John Ciulla
WEBSTER FINANCIALAbout John Ciulla
John R. Ciulla is Chairman of the Board and Chief Executive Officer of Webster Financial Corporation (WBS), serving as CEO since January 2018 and as Chairman from April 2020 to January 2022 and again effective February 1, 2024. He is 59 and has over 20 years of leadership experience in financial services, including prior roles as President, Head of Commercial Banking, and Chief Credit Risk Officer at Webster, and Managing Director at The Bank of New York (1997–2004) . Under his leadership, Webster reported 2024 total revenue of $2.59B, net income of $768.7M, adjusted PPNR of $1.415B, adjusted ROAA of 1.23%, and adjusted ROE of 10.54% . Pay-versus-performance disclosure shows a 2024 total shareholder return (TSR) value of $124.60 vs. $110.78 in 2023 and $99.37 in 2022 on an initial $100 investment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Webster Financial Corporation | Chairman of the Board | Apr 2020–Jan 2022; Feb 1, 2024–Present | Board leadership; governance, strategy, and CEO oversight . |
| Webster Financial Corporation | Chief Executive Officer | Jan 2018–Present | Led strategy and execution; drove top-quartile peer performance in PPNR/ROAA; liquidity and capital enhancements . |
| Webster Financial Corporation | President; EVP, Head of Commercial Banking; Chief Credit Risk Officer | 2004–2018 | Built and led key banking segments; risk management leadership . |
| The Bank of New York | Managing Director | 1997–2004 | Senior leadership in large financial institution . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American Bankers Association | Board Member | Not disclosed | Industry advocacy and policy insight . |
| Mid-Size Bank Coalition of America | Executive Committee Member | Not disclosed | Peer leadership on regulatory and strategy topics . |
| AdvanceCT | Board Member | Not disclosed | State economic development engagement . |
| Connecticut Business Roundtable | Former Chair and Board Member | Not disclosed | Regional economic leadership and stakeholder engagement . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,088,462 | 1,100,000 | 1,100,000 |
| Target Annual Cash Incentive ($) | Not disclosed | Not disclosed | 1,375,000 |
| Non-Equity Incentive Paid ($) | 1,688,750 | 1,031,250 | 1,306,250 |
| All Other Compensation ($) | 475,528 | 352,258 | 295,102 |
Notes:
- 2024 target total direct compensation at target (salary + target bonus + LTI): $5,775,000 .
Performance Compensation
Annual Cash Incentive Plan (2024)
- Corporate component metrics and weights: Adjusted PPNR (50%), Adjusted ROAA (50%). After strategic/peer adjustment, final corporate component funded at 95% of target .
| Metric | Threshold | Target | Maximum | Actual | Score | Weight | Weighted Score |
|---|---|---|---|---|---|---|---|
| Adjusted PPNR for corporate component score ($MM) | 1,364.0 | 1,624.4 | 1,884.8 | 1,500.8 | 76.2% | 50% | 38.0% |
| Adjusted ROAA for corporate component score (%) | 1.19% | 1.44% | 1.69% | 1.31% | 73.9% | 50% | 37.0% |
| Corporate Component Score Before Adjustment | 75.0% | ||||||
| Strategic/Peer Adjustment | +20.0% | ||||||
| Final Corporate Component | 95.0% |
- CEO 2024 annual incentive payout: Target $1,375,000; Funded at 95% → $1,306,250 .
Long-Term Incentive (LTI) Design
- Mix: 60% performance shares (PSUs), 40% time-vested restricted stock (RS). PSUs vest after a 3-year performance period; RS vests one-third annually over 3 years .
- Performance metrics and payout scale for PSUs (granted March 2024): 50% 3-year TSR vs compensation peer group; 50% 3-year ROE vs plan; payout 0%–150% with threshold at 50% .
2024 LTI Grants – John R. Ciulla
| Grant Date | Instrument | Shares/Units | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| 3/1/2024 | Time-vested RS | 27,889 | 1,318,034 | 1/3 on each anniversary starting 3/1/2025 . |
| 3/1/2024 | PSUs (Target) | 41,834 | 2,036,270 | 3-year cliff; payout 0%–150% based on TSR/ROE; scheduled vest 3/1/2027 . |
| 2024 Total LTI Target Value | 3,300,000 |
Additional context:
- “What we don’t do”: No single-trigger change-in-control (CIC), no option repricing, no excise tax gross-ups on parachutes, no dividends on unvested performance shares .
- Company currently does not grant stock options to employees .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (4/1/2025) | 264,598 shares; less than 1% of outstanding . |
| Unvested Time-Based RS (12/31/2024) | 7,328 (3/1/2022); 16,270 (3/1/2023); 27,889 (3/1/2024); total 51,487; market value shown per line at $55.22 on 12/31/2024 . |
| Unearned PSUs (12/31/2024) | 32,973 (3/1/2022); 27,723 (5/1/2023 – one-year cycle); 36,606 (5/1/2023 – 3-year cycle); 41,834 (3/1/2024); market values shown per line . |
| 2024 Shares Vested (Value Realized) | 67,373 shares vested; $3,174,004 value realized (no options exercised) . |
| Stock Ownership Guidelines | CEO requirement: 6x base salary; met as of 12/31/2024 . |
| Hedging/Pledging | Prohibited for directors and executive officers . |
| Insider Trading Policy | Policy and procedures in place; filed as Exhibit 19 to Form 10-K . |
Vesting calendar indicators (insider supply timing):
- RS from 3/1/2024 vests on 3/1/2025, 3/1/2026, 3/1/2027; PSUs from 3/1/2024 assessed through 12/31/2026 with vest 3/1/2027 (if earned) .
- Company conducts annual grants typically on March 1; avoids grants near material filings, and uses SEC/NYSE clawback in addition to company-wide clawback .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | No formal employment agreement in 2024 (post-Sterling merger retention agreements expired 1/31/2024) . |
| Non-Compete / Severance (non-CIC) | Upon termination without Cause or for Good Reason: lump sum equal to current base salary + pro-rated target annual cash incentive; up to 1 year medical/dental; outstanding LTI becomes vested/exercisable pro-rata based on time worked (provided shares held at least one year) . |
| Change-in-Control (CIC) | Double-trigger. If terminated not for Cause, death or disability, or resigns for Good Reason within 2 years post-CIC: 3x (salary + target cash incentive) for CEO; plus continuation of benefits for 3 years; 401(k) and SERP contribution equivalents for 3 years; outplacement; accelerated equity vesting upon such termination; no excise tax gross-up . |
Quantified payout illustrations (as of 12/31/2024):
- Non-CIC executive severance (involuntary termination without Cause/for Good Reason)
- Salary + Cash Incentive: $2,475,000; Benefits: $25,993; Accelerated Equity: $6,493,092; Total: $8,994,085 .
- CIC termination (involuntary not for Cause / Good Reason within CIC window)
- Salary + Cash Incentive: $8,800,000; 401(k)/SERP Equivalents: $447,564; Benefits: $145,659; Accelerated Equity: $10,526,202; Total: $19,919,425 .
Clawbacks and risk safeguards:
- SEC/NYSE clawback plus firm-wide recoupment policy (applies even absent misconduct), anti-hedging/anti-pledging, no single-trigger CIC, no option repricing, no excise tax gross-ups .
Board Governance
- Role: Chairman of the Board (current) and CEO; Executive Committee Chair .
- Independence: Not independent (executive officer); 11 of 12 directors are independent; all committees are 100% independent .
- Lead Independent Director: Richard O’Toole, with robust responsibilities including agenda approval, executive session leadership, investor/regulator liaison, and CEO evaluation input .
- Board attendance: Directors standing for re-election attended at least 95% of Board and committee meetings in 2024 .
- Dual-role implications: Board explicitly pairs combined Chair/CEO with a strong Lead Independent Director structure, independent committees, and regular executive sessions to mitigate concentration of power .
Director compensation (relevance to dual role): As an employee director, Ciulla receives no additional director pay .
Say‑on‑Pay & Compensation Committee
- 2024 Say‑on‑Pay (held April 24, 2024): ~98% approval, signaling strong investor support for pay program; no structural changes in 2024 .
- Independent compensation consultant (CAP) engaged; annual review of peer group and risk assessment; program emphasizes variable, equity-based, and performance-contingent pay .
- 2024 Compensation Peer Group (selected for similar size/model): First Citizens, M&T, Huntington, Regions, Flagstar (NYCB), Comerica, Zions, First Horizon, Western Alliance, Valley National, Synovus, Wintrust, BOKF, Cullen/Frost, Old National, F.N.B.; Webster assets $74.0B at peer selection point .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Total Revenue ($MM) | Not disclosed | Not disclosed | 2,590.3 |
| Net Income ($MM) | 644.3 | 867.8 | 768.7 |
| Adjusted PPNR ($MM) | 1,336.7 | 1,478.5 | 1,415.1 |
| Adjusted ROAA (%) | Not disclosed | Not disclosed | 1.23% |
| Adjusted ROE (%) | Not disclosed | Not disclosed | 10.54% |
Stock performance (value of $100 investment)
| Year | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Webster TSR ($) | 83.13 | 113.57 | 99.37 | 110.78 | 124.60 |
| KBW Regional Bank Index TSR ($) | 91.29 | 124.74 | 116.10 | 115.84 | 130.90 |
Strategic actions in 2024:
- Acquired Ametros (healthcare settlement administrator), creating Healthcare Financial Services segment with HSA Bank; expected low-cost, long-duration deposits and fee income .
- Formed private credit JV (MW Advisor, LLC) with Marathon Asset Management (Webster 50%); activities expected to begin 1H 2025 .
- Balance sheet optimization: reduced office CRE >20%, +$3.2B off-balance-sheet liquidity capacity, >$2B securities repositionings, RWA optimizations .
Compensation Structure Analysis
- Mix and leverage: Majority of CEO pay is variable; 60% of LTI in PSUs keyed to 3-year ROE and relative TSR, aligning with long-term value creation .
- Annual plan rigor: Two equally-weighted financial metrics (Adjusted PPNR, Adjusted ROAA) with explicit thresholds/targets/maxima; peer-relative overlay can adjust ±20%, used in 2024 to reach 95% funding amid top-quartile peer performance .
- Shareholder-friendly features: No single-trigger CIC, no option repricing, no excise tax gross-ups, strong clawbacks, anti-hedging/pledging .
- Governance and oversight: Independent comp consultant, defined peer group, and explicit risk assessments of incentives .
Risk Indicators & Red Flags
- Hedging/pledging prohibited (reduces misalignment risk) .
- No excise tax gross-ups; no single-trigger CIC; clawbacks extend beyond SEC/NYSE rule (shareholder-friendly) .
- Insider trading policy and 10b5‑1 governance referenced (mitigates MNPI risk) .
- Related party transactions policy and procedures in place; no material adverse findings disclosed (routine insider lending at market terms) .
Investment Implications
- Pay-for-performance alignment appears robust: 60% PSU weighting on multi-year ROE/relative TSR and cash plan tied to Adjusted PPNR/ROAA with peer overlay, leading to measured 95% payout in 2024 despite below-target plan metrics—reflecting top-quartile peer standing and strategic execution .
- Insider selling pressure: While options are not used, meaningful RS/PSU vest schedules cluster around early March, including 3/1/2025–2027 events; 2024 vesting realized $3.17M for Ciulla—monitor 10b5‑1 filings around these dates for liquidity-driven sales .
- Retention and change risk: CEO has standard non-CIC severance with pro-rata equity vesting and a competitive 3x CIC multiple (double-trigger); no gross-ups—adequate retention while limiting shareholder-unfriendly terms .
- Dual role governance mitigants: Strong Lead Independent Director mandate, fully independent committees, and frequent executive sessions reduce governance risk tied to combined Chair/CEO structure .
- Strategy execution: 2024 actions (Ametros acquisition, private credit JV, CRE de-risking, liquidity/capital improvements) plus top-quartile peer metrics support confidence in management’s operating discipline; watch 2025 JV scaling and healthcare deposits trajectory for incremental ROA lift .