Company: BWFG
Filing Date: 2025-04-08
Form Type: DEF 14A
Source: 0001505732-25-000079
Chunk: 41

Company: Bankwell Financial Group, Inc.
Filing Date: 2025-04-08
Form: DEF 14A
Chunk 41
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 with the grants are reviewed, as required by FASB ASC Topic 718.

Section 162(m) of the Internal Revenue Code generally prohibits any publicly held corporation from taking a federal income tax deduction for compensation paid over $1 million in any taxable year to the Chief Executive Officer and the other “covered employees” as defined in the rule. Under the tax laws in effect before 2018, compensation that qualified as “performance-based compensation” under Section 162(m) of the Code was deductible without regard to this limitation. Effective for tax years beginning after December 31, 2017, the Tax Cuts and Jobs Act of 2017 generally eliminated the performance-based exemption, subject to a special rule that grandfathers certain awards and agreements that were in effect on November 2, 2017. While considering tax deductibility as only one of several considerations in determining compensation, the Compensation Committee believes that the tax deduction limitation should not compromise its ability to structure compensation programs that provide benefits to Bankwell that outweigh the potential benefit of a tax deduction and, therefore, may approve compensation that is not deductible for tax purposes.

#### Stock Ownership Policy
The Compensation Committee believes that executives should have a meaningful equity interest in the Company. In order to promote equity ownership and further align the interests of management with our shareholders, the Board of Directors has adopted a share ownership policy for our executive officers. This policy is based upon the market value of our common stock as a multiple of such officer’s base pay determined as of December 31 of each year. The multiple is two times base salary for the CEO and one times base salary for the other executive officers, which must be achieved within three years of appointment to the executive position. Executive officers are expected to retain all vested restricted stock (net of shares withheld for or used to pay taxes) until they achieve the specified ownership level and thereafter maintain such ownership level.

#### Risk Assessment
The Company’s existing governance and organizational structure incorporates a substantial risk management component through the retention of an independent accounting firm (separate from the Company’s auditors) that performs internal audit reviews, the utilization of ALCO and a Directors Loan Committee, both comprised of independent directors of the Company and a Risk Committee, charged with oversight of the Company’s overall enterprise risk management framework, policies, procedures and controls.

In connection with the design and approval of our incentive programs, management and, in the case of executive incentive plans, the Compensation Committee, regularly evaluate whether the program is likely to encourage employees to take excessive or imprudent risk.