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Employee Benefits
 3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Employee Benefits Employee Benefits
Pension Plans
The Company provides pension benefits for its employees through membership in the Savings Banks Employees’ Retirement Association. The plan through which benefits are provided is a noncontributory, qualified defined benefit plan and is referred to as the Defined Benefit Plan. The Company’s annual contribution to the Defined Benefit Plan is based upon standards established by the Pension Protection Act. The contribution is based on an actuarial method intended to provide not only for benefits attributable to service to date, but also for those expected to be earned in the future. The Defined Benefit Plan has a plan year end of October 31.
The Company has an unfunded Defined Benefit Supplemental Executive Retirement Plan (“DB SERP”) that provides certain Company officers upon their retirement with defined pension benefits in excess of qualified plan limits imposed by U.S. federal tax law. The DB SERP has a plan year end of December 31.
In addition, the Company has an unfunded Benefit Equalization Plan (“BEP”) to provide retirement benefits to certain employees whose retirement benefits under the qualified pension plan are limited per the Internal Revenue Code. The BEP has a plan year end of October 31.
The Company also has an unfunded Outside Directors’ Retainer Continuance Plan (“ODRCP”) that provides pension benefits to outside directors who retire from service. The ODRCP has a plan year end of December 31. Effective December 31, 2020, the Company closed the ODRCP to new participants and froze benefit accruals for active participants.
Components of Net Periodic Benefit Cost
The components of net pension expense for the plans for the periods indicated are as follows:
Three Months Ended March 31,
20242023
(In thousands)
Components of net periodic benefit cost:
Service cost$5,589 $6,339 
Interest cost4,630 4,298 
Expected return on plan assets(8,453)(7,532)
Prior service credit(2,488)(2,970)
Recognized net actuarial loss1,775 2,468 
Net periodic benefit cost$1,053 $2,603 
Service costs for the Defined Benefit Plan and the BEP are recognized within salaries and employee benefits in the Consolidated Statements of Income. There were no service costs associated with the DB SERP or ODRCP during the three months ended March 31, 2024 or March 31, 2023. The remaining components of net periodic benefit cost are recognized in other noninterest expense in the Consolidated Statements of Income.
In accordance with the Pension Protection Act, the Company was not required to make any contributions to the Defined Benefit Plan for the plan years beginning November 1, 2023 and 2022. Accordingly, during the three months ended March 31, 2024 and 2023 there were no contributions to the Defined Benefit Plan.
Share-Based Compensation Plan
On November 29, 2021, the shareholders of the Company approved the Eastern Bankshares, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the issuance of up to 26,146,141 shares of common stock pursuant to grants of restricted stock, restricted stock units (“RSUs”), non-qualified stock options and incentive stock options, any or all of which can be granted with performance-based vesting conditions. Under the 2021 Plan, 7,470,326 shares may be issued as restricted stock or RSUs, including those issued as performance shares and performance share units (“PSUs”), and 18,675,815 shares may be issued upon the exercise of stock options. These shares may be awarded from the Company’s authorized but unissued shares. However, the 2021 Plan permits the grant of additional awards of restricted stock or RSUs above the aforementioned limit, provided that, for each additional share of restricted stock or RSU awarded in excess of such limit, the pool of shares available to be issued upon the exercise of stock options will be reduced by three shares. Pursuant to the terms of the 2021 Plan, each of the Company’s non-employee directors were automatically granted awards of restricted stock on November 30, 2021. Such restricted stock awards vest pro-rata on an annual basis over a five-year period. The maximum term for stock options is ten years.
In March 2024, the Company granted to all of the Company’s executive officers and certain other employees a total of 416,276 RSUs, which vest pro-rata on an annual basis over a period of three years from the date of the grant, and a total of 234,091 PSUs for which vesting is contingent upon the Compensation and Human Capital Management Committee of the Board of Director’s certification, after the conclusion of a period approximately 2.8 years from the date of the grant, that the Company has attained a threshold level of certain performance criteria over such period. In March 2023, the Company granted to all of the Company’s executive officers and certain other employees a total of 318,577 RSUs, which vest pro-rata on an annual basis over a period of three years from the date of the grant, and a total of 108,984 PSUs for which vesting is contingent upon the Compensation and Human Capital Management Committee of the Board of Director’s certification, after the conclusion of a three-year period from the date of the grant, that the Company has attained a threshold level of certain performance criteria over such period.
As of March 31, 2024 and December 31, 2023, there were 4,227,107 shares and 4,872,494 shares that remained available for issuance as restricted stock or RSU awards (including those that may be issued as performance shares and PSUs), respectively, and 18,675,815 shares that remained available for issuance upon the exercise of stock options at both dates. As of both March 31, 2024 and December 31, 2023, no stock options had been awarded under the 2021 Plan.
The following table summarizes the Company’s restricted stock award activity for the periods indicated:
For the Three Months Ended March 31,
20242023
Restricted Stock AwardsNumber of SharesWeighted-Average Grant Price Per ShareNumber of SharesWeighted-Average Grant Price Per Share
Non-vested restricted stock as of the beginning of the respective period420,400$19.15 525,460$20.08 
Granted—— —— 
Vested—— —— 
Forfeited—— —— 
Non-vested restricted stock as of the end of the respective period420,400$19.15 525,460$20.08 
During both the three months ended March 31, 2024 and 2023, no RSA awards vested.
The following table summarizes the Company’s restricted stock unit activity for the periods indicated:
For the Three Months Ended March 31,
20242023
Restricted Stock UnitsNumber of SharesWeighted-Average Grant Price Per ShareNumber of SharesWeighted-Average Grant Price Per Share
Non-vested restricted stock units as of the beginning of the respective period952,001$19.46 972,325$21.08 
Granted416,27612.81 318,57715.63 
Vested (1)(303,015)19.38 (230,768)21.08 
Forfeited(4,980)14.59 —— 
Non-vested restricted stock units as of the end of the respective period1,060,282$16.89 1,060,134$19.44 
(1)Includes 98,351 and 74,415 shares withheld upon settlement for employee taxes for the three months ended March 31, 2024 and 2023, respectively.
During the three months ended March 31, 2024 and 2023, 303,015 and 230,768 RSU awards vested, respectively. Such awards had a grant date fair value of $5.9 million and $4.9 million, respectively.
The following table summarizes the Company’s performance stock unit activity for the periods indicated:
For the Three Months Ended March 31,
20242023
Performance Stock UnitsNumber of SharesWeighted-Average Grant Price Per ShareNumber of SharesWeighted-Average Grant Price Per Share
Non-vested performance stock units as of the beginning of the respective period633,034$19.40 533,676$21.12 
Granted234,09110.82 108,98410.16 
Vested—— —— 
Forfeited—— —— 
Non-vested performance stock units as of the end of the respective period867,125$17.08 642,660$19.26 
During both the three months ended March 31, 2024 and 2023, no PSU awards vested.
The following table shows share-based compensation expense under the 2021 Plan and the related tax benefit for the periods indicated:
Three Months Ended March 31,
20242023
(In millions)
Share-based compensation expense$3.6 $3.0 
Related tax benefit (1)1.0 0.8 
(1)Estimated based upon the Company’s statutory rate for the respective period.
As of March 31, 2024 and December 31, 2023, there was $31.0 million and $26.8 million, respectively, of total unrecognized compensation expense related to unvested restricted stock awards, restricted stock units and performance stock units granted and issued under the 2021 Plan, as applicable. As of March 31, 2024, this cost is expected to be recognized over a weighted average remaining period of approximately 2.2 years. As of December 31, 2023, this cost was expected to be recognized over a weighted average remaining period of approximately 2.2 years.