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 (Amendment
(Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
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Filed by the Registrant x
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Filed by a Party other than the Registrant ☐ | | |
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☐ Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permittedby Rule 14a-6(e)(2)) |
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| Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | | |
| ☐ | Soliciting Material Pursuant to Rule 14a-12 | | under §240.14a-12 |
Eastern Bankshares, Inc.
(Name of the Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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April 1, 2021
I am pleased to invite you to attend the 20212024 Annual Meeting of Shareholders of Eastern Bankshares, Inc. The meeting will be held on Monday, May 1713, 2024, at 12:00 p.m. Eastern Time online via the Internet at https://agm.issuerdirect.com/ebc and at our corporate offices located at 265 Franklin Street, Boston, Massachusetts 02110.Internet. Details regarding the business to be conducted at the meeting are described in the enclosed notice of the meeting and our proxy statement.
Shareholders will receive a notice describing how to access our proxy materials over the Internet, how to register to attend the meeting virtually, and how to request to receive a paper copy of the proxy materials by mail.materials. Our proxy materials, includeincluding this proxy statement and our 20202023 annual report to shareholders, containingcontain our audited financial statements and information about our business.
Your vote is very important. You can ensure your shares of our common stock are represented and are voted at the meeting by submitting your instructions by telephone, the Internet, or in writing by returning your proxy card or voting form. We encourage you to consider registering for and attending our 2021virtual 2024 Annual Meeting of Shareholders virtually through the Internet.
Shareholders.Thank you for your support and continued interest in Eastern Bankshares, Inc.
Sincerely,
ROBERT F. RIVERS
Chair of the Board of Directors and
Chief Executive Officer
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| Sincerely, |
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| ROBERT F. RIVERS |
Chair of the Board of Directors and Executive Chair |
April 1, 2021
The 20212024 Annual Meeting of Shareholders of Eastern Bankshares, Inc. will be held on Monday, May 17, 2021,13, 2024, at 12:00 p.m. Eastern Time online via the Internet at https://agm.issuerdirect.com/ebc and at our corporate office located at 265 Franklin Street, Boston, Massachusetts 02110.Internet. The purpose of the meeting is to consider and take action upon the following matters:
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| 1. | to elect fourfive directors for a three-year term expiring in 2024;2027; |
| 2. | to hold an advisory vote on executive compensation; |
| 3. | to hold an advisory vote on the frequency of future executive compensation advisory votes; |
4. | to ratify the appointment of Ernst & Young LLP by the Audit Committee of our Board of Directors as our company’s independent registered public accounting firm for the 20212024 fiscal year; and |
5. | 4. | to vote on such other business as may properly be brought before the meeting and any adjournment of the meeting. |
The record date for the determination of the shareholders entitled to receive notice of and to vote at the meetingAnnual Meeting is Friday, March 12, 2021.8, 2024. Our stock transfer books will remain open.
Our Bylaws require that the holders of a majority of the shares of our common stock, issued and outstanding and entitled to vote at the meeting, be present online or in person, or represented by proxy at the meeting in order to constitute a quorum for the transaction of business. Accordingly, it is important that your shares be represented at the meeting regardless of the number of shares you may hold. Please ensure that your shares of our common stock are present and voted at the meeting by submitting your instructions by telephone, the Internet, or in writing by completing, signing, dating and returning your proxy card or voting form. If you choose to attend the 2021 annual meeting virtually,virtual 2024 Annual Meeting, you may also vote your shares through the Internet during the meeting. Due to state laws and our corporate safety protocols related to the COVID-19 pandemic, shareholders will not be able to be present at our corporate office for the meeting.
You are entitled to participate in the 20212024 Annual Meeting if you were a shareholder at the close of business on Friday, March 12, 2021,8, 2024, the record date, or hold a legal proxy for the meeting provided by your bank, broker or nominee as of such record date.
● To access,register to attend the 2024 Annual Meeting online via the Internet, visit www.proxydocs.com/EBC and enter your control number. Registrants who choose to participate in, andwill be provided a link via email to the virtual meeting on the day of the meeting.
● To vote your shares virtually in advance of or at the 20212024 Annual Meeting, visit https://agm.issuerdirect.com/ebcwww.proxypush.com/EBC and enter your control number:
•Shareholders of record must enter thenumber.Your control number can be found on theiryour proxy card, or the Notice of Internet Availability of Proxy Materials.
•If your shares are held in “street name” through a broker, bank or other nominee, in order to participate in the annual meeting virtually, you must first obtain a legal proxy from your broker, bank or other nominee reflecting the number of shares of Eastern Bankshares, Inc. common stock you held as of the record date, your name and email address. You must then obtain a new control number from Continental Stock Transfer & Trust Company, LLC, our transfer agent, by presenting the legal proxy to Continental. You should submit a request for a new control number to Continental by emailing proxy@continentalstock.com no later than 5:00 p.m. on Wednesday, May 14, 2021.
•Plan participants in the Company's 401(k) Plan and/or Employee Stock Ownership Plan must enter the control number found on their vote authorization form or the Notice of Internet Availability of Proxy Materials.
If you join the meeting virtually,virtual 2024 Annual Meeting, you can submit questions in writing during the meeting through the Q&A tab on the virtual platform. We intend to answer as many questions that pertain to company matters as time allows during the meeting. Questions that are substantially similar may be grouped or not answered to ensure we are able to answer every question in this virtual format.
address as many topics as possible.A complete list of registered shareholders will be made available to shareholders of record at the meeting and in accordance with our Bylaws by emailing annualmeeting@easternbank.com.
This notice, the proxy and proxy statement are sent to you by order of our Board of Directors on behalf of the company.
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| KATHLEEN C. HENRY |
| Executive Vice President, General Counsel and |
| Corporate Secretary |
We are furnishing this proxy statement (the "Proxy Statement"(“the Proxy Statement”) in connection with the solicitation of proxies by the Board of Directors (which we sometimes refer to as the “Board”) of Eastern Bankshares, Inc. (which we may also refer to as “we,” “us,”“we” “us” or the “Company”“the Company” throughout this Proxy Statement)Statement; Eastern Bank is sometimes referred to herein as the “Bank,” and Eastern Bankshares, Inc. and Eastern Bank are sometimes collectively referred to herein as “Eastern”) for use at our 20212024 annual meeting of shareholders ("(“Annual Meeting"Meeting” or “the Meeting”) to be held on Monday, May 17, 202113,, 2024, at 12:00 p.m. Eastern time online via the Internet at https://agm.issuerdirect.com/ebc and at our corporate office located at 265 Franklin Street, Boston, MA 02110, and at any adjournment of that meeting. The mailing address of our principal executive office is 265 Franklin125 High Street, Boston, MA 02110. The noticeNotice of annual meeting,Annual Meeting and this Proxy Statement and the enclosed proxy are first being first furnished to our shareholders on or about April 1, 2021.
2024.INTERNET AVAILABILITY OF PROXY MATERIALS
Our proxy materials are available over the Internet. YouShareholders will receive a Notice of Internet Availability of Proxy Materials (the “Notice”) on or about April 5, 20211, 2024, to comply with the 40-day requirement pursuant to Rule 14a-16(a) of the the Securities and Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”). The Notice contains instructions on how to access our proxy materials, including our Proxy Statement, in connection with the Annual Meeting and our 2020 annual report to shareholders ("Annual Report"), and submit your proxy or vote authorization form. The Notice also provides information on how to request paper copies of our proxy materials if you prefer.materials. If you have previously requested a paper copy of the proxy materials, you will receive a paper copy of our proxy materials by mail. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials electronically unless you elect otherwise. If you receive more than one Notice, it means that your shares are registered in more than one name or are registered in different accounts. In order to vote the shares you own, you must vote pursuant to the instructions on each Notice.
Purpose of Annual Meeting
Shareholders entitled to vote at the Annual Meeting will consider and act upon the matters outlined in the notice of meeting accompanying this Proxy Statement, including the election of fourfive individuals to our Board of Directors, each to be elected for a three-year term expiring in 20242027 (Proposal 1); approval, by non-binding advisory vote, of the compensation of our named executive officers ("NEOs") (Proposal 2); to recommend, by non-binding advisory vote, the frequency of future executive compensation advisory votes (Proposal 3); and ratification of the appointment by the Audit Committee of our Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for the 20212024 fiscal year (Proposal 4)3).
Voting Securities and Record Date
Only shareholders of record at the close of business on Friday, March 12, 2021 ("8, 2024 (“Record Date"Date”), are entitled to vote at the meeting or any adjournment of the meeting. Each share is entitled to one vote.Meeting. Our outstanding capital stock entitled to vote at the meeting as of Friday, March 12, 2021,8, 2024, consisted of 186,758,154176,631,477 shares of our common stock, $0.01 par value per share. Each holder of record of our common stock on the Record Date is entitled to one vote per share of common stock held, except that, as provided in our Articles of Organization, and under applicable law, if anyonea person who beneficially owns more than 10% of our common stock without prior approvalshares will be entitled to cast only one one-hundredth (1/100th) of the Federal Reserve Board and the Massachusetts Commissioner of Banks, sharesa vote per share for each share in excess of the 10% will not be counted as shares entitled to vote.
limit.In accordance with our amended and restated bylaws ("Bylaws"(“Bylaws”) a list of shareholders of record as of the Record Date ("(“Shareholder List"List”) will be available for inspection by any shareholder, beginning two (2) business days after notice is given of the meetingMeeting and continuing through the Annual Meeting. The Shareholder List may be accessed during the Annual Meeting by contactingthrough the Corporate Secretary or by submitting an email to annualmeeting@easternbank.com and requesting access to the Shareholder List.virtual meeting platform. In addition, you may contact our Corporate Secretary by submitting an email to annualmeeting@easternbank.com and requesting a time to view the Shareholder List virtually, for any purpose germane to the Annual Meeting, between the hours of 9:00 a.m. and 5:00 p.m., local time, on any business day from Wednesday, April 7, 2021 up3, 2024, to the time of the Annual Meeting.
1
The Bylaws have not been amended since the completion of our initial public offering ("IPO").
The holders of a majority of the shares of our common stock that are issued and outstanding and entitled to vote at the meetingAnnual Meeting constitute a quorum for the transaction of business at the meeting.Annual Meeting. If a quorum is not present, the meetingAnnual Meeting will be adjourned until a quorum is obtained. For purposes of determining the presence or absence of a quorum, abstentions and broker non-votes will be counted as present. A “broker non-vote” is a proxy from a broker or other nominee indicating that such person has not received instructions from the beneficial owner on a particular matter with respect to which the broker or other
nominee does not have discretionary voting power. Brokers have the discretion to vote their clients’ proxies only on routine matters. At our Annual Meeting, only the ratification of our auditors is a routine matter.
Attending the Annual Meeting
We encourage ourinvite all shareholders as of the Record Date to attend the 2021 Annual Meeting, virtually. Please note the process required to access the meeting, which vary depending on the nature of your individual ownership interest:
will be held online. | | | | |
| | Virtual Meeting Registration and Attendance Process | | | | | | |
| Type of Ownership | | Nature of Ownership
| | Accessing• To attend the virtual Annual Meeting, you must first register at www.proxydocs.com/EBC. | | |
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| | • On this registration website, you will be asked to enter your name, email address and the unique Control Number found on the proxy materials you received. | | |
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| | • A link to the Annual Meeting Virtually |
Record Holder | Your shares are represented by ledger entries in your own name directly registered with our transfer agent, Continental Stock Transfer & Trust ("Continental") | Enter your unique shareholder Control Number (found on your Notice or proxy card)will be emailed to you on the registration webpage forday of the Annual Meeting to register for and gain access to the meeting |
Held in "Street Name"Meeting. | Your shares are held for your benefit in the name of a broker, bank or other intermediary | | •First, obtain a legal proxy from your broker, bank or other nominee reflecting the number of shares of our common stock you held as of the record date, your name and email address.
•Second, obtain a new control number from Continental, by presenting the legal proxy to Continental. You should submit a request for a new control number to Continental by emailing a copy of your legal proxy to proxy@continentalstock.com with a subject line "Eastern Bankshares Annual Meeting". Requests for registration must be received by Continental no later than 5:00 p.m. Eastern Time on May 14, 2021.
•Third, enter the newly-obtained control number on the registration webpage for the Annual Meeting to register for and gain access to the meeting.
Participant in Company's 401(k) Plan or ESOP | Your shares are held for your benefit in the name of an independent trustee of the applicable plan, namely the Company's 401(k) Plan and/or its Employee Stock Ownership Plan ("ESOP") | Enter your unique shareholder Control Number (found on your Notice or vote authorization form) on the registration webpage for the Annual Meeting to register for or gain access to the meeting.
Please note that the trustees of the applicable plans vote on behalf of plan participants, based on voting instructions received from participants. The deadline for providing voting instructions to the trustees is May 9, 2021. Plan participants may attend, but may not provide voting instructions at, the Annual Meeting.
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DueIf you own an interest in our common stock through the Company’s Employee Stock Ownership Plan (“ESOP”) or 401(k) Plan, you may register to state laws and our corporate safety protocols related to the COVID-19 pandemic, shareholders willattend, but may not be able to be presentvote at, our corporate office for the meeting. We encourage you to participate in the Annual Meeting virtually. Meeting.
Even if you plan to attend the virtual Annual Meeting, virtually, we encourage you to vote in advance by Internet, telephone, or mail so that your vote will be counted in the event that you later decide not to attend the Annual Meeting.
Each share of common stock you hold is entitled to one vote for or against a proposal. Shares entitled to be voted at the Annual Meeting can only be voted if the shareholder of record of such shares is present at the meeting (either in-person or virtually),Annual Meeting, returns a signed proxy card, or authorizes proxies to vote his or her shares by telephone or over the Internet. Shares represented by valid proxy will be voted in accordance with your instructions. If you choose to vote your shares by telephone or over the Internet, you may do so until the dates and times set forth below, by following the instructions on the proxy card or the Notice.
If you are a shareholder of record of our common stock as of the Record Date, you may vote in one of the following ways:
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| | By Internet | | by following the Internet or mobile voting instructions included in the proxy card and Notice until the close of polls at any time up until 11:59 p.m., Eastern Time, on Sunday, May 16, 2021.the Annual Meeting. | | |
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| | By Telephone | | by following the telephone voting instructions included in the proxy card and Notice until the close of polls at any time up until 11:59 p.m., Eastern Time, on Sunday, May 16, 2021.the Annual Meeting. | | |
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| | By Mail | | by marking, dating and signing your printed proxy card (if requested and received by mail) in accordance with the instructions on it and returning it by mail in the pre-addressedpre- addressed reply envelope provided with the proxy materials for receipt prior to the Annual Meeting. | | |
| By Internet | | |
| | Online during the Annual Meeting | | by followingattending the Internetvirtual Annual Meeting and voting instructions included inonline while the Notice or proxy card during the Annual Meetingpolls are open. | | |
You may revoke your proxy at any time before the shares are voted at the Annual Meeting by entering new voting instructions by telephone or over the Internet before 11:59 p.m. Eastern Time on Sunday, May 16, 2021,until the close of polls at the Annual Meeting, by written notice received by our Corporate Secretary before the Annual Meeting, by executing and returning a new proxy bearing a later date, or by voting atonline during the meeting.Annual Meeting. Attendance at the Annual Meeting without voting by ballot will not revoke a previously submitted proxy.
You may specify your choices by marking the appropriate box on the proxy card. If your proxy card is signed and returned without specifying choices, your shares will be voted in accordance with the recommendationsrecommendation of our Board of Directors and as the individuals named as proxy holders on the proxy card deem advisable on all other matters that may properly come before the meeting.Annual Meeting. The Board of Directors recommends that you vote for FOR the listed nominees for director; for FOR the approval of an advisory vote on compensation paid to our NEOs, for the approval of every one year as the frequency for shareholder advisory votes on executive compensation,NEOs; and for FOR ratification of the appointment by the Audit Committee of our Board of Directors of our independent registered public accounting firm.
firm for the 2024 fiscal year.Shareholders in "Street Name"
“Street Name” | | | | |
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| | If your shares are held in “street name” through a broker, bank or other intermediary, your broker, bank or other intermediary should give you instructions for voting your shares. In these cases, you may vote by internet, telephone or mail, as instructed by your broker, bank or other intermediary. | | |
If you hold your shares in “street name” through a broker, bank or other representative,name,” generally the broker or other representative may only vote the shares that it holds for you in accordance with your instructions. However, if the broker or other representative has not timely received your instructions, it may vote on certain matters for which it has discretionary voting authority.
Brokers have the discretion to vote their clients’ proxies only on routine matters.At our Annual Meeting, only the ratification of the appointment of our auditors is considered a routine matter. The vote on election of directors and the advisory vote on executive compensation and the advisory vote on the frequency of future executive compensation advisory votes are non-discretionary voting matters, and therefore your broker will not be able to vote on any of these matters without receiving your instructions. The vote to ratify the appointment of our independent registered public accounting firm is a discretionary matter and your broker has discretionary authority to vote on that proposal. Your broker or other representative will generally provide detailed voting instructions with your proxy materials. These instructions may include information on whether your shares can be voted by telephone or over the Internet and the manner in which you may revoke your votes. Please reach out to your broker, bank or other intermediary if you have not received such instructions or have questions.
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Participants in the Company'sCompany’s 401(k) Plan or ESOP
If you are a participant in the Company'sCompany’s ESOP or 401(k) Plan, you will receive a Notice by e-mail unless you otherwise requested to receive the Notice or by mail. Under the terms of these plans, the trustee or administrator votes all shares held by the plan, but each participant may direct the trustee or administrator how to vote the shares of our common stock allocated to his or her plan account. Using the control numberControl Number received inon your Notice, follow the instructions above (for "Shareholders“Shareholders of Record"Record”) to provide your voting instructions to the applicable plan trustee or administrator by Internet or telephone. If you own shares through any of these plans and you do not provide your voting instructions by 11:59 p.m., Eastern Time, on Sunday,Wednesday, May 9, 2021, 8, 2024, the respective plan trustees or administrators will vote your shares in accordance with the terms of the respective plans.
Please note that the deadline for plan participants tomust provide voting instructions by the specified deadline (May 9, 2021)8), which is one week earlier than the voting deadline for shareholders of record (May 16, 2021) (who may vote through the closing of the polls at the Annual Meeting). In addition, due to the earlier voting deadline for plan participants, you cannot provide your voting instructions at the Annual Meeting (either virtually or in-person).Meeting. However, you may still register for and attend the Annual Meeting and ask questions.
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| | Even if you plan to attend the virtual Annual Meeting, virtually, we encourage you
to vote in advance by Internet, telephone, or mail so that your vote will be counted
in the event that you later decide not to attend the Annual Meeting.
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Assuming a quorum is present at the Annual Meeting, the vote required to adopt each of the proposals is as follows:
•Election of Directors (Proposal 1). The election of directors is determined by a majority of the votes cast in person or by proxy by the shareholders entitled to vote on the election of directors in an uncontested election. Under our Bylaws, a nominee will be elected to the Board of Directors if the votes cast “for” the nominee’s election exceed the votes cast “against” the nominee’s election. Abstentions and broker non-votes are not counted as votes “for” or “against” a nominee and will have no effect upon the outcome of the vote on the election of directors.
•All Other Matters: Advisory Vote on Executive Compensation (Proposal 2); Advisory Vote on Frequency of Future Executive Compensation Advisory Votes (Proposal 3); and Ratification of the Appointment by the Audit Committee of our Board of Directors of Our Independent Registered Public Accounting Firm (Proposal 4). All other matters are determined by a majority of the votes cast by the holders of the shares present or represented by proxy at the Annual Meeting and voting on each matter. Under our Bylaws, abstentions and broker non-votes will have no effect on the determination of whether shareholders have approved these proposals.
| • | | Election of Directors (Proposal 1). The election of directors is determined by a majority of the votes cast in person or by proxy by the shareholders entitled to vote on the election of directors in an uncontested election. Under our Bylaws, a nominee will be elected to the Board of Directors if the votes cast “for” the nominee’s election exceed the votes cast “against” the nominee’s election. Abstentions and broker non-votes are not counted as votes “for” or “against” a nominee and will have no effect upon the outcome of the vote on the election of directors. |
| • | | All Other Matters: Advisory Vote on Executive Compensation (Proposal 2); and Ratification of the Appointment by the Audit Committee of our Board of Directors of Our Independent Registered Public Accounting Firm (Proposal 3). All other matters are determined by a majority of the votes cast by the holders of the shares present or represented by proxy at the Annual Meeting and voting on each matter. Abstentions and broker non-votes will have no effect on the determination of whether shareholders have approved these proposals. |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of shares of our common stock as of Friday, March 12, 2021,8, 2024, with respect to:
•those persons we know to beneficially own more than 5% of the outstanding shares of our common stock based on our review of filings made with the Securities and Exchange Commission ("SEC"(“SEC”);
•each of our NEOs directors, and director nominees;directors; and
•all of our directors and executive officers as a group.
Unless otherwise indicated, the address of any person or entity listed is c/o Eastern Bankshares, Inc., 265 Franklin125 High Street, Boston, MA 02110Massachusetts 02110. The applicable percentage of beneficial ownership is based on 186,758,154176,631,477 shares of our common stock outstanding as of March 12, 2021.
8, 2024. Beneficial ownership is determined in accordance with the rules of the SEC. Unless otherwise indicated, we believe, based on information furnished by such persons, that each person listed below has sole voting and investment power with respect to the shares of Company common stock shown as beneficially owned. Securities that may be beneficially acquired within 60 days of Friday, March 12, 20218, 2024 are deemed to be beneficially owned by the person holding such securities for the purpose of computing ownership of such person but are not treated as outstanding for the purpose of computing the ownership of any other person.
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| Name of Beneficial Owner | Director or Indirectly Held
(#)(1)(2) | Right to Acquire
(#)(3) | Total Amount and Nature of Beneficial Ownership of Common Stock
(#) | Percentage of Common Stock (%) |
| The Vanguard Group (4) | | | 15,889,055 | 8.51% |
| Principal Trust Company (5) | | | 14,940,652 | 8.00% |
| BlackRock, Inc. (6) | | | 11,466,094 | 6.14% |
| Richard C. Bane | 120,000 | - | 120,000 | * |
| Luis A. Borgen (7) | 100,000 | - | 100,000 | * |
| Joseph T. Chung | 50,000 | - | 50,000 | * |
| Paul M. Connolly | 12,500 | - | 12,500 | * |
| Bari A. Harlam (8) | 30,000 | - | 30,000 | * |
| Diane S. Hessan (9) | 42,000 | - | 42,000 | * |
| Richard E. Holbrook (8) | 196,500 | - | 196,500 | * |
| Deborah C. Jackson (10) | 32,500 | - | 32,500 | * |
| Peter K. Markell | 100,000 | - | 100,000 | * |
| Robert F. Rivers (11) | 200,104 | - | 200,104 | * |
| Greg A. Shell | 200,000 | - | 200,000 | * |
| Paul D. Spiess (12) | 100,000 | - | 100,000 | * |
| Quincy L. Miller (13) | 84,624 | - | 84,624 | * |
| James B. Fitzgerald (14) | 150,104 | - | 150,104 | * |
| All Directors and Executive Officers as a group (23 persons)(15) | 1,917,932 | - | 1,917,032 | 1.03% |
* Less than 1%
(1)The number of shares beneficially owned by each shareholder is determined under the rules of the SEC, and the information provided is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated, as determined under such rules, each shareholder has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares reported in this table. The inclusion of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of such shares.
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| Name of Beneficial Owner | | Directly or
Indirectly
Held
(#)(1)(2) | | | Right to
Acquire
(#)(3) | | | Total Amount and
Nature of Beneficial
Ownership of
Common Stock (#) | | | Percentage of
Common Stock
(%) | |
The Vanguard Group (4) | | | 16,382,980 | | | | — | | | | 16,382,980 | | | | 9.28 | % |
Principal Trust Company (5) | | | 14,916,134 | | | | — | | | | 14,916,134 | | | | 8.44 | % |
T. Rowe Price Investment Management, Inc. (6) | | | 13,230,563 | | | | — | | | | 13,230,563 | | | | 7.49 | % |
BlackRock, Inc. (7) | | | 12,590,988 | | | | — | | | | 12,590,988 | | | | 7.13 | % |
FMR LLC (8) | | | 11,023,954 | | | | — | | | | 11,023,954 | | | | 6.24 | % |
Richard C. Bane (9) | | | 189,747 | | | | — | | | | 189,747 | | | | * | |
Luis A. Borgen (10) | | | 82,328 | | | | — | | | | 82,328 | | | | * | |
Joseph T. Chung (11)(15) | | | 119,747 | | | | — | | | | 119,747 | | | | * | |
Paul M. Connolly (12) | | | 82,247 | | | | — | | | | 82,247 | | | | * | |
Bari A. Harlam (13)(15) | | | 76,097 | | | | — | | | | 76,097 | | | | * | |
Marisa J. Harney (14) | | | — | | | | — | | | | — | | | | * | |
Diane S. Hessan (16) | | | 111,747 | | | | — | | | | 111,747 | | | | * | |
Richard E. Holbrook (17) | | | 266,247 | | | | — | | | | 266,247 | | | | * | |
Deborah C. Jackson (15)(18) | | | 95,214 | | | | — | | | | 95,214 | | | | * | |
Peter K. Markell (19) | | | 169,747 | | | | — | | | | 169,747 | | | | * | |
Robert F. Rivers (15)(20) | | | 240,450 | | | | — | | | | 240,450 | | | | * | |
Paul D. Spiess (21) | | | 169,747 | | | | — | | | | 169,747 | | | | * | |
Linda M. Williams (22) | | | — | | | | — | | | | — | | | | * | |
Quincy L. Miller (23) | | | 99,989 | | | | — | | | | 99,989 | | | | * | |
James B. Fitzgerald (24) | | | 176,725 | | | | — | | | | 176,725 | | | | * | |
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| Name of Beneficial Owner | | Directly or
Indirectly
Held
(#)(1)(2) | | | Right to
Acquire
(#)(3) | | | Total Amount and
Nature of Beneficial
Ownership of
Common Stock (#) | | | Percentage of
Common Stock
(%) |
Donald M. Westermann (25) | | | 38,633 | | | | — | | | | 38,633 | | | * |
Kathleen C. Henry (26) | | | 38,636 | | | | — | | | | 38,636 | | | * |
Timothy J. Lodge (27) | | | 35,991 | | | | — | | | | 35,991 | | | * |
All Directors and Executive Officers as a group (19 persons) (28) | | | 2,030,874 | | | | — | | | | 2,030,874 | | | 1.15% |
| (1) | The number of shares beneficially owned by each shareholder is determined under the rules of the SEC, and the information provided is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated, as determined under such rules, each shareholder has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares reported in this table. The inclusion of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of such shares. |
| (2) | For executive officers, shares directly or indirectly held includes shares held by the Company’s ESOP, including the amounts of 2,793 shares for each of our NEOs. Fractional shares have been rounded down. |
| (3) | Consists of shares of the Company’s common stock which the named individual or group has the right to acquire within 60 days of Friday, March 8, 2024. |
| (4) | Based upon information regarding Company holdings reported by way of Amendment No. 3 to a Schedule 13G filed with the SEC on February 13, 2024, by The Vanguard Group (“Vanguard”). The address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355. Vanguard reported that, as of December 31, 2023, it had shared voting power over 137,253 shares; sole dispositive power over 16,081,993 shares; and shared dispositive power over 300,987 shares. Vanguard beneficially owns the Company holdings disclosed in the table above in its capacity as an investment advisor. |
| (5) | Based upon information regarding Company holdings reported by way of Amendment No. 3 to a Schedule 13G filed with the SEC on February 9, 2024, by Delaware Charter Guarantee & Trust Company dba Principal Trust Company as Directed Trustee (“Trustee”) of the ESOP. The Trustee reported that, as of December 31, 2023, it held 14,916,134 shares of the Company’s common stock, as to which it had both shared voting power and shared dispositive power and as to which it disclaims beneficial ownership. The address of the Trustee is 1013 Centre Road Ste 300, Wilmington DE 19805-1265. The ESOP is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). The Trustee follows the directions of the investment fiduciary named in the ESOP or other parties designated in the ESOP’s trust agreement with respect to voting and disposition of shares and is subject to certain fiduciary duties under ERISA. |
| (6) | Based upon information regarding Company holdings reported by way of a Schedule 13G filed with the SEC on February 14, 2024, by T. Rowe Price Investment Management, Inc (“T. Rowe Price”). The address of T. Rowe Price is 101 E. Pratt Street, Baltimore, MD 21201. T. Rowe Price reported that, as of December 31, 2023, it had sole voting power over 4,710,089 shares and sole dispositive power over 13,230,563 shares. T. Rowe Price beneficially owns the Company holdings disclosed in the table above in its capacity as an investment advisor. |
| (7) | Based upon information regarding Company holdings reported by way of Amendment No. 3 to a Schedule 13G filed with the SEC on January 26, 2024, by BlackRock, Inc. The address of BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. BlackRock, Inc., which filed as a parent holding company, reported that, as of December 31, 2023, it had sole voting power and sole dispositive power over 12,245,822 and 12,590,988 shares, respectively. |
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(2)For executive officers, shares directly or indirectly held includes shares held by the Company's ESOP, including in the amounts of 104 shares for each of Mr. Rivers, Mr. Miller and Mr. Fitzgerald, respectively. Fractional shares have been rounded down. | (8) | Based upon information regarding Company holdings reported by way of a Schedule 13G filed with the SEC by FMR LLC, on February 8, 2024. The address of FMR LLC is 245 Summer Street, Boston, MA 02210. FMR LLC reported that, as of December 29, 2023, it, as a parent holding company/control person, and Abigail P. Johnson, Director, Chairman, and Chief Executive Officer of FMR LLC, as an individual, each had sole dispositive power over 11,023,954 shares. FMR LLC had sole voting power over 11,018,681 shares. Fidelity Management & Research Company LLC, a subsidiary of FMR LLC, beneficially owned 5% or more of the shares reported in its capacity as an investment advisor. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners of Series B voting common shares representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shares have entered into a shareholders’ agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed to form a controlling group with respect to FMR LLC. |
| (9) | Consists of (i) 147,707 shares held directly and (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements. |
| (10) | Consists of (i) 40,288 shares held directly and (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements. |
| (11) | Consists of (i) 77,707 shares held directly and (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements. |
| (12) | Consists of (i) 40,207 shares held directly and (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements. |
| (13) | Consists of (i) 21,557 shares held directly; (ii) 12,500 shares held in joint tenancy with spouse; and (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements. |
| (14) | Ms. Harney joined our Board in October 2023 and had no share ownership as of the record date. |
| (15) | Excludes 5,759,427 shares of Company common stock beneficially owned by the Eastern Bank Foundation (“Foundation”) as of March 8, 2024, as to which the director shares investment power as a trustee of the Foundation. The Company donated such shares in connection with its initial public offering (“IPO”). The Foundation is a charitable trust under Massachusetts law. It is organized exclusively for charitable purposes, and its trust instrument provides that no part of the Foundation’s net earnings will inure to the benefit of or be payable to any private shareholder or individual. As required by Federal Reserve Board regulations, all shares of Company common stock held by the Foundation must be voted in the same ratio as all other shares of the Company common stock on all proposals considered by the Company’s shareholders. |
| (16) | Consists of (i) 67,707 shares held directly; (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements; and (iii) 2,000 shares held by Crimson Seed Capital, LLC, which is controlled by Ms. Hessan’s spouse and as to which Ms. Hessan disclaims beneficial ownership except to the extent of any pecuniary interest therein. |
| (17) | Consists of (i) 27,707 shares held directly; (ii) 196,500 shares held in joint tenancy with spouse; and (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements. |
| (18) | Consists of (i) 34,174 shares held directly; (ii) 19,000 shares held in an IRA; and (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements. |
| (19) | Consists of (i) 127,707 shares held directly and (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements. |
| (20) | Consists of (i) 37,657 shares held directly; (ii) 200,000 shares held in joint tenancy with spouse; and (iii) 2,793 shares held by the Company’s ESOP. |
| (21) | Consists of (i) 77,707 shares held directly; (ii) 50,000 shares held by spouse; and (ii) 42,040 shares of restricted stock that are subject to applicable vesting requirements. |
| (22) | Ms. Williams joined our Board in October 2023 and had no share ownership as of the record date. |
| (23) | Consists of (i) 12,676 shares held directly; (ii) 83,240 shares held through IRAs; (iii) 1,280 shares held by spouse’s IRA, and (iv) 2,793 shares held by the Company’s ESOP. |
| (24) | Consists of (i) 22,723 shares held directly; (ii) 18,978 shares held in a 401(k) Plan account; (iii) 132,231 shares held in joint tenancy with spouse; and (iv) 2,793 shares held by the Company’s ESOP. |
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(3)Consists of shares of the Company's common stock which the named individual or group has the right to acquire within 60 days of March 12, 2021.
(4)The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. The Vanguard Group filed as the parent holding company of Vanguard Asset Management, Limited; Vanguard Fiduciary Trust Company; Vanguard Global Advisors, LLC; Vanguard Group (Ireland) Limited; Vanguard Investments Australia Ltd; Vanguard Investments Canada Inc.; Vanguard Investments Hong Kong Limited; and Vanguard Investments UK, Limited. The information about The Vanguard Group is based on its Schedule 13G filed with the SEC on February 10, 2021, and is as of December 31, 2020.
(5)The address of Principal Trust Company is 1013 Centre Road Ste 300, Wilmington DE 19805-1265. The ESOP is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). Delaware Charter Guarantee & Trust Company dba Principal Trust Company acts as the Directed Trustee of the ESOP (“Trust”). As of December 31, 2020, the Trust held 14,940,652 shares of the Company's common stock. The securities reported include all shares held of record by the Trustee. The Trustee follows the directions of the investment fiduciary named in the ESOP, or other parties designated in the ESOP’s trust agreement with respect to voting and disposition of shares. The Trustee, however, is subject to certain fiduciary duties under ERISA as limited in the trust agreement. The Trustee disclaims beneficial ownership of the shares of common stock that are the subject of the Schedule 13G filed with the SEC by Principal Trust Company on February 11, 2021, which is as of December 31, 2020.
(6)The address of BlackRock, Inc. is 55 East 52nd Street New York, NY 10055. BlackRock, Inc. filed as the parent holding company of BlackRock Advisors, LLC; BlackRock Asset Management Canada Limited; BlackRock Fund Advisors; BlackRock Institutional Trust Company, National Association; BlackRock Financial Management, Inc; and BlackRock Investment Management, LLC. The information about BlackRock, Inc. is based on its Schedule 13G filed with the SEC on February 2, 2021, and is as of December 31, 2020.
(7)Consists of (i) 53,730 shares held directly and (ii) 46,270 shares held in an individual retirement account ("IRA").
(8)Shares held in joint tenancy with spouse.
(9)Consists of (i) 40,0000 shares held directly; and (ii) 2,000 shares held by Crimson Seed Capital, LLC, which is controlled by Ms. Hessan's spouse and of which Ms. Hessan disclaims beneficial ownership except to the extent of any pecuniary interest therein.
(10)Consists of (i) 13,500 shares held directly and (ii) 19,000 shares held in an IRA.
(11)Consists of (i) 200,000 shares held in joint tenancy with spouse and (ii) 104 shares held by the Company's ESOP.
(12)Consists of (i) 50,000 shares held directly and (ii) 50,000 shares held by spouse.
(13)Consists of (i) 83,240 shares held through IRAs, (ii) 1,280 shares held by spouse's IRA, and (iii) 104 shares held by the Company's ESOP.
(14)Consists of (i) 17,769 shares held in Mr. Fitzgerald's 401(k) plan account, (ii)132,231 shares held in joint tenancy with spouse, and (iii) 104 shares held by the Company's ESOP.
(15)Includes (i) 1,361,241 shares held directly or indirectly with spouse or spouse's entity; (ii) 227,510 shares in IRAs, (iii) 327,033 shares held in 401(k) plan accounts, and (iv) 1,248 shares held by the Company's ESOP.
| (25) | Consists of (i) 14,480 shares held directly; (ii) 21,360 shares held in a 401(k) Plan account; and (iii) 2,793 shares held by the Company’s ESOP. |
| (26) | Consists of (i) 14,483 shares held directly; (ii) 21,360 shares held in a 401(k) Plan account; and (iii) 2,793 shares held by the Company’s ESOP. |
| (27) | Consists of (i) 18,247 shares held directly, (ii) 15,855 shares held in 401(k) Plan account, and (iii) 1,889 shares held by the Company’s ESOP. Shares reported for Mr. Lodge are as of October 31, 2023, his final day of employment with the Company. |
| (28) | Includes (i) 1,825,098 shares held directly or indirectly with spouse or as custodian for the benefit of a family member; (ii) 102,240 shares held in IRAs, (iii) 84,890 shares held in 401(k) Plan accounts, and (iv) 18,646 shares held by the Company’s ESOP. Dividends paid on shares held by participants in 401(k) Plan and ESOP accounts are automatically reinvested to acquire additional shares of Company stock. Shares forfeited by ESOP participants are reallocated to remaining participants based on eligible compensation, in the same manner that shares are allocated for such year. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, executive officers and beneficial owners of more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our securities. Based solely upon a review of these filings, all Section 16(a) filing requirements applicable to such persons were complied with during 20202023 on a timely basis.
6basis, with the following exception: a Form 4 for Gregory P. Buscone in connection with 401(k) investment rebalancing activity was untimely filed on December 21, 2023.8
OurCurrently, our Board of Directors is divided into three classes of directors serving staggered three-year terms, with each class being as equal in number as possible. Directors for each class are elected at the annual meeting of shareholders held in the year in which the term for their class expires. We have fourFive directors who are standing for election at the Annual Meeting. If re-elected, each director nominee would hold office until our annual meeting of shareholders in 2024 and thereafter until his or her respective successor has been elected.
Based on the recommendation of ourits Nominating and Governance Committee, our Board of Directors has nominated Richard C.Messrs. Bane, Joseph T. Chung, Paul M.and Connolly and Bari A.Mses. Harlam and Harney for election as directors for the three-year term expiring at the 20242027 annual meeting of shareholders. Messrs. Bane, Chung, and Connolly and Ms.Mses. Harlam and Harney are each currently a membermembers of our Board of Directors. If any nominee becomes unable to serve as a director, the proxy holders may vote the proxy for the election of a substitute nominee to be designated by our Board of Directors. We do not expect that any nominee will be unable to serve. Directors serve until the expiration of their terms and until their successors have been elected and qualified or until their earlier retirement or their resignation, death or removal in accordance with our Bylaws.
In accordance with an amendment approved by our shareholders in 2022, our Articles of Organization have been amended to provide that for our annual meetings of shareholders in 2025 and 2026, the classes of directors whose terms expire at those meetings will be nominated for re-election for two- and one-year terms, respectively, and our Board of Directors will be fully declassified, with all directors standing for annual election, beginning with the Company’s 2027 annual meeting of shareholders.
Recommendation
As described below, eachEach of our nominees has considerable professional and business expertise. Our Board of Directors recommends a vote “
FOR”“FOR” each nominee based on its carefully considered judgment that the experience, qualifications, attributes and skills of each nominee qualify him or her to serve on our Board of Directors and its belief that the election of Messrs. Bane, Chung, and Connolly and Ms.Mses. Harlam and Harney as directors is in the best interests of ourthe Company.Information regarding the names, ages, principal occupationsexperience and employment during the past five yearsqualifications of each of our directors, including our five director nominees, is provided below. We have also included information about each director’s specific experience, qualifications, attributes or skills that led the Board of Directors to conclude that he or she should serve as a director. Unless we have specifically noted below, no corporation or organization referred to below is a subsidiary or affiliate of the Company. There are no family relationships among any of our directors and executive officers. Information on the stock ownership of our directors is provided in this Proxy Statement under the heading “Security Ownership of Certain Beneficial Owners and Management”. Information regarding the compensation of our directors is provided in this Proxy Statement under the heading “Director Compensation.”
Nominees for Class I DirectorDirectors for the Three-Year Term That Will Expire in 2024
2027 | | | | | | | | |
Richard C. Bane Age 68 | | Experience |
Age 65 | Richard C. Bane has served as a director of Eastern Bank since 2001 and as a trustee of its predecessor holding company, Eastern Bank Corporation, since 1996. He is the Chairman and Chief Executive OfficerChairman of Bane Care Management LLC, which operates skilled nursing facilities and assisted living facilities in Massachusetts, where he has beenwas employed since 1994.from 1984 through February 2023. Mr. Bane formerly served as Chairman of the Massachusetts Senior Care Association, the state’s largest professional provider group, and chairs that organization’s Payment Reform Task Force and Legislative Committees.group. He lectures frequently on many aspects of senior care services and post-acute care and is considered one of New England’s senior care industry leaders. Mr. Bane is also involved in a wide range of corporate and community service activities. Heactivities, and he is also a Boardboard member of Targeted Risk Assurance Company and Steward Carney Hospital in Dorchester, MA. Mr. Bane holds an A.B. in Economics from Dartmouth College, and an MBA from Harvard Business School. He was also awarded an Honorary Doctorate from Salem State University. Qualifications |
| Qualifications |
| We believe Mr. Bane’s extensive executive management experience and civic leadership qualify him to serve on our Board of Directors. |
| | | | | | | | |
Joseph T. Chung Age 59 | | Experience |
Age 56 | Joseph T. Chung has served as a director of Eastern Bank and trustee of its predecessor holding company, Eastern Bank Corporation, since 2014. He is co-founder and CEOChief Executive Officer of Kinto, a care coaching platform for family caregivers looking after loved ones with Alzheimer’s Disease and related dementias, where he has served since 2019. He is also co-founder and Managing Director of Redstar Ventures, an innovative venture foundry developing a series of new companies through a topdown, market driven process, positions he has held since 2010. Prior to Kinto and Redstar, Mr. Chung was Chairman and CEOChief Executive Officer of Allurent and co-founder, Chairman and Chief Technology Officer of Art Technology Group, a publicly traded, global enterprise software company. Mr. Chung holds B.S. and M.S. degrees in Computer Science from the Massachusetts Institute of Technology, and he conducted his graduate work at MIT’s Media Lab. He is a Venture Partner at the Media Lab’s E14 Fund. Qualifications |
| Qualifications |
| We believe Mr. Chung’s extensive expertise in innovation and technology qualifies him to serve on our Board of Directors. |
| | | | | | | | |
| Paul M. Connolly Age 74 | | Experience |
Age 71 | Paul M. Connolly has served as a director of Eastern Bank and a trustee of its predecessor holding company, Eastern Bank Corporation, since 2011. Mr. Connolly retired in 2010 as the First Vice President and Chief Operating Officer at the Federal Reserve Bank of Boston, a position he had held since 1994. As Chief Operating Officer of the Federal Reserve Bank of Boston, Mr. Connolly had the responsibility for the Bank’s financial services, information technology, finance, and support and administrative activities. Mr. Connolly joined The Federal Reserve Bank in 1975. Throughout his 36-year career, he served in a variety of positions in information technology, payments, planning and economic research, served on the Federal Reserve Financial Services Policy Committee and had national leadership responsibility for payment services and financial management. He currently servesserved on the boardBoard of directorsDirectors for the John Hancock Life Insurance Company andCompanies for twelve years prior to retiring in June 2023. He received an MBA from Harvard Business School and an A.B. from Boston College. Qualifications |
| Qualifications |
| We believe Mr. Connolly’s extensive banking and regulatory experiences qualify him to serve on our Board of Directors. |
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| | | | | | | | |
Bari A. Harlam Age 62 | | Experience |
Age 59 | Bari A. Harlam has served as a director of Eastern Bank and a trustee of its predecessor holding company, Eastern Bank Corporation, since 2014. Ms. Harlam is the co-founder of Trouble, LLC, a position she has held since April 2020, and currently serveshas served as a member of the Boards of Directors of Aterian, Inc., since February 2020; OneWater Marine, Inc., since May 2020; and Rite Aid Corporation since August 2020. She also served on the Board of Directors of the Mohawk Group, Inc., Champion Petfoods, LP, OneWater Marine, Inc., and Rite Aid Corporation.LP. From April 2018 to March 2020, Ms. Harlam served as the Chief Marketing Officer for Hudson'sHudson’s Bay Company. Prior to that, she served as the Executive Vice President of Membership, Marketing, and Analytics for BJ'sBJ’s Wholesale Club, beginning in 2012. Before that, she was Chief Marketing Officer at Swipely, a technology startup, and served as Senior Vice President of Marketing for CVS Health Corporation. Ms. Harlam serves on the Board of Trustees of the Eastern Bank Foundation. Ms. Harlam has also served on the faculties of The Wharton School at the University of Pennsylvania, Columbia University'sUniversity’s Graduate School of Business, and the University of Rhode Island. She received her B.S., M.S., and Ph.D. from the University of Pennsylvania, The Wharton School of Business. Her work has been published in a variety of journals including Marketing Science, Journal of Marketing Research, and the Journal of Business Research. Qualifications |
| Qualifications | |
| We believe Ms. Harlam'sHarlam’s extensive marketing and analytics expertise qualifies her to serve on our Board of Directors. |
| | |
Marisa J. Harney Age 66 | | Experience |
| Marisa J. Harney has served as a director of the Company and Eastern Bank since October 2023. She most recently served as Executive Vice President and Chief Credit Officer of First Citizens BancShares, Inc. and its bank subsidiary First-Citizens Bank & Trust Company (collectively, “First Citizens”) from January 2022 through March 2023. She previously served as Executive Vice President and Chief Credit Officer of CIT Group Inc. and CIT Bank, N.A. (“CIT”), from 2018 through January 2022, when CIT merged with First Citizens, and as CIT’s Chief Credit Officer prior to that. Her 42 years of banking experience also includes roles as Chief Risk Officer of GE Capital Americas and Head of Corporate Credit Risk of the Americas for Bank of America, as well as senior credit risk positions with Credit Suisse First Boston, JPMorgan Chase & Co., and Bankers Trust Company. She holds an MBA from the New York University Stern School of Business and a bachelor’s degree in finance from Fordham University. Qualifications |
| We believe Ms. Harney’s extensive banking and risk management leadership experience qualify her to serve on our Board of Directors. |
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Our directors listed below are not up for election this year, and each will continue in office for the remainder of his or her specified term of office or until his or her earlier resignation, death, or removal in accordance with our Bylaws.
8Class III Directors Continuing in Office (Term will expire in 2026)
| | |
Luis A. Borgen Age 54 | | Experience |
| Luis Borgen has served as a director of Eastern Bank and a trustee of its predecessor holding company, Eastern Bank Corporation, since 2016. From September 2019 through April 2022, he was Chief Financial Officer for athenahealth, Inc., a leading SaaS provider of healthcare software that automates and manages revenue cycle management and electronic health records for physician practices and health systems. Prior to that, he was Chief Financial Officer for Vistaprint, an e- commerce company that produces marketing products for small businesses. Previously, he served as Chief Financial Officer for two publicly traded companies: DAVIDsTEA (from 2012-2017) and DaVita Inc. (from 2010-2012). Beginning in 1997, Mr. Borgen served in increasing roles of responsibility at Staples, Inc., leading to his appointment as Senior Vice President, Finance for the U.S. Retail business. He has served on the Boards of Directors of Carter’s, Inc., since November 2021 and Synopsys, Inc., since May 2022. Mr. Borgen served in the U.S. Air Force from 1992 to 1997 and attained the rank of Captain. He holds a B.S. in Management from the United States Air Force Academy, an M.S. in Finance from Boston College and an MBA with Honors from the University of Chicago Booth School of Business. Qualifications |
| We believe Mr. Borgen’s experience with financial accounting matters and oversight of the financial reporting process of public companies qualifies him to serve on our Board of Directors. |
| | |
Diane S. Hessan Age 69 | | Experience |
| Diane S. Hessan has served as a director of Eastern Bank and a trustee of its predecessor holding company, Eastern Bank Corporation, since 2016. She currently serves as Chief Executive Officer of Salient Ventures, an investment and advisory company with a portfolio of angel investments focused on technology companies, a position she has held since November 2016. Previously, she was Chief Executive Officer of Startup Institute, which is dedicated to helping people transform their careers to succeed in the innovation economy. She is also Chairman of C Space, where she was Founder and Chief Executive Officer for 14 years. C Space (formerly Communispace) is a market research company, which builds online communities to help marketers generate consumer insights. Ms. Hessan has served on the boards of Brightcove since March 2017 and DP Cap Acquisition Corp I since November 2021. Ms. Hessan also serves on the boards of Tufts University, Panera Brands, Sago, and Beth Israel Deaconess Medical Center. Ms. Hessan received her MBA from Harvard Business School and her B.A. in Economics and English from Tufts University. She has also received Honorary Doctorate degrees from Bentley University and the New England College of Business. Qualifications |
| We believe Ms. Hessan’s executive experience, entrepreneurial passion and customer-centric, data driven perspective qualify her to serve on our Board of Directors. |
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| | |
Robert F. Rivers Age 59 | | Experience |
| Robert F. Rivers is the Chief Executive Officer and Chair of the Board of Directors of Eastern Bankshares, Inc. and has served as the Chief Executive Officer and Chair of the Board of Directors of Eastern Bank since January 1, 2017. Mr. Rivers joined Eastern Bank in 2006 as its Vice Chair and Chief Banking Officer, becoming President in 2007, Chief Operating Officer in 2012 and an Eastern Bank director in 2015. He has also served as a trustee of Eastern Bank’s predecessor holding company, Eastern Bank Corporation, since 2007. Prior to joining Eastern, from 1991 to 2005, Mr. Rivers held a number of staff and line leadership positions at M&T Bank in Buffalo, NY. Immediately prior to joining Eastern, he was an Executive Vice President for Retail Banking at the former Commercial Federal Bank in Omaha, Nebraska, following 14 years at M&T Bank. Mr. Rivers serves as Foundation Board Chair of the Dimock Center, is a member of the executive committee of the Greater Boston Chamber of Commerce, and is a trustee of Stonehill College. He also serves on the Board of the Lowell Plan, the Advisory Boards of the Lawrence Partnership and the JFK Library Foundation, and the Boston Women’s Workforce Council. He was appointed by the Federal Reserve Bank of Boston as its Federal Advisory Council Representative in January 2023. A leader in Boston’s business community, Mr. Rivers has been recognized as a champion for social justice issues, having led the “Yes on 3” campaign to protect the rights of members of the LGBTQ+ community. He received his undergraduate degree from Stonehill College and holds an MBA from the University of Rochester. Qualifications |
| We believe that Mr. Rivers is qualified to serve as a director based upon his experience as our Chief Executive Officer beginning in January 2017, his prior service as one of our senior executive officers, his prior senior management positions at other banks, and his familiarity with the communities that Eastern serves, including through his involvement with numerous non-profit organizations in the greater Boston area. |
| | |
Paul D. Spiess Age 74 | | Experience |
| Paul D. Spiess has served as a director of Eastern Bank and a trustee of its predecessor holding company, Eastern Bank Corporation, since 2014. He has spent fifty-two years in the banking and financial services industry, serving as former Chairman of the Board of Centrix Bank and Trust, which merged with Eastern in 2014. He also served as Executive Vice President and Chief Operating Officer of CFX Bank in Keene, New Hampshire from 1993 to 1997. From 2004 to 2010, Mr. Spiess served (pro-bono) in the office of the Governor of New Hampshire as an insurance and banking advisor. From 2000 to 2004, he served as a state legislator in Concord, New Hampshire, during which time he served on the House Commerce Committee. From 1983 to 1993, Mr. Spiess was Founder and President of Colonial Mortgage, Inc., of Amherst, New Hampshire. From 2004 through 2010, Mr. Spiess served as a health care advisor to New Hampshire Governor John Lynch and as Chairman of the Citizen’s Health Initiative. He graduated with a B.A. from Colby College in 1971 and earned an MBA degree from Boston University in 1977. Qualifications |
| We believe Mr. Spiess’s extensive knowledge of banking operations and credit risk, his experience in the banking and mortgage industries, and his board leadership experience qualify him to serve on our Board of Directors. |
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Class II Directors Continuing in Office (Term Will Expire in 2022)
2025) | | | | | | | | |
Richard E. Holbrook Age 72 | | Experience |
Age 69 | Richard E. Holbrook currently serves as director and Chair Emeritus of Eastern Bank. Mr. Holbrook retired as Chair and Chief Executive Officer of Eastern Bank in 2016, having served in those roles since 2007. He also served as a trustee of its predecessor holding company, Eastern Bank Corporation, since 2001. Mr. Holbrook joined Eastern Bank in 1996 as Chief Financial Officer and Executive Vice President and was named President and Chief Operating Officer of Eastern Bank and Eastern Bank Corporation in 2001. He has more than 2530 years of banking experience as a commercial lender, trust officer and planning and financial manager. During his leadership at Eastern, Mr. Holbrook served as the Federal Advisor Council representative for the First Federal Reserve District, meeting quarterly to discuss business and financial conditions with the Federal Reserve Board of Governors in Washington, D.C. Mr. Holbrook also served on the Board of Directors of the Federal Reserve Bank of Boston, and on the executive committee of the Boston Chamber of Commerce. He is also the former chair of the Massachusetts Bankers Association. He received his undergraduate degree from Yale University and his MBA from Harvard Business School. Qualifications |
| Qualifications | |
| We believe Mr. Holbrook’s experience working in the banking industry, particularly his decades of past experience onas a member of our executive management team, qualifies him to serve on our Board of Directors. |
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Deborah C. Jackson Age 72 | | Experience |
Age 69 | Deborah C. Jackson, the Lead Director of Eastern Bank, has served as a director of Eastern Bank since 2000 and as a trustee of its predecessor holding company, Eastern Bank Corporation, since 2001. She servesserved as the President of Cambridge College in Cambridge Massachusetts, a position she has held since 2011.from 2011 through December 2023. Prior to that, Ms. Jackson served for nearly a decade as CEOChief Executive Officer of the American Red Cross of Eastern Massachusetts, one of the nation'snation’s largest Red Cross units. Prior to that,Previously, she served as Vice President of the Boston Foundation, where she managed its $50 million grant and initiatives program. Throughout her career, Ms. Jackson has served and continues to serve on numerous commissions, task forces and boards including the Boston Green Ribbon Commission;Commission; the Mayor'sMayor’s Task Force to Eliminate Racial and Ethnic Disparities in Health Care;Care; the "City“City to City"City” program focusing on national and global best practices for urban policies;policies; and the American Red Cross National Diversity Advisory Council. Ms. Jackson served for over 15 years on the board of the American Student Assistance Corporation, the nation'snation’s first student loan guarantor agency;agency; and she has served on the Boston College Carroll School of Management'sManagement’s Advisory Board and the boards of Milton Academy and Harvard Pilgrim Health Care. She also served as Chairman of the Board of Directors of the Association of Independent Colleges and Universities in Massachusetts and was a board member of the New England Chapter of The National Association of Corporate Directors. In addition, Ms. Jackson served as the Chair of the Audit Committee and on the Board of Directors of the Boston Stock Exchange. She currently serves on the BoardBoards of Directors of John Hancock Investments and the Amwell Corporation, where she has served since October 2020. Ms. Jackson also serves on the boardBoard of Trustees of the Amwell Corporation.Eastern Bank Foundation. Ms. Jackson attended Hampton University, graduated from Northeastern University with a B.A. and she pursued graduate studies in urban studies and planning from the Massachusetts Institute of Technology. Ms. Jackson is also the recipient of Honorary Doctorate degrees from Curry College and Merrimack Valley College. Ms. Jackson was a fellow of the British American Project of Johns Hopkins University and previously served as a fellow of the Harvard University Advanced Leadership Institute and the Harvard University Institute for College Presidents. Qualifications |
| Qualifications | |
| We believe Ms. Jackson'sJackson’s extensive executive, civic, community and board leadership experience qualifies her to serve on our Board of Directors. |
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Peter K. Markell Age 68 | Experience | Experience |
Age 65 | Peter K. Markell has served as a director of Eastern Bank and a trustee of its predecessor holding company, Eastern Bank Corporation, since 2006. He ishas been Executive Vice President and Chief Financial Officer of Lifespan Health Systems since January 2023. Until March 2021, he served as Executive Vice President of Administration and Finance, Chief Financial Officer and Treasurer for Mass General Brigham. HeBrigham, which he had joined Mass General Brigham in 1999. Prior to that, he was a partner at Ernst & Young LLP. A Certified Public Accountant, Mr. Markell is a Boston College graduate with a B.A. in Accounting and Finance and serves on the Boston College Board of Boston CollegeTrustees, where he has served as both chairmanChairman of the Board and Chairman of the Finance Committee. Mr. Markell also currently serves on the Board of Directors of Huron Consulting Group Inc., where he is a member of its Audit and Technology and Information Security Committees, and CodaMetrix, a medical coding software platform. Qualifications |
| Qualifications | |
| We believe Mr. Markell’s extensive executive, accounting, and board leadership experience qualify him to serve on our Board of Directors. |
| | |
| Linda M. Williams Age 63 | | | | | | | | Experience |
Greg A. Shell | Experience | |
Age 45 | Greg A. ShellLinda M. Williams has served as a director of the Company and Eastern Bank and a trustee of its predecessor holding company, Eastern Bank Corporation, since 2018. Prior to joining the Board, he served on the Bank’s Investment Advisory committee. Since 2016, Mr. Shell has served as Managing Director of Bain Capital, coleading the Double Impact Fund, Bain Capital’s private equity fund focused on social impact. Prior to joining Bain Capital, Mr. Shell was a Portfolio Manager at Grantham, Mayo, Van Otterloo (“GMO”), a global investment management firm. Prior to that, he was a Senior Equity Analyst in the Global Equity Research group at Columbia Management Group, a global investment management firm. Mr. Shell has served on the New England Advisory
Committee of the Federal Reserve Bank of Boston, and as a Director at Harvard Pilgrim Health Care, Fiduciary Trust, Massachusetts General Hospital and the Boston Foundation. Mr. Shell earned his MBA from Harvard Business School and received a B.S. from the Massachusetts Institute is Technology. |
| Qualifications | |
| We believe Mr. Shell’s financial and investment experience, as well as his civic leadership qualifies him to serve on our Board of Directors. |
Class III Directors Continuing in Office (Term Will Expire in 2023)
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Luis A. Borgen | Experience | |
Age 51 | Luis A. Borgen has been a director of Eastern Bank and a trustee of its predecessor holding company, Eastern Bank Corporation, since 2016. Since 2019, he has been the Chief Financial Officer for athenahealth, Inc., a leading cloud-based developer and provider of healthcare software that automates and manages revenue cycle management and electronic health records for physician practices and health systems. Prior to that, he was Chief Financial Officer for Vistaprint, an e-commerce company that produces marketing products for small and micro businesses. Prior to that, heOctober 2023. She most recently served as Chief FinancialRisk and Audit Officer and Senior Vice President for two publicly traded companies: DAVIDsTEA (from 2012-2017)Blue Cross Blue Shield of Massachusetts (“BCBS”), with oversight of strategic enterprise risk management, internal audit, and DaVita Inc. (from 2010-2012). Beginning in 1997, Mr. Borgeninformation security, from January 2017 through January 2024. She previously served in increasing roles of responsibility at Staples, Inc. leading to his appointment as Senior Vice President Financeand Chief Underwriter for BCBS starting in 2010 after joining the U.S. Retail business. He servedcompany in the U.S. Air Force from 19922008. Prior to 1997 and attained the rank of Captain. Mr. Borgen holds a B.S. in Management from the United States Air Force Academy, an M.S. in Finance from Boston College and an MBA with Honors from the University of Chicago. Mr. Borgen is also a CFA charterholder. |
| Qualifications | |
| We believe Mr. Borgen’s experience with financial accounting matters and oversight of the financial reporting process of public companies qualifies him to serve on our Board of Directors. |
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Diane S. Hessan | Experience | |
Age 66 | Diane S. Hessan hasthat, she served as a director of Eastern BankSenior Consultant with Medwise Partners, a health insurance company consulting firm, and held underwriting leadership roles for Magellan Behavioral Health and Aetna, Inc. She has been a trustee of its predecessor holding company, Eastern Bank Corporation, since 2016. She currently serves as CEO of Salient Ventures, an investment and advisory company with a portfolio of angel investments focused on technology companies, a position she has held since November 2016. Previously, she was CEO of Startup Institute, which is dedicated to helping people transform their careers to succeed in the innovation economy. She is also Chairman of C Space, where she was Founder and CEO for 14 years. C Space (formerly Communispace) is a market research company, which builds online communities to help marketers generate consumer insights. Ms. Hessan serves on the boards of Tufts University, MassChallenge, Panera, Brightcove, The Schlesinger Group and Beth Israel Deaconess Medical Center, and received her MBA from Harvard Business School and her B.A. in Economics and English from Tufts University. Ms. Hessan has also received Honorary Doctorate degrees from Bentley University and the New England College of Business. |
| Qualifications | |
| We believe Ms. Hessan’s executive experience, entrepreneurial passion and customer-centric, data driven perspective qualify her to serve on our Board of Directors. |
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Robert F. Rivers | Experience | |
Age 56 | Robert F. Rivers is the Chief Executive Officer and Chairmember of the Board of Directors of Eastern
Bankshares, Inc.SmileDirectClub since June 2022, and has served as the Chief Executive Officer and Chair of the Board of Directors of Eastern Bank since January 1, 2017. Mr. Rivers joined Eastern Bank in 2006 asshe serves on its Vice Chair and Chief Banking Officer, becoming President in 2007, Chief Operating Officer in 2012 and an Eastern Bank director in 2015. He has also served as a trustee of Eastern Bank's predecessor holding company, Eastern Bank Corporation, since 2007. Prior to joining Eastern, from 1991 to 2005, Mr. Rivers held a number of staff and line leadership positions at M&T Bank in Buffalo, NY. Immediately prior to joining Eastern, he was an Executive Vice President for Retail Banking at the former Commercial Federal Bank in Omaha, Nebraska, following 14 years at M&T Bank. Mr. Rivers serves as Foundation Board Chair of the Dimock Center, as Chair of the Massachusetts Business Roundtable, is a member of the executive committee of the Greater Boston Chamber of Commerce, and is a trustee of Stonehill College. HeAudit Committee. She also serves on the Board of Directors of Morgan Memorial Goodwill Industries and as Trustee and Treasurer for the Lowell Plan and on the Advisory Boards of the Lawrence Partnership and the JFK Library Foundation, and the Boston Women’s Workforce Council. A leader in Boston’s business community, Mr. Rivers has been recognized asRobert F. Kennedy Children’s Action Corps. She holds a champion for social justice issues, having led the “Yes on 3” campaign to protect the rights of members of the LGBTQ+ community. He received his undergraduatebachelor’s degree from Stonehill College and holds an MBA from the University of Rochester.Johns Hopkins University.Qualifications |
| Qualifications | |
| We believe that Mr. Rivers is qualified to serve as a director based upon his experience as our Chief Executive Officer beginning in January 2017, his prior service as one of our senior executive officers, his prior seniorMs. Williams’ extensive risk management, positions at other banks,business, and his familiarity with the communities that Eastern serves, including through his involvement with numerous non-profit organizations in the greater Boston area. |
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Paul D. Spiess | Experience | |
Age 71 | Paul D. Spiess has served as a director of Eastern Bank and a trustee of its predecessor holding company, Eastern Bank Corporation, since 2014. He has spent forty-five years in the banking and financial services industry, serving as former Chairman of the Board of Centrix Bank and Trust, which merged with Eastern in 2014. He also served as Executive Vice President and Chief Operating Officer of CFX Bank in Keene, New Hampshire from 1993 to 1997. From 2004 to 2010, Mr. Spiess served in the office of the Governor of New Hampshire as an insurance and banking advisor. From 2000 to 2004, he served as a state legislator in Concord, New Hampshire, during which time he served on the House Commerce Committee. From 1983 to 1993, Mr. Spiess was Founder and President of Colonial Mortgage, Inc., of Amherst, New Hampshire. From 2004 through 2010, Mr. Spiess served as a health care advisor to New Hampshire Governor John Lynch and as Chairman of the Citizen’s Health Initiative. He graduated with a B.A. from Colby College in 1971 and earned an M.B.A degree from Boston University in 1977. |
| Qualifications | |
| We believe Mr. Spiess’s extensive knowledge of banking operations and credit risk, his experience in the banking and mortgage industries, and his boardaudit leadership experience qualify himher to serve our on our Board of Directors. |
Our Board of Directors believes that good corporate governance is important to ensure that ourthe Company is managed for the long-term benefit of its shareholders. Current copies of our Corporate Governance Guidelines, Code of Conduct, and charters for our Audit, Compensation and Human Capital Management, Nominating and Governance, and Risk Management Committees are available on our website, investor.easternbank.com, in the Governance section under the caption “Governance Documents.” We may also use our website in the future to make certain disclosures required by the rules of Thethe Nasdaq Global Select Market ("Nasdaq"(“Nasdaq”), on which our common stock is listed.
| | |
| | |
| Corporate Governance Highlights |
| We have implemented several important measures that are designed to promote long-term stakeholder value: |
| |
| ☑ | | To facilitate board refreshment, we have adopted a director retirement policy in our Corporate Governance Guidelines pursuant to which any director who reaches the age of 75 while serving as a director will retire from the Board effective as of the end of the year in which he or she turns 75. |
☑ | | We intend to seek an annual advisory vote annually on the compensation of our Named Executive Officers, who are the three executive officers shown in the compensation tables in this Proxy Statement. We believe this practice underscores the careful consideration we intend to give to our shareholders’ views on our compensation practices. |
☑ | | We have established a compensation clawback policy that will enableto provide for the Company to recouprecoupment of cash and incentive compensation from executive officers in the event of certain financial restatements. |
☑ | | We have adopted equity ownership guidelines for directors and executive officers, which set minimum ownership requirements based on a multiple of the cash portion of the annual base retainer or base salary, as applicable, then in effect. |
☑ | | Our Insider Trading Policy prohibits our executives and directors from pledging and hedging our common stock, in order to further the alignment between shareholders and our executives and directors. |
Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, family and other relationships, including if applicable those relationships described under the section of this Proxy Statement entitled “Certain Relationships and Related Party Transactions,” our Board of Directors has determined that each of the following directors qualifies as an “independent director,” as defined in the listing requirements of Nasdaq: Mses. Jackson, Harlam, Harney, Hessan, and HessanWilliams and Messrs. Bane, Borgen, Chung, Connolly, Markell, Shell and Spiess. Neither Mr.Messrs. Rivers nor Mr.and Holbrook each do not qualify as an “independent director” under the Nasdaq rules. Mr. Rivers is not considered independent because he currently serves as our chief executive officer.Chief Executive Officer (“CEO”). Mr. Holbrook served as chief executive officerour CEO from January 1, 2007 through December 31, 2016.2016, and he continued to receive compensation through January 2022 in connection with his retirement. In making these determinations on the independence of our directors, our Board of Directors considered the relationships that each such non-employee director has with ourthe Company and all other facts and circumstances our Board of Directors deemed relevant in determining independence. Our Board of Directors also determined that each member of the Audit, Compensation and Human Capital Management, and Nominating and Governance Committees satisfies the independence standards for such committees established by the SEC and the Nasdaq listing rules, as applicable.
The Company has also adopted a Director Independence Policy that incorporates the requirements for independence set forth in the SEC and Nasdaq independence rules, as well as prudential standards of the Federal Reserve Board, and an Audit Committee Independence Policy that establishes separate and higher standards of independence for members of the Audit Committee, consistent with the SEC and Nasdaq rules as well asand guidelines of the Federal Deposit Insurance Corporation. Our Board of Directors has determined that each of Mses. Jackson,
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Harlam, Harney, Hessan, and HessanWilliams and Messrs. Bane, Borgen, Chung, Connolly, Markell, Shell and Spiess is an "independent director"“independent director” under the Director Independence PolicyPolicy; that Mr. Borgen meets the enhanced independence standards applicable to the Chair of the Risk Management Committee under the Director Independence Policy; and that each of Messrs. Bane, Borgen, Connolly, Markell, and Spiess and Mses. Harney and Williams meets the enhanced independence standards for Audit Committee members set forth in the Company'sCompany’s Audit Committee Independence Policy.
Board Composition and Leadership Structure of the Board of Directors
Our Board of Directors oversees and advises our chief executive officerCEO and management team, exercising their business judgment in good faith to ensure the long-term interests of our shareholders are being served. As of April 1, 2021,2024, our Board of Directors was composed of 1213 directors.
The Board does not have a fixed policy regarding the separation of the offices of the chair of the Board of Directors and chiefthe principal executive officer of the Company and believes that it should maintain the flexibility to select the chair of the Board of Directors and its
board leadership structure, from time to time, based on the criteria that it deems to be in the best interests of the Company and its shareholders. At this time, the offices of the chair of the Board of Directors and the chiefprincipal executive officer of the Company are combined, with Mr. Rivers serving as chairChair of the Board and chief executive officer.officer (“CEO”) of the Company. He has served in this roleas the Company’s CEO since January 2017. With over 30 years of experience in the financial services industry, including over 1417 years with us, Mr. Rivers has the knowledge, expertise, and experience to understand the opportunities and challenges facing our Company, as well as the leadership and management skills to promote and execute our values and strategy.
In accordance with what we believe are governance best practices, the Board of Directors has established the position of Lead Director. As further set forth in the Corporate Governance Guidelines, the Lead Director is independent and is recommended by our Nominating and Governance Committee and elected by the Board of Directors. Since January 2018, Ms. Jackson has served in that role, performing many of the functions that an independent chair would perform for the Company. Those functions include serving as a key source of communication between the independent directors and the chiefCompany’s principal executive officer, consulting with the chair of the Board of Directors in establishing the agenda for each meeting of the Board, presiding in executive sessions of meetings of the Board of Directors, and coordinating the agenda for and leading meetings of the independent directors, as needed.
The Company believes that having the same person serve as chiefthe Company’s principal executive officer and chairChair focuses leadership, responsibility, and accountability in a single person and that having a Lead Director provides for effective checks and balances and the ability of the independent directors to work effectively in the board setting. The Board of Directors reviews its leadership structure periodically in light of the composition of the Board of Directors and the needs of the Company and its shareholders.
Committees of our Board of Directors
Our Board of Directors has established four standing committees: an Audit Committee, a Compensation and Human Capital Management Committee, a Nominating and Governance Committee, and a Risk Management Committee, each with the composition and responsibilities described below. Each committee operates under a charter that has been approved by our Board of Directors. Current copies of the committee charters are posted on our website, investor.easternbank.com, in the Governance section under the caption “Governance Documents.”
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The table below reflects the composition of the Board’s four standing committees as of April 1, 2021:
March 22, 2024: | | | | | | | | |
| | Audit Committee | | Compensation
and Human
Capital
Management
Committee | | Nominating and
Governance
Committee | | | | | | | | Risk Management
Committee |
| Audit Committee | Compensation Committee | Nominating and Governance Committee | Risk Management Committee |
Richard C. Bane | µ | £ | £ | | | µ | | £ |
Luis A. Borgen | £ | £ | | £ | | | | µ |
Joseph T. Chung | | £ | £ | µ | | £ | | |
Paul M. Connolly | £ | £ | µ | | | £ | | £ |
Bari A. Harlam | | | | | | £ | | |
Marisa J. Harney | | £ | | | | | | £ |
Diane S. Hessan | | | £ | £ | | £ | | |
Richard E. Holbrook | | | | | | | | £ |
Deborah C. Jackson (1) | | £ | £ | £ | | £ | | |
Peter K. Markell | £ | µ | £ | £ | | | | £ |
Robert F. Rivers (2) | | | | | | | | £ |
Greg A. Shell | | | | £ |
Paul D. Spiess | £ | £ | | µ£ | | | | £ |
| | £ | | | | | | £ |
µCommittee Chair | | £Committee Member | | | | |
(1)
Lead independent directorDirector(2)
Chair of the Board of the Directors
In 2020,2023, our Board of Directors met 21twenty-two times, the Audit Committee met nine times, the Compensation and Human Capital Management Committee met sixten times, the Nominating and Governance Committee met sixten times, and the Risk Management Committee met four times. Each director attended over 75% of all meetings of our Board of Directors and committees on which he or she served that were held during 2020.2023. Our directors are encouraged to attend the Annual Meeting, to the extent practicable.
All of our directors attended the 2023 annual meeting of shareholders held on May 15, 2023.Board Self-Evaluation and Individual Director Evaluation
Our Board of Directors conducts an annual self-evaluation of the Board’s performance as a whole to determine whether it and its committees are functioning effectively. The Nominating and Governance Committee receives comments from all directors and reports the results of the board and committee evaluations to the Board of Directors and its committees. The results are discussed with the full Board of Directors and among the respective committees, as applicable. Our Board of Directors believes such evaluations are valuable tools in assessing the Board’s effectiveness in performing its oversight of management and fulfilling its responsibilities.
The current members of our Audit Committee are Mr. BaneMarkell (chair), Mses. Harney and Williams, and Messrs. Borgen,Bane, Connolly, Markell and Spiess, and their committee report is included in this Proxy Statement under the heading “Audit Committee Report.” Each of the Audit Committee members is independent under the listing
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standards of Nasdaq, including under Rule 10A-3 of the Exchange Act, and our Audit Committee Independence Policy. Each of our independent directors Messrs.Mr. Markell and Borgen has also been designated by our Board of Directors as an “audit committee financial expert” (as defined in applicable SEC regulations). None of the Audit Committee members is an employee of ours or any of our subsidiaries, nor simultaneously serves on the audit committees of more than two public companies, including ours.
| | | | | | |
| | |
| | Our Audit Committee is responsible for assisting the Board in overseeing and monitoring: |
• | the integrity of the Company’s financial statements and other financial information provided by the Company to its shareholders; |
• | the integrity of the accounting and financial reporting processes of the Company, and the audit of the Company’s financial statements; |
• | the Company’s compliance with legal, regulatory and public disclosure requirements; |
• | the othe appointment, qualifications, independence, performance and retention of the Company’s independent external auditor; and |
• | the performance of the Company’s internal audit function and its Sarbanes-Oxley internal controls function. | | |
The Audit Committee meets regularly with management and our independent registered public accounting firm to discuss the annual audit of our financial statements, our disclosures in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual and quarterly reports filed with the SEC, the quarterly reviews of our financial statements and our quarterly and annual earnings disclosures prior to their release. The Audit Committee also reviews the experience and qualifications of the lead partner and other senior members of Ernst & Young LLP, our independent registered public accounting firm (“Ernst & Young” or "EY"“EY”), including compliance with applicable rotation requirements, and considers whether there should be rotation of the firm itself.
The Audit Committee has authority under its charter to obtain advice and assistance from outside legal counsel and accounting or other outside advisors as deemed appropriate to perform its duties and responsibilities.
Compensation and Human Capital Management Committee
The current members of the Compensation and Human Capital Management Committee (“C&HCM Committee”) are Mr. MarkellChung (chair), Ms.Mses. Hessan and Jackson, and Messrs. Bane, Borgen, Chung, ConnollyMarkell and Spiess. Each member of the CompensationC&HCM Committee is independent under the listing standards of Nasdaq, including the heightened standards that apply to compensation committee members.
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| | |
| | The Compensation and Human Capital Management Committee is responsible for: |
• | reviewing and approving compensation of executive officers (other than the chief executive officer) and recommending the chief executive officer’s compensation for approval by the independent members of the Board of Directors; |
• | reviewing and proposing goals and objectives relevant to the chief executive officer’s compensation and evaluating the chief executive officer’s performance in light of such goals and objectives; |
• | overseeing the Company’s various compensation and benefits plans; |
• | overseeing senior management succession planning; |
• | making recommendations to the Board regarding the adoption of new administering our incentive compensation and equity-based plans, and administeringincluding our existingequity incentive compensation plan;• overseeing risk review processes for incentive compensation plans; | | |
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| | | | |
| • | • making recommendations to the Board regarding compensation of our directors; |
• | overseeing the Company'simplementation of the Company’s diversity, equity and inclusion ("(“DE&I"&I”) programs including oversight of the Company's assessment of its DE&Iand policies and practices; |
| related to human capital management; • | oversight of talent management programs, including employee engagement surveys and development initiatives; and |
• | reviewing and approving the general design and terms of any significant non-executive compensation and benefits plans. | | |
The CompensationC&HCM Committee has authority under its charter to obtain advice and assistance from outside legal counsel compensation consultants orand other outside advisors as deemed appropriate to perform its duties and responsibilities. For 2020,2023, the CompensationC&HCM Committee engaged an independent compensation consultant, Willis Towers Watson ("Willis Towers"Pearl Meyer & Partners, LLC (“Pearl Meyer”), to advise on compensation matters and provide experiential guidance on what is considered fair and competitive practice in our industry, primarily with respect to the compensation of our executive officers, and also with regard to director compensation. In December 2020, the Compensation engaged a new independent compensation consultant, Pearl Meyer & Partners, LLC ("Pearl Meyer"), to advise regarding similar matters.
The CompensationC&HCM Committee has the authority to delegate to subcommittees of the CompensationC&HCM Committee, to the chair of the CompensationC&HCM Committee, or one or more of our executive officers, as permitted under applicable law. The C&HCM Committee may also delegate to a committee of one or more directors, or one or more of our executive officers, subject to certain restrictions, the power to grant equity awards to employees who are not subject to Section 16 of the Exchange Act pursuant to the 2021 Equity Plan (as defined below). References to the CompensationC&HCM Committee in this proxy statementProxy Statement also refer to its subcommittees and its delegates, where applicable.
Compensation and Human Capital Management Committee Interlocks and Insider Participation
During 2020,2023, none of our officers, former officers or employees served on our CompensationC&HCM Committee. None of our executive officers serves or has served as a member of thea compensation committee, other board committee, or full board of directors compensation committee, or other board committee performing equivalent functions of any entity that has one or more executive officers serving as one of our directors or on our CompensationC&HCM Committee.
Nominating and Governance Committee
The current members of the Nominating and Governance Committee are Mr. ConnollyBane (chair), Mses. Harlam, Hessan, and Jackson, and Hessan and Messrs. Bane, Chung and Markell.Connolly. Each member of the Nominating and Governance Committee is independent under the listing standards of Nasdaq.
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| | |
| | The Nominating and Governance Committee is responsible for: |
• | identifying, evaluating and recruiting qualified persons to serve on our Board of Directors; |
• | selecting, or recommending to the Board for selection, nominees for election as directors; |
• | reviewing and recommending the composition of the Board’s standing committees; |
• | onboarding new directors and overseeing director education; |
• | overseeing policies and programs for disclosure of environmental, social and governance (“ESG”) issues, including environmental and social matters and issues related to DE&I; • reviewing and assessing the Company’s Corporate Governance Guidelines; and |
• | overseeing compliance with our Related Party Transactions Policy; and |
• | annually evaluating the performance, operations, size and composition of our Board of Directors and its committees. | | |
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The Nominating and Governance Committee has authority under its charter to obtain advice and assistance from outside legal counsel and other outside advisors as deemed appropriate to perform its duties and responsibilities.
The Nominating and Governance Committee of our Board of Directors identifies and evaluates director candidates and recommends to our Board of Directors qualified candidates for nomination as directors for election at our annual meeting of shareholders or to fill vacancies on our Board of Directors. The process followed by the Nominating and Governance Committee in fulfilling its responsibilities includes requests to board members and others for recommendations, meetings to evaluate biographical information, experience and other background material relating to potential candidates, and interviews of selected candidates.
In considering candidates, the Nominating and Governance Committee reviews a candidates'candidate’s qualifications and independence based on the criteria set forth in the Company'sCompany’s Corporate Governance Guidelines, its Director Independence Policy, Audit Committee Independence Policy, and the Nominating and Governance Committee'sCommittee’s charter (or the charter of a particular committee). The Nominating and Governance Committee considers the composition of the Board or committees; succession planning; and current challenges and needs of the Board, its committees, the Company and the Bank, while taking into account thefactors such as professional and business experience, leadership, skill, expertise, judgment, background, collegiality, diversity, availability, teamwork, and other aspectsfactors.
Nasdaq listing requirements require each listed company to have, or explain why it does not have, two diverse directors on its board of directors, including at least one diverse director who self-identifies as female and one diverse director who self-identifies as an underrepresented minority or LGBTQ+ (subject to exceptions set forth in the candidates.Nasdaq rules). The composition of our current Board of Directors is in compliance with the Nasdaq diversity requirement.
The table below sets forth composition of our Board members within the categories prescribed by the Nasdaq listing requirements. Each category has the meaning as it is used in Nasdaq Rule 5605(f).
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Eastern Bankshares, Inc. Board of Directors Diversity |
| | | As of March 20, 2024 | | As of March 20, 2023 |
Total Number of Directors | | 13 | | 11 |
| Part I: Gender Identity |
| | | Female | | Male | | Female | | Male |
| Directors | | 5 | | 8 | | 3 | | 8 |
Part II: Demographic Background |
| African American or Black | | 2 | | 0 | | 1 | | 0 |
Asian | | 0 | | 1 | | 0 | | 1 |
Hispanic or Latinx | | 0 | | 1 | | 0 | | 1 |
White | | 3 | | 6 | | 2 | | 6 |
LGBTQ+ | | 1 | | 0 | | 0 | | 0 |
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While we do not have a formal policy on board diversity, we are proud of the diversity and talent of our boardBoard and our management team, and our Nominating and Governance Committee and Board of Directors have affirmed their commitment to actively seeking women, diverse and/or LGBTQ+ candidates for the pool from which director candidates are selected. Our current Board of DirectorsDirectors’ composition is 25%38% women and 17%15% Black 8%and also includes members of the Asian, Latino/x, and 8% Latino/x.LGBTQ+ communities, as noted above. The Nominating and Governance Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily applicable to all prospective nominees. The Nominating and Governance Committee believes that the backgrounds and qualifications of our Company’s directors, considered as a group, should provide a significant breadth of experience, knowledge and abilities to assist our Board of Directors in fulfilling its responsibilities. Nominees are not discriminated against on the basis of race, religion, national origin, sex, sexual orientation, gender identity or expression, disability or any other basis prohibited by law.
After completing its evaluation of potential nominees, the Nominating and Governance Committee makes a recommendation to our Board of Directors as to the persons who should be nominated for election to our Board of Directors, and our Board of Directors determines the nominees after considering the recommendation and report of the committee.
The Nominating and Governance Committee will consider candidates recommended by individual shareholders in accordance with the procedures and other requirements set forth in the Bylaws. Names and credentials must be provided to the committee on a timely basis for consideration prior to the Annual Meeting. Shareholders who wish to recommend an individual to the Nominating and Governance Committee for consideration as a potential candidate for director should submit the individual’s name, together with appropriate supporting documentation, to the Nominating and Governance Committee at the following address: Nominating and Governance Committee, c/o Corporate Secretary, Eastern Bankshares, Inc., 265 Franklin
125 High Street, Boston, Massachusetts 02110. A submission will be considered timely if it is made during the timeframes disclosed in this proxy statementProxy Statement under “Shareholder Proposals.��” If our Board of Directors determines to nominate and recommend for election a shareholder-recommended candidate, then the candidate’s name will be included in our company’sthe Company’s proxy card for the next annual meeting of shareholders.
Risk Management Committee
The Risk Management Committee of our Board of Directors assists the board in fulfilling its oversight responsibilities with respect to oversight of Eastern Bank'sBank’s enterprise risk management ("ERM"(“ERM”) practices and procedures, as well as its ERM framework ("(“ERM Framework"Framework”). The current members of the Risk Management Committee are Mr. SpiessBorgen (chair), Mses. HarlamHarney and HessanWilliams, and Messrs. Bane, Borgen, Connolly, Holbrook, Markell, Rivers, and Shell.Spiess. The chair of the Risk Management Committee meets the criteria contained in the Federal Reserve Board’s Enhanced Prudential Standards (12 C.F.R. § 252.33(a)(4)(ii)), as is required under this committee's charter.
our Director Independence Policy. | | | | | | |
| | |
| | The Risk Management Committee is responsible for oversight of ERM framework, which includes the following designated risk domains: credit, capital, liquidity, market, operations, cyber, compliance and regulatory, strategic and emerging, reputation, and conduct and culture, and which oversight includes: |
| for: • | oversight of the design, implementation and operation of the ERM Framework, approval of ERM policies, and risk monitoring practices by the Bank'sBank’s enterprise risk management committee; |
• | review of reports related to the Bank'sBank’s risk profile; |
• | review of management'smanagement’s assessments in connection with the Bank'sBank’s credit risk management and provide related reports to the Audit Committee; |
• | review of capital, liquidity, and interest rate risks within the business and adviseadvising the Board with respect to the adequacy of capital allocated; |
| and • | oversight of regulatory compliance, operational, and cyber risk; and |
•risk. | review adequacy of major insurance policies and coverage and related reports from the Bank's subsidiary, Eastern Insurance Group LLC. | |
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The Risk Management Committee has authority under its charter to obtain advice and assistance from outside legal counsel and other outside advisors as deemed appropriate to perform its duties and responsibilities.
Board Role in Risk Oversight
Our Board of Directors administers its internal controls and risk management oversight function directly and through its Audit, CompensationC&HCM and Risk Management Committees. In general, management is responsible for the day-to-day management of the risks our Company faces, while the Board of Directors, acting as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.
Our Board of Directors has formed the Risk Management Committee to assist it in fulfilling its oversight responsibilities with respect to management’s identification, evaluation, management and monitoring of our Company’s critical enterprise risks, including major operational, strategic and financial risks inherent in our business.
The Board of Directors and the Audit Committee regularly discuss with management, and our independent auditors and our Sarbanes-Oxley controls group the Company’s major risk exposures, their potential financial impact on our company,the Company, and the steps we take to manage these risks. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements. In addition, the Audit Committee discusses policies with respect to our internal auditors and theSarbanes-Oxley controls group, as well as our independent auditors.
The CompensationC&HCM Committee assesses whether our compensation arrangements encourage inappropriate risk-taking, and whether risks arising from our compensation arrangements are reasonably likely to have a material adverse effect on the Company. See the “Compensation Disclosure and Analysis” belowsection for information regarding the CompensationC&HCM Committee’s assessment of risks arising from our compensation practices.
Our Board of Directors believes that our boardBoard represents a balance of experience in the industries served by our Company and in the financial and business communities, which provides effective guidance and oversight to management. Our Board of Directors also recognizes the desire to keep our Board of Directors “refreshed” and has adopted a policy limiting director tenure to age 75 for members. Directors retire atby the end of the year in which they turn age 75.
Declassified Board of Directors
Historically, our Board of Directors has been divided into three classes of directors serving staggered three-year terms, with each class being as equal in number as possible. Directors for each class are elected at the annual meeting of shareholders held in the year in which the term for their class expires. However, in accordance with an amendment approved by our shareholders in 2022, our Articles of Organization have been modified such that for our annual meetings of shareholders in 2025 and 2026, the classes of directors whose terms expire at those meetings will be nominated for re- election for two- and one-year terms, respectively, and our Board of Directors will be fully declassified, with all directors standing for annual election, beginning with the Company’s 2027 annual meeting of shareholders.
Communications with Directors
Shareholders and other interested parties who wish to send written communications on any topic to our Board of Directors, or the presiding director of executive sessions of the non-employee and independent
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directors, may do so by addressing such communications to our Board of Directors, c/o Corporate Secretary, Eastern Bankshares, Inc., 265 Franklin125 High Street, Boston, Massachusetts 02110. Communications will be distributed to the chair of the Board, the Lead Independent Director or the other members of the Board as appropriate depending on the facts and circumstances outlined in the communication received.
Code of Business Conduct and Ethics
Our company’s Code of Conduct is applicable to all our employees, officers and directors, as well as those representing the Company in an official capacity. A current copy of our Code of Conduct is posted on our website at investor.easternbank.com under “Governance Documents” in the “Corporate Governance” section. We intend to satisfy disclosure requirements of the SEC and Nasdaq regarding amendments to, or waivers of, our Code of Conduct by providing information on our website.
Certain Relationships and Related Party Transactions
We review relationships and transactions between our Company and our directors, nominees for director, executive officers and their immediate family members to determine whether these individuals have a direct or indirect material interest in a transaction, based on the facts and circumstances. Directors and executive officers are canvassed in writing to determine whether such related party transactions exist or are under consideration, and are required under our Code of Conduct to disclose to us potential conflicts of interest with our Company.
SEC rules require us to disclose certain relationships and related party transactions our Company enters into with our directors, nominees for director, executive officers, owners of more than 5% of the outstanding shares of our common stock, or members of their immediate families. In accordance with the charter of the Nominating and Governance Committee and our written Related Party Transaction Policy ("(“RPT Policy"Policy”), the Nominating and Governance Committee is responsible for reviewing and approving related party transactions. If it is not feasible to approve related party transactions in advance, the Nominating and Governance Committee is permitted to ratify such transactions after the Company has entered into them, subject to the procedures and considerations described below.
The RPT Policy applies to any transaction, arrangement or relationship, or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which:
•the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year;
•the Company or any of its subsidiaries is a participant; and
•any related person has or will have a direct or indirect interest.
Under the RPT Policy, a related person is:
| • | | A non-employee director (or nominee for election as director) or executive officer of the Company; |
•A non-employee director (or nominee for election as director) or executive officer of the Company;
•any beneficial owner of more than five percent5% of our common stock; or
•any immediate family member of the foregoing.
Under the RPT Policy, a related entity is:
•Any entity (other than the Company or its subsidiaries), including non-for-profit or for-profit entities, of which a related person is an employee, executive officer, partner or principal, or in which a related person directly or indirectly owns at least a 10% equity interest;
18 | • | | Any entity (other than the Company or its subsidiaries), including non-for-profit or for-profit entities, of which a related person is an employee, executive officer, partner or principal, or in which a related person directly or indirectly owns at least a 10% equity interest; or |
| • | | Any non-for-profit entity for which a related person serves as a director or trustee. |
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•Any non-for-profit entity for which a related person serves as a director or trustee.
In addition, theThe RPT Policy also provides that certain types of related party transactions are deemed to be pre-approved or ratified, even if the aggregate amounts involved exceeds $120,000, and do not require review or approval of the Nominating and Governance Committee. Such transactions include:
•Executive and director compensation;
•Certain transactions with companies for which the only relationship of a related person is as an employee, beneficial owner of less than a 10% equity interest, or in the case of partnerships, a partner if the aggregate amount involved does not exceed the greater of $1,000,000 or 2% of that company'scompany’s total annual revenues;
| • | | Ordinary course transactions, including financial services, personal loans, and business relationships, provided that they are made in the ordinary course of business on terms substantially the same as those prevailing at the time for comparable services provided to non-affiliates; |
•Ordinary course transactions, including financial services, personal loans, and business relationships, provided that they are made in the ordinary course of business on terms substantially the same as those prevailing at the time for comparable services provided to non-affiliates;
•Certain charitable contributions made by Eastern Bank or its affiliate Eastern Bank Charitablethe Foundation ("EBCF") to organizations where a related person is a director if the aggregate amount does not exceed the lesser of $500,000 or 2% of the donee'sdonee’s total annual expenses;expenses, as well as charitable contributions made to organizations under common control with the Company that have been preapproved by the Board of Directors or the board of trustees of the Foundation; and
•Transactions where a related person'sperson’s interest arises solely from ownership of the Company'sCompany’s common stock and all holders of the stock receive the same benefit on a proportional basis.
The Nominating and Governance Committee is provided with the material facts of all transactions that require the Nominating and Governance Committee’s approval under the RPT Policy. In determining whether to approve or ratify a particular transaction, the Nominating and Governance Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
Under the RPT Policy, a director is not permitted to participate in any discussion or approval of a transaction for which he or she (or an immediate family member) is the related person, and such director must provide the Nominating and Governance Committee with all material information concerning the transaction. If an approved transaction is ongoing, the Nominating and Governance Committee may establish guidelines for management to follow in its dealings with such person and will annually review and assess compliance with such guidelines, and whether the transaction remains appropriate for the Company.
Transactions with Certain Related Persons
Our Company has not entered into any such disclosable relationships or transactions under the RPT Policy since the beginning of our 2023 fiscal year and no such disclosable relationships or transactions are currently proposed.
The Sarbanes-Oxley Act of 2002 generally prohibits publicly traded companies from making loans to their executive officers and directors, but it contains a specific exemption from the prohibition for loans made by federally insured financial institutions, such as Eastern Bank, to their executive officers and directors in compliance with federal banking regulations. At March 15, 2021, we had $8.5 million in deposits fromDuring 2023, certain directors and $1.6 millionexecutive officers of loans tothe Company and Eastern Bank, as well as related persons and related entities as defined in the RPT Policy. Theseassociated with those directors and executive officers, were customers of Eastern Bank and had loans outstanding. Such loans were made in the ordinary course of business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to Eastern Bank, and, in the opinion of management, did not involve more than the normal risk of collectability or present other unfavorable features. These loans were performing according to their original terms at March 15, 2021 and were made in compliance with federal banking regulations.
Quincy L. Miller, our president and Bank vice chair, and an executive officer of our Company, serves as a member of the core leadership team of the New Commonwealth Racial Equity and Social Justice Fund ("Commonwealth Fund"), an initiative of The Boston Foundation, a non-profit foundation. The Commonwealth Fund provide grants and other essential support to community groups and coalitions in the Commonwealth of Massachusetts that are working to fight racism. As previously publicly disclosed, the EBCF made a commitment to donate $5.0 million to the Commonwealth Fund over five years, and in 2020, the EBCF made a $1.0 million donation to the Commonwealth Fund in fulfillment of such commitment. The Nominating and Governance Committee has ratified the 2020 donation by the EBCF in accordance with the terms of the RPT Policy.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The following table provides certain information regarding our executive officers who are not directors. Ages are as of the date of this Proxy Statement. Our executive officers serve at the discretion of our Board of Directors.
| | | | |
Name | | Age | | | | | | Position |
Name | Age | Position |
Quincy L. Miller | 46 | 49 | | President, Eastern Bankshares, Inc.; Vice Chair and President of Eastern Bank |
James B. Fitzgerald | 63 | 66 | | Chief Administrative Office,Officer, Chief Financial Officer &and Treasurer, Eastern Bankshares, Inc.; Vice Chair, Chief Administrative Officer and Chief Financial Officer of Eastern Bank |
Paul G. Alexander | 56 | Chief Marketing and Communications Officer of Eastern Bank |
Steven L. Antonakes | 52 | 55 | | Executive Vice President, Enterprise Risk Management of Eastern Bank |
Barbara J. Heinemann | 58 | Executive Vice President, Consumer Banking of Eastern Bank |
Kathleen C. Henry | 48 | 51 | | Executive Vice President, General Counsel and Corporate Secretary of Eastern Bankshares, Inc.; Executive Vice President, General Counsel, Corporate Secretary and Chief Human Resources Officer of Eastern Bank |
John F. Koegel Timothy J. Lodge | 70 | President & Chief Executive Officer of Eastern Insurance Group LLC; Executive Vice President, Eastern Bank |
Jan A. Miller47 | 70 | Vice Chair, Chief Commercial Banking Officer of Eastern Bank |
Nancy Huntington Stager | 61 | Former President and Chief Executive Officer, of the Eastern Bank Charitable Foundation; Executive Vice President, Eastern BankInsurance Group LLC |
Daniel J. Sullivan | 60 | Executive Vice President, Chief Credit Officer of Eastern Bank |
Donald M. Westermann | 43 | 46 | | Executive Vice President, Chief Information Officer of Eastern Bank |
Executive Officers
Quincy L. Miller - President, Eastern Bankshares, Inc.; Vice Chair and President of Eastern Bank
Mr. Miller is President of Eastern Bankshares, Inc. and Vice Chair and President of Eastern Bank. Mr. Miller joined Eastern in 2016 as Chief Banking Officer and was promoted to his current position with the Bank in 2017. He oversees a numberMarketing and all of departments, including ourthe Bank’s Consumer, Banking businesses, Business Banking, Institutional BankingCommercial, and Eastern Wealth Management,Divisions, and, with the Chief Executive Officer, leads the overall strategic direction of Eastern. Prior to joining Eastern, Mr. Miller served as the President of Citizens Bank, Massachusetts, and President of its Business Banking division. He started his career in consumer banking at M&T Bank in New York City in 1997. Mr. Miller is a founding member of The New Commonwealth Racial Equity & Social Justice Fund. He also serves on the Board of Directors for The Boys and Girls Club of Boston, The Bottom Line, Blue Cross Blue Shield of MA, The Alliance for Business Leadership, The Greater Boston YMCA Board of Overseers,and Mill Cities Community Investments and as Board Emeritus of The Greater Boston Food Bank and Chair Emeritus of The Urban League of Eastern Massachusetts. Mr. Miller earned a B.A. in economics and business from Lafayette College and graduated from the Consumer Bankers Association’s Executive Banking School. He currently serves on the Board of The Consumer Bankers Association.
James B. Fitzgerald - Chief Administrative Office,Officer, Chief Financial Officer &and Treasurer, Eastern Bankshares, Inc.; Vice Chair, Chief Administrative Officer, and Chief Financial Officer of Eastern Bank
Mr. Fitzgerald is the Chief Administrative Officer, Chief Financial Officer and Treasurer of Eastern Bankshares, Inc., and Vice Chair, Chief Administrative Officer and Chief Financial Officer of Eastern Bank. Since joining Eastern in 2012, his responsibilities have included managing the Finance, Legal, Technology, Operations and General Services groups. He brings nearly 37over 38 years of experience in the financial services industry to Eastern Bank. In 2009, Mr. Fitzgerald co-founded and was chief financial officer for NBH Holdings Corp., the bank holding company for Bank Midwest NA of Kansas City. Prior to that, Mr. Fitzgerald served as an executive vice president and chief financial officer at Citizens Financial Group for eight years. He began his career as a financial leader in mergers and acquisitions at First Fidelity Bancorp, Citizens Financial Group and Washington Mutual. Mr. Fitzgerald currently servicesserves as a trustee of the Massachusetts Taxpayers Association a trusteeand of SBERA,the
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Savings Bank Employees’ Retirement Association, and serveshe is on the board of the Thompson Island Outward Bound Education Center. Mr. Fitzgerald earned his bachelor’s degree in finance at Lehigh University and his MBA at Fordham University.
Paul G. Alexander - Chief Marketing and Communications Officer of Eastern Bank
Mr. Alexander is the Chief Marketing and Communications Officer for Eastern Bank. Mr. Alexander joined Eastern in 2015 and since then has developed and executed marketing, communications and public relations strategies resulting in increases in brand equity and employee engagement – via the “Join Us For Good” campaign. Before Eastern, Mr. Alexander served as Executive Vice President and Chief Communications Officer for Liberty Mutual Insurance, where he held responsibility for all corporate brand marketing, advertising, communications, public relations, meeting management and event strategy, and major sports sponsorships. Before that he was Vice President of Global Advertising and Design for the Campbell Soup Company, a director of Advertising Development and a Brand Manager at Procter and Gamble. He began his career at Time Inc. as a Circulation Manager for Money Magazine. Mr. Alexander is on the Board of Directors of Skyword, a content marketing software and services company, and a member of the Board of the Ad Club of Boston. He is Treasurer, chair of the Finance Committee, and a member of the Executive Committee of the Board of the Association of National Advertisers. Mr. Alexander is Chair of the Board of Directors of The Partnership, Incorporated and he is on the Board of Trustees of the Museum of Fine Arts of Boston and Lahey Hospital and Medical Center. Mr. Alexander earned his undergraduate degree from Harvard College and MBA from Harvard Business School.
Steven L. Antonakes - Executive Vice President, Enterprise Risk Management of Eastern Bank
Mr. Antonakes is the Executive Vice President for Enterprise Risk Management at Eastern Bank.Bank, a role he has held since March 2018. He oversees Eastern Bank’s Enterprise Risk Management function, which includes Bank Secrecy Act/Anti-Money Laundering, Compliance, Credit Risk Review, Information Security, Financial and Model Risk Management, and Operational Risk. He joined Eastern Bank in 2015 as Senior Vice President, Chief Compliance Officer, and was promoted to Senior Vice President, Director, Enterprise Risk Management in 2017. He was promoted to his current position in March 2018.Officer. Mr. Antonakes previously served as the Deputy Director and the Associate Director for Supervision, Enforcement, and Fair Lending at the Consumer Financial Protection Bureau. Prior to joining the Bureau, Mr. Antonakes served as the Massachusetts Commissioner of Banks from 2003 to 2010. Preceding his appointment as Commissioner, Mr. Antonakes served in a variety of managerial positions at the Division of Banks, having joined the agency as an entry-level bank examiner in 1990. During his 25-year regulatory career, Mr. Antonakes staffed the Financial Stability Oversight Council, served as the first state-voting member of the Federal Financial Institutions Examination Council, Vice Chairman of the Conference of State Bank Supervisors, and aswas a founding member of the governing board of the Nationwide Multistate Licensing System. Mr. Antonakes serves on the Board of Trustees of Mass General Brigham Salem Hospital, as Board Emeritus of Camp Fire North Shore, and Chair of the Executive Board of Directors of the Lynn Business Partnership. Mr. Antonakes earned his B.A. from Penn State University, an MBA from Salem State University, and a PhDPh.D. in Law and Public Policy from Northeastern University.
Barbara J. Heinemann - Executive Vice President, Consumer Banking of Eastern Bank
Ms. Heinemann is Executive Vice President of Consumer Banking at Eastern Bank. She joined Eastern in 2001. She has served in her current role since 2017 and oversees Retail Banking, Private Banking, Mortgage Banking and the Customer Service Center, bringing more than 35 years of experience to her role. Ms. Heinemann was previously the Executive Vice President of Enterprise Risk Management overseeing Corporate Security, Corporate Compliance, Bank Secrecy Act Compliance, Information Security and Operational Risk Management Departments from 2014 to 2017. Prior to that she held the title of Executive Vice President, Chief Information Officer at Eastern with responsibilities for the Technology and Operations Divisions, and prior to that held various leadership positions within our Operations Department. Before joining Eastern, Ms. Heinemann spent more than 13 years with Cambridgeport Bank, where she was Director of Retail Banking and then served as Senior Vice President of Technology & Operations for seven years in addition to managing numerous enterprise-wide initiatives. She serves as a trustee of the North Shore Community College, holds Board seats on the North Shore Community College Foundation Board, the New England Automated Clearing House ("NEACH") Board, the NEACH Payments Group Board, and the Burbank Reading YMCA Board of Advisors. She earned an MBA from the University of Maryland and graduated from America's Community Bankers' National School of Banking at Fairfield University, and the Massachusetts Bankers' Association School of Financial Studies at Babson College.
Kathleen C. Henry - Executive Vice President, General Counsel and Corporate Secretary of Eastern Bankshares, Inc.; Executive Vice President, General Counsel, Corporate Secretary and Chief Human Resources Officer of Eastern Bank
Ms. Henry is Executive Vice President, General Counsel and Corporate Secretary of Eastern Bankshares, Inc. and Executive Vice President, General Counsel, Corporate Secretary and Chief Human Resources Officer of Eastern Bank. Ms. Henry joined Eastern Bank in 2016 as General Counsel and Corporate Secretary as a Senior Vice President and was promoted to Executive Vice President in 2018. She oversees a legal team responsible for managing the legal affairs of Eastern Bankshares, Inc. and its affiliates, including Eastern Bank and Eastern Insurance Group LLC. She also serves as the primary legal advisor to Eastern’s Board of Directors, Chief Executive Officer and senior management. She is responsible for serving as Secretary to the Boards of Directors of Eastern Bankshares, Inc. and Eastern Bank, directing all governance activities for Eastern Bankshares, Inc., Eastern Bank and their respective subsidiaries. Ms. Henry who began serving as Chief Human Resource Officer in November
2020 also leads all aspects of talent acquisition and development and compensation and benefits, and is part of the leadership team focused on diversity, equity and inclusion. Before joining Eastern, she was General Counsel and before that Deputy General Counsel of Plymouth Rock Assurance Corporation and a litigation partner at Choate, Hall & Stewart LLP, specializingLLP. Ms. Henry was appointed by Massachusetts Governor Maura T. Healey to serve as Vice-Chair of the Judicial Nominating Commission in insurance and reinsurance litigation.April 2023. Ms. Henry also serves on the board of directors of the Political Asylum Representation Project, on the Advisory Board for the Northeastern University School of Law’s Women in the Law Conference, and as trustee of the Boston Bar Foundation and has served on numerous committees of the Boston Bar Association.Foundation. She earned a B.AB.A. in journalism from Boston University and a J.D. from Northeastern University School of Law.
John F. KoegelTimothy J. Lodge - President &and Chief Executive Officer, of Eastern Insurance Group LLC; Executive Vice President, Eastern Bank
Mr. Koegel isLLCThrough October 31, 2023, Timothy J. Lodge was the President and Chief Executive Officer of Eastern Insurance Group LLC and Executive Vice President(“EIG”), a wholly owned subsidiary of Eastern Bank. Mr. Koegel first joined Eastern Insurance Group LLC in 2003 as Executive Vice President and was promoted to his current position in April 2019. He started his career with the Metropolitan Insurance Company and then worked at American Mutual Insurance Company. In 1989, he joined Allied American Insurance Agency, the predecessor of Eastern Insurance, whereBank, a role he had oversight for both personal and commercial lines. Mr. Koegel has served on the Board for the Massachusetts Association of Independent Agents. During that time he served on the Executive Committee and ultimately became Chairman.held since January 1, 2022. He earned a B.S. from Northwest Missouri State University.
Jan A. Miller - Vice Chair, Chief Commercial Banking Officer of Eastern Bank
Mr. Miller is currently a Vice Chair and the Chief Commercial Banking Officer of Eastern Bank. He joined Eastern as part of its acquisition of Wainwright Bank and Trust Company in 2010. Prior to joining Eastern, he served as President, Chief Executive Officer and director of Wainwright Bank and Trust Company since 1997 and prior to thatpreviously served as Executive Vice President, and Senior Lending Officer. Before joining Wainwright Bank, he spent 19 years with Shawmut National Corporation in a number of positions, including President and Director of Shawmut First County Bank and Business Line Manager, Business Banking, where he was responsibleCommercial Lines for all business banking activity for Shawmut throughout New England. He started his banking career at Bradford National BankEIG from August 2019 to December 2021. Mr. Lodge joined EIG in Bradford, Vermont. Mr. Miller is a Past Chairman of the Board of both the Federal Home Loan Bank of Boston and the Massachusetts Bankers Association. Mr. Miller was an original member of the FDIC Advisory Committee on Community Banking and has served in various leadership positions in banking and community organizations throughout his banking career. Mr. Miller received his B.S. in Finance from Northeastern University.
Nancy Huntington Stager - President and Chief Executive Officer of the Eastern Bank Charitable Foundation; Executive Vice President, Eastern Bank
Ms. Stager is President and Chief Executive Officer of the Eastern Bank Charitable Foundation, an affiliate of the Company, and is Executive Vice President of Eastern Bank. Ms. Stager joined Eastern Bank in 1995July 2013 as Senior Vice President,
Chief Human Resources Officer,Commercial Lines Sales27
Executive, and was promoted to Senior Vice President, Commercial Lines Sales Director in July 2017. He subsequently served as Executive Vice President, in 2008. SheCommercial Lines Sales Director from February 2019 to May 2019 and served as Chief Human Resources Officer until November 2020. Ms. Stager has led the Eastern Bank Charitable Foundation since 2001 and was appointed its first President and Chief Executive Officer in July 2019 In this role, she leads Eastern's philanthropy, volunteerism programming, and civic advocacy. Ms. Stager leads efforts to provide financial assistance and volunteers to support non-profit organizations across Eastern Bank’s footprint. She serves as a leading advocate for social justice issues in line with Eastern Bank’s advocacy platform. She is Board President for the Foundation for Business Equity, a private foundation started through a grant from Eastern Bank Charitable Foundation, which works with Black and Latinx businesses to build capacity and facilitate access to capital and contracts to enable growth. Ms. Stager serves on a number of community boards across the Greater Boston area. Ms. Stager earned a B.S. in Industrial and Labor Relations from Cornell University.
Daniel J. Sullivan - Executive Vice President, Chief Credit Officer of Eastern Bank
Mr. Sullivan is Executive Vice President and Chief Credit Officer of Eastern Bank. Mr. Sullivan joined Eastern Bank in 1996 asCommercial Lines Director of Managed Assets and was promotedMajor Accounts from May 2019 to Chief Credit Officer in 2001. He oversees all credit underwriting, credit training, managed assets and default management for the Bank. He also serves as chair of the Credit Policy and Credit Committee, where credit policies and larger credit requests are approved. In addition, he oversees all loan portfolio reviews. Prior to joining Eastern Bank,August 2019. Mr. Sullivan was a vice president at Shawmut Bank, where he worked in loan workout and as a commercial relationship manager. Mr. Sullivan is an active member of the Risk Management Association (“RMA”) at the national and local levels and is certified by the RMA in credit risk management. HeLodge earned a B.S. in Economicsbachelor’s degree from the University of Lowell.
Fairfield University.Donald M. Westermann - Executive Vice President, Chief Information Officer of Eastern Bank
Mr. Westermann is an Executive Vice President and the Chief Information Officer at Eastern Bank. He joined Eastern in 2007 as Senior Vice President, Technology Engineering & Operations, a position he held until 2010. He served as Senior Vice President, Chief Technology Officer from 2010 to 2015, when he was promoted to Executive Vice President, Chief Information Officer. Currently, he leads the Technology, Operations and Eastern Labs Teams and is responsible for all aspects of the technology, operations and innovation strategy for Eastern, including digital, cyber-security, innovation, software engineering, data management, and delivery. Prior to joining Eastern, Mr. Westermann served as a Senior Manager with Grant Thornton and before that served as a consultant with Arthur Andersen, in each case in positions focused on technology and management information systems. Mr. Westermann earned a B.S. in Business Administration and Management Information Systems from Villanova University and an MBA from the Sloan School of Management of the Massachusetts Institute of Technology.
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) describes the objectives and elements of the Company’s executive compensation program and discusses the 20202023 compensation earned by our NEOsNamed Executive Officers (“NEOs”) listed below.
It also explains the rationale for the Compensation and Human Capital Management (“C&HCM”) Committee’s 20202023 executive compensation decisions.
The year 2020 was unprecedented in our 200+ year history as we transitioned to a publicly traded company in the midst of a global pandemic. As an emerging growth company (“EGC”), we are not required to include a CD&A section in our annual proxy statement; however, the Company is committed to providing robust compensation disclosures. Under SEC rules Our NEOs for EGCs, we are including executive compensation for the following three NEOs:
2023 were: | | | | | |
| Executive Officer | | Title |
| Robert F. Rivers | | Chief Executive Officer and Chair of the Board of Directors, Eastern Bankshares, Inc.; Chief Executive Officer and Chair of the Board of Directors, Eastern Bank |
| |
| Quincy L. Miller | | President, andEastern Bankshares, Inc.; Vice Chair and President, Eastern Bank |
| |
| James B. Fitzgerald | | Chief Administrative Officer, Chief Financial Officer and Treasurer, Eastern Bankshares, Inc.; Vice Chair, Chief Administrative Officer & Treasurerand Chief Financial Officer, Eastern Bank |
| |
| Donald M. Westermann | | Executive Vice President, Chief Information Officer of Eastern Bank |
| |
| Kathleen C. Henry | | Executive Vice President, General Counsel and Corporate Secretary of Eastern Bankshares, Inc.; Executive Vice President, General Counsel, Corporate Secretary and Chief Human Resources Officer, Eastern Bank |
| |
| Timothy J. Lodge (1) | | Former President and CEO of Eastern Insurance Group, LLC (“Eastern Insurance” or “EIG”) |
| | |
(1) Mr. Lodge was the President and CEO of EIG prior to the sale of EIG’s assets to Arthur J. Gallagher & Co. on October 31, 2023.
Executive Summary
Business Overview
We areEastern Bank is a Massachusetts-chartered bank that has served the banking needs of our customers since 1818. 2020Our diversified products and services include lending, deposit and wealth management and we serve consumers, businesses and non-profit organizations through over 100 locations in eastern Massachusetts, and southern and coastal New Hampshire.
2023 Business Overview
Fiscal year 2023 proved to be an exceptional year for the Company. Our proactive strategy and decisive actions propelled us to achieve strong earnings and growth in earnings per share, significantly exceeding expectations. Amidst a tough and competitive banking landscape marked by inflation-driven interest rate hikes, mounting deposit pressures, and heightened customer uncertainty, our accomplishments during 2023 have positioned us for increased strength in the future. Specifically, we strategically executed transactions to fortify our balance sheet and capital position, enhancing earnings and gaining a competitive edge for growth in 2024 and beyond. Key activities included:
| • | | Investment Portfolio Restructuring: We completed a balance sheet repositioning by selling a significant portion of our available- for-sale securities in the first quarter of 2023, enhancing liquidity and reducing our reliance on our wholesale funding. The repositioning significantly improved pro forma earnings and profitability while maintaining robust capital ratios under GAAP and regulatory standards. |
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| • | | Sale of the operations of our Insurance Agency, Eastern Insurance: In the fourth quarter of 2023, we sold substantially all of the assets of Eastern Insurance to Arthur J. Gallagher & Co. (“Gallagher”) for a gross purchase price of $515 million, representing 35 years’ worth of earnings. Acquired over two decades ago, the agency evolved into a premier brokerage firm and became the third largest bank-affiliated insurance brokerage in the country and a top 50 agency overall. The transaction yielded a net after-tax gain upon sale of $294.5 million, allowing us to refocus on core banking goals, redeploy capital for strategic growth, and deliver increased value to our shareholders, employees, and customers. |
The two strategic initiatives noted above positioned us well to enter an Agreement and Plan of Merger on September 19, 2023, to merge with and acquire Cambridge Bancorp and its banking subsidiary Cambridge Trust Company, a 133-year old Massachusetts chartered commercial bank with locations in Massachusetts and New Hampshire, subject to regulatory approvals and other applicable conditions. Combined, we expect to strengthen our leading market share among Massachusetts-headquartered banks and become the largest bank-owned independent investment advisor in Massachusetts.
Driven by the combination of these transformative actions, we posted net income of $232.2 million in 2023, which was 16% higher than our 2022 net income of $199.8 million. Additionally, our core business and key initiatives remained strong despite the challenging economic conditions, as we continued to be a milestone yearleading bank to middle market companies and non-profit organizations in our history as we convertedmarket. Our commercial loans totaled $10 billion at year-end 2023, up from $9.7 billion in 2022, and our home equity loans increased by 1.7% in 2023. We continued to experience strong asset quality, employee engagement, and had near-record achievement in diversity hiring. We also implemented multiple upgrades to enhance our technology platforms during the year.
Compensation Highlights
2023 Executive Compensation Program Decisions At-A-Glance
Our compensation program includes three main components: base salary, short-term cash incentives (as part of our Management Incentive Plan (“MIP”)), and long-term equity compensation (granted pursuant to our equity-based long-term incentive plan (“Equity LTIP”)). Each of these compensation elements serves a mutualspecific purpose in our compensation strategy. Base salary is an essential component to any market-competitive compensation program. Short-term incentives reward the achievement of annual goals, while long- term incentives drive our NEOs to focus on long-term sustainable shareholder value creation.
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Based on our performance and consistent with the design of our program, the C&HCM Committee made the following executive compensation decisions for fiscal year 2023 (see “Our 2023 Executive Compensation Program in Detail” within this CD&A section for more information):
| | |
| |
| Base Salary | | No base salary increases were approved for any of the NEOs. |
Short-Term Incentives | | Award payouts: Limited actual NEO MIP Award payouts for 2023 performance to 100% of their respective target. As described above in the “Business Overview” section of this CD&A, the Company experienced material non-recurring events during the year, most notably the sale of Eastern Insurance at a significant premium to our own valuation, that had not been contemplated when the C&HCM Committee set the initial MIP Net Income Target at the beginning of 2023. These events were largely responsible for actual results significantly exceeding the established target. In its assessment of overall performance results for 2023, the C&HCM Committee concluded that it would be inappropriate to determine the Actual Funding Pool solely on the established MIP Net Income Target because it would result in an unintended windfall to participants. The C&HCM Committee retains discretion to further adjust the award based on its assessment of individual performance but did not make any adjustments for 2023 award payouts. Annual target award opportunities: Targets did not increase from 2022. |
| |
Long-Term Incentives | | Annual equity grants: Structured using the same 50% performance stock units (“PSUs”) and 50% time-based restricted stock units (“RSUs”) equity vehicle mix as 2022. Targets did not increase from 2022. For PSUs, performance is based on the Company’s total shareholder return (“TSR”) relative to the KRX Banks (1) over the three-year performance period. (January 1, 2023-December 31, 2025). If the Company’s relative performance is below the threshold achievement level, no PSUs will be earned. Furthermore, if the Company’s absolute TSR is negative over the performance period, any earned payout will be capped at target. RSUs will vest in equal installments over a three-year period tied to the anniversary of the grant date, March 1, 2023. Legacy Cash-Based LTIP Awards: The Legacy LTIP awards granted to our NEOs in 2019 (“2019 LTIP Awards”) had a value of $12.70 per share when they matured on December 31, 2023. Accordingly, our NEOs received a cash payout under the Legacy LTIP for the 2019-2023 performance period, representing the final step in the transition from our legacy approach of granting 100% cash-based long-term incentive awards to our current approach of 100% equity- based long-term incentive awards (see “Transition of Long-Term Incentive Compensation” below for details). |
(1) “KRX” refers to the KBW Regional Banking Index, an index that is designed to track the performance of regional banks and thrift institutions that are publicly traded company. Our business philosophy remains unchanged:in the U.S. “KRX Banks” refers to operatethe companies that comprise the KRX as of the last day of the performance period, excluding companies that have any of the following characteristics: (1) headquartered in Puerto Rico; (2) announced target of a diversified financial services enterprise providingpending acquisition; and/or (3) less than three years of performance history or trading data.
Transition of Long-Term Incentive Compensation: From Cash to Equity
As we disclosed last year, the structural change to our long-term incentive awards, from historic cash-based awards to an equity-based approach, creates a broad arraytemporary reporting anomaly in the Summary Compensation Table. Specifically, legacy cash awards must be disclosed in the final year of banking and other financial services primarily to retail, commercial and small business customers. Highlights from 2020 include:
•We had total assets of $16.0 billion and $11.6 billion at December 31, 2020 and 2019, respectively.
•We manage our business under two business segments: our banking business, which contributed $495.0 million (which is 83.7%the performance period (when earned), of our total income forwhile stock-based awards are disclosed in the year of the grant. Thus, so long as legacy LTIP cash grants31
are outstanding, we must report two cycles of long-term incentive awards in one year: the earned payout from the prior legacy cash LTIP cycle; and the grant date fair value of equity awards under the current stock-based structure. As illustrated below, for our CEO, this results in an additional $1,524,000 to be reported for 2023 in the Summary Compensation Table, even though the opportunity was established in 2019. This overlap of historic cash LTIP payouts and current equity awards reported in the Summary Compensation Table will not occur in future years, as the final performance cycle under the Legacy LTIP ended December 31, 2020),2023.
Eastern Insurance Sale Transaction Awards for Certain NEOs
As described in the “Business Overview” section above, the completion of the sale of Eastern Insurance to Gallagher was a major factor in the Company’s notable success in 2023. For more than two decades, and ourunder the leadership of its President and CEO, Mr. Lodge, Eastern Insurance grew into one of the premier insurance agencybrokerage firms in the country, making it a highly-valuable enterprise. The success and valuation premium of the sale gave the Company the ability to place a stronger focus on its core long-term goals for the banking business which contributed $96.7 million (which is 16.3%,and redeploy capital for in-market strategic growth opportunities, including the announced merger with Cambridge Bancorp.
This milestone accomplishment required significant, additional efforts by Mr. Lodge, and two primary executive team members: Mr. James Fitzgerald, Chief Administrative Officer, Chief Financial Officer and Treasurer, Eastern Bankshares, Inc.; Vice Chair, Chief Administrative Officer and Chief Financial Officer, Eastern Bank, and Ms. Kathleen Henry, Executive Vice President, General Counsel and Corporate Secretary of Eastern Bankshares, Inc.; Executive Vice President, General Counsel, Corporate Secretary and Chief Human Resources Officer, Eastern Bank.
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In recognition of the extraordinary financial result obtained, and efforts expended, in connection with the sale of Eastern Insurance, and in light of the fact that the sale was not factored into any element of our total income for2023 executive compensation program, the year ended December 31, 2020). Our banking business consistsC&HCM Committee approved one-time, transaction awards of $2 million, $500,000, and $500,000 to Messrs. Lodge and Fitzgerald and Ms. Henry, respectively. Mr. Lodge’s award was delivered in 100% cash and was also in consideration of the termination of his Change in Control Agreement with the Company. Mr. Fitzgerald’s and Ms. Henry’s awards were delivered in 50% cash and 50% equity. The equity portion of the EIG award was delivered using a full rangemix of banking, lending (commercial, residential60% PSUs and consumer), savings40% RSUs, which places a heavier emphasis on performance-based equity and small business offerings, including our wealth management and trust operations that we conduct through our Eastern Wealth Management division.
•Net income for 2020 (computed in accordanceis consistent with generally accepted accounting principles in the United States ("GAAP")) was $22.7 million, as compared to $135.1 million for 2019. Net income for 2020 and 2019 included items that are considered noncore, which are excluded for purposes of assessing operating earnings. Net operating earnings, a non-GAAP financial measure, for 2020 were $102.1 million compared to net operating earnings of $129.7 million for 2019, representing a 21.3% decrease. This decrease was largely driven by an increase in the provision for credit losses and a decrease in net interest income, both of which are attributed to the COVID-19 pandemic.
•Total income for 2020 was $579.6 million, net of interest expense.
•Deposits increased by $2.6 billion, or 27.3%, to $12.2 billion at December 31, 2020 from $9.6 billion at December 31, 2019. This increase was primarily the result of an increase in demand deposits of $1.4 billion, an increase in interest checking deposits of $566.2 million, and an increase in money market deposits of $429.5 million. The average cost of deposits fell from 0.29% in 2019 to 0.10% in 2020.
Our Compensation Committee uses net operating earnings, a financial measure that is derived from net income calculated in accordance with GAAP, to measure the performancestructure of our NEOs. This non-GAAP financial measure is not meantregular, annual LTI grants for 2024 (see “Changes to be considered superior to or a substitute for net income prepared in accordance with GAAP. We believe this measure allows us to compare results consistently between periods and to exclude certain items that may not be indicative of our core business, operating results or future outlook. Our Compensation Committee uses this non-GAAP financial measure as a basis for compensation decisions relating to our short-term incentive compensation as described below. A reconciliation of net operating earnings presented above to the most comparable GAAP financial measure is included in Annex A to this Proxy Statement.
Compensation Highlights
2020 Executive Compensation Program Decisions
for 2024” below). The 2020PSUs will be measured over a three-year performance period (January 1, 2024 -December 31, 2026) based on the Company’s total shareholder return (“TSR”) relative to the KRX Banks over the performance period. The number of earned PSUs can range between 25% (threshold) and 150% (maximum) of the target award. If the Company’s performance is below the threshold achievement level, no PSUs will be earned. If the Company’s absolute TSR is negative over the performance period, any earned payout will be capped at target regardless of relative performance rating. The RSUs will vest in equal installments over a three-year period tied to the anniversary of the grant date, March 1, 2024.These transaction awards were unique to the circumstances of 2023 and do not represent the regular pay program of the Company.
Changes to Our Executive Compensation Program decisions were made whilefor 2024
The C&HCM Committee is committed to putting forth a market-competitive executive compensation program that supports the Company was still a mutual holding companybusiness strategy and thusaligns the 2020 Executive Compensation Program itself does not reflect equity awards. The Compensationinterests of our executives and shareholders. In 2023, the C&HCM Committee worked with the support ofmanagement and its independent compensation consultant Willis Towers Watson, madeto continue to make enhancements to features of the following decisions pertainingprogram, with an expanded emphasis on a long-term incentive program that incentivizes our NEOs to execute on longer-term financial goals that drive shareholder value creation, while also balancing leadership retention objectives.
Effective in 2024, to continue to strengthen alignment with shareholders, the 2020 Executive Compensation Program in accordance with its desireC&HCM Committee placed a heavier emphasis on performance-based equity for the NEOs by changing the mix for annual equity awards from 50% PSUs and 50% RSUs to attract, retain60% PSUs and motivate our highly skilled, talented executives:
| | | | | |
Base Salary | NEOs’ salaries were adjusted between 4.5% and 4.7% as part of the annual executive compensation review based in part on peer market data as provided by Willis Towers Watson. |
Annual Short-Term Incentives | Short Term Incentives for the NEOs were below target and ranged from 64% of salary for Mr. Rivers and 42% of salary for Messrs. Miller and Fitzgerald.These awards reflect both the financial performance of the Company in 2020, which was challenged as a result of the COVID-19 pandemic, and the strong individual performances of the NEOs in successfully driving a number of key strategic initiatives.
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One-Time Discretionary
Awards | As a result of leading Eastern Bank’s response to the Paycheck Protection Program and its successful IPO, Messrs. Miller and Fitzgerald received one-time discretionary cash awards of $110,000 and $220,000 respectively. |
Long-Term
Incentives | No long-term incentive grants were awarded in 2020.Long-term incentive plan grants made in 2016 that matured on December 31, 2020 were paid in 2021. Long-term incentive plan awards are designed to reward NEOs for executing on longer term financial performance (measured as growth in capital and more recently, retained earnings) and safety and soundness objectives in support of the Company’s strategic plan.
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Employment Agreements | No changes were made to the employment agreements the Company has in place with Messrs. Rivers and Miller.Change in control agreements, reflecting a double trigger, were put in place with the Named Executives Officers (and senior executive team) as part of the Company's Conversion (as defined below).
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Future Executive Compensation Program Decisions
Now that40% RSUs. In addition, after several years of keeping target incentive award opportunities unchanged, the
Company has completedC&HCM Committee adjusted the
conversion from a mutual to a publicly traded company (the "Conversion"), the Compensation Committee is reviewing certain aspects of its executive compensation programNEOs’ incentive targets to better align
with public company compensation programs and shareholder value creation. Cash-based long-term incentive grants were not made in 2020 in anticipation that the Company may adopt equity-based long-term incentive plans subject to shareholder approval. The Compensation Committee also plans to review its Supplemental Executive Retirement Plan, as described further below, in coordination with its decision to focus long-term compensation on shareholder value creation going forward. The short-term annual cash incentive program also is under review, and the Compensation Committee did not increase salaries in 2021 for the NEOs or any members of the senior executive leadership team (other than two non-NEOs who received market adjustments). In making any changes to the Executive Compensation program, the Compensation Committee will work closely with management to ensure the changes alignthem with the
Company’smarket: | | | | | | | | |
| Executive Officer | | Short-Term Incentives | | Long-Term Incentives |
| | 2023 MIP Target Award Opportunity (as a % of Salary) | | 2024 MIP Target Award Opportunity (as a % of Salary) | | 2023 LTI Target Award Opportunity (as a % of Salary) | | 2024 LTI Target Award Opportunity (as a % of Salary) |
| Robert F. Rivers | | 90% | | 100% | | 100% | | 150% |
| Quincy L. Miller | | 60% | | 75% | | 60% | | 115% |
| James B. Fitzgerald | | 60% | | 75% | | 60% | | 100% |
| Donald M. Westermann | | 45% | | 60% | | 40% | | 60% |
| Kathleen C. Henry | | 45% | | 60% | | 40% | | 60% |
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Pay Mix
The charts below show the target pay mix for our CEO, Mr. Rivers, and our other current NEOs for fiscal year 2024 as compared to 2023. These charts illustrate that a majority of CEO target total direct compensation philosophy of attracting, retainingfor 2024 is variable at 71%. The average target total direct compensation for our other current NEOs for 2024 is 60% variable. Variable compensation is represented by both MIP and motivating high-caliber executives to achieve the short-term and long-term goals of the Company while creating long-term shareholder value.
annual equity grants at target. (These charts do not include any one-time awards or grants.)Shareholder Advisory Votes on Executive Compensation
At our 2023 annual meeting of shareholders, we received strong support for our NEO compensation program, as 92.3% of the total votes cast on the advisory vote on say-on-pay voted to approve the proposal. The C&HCM Committee has considered, and each year will consider, the results of the prior advisory vote as it reviews and determines the total compensation packages for our NEOs. The Company highly values all forms of input from its shareholders, and the CompensationC&HCM Committee plans to incorporateincorporates this feedback when making compensation decisions going forward. As such, the Company is voluntarily seeking a say-on-pay vote and an advisory vote to hold such say-on-pay votes on annual basis, though neither is a requirement as an EGC. Please see Proposals 2 and 3 in this Proxy Statement for more information.
Compensation Governance Practices
The Company has in place the following executive compensation best practices and policies which promote sound compensation governance and are in the best interests of our shareholders:
| | | | | |
| What We DO | | What We Don’t Do |
☑ Long-time independent Compensation Committee
(including prior to being a publicly-traded company)Heavy emphasis on variable compensation and performance-based incentives | | ☒ No guaranteed incentive payments |
☑ Performance-based variable compensation through formal incentive programsStock ownership guidelines | | ☒ No uncapped non-sales incentive plans |
☑ Annual incentive plan risk assessments | ☒ No significant/excessive perquisites |
☑ Benchmarking against a relevant peer group | ☒ No tax gross-ups |
☑ Double trigger for change in control payments | | ☒ No significant/excessive perquisites |
☑ Clawback policy | | ☒ No tax gross-ups |
☑ Anti-hedging and pledging provisions | | ☒ No severance benefits exceeding 3x base salary and annual cash bonus |
☑ Clawback policyAnnual incentive plan risk assessments | | |
☑ Anti-hedging and pledging provisions | |
☑ Stock ownership guidelines | |
☑ Independent compensation consultant | | |
☑ Annual say-on-pay vote | | |
Philosophy and Objectives of Executive Compensation
Our executive compensation philosophy is to attract, motivate, and retain the executive talent we need to achieve the short-term and long-term goals of the Company while creating long-term shareholder value through the implementation of sound compensation principles and policies. These principles include paying for performance, ensuring equity, fairness and non-discrimination in pay and compensation risk mitigation.
Principal Elements of Compensation
Our executive compensation is comprised of fourprogram has three key elements:
base salary, annual short-term incentive awards, and long-term incentive awards, and benefits.
awards. | | | | | | | | |
Element of 2023 NEO
Compensation | | How it is Paid | | Key Objectives |
| Base Salary | | Cash (Fixed) | | Driven primarily by a NEO’s demonstrated value to the Company and market competitiveness, base salaries are reviewed annually and are set to attract and retain highly skilled, talented executivesexecutives. |
Annual Short-Term Incentive (“STI”) Awards | | Cash (Variable) | | Incentivizes a NEO to achieve short term (annual) financial and strategic goals, with much greater weighting towarda pool funded by Company performance than individual performance whenon key metrics determining award size, along with individual targets and performance. |
Long-Term Incentive (“LTI”) Awards*Awards | Cash* | Most recently granted in 2019, LTI awards provideEquity (Variable) | | Provides incentives for NEOsexecutives to execute on longer termlonger-term financial performance (growth in capitalgoals that drive shareholder value creation and more recently, retained earnings) and safety and soundness objectives in support of the Company’s strategic plan |
Benefits | Cash & Other | NEOs participate in a defined benefit pension plan, a 401(k) plan, limited perquisites and other personal benefits. Retirement benefits provide the ability for retirement savings and were the primary vehicle for long-term compensation as a mutual. Perquisites were limited to those that assist the NEOs in the fulfilment of their dutiestalent retention objectives. |
* Grants under the LTI Plan were last made in 2019; the Company does not currently have a shareholder-approved equity-based long-term incentive plan through which to make equity grants to NEOs.
In connection with our IPO, the Company adopted an Employee Stock Ownership Plan (“ESOP”), as described below, and our NEOs received their first stock allocation under the ESOP for fiscal year 2020 in March of 2021. The ESOP is not an incentive plan. Rather, shares purchased by the ESOP’s trustee for a particular year are allocated among eligible ESOP participants on the basis of each participant’s proportional share of compensation relative to the compensation of all participants.
Pay Mix
Our executive compensation includes a mix of base salary, STI grants and LTI grants. The Company does not have a formal policy regarding the allocation of compensation for its NEOs among these three core compensation elements. A material portion of the targeted total compensation opportunity for each of our NEOs is directly tied to the financial performance of the Company relative to the applicable compensation plan and relative to the peer group noted above. The CEO’s compensation has a greater emphasis on variable compensation than that of the other two NEOs because his actions have a greater influence on the performance of the Company as a whole. For 2020, a significant amount of total direct compensation was variable: 67.4% for the CEO, 64.9% for Mr. Miller and 67.1% for Mr. Fitzgerald.
Process for Determining Executive Officer Compensation
The Role of the Compensation and Human Capital Management Committee
The CompensationC&HCM Committee is composed entirely ofnon-employee directors who meet the Nasdaq standards for independence, including the heightened standards applicable to compensation committee members. The CompensationC&HCM Committee oversees executive compensation of our executive officers, including our NEOs, and is comprised of independent, non-employee members of the Board of Directors.NEOs. The CompensationC&HCM Committee regularly reviews the structure of our executive compensation program to ensure it aligns
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with Company strategy, philosophy, market practices, risk tolerance and, now that the Company is publicly traded, the interests of our shareholders. The CompensationC&HCM Committee reviews compensation and performance of peer companies (detailed below) as it considers executive compensation. The CompensationC&HCM Committee’s specific responsibilities are set forth in its charter, which can be found on the Company’s Investor Relations website at investor.easternbank.com under “Governance Documents” in the “Corporate Governance” section. The CompensationC&HCM Committee approves all NEO compensation, other than that of our CEO, including base salary, short term incentives and long-termlong term incentives. The CompensationC&HCM Committee also recommends our CEO’s compensation, which is approved by the independent members of the Board.
Select senior members of our management team attend regular meetings of the CompensationC&HCM Committee at which executive compensation, Company performance, peer group, market and competitive compensation levels and compensation policies and practices are discussed, including in executive session without other management members present. However, only members of the CompensationC&HCM Committee vote on decisions about NEOcompensation for our NEOs (other than our CEO), and the independent members of our Board of Directors vote on our CEO’s compensation. Our CEO is not involved in decisions or deliberations about his own compensation, but he does make recommendations regarding non-NEOnon-CEO executive compensation in consultation with the CompensationC&HCM Committee.
The Role of Our Independent Compensation Consultant
The CompensationC&HCM Committee has the authority to engage its own advisors to assist it in carrying out its responsibilities. As part of its oversight of executive compensation and director compensation, the CompensationC&HCM Committee seeks input from its independent compensation consultant. In connection with 20202023 executive compensation decisions, the CompensationC&HCM Committee engaged Willis TowersPearl Meyer to advise the CompensationC&HCM Committee on the amount and form of executive compensation. In December 2020, the Compensation Committee engaged Pearl Meyer as its new independent compensation consultant. In the instance of either firm, theThe independent compensation consultant reports directly to the CompensationC&HCM Committee and does not provide any other services to the Company. The CompensationC&HCM Committee has conducted an independence assessment of both Willis Towers and Pearl Meyer in accordance with SEC and Nasdaq listing rules. Based on this review and in reliance upon a letter from eachthe firm confirming its respective independence based on factors set forth in the Nasdaq rules for compensation committee advisors, the CompensationC&HCM Committee determined that each firmPearl Meyer is an independent advisor.
The Role of Peer Market Data
With the assistance of its independent compensation consultant, the Compensation Committee utilizesWe believe that a peer group of publicly traded companiescompetitive pay package is a critical tool in our efforts to benchmark executive compensation programsattract and practices and compare key performance metrics. For 2020,retain qualified executives. The C&HCM Committee’s goal is to ensure that we continue to measure our compensation peer group included the following 16 companies, all ofpractices against organizations that compete with us for key executives, which are publicly traded commercial banks:
| | | | | | | | |
Atlantic Union Bankshares Corporation | CVB Financial Corporation | Pacific Premier Bancorp, Inc. |
Banc of California, Inc. | First Midwest Bancorp Inc. | Provident Financial Services, Inc. |
Berkshire Hills Bancorp Inc. | Fulton Financial Corporation | Umpqua Holdings Corporation |
Boston Private Financial Holdings | Independent Bank Corp. | Webster Financial Corporation |
Community Bank System Inc. | Investors Bancorp Inc. | |
Columbia Banking Systems, Inc. | NBT Bancorp Inc. | |
considered important benchmarks in our industry, and that are comparable in size and scope to our business.The CompensationC&HCM Committee uses a criteria-based approach in selecting peer companies.
The criteria includes:include banks and thrifts on a national exchange, geography (U.S.-based and major metropolitan areas), financial institutions of similar size (asset size(assets and revenue ranging from .05x0.5x to 2.5x2.0x the Company’s size);, similar major business line mix; location (East or West coasts or in major metropolitan areas where talent acquisitionloan mix, and comparable market capitalization. For purposes of setting 2023 compensation can be more competitive; and those that competelevels, our compensation peer group included the following 19 companies, all of which were publicly traded commercial banks at the time of their selection to our peer group: | | | | | | |
| | Ameris Bancorp. | | Glacier Bancorp, Inc. | | Pinnacle Financial Partners, Inc. |
| | Atlantic Union Bankshares Corporation | | Independent Bank Corp. | | Simmons First National Corporation |
| | Bank OZK | | Independent Bank Group, Inc. | | SouthState Corporation |
| | BankUnited, Inc. | | Old National Bancorp. | | United Bankshares, Inc. |
| | Cathay General Bancorp | | Pacific Premier Bancorp, Inc, | | United Community Banks, Inc. |
| | F.N.B. Corporation | | PacWest Bancorp, Inc. | | Valley National Bancorp |
| | Fulton Financial Corporation | | | | |
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In 2023, the C&HCM Committee, with the Companyassistance of Pearl Meyer, refreshed the Company’s peer group, removing two companies for businessreasons due to merger and talent.
acquisition activity and replacing them with four peers that meet our criteria. As part of this review and update, the peer group used for 2024 compensation decisions was modified as follows: | | |
| Removed | | Added |
| Old National Bancorp. | | First Financial Bancorp. |
| Valley National Bancorp | | Trustmark Corporation |
| | Washington Federal, Inc. |
| | WSFS Financial Corporation |
In addition to peer group data, the CompensationC&HCM Committee also considers other factors when setting NEO compensation, including the skill sets of the NEOs, their individual performances, Company performance, retention risk, their tenure with the Company and succession planning.
Our 20202023 Executive Compensation Program in Detail
As noted above, baseBase salaries of our NEOs are set at a level to maintain market competitiveness in attracting and retaining highly skilled, talented executives. Base salaries of NEOs are reviewed annually by the CompensationC&HCM Committee (or by the independent members of the Board of Directors, as to the CEO) and any increases are driven primarily by a NEO’s demonstrated value to the organization and tenure in the position, as well as internal equity and market competitiveness. Meritcompetitiveness considerations. For fiscal year 2023, no base salary increases were approved for any NEOs.
| | | | | | |
| Named Executive Officer | | Fiscal Year 2022 Salary | | Fiscal Year 2023 Salary | | Percentage
Increase |
| | | | |
Robert F. Rivers* | | $995,000 | | $995,000 | | —% |
| | | | |
Quincy L. Miller | | $590,000 | | $590,000 | | —% |
| | | | |
James B. Fitzgerald | | $590,000 | | $590,000 | | —% |
| | | | |
Donald M. Westermann | | $463,500 | | $463,500 | | —% |
| | | | |
Kathleen C. Henry | | $463,500 | | $463,500 | | —% |
*This is the third consecutive year with no increase to the CEO’s base salary, as the Company has increasingly focused on performance and equity-based compensation.
Short-Term Incentive Plan
The MIP provides for the payment of annual cash incentive awards to the Company’s CEO, its other NEOs, members of its management committee, and select management employees (“Participants”). The C&HCM Committee believes the MIP further aligns its executive officers’ incentives with shareholder value creation. Each year (as defined below), a Participant is assigned a target award opportunity as a percentage of base salary, based in part on job responsibilities and market data. The table below summarizes the annual incentive target opportunity for 2023 for the NEOs set forth below, which did not change from 2022.
| | | | | | |
Named Executive Officer | | Fiscal Year 2023 Salary | | MIP Target Award
Opportunity (as a % of
Salary) (1) | | MIP Target Award
Opportunity ($) |
Robert F. Rivers | | $995,000 | | 90% | | $895,500 |
Quincy L. Miller | | $590,000 | | 60% | | $354,000 |
James B. Fitzgerald | | $590,000 | | 60% | | $354,000 |
Donald M. Westermann | | $463,500 | | 45% | | $208,575 |
Kathleen C. Henry | | $463,500 | | 45% | | $208,575 |
(1) For purposes of MIP calculations, “Base Salary” refers to a NEO’s year-end base salary rate.
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Actual award payouts are awardeddetermined by measurement against one or more corporate performance measures (“Company Performance Measures”). Company Performance Measures are approved by the C&HCM Committee, and annual targets with respect to such performance measures are established by the Board of Directors.
All awards are paid from a funding pool. The target funding pool (“Target Funding Pool”) is an amount equal to the sum of all Participants’ target awards for the year. After the end of the year, the C&HCM Committee determines performance against the applicable Company Performance Measures including whether minimum performance thresholds have been met. The funding pool from which awards under the MIP (“MIP Awards”) are actually paid (“Actual Funding Pool”) is an amount that is based on the Target Funding Pool but is adjusted to reflect the Company’s performance against the Company Performance Measures for such year. The C&HCM Committee may adjust the level or nature of Company Performance Measures to accommodate non-recurring events not contemplated when such measures were originally set, such as an acquisition or divestiture by the Company or realized securities gains/losses, and has the sole discretion to adjust the Target Funding Pool and/or the Actual Funding Pool amounts upward or downward, based on market factors, corporate events, future performance outlook, or any other situation it may deem appropriate.
Individual MIP Awards are paid out of the Actual Funding Pool. The MIP Awards for the Company’s executive officers other than the CEO are approved by the C&HCM Committee. The MIP Award for the CEO is approved by the independent members of the Board of Directors, upon recommendation from the C&HCM Committee. The independent members of the Board and the C&HCM Committee, respectively, have discretion to modify the individual MIP payouts for executives based on the CEO’s and the other NEOs’ performance.
Company Performance Measure
For 2023, the C&HCM Committee approved GAAP Net Income as the Company Performance Measure under the MIP (“MIP Net Income”). The C&HCM Committee chose MIP Net Income because it believes that it provides a useful metric in understanding the Company’s earnings performance.
Amid the challenging macroeconomic factors impacting regional financial institutions in early 2023, including the high interest rate environment that was putting pressure on net interest margins, the C&HCM Committee set the MIP Net Income Target at $145.7 million, which was aligned with our budget, and reflective of the challenges within the banking industry conditions at the time. The C&HCM Committee also established a minimum performance threshold of 80% of the MIP Net Income Target in order for any MIP Awards to be earned by our NEOs.
As described above in the “Business Overview” section of this CD&A, the Company executed material non-recurring events during the year, most notably the sale of Eastern Insurance at a significant premium, as well as the securities sale with a related loss, that had not been contemplated when the C&HCM Committee set the initial MIP Net Income Target at the beginning of 2023. These events had a significant positive impact on our net income results of $232.2 million, which was 16% higher than our 2022 results of $199.8 million. Based on the business circumstances of 2023 and its holistic assessment of overall performance, the C&HCM Committee concluded that it would be inappropriate to determine the Actual Funding Pool solely on the established MIP Net Income Target of $145.7 million because that would result in an unintended windfall to participants. Instead, the C&HCM Committee exercised downward discretion and limited NEO payouts to target. While the independent members of the Board of Directors and C&HCM Committee have discretion to adjust MIP Awards based on individual performance, they did not make any such adjustments for 2023 awards.
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2023 MIP Award Payouts
The table below summarizes the 2023 MIP awards earned by each of the NEOs who remains an officer:
| | | | | | |
| Named Executive Officer | | MIP Award Earned in 2023 ($) (1) | | MIP Award as % of Target Award | | MIP Award as % of Base Salary (1) |
| Robert F. Rivers | | $895,500 | | 100% | | 90% |
| Quincy L. Miller | | $354,000 | | 100% | | 60% |
| James B. Fitzgerald | | $354,000 | | 100% | | 60% |
| Donald M. Westermann | | $208,575 | | 100% | | 45% |
| Kathleen C. Henry | | $208,575 | | 100% | | 45% |
(1) For purposes of MIP calculations, “Base Salary” refers to a NEO’s year-end base salary rate
Long-Term Incentive Compensation
The Company’s philosophy on long-term incentive compensation is to grant awards that provide incentives for NEOs to execute on longer term financial performance objectives.
2023 Equity-Based LTIP Awards
Equity-based LTIP awards for 2023 were structured to reflect the C&HCM Committee’s commitment to putting forth a long- term incentive program that incentivizes executives to execute on longer-term financial goals that drive shareholder value creation and are made in accordance with a merit budget, which is determined annually based on market conditions andsupports the Company’s overall budget. Separate merit increases may be established for different positions leadership retention objectives, delivering awards using a mix of performance-based and time-based equity vehicles. Following vesting, shares are delivered net of any shares withheld to meet the recipient’s tax obligations. The 2023 awards were structured as follows:
| | | | | | | | |
| Equity Vehicle | | Weight | | Design At-A-Glance |
| | | | • Rewards achievement of financial goals measured over a three-year performance period (January 1, 2023 — December 31, 2025) and puts appropriate focus on long-term alignment and pay relative both to market peers and shareholder returns. • Performance is measured based on the Company’s total shareholder return (“TSR”) relative to the KRX Banks* over the performance period. • The number of earned PSUs can range between 25% (threshold) and 150% (maximum) of the target award. If the Company’s performance is below the threshold achievement level, no PSUs will be earned. • If the Company’s absolute TSR is negative over the performance period, any earned payout will be capped at target regardless of relative performance rating. |
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| | | | | | | | |
| Equity Vehicle | | Weight | | Design At-A-Glance |
| Performance Shares Units (PSUs) | | 50% (at Target) | | Performance Level (Relative Ranking) | | PSUs Earned at the End of the Performance Period (% of Target) |
| | | | |
| | | | Less than 25th Percentile | | Below Threshold | | —% |
| | | | |
| | | | 25th Percentile | | Threshold | | 25% |
| | | | |
| | | | 50th Percentile | | Target | | 100% |
| | | | |
| | | | 75th Percentile or Higher | | Maximum | | 150% |
| | |
| | | | Note: Payouts are linearly interpolated for performance between threshold and maximum. |
| Restricted Stock Units (RSUs) | | 50% | | RSUs will vest in equal installments over a three-year period tied to the anniversary of the grant date, March 1, 2023. |
*“KRX” refers to the KBW Regional Banking Index, an index that is designed to track the performance of regional banks and thrift institutions that are publicly traded in the U.S. “KRX Banks” refers to the companies that comprise the KRX as of the last day of the performance period, excluding companies that have any of the following characteristics: (1) headquartered in Puerto Rico; (2) announced target of a pending acquisition; and/or levels, based on market conditions. For(3) less than three years of performance history or trading data.
The table below shows the target long-term incentive award values granted in fiscal year 2020, the Compensation Committee approved base salary increases2023 for each of the NEOs who is currently serving as indicated below. For fiscal year 2021, the Compensation Committee has approved no salary increasesan officer:
| | | | | | | | | | |
Named Executive
Officer | | Fiscal Year
2023 Salary | | LTI Target Award
Opportunity (as a %
of Salary | | PSUs (at Target) | | RSUs | | LTI Target Award
Opportunity ($) |
| | | | | | |
| Robert F. Rivers | | $995,000 | | 100% | | $498,000 | | $498,000 | | $996,000 |
| | | | | | |
| Quincy L. Miller | | $590,000 | | 60% | | $177,000 | | $177,000 | | $354,000 |
| | | | | | |
James B. Fitzgerald | | $590,000 | | 60% | | $177,000 | | $177,000 | | $354,000 |
| | | | | | |
Donald M. Westermann | | $463,500 | | 40% | | $93,000 | | $93,000 | | $186,000 |
| | | | | | |
Kathleen C. Henry | | $463,500 | | 40% | | $93,000 | | $93,000 | | $186,000 |
*Actual award amounts for executive officers, other than for two non-NEO executive officers who received market-based adjustments.
| | | | | | | | | | | |
| Fiscal Year
2019 Salary | Fiscal Year
2020 Salary | Percentage Increase |
Robert F. Rivers
Chief Executive Officer and Chair of the Board of Directors | $950,000 | $995,000 | 4.7 | % |
Quincy L. Miller
President and Vice Chair | $550,000 | $575,000 | 4.5 | % |
James B. Fitzgerald
Chief Administrative Officer, Chief Financial Officer and Treasurer | $550,000 | $575,000 | 4.5 | % |
Annual Short-Term Incentive Plan
Our NEOs are eligible to earn annual performance-based cash incentives under the Company’s short-term incentive plan, called our Management Incentive Plan (“MIP”). NEO MIP awards are weighted 70% on Company performanceRSUs and 30% for individual performance. MIP awards are capped and can range from 0% to 120% of base salary for the CEO, and 0% to 80% of base salary for Messrs. Miller and Fitzgerald.
| | | | | | | | | | | |
| Minimum % of
Base Salary (1) | Target % of
Base Salary (1) | Maximum % of
Base Salary (1) |
| Robert F. Rivers | 40 | % | 80 | % | 120 | % |
| Quincy L. Miller | 25 | % | 50 | % | 80 | % |
| James B. Fitzgerald | 25 | % | 50 | % | 80 | % |
(1)For purposes of MIP calculations, "Base Salary" refers to a NEO's year-end base salary rate
NEOs' awards arePSUs at target levels were determined using two performance components: corporate performance and individual performance. Goals for each performance component are established annually by the Compensation Committee.
For 2020, the goals for the corporate performance component of the MIP included financial performance goals and key Company initiatives:
•Obtaining regulatory and corporator approval of the Conversion and IPO;
•Maintaining strong compliance ratings from the Company's regulators;
•Financial results of $102.1 million of after-tax core net income for the year (excluding costs associated with the IPO, including the donation of stock to the Eastern Bank Charitable Foundation valued at $91.3 million), also known as net operating earnings; and
•Successful operation as a public company.
For 2020, the Board of Directors determined that the three non-financial corporate performance goals had been met, with financial results of after-tax core net income below goal, resulting in a “2” performance rating .As such, the corporate performance component was funded at 85% of target.
The Compensation Committee established individual performance goals for each NEO at the beginning of 2020:
•Mr. Rivers – Received the highest individual performance rating, based on the resultsclosing price of Company common stock on the CEO performance evaluation,date of grant on March 1, 2023, which considered his performance againstwas $15.63 per unit. The stock award values shown in the following four goals: (1) successful implementation of IPO/growth; (2) 2020 business plan; (3) organizational development;Summary Compensation table vary slightly from the above due to, as shown in the Summary Compensation Table, (i) actual units granted were in whole units only and (4) brand, community and industry leadership.
•Mr. Miller – Received the highest individual performance rating, based upon his outstanding leadership of Eastern Bank's Consumer and Business Banking and Wealth Management lines of business to strong results, highlighted by record mortgage loan production, and its tenth consecutive year as the top U.S. Small Business Administration lender in New England, despite COVID-19 pandemic-related challenges.
•Mr. Fitzgerald – Received the highest individual performance rating, based upon his leadership as Chief Administrative Officer, with significant accomplishments within the areas of Technology, Operations, and Facilities such as the transition of over 60% of employees to remote work environments and the completion of the upgrade of our online and mobile banking platforms.
For 2020, the Compensation Committee approved MIP awards as described below:
| | | | | | | | | | | | | | |
| Corporate | Individual | MIP Award Earned in 2020 ($) (1) | MIP Award as % of Base Salary (2) |
| Robert F. Rivers | $ | 278,600 | | $ | 358,200 | | $ 637,000 | 64 | % |
| Quincy L. Miller | $ | 101,000 | | $ | 138,000 | | $ 239,000 | 42 | % |
| James B. Fitzgerald | $ | 101,000 | | $ | 138,000 | | $ 239,000 | 42 | % |
(1)Final(ii) award amounts are rounded upfor PSUs related to TSR performance were determined using the nearest thousand
(2) For purposes of MIP calculations, "Base Salary" refers to a NEO's year-end base salary rate
Monte Carlo valuation model.Frozen LTIP Awards (Final Vesting and Payouts Under the Legacy LTIP)
The Compensation Committee is evaluating the MIP in 2021 to determine any changes in light of the Company’s IPO and to align the program with shareholder value creation.
Cash Bonuses
In addition to the MIP award, the Compensation Committee approved a discretionary, one-time cash bonus for Mr. Miller of $110,000 in recognition of the leadership role he played in Eastern Bank’s successful response to the Small Business Administration’s Paycheck Protection Program ("PPP"), pursuant to which the Bank made $1.2 billion in loans, resulting in $13.9 million of net fee income in 2020. The Compensation Committee also approved a one-time cash bonus for Mr. Fitzgerald of $220,000 in recognition of his considerable role in executing the Company's successful IPO in a difficult market environment affected by the global COVID-19 pandemic, which offering raised $1.7 billion in capital.
Long-Term Incentive Plan
Eastern’s Long-Term Incentive Plan (“LTIP”)legacy LTIP is a deferredcash-based compensation plan that was designed to link incentive compensation of NEOs and (other selected executive and senior officers) to factors such as the growth of Eastern’s capital, or, after the IPO,net income, Eastern’s retained earnings.
2020 Awards
The Compensation Committee did not make LTIP grants in 2020 and does not plan to grant them in 2021, in anticipation of the Company's future adoption of equity-based long-term incentive plans, which will be subject to shareholder approval.
Vesting of Previous LTIP Awards
Long-Term Incentive Plan awards (“LTIP awards”) granted by the Compensation Committee are based on targets for cash compensation over a five-year grant cycle and represent a percentage of the NEO’s base salary in the year granted. For example, for the 2016 grant year, which awards matured December 31, 2020, the target amounts for Messrs. Rivers, Miller and Fitzgerald represented 60% of their 2016 base salary. The most recent LTIP awards were granted in 2019.
Generally, LTIP awards were made in June and valued as of December 31 of each year in the five-year grant cycle for such award. LTIP awards generally are paid in a taxable lump sum, less applicable withholdings, in the calendar year following the last year of the five-year grant cycle. For example, the LTIP awards granted to our NEOs in June of 2016 matured on December 31, 2020 and were paid in March 2021 (including interest from the maturity date through the payment date).
The value of the remaining outstanding LTIP awards will continue to be based primarily upon growth in Eastern’s capital or adjusted retained earnings, as applicable, and will not be tied to the value of our common stock. In calculating the growth in capital and adjusted retained earnings for periods after the IPO for purposes of LTIP target amounts, our Board of Directors excludes the proceeds from the IPO, as well as a theoretical return on the reinvestment of such proceeds partially offset by any direct and indirect costs of the offering, including incremental expenses required by the Conversion in connection with the IPO. After the five-year grant cycle for an LTIP award ends and the final appreciation is determined based on the cumulative growth in Eastern’s capital or adjusted retained earnings, as applicable, the Board of Directors may apply a modifier in its discretion based on the Company's performance. The modifier can increase or decrease the value of the LTIP awards by up to 20%, as applied to the cumulative appreciation, to determine the final value of the LTIP awards then due to be paid. The two factors used by the Board of Directors to determine the application of the modifier are the Company’s performance during the prior five-year period relative to the group of peer banks and the Board of Directors’ assessment of management’s performance during the prior five-year period, using an assessment framework similar to the six-factor Uniform Financial Institutions Rating System commonly referred to as CAMELS ratings.
In March 2021, Messrs. Rivers, Miller and Fitzgerald received payments of $1,409,340, $704,670 and $704,670 respectively, for LTIP awards made in 2016 and that matured on December 31, 2020. These amounts include interest paid thereon from the maturation through the payment date. These payments reflect the Board of Directors' application of a +20% modifier recommended by the Compensation Committee based on both very strong Company performance as compared to peer banks over the past five years and strong FDIC Improvement Act Safety & Soundness Exam ratings over the same period. The table below shows for Messrs. Rivers, Miller and Fitzgerald the amounts that we paid for LTIP awards that were granted in 2016 and matured on December 31, 2020 (paid in March 2021 and including interest), as well as the estimated values as of December 31, 2020 of LTIP awards granted in 2017 through 2019. The value of LTIP awards granted in 2017 through 2019 will change, as described above, based primarily on the cumulative growth in our capital or adjusted retained earnings, as applicable.other factors. The LTIP was “frozen” in 2020 such that noin anticipation of the Company’s IPO and transition to an equity-based long-term incentive plan, and the last awards were made after 2019, although payments for past LTIP awards will be providedgranted in accordance with their terms. Outstanding LTIP awards are subject to three-year vesting with
accelerated vesting for participants who satisfy retirement eligibility. Mr. Rivers and Mr. Fitzgerald are fully vested in all of their LTIP awards.
| | | | | | | | | | | | | | | | | |
| Long-Term Incentive Plan Payments (Grant Year / Payment Year) |
| Estimated Values as of December 31, 2020 |
| Granted 2016
Payable in 2021(1) | Granted 2017
Payable in 2022 (2) | Granted 2018
Payable in 2023 (2) | Granted 2019
Payable 2024 (2) | Total |
| Robert F. Rivers | $ | 1,409,340 | | $ | 1,482,000 | | $ | 1,090,720 | | $ | 430,800 | | $ | 4,412,860 | |
| Quincy L. Miller | $ | 704,670 | | $ | 494,000 | | $ | 401,000 | | $ | 143,600 | | $ | 1,743,270 | |
| James B. Fitzgerald | $ | 704,670 | | $ | 494,000 | | $ | 401,000 | | $ | 143,600 | | $ | 1,743,270 | |
(1)These amounts include interest paid thereon from the date of maturation through the date of payment.
(2)Values for LTIP awards payable in 2022-2024 are estimated as of December 31, 2020 and subject to change under2019. Under the terms of the LTIP.
Other Programs
Benefit Plans
401(k) Plan. Our 401(k) Plan allows executives and other plan participants to make elective deferrals of their compensation to the 401(k) Plan up to limits of the Internal Revenue Service ("IRS") and in 2020 the Company made a safe harbor contribution to eligible participants’ accounts equal to 3% of the participant’s plan compensation earned during the plan year subject to IRS limits.
Employee Stock Ownership Plan. In connection with the Company's IPO, Eastern Bank adopted the ESOP, an employee stock ownership plan, for eligible employees. At the time of the offering, the ESOP trustee purchased 14,940,652 shares of the Company’s common stock funded with a loan from the Company. The loan will be repaid principally through Eastern Bank’s contribution to the ESOP and dividends, if any, payable on common stock held by the ESOP over the term of the loan. The ESOP’s independent trustee holds the shares purchased by the ESOP in an unallocated suspense account, and releases shares on a pro-rata basis as the loan is repaid. Released shares are allocated among participants on the basis of each participant’s proportional share of compensation relative to the compensation of all participants. In December 2020, a portion of the loan was repaid, and in March 2021, the ESOP trustee allocated shares to eligible participants for the first time. The allocation was made in respect of the post-IPO portion of 2020. Mr. Rivers, Miller and Fitzgerald each received allocations of 104 shares (fractional shares have been rounded down). The Company expects that allocations will be made annually to eligible participants in accordance with the terms of the ESOP.
Defined Benefit Pension Plan. Eastern Bank provides pension benefits to its employees, includingLTIP, our NEOs through membership in the Savings Bank Employees’ Retirement Association (“SBERA”). The plan is a noncontributory, defined benefit plan. Our annual contribution to the defined benefit plan is based upon standards established by the Pension Protection Act. Effective November 1, 2020, the defined benefit pension plan converted from a “traditional pension plan” with a benefit formula based on age, service and salary, to a “cash balance” defined benefit plan. This conversion is expected to result in cost savings for the Company.
Supplemental Executive Retirement Plan. Eastern maintains a supplemental executive retirement plan (“SERP”), in which Messrs. Rivers, Miller and Fitzgerald currently participate. Under the SERP, each executive becomes entitledwere eligible to receive a benefit following his or her separation from service. Duringpayout in 2024 for awards made in 2019 (“Final Outstanding LTIP Awards”), respectively.40
Final Outstanding 2019 LTIP Awards. For the executive’s service with2019 Awards, which matured December 31, 2023, the Company, his account is credited monthly by Eastern Bank at 20%LTIP opportunity was set in 2019 and those awards were primarily based on cumulative growth of his salaryretained earnings over the five year period, which was 55.21%. The award includes a +15% modifier based on Eastern’s ratings on the Safety and 20% target short-term incentive (subject to adjustment whenSoundness Examination over the actual short-term incentive is determined). Each executive’s SERP benefit vests over a 10-yearfive-year period, commencing at 50% after five yearsas well as performance against peers on key metrics. The table below shows the value of service and 10% each year thereafter. However, a participant will be fully vested if retirement eligible or upon death or disability. Messrs. Rivers and Fitzgerald are fully vested due to being retirement eligible. The Company is reviewing the SERP in 2021.
Benefits Equalization Plan. Eastern Bank maintains a non-qualified benefits equalization plan (“BEP”) to provide a pension supplement to restore pension benefitsFinal Outstanding 2019 LTIP Awards for employeesour NEOs who are not eligible for the SERP and whose compensation exceeds the annual statutory compensation maximum that can be considered under the defined benefit plan, and/or exceeds the annual permitted pension benefit amount under the Internal Revenue Code. The benefit formula is the same as provided in the defined benefit pension plan, with an offset for benefits provided by that plan. Benefits generally are paid in a lump sum in the
January following retirement or death. In connection with the conversion of the defined benefit pension plan to a cash balance plan, the BEP was also amended to a cash balance format on November 1, 2020. None of the NEOs participated in the BEP in 2020.
409A Deferred Compensation Plan. Eastern Bank maintains a 409A Deferred Compensation Plan (“409A Plan”) that allows directors and selected executives of Eastern Bank to defer compensation under a non-qualified deferred compensation plan. As of December 31, 2020, none of the NEOs participated in the 409A Plan. Amounts deferred are fully vested. Although employer contributions are permitted, none have been made to date.
Executive Perquisites
Executive perquisites are not a core component of our executive compensation program. We do offer, however, our NEOs allowances for automobiles, gas and parking. Our NEOs are entitled to reimbursement for costs associated with membership in a country club, but all of our NEOs declined to accept these club fees in 2020.
current officers. | | |
| Named Executive Officer | | Granted
2019 Payable in
2024 |
| |
| Robert F. Rivers | | $1,524,000 |
| |
| Quincy L. Miller | | $508,000 |
| |
| James B. Fitzgerald | | $508,000 |
| |
| Donald M. Westermann | | $254,000 |
| |
| Kathleen C. Henry | | $190,500 |
Other Compensation Practices, Policies and Guidelines
Clawback Policy
The Compensation Committee believes that it is a compensation governance best practice and a reinforcement of the Company’s compensation philosophy to have in place a Clawback Policy, which calls for the recovery of incentive-based compensation awards to the NEOs, other executive officers and other covered employees if the relevant performance measure upon which the award is based is restated in a manner that would reduce the size of an award. The Clawback Policy empowers the Compensation Committee to recover such excess compensation received during the three completed fiscal years preceding the date on which the Board of Directors determines an accounting restatement is required to be filed with the SEC to correct a material non-compliance with any financial reporting requirements under applicable securities laws.
Stock Ownership Guidelines
The Company’s Board of Directors believes that the Company’s directors, including the CEO,most senior executives (including its NEOs) should hold meaningful equity ownership positions in the Company, in part to align directors’the NEOs’ interests with those of the Company’s shareholders. Accordingly,Under the Board of Directors has adopted themanagement stock ownership guidelines, each NEO is required to hold shares of the Company’s stock as set forth below. Each director is expected to achieve the applicable stockbelow:
| | |
| Title | | Multiple of Annual Base Salary |
| Chief Executive Officer | | Five (5) Times |
| |
| President and the Chief Financial Officer/Chief Administrative Officer | | Three (3) Times |
| |
| All Other Executive Officers | | Two (2) Times |
To attain this ownership threshold, withineach NEO will have the longer of five (5) years of eitherfrom (i) the date of implementation of thesethe stock ownership guidelines (June 2020)(September 2021), or (ii) the date the director is first elected to the Board of Directors, whichever is later; each director’s stock holdings will be valued annually:
•Non-employee directors shall hold five times the value of their cash retainers in sharesthat a NEO becomes a member of the Company’s stock;
•The CEOmanagement committee. There shall hold four timesbe a one-year holding period for 50% of a NEO’s vested shares (except in order to satisfy tax withholding obligations or to satisfy payment of an option exercise price) until the value ofNEO has met, and continues to meet, his or her annual base salary inapplicable minimum holding requirement.Holdings that satisfy a NEO’s stock ownership requirement include all outstanding shares held, shares held through a 401(k), savings and profit-sharing plans, and all unvested time-based RSUs awarded to a NEO. Unvested awards of PSUs, stock options, warrants or other rights not listed above exercisable for or convertible into shares of common stock do not count towards satisfying the ownership requirement unless and until shares under such awards are issued to a NEO.
Compliance with stock ownership guidelines is evaluated annually. A NEO is not required to purchase additional shares to satisfy the applicable ownership requirement in the event of a decline in the Company’s stock;stock price, but the NEO is generally prohibited from selling or transferring shares until the minimum ownership requirement has been achieved, except as otherwise determined by the C&HCM Committee. All NEOs employed as of December 31, 2023, were in compliance with the stock ownership guidelines as of that date.
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Clawback Policy
The Company has a formal Clawback Policy that adheres to the listing standards of the Nasdaq and
•Any director who serves as the rules of the SEC (the “Clawback Policy”). This policy empowers the C&HCM Committee to recoup cash and equity incentive-based compensation received by executive officers and other covered employees in the event the Company is required to prepare an accounting restatement due to material noncompliance with financial reporting requirements under federal securities laws. Under the Clawback Policy, the C&HCM Committee will require recoupment from an executive officer other thanif it determines that incentive-based compensation received by the CEO, will be required to hold multiplesexecutive officer exceeds the amount of the value of his or her base salary in shares of the Company’s stock, dependingincentive-based compensation that otherwise would have been received, had it been calculated based on the position and as established by the Compensation Committee.
restated amounts.Anti-Hedging and Anti-Pledging Policy
The Company has an Insider Trading Policy that, among other things, prohibits all of our employees (including officers) and directors from engaging in hedging or other speculative transactions relating to shares of the Company’s stock. Prohibited transactions include short sales, derivative securities (such as put and call options, or other similar instruments) and other hedging transactions (such as equity swaps, prepaid variable forwards, or similar instruments), or any transactions that have or are designed to have the effect of hedging or offsetting any decrease in the market value of the Company’s securities. In addition, Section 16 officers and directors are generally prohibited from holding the Company’s securities in a margin account or otherwise pledging the Company’s securities as collateral for a loan.
No Tax Gross Ups
Our Compensation Committee has determined that no tax gross-ups for purposes of excess parachute payments under Section 280G ("Section 280G") of the Internal Revenue Code of 1986, as amended ("Code") shall be provided to our executives as part of our executive compensation program. The dollar amount of the severance payment due under our CiC Agreements (as
defined and further described below) will not be reduced in order to avoid an excess parachute payment under Section 280G, except in circumstances in which the application of the excise tax under Section 4999 of the Code (“Section 4999”) on the full amount of severance and other compensation deemed to be an excess parachute payment under Section 280G would leave the executive with a lower net after-tax amount than having the severance and other compensation reduced to the extent necessary so the excise tax would not apply. In circumstances in which the amount of severance and other compensation deemed to be a parachute payment under Section 280G is not reduced, the executive would owe the excise tax under Section 4999 and would not be entitled to a gross-up or reimbursement of that excise tax payment under his or her CiC Agreement.
Double-TriggerDouble Trigger Change in Control Agreements
In connection with the IPO in 2020, theThe Company has entered into change in control agreements (“CiC Agreements”) with the NEOs and its most senior executive officers. With certain exceptions noted below, the CiC Agreements are substantially similar to each other, and provide that if, during a potential change in control period or within 18 months after the consummation of a change in control, the executive’s employment is involuntarily terminated for reasons other than for “cause,” disability or death, or the executive voluntary resigns for “good reason,” the executive would be entitled to a lump sum severance payment equal to a multiple of (a) his or her base salary, plus (b) the greater of the executive’s annual bonus for the year in which the termination occurred and the average of the executive’s bonuses for the three (3) years immediately preceding the year in which the termination occurred. For Messrs. Rivers and Miller, the applicable multiplier is 300%; for each of the other executives including Mr.who are current officers of the Company (Messrs. Fitzgerald and Westermann and Ms. Henry), the multiplier is 200%. As noted above, any payment required under the CiC Agreements will be reduced to the extent necessary to avoid penalties under (“Section 280G,280G”) of the Internal Revenue Code of 1986, as amended (the “Code”), but only if such reduction would result in a higher after-tax amount to the executive. In exchange for the lump sum severance payments and other benefits, the CiC Agreements provide for certain post-employment obligations with respect to the executive’s ability to compete with the Company and solicit our employees or customers.
In addition, if the NEO was participating in the Company’s group health and dental plans immediately prior to the their termination and elects COBRA health continuation, then the Company shall pay to the NEO a monthly cash payment for 18 months or the NEO’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health and dental insurance to the NEO if the NEO had remained employed by the Company. The Company will use commercially reasonable efforts to provide for such payments in a manner that allows the NEO to exclude such payments from income, unless the NEO’s COBRA health continuation period ends prior to the end of the eighteen-month payment period or the Company reasonably determines such payment to be discriminatory under Section 105(h) of the Code.
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No Tax Gross Ups
Our C&HCM Committee has determined that no tax gross-ups for purposes of excess parachute payments under Section 280G shall be provided to our executives as part of our executive compensation program. The dollar amount of the severance payment due under our CiC Agreements (as defined and further described below) will not be reduced in order to avoid an excess parachute payment under Section 280G, except in circumstances in which the application of the excise tax under Section 4999 of the Code (“Section 4999”) on the full amount of severance and other compensation deemed to be an excess parachute payment under Section 280G would leave the executive with a lower net after-tax amount than having the severance and other compensation reduced to the extent necessary so the excise tax would not apply. In circumstances in which the amount of severance and other compensation deemed to be a parachute payment under Section 280G is not reduced, the executive would owe the excise tax under Section 4999 and would not be entitled to a gross-up or reimbursement of that excise tax payment under his or her CiC Agreement.
Severance Agreements
The provision of reasonable severance benefits can be important in recruiting and retaining key executives.
Thus, the Company has in place separate agreements with two NEOs, Messrs. Rivers and Miller, governing certain terms of their employment with and separation from the Company in circumstances not involving a change in control of Eastern. Under the terms of those agreements, in the event an executive is terminated for cause, the executive will receive all earned but unpaid salary, all accrued but unused vacation pay, vested and accrued bonuses or other incentive compensation, and reimbursements for any reasonable, necessary and properly documented expenses. In the event of termination without cause, in addition to the payments outlined above, the Company will pay to the executive within 60 days of his termination a lump sum payment equal to 200% of his annual base compensation plus a prorated share of the annual incentive payment to which the executive would have been eligible under the MIP (described above) during the calendar year in which the termination date falls. The executive will also receive full vesting of benefits in existing grants under Easternthe Bank’s legacy LTIP. If Mr. Rivers elects COBRA coverage, Mr. Rivers will also receive 24 months of continued participation in Eastern group health and dental insurance plans, with Eastern Bank paying or reimbursing Mr. Rivers for the cost of such premiums, and Mr. Miller will receive a lump sum payment equivalent to 24x the amount of Eastern’s standard monthly contributions to Mr. Miller’s Eastern Bank group health and dental insurance premiums. The agreements provide for certain restrictive covenant obligations, which include each of Messrs. Rivers and Miller agreeing not to solicit customers and employees of Eastern Bank during their employment with Eastern Bank and continuing for a period ending 24 months following their termination of employment. In addition, Mr. Miller’s agreement also specifies that while he is employed, he will receive an annual base salary of not less than $450,000 (subject to adjustment), discretionary incentive and/or bonus compensation, and participation on generally applicable terms and conditions in other compensation and fringe benefit plans, an automobile allowance of $700 each month, and reimbursement of country club membership fees, if sought. Mr. Rivers’ agreement does not address compensation or benefits during employment.
Risk Assessments of Incentive Compensation Plans
The Company conducts a continuous review of compensation programs from design to actual results. This helps ensure that employees are not driven to take excessive risk that could have a significant negative impact on the Company’s annual results or future safety and soundness of the institution. The Company’s compensation philosophy is “risk-reflective,” meaning the pay structure and programs are created to appropriately reward the returns from acceptable risk-taking through optimal pay mix, performance metrics, calibration and timing. Employees eligible for incentives or commissions for new business are not permitted to make credit, investment, or consumer pricing decisions independently. The Company has no “highly-leveraged” incentive plans. Plan sponsors, who are those executives in charge of business lines in which incentive plans exist, are not eligible for awards under the plans they sponsor. All incentive and commission plans are tied to
43
performance metrics related to revenue and/or profitability and all incentive plans have a trigger, where payments are not made if certain
profitability hurdles are not met by the Company. Finally, all incentive plans undergo an annual incentive plan risk assessment
leadled by leaders from the Internal Audit, Enterprise Risk Management, Legal and Human Resources Departments, with the results reported to the
C&HCM Committee.Other Programs
Benefit Plans
401(k) Plan. Our 401(k) Plan allows executives and other plan participants to make elective deferrals of their compensation to the 401(k) Plan up to limits of the Internal Revenue Service (“IRS“), and in 2023 the Company made a safe harbor contribution to eligible participants’ accounts equal to 3% of the participant’s plan compensation earned during the plan year subject to IRS limits.
Employee Stock Ownership Plan. Eastern Bank has an ESOP, an employee stock ownership plan, for eligible employees. Management believes the ESOP aligns the interests of all eligible employees – not just senior executives – with shareholders to create better alignment with total shareholder value.
At the time of the IPO, the ESOP trustee purchased 14,940,652 shares of the Company’s common stock funded with a loan from the Company (“ESOP Loan”). The ESOP Loan is repaid principally through Eastern Bank’s contribution to the ESOP and dividends payable on common stock held by the ESOP over the term of the loan. The ESOP’s independent trustee holds the shares purchased by the ESOP in an unallocated suspense account, and releases shares on a pro rata basis as the loan is repaid. Released shares are allocated among participants on the basis of each participant’s proportional share of eligible compensation relative to the compensation of all participants. A participant cliff-vests in their benefits after three years of vesting service with Eastern Bank or a participating subsidiary. Credited service includes both calendar years of service from January 1, 2020 (the initial effective date of the ESOP) and years of vesting service that a participant has earned under the Bank’s defined benefit pension plan prior to the adoption of the ESOP. A participant also will become fully vested in their benefit upon normal retirement, early retirement, death or disability, a change in control, or termination of the ESOP. A vested participant is entitled to receive a distribution from the ESOP upon separation from service or, if earlier, plan termination. The ESOP permits a participant to direct the trustee as to how to vote the shares of common stock allocated to their account. The ESOP trustee votes unallocated shares and allocated shares for which participants do not provide voting instructions on a matter in the same ratio as those shares for which participants provide instructions, subject to fulfillment of the trustee’s fiduciary responsibilities.
In October 2023 a portion of the ESOP Loan was repaid, and in February 2024, the ESOP trustee allocated shares to eligible participants for 2023. The Company makes allocations annually to eligible participants in accordance with the terms of the ESOP. Each of Messrs. Rivers, Miller, Fitzgerald, Westermann and Lodge and Ms. Henry received allocations of 947 shares (fractional shares have been rounded down) for 2023. Each of our NEOs is fully vested in his or her benefit under the ESOP.
Defined Benefit Pension Plan. Eastern Bank provides pension benefits (the “Pension Plan”) to its employees, including our NEOs, through membership in the Savings Bank Employees’ Retirement Association. The Company’s Pension Plan is a noncontributory, defined benefit plan. Our annual contribution to the Pension Plan is based upon standards established by the Pension Protection Act. The contribution is based on an actuarial method intended to provide not only for benefits attributable to service to date but also for those expected to be earned in the future.
Frozen Supplemental Executive Retirement Plan. Eastern had historically offered a defined contribution supplemental executive retirement plan (“SERP”), in which Messrs. Rivers, Miller, and Fitzgerald participated. Benefit accruals were frozen for then-active participants as to compensation received for work performed after 2021, and the SERP was closed to new participants. Under the SERP, each participating executive is entitled to receive a benefit following his or her separation from service.
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Benefit Equalization Plan. The Company maintains a non-qualified benefit equalization plan (“BEP”) to provide a pension supplement to restore pension benefits for employees whose compensation exceeds the annual statutory compensation maximum that can be considered under the defined benefit plan, and/or exceeds the annual permitted pension benefit amount under the Code. The benefit formula is the same as provided in the Pension Plan, with an offset for benefits provided by that plan. Benefits generally are paid in a lump sum in the year following retirement or death.
409A Deferred Compensation Committee.Plans. The Company maintains a 409A deferred compensation plan. The plan allows directors and selected executives to defer compensation under non-qualified deferred compensation plans. None of the NEOs participated in this plan in 2023.
Executive Perquisites. Executive perquisites are not a core component of our executive compensation program. We do offer, however, our NEOs allowances for automobiles and parking. Our NEOs are entitled to reimbursement for costs associated with membership in a country club, but all of our NEOs declined to accept these club fees in 2023.
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COMPENSATION COMMITTEEAND HUMAN CAPITAL MANAGEMENT REPORT
The Compensation and Human Capital Management Committee of our Board of Directors has reviewed and discussed the preceding Compensation Discussion and Analysis with management. Based on such review and discussions, the Compensation and Human Capital Management Committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
Proxy Statement.By the Compensation and Human Capital Management Committee of the Board of Directors,
Joseph T. Chung (Chair)
Diane S. Hessan
Deborah L. Jackson
Peter K. Markell (Chair)
Deborah L. Jackson
Richard C. Bane
Paul M. Connolly
Joseph T. Chung
Luis A. Borgen
20202023 Summary Compensation Table
The table below sets forth the total compensation paid to, or earned by, our three NEOs for the years ended December 31, 20202023, 2022 and 20192021 in accordance with applicable SEC rules.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Summary Compensation Table |
| Name and Principal Position | | Fiscal Year | | Salary (1) | | Bonus (2) | | Non-Equity Incentive Plan Compensation ($)(3)(4) | | Nonqualified Deferred Compensation Earnings ($)(5) | | All Other Compensation ($)(6) | | Total ($) |
| | | | | | |
| | | | | | |
| | | | | | |
| Robert F. Rivers | | 2020 | | $ | 987,500 | | | $ | — | | | $ | 2,046,340 | | | $ | 1,351,220 | | | $ | 439,097 | | | $ | 4,824,157 | |
| Chief Executive Officer and Chair of the Board of Directors | | 2019 | | $ | 929,167 | | | $ | — | | | $ | 1,945,261 | | | $ | 1,206,105 | | | $ | 408,459 | | | $ | 4,488,992 | |
| Quincy L. Miller | | 2020 | | $ | 570,833 | | | $ | 110,000 | | | $ | 943,670 | | | $ | 222,539 | | | $ | 219,081 | | | $ | 2,066,123 | |
| President & Vice Chair | | 2019 | | $ | 545,833 | | | $ | — | | | $ | 412,000 | | | $ | 148,375 | | | $ | 212,635 | | | $ | 1,318,843 | |
| James B. Fitzgerald | | 2020 | | $ | 570,833 | | | $ | 220,000 | | | $ | 943,670 | | | $ | 682,719 | | | $ | 220,885 | | | $ | 2,638,107 | |
| Chief Financial Officer, Chief Administrative Officer and Treasurer | | 2019 | | $ | 545,833 | | | $ | — | | | $ | 798,783 | | | $ | 417,049 | | | $ | 214,402 | | | $ | 1,976,067 | |
(1)Represents base salary earned in 2020 and 2019, as applicable.
(2)Represents a one-time discretionary cash bonus. For Mr. Miller, the bonus recognized the leadership role he played in the Company’s response to the PPP. For Mr. Fitzgerald, the bonus recognized his considerable role in the successful execution of the Company’s IPO.
(3)Represents awards earned under the Company’s MIP during 2020 and 2019, respectively | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Summary Compensation Table (“SCT”) | |
| Name and Principal Position | | Fiscal
Year (1) | | | Salary (2) | | | Bonus (3) | | | Non-Equity
Incentive Plan
Compensation
(4)(5) | | | Stock Awards (6) | | | Change In
Pension Value
and Non-
qualified
Deferred
Compensation
Earnings (7) | | | All Other
Compensation
(8) | | | Total | |
| | | | | | | | | |
Robert F. Rivers | | | 2023 | | | $ | 995,000 | | | $ | — | | | $ | 2,434,326 | | | $ | 820,870 | | | $ | 617,294 | | | $ | 47,607 | | | $ | 4,915,097 | |
| | | | | | | | | |
Chief Executive Officer and Chair of the Board of Directors | | | 2022 | | | $ | 995,000 | | | $ | — | | | $ | 976,100 | | | $ | 4,503,726 | | | $ | 13,486 | | | $ | 255,368 | | | $ | 6,743,680 | |
| | | | | | | | | |
| | | | 2021 | | | $ | 995,000 | | | $ | — | | | $ | 2,757,136 | | | $ | — | | | $ | 86,687 | | | $ | 369,720 | | | $ | 4,208,543 | |
| | | | | | | | | |
Quincy L. Miller | | | 2023 | | | $ | 590,000 | | | $ | — | | | $ | 866,942 | | | $ | 292,046 | | | $ | 196,629 | | | $ | 41,241 | | | $ | 1,986,858 | |
| | | | | | | | | |
President | | | 2022 | | | $ | 587,500 | | | $ | — | | | $ | 385,900 | | | $ | 3,002,449 | | | $ | 20,111 | | | $ | 114,166 | | | $ | 4,110,126 | |
| | | | | | | | | |
| | | | 2021 | | | $ | 575,000 | | | $ | — | | | $ | 948,712 | | | $ | — | | | $ | 45,562 | | | $ | 224,347 | | | $ | 1,793,621 | |
| | | | | | | | | |
James B. Fitzgerald | | | 2023 | | | $ | 590,000 | | | $ | 250,000 | | | $ | 866,942 | | | $ | 292,046 | | | $ | 455,570 | | | $ | 52,575 | | | $ | 2,507,133 | |
| | | | | | | | | |
Chief Administrative Officer, Chief Financial Officer and Treasurer | | | 2022 | | | $ | 587,500 | | | $ | — | | | $ | 385,900 | | | $ | 3,002,449 | | | $ | 2,406 | | | $ | 125,410 | | | $ | 4,103,665 | |
| | | | | | | | | |
| | | | 2021 | | | $ | 575,000 | | | $ | — | | | $ | 948,712 | | | $ | — | | | $ | 69,595 | | | $ | 249,614 | | | $ | 1,842,921 | |
| | | | | | | | | |
Donald M. Westermann | | | 2023 | | | $ | 463,500 | | | $ | — | | | $ | 465,046 | | | $ | 152,935 | | | $ | 123,049 | | | $ | 37,340 | | | $ | 1,241,870 | |
| | | | | | | | | |
Chief Information Officer | | | 2022 | | | $ | 461,250 | | | $ | — | | | $ | 227,300 | | | $ | 2,001,646 | | | $ | — | | | $ | 34,504 | | | $ | 2,724,700 | |
| | | | | | | | | |
Kathleen C. Henry | | | 2023 | | | $ | 463,500 | | | $ | 250,000 | | | $ | 400,928 | | | $ | 152,935 | | | $ | 156,625 | | | $ | 38,861 | | | $ | 1,462,849 | |
| | | | | | | | | |
General Counsel and Corporate Secretary | | | 2022 | | | $ | 461,250 | | | $ | — | | | $ | 227,300 | | | $ | 2,001,646 | | | $ | 84,812 | | | $ | 35,975 | | | $ | 2,810,983 | |
| | | | | | | | | |
Timothy J. Lodge President & CEO, EIG | | | 2023 | | | $ | 307,811 | | | $ | 2,000,000 | | | $ | 236,375 | | | $ | 118,943 | | | $ | 78,337 | | | $ | 56,519 | | | $ | 2,797,985 | |
| (1) | Neither Mr. Westermann nor Ms. Henry were NEOs in 2021. Their respective compensation is therefore only disclosed for the years ended December 31 of 2022 and 2023. Mr. Lodge was a NEO only for 2023, and his compensation is therefore disclosed only for the year ended December 31, 2023. |
| (2) | Represents base salary earned in 2023, 2022 and 2021, as applicable. For Messrs. Miller, Fitzgerald and Westermann and Ms. Henry, 2022 salary changes were effective March 1, 2022. No salary changes were implemented in 2023 for our NEOs. |
| (3) | For Messrs. Fitzgerald and Lodge and Ms. Henry, represents a one-time Eastern Insurance transaction cash award to recognize their roles in 2023 of the successful sale of Eastern Insurance to Gallagher and, for Mr. Lodge, was also in consideration of his termination of his change-in-control agreement upon his separation from the Company on October 31, 2023. |
| (4) | Represents cash awards earned under the Company’s MIP during 2023, 2022 and 2021, and the amounts payable under legacy LTIP cash awards that matured on December 31, 2021 and December 31, 2023, respectively. |
| • | | MIP Awards: For Messrs. Rivers, Miller, Fitzgerald, Westermann and Lodge and Ms. Henry, amounts earned under the MIP in 2023 were $895,500, $354,000, $354,000, $208,575, $144,200, and $208,575 respectively. For Messrs. Rivers, Miller, Fitzgerald and Westermann and Ms. Henry, amounts earned under the MIP in 2022 were $976,100, $385,900, $385,900 $227,300 and $227,300 respectively. Amounts earned under the MIP in 2021 for Messrs. Rivers, Miller, and Fitzgerald were $1,075,000, $388,000 and $388,000, respectively. |
| • | | Legacy LTIP Awards: For Messrs. Rivers, Miller, Fitzgerald, Westermann and Lodge and Ms. Henry, the amounts payable under legacy LTIP awards that were granted in 2019 and |
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| matured on December 31, 2023 were $1,524,000, $508,000, $508,000, $254,000, $92,175 and $190,500 respectively. LTIP cash awards that were granted in 2018 and matured on December 31, 2022, were valued at $0, and thus no amounts are included in 2022 for the 2018 LTIP cash awards. For Messrs. Rivers, Miller and Fitzgerald, the amounts payable under legacy LTIP awards that were granted in 2017 and matured on December 31, 2021 were $1,682,136, $560,712 and $560,712, respectively. |
| (5) | The amounts payable under the LTIP awards that matured in 2023 and 2021 include interest paid thereon from December 31 of the year in which they matured through the dates of payment in March 2024 and March 2022, respectively. For awards that matured in 2023, the interest amounts were $14,826 for Mr. Rivers, $4,942 for Messrs. Miller and Fitzgerald, $2,471 for Mr. Westermann and $1,853 for Ms. Henry. Mr. Lodge did not receive interest for his 2019 grant due to the timing of his payment upon his separation from the Company on October 31, 2023. For awards that matured in 2021, the interest amounts were $636 for Mr. Rivers, $212 for Mr. Miller and $212 for Mr. Fitzgerald. |
| (6) | Represents the aggregate grant date fair value of RSUs and PSUs granted in 2022 and 2023, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, which for RSUs was equal to the closing price of a share of Company common stock on the date of grant ($21.08 on March 1, 2022 and $15.63 on March 1, 2023), multiplied by the number of RSUs in the grant; for the PSUs based on EPS as the performance measure, was equal to the closing price of a share of Company common stock on the date of grant date ($21.08 on March 1, 2022), multiplied by the number of PSUs at target award levels; and for the PSUs based on TSR as the performance measure, was valued based on the probable outcome of applicable performance conditions using a Monte Carlo simulation model, which priced our common stock on the grant date ($21.15 on March 1, 2022 and $10.16 on March 1, 2023), multiplied by the number of PSUs at target award levels. If it is assumed that that the maximum level of performance under the PSUs was achieved, the grant date fair value of the 2023 PSU portion of the grant would have been $746,231 for Mr. Rivers; $265,491 for each of Messrs. Miller and Fitzgerald; $139,029 for each of Ms. Henry and Mr. Westermann; and $108,128 for Mr. Lodge. With regard to Mr. Lodge, his 2023 equity grants set forth above were forfeited upon his separation in connection with the Eastern Insurance transaction. Following Mr. Lodge’s separation, 18,976 RSUs that had been previously granted to Mr. Lodge on March 1, 2022 were subject to accelerated vesting; however, the change in fair value from grant date ($400,014) to accelerated vesting date ($208,926), based on the closing price of a share of Company common stock on October 31, 2023 ($11.01), reflects a negative value (-$191,088) and therefore was excluded from the table above. |
| (7) | Represents the change in the value of the Pension Plan and BEP for all our NEOs, for the period of January 1 to December 31 of each applicable reporting year. No change in value of the Pension Plan is shown for Mr. Westermann for 2022, as his change in value would have reflected a negative amount of (-$199,432) and was thus excluded. |
| (8) | All Other Compensation in the table above includes the amounts for 2023, 2022 and 2021, as applicable, set forth in the following table. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| All Other Compensation | |
| | | | | | | | |
| Named Executive Officer | | Fiscal
Year | | | Perquisites (a) | | | 401(k) Plan
Defined
Contribution
Plan (b) | | | Employer SERP
Contributions (c) | | | Dividends Paid
on Vested Equity
Awards | | | Employer
Allocations to
ESOP (d) | | | Total (e) | |
Robert F. Rivers | | | 2023 | | | $ | 15,711 | | | $ | 9,900 | | | $ | — | | | $ | 8,539 | | | $ | 13,457 | | | $ | 47,607 | |
| | | | 2022 | | | $ | 16,109 | | | $ | 9,150 | | | $ | 215,000 | | | $ | — | | | $ | 15,109 | | | $ | 255,368 | |
| | | | 2021 | | | $ | 17,197 | | | $ | 8,700 | | | $ | 326,400 | | | $ | — | | | $ | 17,423 | | | $ | 369,720 | |
Quincy L. Miller | | | 2023 | | | $ | 12,192 | | | $ | 9,900 | | | $ | — | | | $ | 5,692 | | | $ | 13,457 | | | $ | 41,241 | |
| | | | 2022 | | | $ | 12,307 | | | $ | 9,150 | | | $ | 77,600 | | | $ | — | | | $ | 15,109 | | | $ | 114,166 | |
| | | | 2021 | | | $ | 13,424 | | | $ | 8,700 | | | $ | 184,800 | | | $ | — | | | $ | 17,423 | | | $ | 224,347 | |
James B. Fitzgerald | | | 2023 | | | $ | 23,526 | | | $ | 9,900 | | | $ | — | | | $ | 5,692 | | | $ | 13,457 | | | $ | 52,575 | |
| | | | 2022 | | | $ | 23,551 | | | $ | 9,150 | | | $ | 77,600 | | | $ | — | | | $ | 15,109 | | | $ | 125,410 | |
| | | | 2021 | | | $ | 16,691 | | | $ | 8,700 | | | $ | 206,800 | | | $ | — | | | $ | 17,423 | | | $ | 249,614 | |
Donald M. Westermann | | | 2023 | | | $ | 10,188 | | | $ | 9,900 | | | $ | — | | | $ | 3,795 | | | $ | 13,457 | | | $ | 37,340 | |
| | | | 2022 | | | $ | 10,245 | | | $ | 9,150 | | | $ | — | | | $ | — | | | $ | 15,109 | | | $ | 34,504 | |
Kathleen C. Henry | | | 2023 | | | $ | 11,710 | | | $ | 9,900 | | | $ | — | | | $ | 3,795 | | | $ | 13,457 | | | $ | 38,862 | |
| | | | 2022 | | | $ | 11,716 | | | $ | 9,150 | | | $ | — | | | $ | — | | | $ | 15,109 | | | $ | 35,975 | |
Timothy J. Lodge | | | 2023 | | | $ | 18,731 | | | $ | 9,151 | | | $ | — | | | $ | 15,180 | | | $ | 13,457 | | | $ | 56,519 | |
| (a) | Amount includes automobile and parking and gas allowances and taxable imputed incomes. |
| (b) | Represents employer contributions under our 401(k) Plan made on behalf of the NEO. |
| (c) | Represents deemed employer SERP contributions made during 2022 and 2021 as applicable. The SERP was frozen at the end of 2021; employer SERP contributions were made in 2022 related to compensation earned in 2021. |
| (d) | Represents the value of an allocation of shares of Company common stock pursuant to the terms of the Company’s ESOP in connection with the NEO’s service in fiscal year 2023, 2022 and 2021, as applicable. The value is calculated based on the closing price of Company stock on the last day trading of the year. For 2023, the amount represents an allocation of 947 shares multiplied by $14.20; for 2022, the amount represents an allocation of 875 shares multiplied by $17.25; and for 2021, the amount represents an allocation of 863 shares multiplied by $20.17. For each NEO, as applicable, the share allocation for 2023 includes 57 additional shares acquired through dividend reinvestment; for 2022, the share allocation includes 19 additional shares acquired through dividend reinvestment; and, for 2021, the share allocation includes one additional share acquired through dividend reinvestment. |
| (e) | Our NEOs’ total compensation in the Summary Compensation Table does not include earnings on the now frozen SERP, in which Messrs. Rivers, Miller and Fitzgerald participate, because our NEOs do not receive any preferential or above-market investment earnings under such plans. Under the terms of the SERP, the value of the benefit provided increases or decreases based upon changes in one or more generally available investment benchmarks or strategies chosen by the respective participant. |
Grant of Plan-Based Awards in 2023
The table below provides information regarding plan-based awards granted to our NEOs in 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | | Estimated future payouts under
equity incentive plan awards (1) | | | | |
| | | | | | | | | |
Named Executive Officer | | Type of Award | | Grant
Date | | | Approval
Date | | | Threshold
(#) | | | Target (#) | | | Maximum
(#) | | | All Other
Stock
Awards:
Number of
Shares of
Stocks or
Units (#) (2) | | | Grant Date Fair Value of Stock and Option Awards | |
Robert F. Rivers | | RSU | | | 3/1/2023 | | | | 2/23/2023 | | | | — | | | | — | | | | — | | | | 31,829 | | | $ | 497,487 | |
| | | PSU - TSR | | | 3/1/2023 | | | | 2/23/2023 | | | | 7,957 | | | | 31,829 | | | | 47,744 | | | | — | | | $ | 323,383 | |
Quincy L. Miller | | RSU | | | 3/1/2023 | | | | 2/13/2023 | | | | — | | | | — | | | | — | | | | 11,324 | | | $ | 176,994 | |
| | | PSU - TSR | | | 3/1/2023 | | | | 2/13/2023 | | | | 2,831 | | | | 11,324 | | | | 16,986 | | | | — | | | $ | 115,052 | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | | Estimated future payouts under
equity incentive plan awards (1) | | | | |
| | | | | | | | | |
Named Executive Officer | | Type of Award | | Grant
Date | | | Approval
Date | | | Threshold
(#) | | | Target (#) | | | Maximum
(#) | | | All Other
Stock
Awards:
Number of
Shares of
Stocks or
Units (#) (2) | | | Grant Date Fair Value of Stock
and Option Awards | |
James B. Fitzgerald | | RSU | | | 3/1/2023 | | | | 2/13/2023 | | | | — | | | | — | | | | — | | | | 11,324 | | | $ | 176,994 | |
| | | PSU
-
TSR | | | 3/1/2023 | | | | 2/13/2023 | | | | 2,831 | | | | 11,324 | | | | 16,986 | | | | — | | | $ | 115,052 | |
Donald M. Westermann | | RSU | | | 3/1/2023 | | | | 2/13/2023 | | | | — | | | | — | | | | — | | | | 5,930 | | | $ | 92,686 | |
| | | PSU
-
TSR | | | 3/1/2023 | | | | 2/13/2023 | | | | 1,483 | | | | 5,930 | | | | 8,895 | | | | — | | | $ | 60,249 | |
Kathleen C. Henry | | RSU | | | 3/1/2023 | | | | 2/13/2023 | | | | — | | | | — | | | | — | | | | 5,930 | | | $ | 92,686 | |
| | | PSU
-
TSR | | | 3/1/2023 | | | | 2/13/2023 | | | | 1,483 | | | | 5,930 | | | | 8,895 | | | | — | | | $ | 60,249 | |
Timothy J. Lodge | | RSU | | | 3/1/2023 | | | | 2/13/2023 | | | | — | | | | — | | | | — | | | | 4,612 | | | $ | 72,086 | |
| | | PSU
-
TSR | | | 3/1/2023 | | | | 2/13/2023 | | | | 1,153 | | | | 4,612 | | | | 6,918 | | | | — | | | $ | 46,858 | |
| (1) | Represents PSUs that will, for each grant of PSUs based on TSR performance measures, respectively, vest in one installment on or around March 1, 2026, subject to continued service and the satisfaction of applicable performance conditions. The number of PSUs to be earned is dependent on the Company’s growth of its TSR performance, each relative to those of the KRX Banks, over the three-year performance period from January 1, 2023 through December 31, 2025. No PSUs will vest for performance below threshold levels. |
| (2) | Represents RSUs that vest in three equal installments on the anniversaries of the grant date (March 1, 2023), subject to continued service. |
Outstanding Equity Awards at 2023 Fiscal Year End
The following table provides information regarding PSUs and RSUs, as applicable, held by our NEOs on December 31, 20202023.
| | | | | | | | |
| | | | |
Named Executive Officer | | Type and Grant
Year of Equity
Incentive Plan
Award (1) | | Equity Incentive Plan
awards: Number of
underlying shares that have
not yet vested | | Equity Incentive Plan
awards: Market Value of
underlying shares that have
not yet vested (2) | |
Robert F. Rivers | | RSU -2022 | | 85,389 | | $ | 1,212,524 | |
| | | PSU -EPS 2022 | | 13,342 | | $ | 189,456 | |
| | | PSU -TSR 2022 | | 13,342 | | $ | 189,456 | |
| | | RSU - 2023 | | 31,829 | | $ | 451,972 | |
| | | PSU -TSR 2023 | | 7,957 | | $ | 112,993 | |
Quincy L. Miller | | RSU -2022 | | 56,926 | | $ | 808,349 | |
| | | PSU -EPS 2022 | | 8,895 | | $ | 126,302 | |
| | | PSU -TSR 2022 | | 8,895 | | $ | 126,302 | |
| | | RSU - 2023 | | 11,324 | | $ | 160,801 | |
| | | PSU -TSR 2023 | | 2,831 | | $ | 40,200 | |
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| | | | | | | | |
| | | | |
Named Executive Officer | | Type and Grant
Year of Equity
Incentive Plan
Award (1) | | Equity Incentive Plan
awards: Number of
underlying shares that have
not yet vested | | Equity Incentive Plan
awards: Market Value of
underlying shares that have
not yet vested (2) | |
James B. Fitzgerald | | RSU -2022 | | 56,926 | | $ | 808,349 | |
| | | PSU -EPS 2022 | | 8,895 | | $ | 126,302 | |
| | | PSU -TSR 2022 | | 8,895 | | $ | 126,302 | |
| | | RSU - 2023 | | 11,324 | | $ | 160,801 | |
| | | PSU -TSR 2023 | | 2,831 | | $ | 40,200 | |
Donald M. Westermann | | RSU -2022 | | 37,951 | | $ | 538,904 | |
| | | PSU -EPS 2022 | | 5,930 | | $ | 84,202 | |
| | | PSU -TSR 2022 | | 5,930 | | $ | 84,202 | |
| | | RSU - 2023 | | 5,930 | | $ | 84,206 | |
| | | PSU -TSR 2023 | | 1,483 | | $ | 21,052 | |
Kathleen C. Henry | | RSU - 2022 | | 37,951 | | $ | 538,904 | |
| | | PSU - EPS 2022 | | 5,930 | | $ | 84,202 | |
| | | PSU - TSR 2022 | | 5,930 | | $ | 84,202 | |
| | | RSU - 2023 | | 5,930 | | $ | 84,206 | |
| | | PSU - TSR 2023 | | 1,483 | | $ | 21,052 | |
Timothy J. Lodge (3) | | - | | 0 | | $ | — | |
| (1) | Each RSU award granted in 2022 will vest in five equal installments on the anniversaries of the grant date (March 1, 2022), subject to continued employment. RSU awards granted in 2023 will vest in three equal installments on the anniversaries of the grant date (March 1, 2023), subject to continued employment. PSUs granted in 2022 based on EPS and TSR performance, respectively, will vest in one installment on or around March 1, 2025, subject to continued employment and the satisfaction of applicable performance conditions. PSUs granted in 2023 based on TSR performance will vest in one installment on or around March 1, 2026, subject to continued employment and the satisfaction of applicable performance conditions. The number of PSUs to be earned is dependent on the Company’s growth of its EPS and TSR performance, respectively, each relative to those of the KRX Banks, over the three- year performance period from January 1, 2022 through December 31, 2024. PSU amounts for both EPS and TSR performance measure awards reflect threshold performance levels. |
| (2) | The market value of RSUs and PSU EPS and PSU TSR performance measure awards are based on the closing price of $14.20 of Company common stock on December 29, 2023, the last trading day of 2023, multiplied by the number of underlying granted but unvested units. |
| (3) | Mr. Lodge was not employed by the Company as of December 31, 2023, and the plan-based awards granted to him in 2023 were forfeited upon his separation from the Company on October 31, 2023, in connection with the Eastern Insurance transaction. |
Option Exercises and December 31, 2019, respectively. For Messrs. Rivers, MillerStock Vested
The following table provides information regarding PSUs and Fitzgerald, amounts earned under the MIP in 2020 were $637,000, $239,000 and $239,000, respectively, and in 2019, were $1,075,000, $412,000 and $412,000, respectively. Awards under the MIP are based on performance components outlined in the plan, which components are subject to modification at the discretion of the Chief Executive Officer during the plan year. For Messrs. Rivers, Miller and Fitzgerald, the amounts payable under the LTIP awards that were granted in 2016 and maturedRSUs, as applicable, held by our NEOs on December 31, 2020 were $1,409,340, $704,670 and $704,670, respectively. For Messrs. Rivers and Fitzgerald, the amounts payable under the LTIP awards that were granted in 2015 and matured on December 31, 2019 were $870,261 and $386,783, respectively.2023. None of Mr. Miller’s LTIP awards maturedour NEOs owned or exercised options in 2023.
| | | | | | |
| | | Stock Awards | |
| Named Executive Officer | | Number of Shares Acquired on Vesting (1) | | Value Realized on Vesting ($)(2) | |
Robert F. Rivers | | 21,347 | | $ | 333,654 | |
Quincy L. Miller | | 14,231 | | $ | 222,431 | |
James B. Fitzgerald | | 14,231 | | $ | 222,431 | |
Donald M. Westermann | | 9,487 | | $ | 148,282 | |
Kathleen C. Henry | | 9,487 | | $ | 148,282 | |
Timothy J. Lodge | | 23,719 | | $ | 283,059 | |
| (1) | The Number of Shares Acquired on Vesting represents the shares underlying RSUs granted on March 1, 2022 that vested on March 1, 2023. The total represents the number of shares underlying RSUs that |
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| vested, prior to shares withheld for taxes. For Mr. Lodge, this number additionally represents the shares underlying 18,976 RSUs granted on March 1, 2022, the vesting of which was accelerated as of October 31, 2023, the date of his separation from the Company. |
| (2) | Value Realized on Vesting represents the number of shares underlying the RSUs that vested on March 1, 2023 multiplied by the closing price ($15.63) of Company stock on March 1, 2023. For Mr. Lodge, this value additionally represents the number of shares underlying the RSUs that vested on October 31, 2023, multiplied by the closing price ($11.01) of Company stock on October 31, 2023. |
Nonqualified Deferred Compensation
The Company’s nonqualified deferred contribution plans allow certain highly compensated or management employees to defer portions of their current compensation, as specified in the applicable plan documents. These plans include the SERP and the 409A Plan (as described below). Distributions of account balances under such plans may be made only in accordance with the applicable plan documents. None of these plans provide our NEOs with any preferential or above-market earnings on December 31, 2019. See the subsection titled “—Long-Term Incentive Plan” below for additional information regarding the estimated value as of December 31, 2020 of LTIP awards to Messrs. Rivers, Miller and Fitzgerald that will mature in 2021, 2022, and 2023, and are payable in 2022, 2023 and 2024, respectively.
(4)The amounts payable under LTIP awards that matured in 2020 and 2019 include interest paid thereon from December 31 of the year in which they matured through the dates of payment in March 2021 and July 2020, respectively. For awards that matured in 2020, the interest amounts were $540 for Mr. Rivers, $270 for Mr. Miller and $270 for Mr. Fitzgerald. For awards that matured in 2019, the interest amounts were $4,461 for Mr. Rivers and $1,982 for Mr. Fitzgerald.
(5)Represents the 2020 and 2019 increase intheir account balances. Rather, the value of the benefit provided in our SERP, whichby a plan increases (or decreases)or decreases based upon changes in one or more generally available investment benchmarks or strategies chosen by the respective participant. For 2020, the value of the benefit grew considerably due to strong investment results.
(6)All Other Compensation in the table above includes the amounts for 2020Frozen Supplemental Executive Retirement Plan. Messrs. Rivers, Miller and 2019, as applicable, set forth in the following table:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| All Other Compensation |
| Named Executive Officer | | Fiscal Year | | Perquisites (1) | | 401(k) Plan Defined Contribution
Plan (2) | | Employer SERP Contributions (3) | | Employer Allocations to ESOP (4) | | Total |
| | | | | |
| Robert F. Rivers | | 2020 | | $ | 16,350 | | | $ | 8,550 | | | $ | 412,500 | | | $ | 1,697 | | | $ | 439,097 | |
| | 2019 | | $ | 16,226 | | | $ | 8,400 | | | $ | 383,833 | | | $ | — | | | $ | 408,459 | |
| Quincy L. Miller | | 2020 | | $ | 12,267 | | | $ | 8,550 | | | $ | 196,567 | | | $ | 1,697 | | | $ | 219,081 | |
| | 2019 | | $ | 11,068 | | | $ | 8,400 | | | $ | 193,167 | | | $ | — | | | $ | 212,635 | |
| James B. Fitzgerald | | 2020 | | $ | 14,071 | | | $ | 8,550 | | | $ | 196,567 | | | $ | 1,697 | | | $ | 220,885 | |
| | 2019 | | $ | 12,835 | | | $ | 8,400 | | | $ | 193,167 | | | $ | — | | | $ | 214,402 | |
(1)Amount includes automobile and parking and gas allowances and taxable imputed incomes.
(2)Represents employer contributions under our 401(k) Plan made on behalf of the NEO.
(3)Represents deemedFitzgerald each received employer SERP contributions made during 2020 and 2019.
(4)Representsin 2022 for compensation earned in 2021. The SERP was frozen effective as of December 31, 2021. Although participants’ accounts will continue to be administered in accordance with the value of an allocation of 104 shares ofSERP document until their respective separations from service, the Company common stock pursuantceased accruing for benefits for SERP participants on earnings received after December 31, 2021 (other than with respect to the compensation earned in 2021). Pursuant to the terms of the Company’s ESOPfrozen SERP, prior to 2022 an executive’s account was credited monthly with an amount equal to 20% of their salary and credited annually with an amount equal to 20% of their short-term incentives. Under the terms of the SERP, each executive participating in connectionthe SERP becomes entitled to receive a benefit following his separation from service with the NEO’s serviceCompany. The SERP benefit vests over a 10-year period and account balances are payable as a lump sum or in 2020, multiplied by $16.31,annual installments, as determined in accordance with the closing priceterms of Company common stock onthe plan. Each of Messrs. Rivers and Fitzgerald are fully vested due to being retirement eligible under the terms of the SERP, and Mr. Miller is 80% vested.409A Deferred Compensation Plans. The Company’s 409A Plan allows directors and selected executives to defer compensation under non-qualified deferred compensation plans. Under the 409A Plan, participants could defer up to 75% of base salary and up to 100% of any incentive compensation. The balances under these plans reflect compensation deferred in prior years and are payable as a lump sum or in annual installments, as determined in accordance with the terms of the applicable plan.
The table below sets forth the amounts of the contributions, earnings and value of the Company’s nonqualified deferred compensation plans in which our NEOs participated during the year ended December 31, 2020. The allocation for 2020 reflects a shortened period post-IPO.
2023. | | | | | | | | | | | | | | | | | | | | |
| Nonqualified Deferred Compensation | |
Named Executive Officer | | Executive
contributions | | | Employer
contributions | | | Aggregate earnings (1) | | | Aggregate
withdrawals/
distributions | | | Aggregate balance (2) | |
Robert F. Rivers | | $ | — | | | $ | — | | | $ | 1,848,993 | | | $ | — | | | $ | 9,673,570 | |
Quincy L. Miller | | $ | — | | | $ | — | | | $ | 338,381 | | | $ | — | | | $ | 1,770,341 | |
James B. Fitzgerald | | $ | — | | | $ | — | | | $ | 833,036 | | | $ | — | | | $ | 3,626,575 | |
Donald M. Westermann | | $ | — | | | $ | — | | | $ | 21,564 | | | $ | — | | | $ | 116,467 | |
Kathleen C. Henry | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Timothy J. Lodge | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| (1) | Represents the change in value for employee and Company contributions to the SERP and 409A Plan. As described above, neither of these plans provides for any preferential or above-market earnings on a participant’s account balances. |
| (2) | Amount shown is the sum of the value of a NEO’s account balance in the SERP and 409A Plan as of December 31, 2023, as applicable. |
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Defined Benefit Pension Plan. The Company provides pension benefits to its employees, including our NEOs, through membership in the Pension Plan. The Pension Plan is a noncontributory, defined benefit plan, and our annual contribution to this plan is based upon standards established by the Pension Protection Act. The Pension Plan is a cash balance format with compensation based on a participant’s earnings reported on IRS Form W-2 for the applicable year. Participants vest in their account balances after three years of eligible service and the plan provides for payment in a lump sum or, if eligible, a life annuity at retirement. All of our NEOs are fully vested in their account balances under the Pension Plan.
Benefit Equalization Plan. The Company maintains the BEP, a non-qualified benefit equalization plan to provide a pension supplement to restore pension benefits for employees who were historically ineligible to participate in the SERP and whose compensation exceeds the annual statutory compensation maximum that can be considered under the Pension Plan, and/ or exceeds the annual permitted pension benefit amount under the Internal Revenue Code. The benefit formula for the BEP is the same as provided in the Pension Plan, with an offset for benefits provided by that plan. Benefits are paid in a lump sum in the year following retirement or death. Active participants in the SERP did not receive BEP benefits; Messrs. Rivers, Miller and Fitzgerald first became eligible for the BEP in 2022.
The amounts reported in the table below equal the present value of the accumulated pension benefitbenefits at the end of fiscal 2020year 2023 for each of our NEOs. The Pension Plan is referred to as the “Defined Benefit Plan” in this table.
| | | | | | | | | | | | | | |
| Pension Benefits | |
| | | | | |
Named Executive Officer | | Plan Name | | Number of Years of
Credited Service | | | Present Value of
Accumulated Benefit
as of 12/31/2023 | | | Payments during last
fiscal year | |
Robert F. Rivers | | Total | | | | | | $ | 1,436,174 | | | $ | — | |
| | | Defined Benefit Plan | | | 17.9 | | | $ | 799,297 | | | $ | — | |
| | | BEP | | | | | | $ | 636,877 | | | $ | — | |
Quincy L. Miller | | Total | | | | | | $ | 426,668 | | | $ | — | |
| | | Defined Benefit Plan | | | 7.8 | | | $ | 272,927 | | | $ | — | |
| | | BEP | | | | | | $ | 153,741 | | | $ | — | |
James B. Fitzgerald | | Total | | | | | | $ | 1,018,657 | | | $ | — | |
| | | Defined Benefit Plan | | | 11.7 | | | $ | 700,350 | | | $ | — | |
| | | BEP | | | | | | $ | 318,307 | | | $ | — | |
Donald M. Westermann | | Total | | | | | | $ | 990,220 | | | $ | — | |
| | | Defined Benefit Plan | | | 16.7 | | | $ | 439,088 | | | $ | — | |
| | | BEP | | | | | | $ | 551,132 | | | $ | — | |
Kathleen C. Henry | | Total | | | | | | $ | 654,026 | | | $ | — | |
| | | Defined Benefit Plan | | | 7.3 | | | $ | 311,014 | | | $ | — | |
| | | BEP | | | | | | $ | 343,012 | | | $ | — | |
Timothy J. Lodge | | Total | | | | | | $ | 435,882 | | | $ | — | |
| | | Defined Benefit Plan | | | 10.4 | | | $ | 275,111 | | | $ | — | |
| | | BEP | | | | | | $ | 160,771 | | | $ | — | |
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Potential Payments upon Termination or Change-in-Control for the Year Ended December 31, 2023
Executive Severance Agreements.
As described above under “Severance Agreements” within the CD&A section of this Proxy Statement, each of Messrs. Rivers and Miller has entered into an executive severance agreement, which provide for certain benefits in the event that either is terminated without cause. Under each of these agreements, “cause” is defined as:
• any act of gross misconduct or gross negligence which results in material harm to the Company, whether monetarily or otherwise;
• any act of dishonesty, disloyalty or fraud which results in material harm to the Company, whether monetarily or otherwise;
• a conviction of, or plea of nolo contendere to, any felony or any crime involving moral turpitude; or
• a failure to perform a substantial portion of the duties of his position adequately for a period of more than 30 days after written notice from the Company describing such failure.
Under their respective executive severance agreements, each of Messrs. Rivers and Miller, if terminated without cause, will be entitled to the respective lump sum payment described above in the CD&A section, provided that each signs a release of claims against the Company, and which release becomes effective. Neither agreement provide for additional payments in the event of death or disability, other than what each is entitled to under other existing benefit plans, although each is entitled to the benefits described above if terminated for cause.
Double-Trigger Change in Control Agreements
As described further above under “Double-Trigger Change in Control Agreements” within the CD&A section of this Proxy Statement, each of our NEOs who is a current officer has entered into a double-trigger CiC Agreement. These agreements entitle the NEO to a lump sum payment described above in the event that their employment is terminated while a change in control event (as described below) has occurred and is pending, or within 18 months following a change in control event, and the reason for termination is for other than the NEO’s death, disability or cause (as each of the latter terms are defined in the CiC Agreement), or is due to the NEO’s own resignation for good reason (as defined below).
The CiC Agreement utilizes the following definitions:
A “change of control” is defined as the consummation of any of the following events:
• merger, consolidation or other business combination of the Company or Eastern Bank, after which either (A) our incumbent board of directors constitute less than two-thirds of the surviving board of directors (“Surviving Board”), or (B) less than 60% of the combined voting power of shares entitled to vote in an election of the Surviving Board is owned by persons who were shareholders of the Company prior to the merger, consolidation or other business combination;
• the acquisition by any person of 25% or more of our outstanding common stock or voting securities (unless such acquisition is by an entity under our common control);
• during any consecutive two year period, the failure of our incumbent directors to constitute a majority of our board of directors, with “incumbent directors” meaning directors who are members of our board of directors on the date of the agreement and members who are subsequently nominated or elected by a majority of the incumbent directors;
• the sale or other disposition of all or substantially all of our assets to any person, group or entity; and
• any other transaction that our board of directors deems to be a “change in control”.
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The term “cause” is defined as:
• a material act of willful misconduct in connection with the performance of his/her duties, including, without limitation, misappropriation of the Company’s funds or property;
• the conviction for, or plea of nolo contendere by the NEO to, any felony or a misdemeanor involving deceit, dishonesty, or fraud;
• the commission of any misconduct, whether or not related to the Company or its affiliates, that has caused, or would reasonably be expected to cause, material detriment or damage to the Company’s or its affiliates’ reputation, business operation or relation with its employees, customers, vendors, suppliers or regulators;
• continued, willful and deliberate non-performance by duties (other than by reason of the NEO’s physical or mental illness, incapacity or disability) that has continued for more than 30 days following written notice providing the details of such non-performance;
• willful failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, or the deliberate destruction of or deliberate failure to preserve documents or other materials relevant to such investigation, or the willful inducement of others to fail to cooperate or to fail to produce documents or other materials; or
• removal or prohibition from participating in the conduct of the Company’s affairs by order issued under applicable law and regulations by a federal or state banking agency having authority over the Company.
The term “good reason” is defined as:
• a material diminution of the NEO’s responsibilities, authorities or control from those exercise by the NEO immediately prior to the change in control event;
• any material reduction in the NEO’s annual compensation or benefits (other than across-the-board reductions affecting all of the Company’s executive officers);
• the relocation of the offices at which the NEO is employed to a location more than 25 miles from such office, or the requirement to be based at a location more than 25 miles from such office; or
• any material breach of the CiC Agreement by the Company.
Under the CiC Agreements, each of our NEOs will be entitled to the lump sum payment described above in “Double-Trigger Change in Control Agreements” within the CD&A section of this Proxy Statement in the event of a double-trigger change in control event, provided that each signs a separation agreement and release with the Company, which then becomes irrevocable. The CiC Agreement does not provide for additional payments in the event of death or disability, other than what a NEO is entitled to under other existing benefit plans. As described above under “No Tax Gross Ups,” the dollar amount of any severance payment due under the CiC Agreements will be reduced in certain circumstances in order to avoid an excess parachute payment under Section 280G.
Set forth below in the table entitled “Potential Payments Upon Termination or Change in Control” is a description of certain post-employment arrangements with our NEOs, including the severance benefits and change-in-control benefits to which they would have been entitled under applicable benefit plans as of December 31, 2023, if a termination of employment and/or a change-in-control had occurred on such date. None of our NEOs were entitled to receive payments if they were terminated for cause as of such date.
Lodge Separation Payments
Through October 31, 2023, Mr. Lodge was party to a CiC Agreement on substantially the same terms as those applicable to Messrs. Fitzgerald and Westermann and Ms. Henry but that also defined a change in control as “the sale of all or substantially all of the assets of EIG to any person, other than” EBC or the Bank. In connection with the sale of substantially all of the assets of EIG and his separation from EIG, and pursuant to a letter agreement effective October 31, 2023, Mr. Lodge agreed to terminate his CiC Agreement. In exchange, and
55
in light of his considerable role in the EIG transaction, Mr. Lodge received a transaction bonus of $2,000,000. Additionally, in connection with and upon his separation from the Company, Mr. Lodge received an accelerated legacy 2019 LTIP cash award of $92,175, paid at the full value that would have matured on December 31, 2023, had he continued in service; a lump-sum cash payment of his 2023 MIP award, paid at the full-year 2023 target level, of $144,200; and the accelerated vesting of 18,976 RSUs that had been granted on March 1, 2022, valued at $208,926 on October 31, 2023, as well as dividends paid in cash valued at $13,283.
| | | | | | | | | | | | | | | | |
| Potential Payments upon Termination or Change-in-Control | |
Named Executive
Officer | | Without Cause/For
Good Reason (1) | | | Death/Disability (2) | | | Retirement (3) | | | Change in Control
(Double Trigger) (4) (5) | |
Robert F. Rivers | |
Salary | | $ | 1,990,000 | | | $ | — | | | $ | — | | | $ | 2,985,000 | |
MIP | | $ | 895,500 | | | $ | 895,500 | | | $ | 895,500 | | | $ | 896,033 | |
RSU | | $ | — | | | $ | 1,664,496 | | | $ | — | | | $ | 1,664,496 | |
PSU - EPS | | $ | — | | | $ | — | | | $ | — | | | $ | 757,826 | |
PSU - TSR | | $ | — | | | $ | — | | | $ | — | | | $ | 1,209,797 | |
Medical | | $ | 61,010 | | | $ | — | | | $ | — | | | $ | 45,758 | |
Quincy L. Miller | | | | |
Salary | | $ | 1,180,000 | | | $ | — | | | $ | — | | | $ | 1,770,000 | |
MIP | | $ | 354,000 | | | $ | 354,000 | | | $ | 354,000 | | | $ | 354,000 | |
RSU | | $ | — | | | $ | 969,150 | | | $ | — | | | $ | 969,150 | |
PSU - EPS | | $ | — | | | $ | — | | | $ | — | | | $ | 505,208 | |
PSU - TSR | | $ | — | | | $ | — | | | $ | — | | | $ | 666,008 | |
Medical | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
James B. Fitzgerald | | | | |
Salary | | $ | — | | | $ | — | | | $ | — | | | $ | 1,180,000 | |
MIP | | $ | — | | | $ | 354,000 | | | $ | 354,000 | | | $ | 354,000 | |
RSU | | $ | — | | | $ | 969,150 | | | $ | — | | | $ | 969,150 | |
PSU - EPS | | $ | — | | | $ | — | | | $ | — | | | $ | 505,208 | |
PSU - TSR | | $ | — | | | $ | — | | | $ | — | | | $ | 666,008 | |
Medical | | $ | — | | | $ | — | | | $ | — | | | $ | 31,954 | |
Donald M. Westermann | | | | |
Salary | | $ | — | | | $ | — | | | $ | — | | | $ | 927,000 | |
MIP | | $ | — | | | $ | 208,575 | | | $ | 208,575 | | | $ | 233,100 | |
RSU | | $ | — | | | $ | 623,110 | | | $ | — | | | $ | 623,110 | |
PSU - EPS | | $ | — | | | $ | — | | | $ | — | | | $ | 336,810 | |
PSU - TSR | | $ | — | | | $ | — | | | $ | — | | | $ | 421,016 | |
Medical | | $ | — | | | $ | — | | | $ | — | | | $ | 48,776 | |
Kathleen C. Henry | | | | |
Salary | | $ | — | | | $ | — | | | $ | — | | | $ | 927,000 | |
MIP | | $ | — | | | $ | 208,575 | | | $ | 208,575 | | | $ | 213,433 | |
RSU | | $ | — | | | $ | 623,110 | | | $ | — | | | $ | 623,110 | |
PSU - EPS | | $ | — | | | $ | — | | | $ | — | | | $ | 336,810 | |
PSU - TSR | | $ | — | | | $ | — | | | $ | — | | | $ | 421,016 | |
Medical | | $ | — | | | $ | — | | | $ | — | | | $ | 46,054 | |
| (1) | Represents amounts payable under the Executive Severance Agreements for Messrs. Rivers and Miller. Salary amounts represent 200% of a NEO’s base salary rate as of December 31, 2023. The MIP amounts represent a NEO’s target payout under the MIP for 2023. For Mr. Rivers, medical represents the Company’s cost to provide medical and dental coverage for 24 months. Mr. Miller is not enrolled in the Company’s |
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| medical or dental coverage and therefore is not entitled to severance amounts related to medical or dental under the terms of his executive severance agreements. No amount is included for equity compensation, as our equity award agreements generally provide for forfeiture upon termination or resignation except as otherwise set forth in this table, subject to certain Board and C&HCM Committee discretionary authority. |
| (2) | MIP amounts represent an NEO’s target payout under the MIP for 2023, and RSU amounts represent the closing price of Company common stock ($14.20) on December 31, 2023, multiplied by the number of units that would vest as accelerated upon the occurrence of the qualifying event. PSUs would not be eligible for vesting until a determination is made at the end of a three-year performance period as to whether the applicable performance conditions are met and are shown at target for purposes of this table. A valuation of the PSUs at threshold performance levels for each NEO other than Mr. Lodge as of December 31, 2023, is provided in the “Outstanding Equity Awards at 2023 Fiscal Year End” table. |
| (3) | Amounts represent an NEO’s target payout under the MIP for 2023. |
| (4) | All NEOs who are current officers are covered by CiC Agreements. For Messrs. Rivers and Miller, salary amounts are 300% of the base salary rate at December 31, 2023, and for Messrs. Fitzgerald and Westermann and Ms. Henry, salary amounts are 200% of the base salary rate at December 31, 2023. For Messrs. Rivers and Westermann and Ms. Henry, the MIP amount is equal to the average of the MIP payouts for the preceding three (3) years (2020, 2021 and 2022), which amounts are greater than the 2023 target annual bonus. For Messrs. Miller and Fitzgerald, the MIP amount is equal to the 2023 MIP target amount, which is greater than the average of the preceding three (3) years bonus payments. Medical payment amounts for Messrs. Rivers, Fitzgerald, and Westermann and Ms. Henry represent the cost of providing 18 months of medical and dental coverage. Mr. Miller is not enrolled in the Company’s medical or dental coverage and therefore is not entitled to severance amounts related to these items. RSU and PSU amounts represent the closing price of Company common stock ($14.20) on December 31, 2023, multiplied by the number of units that would accelerate upon the occurrence of a qualifying termination following a change in control. |
| (5) | Mr. Lodge is not represented in the above table due to the fact he was not employed by nor providing services for the Company on December 31, 2023. |
In addition to the amounts set forth in the table above, each of our NEOs would also receive the vested value of their accounts in the plans included in the Nonqualified Deferred Compensation and Pension Benefits tables above, which may include the SERP, the 409A Plan, the Pension Plan and the BEP.
CEO Pay Ratio
The following information is provided in accordance with Item 402(u) of Regulation S-K of the Securities Act of 1933, as amended. The pay ratio is an estimate of our median employee’s total compensation to that of our CEO, Mr. Rivers, for 2023, as disclosed in the Summary Compensation Table.
To determine our median employee for 2023, we used our employee population as of October 1, 2023, excluding the CEO. The date of October 1st was selected to represent our employee population for the majority of 2023, which included our Eastern Insurance colleagues. As of October 1, 2023, Eastern’s employee population, consisting of all full-time, part-time and seasonal employees, was 2,138 individuals. The median of all base salaries (excluding the CEO) was reviewed to determine our median base salary as the consistently applied compensation measure.
With the median employee identified, this individual’s 2023 total compensation was determined following the same measures used to determine Mr. Rivers’ total compensation in the Summary Compensation Table. These factors include base salary, incentive(s), change in pension value and all other compensation.
• 2023 total annual compensation for the median employee was $88,972
• 2023 total annual compensation for Mr. Rivers, the CEO, was $4,915,097
• The result is a median employee to CEO pay ratio of 1:55.2
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SEC guidelines for determining the median employee provide discretion to companies in adopting a variety of compensation measure(s) to apply to the analysis. We believe the pay ratio reported above is a reasonable estimate based on our records, but it may not be readily comparable to other companies due to factors such as location, compensation practices, exclusions, estimates or assumptions that other companies may apply.
Pay Versus Performance
In accordance with rules adopted by the SEC, we provide the following disclosure regarding executive “Compensation Actually Paid” or “CAP” (as calculated in accordance with SEC rules) and certain Company performance for the fiscal years listed below. Please refer to the “Compensation Discussion and Analysis” section of this Proxy Statement for a more complete description of how executive compensation relates to Company performance and how the C&HCM Committee makes its decisions.
58
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| | | | Value of Initial Fixed $100
Investment Based on: | | | | |
| | | | | | | | |
| | | | | “Compensation
Actually Paid” to
PEO (1) | | | Average SCT Total for Non-PEO NEOs (2) | | | Average “Compensation Actually Paid” to Non-PEO NEOs | | | | | | | | | Net Income
(thousands $) (5) | |
| | $ | 4,915,097 | | | $ | 3,898,615 | | | $ | 1,999,339 | | | $ | 1,648,743 | | | $ | 124.94 | | | $ | 170.78 | | | $ | 232,177 | |
| | $ | 6,743,680 | | | $ | 5,859,893 | | | $ | 3,437,369 | | | $ | 2,918,229 | | | $ | 147.04 | | | $ | 171.46 | | | $ | 199,759 | |
| | $ | 4,208,543 | | | $ | 4,189,967 | | | $ | 2,380,559 | | | $ | 2,321,245 | | | $ | 168.53 | | | $ | 184.23 | | | $ | 154,665 | |
| | $ | 3,673,300 | | | $ | 3,411,841 | | | $ | 2,008,597 | | | $ | 1,908,292 | | | $ | 134.24 | | | $ | 134.82 | | | $ | 22,738 | |
| (1) | Compensation Actually Paid to the Primary Executive Officer (“PEO”) andNon-PEO NEOs reflects the totals from our Summary Compensation Table with the following adjustments: |
For each of the Pension Plan and BEP, the change in the actuarial present value was replaced with each plan’s service cost.
| | | | | | | | | | | | | | |
| Pension Benefits |
| Named Executive Officer | Plan Name | Number of Years of Credited Service | Present Value of Accumulated Benefit as of 12/31/2020 | Payments during last fiscal year |
| Robert F. Rivers | Total | | $ | 7,927,615 | | $ | — | |
| Defined Benefit Plan | 14.9 | $ | 718,707 | | $ | — | |
| SERP | 14.9 | $ | 7,208,908 | | $ | — | |
| Quincy L. Miller | Total | | $ | 1,336,942 | | $ | — | |
| Defined Benefit Plan | 4.8 | $ | 164,366 | | $ | — | |
| SERP | 4.8 | $ | 1,172,576 | | $ | — | |
| James B. Fitzgerald | Total | | $ | 3,241,331 | | $ | — | |
| Defined Benefit Plan | 8.7 | $ | 491,085 | | $ | — | |
| SERP | 8.7 | $ | 2,750,246 | | $ | — | |
For equity incentive awards, the grant date fair values computed in accordance with FASB ASC Topic 718 were replaced withyear-end
fair values as of December 31 as follows:
| | | RSUs were valued based on the closing price of a share of Company common stock on December 31, 2023 ($14.20) instead of the March 1, 2023 grant date value ($15.63), multiplied by the number of RSUs outstanding. |
| | | PSUs based on TSR performance were valued based on the probable outcome of performance conditions using a Monte Carlo simulation model, which priced Company common stock at $7.97 per share as of December 31, 2023 (instead of the actual December 31, 2023 closing price of a share of Company common stock at $14.20), multiplied by the number of PSUs outstanding at target award levels. |
| | | RSUs were valued based on the closing price of a share of Company common stock on December 31, 2022 ($17.25) instead of the March 1, 2022 grant date value ($21.08), multiplied by the number of RSUs outstanding. |
| | | PSUs based on EPS performance were valued based on the closing price of a share of Company common stock on December 31, 2022 ($17.25), instead of on the March 1, 2022 grant date value ($21.08), multiplied by the number of PSUs outstanding at target award levels. |
| | | PSUs based on TSR performance were valued based on the probable outcome of performance conditions using a Monte Carlo simulation model, which priced Company common stock at $12.26 per share as of December 31, 2022 (instead of the actual December 31, 2022 closing price of a share of Company common stock at $17.25), multiplied by the number of PSUs outstanding at target award levels. |
No equity awards were granted to our PEO orNon-PEO
NEOs prior to 2022, and no equity awards were forfeited or both granted and vested in 2022. Thus, no adjustments were made for these items.
Reconciliation for the variance between Summary Compensation Table data for the PEO andNon-PEO
NEOs is included below this section in the ‘Adjustments from Summary Compensation Table’ for both the PEO and theNon-PEO
NEOs respectively. | (2) | OurNon-PEO NEOs included for each year are as follows: |
For 2023, our“Non-PEO
NEOs” include our current NEOs, Messrs. Q. Miller, Fitzgerald, Westermann, and Lodge and Ms. Henry. For 2022, our“Non-PEO
NEOs” included NEOs, Messrs. Q. Miller, Fitzgerald and Westermann, and Ms. Henry. For 2021, our“Non-PEO
NEOs” included Messrs. Q. Miller and Fitzgerald, as well as Jan A. Miller, our former Vice Chair and Chief Commercial Banking Officer, and John F. Koegel, the former President and CEO of Eastern Insurance Group LLC. 59
For 2020, our“Non-PEO
NEOs” were Messrs. Q. Miller and Fitzgerald. | (3) | Company TSR reflects the value of a $100 investment made on October 15, 2020, the date the Company became a publicly listed company, through and including the end of the fiscal year for which our cumulative total shareholder return is provided. |
| (4) | Peer Group TSR reflects the value of a $100 investment in the KRX beginning on October 15, 2020, through and including the end of the fiscal year for which our cumulative total shareholder return is provided. |
| (5) | Under SEC rules, companies are required to provide data with respect to a “Company Selected Measure” which represents the most important financial measure that links CAP to company performance, and which is not otherwise required to be disclosed in this table. However, we do not have another financial measure that materially links CAP to company performance and, as such, we have omitted this column. |
Adjustments from Summary Compensation Table for PEO
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | |
Deduction for change in actuarial present values reported under the “Change in Pension Value and Non- qualified Deferred Compensation Earnings” column in the Summary Compensation Table | | $ | (617,294 | ) | | $ | (13,486 | ) | | $ | (86,687 | ) | | $ | (200,363 | ) |
| | | | |
| Increase for service cost of Pension Plan and BEP | | $ | 181,935 | | | $ | 217,339 | | | $ | 68,111 | | | $ | 53,504 | |
| | | | |
| Deduction for prior service cost of Pension Plan and BEP | | $ | — | | | $ | — | | | $ | — | | | $ | (114,601 | ) |
Deduction for amounts reported under the “Stock Awards” column in the Summary Compensation Table | | $ | (820,870 | ) | | $ | (4,503,726 | ) | | $ | — | | | $ | — | |
Increase based on fair value of awards granted during year that remain unvested as of year-end, determined as of | | $ | 705,649 | | | $ | 3,416,086 | | | $ | — | | | $ | — | |
Deduction for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | | $ | (400,794 | ) | | $ | — | | | $ | — | | | $ | — | |
Deduction for change in fair value from prior year-end to vesting date of awards granted prior year to date vested during year | | $ | (65,108 | ) | | $ | — | | | $ | — | | | $ | — | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | | |
Adjustment from Summary Compensation Table forNon-PEO
NEOs | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | |
Deduction for change in actuarial present values reported under the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column in the Summary Compensation Table | | $ | (202,042 | ) | | $ | (26,832 | ) | | $ | (86,477 | ) | | $ | (109,111 | ) |
| Increase for service cost of Pension Plan and BEP | | $ | 89,731 | | | $ | 111,932 | | | $ | 27,163 | | | $ | 30,488 | |
| Deduction for prior service cost of Pension Plan and BEP | | $ | — | | | $ | — | | | $ | — | | | $ | (21,682 | ) |
Deduction for amounts reported under the “Stock Awards” column in the Summary Compensation Table | | $ | (201,781 | ) | | $ | (2,502,048 | ) | | $ | — | | | $ | — | |
Increase based on fair value of awards granted during year that remain unvested as of year-end, determined as of | | $ | 173,458 | | | $ | 1,897,809 | | | $ | — | | | $ | — | |
Deduction for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | | $ | (178,134 | ) | | $ | — | | | $ | — | | | $ | — | |
Deduction for change in fair value from prior year-end to vesting date of awards granted prior year to date vested during year | | $ | (31,829 | ) | | $ | — | | | $ | — | | | $ | — | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | | |
60
Most Important Performance Measures
In our assessment, the most important performance measures used to link Compensation Actually Paid to Company performance are listed in the table below, not ranked in order of importance.
|
| Net Income |
| Total Shareholder Return |
Analysis of the Information Presented in the Pay versus Performance Table
In accordance with Item 401(v) of RegulationS-K,
the Company is providing the following graphical descriptions of the relationships between information presented in the Pay versus Performance table. Compensation Actually Paid vs. Net Income
61
Compensation Actually Paid vs. Total Share
holder Return 62
ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Compensation Discussion and Analysis beginning on page 24section of this Proxy Statement describes our executive compensation program and the compensation decisions that the Compensation and Human Capital Management Committee and Board of Directors made in 20202023 with respect to the compensation of our NEOs. The Board of Directors is asking shareholders to cast a non-binding, advisory vote FOR the following resolution:
|
| |
| RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED. |
As we describe in the Compensation Discussion and Analysis section of this Proxy Statement, our executive compensation is designed to closely align the interests of our NEOs with those of our shareholders on both a short-term and long-term basis, and to attract and retain key executives critical to our success.
We urge shareholders to read the Compensation Discussion and Analysis beginning on page 24section of this Proxy Statement and to review the 20202023 Summary Compensation Table and related compensation tables and discussion, appearing on pages 35 through 36, which provide detailed information on the Company’s executive compensation policies and practices.
As an EGC, we are not required to seek an advisory vote by shareholders on executive compensation. However, even as a new publicly traded company, the The Company is committed to ensuring it receives timely feedback from shareholders on their alignment with the Company'sCompany’s executive compensation practices.
Our Board of Directors recommends a vote
FORProposal 2.
PROPOSAL 3
ADVISORY VOTE ON FREQUENCY OF EXECUTIVE COMPENSATION ADVISORY VOTE
We are also asking that our shareholders provide an advisory vote on how frequently we should seek future “say-on-pay” advisory votes on the compensation of our named executive officers, as required by Section 14A of the Exchange Act. By voting on this Proposal 3, shareholders may indicate whether they would prefer an advisory vote on NEO compensation once every one, two or three years.
As an EGC, we are not required to seek an advisory vote by shareholders on the frequency of which we should conduct advisory votes on executive compensation. However, as described above, the Company is committed to ensuring alignment between its compensation practices and its shareholders, even as a new publicly traded company, and believes an annual advisory vote will enable us to give careful and timely consideration to our shareholders' view on our compensation practices.
After careful consideration, our board believes that having an advisory vote on NEO compensation every ONE YEAR will be a meaningful and effective way to use this method of gathering feedback on the Company’s executive compensation philosophy, policies, and procedures. The Board believes that holding the advisory vote on NEO compensation annually allows for frequent and timely feedback from shareholders, and recommends that you vote for a one-year frequency for future advisory votes on executive compensation.
This vote, like the say-on-pay vote itself, is not binding on the Board.
Recommendation
Our Board of Directors believes that an annual advisory vote on executive compensation is in the best interests of our Company and shareholders and recommends you vote for the frequency option of every ONE YEAR in Proposal 3.
For the year endedThrough December 31, 2020,2023, each of our directors (other than the Chair of the Board) receivedwas entitled to an annual fee of $55,000 as a Board of Directors retainer of $55,000, an annual grant of restricted stock with a value approximately equal to $55,000, and annual committee member fees ranging from $5,000 to $6,250 in committee meeting fees.$10,000. The Audit, Compensation and Human Capital Management, Nominating and Governance and Risk Management committees are joint committees of the Board of Directors and the Board of Directors of Eastern Bank ("(“Bank Board'Board”). Directors also receive fees for their service on committees of the Bank Board, including its trust committee,and innovation committee,committees, and the Eastern Bank Charitable Foundation committee, which operates as the board of trustees of such foundation.the Foundation. Chairs of certain committees also receivedreceive additional committee chair retainers.retainers ranging from $10,000 to $20,000, and the Lead Director receives an annual retainer of $40,000. In addition, directors received per meetingreceive per-meeting fees for attending various special or additional meetings, including those of Eastern Bank'sBank’s board of advisors, board of ambassadors, annual meeting, and an investment advisory committee.
In 2020, the Board of Directors and various committees met more frequently than they had in past years, due to the Company’s IPO and the impact of the COVID-19 global pandemic, which resulted in additional meeting fees than paid in prior years. Directors who are also employees aredo not compensatedreceive compensation for their service as directors.
Set forth below is a summary of the compensation received by each of our non-employee directors for the year ended December 31, 2020.2023.
| | | | | | | | | | | | | | | | |
| Name | | Fees Earned ($)(1) | | | Stock Awards
($)(2) | | | All Other
Compensation
($)(3) | | | Total ($)(4) | |
Richard C. Bane | | $ | 143,000 | | | $ | 54,993 | | | $ | 11,334 | | | $ | 209,327 | |
Luis Borgen | | $ | 102,000 | | | $ | 54,993 | | | $ | 11,834 | | | $ | 168,827 | |
Joseph T. Chung | | $ | 123,750 | | | $ | 54,993 | | | $ | 11,834 | | | $ | 190,577 | |
Paul M. Connolly | | $ | 127,750 | | | $ | 54,993 | | | $ | 10,834 | | | $ | 193,577 | |
Bari A. Harlam | | $ | 110,750 | | | $ | 54,993 | | | $ | 10,834 | | | $ | 176,577 | |
Marisa J. Harney(5) | | $ | 10,000 | | | $ | — | | | $ | 250 | | | $ | 10,250 | |
Diane S. Hessan | | $ | 104,000 | | | $ | 54,993 | | | $ | 11,834 | | | $ | 170,827 | |
Richard E. Holbrook | | $ | 97,250 | | | $ | 54,993 | | | $ | 11,834 | | | $ | 164,077 | |
Deborah C. Jackson | | $ | 150,500 | | | $ | 54,993 | | | $ | 11,834 | | | $ | 217,327 | |
Peter K. Markell | | $ | 138,250 | | | $ | 54,993 | | | $ | 10,834 | | | $ | 204,077 | |
Paul D. Spiess | | $ | 121,750 | | | $ | 54,993 | | | $ | 11,834 | | | $ | 188,577 | |
Linda M. Williams(5) | | $ | 10,000 | | | $ | — | | | $ | — | | | $ | 10,000 | |
| (1) | Represents total fees earned in 2023, including fees deferred pursuant to the 409A Plan. |
| (2) | Represents the aggregate grant date fair value of restricted stock awards computed in accordance with FASB ASC Topic 718, which was equal to the closing price of a share of Company common stock on the date of grant, May 15, 2023, multiplied by the number of shares underlying the award. |
| (3) | For directors other than Mses. Harney and Williams, represents accrued dividends paid upon the vesting of a portion of 2021 restricted stock awards that had been granted on November 30, 2021, and the vesting of restricted stock awards that had been granted on May 17, 2022. Dividends paid for 2023 represent $10,834 for each such director. Amounts also include matching contributions to charitable institutions in the name of the director pursuant to a matching charitable gift program offered through the Foundation. Matching contributions are $1,000 for each Messrs. Borgen, Chung, Holbrook, Spiess and Mses. Jackson and Hessan; $500 for Mr. Bane and $250 for Ms. Harney. Non-employee directors may participate in this program in connection with their service as directors; matching gifts are capped at $1,000 per director per year. |
| (4) | Our directors’ total compensation in this table does not include earnings on the 409A Plan, a nonqualified defined contribution plan in which Mr. Connolly and Ms. Harlam participate, because the participants do not receive any preferential or above-market earnings under such plan. Under the terms of the 409A Plan, the increase in the value of the benefit provided in the 409A Plan increases (or decreases) based upon changes in one or more generally available investment benchmarks or strategies chosen by the respective participant. |
| (5) | Mses. Harney and Williams joined our Board of Directors in October 2023 and received fees in 2023 in connection with meeting attendance. |
64
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned
($)(1) | | Nonqualified Deferred Compensation
Earnings (2) | | All Other Compensation
($) (3) | | Total ($) |
| Richard C. Bane | | $ | 129,600 | | | $ | 447,339 | | | $ | 55,000 | | | $ | 631,939 | |
| Luis Borgen | | $ | 102,100 | | | $ | — | | | $ | 55,000 | | | $ | 157,100 | |
| Joseph T. Chung | | $ | 113,350 | | | $ | — | | | $ | 55,000 | | | $ | 168,350 | |
| Paul M. Connolly | | $ | 123,600 | | | $ | 59,764 | | | $ | 55,000 | | | $ | 238,364 | |
| Bari A. Harlam | | $ | 89,600 | | | $ | 76,634 | | | $ | 55,000 | | | $ | 221,234 | |
| Diane S. Hessan | | $ | 97,100 | | | $ | — | | | $ | 55,000 | | | $ | 152,100 | |
| Richard E. Holbrook (4) | | $ | 103,600 | | | $ | — | | | $ | — | | | $ | 103,600 | |
| Deborah C. Jackson | | $ | 138,350 | | | $ | — | | | $ | 55,000 | | | $ | 193,350 | |
| Peter K. Markell | | $ | 127,600 | | | $ | — | | | $ | 55,000 | | | $ | 182,600 | |
| Greg A. Shell | | $ | 98,350 | | | $ | — | | | $ | 55,000 | | | $ | 153,350 | |
| Paul D. Spiess | | $ | 117,100 | | | $ | — | | | $ | 55,000 | | | $ | 172,100 | |
(1)Represents total fees earned in 2020,Director Stock Ownership Guidelines. The Company’s Board of Directors believes that the Company’s directors, including fees deferred pursuant to the 409A Deferred Compensation Plan.
(2)Represents the 2020 increaseCEO, should hold meaningful equity ownership positions in the valueCompany, in part to align directors’ interests with those of the deferred compensation benefits noted above, which increase (or decrease) is based upon changes in one or more generally available investment benchmarks or strategies chosen by the respective participant. For Messrs. Bane and Connolly and Ms. Harlam, amounts represent compensation deferred under the 409A Plan. Mr. Bane's amount also includes compensation that he previously deferred under the Eastern Bank Deferred Compensation Plan, which is now frozen, as described below.
(3)Represents 2020 accruals under the Outside Directors’ Retainer Continuance Plan. As a former executive of Eastern Bank Corporation, Mr. Holbrook is not eligible to participate in this plan.
(4)In addition to his fees earned as a director in 2020, Mr. Holbrook also received $2,067,033 related to a 2016 grant under the LTIP which matured in 2020, and a $200,000 retirement-related payment in 2020 in connection with his previous tenure as chief executive officer of Eastern Bank. Mr. Holbrook's LTIP amount includes $793 in interest paid thereon from the date of maturation (December 31, 2020) through the date of payment. Mr. Holbrook retired as chair and chief executive officer of Eastern Bank in 2016.
Outside Directors’ Retainer Continuance Plan. In addition to the fees outlined above, directors who have never been employees of Eastern Bank or an acquired company (“Outside Directors”) are eligible for an annual benefit after retirement or other separation from service (the “Outside Directors’ Retainer Continuance Plan” or “ODRC”). An amount equal to one year’s annual retainer is accrued for each Outside Director on an annual basis. At the time of payout, Outside Directors receive annual payments equal to the sum of all annual retainers paid to the Outside Director (disregarding meeting fees and other payments) divided by the number of years in the benefit period. The “benefit period” is the lesser of ten or the total years of service as an Outside Director. Beneficiaries of a deceased Outside Director receive the benefits to which the Outside Director was entitled and in the event that the deceased Outside Director had not yet started receiving payments under the plan, starting no earlier than the year in which the Outside Director would have attained the age of 50. In 2020,Company’s shareholders. Accordingly, the Board of Directors votedhas adopted the stock ownership guidelines set forth below. Each director is expected to amendachieve the ODRCapplicable stock ownership threshold within five years of either the date of initial implementation of the stock ownership guidelines (June 2020) or the date the director is first elected to “freeze” it as of December 31, 2020, so that no further accruals will be made to the ODRC after that date. In
addition, the Board of Directors,
amendedwhichever is later: | • | | Non-employee directors shall hold five times the value of their cash retainers in shares of the Company’s stock; |
| • | | The CEO shall hold five times the value of his or her annual base salary in shares of the Company’s stock; and |
Any director who serves as an executive officer, other than the ODRCCEO, will be required to allow directorshold multiples of the value of his or her base salary in shares of the Company’s stock, depending on the position (and as set forth in the management stock ownership guidelines) and as established by the C&HCM Committee.
There is a one year holding period for 50% of a director’s vested shares until the applicable minimum holding requirement described above has been met. Holdings that satisfy a director’s stock ownership requirements include all outstanding shares held and all restricted stock awarded to a director. Unvested awards of performance stock units, stock options, warrants or other rights not listed above exercisable for or convertible into shares of common stock will not count towards satisfying the ownership requirement unless and until shares under such awards are actually issued to a director.
Compliance with less than five yearsstock ownership guidelines is evaluated annually. A director is not required to purchase additional shares to satisfy the ownership requirement in the event of service to become immediately eligible and credited with service and retainers since their start datea decline in the Company’s stock price, but the director is generally prohibited from selling or transferring shares until the minimum ownership requirement has been achieved, except as a director.
The Eastern Bank Deferred Compensation Plan. Eastern Bank maintains a frozen non-qualified plan for elective deferrals prior tootherwise determined by the C&HCM Committee. As of January 1, 2005. The frozen plan is “grandfathered” and not subject2024, all of our non-employee directors met or were on track to Section 409A ofmeet our stock ownership guidelines within the Internal Revenue Code. Mr. Bane is the only director who participated in this plan.
39required time period.65
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The following table summarizes the aggregate fees (including out-of-pocket expenses) billed for professional services rendered by Ernst & Young for fiscal 2020years 2023 and 2019.2022. All such services were pre-approved by our Audit Committee in accordance with its charter, as described below in the section captioned “Pre-Approval“Pre-Approval Policy and Procedures.”
| | | | | | | | | | | | | | |
| Fee Category | | Fiscal 2020 | | Fiscal 2019 |
| Audit Fees (1) | | $ | 1,488,700 | | | $ | 1,162,800 | |
| Audit-Related Fees (2) | | 1,728,545 | | | 131,600 | |
| Tax Fees (3) | | 432,571 | | | 407,688 | |
| All Other Fees (4) | | — | | | 182,213 | |
| Total Fees | | $ | 3,649,816 | | | $ | 1,884,301 | |
(1)Audit fees consist of fees for the audit of our annual consolidated financial statements (including an assessment of our internal control over financial reporting), the review of interim consolidated financial statements included in our quarterly reports on Form 10-Q, and other professional services provided in connection with statutory and regulatory filings or engagements. These fees also include expanded audit procedures or consultations with our management as to the accounting or disclosure treatment of transactions or events under the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, Financial Accounting Standards Board or other regulatory or standard-setting bodies.
(2)Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or the review of our financial statements and are not reported under “Audit Fees.” Audit-related services provided by EY in 2020 represented fees in connection with our initial public offering and other attestation services. Audit-related services provided by EY in 2019 represented fees for services in connection with a service organization control report for the Company's Eastern Wealth Management division ("EWM"), as well as accounting consultations and other audit and attestation services.
(3)Tax fees in 2020 and 2019 consist of fees for tax preparation and tax compliance and advisory services in connection with servicing EWM clients.
(4)Other fees in 2019 represented fees for an assessment of the Company's deposit insurance program.
| | | | | | | | |
Fee Category | | Fiscal Year 2023 | | | Fiscal Year 2022 | |
Audit Fees (1) | | $ | 2,242,200 | | | $ | 1,966,200 | |
Audit-Related Fees (2) | | $ | 39,100 | | | $ | 39,100 | |
Tax Fees (3) | | $ | 402,924 | | | $ | 371,511 | |
All Other Fees (4) | | $ | — | | | $ | — | |
| | | | |
Total Fees | | $ | 2,684,224 | | | $ | 2,376,811 | |
| | | | |
| (1) | Audit fees consist of fees for the audit of our annual consolidated financial statements (including an assessment of our internal control over financial reporting), the review of interim consolidated financial statements included in our quarterly reports on Form 10-Q, and other professional services provided in connection with statutory and regulatory filings or engagements. For 2023, these fees included audit work related to a recast of the financial information contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, in connection with the sale of our insurance operations; the sale of the insurance operations; and consent provided for the Company’s registration statement on Form S-4 in connection with the proposed acquisition of Cambridge Bancorp. For 2022, these fees included audit work related to the adoption of the current expected credit losses methodology, also known as CECL, effective January 1, 2022. These fees for both years also included expanded audit procedures or consultations with our management as to the accounting or disclosure treatment of transactions or events under the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, Financial Accounting Standards Board or other regulatory or standard-setting bodies. |
| (2) | Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or the review of our financial statement and are not reported under “Audit Fees.” Audit-related services provided by EY in 2023 and 2022 represented fees in connection with attestation services. |
| (3) | Tax fees in 2023 and 2022 consist of fees for tax preparation and tax compliance and advisory services in connection with servicing our clients in our Eastern Wealth Management division. |
| (4) | There were no other fees in 2023 or 2022. |
Pre-Approval Policy and Procedures
In accordance with its charter, the Audit Committee of our Board of Directors pre-approves any engagement for audit services, audit-related, and non-audit services (including tax services) to be provided by our independent external auditor before the independent external auditor is engaged to render such services.
The Audit Committee may, and from time to time does, delegate its authority to pre-approve services to the Chair of such committee, provided that any such approvals are presented to the full committee at the next Audit Committee meeting.
66
The Audit Committee of the Board of Directors (the “Audit Committee”) is comprised of the fivesix directors named below. Each member of the Audit Committee is an independent director (as independence is defined in the listing standards of the Nasdaq Global Select Market and Rule 10A-3 under the Exchange Act with respect to membership on audit committees).
The Audit Committee has adopted a written charter, which has been approved by the Board of Directors. The Audit Committee has reviewed and discussed the Company’s audited consolidated financial statements with management, which has primary responsibility for the preparation, presentation and integrity of the consolidated financial statements, and with the Company’s independent registered public accounting firm. The Company’s independent registered public accounting firm is responsible for auditing our Company’s financial statements and expressing opinions on the conformity of the Company’s audited consolidated financial statements with generally accepted accounting principles and on the Company’s internal controls over financial reporting. The Audit Committee is responsible for providing independent, objective oversight of these functions.
In the performance of the Audit Committee'sCommittee’s oversight function, we have reviewed and discussed the audited financial statements of our company for the fiscal year ended December 31, 2020,2023, with management and our independent registered public accounting firm, Ernst & Young.Young LLP (“EY”). We also discussed with EY the reasonableness of significant judgments and the clarity of disclosures in the financial statements, the quality, not just the acceptability, of our Company’s accounting principles and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards, including the matters required to be discussed pursuant to the applicable requirements of the Public Company Accounting Oversight Board ("PCAOB"(“PCAOB”) and the SEC. EY has also provided to the Audit Committee with their communicationcommunications required by PCAOB rules, and the Audit Committee has discussed with EY the firm’s independence. We have also considered whether the provision by EY of tax services in 20202023 and 2019, and the provision of non-audit services in 2019,2022 is compatible with maintaining their independence.
Based on our review of the materials and discussions with management and the independent registered public accounting firm described in this report, the Audit Committee recommended to the Board of Directors that the audited financial statements for 20202023 and 20192022 be included in our Company’s Annual Report on Form 10-K for the year ended December 31, 20202023 for filing with the SEC, and the Audit Committee appointed EY as the Company'sCompany’s independent registered public accounting firm for 2021.
2024.By the Audit Committee of the Board of Directors,
Peter K. Markell (chair)
Richard C. Bane (chair)
Peter K. Markell
Luis A. Borgen
Marisa J. Harney
Paul D. Spiess
Linda M. Williams
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3RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board of Directors has appointed EYErnst & Young as our Company’s independent registered public accounting firm for the fiscal year ended December 31, 2021.2024. EY has served as our Company’s independent registered public accounting firm since 2002. Although we are not required to seek shareholder ratification of this appointment, our Board of Directors decided to provide our shareholders with the opportunity to do so. If this proposal is not approved by our shareholders at the Annual Meeting, our Audit Committee will reconsider the appointment of EY. Even if the appointment of EY is ratified, our Audit Committee in its discretion may appoint a different independent registered public accounting firm at any time during the year.
Representatives of EY are expected to be present at the Annual Meeting. They will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from shareholders.
Our Board of Directors believes that the ratification of the appointment by the Audit Committee of Ernst & Young as our Company’s independent registered public accounting firm for the 20212024 fiscal year is in the best interests of our Company and shareholders and recommends you vote
FORratification in Proposal 4.
We are not aware at this time of any other matters that will be presented for action at the Annual Meeting. Should any such matters be presented, the proxies grant power to the proxy holders to vote shares represented by the proxies in the discretion of the proxy holders.
Shareholder proposals intended to be included in the proxy statement and form of proxy relating to our 20222025 annual meeting of shareholders and to be presented at that meeting must be received by us for inclusion in the 2025 proxy statement and form of proxy no later than December 2, 2021.2024. In addition, our Bylaws contain an advance notice provision that requires shareholders who desire to bring proposals before an annual meeting (which proposals are not to be included in our proxy statement and are submitted outside the processes of Rule 14a-8 of the Exchange Act) to comply with the advance notice provision. The advance notice provision requires that shareholders give timely written notice of their proposal to our Corporate Secretary. To be timely, notices must be delivered to our Corporate Secretary at our principal executive office not less than 90 nor more than 120 days before the first anniversary of the prior year’s annual meeting of shareholders. Accordingly, a shareholder who intends to present a proposal at the 20222025 annual meeting of shareholders must provide written notice of the proposal to our Corporate Secretary after January 17, 202213, 2025 and before February 16, 2022.12, 2025. Proposals received at any other time will not be voted on at the meeting. Shareholders who wish to nominate director candidates for the shareholders to consider must include in the notice the additional information specified in our Bylaws including, among other things, the candidate’s name, biographical data and qualifications. Exchange Act Rule 14a-19(b) also requires additional information be included in director nomination notices, including a statement that the shareholder intends to solicit the holders of shares representing at least 67% of the voting power of shares entitled to vote on the election of directors. If a shareholder makes a timely notification, the proxies that we solicit for the meeting may still exercise discretionary voting authority on the proposal, consistent with the proxy rules of the SEC.
The Board of Directors of Eastern Bankshares, Inc. is soliciting proxies, and the Company pays for distributing and soliciting proxies. Copies of proxy materials and the Annual Report will be supplied to brokers, dealers, banks and voting trustees, or their nominees, for the purpose of soliciting proxies from beneficial owners, and we will reimburse such record holders for their reasonable expenses. fees and expenses in forwarding proxy materials to shareholders.
Shareholders who elect to vote through the Internet or by telephone may incur costs such as telecommunication and Internet access charges for which the shareholder is solely responsible. The telephone and Internet voting facilities for shareholders of record will close when the polls close at 11:59 p.m. Eastern Time on May 16, 2021. The Internet voting facility will be re-opened during the Annual Meeting for shareholders of record that have registered for, chosen to participate in, and plan to vote their shares virtually. The Company will otherwise pay the expenses of solicitation of proxies.
Meeting.Boston, Massachusetts
FORWARD-LOOKING STATEMENTS
When we use the terms "we"“we”, "us"“us”, "our,"“our,” and the "Company,"“Company,” we mean Eastern Bankshares, Inc., a Massachusetts corporation, and its consolidated subsidiaries, taken as a whole, unless the context otherwise indicates.
Certain statements contained in this Proxy Statement that are not historical facts may be considered forward-lookingforward- looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements, which are based on certain current assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions.
Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. Our actual results could differ materially from those projected in the forward-looking statements as a result of, among others, factors:
•risks related to the negative impactsimplementation of acquisitions, dispositions, and disruptionsrestructurings, including the risk that acquisitions may not be timely completed or at all and may not produce results at levels or within time frames originally anticipated, including due to delays in obtaining regulatory approvals or to the conditions associated with such approvals;
risks related to the pending acquisition and integration of Cambridge Bancorp and Cambridge Trust Company, including that revenue or expense synergies or other expected benefits may not materialize or may be more costly to achieve than anticipated; that the COVID-19 pandemiccombined businesses may not perform as expected; and measures takenthat the merger is not timely completed or at all due to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations;regulatory, contractual or other reasons;
•changes in regional, national or international macroeconomic conditions, including changes in inflation, recessionary pressures or interest rates in the length and extent of the economic contraction as a result of the COVID-19 pandemic; continued deterioration in employment levels and other United States;
| • | | the possibility that future credit losses, loan defaults and charge-off rates are higher than expected due to changes in economic assumptions or adverse economic developments; |
general business and economic conditions on a national basis and in the local markets in which we operate;
•changes in customer behavior;
•the possibility that futureoperate, including those impacting credit losses, loan defaults and charge-off rates are higher than expected due to changes in economic assumptions or adverse economic developments;quality;
•turbulence in the capital and debt markets;
markets and within the banking industry;•changes in interest rates;
•decreases in the value of securities and other assets;
•decreases in deposit levels necessitating increased borrowing to fund loans, investments and investments; other needs;
competitive pressures from other financial institutions;institutions or changes to customer behavior;
•operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics;
•reputational risks relating to our participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs;
•changes inregulation, legislation, accounting standards and practices;practices, and fiscal and monetary policy;
•the risk that goodwill and intangibles recorded in our financial statements will become impaired;
•risks related to the implementation of acquisitions, dispositions, and restructurings, including the risk that acquisitions may not produce results at levels or within time frames originally anticipated;
•the risk that we may not be successful in the implementation of our business strategy;
•changes in assumptions used in making such forward-looking statements;
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•and other risks and uncertainties detailed in Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020.
| • | | and other risks and uncertainties detailed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as may be updated by Part II, Item 1A “Risk Factors” in our Quarterly Reports on Form 10-Q, as may be filed with the SEC from time to time. |
Forward-looking statements speak only as of the date on which they are made. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-lookingforward- looking statements are made.
ANNEX
Eastern Bankshares, Inc. Annual Meeting of Shareholders Please make your marks like this: THE BOARD OF DIRECTORS OF EASTERN BANKSHARES, INC. (“COMPANY”) RECOMMENDS A
Non-GAAP Financial Measure
| | | | | | | | | | | | | | |
| | For the Year Ended December 31, |
| | 2020 | | 2019 |
| | (Dollars in thousands) |
| Net income (GAAP) | | $ | 22,738 | | | $ | 135,098 | |
|
| Non-GAAP adjustments: | | | | |
| Noninterest income components: | | | | |
| (Income) losses from investments held in rabbi trusts | | (10,337) | | | (9,866) | |
| (Gain) loss on sales of securities available for sale, net | | (288) | | | (2,016) | |
| (Gains) losses on sale of other assets | | 20 | | | 15 | |
| Noninterest expense components: | | | | |
| Rabbi trust employee benefit expenses (income) | | 4,789 | | | 4,604 | |
| Impairment charge on tax credit investments | | 10,779 | | | — | |
| Indirect IPO costs (1) | | 1,199 | | | — | |
| (Gain) on sale of other real estate owned | | (606) | | | — | |
| Merger and acquisition expenses | | 90 | | | — | |
| Stock donation to the Eastern Bank Charitable Foundation | | 91,287 | | | — | |
| Total impact of Non-GAAP adjustments | | 96,933 | | | (7,263) | |
| Less net tax benefit (expense) associated with Non-GAAP adjustment (2) | | 17,537 | | | 1,861 | |
| Non-GAAP adjustments, net of tax | | $ | 79,396 | | | $ | (5,402) | |
| Net operating earnings (Non-GAAP) | | $ | 102,134 | | | $ | 129,696 | |
(1)Reflects costs associated with VOTE: “FOR” EACH NOMINEE NAMED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3 BOARD OF DIRECTORS PROPOSAL YOUR VOTE RECOMMENDS 1. To elect five directors for a three-year term expiring in 2027: FOR AGAINST ABSTAIN 1.01 Richard C. Bane FOR #P2# #P2# #P2# 1.02 Joseph T. Chung FOR #P3# #P3# #P3# 1.03 Paul M. Connolly FOR #P4# #P4# #P4# 1.04 Bari A. Harlam FOR #P5# #P5# #P5# 1.05 Marisa J. Harney FOR #P6# #P6# #P6# FOR AGAINST ABSTAIN 2. To approve, in an advisory vote, the initial public offering that are indirectly relatedcompensation paid to the offering and therefore were not recordedCompany’s named executive FOR officers #P7# #P7# #P7# 3. To ratify the appointment of Ernst & Young LLP by the Audit Committee of our Board of Directors FOR as a reduction of capital.
(2)The net tax (expense) benefit associated with these items is determined by assessing whether each item is included the Company’s independent registered public accounting firm for the 2024 fiscal year #P8# #P8# #P8# PLEASE DO NOT RETURN THIS PROXY CARD IF YOU ARE VOTING BY INTERNET OR TELEPHONE. PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD IF VOTING BY MAIL. You must register if you wish to attend the meeting online and/or excluded from net taxable income and applying our combined statutory tax rate only to those items included in net taxable income.
Net operating earnings is a non-GAAP financial measure. Non-GAAP financial measures are not meantparticipate at www.proxydocs.com/EBC Authorized Signatures—Must be completed for your instructions to be considered superior to or a substitute forexecuted. Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the results of operations prepared in accordance with GAAP. In addition, this non-GAAP financial measure has limitations associated with its use as compared to the most directly comparable GAAP measure, in that it may be different from, and therefore not comparable to, similar measures used by other companies and to the performance of our competitors. Such measure is also used by us in our financial and operating decision-making and for compensation purposes. We also believe this information is responsive to investors' requests and gives them an additional measure of our performance.
We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measure, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our core business, operating results, or future outlook. We believe that the inclusion of such measure helps investors to gain an understanding of our underlying operations and future prospects, consistent with how management measures and forecasts our performance, especially when comparing such results to previous periods or forecasts. Such measure is also used by us in our financial and operating decision-making and for compensation purposes.
Annex AProxy/Vote Form. Signature (and Title if applicable) Date Signature (if held jointly) Date
