XML 36 R22.htm IDEA: XBRL DOCUMENT v3.25.0.1
Long-Term Incentive Plans
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Long-Term Incentive Plans Long-Term Incentive Plans
The Company offers long-term incentive plans that provide for the granting of stock awards (both time-vested and performance-based) and stock options, as well as phantom stock units. The Company has established these plans to attract and retain qualified personnel in key positions, provide officers, employees, and non-employee directors with a proprietary interest in the Company as an incentive to contribute to the success of the Company, align the interests of management with those of other stockholders and reward employees for outstanding performance. Equity awards are discretionary and are targeted to a broad range of employees, including those in leadership roles, revenue generators, key contributors, and high-potential individuals who have contributed to the Company’s long-term strategic objectives.
Overview of Incentive Plans
The OceanFirst Financial Corp. 2020 Stock Incentive Plan, which also authorized the granting of stock options or awards of common stock, was approved by stockholders in 2020. This plan was subsequently amended in 2021 to increase the number of shares authorized for issuance through equity awards.
The following table presents the amount of the plan’s authorized shares and those that remain available for issuance as of December 31, 2024. The Plan allowed the Company to authorize shares subject to options or, in lieu of options, shares in the form of stock awards.
Authorized AwardsAuthorized but Not Issued
Stock OptionsorStock AwardsStock OptionsorStock Awards
2020 Plan6,950,000 2,780,000 2,734,577 1,093,830 
Stock Awards
The Company grants time-based and performance-based restricted stock awards. Time-based awards vest ratably, and generally have a three- to five-year vesting period. Performance-based stock awards, which are granted to certain senior executives and senior management employees, vest based on the estimated probability of achievement of defined tiered performance goals or include market-based conditions. Performance-based stock awards have tiered performance goals for each metric and are aligned with corresponding tiered vesting values. Performance-based stock awards have been set using financial data from the applicable strategic plan as approved by the Board, or based on financial metrics relative to the peer index.
The Company granted performance-based stock awards in 2024, 2023 and 2022. The 2024 performance-based stock awards were issued with a three year cliff vesting schedule or vest ratably over a four year period. The 2023 and 2022 performance-based stock awards were issued with a three year cliff vesting schedule.
Certain 2024, 2023 and 2022 performance-based stock awards include a market-based condition. The fair value of these awards were estimated through the use of the Monte Carlo valuation model at the time of grant, applying the following assumptions:
202420232022
Risk-free interest rate4.47 %4.56 %1.36 %
Expected performance period2.8 years2.8 years2.9 years
Expected volatility34.00 %35.80 %41.10 %
The risk-free interest rate is based on the U.S Treasury rate, with a term equal to the expected performance period. The expected performance period reflects the remaining term of the awards’ performance period. Expected volatility is based on actual historical results.
A summary of the granted but unvested stock award activity, which included both time- and performance-based stock awards, for the years ended December 31, 2024, 2023 and 2022 is as follows:
 202420232022
 Number
of
Shares		Weighted
Average
Grant Date
Fair Value		Number
of
Shares		Weighted
Average
Grant Date
Fair Value		Number
of
Shares		Weighted
Average
Grant Date
Fair Value
Outstanding at beginning of year:814,489 $21.73 835,340 $21.84 778,971 $22.30 
Granted554,081 15.35 322,425 22.14 279,750 21.47 
Vested(200,254)22.41 (228,370)22.55 (190,094)23.14 
Forfeited(96,781)21.93 (114,906)22.07 (33,287)22.17 
Outstanding at end of year1,071,535 $18.29 814,489 $21.73 835,340 $21.84 
Stock Options
The Company’s stock options expire 10 years from the date of grant and generally vest at a rate of 20% per year. The exercise price of each option equals the closing market price of the Company’s stock on the grant date. The Company typically issues treasury shares or authorized but unissued shares to satisfy stock option exercises.
The Company did not grant stock options for the years ended December 31, 2024, 2023 or 2022, and has not granted stock options since 2020.
A summary of option activity for the years ended December 31, 2024, 2023 and 2022 is as follows:
 202420232022
 Number
of
Shares		Weighted
Average
Exercise
Price		Number
of
Shares		Weighted
Average
Exercise
Price		Number
of
Shares		Weighted
Average
Exercise
Price
Outstanding at beginning of year1,969,439 $22.42 2,210,684 $21.66 2,458,255 $21.02 
Exercised(33,125)17.24 (195,684)14.59 (217,038)14.17 
Forfeited(15,358)20.44 (15,358)20.44 — — 
Expired(291,354)20.74 (30,203)18.32 (30,533)23.68 
Outstanding at end of year1,629,602 $22.85 1,969,439 $22.42 2,210,684 $21.66 
Options exercisable1,528,067 $23.01 1,663,506 $22.58 1,645,901 $21.57 
The aggregate intrinsic value for both stock options outstanding and stock options exercisable at December 31, 2024 was $253,000. The weighted average remaining contractual life of stock options outstanding and stock options exercisable at December 31, 2024 was 3.26 years and 3.13 years, respectively.
Phantom Stock Units
In 2022, the Company also established the OceanFirst Bank Phantom Equity Plan to issue phantom stock units to select senior management employees. The phantom stock units are liability-classified time-based awards, which vest ratably over a three- to five-year period. The fair value is determined based on the Company’s stock price at the grant date and remeasured monthly. The phantom stock units are settled in cash when they vest.
Compensation Expense
The compensation expense for stock awards, stock options and phantom stock units were as follows (in thousands):
For the Year Ended December 31,
202420232022
Stock awards$5,724 $5,154 $5,698 
Stock options360 700 940 
Phantom stock units1,707 1,092 554 
Total$7,791 $6,946 $7,192 
At December 31, 2024, the Company had an estimated $12.5 million of unrecognized compensation costs related to non-vested stock awards, stock options, and phantom stock units. This cost will be recognized over the remaining vesting period of 1.84 years.