Short Hills, New Jersey, is among the richest communities in the U.S. The directors of a local savings and loan get paid accordingly.
Members of Investors Bancorp’s board made an average of $3.85 million in 2015, the company reported in an April proxy statement, eclipsing director pay at every Wall Street firm. Among companies in the Russell 3000 Index, only directors at Regeneron Pharmaceuticals Inc. fared better. Board members at both companies saw their paydays swell thanks to grants of stock and options.
The Investors Bancorp directors received their awards after the firm’s transition from a mutual holding company to one wholly owned by public shareholders in a second-step conversion that raised $2.2 billion of new equity, the bank said. The equity grants vest over five years, the company’s annual report shows.
“There’s no way around it, they’re pretty big numbers,” said Jared Shaw, an analyst who covers the company for Wells Fargo & Co. “It’s a reflection of the value created through that conversion process. I certainly don’t expect to see numbers of this magnitude going forward.”
The bank has about 1,800 employees working at about 140 branches in New York and New Jersey, and had revenue of $635 million in 2015. On Tuesday, it announced it was buying the Bank of Princeton, adding 13 branches, including some in Pennsylvania.
The median compensation for directors of companies in the Russell index is $184,000, according to data compiled by Bloomberg from company filings.
Payouts of stock awards like those granted to the bank’s directors are common among financial institutions that convert to public ownership, said Matt Kelley, an analyst who covers the bank for Piper Jaffray & Co. He described the 2015 grants as “pretty lucrative,” and said he doesn’t expect future grants to be as large.
Domenick Cama, the chief operating officer, serves as a director with Chief Executive Officer Kevin Cummings. The two executives aren’t paid for being on the board. Chairman Robert M. Cashill is a former Investors Bancorp CEO.
Homes in Short Hills, with a population of about 13,000, have a median value in excess of $1 million, more than five times that of the U.S. broadly, according to census data. The median household income of $235,216 is more than four times that of U.S. households.
Compensation Committee