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Bank of Hawaii Corp. – ‘DEF 14A’ for 4/26/24

On:  Friday, 3/15/24, at 2:00pm ET   ·   For:  4/26/24   ·   Accession #:  950170-24-32071   ·   File #:  1-06887

Previous ‘DEF 14A’:  ‘DEF 14A’ on 3/17/23   ·   Latest ‘DEF 14A’:  This Filing   ·   2 References:   By:  Bank of Hawaii Corp. – ‘S-3ASR’ on 5/10/24 By:  Bank of Hawaii Corp. – ‘S-8’ on 4/26/24 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/15/24  Bank of Hawaii Corp.              DEF 14A     4/26/24    8:18M                                    Donnelley … Solutions/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                          HTML   2.45M 
 3: R1          Cover                                               HTML     13K 
 4: R2          Pay vs Performance Disclosure                       HTML    257K 
 5: XML         IDEA XML File -- Filing Summary                      XML     24K 
 8: XML         XBRL Instance -- boh-20240311_htm                    XML    337K 
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                Linkbases Document -- boh-20240311                               
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐ Preliminary Proxy Statement

☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material under §240.14a-12

 i Bank of Hawaii Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒ No fee required

☐ Fee paid previously with preliminary materials

☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

Your VOTE is important!

Notice of 2024

Annual Meeting of Shareholders

and Proxy Statement

Meeting Date: April 26, 2024

Bank of Hawai‘i Corporation

130 Merchant Street

Honolulu, Hawai‘i 96813

LETTER FROM OUR CHAIRMAN, CEO, AND PRESIDENT

March 15, 2024

Dear Shareholder:

The 2024 Annual Meeting of Shareholders of Bank of Hawai‘i Corporation will be held via live webcast on Friday, April 26, 2024, at 8:30 a.m. Hawaii Standard Time. Each shareholder will be asked to provide their control number when logging in to attend the virtual Annual Meeting. Shareholders who hold shares through an intermediary, such as a bank or broker, will also be able to use the control number provided by their bank or broker to attend and participate at the virtual Annual Meeting. More detailed instructions on how to attend and vote at the virtual Annual Meeting are found on pages 3 and 4.

The Notice of Meeting and Proxy Statement accompanying this letter describe the business we will consider and vote upon at the meeting. A report to shareholders on the affairs of Bank of Hawai‘i Corporation also will be given and shareholders will have the opportunity to ask about matters of interest concerning the Company through the virtual meeting platform during the virtual Annual Meeting.

For reasons explained in the accompanying Proxy Statement, the Board of Directors recommends that you vote FOR Proposal 1: Election of Directors, FOR Proposal 2: Advisory Vote on Executive Compensation, FOR Proposal 3: Approval of Bank of Hawai'i Corporation 2024 Stock and Incentive Plan, and FOR Proposal 4: Ratification of the Re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 2024 fiscal year.

Your vote is very important. Please complete, sign, date and return the enclosed proxy card and mail it promptly in the enclosed postage-paid return envelope, even if you plan to virtually attend the Annual Meeting. If you wish to do so, your proxy may be revoked at any time before voting occurs at the virtual Annual Meeting. You may also vote and change your vote at the virtual Annual Meeting.

On behalf of the Board of Directors, thank you for your cooperation and support.

NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS

To be held April 26, 2024

To Our Shareholders:

The 2024 Annual Meeting of Shareholders of Bank of Hawai‘i Corporation will be held via live webcast at www.meetnow.global/M5HMPQG on Friday, April 26, 2024, at 8:30 a.m. Hawaii Standard Time for the following purposes:

These items of business are more fully described in the proxy statement accompanying this Notice, which is being mailed to shareholders on or about March 15, 2024. Shareholders of record of Bank of Hawai‘i Corporation common stock (NYSE: BOH) at the close of business on February 29, 2024 are entitled to attend the meeting and vote on the business brought before it. A list of such shareholders shall be open to the examination of any shareholders upon request following the 2024 Annual Meeting of Shareholders.

We look forward to connecting with you at the meeting. However, if you cannot attend the meeting, your shares may still be voted by telephone or via the Internet, or you may complete, sign, date, and return the enclosed proxy card in the enclosed postage-paid return envelope.

Honolulu, Hawai‘i

March 15, 2024

Important Notice Regarding the Availability of Proxy Materials

for the 2024 Annual Meeting of Shareholders to be Held on April 26, 2024.

The Proxy Statement and the Bank of Hawai‘i Corporation 2023 Annual Report

on Form 10-K to Shareholders for the year ended December 31, 2023, are available at www.edocumentview.com/boh.

We encourage you to access and review all of the information in the proxy materials before voting.

BANK OF HAWAI‘I CORPORATION

PROXY STATEMENT

TABLE OF CONTENTS

PROXY STATEMENT SUMMARY

This summary contains highlights of information contained elsewhere in our proxy statement and does not contain all information to be considered. We encourage you to read the entire proxy statement before voting.

PROPOSALS FOR THE ANNUAL MEETING OF SHAREHOLDERS

VOTING YOUR SHARES

You may vote if you are a shareholder of record as of the close of business on February 29, 2024. Each share of common stock is entitled to one vote. Shares of Series A Preferred Stock generally are not entitled to vote. On February 29, 2024 (the “Record Date”), there were 39,771,110 shares of common stock issued and outstanding. All votes are confidential.

Even if you plan to attend the Annual Meeting of Shareholders, we encourage all shareholders to vote in advance of the meeting.

HIGHLIGHTS

Bank of Hawaii Corporation (“Bank of Hawai‘i Corporation” or the “Company”) is an independent regional financial services company. The Company’s principal subsidiary, Bank of Hawaii (“Bank of Hawai‘i” or the “Bank”), was founded in 1897 and provides a broad range of financial products and services to businesses, consumers and governments in Hawai‘i and the West Pacific.

Bank of Hawai‘i Corporation is committed to meeting high standards of ethical behavior, corporate governance, and business conduct. The first two columns in the table below summarize the Company’s governance and compensation practices, demonstrating what we do to drive performance and manage risk and is current through March 1, 2024. The third column highlights the Company’s business performance during 2023.

See “Sound Environmental, Social, and Governance Leadership” starting on page 18, “Compensation Discussion and Analysis” starting on page 36, and “Business and Performance Overview” starting on page 41.

PROXY STATEMENT

GENERAL INFORMATION

The Board of Directors (the “Board”) of Bank of Hawai‘i Corporation is soliciting the enclosed proxy for the Company’s 2024 Annual Meeting of Shareholders (the “Annual Meeting”). The proxy statement, proxy card, and the Company’s Annual Report to Shareholders and Annual Report on Form 10-K are being distributed to the Company’s shareholders on or about March 15, 2024.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING

PROPOSAL 1: ELECTION OF DIRECTORS

BOARD OF DIRECTORS

The Company’s Certificate of Incorporation requires that the Company’s Board consist of not fewer than three directors and not more than 15 directors, with the exact number to be determined by the Board. The Board fixed the number of directors for election at the annual meeting to be 12. Each of the 12 directors listed below has been nominated for a one-year term to serve until the 2025 Annual Meeting of Shareholders and until his or her successor is elected and qualified or until the director’s earlier resignation, removal, death or disqualification. In the event that any or all of the director nominees are unable to stand for election as director, the Board, upon the recommendation of the Nominating & Corporate Governance Committee, may select different nominees for election as directors.

Certain information with respect to each of the nominees is set forth below, including his or her principal occupation, qualifications, and directorships during the past five years. Each nominee has consented to serve and all nominees are currently serving on the Company’s Board. The nominees were each recommended to the Board by the Company’s Nominating & Corporate Governance Committee whose goal is to assemble a board that operates cohesively, encourages candid communication and discussion, and focuses on activities that help the Company create sustainable long-term growth and maximize shareholder value. The Nominating & Corporate Governance Committee also looks at the individual strengths of directors, their ability to contribute to the Board, and whether their skills and experience complement those of the other directors. A more detailed discussion on the nomination process and the criteria the Nominating & Corporate Governance Committee considers in their evaluation of director candidates is found in the Commitment to Effective Corporate Governance section which begins on page 18.

The Board of Directors recommends a vote “FOR” each of the nominees.

ARC - Audit & Risk Committee

BSC - Balance Sheet Committee

DAC - Digital Advisory Committee

FIMC - Fiduciary & Investment Management Committee

HRC - Human Resources & Compensation Committee

NCGC - Nominating & Corporate Governance Committee

As one of the largest financial institutions in Hawai‘i, finding director candidates with a deep knowledge of the focused market in which we operate is critical. The nominees’ breadth and diversity of experience, mix of qualifications, attributes, and skills strengthen our Board of Director’s effective oversight of the Company’s business. While our longer tenured directors bring a wealth of experience and deep understanding of the business, we recognize the need for fresh perspectives, have consistently added new directors, and are committed to continued board and committee diversity and refreshment.

ATTRIBUTES AND SKILLS OF THE NOMINEES

Nominees for directors are selected based on, among other criteria, their integrity, informed judgment, financial literacy, high performance standards, accomplishments and reputation in the community, experience, skill sets, ability to commit adequate time to Board and committee matters, and to act on behalf of shareholders. The criteria also includes a determination of the needs of the Board and of the individual’s personal qualities and characteristics with those of the other directors and potential directors in building a Board that is effective, collegial and responsive to the needs of the Company and its shareholders. The composition of the Board should encompass a broad range of skills, expertise, industry knowledge, diversity of background and viewpoint, and professional and community contacts relevant to the Company’s business.

QUALIFICATIONS AND EXPERIENCE

BENEFICIAL OWNERSHIP

At the close of business on January 31, 2024, Bank of Hawai‘i Corporation had 39,821,950 shares of its common stock outstanding. As of January 31, 2024, the following table shows the amount of Bank of Hawai‘i Corporation common stock owned by (i) each person or entity who is known by us to beneficially own more than five percent of Bank of Hawai‘i Corporation’s common stock; (ii) each current director and director nominee, (iii) each of the executive officers named in the Summary Compensation Table (the “named executive officers”), and (iv) all of our directors and executive officers as a group. Unless otherwise indicated and subject to applicable community property and similar statutes, all persons listed below have sole voting and investment power over all shares of common stock beneficially owned. Share ownership has been computed in accordance with SEC rules and does not necessarily indicate beneficial ownership for any other purpose.

SOUND ENVIRONMENTAL, SOCIAL, AND GOVERNANCE LEADERSHIP

The Company is dedicated to making corporate social responsibility a part of everything we do in the communities we serve, including how we manage and develop our people, the products and services we offer, and the investments we make in creating a sustainable and resilient economy in our communities. The Company’s Environmental, Social and Governance (“ESG”) Committee is a cross-functional team of senior executives representing Corporate Communications, Community & Employee Engagement, Philanthropy, Real Estate & Facilities, Banking, People Services, Investor Relations, Legal, Risk and Vendor Management, and all aspects of our revenue generating businesses. The ESG Committee reports to the Nominating and Corporate Governance Committee of the Board. Senior management and the Board remain committed to being a leader among Hawai‘i’s corporate citizens by fostering an effective and efficient risk and control environment that includes an emphasis on an ethically driven culture, sustainable growth, and an ongoing investment in our employees and our community. The Company publishes an annual ESG Report, which adheres to the Sustainability Accounting Standards Board (“SASB”) framework.

The Company’s Code of Business Conduct and Ethics drives a workplace and workforce that embraces the highest ethical and moral standards. We maintain strong and confidential reporting processes and procedures that support an open and honest environment in an effort to ensure that the highest principles of integrity and inclusion are maintained.

The Company believes that a diverse and inclusive workforce fosters an environment where everyone can thrive and be successful. As of December 31, 2023, approximately 87% of the Company’s workforce are ethnically diverse (non-Caucasian) and approximately 63% are female, including 43% and 60% of our senior leaders and managers, respectively. In addition, we conduct an external pay equity study periodically to ensure that a gender pay gap does not exist.

COMMITMENT TO EFFECTIVE CORPORATE GOVERNANCE

The Company is committed to effective corporate governance practices that enhance and protect shareholder rights. As of December 31, 2023, the following corporate governance practices were in place:

Corporate Governance Guidelines

The Company and the Board have adopted Corporate Governance Guidelines (“Governance Guidelines”). The Governance Guidelines are posted on the Investor Relations page of the Company’s website at www.boh.com. The Governance Guidelines address director qualification and independence standards, responsibilities of the Board, access to management and access to independent advisors, compensation, orientation and continuing education, Board committees, Chief Executive Officer (“CEO”) evaluation, management succession, Code of Business Conduct and Ethics, shareholder communications to the Board and the Board’s annual performance evaluation.

The Company’s leadership structure includes both a combined Chairman and CEO and a separate Lead Independent Director. At this time, the Board believes that it is in the best interests of the Company to have a single individual serve as Chairman and CEO to control and implement the short- and long-term strategies of the Company. The Board believes that this joint position provides it with the ability to perform its oversight role over management with the benefit of a management perspective as to the Company’s business strategy and all other aspects of the business. With its Lead Independent Director, this governance structure also provides a form of leadership that allows the Board to function distinct from management, capable of objective judgment regarding management’s performance, and enables the Board to fulfill its duties effectively and efficiently. The Company’s leadership structure promotes the objectivity of the Board’s decisions and its role in reviewing the performance of management. Through its leadership and governance processes the Company seeks to establish a governance structure that provides both oversight and guidance by the Board to management regarding strategic planning, risk assessment and management, and corporate performance.

The Company’s Lead Independent Director is appointed by the Board and the current Lead Independent Director, Mr. Raymond P. Vara, Jr., was appointed in April 2020. The Company’s Governance Guidelines clearly define the Lead Independent Director’s role and duties which include, but are not limited to, serving as Chair of the Company’s Nominating & Corporate Governance Committee, presiding over regularly scheduled executive sessions of the non-management directors, serving as a liaison between the non-management directors and executive management, and assisting the Board and executive management to ensure compliance with the Governance Guidelines.

The Board has determined that 11 of the 11 non-management director nominees for the 2024 Annual Meeting of Shareholders, including the Lead Independent Director, are “independent” as defined by the NYSE rules. The non-management directors meet in executive session without management in attendance for regularly scheduled meetings. The non-management directors may also meet in executive session each time the full Board convenes for a meeting. In 2023, the non-management directors met five times in executive session. The Lead Independent Director also meets regularly on an individual basis with members of the Company’s executive management team.

Director Qualifications and Nomination Process

The Nominating & Corporate Governance Committee is responsible for identifying and assessing all director candidates and recommending nominees to the Board. Potential nominees are evaluated based on their independence, within the meaning of the Governance Guidelines and the rules of the NYSE. Candidates to be nominated as a director, including those submitted by shareholders, are selected based on, among other criteria, their integrity, informed judgment, financial literacy, high performance standards, accomplishments and reputation in the community, experience, skill sets, and ability to commit adequate time to Board and committee matters and to act on behalf of shareholders. The criteria also include a determination of the needs of the Board and of the interplay between each individual’s personal qualities and characteristics and those of the other directors and potential directors in building a Board that is effective, collegial and responsive to the needs of the Company and its shareholders. In addition, Board members are expected to participate in continuing education and training opportunities to stay current on corporate governance, industry trends and issues and to enhance their understanding of the Company’s business.

The objective of the Nominating & Corporate Governance Committee is to present a combination of candidates that will result in a Board with a wide range of skills, expertise, industry knowledge, viewpoints, and backgrounds, with business and community contacts relevant to the Company’s business. To accomplish this, the Nominating & Corporate Governance Committee seeks candidates from different age groups, ethnicities, genders, industries, and experiences, in addition to the criteria described above. The Board includes directors with experience in public corporations, nonprofit organizations, and entrepreneurial individuals who have successfully run their own private enterprises. The Board also has the broad set of skills necessary for providing oversight to a financial institution, which includes proven leadership and expertise in finance, accounting, information technology, risk management, lending, investment management, digital marketing, data analytics and communications. A shareholder may submit a candidate for consideration by the Board to be included in the Board’s slate of director nominees. Candidates proposed by shareholders will be evaluated by the Nominating & Corporate Governance Committee under the same criteria that are applied to other candidates. The criteria are set forth above and in the Company’s Bylaws and Governance Guidelines. Candidates to be considered for nomination by the Nominating & Corporate Governance Committee at the 2024 Annual Meeting of Shareholders must have been presented in writing to the Corporate Secretary on or before November 18, 2023, at 130 Merchant Street, Honolulu, Hawai‘i 96813.

Director Experience, Tenure, Diversity and Refreshment

The Board maintains a unique balance of experience, tenure, diversity, cultural and local market knowledge and broad subject matter expertise. While our longer-tenured directors carry a wealth of experience and deep understanding of the Company and our industry, the Board embraces the need for fresh perspectives and is committed to continued director refreshment. Since 2019, the Board has added six new directors. Three of the current directors will retire at the 2024 Annual Meeting due to reaching the mandatory retirement age, and the remaining 12 current directors were nominated to stand for re-election at the 2024 Annual Meeting. The Board employs a balanced approach to populating Board Committees. This refreshment strategy results in a membership that maintains new and contemporary perspectives, ideas and approaches.

Board and Committee Evaluations

The Nominating & Corporate Governance Committee leads and oversees the annual evaluation of the Board and Board committees. The annual evaluation includes an individual director self-assessment and an independent third party hosted survey to determine whether the Board and its committees are functioning effectively. The Nominating & Corporate Governance Committee establishes the evaluation criteria, oversees the evaluation process, discusses the results with the Board, and implements any changes that emerge from the evaluations that the Board deems appropriate to enhance Board effectiveness.

An independent consultant provides assistance with the design of the online survey instrument and administers the survey on behalf of the Nominating & Corporate Governance Committee, thereby assuring anonymity of participant responses through a secure, encrypted website. A written report of total sample data, as well as data for the Board committees, is prepared by the consultant, analyzing the closed-end questions and including the verbatim comments offered by directors at the close of each section of the survey that may provide recommendations for improvement. The report also tracks current data against results from previous surveys, where comparable. The Nominating & Corporate Governance Committee, through the same third party, distributes a survey to executive management for feedback concerning how the Board and its committees can enhance their effectiveness.

Majority Voting

The Company’s Bylaws and Governance Guidelines provide for majority voting in uncontested elections and a resignation process in the event a director nominee does not obtain a majority of votes cast. The resignation process provides the Board with discretion to accept or reject a tendered resignation if a majority vote is not obtained. If the tendered resignation is not accepted by the Board, the Board shall not nominate such director to stand for re-election at the next annual meeting of shareholders.

Communication with Directors

Shareholders and any interested parties may communicate with the Board, non-management directors, or the Lead Independent Director by sending correspondence c/o the Company’s Corporate Secretary, 130 Merchant Street, Honolulu, Hawai‘i 96813. All appropriate communications received will be forwarded to the Board, non-management directors or the Lead Independent Director as addressed.

Code of Business Conduct and Ethics

The Company has earned its reputation as a respected leader in the communities it serves and in the financial services industry by conducting business in an ethical, responsible and professional manner. The Company is proud of the high standards of quality and service that have been its hallmark through the years. These qualities represent fundamental business practices and apply to all directors, officers and employees.

The Company and the Board have adopted a Code of Business Conduct and Ethics (the “Code”) for directors, executive officers (including the Company’s Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Controller) and employees that are posted on the Investor Relations page of the Company’s website at www.boh.com. The Code addresses the professional, honest and ethical conduct required of each director, officer and employee, conflicts of interest, disclosure process, compliance with laws, rules and regulations (including securities trading), corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets, and encourages the reporting of any illegal or unethical behavior through robust reporting protocols and whistleblower protections. The Company also maintains a whistleblower and anti-retaliation policy and encourages conduct reporting through several designated channels, including the Chair of the Audit & Risk Committee, Chief Ethics Officer, General Counsel and a third party hosted anonymous alert line. A waiver of any provision of the Code may be made only by the Audit & Risk Committee of the Board and must be promptly disclosed as required by SEC and NYSE rules. The Company will disclose any such waivers, as well as any amendments to the Code, on the Company’s website at www.boh.com.

Policy Prohibiting Hedging and Pledging of Company Stock

The Company’s Securities Trading Policy (the “Policy”) specifically prohibits directors and employees from hedging the risk associated with the ownership of Bank of Hawai‘i Corporation’s common stock. The Policy also prohibits directors and employees from pledging transactions involving Bank of Hawai‘i Corporation common stock as collateral, including the use of a traditional margin account with a broker-dealer.

Director Independence

The Board is comprised of a majority of independent directors as defined by the NYSE listing standards. In affirmatively determining that a director is independent of the Company’s management and has no material relationship with the Company, either directly or indirectly as a partner, shareholder, or officer of an organization that has a relationship with the Company, the Board applies the following categorical standards, in addition to such other factors as the Board deems appropriate:

For purposes of these independence standards, an “immediate family member” includes the director’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone (other than a domestic employee) who shares the director’s home.

The following 11 director nominees standing for election have been determined by the Board to be independent: Messrs. Erickson, Feldman, Lucien, Mills, Nichols, Vara, and Wo, and Mmes. Hulst, Moy, Tokioka, and Vares-Lum, and accordingly, the Board has a majority of independent directors as defined by the listing standards of the NYSE and the Governance Guidelines. The Audit & Risk, Human Resources & Compensation, and Nominating & Corporate Governance Committees are each composed entirely of independent directors who also meet applicable committee independence standards. Mr. Ho is the Chairman, CEO and President of the Company and is therefore not independent.

Human Resources & Compensation Committee Interlocks and Insider Participation

No member of the Human Resources & Compensation Committee during fiscal year 2023 served as an officer, former officer, or employee of the Company or had a relationship that was required to be disclosed under “Certain Relationships and Related Transactions.” Further, during 2023, no executive officer of the Company served as:

Oversight of Risk

The Company’s governance, including policies, standards and procedures, has been developed with the goal of ensuring that business decisions and the execution of business processes are in compliance with legal and regulatory requirements.

Authority for accepting risk exposures with appropriate limits on behalf of the Company originates from the Board. In turn, that authority is delegated through the Board-appointed Executive Committee, chaired by the CEO and comprised of executive management, and its subcommittees, including the Risk Council. The Risk Council, chaired by the Chief Risk Officer, provides the Executive Committee with a forum for the review and communication of both specific and company-wide risk issues, and serves to enhance collaboration among all areas of the Company that create and manage risk, while reinforcing executive management’s responsibility for ensuring risk is managed within established tolerances. The Asset and Liability Management Committee, a subcommittee of the Executive Committee, has responsibility for Company's balance sheet management.

Risk management at the Company is the process for identifying, measuring, controlling and monitoring risk across the enterprise given its business as a financial institution and financial intermediary. Risk Management crosses all functions and employees and is embedded in all aspects of planning and performance measurement. The Company’s systems, information and timely reporting are designed to enable the Company to identify early warning signs to allow management to proactively address potential issues.

The Board is responsible for oversight of the Company’s enterprise risk framework. The Board implements its risk oversight function both as a whole and through delegation to various committees. The Board has delegated to the Audit & Risk Committee primary responsibility for overseeing financial, credit, investment and operational risk exposures including regulatory and legal risk; to the Fiduciary & Investment Management Committee primary responsibility for oversight of fiduciary and investment risk of client accounts; and to the Human Resources & Compensation Committee primary responsibility for oversight of risk related to management and staff. These committees report to the full Board to ensure the Company’s overall risk exposures are understood, including risk interrelationships. The Board also oversees reputational risk.

Effective April 2023, the Balance Sheet Committee was established to assist the Board by ensuring the highest possible Board and management focus on the Company's Asset/Liability Management function during times of emergent stress or crisis affecting the Company and/or the broader banking system. The Balance Sheet Committee’s primary responsibility is to monitor crisis response, receive operational impact updates and action plans from management related to emergent issues, and provide focused oversight of liquidity and capital planning process, policy and mindset; stress testing scenarios and assumptions; risk appetite, framework and profile; potential crisis early warning signs; among other responsibilities.

Risk reports are provided and discussed at every committee and Board meeting. In addition to detailed reports, the Board reviews an Enterprise Risk Position report that reflects key risk measures and trends, including reputational risk, across the Company. Key managers responsible for risk management (Chief Risk Officer, Treasurer, Chief Compliance Officer, General Counsel, and Chief Fiduciary Officer, along with a variety of other risk specialists) regularly provide updates at the respective committee and Board meetings. In support of the Board’s risk oversight role and to ensure that potential problems are surfaced, the Audit & Risk Committee directly oversees the Company’s Internal Audit and Credit Review functions.

Cybersecurity and Information Security Risk Oversight

Management of cybersecurity risks is the responsibility of the full Board. In 2023, the Company, the Board, and the Audit & Risk Committee continued to strengthen the management and oversight of cybersecurity risks through new security system enhancements, policies, testing, identification and reporting. The Company continued its program of third party penetration testing and ongoing analysis to identify potential vulnerabilities and need for additional enhancements. The company also continued to support remote work that has been more prevalent as a result of the COVID-19 pandemic, which included ensuring the necessary provisions for managing the cybersecurity and information security risks associated with remote work.

The Board devotes significant time and attention to the oversight of cybersecurity and information security risk, and benefits from the technical expertise of certain of its members. In particular, the Board and Audit & Risk Committee each receive regular reporting on cybersecurity and information security risk. At least quarterly, the Audit & Risk Committee receives an operational risk update that includes a review of cybersecurity and information security risk. Our Board reviews and approves our Information Security Policy annually and frequently receives presentations on and discusses cybersecurity and information security risks, industry trends and best practices.

Compensation Policies and Risk

The Board’s risk oversight responsibility includes the implementation of compensation programs that do not encourage or incentivize excessive risk taking or inappropriate conduct and promotes, among other things, gender pay equality. The Human Resources & Compensation Committee is responsible for establishing and reviewing the Company’s executive compensation programs, as well as the compensation programs for employees generally, and ensuring that the programs do not encourage unnecessary or excessive risk taking or create risks that are reasonably likely to have a material adverse effect on the Company and its customers.

In addition to the Human Resources & Compensation Committee's annual comprehensive review, the Company's People Services Department provides the Audit & Risk Committee an analysis of potential “red flag” indicators including the existence, nature and extent of any customer complaints, regulatory complaints, legal actions, and employee feedback to determine if the incentive plan design or implementation resulted in employee wrongdoing or customer abuse.

COMMITMENT TO MEANINGFUL SOCIAL INITIATIVES

Support for Small Businesses

Bank of Hawai‘i continued to support small businesses with the SBA 504 Program, a commercial real estate financing program for owner-occupied properties that allows small business borrowers to preserve working capital by requiring only a 10% down payment on purchase transactions.

In Saipan, 2023 marked the 12th year of the I Kinometi Para I Kumunidåt I Islå-ta Grants, Bank of Hawai‘i’s small business and revitalization and development grants. Five grants of up to $5,000 each are awarded annually to support new and existing small businesses and to give back to the community. Since its inception in 2012, $300,000 has been awarded to 60 small businesses. One of the 2023 grant recipients was STEMify CNMI Robotics & Automation, the first and only robotics and automation training center for youth and the only automation service provider in the Commonwealth of the Northern Mariana Islands ("CNMI"). They are committed to empowering middle and high school students by equipping them with the skills and knowledge to excel in science, technology, engineering and mathematics ("STEM"). They plan to use their grant to fund scholarships for the first 100 students enrolled in their after-school STEM Robotics-On-Wheels program.

Philanthropy and Volunteering to Sustain Our Community

The Company, and its exceptional people, demonstrate their generosity and respect throughout the year by supporting many different causes. Bank of Hawai‘i, its employees, and the Foundation contributed more than $3 million to community and philanthropic causes in 2023.

Kōkua for Community

Bank of Hawai‘i’s Live Kōkua Giving Campaign is the Company’s biggest annual employee-giving event. During the 2023 campaign, employees raised more than $600,000 in partnership with Aloha United Way, which serves more than 300 nonprofits. Themed #ComeTogetherForCommunity, 90% of the Company’s employees participated during the campaign, which ran from September 12 to October 20, 2023, in an effort to make a difference for some of the most vulnerable in our communities.

Bank of Hawai‘i Foundation also supports hundreds of nonprofits in our local community. In addition, employee-volunteers (known as our Bankoh Blue Crew) participate in our Live Kōkua Volunteer Program for hands-on community service activities.

Highlights from Bankoh Blue Crew in the Community:

Bank of Hawai‘i Foundation

Bank of Hawai‘i Foundation supports the vision and services of hundreds of nonprofits in our community each year. These are some of the organizations that received funding in 2023:

Responding to Natural Disasters

Our communities encountered extraordinary challenges from natural disasters in 2023. In May, one of the strongest tropical cyclones on record in the Northern Hemisphere made direct impact on Guam. Typhoon Mawar downed trees and flooded thousands of homes and businesses across the island. The destruction from Mawar disrupted basic services for several weeks.

The devastating wildfires that ravaged Lahaina on August 8, 2023 resulted in the worst natural disaster Hawai‘i has ever experienced and the deadliest wildfire in U.S. history. The catastrophic events of that day led to tragic loss of lives, homes, livelihoods and historic places.

In order to provide immediate relief to our employees and customers, Bank of Hawai‘i offered special financial assistance programs to help in their recovery from the wildfires in Hawai‘i and typhoon on Guam. In addition to loan forbearances, loan extensions and waiving of ATM surcharges, Bank of Hawai‘i and Bank of Hawai‘i Foundation made donations to aid in recovery efforts and continue to provide long-term support to people and nonprofit organizations in our local communities, totaling $158,500 which include:

Continued Support for ALICE in Hawai‘i

Bank of Hawai‘i Foundation has been sponsoring the ALICE (Asset Limited, Income Constrained, Employed) Report on behalf of the Aloha United Way since 2018. In response to the first 2018 ALICE Report, the ALICE Initiative was designed to find solutions toward a more equitable Hawai‘i. Bank of Hawai‘i Foundation, among other partners, has pledged support for the next three years. Since 2018, more than 14,000 households have received access to services, and it’s our honor to continue this important work.

The 2022-2024 ALICE Fund invests in the ALICE Cohort Initiative, which includes 17 nonprofits collectively working to develop and implement impactful and scalable programs to help O‘ahu's ALICE households. It is overseen by Aloha United Way and Hawai‘i Community Foundation. This Initiative raises awareness about a huge, but sometimes hidden, segment of our community who are struggling to afford basic necessities.

Celebrating Diversity and Cultural Awareness

The Company is a long-time sponsor of the Honolulu Rainbow Film Festival, and in 2021 renewed a four-year sponsorship of the Hawai‘i LGBT Legacy Foundation to support the Honolulu Pride Parade & Festival. The donation supports not only the festival and parade, but helps to fund other program initiatives of the Hawai‘i LGBT Legacy Foundation. For several years, our employees have turned out in big numbers to show their support by walking in the parade. For the 2023 Honolulu Pride Parade Festival, over 150 employees with family and friends came out in support and celebration of Pride. In an effort to contribute to the progress and advancement of ensuring an inclusive, collaborative and respectful workplace, Bank of Hawai‘i’s Diversity, Equity and Inclusion Program supports employee-led Employee Resource Groups (“ERGs”). Our Women Inspired ERG works to empower, support and educate on issues important to women at work, home and in the greater community. Our RainBOH ERG celebrates coming to work with pride, encourages allies to become visible, and educates on issues related to the LGBTQIA+ community. Our Blue Brigade Military ERG engages in service and networking opportunities that serve the needs of service members, veterans and military families. Nā ‘Ōiwi Aloha (our Native Hawaiian ERG) was launched in 2022 to create opportunities for Native Hawaiians and allies to connect in dialogue and culture. These four ERGs sponsored over 17 community and employee engagement programs, and brought together nearly 800 employees, family and friends to join in fellowship, advancement and support of each other and the community. All of the ERG-sponsored programs aim to foster a sense of belonging among Bank of Hawai‘i’s employees and further the Company’s diversity, equity and inclusion goals.

Women Inspired ERG ("WIG"):

Blue Brigade Military ERG:

RainBOH LGBTQ+ ERG:

Nā ‘Ōiwi Aloha (Native Hawaiian ERG):

Employee Learning

Bank of Hawai‘i’s substantial training and career advancement programs target professional development and personal growth, which include our Fostering Workplace Excellence and other employee development programs. Bank of Hawai‘i continued to invest in people development in 2023. Employees attended a total of 36,791 hours in formal learning events on core employee or leadership skills development. In addition, select employees completed 8,853 development hours under the various professional development programs the company provides.

Investing in Our Employees

In 2016, Bank of Hawai‘i launched its College Assistance Program (“CAP”) to give employees striving to obtain their first four-year bachelor’s degree access to a college education and tuition reimbursement. CAP gives employees the convenience and flexibility to study where, when, and what they desire by allowing them to choose from a variety of select majors at Chaminade University of Honolulu. Their choice of majors need not relate to their current position. CAP also gives employees the option to pursue an accelerated online Associate of Arts degree through the University of Hawai‘i’s Community Colleges. When the program began in 2016, there were three participants. The program has been very successful and popular, with five employees who have earned their associate’s degree and 16 employees who have earned their bachelor’s degree since the program's inception. In 2023, we had 56 unique participants with $282,688 reimbursed to employees for the cost of their education. The Company’s Tuition Assistance Program (“TAP”) is aimed at assisting employees in completing job-related courses at any accredited school. Our TAP program had 19 unique participants with $80,044 reimbursed to student employees in 2023. Another educational assistance program offered is the Professional Certification Program managed by each department for their employee certification needs.

Bank of Hawai‘i also offers a Student Loan Assistance Program for employees. Student loan debt is a significant impediment to a key demographic sector of our national community. This program provides $100 per month, up to a lifetime maximum of $10,000, for an individual employee’s student debt. At year-end 2023, we had approximately 150 employees enrolled in this program. Our employee savings product, known as the GROW Account encourages our employees to build an emergency savings nest egg. Through these special accounts, we offer a $50 bonus to our employees when they reach $500 in savings in their GROW Account. We offer an additional $100 bonus to those employees who save an additional $500.

Our Employee Mortgage Program provides our employees with a discount of up to 1% off of prevailing market rates for their primary residences. This is an attractive retention tool for Bank of Hawai‘i given the high cost of housing on our islands.

Investing in Our Future

For the 2023 through 2024 academic year, Bank of Hawai‘i Foundation supported 24 college scholarships totaling $84,000 for children and grandchildren of Bank of Hawai‘i employees. Since 2014, the Foundation has provided $960,750 to fund 275 college scholarships. These scholarships reflect our commitment to help our employees and their families reduce the financial burdens of post-high school education. We believe this investment will enable a better future and the next generation of our world’s and Hawai‘i’s leaders.

Outreach to the Unbanked and Underbanked

Bank of Hawai‘i was the first local bank to offer an alternative to traditional checking accounts in Hawai‘i, beginning in April 2015. EASE by Bank of Hawai‘i combines convenience and access, is FDIC-insured and is among the lowest-fee bank accounts in the U.S.

EASE by Bank of Hawai‘i recently received national certification from the Cities for Financial Empowerment Fund (“CFE Fund”). The CFE Fund is dedicated to providing consumers with safe and affordable accounts that meet the Bank On National Account Standards (2021-2022). CFE Fund is dedicated to providing consumers with safe and affordable accounts, and the Bank On standards were created by consumer advocates, national nonprofits, civic leaders and others to designate account features that ensure low cost, high functionality and consumer safety. Bank On’s goal is to ensure that everyone has access to a safe and affordable bank or credit union account, and EASE by Bank of Hawai‘i is one of only two deposit account products in Hawai‘i to receive this national certification.

With no checks to return, customers do not incur overdraft fees. Customers are also given a free Visa debit card and free access to over 300 Bank of Hawai‘i and partner ATMs, do not have direct deposit requirements or monthly service fees if they elect to receive online statements, and are allowed to open an account with a deposit of just $25. They also receive free 24/7 Bankoh by Phone, mobile banking and e-Bankoh online banking services. We continue to see strong demand for our EASE product, and are pleased to meet the needs of unbanked and underbanked people in the communities we serve.

Assisting Communities with Their Financial Needs

Bank of Hawai‘i continues to build long-term relationships in the communities we serve through education. For the past 13 years, the Company has been offering our SmartMoney financial education seminars, which cover a variety of financial topics, such as how to save and invest and purchase a first home. In 2023, 338 Company employees contributed over 150 service hours to teach financial education classes on critical topics including identity protection, budgeting, financing college, and credit. Our volunteers taught at 28 schools, where greater than 50% of students were from families qualifying for a free or reduced price lunch. Every year since 2010, Bank of Hawai‘i employees have partnered with Goodwill Hawaii’s Volunteer Income Tax Assistance Program. In 2023, eight employees became IRS-certified for the 2023 season and accepted in the Consumer Financial Protection Bureau Tax Time Initiative Cohort. Company volunteers prepared 65 tax filings that resulted in over $101,000 in refunds back to the community.

Empowering Youth

Bank of Hawai‘i Foundation continued its ongoing sponsorship of PBS Hawai‘i’s HIKI NŌ, the groundbreaking student news program and statewide digital media learning initiative to support its programming. The Foundation’s investment dates back to the launch of HIKI NŌ in 2011. Since then, Hawai‘i’s HIKI NŌ schools have gained the reputation of being formidable competitors at rigorous national journalism contests.

For the past 13 years, Bank of Hawai‘i has partnered with nonprofit EPIC ‘Ohana’s Hawai‘i Youth Opportunities Initiative to offer financial education and services to foster teens. Foster youth have a high propensity for pregnancy, incarceration, homelessness and low college graduation rates due primarily to a lack of social network. Through the Opportunity Passport Program, teens from foster families are able to open matched Individual Development Account (“IDA”) savings accounts, where every dollar saved is matched by donors up to $1,000 annually (up to a maximum of $3,000). The funds may be withdrawn between the ages of 14 to 26 and have enabled young people to help pay for college education, housing and transportation. Since 2010, under the HI H.O.P.E.S Initiative (f/k/a Opportunity Passport), Bank of Hawai‘i has opened 1,069 IDAs as well as EASE accounts. A donation of $1.55 million has enabled former foster youth to pay for necessary expenses such as housing or education on O‘ahu or transportation on the neighbor islands.

Bank of Hawai‘i volunteers have been advising young entrepreneurs and improving financial literacy through decades of partnership with Junior Achievement. In 2023, 153 Company employees, from Guam to Hilo, volunteered in 16 schools to facilitate lessons or serve as advisors for the company program.

Housing for Our Community

Honolulu continues to be one of the most expensive cities in the U.S., and with a shortage of affordable rental homes across Hawai‘i, the availability of affordable and workforce housing is more important than ever.

In 2023, 1,360 affordable housing units (989 on O‘ahu, 90 on Maui, 148 on Hawai‘i Island, and 133 on Kaua‘i) started construction or rehabilitation thanks in part to Bank of Hawai‘i, and over 800 more units are in the pipeline. We are committed to investing in new opportunities to create more homes across the state, including these recent developments on three different islands. The following is a highlight of several housing developments supported by Bank of Hawai‘i that broke ground in 2023:

Kaloko Heights, Kailua-Kona, Hawai‘i Island

Kaloko Heights will provide 42 two-bedroom and 58 three-bedroom affordable units in garden-style buildings with solar water heating. Sponsored by the Hawai‘i Island Community Development Corporation and designed for families earning 30-60% of the area median income (AMI), this project will also set aside five units for families experiencing homelessness, at risk of becoming homeless, or transitioning out of an emergency shelter or a transitional housing program. Bank of Hawai‘i is supporting the project with a $27 million construction loan, nearly $4 million permanent loan and over $9.7 million in equity. Construction is expected to be completed by the end of 2024.

Parkway Village, Kapolei, O‘ahu

Parkway Village is a two-phase, first-of-its-kind mixed-use project that will feature a total of 405 affordable rental units and two on-site preschools. The project is an innovative effort to address both housing and early education needs in Kapolei and is a result of a partnership between the Kobayashi Group and the Āhē Group. Bank of Hawai‘i is supporting the project through $42 million in construction lending and over $36 million in permanent lending. Rental units from studios to four-bedroom apartments will be available for people earning 30-60% percent of the AMI. The development spans 10 acres of land owned by the City & County of Honolulu. The first residents are expected to move in by the end of 2024.

Hālawa View II, Hālawa, O‘ahu

Hālawa View II is an 18-story affordable housing project with 302 units for families earning 30-60% percent of the AMI. Five units will be set aside for the chronically homeless or those referred by U.S. VETS. The high-rise is being developed by Pacific Development Group along with the Hunt Companies. Bank of Hawai‘i is supporting the project through over $40 million in construction lending and over $24 million in permanent lending. The new building is being constructed within walking distance to the new Skyline rail transit system, and will feature a mix of studios, one-, two-, and four-bedroom units. The building will include energy-efficient fixtures in each unit, along with electric vehicle charging stations, low-flow plumbing and low-water landscaping. Hālawa View II is scheduled to be completed in 2025.

COMMITMENT TO ENVIRONMENTAL SUSTAINABILITY IN THE WAY WE DO BUSINESS

Bank of Hawai‘i seeks out projects that advance our overall environmental strategy, such as those that support renewable energy. Building sound environmentally minded investments into our portfolio reduces risk, increases our value to investors and allows us to pursue our own initiatives to reduce our impact on the environment through internal or employee initiatives.

Bank of Hawai‘i is constantly improving its operations to proactively find more efficient and effective ways to ensure both the long-term success of the Company and the continued vitality of the communities we serve. Through its modernization efforts, the Company is helping to do its part in offsetting the negative impacts of climate change, such as extreme weather conditions, natural disasters and rising sea levels, which are of significant concern to the Company, its operations, its customers and third party vendors upon which it relies.

Financing the Future

The Company actively participates in the financing of photovoltaic/energy savings projects. The Company currently is a lender in a variety of renewable energy projects with $159 million committed to these initiatives as of December 31, 2023, including $126 million in photovoltaic loans, $8.9 million in photovoltaic leases and $24 million in an energy savings project. Bank of Hawai‘i continues to seek out other opportunities in this sector and is a leader in these financing initiatives.

Environmental Highlights

In 2023, Bank of Hawai‘i continued to focus its efforts on Building Management Systems (“BMS”) as part of renovations or scheduled infrastructure upgrades. Through these upgrades, we are able to implement customized solutions that maximize energy conservation. Our energy initiatives to date have resulted in 74% of our building area with management systems in place. Reducing and offsetting energy consumption remains one of our top priorities and is a key to meeting our goal of year-over-year demand reductions.

Bank of Hawai‘i continues to participate in Hawaiian Electric Company’s Demand Response Program at our two largest facilities. Through this participation, the Company receives incentives to reduce its usage during periods of island-wide peak demand, helping to preserve the reliability of the electrical grid and reduce the need for more electrical generation equipment.

Along with its conservation efforts, Bank of Hawai‘i is committed to renewable energy resources, and has made this an integral part of the modernization project at its branches and other facilities. The Company now has photovoltaic installation on over 60% of owned branches and buildings. This includes three large photovoltaic systems (561kW, 350kW and 100kW) at its main facilities and a 150kW tenant-installed system.

In late 2023, the Company completed a multi-phase energy project at our Kahului Branch – project Kahului Net Zero. The final phase included a carport-mounted 40kW photovoltaic installation. This work, in combination with in-service rooftop PV array, battery storage, full-building LED retrofit and BMS, is intended to annually offset our energy consumption at Kahului Branch. In 2023, the Company provided surplus energy to the grid.

Our “Branch of Tomorrow” design principles continue to be used in our renovations. These focus on more efficient use of space, portable computing platforms to allow the tellers to reach out directly with customers and reduce queue times, and upgraded ATMs that allow direct deposit of cash and checks along with simplified transaction handling. Staff lunchrooms have been outfitted with point-of-use hot water dispensers to replace water heaters, microwave ovens to replace stoves and cook-tops, as well as large-screen LED monitors that allow for remote, online meetings and training sessions, which reduce energy usage and staff travel requirements.

Bank of Hawai‘i greatly improved its ability to respond to in-area natural disasters by relocating our disaster recovery data center to the continental U.S., enabling greater data protection while reducing our carbon footprint. Our partner on the continent has been running on 100% renewable energy since January 2016, and is the only major data center provider to receive an ‘A’ grade by Greenpeace in all five of their data center grading categories.

Reducing Waste

Reducing the amount of paper used in the workplace is part of Bank of Hawai‘i’s office transformation initiative. The Company strives for optimum performance in our digital environment and we anticipate this sustainability effort will have environmental, efficiency and cost-reduction benefits. We continue to contemporaneously image many current records, reducing the amount of paper required. Bank of Hawai‘i has also implemented several enterprise-wide digital and cloud-based solutions to help facilitate this initiative.

Encouraging Public Transportation and Bicycle Use

Bank of Hawai‘i offers a Bus Pass Benefit Program for its employees on O‘ahu, reducing the cost of a monthly bus pass from $80 to $35 (on a pre-tax basis) for participating employees 64 years and younger. Employees 65 and older receive $45 towards the purchase of a $45 senior annual bus pass. All active full-time and part-time employees who ride the bus as a primary source of transportation to and from work are eligible for the benefit. During 2023, more than 290 employees took advantage of this benefit, resulting in an annual commitment by the Company of close to $150,000 towards reducing greenhouse gas emissions.

Bank of Hawai‘i also offers employees up to $20 per month as reimbursement for reasonable expenses if an employee uses a bicycle regularly for commuting to work. Reasonable expenses include the purchase of a bicycle as well as continuing maintenance, repair and storage.

BOARD COMMITTEES AND MEETINGS

The Board met 14 times during 2023. The Board’s policy is that directors should make every effort to regularly attend meetings of the Board and committees on which they serve and the Company’s Annual Meeting of Shareholders. Each director attended at least 75% of the meetings of the Board and 75% of the committee meetings on which he or she served in 2023. All of the Company’s then sitting directors attended the 2023 Annual Meeting of Shareholders.

Board Committees

The Board has three standing committees: the Audit & Risk Committee, the Human Resources & Compensation Committee, and the Nominating & Corporate Governance Committee. The charters for the respective Board committees are posted in the Investor Relations page of the Company’s website at www.boh.com.

The Board has affirmatively determined that all of the members of the Audit & Risk, Human Resources & Compensation, and Nominating & Corporate Governance Committees (collectively the “Board Committees”) meet the independence standards of the NYSE and the Company’s Governance Guidelines. The Board Committees’ charters require that each committee perform an annual evaluation of its performance and assess the adequacy of its charter. Each committee has the authority to retain consultants and advisors to assist in its duties, including the sole authority for the retention, termination and negotiation of the terms and conditions of the engagement.

Below are the members of each current standing committee as of December 31, 2023.