Larry G. Dillon
About Larry G. Dillon
Executive Chairman of C&F Financial Corporation and Citizens and Farmers Bank; director since 1989; age 72 in 2025. Previously served as CEO (1989–2018) and President (1989–2014); earlier roles included Chief Operating Officer and Commercial Lending Officer. Company performance context: 2024 net income $19.9 million, EPS $6.01, ROE 9.02%, ROA 0.80; cumulative total shareholder return grew to $152.5 (indexed to $100 at 12/31/2019). The Board separated CEO and Chair roles in 2019 and maintains a lead independent director to mitigate dual-role governance concerns, with Dillon as non-independent Executive Chairman.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| C&F Financial Corporation | Chief Executive Officer | 1989–2018 | Led growth and multi-segment execution across community banking, mortgage, and consumer finance; continuity of leadership through cycles. |
| C&F Financial Corporation | President | 1989–2014 | Oversight of operations and strategy across segments. |
| C&F Financial Corporation | Chief Operating Officer; Commercial Lending Officer | — | Built operational and lending foundations preceding CEO tenure. |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Virginia Bankers Association | President; committee service | — | Industry leadership and policy engagement relevant to community banking. |
| State Corporation Commission, Bureau of Financial Institutions | Prior employment | — | Regulatory grounding; insights into bank supervision and compliance. |
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary ($) | 250,000 | 250,000 | Established based on governance and strategy contributions. |
| Perquisites | Included (club dues, auto, executive physical) | Included (auto, club dues, executive physical) | Dillon also eligible for post-retirement medical, prescription, dental benefits for himself and spouse for life. |
| Defined Contribution + SERP ($) | 40,000 (included in “All Other”) | 40,000 (matching + discretionary SERP) | SERP contributions for Dillon vest immediately. |
| Pension—Change in Present Value ($) | 41,117 | 37,150 | Cash balance pension plan participant. |
| All Other Compensation ($) | 58,636 | — | 2024 includes nonforfeitable dividends on unvested restricted stock and perquisites. |
Performance Compensation
| Incentive Type | Metric | Target | Actual 2023 | Actual 2024 | Vesting |
|---|---|---|---|---|---|
| Short-Term Cash Incentive ($) | Individual contributions to corporate governance and strategy | Up to 20% of base salary | 50,000 (20% of base) | 40,000 | Cash; paid annually. |
| Long-Term Equity—Restricted Stock (value) | Individual governance/strategy | Up to 20% of base salary | 50,000; 925 shares (granted 2/20/2024; average price basis) | ~50,000 grant date fair value | One-year cliff vest due to age ≥65 |
Equity Ownership & Alignment
| Metric | As of | Amount | Notes |
|---|---|---|---|
| Total Beneficial Ownership (shares) | Feb 14, 2025 | 34,439 | Includes 925 unvested restricted shares. |
| Ownership (% of shares outstanding) | Feb 14, 2025 | 1.1% | Shares outstanding 3,232,564 at record date. |
| Unvested Restricted Shares (count) | Feb 14, 2025 | 925 | Under 2022 Stock & Incentive Plan. |
| Options (exercisable/unexercisable) | Dec 31, 2023 | None | Company does not grant options to NEOs in recent years. |
| Shares Pledged | Feb 14, 2025 | None | Insider Trading Policy prohibits pledging and hedging. |
| Executive Stock Ownership Guideline | Jan 2, 2025 | 1x base salary | Dillon meets/exceeds guideline; 50% retention of vested shares until threshold met. |
Vesting schedule and amounts (2023 grants outstanding as of 12/31/2023):
| Vest Date | Unvested Shares | Market Value ($) |
|---|---|---|
| Feb 1, 2024 | 1,250 | 85,237 |
| Feb 15, 2024 | 850 | 57,962 |
Insider trading and pledging policies:
- Prohibits short sales, margin accounts, hedging, and pledging of Company stock.
- Note: Dillon reported one Form 4 transaction late on Feb 20, 2024 (should have been filed by Feb 19, 2024).
Employment Terms
| Scenario (as of Dec 31, 2023) | Severance ($) | Accelerated Restricted Stock ($) | Welfare Benefits ($) | Total ($) |
|---|---|---|---|---|
| After Change in Control | 750,000 | 143,199 | 326,929 (vision and related coverage) | 1,220,128 |
| In Anticipation of Change in Control | 750,000 | 143,199 | 326,929 | 1,220,128 |
| By Corporation Without Cause | — | 143,199 | — | 143,199 |
| Retirement | — | 85,238 | 326,600 | 411,838 |
Key contractual economics and covenants:
- CIC multiple: 2.5x sum of highest base salary in prior 24 months and highest annual bonus in prior 3 years; non-disclosure and non-competition covenants; “best net after-tax” cutback (no 280G gross-ups).
- Additional agreement: lifetime post-retirement medical, prescription, dental benefits for Dillon and spouse.
- Clawback policies adopted under Dodd-Frank and supplemental policy; up to 100% recovery for intentional misconduct leading to restatement; recovery mechanisms include recoupment, forfeiture, and offset.
Board Governance
- Role: Executive Chairman; non-independent management director; not a member of Audit, Compensation, or Nominating Committees.
- Board structure: CEO/Chair separated since 2019; lead independent director (Olsson) presides over executive sessions and serves as primary liaison.
- Independence: 10 of 12 directors independent under NASDAQ standards.
- Board meeting attendance: 14 meetings in 2024; each director attended ≥75% of Board and committee meetings.
- Director compensation: Dillon receives no additional director fees; compensated as an executive (see Fixed Compensation).
Director Compensation (Board context)
- 2024 non-employee directors: annual retainer $13,650; committee chair retainers $7,500 (Audit), $6,050 (Compensation), $4,400 (Nominating); meeting fees $1,300 (Board/Nominating) and $625 (Audit/Compensation); April 16, 2024 grant of 600 restricted shares at $34.62 per share, vesting April 15, 2025. Dillon excluded as an executive.
Performance & Track Record
- Company pay-versus-performance: cumulative TSR reached 152.5 by year-end 2024 (vs peer groups 113.9 and 114.0); net income $19.9m (2024), $23.7m (2023), $29.4m (2022); ROE/ROA trended from 14.84%/1.27% (2022) to 9.02%/0.80% (2024).
- Incentive program ties short-term awards to composite ROE/ROA ranking vs a regional peer group and long-term restricted stock to three-year ROTCE vs peers; Dillon’s awards are individually assessed based on governance/strategy involvement.
Compensation Committee & Peer Group
- Independent compensation consultant: Pearl Meyer engaged for 2023 review and peer group composition; total direct compensation generally competitive.
- Incentive peer group: 48 banks in 2024 (assets $1.2–$5.0bn; median $2.2bn) and 53 banks in 2023 (median $2.3bn).
- Say-on-pay approvals: ~96% (2024) and ~98% (2023).
Related Party Transactions
- Ordinary course credit extensions to officers/directors and associates: $2.1 million total maximum at 12/31/2024 (0.9% of year-end capital); terms consistent with non-related parties; no unfavorable features per Board/management.
Investment Implications
- Alignment: Dillon holds ~1.1% of shares outstanding with unpledged stock and is subject to ownership guidelines and retention requirements; hedging/pledging prohibited—strong alignment and low leverage risk.
- Incentive mix: Executive Chairman’s pay is modest and governance-focused—STI capped at 20% of salary and LTI at ~20% of salary; LTI vests on a one-year cliff due to age, offering limited long-duration retention but minimizing underwater option risk.
- Change-in-control economics: 2.5x base+bonus and benefit continuation present moderate parachute risk; “best net after-tax” cutback reduces excise exposure; lifetime post-retirement medical benefits are a long-term obligation.
- Trading signals: No options outstanding and restricted stock vesting schedules suggest limited near-term selling pressure; note one late Form 4 in 2024 (process risk, not necessarily economic).
- Governance: Separation of CEO/Chair and lead independent director mitigate independence concerns of an Executive Chairman; strong say-on-pay support and robust clawback policy reduce compensation-related governance risk.