U.S. Treasury under TARP. For further information on Carver’s participation in TARP and this bonus restriction, see below under “Compensation-Related Governance – Participation in Troubled Asset Relief Program.” |
| (2) | Mr. Spencer’s position was eliminated as of March 31, 2017. |
| (3) | Mr. Fitzpatrick was hired in December 2016 pending regulatory approval and his position was approved in March 2017. |
After reviewing Carver’s fiscal year ended March 31, 2017 performance, the Compensation Committee determined that Carver did not meet the threshold adjusted operating income goal for the fiscal year ended March 31, 2017. No STI Plan payouts were received in the fiscal year ended March 31, 2017.
Long-Term Incentive Plan (“LTI Plan”)
The LTI Plan provides an opportunity for executives to receive cash or equity-based awards under the Carver Bancorp2014 Equity Incentive Plan. The goal of the LTI Plan is to promote Carver’s growth and profitability, to provide certain officers with an incentive to achieve corporate objectives, to attract and retain individuals of outstanding competence and to provide initial grants to new non-employee directors of Carver. The LTI Plan is also designed to align participants’ interests with stockholders of Carver and serves as a retention tool for key members of management.
The Compensation Committee reviews the LTI Plan each year and establishes specific goals and targets that are aligned with business objectives and Carver’s compensation philosophy. For the fiscal year ended March 31, 2017, the Compensation Committee considered the Company’s overall health and progress toward achieving financial and strategic objectives as the main determinant of equity award allocation. Eligible employees must also receive an individual performance score of 3 (on a scale of 1 to 5) to be considered.
Long-term incentives may be in the form of cash, stock options and/or restricted shares. Regardless of the type of award, the awards vest ratably over a five-year period. Vesting may be accelerated in the third or fourth year of if Carver meets or exceeds the current peer group’s average three-year ROE.
For the fiscal year ended March 31, 2017 long-term incentive target awards (as a percent of salary) for the Named Executive Officers are as follows:
| | | | Target | | Executive | | Position | | Award | | Michael T. Pugh(1) | | President and Chief Executive Officer | | | 30 | % | Christina L. Maier | | First Senior Vice President and Chief Financial Officer | | | 25 | % | John Spencer | | Senior Vice President and Chief Operations and Information Technology Officer | | | 20 | % | John Fitzpatrick | | First Senior Vice President and Chief Operating Officer | | | 25 | % | Blondel Pinnock | | Senior Vice President and Chief Lending Officer | | | 20 | % |
| (1) | Notwithstanding the specified target incentive ratio designated for Mr. Pugh, Carver is prohibited from paying or accruing a bonus for Mr. Pugh under the LTI Plan for any period that the Carver continues to hold any financial assistance provided by the U.S. Treasury under TARP. For further information on Carver’s participation in TARP and this bonus restriction, see below under “Compensation-Related Governance – Participation in Troubled Asset Relief Program.” |
No LTIP Plan awards nor any other awards under the Carver Bancorp2014 Equity Incentive Plan were made in the fiscal year ended March 31, 2017.
Compensation-Related Governance
Participation in the Troubled Asset Relief Program
On January 16, 2009, Carver entered into a Securities Purchase Agreement with the U.S. Treasury that provided for Carver’s participation in the Capital Purchase Program (“CPP”) under TARP.
TARP participants are required to agree to significant restrictions on executive compensation during the period in which the U.S. Treasury holds an equity position in Carver as a condition of participation. Also, the ARRA created compensation-related limitations in addition to compensation limitations under TARP and required the Secretary of the U.S. Treasury to establish additional standards for executive compensation that apply beyond Carver’s senior executive officers to include the 20 next most highly compensated employees. In compliance with such requirements, Carver’s senior executive officers or “SEO’s” and the next 20 most highly compensated employees have agreed in writing to accept the compensation restrictions under the TARP and ARRA and thereby limit some of their contractual or legal rights.
Under TARP and ARRA, while a participant in the TARP programs, the following compensation restrictions are in effect:
| · | Clawback of Bonus and Incentive Compensation if Based on Certain Material Inaccuracies. Incentive compensation paid that is later found to have been based on materially inaccurate financial statements or other materially inaccurate measurements of performance is subject to recovery by Carver. Carver’s senior executive officers and next 20 most highly paid employees acknowledge that each incentive program and each compensation or benefit agreement that incorporates incentive compensation was deemed amended to the extent necessary to give effect to such clawback. |
| · | No Compensation Arrangements that Encourage Excessive Risks.Carver is prohibited from entering into compensation arrangements that encourage employees to take “unnecessary and excessive risks that threaten the value” of Carver. To insure this does not occur, Carver’s Compensation Committee is required to meet at least once a year with senior risk officers to review Carver’s compensation arrangements in light of Carver’s risk management policies and practices. To the extent that such review suggests revisions to any compensation arrangement, Carver agrees to modify promptly the compensation arrangement to eliminate any undue risk. During the fiscal year ended March 31, 2017, the Compensation Committee met with Carver’s Chief Risk Officer and determined that Carver’s compensation program does not encourage unnecessary risk taking by executive officers. Carver’s short-term and long-term incentive programs use a broad based balance of performance measures with no one measurement dominating the payout determination. This feature greatly mitigates any incentive for an employee to engage in unnecessary or excessive risk. The performance measures include net income, loan and deposit growth, efficiency ratio, Sarbanes Oxley Act of 2002 (“SOX”) Section 404 compliance, New Markets Tax Credit allocation deployment and individual performance throughout the year. Company and departmental goals are based upon an annual business plan submitted to and approved by the Board of Directors, whereat the Board considers the reasonableness of the plan and its goals. Individual performance is based upon actual performance compared to pre-established performance goals and market and other conditions. In this connection, incentive compensation can be reduced to zero based upon individual performance, further ensuring employees are not rewarded for performance that is not in Carver’s best long term interests. |
| · | Limit on Federal Income Tax Deductions.Carver is prohibited from taking a federal income tax deduction for compensation paid to senior executive officers in excess of $500,000 per year. |
| · | Limit on Severance.Carver is prohibited from making severance payments resulting from termination of employment for any reason, except for payments for services performed or benefits accrued to Carver’s senior executive officers and the next 20 most highly compensated employees. |
| · | Limits on Incentive Compensation. The ARRA standards prohibit the payment or accrual of any bonus, retention award or incentive compensation to Carver’s most highly compensated employee (in Carver’s case, the President and Chief Executive Officer) other than awards of long-term restricted stock that (i) do not fully vest while participating in the TARP programs, (ii) have a value not greater than one-third of the total annual compensation of the employee and (iii) are subject to such other restrictions as determined by the Secretary of the U.S. Treasury. The prohibition on bonus, incentive compensation and retention awards does not preclude payments required under written employment contracts entered into on or prior to February 11, 2009. |
| · | Compensation Committee Functions. The ARRA requires that Carver’s Compensation Committee be comprised solely of independent directors and that it meets at least semiannually to discuss and evaluate Carver’s employee compensation plans in light of an assessment of any risk posed to Carver from such compensation plans. |
| · | Compliance Certifications.The ARRA requires a written certification by Carver’s President and Chief Executive Officer and Chief Financial Officer of Carver’s compliance with the provisions of ARRA. These certifications must be contained in Carver’s Annual Report on Form 10-K that is filed after the relevant U.S. Treasury regulations are issued. |
| · | U.S. Treasury Review of Excessive Bonuses Previously Paid.The ARRA directs the Secretary of the U.S. Treasury to review all compensation paid to Carver’s senior executive officers and Carver’s next 20 most highly compensated employees before date of enactment to determine whether any such payments were inconsistent with the purposes of ARRA or were otherwise contrary to the public interest. If the Secretary of the U.S. Treasury makes such a finding, the Secretary of the U.S. Treasury is directed to negotiate with the TARP recipient and the affected employees for appropriate reimbursements to the U.S. Treasury with respect to the compensation and bonuses. |
| · | Limitation on Luxury Expenditures.The Board of Directors must have in place a company-wide policy regarding excessive or luxury expenditures, as identified by the U.S. Treasury, which may include excessive expenditures on (i) entertainment or events, (ii) office and facility renovations, (iii) aviation or other transportation services, (iv) other unreasonable expenditures for staff development events, performance initiatives or other similar measures conducted in the normal course of business operations. |
| · | Say on Pay.Under ARRA, the SEC promulgated rules requiring a non-binding say on pay vote by shareholders on executive compensation at the annual meeting. Carver implemented this provision beginning with the proxy statement for the fiscal year ended March 31, 2009 by including the submission of an “Advisory Vote on Compensation of Named Executive Officers.” |
In February 2010, the U.S. Treasury announced the creation of the TARP-CDCI to invest lower-cost capital in community development financial institutions (“CDFI”) that lend to small businesses in the country’s hardest hit communities, in recognition of the unique role of CDFI’s as lenders in disadvantaged communities. Carver, as a CDFI, applied to participate in the TARP-CDCI program. On August 27, 2010, Carver completed an exchange of TARP CPP capital for TARP-CDCI capital. The transaction reduced the dividend rate that Carver pays the U.S. Treasury from 5% to 2%, saving $569,000 annually, and extending the total period in which this lower cost capital can be utilized from five to eight years. All restrictions on executive compensation that applied under TARP CPP remain in force under the TARP-CDCI program. Effective October 28, 2011, the U.S. Treasury exchanged 18,980 shares of Series B Preferred Stock that it held for 34,819,299 shares of common stock, pursuant to an Exchange Agreement by and between U.S. Treasury and Carver entered into on June 29, 2011. Pursuant to the Exchange Agreement, all restrictions on executive compensation that applied under TARP CPP and the TARP-CDCI program will continue to apply so long as the U.S. Treasury holds any of Carver’s securities.
Enforcement Actions with Carver and Carver Federal’s Bank Regulators
In May 2016, the OCC and Carver Federal entered into a Formal Agreement pertaining to certain compliance matters as more fully described in the Current Report on Form 8-K, as filed with the SEC on May 27, 2016. Furthermore, the OCC has designated that the Bank is in “troubled condition.” Accordingly, Carver and Carver Federal are required to comply with the requirements of the golden parachute regulations under 12 C.F.R. Part 359.
The FDIC golden parachute regulations limit the ability of Carver and Carver Federal to enter into contracts and to pay and make golden parachute payments to directors, officers, employees or controlling stockholders. A golden parachute payment includes, generally, any payment (or agreement to make any payment) in the nature of compensation which is contingent on such person’s termination of employment or affiliation with Carver or Carver Federal and is received on or after, or is made in contemplation of, when Carver Federal is or becomes troubled. Accordingly, for so long as Carver remains subject to the Order, no payments can be made under any employment agreement or change in control agreement or any other contract, agreement or arrangement that would become payable as a result of a director’s, officer’s or employee’s employment if such payment would constitute a golden parachute payment. Payments that become due under any tax-qualified plan, certain bona fide deferred compensation plans, nondiscriminatory severance pay plan (so long as the severance payment does not exceed 12 months of base compensation), and payments made by reason of death or disability, or payments that are approved by the FDIC are not subject to this limitation.
Compensation of Executive Officers and Directors
SUMMARY COMPENSATION TABLE AT MARCH 31, 2017 2020 The following table presents compensation information regarding Carver’s namedNamed Executive Officers at the fiscal year ended March 31, 2017.Name and Principal Position | | Year Ended 3/31 | | | Salary | | | Bonus | | | Stock Awards | | | Option Awards | | | Non-Equity Incentive Plan Compensation | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings | | | All Other Compensation (1) | | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Michael T. Pugh, President | | | 2017 | | | $ | 360,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 3,758 | | | $ | 363,738 | | and Chief Executive | | | 2016 | | | $ | 360,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 7,950 | | | $ | 367,950 | | Officer(2) | | | 2015 | | | $ | 263,250 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 6,885 | | | $ | 270,135 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Christina L. Maier, First
| | | 2017 | | | $ | 240,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 5,538 | | | $ | 245,538 | | Senior Vice President and | | | 2016 | | | $ | 17,538 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 17,538 | | Chief Financial Officer(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | John J. Fitzpatrick, First
| | | 2017 | | | $ | 64,615 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 1,107 | | | $ | 65,722 | | Senior Vice President and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Chief Operations Officer(4) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | John Spencer | | | 2017 | | | $ | 194,628 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 2,226 | | | $ | 196,854 | | Senior Vice President and | | | 2016 | | | $ | 188,959 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 5,087 | | | $ | 194,046 | | Chief Operations and
| | | 2015 | | | $ | 188,959 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 5,087 | | | $ | 194,046 | | Information Technology Officer(5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Blondel Pinnock | | | 2017 | | | $ | 185,764 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 4,236 | | | $ | 190,000 | | Senior Vice President and
| | | 2016 | | | $ | 180,353 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 5,410 | | | $ | 185,763 | | Chief Lending Officer | | | 2015 | | | $ | 180,353 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 5,410 | | | $ | 185,763 | |
2020.Michael T. Pugh, President
and Chief Executive Officer
| | | 2020 | | | $378,000 | | | — | | | — | | | — | | | — | | | — | | | $6,542 | | | $384,542 | | 2019 | | | $378,000 | | | — | | | — | | | — | | | — | | | — | | | $6,288 | | | $384,288 | Christina L. Maier, First
Senior Vice President and
Chief Financial Officer
| | | 2020 | | | $249,339 | | | — | | | — | | | — | | | — | | | — | | | $7,480 | | | $256,819 | | 2019 | | | $247,200 | | | — | | | — | | | — | | | — | | | — | | | $7,416 | | | $254,616 | Sophia Haliotis, Senior
Vice President and Chief
Credit Officer
| | | 2020 | | | $204,252 | | | — | | | — | | | — | | | — | | | — | | | $6,127 | | | $210,379 | | 2019 | | | $201,538 | | | — | | | — | | | — | | | — | | | — | | | $6,046 | | | $207,584 |
(1)
| Except as noted, the amounts shown in this column reflect matching contributions made to Carver’s 401(k) Plan. No Named Executive Officer receives perquisites the aggregate value of which exceeds $10,000. |
Outstanding Equity Awards at Fiscal Year End The following table shows equity awards outstanding for each of our named executive officers as of March 31, 2020. Michael T. Pugh | | | — | | | — | | | — | | | — | | | — | | | 06/27/2019 | | | 10,000 | | | 18,900 | Christina L. Maier | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Sophia Haliotis | | | — | | | — | | | — | | | — | | | — | | | 06/27/2019 | | | 6,000 | | | 11,340 |
(1)
| Vest over three years, one third in each year commencing on June 27, 2020. |
(2)
| Michael T. Pugh was appointed toAmounts shown are based on the position of President and Chief Executive Officerfair market value of Carver and Carver Federal, effective January 1, 2015. | (3) | Ms. Maier was appointed as Chief Financial Officercommon stock on June 27, 2020 of Carver and Carver Federal on March 7, 2016. | (4) | Mr. Fitzpatrick was appointed as Chief Operations Officer of Carver and Carver Federal on February 21, 2017. | (5) | Mr. Spencer resigned as Chief Operations and Information Technology Officer of Carver and Carver Federal on March 31, 2017$3.04. |
Nonqualified Deferred Compensation Plans
Carver does not offer any non-qualified deferred compensation plans.
Benefit Plans Performance Compensation Plan. Carver maintains a Performance Compensation Plan which is a cash-based incentive plan that provided certain officers and employees of Carver an incentive cash award that is credited to a memorandum account maintained by Carver for the benefit of such persons. The awards granted vest over a five-year period on the specified vesting dates, and under the terms of the Performance Compensation Plan are subject to accelerated vesting in connection with a change in control, or by reason of the death or disability of the participant. Upon the vesting of an award or a percentage of an award, the vested amount is distributed to the participant as soon as practicable, but in no event later than the 15th day of the third month following the end of the plan year. In the event of the participant’s termination due to death, disability or a change in control, the Performance Compensation Plan provides that the participant’s vested account balance will be paid within 30 days following the termination of the employee’s employment. No awards have been made under the Performance Compensation Plan subsequent to the date that Carver entered into the TARP CPP with the U.S. Treasury.
401(k) Savings Plan.Plan. Carver maintains a 401(k) Savings Plan (“401(k) Plan”Plan”) with a profit sharingprofit-sharing feature for all eligible employees of Carver. Carver matched contributions to the 401(k) Plan equal to 100% of pre-tax contributions made by each employee up to a maximum of 3% of their pay, subject to IRS limitations. All such matching contributions are fully vested and non-forfeitable at all times regardless of the years of service with the Bank. Carver employees will be eligible to participate upon their hire date. To be eligible for the matching contribution, the employee must be 21 years of age and have completed at least three months of service.age. Under the profit-sharing feature of the plan, if the Bank achieves a minimum of 70% of its fiscal year performance goal, the Compensation Committee may authorize an a non-elective contribution to the 401(k) Plan on behalf of each eligible employee of up to 2% of the employee’s annual pay, subject to IRS limitations. This non-elective contribution, if made, is awarded regardless of whether the employee makes voluntary contributions to the 401(k) Plan. Non-elective Company contributions vest 20% each year for the first five years of employment and are fully vested thereafter. To be eligible for the non-elective company contribution, the employee must be 21 years of age, have completed at least one year of service and be employed on the last day of the plan year, currently December 31, or have terminated employment for death, disability or retirement. Carver did not award a non-elective contribution for the 401(k) Plan year that ended December 31, 2015.2019. Employment and Other Agreements with Executive Officers Notwithstanding their employment and letter agreements as summarized below, Carver’s Named Executive Officers have agreed in writing to accept the ARRA standards discussed earlier in this document and to not accept any severance during the period in which the U.S. Treasury holds an equity position in Carver. Additionally, under the Orders issued by the regulators on February 7, 2011, Carver is prohibited from fulfilling severance payment commitments, resulting from termination for any reason (except for payments performed or benefits accrued), that are outside the scope of a non-discriminatory, all-employee severance program.
On January 1, 2015, Carver Federal entered into an employment agreement (the “Employment Agreement”“Employment Agreement”) with Michael T. Pugh, President and Chief Executive Officer. The term of the Employment Agreement is three years.specified the terms of Mr. Pugh’s employment, duties and responsibilities, salary and benefits, and further specified the terms of severance in the event of his involuntary termination without cause or due to a change in control. The Employment Agreement had a three-year term and Mr. Pugh’s performance will be reviewed by the Board of Directors of the Bank six monthswas renewable six-months before the third anniversary and six months before each anniversary thereafter, and the Board of Directors may approve a one-year extension of the Employment Agreement after each such review.
Under the Employment Agreement, Mr. Pugh is entitled to a base salary of $360,000, subject to increase at the discretion of the Board of Directors of the Bank in connection with its annual review. The Employment Agreement provides that Mr. Pugh was eligible for a restricted stock award to be granted on or about April 15, 2016, 2017 and 2018, with the amount of each award to be at the discretion of the Board of Directors of the Bank, but not fewer than 7,250 restricted shares of the Company’s common stock. The Employment Agreement also provides for participation in the Bank’s retirement, pension, savings, profit-sharing, stock bonus, health and welfare and any other employee benefit and compensation plans covering employees of the Bank. In addition, the Employment Agreement provides that the Bank shall provide to Mr. Pugh a term life insurance policy in the amount of $1,000,000 payable to his beneficiaries. The Employment Agreement further provides that, in the event that the amount of benefits or contributions Mr. Pugh would have received or accrued under the tax-qualified plans of the Bank is limited by applicable sections of the Internal Revenue Code of 1986, as amended (the “Code”), the Bank will provide Mr. Pugh with supplemental benefits equal to the benefits attributable to employer contributions that he would have received if the limitations did not apply, with such benefits payable in 12 equal monthly installments beginning at least six months after his separation from service with the Bank. Finally, the Bank will pay or reimburse Mr. Pugh $2,500 per month in transportation and accommodation expenses during the period January 1, 2015 to August 31, 2015 until the location of his primary residence is completed, for customary relocation expenses, and up to $11,795 for legal expenses incurred by him in connection with the Employment Agreement.
Mr. Pugh may terminate his employment for “good reason,” which includes (i) a material diminution of his title, duties, responsibilities, authority or reporting lines, (ii) a material diminution in base salary, (iii) relocation of his principal office by more than 50 miles, and (iv) a material breach of the Employment Agreement by the Bank.
In the event that Mr. Pugh resigns for good reason or in the event the Company or the Bank terminates the employment of Mr. Pugh for any reason other than “cause” (as defined in the Employment Agreement) or “disability” (as defined in the Employment Agreement), he will be entitled to receive a cash lump sum payment equal to the present value of the salary that he would have earned if he had continued working for the Bank through the then-current expiration date of the Employment Agreement (the “Remaining Unexpired Employment Period”). If such resignation or termination occurs in connection with or within one year following a “change in control” (as defined in the Employment Agreement), then Mr. Pugh will be entitled to receive a cash lump sum payment equal to the lesser of (i) the present value of salary he would have earned during the Remaining Unexpired Employment Period plus one additional year, or (ii) the present value of two-times his then-current salary had it been paid out over the following two years. Any payments are required to be paid within 30 days after termination of employment, unless a six month delay in the payments is required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Code”). Mr. Pugh will also be entitled to receive a cash lump sum payment equal to (i) the excess of the present value of the aggregate benefits to which he would be entitled under any defined benefit pension plans over the present value of the benefits to which he is actually entitled under such defined benefit pension plans as of the date of his termination, (ii) the present value of the additional employer contributions to which he would have been entitled under any defined contribution plans, (iii) the fair market value of any stock that would have been allocated or awarded to him under any stock-based employee benefit plans, (iv) the payments that would have been made to him under any cash bonus or long-term or short-term cash incentive compensation plan and (v) the present value of any supplemental retirement benefits to which he would have been entitled, in each case if he were 100% vested under the applicable plan and had continued working for the Bank during the Remaining Unexpired Employment Period. In addition, Mr. Pugh will be entitled to receive, at his election, a cash lump sum payment equal to (i) the excess of fair market value of a share of the Company’s common stock over the exercise price of any option or stock appreciation right held by him, and (ii) the fair market value of any restricted shares awarded to him, in each case upon surrender of such stock, option or appreciation right. The Bank will continue to provide health and welfare benefits, as well as the term life insurance policy, to which Mr. Pugh and his eligible dependents would have been entitled for the Remaining Unexpired Employment Period and for any such additional period to which they are entitled under COBRA.
In the event of Mr. Pugh’s termination for “disability” (as defined in the Employment Agreement), he will be entitled to receive ¾ of his base salary, and the Bank shall continue to provide health and welfare benefits substantially identical to those received prior to his disability, through the earliest to occur of (i) his return to full-time employment in the same capacity as he was employed prior to disability, (ii) his full-time employment by another employer, (iii) his reaching age 65, (iv) his death, or (v) the expiration of the term of the Employment Agreement.
All payments are subject to Section 409A and Section 280G of the Code, and restrictions resulting from the Bank’s participation in the Troubled Asset Relief Program and other regulatory restrictions.
Mr. Pugh has agreed, for a period of one year following the date of his termination (or, if less, the Remaining Unexpired Employment Period), not to become an officer, employee, consultant, director or trustee of any bank with less than two billion dollars in assets or any minority depository institution, or any direct or indirect subsidiary or affiliate of any such entity, that competes with the business of the Bank in any city, town or county in which the Bank has an office or has filed an application for approval to establish an office.
annually thereafter. Due to the fact that the Bank is in troubled condition, Mr. Pugh's employment agreement cannot be renewed without the prior approval of the OCC. As a result, the term of the Employment Agreement expired on January 1, 2018. Carver entered into a letter agreement with Ms. Maier. Generally, the letter agreement provides for “at-will” employment and compensation in the form of base salary and benefits. Carver’s directors are paid an annual cash retainer of $10,000 to serve as a Director of both Carver and Carver Federal and receive a meeting fee of $600$750 for Board Meetings attended and $700 per Executive Committee meeting attended. The chairs of the Asset Liability and Interest Rate Risk Committee (“ALCO”)and Finance and Audit committees receive an annual retainer of $7,500 and $5,000, respectively, and a meeting fee of $650.$825. The chair of the Compliance Committee receives an annual retainer of $7,500. The chairs of the remaining committees receive an annual retainer of $1,500$2,500. The committee members of the Compensation, Institutional Strategy and all committee membersNominating and Corporate Governance, including the chairs thereof receive $475 per committee meeting attended. The Non-Executive ChairmanChairperson is paid a quarterly cash retainer of $10,000$15,000 ($ 40,00060,000 per year) to serve as ChairmanChairperson of both Carver and Carver Federal and receivesdoes not receive a meeting fee of $1,500 for Board Meetings attended. Upon shareholder approval of new directors, the Compensation Committee may approve a grant of 1,000 shares of restricted stock and 1,000 stock options, which vest pursuant to Carver’s incentive plan in effect at the time of the grant. In 2010, after a competitive study of Non-Employee Director Compensation conducted by Pearl Meyer, the Compensation Committee voted to grant annual restricted stock awards in the amount of $5,000 to each Non-Employee director at subsequent annual meetings. All other compensation elements would remain unchanged. The Non-Employee Directors have not received annual restricted stock awards given the constraints on Carver’s Equity Plan. The following table sets forth information regarding compensation earned by the non-employee directors of Carver during the fiscal year ended March 31, 2017.2020. DIRECTOR COMPENSATION AT MARCH 31, 2017 | | | | | | | | | | | | | | Change in | | | | | | | | | | | | | | | | | | | | | | pension | | | | | | | | | | Fees | | | | | | | | | | | | value and | | | | | | | | | | earned | | | | | | | | | Non-equity | | | nonqualified | | | | | | | | | | or paid | | | Stock | | | Option | | | incentive plan | | | deferred | | | All other | | | | | | | in cash | | | awards | | | awards | | | compensation | | | compensation | | | compensation | | | Total | | Name | | ($) | | | ($) | | | (S) | | | ($) | | | earnings | | | ($) | | | ($) | | (a) | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | Pazel G. Jackson, Jr. | | $ | 38,950 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 38,950 | | Robert Tarter | | $ | 38,450 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 38,450 | | Susan Tohbe | | $ | 33,900 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 33,900 | | Janet Rollé | | $ | 18,025 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 18,025 | | Lewis P. Jones III | | $ | 27,175 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 27,175 | | Colvin W. Grannum | | $ | 23,400 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 23,400 | | Kenneth Knuckles | | $ | 27,025 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 27,025 | | Ingrid LaMae deJongh
| | $ | 22,875 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 22,875 | | Craig C. MacKay (1) | | $ | 6,925 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 6,925 | | William J. Taggart (2) | | $ | 5,250 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 5,250 | |
2020Pazel G. Jackson, Jr. | | | $40,800 | | | — | | | — | | | — | | | — | | | — | | | $40,800 | Robert R. Tarter(1) | | | $67,500 | | | — | | | — | | | — | | | — | | | — | | | $67,500 | Susan M. Tohbe | | | $48,125 | | | — | | | — | | | — | | | — | | | — | | | $48,125 | Janet L. Rollé | | | $22,225 | | | — | | | — | | | — | | | — | | | — | | | $22,225 | Lewis P. Jones III | | | $33,325 | | | — | | | — | | | — | | | — | | | — | | | $33,325 | Colvin W. Grannum | | | $26,600 | | | — | | | — | | | — | | | — | | | — | | | $26,600 | Kenneth J. Knuckles | | | $27,300 | | | — | | | — | | | — | | | — | | | — | | | $27,300 | Craig C. MacKay | | | $32,300 | | | — | | | — | | | — | | | — | | | — | | | $32,300 | Jillian E. Joseph | | | $18,250 | | | — | | | — | | | — | | | — | | | — | | | $18,250 |
| (1)
| Mr. MacKay was appointed toTarter resigned from the Company’s BoardBoards of Directors on February 21, 2017. |
| (2) | Mr. Taggart was appointed to the Company’s Board of Directors on February 21, 2017Carver Bancorp, Inc. and subsequently passed away on June 8, 2017.Carver Federal Savings Bank, effective March 31, 2020. |
Impact of Accounting and Tax on the Form of Compensation The Compensation Committee and Carver consider the accounting and tax (individual and corporate) consequences of the compensation plans prior to making changes to the plans. The Compensation Committee has considered the impact of the Financial Accounting Standards Board (“ FASB”FASB”) Accounting Standards Codification (ASC) Topic 718 (formerly SFAS No. 123(R), on Carver’s use of equity incentives as a key retention tool. As part of its role, the Compensation Committee also reviews and considers sections of the Internal Revenue Code (“ IRC”IRC”), including but not limited to, Golden Parachutes Under IRC Section 280G and the deductibility of executive compensation under Section 162(m) which limits deduction of compensation paid to Named Executive Officers to $1,000,000 unless the compensation is “qualified “qualified performance-based compensation”.compensation.” This applies to base salary, all cash incentive plans, and equity grants other than stock options. For the fiscal year ended March 31, 2017,2020, no employee received taxable compensation in excess of $1,000,000 and therefore, deductibility of compensation was not limited by these sections of the IRC. In December 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was enacted (the “Tax Act”).enacted. Under the Tax Act, the qualified performance-based compensation exception to IRC 162(m) was repealed, effective for tax years commencing on or after January 1, 2018. Accordingly, commencing with oureffective as of the fiscal year ending March 31, 2019,2020, compensation to our Named Executive Officers in excess of $1,000,000 willis generally not be deductible. Option Granting Practices The timing of Carver’s option grants has historically been and continues to be determined upon appointment to the Board, upon hire, or in conjunction with incentive grants after Carver’s fiscal year end and approved by the Compensation Committee. In fiscal 2017,year 2020, no options were granted to Named Executive Officers. Carver regularly reviews the ownership levels of its directors and officers and has not established minimum stock ownership guidelines for Carver’s directors and the Named Executive Officers. Securities Authorized for Issuance Under Equity Compensation Plans The following table sets forth information about the shares of Voting Stock authorized by Carver for issuance under equity compensation plans as of March 31, 2017. | | | | | | | | Number of | | | | | | | | | securities | | | | | | | | | remaining | | | Number of | | | Weighted- | | | available for future | | | securities to be | | | average | | | issuance under | | | issued upon | | | exercise | | | equity | | | exercise of | | | price of | | | compensation plans | | | Outstanding | | | outstanding | | | (excluding | | | options, | | | options, | | | securities | | | warrants and | | | warrants | | | reflected in column | Plan Category | | Rights | | | and rights | | | (a)) | | | | | | | | | | Equity compensation plans approved by security holders (1) | | | 5,924 | | | $ | 81.65 | | | 264,075 | | | | | | | | | | | | Equity compensation plans not approved by security holders | | | — | | | | — | | | — | | | | | | | | | | | | Total | | | 5,924 | | | $ | 81.65 | | | 264,075 |
2020.Equity compensation plans approved by security holders(1) | | | 4,733 | | | $7.71 | | | 245,400 | Equity compensation plans not approved by security holders | | | — | | | — | | | — | Total | | | 4,733 | | | $7.71 | | | 245,400 |
| (1)
| Note: Shares have been adjusted to reflect Carver’s 1-for-15 reverse stock split, effective October 27, 2011. |
Carver’s Stock Incentive Plans do not provide for re-pricing of stock options, which is the cancellation of shares in consideration of the exchange for other stock options to be issued at a lower price, and Carver has not acted to re-price stock options. ADDITIONAL INFORMATION
Date for Submission of Stockholder Proposals To be eligible for inclusion in the proxy materials for next year’s annual meeting of stockholders, any stockholder proposal to take action at such meeting must be received at Carver’s executive office, 75 West 125 th Street, New York, New York 10027, no later than April 28, 2018.21, 2021. Notice of Business to be Conducted at Annual Meeting Carver’s Bylaws provide an advance notice procedure for a stockholder to properly bring business before an annual meeting or to nominate any person for election to Carver’s Board of Directors. The stockholder must be a stockholder of record and have given timely notice thereof in writing to the Corporate Secretary of Carver. To be timely, a stockholder’s notice must be delivered to or received by the Corporate Secretary not later than the following dates: (1) with respect to an annual meeting of stockholders, 60 days in advance of such meeting, if such meeting is to be held on a day which is within 30 days preceding the anniversary of the previous fiscal year’s annual meeting, or 90 days in advance of such meeting if such meeting is to be held on or after the anniversary of the previous fiscal year’s annual meeting; and (2) with respect to an annual meeting of stockholders held at a time other than within the time periods set forth in the immediately preceding clause, the close of business on the 10th day following the date on which notice of such meeting is first given to stockholders. Notice shall be deemed to be first given to stockholders when disclosure of such date of the meeting of stockholders is first made in a press release reported to Dow Jones News Services, Associated Press or comparable national news service, or in a document publicly filed by Carver with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act. A stockholder’s notice to the Corporate Secretary of Carver shall set forth such information as required by the Bylaws of Carver. Nothing in this paragraph shall be deemed to require Carver to include in its proxy statement and proxy card relating to an annual meeting any stockholder proposal or nomination that does not meet all of the requirements for inclusion established by the SEC in effect at the time such proposal or nomination is received. See “Date for Submission of Stockholder Proposals.”
Householding of Proxy Materials The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. This year, Carver expects that a number ofseveral brokers with account holders who are our stockholders will be “householding” its proxy materials. A single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, please notify your broker. Stockholders who currently receive multiple copies of the proxy statement and annual report at their address and would like to request “householding” of their communications should contact their broker. In addition, Carver will promptly deliver, upon written or oral request to its address or telephone number below, a separate copy of the proxy materials and annual report to a stockholder at a shared address to which a single copy of the documents was delivered. Direct your written request to Carver Bancorp Inc., 75 West 125 th Street, New York, New York 10027, Attention: Corporate Secretary, or contact us at (718) 230-2900. As of the date of this proxy statement, the Board of Directors does not know of any other matters to be brought before the stockholders at the Annual Meeting. If, however,However, if any other matters not now known are properly brought before the Annual Meeting, the persons named in the accompanying proxy card will vote the shares represented by all properly executed proxies on such matters using their best judgment. Annual Report to Stockholders A copy of the Annual Report to Stockholders for the fiscal year ended March 31, 2017,2020, containing financial statements as of March 31, 20172020 and March 31, 20162019 and for each of the years in the two-year period ended March 31, 2017,2020, prepared in conformity with generally accepted accounting principles, accompanies this proxy statement. The consolidated financial statements have been audited by BDO USA, LLP whose report thereon is included in the Annual Report for the fiscal year ended March 31, 2017.2020.
The Annual Report for the fiscal year ended March 31, 20172020 includes a copy of Carver’s annual report on Form 10-K for the fiscal year ended March 31, 2017,2020, as filed with the SEC. Stockholders may obtain, free of charge, a copy of such annual report (excluding exhibits) by writing to Isaac Torres,Jimmy Montes, 1st VP, Senior Vice President, General Counsel and Corporate Secretary, Carver Bancorp, Inc., 75 West 125th Street, New York, New York 10027, or by telephoning (718) 230-2900. The annual report on Form 10-K for fiscal year 20172020 is also available on Carver’s website atwww.carverbank.com and on the SEC website atwww.sec.gov. | | | By Order of the Board of Directors | | | | | | | | /s/ Isaac TorresJimmy Montes | | Isaac Torres | | Jimmy Montes | | SVP, General | | 1st VP, Senior Counsel and Corporate Secretary |
New York, New York January 29, 2018
August 20, 2020 To Assure That Your Shares Are Represented at the Annual Meeting,
Please Sign, Date, and Promptly Return the Accompanying
Proxy Card in the Enclosed Postage-Paid Envelope or Use
Telephone Voting as Described in the Proxy Statement25
VOTE BY INTERNETBefore The Meeting- Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.During The Meeting- Go to www.virtualshareholdermeeting.com/CARV2017 You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.CARVER BANCORP, INC. 75 WEST 125TH STREET NEW YORK, NY 10027-4512 ATTN: ISAAC TORRESFor All Withhold All For All ExceptTo withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.CARVER BANCORP, INC. The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: 01) Colvin W. Grannum 02) Lewis P. Jones III 03) Craig C. MacKay 04) Janet L. Rolle For Against Abstain 2. To ratify the appointment of BDO USA as independent auditors for Carver Bancorp, Inc. for the fiscal year ending March 31, 2018. 3. Advisory (non-binding) approval of the compensation of our named executive officers as described in the proxy statement. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. For address changes and/or comments, please check this box and write them on the back where indicated.Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
CARVER BANCORP, INC.Annual Meeting of Shareholders February 28, 2018 10:00 AM
This proxy is solicited by the Board of DirectorsThe shareholder(s) hereby appoint(s) Robert R. Tarter and Michael T. Pugh, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of CARVER BANCORP, INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders, which will be a completely virtual meeting conducted via live webcast to be held at 10:00 AM, EST on February 28, 2018, at www.virtualshareholdermeeting.com/CARV2017,and any adjournment or postponement thereof.This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. IF PROPERLY SIGNED, BUT NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES LISTED IN ITEM 1, AND “FOR” THE PROPOSALS LISTED IN ITEMS 2 AND 3. If any other matters properly come before the Annual Meeting, the Proxy Committee will vote the shares represented by all properly executed proxies on such matters using their best judgment. As of the date of the proxy statement, Carver Bancorp, Inc.’s management is not aware of any other such business. Should the undersigned be present and elect to vote at the Annual Meeting or at any adjournment thereof and after notification to theSecretary of the Company at the Annual Meeting of the shareholder’s decision to terminate this proxy, then the power of the Proxy Committee and previously submitted proxies shall be deemed terminated and of no further force and effect. This proxy may also be revoked by sending written notice to the Secretary of the Company at the address set forth on the Notice of Annual Meeting of Shareholders, or by the filing of alater proxy prior to a vote being taken on a particular proposal at the Annual Meeting.Address Changes/Comments:(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)Continued and to be signed on reverse side
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