Brent M. Giles
About Brent M. Giles
Brent M. Giles (age 57) is Chief Executive Officer and a Class II director of Hawthorn Bancshares (HWBK), serving since May 1, 2023. He holds a B.S. in banking and finance and an MBA from the University of Missouri; earlier in his career he spent nine years as an FDIC examiner and later led Liberty Bancorp (took it public and sold in 2019) before CEO roles at Wisconsin Bank & Trust and Bank of Blue Valley . Pay-versus-performance disclosures show HWBK cumulative TSR index rising from 89.66 (2022) to 112.58 (2023) to 129.95 (2024), with net income of $20.8M (2022), $1.0M (2023, impacted by a securities portfolio repositioning), and $18.3M (2024) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Liberty Bancorp, Inc. / BankLiberty | Chairman & CEO | 2003–2019 | Took company public; scaled via acquisitions and organic growth; recognized as a top-performing community bank . |
| Wisconsin Bank & Trust | President & CEO | May 2020–Jul 2021 | Led bank within larger multi-bank platform . |
| Bank of Blue Valley | Chairman, President & CEO | Jul 2021–May 2023 | Led a ~$1.4B bank; joined HWBK from this role . |
| FDIC | Bank Examiner | ~9 years (pre-2003) | Regulatory/examination expertise foundational to risk management . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Keystone Bank (board) | Director | Not specified (current at time of 2023 8‑K) | Disclosed as current board service when appointed HWBK CEO . |
Board Governance and Service (HWBK)
- Board seat: Class II director since 2023; term expires 2027 .
- Leadership structure: Separate Chairman (David T. Turner) and CEO (Giles); eight independent directors; independent executive sessions led by Philip D. Freeman; all three committees (Audit, Compensation, Nominating/Governance) are fully independent and led by independent chairs (Audit: Frank E. Burkhead; Compensation: Gus S. Wetzel, III; Nominating/Governance: Philip D. Freeman) .
- Attendance: Board met nine times in 2024; all directors attended ≥75% of meetings of the board and their committees .
- Dual-role implications: Giles is CEO and a director but not Chairman; the separated Chair/CEO model and fully independent committees mitigate independence concerns .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 300,000 | 450,000 |
| All Other Compensation ($) | 10,278 | 27,926 |
| Total Cash (Salary + All Other) ($) | 310,278 | 477,926 |
Notes: 2023 salary prorated from May 1 start per Employment Agreement (min $450,000) .
Performance Compensation
Annual Cash Incentive (Non-Equity)
| Item | 2023 | 2024 |
|---|---|---|
| Target bonus opportunity | 35% of base salary (Tier 1) | 35% of base salary (Tier 1) |
| Maximum bonus opportunity | 52% of base salary | 52% of base salary |
| Actual payout ($) | 156,000 | 157,500 |
| Metrics (qualitative) | Budgetary, credit quality, operational objectives (senior officers) | Budgetary, credit quality, operational objectives (senior officers) |
Observations: 2024 payout equals 35% of base salary (157,500/450,000), indicating achievement at target level .
Equity Incentives (RSUs)
| Item | 2023 | 2024 |
|---|---|---|
| Stock Awards (Grant-Date Fair Value, $) | 225,037 | 225,027 |
| Form | Time-based RSUs per Equity Plan; initial grant per Employment Agreement | Time-based RSUs per Equity Plan; ongoing eligibility up to 50% of base salary target |
| Performance equity | Company may grant performance-based equity; 2024 grants to Giles were RSUs (time-based) | Same |
RSU Vesting Schedule (Unvested as of 12/31/2024)
| Vest Date | Units |
|---|---|
| May 1, 2025 | 3,717 |
| Jun 30, 2025 | 4,092 |
| May 1, 2026 | 3,717 |
| Jun 30, 2026 | 4,093 |
| May 1, 2027 | 3,717 |
| Total Unvested Units (12/31/2024) | 19,336 (Market value $548,176 at $28.35) |
Change-in-control (CIC) treatment: If awards are not assumed, all unvested RSUs vest at CIC; if assumed, double‑trigger vesting on qualified termination within 24 months post-CIC .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial ownership (shares) | 15,414.25; includes 12,304.98 in trust; 35.32 joint; 3,073.95 in 401(k) |
| % of outstanding | <1% (based on 6,988,625 shares outstanding) |
| Unvested RSUs | 19,336 units; $548,176 market value at 12/31/2024 ($28.35) |
| Options outstanding | None |
| Hedging/pledging policy | Insider trading policy prohibits speculative transactions; strongly discourages hedging/monetization and requires pre‑clearance; no explicit pledging prohibition disclosed in proxy |
| Ownership guidelines | Not disclosed in the 2025 proxy (no guideline section found). |
Insider selling pressure context: Multiple RSU tranches vest on 5/1/2025, 6/30/2025, 5/1/2026, 6/30/2026, 5/1/2027, which can create periodic window-driven liquidity events subject to company trading windows/pre-clearance .
Employment Terms
| Term | Detail |
|---|---|
| Effective date | May 1, 2023 |
| Agreement term | 3-year term with automatic successive 3-year renewals unless notice of non-renewal |
| Base salary | Not less than $450,000; subject to annual review |
| Annual bonus | Target 35% of base salary; max 52%; subject to performance criteria |
| Equity | Initial RSU grant ~$225,000 FMV; future annual RSUs up to 50% of base salary (service and/or performance-based) |
| Perquisites | Company vehicle; reimbursement of country club dues; business expenses |
| Severance (no CIC) | If terminated without cause or for good reason: 2x base salary + up to 18 months COBRA payments, subject to release |
| CIC severance | If terminated without cause or for good reason from 6 months prior to signing through 24 months post‑CIC: 2x base salary + 2x average bonus for prior 3 years (subject to release) |
| Restrictive covenants | Confidentiality, non‑disclosure, non‑competition, non‑solicitation |
| Clawback | Compensation recovery policy adopted effective Oct 2, 2023 |
Potential Payments on Termination (Hypothetical at 12/31/2024)
| Benefit | Without Cause/Good Reason (No CIC) | In Connection with CIC |
|---|---|---|
| Cash – Salary Multiple | 900,000 | 900,000 |
| Cash – Prior Year Bonuses | — | 313,500 |
| COBRA Equivalent | 25,033 | 25,033 |
| Accelerated RSUs | — | 548,176 |
| Total | 925,033 | 1,786,709 |
Compensation Structure Analysis
- Mix shift and alignment: 2024 CEO pay was ~$860k: salary $450k (52%), non‑equity incentive $157.5k (18%), stock awards $225.0k (26%), other $27.9k (3%), indicating a meaningful at‑risk/equity component and a cash incentive set at target performance .
- Program governance: Compensation Committee is fully independent and engaged McLagan (Aon) as independent consultant in 2024; fees ~$26,750; the company paid Aon affiliates ~$124,888 for other services, with independence safeguards assessed .
- Risk controls: Clawback policy adopted; insider trading policy discourages hedging/monetization and requires pre‑clearance; no stock option grants and controls on grant timing relative to MNPI .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Cumulative TSR index (Initial $100) | 89.66 | 112.58 | 129.95 |
| Net Income ($000s) | 20,751 | 956 | 18,256 |
- 2023 repositioning: Under Giles’ leadership, HWBK proactively sold ~$83.7M in AFS securities at an after‑tax loss of $9.1M to reinvest at higher yields, expected to be accretive to NIM/ROA; equity/tangible book value impact expected to be neutral; capital remained well above “well‑capitalized” thresholds .
- Incentive program context: Committee affirmed that 2024 compensation programs are not reasonably likely to have a material adverse effect on the company .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay approval: Over 94% support (June 4, 2024 meeting); committee considered the strong support in continuing practices .
Related Party Transactions, Hedging/Pledging, and Red Flags
- Related party transactions: None reportable since the beginning of fiscal 2023 per policy and annual D&O questionnaires .
- Hedging/pledging: Speculative transactions are prohibited; hedging/monetization discouraged with pre‑clearance; no explicit pledging restriction disclosed .
- Golden parachute tax gross‑ups: Not disclosed for the CEO; note that another named executive (Bexten) has a 280G excise tax gross‑up in his CIC agreement, which some investors view as shareholder‑unfriendly .
Multi‑Year CEO Compensation (Summary Compensation Table)
| Component ($) | 2023 | 2024 |
|---|---|---|
| Salary | 300,000 | 450,000 |
| Stock Awards (GDFV) | 225,037 | 225,027 |
| Non‑Equity Incentive | 156,000 | 157,500 |
| All Other Compensation | 10,278 | 27,926 |
| Total | 691,315 | 860,453 |
Ownership Detail (CEO and Share Base)
| Item | Value |
|---|---|
| Shares Outstanding (Record Date) | 6,988,625 (Jan 31, 2025) |
| Brent M. Giles – Beneficial Ownership | 15,414.25 shares; <1% |
| Components | 12,304.98 (trust); 35.32 (joint); 3,073.95 (401(k)) |
Notable Governance and Committee Structure
- Audit Committee: Chair Frank E. Burkhead (SEC “financial expert”); members Freeman, Holtaway, Riley, Wetzel; 8 meetings in 2024 .
- Compensation Committee: Chair Gus S. Wetzel, III; members Burkhead, Eden, Freeman, Riley, States; 6 meetings in 2024 .
- Nominating & Corporate Governance: Chair Philip D. Freeman; all members independent .
Additional Contract Economics (Comparative Context)
- CEO severance economics summarized above. For benchmarking context, other NEO CIC arrangements include Bexten (24× monthly salary + 2× prior year bonus + proportionate current year bonus + vacation + 280G gross‑up cap, subject to 5% deal cap on aggregate change-in-control payments to insiders) and Weishaar (1.5× salary + 1.5× greater of prior‑year or target bonus + continued benefits; RSU acceleration on CIC if not assumed), underscoring broader retention protections at HWBK .
Investment Implications
- Alignment and retention: CEO’s at‑risk pay (target 35% cash bonus; time‑based RSUs with multi‑year vesting) and double‑trigger CIC protections create retention incentives; lack of explicit pledging ban is a minor governance gap, though hedging/monetization is discouraged and pre‑clearance required .
- Event‑driven considerations: Multiple RSU vesting dates (5/1 and 6/30 over 2025–2026 and 5/1/2027) could generate episodic liquidity/trading around windows; watch for Form 4s near those dates .
- Execution track record: Giles has prior value‑creation credentials (took Liberty public; successful sale), and initiated HWBK’s 2023 balance sheet repositioning to lift future NIM/ROA; 2024 profitability rebounded from 2023’s repositioning‑impacted low, while TSR trend improved across 2022–2024 .
- Governance risk checks: Separate Chair/CEO and fully independent committees mitigate dual‑role concerns; strong Say‑on‑Pay support (>94%) reduces pay‑related voting risk; note presence of 280G gross‑ups for at least one other NEO that some investors may flag .