united
states
securities
and exchange commission
Washington,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy Statement Pursuant
to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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 under §240.14a-12
CAPITOL FEDERAL FINANCIAL,
INC.
(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 all boxes that apply):
☒ 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
December 14, 2023
Dear Fellow Stockholder:
On behalf of the Board of Directors and management
of Capitol Federal Financial, Inc.®, we cordially invite you to attend our annual meeting of stockholders. The meeting will be
held at 10:00 a.m. local time on Tuesday, January 23, 2024, at the Bradbury Thompson Alumni Center on the Washburn University
campus, 1701 S.W. Jewell Avenue, Topeka, Kansas.
Regardless of whether you plan to attend the annual
meeting, please read the enclosed proxy statement and then vote by the Internet, telephone or mail as promptly as possible. Your
prompt response will save us additional expense in soliciting proxies and will ensure that your shares are represented at the meeting.
This year we are using a Securities and Exchange
Commission rule to furnish our proxy statement, Annual Report and proxy card over the Internet to stockholders. This means
that stockholders will not receive paper copies of these documents. Instead, stockholders will receive only a notice containing
instructions on how to access the proxy materials over the Internet. This rule enables us to lower the costs of delivering
the annual meeting materials and reduce the environmental impact of the meeting. If you would like to receive a copy of the
printed materials, the notice contains instructions on how you can request copies of these documents.
Your Board of Directors and management are committed
to the success of Capitol Federal Financial, Inc. and the enhancement of your investment. As Chairman of the Board, I want to
express my appreciation for your confidence and support.
|
Very truly yours, |
|
|
|
/s/ John B. Dicus |
|
|
|
JOHN B. DICUS |
|
Chairman of the Board, President and Chief Executive
Officer |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 23, 2024
NOTICE IS HEREBY GIVEN that the annual meeting
of stockholders of Capitol Federal Financial, Inc.® will be held as follows:
TIME |
10:00 a.m. local time |
|
Tuesday, January 23, 2024 |
|
|
PLACE |
Bradbury Thompson Alumni Cente |
|
Washburn University Campus |
|
1701 S.W. Jewell Avenue |
|
Topeka, Kansas |
|
|
ITEMS OF BUSINESS |
(1) The election of two directors. |
|
(2) An advisory (non-binding) vote on executive compensation
as disclosed in the accompanying proxy statement. |
|
(3) The ratification of the appointment of Deloitte & Touche LLP as Capitol Federal Financial, Inc.’s independent auditors for the fiscal year ending September 30, 2024 |
|
|
RECORD DATE |
Holders of record of Capitol Federal Financial, Inc. common stock at the close of business on December 1, 2023 are entitled to vote at the annual meeting or any adjournment or postponement thereof. |
|
|
PROXY VOTING |
It is important that your shares be represented and voted at the annual meeting. Regardless of whether you plan to attend the annual meeting, please read the accompanying proxy statement and then vote by the Internet, telephone or mail as promptly as possible. |
|
BY ORDER OF THE BOARD OF DIRECTORS |
|
|
|
/s/ John B. Dicus |
|
|
|
JOHN B. DICUS |
|
Chairman of the Board, President and Chief Executive Officer |
Topeka,
Kansas
December 14, 2023
CAPITOL FEDERAL FINANCIAL, INC.®
700 S. Kansas Avenue
Topeka,
Kansas 66603
(785) 235-1341
PROXY STATEMENT
INTRODUCTION
The
Capitol Federal Financial, Inc. Board of Directors is using this proxy statement to solicit proxies from the holders of the Company’s
common stock for use at the Company’s upcoming annual meeting of stockholders. The annual meeting of stockholders will be held at
10:00 a.m. local time on Tuesday, January 23, 2024 at the Bradbury Thompson Alumni
Center on the Washburn University campus, 1701 S.W. Jewell Avenue, Topeka, Kansas.
At
the meeting, stockholders will be asked to vote on three proposals. The proposals are set forth in the accompanying Notice of Annual
Meeting of Stockholders and are described in more detail below. Stockholders also will consider any other matters that may properly come
before the meeting, although the Board of Directors knows of no other business to be presented. Capitol Federal Financial, Inc. is
referred to in this proxy statement from time to time as the “Company,” “we,” “us” or “our.”
Certain of the information in this proxy statement relates to Capitol Federal Savings Bank (“Capitol Federal Savings” or the
“Bank”), a wholly owned subsidiary of the Company.
On December 21, 2010, the Company completed
its conversion (the “Conversion”) from the mutual holding company structure and related public stock offering and became a
stock form holding company that is 100% owned by public stockholders. As a result of the Conversion, the Company, a newly formed Maryland
corporation, became the holding company for Capitol Federal Savings, and Capitol Federal Financial (formerly the mid-tier holding company
of Capitol Federal Savings) and Capitol Federal Savings Bank MHC (a mutual holding company that owned a majority of the stock of Capitol
Federal Financial) have ceased to exist. All outstanding shares of Capitol Federal Financial common stock (other than those owned by Capitol
Federal Savings Bank MHC, which have been cancelled) were converted into the right to receive 2.2637 shares of Company common stock (the
“Conversion Exchange Ratio”). References in this proxy statement to the Company prior to the date of the Conversion refer
to Capitol Federal Financial, and all information in this proxy statement with respect to stock options granted prior to the Conversion
have been adjusted for the Conversion Exchange Ratio.
We have decided to use the “Notice and Access”
rule adopted by the Securities and Exchange Commission (the “SEC”) to provide access to our proxy materials over the
Internet instead of mailing a printed copy of the proxy materials to each stockholder. As a result, on or about December 14, 2023,
we mailed to all stockholders only a “Notice of Internet Availability of Proxy Materials” that tells them how to access and
review the information contained in the proxy materials and how to vote their proxies over the Internet. You will not receive
a printed copy of the proxy materials in the mail unless you request the materials by following the instructions included in the Notice
of Internet Availability of Proxy Materials.
By
submitting your proxy, either by executing and returning the proxy card or by voting electronically via the Internet or by telephone,
you authorize the Company’s Board of Directors to represent you and vote your shares at the meeting in accordance with your instructions.
The Board of Directors also may vote your shares to adjourn the meeting from time to time and will be authorized to vote your shares at
any adjournments or postponements of the meeting.
This
proxy statement and the accompanying materials are first being made available to stockholders on or about December 14, 2023.
Your
proxy vote is important. Whether or not you plan to attend the meeting, please submit your proxy by the Internet, telephone
or mail as promptly as possible.
INFORMATION ABOUT THE ANNUAL MEETING
What is the purpose of the annual meeting?
At the annual meeting, stockholders will be asked
to vote on the following proposals:
Proposal 1. |
The election of two directors of the Company. |
|
|
Proposal 2. |
An advisory (non-binding) vote on executive compensation as disclosed in this proxy statement. |
|
|
Proposal 3. |
The ratification of the appointment of Deloitte & Touche LLP as the Company’s independent auditors for the fiscal year ending September 30, 2024. |
Stockholders
also will transact any other business that may properly come before the meeting or any adjournment or postponement of the meeting.
Members of our management team will be present at the meeting to respond to appropriate questions from stockholders.
How does the Board of Directors recommend that I vote?
The Board of Directors recommends that you vote
“FOR” the election of the director nominees named in this proxy statement, “FOR” the advisory vote on executive
compensation and “FOR” the ratification of the appointment of Deloitte & Touche LLP.
Who is entitled to vote?
The
record date for the meeting is December 1, 2023. Only stockholders of record at the close of business on that date are entitled
to notice of and to vote at the meeting. The only class of stock entitled to be voted at the meeting is the Company’s common stock.
Each outstanding share of common stock is entitled to one vote for all matters before the meeting; provided, however, that pursuant to
Section D of Article 5 of the Company’s charter, no person who beneficially owns more than 10% of the shares of the Company’s
common stock outstanding as of that date may vote shares in excess of this amount. At the close of business on the record date there were
134,984,275 shares of common stock outstanding.
What if my shares are held in “street name” by a broker?
If you are the beneficial owner of shares held
in “street name” by a broker, your broker, as the record holder of the shares, is required to vote those shares in accordance
with your instructions. If you do not give instructions to your broker, your broker nevertheless will be entitled to vote the shares with
respect to “discretionary” items, but will not be permitted to vote your shares with respect to any “non-discretionary”
items. In the case of non-discretionary items, the shares will be treated as “broker non-votes.” Whether an item is discretionary
is determined by the exchange rules governing your broker. It is expected that the ratification of the appointment of Deloitte &
Touche LLP will be considered a discretionary item and that all other matters being voted upon will be considered non-discretionary items.
What if my shares are held in the Company’s employee stock
ownership plan?
We
maintain an employee stock ownership plan, which beneficially owned approximately 5.2% of the outstanding shares of the Company’s
common stock as of the record date. Employees of the Company and Capitol Federal Savings participate in the employee stock ownership plan.
Each participant may instruct the trustee of the plan how to vote the shares of common stock allocated to his or her account under the
employee stock ownership plan. If a participant properly executes and completes the voting instruction card distributed by the trustee,
the trustee will vote the participant’s shares in accordance with the instructions. In the event the participant fails to give timely
voting instructions to the trustee with respect to the voting of the common stock that is allocated to his or her employee stock ownership
plan account, and in the case of shares held in the employee stock ownership plan but not allocated to any participant’s account,
the trustee will vote such shares in the same proportion as directed by the participants who directed the trustee as to the manner of
voting their allocated shares in the employee stock ownership plan with respect to each proposal.
How many shares must be present to hold the meeting?
A quorum must be present at the meeting for any
business to be conducted. The presence at the meeting, in person or by proxy, of the holders of at least one-third of the shares of the
Company’s common stock outstanding on the record date will constitute a quorum. Proxies received but marked as abstentions or broker
non-votes will be included in the calculation of the number of shares considered to be present at the meeting.
What if a quorum is not present at the meeting?
If a quorum is not present at the scheduled time
of the meeting, the stockholders who are represented may adjourn the meeting until a quorum is present. The time and place of the adjourned
meeting will be announced at the time the adjournment is taken, and no other notice will be given. An adjournment will have no effect
on the business that may be conducted at the meeting.
How do I vote?
1.
You may vote by mail. If you properly complete, sign and return the
proxy card, it will be voted in accordance with your instructions.
2. You
may vote by telephone. If you are a registered stockholder, that is, if you hold your stock in your own name, you may vote
by telephone by following the instructions included on the proxy card. If you vote by telephone, you do not have to mail in your proxy
card.
3.
You may vote on the internet. If you are a registered stockholder, that is,
if you hold your stock in your own name, you may vote on the Internet by following the instructions included on the proxy card.
If you vote on the Internet, you do not have to mail in your proxy card.
4. You
may vote in person at the meeting. If you plan to attend the annual meeting and wish to vote in person, we will
give you a ballot at the annual meeting. However, if your shares are held in the name of your broker, bank or other nominee, you will
need to obtain a proxy form from the institution that holds your shares indicating that you were the beneficial owner of the Company’s
common stock on December 1, 2023, the record date for voting at the annual meeting.
Can
I vote by telephone or on the Internet if I am not a registered stockholder?
If
your shares are held in “street name” by a broker or other nominee, you should check the voting form used by that firm to
determine whether you will be able to vote by telephone or on the Internet.
Can I change my vote after I submit my proxy?
If you are a registered stockholder, you may revoke
your proxy and change your vote at any time before the polls close at the meeting by:
| ● | signing another proxy with a later date; |
| ● | voting by telephone or on the Internet -- your latest telephone or Internet vote will be counted; |
| ● | giving written notice of the revocation of your proxy to the Secretary of the Company prior to the annual meeting; or |
| ● | voting in person at the annual meeting. |
If you have instructed a broker, bank or other
nominee to vote your shares, you must follow directions received from your nominee to change those instructions.
What if I do not specify how my shares are to be voted?
If you are a registered stockholder and you submit
an executed proxy but do not indicate any voting instructions, your shares will be voted:
| ● | FOR the election of the director nominees named in this proxy statement; |
| ● | FOR the advisory vote on executive compensation; and |
| ● | FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent auditors for the fiscal
year ending September 30, 2024. |
Will any other business be conducted at the annual meeting?
The Board of Directors knows of no other business
that will be conducted at the meeting. If any other proposal properly comes before the stockholders for a vote at the meeting, however,
the proxy holders will vote your shares in accordance with their best judgment.
How many votes are required to approve the proposals?
The
Company’s bylaws provide that in all elections of directors at meetings of stockholders, other than contested elections, each director
is elected by a majority of the votes cast with respect to such director. This means that in order to be elected, the number of
votes cast FOR a director nominee’s election must exceed the number of votes cast AGAINST such director nominee’s election.
In a contested election, which is one where the number of nominees exceeds the number of directors to be elected, directors are elected
by a plurality of the votes cast. The election of directors at the annual meeting will not be a contested election. Therefore,
directors will be elected at the annual meeting under the majority voting standard described above.
The advisory vote on executive compensation and
the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent auditors each requires the affirmative
vote of the majority of votes cast on the matter.
How will abstentions be treated?
If
you abstain from voting for the election of any director nominee or from voting on any other proposal, your shares will not be
counted as votes cast with respect to the election of that nominee or that proposal and will have no effect on the election of that nominee
or on that proposal. Abstentions will be included for purposes of determining whether a quorum is present.
How will broker non-votes be treated?
Broker
non-votes will have no effect on the election of directors or on any other proposal. Shares treated as broker non-votes on one
or more proposals will be included for purposes of calculating the presence of a quorum.
STOCK OWNERSHIP
The
following table presents information regarding the beneficial ownership of the Company’s common stock, as of December 1,
2023, by:
| ● | each beneficial owner of more than 5% of the outstanding shares of the Company’s common stock known to the Company; |
| ● | each director of the Company and nominee for election; |
| ● | each executive officer of the Company named in the “Summary Compensation Table” appearing below; and |
| ● | all of the executive officers, directors and director nominees as a group. |
Except
as indicated below, the address of each of the beneficial owners is the same address as that of the Company. An asterisk (*) in the table
indicates that the individual beneficially owns less than one percent of the outstanding common stock of the Company. Beneficial ownership
is determined in accordance with the SEC’s rules. As of December 1, 2023, there were 134,984,275 shares of the Company’s
common stock outstanding.
Name of Beneficial Owner | |
Beneficial Ownership(1) (10) | | |
Percent of Common Stock Outstanding | |
Greater
than Five Percent Beneficial Owners | |
| | |
| |
BlackRock, Inc. | |
| 20,318,162 | (2) | |
| 15.1 | % |
55 East 52nd Street | |
| | | |
| | |
New York, New York 10055 | |
| | | |
| | |
| |
| | | |
| | |
American Century Companies, Inc. et al. 4500 Main Street, 9th Floor Kansas City, Missouri 64111 | |
| 17,710,558 | (3) | |
| 13.1 | % |
| |
| | | |
| | |
The Vanguard Group 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | |
| 15,720,806 | (4) | |
| 11.6 | % |
| |
| | | |
| | |
Dimensional Fund Advisors LP 6300 Bee Cave Road, Building One Austin, Texas 78746 | |
| 7,089,117 | (5) | |
| 5.3 | % |
| |
| | | |
| | |
Capitol Federal Financial, Inc. Employee Stock Ownership Plan | |
| 7,063,906 | (6) | |
| 5.2 | % |
| |
| | | |
| | |
Directors, Director Nominees and Executive Officers | |
| | | |
| | |
John B. Dicus, Chairman, President, Chief Executive Officer and Director | |
| 1,489,905 | (7) | |
| 1.1 | % |
Michel’ Philipp Cole, Director | |
| 28,050 | | |
| * | |
Morris J. Huey, II, Director | |
| 276,000 | | |
| * | |
Jeffrey M. Johnson, Director | |
| 102,900 | (8) | |
| * | |
Michael T. McCoy, M.D., Director | |
| 44,109 | | |
| * | |
James G. Morris, Director | |
| 70,995 | | |
| * | |
Carlton A. Ricketts, Director | |
| 149,561 | | |
| * | |
Jeffrey R. Thompson, Director | |
| 84,353 | | |
| * | |
Rick C. Jackson, Executive Vice President and Chief Lending Officer | |
| 244,846 | (9) | |
| * | |
Robert D. Kobbeman, Executive Vice President and Chief Commercial Banking Officer | |
| 39,109 | | |
| * | |
William
J. Skrobacz, Jr., Executive Vice President and Chief Retail Operations Officer | |
| 37,802 | | |
| * | |
Kent G. Townsend, Executive Vice President, Chief Financial Officer and Treasurer | |
| 232,991 | | |
| * | |
Directors, director nominees and executive officers of the Company as a group (14 persons) | |
| 2,958,367 | | |
| 2.2 | % |
| (1) | Included in the shares beneficially owned by the directors and executive officers named in the table are options to purchase shares
of the Company’s common stock which are currently exercisable or which will become exercisable within 60 days after December 1,
2023, as follows: Mr. Dicus – 100,116 shares; Mr. Huey – 10,000 shares; Mr. Johnson – 15,000 shares;
Dr. McCoy – 15,000 shares; Mr. Thompson – 15,000 shares; and Mr. Jackson – 55,910 shares. |
| (2) | As reported in a Schedule 13G amendment filed with the SEC on January 26, 2023 by BlackRock, Inc. (“BlackRock”).
With respect to the shares listed in the table, BlackRock reported having sole voting power as to 20,064,435 shares and sole dispositive
power as to 20,318,162 shares. |
| (3) | As reported in a Schedule 13G amendment filed with the SEC on February 8, 2023 by American Century Companies, Inc., American
Century Investment Management, Inc., American Century Capital Portfolios, Inc. and Stowers Institute for Medical Research. With
respect to the shares listed in the table, American Century Companies, Inc., American Century Investment Management, Inc. and
Stowers Institute for Medical Research each reported having sole voting power as to 16,633,548 shares and sole dispositive power as to
17,710,558 shares while American Century Capital Portfolios, Inc. reported having sole voting power and sole dispositive power as
to 12,120,827 shares. |
| (4) | As reported in a Schedule 13G amendment filed with the SEC on February 9, 2023 by The Vanguard Group (“Vanguard”).
With respect to the shares listed in the table, Vanguard reported having shared voting power as to 91,193 shares, sole dispositive power
as to 15,503,939 shares and shared dispositive power as to 216,867 shares. |
| (5) | As reported in a Schedule 13G filed with the SEC on February 10, 2023 by Dimensional Fund Advisors LP (“Dimensional”).
With respect to the shares listed in the table, Dimensional reported having sole voting power as to 6,951,540 shares and sole dispositive
power as to 7,089,117 shares. |
| (6) | Of the 7,063,906 shares held by the employee stock ownership plan as of December 1, 2023, 4,255,539 were allocated to participant
accounts. Each participant may instruct the trustee of the plan how to vote the shares of common stock allocated to his or her account.
In the event the participant fails to give timely voting instructions to the trustee with respect to the voting of the common stock that
is allocated to his or her employee stock ownership plan account, and in the case of shares held in the employee stock ownership plan
but not allocated to any participant’s account, the trustee will vote such shares in the same proportion as directed by the participants
who directed the trustee as to the manner of voting their allocated shares in the employee stock ownership plan with respect to each proposal. |
| (7) | Mr. Dicus has pledged 90,500 of his shares for a line of credit with a third-party financial institution unaffiliated with the
Company. |
| (8) | Of the shares beneficially owned by Mr. Johnson, 87,900 are held in brokerage accounts pursuant to which they may serve as security
for margin loans. |
| (9) | Of the shares beneficially owned by Mr. Jackson, 66,698 are held in a brokerage account pursuant to which they may serve as security
for a margin loan. |
| (10) | In the case of directors, director nominees and executive officers, both individually and as a group, includes shares held directly,
as well as shares held by and jointly with certain family members, shares held in retirement accounts, shares held by trusts of which
the individual or group member is a trustee or substantial beneficiary or shares held in another fiduciary capacity with respect to which
shares the individual or group member may be deemed to have sole or shared voting and/or investment powers. The shares beneficially owned
by directors, director nominees and executive officers as a group also include an aggregate of 211,026 shares of common stock issuable
upon exercise of stock options that are currently exercisable or that will become exercisable within 60 days after December 1, 2023. |
PROPOSAL I
ELECTION OF DIRECTORS
The
Company’s Board of Directors is currently composed of eight members, each of whom is also a director of Capitol Federal Savings.
Approximately one-third of the directors are elected annually. Directors of the Company are elected to serve for a three-year term or
until their respective successors are elected and qualified. The Company’s bylaws provide that no person who has reached age 75
may be elected, reelected, appointed or reappointed to the Board of Directors.
The
following table sets forth certain information regarding the composition of the Company’s Board of Directors, including each director’s
term of office. The Board of Directors, acting on the recommendation of the Nominating Committee, has recommended and approved the nominations
of Morris J. Huey, II and Carlton A. Ricketts to serve as directors, each for a term of three years to expire at the annual
meeting of stockholders to be held in 2027. It is intended that the proxies solicited on behalf of the Board of Directors will be voted
at the annual meeting “FOR” the election of these director nominees. If any nominee is unable to serve, the shares represented
by all valid proxies will be voted for the election of such substitute nominee as the Board of Directors, acting on the recommendations
of the Nominating Committee, may recommend. At this time, the Board of Directors knows of no reason why any nominee might be unable to
serve if elected. Except as disclosed in this proxy statement, there are no arrangements or understandings between any nominee and any
other person pursuant to which the nominee was selected.
Name | |
Age(1) | |
Position(s) Held in the Company | |
Director Since(2) | |
Term of Office Expires | |
| |
| |
| |
| |
| |
NOMINEES |
|
| |
| |
| |
| |
| |
Morris J. Huey, II | |
74 | |
Director | |
2009 | |
2027 | |
Carlton A. Ricketts | |
66 | |
Director | |
2020 | |
2027 | |
| |
| |
| |
| |
| |
DIRECTORS REMAINING IN OFFICE |
| |
| |
| |
| |
| |
John B. Dicus | |
62 | |
Chairman of the Board, President and Chief Executive Officer | |
1989 | |
2025 | |
James G. Morris | |
69 | |
Director | |
2013 | |
2025 | |
Jeffrey R. Thompson | |
62 | |
Director | |
2004 | |
2025 | |
Michel’ Philipp Cole | |
60 | |
Director | |
2017 | |
2026 | |
Jeffrey M. Johnson | |
57 | |
Director | |
2005 | |
2026 | |
Michael T. McCoy, M.D. | |
74 | |
Director | |
2005 | |
2026 | |
| (1) | As of September 30, 2023. |
| (2) | Includes service as a director of Capitol Federal Savings. |
Board Diversity
On August 6, 2021, the SEC approved amendments
to the Listing Rules of the NASDAQ Stock Market (“NASDAQ”) related to board diversity. New Listing Rule 5605(f) (the
“Diverse Board Representation Rule”) requires each NASDAQ-listed company, subject to certain exceptions, (1) to have
at least one director who self-identifies as female, and (2) to have at least one director who self-identifies as Black or African
American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, two or more races or ethnicities,
or as LGBTQ+, or (3) to explain why the company does not have at least two directors on its board who self-identify in the categories
listed above. In addition, new Listing Rule 5606 (the “Board Diversity Disclosure Rule”) requires each NASDAQ-listed
company, subject to certain exceptions, to provide statistical information about the company’s board of directors, in a uniform
format, related to each director’s self-identified gender, race, and self-identification as LGBTQ+.
Although
we are not required to fully comply with the Diverse Board Representation Rule until 2025, we believe we presently meet the requirements
of that rule based on the self-identified characteristics of the current members of our Board of Directors. In the matrix
below, we have provided the statistical information required by the Board Diversity Disclosure Rule, which has not changed since we disclosed
that information in our last annual meeting proxy statement.
Board Diversity Matrix (As of September 30, 2023) |
Total Number of Directors |
8 |
|
Female |
Male |
Non-
Binary |
Did Not
Disclose
Gender |
Part I: Gender Identity |
|
|
|
|
Directors |
1 |
7 |
0 |
0 |
Part II: Demographic Background |
|
|
|
|
African American or Black |
0 |
1 |
0 |
0 |
Alaskan Native or Native American |
0 |
0 |
0 |
0 |
Asian |
0 |
0 |
0 |
0 |
Hispanic or Latinx |
0 |
1 |
0 |
0 |
Native Hawaiian or Pacific Islander |
0 |
0 |
0 |
0 |
White |
1 |
6 |
0 |
0 |
Two or More Races or Ethnicities |
0 |
1* |
0 |
0 |
LGBTQ+ |
0 |
Did Not Disclose Demographic Background |
0 |
* One director self-identified as African American/Black and Hispanic/Latinx.
Business Experience and Qualifications of Our Directors
The
Board believes that the many years of service our directors collectively have at the Company and Capitol Federal Savings is one of their
most important qualifications for service on our Board. This service has given them extensive knowledge of the banking business
and of the Company. Furthermore, their service on our Board committees, especially in the areas of audit, compensation
and stock benefits, is critical to their ability to oversee the management of Capitol Federal Savings by our executive officers. Service
on the Board by our Chief Executive Officer is critical to aiding the outside directors’ understanding of the issues that are common
in the banking business. Each outside director brings special skills, experience and expertise to the Board as a result of
their other business activities and associations. The business experience of each of our directors and nominees for at least
the past five years and the experience, qualifications, attributes, skills and areas of expertise of each director and nominee that further
supports his or her service as a director are set forth below.
Morris
J. Huey, II. Mr. Huey retired from Capitol Federal Savings in January 2010. From June 2002
until his retirement, Mr. Huey served as Executive Vice President and Chief Lending Officer of Capitol Federal Savings and President
of Capitol Funds, Inc., a wholly owned subsidiary of Capitol Federal Savings. From August 2002 until his retirement,
he also served as President of Capitol Federal Mortgage Reinsurance Company, a wholly owned subsidiary of Capitol Funds, Inc. Prior
to that, he served as the Central Region Lending Officer since joining Capitol Federal Savings in 1991. Mr. Huey’s
many years of service in various areas of Capitol Federal Savings’ operations and his duties as Executive Vice President and Chief
Lending Officer of Capitol Federal Savings bring a special knowledge of the financial, economic, underwriting and regulatory challenges
the Company faces and he is well suited to educating the Board on these matters.
Carlton
A. Ricketts. Mr. Ricketts retired as Executive Vice President, Chief Corporate Services Officer of Capitol
Federal Savings and the Company in February 2019, after having held those responsibilities since April 2012. In that role, he
directed the operations of Capitol Federal Savings in the areas of Compliance and Risk Management, Information Technology, Human
Resources, Facilities, Marketing, Appraisals and the Insurance Agency, in addition to overseeing and participating in examinations with
regulators. Mr. Ricketts joined Capitol Federal Savings in February 2007 as Chief Strategic Planning Officer. Before that, he
spent 25 years in the electric and gas utility industry as Vice President of Business Services with Missouri Gas Energy and in various
capacities for Westar Energy, including as the Vice President responsible for managing the company’s operations in the areas of
Investor Relations, Corporate Development, and Labor Relations. Mr. Ricketts’s extensive background in banking, demonstrated
leadership and first-hand knowledge of Capitol Federal Savings enhances the Board’s oversight of the Company’s operations
and make him a valuable member of the Board.
John
B. Dicus. Mr. Dicus became Chief Executive Officer of Capitol Federal Savings and the Company effective January 1,
2003 and became Chairman of the Board of Directors of Capitol Federal Savings and the Company in January 2009. Prior to
his appointment as Chief Executive Officer, he served as President and Chief Operating Officer for Capitol Federal Savings from 1996 and
for the Company from its inception in March 1999. Before that, he served as Executive Vice President of Corporate Services
for Capitol Federal Savings for four years. He has been with Capitol Federal Savings in various other positions since 1985. Mr. Dicus’
many years of service in all areas of the operations of Capitol Federal Savings and his duties as President and Chief Executive Officer
of the Company and Capitol Federal Savings bring a special knowledge of the financial, economic and regulatory challenges the Company
faces and he is well suited to educating the Board on these matters. Mr. Dicus is the father-in-law of William J. Skrobacz, Jr.,
who serves as Executive Vice President and Chief Retail Operations Officer of the Company and the Bank.
James
G. Morris. Mr. Morris retired from KPMG LLP in September 2012 after having served as partner-in-charge of the
financial services practice of the firm’s Kansas City office. Mr. Morris joined the firm in 1976 (when it was known as Peat
Marwick Mitchell & Co.) as an auditor and was promoted to partner in 1988. At KPMG, Mr. Morris served a wide range of financial
services clients, including banks, thrifts, mortgage companies, investment advisors and real estate companies. Mr. Morris currently
serves as an independent trustee of The Commerce Funds, a family of eight mutual funds registered under the Investment Company Act of
1940. Mr. Morris’s accounting and auditing background and extensive experience working with companies in the financial services
industry make him a valuable member of the Board.
Jeffrey
R. Thompson. In 2021, Mr. Thompson became Chief Financial Officer of Salina Vortex Corp., a Salina, Kansas-based
manufacturing company. He served as the company’s Chief Executive Officer and President from 2007 to 2020 and has worked for
the company since 2002. From 2001 to 2002, he served as Vice President, Supply Chain, for The Coleman Company, Wichita, Kansas. From
1992 to 2001, he served in a variety of capacities for Koch Industries, Inc., Wichita, Kansas, including President of Koch Financial
Services, Inc. from 1998 to 2001. From 1986 to 1992, he worked in several positions for Chrysler Capital Public Finance,
Kansas City, Missouri, primarily in the areas of originating, underwriting and servicing tax-exempt municipal leases. Mr. Thompson
has 40 years of business experience, including 20 years in the financial services business and 20 years with profit and loss responsibility
in manufacturing companies. He brings general business, financial and risk management skills to Capitol Federal Savings, including
knowledge of compensation matters, which is important to his service on our Compensation Committee. Mr. Thompson is a
certified public accountant, and his accounting knowledge and experience is important to his service on our Audit Committee. His
participation in the Salina and Wichita, Kansas business communities for over 30 years brings knowledge of the local economy and business
opportunities for Capitol Federal Savings.
Michel’
Philipp Cole, ABC. Ms. Cole retired in June 2018 as Vice President, Corporate Communications and Public Affairs
of Westar Energy, a position she held since 2014. From 1990 to 2000, she served as Director, Corporate Communications for Westar Energy.
Before rejoining Westar Energy, Ms. Cole was Vice President, Corporate Communications and Brand Strategy, Security Benefit Corporation,
from 2003-2014. From 2000 to 2003, she was Senior Vice President, Corporate Practice Group, Fleishman-Hillard, Kansas City. Ms. Cole
was the Manager, Corporate Communications, Goodyear Tire & Rubber Co., Topeka, from 1989-1990. She began her communications career
as Vice President, Member Services, Kansas Press Association, from 1986-1989. In October 2022, Ms. Cole was elected to the Washburn
University Board of Trustees. Ms. Cole has held other board positions for Stormont Vail Health, Greater Topeka Chamber of Commerce,
Topeka Collegiate, the Kansas Book Festival, KTWU Public Television and the Washburn University Leadership Institute. She is a graduate
of Leadership Greater Topeka and Leadership Kansas City and is an Accredited Business Communicator, IABC. Ms. Cole’s extensive
background in all aspects of corporate communications brings to the Board knowledge and experience that enhances the Board’s oversight
of those aspects of the Company’s operations that work to maintain and enhance value and ensure appropriate communications both
inside and outside of the Company.
Jeffrey
M. Johnson. Mr. Johnson is President of Flint Hills National Golf Club, Andover, Kansas, a position he
has held since March 2003. From March 1997 until joining Flint Hills, Mr. Johnson was an investment advisor
with Raymond James Financial Services in Wichita, Kansas. Mr. Johnson’s extensive knowledge of investments and the
regulated financial services industry supports the Board’s and the Audit Committee’s knowledge in those areas. Before
1997, he served in a variety of restaurant management positions with Lone Star Steakhouse & Saloon, Inc. and Coulter Enterprises, Inc. Mr. Johnson
is also part-owner of several restaurants in Lawrence, Manhattan and Wichita, Kansas and parts of Texas. He brings general
business, financial and risk management skills to Capitol Federal Savings, including knowledge of compensation matters, which is important
to his service on our Compensation Committee. His participation in the Wichita, Kansas business community and his service on
local non-profit boards for over 15 years bring knowledge of the local economy and business opportunities for Capitol Federal Savings.
Michael
T. McCoy, M.D. Dr. McCoy has been an orthopedic surgeon in private practice for over 30 years. In his private
practice, he has employed up to 15 employees and gained the accounting, financial and risk management skill necessary to operate a small
business. He served as Chief of Orthopedic Surgery at Stormont Vail Regional Medical Center in Topeka, Kansas from October 2004
to October 2005 and as Chief of Surgery at Stormont Vail from January 1987 to January 1988. His management and
business experience in his private practice and these hospital positions bring knowledge and experience to his service on the Board and
the Compensation and Audit Committees. Dr. McCoy is a member of the Kansas Medical Society, the Shawnee County Medical
Society, the American Academy of Orthopedic Surgeons and the American Orthopedic Society for Sports Medicine.
Executive Officers Who Are Not Also Directors
Set forth below is a description of the business
experience for at least the past five years of each executive officer who is not also a director of the Company. Each executive officer’s
age is as of September 30, 2023.
Kent
G. Townsend. Mr. Townsend, age 62, serves as Executive Vice President and Chief Financial Officer of the Bank and
the Company. Mr. Townsend also serves as Treasurer for the Company, Capitol Funds, Inc., a wholly owned subsidiary of the Bank
(“Capitol Funds”), and Capitol Federal Mortgage Reinsurance Company, a wholly owned subsidiary of Capitol Funds (“CFMRC”).
Mr. Townsend was promoted to Executive Vice President, Chief Financial Officer and Treasurer in September 2005. Prior to that,
he served as Senior Vice President, a position he held since April 1999, and Controller of the Company, a position he held since
March 1999. He has served in similar positions with the Bank since September 1995. He served as the Financial Planning and Analysis
Officer with the Bank for three years and other financial related positions since joining the Bank in 1984.
Rick
C. Jackson. Mr. Jackson, age 58, serves as Executive Vice President and Chief Lending Officer of the Bank and the
Company. He also serves as Chief Executive Officer of Capitol Funds and President of CFMRC. He joined the Bank in 1993 as Community Development
Director, a position he held until March 2017, and has served as Chief Lending Officer since February 2010.
Robert
D. Kobbeman. Mr. Kobbeman, age 68, serves as Executive Vice President and Chief Commercial Banking Officer of
the Bank and the Company. He joined the Bank in August 2018 at the time of the Company’s acquisition of Capital City Bancshares, Inc.
(“CCB”) and CCB’s subsidiary bank, Capital City Bank. From 2002 until the acquisition, Mr. Kobbeman served as President
and Chief Executive Officer and as a director of CCB and Capital City Bank. From 1998 to 2002, Mr. Kobbeman served as Executive Vice
President, Chief Lending Officer of Capital City Bank.
As previously reported by the Company, on November 28,
2023, Mr. Kobbeman informed the Company’s Board of Directors of his intent to retire effective February 29, 2024.
William
J. Skrobacz, Jr. Mr. Skrobacz, age 32, has served as Executive Vice President and Chief Retail Operations Officer
of the Bank and the Company since April 2023. He joined the Bank as Chief Strategy Officer in July 2021 after obtaining his
MBA from The University of Virginia’s Darden School of Business. Starting with amassing experience with Bank customers while working
throughout the Bank's branch system, he then continued moving through various departments within the organization helping to implement
efficiencies and drive growth within the Bank’s lending and business development efforts, while also familiarizing himself with
the Bank’s regulatory environment. Prior to his time at the Bank, he worked for Nuvasive Inc. from 2013-2021 in a Regional Sales
and Operations Management capacity. Mr. Skrobacz is the son-in-law of John B. Dicus, the Company’s and the Bank’s Chairman,
President and Chief Executive Officer.
Anthony
S. Barry. Mr. Barry, age 59, serves as Executive Vice President, Chief Corporate Services Officer of the Bank and
the Company. Prior to joining the Bank and the Company in October 2018, Mr. Barry was engaged in the private practice
of law for 29 years in real estate and general litigation, with an emphasis in construction law. Mr. Barry also served as a board
member of a bank holding company in Arizona from 1998 to 2008.
Natalie
G. Haag. Ms. Haag, age 64, serves as Executive Vice President, General Counsel, and Corporate Secretary of
the Bank and the Company. Prior to joining the Bank and the Company in August 2012, Ms. Haag was 2nd Vice President, Director
of Governmental Affairs and Assistant General Counsel for Security Benefit Corporation and Security Benefit Life Insurance Company in
Topeka, Kansas. Security Benefit provides retirement products and services, including annuities and mutual funds. Ms. Haag was employed
by Security Benefit since June 2003. The Security Benefit companies are not parents, subsidiaries or affiliates of the Bank or the
Company.
Director Independence
The
Company’s Board of Directors has determined that the following directors, constituting a majority of the Board, are “independent
directors,” as that term is defined in NASDAQ Listing Rule 5605: Directors Cole, Huey, Johnson, McCoy, Morris, Ricketts
and Thompson.
Board Leadership Structure and Role in Risk Oversight
The
Company currently combines the positions of Chief Executive Officer and Chairman into one position. The Company does not have a lead outside
director. The Company believes that this structure is appropriate because of the primarily singular operating environment of the Company,
with the Company’s focus on being a provider of retail and commercial financial services. Having the Chief Executive Officer
and Chairman involved in the daily operations of this focused line of operations improves the communication between management and the
Board and ensures that the Board’s interest is represented in the daily operations of the Company, particularly with regard to risk
management.
Risk
is inherent with the operation of every financial institution, and how well an institution manages risk can ultimately determine its success. The
Company faces a number of risks, including but not limited to credit risk, interest rate risk, liquidity risk, operational risk, strategic
risk, compliance risk, cybersecurity risk and reputation risk. The Company’s primary risk areas are single-family lending,
including originated and purchased loans, and commercial lending. Cybersecurity risk is a key consideration in the Company’s operational
risk management capabilities. Given the nature of the Company’s operations and business, including the Bank’s reliance on
relationships with various third-party providers in the delivery of financial services, cybersecurity risk may manifest itself through
various business activities and channels, and it is thus considered an enterprise-wide risk that is subject to control and monitoring
at various levels of management and oversight by the Board and the Audit Committee. The Board receives updates on the status of the cybersecurity
controls, reports of significant cybersecurity incidents and annual education in this area.
Management
is responsible for the day-to-day management of the risks the Company faces, while the Board has ultimate responsibility for the oversight
of risk management. The Board oversees risk through the annual review of key policies of the Bank and the Company. In addition,
monthly, quarterly and annual reports are prepared for, presented to and reviewed with the Board addressing all major risk and compliance
areas. For the policies of the Board that require risk assessments to be completed, the results are generally summarized and presented
to the Board or a committee of the Board. The executive officers responsible for managing the various risks in the Bank and Company present
reports to the Board as required by policy or as needed.
The
Board has integrated the oversight of certain risk areas with the responsibilities of the Audit Committee and the Compensation Committee.
The Audit Committee works with the independent Audit Services Director to structure risk-based audits, the reports of which are
presented to the Audit Committee, and progress toward the approved audit plan is reviewed and the committee is updated at least quarterly.
In attempting to determine the appropriate levels and forms of compensation provided to the Bank’s and the Company’s officers
and employees, the Compensation Committee considers whether compensation or incentive plans encourage excessive risk taking.
Board Meetings and Committees
The
members of the Boards of Directors of the Company and Capitol Federal Savings are identical. During the fiscal year ended September 30,
2023, the Board of Directors of the Company held seven meetings and the Board of Directors of Capitol Federal Savings held 13 meetings.
During fiscal year 2023, no incumbent director attended fewer than 75% of the aggregate of the total number of meetings of each Board
during the period he or she was a director and the total number of meetings held by the committees of each Board on which committees he
or she served during the period in which he or she served.
The Company’s Board of Directors has standing
Executive, Compensation, Stock Benefit, Audit and Nominating Committees. The following is a summary of these committees.
The
Executive Committee is currently comprised of Directors Dicus (Chair), Huey, McCoy and Thompson. The Executive Committee meets
on an as needed basis and exercises the power of the Board of Directors between Board meetings, to the extent permitted by applicable
law. This committee is responsible for formulating and implementing policy decisions, subject to review by the entire Board of Directors.
The Executive Committee did not meet during fiscal year 2023.
The
Compensation Committee is currently comprised of Directors Morris (Chair), Cole, Huey, Johnson, McCoy, Ricketts and Thompson, each
of whom is an “independent director,” as that term is defined in the NASDAQ Listing Rules. The Compensation Committee is responsible
for reviewing and evaluating executive compensation and administering the Company’s compensation and benefit programs. The Compensation
Committee also is responsible for:
| ● | reviewing from time to time the Company’s compensation plans and, if the Committee believes it to be appropriate, recommending
that the Board amend these plans or adopt new plans; |
| ● | annually reviewing and approving corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluating
the Chief Executive Officer’s performance in light of these goals and objectives and recommending to the Board the Chief Executive
Officer’s compensation level based on this evaluation; |
| ● | overseeing the evaluation of management, and recommending to the Board the compensation for executive officers and other key members
of management. This includes evaluating performance following the end of incentive periods and recommending to the Board specific awards
for executive officers; |
| ● | recommending to the Board the appropriate level of compensation for directors; |
| ● | administering any benefit plan which the Board has determined should be administered by the Committee; and |
| ● | reviewing, monitoring and reporting to the Board, at least annually, on management development efforts to ensure a pool of candidates
for adequate and orderly management succession. |
The
Compensation Committee operates under a written charter adopted by the Board of Directors of the Company, a copy of which is available
on the Company’s website, at www.capfed.com, by clicking “Investor Relations” and then (under the “Corporate Overview”
tab) “Corporate Governance.” In fiscal year 2023, this committee met five times at the holding company level; the Compensation
Committee for Capitol Federal Savings, which serves the same function and has the identical makeup, also met five times during fiscal
year 2023.
The
Stock Benefit Committee operates under a written charter adopted by the Board of Directors of the Company. The Stock Benefit Committee
is currently comprised of Directors McCoy (Chair), Cole, Huey, Johnson, Morris, Ricketts and Thompson. The Stock Benefit Committee is
principally responsible for administering the Company’s 2012 Equity Incentive Plan, 2000 Stock Option and Incentive Plan and 2000
Recognition and Retention Plan. Although, by their terms, the 2000 Stock Option and Incentive Plan and 2000 Recognition and Retention
Plan expired as to new awards in April 2015, the Company ceased granting new awards under those plans following the approval of the
2012 Equity Incentive Plan at the Company’s annual meeting of stockholders held in January 2012. The Stock Benefit Committee
awards stock-based benefits to officers and employees of the Company and the Bank. This committee met four times during fiscal year 2023.
The
Audit Committee is currently comprised of Directors Thompson (Chair), Cole, Huey, Johnson, McCoy, Morris and Ricketts, each of
whom is “independent,” as independence for audit committee members is defined in the NASDAQ Listing Rules. The Company’s
Board of Directors has determined that each of Messrs. Morris and Thompson is an “audit committee financial expert,”
as defined in the SEC’s rules.
The
Audit Committee operates under a written charter adopted by the Board of Directors of the Company, a copy of which is available
on the Company’s website, www.capfed.com, by clicking “Investor Relations” and then (under the “Corporate Overview”
tab) “Corporate Governance.” The Audit Committee is appointed by the Company’s Board of Directors to represent and assist
the Board in fulfilling its oversight responsibility relating to the integrity of the Company’s consolidated financial statements
and the financial reporting processes, the systems of internal accounting and financial controls, the systems of disclosure controls and
procedures, compliance with ethical standards adopted by the Company, compliance with legal and regulatory requirements, the annual independent
audit of the Company’s consolidated financial statements, the independent auditors’ qualifications and independence, the performance
of the Company’s internal audit function and the independent (external) auditors and any other areas of potential financial risk
to the Company specified by its Board of Directors. The Audit Committee also is responsible for hiring, retaining and terminating the
Company’s independent auditors. The Audit Committee met eight times in fiscal year 2023.
The
Nominating Committee is comprised of Directors Cole (Chair), Huey, Johnson, McCoy, Morris, Ricketts and Thompson, each of whom
is an “independent director,” as that term is defined in the NASDAQ Listing Rules. The Nominating Committee is responsible
for identifying and recommending director candidates to serve on the Board of Directors. Final approval of director nominees is determined
by the full Board, based on the recommendations of the Nominating Committee. The nominees for election at the meeting identified in this
proxy statement were recommended to the Board by the Nominating Committee. The Nominating Committee met twice during fiscal year 2023.
The
Nominating Committee operates under a formal written charter adopted by the Board, a copy of which is available on the Company’s
website, www.capfed.com, by clicking “Investor Relations” and then (under the “Corporate Overview” tab)
“Corporate Governance.” The Nominating Committee has the following responsibilities under its charter:
| ● | recommend to the Board the appropriate size of the Board and assist in identifying, interviewing and recruiting candidates for the
Board; |
| ● | recommend candidates (including incumbents) for election and appointment to the Board of Directors, subject to the provisions set
forth in the Company’s charter and bylaws relating to the nomination or appointment of directors, based on the following criteria:
business experience, education, integrity and reputation, independence, conflicts of interest, diversity, age, number of other directorships
and commitments (including charitable organizations), tenure on the Board, attendance at Board and committee meetings, stock ownership,
specialized knowledge (such as an understanding of banking, accounting, marketing, finance, regulation and public policy) and a commitment
to the Company’s communities and shared values, as well as overall experience in the context of the needs of the Board as a whole.
The Company’s Board of Directors looks for diversity among its members by ensuring directors have backgrounds with diverse business
experience, living in our different local geographic markets with sound business experience in many areas of operations of business. The
Board looks for experience from individuals with business experience from the top levels of a business, understanding of financial concepts,
human resource, marketing and communications, risk management, information technology and customer service common among all businesses; |
| ● | review nominations submitted by stockholders, which have been addressed to the Company’s Secretary, and which comply with the
requirements of the Company’s charter and bylaws. Nominations from stockholders will be considered and evaluated using the same
criteria as all other nominations; |
| ● | annually recommend to the Board committee assignments and committee chairs on all committees of the Board, and recommend committee
members to fill vacancies on committees as necessary; and |
| ● | perform any other duties or responsibilities expressly delegated to the Committee by the Board. |
Nominations of persons for election to the Board
of Directors may be made only by or at the direction of the Board of Directors or by any stockholder entitled to vote for the election
of directors who complies with the notice procedures. Pursuant to the Company’s bylaws, nominations for directors by stockholders
must be made in writing and received by the Secretary of the Company at the Company’s principal executive offices no earlier than
120 days prior to the meeting date and no later than 90 days prior to the meeting date. If, however, less than 100 days’ notice
or public announcement of the date of the meeting is given or made to stockholders, nominations must be received by the Company not later
than the close of business on the tenth day following the earlier of the day on which notice of the date of the meeting was mailed or
otherwise transmitted or the day on which public announcement of the date of the meeting was first made. In addition to meeting the applicable
deadline, nominations must be accompanied by certain information specified in the Company’s bylaws.
Stockholder Communications with Directors
Stockholders
may communicate with the Board of Directors by writing to: Natalie G. Haag, Executive Vice President, General Counsel and Corporate
Secretary, Capitol Federal Financial, Inc., 700 S. Kansas Avenue, Topeka, Kansas 66603.
Board Member Attendance at Annual Stockholder Meetings
Although
the Company does not have a formal policy regarding director attendance at annual stockholder meetings, directors are expected to attend
these meetings absent extenuating circumstances. All of the Company’s directors attended last year’s annual meeting
of stockholders.
Employee, Officer and Director Hedging
The Company has not adopted any practices or policies
regarding the ability of its employees, officers or directors, or any of their designees, to purchase financial instruments (including
prepaid variable forward contracts, equity swaps, collars and exchange funds), or otherwise engage in transactions, that hedge or offset,
or are designed to hedge or offset, any decrease in the market value of the Company’s equity securities.
Director Compensation
The
members of the Boards of Directors of Capitol Federal Savings and the Company are identical. Each non-employee director receives an annual
retainer, paid monthly, one-half of which is for his or her service on Capitol Federal Savings’ Board of Directors and one-half
of which is for his or her service on the Company’s Board of Directors. During fiscal year 2023, the combined annual retainer
was $72,000 ($36,000 for service on Capitol Federal Savings’ Board of Directors and $36,000 for service on the Company’s Board
of Directors). No additional fees are paid for attending Board or Board committee meetings. During fiscal year 2023, Mr. Thompson
received $5,000 for serving as the Audit Committee chair. Each outside director receives $1,000 per day for each conference or other meeting
attended concerning Capitol Federal Savings and/or Company business that is outside of board meetings. During fiscal year 2023, no outside
director attended any such conference or other meeting. During fiscal year 2023, John B. Dicus, Chairman, President and Chief Executive
Officer, was paid $12,000 by Capitol Federal Savings and $12,000 by the Company ($24,000 in total) for his service as a director of Capitol
Federal Savings and the Company.
The
following table sets forth certain information regarding the compensation earned by or awarded to each director, other than Mr. Dicus,
who served on the Board of Directors of the Company in fiscal year 2023. Compensation payable to Mr. Dicus for his service
as a director is included in the “Salary” column of the Summary Compensation Table, under “Executive Compensation.”
Name | |
Fees Earned or Paid in Cash ($)(1) | | |
Stock Awards ($)(2) | | |
Option Awards ($)(3) | | |
All Other Compensation ($)(4) | | |
Total ($) | |
Michel’ Philipp Cole | |
$ | 72,000 | | |
| --- | | |
| --- | | |
$ | 493 | | |
$ | 72,493 | |
Morris J. Huey II | |
| 72,000 | | |
| --- | | |
| --- | | |
| --- | | |
| 72,000 | |
Jeffrey M. Johnson | |
| 72,000 | | |
| --- | | |
| --- | | |
| --- | | |
| 72,000 | |
Michael T. McCoy, M.D. | |
| 72,000 | | |
| --- | | |
| --- | | |
| --- | | |
| 72,000 | |
James G. Morris | |
| 72,000 | | |
| --- | | |
| --- | | |
| --- | | |
| 72,000 | |
Carlton A. Ricketts | |
| 72,000 | | |
| --- | | |
| --- | | |
| 1,559 | | |
| 73,559 | |
Jeffrey R. Thompson | |
| 77,000 | | |
| --- | | |
| --- | | |
| --- | | |
| 77,000 | |
| (1) | Includes annual retainers for service on the Boards of Directors of the Company and Capitol Federal Savings. For Mr. Thompson,
also includes $5,000 for serving as the Audit Committee chair. |
| (2) | As of September 30, 2023, Mr. Ricketts was the only director listed in the table who held any unvested shares of restricted
stock. Mr. Ricketts held 1,350 unvested shares of restricted stock as of that date. |
| (3) | As of September 30, 2023, the total number of shares underlying the stock options held by each director listed in the table was
as follows: Mr. Huey – 10,000 shares; Mr. Johnson – 15,000 shares; Dr. McCoy – 15,000 shares; and Mr. Thompson
– 15,000 shares. |
| (4) | For Ms. Cole and Mr. Ricketts, represents dividends paid on unvested shares of restricted stock. |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This
section discusses the Company’s compensation program, including how it relates to the executive officers named in the compensation
tables that follow this section (who we sometimes refer to below and elsewhere in this proxy statement as the “named executive
officers,” or “NEOs”), consisting of:
| ● | John B. Dicus, our Chairman, President and Chief Executive Officer, |
| ● | Kent G. Townsend, our Executive Vice President, Chief Financial Officer and Treasurer, |
| ● | Rick C. Jackson, our Executive Vice President and Chief Lending Officer, |
| ● | Robert D. Kobbeman, our Executive Vice President and Chief Commercial Banking Officer (who plans to retire from these positions effective
February 29, 2024) and |
| ● | William J. Skrobacz, Jr., our Executive Vice President and Chief Retail Operations Officer. |
Set forth below is an analysis of the objectives
of our compensation program, the material compensation policy decisions we have made under this program and the material factors we considered
in making those decisions.
Overview of Compensation Program
The
Compensation Committee of our Board of Directors (the “Committee”), which consists solely of independent directors, has responsibility
for developing, implementing and monitoring adherence to the Company’s compensation philosophies and program. The Stock Benefit
Committee, also comprised entirely of independent directors, administers and grants stock-based compensation awards from time to
time. Grants currently are made under our 2012 Equity Incentive Plan, which was approved by our stockholders in January 2012. One
NEO has outstanding option awards granted under our 2000 Stock Option and Incentive Plan, which was approved by our stockholders in 2000
and expired as to new awards in April 2015. See “Stock Incentive Plans” below. The Committee is mindful of the compensation
offered in the banking industry, both regionally and nationally, and the Company’s business strategies. The Committee strives to
provide a complete compensation program that incentivizes executive officers to maximize the Company’s performance with the goal
of enhancing stockholder value. The Company’s compensation program is based upon the following philosophies:
| ● | preserve the financial strength, safety and soundness of the Company and the Bank; |
| ● | reward and retain key personnel by compensating them in the range of salaries at comparable financial institutions and making them
eligible for annual cash bonuses based primarily on the Company’s performance; |
| ● | focus management on maximizing earnings while managing risk by maintaining high asset quality, managing interest rate risk within
Board guidelines, emphasizing cost control, establishing adequate compliance programs and maintaining appropriate levels of capital; and |
| ● | provide an opportunity to earn additional compensation if the Company’s stockholders experience returns through stock price
appreciation and/or dividends. |
The
Company’s primary forms of current compensation for executive officers include base salary, short-term incentive compensation and
long-term incentive compensation. The Company has provided long-term compensation in the form of stock option and restricted stock
awards and an employee stock ownership plan (“ESOP”). The Company also has a tax-qualified defined contribution retirement
plan, health and life insurance benefits and paid time off benefits. The Company offers insurance benefits, including flexible spending
accounts for unreimbursed medical expenses and child care expenses, on a pre-tax basis, in which executive officers may participate with
the same eligibility requirements as all other employees.
As
a general matter, we have not offered employment agreements to any of our officers or employees. We currently believe our named
executive officers receive sufficient incentives from the existing compensation program that employment agreements are not necessary to
induce them to remain with the Company. The Company has entered into change in control severance agreements with each of the NEOs. Each
agreement entitles the executive to a severance payment if the executive’s employment is terminated under certain circumstances
within six months before or within 24 months after a change in control of the Company. The Company believes these agreements will help
incentivize the executives to continue their employment with the Company amid the uncertainty that may arise in the event of a change
in control. See “Change in Control Severance Agreements” and “Payments upon Termination or Change in Control.”
The Committee meets as needed during the year to
consider all aspects of the Company’s compensation program, including a review at least once per year of a tally sheet for each
NEO quantifying every component of the NEO’s compensation package, in order to satisfy itself that the total compensation paid to
the NEO is reasonable and appropriate. As discussed in greater detail below under “Role of Management,” the Committee meets
with management to receive their analyses and recommendations, as requested by the Committee, considers the information provided to the
Committee and makes decisions accordingly.
Base Salary
The
Committee sets the base salaries for all executive officers of the Company. The Committee sets policy directing fair and reasonable
compensation levels throughout the Company by taking into account the influences of market conditions on each operational area of the
Company and the relative compensation at different management levels within each operational area. The Committee recognizes that base
salary is the primary compensation package component that is fixed in amount before the fiscal year begins and is paid during the year
without regard to the Company’s performance. The base salary for each NEO reflects the Committee’s consideration of a combination
of factors, including: competitive market salary, the comparability of responsibilities of similarly situated NEOs at other institutions,
the officer’s experience and tenure, overall operational and managerial effectiveness and breadth of responsibility for each officer.
Each
NEO’s base salary and performance is reviewed annually. Base salary is not targeted to be a percentage of total compensation, although
the Committee does consider the total amount of each NEO’s compensation when setting NEO base salaries.
The
Committee has not used third party consultants or other service providers to present compensation plan suggestions or market compensation
data for executive officers. Instead, the Committee has directed the President and CEO to provide comparable market salary data
for executive officers based upon a selected population of comparable financial institutions.
The
most recent comparison information was compiled from information reported in the then-most recent proxy statements of the financial
institutions listed below. The financial institutions selected for comparison purposes were based upon the President and CEO’s knowledge
of the selected financial institutions and the comparability of their operations, corporate structure and/or size relative to the Company.
Financial institutions selected for comparison purposes may be added or removed from the list each year as a result of acquisitions, closings,
operating in a distressed mode or because another financial institution compares more appropriately to the operations of the Company than
a previously listed financial institution.
The
financial institutions in the most recent comparison included the following publicly held financial institutions with total assets,
as of each institution’s most recent fiscal year-end, of between $5.0 billion and $21.7 billion: TFS Financial (organized in a mutual
holding company, or MHC, structure), Washington Federal, Northwest Bancshares, Community Bank System, BancFirst, Provident Financial Services,
Park National Corporation, National Bank Holdings, Heartland Financial USA, Republic Bancorp, First Busey Corporation, Great Southern
Bancorp, Inc., and Equity Bancshares, Inc.
The
comparison shows how our executive officer salaries and annual cash compensation compare on a national and local scale with other financial
institutions, reflecting institutions among which we would most likely compete for executive talent, with a slightly greater weighting
to regional institutions. The Committee received information showing the base compensation of the CEO, CFO and the next three NEOs in
each company’s proxy statement. The levels of compensation paid to our CEO and CFO are compared directly to the equivalent
titles in the listed companies. The compensation of the highest paid NEO within each of the companies listed above, not including the
CEO or CFO, is compared to compensation paid to our most highly compensated NEO, not including the CEO or CFO. The compensation of the
second highest paid NEO within each of the companies listed above, not including the CEO or CFO, is compared to compensation paid to our
second most highly compensated NEO, not including the CEO or CFO. The compensation of the third highest paid NEO within each of the companies
listed above, not including the CEO or CFO, is compared to compensation paid to our third most highly compensated NEO, not including the
CEO or CFO.
The
Committee reviews the comparison data provided and does not attempt to set the base salaries of our NEOs at specific target percentiles
of the comparison data provided. The Committee uses this data in conjunction with setting the base salary of each NEO, whose salary is
discussed below, in light of the range of base salaries paid among the comparable financial institutions. Because the positions other
than the CEO and CFO may not be directly comparable between financial institutions, the Committee exercises its judgment in determining
where in the salary ranges of the comparison financial institutions the compensation for our other NEOs should fall. The salaries for
the CEO and CFO, in general, fall within the 25th to 50th percentile of the range of comparable salaries
based upon a review of the comparison companies. In general, the range of salaries for the NEOs other than the CEO and CFO is narrow because
the comparison in range of salaries among the other NEO executive officer positions in the various market comparisons reviewed is not
considered sufficiently different by the Committee to warrant a wider spread in base salary. The salary of the CEO is established to reflect
his hands-on approach to leadership and the involvement he provides the Company on a daily basis, the leadership roles he fills in local,
regional and national industry-related activities and his direct involvement in addressing stockholder value and stockholder relations.
The salaries of the CFO and each of the other NEOs are established to also reflect their respective roles in the management structure
of the Company.
The Committee does not put as much emphasis on
the market comparison information when considering bonus or other incentive compensation as it does on base salary for the Company’s
executive officers. This is primarily because of the divergence in practice regarding the structure of bonus plans and the types of incentives
offered executive officers at other financial institutions.
Compensation and Incentive Plan Risk Assessment
At
the direction of the Compensation Committee, our Audit Services Director with the assistance of our Human Resources Director, reviewed
all compensation and incentive programs within the Company to ensure the programs were working as designed and intended. The results of
this review indicated that all plans were working as designed and intended and did not allow for compensation benefits beyond those intended
by the programs.
Bonus Incentive Plans
All
officers of the Company are eligible to receive cash bonuses on an annual basis under the Short Term Performance Plan (“STPP”)
based upon the Company’s financial performance and the individual officer’s performance during the fiscal year. The cash awards
are generally made in January of the year following the fiscal year end of September 30 (e.g., in January 2023,
in the case of the STPP award for the fiscal year ended September 30, 2022) (the “Scheduled Payment Date”).
A participant’s STPP award may not exceed
the percentage of salary specified in the plan for his or her position level. For the Chairman, President and CEO, the maximum percentage
is 60%, and for each of the other NEOs, the maximum percentage is 40%. The STPP is intended to:
| ● | promote stability of operations and the achievement of earnings targets and business goals; |
| ● | link executive compensation to specific corporate objectives and individual results; and |
| ● | provide a competitive reward structure for officers. |
Generally,
in November of each fiscal year, after considering management’s company performance recommendations (see “Role of Management”
below), the Committee sets target, maximum and minimum performance levels for that year. The targeted performance level is the most likely
performance level forecasted for the Company in the ensuing fiscal year given the operational considerations described below. As discussed
below, the Committee considers three targets in order to focus management on the performance of the Company as a whole: efficiency ratio;
basic earnings per share and return on average equity. By focusing on the overall performance of the Company, over time the Committee
believes the value to the stockholder from management’s performance will be maximized. In seeking to maximize the performance of
the Company, management focuses on all critical risks and objectives of the Company. By not taking excessive credit risk and keeping interest
rate risk at or below levels established by the Board, it is believed that the Company’s earnings likely will remain strong
over time. By managing the amount of capital of the Bank, the Company benefits by having a proper amount of leverage which improves the
opportunities to enhance earnings. Focusing on cost control helps to mitigate risks that operating expenses will rise beyond the level
at which they are supportable by the Bank’s operating income.
As
indicated above, the areas of Company performance targeted consist of the efficiency ratio, basic earnings per share and return
on average equity. The efficiency ratio is computed by dividing total non-interest expense by the sum of net interest and dividend income
and total other income. Basic earnings per share is calculated by dividing net income for the fiscal year by the average basic shares
outstanding for the fiscal year. Return on average equity is computed by dividing net income for the fiscal year by the average month
end balance of total stockholders’ equity for the thirteen monthly time periods from the prior fiscal year end through the current
fiscal year end, ending September 30th. The efficiency ratio, basic earnings per share and return on average equity are equally weighted.
In
general, the Company performance targets for the STPP are based upon the ensuing year’s forecast of business activity, interest
rates, pricing assumptions, operating assumptions and net income determined using market- based assumptions as of September 30th
of the just completed fiscal year. The purpose of the efficiency ratio performance target is to focus management on keeping operating
expenses under control and at the lowest level possible, while reflecting the impact of interest rates on the operations of the Company.
The targets for earnings per share and return on average equity are established based upon the forecasted performance of the Company and
anticipated capital management plans for the Company. Forecasted performance includes the Company’s internal forecasts and the forecasts
of outside analysts. For fiscal year 2023, the targets were established based upon internally generated (forecasted) performance results
and externally generated performance results from independent analysts who cover the Company. The results were weighted 80% for the internally
generated results and 20% for the external results.
There are two “scales” for each performance
target: (i) a “target” scale, which includes increments between the target level of performance and a maximum level of
performance, and decrements between the target level of performance and a minimum level of performance; and (ii) an “award”
scale, which proceeds at one percent increments beginning at 20% in correspondence to the minimum performance level on the target scale,
through 60% in correspondence to the target level of performance on the target scale, and up to 100% in correspondence to the maximum
level of performance on the target scale. Plan participants will earn a percentage on the award scale for a particular performance target
of between 20% (if performance is at the minimum level of performance on the target scale) and 100% (if performance is at or above the
maximum level of performance on the target scale). The percentage earned on the award scale for a particular performance target will be
zero if performance is below the minimum level of performance on the target scale. The average of the percentages earned on the award
scales for the three performance targets represents the total percentage of the maximum possible STPP award each participant has earned
for the Company performance component of the STPP award. In order to pay the full amount of an award under the STPP based on performance
above the target level, the Committee must determine that the Company had actual net income for the fiscal year in excess of targeted
net income for the fiscal year equal to at least five times the aggregate dollar amount of the portion of the total STPP awards for that
year that would be made above the target level.
Below
is a table showing the targets established and the performance achieved for fiscal years 2023, 2022 and 2021. The “percent
of total” columns represent, for each performance target (efficiency ratio, basic earnings per share and return on average equity),
the percentage earned on the award scale for that target, based on the level of achievement on the target scale. The “total”
column represents the average of the award scale percentages earned for the three performance targets, which, as noted above, represents
the total percentage of the maximum possible STPP award that has been earned for the Company performance component of the STPP award.
For fiscal year 2023, for which the Company incurred a net loss, the award scale percentage earned for each performance target was determined
to be zero. For fiscal year 2022, the levels of achievement for basic earnings per share and return on average equity were in excess of
the maximum, while the level of achievement for the efficiency ratio was between the target and the maximum. For fiscal year 2021, the
levels of achievement for earnings per share and return on average equity were between the target and the maximum and for the efficiency
ratio the level of achievement was between the target and the minimum.
| |
Target | | |
Performance | | |
Percent of total | | |
| |
Fiscal
Year | |
Efficiency
Ratio | | |
Basic
EPS | | |
ROAE | | |
Efficiency
Ratio | | |
Basic
EPS | | |
ROAE | | |
Efficiency
Ratio | | |
Basic
EPS | | |
ROAE | | |
Total | |
2023 | |
| 59.14 | % | |
$ | 0.48 | | |
| 6.03 | % | |
| -626.63 | % | |
$ | (0.76 | ) | |
| -9.48 | % | |
| 0 | % | |
| 0 | % | |
| 0 | % | |
| 0 | % |
2022 | |
| 54.59 | % | |
$ | 0.56 | | |
| 6.16 | % | |
| 52.39 | % | |
$ | 0.62 | | |
| 7.16 | % | |
| 79 | % | |
| 100 | % | |
| 100 | % | |
| 93 | % |
2021 | |
| 55.36 | % | |
$ | 0.53 | | |
| 5.64 | % | |
| 56.91 | % | |
$ | 0.56 | | |
| 5.99 | % | |
| 50 | % | |
| 86 | % | |
| 85 | % | |
| 73 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Each
NEO receives 90% of their STPP award based upon the achievement of the three pre-established financial performance targets of the Company
discussed above. This is intended to focus each named executive officer on maximizing the overall performance of the Company and not on
achievement of goals in a particular operational area. Because of the predominance of the focus of the NEO bonuses on the overall performance
of the Company, specific individual performance goals are not usually set for named executive officers. Instead, each NEO’s individual
contribution to the Company’s performance is a subjective determination by the Committee following discussion with the President
and CEO, giving consideration to each NEO’s response to the Company’s changing operational needs during the year. If,
as was the case for fiscal year 2023, the Company incurs a net loss for the fiscal year, the NEOs will not receive an STPP award.
The
STPP includes a clawback provision that is applicable to all participants in the plan. Under this provision, any payment made under the
STPP that was based upon materially inaccurate financial statements requiring a restatement or was a result of fraud in determining
an individual or company performance metric must be paid back if discovered within 24 months of the filing of the inaccurate financial
statement(s) or the discovery of the fraud. The STPP repayment, in whole or in part, is at the discretion of the Committee. The Company
has also adopted a separate compensation recovery policy that incorporates the requirements of Section 10D of the securities Exchange
Act of 1934, as amended, and NASDAQ Listing Rule 5608.
The
Committee has the authority under the STPP to reduce bonus awards to executive officers that would otherwise be earned, for any reason
the Committee believes appropriate. This may be done for all executive officers or for individual executive officers. The Committee
did not exercise any such negative discretion with respect to STPP awards for fiscal years 2022 or 2021. As noted above, no STPP awards
were made to the NEOs for fiscal year 2023.
The
Company also maintains a deferred incentive bonus plan (“DIBP”) for executive officers in conjunction with the STPP. The DIBP
is administered as an unfunded plan of deferred compensation with all benefits expensed and recorded as liabilities as they are accrued.
The purpose of the two plans working together is to provide incentives and awards to executive officers to enhance the Company’s
performance and stockholder value over a four-year time horizon. Each named executive officer has the opportunity to defer a minimum
of $2,000 and up to 50% (up to a maximum of $100,000) of their cash award under the STPP. The amount deferred receives a 50% match that
is accrued by the Company for accounting purposes over a three year mandatory deferral period. The amount deferred plus the 50% match
is deemed to have been invested in Company stock on the last business day of the calendar year preceding the receipt of the STPP award
at the closing price on that date (e.g., on December 31, 2022, in the case of the STPP award for fiscal year 2022, which was paid
in January 2023), in the form of phantom stock. The number of shares of phantom stock deemed purchased receives dividend equivalents
as if the stock were owned by the named executive officer. At the end of the mandatory deferral period, the DIBP is paid out in cash and
is comprised of the initial amount deferred, the 50% match, the amount of the dividend equivalents on the phantom shares over the deferral
period and the increase in the market value of the Company’s stock over the deferral period, if any, on the phantom shares. There
is no provision for the reduction of the DIBP award at the end of the mandatory deferral period if the market value of the Company’s
stock at that time is lower than the market value at the time of the deemed investment.
For
participants in the STPP, it is generally required that the recipient be employed by the Bank through the last day of the fiscal year
to receive an award. For participants in the DIBP, the recipient must remain continuously employed by the Bank during the mandatory
deferral period to receive the Company match, dividend equivalents on the phantom shares over the deferral period and the increase in
the market value of the Company’s stock over the deferral period, if any, on the phantom shares. In the event that an NEO leaves
the company during the deferral period for reasons other than a change in control, the NEO would be entitled to receive the deferred funds
without the Company match or any earnings (including dividend equivalents) on the deferred funds or on the Company match.
The incentive bonus amounts awarded to the NEOs
for fiscal years 2022 and 2021 under the STPP are set forth in the “Non-Equity Incentive Plan Compensation” column of the
Summary Compensation Table. As noted above, no incentive bonus amounts were awarded to the NEOs for fiscal year 2023 under the STPP.
Stock Incentive Plans
The
Company’s Stock Incentive Plans are designed to provide incentives for long-term positive performance of the executive officers
by aligning their interests with those of our stockholders by providing the executive officer the opportunity to participate in the appreciation,
if any, in the Company’s stock price which may occur after the date options are granted. Awards of restricted stock are intended
to further align executive officers interests with stockholders’ interest. Awards of stock options and restricted stock currently
are made under our 2012 Equity Incentive Plan, which was approved by stockholders in January 2012. The Stock Benefit Committee
administers this plan, determines eligibility and grants awards. Since fiscal year 2017, awards have primarily been made in conjunction
with the hiring of an eligible officer and promotions. Also, since fiscal year 2017, new awards have primarily been in the form of restricted
stock in order to provide award recipients with a direct and immediate sense of equity ownership. In addition, the 2012 Equity Incentive
Plan allows stock awards for exceptional performance. Mr. Skrobacz, who joined the Company as Chief Strategy Officer in July 2021
and was promoted to Chief Retail Operations Officer in April 2023, was awarded 23,500 shares of restricted stock during fiscal year
2023. No other NEO received an equity incentive award during fiscal year 2023.
As required by the 2012 Equity Incentive Plan,
stock options have an exercise price that is equal to the closing price as of the date of the grant. We do not coordinate the timing of
options and stock awards with the release of material non-public information.
Role of Management
The Committee makes all decisions regarding the
compensation of our executive officers. The Committee has asked the President and CEO to provide, in addition to the comparable market
salary data based upon a selected population of comparable financial institutions at both the regional and national levels, reviews of
the performance of each NEO except for himself and recommendations for the salaries of each NEO except for himself and any recommendations
for stock awards. Management recommends the target, minimum and maximum performance goals for the Company and the related bonus targets
under the STPP to be approved by the Committee. In addition, management may from time to time recommend changes to the compensation program
in response to changes in the marketplace in which the Company competes for executive talent and in light of the absolute performance
level of the Company. The compensation of the CEO is determined by the Committee without prior recommendations from him. The Committee
makes all decisions in light of the information provided and the Committee members’ experience and expectations for all NEOs.
Stockholder
“Say-on-Pay” Vote
Since
our annual meeting of stockholders held in February 2011, we have been required under the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”) to include a non-binding, advisory “say-on-pay” vote in our annual
meeting proxy statement at least once every three years, and, at least once every six years, a non-binding, advisory vote on the frequency
of future say-on-pay votes (commonly referred to as a “say-on-pay frequency vote”), with stockholders having the choice of
every year, every two years or every three years. We last had a “say-on-pay frequency vote” at our annual meeting of stockholders
held in January 2023, on which stockholders cast the most votes in favor of a frequency of every year for future say-on-pay votes,
and will be holding a say-on-pay frequency vote again at our annual meeting of stockholders in 2029. At our annual meeting of stockholders
held in January 2023, stockholders approved the compensation of the Company’s executives, as disclosed in the Company’s
proxy statement for that meeting, with approximately 97% of the votes cast in favor.
Perquisites and Other Personal Benefits
For
fiscal year 2023, no NEO received any perquisites or other personal benefits in excess of $10,000 in the aggregate.
Retirement and Other Benefits
The Company provides an ESOP and a defined contribution
plan to all employees who qualify for participation under each plan. The ESOP provides for the allocation of shares of the Company’s
common stock annually among all participants based upon each employee’s qualifying compensation as a percentage of the total of
all qualifying compensation for all participants. Each NEO participates in the ESOP and the defined contribution plan.
The
defined contribution plan is a 401(k) plan in which the eligibility and participation requirements, allocation calculations and contribution
limits apply to all employees, including NEOs. All employees have the opportunity to direct their investment in the plan. For fiscal year
2023, the Company matched 25% of the employee’s contribution, up to the first 3% of eligible compensation contributed by
the employee. The Company does not offer any defined benefit plan or post-retirement benefit plan that requires expense to the Company
following the termination of employment of any NEO.
The
Company provides a life insurance benefit for every employee who works on average more than 20 hours per week. The benefit is 1.0
times the employee’s base salary, subject to a cap on the total death benefit of $500,000 in the case of Mr. Dicus, $389,000
in the case of Mr. Townsend, $300,000 in the case of Mr. Jackson, $300,000 in the case of Mr. Kobbeman and $235,000 in
the case of Mr. Skrobacz. Benefits for all employees in excess of $50,000 result in taxable income. Each of the NEOs participates
in this benefit program.
The
Company has purchased a life insurance annuity for the CEO, which includes a $5.0 million death benefit. The salary of the CEO
has been grossed up for the cost of the annuity and the income tax associated with the resulting imputed taxable income. The Company has
provided this gross up because the Company wished to provide the life insurance annuity benefit to the CEO without him having to bear
the associated tax obligation. The gross up for this benefit is not included in the base salary of the CEO, but is included in the “All
Other Compensation” column of the Summary Compensation Table.
In
addition to the life insurance benefits discussed above, the Bank has purchased Bank Owned Life Insurance for eligible employees.
Each insured employee was provided the opportunity to designate a beneficiary to receive a death benefit equal to the insured employee’s
base salary as of the Board approval date of the purchase if the insured dies while employed by the Bank. All NEOs other than Messrs. Kobbeman
and Skrobacz are covered under Bank Owned Life Insurance purchased by the Bank and have designated beneficiaries. Once the covered NEO’s
employment with the Bank terminates, the death benefit to the beneficiary of the covered NEO terminates as well. Mr. Kobbeman is
covered under Bank Owned Life Insurance policies originally purchased by Capital City Bank and assumed by the Bank in connection with
the Company’s acquisition of CCB and Capital City Bank. Capital City Bank did not offer its employees the ability to designate a
beneficiary for any death benefits payable under its policies.
Termination or Change in Control Payments
The
Company has entered into agreements with each of the NEOs to provide a severance payment if their employment is terminated under
specified circumstances within six months before or 24 months after a change in control of the Company. See “Change in Control Severance
Agreements” and “Payments upon Termination or Change in Control.”
The terms of our stock options and restricted stock
awards provide for accelerated vesting only in the case of a change in control. See “Payments upon Termination or Change in Control.”
Stock Ownership Guidelines
In November 2011, the Company’s Board
of Directors adopted stock ownership guidelines, effective January 1, 2012, which are applicable to the Company’s directors
and executive and senior officers. It is the Board’s intention to encourage recipients of future equity-based awards, if any, to
retain ownership of the shares relating to those awards to further align their interests with the interests of the Company’s stockholders.
The guidelines provide as follows:
| ● | The CEO shall own five times his salary, directors shall own four times their annual fee, executive vice presidents and senior vice
presidents shall own three times their salaries and first vice presidents shall own one times their salary, in each case in shares of
the Company’s common stock. Each director and officer shall have five years to attain the ownership guidelines. |
| ● | Shares owned directly or by immediate family members of the director or officer shall be included in determining the amount of common
stock owned for purposes of the guidelines. |
| ● | Shares acquired in the ESOP through the reinvestment of dividends shall also be included in determining the amount of common stock
owned for purposes of the guidelines. |
| ● | If, at the end of five years, a director or an officer does not comply with the ownership guidelines, he or she shall not receive
future awards under the Company’s stock benefit plans until he or she complies with the guidelines. |
Other Tax Considerations
As in effect during fiscal year 2018 and prior
taxable years, Section 162(m) of the Internal Revenue Code generally eliminated the deductibility of compensation over $1 million
paid to the principal executive officer and certain highly compensated executive officers of publicly held corporations, excluding certain
qualified performance-based compensation. Stock options automatically constituted qualified performance-based compensation, provided
that certain plan content and grant procedure requirements were met. Effective for fiscal 2019 and future taxable years, H.R. 1,
originally known as the "Tax Cut and Jobs Act," amended Section 162(m) to provide that qualified performance-based
compensation will be subject to the $1 million deduction limit, subject to grandfathering of amounts payable under certain agreements
in effect on November 2, 2017.
Summary Compensation Table
The
following table sets forth information concerning the compensation paid to or earned by the named executive officers for fiscal years
2023, 2022 and 2021:
Name
and
Principal Position |
|
Year |
|
|
Salary
($)(1) |
|
|
Bonus
($)(2) |
|
|
Stock
Awards
($)(3) |
|
|
Non-Equity
Incentive Plan
Compensation
($)(4) |
|
|
All
Other
Compensation
($)(5) |
|
|
Total
($) |
|
John B. Dicus, Chairman |
|
2023 |
|
|
$ |
742,939 |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
119,092 |
|
|
$ |
862,031 |
|
President and Chief Executive |
|
2022 |
|
|
|
722,654 |
|
|
|
--- |
|
|
|
--- |
|
|
|
435,451 |
|
|
|
125,901 |
|
|
|
1,284,006 |
|
Officer |
|
2021 |
|
|
|
706,750 |
|
|
|
--- |
|
|
|
--- |
|
|
|
351,415 |
|
|
|
129,413 |
|
|
|
1,187,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kent G. Townsend, Executive |
|
2023 |
|
|
$ |
403,469 |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
23,396 |
|
|
$ |
426,865 |
|
Vice President, Chief |
|
2022 |
|
|
|
392,231 |
|
|
|
--- |
|
|
|
--- |
|
|
|
179,329 |
|
|
|
26,980 |
|
|
|
598,540 |
|
Financial Officer and
Treasurer |
|
2021 |
|
|
|
383,250 |
|
|
|
--- |
|
|
|
--- |
|
|
|
141,940 |
|
|
|
29,472 |
|
|
|
554,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rick C. Jackson, Executive |
|
2023 |
|
|
$ |
296,539 |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
18,773 |
|
|
$ |
315,312 |
|
Vice President and Chief |
|
2022 |
|
|
|
285,962 |
|
|
|
--- |
|
|
|
--- |
|
|
|
131,878 |
|
|
|
22,468 |
|
|
|
440,308 |
|
Lending Officer |
|
2021 |
|
|
|
278,000 |
|
|
|
--- |
|
|
|
|
|
|
|
102,648 |
|
|
|
25,915 |
|
|
|
406,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Kobbeman, Executive |
|
2023 |
|
|
$ |
326,308 |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
22,363 |
|
|
$ |
348,671 |
|
Vice President and Chief |
|
2022 |
|
|
|
317,423 |
|
|
|
--- |
|
|
|
--- |
|
|
|
146,790 |
|
|
|
29,916 |
|
|
|
494,129 |
|
Commercial Banking Officer |
|
2021 |
|
|
|
310,500 |
|
|
|
--- |
|
|
|
--- |
|
|
|
115,056 |
|
|
|
34,677 |
|
|
|
460,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William
J. Skrobacz, Jr., |
|
2023 |
|
|
$ |
209,644 |
|
|
$ |
--- |
|
|
$ |
160,590 |
|
|
$ |
--- |
|
|
$ |
10,785 |
|
|
$ |
381,019 |
|
Executive Vice President
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Retail Operations
Officer(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
| (1) | For fiscal years 2023, 2022 and 2021, includes director fees of $24,000 for Mr. Dicus. |
| (2) | Bonus amounts are reported under the “Non-Equity Incentive Plan Compensation” column. |
| (3) | Represents the grant date fair value of the award under Accounting Standards Codification Topic No. 718,
Compensation-Stock Compensation (“ASC Topic 718”), based on the number of shares of restricted stock awarded and the fair
market value of the Company’s common stock on the date the award was made. The assumptions used in the calculation of this amount
are included in Note 11 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K
for the fiscal year ended September 30, 2023 filed with the SEC. [ |
| (4) | Represents incentive bonus amounts awarded for performance in fiscal years 2022 and 2021. No bonuses were
awarded for fiscal year 2023. The bonus amounts for fiscal years 2022 and 2021 include Capitol Federal Savings’ matching contributions
under the Company’s DIBP to those named executive officers who elected to defer receipt of a portion of their bonus for those fiscal
years, as follows: |
| |
2022 | | |
2021 | |
John B. Dicus | |
$ | 50,000 | | |
$ | 50,000 | |
Kent G. Townsend | |
$ | 35,866 | | |
$ | 28,388 | |
Rick C. Jackson | |
$ | 26,376 | | |
$ | 20,530 | |
Robert D. Kobbeman | |
$ | 29,358 | | |
$ | 23,011 | |
The amount deferred,
if any, plus the matching contribution on the deferred amount is deemed to be invested in the Company’s common stock through the
purchase of phantom stock units. There will not be any reduction to the payout amount of the phantom stock units if the stock price has
depreciated from the beginning of the deemed investment period of the phantom stock units to the end of such period. Receipt of the matching
contribution is contingent on the executive officer remaining employed with the Company for a period of three years following the award
of the phantom stock units. For additional information regarding this plan, see “Non-Qualified Deferred Compensation” below.
| (5) | Amounts include matching contributions under Capitol Federal Savings’ 401(k) plan, values (based
on the closing price of the Company’s common stock on the last trading day of the fiscal year) of allocations under the ESOP, term
life insurance premiums and earnings (in the form of Company stock price appreciation (depreciation) and dividend equivalents during the
fiscal year) accrued by the Company on outstanding phantom stock units awarded under the DIBP. For fiscal year 2023, these include $2,288,
$6,861, $3,830 and $21,015 for Mr. Dicus; $2,288, $6,861, $3,281 and $10,966 for Mr. Townsend; $2,288, $6,861, $1,646 and $7,978
for Mr. Jackson; $2,288, $6,861, $4,516 and $8,698 for Mr. Kobbeman; and $1,982, $5,945, $401 and $0 for Mr. Skrobacz.
For Mr. Dicus, the amount for fiscal year 2023 also includes premium on universal life insurance policy of $66,376 and the amount
reimbursed for all or part of the tax liability resulting from the payment of such premium of $18,722. For Mr. Skrobacz, the amount
for fiscal year 2023 also includes dividends paid on unvested shares of restricted stock totaling $2,457. |
| (6) | No compensation information is provided for Mr. Skrobacz for fiscal years 2022 and 2021 because he
was not a named executive officer for those fiscal years. |
Grants of Plan-Based Awards
| |
| |
Estimated Possible Payouts Under Non- Equity
Incentive Plan Awards(1) | | |
All Other Stock Awards: Number of Shares | | |
Grant Date Fair Value of Stock | |
Name | |
Grant Date | |
Threshold ($) | | |
Target ($) | | |
Maximum ($) | | |
of Stock or Units (#) | | |
and Option Awards | |
John B. Dicus | |
n/a | |
$ | 85,680 | | |
$ | 257,040 | | |
$ | 428,400 | | |
| --- | | |
| --- | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Kent G. Townsend | |
n/a | |
$ | 32,080 | | |
$ | 96,240 | | |
$ | 160,400 | | |
| --- | | |
| --- | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Rick C. Jackson | |
n/a | |
$ | 23,520 | | |
$ | 70,560 | | |
$ | 117,600 | | |
| --- | | |
| --- | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Robert D. Kobbeman | |
n/a | |
$ | 25,920 | | |
$ | 77,760 | | |
$ | 129,600 | | |
| --- | | |
| --- | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
William J. Skrobacz, Jr. | |
n/a | |
$ | 15,360 | | |
$ | 46,080 | | |
$ | 76,800 | | |
| --- | | |
| --- | |
| |
1/24/2023 | |
| --- | | |
| --- | | |
| --- | | |
| 3,000 | (2) | |
$ | 25,290 | (4) |
| |
7/25/2023 | |
| --- | | |
| --- | | |
| --- | | |
| 20,500 | (3) | |
$ | 135,300 | (4) |
| (1) | For each named executive officer, represents the threshold (i.e., lowest), target and maximum amounts that were potentially payable
for fiscal year 2023 under the Company’s STPP. No amounts were earned under these awards for fiscal year 2023. For additional information
regarding the STPP, see “Compensation Discussion and Analysis—Bonus Incentive Plans.” |
| (2) | Represents a restricted stock award to Mr. Skrobacz with the following vesting schedule: 20% increments on July 22, 2023,
2024, 2025, 2026 and 2027, respectively. |
| (3) | Represents a restricted stock award to Mr. Skrobacz with the following vesting schedule: 25% increments on January 30, 2024,
2025, 2026 and 2027, respectively. |
| (4) | Represents the grant date fair value of the award determined in accordance with ASC Topic 718. The assumptions used in calculating
the grant date fair value of the award are included in Note 11 of the Notes to Consolidated Financial Statements contained in the Company’s
Annual Report on Form 10-K for the fiscal year ended September 30, 2019 filed with the SEC. |
Change in Control Severance Agreements
As
noted under “Compensation Discussion and Analysis,” the Company has entered into change in control severance agreements
with each of the named executive officers. Each agreement entitles the executive to a severance payment if, within six months before or
24 months after a change in control of the Company, the executive’s employment is terminated by the Company without cause, is terminated
as a result of the executive’s death, disability or retirement or is terminated by the executive for “good reason.”
The term “good reason” includes a material reassignment of the executive’s duties or a significant reduction in the
executive’s authority or responsibility, in each case without his express written consent, a reduction in the executive’s
then-current base salary or a failure to provide the executive with substantially the same fringe benefits that were provided to the executive
immediately prior to entering into the agreement.
The
amount of the severance payment under each change in control severance agreement is 2.99 times the executive’s average annual W-2
compensation during the five full calendar years prior to the date of termination of employment. The agreements provide that
severance and other payments that are subject to a change in control will be reduced as much as necessary to ensure that no amounts payable
to the executive will be considered excess parachute payments under Section 280G of the Internal Revenue Code.
For information regarding the amounts that would
have been payable to the named executive officers under their change in control severance agreements if their employment had been terminated
as of September 30, 2023 under circumstances entitling them to such payments, see “Payments Upon Termination or Change in Control.”
Outstanding Equity Awards at September 30,
2023
The following table provides information regarding
the unexercised stock options and stock awards held by each of the named executive officers as of September 30, 2023.
| |
Option Awards | | |
Stock Awards | |
Name | |
Number of Securities Underlying Unexercised Options (#) Exercisable | | |
Option Exercise Price ($) | | |
Option Expiration Date | | |
Number of Shares or Units of Stock That Have Not Vested (#) | | |
Market Value of Shares or Units of Stock That Have Not Vested ($) | | |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |
John B. Dicus | |
| 100,116 (1) | | |
$ | 11.91 | | |
| 05/14/2027 | | |
| --- | | |
| --- | | |
| 7,093 | (3) | |
$ | 14,434 | (3) |
| |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 13,239 | (4) | |
| 14,232 | (4) |
| |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 17,341 | (5) | |
| 4,422 | (5) |
Total | |
| 100,116 | | |
| | | |
| | | |
| | | |
| | | |
| 37,673 | | |
$ | 33,088 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Kent G. Townsend | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 2,654 | (3) | |
$ | 5,401 | (3) |
| |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 7,516 | (4) | |
| 8,080 | (4) |
| |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 12,439 | (5) | |
| 3,172 | (5) |
Total | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 22,609 | | |
$ | 16,653 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Rick C. Jackson | |
| 55,910 (2) | | |
$ | 14.43 | | |
| 01/26/2025 | | |
| --- | | |
| --- | | |
| 1,919 | (3) | |
$ | 3,905 | (3) |
| |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 5,435 | (4) | |
| 5,843 | (4) |
| |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 9,147 | (5) | |
| 2,333 | (5) |
Total | |
| 55,910 | | |
| | | |
| | | |
| | | |
| | | |
| 16,501 | | |
$ | 12,081 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Robert D. Kobbeman | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 2,151 | (3) | |
$ | 4,377 | (3) |
| |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 6,092 | (4) | |
| 6,549 | (4) |
| |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| --- | | |
| 10,181 | (5) | |
| 2,596 | (5) |
Total | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 18,424 | | |
$ | 13,522 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
William J. Skrobacz, Jr. | |
| --- | | |
| --- | | |
| --- | | |
| 2,400 | (6) | |
$ | 11,448 | | |
| --- | | |
| --- | |
| |
| --- | | |
| --- | | |
| --- | | |
| 20,500 | (7) | |
| 97,785 | | |
| --- | | |
| --- | |
Total | |
| --- | | |
| --- | | |
| --- | | |
| 22,900 | | |
$ | 109,233 | | |
| --- | | |
| --- | |
| (1) | Represents unexercised option having the following vesting schedule: 25,029 shares on each of January 10, 2013, 2014, 2015 and
2016. |
| (2) | Represents unexercised option having the following vesting schedule: approximately 11,182 shares on each of January 26, 2010,
2011, 2012, 2013 and 2014. |
| (3) | Represents phantom stock award under Company’s DIBP as a result of deferring the named executive officer’s annual bonus
for fiscal year 2020 under the Company’s STPP. The number of phantom stock units was determined by the portion of the bonus deferred
plus the Company’s 50% match thereon, divided by the Company’s stock price on December 31, 2020. The phantom stock award
will be paid in cash by the second business day following the regularly scheduled board meeting in January 2024, in an amount equal
to the appreciation, if any, in the Company’s stock price from December 31, 2020 to December 31, 2023, plus the amount
of dividend equivalents credited during that period. The payout value shown in the far-right column represents the stock price appreciation
from December 31, 2020 through September 30, 2023, plus the amount of dividend equivalents credited during that period. See
“Non-Qualified Deferred Compensation” below. |
| (4) | Represents phantom stock award under Company’s DIBP as a result of deferring the named executive officer’s annual bonus
for fiscal year 2021 under the Company’s STPP. The number of phantom stock units was determined by the portion of the bonus deferred
plus the Company’s 50% match thereon, divided by the Company’s stock price on December 31, 2021. The phantom stock award
will be paid in cash by the second business day following the regularly scheduled board meeting in January 2025, in an amount equal
to the appreciation, if any, in the Company’s stock price from December 31, 2021 to December 31, 2024, plus the amount
of dividend equivalents credited during that period. The payout value shown in the far-right column represents the stock price appreciation
from December 31, 2021 through September 30, 2023, plus the amount of dividend equivalents credited during that period. See
“Non-Qualified Deferred Compensation” below. |
| (5) | Represents phantom stock award under Company’s DIBP as a result of deferring the named executive officer’s annual bonus
for fiscal year 2022 under the Company’s STPP. The number of phantom stock units was determined by the portion of the bonus deferred
plus the Company’s 50% match thereon, divided by the Company’s stock price on December 31, 2022. The phantom stock award
will be paid in cash by the second business day following the regularly scheduled board meeting in January 2026, in an amount equal
to the appreciation, if any, in the Company’s stock price from December 31, 2022 to December 31, 2025, plus the amount
of dividend equivalents credited during that period. The payout value shown in the far-right column represents the stock price appreciation
from December 31, 2022 through September 30, 2023, plus the amount of dividend equivalents credited during that period. See
“Non-Qualified Deferred Compensation” below. |
| (6) | Represents unvested portion of restricted stock award on January 24, 2023, with the following vesting schedule: 600 shares on
each of July 22, 2023, 2024, 2025, 2026 and 2027. |
| (7) | Represents unvested portion of restricted stock award on July 25, 2023, with the following vesting schedule: 5,125 shares on
each of January 30, 2024, 2025, 2026 and 2027. |
Option Exercises and Stock Vested
The following table sets forth information about
stock options exercised and shares of restricted stock that vested during the fiscal year ended September 30, 2023 with respect to
each named executive officer:
| |
Option Awards | | |
Stock Awards | |
Name | |
Number of Shares Acquired on Exercise (#) | | |
Value Realized on Exercise ($)(1) | | |
Number of Shares Acquired on Vesting (#) | | |
Value Realized on Vesting ($) | |
John B. Dicus | |
| --- | | |
| --- | | |
| --- | | |
| --- | |
Kent G. Townsend | |
| --- | | |
| --- | | |
| --- | | |
| --- | |
Rick C. Jackson | |
| --- | | |
| --- | | |
| --- | | |
| --- | |
Robert D. Kobbeman | |
| --- | | |
| --- | | |
| 7,825 | | |
$ | 62,600 | |
William J. Skrobacz, Jr. | |
| --- | | |
| --- | | |
| 600 | | |
$ | 3,864 | |
| (1) | Represents amount realized upon exercise of stock options, based on the difference between the market value of the shares acquired
at the time of exercise and the exercise price. |
Non-Qualified Deferred Compensation
The following table sets forth information about
compensation payable to each named executive officer under the Company’s DIBP.
| |
Executive | | |
Registrant | | |
Aggregate | | |
Aggregate | | |
Aggregate | |
| |
Contributions | | |
Contributions | | |
Earnings | | |
Withdrawals/ | | |
Balance | |
Name | |
in Last FY(1) | | |
in Last FY(2) | | |
in Last FY(3) | | |
Distributions(4) | | |
at Last FYE | |
John B. Dicus | |
$ | 100,000 | | |
$ | 50,000 | | |
$ | 21,015 | | |
$ | 174,579 | | |
$ | 421,757 | |
Kent G. Townsend | |
$ | 71,732 | | |
$ | 35,866 | | |
$ | 10,966 | | |
$ | 65,185 | | |
$ | 242,596 | |
Rick C. Jackson | |
$ | 52,751 | | |
$ | 26,376 | | |
$ | 7,978 | | |
$ | 47,566 | | |
$ | 176,793 | |
Robert D. Kobbeman | |
$ | 58,716 | | |
$ | 29,358 | | |
$ | 8,698 | | |
$ | 43,407 | | |
$ | 197,527 | |
William J. Skrobacz, Jr. | |
$ | --- | | |
$ | --- | | |
$ | --- | | |
$ | --- | | |
$ | --- | |
| (1) | Represents portion of bonus for fiscal year 2022 (otherwise payable in fiscal year 2023) under the STPP deferred by the named executive
officer. This amount was previously reported as compensation for fiscal year 2022 for the named executive officer. |
| (2) | Represents match by Capitol Federal Savings on portion of bonus for fiscal year 2022 (otherwise payable in fiscal year 2023) under
the STPP deferred by the named executive officer. The match by Capitol Federal Savings was 50% of the amount deferred, which was previously
reported as compensation for fiscal year 2022 for the named executive officer. The named executive officer was awarded phantom stock units
under the DIBP in an amount equal to the bonus amount deferred plus the match, divided by the closing price of the Company’s common
stock on December 31, 2022. |
| (3) | Represents stock price appreciation (depreciation) and dividend equivalents on phantom stock units from deferrals (and matches thereon)
of STPP bonuses for fiscal year 2022 and prior years. This amount is reported as compensation for fiscal year 2023 under the "All
Other Compensation" column of the Summary Compensation Table. As noted below, there will not be any reduction to the payout
amount of the phantom stock units if the stock price has depreciated from the beginning of the deemed investment period of the phantom
stock units to the end of such period. |
| (4) | Represents cash payout during fiscal year 2023 of phantom stock units for deferral (and 50% match thereon) of the STPP bonus for fiscal
year 2019. The payout was comprised of appreciation in the Company’s stock price from December 31, 2019 through December 31,
2022 plus dividend equivalents credited during that period. |
Under
the DIBP, a participating NEO may defer from $2,000 to as much as 50% (up to a maximum of $100,000) of their award under the STPP, which
is typically made in the January following the end of the fiscal year for which the STPP award is earned. The total amount deferred
plus a 50% match by Capitol Federal Savings is deemed to be invested, in the form of phantom stock units, in Company common stock as of
December 31st in the year prior to the STPP award at the closing price on that date (e.g., December 31, 2022,
in the case of the STPP award for fiscal year 2022, which was paid in January 2023). On the third anniversary date (e.g., December 31,
2025, in the case of the award for fiscal year 2022), the phantom stock units are deemed sold and each participant will receive shortly
thereafter a cash payment equal to the amount deferred, the company match, the dividend equivalents paid on Company common stock during
the three-year period, plus the appreciation, if any, of Company common stock. There will not be any reduction to the amount of the cash
payment if the deemed investment in Company common stock has depreciated in value from the beginning of the deemed investment period to
the end of such period. The payment of these benefits (except for the amount deferred) is subject to the participant’s continued
employment by the Bank during the mandatory deferral period and on the distribution date.
As discussed under “Compensation Discussion
and Analysis—Bonus Incentive Plans,” no STPP award was earned for fiscal year 2023.
Payments upon Termination or Change in Control
As discussed under “ Change in Control Severance
Agreements,” the Company has entered into change in control severance agreements with each of the NEOs. Each agreement entitles
the executive to a severance payment if, within six months before or 24 months after a change in control of the Company, the executive’s
employment is terminated by the Company without cause, is terminated as a result of the executive’s death, disability or retirement
or is terminated by the executive for “good reason.”
The
amount of the severance payment under each change in control severance agreement is 2.99 times the executive’s average annual W-2
compensation during the five full calendar years prior to the date of termination of employment. If their employment had been
terminated as of September 30, 2023 under circumstances entitling them to severance payments under their change in control severance
agreements, the amounts of the payments to Messrs. Dicus, Townsend, Jackson, Kobbeman and Skrobacz would have been approximately
$3.2 million, $1.4 million, $1.0 million, $1.2 million and $530 thousand, respectively. The agreements provide that severance and other
payments that are subject to a change in control will be reduced as much as necessary to ensure that no amounts payable to the executive
will be considered excess parachute payments under Section 280G of the Internal Revenue Code.
Under
the general terms of stock options granted under the Company’s 2012 Equity Incentive Plan and 2000 Stock Option and Incentive Plan
and restricted stock granted under the Company’s 2012 Equity Incentive Plan, upon the occurrence of a change in control of the Company,
all unvested stock options and unvested shares of restricted stock will vest. As of September 30, 2023, none of the NEOs held
unvested stock options and Mr. Skrobacz was the only NEO who held unvested shares of restricted stock, holding 22,900 unvested shares
as of that date. If a change in control of the Company had occurred on September 30, 2023, the aggregate value that would have been
realized by Mr. Skrobacz as a result of the acceleration of the vesting of his unvested shares of restricted stock, based on the
closing price of the Company's common stock on that date of $4.77, was $109,233.
The
Company’s STPP provides that if, within two years following a change in control of the Company, a participant’s employment
is terminated other than due to death, disability, retirement, cause or resignation by the participant (other than resignation due to
reassignment to a job that is not reasonably equivalent in responsibility or compensation, or that is not in the same geographic area,
or resignation within 30 days following a reduction in base pay), then the participant will be paid a pro rata award for the performance
year in which his or her termination of employment occurs, with the award amount determined assuming all individual and corporate performance
targets have been met. Had any of Messrs. Dicus, Townsend, Jackson, Kobbeman or Skrobacz experienced such a termination of
employment on September 30, 2023, they would have been entitled to the regular bonus earned for the year, rather than a pro rata
award with assumed maximum achievement of performance targets, since the performance period for the year actually ended on that date.
As discussed under “Compensation Discussion and Analysis—Bonus Incentive Plans,” none of the NEOs earned a bonus for
fiscal year 2023 under the STPP.
The
Company’s DIBP provides that if, within two years following a change in control of the Company, a participant’s employment
is terminated other than due to death, disability, retirement, cause or resignation by the participant (other than resignation due to
reassignment to a job that is not reasonably equivalent in responsibility or compensation, or that is not in the same geographic area,
or resignation within 30 days following a reduction in base pay), then the participant will become fully vested in his or her plan
account, which shall be paid to him or her within 90 days after the termination date. If Messrs. Dicus, Townsend, Jackson, Kobbeman
or Skrobacz had experienced such a termination of employment on September 30, 2023, the amounts of their DIBP accounts that would
have vested and been payable within 90 days would have been $421,757, $242,596, $176,793, $197,527 and $0, respectively.
As
discussed under “Compensation Discussion and Analysis—Retirement and Other Benefits,” the Company provides a
life insurance benefit for every employee who works on average more than 20 hours per week equal to 1.0 times the employee’s base
salary, subject to a cap on the total death benefit of $500,000 in the case of Mr. Dicus, $389,000 in the case of Mr. Townsend,
$300,000 in the case of Mr. Jackson, $300,000 in the case of Mr. Kobbeman and $235,000 in the case of Mr. Skrobacz. Each
of the NEOs participates in this benefit program. Had Messrs. Dicus, Townsend, Jackson, Kobbeman or Skrobacz died on September 30,
2023, the death benefit payable under this program would have been $500,000, $389,000, $300,000, $300,000 and $235,000 respectively.
As also discussed under “Compensation Discussion
and Analysis—Retirement and Other Benefits,” the Company has purchased a life insurance annuity for Mr. Dicus, which
includes a $5.0 million death benefit. Accordingly, had Mr. Dicus died on September 30, 2023, a death benefit would have been
payable for him in this amount.
In
addition, as discussed under “Compensation Discussion and Analysis—Retirement and Other Benefits,” the Bank has purchased
Bank Owned Life Insurance. Under the terms of the Bank Owned Life Insurance, each insured employee was provided the opportunity to designate
a beneficiary to receive a death benefit equal to the insured employee’s base salary as of the date of Board approval of the purchase
if the insured dies while employed by the Bank. All NEOs other than Messrs. Kobbeman and Skrobacz are covered under Bank Owned
Life Insurance purchased by the Bank and have designated beneficiaries. Had Messrs. Dicus, Townsend or Jackson died on September 30,
2023, the death benefit payable under the Bank Owned Life Insurance to their beneficiaries would have been $610,481, $330,000 and $235,000,
respectively.
Compensation Committee Report
The Compensation Committee has reviewed and discussed
the Compensation Discussion and Analysis contained above with management and, based on such review and discussion, the Compensation Committee
recommended to the Company’s Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
The foregoing report is furnished by the Compensation
Committee of the Company’s Board of Directors:
James
G. Morris (Chair)
Michel’ Philipp Cole
Morris J. Huey, II
Jeffrey M. Johnson
Michael T. McCoy, M.D.
Carlton A. Ricketts
Jeffrey R. Thompson
CEO
Pay Ratio
For
fiscal year 2023, the annual total compensation for our median employee was $37,841 and the annual total compensation for our CEO
was $862,031. The resulting ratio of our CEO’s pay to the pay of our median employee for fiscal year 2023 was 22.78 to 1.
We
identified the median employee by examining total W-2, Box 1 compensation for all individuals, excluding our CEO, who were employed by
us on September 30, 2023. We included all employees, whether employed on a full-time, part-time or seasonal basis. We did
not make any cost-of-living adjustments in identifying the median employee. We did not adjust employee compensation with respect to total
compensation by annualizing the compensation for any full-time or part-time employees that were not employed by us for all of fiscal year
2023. We are using a new median employee for fiscal year 2023 because we had staffing changes during fiscal year 2023 that we believe
would result in a significant change in our pay ratio disclosure.
We
calculated the median employee’s annual total compensation using the same methodology we use for our named executive officers as
set forth in the fiscal year 2023 Summary Compensation Table in this proxy statement.
Pay Versus Performance
As
required by the Dodd-Frank Act and the SEC’s implementing rules, we are providing the following information about the relationship
between executive compensation actually paid (“CAP”) and certain measures of financial performance. CAP is calculated
in accordance with SEC rules and does not reflect the actual amount of compensation earned or paid during the applicable year. For
further information concerning the Company’s compensation philosophy and how the Company seeks to align executive compensation with
its performance, see the “Compensation Discussion and Analysis” section above.
The
following table sets forth, for each of the fiscal years ended September 30, 2023, 2022, 2021, 2020 and 2019, the total compensation,
as reported in the “Summary Compensation Table” (“SCT”), of our principal executive officer (“PEO”)
and, on average, of our NEOs other than the PEO (the “Non-PEO NEOs”), as well as the CAP to our PEO and average CAP
to the Non-PEO NEOs. The table also provides information on our total stockholder return (“TSR”) and the TSR of our selected
peer group, our net income, and our basic earnings per share (“EPS”), which represents our company-selected measure per SEC
rules.
| | | | | | | | | | | | | | | Year-end value of $100 invested on 09/30/18 | | | | | | | |
Fiscal Year | | | SCT Total for PEO(1) | | | CAP to PEO(2) | | | Average SCT Total for Non- PEO NEOs(1) | | | Average CAP to Non-PEO NEOs(2) | | | CFFN TSR(3) | | | Peer TSR(4) | | | Net Income (loss) (in millions)(5) | | | EPS(6) | |
2023 | | | $ | 862,031 | | | $ | 862,031 | | | $ | 367,967 | | | $ | 355,507 | | | $ | 53.25 | | | $ | 99.73 | | | $ | (101.7 | ) | | $ | (0.76 | ) |
2022 | | | | 1,284,006 | | | | 1,284,006 | | | | 488,523 | | | | 483,535 | | | | 85.20 | | | | 102.95 | | | | 84.5 | | | | 0.62 | |
2021 | | | | 1,187,578 | | | | 1,187,578 | | | | 452,315 | | | | 464,816 | | | | 109.88 | | | | 134.01 | | | | 76.1 | | | | 0.56 | |
2020 | | | | 950,448 | | | | 950,448 | | | | 368,794 | | | | 343,636 | | | | 82.57 | | | | 73.65 | | | | 64.5 | | | | 0.47 | |
2019 | | | | 1,090,821 | | | | 1,090,821 | | | | 532,078 | | | | 531,922 | | | | 116.58 | | | | 100.32 | | | | 94.2 | | | | 0.68 | |
(1) | Mr. Dicus served as our PEO for all fiscal years shown. The Non-PEO NEOs for fiscal year 2023 include Messrs. Townsend, Jackson, Kobbeman and Skrobacz. The Non-PEO NEOs for fiscal years 2022, 2021, 2020 and 2019 include Messrs. Townsend, Jackson and Kobbeman and Natalie G. Haag. The dollar amounts reported are total compensation in the SCT for the PEO and the average for the Non-PEO NEOs for each covered year. |
(2) | These dollar amounts do not reflect actual amounts of compensation paid during the covered year, but reflect adjustments for (i) the year-end fair values of unvested equity awards granted in the covered year, (ii) the year-over-year difference of year-end fair values for unvested awards granted in prior years, (iii) the fair values at vest date for awards granted and vested in the covered year, (iv) the difference between prior year-end fair values and vest date fair values for awards granted in prior years that vested at the end of or during the covered year and (v) the fair value at the end of the prior year of any awards granted in a prior year that failed to meet the applicable vesting conditions (i.e., were forfeited) during the covered year. |
(3) | Reflects the cumulative TSR of the Company (“CFFN”) over the five-year period ended September 30, 2023, based on a theoretical $100 invested on the last day of fiscal year 2018 and valued as of the last trading day of fiscal years 2019, 2020, 2021, 2022 and 2023. These calculated values were obtained from S&P Global Market Intelligence. |
(4) | Reflects the five-year cumulative TSR of the S&P US BMI Bank Index, calculated in the same manner and using the same source as the CFFN TSR. This is the same peer group used by the Company in the stockholder return performance graph in its Annual Report on Form 10-K for the fiscal year ended September 30, 2023. |
(5) | Represents
our reported net income (loss) reflected in the Company’s audited financial statements for each fiscal year indicated. |
(6) | Represents our reported basic earnings (loss) per share reflected in the Company’s audited financial statements for each fiscal year indicated. |
Calculation of Compensation Actually Paid (“CAP”)
To calculate the CAP for our PEO and the average
CAP for our Non-PEO NEOs in the table above, the following adjustments were made to total compensation as reported in the SCT for each
covered fiscal year.
| | 2023 | | | 2022 | | | 2021 | | | 2020 | | | 2019 | |
| | PEO | | | Non-PEO NEOs | | | PEO | | | Non-PEO NEOs | | | PEO | | | Non-PEO NEOs | | | PEO | | | Non-PEO NEOs | | | PEO | | | Non-PEO NEOs | |
Total compensation from SCT | | $ | 862,031 | | | $ | 367,967 | | | $ | 1,284,006 | | | $ | 488,523 | | | $ | 1,187,578 | | | $ | 452,315 | | | $ | 950,448 | | | $ | 368,794 | | | $ | 1,090,821 | | | $ | 532,078 | |
Adjustments for equity awards: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Grant date fair values in the SCT | | | --- | | | | (40,147 | ) | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | (107,985 | ) |
Year-end fair value of unvested awards granted in covered year | | | --- | | | | 27,308 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | 107,829 | |
Year-over-year difference of year-end fair values of unvested awards granted in prior years | | | --- | | | | --- | | | | --- | | | | (6,240 | ) | | | --- | | | | 8,686 | | | | --- | | | | (26,468 | ) | | | --- | | | | --- | |
Vest date fair values of awards granted and vested in covered year | | | --- | | | | 966 | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | |
Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years that vested at end of or during covered year | | | --- | | | | (587 | ) | | | --- | | | | 1,252 | | | | --- | | | | 3,815 | | | | --- | | | | 1,310 | | | | --- | | | | --- | |
Forfeitures during covered year equal to prior year end fair value of awards granted in prior years | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | | | | --- | |
CAP (as calculated) | | $ | 862,031 | | | $ | 355,507 | | | $ | 1,284,006 | | | $ | 483,535 | | | $ | 1,187,578 | | | $ | 464,816 | | | $ | 950,448 | | | $ | 343,636 | | | $ | 1,090,821 | | | $ | 531,922 | |
Performance Measures
As
required by SEC rules, the following have been identified as the three most important financial performance measures used by our Board’s
Compensation Committee to link CAP to our fiscal year 2023 NEOs to Company performance. The company-selected measure is denoted
with an asterisk.
| ● | basic earnings per share* |
| ● | return on average equity |
Pay Versus Performance Graphs
In accordance with SEC rules, we have prepared
the graphs below, which overlay the following performance results with CAP:
| ● | Company TSR versus CAP to the PEO and average CAP to the Non-PEO NEOs for each covered year. |
| ● | Company net income versus CAP to the PEO and average CAP to the Non-PEO NEOs for each covered year. |
| ● | Company basic earnings per share CAP to the PEO and average CAP to the Non-PEO NEOs for each covered year. |
| ● | Company TSR versus peer group TSR for each covered year. |
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of
the Securities Exchange Act of 1934, as amended, requires the Company’s directors, certain of its officers, and persons who
beneficially own more than 10% of the Company’s common stock to report their initial ownership of the Company’s common stock
and any subsequent changes in that ownership to the SEC. Specific due dates for these reports have been established by the SEC, and the
Company is required to disclose in this proxy statement any late filings or known failures to file.
The
Company believes that, based solely on a review of such reports filed with the SEC and written representations that no other reports
were required during the fiscal year ended September 30, 2023, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with during fiscal year 2023, other than the inadvertent failure
to timely file a Form 4 to report one transaction by officer William J. Skrobacz, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The
Company’s compensation plans and matters are administered by the Stock Benefit Committee and the Compensation Committee. The Stock
Benefit Committee is currently comprised of Directors McCoy (Chair), Cole, Huey, Johnson, Morris, Ricketts and Thompson. The Compensation
Committee is currently comprised of Directors Morris (Chair), Cole, Huey, Johnson, McCoy, Ricketts and Thompson. Directors Huey and Ricketts
are former officers of the Company.
CERTAIN TRANSACTIONS
The charter of the Audit Committee of the Company’s
Board of Directors provides that the Audit Committee is to review and approve all related party transactions (defined as transactions
requiring disclosure under Item 404 of SEC Regulation S-K) on a regular basis.
Capitol Federal Savings has followed a policy of
granting loans to officers and directors. These loans are made in the ordinary course of business and on the same terms and conditions
as those of comparable transactions with the general public prevailing at the time, in accordance with our underwriting guidelines, and
do not involve more than the normal risk of collectability or present other unfavorable features.
All
loans that Capitol Federal Savings makes to directors and executive officers are subject to regulations of the Office of the Comptroller
of the Currency restricting loans and other transactions with affiliated persons of Capitol Federal Savings. Loans to all directors and
executive officers and their related persons totaled approximately $2.4 million at September 30, 2023, which was approximately
0.23% of our consolidated equity at that date. All loans to directors and executive officers were performing in accordance with their
terms at September 30, 2023.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS
The information contained in this report shall
not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated
by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
except to the extent that the Company specifically incorporates it by reference in such filing.
The
Audit Committee has reviewed and discussed the audited financial statements of the Company for the fiscal year ended September 30,
2023 with management. The Audit Committee has discussed with Deloitte & Touche LLP, the Company’s independent auditors,
the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”)
and the SEC.
The
Audit Committee has also received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements
of the PCAOB regarding Deloitte & Touche LLP’s communications with the Audit Committee concerning independence,
and discussed with Deloitte & Touche LLP their independence.
Based on the Audit Committee’s review and
discussions noted above, the Audit Committee recommended to the Company’s Board of Directors that the Company’s audited financial
statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023, for filing
with the SEC.
The foregoing report is furnished by the Audit
Committee of the Company’s Board of Directors.
Jeffrey R. Thompson (Chair)
Michel’ Philipp Cole
Jeffrey M. Johnson
Morris J. Huey, II
Michael T. McCoy
James G. Morris
Carlton A. Ricketts
PROPOSAL II
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under
the Dodd-Frank Act, we are including in this proxy statement and will present at the annual meeting a non-binding stockholder vote to
approve the compensation of our executives, as described in the proxy statement pursuant to the compensation disclosure rules of
the SEC. This proposal, commonly known as a “say-on-pay” vote, gives stockholders the opportunity to endorse or not
endorse the compensation of the Company’s executives as disclosed in this proxy statement. This proposal will be presented at the
annual meeting as a resolution in substantially the following form:
RESOLVED, that the compensation paid to the Company’s
named executive officers, as disclosed in the Company’s proxy statement for the annual meeting pursuant to Item 402 of Regulation
S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.
This vote will not be binding on the Company’s
Board of Directors and may not be construed as overruling a decision by the Board or creating or implying any change to the fiduciary
duties of the Board. Nor will it affect any compensation previously paid or awarded to any executive. The Compensation Committee
and the Board may, however, take into account the outcome of the vote when considering future executive compensation arrangements.
The
Dodd-Frank Act requires that we include a “say-on-pay” vote in our annual meeting proxy statement at least once every
three years, and that at least once every six years we hold a non-binding, advisory vote on the frequency of future say-on-pay votes (commonly
referred to as a “say-on-pay frequency vote”), with stockholders having the choice of every year, every two years or every
three years. We last included a say-on-pay frequency vote at our annual meeting of stockholders held in January 2023, and the most
votes were received for a frequency of every year. Our Board of Directors determined, in light of those results, that we would include
a say-on-pay vote in our annual meeting proxy materials every year until the next required say-on-pay frequency vote is held (in 2029).
The purpose of our compensation programs is to
attract and retain experienced, highly qualified executives critical to our long-term success and enhancement of stockholder value.
The Board of Directors believes that our compensation programs achieve this objective, and therefore recommends that stockholders vote
“FOR” this proposal.
PROPOSAL
III
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
AUDITORS
The
Audit Committee of the Company’s Board of Directors is expected to consider the appointment of Deloitte & Touche
LLP as the Company’s independent auditors for the fiscal year ending September 30, 2024, subject to the ratification of that
appointment by the Company’s stockholders at the annual meeting. A representative of Deloitte & Touche LLP is expected
to attend the annual meeting to respond to appropriate questions and will have an opportunity to make a statement if he or she so desires.
Although not required by the Company’s bylaws
or otherwise, the Audit Committee and the Board of Directors believe it appropriate, as a matter of good corporate governance, to request
that the Company’s stockholders ratify the potential appointment of Deloitte & Touche LLP as the Company’s independent
auditors for the fiscal year ending September 30, 2024. If the stockholders do not ratify the appointment, the Audit Committee may
nevertheless retain Deloitte & Touche LLP or retain another firm without re-submitting the matter to the stockholders. Even if
the stockholders ratify the appointment, the Audit Committee may, in its discretion, direct the appointment of a different independent
registered public accounting firm as the Company’s independent auditors at any time during the year.
For
the fiscal years ended September 30, 2023 and 2022, Deloitte & Touche LLP provided various audit and non-audit services
to the Company. Set forth below are the aggregate fees billed for these services:
| (a) | Audit Fees: Aggregate fees billed for professional services
rendered for the audit of the Company’s annual financial statements, for the audit pursuant to Section 404 of the Sarbanes-Oxley
Act of 2002, for the review of financial statements included in the Company’s Quarterly Reports on Form 10-Q, for statutory
and regulatory audits and for consents: $1,250,000 – 2023; $1,160,000 – 2022. |
| (b) | Audit-Related Fees: Aggregate fees billed for professional
services rendered related to the Company’s digital transformation project and agreed-upon procedures engagements: $150,000 –
2023; $6,000 – 2022. |
| (c) | Tax Fees: Aggregate fees billed for professional services
rendered related to tax return preparation and tax consultations: $107,171 – 2023; $101,250 – 2022. |
| (d) | All other fees: Aggregate fees billed for all other professional
services, consisting of an accounting research tool subscription: $1,895 – 2023; $1,895 – 2022 . |
The Audit Committee generally pre-approves all
audit and permissible non-audit services to be provided by the independent auditors. The Audit Committee has, however, delegated authority
to the chairperson of the Audit Committee to pre-approve services not pre-approved by the Audit Committee, provided such action is reported
to the Audit Committee at its next meeting. None of the services provided by Deloitte & Touche LLP described in items (a)-(d) above
was approved by the Audit Committee pursuant to a waiver of the pre-approval requirements of the SEC’s rules and regulations.
The Board of Directors recommends that stockholders
vote “FOR” the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent
auditors for the fiscal year ending September 30, 2024.
STOCKHOLDER PROPOSALS AND OTHER INFORMATION
REGARDING THE NEXT ANNUAL MEETING OF STOCKHOLDERS
In
order to be eligible for inclusion in the Company’s proxy materials for its next annual meeting of stockholders, any stockholder
proposal to take action at the meeting must be received at the Company’s executive office at 700 S. Kansas Avenue, Topeka, Kansas
66603 no later than August 16, 2024. If, however, the date of the Company’s next annual meeting of stockholders is before December 24,
2024 or after February 22, 2025, any such proposal must be received at the Company’s executive office a reasonable time before
the Company begins to print and send its proxy materials for that meeting to be eligible for inclusion in those proxy materials. All stockholder
proposals submitted for inclusion in the Company’s proxy materials will be subject to the requirements of the proxy rules adopted
under the Securities Exchange Act of 1934, as amended, and, as with any stockholder proposal (regardless of whether included in the Company’s
proxy materials), the Company’s charter and bylaws.
In
addition to the deadline and other requirements referred to above for submitting a stockholder proposal to be included in the Company’s
proxy materials for its next annual meeting of stockholders, the Company’s bylaws require a separate notification to be made in
order for a stockholder proposal to be eligible for presentation at the meeting, regardless of whether the proposal is included in the
Company’s proxy materials for the meeting. In order to be eligible for presentation at the Company’s next annual
meeting of stockholders, written notice of a stockholder proposal containing the information specified in Article I, Section 6(a) of
the Company’s bylaws must be received by the Secretary of the Company not earlier than the close of business on September 25,
2024 and not later than the close of business on October 25, 2024. If, however, the date of the next annual meeting is
before January 3, 2025 or after March 24, 2025, the notice of the stockholder proposal must instead be received by the Company’s
Secretary not earlier than the close of business on the 120th calendar day prior to the date of the next annual meeting and not later
than the close of business on the later of the 90th calendar day before the date of the next annual meeting or the tenth calendar day
following the first to occur of the day on which notice of the date of the next annual meeting is mailed or otherwise transmitted or the
day on which public announcement of the date of the next annual meeting is first made by the Company.
Stockholders
who intend to solicit proxies in support of director nominees other than the Company’s nominees in connection with the Company’s
next annual meeting of stockholders must provide notice to the Company that contains the information required by Rule 14a-19(b) under
the Securities Exchange Act of 1934, as amended, no later than November 24, 2024. If, however, the date of the Company’s
next annual meeting of stockholders is before December 24, 2024 or after February 22, 2025, the notice must be provided by the
later of 60 calendar days prior to the date of the annual meeting or the tenth calendar day following the day on which public announcement
of the date of the annual meeting is first made by the Company. This notice is in addition to the notice required under Article I,
Section 6(b) of the Company’s bylaws for stockholders desiring to submit director nominations, which must contain the
information specified in Article I, Section 6(b) and be received by the Secretary of the Company not less than 90 calendar
days or more than 120 calendar days prior to the date of the Company’s next annual meeting of stockholders. If, however, less than
100 calendar days’ notice or public announcement of the date of the next annual meeting is given or made to stockholders, notice
pursuant to Article I, Section 6(b) must instead be received by the Company’s Secretary by the earlier of the tenth
calendar day following the day on which notice of the date of the next annual meeting is mailed or otherwise transmitted or the day
on which public announcement of the date of the next annual meeting is first made by the Company.
OTHER MATTERS
The Board of Directors is not aware of any business
to come before the annual meeting other than the matters described above in this proxy statement. However, if any other matters should
properly come before the meeting, it is intended that holders of the proxies will act in accordance with their best judgment.
ADDITIONAL INFORMATION
The Company will pay the costs of soliciting proxies.
The Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy materials to the beneficial owners of common stock. In addition to solicitation by mail, directors, officers and employees
of the Company may solicit proxies personally or by facsimile, telephone or other means, without additional compensation.
| 0
------------------ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ----------------
14475
REVOCABLE PROXY
CAPITOL FEDERAL FINANCIAL, INC.
ANNUAL MEETING OF STOCKHOLDERS
January 23, 2024
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the members of the Board of Directors of Capitol Federal
Financial, Inc., and its survivor, with full power of substitution, to act as attorneys and proxies for the
undersigned to vote all shares of common stock of Capitol Federal Financial, Inc. which the
undersigned is entitled to vote at the Annual Meeting of Stockholders, to be held on January 23, 2024
at the Bradbury Thompson Alumni Center on the Washburn University campus, 1701 SW Jewell
Avenue, Topeka, Kansas at 10:00 a.m. local time, and at any and all adjournments or postponements
thereof, as follows:
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL
BE VOTED “FOR” THE ELECTION OF ALL NOMINEES NAMED HEREIN, “FOR” THE ADVISORY VOTE ON
EXECUTIVE COMPENSATION AND "FOR" THE RATIFICATION OF THE APPOINTMENT OF DELOITTE &
TOUCHE LLP. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY
THE BOARD OF DIRECTORS IN ITS BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
(Continued and to be signed on the reverse side)
1.1 |
| Signature of Stockholder Date: Signature of Stockholder Date:
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If the signer is a partnership, please sign in partnership name by authorized person.
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
JOHN SMITH
1234 MAIN STREET
APT. 203
NEW YORK, NY 10038
ANNUAL MEETING OF STOCKHOLDERS OF
CAPITOL FEDERAL FINANCIAL, INC. January 23, 2024
INTERNET - Access “www.voteproxy.com” and follow the on-screen
instructions or scan the QR code with your smartphone. Have your
proxy card available when you access the web page.
TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in
the United States or 1-718-921-8500 from foreign countries from any
touch-tone telephone and follow the instructions. Have your proxy
card available when you call.
Vote online/phone until 11:59 PM EST the day before the meeting.
MAIL - Complete, sign, date and mail your proxy card in the
envelope provided as soon as possible.
IN PERSON - You may vote your shares in person by attending
the Annual Meeting.
PROXY VOTING INSTRUCTIONS
Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. ------------------ ----------------
00033330000000000000 2 012324
COMPANY NUMBER
ACCOUNT NUMBER
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, Proxy Statement and Annual Report to Stockholders
are available at http://www.astproxyportal.com/ast/16796
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES NAMED HEREIN, “FOR” THE ADVISORY VOTE ON EXECUTIVE COMPENSATION
AND "FOR" THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP.
PLEASE COMPLETE, SIGN, DATE AND RETURN IN THE ENCLOSED ENVELOPE, OR VOTE VIA THE INTERNET OR BY TELEPHONE, AS SOON AS POSSIBLE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
I. Election of Directors: (for three-year terms)
Morris J. Huey, II
Carlton A. Ricketts
II. Advisory vote on executive compensation.
III. The ratification of the appointment of Deloitte & Touche LLP
as Capitol Federal Financial, Inc.'s independent auditors for
the fiscal year ending September 30, 2024.
In their discretion, the proxies are authorized to vote on any other business that
may properly come before the meeting or any adjournment or postponement thereof.
The undersigned acknowledges receipt from Capitol Federal Financial, Inc., prior
to the execution of this Proxy, of Notice of the Annual Meeting of Stockholders, a
Proxy Statement and an Annual Report to Stockholders for the fiscal year ended
September 30, 2023.
FOR AGAINST ABSTAIN
FOR AGAINST ABSTAIN
FOR AGAINST ABSTAIN |
DEF 14A
false
0001490906
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