Craig L. Montanaro
About Craig L. Montanaro
Craig L. Montanaro is President and Chief Executive Officer of Kearny Financial Corp. (KRNY) and Kearny Bank, serving as CEO since April 2011 and as a director since 2010; he previously served as President & COO (April 2010–April 2011), SVP & Director of Strategic Planning (2005–March 2010), and VP/Regional Branch Administrator (2003–2004) after joining via Kearny’s acquisition of West Essex Bank . He holds a B.S. in finance and marketing from Syracuse University, an MBA from Fairfield University (2000), and a Graduate Degree in banking from the National School of Banking; he is 58 years old as of June 30, 2025 . Compensation design ties annual incentives to PPNR per share and expense ratio, with long-term equity awards split 50/50 between performance-based and time-based RSUs; fiscal 2025 results delivered slightly above-target annual payouts, while PSUs hinge on three-year pre-tax, pre-provision EPS with a net charge-off gate . The Board has a separate Chairman (John J. Mazur, Jr.), mitigating CEO/Chair dual-role risk, though a family relationship exists: Craig is the son of director Leopold W. Montanaro, which is a governance consideration .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kearny Financial/Kearny Bank | President & CEO | Apr 2011–present | Led company execution; broad management, economic and regulatory expertise cited by board . |
| Kearny Financial/Kearny Bank | President & COO | Apr 2010–Apr 2011 | Senior leadership transition and operations oversight . |
| Kearny Financial/Kearny Bank | SVP & Director of Strategic Planning | 2005–Mar 2010 | Strategic planning and business development . |
| Kearny Financial/Kearny Bank | VP & Regional Branch Administrator | 2003–2004 | Branch network administration post acquisition integration . |
| West Essex Bank | SVP & COO | Pre-2003 (prior to acquisition) | Operated prior institution acquired by Kearny . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| KearnyBank Foundation | President & Director | Not disclosed | Community engagement and philanthropy alignment . |
| Chilton Hospital Foundation | Chairman | Not disclosed | Healthcare community support leadership . |
| Wood-Ridge Memorial Foundation | Trustee | Not disclosed | Local community support . |
| Junior Achievement of New Jersey | Director | Not disclosed | Educational outreach . |
| Spring Lake Hope Foundation | Director | Not disclosed | Community philanthropy . |
| New Jersey Bankers Business Services | Director | Not disclosed | Industry services oversight . |
| New Jersey Bankers Association | Chair | Not disclosed | State banking industry leadership . |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary ($) | 738,942 | 746,750 | 746,750 |
| All Other Compensation ($) | 59,194 | 65,573 | 80,669 |
| Total Compensation ($) | 1,743,845 | 1,396,533 | 1,348,839 |
Additional details:
- Current base salary (as of employment agreements section): $770,000 for fiscal 2026; Montanaro declined a base salary increase for fiscal 2025 .
Performance Compensation
Annual Incentive Structure and Outcomes (Fiscal 2025)
| Item | Value |
|---|---|
| Target opportunity (% of base) | 25.00% |
| Component weightings | Corporate 80%, Individual 20% |
| Corporate metrics | PPNR per share (70%), Non-interest expense ratio (30%) |
| PPNR/share target vs actual | $0.51 target; $0.53 actual; 104.91% earned |
| Expense ratio target vs actual | 1.55% target; 1.58% actual; 98.11% earned |
| Individual goals payout (CEO) | 5.00% of base (product/market and digital strategy) |
| Actual payout (CEO) | $195,264; 26.15% of base |
Gate conditions:
- Thresholds: NCOs below level; Net Income ≥75% of target; both achieved for fiscal 2025 .
Long-Term Equity Incentives (2021 Equity Incentive Plan)
| Grant | Type | Grant Date | Shares | Vesting/Performance | Notes |
|---|---|---|---|---|---|
| FY2025 award | Time-based RSUs | Aug 7, 2024 | 25,974 | 33% per year on Aug 7, 2025/2026/2027 | Paid in shares at vesting . |
| FY2025 award | Performance-based RSUs | Aug 7, 2024 | 25,974 | 3-year performance period; pre-tax, pre-provision EPS goals; NCOs ≤0.50% gate; 0–150% earnout | Determined at period end . |
| Stock awards grant-date fair value (total) | — | FY2025 | $324,156 | — | PSU max grant-date FV at 150%: $243,117 . |
Plan design highlights:
- 50% PSUs and 50% time-based RSUs for NEOs; emphasizes “at-risk” pay and multi-year performance alignment .
Equity Ownership & Alignment
Beneficial Ownership and Pledging
| Item | Amount |
|---|---|
| Total beneficial ownership | 1,063,544 shares |
| Ownership as % of outstanding | 1.63% |
| Options included in beneficial ownership | 540,000 shares |
| Shares held in 401(k) | 142,193 |
| ESOP shares | 65,097 |
| BEP shares | 25,518 |
| Child-held shares | 4,417 |
| Shares pledged as collateral | 8,748 (unchanged vs prior year) |
Policies and guidelines:
- Anti-hedging and anti-pledging policy (directors and executive officers); exceptions require board/Nominating and Corporate Governance Committee discretion .
- Insider trading policy requires pre-clearance and restricts trading during blackout periods .
- Stock ownership guidelines: CEO must hold shares equal to 3.0x base salary; NEOs 2.0x; Directors 3.0x cash retainer; NEOs and Directors comply .
Outstanding Equity and Vesting Supply (as of 6/30/2025; KRNY $6.46 close)
| Award | Shares | Market/Payout Value ($) | Vesting/Expiration |
|---|---|---|---|
| TBRSUs (2025 tranche) | 25,974 | 167,792 | 33% vest on Aug 7, 2025/2026/2027 |
| TBRSUs (prior tranche) | 16,698 | 107,869 | 33% vest Aug 7, 2025 & Aug 7, 2026 |
| TBRSUs (prior tranche) | 8,105 | 52,358 | 33% vest Aug 7, 2025 |
| PSUs (2025 tranche, target) | 25,974 | 167,792 | 3-year perf; EPS metric; NCO gate |
| PSUs (prior tranche, target) | 25,047 | 161,804 | 3-year perf |
| PSUs (prior tranche, target) | 24,317 | 157,088 | 3-year perf |
| Stock options (exercisable) | 540,000 @ $15.35 | — | Expires Dec 1, 2026 |
Note: As of June 30, 2025, options with $15.35 strike are out-of-the-money vs $6.46 close, reducing near-term exercise-driven selling pressure .
Deferred Compensation/SERP
| Plan | Executive Contributions (FY) | Company Contributions (FY) | Aggregate Gain/Loss (FY) | Aggregate Balance |
|---|---|---|---|---|
| Benefits Equalization Plan (ESOP-related) | — | $12,209 | $30,125 | $204,132 |
Employment Terms
| Term/Provision | Details |
|---|---|
| Employment agreements | Company and Bank agreements; three-year term for Montanaro (auto-renew annually to maintain three-year term, subject to board performance evaluation/approval) . |
| Current base salary | $770,000 (Company/Bank agreement); declined fiscal 2025 increase . |
| Severance (without cause) | Lump sum equal to base salary for remaining term; continued medical/dental for remaining term . |
| Severance (good reason resignation) | Lump sum equal to one year of base salary . |
| Change-in-control (double-trigger) | If CIC followed by qualifying termination within 24 months: 2.999x prior five-year average annual taxable compensation for Montanaro . |
| Medical reimbursement pre-Medicare | Reimbursement for coverage comparable to Bank plan from age 62 until Medicare eligibility . |
| Clawback/recoupment policy | In place; part of compensation governance practices . |
| Excise tax gross-ups | Not provided; “No excise tax gross-ups” among best practices . |
| Single-trigger CIC severance | Not provided; “No single trigger change in control severance” among best practices . |
Board Governance
- Board service: Director since 2010; current term to expire in 2027; age 58 .
- Chair structure: Board has an independent Chairman, John J. Mazur, Jr., separating CEO and Chair roles .
- Family relationship: Craig L. Montanaro is the son of director Leopold W. Montanaro, a governance consideration for independence .
- Say-on-Pay: October 17, 2024 advisory vote approved with 95.65% support; over 95% support in each of the last six years .
Compensation Peer Group (Benchmarking)
| Peer Companies |
|---|
| Amalgamated Financial Corp. |
| Columbia Financial, Inc. |
| ConnectOne Bancorp, Inc. |
| First Commonwealth Financial Corporation |
| Flushing Financial Corporation |
| Lakeland Bancorp, Inc. |
| Metropolitan Bank Holding Corp. |
| NBT Bancorp Inc. |
| Northfield Bancorp, Inc. |
| Northwest Bancshares, Inc. |
| OceanFirst Financial Corp. |
| Peapack-Gladstone Financial Corporation |
| Provident Financial Services, Inc. |
| Republic First Bancorp, Inc. |
| S&T Bancorp, Inc. |
| The First of Long Island Corporation |
| Tompkins Financial Corporation |
| TrustCo Bank Corp. NY |
| Univest Financial Corporation |
Equity Ownership & Alignment – Additional Signals
| Signal | Status |
|---|---|
| Stock ownership guideline (CEO) | 3.0x base salary; compliance affirmed . |
| Anti-hedging/pledging | Prohibited for directors/officers; exception noted; Montanaro has 8,748 shares pledged (unchanged) . |
| Insider pre-clearance/blackouts | Required . |
Performance Compensation – Detailed Payout Breakdown (Fiscal 2025)
| Component | Weighting | Target | Actual | Earned % | Payout Contribution |
|---|---|---|---|---|---|
| Corporate: PPNR/share | 70% of Corporate | $0.51 | $0.53 | 104.91% | 15.38% of base (CEO) |
| Corporate: Expense ratio | 30% of Corporate | 1.55% | 1.58% | 98.11% | 5.77% of base (CEO) |
| Individual goals | 20% total | Milestones | Achieved (capped at target) | 100% of target | 5.00% of base (CEO) |
| Total annual incentive | — | — | — | — | 26.15% of base; $195,264 |
Director Status and Ownership
| Item | Detail |
|---|---|
| Role on Board | Director since 2010 |
| Committee roles | Not disclosed in cited sections. |
| Separate Chair in place | Yes – John J. Mazur, Jr. |
| Beneficial ownership (director table) | 1,063,544 shares; includes options (540,000), plan holdings; 1.63% of outstanding; 8,748 shares pledged . |
Investment Implications
- Pay-for-performance structure appears intact: annual incentives tied to PPNR/share and expense ratio with threshold gates achieved; CEO payout was modestly above target at 26.15% of base, indicating alignment with operational results .
- Multi-year equity emphasizes performance risk: 50% PSUs with 0–150% earnout based on pre-tax, pre-provision EPS and an NCO gate; near-term vesting supply from TBRSUs is scheduled over 2025–2027, but large legacy options at $15.35 strike are currently out-of-the-money vs $6.46, limiting exercise-related selling pressure .
- Ownership alignment strong but pledging noted: CEO beneficially owns ~1.63% with plan holdings and options; anti-hedging/pledging policy in place, but 8,748 shares pledged persists; monitor for changes in pledged collateral as a risk flag .
- Governance structure mitigates dual-role concerns: separate Chairman reduces CEO/Chair concentration; however, family relationship with a sitting director (Leopold W. Montanaro) warrants ongoing independence and related-party sensitivity .
- Shareholder support robust: Say-on-pay passed with 95.65% and has exceeded 95% for six consecutive years, reducing near-term compensation controversy risk .
- Change-in-control economics: double-trigger 2.999x five-year average taxable comp for CEO; no excise tax gross-ups and a clawback policy are positive governance features; CIC terms could be material in corporate actions .