Steven J. Schwartz

About Steven J. Schwartz

Steven J. Schwartz (age 70) is an attorney and certified public accountant who has served on Capital Bancorp, Inc.’s Board since 2002 and was elected Chairman of the Board effective January 1, 2020 . He has over 40 years of experience as CFO and General Counsel across industries (construction, real estate development, broadcasting, telecommunications, software, wholesale distribution), founded Prudent Capital in 1999 (Portfolio Manager), and has taught corporate finance and real estate tax as an adjunct professor at Georgetown University; he holds a B.A. in Economics from the University of Maryland and a J.D. (with honors) from the University of Maryland School of Law .

Past Roles

External Roles

Board Governance

• Independence: Board determined Schwartz is an independent director under Nasdaq rules .
• Chair/Leadership: Non-executive Chairman of the Company’s Board; CEO role is separate (Edward F. Barry), which the Board views as appropriate for oversight effectiveness .
• Committee memberships and chair roles (2024):
  • Executive Committee – Chair; Meetings: 0
  • Audit Committee – Member; Meetings: 4; designated “audit committee financial expert” by Board (with Brannan)
  • Compensation Committee – Member; Meetings: 7
  • Nominating & Corporate Governance Committee – Member; Meetings: 2
  • Risk Committee – Member; Meetings: 9
• Attendance: Each incumbent director attended at least 75% of Board and assigned committee meetings in 2024; all directors attended the 2024 annual meeting .
• Executive sessions: Independent directors meet in executive session without management at least twice annually .

Fixed Compensation

Stock ownership guidelines: Non-employee directors are expected to hold at least $100,000 in CBNK stock; five-year compliance period; must retain 100% of net after-tax shares until guideline met, then 50% for 36 months; Audit Chair and certain investment firm representatives may be excluded per policy .

Performance Compensation

• Director equity awards are not disclosed as being tied to specific performance metrics; vesting schedules for director awards are not specified in the proxy. The Company’s 2017 Plan prohibits option/SAR repricing without shareholder approval and provides for change-in-control treatment at the Compensation Committee’s discretion .
• Clawback policy: Adopted Nov 17, 2023; applies to executive officers for 3 fiscal years preceding a restatement; not specific to director equity .

Other Directorships & Interlocks

Expertise & Qualifications

• Attorney and CPA with multi-industry CFO/GC experience; portfolio management expertise; long-standing banking experience including prior community bank board service .
• Audit Committee financial expert and financially sophisticated as determined by the Board .
• Strategic and risk oversight experience; serves on Executive and Risk Committees .

Equity Ownership

Governance Assessment

• Positives

  • Independent, non-executive Chairman; separation from CEO enhances oversight .
  • Recognized audit committee financial expert; multi-decade finance/legal background supports audit and compensation oversight quality .
  • High personal ownership (4.38%), aligned with shareholders; no pledging disclosed; stringent insider trading and anti-hedging policies .
  • Attendance and engagement: ≥75% meeting attendance in 2024; full annual meeting attendance; multiple committee memberships including Executive Chair, Audit, Compensation, Nominating, Risk .
  • No related-party transactions involving Schwartz disclosed; related-party transactions subject to Audit Committee approval; ordinary banking relationships monitored (group exposure: $28.6m loans; $92.0m deposits as of Dec 31, 2024) .

• Watch items / potential investor concerns

  • Classified Board and supermajority voting provisions remain; Board cites stability and insider alignment (approx. 32% insider/management ownership), but governance risk of entrenchment exists for activists/strategic transactions .
  • Equity plan dilution: Proposed 2025 share increase of 520,000 would raise basic overhang from 6.46% to 9.58%; burn rate three-year average 0.75% and targeted ≤1% going forward, but investors should monitor issuance pace and mix .
  • Ordinary course related-party loans exist across the director/officer group; all reported as standard terms with no adverse classifications, but still merits periodic review for conflicts .
  • Section 16 compliance: Company reported timely compliance except for specified others; no delinquency cited for Schwartz (a positive) .

Executive sessions occur at least twice annually, and all committee charters and governance guidelines are published; ESG oversight is formalized via the ESG Committee .

Appendix: Committee Assignments Summary

Director Compensation Mix (2024)

2024 director grants: stock awarded at $24.20 per share (Jan 1, 2024); option fair value $10.62 (Jan 1, 2024). Counts/vesting for director awards not individually disclosed in the proxy . The 2017 Plan prohibits repricing without shareholder approval and provides for change-in-control treatment at the Committee’s discretion .