Okan I. Akin
About Okan I. Akin
Senior Executive Vice President and Chief Risk Officer of Stellar Bancorp, Inc. and Stellar Bank; 54 years old; MBA and BA in Finance & Marketing from the University of Houston . Career spans Independence Bank (Senior Credit Officer → President in 2009 → President & CEO 2010–2013), followed by Allegiance Bank leadership roles (Regional President, Deputy Chief Credit Officer, Chief Administration Officer; later President & Chief Risk Officer) prior to the Stellar merger . Company performance context: ROAA/ROAE/efficiency ratio were 1.01%/6.62%/61.87% in Q2’25 and 0.97%/6.30%/63.69% in Q3’25; net income was $26.4M in Q2’25 and $25.7M in Q3’25 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Independence Bank | Senior Credit Officer | 2002–2009 | Built credit discipline; set foundation for later leadership |
| Independence Bank | President | 2009–2010 | Elevated to top operating role |
| Independence Bank | President & CEO | 2010–2013 | Led bank to acquisition by Allegiance Bank in 2013 |
| Allegiance Bank | Regional President; Deputy Chief Credit Officer; Chief Administration Officer | 2013–2016 (post-acquisition) | Post-merger integration and credit oversight |
| Allegiance Bank/Allegiance | Executive Vice President; Chief Administrative Officer; later President & Chief Risk Officer | 2016–2022 | Risk governance and administrative leadership pre-Stellar merger |
| Stellar Bancorp & Stellar Bank | Senior EVP & Chief Risk Officer | 2022–present | Enterprise risk leadership for combined bank |
External Roles
No external directorships or committee roles disclosed for Akin in the proxy .
Fixed Compensation
- Structure overview (company-wide): base salary plus employee benefits (401(k), health, life insurance) with limited perquisites; no excise tax gross-ups; pre-clearance for trading; hedging/short sales prohibited .
- Specific salary/bonus amounts for Akin are not disclosed (Akin is not a Named Executive Officer in the Summary Compensation Table) .
Performance Compensation
Annual Incentive Plan (AIP) – Plan Design and 2024 Outcome
- All officers (including executive officers) participate; formulaic payout based on company metrics set annually .
- 2024 payout factor for NEOs: 102.33% of target (indicative of plan calibration and results) .
| Metric | Weight | Minimum (0%) | Target (100%) | Maximum (150%) | Actual Result | Notes |
|---|---|---|---|---|---|---|
| ROATCE | 50% | 7% | 11.25%–12.25% | 14.0% | 12.00% | Core earnings alignment |
| PTPP ROAA | 30% | 1.10% | 1.40%–1.55% | 1.75% | 1.35% | Core performance, operating leverage |
| NCO/Avg Loans (bps) | 20% | 35 | 25–20 | 5 | 9 | Asset quality discipline |
- Payout curve: linear interpolation between thresholds/targets/max; 2024 purchase accounting accretion and CDI amortization not excluded (non-GAAP reconciliations referenced in Annex I) .
Long-Term Incentive (LTI) – RSAs and PSUs
- 2024 grants: RSAs vest ratably over 3 years; PSUs cliff-vest after 3-year performance period (Jan 1, 2024–Dec 31, 2026) measured by TSR vs S&P U.S. SmallCap Bank Index .
- PSU vesting outcomes:
- Threshold: <20th percentile TSR = 0% of target
- Target: 45th–55th percentile TSR = 100% of target
- Max: ≥75th percentile TSR = 200% of target; straight-line interpolation between levels .
- 2024 program mix: Non-CEO/Executive Chairman NEOs received 50% PSUs / 50% RSAs; this structure signals balanced risk/retention design likely applied consistently across senior executives .
Equity Ownership & Alignment
Beneficial Ownership
| Metric | Mar 31, 2023 | Mar 26, 2024 |
|---|---|---|
| Shares Beneficially Owned | 85,947 (incl. 36,216 owned; 6,564 PSAs; 43,167 RSAs) | 77,338 |
| Ownership as % of Outstanding | <1% (52,954,985 shares outstanding) | <1% (implied; table shows “*” for <1%) |
- Pledging: Proxy footnotes identify pledged shares for certain insiders (e.g., Egge: 23,032; Penland entity: 724,636); no Akin pledging disclosure noted in the beneficial ownership footnotes provided .
- Stock ownership guidelines (adopted Feb 2025): All other executive officers must hold stock equal to 2× base salary, generally within five years; plus one-year post-vest holding for shares vesting from 2025 grants .
- Clawback policy (effective Oct 2, 2023): Recovery of erroneously awarded incentive-based compensation following an accounting restatement per SEC Rule 10D-1 and NYSE standards .
- Insider trading policy: pre-clearance required; hedging, short sales, and derivatives prohibited; pledging discouraged and requires prior notice to the Compliance Officer .
Employment Terms
Executive Severance Plan (adopted May 21, 2025)
Eligible titles include Senior Executive Vice President; Akin is Senior EVP & CRO and thus eligible .
| Provision | Tier I (non-NEO) | Tier II (NEO within prior 2 years) |
|---|---|---|
| Salary Continuation | 100% of base salary over 12 months | 200% of base salary over 24 months |
| Pro Rata Bonus | Pro-rated target bonus for year of termination | Pro-rated target bonus |
| Benefit Payment | Lump-sum to assist with 12 months of medical/dental/vision coverage | Lump-sum for 18 months coverage |
| Conditions | Release of claims; compliance with restrictive covenants; 409A/280G adjustments; offsets vs other severance arrangements | |
| Golden Parachute Limits | Subject to FDIA/12 C.F.R. Part 359 limits; requires regulatory approval if applicable |
Change-in-Control Economics (Omnibus Plan)
- If awards are not assumed/substituted, unvested awards become fully vested; restrictions lapse; performance conditions deemed achieved at target (subject to 409A) .
- Change-in-control definitions include acquisition of ≥50% voting power, board turnover, sale of substantially all assets, merger/reorg, bank subsidiary sale, liquidation/dissolution (with 409A conformity for payment events) .
- Proxy description notes CoC severance plan benefits generally equal 2× salary+target bonus (3× for Mr. Franklin), with associated equity vesting mechanics per award agreements .
Performance & Track Record
- Q2’25: Net income $26.4M; ROAA 1.01%; ROAE 6.62%; efficiency ratio 61.87% .
- Q3’25: Net income $25.7M; ROAA 0.97%; ROAE 6.30%; efficiency ratio 63.69% .
- Context: Credit quality focus reflected in low net charge-offs and AIP’s explicit NCO metric; margin management and expense discipline highlighted in MD&A and earnings call commentary .
Governance, Peer Group, and Shareholder Feedback
- Compensation governance: majority of executive comp at-risk; diverse metrics; independent consultant; stock ownership and one-year post-vest holding; clawback; no excise tax gross-ups; limited perquisites .
- Compensation peer group: refreshed in 2024 post-merger for comparability (asset size, market cap, net income); details referenced but constituent names not listed here .
- Say-on-pay 2025: Votes For 32,898,057; Against 2,050,358; Abstentions 75,450; Broker non-votes 9,281,033 .
Compensation Structure Analysis
- Shift to PSUs tied to relative TSR and three-year cliff vesting increases performance orientation; RSAs provide retention with three-year ratable vesting .
- AIP metrics incorporate ROATCE, PTPP ROAA, and NCO/Avg Loans, balancing profitability, core operating performance, and asset quality; 2024 payout at 102.33% of target signals moderate over-target performance without excessive upside .
- Policy enhancements: Adoption of stock ownership guidelines and post-vest holding in 2025 further aligns management with long-term shareholder value; robust clawback strengthens accountability .
Risk Indicators & Red Flags
- Pledging allowed with prior notice (discouraged), not outright banned; management monitors outstanding pledges—governance soft spot relative to best-in-class policies; no Akin pledges disclosed .
- Golden parachute limitations and regulatory approvals required mitigate excessive severance risk for bank executives .
- Executive trading pre-clearance and hedging prohibitions reduce misalignment risk .
Equity Ownership & Alignment — Detailed
| Element | Detail |
|---|---|
| Ownership guidelines | 2× base salary for executive officers; 5-year accumulation period |
| Post-vest holding | One-year holding period for shares vesting from 2025 grants |
| Clawback | Recovery of erroneous incentive comp post-restatement under SEC/NYSE rules |
| Insider trading | Pre-clearance; no hedging/shorts/derivatives; pledging discouraged and requires notice |
| Beneficial ownership | 85,947 shares at Mar 31, 2023; 77,338 shares at Mar 26, 2024; <1% ownership |
Investment Implications
- Alignment: AIP and PSU design tie pay to profitability, core operating metrics, asset quality, and relative TSR—appropriate for a CRO whose remit centers on disciplined risk-adjusted returns; 2025 ownership and holding policies further align incentives with long-term value creation .
- Retention and selling pressure: RSAs vest over three years and PSUs cliff-vest end-2026; added one-year post-vest hold from 2025 likely moderates near-term selling pressure from vesting events .
- Severance economics: As Senior EVP, Akin is covered by the Executive Severance Plan; Tier I terms imply manageable severance costs (12 months salary, pro rata bonus, benefits support), reducing change-of-control overhang relative to higher-multiple packages .
- Governance watchpoints: Pledging permitted (with oversight) is a minor risk; absence of public NEO-level pay disclosure for Akin limits transparency—monitor Form 4s and future proxies for ownership changes and award grants .
- Execution context: Company ROAA/ROAE and efficiency trends in 2025 reflect tighter margins and higher credit provisioning vs 2024; continued low net charge-offs and disciplined expense management support risk-aware growth under CRO oversight .