ISBC 2017 Form 10-K & 2018 Proxy Statement

36 This comparative compensation study also includes specific information regarding the cash and stock compensation provided to the non-employee Directors of each of the peer comparator companies. In connection with the Compensation and Benefits Committee’s understanding and utilization of comparative compensation data in the context of its pay-for-performance philosophy, it should be noted that Investors Bancorp’s one-year, three-year and five-year TSR for the period ending December 31, 2016 were 14.66%, 46.85% and 182.11%, respectively, which the Compensation and Benefits Committee regarded as highly competitive and favorable as compared with our selected peer banking companies. For the year ending December 31, 2016, our net income was 98% of the median net income of our seventeen peer banking institutions and our 0.88% return on average assets (“ROAA”) was consistent with the 0.88% median ROAA of those seventeen comparator banks. For the year ending December 31, 2016, our ROE was 6.06% while the median of our seventeen comparator banks was 8.10%. This difference is primarily due to our excess capital position. We continue to manage our capital through a combination of organic growth, stock repurchases and cash dividends. Elements of Executive Compensation for 2017 The Compensation and Benefits Committee used a total compensation approach in establishing our elements of executive compensation, which consist of base salary, annual cash incentive awards, long-term incentive awards (such as stock option and restricted stock awards), a competitive benefits package and limited perquisites. Base Salary Base salary is the primary fixed component of our executive compensation package for our Named Executive Officers. Base salary levels for the Named Executive Officers are evaluated by the Compensation and Benefits Committee on an annual basis. In general, base salaries are reviewed considering the experience and market value of each Named Executive Officer based on the competitive executive salary information furnished to the Compensation and Benefits Committee by GK Partners. Specifically, each Named Executive Officer’s base salary level is determined by his sustained individual performance, leadership, operational effectiveness, tenure in office, experience in the industry and employment market conditions in our geographical area. With a clear recognition of senior management’s demanding operational challenges in leading and managing a fast-growing business enterprise over the past decade, the Compensation and Benefits Committee endeavors to fairly apply its pay-for-performance philosophy with a view towards both the critical decisions and actions taken by the senior management team on a day-to-day basis, as well as the strategies and initiatives regularly implemented by management that have built and sustained our corporate reputation as a successful, stable and trustworthy financial institution. It is important to the Compensation and Benefits Committee not only to administer Named Executive Officer compensation to meet prevailing banking industry levels and standards, but also to ensure that senior management continues to take a hard-working, reasonable and balanced approach to Investors Bancorp’s short-term and long-term condition and performance. For 2017, Base Salary for our Named Executive Officers included a modest increase. There were no changes to Base Salary for 2016 or 2015. The Compensation and Benefits Committee considered Investors Bancorp’s financial performance, and peer group and market-based industry salary data provided by GK Partners, our independent consultant, as well as the individual factors identified above, in approving such base salary increases for 2017. PROXY STATEMENT