Form 4: Consumers Bancorp Grants Performance-Based RSUs to SVP

Consumers Bancorp's SVP, Senior Loan Officer David E. Benavides, was granted 1,006 performance-based Restricted Stock Units.

Summary

• David E. Benavides, SVP, Senior Loan Officer at CONSUMERS BANCORP INC /OH/ (CBKM), was granted 1,006 Restricted Stock Units (RSUs).
• The RSUs are performance-based, with vesting contingent on achievement of identified performance measures for fiscal year 2026.
• The reported amount of 1,006 shares represents the maximum potential payout, with the actual earned amount ranging from 0% to 50% based on performance.
• Vesting occurs in installments: 25% in 2026 (performance-based) and then 25% on June 30, 2027, 2028, and 2029 (time-based), assuming continuous employment.

Sentiment

Score: 7

Explanation: The grant of performance-based Restricted Stock Units is a positive development for executive retention and aligns management's interests with shareholder value. While the performance conditions introduce uncertainty, it's a standard and generally well-regarded compensation mechanism.

Positives

• The grant of Restricted Stock Units aligns the interests of the SVP, Senior Loan Officer, David E. Benavides, with those of shareholders.
• Performance-based vesting incentivizes the executive to achieve specific company goals for fiscal year 2026.

Negatives

• The actual number of shares earned by the reporting person could be as low as 0% of the reported 1,006 shares, depending on performance achievement.
• The time-based vesting is contingent on continuous employment, introducing a risk of forfeiture if employment ceases.

Risks

• Non-achievement of identified performance measures for fiscal year 2026 could result in a lower or zero payout of the performance-based RSUs.
• The reporting person must remain continuously employed on vesting dates (June 30, 2027, 2028, and 2029) to receive the time-based installments.

Future Outlook

The future acquisition of shares by the reporting person is contingent upon the achievement of identified performance measures for fiscal year 2026 and continuous employment through the specified vesting dates in 2027, 2028, and 2029. The final number of shares received could vary significantly based on performance.

Management Comments

• The performance-based RSUs will vest based on achievement of identified performance measures for fiscal year 2026.
• Vesting will occur 25% in 2026 with additional time-based vesting in equal 25% installments on June 30, 2027, 2028, and 2029, assuming continuous employment.
• The reported amount of 1,006 shares represents the maximum payable at maximum performance, with the reporting person potentially earning 0% to 50% of this amount.

Industry Context

The grant of performance-based Restricted Stock Units is a common practice in the financial services industry for executive compensation, aiming to align management incentives with long-term shareholder value creation and retention.

Comparison to Industry Standards

• Performance-based RSU grants are a standard component of executive compensation packages across the banking sector, similar to those offered by regional banks like First Financial Bancorp or Wesbanco, Inc., to incentivize leadership and tie compensation to company performance.
• The combination of performance-based and time-based vesting is a hybrid approach often seen in the industry to balance immediate performance incentives with long-term retention goals.

Stakeholder Impact

• Shareholders: The performance-based nature of the RSUs aims to align the executive's incentives with shareholder returns, potentially leading to improved company performance.
• Employees: The grant serves as a retention tool for a key senior officer, contributing to leadership stability.
• Management: The executive is incentivized to achieve specific performance targets for fiscal year 2026 to maximize their equity compensation.

Next Steps

• Achievement of identified performance measures for fiscal year 2026.
• Vesting of 25% of RSUs in 2026 based on performance.
• Vesting of 25% of RSUs on June 30, 2027, contingent on continuous employment.
• Vesting of 25% of RSUs on June 30, 2028, contingent on continuous employment.
• Vesting of 25% of RSUs on June 30, 2029, contingent on continuous employment.

Key Dates

Keywords

Restricted Stock Units, RSU grant, executive compensation, insider transaction, performance-based vesting, Consumers Bancorp, CBKM, SVP Senior Loan Officer, Form 4