Roberto R. Herencia
About Roberto R. Herencia
Executive Chairman and Chief Executive Officer of Byline Bancorp since February 12, 2021; Chairman of the Board since June 2013; age 65; BA in Finance (Georgetown University) and MBA (Northwestern Kellogg). 2024 performance highlights: net income $120.8M, diluted EPS $2.75, ROA 1.31%, return on average tangible common equity 14.85%, efficiency ratio 52.45%, and revenues up 5.2% year over year, reflecting positive operating leverage in a moderating-rate, mixed macro backdrop . CEO pay ratio for 2024 was 38:1, with CEO total compensation of $2,989,969 versus median employee compensation of $78,904 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| BXM Holdings, Inc. | President & CEO | Nov 2010–present | Led recapitalization of predecessor Metropolitan Bank Group; extensive turnaround and M&A execution (17+ deals) . |
| Midwest Banc Holdings, Inc. | President & CEO | Prior to 2010 | Senior leadership across corporate, commercial, small business, and retail banking . |
| Popular Inc. / Banco Popular North America | EVP; President of Banco Popular North America | 17 years | Leadership across problem asset restructuring and retail banking . |
| SKBHC Holdings LLC and subsidiaries | Independent Director | Dec 2010–Sep 2015 | Board oversight of American West Bank and First National Bank of Starbuck . |
| Overseas Private Investment Corporation (OPIC) | Director | Prior service | Federal development finance oversight . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Banner Corporation / Banner Bank | Chairman of the Board | Since Mar 2016 | Public company board leadership . |
| First BanCorp / FirstBank Puerto Rico | Chairman of the Board | Since Oct 2011 | Public company board leadership . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 824,995 | 866,923 | 907,308 |
| Annual Base Rate ($) | — | 875,000 | 915,000 |
| Employment Agreement Base Salary ($) | — | — | 825,000 |
| EIP Target (% of Base) | — | — | 85% (program) |
| EIP Target ($) | — | — | 777,750 |
Notes:
- Per employment agreement baseline terms: EIP annual bonus opportunity 75% of base salary (agreement terms are periodically reviewed and updated by the Board) .
- 2024 compensation program set CEO target at 85% of base salary, with corporate goal weighting 80% and individual performance 20% .
Performance Compensation
Short-Term Incentive (Executive Incentive Plan – 2024)
| Metric | Weight | Threshold | Target | Maximum | Actual | Score |
|---|---|---|---|---|---|---|
| NPAs / Assets | 12.50% | 1.10% | 0.69% | 0.52% | 0.71% | 12.22% |
| Net Charge-Offs / Avg Loans & Leases | 12.50% | 0.65% | 0.36% | 0.26% | 0.47% | 10.13% |
| Adjusted Pre-Tax, Pre-Provision Net Income ($000s) | 50.00% | 140,000 | 186,604 | 200,000 | 188,942 | 59.73% |
| Adjusted Efficiency Ratio | 25.00% | 56.00% | 52.56% | 51.00% | 52.24% | 30.13% |
| Total Corporate Score | 100.00% | — | — | — | — | 111.21% |
| Executive | 2024 Target (% of Salary) | 2024 Target ($) | Corporate Performance (%) | Individual Performance (%) | 2024 Actual ($) | 2024 Actual (% of Salary) |
|---|---|---|---|---|---|---|
| Roberto R. Herencia | 85% | 777,750 | 111.21% | 200% | 1,003,026 | 110% |
Individual performance drivers for the CEO included top-quartile profitability and efficiency, balanced growth, and talent development and investor engagement; the individual performance portion was awarded at 200% of target .
Long-Term Incentive Program (LTIP – 2024 Design)
| Award Type | Weighting | Performance Metric(s) | Measurement/Peer Group | Payout Curve | Vesting |
|---|---|---|---|---|---|
| Performance Shares | 50% | Core ROA; Relative TSR (rTSR) | KBW Regional Bank Index (KRX) | 25% at 25th percentile; 100% at 50th; 150% at 75th; no >100% if rTSR negative | Earned over 3-year performance period; vested at end |
| Time-Based Restricted Shares | 50% | Continued employment | — | — | Equal annual tranches over 3 years; automatic vesting upon death, disability, or qualifying termination following change-in-control |
2024 grant mechanics: For the CEO, performance share target 25,137 shares (threshold 12,569; max 37,706) and time-based restricted shares 25,137; grant date fair value $1,036,650 . Values disclosed for performance-based portion at target were $507,265; at maximum $760,897 .
Equity Ownership & Alignment
- Beneficial ownership: 634,304 shares; 1.37% of 46,226,562 shares outstanding as of April 9, 2025 .
- Outstanding equity awards (as of Dec 31, 2024):
- Stock options: 214,494 exercisable at $11.18; expiration 6/26/2025 .
- Unvested time-based restricted shares: 4,333 (2022 grant; $125,657), 11,962 (2023; $346,898), 25,137 (2024; $728,973) .
- Unearned performance shares: 19,502 (2022; $565,558), 26,914 (2023; $780,506), 25,137 (2024; $728,973) .
- Executive stock ownership guidelines: CEO required to own shares equal to 5x base salary; must retain at least 50% of vested full-value shares until compliant; five-year window to reach compliance .
- Hedging and pledging: Prohibited for directors and executive officers .
Potential insider selling pressure:
- 2015-stock options are in-the-money and expire on 6/26/2025, which can create timing-related exercise/sale pressure around expiry windows .
Employment Terms
| Item | CEO Terms |
|---|---|
| Agreement Base Salary | $825,000 (initial term, reviewed annually) |
| EIP Participation | Yes |
| EIP Target | 75% of base (agreement baseline; program target set at 85% in 2024) |
| LTIP Participation | Yes |
| Severance – Without Cause / Good Reason | Cash severance equal to 2.0x (base + target EIP) paid over 24 months + Applicable COBRA; plus unpaid/prorata EIP . Cash example: $4,163,250; COBRA $29,019; total $4,192,269 (assumes Dec 31, 2024 stock price for equity calculations) . |
| Severance – CIC + Qualifying Termination (Double Trigger) | Cash severance equal to 2.99x (base + target EIP) + Applicable COBRA; plus unpaid/prorata EIP; accelerated vesting of equity awards . Cash $5,839,073; COBRA $29,019; accelerated equity vesting $3,276,565; total $9,144,657 (assumes $29.00 stock price on Dec 31, 2024) . |
| Death/Disability | Unpaid/prorata EIP; lump-sum $750,000 on death; accelerated equity vesting $3,276,565; total $5,004,315 . |
| Clawback | NYSE/SEC-compliant policy updated in 2023; recoupment for restatements or significant misconduct . |
Board Governance
- Board service: Director since 2013; Executive Chairman and CEO; member of the Risk Committee at Byline; also Executive Chairman of Byline Bank and member of the Risk, Executive Credit, Trust, and ALCO committees at the bank subsidiary .
- Dual-role implications: Combined Executive Chairman and CEO role concentrates authority; mitigated by a designated Lead Director (Antonio del Valle Perochena) and committee structures .
- Director compensation: Executive officers serving as directors do not receive additional director compensation .
- Non-employee director program for context: Annual cash retainer $115,000; additional committee/lead director retainers; stock elections permitted; ownership guideline equals 3x board retainer .
Compensation Structure Analysis
- Pay mix emphasizes performance: CEO target annual total direct compensation is ~66% variable vs. 34% fixed, aligning pay with performance .
- Year-over-year changes: CEO base annual rate increased 4.6% from $875,000 (2023) to $915,000 (2024); stock awards rose from $701,274 (2022) to $897,663 (2023) to $1,036,650 (2024); non-equity incentive rose from $700,603 (2022) to $844,760 (2023) to $1,003,026 (2024), reflecting improved corporate performance and individual results .
- Performance metrics and rigor: Corporate scorecard achieved 111.21% of target; individual performance for CEO awarded at 200% based on strategic execution; LTIP performance shares measured vs. KRX on ROA and rTSR with caps when rTSR is negative .
Equity Ownership & Alignment (Detail)
| Item | Detail |
|---|---|
| Beneficial Ownership | 634,304 shares; 1.37% of outstanding as of Apr 9, 2025 . |
| Options (exercisable) | 214,494 @ $11.18; expire 6/26/2025 . |
| RSUs (unvested) | 4,333 (2022; $125,657), 11,962 (2023; $346,898), 25,137 (2024; $728,973) . |
| PSUs (unearned) | 19,502 (2022; $565,558), 26,914 (2023; $780,506), 25,137 (2024; $728,973) . |
| Ownership Guidelines | CEO: 5x base salary; retain 50% of vested full-value shares until achieved; five-year compliance window . |
| Hedging/Pledging | Prohibited for directors and executive officers . |
Director Compensation (for non-employee directors – program overview)
| Component | Amount |
|---|---|
| Annual Board Cash Retainer | $115,000 |
| Committee Member Retainer | $5,000 (Audit, Risk, Bank Executive Credit) |
| Committee Chair Retainers | $15,000 (Audit); $10,000 (Risk); $7,500 (Compensation); $7,500 (Governance & Nominating); $15,000 (Bank Executive Credit); $3,750 (Bank Trust); $3,750 (Bank ALCO) |
| Lead Director | $25,000 |
| Stock Election | Up to 100% of retainer in common stock under 2017 Omnibus Plan |
| Ownership Guideline | 3x board retainer |
Note: Executive directors (including Mr. Herencia) receive no additional director compensation .
Employment & Contracts (additional detail)
- Agreements include severance benefits subject to release; accrued benefits paid per agreement; equity treatment governed by award agreements; payment schedules defined (e.g., 24 months for CEO non-CIC severance) .
- Reporting lines: Subsidiary executives report to CEO; for Small Business Capital President, reporting to Executive Chairman and CEO of Byline Bancorp is noted .
Performance & Track Record
- Corporate execution in 2024: Top-quartile profitability and efficiency; balanced growth; continued investment while delivering positive operating leverage; robust stakeholder engagement .
- Strategic initiatives: Acquisition of First Security Bancorp negotiated and structured; multi-year strategic plan development; investor relations enhancements .
Investment Implications
- Alignment and incentive quality: Significant variable pay, rigorous scorecard with risk and profitability metrics, and KRX-relative LTIP design suggest strong pay-for-performance alignment; hedging/pledging prohibitions further align interests .
- Retention risk vs. liquidity: Meaningful unvested RSUs/PSUs and double-trigger CIC acceleration support retention; near-term 2015 options expiry (June 26, 2025) could create tactical selling pressure around exercise windows .
- Governance considerations: Combined Executive Chairman/CEO role concentrates leadership; presence of a Lead Director and active committee memberships help mitigate independence concerns; executive directors do not receive additional board pay .
- Pay trajectory: Rising stock and cash incentives from 2022–2024 reflect improved performance and program design adjustments; monitoring future scorecard calibration and LTIP outcomes vs. KRX will be key to sustaining alignment and controlling pay inflation risk .