DEF 14A of Southside Bancshares Inc
Filed Mar 25, 2026 · FY20250000705432-26-000069
Investment/Asset-Liability Committee (ALCO) of Southside Bank
| DIRECTOR COMPENSATION |
DIRECTOR COMPENSATION PROGRAM
DIRECTOR COMPENSATION PROGRAM The Board adopted a Director Compensation Program (the “Director Program”) for compensating non-employee directors of the Company for their time, commitment and contributions to the Board, including each non-employee’s service on the board of the Bank. Under the Director Program, non-employee directors are paid an annual retainer of $101,000, which is payable in quarterly installments, for each year of his or her service on the Board (each, a “Service Year”). Each Service Year commences on the date of the Company’s Annual Meeting at which Board members are elected or appointed. Employee directors do not receive compensation for service on the Company's Board or the board of the Bank. In addition to the annual retainer, the following positions received an additional retainer for the 2025 service year as follows:
DIRECTOR COMPENSATION PROGRAM
| Position | Additional Retainer | | Chairman | $48,500 | | Vice Chair | $23,500 | | Audit Committee Chair | $23,500 | | Compensation Committee Chair | $12,500 | | Risk Committee Chair | $12,500 | | Asset-Liability Committee Chair | $7,500 | | Innovation, Digital Banking and Information Technology Committee Chair | $7,500 | | Trust Committee Chair | $7,500 | | Corporate Governance and Nominating Committee Chair | $5,000 |
DIRECTOR COMPENSATION PROGRAM
The Director Program provides that non-employee directors will receive at least 40% of their annual retainer in the form of restricted stock units (“RSUs”), with the balance payable in cash in quarterly installments. In addition, directors may elect to receive a larger percentage (up to 100%) of their annual retainer and additional retainers, as applicable, in the form of RSUs. The RSUs are granted on or about the first day of the Service Year and have a value on the grant date approximately equal to the amount of the annual cash retainer and/or additional retainer payments that he or she has elected to receive in the form of RSUs. The RSUs vest (become non-forfeitable) on the first anniversary of the grant date (or, if earlier, on the date of the Company’s Annual Meeting that occurs in the year immediately following the year of grant, in the event Grantee is not standing for re-election to the Board at such Annual Meeting) (with accelerated vesting on a pro rata basis in the event of death, disability or a change in control of the Company). Directors may elect to receive shares of common stock in settlement of their RSUs on the vesting date, or they may elect to defer the receipt of such shares and instead receive them on a specified anniversary of the grant date or upon termination of their service on the Board (subject, in each case, to earlier settlement upon a change in control of the Company).
2025 DIRECTOR COMPENSATION
2025 DIRECTOR COMPENSATION The table below summarizes the compensation earned by the Company's directors for the year ended December 31, 2025. Lee R. Gibson, the Company’s Former CEO, through his retirement on December 31, 2025, as well as Keith M. Donahoe, President and current CEO, are not included in the table below, as they were officers of the Company during 2025, and thus received no compensation for their service as a director during 2025. Mr. Gibson's and Mr. Donahoe's compensation amounts are shown in the Summary Compensation Table under Executive Compensation.
2025 DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | All Other Compensation ($) | Total ($) | | Lawrence L. Anderson, M.D. (3) | $55,656 | $54,239 | $— | $109,895 | | S. Elaine Anderson, CPA (4) | 79,975 | 40,389 | — | 120,364 | | Michael J. Bosworth (5) | 39,406 | 60,599 | — | 100,005 | | Kirk A. Calhoun, M.D. (6) | 64,506 | 46,631 | — | 111,137 | | Patricia A. Callan (7) | 65,288 | 40,389 | — | 105,677 | | Shannon Dacus (8) | 63,725 | 40,389 | — | 104,114 | | Alton L. Frailey (9) | 33,063 | 75,727 | — | 108,790 | | John R. (Bob) Garrett (10) | 84,111 | 40,389 | — | 124,500 | | George H. (Trey) Henderson, III (11) | 20,344 | — | — | 20,344 | | Jeb W. Jones (12) | 12,625 | — | — | 12,625 | | Raymond C. McKinney, CPA (12) | 12,625 | — | — | 12,625 | | Tony K. Morgan, CPA (11)(13) | 23,344 | — | — | 23,344 | | John F. Sammons, Jr. (11) | 18,938 | — | — | 18,938 | | H. J. Shands, III (14) | 109,111 | 40,389 | — | 149,500 | | Preston L. Smith (15) | 42,275 | 68,089 | — | 110,364 | | Donald W. Thedford (11) | 22,725 | — | — | 22,725 |
2025 DIRECTOR COMPENSATION
(1)Amounts reflect fees earned by each non-employee director in calendar year 2025. (2)Directors receive at least 40% of their annual retainer in the form of RSUs and may elect to receive a larger percentage (up to 100%) of their annual retainer and additional retainers, as applicable, in the form of RSUs. Amounts reflect the aggregate grant date fair value of RSU awards determined in accordance with FASB ASC Topic 718, based on the fair market value of our common stock on the grant date, May 14, 2025. Because the Service Year runs from Annual Meeting to Annual Meeting, a portion of the RSUs granted in 2025 represents compensation for their service in calendar year 2026 prior to the 2026 Annual Meeting. To the extent a director elected to receive a higher percentage of his or her annual retainer or additional retainer in the form of RSUs for the Service Year beginning as of the 2025 Annual Meeting compared to the prior Service Year, the amount reported in the Stock Awards column will be higher by the amount that represents compensation for calendar year 2026. (3)Compensation includes an additional retainer of $7,500 for serving as Innovation, Digital Banking and Information Technology Committee Chair. (4)Compensation includes an additional retainer of $12,500 for serving as Risk Committee Chair, prorated for service ending as of the 2025 Annual Meeting, and $23,500 for Audit Committee Chair, prorated for service beginning as of the 2025 Annual Meeting. (5)Compensation includes an additional retainer of $7,500 for serving Asset-Liability Committee Chair, prorated for service beginning as of the 2025 Annual Meeting. (6)Compensation includes an additional retainer of $12,500 for serving as Risk Committee Chair, prorated for service beginning as of the 2025 Annual Meeting. (7)Compensation includes an additional retainer of $12,500 for serving as Compensation Committee Chair prorated for service ending as of the 2025 Annual Meeting. (8)Compensation includes an additional retainer of $5,000 for serving as Corporate Governance and Nominating Committee Chair, prorated for service beginning as of the 2025 Annual Meeting. (9)Compensation includes an additional retainer of $12,500 for serving as Compensation Committee Chair, prorated for service beginning as of the 2025 Annual Meeting. (10)Compensation includes an additional retainer of $23,500 for serving as Vice Chair of the Board. (11)Director retired as of the 2025 Annual Meeting. (12)Appointed to the Board effective as of November 15, 2025. (13)Compensation includes $23,500 for Audit Committee Chair, prorated for service ending as of the 2025 Annual Meeting. (14)Compensation includes an additional retainer of $48,500 for serving as Chair of the Board. (15)Compensation includes an additional retainer of $5,000 for serving as Corporate Governance and Nominating Committee Chair, prorated for service ending as of the 2025 Annual Meeting and $7,500 for serving as Trust Committee Chair, prorated for service beginning as of the 2025 Annual Meeting.
Compensation Philosophy and Objectives
Compensation Philosophy and Objectives The Committee believes the most effective executive compensation program is one that is designed to reward long-term and strategic performance and which aligns executives’ interests with those of the shareholders, with the ultimate objective of improving long-term shareholder value. The Committee evaluates both performance and compensation to ensure the Company maintains its ability to attract and retain superior officers in key positions and that compensation provided to key officers remains competitive relative to the compensation paid to similarly situated executives of our peer companies (as discussed below). To that end, the Committee believes executive compensation provided by the Company to its NEOs should include cash, stock-based compensation and other benefits that reward both Company and executive performance. Performance is evaluated in a number of ways. First and most importantly, the Committee evaluates the overall performance of the Company during the year and over a longer term, typically three years. Performance metrics evaluated include profitability, return on equity, ability to pay dividends to shareholders, overall asset quality, capital levels and earnings per share. The Company’s performance is measured against its peers utilizing outside independently produced peer group data. The Committee also takes into consideration the results of outside examinations and audits. The Committee evaluates individual performance of each NEO in their areas of responsibility and to the Company as a whole, taking into consideration the overall banking environment. Using this information as a guide, the Committee then works through its process of evaluating and setting compensation.
Setting Executive Compensation
Setting Executive Compensation Based on the compensation objectives noted above, the Committee has structured the NEOs’ annual compensation to be competitive and to motivate and reward the NEOs for their performance. The Committee utilizes a Compensation Peer Group for comparative purposes for compensation and performance-related benchmarks, as well as compensation structure. The Committee reviews the Compensation Peer Group annually to ensure continued appropriateness. In 2025, the Committee engaged Meridian Compensation Partners, LLC (“Meridian”) to serve as an independent outside consultant to the Company, reporting directly to the Committee. Meridian advised the Committee on potential peers based on asset size and location, including metropolitan areas, given Southside's operations in metropolitan areas in Texas. In 2025, the Committee removed The First Bancshares, Inc., which was acquired by Renasant Corporation, and added FirstSun Capital Bancorp to the 2025 Compensation Peer Group. The Compensation Peer Group consists of 18 companies ranging in assets from $4.41 billion to $18.64 billion, as of the time of the study, with a focus on metropolitan areas. The companies comprising the 2025 Compensation Peer Group are listed as follows:
Setting Executive Compensation
| 2025 Compensation Peer Group | | | Amerant Bancorp, Inc. (AMTB) | Origin Bancorp, Inc. (OBK) | | Business First Bancshares, Inc. (BFST) | Renasant Corporation (RNST) | | Capital City Bank Group, Inc. (CCBG) | Seacoast Banking Corporation of Florida (SBCF) | | City Holding Company (CHCO) | ServisFirst Bancshares, Inc. (SFBS) | | FB Financial Corporation (FBK) | SmartFinancial, Inc. (SMBK) | | First Financial Bankshares, Inc. (FFIN) | South Plains Financial, Inc. (SPFI) | | FirstSun Capital Bancorp (FSUN) | Stellar Bancorp, Inc. (STEL) | | HomeTrust Bancshares, Inc. (HTB) | Triumph Financial, Inc. (TFIN) | | National Bank Holdings Corporation (NBHC) | Veritex Holdings, Inc. (VBTX) |
2025 In Review
2025 In Review Southside Bancshares, Inc. financial results for 2025 included a return on average shareholders' equity of 8.40% and a return on average assets of 0.83%. Net income for 2025 decreased $19.3 million, or 21.8%, compared to 2024, and diluted earnings per common share decreased $0.62, or 21.3%. During 2025, loans increased 3.4%, deposits increased 3.2% and nonperforming assets as a percentage of total assets increased by 0.41% compared to 2024, but remained low at 0.45%. Annual incentive pay out amounts for Mr. Gibson, Ms. Shamburger, Mr. Donahoe and Mr. Arnold decreased compared to 2024 primarily due to increased targets for EPS and ROATCE in 2025, driven by a higher budget, and financial results near target levels in 2025, compared to certain financial results surpassing target levels in 2024. Additionally, for Mr. Arnold, the annual incentive pay out decreased compared to 2024 due to the increase in nonperforming assets, which resulted in no payout for that performance measure in 2025.
Annual Incentive Program
Annual Incentive Program The Company's Annual Incentive Program (“AIP”) provides the Company's most senior executive officers with an opportunity to earn cash awards based on achievement of performance measures established by the Committee. We believe a significant amount of executive compensation should be contingent on Company performance. The AIP formalizes this philosophy for our top executives by providing a cash incentive for the attainment of profitable growth and stable financial operating conditions. Performance measures include quantitative performance goals and a qualitative scorecard. Performance measures are selected based on the role of the participant and their contributions to the Company. For the CEO, CFO, CLO and President, performance measures selected were Earnings Per Share (“EPS”), Loan Growth, Return on Average Tangible Common Equity (“ROATCE”) and qualitative scorecard. Performance measures selected for the CCO were EPS, ROATCE, Non-Performing Assets (“NPAs”), and qualitative scorecard. Weightings are used to differentiate the relative importance or priority of the performance measures. Each participant is assigned a weighting for each performance measure by the Committee, with a total weighting of 100%. Each performance measure is weighted a minimum of 5%, with the total quantitative performance goals weighted 75%, and the qualitative scorecard weighted 25%. The payout for performance measures ranges from minimum threshold of 50%, target of 100% and maximum of 150%. Payout for performance between the minimum threshold, target and maximum is calculated on a straight line basis, and performance below the minimum threshold results in no payout. Each participant is assigned a target award by the Committee, calculated as a percentage of base salary for the program year, which represents 100% target payout of all performance measures. For 2025, no changes were made to the NEO targets as a percentage of base salary for those already participating in the AIP, which were 50.0% for Mr. Gibson, 45.0% for Mr. Donahoe, 42.5% for Ms. Shamburger, 32.5% for Mr. Burchard and 40.0% for Mr. Arnold. The qualitative scorecard represents 25% of total performance, the committee sets scorecard goals specific to each participant at the beginning of the program year. Such goals include developing new programs, succession coaching, developing talent and other strategic initiatives. See the 2025 Grants of Plan-Based Awards table below for Threshold, Target and Maximum amounts for the NEOs under the AIP. The following table presents the performance measures and performance goals for the NEOs determined by the committee, as well as the actual results and payout as a % of the target for 2025:
Annual Incentive Program
| Performance Measure | Threshold | Target | Maximum | 2025 | Actual Payout as a % of Weighted Target | | | 50% Payout | 100% Payout | 150% Payout | Results | | | EPS | $2.69 | $3.16 | $3.63 | $3.13(1) | 96.8% | | Loan Growth | 4.00% | 4.70% | 5.41% | 3.35% | — | | ROATCE | 12.90% | 15.18% | 17.46% | 15.32%(1) | 103.1% | | NPAs as a % of Total Assets | 0.10% | 0.04% | 0.03% | 0.45% | — | | Qualitative Scorecard | | | | | 125%(2) 100%(3) |
Annual Incentive Program
(1) Net income was adjusted for net securities losses, net of tax, in the amount of $25.5 million for the purpose of this calculation. (2) Payout for Lee R. Gibson, Julie N. Shamburger, Curtis R. Burchard and T. L. Arnold, Jr. was 125%. (3) Payout for Keith M. Donahoe was 100%. The following table presents for each NEO weightings for performance measures, total payout as a percentage of base salary, total payout as a percentage of target payout and total payout for 2025:
Annual Incentive Program
| Performance Measure | Performance Measure Weighting | | | | | | | Gibson | Shamburger | Donahoe | Burchard | Arnold | | EPS | 40% | 40% | 40% | 40% | 40% | | Loan Growth | 15% | 15% | 15% | 20% | N/A | | ROATCE | 20% | 20% | 20% | 15% | 15% | | NPAs as a % of Total Assets | N/A | N/A | N/A | N/A | 20% | | Qualitative Scorecard | 25% | 25% | 25% | 25% | 25% | | Target Payout as a % of Base Salary | 50.0% | 42.5% | 45.0%(1) | 32.5% | 40.0% | | Total Payout as a % of Target Payout | 90.6% | 90.6% | 84.3%(1) | 85.4% | 85.4% | | Total Payout ($) | $382,732 | $190,573 | $220,121 | $141,607 | $135,840 |
Annual Incentive Program
(1) Base salary for Mr. Donahoe was calculated based on the weighted average of initial base salary and increased base salary during the year.
Long-Term Equity Incentive Awards
Long-Term Equity Incentive Awards At the 2025 Annual Meeting, shareholders approved the Southside Bancshares, Inc. 2025 Incentive Plan (the “2025 Incentive Plan”) which provides for the grant of equity awards to our employees, officers, directors and consultants. The 2025 Incentive Plan serves as the successor to the Company’s 2017 Incentive Plan. The primary purpose of the 2025 Incentive Plan is to promote Company success by linking the personal interests of our employees, officers, directors and consultants to those of our shareholders, and by providing participants with an incentive for outstanding performance. The 2025 Incentive Plan outlines the type of incentive awards to be granted under the plan. In 2021, the Committee engaged Meridian to assist in designing a new Long-Term Equity Incentive Program (the "Program"), which started in fiscal year 2022. The Program provides the framework for long-term equity awards consisting of 50% performance-based restricted stock units (“PSUs”) and 50% time-based restricted stock units ("RSUs"). In 2025, the Committee granted PSUs and RSUs to the NEOs. The RSUs vest in equal annual installments over three years, subject to the grantee's continued employment on each vesting date. The PSUs cliff vest on the third anniversary of the grant date, subject to the grantee's continued employment on such date, and will be earned based on the Company's ROATCE relative to ROATCE of the KBW Nasdaq Regional Bank Index (NASDAQ: KRX) (the “Peer Group”), over a 3 year performance period, beginning January 1, 2025. Performance awards may be earned and vest between 0% and 150% of the target award, as outlined in the table below. See further information on the 2025 grants of the RSUs and PSUs in the 2025 Grants of Plan-Based Awards Table below. For the 2026 Program year, the Committee adjusted the CEO's long-term equity incentive target payout as a percentage of base salary from 50% to 85%, as a result of Meridian's executive pay review, which evaluated the competitiveness of compensation opportunities for the Company's top executives against Compensation Peer Group market data.
Long-Term Equity Incentive Awards
| Company ROATCE Performance / Funding Scale | | | Company ROATCE Percentile Ranking Relative to ROATCE Peer Group | Percentage of Target Award Earned(1) | | Below 25% | — | | 25% | 50% | | 40% | 80% | | 50% | 100% | | 60% | 120% | | 75% or greater | 150% |
Long-Term Equity Incentive Awards
(1) Payouts between performance levels will be determined based on straight line interpolation, and performance below the minimum threshold results in no share payout.
Equity Grant Practices
Equity Grant Practices We do not have a formal policy for equity grants but we remain aware of and consider quarterly stock windows, as well as potential material non-public information, prior to any grants. We have not granted stock options in recent years. Equity grants are generally made on a scheduled basis, with executive grants occurring annually in the first quarter and corporate grants occurring every 18 months. We do not grant equity awards in anticipation of the release of material nonpublic information, nor is the timing of disclosures of material non-public information based on equity award grant dates.
Severance
Severance The Company entered into Employment Agreements with Lee R. Gibson in October 2007, which terminated in connection with his retirement as of December 31, 2025, Julie N. Shamburger in June 2008, T. L. Arnold, Jr. in April 2014, and Keith M. Donahoe in January 2025, each of which provide for severance payments and benefits in the event the NEO’s employment is terminated by the Company without “cause,” by the executive for “good reason,” or as a result of a “change in control” (as such terms are defined in the employment agreements). The Board determined providing severance protection to the NEOs is in the best interest of the Company because providing severance benefits is a necessary tool in the competitive marketplace to attract and retain the services of talented executives who are critical to the success of the Company. The severance and change in control termination amounts were negotiated based on the NEO's tenure, scope of responsibilities and other provisions in the agreement. For a further discussion of severance payments, please see the terms of the Employment Agreements in this proxy statement.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| Name Principal Position | Year | Salary ($) (1) | Bonus ($)(2) | Stock Awards ($) (3) | Non-Equity Incentive Plan Compensation ($) (4) | Change in Pension Value ($) (5) | All Other Compensation ($) (6) | Total ($) | | Lee R. Gibson, CPA – Former Chief Executive Officer, retired December 31, 2025, and Director of the Company and the Bank | 2025 | $845,000 | $315,000 | $422,488 | $382,732 | $1,261,447 | $36,392 | $3,263,059 | | | 2024 | 845,000 | — | 422,505 | 418,029 | 277,612 | 28,296 | 1,991,442 | | | 2023 | 809,608 | — | 283,353 | 245,092 | 769,701 | 26,963 | 2,134,717 | | Julie N. Shamburger, CPA – Chief Financial Officer of the Company and the Bank and advisory director of the Bank | 2025 | 495,000 | — | 197,992 | 190,573 | 215,451 | 29,040 | 1,128,056 | | | 2024 | 480,000 | — | 192,003 | 201,841 | 31,227 | 87,991 | 993,062 | | | 2023 | 463,000 | — | 124,992 | 119,139 | 247,828 | 27,983 | 982,942 | | Keith M. Donahoe – President and Current Chief Executive Officer, effective January 1, 2026, and Director of the Company and the Bank | 2025 | 580,000 | 2,125 | 252,032 | 220,121 | — | 170,036 | 1,224,314 | | | 2024 | 461,625 | 45,597 | — | 138,334 | — | 61,996 | 707,552 | | Curtis R. Burchard – Chief Lending Officer of the Company and the Bank and advisory director of the Bank | 2025 | 510,000 | — | 127,470 | 141,607 | — | 28,703 | 807,780 | | T. L. Arnold, Jr. – Chief Credit Officer of the Company and the Bank and advisory director of the Bank | 2025 | 397,500 | 200 | 149,060 | 135,840 | — | 20,048 | 702,648 | | | 2024 | 386,000 | — | 144,771 | 182,963 | — | 19,892 | 733,626 | | | 2023 | 357,167 | — | 87,114 | 108,371 | — | 19,132 | 571,784 |
SUMMARY COMPENSATION TABLE
(1)Includes amounts deferred at the officer’s election pursuant to the Company’s 401(k) Plan. (2)For Mr. Gibson, the amount reflects a discretionary retirement bonus. For Mr. Donahoe, the amount is pursuant to and concludes his Advanced Compensation Agreement. See below for further discussion of the agreement. For Mr. Arnold, the amount reflects a referral incentive. (3)Reflects the aggregate grant date fair value of RSUs and PSUs determined in accordance with FASB ASC Topic 718. Grant date fair value for RSUs is based on the fair market value of our common stock on the grant date. Grant date fair value for PSUs is based on the fair market value of our common stock on the grant date and the probable outcome of performance-based conditions at the time of grant. Assuming achievement of the PSU performance conditions at the highest level (rather than at target level), the aggregate grant date fair value of awards reflected in this column for 2025 would be higher by the following amounts: Mr. Gibson, $105,622; Ms. Shamburger, $49,514; Mr. Donahoe, $63,024; Mr. Burchard, $31,868; and Mr. Arnold, $37,265. (4)Reflects amounts earned under the Annual Incentive Program. See the discussion above for more information regarding these performance-based cash bonuses. (5)The amounts reported in this column reflect the change in aggregate actuarial present value of the NEOs accumulated benefits under the Pension Plan and the Restoration Plan determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. The changes in pension values in 2025 under the Pension Plan were $327,599 for Mr. Gibson and $118,718 for Ms. Shamburger. The changes in pension value in 2025 under the Restoration Plan were $933,848 for Mr. Gibson and $96,733 for Ms. Shamburger. Mr. Donahoe, Mr. Burchard and Mr. Arnold do not participate in the Pension Plan or the Restoration Plan. Descriptions of the Pension Plan and Restoration Plan follow the Pension Benefits Table in this proxy statement. (6)Amounts included in this column for 2025 are detailed in the All Other Compensation Table below.
SUMMARY COMPENSATION TABLE
| 2025 ALL OTHER COMPENSATION TABLE | | | | | | | | Gibson | Shamburger | Donahoe | Burchard | Arnold | | Company Provided Automobile (a) | $— | $3,750 | $93,954 | $8,655 | $— | | Club Dues (b) | 8,979 | 5,242 | 14,034 | — | — | | 401(k) Matching Contribution (c) | 14,000 | 14,000 | 14,000 | 14,000 | 14,000 | | ESOP Contribution (d) | 6,048 | 6,048 | 6,048 | 6,048 | 6,048 | | Retirement Gift | 865 | — | — | — | — | | Housing (e) | — | — | 42,000 | — | — | | Unused Vacation Pay (f) | 6,500 | — | — | — | — | | Total | $36,392 | $29,040 | $170,036 | $28,703 | $20,048 |
SUMMARY COMPENSATION TABLE
(a)Ms. Shamburger, Mr. Donahoe and Mr. Burchard had use of a Company provided automobile in 2025. The automobile is included as incremental cost to the Company in the year of purchase, and fuel, maintenance and insurance costs are included as incremental cost each year. In 2025, Mr. Donahoe received a new automobile and the incremental cost to the Company was $91,246. (b)The incremental cost of Company provided club dues to the NEOs. (c)All NEO's are 100% vested in our 401(k) Plan. (d)All NEO's are 100% vested in our ESOP, except for Mr. Donahoe and Mr. Burchard who are 80% and 20% vested, respectively. (e)Housing cost reflects rental payments. (f)Represents unused vacation pay on retirement date.
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure The CEO pay ratio figures below are a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act. We determined that as of December 31, 2025, our total number of active U.S. employees was 797. To determine our median employee pay, we chose gross compensation as our consistently applied compensation measure. We then annualized base salary for those employees who commenced work during 2025 and any employees who were on leave for a portion of 2025. For hourly employees, we used a reasonable estimate of hours worked to determine annual base pay. Using this methodology, we identified the median employee, and that person's total annual compensation was $58,495. The total annual compensation of our CEO was $3,263,059. Accordingly, the ratio of CEO pay to median employee pay was 56:1.
2025 GRANTS OF PLAN-BASED AWARDS
2025 GRANTS OF PLAN-BASED AWARDS The table below sets forth information regarding grants of plan-based awards to the NEOs for the fiscal year ended December 31, 2025:
2025 GRANTS OF PLAN-BASED AWARDS
| Name | Award Type | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (3) | Grant Date Fair Value of Stock and Option Awards ($) (4) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Lee R. Gibson | AIP | — | $211,250 | $422,500 | $633,750 | — | — | — | — | $— | | | PSU | 2/6/2025 | — | — | — | 3,268 | 6,536 | 9,804 | — | 211,244 | | | RSU | 2/6/2025 | — | — | — | — | — | — | 6,536 | 211,244 | | Julie N. Shamburger | AIP | — | 105,188 | 210,375 | 315,563 | — | — | — | — | — | | | PSU | 2/6/2025 | — | — | — | 1,532 | 3,063 | 4,595 | — | 98,996 | | | RSU | 2/6/2025 | — | — | — | — | — | — | 3,063 | 98,996 | | Keith M. Donahoe | AIP | — | 130,500 | 261,000 | 391,500 | — | — | — | — | — | | | PSU | 2/6/2025 | — | — | — | 1,950 | 3,899 | 5,849 | — | 126,016 | | | RSU | 2/6/2025 | — | — | — | — | — | — | 3,899 | 126,016 | | Curtis R. Burchard | AIP | — | 82,875 | 165,750 | 248,625 | — | — | — | — | — | | | PSU | 2/6/2025 | — | — | — | 986 | 1,972 | 2,958 | — | 63,735 | | | RSU | 2/6/2025 | — | — | — | — | — | — | 1,972 | 63,735 | | T.L. Arnold, Jr. | AIP | — | 79,500 | 159,000 | 238,500 | — | — | — | — | — | | | PSU | 2/6/2025 | — | — | — | 1,153 | 2,306 | 3,459 | — | 74,530 | | | RSU | 2/6/2025 | — | — | — | — | — | — | 2,306 | 74,530 |
2025 GRANTS OF PLAN-BASED AWARDS
(1)Amounts reflect threshold, target and maximum payout levels for 2025 performance under the 2025 Annual Incentive Program. For more information regarding the 2025 Annual Incentive Program, see the discussion in “Compensation Discussion and Analysis.” (2)Amounts reflect threshold, target and maximum payout levels for PSUs granted in 2025, pursuant to the Company's 2017 Incentive Plan, which may be earned based on the Company’s level of achievement of performance goals related to ROATCE, and cliff vest on the third anniversary of the grant date, subject to the grantee's continued employment on such date, or earlier upon the death or disability of the grantee, or upon a change in control in which the successor company does not assume or otherwise equitably convert the awards. For more information regarding the PSUs and payout, see the discussion in “Compensation Discussion and Analysis.” (3)Reflects RSUs granted under the 2017 Incentive Plan. The RSUs vest annually in three equal installments beginning on the first anniversary of the grant date, subject to the grantee's continued employment on such date, or earlier upon the death or disability of the grantee, or upon a change in control in which the successor company does not assume or otherwise equitably convert the awards. (4)Reflects the aggregate grant date fair value of the award determined in accordance with FASB ASC Topic 718. Grant date fair value for RSUs is based on the fair market value of our common stock on the grant date. Grant date fair value for PSUs is based on the fair market value of our common stock on the grant date and the probable outcome of performance-based conditions at the time of grant, excluding the effect of estimated forfeitures.
OUTSTANDING EQUITY AWARDS AT 2025 FISCAL YEAR END
OUTSTANDING EQUITY AWARDS AT 2025 FISCAL YEAR END The table below sets forth information regarding outstanding stock options and stock awards, which includes RSUs and PSUs, held by the NEOs as of December 31, 2025:
OUTSTANDING EQUITY AWARDS AT 2025 FISCAL YEAR END
| | | | Option Awards (1) | | | | Stock Awards (2) | | | | | Name | Grant Date | Vesting Period (Years) (3) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Un-exercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested ($) (4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (4) | | Lee R. Gibson | 11/23/2016 | 3 | 16,304 | — | $37.28 | 11/23/2026 | — | $— | — | $— | | | 6/18/2018 | 3 | 24,095 | — | 34.50 | 6/18/2028 | — | — | — | — | | | 11/21/2019 | 3 | 28,178 | — | 34.83 | 11/21/2029 | — | — | — | — | | | 2/2/2023 | 3 | — | — | — | — | 1,398 | 42,485 | — | — | | | 2/2/2023 | 3 | — | — | — | — | — | — | 3,958(6) | 120,284 | | | 2/1/2024 | 3 | — | — | — | — | 5,037 | 153,074 | — | — | | | 2/1/2024 | 3 | — | — | — | — | — | — | 4,618(6) | 140,341 | | | 2/6/2025 | 3 | — | — | — | — | 6,858 | 208,415 | — | — | | | 2/6/2025 | 3 | — | — | — | — | — | — | 1,905(6) | 57,893 | | Julie N. Shamburger | 11/23/2016 | 3 | 6,461 | — | 37.28 | 11/23/2026 | — | — | — | — | | | 6/18/2018 | 3 | 8,881 | — | 34.50 | 6/18/2028 | — | — | — | — | | | 11/21/2019 | 3 | 11,182 | — | 34.83 | 11/21/2029 | — | — | — | — | | | 2/2/2023 | 3 | — | — | — | — | 617 | 18,751 | — | — | | | 2/2/2023 | 3 | — | — | — | — | — | — | 1,849 | 56,191 | | | 2/1/2024 | 3 | — | — | — | — | 2,290 | 69,593 | — | — | | | 2/1/2024 | 3 | — | — | — | — | — | — | 3,434 | 104,359 | | | 2/6/2025 | 3 | — | — | — | — | 3,214 | 97,673 | — | — | | | 2/6/2025 | 3 | — | — | — | — | — | — | 3,214 | 97,673 | | Keith M. Donahoe | 11/17/2022 | 4 | — | — | — | — | 656 | 19,936 | — | — | | | 11/16/2023 | 4 | — | — | — | — | 337 | 10,241 | — | — | | | 2/6/2025 | 3 | — | — | — | — | 4,091 | 124,325 | — | — | | | 2/6/2025 | 3 | — | — | — | — | — | — | 4,091 | 124,325 | | Curtis R. Burchard | 7/18/2023 | 4 | — | — | — | — | 2,815 | 85,548 | — | — | | | 2/6/2025 | 3 | — | — | — | — | 2,069 | 62,877 | — | — | | | 2/6/2025 | 3 | — | — | — | — | — | — | 2,069 | 62,877 | | T.L. Arnold, Jr. | 11/23/2016 | 4 | 3,420 | — | 37.28 | 11/23/2026 | — | — | — | — | | | 6/18/2018 | 4 | 4,750 | — | 34.50 | 6/18/2028 | — | — | — | — | | | 11/21/2019 | 4 | 6,367 | — | 34.83 | 11/21/2029 | — | — | — | — | | | 2/2/2023 | 3 | — | — | — | — | 430 | 13,068 | — | — | | | 2/2/2023 | 3 | — | — | — | — | — | — | 1,288 | 39,142 | | | 2/1/2024 | 3 | — | — | — | — | 1,727 | 52,484 | — | — | | | 2/1/2024 | 3 | — | — | — | — | — | — | 2,589 | 78,680 | | | 2/6/2025 | 3 | — | — | — | — | 2,419 | 73,513 | — | — | | | 2/6/2025 | 3 | — | — | — | — | — | — | 2,419 | 73,513 |
OUTSTANDING EQUITY AWARDS AT 2025 FISCAL YEAR END
(1)Options were granted under the 2017 Incentive Plan and predecessor plans. All options granted are for 10-year terms with an exercise price equal to the fair market value (closing price) on the date of the grant, adjusted for stock dividends. (2)RSUs and PSUs were granted under the 2017 Incentive Plan and the number of outstanding awards have been adjusted for dividend equivalents. Fractional shares have been rounded for presentation purposes. For Lee R. Gibson, upon retirement on December 31, 2025, a prorata portion of his outstanding PSUs were cancelled based on the number of months elapsed between the date of his retirement and the regular vesting date. Mr. Gibson's RSUs will continue to vest in accordance with the award agreement and his continuous service as a director of the Company. (3)Options and RSUs vest annually in equal installments over the years noted above, beginning on the first anniversary of the grant date, or earlier upon the death or disability of the grantee, or upon a change in control in which the successor company does not assume or otherwise equitably convert the awards. PSUs cliff vest on the third anniversary of the grant date, subject to the grantee's continued service on such date. (4)Reflects the value calculated by multiplying the number of shares underlying the RSUs and PSUs by $30.39 which was the closing price of our common stock on December 31, 2025. (5)PSUs may be earned based on the Company’s level of achievement of performance goals relating to ROATCE over a three-year performance period beginning January 1, 2023 and ending December 31, 2025, January 1, 2024 and ending December 31, 2026 and January 1, 2025 and ending December 31, 2027, for PSUs granted February 2, 2023, February 1, 2024 and February 6, 2025, respectively. Amounts reported reflect target levels of achievement of the performance goals, which was the probable outcome as of December 31, 2025. (6)For Mr. Gibson, PSU amounts reported in the table represent the remaining PSUs outstanding after the prorata cancellations.
2025 OPTION EXERCISES AND STOCK VESTED
2025 OPTION EXERCISES AND STOCK VESTED The following table shows the number of shares and the value realized upon exercise of stock options and vesting of stock awards for the year ended December 31, 2025 for each of the NEOs.
2025 OPTION EXERCISES AND STOCK VESTED
| | Stock Options | | Stock Awards | | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Award Type | Number of Shares Acquired on Vesting (#) (2) | Value Realized on Vesting ($) (3) | | Lee R. Gibson | — | $— | RSU | 4,961 | $155,319 | | | | | PSU | 5,043 | 147,374 | | Julie N. Shamburger | — | — | RSU | 2,222 | 69,593 | | | | | PSU | 2,234 | 65,283 | | Keith M. Donahoe | — | — | RSU | 2,289 | 66,205 | | | | | PSU | — | — | | Curtis R. Burchard | — | — | RSU | 1,375 | 42,689 | | | | | PSU | — | — | | T. L. Arnold, Jr. | — | — | RSU | 1,609 | 50,450 | | | | | PSU | 1,557 | 45,516 | | | — | $— | | 21,290 | $642,429 |
2025 OPTION EXERCISES AND STOCK VESTED
(1)Value realized represents the excess of the fair market value of the shares at the time of exercise over the exercise price of the options. (2)Number of shares acquired does not include fractional shares, which were settled in cash. (3)Value realized represents the fair market value of the shares on the vesting date, including fractional shares, which were settled in cash.
2025 PENSION BENEFITS
2025 PENSION BENEFITS The table below shows the number of years of service credited to each NEO, the actuarial present value of each NEO's accumulated benefits (determined using interest rate and mortality table assumptions described below), and the amount of payments during 2025 to each of the NEOs, under each of the Pension Plan, Restoration Plan and Deferred Compensation Agreements as of December 31, 2025.
2025 PENSION BENEFITS
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | Lee R. Gibson | Pension Plan | 37.42 | $2,870,759 | $— | | | Restoration Plan | 37.42 | 6,750,521 | — | | | Deferred Compensation Agreement | N/A | 309,081 | — | | Julie N. Shamburger | Pension Plan | 38.58 | 1,793,610 | — | | | Restoration Plan | 38.58 | 1,125,201 | — | | | Deferred Compensation Agreement | N/A | 306,534 | — | | Keith M. Donahoe (1) | Deferred Compensation Agreement | N/A | 45,010 | — | | Curtis R. Burchard (1) | Deferred Compensation Agreement | N/A | 127,511 | — | | T. L. Arnold, Jr. (2) | | | | |
2025 PENSION BENEFITS
(1)Does not participate in the Pension Plan or the Restoration Plan. (2)Does not participate in the Pension Plan or the Restoration Plan, and does not have a Deferred Compensation Agreement.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following discussion summarizes the compensation benefits payable to the NEOs in the event of a termination of their employment under various circumstances, assuming that the termination occurred on December 31, 2025. Lee. R Gibson retired on December 31, 2025, therefore he has only been included in reference to the payments he received in connection with his retirement.
EQUITY COMPENSATION PLAN INFORMATION
| PAY VERSUS PERFORMANCE |
EQUITY COMPENSATION PLAN INFORMATION
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation actually paid to PEO ($)(2) | Average Summary Compensation Table Total for other NEOs ($)(3) | Average Compensation Actually Paid to other NEOs ($)(2)(3) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($ in Millions) | ROATCE %(6) | | | | | | | TSR(4) | Peer Group TSR(5) | | | | 2025 | $3,263,059 | $1,630,618 | $965,700 | $885,397 | $121.02 | $130.14 | $69.2 | 11.22% | | 2024 | 1,991,442 | 1,828,097 | 787,699 | 800,325 | 105.10 | 131.64 | 88.5 | 14.92% | | 2023 | 2,134,717 | 1,267,253 | 833,303 | 638,088 | 98.91 | 110.86 | 86.7 | 16.03% | | 2022 | 1,549,596 | 1,476,916 | 756,008 | 726,766 | 108.56 | 119.01 | 105.0 | 18.56% | | 2021 | 1,442,701 | 1,517,567 | 633,441 | 721,480 | 121.77 | 129.55 | 113.4 | 17.04% |
Relationship between Compensation Actually Paid and Performance
Relationship between Compensation Actually Paid and Performance The graphs below show the relationship of CAP for our PEO and other NEOs in 2021, 2022, 2023, 2024 and 2025, to total shareholder return, the Company's net income and the Company's ROATCE.
Relationship between Compensation Actually Paid and Performance
| PROPOSAL 2 - NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION |
Relationship between Compensation Actually Paid and Performance
Pursuant to Section 14A of the Exchange Act, we are providing our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers. At the 2025 Annual Meeting of Shareholders, approximately 95.9% of the shares represented at the meeting in person or by proxy and entitled to vote were voted in support of the Company’s compensation program. At the 2023 Annual Meeting, the Company’s shareholders selected, on a non-binding, advisory basis, an annual vote for the frequency at which the Company should include a Say-on-Pay vote in its proxy statement for shareholder consideration. In light of this result and other factors considered by the Board, the Board determined that the Company will hold Say-on-Pay votes every year until the next required non-binding, advisory vote on the frequency of such votes, which is to be held no later than the Company's 2029 Annual Meeting of Shareholders. Accordingly, the Board is providing shareholders with the opportunity to cast a non-binding advisory vote on the named executive officer compensation program at our 2026 Annual Meeting. This vote will not be binding on or overrule any decisions by the Board, and will not create or imply any additional fiduciary duty on the part of the Board. However, our Compensation Committee will take into account the outcome of the vote when considering future named executive officer compensation arrangements. As described in greater detail in our Compensation Discussion and Analysis above, we believe that our executive officer compensation program is structured in a manner that most effectively supports the Company and our business objectives. Our executive officer compensation program is designed to reward long-term and strategic performance, and is substantially tied to our key business objectives and the success of our shareholders. We monitor the various short-term and long-term aspects of our executive officer compensation program, including base salary, annual cash bonus and equity incentives, in comparison to similar programs and practices at comparable companies, so that we may ensure that our executive officer compensation program is within the competitive range of market practices. The Board invites our shareholders to review carefully the Compensation Discussion and Analysis and the tabular and other disclosures on compensation under Executive Compensation, and cast a vote to approve the Company’s executive compensation programs through the following resolution: “RESOLVED, that the shareholders approve the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion.” The Board recommends a vote FOR the non-binding advisory vote on the compensation of the Company's named executive officers.
Relationship between Compensation Actually Paid and Performance
| PROPOSAL 3 - AMENDMENT TO THE RESTATED CERTIFICATE OF FORMATION TO CREATE FLEXIBLE PREFERRED STOCK |
Relationship between Compensation Actually Paid and Performance
Our Board has unanimously approved and recommends to the Company’s shareholders an amendment to the Company’s Restated Certificate of Formation (the “Certificate of Formation”) to authorize the issuance of up to 8,000,000 shares of preferred stock, no par value per share (the “Flexible Preferred Stock”), which may be issued by the Company in the future with such designations, preferences, limitations, and relative rights as determined by the Board, without further shareholder action. Our Board believes it is advisable and in the best interest of the Company and its shareholders to authorize the issuance of the Flexible Preferred Stock for the principal reason of providing greater flexibility in financing the Company’s operations, including supporting the continued growth of Southside Bank. Our Board has committed that the Company will not utilize the Flexible Preferred Stock for “anti-takeover” purposes.