Michele Estep
About Michele Estep
Michele B. Estep, age 55, is Senior Executive Vice President and Chief Administrative Officer of OceanFirst Bank, appointed effective January 1, 2025 (previously EVP & CAO since January 2020) . She previously served as EVP & CAO at Sun National Bank and held leadership roles at KeyBank in Albany, NY, with extensive administrative and operating leadership in regional banking . Company performance context for 2024 included compensation plan funding at 84.9% of target and an “Outstanding” CRA rating awarded in early 2025, reflecting progress on regulatory and community objectives .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sun National Bank | Executive Vice President & Chief Administrative Officer | Not disclosed | Senior administrative leadership at a regional bank later acquired by OceanFirst |
| KeyBank (Albany, NY) | Leadership roles | Not disclosed | Large-bank operating experience applicable to scaling processes and controls |
External Roles
- Not disclosed in the proxy for Ms. Estep .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $325,000 | $325,000 | $425,000 (31% increase to align with market and reflect performance) |
| All Other Compensation ($) | $48,231 | $63,179 | $71,509 |
| Perquisites detail (2024) | — | — | ESOP allocation $6,439; 401(k) match $12,075; life insurance $3,552; company automobile $12,000; cash dividends on vested RS $32,443 (total $71,509) |
Notes:
- Executive officer stock ownership guideline for NEOs is 3x base salary; NEOs (including Ms. Estep) were in compliance as of 12/31/2024 (unvested performance-based RS excluded from compliance starting 2024) .
- Anti-hedging and anti-pledging policies apply; prior Board approval required in limited cases .
Performance Compensation
Annual Cash Incentive (CIP) – Structure and 2024 Outcomes
| Metric | Weight | Threshold | Target | Superior | 2024 Payout (% of target for metric) |
|---|---|---|---|---|---|
| Core Earnings | 40% | $84.6m | $112.8m | $141.0m | 66% |
| Core Efficiency Ratio | 20% | 69.00% | 59.10% | 44.30% | 72% |
| Net Deposit Growth | 10% | -10% | Maintain 7/1/23 level | +10% | 110% |
| Non-Interest Expense | 10% | $258.8m | $235.2m | $211.7m | 82% |
| Internal Controls | 5% | Qualitative/Quantitative | — | — | 102% |
| Regulatory Compliance & Assessments | 7.5% | Qualitative/Quantitative | — | — | 125% (CRA upgrade weighed) |
| Shareholders, Customers & Community | 7.5% | Qualitative/Quantitative | — | — | 131% |
| Total Plan Funding | — | — | — | — | 84.9% of target |
| Executive | 2024 Target Bonus ($) | 2024 Bonus ($) | Payout vs Target |
|---|---|---|---|
| Michele B. Estep | $200,000 | $254,700 | 127% |
Design notes:
- Individual performance modifiers (0–150%) can lift payouts above corporate funding; Estep’s 127% suggests strong individual performance against role-specific objectives .
- 2024 added an explicit expense management metric (Non-Interest Expense) to the plan .
Long-Term Incentives (Equity)
Performance-based restricted stock (PSUs) and time-based RSUs are granted annually; performance awards vest on a 3-year cliff; time-based vest ratably over 4 years .
| Grant Date | Instrument | Shares (Threshold/Target/Max) | Vesting | Grant Date FV ($) |
|---|---|---|---|---|
| 2/28/2024 | Performance-based RS (PSUs) | 8,384 / 16,767 / 25,151 | Cliff on 3/1/2027, subject to performance | Included in $497,507 total below |
| 2/28/2024 | Time-based RS (RSUs) | 16,767 | 25% annually beginning 3/1/2025 | Included in $497,507 total below |
| 2/28/2024 | Total 2024 Stock Awards | — | — | $497,507 (target basis; includes RSUs + PSUs) |
Performance metrics for PSUs (3-year period; payout 0–150%):
- Relative Core ROAA (3-yr avg) 40%, Relative Core EPS growth (3-yr cumulative) 40%, Relative 3-yr TSR 20% vs KBW Nasdaq Regional Banking Index (KRX) .
- Recent performance context: The prior FY22 grant’s 3-yr ROAA and cumulative EPS ended below target (ROAA result 0.86% vs 1.01% target; EPS $5.72 vs $7.14 target), indicating below-target vesting for that cycle .
Multi-Year Compensation Summary (NEO Table Extract)
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $325,000 | $325,000 | $425,000 |
| Time-based Stock Awards | $269,992 | $270,028 | $250,011 |
| Performance-based Stock Awards | $269,970 | $273,280 | $247,496 |
| Non-Equity Incentive (Annual Bonus) | $276,000 | $198,000 | $254,700 |
| All Other Compensation | $48,231 | $63,179 | $71,509 |
| Total | $1,189,193 | $1,129,487 | $1,248,716 |
| 2024 Stock Vested | Shares | Value |
|---|---|---|
| RS (vested in 2024) | 15,211 | $226,188 (at vest dates) |
Equity Ownership & Alignment
| Ownership Detail (as of 3/25/2025) | Amount |
|---|---|
| Shares owned (excl. options) | 168,244 |
| Options exercisable within 60 days | 142,503 |
| Total beneficial ownership | 310,747 |
| % of shares outstanding | <1% (“*” per proxy) |
| ESOP shares included | 3,467 |
| Unvested time-based RSUs (counted in ownership) | 35,168; awards from 2022–2025 grants |
| Performance-based RS (assuming Superior, included in ownership) | 17,075 (2023 grant), 21,151 (2024), 20,822 (2025) |
| Shares pledged as collateral | None (directors and execs) |
| Ownership guideline | NEOs 3x base salary; Estep in compliance at 12/31/2024 |
| Hedging/Pledging policy | Prohibited without Board approval; strong restrictions in place |
Options detail (all strikes above $18.10 on 12/31/2024; intrinsic value $0 at that date):
- 7,503 @ $20.79 exp 3/26/2025; 7,875 @ $22.69 exp 3/01/2026; 50,335 @ $25.20 exp 3/01/2029; 61,432 @ $20.44 exp 2/28/2030 (plus 15,358 unexercisable vesting 3/1/2025) .
Vesting Schedules (forward-looking release cadence)
Time-based RSUs outstanding (as of 12/31/2024):
- 734 and 4,142 vest on March 1, 2025 .
- 6,032 vest 50% on March 1, 2025 and 50% on March 1, 2026 .
- 8,538 vest in equal installments on March 1 of 2025, 2026, 2027 .
- 16,768 vest in equal installments on March 1 of 2025, 2026, 2027, 2028 .
Performance-based RS (by grant cohort; all cliff vest contingent on metrics):
- 2023 grant: vests March 1, 2026 (0–150% based on three-year metrics) .
- 2024 grant: vests March 1, 2027 (0–150% based on three-year metrics) .
- 2025 grant assumption noted in ownership footnotes; vests March 1, 2028 (0–150% based on three-year metrics) .
Trading policy and windows:
- Formally pre-clearance required; trading only during open windows; anti-hedging/pledging restrictions apply . This may moderate opportunistic selling outside permitted windows and hedge-driven pressure.
Employment Terms
| Term | Details |
|---|---|
| Current Role Effective Date | Senior EVP & CAO effective January 1, 2025 |
| Employment Agreement | OceanFirst has employment agreements with CEO/CFO/COO/GC; Ms. Estep is covered by a Change in Control Agreement (CIC) instead |
| CIC Agreement (Ms. Estep) | Two-year term expiring July 31, 2026; auto-renewal annually unless non-renewed after performance evaluation |
| CIC Severance | 2x the sum of (x) base salary + (y) greater of prior-year cash incentive or current-year target; plus 18 months of life/health/disability benefits; 280G cutback applies if needed |
| Trigger | Double-trigger: benefits only upon qualifying termination in connection with change in control (no single-trigger vesting) |
| Clawback | SEC/Nasdaq-compliant recovery policy; additional discretionary clawback for misconduct/overpayment; 3-year lookback |
| Non-compete/Non-solicit | Restrictive covenants disclosed for employment agreements; CIC agreement specifics for Estep not detailed in proxy |
Compensation Structure Analysis
- Shift in cash vs equity mix: 2024 base salary increased to market (first increase since 2019 for Estep), with continued balanced use of RSUs/PSUs (50/50) and risk-balanced CIP, aligning with shareholder preferences and safe-and-sound practices .
- Performance metric evolution: Added Non-Interest Expense to emphasize cost discipline; reduced Efficiency ratio weight accordingly, tightening pay-performance linkage .
- Discretion and outcomes: Corporate plan funded at 84.9% but Estep earned 127% via individual modifier—comp indicates recognition of execution despite macro headwinds; no repricing of options and no excise tax gross-ups (shareholder-friendly) .
- Stock ownership and risk: Strong ownership requirements with compliance, anti-hedging/pledging, and robust clawback reduce risk of misalignment .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay support was ~83%, with continued engagement and program refinements informed by investor feedback (e.g., metric adjustments, risk controls) .
Equity and Options Detail (supplemental)
| Instrument | Status | Key Terms |
|---|---|---|
| Options | Mostly out-of-the-money at 12/31/2024 price of $18.10; one tranche (15,358) scheduled to vest 3/1/2025; expiries 2025–2030 | No repricing; value realized only if stock appreciates above $20.44–$25.20 strikes |
| RSUs | Multiple tranches vesting 2025–2028 | 4-year ratable; long-duration retention cadence |
| PSUs | 2023/2024/2025 cycles vest 2026/2027/2028 | 0–150% payout vs KRX on ROAA, EPS growth, TSR; recent 3-yr cycle below target on ROAA/EPS |
Investment Implications
- Alignment and retention: Estep is in compliance with 3x salary ownership guidelines, has multiple years of unvested RSUs/PSUs and anti-hedging/pledging restrictions, indicating strong alignment and a retention tether across 2025–2028 vesting cycles .
- Selling pressure risk: Near-term RSU vesting on March 1 each year likely leads to routine tax-withholding sales; options are currently out-of-the-money, reducing forced exercise/selling risk despite 2025–2026 expirations .
- Pay-for-performance: 2024 plan funded at 84.9%, but Estep’s 127% payout reflects above-target individual execution, particularly as strategic/risk-control metrics were scored above 100% with CRA upgrade; positive indicator for operational follow-through in administrative remit .
- Change-in-control economics: Double-trigger 2x CIC with 18 months of benefits and 280G cutback provides market-standard protection without gross-ups; limited entrenchment risk, reasonable cost if a transaction occurs .