DEF 14A of First US Bancshares, Inc.
Filed Mar 27, 2025 · FY20240001193125-25-064712
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Company’s Bylaws provide that the Board shall consist of not less than three and not more than 25 directors, and, if a number is not fixed by the Board, the Bylaws state that there shall be 16 directors. There are currently 11 directors serving on the Board. All current members of our Board will stand for reelection at the Annual Meeting. The Nominating and Corporate Governance Committee and the Board have both determined that a Board consisting of 11 persons is practical and efficient at this point in time. Based on the nominations of the Nominating and Corporate Governance Committee, the Board recommends that the shareholders elect the 11 director nominees named below to hold office until the 2026 Annual Meeting of Shareholders of the Company and until their successors are elected and qualified. Unless “Withhold” is noted as to all or some of the nominees, proxies will be voted at the Annual Meeting FOR the election of the 11 nominees to the Board. Shareholders may not vote for a greater number of persons than the number of nominees named. THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE 11 NOMINEES. While we know of no reason why any nominee would be unable to serve as a director, if, before the voting during the Annual Meeting, any person nominated to be elected as a director is unable to serve, then the shares that would otherwise be voted for that person may be voted for the election of a substitute person recommended by the Board. The following provides certain biographical information about the individuals who have been nominated for election as directors of the Company. The biographical information for each of the nominees below contains a description of the individual’s service as a director; business experience; director positions held currently or at any time during the last five years, if applicable, with a company registered pursuant to Section 12 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or an investment company; information regarding involvement in certain legal or administrative proceedings, if applicable; and the experiences, qualifications, attributes and skills that caused the Board to determine that the individual should serve as a director. The stock ownership with respect to each nominee is set forth in the table entitled “Security Ownership of Certain Beneficial Owners and Management” that appears in this Proxy Statement. Following the Annual Meeting, the Company, as the sole shareholder of First US Bank (the “Bank”), intends to reelect all of the newly-elected directors of the Company as directors of the Bank. Information regarding the executive officers of the Company who are not directors is also provided below.
Information About Director Nominees
Information About Director Nominees
Information About Director Nominees
| James F. House Chairperson of the Board Director since 2011 Age 72 | Mr. House, currently serving as the Chairperson of the Board (a position he has held since January 29, 2025), became a director of the Company pursuant to an employment agreement among the Company, the Bank and Mr. House dated November 7, 2011, and Mr. House has served as President and Chief Executive Officer of the Company and the Bank since that date. Mr. House has extensive experience in the banking industry. From May 2009 until November 2011, he served as Florida Division President of BankTrust. From 2005 until 2009, Mr. House was a business consultant focusing on management, investments and commercial and consumer lending issues. Prior to that, he held numerous executive and senior management positions with SouthTrust Bank, including Executive Vice President, General Bank Commercial (2003-2004); Chief Executive Officer, Urban West Region (2002-2003); Chief Executive Officer, North Alabama/Tennessee Region (2000-2001); Chief Executive Officer, Birmingham Market Bank (1999-2003); and Chairman and Chief Executive Officer, SouthTrust Bank of Dothan, N.A. (1994-1998). The Board believes that, from these years of experience in a number of positions and areas in banking and his senior executive-level services to the Company and the Bank, Mr. House has gained an intimate knowledge of the banking industry and, more specifically, the business and operations of the Company and the Bank, which provides valuable insight to the Board. | | Robert Stephen Briggs Vice Chairperson of the Board Lead Independent Director Director since 2014 Age 75 | Mr. Briggs has more than 40 years of experience in the insurance industry, serving as a field agent, general manager and company executive. In 2008, after his retirement from Protective Life Corporation as an Executive Vice President, Mr. Briggs founded Petra Life Services, Inc., which provides insurance, financial and investment consulting services, and he has served as its President and Chief Executive Officer since its formation. In addition, Mr. Briggs is Chief Executive Officer of Longevity Quest, Inc., which provides longevity analysis for wellness management and longevity planning. He is a former member of the board of directors of American United Mutual Insurance Holding Company, having served as lead independent director, a member of the executive committee, chair of the governance and nominating committee and chair of the compensation committee before retiring in 2021. The Board believes that Mr. Briggs’ leadership experience and knowledge of financial services resulting from his career in the insurance industry enable him to provide valuable insight to the Board. After considering Mr. Briggs’ contributions to the Board and extensive experience and qualifications set forth above, the Board, at the recommendation of the Nominating and Corporate Governance Committee, decided that it was in the best interest of the Board, the Company and its stockholders to waive the policy requiring non-employee directors to retire following their 75th birthday. | | Robert C. Field Director since 2024 Age 63 | Mr. Field is a partner, with more than 35 years of experience, with the Welden-Field group of companies, where he has worked since 1997. The Welden-Field group of companies specializes in real estate development, mortgage banking, property management, alternative investments, and formerly banking. Mr. Field’s current direct work focus includes multifamily investment, mortgage banking, alternative assets, and administration. Mr. Field currently serves as Chairman of The General |
Information About Director Nominees
| | Retirement System for Employees of Jefferson County and is also on the advisory board of Boyd Watterson, which specializes in mission critical properties leased to various agencies. Mr. Field is a former Certified Public Accountant and began his career with Arthur Anderson & Company. The Board believes that Mr. Field’s operational experience and practical knowledge gained through his employment in several real estate and banking roles allow him to provide valuable insight and expertise to the Board. | | David P. Hale Director since 2017 Age 67 | Dr. Hale served as a Professor of Management Information Systems and Endowed MIS Fellow in the Culverhouse College of Business and the Manderson Graduate School of Business at The University of Alabama, where he was on the faculty from 1995 until his retirement in 2022. In this role, he co-developed and led the Management Information Systems program, which has been recognized as one of the top programs of its type nationally. He was also Director of the Aging Infrastructure Systems Center of Excellence. In addition, Dr. Hale has been and is currently engaged by various commissions and task forces of federal and state governments, as well as numerous private sector companies, for initiatives relating to economic development, information technology, and cybersecurity, among other matters. The Board believes that Dr. Hale’s knowledge and experience in the areas of information technology and cybersecurity are valuable assets and resources for the Company and the Board. | | Marlene M. McCain Director since 2021 Age 67 | Ms. McCain is a Certified Public Accountant and is currently providing consulting services to a large non-profit organization in Birmingham, Alabama. She retired from public accounting in 2017 after serving as a member of Warren Averett, LLC for 14 years. Ms. McCain has over 40 years of accounting experience, including almost 30 years in public accounting, including 10 years at an international firm, where she specialized in accounting and consulting services to a wide range of financial services entities (banks, credit unions, brokers/RIAs, and mortgage and insurance entities), in addition to health care, technology, retail and nonprofit organizations. Prior to Warren Averett, she spent ten years working as a Vice President of Finance or Group Controller for two large companies in the Birmingham area and ten years with Ernst & Young LLP as an auditor. Ms. McCain has served as both chair and commissioner of the Alabama Securities Commission, as well as the chair and a board member of the Alabama Society of Certified Public Accountants (ASCPA). She served a one-year term on the American Institute of Certified Public Accountants (AICPA) Board of Directors. She also received the prestigious AICPA Woman to Watch – Experienced Leader Award in 2011 and served as president and board member of the American Society of Women Accountants. Ms. McCain has always been active in the community, with her primary focus on volunteer activities for certain nonprofit organizations. Ms. McCain’s extensive public accounting experience, as well as her management experience and practical knowledge gained through her employment in finance-related roles at various companies, give her a wide range of accounting, financial, capital markets, risk assessment and other executive management experience and skills, all of which provide valuable insight and expertise to the Board. |
Information About Director Nominees
| J. Lee McPhearson Director since 2009 Age 71 | Mr. McPhearson has worked as an attorney since 1978, and he is currently practicing in Butler, Alabama. Mr. McPhearson also serves as County Attorney for Choctaw County, Alabama. From 1995 until 2002, Mr. McPhearson served as Circuit Judge for the First Judicial Circuit of the State of Alabama and previously served from 1981 until 1987 as District Attorney for the First Judicial Circuit. Mr. McPhearson is currently actively involved in timber and real estate enterprises, including McPhearson Land and Timber Company, LLC and McPhearson Land Holdings, LLC, of which he is the managing member, and MJM Development, LLC, of which he is the secretary and member. He also helps oversee and manage the timber operations and oil and gas interests on land that comprises property in Choctaw County, Alabama, and Wayne County, Mississippi. Mr. McPhearson’s experience as a legal practitioner, which involves some representation and advising of business entities, as well as his knowledge and understanding of the communities served by the Company and the Bank gained through his time on the bench, contribute greatly to the Board. Additionally, Mr. McPhearson’s experience in the timber and real estate industries provides valuable insight to the Board regarding land and timber valuations and market conditions, which are important to the business of the Company and the Bank. | | Jack W. Meigs Director since 1997 Age 67 | Mr. Meigs served as Circuit Judge for the Fourth Judicial Circuit of the State of Alabama from 1991 until his retirement in April 2016. He has been engaged in the private practice of law since April 2016. The Board believes that Mr. Meigs’ extensive legal experience in the local area, both as a practitioner and as a judge, provides him with a wide range of management skills and knowledge on topics important to businesses, which contribute greatly to the composition of the Board. | | Aubrey S. Miller Director since 2014 Age 72 | Mr. Miller serves as President of Higher Expectations Non-Profit Consulting Group, a position he has held since 2023, and he has served as Senior Pastor of the Faith Church at Midfield in Birmingham, Alabama since 1991. Previously, he served as President of the Shelby County, Alabama Board of Education, a position to which he was elected, from 2009 until 2022. Mr. Miller also served as Executive Director of the Juvenile Diabetes Research Foundation in Birmingham, Alabama from 2009 until his retirement in July 2015 and served as the Senior Vice President of Financial Development for the YMCA of Greater Birmingham until retiring in 2020. He also served as President and Chief Development Officer of the Baptist Health Foundation in Birmingham from 2005 to 2008. The Board believes that Mr. Miller’s extensive experience in leading multiple organizations and in effectively creating and implementing budgets and strategic plans allows him to provide valuable insight and advice to the Board. | | Staci M. Pierce Director since 2024 Age 49 | Ms. Pierce currently is the Chief Executive Officer of Action Enterprise Holdings, LLC, a transportation and environmental services company headquartered in Birmingham, a position she has held since June 2020. Prior to this role and starting in July 2016, she served as General Counsel, EVP of Risk and Corporate Development, Corporate Secretary for Action Enterprise Holdings, LLC. She has over eight years of experience in executive and leadership roles in the transportation and environmental services industries and, prior to that, practiced law for five years. Ms. Pierce is also a member of the board of directors and its compensation committee of ProAssurance |
Information About Director Nominees
| | Corporation, a public healthcare professional liability company. Ms. Pierce is actively involved with and volunteers in a number of non-profit organizations, and she holds a number of honors and leadership awards. The Board believes that Ms. Pierce’s background as a business executive and attorney has provided her with acumen that enables her to offer the Board valuable insight. | | Tracy E. Thompson Director since 2024 Age 66 | Mr. Thompson co-founded Focus Health Group in 2002, and he has served as its Chief Executive Officer since 2018. Focus Health Group is a health services company based in Knoxville, Tennessee, that provides low-cost generic pharmaceutical products. Mr. Thompson is also the co-founder of ZeniMedical and has served as its Chief Executive Officer since 2019. ZeniMedical provides dressing and wound care solutions for patients. Previously, Mr. Thompson served as Chairman of the Board and Chief Executive Officer of The Peoples Bank, which was organized in 1920 and acquired by the Bank in 2018. In addition, Mr. Thompson holds real estate for development and investments and is a partner of Crescent at Ebenezer, a luxury apartment community in the heart of West Knoxville. Since 1998, Mr. Thompson has been an entrepreneur, founder/co-founder, and investor in several successful businesses The Board believes that Mr. Thompson’s extensive business experience, particularly operating a bank and investing in real estate, allows him to offer the Board valuable insight. | | Bruce N. Wilson Director since 1997 Age 70 | Mr. Wilson is a practicing attorney and the senior member in the law firm of Wilson, Drinkard & Drinkard, LLC, where he has worked since 1993. Through his law practice, Mr. Wilson has represented and continues to represent business and corporate clients throughout all phases of their operations. He counsels clients on various real estate, industrial and economic development, and budgetary and auditing issues. The Board believes that Mr. Wilson’s experience and understanding of these issues enable him to provide valuable insight to the Board. |
Information About Executive Officers Who Are Not Also Directors
Information About Executive Officers Who Are Not Also Directors
Information About Executive Officers Who Are Not Also Directors
| Thomas S. Elley Age 53 | Mr. Elley has served as the Vice President, Chief Financial Officer, Principal Accounting Officer, Treasurer and Assistant Secretary of the Company and Senior Executive Vice President, Chief Financial Officer, Treasurer, Assistant Secretary and Investment Officer of the Bank since October 2013. In May 2022, he was named Senior Executive Vice President of the Company. Prior to his employment with the Company and the Bank, Mr. Elley served as the Vice President, Accounting Policy Manager and Line of Business Controller at Regions Financial Corporation in Birmingham, Alabama. From January 2000 to August 2010 and from April 2011 to May 2013, Mr. Elley served in various roles in the audit practice at Deloitte & Touche LLP, including Senior Manager, where he focused on Securities and Exchange Commission reporting, regulatory accounting and internal control audits under the Sarbanes-Oxley Act of 2002. From August 2010 to March 2011, Mr. Elley held the position of Impaired Loan Accounting Specialist with Iberiabank Corporation in Birmingham, Alabama. Mr. Elley also has prior experience as a compliance officer and loan analyst for financial institutions and is a Certified Public Accountant. |
Information About Executive Officers Who Are Not Also Directors
| William C. Mitchell Age 59 | Mr. Mitchell was named Senior Executive Vice President, Consumer Lending in September 2022, after previously serving in this role from January 2020 to August 2020. Mr. Mitchell served as Senior Executive Vice President, Consumer Banking from August 2020 to September 2022. Mr. Mitchell served as President and Chief Executive Officer of the Bank’s subsidiary, Acceptance Loan Company, Inc. (“ALC”), from February 2008 to January 2020, and as Interim President and Chief Executive Officer of ALC from November 2007 to February 2008. Mr. Mitchell worked for ALC from May 1997 until he transferred to the Bank in January 2020. | | Eric H. Mabowitz Age 66 | Mr. Mabowitz joined the Bank in March 2008 and currently serves as the Senior Executive Vice President, Chief Risk Officer, Chief Compliance Officer, and CRA Officer. Mr. Mabowitz served as Executive Vice-President, South Alabama Market Executive from January 2016 until his appointment as Chief Risk Officer in January 2020. Prior to his employment with the Bank, Mr. Mabowitz was President and Chief Operating Officer of Premier Bank of the South from 2007 to 2008. He was employed by First Community Bank from 2006 to 2007 as Executive Vice President, Administration and from 2001 to 2006 as Executive Vice President, Chief Credit Officer. Mr. Mabowitz was employed by Renasant Bank from 1997 to 2001 and held several positions in credit administration. | | Beverly J. Dozier Age 60 | Ms. Dozier has served as Vice President, Corporate Secretary and Assistant Treasurer of the Company since October 2009. In May 2022, she was named Senior Vice President of the Company. She served as Senior Vice President, Executive Administration and Corporate Secretary of the Bank until January 1, 2020, when she was named Senior Vice President, Thomasville Market Executive, Corporate Secretary, and Assistant Treasurer of the Bank. Ms. Dozier has served the Bank in numerous capacities since 1984, including working as a loan officer and mortgage originator. |
Information About Executive Officers Who Are Not Also Directors
None of the directors or executive officers are related to any other director or executive officer of the Company.
Consideration of Director Nominees
Consideration of Director Nominees
Criteria and Board Composition
Criteria and Board Composition Criteria that are used by the Nominating and Corporate Governance Committee in connection with evaluating and selecting new directors include factors relating to whether the candidate would meet the definition of “independent,” as defined by the applicable Nasdaq listing rules, as well as the candidate’s skills, occupation and experience in the context of the needs of the Board. The Board believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. The Nominating and Corporate Governance Committee continually reviews the qualifications and responsibilities of all directors in consideration of the Board’s overall responsibility to shareholders. The Nominating and Corporate Governance Committee also considers issues of relevant experience, intelligence, independence, commitment, integrity, diligence, conflicts of interest, age, compatibility with the Company’s other Board members and management team, understanding of the Company’s business and culture, the ability to act in the best interests of the shareholders, and other factors deemed relevant. The goal of this process is to assemble a group of directors with deep, varied experience, sound judgment and commitment to the success of the Company. For a discussion of the individual experience and qualifications of our directors, refer to “Proposal 1 – Election of Directors” in this Proxy Statement.
Process for Identifying and Evaluating Director Nominees
Process for Identifying and Evaluating Director Nominees The process followed by the Nominating and Corporate Governance Committee to identify and evaluate candidates includes requests to Board members and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by members of the Nominating and Corporate Governance Committee and the Board. Assuming that the appropriate biographical and background material discussed below is provided on behalf of candidates recommended by shareholders, the Nominating and Corporate Governance Committee will evaluate those candidates by applying substantially the same criteria and following substantially the same process as that used for candidates submitted by Board members. With respect to Messrs. Field and Thompson and Ms. Pierce, each of whom was elected to the Board following the 2024 Annual Meeting of Shareholders, such candidates were recommended to the Nominating and Corporate Governance Committee by other current members of the Board.
Director Nominees Proposed by Shareholders
Director Nominees Proposed by Shareholders The Nominating and Corporate Governance Committee will consider candidates recommended by shareholders for inclusion by the Board in the slate of nominees that the Board recommends to the shareholders for election. In considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, including candidates recommended by shareholders, the Nominating and Corporate Governance Committee applies the selection criteria and follows the process described above. Shareholders may recommend individuals for the Nominating and Corporate Governance Committee to consider as potential director candidates by submitting the following information to the Nominating and Corporate Governance Committee, c/o Corporate Secretary of First US Bancshares, Inc., 131 West Front Street, P.O. Box 249, Thomasville, Alabama 36784:
Director Nominees Proposed by Shareholders
| • | the name of the recommended person; |
Director Nominees Proposed by Shareholders
| • | all information relating to the recommended person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Exchange Act; |
Director Nominees Proposed by Shareholders
| • | the written consent of the recommended person to being named in the proxy statement as a nominee and to serve as a director if elected; |
Director Nominees Proposed by Shareholders
| • | as to the shareholder making the recommendation, the name and address of such shareholder as the name and address appear 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 registered holder; and |
Director Nominees Proposed by Shareholders
| • | a statement disclosing whether such shareholder is acting with or on behalf of any other person and, if applicable, the identity of such person. |
Director Nominees Proposed by Shareholders
In addition to submitting nominations in advance to the Nominating and Corporate Governance Committee for consideration, a shareholder also may nominate persons for election to the Board of Directors in person at a shareholders meeting. Section 2.15 of the Company’s Bylaws provides for procedures pursuant to which shareholders may nominate a candidate for election as a director of the Company. The chairperson of the meeting shall have the power to determine and declare to the meeting whether or not a nomination was made in accordance with the procedures set forth in our Bylaws and, if the chairperson determines that a nomination is not in accordance with the procedures set forth in the Bylaws, to declare to the meeting that the nomination will be disregarded. A copy of the Company’s Bylaws is filed as Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on January 30, 2025. We will furnish any person without charge, upon written request, a copy of the Bylaws. In addition to satisfying the requirements under our Bylaws, to comply with the SEC’s universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice to the Company that complies with the informational and timing requirements of Rule 14a-19 under the Exchange Act.
Compensation Philosophy and Objectives
| • | Competitive. We review the compensation practices of the other companies in our compensation peer group and aim to target compensation for our executives at or near the market 50% percentile. |
Compensation Philosophy and Objectives
| • | Performance-based. We use a mixture of options, time-based restricted stock and cash incentives to link our executives’ compensation to Company short- and long-term performance. Our cash incentive program for 2024 used the following specific metrics to determine executive bonuses: consolidated pre-tax income, consolidated pre-tax return on average assets, consolidated pre-tax return on average tangible equity, net loan growth in indirect lending and a discretionary component related to each executive’s contributions toward the Company’s strategic goals during 2024. |
Compensation Philosophy and Objectives
| • | Shareholder-aligned. Our stock-based incentives encourage the creation of long-term value and link the interests of our executives to those of our shareholders. |
Compensation Governance Best Practices
| What We Do | What We Do Not Do | | • Review the compensation peer group annually to ensure reasonable and appropriate size and scope fit for purposes of comparing executive compensation and bank performance • Have an independent Compensation Consultant advise the Compensation Committee • Conduct regular compensation benchmarking to assess the level of pay competitiveness for named executive officers • Assess actual pay positioning for named executive officers in relation to target pay positioning outlined in our compensation philosophy | • No repricing of awards under our Incentive Plans without shareholder approval • No tax gross-up provisions exist in our agreements with named executive officers and we do not provide tax gross-ups for any taxable perks • Restrictions on hedging and pledging of FUSB securities under our insider trading policy • No active SERPs • No “timing” of equity grants. We do not grant equity awards in anticipation of the release of material, non-public information, and we do not time the release of material, |
Compensation Consultant
Compensation Consultant The charter of the Compensation Committee grants the Committee the authority to hire outside consultants to further its objectives and assist with its responsibilities. The Compensation Committee has engaged Willis Towers Watson, an independent compensation consultant, to assist the Compensation Committee by reviewing, assessing and providing recommendations with respect to the amount and form of director and executive officer compensation. The Company does not have a policy that limits the services that an executive compensation consultant can perform. However, the Company has not engaged Willis Towers Watson for any projects other than those directed by the Compensation Committee and management, as described above, nor has Willis Towers Watson performed any other services for the Company. As a result, the Company has determined that Willis Towers Watson operates with full objectivity and without conflicts of interest in its support of the Compensation Committee.
Benchmarking
Benchmarking In determining market competitiveness of compensation, the Compensation Committee, with the assistance of Willis Towers Watson, reviews annually a combination of proxy information from the Company’s compensation peer group and available market compensation survey data. The Compensation Committee may also use comparisons to the Company’s compensation peer group to consider other market practices relevant to the scope of our executives’ responsibilities. The Compensation Committee generally seeks to provide our executives with total compensation positioned around the median of competitive practice in order to assist in attracting and retaining talented executives and to further motivate and reward our NEOs for sustained, long-term improvements in the Company’s financial results. At the request of the Compensation Committee, Willis Towers Watson prepared an evaluation of our peer group for use in 2024. As a result of the evaluation, Willis Towers Watson recommended, and the Compensation Committee approved, the twelve companies listed below as the peer group for 2024. Willis Towers Watson identified and recommended these companies based on their being in a similar industry, being in a similar location and trading on the same stock exchange as the Company, as well as having assets between 0.5 and 2.0 times those of First US Bank.
Benchmarking
| 2024 Compensation Peer Group | | | | Company | Assets (in millions)* | Market Cap (in millions)† | | Colony Bankcorp, Inc. | $3,053 | $272 | | Investar Holding Corporation | 2,815 | 182 | | Southern States Bancshares, Inc. | 2,447 | 291 | | First Community Corporation | 1,828 | 172 | | Peoples Bancorp of North Carolina, Inc. | 1,636 | 168 | | Citizens Holding Company | 1,405 | 51 | | Auburn National Bancorporation, Inc. | 975 | 65 | | Bank of the James Financial Group, Inc. | 969 | 62 | | Affinity Bancshares, Inc. | 843 | 138 | | United Bancorp, Inc. | 819 | 74 | | Village Bank and Trust Financial Corp. | 737 | 70 | | Bank of South Carolina Corporation | 640 | 68 |
Benchmarking
| * Information as of December 31, 2023. |
Benchmarking
| † Information as of July 31, 2024. |
2024 Cash Incentive Program
2024 Cash Incentive Program In February 2024, the Company established a cash incentive program for certain executive officers and key employees of the Company and its subsidiaries designed to incentivize the achievement of specified short-term performance criteria (the “2024 CIP”). Under the 2024 CIP, each Named Executive Officer had the opportunity to earn a one-time cash payment equal to a predetermined percentage of his 2024 base salary, with the earned amount based on the level of performance with respect to certain corporate objectives applicable to the Company and the Bank. For Mr. House and Mr. Elley, the payment was based on (i) consolidated pre-tax income of the Company, (ii) consolidated pre-tax return on average assets, (iii) consolidated pre-tax return on average tangible equity, and (iv) a discretionary component related to each executive’s contributions toward the Company’s strategic goals during 2024. For Mr. Mitchell, the payment was based on (a) consolidated pre-tax income of the Company, (b) consolidated pre-tax return on average assets, (c) consolidated pre-tax return on average tangible equity, (d) net loan growth in indirect lending and (e) a discretionary component related to Mr. Mitchell’s contributions toward the Company’s strategic goals during 2024. The Company’s 2024 performance targets are set forth in the table below.
2024 Cash Incentive Program
| | 2024 Financial Performance Objectives | | | | | | | Corporate Objective | Threshold | Target | Stretch | Actual Results | | Weight | | Consolidated pre-tax income | $9,840,000 | $12,300,000 | $14,760,000 | | 10,754,000 | 25% | | Consolidated return on average assets (pre-tax) | 0.90% | 1.12% | 1.34% | | 1.00% | 30% (2) or 25% (3) | | Return on average tangible equity (pre-tax) | 11.56% | 14.45% | 17.34% | | 12.33% | 25% (2) or 15% (3) | | Loan Growth – Indirect Lending | $24,000,000 | $30,000,000 | $36,000,000 | ($ | 2,220,000) | 15% (3) | | Discretionary (1) | 80% | 100% | 120% | | (1) | 20% |
2024 Cash Incentive Program
| (1) The Compensation Committee approved the discretionary portion of Mr. House’s and Mr. Elley’s performance objectives at 100% based on, among other things, successful implementation of strategic reorganization and cost control initiatives, as well as improvement in total shareholder return in 2024. The Compensation Committee approved the discretionary portion of Mr. Mitchell’s performance objectives at 120% based on, among other things, successful implementation of strategic reorganization and cost control initiatives, improvement in total shareholder return in 2024 and expansion of indirect lending dealer relationships in 2024. |
2024 Cash Incentive Program
| (2) This number reflects the weight for Mr. House and Mr. Elley. |
2024 Cash Incentive Program
| (3) This number reflects the weight for Mr. Mitchell. |
2024 Cash Incentive Program
Based on the performance metrics above, each Named Executive Officer was eligible to earn the payout amounts set forth in the table below.
2024 Cash Incentive Program
| | | 2024 Annual Incentive Range | | | | | | | Name | Threshold | Threshold (% of Salary) | Target | Target (% of Salary) | Stretch | Stretch (% of Salary) | 2024 Incentive Earned | | James F. House | $90,000 | 22.5% | $180,000 | 45.0% | $270,000 | 67.5% | $134,890 | | Thomas S. Elley | 47,810 | 17.5% | 95,620 | 35.0% | 143,430 | 52.5% | 71,657 | | William C. Mitchell | 45,535 | 17.5% | 91,070 | 35.0% | 136,605 | 52.5% | 68,253 |
2024 Cash Incentive Program
Each Named Executive Officer’s cash incentive payment was potentially subject to a downward adjustment as a result of certain regulatory or compliance ratings at the Bank.
Equity Awards
Equity Awards Our Named Executive Officers historically were eligible to participate in the First US Bancshares, Inc. 2013 Incentive Plan, which was originally adopted by the Board on March 22, 2013, and amended on May 2, 2019 (the “2013 Incentive Plan”). The 2013 Incentive Plan provided for the grant of incentive and nonqualified stock options, stock appreciation rights, awards of restricted stock and restricted stock units and performance compensation awards, including performance-based cash bonuses, to employees, non-employee directors and certain consultants of the Company and its affiliates, including the Bank. On February 22, 2023, the Board adopted the First US Bancshares, Inc. 2023 Incentive Plan (the “2023 Incentive Plan”), which was approved by the Company’s shareholders on April 27, 2023. The 2023 Incentive Plan provides for the grant of the same types of awards as the 2013 Incentive Plan. The Compensation Committee intends to grant all future incentive awards under the 2023 Incentive Plan, and no additional grants will be made under the 2013 Incentive Plan. On February 9, 2024, we granted equity awards to our Named Executive Officers in the following amounts: 8,200 shares of restricted stock for Mr. House, 4,200 shares of restricted stock for Mr. Elley and 4,000 shares of restricted stock for Mr. Mitchell. These shares of restricted stock vest in equal increments on the first three anniversaries of the grant date.
Equity Grant Practices
Equity Grant Practices
iming of Equity Grants
iming of Equity Grants . We have not granted stock options as part of our equity compensation program since 2020, but the Compensation Committee may decide to do so again in the future. The Committee does not take into account material nonpublic information in determining the timing and terms of equity-based awards, and we have not timed the disclosure of material nonpublic information for the purposes of affecting the value of executive compensation. No stock options were issued to executive officers in 2024 during any period beginning four business days before the filing of a periodic report or current report disclosing material non-public information and ending one business day after the filing or furnishing of such report with the SEC.
Termination and Change in Control Benefits
Termination and Change in Control Benefits We believe that it is important to protect the financial interests of our senior management in the event of a change in control. Further, we believe that the interests of the Company’s shareholders are best served if the interests of our senior management are aligned with the shareholders’ interests. Providing change in control benefits should eliminate, or at least reduce, the reluctance of senior management to pursue potential change in control transactions that may be in the best interests of our shareholders. Mr. House, our President and Chief Executive Officer, is the only Named Executive Officer with an employment agreement. On December 19, 2013, the Company, the Bank and Mr. House entered into an Amended and Restated Executive Employment Agreement that replaced the original employment agreement entered into by the Company, the Bank and Mr. House on November 7, 2011, when Mr. House first began serving as the President and Chief Executive Officer of the Company and the Bank. In addition to setting forth various terms with respect to Mr. House’s base salary, the equity compensation, perquisites and other benefits to which Mr. House is entitled, and certain restrictive covenants, the employment agreement contains certain termination and change in control provisions, the details of which are further discussed under the caption, “Employment Agreement with Mr. House.” Additionally, we have entered into a Change in Control Agreement with each of our executives, including Mr. Elley and Mr. Mitchell, pursuant to which certain payments are required in connection with a change in control. In the first quarter of 2022, we amended and restated the Change in Control Agreements for Mr. Elley and Mr. Mitchell. For more information, see “Potential Payments Upon Termination or Change in Control” contained herein.
Insider Trading Policy; Prohibition on Pledging and Hedging of Company Stock and Equity Award Repricing
Insider Trading Policy; Prohibition on Pledging and Hedging of Company Stock and Equity Award Repricing We are committed to promoting high standards of ethical business conduct and compliance with applicable laws, rules and regulations. As part of this commitment, we have adopted an Insider Trading Policy (the “Policy”) governing all transactions in the Company’s securities by the directors, officers and employees of the Company and any subsidiary that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to us. A copy of the Policy was filed as Exhibit 19.1 to our Annual Report on Form 10-K for the year ended December 31, 2024. The Policy prohibits the directors, officers and employees of the Company and any of its subsidiaries from pledging their common stock in the Company as security or engaging in transactions designed to “hedge” against the price of the Company’s common stock. The Policy explicitly prohibits short sales and hedging or monetization transactions, including options trading (buying or selling puts or calls or other derivative securities). These restrictions ensure that the NEOs, as well as other Company personnel, cannot offset or hedge against declines in the price of the Company’s common stock they own or have a personal interest in the price of their shares that may be different from the interests of other stockholders generally. None of the Company’s directors or executive officers currently engage in any pledging or hedging transactions. The Board of Directors and the Compensation Committee view equity-based compensation to be a key factor in incentivizing the future performance of our executives. Consequently, the 2023 Incentive Plan provides that the Compensation Committee is not permitted to reduce the exercise price of outstanding stock options or stock appreciation rights; replace any stock option or stock appreciation right with a new award with a lower exercise price; cancel any stock option or stock appreciation right in exchange for cash; or take any other action that would be treated as a repricing under the Nasdaq listing rules.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table sets forth, for the years ended December 31, 2024 and 2023, a summary of the compensation paid to or earned by the Named Executive Officers. Note that, as a “smaller reporting company” and pursuant to the rules of the SEC, the Company is providing compensation information for 2024 and 2023 for Mr. House, as the President and Chief Executive Officer of the Company and the Bank, and Mr. Elley and Mr. Mitchell, as the two most highly compensated executive officers of the Company other than Mr. House who were serving as executive officers at the end of 2024.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary | Stock Awards (1) | Option Awards | Non-Equity Incentive Plan Compensation (2) | All Other Compensation (3) | Total | | James F. House | 2024 | $400,000 | $85,362 | — | $134,890 | $23,899 | $644,151 | | President and Chief Executive Officer of the Company and the Bank | 2023 | 390,000 | 81,755 | — | 230,654 | 22,263 | 724,672 | | Thomas S. Elley | 2024 | 273,200 | 43,722 | — | 71,657 | 24,799 | 413,378 | | Senior Executive Vice President, Chief Financial Officer, Principal Accounting Officer, Treasurer and Assistant Secretary of the Company | 2023 | 265,200 | 42,355 | — | 121,990 | 23,738 | 453,283 | | William C. Mitchell | 2024 | 260,200 | 41,640 | — | 68,253 | 19,276 | 389,369 | | Senior Executive Vice President, Consumer Lending of the Bank | 2023 | 252,200 | 39,400 | — | 118,927 | 20,219 | 430,746 |
SUMMARY COMPENSATION TABLE
| (1) The amounts presented in this column represent the grant date fair value of shares of restricted common stock, computed in accordance with Accounting Standards Codification (“ASC”) Topic 718. |
SUMMARY COMPENSATION TABLE
| (2) The amounts presented in this column represent cash paid under the 2024 or 2023 cash incentive program, as applicable. |
SUMMARY COMPENSATION TABLE
| (3) The following table describes each component in the “All Other Compensation” column for 2024 and 2023: |
SUMMARY COMPENSATION TABLE
| Name | Year | 401(k) Contributions | Life Insurance Premiums | LTD Insurance Premiums* | AD&D Insurance Premiums | Automobile | Cell Phone Fees | Other** | Total | | James F. House | 2024 2023 | $13,800 13,200 | $4,846 4,846 | $293 — | $43 43 | $1,585 655 | $1,170 1,170 | $2,162 2,349 | $23,899 22,263 | | Thomas S. Elley | 2024 2023 | 13,800 13,200 | 564 564 | 346 — | 96 96 | 7,200 7,200 | 1,170 1,170 | 1,623 1,508 | 24,799 23,738 | | William C. Mitchell | 2024 2023 | 13,800 13,200 | 564 564 | 326 — | 96 96 | 3,174 5,036 | 1,170 1,170 | 146 153 | 19,276 20,219 |
SUMMARY COMPENSATION TABLE
| * These amounts represent premiums paid by the Company during 2024 for additional long-term disability policies provided to the Company’s executives, which additional coverage was approved by the Compensation Committee in October 2024 and effective December 2024. |
SUMMARY COMPENSATION TABLE
| ** For Mr. House, this amount for 2024 includes $1,900 in club fees and $262 for a radio subscription fee, and this amount for 2023 includes $1,860 in club fees and $489 for a radio subscription fee. For Mr. Elley, this amount for 2024 represents $1,623 in club fees, and this amount for 2023 represents $1,508 in club fees. For Mr. Mitchell, this amount for 2024 represents $146 for a radio subscription service fee, and this amount in 2023 represents $153 for a radio subscription fee. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END The following table sets forth information as of December 31, 2024, concerning outstanding equity awards previously granted to our Named Executive Officers:
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| | Option Awards | | | | | Stock Awards | | | Name of Executive | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares in Units of Stock That Have Not Vested (9) | | James F. House | 02/24/16(1) | 11,000 | — | 8.30 | 02/24/26 | — | — | | | 02/22/17(2) | 11,000 | — | 14.11 | 02/22/27 | — | — | | | 02/12/18(3) | 9,900 | — | 11.71 | 02/12/28 | — | — | | | 02/27/19(4) | 9,900 | — | 10.01 | 02/27/29 | — | — | | | 02/26/20(5) | 9,200 | — | 11.94 | 02/26/30 | — | — | | | 02/22/22 | — | | | | 2,745(6) | $34,560 | | | 02/10/23 | — | | | | 5,534(7) | 69,673 | | | 02/09/24 | — | | | | 8,200(8) | 103,238 | | Thomas S. Elley | 02/24/16(1) | 6,100 | — | 8.30 | 02/24/26 | — | — | | | 02/22/17(2) | 7,000 | — | 14.11 | 02/22/27 | — | — | | | 02/12/18(3) | 6,300 | — | 11.71 | 02/12/28 | — | — | | | 02/27/19(4) | 6,300 | — | 10.01 | 02/27/29 | — | — | | | 02/22/22 | — | — | | | 1,167(6) | 14,693 | | | 02/10/23 | — | — | | | 2,867(7) | 36,096 | | | 02/09/24 | — | | | | 4,200(8) | 52,878 | | William C. Mitchell | 02/24/16(1) | 6,800 | — | 8.30 | 02/24/26 | — | — | | | 02/22/17(2) | 7,000 | — | 14.11 | 02/22/27 | — | — | | | 02/12/18(3) | 5,100 | — | 11.71 | 02/12/28 | — | — | | | 02/27/19(4) | 5,600 | — | 10.01 | 02/27/29 | — | — | | | 02/22/22 | — | — | | | 1,067(6) | 13,434 | | | 02/10/23 | — | — | | | 2,667(7) | 33,578 | | | 02/09/24 | — | | | | 4,000(8) | 50,360 |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (1) Options granted in February 2016 vested in equal increments on the first three anniversaries of the grant date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (2) Options granted in February 2017 vested in equal increments on the first three anniversaries of the grant date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (3) Options granted in February 2018 vested in equal increments on the first three anniversaries of the grant date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (4) Options granted in February 2019 vested in equal increments on the first three anniversaries of the grant date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (5) Options granted in February 2020 vested in equal increments on the first three anniversaries of the grant date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (6) The amount represents restricted shares of common stock granted under the 2013 Incentive Plan on February 22, 2022, that vest in equal increments on the first three anniversaries of the grant date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (7) The amount represents restricted shares of common stock granted under the 2013 Incentive Plan on February 10, 2023, that vest in equal increments on the first three anniversaries of the grant date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (8) The amount represents restricted shares of common stock granted under the 2023 Incentive Plan on February 9, 2024, that vest in equal increments on the first three anniversaries of the grant date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (9) The amount represents the product of $12.59, which was the closing price for a share of our common stock reported by Nasdaq on December 31, 2024 (the last trading day of 2024), and the number of unvested shares of restricted stock reflected in the table for the corresponding award. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control Mr. House’s 2013 Employment Agreement contains severance provisions pursuant to which Mr. House is entitled to certain payments or benefits in the event that his employment is terminated without “cause” or for “good reason.” See the discussion under “Employment Agreement with Mr. House” for additional information. In addition, on May 20, 2014, the Company entered into Change in Control Agreements with its executive officers, including Mr. Elley, and on February 22, 2021, the Company entered into an Amended and Restated Change in Control Agreement with Mr. Mitchell. Subsequently, on March 1, 2022, the Company entered into an Amended and Restated Change in Control Agreement with certain of its executive officers, including Mr. Elley, and a Second Amended and Restated Change in Control Agreement with Mr. Mitchell (collectively, the “Amended CIC Agreements”). Each of the Amended CIC Agreements provides for an eighteen-month period following a “change in control” (as defined in the Amended CIC Agreements) during which the executive officer will be, upon experiencing a “qualifying termination of employment” (as defined in the Amended CIC Agreements), entitled to a one-time lump sum payment by the Company in an amount equal to 200% of the sum of (A) the executive officer’s annual base salary in effect as of the date of termination plus (B) the executive officer’s target bonus opportunity under the cash incentive program in effect for the year at issue (the “Severance Benefit”), a pro rata share of the executive officer’s target bonus for the year in which termination occurs, and the reimbursement by the Company of health insurance continuation expenses incurred by the executive officer, in addition to any rights and welfare benefits provided to the executive officer under any plans and programs upon termination of employment. In the event that the executive officer’s employment is terminated as a result of such officer’s voluntary resignation without “good reason” (as defined in the Amended CIC Agreements) within six (6) months after a change in control, the executive officer will be entitled to the same payments described above, except that the one-time lump sum payment will be equal to 100% of the executive officer’s Severance Benefit. Each of the Amended CIC Agreements also provides that, during the employment period and for a period of two (2) years following termination of employment, the executive officer will be bound by covenants not to compete and not to solicit customers or employees; provided, however, that the non-competition provisions of the Amended CIC Agreements will apply only if the executive officer is entitled to the one-time lump sum payment described above; and, provided further, that if the executive officer is entitled to a lump sum payment equal to only 100% of the Severance Benefit, the non-competition provisions of the Amended CIC Agreements will endure for only one (1) year. Pursuant to the restricted stock award agreements (each a “Restricted Stock Award Agreement”) under the 2013 Incentive Plan and the 2023 Incentive Plan (collectively, the “Plans”), if an officer’s Continuous Service (as defined in the Plans) terminates due to death, disability or retirement (as defined in the Restricted Stock Award Agreement), 100% of the unvested restricted stock shall vest as of the date of such termination. If the Continuous Service terminates for any reason other than death, disability or retirement, any unvested restricted stock shall be automatically forfeited upon such termination. Pursuant to the Plans, in the event of a Change in Control (as defined in the Plans) the Restricted Period (as defined in the Plans) shall expire immediately with respect to 100% of the shares of restricted stock, subject to the discretion of the Compensation Committee. Pursuant to the nonqualified stock option agreements (each an “Option Agreement”) under the Plans, in the case of termination due to disability, any unvested portion of the option shall become fully vested on the date of termination and the officer (or, in certain circumstances, his personal representative) may exercise the vested option at any time prior to the Expiration Date (as defined in the Option Agreement). In the case of termination due to death, any unvested portion of the option shall become fully vested on the date of death, and the vested option may be exercised by the officer’s estate, by a person who acquired the right to exercise the option by bequest or inheritance, or by a person designated pursuant to the Option Agreement at any time prior to the Expiration Date. In the case of termination due to retirement (as defined in the Option Agreement), any unvested portion of the option shall become fully vested on the date of retirement and the officer may exercise the vested option at any time prior to the Expiration Date. In the case of termination other than for disability, death or retirement, the officer may exercise the vested portion of the option, but only within such period of time ending on the earlier of (a) the date three (3) months following the termination of the officer’s continuous service or (b) the Expiration Date; provided, however, that in the case of termination for Cause (as defined in the Plans), the option (whether vested or unvested) shall immediately terminate and cease to be exercisable. In the case of a Change in Control, the option shall become immediately vested and exercisable with respect to 100% of the shares subject to the option, subject to the discretion of the Compensation Committee.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (1)(2)(3) | Average Summary Compensation Table Total for Non-PEO NEOs (1) | Average Compensation Actually Paid to Non-PEO NEOs (1)(2)(3) | Value of Initial Fixed $100 Investment Based on TSR (4) | Net Income (in thousands) | | 2024 | $644,151 | $681,468 | $401,374 | $419,440 | $126.10 | $8,170 | | 2023 | 724,672 | 745,430 | 442,015 | 451,384 | 101.29 | 8,485 | | 2022 | 738,697 | 715,596 | 437,022 | 426,944 | 83.33 | 6,864 |
PAY VERSUS PERFORMANCE
| (1) The PEO for 2024, 2023 and 2022 was James F. House. The non-PEO NEOs for 2024, 2023 and 2022 were Thomas S. Elley (Senior Executive Vice President, Chief Financial Officer, Principal Accounting Officer, Treasurer and Assistant Secretary) and William C. Mitchell (Senior Executive Vice President, Consumer Lending of the Bank). |
PAY VERSUS PERFORMANCE
| (2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. |
PAY VERSUS PERFORMANCE
| (3) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. To calculate the amounts of Compensation Actually Paid to the PEO in 2024, the following adjustments were made to the PEO’s Summary Compensation Table Total: |
PAY VERSUS PERFORMANCE
| a. | We deducted $85,362 reported in the Summary Compensation Table, reflecting the grant date fair value of 8,200 shares of restricted stock granted to the PEO in fiscal year 2024; |
PAY VERSUS PERFORMANCE
| b. | We added $103,238, reflecting the fair value of such shares of restricted stock as of the end of fiscal year 2024; |
PAY VERSUS PERFORMANCE
| c. | We added $18,876, reflecting the change in the fair value during fiscal year 2024 of 8,279 shares of restricted stock granted to the PEO before fiscal year 2024 that were outstanding and unvested as of the end of fiscal year 2024; and |
PAY VERSUS PERFORMANCE
| d. | We added $565, reflecting, as of the applicable vesting date, the change in the fair value during fiscal year 2024 of 6,711 shares of restricted stock granted to the PEO before fiscal year 2024 that vested during fiscal year 2024. |
PAY VERSUS PERFORMANCE
To calculate the amounts of Compensation Actually Paid, on average, to our non-PEO NEOs in 2024, the following adjustments were made to the Average Summary Compensation Table Total for Non-PEO NEOs:
PAY VERSUS PERFORMANCE
| a. | We deducted $42,681 reported in the Summary Compensation Table, reflecting the average grant date fair value of restricted stock granted to the non-PEO NEOs in fiscal year 2024; |
PAY VERSUS PERFORMANCE
| b. | We added $51,619, reflecting the average fair value of such restricted stock as of the end of fiscal year 2024; |
PAY VERSUS PERFORMANCE
| c. | We added $8,856, reflecting the average change in the fair value during fiscal year 2024 of restricted stock granted to the non-PEO NEOs before fiscal year 2024 that were outstanding and unvested as of the end of fiscal year 2024; and |
PAY VERSUS PERFORMANCE
| d. | We added $272, reflecting, as of the applicable vesting date, the average change in the fair value during fiscal year 2024 of restricted stock granted to the non-PEO NEOs before fiscal year 2024 that vested during fiscal year 2024. |
PAY VERSUS PERFORMANCE
| (4) The values disclosed in this TSR column represent the measurement period value of an investment of $100 in our common stock as of December 31, 2021, and then valued again on each of December 31, 2022, December 31, 2023 and December 31, 2024. Historical stock performance is not necessarily indicative of future stock performance. |
PAY VERSUS PERFORMANCE
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and the Company’s cumulative TSR over the three most recently completed fiscal years. Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Comp e nsation Actually Paid to our other NEOs, and our Net Income during the three most recently completed fiscal years .
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION In establishing director compensation, the Company considers the significant amount of time that directors expend in fulfilling their duties to the Company and the skill level required by the Company of members of the Board, as well as the importance of attracting and retaining qualified candidates to serve on the Board.
Director Retirement Agreements
Director Retirement Agreements In order to encourage the members of the Board to continue to serve as directors of the Company, we entered into director retirement agreements with each of our non-employee directors who joined the Board prior to 2013. The director retirement agreements are nonqualified deferred compensation arrangements that are designed to motivate the directors to serve on the Board until their retirement. We initially entered into the director retirement agreements in 2002 with each member of the Board at that time, including current directors Meigs and Wilson. In their original form, these agreements promised each director a benefit to be paid annually for ten years, generally beginning on the later of the date on which the director reached age 70 or the date on which the director terminated service as a director. The amount of the benefit was initially set at $12,000 in September 2002 and was scheduled to increase by 3% each year until the director reached age 70 or his or her service as a director was terminated. The benefit was to be reduced if the director retired from the Board before age 70 or terminated service as a director due to a disability before age 70. The director retirement agreements provide a change in control benefit. We believe that the interests of the Company’s shareholders will be best served if the interests of our directors are aligned with the shareholders’ interests. Therefore, the director retirement agreements provide that, if a director is terminated following a change in control of the Company or a change in control of the Bank, we will pay the director annually for ten years, beginning at age 70, an amount equal to the maximum benefit that he or she would have been entitled to receive had the director terminated service as a director at age 70. The director retirement agreements are subject to Internal Revenue Code Section 409A. On November 20, 2008, the Company and the Bank entered into amendments to the director retirement agreements for each director at the time, the purpose of which was to ensure that the terms of the director retirement agreements comply with Internal Revenue Code Section 409A so that the directors would avoid potential negative tax consequences. The amendments to the director retirement agreements did not materially change the scope or amount of benefits to which the directors are entitled but may affect the time and form of payment of such benefits. The director retirement agreement entered into by the director joining the Board subsequent to the November 2008 amendments but prior to 2013 (current director McPhearson) complies with Section 409A. On January 25, 2017, the agreements with current directors Meigs and Wilson were again amended to reflect the increase in the mandatory retirement age for non-employee directors from age 70 to age 75. Specifically, the 2017 amendment clarified that the annual increases in the amount of the annual benefit payable pursuant to the agreement will terminate at the end of the plan year (commencing on September 1 and ending on August 31) immediately preceding the date of the first meeting of shareholders of the Company at which directors are elected, following the date on which the director reaches the mandatory retirement age set forth in the Company’s Bylaws. No amendment was required to the agreement with current director McPhearson to reflect this clarification.
2024 Director Compensation Table
2024 Director Compensation Table The following table provides information regarding compensation earned by or paid to the Company’s non-employee directors in 2024.
2024 Director Compensation Table
| Name (1) | Fees Earned or Paid in Cash (2) | Stock Awards (3) | Option Awards (4) | Nonqualified Deferred Compensation (5) | All Other Compensation (6) | Total | | Robert Stephen Briggs | $44,182 | $21,861 | — | — | $355 | $66,398 | | Sheri S. Cook (7) | 9,668 | 15,615 | — | — | — | 25,283 | | Robert C. Field (8) | 12,159 | — | — | — | — | 12,159 | | John C. Gordon (9) | 29,004 | 6,767 | — | $14,030 | 619 | 50,420 | | David P. Hale | 37,105 | 15,615 | — | — | 3,055 | 55,775 | | Marlene M. McCain | 36,682 | 15,615 | — | — | 1,990 | 54,287 | | J. Lee McPhearson | 38,795 | 6,767 | — | 4,239 | 2,450 | 52,251 | | Jack W. Meigs | 24,125 | 6,767 | — | 13,905 | 781 | 45,578 | | Aubrey S. Miller | 32,101 | 15,615 | — | — | 201 | 47,917 | | Staci M. Pierce (10) | 2,000 | — | — | — | — | 2,000 | | Donna D. Smith (11) | 9,668 | 15,615 | — | — | — | 25,283 | | Tracy E. Thompson (12) | 2,417 | — | — | — | — | 2,417 | | Bruce N. Wilson | 32,660 | 6,767 | — | 10,374 | 2,077 | 51,878 |
2024 Director Compensation Table
| (1) Although Mr. House serves on the Board in addition to his service as President and Chief Executive Officer of the Company and the Bank, he currently receives no additional fees for his service on the Board; therefore, no additional information with respect to Mr. House is presented in this table. |
2024 Director Compensation Table
| (2) As described above, certain of our non-employee directors deferred all or a portion of their director fees pursuant to the Deferral Plan in 2024. The amounts in this column include the equalization stipend described above with respect to each director. |
2024 Director Compensation Table
| (3) The amounts presented in this column represent the fair value of the shares of restricted common stock granted to the directors on the date of grant in accordance with ASC Topic 718. As of December 31, 2024, the aggregate number of outstanding, unvested shares of restricted stock held by each director was as follows: for Mr. Briggs, 2,100 shares; for Mr. Gordon, 650 shares; for Dr. Hale, 1,500 shares; for Ms. McCain, 1,500 shares; for Mr. McPhearson, 650 shares; for Mr. Meigs, 650 shares; for Mr. Miller, 1,500 shares; and for Mr. Wilson, 650 shares. Mr. Gordon’s unvested shares of restricted stock vested upon his resignation from the Board effective January 31, 2025 in accordance with the terms of the 2023 Incentive Plan. |
2024 Director Compensation Table
| (4) As of December 31, 2024, the aggregate number of outstanding, unexercised options for each director was as follows: for Mr. Briggs, 6,000 options; for Mr. Gordon, 3,000 options; for Mr. McPhearson, 3,000 options; for Mr. Meigs, 3,000 options; for Mr. Miller, 4,500 options; and for Mr. Wilson, 3,000 options. No new options were granted to any of our non-employee directors during 2024. |
2024 Director Compensation Table
| (5) This column represents the change in the present value of a director’s accumulated benefit under his or her director retirement agreement in 2024. The change in present value of certain agreements was impacted by reductions in discount rate assumptions used in the calculation of present value. |
2024 Director Compensation Table
| (6) This column reflects reimbursements for mileage and related expenses paid to certain non-employee directors who traveled outside their county of residence to attend any Board or committee meeting and are reimbursed for mileage. |
2024 Director Compensation Table
| (7) Ms. Cook resigned from the Board effective April 26, 2024. Her unvested shares of restricted stock were forfeited upon resignation. |
2024 Director Compensation Table
| (8) Mr. Field was elected to the Board effective July 24, 2024 |
2024 Director Compensation Table
| (9) Mr. Gordon retired effective January 31, 2025. His unvested shares of restricted stock vested upon his resignation. |
2024 Director Compensation Table
| (10) Ms. Pierce was elected to the Board effective November 20, 2024. |
2024 Director Compensation Table
| (11) Ms. Smith did not stand for re-election to the Board at the 2024 Annual Meeting of Stockholders. Her unvested shares of restricted stock automatically vested upon her retirement. |
2024 Director Compensation Table
| (12) Mr. Thompson was elected to the Board effective November 20, 2024. |