Brandon C. Lorey
About Brandon C. Lorey
Brandon C. Lorey is President and Chief Executive Officer of Eagle Financial Services, Inc. (Bank of Clarke) and a director since 2019; he has served as CEO since July 2019 and is age 56, according to the 2025 proxy . Under his tenure, reported net income was $15.3 million in 2024 (vs. $9.4 million in 2023 and $14.5 million in 2022), and the company reported a cumulative TSR value of $117.51 for a hypothetical $100 investment from the 2021 base through 2024 . Shareholders showed strong historical support for pay practices, with ~95% approval in the 2022 say‑on‑pay vote .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| United Bank (CT) | EVP, Head of Consumer Banking | 2015–2019 | Led consumer banking for a ~$7.3B asset bank prior to EFSI; preceded by EVP Consumer Lending and SVP roles (risk, finance, ops, sales) providing broad consumer and risk expertise . |
| H&R Block Bank (KS) | Chief Credit and Lending Officer | Prior to United Bank | Enterprise credit and lending leadership, deepening consumer credit risk and product oversight experience . |
| Sovereign Bank (PA) | Senior Vice President | Prior to H&R Block Bank | Senior operating role augmenting retail banking and credit operating experience . |
| Chevy Chase Bank (MD) | Various roles including Vice President (risk, finance, operations, direct sales) | Earlier tenure | Cross‑functional leadership across risk, finance, operations, and direct sales—building a foundation in P&L and balance-sheet management . |
External Roles
No additional current public-company directorships or external committee roles are disclosed for Mr. Lorey in the 2024–2025 proxies .
Fixed Compensation
| Year | Base Salary ($) | All Other Compensation ($) |
|---|---|---|
| 2024 | 556,972 | 69,375 |
| 2023 | 540,750 | 53,224 |
| 2022 | 515,000 | 50,729 |
Notes:
- All other compensation includes 401(k) contributions, dividends on unvested equity, life insurance premiums, and club dues paid on his behalf .
Performance Compensation
Annual Incentive (SOICP)
| Year | Target bonus (% base) | Gate/threshold conditions | Payout (% base) |
|---|---|---|---|
| 2024 | 25–30% range for NEOs | Company pretax net income ≥ 90% of target; −20% adjustment if nonperforming assets/total assets ≥ 1.25%; metrics: ROAA, noninterest expense/avg assets, net deposit growth, noninterest income/total income | 35.5% for CEO |
| 2023 | 25–30% range for NEOs | Company pretax net income ≥ 80% of target; −20% adjustment if nonperforming assets/total assets ≥ 1.25%; metrics: ROAA, efficiency, net loan growth, noninterest income/total income | 0% for CEO |
| 2022 | Not disclosed | Not disclosed | 27.0% for CEO |
Design features:
- Maximum incentive opportunities range from 37.5%–45% of base salary (by title) .
- Committee retains discretion over awards .
Long‑Term Equity
Design and metrics
- Equity awards are delivered as restricted stock: time‑based (3‑year ratable vesting) and performance‑based (2023 grants earned over a two‑year performance period with vesting at year 2; 2024 grants earned over a three‑year performance period with vesting at year 3) .
- Performance‑based awards are earned on ROAA percentile rank versus a custom peer group, with 0.5x/1.0x/1.5x target shares at 25th/50th/75th percentiles and straight‑line interpolation in between; cap at 1.5x target .
Key CEO awards outstanding at 12/31/2024
| Grant Date | Award Type | Shares/Units Outstanding | Vesting schedule | Fair value at 12/31/2024 ($) |
|---|---|---|---|---|
| 1/19/2022 | Time‑based RS | 892 | 1/3 each year over 3 years | 32,469 |
| 1/03/2023 | Time‑based RS | 1,866 | 1/3 each year over 3 years | 67,922 |
| 1/03/2023 | Performance RS (target unearned) | 1,400 | Earn on 2‑year average performance (2024–2025), vest at year 2 | 50,960 |
| 1/02/2024 | Time‑based RS | 3,497 | 1/3 each year over 3 years | 127,291 |
| 1/02/2024 | Performance RS (target unearned) | 3,497 | Earn on 3‑year average performance (2024–2026), vest at year 3 | 127,291 |
Implementation notes:
- CEO equity mix set at 50% time‑vested and 50% performance‑vested (at target) for 2023 and 2024 grants .
- The 2025 proxy’s Outstanding Equity Awards table provides award counts/values shown above as of 12/31/2024 .
Equity Ownership & Alignment
- Beneficial ownership: 38,786 shares as of March 21, 2025; under 1% of shares outstanding (5,378,653) . Prior year: 33,671 shares as of March 22, 2024; under 1% of shares outstanding (3,557,229) .
- Unvested/Unearned holdings at 12/31/2024 are detailed by grant above; dividends on unvested RS are paid during the vesting period, aligning compensation with shareholder returns .
- Anti‑hedging/pledging: the company states it currently does not have policies prohibiting hedging/derivative transactions in company stock; no disclosure of pledging—absence of a hedging prohibition is a governance alignment risk to monitor .
Ownership details
| Date | Beneficially Owned Shares | % of Class |
|---|---|---|
| 03/21/2025 | 38,786 | <1% |
| 03/22/2024 | 33,671 | <1% |
Employment Terms
- Agreement: Employment agreement dated July 10, 2019, amended and restated Jan 10, 2020; auto‑renews annually after December 31, 2024, unless either party elects not to extend .
- Initial base salary: $400,000; eligible for increases and incentive/bonus at Board discretion .
- Severance (no change‑in‑control): If terminated without cause or resigns for good reason, receives two years of base salary, a cash bonus equal to the greater of (i) highest bonus in the prior three fiscal years or (ii) the designated bonus for the year, $15,000 welfare continuance, and outplacement up to 10% of annual base salary; no payments if terminated for cause .
- Change‑in‑control (double trigger, within one year): 299% of average total compensation over the most recent five calendar years prior to the change in control (subject to cutback to avoid excise tax) .
- Restrictive covenants: confidentiality, non‑disclosure, non‑competition, and non‑solicitation; non‑compete/non‑solicit generally 12 months post‑employment .
- Equity treatment on CIC: accelerated vesting of outstanding equity awards under the Stock Incentive Plan .
Board Governance
- Role: Director since 2019; serves concurrently as President & CEO .
- Independence: Not independent due to CEO role; 10 of 11 directors are independent .
- Leadership structure: CEO and Chair roles separated; independent Chair (Thomas T. Gilpin) through 2025 meeting; Board does not require a Lead Independent Director given separation .
- Committees: Audit, Compensation, and Nominating/Corporate Governance committees comprised of independent directors; Lorey is not listed as a member; CEO compensation set by independent Compensation Committee .
- Attendance: All directors attended >75% of board and committee meetings in 2024; independent directors held three executive sessions in 2024 .
- Director pay: As an employee‑director, Lorey receives no separate director compensation .
Compensation Committee Analysis and Process
- Independent advisor: The Compensation Committee engaged David Jones (formerly Pearl Meyer) to advise on compensation strategy, peer group selection, plan design, risk assessment, and director/CEO evaluations; the Committee concluded pay plans do not encourage excessive risk .
- Peer benchmarking: Committee compares against a peer set of similarly sized, SEC‑reporting community banks in Virginia and nearby states, focusing on market competitiveness and alignment .
Related Party Transactions and Policies
- Ordinary‑course banking relationships with directors and officers: Loans and deposits on terms comparable to non‑related parties; loans outstanding to related parties totaled ~$5.65 million and deposits ~$7.44 million at 12/31/2024 .
- Oversight: No formal related‑party transaction policy; Board reviews proposed transactions; Audit Committee reviews significant conflicts .
Say‑on‑Pay & Shareholder Feedback
- Prior say‑on‑pay support: ~95% approval in 2022 .
- 2025 proposals: Advisory vote on executive compensation and on future frequency (Board recommends a three‑year cycle) .
Risk Indicators & Red Flags
- Hedging policy: The company discloses no anti‑hedging policy—this can weaken alignment if executives hedge exposure .
- CIC economics: 299% payout (double‑trigger) is meaningful; however, it is conditioned on termination within one year of CIC and subject to excise tax cutback .
- Related‑party policy: Absence of a formal related‑party transaction policy is a governance gap; mitigated by Board/Audit Committee review and Regulation O compliance .
- Form 4/insider sales: No insider transaction detail is included in the proxies; monitor Form 4 filings around vest dates for potential selling pressure (vesting schedules noted below) .
Vesting Schedules and Potential Selling Pressure
- Time‑based RS: Ratable vesting (1/3) each anniversary for three years; for the 1/02/2024 grant, vesting occurs on each anniversary through 2027 (employment required) .
- Performance RS: 2023 grant measured on a two‑year period (2024–2025) with vesting at the end of year 2; 2024 grant measured over 2024–2026 with vesting at end of year 3; earned shares depend on ROAA percentile versus peers (0.5x–1.5x target) .
- Implication: Time‑based vesting anniversaries and performance‑award cliff dates are typical windows to watch for Form 4 sales or tax‑related dispositions; no insider trade details are disclosed in the proxies themselves .
Equity Ownership & Director Compensation Guidelines
- Executive ownership guidelines: Not disclosed in the proxies for executives .
- Director stock awards: Non‑employee directors received annual restricted stock (e.g., 600 shares in January 2024 at $30.00, vesting in December 2024); Lorey, as CEO, does not receive director equity compensation .
Investment Implications
- Pay‑for‑performance alignment: 2024 cash incentive paid at 35.5% of base tied to ROAA, cost discipline, deposit growth, and fee mix; 2023 paid 0%—showing down‑cycle sensitivity—which supports alignment with fundamentals .
- Long‑term focus and retention: Significant unvested and unearned equity (time‑based and performance‑based) with three‑year performance cycles and multi‑year vesting supports retention and long‑term ROAA‑based value creation .
- Governance checks: Independent Chair and fully independent key committees mitigate dual‑role concerns; however, the lack of an anti‑hedging policy and absence of a formal related‑party transactions policy are governance gaps to monitor .
- Change‑in‑control economics: Double‑trigger protection (299% of five‑year average total comp) and equity acceleration could materially increase exit costs in a sale; balanced by the requirement for termination post‑CIC and cutback provisions .
- Trading signals: Monitor Form 4 filings around annual RS vesting dates and performance award cliff dates (noted above) for potential supply; also watch future proxy “Pay vs Performance” disclosures to assess durability of improved net income and TSR trends into and beyond 2025 .