Anthony Labozzetta
PROVIDENT FINANCIAL SERVICESAbout Anthony Labozzetta
Anthony J. Labozzetta, age 61, is President & CEO of Provident Financial Services, Inc. and Provident Bank (since Jan 2022) and has served as a director since 2020 . Under his tenure, Provident completed the Lakeland Bancorp merger in May 2024, increasing assets to $24.1B and delivering 2024 net income of $115.5M (ROAA 0.57%; net interest margin 3.26%) . 2024 pay-versus-performance shows PFS TSR of $98.86 on a $100 base vs peer group $132.44, with compensation “actually paid” tracking ROAA/TSR outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Provident Financial Services/Provident Bank | President & CEO; Director | CEO since 2022; Director since 2020 | Led Lakeland merger; integration completed; scale to $24.1B assets |
| SB One Bancorp / SB One Bank | President & CEO | 2010–2020 | Grew franchise; experience later leveraged at Provident |
| TD Bank | Executive Vice President | 2006–2010 | Commercial leadership in Mid-Atlantic |
| Deloitte LLP | Certified Public Accountant | Prior to banking | Financial/audit grounding |
External Roles
No additional public company directorships or external roles for Mr. Labozzetta were disclosed in the latest proxy .
Fixed Compensation
- Base salary increased 15.2% in 2024 to $950,000 (from $825,000 in 2023) to move closer to peer median .
- 2024 annual cash incentive opportunity: Threshold 37.5% of salary; Target 75%; Max 112.5% .
| Year | Base Salary ($) | Notes |
|---|---|---|
| 2022 | 648,269 | First year as CEO |
| 2023 | 818,269 | — |
| 2024 | 945,193 | Committee-approved 2024 annualized salary $950,000; earned reflects partial-year timing |
Performance Compensation
2024 Annual Cash Incentive – Structure and Outcomes
- Corporate metrics and weights: Net Income 40%, EPS 40%, Efficiency Ratio 20% .
- Periodization due to merger: pre-close (Jan 1–Apr 30), integration (May 1–Jul 31), post-close (Aug 1–Dec 31) .
- Payouts by period: 112.8% of target (pre-close), 100% (integration), 150% (post-close), producing 125% of target for the year; CEO earned $890,625 (93.75% of salary) .
| Period (2024) | Metric | Weight | Threshold | Target | Maximum | Actual | Result vs Target |
|---|---|---|---|---|---|---|---|
| Jan 1–Apr 30 | Net Income | 40% | 33.60 | 39.50 | 44.70 | 43.80 | 112.8% target plus |
| EPS | 40% | 0.45 | 0.52 | 0.59 | 0.58 | 112.8% target plus | |
| Efficiency Ratio | 20% | 60.52% | 59.50% | 59.13% | 61.14% | 112.8% target plus (composite) | |
| May 1–Jul 31 | Net Income | 40% | — | 64.50 | — | 64.50 | 100% (target) |
| EPS | 40% | — | 0.57 | — | 0.57 | 100% (target) | |
| Efficiency Ratio | 20% | — | 53.29% | — | 53.29% | 100% (target) | |
| Aug 1–Dec 31 | Net Income | 40% | 75.40 | 88.70 | 100.40 | 100.50 | 150% max |
| EPS | 40% | 0.58 | 0.68 | 0.77 | 0.77 | 150% max | |
| Efficiency Ratio | 20% | 58.91% | 57.69% | 56.87% | 55.26% | 150% max |
| Year | Non-Equity Incentive ($) | % of Salary | % of Target |
|---|---|---|---|
| 2022 | 655,980 | — | — |
| 2023 | 309,375 | 37.50% | 50.00% |
| 2024 | 890,625 | 93.75% | 125.00% |
Long-Term Incentive (LTI) Program
- Mix: 75% performance-vesting restricted stock; 25% time-vesting restricted stock .
- 2024–2026 performance goals: Core ROAA (60% weight) and Core ROATE (40% weight) with ±20% TSR modifier vs KBW Regional Bank Index; metrics adjusted to add back CECL provision and subtract net charge-offs (post-tax) .
| 2024–2026 Goals | Threshold | Target | Maximum |
|---|---|---|---|
| Multi-Year Core ROAA (60%) | 78 bps | 92 bps | 97 bps |
| Multi-Year Core ROATE (40%) | 8.41% | 10.58% | 11.40% |
- 2024 grants to CEO: Performance shares (target 49,032; grant-date FV $712,500), time-vested 16,267 ($237,500) and a merger-related performance award with two-year cliff focused on cost synergies (50%) and successful integration (50%) sized at $475,000 (30,410 target shares) .
- Vesting: Performance awards three-year cliff; time-based ratable over three years .
- 2022–2024 performance cycle vested at 138% of target (max ROAA/ROATE; TSR below 25th percentile applied downward modifier) .
| 2024 CEO LTI Grants | Type | Shares/Units | Grant-Date FV ($) |
|---|---|---|---|
| Annual PSU (target) | Performance vesting | 49,032 | 712,500 |
| Annual RSU | Time vesting | 16,267 | 237,500 |
| Merger-related PSU | 2-yr cliff; cost saves/integration | 30,410 | 475,000 |
Equity Ownership & Alignment
- Beneficial ownership: 520,500 shares (<1% of class), including 22,148 unvested stock awards in beneficial ownership calculation; no stock options outstanding .
- Retirement plans: 401(k) plan shares —; ESOP shares 1,909 .
- 2024 vesting: 42,128 shares vested; value realized $624,758 .
- Ownership guidelines: CEO must hold 6× base salary; status: “currently meets these guidelines.” Hedging is prohibited; policy advises avoiding pledging .
| Ownership Detail (as of Feb 28, 2025) | Amount |
|---|---|
| Beneficial Ownership (shares) | 520,500 |
| % of Shares Outstanding | <1% |
| Unvested Stock Awards Included | 22,148 |
| 401(k) Shares | — |
| ESOP Shares | 1,909 |
| CEO Ownership Guideline | 6× base salary |
| Hedging/Pledging Policy | Hedging prohibited; avoid pledging |
Employment Terms
- Employment agreement (legacy): Auto-renewing annually since Jan 1, 2022; if terminated without cause/for good reason, cash severance equals the greater of remaining term or 12 months’ base salary plus target bonus; continued benefits for the “benefits period”; non-compete generally one year (six months if termination during renewal term) .
- Change-in-control (CIC) agreement: Severance equals 3× highest recent annualized base + cash comp; 3 years of benefits; double-trigger upon qualifying termination .
- Updated agreement: On June 26, 2025 PFS entered into an amended and restated employment agreement with Mr. Labozzetta through June 26, 2028 (evergreen thereafter), replacing the prior agreement .
| Scenario (as of Dec 31, 2024) | Cash + Benefits ($) | Unvested Equity Value ($) | Total ($) |
|---|---|---|---|
| Termination w/o Cause or for Good Reason (Employment Agreement) | 1,877,903 | — | 1,877,903 |
| Disability (Employment Agreement) | 749,779 | 2,914,604 | 3,664,383 |
| Death (Equity vests) | — | 2,914,604 | 2,914,604 |
| CIC + Qualifying Termination (CIC Agreement) | 5,633,715 | 2,914,604 | 8,548,319 |
Additional benefits/programs: Non-qualified supplemental defined contribution plan (company 2024 contribution $52,891; aggregate balance $1,050,889) . No defined benefit pension participation . Clawback policy compliant with NYSE/SEC; all cash and equity awards subject to clawback and potential recoupment for cause/misconduct policy breaches .
Board Governance
- Role: CEO and director; not independent by NYSE standards .
- Board structure: Executive Chairman (Christopher Martin), Lead Independent Director (John Pugliese), and supermajority independent board; CEO is not Chairman, mitigating dual-role concentration concerns .
- Committee service: CEO does not receive director fees and is not listed as a committee member; non-management directors receive retainers and equity .
- Attendance: All directors met ≥75% attendance thresholds in 2024; multiple executive sessions led by Lead Independent Director .
- 2025 nomination: Mr. Labozzetta is a board nominee with term expiring 2025 .
Director Compensation (CEO as Director)
- Mr. Labozzetta receives no director compensation for board service; director fees apply to non-management directors only .
Compensation Structure Analysis
- Cash vs equity mix: For 2024, ~64% of CEO target total direct compensation was performance-based and not guaranteed; committee increased CEO base salary to address below-median positioning while keeping majority at risk .
- Metrics rigor and changes: 2024 bonus/LTI definitions adjusted to add back CECL provision and deduct net charge-offs (post-tax) to mitigate model volatility; three-period 2024 design around merger ensured targeted and rigorous post-close goals (delivered maximum results) .
- Special awards: One-time merger-related performance grant with two-year cliff tied to cost saves and integration success (both must be met) aligns rewards with transaction value creation .
- Clawback/no gross-ups: Company-wide clawback policy; no 280G excise tax gross-ups in executive arrangements .
- Say-on-Pay support: 2024 advisory vote approval ~97% indicates strong shareholder backing .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approval: ~97% of votes cast in 2024 supported executive compensation .
- Engagement: Outreach to top holders representing ~17.8% ownership during 2024 .
Compensation Peer Group
- 2024 benchmarking: Regional peer group of 17 Northeast banks; performance comparisons to KBW Regional Bank Index .
- Post-merger (2025) peer group realigned to asset size with new 18-member group; compensation generally targeted to peer median .
Performance & Track Record
- 2024 strategic outcomes: Completed Lakeland merger; acquired ~$7.91B loans and assumed ~$8.62B deposits; fee income contributed; adjusted expense/asset ratio 1.90%; capital remained well-capitalized; maintained $0.24 quarterly dividend .
- Financial highlights: 2024 net income $115.5M; ROAA 0.57%; ROATCE 8.58%; NIM 3.26% .
- LTI performance realization: 2022–2024 cycle paid at 138% of target, reflecting maximum returns metrics tempered by relative TSR underperformance, appropriately modulated by design .
Insider Activity, Vesting Schedules, and Selling Pressure
- 2024 vesting created 42,128 shares for CEO, a potential liquidity event to monitor for tax-related sales (no options exercised) .
- Section 16 timing: A Form 4 covering a CEO purchase in 2023 was filed late (administrative lapse); 2024 Section 16 compliance otherwise timely for insiders .
- Policy backdrop: Hedging prohibited; pledging discouraged, reducing misalignment risk .
Risk Indicators & Red Flags
- No option repricings; no hedging; strong clawback; high Say-on-Pay support .
- Related-party transactions policy and approvals in place; aggregate insider/related credits made on market terms .
- Compensation risk assessments performed annually; no material risk identified .
Executive Summary Compensation (Multi-Year)
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 648,269 | 650,000 | 655,980 | 95,043 | 2,049,292 |
| 2023 | 818,269 | 825,000 | 309,375 | 121,547 | 2,074,191 |
| 2024 | 945,193 | 1,425,000 | 890,625 | 240,274 | 3,501,092 |
Employment Terms – Key Provisions (Narrative)
- Without Cause/Good Reason: Lump-sum salary + target bonus for at least 12 months; benefits continuation; non-compete generally one year (reduced to six months if termination occurs during a renewal term) .
- CIC: Double-trigger severance equals 3× recent annualized base + cash compensation; 3-year benefits continuation; best-net-benefit reductions apply to others but not explicitly to CEO .
- 2025 Update: New amended and restated employment agreement effective June 26, 2025 with term through June 26, 2028 and annual renewals thereafter, replacing the prior agreement .
Investment Implications
- Alignment: High at-risk pay (annual and LTI) tied to bank profitability (Net Income/EPS/Efficiency) and multi-year returns (core ROAA/ROATE with TSR modifier) directly link CEO compensation to performance and integration success; clawback and ownership guidelines further align incentives .
- Retention risk: CIC and severance protections (3× under CIC; ~12 months otherwise) plus ownership guidelines and ongoing LTI cycles reduce flight risk through 2026; 2025 amended agreement extends formal commitment through 2028 .
- Near-term trading signals: 2024–2026 PSU design and 2024 merger PSUs set concrete cost-save and ROAA/ROATE hurdles; successful attainment would support elevated vesting in 2026 and 2027, while 2024 vesting generation (42,128 shares) suggests periodic Form 4 activity around vesting/withholding dates to watch for supply overhang .
- Governance quality: Separate Executive Chairman and CEO, Lead Independent Director role, and strong Say-on-Pay (~97%) temper dual-role concerns and indicate supportive shareholder sentiment during integration .