Ari Kornhaber
About Ari Kornhaber
Executive Vice President, Head of Corporate Development at Esquire Financial Holdings (ESQ). Age 53 as of April 1, 2025; named EVP, Head of Corporate Development effective October 2020; previously EVP and Director of Sales (2013–2020). Former trial lawyer and founder/senior officer at litigation-finance businesses serving lawyers and plaintiffs, now leads ESQ’s business development and national litigation vertical, including branding, digital marketing, BDO team management, and extensive industry speaking/association engagement . Company performance context: 2024 ROAA 2.57%, ROE 20.14%, NIM 6.06%, noninterest income $24.9M (20% of total revenue); total assets $1.89B, loans $1.40B, deposits $1.64B; litigation vertical core to deposits, with 60% in longer-duration escrow/trust accounts .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Esquire Financial Holdings / Esquire Bank | EVP, Head of Corporate Development | Oct 2020–Present | Leads strategy and growth of national litigation vertical; brand/digital content, association partnerships, BDO management, key client relationships, extensive travel and industry thought leadership . |
| Esquire Financial Holdings / Esquire Bank | EVP, Director of Sales | 2013–2020 | Built and scaled the sales engine targeting litigation law firms nationwide . |
| Prior (Legal practice) | Trial Lawyer | N/A | Represented plaintiffs in personal injury, medical malpractice, and mass torts—deep domain expertise now leveraged for ESQ’s litigation banking model . |
| Prior (Financial services) | Founder & Senior Officer (litigation financing companies) | N/A | Founded and operated litigation-finance businesses serving lawyers, firms, and clients—directly relevant to ESQ’s core vertical . |
External Roles
| Organization/Activity | Role | Years | Strategic Impact |
|---|---|---|---|
| State/national trial lawyer associations; webinars/podcasts | Keynote speaker/presenter | Ongoing | Enhances ESQ brand, lead generation, and relationship depth in litigation vertical . |
| Litigation finance businesses (prior) | Founder/Senior Officer | N/A | Industry relationships and structuring expertise carried into ESQ’s growth strategy . |
Fixed Compensation
| Year | Base Salary ($) | All Other Compensation ($) | Notes |
|---|---|---|---|
| 2024 | 600,000 | 91,853 | Paid under AIP and benefits/perqs; perqs include medical, insurance, car allowance, etc. . |
| 2023 | 575,000 | 68,716 | — |
| 2025 (contracted) | 625,000 (base rate) | — | Employment agreement sets base for 2025; reviewed annually, cannot be decreased . |
Performance Compensation
Annual Incentive Plan (AIP) – Design and Payouts (2024)
- Target bonus: 90% of base salary; scorecard: 75% financials + 25% strategic; payout range 0–150% of target; 2024 certified payout at 121% .
- 2024 AIP payout for Kornhaber: $654,000 on $540,000 target (121% of target) .
| Metric | Weight | Threshold | Target | Maximum | Actual | Metric Achievement | Weighted Achievement |
|---|---|---|---|---|---|---|---|
| Return on Avg Assets (ROAA) | 18.75% | 2.21% | 2.45% | 2.70% | 2.57% | 124.5% | 23% |
| Diluted EPS | 18.75% | $4.70 | $4.95 | $5.20 | $5.14 | 138.4% | 26% |
| Non-Performing Assets / Total Assets | 18.75% | 0.90% | 0.75% | 0.60% | 0.58% | 150.0% | 28% |
| Supervisory Rating | 18.75% | 3 | 2 | 1 | 2 | 100.0% | 19% |
| Strategic Goals | 25.00% | — | — | — | 100.0% | 100.0% | 25% |
| Total | 100% | — | — | — | — | — | 121% |
| Executive | 2024 Base Salary ($) | Target Bonus (% Base) | Target Bonus ($) | Actual Payout (% Target) | Actual Payout ($) |
|---|---|---|---|---|---|
| A. P. Kornhaber | 600,000 | 90.0% | 540,000 | 121% | 654,000 |
Long-Term Incentive Plan (LTIP) – Structure and Recent Grants
| Element | Weighting | Metrics | Performance Period | Vesting | Grant Timing |
|---|---|---|---|---|---|
| Performance Share Units (PSUs) | 50% | ROAA and Diluted EPS growth | 2-year performance period | Cliff vest at 3 years; 0–150% payout based on certified results | Shifted to January following the performance year (granted Jan 2025 for 2024 performance) |
| Restricted Stock Awards (RSAs) | 50% | Time-based | — | 5-year vesting: one-third vests after years 3, 4, and 5 | January cycle |
- 1Q25 equity granted for 2024 performance: Kornhaber $953,352 (mix of RSAs/PSUs under new LTIP) .
- 2024 Summary Compensation Table excludes Jan-2025 LTIP timing; pro forma 2024 total including 1Q25 awards would be $2,299,205 for Kornhaber .
Multi-Year Compensation Summary
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 600,000 | — | — (LTIP shifted to Jan-25) | 654,000 | 91,853 | 1,345,853 |
| 2023 | 575,000 | 650,000 | 724,800 | — | 68,716 | 2,018,516 |
| 2024 (incl. 1Q25 grants, pro forma) | — | — | — | — | — | 2,299,205 (incl. $953,352 RS/PSUs) |
Equity Ownership & Alignment
- Beneficial ownership: 145,216 shares (1.7% of outstanding) as of March 27, 2025; includes 64,995 unvested restricted stock and 18,625 options currently exercisable; no shares pledged as collateral .
- Anti-hedging: Company prohibits hedging transactions for officers/directors .
- Clawback: Dodd-Frank-compliant clawback policy adopted; applies to erroneously awarded incentive compensation upon restatement (3-year lookback) .
| Item | Detail |
|---|---|
| Total beneficial ownership | 145,216 shares; 1.7% of common shares outstanding . |
| Unvested RSAs | 64,995 shares . |
| Options (exercisable) | 18,625 shares; strike $12.50; expirations 2026 . |
| Pledging | None (no shares pledged by any director/officer) . |
| Anti-hedging | Hedging/derivative transactions designed to offset declines are prohibited . |
| Clawback | Policy in place per SEC/Nasdaq rules; incorporated in 10-K exhibits . |
Selected Outstanding Equity Awards (as of Dec 31, 2024)
| Award Type | Grant Date | Shares Unvested | Vesting Schedule (start) | Market Value Basis |
|---|---|---|---|---|
| Restricted Stock | 12/19/2019 | 5,417 | 1/3 annually commencing 12/19/2023 | FMV $79.50 at 12/31/2024 |
| Restricted Stock | 12/16/2020 | 11,334 | 1/3 annually commencing 12/16/2024 | FMV $79.50 at 12/31/2024 |
| Restricted Stock | 12/9/2021 | 15,225 | 1/3 annually commencing 12/9/2025 | FMV $79.50 at 12/31/2024 |
| Restricted Stock | 12/19/2022 | 12,500 | 1/3 annually commencing 12/19/2026 | FMV $79.50 at 12/31/2024 |
| Restricted Stock | 12/15/2023 | 15,000 | 1/3 annually commencing 12/15/2027 | FMV $79.50 at 12/31/2024 |
| Stock Options | 5/2/2016 | 7,500 (exercisable) | Exercise price $12.50; expires 5/2/2026 | FMV reference $79.50 at 12/31/2024 |
| Stock Options | 9/1/2016 | 29,125 (exercisable) | Exercise price $12.50; expires 9/1/2026 | FMV reference $79.50 at 12/31/2024 |
Vesting cadence concentration: Legacy RS awards vest in December each year (starting 2023 onward by grant), and new RSAs under 2024 LTIP vest 1/3 in years 3–5; PSUs cliff vest at 3 years—creating potential periodic liquidity needs around vesting (e.g., tax withholdings) but no pledging or hedging permitted .
Employment Terms
| Term | Detail |
|---|---|
| Agreement | Employment agreement dated Oct 1, 2015 (initial 2-year term), with daily automatic extensions unless notice; upon non-extension, expires 24 months from notice . |
| 2025 Base Salary | $625,000; annually reviewable, not reducible . |
| Equity minimums | If equity awards are granted company-wide in a year, Kornhaber receives at least 50% of the total number granted to the CEO (by award type) . |
| Benefits | Monthly auto allowance; company-paid life insurance equal to 2x average salary+bonus (prior two years) . |
| Severance (no CoC) | If terminated without cause or resigns for “good reason”: cash severance equals greater of remaining term base salary or 100% of base salary, plus prior-year bonus multiplied by greater of remaining term (years) or one; 18 months continued medical/dental and lump-sum for post-COBRA coverage and life insurance conversion costs . |
| Change-in-Control | If after a CoC: (i) involuntary termination (non-cause) within 24 months, (ii) resignation for good reason within 24 months, or (iii) termination by executive for any reason within 12 months → cash payment equal to 2x average annual compensation (5-year lookback), plus continued healthcare and lump-sum for post-COBRA coverage and life insurance conversion costs; excise tax gross-up provided if parachute excise taxes apply . |
| Restrictive covenants | 1-year non-compete, non-solicit, confidentiality, non-disparagement (except disability or CoC scenarios as specified) . |
Performance & Track Record (Company context during tenure)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Total Shareholder Return (initial $100) | $227 | $264 | $257 |
| Net Income ($) | 28,518,378 | 41,010,649 | 43,657,527 |
| ROAA / ROE / NIM | — | — | 2.57% / 20.14% / 6.06% |
| Noninterest income ($) | — | — | 24,900,000 (20% of total revenue) |
Strategic execution relevance: ESQ’s litigation vertical drives strong core deposits (60% in escrow/trust settlement accounts) and attractive loan yields; Kornhaber directly leads business development and branding in this vertical, including association partnerships and national market coverage .
Compensation Structure Analysis
- Mix shift and risk: 2024 LTIP moved to a balanced 50% PSU / 50% RSA design with two-year PSU performance period and 3-year vest, aligning pay with ROAA and EPS growth; RSAs vest back-weighted (years 3–5), supporting retention but lowering risk vs options; options not granted to NEOs in 2024 and legacy options remain outstanding from 2016 grants .
- Pay-for-performance: 2024 AIP linked to ROAA, EPS, asset quality (NPA/TA), supervisory rating, and strategic goals; payout at 121% indicates above-target results on core metrics .
- Peer benchmarking: Compensation Committee uses a defined peer group (banks and payment companies) and FW Cook as independent consultant; no commitment to fixed percentile targeting .
- Governance features: Anti-hedging policy and clawback in place; however, excise tax gross-up on CoC payments is shareholder-unfriendly; CoC provision allows payment upon termination “for any reason” within 12 months post-CoC (single-trigger feature), heightening change-in-control cost risk .
Risk Indicators & Red Flags
- Excise tax gross-up and single-trigger eligible CoC payout (termination for any reason within 12 months) increase parachute cost risk and may misalign incentives in a sale scenario .
- Section 16 compliance: one late Form 5 filing attributed to Kornhaber in 2024 (isolated instance disclosed) .
- No pledging by executives; anti-hedging policy in force, reducing alignment risk from hedging/pledging .
Equity Ownership & Vesting Pressure Indicators
- Meaningful unvested restricted stock with December-based vest schedules across 2019–2023 grants; new 2024 LTIP grants (Jan 2025) add PSUs/RSAs with 3–5 year vesting; legacy options (2016) expire in 2026 with $12.50 strike vs $79.50 year-end 2024 FMV (in-the-money), potentially influencing exercise timing pre-expiry .
- Anti-hedging and no pledging reduce risk of derivative hedges/pledges; potential periodic selling could arise around vesting tax events (general consideration; no specific Form 4s cited here) .
Compensation Peer Group
Peer group used for 2024 decisions: BM Technologies, Cantaloupe, Cass Information Systems, Coastal Financial, Community West Bancshares, First Business Financial Services, Medallion Financial, Meridian, Metropolitan Bank Holding, Northeast Bank, Provident Bancorp, Richmond Mutual Bancorporation .
Say-on-Pay & Shareholder Feedback
- 2025 proxy schedules advisory Say-on-Pay; no historical vote outcomes disclosed in the document reviewed .
Investment Implications
- Alignment/retention: Back-weighted RSA vesting and PSU cliff vesting support retention; anti-hedging/no-pledging and clawback enhance alignment. However, excise tax gross-up and single-trigger pathway post-CoC are governance drawbacks that could increase transaction costs and misalign incentives in a sale process .
- Execution leverage: Kornhaber’s domain expertise and industry platform (associations, thought leadership) underpin ESQ’s differentiated litigation vertical, a core source of low-cost deposits and loan growth—favorable for sustained high ROAA/ROE if maintained .
- Trading/flow signals: December-centric vesting cadence and 2026 option expirations may create episodic selling/cover activity, though company policies reduce risk of hedging/pledging-driven pressure; monitor forthcoming Form 4s around vest dates and potential option exercises ahead of 2026 expirations .
- Pay-for-performance: AIP and PSU metrics tied to ROAA/EPS and asset quality create direct linkage to value drivers; 2024 payout at 121% aligns with strong company performance metrics (ROAA 2.57%, EPS $5.14) .
Notes and sources: All data from ESQ 2025 DEF 14A (filed April 30, 2025) and 2024 10-K (filed March 17, 2025), as cited inline .