Douglas L. Kennedy
About Douglas L. Kennedy
Douglas L. Kennedy is President and CEO of Peapack-Gladstone Financial Corporation (PGC) and Peapack Private Bank & Trust, serving since 2012, and a member of the Board of Directors since 2012. He is 68 years old with 47+ years in commercial banking and holds a B.A. in Economics and an MBA from Sacred Heart University (Fairfield, CT) . Under his tenure, 2024 “pay-versus-performance” disclosures show Company TSR of $107.60 on a $100 base (2019–2024), net income of $32.99 million, and diluted EPS of $1.85; prior years show TSR volatility alongside industry pressures . Strategic execution in 2024 included a NYC expansion (13 private banking teams; $850 million core relationship deposits vs. $450 million target) and top-tier peer rankings in noninterest-bearing deposit growth (90th–91st percentile vs. peer sets) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Capital One Bank/North Fork | Executive Vice President and Market President | Not disclosed | Senior leadership across markets; commercial banking growth |
| Summit Bank | Executive-level positions | Not disclosed | Banking leadership roles supporting growth and operations |
| Bank of America/Fleet Bank | Executive-level positions | Not disclosed | Leadership roles at scale within national bank platform |
External Roles
| Organization | Role | Years | Committee roles | Independence | Notes |
|---|---|---|---|---|---|
| Peapack-Gladstone Financial Corporation | Director (inside) | Director since 2012 | None (CEO not on Board committees) | Not independent (only non-independent director) | Board held 11 meetings in 2024; each director attended ≥75% of Board/committee meetings . Independent Chair; CEO and Chair roles separated . |
- Director compensation: As a full-time employee, Kennedy is not paid additional director fees .
- Board structure: Independent Chair; all committees chaired by independent directors; executive sessions of independents held at least semi-annually .
- Director ownership guideline: Directors must maintain 5x the annual Board retainer; new directors must own $10,000 in stock at appointment .
Fixed Compensation
| Year | Base Salary ($) | % Increase |
|---|---|---|
| 2023 | 823,000 | — |
| 2024 | 847,690 | 3% |
STI design ranges (2025 plan basis, as % of salary):
- CEO STI (cash) Threshold 60%, Target 85%, Max 125% (75% Company; 25% Individual/Strategic) .
Performance Compensation
Short-Term Incentive (STI) – 2024 Outcome (paid March 2025)
- Company performance metrics and weights: Pre-tax income before provision for credit losses (40%) and diluted EPS (60%), assessed vs. 2024 Budget; adjusted results at 102% of budget; Committee determined Company performance at Target .
- Individual/Strategic rating: CEO rated Target+ .
- Weighting: 75% Company / 25% Individual .
| Metric | Weight | Target (Budget) | 2024 Actual (Adjusted) | Committee Assessment | Impact on STI |
|---|---|---|---|---|---|
| Pre-tax income before credit losses | 40% | $69.45m | $65.76m | Below budget but part of 102% blended result | Company performance deemed Target |
| Diluted EPS | 60% | $2.27 | $2.44 | Above budget | Company performance deemed Target |
| Individual/Strategic (CEO) | 25% | Target | Target+ | Target+ | Weighted into payout |
| Executive | 2024 Base Salary | Company Weighting | Individual Weighting | Total STI Paid ($) | Total as % of Salary |
|---|---|---|---|---|---|
| Douglas L. Kennedy | $847,690 | 75% (67.5% of salary) | 25% (22.5% of salary) | $762,921 | 90.00% |
Plan ranges and actual payout disclosure:
| Name | STI Threshold ($) | Target ($) | Max ($) | Actual ($) |
|---|---|---|---|---|
| Douglas L. Kennedy | 508,614 | 720,537 | 1,059,613 | 762,921 |
Long-Term Incentive (LTI) – 2024 Grants (granted March 20, 2024)
- Vehicle: Phantom Stock Units (2024 grants); RSUs used in 2023 and prior .
- Split: 60% performance-based (3-year cliff); 40% time-based (3 equal annual installments) .
- Performance metrics (performance-vested portion): EPS Growth (30%), TSR (30%), Core Deposit Growth (20%), Credit Quality metrics (20%), all relative to peers .
| Name | Grant Date | Performance Units Threshold | Performance Units Target | Performance Units Max | Time-Based Units | Grant Date Fair Value |
|---|---|---|---|---|---|---|
| Douglas L. Kennedy | 3/20/2024 | 8,515 | 15,482 | 25,545 | 10,321 | $617,208 |
Vesting schedules (as disclosed):
- Performance-based: 3-year cliff vesting; payout 0–max based on metrics vs peers .
- Time-based: 3 equal annual installments beginning on the anniversary of grant (3/20/2025, 3/20/2026, 3/20/2027) .
Equity Ownership & Alignment
Beneficial Ownership (as of March 5, 2025)
| Holder | Shares Beneficially Owned | % of Class | Notes |
|---|---|---|---|
| Douglas L. Kennedy | 277,808 | 1.58% | Includes 10,077 ESPP shares and 28,905 RSUs |
- Stock ownership guidelines: CEO must maintain 3x base salary in Company stock; executives 1x; CEO awards under 2025 LTIP carry one-year post-vesting holding requirement .
- Compliance: All NEOs are in compliance with ownership guidelines .
- Anti-hedging and anti-pledging policies: Hedging and pledging of Company stock prohibited .
Outstanding and Unvested Equity (12/31/2024; stock price $32.05)
| Grant Date | Type | Unvested Units (#) | Market Value ($) | Unearned Performance Units (#) | Market/Payout Value ($) | Vesting Terms |
|---|---|---|---|---|---|---|
| 3/20/2020 | Phantom stock | 6,518 | 208,902 | — | — | Time-based (5 equal annual installments) |
| 3/20/2021 | RSU | 5,653 | 181,179 | — | — | Time-based (5 equal annual installments) |
| 3/20/2022 | RSU | 11,026 | 353,383 | 18,374 | 588,887 | Time-based (5 equal); performance portion 3-year cliff |
| 3/20/2023 | RSU | 13,978 | 447,995 | 26,208 | 839,966 | Time-based (5 equal); performance portion 3-year cliff |
| 3/20/2024 | Phantom stock units | 10,321 | 330,788 | 15,482 | 496,198 | Time-based (3 equal); performance portion 3-year cliff |
- Options: No outstanding options for any NEO as of 12/31/2024 .
- 2024 vesting: Kennedy had 7,168 units vest in 2024; value realized $171,459 .
Insider Selling Pressure, Pledging, Hedging
- Selling pressure drivers: Ongoing annual vesting (time-based) and potential 3-year cliff vest (performance-based) could create liquidity events; however, CEO must retain 100% of net shares until guideline achieved and has a one-year post-vesting holding period on 2025 LTIP awards; hedging and pledging are prohibited, reducing forced-sale or collateral risk .
Employment Terms
| Term | Detail |
|---|---|
| Employment start (CEO) | Joined Bank in 2012 as CEO; CEO/President of PGC and the Bank since 2012 |
| Agreement term | Three-year term; auto-extends one year on each Jan 1 unless notice ≥30 days prior; base salary cannot be decreased without consent |
| Participation | Eligible for bonus, short- and long-term incentives, and benefit plans applicable to executive officers |
| Termination (without CIC): Severance | If involuntary termination without cause or resignation for good reason: greater of 2x base salary or remaining-term base salary, paid in installments over two years |
| Change-in-control (CIC) | If terminated without cause or resign for good reason within 24 months of CIC: lump sum = 3x (base salary + greater of (average 3-year annual cash bonus at minimum target) or most recent annual bonus); COBRA-equivalent monthly cash payments up to 36 months (18 months COBRA + up to 18 months individual policy reimbursement, capped at COBRA rate) |
| Restrictive covenants | Non-compete and non-solicit for one year post-termination (other than following CIC, terms may differ per agreement) |
| Clawback | All EPP awards (cash and equity) subject to clawback |
| Tax gross-ups | No 280G excise tax gross-ups in executive agreements |
| CIC equity vesting | Company policy states double-trigger equity acceleration (CIC + qualifying termination) ; award footnotes indicate immediate vesting upon CIC for certain outstanding RSUs/units (award agreement specific) |
Compensation Structure Analysis
- Mix and risk: Emphasis on at-risk pay maintained; LTI remains larger than STI for NEOs, with 60% of LTI performance-based (up from 50% pre-March 2023), strengthening alignment with multi-year outcomes .
- Instrument shift: 2024 grants used cash-settled phantom stock units vs. prior RSUs, reducing potential share issuance while preserving alignment and retention .
- STI calibration: Despite adjusted performance at ~102% of budget, Committee set Company rating at Target; CEO’s Target+ individual rating yielded a 90% of salary payout, indicating balanced discretion amid rate-driven industry headwinds .
- Retention overlay: Deferred Compensation Retention Award renewed (2022–2027) with $100k quarterly contributions for Kennedy (interest credited at WSJ prime, capped at 7.5%), reinforcing retention independent of equity market volatility; 2024 contribution $400,000; aggregate nonqualified balance $2,417,107 with above-market interest reported in SCT .
Performance & Track Record
Pay Versus Performance and Company Outcomes
| Year | SCT Total – Kennedy ($) | Compensation Actually Paid – Kennedy ($) | Company TSR (Value of $100) | Peer Group TSR (Value of $100) | Net Income ($m) | Diluted EPS |
|---|---|---|---|---|---|---|
| 2020 | 2,214,020 | 2,499,668 | 74.42 | 91.29 | 26.19 | 1.37 |
| 2021 | 2,523,657 | 3,753,878 | 116.48 | 124.74 | 56.62 | 2.93 |
| 2022 | 3,070,048 | 3,239,967 | 123.17 | 116.10 | 74.25 | 4.00 |
| 2023 | 3,004,327 | 2,478,130 | 99.38 | 115.64 | 48.85 | 2.71 |
| 2024 | 2,699,356 | 2,908,284 | 107.60 | 130.90 | 32.99 | 1.85 |
Selected 2024 execution highlights:
- NYC expansion: 13 teams; $850 million core relationship deposits vs. $450 million target .
- Noninterest-bearing deposit growth: +$155 million (16% YoY); ranked ~90th–91st percentile vs. peer groups .
- Rebranding: Bank rebranded to Peapack Private Bank & Trust on Jan 1, 2025 .
- Employer recognition: American Banker “Best Banks to Work For” (7th consecutive year, 2018–2024); Crain’s Best Places to Work – NYC .
Equity Ownership & Alignment (Supplemental Details)
| 2024 Stock Awards Vested | Shares | Value ($) |
|---|---|---|
| Douglas L. Kennedy | 7,168 | 171,459 |
Nonqualified deferred compensation (as of 12/31/2024):
| Name | 2024 Company Contributions ($) | Aggregate Earnings ($) | Aggregate Balance ($) |
|---|---|---|---|
| Douglas L. Kennedy | 400,000 | 158,013 | 2,417,107 |
Board Governance
- Committee memberships: CEO Kennedy serves on no Board committees; all members of Audit, Compensation, Nominating, and Risk Committees are independent; Chairs are independent .
- Board leadership: Separate independent Chair; independent director executive sessions at least semi-annually .
- Attendance: Board and Bank each held 11 meetings in 2024; every director attended ≥75% of Board and committee meetings .
- Director compensation: Kennedy, as an employee director, receives no additional director pay .
Investment Implications
- Alignment: High “skin in the game” (1.58% ownership) plus robust ownership and holding requirements, heavy performance-based LTI (60%), and anti-hedging/pledging policies support shareholder alignment and reduce risk of misaligned incentives or collateral-driven selling .
- Retention and supply/demand of shares: Multi-year vesting and 3-year performance cliffs stagger realizations; deferred cash retention program (through 2027) adds non-equity retention, lowering forced monetizations; CEO’s 2024 STI paid at 90% of salary and ongoing vesting may incrementally supply stock for withholding but policy-imposed holds curb trading flow-through .
- Risk controls: Clawback policy, no excise tax gross-ups, and independent committee oversight signal governance discipline; CIC terms (3x base + bonus) are standard for bank peers; equity acceleration language suggests careful review of award agreements by grant year (policy states double-trigger; some outstanding awards disclose CIC acceleration) .
- Execution risk and upside: 2024 adjusted performance met/beat budget on EPS, with Committee conservatism (Company rated Target) amid rate-driven headwinds; NYC expansion outperformance and deposit mix improvements indicate strategic progress, supportive for medium-term TSR and LTI metric realization .
Overall: Pay-for-performance design, meaningful ownership, and explicit retention mechanisms are supportive of alignment and continuity. Watch for how 3-year performance awards settle vs. peer-relative EPS/TSR/core deposit/credit metrics, and any divergence between stated CIC equity policy and legacy award agreements at a potential transaction milestone .