UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



SCHEDULE 14A


(RULE 14a-101)

INFORMATION REQUIRED IN

PROXY STATEMENT


SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934


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OFG Bancorp

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March 18, 2021

27, 2024

Dear Shareholder:

You are cordially invited to attend our annual meeting of shareholders, which will be held virtually on Wednesday, April 28, 2021May 8, 2024 at www.virtualshareholdermeeting.com/OFG2021OFG2024. The meeting will begin promptly at 10:00 a.m. (EST).

Details of the business to be conducted at the annual meeting are given in the attached notice of annual meeting and proxy statement. Only shareholders of record as of March 3, 2021,11, 2024, are entitled to notice of, and to vote at, the annual meeting or any adjournments or postponements thereof.

Your vote is important. Our proxy statement was made publicly available over the internet on March 27, 2024 and is also enclosed with this letter. Please review the enclosed proxy statementit and submit your vote promptly even if you plan to attend the virtual meeting. We encourage you to vote over the Internet or by telephone prior to the meeting.

To attend the virtual meeting, you will need to log in with a 16-digit control number found on your notice of availability of proxy materials. For more details and instructions, please refer to the enclosed proxy statement and proxy card.

We look forward to seeing you at our virtual annual meeting.

Sincerely,

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Julian S. Inclán

Chairperson




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P.O. Box 195115

San Juan, Puerto Rico 00919-5115

NOTICE OF VIRTUAL ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON April 28, 2021

MAY 8, 2024

Notice is hereby given that the annual meeting of shareholders of OFG Bancorp (“we,” “us,” “our,” or the “Company”), a financial holding company and corporation organized under the laws of the Commonwealth of Puerto Rico, is scheduled to be held virtually at www.virtualshareholdermeeting.com/OFG2021OFG2024 commencing at 10:00 a.m. (EST) on Wednesday, April 28, 2021,May 8, 2024, to consider and vote upon the following matters described in this notice and the accompanying proxy statement:

1.

To elect seven directors for a one-year term expiring at the 2022 annual meeting of shareholders and until their successors are duly elected and qualified;

2.

To provide an advisory vote on executive compensation;

1.    To elect seven directors for a one-year term expiring at the 2025 annual meeting of shareholders and until their successors are duly elected and qualified;

3.

To ratify the selection of the Company’s independent registered public accounting firm for 2021; and

2.    To provide an advisory vote on executive compensation;

4.

To transact such other business as may properly come before the annual meeting or at any adjournments or postponements thereof.  Except with respect to procedural matters incident to the conduct of the annual meeting, the Company is not aware of any other business to be brought before the annual meeting.

3.    To ratify the selection of the Company’s independent registered public accounting firm for 2024; and

4.    To transact such other business as may properly come before the annual meeting or at any adjournments or postponements thereof. Except with respect to procedural matters incident to the conduct of the annual meeting, the Company is not aware of any other business to be brought before the annual meeting.
These matters are described more fully in the accompanying proxy statement, which you are urged to read thoroughly. The Company’s Board of Directors recommends a vote “FOR” each of the proposals. Only shareholders of record at the close of business on March 3, 2021,11, 2024, are entitled to notice of, and to vote at, the annual meeting.

To assure representation at the annual meeting, shareholders are urged to return a proxy as promptly as possible either by voting through the Internet or telephone, or by signing, dating and returning a proxy card in accordance with the enclosed instructions. Any shareholder attending the annual meeting may vote at the meeting even if he or she previously returned a proxy.

In San Juan, Puerto Rico, on March 18, 2021.

27, 2024.

By order of the Board of Directors,

Carlos O. Souffront


H. González (002).jpg
Hugh González
Secretary




TABLE OF CONTENTS


GENERAL QUESTIONS ABOUT THE ANNUAL MEETING

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Overview

22

20

Executive Summary

22

20

What Guides Our Program

24

21

Determination of Compensation Decisions

25

22

Analysis of Compensation Decisions

28

24

Other Compensation Practices

32

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PROXY STATEMENT FOR THE VIRTUAL ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON Wednesday, April 28, 2021

WEDNESDAY, MAY 8, 2024

This proxy statement contains important information related to the annual meeting of shareholders of OFG Bancorp (“we,” “us,” “our,” or the “Company”). Our annual meeting of shareholders will be held virtually at www.virtualshareholdermeeting.com/OFG2021OFG2024 on Wednesday, April 28, 2021May 8, 2024 at 10:00 a.m. (EST), or any adjournments or postponements thereof. This proxy statement and the accompanying proxy card are expected to be made available to shareholders on or about March 18, 2021.

General Questions about the Annual Meeting

May 8, 2024.


GENERAL QUESTIONS ABOUT THE ANNUAL MEETING
What information is contained in this proxy statement?

The information in this proxy statement relates to the proposals to be voted on at the annual meeting, the voting process, our Board of Directors and its committees, the compensation of our directors and executive officers, and other required information.

Who is soliciting my vote?

Our Board of Directors is soliciting your vote at the annual meeting.

Who will bear the costs of soliciting proxies for the annual meeting?

This solicitation of proxies is made on behalf of our Board of Directors, and we will bear the costs of solicitation. The expense of preparing, assembling, printing and mailing this proxy statement and the materials used in this solicitation of proxies also will be borne by us. It is contemplated that proxies will be solicited principally through the internet or mail, but our directors, officers and employees may solicit proxies personally or by telephone. Upon request, we will reimburse banks, brokers and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for distributing these proxy materials to our shareholders.

We have retained Georgeson LLC, an independent proxy solicitation firm, to assist us with the solicitation of proxies for a fee not to exceed $12,500,$13,500, plus reimbursement for out-of-pocket expenses.

What is the purpose of the annual meeting?

At the annual meeting, shareholders will act upon the matters outlined in the accompanying notice of annual meeting of shareholders, including the election of seven directors, the advisory vote related to executive compensation, the ratification of the selection of the Company’s independent registered public accounting firm for 2021,2024 and the transaction of any other business that may properly come before the meeting or any adjournments or postponements thereof. Proxies solicited hereby may be exercised only at the annual meeting, including any adjournments or postponements thereof, and will not be used for any other purpose.

Who is entitled to vote?

Only shareholders of record at the close of business on the record date, March 3, 202111, 2024 are entitled to receive notice of the annual meeting and to vote the shares of common stock that they held on that date at the meeting, or any adjournments or postponements thereof. As of the close of business on the record date, there were 51,548,69247,146,411 shares of our common stock outstanding.

1


What is the difference between a holder of record and a beneficial owner ofshares held in street name?

Holder of Record. If your shares are registered directly in your name with our transfer agent, American Stock Transfer &Equiniti Trust Company, LLC, you are considered the holder (or shareholder) of record with respect to those shares. As a holder of record, you should have been furnished thisthe notice of internet availability of proxy statementmaterials and a proxy card directly by us.

Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a securities broker, bank or other similar organization acting as a nominee, then you are considered the beneficial owner of shares held in “street name.” The organization holding your account is considered the holder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account. Accordingly, you should have been furnished thisthe notice of internet availability of proxy statementmaterials and a voting instruction form by that organization.

How do I vote?

You can vote by proxy prior to the meeting or through the virtual meeting platform during the meeting. We highly recommend that you vote by proxy prior to the meeting even if you plan to attend the meeting. Detailed instructions on how to vote by proxy through the internet, by telephone or by mail will be set forth in the notice of internet availability of proxy materials that you will receive through the mail. This notice will also include a 16-digit control number that you will need to attend the virtual meeting and vote your shares at the meeting through the virtual meeting platform. Your vote by proxy must be received as of the close of Tuesday, April 27, 2021,May 7, 2024, the business day immediately preceding the annual meeting. You may also vote on the day of the meeting by attending the meeting and registering your vote through the virtual meeting platform.

To avoid delays in ballot taking and counting and in order to ensure that your proxy is voted in accordance with your wishes, we respectfully request that you give your full title when signing a proxy as attorney, executor, administrator, trustee, guardian, authorized officer of an entity, or on behalf of a minor. If shares are registered in the name of more than one shareholder of record, all shareholders of record must sign the proxy card.

What should I do if I have not received a notice of internet availability of proxy materials by mail?

If you are a beneficial owner of shares held in “street name”, you should contact your securities broker, bank or other nominee that holds your shares to request a copy of your notice and verify that they have your correct address in their records.

If you are a holder of record, contact OFG Bancorp Investor Relations 254 Muñoz Rivera Avenue, San Juan, PR 00918; E-mail: Gary Fishman at gfishman@ofgbancorp.comor Steven Anreder at sanreder@ofgbancorp.com; Telephone: (212) 532-3232.

How many votes do I have?

Each outstanding share of our common stock entitles its holder to cast one vote on each matter to be voted upon, except with respect to the election of directors in which you may cumulate your votes.

Pursuant to our articles of incorporation and by-laws, you have the right to cumulate your votes at annual meetings in which more than one director is being elected. Cumulative voting entitles you to a number of votes equal to the number of shares of common stock held by you multiplied by the number of directors to be elected. As a holder of our shares of common stock, you may cast all or any number of such votes for one nominee or distribute such votes among any two or more nominees as you desire. Thus, for example, for the election of the seven nominees being considered at this annual meeting, a shareholder owning 1,000 shares of our common stock is entitled to 7,000 votes and may distribute such votes equally among the nominees for election, cast them for the election of only one of such nominees, or otherwise distribute such votes as he or she desires.


If you return an executed proxy but do not expressly indicate that your votes should be cumulated in a particular fashion, the votes represented by your proxy will be distributed equally among the nominees designated by our Board of Directors or in such other fashion as will most likely ensure the election of all the nominees.

2

How does our Board of Directors recommend that I vote?

Our Board of Directors recommends that you vote “FOR” the election of each nominee to the Board, “FOR” the advisory vote related to the compensation of our executives, and “FOR” the ratification of our independent registered public accounting firm for 2021.

2024.

Each proxy also confers discretionary authority on our Board of Directors to vote the proxy with respect to: (i) the approval of the minutes of the last annual meeting of shareholders; (ii) the election of any person as director if any nominee is unable to serve or, for good cause, will not serve; (iii) matters incident to the conduct of the annual meeting; and (iv) such other matters as may properly come before the annual meeting. Except with respect to procedural matters incident to the conduct of the annual meeting, we are not aware of any business that may properly come before the meeting other than those matters described in this proxy statement. However, if any other matters should properly come before the annual meeting, it is intended that proxies solicited hereby will be voted with respect to those other matters as recommended by our Board of Directors or, if no recommendation is given, in accordance with the judgment of the proxy holders.

What constitutes a quorum at the annual meeting?

The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the record date will constitute a quorum, permitting us to hold the meeting. As of the record date, 51,548,69247,065,156 shares of our common stock were outstanding. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting for purposes of determining quorum. A “broker non-vote” occurs when a securities broker, bank or other nominee indicates on the proxy card that it does not have discretionary authority to vote on a particular matter. Votes cast by proxy will be counted by Broadridge Financial Solutions, Inc., an independent third party. We urge you to vote by proxy even if you plan to attend the meeting, so that we will know as soon as possible that enough votes will be present for us to hold the meeting.

Can I change my vote after I return my proxy card?

Yes. After you have submitted your proxy card, you may change your vote at any time before the proxy is exercised. To do so, just send in a new proxy card with a later date or cast a new vote by telephone or over the Internet, or send a written notice of revocation to the Secretary of our Board of Directors, P.O. Box 195115, San Juan, Puerto Rico 00919-5115, delivered before the proxy is exercised. If you attend the meeting and want to vote, you may request that your previously submitted proxy not be used. Attendance at the meeting will not by itself revoke a previously granted proxy.

What vote is required to approve each item and how are abstentions and broker non-votes treated?

Action with respect to the election of directors will be taken by a majority of the votes cast by shareholders represented by attendance or by proxy at the annual meeting and entitled to vote on the election of directors (which number will take into account the accumulation of votes described above). To be elected, each director nominee must receive more votes cast “FOR” such nominee’s election than votes cast “WITHOLD“WITHHOLD AUTHORITY” for such nominee’s election. Abstentions and broker non-votes will not be counted as either an affirmative vote or a negative vote regarding the election of directors and, therefore, will not have a legal effect on such election.

For the advisory vote on the compensation of our executives and the ratification of our independent registered public accounting firm for 2021,2024, the affirmative vote of the holders of a majority of the shares represented in person


or by proxy at the meeting and entitled to vote will be required for approval. Abstentions will have the same effect as a negative vote, and broker non-votes will not be counted in determining the number of shares necessary for approval.

What happens if I do not give specific voting instructions?

Holder of Record. If you are a holder of record and you sign and return a proxy card without giving specific instructions, then the proxy holders will vote your shares in the manner recommended by our Board of Directors and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the meeting.

3

Beneficial Owner of Shares Held in Street Name. If you are a beneficial owner of shares held in “street name” and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares will inform us that it does not have the authority to vote on such matter with respect to your shares (that is, a “broker non-vote”). Except for the ratification of our independent registered public accounting firm for 2021,2024, we believe that each of the proposals set forth in this proxy statement will be considered non-routine under the rules of the New York Stock Exchange (which apply to brokers), and therefore, there could be broker non-votes on such proposals.

What happens if the annual meeting is adjourned or postponed?

Your proxy will still be valid and may be voted at the adjourned or postponed meeting. You will still be able to change or revoke your proxy before it is exercised.

Proposal

What if I have difficulties accessing the annual meeting?
If you encounter any technical difficulties with the meeting website on the day of the meeting, please call the technical support number that will be available on the login page of the meeting website. Technical support will be available beginning at 8:45 a.m. (EST) on the day of the meeting and will remain available throughout the meeting.
Can I ask pertinent questions during the annual meeting?
You may submit questions during the meeting by logging into the meeting website at www.virtualshareholdermeeting.com/OFG2024 using your 16-digit control number and typing your question into the “Ask a Question” file and clicking “Submit.” Only questions pertinent to the business to be conducted at the annual meeting will be answered during the meeting, subject to time limitations.
If any pertinent questions cannot be answered during the meeting due to time constraints, we will post and answer a representative set of these questions online at www.ofgbancorp.com. The questions and answers will be available as soon as reasonably practicable after the meeting and will remain available for at least one week after posting.
How do I inspect the list of shareholders of record?
A list of shareholders of record as of March 11, 2024 will be available for inspection by shareholders during the annual meeting. You may access the list during the meeting by visiting www.virtualshareholdermeeting.com/OFG2024 and entering your 16-digit control number and clicking “View Shareholder List” on the meeting website.

4

PROPOSAL 1: Election of Directors

ELECTION OF DIRECTORS

Our Board of Directors consists of one class of nine directors elected annually until the end of their one-year term and until their successors are duly elected and qualified. Our Board currently has one vacancy and will have two vacancies after the end of Mr. Julian Inclán's current term effective the date of the annual meeting. Mr. Inclán is retiring from the Board of Directors after 15 years of service and as part of a second vacancyBoard approved succession plan pursuant to which Mr. José R. Fernández will be appointed Chairperson of the Board at the regularly scheduled Board meeting to be held after the annual meeting uponof shareholders. Mr. Fernández has served on our Board of Directors for 20 years and as Vice Chairperson for 14 years. As part of that succession plan, Mr. Néstor de Jesús will be appointed as the endLead Independent Director. Mr. Néstor de Jesús has served on the Board for 8 years and as Chairperson of the term of Mr. Juan Carlos Aguayo, who will not standBoard's Risk and Compliance Committee for reelection.  7 years.

Our bylaws provide that directors in uncontested elections will be elected by a majority of the votes cast by our shareholders, rather than a plurality of the votes cast. Our Director Resignation Policy requires that any director that does not receive the majority of votes cast by our shareholders in an uncontested election submit his or her resignation to our Board of Directors promptly after the certification of the voting results. Thereafter, our Board of Directors will have 90 days to evaluate the resignation, and if the resignation is not accepted, will disclose the reasons therefore to our shareholders.

There are no arrangements or understandings between us and any person pursuant to which such person has been elected as a director. No director is related to any of our directors or executive officers, by blood, marriage or adoption (excluding those that are more remote than first cousin).


Set forth below is certain information with respect to each nominee.


Julian S. Inclán

Dorado, PR

Director since 2008

Independent

Age: 73

Mr. Inclán is the CEO and Chairman of the Board of American Paper Corporation, a distributor of fine papers, office supplies and graphic art supplies, and whose subsidiary, Design Hub, is the agent for a mayor office contract furniture manufacturer and the importer and designer of customer home furniture units. He previously also served as President of American Paper Corporation from September 1994 to January 2013.  He is also the Managing Partner, President and Administrator of various real estate development and investment companies.  Mr. Inclán also serves as Chairperson of the Board of Directors of Oriental Bank.  He holds an M.B.A. from Columbia University.

Our Board of Directors recommended Mr. Inclán as a nominee, and our Board of Directors concluded that he should continue to serve as a director of the Company based on his extensive experience as a director of the Company and in managing his distribution and real estate businesses, which assist the Company in evaluating and overseeing diverse business opportunities.  Our Board of Directors also determined as required by our bylaws that due to the importance of Mr. Inclán’s independent leadership role, at this time, he should continue to serve after having attained the age of 71.

Board and Committees

Meeting

Attendance

Board (Chair)

5 of 5

100

%

Audit

11 of 12

92

%

Risk and Compliance

4 of 4

100

%

Corporate Governance and Nominating

3 of 3

100

%

Compensation

3 of 3

100

%

Stock Ownership Policy Compliance as of December 31, 2020:

Qualifying

Common Stock

 

Qualifying

Preferred Stock

 

Total Value

 

Multiple of

Compensation

 

Applicable

Minimum Multiple

Requirement

115,110

 

12,680

 

$2,451,139

 

17.89

 

4

*****


José R. Fernández

San Juan, PR

Director since 2005

Non-Independent

Age: 57

60

Mr. Fernández is the President, CEO and a Vice Chairperson of the Board of Directors of the Company and Oriental Bank. He is also the Chairperson of the Boards of Directors of all of our other subsidiaries, and the President of Oriental Insurance LLC and Oriental International Bank, Inc. During his 17-year20-year tenure as CEO, Mr. Fernández has successfully led the transformation of the CompanyOFG Bancorp into one of Puerto Rico’s leading banking and financial services companies. In addition, during that time, Mr. Fernández spearheaded three major acquisitions, Eurobank (2010), BBVA Puerto Rico (2012) and Scotiabank de Puerto Rico.  

In October 2020,Rico (2019). Since the acquisition of Scotiabank, Mr. Fernández became an NACD Board Leadership Fellow.  Hehas led the Company’s digital strategy which has resulted in the introduction of innovative customer-facing digital technology, providing unparalleled levels of convenience and value-added service. These improvements have yielded record years of loan production, earnings and stockholder returns. His outstanding track record recently earned him recognition as the 2023 Community Banker of the Year by the American Banker.


Mr. Fernández is also a member of the Business Advisory Council of the University of Notre Dame’s Mendoza Business School, the Advisory Board of the Puerto Rico Conservation Trust, and the Board of Trustees of the Hispanic Society Museum and Library. He also serves on the Board of Trustees of Sacred Heart University, Santurce, Puerto Rico.  From 2011 to 2016, he was appointed to the Community Depository Institutions Advisory Council established by the Federal Reserve Bank of New York. Mr. Fernández holds a B.S.bachelor’s degree from the University of Notre Dame and an M.B.A. from the Ross School of Business at the University of Michigan.


Our Corporate Governance and Nominating Committee recommended Mr. Fernández as a nominee, and our Board of Directors concluded that he should continue to serve as a director of the Company based on his extensive knowledge of our business, his 30 years of experience in the financial services industry, and his instrumental role in our continued success. As our CEO and Vice Chairperson, Mr. Fernández has consistently demonstrated an ability to exercise sound business judgment and prudent management skills. Furthermore, his active involvement in community and civic affairs represents an ethical character that we seek in our leaders and company culture.



Board and Committees

Meeting

Meeting

Attendance

Board (Vice Chair)

5 of 5

100

%

100%

5


Stock Ownership Policy Compliance as of December 31, 2020:

2023:

Qualifying

Common Stock

 

Qualifying

Preferred Stock

 

Total Value

 

Multiple of

Compensation

 

Applicable

Minimum Multiple

Requirement

636,180

 

5,560

 

$11,933,777

 

13.80

 

5


Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum Multiple
Requirement
544,400$20,404,10021.825

*****


Jorge Colón-Gerena

San Juan, PR

Director since 2014

Independent

Age: 54

57

Mr. Colón-Gerena is the President, CEO and principal shareholder of various restaurant franchise operations that have the exclusive rights in Puerto Rico to the Wendy’s, Applebee’s, Sizzler, Longhorn, Olive Garden and Red Lobster franchises. He also serves on the Boards of Directors of our primary bank subsidiary, Oriental Bank, and the Center for a New Economy, an economic policy think-tank. Mr. Colón-Gerena holds a bachelor’s degree in Arts & Sciences from the Interamerican University, San Juan, Puerto Rico, and has completed executive management courses at Northwestern University and Harvard Business School.


Our Corporate Governance and Nominating Committee recommended Mr. Colón-Gerena as a nominee, and our Board of Directors concluded that he should continue to serve as a director of the Company based on his extensive experience in retail food service franchises, which complements the diversity of experience of our Board.



Board and Committees

Meeting

Meeting

Attendance

Board

5 of 5

100 

100

%

Audit

8 of 989 %
Compensation (Chair)

3 of 3

100 

100

%


Stock Ownership Policy Compliance as of December 31, 2020:

2023:

Qualifying

Common Stock

 

Qualifying

Preferred Stock

 

Total Value

 

Multiple of

Compensation

 

Applicable

Minimum Multiple

Requirement

58,805

 

—

 

$1,090,245

 

16.27

 

4


Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum Multiple
Requirement
105,500$3,954,14054.924

*****


Néstor de Jesús

Guaynabo, PR

Director since 2016

Independent

Age: 68

72

Mr. de Jesús was an investment banker for 30 years and served as the Director of the Puerto Rico Office of Barclays Capital. He has also served on the Board of Directors and as Chair of the Audit Committee of the Government Development Bank for Puerto Rico. He is currently a member of the BoardsBoard of Directors of our principal bank subsidiary, Oriental Bank, serving as a member of the Board Credit Committee. Mr. de Jesús is also a member of the Boards of Directors of Rovira Biscuit Corporation and Rovira Foods Inc., and Academia Maria Reina Inc.Inc.. Mr. de Jesús holds a B.S.bachelor’s degree in Economics from the Wharton School of the University of Pennsylvania and an M.B.A. from the Ross School of Business at the University of Michigan.


Our Corporate Governance and Nominating Committee recommended Mr. de Jesús as a nominee, and our Board of Directors concluded that he should continue to be a director of the Company based on his prior investment banking experience, his experience as a director of a major Puerto Rico public instrumentality, and his extensive financial expertise, which make him highly qualified to fulfill his responsibilities as a director of the Company.

6


Board and Committees

Meeting

Meeting

Attendance

Board

5 of 5

100 

100

%

Corporate Governance and Nominating

(Vice-Chair)

3 of 3

100 

100

%

Risk and Compliance (Chair)

4 of 4

100 

100

%


Stock Ownership Policy Compliance as of December 31, 2020:

2023:

Qualifying

Common Stock

 

Qualifying

Preferred Stock

 

Total Value

 

Multiple

of Compensation

 

Applicable

Minimum Multiple

Requirement

22,890

 

—

 

$424,381

 

5.37

 

4


Qualifying
Common Stock		Total ValueMultiple
of Compensation		Applicable
Minimum Multiple
Requirement
23,390$876,65711.104
*****


Annette Franqui
Miami, FL
Independent
Age: 62
Annette Franqui is a Founding Partner, President and Chief Investment Officer of Forrestal Capital, a business and investment advisory firm formed in 2003 to service the original Latin American founding families of Panamerican Beverages (Panamco). Forrestal Capital invests primarily in direct private equity and venture capital transactions in diverse industries. Ms. Franqui is also a member of the Board of Directors of Arcos Dorados Holdings Inc. (NYSE:ARCO) and a member of its Compensation and Nomination Committee. Previously, she served as the Chief Financial Officer for Panamco and as a Managing Director at J.P. Morgan. Ms. Franqui served as Chairperson of the Board of Directors of AARP until June 2023 and had previously served as a Director and member of its Audit and Finance Committee since 2014.

Our Corporate Governance and Nominating Committees recommended Ms. Franqui as a nominee, and our Board of Directors concluded that she should serve as a director of the Company based on her abundant and diverse experience serving on boards of directors, which makes her highly qualified to serve on our Board.

Board and CommitteesMeetingAttendance

Board

5 of 5100 %
Compensation (Chair)3 of 3100 %
Corporate Governance and Nominating3 of 3100 %

Stock Ownership Policy Compliance as of December 31, 2023:

Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum Multiple
Requirement
600$22,4880.37—

*****
7

Susan Harnett

Denver, CO

Director since 2019

Independent

Age: 64

67

Ms. Harnett is a member of the Board’s Risk and Compliance Committee, Chair of the Nomination and Governance Committee and served on the Audit Committee until April 2021. She has been a senior advisor to digital startups and mentor at theNew York’s FinTech Innovation Lab sponsored by Partnership Fund for New York City and Accenture since 2015. She is also the cofounder of two startups, Juntos and EqualFuture Corp. and a founding limited partner in How Women Invest. Her board certifications include becoming a Certified Corporate Director by National Association of Corporate Directors Governance Fellow.(NACD) and a Certified Risk Director from the DCRO Institute. Ms. Harnett currently servesserved on the Board of Directors of Life Storage, Inc. (NYSE: LSI), before it was sold to Extra Space Storage Inc. (NYSE: EXR) in July 2023. She currently serves on the Board of Directors of Extra Space Storage Inc. and itsSphere 3D Corp. (NASDAQ: ANY), while holding key roles as a member of the Audit Committee and Risk Management andChair of the Compensation and Human Capital Committees.  From 2012-2015,Committee for the latter.

Her professional credentials include she was COO of North America for QBE Insurance Group Limited, oneLimited. The majority of the top insurersher career was spent at Citigroup in domestic, international and reinsurers worldwide, based in Sydney, Australia. From 2001-2012, she held four keyglobal roles. The last three positions at Citigroup:during her tenure with Citi included President of Local Consumer Lending (2011-2012), Head of Global Business Performance (2008-2011), CEO of Citibank Germany (2004-2007), and Head of Retail Banking/Deputy CEO of Citibank EMEA (2001-2004).
She served as an independent director and Audit Committee member of First Niagara Financial Group, a $40 billion in assets publicly traded bank, from 2015 until its acquisition by KeyCorp in 2016. During such service, Ms. Harnett participated in the strategic review that resulted in the $4.1 billion sale. She has also served on the Boards of QBE Insurance, CitiFinancial, and Visa Canada. She was Chair of Citi’s Management Board in Germany and of the Global Perspectives Advisory Group of Marquette UniversityUniversity’s College of Business. She holds a Bachelor's degree from Marquette University, an Executive Master of Business Administration degree from Northwestern University's Kellogg Graduate School of Management, and a Board Leadership Fellow from the National Association of Corporate Directors.

Our Corporate Governance and Nominating CommitteeCommittees recommended Ms. Harnett as a nominee, and our Board of Directors concluded that she should continue to serve as a director of the Company based on her significant experience leading domestic and international financial service organizations through periods of major transformation often involving the reengineering of operations, technology, data, products, services, and marketing, as well as M&A and integration, which make her highly qualified to serve on our Board.

Board and Committees

Meeting

Meeting

Attendance

Board

5 of 5

100

%

100%

Audit

Corporate Governance and Nominating (Chair)

3 of 3

2 of 2

100

%

100%

Risk and Compliance

(Vice Chair)

4 of 4

100

%

100%


Stock Ownership Policy Compliance as of December 31, 2020:

2023:

Qualifying

Common Stock

 

 

Qualifying

Preferred Stock

 

 

Total Value

 

 

Multiple of

Compensation

 

 

Applicable

Minimum Multiple

Requirement

 

 

1,000

 

 

 

—

 

 

 

18,540

 

 

 

0.28

 

 

 

1.33

 


*****


Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum Multiple
Requirement
5,500$206,1403.174.00

Pedro Morazzani, CPA, CVA, CFE, CGMA

Angel Vázquez
San Juan, PR

Director since 2006

April 2023

Independent

Age: 68

56

Mr. Morazzani is a partner of the accounting firm Zayas, Morazzani & Co. and a Certified Public Accountant, Certified Valuation Analyst, Certified Fraud Examiner and Chartered Global Management Accountant.  He is also

Angel Vázquez has been the President of Pan Pepin Inc. since January 2021. Before this, he served as the Puerto Rico ChapterPresident of B. Fernández & Hnos. Inc., starting in 2003. In addition to his corporate roles, Mr. Vázquez has been actively involved in the non-profit sector, serving on the Boards of Directors of the National AssociationFundación Biblioteca Rafael Hernández Colón and SER de Puerto Rico. He also held positions on the Board of Certified Valuation Analysts.  Previously, he wasTrustees of the DGI Investment Trust from 2021 to 2023 and on Oriental Bank's Trust Committee from 2011 to 2021. Mr. Vázquez completed his academic pursuits in finance, earning a Senior Manager at Peat, Marwick, Mitchell & Co. (presently known as KPMG LLP).  Mr. Morazzani holds a bachelor’s degree in Business AdministrationBBA from the University of Puerto Rico.

Texas, Arlington.


Our Corporate Governance and Nominating CommitteeCommittees recommended Mr. MorazzaniVázquez as a nominee, and our Board of Directors concluded that he should serve as a director of the Company based on his extensive experience in management and serving in diverse boards of directors, which makes him highly qualified to fulfill his responsibilities as a director of the Company.
8

Board and CommitteesMeetingAttendance
Board4 of 4100 %
Audit5 of 683 %
Risk and Compliance2 of 2100 %

Stock Ownership Policy Compliance as of December 31, 2023:
Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum
Multiple
Requirement
————


*****
Rafael Vélez
Dorado, PR
Director since October 2021
Independent
Age: 50
Rafael Vélez is the Founder and President of Atabey Capital (2016), a private equity advisement firm, and Campo Alegre (2016), a 500-acre pineapple farm in Puerto Rico. Previously from 2007 until 2019, he was the Founder and President of Putney Capital Management with offices in Santo Domingo, Dominican Republic and Puerto Rico, a non-discretionary advisor to an investment fund with investments in the energy, agroindustry and construction material sectors in the Caribbean and North of Latin American region. From 2004 to 2012, he was the founding partner of Barreto & Vélez, a CPA firm specialized in advising clients manage inherent risks through sound corporate governance practices. Mr. Vélez also serves as Board member of the Boys & Girls Club of Puerto Rico as well as YPO Puerto Rico and is a member of the Georgetown Latin American Policy Association.

Our Corporate Governance and Nominating Committees recommended Mr. Vélez as a nominee, and our Board of Directors concluded that he should continue to serve as a director of the Company based on his extensivevast accounting and financial expertise and his strong advocacy for corporate governance, ethics and fairness,investment experience, which make him highly qualified to serve on the Board and its Audit Committee.

Board and Committees

Meeting

Attendance

Board

5 of 5

100

%

Audit (Chair)

12 of 12

100

%

Stock Ownership Policy Compliance as of December 31, 2020:

Qualifying

Common Stock

 

Qualifying

Preferred Stock

 

Total Value

 

Multiple of

Compensation

 

Applicable

Minimum Multiple

Requirement

38,710

 

—

 

$717,683

 

9.58

 

4

*****


Edwin Pérez

San Juan, PR

Director since October 2018

Independent

Age: 67

Mr. Pérez is the owner and President of Puerto Rico Supplies Group, Inc., one of the largest consumer goods distributors in Puerto Rico, distributing leading brands of dairy foods, household goods, groceries, snacks, candy, health and beauty, prestige fragrances and tobacco products, among over 5,000 products.  He also serves on the Board of CODERI, a school for children with disabilities.  Prior to joining Puerto Rico Supplies, Mr. Pérez served as President of Supermercados Pueblo after having served as President and Partner of Supermercados Amigo.  From 1988 to 1992, he was the President of Con Agra in Puerto Rico after having served in various leadership positions with its subsidiaries, Molinos de Puerto Rico and To Ricos.  From 1981 to 1988, Mr. Pérez occupied various roles with increasing responsibilities until serving as Sales Director of R.J. Reynolds Tabacco Company.  He previously served on the Board of Directors of Scotiabank de Puerto Rico from 2014 to 2015 and as Chairman of the Food Bank and CODERI.  Mr. Pérez holds a business degree from the University of Puerto Rico and a Master’s in Labor Relations from Michigan State University.

Our Corporate Governance and Nominating Committee recommended Mr. Pérez as a nominee, and our Board of Directors concluded that he should continue to serve as a director of the Company based on his extraordinary accomplishments as an entrepreneur, which makemakes him highly qualified to fulfill his responsibilities as a director of the Company.


Board and Committees

Meeting

Meeting

Attendance

Board

5 of 5

100 

100

%

Compensation

Audit

4 of 4

3 of 3

100 

100

%

Stock Ownership Policy Compliance as of December 31, 2020:

Qualifying

Common Stock

 

 

Qualifying

Preferred Stock

 

 

Total Value

 

 

Multiple of

Compensation

 

 

Applicable

Minimum Multiple

Requirement

 

 

71,990

 

 

 

—

 

 

 

1,334,695

 

 

 

22.24

 

 

 

1.33

 


*****

Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum Multiple
Requirement
9,375$351,3754.881.33


If any person named as a nominee is unable or unwilling to stand for election at the time of the annual meeting, the proxy holders will nominate and vote for a replacement nominee or nominees recommended by our Board of Directors. At this time, the Board knows of no reason why any of the nominees listed above may not be able to serve as a director if elected.

Our Board of Directors recommends that you vote “FOR ALL” in this proposal.



Information with Respect

9

INFORMATION WITH RESPECT TO A DIRECTOR WHOSE TERM OF OFFICE WILL END AT THE ANNUAL MEETING AND CERTAIN EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

Mr. Julian S. Inclán will retire from the Board of Directors after 15 years of service and as part of a Board of Directors approved succession plan pursuant to Certain Executive Officers Who Are Not Directors

which Mr. José Rafael Fernández will be appointed Chairperson and Mr. Néstor de Jesús will be appointed lead independent director. There are no arrangements or understandings pursuant to which Mr. Inclán was selected as director of the Company. He is not related to any of our other directors or executive officers by blood, marriage or adoption (excluding those that are more remote than first cousin).


Julian S. Inclán Dorado, PR
Director since 2008 Independent
Age: 76

Mr. Inclán is the CEO and Chairman of the Board of American Paper Corporation, a distributor of fine papers, office supplies and graphic art supplies, and whose subsidiary, Design Hub, is the agent for a major office contract furniture manufacturer and the importer and designer of customer home furniture units. He previously also served as President of American Paper Corporation from September 1994 to January 2013. He is also the Managing Partner, President and Administrator of various real estate development and investment companies. Mr. Inclán also serves as Chairperson of the Board of Directors of Oriental Bank. He holds an M.B.A. from Columbia University.

The following information is provided with respect to the executive officers who do not serve on our Board of Directors. There are no arrangements or understandings pursuant to which any of the following executive officers was selected as an officer of the Company. No executive officer is related to any of our directors or executive officers, by blood, marriage or adoption (excluding those that are more remote than first cousin).


Ganesh Kumar

Maritza Arizmendi, CPA, Esq.
Chief OperatingFinancial Officer

San Juan, PR

Age: 56

55

Since 2017, Ms. Arizmendi has served as our Chief Financial Officer. She previously served as our Senior Vice President of Corporate Finance and Chief Accounting Officer. Previously at BBVAPR, she served in turn as Chief Financial Officer and Treasurer, Senior Vice President of Financial Planning, and Vice President of Risk Management. Prior to its acquisition by BBVAPR, Ms. Arizmendi was a Vice President of Loan Review at Poncebank. Her career began at PricewaterhouseCoopers LLP, where she attained the position of Senior Auditor. Ms. Arizmendi received her bachelor’s degree in accounting and her J.D. from the University of Puerto Rico. She is a Certified Public Accountant and is admitted to practice law in Puerto Rico.

Stock Ownership Policy Compliance as of December 31, 2023:
Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum
Multiple
Requirement
84,962$3,184,3768.093

*****


Ada García
Managing Director, Customer Intelligence and Operations
San Juan, PR
Age: 60

Ms. García was appointed our Managing Director of Customer Intelligence and Operations in March 2022 and is responsible for our retail banking operations, data integrity and analytics and executing our retail strategy of improving our client experience. Previously, she has served in turn as Director of Business Development and Director of our Mortgage Unit. At BBVAPR, prior to its acquisition by the Company, she served as Director of Mortgage Business, Business Development Manager, IT Manager and member of the BBVA Seguros Puerto Rico’s Board of Directors. Ms. Garcia has been Secretary of the Governor’s Board of the Mortgage Bankers Association and the Puerto Rico Notes Management Association. Her career began at Accenture, Spain, where she attained the position of System Analyst. She received her bachelor’s degree in Mathematics and computer science and her master’s degree in Science form the Technical University of Dresden, Germany.
10


Stock Ownership Policy Compliance as of December 31, 2023:
Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum
Multiple
Requirement
39,848$1,493,5035.043

*****

Hugh González, Esq.
General Counsel
San Juan, PR
Age: 44
Mr. González serves as our General Counsel since January 2021 and as Secretary of our Board of Directors since January 2024. As General Counsel, Mr. González supervises the legal department and serves as the chief compliance officer supervising the corporate compliance and BSA/AML compliance departments. He also serves as Secretary of the Boards of Directors of various subsidiaries, including Oriental Bank, Oriental Financial Services LLC, OFG Ventures and OFG USA LLC. Mr. González also serves a member of the Board of Directors of YMCA of San Juan, Inc. Previously, he served as our Deputy General Counsel and Assistant Secretary since 2012. Mr. González was an associate at McConnell Valdés LLC, where he was elected member prior to joining the Company in 2012. He received his bachelor’s degree in philosophy from Columbia College, Columbia University, and his J.D. from New York University School of Law.

Stock Ownership Policy Compliance as of December 31, 2023:
Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum
Multiple
Requirement
18,858$706,7982.481.67


*****

Patrick Haggarty.
Managing Director, Commercial Banking
San Juan, PR
Age: 64
Mr. Haggarty is the Managing Director of Commercial Banking and is responsible for Corporate & Institutional Banking, Transactional Services, International Trade Services and Trust Operations since 2012. From 2012 to November 2021, he also supervised Trust Sales and Oriental Pensions Consultants. Before 2012, Mr. Haggarty served in similar roles at BBVAPR. He also serves as board member and Treasurer of Colegio de Educación Especial & Rehabilitation, Inc., a Puerto Rico non-profit. He received a bachelor’s degree from Tufts University and an MBA from the IESE Business School of the University of Navarra.

Stock Ownership Policy Compliance as of December 31, 2023:
Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum
Multiple
Requirement
38,483$1,442,3416.163


*****
11

Ganesh Kumar
Chief Strategy Officer, U.S. Business
San Juan, PR
Age: 59
Mr. Kumar serves as our Chief Operating Officer.  He leads a consolidated retail business under one customer centric structureStrategy Officer for U.S. Business since 2023 overseeing our US loan portfolio and is responsible forstrategic initiatives in the Company’s strategic business development and expansion.  He also recently led the acquisition and integration of Scotiabank’s Puerto Rico and USVI businesses.  He is also responsible for developing and implementing the Company’s retail digital transformation strategy.continental United States. He is also a member of the Board of Directors of Oriental Bank since 2019. Previously, as Chief Operating Officer, he led Oriental Banks digital transformation efforts as well as the acquisition and integration of Scotiabank’s Puerto Rico and USVI businesses. Before 2017, Mr. Kumar served as Executive Vice President and Chief Financial Officer responsible for corporate finance, strategic planning, accounting and financial reporting, and business analytics. Previously, he served as our Chief Operating Officer and Chief Risk Officer. Before joining the Company in 2004, he was a director of consulting at Gartner Inc. (NYSE: IT), an industry leading research and advisory firm where he assisted a wide array of financial service companies develop technology-enabled strategies and operational plans to meet desired results. Prior to Gartner, he was a manager at McKesson Corporation (NYSE: MCK) from 1997 to 1999; a planning and technology architect at Intercontinental Hotels Group (NYSE: IHG) from 1995 to 1997; and a consultant to financial services clients worldwide from 1986 to 1995. Mr. Kumar holds a doctorate in management from Case Western Reserve University, Cleveland, OH, where he is currently a member of the Alumni Advisory Council.


Stock Ownership Policy Compliance as of December 31, 2020:

2023:

Qualifying

Common Stock

 

Qualifying

Preferred Stock

 

Total Value

 

Multiple of

Compensation

 

Applicable

Minimum

Multiple

Requirement

284,937

 

—

 

$5,282,732

 

7.55

 

3


Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum
Multiple
Requirement
220,055$8,247,66115.003

*****


Maritza Arizmendi

César A. Ortiz, CPA, Esq.

Chief FinancialRisk Officer

San Juan, PR

Age: 52

49

Since 2017, Ms. Arizmendi has

Mr. Ortiz was appointed Chief Risk Officer in May 2023 responsible for our enterprise risk management, information and physical security. Previously since March 2022, he served as Managing Director of Retail Channel Business Development responsible for growing our Chief Financial Officer.  She previously served as our Senior Vice President of Corporate Financeretail commercial and Chief Accounting Officer.  Previously at BBVAPR, sheconsumer loan portfolios. He has also served in turn as Chief Financial Officer and Treasurer, Senior Vice President of Financial Planning, and Vice President of Risk Management.  Prior to its acquisition by BBVAPR, Ms. Arizmendi was a Vice President of Loan Review at Poncebank. Her career began at PricewaterhouseCoopers LLP, where she attained the position of Senior Auditor. Ms. Arizmendi received her B.S. (Accounting) and Juris Doctor from the University of Puerto Rico. She is a Certified Public Accountant and is admitted to practice law in Puerto Rico.

Stock Ownership Policy Compliance as of December 31, 2020:

Qualifying

Common Stock

 

Qualifying

Preferred Stock

 

Total Value

 

Multiple of

Compensation

 

Applicable

Minimum

Multiple

Requirement

61,600

 

—

 

$1,142,064

 

3.05

 

3


*****

José E. Cabrera Lázaro,

CPA, Esq.

Chief Risk and Compliance Officer

San Juan, PR

Age: 50

Mr. Cabrera serves as our Chief Risk and Compliance Officer responsible for risk management, regulatory and BSA/AML compliance, and security since March 2020.  Mr. Cabrera joined the Company in 2020 as part of the acquisition of Scotiabank de Puerto Rico.  He previously served as the Chief Financial and Administrative Officer for Scotiabank de Puerto Rico.  Mr. Cabrera is a member of the Puerto Rico State Society of Certified Public Accountants. He received his Master of Business Administration in Finance from The University of Wisconsin – Madison and a Bachelor of Science in Business Administration from the University of Puerto Rico.  

Stock Ownership Policy Compliance as of December 31, 2020:

Qualifying

Common Stock

 

Qualifying

Preferred Stock

 

Total Value

 

Multiple of

Compensation

 

Applicable

Minimum

Multiple

Requirement

4,500

 

—

 

$83,430

 

0.43

 

0.50

*****

César A. Ortiz, CPA, Esq.

Director, Corporate Performance

San Juan, PR

Age: 46

Mr. Ortiz serves as our Director of Corporate Performance, Office since July 2020.  He is responsible for formalizing medium- and long-term operating leverage targets and ensuring the organization achieves them.  He most recently served as the directorDirector of Commercial Credit and Operations, overseeing commercial credit underwriting, administration and workouts since March 2018. Previously, he has served as our Chief Risk Officer, Chief Accounting Officer and Controller. Prior to joining the Company, he worked at Doral Financial Corporation as Chief Accounting Officer and Controller. He started his career in the financial services industry at PricewaterhouseCoopers, LLP where he attained the position of Senior Manager. Mr. Ortiz received his B.S. (Business Administration)bachelor’s degree in business administration from the University of Puerto Rico, his M.B.A. from the MIT Sloan School of Management, and his Juris DoctorJ.D. from the Interamerican University.


Stock Ownership Policy Compliance as of December 31, 2020:

2023:

Qualifying

Common Stock

 

Qualifying

Preferred Stock

 

Total Value

 

Multiple of

Compensation

 

Applicable

Minimum

Multiple

Requirement

37,029

 

2,850

 

$757,768

 

2.94

 

2


Qualifying
Common Stock		Total ValueMultiple of
Compensation		Applicable
Minimum
Multiple
Requirement
21,011$787,4912.333

*****



Security

12

Mari Evelyn Rodríguez
Chief Retail Banking Officer
San Juan, PR
Age: 53
Ms. Rodríguez, Chief Retail Banking Officer since 2023, focuses on growing the small business, residential mortgage, and auto loan portfolios. Previously, Ms. Rodríguez was CEO of Marsh McLennan's Puerto Rico Office from 2017 to 2023, where she drove significant growth and managed the Hurricane Maria response. Earlier, she served as Senior Vice President at another Puerto Rico financial institution from 2013 to 2016 and held various roles at Oriental, including Senior Vice President of Commercial Banking from 2008 to 2013. Her early career included positions at Verizon Wireless, Banco Popular, and Advent-Morro Capital Partners. Ms. Rodríguez also contributes to non-profits, serving as Vice President on the Board of Coalición Legal para Puerto Rico and on the Board of Colegio Puertorriqueño de Niñas. She earned her B.A. from Harvard University and an MBA from the University of Michigan's Ross School of Business.

Stock Ownership Policy Compliance as of Certain Beneficial Owners and Management

December 31, 2023:


Qualifying
Common Stock		Total Value
Multiple of
Compensation
Applicable
Minimum
Multiple
Requirement
16,109$603,7762.16—

*****

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to our shares of common stock beneficially owned by persons, including any “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), known to us to be beneficial owners of more than 5% of the outstanding shares. The information is based exclusively upon filings made by such persons or entities pursuant to the Exchange Act.

Name and Address of

Beneficial Owner

 

Sole

Voting

Power

 

 

Shared

Voting

Power

 

 

Sole

Dispositive

Power

 

 

Shared

Dispositive

Power

 

 

Aggregate

Amount of

Shares

Beneficially

Owned

 

 

Percent of

Class1

 

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

 

 

7,446,922

 

 

 

0

 

 

 

7,519,551

 

 

 

0

 

 

 

7,519,551

 

 

 

14.6

%

The Vanguard Group

100 Vanguard Blvd.

Malvern, PA 19355

 

 

0

 

 

 

50,882

 

 

 

5,634,050

 

 

 

93,505

 

 

 

5,727,555

 

 

 

11.15

%

Dimensional Fund Advisors LP

Building One

6300 Bee Cave Road

Austin, TX 78746

 

 

3,922,445

 

 

 

0

 

 

 

4,072,565

 

 

 

0

 

 

 

4,072,565

 

 

 

7.90

%

Barrow, Hanley, Mewhinney & Strauss, LLC

2200 Ross Avenue, 31st Floor

Dallas, TX 75201-2761

 

 

2,578,684

 

 

 

1,119,830

 

 

 

3,698,514

 

 

 

0

 

 

 

3,698,514

 

 

 

7.20

%


Name and Address of
Beneficial Owner		Sole
Voting
Power		Shared
Voting
Power		Sole
Dispositive
Power		Shared
Dispositive
Power		Aggregate
Amount of
Shares
Beneficially
Owned
Percent of Class1
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055		6,775,077—6,864,061—6,864,06114.6 %
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355		—38,4265,762,32980,6915,843,02012.4 %
Dimensional Fund Advisors LP
Building One
6300 Bee Cave Road
Austin, TX 78746		3,656,588—3,656,588—3,656,5887.8 %

1.

Beneficial owners of greater than 10% reported such holdings on Schedule 13G filed under Rule 13d-1(b), which is available only to shareholders that acquired such securities in the ordinary course of their business and not with the purpose nor with the effect of changing or influencing the control of the issuer, nor in connection with or as a participant in any transaction having such purpose or effect.



1.Beneficial owners of greater than 10% reported such holdings on Schedule 13G filed under Rule 13d-1(b), which is available only to shareholders that acquired such securities in the ordinary course of their business and not with the purpose nor with the effect of changing or influencing the control of the issuer, nor in connection with or as a participant in any transaction having such purpose or effect.

13

The following tables settable sets forth information as to the number of our shares of common stock and serial preferred stock beneficially owned as of December 31, 2020,2023, by (i) our directors; (ii) our named executive officers for 20202023 (collectively, the “Named Executive Officers” or “NEOs”); and (iii) our directors and executive officers, including the NEOs, as a group. The information is based upon filings made by such individuals pursuant to the Exchange Act, and information furnished by each of them.

Name of Beneficial Owner

 

Amount and Nature of Beneficial

Ownership of Common Stock (#)

 

 

 

Percent of

Common Stock1

 

Directors

 

 

 

 

 

 

 

 

 

Julian S. Inclán

 

 

153,787

 

2

 

 

—

 

José Rafael Fernández

 

 

535,451

 

3

 

 

—

 

Juan C. Aguayo

 

 

35,472

 

4

 

 

—

 

Jorge Colón-Gerena

 

 

126,685

 

4

 

 

—

 

Néstor de Jesús

 

 

19,900

 

4

 

 

—

 

Susan Harnett

 

 

—

 

 

 

 

—

 

Pedro Morazzani

 

 

35,420

 

4

 

 

—

 

Edwin Pérez

 

 

70,000

 

 

 

 

—

 

Named Executive Officers

 

 

 

 

 

 

 

 

 

José R. Fernández

 

 

535,451

 

3

 

 

1.04

%

Ganesh Kumar

 

 

221,564

 

5

 

 

—

 

Maritza Arizmendi

 

 

41,488

 

6

 

 

—

 

José Cabrera

 

 

—

 

 

 

 

—

 

César Ortiz

 

 

29,180

 

7

 

 

—

 

Directors and Executive Officers

   as a Group8

 

 

1,268,946

 

 

 

 

2.47

%


Name of Beneficial OwnerAmount and Nature of Beneficial
Ownership of Common Stock (#)
Percent of Common Stock1
Directors
Julian S. Inclán119,6172—%
José Rafael Fernández455,7583—%
Jorge Colón-Gerena102,3004—%
Néstor de Jesús20,1904—%
Annette Franqui——%
Susan Harnett3,3004—%
Angel Vázquez——%
Rafael Vélez7,275—%
Named Executive Officers
José R. Fernández455,7583—%
Maritza Arizmendi61,5535—%
Ada García31,4646—%
Ganesh Kumar159,6217—%
Mari Evelyn Rodríguez——%
Directors and Executive Officers as a Group8
1,015,2962.16%

1.

Unless otherwise indicated, each of the persons named in the table beneficially holds less than 1% of the outstanding shares of common stock.  This percentage is calculated on the basis of the 51,387,071 shares of common stock outstanding as of December 31, 2020.


1.    Unless otherwise indicated, each of the persons named in the table beneficially holds less than 1% of the outstanding shares of common stock. This percentage is calculated on the basis of the 47,065,156 shares of common stock outstanding as of December 31, 2023.
2.    This amount includes 10,107 shares as to which Mr. Inclán has shared investment and voting power and 3,400 restricted units whose restricted period will lapse within 60 days.
3.    This amount includes 23,150 restricted units whose restricted period will lapse within 60 days, 28,850 performance shares whose restricted period will lapse within 60 days, 13,370 shares that he owns through our 401(k)/1081.01(d) Plan, and 7,000 shares owned by his wife.
4.    These amounts include the following restricted units whose restricted period will lapse within 60 days: Mr. Colón Gerena – 2,300; Mr. De Jesús – 2,300; and Ms. Harnett – 2,300.
5.    This amount includes 5,717 restricted units whose restricted period will lapse within 60 days, and 7,300 performance shares whose restricted period will lapse within 60 days.
6.    This amount includes 1,800 restricted units whose restricted period will lapse within 60 days and 1,700 performance shares whose restricted period will lapse within 60 days.
7.    This amount includes 14,934 restricted units whose restricted period will lapse within 60 days, 19,450 performance shares whose restricted period will lapse within 60 days, and 227 shares that he owns through our 401(k)/1081.01(d) Plan.
8. The group consists of 16 persons including all directors, Named Executive Officers, and executive officers who are not directors.

2.

This amount includes 32,377 shares as to which he has shared investment and voting power and 3,800 restricted units whose restricted period will lapse within 60 days.


3.

This amount includes 180,400 shares that he may acquire upon the exercise of stock options that are exercisable or that will become exercisable within 60 days, 57,819 restricted units whose restricted period will lapse within 60 days, 7,058 shares that he owns through our 401(k)/1081.01(d) Plan, 45,152 shares that he owns through his deferred compensation trust account, and 7,000 shares owned by his wife.

4.

These amounts include the following restricted units whose restricted period will lapse within 60 days: Mr. Aguayo - 1,900, Mr. Colón Gerena – 1,800, Mr. de Jesús – 1,700, and Mr. Morazzani – 2,400.

5.

This amount includes 101,000 shares that he may acquire upon the exercise of stock options that are exercisable or that will become exercisable within 60 days, 30,709 restricted units whose restricted period will lapse within 60 days, 17,567 shares that he owns through our 401(k)/1081.01(d) Plan, and 10,000 shares that he owns through his deferred compensation trust account.

6.

This amount includes 12,000 shares that she may acquire upon the exercise of stock options that are exercisable or that will become exercisable within 60 days and 15,069 restricted units whose restricted period will lapse within 60 days.

7.

This amount includes 6,000 shares that he may acquire upon the exercise of stock options that are exercisable or that will become exercisable within 60 days, 3,556 restricted units whose restricted period will lapse within 60 days and 17,680 shares that he owns through our 401(k)/1081.01(d) Plan.

8.

The group consists of 12 persons including all directors, Named Executive Officers, and executive officers who are not directors.

Name of Beneficial Owner

Amount and Nature of Beneficial

Ownership of Series B Preferred

Stock (#)

Percent of Series B

Preferred Stock1

Directors and Named Executive Officers

César Ortiz

2,850

2

—

Directors and Executive Officers as a

   Group3

2,850

—

1.

Unless otherwise indicated, each of the persons named in the table beneficially holds less than 1% of the outstanding shares of such preferred stock.

2.

This amount represents shares that he owns through his deferred compensation trust account.

3.

The group consists of 12 persons including all directors, Named Executive Officers, and executive officers who are not directors.


Name of Beneficial Owner

 

Amount and Nature of Beneficial

Ownership of Series D Preferred

Stock (#)

 

 

Percent of Series D

Preferred Stock1

 

Directors and Named Executive Officers

 

 

 

 

 

 

 

 

Julian S. Inclán

 

 

12,680

 

 

 

1.32

%

José R. Fernández

 

 

5,560

 

 

 

—

 

Directors and Executive Officers as a

   Group2

 

 

18,240

 

 

 

1.90

%

1.

Unless otherwise indicated, each of the persons named in the table beneficially holds less than 1% of the outstanding shares of such preferred stock.

2.

The group consists of 12 persons including all directors, Named Executive Officers, and executive officers who are not directors.

For purposes of the foregoing tables,table, beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which shares are deemed to be beneficially owned by a person if he or she directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote or direct the voting of the shares, and/or the power to dispose or direct the disposition of the shares, whether or not he or she has any economic interest therein. Unless otherwise indicated in the foregoing tables,table, the named beneficial owner has sole voting and investment power with respect to the shares, subject, in the case of those directors and officers who are married, to the marital community property laws of Puerto Rico. Under Rule 13d-3, a person is deemed to have beneficial ownership of any shares of common stock which he or she has a right to acquire within 60 days, including, without limitation, pursuant to the exercise of any option, warrant or right. Shares of common stock which are subject to such options or other rights of acquisition are deemed to be outstanding for the purpose of computing the percentage of outstanding common stock owned by such person but are not deemed outstanding for the purpose of computing the percentage of common stock owned by any other person.



Board Independence, Leadership Structure and Risk Oversight

14

BOARD INDEPENDENCE, LEADERSHIP STRUCTURE AND RISK OVERSIGHT
Except for José Rafael Fernández, who is our President and CEO, all of our directors are “independent” pursuant to the corporate governance listing standards adopted by the New York Stock Exchange (“NYSE”) for listed companies.

Our Board of Directors has adopted standards and definitions to assist it in the evaluation of the independence of its members. The standards and definitions adopted by the Board describe various types of relationships that could potentially exist between a director and the Company and sets thresholds at which such relationships would be deemed to be material. If no relationship or transaction exists that would disqualify a director from being independent under such standards and definitions, and no other relationships or transactions exist of a type not specifically mentioned therein that in the Board’s opinion, taking into account all facts and circumstances, would impair a director’s ability to exercise his or her independent judgment, the Board will deem such director to be independent. Such standards and definitions are available on our website at www.ofgbancorp.com.

Our Board of Directors has nine positions and only one who is a non-independent member, the CEO. At present, the roles of Chairperson and CEO are split. The position of Chairperson is held by Mr. Inclán, an independent director since 2008, and the position of CEO is held by Mr. Fernández, a director and CEO since 2004.

Pursuant to our bylaws, and as part of its review of corporate governance and succession planning, our Board of Directors, led by the Corporate Governance and Nominating Committee, conducts an annual self-evaluation and determines the most effective board leadership structure for the Company. Our Board of Directors also recognizes that different structures may be appropriate for the Company at different times. In this regard, the Board chooses whether to keep the roles of CEO and Chairperson separate or whether to have one person serve in both capacities. At this time,The Board believes that both of these arrangements can yield strong benefits to the Company as long as an independent director is appointed to a leadership role in the Board, haswhich could be in the role of a Chairperson or of a lead independent director. Previously, the Board had decided that the most appropriate structure for the Company is to have a corporate leadership structure that splits the roles of the Chairperson of the Board and the CEO. The position of Board Chairperson is held by Mr. Inclán, an independent director, whereas the position of CEO is held by Mr. Fernández, who also serves as Vice Chairperson of the Board.

However, as part of a Board approved succession plan, Mr. Inclán will retire from the Board of Directors and as Chairperson at the annual meeting of shareholders, and the Board has determined that Mr. Fernández, our CEO, should serve as the Chairperson of the Board and Mr. Néstor de Jesús should serve as the lead independent director.

To align the interests of our directors and top executives with our shareholders, the Board adopted the Officers and Directors Stock Ownership Policy. Pursuant to such policy, our directors are required to hold common and preferred stock of the Company with a total value that is not less than four times their annual cash compensation within a period of 3 years of their first equity award.

Our Board of Directors, its Audit Committee, Compensation Committee, Risk and Compliance Committee, Corporate Governance and Nominating Committee, the Bank’s Credit Committee and Trust Committee, and management’s Asset and Liability Management Team (the “ALT”), Credit Risk Team, Risk and Compliance Team, Consumer Compliance Team and various credit committeesteams are actively involved in overseeing the management of the risks involved in our business and operations. However, the Board ultimately determines the level of risk that is acceptable for the Company within general guidelines and regulatory requirements. The Board considers that effective risk management is a fundamental part of good management practice and is committed to maintaining sound risk management systems. To this end, the Board is responsible for adopting several risk policies and reviewing the effectiveness of our risk management program. In order to appropriately discharge their risk oversight functions, the Board and its committees have access to senior management and the right to consult with and retain independent legal and other advisors at our expense pursuant to our Corporate Governance Principles and Guidelines. In addition, Board members are required to complete periodic training courses relating to banking regulations and cybersecurity, which includes 5 course hours of topics related to financial institutions and their governance. The Board, the Audit Committee and the Risk and Compliance Committee also regularly meet with and receive written reports from senior management, including our Chief Risk andOfficer, Chief Compliance Officerand Internal Audit Department, who evaluate significant risk exposures and contribute to our risk management and internal control system. The Compensation Committee assists the Board in ensuring that our compensation program encourages decision-making that is in the best long-term interest of the Company and its shareholders and does not encourage excessive or inappropriate risk-taking. Moreover, the ALT has responsibility for overseeing the management of our assets and liabilities to balance our risk exposures. Its principal objective is to enhance profitability while maintaining appropriate levels of liquidity and interest rate risks. The Credit Committee of the
15

Bank’s Board and management’s Credit Risk CommitteeTeam and various credit committeesteams have responsibility for setting and implementing strategies to achieve our credit risk goals and objectives in accordance with the credit policy approved by our Board of Directors. The management Risk and Compliance Team has responsibility for overseeing the implementation of our risk management program. In sum, all such committees assist and report to


the Board in connection with the monitoring and oversight of certain risks and/or the implementation of the policies and objectives adopted by the Board.

Board Meetings

BOARD MEETINGS
Our Board of Directors held 5 meetings in 2020.2023. No incumbent director attended fewer than 75% of the aggregate of the total number of Board meetings and the total number of meetings of Board committees in which he served in that year. Board members are required to attend our annual meeting of shareholders. All Board members then in office attended last year’s annual meeting of shareholders.

Executive Meetings of Non-Management Directors

EXECUTIVE MEETINGS OF NON-MANAGEMENT DIRECTORS
Our Board of Directors holds regular meetings of “non-management directors” (that is, directors who are not executive officers of the Company) to promote open discussions and better communication among such directors. Julian S. Inclán, the Chairperson of the Board, has been chosen to preside at such meetings.

Board Committees

BOARD COMMITTEES
Our Board of Directors has a standing Audit Committee, Risk and Compliance Committee, Compensation Committee and Corporate Governance and Nominating Committee.

The Audit Committee assists our Board of Directors in its oversight of our financial reporting process and meets without management’s presence. It fulfills its oversight responsibilities by reviewing: (a) the integrity of the financial reports and other financial information provided by us to any governmental or regulatory body or to the public; and (b) our auditing, accounting, and financial reporting processes generally. The members of this committee are Pedro Morazzani,Rafael Vélez, Chairperson, Jorge Colón-Gerena, Vice Chairperson, Julian S. Inclán Vice Chairperson, and Susan Harnett.  Ms. Harnett was appointed to the Audit Committee on November 10, 2020.Angel Vázquez. Our Board of Directors has determined that each member of this committee is financially literate or has accounting or related financial management expertise, and that Pedro MorazzaniRafael Vélez is an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of U.S. Securities and Exchange Commission (“SEC”) Regulation S-K. It met 129 times in 2020.

2023.

The Audit Committee operates pursuant to a written charter that has been approved by our Board of Directors, a current copy of which is available on our website at www.ofgbancorp.com. All of its members are independent directors as required by the NYSE and the SEC.

The Risk and Compliance Committee assists our Board of Directors in its oversight of our internal controls, enterprise risk management, and legal and regulatory compliance. It fulfills its oversight responsibilities by reviewing our systems of internal controls regarding finance, accounting, legal and regulatory compliance, and ethics that management and our Board of Directors have established. The members of this committee are Néstor de Jesús, Chairperson, Susan Harnett, Vice Chairperson, Julian S. Inclán Vice Chairperson, and Susan Harnett.Angel Vázquez. It met 4 times in 2020.

2023

The Risk and Compliance Committee operates pursuant to a written charter that has been approved by our Board of Directors, a current copy of which is available on our website at www.ofgbancorp.com. All of its members are independent directors.

The Compensation Committee discharges the responsibilities of our Board of Directors relating to compensation of our directors and executive officers. Its general responsibilities are: (a) reviewing and approving corporate goals and objectives relevant to the compensation of the CEO; (b) evaluating the CEO’s performance in light of those goals and objectives; (c) making recommendations to our Board of Directors with respect to CEO compensation, and approving director compensation; (d) producing a committee report on executive compensation; (e) succession planning; and (f) conducting an annual performance evaluation of itself. This committee also administers our equity-based compensation plan and is given absolute discretion to, among other things, construe and interpret the plan; to prescribe, amend and rescind rules and regulations relating to the plan; to select the persons to whom plan awards will be given; to determine the number of shares subject to each plan award; and to determine


the terms and conditions to which each plan award is subject. The members of this committee are Jorge Colón-Gerena, Chairperson, Edwin Pérez,Julian S. Inclán, Vice Chairperson, and Julian S. Inclán.Annette Franqui. It met 3 times in 2020.

2023.

16

The Compensation Committee operates pursuant to a written charter that has been approved by our Board of Directors, a current copy of which is available on our website at www.ofgbancorp.com. All of its members are independent directors as required by the NYSE.

The Corporate Governance and Nominating Committee assists our Board of Directors by: (a) identifying individuals qualified to become directors consistent with criteria approved by the Board; (b) selecting or recommending that the Board select the director nominees for the next annual meeting of shareholders; (c)c) developing and recommending to the Board a set of corporate governance principles applicable to us that are consistent with sound corporate governance practices and in compliance with applicable legal, regulatory, or other requirements; (d) monitoring and reviewing any other corporate governance matters which the Board may refer to this committee; and (e) performing an annual evaluation of the Board, Board committees and each of the directors individually. The members of this committee are Juan Carlos Aguayo,Susan Harnett, Chairperson, Néstor de Jesús, Vice Chairperson, and Julian S. Inclán.n and Annette Franqui. It met 3 times in 2020.

2023.

The Corporate Governance and Nominating Committee operates pursuant to a written charter that has been approved by our Board of Directors, a current copy of which is available on our website at www.ofgbancorp.com. All of its members are independent directors as required by the NYSE.

Pursuant to our by-laws, no nominations for directors, except those made by our Board of Directors upon the recommendation of the Corporate Governance and Nominating Committee, will be voted upon at the annual meeting unless other nominations by shareholders are made in writing, together with certain information about the nominating shareholder and the nominee, including the nominee’s qualifications for service and his or her written consent to serve on our Board of Directors if elected, and delivered to the Secretary of the Board at least 120 days prior to the anniversary date of the mailing of proxy materials in connection with last year’s annual meeting. Ballots bearing the names of all of the persons nominated by our Board of Directors and by shareholders, if properly made, will be provided for use at the annual meeting. The Corporate Governance and Nominating Committee has not established any specific, minimum qualifications that it believes must be met by a nominee recommended by such committee for a position on our Board of Directors. The Committee instead considers general factors, including, without limitation, the candidate’s experience with other businesses and organizations, the interplay of such experience with the experience of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any of its committees.

Board Diversity

17

BOARD DIVERSITY
The Corporate Governance and Nominating Committee generally identifies qualified candidates based on recommendations made by existing directors, management, or independent consultants. There are no differences in the manner in which the committee evaluates nominees for director based on whether the nominee is recommended by a shareholder. The committee will consider potential nominees by management, shareholders or other members of the Board, and develop and evaluate information from a variety of sources regarding the potential nominee before making a decision.

Pursuant to its charter, the Corporate Governance and Nominating Committee considers diversity, among other factors such as competencies, experience, age and other appropriate qualities, to determine which candidates it recommends to our Board of Directors for approval as nominees. The committee focuses mainly on achieving a balance of experience on the Board that represents a cross-section of the local community, including directors with experience in the public and private sectors, experience in the medical, legal and accounting professions, and experience in a variety of industries relevant to our business needs.


Our Board currently has one woman director and seven men directors who are of Hispanic ethnicity.  Our Board will have two vacancies asThe following graphs provide a visual representation of the annual meeting.tenure, race, ethnicity, age, independence and gender of the nominees to our Board. Our Corporate Governance and Nominating Committee is in the process of identifying candidates for the two vacancies that will exist after the annual meeting of shareholders and consistent with its appointment in 2019is committed to maintaining a minimum of two women directors on our Board. Our Corporate Governance and Nominating Committee is committed to selectingin the process of identifying candidates for a vacancy and nominated for election at the 2023 annual meeting a second highly qualified woman directorto meet its commitment to maintain a minimum of two women directors to serve on our Board.

NomineeStats.jpg
ENVIRONMENTAL, SOCIAL AND GOVERNANCE PROGRAM

Our Company’s Environmental, Social and Governance (“ESG”) Program was established in 2020 with the adoption by the Board of Directors of our ESG Policy. Our ESG Policy establishes as the Company’s policy to continuously strive to be socially and environmentally sustainable and to have effective governance practices that protect our key stakeholders – our clients, employees, shareholders and the communities we serve. It establishes the Company’s human rights and environmental impact policy. Our human rights policy requires the Company to respect the human rights of all individuals and to not do business with any company that engages in human rights violations. Our environmental impact policy recognizes the impact of greenhouse gases on global warming. As such, our policy is to strive to become carbon neutral, decrease consumption of natural resources, promote the use of recyclable and biodegradable materials, and avoid any developments that have an adverse effect on high biodiversity environments. In addition, we will continuously evaluate our credit underwriting practices to consider what environmental practices we may incentivize as may be appropriate given our size, complexity and market and consistent with our business strategy.

Pursuant to the ESG Policy, our General Counsel will establish and implement an ESG Program under the supervision of the CEO for monitoring and reporting our Company’s performance along established ESG metrics. Our ESG Program is overseen by our Board of Directors. In addition, the ESG Program will establish long term ESG goals that complement and support our business strategy. Our ESG Policy requires that we prepare and publish an annual ESG report to our stakeholders. Initially, the Company has adopted the commercial banking, mortgage finance and consumer finance standards of the Sustainability Accounting Standards Board as our framework for disclosing our ESG performance to our various stakeholders.
18

In 2022, we completed a materiality assessment to establish ESG priorities based on the feedback of our various stakeholders. We also published our third consecutive ESG report based primarily on the metrics established for our principal industries by the Sustainability Accounting Standards Board.
More information related to our ESG Program and our Company’s published ESG reports are available in the ESG page on our website at www.ofgbancorp.com.

Corporate Governance Principles and Guidelines


CORPORATE GOVERNANCE PRINCIPLES AND GUIDELINES
We have adopted a set of Corporate Governance Principles and Guidelines to promote the functioning of our Board of Directors and its committees, to protect and enhance shareholder value, and to set forth a common set of expectations as to how the Board, its various committees, individual directors and management should perform their functions. We have also adopted a Code of Business Conduct and Ethics that reaffirms our basic policies of business conduct and ethics for our directors, officers, employees and agents. It consists of basic and general standards of business as well as personal conduct. The Corporate Governance Principles and Guidelines and the Code of Business Conduct and Ethics are available on our website at www.ofgbancorp.com.

Any shareholder who desires to contact our Board of Directors or any of its members may do so by writing to: Chairperson of the Board, OFG Bancorp, P.O. Box 195145, San Juan, Puerto Rico 00919-5145. Alternatively, any interested party, including, without limitation, shareholders and employees, may communicate directly with the independent members of the Board or report possible legal or ethical violations, including, without limitation, concerns regarding questionable accounting or auditing matters. Any such interested party may directsubmit his or her written communication or report, anonymously, tothrough OFG Bancorp’s whistleblower hotline, Ethics Point, online at https://secure.ethicspoint.com/domain/media/en/gui/20510/index.html or by calling toll-free within the Chairperson of the Audit Committee.  The mailing, postage prepaid, should be marked “confidential”United States, Guam, Puerto Rico and addressed as follows:

Chairperson of Audit Committee

or

Chairperson of Audit Committee

OFG Bancorp

OFG Bancorp

P.O. Box 195145

Oriental Center

San Juan, Puerto Rico 00919-5145

254 Muñoz Rivera Avenue, 15th Floor

San Juan, Puerto Rico 00918

Canada, +1-888-366-6023.


Proposal


PROPOSAL 2: Advisory Vote on Executive Compensation

ADVISORY VOTE ON EXECUTIVE COMPENSATION

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), we are required to have a separate non-binding shareholder vote to approve the compensation of our Named Executive Officers at least once every three years. This is commonly known as a “say-on-pay” vote. At the annual meeting of shareholders held in 2017,2023, a majority of our shareholders voted in favor of holding the say-on-pay vote every year. As previously disclosed, the Company has decided to hold such vote every year until the next shareholder advisory vote on the frequency of future advisory votes on executive compensation.

We have in place a comprehensive executive compensation program under the oversight of the Compensation Committee of our Board of Directors. Our program is described under the heading “Compensation Discussion and Analysis” and in the tabular and narrative disclosures related to Named Executive Officers in this proxy statement. The Compensation Committee continually monitors the program as well as general economic, regulatory and legislative developments affecting executive compensation.

Our executive compensation program is intended to reward achievements of Company performance objectives aligned with our strategic plan and the creation of shareholder value. We seek to attract and retain the most talented and effective executive team for the Company by providing an appropriate mix of fixed versus variable compensation while emphasizing pay-for-performance in accordance with our short and long-term goals. We will continue to pursue compensation arrangements that are intended to align the financial interests of our executives with the long-term interests of our shareholders.

This proposal gives you the opportunity to vote for or against, or abstain from voting on, the following resolution related to the compensation of our Named Executive Officers:

RESOLVED, that the compensation paid to the Company’s named executive officers disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.

Since your vote is advisory, it is not binding on the Company or our Board of Directors and will not be construed as overruling any of our executive compensation decisions. However, our Board of Directors and its Compensation Committee may take into account the voting results when considering future compensation arrangements.

Our Board of Directors recommends that you vote “FOR” this proposal.


19

Compensation Discussion and Analysis


COMPENSATION DISCUSSION AND ANALYSIS
Overview

Our executive compensation program aims to promote our long-term success, to attract and retain qualified and talented leaders and motivate them to accomplish our financial goals. To this end, our executive compensation program considers our corporate results in light of our competitive position and goals, and also each executive’s individual performance, commitment and achievements.

This Compensation Discussion and Analysis explains our executive compensation program for our Named Executive Officers (“NEOs”) listed below. It also describes how compensation decisions are made and the reasons for specific decisions made in 2020.

2023.

Name

Title

José R. Fernández

President, CEO and Vice Chairperson of the Board

Ganesh Kumar

Chief OperatingStrategy Officer,

U.S. Business

Maritza Arizmendi

Chief Financial Officer

José Cabrera

César Ortiz

Chief Risk and Compliance Officer

César Ortiz

Mari Evelyn Rodríguez

Director of Corporate Performance

Chief Retail Banking Officer

Executive Summary

2020

2023 Business and Financial Highlights. In 2020,2023, we continued to execute on our strategy of distinguishing Oriental Bank as a leader in quality of service among Puerto Rico banks. These led to record industry leading results for OFG Bancorp in 2023. Below are some highlights of the Company’s financial and operational performance for 2020:

Integrated the acquired Scotiabank operations successfully in Puerto Rico and the U.S. Virgin Islands, accomplishing significant cost savings by the fourth quarter of 2020.

2023:

Accelerated our client’s adoption of digital channels to continue providing a high quality of service without taking unnecessary risks during the Covid-19 pandemic.

Implemented an easy to use fully online Paycheck Protection Program.

•Increased diluted EPS to $1.32$3.83 from $0.92$3.44 in 2019, notwithstanding $39.9 million in Covid-19 related provision for credit losses and $5.8 million in Covid-19 mitigation related expenses.

2022.

•Increased total core revenues to $519.3$682.7 million from $396.2$607.8 million in 2019.

2022.

•Increased new loan production at $2.5 billion compared to $1.7 billion from $1.3$2.3 billion in 2019.

2022 with commercial loan balances exceeding $3 billion for the first time.

•Increased tangible book value to $16.97$23.13 per common share an increasefrom $19.56 in 2022.

•Increased total common stock dividends paid over the year to $0.88 per share from $0.70 in 2022.
•Repurchased $18.7 million in common stock pursuant to a $100 million stock repurchase program.
•Expanded digital-first solutions to provide customers with easy-to-use, 24/7, self-service capabilities.
•Continued optimizing our network of $1.01 from 2019.

branches, self-service kiosks and intelligent and automated teller machines to better serve our clients wherever they may be.
Our outstanding results in 2023 demonstrated our ability to deliver consistent market leading results after having achieved in 2022 total revenues and return on average assets above the 90th percentile relative to our proxy peers and led them in net interest margin.

2020 Compensation Highlights.  The Compensation Committee took a number


In recognition of actions in lighthis leadership and our consistent delivery of outstanding financial performance, our CEO was recognized as the 2023 Community Banker of the Company’s significant growth resulting from the acquisition of Scotiabank’s operations in Puerto Rico and the U.S. Virgin Islands and in response to the Covid-19 pandemic.

Year by American Banker.

Based on a revised peer group reflecting the Company’s asset growth, the2023 Compensation Committee approved increases to the base salaries ofHighlights. Given our CEO, COO and CFO.  However, our CEO elected to forego the increase to his base salary given considering the uncertain environment created by the Covid-19 pandemic.  Our COO’s base salary received a pay adjustment from $484,500 to $700,000 to recognize his significant and unique leadership role with the Company, which is broader than the traditional role of a COO and includes the development and implementation of the Bank’s retail digital strategy, and his successful tenure at the Company during which he has led various successful acquisitions, most recently the Scotiabank acquisition.  Our CFO’s base salary was increased to align her base compensation with our market peers.


The Compensation Committee revised its methodology for determining the cash bonus plan for 2020.  The Compensation Committee determined that no amounts would be paid with respect to any goal that is not achieved at target, and that there will be no maximum payout with respect to any goal to the extent that the Company exceeds the target.  In addition, the business unit scorecard was eliminated and substituted with a performance goal relevant to the executive’s business unit or role, whereby the level of contribution to overall revenues or the achievement of cost control targets would serve to increase or decrease the payout based on the Company’s performance scorecard.  Targeted annual incentive opportunities remained at their current levelsstrong shareholder support for our CEO and CFO.  Our COO’s target cash bonus was decreased from 90% to 80%executive compensation program last year, there were no significant changes in the design of his base salary to better reflect market practices.

The Compensation Committee continues to focus our compensation program on performance-based incentives that better alignor the compensation of our NEOs’ interests with creating long-term shareholder value and the achievement of strategic and operational goals.  The target long term incentive opportunities for our CEO, COO and CFO were adjusted upwards to align more closely with peers.  The long-term incentive program, continues to grant 50% of the award value in the form of performance shares, with vesting contingent on achieving tangible book value goals over a three-year performance cycle.  The remaining award value is granted in the form of restricted units, vesting over a three-period to promote share ownership and executive retention.

executives.

In September 2020, our Compensation Committee awarded a one-time performance share award to incentivize the accomplishment of important operational and financial goals related to the Scotiabank acquisition.  This award is intended to keep our management focused on the achievement of the expected benefits of the Scotiabank acquisition through significant cost savings.

Summary of Executive Compensation Practices. Our executive compensation program includes the following practices and policies, which we believe promote sound compensation governance and are in the best interests of our shareholders and NEOs.

20

WHAT WE DO

WHAT WE DON’T DO

✓

Performance based variable compensation

☒

NO short-selling, hedging or pledging of

✓

Benchmarking against a relevant peer group

Company securities

✓

Independent external compensation consultant

☒

NO supplemental executive retirement plans

✓

Clawback of variable cash and equity

☒

NO severance benefits exceeding 3x base salary

compensation for malfeasance

and annual cash bonus

✓

Annual risk assessment of compensation program

☒

NO excise tax gross-ups

✓

Double-trigger vesting for all outstanding equity

☒

NO repricing, buyout or exchange of underwater

awards in connection with change in control

stock options

✓

Stock ownership requirements

☒

NO guaranteed bonuses

✓

Annual say on pay vote

☒

NO uncapped incentives

☒

NO excessive perquisites

☒

NO equity compensation plans with evergreen

provisions

2020

2023 Advisory Vote on Executive Compensation. At the 20202023 annual meeting of shareholders, our executive compensation program received the support of 82%98% of our shareholders. We believe that our executive compensation program is designed to support the Company and our business strategies in concert with our compensation philosophies and objectives.


What Guides Our Program

Compensation Philosophy and Objectives. The philosophy of our executive compensation program is to provide competitive compensation that rewards achievement of our strategic objectives supporting the creation of shareholder value. Accordingly, the main objectives of our program are to:

•Align the interests of our executives with our shareholders;

•Reward short and long-term financial performance by the Company;

•Reward superior individual performance;

•Attract and retain seasoned executives; and

•Ensure proper governance practices.

Our philosophy is to align the interests of our executives with our shareholders by promoting ownership of our Company’s common stock through equity awards and minimum stock ownership requirements. Furthermore, a significant component of our compensation program for our NEOs, is incentive (variable) compensation that is primarily tied to financial, operational and strategic results over both short and long-term performance periods.

We are cognizant of our competitive environment for superior executive talent and seek to maintain a compensation strategy that is competitive in the financial services industry in Puerto Rico and the United States.

Elements of Compensation. We have established three primary elements for our executive compensation program: base salary, annual cash bonus awards and long-term equity-based compensation. These elements are reviewed to ensure an appropriate mix of fixed versus variable compensation and focus on both short and long-term business performance.

Base salary is designed to be competitive with comparable executive positions and considers the complexity and unique challenges of each executive’s position, individual skills, experience, background and performance.

Annual cash bonus awards are based on a balanced scorecard that takes into consideration the accomplishment of Company-wide performance goals and, for certain executives, their business unit’s performance and individual performance evaluation.

Long-term incentives are granted to our executives in the form of performance-based and time-based awards to foster ownership of the Company’s common stock, link our executives’ compensation to shareholder value and support our leadership retention objectives.


21


Compensation Mix.Mix. The charts below show the target total direct compensation of Mr. Fernández, our CEO, Mr. Kumar, our COO and second highest ranking officer, and the average of our other NEOs for 2020.2023. These charts illustrate that a significant portion of such compensation is variable and performance-based.

 

2018 CEO COMPENSATION MIX Restricted Units 16% Performance Shares 16% Annual Cash Bonus 29% Base Salary 39% 2018 COO COMPENSATION MIX Restricted Units 12% Performance Shares 12% Annual Cash Bonus 38% Base Salary 38%

2018 NEOS (OTHER THAN CEO AND COO) COMPENSATION MIX Restricted Units 10% Performance Shares 10% Annual Cash Bonus 22% Base Salary 58%


CompMix2.jpg
Determination of Compensation Decisions

The Company’s Compensation Committee, senior management and independent compensation consultant play key roles in making compensation decisions with respect to our executives.

The Role of the Compensation Committee. The Compensation Committee of our Board of Directors plays a key role in the development and oversight of our compensation program. It consists entirely of independent directors and operates under a written charter approved by our Board of Directors, which is publicly available at www.ofgbancorp.com. The Compensation Committee recommends for approval by the Board of Directors the employment agreement that governs the compensation of our CEO Mr. Fernández, approves the corporate scorecard used to determine all or a significant portion of the annual cash bonus for our NEOs, and grants equity awards to all executives under our long-term incentive plan. As appropriate, it looks to our senior management and independent compensation consultants for support in its work. While the Compensation Committee values input and advice from these and other sources, it exercises its independent judgment in reaching its decisions.

The Compensation Committee approves base salary increases and the incentive compensation of the CEO. His compensation level is guided by the terms of his 2018 Employment Agreement, as amended.Agreement. The Compensation Committee may increase his salary after the first year, and his target performance bonus under our annual bonus plan and his target long-term incentive are based on a percentage of his base salary established by the Compensation Committee.


In conducting its annual evaluation of the CEO’s performance, the Compensation Committee considers the CEO’s contributions to the overall performance of the Company, including his individual performance. It also reviews our key operating results along with the accomplishment of our key strategic initiatives and considers the standard of living in San Juan, Puerto Rico, where our main offices are located. As part of this process, the Compensation Committee reviews all relevant information or data, including the results of our CEO’s performance scorecard and compensation levels for chief executive officers at peer group companies and the operating environment in which the Company does business. Furthermore, the Chairpersons of our Board of Directors and Compensation Committee meet periodically with our CEO to discuss his performance. The progress results of these meetings are reported to our Board of Directors. The CEO does not participate in any decision regarding his compensation.

Our Compensation Committee also considers other relevant factors in making compensation decisions or recommendations for our CEO, including salary data for comparable positions at peer group companies in Puerto Rico and the U.S., and compensation levels at the Company.

22

Determining Goals. The Compensation Committee is responsible for establishing both short and long-term goals that guide both our cash bonus award and the level of achievement of performance shares. For the Compensation Committee to perform its goal-setting functions, the following process is followed.

Prior to the beginning of the year, the Board reviews and approves the Company’s strategic plan, and senior executives and department or division heads meet and discuss the Company’s strategic plan and the goals for the Company in the upcoming year that will form part of the Company scorecard. At the beginning of the year, the Board reviews and approves an annual budget for the Company on a consolidated basis and separately for its banking subsidiary. The Compensation Committee then reviews and assesses performance goals presented by management and determines the structure of the annual goals for the Company scorecard that determines the payout of all or a significant portion of annual bonus awards and the goals over a three-year goalsperformance cycle for determining the payout of performance shares.  These

For certain executives, the Company scorecard determines the payout of their annual bonus awards, whereas for others, the Company scorecard is multiplied by the business unit performance goal adjustment to determine 90% of the cash bonus, and the remaining 10% of their cash bonus is based on individual performance evaluations. In the case of one executive, half of his bonus is based on the Company scorecard and the other half is based on his business unit scorecard.

Performance share goals include minimum performance thresholds that must be met to earn any award, as well as performance levels required to achieve maximum payouts. Performance goals for the business units that impact the annual cash bonus are established by the CEO with the support of the Finance and Human Resources Departments.

In 2020, this process was delayed as a result of several extraordinary events, namely the earthquakes that significantly affected the island of Puerto Rico throughout the month of January and the implementation of one of the strictest government lockdowns in the United States to combat the Covid-19 pandemic.  As a result of these significant events, management developed a revised budget, and the Compensation Committee refocused its goals for the year to ensure the accomplishment of key goals considering the significant uncertainty caused by the Covid-19 pandemic and the need to decrease expenses to realize the benefits of the Scotiabank acquisition.

The level of achievement of such goals that form part of the Company scorecard plays an essential role in the determination of the annual cash bonus awards. On a quarterly basis, senior management and our Board of Directors review our actual financial performance against the goals set for the year. In addition, our Board of Directors receives quarterly reports detailing our actual financial performance compared to these goals. Such reports are discussed in the corresponding Board meetings.

Each annual cash bonus performance goal is assigned a weight and requires a threshold level of accomplishment of 100% for any payout in connection with such goal.  Performanceweight. For 2021, performance goals dodid not have a minimum or maximum level of achievement. Executives must achieve a minimum rating on their individual performance evaluations to be eligible for any annual cash bonus. Each target bonus is expressed as a percentage of the executive’s base salary.

The Role of Senior Management. Our CEO, with the assistance of our Human Resources Director and an independent compensation consultant, establishes the base salary and target cash bonus award of all other executives of the Company and recommends to our Compensation Committee equity awards for other executives.


In making compensation decisions, our CEO, with the assistance of our Human Resources Director, considers several factors, such as the scope, complexity and degree of challenge of each executive’s responsibilities, as well as his or her performance, skills, experience and succession potential. In the past, he has also considered in making decisions, among other information, industry compensation and benefits studies prepared by an independent compensation consultant.

On a quarterly basis, our Finance Department assesses the progress of the goals set for the year and, at the end of the year, evaluate their results. These assessments are reviewed by the CEO who together with our Director of Human Resources and such executive’s direct supervisor undertakes an evaluation of each executive’s performance based, in part, on objective measures set forth in the performance scorecard. The CEO considers the financial performance of the Company, the performance of each department or division, and the individual performance of each executive relative to the goals set for the year and evaluates the compensatory recommendations provided by our Human Resources Director. In the interest of fairness, he may also take into consideration subjective or non-formulaic factors.

The Role of the Compensation Consultant Benchmarking and the Peer Group. Our Compensation Committee engaged Pearl Meyer, an independent compensation consultant, to review the Company’s compensation practices with respect to our NEOs relative to our peers and develop recommendations that align better with our shareholders’ expectations for our compensation program in 2020.2023. As part of this process, they updated the peer group of financial institutions for the Company and prepared a comparison of the compensation of Mr. Fernández, Mr. Kumar and Ms. Arizmendiour NEOs with persons in comparable positions at peer financial institutions. Our consultant also developed recommendations for the Compensation Committee’s consideration based on their findings.

23

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 has raised any conflicts of interest, taking into consideration the following factors, among others: (i) the provision of other services to the Company by Pearl Meyer; (ii) the amount of fees from the Company paid to Pearl Meyer as a percentage of their respective total revenues; (iii) Pearl Meyer’sMeyer’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Pearl Meyer or the individual compensation advisors employed by Pearl Meyer with an executive officer of the Company; (v) any business or personal relationship of the individual compensation advisors with any member of the Compensation Committee; and (vi) any stock of the Company owned by Pearl Meyer or the individual compensation advisors employed by Pearl Meyer. The Compensation Committee has determined, based on its analysis of the above factors, among others, 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 conflicts of interest.

The Role of Peer Market Data

The peer group was proposed for the Company by Pearl Meyer and approved by our Compensation Committee. Establishing a peer group for the Company is particularly challenging given that the Puerto Rico financial services market is significantly different from the United States and the economy does not generally move in tandem with the economy in the United States. For over 10Although Puerto Rico has recently shown signs of an economic recovery, for most of the past 19 years, Puerto Rico has been suffering through a prolonged recession and government fiscal crisis while the United States has seen economic growth and a fiscally stable government. Moreover, during such period the financial services market in Puerto Rico has undergone a dramatic consolidation resulting in only three publicly traded financial services companies that operate in Puerto Rico, one of which is significantly larger than the Company and therefore not an appropriate peer.  Moreover, thepeer due to its significantly larger size. The significant exodus of people from the island of Puerto Rico during these crises has also significantly limited the pool of available talent. Our peer group was selected considering the total asset size of the companies and the regional markets in which they operate relative to the asset size and regional markets of OFG Bancorp after the acquisition of Scotiabank’s Puerto Rico and USVI operations.  Given the increase in size from the acquisition, the Company


excluded banks with assets below $6 billion and increased the representation of banks with greater than $10 billion in assets.Bancorp. The peer group for our compensation decisions in 2020 consisted of the following companies:


Amerant Bancorp Inc.First Commonwealth Financial CorporationServisFirst Bancshares, Inc.
BancFirst CorporationFirst Financial BanksharesTowneBank
Customers Bancorp, Inc.Independent Bank Group, Inc.Trustmark Corporation
Eagle Bancorp, Inc.Renasant CorporationUnivest Financial Corporation
FB Financial CorporationS&T Bancorp, Inc.Veritex Holdings, Inc.
First Bancorp (North Carolina)Sandy Spring BancorpWesBanco, Inc.
First BanCorp (Puerto Rico)

Ameris Bancorp

Seacoast Banking Corporation of Florida

Eagle Bancorp, Inc.

First Financial Bankshares

First Commonwealth Financial Corporation

ServisFirst Bancshares, Inc.

S&T Bancorp, Inc.

Independent Bank Group, Inc.

Trustmark Corporation

Renasant Corporation

United Community Banks, Inc.

WesBanco, Inc.

Sandy Spring Bancorp

Customers Bancorp, Inc.

TowneBank

Amerant Bancorp Inc.

LegacyTexas Financial Group, Inc.

BancFirst Corporation

Analysis of Compensation Decisions

Base Salary. AfterThe base salaries of Ms. Arizmendi and Mr. Ortiz were increased in 2023 to better align their compensation with their peers. Mr. Kumar's base salary decreased to reflect his new role as Chief Strategy Officer, U.S. Business.

Name2022 Base Salary ($)2023 Base Salary ($)Adjustment (%)
José R. Fernández935,000935,000— %
Ganesh Kumar700,000550,000(21.4)%
Maritza Arizmendi400,000440,00010.0 %
César Ortiz274,000295,9208.0 %
Mari Evelyn Rodríguez—350,000— %

Annual Cash Bonus. In 2023, the cash bonus target of Mr. Fernández was increased as a reviewpercentage of our peer grouphis base salary in connection with the assistanceextension of Pearl Meyer, our Compensation Committee increased the base salary ofhis Employment Agreement described below. Mr. Fernández.  Notwithstanding this increase, Mr. Fernández decided to forego the base salary increase in 2020 given the significant uncertainties surrounding the Covid-19 pandemic.

Mr. Kumar’s base salary was adjusted to take into consideration his long track record of success with the Company, his unique role with the Company, and the significantly more challenging operating environment of the Company relative to its peers.  Given each of the foregoing, the Company determined that Mr. Kumar’s compensation should be above the 75th percentile relative to peer COOs and also the second highest ranking officers at peer companies.  Mr. Kumar supervises our bank’s retail segment that represents 72% of the bank’s loan portfolio and 82% of the bank’s deposits.  He also serves as a technology strategist employing his extensive background in technology consulting to lead the development and implementation of our retail digital strategy.  Mr. Kumar has been an integral part of our executive team for more than 15 years playing leadership roles in the integration of the acquired Banco Bilbao Vizcaya Argentaria Puerto Rico and the acquisition and integration of Scotibank’s Puerto Rico and US Virgin Islands businesses.  Moreover, his retention is key to the Company’s succession plan.  After six years without a meaningful increase, Mr. Kumar’s was given a one-time base salary adjustment from $484,500 to $700,000.  His base salary adjustment also served to increase the minimum stock ownership required in the Company by more than $600,000 to $2.1 million.

The base salary for Ms. Arizmendi received a market adjustment to align her compensation to market-based levels, reflecting the shift in the Company’s peer group due to the Scotiabank acquisition. Factors including current and future strategic contributions and individual performance was also considered.  Mr. Cabrera joined the Company as a result of the Scotiabank acquisition.

Name

 

2019 Base Salary

 

2020 Base Salary

 

Adjustment (%)

José R. Fernández

 

$865,000

 

$865,000

 

0.0%

Ganesh Kumar

 

$484,500

 

$700,000

 

44.5%

Maritza Arizmendi

 

$307,000

 

$375,000

 

22.1%

José Cabrera

 

-

 

$193,239

 

-

César Ortiz

 

$257,550

 

$257,550

 

0.0%

Annual Cash Bonus.  After evaluating our annualKumar's cash bonus targetstarget was decreased to those of our peer companies,better align his compensation with his new role.

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The table below shows the bonus opportunities at target-level performance for 2022 and 2023.

2022 Target Bonus2023 Target Bonus
Name%Amount ($)%Amount ($)
José R. Fernández90 %841,500 100 %935,000 
Ganesh Kumar80 %560,000 70 %385,000 
Maritza Arizmendi70 %280,000 70 %308,000 
César Ortiz40 %112,800 40 %118,368 
Mari Evelyn Rodríguez—— 50 %175,000 

The Compensation Committee decided to maintain the cash bonus targets of our NEOs, with the exception of Mr. Kumar.  The cash bonus opportunity for Mr. Kumar decreased from 90% to 80% to align with market practices.


In order to retain high quality talent from the Scotiabank acquisition, the Company agreed to pay Mr. Cabrera and other key Scotiabank executives a cash bonus for performance in 2020 of 75% of their 2019 cash bonus or the cash bonus under the Company’s cash bonus program, whichever was greater. The table below shows the 2020 bonus opportunities at target-level performance for 2020.

 

 

2019 Target Bonus

 

2020 Target Bonus

 

Name

 

%

 

Amount ($)

 

%

 

Amount ($)

 

José R. Fernández

 

90

 

778,500

 

90

 

778,500

 

Ganesh Kumar

 

90

 

436,050

 

80

 

560,000

 

Maritza Arizmendi

 

60

 

184,200

 

60

 

225,000

 

José Cabrera

 

-

 

-

 

30

 

60,972

 

César Ortiz

 

30

 

77,265

 

30

 

77,265

 

The table below presents the weightings assigned to our Company-wide performance scorecard and an individual performance evaluation.  The table also presents the adjustment to the corporate scorecard based on the performance of the corresponding business unit.

Name

 

Corporate Scorecard

 

Corporate Scorecard Performance Goal Adjustment

 

Individual Performance Evaluation

José R. Fernández

 

100%

 

-

 

0%

Ganesh Kumar

 

100%

 

-

 

0%

Maritza Arizmendi

 

100%

 

-

 

0%

José Cabrera

 

90%

 

106.33%

 

10%

César Ortiz

 

90%

 

100.00%

 

10%

Given the importance of the Scotiabank acquisition and the uncertainty of economic conditions during 2020 due to the Covid-19 pandemic, the Compensation Committee decided to change the existing scorecard metrics, which are tied to financial criteria that address protecting and growing franchise value in a safe and sound manner. The Compensation Committee established performance metrics based on four key business goals, growth, agility, resiliency, and operating leverage:

•Growth -- Achieve a– Grow our market share operating income, of 15.11%,

•Agility -- Increase the number of customers per employee to 229

digital adoption by customer,

•Resiliency -- Decrease the Texas Ratio, to below 32.00%

and

•Operating leverage -- Decrease the efficiency ratio below 65.50%.  

ratio.

The table below presents our 20202023 Company-wide performance goals, including the weight of each goal, the results of each goal and the percent of achievement of the target amount.  For 2020, the Compensation Committee established that no credit would be assigned if the goal was not achieved 100%, and that there would be no maximum payout with respect to any particular metric.

Performance Measure

 

Weight

 

Target

 

Results

 

% of Target

 

Score

Market Share Operating Income

 

15

 

15.11%

 

15.42%

 

102.08%

 

15.31

Customers per Employee

 

25

 

229

 

205

 

94.66%

 

0.00

Texas Ratio

 

25

 

32.00%

 

31.42%

 

101.85%

 

25.46

Efficiency Ratio

 

35

 

65.50%

 

59.45%

 

110.18%

 

38.56

Total

 

 

 

 

 

 

 

 

 

79.34


Performance MeasureWeight% of TargetScore
Market Share Operating Income35105.54 %36.94
Customer and Digital Adoption20195.67 %39.13
Texas Ratio15133.47 %20.02
Efficiency Ratio30103.34 %31.00
Total127.09

To determine each NEO’sthe bonus payout for our CEO, Mr. Fernández, and our CFO, Ms. Arizmendi, the target bonus opportunity is multiplied by the result of the corporate scorecard. For Mr. Cabrera and Mr. Ortiz,the other executives, it is also multiplied by the business unit performance goal adjustment to determine 90% of their cash bonus, withand the remaining 10% of their cash bonus is based on their individual performance evaluation. The performance goal adjustment forFor Mr. Cabrera and Mr. Ortiz was calculated by dividing the Company’sKumar, half of his target non-interest expense and provisionbonus opportunity is multiplied by the actual non-interest expense and provision.  Our Internal Audit Department verifies the accuracyresult of the results.

corporate scorecard, and the other half is multiplied by the result of the scorecard for the U.S. Loan Program. The table below shows the cash bonuses of the NEOs for their performance in 2020.

2023.

Name

 

Target

Bonus %

 

 

Performance

Score1

 

 

Performance

Bonus ($)1

 

 

Other

Bonus ($)1

 

José R. Fernández

 

 

90

%

 

 

79.34

 

 

 

617,700

 

 

 

—

 

Ganesh Kumar

 

 

80

%

 

 

79.34

 

 

 

444,400

 

 

 

—

 

Maritza Arizmendi

 

 

60

%

 

 

79.34

 

 

 

178,600

 

 

 

—

 

José Cabrera2

 

 

30

%

 

 

85.92

 

 

 

57,972

 

 

 

—

 

César Ortiz

 

 

30

%

 

 

85.92

 

 

 

65,200

 

 

 

—

 


1.

For purposes of this table, the performance score was rounded to the nearest hundredth and the performance bonus is rounded up to the next hundred dollars.  No other or special cash bonuses were earned or paid in 2020 to the NEOs.

NameTarget
Bonus %
Performance
Score1
Performance
Bonus ($)1
Other
Bonus ($)1
José R. Fernández100 %127.091,188,300—
Ganesh Kumar70 %121.00465,900—
Maritza Arizmendi70 %127.09391,500—
César Ortiz40 %143.49167,700—
Mari Evelyn Rodríguez50 %141.32244,500—

2.

Mr. Cabrera received 75% of his 2019 bonus as part of a program to retain key talent from the Scotiabank acquisition.

1.    For purposes of this table, the performance score was rounded to the nearest hundredth and the performance bonus is rounded up to the next hundred dollars. The performance score for Mr. Ortiz and Ms. Rodríguez reflects the results of their business unit performance goal adjustment but not their individual performance evaluation. No discretionary or special cash bonuses were earned or paid in 2023 to the NEOs.
Long-Term Incentive Compensation Our long-term incentive compensation is designed to ensure that executives have a continuing stake in our success and to encourage executives to focus on performance goals that
25

will enhance the value of our franchise and capital stock. Such incentives are also designed to retain key executives, reward risk management, and link executive performance to the creation of franchise and shareholder value.

NEOs receive 50% of long-term incentive value is granted in the form of performance shares, where vesting is contingent on meeting tangible book value and average return on tangible common equity goals over a three-year performance cycle. The remaining 50% of a long-term incentive value is granted in the form of restricted units with a third of the restricted units vesting annually on a three-year vesting schedule. We believe that this framework reflects peer group market-practicesmarket practices and that it strengthens the link between executive performance and shareholder value.

The value of the equity awards granted to our Mr. Fernández Mr. Kumar and Ms. Arizmendi are based on a percentage of his base salary. The value of the equity awards granted to our other NEOs is also based on a percentage of their base salaries, but also takes into account the recommendations of our CEO.


In 2020, the Board of Directors approved, upon the recommendation of the Compensation Committee, an increase to Mr. Fernández’s target long term incentive value from 100% to 120% of his base salary.  The Compensation Committee also approved an increase to Mr. Kumar’s target long term incentive value from 80% to 100% of his base salary and to Ms. Arizmendi’s target long term incentives value from 60% to 70% of her base salary.  In 2021,2024, the Compensation Committee approved equity awards to the NEOs for their performance in 20202023 as follows:

 

 

Performance Shares

 

Restricted Units

 

 

 

% of Base

 

% Target of Base

Name

 

Target Value ($)

 

Target Amount

 

Value ($)

 

Amount

 

Total Value ($)

 

Salary

 

Salary

José R. Fernández

 

519,300

 

28,850

 

519,300

 

28,850

 

1,038,600

 

120%

 

120%

Ganesh Kumar

 

350,100

 

19,450

 

350,100

 

19,450

 

700,200

 

100%

 

100%

Maritza Arizmendi

 

131,400

 

7,300

 

147,241

 

7,300

 

278,641

 

74%

 

70%

José Cabrera

 

63,000

 

3,500

 

63,000

 

3,500

 

126,000

 

65%

 

26%

César Ortiz

 

63,000

 

3,500

 

63,000

 

3,500

 

126,000

 

49%

 

26%


Performance

Performance SharesRestricted Units% of Base Salary% Target of Base Salary
NameTarget Value ($)Target AmountValue ($)AmountTotal Value ($)
José R. FernándezFernandez Martinez562,226 2007 OPIP Performance Shares15,450 562,226 2007 OPIP Restricted15,450 1,124,451 120 %120 %
Ganesh KumarKumar192,867 2007 OPIP Performance Shares5,300 192,867 2007 OPIP Restricted5,300 385,734 70 %70 %
Maritza ArizmendiArizmendi Diaz154,658 2007 OPIP Performance Shares4,250 154,658 2007 OPIP Restricted4,250 309,315 70 %70 %
César OrtizOrtiz Marcano78,239 2007 OPIP Performance Shares2,150 78,239 2007 OPIP Restricted2,150 156,477 53 %50 %
Mari E. Rodríguez78,239 2,150 78,239 2,150 156,477 50 %50 %

Half of the performance shares vest based on the achievement of growth in the Company’s tangible book value over a three-year performance cycle ending on December 31, 2023.  In determining an2026. The other half vest based on the Company’s average return on average tangible common equity over that same period. The Compensation Committee decided to continue its practice from prior years of tying the vesting of the performance shares to two metrics, consistent with market practice among the Company’s peers. When it first determined the appropriate metric,metrics, the Compensation Committee, with the assistance of theour independent compensation consultant, evaluated various metrics, such as tangible book value, earnings per share, return on equity, return on assets and total shareholder return, and determined that tangible book value best aligned our executive’s interests with our long-term shareholders given that our shares generally trade at a premium or discount toreturn. The Compensation Committee selected tangible book value and not as a multiple of earnings.average return on average tangible common equity. As such, our Compensation Committee determined that tangible book value wasthese performance metrics were the best performance metric to align our executive’s interest with our long-term shareholders.

Performance goals were established considering the Company’s three-year strategic plan. The tangible book value of the Company as of December 31, 20202023 was $16.97$23.13 and the target tangible book value for December 31, 20232026 is $21.95.$30.37. The results of the tangible book value performance metric are adjusted to account for changes to tangible book value caused by distributions to shareholders and other extraordinary events, such as increases or decreases to the regular quarterly common dividend, the adoption and execution of stock repurchase programs, and mergers and acquisitions.

For each of the two metrics, executives will begin receiving 50% of the performance shares as common stock of the Company for reaching the threshold level of achievement for the metric in question and will receive up to 100% for reaching the target level of achievement and up to 150% for reaching the maximum level of achievement. No shares are awarded if the threshold level of achievement is not attained, and shares are awarded based on straight line interpolation if the metric is achieved between the threshold and the target or between the target and the maximum. The threshold, target and maximum level of achievement of the growth in the Company’s tangible book value and average return on tangible common equity established for the performance shares and the percentage payout at each level of achievement are as follows:

 

 

Threshold

 

Target

 

Maximum

Tangible book value

 

$20.59

 

$21.95

 

$22.57

Percentage Payout

 

50%

 

100%

 

150%


Performance-based Acquisition Awards.  During 2020,

ThresholdTargetMaximum
Tangible book value$28.55 $30.37 $31.89 
3-Year Average ROATCE14.01 %14.90 %15.65 %

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CEO Special Retention Award
As part of the Company's long-term executive retention and succession planning, our Compensation Committee also grantedrecommended and our Board approved the amendment and restatement of our CEO Mr. Fernández's Employment Agreement (the "2024 Employment Agreement"). The 2024 Employment Agreement provides for a one-time special equity award of 40,442 restricted stock units and 40,442 performance shares to Mr. Fernández on January 1, 2024, among other adjustments to his compensation, to retain his services for an additional three-year period from January 1, 2024 through December 31, 2026.

The special award granted to Mr. Fernández reflects the Board's desire for him to continue to lead the Company for a groupfurther significant number of senior executives,years. In making the special award, the Board considered the importance of Mr. Fernández's continuing, 20-year stewardship of the Company through extraordinarily challenging economic circumstances in Puerto Rico, leadership continuity, and management succession planning amidst a highly competitive landscape for executive leadership talent. The Board also took into account other factors, including the NEOs, to incentivize the accomplishment of operationalCompany's strong performance under Mr. Fernández's leadership since 2004, his exemplary leadership, and financial goals relatedhis significant contributions to the Scotiabank acquisition.Company’s success during his tenure. The nature of this special award reflects the critical importance to the Company of retaining Mr. Fernández in light of his anticipated appointment as Chairperson of the Board of Directors and his continued leadership and support of the Company's longer-term succession plans.

The equity award is not part of Mr. Fernández's regular annual compensation and will not be awarded on a recurring basis. The performance shares granted toawarded will require the NEOs were as follows:

 

 

Performance Shares

 

Name

 

Target Value ($)

 

 

Target Amount

 

José R. Fernández

 

 

346,250

 

 

 

27,700

 

Ganesh Kumar

 

 

281,250

 

 

 

22,500

 

Maritza Arizmendi

 

 

75,000

 

 

 

6,000

 

José Cabrera

 

 

25,000

 

 

 

2,000

 

César Ortiz

 

 

37,500

 

 

 

3,000

 


The performance shares will be paid based on a performance cycle from September 22, 2020 until December 31, 2021.  Vesting on half of the performance shares is contingent on the primary systems of the acquired bank being successfully converted the Company’s systems and implemented for use by March 31, 2021.  Vesting for the other half of the performance shares is contingent on the achievement of cumulative cost savings in 2021.  The threshold, target and maximum level ofsuccessful achievement of the cumulative cost savingsCompany performance share goals established for the 2024-2026 performance cycle. Apart from certain limited exceptions, vesting is subject to Mr. Fernández's continuous leadership of, or employment with, the Firm. Any shares received from vesting of the equity award are also subject to the Company’s Stock Ownership Policy requirements applicable to the CEO and the Compensation Recoupment Policy.


In addition to the one-time equity award, the 2024 Employment Agreement increased Mr. Fernández's target bonus percentage payout at each level of achievement are as follows:

from 90% to 100% starting with the 2023 bonus payable in 2024 and increased his 2024 annual base salary to $981,750.

 

 

Threshold

 

 

Target

 

 

Maximum

 

Cumulative cost savings as of December 31, 2021

 

$

28,000,000

 

 

$

35,000,000

 

 

$

38,500,000

 

Percentage Payout

 

 

50

%

 

 

100

%

 

 

150

%


Other Compensation Practices

Stock Ownership Requirements. Pursuant to our Officers and Directors Stock Ownership Policy, we require our NEOs (among other officers) to own a minimum amount of our equity stock (based on the higher of the market or book value of the stock) equal to five times annual base salary in the case of our CEO, Mr. Fernández, three times annual base salary in the case of our other NEOs and certain other executive officers, including Mr. Kumar and Ms. Arizmendi, and two times annual base salary in the case of other key officers, including Mr. Cabrera and Mr. Ortiz.officers. Our executives are required to comply in periods ranging from 2 to 4 years after they receive their first equity award following their appointment.

Anti-hedging and Pledging Policy. Our Insider Trading and Blackout Policy prohibits our employees from entering into any transaction to hedge or offset any decrease in the market value of our securities and from pledging any of our securities.


Clawback Policy. Our Compensation Recoupment Policy requires that our top executives,executive officers who received incentive-based compensation (e.g., bonus, annual incentive or other performance-based cash or equity compensation awards) induring the three-year period prior to aan accounting restatement of the Company’s financial statements due to a material non-compliance with financial reporting requirements under the applicable securities laws, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, return to the Company the amount of such compensation that the executive would have otherwise not have received but for the misstated financial statements.

Change-in-Control Compensation Agreements. An important objective of our compensation program is not only the recruitment of seasoned executives but also their retention and commitment to our long-term success. Therefore, to promote their retention and reduce any concerns that they may be adversely affected in the event of a change-in-control of the Company, we have entered into a change-in-control compensation agreement with Mr. Fernández and Mr. Kumar pursuant to which the executive is entitled to a cash payment equal to two times the sum of his annual base salary and last cash bonus if there is a change in control and as a result thereof or within one year thereafter his employment is terminated.

27

The following table presents the estimated cash compensation under their respective change-in-control compensation agreements based on their salaries and bonuses for 2020.2022. No such payout has been required to date under any such agreement by the Company.


Name

Change-in-Control Cash

Compensation ($)

José R. Fernández

6,369,900 

2,965,400

Ganesh Kumar

2,031,800 

2,288,800


Non-Qualified Deferred Compensation. We also offer our NEOs and other highly compensated executives a non-qualified deferred compensation plan for the deferral of taxable income and certain allowances. Such allowances are offered on a case-by-case basis and are not intended to constitute a significant portion of the executive’s compensation. Our non-qualified deferred compensation plan is more fully described below.


Fringe Benefits and Allowances. We provide several fringe benefits, including a defined contribution plan and healthcare coverage, to our NEOs on the same terms as they are provided to all of our employees. These benefits do not constitute a significant portion of the NEOs’ total compensation package and are generally available to all of our employees. We provide these benefits to retain and attract an appropriate caliber of talent and recognize that other companies with which we compete for talent provide similar benefits to their officers and employees.

Compensation Risk Assessment

COMPENSATION RISK ASSESSMENT
Our compensation program is a key component of the Company’s overall compliance and pay-for-performance culture. The Board’s Compensation Committee, with the assistance of our internal risk management staff, regularly reviews this program and does not believe that the risks arising from our compensation policies and practices are reasonably likely to have a material adverse effect on the Company.

We believe that our approach to setting goals and targets with payouts at multiple levels of performance and the evaluation of annual performance results assist in mitigating excessive risk-taking that could harm our value or reward poor judgment by our executives. Several features of our compensation program reflect sound risk management practices, including our Compensation Recoupment Policy and our Directors and Officers Stock Ownership Policy, which are described belowabove under the heading “Compensation Discussion and Analysis.”

We allocate compensation among base salary and incentive compensation (bonus and equity awards) to target opportunities in such a way as to not encourage excessive risk-taking. Furthermore, although the performance measures that determine bonus and equity awards for certain business unit leaders are based in part on the achievements of their respective business units, the measures that determine payouts for all our executives include company-wide metrics. Such metrics, which are not controlled or overly influenced by the results of any single business unit, are given greater weight in the case of NEOs. This is based on our belief that applying company-wide metrics encourages decision-making that is consistent with our philosophy and that is in the best long-term interests of the Company and its shareholders. Moreover, the mix of equity awards in our incentive program, which includes full value awards such as restricted stock units, and the minimum stock ownership requirements applicable to our top executives also mitigate risk. In addition, the multi-year vesting of our equity awards properly accounts for the time horizon of risk. Finally, each employee’s compliance with our internal policies and procedures, including ethics standards, is an important element of our annual bonus determinations.

Compensation Committee Report

COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Risk Assessment and the Compensation Discussion and Analysis (“CD&A”) and the Compensation Risk Assessment with management and, based on such review and discussion, the Committee recommended to the Board of Directors that the Compensation Risk Assessment and the CD&A be included in this proxy statement.


Submitted by:

Jorge Colón-Gerena, Chairperson

Edwin Pérez, Vice Chairperson

Julian S. Inclán,

Vice Chairperson
Annette Franqui

Compensation Committee Interlocks and Insider Participation


28

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of our executive officers served as a director of another entity, or as a member of the compensation committee of another entity, one of whose executive officers served as a member of our Board of Directors or as a member of its Compensation Committee at any time during 2020.

2023.


Executive

EXECUTIVE COMPENSATION
Summary Compensation

Table

The following table summarizes the total compensation earned in each of the last three years by the Named Executive Officers.

Summary Compensation Table

Name

 

Year

 

Salary

($)

 

 

Bonus

($)1

 

 

Stock

Awards

($)1

 

 

Option

Awards

($)1

 

 

Non-Equity

Incentive Plan

Compensation

($)2

 

 

All Other

Compensation

($)

 

 

 

Total

($)

 

José R. Fernández

 

2020

 

 

865,000

 

 

 

—

 

 

 

1,211,341

 

 

 

—

 

 

 

617,700

 

 

 

88,659

 

3

 

 

2,782,700

 

President & Chief Executive Officer

 

2019

 

 

865,000

 

 

 

283,333

 

 

 

736,368

 

 

 

—

 

 

 

850,200

 

 

 

117,703

 

 

 

 

2,852,604

 

 

 

2018

 

 

865,000

 

 

 

283,333

 

 

 

850,940

 

 

 

—

 

 

 

708,600

 

 

 

92,604

 

 

 

 

2,800,477

 

Ganesh Kumar

 

2020

 

 

700,000

 

 

 

—

 

 

 

684,650

 

 

 

—

 

 

 

444,400

 

 

 

108,747

 

4

 

 

1,937,797

 

Chief Operating Officer

 

2019

 

 

484,500

 

 

 

250,000

 

 

 

545,536

 

 

 

—

 

 

 

476,300

 

 

 

124,373

 

 

 

 

1,880,709

 

 

 

2018

 

 

484,500

 

 

 

335,667

 

 

 

431,060

 

 

 

—

 

 

 

529,200

 

 

 

76,603

 

 

 

 

1,857,030

 

Maritza Arizmendi

 

2020

 

 

375,000

 

 

 

—

 

 

 

276,700

 

 

 

—

 

 

 

178,600

 

 

 

27,211

 

5

 

 

857,511

 

Chief Financial Officer

 

2019

 

 

307,000

 

 

 

—

 

 

 

181,976

 

 

 

—

 

 

 

201,200

 

 

 

25,873

 

 

 

 

716,049

 

 

 

2018

 

 

284,000

 

 

 

—

 

 

 

134,400

 

 

 

—

 

 

 

186,100

 

 

 

17,594

 

 

 

 

622,094

 

José Cabrera

 

2020

 

 

193,239

 

 

 

—

 

 

 

75,425

 

 

 

—

 

 

 

57,972

 

 

 

26,473

 

6

 

 

353,109

 

Chief Risk and Compliance Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

César Ortiz

 

2020

 

 

257,550

 

 

 

—

 

 

 

106,078

 

 

 

—

 

 

 

65,200

 

 

 

49,667

 

7

 

 

478,495

 

Director of Corporate Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


1.

The value of equity awards is the aggregate grant date fair value computed in accordance with FASB ASC Topic 718.  For a discussion of the assumptions that we made in the valuation of the option awards, please refer to the notes to our audited financial statements.

NameYearSalary
($)		Bonus
($)
Stock Awards ($)1
Non-Equity Incentive Plan Compensation ($)2
All Other
Compensation
($)		Total
($)
José R. Fernández2023935,000—1,197,3941,188,300168,78133,489,475
President & Chief Executive Officer2022935,000—1,129,545872,200124,7623,061,507
 2021935,000—1,082,452878,700124,6853,020,837
Ganesh Kumar2023550,000—747,268465,900145,01341,908,181
Chief Strategy Officer, U.S. Business2022700,000—373,634523,100121,5211,718,255
2021700,000—729,764585,000120,2392,135,003
Maritza Arizmendi2023432,892—300,084391,50064,47851,188,954
Chief Financial Officer2022393,750—264,955289,60053,3341,001,639
2021375,000—273,896235,40026,361910,657
César Ortiz2023292,442—132,390169,84642,6206637,298
Chief Risk Officer2022273,807—80,881123,10038,215516,003
2021263,989—131,32083,30017,465496,074
Mari Evelyn Rodríguez2023234,231—351,540244,50011,5067841,776
Chief Retail Banking Officer

2.

The non-equity incentive plan payments for each year were made in the first quarter of the following year and intended as compensation for performance of the NEOs during the previous year, except for $600 advanced in the last quarter of the applicable year as a Christmas bonus.

1.    The value of equity awards is the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions that we made in the valuation of the option awards, please refer to the notes to our audited financial statements. The Company does not grant option awards.
2.    The non-equity incentive plan payments for each year were made in the first quarter of the following year and intended as compensation for performance of the NEOs during the previous year, except for a $600 advance paid during the fourth quarter as a Christmas bonus.
3.    This amount represents $99,997 for reasonable personal expenses in the performance of Mr. Fernández’s duties, $44,392 for dividends paid on performance shares, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.
4.    This amount represents $100,499 for reasonable personal expenses in the performance of Mr. Kumar’s duties, $20,700 for dividends paid on performance shares, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.
5.    This amount represents $41,000 for reasonable personal expenses in the performance of Ms. Arizmendi’s duties, $10,350 for dividends paid on performance shares, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.
6.    This amount represents $20,000 for reasonable personal expenses in the performance of Mr. Ortiz’s duties, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.
7.    This amount represents the payment of reasonable personal expenses in the performance of Ms. Rodríguez's duties, and medical, life and disability insurance premiums.

3.

This amount represents $65,655 for reasonable personal expenses in the performance of his duties, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.

4.

This amount represents $90,032 for reasonable personal expenses in the performance of his duties, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.

5.

This amount represents reasonable personal expenses in the performance of her duties, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of life and disability insurance premiums.

6.

This amount represents a car allowance, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.

7.

This amount represents $29,778 for reasonable personal expenses in the performance of his duties, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.

The median of the annual total compensation of all employees of the Company, except the CEO, in 20202023 was $35,692,$33,531.89, and the ratio of the median of the annual total compensation of all employees of the Company to the annualAnnual total compensation of the CEO in 20202023 was 1:78.73. The median employee was selected as of December 31, 20202023 based on the total cash compensation (i.e., base salary and bonus) paid to employees during 2020.

20182023.

29

CEO Employment Agreement

José Rafael Fernández entered into an amended and restated Employment Agreement with the Company on February 28, 2018 (as amended, the “2018December 21, 2023, effective on January 1, 2024 (the “2024 Employment Agreement”), which replaced the Employment Agreement entered into on September 27, 2016 (the “2016employment agreement executed July 28, 2021 (as amended, the “2021 Employment Agreement”).  The 2018 Employment Agreement was further amended on December 19, 2018 and, subject to the approval of the Board of Directors, on February 26, 2020. Mr. Fernández is our President and Chief Executive Officer and the Vice Chairperson of our Board of Directors. The 20182024 Employment Agreement is effective as of March 1, 2018 and ends on June 30, 2021.

December 31, 2026, and therefore, Mr. Fernández's 2023 compensation was primarily governed by the 2021 Employment Agreement.

As provided in the 20182021 and 2024 Employment Agreement,Agreements, Mr. Fernández reports directly to our Board of Directors and has overall responsibility for the business and affairs of the Company. During the term of the 20182021 and 2024 Employment AgreementAgreements and in any election of directors in which Mr. Fernández’s term as director is set to expire, the Board will nominate and recommend to the shareholders of the Company his election as a Board member and, if elected, will appoint him its Vice Chairperson.

The 20182021 Employment Agreement as amended subject to the approval of the Board of Directors, provides that Mr. Fernández will be compensated as follows: (i) annual base salary of $865,000,$935,000, which may be increased by the Compensation Committee of our Board of Directors; (ii) annual target bonus of a percentage, established by the Compensation Committee, of his annual base salary payable on or before March 31 of each year pursuant to the Company’s non-equity incentive bonus plan; (iii) annual expense allowance of $85,000$100,000 for his car-related expenses, membership expenses for social, business and professional organizations, and any other expenses which in his judgment are reasonably appropriate for the performance of his duties as President and Chief Executive Officer of the Company; (iv) a 10-year term life insurance policy in the amount of $3,000,000 covering his life and having as beneficiaries his spouse and heirs or other beneficiaries designated by him; (v) 25 days of paid vacation per year; (vi) the remaining balance, $425,000, of a special bonus of $850,000 granted pursuant to the 2016 Employment Agreement will be payable in three equal semi-annual installments commencing on July 1, 2018; and (vii)(vi) additional incentive compensation under the Company’s equity based compensation plan up to an annual amount equal to a percentage, established by the Compensation Committee, of his annual base salary, but he may elect to receive the award in deferred cash equivalents if he is in compliance with the Company’s Stock Ownership Policy. It also provides that Mr. Fernández will be entitled to participate in any equity-based compensation plan, profit-sharing plan or other plans, benefits and privileges offered by the Company to its employees and executives to the extent that he is otherwise eligible and qualifies to participate in and receive such benefits or privileges.

The 20182024 Employment Agreement had substantially the same terms and conditions as the 2021 Employment Agreement described above except that it (i) increased the target bonus percentage starting with the 2023 bonus payable in 2024 from 90% to 100%, (ii) increased his 2024 annual base salary to $981,750, and (iii) provided for a special one-time equity award of 40,442 restricted units and 40,442 performance shares to be granted in 2024.

The 2021 and 2024 Employment Agreements provide that they may be terminated by our Board of Directors for “just cause” (as defined therein). In the event it is terminatedof termination for just cause or if Mr. Fernández is removed or barred from office under applicable law, he will have no right to compensation or other benefits for any period after such termination. However, if the 20182021 or 2024 Employment Agreement is terminated by our Board of Directors other than for just cause and other than in connection with a change in control of the Company (as defined in his Change in Control Compensation Agreement with the Company), or if Mr. Fernández terminates the 20182021 or 2024 Employment Agreement for “good reason” (as defined therein), the Company will be required to pay him as severance, in lieu of any further compensation for periods subsequent to the date of termination, a lump sum equal to the product of (a) his annual base salary and bonus (equal to the average cash bonus paid to him in the last two fiscal years prior to the termination date), multiplied by (b) three.

Change-in-Control Compensation Agreements

We have entered into Change-in-Control Compensation Agreements with José RafaelMr. Fernández and GaneshMr. Kumar. Each agreement remains in full force as long as the person is employed by us.

Under the agreements, they are entitled to certain cash payment compensation in the event there is a “change in control of the Company” and as a result thereof or within one year after the change in control, the person’s employment is terminated by us or our successor in interest. The cash compensation will be an amount equal to two times the sum of such person’s annual base salary at the time the termination of his or her employment occurs and his or her last cash bonus paid prior to the termination of his or her employment.

employment times three for Mr. Fernández and times two for Mr. Kumar.

30

For purposes thereof, a change in control is deemed to have occurred if (i) any person or entity (including a group) acquires direct or indirect ownership of 50% or more of the combined voting power of the Company’s then outstanding common stock as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise; or (ii) the shareholders of the Company approve (a) any consolidation or merger of the Company in which the Company is not the surviving corporation (other than a merger in which the holders of the Company’s common stock immediately prior to the merger have the same or substantially the same proportionate


ownership of the surviving corporation immediately after the merger), or (b) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the Company’s assets to an entity which is not a wholly-owned subsidiary of the Company.

Life Insurance

We provide each of our NEOs with a life insurance policy, which in the event of death would pay his or her heirs or beneficiaries up to a maximum of $700,000 or, if the NEO qualifies, $1,000,000. We also provide our CEO with an additional life insurance policy, which in the event of his death would pay $3 million to his heirs or beneficiaries.


401(k)/1081.01(d) Plan

All the Company’s employees, including the employees of its subsidiaries, are eligible to participate in our cash or deferred arrangement profit sharing plan (the “401(k)/1081.01(d) Plan”). The 401(k)/1081.01(d) Plan is a defined contribution plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and is qualified under Sections 1081.01(a) and 1081.01(d) of the Puerto Rico Internal Revenue Code of 2011, as amended (the “Puerto Rico Internal Revenue Code”). The 401(k)/1081.01(d) Plan offers eligible participants several investment alternatives, including several U.S. mutual funds, a money market account, and shares of common stock of the Company. Contributions made through payroll deductions not in excess of a specified amount may be accumulated per year as before-tax savings. During 2020,2023, the Company contributed 50% of the employee’s contribution up to a maximum employee contribution for matching purposes of 8% of the employee’s salary. The matching contribution is invested in accordance with the employee’s election, which may be shares of common stock of the Company.



Grants of Plan-Based Awards

The following table presents the estimated possible payouts under our non-equity incentive awards, which reflect cash incentives pursuant to our annual bonus plan.

 

 

 

 

Estimated Future Payouts under

Non Equity Incentive Plan Awards1

 

Estimated Future Payouts under

Equity Incentive Plan Awards

 

 

Number of

Shares of Units

 

 

Grant

Date Fair

Value of

Equity Awards

 

Name

 

Grant Date

 

Threshold ($)

 

Target ($)

 

 

Maximum ($)

 

Threshold ($)

 

 

Target ($)

 

 

Maximum ($)

 

 

(#)

 

 

($)2

 

José R. Fernández

 

 

 

 

 

 

778,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,445

 

 

 

432,546

 

 

 

2/18/2020

 

 

 

 

 

 

 

 

 

$

216,273

 

 

$

432,546

 

 

$

648,818

 

 

 

21,445

 

 

 

432,546

 

 

 

9/22/2020

 

 

 

 

 

 

 

 

 

$

259,688

 

 

$

346,250

 

 

$

432,813

 

 

 

27,700

 

 

 

346,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ganesh Kumar

 

 

 

 

 

 

560,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,000

 

 

 

201,700

 

 

 

2/18/2020

 

 

 

 

 

 

 

 

 

$

100,850

 

 

$

201,700

 

 

$

302,550

 

 

 

10,000

 

 

 

201,700

 

 

 

9/22/2020

 

 

 

 

 

 

 

 

 

$

210,938

 

 

$

281,250

 

 

$

351,563

 

 

 

22,500

 

 

 

281,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maritza Arizmendi

 

 

 

 

 

 

225,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,000

 

 

 

100,850

 

 

 

2/18/2020

 

 

 

 

 

 

 

 

 

$

50,425

 

 

$

100,850

 

 

$

151,275

 

 

 

5,000

 

 

 

100,850

 

 

 

9/22/2020

 

 

 

 

 

 

 

 

 

$

56,250

 

 

$

75,000

 

 

$

93,750

 

 

 

6,000

 

 

 

75,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

José Cabrera3

 

 

 

 

 

 

57,972

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,500

 

 

 

50,425

 

 

 

9/22/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,000

 

 

 

25,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

César Ortiz

 

 

 

 

 

 

77,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,700

 

 

 

34,289

 

 

 

2/18/2020

 

 

 

 

 

 

 

 

 

$

17,145

 

 

$

34,289

 

 

$

51,434

 

 

 

1,700

 

 

 

34,289

 

 

 

9/22/2020

 

 

 

 

 

 

 

 

 

$

28,125

 

 

 

37,500

 

 

$

46,875

 

 

 

3,000

 

 

 

37,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.

Pursuant to our non-equity incentive plan, there are no maximum payouts.  Threshold payouts apply solely with respect to each performance metric, but not with respect to the aggregate performance on the corporate scorecard.

f

2.

Grant date fair value of awards computed in accordance with FASB ASC Topic 718.



Estimated Future Payouts under Non-Equity Incentive Plan Awards1
Estimated Future Payouts under
Equity Incentive Plan Awards		Number of
Shares of Units		Grant
Date Fair
Value of
Equity Awards
NameGrant DateThreshold ($)Target ($)Max ($)Threshold ($)Target ($)Max ($) (#)
($)2
José R. Fernández935,000
2/21/202320,350 598,697
2/21/2023$299,349 $598,697 $898,046 20,350 598,697
Ganesh Kumar385,000
2/21/202312,700 373,634
2/21/2023$186,817 $373,634 $560,451 12,700 373,634
Maritza Arizmendi308,000
2/21/20235,100 150,042
2/21/2023$75,021 $150,042 $225,063 5,100 150,042
César Ortiz295,920
2/21/20232,250 66,195
2/21/2023$33,098 $66,195 $99,293 2,250 66,195
Mari Evelyn Rodríguez175,000
5/1/202310,500 263,655
5/1/2023$43,943 $87,885 $131,828 3,500 87,885

1.    Pursuant to our non-equity incentive plan, there are no threshold or maximum payouts.

2.    Grant date fair value of awards computed in accordance with FASB ASC Topic 718.
31

Outstanding Equity Awards at Fiscal Year End

The following table presents information concerning unexercised stock options of each Named Executive Officer outstanding as of December 31, 2020.

Option Awards

Name

 

Number of Securities Underlying

Unexercised Options Exercisable

 

Number of Securities

Underlying Unexercised

Options Unexercisable

 

Option

Exercise

Price

 

Option

Expiration

Date

José R. Fernández

 

45,200

 

—

 

$11.83

 

2/23/2022

 

 

36,600

 

—

 

$14.52

 

1/22/2023

 

 

52,300

 

—

 

$16.10

 

2/27/2024

 

 

46,300

 

—

 

$17.44

 

2/24/2025

Total

 

180,400

 

—

 

 

 

 

Ganesh Kumar

 

25,200

 

—

 

$11.83

 

2/23/2022

 

 

25,500

 

—

 

$14.52

 

1/22/2023

 

 

27,100

 

—

 

$16.10

 

2/27/2024

 

 

23,200

 

—

 

$17.44

 

2/24/2025

Total

 

101,000

 

—

 

 

 

 

Maritza Arizmendi

 

6,000

 

—

 

$16.10

 

2/27/2024

 

 

6,000

 

—

 

$17.44

 

2/24/2025

Total

 

12,000

 

—

 

 

 

 

César Ortiz

 

6,000

 

—

 

$16.10

 

2/27/2024

Total

 

6,000

 

—

 

 

 

 


The following table presents information concerning restricted stock units and performance shares of Named Executive Officers that were outstanding and subject to the restricted period or the performance cycle as of December 31, 2020.

Stock Awards

2023. As of that date, there were no option awards outstanding to our NEOs.

Name

 

Number of Shares or

Units of Stock

That Have Not

Vested (#)

 

 

 

 

Market Value

of Shares or Units of

Stock That Have

Not Vested ($)

 

 

Number of

Unearned Shares or Units

of Stock That

Have Not

Vested (#)

 

 

 

 

Market Value

of Unearned

Shares or Units of Stock

That Have Not

Vested ($)

 

José R. Fernández

 

 

78,103

 

 

1

 

 

1,448,030

 

 

 

87,445

 

 

1

 

 

1,621,230

 

Ganesh Kumar

 

 

43,241

 

 

2

 

 

801,688

 

 

 

53,900

 

 

2

 

 

999,306

 

Maritza Arizmendi

 

 

19,881

 

 

3

 

 

368,594

 

 

 

15,300

 

 

3

 

 

283,662

 

José Cabrera

 

 

2,500

 

 

4

 

 

46,350

 

 

 

2,000

 

 

4

 

 

37,080

 

César Ortiz

 

 

5,205

 

 

5

 

 

96,501

 

 

 

6,200

 

 

5

 

 

114,948

 


NameNumber of Shares or
Units of Stock
That Have Not
Vested (#)		Market Value
of Shares or Units of
Stock That Have
Not Vested ($)		Number of
Unearned Shares or Units
of Stock That
Have Not
Vested (#)		Market Value
of Unearned
Shares or Units of Stock
That Have Not
Vested ($)
José R. Fernández147,642 15,533,622 — — 
Ganesh Kumar94,818 23,553,779 — — 
Maritza Arizmendi36,426 31,365,246 — — 
César Ortiz15,184 4569,096 — — 
Mari Evelyn Rodríguez15,750 5590,310 — — 

1.

The restricted periods lapse on February 27, 2021 with respect to the award of 45,000 restricted units, and annually in thirds commencing on February 20, 2020 with respect to the award of 17,400 restricted units and on February 18, 2021 with respect to the award of 21,445 restricted units.  The performance cycles end on December 31, 2020 with respect to the award of 20,900 performance shares, on December 31, 2021 with respect to the awards of 17,400 and 27,700 performance shares, and on December 31, 2022 with respect to the award of 21,445 performance shares.


2.

The restricted periods lapse on February 27, 2021 with respect to the award of 25,000 restricted stock units, annually in thirds commencing on February 20, 2020 with respect to the award of 7,300 restricted units, on July 5, 2020 with respect to the award of 5,000 restricted units, and on February 18, 2021 with respect to the award of 10,000 restricted units.  The performance cycles end on December 31, 2020 with respect to the award of 9,100 performance shares, on December 31, 2021 with respect to the awards of 7,300 and 22,500 performance shares, and on December 31, 2022 with respect to the award of 10,0001.    The restricted periods lapse annually in thirds commencing on February 21, 2024 for 20,350 restricted units, annually in halves commencing on February 22, 2024 for 13,500 restricted units, and on February 17, 2024 for 9,617 restricted units. The performance cycles end on December 31, 2023 for 28,850 performance shares, on December 24, 2024 for 20,250 performance shares, and on December 31, 2025 for 20,350 performance shares.

2.    The restricted periods lapse annually in thirds commencing on February 21, 2024 for 12,700 restricted units, annually in halves commencing on February 22, 2024 for 8,434 restricted units, and on February 17, 2024 for 6,484 restricted units. The performance cycles end on December 31, 2023 for 19,450 performance shares, on December 31, 2024 for 12,650 performance shares, and on December 31, 2025 for 12,700 performance shares.
3.    The restricted periods lapse annually in thirds commencing on February 21, 2024 for 5,100 restricted units, annually in halves commencing on February 22, 2024 for 3,167 restricted units, and on February 17, 2024 for 2,434 restricted units granted in 2021. The performance cycles end on December 31, 2023 for 7,300 performance shares, on December 31, 2024 for 4,750 performance shares, and on December 31, 2025 for 5,100 performance shares.
4.    The restricted periods lapse annually in thirds commencing on February 21, 2024 for 2,225 restricted units, annually in halves commencing on February 22, 2024 for 967 restricted units, and on February 17, 2024 for 1,167 restricted units. The performance cycles end on December 31, 2023 for 3,500 performance shares, on December 31, 2024 for 1,450 performance shares, and on December 31, 2025 for 2,250 performance shares.
5.    The restricted periods lapse annually in thirds commencing on May 1, 2024 for 10,500 restricted units. The performance cycle ends on December 31, 2025 for 3,500 performance shares.

3.

The restricted periods lapse February 27, 2021 with respect to the award of 12,000 restricted units, and annually in thirds commencing on February 20, 2020 with respect to the award of 4,300 restricted units and on February 18, 2021 with respect to the award of 5,000


Option Exercises and Stock Vested

restricted units.  The performance cycle ends on December 31, 2021 with respect to the awards of 4,300 and 6,000 performance shares, and on December 31, 2022 with respect to the award of 5,000 performance shares.

4.

The restricted period lapses on February 18, 2023 with respect to the award of 2,500 restricted units.  The performance cycle ends on December 31, 2021 with respect to the award of 2,000 performance shares.

5.

The restricted periods lapse on February 27, 2021 with respect to the award of 2,500 restricted units, and annually in thirds commencing on February 20, 2020 with respect to the award of 1,500 restricted units and on February 18, 2021 with respect to the award of 1,700 restricted units.  The performance cycle ends on December 31, 2021 with respect to the awards of 1,500 and 3,000 performance shares, and on December 31, 2022 with respect to the award of 1,700 performance shares.

The following table only presents information for the Named Executive Officers who acquired stock upon the exercise of an option award and upon the lapse of the restricted period of a restricted unit award in 2020.

Option Exercises and Stock Vested

2023.

 

 

Option Awards

 

 

Stock Awards

 

Name

 

Number of

Shares Acquired

on Exercise

 

 

Value Realized

on Exercise ($)1

 

 

Number of

Shares Acquired

on Vesting

 

 

Value Realized

on Vesting ($)

 

José R. Fernández

 

 

100,000

 

 

 

513,000

 

 

 

28,942

 

 

 

574,714

 

Ganesh Kumar

 

 

9,500

 

 

 

56,525

 

 

 

3,828

 

 

 

76,239

 

Maritza Arizmendi

 

 

—

 

 

 

—

 

 

 

5,561

 

 

 

110,243

 

José Cabrera

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

César Ortiz

 

 

—

 

 

 

—

 

 

 

2,461

 

 

 

48,894

 


Option AwardsStock Awards
NameNumber of
Shares Acquired
on Exercise
Value Realized on Exercise ($)1
Number of
Shares Acquired
on Vesting		Value Realized
on Vesting ($)
José R. Fernández98,600 1,174,536 55,684 1,618,649 
Ganesh Kumar75,800 1,138,518 29,033 844,484 
Maritza Arizmendi12,000 203,280 13,183 383,229 
César Ortiz— — 4,767 138,584 
Mari Evelyn Rodríguez— — — — 

1.

The value is based on the closing price of a share of the Company’s common stock on the exercise date minus the exercise price of the option.


1.    The value is based on the closing price of a share of the Company’s common stock on the exercise date minus the exercise price of the option.
32

Non-Qualified Deferred Compensation

The following table presents information concerning the deferral of compensation by the Named Executive Officers on a basis that is not tax-qualified.

Non-Qualified Deferred Compensation

Name

 

Executive

Contributions

in Last FY ($)1

 

 

Registrant

Contributions

in Last FY ($)

 

 

Aggregate

Earnings

in Last

FY ($)2

 

 

Aggregate

Withdrawals/

Distributions

($)

 

 

Aggregate

Balance

at Last

FYE ($)

 

José R. Fernández

 

 

—

 

 

 

—

 

 

 

34,194

 

 

 

—

 

 

 

2,258,376

 

Ganesh Kumar

 

 

734,014

 

 

 

—

 

 

 

16,509

 

 

 

—

 

 

 

3,411,781

 

César Ortiz

 

 

18,225

 

 

 

—

 

 

 

4,724

 

 

 

—

 

 

 

88,676

 


NameExecutive
Contributions
in Last FY ($)1		Registrant
Contributions
in Last FY ($)		Aggregate
Earnings
in Last
FY ($)2		Aggregate
Withdrawals/
Distributions
($)		Aggregate
Balance
at Last
FYE ($)
José R. Fernández— — 79,176 1,496,040 1,496,917 
Ganesh Kumar— — 94,371 1,769,292 1,770,531 
César Ortiz600 — 1,945 55,574.45 54,995 

1.

Such executive contributions are reported in the Summary Compensation Table.


1.    Such executive contributions are reported in the Summary Compensation Table.
2.    These earnings are not reported in the Summary Compensation Table.

2.

These earnings are not reported in the Summary Compensation Table.

The Company offers our executive officers a non-qualified deferred compensation plan, where such executives are allowed to defer taxable income. The plan is not intended to meet the requirements of Section 1081.01 of the Puerto Rico Internal Revenue Code, and therefore, does not meet the funding, employee coverage, and other requirements which “qualified retirement plans” must satisfy thereunder.

However, the plan is intended to constitute an unfunded arrangement maintained “primarily for the purposes of providing deferred compensation for a select group of management or highly compensated employees” for purposes of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. Under the plan, the executive’s current taxable income is reduced by the amount being deferred, which may be up to 100% of his or her salary and bonus. Funds contributed thereto can accumulateThe compensation due from the Company to the executive pursuant to the non-qualified plan may increase or decrease in value based on the performance of certain notional investment options selected by the executive. The deferred compensation obligations due to the executive may increase in value without current income tax to the individual. Taxes are due when the funds are withdrawn at the then current income tax rate applicable to the individual, which may be lower than his or her current income tax bracket.


33


Pay versus Performance Table
The following table presents the compensation of our CEO, which is our principal executive officer, and our other NEOs, together with the cumulative shareholder return of the Company and the S&P U.S. BMI Banks Index, the Company’s net income and the Company’s tangible book value, which is in our assessment the most important financial performance measure used to link compensation actually paid our NEOs for the most recently completed fiscal year.
Value of Initial Fixed $100 Investment Based On:
YearSummary Compensation Table Total for PEO ($)1Compensation Actually Paid to PEO ($)1Average Summary Compensation Table Total for Non-PEO NEOs2Average Compensation Actually Paid to Non-PEO NEOs2Total Shareholder ReturnPeer Group Total Shareholder ReturnNet Income ($000)Company Selected Measure: Earnings per Share ($)
20233,489,4756,543,3521,144,0521,674,912174.51107.32181,1723.85
20223,061,5073,454,638984,2321,324,122124.4598.38166,2393.46
20213,020,8374,895,7811,030,9741,653,106116.81118.61146,1512.85
20202,782,7002,757,366896,370918,97980.2187.2474,3271.32
1.    Our CEO, Mr. José R. Fernández, was the PEO in each year. In 2020, 2021, 2022, and 2023, $4,265,707, $4,113,982, $4,475,595, and $4,505,720, respectively, were deducted from the Summary Compensation Table Totals, which represent the grant date fair value of the equity awards he received in the corresponding fiscal year, and the fair value of unvested equity awards and dividends accrued on unvested performance shares as of the end of the immediately preceding fiscal year; and $4,240,373, $5,988,926, $4,868,726, and $6,392,586, respectively, were added, which represent the fair value as of the vesting date of awards that vest during the corresponding fiscal year and the fair value of all unvested equity awards and dividends accrued on unvested performance shares as of the end of the corresponding fiscal year .
2.    Mr. Ganesh Kumar, Ms. Maritza Arizmendi, and Mr. César Ortiz were Non-PEO NEOs in each year. The fourth Non-PEO NEOs was Ms. Mari E. Rodríguez in 2023, Mr. Patrick Haggarty in 2022, and Mr. José Cabrera in 2020 and 2021. In 2020, 2021, 2022, and 2023, $841,687, $946,806, $1,128,567, and $1,197,314, respectively, were the averages deducted from the Summary Compensation Table Totals, which represent the grant date fair value of the equity awards received in the corresponding fiscal year and the fair value of unvested equity awards and dividends accrued on unvested performance shares as of the end of the immediately preceding fiscal year; and $864,296, $1,507,653, $1,226,607, and $2,246,340, respectively, were the averages added, which represent the fair value as of the vesting date of awards that vest during the corresponding fiscal year and the fair value of all unvested equity awards and dividends accrued on unvested performance shares as of the end of the corresponding fiscal year .
The following graph presents the relationship between executive compensation actually paid by the Company to our CEO and the average compensation actually paid to the NEOs other than our CEO and the of the Company’s cumulative total shareholder return over the past four years. It also compares our Company’s cumulative total shareholder return with that of our peer group over the same period.
Graph TSR.jpg
34



The following graph presents the relationship between compensation actually paid by the Company to our CEO and the average compensation actually paid to the NEOs other than our CEO and the Company’s net income over the past four years.

Net Income Graph.jpg
The following graph presents the relationship between compensation actually paid by the Company to our CEO and the average compensation actually paid to the NEOs other than our CEO and the Company’s earnings per share over the past four years.
EPS Graph.jpg
The most important financial performance metrics used by the Company in our most recent fiscal year to link our NEOs compensation to our Company’s performance are earnings per share, tangible book value, average return on average tangible common equity, market share operating income, and efficiency ratio.
35

Director Compensation

Each director’s compensation is generally designed to be competitive with comparable compensation paid to directors at peer group companies in Puerto Rico and the U.S. However, each director’s actual compensation varies based on whether he or she is a Chairperson of our Board of Directors or any of its committees. It also varies depending on the number of meetings attended and on his or her membership in Board committees.

The following table presents information concerning the compensation of our directors for 2020.

2023.

Directors

 

Fees Earned

or Paid in

Cash ($)

 

 

Stock

Awards ($)1

 

 

 

 

 

Option

Awards ($)1

 

 

All Other

Compensation ($)

 

 

Total ($)

 

Julian S. Inclán

 

 

137,000

 

 

 

60,107

 

 

2

 

 

 

—

 

 

 

—

 

 

 

197,109

 

Juan C. Aguayo

 

 

60,000

 

 

 

40,138

 

 

3

 

 

 

—

 

 

 

—

 

 

 

100,141

 

Jorge Colón-Gerena

 

 

67,000

 

 

 

40,138

 

 

4

 

 

 

—

 

 

 

—

 

 

 

107,142

 

Néstor de Jesús

 

 

79,000

 

 

 

40,138

 

 

5

 

 

 

—

 

 

 

—

 

 

 

119,143

 

Susan Harnett

 

 

65,833

 

 

 

20,170

 

 

6

 

 

 

—

 

 

 

—

 

 

 

86,009

 

Pedro Morazzani

 

 

74,880

 

 

 

40,138

 

 

7

 

 

 

—

 

 

 

—

 

 

 

115,025

 

Edwin Pérez

 

 

-

 

 

 

40,138

 

 

8

 

 

 

—

 

 

 

—

 

 

 

40,146

 

Christa Steele9

 

 

54,167

 

 

 

10,085

 

 

9

 

 

 

—

 

 

 

—

 

 

 

64,261

 


DirectorsFees Earned
or Paid in
Cash ($)
Stock Awards ($)1
Option Awards ($)1
All Other
Compensation ($)		Total ($)
Julian S. Inclán137,00063,7002——200,700
Jorge Colón-Gerena72,00043,3163——115,316
Néstor de Jesús79,00043,3164——122,316
Annette Franqui60,00015,2885——75,288
Susan Harnett65,00043,3166——108,316
Rafael Vélez72,00043,3167——115,316
Angel Vázquez58,333—58,333
Edwin Pérez133,4798133,487

1.

Aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718.


2.

The aggregate amount of restricted stock units outstanding at the end of 2020 is 8,780.

1.    Aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718.
2.    The aggregate amount of restricted stock units outstanding at the end of 2023 is 8,100.
3.    The aggregate amount of restricted stock units outstanding at the end of 2023 is 5,500.
4.    The aggregate amount of restricted stock units outstanding at the end of 2023 is 5,500.
5.    The aggregate amount of restricted stock units outstanding at the end of 2023 is 600.
6.    The aggregate amount of restricted stock units outstanding at the end of 2023 is 5,500.
7.    The aggregate amount of restricted stock units outstanding at the end of 2023 is 2,100.
8.    In May 2023, Mr. Edwin Pérez was awarded a cumulative sum encompassing deferred service fees in connection with the end of his service as director.

3.

The aggregate amount of restricted stock units outstanding at the end of 2020 is 4,990.

4.

The aggregate amount of restricted stock units outstanding at the end of 2020 is 4,790.


5.

The aggregate amount of restricted stock units outstanding at the end of 2020 is 4,690.

6.

The aggregate amount of restricted stock units outstanding at the end of 2020 is 1,000.

7.

The aggregate amount of restricted stock units outstanding at the end of 2020 is 5,690.

8.

Mr. Edwin Pérez elected to receive his cash compensation of $60,000 for service as a director in 2020 in the form of an equity award to be awarded in 2021.  The aggregate amount of restricted stock units outstanding at the end of 2020 is 1,990.

9.

Ms. Steele resigned from the Board effective November 3, 2020.

The Compensation Committee approved the compensation program for our directors. Pursuant to such program, each non-employee director receives an annual retainer of $60,000, except for the Chairperson of the Board, who receives an annual retainer of $130,000. Non-employee directors serving on Oriental Bank’s Board of Directors receive a fee of $1,000 for each Board meeting attended. Furthermore, the Chairpersons of the Audit Committee and the Risk and Compliance Committee receive an additional annual retainer of $12,000, and the other members of such committees (other than the Board and Committee Chairpersons) receive an additional annual retainer of $5,000. Such retainers are payable in equal monthly installments in advance. The Compensation Committee also established that each non-employee director will be awarded restricted units with a value of $40,000, except for the Chairperson of the Board, who will be awarded restricted units with a value of $60,000.

The President and CEO, who is Vice Chairperson of the Board, does not receive director’s fees and is compensated exclusively pursuant to his 2018 Employment Agreement, which is described above under the subheading “2018“CEO Employment Agreement.”


36

Proposal


PROPOSAL 3: Ratification of Selection of Independent Registered Public Accounting Firm

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of our Board of Directors has selected KPMG LLP (“KPMG”) as our independent registered public accounting firm for the year ending December 31, 2021,2024 and has further directed that the selection of such firm be submitted for ratification by the shareholders at this annual meeting. KPMG has served as our independent registered public accounting firm since 2005. Neither our articles of incorporation nor our by-laws require that our shareholders ratify the selection of such firm. If our shareholders do not ratify the selection, the Audit Committee will reconsider whether or not to retain KPMG, but may nonetheless retain it. Even if the selection is ratified, the Audit Committee, in their discretion, may change the appointment at any time during the year if they determine that such change would be in our best interest.

KPMG will have representatives present at the annual meeting who will have an opportunity to make a brief statement if they desire to do so, and who will be available to respond to appropriate questions that may arise.

Our Board of Directors recommends that you vote “FOR” this proposal.

Independent Auditor

INDEPENDENT AUDITOR
KPMG served as our independent registered public accounting firm for the year ended December 31, 2020.2023. The services that KPMG provided to the Company and its subsidiaries included the examination of our consolidated financial statements, limited revisions of our quarterly reports, audits of some of our subsidiaries, audits of our employee benefits plan, services related to our filings with the SEC and other regulatory agencies, and consultations on various tax and accounting matters.

The Audit Committee reviewed and approved all audit and non-audit services rendered by KPMG to the Company and its subsidiaries and concluded that the provision of such services was compatible with the maintenance of KPMG’s independence in the conduct of its auditing functions. The Audit Committee has adopted a pre-approval policy regarding the procurement of audit and non-audit services, which is available on our website at www.ofgbancorp.com. The Audit Committee intends to review such policy periodically.

The aggregate fees billed by KPMG for the years ended December 31, 20202023 and 20192022 for the various services provided to the Company and its subsidiaries were as follows:

 

Type of Fees

 

Year Ended

December 31,

2020 ($)

 

 

Year Ended

December 31,

2019 ($)

 

Audit Fees

 

 

2,634,910

 

 

 

2,087,850

 

Audit-Related Fees

 

 

496,237

 

 

 

—

 

Tax Fees

 

 

—

 

 

 

38,227

 

All Other Fees

 

 

203,600

 

 

 

10,780

 

 

 

 

3,334,747

 

 

 

2,136,857

 



Type of Fees
Year Ended
December 31,
2023 ($)		Year Ended
December 31,
2022 ($)
Audit Fees1,411,7001,324,700
Audit-Related Fees123,800117,800
Tax Fees—
All Other Fees1,7801,780
 1,537,2801,444,280

As defined by the SEC, (i) “audit fees” are fees for professional services rendered by our principal accountant for the audit of our annual financial statements, including the audit of our internal control over financial reporting, and review of financial statements included on our Forms 10-Q, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those years; (ii) “audit-related fees” are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements; (iii) “tax fees” are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) “all other fees” are fees for products and services provided by our principal accountant, other than the services reported under “audit fees,” “audit-related fees,” and “tax fees.”


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Audit Committee Report


AUDIT COMMITTEE REPORT
The Audit Committee assists the Board of Directors in its oversight of the financial reporting process of OFG Bancorp (the “Company”) and meets regularly with the Company’s internal and external auditors, CEO and CFO. The Audit Committee’s responsibilities are more fully described in its charter, a copy of which is available on the Company’s website at www.ofgbancorp.com.

Management has the primary responsibility for the preparation and integrity of the Company’s financial statements, accounting and financial reporting principles, and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The Company’s independent registered public accounting firm is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America.

In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed the audited financial statements for the period ended December 31, 20202023 with the Company’s management and has discussed with KPMG LLP (“KPMG”) the matters that are required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, KPMG has provided the Audit Committee with the written disclosures and the letter required by the Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as adopted by the Public Company Accounting Oversight Board in Rule 3600T, and the Audit Committee has discussed with KPMG their independence.

The members of the Audit Committee are not engaged professionally in rendering, auditing or accounting services on behalf of the Company nor are they Company employees. The Company’s management is responsible for its accounting, financial management and internal controls. As such, it is not the duty or responsibility of the Audit Committee or its members to conduct “field work” or other types of auditing or accounting reviews or procedures.

Based on such reviews and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s annual report on Form 10-K for the year ended December 31, 2020,2023, for filing with the Securities and Exchange Commission.


Submitted by:

Rafael Vélez, Chairperson

Pedro Morazzani,Jorge Colón Gerena, Vice Chairperson

Julian S. Inclán

Susan Harnett

Angel Vázquez

Indebtedness of Management


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INDEBTEDNESS OF MANAGEMENT
Certain transactions involving loans were transacted in 20202023 between the Company’s banking subsidiary, Oriental Bank, some of our directors and executive officers, including those of our other subsidiaries, and persons related to or affiliated with such persons. All such transactions were made in the ordinary course of business on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable transactions with persons not related to the lender, and did not involve more than the normal risk of collectability or present other unfavorable features. At present, none of the loans to such directors and executive officers, including persons related to or affiliated with such persons, is non-performing.


Certain Relationships and Related Transactions

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our Board of Directors recognizes that certain transactions present a heightened risk of conflicts of interest and/or improper valuation (or the perception thereof) and, therefore, has adopted a Related Party Transactions Policy (the “Policy”). For these purposes, a “Related Party Transaction” is defined as a transaction or series of similar transactions in which the Company or any of its subsidiaries is to be a participant and the amount involved exceeds $120,000, and in which any Related Party has or will have a direct or indirect material interest. A “Related Party” is any of our directors or executive officers, any nominee for director, any beneficial owner of more than 5% of any class of our voting securities, and any immediate family member of any of the previously mentioned. The Policy generally covers any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships between the Related Party and the Company. Related Party Transactions thereunder are approved or ratified by the Risk and Compliance Committee or the disinterested members of our Board of Directors (other than employment or compensation arrangements, which are approved by the Compensation Committee or the disinterested members of our Board of Directors). Furthermore, the Risk and Compliance Committee may approve or ratify a Related Party Transaction if (i)it finds that there is a compelling business reason to approve the transaction, taking into account all pertinent factors, (ii) it has been fully informed of any and all significant conflicts that may exist or otherwise arise on account of the transaction, and (iii) it reasonably believes that the transaction is beneficial for the Company and that it has adopted appropriate measures to manage the potential conflicts of interest. All Related Party Transactions approved or ratified by the Risk and Compliance Committee must be disclosed to our Board of Directors at its next regularly scheduled meeting.

Delgado & Fernández, LLP, San Juan, Puerto Rico, has continuously provided legal and notarial services to the Company since 1997 in the areas of mortgage lending, mortgage foreclosures and debt recovery, general legal advice, and commercial and labor litigation and arbitration. The brother of José Rafael Fernández, our President and CEO, is athe principal partner at that firm. The Company engaged Delgado & Fernández before Mr. Fernández became our President and CEO and a member of our Board of Directors. During 2020,2022, the Company paid such firm a total of $1,859,742$1,765,497 for legal services rendered to us.

In January 2008,us and $557,651.00 for notarial services in connection with loan closings paid for by clients of the Company engaged the legal services of Carlos O. Souffront LLC, Dorado, Puerto Rico.  Pursuant to thisCompany.

The engagement Carlos O. Souffront, Esq., served as our General Counsel until December 31, 2020.  His firm continues to provide services to the Company as an advisor to the President and CEO.  As consideration for his services provided in 2020, the Company paid $719,233 to that firm.  The Company also awarded Mr. Souffront 2,500 performance shares and 2,500 restricted stock units in 2021.  He is also the Secretary of our Board of Directors.

The engagements of Delgado & Fernández, LLP and Carlos O. Souffront LLC werewas approved by our Board of Directors.

The Company’s bank subsidiary entered into a commitment to make an equity investment in a Delaware limited partnership (the “Partnership”) that is expected to be licensed as a small business investment company (an “SBIC”) by the U.S. Small Business Administration. An equity investment by the bank in an SBIC is presumed qualified for purposes of the U.S. Community Reinvestment Act.

The Partnership is managed by a Puerto Rico limited liability company, as general partner, which is led by a group of investment professionals, including Eduardo M. Inclán, who is the son of the Chairperson of our Board of Directors. The bank, as limited partner, committed to the Partnership the lesser of $3 million or 15% of the total amount committed by all the partners. The general partner, including Eduardo Inclán, committed $500,000, which will represent 2.5% to 3.5% of the Partnership’s private capital. In addition, a company in which Mr. Julian Inclán, Chairperson of our Board of Directors, owns 50% and his brother and nephew own the remaining 50% committed $250,000 to the Partnership. This transaction was approved by all disinterested members of the Company’s Board of Directors and the Board of Directors determined that such transaction does not affect Mr. Julian Inclán’s independence as a member of the Board.


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Section 16(a) Beneficial Ownership Reporting Compliance,


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE,
Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of our equity securities to timely file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. We are required to identify any such director, executive officer or greater than 10% stockholder who failed to timely file any such report. Based solely on the review of copies of such reports and other information furnished to the Company by such individuals, we believe that during and with respect to 20202023 such persons timely filed all required reports.

Shareholder Proposals

reports, except for Mari Evelyn Rodríguez, who filed a late Form 3, and Edwin Pérez, Patrick Haggarty and César Ortiz, who each failed to timely file a Form 4.

SHAREHOLDER PROPOSALS
Under our bylaws, business may only be brought before an annual meeting of shareholders if it is specified in the notice of the meeting or any supplement thereto given by or at the direction of our Board of Directors, or otherwise properly brought before the meeting by a shareholder. For business to be properly brought before an annual meeting by a shareholder, the shareholder must have given written notice to the Secretary of our Board of Directors not later than 120 days prior to the anniversary date of the mailing of our proxy materials in connection with the immediately preceding annual meeting of shareholders. The notice must set forth as to each matter that the shareholder proposes to bring before the annual meeting (i) a brief description of the matter or proposal desired to be brought before the meeting, (ii) the name and address of the shareholder, as it appears on our books, (iii) a representation that the shareholder is a holder of our shares of stock entitled to vote (indicating the class and number of shares) and intends to appear in person or by proxy at the meeting to bring up the matter or proposal, and (iv) any material interest of the shareholder in such matter or proposal.

Shareholders may nominate candidates to our Board of Directors by delivering notice to our Secretary not later than 120 days prior to the anniversary of the date of the mailing of our proxy materials in connection with the immediately preceding annual meeting of shareholders. The notice must include: (i) the name and address of the stockholder who makes the nomination; (ii) a representation that the stockholder is a holder of the Company’s shares of stock entitled to vote and that it intends to appear in person or by proxy at the meeting; (iii) a description of any understandings between the stockholder and the nominee; (iv) any other information regarding the nominee that is required under the proxy rules of the Securities and Exchange Commission; and (v) the written consent of the nominee to serve as director if elected. The bylaws require that ballots bearing the names of all persons nominated by the Board of Directors and by shareholders be provided for use at the annual meeting.

The requirements set forth in the preceding paragraph are separate from and in addition to the SEC requirements that a shareholder must meet in order to have a shareholder proposal included in our proxy statement.

Shareholder proposals intended to be presented at the 20222025 annual meeting of shareholders must be set forth in writing and received by the Secretary of our Board of Directors, OFG Bancorp, P.O. Box 195115, San Juan, Puerto Rico 00919-5115, no later than the close of business on November 18, 2021.

27, 2024.

40

Annual Reports


ANNUAL REPORTS
This proxy statement is accompanied by our annual report on Form 10-K, which is our annual report to shareholders for the fiscal year. The annual report is not part of the proxy solicitation materials.

Upon receipt of a written request, we will furnish to any shareholder, without charge, a copy of our 20182023 annual report on Form 10-K, including the financial statements and schedules, and a list of the exhibits thereto required to be filed with the SEC under the Exchange Act. Such written request should be directed to OFG Bancorp, Investor Relations 254 Muñoz Rivera Avenue, San Juan, PR 00918; Email: Gary Fishman at gfishman@ofgbancorp.com or Steven Anreder at sanreder@ofgbancorp.com; Telephone: (212) 532-3232.


BY ORDER OF THE BOARD OF DIRECTORS

Image_11.jpg

Julian S. Inclán

Chairperson


March 18, 2021

27, 2024


San Juan, Puerto Rico



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SCAN TO VIEW MATERIALS & VOTE OFG BANCORP C/O AMERICAN STOCK TRANSFER & TRUST CO. 6201 15TH AVENUE BROOKLYN, NY 11219 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above 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/OFG2021OFG2023 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. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D35413-P49105 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLYD99395-P86874 OFG BANCORP For All Withhold All For All Except To withhold authority to vote for any individual The Board of Directors recommends that you vote FOR All All Except nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends that you vote FOR ALL of the following: 1. To elect seven directors to serve until the 20222024 Annual Meeting of Shareholders and until their successors are duly elected and qualified: Nominees:    01) Julian S. Inclán 02) José Rafael Fernández 03) Jorge Colón-Gerena 04) Néstor de Jesús 05) Annette Franqui 06) Susan Harnett 06) Pedro Morazzani 07) Edwin PérezRafael Vélez For Against Abstain For Abstain Against The Board of Directors recommends that you vote FOR the following: The Board of Directors recommends that you vote FOR the following: 2. To approve, on an advisory basis, the compensation of the Company's Named Executive Officers as set forth in the accompanying Proxy Statement. For Against Abstain   4. To amend the 2007 Omnibus Performance Incentive Plan, as amended and restated. The Board of Directors recommends that you vote FOR the following: 3 Years 1 Year 2 Years Abstain The Board of Directors recommends that you vote 1 YEAR on the following: 3. To provide an advisory vote on the frequency of the vote on executive compensation. 5. To ratify the selection of the Company'sCompany’s independent registered public accounting firm for 2021.   2023. To cumulate votes as to a particular nominee as explained in the Proxy Statement, check box to the right, then indicate the name(s) and the number of votes to be given to such nominee(s) on the reverse side of this card. Please do not check box unless you want to exercise cumulative voting. PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY USING THE ENCLOSED ENVELOPE. Please sign exactly as your name(s) appear(s) on this proxy. When signing as an attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D35414-P49105D99396-P86874 OFG BANCORP REVOCABLE PROXY This proxy is solicited on behalf of the Board of Directors of OFG Bancorp for use only at the Annual Meeting of Shareholders to be held on April 28, 2021,26, 2023, and at any adjournment or postponement of that Annual Meeting. This proxy may be revoked by the undersigned at any time before it is exercised. The undersigned, being a shareholder of OFG Bancorp (the "Company"), hereby authorizes the Board of Directors of the Company or any successors in their respective positions, as proxies with full powers of substitution, to represent the undersigned at the Annual Meeting of Shareholders of the Company to be held virtually on Wednesday, April 28, 2021,26, 2023, at 10:00 a.m. (EDT), and at any adjournment or postponement of that meeting, and thereat to act with respectwithrespect to all votes that the undersigned would be entitled to cast, if then personally present, as indicated on the reverse side. In their discretion, the proxies are authorized to vote this proxy with respect to (i) the approval of the minutes of the last meeting of shareholders; (ii) the election of any person as director if any nominee is unable to serve or, for good cause, will not serve; (iii) matters incident to the conduct of the Annual Meeting; and (iv) such other matters as may properly come before the Annual Meeting. Except with respect to procedural matters incident to the conduct of the Annual Meeting, management at the present knows of no other business to be brought before the meeting other than those matters described in the accompanying proxy statement. Shares of common stock of the Company will be voted as specified in this proxy. In the absence of any express indication that the shares to be voted should be cumulated in a particular fashion, the votes represented by executed proxies will be distributed equally among the seven nominees or in such other fashion as will most likely ensure the election of the nominees. If no specification is made on the reverse side, shares will be voted "FOR ALL" in Proposal 1: Election of Directors; "FOR" Proposal 2: Advisory Vote on Executive Compensation; "1 Year" on Proposal 3: Advisory Vote on Frequency of Vote on Executive Compensation; "FOR" Proposal 4:Amendment of the 2007 Omnibus Performance Incentive Plan; and "FOR" Proposal 3:5: Ratification of Selection of Independent Registered Public Accounting Firm. This proxy cannot be voted for any person who is not a nominee of the Company's Board of Directors. CUMULATE (If you noted cumulative voting instructions above, please check the corresponding box on the reverse side.)



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Your Vote Counts! OFG BANCORP 20212023 Annual Meeting Vote by April 27, 202125, 2023 11:59 PM ET OFG BANCORP C/O AMERICAN STOCK TRANSFER & TRUST CO. 6201 15TH AVENUE BROOKLYN, NY 11219 D35444-P49105D99449-P86874 You invested in OFG BANCORP and it’s time to vote! You have the right to vote on proposals being presented at the Annual Meeting. This is an important notice regarding the availability of proxy material for the shareholder meeting to be held on April 28, 2021.26, 2023. Get informed before you vote View the Notice and Proxy Statement and Annual Report online OR you can receive a free paper or email copy of the voting material(s) by requesting prior to April 14, 2021.12, 2023. If you would like to request a copy of the voting material(s), for this and/or future shareholder meetings, you may (1) visit www.ProxyVote.com, (2) call 1-800-579-1639 or (3) send an email to sendmaterial@proxyvote.com. If sending an email, please include your control number (indicated below) in the subject line. Unless requested, you will not otherwise receive a paper or email copy. For complete information and to vote, visit www.ProxyVote.com Control # Vote Virtually at the Meeting* April 26, 2023 10:00 a.m. EDT Smartphone users Point your camera here and vote without entering a control number VirtuallyVirtua


Ballot 1.jpglly at: Vote Virtually at the Meeting* April 28, 2021 10:00 AM EDT www.virtualshareholdermeeting.com/OFG2021 *Many shareholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. PleaseOFG2023 *Please check the meeting materials for any special requirements for meeting attendance. V1 V1.1

Vote at www.ProxyVote.com THIS IS NOT A VOTABLE BALLOT This is an overview of the proposals being presented at the upcoming shareholder meeting. Please follow the instructions on the reverse side to vote these important matters. Voting Items Board Recommends 1.To elect seven directors to serve until the 2022 Annual Meeting of Shareholders and until their successors are duly elected and qualified: Nominees: 01) Julian S. Inclán 02) José Rafael Fernández 03) Jorge Colón-Gerena 04) Néstor de Jesús 05) Susan Harnett 06) Pedro Morazzani 07) Edwin Pérez For 2. To approve, on an advisory basis, the




he compensation of the Company’s Named Executive Officers as set forth in the accompanying Proxy Statement. For 1 Year 3. To Ballot 2_.jpgprovide an advisory vote on the frequency of the vote on executive compensation. For 4. To amend the 2007 Omnibus Performance Incentive Plan, as amended and restated. For 5. To ratify the selection of the Company’s independent registered public accounting firm for 2021. For2023. Prefer to receive an email instead? While voting on www.ProxyVote.com, be sure to click “Sign up for E-delivery”. D35445-P49105

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