Ted A. Leech

About Ted A. Leech

Independent Board Chair of FS Bancorp and 1st Security Bank; Audit Committee Chair and Compensation Committee member. Age 77 (as of Dec 31, 2024); first elected to the board in 2005; current term to expire in 2028 (assuming reelection) . Retired Univar executive: VP Business Development (Jan 2003–Feb 2005) and prior Senior VP Administration at Univar USA; designated audit committee “financial expert” by the board . The board has determined he is independent under Nasdaq rules .

Past Roles

External Roles

Board Governance

• Board leadership and independence: Leech serves as independent Board Chair; FS Bancorp separates CEO and Chair roles and has maintained an independent Board Chair since 2011 . The board is 85.7% independent; Leech is independent .
• Committee assignments (all independent-only committees): Audit (Chair), Compensation (Member). Governance, Nominating and Culture: not a member .
• Committee activity and financial expertise: Audit Committee met 9x in 2024; Compensation Committee met 10x; Leech is designated an SEC “audit committee financial expert” .
• Attendance: Boards (FS Bancorp and 1st Security Bank) each met 9x in 2024; no director attended fewer than 75% of aggregate board and committee meetings .
• Executive sessions and policies: Independent directors meet in regular executive sessions; policies restrict hedging and pledging, with no exceptions noted as of the proxy; director stock ownership policy in place .
• 2025 election results (signal of support): Leech was re-elected with 4,474,553 “For” (77.89% of shares present), 1,270,111 “Withheld,” and 1,041,400 broker non-votes .

Fixed Compensation

• Structure (paid for service on 1st Security Bank’s Board; no extra pay for FS Bancorp board service):
  • Monthly retainer: $3,850 for non-employee directors; $4,950 for Board Chair.
  • Committee Chair retainer: $3,960 annually.
  • Meeting fees: $825 per board meeting; $550 per committee meeting.
  • Travel/education expenses reimbursed .

• 2024 Director Compensation (Leech): | Component | Amount (USD) | |---|---| | Fees earned/paid in cash | $85,085 | | Stock awards (grant date fair value) | $31,485 | | Option awards (grant date fair value) | $16,020 | | All other compensation | $5,314 | | Total | $137,904 |

• Year-over-year comparison: | Year | Fees Earned | Stock Awards | Option Awards | All Other | Total | |---|---:|---:|---:|---:|---:| | 2023 | $79,585 | $15,365 | $11,175 | $4,966 | $111,091 | | 2024 | $85,085 | $31,485 | $16,020 | $5,314 | $137,904 |

Observations: Cash, stock, and options all increased in 2024; equity mix rose via larger time-based RSU and option grants .

Performance Compensation

• Equity awards (director grants; time-based vesting):
  • 8/15/2024: 750 restricted shares; vest 8/15/2025 .
  • 8/15/2024: 1,500 stock options; exercise price $41.98; vest 8/15/2025 .
  • 2024 grant values (Leech): Stock awards $31,485; Options $16,020 .

• Outstanding director equity (12/31/2024): | Item | Quantity | |---|---:| | Restricted stock outstanding | 750 shares | | Stock options outstanding | 14,560 options |

• Change-in-control vesting provisions:
  • 2013 Plan: single-trigger acceleration upon an actual change in control (all unexercisable options become exercisable; all unvested restricted stock vests).
  • 2018 Plan: double-trigger acceleration—CIC plus involuntary separation (other than for cause) within 365 days, unless successor does not assume/replace awards (then vesting accelerates at CIC) .

• Clawback policy updated in 2023 to comply with SEC Rule 10D-1/Nasdaq 5608 (recovery of erroneously awarded incentive-based compensation) .

• Performance metrics tied to director compensation: none described for director equity awards (time-based vesting only) .

Other Directorships & Interlocks

• Other current public company boards: None disclosed in FS Bancorp proxy/bio for Leech .
• Compensation Committee interlocks: None—committee members (including Leech) were not officers/employees and had no relationships requiring disclosure .

Expertise & Qualifications

• Board-designated audit committee financial expert; deep finance, accounting, and HR experience from Univar leadership .
• Skills matrix flags his competencies in finance, leadership/team building, civic/community involvement; designated “financial expert” and financial services-related expertise .

Equity Ownership

• Beneficial ownership as of March 21, 2025 (record date; 7,756,000 shares outstanding): | Holder | Shares (incl. ESOP/RS/restricted) | Stock Options Exercisable ≤60 Days | Total Beneficially Owned | % Outstanding | |---|---:|---:|---:|---:| | Ted A. Leech | 77,815 | 13,060 | 90,875 | 1.2% |

• Director stock ownership guidelines: Minimum holding = 2x annual cash retainer (excl. committee fees); must retain 50% of net after-tax shares from option exercises/RSU vesting until compliant; compliance assessed annually .

• Compliance status: “Five of six” non-employee directors have met the guideline; the newest director has up to three years to comply .

• Anti-hedging/pledging: Hedging and pledging prohibited; no exceptions noted as of proxy date .

Say-on-Pay & Shareholder Feedback

• 2025 Say-on-Pay (advisory) results: For 5,121,671; Against 400,711; Abstain 222,282; Broker non-vote 1,041,400 .
• 2025 Say-on-Frequency: Shareholders favored annual vote—One Year 5,050,046; Two Years 30,059; Three Years 494,996; Abstain 169,563; Broker non-vote 1,041,400 .
• 2025 Director election outcome for Leech: 4,474,553 For (77.89% of shares present); 1,270,111 Withheld; 1,041,400 broker non-votes .

Related-Party Transactions and Controls

• Policy requires board or committee review/approval of related-party transactions; affected directors must abstain; only transactions in company’s best interests may be approved .
• Loans to directors/officers permitted on market terms; employee mortgage loan program terms described; 2024 table lists one loan to an EVP (not Leech) .
• No Leech-specific related-party transactions disclosed in 2024/2025 proxy .

Compensation Committee Oversight

• Compensation Committee members: Mansfield (Chair), Cofer-Wildsmith, Leech, Zavaglia; committee recommended inclusion of CD&A in proxy .
• Interlocks/insider participation: None disclosed for committee members .

Governance Assessment

• Strengths:

  • Independent Board Chair and Audit Chair with financial expert designation—enhances oversight of financial reporting and auditor independence .
  • Robust anti-hedging/pledging policy with no exceptions noted; director ownership guidelines align interests with shareholders .
  • Committee-only independent directors; active committees with clear charters and frequent meetings; no attendance concerns disclosed .
  • Say-on-Pay passed comfortably in 2025, and shareholders affirmed annual Say-on-Pay frequency .

• Watch items / potential red flags:

  • Director election support: 22.11% “withhold” on Leech’s 2025 re-election may signal some shareholder concern (board refreshment, tenure, or committee leadership concentration) .
  • Tenure and role concentration: Long tenure since 2005 and simultaneous service as Board Chair and Audit Committee Chair (common in some small-cap banks but can raise concentration-of-authority concerns among some investors) .
  • Annual meeting engagement: Proxy notes director annual meeting attendance; specifically identifies one director’s attendance in 2024, without detailing others, which some investors view as a soft engagement signal .

• No material conflicts disclosed:

  • No related-party transactions involving Leech disclosed; Compensation Committee interlocks: none .
  • Hedging/pledging prohibited; no exceptions noted .

Appendix: Committee Membership Snapshot (2024–2025)

Notes on Director Equity Detail (2024)

Sources: FS Bancorp 2025 DEF 14A (April 7, 2025) ; FS Bancorp 2024 DEF 14A (April 8, 2024) ; 8-K Item 5.07 Annual Meeting Results (May 29, 2025) . Additional company profile confirmations: FS Bancorp IR site (committee listings/roles) .