SEC Form DEF 14A filed by ConnectOne Bancorp Inc.

 

301 Sylvan Avenue

Englewood Cliffs, New Jersey 07632

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

To Be Held on May 20, 2025

To Our Shareholders:

 

We invite you to the Annual Meeting (the “Annual Meeting”) of ConnectOne Bancorp, Inc. (the “Company”), the holding company for ConnectOne Bank (the “Bank”), will be held via webcast on May 20, 2025 at 9:15 a.m. for the purpose of considering and voting upon the following matters, all of which are more completely set forth in the accompanying Proxy Statement:

 

1.

The election of twelve (12) directors of the Company, each to serve for the terms described in the proxy statement or until his or her successor is elected and shall qualify;

 

2.

To vote, on an advisory basis, to approve the executive compensation of the Company’s named executive officers, as described in this proxy statement;

 

3.

To ratify the appointment of Crowe LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2025; and

 

4.

Such other business as shall properly come before the Annual Meeting.

 

This year's Annual Meeting will be a completely virtual meeting of shareholders, which will be conducted via a live webcast. You will be able to participate in the Annual Meeting, vote and submit your questions during the Annual Meeting via live webcast by visiting www.virtualshareholdermeeting.com/CNOB2025.

 

Because the Annual Meeting is virtual and being conducted via live webcast, shareholders will not be able to attend the Annual Meeting in person. Details regarding how to participate in the meeting online and the business to be conducted at the meeting are more fully described in the accompanying proxy statement.

 

Only holders of record of shares of the Company’s common stock (the “Common Stock”) at the close of business on March 31, 2025 will be entitled to vote at the Annual Meeting.

 

Very truly yours, FRANK SORRENTINO III Chairman of the Board of Directors

If you are participating in the Annual Meeting by webcast, you may vote online during the meeting even if you have already returned your proxy.

 

Englewood Cliffs, New Jersey

April 10, 2025  

  

 

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We are distributing our proxy materials to shareholders via the U.S. Securities and Exchange Commission’s “Notice and Access” rules. We believe this approach allows us to provide shareholders with a timely and convenient way to receive proxy materials and vote, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting. We are mailing to our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) beginning on or about April 10, 2025, rather than paper copies of the Proxy Statement, the proxy card and our annual report on Form 10-K for the fiscal year ended December 31, 2024. The Notice of Internet Availability contains instructions on how to access the proxy materials, vote and obtain, if desired, a paper copy of the proxy materials.

 

 

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This Proxy Statement is being furnished to shareholders of ConnectOne Bancorp, Inc. (the "Company") in connection with the solicitation by the Board of Directors of proxies to be used at the Annual Meeting of Shareholders to be held via webcast at 9:15 a.m. on May 20, 2025. Because the Annual Meeting is virtual via live webcast, shareholders will not be able to attend the Annual Meeting in person but may participate by joining the live webcast. Please go to www.virtualshareholdermeeting .com/CNOB2025 for instructions on how to participate in the Annual meeting.

 

Any shareholder may participate and listen live to the webcast of the Annual Meeting over the Internet at such site. Shareholders of record as of March 31, 2025 may vote and submit questions either in advance of or while participating in the Annual Meeting via the Internet by using the control number included on the proxy statement or proxy card. The webcast starts at 9:15 a.m. We encourage you to access the meeting prior to the start time. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log-in page.

 

 

Why have I received these materials?

 

The accompanying proxy is solicited by the Board of Directors of ConnectOne Bancorp, Inc. (referred to throughout this Proxy Statement as the “Company” or “we”), the holding company for ConnectOne Bank, in connection with our Annual Meeting that will take place virtually on May 20, 2025. You are cordially invited to electronically participate in the Annual Meeting and are requested to vote on the proposals described in this Proxy Statement.

 

Who is entitled to vote at the Annual Meeting?

 

Holders of Common Stock as of the close of business on March 31, 2025, will be entitled to vote at the Annual Meeting. On March 31, 2025, there were outstanding and entitled to vote 38,469,975 shares of Common Stock, each of which is entitled to one vote with respect to each matter to be voted on at the Annual Meeting.

 

How do I vote my shares at the Annual Meeting?

 

If you are a “record” shareholder of Common Stock (that is, if you hold Common Stock in your own name as of March 31, 2025 on the Company’s stock records maintained by our transfer agent, Broadridge Financial Solutions, Inc.), you may vote by proxy or online at the Annual Meeting. To vote by proxy, you may use one of the following methods:

 

●

Telephone voting, by dialing the toll-free number and following the instructions on your proxy card;

●

Internet voting, by accessing the Internet at the web address stated on the proxy card and following the instructions; or

●

Vote by mail, by completing and returning the proxy card in the enclosed envelope. The envelope requires no additional postage if mailed in the United States.

 

If you hold your shares in “street name”, i.e., through a broker or other custodian, you must follow the voting instructions provided to you by your broker or custodian.

 

 

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

 

Any shareholder of record has the power to revoke their proxy at any time before it is voted. You may revoke your proxy before it is voted at the Annual Meeting by:

 

●

Voting again by telephone or the Internet, or completing a new proxy card with a later date – your latest vote will be counted;

●

Filing with the Secretary of the Company written notice of such revocation; or

●

Participating in the virtual Annual Meeting and voting online during the meeting.

 

What constitutes a quorum for purposes of the Annual Meeting?

 

The presence at the Annual Meeting online or by proxy of the holders of a majority of the voting power of all outstanding shares of Common Stock entitled to vote shall constitute a quorum for the transaction of business. Proxies marked as abstaining (including proxies containing broker non-votes) on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast on such matters.

 

Why is it important to vote my shares?

 

If we do not have a quorum present at the Annual Meeting, we will need to adjourn the meeting to solicit additional proxies. This will cause additional expense and delay for the Company.

 

What vote is required to approve each item?

 

Pursuant to the New Jersey Business Corporation Act (“NJBCA”), directors are elected by affirmative vote of a plurality of the votes cast. Notwithstanding the foregoing, in accordance with the Company’s Bylaws, each of the Company’s directors has submitted an irrevocable resignation from the Board, which shall become effective in the event such director does not receive at least a majority of the votes cast in any uncontested election. In such an event, the director’s resignation will become effective at the earlier of (i) the selection of a replacement director by the Board of Directors, or (ii) 90 days after certification of such stockholder vote. Accordingly, in the event that a nominee for re-election to the Board receives a plurality of the votes cast, but not a majority, he or she shall be re-elected to the Board under the provisions of the NJBCA, but his or her service shall continue only until such resignation becomes effective. Therefore, as a practical matter, re-election to a new term on the Board requires an affirmative vote of a majority of the votes cast at the Annual Meeting.

 

The nonbinding resolution with respect to executive compensation, together with the proposal for the ratification of the appointment of the independent registered public accountants, require the affirmative vote of a majority of the votes cast at the Annual Meeting by shares represented online or by proxy.

 

 

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How does the Board recommend that I vote my shares?

 

Unless you give other instructions on your proxy card, the persons named as proxies on the card will vote in accordance with the recommendations of the Board of Directors. The Board’s recommendation is set forth together with the description of each item in this Proxy Statement. In summary, the Board recommends a vote:

 

●

FOR the directors’ nominees to the Board of Directors;

●

FOR approval of the non-binding resolution with respect to executive compensation;

●

FOR ratification of the appointment of Crowe LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2025.

 

With respect to any other matters that properly come before the Annual Meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion in the best interests of the Company. On the date this Proxy Statement went to print, the Board of Directors had no knowledge of any business other than that described in this proxy statement that would be presented for consideration at the Annual Meeting.

 

Who will bear the expense of soliciting proxies?

 

The Company will bear the cost of soliciting proxies. In addition to the solicitation by mail, proxies may be solicited personally or by telephone, facsimile or electronic transmission by our employees. In addition, we have retained Laurel Hill Advisory Group, LLC at an estimated cost of $7,000 plus reimbursement of out-of-pocket expenses, including per call fees for each call made, to assist in the solicitation of proxies. We also have agreed to indemnify Laurel Hill Advisory Group, LLC against certain liabilities in connection with this proxy solicitation.

 

 

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The Certificate and By-Laws of the Company provide that the number of Directors shall not be less than five or more than 25 and permit the exact number to be determined from time to time by the Board of Directors.

 

Our twelve continuing directors have a diversity of experience and backgrounds, including significant and varied operational, financial, risk, technology, compensation and human resources, corporate governance, leadership and other experience. Over the past several years, we have enhanced the industry and Company-specific knowledge of our Board of Directors with fresh perspectives brought by our new directors. We believe that our directors are active and engaged and have the skills necessary to guide the Company as it grows, as our business strategy and the banking industry around us continue to evolve and as the financial services sector becomes ever more competitive.

 

As previously disclosed, in connection with our merger with The First of Long Island Corporation, Christopher Becker, President and CEO of The First of Long Island Corporation, and two other members of the First of Long Island Board selected by our Board, will be added to our Board to serve until the 2026 Annual Meeting of Shareholders, when it is expected that they will be nominated for reelection. Upon the closing of the merger, which may happen prior to the Annual Meeting, our Board will be increased to fifteen members.

 

 

The Board continually seeks to refresh and improve its composition and has added new directors both as a result of the acquisition of other insured institutions and through searches when it was determined that different skill sets or points of view were needed for the Board. Pursuant to the Nominating and Corporate Governance Committee Charter as approved by the Board, the Nominating and Corporate Governance (the “NCG”) Committee is charged with the central role in the process relating to director nominations, including identifying, interviewing and selecting individuals who may be nominated for election to the Board of Directors. As part of the Board’s commitment to refreshment, a mandatory retirement age of 75 for directors has been adopted.

 

We have had 6 new members join our Board of Directors since 2018. In addition, as discussed above, Mr. Becker and two other members of the Board of The First of Long Island Corporation will join our Board at the closing of the proposed merger between the Company and The First of Long Island Corporation. The process the NCG Committee follows when it identifies and evaluates individuals to be nominated for election to the Board of Directors is as follows:

 

 

Candidates to serve on the Board will be identified from all available sources, including recommendations made by shareholders. The NCG Committee’s charter provides that there will be no difference in the manner in which the NCG Committee evaluates nominees recommended by shareholders and nominees recommended by the NCG Committee or management, except that no specific process shall be mandated with respect to the nomination of any individuals who have previously served on the Board. The evaluation process for individuals other than existing board members will include:

 

●

A review of the information provided to the NCG Committee by the proponent of the candidate;

●

If requested, a review of reference letters from at least two sources determined to be reputable by the NCG Committee; and

●

An interview with the candidate, together with a review of such other information as the NCG Committee shall determine to be relevant.

 

 

4

 

 

The NCG Committee, in evaluating potential director candidates, conducts a check of the individual’s background, interviews the candidate, and determines whether the candidate is eligible and qualified for service on the Board of Directors by evaluating the candidate under the selection criteria set forth herein.

 

The biography of each of the nominees below contains information regarding the person’s tenure as a director, business experience, other director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the NCG Committee and the Board to determine that the person should serve as a director for the Company. The Board of Directors has determined that the Board as a whole must have the right mix of characteristics and skills for the optimal functioning of the Board in its oversight of the Company. The Company considers the following requirements for each of its members of the Board:

 

●

Experience: Current and past work and Board experience; knowledge of the banking industry and financial services companies; familiarity with the operations of public companies; and business and management experience and acumen.

●

Personal characteristics: Ability to work collaboratively with management and as a member of the Board; ability to think strategically and develop a strategic vision or central idea for the Company; familiarity with and participation in the local businesses and the communities served by the Bank; integrity, accountability and independence.

●

Director commitment: Time and effort available to devote to being a director; awareness and ongoing education; attendance at Board and committee meetings and other Company functions; other board commitments; stock ownership; changes in professional responsibilities; and length of service.

●

Team and Company considerations: Balancing director contributions; diversity of skills; and financial condition.

 

 

The NCG Committee and the Board both believe that an effective director evaluation process enables it to gain insights into the effectiveness of the Board, its committees and its individual members, with the goal of continually enhancing Board performance. In this regard, each year the Board, through the NCG Committee conducts an evaluation of the performance, effectiveness, and fulfillment of fiduciary duties of the Board as a whole, and of the performance of each member of the Board. The Board evaluation process generally comprises:

 

●

An annual, overall board evaluation;

●

An annual, individual director evaluation; and

●

A background and skills matrix questionnaire.

 

The evaluation is accomplished through completion of a written questionnaire by each director. The responses are provided to the NCG Committee, on an anonymous basis, and then shared with the full Board, also on an anonymous basis.

 

 

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The Board adopted a skills matrix that represents certain skills that the Board identified as particularly valuable to the effective oversight of the Company and execution of its business. The following matrix shows those skills and the number of current directors and Board nominees having each skill, highlighting the diversity of skills currently on the Board, and the table below shows the length of tenure of our current Board members.

 

Frank Sorrentino III

Frank W. Baier

Stephen T. Boswell

Frank Huttle III

Michael Kempner

Elizabeth Magennis

Nicholas Minoia

Anson M. Moise, M.D.

Katherin Nukk-Freeman

Susan O'Donnell

Daniel Rifkin

Mark Sokolich

Human Capital

X

X

X

X

X

C-Suite Experience

X

X

X

X

X

X

X

Business/Market Knowledge

X

X

X

X

X

X

X

X

Risk Management

X

X

X

X

X

X

X

Public Company Governance

X

X

X

X

Financial Services Industry

X

X

X

X

X

Finance, Audit & Tax

X

X

X

X

X

Large Complex Organization

X

X

X

X

Mergers & Acquisition

X

X

X

Capital Markets

X

Technology & Cybersecurity

X

Non-Financial Regulated Experience

X

Government Relations

X

X

X

 

*Director Tenure
Less than 8 years	6
8 - 15 Years	5
More than 15 years	1
*Does not include prior service as a director of an acquired financial institution.

 

 

Although we have not adopted a formal policy on diversity, the Board looks to promote corporate social responsibility and diversity when selecting candidates for Board service. When the Board determines there is a need to fill a director position, we begin to identify qualified individuals for consideration. We seek individuals that possess skill sets that a prospective director will be required to draw upon in order to contribute to the Board, including professional experience, education, and market knowledge. While education and skills are important factors, we also consider how candidates will contribute to the overall balance of the Board, so that we will benefit from directors with different perspectives, varying viewpoints and wide-ranging backgrounds and experiences. We view and define diversity in its broadest sense, which includes gender, ethnicity, education, experience and leadership qualities.

 

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As part of these efforts to promote corporate social responsibility, the following graphics summarize certain demographic characteristics of the Board of Directors:

 

Total number of current directors: 12

 

Part 1 - Gender Identity	Female	Male	Non- Binary	Did Not Disclose Gender
# of Directors	3	9	0	0
Part II: Demographic Background
African American or Black	0	1	0	0
Alaskan Native or Native American	0	0	0	0
Asian	0	0	0	0
Hispanic or Latino	0	0	0	0
Native Hawaiian or Pacific Islander	0	0	0	0
Two or more Races or Ethnicities	0	0	0	0
White	3	8	0	0
LQBTQ+	0
Did not disclose demographic background	0

 

 

For 2025, there are twelve (12) nominees for Director. There are no arrangements or understandings between any director, or nominee for directorship, pursuant to which such director or nominee was selected as a director or nominee.

 

The Board of Directors of the Company has nominated for election to the Board of Directors the persons named below, each of whom currently serves as a member of the Board. If elected, each nominee will serve until the 2026 Annual Meeting of Shareholders, and until his or her replacement has been duly elected and qualified. The Board of Directors has no reason to believe that any of the nominees will be unavailable to serve if elected.

 

The following table sets forth the names, ages, principal occupations, and business experience for all nominees, as well as their prior service on the Board, if any. Unless otherwise indicated, principal occupations shown for each Director have extended for five or more years.

 

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The biography of each nominee is set out below and contains information regarding the nominee’s tenure as a director, his or her age, business experience for at least the last five years, other public company directorships held during the last five years, and the experiences, qualifications, attributes or skills that caused the Nominating Committee and the Board to determine that the person should be nominated to serve as a director. Unless otherwise indicated below, each director nominee has served in his or her current position for at least five years. 

 

AGE: 63 DIRECTOR SINCE: 2014 POSITION: Chairman of the Board & Chief Executive Officer of ConnectoneOne Bancorp and ConnectOne Bank	Frank Sorrentino III Mr. Sorrentino became Chairman and Chief Executive Officer of the Company commencing as of the closing of the Merger with the former ConnectOne Bancorp, Inc. (“Legacy ConnectOne”) on July 1, 2014 (the “Merger”). Prior to this, Mr. Sorrentino served as Chairman and Chief Executive Officer of Legacy ConnectOne and ConnectOne Bank. Prior to becoming Chairman and Chief Executive Officer of Legacy ConnectOne and ConnectOne Bank, Mr. Sorrentino was a founding organizer of ConnectOne Bank and a builder and construction manager in Bergen County, New Jersey. Through his business contacts in our market, Mr. Sorrentino has been able to bring clients and investors to the Company, and his real estate experience in our market is of great value to the Board. In addition, as the Company’s senior executive officer, his insight on the Company’s operations is invaluable to the Board.
AGE: 59 DIRECTOR SINCE: 2014 POSITION: Executive Vice President and Chief Financial Officer of Continental Grain Company, a diversified operating and investment company	Frank Baier Mr. Baier serves as a senior advisor to Continental Grain Company, a diversified operating and investment company. Previously he was Executive Vice President and Chief Financial Officer of Continental Grain Company from 2012 to 2025. Mr. Baier has held senior financial executive roles at a variety of companies including Capital Access Network, Inc., Independence Community Bank, and ContiFinancial Corporation. He was also a consultant for Meridian Capital Group, LLC, and a partner at Columbia Financial Partners. Mr. Baier has an extensive background in finance. Mr. Baier’s extensive background and understanding of finance proves invaluable to the Board.

 

 

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AGE: 71 DIRECTOR SINCE: 2014 POSITION: Vice Chairman of the Board at Boswell Engineering, Inc.	Stephen T. Boswell Mr. Boswell is a founding organizer of the Bank. His firm, Boswell Engineering, Inc., where he currently serves as Vice Chairman of the Board and formerly served as the President and Chief Executive Officer from 1990-2023, is involved in many projects in our market. Through his business activities, Mr. Boswell has a strong sense of business conditions in our market that is invaluable to the Board.
AGE: 71 DIRECTOR SINCE: 2014 POSITION: Partner at Pashman Stein Walder Hayden P.C.	Frank Huttle III Mr. Huttle is a founding organizer of the Bank. Mr. Huttle is a partner at the law firm of Pashman Stein Walder Hayden P.C., and was formerly a partner and of counsel to the law firm of Decotiis, Fitzpatrick, Cole and Giblin. Mr. Huttle also served as the Mayor of the City of Englewood, New Jersey until December 31, 2018. Prior to entering his legal practice in 1988, he was a Partner with Touche Ross & Co. Mr. Huttle also served as President of Hudson Capital Properties, a real estate management and investment company, and as Executive Vice President and General Counsel of Hudson Media Inc., a diversified magazine service and holding company. Mr. Huttle’s extensive experience in the insurance, mortgage banking and real estate industries provides valuable insight to the Board.
AGE: 67 DIRECTOR SINCE: 2014 POSITION: President & Chief Executive Officer, MWWPR	Michael Kempner Mr. Kempner is a founding organizer of the Bank. He has over 30 years of public relations and marketing experience and has served as President and Chief Executive Officer for MWWPR since 1985. His experience as the head of a locally based media company has proved invaluable to the Board.

 

 

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AGE: 56 DIRECTOR SINCE: 2023 POSITION: President of ConnectOne Bank (December 2020 – Present), Executive Vice President and Chief Lending Officer of ConnectOne Bank (September 2006 – December 2020)	Elizabeth Magennis Ms. Magennis became President of the Bank in December of 2020, having previously served as the Bank’s Executive Vice President and Chief Lending Officer beginning in September of 2006, including service to Legacy ConnectOne prior to the Merger. Ms. Magennis also serves as a member of the Board of the Bank. As President of the Bank, Ms. Magennis provides extensive leadership and managerial experience to the Board, and her insight into the Bank’s operations is critical to the Board.
AGE: 69 DIRECTOR SINCE: 2009 POSITION: Managing Partner of Diversified Properties	Nicholas Minoia Nicholas Minoia is the Founding and Managing Partner of Diversified Properties. Founded in 2000, Mr. Minoia’s leadership has helped Diversified Properties and affiliated entities successfully create dozens of multifamily communities comprising over 10,000 units across NJ, NY, PA, MD and CT and manage an existing portfolio and development pipeline spanning several thousand residential units across multiple properties in three different states. Mr. Minoia’s experience as a principal of a full-service real estate group and his knowledge about the real estate market led the Board to conclude that Mr. Minoia should serve as a director.
AGE: 45 DIRECTOR SINCE: 2021 POSITION: Attending Physician, Englewood Hospital Medical Center	Anson M. Moise Dr. Moise is a physician, graduating from Cornell Medical College and board certified in both anesthesiology and pain management. Dr. Moise currently serves as a member of the Governing Board of the Health East Ambulatory Surgical Center and as an attending physician at several area hospitals. He also serves as the Chairman of YourDrs Inc., a telemedicine software company, and an owner of Health East Medical Alliance. He previously served as the Medical Director, Pain Specialists of New York & New Jersey. He is the co-founder of a substance abuse clinic, which helps those addicted to opioids and other illicit drugs. Dr. Moise is a long-time resident of our Bergen County market area, and is deeply committed to the community through his medical practice and affiliations with medical organizations and associations. In addition, his viewpoints and experiences will help the Board better ensure that the Company serves all communities in its trade area. These factors led the Nominating and Corporate Governance Committee to conclude that Dr. Moise would make a valuable contribution to the Board.

 

 

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AGE: 56 DIRECTOR SINCE: 2018 POSITION: Co-founder of Nukk-Freeman & Cerra PC	Katherin Nukk-Freeman Ms. Nukk-Freeman is the co-founder of Nukk-Freeman & Cerra, P.C. a labor and employment law firm located in New York and New Jersey, as well as the co-founder of SHIFT HR Compliance Training. She has also served on the Board of Directors of the New York Society of Security Analysts (2010-2016), the Advisory Board of the Healthcare Businesswomen’s Association (2009 – 2019), as General Counsel to The Healthcare Marketing & Communications Council (2005 – 2009), on the Board of Trustees, Susan G. Komen Breast Cancer Foundation, Human Resources Committee (2004 – 2010), the Board of Trustees, The New Jersey Symphony Orchestra; Human Resources Committee (1999-2008) and the Board of Directors of the Commerce and Industry Association of New Jersey (2013 – 2016). Ms. Nukk-Freeman’s expertise in employment law, and best business practices in Human Resources and Diversity, Equity and Inclusion, coupled with her entrepreneurial undertakings, provides the Board with a unique and invaluable perspective.
AGE: 61 DIRECTOR SINCE: 2024 POSITION: Retired; Formerly Partner of Meridian Compensation Partners LLC	Susan O’Donnell Ms. O’Donnell has over 30 years’ experience as an executive and board compensation and governance expert, with the last 20 dedicated to serving the banking industry. Ms. O’Donnell was a Partner at Meridian Compensation Partners, LLC where she retired in 2023 after 10 years. She also led Pearl Meyer & Partners’ banking industry practice for 10 years. She has significant experience in the banking industry and served as a regular speaker and educator at association meetings and conferences. Susan’s expertise includes public company compensation and governance practices, shareholder engagement, investor/SEC perspectives and talent/human resources matters. Her board compensation and corporate governance experience and point of view make her a valuable addition to the Board.
AGE: 54 DIRECTOR SINCE: 2019 POSITION: Managing Partner of Rifkin & Company, LLP	Daniel Rifkin Mr. Rifkin has been a certified public accountant since 1993 and, since 1999, has served as the Managing Partner of Rifkin & Company, LLP. Mr. Rifkin provides accounting services to both business enterprises and individuals, including tax planning, tax preparation, compilations, audits, and reviews. In addition, he serves as the President of Payserv Corporation, a payroll processing and human resource management company. Mr. Rifkin is a member of the American Institute of CPAs and the New York State Society of CPAs. Mr. Rifkin also serves as a trustee of Hackley School in Tarrytown, NY and St. Thomas Aquinas College in Sparkill, NY. Mr. Rifkin joined the Board of Directors in connection with the acquisition by the Company of Greater Hudson Bank, effective as of January 2, 2019. During his tenure at Greater Hudson Bank, he served as Vice Chairman from 2008 until its acquisition, and as Audit Committee Chairman for approximately five years. Mr. Rifkin’s expertise in accounting matters, and as the proprietor of locally owned businesses, provides him with a unique perspective valuable to the Company’s Board.

 

 

11

 

AGE: 61 DIRECTOR SINCE: 2020 POSITION: Mayor of Fort Lee, New Jersey

Mark Sokolich Mr. Sokolich is an attorney and the Managing Partner of the Law Office of Mark J. Sokolich, a real estate, zoning and commercial law firm in Fort Lee, New Jersey, which he co-founded. Mr. Sokolich has been the Mayor of Fort Lee since 2008 and formerly served on the Fort Lee City Council for two years. Mr. Sokolich’s experience as a Mayor with expertise in municipal, redevelopment and real estate law would enable him to provide a dynamic and valuable perspective to the Board. Mr. Sokolich joined the Board of Directors in connection with the acquisition by the Company of Bank of New Jersey, effective as of January 2, 2020. .

 

No Director of the Company is also currently a director of a company having a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940.

 

The Company encourages all directors to attend the Company’s annual meeting. Each member of the Company’s Board of Directors participated in the Company’s 2024 virtual Annual Meeting of Shareholders.

 

 

 

IN ORDER TO BE ELECTED TO A FULL TERM ON THE BOARD OF DIRECTORS, DIRECTORS MUST RECEIVE THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES VOTING AT THE ANNUAL MEETING. SEE “WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?” ABOVE.

 

 

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE NOMINEES SET FORTH ABOVE.

 

 

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The following table sets forth information as of March 31, 2025 regarding common stock and other equity securities of the Company beneficially owned by all Directors, executive officers described in the compensation table, and by all Directors, nominees to the Board and executive officers as a group, and by shareholders known to the Company to own at least 5% of the Company’s issued and outstanding shares of common stock. Beneficial ownership includes shares, if any, held in the name of the spouse, minor children or other relatives of the nominee living in such person’s home, as well as shares, if any, held in the name of another person under an arrangement whereby the Director or executive officer can vest title in himself at once or within sixty (60) days. Beneficially owned shares also include shares over which the named person has sole or shared voting or investment power, shares owned by corporations controlled by the named person, and shares owned by a partnership in which the named person is a partner. 

 

 

	Shares of
	Common Stock	Percentage
Directors and Nominees
Frank Sorrentino III	797,267 (1)	2.07	%
Frank Baier	105,101	0.27
Stephen T. Boswell	345,313(2)	0.90
Frank Huttle III	184,608(3)	0.48
Michael Kempner	215,876(4)	0.56
Elizabeth Magennis	114,317	0.30
Nicholas Minoia	65,581(5)	0.17
Anson Moise	10,988	0.03
Katherin Nukk-Freeman	22,429(6)	0.06
Daniel Rifkin	218,496(7)	0.57
Mark Sokolich	104,913	0.27
Susan O’Donell	3,219	0.01
Executive Officers Who Are Not Directors or Nominees
William S. Burns	110,287	0.29
Laura Criscione	95,852(8)	0.25
Michael O'Malley	5,068	0.01
Directors and Executive Officers As a Group (15 persons)	2,399,315	6.24
5% Shareholders
Black Rock	4,685,793(9)	12.18
FMR LLC	3,375,725(10)	8.77
Dimensional Fund Advisers LP	2,270,093(11)	5.90
Vanguard	2,090,142(12)	5.43

 

 

 

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(1)

Includes 46,925 shares held in the name of Morgan Stanley f/b/o Frank Sorrentino III, IRA and 416 shares held by Mr. Sorrentino’s spouse in her IRA Account.

 

(2)

Includes (i) 272,133 held by an irrevocable trust for benefit of Mr. Boswell (of which the reporting person's spouse, adult daughter and unrelated third person are trustees), and to which Mr. Boswell has no economic interest and (ii) 27,977 held by an irrevocable trust for the benefit of Mr. Boswell's spouse (of which an unrelated third person is trustee).

 

(3)

Includes (i) 37,666 shares held in the name of Morgan Stanley f/b/o Frank Huttle III, IRA, (ii) 6,500 shares held as trustee of the Francesca Huttle 2004 Family Trust, (iii) 6,500 shares held as trustee of the Alexandra Huttle 2004 Family Trust, (iv) 78,724 shares held in the name of Mr. Huttle’s spouse, (v) 6,500 shares held by an LLC in which spouse is a member.

 

(4)

Includes 196,005 common shares pledged as collateral for a loan.

 

(5)

Includes 1,056 shares owned jointly an unaffiliated third-party.

 

(6)

Includes (i) 2,500 shares held jointly with spouse and (ii) 2,431 shares held by Ms. Nukk-Freeman's spouse in his IRA Account.

 

(7)

Includes (i) 16,194 shares held in the name of Stifel Nicolaus f/b/o Daniel Rifkin IRA, (ii) 154,994 shares owned jointly with Mr. Rifkin’s wife, and (iii) 16,856 shares held in the name of Stifel Nicolaus f/b/o Sheila Rifkin IRA.

 

(8)

Includes 780 shares held as custodian for Ms. Criscione’s daughter.

 

(9)

All information regarding the number of shares beneficially owned and the percent of ownership by BlackRock, Inc., was obtained from the 13G/A filed with the U.S. Securities and Exchange Commission on November 8, 2024. The address of BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001.

 

(10)

All information regarding the number of shares beneficially owned and the percent of ownership by FMR LLC, was obtained from the 13G filed with the U.S. Securities and Exchange Commission on February 9, 2024. The address of Dimensional Fund Advisors, LP is 245 Summer Street, Boston, Massachusetts 02210.

 

(11)

All information regarding the number of shares beneficially owned and the percent of ownership by Dimensional Fund Advisors, LP, was obtained from the 13G/A filed with the U.S. Securities and Exchange Commission on February 9, 2024. The address of Dimensional Fund Advisors, LP is Building One, 6300 Bee Cave Road, Austin, Texas, 78746.

 

(12)

All information regarding the number of shares beneficially owned and the percent of ownership by Vanguard Group, Inc., was obtained from the 13G filed with the U.S. Securities and Exchange Commission on February 13, 2024. The address of Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355.

 

 

There are no shareholders other than those set forth above who are known to the Company to beneficially own 5% or more of the Common Stock of the Company.

 

The Company considers it inappropriate for any director or officer to enter into speculative transactions in the Company’s securities to attempt to separate the economic risk of holding the Company’s securities from the ownership of the securities. The Company has adopted a Policy Regarding Insider Trading, which is filed as an exhibit to our Annual Report on Form 10-K, that governs the purchase, sale, and other dispositions of the Company securities by directors, officers and employees and that is designed to promote compliance with insider trading laws, rules and regulations and the Nasdaq exchange listing standards. The Company’s insider trading policy therefore prohibits the purchase or sale of puts, calls, options, or other derivative securities based on the Company’s securities. This prohibition also includes hedging or monetization transactions, such as forward sale contracts, in which the stockholder continues to own the underlying security without all the risks or rewards of ownership. In addition, the policy prohibits directors and executive officers from pledging Company securities, either as collateral for a loan or otherwise. However, outstanding pledges as of the time the policy was amended to prohibit pledging November 23, 2021 were grandfathered and may remain in place. The prohibitions also do not apply to a broker-assisted cashless exercise of stock options granted as part of a Company incentive plan.

 

 

14

 

 

The Board of Directors held a total of fifteen (15) meetings in the year ended December 31, 2024. The Company’s policy is that all Directors make every effort to attend each meeting. For the year ended December 31, 2024, each of the Company’s Directors attended at least 75% of the aggregate number of meetings of the Board of Directors and Board committees on which the respective Directors served.

 

A majority of the Board consists of individuals who are “independent” under the NASDAQ listing standards. In making this determination the Board has considered the following:

 

●

The Company and the Bank have used Mr. Kempner’s firm, MWW Group, to provide advertising and public relations assistance and advice. The Board considered, among other factors, the fees paid to MWW Group as a percentage of the firm’s total revenue (less than 1%) and Mr. Kempner’s personal income and determined that the engagement of MWW Group did not interfere with Mr. Kempner’s exercise of independent judgment in carrying out the responsibilities of a director.

 

●

Several directors, including Messrs. Boswell, Huttle, and Kempner, each own a direct or indirect interest in a limited liability company which acts as a landlord for one of the Bank’s branches, See – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The Board has further considered the fact that (i) Director Minoia also owns an interest in an entity which owns the Bank’s Summit branch and (ii) Director Rifkin owns an interest in (x) an entity which owns the Bank’s Bardonia, New York branch, and (y) an entity which owns the Bank’s Blauvelt, New York branch. The Board has concluded that based on interest in the rental payments compared to their overall net worth and cash, membership in such limited liability company does not interfere with their exercise of independent judgment in carrying out the responsibilities of a director.

 

Mr. Sorrentino, who serves as the Chairman and Chief Executive Officer, and Ms. Magennis, who serves as Bank President, are not independent. Shareholders wishing to communicate directly with the independent members of the Board of Directors may send correspondence to:

 

ConnectOne Bancorp, Inc.,

ATTN: Stephen T. Boswell, Lead Independent Director

301 Sylvan Avenue

Englewood Cliffs, New Jersey 07632

 

 

The Company periodically reviews its corporate governance policies and procedures to ensure that the Company meets the highest standards of ethical conduct, reports results with accuracy and transparency, and maintains full compliance with the laws, rules and regulations that govern the Company’s operations. As part of this periodic corporate governance review, the Board of Directors reviews and adopts corporate governance policies and best practices for the Company. The board has formally adopted corporate governance guidelines and they are available at https://ir.connectonebank.com/.

 

The Board of Directors has adopted a Code of Ethics governing our Chief Executive Officer and senior financial and accounting officers, as required by the Sarbanes-Oxley Act and SEC regulations, as well as the Board of Directors and other senior members of management. Our Code of Ethics governs such matters as conflicts of interest, use of corporate opportunity, confidentiality, compliance with law and the like. Our Code of Ethics is available on our website at https://www.connectonebank.com/ under “About”, then “Investor Relations”, then “Documents and Notifications.”

 

 

15

 

 

 

Our Board of Directors frequently conducts business through committees. Our most significant committees are the Audit and Risk Committee, the Nominating and Corporate Governance Committee and the Compensation Committee. The table below sets forth the membership of these committees during 2024:

 

Audit and Risk Committee	Nominating and Corporate  Governance Committee	Compensation Committee
Frank Baier (Chairman)	Frank Huttle III (Chairman)	Stephen T. Boswell (Chairman)
Stephen T. Boswell	Nicholas Minoia	Katherin Nukk-Freeman
Frank Huttle III	Katherin Nukk-Freeman	Susan O’Donnell
Nicholas Minoia	Anson Moise
Daniel Rifkin	Susan O’Donnell

 

 

We maintain an Audit and Risk Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit and Risk Committee is responsible for the selection of the independent registered public accounting firm for the annual audit and to establish, and oversee the adherence to, a system of internal controls. The Audit and Risk Committee reviews and accepts the reports of our independent auditors and regulatory examiners. The Audit and Risk Committee arranges for an annual audit through its registered independent public accounting firm, evaluates and implements the recommendations of the auditors as well as interim audits performed by our outsourced internal auditors, receives all reports of examination by bank regulatory agencies, analyzes such regulatory reports, and reports to the Board the results of its analysis of the regulatory reports. The Audit and Risk Committee met eight (8) times during 2024. The Board of Directors has adopted a written charter for the Audit and Risk Committee which is available on our website at https://www.connectonebank.com. The Board has determined that Frank W. Baier, the Chairman  of the Audit and Risk Committee, qualifies as an “audit committee financial expert” under the Rules and Regulations of the Securities and Exchange Commission.

 

 

All members of the Audit and Risk Committee are “independent” under the NASDAQ listing standards, meet the independence standards of the Sarbanes-Oxley Act for service on an audit committee, and are financially literate and can read and understand financial statements, as required by the Audit and Risk Committee charter.

 

 

16

 

 

The Audit and Risk Committee meets periodically to consider the adequacy of the Company’s financial controls and the objectivity of its financial reporting. The Audit and Risk Committee meets with the Company’s independent auditors and the Company’s internal auditors, and the Company’s Chief Auditor, all of whom have unrestricted access to the Audit and Risk Committee.

 

In connection with this year’s financial statements, the Audit and Risk Committee has reviewed and discussed the Company’s audited financial statements with the Company’s officers and Crowe LLP, our independent auditors. We have discussed with Crowe LLP, the matters required to be discussed by Statement on Auditing Standards No. 61, (“Communication with Audit Committees”). We also have received the written disclosures and letters from Crowe LLP required by Independence Standards Board Standard No. 1 (“Independence Discussions with Audit Committees”) and have discussed with representatives of Crowe LLP their independence.

 

Based on these reviews and discussions, the Audit and Risk Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year 2024 for filing with the U.S. Securities and Exchange Commission.

 

 

The board maintains a Compensation Committee to oversee executive compensation for the Company. During 2024, our Compensation Committee consisted of Stephen T. Boswell, Katherin Nukk-Freeman, and Susan O’Donnell.

 

 

The Board has defined the duties of its Compensation Committee in a charter. A copy of the current Compensation Committee charter is available on the Company’s website at https://www.connectonebank.com/ under “For Shareholders” and then under “Documents and Notifications.”

 

 

The Compensation Committee is responsible for administering the Company’s equity compensation plans, for establishing the compensation of the Company’s “Senior Executive Officers” (which include the Company’s CEO, Bank President, Chief Financial Officer and each employee with a title of Executive Vice President or more senior) and for the Board of Directors. The Compensation Committee also establishes policies and monitors compensation for the Company’s employees in general. While the Compensation Committee may, and does in fact, delegate authority with respect to the compensation of employees in general, the Compensation Committee retains overall supervisory responsibility for employee compensation. With respect to executive compensation, the Compensation Committee receives recommendations and information from senior staff members, as well as outside compensation consultants, regarding issues relevant to determinations made by the Compensation Committee. Mr. Sorrentino participates in Committee deliberations regarding the compensation of other executive officers but does not participate in deliberations regarding his own compensation.

 

 

The Committee is comprised solely of independent directors.

 

 

17

 

 

The Compensation Committee recognizes that it is essential to receive objective advice from an outside compensation consultant. Currently, the Compensation Committee utilizes Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant. Meridian reports directly to the Compensation Committee and attends meetings as requested. The Compensation Committee has assessed Meridian’s independence relative to the NASDAQ listing rules and determined that there are no conflicts of interest. The Compensation Committee also closely examines the safeguards and steps Meridian takes to ensure that its executive compensation consulting services are objective. The Compensation Committee takes into consideration that:

 

●

the Compensation Committee directly hired and has the authority to terminate Meridian’s engagement;

 

●

the Compensation Committee solely determined the terms and conditions of Meridian’s engagement, including the fees charged;

 

●

Meridian and its consultants have direct access to members of the Compensation Committee during and between meetings;

 

●

Meridian does not provide any other services to the Company, the Bank, its directors or executives; and

 

●

interactions between Meridian and its consultants and management generally are limited to discussions on behalf of the Compensation Committee and information presented to the Compensation Committee for approval.

 

 

The board maintains a Nominating and Corporate Governance Committee. During 2024 the member of the Committee were Frank Huttle III, Nicholas Minoia, Anson Moise, Katherine Nukk- Freeman and Susan O’Donnell.

 

 

All members of the Nominating and Corporate Governance Committee of the Board have been determined to be “independent directors” pursuant to the definition contained in NASDAQ Rule 5605.

 

 

The Nominating and Corporate Governance Committee charter describes procedures for nominations to be submitted by shareholders and other third-parties, other than for candidates who have previously served on the Board or who are recommended by the Board. The Company’s bylaws state that a nomination must be delivered to the Company’s Corporate Secretary at the principal executive offices of the Company not later than the close of business on the 50^th day or no earlier than the close of business on the 75^th day prior to the anniversary of the preceding year’s annual meeting; provided, however, that if less than 60 days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10^th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. The public announcement of an adjournment or postponement of an annual meeting will not commence a new time period (or extend any time period) for the giving of a notice as described above. The bylaws require a nomination notice to set forth as to each person whom the proponent proposes to nominate for election as a director: (a) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Schedule 14A under the Securities Exchange Act of 1934, as amended (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director it elected), and (b) information that will enable the Nominating Committee to determine whether the candidate or candidates satisfy the criteria established pursuant to the charter for director candidates.

 

 

18

 

 

In connection with the 2024 annual meeting, the Nominating and Corporate Governance Committee did not receive any nominations from any shareholder or group of shareholders that owned more than 5% of common stock for at least one year.

 

 

There are no compensation committee “interlocks,” which generally means that no executive officer of the Company or the Bank served as a director or member of the compensation committee of another entity, one of whose executive officers serves as a director or member of the Compensation Committee of the Company.

 

 

Frank Sorrentino III, the Company’s President and CEO, also serves as Chairman. The Board believes that the combination of these two roles at this time provides the benefit of more consistent communication and coordination throughout the organization. This, in turn, will result in a more effective and efficient implementation of corporate strategy and is important in unifying the Company’s strategy behind a single vision.

 

Our Board has also appointed Mr. Stephen T. Boswell, an independent director, to serve as Lead Independent Director of the Board. As Lead Independent Director, Mr. Boswell is charged with presiding over all Board meetings when the Chairman is not present and presides over meetings of the non-management directors held in executive session. The Lead Independent Director has the responsibility of meeting and consulting with the Chairman and Chief Executive Officer on Board and committee meeting agendas, acting as a liaison between management and the non-management directors, including maintaining frequent contact with the Chairman and Chief Executive and advising him on the efficiency of the Board meetings, and facilitating teamwork and communication between the non-management directors and management.

 

 

19

 

 

Although the NJBCA provides that elections to the Board of Directors are approved under a plurality voting standard, the Company’s has adopted a “majority voting” standard in uncontested elections in its bylaws. Pursuant thereto, each director has delivered to the Board an irrevocable resignation, which shall become effective in the event that, in an uncontested election, such director receives fewer “for” votes than “against” or “withhold” votes. Such resignation shall become effective upon (i) the selection of a replacement director, or (ii) 90 days after certification of such stockholder vote. The Board believes that this strategy best places ultimate authority of Board composition in the hands of the Company’s shareholders.

 

 

 

Risk is an inherent part of the business of banking. Financial risks faced by the Bank include credit risk relating to its loans liquidity risk and interest rate risk as it pertains to its entire balance sheet. The Bank is also exposed to non-financial risks relating to its operations, personnel, and regulatory environment, as well as extraneous risks surrounding regional and global socioeconomic conditions. The Board of Directors oversees these risks through the adoption of policies and by delegating oversight to certain committees, such as the Audit and Risk Committee, which is charged with the responsibility to oversee and manage the risk profile of the Bank, and through our Chief Risk Officer. This is accomplished through risk assessments, periodic committee meetings, and reporting from risk owners and control functions. Other committees focus on risks arising from specific Company activities, including the Loan and Asset/Liability Committee of the Bank. These committees exercise oversight by establishing a corporate environment that promotes timely and effective disclosure, fiscal accountability and compliance with all applicable laws and regulations.

 

 

Cybersecurity risk is initially overseen at ConnectOne by the management IT Committee (the “ITC”). The members of this committee include, as co-chairs, the Chief Compliance Officer and the Chief Technology Officer. Additional members are our Information Security Officer, IT Manager, Chief Risk Officer, Chairman & Chief Executive Officer, Chief Digital Officer and Chief Brand and Innovation Officer.

 

In order to ensure that cybersecurity risk management is integrated into the Company’s overall risk management plans, systems and processes, members of the ITC, along with other lines of business heads, report to the management Enterprise Risk Management Committee (the “ERMC”), which in turn reports to the Board Audit and Risk Committee quarterly. The ERMC consists of the Company’s Chief Risk Officer, Chairman & CEO, President, Chief Financial Officer, Treasurer, Chief Compliance Officer, Chief Technology Officer, and Chief Credit Officer. In addition, the Company’s Chief Technology Officer attends Company Board of Directors meetings and provides an IT report monthly.

 

The Company’s cybersecurity risk mitigation program involves a combination of internal resources and the use of third parties. The Company’s internal IT team performs monthly vulnerability scanning and performs an annual risk assessment based on the National Institute of Standards and Technology Cybersecurity Framework. The results are reported to the ITC. The Company’s IT and compliance staff also review potential cybersecurity threats associated with the Company’s third-party vendors, including performing a review of and obtaining a System of Organization Controls report from all vendors rated as “high risk” by the Company’s internal vendor management program. The Company also has an internal Incident Response Plan and Team, which is charged with overseeing the Company’s response to any cybersecurity incident. The team performs a table-top exercise at least annually to prepare to respond in the event of any actual cybersecurity incident.

 

 

20

 

In addition to these internal resources, the Company uses a third-party vendor to undertake annual penetration and vulnerability testing, with the results reported to the ITC. Finally, the Company’s cybersecurity compliance program is audited by the Bank’s outsourced internal auditor annually.

 

 

The Company believes it is both socially important, and good business, to conduct its business in a manner that provides a return to its shareholders and contributes to the well-being of its customers, employees, and the communities it serves.

 

As part of its commitment to being a good corporate citizen, the Board has charged the Nominating and Corporate Governance Committee to oversee the Company’s stewardship and sustainability planning and initiatives. In assigning oversight of these matters to the Nominating and Corporate Governance Committee, the Board sought to ensure that the Board would have direct involvement and supervision of these matters.

 

Set forth below are some representative examples of the Company’s stewardship, citizenship and sustainability efforts so far:

 

 

●

We encourage employee volunteerism to support causes throughout the Bank’s footprint. In 2024, Bank employees donated nearly 1,250 hours in volunteer work both through individual and Bank-organized activities.

 

●

We encourage and support financial literacy programs, providing resources to approximately 55 free/reduced lunch schools within our markets. In addition, from 2021 to through 2024, the Bank sponsored financial literacy programs for 5.830 students within New Jersey (Bergen, Chesterfield, Hudson, Monmouth, Morris, Union), New York (New York, Orange, Suffolk, Westchester) and Florida (Palm Beach).

 

●

We actively contribute to charitable causes in the communities we serve. During 2024 we contributed approximately $745,000 to 263 different charitable organizations and schools.

 

●

We maintain clear policies prohibiting discrimination in lending based on gender, race or national origin. Our antidiscrimination policies can be found on our website at https://ir.connectonebank.com/.

 

●

To provide greater access to our services, we provide digital, mobile and online banking services and continue to make investments in these areas to further enhance these services.

 

●

Our Federal regulators have assigned us a Community Reinvestment Act rating of Satisfactory.

 

 

21

 

 

The Company believes that creating a positive work environment for its employees is critical to our success and our ability to serve our clients and generate a return for our shareholders. We encourage and support the growth and development of our employees and, wherever possible, seek to fill positions by promotion and transfer from within the organization. We have formalized our commitment to training, education and mentoring through our ConnectOne University program.

 

ConnectOne University houses our training, leadership development, continuing education and mentorship programs. Through ConnectOne University, employees:

 

●

Receive and complete required job training related to their position with the Company, such as compliance training and position specific training. Classes include an ABA approved curriculum as well as other third party and Company proprietary courses;

 

●

May take classes to attain job specific certifications to help with career development;

 

●

May take continuing education classes related to other positions and operations at the Company;

 

●

May take business related continuing education classes at partner community colleges and other institutions through a New Jersey State grant program;

 

●

May participate in career mentoring programs in which employees meet with senior officers of the Company to discuss career development; and

 

●

May participate in a tuition reimbursement program under which the Company will reimburse employees for up to $5,250 in tuition expense related to approved business-related course work at any school.

 

During 2024, 125 employees participated in our leadership and mentoring programs within ConnectOne University.

 

Through ConnectOne University, we also sponsor two employees each year to attend the Stonier Graduate School of Banking. This is a competitive process requiring an employee to be nominated by the employee’s manager and then participate in a panel interview.

 

●

We offer our employees a full benefits program, including health insurance, flexible spending accounts, a 401(k) plan with the Company matching employee contributions up to 5.0% of the employee’s compensation or $17,250, whichever is lower, and an employee discount program under which our employees get discounts at various retailers and service providers.

 

●

We request employee feedback and concerns through our annual Employment Engagement Survey. The results of this survey are presented to our senior management group for the identification of action items to be implemented. During 2024, approximately 94% of our employees participated in the Engagement Survey.

 

 

22

 

 

 

●

As discussed above, our Nominating and Corporate Governance Committee of our Board of Directors has been appointed to oversee the Company’s sustainability initiatives.

 

●

We maintain, through an independent third party, a whistleblower hotline that is available seven days a week, 24 hours a day, and that permits employees to anonymously report concerns and we have policies prohibiting retaliation against any employee raising a good faith concern.

 

●

We maintain a detailed code of ethics, which includes provisions on conflicts of interest, and which is available on our website at https://ir.connectonebank.com, as well as detailed policies prohibiting money laundering, bribery and other corrupt practices.

 

●

Our Board takes an active role in our cybersecurity risk program, and we maintain a cybersecurity training program for our employees and members of our Board – See “Risk Oversight”.

 

 

23

 

 

The Compensation Committee (the “Committee”) and the Company are both committed to a pay-for-performance philosophy. This Compensation Discussion & Analysis (“CD&A”) provides information about the strategies and policies developed to ensure that executive compensation is strongly correlated with the Company’s overall performance and the individual performance of our executives. Our Named Executive Officers (“NEOs”) for 2024 were:

 

Frank Sorrentino III; Chairman, President & Chief Executive Officer

William S. Burns: Senior Executive Vice President & Chief Financial Officer

Elizabeth Magennis: ConnectOne Bank President

Laura Criscione: Executive Vice President and Chief Compliance Officer

Michael O’Malley: Executive Vice President and Chief Risk Officer

 

 

 

 

2024 Financial Highlights

 

Fiscal year 2024 was a volatile year for the banking industry, as the Federal Reserve’s “higher for longer” stance on interest rates and concerns about the value of commercial office properties pressured net interest margins and credit quality industry-wide. Meanwhile, the year ended with some optimism for a better regulatory environment, particularly with regard to mergers, and stronger capital for 2025. The Company ended 2024 well-positioned, posting a 20.5% quarter-over-quarter and a 6.2% year-over-year increase in quarterly net income available to common stockholders, reflecting significant quarterly net interest margin expansion of 19 basis points for the quarter-over-quarter comparison and 15 basis points for the year-over-year comparison, resulting in part from growth in core deposits of more than 5%. In addition, in September of 2024, the Company announced its proposed merger with The First of Long Island Corporation, a strategic and financially compelling transaction, which is expected to close in the second quarter of 2025.

 

In addition, we strengthened our balance sheet over the course of 2024, in the following ways:

 

●

Tangible book value per share increased by 3.4%

 

●

The loan-to-deposit ratio improved to 105.8% from 110.7%

 

●

All of our regulatory-based capital ratios increased, including our leverage ratio which improved by 47 basis points to 11.33%

 

●

The CRE concentration ratio declined by 27 percentage points to 436%

 

 

24

 

2024 Compensation Decisions in Support of our Pay for Performance Philosophy

 

Our executive compensation program, practices and pay decisions are designed to be directly aligned with shareholders through rigorous stock ownership guidelines and equity based long-term incentives. As a result of their ownership, our executive team is better rewarded when our stockholders see greater returns, and rewarded less when returns are not strong.

 

Our Compensation Approach

 

Our long-range mission is to produce value for our shareholders by providing outstanding service and responsiveness to the markets and clients we serve. These goals are reflected in the Company’s compensation programs for its executive officers by:

 

●

Paying for performance through the use of a quantitative cash short-term incentive program and an equity-based long-term incentive program with 55% of awards to our CEO, Bank President, and CFO (and 50% of the awards to our other NEO’s) being performance-based, and therefore directly aligned with shareholder value creation;

 

●

Ensuring that our key NEOs maintain and hold a significant equity interest in the Company, thereby further aligning management interests with those of the shareholders, by making a significant portion of incentive compensation payable in Company stock and through robust stock ownership guidelines;

 

●

Creating balanced incentives that do not encourage NEOs to expose the Company to inappropriate risks by providing excessive compensation that could lead to material loss;

 

●

Providing a market-competitive overall compensation package so that the Company may attract, retain and reward highly qualified, motivated and productive executives; and

 

●

Rewarding individuals based on their responsibility and achievements within a framework that is internally equitable.

 

Performance-Based Compensation

 

A significant portion of our compensation program focuses on performance-based pay that rewards our achievements on an annual basis as well as our ability to deliver long-term value to our stockholders. We have a balanced approach to total compensation that includes a mix of base/fixed pay and variable/performance-based pay, a proportion of cash and equity and a proportion of short- and long-term incentive compensation. For the fiscal year 2024, our compensation targets and pay mix (targeting market median) are show below and represent our goal to provide:

 

●

A significant portion of target pay that is at-risk and based on performance (69% for CEO and 51% for other NEOs); and

●

A meaningful portion of pay that is denominated as equity (39% for CEO and 26% for other NEOs).

 

For 2024, 55% of our equity share grants for our CEO, Bank President, and CFO will vest only if predetermined 3-year performance goals are achieved. For other NEOs and EVPs, the mix is 50% performance and 50% time vested.

 

CEO Target Pay Mix	Other NEOs Target Pay Mix (1)

(1)

Weighted average of the named executive officers other than the CEO.

 

 

25

 

 

The design principles of our executive compensation programs are intended to protect and promote the interests of our stockholders which include rewarding performance and mitigating risk. Below we summarize key features of our executive compensation program:

 

What We Do:

 

Pay for Performance. We provide a significant portion of pay based on performance (short- and long-term incentives, and performance-based equity).

 

Sound Risk Management. We discourage excessive risk taking and have designed our incentive plans with appropriate risk-mitigating features, as well as the ability of the Committee to negatively adjust payouts.

 

Caps on Incentives. We subject both short- and long-term incentive payments to caps.

 

Clawback. We have adopted a clawback policy meeting all NASDAQ requirements requiring the return of incentive compensation in the event of a financial restatement.

 

Stock Ownership Guidelines. We require our executives and directors to own and hold significant shares in our Company.

 

Double-Trigger Change-in-Control (“CIC”). CIC benefits pursuant to employment or change-in-control agreements are only paid upon a termination event following a CIC.

 

Independence. The Committee engages an independent compensation consultant.

 

Competitive Benchmarking. The Committee engages an independent consultant to benchmark our compensation practices regularly to ensure executive compensation is consistent with market and best practices.

 

Vesting Requirements. Awards of deferred stock units and performance shares are made subject to vesting requirements, generally three years, to encourage retention of our high performing employees.

 

What We Don’t Do:

 

Tax Gross-Ups. We do not provide excise tax gross-ups on benefits or in change-in-control agreements.

 

Stock Option Repricing. Our equity plans do not permit repricing of stock options that are out-of-the-money.

 

Excessive Perquisites. We do not provide excessive perquisites for our executives and only have limited benefits that are business-related.

 

Dividends on Unvested Stock Awards. We do not pay dividends or dividend equivalents on unearned performance units or deferred stock units.

 

Hedging/Pledging. Our insider trading policy prohibits the purchase or sale of puts, calls, options, or other derivative securities based on the Company’s securities. This prohibition also includes hedging or monetization transactions, such as forward sale contracts, in which the stockholder continues to own the underlying security without all the risks or rewards of ownership. The policy also prohibits our directors and executive officers from pledging Company stock as collateral for a loan or otherwise (although pledges in effect on the date the policy was amended, November 23, 2021, to prohibit pledging were grandfathered and allowed to remain in place).

 

Say on Pay/Say on Frequency

 

The Company solicited a shareholder advisory vote on executive compensation in 2024, which received approval of 95.2% of the shares voted. Our shareholders have annually provided an advisory vote on executive compensation, which our Compensation Committee reviews and considers each year. In addition, in 2024, our shareholders approved a non-binding resolution providing that the Company should hold advisory votes on the compensation of the Company’s named executed officers annually. The Company has historically and does hold such votes annually. While the say on pay vote is a formal means of soliciting shareholder feedback, the Company welcomes the opportunity to engage directly with shareholders at any time.

 

 

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We use our executive compensation programs to align the interests of executive officers with our shareholders. Our programs are designed to attract, retain and motivate leadership to support our growth and sustain our competitive advantage. Our compensation opportunities are aligned with the competitive market with actual pay that is designed to vary, dependent on performance. We utilize a balance of fixed and variable pay components, cash and equity, and short- and long-term performance horizons to determine our pay. Our compensation program is designed to support our business strategies, align our pay with our performance and reinforce sound compensation governance to mitigate excessive risk taking. The Compensation Committee reviews compensation levels each year based on market benchmarking with the goal of retaining a competitive position with the market as the Company continues to grow. The Committee considers the benchmark data provided by its consultant as well as each executive’s performance, experience and any unique contributions as appropriate. The below gives an overview of the compensation components used in our program and matches each with one or more of the objectives described above.

 

Base Salary

 

●

Provides a competitive level of fixed income based on role, experience and individual performance.

 

Annual Incentive Plan

 

●

Motivates and rewards executives for performance on key financial, operational and individual objectives in support of our annual business plan and broader corporate strategies.

 

●

Rewards vary based on performance (higher performance will result in above market median pay; lower performance will result in below market median pay).

 

Long-Term Incentive Plan

 

●

Aligns executives’ interests with those of shareholders through equity-based compensation and performance-contingent awards.

 

●

Rewards executives for long-term shareholder value creation.

 

●

Encourages retention through multiple year vesting.

 

●

Motivates and rewards executives for performance – vesting and value is tied to achievement of specific performance and/or stock price appreciation.

 

Other Benefits

 

●

Provides a base level of competitive benefits for executive talent.

 

Employment Agreements/Severance & CIC Agreements

 

●

Provides employment security to key executives.

 

●

Focuses executives on company performance and transactions that are in the best interests of shareholders, regardless of the impact such transactions may have on the executive’s employment.

 

 

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Base Salary

 

The Compensation Committee reviews salaries each year based on the market benchmarking with the goal of retaining a competitive position with the market as the Company continues to grow. The Committee considers the benchmark data provided by its consultant as well as each executive’s performance, experience and any unique contributions as appropriate. The table below summarizes 2024 salaries and the increase year over year:

 

Executive	2023 Base Salary		2024 Base Salary		% Increase
Frank Sorrentino III	$	945,000	$	972,000		2.8	%
William S. Burns		488,000		502,000		2.8
Elizabeth Magennis		525,000		540,000		2.8
Laura Criscione		341,000		365,000		6.6
Michael O’Malley		375,000		378,000		0.8

 

In early 2025, based on updated benchmarking information provided by the Committee’s consultant, the Compensation Committee approved the following base salaries for 2025 and the increase year over year:

 

Executive	2025 Base Salary		% Increase From 2024
Frank Sorrentino III	$	992,000		2.1	%
William S. Burns		517,000		3.0
Elizabeth Magennis		585,000		8.3
Laura Criscione		380,000		4.1
Michael O’Malley		385,000		1.9

 

 

The Compensation Committee periodically conducts comprehensive benchmark reviews. The peer group approved by the Committee in October 2022 and resulting benchmark data continued to be used to assess and set 2024 compensation levels. Peer banks consisted of publicly traded Mid-Atlantic, Connecticut, Massachusetts, and Rhode Island bank holding companies with a total asset range of $5.1 billion to $20.4 billion, with a median that approximated the Company’s assets at the time of selection. Below is a list of the 2024 peer group companies.

 

2024 Peer Group
Brookline Bancorp, Inc.	Independent Bank Corp.
Cambridge Bancorp	OceanFirst Financial Services, Inc.
Columbia Financial, Inc.	Peapack-Gladstone Financial Corporation
Community Bank System, Inc.	Provident Financial Services, Inc.
Customers Bancorp	Sandy Spring Bancorp, Inc.
Dime Community Bancshares, Inc.	The Bancorp, Inc.
Eagle Bancorp, Inc.	Washington Trust Bancorp, Inc.
First Commonwealth Financial Corporation	WSFS Financial Corporation
Flushing Financial Corporation

 

 

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Annual Incentive

 

An important element of our performance-based pay program is our Executive Annual Incentive Plan, which provides cash incentives based on attaining pre-established goals. Each participant has a target incentive opportunity expressed as a percentage of base salary, although actual payouts can range from a 50% payout at threshold performance to 150% of target for stretch performance, with no payout for performance below threshold. The 2024 incentive targets are summarized below and were consistent with 2023 targets:

 

Executive	Target Incentive
Frank Sorrentino, III	95%
William S. Burns	65
Elizabeth Magennis	65
Laura Criscione	35
Michael O’Malley	35

 

The Compensation Committee establishes performance measures on an annual basis that are tied specifically to the Company’s financial performance (return on average assets, operating efficiency ratio, tangible book value, pre-provision net revenue (“PPNR”)) and strategic performance with a modifier for individual executive performance, as appropriate. These metrics were selected by the Compensation Committee to reflect our goal to reward profitability, strategic priorities and shareholder value. Target goals were carefully defined to reflect solid performance reflective to our annual budget, with stretch performance indicating superior performance. Performance targets reflect the continued difficult economic environment the Company faced, largely reflecting persistent inflation which resulted in an even higher cost of deposits and other short-term funding, and narrower net interest margins. 

 

At the end of the year, the Compensation Committee determined a payout percentage based on the Company’s four quantitative financial measures as well as an assessment of strategic performance which resulted in an overall near-target payout of 100.85%, calculated as follows:

 

										2024 Performance Results
Performance Metric		Threshold (0.5)			Target (1.0)			Stretch (1.5)		Actual					Weight			Interpolated Factor			Payout
Core Return on Assets		0.60%			0.80%			1.00%		Just Below Target		0.79%			18.75%			0.9499			17.81%
Efficiency Ratio		60.0%			55.0%			50.0%		Just Below Target		55.6%			18.75%			0.9403			17.63%
Tangible Book Value per Share		$23.25			$24.00			$24.75		Just Below Target		$23.91			18.75%			0.9467			17.75%
PPNR		1.00%			1.20%			1.40%		Just Below Target		1.15%			18.75%			0.8752			16.41%
Strategic Performance		See analysis below								Between Target and Stretch		1.25			25.00%			1.25			31.25%
Totals															100.00%						100.85%

 

Strategic Performance

 

In determining performance on the strategic portion of the annual incentive, the Committee defined and evaluated several broad categories of performance tied to the Company’s priorities and included:

 

●

Creating a client first culture and focus, making our motto, “a better place to be”, a realty for our clients;

 

●

Leadership and integration of the expanding executive team, while recruiting additional talent;

 

 

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●

Overall franchise value creation;

 

●

Development, oversight and implementation of technology initiatives;

 

●

Driving financial performance through selected growth, sound risk-adjusted product pricing, solid credit quality, efficiency and capital allocation

 

●

Managing and enhancing relationships with all market participants, including investors and analysts;

 

●

Ensuring continued strong liquidity; and

 

●

Enhancing effective enterprise-wide risk controls reflecting the Company’s continued growth.

 

At the end of the year, the Committee considered the collective achievements of the executive team during 2024 relative to these performance factors. The Committee also considered the value-enhancing proposed merger with The First of Long Island Corporation, for which the management team undertook extensive diligence and negotiation during the second and third quarters of 2024 resulting in the signing of a definitive agreement and public announcement in September 2024, and further significant work to prepare and file all required regulatory applications during the fourth quarter of 2024. The Committee recognized that the transaction was a significant accomplishment of the executive team, although it did result in performance slightly below target performance due to management focusing on the merger and the integration of the two companies. After considering the factors listed above, the Committee approved payouts of 125% of target for the strategic performance component.

 

The Committee evaluated individual NEO performance and decided not to utilize the individual modifier in determining the final annual incentive payout for 2024. However, given the collective achievements of the team discussed above, the Committee granted increased LTI awards in 2025 to slightly above each NEOs target awards. The use of equity creates additional retention and performance alignment and directly aligns the NEOs with shareholders.

 

The table below illustrates the target award and actual incentive award paid to the named executive officers:

 

Executive	2024 Target Annual Incentive Award			2024 Actual Annual Incentive Award
Frank Sorrentino, III	$	923,400		$	931,249
William S. Burns		326,300			329,074
Elizabeth Magennis		351,000			353,984
Laura Criscione		127,750			128,836
Michael O’Malley		132,300			133,425

 

Long-Term Incentives – Equity-Based Awards

 

The Company’s long-term incentive plan (“LTIP”) is designed to be performance-based, align executives with shareholder interest and promote the long-term success of the Company. In March 2024, the Committee approved a target long-term incentive award (split between performance shares (55%) and time vested deferred stock (45%) for Messrs. Sorrentino and Burns and Ms. Magennis and split equally between performance shares and time vested deferred stock for Ms. Criscione and Mr. O’Malley).

 

Time-vested deferred stock units (“DSU”). Grants have a target opportunity, but the Committee can adjust the grant based on consideration of performance factors including the business environment, affordability, and corporate and individual performance. The actual grant may vary from 0% – 150% of target for this component, based on the Committee’s assessment. Once granted, deferred stock vests ratably over a three-year period, and is subject to forfeiture if the grantee leaves service prior to the vesting date.

 

Performance-based restricted shares (“Performance shares”). Performance shares are granted at target and earned (i.e. vest) based on our future three-year performance for the period January 1, 2024 through December 31, 2026. The potential number of shares that can vest following the three-year performance period will range from 0% to 150% of the target levels depending on our Core Return on Average Assets (Core ROA) performance relative to an industry index and can be modified based on relative Total Shareholder Return (TSR) positioning.

 

Core ROA was selected by the Compensation Committee to be an effective indicator of the profitability of the Company. Strong Core ROA, over time, particularly relative to industry competitors, enhances the Company’s performance and aligns with shareholder value. As used herein, “Core ROA” is defined by S&P Capital IQ as net income, excluding the after-tax effect of realized gains/losses on securities, nonrecurring items and amortization of intangibles and goodwill divided by average assets.

 

 

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In addition, grants are also subject to a relative Total Shareholder Return (“TSR”) modifier to determine the final vesting of performance share awards. After determining the performance achievement on Core ROAA relative to the Performance Index, the payout will be modified based on relative total shareholder return positioning versus the same Performance Index. This modifier can increase or decrease the award by 25% (e.g., 1.25 or 0.75 multiplier) for superior performance (i.e. 75^th percentile or higher) or lower relative performance (i.e. 30^th percentile or lower). For performance outcomes between threshold and target, the modifier will be calculated on a straight-line basis.

 

The Industry Index allows for relative comparison of the Company’s performance to the performance of other banks of similar size/region during the same three-year performance period. The Industry Index companies is objectively determined at the start of the performance period and consists of banks in the Mid-Atlantic and Northeast Region with total assets between $4 billion and $25 billion, traded on the NASDAQ or NYSE exchanges.

 

Performance shares vest after three years based on the Company’s Core ROA performance (and if applicable, the TSR modifier) relative to the Industry Index banks in accordance with the payout scale below:

 

	% of Performance
CNOB Ranking vs.	Units Earned
Industry Index	(2023 - 2025)
75th percentile and above	150%
55th percentile	100
30th percentile	50
Below 30th percentile	0

 

Below is a summary of the 2024 grants:

 

●

Performance shares were issued in March 2024 at target, since vesting is dependent upon actual performance during the three-year period commencing January 1, 2024 and ending December 31, 2026.

 

●

Deferred Stock Units were granted in March 2024 at target based on the Compensation Committee’s consideration of 2023 Company and individual performance.

 

	Performance Units				Deferred Stock Units					Total
Executive	Target # Shares		Grant Value		Target # Shares		Grant Value			Grant Value
Frank Sorrentino III	35,153		$	668,259	28,761		$	546,747		$	1,215,006
William S. Burns	9,441			179,473	7,724			146,833			326,306
Elizabeth Magennis	10,155			193,047	8,309			157,954			351,001
Laura Criscione	3,360			63,874	3,360			63,874			127,748
Michael O’Malley	3,480			66,155	3,480			66,155			132,310

 

By policy, we do not pay dividends or dividend equivalents on performance units or deferred stock units, until such units are vested.

 

2022 – 2024 Performance Share Vesting

 

Performance shares granted in the first quarter of 2022 were designed to vest between 0% to 150% of target based on the Company’s relative core return on assets compared to an objectively determined industry index (i.e., U.S. bank holding companies headquartered in the Northeast and Mid-Atlantic regions with total assets between $2.0 billion and $11.0 billion as of year-end 2018). Based on data reported by S&P Global for the period January 1, 2022 through December 31, 2024, the Company’s actual core return on assets of 1.06% ranked at 69.2% resulting in the vesting of 138.4% of the target performance shares.  

 

Grant Practices and Timing

 

We do not currently grant stock options as part of our equity compensation programs and, therefore, we do not currently have a policy or practice governing the timing of such awards. For grants of other equity awards, such as deferred stock and performance shares, our Compensation Committee and Board, as applicable, generally grants such awards on an annual basis based on a predetermined schedule, with awards typically granted at the beginning of each new fiscal year to incentivize the achievement of our strategic objectives and long-term results. As such, the Compensation Committee does not take material non-public information into account when determining the timing and terms of equity awards, as the timing of grants is in accordance with such predetermined annual schedule. Similarly, we do not time the release of material, non-public information based on equity award grant dates for the purpose of affecting the value of any awards. In addition, equity awards may be granted at other times during the year to new hires, employees receiving promotions, and in other special circumstances.

 

 

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Retirement Benefits and Perquisites

 

One of the goals of the Company’s compensation program is to provide limited retirement benefits to our NEOs as an additional retention tool. The Company therefore entered into Supplemental Executive Retirement Plans with Frank Sorrentino III, William S. Burns, Elizabeth Magennis, and Laura Criscione during 2019 and supplemented those plans for Messrs. Sorrentino and Burns and Ms. Magennis in 2021. The benefits under each plan differ based upon a number of factors, including, among others, the participant’s age, the reason for any separation from service, and whether the participant has met the vesting requirements set forth in the plan at the time of any payment triggering event. In addition, Executives participate in the ConnectOne Bank 401(k) Retirement Plan, which is offered to all Bank employees. As stated in the Executive Compensation Objectives and Policies section, the Bank does not place emphasis on perquisites for NEOs, although a car allowance is provided to this group to offset any and all automobile expenses (mileage, tolls, insurance, gas) incurred as part of their job duties.

 

Employment Agreements

 

The Company is party to employment agreements and change in control agreements with several executives. The following is a summary of those agreements with its NEOs:

 

Mr. Sorrentino’s Employment Agreement

 

The employment agreement with Mr. Sorrentino has an initial three-year term, and will automatically renew for one additional year unless any party provides written notice of its intention not to renew. Under the agreement, Mr. Sorrentino will receive an annual base salary of at least $735,000, subject to an increase as determined by the Board. He will also be eligible to participate in the Company’s incentive plans and other benefit plans for executive officers. Under the agreement, the Company or Bank will reimburse Mr. Sorrentino for his reasonable business expenses, and provide him with a $1,250 monthly car allowance. In the event that Mr. Sorrentino’s employment is terminated without “cause” or he resigns for “good cause”, as such terms are defined in the employment agreement, he is entitled to receive a lump sum cash payment equal to two and a half (2.5) times the sum of his current base salary and target cash bonus; (ii) a prorated bonus for the year of termination and (iii) continued health and welfare benefits for up to 18 months. If such a termination occurs within two years following a change in control (as defined in the employment agreement), Mr. Sorrentino will receive: (i) a lump sum cash payment equal to three (3) times the sum of Mr. Sorrentino’s current base salary and target cash bonus; (ii) a prorated bonus for the year of termination based on actual performance and will be paid at the time annual bonuses for such year are ordinarily paid, and (iii) continued health and welfare benefits for up to 18 months. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended.

 

Mr. Burns’ Employment Agreement

 

The employment agreement with Mr. Burns has an initial three-year term and will automatically renew for one additional year unless any party provides written notice of its intention not to renew. Under the agreement, Mr. Burns will receive an annual base salary of at least $381,000, subject to an increase as determined by the Board. He will also be eligible to participate in the Company’s incentive plans and other benefit plans for executive officers. Under the agreement, the Company or Bank will reimburse Mr. Burns for his reasonable business expenses and provide him with a $750 monthly car allowance. In the event that Mr. Burns’ employment is terminated without “cause” or he resigns for “good cause”, as such terms are defined in the employment agreement, he is entitled to receive a lump sum cash payment equal to two and a half (2.5) times the sum of his current base salary and target cash bonus; (ii) a prorated bonus for the year of termination and (iii) continued health and welfare benefits for up to 18 months. If such a termination occurs within two years following a change in control (as defined in the employment agreement), Mr. Burns will receive: (i) a lump sum cash payment equal to three (3) times the sum of Mr. Burns’ current base salary and target cash bonus; (ii) a prorated bonus for the year of termination, based on actual performance and will be paid at the time annual bonuses for such year are ordinarily paid and (iii) continued health and welfare benefits for up to 18 months. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended.

 

 

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Ms. Magennis’ Employment Agreement

 

The employment agreement with Ms. Magennis has an initial three-year term and will automatically renew for one additional year unless any party provides written notice of its intention not to renew. Under the agreement, Ms. Magennis will receive an annual base salary of at least $525,000, subject to an increase as determined by the Board. She will also be eligible to participate in the Company’s incentive plans and other benefit plans for executive officers. Under the agreement, the Company or Bank will reimburse Ms. Magennis for her reasonable business expenses and provide her with a $750 monthly car allowance. In the event that Ms. Magennis’ employment is terminated without “cause” or she resigns for “good cause”, as such terms are defined in the employment agreement, she is entitled to receive a lump sum cash payment equal to two and a half (2.5) times the sum of her current base salary and target cash bonus; (ii) a prorated bonus for the year of termination and (iii) continued health and welfare benefits for up to 18 months. If such a termination occurs within two years following a change in control (as defined in the employment agreement), Ms. Magennis will receive: (i) a lump sum cash payment equal to three (3) times the sum of Ms. Magennis’ current base salary and target cash bonus; (ii) a prorated bonus for the year of termination, based on actual performance, which will be paid at the time annual bonuses for such year are ordinarily paid and (iii) continued health and welfare benefits for up to 18 months. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended.

 

Ms. Criscione’s Change in Control Agreement

 

The Company is subject to a Change in Control Agreement with Ms. Criscione. Under the terms thereof, if the Company were to undergo a “change in control” as defined in the Change in Control Agreement, followed by either (i) involuntary termination of Ms. Criscione’s employment by the Company or the Bank or (ii) voluntary termination of employment by Ms. Criscione under certain circumstances provided for in the agreement, then Ms. Criscione would be entitled a payment equal to (i) the highest annual salary assigned Ms. Criscione by the Bank’s Board or a duly assigned committee thereof during the twenty four months prior to the consummation of the Change in Control plus (ii) the highest annual bonus paid to or accrued for Ms. Criscione over the twenty four months prior to the consummation of the Change in Control. Such amount shall be paid within 10 days, subject to compliance with section 409A of the Internal Revenue Code, after the Company or the Bank receives an executed a general release of claims in favor of the Company, the Bank, its subsidiaries and affiliates and related parties.

 

Mr. O’Malley’s Employment Agreement

The employment agreement with Mr. O’Malley has an initial three-year term and will automatically renew for one additional year unless any party provides written notice of its intention not to renew. Under the agreement, Mr. O’Malley will receive an annual base salary of at least $325,000, subject to an increase as determined by the Board. He will also be eligible to participate in the Company’s incentive plans and other benefit plans for executive officers. Under the agreement, the Company or Bank will reimburse Mr. O’Malley for his reasonable business expenses and provide him with a $750 monthly car allowance. In the event that Mr. O’Malley’s employment is terminated without “cause” or he resigns for “good cause”, as such terms are defined in the employment agreement, he is entitled to receive a lump sum cash payment equal to the sum of his current base salary and target cash bonus multiplied by 0.75; (ii) a prorated bonus for the year of termination and (iii) continued health and welfare benefits for up to 12 months. If such a termination occurs within two years following a change in control (as defined in the employment agreement), Mr. O’Malley will receive: (i) a lump sum cash payment equal to the sum of Mr. O’Malley’s current base salary and target cash bonus; (ii) a prorated bonus for the year of termination, based on actual performance, which will be paid at the time annual bonuses for such year are ordinarily paid and (iii) continued health and welfare benefits for up to 12 months. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended.

 

 

 

The Compensation Committee of the Board of Directors is responsible for discharging the Board’s duties in executive compensation matters and for administering the Company’s incentive and equity-based plans. This includes oversight of the total compensation programs for the Company’s CEO and other executive officers, including all Named Executive Officers. The Committee is comprised solely of independent directors. The Committee receives input and data from Finance and Human Resources functions as well as outside consultants and advisors to provide external reference and perspective.

 

 

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The Committee reviews all compensation components for the Company’s Chief Executive Officer and other executive officers, including base salary, annual incentive, long-term incentives/equity and other benefits and perquisites. The Committee reviews the Chief Executive Officer’s performance annually and makes decisions regarding the Named Executive Officers’ compensation, including base salary, incentives and equity grants based on this review. The Compensation Committee reviews its decisions with the full Board of Directors.

 

The Committee has the sole authority and resources to obtain advice and assistance from internal or external legal, human resources, accounting or other advisors, or consultants as it deems desirable or appropriate. The Committee has direct access to outside advisors and consultants throughout the year as they relate to executive compensation. The Committee has direct access to and meets periodically with the compensation consultant independently of management.

 

 

The Compensation Committee retains Meridian Compensation Partners LLC (“Meridian”) as its compensation consultant. Meridian reports directly to the Committee and performs no other work for the Company. The Consultant carries out its responsibilities to the Committee as requested by the Committee. The Committee has reviewed and concluded that Meridian’s consultation services comply with the standards adopted by the SEC and by NASDAQ with respect to compensation advisor independence and conflicts of interest.

 

 

Although the Committee makes independent determinations on all matters related to compensation of the Named Executive Officers, certain members of management may be requested to attend or provide input to the Committee. Input may be sought from the Chief Executive Officer, Chief Financial Officer, or others to ensure the Committee has the information and perspective it needs to carry out its duties.

 

In particular, the Committee seeks input from the Chief Executive Officer on matters relating to strategic objectives, Company performance goals and input on his assessment of the Named Executive Officers, including contribution and individual performance of each of his direct reports. The Chief Executive Officer and the Chief Financial Officer often assist the Committee on matters of design, administration and operation of the Company’s compensation programs.

 

Although executives may provide insight, suggestions or recommendations regarding executive compensation, they are not present during the Compensation Committee’s deliberations or vote. Only Compensation Committee members vote on decisions regarding executive compensation. The Committee regularly meets in executive session without management present. While the Chief Executive Officer makes recommendations on other Named Executive Officers, the Committee is ultimately responsible for approving compensation for all Named Executive Officers. The Chief Executive Officer’s compensation is discussed in executive session without members of management, including the Chief Executive Officer, present.

 

 

As a matter of sound governance, we follow certain practices with respect to our compensation program. We regularly review and evaluate our compensation practices in light of regulatory developments, market standards and other considerations.

 

 

Our insider trading policy prohibits the purchase or sale of puts, calls, options, or other derivative securities based on the Company’s securities. This prohibition also includes hedging or monetization transactions, such as forward sale contracts, in which the stockholder continues to own the underlying security without all the risks or rewards of ownership. The policy also prohibits directors and executive officers from pledging the Company’s securities as collateral for a loan or otherwise (although pledges outstanding as of the date the policy was amended to prohibit pledging (November 23, 2021) are allowed to remain in effect).

 

 

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The Company has a Compensation Recoupment Policy requiring the return of incentive compensation in the event of a financial restatement. Specifically, if the Company restates its financial statements, then, to the fullest extent permitted by law, the Company shall require each current or former executive officer, to reimburse such compensation that would have been in excess of that which would have been paid based to him or her upon the financial statements as so restated. A copy of our Compensation Recoupment policy is available on our website at https://ir.connectonebank.com/.

 

 

The Compensation Committee has a stock ownership policy that requires officers with the title Executive Vice President and above, together with members of the Board, to own a significant amount of the Company’s stock. Specific guidelines are:

 

●

Six (6) times the then annual base salary for the Chief Executive Officer

●

Three (3) times the then annual base salary for the Bank President and the Senior Executive Vice President, Chief Financial Officer

●

Two (2) times the then annual base salary for other Executive Vice Presidents

●

Directors, other than the CEO and Bank President, are expected to achieve ownership equal to five (5) times the sum of (i) the then-current annual cash retainer and (ii) the then-current value of the annual equity award.

 

The period to achieve compliance is five (5) years from the day the individual becomes subject to the policy. The Compensation Committee monitors ownership levels and compliance on an annual basis. Below is a summary of shares that qualify for the ownership requirements described above (unexercised stock options and unvested performance shares are excluded):

 

●

Beneficially owned shares that the individual owns or has voting power over, including the power to vote (including restricted shares), or to direct the voting; and/or, investment power including the power to dispose or to direct the disposition.

 

The Compensation Committee evaluates compliance with our stock ownership policy annually, and has determined that at year end 2024, all of our executive officers were in compliance.

 

 

The Committee reviews the structure and components of our compensation arrangements, the material potential sources of risk in our business lines and compensation arrangements, and various policies and practices of the Company that mitigate this risk. Within this framework, the Committee discusses the parameters of acceptable and excessive risk-taking and the general business goals and concerns of the Company. In particular, the Committee focuses on the risks associated with the design of each plan, the mitigation factors that exist for each plan, additional factors that could be considered and an overall risk assessment with respect to the plans. All of our plans have links to corporate or business line results that allow for funding to be adjusted downward, awards are capped, and our governance procedures ensure awards are reviewed for appropriateness before they are distributed.

 

We have determined our executive and employee incentive compensation plans are not reasonably likely to have a material adverse effect on the Company. Further, it is both the Committee’s and management’s intent to continue to evolve our processes going forward by monitoring regulations and best practices for sound incentive compensation.

 

 

The accounting and tax treatment of compensation generally has not been a factor in determining the amounts of compensation for our executive officers. However, the Compensation Committee and management have considered the accounting and tax impact of various program designs to balance the potential cost to the Company with the benefit to the executive.

 

 

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The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis, or CD&A, contained in this proxy statement with management. Based on the Compensation Committee’s review of and discussion with management with respect to the CD&A, the Compensation Committee has recommended to the Board of Directors of the Company that the CD&A be included in this proxy statement and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for filing with the SEC.

 

The foregoing report is provided by the Compensation Committee of the Board of Directors:

 

Compensation Committee

Stephen T. Boswell (Chairman)

Katherin Nukk-Freeman

Susan O’Donnell

 

 

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The following table sets forth for the prior three years the compensation paid to ^(a) the Company’s Chief Executive Officer and Chief Financial Officer and our three other most highly compensated executive officers earning in excess of $100,000 for the fiscal year ended December 31, 2024 and who were serving as of December 31, 2024, (collectively the “Named Executive Officers”):

 

Name and Principal Position (a)	Year (b)	Salary ($)(c)		Bonus ($)(d)		Stock Awards(1) ($)(e)		Option Awards ($)(f)		Non-equity incentive plan compensation ($)(g)		Change in pension value and non-qualified deferred compensation earnings ($)(h)		All Other Compensation(2)($)(i)		Total ($)(j)
Frank Sorrentino III,	2024	$	968,625	$	-	$	1,215,005	$	-	$	931,249	$	648,624	$	38,025	$	3,801,528
Chairman &	2023		945,000		-		1,476,571		-		878,897		182,004		26,575		3,509,048
Chief Executive Officer	2022		900,000		-		1,237,512		-		1,147,500		685,309		35,794		4,006,115
William S. Burns,	2024	$	500,250	$	-	$	326,307	$	-	$	329,074	$	340,435	$	37,363	$	1,533,428
Senior Executive Vice President	2023		488,000		-		396,504		-		310,539		192,437		31,009		1,418,489
& Chief Financial Officer	2022		465,000		-		348,762		-		418,500		470,779		29,794		1,732,835
Elizabeth Magennis,	2024	$	538,125	$	-	$	351,001	$	-	$	353,984	$	121,788	$	30,013	$	1,394,910
ConnectOne Bank President	2023		525,000		-		426,555		-		334,084		(7,461)		27,420		1,305,598
	2022		500,000		-		375,002		-		450,000		149,540		26,182		1,500,724
Laura Criscione,	2024	$	362,000	$	-	$	127,747	$	-	$	128,836	$	15,482	$	30,013	$	664,078
Executive Vice President &	2023		341,000		-		149,178		-		116,844		(5,559		18,445		619,908
Chief Compliance Officer	2022		325,000		-		142,188		-		170,625		14,101		26,040		677,954
Michael O’Malley	2024	$	376,750	$	-	$	132,310	$	-	$	133,425	$	-	$	18,563	$	661,047
Executive Vice President &	2023		368,000		-		161,011		-		126,095		-		14,588		669,694
Chief Risk Officer	2022		350,000		-		153,110		-		183,750		-		21,760		708,620

      

(1)

Stock awards reported in 2024 reflect the grant date fair value of deferred stock units awards and performance units awards under Accounting Standards Codification Topic No. 718, Compensation-Stock Compensation (“ASC Topic 718”) granted by the Compensation Committee under the Equity Incentive Plan, which permits the Compensation Committee to determine to pay awards, in whole or in part, in the form of grants of stock-based awards under the Long-Term Stock Incentive Plan. Deferred stock units awards are time-based, while the performance units awards are performance-based.

 

(2)	Mr. Sorrentino’s “All Other Compensation” total includes a $15,000 annual car allowance for 2022, 2023 and 2024.

 

 

The value of the time-based deferred stock units awards reported in column (e) for each of our Named Executive Officers’ were as follows:

 

Executive	Value of Deferred Stock Unit Awards Issued in 2024 (a)
Frank Sorrentino III	$	546,747
William S. Burns		146,833
Elizabeth Magennis		157,954
Laura Criscione		63,874
Michael O’Malley		66,155

 

(a)

These values are based on the market value at the time of grant. Restrictions on time-based deferred stock units awards lapse at the rate of one-third each year over a three-year period.

 

 

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Restrictions on performance-based awards lapse based on achievement of the performance goals set forth in the awards agreement based on performance as compared to peer groups. The following tables detail the value of the performance units award at the time they were granted, assuming a probable outcome regarding performance, and the value assuming the maximum achievement of performance goals.

 

Executive	Target Value at Grant Date			Maximum Value at Grant Date
Frank Sorrentino III	$	668,259		$	1,002,389
William S. Burns		179,473			269,210
Elizabeth Magennis		193,047			289,571
Laura Criscione		63,874			95,811
Michael O’Malley		66,155			99,233

 

 

 

The Company and the Bank are parties to employment agreements with Messrs. Frank Sorrentino III, our Chairman, Chief Executive Officer, and President, William S. Burns our Senior Executive Vice President and Chief Financial Officer, Ms. Elizabeth Magennis, our Bank President and Mr. Michael O’Malley, our Chief Risk Officer. In addition, the Company is party to a Change in Control Agreement with Ms. Laura Criscione, our Chief Compliance Officer. Each of these agreements include provisions with respect to post-termination benefits, as described below.

 

In the event that Mr. Sorrentino’s employment is terminated without “cause” or he resigns for “good cause”, as such terms are defined in the employment agreement, he is entitled to receive a lump sum cash payment equal to two and a half (2.5) times the sum of his current base salary and target cash bonus; (ii) a prorated bonus for the year of termination and (iii) continued health and welfare benefits for up to 18 months. If such a termination occurs within two years following a change in control (as defined in the employment agreement), Mr. Sorrentino will receive: (i) a lump sum cash payment equal to three (3) times the sum of Mr. Sorrentino’s current base salary and target cash bonus; (ii) a prorated bonus for the year of termination based on actual performance which will be paid at the time annual bonuses for such year are ordinarily paid, and (iii) continued health and welfare benefits for up to 18 months. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended. The following table summarizes potential payments to Mr. Sorrentino assuming a triggering termination of employment occurred on December 31, 2024, and calculated based on actual performance meeting targeted objectives. The table does not reflect benefits under plans that do not discriminate in favor of executive officers and are available generally to all salaried employees.

 

Payments and Benefits (in dollars)	Involuntary Termination without Cause or Registration for Good Reason			Change in Control		Involuntary Termination without Cause or Resignation for Good Reason following a Change in Control
Cash Compensation	$	4,738,500		$	-	$	5,686,200
Value of Continued Health and Welfare Benefits		30,504			-		30,504
Acceleration of Stock Awards		-			3,146,459		3,146,459
Acceleration of Benefits Pursuant to Supplemental Executive Retirement Plans		-			-		420,011

 

* Pursuant to the Supplemental Executive Retirement Plan and the 2021 Supplemental Executive Retirement Plan, Mr. Sorrentino’s benefit will accelerate upon a change of control if followed by a separation of service within 2 years of the date thereof, irrespective of whether it was a termination “without cause” or a resignation for “good reason.”

 

 

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In the event that Mr. Burns’ employment is terminated without “cause” or he resigns for “good cause”, as such terms are defined in the employment agreement, he is entitled to receive a lump sum cash payment equal to two and a half (2.5) times the sum of his current base salary and target cash bonus; (ii) a prorated target bonus for the year of termination and (iii) continued health and welfare benefits for up to 18 months. If such a termination occurs within two years following a change in control (as defined in the employment agreement), Mr. Burns will receive: (i) a lump sum cash payment equal to three (3) times the sum of Mr. Burns’ current base salary and target cash bonus; (ii) a prorated bonus for the year of termination based on actual performance which will be paid at the time annual bonuses for such year are ordinarily paid and (iii) continued health and welfare benefits for up to 18 months. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended. The following table summarizes potential payments to Mr. Burns assuming a triggering termination of employment occurred on December 31, 2024, and calculated based on actual performance meeting targeted objectives. The table does not reflect benefits under plans that do not discriminate in favor of executive officers and are available generally to all salaried employees.

 

Payments and Benefits (in dollars)	Involuntary Termination without Cause or Registration for Good Reason			Change in Control		Involuntary Termination without Cause or Resignation for Good Reason following a Change in Control
Cash Compensation	$	2,070,750		$	-	$	2,484,900
Value of Continued Health and Welfare Benefits		25,624			-		25,624
Acceleration of Stock Awards		-			863,615		863,615
Acceleration of Benefits Pursuant to Supplemental Executive Retirement Plans		-			-		863,615

 

* Pursuant to the Supplemental Executive Retirement Plan and the 2021 Supplemental Executive Retirement Plan, Mr. Burns’ benefit will accelerate upon a change of control if followed by a separation of service within 2 years of the date thereof, irrespective of whether it was a termination “without cause” or a resignation for “good reason.”

 

In the event that Ms. Magennis’ employment is terminated without “cause” or she resigns for “good cause”, as such terms are defined in the employment agreement, she is entitled to receive a lump sum cash payment equal to one and a half (1.5) times the sum of her current base salary and target cash bonus; (ii) a prorated bonus for the year of termination and (iii) continued health and welfare benefits for up to 18 months. If such a termination occurs within two years following a change in control (as defined in the employment agreement), Ms. Magennis will receive: (i) a lump sum cash payment equal to two (2) times the sum of Ms. Magennis’ current base salary and target cash bonus; (ii) a prorated bonus for the year of termination based on actual performance which will be paid at the time annual bonuses for such year are ordinarily paid and (iii) continued health and welfare benefits for up to 18 months. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended. The following table summarizes potential payments to Ms. Magennis assuming a triggering termination of employment occurred on December 31, 2024, and calculated based on actual performance meeting targeted objectives. The table does not reflect benefits under plans that do not discriminate in favor of executive officers and are available generally to all salaried employees.

 

Payments and Benefits (in dollars)	Involuntary Termination without Cause or Registration for Good Reason			Change in Control		Involuntary Termination without Cause or Resignation for Good Reason following a Change in Control
Cash Compensation	$	2,227,500		$	-	$	2,673,000
Value of Continued Health and Welfare Benefits		15,554			-		15,554
Acceleration of Stock Awards		-			895,048		895,048
Acceleration of Benefits Pursuant to Supplemental Executive Retirement Plans		-			-		450,517

 

*Pursuant to the Supplemental Executive Retirement Plan and the 2021 Supplemental Executive Retirement Plan, Ms. Magennis’ benefit will accelerate upon a change of control if followed by a separation of service within 2 years of the date thereof, irrespective of whether it was a termination “without cause” or a resignation for “good reason.”

 

 

39

 

In the event of a change in control followed by either (i) involuntary termination of Ms. Criscione’s employment by the Company or the Bank or (ii) voluntary termination of employment by Ms. Criscione under certain circumstances provided for in the agreement, then Ms. Criscione would be entitled payment of (i) the highest annual salary during the twenty four months prior to the change in control plus (ii) the highest annual bonus paid to or accrued to her over the twenty four months prior to the change in control. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended. The following table summarizes potential payments to Mr. Criscione, assuming a triggering termination of employment occurred on December 31, 2024. The table does not reflect benefits under plans that do not discriminate in favor of executive officers and are available generally to all salaried employees.

 

Payments and Benefits (in dollars)	Involuntary Termination without Cause or Registration for Good Reason			Change in Control		Involuntary Termination without Cause or Resignation for Good Reason following a Change in Control
Cash Compensation	$	438,750		$	-	$	585,000
Value of Continued Health and Welfare Benefits		41,375			-		41,375
Acceleration of Stock Awards		-			326,307		326,307
Acceleration of Benefits Pursuant to Supplemental Executive Retirement Plans		-			-		190,474

 

In the event that Mr. O’Malley’s employment is terminated without “cause” or he resigns for “good cause”, as such terms are defined in the employment agreement, he is entitled to receive a lump sum cash payment equal to the sum of his current base salary and target cash bonus multiplied by 0.75; (ii) a prorated target bonus for the year of termination and (iii) continued health and welfare benefits for up to 12 months. If such a termination occurs within two years following a change in control (as defined in the employment agreement), Mr. O’Malley will receive: (i) a lump sum cash payment equal to the sum of his current base salary and target cash bonus; (ii) a prorated bonus for the year of termination based on actual performance which will be paid at the time annual bonuses for such year are ordinarily paid and (iii) continued health and welfare benefits for up to 12 months. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended. The following table summarizes potential payments to Mr. O’Malley assuming a triggering termination of employment occurred on December 31, 2024, and calculated based on actual performance meeting targeted objectives. The table does not reflect benefits under plans that do not discriminate in favor of executive officers and are available generally to all salaried employees.

 

Payments and Benefits (in dollars)	Involuntary Termination without Cause or Registration for Good Reason			Change in Control		Involuntary Termination without Cause or Resignation for Good Reason following a Change in Control
Cash Compensation	$	382,725		$	-	$	510,300
Value of Continued Health and Welfare Benefits		41,375			-		41,375
Acceleration of Stock Awards		-			345,414		345,414
Acceleration of Benefits Pursuant to Supplemental Executive Retirement Plans		-			-		-

 

 

40

 

 

Frank Sorrentino III, our Chairman and Chief Executive Officer, had fiscal 2024 total compensation of $3,801,528, as reflected in the Summary Compensation Table above. We estimate that the median annual compensation for all Company employees, excluding Mr. Sorrentino, was $90,500 for 2024 based on a median total cash compensation as of December 31, 2024. As a result, Mr. Sorrentino’s 2024 annual compensation was approximately 42 times that of the median annual compensation for all employees.

 

Pay Versus Performance Table for 2024

 

Year	Summary Compensation Table Total for PEO (1)				Compensation Actually Paid to PEO (2)				Average Summary Compensation Table Total for Non-PEO NEOs(3)				Average Summary Compensation Actually Paid to Non-PEO NEOs(4)				TSR (5)				Peer Group TSR(6)				Net Income (7) (thousands)				Core Return on Average Assets (8)
(a)	(b)				(c)				(d)				(e)				(f)				(g)				(h)				(i)
2024	$	3,801,528			$	3,906,078			$	1,063,366			$	1,080,389			$	128.6			$	153.5			$	73,793				0.78	%
2023		3,509,048				3,189,968				1,048,246				1,001,064				97.9				124.5				87,003				0.93
2022		4,006,115				2,703,464				1,255,457				1,041,643				99.8				113.4				125,211				1.47
2021		3,068,986				5,282,254				1,046,208				1,597,023				131.9				132.2				130,353				1.70

 

(1)	The dollar amounts reported in column (b) are the amounts of total compensation reported for Frank Sorrentino III (our Chairman and CEO) for each corresponding year in the “Total” column of the “Summary Compensation Table for 2024.”

(2)

The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Sorrentino, as computed in accordance with Item 402(v) of SEC Regulation S-K. The dollar amounts reported do not reflect the actual amount of compensation earned by or paid to Mr. Sorrentino during the applicable year. In accordance with the requirements of Item 402(v) of SEC Regulation S-K, the following adjustments were made to Mr. Sorrentino total compensation for each year to determine the compensation actually paid to Mr. Sorrentino:

 

		2024
Summary Compensation Table Total:		$	3,801,528
Deduction for amount reported in “Stock Awards” column of the Summary Compensation Table:			(1,215,005	)
Addition of fair value at fiscal year (FY) end, of equity awards granted during the FY that remained outstanding:			1,464,270
Addition of change in fair value at FY end versus prior FY end for awards granted in a prior FY that remained outstanding:			-
Addition of change in fair value at vesting date versus prior FY end for awards granted in a prior FY that vested during the FY:			(54,104	)
Deduction for values reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table:			(648,624	)
Addition of service costs and prior service costs:			558,013
Compensation Actually Paid (CAP)		$	3,906,078

 

(3)

The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s Named Executed Officers (“NEOs”) as a group (excluding Mr. Sorrentino) in the “Total” column of the “Summary Compensation Table for 2024” in each applicable year. The names of the NEOs (excluding Mr. Sorrentino) included for the purpose of calculating the average amounts in each applicable year are William S. Burns, Elizabeth Magennis, Laura Criscione and Michael O’Malley for 2024, William S. Burns, Elizabeth Magennis, Christopher Ewing, Mark Zurlini and Sharif Alexandre for 2023; William S. Burns, Elizabeth Magennis, Christopher Ewing and Michael O’Malley for 2022.

(4)

The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Sorrentino), as computed in accordance with Item 402(v) of SEC Regulation S-K. The names of the NEOs (excluding Mr. Sorrentino) included for the purpose of calculating the average amounts in each applicable year are William S. Burns, Elizabeth Magennis, Laura Criscione and Michael O’Malley for 2024, William S. Burns, Elizabeth Magennis, Christopher Ewing, Mark Zurlini and Sharif Alexandre for 2023; William S. Burns, Elizabeth Magennis, Christopher Ewing and Michael O’Malley for 2022. The dollar amounts reported do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Sorrentino) during the applicable year. In accordance with the requirements of Item 402(v) of SEC Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Sorrentino) for each year to determine the compensation actually paid, using the same methodology described above in footnote (2):

 

 

41

 

		2024
Summary Compensation Table Total:		$	1,063,366
Deduction for amount reported in “Stock Awards” column of the Summary Compensation Table:			(234,341	)
Addition of fair value at fiscal year (FY) end, of equity awards granted during the FY that remained outstanding:			282,417
Addition of change in fair value at FY end versus prior FY end for awards granted in a prior FY that remained outstanding:			-
Addition of change in fair value at vesting date versus prior FY end for awards granted in a prior FY that vested during the FY:			(10,766	)
Deduction for values reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table:			(119,426	)
Addition of service costs and prior service costs:			99,139
Compensation Actually Paid (CAP)		$	1,080,389

 

(5)

Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period (determined in accordance with Item 402(v) of SEC Regulation S-K), assuming dividend reinvestment, and the difference between the Company’s common share price at the end and the beginning of the measurement period by the Company’s common share price at the beginning of the measurement period.

 

(6)

Represents the weighted peer group cumulative TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each measurement period for which a return is indicated. The peer group used for this purpose is the Company’s peer group as defined in the section captioned “EXECUTIVE COMPENSATION – Compensation Discussion and Analysis.” The same financial services holding companies were included in the Company’s Compensation Peer Group disclosed in the section captioned “EXECUTIVE COMPENSATION – Compensation Discussion and Analysis” in the Company’s Proxy Statement for each of the 2024 Annual Meeting and the 2023 Annual Meeting of Shareholders.

 

(7)	The dollar amounts reported represent the amount of net income (in thousands) reflected in the Company’s audited consolidated financial statements for the applicable year.

 

(8)

While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, we have determined that Core Return on Average Assets (“Core ROAA”) is the financial performance measure that, in Company's opinion, represents the most important performance measure (that is not otherwise required to be disclosed in this table) we used to link compensation actually paid to the Company’s NEOs for the most recently completed fiscal year to the Company's performance. Core ROAA is defined as core income as a percentage of average assets. Core income is defined as net income after taxes and before extraordinary items, less net income attributable to noncontrolling interest, gain on sale of held-to-maturity and available-for-sale securities, amortization of intangibles, goodwill and nonrecurring items. Examples of nonrecurring items include, but are not limited to, merger charges, loss on debt extinguishment, and losses on branch closures. Our Compensation Committee believes Core ROAA is the most comprehensive and consistent measure of profitability and the least likely to be impacted by items that can conflict with optimal performance. Set forth below are the most important financial performance measures we used to link compensation actually paid to the CEO and Other NEOs to our performance for the year ended December 31, 2024:

i.

●  Core ROAA

ii.

●  Efficiency Ratio

	iii.	●  Attainment of a target tangible book value per share.
	iv.	●  Pretax, pre-provision for loan losses, net revenue

 

 

42

 

---

 

 

Compensation Actually Paid Versus Company Performance

 

The following charts provide a clear, visual depiction of the relationships between compensation actually paid (“CAP”) for our CEO and the average CAP for our Other NEOs, to aspects of the Company’s financial performance.

 

CEO and Average Other NEOs CAP vs. Company TSR and Peer Group TSR		CEO and Average Other NEOs CAP vs. GAAP Net Income
CEO and Average Other NEOs CAP vs. Core ROAA %

 

 

43

 

 

The following table represents the grants of awards to the Named Executive Officers in 2024:

 

		Estimated future payouts under non-equity incentive plan awards						Estimated future payouts under equity incentive plan awards
Executive (a)	Grant Date (b)	Threshold ($) (c)		Target ($) (d)		Maximum ($) (e)		Threshold (#) (f)		Target (#) (g)		Maximum (#) (h)		All other stock awards: Number of shares of stock or units (#) (i)		All other stock awards: Number of securities underlying options (#) (j)		Exercise or base price of option awards ($/share) (k)		Grant date fair value of stock and option awards ($) (l)
Frank Sorrentino III	03/22/24	$	-	$	-	$	-		17,577		35,153		52,730		28,761	$	-		n/a	$	1,215,005
William S. Burns	03/22/24		-		-		-		4,721		9,441		14,162		7,724		-		n/a		326,307
Elizabeth Magennis	03/22/24		-		-		-		5,078		10,155		15,233		8,309		-		n/a		351,001
Laura Criscione	03/22/24		-		-		-		1,680		3,360		5,040		3,360		-		n/a		127,747
Michael O’Malley	03/22/24		-		-		-		1,740		3,480		5,220		3,480		-		n/a		132,310

 

 

The following table sets forth, for each of the Named Executive Officers, information regarding outstanding stock options and stock awards as of December 31, 2024:

 

	Option Awards										Stock Awards
Executive (a)	Number of securities underlying unexercised options (#) exerciseable (#)(b)		Number of securities underlying unexercised options (#) un-exerciseable (#)(c)		Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)(d)		Option exercise price ($)(e)		Option expiration date (#)(f)		Number of shares or units of stock that have not vested (#)(g)		Market value of shares or units of stock that have not vested ($)(h)		Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)(i)		Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(j)
Frank Sorrentino III		-		-		-	$	-		n/a		69,246	$	1,586,426		83,186	$	1,905,791
William S. Burns		-		-		-		-		n/a		18,695		428,302		22,540		516,391
Elizabeth Magennis		-		-		-		-		n/a		20,111		460,743		24,244		555,430
Laura Criscione		-		-		-		-		n/a		7,555		173,085		8,422		192,948
Michael O’Malley		-		-		-		-		n/a		8,005		183,395		8,939		204,792

 

 

The following table sets forth certain information regarding exercises of options or vesting of shares during the Company’s fiscal year ended December 31, 2024 by our Named Executive Officers:

 

Executive (a)	Number of shares acquired on exercise (#)(b)		Value realized on exercise ($)(c)		Number of shares acquired on vesting (#)(d)		Value realized on vesting ($)(e)
Frank Sorrentino III		-	$	-		55,341	$	1,061,030
William S. Burns		-		-		16,346		313,151
Elizabeth Magennis		-		-		17,298		331,431
Laura Criscione		-		-		6,651		127,341
Michael O’Malley		-		-		2,730		52,875

 

 

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Each of the participants listed below are parties to a Supplemental Executive Retirement Plan Agreement. Each of Messrs. Sorrentino and Burns and Ms. Magennis are also parties to a 2021 Supplemental Executive Retirement Plan Agreement dated April 1, 2022 that augments and supplements the original Supplemental Executive Retirement Plan Agreement. Subject to their terms and conditions, each Supplemental Executive Retirement Plan agreement and 2021 Supplemental Executive Retirement Plan Agreement is an unfunded promise intended to provide each of the participants with certain supplemental benefits upon retirement, or if earlier, upon his or her separation from service for certain qualifying terminations of employment. The amount and timing of payment of the supplemental retirement benefits vary based on a number of factors, including, among others, the participant’s age, the reason for any separation from service, and whether the participant has met the vesting requirements set forth in the agreement at the time of any payment triggering event.

 

The benefit amount payable to each Participant is a certain percentage of the Executive’s final salary, as defined in the Plan, exclusive of bonus, incentive compensation, and benefits as of the date of the termination of employment), as follows:

 

Participant	Final Salary Percentage
Frank Sorrentino III	37.5	%
William S. Burns	30.0
Elizabeth Magennis	30.0
Laura Criscione	10.0

 

 

Pursuant to each of the Split Dollar Life Insurance Agreements, each of Messrs. Sorrentino and Burns and Ms. Magennis designated beneficiaries will be entitled to share in the death proceeds payable under a life insurance policy owned by the Bank in the event of the participant’s death while the Agreement remains in effect. The amounts payable to the participants’ beneficiaries vary among the participants, and the age at which a participant dies.

 

 

The following table sets forth certain information regarding nonqualified deferred compensation benefits to the Named Executive Officer of the Company during the Company’s fiscal year ended December 31, 2024:

 

Executive (a)		Executive contributions in 2024 ($)(b)				Registrant contributions in 2024 ($)(c)				Aggregate earnings in 2024 ($)(d)				Aggregate withdrawals/ distributions ($)(e)				Aggregate balance at last 2024 ($)(f)
Frank Sorrentino III			-			$	648,624				-				-			$	2,179,636
William S. Burns			-				340,435				-				-				1,446,498
Elizabeth Magennis			-				121,788				-				-				385,852
Laura Criscione			-				15,482				-				-				63,980
Michael O’Malley			-				-				-				-				-

 

 

45

 

 

The following table sets forth certain information regarding compensation actually paid to the Directors during the Company’s fiscal year ended December 31, 2024, which is generally paid quarterly in arrears:

 

Nonemployee Directors (a)		Fees earned or paid in cash ($)(b)			Stock Awards ($)(c)			Options awards ($)(d)			Non-equity incentive plan compensation ($)(e)			Change in pension value and nonqualified deferred compensation earnings ($)(f)			All other compensation ($)(g)			Total ($)(h)
Frank W. Baier		$	106,500		$	60,000		$	-		$	-		$	-		$	-		$	166,500
Stephen T. Boswell			115,000			60,000			-			-			-			-			175,000
Frank Huttle III			83,500			60,000			-			-			-			-			143,500
Michael Kempner			60,000			60,000			-			-			-			-			120,000
Nicolas Minoia			109,750			60,000			-			-			-			-			169,750
William A. Thompson*			43,000			-			-			-			-			-			43,000
Daniel Rifkin			85,000			60,000			-			-			-			-			145,000
Katherin Nukk-Freeman			72,000			60,000			-			-			-			-			132,000
Mark Sokolich			60,000			60,000			-			-			-			-			120,000
Anson Moise			62,000			60,000			-			-			-			-			122,000
Susan O’Donnell			29,000			60,000			-			-			-			-			89,000

 

Each non-employee member of the Company’s Board receives (i) an annual cash fee of $60,000, plus (ii) an award of restricted stock, subject to forfeiture, with a fair market value on grant date of $60,000. Board members serving as chair of the Audit and Risk Committee, Compensation Committee, or Nominating and Corporate Governance Committee receive an additional stipend of $25,000, $13,500, and $12,000, respectively, paid in cash. Non-chair members of the Audit and Risk Committee, Compensation Committee, and Nominating and Corporate Governance Committee receive an additional stipend of $10,000, $6,000 and $6,000 respectively, paid in cash. The Lead Independent Director also received an additional $15,000 cash fee. Each board member was awarded 3,219 restricted shares subject to forfeiture, in satisfaction of the stock award component of their annual retainer, 2024.

 

* Mr. Thompson served on the Company’s Board of Directors until the 2024 annual meeting, but ceased to serve after that time, having declined to seek re-nomination in order to devote more time to his family and personal endeavors.

 

 

 

We utilize the MWW Group to provide advertising and public relations assistance and advice. Michael Kempner, one of our directors, is the President and CEO of the MWW Group, Inc. During 2024, we paid the MWW Group a total of $332,023 for its services, including marketing, branding and related services. We believe the fees charged the Bank by the MWW Group are at least as favorable to the Bank as we could receive from an unaffiliated third party. We have continued to use the services of the MWW Group during 2025.

 

Members of our Board of Directors, including our Chairman and CEO Frank Sorrentino III and Messrs. Boswell, Huttle, and Kempner, are, either directly or through their interests in family limited liability companies, members of a limited liability company that is the sole member of a limited liability company that owns our John Street, Hackensack branch locations, which are leased by the Bank. Our Board members collectively own 44.4% of the membership interests in this limited liability company. Each of Messrs. Sorrentino, Huttle, Boswell and Kempner owns an 11.1% interest in the limited liability company. No director is the managing member or a manager or officer or any of the limited liability companies which serve as the landlords or the parent limited liability company. The lease for our John Street, Hackensack branch has a term ending on December 31, 2026. The Bank has the option to extend the lease term for up to one additional five-year period. The initial rent for the branch was $148,000 per year, and the rent will increase annually by the greater of 2.50% or the rate of increase of the consumer price index for the greater New York metropolitan area. During any option period, the rent will be reset to the greater of the prior year’s rent or the “market rent”, as defined in the lease, and will then increase annually by the greater of 2.50% or the rate of increase of the consumer price index for the greater New York metropolitan area. For 2024, the Bank paid a total rent of $234,552 for the John Street, Hackensack branch.

 

 

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Nicholas Minoia, a member of our Board of Directors, is a member of a limited liability company which owns our Summit, New Jersey branch. Mr. Minoia owns approximately 50% of the membership interests in this limited liability company, and serves as its manager. The initial lease for the Summit branch ended on February 1, 2024. The Bank exercised the two of the three five-year options, the new lease end date is now January 31, 2034. The Bank has the option to extend the lease term for another five-year period. The initial rent for the branch was $81,000 per year, and the rent will increase as set forth in the lease. During any option period, the rent will be as per the amounts set forth in the lease. For 2024, the Bank paid a total rent of $143,776 for the Summit, New Jersey branch.

 

Daniel Rifkin, a member of our Board of Directors, is a member of a limited liability company which owns the Bardonia branch. Mr. Rifkin owns approximately 50% of the membership interests in this limited liability company, and does not serve as its managing member. The lease for the Bardonia branch has a term ending on August 31, 2028. The Bank has the option to extend the lease term for one additional five-year period. The rent paid by the Bank in 2024 was $296,082, and will increase three (3%) percent yearly, including any extension terms. In the event that the Bank exercises the option to terminate occupancy rights to the second floor office space, the rent will be adjusted as set forth in the lease.

 

Mr. Rifkin is also a member of a separate limited liability company which owns the Blauvelt branch. Mr. Rifkin owns approximately 50% of the membership interests in this limited liability company, and does not serve as its managing member. The lease for the Blauvelt branch has a term ending on February 28, 2028. The rent paid by the Bank in 2024 was $119,055 with increases as set forth in the lease.

 

 

Under Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, companies with securities registered with the Securities and Exchange Commission under the Exchange Act are required to provide shareholders the opportunity to vote on a non-binding advisory proposal to approve the compensation of executives. The Company has determined to implement this requirement by providing shareholders with a simple vote that indicates their position (by a yes or no vote) with respect to our executive compensation.

 

As a policy we attempt to maintain an ongoing dialogue with our shareholders, including with regard to our compensation practices. See “Compensation Discussion and Analysis – Shareholder Engagement.”

 

Our Board of Directors annually reviews and approves corporate and/or individual goals and objectives relevant to the compensation of our executive officers, evaluates performance in light of those goals and objectives, and determines compensation levels based on this evaluation, as described elsewhere in this proxy statement. In determining any long-term incentive component of compensation, the Board will consider all such factors as it deems relevant, such as performance and relative shareholder return, the value of similar incentive awards at comparable companies and the awards granted in previous years. We also believe that both the Company and shareholders benefit from these compensation policies.

 

The Board recommends that shareholders approve, in an advisory vote, the following resolution:

 

“Resolved, that the shareholders approve the executive compensation of the Company, as described in this proxy statement, including the tabular disclosure regarding executive officers in this Proxy Statement.”

 

Because your vote is advisory, it will not be binding upon the Board. However, the Board will take into account the outcome of the vote when considering future executive compensation arrangements.

 

RECOMMENDATION

 

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE ADVISORY PROPOSAL SET FORTH ABOVE.

 

 

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The Audit and Risk Committee has appointed the firm of Crowe LLP to act as our independent registered public accounting firm and to audit our consolidated financial statements for the fiscal year ending December 31, 2025. This appointment will continue at the pleasure of the Audit and Risk Committee and is presented to the shareholders for ratification as a matter of good governance. In the event that this appointment is not ratified by our shareholders, the Audit and Risk Committee will consider that fact when it selects independent auditors for the following fiscal year.

 

Crowe LLP has served as our independent registered public accounting firm since July 1, 2014, and one or more representatives of Crowe LLP will be present at the Annual Meeting. These representatives will be provided with an opportunity to make a statement at the Annual Meeting if they desire to do so and will be available to respond to appropriate questions from shareholders.

 

The following table sets forth a summary of the fees billed or expected to be billed to the Company by Crowe for professional services rendered for the years ended December 31, 2024 and 2023.

 

 

Aggregate fees billed to the company for the fiscal years ended December 31, 2024 and 2023 by the Company’s principal accounting firm are shown in the following table:

 

	Fiscal Year Ended December 31,
	2024			2023
Audit Fees	$	844,200		$	804,000
Tax Fees (1)		17,992			54,679
Other Fees		208,244			52,932
Total Fees	$	1,070,436		$	911,611

 

(1)	Consists of tax filing and tax related compliance and other advisory services.

 

 

THE PROPOSAL TO RATIFY THE SELECTION OF CROWE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2025 FISCAL YEAR REQUIRES AN AFFIRMATIVE VOTE OF THE MAJORITY OF THE SHARES REPRESENTED ONLINE OR BY PROXY AT THE ANNUAL MEETING AND ENTITLED TO VOTE ON THE PROPOSAL.

 

 

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF CROWE LLP AS THE COMPANY’S INDEPENDENT AUDITORS

 

 

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Proposals of shareholders to be included in the Company’s 2026 proxy material must be received by the secretary of the Company no later than January 21, 2025.

 

 

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and directors, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten percent shareholders are required by regulations of the Securities and Exchange Commission to furnish the Company with copies of all Section 16(a) forms they file. The Company believes that all persons associated with the Company and subject to Section 16(a) have made all required filings on a timely basis for the fiscal year ended December 31, 2024.

 

 

The Board of Directors is not aware of any other matters which may come before the Annual Meeting. However, in the event such other matters come before the meeting, it is the intention of the persons named in the proxy to vote on any such matters in accordance with the recommendation of the Board of Directors.

 

 

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