Thomas F. Cherry
About Thomas F. Cherry
Thomas F. Cherry, age 56, is President and Chief Executive Officer of C&F Financial Corporation (CFFI) and Citizens and Farmers Bank, serving as CEO since January 1, 2019, President since December 2014, and a director since January 2015; he has worked at C&F for over 28 years and previously served as CFO (2004–2016) and Secretary (2002–2018), with earlier experience at Price Waterhouse LLP . Under Cherry’s leadership, CFFI’s net income and EPS decreased from 2022–2024 alongside lower ROE and ROA, while three-year ROTCE performance ranked at the 73rd percentile within the 2024 peer group; the short-term incentive ROE/ROA composite ranked at the 63rd percentile, aligning payouts to relative performance . CFFI’s cumulative TSR based on a fixed $100 investment from 2019 to 2024 was $152.5, indicating shareholder value creation through the period despite near-term earnings compression .
| Performance Metrics | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($000s) | $29,369 | $23,746 | $19,918 |
| EPS (basic & diluted) ($) | $8.29 | $6.92 | $6.01 |
| ROE (%) | 14.84% | 11.68% | 9.02% |
| ROA (%) | 1.27% | 0.99% | 0.80% |
| Adjusted ROTCE (%) | 15.92% | 13.58% | 10.41% |
| 3-Yr ROTCE Percentile vs 2024 Peer Group | — | — | 73rd (14th/49) |
| ROE/ROA Composite Percentile vs 2024 Peer Group | — | — | 63rd (19th/49) |
| Cumulative TSR (2019–2024, $100 basis) | 117.2 | 141.4 | 152.5 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| C&F Financial Corporation / Citizens and Farmers Bank | President (since Dec 2014); CEO (since Jan 2019); Director (since Jan 2015); CFO (2004–2016); Secretary (2002–2018) | 1997–present (28+ years) | Led diversified segments; established performance-tied comp frameworks; governance separation of Chair/CEO |
| Price Waterhouse LLP | Professional staff (pre-PwC merger) | Prior to C&F | Foundation in financial reporting and audit practices |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Virginia Bankers Association | Served on several committees | Various | Industry advocacy and policy engagement, informing risk and governance |
| Community Organizations | Service roles in communities served by the Bank | Ongoing | Local market connectivity and reputational capital |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $520,000 | $546,000 | $580,000; +6.2% effective Jan 1, 2024 |
| Perquisites/All Other ($) | $171,393 | $177,255 | $186,008; includes defined contribution plan contributions ($141,850) and SERP ($124,600) plus dividends on unvested stock and other perqs |
Notes:
- CEO pay ratio 2024: 21:1 (CEO $1,297,343 vs median $62,835) .
- No stock options granted in recent years; none outstanding .
Performance Compensation
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Short-term Cash Incentive (MIP) | Target 45% of base | ROE/ROA composite 60th percentile (100% of target); Threshold 40th (50%); Max 90th (175–200% with VA rank condition) | 63rd percentile (19th/49); Calculated 106% of target | $200,000 (34% of base); Committee reduced from calculated $277,313 | Cash; paid for 2024 performance |
| Long-term Equity Incentive (Restricted Stock) | Total target 45% of base; 50% annual component, 50% corporate performance | Corporate performance: 60th percentile (100% score); Threshold 40th (50%); Max 80th (150%) | 73rd percentile (14th/49); Corporate performance score 132% | Actual award $270,000 (89% of calculated $303,141); 3,450 shares granted Feb 18, 2025 | Graded vesting over 3 years, one-third annually; earlier vesting at later of age 65 or 1 year post grant for age-65 attainment; accelerated in certain cases; non-forfeitable dividends and voting rights |
Peer and metric design:
- Short-term measures: composite ranking of adjusted ROE (ex-AOCI) and ROA relative to 48-bank 2024 peer group; ROE weighted two-thirds, ROA one-third; adjustments for non-recurring items and peer M&A to normalize comparability .
- Long-term measure: three-year ROTCE (ex-AOCI) vs peer group with adjustments for non-recurring items; 2024 performance period ended Sep 30, 2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 38,377 shares; 1.2% of outstanding as of Feb 14, 2025 |
| Shares Outstanding | 3,232,564 |
| Unvested Restricted Stock (12/31/2024) | 8,851 shares; FMV $630,634 (@$71.25) |
| Upcoming Vesting Schedule | 4,309 on 3/1/2025 ($307,016); 2,976 on 3/1/2026 ($212,040); 1,566 on 3/1/2027 ($111,578) |
| Stock Vested in 2024 | 7,716 shares; value realized $432,704 |
| 2024 Equity Grant Mechanics | 2024 LTIs granted Feb 18, 2025; average price basis $78.78 used to determine share counts; rounded to next multiple of 25 |
| Ownership Guidelines | CEO minimum 3x base salary; until met, must retain at least 50% of vested stock awards; at Jan 2, 2025, all NEOs held amounts exceeding minimum levels |
| Hedging/Pledging | Prohibited for directors and executive officers; short sales, margin accounts, and hedging barred |
| Pledges | Beneficial ownership table notes none of director/executive shares pledged |
Employment Terms
| Key Provision | Terms |
|---|---|
| Employment Agreement (2021) | Auto-renewing one-year term; eligibility for equity and cash incentives; participation in benefit plans; clawback compliance |
| Termination – Without Cause or Good Reason | Lump-sum equal to 1x base salary (immediately prior to termination) plus employer-paid portion of COBRA for 12 months, subject to release and covenants (confidentiality, non-disparagement, 12-month non-piracy/non-solicit) |
| Change in Control Agreement (CIC) | If terminated without cause or for good reason within 2 years after CIC: lump-sum 2.99x highest base salary in prior 24 months + 2.99x highest annual bonus in prior 3 years; continued group health benefits for 3 years; best-net after tax (no 280G gross-up) |
| Special Termination in Anticipation of CIC | If involuntarily terminated pre-CIC at third-party request or in anticipation, special payment: 2x highest base + 3x highest bonus, in addition to employment agreement benefits, subject to covenants |
| Potential Payments (Illustrative, 12/31/2024) | After CIC: Severance $2,616,250; accelerated restricted $630,634; welfare benefits $76,649; total $3,323,533 |
| Clawback | Dodd-Frank Policy and Supplemental Policy; restatement-based clawback of excess incentive comp; up to 100% recoverable for intentional misconduct; no restatements requiring recovery to date |
Board Governance
- Board service: Class III Director since 2015; executive officer (not independent) .
- Committees: Not a member of Audit, Compensation, or Nominating Committees; those committees are composed solely of independent directors .
- Leadership: CEO and Chair roles separated since 2019; Executive Chairman Larry Dillon; Lead Independent Director C. Elis Olsson presides over executive sessions and chairs Nominating .
- Attendance: 14 Board meetings in 2024; all directors attended ≥75%; independent directors held two executive sessions in 2024 .
- Director compensation: Cherry receives no additional pay for Board service; executive compensation shown separately .
Compensation Committee and Peer Benchmarking
- Independent consultant: Pearl Meyer engaged for executive and director reviews; Committee assessed consultant independence .
- Market positioning (2023 Review): CEO total cash ~50th percentile; target total direct compensation ~54th percentile vs 26-bank benchmarking group; base salaries targeted at peer median .
- 2024 Incentive Compensation Peer Group: 48 publicly-traded banks with assets $1.2–$5.0B; CFFI adjusted ROE/ROA composite at 63rd percentile; 3-year ROTCE at 73rd percentile .
Compensation & Ownership Detail Tables
Summary Compensation (CEO)
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $520,000 | $546,000 | $580,000 |
| Bonus | — | — | — |
| Stock Awards (grant-date fair value) | $202,240 | $249,275 | $248,771 |
| Non-Equity Incentive (Cash) | $213,652 | $250,000 | $200,000 |
| Change in Pension Value | $52,773 | $70,381 | $82,564 |
| All Other Compensation | $171,393 | $177,255 | $186,008 |
| Total | $1,160,058 | $1,292,911 | $1,297,343 |
Pension and Nonqualified Plans
| Plan | Status/Balance |
|---|---|
| Retirement Plan (Cash Balance Pension) Present Value | $860,418 (28 years credited service) |
| Nonqualified Deferred Compensation Balance | $1,873,426; 2024 SERP contribution $124,600; 2024 earnings $117,359; Cherry’s SERP contributions vest immediately |
Outstanding and Vested Equity (12/31/2024)
| Unvested Restricted Stock (by vest date) | Shares | FMV ($) |
|---|---|---|
| 3/1/2025 | 4,309 | $307,016 |
| 3/1/2026 | 2,976 | $212,040 |
| 3/1/2027 | 1,566 | $111,578 |
| Total | 8,851 | $630,634 |
| Stock Vested in 2024 | 7,716 | $432,704 |
Say-on-Pay & Shareholder Feedback
- Advisory say-on-pay approval: ~96% at 2024 Annual Meeting (vs 98% in 2023), indicating strong shareholder support .
- Next advisory say-on-pay expected at 2026 Annual Meeting .
Risk Indicators & Policies
- Hedging/pledging prohibited for executives and directors; insider trading policy filed with Form 10-K .
- No Section 280G tax gross-ups; CIC payments on best-net after-tax basis .
- Related-party transactions policy overseen by Audit Committee; loans to insiders made at market terms; no unfavorable features per Board/management .
Board Service History and Dual-Role Implications
- Cherry’s dual role (CEO + Director) is mitigated by: separation of Chair/CEO since 2019, Lead Independent Director, and independent-only standing committees with regular executive sessions .
- Committee memberships: Cherry is not on Audit, Compensation, or Nominating, supporting governance independence .
Investment Implications
- Pay-for-performance alignment: Incentives tied to relative adjusted ROE/ROA and 3-year ROTCE; 2024 payouts reduced by Committee discretion and Cherry’s recommendation, signaling restraint amidst softer earnings and peer-relative performance at ~63rd/73rd percentiles .
- Retention risk: Strong deferred and pension balances (Nonqualified plan $1.87M; pension PV $0.86M) and multi-year equity vesting with immediate SERP vesting for Cherry support retention; CIC protection (2.99x salary/bonus) reduces exit risk but increases potential transaction costs in change-of-control scenarios .
- Trading signals: Significant upcoming vest tranches (4,309 in Mar-2025; 2,976 in Mar-2026; 1,566 in Mar-2027) may create supply near vesting events; executive ownership guidelines have been met, reducing mandated post-vest retention, though hedging/pledging prohibitions limit adverse alignment risks .
- Governance quality: Separation of Chair/CEO, lead independent director, independent committees, clawback policies, no tax gross-ups, and robust insider trading/pledging prohibitions are positive governance indicators supportive of long-term alignment .