ISBC 2017 Form 10-K & 2018 Proxy Statement

42 Background From 2007 through 2014, Investors Bancorp experienced substantial growth in assets, revenues and profitability based on senior management’s and the Board’s consistent and concerted efforts. With oversight from the Board, the Named Executive Officers successfully executed the Company’s long-term business strategy which resulted in the transformation of Investors Bancorp from a relatively small community-based banking organization into a much larger, nationally-recognized, and financially strong institution. We believe that senior management was particularly successful in achieving the long-term strategic objectives approved by our Board, and in the process, Investors Bancorp has become a substantially larger, stronger and more profitable company. Investors Bancorp’s senior management team successfully completed its Second Step Conversion, raising $2.2 billion of equity that resulted in Investors Bancorp becoming a fully-public company. In light of the Company’s growth and success and its resulting Second Step Conversion and given that no further stock grants were available under the Investors Bancorp 2006 Equity Plan, the Company believed that a new management stock incentive compensation plan was clearly necessary and warranted as an essential element of its overall executive compensation program. The establishment and structure of the 2015 Equity Incentive Plan was in line with prevailing marketplace executive compensation practices, as well as the precedents established by other banking companies both in their initial conversions to public ownership and in their ongoing administration of executive compensation as exchange-listed companies. The Company undertook the following in establishing the 2015 Equity Plan approved by Investors Bancorp stockholders: • Researched comparative financial and compensation data; • Reviewed directly-related marketplace precedents concerning similar equity compensation plans implemented by the Company’s regional competitors at the time of their respective public offerings and conversions from mutual holding companies (MHCs) to exchange-listed companies; • The Board set an overall limit of 14% of the shares sold in the Company’s Second Step Conversion; and • Received relevant data concerning the appropriate percentages and number of shares typically awarded to the Chief Executive Officer and other Named Executive Officers of competing banks at the time of their “second step” public offerings. The stock awards granted upon the approval of the 2015 Equity Plan were made at an important milestone in the Company’s history, namely, its conversion to a fully public company, and were atypical in nature. The Company does not anticipate that any future awards of stock compensation to the Named Executive Officers will be similar to the 2015 grant in size or in potential compensation value. Retention of Key Management Our Compensation and Benefits Committee and Board recognize and reward what is accomplished by our senior management team, but most importantly, the Compensation and Benefits Committee wishes to ensure the retention and continuity of those high-performing key executives (who are individually and collectively responsible for Investors Bancorp’s growth and success) going forward. Vesting Term Stock awards are primarily focused on the future retention and continuity of our key management team. These awards vest over a longer period, generally ranging from 5 to 7 years. We believe that a longer vesting schedule will ensure the strong retention of our key executives in the years ahead. We believe that stock options, whose value are dependent on the performance of Investors Bancorp Inc. stock are a motivational and cost-effective element of our long-term management incentive program, and that they will create a strong mutuality of economic interest with all of our stockholders. PROXY STATEMENT