UNITED STATES
FEDERAL DEPOSIT INSURANCE CORPORATION
Washington, D.C. 20429
SCHEDULE 14A | ||
Proxy Statement Pursuant to Section 14(a) of the | ||
Securities Exchange Act of 1934 | ||
Filed by the Registrant | | |
Filed by a Party other than the Registrant | |
Check the appropriate box: Preliminary Proxy Statement
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to §240.14a-12
Bank OZK
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
- No fee required.
- Fee paid previously with preliminary materials.
- Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
2024
Notice of Annual Meeting of Shareholders and Proxy Statement
18000 Cantrell Road
Little Rock, Arkansas 72223
NOTICE OF THE 2024 ANNUAL MEETING OF SHAREHOLDERS
DATE AND TIME
8:30 a.m. (Central Time) on May 6, 2024
PLACE
Bank OZK Headquarters, 18000 Cantrell Road, Little Rock, AR 72223
RECORD DATE
Close of business on February 27, 2024
ITEMS OF BUSINESS
- To elect the thirteen (13) director nominees proposed by the Board of Directors for a one-year term ending in 2025;
- To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2024;
- To approve, on an advisory, non-binding basis, the compensation paid to our named executive officers; and
- To transact such other business as may properly come before the meeting and any adjournment or postponement thereof.
NOTICE
As permitted by rules adopted by the Federal Deposit Insurance Corporation, we are primarily furnishing proxy materials to our shareholders via the Internet rather than mailing paper copies of the materials to each shareholder. Therefore, most shareholders will receive a Notice of Internet Availability of Proxy Materials with instructions about how to access the proxy materials via the Internet, how to vote your shares, and how to request a paper or electronic copy of our proxy materials, if you so desire. This notice, the proxy statement and the proxy card are first being distributed or made available, as the case may be, on or about March 15, 2024.
By Order of the Board of Directors,
George G. Gleason
Chairman and Chief Executive Officer
VOTING:
Your vote is important! Whether or not you plan to attend the meeting, we urge you to vote or submit your proxy as soon as possible so that your shares are represented at the meeting. Please vote your shares promptly in one of the following ways.
BY INTERNET: Visit www.proxyvote.com.
BY PHONE: Call 1-800-690-6903.
BY MAIL: Sign, date and return your proxy card.
IN PERSON: At the meeting on May 6, 2024.
The Board of Directors recommends that you vote "FOR" each director nominee included in Proposal 1 and "FOR" Proposals 2 and 3. The full text of each proposal is set forth in the accompanying proxy statement.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 6, 2024: The accompanying proxy statement and our 2023 annual report, which includes our Annual Report on Form 10-Kfor the fiscal year ended December 31, 2023, are available free of charge on our Investor Relations website (ir.ozk.com). You may also access the proxy statement and our 2023 annual report free of charge at www.proxyvote.com.
George G. Gleason
Nicholas Brown
March 15, 2024
Dear fellow shareholders:
On behalf of the Board of Directors, we are pleased to invite you to the Bank OZK 2024 Annual Meeting of Shareholders (the "Annual Meeting"), which will be held at our corporate headquarters, 18000 Cantrell Road, Little Rock, Arkansas 72223, on May 6, 2024 at 8:30 a.m. Central Time. Our Board has fixed the close of business on February 27, 2024, as the record date for the determination of shareholders entitled to receive notice of the Annual Meeting and to vote on all matters presented at the Annual Meeting or any adjournment or postponement thereof.
As you will see, 2023 was another year of record performance for our bank. Against a backdrop of industry turbulence, economic challenges and geopolitical uncertainty, we achieved record profitability, strong growth in both loans and deposits, strategic expansion of our team, and many other successes. Our 2,700+ talented and hard-working teammates deserve all of the credit for our numerous record results and accomplishments. In 2023, our diluted earnings per share, total loans, and deposits all reached record levels, increasing year-over-year by 29%, 27% and 28%, respectively. We also maintained favorable asset quality and excellent efficiency and returned over $310 million to our shareholders through increased common stock dividends and share repurchases.
The Board is proud of these efforts and remains focused, as always, on creating and maximizing long-term value for our shareholders through meaningful growth in earning assets, deposits, net income and earnings per share, while maintaining strong capital and liquidity levels.
Thank you for your support and investment in Bank OZK. Whether or not you plan to attend the Annual Meeting, your views are important to us, and we ask you to please cast your vote via the Internet, telephone, mail or in person at the Annual Meeting, as outlined in this proxy statement. We are excited to continue delivering value to our shareholders and customers in 2024 and beyond.
Sincerely,
George G. Gleason | Nicholas Brown |
Chairman of the Board of Directors and | Vice-Chairman and |
Chief Executive Officer | Presiding Independent Director |
TABLE OF CONTENTS | Page |
PROXY STATEMENT SUMMARY | 1 |
BOARD OF DIRECTORS | 5 |
Proposal 1 - Election of Directors | 5 |
Board Composition and Nomination Process | 5 |
Summary of Director Nominee Skills, Experiences and Qualifications | 7 |
Director Tenure and Diversity | 8 |
2024 Director Nominees | 9 |
Director Compensation Program | 15 |
2023 Director Compensation | 16 |
CORPORATE GOVERNANCE | |
Board Meetings and Committees | 17 |
Board Leadership Structure and Practices | 18 |
Shareholder Recommendations for Directors | 21 |
Our Core Values | 21 |
Corporate Responsibility Oversight | 21 |
Security Ownership of Management and Principal Shareholders | 22 |
Delinquent Section 16(a) Reports | 23 |
Equity Compensation Plan Information | 24 |
Related Person Transactions | 24 |
AUDIT MATTERS | |
Report of the Audit Committee | 25 |
Proposal 2 - Ratification of Independent Auditors | 26 |
Fees of Independent Registered Public Accounting Firm | 26 |
COMPENSATION DISCUSSION AND ANALYSIS | |
2023 Performance Highlights | 27 |
Executive Compensation Philosophy | 27 |
Key Features of our Executive Compensation Program | 28 |
Shareholder Feedback | 28 |
Compensation Decision Making Process | 28 |
2023 Peer Group | 29 |
2023 Executive Compensation Elements | 30 |
Additional Compensation Policies and Practices | 34 |
Compensation Committee Report | 36 |
Compensation Committee Interlocks and Insider Participation | 36 |
EXECUTIVE COMPENSATION TABLES | |
2023 Summary Compensation Table | 37 |
2023 Grants of Plan-Based Awards | 38 |
2023 Outstanding Equity Awards at Fiscal Year-End | 39 |
2023 Option Exercises and Stock Vested | 39 |
2023 Pension Benefits | 40 |
2023 Nonqualified Deferred Compensation | 40 |
Post-Employment Compensation | 41 |
2023 CEO Pay Ratio | 42 |
2023 Pay Versus Performance Table | 42 |
Proposal 3 - Advisory, Non-Binding Vote to Approve Executive Compensation | 45 |
OTHER INFORMATION | |
Shareholder Proposals for the 2025 Annual Meeting | 45 |
Questions and Answers About How to Vote Your Proxy | 46 |
Other Matters | 48 |
Appendix A - Calculation of Non-GAAP Financial Measures | A-1 |
18000 Cantrell Road
Little Rock, Arkansas 72223
PROXY STATEMENT SUMMARY
This summary highlights certain information contained in this proxy statement. It does not contain all of the information provided elsewhere in the proxy statement; therefore, you should read the entire proxy statement carefully before voting. For more complete information regarding our 2023 performance, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 ("2023 Form 10-K"). Our proxy materials are first being distributed or made available, as the case may be, on or about March 15, 2024. In this proxy statement, terms like "Company," "we," "us," and "our" refer to Bank OZK and its consolidated subsidiaries.
ANNUAL MEETING INFORMATION
Date and Time: | Location: | Record Date: |
Monday, May 6, 2024 | 18000 Cantrell Road | February 27, 2024 |
8:30 a.m. (Central Time) | Little Rock, AR 72223 | Close of business |
PROPOSALS AND VOTING RECOMMENDATIONS
Proposal | Description | Board Recommendation |
Election of Directors (Page 5) | FOR | |
1 | Our Board of Directors and Governance and Compensation Committee believe that the thirteen | |
director nominees possess the experience, qualifications, attributes and skills to provide effective | each nominee | |
oversight of management and set the strategic direction necessary for long-term value creation. | ||
2 | Ratification of PricewaterhouseCoopers LLP as Auditors for 2024 (Page 26) | FOR |
Our Board of Directors and Audit Committee believe the retention of PricewaterhouseCoopers | ||
LLP as our independent auditor for 2024 is in the best interests of our Company and shareholders. | ||
Advisory, Non-Binding Approval of Executive Compensation (Page 45) | ||
3 | We are seeking an advisory, non-binding vote to approve the 2023 compensation of our named | FOR |
executive officers, as described in the "Compensation Discussion and Analysis" section of this proxy | ||
statement.
WAYS TO VOTE
Your vote is important. Please vote as promptly as possible by using any of the following methods:
Internet | Telephone | In Person | |
Visit proxyvote.com | Sign, date and return your | Call 1-800-690-6903 | At the meeting in person |
proxy card |
This proxy statement contains forward-looking statements regarding our current expectations within the meaning of applicable securities laws and regulations. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the Federal Deposit Insurance Corporation ("FDIC"), including the Risk Factors section of our 2023 Form 10-K. We assume no obligation to update any of these forward-looking statements.
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2023 RECORD PERFORMANCE
We continued to deliver strong financial performance in 2023, with numerous record results.
$1.44 billion | $674.6 million |
Record Net Interest Income | Record Net Income Available to Common Stockholders |
Increased 26.0% in 2023 | Increased 23.2% in 2023 |
$5.87 | $1.03 billion |
Record Diluted Earnings Per Share | Record Pre-TaxPre-Provision Net Revenue* |
Increased 29.3% in 2023 | Increased 28.3% in 2023 |
5.16% | 33.67% |
Net Interest Margin | Record Efficiency Ratio |
Compared to 4.82% in 2023 | Compared to 35.75% in 2023 |
0.13% | 54th |
Net Charge-Off Ratio (Total Loans) | Consecutive Increase in Quarterly Dividend |
Compared to 0.04% in 2023 | Common stock dividends increased 12.7% in 2023 |
- See "Appendix A - Calculation of Non-GAAP Financial Measures" for reconciliation of Pre-TaxPre-Provision Net Revenue ("PPNR") to the most directly comparable GAAP measure.
GOVERNANCE HIGHLIGHTS
We are committed to sound corporate governance that promotes the long-term interests of our shareholders and aligns with our strategic objectives.
Active Independent Oversight | Effective and Sound Practices | Demonstrated Accountability |
- 12 of our 13 directors are independent and meet at least quarterly without our Chairman and CEO or other members of management present.
- Our Vice-Chairman and Presiding Independent Director has robust, defined duties set forth in our Corporate Governance Guidelines.
- Our Board reviews our CEO and executive management succession plan at least annually, and assesses candidates during Board and committee meetings and informal interactions.
- Our Governance and Compensation Committee annually reviews the CEO's performance and sets his compensation.
- All of our directors and executive officers are subject to sizable stock ownership guidelines and are prohibited from hedging or pledging our stock.
- We meet with shareholders and investors throughout the year to solicit input on a range of topics.
- Our Governance and Compensation Committee determines whether the Board possesses the appropriate mix of skills and perspectives on an annual basis.
- Shareholders owning 10% of common shares outstanding have the right to call a special meeting of shareholders.
- All directors are elected annually by a majority vote (plurality in contested elections) and subject to our director resignation policy.
- Our Board and Board committees conduct annual self-evaluations, assessing effectiveness, composition, focus and other matters.
- Our Board thoughtfully considers potential director candidates, including their experience, independence, diversity, skills, and potential conflicts of interest.
- In addition to the mandatory Nasdaq executive officer clawback policy, we have another comprehensive clawback policy that applies to all employees and covers a broader scope of misconduct.
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2024 DIRECTOR NOMINEE HIGHLIGHTS
31% 31%
are womenare racially/ethnically diverse
99% | 65 | ||
2023 meeting attendance | average age, ranging from 47-76 | ||
Director | |||
Name & Principal Occupation | Age | Since | |
Nicholas Brown | 65 | 2012 | |
Retired President and CEO | |||
Southwest Power Pool | |||
Paula Cholmondeley | 76 | 2016 | |
Principal | |||
The Sorrel Group | |||
Beverly Cole | 72 | 2018 | |
CEO | |||
Cole Renwick, LLC | |||
Robert East | 76 | 1997 | |
Chairman | |||
Robert East Company, Inc. | |||
Kathleen Franklin | 67 | 2017 | |
Global Ethics and Compliance Strategy Leader | |||
Sony Group Corporation | |||
Jeffrey Gearhart | 59 | 2018 | |
Retired EVP, Global Governance & Corporate Secretary | |||
Walmart, Inc. | |||
George Gleason | 70 | 1979 | |
Chairman and CEO | |||
Bank OZK | |||
Peter Kenny | 65 | 2013 | |
Independent Market Strategist | |||
William A. Koefoed, Jr. | 59 | 2015 | |
CFO | |||
OneStream Software LLC | |||
Elizabeth Musico | 47 | 2023 | |
VP, Human Resources | |||
McKesson Corporation | |||
Christopher Orndorff | 59 | 2018 | |
CEO and Chief Investment Officer | |||
Cercano Management LLC | |||
Steven Sadoff | 60 | 2018 | |
Chief Information Officer | |||
Cantor Fitzgerald L.P. | |||
Ross Whipple | 72 | 2014 | |
President | |||
Horizon Timber Services, Inc. |
12of 13
are independent
9.1
years average independent tenure
Independent Committee Memberships
- Governance/Comp (chair)
- Executive
- Trust
- Risk
- Trust (chair)
- Governance/Comp
- Executive
- Risk
- Audit
- Portfolio Oversight
- Trust
- Executive (chair)
- Portfolio Oversight (chair)
- Governance/Comp
- Portfolio Oversight
- Audit (chair)
- Executive
- Governance/Comp
- Audit
- Risk
- Risk (chair)
- Executive
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EXECUTIVE COMPENSATION HIGHLIGHTS
Compensation Principles
Our executive compensation program is designed to:
- Align Executive and Shareholder Interests through equity-based compensation dependent on long-term performance and earned over time.
- Pay for Performance by tying all cash incentive compensation to objective financial performance goals and all equity incentive compensation to relative performance against peers.
- Ensure Short- and Long-Term Accountability through compensation that rewards a proper balance between short- and long-term financial and business performance.
- Remain Competitive by providing a fair, non-discriminatory and forward-looking pay program to attract and retain high- quality executives.
Compensation Best Practices
To help us achieve our compensation goals, we apply the following practices (many of which are described further in the "Compensation Discussion and Analysis" section of this proxy statement):
WHAT WE DO
- Link large portion of pay with measurable performance goals.
- Multiple performance metrics and time horizons to discourage unnecessary short-term risk taking.
- Payout caps for cash and equity incentive awards.
- All equity awards subject to double-trigger provisions upon change in control.
- All employee incentive compensation subject to clawback in specified circumstances beyond mandatory executive officer clawback events.
- Annual review of compensation program and peer group composition.
- Executive officers subject to stock ownership guidelines (10x salary for CEO).
WHAT WE DON'T DO
- No tax gross-ups for named executive officers ("NEOs").
- No excessive perquisites; all have a specific business rationale.
- No employment, change in control or severance contracts for NEOs, who are at-will employees.
- No guaranteed salary increases or bonuses.
- No stock option repricing, reloads or exchanges without shareholder approval.
- No stock options granted below fair market value.
- No hedging or pledging our securities by executive officers or directors.
- No short selling or similar transactions.
- No excessive dilution from annual equity grants.
COMMITMENT TO CORPORATE RESPONSIBILITY
Our commitment to Corporate Responsibility ("CR") is centered around five core areas we believe are most important to our shareholders, employees and customers and most relevant to our business:
Our full Board of Directors ("Board") is ultimately responsible for overseeing our CR objectives, with specific CR topics overseen by various Board committees. Senior management is responsible for the day-to-day execution of our CR objectives. Annually, we publish a CR report that highlights our efforts to invest in the development and well-being of our employees, support the needs of our customers and communities, reduce our environmental impact, and maintain a strong governance framework that enhances our culture of ethics and integrity.
These reports are available on our Investor Relations website at ir.ozk.com under "CRR." Website references throughout this proxy statement are provided for convenience only, and the content on the referenced websites, including any documents available on the websites, are not incorporated by reference into this proxy statement.
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PROPOSAL 1 - ELECTION OF DIRECTORS
General
Our Board is comprised of one class of directors, elected annually. Each director serves a term of one year and until their successor is duly elected and qualified. The Board is currently comprised of 13 directors. At the Annual Meeting, shareholders will have an opportunity to vote for each of the 13 director nominees listed below.
The slate of nominees has been recommended to the Board by its Governance and Compensation Committee ("Governance Committee" or "Compensation Committee") and approved by the Board. Each nominee was elected at our 2023 annual meeting, presently serves as a member of the Board, and has consented to being named in this proxy statement and agreed to serve if elected.
Voting for Directors; Director Resignation Policy
The vote of a majority of all of the votes cast at the Annual Meeting is necessary for the election of a director. Under our Bylaws, any incumbent director nominee who does not receive a majority of the votes cast in an uncontested election must tender to the Board their resignation as a director, which will become effective upon acceptance by the Board. Within 90 days following the certification of the election results, the Board must publicly disclose its decision to either accept or reject the tendered resignation and, if rejected, its reasons for doing so.
The Board unanimously recommends a vote "FOR" the election of | |
each of the 13 director nominees. | FOR |
BOARD COMPOSITION AND NOMINATION PROCESS
The Governance Committee is responsible for reviewing, from time to time, the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole. Director nominees are selected for recommendation by the Governance Committee in accordance with the qualification standards described below and in our Corporate Governance Guidelines, or established from time to time by the Governance Committee.
Board Independence
In accordance with our Corporate Governance Guidelines, a majority of our Board must consist of independent directors pursuant to the applicable independence standards set forth under the Nasdaq listing standards. The Board has affirmatively determined that twelve of our thirteen current directors qualify as "independent" under the Nasdaq listing standards. The current independent directors are: Nicholas Brown, Paula Cholmondeley, Beverly Cole, Robert East, Kathleen Franklin, Jeffrey Gearhart, Peter Kenny, William A. Koefoed, Jr., Elizabeth Musico, Christopher Orndorff, Steven Sadoff and Ross Whipple.
The Board maintains a standing Governance and Compensation Committee, Audit Committee, and Risk Committee, and has determined that each director serving on these committees is independent based on the Nasdaq listing standards and applicable rules and regulations of the FDIC and the Securities and Exchange Commission ("SEC"). The Board has also determined that each member of the Audit Committee qualifies as an "audit committee financial expert" within the meaning of the regulations of the FDIC and SEC.
Director Criteria and Qualifications
In identifying and evaluating potential director nominees, the Governance Committee considers individuals from various disciplines and diverse backgrounds. While the Board does not have a specific diversity policy, the Governance Committee seeks to recommend, and the Board seeks to nominate, candidates who bring diverse perspectives and experiences to our Board, taking into account (among other factors) diversity of age, gender, race, ethnicity, experience, background and personal characteristics. As a primary consideration, the Board seeks members with complementary individual backgrounds that maximize perspective and ensure a wealth of experience to enable the Board to make better informed decisions.
5
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Bank OZK published this content on 14 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2024 12:09:10 UTC.