James Beckwith

About James Beckwith

James E. Beckwith, age 67, has served as President and Chief Executive Officer of Five Star Bancorp since 2003 and is a director of the Company and Bank . He holds a B.S. in Business Administration (Accounting) from San Francisco State University and is a graduate of Pacific Coast Banking School at the University of Washington . Under his tenure, FSBC has maintained steady profitability; recent S&P Global data show Net Income of $44.8m (FY22), $47.7m (FY23), and $45.7m (FY24), with revenues of $7.16m, $7.51m, and $6.45m respectively (see Performance table; values from S&P Global)*. The board separates the roles of CEO and Chair (independent chair: Robert T. Perry‑Smith), mitigating dual‑role governance risk .

Past Roles

External Roles

Fixed Compensation

Additional items (2024): change in pension value (salary continuation agreement) was $(110,786) and other compensation $44,308 (auto, life insurance, 401(k) match, cell phone, club dues) .

Performance Compensation

• Annual bonus structure (NEOs): Discretionary plan with individual and corporate goals; a portion payable in stock awards (generally vesting over time); subject to company clawback policy adopted Oct 2, 2023 . Stock options are not currently used; no new option-like instruments were granted in 2024 .
• Long-term incentives (approved in 2025):
  • CEO PSU and RSA grants: PSUs $220,000 (grant date around Jul 28, 2025), RSAs $220,000; under 2021 Equity Incentive Plan .
  • PSU metric/payouts: 3-year average ROAA (to 12/31/2027) vs S&P Global Broad Market Index – Western Region peer set; payout at 60th/70th/80th percentile = 50%/100%/150% of target, vesting on 12/31/2027 if employed .
  • RSAs vest in equal annual installments over 5 years from grant date, service-based .
  • Similar program for other executives (PSUs/RSUs $100,000 each) approved Apr 17, 2025 .
• Outstanding equity and vesting cadence:
  • 5/7/2021 grant: 25,713 unvested shares; 7-year equal annual vesting from one year after grant .
  • 2/7/2024 grant: 20,000 unvested shares; 5-year equal annual vesting from one year after grant .

Detailed LTI table

Equity Ownership & Alignment

• Beneficial ownership: 486,381 shares (2.28% of outstanding as of Mar 21, 2025) .
• Vested vs unvested near term: includes 6,429 shares vesting within 60 days and 35,284 shares not vesting within 60 days as of Mar 21, 2025 .
• Pledging: 431,668 shares pledged as collateral to secure personal indebtedness (RED FLAG relative to alignment/forced-sale risk) . Company policy prohibits hedging and pledging absent board-approved exception .
• Ownership breakdown (market-value references use $30.09 as of 12/31/2024):
  • 5/7/2021 unvested: 25,713 shares ($773,704) .
  • 2/7/2024 unvested: 20,000 shares ($601,800) .

Ownership table

Signals:

• Time-based vesting in multiple tranches (5- and 7-year) creates periodic taxable events that can correlate with 10b5‑1 sales; executives may adopt 10b5‑1 plans per policy . Pledge introduces potential margin-call risk under adverse price scenarios despite policy restrictions .

Employment Terms

• Employment agreement: Effective Jan 3, 2022 (initial 3-year term, then 1-year auto-renewals unless 60-day non-renewal notice) .
• Target/Max bonus: 75% target; up to 100% maximum of base salary .
• Severance: If terminated without cause or resigns for good reason, cash severance equals 24 months of then-current base salary plus bonus; subject to release of claims and “best-net” 280G cutback (no tax gross-up) .
• Restrictive covenants: Confidentiality, employee non-solicitation, and non-disparagement obligations .
• Salary continuation/SERP: $175,000 per year for 10 years commencing at age 65 (or certain earlier-termination scenarios based on service); upon change in control followed within 24 months by separation for good reason, same $175,000/year for 10 years beginning at age 65 .
• Clawback: Company clawback policy adopted Oct 2, 2023 for erroneously awarded incentive compensation upon accounting restatements .

Board Governance

• Role: Director since 2003; President & CEO .
• Independence: Not independent (board majority independent; only Beckwith and David Nickum deemed non‑independent) .
• Leadership structure: Roles separated—CEO (Beckwith) and independent Board Chair (Robert T. Perry‑Smith); no requirement for Lead Independent Director; board periodically reviews structure .
• Committees: Audit (Perry‑Smith Chair; Kashiwagi; Reynoso), Compensation (Riggs Chair; Lucas; Ramos), Governance & Nominating (Allbaugh Chair; Deary‑Bell; Perry‑Smith); all committee members are independent .
• Director pay: Beckwith receives no additional director compensation (officer-only compensation) .
• Hedging/pledging policy: Prohibits hedging and pledging absent exceptions; also restricts margin accounts .

Director Compensation (as a Director)

• Not applicable—no separate fees or equity for Beckwith as he is compensated as an officer .

Performance & Track Record

Company performance context (S&P Global):

• Annual | Metric | FY 2022 | FY 2023 | FY 2024 | |---|---:|---:|---:| | Revenues ($) | 7,157,000* | 7,511,000* | 6,453,000* | | Net Income ($) | 44,801,000* | 47,734,000* | 45,671,000* | Values retrieved from S&P Global.

• Recent quarters | Metric | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | |---|---:|---:|---:|---:| | Revenues ($) | 1,666,000* | 1,359,000* | 1,810,000* | 1,966,000* | | Net Income ($) | 13,317,000* | 13,111,000* | 14,508,000* | 16,344,000* | Values retrieved from S&P Global.

Strategic execution highlights (qualitative context): management underscores growth in agriculture, manufactured housing/RV, storage, student housing (Berkeley), construction industries/deposits, Bay Area C&I/CRE, and government/nonprofit deposit niches per Q3’25 call commentary by Beckwith .

Compensation Structure Analysis

• Shift toward performance equity: Introduction of PSUs tied to relative ROAA aligns LTI with multi-year profitability vs peers (payout 50–150% of target) .
• Continued use of time-vest RS/RSAs: 5–7 year vesting promotes retention but can reduce performance sensitivity vs pure PSU mix .
• No options/repricing: Company does not currently grant stock options, reducing risk of underwater option repricings (a positive governance signal) .
• Clawback adoption: Post‑2023 clawback policy reduces risk of paying for misstated results .
• Guaranteed vs at‑risk: CEO’s annual cash bonus remains discretionary and at‑risk, with stock components historically used (2024: stock awards reported at $439,400) .

Related Party Transactions (context)

• Ordinary‑course loans/deposits with insiders are permitted and monitored; as of Dec 31, 2024, ~$14.5m loans outstanding to directors/executives/major shareholders and affiliates; no loans were nonaccrual, past due, restructured, or potential problem loans .

Equity Grant Detail (Unvested at 12/31/2024)

Employment & Contracts Summary

Board Service Considerations (Dual-Role Implications)

• CEO + Director (not Chair): Board has separated Chair and CEO; current independent Chair (Perry‑Smith) and independent committees provide oversight, mitigating common dual‑role concerns .
• Independence: Beckwith not independent; board majority independent supports checks and balances .

Investment Implications

• Alignment vs risk: The 2025 PSUs introduce clearer pay‑for‑performance linkage (relative ROAA), a positive for alignment. However, the large share pledge (431,668 shares) introduces forced‑sale risk in drawdowns; maintain vigilance for any pledge reductions or policy changes .
• Retention and selling pressure: Multi‑year time‑vest RS/RSAs (5–7 years) create steady vest events that can lead to periodic 10b5‑1 sales; monitor Form 4s around anniversary dates to gauge supply dynamics .
• Severance economics: 2x salary+bonus severance and a defined SERP provide retention but add cost in transitions; absence of 280G gross‑up and presence of a clawback are shareholder‑friendly mitigants .
• Performance context: Net income remained resilient through FY24 and improved sequentially in 2025 quarters (per S&P Global); management targets niche growth segments (ag, MHC/RV, storage, government/nonprofit, Bay Area C&I/CRE), which can support TSR if credit/rate management remains disciplined .

Notes: *Values retrieved from S&P Global.