FINANCIAL INSTITUTIONS INC
For the period ended May 28, 2025. Filed Apr 14, 2025.
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May 28, 2025 · Filed Apr 14, 2025
Contents
PAY VERSUS PERFORMANCE
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” (as defined by SEC rules) and certain financial performance of the Company. The MD&C Committee did not consider the pay versus performance disclosure when making its incentive compensation decisions. For further information about how we align executive compensation with the Company’s performance, see “Compensation Discussion and Analysis” starting on page 31.
The following table provides information regarding compensation paid to our principal executive officer (“PEO”) and other NEOs along with our Total Shareholder Return (“TSR”), the TSR of the S&P U.S. SmallCap Banks Index (“Peer Group”), our net income, and the Company’s PPNI, which is the most important financial performance measure used by the Company to link compensation paid to the NEOs, for 2024, to Company performance.
| Year | SummaryCompensationTable Total forPEO(1) | CompensationActually Paidto PEO(2) | Average SummaryCompensationTable Totalfor Non-PEONEOs | AverageCompensationActually Paidto Non-PEONEOs(3) | Value of Initial Fixed $100InvestmentBased On:TSR(4) | Peer GroupTSR(4) | Net (Loss) Income($’000) | Company-SelectedMeasure(PPNI(5))($’000) |
|---|---|---|---|---|---|---|---|---|
| 2024 | $1,408,963 | $1,350,492 | $530,950 | $532,453 | $109.51 | $132.44 | $(25,981) | $54,471 |
| 2023 | $1,472,884 | $1,300,579 | $550,383 | $409,868 | $80.80 | $112.03 | $50,264 | $60,440 |
| 2022 | $1,490,677 | $1,352,023 | $591,637 | $546,792 | $86.65 | $111.47 | $56,573 | $66,474 |
| 2021 | $1,490,370 | $1,928,396 | $526,957 | $602,225 | $108.30 | $126.43 | $77,697 | $71,497 |
| 2020 | $1,459,283 | $1,153,554 | $528,013 | $414,981 | $73.99 | $90.82 | $38,332 | $58,551 |
(1)
Martin K. Birmingham, President and Chief Executive Officer, was the PEO for each of the years presented in the table.
(2)
SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine “compensation actually paid” as reported in the Pay Versus Performance Table. “Compensation actually paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. In general, “compensation actually paid” is calculated as Summary Compensation Table total compensation adjusted to include the change in fair value of equity awards as of December 31 of the applicable year or, if earlier, the vesting date (rather than the grant date) and the pension value attributable to the applicable years’ service and any change in pension value attributable to plan amendments made in the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to Mr. Birmingham’s total compensation to determine the compensation actually paid:
| Martin K. Birmingham | |||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | 2021 | 2020 | |
| Total Compensation as reported in Summary Compensation Table (SCT) | $1,408,963 | $1,472,884 | $1,490,677 | $1,490,370 | $1,459,283 |
| Minus pension values reported in SCT | $— | $61,032 | $— | $21,893 | $157,872 |
| Minus fair value of equity awards granted during fiscal year | $362,125 | $355,591 | $373,097 | $364,277 | $320,720 |
| Plus pension value attributable to current year’s service and any change in pension value attributable to plan amendments made in the current year | $14,165 | $11,877 | $45,610 | $49,376 | $41,473 |
| Plus fair value of equity compensation granted in current year—value at end of year-end | $633,892 | $372,537 | $309,664 | $420,015 | $283,680 |
| Plus change in fair value for end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during current fiscal year | $(49,180) | $3,021 | $3,088 | $(3,365) | $(8,031) |
| Plus change in fair value from end of prior fiscal year to end of current fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year | $(295,223) | $(143,117) | $(123,919) | $358,170 | $(144,259) |
| Plus dividends or other earnings paid on stock or options awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year | $— | $— | $— | $— | $— |
| Plus fair value of awards forfeited in current fiscal year determined at end of prior fiscal year | $— | $— | $— | $— | $— |
| Compensation Actually Paid | $1,350,492 | $1,300,579 | $1,352,023 | $1,928,396 | $1,153,554 |
62 Financial Institutions, Inc.
(3)
In 2024, the non-PEO NEOs include W. Jack Plants II, EVP, Chief Financial Officer and Treasurer, Kevin B. Quinn, SVP, Chief Commercial Banking Officer, Samuel J. Burruano, Jr., EVP, Chief Legal Officer and Corporate Secretary, and Laurie R. Collins, SVP, Chief Human Resources Officer; in 2023, the non-PEO NEOs include Messrs. Plants, Quinn, and Burruano and Ms. Collins, and Justin W. Bigham, Former EVP, Chief Community Banking Officer and Sean M. Willett, Former EVP, Chief Administrative Officer; in 2022, the non-PEO NEOs include Messrs. Plants, Bigham, Willett and Quinn; in 2021, the non-PEO NEOs include Messrs. Plants, Bigham, Willett, and Burruano; and in 2020, the non-PEO NEOs include Messrs. Bigham and Willet, Joseph L. Dugan, Former SVP, Chief Experience and Go To Market Officer, Craig Burton, Former SVP, Commercial Real Estate Executive, and William L. Kreienberg, Former EVP, Chief Banking and Revenue Officer. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to the average NEO’s total compensation to determine the compensation actually paid:
| Average NEOs | |||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | 2021 | 2020 | |
| Total Compensation as reported in SCT | $530,950 | $550,383 | $591,637 | $526,957 | $528,013 |
| Minus pension values reported in SCT | $12,201 | $18,138 | $3,199 | $16,521 | $16,217 |
| Minus fair value of equity awards granted during fiscal year | $102,270 | $91,541 | $129,844 | $89,072 | $90,587 |
| Plus pension value attributable to current year’s service and any change in pension value attributable to plan amendments made in the current year | $12,354 | $10,159 | $12,316 | $10,967 | $10,811 |
| Plus fair value of equity compensation granted in current year—value at end of year-end | $179,022 | $59,640 | $107,769 | $102,701 | $55,620 |
| Plus change in fair value for end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during current fiscal year | $(6,079) | $(1,512) | $(2,535) | $4,978 | $(3,048) |
| Plus change in fair value from end of prior fiscal year to end of current fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year | $(69,323) | $(23,250) | $(29,352) | $62,215 | $(26,039) |
| Plus dividends or other earnings paid on stock or options awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year | $— | $— | $— | $— | $— |
| Plus fair value of awards forfeited in current fiscal year determined at end of prior fiscal year | $— | $(75,873) | $— | $— | $(43,572) |
| Compensation Actually Paid | $532,453 | $409,868 | $546,792 | $602,225 | $414,981 |
(4)
TSR is determined based on the value of an initial fixed investment of $100 on December 31, 2019 and calculated on December 31 of each 2024, 2023, 2022, 2021 and 2020, respectively. The TSR peer group consists of the S&P U.S. SmallCap Banks, which is the same peer group used by the Company for purposes of Item 201(e) of Regulation S-K under the Exchange Act in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
(5)
PPNI is a non-GAAP measure that we believe is useful in understanding our financial performance and condition. PPNI equals net income excluding provision for credit losses adjustment net of tax (utilizing marginal tax rate) and the after-tax impact of the fourth quarter 2024 loss on the sale of investment securities and the fourth quarter 2024 provision for litigation settlement. Refer to the GAAP to Non-GAAP Reconciliations in Appendix A.
2025 Proxy Statement 63
RELATIONSHIP DISCLOSURE
The following charts show, for the past three years, the relationship of the Company’s TSR relative to its peers as well as the relationship between the PEO and non-PEO NEOs “compensation actually paid” and (i) the Company’s TSR and the Peer Group’s TSR; (ii) the Company’s net income; and (iii) the Company’s PPNI, which is the Company selected measure:
Compensation Actually Paid vs. TSR 2020-2024
Compensation Actually Paid vs. Net Income (Loss) 2020-2024
64 Financial Institutions, Inc.
Compensation Actually Paid vs. PPNI(1) 2020-2024
(1)
PPNI is a non-GAAP measure that we believe is useful in understanding our financial performance and condition. PPNI equals net income excluding provision for credit losses adjustment net of tax (utilizing marginal tax rate) and the after-tax impact of the fourth quarter 2024 loss on the sale of investment securities and the fourth quarter 2024 provision for litigation settlement. Refer to the GAAP to Non-GAAP Reconciliations in Appendix A.
PERFORM ANCE MEASURES
The most important financial measures used by the Company to link compensation actually paid (as defined by SEC rules) to the Company’s NEOs for the most recently completed fiscal year to the Company’s performance are:
Most Important Financial Performance Measures
PPNI
Total Loan Growth
Non-Public Deposit Growth
Net Charge-Off Ratio
Return on Average Equity
Return on Average Assets
2025 Proxy Statement 65
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