Bridgewater Bancshares, Inc._2024 Proxy Statement
COMPENSATION DISCUSSION AND ANALYSIS
performance and consistent with the design of our program, the Compensation Committee made the following executive compensation decisions for fiscal year 2023: Base salaries . Current NEO base salaries were established in 2022 based on Pearl Meyer’s assessment of our peer compensation in 2022, as was previously disclosed in the Company’s 2022 proxy statement. Short Term Incentives . Based on 2023 performance, our NEOs’ annual incentives were earned at between 45% and 53% of target under the Company’s short term incentive plan. Long Term Incentives . To continue to strengthen alignment with the market and provide a balance between performance and retention, the Compensation Committee decided to continue use of restricted stock units as part of granting long term incentives to the NEOs for 2023. Base Salary Our Compensation Committee reviews and approves the base salaries of our NEOs and relied on the recommendations of Pearl Meyer, survey data from industry resources and individual considerations in setting the base salary for each of our NEOs. Salary levels are typically reviewed annually as part of our performance review process and upon a promotion or other change in job responsibility. The Compensation Committee did not review or approve any changes to NEO base salaries during 2023. Short Term Incentive Plan The Company’s short term incentive plan (“STI Plan”) for NEOs is based in equal part on the Company’s pre provision, pre-tax net revenue (“PPNR”), a non-GAAP financial measure (see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” in the 2023 Form 10 - K for further details), and the individual performance goals of each NEO, as determined at the discretion of the Compensation Committee. The Compensation Committee believes PPNR is the best overall objective metric for evaluating the NEOs’ performance and believes the subjective evaluation of each NEO’s achievements provides the Compensation Committee with the opportunity to specifically tailor compensation commensurate to the contributions of each NEO individually and as a collective leadership team. On a year-by-year basis, the Compensation Committee structures the PPNR component of the STI Plan by selecting PPNR goals under which bonuses may be earned. Our NEOs are eligible to earn a portion of their target bonuses if the Company attains a sufficient level of PPNR performance. The Compensation Committee selects PPNR performance goals to establish threshold, target, and maximum metric achievement levels and payout percentages. If we fail to attain the threshold level of the PPNR performance goal, our NEOs earn no amount of their target bonuses subject to the PPNR metric. If we achieve a PPNR exceeding the threshold amount but less than 100% of the target performance goal, our NEOs earn between the threshold payout percentage and the amount of their target bonuses subject to the metric, with actual payouts determined based on a sliding scale. If we achieve a PPNR exceeding the target performance goal but less than an established maximum performance level amount, our NEOs earn between 100% of their target bonuses and the maximum payout percentage subject to the metric, with actual payouts determined based on a sliding scale. On a year-by-year basis, the Compensation Committee structures the subjective component of the STI Plan by reviewing and approving individual and Company performance goals under which bonuses may be earned. Actual payouts are established based on a subjective evaluation by the Compensation Committee on the achievement by each NEO and the Company of the approved performance goals. For 2023, the annual incentive opportunity was set at 75% of the annual base salary of the CEO and 60% of the annual base salary of each non-CEO NEO. The annual cash bonus for each NEO was determined in equal part based on the Company’s PPNR metric and individual performance goals.
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Bridgewater Bancshares, Inc.
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