DEF: Kearny Financial Sets 2025 Annual Meeting Agenda

Kearny Financial Corp. announced its 2025 Annual Meeting of Stockholders to be held virtually on October 21, 2025, to vote on director elections, auditor ratification, and executive compensation.

Summary

• The 2025 Annual Meeting of Stockholders will be held virtually on Tuesday, October 21, 2025, at 10:00 a.m., Eastern Time.
• Stockholders will vote on the election of five directors, the ratification of Crowe LLP as the independent registered public accounting firm for the fiscal year ending June 30, 2026, and an advisory, non-binding resolution on executive compensation.
• The Board of Directors unanimously recommends a vote FOR all proposals.
• The record date for stockholders entitled to vote is August 22, 2025, with 64,744,523 shares of common stock outstanding.
• Kearny Financial Corp. reported approximately $7.7 billion in total assets at June 30, 2025.
• The executive compensation program is designed to be competitive, align with stockholder interests, and reward sustained financial performance.
• The 'Say on Pay' vote on October 17, 2024, received 95.65% affirmative support from stockholders.
• For fiscal year 2025, Executive Management Incentive Program payouts were slightly above target at approximately 104% of reduced target opportunities.
• Performance-based restricted stock units granted on January 7, 2022, did not vest for Named Executive Officers (NEOs) as performance metrics were not attained.
• NEOs received long-term equity awards in fiscal year 2025, split 50% performance-based and 50% time-based restricted stock units.

Sentiment

Score: 6

Explanation: The filing is a routine proxy statement for an annual meeting, presenting standard governance and compensation information. While executive incentive payouts were slightly above target and PPNR per share exceeded expectations, the failure of long-term performance-based equity awards to vest due to unmet metrics and a negative net income in the prior fiscal year (FY2024) temper overall enthusiasm. Strong corporate governance practices are a positive, contributing to a moderately positive sentiment.

Positives

• Stockholders demonstrated strong support for the executive compensation program, with a 95.65% affirmative vote in the October 17, 2024 'Say on Pay' resolution, continuing a trend of over 95% approval for the last six years.
• Executive Management Incentive Program payouts for fiscal year 2025 were slightly above target, reaching approximately 104% of the reduced target opportunities.
• The Company's PPNR (Pre-tax, Pre-provision Net Revenue) per share for fiscal year 2025 was $0.53, exceeding the target of $0.51.
• Robust corporate governance practices are highlighted, including the separation of the Board Chair and CEO roles, executive and director stock ownership requirements, a compensation recoupment clawback policy, and an anti-hedging and pledging policy.
• The Board of Directors is composed of individuals with diverse business experiences, backgrounds, skills, and qualifications, with 10 out of 12 directors determined to be independent.

Negatives

• Performance-based restricted stock units granted on January 7, 2022, did not vest for Named Executive Officers (NEOs) because the required performance metrics were not attained, indicating a failure to meet long-term goals set at that time.
• The non-interest expense ratio for fiscal year 2025 was 1.58%, which was worse than the target of 1.55%.
• Net Income for fiscal year 2024 was negative, reported as ($86,667) thousand.

Risks

• The Company's compensation policies and practices are subject to risk assessment to ensure they do not create risks reasonably likely to have a material adverse effect on the Company.
• Executive compensation exceeding $1.0 million per NEO may not be tax-deductible under Section 162(m) of the Internal Revenue Code, potentially increasing the Company's tax burden.
• Broker non-votes and proxies marked 'ABSTAIN' are not counted as votes cast for certain proposals, which could impact the outcome of votes requiring a majority of votes cast.
• Advance notice requirements for stockholder proposals and director nominations could make it more difficult for stockholders to oppose management's nominees or proposals.

Future Outlook

The Company's 2021 Equity Incentive Plan is designed to provide incentives for executives to achieve longer-term financial and strategic growth goals that drive stockholder value creation. The Supplemental Executive Retirement Plan (SERP) was amended to allow benefits to increase from July 1, 2025, indicating potential future benefit accruals for the CEO.

Management Comments

• Craig L. Montanaro, President and Chief Executive Officer, expressed gratitude for stockholders' continued support of Kearny Financial Corp. and its subsidiary, Kearny Bank.
• The Board of Directors unanimously recommends that stockholders vote FOR each of the proposals to be presented at the Annual Meeting, including director nominees, auditor ratification, and the advisory resolution on executive compensation.

Industry Context

Kearny Financial Corp. operates within the small to mid-cap banking sector, as evidenced by its peer group for compensation benchmarking, which consists of 19 publicly-traded commercial banks with assets between $4 billion and $14.5 billion. The Company's Total Shareholder Return (TSR) is compared against the S&P US SmallCap Banks Index, further solidifying its positioning within this segment of the financial services industry.

Comparison to Industry Standards

• The Compensation Committee utilizes a peer group of 19 publicly-traded commercial banks with assets between $4 billion and $14.5 billion for benchmarking executive compensation, including companies such as Amalgamated Financial Corp., OceanFirst Financial Corp., Columbia Financial, Inc., ConnectOne Bancorp, Inc., and Provident Financial Services, Inc.
• Total Shareholder Return (TSR) comparisons are made against the S&P US SmallCap Banks Index, which serves as a global benchmark for the Company's market segment.

Management Changes

Corporate Governance

Related Party Transactions

• Kearny Bank makes loans to its executive officers and directors in the ordinary course of business, on substantially the same terms as those prevailing for comparable transactions with non-related persons, and these loans are approved in advance by the Board of Directors with interested directors abstaining.
• Craig L. Montanaro has 8,748 shares pledged as collateral for a loan, which is unchanged from the prior fiscal year.

Stakeholder Impact

• Shareholders: Have the opportunity to vote on key governance matters, including director elections, auditor ratification, and executive compensation. Their interests are aligned with executive compensation through performance-based incentives and stock ownership guidelines.
• Employees: Participate in the 401(k) Plan and ESOP. Executive officers are subject to specific compensation structures, clawback policies, and anti-hedging/pledging policies.
• Customers: Served by Kearny Bank's 43 retail branch offices across northern and central New Jersey and Brooklyn and Staten Island, New York.
• Management: Executive compensation is tied to company performance, with base salary adjustments and incentive programs. Subject to robust corporate governance policies.
• Auditor (Crowe LLP): Re-appointed as the independent registered public accounting firm for the fiscal year ending June 30, 2026, subject to stockholder ratification.

Next Steps

• Stockholders are invited to attend the virtual Annual Meeting on October 21, 2025, to consider and vote on the election of directors, auditor ratification, and executive compensation.
• The Board of Directors will reconsider the appointment of Crowe LLP if stockholders fail to ratify their appointment.
• The Compensation Committee will consider the outcome of the advisory vote on executive compensation in future compensation decisions.
• Newly appointed NEOs and Directors are required to meet stock ownership guidelines within five years of their appointment, promotion, or election.
• The independent directors will conduct an annual review of the CEO succession plan.
• The Board and its committees will conduct annual self-evaluations.
• Directors will continue to engage in ongoing training and education.

Key Dates

Recommendation

This filing is a routine definitive proxy statement for an annual meeting, primarily covering corporate governance, executive compensation, and auditor re-appointment. While it provides transparency on these matters and includes historical financial performance data, it does not contain new, material financial results, strategic shifts, or forward-looking guidance that would significantly alter the investment thesis. The mixed performance (PPNR beat, expense ratio miss, long-term equity awards not vesting) suggests a stable but not exceptionally strong operational environment. The robust governance practices are a positive, but the lack of new catalysts or significant changes warrants a 'hold' position for existing investors, awaiting more impactful financial results or strategic updates.

Keywords

Kearny Financial Corp, Kearny Bank, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Director Election, Auditor Ratification, Financial Performance, Stockholder Vote, Compensation Committee, Risk Management, Banking, Financial Services, New Jersey, New York