Sarah W. Harmon
About Sarah W. Harmon
Sarah W. Harmon is Chief Administrative Officer, General Counsel, and Corporate Secretary of First Community Bankshares (FCBC). She joined the bank in 2013, became General Counsel of First Community Bank in 2018, General Counsel of the Corporation in 2020, and was appointed CAO in 2021, overseeing legal, compliance, and human resources. Education: B.A. (Concord University, 2002, summa cum laude, Valedictorian), J.D. (Washington and Lee School of Law, 2006, cum laude), MBA (West Virginia University, 2017) . Age/tenure: Age 41 and executive of the Corporation since 2018 (as of February 26, 2024) . Recent performance context: 2024 net income $51.60m; ROAA 1.60%; return on tangible common equity 14.48%; 15th consecutive dividend increase; 257,294 shares repurchased (1.40% of outstanding) . The 2024 annual incentive used Adjusted ROATE (14.02% achieved), with KPIs on core ROA, core Net Income, and Efficiency guiding payouts .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Community Bank (subsidiary) | Various roles culminating in General Counsel | 2013–2018 | Progressive legal leadership; internal counsel support |
| First Community Bank | General Counsel | 2018–present | Lead bank legal function |
| First Community Bankshares, Inc. | General Counsel | 2020–present | Lead corporate legal; supports governance |
| First Community Bankshares, Inc. and First Community Bank | Chief Administrative Officer | 2021–present | Executive oversight of legal, compliance, and HR |
External Roles
| Organization | Role | Years | Notes / Committees |
|---|---|---|---|
| West Virginia State Bar | District 10 Representative, Board of Governors | 2021–present | Serves on various sub-committees |
| ABA General Counsel Group | Member | 2018–present | Professional GC network |
| Virginia Bankers Association | Chair, Legal Affairs Committee | 2018–present | Industry legal leadership |
| WV Bankers Association | Legislative Affairs & Government Relations Committee (chair/previously chair) | 2018–present | Policy engagement |
| SHRM, Appalachian Chapter of the Virginias | Legislative Director (previous), Board member | Prior years | Ongoing member |
| Mother Goose Child Care Center | Director (previous) | Prior years | Community service |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 284,842 | 296,720 | 306,616 |
| Stock Awards ($, grant-date FV) | 70,009 | 75,725 | 75,730 |
| Non-Equity Incentive Plan Compensation ($) | 162,802 | 114,761 | 93,752 |
| All Other Compensation ($) | 28,986 | 35,556 | 40,904 |
| Total ($) | 546,639 | 522,762 | 517,002 |
2024 “All Other Compensation” detail: retirement plan contribution $23,648; executive life insurance $7,656; perquisites (auto allowance) $9,600; total $40,904 . 2023 detail: retirement $18,300; executive life $7,656; perquisites (auto allowance) $9,600; total $35,556 .
Base compensation adjustments (annualized as of year-end): Harmon $302,821 (2023) to $340,999 (2024), +12% .
Performance Compensation
Annual Cash Incentive (ACI)
Plan structure: CRC selects a financial return metric and three KPIs annually; baseline payout equals 20%/40%/80% of base at threshold/target/maximum of the financial return metric, then adjusted by KPI performance (equal weights) with KPI thresholds at 85% of target and maximum at 115% . CRC may reduce or eliminate awards at discretion; awards paid in cash following year .
| Year (Performance) | Financial Return Metric | Target | Actual | Baseline % of Base | KPIs (equal weight) | KPI Targets | KPI Actuals | Final Payout % of Base | Cash Paid to Harmon (Paid/Expected) |
|---|---|---|---|---|---|---|---|---|---|
| 2023 | Core ROAE (adjusted for Surrey acquisition costs) | 10.75% | 10.70% | 29.50% | Core ROAA; Core Net Income; Efficiency | ROAA 1.09%; Eff. 60.46% | ROAA 1.58% (>max); Net Income 93.11% of target; Efficiency 56.92% (between target and max) | 30.96% | $93,752 (paid Mar-2024) |
| 2024 | Adjusted ROATE | 12.25% | 14.02% | 60.32% | Core ROA; Core Net Income; Efficiency | ROA 1.11%; Eff. 60.46% | Core ROA 1.60% (>max); Net Income 105% of target; Efficiency 59.11% (better than target) | 64.93% | $221,426 (to be paid Mar-2025) |
Long-Term Equity
- Instrument: 100% Performance Restricted Stock Units (PRSUs) under the 2022 Plan; cliff vest after 3 years based on performance; number of units that vest requires minimum 3-year rolling average ROAE of 8.5% .
- 2024 grant: 2,228 PRSUs (target); grant-date 5/29/2024; fair value $75,730 .
- 2023 grant: granted 5/23/2023; 2,876 PRSUs outstanding as of 12/31/2024 .
- 2022 grant: granted 5/24/2022; 2,503 PRSUs outstanding as of 12/31/2024 .
| Grant Year | Grant Date | Target Units | Vesting | Performance Condition | Grant-Date FV ($) |
|---|---|---|---|---|---|
| 2022 | 05/24/2022 | 2,503 (outstanding at 12/31/24) | Cliff vest after 3 years | ≥8.5% 3-yr rolling avg ROAE | n/a (not separately disclosed) |
| 2023 | 05/23/2023 | 2,876 (outstanding at 12/31/24) | Cliff vest after 3 years | ≥8.5% 3-yr rolling avg ROAE | n/a (stock awards $75,725 in 2023 total) |
| 2024 | 05/29/2024 | 2,228 | Cliff vest after 3 years | ≥8.5% 3-yr rolling avg ROAE | 75,730 |
Stock Options
- Outstanding (12/31/2024): 5,157 options exercisable at $33.00; expire 03/19/2031; options granted 11/3/2021 vested ratably over 3 years and became fully vested 11/03/2024 .
- Exercises (2024): 2,593 shares exercised; value realized $59,682 .
Equity Ownership & Alignment
Beneficial Ownership (latest)
| Date | Total Beneficially Owned | Components (not exhaustive) | % of Shares Outstanding | Notes |
|---|---|---|---|---|
| Feb 25, 2025 | 11,391 shares | Includes 1,379 KSOP shares and 5,157 currently exercisable options | <1% (indicated with “*”) | No pledges disclosed for Harmon; pledges noted for certain directors only |
Stock ownership guidelines: NEOs (other than CEOs) must hold Company stock equal to 2.5x base compensation; shares from equity vesting/exercise must be held until guideline met. As of December 31, 2024, all officers/directors are in compliance or making satisfactory progress; no specific timeline to achieve set .
Anti-hedging and clawback: Executives are subject to anti-hedging policy; compensation recovery policy adopted Oct 24, 2023, requiring recovery of erroneously received incentive-based pay for three years preceding any required restatement, regardless of misconduct .
Unvested Equity Overhang (12/31/2024)
| Award | Units Unvested | Market Value at $41.64 | Vesting Timing |
|---|---|---|---|
| PRSUs granted 2022 | 2,503 | $104,225 | Expected 2025, performance-contingent |
| PRSUs granted 2023 | 2,876 | $119,757 | Expected 2026, performance-contingent |
| PRSUs granted 2024 | 2,228 | $92,774 | Expected 2027, performance-contingent |
Employment Terms
- Employment agreements: Provide change-in-control (CoC) and severance protections; subject to non-compete and non-solicit post-termination .
- Non-CoC severance: 18 months of base salary plus continuation of benefits up to 18 months upon termination without “Cause” or for “Good Reason,” subject to release .
- CoC (double trigger): If within 3 years post-CoC employment is terminated without “Cause”/for “Good Reason,” continuation of base compensation and benefits for 36 months; no single-trigger cash payments .
- Equity vesting: Acceleration of unvested equity upon CoC termination (value included in potential payments) .
- Clawback and anti-hedging: As above .
Potential incremental payments (as if terminated 12/31/2023):
| Scenario (as of 12/31/2023) | Salary & Benefits | Accel/Vesting of Restricted Stock | Non-Qualified Deferred Comp | SERP | Life Insurance | Total |
|---|---|---|---|---|---|---|
| Termination without Cause (non-CoC) | $623,221 | $0 | $1,328 | $0 | $0 | $624,549 |
| CoC termination (double trigger) | $908,463 | $199,561 | $1,328 | $0 | $0 | $1,109,352 |
| Disability | $0 | $114,027 | $1,328 | $0 | $0 | $115,355 |
| Death | $0 | $114,027 | $1,328 | $0 | $721,000 | $836,355 |
Deferred compensation: modest participation; 2023 contributions $1,148; year-end balance $1,328 . SERP: Not a participant; SERP benefits disclosed only for certain other NEOs .
Compensation Structure Analysis
- Variable vs fixed mix: For 2024, NEO variable pay ~33% of total compensation (cash ACI + PRSUs) based on amounts paid in 2024; vesting is performance- and multi-year-based, aligning with long-term results .
- Governance safeguards: No single-trigger CoC cash; no tax gross-ups; no option repricing; ownership guidelines; independent consultant (Aon) advised KPI/target setting in 2024 .
- Metric rigor: Financial return metric anchored to peer median; KPI thresholds at 85% and caps at 115% of target; CRC retains negative discretion .
- Say-on-pay support: ~97% approval in 2024 indicates low shareholder friction on pay design .
Risk Indicators & Red Flags
- Pledging/hedging: Anti-hedging in place; no pledging disclosed for Harmon (certain directors disclosed pledges) .
- Award modifications/repricing: None disclosed; options not repriced .
- Clawback: Implemented per NASDAQ rules .
- Related party transactions: Process disclosed; no specific related party transactions involving Harmon identified in proxy .
Investment Implications
- Alignment: Harmon’s compensation is largely performance-oriented (cash ACI tied to Adjusted ROATE and bank KPIs; PRSUs vest on 3-year ROAE), with robust clawback/anti-hedging and stock ownership requirements—positive for shareholder alignment .
- Vesting/selling pressure: Expected PRSU cliffs in 2025/2026/2027 (2,503/2,876/2,228 units) could create periodic liquidity events; 2024 option exercise (2,593 shares) showed some monetization, though ownership policy requires holding shares from awards until guideline compliance, moderating selling pressure .
- Retention and CoC economics: 18-month severance (non-CoC) and 36-month continuation post-CoC termination provide retention stability but limited golden parachute inflation; double-trigger design reduces deal-risk optics . No SERP entitlement reduces fixed legacy liabilities versus some peers .
- Performance delivery: 2024 results exceeded targets across key metrics (Adjusted ROATE 14.02%; strong ROAA/efficiency), driving 64.93% of base ACI payout, consistent with pay-for-performance; say-on-pay at ~97% suggests low governance overhang .