Thomas Shara
PROVIDENT FINANCIAL SERVICESAbout Thomas J. Shara
Executive Vice Chairman and Director at Provident Financial Services, Inc. (PFS) since May 16, 2024; age 67; formerly President & CEO of Lakeland Bancorp and Lakeland Bank and prior President & Chief Lending Officer of TD Bank’s Mid‑Atlantic Division . Not independent (executive officer) and paid as an officer rather than via director fees . Company performance context for 2024 included completion and integration of the Lakeland merger, net income of $115.5M (EPS $1.05), total assets of $24.1B, and ROAA of 0.57%; say‑on‑pay approval was ~97% . PFS maintains NYSE/SEC‑compliant clawbacks and prohibits hedging; executives are directed to avoid pledging company stock .
Past Roles
| Organization | Role | Years (if disclosed) | Strategic impact |
|---|---|---|---|
| Lakeland Bancorp, Inc. / Lakeland Bank | President & Chief Executive Officer | Not disclosed | Led Lakeland prior to merger; brings local market depth and 40+ years banking experience to PFS . |
| TD Bank (Mid‑Atlantic Division) | President & Chief Lending Officer | Not disclosed | Senior lending leadership; complements credit and market expertise at PFS . |
External Roles
| Organization | Role | Years (if disclosed) | Strategic impact |
|---|---|---|---|
| Boys and Girls Club of Paterson and Passaic | Board of Trustees | Not disclosed | Community engagement and regional relationships . |
| Commerce and Industry Association of New Jersey | Board of Directors | Not disclosed | Business network connectivity . |
| Ramapo College Foundation | Board of Governors | Not disclosed | Academic/community ties . |
| Chilton Medical Center Foundation | Foundation Officer/Trustee | Not disclosed | Healthcare system relationships . |
Fixed Compensation
| Component | 2024 Amount ($) | Notes |
|---|---|---|
| Base Salary (earned partial year) | 433,583 | Annualized salary rate $760,000; employed from May 16, 2024 . |
| Guaranteed Bonus (pre‑merger Lakeland period) | 262,302 | 100% of target for Jan 1–May 15, 2024 per merger terms . |
| Perquisites | 5,635 | Personal use of company car . |
| Medical & Insurance Contributions | 11,096 | Employer‑provided benefits . |
Performance Compensation
| Metric | Weight | Target Definition | Actual (2024 periods) | Payout to Shara |
|---|---|---|---|---|
| Net Income | 40% | Adjusted for CECL add‑back and subtracting net charge‑offs (net of tax) | Pre‑close Jan–Apr: 43.80 vs target 39.50; Integration May–Jul set to target; Post‑close Aug–Dec: 100.50 vs target 88.70 | 125% of target for May 16–Dec 31 (93.75% of prorated base salary) plus 100% of target pre‑merger (guaranteed) . |
| EPS | 40% | Adjusted EPS per plan (CECL add‑back, charge‑offs deducted) | Pre‑close: 0.58 vs target 0.52; Integration set to target 0.57; Post‑close: 0.77 vs target 0.68 | Included in overall result above . |
| Efficiency Ratio | 20% | Non‑interest expense / net revenue | Pre‑close: 61.14% vs target 59.50%; Integration: 53.29% at target; Post‑close: 55.26% vs target 57.69% | Included in overall result above . |
| Equity Award | Grant Date | Type | Shares/Units | Grant‑Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| Merger‑related retention RSU | 5/28/2024 | Time‑vesting Restricted Stock | 32,020 | 500,000 | One‑year cliff vest on first anniversary of merger close (around 5/15/2025), subject to continued employment . |
Notes:
- Equity mix at PFS favors RSUs/PSUs; stock options currently not used in executive compensation .
- Company‑wide long‑term PSU metrics (for 2024 grants to other NEOs) are 60% multi‑year core ROAA and 40% core ROATE with a KBW Regional Bank Index TSR modifier; Shara did not receive the 2024 annual PSU grant due to start timing but received the merger retention RSU .
Equity Ownership & Alignment
| Ownership Detail | Amount | Status |
|---|---|---|
| Beneficial ownership (direct/indirect) as of 2/28/2025 | 534,830 shares | “Percent of class” shown as less than 1% . |
| Unvested stock awards included in beneficial ownership | 32,020 shares | One‑year retention RSU from merger . |
| Outstanding equity at 12/31/2024 (unearned) | 32,020 shares; $604,217 market value at $18.87/share | Not yet vested at year‑end . |
| Executive stock ownership guideline | 6x base salary (Tier I) | Not yet met due to recent onboarding; monitoring for compliance . |
| Hedging/Pledging | Hedging prohibited; pledging discouraged by policy | No pledging disclosed. |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | Two‑year term commencing on merger close (May 15, 2024) for Executive Vice Chairman; eligible for annual cash incentive (target 75% of base), and long‑term incentive (target 100% of base) . |
| Severance (no change in control) | If terminated without cause or for good reason: lump sum equal to one year of base salary plus one year of target bonus, and up to 12 months of benefits or cash equivalent . |
| Change‑in‑Control (CIC) | If terminated without cause or for good reason after a CIC: cash severance equal to 3× the average of prior three years’ annual compensation, plus life/health/dental/disability coverage for 3 years . |
| CIC tax treatment | No excise‑tax gross‑up; unlike certain peers, Shara’s agreement does not include a “best net benefit” cutback provision (may be subject to 280G excise tax) . |
| Retention & Non‑compete | One‑time cash bonus of $1,000,000 at merger close; retention payment of $1,000,000 (split $500,000 cash at one‑year anniversary and $500,000 RSU vesting at one year); separate non‑compete/non‑solicit for 2 years post‑service with a lump‑sum payment of $3,100,000; breach permits clawback of after‑tax portion of payment . |
| Clawbacks | NYSE/SEC‑compliant clawback policy applies to incentive‑based compensation after restatements, irrespective of misconduct; awards also subject to forfeiture for cause or policy violations . |
| Non‑compete/Garden leave | Non‑compete and non‑solicit specified above; garden leave not disclosed. |
Potential payouts illustration as of 12/31/2024 (company estimate):
- Termination without cause/for good reason: total cash & benefits $1,506,797; unvested awards $0; total $1,506,797 .
- After Change in Control: total cash & benefits $4,520,393; unvested awards $604,217; total $5,124,610 .
Board Governance
- Role: Executive Vice Chairman and Director since 2024; term expires 2026; not independent .
- Committee roles: Executive officers are not listed as committee members; primary committees are led by independent directors (Audit, Compensation & Human Capital, Governance/Nominating, Enterprise Risk, Finance, Technology) .
- Attendance: All directors met at least 75% attendance across board/committees in 2024; board met 14 times; non‑management executive sessions at least twice a year (six held in 2024), led by the Lead Independent Director .
- Board leadership: Executive Chairman (Christopher Martin) with a Lead Independent Director (John Pugliese) .
- Director compensation: Non‑management directors receive cash/equity retainers; Shara, as an executive, receives salary and does not receive director fees .
Director Compensation (reference framework)
| Element | Value |
|---|---|
| Board member annual retainer | $55,000 . |
| Lead Director retainer | $25,000 . |
| Committee retainers | Chairs: $27,500 (Audit/Comp), $22,500 (Enterprise Risk/Finance/Tech), $20,000 (Governance); Members: $15,000 (Audit/Comp), $12,500 (Enterprise Risk/Finance/Tech), $10,000 (Governance) . |
| Annual director equity grant | $90,000 (one‑year vest) . |
| Executive directors (e.g., Shara) | Paid as employees; no director fees . |
Compensation Structure Analysis
- 2024 total reported compensation for Shara was $5,806,322, driven by merger‑related payments, retention RSU, guaranteed pre‑merger bonus, and prorated annual incentive; “All Other Compensation” included $4,100,000 related to retention/non‑compete arrangements and $45,960 of dividends on stock awards per Lakeland legacy terms .
- Mix favors cash and time‑vested RSUs for the merger transition; options are not currently used in executive comp, reducing repricing risk .
- Annual cash incentive target for Executive Vice Chairman is 75% of base salary; 2024 payout was 125% of target on a prorated basis for the post‑merger period, plus a guaranteed 100% target bonus for the pre‑merger period .
- Company incentive metrics were tightened for post‑close period and adjusted to mitigate CECL volatility, emphasizing management controllables (Net Income, EPS, Efficiency Ratio) .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval: ~97% of votes cast .
- Engagement: outreach to five institutional holders representing ~17.8% ownership in 2024 .
Risk Indicators & Red Flags
- Non‑compete payment ($3.1M) and retention bonuses could be viewed as costly but align to merger integration success; these are subject to clawback upon breach .
- Change‑in‑control agreement lacks 280G “best net benefit” cutback (unlike peers), potentially resulting in excise tax exposure without gross‑up .
- Hedging prohibited; pledging discouraged; no pledging disclosed for Shara .
- Related party/insider lending governed under prudential rules; aggregate director/executive loans totaled $74M at 12/31/2024 on market terms .
Equity & Cash Detail Tables
2024 Summary Compensation (Shara)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non‑Equity Incentive ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 433,583 | 262,302 | 500,000 | 447,746 | 4,162,691 | 5,806,322 |
2024 All Other Compensation Breakdown (Shara)
| Category | Amount ($) |
|---|---|
| Perquisites and other personal benefits | 5,635 |
| Dividends on stock awards | 45,960 |
| Change in control & merger‑related payments | 4,100,000 |
| Company contributions to medical and insurance | 11,096 |
| Total | 4,162,691 |
Grants of Plan‑Based Awards (2024 – Shara)
| Grant Date | Instrument | Shares/Units (#) | Grant‑Date Fair Value ($) | Notes |
|---|---|---|---|---|
| 5/28/2024 | Time‑vesting restricted stock | 32,020 | 500,000 | One‑year cliff vest; merger‑related retention award . |
| 2/16/2024 | Annual cash incentive (target) | n/a | Target 570,000; threshold 57,000; max 855,000 | Executive Annual Incentive Plan schedule . |
Outstanding Equity Awards (12/31/2024 – Shara)
| Grant Date | Unearned Shares (#) | Market/Payout Value ($) |
|---|---|---|
| 5/28/2024 | 32,020 | 604,217 (at $18.87/share) |
Beneficial Ownership (as of 2/28/2025 – Shara)
| Shares Owned (Direct/Indirect) | Unvested Awards Included | Percent of Class |
|---|---|---|
| 534,830 | 32,020 | <1% |
Deferred/Retirement Balances (2024 – Shara)
| Plan | 2024 Distributions ($) | 2024 Earnings ($) | Aggregate Balance at YE ($) |
|---|---|---|---|
| SERP (Supplemental Executive Retirement Plan) | 87,500 | Included in total earnings | Included in total balance . |
| Lakeland Executive Elective Deferral + Deferred Compensation Plans | — | Included in total earnings | Included in total balance . |
| Total across plans | 87,500 | 415,370 | 8,898,611 |
Compensation Committee & Governance Controls
- Compensation & Human Capital Committee is fully independent; chaired by Matthew Harding; uses FW Cook as independent consultant with no conflicts .
- Executive stock ownership guidelines: Tier I (Executive Chairman, Executive Vice Chairman, CEO) require 6× base salary; Shara not yet compliant due to recent onboarding; time‑vested restricted stock counts toward compliance; unvested performance awards do not .
- Prohibitions on hedging; pledging discouraged; robust clawback policy for incentive compensation .
Investment Implications
- Alignment: Shara’s equity stake (534,830 shares) and one‑year retention RSU add near‑term vesting supply but signal integration incentives; hedging prohibited and ownership guidelines apply, though he is not yet in compliance per policy disclosure .
- Retention/Change‑in‑Control economics: Material retention and non‑compete payments ($2M retention + $3.1M non‑compete) and CIC multiple (3× average comp) reduce near‑term departure risk; absence of 280G cutback (“best net benefit”) in Shara’s CIC agreement can increase excise tax exposure without gross‑up .
- Performance linkage: 2024 incentives tied to Net Income/EPS/Efficiency Ratio with CECL normalization; Shara received guaranteed pre‑merger payout plus 125% of target post‑merger, aligning with integration execution .
- Governance: Independent committee oversight, strong clawbacks, and say‑on‑pay support (~97%) mitigate pay‑risk optics; executive directors do not receive director fees .