Provident Financial adopts uniform executive severance with 2–3× CIC multiples

Rhea-AI Filing Summary

On 24-Jul-2025 Provident Financial Services (PFS) filed an 8-K announcing board approval of the Provident Bank Executive Severance Plan. Participation is limited to executives selected by the Compensation & Human Capital Committee and is conditional on waiving existing change-in-control agreements, preventing duplicate payouts. If terminated by the company without “cause,” a participant receives:

• cash severance equal to 1× base salary
• 1× target annual cash incentive
• company-paid health coverage for up to 12 months (via COBRA) and six months of outplacement services

Upon termination without cause—or resignation for “good reason”—within two years after a change-in-control, benefits escalate to 2× the above amounts for Valerie O. Murray and Ravi Vakacherla and 3× for CFO Thomas M. Lyons, plus a lump-sum payment equal to 12 months of COBRA premiums. The plan does not include excise-tax gross-ups; payments will be cut if necessary to avoid Section 4999 taxes when that yields a higher after-tax value for the executive. No financial statements or pro-forma data accompany the filing.

Positive

• Eliminates excise-tax gross-ups, aligning executive benefits with shareholder interests and limiting worst-case cash cost.
• Standardizes severance terms, replacing individual contracts and improving governance transparency.

Negative

• Change-in-control payouts could reach 3× salary and bonus for the CFO, creating a potentially large one-time cash outflow in an acquisition scenario.

Insights

Corporate Governance Analyst

TL;DR: Standardizes severance, caps tax costs, modest shareholder impact; governance clarity improves.

The plan replaces bespoke change-in-control contracts with a uniform framework, reducing legal complexity and eliminating excise-tax gross-ups that investors often criticize. Multiples of 2-3× cash comp are in line with mid-cap banking peers, so cost exposure is predictable. Because payouts trigger only on involuntary termination or good-reason quit post-CIC, routine turnover is unaffected. Overall, the filing is governance-neutral to slightly positive, signalling board attention to best practices while still offering competitive protection to retain leadership amid M&A chatter in the regional bank space.

Compensation & Risk Analyst

TL;DR: Potential cash outflow if bank is sold; no gross-up mitigates peak liability.

For Lyons, the maximum benefit equals three years of salary plus target bonus and COBRA subsidy, easily surpassing $3 m given industry norms. Murray and Vakacherla’s 2× multiple is also meaningful but manageable relative to PFS’s ~$530 m annual expense base. Absence of equity acceleration details suggests limited dilution risk. Because payouts are contingent on a change-in-control, balance-sheet impact is event-driven, not ongoing. Investors should monitor upcoming M&A activity; otherwise, the plan has negligible near-term P&L effect.

FALSE000117897000011789702025-07-242025-07-24

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): July 24, 2025

PROVIDENT FINANCIAL SERVICES, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

001-31566

42-1547151

(State or Other Jurisdiction of Incorporation)

(Commission File No.)

(I.R.S. Employer Identification No.)

239 Washington Street, Jersey City, New Jersey

07302

(Address of Principal Executive Offices)

(Zip Code)

Registrant's telephone number, including area code 732-590-9200

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol Symbol(s)

Name of each exchange on which registered

Common

PFS

New York Stock Exchange

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 (see General Instruction A.2. below):

☐ 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))

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.

(e) On July 24, 2025, the Board of Directors of Provident Financial Services, Inc. (the “Company”) adopted the Provident Bank Executive Severance Plan (the “Plan”), which provides severance benefits under certain circumstances to Plan participants, who are selected by the Compensation and Human Capital Committee of the Board of Directors of the Company. The Company’s executive officers, including Thomas M. Lyons, Valerie O. Murray and Ravi Vakacherla, who are named executive officers of the Company, will only be eligible to participate in the Plan if they agree to waive their existing change in control agreements, and they shall not be entitled to duplicative benefits.

Under the Plan, if an eligible participant is terminated by the Company without “cause” (as defined in the Plan), the participant is eligible to receive a severance payment equal to one times the participant’s base salary in effect for the year of termination, one times the cash incentive that would be paid or payable at target for the fiscal year in which the termination occurs (or for the prior fiscal year if the incentive opportunity has not yet been determined), continued health insurance coverage for up to one year provided a participant elects COBRA continuation coverage and outplacement services for six months, provided the participant signs a waiver and release of claims in favor of the Company.

If a participant’s employment is terminated by the Company without cause or if the participant terminates his or her employment for “good reason” (as defined in the Plan) within two years following a “change in control” (as defined in the Plan), then instead of receiving the benefits described above, the participant is eligible to receive a severance payment equal to an applicable multiple, which is two times for Valerie O. Murray and Ravi Vakacherla and three times for Thomas M. Lyons, multiplied by the sum of (a) the greater of the (i) participant’s annual base salary in effect on the date of a change in control or (ii) the participant’s annual base salary in effect on the date of his or her termination of employment, (b) the cash incentive that would be paid or payable at target for the fiscal year in which the termination occurs (or for the prior fiscal year if the incentive opportunity has not yet been determined), (iii) A cash payment equal to the product of: (a) twelve times the applicable multiple, and (b) the monthly COBRA charge in effect on the date of termination and outplacement services for six months, provided the participant signs a waiver and release of claims in favor of the Company.

The Plan does not provide for a gross-up payment to any of the executive officers, or any other eligible employee, to offset any excise taxes that may be imposed on excess parachute payments under Section 4999 (the “Excise Tax”) of the Internal Revenue Code of 1986, as amended. Instead, the Plan provides that in the event the payments described above would, if paid, be subject to the Excise Tax, then the payments will be reduced to the extent necessary so that no portion of the payments is subject to the Excise Tax, provided that the net amount of the reduced payments, after giving effect to income tax consequences, is greater than or equal to the net amount of the payments without such reduction, after giving effect to the Excise Tax and income tax consequences.

The above description is a summary of the terms of the Plan and is subject to and qualified in its entirety by the terms of the Plan, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 9.01.    Financial Statements and Exhibits

(a)     Financial Statements of Businesses Acquired. Not applicable.

(b)    Pro Forma Financial Information. Not applicable.

(c)     Shell Company Transactions. Not applicable.

(d)    Exhibits.

Exhibit No.        Description

10.1    Provident Bank Executive Severance Plan

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.

									PROVIDENT FINANCIAL SERVICES, INC.
DATE:			July 25, 2025						By:/s/ Thomas M. Lyons
									Thomas M. Lyons
									Senior Executive Vice President and Chief Financial Officer

FAQ

What did Provident Financial Services (PFS) announce in its July 24 2025 8-K?

The board adopted the Provident Bank Executive Severance Plan covering selected executives.

How much severance will PFS executives receive if terminated without cause?

They receive 1× base salary, 1× target bonus, up to 12 months COBRA coverage, and six months outplacement.

What multiples apply after a change in control at PFS?

Valerie O. Murray and Ravi Vakacherla get 2× the cash package; CFO Thomas M. Lyons gets 3×.

Does the new plan include excise-tax gross-ups for PFS executives?

No. Payments are reduced if necessary to avoid Section 4999 excise taxes rather than grossed up.

Will the severance plan affect PFS’s earnings immediately?

No immediate P&L impact; payouts occur only upon qualifying termination events.