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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 1, 2022
WESTERN ALLIANCE BANCORPORATION
(Exact name of registrant as specified in its charter)
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| Delaware | | 001-32550 | | 88-0365922 |
(State or other jurisdiction
of incorporation) | | (Commission
File Number) | | (IRS Employer
Identification No.) |
One E. Washington Street, Phoenix, Arizona 85004
(Address of principal executive offices) (Zip Code)
(602) 389-3500
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, $0.0001 Par Value | | WAL | | New York Stock Exchange |
Depositary Shares, Each Representing a 1/400th Interest in a Share of 4.250% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A | | WAL PrA | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Kenneth A. Vecchione Letter Agreement
On April 6, 2022, Western Alliance Bancorporation (the “Company”) entered into a letter agreement, dated as of April 6, 2022, with Kenneth A. Vecchione, the President and CEO of the Company and its wholly owned subsidiary Western Alliance Bank (the “Bank”), which amends and restates Mr. Vecchione’s previously disclosed offer letter with the Company and pursuant to which Mr. Vecchione will remain the President and Chief Executive Officer of the Company and the Bank (the “Letter Agreement”).
Pursuant to the Letter Agreement, Mr. Vecchione will be paid an annual base salary of $1,300,000 for 2022 and an annual base salary of $1,400,000 and $1,500,000 for 2023 and 2024, respectively. Mr. Vecchione will be eligible for an annual cash award pursuant to the Company’s Annual Bonus Plan based on the Company’s annual performance relative to pre-established targets that are subject to the Compensation Committee’s review and approval. Mr. Vecchione’s target bonus will be 150% of his annual base salary.
Under the Company’s Long Term Incentive Plan, for 2022, 2023 and 2024, Mr. Vecchione will receive annual grants of performance-based stock units and performance-based restricted stock equal to a fair value on the grant date of $3,250,000, $3,500,000 and $3,750,000, respectively, with the allocation between stock units and restricted stock, the applicable performance criteria and the actual amount earned, if any, with respect to each performance year to be determined by the Compensation Committee. In addition, in 2022 only Mr. Vecchione will receive a one-time award of shares of performance-based restricted stock with a grant date fair value of $3,250,000, with a vesting schedule and subject to performance criteria to be determined by the Compensation Committee.
Mr. Vecchione will participate in the Company’s Severance and Change in Control Plan, be eligible to participate in benefit plans available to the Company’s employees and senior executives generally and be subject to the Company’s compensation recovery policy as amended from time to time.
The summary of the Letter Agreement set forth under this Item 5.02 is qualified in its entirety by reference to the complete terms and conditions of the Letter Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference into this Item 5.02.
Retirement of Executive Chairman and Director; Appointment of Chairman
On April 1, 2022, Robert Sarver notified the Board of Directors of his decision to retire from his position of Executive Chairman of the Company and as a director of the Company and Western Alliance Bank (the “Bank”), both effective as of the date of the Company’s 2022 annual meeting of stockholders, which is scheduled to be held on June 14, 2022. On April 4, 2022, Steven Hilton also notified the Board of Directors of the Company of his decision to retire as a director of the Company and the Bank effective as of the date of the Company’s 2022 annual meeting of stockholders. The retirements of Mr. Sarver and Mr. Hilton are not due to any disagreement with the Company or the Bank.
On April 6, 2022, the Board of Directors of the Company and the Bank each appointed Bruce Beach, currently the Lead Independent Director, as Chairman of the respective Boards, effective as of the date of the Company’s 2022 annual meeting of stockholders.
On April 7, 2022, the Company issued two press releases related to the matters described in this Item 5.02, copies of which are filed as Exhibits 99.1 and 99.2 hereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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| Exhibit No. | | Description |
| | |
| 10.1 | | |
| | |
| 99.1 | | |
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| 99.2 | | |
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| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | |
| | WESTERN ALLIANCE BANCORPORATION |
| (Registrant) |
| | |
| | |
| /s/ Dale Gibbons | |
| | |
| Dale Gibbons | |
| Executive Vice President and |
| Chief Financial Officer |
| | |
| | |
| | |
| Date: | April 7, 2022 | |
Robert Latta
Compensation Committee Chairman
rlatta@wsgr.com
April 6, 2022
Kenneth A. Vecchione
Subject: Terms of Employment
Dear Ken:
This letter amends and restates your May 1, 2017 offer letter with Western Alliance Bank (“WAB”) and Western Alliance Bancorporation (“WAL”) (collectively WAB and WAL are the “Company”) and provides the terms of your continued employment in the position of CEO of the Company (the “Letter Agreement”).
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| Effective Date: | | The terms of this Letter Agreement will be deemed effective as of January 1, 2022 (“Effective Date”), with any make-whole compensation or benefit adjustments occurring in the next regularly scheduled payroll or as soon as reasonably practical thereafter. |
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| Position/Duties: | | You will continue to serve as Chief Executive Officer (“CEO”) of the Company, reporting to WAL’s Board of Directors (the “Board”), until you or the Company terminate your employment. You will continue to serve as a member of the Board of both WAL and WAB. As CEO of the Company, you will have such duties and responsibilities as are commensurate with such position at similarly-situated companies and such additional duties as may be assigned by the Board of both WAL and WAB. |
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Principal Place of Employment: | | Subject to reasonable travel, you will perform your duties on behalf of the Company at its offices in Phoenix, Arizona. |
______________________________________
1 The Company does not pay directors who are also employees of the Company additional compensation for their service as directors.
_______________________________________________________________________
One East Washington Street, Suite 1400 Phoenix, AZ 85004
Kenneth A. Vecchione
April 6, 2022
Page 2 of 5
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| Base Salary: | | Beginning as of the Effective Date and subject to your continued employment, you will receive an annual base salary of $1,300,000, paid on the Company’s regular payroll schedule and subject to all applicable withholding. Subject to your continued employment, your annual base salary will increase to the below amounts as follows:
January 1, 2023: $1,400,000 January 1, 2024: $1,500,000 |
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| Annual Bonus: | | For each of the fiscal years 2022 through 2024 and subject to your continued employment, you will be eligible to participate in the WAL Annual Bonus Plan and eligible to receive an annual cash award (“Annual Bonus”) based on the Company’s actual performance relative to pre-established targets. Your target Annual Bonus opportunity will be 150% of your then-current annual base salary. The performance criteria required to be satisfied to earn such Annual Bonus, and the actual amount earned (if any) with respect to each such fiscal year, will be as determined in the sole discretion of the Compensation Committee of the WAL Board (the “WAL Compensation Committee”). |
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| Long Term Incentive: | | For each of the fiscal years 2022 through 2024 and subject to your continued employment through the applicable grant date, you will receive annual grants of incentive equity equal to the following total fair value on the date of grant:
2022: $3,250,000 2023: $3,500,000 2024: $3,750,000
The Company expects the form of such incentive equity to be performance-based stock units and restricted stock, with the allocation between stock units and restricted stock, the legal terms of the award agreement, the performance criteria required to be satisfied to earn such award, and the actual amount earned (if applicable) with respect to the performance year(s) being determined by the WAL Compensation Committee in its sole discretion. The legal terms of your award agreements will be at least as favorable as similarly situated executives at WAL. |
Kenneth A. Vecchione
April 6, 2022
Page 3 of 5
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Special One-Time Long Term Incentive: | | In 2022 only and subject to your continued employment through the applicable grant date, you will receive a special one-time grant of performance-based stock units as part of a special retention grant designed by the WAL Compensation Committee for certain executive officers of WAL. The grant date fair value of your special grant will be $3,250,000. The legal terms of the award agreement, the performance criteria required to be satisfied to earn such award, and the actual amount earned (if applicable) with respect to the performance year(s) will be determined by the WAL Compensation Committee it its sole discretion, with the performance criteria and legal terms of the grant being at least as favorable as similarly situated executives at WAL who are included in this retention program. |
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| Auto Allowance: | | Subject to your continued employment, you will continue to be eligible for a monthly auto allowance equal to $1,000/month. |
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Agreement to Revisit Terms of Employment: | | This Letter Agreement is predicated on the assumption that your role as CEO will be managing the Company’s operations in accordance with its current business plans, as expanded over that period by anticipated organic growth. However, if the Company’s operations are materially expanded during the years 2022 through 2024 as the result of one or more acquisitions of, or mergers with, other businesses, resulting in a substantially greater role for you as CEO, then the WAL Compensation Committee will negotiate with you in good faith to increase your compensation package commensurate with your increased responsibilities (informed by market data for the compensation of public company CEOs with similar levels of responsibilities). |
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| At Will Employment: | | You are an at-will employee. Nothing in this Letter Agreement confers any right to continue employment for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or you to terminate your employment at any time for any reason. |
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Severance and Change in Control: | | Any severance payments and benefits owed to you will be determined pursuant to the terms and conditions of the WAL Severance and Change in Control Plan, as amended and restated on July 28, 2021, and your Executive Participation Agreement (the “WAL Severance Plan”). |
Kenneth A. Vecchione
April 6, 2022
Page 4 of 5
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| Benefits: | | Subject to proper documentation and applicable Company policies, you will be reimbursed for ordinary and necessary business expenses. You will be eligible for the same benefits as similarly situated executives (including with respect to vacation and paid time-off policies), and you will be able to participate in any group benefits plan established by the Company for which you are or may be eligible, including medical plans, disability insurance plans, life insurance plans, 401(k), restoration plans, profit sharing or other similar plans. These benefits are governed by the terms and conditions contained in the applicable plans or policies, and they are subject to change or discontinuation at any time in the sole discretion of the Company. You will be covered as an executive officer under the Company’s D&O insurance policy during the course of your employment, and for no less than 5 years following your last day of employment. |
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| Withholding: | | Any amount or benefit payable under this Letter Agreement will be subject to all applicable taxes and withholding and will be paid in accordance with the payment practices of the Company then in effect. |
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Governing Law and Venue: | | The terms of your employment shall be governed by the laws of the State of Arizona for so long as you are an employee of the Company, and thereafter, by the laws of the State in which WAL’s successor in interest has its main office. The jurisdiction and venue for any disputes arising under, or any action brought to enforce, or otherwise relating to, this Letter Agreement will be exclusively in the courts in the State of Arizona, Maricopa County, including the federal courts located therein (should federal jurisdiction exist). |
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| Attorneys’ Fees: | | In any contested action or proceeding arising out of the terms of this Letter Agreement, the successful party shall be entitled to receive reasonable attorneys’ fees from the other party. |
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| Employment Policies: | | You agree to observe and comply with all applicable Company policies and guidelines, including, without limitation, WAL’s Code of Business Conduct and Ethics, Corporate Governance Guidelines, the restrictive covenants under the WAL Severance Plan and Related Party Transactions Policy. |
Kenneth A. Vecchione
April 6, 2022
Page 5 of 5
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| Code Section 409A: | | Notwithstanding anything herein to the contrary, any payment(s) or benefit(s) payable under this Letter Agreement are intended to be exempt from or otherwise comply with Section 409A of the Internal Revenue Code of 1986 and the regulations thereunder (the “Code Section 409A”), including the exceptions for short term deferrals, separation pay arrangements, reimbursements, payments upon a change in control event, and in-kind distributions, and shall be administered, construed and interpreted in accordance with such intent. If any payment(s) or benefit(s) under this Letter Agreement fail to qualify for exemption under Code Section 409A, such payment or benefit shall be paid or provided in accordance with the requirements of Code Section 409A, including any required delay due to your being a “specified employee”. The Company may amend these terms to the minimum extent necessary to satisfy the applicable provisions of Code Section 409A. The Company cannot guarantee that the payments and/or benefits provided hereunder will satisfy all applicable provisions of Code Section 409A. |
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Compensation Recovery Policy: | | Payment(s) and benefits(s) under this Letter Agreement may be subject to any Compensation Recovery Policy established by the Company and amended from time to time. |
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| Complete Agreement: | | This Letter Agreement embodies the complete agreement and understanding among the parties and supersedes and preempts any prior understandings, agreements, or representations by or among the parties, written or oral, which deal with the matters set forth herein. |
If you agree to these terms, please sign where indicated below.
Sincerely,
Robert Latta
AGREED:
Kenneth A. Vecchione
Dated:
Press Release
Western Alliance Bancorporation Board Extends Contract of Chief Executive Officer
CEO Kenneth A. Vecchione signs new three-year deal; Bruce Beach to become Chairman of the Board; Patricia Arvielo receives Board director nomination
PHOENIX -- Western Alliance Bancorporation today announced that its Board of Directors and Chief Executive Office have agreed to a contract extension that will keep Kenneth A. Vecchione as CEO and President of the company through at least 2024. Western Alliance also announced that Bruce Beach will be named Chairman of the company’s Board of the Directors at its June 2022 annual meeting of stockholders. Beach, an accounting industry leader and entrepreneur with nearly 50 years of business and financial management experience, has been the Board’s Lead Independent Director since 2010. Patricia Arvielo has also been nominated as a new director to the Board. Arvielo is the Co-Founder and President of New American Funding, one of the nation’s largest independent mortgage lenders. If elected, Arvielo is expected to serve on the Board’s Risk and Finance & Investment committees.
“I am humbled by the trust the Board continues to show in our leadership team,” said Chief Executive Office and President Kenneth A. Vecchione. “A large part of our success and ability to plan for the long term has been made possible by the stability we have in senior management. Our collaboration with the Board is key to that important continuity. Bruce is the ideal Board Chairman. We trust his judgment, his integrity and his deep commitment to Western Alliance. Bruce played a key role in transforming our bank from a small community institution to a national provider of industry-leading financial services. He knows our company and I have no doubt that he will continue to be a fierce advocate for shareholders and an unwavering partner in our growth plans.”
“I am honored by the trust the Board has placed in me during this important period of growth and innovation for our company,” said Beach. “I’m also thrilled that the Board has chosen to extend the contract of our CEO, and that Patty Arvielo will be joining our company to play a vital role in helping to guide crucial decisions in the years ahead. Ken’s leadership will continue to provide the vision and stability needed to maintain our strong financial performance.”
“Bruce has deep knowledge of this company,” said Donald Snyder, Chair of the Board’s Governance Committee and longtime banking industry leader. “He has an unwavering ethical compass and has helped guide the company through consistent growth during times of historic economic uncertainty. Patty’s mortgage lending experience will immediately strengthen our team as we continue to expand our services to clients across the country. Our CEO, Board directors and I believe strongly in the need to consistently incorporate new members, fresh ideas, and diverse backgrounds into these important roles.”
Patricia Arvielo said, “As a client of the bank since 2014, I have experienced first-hand the customer-centric approach Western Alliance brings to its business clients. As an entrepreneur myself, I am so pleased to have the opportunity to serve on the board of a company that delivers on responsiveness, adds value through highly tailored solutions and expertise, and operates with an innovative mindset. I look forward to joining the board of Western Alliance as it continues to deliver exceptional results for its shareholders.”
In addition to Arvielo’s nomination, Beach said that the company expects to add another new director to the Board later this year.
About Bruce Beach
Bruce Beach is the co-founder of one of the largest locally owned CPA firms in Arizona, BeachFleishman PC, where he served as its Chief Executive Officer and Chairman from 1991-2015 and 1991-2021, respectively. He is a respected business leader in the southwest and a Distinguished Graduate of the University of Arizona Eller College of Management, where he earned his bachelor’s degree in accounting and his Master of Business Administration. Beach is a successful accounting executive with more than 40 years of leadership in the industry. In addition to his experience at BeachFleischman, Beach has served as Western Alliance Bancorporation’s Lead Independent Director on its Board since 2010. Beach also served as Chair of the Audit Committee from May 2009 to March 2017.
About Patricia L. Arvielo
Ms. Arvielo is an award-winning entrepreneur and Co-Founder and President of New American Funding. A first-generation Hispanic, her path to the mortgage industry began at age 16 with a hard-work ethic and an entry-level position at TransUnion Credit. From there, she landed a job at a prominent mortgage company, where she would rise through the ranks and learn the business from the ground up, eventually becoming branch manager and assistant vice president. In 2003, Ms. Arvielo, together with her husband, launched their own mortgage company, New American Funding. In the years since, Ms. Arvielo has helped grow the company into one of the largest independent mortgage lenders in the United States with a servicing portfolio of over 223,000 loans and $58.8 billion. She also oversaw the creation and expansion of the company’s retail lending operation, which grew a small local operation to a national powerhouse with 168 locations and thousands of employees across the country.
About Western Alliance Bancorporation
With more than $50 billion in assets, Western Alliance Bancorporation (NYSE: WAL) is one of the country’s top-performing banking companies. The company is #2 best-performing of the 50 largest public U.S. banks in the S&P Global Market Intelligence listing for 2021, ranks high on the Forbes “America’s Best Banks” list year after year and was named #1 Best Emerging Regional Bank per Bank Director’s 2022 RankingBanking study. Its primary subsidiary, Western Alliance Bank, Member FDIC, helps business clients realize their ambitions with teams of experienced bankers who deliver superior service and a full spectrum of customized loan, deposit and treasury management capabilities, including blockchain-based offerings. Business clients also benefit from a powerful array of specialized financial services that provide strong
expertise and tailored solutions for a wide variety of industries and sectors. Serving clients across the country wherever business happens, Western Alliance Bank operates individual, full-service banking and financial services brands, including AmeriHome Mortgage, and has offices in key markets nationwide.
Media Inquiries: Eric.Phillips@edelman.com
Investor Inquiries: Dale Gibbons 602-952-5476
Press Release
Western Alliance Bancorporation Announces Two Retirements from Board of Directors
Sarver and Hilton have served on the Board since 2002
PHOENIX -- Western Alliance Bancorporation today announced that Robert Sarver and Steve Hilton will be retiring from their respective roles as Executive Chairman and Director of the Board of Directors of the company and its principal subsidiary, Western Alliance Bank. Their Board terms will end at the company’s annual meeting of stockholders in June. Sarver has served as a director on the Board since 2002 and as Executive Chairman since March 2018, while Hilton has served as a director since 2002.
Sarver’s dynamic leadership as the company’s former Chief Executive Officer (2002--March, 2018) was a catalyst for much of Western Alliance’s industry leading growth and strong financial performance over the past two decades. During his tenure, the company grew to more than $50 billion in assets and has been consistently ranked as one of the top performing banks by Forbes, Bank Director Magazine, and S&P Global. In 2016, Sarver received the Distinguished Service Award from the Greater Phoenix Economic Council, and in 2017 he was recognized by International Banker as Banking CEO of the Year.
“It has been an honor to serve as Executive Chairman of Western Alliance Bancorporation. I want to offer my sincere appreciation to our employees, whose hard work and dedication have allowed us to achieve so much during my 20 years at the company," said Robert Sarver. "With the company well positioned for continued success and growth, the time is right for me to begin a new chapter. I will always cherish and be grateful for the experiences I have had and the relationships I have made during my time at Western Alliance. I have the utmost confidence in the executive team and the oversight of our highly experienced and capable Board moving forward.”
Western Alliance Bancorporation Chief Executive Officer and President Kenneth A. Vecchione said, “Robert’s vision and leadership made the remarkable success of Western Alliance possible. Robert was honest, transparent, and led the company with integrity throughout his time as a colleague and as a friend to many of us. In navigating some of the most challenging economic conditions of the last two decades, including the Great Recession, Robert’s stewardship allowed the company to support tens of thousands of customers and employees who rely on us every day. We will miss Robert’s keen insights and decades of experience and we are deeply thankful for his service. Steve’s contributions to our Board included, among other things, valuable real estate insight that helped grow our company in the region and across the United States. We wish him well as he pursues other ventures.”
“Western Alliance would not be in the position it is today without the contributions of Robert Sarver,” said Western Alliance Bancorporation Lead Independent Director Bruce Beach. “Robert’s leadership and relationship with customers, colleagues, regulators and shareholders has driven our success and the growth of our service to communities and clients across the country. There is no doubt in our minds that Robert will continue to contribute to the industry and the communities so important to him and his family. While we will miss Robert’s relentless focus on expansion, innovation, and the customer experience, which has been so important to our success, we remain extraordinarily confident in the company’s leadership team, management, and culture from top to bottom.”
Beach added that Hilton, one of the company’s longest tenured, most active directors, “helped see the company through challenging initial growth phases with keen insight into several industries crucial to Western Alliance’s successful expansion efforts.”
About Western Alliance Bancorporation
With more than $50 billion in assets, Western Alliance Bancorporation (NYSE: WAL) is one of the country’s top-performing banking companies. The company is #2 best-performing of the 50 largest public U.S. banks in the S&P Global Market Intelligence listing for 2021, ranks high on the Forbes “America’s Best Banks” list year after year and was named #1 Best Emerging Regional Bank per Bank Director’s 2022 RankingBanking study. Its primary subsidiary, Western Alliance Bank, Member FDIC, helps business clients realize their ambitions with teams of experienced bankers who deliver superior service and a full spectrum of customized loan, deposit and treasury management capabilities, including blockchain-based offerings. Business clients also benefit from a powerful array of specialized financial services that provide strong expertise and tailored solutions for a wide variety of industries and sectors. Serving clients across the country wherever business happens, Western Alliance Bank operates individual, full-service banking and financial services brands, including AmeriHome Mortgage, and has offices in key markets nationwide.
Media Inquiries: Eric.Phillips@edelman.com
Investor Inquiries: Dale Gibbons 602-952-5476
