t1700735_proxy - none - 8.0648064s
TABLE OF CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

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

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12
Berkshire Hills Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:
N/A
(2)
Aggregate number of securities to which transaction applies:
N/A
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
N/A
(4)
Proposed maximum aggregate value of transaction:
N/A
(5)
Total fee paid:
N/A

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
N/A
(2)
Form, Schedule or Registration Statement No.:
N/A
(3)
Filing Party:
N/A
(4)
Date Filed:
N/A

TABLE OF CONTENTS
[MISSING IMAGE: t1700735_cover.jpg]

TABLE OF CONTENTS
[MISSING IMAGE: t1700735_ifc.jpg]

TABLE OF CONTENTS
[MISSING IMAGE: lg_berkshire-bancorp.jpg]
[MISSING IMAGE: ph_1602193-ltr.jpg]
April 7, 2017
Dear Berkshire Hills Bancorp Shareholder:
It is our pleasure to invite you to attend the 2017 Annual Meeting of Shareholders, which will be held at:
The Crowne Plaza Hotel
One West Street
Pittsfield, Massachusetts 01201
Thursday, May 18, 2017
10:00 a.m., Eastern time
Please see the Notice of Annual Meeting on the next page for more information about our admission procedures.
We urge you to vote your proxy online, or by telephone, or by completing and returning a proxy card by mail as soon as possible, even if you plan to attend the Annual Meeting.
Your vote is important to us. Thank you for your attention to the enclosed materials, and for your continued support of our company.
[MISSING IMAGE: sg_daleymike-wrule.jpg]
Michael P. Daly, Chief Executive Officer
[MISSING IMAGE: sg_billryan-wrule.jpg]
William J. Ryan, Chairman of the Board of Directors

TABLE OF CONTENTS
[MISSING IMAGE: berkshirehills-headv2.jpg]
Notice of Annual Meeting
of Shareholders
Notice of 2017 Annual Meeting of Shareholders of Berkshire Hills Bancorp, Inc.
[MISSING IMAGE: ico_calendar.jpg]
When:
Thursday, May 18, 2017
10 A.M. Eastern Daylight Time
[MISSING IMAGE: ico_map-roundpin.jpg]
Where:
The Crown Plaza Hotel
One West Street
Pittsfield, MA 01201
[MISSING IMAGE: ico_map-checkedtasklist.jpg]
Record Date:
March 20, 2017
We are holding this meeting for the following purposes:
1.
To vote to phase out classified terms on service on the board of directors by approving amendments to the Certificate of Incorporation of the Company;
2.
To elect as directors the nominees named in the Proxy Statement each to serve a one-year term (if Proposal 1 is approved) or a three-year term (if Proposal 1 is not approved), or until their successors are duly elected and qualified;
3.
To provide an advisory vote on executive compensation practices;
4.
To vote on the frequency of advisory votes on executive compensation;
5.
To ratify the appointment of the Company’s independent registered public accounting firm for fiscal year 2017; and
6.
To transact any other Company business that may properly come before the meeting.
The Board of Directors unanimously recommends that you vote “FOR” each of the proposals to be presented at the annual meeting and “FOR” the One-Year Frequency option.
Shareholders of record at the close of business on March 20, 2017, are entitled to vote at the meeting, either in person or by proxy. There are several ways to vote. You can vote your shares via the Internet, by telephone, by regular mail or in person at the annual meeting. To access your proxy materials and vote online, please visit www.proxyvote.com and follow the instructions. The notice previously provided to you contains the necessary codes required to vote online or by telephone. If you wish to vote by telephone, please call 1-800-690-6903 using a touch-tone phone and follow the prompted instructions. You may also vote by mail by requesting a paper proxy card using the instructions provided to you in the notice. Finally, you may vote in person at the annual meeting, even if you have previously submitted a proxy.
Whatever method you choose, please vote in advance of the meeting to ensure that your shares will be voted as you direct.
Pittsfield, Massachusetts
April 7, 2017
By order of the Board of Directors
[MISSING IMAGE: sg_wgprescott.jpg]
Wm. Gordon Prescott, Corporate Secretary
Admission Procedures
The meeting is open to shareholders of Berkshire Hills Bancorp. Everyone attending the meeting should bring a photo ID. If your shares are registered in the name of a bank, broker, or other holder of record, please also bring documentation of your stock ownership as of March 20, 2017 (such as a brokerage statement).
IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 18, 2017:
The Notice of Annual Meeting, 2017 Proxy Statement, and Annual Report to Shareholders for fiscal 2016 are each available at www.proxyvote.com.
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
[MISSING IMAGE: berkshirehills-headv2.jpg]
Table of Contents
Proposal 1 — Phase Out Classified Board by Approving Amendments to the Certificate of Incorporation of the Company
10
18
26
29
54
55
55
Proposal 5 — Ratification of the Selection of the Independent Registered Public Accounting Firm
65
67
69
72
74
74
75
75
A-1
A-1
1
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
[MISSING IMAGE: berkshirehills-headv2.jpg]
Berkshire Hills Bancorp, Inc.
Proxy Statement
We are providing this proxy statement to you in connection with the solicitation of proxies by the Board of Directors of Berkshire Hills Bancorp, Inc. for the 2017 Annual Meeting of Shareholders and for any adjournment or postponement of the meeting. In this proxy statement, we may also refer to Berkshire Hills Bancorp, Inc. as “Berkshire Hills,” the “Company,” “Berkshire,” “we,” “our” or “us.” Berkshire Hills is the holding company for Berkshire Bank and Berkshire Insurance Group, Inc. In this proxy statement, we may also refer to Berkshire Bank as the “Bank.”
We are mailing a notice of the annual meeting to shareholders of record (March 20, 2017) beginning on April 7, 2017.
Proxy Summary
This proxy summary is intended to provide a broad overview of information contained elsewhere in this proxy statement. We encourage you to read the entire proxy statement carefully before voting.
Annual Meeting of Shareholders
Time and Date: 10:00 a.m. Eastern time, Thursday, May 18, 2017
Place: The Crowne Plaza Hotel, One West Street, Pittsfield, Massachusetts
Record Date: Shareholders as of the close of business on March 20, 2017 are entitled to vote
Matters to Be Voted on
Proposal
Board’s Voting
Recommendation
Page
References
(for more
information)
1 — Vote on Phasing Out the Current Classified Board Structure
FOR
pp. 7-8
2 — Election of Directors (for one-year terms or
three-year terms)
FOR
(all nominees)
pp. 9-27
3 — Advisory Vote on Executive Compensation
FOR
pp. 28-62
4 — Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation
5 — Ratification of Independent Registered Public Accounting Firm
FOR
pp. 64-66
Summary of Proposals for 2017
1 — Vote on Phasing Out the Current Classified Board Structure. After extensive conversation with our shareholders, the Board of Directors recommends amending the Company’s Certificate of Incorporation to eliminate the classified board structure so that all directors would stand for election on an annual basis. We believe the declassified board structure promotes greater director accountability and is overall more shareholder friendly.
2 — Election of Directors. This year, we have 3 (out of 11) directors up for election. If Proposal 1 passes, the Board will be declassified and the elected directors will be serving one-year terms. If Proposal 1 fails, directors’ terms of service on the board will remain classified and the elected directors will be serving three-year terms. The Board has nominated Messrs. Bossidy, Daly and Mahoney for re-election in 2017.
2
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Proxy Statement • Proxy Summary
3 — Advisory Vote on Executive Compensation. We strive to promote long-term value for our shareholders and sound risk management practices through the alignment of executive pay and company performance. This vote is to advise the Board on approval of its Named Executive Officer compensation as set forth within this proxy statement.
4 — Frequency of Advisory Votes on Executive Compensation. We believe annual Say-on-Pay votes are in the best interest of our shareholders and the Company. We also believe the feedback we get from investors through the advisory Say-on-Pay vote and our year-round shareholder engagement program is critical to fostering good investor relationships. We have included the advisory vote on executive compensation at each annual meeting since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and recommend continuing to do so.
5 — Ratification of Independent Registered Public Accounting Firm. There are no recommended changes to our independent registered public accounting firm this year. PricewaterhouseCoopers LLP (“PwC”) has acted as our independent registered public accounting firm for 6 years and remains objective, competent and diligent. In 2016, a new PwC partner was assigned to manage the audit engagement, in accordance with normal rotation of this responsibility.
Corporate Governance Highlights
The Board and management regularly review best practices in corporate governance and are committed to a program that serves the long-term interests of our shareholders. We believe good governance strengthens accountability and promotes responsible corporate citizenship. Our current best practices are highlighted below.
Independent Oversight
Shareholder Orientation
Good Governance
Majority independent directors
(9 of 11)
Rigorous board and committee self-assessments conducted annually Diverse board membership
(skills, tenure, age)
Strong and engaged independent chairman of the board Robust stock-ownership guidelines Annual evaluation of CEO and senior management
All key committees are fully independent Annual shareholder engagement program to obtain valuable feedback on compensation and governance programs Annual review of CEO and senior management succession plans
Regular executive sessions of independent directors Director resignation policy, if elected without a majority in an uncontested election Risk oversight by full board and committees
Chair of Corporate Governance or Chairman can call special meeting of the Board at any time for any reason No poison pill in place Formal ethics Code of Conduct, ethics hotline and ethics training and communications to all employees to reinforce the RIGHT values
Board of Directors
Our directors exhibit an effective mix of diversity, experience and perspective.

The Board is 82% independent with a median tenure of 5 years.

The directors come from a variety of backgrounds including financial services, healthcare, manufacturing and non-profit.

The Board engages in annual director evaluations and periodic board refreshment to foster the sharing of ideas and diverse perspectives.

Company guidelines require directors to build an ownership position equivalent to at least 4 times their annual cash retainer. All but one of our directors have achieved this, and this director is in the process of increasing her stock ownership to become compliant with these guidelines.
3
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Proxy Statement • Proxy Summary
Shareholder Engagement and Responsiveness
Every year since the implementation of Say-on-Pay, we have received support above 90% for our Advisory Vote on Executive Compensation. However, in 2016 we received 67% of votes in favor. We were disappointed in these results and the Board of Directors took actions over the past year to engage shareholders to better understand their views and make enhancements to our compensation and governance practices.
What We Did

Proactively reached out to our largest institutional shareholders, representing 75% of our institutional ownership, to solicit their feedback.

Our Independent Chairman of the Board and members of our management team had extensive dialogue with a diverse group of our shareholders during the year and obtained additional feedback from advisors and other knowledgeable third parties.

Through this engagement, we solicited feedback and answered questions about our executive compensation programs and board governance practices.
What We Heard and How We Responded

There was general support for the design of the compensation plans, but we heard that some of the shareholders desired more disclosure around incentive awards, particularly in cases where there is a qualitative/discretionary element.

We enhanced our proxy statement disclosure this year to include more detail around the philosophy and process utilized by the Compensation Committee in making compensation decisions.

Our shareholders also expressed a view that the proxy statement should provide even greater detail to explain the process and rationale of compensation awarded to individual executives.

Individual achievements of Named Executive Officers are discussed with enhanced disclosure around individual performance and awards.

Most shareholders stated that a declassified board with annual elections of all board members would be preferred.

The Board has recommended moving to the annual election of all directors as presented in Proposal 1 of this proxy statement.

There was also a desire for better disclosure around the composition of the Board, including skill sets, background and our recruiting and nomination process.

Disclosure around the composition of the Board has been increased, including a skills matrix and detail on our recruiting and nomination process.

Some shareholders suggested adopting a proxy access provision in our bylaws.

The Board has had extensive conversations about proxy access and will continue to evaluate this matter.
Our Compensation Practices and Philosophy
We seek to provide an executive compensation program that is consistent with promoting sound risk management and long-term value creation to our shareholders. The key principles that support our philosophy are:

Attract and retain highly talented executives committed to our success

Pay for Performance

Align executive interests with those of our shareholders

Manage risk through oversight and compensation design features and practices
4
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Proxy Statement • Proxy Summary
Our Compensation Practices and Policies
What We Do:

Pay for Performance

Link Performance Measures with Strategic Objectives

Annual Say-on-Pay Vote

Independent Compensation Consultant

Shareholder Engagement

Stock Ownership Guidelines

Clawback Policy

Incentivize Sound Risk Management

Anti-Hedging and Pledging Restriction Policy

No payment of dividends on any restricted stock awards until vested
Pay for Performance Results
Named Executive Officer direct compensation is made up of base salary, short term cash incentive and long term equity incentive. The target mix is 57% performance-based for the Chief Executive Officer and 47% performance based for other NEOs. Long-term equity incentive awards are earned over a 3 year period and made up of 50% performance shares and 50% time-based shares.
Reflecting our pay-for-performance compensation program, the strong results delivered for our shareholders translated into the payouts highlighted below:
Component
Metrics(1)
Performance
Period
Performance
Payout
2016 Short-Term Incentive
Based on operating performance, profitability, risk management and individual performance objectives:
Core Earnings (25%); Expense Management (25%); Asset Quality (25%); and Core Return on Assets (25%)
1 year
Strong 2016 Performance
Equaled or exceeded all 2016 goals – achieved stretch goals for efficiency and asset quality
Made significant progress on profitability measures – core ROA and efficiency ratio
Average for all NEOs
112% of target
2014 – 2016 Long-Term Incentive
Based on key business operating and profitability metrics:
Core Earnings Per Share (“core EPS”) (50%) and Average Core Return on Equity (“core ROE”) (50%)
3 years
Solid 3 Year Performance
22% core EPS growth rate (FY16/FY14)
16% improvement in core ROE (FY16/FY14)
Exceeded core EPS goal and came in slightly below core ROE goal over the 3-year performance period
Average for all NEOs
96% of target
(1)
For a summary of certain non-GAAP performance measures, please see Appendix A.
5
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Proxy Statement • Proxy Summary
2016 Company Performance
Through a combination of solid organic growth and smart acquisitions, Berkshire has grown to $9.2 billion in assets with a regional footprint across the Northeast and a national customer reach. It is our culture, diverse footprint, earnings momentum, disciplined acquisition strategy, and focus on driving profitability and shareholder value that has set us apart from other regional banks and positions us for future continued success.
In 2016 we reported record financial results, grew our franchise through additional products, services and geographies, and made significant investments in strengthening our platform and teams. These advances were reflected in solid net income and earnings per share growth, improved profitability and 30% total return for our stock.
Improving our return on assets, return on equity and efficiency remain key corporate goals for us and we are showing progress. Return on assets and return on equity have each improved steadily year over year. Our expenses to average assets has also shown steady improvement, bringing our efficiency ratio below 60% for the year and helping us to deliver positive operating leverage. Our asset quality metrics remain excellent and we continue to operate within comfortable capital and liquidity ranges.
[MISSING IMAGE: t1700735_barchart2.jpg]
[MISSING IMAGE: t1700735_barchart1.jpg]
(1)
Reflects the year-to-year performance indexed to a 2014 base year, at 100.
(2)
Peer group consist of long term incentive index.
Strategically, we improved market share, grew loans and deposits, upgraded some key roles and completed two acquisitions this year. These acquisitions included First Choice Bank, which expanded our footprint into central New Jersey and the Philadelphia area with 8 branches and $1.1 billion in assets and brought along with it a best-in-class national mortgage operation, and 44 Business Capital, also based in the Philadelphia area, which primarily originates and sells SBA 7(a) loans and contributed significant fee income in 2016. Berkshire Bank is now ranked among the top 50 U.S. banks in production of residential mortgages and SBA 7(a) loans.
All of our growth and profitability improvements are driving toward better shareholder returns. Our stock price rose over 38% in the last two years, outperforming the broad market. We have a 45% dividend payout ratio of EPS and a 3% dividend yield, and maintaining that growing dividend is an important part of our objective.
6
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
[MISSING IMAGE: berkshirehills-headv2.jpg]
Proposal 1:
Phase Out Classified Board by Approving Amendments
to the Certificate of Incorporation of the Company
The Board of Directors recommends approval of a proposal to phase out the classification of the Board of Directors over a three-year period beginning in 2017 and instead provide for the annual election of directors.
Background. The Board is currently divided into three classes under Article SIXTH of our current Certificate of Incorporation. Each class consists, as nearly equal in number as possible, of one-third of the total number of directors, with members of each class being elected every three years to a three-year term. The term of one class expires at each annual meeting of shareholders. At each annual meeting of shareholders, only one class of directors is subject to shareholder vote.
The Board of Directors considered arguments in favor of and against continuation of the classified Board of Directors and determined that it is in the Company’s best interest to seek shareholder approval to declassify the Board of Directors. Annually elected boards are perceived by many shareholders as increasing the accountability of directors to such shareholders. In February 2017, the Board of Directors adopted, subject to shareholder approval, amendments to the Company’s Certificate of Incorporation to eliminate the classified Board of Directors so that all directors would stand for election on an annual basis. The Board has also adopted amendments to the Bylaws of the Company to declassify the Board, contingent upon shareholder approval of the amendments to the Company’s Certificate of Incorporation.
Approval of the amendment to the Certificate of Incorporation requires the affirmative vote of the holders of at least 80% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors.
Proposal Logistics. Under Article SIXTH of the Company’s Certificate of Incorporation, the Board of Directors is divided into three classes, as nearly equal in number as possible, composed of directors each serving terms of office of three years. If Proposal 1 is approved by our shareholders in 2017, the directors who have been elected previously to three-year terms ending in 2018 and 2019 would complete those three-year terms, and thereafter would be eligible for annual re-election after completion of their current terms. Directors who are elected at this year’s Annual Meeting will serve one-year terms and and will be subject to re-election next year. If the proposed measure is approved, beginning with the 2020 Annual Meeting of Shareholders, the Board of Directors will be completely declassified and all directors will be subject to annual election to one-year terms.
If Proposal 1 is not approved by our shareholders, the Board will remain classified and our directors will continue to be subject to the Certificate of Incorporation’s current classification. Directors who are elected at this year’s Annual Meeting will serve three-year terms and and will be subject to re-election at the 2020 Annual Meeting of Shareholders.
The proposed amendments to the Certification of Incorporation to phase out the classification of the Board of Directors and provide for the annual election of directors will be approved if 80% of the shares outstanding are voted in favor of the proposal and the proposal will become effective upon the filing of the amendments with the Secretary of State of the State of Delaware.
Proposed amendments to Article SIXTH, Section A are set forth below, with additions indicated in bold and underline, and deletions indicated in strikethrough.
A.
The number of Directors shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board. The Directors shall be divided into three classes, as nearly equal in number as reasonably possible, with each Director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders following such initial classification and election, held before the 2017 annual meeting of stockholders, the class of Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of
7
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 1: Phase Out Classified Board by Approving Amendments to the Certificate of
Incorporation of the Company 
stockholders after their election. At each annual meeting of stockholders commencing with the 2017 annual meeting of stockholders, Directors elected to succeed those Directors whose terms then expire shall be elected for a term expiring at the next annual meeting of stockholders. Beginning with the 2020 annual meeting of stockholders, the foregoing classification of the Board of Directors shall cease. If the number of Directors is changed prior to the 2017 annual meeting of stockholders, any increase or decrease shall be apportioned among the classes so as to maintain the number of Directors in each class as nearly equal as possible, and any additional Director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class. If the number of Directors is increased at or following the 2020 annual meeting of stockholders, any additional Director elected to fill a vacancy resulting from such increase shall hold office for a term expiring at the next annual meeting of stockholders. In no case shall a decrease in the number of Directors remove or shorten the term of any incumbent Director. Each Director shall hold office for the term for which elected or until his or her successor shall have been duly elected and qualified.
Proposed amendments to Article SIXTH, Section B are set forth below.
B.
Subject to the rights of the holders of any series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of Directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office, or other cause may be filled only by a majority vote of the Directors then in office, though less than a quorum, and Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been chosen expires, except that Directors elected to fill vacancies after the 2020 annual meeting of stockholders shall hold office for a term expiring at the next annual meeting of stockholders. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” PROPOSAL 1.
8
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
[MISSING IMAGE: berkshirehills-headv2.jpg]
Proposal 2:
Election of Directors for a One-Year Term (If Proposal 1 is
Approved) or a Three-Year Term (If Proposal 1 is Not Approved)
The Board of Directors has nominated and recommends Paul T. Bossidy, Michael P. Daly and Cornelius D. Mahoney for election as directors, to serve until the 2018 Annual Meeting (if Proposal 1 is approved) or to serve until the 2020 Annual Meeting (if Proposal 1 is not approved), in either case, and until their successors are duly elected and qualified.
Background. The Company’s Board of Directors currently consists of 11 members. The Board is currently divided into three classes, each with three-year staggered terms, with one-third of the directors elected each year. The nominees for election this year are Paul T. Bossidy, Michael P. Daly and Cornelius D. Mahoney. All three of the nominees currently serve on the Board.
If Proposal 1 is approved, the shareholders will vote to elect the above-referenced nominees to hold office for a one-year term. If Proposal 1 is not approved, the shareholders will vote to elect the above-referenced nominees to hold office for a three-year term. If a nominee is unable to be a candidate when the election takes place, the shares represented by valid proxies will be voted in favor of the remaining nominees. The Board of Directors does not currently anticipate that any of the nominees will be unable to be a candidate for election.
Additional Information. Information regarding the director nominees is set forth below under the heading “—Information Regarding Directors and Director Nominees.”
The affirmative vote of a plurality of the Company’s outstanding common stock present in person or by proxy at the Annual Meeting is required to elect the nominees for directors; provided, however, in the case of an uncontested election of directors, it is the Company’s policy that if a director is elected by a plurality but not a majority of the votes cast for such director, such director must submit his or her resignation to the Board of Directors, which will be subject to review by the Corporate Governance and Nominating Committee of the Board of Directors. The Corporate Governance/​Nominating Committee will then make a recommendation to the Board of Directors as to whether to accept or reject the director’s resignation. Unless otherwise instructed, the proxy holders will vote the proxies received by them “FOR” the election of the nominees as directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF ITS DIRECTOR NOMINEES.
9
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Information Regarding Directors and Director
Nominees
Information Regarding Directors and Director Nominees
Since our last annual meeting, the Board took actions to engage shareholders, advisors and other knowledgeable third-parties to discuss a number of important topics and better understand their views. We appreciate the honest feedback, open exchange of ideas and opportunity to learn from one another. As a result of those conversations and our own commitment to good governance, the Board made the following governance changes this year:

The size of the Board was reduced to 11 from 15.

Committee rotation and appointment of new Chairs occurred throughout the year, which included new Audit and Corporate Governance/Nominating Committee Chairs.

As noted in Proposal 1, the Board is recommending a change to the Company’s Certificate of Incorporation to phase out the classified Board structure so that all directors would stand for election on an annual basis by 2020.

Disclosure around the compostion of the Board has been enhanced, including more information on skill sets, background and our recruiting and nomination process.

The Board also adopted a strict anti-hedging policy as laid out on page 53 of this proxy statement.
2017 Nominees for Election to the Board of Directors
PAUL T. BOSSIDY, President and CEO of Patripabre Capital LLC
[MISSING IMAGE: ph_paul-bossidy.jpg]
Mr. Bossidy is President and Chief Executive Officer of Patripabre Capital LLC, in Ridgefield, Connecticut, and provides consulting services to companies in the financial services industry. Mr. Bossidy previously served as President and Chief Executive Officer of Clayton Holdings LLC from 2008 to 2014, when it was acquired by Radian Group, Inc. He also formerly served as Senior Operations Executive at Cerberus Capital Management and has held various executive appointments for General Electric Company, most recently as President and Chief Executive Officer of GE Capital Solutions Group, a diversified global commercial finance company. He is a certified public accountant. Mr. Bossidy has been designated by the Board of Directors as a financial expert under the rules of the Securities and Exchange Commission.
Independent
Years of Service: 1
Age: 56
Board Committees:

Audit (chair)
Corporate Governance/​ Nominating
Other Directorships: Altisource Asset Management Corporation (2012-present); Chair of Altisource Audit Committee (2012-present)
Qualifications, Skills and Experience

Public Company Board

Financial Institution Executive
Business Operations/Strategic Planning

Financial Expertise/Literacy
Risk Management

Talent Management

Regulated Industry
Corporate Responsibility/​Community Leader
Mortgage Industry
Current Term End: 2017 (nominated for re-election)
10
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Information Regarding Directors and Director
Nominees
MICHAEL P. DALY, President and CEO of Berkshire Hills Bancorp, Inc.
[MISSING IMAGE: ph_michael-daly.jpg]
Mr. Daly is President and Chief Executive Officer of the Company and Chief Executive Officer of the Bank. Before these appointments in 2002, Mr. Daly served as Executive Vice President and Senior Loan Officer of the Bank. He has been an employee of the Bank since 1986.
Years of Service: 14
Age: 55
Qualifications, Skills and Experience

Public Company CEO

Public Company Board

Financial Institution Executive
Business Operations/Strategic Planning
Financial Expertise/Literacy

Risk Management

Talent Management

Regulated Industry
Corporate Responsibility/​Community Leader
Current Term End: 2017 (nominated for re-election)
CORNELIUS D. MAHONEY, Former Chairman, President and CEO of Woronoco
Bancorp, Inc.
[MISSING IMAGE: ph_cornelius-mahoney.jpg]
Mr. Mahoney is the former Chairman, President and Chief Executive Officer of Woronoco Bancorp, Inc. and Woronoco Savings Bank before their merger with Berkshire in June 2005. He is a former Chairman of America’s Community Bankers and the Massachusetts Bankers Association and a former Director of the Federal Home Loan Bank of Boston. He was a member of the Thrift Institution Advisory Council to the Federal Reserve Board of Governors and is a past Chairman of the Board of Trustees of Westfield State College.
Independent
Years of Service: 11
Age: 71
Board Committees:
Compliance & Regulatory (Chair)
Compensation
Qualifications, Skills and Experience

Public Company CEO

Public Company Board

Financial Institution Executive
Business Operations and Strategic Planning
Financial Expertise/Literacy

Risk Management

Talent Management

Regulated Industry
Corporate Responsibility/​Community Leader
Current Term End: 2017 (nominated for re-election)
11
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Information Regarding Directors and Director
Nominees
Directors with Terms Ending in 2018
ROBERT M. CURLEY, Chairman of the New York Region of Berkshire Bank
[MISSING IMAGE: ph_robert-curley.jpg]
Mr. Curley is Chairman of the New York region of Berkshire Bank. He previously served as Chairman and President for Citizens Bank in New York from 2005 to 2009. Prior to joining Citizens, Mr. Curley served at Charter One Bank where he was President for New York and New England. During the period of 1976 to 1999, Mr. Curley was employed by KeyCorp, where he rose to the position of Vice Chairman of KeyBank N.A., and served as President and Chief Executive Officer of four subsidiary banks. Mr. Curley was hired by the Company and the Bank as Chairman of our New York region and appointed as a director of the Company and the Bank in December 2009.
Years of Service: 7
Age: 69
Board Committees:
Risk Management & Capital (Chair)
Compliance & Regulatory
Qualifications, Skills and Experience

Financial Institution Executive
Business Operations/Strategic Planning
Financial Expertise/Literacy

Risk Management

Talent Management

Regulated Industry
Corporate Responsibility/​Community Leader
Current Term End: 2018 Annual Meeting
RICHARD J. MURPHY, Chief Operating Officer and Executive Vice President of Tri-City
ValleyCats
[MISSING IMAGE: ph_richard-murphy.jpg]
Mr. Murphy is Chief Operating Officer and Executive Vice President of the Tri-City ValleyCats minor league baseball team, a Class-A affiliate of the Houston Astros based in Troy, New York. He currently serves as Chairman of the New York-Penn League Schedule Committee and is a member of the Board of Directors for Minor League Baseball’s Baseball Internet Rights Corporation.
Independent
Years of Service: 2
Age: 54
Board Committees:

Audit
Compliance & Regulatory
Qualifications, Skills and Experience

Business Operations/Strategic Planning

Financial Expertise/Literacy
Marketing/PR

Talent Management

Small Business Owner/Operator
Corporate Responsibility/​Community Leader
Current Term End: 2018 Annual Meeting
12
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Information Regarding Directors and Director
Nominees
WILLIAM J. RYAN, Chairman of the Board of Directors of Berkshire Hills Bancorp, Inc.
[MISSING IMAGE: ph_william-ryan.jpg]
Mr. Ryan is the Chairman of the Board of Directors of the Company. Mr. Ryan previously served as Chairman of the Board and Chief Executive Officer of Banknorth from 1985 through 2005 and then subsequently Chairman of the Board and Chief Executive Officer of TD Banknorth from 2005-2007.
Other Directorships: Anthem, Inc. (2001-present); former director of Unum Group (2011-2016) and Chairman of the Board of Unum Group (2011-2015).
Independent Chairman
Years of Service: 2
Age: 73
Board Committees:
Corporate Governance/​ Nominating (Chair)
Compensation
Qualifications, Skills and Experience

Public Company CEO

Public Company Board

Financial Institution Executive
Business Operations/Strategic Planning
Financial Expertise/Literacy

Risk Management

Talent Management

Regulated Industry
Corporate Responsibility/​Community Leader
Current Term End: 2018 Annual Meeting
D. JEFFREY TEMPLETON, Owner and President of The Mosher Company, Inc.
[MISSING IMAGE: ph_jeffrey-templeton.jpg]
Mr. Templeton is the owner and President of The Mosher Company, Inc., located in Chicopee, Massachusetts, a manufacturer of buffing and polishing compounds, abrasive slurries and a distributor of related grinding, polishing and lapping machinery. Mr. Templeton is a former director of Woronoco Bancorp.
Independent
Years of Service: 11
Age: 75
Board Committees:

Compensation
Corporate Governance/​ Nominating
Qualifications, Skills and Experience

Public Company Board
Business Operations/Strategic Planning
Financial Expertise/Literacy

Talent Management

Small Business Owner/Operator
Corporate Responsibility/​Community Leader
Current Term End: 2018 Annual Meeting
13
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Information Regarding Directors and Director
Nominees
Directors with Terms Ending in 2019
JOHN B. DAVIES, Agent Emeritus with Massachusetts Mutual Life Insurance
[MISSING IMAGE: ph_john-davies.jpg]
Mr. Davies is a former Executive Vice President of Massachusetts Mutual Life Insurance and is currently an Agent Emeritus with Massachusetts Mutual providing high net worth counseling with a focus on tax efficiency and intergenerational transfers of wealth. Mr. Davies is a former director of Woronoco Bancorp.
Independent
Years of Service: 11
Age: 67
Board Committees:

Compensation (Chair)
Corporate Governance/​ Nominating
Qualifications, Skills and Experience

Public Company Board

Financial Institution Executive
Business Operations/Strategic Planning
Financial Expertise/Literacy

Regulated Industry

Wealth Management/Insurance

Talent Management
Corporate Responsibility/​Community Leader
Current Term End: 2019 Annual Meeting
J. WILLIAR DUNLAEVY, Former Chairman and CEO of Legacy Bancorp, Inc.
[MISSING IMAGE: ph_williar-dunlaevy.jpg]
Mr. Dunlaevy is the former Chief Executive Officer and Chairman of the Board of Legacy Bancorp, Inc. and Legacy Banks (collectively, “Legacy”). Mr. Dunlaevy served as the Chief Executive Officer and Chairman of the Board of Legacy from 1996 until their merger with Berkshire in 2011. A community leader, Mr. Dunlaevy currently serves as a director of the Berkshire Bank Foundation, and is chairman of the Berkshire Taconic Community Foundation. Mr. Dunlaevy has also been a director of the Depositors Insurance Fund, Massachusetts Bankers Association, and Savings Bank Life Insurance Company of Massachusetts (“SBLI”). Mr. Dunlaevy has been designated by the Board of Directors as a financial expert under the rules of the Securities and Exchange Commission.
Independent
Years of Service: 5
Age: 70
Board Committees:

Audit
Risk Management & Capital
Qualifications, Skills and Experience

Public Company CEO

Public Company Board

Financial Institution Executive
Business Operations/Strategic Planning
Financial Expertise/Literacy

Risk Management

Talent Management

Regulated Industry
Corporate Responsibility/​Community Leader
Current Term End: 2019 Annual Meeting
14
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Information Regarding Directors and Director
Nominees
LAURIE NORTON MOFFATT, Director & CEO of the Norman Rockwell Museum
[MISSING IMAGE: ph_laurie-moffatt.jpg]
Ms. Moffatt is the Director and Chief Executive Officer of the Norman Rockwell Museum, Stockbridge, Massachusetts. Since 1986, Ms. Moffatt has overseen the expansion of the museum’s facilities and the creation of a scholars’ research program. Her efforts resulted in the Museum receiving the National Humanities Medal, America’s highest humanities honor. Ms. Moffatt is also an active community leader. She is a founder of 1Berkshire and Berkshire Creative Economy Council and serves as a trustee of Berkshire Health Systems.
Independent
Years of Service: 3
Age: 60
Board Committees:
Risk Management & Capital
Compliance & Regulatory
Qualifications, Skills and Experience

Business Operations/Strategic Planning

Financial Expertise/Literacy
Talent Management

Marketing/PR

Small Business Owner/Operator
Corporate Responsibility/​Community Leader
Current Term End: 2019 Annual Meeting
PATRICK J. SHEEHAN, Owner and Manager of Sheehan Health Group
[MISSING IMAGE: ph_patrick-sheehan.jpg]
Mr. Sheehan is owner and manager of multiple healthcare businesses in New England. Through his management company, Sheehan Health Group, he has operated multiple nursing homes, an independent and assisted living community, a home care agency and a rehabilitation company. A veteran of the healthcare industry, Mr. Sheehan has been successfully rehabilitating and managing healthcare properties since 1990.
Independent
Years of Service: 1
Age: 45
Board Committees:

Audit
Risk Management & Capital
Qualifications, Skills and Experience

Business Operations/Strategic Planning

Financial Expertise/Literacy
Regulated Industry

Talent Management

Small Business Owner/Operator
Corporate Responsibility/​Community Leader
Current Term End: 2019 Annual Meeting
15
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Information Regarding Directors and Director
Nominees
2017 COMMITTEE STRUCTURE
2017 Committee Structure
Name, Age & Business Background
Director
Since
Director
Category
Audit
Comp
Corp
Gov/​
Nom
Risk &
Capital
Compliance
& Reg
Paul T. Bossidy, Age 56
CEO, GE Capital Solutions; Sr Exec, Cerebus Capital Management
2015
I
C
Robert M. Curley, Age 69
Vice Chairman, Keybank; President, Citizens Bank in New York
2009
M
C
Michael P. Daly, Age 55
President and CEO, Berkshire Hills Bancorp
2002
M
John B. Davies, Age 67
EVP, Massachusetts Mutual Life Insurance
2005
I
C
J. Williar Dunlaevy, Age 70
CEO, Legacy Bancorp
2011
I
Cornelius D. Mahoney, Age 71
CEO, Woronoco Bancorp
2005
I
C
Laurie Norton Moffatt, Age 60
CEO, Norman Rockwell Museum
2013
I
Richard J. Murphy, Age 54
Chief Operating Officer, Tri-City ValleyCats
2014
I
William J. Ryan, Age 73
Chairman, TD Banknorth
2014
I/C
C
Patrick J. Sheehan, Age 45
Owner/Manager, Sheehan Health Group
2016
I
D. Jeffrey Templeton, Age 75
Owner/President, The Mosher Company
2005
I
M = Management Director         I = Independent Director         C = Chair
16
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Information Regarding Directors and Director
Nominees
[MISSING IMAGE: t1700735_bar-tenure.jpg]
[MISSING IMAGE: t1700735_bar-director.jpg]
17
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Corporate Governance
Corporate Governance
The Company is committed to strong corporate governance policies, practices and procedures designed to make the Board more effective in exercising its oversight role. The following sections provide an overview of our corporate governance structure, including independence and other criteria we use in selecting director nominees, our Board leadership structure, and the responsibilities of the Board and each of its Committees. Our Corporate Governance Policy, among other key governance materials, help guide our Board and management in the performance of their duties and are regularly reviewed by the Board.
Key Corporate Governance Documents
Please visit our investor relations website at ir.berkshirebank.com to view the following documents:

Corporate Governance Policy

Code of Business Conduct

Board Committee Charters

Company By-Laws
These documents are available free of charge on our website or by writing to Berkshire Hills Bancorp, P.O. Box 1308, Pittsfield, MA 01202, c/o Senior Vice President and Corporate Secretary.
The Board and management regularly review best practices in corporate governance and are committed to a program that serves the long-term interests of our shareholders. We believe good governance strengthens accountability and promotes responsible corporate citizenship. Our current best practices are highlighted below:
Independent Oversight
Shareholder Orientation
Good Governance
Majority independent directors
(9 of 11)
Rigorous board and committee self-assessments conducted annually Diverse board membership (skills, tenure, age)
Strong and engaged independent Chairman of the Board Robust stock-ownership guidelines Annual evaluation of CEO and senior management
All key committees are fully independent Annual shareholder engagement program to obtain valuable feedback on compensation and governance programs Annual review of CEO and senior management succession plans
Regular executive sessions of independent directors Director resignation policy, if elected without a majority in an uncontested election Risk oversight by full Board and committees
Chair of Corporate Governance or Chairman can call special meeting of the Board at any time for any reason No poison pill in place Formal ethics Code of Conduct, ethics hotline and ethics training and communications to all employees to reinforce the RIGHT values
Board of Directors
The primary functions of Berkshire’s Board of Directors are:

To oversee management performance on behalf of shareholders;

To ensure that the interests of the shareholders are being served;

To monitor adherence to Berkshire’s standards and policies;

To promote the exercise of responsible corporate citizenship; and

To perform the duties and responsibilities assigned to the Board by the laws of Delaware, Berkshire’s state of incorporation.
18
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Corporate Governance
Board Meetings
During 2016, the Board of Directors held ten meetings. The average attendance at meetings of the Board and Board Committees during 2016 was 93%. During this period, each of the current directors attended at least 75% of the aggregate of the total number of board meetings and committee meetings held on which such directors served.
In addition, the Board of Directors encourages each director to attend annual meetings of shareholders. Eleven out of fifteen directors attended the 2016 annual meeting of shareholders.
Board Leadership Structure
The Board has reviewed the current Board leadership structure of the Company, which consists of a separate Independent Chairman of the Board and a Chief Executive Officer. The Independent Chairman performs all duties and has all powers which are commonly incident to the office of Chairman of the Board or which are delegated to him by the Board of Directors, including presiding at all meetings of the Board of Directors. The Chief Executive Officer has responsibility for the management and control of the business and affairs of the Company and has general supervision of all other officers, employees and agents of the Company. The Board believes that separating these roles enhances the independence of the Board and its effectiveness in discharging its responsibilities and that this procedure is currently the most appropriate Board leadership structure for the Company.
Director Independence
The Company’s Board of Directors currently consists of 11 members, all of whom are independent under the listing requirements of The New York Stock Exchange (the “NYSE”), except for Messrs. Daly and Curley, who are officers of the Company and the Bank. Additionally, all of the members of the Audit, Compensation and Corporate Governance/Nominating Committees are independent in accordance with the listing standards of the NYSE, and, in the case of members of the Audit and Compensation Committees, the rules of the SEC. In determining the independence of its directors, the Board considered transactions, relationships and arrangements between the Company and its directors that are not required to be disclosed in this proxy statement under the heading “Transactions with Related Persons,” including loans or lines of credit that the Bank has directly or indirectly made to Directors Daly, Mahoney, Moffatt, Murphy, Sheehan and Templeton.
Corporate Governance Policy
The Board of Directors has adopted a corporate governance policy to govern certain activities, including: the duties and responsibilities of directors; the composition, responsibilities and operation of the Board of Directors; the selection of a Chairman of the Board of Directors; the operation of board committees; succession planning; convening executive sessions of independent directors; the Board of Directors’ interaction with management and third parties; and the evaluation of the performance of the Board of Directors and of the Chief Executive Officer. A copy of the corporate governance policy is available in the Governance Documents portion of the Investor Relations section of the Company’s website (www.berkshirebank.com).
Director Continuing Education
The Board of Directors holds an annual director education day led by the Chairman, which includes presentations by outside experts based on input from directors regarding topics of interest. Past topics have included cyber-security, stress testing and the Dodd-Frank Act regulatory thresholds, and investor views and perceptions. Directors also receive an annual update on trending compliance and regulatory matters and new developments from Berkshire Bank’s outside compliance advisory firm. Our senior management meets with the Board at every regularly scheduled board meeting and annually to review the Company’s strategic plan.
19
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Corporate Governance
Committees of the Board of Directors
The Board has five standing committees: the Audit Committee; the Compensation Committee; the Corporate Governance/Nominating Committee; the Risk Management and Capital Committee; and the Compliance/Regulatory Committee. The Board has determined that all members of the Audit Committee, the Compensation Committee and the Corporate Governance/Nominating Committee are independent in accordance with the listing requirements of the NYSE. Each committee operates under a written charter approved by the Board of Directors that governs its composition, responsibilities and operation. Each committee reviews and reassesses the adequacy of its charter at least annually. The current charters of all five committees are available in the Governance Documents portion of the Investor Relations section of the Company’s website (www.berkshirebank.com).
2016 Committee Structure
Directors
Audit
Committee
Compensation
Committee
Corporate
Governance/
Nominating
Committee
Risk
Management
and Capital
Committee
Compliance/​
Regulatory
Committee
Paul T. Bossidy**
Thomas R. Burton*
Robert M. Curley C
Michael P. Daly
John B. Davies C
Rodney C. Dimock* C**
J. Williar Dunlaevy
Susan M. Hill* C**
Cornelius D. Mahoney C
Laurie Norton Moffatt
Richard J. Murphy
Barton D. Raser*
William J. Ryan**
Patrick J. Sheehan***
Richard D. Suski****
D. Jeffrey Templeton
Number of Meetings in 2016 18 8 7 7 7
C
Denotes Committee Chairperson.
*
Thomas R. Burton, Rodney C. Dimock, Susan M. Hill and Barton D. Raser retired from the Board of Directors on December 15, 2016.
**
Mr. Ryan was appointed Chair of the Corporate Governance/Nominating Committee on June 23, 2016, taking over from Mr. Dimock. Mr. Bossidy was appointed Chair of the Audit Committee on June 23, 2016, taking over from Ms. Hill.
***
Patrick J. Sheehan was elected to the Board of Directors at the Company’s 2016 Annual Meeting on May 5, 2016.
****
Richard D. Suski did not stand for re-election to the Board of Directors at the Company’s 2016 Annual Meeting and retired from the Board on May 5, 2016.
20
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Corporate Governance
Board Committees and Responsibilities
The primary functions of each of the board committees are described below.
BOARD COMMITTEES
ROLES AND RESPONSIBILITIES
AUDIT COMMITTEE
All Four Members Independent
Chair: Mr. Bossidy
The Board of Directors has determined that Messrs. Bossidy and Dunlaevy qualify as Audit Committee financial experts under the rules of the Securities and Exchange Commission.

Assists the Board of Directors in its oversight of the Company’s accounting and reporting practices

Reviews the quality and integrity of the Company’s financial reports

Ensures the Company’s compliance with legal and regulatory requirements related to accounting and financial reporting

Oversees the Company’s internal audit function

Annually reviews and approves the internal audit plan

Engages with the Company’s independent registered public accounting firm (PwC) and monitors its performance and independence
COMPENSATION COMMITTEE
All Four Members Independent Chair: Mr. Davies
See the “Compensation Discussion and Analysis” section for more information regarding the role of the Compensation Committee, management and compensation consultants in determining and/or recommending the amount or form of named executive compensation.

Approves the compensation objectives for the Company and its subsidiaries and establishes the compensation for the Chief Executive Officer and other Named Executive Officers of the Company

Reviews the Company’s incentive compensation and other equity plans and recommends changes to the plans as needed

Reviews all compensation components for the Company’s Chief Executive Officer and other Named Executive Officers, including base salary, short-term incentive, long-term incentives/equity, benefits and other perquisites

Reviews competitive market factors and examines the total compensation mix, pay-for-performance relationship, and how all elements, in the aggregate, comprise the named executive officer’s total compensation package

Administers employment agreements, change in control agreements, and equity incentive plans
CORPORATE GOVERNANCE/​NOMINATING COMMITTEE
All Four Members Independent Chair: Mr. Ryan

Identifies qualified individuals to serve as Board members

Considers and recommends nominees for director to stand for election at the Company’s annual meeting of shareholders

Determines the composition of the Board of Directors and its committees

Annually reviews policy, procedures and criteria for identifying candidates for election or appointment to the Board of Directors

Monitors a process to assess Board effectiveness, including annual Board and committee self evaluations

Develops and implements the Company’s corporate governance guidelines, including annual reviews of the Company’s Corporate Governance Policy and Code of Business Conduct

Regularly receives reports from executive officers heading the Company’s investor relations and compliance and regulatory programs and periodically receives reports from other committee chairpersons regarding the work being done by their committees
21
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Corporate Governance
BOARD COMMITTEES
ROLES AND RESPONSIBILITIES
RISK MANAGEMENT AND CAPITAL COMMITTEE
Four Members
Chair: Mr. Curley

Oversees management’s program to limit or control the material business risk that confront the Company

Approves policies and procedures designed to lead to an understanding and to identify, control, monitor and measure the material business risk of the Company and its subsidiaries

Plans for future capital needs

Reviews material business risks including, but not limited to, credit risk, interest rate risk liquidity risk, regulatory risk, legal risk, operational risk, strategic risk, cyber-security risk and reputation risk

Monitors the Company’s enterprise governance, risk management and compliance (“EGRC”) program, including development and implementation of risk management processes in the area of vendor management, data loss prevention, business continuity, policy management and testing and assessment of operational controls

Ensures compliance with regulations pertaining to capital structure and level
COMPLIANCE AND REGULATORY COMMITTEE
Four Members
Chair: Mr. Mahoney

Oversees management’s implementation of compliance programs, policies and procedures designed to identify and respond to the various compliance and regulatory risks of the Company and its subsidiaries

Monitors the preparations for regulatory examinations of the Company and Berkshire Bank

Monitors significant legal or regulatory compliance exposure and oversees responses to material reports or inquiries from government or regulatory agencies

Ensures that the Company, Berkshire Bank and their affiliates have in place sound compliance management systems (“CMS”) as required by all applicable regulators and the CFPB
Audit Committee
For information about the audit committee and the audit committee financial expert, please see table above and pages 65-66 in this proxy statement.
Identification and Evaluation of Director Candidates
The Corporate Governance/Nominating Committee is responsible for identifying and recommending to the Board of Directors candidates for Board membership. For purposes of identifying nominees, the Corporate Governance/Nominating Committee relies on personal contacts of the committee members and other members of the Board of Directors, as well as its knowledge of members of the communities served by the Company and its subsidiaries. The Corporate Governance/Nominating Committee will also consider director candidates recommended by shareholders in accordance with the policy and procedures set forth below. The Corporate Governance/Nominating Committee has not previously used an independent search firm to identify nominees.
In evaluating potential nominees, the Corporate Governance/Nominating Committee determines whether the candidate is eligible and qualified for service on the Board of Directors by evaluating the candidate under certain criteria, which are described below under “Director Eligibility Requirements.” If an individual fulfills these criteria, the Corporate Governance/Nominating Committee will conduct a background check and interview the candidate to further assess the qualities of the prospective nominee and the contributions he or she would make to the Board.
22
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Corporate Governance
Criteria for Nomination to the Board of Directors
The Corporate Governance/Nominating Committee has adopted a set of criteria that it considers when it selects individuals to be nominated for election to the Board of Directors. A candidate must meet the eligibility requirements set forth in the Company’s bylaws, including a residency requirement, which may be waived for otherwise qualified individuals with Board approval, and a requirement that the candidate not have been subject to certain criminal or regulatory actions. A candidate also must meet any qualification requirements set forth in any Board or committee governing documents.
If the candidate is deemed eligible and qualified for election to the Board of Directors, the Corporate Governance/Nominating Committee will then evaluate the following criteria in selecting nominees:

financial, regulatory and business experience;

familiarity with and participation in the local communities;

integrity, honesty and reputation in connection with upholding a position of trust with respect to customers;

dedication to the Company and its shareholders; and

independence.
The Committee also will consider any other factors the Corporate Governance/Nominating Committee deems relevant, including age, diversity, size of the Board of Directors and regulatory disclosure obligations. We do not maintain a specific diversity policy, but diversity is considered in our review of candidates. Diversity is considered in terms of how a candidate’s background, experience, qualifications, attributes and skills may complement, supplement or duplicate those of the Board.
With respect to nominating an existing director for re-election to the Board of Directors, the Corporate Governance/Nominating Committee will consider and review an existing director’s Board and committee attendance and performance; length of Board service; the experience, skills and contributions that the existing director brings to the Board; and independence.
23
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Corporate Governance
Director Eligibility Requirements:

No person shall be eligible for election or appointment to the Board of Directors: (i) if such person has, within the previous ten years, been the subject of supervisory action by a financial regulatory agency that resulted in a cease and desist order or an agreement or other written statement subject to public disclosure under 12 U.S.C. 1818(u), or any successor provision; (ii) if such person has been convicted of a crime involving dishonesty or breach of trust which is punishable by imprisonment for a term exceeding one year under state or federal law; (iii) if such person is currently charged in any information, indictment, or other complaint with the commission of or participation in such a crime; and (iv) except for persons serving as members of the initial Board of Directors or except as otherwise approved by the Board of Directors, unless such person has been, for a period of at least one year immediately prior to his or her nomination or appointment, a resident of a county in which the Company or its subsidiaries maintains a banking office or a county contiguous to any such county.

No person shall be eligible for election or appointment to the Board of Directors if such person is the nominee or representative of a company, as that term is defined in Section 10 of the Home Owners’ Loan Act or any successor provision, of which any director, partner, trustee or shareholder controlling more than 10% of any class of voting stock would not be eligible for election or appointment to the Board of Directors.

No person may serve on the Board of Directors and at the same time be a director of more than two other public companies, or their subsidiaries.

No person shall be eligible for election to the Board of Directors if such person is the nominee or representative of a person or group, or of a group acting in concert (as defined in 12 C.F.R Section 303.81(b)), that includes a person who is ineligible for election to the Board of Directors.

The Board of Directors shall have the power to construe and apply the provisions of the Company’s bylaws and other governance documents, and to make all determinations necessary or desirable to implement such provisions, including but not limited to determinations as to whether a person is a nominee or representative of a person, a company or a group, whether a person or company is included in a group, and whether a person is the nominee or representative of a group acting in concert.
Consideration of Recommendations by Shareholders. It is the policy of the Corporate Governance/​Nominating Committee of the Board of Directors of the Company to consider director candidates recommended by shareholders who appear to be qualified to serve on the Company’s Board of Directors. The Corporate Governance/Nominating Committee may choose not to consider an unsolicited recommendation if no vacancy exists on the Board of Directors and the Corporate Governance/​Nominating Committee does not perceive a need to increase the size of the Board of Directors. To avoid the unnecessary use of the Corporate Governance/Nominating Committee’s resources, the Corporate Governance/Nominating Committee will consider only those director candidates recommended in accordance with the procedures set forth below.
24
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Corporate Governance
Procedures to be Followed by Shareholders. To submit a recommendation of a director candidate to the Corporate Governance/Nominating Committee, a shareholder should submit the following information in writing, addressed to the Chairman of the Corporate Governance/Nominating Committee, care of the Corporate Secretary, at the main office of the Company:
1.
The name of the person recommended as a director candidate;
2.
All information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934;
3.
The written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serving as a director if elected;
4.
As to the shareholder making the recommendation, the name and address of such shareholder as it appears on the Company’s books; provided, however, that if the shareholder is not a registered holder of the Company’s common stock, the shareholder should submit his or her name and address along with a current written statement from the record holder of the shares that reflects ownership of the Company’s common stock; and
5.
A statement disclosing whether such shareholder is acting with or on behalf of any other person and, if applicable, the identity of such person.
In order for a director candidate to be considered for nomination at the Company’s annual meeting of shareholders, the recommendation must be received by the Corporate Governance/Nominating Committee at least 120 calendar days before the date the Company’s proxy statement was released to shareholders in connection with the previous year’s annual meeting, advanced by one year. The Company has not received any recommendations from shareholders for director candidates to be considered for election at the Company’s 2017 Annual Meeting of Shareholders.
Board Risk Oversight
The Board oversees the Company’s risk profile and management’s processes for assessing and managing risk, both as a whole board and through its committees. At least annually, the Board reviews strategic risks and opportunities facing the company and certain of its businesses. Other important categories of risk are assigned to designated Board committees that report back to the full Board. In general, the committees oversee the following risks:
Audit Committee

Accounting and Financial Reporting

Compliance with Legal and Regulatory Requirements Related to Accounting and Financial Reporting
Compensation Committee

Compensation Programs

Talent Acquisition, Retention and Development
Corporate Governance/ Nominating Committee

Governance Policies and Procedures

Board Organization and Membership
Risk Management and Capital Committee

Credit Risk

Interest Rate Risk

Liquidity and Capital Risk

Operational and Strategic Risk
Regulatory and Compliance Committee

Legal and Regulatory Compliance

Cybersecurity
25
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Director Compensation
Code of Business Conduct
The Company has adopted a Code of Business Conduct that is designed to promote the highest standards of ethical conduct by the Company’s directors, executive officers and employees. The Code of Business Conduct, which applies to all employees and directors, addresses conflicts of interest, the treatment of confidential information, general employee conduct and compliance with applicable laws, rules and regulations. The Code of Business Conduct is designed to deter wrongdoing and promote honest and ethical conduct, the avoidance of conflicts of interest, full and accurate disclosure and compliance with all applicable laws, rules and regulations. In addition, the Code of Business Conduct encourages and provides a mechanism for all employees to report apparent or suspected violations of the Code or other misconduct by means of an anonymous “whistleblower” hotline administered by the Company’s Audit Committee through an independent third-party vendor. A copy of the Code of Business Conduct can be found in the Governance Documents portion at the Company’s investor relations website (ir.berkshirebank.com).
Anti-Hedging and Pledging Restriction Policy
The Company discourages the practices of hedging and/or pledging of Company common stock by officers and directors, and has policies relating to such practices. Pursuant to the Company’s insider trading policy and stock ownership guidelines, officers and directors of the Company are prohibited from engaging in any hedging transactions (which include short sale transactions, purchases of Company common stock on margin, and buying or selling any puts, calls or other options that have the effect of reducing the economic exposure to the shares of common stock). In addition, officers and directors are discouraged from pledging company securities as collateral for margin purchases or a loan. However, exceptions to this pledging limitation may be granted, if good cause is shown.
Director Compensation
The Company uses a combination of cash and restricted stock to attract and retain qualified candidates to serve on the Board. Restricted stock grants are intended to align directors’ interests with those of the Company’s shareholders. The Compensation and Corporate Governance/Nominating Committees review director compensation and benefits annually and make recommendations to the Board. The following table provides the compensation received by individuals who served as directors (except for Mr. Daly, whose compensation is reported in the Summary Compensation Table) of the Company during the 2016 fiscal year. The stock award amounts in 2016 were unchanged from the prior year. Mr. Daly does not receive separate compensation for his service on the Board.
Name
Fees Earned or
Paid in Cash
($)
Stock
Awards
($)(1)
Option
Awards
($)
All Other
Compensation
($)(2)
Total
($)
Paul T. Bossidy 61,000 35,000 154 96,154
Thomas R. Burton(3)(8) 56,000
10,013 66,103
Robert M. Curley(4) 62,000 35,000 109,790 206,790
John B. Davies 62,000 35,000 1,864 98,864
Rodney C. Dimock(8) 62,000 35,000 1,864 98,864
J. Williar Dunlaevy(5) 56,000 35,000 1,967 92,967
Susan M. Hill(6)(8) 61,000 35,000 3,764 99,764
Cornelius D. Mahoney 62,000 35,000 1,864 98,864
Laurie Norton Moffatt 56,000 35,000 950 91,950
Richard J. Murphy 56,000 35,000 950 91,950
Barton D. Raser(7)(8) 56,000 35,000 1,878 92,878
William J. Ryan 76,000 35,000 758 111,758
Patrick J. Sheehan 37,333
37,333
Richard D. Suski(8)(9) 28,000
63,000 91,000
D. Jeffrey Templeton 56,000 35,000 1,864 92,864
26
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
Proposal 2: Election of Directors  • Director Compensation
(1)
Represents the grant date fair value of the restricted stock awards which has been computed in accordance with the stock based accounting rules under FASB ASC Topic 718. Amounts shown are the aggregate grant date fair value of restricted stock awards, with the grant date fair value based on the closing price of the Company’s common stock on the applicable grant date. All 2016 awards vest over a three-year period. See Note 19 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2016. Since January 30, 2004, no stock options have been granted to any directors. As of December 31, 2016, each director (except for Mr. Daly, whose compensation is reported in the Summary Compensation Table below) had the following number of unvested shares of restricted stock and stock options outstanding:
Name
Unvested
Restricted
Stock Held In
Trust
Stock Options
Outstanding
Paul T. Bossidy 2,067
Thomas R. Burton 1,260
Robert M. Curley 2,597
John B. Davies 2,597
Rodney C. Dimock 2,597
J. Williar Dunlaevy 2,597 7,455
Susan M. Hill 2,597
Cornelius D. Mahoney 2,597
Laurie Norton Moffatt 2,597
Richard L. Murphy 2,597
Barton D. Raser 2,597
William J. Ryan 2,624
Patrick J. Sheehan 1,260
Richard D. Suski 1,260
D. Jeffrey Templeton 2,597
(2)
Reflects dividends paid when restricted stock becomes vested.
(3)
Mr. Burton recognized $10,013 in imputed income on split dollar insurance.
(4)
The total amount included in “All Other Compensation” reflects Mr. Curley’s salary in the amount of  $100,000 as Chairman of the New York region of Berkshire Bank, dividends of  $3,200 on restricted stock awards that vested during 2016, a non-elective 401(k) contribution of  $3,000, and club dues of  $3,590.
(5)
Mr. Dunlaevy recognized $103 in imputed income on split dollar insurance.
(6)
Ms. Hill recognized $1,900 in imputed income on split dollar insurance.
(7)
Mr. Raser recognized $14 in imputed income on split dollar insurance.
(8)
Thomas R. Burton, Rodney C. Dimock, Susan M. Hill and Barton D. Raser retired from the Board of Directors on December 15, 2016. Richard D. Suski did not stand for re-election to the Board of Directors at the Company’s 2016 Annual Meeting and retired from the Board of Directors on May 5, 2016.
(9)
Reflects $63,000 in retirement benefits paid during the period.
Retainers for Non-Employee Directors. The following table sets forth the applicable retainers that will be paid to our non-employee directors for their service on our Board of Directors during 2017. These amounts are unchanged from the prior year.
Annual Cash Retainer for Board Service $ 40,000
Annual Cash Retainer for Chairman of the Board of Directors $ 60,000
Annual Equity Retainer for Board Service $ 35,000
Annual Cash Retainer for Audit Committee Chair $ 10,000
Annual Cash Retainer for all other Committee Chairs $ 6,000
Annual Cash Retainer for Attendance at all Committee Meetings $ 8,000
27
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
[MISSING IMAGE: berkshirehills-headv2.jpg]
Proposal 3:
Advisory Vote on Executive Compensation
The Board of Directors recommends approval of its Named Executive Officer compensation as set forth herein.
Background. In accordance with Section 14A of the Securities Exchange Act of 1934, shareholders are being given the opportunity to vote on an advisory (non-binding) resolution at the annual meeting to approve our executive compensation, as described above under “Compensation Discussion and Analysis,” compensation tables and narrative discussion of Named Executive Officer compensation in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives shareholders the opportunity to endorse or not endorse the Company’s executive pay program.
The purpose of our compensation policies and procedures is to attract and retain experienced, highly qualified executives critical to the Company’s long-term success and enhancement of shareholder value. The Board of Directors believes the Company’s compensation policies and procedures achieve this objective, and therefore recommend shareholders vote “FOR” the proposal.
“Resolved, that the compensation paid to the Company’s Named Executive Officers, as disclosed in this proxy statement pursuant to Item 402 of Securities and Exchange Commission Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.”
Is the Shareholder Vote Binding on the Company? This is an advisory vote only, and neither the Company nor the Board of Directors will be bound to take action based upon the outcome. The Compensation Committee will consider the vote of the shareholders when considering future executive compensation arrangements.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THIS PROPOSAL.
28
BERKSHIRE HILLS BANCORP, INC.| 2017 PROXY STATEMENT

TABLE OF CONTENTS
[MISSING IMAGE: berkshirehills-headv2.jpg]
Compensation
Discussion and Analysis
In this section we explain our compensation philosophy, describe the material components of our executive compensation program, and review the 2016 compensation decisions for our Named Executive Officers listed below. Their compensation is set forth in the Summary Compensation Table and other compensation tables contained in this Proxy Statement. The following Compensation Discussion and Analysis (“CD&A”) focuses on the key factors we believe shareholders should focus on in their evaluation of our “Say-on-Pay” proposal.
Named Executive Officers(1)
Michael P. Daly Chief Executive Officer
James M. Moses(2) Senior Executive Vice President and Chief Financial Officer
Richard M. Marotta President
Sean A. Gray Chief Operating Officer
George F. Bacigalupo Senior Executive Vice President, Commercial Banking
Josephine Iannelli(3) Former Chief Financial Officer
(1)
The principal positions listed above represent the titles of each of the Named Executive Officers at Berkshire Bank, the wholly owned subsidiary of Berkshire Hills Bancorp, Inc. The principal position of each of the Named Executive Officers at Berkshire Hills Bancorp, Inc. is as follows: Mr. Daly is President and Chief Executive Officer, Mr. Moses is Senior Executive Vice President and Chief Financial Officer, Mr. Marotta is Senior Executive Vice President, Mr. Gray is Senior Executive Vice President, and Mr. Bacigalupo is Executive Vice President.
(2)
Mr. Moses joined the Company on July 25, 2016.
(3)
Ms. Iannelli resigned from the Company effective as of July 5, 2016.
Table of Contents
36
36
38
40
41
41
41
42
45
49
50
50
50
51
52
52
53
53
53
54
29
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Executive Summary
Business Overview
Over the last several years we have grown our company through disciplined expansion from $5.5 billion to more than $9 billion in total assets. Our strategy is to improve profitability through positive operating leverage driven by revenue growth and expense discipline. We are developing a valuable franchise that will be attractive to our markets and the investment community.
We have made key investments in people and infrastructure, including hiring seasoned lending teams across our market, expanding and upgrading our personnel and systems in compliance, risk and finance, and restructuring our executive team to include more diversity and better engagement and accountability. We have added economies of scale by acquiring whole banks within and adjacent to our footprint that deepen and expand our market presence. We have refocused and improved the talent of our wealth management and insurance businesses to better serve our customers, and our strategic lines of business have been built out organically and through acquisition, including specialty lending, wholesale banking and residential mortgage banking.
These initiatives have diversified our revenue streams, created efficiencies and improved profitability. They also provide a solid foundation for delivering stronger returns to our shareholders. We now serve more customers across our expanded footprint, and are operating greater numbers of business lines in both regional and national markets. By bringing together a strong employee base, a dedicated strategy and operational efficiency, we can continue to offer our customers the products and services they need, our employees an inspirational workplace, our communities the support they seek and our shareholders the returns they deserve.
Strategic Highlights
Berkshire had a record year for revenues and earnings in 2016, and it was one of our best years ever in improving our profits and expanding our business.
[MISSING IMAGE: img_1700735-strathlights.jpg]
30
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
[MISSING IMAGE: t1700735_bar-chart.jpg]
*
Please see our 2016 Summary Annual Report and 2016 Annual Report on Form 10-K for more information regarding our performance.
Shareholder Engagement and Responsiveness
Since the implementation of Say-on-Pay, we have received support above 90% for our Advisory Vote on Executive Compensation. In 2016 we received 67% of votes in favor. We were disappointed in these results and the Board of Directors took actions over the past year to engage shareholders to better understand their views and make enhancements to our compensation and governance practices.
What We Did

Proactively reached out to our largest institutional shareholders, representing 75% of our institutional ownership, to solicit their feedback.

Our Independent Chairman of the Board and members of our management team had extensive dialogue with a diverse group of our shareholders during the year and obtained additional feedback from advisors and other knowledgeable third parties.

Through this engagement, we solicited feedback and answered questions about our executive compensation programs and Board governance practices.
What We Heard and How We Responded

There was general support for the design of our compensation plans, but some shareholders desired more disclosure around incentive awards, particularly in cases where there is a qualitative/​discretionary element.

We enhanced our proxy disclosure this year to include more detail around the philosophy and process utilized by the Compensation Committee in making compensation decisions.

Our shareholders also expressed a view that the proxy statement should provide greater detail to explain the process and rationale of compensation awarded to individual executives.

Individual achievements of Named Executive Officers are discussed with enhanced disclosure around individual performance and awards.

Most shareholders stated that a declassified Board with annual elections of all board members was preferred.

The Board has recommended moving to the annual election of all directors as presented in Proposal 1 of this proxy statement.

There was also a desire for better disclosure around the composition of the Board, including skill sets, background and our recruiting and nomination process.

Disclosure around the composition of the Board has been increased, including a skills matrix and detail on our recruiting and nomination process.

Some shareholders suggested adopting a Proxy Access provision in our bylaws.

The Board has had extensive conversations about proxy access and will continue to evaluate this matter.
31
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Executive Compensation Key Principles
Our philosophy is to provide an executive compensation program that is consistent with creating long-term value for our shareholders and promoting sound risk management. The key principles that support our philosophy are:

Attract and retain highly talented executives committed to our success

Pay for Performance

Align executive interests with those of our shareholders

Manage risk through oversight and compensation design features and practices
Key Elements of our Compensation Programs
Compensation Mix
Target Mix

Compensation is made up of base salary, short-term cash incentive (“STI”) and long-term equity incentive (“LTI”)

Target mix is 57% performance based for CEO and 47% performance based for other NEOs
[MISSING IMAGE: t1700735_pie-compmix.jpg]
Long-term/Equity Compensation
LTI Award

Awards consist of 50% performance shares and 50% time-based shares

Performance shares are earned at the end of a 3-year period based on Company performance

Time-based shares are earned proportionally over a 3-year period
[MISSING IMAGE: t1700735_pie-ltia.jpg]
Corporate Performance Measures
Performance Measures

Performance measures and targets are designed to motivate and reward executives for achieving improved earnings and profitability over the long term, driving total shareholder returns and managing risk

Goal setting is aligned with annual and multi-year financial targets
[MISSING IMAGE: t1700735_pie-cpm2.jpg]
*
For reconciliation of non-GAAP measures to their most directly comparable GAAP financial measures, please see Appendix A.
32
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Highlights of our Compensation and Governance Programs
What We Do:
Pay for Performance: A significant portion of each Named Executive Officer’s annual compensation target is variable and tied to company and individual performance results. The Company uses a mix of performance metrics and our short- and long-term plans provide a balanced timeframe for incentive opportunities.
Link Performance Measures with Strategic Objectives: Performance measures and individual goals for incentive compensation are linked to strategic, operating and financial goals designed to create long-term shareholder value.
Annual Say-on-Pay Vote: We conduct an annual Say-on-Pay advisory vote.
Independent Compensation Consultant: The Compensation Committee engages its own independent compensation consultant to review the Company’s executive compensation program and practices.
Shareholder Engagement: As part of the Company’s shareholder outreach program, members of the Compensation Committee and members of management welcome engagement with shareholders to better understand their perceptions and views on our executive compensation program.
Stock Ownership Guidelines: We have significant stock ownership guidelines requiring our executives and directors to hold substantial equity ownership.
Clawback Policy: The clawback policy allows the Board to recover incentive compensation paid to an executive if the financial results that the awards were based on are materially restated due to fraud, intentional misconduct or gross negligence.
Incentivize Sound Risk Management: Our compensation program includes features intended to discourage employees from taking unnecessary and excessive risks, including balanced performance metrics, emphasis on long-term shareholder value creation, and clawback provisions.
What We Don’t Do:
Gross-ups for Excise Taxes: We don’t provide change-in-control tax gross-ups to individuals hired after 2009 (only two legacy agreements are still in place).
Hedging and Pledging: All of our employees and directors are prohibited from engaging in hedging, monetization, derivative or similar transactions with company securities. We also have a policy that discourages pledging of company securities, with very limited exceptions.
Contracts: Our executives, with the exception of the CEO, are all employed “at will” and the relationship may be terminated by the Company or the employee at any time without any severance payments.
No payment of dividends on any restricted stock awards until vested.
33
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Summary Description of 2016 Compensation Results
The table below summarizes the Compensation Committee’s 2016 compensation actions which were consistent with our long-standing commitment of aligning pay with performance and the interests of our shareholders. For more details on the program design and decisions made in 2016, please see pages 36-39 in this CD&A. For reconciliation of non-GAAP measures to their most directly comparable GAAP financial measures, please see Appendix A.
Base Salary

Our competitive guidelines target executive salaries to be near market median.

No salary adjustments were made for the CEO and the majority of the NEOs during the January 2016 annual review process. Mr. Bacigalupo and Ms. Iannelli received salary increases (8% and 14%, respectively) based on competitive positioning and individual performance.

No salary adjustments were made for any NEO during the January 2017 annual review process.
Short-Term Incentive Plan (STI)

For the 2016 plan, we added the measure of core return on assets, reflecting the Company’s focus on improved profitability.

No changes were made to the target payout percentages in 2016.

Despite the pool funding at 126% based on financial results, the Compensation Committee reduced the final incentive funding and potential strategic modifier to put more emphasis on the alignment of executive compensation with shareholder returns.

The Compensation Committee adjusted the total annual incentive pool to 112% of target and allocated individual awards at 86% to 138% of target.
Long-Term Incentive Plan (LTI)

We exceeded our core EPS goal and came in slightly below our core ROE goal for the 2014 LTI performance grants, which used a measurement period of 2014 to 2016. The performance shares earned equated to 95.8% of the target award established in January 2014.

2016 LTI grants were awarded in consideration of Company and individual performance and varied from 108% to 134% of target for the NEOs. Awards are split 50% as performance shares and 50% as time-vested shares.

The performance goals for the 2016 to 2018 plan were set to incentivize double-digit increases in both core EPS and core ROE and added a modifier for relative ROE performance.
Total Compensation

We are a company focused on growth and as such have a strong focus on creating long-term shareholder value. As a result of shareholder feedback this year, we realigned our rewards to better meet shareholder expectations and acknowledge the importance of total shareholder return performance.

NEO total direct compensation was 7% lower than in 2015 despite stronger 2016 performance.

These results illustrate that our 2016 program and pay decisions improved our pay-for-performance alignment.
34
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
NEO Pay-For-Performance Alignment
The graph below demonstrates the alignment over the past five years of shareholder value creation and key operational metrics with NEO total annual direct compensation, which consists of base salary, short-term and long-term incentive awards. Most of the performance goals have been increased by the Compensation Committee over the last five years and all increased last year. Compensation reflects performance, as well as promotions and increases in responsibility due to growth, as reflected in net income. Total shareholder return has been positive in all years with a 30% gain in 2016.
[MISSING IMAGE: t1700735_barchrt3a.jpg]
(1)
Reflects the year-to-year performance indexed to a 2011 base year for total shareholder return (“TSR”), and a 2012 base year for other performance metrics, at 100. Prior year TSR is shown to correspond with the timing of annual compensation decisions.
(2)
Direct compensation totals are made up of base salary, Short Term Incentive (“STI”) and Long Term Incentive (“LTI”). This measure excludes sign-on bonuses and special grants, where were supported by specific events.
(3)
TSR consists of stock price appreciation plus reinvested dividends; source: SNL Financial
35
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Compensation Philosophy and Objectives
The primary philosophy and objective of our compensation program is to align the interests of our executives with shareholders by rewarding performance against established corporate financial and strategic goals, solid executive leadership and strong individual executive performance. We strive to attract, motivate and retain a highly qualified and talented team of executives who will lead Berkshire to maximize long-term performance and earnings growth. The Compensation Committee regularly reviews executive compensation program elements to ensure they are consistent with safe and sound business practices, regulatory requirements, emerging industry best practices and shareholder interests.
Key Principles That Support Our Philosophy
Attract and retain highly talented executives committed to our success

Provide competitive total compensation that enables us to attract and retain highly talented executives with experience and leadership abilities to grow and sustain our business

Target total compensation opportunities to reflect the current market defined as banks similar in size, region and business model to Berkshire
Pay for Performance Alignment

We measure our success through a balanced portfolio of performance metrics that rewards corporate and individual success

A significant portion of total compensation is “at risk” and based on short and long-term performance

Financial performance results fund our annual incentive plan and determine long-term equity vesting

Our long-term equity awards are granted based on a holistic assessment of Company and individual performance, then split 50/50. Half are tied to 3-year performance (EPS and ROE); the other half are time-vested over 3 years

Higher (i.e. above market) compensation results only if performance exceeds our goals; lower compensation (i.e. below market) will result if our performance falls below expectations
Align executive interests with those of our shareholders

Our performance goals are directly aligned with our strategic and operating objectives which creates long-term shareholder value

We have rigorous stock ownership requirements to ensure our executives hold stock throughout their tenure as executives

A significant portion of executive compensation, including all of our long-term incentive, is in the form of stock

The Compensation Committee reviews our program and pay–for-performance relationships on a regular basis
Manage risk through oversight and compensation design features and practices

Our program incorporates a balanced approach that includes pay that is fixed and variable, short- and long-term, and in the form of both cash and equity

We use multiple goals in our incentive plans to reinforce strategic, operational, risk and shareholder considerations

We consider performance on a “holistic” basis, allowing for Committee discretion to adjust awards in consideration of risk management objectives and strategic success

We balance short-term and long-term incentives, with 3 year payouts on the long-term plan, which considers our absolute and relative performance

Our incentive plans cap maximum payments

We have a clawback policy that allows for recoupment of compensation for financial restatement or misconduct
36
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Compensation Drivers

Incentive plans are designed to encourage achievement of our strategic business goals and reinforce our business values

Pay levels are fair, competitive and internally equitable

We pay for performance and the attainment of our vision, business strategy, operating imperatives and results

We recognize contributions of the individual

We are mindful of the market
2016 Target Pay Mix
Our compensation program places significant focus on performance-based pay that aligns CEO and NEO pay levels with the Company’s performance. The program rewards our achievements on an annual basis and our ability to deliver long-term value to our shareholders. We have a balanced, risk-appropriate approach to total compensation that includes a mix of fixed/base pay and variable/performance–based pay, cash and equity, and short- and long-term compensation.
Berkshire’s target pay mix is established by the Compensation Committee through an annual review of peer practices, pay for performance incentives, risk management objectives and shareholder alignment. For 2016, our compensation targets and pay mix were as follows and are designed to be in-line with market practice:
CEO
[MISSING IMAGE: t1700735_piechrt6.jpg]
[MISSING IMAGE: t1700735_piechrt7.jpg]
Other NEOs
[MISSING IMAGE: t1700735_piechrt8.jpg]
[MISSING IMAGE: t1700735_piechrt9.jpg]
(1)
Market averages provided by independent compensation consultant and determined by using pay practices at peers listed elsewhere in this proxy statement.
37
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Decision-Making Process
Our Compensation Committee, which is composed solely of independent directors, is responsible for establishing, implementing and continually monitoring all elements of compensation for the Company’s CEO and NEOs.
Setting Performance Goals

Each year, the Compensation Committee reviews our compensation program to determine competitiveness and effectiveness, and evaluate whether any changes should be made for the next fiscal year. At the beginning of each fiscal year, the Compensation Committee determines the components of compensation for each NEO and sets the performance goals for each corporate performance measure.

Annually the Compensation Committee establishes CEO performance goals; the CEO sets individual performance goals for each of the other NEOs, subject to the review of the Compensation Committee. The individual goals are designed to drive our strategic corporate goals.

The Compensation Committee meets regularly throughout the year, both with management and in executive session, and reviews the Company’s performance to date against the performance goals.
Determining Compensation

At the end of each fiscal year, the Compensation Committee conducts a review of each NEO and the Company’s performance measured against established performance goals. As part of this review process, the CEO reviews with the Compensation Committee the performance of each NEO relative to the individual goals and presents his compensation recommendations based on his review. The Compensation Committee exercises discretion in modifying any compensation recommendations and then approves all compensation decisions for the NEOs.

The CEO’s performance is reviewed by the Compensation Committee in conjunction with a self-assessment and discussion with the Compensation Committee and other independent directors. The CEO is not present when the Committee makes decisions on his compensation.

The Compensation Committee’s objective is to ensure that total compensation paid to the NEOs is fair, reasonable and performance based, while aligning with shareholder interests. In addition, the Compensation Committee annually conducts an executive compensation review with the compensation consultant to ensure market competitiveness.
Contribution from the Independent Compensation Consultant

During 2016, the consultant provided a number of consultations and presentations to the Compensation Committee. These included a presentation on executive compensation trends and external developments, an annual competitive evaluation of NEO compensation, draft reviews of STI and LTI goals and payout levels, draft review and comments on the CD&A, development of the peer group used for competitive analysis and attending committee meetings when requested by the Compensation Committee Chair.
38
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Factors Considered in Compensation Decision Process
The Compensation Committee considers many factors when making pay decisions throughout the year. In addition to the market data provided by the independent consultant, the Compensation Committee also considers various analyses, information and input including, but not limited to:
Overall operational and financial performance
Stock price performance and total shareholder return on an absolute and relative basis
Executive’s individual performance results relative to their individual financial and strategic goals
Strategic plan progress and performance relative to annual budget
Tally sheets
Demonstration of behaviors that support our culture and brand
Executive stock ownership levels
Qualitative input from the Compensation Committee and other independent directors
External influences, economic conditions and industry factors
Risk assessment considerations
Internal equity
Compensation trends and best practices
39
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Benchmarking Analysis — Compensation Peer Group
The Compensation Committee considers the structure of compensation programs and pay levels at other publicly traded banks similar in size and region to Berkshire when evaluating our compensation program. Annually, the Compensation Committee’s independent compensation consultant conducts a comprehensive competitive market analysis using the peer group and other industry survey data, as well as compensation best practices. The peer group is developed by the independent compensation consultant, approved by the Compensation Committee and used as part of the perspective consideration by the Compensation Committee to analyze and set annual salaries and incentive target opportunities. The Compensation Committee annually reviews and updates the peer group, as necessary upon recommendation of the Compensation Consultant.
Peer Group Criteria: The peer group is based on objective parameters that reflect institutions of similar asset size (approximately ½ – 2x Berkshire’s assets) and located in the Northeast/Mid-Atlantic region plus Ohio.
The following group shows the peer companies identified in 2015 and used for 2016 pay program considerations:
Peer
Ticker
State
Asset Size
($B)(2)
Market Cap
($B)(2)
Revenue
($MM)(2)
Brookline Bancorp, Inc.
BRKL
MA
6.4
1.2
226
Community Bank System, Inc.
CBU
NY
8.7
2.7
430
Dime Community Bancshares, Inc.
DCOM
NY
6.0
0.8
219
Eagle Bancorp Inc.
EGBN
MD
6.9
2.1
285
First Commonwealth Financial Corp.
FCF
PA
6.7
1.3
264
First Financial Bancorp.
FFBC
OH
8.4
1.8
342
Flushing Financial Corp.
FFIC
NY
6.1
0.8
225
Independent Bank Corp.
INDB
MA
7.7
1.9
310
National Penn Bancshares, Inc.(1)
NPBC
PA
n/a
n/a
n/a
NBT Bancorp Inc.
NBTB
NY
8.9
1.8
380
Northwest Bancshares, Inc.
NWBI
PA
9.6
1.8
393
Park National Corp.
PRK
OH
7.5
1.8
316
Provident Financial Services, Inc.
PFS
NJ
9.5
1.9
314
S&T Bancorp, Inc.
STBA
PA
6.9
1.4
258
Sterling Bancorp
STL
NY
14.2
3.2
475
Tompkins Financial Corp.
TMP
NY
6.2
1.4
249
TrustCo Bank Corp NY
TRST
NY
4.9
0.8
165
United Financial Bancorp, Inc.
UBNK
CT
6.6
0.9
201
WSFS Financial Corp.
WSFS
DE
6.8
1.5
296
Peer Group Median(3)
6.9
1.8
296
Berkshire Hills Bancorp, Inc.
BHLB
MA
9.2
1.3
298
(1)
National Penn Bancshares, Inc. was acquired by BB&T Corporation on April 1, 2016.
(2)
Asset size and market cap as of 12/31/16; revenue FY2016; source: SNL Financial.
(3)
Peer group median asset size in 2015 (when this peer group was identified) was $6.4B compared to Berkshire’s assets of  $7.2B at the time.
The Compensation Consultant used several other sources of data to identify general compensation trends, as well as published industry surveys and a proprietary database of national banking compensation data.
40
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
2016 Compensation Program & Decisions
The Company’s compensation program consists of four main components: Base Salary, Annual Incentives, Long-Term Incentive/Equity, and Benefits and Perquisites. The following sections summarize the role of each component, how decisions are made and the resulting 2016 decision process as it relates to the NEOs.
Base Salary
The Company’s base salary program is designed to provide competitive base pay reflective of an executive’s role, responsibilities, contributions, experience, leadership and performance. Salaries are generally targeted to be within the range of market median and are expected to provide sufficient base pay to discourage inappropriate risk taking by executives.
When setting NEO’s base salary, the Compensation Committee aims to provide competitive and fair base compensation that reflects roles and contributions. Each year our independent compensation consultant provides market guidelines based on its competitive assessment considering a composite of market data from the custom proxy peer group as well as other data sources of banking compensation.
In December of each year, the Compensation Committee reviews each NEO’s base pay relative to competitive market practice, individual experience, expertise, performance and contributions, as well as the financial and economic environment, in preparation for January considerations. Base salary increases are not guaranteed and the review does not always result in a base pay adjustment. Input from the Chief Executive Officer is considered in setting the other named executive officer salaries; however, the Compensation Committee is solely responsible for determining the Chief Executive Officer’s salary.
2016 Decisions. No salary adjustments were made during the January 2016 or January 2017 annual review process, other than two pay increases. As part of the Compensation Committee’s annual salary review process for 2016, it was decided that it was appropriate to increase Mr. Bacigalupo’s base to $350,000 from $325,000 and Ms. Iannelli’s base to $400,000 from $350,000. These increases were reflective of market factors and specific performance and contributions of the executives. Mr. Moses received a starting salary of  $350,000 when he joined the Bank in July 2016, reflective of his experience and market dynamics. He also received a one-time $100,000 cash sign-on bonus as recruitment inducement.
2016 Salary
Salary
adjustment in
2016
2017 Salary
Salary
adjustment in
2017
Daly 700,000 0% 700,000 0%
Moses(1) 350,000 n/a 350,000 0%
Marotta 500,000 0% 500,000 0%
Gray 425,000 0% 425,000 0%
Bacigalupo 350,000 8% 350,000 0%
Iannelli(2) 400,000 14% n/a n/a
(1)
Mr. Moses joined the Company on July 25, 2016
(2)
Ms. Iannelli resigned from the Company effective as of July 5, 2016
41
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Short-Term Incentive Plan (STI)
The Company’s short-term incentive compensation program is designed to align executives’ interests with the Company’s strategic plan and critical annual performance goals by providing meaningful “pay-at-risk” that is earned each year based on performance results. It also seeks to motivate and reward achievement of specific Company, business unit and individual performance goals with competitive compensation when performance goals are achieved; above or below median pay when performance results are above or below goals.
At the start of each year, the Compensation Committee defines the corporate STI goals which serve as the basis to fund the plan and approves the individual goals which will be used to determine the payout. Each year in January, performance is assessed and the NEOs are then considered for short-term incentive awards based on achievement of those Company and individual goals.

Rewards under this plan represent compensation that must be re-earned each year based on Company and individual performance results.

The Compensation Committee approves the Chief Executive Officer’s individual goals based on the strategic plan/budget.

The CEO prepares goals for NEOs that support our strategic plan and budget and reflect each NEO’s role. The Compensation Committee can modify the goals at their discretion and approves the final goals.

NEO incentive award targets and pay-out ranges are reviewed and established annually by the Compensation Committee based on the Company’s overall performance and the independent compensation consultant’s benchmarking analysis.

Award targets are designed to be in-line with our goal to provide a meaningful, but risk balanced, portion of total compensation that is based on annual results.

For 2016, target annual incentive opportunities were 55% of base salary for the CEO and 40% for other NEOs. Actual payouts, however, vary each year based on a combination of Company and individual performance.

Maximum incentive pool funding is capped at 150% of target; maximum award for any participant (based on individual performance) is capped at 200% of target.
The incentive pool is funded based on Corporate Scorecard results consisting of financial goals and a strategic modifier. Once the pool funding is known, individual performance is assessed to determine and allocate the actual awards. The Chief Executive Officer provides the Compensation Committee with a summary of each NEO’s performance and incentive recommendations based on individual performance results relative to specific goals set at the start of the year. The Compensation Committee conducts a similar review of the Chief Executive Officer, with input from the independent directors of the board. The Compensation Committee determines the Chief Executive Officer award and approves the named executive officer awards. The Compensation Committee retains the discretion to modify incentive payouts based on significant individual or Company performance shortfalls and/or regulatory and safety and soundness concerns and in consideration of risk management goals.
42
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Company Measures and Funding of the Incentive Pool. The Compensation Committee has established four performance goals that determine the pool that will be available for incentive awards:
PERFORMANCE
MEASURE
DEFINITION
Core Earnings
Core Net Income (a non-GAAP measure that excludes on an after-tax basis certain amounts which the Company has identified as unrelated to its normal operations; described as “adjusted net income” in Form 10-K)
Expense Management
Efficiency Ratio (a non-GAAP measure calculated as non-interest expense as a percentage of revenue; adjusted for designated items, intangibles, and tax credit adjustments)
Asset Quality
Criticized Asset Ratio (calculated as criticized assets as a percentage of the sum of Bank Tier 1 capital and the loan loss allowance; criticized assets are those assets rated Special Mention or worse in Berkshire Bank’s risk rating system)
Core Return on Assets
Core Return on Assets (a non-GAAP measure calculated as core net income as a percentage of total average assets)
*
For a summary of certain non-GAAP performance measures, please see Appendix A.
The Compensation Committee also established a minimum trigger or gate level of performance, which is defined at 75% of the targeted core earnings, which must be achieved in order for the plan to fund any awards. Once the minimum is achieved, the incentive pool funding is determined based on Company performance relative to the four performance goals, evenly weighted.
Each goal has a defined range of acceptable performance; threshold funds the pool at 50%; target performance funds the pool at 100% and stretch performance funds at 150%. Funding is interpolated proportionally based on actual performance within these ranges. These ranges are unchanged from the prior year and are viewed as within a normal range among Company peers. The Committee also considers the achievement of the Company’s strategic plan/goals and can modify the pool +/- 15% based on its assessment of performance of these broader initiatives. The Committee will consider and discuss overall risk and can also adjust the pool downward to reflect any risk, regulatory or shareholder issues. The objective is to ensure our incentive plan is funded appropriately based on profits and strategic results.
In 2016, a new measure for core return on assets was added to the performance goals. This reflects the Company’s emphasis on continued profitability improvement. Specific targets set for 2016 were based on the Company’s strategic plans, as well as an assessment of economic and competitive conditions. The earnings, efficiency and asset quality targets represented a significant increase over 2015 targets. The range from target to threshold or stretch was not changed for earnings and efficiency. The range from threshold to stretch was widened for asset quality to allow for more uncertainty in economic conditions and potential merger impacts. The range established for core ROA was viewed as consistent with the earnings and efficiency ranges.
2016 Results
The specific performance goals for each of threshold, target and stretch level achievement, as well as the actual level of performance achieved for fiscal year 2016, are displayed in the following table.
Performance Measure
Weighting
Threshold
Target
Stretch
Result
Funding
Core Earnings
25%
$64.8mm
$68.3mm
$71.7mm
$68.4mm
103%
Expense Management
25%
63.0%
61.0%
59.0%
58.9%
150%
Asset Quality
25%
<31%
<27%
<23%
18%
150%
Core Return on Assets
25%
0.82%
0.86%
0.90%
0.86%
100%
Weighted Funding
126%
Committee Adjusted Final Funding
112%
43
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Our financial results equaled or exceeded target for all measures, with two measures achieving the stretch level. This represented improved performance compared to 2015 for all of these measures and was viewed as strong performance in light of economic and competitive conditions that prevailed in 2016. Based on the weightings factors, the pool resulted in funding at 126% of target. The Compensation Committee determined to reduce the funding pool to 112% and not to include any modifier for the Company’s strategic accomplishments in expanding its markets and building its compliance programs. This determination was made in consideration of feedback from the Company’s shareholder engagement activities and was part of an assessment of overall shareholder engagement and pay for performance alignment. While our incentive plan traditionally has focused on our internal strategic plan and growth initiatives, we recognize that some of these investments do not materialize in immediate shareholder returns and the Compensation Committee considered this broader perspective when allocating 2016 incentive pool funding.
Individual Performance.
The 2016 individual goals for each of our NEOs were set in January 2016. The Compensation Committee believes that our NEO’s performance goals should support and help achieve the Company’s strategic objectives, encourage the RIGHT (Respect, Integrity, Guts, Having Fun and Teamwork) behaviors and be tied to their areas of responsibility. Individual goals for the CEO were established with oversight by the Compensation Committee. Individual goals for the other executives were proposed by the CEO and reviewed and approved by the Compensation Committee.
Once the funding of the incentive pool is approved by the Compensation Committee, awards are then allocated based on each participant’s individual performance and contributions toward the Company’s strategic goals. This design is intended to provide a balance of  “team” through the overall plan funding, but allows actual allocation of the awards to reflect individual contributions toward the Company’s success.
At the end of the fiscal year, the Compensation Committee reviewed each named executive officer’s progress against his individual performance goals and contributions to overall company performance and strategic accomplishments. Based on this assessment, an NEO could receive an award from 0% to 200% of the targeted annual incentive. When making the award determinations, the Compensation Committee does not assign a specific weight to any individual goals, but instead reviews each NEO’s progress in aggregate.
The 112% funding results could be adjusted up or down based on individual contribution, provided total awards do not exceed the incentive pool funding. Below is a summary of each NEO’s individual awards and the individual performance contributions considered by the Committee in determining the awards:
Mr. Daly
Goal Results
2016 Approved Award
$460,000
(7% individual adjustment)

Performed strongly against financial measures

Negotiated favorable terms for First Choice Bank acquisition
Oversaw corporate profitability strategies delivering improvement across most major metrics
Directed executive changes and recruitment strengthening the organization
Continued to attract top talent through focus on development and employee engagement
Mr. Moses(1)
Goal Results
2016 Approved Award
$65,500
(0% individual adjustment)

Effective leadership continuity and enhancement in CFO function

Contributed to progress in efficiency and profitability

Led development of Dodd Frank financial disciplines
Integrated financials of December acquisitions for year-end reporting
44
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Mr. Marotta
Goal Results
2016 Approved Award
$275,000
(23% individual adjustment)

Performed strongly against financial measures

Exceeded stretch goals for asset quality

Led Mid-Atlantic expansion strategy
Managed infrastructure development for Dodd Frank $10 billion threshold requirements
Expanded Executive team disciplines in new role as Bank President; managed team through CFO transition
Mr. Gray
Goal Results
2016 Approved Award
$225,000
(18% individual adjustment)

Performed strongly against financial measures

Achieved stretch goals for expense management and overall efficiency
Developed management structure and goals for Mid-Atlantic banking and national mortgage banking expansion

Delivered fee revenue growth in support of profitability strategies
Directed adjustments to retail and commercial marketplace strategies with emphasis on growth markets
Mr. Bacigalupo
Goal Results
2016 Approved Award
$120,000
(-23% individual adjustment)

With the growth of the company and recent acquisitions, Mr. Bacigalupo’s role was restructured to focus on middle-market lending

Achieved middle-market commercial growth and revenue targets

Successfully restructured commercial market management operations
Identified and pursued syndication and participation strategies
(1)
Mr. Moses’ target and results prorated from hire date on July 25, 2016
The total short term incentive awards are shown below:
2016
Salary
Target
Percent
Target
Dollars
Funding at
112%
Payout
Adjustment
Payout
Dollars
Percent of
Target
Daly 700,000 55% 385,000 431,200 28,800 460,000 119%
Moses(1) 350,000 19% 58,482 65,500
65,500 112%
Marotta 500,000 40% 200,000 224,000 51,000 275,000 138%
Gray 425,000 40% 170,000 190,400 34,600 225,000 132%
Bacigalupo 350,000 40% 140,000 156,800 (36,800) 120,000 86%
(1)
Mr. Moses’ target and results prorated from hire date on July 25, 2016
Long-term Incentive Plan (LTI)
The Company’s long-term incentive/equity compensation program is designed to align senior executives with long-term interests of the Company and shareholders through stock awards that are tied to three year performance results. The program also seeks to provide reward for superior multi-year performance, encourage stock ownership, and enhance our ability to retain our top performers.
Each year in January, the NEOs are considered for long-term incentive awards under the Company’s Equity Incentive Plans. The Compensation Committee determines, at its discretion, the terms of the equity incentive plan, the timing of the awards, the recipients who may be granted awards, and the form and amount of awards.
45
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Long-term incentive awards are intended to:

Provide a meaningful portion of total compensation in stock-based awards

Align executives with our shareholders

Reward long-term performance

Encourage retention of our key senior executives

Balance compensation rewards with risk through long-term vesting tied to performance
In determining the form and amount of equity awards to be granted to our NEOs in 2016, the Compensation Committee considered competitive market practices, including the market range for each position, Company performance and individual performance, expected future contributions by each individual, recommendations from the CEO (for NEOs other than himself) and each NEO’s total compensation, as well as the financial and economic environment and total stock returns. The Compensation Committee also considered incentives provided by different award types, including increasing shareholder value, avoiding excessive risk taking and encouraging employee retention. As in recent years, the Compensation Committee decided that restricted stock grants with a three year vesting schedule were the most appropriate form of equity compensation for the long-term incentive grant.
For 2016, the equity compensation targets were unchanged from 2015 and remained at 75% of base salary for the Chief Executive Officer and 50% of base salary for other NEOs, which are consistent with peer medians. The Compensation Committee has also set a range for individual grants which can vary up to 150% of target. The total award granted is split into two components: 50% performance shares and 50% time-based shares. The grant range and component shares are unchanged from the prior year as the Compensation Committee considered the program in-line with competitive and best practices.
[MISSING IMAGE: t1700735_chrt-perfvtshares.jpg]
The performance shares are tied to performance goals set at the beginning of the three-year performance period. The actual shares earned at the end of the three-year period will range from 0% to 150% of the target depending on corporate performance, as measured by:
PERFORMANCE
MEASURE
DEFINITION(1)
WEIGHT
Core EPS
Cumulative core earnings per share over the planning period aligned with internal budget goals. (Core EPS is a non-GAAP measure that excludes on an after-tax basis certain amounts from net income which the Company has identified as unrelated to its normal operations; described as “adjusted net income” in the Annual Report on Form 10-K)
50%
Core ROE (with relative modifier)
Average core return on equity over the planning period with a modifier based on our performance relative to a predefined industry index(2) (Core ROE is a non-GAAP measure calculated as core net income as a percentage of total equity)
50%
(1)
For a summary of certain non-GAAP performance measures, please see Appendix A.
(2)
The predefined index is made up of the proxy comparator group defined below
46
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Specific targets set for the 2016 three-year plan were based on the Company’s condition and strategic plans, including an assessment of economic and competitive conditions. The Compensation Committee anticipates steadily increasing core EPS in setting the cumulative three-year goal. The Compensation Committee also anticipates improvement in average core return on equity and believes the Company’s relative ranking compared to peers is an important factor for assessing our overall performance. For our relative goal, we use an industry index to represent an objective and external comparator with predefined criteria (exchange traded banks and thrifts between $5.5 billion and $20 billion in assets (as of September 30, 2016), which are located in the New England, Mid-Atlantic, and Mid-West regions). Assuming thresholds are achieved, the payout for core return on equity will be further adjusted if the Company’s rank, compared to the predefined industry index, is above the 65th percentile or below the 35th percentile.
The component companies of the index are defined at the beginning of the performance period to provide consistency for comparison purposes during the entire performance period. For 2016, the industry index banks are shown below. In order to be counted in the final calculations, a peer company must remain an exchange traded company at the end of the performance period (i.e. some banks may be acquired and will not be included in the final calculation).
Astoria Financial Corporation
Boston Private Financial Holdings, Inc.
Brooklilne Bancorp, Inc.
Capitol Federal Financial, Inc.
Chemical Financial Corporation
Community Bank System, Inc.
Customers Bancorp, Inc.
Eagle Bancorp, Inc.
F.N.B. Corporation
First Commonwealth Financial Corporation
First Financial Bancorp.
First Merchants Corporation
First Midwest Bancorp, Inc.
Flagstar Bancorp, Inc.
Flushing Financial Corporation
Fulton Financial Corporatin
Great Western Bancorp, Inc.
Heartland Financial USA, Inc.
Independent Bank Corp.
MB Financial, Inc.
National Penn Bancshares, Inc.
NBT Bancorp Inc.
Northwest Bancshares, Inc.
Old National Bankcorp
Park National Corporation
Private Bancorp, Inc.
Provident Financial Services, Inc.
S&T Bancorp, Inc.
Sterling Bancorp
Talmer Bancorp, Inc.
TFS Financial Corporation
Tompkins Financial Corporation
UMB Financial Corporation
United Financial Bancorp, Inc.
Valley National Bancorp
The Compensation Committee balances performance goals with the Company’s strategic growth plans as well as with opportunities to reinvest revenues into infrastructure improvement to sustain long-term growth. Capital management decisions also balance return on equity with capital maintenance to support safety and soundness, as well as to provide resources for growth. Within this framework, the Company’s goal is to improve earnings and profitability over the long term, leading to improved performance relative to peers. This should translate into higher relative total shareholder return and equity returns exceeding our cost of capital. Once the Compensation Committee establishes targets, it sets threshold and stretch goals within this same framework, while considering minimum acceptable performance and avoiding incentivizing excess risk taking for compensation above target.
For 2016, the Compensation Committee granted awards that were at or above target for all NEOs. On average, the grants were 23% above target, which was down from 36% in the prior year. The grants reflect the importance of core EPS and core ROE in driving stock market value. The individual grants reflect the individual experience and responsibility for key strategic decisions and actions impacting franchise value.
The grants awarded in January 2016 are summarized below and reported in our “Grants of Plan-Based Awards” table herein. The number of shares granted was determined by taking the total value and dividing by the January 29, 2016 closing stock price of  $27.78. The actual performance shares will be vested at the end of the three-year period depending upon Company performance against the three-year goals. Mr. Moses was hired in July 2016, after such awards were granted.
47
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
2016 Long-Term Awards Granted
Target % of
Salary
Total Value
Time-Based
Shares Value
Performance
Shares Value
Grant % of
Salary
Daly 75% $ 650,000 $ 325,000 $ 325,000 93%
Marotta 50% $ 325,000 $ 162,500 $ 162,500 65%
Gray 50% $ 250,000 $ 125,000 $ 125,000 59%
Bacigalupo 50% $ 175,000 $ 87,500 $ 87,500 50%
Iannelli(1) 50% $ 235,000 $ 117,500 $ 117,500 59%
(1)
Ms. Iannelli’s 2016 LTI grant was forfeited upon her resignation on July 5, 2016, along with her unvested 2014 and 2015 grants.
2014 to 2016 Long-Term Incentive Plan Award Payout
The 2016 year concludes the performance grant made under the 2014 Long Term Incentive Plan which was established in January 2014 and rewards performance results over the three year period, 2014 to 2016. The final number of shares earned pursuant to those awards are based on the Company’s actual, audited results for the three-year period and approved by the Compensation Committee in February 2017. As shown below, based on the average core return on equity and cumulative core earnings per share results for the three-year period, the performance shares earned equated to 95.8% of the target award established in January 2014.
Long Term Incentive Plan
2014 — 2016 Performance and Payout
Threshold
Target
Stretch
2014 — 2016 Result
Core EPS 50%(1)
$5.31
$5.90
$6.49
$6.09
Core ROE 50%(1)
6.07%
7.28%
7.83%
7.12%
Payout
50%
100%
150%
95.8%
(1)
For a summary of certain non-GAAP performance measures, please see Appendix A.
The framework for establishing specific goals for the 2014 long-term incentive grant was similar to the process previously described regarding the goal setting for the 2016 long-term incentive grant. The goals for the long-term incentive granted in January 2014 were based on the company’s business situation and plan at the end of 2013. These goals were established to incentivize the management team at that time, including two NEOs who had recently taken their positions, following the resignations of their predecessors. The goals were intended to motivate improved performance on an absolute and relative basis. The core EPS target anticipated that core EPS would increase at more than a 20% annualized growth rate compared to the run rate of core EPS in the final quarter of 2013. Similarly, the core ROE target anticipated that core ROE would increase at more than 20% annualized compared to the run rate of core ROE in the final quarter of 2013.
During each of the three years of the 2014 to 2016 measurement period, management exceeded the aggregate annual performance incentive targets as it pursued performance enhancement programs. For the three-year period, the core EPS achieved was $6.09 and modestly exceeded the target of  $5.90. For this period, the average core ROE was 7.12% and was modestly below the target of 7.28%. Each of these components was weighted 50%, and, therefore, the eligible NEOs earned 95.8% of the combined target. The actual shares which were vested under the 2014 three-year performance incentive were as follows:
48
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
2014 Performance Shares Vesting
Participants
Grant Date
Share Grant(1)
Cliff Vesting –
3-year results
Daly 1/30/2014 9,450 9,054
Marotta 1/30/2014 4,000 3,832
Gray 1/30/2014 4,000 3,832
(1)
Fractional shares are rounded to next whole share.
Benefits and Perquisites
Our benefits program is designed to be competitive and cost-effective. All employees are provided core benefits including medical, retirement, life insurance, paid time off and leaves of absence. The Company provides select senior executives with perquisites and other benefits that the Compensation Committee believes are reasonable and consistent with its overall compensation philosophy. The Compensation Committee reviews the NEO’s total benefits package on a regular basis to determine the competitiveness and appropriateness of providing executive benefits.
Two of our NEOs participate in a supplemental retirement arrangement. We do not currently offer our other NEOs or any other executive a supplemental retirement arrangement or other non-qualified deferred compensation program. For additional information regarding the supplemental retirement arrangements, please see the sections headed “Executive Compensation — Pension Benefit” and “Executive Compensation — Non-qualified Deferred Compensation.” Named Executive Officers are also eligible for modest perquisites such as automobile allowance, financial planning and membership fees. The Company also maintains a long term care insurance plan to supplement the Company’s disability and life insurance plans, and participation in the plan currently limited to three NEOs including Messrs. Daly, Gray and Marotta, and their spouses.
Potential Post Termination or Change in Control Benefits
An important consideration in our ability to attract and retain key personnel is our ability to minimize the impact on our management team of the possible disruption associated with our analysis of strategic opportunities. Accordingly, we believe that it is in the best interest of the Company and its shareholders to provide our NEOs with reasonable financial arrangements in the event of termination of employment following a change in control or involuntary termination of employment for reasons other than cause. The Company has entered into an employment agreement with Mr. Daly and change in control agreements with the other NEOs. The agreements are designed to ensure that the NEOs devote their full energy and attention to the best long term interests of the shareholders.
Beginning in 2009, the Company determined that it would no longer enter into an employment or change in control agreement that provides for a tax indemnification payment in the event that the payment under the agreement results in additional tax liability under Section 280G of the Internal Revenue Code (a “Tax Indemnification Payment”). Consequently, the change in control agreements entered into for Mr. Marotta (in 2016), Mr. Bacigalupo (in 2013), Ms. Iannelli (in 2014), and Mr. Moses (2016) do not provide for a Tax Indemnification Payment. However, before the Company changed its policy with respect to Tax Indemnification Payments in 2009, the Company entered into an employment agreement with Mr. Daly and a change in control agreement with Mr. Gray, which provide for a potential Tax Indemnification Payment.
As stated above, the Company no longer enters into change in control agreements that provide for a tax indemnification payment if the payments under the agreement result in additional tax liability under Section 280G of the Internal Revenue Code. For additional details, please see section titled “Potential Payments Upon Termination of Employment or a Change-In-Control” of this proxy statement.
49
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Additional Compensation Information
Compensation Best Practices
Our compensation programs, practices and policies are designed to support our philosophy to reward NEOs commensurate with performance achieved and the value delivered to our shareholders. We also balance our programs to ensure sound risk management practices. Below is a summary of key features of our compensation and governance practices:
Program Features
Risk Mitigation
Pay for Performance

Balanced portfolio of performance measures with short and long-term perspectives that reinforce our business strategy

Goal setting aligned with annual and multi-year financial targets

50% of equity/long-term incentives vest based on future performance

Annual and long-term incentive plans have targets and caps for individual payouts

Executive perquisites are nominal and reasonable

Double trigger provision for payments in the event of a change in control

All CIC agreements post 2009 do not allow for tax gross ups

Compensation consultant is independent and does not provide any other services to the company

Comprehensive risk mitigation in plan design and annual review of compensation plans, policies and practices

Significant stock ownership guidelines for directors and executives; compliance with guidelines reviewed annually

Executives and directors discouraged from pledging company securities

All employees and directors are prohibited from engaging in hedging, monetization, derivative and similar transactions with company securities

Clawback policy for recoupment of any performance-based incentive payouts for a restatement of earnings or for misconduct

Approximately 57% of current CEO target annual compensation and 47% of other NEO target annual compensation is variable based on performance, including stock price performance

Annual incentives are not guaranteed

Compensation peer groups evaluated periodically to align with investor expectations and changes in market practice or our business model

No payment of dividends on unvested performance shares

NEO compensation components are decided through goal-based cash bonuses and equity-based compensation that align our executives’ interests with shareholder’s interests
Risk Assessment and Related Considerations
As in prior years, for 2016, a committee comprised of the President, Chief Risk Officer, Chief Financial Officer and Senior Executive Vice President of Human Resources of Berkshire Bank performed an annual risk assessment of the Company’s incentive compensation plans (the short-term and long-term incentive plans) for all employee levels within the Company. The objective of the review was to determine if the incentive compensation plans, at all employee levels, encouraged behaviors that exposed the Company to unacceptable levels of risk in relation to its business model and strategic plan. The review evaluated the balance of compensation elements between cash, performance shares, restricted stock grants, fixed versus variable compensation, and long-term versus short-term compensation. The review considered the level of potential cash incentive compensation as compared to base salary, the focus of individual and corporate goals, as well as the weighting and balance of goals, and internal controls in place to mitigate possible high risk taking. Based upon the risk assessment review, the Compensation Committee concluded that the incentive compensation plans do not motivate improper risk taking, and are not reasonably likely to have a material adverse effect on the Company.
50
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
During 2016 the Compensation Committee continued to reinforce our risk-based approach to total compensation in various ways, such as retaining the risk-based performance measure Asset Quality in our annual incentive plan and providing a risk adjustment feature that allows the Compensation Committee to reduce incentive awards in light of any risk concerns. An annual review of compensation plans is conducted to support sound risk management practices. Additionally, management maintains a clawback policy, as approved by the Compensation Committee, under which the Company may recover payments of incentive compensation attributable to incorrectly reported earnings.
The Compensation Committee remains committed to continuing to review and improve compensation plans and ensure they represent sound risk management practices.
Role of the Compensation Committee, Management and Compensation Consultant
Role of the Compensation Committee. During 2016, the Compensation Committee consisted of 5 members of the Board, all of whom are independent. In December, the Committee was reduced to 4 members following the retirement of a committee member. The Chairperson of the Compensation Committee regularly reports on material committee actions at Board meetings.
The Compensation Committee ensures that the total compensation paid to the senior executives is fair, reasonable and performance-based while aligning with shareholder interests. The Compensation Committee is responsible for establishing, implementing and continually monitoring all elements of compensation for the Company’s CEO and NEOs. Elements of compensation are reviewed individually and in the aggregate, including base salary, annual cash incentives, long-term incentives/equity awards, total direct compensation, and benefits and perquisites. Additionally, the Compensation Committee annually reviews its charter, philosophy and executive compensation practices, as well as industry compensation trends and best practices.
The Compensation Committee has the sole authority and resources to obtain advice and assistance from internal or external legal, human resource, accounting, compensation or other advisors or consultants as it deems desirable or appropriate. The Compensation Committee has direct access to and meets periodically with the compensation consultant independently of management.
The Compensation Committee’s major duties and responsibilities are as follows:

Review and benchmarking of overall compensation, benefit and perquisites

Review all compensation components for CEO and each NEO

Evaluate CEO and other NEOs’ individual performance

Ensure executive overall pay is aligned with corporate performance results

Review, evaluate and modify as needed, executive compensation plans

Ensure executives are not encouraged or rewarded for taking excessive risk

Approve annual cash incentive payments, annual equity grants, and vesting of performance shares for the CEO and other NEOs in accordance with the terms of the Executive Short-Term and Executive Long-Term Incentive Plans

Provide oversight to ensure compliance with all regulations related to executive compensation

Approve the annual Compensation Discussion and Analysis
Role of Management. Although the Compensation Committee makes independent determinations on all matters related to compensation of the NEOs, certain members of management may be requested to attend or provide input to the Compensation Committee. Input may be sought from the CEO, President, Senior Executive Vice President of Human Resources, Chief Financial Officer, or others to ensure the Committee has the information and perspective it needs to carry out its duties.
In particular, the Compensation Committee seeks input from the Chief Executive Officer on matters relating to strategic objectives, Company performance goals and annual business plan. In addition, the CEO provides the Compensation Committee summaries of senior executive officer performance and recommendations relating to their compensation. The CEO is not present when the Compensation Committee discusses his performance and compensation.
51
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
The Senior Executive Vice President of Human Resources assists the Compensation Committee on matters of design, administration and operation of the Company’s compensation programs. The Senior Executive Vice President of Human Resources may be requested, on the Compensation Committee’s behalf, to provide proposals or work with their independent compensation consultant to develop proposals for the Committee’s consideration. The Senior Executive Vice President of Human Resources reports to the Compensation Committee directly on such matters. The Compensation Committee also receives updates from the Company’s Chief Risk Officer, Chief Financial Officer and Investor Relations Officer throughout the year as appropriate.
Although the senior executives may provide insight, suggestions or recommendations regarding senior executive compensation, they are not present during the Compensation Committee’s deliberations or vote. Only Compensation Committee members vote on decisions regarding NEO compensation. The Compensation Committee regularly meets in executive session without management present.
Role of the Compensation Consultant. The Compensation Committee has the authority to retain a compensation consultant to advise on executive compensation matters, as well as access to outside legal counsel and other experts as needed. For 2016, the Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian” or “the Consultant”) to serve as independent advisor to the Compensation Committee. During 2016, Meridian presented an annual education session to the Compensation Committee, conducted executive and board benchmarking analyses, assisted with the development of the peer group and the proxy, and responded to other ad hoc requests of the Compensation Committee.
The Consultant reported directly to the Compensation Committee and carried out its responsibilities to the Compensation Committee in coordination with the Company’s Human Resources Department, as requested by the Compensation Committee. The Committee Chair has regular contact with the Consultant outside of meetings as appropriate. The Compensation Committee has reviewed Meridian services and determined that Meridian is independent with respect to SEC standards as well as Company policy and provides no other services to the company other than compensation consulting.
Other Compensation and Governance Policies and Practices
Stock Ownership and Holding Guidelines. The Board of Directors believes that it is in the best interest of the Company and its shareholders to align the financial interests of Company’s senior executives, executives and directors with those of shareholders. The Company maintains Stock Ownership Guidelines for its SEC-reporting senior executives and directors and all other executives that requires the following minimum investment in Company common stock:
Directors Four times (4x) the annual cash retainer
Chief Executive Officer Four and a half times (4.5x) the annual base salary
President and COO Three and a half times (3.5) the annual base salary
Senior Executives Two and a half times (2.5x) the annual base salary
Executives One and a half times (1.5x) the annual base salary
Shares that satisfy the stock ownership guidelines include Company stock owned outright and restricted stock whether or not vested. Stock options are not included in calculating ownership until they are converted into actual shares owned.
Newly hired senior executives, executives, directors and current employees of the Company that first become a senior executive, executive, or director are expected to satisfy the stock ownership guidelines within five years, or such other term approved by the Committee, of the date such individual first becomes a senior executive, executive or director. In order to expedite this, a minimum of 50% of shares (net of taxes) will be required to be held upon each vesting until ownership guidelines are met.
Senior executives, executives and directors that maintain sufficient stock holdings, but due to an increase in base salary, annual cash retainer, selling Company stock to cover tax withholding or for a reason approved by the Compensation Committee, no longer meet the stock ownership guidelines, shall have 18 months to acquire additional Company stock and during this term such individuals will be deemed to satisfy the ownership guidelines.
52
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Stock ownership for senior executives, executives and directors is reviewed annually as part of the annual senior executive performance evaluation process and as part of the Board review. Share holdings are evaluated based on the average stock price for the three year period prior to the Board’s review. These guidelines will allow for extenuating circumstances and discretion in the evaluation process and the Compensation Committee reserves the right to make exceptions as appropriate. The Compensation Committee shall be responsible for the periodic review of the policy. Any changes to the policy will require the approval of the Board of Directors.
The Compensation Committee monitors ownership annually. Our Chief Executive Officer, other NEOs and directors are compliant with the Company’s stock ownership policy within the approved grace period to satisfy the stock ownership and holding guidelines, other than Director Moffatt, who is in the process of increasing her stock ownership to become compliant with the Company’s stock ownership policy.
Clawback Policy. As a condition to receiving incentive compensation from the Company and Berkshire Bank, each executive officer has signed an agreement whereby the executive officer agrees to reimburse the Company or Berkshire Bank an amount up to the entire incentive award made to such executive officer on the basis of having met or exceeded specific targets for performance periods if  (1) the Company or Berkshire Bank is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws as a result of Financial Misconduct (as determined by the members of the Board of Directors who are considered “independent” for purposes of the listing standards of the NYSE), or as may be required by applicable laws, regulations, NYSE listing standards or as further required under the Company’s policies, as adopted from time to time, or (2) the Company’s Board of Directors determines that the executive officer committed Personal Misconduct (as defined below). For purposes of this policy, (i) the term “incentive awards” means awards under the Company’s long term and short term incentive compensation plans, the amount of which is determined in whole or in part upon specific performance targets relating to the financial results of the Company; (ii) the term executive officer means the CEO and executives who are eligible to receive incentive awards; and (iii) the term Personal Misconduct means fraud, commission of a felony, material violation of any written agreement with or policies of the Company or Berkshire Bank, or any other material breach of fiduciary duty injurious to the Company or Berkshire Bank.
Anti-Hedging and Pledging Restriction Policy. The Company discourages the practices of hedging and/or pledging of Company common stock by officers and directors, and has policies relating to such practices. Pursuant to the Company’s insider trading policy and stock ownership guidelines, officers and directors of the Company are prohibited from engaging in any hedging transactions (which include short sale transactions, purchases of Company common stock on margin, and buying or selling any puts, calls or other options that have the effect of reducing the economic exposure to the shares of common stock). In addition, officers and directors are discouraged from pledging company securities as collateral for margin purchases or a loan. However, exceptions to this pledging limitation may be granted, if good cause is shown.
Tax Deductibility. It is the Compensation Committee’s intention generally to design its compensation programs to maximize the deductibility of executive compensation under the Internal Revenue Code. However, the Compensation Committee reserves the right in the exercise of its business judgment to establish appropriate compensation levels for executive officers that may exceed the limits on tax deductibility under Section 162(m).
53
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
Compensation Discussion and Analysis  
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis that is required by the rules established by the Securities and Exchange Commission. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
Compensation Committee of the Board of Directors of Berkshire Hills Bancorp, Inc.
John B. Davies, Chair
Cornelius D. Mahoney
William J. Ryan
D. Jeffrey Templeton
54
BERKSHIRE HILLS BANCORP, INC.| 2017 Proxy Statement

TABLE OF CONTENTS
[MISSING IMAGE: berkshirehills-headv2.jpg]
Executive Compensation
Summary Compensation Table
The following table provides the total compensation earned by or paid to, for the years ended December 31, 2016, 2015 and 2014, respectively, the Named Executive Officers.
Name and
Principal
Position(1)
Year
Salary
($)
Bonus
($)
Stock
Awards
($)(2)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(3)
All Other
Compensation
($)(4)
Total
($)
Michael P. Daly, Chief Executive Officer
2016 700,000
650,024
460,000 622,627 76,119 2,508,770
2015 667,692
680,019
600,000 257,902 82,513 2,288,126
2014 627,885
472,500
455,000 213,924 90,440 1,859,749