Douglas Krause
EAST WEST BANCORPAbout Douglas Krause
Douglas P. Krause is Vice Chairman and Chief Corporate Officer of East West Bancorp (EWBC). He is a long‑tenured executive with an employment agreement originally executed in 1999 and amended on March 3, 2025 to run through March 3, 2028 . Krause previously served as Executive Vice President, General Counsel and Corporate Secretary, with “Esq.” designation appearing in multiple SEC filings, evidencing his legal credentials . Company performance under the current executive team includes ROA of 1.60% and ROE of 15.93% in 2024, and a 3‑year TSR of 31.97% to 12/31/2024; in 2023, ROA was 1.71%, ROE 17.91%, and 3‑year TSR 54% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| East West Bancorp, Inc. | Vice Chairman & Chief Corporate Officer | 2024–2025 | Led disciplined credit culture; enhanced loan monitoring and MIS; all distressed asset metrics below peer bank averages in 2024 . |
| East West Bancorp, Inc. | EVP, General Counsel & Corporate Secretary (Esq.) | Documented 2015 and 2019 | Signed and oversaw SEC filings (S‑8, 8‑K), supporting legal, governance and disclosure compliance . |
| East West Bancorp, Inc. | Executive (employment agreement) | 1999; amended 2025 (term to 2028) | Long-term retention framework and severance economics established via employment agreement . |
Fixed Compensation
Multi-year compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 582,792 | 629,597 | 653,021 |
| Bonus ($) | 100,000 (one-time) | – | – |
| Stock Awards ($) | 758,090 | 897,958 | 891,851 |
| Non‑Equity Incentive ($) | 934,584 | 812,690 | 939,007 |
| All Other Compensation ($) | 50,118 | 37,530 | 43,081 |
| Total ($) | 2,425,584 | 2,377,775 | 2,526,960 |
Base salary changes:
| Metric | FY 2023 | FY 2024 | % Change |
|---|---|---|---|
| Base Salary ($000s) | 636.9 | 656.0 | +3.0% |
Notes: 2024 “All Other” includes $15,525 401(k) and $27,556 vacation cash‑out .
Performance Compensation
Annual cash incentive plan (2024 structure and outcome):
| Executive | Target Bonus (% of Salary) | Corporate Weights (Financial/Strategic) | Individual Weight | 2024 Corporate Payout (% of Target) | 2024 Individual Payout (% of Target) | 2024 Total Payout (% of Target) |
|---|---|---|---|---|---|---|
| Douglas P. Krause | 100% | 45% / 20% | 35% | 168% (175% financial; 150% strategic) | 97% | 143% |
Financial/strategic goal framework and targets (2024):
- Financial metrics (70% of corporate): Operating EPS target $7.50; PTPP income target $1,616 million; average total loans growth target $1,250 million (2.5%); average total deposits growth target $2,000 million (3.6%); year‑end criticized loans ratio target 3.38% .
- Strategic metrics (30% of corporate): Back to Basics, Deepen Customer Relationships, Strategic Growth, Talent; Committee assessed strategic achievements at 150% in aggregate (component weights 50%/15%/15%/20%) .
Long-term incentives (PSUs/RSUs design and 2024 grants):
| Metric | Design |
|---|---|
| PSU metric weights | ROA 37.5%; ROE 37.5%; TSR 25% vs BKX peers |
| Payout curve | 30th percentile = 50%; 50th = 100%; ≥80th = 200% (linear interpolation) |
| Vesting | Cliff vest 3 years from grant; accrual of dividends to vest date |
Award detail for Krause:
| Grant | Target Units | Additional RSUs | Vest Date |
|---|---|---|---|
| 2024 PSU | 11,084 | 28 (Spirit of Ownership) | Mar 5, 2027 (PSU) / Feb 12, 2027 (RSU) |
| 2023 PSU | 11,210 | 29 (Spirit of Ownership) | Mar 1, 2026 (PSU) / Jan 23, 2026 (RSU) |
| 2022 PSU | 16,760 (unvested at 12/31/2024) | 23 (Spirit of Ownership from 2022) | Mar 4, 2025 (PSU) / Feb 1, 2025 (RSU) |
Earned PSU rates (company‑level results vs BKX peers):
| Year (Performance Period) | PSU Earned (% of Target) |
|---|---|
| 2022 | 150.0% (TSR 22nd percentile; ROA 98th; ROE 98th) |
| 2023 | 187.7% (TSR 65th; ROA 100th; ROE 100th) |
| 2024 | 180.4% (TSR 57th; ROA 100th; ROE 91st) |
Equity Ownership & Alignment
Beneficial ownership:
| Date | Shares Beneficially Owned | % of Class |
|---|---|---|
| April 1, 2024 | 92,055 | <1% |
| April 3, 2025 | 82,832 | <1% |
Outstanding equity awards (as of 12/31/2024):
| Grant Date | Unvested RSUs/PSUs (#) | Market Value ($) | Unearned (Max) Units (#) | Max Payout Value ($) |
|---|---|---|---|---|
| 02/01/2022 (RSU) | 23 | 2,202 | – | – |
| 03/04/2022 (PSU) | 16,760 | 1,604,938 | – | – |
| 01/23/2023 (RSU) | 29 | 2,777 | – | – |
| 03/01/2023 (PSU) | 13,755 | 1,317,179 | 7,474 | 715,710 |
| 02/12/2024 (RSU) | 28 | 2,681 | – | – |
| 03/05/2024 (PSU) | 6,666 | 638,336 | 14,779 | 1,415,237 |
Alignment policies:
- Stock ownership guidelines: NEOs ≥1x base salary; all NEOs met 2024 guidelines .
- Holding requirement: NEOs must hold ≥51% of net shares from option exercises and RSU vesting until retirement .
- No hedging or pledging: Company policy prohibits hedging, pledging, short selling, and derivative trades in EWBC stock .
- Options outstanding: None for NEOs at 12/31/2024 and 12/31/2023 .
Insider reporting:
- Section 16(a): Company disclosed one late filing in 2023 for a director (Alvarez); no Krause delinquencies noted .
Employment Terms
Key provisions (Krause Employment Agreement):
- Term: Initially 1999; amended March 3, 2025 to terminate March 3, 2028 .
- Severance (no‑cause or qualifying resignation): Greater of remaining contract payments/benefits or 3× current base salary plus 3× prior year’s bonus, lump sum; hypothetical payment $4,898,953 if terminated on 12/31/2024 .
- Equity treatment: On such termination, all unvested RSUs become fully vested .
- Change‑of‑control: No separate CIC payments or early vesting; no CIC provisions in Krause’s contract .
- Vacation: Four weeks paid per year .
- Death benefit (SERP insurance): $7,740,000 for Krause’s beneficiaries; SERP otherwise not currently applicable to NEOs .
Company‑wide recovery and trading policies:
- Clawback policy adopted in 2023 per Nasdaq/Dodd‑Frank; recovers incentive comp based on restated results .
- Insider trading policy bars speculative transactions and pledging .
Investment Implications
- Pay-for-performance alignment: High mix of at‑risk compensation (100% PSUs for LTI), with PSU metrics tied to ROA/ROE/TSR versus BKX peers; recent PSU earn‑outs were strong (180–188% for 2023–2024 periods), reflecting above‑peer profitability and TSR, which aligns Krause’s realized pay with shareholder returns .
- Retention risk: Krause’s severance at 3× salary+bonus and equity acceleration on certain terminations create a robust retention framework; lack of CIC payouts reduces windfall risk in a sale scenario .
- Selling pressure: Multiple cliff‑vesting RSU/PSU tranches (2025–2027) imply periodic tax‑related share withholding; policy requiring retention of ≥51% of net vested shares mitigates alignment risk .
- Governance signals: No hedging/pledging, clawback adoption, and strong say‑on‑pay outcomes (98.7% approval in 2024; 96.4% in 2023) indicate investor support and disciplined compensation governance .
- Execution track record: 2024 credit metrics below peer averages and emphasis on risk management suggest disciplined underwriting under Krause’s oversight, supporting durability of returns in a regional bank context .