John Klimowich
Columbia FinancialAbout John Klimowich
Senior Executive Vice President and Chief Risk Officer of Columbia Financial, Inc. (CLBK) and Columbia Bank. He is one of the company’s Named Executive Officers (NEOs). As of December 31, 2024, he had 39.17 years of credited service under CLBK’s pension plans, indicating multi-decade tenure. 2024 incentive metrics for NEOs (including the CRO) emphasized bank-level Core Net Income, Core Efficiency Ratio, and Non‑Performing Assets (NPAs) to Total Assets. Company context in 2024: Core ROAA was 0.19%, Core Efficiency Ratio 79.7%, and the pay-versus-performance TSR index was 93 (base $100) for 2024, while the bank achieved deposit growth and maintained low NPAs (0.22%). “Say‑on‑Pay” support in 2024 was 98.2%.
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 383,000 | 392,307 | 400,000 |
Performance Compensation
Annual Incentive (PAIP) – Structure, Metrics, Outcome (2024)
| Component | Detail |
|---|---|
| Target bonus | 60% of base salary; Target $240,000 |
| Metric weights (CRO) | Core Net Income 30%; Core Efficiency Ratio 30%; NPAs/Assets 10%; Other (individual/department) 30% |
| Individual/Dept goals (CRO) | Regulatory Compliance/Internal Controls (20%); Enhancement of Compliance Personnel/Practices (10%) |
| 2024 metric framework | Core Net Income threshold/target/stretch: $22.5mm/$53.65mm/$84.8mm; Efficiency threshold/target/stretch: 82.0%/71.0%/60.0%; NPAs/Assets threshold/target/stretch: 0.50%/0.25%/0.10% |
| 2024 actuals used for PAIP | Core Net Income: $19.65mm (0% payout); Core Efficiency Ratio: 79.7% (between threshold and target after Committee adjustment); NPAs/Assets: 0.24% (slightly above target) |
| 2024 payout | 50.94% of target; $122,262 |
Long-Term Incentive Program (LTIP)
| Grant Year | Instrument | Shares/Options Granted | Vesting | Notes |
|---|---|---|---|---|
| 2024 | Performance RSAs (PRSAs) | 6,583 | Cliff vests post 3-year period (2024–2026), 0–150% earn-out on Absolute Core Bank ROAA (60%) and Relative Core Bank Efficiency Ratio (40%) | Performance metrics retained from 2023 plan |
| 2024 | Restricted Stock Awards (RSAs) | 3,291 | 1/3 annually starting Mar 6, 2025 | |
| 2024 | Non‑Qualified Stock Options (NQSOs) | 8,850 | 1/3 annually starting Mar 6, 2025 | |
| 2023 | Performance RSAs (PRSAs) | 8,269 | Cliff vests post 3-year period (2023–2025), same metrics (ROAA 60%; Efficiency 40%) | |
| 2023 | Restricted Stock Awards (RSAs) | 4,134 | 1/3 annually starting May 1, 2024 | |
| 2023 | Non‑Qualified Stock Options (NQSOs) | 12,030 | 1/3 annually starting May 1, 2024 |
Equity Ownership & Alignment
| Ownership Detail | Amount |
|---|---|
| Beneficially owned shares | 142,151 |
| Options exercisable within 60 days | 195,195 |
| Ownership as % of shares outstanding | 0.32% |
| Anti‑pledging/hedging policy | Pledging and hedging prohibited |
| Shares pledged | None indicated (proxy states none pledged unless otherwise noted) |
| Ownership guideline (SEVP) | 3x base salary; all current NEOs in compliance as of 12/31/24 |
Breakdown of reported holdings and plans (as of the record date, where disclosed):
- ESOP: 7,620 shares; ESOP SERP: 7,051 shares; 401(k): 17,130 shares; Savings Income Maintenance Plan: 4,214 shares; Stock‑based Deferral Plan: 7,323 shares; Unvested restricted stock (2019 plan): 38,950 shares .
Outstanding awards at 12/31/2024 (for visibility into future vesting/supply):
| Instrument | Status at 12/31/24 | Quantity | Reference |
|---|---|---|---|
| Options (2019 plan) | Exercisable | 188,235 | |
| Options (2023 grant) | Exercisable / Unexercisable | 4,010 / 8,020 | |
| RSAs (2023 grant) | Unvested RS | 2,756 | |
| RSAs (2024 grant) | Unvested RS | 3,291 | |
| PRSAs (2023 grant) | Unearned shares (max basis shown) | 12,403 | |
| PRSAs (2024 grant) | Unearned shares (max basis shown) | 9,874 |
Section 16(a) compliance note: CLBK disclosed one late Form 4 filing for Mr. Klimowich in 2024 (one transaction).
Employment Terms
- Agreement: Two‑year employment agreement, auto‑renewable annually unless notice given. Eligibility for short‑ and long‑term incentive plans and standard executive benefits.
- Severance (no CIC): 2x (base salary + target bonus), paid as salary continuation over 24 months; COBRA differential reimbursements up to 24 months; requires release.
- Change-in-Control (CIC) severance: 3x (base salary + target bonus) lump sum if terminated without cause or resigns for good reason within 24 months of a CIC; also prior year bonus and 36 months COBRA differential paid lump sum. “Best net benefits” to mitigate 280G excise exposure.
- Good Reason: Material pay cut, material adverse role change, relocation >30 miles, or material company breach.
- Equity on CIC: Double-trigger acceleration if unassumed and involuntary separation within 12 months post‑CIC.
- Clawback: Recoupment policy (2023 update) aligned to SEC/Nasdaq for accounting restatements; supplemental misconduct recoupment policy applies to SVP+ (includes time‑based equity).
- Hedging/Pledging: Prohibited.
Potential Payments (Klimowich; as of 12/31/2024)
| Scenario | Expected Post-Termination ($) | Life Insurance ($) | PAIP ($) | Equity Acceleration ($) | ESOP SERP ($) | Potential Forfeiture ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Death | 600,000 (salary + target bonus) | 600,000 | 122,262 | 213,024 | — | — | 1,535,286 |
| Disability | 600,000 (less LTD offset) | — | 122,262 | 213,024 | — | — | 935,286 |
| Involuntary (no CIC) | 1,365,485 | — | — | — | — | — | 1,365,485 |
| Involuntary or Good Reason after CIC | 2,008,709 | — | — | 447,802 | 268,752 | (20,602) 280G adj. | 2,704,661 |
| Retirement | — | — | 122,262 | — | — | — | 122,262 |
Note: “Potential Forfeiture” reflects modeled 280G “best net benefits” reductions; equity acceleration assumptions include awards not assumed by a surviving entity.
Compensation Structure Analysis
- Cash vs equity mix: For 2024, CRO target cash incentive was 60% of base ($240k), with equity grants under the LTIP (PRSAs, RSAs, NQSOs). The 2024 LTIP emphasized 50% performance-based equity vs. 2023’s at-least-30% performance-based equity, increasing performance leverage year-over-year.
- Metric design and outcomes: 2024 corporate performance missed the Core Net Income goal but achieved NPAs/Assets slightly above target and the Core Efficiency Ratio between threshold and target after a committee-approved adjustment for non-recurring professional fees, yielding a 50.94% of target payout for the CRO.
- Governance: Independent consultant (Pearl Meyer) supports calibration; anti‑hedging/pledging in place; updated recoupment policy; strong “Say‑on‑Pay” support (98.2%).
Performance & Track Record (context)
- 2024 highlights: Deposit growth (3.2%), NPAs at 0.22%, reduced wholesale borrowings (to 10.3% of assets), new ABL/equipment finance lines, and ongoing digital/cyber enhancements—core to risk and efficiency focus areas tied to incentive metrics.
- Bank Core ROAA 0.19% and Core Efficiency Ratio 79.7% in 2024 per non-GAAP definitions used for compensation.
- Pay vs Performance TSR index of 93 for 2024 (base 100).
Equity Ownership & Governance Checks
- Ownership alignment: Beneficial ownership shows meaningful skin-in-the-game through stock and sizable vested options; NEOs are subject to robust stock ownership requirements (SEVP: 3x base salary) and were in compliance at year-end 2024.
- No pledging; anti‑hedging policy in force.
Investment Implications
- Alignment: A higher share of performance-based equity in 2024 (50%) strengthens pay-for-performance linkage; CRO incentives are tied to asset quality (NPAs), efficiency, and bank-level profitability, which can support prudent risk-taking and operational discipline.
- Retention risk and overhang: Multi-decade service, pension vesting, and double-trigger equity vesting on CIC suggest balanced retention; upcoming vesting of RSAs/options could create modest periodic selling pressure, but anti‑pledging/hedging policies mitigate adverse signaling. Outstanding exercisable options (including 2019 plan), unvested RS, and unearned PRSAs indicate a continued alignment but some supply overhang as tranches vest.
- Governance: Strong “Say‑on‑Pay” (98.2%), clawback, and anti‑hedging/pledging policies reduce governance risk; employment terms are standard (double-trigger equity acceleration, best-net-benefits 280G).
- Performance lens: 2024 payout mechanics appropriately adjusted for non-recurring legal/professional fees, while holding core profitability and asset quality targets; TSR index below 100 in 2024 signals market caution—execution on ROAA and efficiency goals under the PRSA framework will be key for value realization.
Notes and Sources
- Titles/NEO identification: 2025 DEF 14A CD&A; NEO list
- Compensation, incentives, LTIP grants, vesting, payouts: 2025 DEF 14A CD&A, Exec Comp tables
- Ownership, awards outstanding, plans: 2025 DEF 14A ownership tables and outstanding awards
- Policies (ownership guidelines, clawback, hedging/pledging): 2025 DEF 14A governance/compensation policies
- Employment agreements/severance/CIC: 2025 DEF 14A employment terms and termination tables
- Company performance context (business highlights): 2025 DEF 14A CD&A
- Non‑GAAP performance measures used for incentives: Annex A
- Pay vs Performance TSR: 2025 DEF 14A Pay vs Performance
- Section 16(a) late filing disclosure: 2025 DEF 14A
