Kathleen Chappell
About Kathleen Chappell
Executive Vice President and Chief Financial Officer of Eagle Financial Services, Inc. (EFSI) and Bank of Clarke; age 58; EVP & CFO since 2019; previously SVP & CFO from 2009–2019; prior CFO of Middleburg Financial Corporation (2005–2008) . Company performance during the latest year shows net income of $15,343k in 2024 vs $9,357k in 2023, and cumulative TSR rebounded to 117.51 in 2024 from 93.00 in 2023, indicating an improving backdrop for incentive outcomes .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Eagle Financial Services, Inc. / Bank of Clarke | Executive Vice President & Chief Financial Officer | 2019–present | Senior finance leadership for holding company and bank |
| Eagle Financial Services, Inc. / Bank of Clarke | Senior Vice President & Chief Financial Officer | 2009–2019 | Senior finance leadership for holding company and bank |
| Middleburg Financial Corporation | Senior Vice President & Chief Financial Officer | 2005–2008 | Public community bank CFO experience |
Fixed Compensation
| Metric (USD) | 2023 | 2024 |
|---|---|---|
| Base Salary | $327,010 | $336,821 |
| All Other Compensation (401k match, dividends on unvested awards, insurance, dues) | $50,089 | $70,728 |
| Total Reported Compensation | $482,576 | $618,146 |
Performance Compensation
Annual Cash Incentive (Senior Officer Incentive Compensation Plan – SOICP)
- Target opportunity range: 25%–30% of base salary for named executive officers; maximum 37.5%–45%, with payouts realized for performance between 85%–150% of targets; below 85% results in no payout .
- 2024 plan metrics: ROAA, Noninterest Expense to Average Assets, Net Deposit Growth, and Noninterest Income to Total Income; awards gated by achieving at least 90% of pretax net income target; if nonperforming assets/total assets ≥1.25%, awards reduced by 20% .
- 2024 payout outcome for CFO: 29.6% of base salary (pursuant to SOICP) .
| Plan Year | Metric | Weighting | Target | Actual | Payout |
|---|---|---|---|---|---|
| 2024 | Return on Average Assets (ROAA) | Not disclosed | Company target (not disclosed) | Achieved above threshold (plan paid) | Part of 29.6% of salary |
| 2024 | Noninterest Expense / Average Assets | Not disclosed | Company target (not disclosed) | Achieved above threshold (plan paid) | Part of 29.6% of salary |
| 2024 | Net Deposit Growth | Not disclosed | Company target (not disclosed) | Achieved above threshold (plan paid) | Part of 29.6% of salary |
| 2024 | Noninterest Income / Total Income | Not disclosed | Company target (not disclosed) | Achieved above threshold (plan paid) | Part of 29.6% of salary |
| 2024 | Gating/Downside | — | Pretax net income ≥90% target; NPA/TA ≥1.25% → -20% payout | Achieved above threshold (plan paid) | Applicable |
Equity Awards (Restricted Stock)
Program design
- Vehicles: Time-based restricted stock and performance-vested restricted stock; other NEOs (incl. CFO) receive mix of 60% time-based / 40% performance-based (at target) .
- Time-based vesting: one-third per year on each of the next three anniversaries of grant date, service-based .
- Performance-vested awards:
- 2023 grants: 2-year performance period (2024–2025), vest at end of Year 2 based on performance and service .
- 2024 grants: 3-year performance period (2024–2026), cliff vest at end of Year 3 based on performance and service .
- Performance metric: ROAA percentile ranking versus a custom peer set of similarly sized regional banks; payout range is 0.0x to 1.5x target, with interpolation between 25th/50th/75th percentiles; must be employed on vest date .
2024 Grants to CFO
| Grant Date | Time-vested Shares | Target Performance-vested Shares | Performance Metric | Payout Range | Vesting |
|---|---|---|---|---|---|
| Jan 2, 2024 | 1,508 | 294 | ROAA percentile vs custom peers | 0.0x–1.5x target | Time-based 3 annual tranches; Performance-based vests at end of 2026 if earned |
Outstanding unvested equity at 12/31/2024 (CFO)
| Grant Date | Type | Unvested Shares | Market Value at 12/31/2024 |
|---|---|---|---|
| Jan 19, 2022 | Time-based | 587 | $21,367 |
| Jan 3, 2023 | Time-based | 1,173 | $42,697 |
| Jan 2, 2024 | Time-based | 2,220 | $80,808 |
| Jan 3, 2023 | Performance (target) | 587 | $21,367 |
| Jan 2, 2024 | Performance (target) | 1,480 | $53,872 |
- Valuation basis: $36.40 closing price on 12/31/2024 .
- No stock option awards outstanding; equity compensation plan authorizes restricted stock; 208,560 shares remain available under 2023 Stock Incentive Plan as of 12/31/2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/21/2025) | 17,334 shares; indirect includes 32 shares; <1% of outstanding (5,378,653 shares outstanding) |
| Unvested Equity (12/31/2024) | Time-based: 587 (2022), 1,173 (2023), 2,220 (2024); Performance (target): 587 (2023), 1,480 (2024) |
| Hedging/Pledging | Company states it “currently does not have any policies” restricting hedging/derivative transactions in company stock (potential misalignment risk) |
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement | Employment agreement dated April 17, 2013; amended and restated Jan 10, 2020 |
| Term/Auto-renewal | Renewed Dec 31, 2024 for 1 year; renews each Dec 31 unless either party gives 90 days’ notice |
| Severance (No CIC) | If terminated without cause or for good reason: 24 months of base salary; cash equal to greater of highest bonus in prior 3 years or designated annual incentive bonus; welfare continuation benefit equal to 18x the excess of COBRA premium over employee-paid amount pre-termination |
| Change-in-Control (CIC) | If terminated without cause or for good reason within 1 year post-CIC: lump sum equal to 299% of base salary, annual bonus and equivalent benefits, subject to reduction to avoid excess parachute payments (double-trigger) |
| Equity on CIC | Accelerated vesting of stock options and restricted stock upon CIC under plan terms |
| Restrictive Covenants | Non-compete and non-solicit for 12 months post-termination; confidentiality and non-disclosure covenants apply |
Pay Versus Performance Reference Points
| Metric | 2023 | 2024 |
|---|---|---|
| Net Income (USD thousands) | 9,357 | 15,343 |
| Cumulative TSR (Value of initial $100) | 93.00 | 117.51 |
| Avg “Compensation Actually Paid” to non-PEO NEOs (USD) | $474,812 | $691,733 |
Governance and Compensation Oversight
- Compensation Committee: Independent directors; met 6 times in 2024; sets CEO pay and reviews/approves other executive pay .
- Independent compensation advisor: David Jones (formerly Pearl Meyer) advised on peer group, policy assessment, LTIP determinations, risk assessment; advisor worked for the Committee, including sessions without management .
- Say-on-pay: 95% approval at 2022 Annual Meeting; company follows a triennial vote cycle and recommends continuing a three-year frequency .
Related Party Transactions (context)
- Aggregate loans to directors, principal officers, and related parties: $5,650,159 at 12/31/2024; deposits from the same group: $7,438,909; extensions of credit subject to Regulation O and on market terms; Board reviews such transactions (no formal related-party policy) .
Investment Implications
- Alignment and upside participation: Chappell holds 17,334 shares and has material unvested equity (time-vested and performance-vested RSUs), with 2024 PSU awards tied to ROAA percentile vs a custom peer set and leverage up to 1.5x target—this links long-term pay to peer-relative profitability .
- Retention risk moderate: Contract auto-renews annually; severance equals 24 months’ salary plus bonus component; CIC protection is double-trigger at 299% of salary/bonus/benefits, which is protective and reduces opportunistic departure risk while being sizable in a consolidation scenario .
- Near-term selling pressure: Time-based RSUs vest one-third annually, creating recurring settlement events; performance awards from 2023 (2-year) and 2024 (3-year) cycles could vest in 2025/2026/2027 depending on outcomes—monitor vesting windows for potential Form 4 activity around anniversaries and performance certification .
- Pay-for-performance evidence: 2024 cash bonus paid at 29.6% of salary after gating achieved; 2023 paid 0% across NEOs, indicating downward variability when targets aren’t met—positive signal for plan discipline .
- Governance watch item: Company discloses no anti-hedging policy—this is a shareholder-alignment red flag common to smaller issuers; investors may seek confirmation of any internal practices limiting hedging/pledging despite the absence of a formal policy .