Joseph Zmitrovich
About Joseph Zmitrovich
Joseph T. Zmitrovich, 55, serves as President and Chief Banking Officer of Bank of Clarke (subsidiary of Eagle Financial Services, Inc.) and is a named executive officer of EFSI. He joined the Bank in 2016, progressed through SVP & Chief Lending Officer (2016–2019), EVP & Chief Revenue Officer (2019–2020), and EVP & Chief Banking Officer (2021–May 2022) before being appointed President & Chief Banking Officer on May 31, 2022 . Company performance indicators tied to executive pay include Return on Average Assets and earnings quality; EFSI’s pay-versus-performance data shows cumulative TSR of 117.51 for 2022–2024 and net income of $15,343k in 2024, $9,357k in 2023, and $14,521k in 2022 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bank of Clarke (EFSI subsidiary) | President & Chief Banking Officer | Appointed May 31, 2022 – present | Leads M&A strategy and continues oversight of commercial lending, retail banking, cash management, loan operations and servicing . |
| Bank of Clarke (EFSI subsidiary) | EVP & Chief Banking Officer | 2021 – May 2022 | Oversight of banking operations . |
| Bank of Clarke (EFSI subsidiary) | EVP & Chief Revenue Officer | 2019 – 2020 | Revenue growth leadership . |
| Bank of Clarke (EFSI subsidiary) | SVP & Chief Lending Officer | 2016 – 2019 | Lending leadership and credit production . |
| BB&T | Market President, Southern Pennsylvania | 2015 – July 2016 | Regional market leadership . |
| Susquehanna Bank | SVP & Commercial Executive | 2008 – 2015 | Commercial banking leadership . |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Loudoun County Chamber | Board Member | Current as of June 1, 2022 | Business network governance . |
| Bankers Title Shenandoah | Board Member | Current as of June 1, 2022 | Title services oversight . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 391,650 | 403,400 |
| Bonus payout (% of base) | 0.0% | 29.6% |
| Non-Equity Incentive Plan Compensation ($) | 0 | 119,284 |
| Stock Awards – Grant-Date Fair Value ($) | 127,551 | 132,960 |
| All Other Compensation ($) | 45,720 | 71,158 |
| Total Compensation ($) | 564,921 | 726,801 |
Notes:
- 2024 incentive opportunities for named executives were targeted within 25%–30% of base salary; maximum 37.5%–45% of base salary .
- “All Other Compensation” includes 401(k) match, dividends on unvested equity, life insurance premiums, and club dues .
Performance Compensation
| Element | Detail |
|---|---|
| Plan | Senior Officer Incentive Compensation Plan (SOICP) . |
| 2024 Metrics | ROAA; Noninterest expense to average assets; Net deposit growth; Ratio of noninterest income to total income . |
| Payout mechanics | Awards scale with performance from 85% to 150%; no payout below 85% . |
| Gate/threshold | Company pretax net income must reach ≥90% of 2024 target for any metric payout . |
| Risk modifier | If nonperforming assets/total assets reached 1.25%, awards decreased by 20% . |
| Actual outcome (Mr. Zmitrovich) | Non-equity incentive paid at 29.6% of base salary for 2024 (cash bonus $119,284) . |
| Equity grant mix (2024) | 60% time-vested, 40% performance-vested at target for named executives (non-CEO) . |
| Performance share vesting | Earned based on three-year average ROAA percentile vs custom peer group; straight-line interpolation between 25th/50th/75th percentiles; cap at 1.5x target; three-year cliff vesting . |
| Time-vested RSUs | Vest 1/3 annually over three years, subject to continued employment . |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial ownership (as of Mar 21, 2025) | 23,792 shares; <1% of outstanding shares (5,378,653) . |
| Unvested time-based restricted shares (12/31/2024) | 2,659 shares; market value $96,788 at $36.40 close . |
| Unvested performance-based target shares (12/31/2024) | 1,773 shares; market value $64,537 at $36.40 close . |
| 2024 equity grants (time-vested) | 3,906 shares . |
| 2024 equity grants (performance-vested target) | 335 shares . |
| Options | No stock options outstanding or granted; equity vehicle is restricted stock under the 2023 Plan . |
| Equity plan capacity | 208,560 shares remaining available under 2023 Stock Incentive Plan (12/31/2024) . |
| Hedging policy | Company states it currently has no anti-hedging or derivative policy for stock; absence noted . |
| Ownership guidelines | Not disclosed in proxy filings (no executive ownership guideline section found) . |
| Pledging | No pledging disclosure identified in proxy; not specified . |
Employment Terms
| Term Aspect | Provision |
|---|---|
| Title and appointment | Appointed President & Chief Banking Officer of Bank of Clarke; EVP & Chief Banking Officer of EFSI (May 31, 2022) . |
| Agreement dates | Employment agreement dated Jan 10, 2020; amended and restated May 31, 2022 . |
| Term & renewal | Initial term ended Dec 31, 2024; renews automatically for one-year terms each Dec 31 unless either party gives ≥90 days’ notice . |
| Base salary (agreement) | Initial base salary $373,000 with potential increases at Board discretion . |
| Severance (non-CIC) | If terminated without cause or resigns for good reason: 24 months base salary; cash equal to greater of highest cash bonus in last 3 fiscal years or designated annual incentive; welfare continuance benefit equal to 18× the COBRA premium differential; subject to release . |
| Change-in-control | If terminated without cause or resigns for good reason within one year of a CIC: cash equal to 299% of base salary, annual bonus, and equivalent benefits (subject to 280G cut-back) . |
| Equity acceleration | Stock Incentive Plan provides accelerated vesting of outstanding restricted stock in a change in control . |
| Non-compete | 12 months post-employment; 50-mile radius of any branch or loan production office at termination; non-solicit of customers and employees for 12 months . |
| Good reason (examples) | Salary reduction; failure to provide comparable fringe benefits; failure to comply with material terms; relocation outside 25-mile radius of Clarke County (unless HQ moves); failure to ensure successor assumption . |
| Regulatory limitations | Payments contingent on compliance with banking regulations; prohibitions if deemed unsafe/unsound or if prohibited by regulators . |
Performance & Track Record
| Year | Total Shareholder Return (Value of $100) | Net Income ($000) |
|---|---|---|
| 2022 | 107.29 | 14,521 |
| 2023 | 93.00 | 9,357 |
| 2024 | 117.51 | 15,343 |
Additional Governance and Shareholder Feedback
- Say-on-Pay: At the 2022 Annual Meeting, ~95% of votes supported NEO compensation; company maintains a three-year say-on-pay frequency and seeks shareholder approval again in 2025 .
- Compensation consultant: Compensation Committee engaged David Jones (formerly Pearl Meyer) for peer benchmarking, risk review, and plan design; Committee concluded plans do not encourage unnecessary risk-taking .
- Committee structure: Compensation Committee comprises independent directors; met six times in 2024 .
Investment Implications
- Pay-for-performance structure: Cash incentive payout at 29.6% of base for 2024 reflects attainment of ROAA, expense efficiency, deposit growth, and fee-mix goals, gated by pretax net income thresholds—indicating alignment of Mr. Zmitrovich’s variable cash with bank profitability and operational discipline .
- Long-term equity incentives: Mix of time-vested and performance-vested shares tied to ROAA percentile vs peers, with 3-year cliff on 2024 grants, supports retention and multi-year performance focus; unvested awards (2,659 time-based; 1,773 performance-based target at 12/31/2024) imply constrained near-term selling pressure .
- Severance/CIC economics: 24 months salary plus bonus and benefits on non-CIC termination; 299% multiple within one year of CIC plus equity acceleration create meaningful change-of-control optionality; non-compete and non-solicit provisions mitigate near-term retention risk .
- Alignment and risk flags: Beneficial ownership is <1% (23,792 shares), supporting some skin-in-the-game but modest relative to float; company lacks an anti-hedging policy disclosure, and no pledging policy is disclosed—both potential governance red flags for alignment risk .
- Performance backdrop: TSR recovered in 2024 alongside net income improvement, which should support higher PSU realizations over the 2024–2026 performance period if ROAA ranks favorably versus the peer construct .