Kevin McPhaill
About Kevin McPhaill
Kevin J. McPhaill (age 52) is President, CEO, and Director of Sierra Bancorp (since Apr 1, 2015), employed by Bank of the Sierra since 2001; education includes BA (Fresno Pacific), MBA (Fresno State), and the Southwestern Graduate School of Banking (SMU) . Under his tenure, 2024 ROAA was 1.12% (vs. 0.94% in 2023), net income was $40.6m, and the pay-versus-performance TSR index rose to 121.25 (from 90.98 in 2023), indicating improved earnings and shareholder return momentum in 2024 . The Board maintains an independent Chair; McPhaill serves on the Risk, Credit, and Finance & Sustainability committees (not Audit/Comp/N&G), reflecting governance separation of CEO from key independent committees .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bank of the Sierra / Sierra Bancorp | President & CEO | 2015–present | Led 2024 earnings/ROAA improvement; oversaw balance sheet actions noted in 2024 performance discussion . |
| Bank of the Sierra / Sierra Bancorp | President & COO | 2014–2015 | Transition to top leadership, operational oversight . |
| Bank of the Sierra / Sierra Bancorp | EVP & Chief Banking Officer | 2006–2014 | Lending/operations leadership during growth years . |
| Bank of the Sierra | Regional Manager (Hanford area) | 2001–2006 | Market leadership and production management . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Tulare County Economic Development Corporation | Director | n/a | Regional economic development connectivity . |
| Community financial education outreach | Participant | ongoing | Community and talent pipeline engagement . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 603,750 | 633,938 | 665,635 |
| Director Fees Included in “All Other” ($) | 41,900 | 61,250 | 60,500 |
| Perquisites (car imputed value, etc.) ($) | 12,242 car; other perqs within “All Other” | 29,521 car; other perqs within “All Other” | 30,476 car; other perqs within “All Other” |
Notes:
- The company maintains a safe-harbor 401(k) match from 2024; CEO match in “All Other Compensation” ($16,245 in 2022; $15,840 in 2023; $13,800 in 2024) .
Performance Compensation
| Metric | Weighting | 2024 Target | 2024 Actual | Payout Impact | Vesting/Timing |
|---|---|---|---|---|---|
| Annual cash incentive – Company Net Income | 80% | $36.6m target; $18.3m minimum | 110.96% of target achieved | +5.48% over target component (50% of excess) | Paid Mar 2025 post-audit |
| Annual cash incentive – Individual/Discretionary | 20% | Committee judgment | Fully met for all NEOs | Full credit on 20% tranche | Paid Mar 2025 |
| 2022 RSU grant (CEO $250k; 50% time-based/50% PSU) | n/a | ROE vs peer (3-yr); 50th pct = 100% vest; 30th=0%; 75th=150% | Performance over 2022–2024 period | Drives PSU vesting factor | Time-based vests ratably over 3 yrs; PSUs cliff at 3 yrs |
| 2023 RSU grant (CEO $250k; 50% time-based/50% PSU) | n/a | ROAA vs peer (3-yr) with same 0/100/150% framework | Performance over 2023–2025 period | Drives PSU vesting factor | Time-based ratable 3 yrs; PSUs cliff at 3 yrs |
| 2025 RSU grant (new formula) | n/a | Value tied to relative ROAA; CEO grant = 74.4% of base salary for 2024 peer performance ~74th pct | Target for PSU: 3-yr avg ROAA ≥ 1.14% | PSU reduces below target; 0% <50% of target | Time-based ratable over 3 yrs; PSU cliff at 3 yrs |
CEO Bonus Outcomes and Mix:
- 2024 bonus paid $526,584 (reflecting 105.48% of target incentive due to net income beat and full discretionary tranche) .
- 2024 had no equity grant due to the timing shift; equity awards resumed in Feb 2025 under the new formula .
Multi‑Year CEO Compensation Summary
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 603,750 | 633,938 | 665,635 |
| Bonus | 429,266 | 458,337 | 526,584 |
| Stock Awards (grant-date FV) | 249,998 | 249,933 | — |
| Change in Pension Value | 40,561 | 44,219 | 48,165 |
| All Other Compensation | 93,045 | 130,088 | 161,918 |
| Total | 1,416,620 | 1,516,515 | 1,402,302 |
Comp structure observations:
- Greater cash orientation in 2024 (no equity grants in 2024 due to cadence change), then a sizable 2025 grant under a performance-linked formula (CEO 74.4% of base salary; 50% PSU) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/24/2025) | 87,378 common shares (includes 21,040 time-based and 26,736 performance-based RS) . |
| Vested option shares (within 60 days) | 20,000 . |
| Options outstanding | 5,000 @ $28.21 exp. 2/16/2027; 5,000 @ $27.35 exp. 2/15/2028; 5,000 @ $27.30 exp. 2/21/2029; 5,000 @ $27.11 exp. 2/20/2030; all exercisable . |
| Unvested restricted shares (12/31/2024) | 31,770 shares (market value $918,788 at $28.92) . |
| Shares vested in 2024 | 11,596 shares vested on 8/20/2024; 11/16/2024; 11/18/2024; 11/19/2024; value on vest $339,120 . |
| Options exercised in 2024 | 12,849 shares; value realized $174,870 . |
| Hedging/pledging | Hedging and pledging by directors/officers prohibited; also margin accounts prohibited . |
| Ownership guidelines (adopted Feb 2024) | CEO 1.5x base salary; EVP = 1x; Directors = $100k; time to comply by later of Feb 15, 2027 or 3 years; unvested RS count; 1-year post‑vest holding (net of taxes/10b5‑1) . |
Potential selling pressure indicators:
- Multiple vest dates historically cluster in Aug/Nov; 2024 vesting events and realized values indicate windows where liquidity events may occur .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment agreement | Evergreen 1‑year renewals; CEO target bonus up to 75% of base salary . |
| Severance (no change in control) | If terminated by Company not for cause: cash equal to 1x base salary + 12 months of group health/vision/dental and 50% dependent premium reimbursement . |
| Change-in-control economics | Cash equal to 2x annualized base salary + maximum eligible bonus for the year, plus 12 months of group health/vision/dental and 50% dependent premium reimbursement; equity accelerates upon change in control (unvested options and restricted stock vest) . |
| Salary continuation (SERP-like) | $150,000 per year for 15 years commencing after retirement at age 65+; fully accrued by May 2037 (~$1.52m); CoC + resignation/termination within 12 months accelerates vesting and payment; death benefit $1.52m if death pre‑retirement . Present value at 12/31/2024: $442,777 . |
| Clawbacks / tax gross‑ups | No tax gross‑ups; Feb 2024 policy explicitly prohibits gross‑ups in CoC or equity plans . Clawback not specifically disclosed in proxy (skip). |
| Deferred comp (409A) | CEO aggregate balance $291,816; 2024 earnings $41,718; no Company contributions . |
Board Governance and Dual‑Role Implications
- Board structure: Independent Chair; CEO is the sole non‑independent director; all Audit, Compensation, and Nominating & Governance Committee members are independent .
- Committee roles: McPhaill serves on Risk, Credit, and Finance & Sustainability (not on Audit/Comp/N&G), which mitigates independence conflicts on pay and audit .
- Attendance: All directors attended at least 75% of board and committee meetings in 2024; executive sessions of independent directors are regularly held .
- Director compensation: CEO also receives standard director fees ($60,500 in 2024) included in “All Other Compensation”; non‑employee director cash/equity program maintained separately .
Performance & Track Record
| Performance Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($000s) | 33,659 | 34,844 | 40,560 |
| ROAA (%) | 0.97 | 0.94 | 1.12 |
| TSR Index (Start=$100) | 81.64 | 90.98 | 121.25 |
Company fundamentals context (annual):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 30,770,000* | 30,400,000* | 31,521,000* |
| Net Income ($) | 33,659,000* | 34,844,000* | 40,560,000* |
Values retrieved from S&P Global.*
Compensation Structure Analysis (signals)
- Shift in mix: 2024 skewed toward cash (no equity grant due to timing), followed by a larger 2025 equity grant sized by relative ROAA, with 50% PSU for CEO—stronger explicit pay‑for‑performance linkage vs peers .
- Annual bonus rigor: Quantitative net income weighting at 80%, with upside (max +10% overall) capped via 50% share of overage up to 20%; 2024 payout at 105.48% of target suggests disciplined but achievable targets .
- Equity risk calibration: PSU frameworks reference 3‑year peer‑relative ROE/ROAA with 0%–150% vesting; time‑based tranches remain retention‑oriented .
- Shareholder‑friendly terms: No tax gross‑ups; explicit prohibition adopted 2024; hedging/pledging prohibited; 1‑year post‑vest holding period and ownership guidelines enhance alignment .
- Potential red flag: CoC cash benefits are sizable (2x salary + max bonus), with equity acceleration on CoC; ensure clarity around triggers and potential single‑trigger optics from an investor lens .
Compensation Peer Group (for benchmarking)
Peer group comprises 18 publicly‑traded banks primarily in Western states (e.g., Bank of Marin Bancorp; Baycom; Central Pacific Financial; Coastal Financial; Equity Bancshares; F&M Bancorp Lodi; First Western; FS Bancorp; Guaranty Bancshares; Hanmi; Heritage Commerce; Northrim; Preferred Bank; RBB; South Plains; Territorial; Triumph), with assets ~$2.2–$7.6bn; Total Compensation targeted near 50th percentile, adjusted over time for relative performance .
Equity Award Grant/Vesting Schedule Detail (recent)
- 2022 Grants (CEO $250k): 50% time‑based ratable over 3 years; 50% PSU cliff at 3 years based on 3‑yr average ROE vs peers (0/100/150%) .
- 2023 Grants (CEO $250k): 50% time‑based ratable over 3 years; 50% PSU cliff at 3 years based on 3‑yr average ROAA vs peers (0/100/150%) .
- 2025 Grants (CEO 74.4% of base): 50% PSU with target 3‑yr avg ROAA ≥1.14%; time‑based ratable over 3 years .
- 2024 Vesting activity: 11,596 restricted shares vested for CEO on 8/20, 11/16, 11/18, 11/19 (value $339,120) .
Related Party / Risk Indicators
- Related party transactions: Routine director/executive banking relationships on market terms; no adverse features disclosed .
- Section 16 compliance: No late filings disclosed for McPhaill; one late Form 4 for a director in 2024 .
- Insider trading governance: Formal insider trading policy, scheduled blackout periods, and restrictions outlined (10‑K exhibit reference) .
Investment Implications
- Alignment: Ownership guidelines, 1‑year post‑vest holding, and no hedging/pledging strongly support long‑term alignment; 50% PSUs in CEO grants heighten linkage to 3‑year profitability vs peers .
- Retention: Meaningful unvested equity (31,770 shares at YE 2024) and a SERP‑like $150k/yr for 15 years bolster retention; 2025 equity grant further reinforces stickiness .
- Overhang/liquidity: Multiple annual vesting events (Aug/Nov historical cadence) and 2025–2027 award schedules may create predictable windows for insider liquidity; monitor 10b5‑1 plans and Form 4s near vest dates .
- CoC optics: Equity acceleration and 2x salary+max bonus cash benefit at CoC could draw scrutiny; however, independent Chair and fully independent Audit/Comp/N&G mitigate broader governance risks .
- Performance momentum: 2024 ROAA and net income improved; TSR index rebounded to 121.25; the 2025 grant calibration suggests sustained confidence but adds performance risk via PSU hurdle (ROAA ≥1.14% avg) .
Key numbers to monitor: 3‑year ROAA vs peers for PSU vesting; annual net income vs Board target; CEO unvested equity and vesting cadence; Form 4 activity around vest windows. **[1130144_0001558370-25-004576_bsrr-20250521xdef14a.htm:28]** **[1130144_0001558370-25-004576_bsrr-20250521xdef14a.htm:30]** **[1130144_0001558370-25-004576_bsrr-20250521xdef14a.htm:35]** **[1130144_0001558370-25-004576_bsrr-20250521xdef14a.htm:36]**
Appendix: Board Service Snapshot for Kevin McPhaill
- Director since Jan 1, 2015; current term expires 2026; committee memberships: Risk, Credit, Finance & Sustainability .
- Independence: Not independent (as CEO); all other directors except CEO are independent; independent Chair maintained .
- Meeting attendance: ≥75% for all directors in 2024 .
Appendix: CEO Outstanding Equity (12/31/2024)
| Instrument | Detail |
|---|---|
| Options | 20,000 fully exercisable; strikes $27.11–$28.21; expirations 2027–2030 . |
| Unvested RS | 31,770 shares; market value $918,788 at $28.92; full acceleration on CoC . |
| 2024 Activity | 12,849 options exercised ($174,870 value); 11,596 RS vested ($339,120 value) . |
Appendix: CEO Compensation – Pay Versus Performance (select)
- 2024 CEO “Compensation Actually Paid”: $1,769,385; TSR index: 121.25; Net Income: $40.6m; ROAA 1.12% .