Thomas J. Kemly
Columbia FinancialAbout Thomas J. Kemly
Thomas J. Kemly, age 67 as of April 14, 2025, is President & CEO of Columbia Financial, Inc. and Columbia Bank; he joined the bank in 1981 and became CEO in 2012, serving on the Company’s board since 2006 . Under his leadership in 2024, the bank completed the Freehold Bank merger, stabilized and expanded net interest margin through the year, grew deposits 3.2%, reduced wholesale borrowings to 10.3% of assets (from 14.4%), and grew commercial business loans $90 million (16.7%); non‑performing assets were 0.22% of total assets at year‑end 2024 . Governance structure separates the CEO and Chair roles, with an independent chair, mitigating dual‑role risks; Kemly is the only non‑independent director .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Columbia Bank / Columbia Financial, Inc. | President & CEO | 2012–present | Led IPO (2018), strategic acquisitions, and growth initiatives including new lending verticals; expanded community giving via Columbia Bank Foundation . |
| Columbia Bank | Chief Operating Officer; Chief Financial Officer; other roles since 1981 | 1981–2012 | Built operational and financial leadership depth prior to CEO role . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Federal Home Loan Bank of New York | Director | Not disclosed (current) | Regional banking system governance and liquidity/capital market access for member banks . |
| New Jersey Bankers Association | Former Chair; current Board Member | Not disclosed | Industry advocacy and policy influence in NJ banking market . |
| Commerce and Industry Association of New Jersey (CIANJ) | Board Member | Not disclosed | Business community engagement and policy input . |
| Columbia Bank Foundation | Chair | Not disclosed | Expanded one of NJ’s largest private giving foundations post‑IPO . |
Fixed Compensation
Multi‑year CEO compensation detail (Summary Compensation Table):
| Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non‑Equity Incentive ($) | Change in Pension/Deferred ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| 2022 | 859,850 | — | — | 637,181 | — | 165,618 | 1,662,649 |
| 2023 | 878,064 | 622,776 | 207,659 | 191,634 | 1,672,739 | 122,783 | 3,695,655 |
| 2024 | 900,005 | 683,840 | 227,840 | 302,485 | 564,078 | 80,773 | 2,759,021 |
Additional fixed elements and benefits:
- Pension/RIM present value at 12/31/2023: Pension Plan $4,249,801; RIM $7,670,555 .
- Supplemental life insurance: CEO benefit equals 3× base salary, in addition to basic life coverage (taxable imputed income shown in “All Other Comp”) .
- Perquisites remain limited (auto and mobile) .
Performance Compensation
Annual cash incentive (PAIP) structure and 2024 outcomes for CEO:
| Metric (2024 PAIP) | Weighting | Threshold | Target | Stretch | Actual | Earned % of Target |
|---|---|---|---|---|---|---|
| Core Net Income of Columbia Bank | 40% | $22.50mm | $53.65mm | $84.80mm | $19.65mm (adjusted) | 0.00% |
| Core Efficiency Ratio of Columbia Bank | 40% | 82.0% | 71.0% | 60.0% | 79.7% (adjusted) | 24.15% |
| Non‑Performing Assets / Total Assets | 20% | 0.50% | 0.25% | 0.10% | 0.24% | 20.66% |
| 2024 PAIP Detail | Amount |
|---|---|
| CEO Target Opportunity (% of Salary) | 75.00% |
| CEO Target ($) | $675,000 |
| CEO Payout Earned | 44.81% of target; $302,485; 33.61% of salary |
Long‑Term Incentive Program (LTIP):
- 2024 LTIP mix: 50% Performance‑Restricted Stock (PRSA), 25% Time‑Vested RSAs, 25% Time‑Vested NQSOs .
- CEO 2024 grants: 27,647 PRSAs (target), 13,823 RSAs, 37,168 options, exercise price $16.49; RSAs/options vest 1/3 annually starting Mar 6, 2025; PRSAs cliff‑vest post 3‑year performance period (2024–2026) .
- PRSA metrics and weighting: Absolute Core Bank ROAA (60%) and Relative Core Bank Efficiency Ratio vs KBW Nasdaq Regional Bank Index (40%); payout 0–150% with interpolation, settle Q1 2027 .
Program governance:
- Clawback: Recoupment policy updated in 2023 to comply with SEC/Nasdaq; also supplemental misconduct clawback for SVP+ .
- Say‑on‑Pay support: 98.2% approval on June 6, 2024; 98.9% in 2023—strong shareholder backing for pay design .
- Independent consultant (Pearl Meyer) supports benchmarking and design; robust “what we do/what we don’t” safeguards (no gross‑ups, no repricing, no pledging/hedging, no single‑trigger CIC) .
Equity Ownership & Alignment
| Beneficial Ownership (Record Date: Apr 14, 2025) | Shares/Percent |
|---|---|
| Shares owned (CEO) | 575,464 |
| Shares acquirable within 60 days via options | 681,491 |
| Ownership as % of outstanding | 1.20% |
| Notable plan holdings within “owned” bucket | ESOP 7,620; SERP 32,597; 401(k) 40,946; SIM 41,572; Stock‑Based Deferral 64,201; 2019 Equity Plan unvested RSAs 153,128; includes 5,933 spousal shares . |
Vesting overhang and cadence:
- 2024 grants: RSAs/options vest in three equal tranches beginning March 6, 2025; PRSAs cliff after FY2026 results (settle in 2027) .
- Legacy grants: 2019 options fully/exercisable; e.g., 656,471 options at $15.60 expiring 7/23/2029 .
Alignment policies:
- Stock ownership guideline: CEO 5× base salary; all NEOs in compliance as of 12/31/2024 .
- Anti‑hedging and anti‑pledging: Hedging and pledging prohibited for officers and directors .
Implications for selling pressure:
- Annual RSA/option vesting cycles (2025–2027) and potential PRSA settlement in 2027 create periodic liquidity events; policy‑driven restrictions (no hedging/pledging, insider trading policy on file) moderate risk of opportunistic sales .
Employment Terms
Key agreement economics (two‑year agreements with annual renewal):
- Severance (no CIC): CEO 3× (base salary + target bonus), paid as salary continuation over 36 months; COBRA differential reimbursed up to 36 months with release .
- CIC double‑trigger (within 24 months post‑CIC): CEO 3× (higher of pre/post CIC base and target), lump sum within 60 days, plus prior‑year bonus timing, plus lump sum COBRA differential for 36 months .
- Equity on CIC: If awards aren’t assumed and involuntary separation without cause within 12 months post‑CIC, unvested awards vest at change‑in‑control effectiveness per plan terms .
- Best‑net‑benefit 280G cutback applies (no gross‑ups) .
- Disability/death: 1× (base + target) less LTD for disability (salary‑continuation), death payment 1× (base + target) plus standard life insurance; separate supplemental life equals 3× base for CEO .
- Clawback: SEC/Nasdaq‑compliant and supplemental misconduct clawback .
Board Governance
- Board service: Director since 2006; not independent (management director) .
- Leadership structure: Independent Chair (Noel R. Holland); CEO and Chair roles separated to enhance oversight .
- Committees: As of Apr 14, 2025, Kemly is not on board committees; committees are fully independent members .
- Prior committee participation: Listed as Risk Committee member in 2023 (Company disclosures for 2024 proxy) .
- Attendance: No director attended fewer than 75% of board/committee meetings in 2024 .
Compensation Structure Analysis
- Cash vs. equity mix: 2024 maintained salary flat at $900k and increased equity grant values vs. 2023; LTIP maintains 50% performance‑based equity weighting (PRSA), reinforcing at‑risk pay .
- Metrics difficulty: 2024 PAIP paid below target (44.81% of target for CEO) after Core Net Income missed threshold and efficiency ratio achieved only between threshold/target (after an adjustment for non‑recurring fees), indicating tightening relative to plan in a challenging rate environment .
- Option usage: Continued inclusion of options (25% of LTIP) keeps some upside sensitivity; no option repricing permitted .
- Governance safeguards: No tax gross‑ups, robust clawbacks, anti‑pledging/hedging, no single‑trigger CIC, and independent consultant support reduce governance risk .
Performance & Track Record
- 2024 highlights: NIM stabilized then expanded quarterly; deposits +3.2%; wholesale borrowings reduced to 10.3% of assets; commercial business loans +$90mm (16.7%); NPAs 0.22% .
- Strategic execution: Added asset‑based lending and equipment finance, digital enhancements, and integration of Freehold Bank .
- 2023 financials: Net income $36.1mm; ROAA 0.36%; ROAE 2.31%; asset growth 2.3%; deposit growth 2.6%; NPAs 0.12% .
Equity Award and Vesting Schedules (Detail)
| Award Type | Grant Date | Shares/Options | Vesting | Exercise Price | Expiry |
|---|---|---|---|---|---|
| PRSA (2024–2026) | 03/06/2024 | 27,647 (target) | Cliff after performance period; settle 2027 | — | — |
| RSA (2024) | 03/06/2024 | 13,823 | 1/3 annually starting 03/06/2025 | — | — |
| NQSO (2024) | 03/06/2024 | 37,168 | 1/3 annually starting 03/06/2025 | $16.49 | 03/06/2034 |
| NQSO (2019) | 07/23/2019 | 656,471 exercisable | Fully vested | $15.60 | 07/23/2029 |
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay approvals: 98.2% (2024 meeting); 98.9% (2023 meeting), indicating strong investor support for pay‑for‑performance program .
- Peer benchmarking: Northeast & Mid‑Atlantic region bank peer set used; Pearl Meyer advises annually .
Board Director Service Details (CEO as Director)
- Independence: Not independent; all other directors independent; mitigated by independent chair and fully independent standing committees .
- Committees: None as of 2025 record date; previously on Risk Committee (2023) .
- Attendance: ≥75% at board/committee meetings in 2024 .
- Director compensation: Non‑employee director program only; employee‑directors (CEO) do not receive director fees; director program details provided for context .
Investment Implications
- Pay‑for‑performance alignment: Below‑target annual bonus outcomes in 2024 (CEO at 44.81% of target) reflect discipline amid margin and earnings headwinds, while 50% PRSA weighting in LTIP ties long‑term equity to ROAA and efficiency versus peers—supportive of alignment with durable profitability improvements .
- Potential supply from vesting: Multi‑year RSA/option vesting through 2027 and PRSA settlement in 2027 create regular windows for potential selling; however, anti‑hedging/pledging policies, ownership guidelines (5× salary) and insider trading controls help moderate adverse flow risk .
- Retention and change‑in‑control protections: 3× CIC and non‑CIC severance multiples offer strong retention but create parachute optics; best‑net‑benefit cutback avoids excise tax gross‑ups, mitigating shareholder‑unfriendly features .
- Governance quality: Separated Chair/CEO roles, independent committees, high say‑on‑pay support, and robust clawbacks lower governance red‑flag risk, which is notable for financials exposed to credit and rate cycles .
Net: Incentive structures emphasize ROAA/efficiency leverage and prudent credit metrics (NPA/Assets), incentivizing sustainable margin expansion and operating efficiency. Watch 2025–2027 vesting cadence for incremental insider supply, PRSA performance realization against peers, and earnings path versus PAIP/PRSA hurdles as key trading catalysts. .
