UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. __)

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☐	Soliciting Material Pursuant to §240.14a-12

ESSA Bancorp, Inc.

(Name of Registrant as Specified In Its Charter)

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

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ESSA Bancorp, Inc.

200 Palmer Street

Stroudsburg, Pennsylvania 18360

January 25, 2021

Dear Fellow Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of ESSA Bancorp, Inc. (the “Company”). Due to the public health impact of the coronavirus pandemic and to support the health and well-being of our stockholders, this year’s Annual Meeting will be held in a virtual meeting format only, on March 4, 2021 at 10:00 a.m., Eastern Time. You will be able to attend the Annual Meeting virtually, vote and submit questions during the virtual Annual Meeting by visiting www.meetingcenter.io/277474950.

The enclosed Notice of Annual Meeting of Stockholders and Proxy Statement describe the formal business to be transacted at the Annual Meeting, which includes a report on the operations of the Company. Directors and officers of the Company will be present to answer any questions that you and other stockholders may have. Also enclosed for your review is our Annual Report on Form 10-K, which contains detailed information concerning the activities and operating performance of the Company.

The business to be conducted at the Annual Meeting consists of the election of two directors; the ratification of the appointment of S.R. Snodgrass, P.C. as our independent registered public accountants for the fiscal year ending September 30, 2021; and the consideration of an advisory, non-binding resolution with respect to the executive compensation described in the Proxy Statement. The Board of Directors has determined that the matters to be considered at the Annual Meeting are in the best interest of ESSA Bancorp, Inc. and its stockholders, and the Board of Directors unanimously recommends a vote “FOR” the election of the director nominees as well as each other matter to be considered.

Please indicate your vote by using the enclosed proxy card or by voting by telephone or internet, even if you currently plan to attend the virtual Annual Meeting. This will not prevent you from voting at the virtual Annual Meeting, but will ensure that your vote is counted. Your vote is important.

Sincerely,

Gary S. Olson

President, Chief Executive Officer and Director

ESSA Bancorp, Inc.

200 Palmer Street

Stroudsburg, Pennsylvania 18360

(570) 421-0531

NOTICE OF

ANNUAL MEETING OF STOCKHOLDERS

To Be Held On March 4, 2021

NOTICE IS HEREBY GIVEN that, due to the public health impact of the coronavirus pandemic and to support the health and well-being of our stockholders, this year’s Annual Meeting will be held in a virtual meeting format only, on March 4, 2021 at 10:00 a.m., Eastern Time. You can virtually attend the live webcast of the Annual Meeting at www.meetingcenter.io/277474950. The password for the meeting is ESSA2021. There is no physical location for the Annual Meeting.

A proxy statement and proxy card for the Annual Meeting are enclosed. The Annual Meeting is for the purpose of considering and acting upon:

1. the election of two directors;

2. the ratification of the appointment of S.R. Snodgrass, P.C. as independent registered public accountants for the fiscal year ending September 30, 2021;

3. an advisory, non-binding resolution with respect to the executive compensation described in the Proxy Statement; and

such other business as may properly come before the Annual Meeting, and any adjournments or postponement thereof.

The Board of Directors is not aware of any other such business. Any action may be taken on the foregoing proposals at the Annual Meeting, including all adjournments thereof. Stockholders of record at the close of business on January 11, 2021 are the stockholders entitled to vote at the Annual Meeting.

	By Order of the Board of Directors
	ESSA Bancorp, Inc.
Stroudsburg, Pennsylvania	Stephanie Lefferson
January 25, 2021	Corporate Secretary

It is important that your shares be represented and voted at the Annual Meeting. Stockholders whose shares are held in registered form have a choice of voting by proxy card, telephone or the Internet, as described on your proxy card. Stockholders whose shares are held in the name of a broker, bank or other holder of record must vote in the manner directed by such holder. Check your proxy card or the information forwarded by your broker, bank or other holder of record to see which options are available to you. Any stockholder of record attending the virtual Annual Meeting may withdraw his or her proxy and vote at the virtual Annual Meeting on any matter properly brought before the Annual Meeting. If you are a stockholder whose shares are not registered in your own name, you will need appropriate documentation from the stockholder of record to vote at the virtual Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on March 4, 2021: This Proxy Statement, proxy card and ESSA Bancorp, Inc.’s 2020 Annual Report to Stockholders are each available at www.essabank.com/proxy.

TABLE OF CONTENTS

GENERAL INFORMATION	1
The 2021 Annual Meeting of Stockholders	1
Who Can Vote	2
How Many Votes You Have	2
Matters to Be Considered	2
How to Vote	2
How to Attend the Virtual Annual Meeting	3
How to Register to Attend the Virtual Annual Meeting	3
Quorum and Vote Required	4
Participants in the ESOP, 401(k) Plan and 2016 Equity Incentive Plan	4
Revocability of Proxies	4
Solicitation of Proxies	5
Recommendation of the Board of Directors	5
Security Ownership of Certain Beneficial Owners and Management	5
PROPOSAL I – ELECTION OF DIRECTORS	7
Directors and Executive Officers	7
Nominees for Director for a Term of Three Years	7
Terms to Expire Fiscal Year 2022	8
Terms to Expire Fiscal Year 2023	8
Executive Officers of ESSA Bank & Trust Who Are Not Also Directors	9
Corporate Governance and Code of Ethics and Business Conduct	9
Director Independence	10
Board Meetings and Committees	10
Compensation Committee	10
Nominating and Corporate Governance Committee	11
Procedures for the Nomination of Directors by Stockholders	12
Stockholder Communications with the Board	12
Audit Committee	13
Audit Committee Report	13
Transactions with Certain Related Persons	14
Employee, Officer and Director Hedging	15
COMPENSATION MATTERS	16
Compensation Committee	16
Compensation Decision Process	19
Assessing Competitive Practice (Peer Groups)	19
Elements of the Compensation Package and 2020 Pay Outcomes	20
Other Compensation Policies and Guidelines	22
Anti-Hedging and Pledging Policy	22
Summary Compensation Table	23
Other Benefit Plans and Agreements	25
Director Compensation	28
PROPOSAL II – RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS	29
Fees Paid to Snodgrass	29
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Registered Public Accountants	29
Required Vote and Recommendation of the Board	30
PROPOSAL III – ADVISORY VOTE ON EXECUTIVE COMPENSATION	31
STOCKHOLDER PROPOSALS FOR THE 2022 ANNUAL MEETING	32
Advance Notice of Business to be Conducted at an Annual Meeting	32
OTHER MATTERS	32

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ESSA BANCORP, INC.

PROXY STATEMENT FOR THE

2021 ANNUAL MEETING OF STOCKHOLDERS

To Be Held on March 4, 2021

GENERAL INFORMATION

This Proxy Statement and accompanying Proxy Card and the 2020 Annual Report to Stockholders are being furnished to the stockholders of ESSA Bancorp, Inc. (sometimes referred to as “ESSA Bancorp” or the “Company”) in connection with the solicitation of proxies by the Board of Directors of ESSA Bancorp, for use at the 2021 Annual Meeting of Stockholders. Due to the public health impact of the coronavirus pandemic and to support the health and well-being of our stockholders, this year’s Annual Meeting will be held in a virtual meeting format only, on March 4, 2021, at 10:00 a.m., Eastern Time. The term “Annual Meeting,” as used in this Proxy Statement, includes any adjournment or postponement of such meeting.

This Proxy Statement is dated January 25, 2021 and is first being mailed to stockholders on or about January 25, 2021.

The 2021 Annual Meeting of Stockholders

Date, Time and Place	The Annual Meeting of Stockholders will be held on March 4, 2021, at 10:00 a.m., Eastern Time, and will be a virtual meeting format only. You can virtually attend the live webcast of the Annual Meeting at www.meetingcenter.io/277474950.
Record Date	January 11, 2021.
Shares Entitled to Vote	10,820,816 shares of ESSA Bancorp common stock were outstanding on the Record Date and are entitled to vote at the Annual Meeting.
Purpose of the Annual Meeting	To consider and vote on the election of two directors; the ratification of the appointment of S.R. Snodgrass, P.C. as ESSA Bancorp’s independent registered public accountants for the fiscal year ending September 30, 2021; and the consideration of an advisory, non-binding resolution with respect to the executive compensation described in the Proxy Statement.
Vote Required	Directors are elected by a plurality of votes cast, without regard to either broker non-votes or proxies as to which authority to vote for the nominees being proposed is withheld. The ratification of the appointment of S.R. Snodgrass, P.C. as independent registered public accountants is determined by a majority of the votes cast, without regard to broker non-votes or proxies marked “ABSTAIN.” As to the advisory, non-binding resolution with respect to our executive compensation as described in this Proxy Statement, a stockholder may: (i) vote “FOR” the resolution; (ii) vote “AGAINST” the resolution; or (iii) “ABSTAIN” from voting on the resolution. The affirmative vote of a majority of the votes cast at the Annual Meeting, without regard to either broker non-votes or shares as to which the “ABSTAIN” box has been selected on the proxy card, is required for the approval of this non-binding resolution.

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Your Board of Directors
Recommends a Vote in Favor of
The Proposals	The Board of Directors has determined that the matters to be considered at the Annual Meeting are in the best interest of ESSA Bancorp and its stockholders, and the Board of Directors unanimously recommends a vote “FOR” the election of the director nominees as well as each other matter to be considered.
ESSA Bancorp, Inc.	ESSA Bancorp, Inc., a Pennsylvania-chartered corporation, is the holding company for ESSA Bank & Trust, an FDIC-insured, Pennsylvania-chartered savings bank that has two regional offices in Bethlehem and Plymouth Meeting, and operates 22 community offices throughout the greater Pocono, Lehigh Valley, Scranton/Wilkes-Barre and suburban Philadelphia areas. At September 30, 2020, ESSA Bancorp had consolidated assets of $1.89 billion, consolidated loans of $1.42 billion, consolidated deposits of $1.54 billion and consolidated stockholders’ equity of $191.4 million. Our principal executive offices are located at 200 Palmer Street, Stroudsburg, Pennsylvania 18360, and our telephone number is (570) 421-0531.

Who Can Vote

The Board of Directors has fixed January 11, 2021 as the record date for determining the stockholders entitled to receive notice of and to vote at the Annual Meeting. Accordingly, only holders of record of shares of ESSA Bancorp common stock, par value $0.01 per share, at the close of business on such date will be entitled to vote at the Annual Meeting. On January 11, 2021, 10,820,816 shares of ESSA Bancorp common stock were outstanding and held by approximately 1,732 holders of record. The presence, at the virtual Annual Meeting or by properly executed proxy, of the holders of a majority of the outstanding shares of ESSA Bancorp common stock is necessary to constitute a quorum at the Annual Meeting.

How Many Votes You Have

Each holder of shares of ESSA Bancorp common stock outstanding on January 11, 2021 will be entitled to one vote for each share held of record. However, ESSA Bancorp’s Articles of Incorporation provide that stockholders of record who beneficially own in excess of 10% of the then-outstanding shares of common stock of ESSA Bancorp are not entitled to any vote with respect to the shares held in excess of that 10% limit. A person or entity is deemed to beneficially own shares that are owned by an affiliate, as well as by any person acting in concert with such person or entity.

Matters to Be Considered

The purpose of the Annual Meeting is to vote on the election of two directors; to ratify the appointment of S.R. Snodgrass, P.C. as our independent registered public accountants for the fiscal year ending September 30, 2021; and to consider an advisory, non-binding resolution with respect to the executive compensation described in the Proxy Statement.

You may be asked to vote upon other matters that may properly be submitted to a vote at the Annual Meeting. You also may be asked to vote on a proposal to adjourn or postpone the Annual Meeting. ESSA Bancorp could use any adjournment or postponement for the purpose, among others, of allowing additional time to solicit proxies.

How to Vote

You may vote your shares by completing and signing the enclosed Proxy Card and returning it in the enclosed postage-paid envelope or you may vote at the virtual Annual Meeting. Alternatively, you may choose to vote your shares using the internet or telephone voting options explained on your Proxy Card. You should complete and return the Proxy Card accompanying this document, or vote using the internet or telephone voting options, in order to ensure that your vote is counted at the Annual Meeting, or at any adjournment or postponement of the

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Annual Meeting, regardless of whether you plan to attend the virtual Annual Meeting. Where no instructions are indicated, validly executed proxies will be voted “FOR” the election of the two director nominees named on the Proxy Statement as well as “FOR” each other proposal set forth in this Proxy Statement for consideration at the Annual Meeting.

Stockholders whose shares are held in the name of a broker, bank or other holder of record must vote in the manner directed by such holder. Check your proxy card or the information forwarded by your broker, bank or other holder of record to see which options are available to you.

The Board of Directors is currently unaware of any other matters that may be presented for consideration at the Annual Meeting. If other matters properly come before the Annual Meeting, or at any adjournment or postponement of the Annual Meeting, shares represented by properly submitted proxies will be voted, or not voted, by the persons named as proxies on the Proxy Card in their best judgment.

How to Attend the Virtual Annual Meeting

The Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively by webcast. No physical meeting will be held.

You will be able to attend the Annual Meeting online and submit your questions during the meeting by visiting www.meetingcenter.io/277474950. You also will be able to vote your shares online at the virtual Annual Meeting.

To participate in the Annual Meeting, you will need to review the information included on your notice, on your proxy card or on the instructions that accompanied your proxy materials. The password for the meeting is ESSA2021.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance using the instructions below.

The virtual Annual Meeting will begin promptly at 10:00 a.m., Eastern Time, on March 4, 2021. We encourage you to access the meeting prior to the start time leaving ample time for the check in. Please follow the registration instructions as outlined in this Proxy Statement.

How to Register to Attend the Virtual Annual Meeting

If you are a registered stockholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register to attend the virtual Annual Meeting. Please follow the instructions on the proxy card that you received.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the virtual Annual Meeting.

To register to attend the Annual Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your ESSA Bancorp holdings along with your name and email address to Computershare.

Requests for registration should be directed to Computershare by forwarding the email you received from your bank or broker, or an image of your legal proxy, to legalproxy@computershare.com.

Requests for registration must be labeled as “Legal Proxy” and be received no later than 9:00 a.m., Eastern Time, on March 2, 2021.

You will receive a confirmation of your registration by email after your registration materials have been received.

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Quorum and Vote Required

The presence, at the virtual Annual Meeting or by properly executed proxy, of the holders of a majority of the outstanding shares of ESSA Bancorp common stock is necessary to constitute a quorum at the Annual Meeting. Abstentions and broker non-votes will be counted solely for the purpose of determining whether a quorum is present. A proxy submitted by a broker that is not voted is sometimes referred to as a broker non-vote.

Directors are elected by a plurality of votes cast, without regard to either broker non-votes or proxies as to which authority to vote for the nominees being proposed is “WITHHELD.” The ratification of the appointment of S.R. Snodgrass, P.C. as independent registered public accountants is determined by a majority of the votes cast, without regard to broker non-votes or proxies marked “ABSTAIN.” As to the advisory, non-binding resolution with respect to our executive compensation as described in this Proxy Statement, a stockholder may: (i) vote “FOR” the resolution; (ii) vote “AGAINST” the resolution; or (iii) “ABSTAIN” from voting on the resolution. The affirmative vote of a majority of the votes cast at the Annual Meeting, without regard to either broker non-votes or shares as to which the “ABSTAIN” box has been selected on the proxy card, is required for the approval of this non-binding resolution. While this vote is required by law, it will neither be binding on ESSA Bancorp or the Board of Directors, nor will it create or imply any change in the fiduciary duties of, or impose any additional fiduciary duty on ESSA Bancorp or the Board of Directors.

Participants in the ESOP, 401(k) Plan and 2016 Equity Incentive Plan

If you participate in the ESSA Bank & Trust Employee Stock Ownership Plan (the “ESOP”) or if you hold ESSA Bancorp common stock through the ESSA Bank & Trust 401(k) Plan (the “401(k) Plan”), you will receive a vote authorization form that reflect all shares you may direct the trustees to vote on your behalf under the plans. Under the terms of the ESOP, the ESOP trustee will vote all shares held by the ESOP, but each ESOP participant may direct the trustee how to vote the shares of common stock allocated to his or her account. The ESOP trustee, subject to the exercise of its fiduciary responsibilities, will vote all unallocated shares of common stock held by the ESOP and all allocated shares for which no voting instructions are received in the same proportion as shares for which it has received timely voting instructions. Under the terms of the 401(k) Plan, a participant is entitled to provide voting instructions for all shares credited to his or her 401(k) Plan account and held in the ESSA Bancorp Stock Fund. Shares for which no voting instructions are given or for which instructions were not timely received will be voted in the same proportion as shares for which voting instructions were received. Pursuant to the terms of the ESSA Bancorp 2016 Equity Incentive Plan, a participant is entitled to direct how to vote his or her non-vested restricted shares of ESSA Bancorp. The deadline for returning your voting instruction form is 9:00 a.m., Eastern Time on March 1, 2021.

Revocability of Proxies

You may revoke your proxy at any time before the vote is taken at the Annual Meeting. You may revoke your proxy by:

• submitting written notice of revocation to the Corporate Secretary of ESSA Bancorp prior to the voting of such proxy;

• submitting a properly executed proxy bearing a later date;

• using the internet or telephone voting options explained on the Proxy Card; or

• voting at the virtual Annual Meeting; however, simply attending the virtual Annual Meeting without voting will not revoke an earlier proxy.

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Written notices of revocation and other communications regarding the revocation of your proxy should be addressed to:

ESSA Bancorp, Inc.

200 Palmer Street

Stroudsburg, Pennsylvania 18360

Attention: Stephanie Lefferson, Corporate Secretary

If your shares are held in street name, your broker votes your shares and you should follow your broker’s instructions regarding the revocation of proxies.

Solicitation of Proxies

ESSA Bancorp will bear the entire cost of soliciting proxies from you. In addition to the solicitation of proxies by mail, ESSA Bancorp will request that banks, brokers and other holders of record send proxies and proxy material to the beneficial owners of ESSA Bancorp common stock and secure their voting instructions. ESSA Bancorp will reimburse such holders of record for their reasonable expenses in taking those actions. If necessary, ESSA Bancorp may also use several of its regular employees, who will not be separately compensated, to solicit proxies from stockholders, personally or by telephone, facsimile or letter.

Recommendation of the Board of Directors

The Board of Directors has determined that the matters to be considered at the Annual Meeting are in the best interest of ESSA Bancorp and its stockholders, and the Board of Directors unanimously recommends a vote “FOR” the election of the director nominees as well as each other matter to be considered.

Security Ownership of Certain Beneficial Owners and Management

Persons and groups who beneficially own in excess of five percent of the Company’s common stock are required to file certain reports with the Securities and Exchange Commission regarding such beneficial ownership. The following table sets forth, as of January 11, 2021, certain information as to the shares of the Company’s common stock owned by persons who beneficially own more than five percent of the Company’s outstanding shares of common stock. We know of no persons, except as listed below, who beneficially owned more than five percent of the outstanding shares of the Company’s common stock as of January 11, 2021. For purposes of the following table and the table included under the heading “Management,” in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, a person is deemed to be the beneficial owner of any shares of common stock (i) over which he or she has, or shares, directly or indirectly, voting or investment power or (ii) as to which he or she has the right to acquire beneficial ownership at any time within 60 days after January 11, 2021.

Name and Address of Beneficial Owner	Number of Shares Owned and Nature of Beneficial Ownership			Percent of Shares of Common Stock Outstanding(1)
The ESSA Bank & Trust Employee Stock Ownership Plan TI-TRUST, Inc., Trustee 2900 North 23rd Street Quincy, Illinois 62305		1,163,605	(2)		10.75	%
Maltese Capital Management LLC 150 East 52nd Street 30th Floor New York, New York 10022		790,300	(3)		7.30	%

(1) Based on 10,820,816 shares of the ESSA Bancorp common stock outstanding as of January 11, 2021.

(2) This information is based on a Schedule 13G/A filed with the Securities and Exchange Commission on June 29, 2020 by TI-TRUST, Inc., as Trustee on behalf of ESSA Bank & Trust Employee Stock Ownership Plan Trust. According to the filing, ESSA Bank & Trust Employee Stock Ownership Plan Trust had sole power to vote or direct 1,136,429 shares of the Company’s common stock.

(3) This information is based on a Schedule 13G filed with the Securities and Exchange Commission on February 13, 2020.

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The following table sets forth information about the shares of ESSA Bancorp common stock owned by each nominee for election as director, each incumbent director, each named executive officer identified in the summary compensation table included elsewhere in this Proxy Statement, and all nominees, incumbent directors and executive officers as a group, as of January 11, 2021.

Names	Position(s) held in the Company	Shares Owned Directly and Indirectly			Percent of Class(1)
NOMINEES
Robert C. Selig, Jr.	Director		90,654			*	%
Philip H. Hosbach, IV	Director		4,782			*	%
CURRENT DIRECTORS NOT UP FOR REELECTION THIS YEAR
Brian T. Regan	Director		34,776	(2)(3)		*	%
Gary S. Olson	Director, President and Chief Executive Officer		117,548	(4)		1.09	%
Christine Davis Gordon	Director		4,520			*	%
Joseph S. Durkin	Director		4,720			*	%
Daniel J. Henning	Director		59,210			*	%
Elizabeth B. Weekes	Director		31,370			*	%
Tina Q. Richardson(7)	Director		—			—
Carolyn P. Stennett(7)	Director		—			—
NAMED EXECUTIVES OFFICERS WHO ARE NOT DIRECTORS
Charles D. Hangen	Executive Vice President, Chief Operating Officer		40,568	(5)		*	%
Allan A. Muto	Executive Vice President and Chief Financial Officer		122,056	(6)		1.13	%
All directors and executive officers as a group (16 persons)			816,437			7.55	%

* Less than 1%.

(1) Based upon 10,820,816 shares outstanding. Includes restricted stock awards.

(2) Includes 30,854 shares held in Mr. Regan’s IRA and 402 shares held by a family trust.

(3) Mr. Regan’s term as a member of the Board of Director will end effective as of the 2021 Annual Meeting and he is not standing for reelection.

(4) Includes 266 shares held by Mr. Olson’s spouse’s IRAs, 43,305 shares held by Mr. Olson’s IRA and 11,582 shares held in Mr. Olson’s Employee Stock Ownership Plan account.

(5) Includes 9,856 shares held by Mr. Hangen’s IRA, 6,270 shares held in Mr. Hangen’s Employee Stock Ownership Plan account and 5,087 shares held by Mr. Hangen’s spouse’s IRA.

(6) Includes 11,045 shares held by Mr. Muto’s 401(k) and 15,130 shares held in Mr. Muto’s Employee Stock Ownership Plan account.

(7) Appointed to the Board of Directors on December 18, 2020.

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PROPOSAL I – ELECTION OF DIRECTORS

The Board of Directors currently consists of ten (10) members and is divided into three classes, with one class of directors elected each year. Mr. Regan’s term as a member of the Board of Director will end effective as of the 2021 Annual Meeting and he is not standing for reelection. As a result, ESSA Bancorp will reduce the size of its Board of Directors from ten (10) to nine (9), effective as of the 2021 Annual Meeting.

Two (2) directors will be elected at the Annual Meeting and will serve for three years and until their successors have been elected and qualified. The Nominating and Corporate Governance Committee has nominated Robert C. Selig, Jr. and Philip H. Hosbach, IV to serve as directors for a three-year term.

The biographies of each of the nominees and continuing board members below contain information regarding the person’s business experience and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board of Directors to determine that the person should serve as a director. The principal occupation during the past five years of each of our directors is set forth below. All directors have held their present positions for at least five years unless otherwise stated. Each existing director is also a director of ESSA Bank & Trust.

All of the nominees and directors continuing in office are or were long-time residents of the communities served by ESSA Bancorp and many of such individuals have operated, or currently operate, businesses located in such communities. As a result, each nominee and director continuing in office has significant knowledge of the businesses that operate in ESSA Bancorp’s market area, an understanding of the general real estate market, values and trends in such communities and an understanding of the overall demographics of such communities. As the holding company for a community banking institution, ESSA Bancorp believes that the local knowledge and experience of its directors assists ESSA Bancorp in assessing the credit and banking needs of its customers, developing products and services to better serve its customers and assessing the risks inherent in its lending operations, and provides ESSA Bancorp with greater business development opportunities.

It is intended that the proxies solicited on behalf of the Board (other than proxies in which the vote is withheld as to the nominees) will be voted at the Annual Meeting “FOR” the election of the nominees. If the nominees are unable to serve, the shares represented by all such proxies will be voted for the election of such substitute as the Board may recommend. At this time, the Board knows of no reason why the nominees would be unable to serve if elected. Except as indicated herein, there are no arrangements or understandings between the nominees and any other person pursuant to which such nominees were selected.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES LISTED IN THIS PROXY STATEMENT.

Directors and Executive Officers

Following is the business experience for the past five years of each of the Company’s directors and executive officers with their ages as of September 30, 2020.

Nominees for Director for a Term of Three Years

Robert C. Selig, Jr., age 72, has served as President of Selig Construction Company since 1972. Selig Construction Company focuses on its landscape and nursery business. Mr. Selig is a graduate of West Side Area Vocational/Technical School. Mr. Selig has been a director of the Company since its inception and a director of ESSA Bank & Trust since 1990. Mr. Selig’s experience as a local businessman focusing on real estate matters is of great value to the Board of Directors.

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Philip H. Hosbach, IV, age 58, is a retired executive from Sanofi Pasteur where he was Vice President, Global Public Affairs for Vaccines. He is currently an independent consultant working with pharmaceutical and healthcare companies. His prior roles with Sanofi Pasteur included Vice President, New Products and Immunization Policy and Vice President, US Vaccine Public Affairs. He was also a member of Sanofi Pasteur’s board of directors and executive committee. Mr. Hosbach was previously a director of the Company from 2014 to 2016 at which time he resigned following his acceptance of a career assignment overseas. Mr. Hosbach is a respected senior leader with over 31 years of experience, holding executive positions in clinical research, research and development, advocacy, government relations, and commercial operations, including marketing and sales. His interdisciplinary expertise ranges in public affairs, global corporate governance, public policy, and U.S. federal and state government relations. Mr. Hosbach’s significant government relations, marketing and sales experience are of great benefit to the Board of Directors. 

Terms to Expire Fiscal Year 2022

Gary S. Olson, age 66, has been President and Chief Executive Officer of ESSA Bank & Trust since 2000. Mr. Olson began his career at ESSA Bank & Trust in 1977. Mr. Olson is a graduate of East Stroudsburg University. Mr. Olson has been a director of the Company since its inception and a director of ESSA Bank & Trust since 2000. Mr. Olson’s extensive banking experience and knowledge of local markets enhance the breadth of experience of the Board of Directors.

Joseph S. Durkin, age 61, is Executive Vice President of Reilly Associates, a firm established in 1930 and headquartered in Pittston, Pennsylvania which provides engineering, environmental, and surveying services to clients. He has overseen engineering projects throughout Pennsylvania and New York. He has provided guidance for project management, engineering, finance, and scheduling among numerous other activities. Durkin previously held analytical positions with Rohm and Haas Company, FMC Corporation and Chevron Research Company, and is a partner in Northeast Infrastructure LLC, a service disabled veteran owned small business, which provides project development services. He holds a Bachelor of Science in engineering from Princeton University and an MBA from the University of Chicago and is active in numerous local philanthropic and professional organizations. Mr. Durkin’s extensive business experience is of significant benefit to the Board and led to his appointment to the Board of Directors in 2016.

Christine Davis Gordon, age 44, is Deputy Chief Compliance Officer with Olympus Corporation of the Americas, responsible for overseeing compliance practices across the Company’s business groups in North America and Latin America, which employ more than 5,000 people. She previously served as a staff attorney with Olympus. Prior to joining Olympus, she was Assistant District Attorney for the Philadelphia District Attorney’s office as a member of the Economic and Cyber Crime Unit Investigations Division and Trial Division. She graduated from Lehigh University in Bethlehem, Pennsylvania and received her law degree from Villanova University. Ms. Gordon’s experience as an attorney and a compliance officer provide a unique perspective to the Board and led to her appointment to the Board of Directors in 2016.

Carolyn P. Stennett, age 54, is Vice President, Human Resources at Victaulic Company. She leads their global human resources team and is responsible for all aspects of Victaulic’s people strategy that supports Victaulic’s strategic growth and corporate objectives. She was formerly the deputy director and general counsel for the National Head Start Association and assistant general counsel for United Technologies Corporation. Ms. Stennett received her B.S. in chemistry from Howard University, Master of Public Administration from Harvard University Kennedy School and J.D. from Boston College Law School. She currently serves on the board of trustees for the Allentown Art Museum and Cedar Crest College. Ms. Stennett resides in Allentown, PA. Ms. Stennett’s experience as an attorney and as a human resource professional will provide significant benefit and perspective to the Board and led to her appointment to the Board of Directors in December of 2020.

Terms to Expire Fiscal Year 2023

Daniel J. Henning, age 68, is the Owner of A. C. Henning Enterprises, Inc., builder developers of multi-family and commercial projects in the Pocono area. Mr. Henning is also a partner in AMD/Henning Leasing a family real estate holding partnership. He has previously served on several public authorities in Monroe County. Mr. Henning has been a director of the Company since its inception and a director of ESSA Bank & Trust since 1995. Mr. Henning’s experience as a real estate developer and a local business owner led to his appointment to the Board of Directors in 1995.

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Elizabeth B. Weekes, age 61, has been a partner in the law firm Bensinger and Weekes, P.A. since 1987. Ms. Weekes’s practice focuses on real estate, civil litigation, domestic relations, banking, municipalities and estates. Ms. Weekes is a graduate of Colgate University and Dickinson School of Law. Ms. Weekes has been a director of the Company since its inception and a director of ESSA Bank & Trust since 1998. Ms. Weekes’s experience as a real estate attorney provides a unique perspective to the Board of Directors.

Dr. Tina Q. Richardson, age 57, is Chancellor of Penn State University’s Lehigh Valley campus. As Chancellor of the campus, she is responsible for all managerial decisions related to strategic planning, academics, student experiences, financial resource management and facilities management. She was formerly associate dean of academic affairs at Drexel University School of Education and served twenty years as a faculty member at Lehigh University. Dr. Richardson received her bachelor’s degree in psychology and master’s and doctorate in counseling psychology from the University of Maryland. She currently serves on the board of directors for Good Shepard Penn Partners, Greater Lehigh Valley Chamber of Commerce, Lehigh Valley Economic Development Corporation, Lehigh Valley Partnership and United Way of the Greater Lehigh Valley. Dr. Richardson resides in Bethlehem, PA. Dr. Richardson’s experience with institutional governance, education and the Lehigh Valley community will provide significant benefit and perspective to the Board of Directors and led to her appointment to the Board of Directors in December 2020.

Executive Officers of ESSA Bank & Trust Who Are Not Also Directors

Allan A. Muto, age 60, has been the Executive Vice President and Chief Financial Officer of ESSA Bank & Trust since January 2006. Prior to that time, Mr. Muto served as Executive Vice President, Chief Operating Officer beginning in 2001.

Charles D. Hangen, age 48, was appointed Executive Vice President, Chief Operating Officer in May 2017. In August 2015, Mr. Hangen was appointed Senior Vice President, Chief Operating Officer. Prior to that time, Mr. Hangen served as Senior Vice President, Lending Services Division beginning in 2014. Mr. Hangen joined ESSA Bank & Trust as Vice President, Credit Administration in August 2012. Previously, Mr. Hangen served as Vice President of Lending for First Star Bank from 2004 through August 2012.

Diane K. Reimer, age 64, has been Senior Vice President, Administration/Operations Division since 2013. Previously, Ms. Reimer was Vice President, Delivery Systems Division since 1998 and first joined ESSA Bank & Trust in 1983.

Thomas J. Grayuski, age 59, was appointed Senior Vice President, Human Resources Services Division in May 2017. Prior to that Mr. Grayuski served as Vice President, Human Resources Services Division since 2000 and joined ESSA Bank & Trust in 1996.

Peter A. Gray, age 56, was appointed Executive Vice President, Chief Banking Officer in December 2017. Mr. Gray joined the Bank in March of 2017 as an Executive Vice President, Director of Strategic Initiatives. Previously, Mr. Gray served in various executive positions at National Penn Bank in Allentown as well as at other financial institutions.

Corporate Governance and Code of Ethics and Business Conduct

ESSA Bancorp is committed to maintaining sound corporate governance principles and the highest standards of ethical conduct and is in compliance with applicable corporate governance laws and regulations.

The Board has adopted a code of ethics for the principal executive officer, principal financial officer, principal accounting officer and all persons performing similar functions. The code of ethics is designed to deter wrongdoing and to promote honest and ethical conduct, the avoidance of conflicts of interest, full and accurate disclosure and compliance with all applicable laws, rules and regulations. The code of ethics is available on the Company’s website at www.essabank.com. Amendments to and waivers from the code of ethics are disclosed on the Company’s website.

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Director Independence

The Board has determined that, except for Mr. Olson, each member of the Board is an “independent director” within the meaning of the NASDAQ corporate governance listing standards and the Company’s corporate governance policies. Mr. Olson is not considered independent as he is an executive officer of the Company. There were no transactions that the Board of Directors needed to review that are not required to be reported under “—Transactions with Certain Related Persons” that would bear in the determination of the independence of the directors.

Our Board of Directors is currently chaired by Mr. Selig, who is a non-executive director. This structure ensures a greater role for the independent directors in the oversight of ESSA Bancorp and ESSA Bank & Trust, and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of the Board.

The Board of Directors is actively involved in oversight of risks that could affect ESSA Bancorp. This oversight is conducted primarily through committees of the Board of Directors, but the full Board of Directors has retained responsibility for general oversight of risks. The Board of Directors satisfies this responsibility through full reports by each committee chair regarding such committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within ESSA Bancorp. Risks relating to the direct operations of ESSA Bank & Trust are further overseen by the Board of Directors of ESSA Bank & Trust, which consists of the same individuals who serve on the Board of Directors of ESSA Bancorp.

Board Meetings and Committees

The Board of Directors of ESSA Bancorp met 11 times during the fiscal year ended September 30, 2020. No director attended fewer than 75% of the aggregate of the total number of Board meetings and committee meetings on which he or she served (during the period in which he or she served) that were held during the fiscal year ended September 30, 2020. Executive sessions of the independent directors are conducted on a regular basis. Although not required, attendance of Board members at the Annual Meeting of Stockholders is encouraged. Seven of the nine directors in office as of the 2020 Annual Meeting of Stockholders attended the Meeting.

The Company has three standing Board committees: Compensation; Nominating and Corporate Governance; and Audit.

Compensation Committee

The Compensation Committee consists of three independent directors: Ms. Weekes (Chair) and Messrs. Durkin and Hosbach. Responsibilities of the Compensation Committee include reviewing the overall compensation philosophy of ESSA Bancorp, determining the salaries and other forms of compensation to be paid to the President and Chief Executive Officer and those executive officers who report directly to the President and Chief Executive Officer, review of directors’ compensation and administration of management compensation plans.

None of these individuals was an officer or employee of ESSA Bancorp or ESSA Bank & Trust during the fiscal year ended September 30, 2020, or is a former officer of ESSA Bancorp or ESSA Bank & Trust. Each member of the Compensation Committee is independent in accordance with the listing standards of the NASDAQ Stock Market. Our Compensation Committee operates under a written charter, adopted by the Board of Directors, which is available at our website at www.essabank.com. This charter is reviewed and, if warranted, revised annually. The Compensation Committee met three times during the fiscal year ended September 30, 2020.

Analysis of Compensation Risk. In setting compensation, the Compensation Committee also considers the risks to ESSA’s stockholders that may be inherent in the compensation program and to the achievement of our goals. Based on its review, the Compensation Committee believes our compensation programs represent an appropriate balance of short-term and long-term compensation and do not encourage executive officers or other employees to take unnecessary or excessive risks that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee review also considered our internal controls, policies and risk-mitigating components in our incentive arrangements currently in place.

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We considered the following elements, among others, of our executive compensation plans and policies when evaluating whether such plans and policies encourage our executives to take unreasonable risks:

• we set performance goals that we believe are reasonable but challenging in light of past performance and market conditions;

• we have a balanced portfolio between long-term and short-term compensation, variable and fixed pay, and cash and equity with a compensation portfolio weighted similar to our peers; and

• our executive stock ownership guidelines require our executives to hold certain levels of stock which aligns an appropriate portion of their personal wealth to the long-term performance of the Company.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee currently consists of Messrs. Henning (Chair), and Hosbach and Ms. Weekes. The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to become Board members and recommending a group of nominees for election as directors at each annual meeting of stockholders, ensuring that the Board and its committees have the benefit of qualified and experienced independent directors, and developing a set of corporate governance policies and procedures. The Nominating and Corporate Governance Committee operates under a written charter, adopted by the Board of Directors, which is available at our website at www.essabank.com, and each member of the Nominating and Corporate Governance Committee is independent under the listing standards of the NASDAQ Stock Market. This charter is reviewed and, if warranted, revised annually. The Nominating and Corporate Governance Committee met one time during the fiscal year ended September 30, 2020.

The Nominating and Corporate Governance Committee identifies nominees by evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are first considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. If any member of the Board does not wish to continue in service, or if the Nominating and Corporate Governance Committee or the Board decides not to re-nominate a member for re-election, or if the size of the Board is increased, the Nominating and Corporate Governance Committee would solicit suggestions for director candidates from all Board members and may consider candidates submitted by stockholders. In addition, the Nominating and Corporate Governance Committee is authorized by its charter to engage a third party to assist in the identification of director nominees.

The Nominating and Corporate Governance Committee would seek to identify a candidate who at a minimum satisfies the following criteria:

• has the highest personal and professional ethics and integrity and whose values are compatible with those of the Company;

• has experiences and achievements that have given him/her the ability to exercise and develop good business judgment;

• is willing to devote the necessary time to the work of the Board and its committees, which includes being available for Board and committee meetings;

• is familiar with the communities in which the Company operates and/or is actively engaged in community activities; and

• is involved in other activities or interests that do not create a conflict with his/her responsibilities to the Company and its stockholders; and has the capacity and desire to represent the balanced, best interests of the stockholders of the Company as a group, and not primarily a special interest group or constituency.

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The Nominating and Corporate Governance Committee will also take into account whether a candidate satisfies the criteria for “independence” in accordance with the listing standards of the NASDAQ Stock Market, and, if a candidate with financial and accounting expertise is sought for service on the Audit Committee, whether the individual qualifies as an “audit committee financial expert.”

The Committee does not have a formal policy or specific guidelines regarding diversity among Board members, and generally views and values diversity from the perspective of professional and life experiences, as well as geographic location, representative of the markets in which we do business. The Committee recognizes that diversity in professional and life experiences may include consideration of gender, race, or national origin, in identifying individuals who possess the qualifications that the Committee believes are important to be represented on the Board.

Procedures for the Nomination of Directors by Stockholders

In addition to submitting candidates to the Board for consideration, a stockholder may nominate candidates for election as directors in accordance with Article 3.12 of the Company’s bylaws. Such stockholder’s notice shall set forth the following:

• the name, age, business address and residence address of the stockholder who intends to make the nomination and of the person or persons to be nominated;

• the principal occupation or employment of the stockholder submitting the notice and of each person being nominated;

• the class and number of shares of the Company’s stock which are beneficially owned by the stockholder submitting the notice;

• a representation that the stockholder is and will continue to be a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;

• a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder;

• such other information regarding the stockholder submitting the notice, each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission; and

• the consent of each nominee to serve as a director of the Company if so elected.

Stockholder Communications with the Board

A stockholder of the Company who wants to communicate with the Board or with any individual director can write to the Chair of the Nominating and Corporate Governance Committee at ESSA Bancorp, Inc., 200 Palmer Street, Stroudsburg, Pennsylvania 18360. The letter should indicate that the author is a stockholder and if shares are not held of record, should include appropriate evidence of stock ownership. Depending on the subject matter, the Chair will:

• forward the communication to the director(s) to whom it is addressed;

• handle the inquiry directly, for example, where it is a request for information about the Company or it is a stock-related matter; or

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• not forward the communication if it is primarily commercial in nature, relates to an improper or irrelevant topic, or is unduly hostile, threatening, illegal or otherwise inappropriate.

At each Board meeting, the Chair of the Nominating and Corporate Governance Committee shall present a summary of all communications received since the last meeting and make those communications available to the directors upon request.

Audit Committee

The Audit Committee currently consists of Messrs. Regan (Chair), and Durkin and Ms. Gordon. The Audit Committee is responsible for providing oversight relating to our financial statements and financial reporting process, systems of internal accounting and financial controls, internal audit function, annual independent audit and the compliance and ethics programs established by management and the Board. Each member of the Audit Committee is independent in accordance with the listing standards of the NASDAQ Stock Market and under Securities and Exchange Commission Rule 10A-3. The Board of Directors determined that Mr. Regan qualified as an “audit committee financial expert” as that term is defined in the rules and regulations of the Securities and Exchange Commission. The Audit Committee met four times during the fiscal year ended September 30, 2020.

Our Audit Committee operates under a written charter, which is available at our website at www.essabank.com. The duties and responsibilities of the Audit Committee include, among other things:

• overseeing the integrity of the Company’s financial statements;

• overseeing the Company’s compliance with legal and regulatory requirements;

• overseeing the independent registered public accountant’s qualifications and independence;

• overseeing the performance of the Company’s internal audit function and independent registered public accountant; and

• overseeing the Company’s system of disclosure controls and system of internal controls regarding finance, accounting, and legal compliance.

The Audit Committee reports to the Board of Directors on its activities and findings.

Audit Committee Report

Management has the primary responsibility for the Company’s internal controls and financial reporting process. The independent registered public accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board and issuing an opinion thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. As part of its ongoing activities, the Audit Committee has:

• reviewed and discussed with management and the independent registered public accountants the Company’s audited consolidated financial statements for the fiscal year ended September 30, 2020;

• met with the Company’s CEO, CFO, internal auditors and the independent registered public accountants, both together and in separate executive sessions, to discuss the scope and the results of the audits and the overall quality of the Company’s financial reporting and internal controls;

• discussed with the independent registered public accountants the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission;

• received the written disclosures and the letter from the independent registered public accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accountants’ communications with the Audit Committee concerning independence, and discussed with the independent registered public accountants its independence from the Company; and

• pre-approved all audit, audit related and other services to be provided by the independent registered public accountants.

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Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 be filed with the Securities and Exchange Commission.

The Audit Committee

Brian T. Regan (Chair) Joseph S. Durkin Christine Davis Gordon

Transactions with Certain Related Persons

Loans and Extensions of Credit. The Sarbanes-Oxley Act of 2002 generally prohibits us from making loans to our executive officers and directors, but it contains a specific exemption from such prohibition for loans made by ESSA Bank & Trust to our executive officers and directors in compliance with federal banking regulations. Federal regulations require that all loans or extensions of credit to executive officers and directors of insured institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and must not involve more than the normal risk of repayment or present other unfavorable features. ESSA Bank & Trust is therefore prohibited from making any loans or extensions of credit to executive officers and directors at different rates or terms than those offered to the general public, except for loans made to executive officers under a benefit program maintained by ESSA Bank & Trust that is generally available to all other employees and that does not give preference to any executive officer over any other employee.

In addition, loans made to a director or executive officer must be approved in advance by a majority of the disinterested members of the Board of Directors. The aggregate amount of our loans to our officers and directors and their related entities was $1.2 million at September 30, 2020. As of September 30, 2020, these loans were performing according to their original terms.

Set forth below is certain information as to loans made by ESSA Bank & Trust to certain of its directors and executive officers, or their affiliates, pursuant to the loan program disclosed above, whose aggregate indebtedness to ESSA Bank & Trust exceeded $120,000 at any time since October 1, 2019. Unless otherwise indicated all of the loans are secured loans and all loans designated as residential loans are secured by the borrower’s principal place of residence.

Name of Individual	Loan Type	Date Originated		Original Loan Amount		Highest Balance Since October 1, 2019		Balance on September 30, 2020		Interest Rate
Gary S. Olson	Conventional Mortgage		11/19/17	$	424,100	$	411,049	$	402,813	3.80%
Robert C. Selig	Commercial Fixed		4/21/20	$	41,200	$	41,200	$	41,200	1.00%
	Automotive		4/27/16	$	63,988	$	20,799	$	7,723	1.54%
	Commercial Line of Credit		12/10/09	$	125,000	$	65,130	$	55,130	Prime
	Line of Credit		5/14/18	$	138,400	$	135,000	$	—	Prime plus 0.50%
Charles D. Hangen	Conventional Mortgage		6/7/12	$	352,500	$	287,999	$	276,999	3.75%
	Line of Credit		6/1/17	$	30,000	$	—	$	—	Prime minus 0.25%

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Employee, Officer and Director Hedging

The Board has adopted a policy that prohibits a director or executive officer from entering into any hedging, derivative or other equivalent transaction that is specifically designed to reduce or limit the extent to which declines in the trading price of the ESSA Bancorp common stock would affect the value of the shares of ESSA Bancorp common stock owned by the executive officer or director. This policy provides that examples of prohibited hedging transactions include (i) short sales of the ESSA Bancorp common stock (the practice of selling a security borrowed from another), (ii) buying put options or selling call options relating to the ESSA Bancorp common stock, (iii) selling security futures contracts relating to ESSA Bancorp common stock, (iv) entering into prepaid variable forward sale contracts, equity swaps, or zero cost collars relating to the ESSA Bancorp common stock, and (v) contributing ESSA Bancorp common stock to an exchange fund in exchange for an interest in the fund. Under the policy, executive officers and directors also are prohibited to pledge, hypothecate, or otherwise encumber shares of the ESSA Bancorp common stock as collateral for indebtedness, including holding such shares in a margin account.

ESSA Bancorp does not have anti-hedging policies or procedures that are applicable to its employees who are not executive officers and as such, hedging transactions by non-executive employees are not prohibited.

The information provided under this Employee, Officer and Director Hedging section shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that ESSA Bancorp specifically incorporates this information by reference.

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COMPENSATION MATTERS

Compensation Committee

Our Compensation Committee determines the salaries and other forms of compensation to be paid each year to the President and Chief Executive Officer and those executive officers who report directly to the President and Chief Executive Officer. The Compensation Committee currently consists of Ms. Weekes (Chair) and Messrs. Hosbach and Durkin. None of these individuals was an officer or employee of ESSA Bancorp or ESSA Bank & Trust during the fiscal year ended September 30, 2020, or is a former officer of ESSA Bancorp or ESSA Bank & Trust.

We provide our stockholders with an annual opportunity to provide an advisory vote FOR or AGAINST the compensation of our Named Executive Officers (collectively, the “NEOs” or “Named Executive Officers”). At last year’s annual meeting, a majority of our stockholders voted in favor of the compensation of our NEOs with approximately 92% of the votes cast approving the “say on pay” proposal. Although the say on pay vote is advisory and is not binding on our Board, the Compensation Committee is committed to understanding our shareholder views on our compensation program and seriously considers the outcome of the vote when making future executive compensation decisions. We have worked and will continue to work with outside independent advisors to ensure our programs follow best practices and are market competitive.

Executive Summary

In 2020, the Company used its strategic plan to continue its progress in transitioning to a high performing, more efficient and diversified community bank despite the volatile environment created by the coronavirus pandemic, which significantly impacted the Company’s business operations. Our strategic plan focused on regionalizing our banking teams, making operational enhancements to support productivity, analyzing facilities and business lines to maximize efficiency and implementing new technologies to support decision making. Building shareholder value through improved earnings remains our primary focus.

Company Performance. For the fiscal year ended September 30, 2020:

• The Company reported net income of $14.4 million, or $1.39 per diluted share for the fiscal year ended September 30, 2020 compared to $12.6 million or $1.18 per diluted share for the fiscal year ended September 30, 2019.

• The Company’s noninterest income for the year ended September 30, 2020, net of a deleveraging strategy gain realized in the fourth fiscal quarter of 2020, increased by 31.29% compared to the fiscal year ended September 30, 2019.

• The Company’s operating expenses, net of a $2.5 million prepayment expense realized as part of the deleveraging strategy mentioned above, increased by just 0.08% for fiscal year 2020 compared to fiscal year 2019 and the Company’s efficiency ratio improved to 65.80% for fiscal year 2020 compared to 68.42% for fiscal year 2019.

• The Company’s return on average assets and return on average equity (which were important drivers for 2020 executive compensation payments), respectively, were 0.76% and 7.43% for the 2020 fiscal period compared to 0.69% and 6.80% for the prior fiscal year.

• Total assets were $1.9 billion at September 30, 2020 compared with $1.8 billion a year earlier, primarily reflecting additional cash and cash equivalents and increased net loans.

• Total net loans at September 30, 2020 were $1.42 billion compared with $1.33 billion at September 30, 2019, primarily reflecting organic growth in residential and commercial loans and the addition of approximately $77 million in Paycheck Protection Program (“PPP”) loans. Annual loan growth was partially offset by declines in indirect auto loan balances of $42.2 million as the Company continued exiting this business and the sale of $30.3 million longer term residential mortgage loans.

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• The Company maintained its focus on credit quality and increased its loan loss provision based on economic conditions. Non-performing assets were 1.09% of total assets at September 30, 2020 compared with 0.57% of total assets at September 30, 2019. The allowance for loan losses was 1.07% of loans outstanding at September 30, 2020 compared with 0.94% at September 30, 2019.

• Total deposits were $1.54 billion at September 30, 2020 up 15.00% compared with $1.34 billion at September 30, 2019.

• Tangible book value per share at September 30, 2020 increased 5.38% to $16.26 compared with $15.43 at September 30, 2019.

• Also, during fiscal year 2020 the Company:

• Implemented a successful remote work model for 90% of our non-branch employee base driven by a desire to protect customers and employees.

• Reduced or waived deposit related fees and provided loan payment relief, for a limited time, for businesses and individuals negatively impacted by the coronavirus pandemic.

• Assisted small businesses in Eastern Pennsylvania by making 673 PPP loans totaling $77.67 million.

• Completed its eighth share buyback program.

• Authorized a ninth share buyback program for the purchase of up to 500,000 shares.

• Entered into a new broker-dealer partnership with Ameriprise Financial Services.

2020 Compensation Decisions. Considering numerous factors including the Company’s performance, performance of individual executives, the external market and a variety of internal factors the following compensation actions were taken for the fiscal year ended September 30, 2020:

• Approved 2020 base salary increases of 5% for Messrs. Olson and Hangen and 3% for Mr. Muto effective at the beginning of the Company’s fiscal 2020 year to reflect performance and achieve better alignment with peers.

• Approved 2021 base salary increases of 7% for Mr. Olson and 4% for Messrs. Hangen and Muto effective at the beginning of the Company’s fiscal 2021 year to reflect performance and achieve better alignment with its peers.

• Approved the fiscal year 2021 Executive/Management Annual Incentive Plan metric – achievement of ROA goal relative to the Company’s budgeted goal. This plan metric is unchanged from 2020. In light of the volatile environment created by the coronavirus pandemic, which impacted the Company’s business operations and stock price, and based on the Company’s fiscal year 2020 performance, it was determined that the fiscal year 2020 payout would be at 100.0% of the Executive/Management Annual Incentive Plan’s target payout in order to continue to appropriately align compensation opportunities with the Company’s current goals and to ensure a stable workforce, despite an ROA of 0.76% vs. goal of 0.79%.

• Approved the fiscal year 2021 Long-Term Incentive Plan metrics with no change from the prior year, achievement of ROE (weighted 65% of total goal) and Efficiency Ratio (weighted 35% of total goal) goals relative to budgeted goals. Based on the Company’s fiscal year 2020 performance, and for the same reasons as described immediately above, it was determined that the Long-Term Incentive Plan fiscal year 2020 payout would be at 100.0% of the Plan’s target payout based upon ROE of 7.43% vs performance target of 7.44% and Efficiency Ratio of 65.80% vs performance target of 67.83% in order to continue to appropriately align compensation opportunities with the Company’s current goals and to ensure a stable workforce.

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Governance Practices & Policies

Our pay practices emphasize good governance and market practice.

We do	We do not
✓  Place significant emphasis on variable compensation, which includes cash and equity awards that are entirely dependent on the achievement of financial goals	X  Offer compensation-related tax gross-ups including Section 280G gross-ups
✓  Use performance-related long-term compensation	X  Have any excessive perquisites
✓  Have stock ownership requirements for executives and directors	X  Re-price stock options
✓  Have an executive compensation clawback policy to ensure accountability	X  Have single-trigger equity vesting
✓  Have an independent compensation consultant advising the Compensation Committee	X  Allow hedging of Company stock
✓  Responsibly manage the use of equity compensation ✓  Conduct periodic compensation risk reviews to ensure our programs do not motivate employees to take unnecessary risk ✓  Have double-trigger equity vesting	X  Allow pledging of Company stock

Executive Compensation Objectives and Philosophy

The primary objectives of the Company’s executive compensation program are the following:

• Institute pay programs that align executive interests with stockholder value creation

• Align compensation with the external market in order to enable the Company to attract, motivate and retain key executive talent

• Link pay and performance

• Balance risk and reward in order to mitigate unnecessary risk to the Company by avoiding certain compensation practices that may incentivize risk

• Be appropriate from both an internal (company) and external (market) perspective

To achieve these objectives, the Company has structured the NEO compensation program in the following manner:

• Salary levels and merit increases that reflect position responsibilities, competitive market rates, strategic importance of the position and individual performance.

• Annual cash incentive (i.e., bonus) payments that are based on the Company’s annual financial performance, as approved by the Compensation Committee, and achievement of certain strategic non-financial performance objectives. The Compensation Committee has the discretion to take into consideration extraordinary items that affect income gain, expense or loss and other factors it may deem relevant.

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• Long-term equity-based incentives that reward outstanding performance with incentives that focus our management team on creating stockholder value over the long term. By increasing the equity holdings of our NEOs, we provide them with a continuing stake in our long-term success. Performance-based targets were set for determining the size of a portion of the grants of restricted stock made for the fiscal year, coupled with a four-year vesting schedule for such awards.

• Benefit programs that provide all of our employees, including the NEOs, with access to health and welfare benefits. All of our employees are also eligible to participate in retirement plans sponsored by the Company. Our benefit programs are designed to be competitive with our peers. To support these objectives, our total compensation (sum of base salary, annual incentive, long-term incentives) and benefits package for our NEOs are generally positioned around median competitive levels for commensurate performance, taking into account the relative responsibilities of our NEOs. Actual total compensation in any given year may be above or below the target level and market median, based on individual and corporate performance.

Compensation Decision Process

The Compensation Committee is responsible for establishing and overseeing the executive compensation program, annually reviewing and approving the compensation of the CEO and reviewing and approving the CEO’s recommendations regarding the compensation of the other NEOs. The Compensation Committee considers external market data when determining changes in compensation of the NEOs, and weighs a variety of different factors in its deliberations.

The CEO does not play any role in the Compensation Committee’s determination of his own pay. When appropriate, the Compensation Committee meets in executive session absent the CEO. The Compensation Committee does, however, solicit input from the CEO concerning the performance and compensation of the other NEOs. The CEO bases his recommendations on his assessment of each individual’s performance, external market pay practices, retention risk and the Company’s overall pay philosophy. All NEO compensation decisions are ultimately made by the Compensation Committee.

Role of Compensation Consultant

The Compensation Committee engaged the services of Mosteller & Associates to serve as an independent compensation consultant to assist it in evaluating executive compensation programs and in making determinations regarding executive officer compensation. The independent compensation consultant reports directly to the Compensation Committee and is available to advise the Compensation Committee. In addition to providing executive compensation consulting to the Compensation Committee, the consultant provided limited associated services to the Company. This work was done with the prior knowledge and approval of the Compensation Committee and was not in conflict with the services provided to the Committee. The independent compensation consultant has certified to the Compensation Committee that they are “independent” within the meaning of applicable laws, regulations and stock exchange requirements.

Assessing Competitive Practice (Peer Groups)

In order to ensure that the Company is providing a competitive executive compensation program that will attract and retain key executive talent, the Company conducts a market-based compensation analysis annually. The Company conducts this market analysis with the assistance of our independent compensation consultant using two types of market data:

• Peer group data: The Compensation Committee used the pay levels and compensation practices of a 20-company peer group to guide decisions regarding pay levels for fiscal year 2020, as determined with the assistance of the independent compensation consultant. This peer group includes companies similar in asset size, geographic region and within the same industry as the Company.

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• Survey data: The Compensation Committee also considered third-party compensation data surveys that focused on banks that were similar to the Company in asset size and geographic region since we believe that our most direct competitors for executive talent are not necessarily limited to the companies included in our peer group. The Compensation Committee does not materially rely upon data from any individual company participating in any of the surveys in making compensation decisions.

Elements of the Compensation Package and 2020 Pay Outcomes

Our total compensation package primarily consists of base salaries, annual incentives and long-term incentives. We also provide modest but competitive benefits available to all employees in addition to limited retirement benefits.

Base Salaries. Executive officer base salary levels are evaluated by the Compensation Committee on an annual basis. In general, salary ranges are developed considering the results of the independent review of the competitiveness of the total compensation program for the position, as well as overall importance of each position within the organization. The Compensation Committee then takes into consideration the NEO’s performance and contribution to the long-term goals of the Company, leadership, operational effectiveness and experience in the industry, overall competitiveness with market levels, as well as recent operating results, performance targets and other relevant factors.

Fiscal Year 2020 Base Salaries

The Committee approved 2020 base salary increases of 5% for Messrs. Olson and Hangen and 3% for Mr. Muto effective at the beginning of the Company’s fiscal 2020 year to reflect performance and achieve better alignment with its peers.

Name	2020 Salary		2019 Salary		Percent Change
Gary S. Olson	$	463,050	$	441,000		5.0	%
Allan A. Muto	$	241,823	$	234,780		3.0	%
Charles D. Hangen	$	248,976	$	237,120		5.0	%

Fiscal Year 2021 Base Salaries

Base salaries for Named Executive Officers were increased for 2021. Mr. Olson received an annual base salary increase of $32,414 (7.00%) which was effective beginning in the Company’s fiscal 2021 year. Mr. Muto received an annual base salary increase of $9,673 (4.00%) which was effective beginning in the Company’s fiscal 2021 year. Mr. Hangen received an annual base salary increase of $9,959 (4.00%) which was effective beginning in the Company’s fiscal 2021 year.

Annual Incentives. The ESSA Bank & Trust Executive/Management Annual Incentive Plan is a cash bonus plan designed to motivate and reward participants, including the NEOs, for their contribution to the Company and for achieving annual financial goals. The Compensation Committee established bonus targets for each NEO as a percentage of base salary. For 2020, actual bonuses were paid out at 100.0% of target as follows:

Name	Target Bonus %			Actual Bonus as % of Base Salary			Actual Bonus Paid in Cash
Gary S. Olson		50	%		50	%	$	231,271
Allan A. Muto		40	%		40	%	$	96,664
Charles D. Hangen		45	%		45	%	$	111,781

The Company’s Executive/Management Annual Incentive Plan is a formulaic annual incentive plan based on the Company’s achievement of ROA goals relative to the Company’s budgeted ROA goals. In light of the volatile environment created by the coronavirus pandemic, which impacted the Company’s business operations and stock price, and based on the Company’s fiscal year 2020 performance, it was determined that the fiscal year 2020 payout would be at 100.0% of the Executive/Management Annual Incentive Plan’s target payout in order to continue to appropriately align compensation opportunities with the Company’s current goals and to ensure a stable workforce, despite an ROA of 0.76% vs. goal of 0.79%.

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Long-Term Incentive Compensation. To further align the Company’s compensation program with Company performance, the Company utilizes performance-based restricted stock awards to NEOs in combination with time-based restricted stock awards. The value of the long-term grants for 2020 was determined based on a number of factors, including the level of the executive’s responsibilities, competitive market practice and the executive’s performance leading up to the date of the grant. The 2020 long-term grants were split into two components:

• 50% of the award value is granted in the form of time-based restricted stock, 25% of which vested at the end of fiscal year 2020, with an additional 25% vesting annually on September 30, 2021, 2022 and 2023, respectively. At each vesting date, awards are issued as Company common stock. The primary objective of the time-based restricted stock award is to reward employee contributions and encourage continued employment (retention) with the Company.

• Beginning in 2020, 50% of the award value is granted in the form of performance-based awards subject to achievement of performance criteria over a one-year performance period, 25% of which vested at the end of fiscal year 2020, with an additional 25% vesting annually on September 30, 2021, 2022 and 2023, respectively. At each vesting date, awards are settled in cash. Prior to 2020, 50% of the award value was granted in the form of performance-based restricted stock subject to achievement of performance criteria over a one-year performance period, 25% of which vested at the end of fiscal year in which the grant was made, with an additional 25% vesting annually on each of the subsequent three years. At each vesting date, awards are settled in cash.

• Executives can earn between 0% and 150% of the performance-based award granted based upon the Company’s ROE and efficiency ratio performance over a one-year period (achievement will be interpolated between the various performance points described below), as adjusted by the Committee pursuant to the plan.

• The primary objectives of the performance-based awards are to (i) reward the executive for the Company’s performance, (ii) align his or her financial interests with the long-term interests of the Company’s stockholders, and (iii) encourage the continued retention of the executive. This plan addresses the Company’s intent to incorporate a financial goal that was measurable and controllable by the Company’s management while acknowledging that multi-year performance goals are subject to changes in the market beyond the Company’s control.

• All performance-based awards will be settled in cash.

• 65% of the performance target for the fiscal year ending September 30, 2020 was an ROE of 7.44% (which was set by the Board at the beginning of the fiscal year), with a threshold performance of 5.95% (80% of the target level) and a maximum performance of 9.30% (1.25% of the target level). 35% of the performance target for the fiscal year ending September 30, 2019 was an efficiency ratio of 67.83%, with a threshold performance of 68.83% and a maximum performance of 65.83%.

• For the fiscal year 2020, the Company’s actual ROE was 7.43% and actual efficiency ratio was 65.80%. Based on the Company’s fiscal year 2020 performance, and in light of the volatile environment created by the coronavirus pandemic, which impacted the Company’s business operations and stock price, and based on the Company’s fiscal year 2020 performance it was determined that the Long-Term Incentive Plan fiscal year 2020 payout would be at 100.0% of the Plan’s target payout based upon ROE of 7.43% vs performance target of 7.44% and actual efficiency ratio of 65.80% vs performance target of 67.83% in order to continue to appropriately align compensation opportunities with the Company’s current goals and to ensure a stable workforce.

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Executives will forfeit any unvested restricted stock awards if their employment by the Company is terminated for any reason prior to vesting, except in the event of death, disability or involuntary termination following a change in control.

Other Compensation. While the majority of each NEO’s compensation packages are comprised of base salary, annual incentives and long-term incentives as discussed above, the Company does provide very limited benefits, which are discussed following our tabular disclosures on the pages that follow.

Other Compensation Policies and Guidelines

Stock Ownership Guidelines. To align the interests of the Company’s NEOs with the interests of the Company’s shareholders, the Company maintains stock ownership guidelines, where NEOs are required to own shares of common stock equal to a specified multiple of their annual base salary. The applicable levels are as follows:

CEO	3x salary
CFO	2x salary
Other NEOs	1x salary

NEOs have five years from the date of hire to meet these ownership requirements. As of September 30, 2020, all NEOs were in compliance with the Company’s stock ownership guidelines.

Clawback Policy. In accordance with our clawback policy and, as a condition to receiving incentive compensation, NEOs agree to return bonus and other incentive compensation paid by the Company (including cancellation of outstanding equity awards and reimbursement of any gains realized on such awards) if: (i) the payment or award was granted, earned or vested based in whole or in part on the attainment of a financial reporting measure (i.e., a measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements); (ii) there is an accounting restatement of financial statements due to material noncompliance with financial reporting requirements under the federal securities laws (a “Restatement”); and (iii) the amount of the bonus or incentive compensation, as calculated under the restated financial results, is less than the amount actually paid or awarded under the original financial results. Only incentive compensation that is paid during (or with respect to) the three years preceding a Restatement is subject to the foregoing clawback.

Anti-Hedging and Pledging Policy

Please see the disclosure provided above under the section entitled “Employee, Officer and Director Hedging.”

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Summary Compensation Table

The following table sets forth, for the fiscal years ended September 30, 2020 and 2019, certain information as to the total compensation paid to the Company’s President and Chief Executive Officer and the two other most highly compensated executive officers of the Company.

Summary Compensation Table
Name and principal position	Year		Salary ($)		Bonus ($)		Stock Awards ($)(1)		Non-Equity Incentive Plan Compensation ($)(2)		Nonqualified Deferred Compensation Earnings ($)(3)		All Other compensation ($)			Total ($)
Gary S. Olson		2020		463,050		—		100,011		331,282		—		56,324	(4)		950,667
President and Chief Executive Officer		2019		441,000		—		200,006		279,030		—		52,530			972,566
Allan A. Muto		2020		241,823		—		50,014		146,678		—		42,715	(5)		481,230
Executive Vice President and Chief Financial Officer		2019		234,780		—		100,002		118,854		—		40,880			494,516
Charles D. Hangen		2020		248,976		—		50,014		161,795		—		44,789	(6)		505,574
Executive Vice President, Chief Operating Officer		2019		237,120		—		100,002		140,189		—		43,412			520,723

(1) The amounts in this column reflect the aggregate grant date fair value of the restricted stock awards, subject to time-based vesting, computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in footnote 12 to our audited financial statements for the fiscal year ended September 30, 2020 included in our Annual Report on Form 10-K.

(2) For 2020, reflects the amount of $231,271, $96,664 and $111,781, respectively, paid to Messrs. Olson, Muto and Hangen, respectively, under the ESSA Bank & Trust Executive/Management Annual Incentive Plan and $100,011, $50,014, and $50,014, respectively, earned by Messrs. Olson, Muto and Hangen under the Long-Term Incentive Plan, of which only 25% of such amounts paid were paid to Messrs. Olson, Muto and Hangen in 2020. Amounts earned under the Long-Term Incentive Plan are subject to a vesting schedule, with 25% of the award vesting each year, commencing as of September 30, 2020. Accordingly, Messrs. Olson, Muto and Hangen were paid 25% or $25,000, $12,500 and $12,5000, respectively, of the amount shown in the Summary Compensation Table in fiscal year 2020 and the remaining amounts will be paid subject to the conditions of the vesting schedule. There is no guarantee that the non-vested portions will be paid to the named executive officers. For additional information see the description of the plans above under “Annual Incentives.”

(3) No “above-market earnings” were paid on deferred compensation.

(4) Includes $19,753 for health insurance premiums; $434 for dental insurance premiums; $55 for vision insurance premiums; $8,696 for life insurance premiums and benefits; $1,035 for long term disability insurance premiums; $6,567 for personal use of a bank owned automobile; 401(k) match of $13,492 and $6,292 for dividends on unvested stock awards.

(5) Includes $13,758 for health insurance premiums; $434 for dental insurance premiums; $55 for vision insurance premiums; $4,917 for life insurance premiums and benefits; $832 for long term disability insurance premiums; $9,908 for personal use of a bank owned automobile; 401(k) match of $9,667 and $3,144 for dividends on unvested stock awards.

(6) Includes $19,753 for health insurance premiums; $434 for dental insurance premiums; $55 for vision insurance premiums; $1,495 for life insurance premiums and benefits; $856 for long term disability insurance premiums, $9,000 for an automobile allowance; 401(k) match of $9,948 and $3,248 for dividends on unvested stock awards.

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Outstanding Equity Awards at Fiscal Year-End. The following table sets forth information with respect to our outstanding equity awards as of September 30, 2020 for our Named Executive Officers.

			Outstanding Equity Awards at Fiscal Year End September 30, 2020
			Option Awards						Stock Awards
Name	Grant Date		Number of securities underlying unexercised options (#) unexercisable/ Exercisable		Option exercise price ($)		Option expiration date		Number of shares or units of stock that have not vested		Market value of shares or units of stock that have not vested ($)(1)(2)
Gary S. Olson, President and Chief Executive Officer		12/6/17		—		—		—		1,183		14,586
		12/6/17		—		—		—		592		7,299
		10/1/18		—		—		—		3,077		37,939
		10/1/18		—		—		—		3,877		47,803
		10/1/19		—		—		—		4,693		57,865
Allan A. Muto, Executive Vice President and Chief Financial Officer		12/6/17		—		—		—		592		7,299
		12/6/17		—		—		—		295		3,637
		10/1/18		—		—		—		1,539		18,976
		10/1/18		—		—		—		1,939		23,908
		10/1/19		—		—		—		2,320		28,606
Charles D. Hangen, Senior Vice President, Chief Operating Officer		12/6/17		—		—		—		670		8,261
		12/6/17		—		—		—		335		4,131
		10/1/18		—		—		—		1,539		18,976
		10/1/18		—		—		—		1,939		23,908
		10/1/19		—		—		—		2,320		28,606

(1) All restricted stock awards vest at a rate of 25% per year, with the first vesting commencing at the end of the fiscal year during which the grant was received.

(2) Based on the market price of the Company’s common stock of $12.33 on September 30, 2020.

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Other Benefit Plans and Agreements

Employment Agreements. ESSA Bancorp has entered into employment agreements with each of the Named Executive Officers. The agreements have an initial term of three years and renew annually unless notice of non-renewal is provided. All employment agreements have renewed annually. Under the agreements, as of September 30, 2020, the base salaries for Messrs. Olson, Muto and Hangen are $495,464, $251,496 and $258,935, respectively. Base salaries will be reviewed at least annually and may be increased, but not decreased. In addition to the base salary, each agreement provides for, among other things, participation in bonus programs and other employee pension benefit and fringe benefit plans applicable to executive employees and use of an automobile (in the case of Mr. Olson). The executive’s employment may be terminated for cause at any time, in which event the executive would have no right to receive compensation or other benefits for any period after termination.

Each of the executives is entitled to severance payments and benefits in the event of his or her termination of employment under specified circumstances. In the event the executive’s employment is involuntarily terminated without cause or the executive voluntarily resigns within 90 days following (1) the failure to elect or reelect or to appoint or reappoint the executive to his or her executive position or a material change in the executive’s functions, duties, or responsibilities, which change would cause executive’s position to become one of lesser responsibility, importance or scope; (2) the relocation of executive’s principal place of employment to a location that is more than 50 miles from the location of ESSA Bank & Trust’s principal executive offices (or in the case of Mr. Hangen, 50 miles from his place of principal employment) as of the date of the agreement; (3) a material reduction in benefits and perquisites including base salary (except for any bank-wide or officer-wide reduction); (4) the liquidation or dissolution of ESSA Bancorp or ESSA Bank & Trust; or (5) a breach of the employment agreement by ESSA Bancorp (collectively, a “Good Reason”), the executive would be entitled to a severance payment equal to three times (in the case of Messrs. Olson and Muto) or two times (for Mr. Hangen) the sum of the executive’s base salary and the highest rate of bonus awarded to the executive during the prior three years (for Messrs. Olson and Muto) or the highest target bonus opportunity that was or could have been paid to Mr. Hangen with respect to the two completed fiscal years prior to the year in which the termination of employment occurred, payable in a lump sum within 30 days following the termination date, unless a 6-month delay in payment is required in order to comply with Internal Revenue Code Section 409A. In addition, the executive would be entitled, at ESSA Bancorp’s sole expense, to the continuation of life, medical, dental and vision coverage for 36 months (in the case of Messrs. Olson and Muto) or 24 months (for Mr. Hangen) after termination of the agreement. The executive would also receive a lump sum payment of the excess, if any, of the present value of the benefits he or she would be entitled to under the ESSA Bancorp or ESSA Bank & Trust’s defined benefit pension plan if the executive had continued working for ESSA Bancorp for 36 months (in the case of Messrs. Olson and Muto) or 24 months (for Mr. Hangen) over the present value of the benefits to which the executive is actually entitled as of the date of termination. In the event that the severance payment provisions of the employment agreement were triggered for one of the covered executives at September 30, 2020, the executive would be entitled to a cash severance benefit in the amount of approximately $2.5 million, $1.3 million, and $823,000, in the case of Messrs. Olson, Muto and Hangen, respectively.

If the executive’s employment is involuntarily terminated without cause or the executive voluntarily resigns for Good Reason within 24 months following a change in control, the executive would be entitled to the same severance and benefits described in the above paragraph, except Mr. Hangen’s severance multiplier described above increases from two to three; however, such payments may be reduced due to Section 280G of the Internal Revenue Code. The employment agreements for the Named Executive Officers provide for a reduction in the amount of any payments made in connection with a change in control which would otherwise constitute “excess parachute payments” under Section 280G of the Internal Revenue Code. The total payment owed to the executive upon a change in control will be reduced to an amount that is $1.00 less than the amount that would otherwise be an “excess parachute payment” under Code Section 280G.

Upon termination of the executive’s employment other than in connection with a change in control, the executive agrees not to compete with ESSA Bancorp for one year following termination of employment within 50 miles of any existing branch of ESSA Bank & Trust or 50 miles of any office for which ESSA Bank & Trust or a subsidiary has filed an application for regulatory approval.

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In the event the executive becomes disabled, ESSA Bancorp would continue to pay the executive his or her base salary for the longer of the remaining term of the agreement or one year, provided that any amount paid to the executive pursuant to any disability insurance would reduce the compensation the executive would receive and will provide life insurance, medical, dental and vision coverage until the earlier of executive’s return to employment, age 65 or death. In the event that the disability benefit provisions of the employment agreement were triggered for one of the covered executives at September 30, 2020, the executive would be entitled to cash disability benefits in an amount up to approximately $1.4 million, $725,000 and $498,000 in the case of Messrs. Olson, Muto and Hangen, respectively. In the event the executive dies while employed by ESSA Bancorp, the executive’s estate will be paid the executive’s base salary for one year and the executive’s family will be entitled to continuation of medical, dental and vision benefits for one year after the executive’s death. In the event that the death benefit provisions of the employment agreement were triggered for one of the covered executives at September 30, 2020, Messrs. Olson, Muto and Hangen’s beneficiaries would be entitled to a cash payment in the amount of approximately $489,000, $263,000, and $274,000, respectively.

Long-Term Incentive Plan. On December 13, 2019, ESSA Bank & Trust adopted the ESSA Bank & Trust Performance Based Long-Term Incentive Plan for Executives and Management (“LTIP”), which provides for the grant of cash-settled performance based awards. The LTIP does not represent an added component of executive and management compensation but rather a restructuring of a component that was previously administered through the 2016 Equity Incentive Plan. Upon adoption of the LTIP, cash-settled awards are no longer granted under the 2016 Equity Incentive Plan. As in the past, the Compensation Committee will annually determine the performance metrics and terms of the long-term incentive awards. Awards are subject to the achievement of performance criteria over a one-year performance period, payable over four years, and a participant must be employed as of the applicable payment date to receive a payment. At each payment date, awards are settled in cash and the awards under the LTIP are subject to the Company’s clawback policy.

Stock Award and Stock Option Program. Stockholders approved the ESSA Bancorp, Inc. 2016 Equity Incentive Plan (the “2016 Equity Plan”) on March 3, 2016. Under this plan, individuals may receive awards of Company common stock and grants of options to purchase Company common stock. The Compensation Committee believes that stock ownership provides a significant incentive in building stockholder value by further aligning the interests of our officers and employees with stockholders since such compensation is directly linked to the performance of the Company’s common stock. In addition, stock options and restricted stock awards granted to our Named Executive Officers generally vest over a four-year period, with accelerated vesting in the event of death, disability, involuntary termination of employment (other than for cause) of service following a change in control, thereby aiding retention.

Assuming that accelerated vesting occurred as of September 30, 2020 due to death, disability or an involuntary termination of employment (other than for cause) following a change in control, based on the closing price per share of Company common stock on that date, the value of a reasonable estimate of the awards made to the Named Executive Officers for the fiscal year which ended on September 30, 2020 would be as follows: Mr. Olson would receive $165,000 in value for accelerated restricted stock; Mr. Muto would receive $82,000 in value for accelerated restricted stock and Mr. Hangen would receive $84,000 in value for accelerated restricted stock.

401(k) Plan. ESSA Bank & Trust maintains a non-standardized prototype 401(k) plan through Massachusetts Mutual Life Insurance Company. Employees may participate in the plan when they have attained age 21 and completed 60 days with at least 166 hours of service. Participants may make pre-tax salary deferrals to the plan not to exceed $19,500 (which is the 2021 limit; the limit is adjusted annually for IRS-announced cost-of-living increases), provided, however, that a participant over age 50 may contribute an additional $6,500 to the 401(k) plan. In addition to salary deferrals, the 401(k) plan provides that ESSA Bank & Trust will make an employer matching contribution equal to 100% of a participant’s salary deferral contribution, provided that such amount does not exceed 3% of a participant’s compensation, plus 50% of a participant’s salary deferral contribution that exceeds 3% but does not exceed 5% of a participant’s compensation earned during the plan year (for a total maximum employer matching contribution of 4% of a participant’s compensation). All contributions are 100% vested. Distributions will be made upon death, disability, termination of employment, or attainment of age 59-1/2. In addition to the other self-directed investment alternatives offered under the plan, participants are offered the opportunity to purchase stock in the Company through a unitized employer stock fund, consisting of approximately 95% stock and 5% cash. Benefits are paid in the form of lump sum.

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Employee Stock Ownership Plan. ESSA Bank & Trust sponsors the ESSA Bank & Trust Employee Stock Ownership Plan for the benefit of its employees. Employees who are at least 21 years old with at least one year of service during which the employee has completed at least 1,000 hours of service with ESSA Bank & Trust are eligible to participate. As part of ESSA Bank & Trust’s 2007 stock offering, the Employee Stock Ownership Plan trust borrowed funds from the Company and used those funds to purchase a number of shares equal to 8% of the common stock sold in the offering (1,358,472 shares). Collateral for the loan is the common stock purchased by the Employee Stock Ownership Plan. The loan will be repaid principally from ESSA Bank & Trust’s discretionary contributions to the Employee Stock Ownership Plan over a period of up to 30 years. The loan documents provide that the loan may be repaid over a shorter period, without penalty for prepayments. Shares purchased by the Employee Stock Ownership Plan will be held in a suspense account for allocation among participants as the loan is repaid.

Contributions to the Employee Stock Ownership Plan and shares released from the suspense account in an amount proportional to the repayment of the Employee Stock Ownership Plan loan will be allocated among Employee Stock Ownership Plan participants on the basis of compensation in the year of allocation. Participants will be 100% vested in benefits under the plan upon completion of three years of credited service, with credit given to participants for years of credited service with ESSA Bank & Trust’s mutual predecessor. A participant’s interest in his or her account under the plan will also fully vest in the event of termination of service due to a participant’s early or normal retirement, death, disability, or upon a change in control (as defined in the plan). Vested benefits will be payable in the form of common stock and/or cash. ESSA Bank & Trust’s contributions to the Employee Stock Ownership Plan are discretionary, subject to the loan terms and tax law limits. Therefore, benefits payable under the Employee Stock Ownership Plan cannot be estimated. Pursuant to generally accepted accounting principles, we are required to record compensation expense each year in an amount equal to the fair market value of the shares released or committed to be released from the suspense account.

Defined Benefit Pension Plan. ESSA Bank & Trust maintains an individually designed, tax-qualified defined benefit plan (the “Pension Plan”). ESSA Bank & Trust annually contributes an amount to the plan necessary to at least satisfy the minimum funding requirements established under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Effective February 28, 2017, ESSA Bank & Trust “froze” all future enrollments and benefit accruals under the Pension Plan.

Supplemental Executive Retirement Plan. ESSA Bank & Trust maintains a Supplemental Executive Retirement Plan (“Supplemental Retirement Plan”) for Mr. Olson.

The normal retirement benefit under the Supplemental Retirement Plan is an annual benefit equal to 70% of the executive’s highest average compensation (determined over a consecutive 5-year period within the last 10 years of employment) reduced by the sum of fifty-percent of annual social security benefits, annualized benefits payable under ESSA Bank & Trust’s tax-qualified defined benefit pension plan, and the annualized employer contributions to ESSA Bank & Trust’s 401(k) Plan and ESOP. Mr. Olson is fully vested in the normal retirement benefit and he is entitled to the present value of the normal retirement benefit, payable in a lump sum, following a termination of employment for a reason other than death or disability. If Mr. Olson terminates employment within two years following a change-in-control, the normal retirement benefit will also be paid in a lump sum. If Mr. Olson dies or becomes disabled while actively employed by us, the amount accrued under the Supplemental Retirement Plan as of the date of such death or disability will be paid to Mr. Olson (or his beneficiary in the event of death) in a lump sum. Lump sum payments are determined by assuming payments would otherwise be made for 16 years and using a discount rate that is discussed in Note 12 to the audited consolidated financial statements included in the Company’s 2020 Annual Report on Form 10-K.

If Mr. Olson’s employment terminated due to death, disability or change in control, respectively, on September 30, 2020, Mr. Olson would be entitled to $2.1 million , $2.1 million and $2.1 million, respectively.

We recorded an expense of $53,000 for the Supplemental Retirement Plan during the fiscal year ended September 30, 2020.

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Split Dollar Life Insurance Agreements. The Company has entered into split dollar life insurance agreements with Messrs. Olson, Hangen and Muto. Under the agreements, if the executive dies while employed by the Company, the executive’s beneficiary will receive four times the executive’s base salary (five times for Mr. Olson) in a lump sum. The Company has purchased bank-owned life insurance policies to fund these obligations. The Summary Compensation Table includes the value of these benefits.

Director Compensation

Each of the individuals who serves as a director of ESSA Bancorp also serves as a director of ESSA Bank & Trust and each non-employee director earns director and committee fees in that capacity. Each non-employee director (except for the Chairman of the Board) is paid a fee of $2,000 per month for their service and $1,000 for each Board meeting attended. In addition, the Chairperson of a committee is paid $750 for each committee meeting attended and an annual retainer of $4,000 in the case of the Audit Committee Chairperson and $2,000 each in the case of the Chairpersons of the Compensation Committee and Nominating and Corporate Governance Committee. Committee members are paid $500 for each committee meeting attended. In lieu of the above-mentioned fees, the Chairman of the Board is paid an annual retainer of $60,000 and $1,500 for each Board meeting attended. The Chairman of the Board is not compensated for attendance at any committee meetings.

ESSA periodically reviews its non-employee director compensation programs relative to market practices. In fiscal year 2020, ESSA conducted this market analysis with the assistance of Mosteller & Associates using pay levels and compensation practices of the same peer group used to benchmark pay for ESSA’s executive officers. Based on the review, Mosteller & Associates found that ESSA’s non-employee director board retainers and fees were aligned with the peer group, although there was an overall director compensation gap due to the absence of an equity compensation component. Based on a review of the peer group, the Compensation Committee granted each independent director a stock award of 1,000 shares of Company common stock in order to make overall director compensation more aligned with the peer group.

ESSA also has stock ownership guidelines for all non-employee directors. Under these ownership guidelines, directors are required to own shares of common stock equal to one and a half times the annual retainer paid to the directors. The annual retainer paid to non-employee directors (except for the Chairman of the Board) as of September 30, 2020 is $24,000. New directors have five years to meet this requirement. As of September 30, 2020, all non-employee directors who have served as directors of the Company for five years or more have met this requirement.

The following table sets forth the total fees received by the non-management directors during the fiscal year ended September 30, 2020:

Name	Fees earned or paid in cash ($)		Stock Award Grants ($)		All other compensation(2) ($)		Total ($)
Daniel J. Henning		39,750		16,260		82		56,092
Elizabeth B. Weekes		39,700		16,260		48		56,008
Robert C. Selig, Jr.		76,500		16,260		119		92,879
Brian T. Regan(1)		42,000		16,260		51		58,311
Philip H. Hosbach IV		36,500		16,260		—		52,760
Joseph S. Durkin		39,250		16,260		—		55,510
Christine Davis Gordon		39,250		16,260		—		55,510

(1) Mr. Regan’s term as a member of the Board of Director will end effective as of the 2021 Annual Meeting and he is not standing for reelection.

(2) For each director, other than Messrs. Durkin and Hosbach and Ms. Gordon, the Company maintains life insurance arrangements providing for a death benefit of $100,000. Amounts shown reflect the amount related to the life insurance arrangements.

Split Dollar Life Insurance Agreements. The Company entered into split dollar life insurance agreements with all of its directors except Messrs. Hosbach and Durkin and Ms. Gordon. Under the agreements, when the director dies, the director’s beneficiary will receive $100,000 in a lump sum. The Company has purchased bank-owned life insurance policies to fund these obligations. The Company also pays each director (other than Messrs. Hosbach and Durkin and Ms. Gordon) an annual cash bonus equal to the value of the taxes the director must pay on the imputed value of the life insurance coverage.

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PROPOSAL II – RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTANTS

The Company’s independent registered public accountants for the fiscal year ended September 30, 2020 was S.R. Snodgrass, P.C. (“Snodgrass”). The Audit Committee of the Board has approved the engagement of Snodgrass to be the Company’s independent registered public accountants for the fiscal year ending September 30, 2021, subject to the ratification of the appointment by the Company’s stockholders at the Annual Meeting.

Stockholder ratification of the selection of Snodgrass is not required by the Company’s Bylaws or otherwise. However, the Board will submit the selection of the independent registered public accountants to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection of Snodgrass, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee may, at its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such change is in the best interests of the Company and its stockholders.

Fees Paid to Snodgrass

Set forth below is certain information concerning aggregate fees for professional services rendered by Snodgrass during fiscal years 2020 and 2019.

Audit Fees. The aggregate fees billed to the Company by Snodgrass for professional services rendered for the audit of the Company’s annual consolidated financial statements, review of the consolidated financial statements included in the Company’s annual report on Form 10-K and services that are normally provided by Snodgrass in connection with statutory and regulatory filings and engagements were $227,723 and $239,633 during fiscal 2020 and 2019, respectively.

Audit Related Fees. The aggregate fees billed to the Company by Snodgrass for assurance and related services rendered that are reasonably related to the performance of the audit of and review of the consolidated financial statements and that are not already reported in “Audit Fees” above, were $30,062 and $31,454 during fiscal 2020 and 2019, respectively. These services were primarily related to the audits of the Company’s employee benefit plans.

Tax Fees. The aggregate fees billed to the Company by Snodgrass for professional services rendered for tax compliance were $23,600 and $23,340 during fiscal 2020 and 2019, respectively.

Other Fees. The aggregate fees billed to the Company by Snodgrass for professional services rendered for facilitation of strategic planning were $16,000 and $37,166 during fiscal 2020 and 2019, respectively.

Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Registered Public Accountants

The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent registered public accountants. These services may include audit services, audit-related services, tax services and other services. Pre-approval is provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is subject to a specific budget. The Audit Committee has delegated pre-approval authority to its Chair when necessary, with subsequent reporting to the Audit Committee. The independent registered public accountants and management are required to report to the Audit Committee quarterly regarding the extent of services provided by the independent registered public accountants in accordance with this pre-approval policy, and the fees for the services performed to date.

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Required Vote and Recommendation of the Board

In order to ratify the appointment of Snodgrass as independent registered public accountants for fiscal 2021, the proposal must receive the affirmative vote of at least a majority of the votes cast at the Annual Meeting, either at the virtual Annual Meeting or by proxy.

THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF SNODGRASS AS INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS.

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PROPOSAL III – ADVISORY VOTE ON EXECUTIVE COMPENSATION

The compensation of our Principal Executive Officer and our two other most highly compensated executive officers of ESSA Bancorp (“Named Executive Officers”) is described in “PROPOSAL I—ELECTION OF DIRECTORS—Executive Compensation.” Stockholders are urged to read the Executive Compensation section of this Proxy Statement, which discusses our compensation policies and procedures with respect to our Named Executive Officers.

Based on the information and rationale contained in this Proxy Statement, included among other things our performance-driven compensation program, our risk-management, and our adherence to best governance practices, we believe stockholders should vote in favor of the compensation program.

Stockholders will be asked at the Annual Meeting to provide their support with respect to the compensation of our Named Executive Officers by voting on the following advisory, non-binding resolution:

RESOLVED, that the stockholders of ESSA Bancorp, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s Named Executive Officers described in the Executive Compensation section of the Proxy Statement.

This advisory vote, commonly referred to as a “say-on-pay” advisory vote, is non-binding on the Board of Directors. Although non-binding, the Board of Directors and the Compensation Committee value constructive dialogue on executive compensation and other important governance topics with our stockholders and encourages all stockholders to vote their shares on this matter. The Board of Directors and the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding our executive compensation programs.

Unless otherwise instructed, validly executed proxies will be voted “FOR” this resolution.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RESOLUTION SET FORTH IN PROPOSAL III.

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STOCKHOLDER PROPOSALS FOR THE 2022 ANNUAL MEETING

In order to be eligible for inclusion in the proxy materials for next year’s Annual Meeting of Stockholders, any stockholder proposal to take action at such meeting must be received at the Company’s Executive Office, 200 Palmer Street, Stroudsburg, Pennsylvania 18360, no later than September 27, 2021. Any such proposals shall be subject to the requirements of the proxy rules adopted under the Exchange Act.

Advance Notice of Business to be Conducted at an Annual Meeting

Under our Bylaws, a stockholder must follow certain procedures to nominate persons for election as directors or to introduce an item of business at a meeting of stockholders. These procedures provide, generally, that stockholders desiring to make nominations for directors, or to bring a proper subject of business before the meeting, must do so by a written notice timely received 120 days prior to the date of the prior year’s proxy statement. For the annual meeting of stockholders to be held in 2022, this deadline is September 27, 2021.

Nothing in this paragraph shall be deemed to require us to include in our proxy statement and proxy relating to an annual meeting any stockholder proposal that does not meet all of the requirements for inclusion established by the Securities and Exchange Commission in effect at the time such proposal is received.

OTHER MATTERS

The Board is not aware of any business to come before the Annual Meeting other than the matters described above in this proxy statement. However, if any matters should properly come before the Annual Meeting, it is intended that holders of the proxies will act in accordance with their best judgment.

The Audit Committee Report included in this proxy statement shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference. The Audit Report shall not otherwise be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission under such Acts.

An additional copy of the Company’s annual report on Form 10-K for the year ended September 30, 2020, will be furnished without charge upon written or telephonic request to Stephanie Lefferson, Corporate Secretary, 200 Palmer Street, Stroudsburg, Pennsylvania, 18360 or call (570) 421-0531.

Stroudsburg, Pennsylvania	Stephanie Lefferson
January 25, 2021	Corporate Secretary

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		Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card.
			Online Go to www.investorvote.com/ESSA or scan the QR code – login details are located in the shaded bar below.
			Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.	☒		Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/ESSA

q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q

A	Proposals — The Board of Directors recommends a vote FOR all the nominees listed, FOR Proposal 2, and FOR Proposal 3.
		+

1.	Election of Directors for a three-year term to expire in 2024:
		For	Withhold		For	Withhold
	01 - Robert C. Selig, Jr.	☐	☐	02 - Philip H. Hosbach, IV	☐	☐

		For	Against	Abstain			For	Against	Abstain
2.	The ratification of the appointment of S.R. Snodgrass, P.C. as the Company’s independent registered public accountants for the fiscal year ending September 30, 2021.	☐	☐	☐	3.	The consideration of an advisory, non-binding resolution with respect to the executive compensation described in the Proxy Statement.	☐	☐	☐
To transact such other business as may properly come before the Annual Meeting, and any adjournment or postponement thereof.

  B   Authorized Signatures — This section must be completed for your vote to count. Please date and sign below.

Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.

Date (mm/dd/yyyy) — Please print date below.	Signature 1 — Please keep signature within the box.	Signature 2 — Please keep signature within the box.
/        /

⬛ 1  P  C  F +

03D5BD

2021 ESSA Bancorp, Inc. Annual Meeting of Stockholders

The 2021 Annual Meeting of Stockholders of ESSA Bancorp, Inc. will be held on

Thursday, March 4, 2021, at 10:00 a.m. Eastern Standard Time virtually via the internet at www.meetingcenter.io/277474950

To access the virtual meeting, you must have the information that is printed in the shaded bar

located on the reverse side of this form.

The password for this meeting is — ESSA2021

Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders.

The Annual Meeting Materials are available at: www.essabank.com/proxy

  Small steps make an impact.   Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/ESSA  

q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q

      Proxy — ESSA Bancorp, Inc.   +

Notice of 2021 Annual Meeting of Stockholders

Proxy Solicited by Board of Directors for Annual Meeting – March 4, 2021

Each of the members of the Board of Directors, other than the nominees for director included in Proposal 1, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of ESSA Bancorp, Inc. to be held on March 4, 2021 or at any postponement or adjournment thereof.

Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR all of the nominees listed in Proposal #1, FOR Proposal #2, and FOR Proposal #3.

In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.

(Items to be voted appear on reverse side)

C Non-Voting Items

Change of Address — Please print new address below. Comments — Please print your comments below.

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