Johnny Lee
About Johnny Lee
Johnny Lee, age 62, is President of RBB Bancorp and President/CEO of Royal Business Bank; he joined RBB in June 2023 and was appointed a director effective January 1, 2025. He holds a Master of International Management from Thunderbird and a B.A. from Willamette University, bringing 35+ years of banking experience across strategic planning, commercial banking, international trade finance, and credit risk management . 2024 context: RBB’s net income fell to $26.7M (EPS $1.47) amid rate and credit headwinds, while tangible book per share rose to $24.51, NIM exited Q4 at 2.76%, and the company executed $20.7M of buybacks and $11.7M of dividends; capital remained strong (CET1 17.94%) . Long-term incentives added PRSUs with relative TSR, ROAA, and ROATCE metrics in 2024, signaling an increased focus on performance alignment .
Board Governance: Service, Committees, Dual-Role Considerations
- Board service: Appointed director January 1, 2025; not independent due to his executive role (President of the Company; President/CEO of the Bank) .
- Committees: Directors Loan; Information Technology; Community Reinvestment Act (member) .
- Governance structure: Independent Chair (Christina Kao) appointed May 2024; independent director executive sessions occur at least twice annually, mitigating CEO/Director concentration risk .
- Succession: December 2024 8-K outlined Johnny Lee’s elevation to Bank CEO 1/1/2025, President of the Company 1/1/2025, and planned Company CEO transition slated for May 22, 2025; confirm status in subsequent filings/IR as needed .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| East West Bank | Senior Managing Director; Head of International & Commercial Banking | 2021–2023 | Led international/commercial banking; contributed to growth initiatives . |
| East West Bank | Head of Venture Lending & Emerging Technologies | 2018–2023 | Built innovation/venture lending capabilities . |
| East West Bank | Managing Director & Chief Administrative Officer, US Greater China (Bridge) | 2015–2018 | Drove cross-border banking platform and administration . |
| East West Bank | Managing Director, International Banking Group, Corporate Banking Division | 2013–2015 | Expanded international/corporate banking coverage . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No public-company directorships or external roles disclosed for Johnny Lee . |
Fixed Compensation
| Component | 2023 (rate/notes) | 2024 | 2025 (effective) |
|---|---|---|---|
| Base Salary | Employment agreement minimum $575,000 (effective 7/20/2023) | $584,000 base; +1.57% YoY | $600,000 effective 1/1/2025 per Second Amendment . |
| Target Annual Cash Bonus (% of salary) | 50% eligible in 2023 (partial year) | 60% target | Not separately disclosed; target bonus included in CIC severance formula . |
Notes: 2024 say-on-pay support was ~96%, and 2024 compensation design separated cash AIP from long-term equity, adding PRSUs for performance alignment .
Performance Compensation
2024 Annual Incentive Plan (AIP) – Scorecard and Payout
| Metric | Weight | Threshold | Target | Max | 2024 Result | % Achieved | Payout Contribution |
|---|---|---|---|---|---|---|---|
| Earnings Per Share | 35% | $1.68 | $2.12 | $2.76 | $1.47 | 0% | 0% |
| Return on Avg Assets (ROAA) | 15% | 0.80% | 1.00% | 1.30% | 0.44% | 0% | 0% |
| Efficiency Ratio | 5% | 55% | 50% | 45% | 61% | 0% | 0% |
| Leadership/Board Discretion | 5% | 80% | 100% | 130% | 130% | 150% | 8% |
| NPLs / Loans HFI | 5% | 1.04% | 0.94% | 0.84% | 2.64% | 0% | 0% |
| Loan Growth ($MM) | 15% | 151.7 | 284.2 | 369.5 | 31.0 | 0% | 0% |
| Retail Deposit Growth ($MM) | 10% | 139.3 | 220.9 | 287.1 | 157.9 | 61% | 6% |
| DDA % of Deposits | 10% | 18.1% | 19.3% | 20.6% | 17.5% | 0% | 0% |
| Total | 100% | Overall score 14% |
- AIP target: 60% of salary; Scorecard result converted to cash payout = 8% of base ($47,795), with a supplemental 10% of base ($58,400), totaling 18% ($106,195) .
- Rationale: Discretion recognized leadership in consent order remediation, ICFR remediation, management transition, and talent recruitment .
2024 Long-Term Equity Incentives (granted 3/20/2024 unless noted)
| Award | Shares/Units | Vesting | Notes/Value |
|---|---|---|---|
| Time-based RSUs | 8,221 | 33.3% on each anniversary in 2025/2026/2027 | Grant-date FV $145,923 . |
| PRSUs – TSR (target) | 4,110 | Cliff vest post-FY2026 filing (Q1’27) based on performance | Relative TSR vs peer group; 50% PRSU weighting; up to 150% payout . |
| PRSUs – ROAA (target) | 2,055 | Cliff vest post-FY2026 filing based on absolute ROAA | 25% PRSU weighting . |
| PRSUs – ROATCE (target) | 2,055 | Cliff vest post-FY2026 filing based on absolute ROATCE | 25% PRSU weighting . |
| RSUs (2/21/2024) – 2023 equity-settled AIP | 3,294 | 33.3% on each anniversary in 2025/2026/2027 | Grant-date FV $57,777 . |
| RSUs (7/20/2023) – Employment agreement | 11,000 | 50% on 2025 anniversary; 50% on 2026 anniversary | 12/31/24 MV $225,390 . |
Clawbacks: Company maintains (1) a discretionary malus/clawback tied to unsafe/unsound practices and policy violations and (2) a mandatory SEC/Nasdaq-compliant restatement clawback for “excess” incentive-based pay during the 3-year lookback .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/24/2025) | 5,943 shares; <1% of class (17,738,627 shares outstanding) . |
| Unvested RSUs as of 12/31/2024 | 11,000 (grant 7/20/2023); 3,294 (2/21/2024); 8,221 (3/20/2024) . |
| PRSUs (target) as of 12/31/2024 | 8,221 (3/20/2024) . |
| Options | None disclosed for Johnny Lee . |
| Vesting schedule (insider supply) | 7/20 grants vest on 7/20/2025 and 7/20/2026 (5,500 each); 2/21 and 3/20 grants vest 33.3% on 2/21 and 3/20 in 2025–2027; potential selling pressure around these windows . |
| Ownership guidelines | NEOs: 1× base salary; CEO: 2× salary (measured at $18/share); Lee compliance date June 30, 2028; only CRO Yeh has met requirement as of proxy date . |
| Hedging/pledging | Prohibited for executives and directors . |
Employment Terms
| Term | Key Economics | Source |
|---|---|---|
| Agreement | Initial 3-year term (auto-renews) dated 7/20/2023; amended Nov 20, 2024 and Dec 18, 2024 . | |
| Base salary | $575,000 (2023); $584,000 (2024); $600,000 effective 1/1/2025 . | |
| No-CIC severance | 12 months of salary (salary continuation) if terminated without cause (updated to 12 months in 2024 amendments) . | |
| CIC severance (double trigger) | If terminated without cause or for material adverse alteration after CIC: 18 months of salary + 100% of annual target bonus + 18 months medical/dental continuation; RSUs issuance rights per agreement . | |
| Termination/CIC examples (12/31/2024) | Termination w/o cause: $583,625; CIC termination: $1,225,613 + ~$12,656 benefits + equity accelerations pro rata per plan terms; RSUs/PRSUs acceleration mechanics disclosed . | |
| Equity acceleration | All unvested awards vest upon CIC; PRSUs pro-rated for months in performance period; RSUs accelerate in full only if CIC consideration is solely cash . | |
| Other | Auto allowance/perqs; 401(k) match; dividends on vested RSUs among “All Other Compensation” ($18,000 perqs; $13,909 match; $5,761 dividends in 2024) . |
Compensation Structure Analysis
- Shift to performance-based equity: 2024 introduced PRSUs with 50% weighting on TSR and profitability metrics; previously awards were primarily RSUs tied to prior-period bonuses .
- Cash vs equity mix: For 2024, AIP cash payout for Lee was 18% of base vs 60% target; equity awards (time-based and performance-based) comprised the majority of grant-date LT value, tilting mix toward long-term alignment .
- Target competitiveness: Consultant benchmarking indicated aggregate NEO target pay at market median; CEO target below median (pre-succession), suggesting room to adjust as CEO responsibilities transition fully to Lee .
Performance & Track Record
| KPI (company-level) | 2023 | 2024 | Notes |
|---|---|---|---|
| Net income ($MM) | 42.5 | 26.7 | Down due to rate environment and higher credit provisions; assets ~ $4B both years . |
| Tangible book value/share | $23.48 | $24.51 | +4% YoY; share repurchases of $20.7M and dividends $11.7M . |
| NIM (exit 4Q) | — | 2.76% | Expanded from 2.67% in 2Q24 . |
| CET1 ratio | — | 17.94% | Strong capital; also TCE 11.08%, Total cap 24.49%, leverage 11.92% . |
Achievements impacting AIP “Leadership” score: cleared consent order within a year, remediated material weaknesses in ICFR, executed management transitions, and recruited key talent including CFO .
Say-on-Pay, Peer Group, and Governance
- Say-on-Pay: ~96% approval at 2024 annual meeting; shareholder outreach covered ~30% of outstanding shares .
- 2024 Peer Group: Listed U.S. community/regional banks in the $2–10B asset, $200M–$1B market cap range for benchmarking (e.g., Bank of Marin, Heritage Financial, Hanmi, Preferred Bank) .
- Governance protections: Independent CNG Committee and Chair; clawbacks; ownership guidelines; prohibition on hedging/pledging; no tax gross-ups; no SERP; no option repricing .
Director Compensation (Context)
- Non-employee directors receive cash retainers and RSUs; committee chair RSUs; meeting fees per policy. Employee directors (like Lee) are not listed among non-employee director compensation recipients, indicating they do not receive director retainers separate from executive pay .
Vesting Schedules and Potential Insider Supply (Key Dates)
- 7/20/2023 RSUs: 5,500 vest on 7/20/2025; 5,500 on 7/20/2026 .
- 2/21/2024 RSUs: ~1,098 vest on 2/21 each in 2025/2026/2027 .
- 3/20/2024 RSUs: ~2,740 vest on 3/20 each in 2025/2026/2027 .
- PRSUs: cliff vest after FY2026 reporting (Q1 2027), 0–150% of target based on TSR, ROAA, ROATCE .
Employment & Contracts (Retention Risk)
- Term: Automatically renewing; severance provides meaningful protection (12 months w/o cause; 18 months + 100% target bonus + benefits upon double-trigger CIC), reducing near-term departure risk .
- Equity cadence: Multi-year vesting through 2027 with performance linkage supports retention and performance alignment .
- Non-compete/solicit: Not specifically disclosed in proxy summary for Lee; general restrictive covenants referenced across NEO agreements .
Investment Implications
- Pay-for-performance alignment improved: Introduction of PRSUs tied to relative TSR and profitability should better align realized pay with long-term outcomes; 2024 AIP paid well below target given sub-target financial results, while leadership achievements were recognized via discretion, a moderate mixed signal for strict formulaic pay .
- Low near-term selling pressure but identifiable windows: RSU tranches vesting on 7/20, 2/21, and 3/20 in 2025–2027 create predictable liquidity windows; anti-hedging/pledging policy mitigates alignment risk .
- Retention risk contained: Double-trigger CIC economics (18 months salary + 100% target bonus + benefits) and multi-year equity vesting reduce voluntary exit risk during strategic transition; salary step-up to $600K effective 2025 reflects expanded scope as Bank CEO and planned Company CEO succession .
- Governance mitigants: Independent Chair and majority-independent board offset dual-role concerns; robust clawbacks and ownership guidelines provide shareholder-friendly guardrails .
References: All data above are sourced from RBB’s 2025 DEF 14A, related 8-Ks, and 2024 DEF 14A as cited inline.