Michael Pugh
About Michael Pugh
Michael W. Pugh (age 70) has served on F&M Bank Corp.’s board since 1994 and is Chairman of the Board of the Company and the Bank since December 2018. He is President of Old Dominion Realty, Inc.; holds Virginia Certified General Appraiser (1992), Virginia broker (1976), and West Virginia broker (1982) licenses; and has extensive real estate sales, development, and appraisal experience. The Board determined he is independent under Nasdaq standards, despite customary business dealings (real estate appraisal, sales, leasing) between the Bank and entities associated with him; each director attended >75% of meetings in 2024.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Old Dominion Realty, Inc. | President | Not disclosed; 44 years (stated) | Real estate sales, development, appraisals; informs collateral and investment evaluation |
| F&M Bank Corp. and Farmers & Merchants Bank | Chairman of the Board | Since Dec 2018 | Independent Chair; enhances independent oversight and agenda setting |
| Bankers Title Shenandoah | Director | Not disclosed | Board service noted |
| F&M Mortgage | Director | Not disclosed | Board service noted |
| Valley Southern Title | Director | Not disclosed | Board service noted |
| Sunnyside Retirement Communities | Vice Chairman | Not disclosed | External nonprofit governance experience |
External Roles
| Organization | Role | Public/Private | Notes |
|---|---|---|---|
| Old Dominion Realty, Inc. | President | Private | Real estate brokerage/development; operational leadership |
| Bankers Title Shenandoah | Director | Private | Industry-adjacent title services |
| F&M Mortgage | Director | Private (subsidiary) | Affiliated entity directorship |
| Valley Southern Title | Director | Private | Title services |
| Sunnyside Retirement Communities | Vice Chairman | Nonprofit | Community governance |
No current public company directorships are disclosed for Pugh.
Board Governance
- Independence: Board deemed Pugh independent (uses Nasdaq definition) and disclosed routine business dealings (real estate services) with certain directors; Withers and Wilkerson are not independent.
- Leadership: Board has independent Chairman (Pugh) and Vice Chairman; CEO is separate from Chair role.
- Committees (Bank level; compensation paid via Bank):
- Compensation Committee member: Burkholder, Pugh, Thomas, Willingham, Wray; met 2 times in 2024.
- Corporate Governance Committee member: Hutman, Keeler, Pugh, Runion, Wilkerson, Withers; met 4 times in 2024.
- Audit Committee: Pugh is not listed; committee met 5 times in 2024.
- Attendance: Each director attended >75% of Board and committee meetings in 2024; 12 Company Board meetings and 12 Bank Board meetings were held.
- Annual Meeting Attendance: 7 of 11 directors attended the 2024 annual meeting.
Director Election Votes (2025 Annual Meeting)
| Nominee | Votes For | Votes Withheld | Broker Non-Votes |
|---|---|---|---|
| Michael W. Pugh | 1,470,279 | 72,499 | 893,399 |
Say-on-Pay Voting and Frequency (2025)
- Say-on-Pay approval: For 1,383,180; Against 134,950; Abstain 24,648; Broker Non-Votes 893,399 (≈89.7% of votes cast supported).
- Frequency vote: 1 Year 1,346,672; 2 Years 12,288; 3 Years 95,591; Abstain 88,227; Board adopted annual votes.
- Prior year (2024) say-on-pay: ~90% support (proxy disclosure).
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Fees Earned or Paid in Cash ($) | $45,200 | $54,500 |
| Stock Awards ($) | $2,667 | $0 |
| Total ($) | $47,867 | $54,500 |
| Element (2024) | Amount/Policy | Notes |
|---|---|---|
| Annual Retainer – Chairman | $50,000 | Paid quarterly 60% stock / 40% cash under Stock Compensation Guidelines; directors with ≥12,500 shares may elect a larger cash percentage. |
| Annual Retainer – Non-Employee Directors | $40,000 | Same 60/40 stock-cash default; election permitted at ≥12,500 shares. |
| Pre–July 1, 2024 Quarterly Retainer | $5,000 per quarter | For time spent outside meeting structure (non-employee directors). |
| Meeting Fees (through June 30, 2024) | Board $1,200; ALCO/Operational Risk/Comp/Corp Gov $400; Audit $500 | Company & Bank board meetings same day; only one $1,200 fee per combined meeting. |
Context: Despite the 60% stock/40% cash retainer policy beginning July 1, 2024, Pugh reported $0 stock awards in 2024 and $54,500 cash fees; he meets the ≥12,500-share threshold (13,500 shares) allowing election of a larger cash percentage.
Performance Compensation
- No director performance-based incentives (PSUs/options) or performance metrics disclosed for directors; equity awards to non-employee directors are time-based stock under Company plans, but Pugh reported $0 stock awards in 2024.
- Anti-hedging: Company states it currently has no anti-hedging policy (derivative/hedging transactions) — a governance alignment concern.
Other Directorships & Interlocks
| Entity | Relationship | Potential Interlock/Exposure |
|---|---|---|
| F&M Mortgage; Bankers Title Shenandoah; Valley Southern Title | Director roles | Transactions with Bank and affiliates possible; routine business dealings acknowledged by Board in independence assessment. |
| Old Dominion Realty, Inc. | President | Real estate services to Bank (appraisal, sales, leasing) noted; Board reviewed and maintained independence. |
Expertise & Qualifications
- Real estate appraisal and brokerage credentials; decades of operational leadership in real estate.
- Board leadership experience across financial and title services affiliates; nonprofit vice chair role.
- Independence affirmed; committee service on Compensation and Corporate Governance reflects governance expertise.
Equity Ownership
| Holder | Total Beneficial Shares | Breakdown | % of Shares Outstanding |
|---|---|---|---|
| Michael W. Pugh | 13,500 | 11,076 jointly with spouse; 2,033 simplified employee plan | 13,500 / 3,528,262 = 0.38% (derived from 3,528,262 outstanding) |
Directors and officers (17 individuals) together owned 407,560 shares (11.55%); Pugh individually is “<1%” per proxy table.
Governance Assessment
- Independence with related dealings: Board explicitly considered routine business with Pugh’s real estate interests (appraisal/sales/leasing) and maintained independence; Regulation O governs director/officer credit, and banking relationships are disclosed in aggregate (loans $20.6M; deposits $8.4M) without unfavorable features. Still, ongoing business ties warrant monitoring for conflict risk.
- Alignment and pay mix: As Chairman, Pugh’s 2024 director compensation was entirely cash ($54,500) with $0 stock awards, deviating from the default 60% stock retainer policy; he qualifies to elect more cash given ownership ≥12,500 shares. This reduces equity alignment optics versus peers receiving stock awards.
- Attendance and engagement: >75% attendance in 2024 and committee memberships (Compensation and Corporate Governance) indicate active governance engagement; independent Chair structure enhances oversight.
- Shareholder confidence signals: Strong director election support (Pugh: ~95.3% for vs. withheld among votes cast) and robust say-on-pay approvals (~89.7% in 2025; ~90% in 2024) support governance stability.
- Red flags
- Anti-hedging policy absent: Company states no anti-hedging policy — misaligned with emerging best practices; increases risk of hedging misalignment at the director level.
- Business dealings: Ongoing real estate services with Bank and affiliates introduce potential related-party exposure; Board disclosures and independence determinations partially mitigate.
- Ownership pledging/hedging: No pledging or hedging disclosures for Pugh; company-level policy lacks anti-hedging restrictions.
Overall: Pugh brings deep real estate expertise and long-tenured leadership as independent Chair with strong shareholder support and active committee service. Monitoring focus should include the cash-heavy director pay mix relative to default stock policies, and the governance framework around director-related business dealings and the absence of an anti-hedging policy.