W. Michael Funk
About W. Michael Funk
Independent director of First National Corporation (FXNC). Age 72; director since 2014. Former President, CEO, and director of Virginia Savings Bank (retired 2012). Current community and economic development roles in Shenandoah County; banking leadership background and prior bank board service cited as qualifications.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Virginia Savings Bank | President, CEO, Director | Until 2012 (retired) | Led a financial institution; prior bank board service; qualifies him for FXNC board service. |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Town of Woodstock Economic Development Authority | Vice Chairman | Ongoing (as of proxy) | Economic development oversight; community engagement. |
| Shenandoah Community Foundation | Board Member | Ongoing | Community philanthropy governance. |
| Shenandoah County Industrial Development Authority | Board Member | Ongoing | Local industrial/economic development governance. |
| Virginia Bankers Association | Past Board Member | Historical | Industry association leadership. |
| Lord Fairfax Community College Education Foundation | Past Board Member | Historical | Education foundation governance. |
Board Governance
- Independence: Board determined Funk is independent under Nasdaq listing standards.
- Committees: Audit Committee member; Compensation & Governance Committee member. Not a chair of either committee.
- Committee activity: Audit Committee met 5 times in 2024; Compensation & Governance Committee met 4 times in 2024.
- Board activity: Board met 11 times in 2024; each incumbent director attended >75% of aggregate Board and committee meetings.
- Annual meeting attendance: All but one director attended the 2024 Annual Meeting (individual names not specified).
- Governance processes: Compensation & Governance Committee also functions as nominating committee; conducts skills assessments, independence evaluations, and board education oversight.
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Fees Earned or Paid in Cash | $28,898 | Non-employee directors receive retainer $2,362.50 per month; no meeting fees. |
| Stock Awards (Unrestricted Common) | $25,200 | Granted under SIP to directors on Aug 14, 2024 at $16.80 per share (grant-date fair value basis). |
| Total | $54,098 | Cash + stock awards. |
Additional fee structure:
- Chair of the Board receives an additional $875/month; Vice Chairman receives an additional $105/month; Funk is not identified as chair or vice chair.
Performance Compensation
| Element | Structure | 2024 Detail |
|---|---|---|
| Performance-based cash | None disclosed for directors | Company pays monthly retainers; no meeting fees or performance cash for directors. |
| Performance-based equity | None disclosed for directors | Director grants are unrestricted stock awards; no performance vesting conditions noted for directors. |
Other Directorships & Interlocks
| Type | Company/Organization | Role | Potential Interlock/Conflict |
|---|---|---|---|
| Public company boards (current) | None disclosed | — | No current public-company interlocks disclosed. |
| Private/non-profit boards | Multiple local entities (EDA, Community Foundation, Industrial Development Authority) | Member/Vice Chair | Potential for ordinary-course banking relationships; board deemed independence not impaired by charitable sponsorships. |
Expertise & Qualifications
- Banking leadership: Former CEO of a financial institution; prior bank board service.
- Community/economic development: Governance roles across regional economic and philanthropic bodies.
- Committee-relevant skills: Audit Committee member with board-wide financial literacy requirement; Compensation & Governance oversight experience.
Equity Ownership
| Holder | Shares Beneficially Owned | % of Class | Notes |
|---|---|---|---|
| W. Michael Funk | 17,170 | <1% (indicated by *) | No right to acquire shares within 60 days; director-level stock awards for 2024 were unrestricted (no unvested director awards outstanding). |
Policy indicators:
- Anti-hedging policy: Company reports it currently does not have any policies regarding instruments or transactions that hedge/offset decreases in market value of FXNC stock (no anti-hedging restriction).
Governance Assessment
- Committee engagement: Dual membership (Audit; Compensation & Governance) indicates meaningful involvement in financial reporting oversight and executive/director compensation/governance processes, supporting board effectiveness.
- Independence and attendance: Affirmed independent; attended >75% of required meetings, supporting reliability and engagement.
- Compensation alignment: Director pay is modest and largely fixed retainer plus unrestricted equity; no performance pay that could bias oversight, but unrestricted stock grants provide some alignment.
- Ownership: 17,170 shares (<1%); alignment present but not concentrated; no director unvested awards outstanding, reducing lock-in risk.
- Related-party exposure: Bank extends ordinary-course loans to directors/officers totaling $3.6 million as of Dec 31, 2024 (2% of equity); loans reportedly on market terms without unfavorable features—monitor but not a current impairment to independence per board.
- RED FLAGS:
- Absence of an anti-hedging policy may allow directors to hedge FXNC exposure, weakening alignment with shareholders.
- Ordinary-course lending to directors exists; while on market terms, sustained monitoring is prudent for potential conflicts.