David D. Brown
About David D. Brown
David D. Brown is Chief Financial Officer of First Community Bankshares, Inc. (FCBC) and First Community Bank, serving since May 2006 (employed by the company since 2005). He is a CPA with Master of Public Accountancy and B.S. degrees from West Virginia University; age 50 as disclosed in the NEO roster. His prior experience includes Corporate Auditor at United Bankshares, Inc. (1999–2005) and public accounting (1997–1999) . FCBC’s 2024 performance included Net Income of $51.60 million, ROAE of 10.03%, and cumulative TSR (value of $100 from 12/31/2019) of $161.84; management also highlighted 2024 core ROA of 1.60% vs Fed peer 0.93% .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| United Bankshares, Inc. | Corporate Auditor | 1999–2005 | Audit, controls, and risk oversight across banking operations |
| Public Accounting (various) | Tax, accounting, audit | 1997–1999 | Broad technical grounding in tax, accounting, and audit across industries |
| First Community Bankshares/First Community Bank | Chief Financial Officer | 2006–present | Corporate finance leadership; SEC reporting; capital and performance stewardship |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Carlock Pruett Athletic Foundation | Board member | n/a | Community engagement |
| Bluefield, VA Little League | Former board member | n/a | Youth athletics stewardship |
| Virginia State Little League | Umpire | n/a | Community involvement |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 310,275 | 323,213 | 337,015 |
| Annualized Base Comp as of 12/31 ($) | 329,859 | 329,859 | 340,999 |
| Non-Equity Incentive paid ($) | 177,338 (paid in 2023 for 2022 perf) | 125,008 (paid in 2024 for 2023 perf) | — (2025 payout for 2024 perf expected below) |
| 2025 cash incentive expected, for 2024 perf ($) | — | — | 221,426 (to be paid Mar-2025) |
Key plan mechanics and realized outcomes:
- Annual incentive baseline tied to a financial return metric with threshold/target/maximum mapping to 20%/40%/80% of base; adjusted by equally weighted KPIs (core ROA, core Net Income, Efficiency) with threshold/target/maximum at 85%/100%/115% of target .
- 2023 performance (paid 2024): Core ROAE 10.70% → baseline 29.50%; KPIs led to 30.96% of annualized base comp as payout .
- 2024 performance (to be paid 2025): Adjusted ROATE 14.02% → baseline 60.32%; KPIs (core ROA 1.60% above max; Net Income 105% of target; Efficiency 59.11% better than target) yielded 64.93% of annualized base comp .
Performance Compensation
Annual Cash Incentive (plan specifics and results)
| Year | Financial Return Metric (Target) | Threshold/Target/Max Baseline (% of base) | KPIs (equal weight) | KPI Targets | Actuals | Actual Payout (% base) |
|---|---|---|---|---|---|---|
| 2023 | Core ROAE (target based on peer median 3-yr avg) | 15/30/60 (min/target/max) | Core ROAA; Efficiency; Net Income | ROAA 1.09%; Efficiency 60.46% | ROAA 1.58% (>max); Net Income 93.11% of target; Efficiency 56.92% (better than target) | 30.96% |
| 2024 | Adjusted ROATE ex-AOCI (target based on peer median 3-yr avg) | 20/40/80 (min/target/max) | Core ROA; Efficiency; Net Income | ROA 1.11%; Efficiency 60.46% | ROA 1.60% (>max); Net Income 105% of target; Efficiency 59.11% (better than target) | 64.93% (to be paid Mar-2025) |
Long-Term Equity (PRSUs and Options)
- PRSUs: 100% performance-based, three-year cliff vest; vesting requires minimum 3-year rolling ROAE of 8.5% .
- 2024 grant: 2,427 PRSUs; grant date fair value $82,494; target shares and accounting basis specified .
- Outstanding unvested PRSUs and their 12/31/2024 market values:
- 2022 grant (2,727 units): $113,552
- 2023 grant (3,132 units): $130,417
- 2024 grant (2,427 units): $101,060
- Options: 4,455 options exercisable at $33.00, expiring 03/19/2031; options granted 11/3/2021 fully vested on 11/3/2024 .
- 2024 option activity: exercised 3,000 shares, value realized $40,800 .
| Equity Award Type | Grant Date | Units/Shares | Vesting | Price/Value |
|---|---|---|---|---|
| PRSU (2022) | 05/24/2022 | 2,727 | 3-yr cliff; ROAE ≥ 8.5% | $113,552 MV at 12/31/24 |
| PRSU (2023) | 05/23/2023 | 3,132 | 3-yr cliff; ROAE ≥ 8.5% | $130,417 MV at 12/31/24 |
| PRSU (2024) | 05/29/2024 | 2,427 | 3-yr cliff; ROAE ≥ 8.5% | $82,494 GDFV; $101,060 MV at 12/31/24 |
| Stock Options | 11/03/2021 | 4,455 (exercisable) | Fully vested 11/03/2024 | $33.00 strike; exp. 03/19/2031 |
Equity Ownership & Alignment
| Ownership Detail (as of 2/25/2025) | Amount |
|---|---|
| Beneficial ownership (incl. options/phantom within 60 days) | 32,939 shares |
| KSOP allocated shares | 4,244 |
| Phantom shares (deliverable upon termination/retirement) | 9,914 |
| Exercisable options (within 60 days) | 4,455 |
| Pledged shares | None indicated for Brown (pledging disclosed for other directors) |
| Stock ownership guideline | 2.5x base salary for NEOs; 3.5x for CEOs |
| Holding requirement | Must hold all shares from vesting/exercise until in compliance (limited tax/option cost exceptions) |
| Compliance status | All officers and directors in compliance or making satisfactory progress as of 12/31/2024 |
| Anti-hedging and margin policy | Hedging discouraged and must be pre-approved; no options, shorts, or margin accounts; blackout periods apply to designated insiders |
Employment Terms
- Employment Agreement: Effective Jan 1, 2024; initial 3-year term through Dec 31, 2027; auto-renews annually for a new 3-year period; supersedes prior agreements .
- Termination without Cause / Good Reason (no Change in Control): 18 months base salary and continued health/welfare benefits .
- Change in Control (double-trigger): If terminated without Cause or for Good Reason within 36 months post-CIC, continued base salary and all other compensation benefits of like kind and value plus continued health/welfare benefits for 36 months; reduced as needed to avoid 4999 excise tax .
- Restrictive covenants: Loyalty, non-compete, and non-solicitation during employment and for periods post-termination (non-compete/non-solicit generally 18 months) .
- Clawback: Nasdaq-compliant policy adopted Oct 24, 2023; 3-year lookback for recovery on restatement regardless of fault .
- No single-trigger CIC cash payments; no tax gross-ups; no option repricing/backdating .
Potential payouts (as of 12/31/2024 assumptions):
| Scenario | Salary & Benefits | Accel. Equity | Non-Qual Def. Comp. | SERP | Executive Life Ins. | Total |
|---|---|---|---|---|---|---|
| Termination without Cause | 529,077 | — | 433,795 | 34,757 | 25,816 | 1,023,445 |
| Change in Control termination | 1,022,997 | 345,029 | 433,795 | 225,672 | 25,816 | 2,053,309 |
| Disability | — | 300,286 | 433,795 | 34,757 | 25,816 | 794,654 |
| Death | — | 300,286 | 433,795 | 34,757 | 786,000 | 1,554,838 |
| Retirement | — | — | 433,795 | 34,757 | 25,816 | 494,368 |
| Early retirement | — | — | 433,795 | 30,123 | 25,816 | 489,734 |
| For Cause | — | — | 433,795 | — | 25,816 | 459,611 |
Other benefits:
- SERP present value at 12/31/2024: $218,348; plan frozen to new participants and accruals since 12/31/2021 .
- Non-Qualified Deferred Compensation (2024): Executive contributions $26,924; Company contributions $18,735; aggregate earnings $58,183; year-end balance $433,795 .
Performance & Track Record
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| FCBC TSR (year-end value of $100 invested 12/31/2019) | 72.83 | 116.90 | 122.88 | 141.73 | 161.84 |
| Net Income ($MM) | 35.93 | 51.17 | 46.66 | 48.02 | 51.60 |
| ROAE (%) | 8.54 | 11.96 | 11.04 | 10.02 | 10.03 |
Additional 2024 highlights: Dividends increased for the 15th consecutive year; 257,294 shares repurchased (1.40% of outstanding); core ROA 1.60% vs Fed peer 0.93% .
Compensation Governance, Peer Group, and Say-on-Pay
- Compensation & Retirement Committee (CRC): Independent directors Davis (Chair), Johnson, Elmore; six meetings in 2024 .
- Independent consultant: Aon Human Capital Solutions engaged in early 2024; independence affirmed .
- Peer group methodology shift to revenue-based selection ($80–$330MM) with specific listed peers; FCBC positioned near median revenue .
- Say-on-Pay: 97% approval in 2024 .
- Policies: Stock ownership guidelines and rigorous holding; anti-hedging/margin; clawback; no single-trigger CIC cash payments; no tax gross-ups; no option repricing/backdating .
Risk Indicators & Red Flags
- Hedging/shorting/margin accounts prohibited; quarterly blackout restrictions for designated insiders .
- No pledging disclosed for Brown (pledging disclosed for certain directors in footnotes); ongoing related-party transaction oversight; no related party transactions exceeding disclosure threshold in 2024 .
- Clawback in force; strong say-on-pay vote; independent CRC with use of independent consultant .
Investment Implications
- Pay-for-performance alignment is robust: 100% of LTI is performance-based PRSUs requiring sustained ROAE; annual cash incentive calibrated to peer-referenced return metrics and operating KPIs. This design ties Brown’s realized pay to multi-year returns and operational discipline, reducing risk of windfall compensation .
- Selling pressure/vesting: PRSUs cliff-vest after three years (2022, 2023, 2024 grants), which can create event-driven liquidity windows; however, stringent ownership guidelines and hold-until-compliant requirements temper near-term selling incentives .
- Retention/CIC risk: Double-trigger CIC economics with 36 months of salary/benefits (total illustrative CIC termination value ~$2.05M for Brown) provide retention but are not excessively dilutive; 18-month severance outside CIC is moderate .
- Alignment and governance: Strong say-on-pay support, no tax gross-ups or single-trigger cash, anti-hedging/pledging/margin controls, and an active CRC with external benchmarking suggest low governance risk and credible incentive calibration for the CFO role .