Charles Maddy
About Charles Maddy
H. Charles “Chuck” Maddy III, age 62, serves as President and Director of Burke & Herbert Financial Services Corp. (BHRB) and was first elected to the BHRB board in 2024 following the Summit merger; he has been a bank director since 1993 at Summit Financial Group prior to joining BHRB’s board . In 2024, BHRB’s post-merger incentive plan (MIP) paid out at the maximum 150% for EPS and 139.17% for merger cost savings (MCS >$27M vs $20M target), and his PRSU award for 2024 banked at 150% of target, evidencing strong execution on cost take-out and earnings delivery in year one of the merger integration . He has been recognized for leadership in banking with industry roles and awards (including Outstanding CPA in Business and Industry Award and AICPA Business & Industry Hall of Fame Award) and extensive service in trade associations and risk/finance committees (e.g., FHLB Pittsburgh) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Summit Financial Group, Inc. | Director | 1993–2024 (pre-merger service credited) | Long-tenured director through multiple cycles; governance and strategy oversight for a growing community banking platform that later merged into BHRB . |
| Burke & Herbert Financial Services Corp. | President | 2024–Present | Executive leadership during initial year of BHRB/Summit merger integration, delivering EPS max payout and 139.17% MCS payout under MIP . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| West Virginia Bankers’ Association | Director; past President; Chair of Audit Committee; member of Legislative/Gov’t Relations, Pension & Benefits, BankPAC Committees | Not disclosed | Policy, audit and industry leadership shaping state banking practices . |
| Federal Home Loan Bank of Pittsburgh | Director; past Chair of Audit Committee; served on Finance and Operational Risk Committees | Not disclosed | Risk, finance and oversight expertise for a key liquidity provider to banks . |
| American Bankers Association | Member; served on Federal Home Loan Bank Open Committee | Not disclosed | Engagement on national banking system issues . |
| Community/Non-profit boards (Hardy County Child Care Center; Valley View Golf Association; Hardy County Community Foundation) | Director/Founder/Director | Not disclosed | Community development and philanthropic governance . |
Fixed Compensation
| Component (USD) | 2024 |
|---|---|
| Base Salary (set rate) | $650,000 (Mr. Maddy started in May 2024; salary actually paid $634,250) . |
| Bonus | $1,320,750 one-time special merger bonus paid by the Bank per Employment Agreement . |
| All Other Compensation (detail below) | $15,782 . |
| All Other Compensation detail | Life insurance premiums $396; split-dollar life insurance benefit $1,586; 401(k) match $13,800 . |
Performance Compensation
| Metric | Plan weighting | Target | Actual 2024 | Payout/Banking | Vesting |
|---|---|---|---|---|---|
| Merger Cost Savings (MCS) – Cash | 25% of Total MIP target (0–150% earnout) | $20M target; threshold $10M; max $30M+ | >$27M | 139.17% of MCS cash component | Cash paid Q1’25 (continuous service required) . |
| EPS – Cash (2024 tranche) | 15%–28.125% of Total MIP target (0–150% earnout) | 100% EPS target; threshold 80% | >150% of target | 150% of EPS cash component | Cash paid Q1’25 (continuous service required) . |
| EPS – PRSUs (2024 EPS PRSU) | 18.75%–45% of Total MIP target converted to PRSUs at $51.14 | 100% of target units | 150% of target units | 8,580 PRSUs banked for 2024 (150% of 5,720 target) | Banks based on 2024 EPS; vests in 3 equal installments on 1st/2nd/3rd anniversaries of Closing (5/3/2025, 5/3/2026, 5/3/2027) subject to service . |
| EPS – PRSUs (2025 EPS PRSU) | Same construct; awarded Jan 23, 2025 (5,720 target units) | 2025 EPS target | Not yet disclosed | Bank 0–150% in early 2026 | Vests in 3 equal installments on 2nd/3rd/4th anniversaries of Closing (starting 5/3/2026) subject to service . |
Additional 2024 payouts/grants for Maddy:
- Non-Equity Incentive (MIP cash earned for 2024): $518,655 .
- Stock Awards (grant-date fair value of 2024 PRSUs): $294,008 .
- Compensation Committee applied standard plan formulas; no additional discretionary bonuses or equity awards for 2024 beyond the merger bonus in his agreement .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/14/2025) | 76,501 shares total; includes 19,592 spouse; 16,885 IRA; 2,860 PRSUs vesting 5/3/2025; and 13,039 shares issuable upon conversion of vested SARs based on $58.74 close and adjusted strike prices from legacy Summit awards . |
| Ownership as % of shares outstanding | ~0.51% (76,501 owned / 14,982,807 outstanding) . |
| Unvested PRSUs (2024 banked) | 8,580 banked units for 2024; first third (2,860) vests 5/3/2025; remaining in equal tranches on 5/3/2026 and 5/3/2027, subject to service . |
| 2025 PRSU target | 5,720 target units awarded 1/23/2025; bank at 0–150% based on 2025 EPS; vest on 5/3/2026, 5/3/2027, 5/3/2028 subject to service . |
| SARs (legacy Summit, now BHRB replacement SARs) | Fully vested; would deliver 13,039 shares at $58.74 close vs strike prices $23.82 (2015), $51.58 (2017), $47.47 (2019), $43.33 (2021), $52.29 (2023) as adjusted for exchange ratio . |
| Pledging / hedging | No pledges disclosed for Mr. Maddy; company prohibits hedging/derivative transactions by insiders . |
| Ownership guidelines | President must hold $500,000 aggregate book value of shares within 3 years from Summit merger; director guideline $300,000 (company board) and $100,000 (bank board) over same timeframe . |
Vesting schedule (2024 PRSUs banked)
- 2,860 units on 5/3/2025; 2,860 units on 5/3/2026; 2,860 units on 5/3/2027 (service requirement; acceleration upon certain qualifying events) .
Employment Terms
| Term | Key provisions |
|---|---|
| Position/term | President of Company and Bank; 3-year term with 1-year auto-renewals unless non-renewed 90 days prior or terminated earlier . |
| Base salary | $650,000; eligible for annual incentive/bonus and equity/equity-based plans . |
| Special payments | One-time merger bonus $1,320,750 (paid at closing); additional $440,250 payable after any separation from service (subject to 409A timing) . |
| Severance (no CIC) | If terminated without “Just Cause” or resigns for “Good Reason”: lump sum = 2×(base salary + 55% of base), plus 18 months of healthcare premium equivalents; accrued obligations paid . |
| Severance (within 2 years after CIC) | Lump sum = 3×(base salary + 55% of base), plus 18 months of healthcare premium equivalents; accrued obligations paid . |
| Equity acceleration | Upon Good Reason/without Cause/CIC/death/disability: RSUs accelerate; performance stock vests based on actual performance through termination date . |
| Restrictive covenants | Confidentiality, non-solicitation, non-compete, non-disparagement, post-termination cooperation; 280G “best net” cutback applies . |
| Retirement benefits | Legacy Summit Supplemental SERP: ≥$73,000/year beginning after separation or age 63; Executive Salary Continuation Agreement: $175,000/year for life; both unfunded obligations with associated corporate-owned life insurance structures . |
Board Governance
- Role and independence: President and Director; not independent due to executive status .
- Board service history: BHRB Director since 2024; pre-merger director service counted from 1993 at Summit .
- Committees: Not listed as a member of Audit, Compensation, Nominating & Governance, or ERM committees (all populated by independent directors) .
- Attendance: The board reported no director attending fewer than 75% of board/committee meetings in 2024 .
- Board leadership: BHRB combines CEO and Chair roles (held by David P. Boyle) with two independent Vice Chairs providing counterbalance and leading executive sessions; committee composition is independent .
- Director pay: Mr. Maddy receives no additional compensation for board service (executive) .
Director Compensation (context)
- Non-employee directors receive cash retainers, meeting fees, and annual RSUs (1,000 units in 2024), but executives (Boyle, Maddy) do not receive director compensation .
Risk Indicators & Red Flags
- Hedging/pledging: Hedging prohibited; no pledges disclosed for Maddy (pledges disclosed for other directors) .
- Related-party transactions: None disclosed for Maddy; company reports two related-party items involving others and routine insider loans on market terms .
- Section 16 compliance: Maddy not listed among individuals with late Section 16 filings in 2024 .
Compensation Structure Analysis
- Heavy merger-linked at-risk pay: Significant portion of 2024–2025 compensation tied to EPS and cost-synergy delivery under the MIP; 2024 results yielded top-end payouts (EPS 150%, MCS 139.17%), aligning realized pay with integration performance .
- Shift to full-value awards: Company currently grants RSUs/PRSUs and states it does not grant option awards to executives; Maddy’s option-like exposure is via legacy Summit SARs converted at merger .
- Guaranteed/one-time elements: Material sign-on/merger bonus ($1.32M) and fixed post-separation $440,250 payment increase certainty of cash compensation .
- Severance/CIC economics: 2× (no CIC) and 3× (CIC) salary+target bonus multiples with equity acceleration; shareholder-friendly 280G “best-net” cutback applies .
Equity Ownership Detail (as of dates cited)
| Metric | Amount | Source/Notes |
|---|---|---|
| Shares outstanding (3/14/2025) | 14,982,807 | For % ownership denominator . |
| Maddy beneficial shares (3/14/2025) | 76,501 | Includes spouse, IRA, PRSUs (2,860 vesting 5/3/2025), and SAR-convertible shares counted separately below . |
| Ownership % | ~0.51% | 76,501 / 14,982,807 (calculated from cited figures) . |
| SARs conversion potential | 13,039 shares | Based on $58.74 stock price and stated strike prices (fully vested) . |
| Unvested PRSUs (banked 2024) | 8,580 | 150% of target banked; scheduled vesting over 2025–2027 . |
Employment & Contract Economics (high-level)
| Item | Terms |
|---|---|
| Target bonus percentage (for severance math) | 55% of base salary . |
| Severance (no CIC) | 2×(base + 55% base) + 18 months healthcare . |
| Severance (CIC, 2-year window) | 3×(base + 55% base) + 18 months healthcare; RSUs accel; PSUs vest at actual . |
| Post-separation payment | $440,250 payable after any separation (409A timing) . |
Investment Implications
- Alignment and retention: Large equity exposure (banked PRSUs and fully vested SARs) plus strict anti-hedging policy suggest alignment; severance/CIC protections and multi-year PRSU vesting reduce near-term retention risk but increase potential cash outlays under change-of-control .
- Near-term selling pressure: 2,860 PRSUs vest on 5/3/2025 (first tranche), with additional tranches in 2026–2027; potential liquidity events around vesting dates should be monitored alongside any Form 4 activity .
- Execution signals: Top-end payouts on 2024 EPS and strong delivery on MCS (> $27M) indicate robust integration performance; continued 2025 EPS/PRSU banking outcomes will signal sustainability of cost and earnings trajectory .
- Governance balance: While CEO/Chair roles are combined (not Maddy), the presence of two Vice Chairs and fully independent key committees provides counterweights; Maddy’s director status is non-independent due to his executive role, but he is not on board committees .
- Cash mix watch-outs: One-time merger bonus and guaranteed post-separation payment elevate fixed/guaranteed cash, but overall incentive mix remains performance-skewed via MIP cash and PRSUs .
Note: All data above is sourced from BHRB’s 2025 definitive proxy statement (DEF 14A) filed March 31, 2025; specific citations are embedded throughout. –