Mark DeFazio
About Mark DeFazio
Mark R. DeFazio, age 61, is President and CEO of Metropolitan Bank Holding Corp. (MCB) and has served as a director since 1999; he founded the company in 1999 (President since 1999; CEO since 2002) after 13 years at Israel Discount Bank where he was SVP and Head of Commercial Real Estate . Under his leadership, 2024 was a transition year with the successful exit from the BaaS business and continued progress on a bank‑wide digital transformation; the company delivered 2024 Net Income of $66.7M, Adjusted Net Income Growth of 13.7%, Adjusted ROATCE of 12.2%, loans of $6.0B, deposits of $6.0B, and NIM of 3.53% . In “Pay vs Performance,” a $100 investment measured as TSR was $121 for 2024 versus $131 for the KBW Regional Bank Index peer group; 2024 Net Income was $66.7M and Adjusted ROATCE 12.2% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Metropolitan Bank Holding Corp. | Founder & President | 1999–Present | Founded MCB; led growth through IPO (2017) and current strategic initiatives . |
| Metropolitan Bank Holding Corp. | Chief Executive Officer | 2002–Present | Oversaw exit from BaaS and digital transformation program; ongoing franchise growth . |
| Israel Discount Bank | SVP & Head of Commercial Real Estate | ~13 years (pre‑1999) | Led CRE business; informs MCB’s credit and market expertise . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Metropolitan Commercial Bank (subsidiary) | Board Committees: Credit Committee (permanent member); Asset Recovery Group (ARG) Committee member | Ongoing | Direct oversight of credit approvals and special assets enhances credit risk governance . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| CEO Base Salary ($) | 980,000 | 980,000 | 1,000,000 |
Performance Compensation
2024 Annual Incentive Plan (AIP) – CEO
| Component | Weight | Target | Outcome | Payout ($) | Form/Vesting |
|---|---|---|---|---|---|
| Corporate Performance (Adjusted Net Income Growth; Adjusted ROATCE) | 67% | Target set per Board‑approved plan; corporate metrics with threshold/target ranges shown below | Target | 1,200,000 | 67% of AIP paid in cash/RSUs; CEO AIP pays 67% cash, 33% RSUs |
| Safety & Soundness (Board discretionary evaluation) | 33% | Qualitative safety/soundness evaluation | Exceeds | 450,000 | 33% of AIP in RSUs vesting over 3 years; CEO 2024 AIP paid $1.1M cash and $550k RSUs |
| Total AIP | — | Target $1,500,000 | — | 1,650,000 | $1,100,000 cash; $550,000 RSUs vest over 3 years |
Corporate metric thresholds for 2024 AIP scorecards (for NEOs; basis for CEO corporate component): Adjusted Net Income Growth (Threshold 9.35–10.99%, Target 11%); Adjusted ROATCE (Threshold 8.5–9.99%, Target 10%) .
2024 Long‑Term Incentives (LTI) – CEO
| Grant/Metric | Grant Date | Target/Earned | Outcome | Vesting |
|---|---|---|---|---|
| Time‑based RSUs | 03/01/2024 | 36,469 units | Time‑based | 24,313 vest 100% on 03/01/2025; 12,156 vest ratably over 3 years starting 03/01/2025 |
| PRSUs – ROATCE percentile vs compensation peer group (50% of PRSU target) | 05/30/2024 | 24,420 units (50% of 48,840 target) | Below Target; 0 earned for this portion | Earned PRSUs vest in three equal installments beginning ~one year after grant |
| PRSUs – Safety & Soundness (50% of PRSU target) | 05/30/2024 | 24,420 units (50% of 48,840 target) | Target; 24,420 earned | Three equal installments on 06/01/2025, 02/28/2026, 02/28/2027 |
CEO Total Compensation (Summary Compensation Table)
| Component | 2022 ($) | 2023 ($) | 2024 ($) |
|---|---|---|---|
| Salary | 980,000 | 980,000 | 1,000,000 |
| Stock Awards (grant‑date fair value) | 3,106,384 | 1,500,000 | 3,499,968 |
| Non‑Equity Incentive (cash portion) | 500,000 | 500,000 | 1,100,000 |
| All Other Compensation | 25,710 | 26,460 | 34,024 |
| Total | 4,612,094 | 3,006,460 | 5,633,992 |
All Other Compensation (2024) detail for CEO: Life insurance $780; Executive supplemental life & disability $6,017; Transportation $16,877; 401(k) employer contribution $10,350; Total $34,024 .
Equity Ownership & Alignment
- Beneficial ownership (Record Date 04/03/2025): 121,344 shares; 1.10% of outstanding shares .
- Unvested equity as of 12/31/2024:
- PRSUs: 48,840 unearned units (target) with market value $2,852,256 at $58.40/share .
- RSUs: 36,469 (2024 grant) FV $2,129,790; 5,954 (2023) FV $347,714; 1,639 (2022) FV $95,718 .
- No stock options outstanding or exercised; MCB does not currently grant options .
- Upcoming vesting catalysts (potential supply overhang):
- 24,313 RSUs vest 100% on 03/01/2025; 12,156 RSUs begin ratable vesting on 03/01/2025 .
- Earned 2024 PRSUs vest in three equal installments on 06/01/2025, 02/28/2026, 02/28/2027 .
- Policies and alignment:
- Executive stock ownership guidelines: CEO 6x base salary; other NEOs 3x; expected compliance within five years; performance‑conditioned awards excluded from calculation .
- Prohibitions on hedging; restrictions on short sales and margin accounts (margin requires prior Board approval); pledging prohibited for directors without Board approval .
- Clawback policy (SEC/NYSE compliant) covering incentive‑based compensation received on/after 10/2/2023 in the event of an accounting restatement .
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement structure | Rolling 3‑year employment agreement that auto‑renews daily to maintain a 3‑year term . |
| Severance (non‑CIC) | Involuntary termination without cause or resignation for good reason: cash lump sum equal to 3x base salary + prior year bonus; immediate vesting of outstanding unvested equity . |
| Change‑in‑Control (CIC) cash | Upon a change in control, cash lump sum equal to 3x base salary + prior year bonus (single‑trigger cash) . |
| CIC + termination | Involuntary termination without cause or resignation for good reason in connection with/following CIC: immediate vesting of outstanding unvested equity . |
| 280G excise tax | Company will reimburse Mr. DeFazio for 280G excise taxes and provide a gross‑up to make him whole after taxes; estimated payments currently not expected to trigger 280G per proxy . |
| Death/Disability | Death: lump sum equal to 3x base salary + prior year bonus; immediate vesting of outstanding unvested equity . Disability: lump sum equal to 3x base salary + prior year bonus; immediate vesting of outstanding unvested equity . |
| Post‑employment restrictions | Prohibitions on recruiting/soliciting employees/customers; confidentiality and related restrictions (non‑solicit applies for one year after voluntary termination for certain executives) . |
Potential payout scales as of 12/31/2024 (illustrative, per proxy estimates): Termination without cause/good reason or upon CIC: cash severance $4.1M and equity vesting value $5.43M for CEO; similar enumerations for other scenarios are detailed in the proxy .
Performance & Track Record
| Measure | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Value of $100 investment (Company TSR) | 221 | 122 | 115 | 121 |
| Value of $100 (Peer Group TSR – KBW Reg Bank Index) | 125 | 116 | 116 | 131 |
| Net Income ($M) | 60.6 | 59.4 | 77.3 | 66.7 |
| Adjusted ROATCE (%) | 15.2 | 16.6 | 16.8 | 12.2 |
2024 strategic execution: Completed BaaS exit, replaced deposits while expanding NIM; progressed digital transformation expected to complete by end of 2025 .
Board Governance
- Board roles: Director since 1999; non‑independent due to CEO role; serves as a non‑independent member under NYSE rules .
- Leadership structure: Independent Chair (William Reinhardt) since 2018; Chair and CEO roles are separated, mitigating dual‑role risks .
- Committees (Company/Bank): Participates on the Bank’s Credit Committee (permanent member) and ARG Committee .
- Classified board: Directors in three classes with staggered three‑year terms (in place since 1999) .
- Attendance: Board met 13 times in 2024; average director attendance ~98.5%; no director attended fewer than 75% of meetings; Mr. DeFazio receives no additional pay for board service .
Director Compensation (as it relates to CEO dual role)
- Mr. DeFazio receives no additional compensation for service on the Company’s Board or the Bank’s board of directors .
Compensation Committee Analysis and Shareholder Feedback
- Compensation philosophy: Significant portion of CEO pay at‑risk via AIP and LTI; practices include independent consultant (FW Cook), annual risk assessment, incentive caps, clawback, and ownership guidelines .
- Peer group (2024 benchmarking): AMAL, BFC, BLFY, BY, CNOB, DCOM, EBTC, FFWM, NBHC, NBBK, CASH, QCRH, TBBK, UVSP, VBTX; reconstituted to reflect exit from payments and focus on commercial banking .
- Say‑on‑Pay: 2024 support of 91.40% .
Related Party Transactions and Policies
- Policy requires CG&N Committee approval for related party transactions over $120k; in 2024, none required approval or disclosure under the policy .
- Insider trading policy prohibits hedging, short sales; margin/pledging require Board approval (directors) or are restricted as specified .
Compensation Structure Observations
- 2024 mix shifted toward equity vs 2023; CEO stock awards $3.50M in 2024 vs $1.50M in 2023, reflecting resumption of PRSUs and larger RSU grant sizes; AIP cash increased alongside outcomes .
- PRSUs reintroduced in 2024 with a 50/50 mix of corporate ROATCE percentile and safety/soundness; CEO earned 50% of target PRSUs (safety/soundness) while corporate ROATCE percentile was below target .
- Equity plan capacity: Board seeking to increase share reserve by 750,000 to 1,466,000 shares to support equity‑heavy pay philosophy; aggregate potential dilution (overhang) estimated at 10.13% pre‑offsets from the announced $50M repurchase authorization .
Investment Implications
- Alignment and retention: Large unvested RSUs/PRSUs plus executive stock ownership guidelines tie CEO wealth to long‑term performance; clawback and anti‑hedging policies further align interests .
- Dilution vs incentives: Equity‑heavy pay and the proposed pool increase support retention and performance incentives but introduce dilution risk (10.13% potential overhang before buyback effects); management plans to offset some dilution via the $50M repurchase authorization .
- Insider selling pressure: Material scheduled vesting (e.g., 24,313 RSUs vesting 03/01/2025; earned PRSUs vesting 2025–2027) could create episodic supply; monitor Form 4 and any 10b5‑1 plans around these dates .
- Governance red flags: Single‑trigger cash CIC benefit and 280G tax gross‑up for the CEO are shareholder‑unfriendly features; however, separation of Chair/CEO and strong clawback mitigate some governance risk .
- Pay‑for‑performance: AIP and PRSUs reference tangible financial metrics (Adjusted Net Income Growth, Adjusted ROATCE, ROATCE percentile) and safety/soundness, and Say‑on‑Pay support was high at 91.40% in 2024, suggesting broad investor acceptance of the framework .