Joseph F. Burns
About Joseph F. Burns
Joseph F. Burns is Executive Vice President and Chief Lending Officer at Hanover Bancorp (HNVR), bringing over thirty-five years of banking experience; prior to Hanover he spent more than fifteen years at Valley Bank in several management capacities, last serving as First Senior Vice President and Regional President of New York State Commercial Banking . He commenced employment at Hanover on November 16, 2023, and is one of the company’s Named Executive Officers (NEOs) for 2024 . Company performance in 2024 included net income of $12.3 million or $1.66 per diluted share, fourth quarter net income of $3.9 million, a sequential net interest margin increase of 16 bps, C&I loans growth from $107.9 million to $168.9 million year-over-year, and non-performing loans of $16.4 million (0.82% of total loans) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Valley Bank | First Senior Vice President and Regional President, NY State Commercial Banking | Over 15 years | Held several management capacities culminating in regional leadership of New York commercial banking |
Fixed Compensation
| Metric ($) | 2023 | 2024 |
|---|---|---|
| Salary | 40,393 | 395,000 |
| Non-Equity Incentive (cash bonus paid) | — | 100,000 |
| Stock Awards (grant-date fair value) | 141,600 | — |
| All Other Compensation (401(k) match, auto allowance, life insurance) | 800 | 22,969 |
| Total | 182,793 | 517,969 |
| Base Salary Progression ($) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Burns Base Salary | 395,000 | 395,000 | 406,850 (3.0% increase) |
Notes:
- “All other compensation” comprises 401(k) matching contributions, automobile allowance, and life insurance premiums .
- The Compensation Committee approved Burns’s 2024 annual incentive award at $138,378 versus a target of $138,250; these awards are determined on a calendar-year basis under the Executive Annual Incentive Plan and may be approved after the fiscal year-end . The Summary Compensation Table shows $100,000 in non-equity incentive plan compensation paid for 2024 .
Performance Compensation
| Component | Metric | Weighting | Target | Actual | Payout Mechanics | Vesting |
|---|---|---|---|---|---|---|
| Executive Annual Incentive Plan (cash) | Pre-tax, pre-provision net revenue; pre-tax, pre-provision ROAA; net charge-off ratio; plus non-financial strategic goals | Corporate goals = 25%; other metric weights not disclosed | Burns target: $138,250 | Burns actual: $138,378 | Each metric pays 50% of target at threshold to 150% of target at stretch; no payout if below threshold | Cash incentive; paid per plan (no equity vesting) |
| Long-Term Incentive – TVUs (time-vested RSUs) | RSUs granted evenly with PVUs | N/A | 2,253 units (2024 grant) | N/A | Time-based vesting | Five-year vesting requirement |
| Long-Term Incentive – PVUs (performance-vested RSUs) | 50% Core ROA vs industry index; 50% tangible book value growth vs industry index | 50%/50% weighting across metrics | 2,253 units (target, 2024 grant) | Earned based on 3-year performance (Jan 1, 2025–Dec 31, 2027) | 0%–150% of target based on performance | Vests following performance period |
Program context and company payout tone:
- Hanover’s financial performance in 2024 resulted in an aggregate payout slightly below target under the plan .
- Corporate strategic goals (25% weighting) documented for 2024 included core systems conversion groundwork, deposit generation team strengthening, opening a new Suffolk County office, C&I loan growth and deposit generation, and brand enhancement/CRA commitments .
Equity Ownership & Alignment
| Metric | As of | Value |
|---|---|---|
| Beneficial ownership (common shares) | March 11, 2025 | 9,677 shares; 0.13% of class |
| Unvested/unearned equity awards outstanding | FY-end 2024 | 6,400 shares; market/payout value $147,552 |
| Options (exercisable/unexercisable) | FY-end 2024 | None disclosed for Burns |
Alignment policies and practices:
- Insider trading policy prohibits hedging (puts, calls, options, derivatives, forward sale contracts) and prohibits pledging of Hanover shares by executive officers and directors .
- Equity grants are evenly split between TVUs and PVUs; TVUs require five-year vesting and PVUs are earned over a 3-year performance period aligned to Core ROA and tangible book value growth versus industry indices .
Employment Terms
| Agreement | Multiple / Benefits | Conditions / Triggers | Other Provisions | Illustrative Net Payment |
|---|---|---|---|---|
| Change-in-Control Agreement (Burns) | Lump sum equal to 1x current base salary + highest cash bonus paid over past 3 years | Upon “change of control” as defined in agreement | Non-solicitation and confidentiality; benefits subject to reduction to avoid excess parachute payment under IRC §280G; subject to IRC §409A compliance | If a change in control occurred as of Dec 31, 2024 at 120% of tangible book value ($28.63), estimated net payment ≈ $495,000 after required reductions |
Governance safeguards:
- Company has adopted a Nasdaq-compliant clawback policy requiring return of incentive compensation in the event of a financial restatement .
Investment Implications
- Pay-for-performance structure: Annual incentives are driven by pre-tax, pre-provision outcomes and credit quality metrics, with a 25% weighting on strategic goals; payouts range 50%–150% of target, and Burns’s 2024 award was essentially at target ($138,378 vs $138,250), indicating alignment but limited upside capture for the year’s performance mix .
- Equity alignment and selling pressure: Burns held 9,677 shares (0.13% of common), with 6,400 unearned shares outstanding; TVUs vest over five years and PVUs are contingent on 2025–2027 performance (0%–150%), which pushes potential selling pressure into mid/late 2020s rather than near-term .
- Risk controls: Hedging and pledging are prohibited for executives, mitigating misalignment or forced selling via collateralization; clawback policy for restatements adds enforcement discipline to incentive outcomes .
- Change-in-control economics: Burns’s CIC terms (1x salary + highest bonus with 280G cutback) are modest compared to multi-turn severance constructs, limiting windfall risk while providing baseline protection; the company estimates ≈$495k net at the stated book value-based scenario .
- Company execution backdrop: 2024 outcomes—net income $12.3M, NIM up 16 bps sequentially, and strong C&I growth—provide a constructive backdrop for Burns’s lending leadership, with incentives explicitly tied to pre-provision profitability and credit quality metrics .