Ralph M. Mesick

About Ralph M. Mesick

Ralph M. Mesick, 64, is Senior Executive Vice President and Chief Risk Officer of Central Pacific Financial Corp. and Central Pacific Bank, appointed in September 2024. He oversees enterprise risk, compliance, credit, technology, operations, and corporate/mainland real estate lending; prior roles include Vice Chairman and Chief Risk Officer at First Hawaiian Inc./First Hawaiian Bank and Interim CFO there, with more than three decades in finance, treasury, risk management, corporate banking, CRE lending, private banking, and wealth management. He holds a BBA from the University of Hawaii at Manoa, an MBA from the University of Wisconsin–Madison (banking, finance, investments), and completed Wharton’s Advanced Risk Management Program; he is active in Hawaii nonprofit governance (HomeAid Hawaii, Saint Louis School Board of Trustees, Diocese of Honolulu Finance Council) . CPF’s recent performance context: FY2024 net income declined 9.0% YoY to $53.4 million; ROA 0.72% (adjusted ROA 0.86%), ROE 10.25% (adjusted ROE 12.10%); adjusted results exclude a $9.9 million pre-tax securities loss from portfolio repositioning and $3.1 million pre-tax strategic evaluation expenses . Over 2020–2024, the value of a fixed $100 investment in CPF rose to $124.21, reflecting company TSR dynamics, while CPF reported net income of $53.4 million and ROE of 10.3% in 2024 per the Pay-Versus-Performance disclosure .

Past Roles

External Roles

Fixed Compensation

• Individual pay details for Mesick are not disclosed in the 2025 Proxy (he is an executive officer but not a Named Executive Officer); CPF’s executive compensation framework is summarized below and applies broadly to executives .

Performance Compensation

• CPF’s Annual Incentive Plan (AIP) uses three metrics with defined weights and payout curves; target payouts for NEOs ranged from 50%–100% of base salary, and the overall 2024 AIP payout was 94% of target based on adjusted Net Income, Efficiency Ratio, and Business Plan/Personal goals .

• Adjusted AIP results: Net Income achieved 99% of target (98% payout for that portion); Efficiency Ratio was 3.84% above target (52% payout for that portion); Business/Personal goals exceeded expectations (CEO 117%, average others 115%), driving a final pool payout of 94%; absent adjustments for non-recurring items, payout would have been 59% of target .

Long-Term Incentives (LTI):

• Executives receive annual RSUs (time-based, 3-year ratable vesting) and PSUs (3-year performance, cliff vest), split 50%/50%. PSUs are earned on two metrics: 50% Average ROE (80% threshold → 50% payout; 100% target → 100%; 120%+ → 200%) and 50% relative TSR vs S&P SmallCap 600 Commercial Bank Index (25th percentile → 50%; 50th → 100%; 75th+ → 200%), with a TSR governor capping payout at 100% if absolute TSR is negative .
• Grant timing controls and blackout practices are defined; standard grant dates occur on February 15, May 15, August 15, and November 15, subject to blackout/exceptions .

Equity Ownership & Alignment

• Stock ownership guidelines: CEO must hold 50% of net-after-tax vested shares until the value equals 4x base salary; Executive Vice Presidents and Executive Committee members must hold 50% of net-after-tax vested shares until the value equals 1.5x base salary, with a 5-year compliance window and 100% post-window holding of net shares until compliant .
• Hedging and pledging: Directors and employees (including executive officers) are prohibited from hedging CPF stock and from pledging/margin transactions without prior consent of the Legal Department, reinforced by insider trading blackout policies .
• Clawbacks: CPF maintains NYSE-compliant clawback policies covering incentive compensation in the event of restatements; the plan also permits cancellation/recovery if awards are based on materially inaccurate information or encourage excessive risk .
• Beneficial ownership reporting: No delinquent Section 16(a) filings in 2024; security ownership tables include Mesick within the group total, but his individual share count is not itemized in the proxy .

Employment Terms

• Employment agreements: CPF discloses that its current NEOs have no employment agreements and are employed at will; executives’ compensation is governed by Board/Committee policies and the Stock Compensation Plan .
• Change-in-control (CIC): Awards accelerate only on a double trigger—CIC plus qualifying termination (without cause or for good reason); PSUs vest at target on acceleration; the plan prohibits golden parachute payments and repricing without shareholder approval .
• Grant guidelines: Timing and blackout controls around material nonpublic information and SEC filings are enforced; no options/awards are granted around earnings releases or during blackouts .

Performance & Track Record

Company performance context relevant to CRO oversight and pay-for-performance alignment:

TSR and PVP context:

Additional highlights:

• Strong asset quality in 2024: NPAs at 0.15% of total assets; criticized assets fell to $32.8 million from $50.0 million; provision for credit losses decreased to $9.8 million (from $15.7 million in 2023) .
• Capital actions: maintained $0.26 quarterly dividend in 2024; Q3 2025 raised dividend to $0.28 and repurchased shares (78K in Q3 2025; 259K YTD), reflecting capital strength and discipline .
• CPF’s capital philosophy targets CET1 11–12% and TCE 7.5–8.5%; TSR outperformed local and national peers over multi-year horizons in investor materials .

Compensation Structure Analysis

• Year-over-year changes emphasize competitive benchmarking in Hawaii’s hyper-competitive labor market; CPF uses modest base salary moves and places significant weight on variable pay via AIP and LTI to balance short-term operational objectives with long-term shareholder value creation .
• Shift to RSUs/PSUs: The program relies on PSUs tied to ROE and rTSR plus time-based RSUs, reducing reliance on stock options; repricing is prohibited without shareholder approval .
• At-risk pay and risk controls: The Compensation Committee adopted an Incentive Compensation Risk Assessment Policy in July 2024; annual reviews confirm plans do not encourage excessive risk-taking and support safety and soundness .
• Say-on-Pay support: Approximately 98% of votes cast supported NEO pay in 2024, indicating strong shareholder alignment .

Risk Indicators & Red Flags

• Proactive mitigants: Hedging prohibited; pledging restricted; clawbacks in place; golden parachute payments prohibited; repricing barred without shareholder approval; robust blackout/trading controls .
• Governance and independence: Compensation Committee composed solely of independent directors; uses independent consultants (Pay Governance) and legal advisor (Manatt) to strengthen objectivity and compliance .
• Section 16 compliance: No delinquent filings in 2024 .
• Related party transactions: Board oversight under Audit Committee policy; none material to impair independence; disclosures detail ordinary course arrangements with immaterial impact thresholds .

Equity Ownership & Vesting Schedules and Insider Selling Pressure

• Standard grant cadence and vesting: Annual LTI grants typically made on February 15; RSUs vest in equal annual tranches over three years; PSUs cliff-vest at end of 3-year performance periods. These calendars can create concentrated vesting and potential sale events post-blackout each February/August/November, subject to insider trading policy and personal diversification needs .
• Ownership guidelines require sustained net share retention until multiples are met, limiting near-term selling pressure for executives below guideline thresholds (EVP multiple 1.5x base) .

Compensation Peer Group (Benchmarking, Pay Inflation Risk)

• CPF’s 2024 peer group includes regional banks (assets $3–$20 billion), with preference for Hawaii/West Coast comparables; CPF ranked 38th percentile by assets. CEO’s 2024 target compensation ranked at the 24th percentile for salary, 40th percentile for target total cash, and 41st percentile for target total direct compensation versus peer markets; local ranks were lower, underscoring retention risk in Hawaii’s market .

Say-on-Pay & Shareholder Feedback

• 2024 advisory vote: Approximately 98% voted in favor of NEO compensation; the Committee cites investor engagement and benchmarking as drivers of program design .

Expertise & Qualifications

• Technical expertise: Enterprise risk management, credit, treasury, and operational risk; regulatory relations; capital planning; ERM program leadership .
• Education: BBA (UH Manoa), MBA (UW–Madison), Advanced Risk Management (Wharton) .
• Community leadership: Multiple Hawaii nonprofit board roles and finance council service .

Work History & Career Trajectory

• Progression across risk, finance, and executive leadership culminating in CRO roles and interim CFO responsibilities; breadth across bank risk disciplines and executive management .

Compensation Committee Analysis

• Membership and independence: Committee members are independent directors; Chair Saedene K. Ota; engages Pay Governance (independent) and Manatt (legal) .
• Governance practices: Ownership guidelines, clawbacks, capped annual incentive payouts, objective long-term performance goals, annual say-on-pay vote; no tax gross-ups or guaranteed bonuses .

Investment Implications

• Alignment: CRO role aligns strongly with CPF’s AIP/LTI metrics (Net Income, Efficiency, ROE, rTSR) and robust clawback/ownership policies, reinforcing pay-for-performance and risk discipline .
• Retention and selling pressure: Ownership guidelines (EVP 1.5x base) and hedging/pledging prohibitions reduce short-term selling risk; standard February vesting windows and blackout policies moderate timing of any disposals .
• Performance context: Despite FY2024 GAAP earnings pressure from portfolio repositioning and strategic expenses, adjusted metrics improved; AIP adjustments reflect Committee judgment to isolate non-recurring items, while longer-term LTI metrics (ROE, rTSR) create multi-year alignment—supportive of CRO-driven risk/return optimization .
• Governance strength: High say-on-pay support, independent committee infrastructure, and explicit risk assessment policies indicate lower governance risk and credible compensation oversight .