Robertson Clay Jones
About Robertson Clay Jones
- President and CEO of Heritage Commerce Corp and Heritage Bank of Commerce since September 15, 2022; age 54; director since the same date .
- 2024 operating highlights under his leadership: net income $40.5M ($0.66/diluted share), deposits +10% YoY, loans +4%, NIM 3.28%, nonperforming loans $7.7M (0.14% of assets) .
- Pay-versus-performance context: cumulative TSR value of $95.61 for HTBK versus $132.60 for the KBW Nasdaq Bank Index over the disclosed period, framing shareholder return performance used in compensation disclosures .
- Board structure mitigates dual-role risks: Jones is the only non‑independent director; Chair role is separate and held by an independent director, with seven of eight nominees independent .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Heritage Bank of Commerce | President & COO | Dec 2021–Sep 2022 | Oversight of bank operations ahead of CEO transition |
| Heritage Bank of Commerce | EVP, President Community Business Banking Group | Oct 2019–Dec 2021 | Drove community business banking growth after Presidio acquisition |
| Presidio Bank | President | Jul 2018–2019 (until acquisition by HTBK in Oct 2019) | Led Presidio ahead of combination with Heritage |
| Presidio Bank | EVP & Mid‑Peninsula Market President | 2010–Jul 2018 | Built market presence and client growth |
| New Resource Bank | Founding President & CEO | Not disclosed | Founding leadership experience in de novo banking |
| Greater Bay Bancorp/Comerica (incl. Cupertino National Bank) | Increasing roles incl. EVP & COO at Cupertino National Bank; EVP & Manager, Venture Banking Group | 1993–2005 | Broad P&L and operating leadership in venture and community banking |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No external public company directorships disclosed in the 2025 Proxy |
Fixed Compensation
Multi-year compensation (Summary Compensation Table totals).
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 447,282 | 606,500 | 660,261 |
| Cash Incentive Paid ($) | 232,452 | 322,476 | 306,000 |
| Stock Awards ($) | 488,996 | 466,497 | 678,577 |
| All Other Compensation ($) | 28,284 | 53,018 | 30,701 |
| Total ($) | 1,197,014 | 1,481,891 | 1,694,339 |
Notes:
- 2024 CEO base salary rate was adjusted to $673,014 effective 2024 (market/merit) .
- CEO pay ratio for 2024: 16.08:1 .
Performance Compensation
Annual Cash Incentive (Executive Officer Cash Incentive Program – 2024 design)
| Metric | Weight | Threshold | Target | Max | 2024 Outcome | Payout linkage |
|---|---|---|---|---|---|---|
| Pre‑Tax Income | 20% | $54.93M | $70.63M | $86.32M | Below target | Straight‑line interpolation |
| Nonperforming Assets | 20% | $17.14M | $13.33M | $10.91M | Max achieved | As above |
| Loan Growth (budget %) | 17.5% | 70% | 90% | 110% of budget | Upper end of target | As above |
| Deposit Growth (ex‑brokered) | 17.5% | 70% | 90% | 110% of budget | Upper end of target | As above |
| Qualitative (differentiated CEO goals) | 25% | n/a | n/a | n/a | Executed leadership hires; cyber/infra investments; realigned businesses; strengthened sales culture | Committee discretion within framework |
- CEO target opportunity: 75% of base; threshold 37.5%; max 112.5% .
- 2024 actual cash award to Jones: $306,000 .
- Capital “gate”: no payout unless total risk‑based capital ≥10.5% at year‑end .
Long-Term Incentive Equity
| Grant | Grant date | Instrument | # Shares | Grant-date fair value ($) | Vesting | Performance metric |
|---|---|---|---|---|---|---|
| 2024 LTI | Mar 8, 2024 | RSU | 39,636 | 336,510 | 33% per year over 3 years | Time-based |
| 2024 LTI | Mar 8, 2024 | PRSU | 39,635 | 336,501 | Cliff after 3-year period (upon certification) | Relative ROATCE vs peer group |
Program design notes:
- 50% PRSUs (relative ROATCE over three years), 50% RSUs (3‑year ratable vesting) .
- Considering additional PRSU metrics (TSR/EPS) per shareholder feedback .
- Single‑trigger equity acceleration on change of control (CoC) under plan terms; options become immediately vested before closing; equity awards generally accelerate on CoC, death, or disability .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (2/28/2025) | 294,838 shares; includes 49,399 exercisable options; less than 1% of shares outstanding |
| Outstanding options | 49,399 options (assumed from Presidio), exercise price $10.74, expiry 7/1/2028; fully vested |
| Unvested stock/units at 12/31/2024 | 14,378; 64,591; 76,229 units (market values $134,866; $605,864; $715,028 at $9.38 close) |
| 2024 option exercises | 31,750 shares acquired on exercise (value realized on exercise not reported) |
| Ownership guidelines | CEO required to hold ≥3x base salary; executives restricted from selling until guideline met; retain ≥50% of net shares thereafter; all executives in compliance at 12/31/2024 |
| Hedging/pledging | Prohibited for officers and directors |
| Clawback | Compensation recovery policy for excess pay due to accounting restatement |
Implications:
- Ratable RSU vesting and PRSU cliff in 2026–2027 create periodic settlement windows; anti‑hedging/pledging and ownership guidelines mitigate near‑term selling pressure .
Employment Terms
| Term | Key provisions |
|---|---|
| Agreement & term | CEO employment agreement initially entered at CEO appointment; 1‑year term with automatic 1‑year renewals |
| 2024 base salary rate | $673,014 (effective 2024) |
| Annual incentive | Eligible under Executive Officer Cash Incentive Program |
| Benefits/perquisites | Company‑paid life insurance ($700,000), group health/accident/disability, up to $1,200 tax prep reimbursement, physical exam and certain long‑term care expense reimbursements, one country club and one social club membership, auto allowance $1,000/month plus fuel/maintenance |
| SERP | Present value of accumulated benefit: $164,500 at 12/31/2024; fully vested |
| Severance (no CoC) | 2x base salary + average bonus (last three years), plus 12 months of health benefits |
| Severance (CoC double trigger) | 2.75x base salary + average bonus (last three years), plus 36 months of health benefits; equity awards accelerate on CoC (single trigger) |
| Restrictive covenants | Non‑compete and non‑solicit for 12 months post‑termination in California counties where HTBK operates |
Estimated CEO payout illustrations (as of 12/31/2024):
- Change in Control: $4.13M total (cash severance $2.56M; health $116k; accelerated equity $1.456M; others) .
- Involuntary without cause: $1.92M (cash severance $1.86M; health $58k) .
Board Governance (Director Service, Committees, Independence)
- Director since September 15, 2022; not independent (only management director) .
- Committees: Finance & Investment; Strategic Initiatives; Heritage Bank of Commerce Loan Committee .
- Board leadership: Independent Chair; CEO and Chair roles are separated .
- Board attendance: All directors attended at least 75% of meetings; five executive sessions of independent directors in 2024 .
- Director pay: CEO receives no additional compensation for board service .
Director Compensation (as a director)
- No incremental director compensation paid to Jones for board service (compensated solely as an executive) .
Compensation Structure Analysis
- Cash vs equity mix: 2024 total comp ~$1.69M with meaningful at‑risk equity (stock awards $678.6k) and variable cash ($306k) .
- Shift to performance equity: Since 2023, 50% of LTI in PRSUs tied to relative ROATCE (3‑year), increasing performance linkage .
- Risk mitigants: Clawback, capital gate, multi‑metric cash plan, anti‑hedging/pledging, ownership/retention guidelines .
- No shareholder‑unfriendly features: No tax gross‑ups; no option repricing without shareholder approval .
- Equity acceleration: Single‑trigger on CoC for equity; common in peer banks but a governance sensitivity for some investors .
Compensation Peer Group (used for 2024 decisions)
- Banc of California; Bank of Marin; BayCom; Central Valley Community Bancorp; Farmers & Merchants; First Foundation; Five Star; Heritage Financial; HomeStreet; Luther Burbank (subsequently acquired); PCB Bancorp; Sierra Bancorp; TriCo; Westamerica .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay support: 97.2% approval .
- Responsive changes: Implemented PRSU program; enhanced CD&A; individualized qualitative goals; ongoing shareholder outreach .
Performance & Track Record
| 2024 Operating Highlights | Value |
|---|---|
| Net income | $40.5M |
| Diluted EPS | $0.66 |
| Deposit growth YoY | 10% |
| Loan growth YoY | 4% |
| Net interest margin | 3.28% |
| Nonperforming loans | $7.7M (0.14% of assets) |
Qualitative achievements (2024): Recruited COO, General Counsel, Chief People & Culture Officer; advanced cyber and network investments; realigned/closed underperforming units; enhanced sales culture and external engagement .
Risk Indicators & Red Flags
- Equity acceleration on CoC (single‑trigger) warrants monitoring versus best‑practice double‑trigger equity; cash severance remains double‑trigger .
- No tax gross‑ups; anti‑hedging/pledging policies; Section 16 compliance affirmed; related party transaction controls in place .
- Insider activity: 2024 option exercises (31,750 shares) present potential supply; mitigated by retention/ownership policies .
Expertise & Qualifications
- Three decades of community and venture banking leadership across Presidio Bank, New Resource Bank, Greater Bay/Comerica; CEO/President/COO roles provide strategic, lending, and operational depth .
- Board committee service in finance, strategy, and lending underscores risk/ALM oversight exposure .
Equity Incentives: Vesting Schedules and Potential Selling Pressure
- RSUs: 33% per year over three years; ongoing vest cycles (e.g., 2024 grant vests 2025–2027) .
- PRSUs: Single cliff vesting after 3‑year performance period based on relative ROATCE (e.g., 2024 grant measured over 2024–2026) .
- Ownership/retention: Must retain ≥50% of net shares after meeting guideline; all executives in compliance as of year‑end 2024 .
Investment Implications
- Pay-for-performance alignment improved with 50% PRSU mix, multi-metric cash plan, and strong shareholder support (97.2%); continued consideration of TSR/EPS metrics could increase correlation with investor returns .
- Retention risk appears contained given competitive salary, double‑trigger cash severance (2.75x on CoC), SERP, and meaningful unvested equity; equity is single‑trigger on CoC which can pull forward value but maintains continuity incentives pre‑event .
- Insider supply watch: RSU vesting cadence and 2024 option exercises introduce potential selling windows; mitigated by anti‑hedging/pledging and ownership retention rules .
- Governance structure (independent Chair, majority independent Board, committee independence) mitigates CEO/Director dual‑role concerns; no board pay to CEO reduces conflict .
- Operating execution under Jones shows disciplined credit and deposit growth in a difficult rate environment; pre‑tax income below target constrained the cash incentive, consistent with design .