CVB FINANCIAL CORP

The Compensation Committee believes that CVB Financial Corp.’s executive compensation program is well-designed to support growth in enterprise and shareholder value within the context of maintaining a sound and compliant financial and risk management structure. The following points summarize how the Compensation Committee addressed the key issues and components of our executive compensation program for our 2023 fiscal year:

•

The Company’s overall compensation program for our executive officers has traditionally consisted of four primary components, including (i) a base salary, (ii) metrics-based incentive compensation, (iii) a plan-based discretionary bonus and (iv) equity-based compensation. However, in 2023, the Committee determined that it was in the best interests of the Company to pay each of our NEOs an additional supplemental discretionary bonus after consideration of the Company's absolute and relative performance during this challenging year.

•

Base salary increases were implemented for all our NEOs on January 1, 2023 at moderate but varying levels, reflecting adjustments based on changes in market compensation rates and individual performance levels.

•

Annual incentive payouts for our five NEOs under the Company’s annual CEO Performance Compensation Plan and NEO Performance Compensation Plans (“PCPs”) were keyed to our conventional metrics of net profit after tax, operating expense management, loan and deposit growth and retention, non-interest income, non-interest expense, credit quality and loan delinquency.

o

The net profit after tax measure constituted the most important metric for our five NEOs under their respective PCPs, and the relative weighting of the other measures was allocated to emphasize those areas over which each executive had more direct responsibility.

o

Accordingly, because the Company did not meet minimum targets under several of the metrics-based performance measures, including on the net profit after tax measure, the annual incentive payouts under our CEO and NEO Performance Compensation Plans (“PCPs”) for 2023 were much smaller than in past years, and varied by executive, ranging from 7.5% to 14% of the applicable NEO’s base salary.

page 42

•

Consistent with past years, our 2023 PCPs for our NEOs also included a plan-based discretionary bonus component, based upon a more subjective evaluation of each eligible NEO’s individual performance in their respective areas, which allows for an assessment of each NEO’s individual contributions to CVB Financial Corp. that cannot be captured by looking solely at our financial metrics.

o

Each of Messrs. Nicholson, Farnsworth, Harvey and Wohl could earn up to an additional 20% of their respective base salaries under this separate plan-based component, and each of these executives achieved the top 20% payout level on this component for 2023.

o

In the case of Mr. Brager, this individual component of compensation was instead included as one of the five core factors in comprising 100% of his combined incentive and plan-based bonus award opportunity, rather than as a separate added opportunity. This individual component was set at a range of 10% to 30% of base salary for Mr. Brager, and he received an award of 28% of base salary for 2023 on this included plan-based component of his otherwise metrics-based incentive plan.

•

In addition, for 2023, the Committee decided to pay each of our NEOs a supplemental, discretionary bonus, separate and apart from the incentive-based awards and plan-based discretionary bonuses provided to our NEOs pursuant to their 2023 PCPs.

o

The Committee decided to pay these supplemental discretionary bonuses to our NEOs because the Committee believed that the occurrence of several extraordinary and unpredictable events had an inordinate effect on the cash incentive compensation payable to our NEOs under their PCPs for 2023. These extraordinary events included the pace and severity of the Federal Reserve’s campaign to increase prevailing interest rates, a regional banking crisis triggered by the failure of several large U.S. regional banks, and the resulting action by the FDIC to impose a special Deposit Insurance Fund assessment on all insured U.S. banks with uninsured deposits in excess of $5 billion (including Citizens Business Bank).

o

In deciding to pay these supplemental discretionary bonus amounts, which ranged from 14.5% to 54.5% of the applicable NEO's base salary, the Committee determined, among other things, that our NEOs had played a critical role in preserving the Company’s customer relationships, franchise value and fundamental safety and soundness during a period of exceptional difficulty and potential instability for regional banks, while the Company had nonetheless recorded the second-highest net income in its 49-year history.

o

The Committee also consulted with the Company’s outside compensation consultants and was advised that a significant number of the Company’s peer financial institutions were also considering making adjustments to their incentive-based NEO compensation programs for similar reasons.

•

Despite the payments of supplemental, discretionary bonuses to our NEOs, overall NEO cash incentive and discretionary bonus compensation for 2023 declined substantially, to approximately 65-75% of the comparable levels provided in 2022, because the Committee recognized that certain key financial metrics of importance to the Company’s shareholders were not achieved, regardless of the prevailing circumstances.

•

Long-term equity incentives for our five NEOs continued to be an important component of our overall NEO compensation program in 2023, and these equity awards continued to be granted on an annual basis and split evenly between performance-based restricted stock units (“PRSUs”) and time-based restricted stock units (“RSUs”). The Committee believes the continued inclusion of performance contingent rights to shares measured over a three-year period will serve to significantly enhance the pay-for-performance structure of our NEO compensation program.

•

Mr. Brager’s compensation as our CEO for 2023 conformed to the terms of his 2022 Employment Agreement, the key terms of which are outlined in the section of this proxy statement on “Compensation Arrangements with our President and Chief Executive Officer.”

o

Mr. Brager’s base salary was set at an annualized rate of $825,000, which was increased by the Compensation Committee from its previous level of $800,000, effective January 3, 2023;

o

Mr. Brager earned an aggregate annual cash incentive of $742,875 for 2023 in accordance with the metrics and qualitative criteria specified in his 2023 CEO PCP and including his supplemental discretionary bonus award described above; and

page 43 o

On January 25, 2023, Mr. Brager received a grant of 24,814 time-based restricted stock units and 24,814 performance-based restricted stock units for our 2023 fiscal year (with the performance metrics keyed in equal measure to the Company’s relative return on average tangible common equity and relative return on average assets, calculated over a three-year performance period, as compared to the same two metrics for the group of banks included in the KBW Nasdaq Regional Banking Index).

•

For our 2023 fiscal year, the Compensation Committee continued to utilize CVB Financial Corp.’s 2023 Executive Incentive Plan, which was adopted by the Committee on February 22, 2023. Our 2023 Executive Incentive Plan was included as an exhibit to CVB Financial Corp.’s Form 10-K for 2023, which was filed with the SEC on February 28, 2024. The Committee employed the business criteria and other key terms outlined in our 2023 Executive Incentive Plan in connection with reviewing and approving our CEO Performance Compensation Plan and NEO Performance Compensation Plans for 2023.