Ann Watson
About Ann Watson
Ann Watson (age 63) is an independent director of Heritage Financial Corporation, serving since 2012. She previously was Chief Operating Officer of Cascadia Capital (2015–2022) and Chief Financial Officer of Moss Adams (two years), with a 15-year leadership tenure at Russell Investments and seven years at Chemical Bank/Manufacturers Hanover in strategic planning, workouts, and credit analysis. She holds an MBA from Columbia University and a BA in Economics from Whitman College, and currently serves on the Whitman College Board of Trustees .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Cascadia Capital LLC | Chief Operating Officer | 2015–2022 | Senior operating leadership at an investment bank |
| Moss Adams LLP | Chief Financial Officer | Two years | Finance leadership at regional public accounting firm |
| Russell Investments | CHRO; Management Committee; Director, Corporate Finance; Russell Mellon Board Member (indexes oversight) | ~15 years | IT Steering Committee; Risk Management Committee; compensation and HR oversight; M&A experience |
| Chemical Bank/Manufacturers Hanover | Strategic planning, loan workouts, client relationship management, credit analysis | 7 years | Global roles spanning New York and abroad |
External Roles
| Organization | Role | Tenure/Notes |
|---|---|---|
| Whitman College | Board of Trustees | Current |
| Seattle Foundation | Board Chair and Trustee | Prior community leadership |
| Washington Economic Development Finance Authority | Board member | Prior role |
| Washington State China Relations Council | Executive Committee | Prior role |
Board Governance
- Independence: The Board determined all nine director nominees, including Watson, are independent .
- Committee assignments: Audit and Finance; Compensation; Corporate Governance and Nominating (no chair roles) .
- Attendance: Board held 10 regular meetings in 2024; independent directors met in executive session at each meeting and three times without the Board Chair. No director attended fewer than 75% of Board and committee meetings. All directors in office attended the 2024 annual meeting .
- Lead Independent Director: Brian S. Charneski; Board Chair is independent (Brian L. Vance) .
| Committee | Membership (Watson) | Chair Role | 2024 Meetings |
|---|---|---|---|
| Audit and Finance | Member | — | 9 |
| Compensation | Member | — | 5 |
| Corporate Governance & Nominating | Member | — | 8 |
Fixed Compensation
| Component | Amount ($) | Notes |
|---|---|---|
| Annual director cash retainer | 50,000 | Standard non-employee director retainer |
| Additional retainer for serving on >2 committees | 5,000 | Watson is the only director serving on more than two committees |
| Fees earned or paid in cash (2024 actual) | 53,750 | Reported for Watson |
| Meeting fees | 0 | No per-meeting fees are paid |
Performance Compensation
| Grant Date | RSUs (#) | Fair Value per Share ($) | Total Fair Value ($) | Vesting |
|---|---|---|---|---|
| June 18, 2024 | 2,928 | 17.08 | 50,010 | Vests May 1, 2025 |
- Dividend equivalents: During 2024, directors with vested RSUs earned $2,025 in cash dividend equivalents (program-level disclosure) .
- Anti-hedging and pledging: Company policy prohibits hedging and cautions against pledging; to the Company’s knowledge, no directors have pledged Company stock .
Company incentive metrics (NEO program, for pay-for-performance signal):
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | % of Target Achieved |
|---|---|---|---|---|---|---|
| Diluted EPS | 40% | 1.50 | 2.00 | 2.50 | 1.24 (adjusted to 1.80 for incentives) | 80% |
| Net Charge Offs/Average Loans | 20% | 0.11% | 0.06% | 0.01% | 0.06% | 100% |
| Overhead Ratio | 40% | 2.39% | 2.24% | 2.04% | 2.22% | 105% |
Say-on-pay signal: 98% approval at the 2024 annual meeting (supportive of pay practices) .
Other Directorships & Interlocks
| Company | Role | Notes |
|---|---|---|
| Public company boards (current) | None | “None of the nominees serve as a director of a public company board other than Heritage” |
- Interlocks/conflicts: No public company interlocks disclosed; risk of cross-director conflicts appears low based on disclosed roles .
Expertise & Qualifications
- Financial services and financial expertise; M&A; risk management; compensation and human resources leadership .
- Board skills matrix places Watson across C-Suite leadership, regulated industry, financial literacy, strategic planning, human capital management, enterprise risk management, and M&A .
Equity Ownership
| Item | Amount | Detail |
|---|---|---|
| Common shares owned | 20,975 | Includes 4,000 in IRA and 16,975 jointly with spouse |
| RSUs (unvested at 12/31/24) | 2,928 | Scheduled to vest May 1, 2025 |
| Total beneficial ownership | 23,903 | Shares + RSUs that vest within 60 days of 3/10/25 |
| Ownership as % of outstanding | <1% | Company “less than one percent” designation |
| Director stock ownership guideline | 3× annual cash retainer | All directors in compliance as of 12/31/24 |
| Hedging/pledging | Prohibited; none known | Insider Trading Policy; none known pledged |
Governance Assessment
-
Strengths
- Independent director with deep finance, operations, risk, and HR expertise; serves on Audit & Finance, Compensation, and Corporate Governance committees—high engagement footprint .
- Strong attendance culture (no director <75%); regular executive sessions; split Chair/CEO with Lead Independent Director—robust oversight structure .
- Ownership alignment via RSUs and director stock ownership guidelines; compliance affirmed; anti-hedging/pledging reduces misalignment risk .
- No other public company boards—low likelihood of public-company interlocks and external conflicts .
- Shareholder support for pay practices (98% say-on-pay) indicates investor confidence in compensation governance .
-
Watch items / potential risks
- Heavy committee workload (three committees) enhances influence but may raise overboarding/ bandwidth considerations; the Board mitigates through annual committee review and chair rotations .
- Related party lending exists at the program level ($6.5 million outstanding to directors/executive officers), though loans are on market terms and fully compliant with Regulation O; no Watson-specific transactions disclosed .
- Use of discretionary adjustments in incentive metrics (EPS adjusted for restructuring) supports fairness but requires ongoing transparency to avoid pay-for-performance dilution risk .
-
Net view: Watson’s multi-disciplinary finance/operations/risk/HR background and multi-committee engagement support board effectiveness and investor confidence, with limited conflict signals and strong alignment mechanisms in place .