Robert W. Smalley, Jr.
About Robert W. Smalley, Jr.
Robert W. Smalley, Jr. is an independent director of Eagle Financial Services, Inc. (EFSI). He is 73 years old and has served on the board since 1989, bringing deep institutional knowledge and longstanding service; he retired from Smalley Properties Inc. (real estate management) and is Vice Chairman of Loudoun Mutual Insurance Company, a Virginia property and casualty insurer . The board has formally determined Smalley to be independent under Nasdaq standards, and all directors (including Smalley) attended greater than 75% of board and committee meetings in 2024 and 2023 .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Smalley Properties Inc. (Berryville, VA) | Retired executive; real estate management | Recently retired (disclosed 2025) | Longstanding local real estate experience; institutional knowledge cited by board |
| Smalley Package Co., Inc. (Berryville, VA) | President; real estate management | Disclosed as current in 2024 proxy | Local operating experience; institutional knowledge |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Loudoun Mutual Insurance Company | Vice Chairman | Ongoing | Virginia property & casualty insurer; external fiduciary role |
Board Governance
- Independence: Board deems Smalley independent; 10 of 11 directors are independent; CEO (Lorey) is not independent .
- Committees:
- Audit Committee member; Audit met 5 times in 2024 and 4 times in 2023; Chair is Cary C. Nelson (not Smalley) .
- Compensation Committee member; met 6 times in 2024 and 4 times in 2023; members are Matthews, Hamberger, Rinker, Smalley; consultant Pearl Meyer/David Jones engaged; no conflicts flagged .
- Not on Nominating/Corporate Governance Committee .
- Attendance and engagement:
- Board met 11 times (Company) and Bank board met 11 times in 2024; all directors attended >75% of aggregate meetings; independent directors held 3 executive sessions in 2024 .
- Board met 7 times (Company) and Bank board met 12 times in 2023; all directors attended >75%; independent directors held 3 executive sessions in 2023 .
- Board leadership: Independent Chairman (Thomas T. Gilpin); separate CEO and Chair; no Lead Independent Director needed under current structure .
Fixed Compensation
| Year | Fees Earned or Paid in Cash ($) | Committee Fees Detail | Total Cash ($) |
|---|---|---|---|
| 2024 | 35,400 | Board retainer $25,000; Audit/Comp Committee meeting fees $400/meeting; other committees $200/meeting; Committee chair retainers $4,000 (Audit), $2,000 (Comp) — Smalley not chair | 35,400 |
| 2023 | 30,200 | Same structure as above for 2023 | 30,200 |
Performance Compensation
| Year | Stock Awards ($) | Grant Date | Shares Granted | Grant-Date Price/Share | Vesting |
|---|---|---|---|---|---|
| 2024 | 18,000 | Jan 2, 2024 | 600 | $30.00 | Vested in December 2024; no restricted shares outstanding at year-end |
| 2023 | 21,570 | Jan 3, 2023 | 600 | $35.95 | Vested in December 2023; none outstanding at year-end |
Note: Director equity grants are time-based restricted stock with annual vesting; no performance metrics are tied to director equity awards (performance metrics apply to executive SOICP and PSU awards, not directors) .
Other Directorships & Interlocks
| Company | Public/Private | Role | Potential Interlock/Exposure |
|---|---|---|---|
| Loudoun Mutual Insurance Company | Private mutual | Vice Chairman | Insurance industry exposure; no disclosed related-party transactions with EFSI |
| Smalley Properties/Package Co. | Private | Executive/President (historical) | Local real estate; no specific related-party transactions disclosed beyond standard Regulation O lending practices |
- No other public company directorships disclosed for Smalley .
Expertise & Qualifications
- Long-tenured local business leader with real estate management background and insurance governance experience; valued for institutional knowledge .
- Audit Committee participation; board identifies an Audit Committee financial expert (Cary C. Nelson), but Smalley is not designated as the financial expert .
- Independent governance track record, regular attendance, and engagement in executive sessions .
Equity Ownership
| As-of Date | Beneficial Ownership (shares) | Indirect Shares Included | Percent of Class | Shares Outstanding Reference |
|---|---|---|---|---|
| Mar 21, 2025 | 25,210 | 1,639 | <1% | 5,378,653 |
| Mar 22, 2024 | 23,683 | 1,639 | <1% | 3,557,229 |
Governance Assessment
- Strengths
- Independence affirmed; dual membership on Audit and Compensation committees supports oversight effectiveness .
- Attendance exceeds the 75% threshold; engagement includes executive sessions .
- Director pay mix balanced between cash retainer/meeting fees and annual equity grants; equity promotes alignment (annual vesting) .
- Risks and RED FLAGS
- The company has no anti-hedging policy; absence is a governance and alignment red flag versus peers who restrict hedging/pledging .
- Related-party transactions policy: Company “has not adopted a formal policy” for related person transactions; while the board reviews transactions and Regulation O applies, lack of formal policy is a governance red flag for bank boards .
- Loans/deposits with directors and related parties exist (on market terms under Regulation O): $5,650,159 loans and $7,438,909 deposits at 12/31/2024; $4,981,115 loans and $7,037,731 deposits at 12/31/2023; monitor for concentration or preferential terms risk .
- No disclosure of director stock ownership guidelines or pledging restrictions for directors; alignment policies appear limited .
Insider Trades
- Attempted retrieval of Form 4 filings for “Smalley” at EFSI (2024–2025) failed due to tool authorization error (401). No insider transaction table can be provided at this time. Recommend monitoring EDGAR for Form 4s and re-running insider-trades tool once access is restored. [insider-trades skill execution error; attempted on 2025-11-19]
Notes on Executive Compensation Context (for committee oversight benchmarking)
- Say-on-pay approval was ~95% in 2022; Board continues to align pay-for-performance via SOICP and performance-vested shares for executives (metrics include ROAA percentile vs peers, non-interest expense/avg assets, net deposit growth, etc.) — relevant to Smalley’s Compensation Committee oversight role .
- Compensation consultant (Pearl Meyer/David Jones) advised the committee; worked directly for the committee and met without management; committee found policies do not encourage excessive risk-taking .
Director Compensation Summary
| Year | Cash Retainer/Fees ($) | Equity ($) | Total ($) |
|---|---|---|---|
| 2024 | 35,400 | 18,000 | 53,400 |
| 2023 | 30,200 | 21,570 | 51,770 |
Additional Governance Details
- Independent Chairman (Gilpin); separate CEO and Chair; no Lead Independent Director required under current board structure .
- Audit Committee chair: Cary C. Nelson; committee includes Smalley; oversight across internal control, compliance, and external auditor independence .
- Annual meeting attendance: All directors attended 2024 Annual Meeting . Shareholder communications are facilitated through the corporate secretary without screening .
Overall Signal: Smalley’s independence, long tenure, and dual committee roles support board effectiveness. Key governance gaps include absence of anti-hedging policy and a formal related-party transaction review policy; ongoing Regulation O-controlled insider lending should be monitored. Equity grants to directors are modest and time-based, providing some alignment without performance conditions; beneficial ownership is <1% of the class .