Richard A. McCarty
About Richard A. McCarty
Richard A. “Rick” McCarty, 53, is President and Chief Operating Officer of Oak Valley Bancorp; he joined Oak Valley Community Bank in 1996, became COO in 2017, President in 2022, previously served as CFO (2000–2015), Senior EVP (2016), Chief Administrative Officer (2008) and Corporate Secretary (2010–2022). He holds a B.S. in Finance from California State University, Stanislaus and has been an executive officer since the holding company’s formation in 2008 . Company performance over the last three years includes cumulative TSR rising from a $100 base to $175.87 in 2024 and net income of $22.9m (2022), $30.8m (2023), and $24.9m (2024) . In 2024, four of five incentive metrics met or exceeded targets (ROA 1.35%, Net Income $24.948m, Loan Growth 8.8%, NPA/Equity 0.0%), while Core Deposit Growth was -1.0% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Oak Valley Community Bank | CFO | 2000–2015 | Led finance, external reporting; supported growth and credit quality . |
| Oak Valley Community Bank | Chief Administrative Officer | 2008– | Oversaw administrative functions after holding company formation . |
| Oak Valley Bancorp/Bank | Senior EVP | 2016 | Executive leadership role ahead of COO appointment . |
| Oak Valley Bancorp/Bank | Chief Operating Officer | 2017– | Day-to-day operations leadership; execution of growth and risk programs . |
| Oak Valley Bancorp/Bank | Corporate Secretary | 2010–2022 | Governance and disclosure responsibilities . |
| Oak Valley Bancorp/Bank | President | 2022– | Strategic and operational leadership; performance-linked incentives . |
External Roles
No external directorships or public-company board roles disclosed for Mr. McCarty in the 2025 proxy .
Fixed Compensation
| Component | 2023 ($) | 2024 ($) |
|---|---|---|
| Base Salary | 395,733 | 445,192 |
| Perquisites (Golf Membership Dues + Auto Allowance) | 17,529 | 17,457 |
| 401(k) Company Match | 22,875 | 22,875 |
| Economic Value of Split-Dollar Life Insurance (imputed) | 577 | 577 |
| Accrual for Salary Continuation Agreement Benefits | — | — |
| Total “All Other Compensation” | 43,062 | 44,785 |
Notes:
- Base salaries for NEOs were increased 10.0%–13.3% in 2024 based on peer data (California Bankers Association/Pearl Meyer) .
- Director fees are not paid to employee directors; Mr. McCarty’s board service carries no additional director cash retainer .
Performance Compensation
Annual Cash Incentive Plan (2024)
| Metric | Weight | Target | Actual | Payout Effect |
|---|---|---|---|---|
| Return on Assets (Profitability) | 70% (category total) | 1.25% | 1.35% | Above target |
| Net Income (Profitability) | 70% (category total) | $23,250,000 | $24,948,000 | Above target |
| Core Deposit Growth (Growth) | 10% | 6% | -1.0% (non-public DDA only) | Below threshold |
| Loan Growth (Growth) | 10% | 6% | 8.8% | Above target |
| Nonperforming Assets to Equity (Risk Mgmt) | 20% | <1.5% | 0.0% | Above target |
| Incentive Parameter | Threshold | Target | Maximum | 2024 Payout |
|---|---|---|---|---|
| % of Base Salary (President & COO) | 15% | 50% | 55% | $213,562 (100.5% of target) |
Equity Awards and Vesting
| Grant Type | Grant Date | Shares | Fair Value Basis | Vesting |
|---|---|---|---|---|
| Restricted Stock Award (RSA) | 02/28/2024 | 3,401 | Prior-day close; included in stock awards ($82,066) | 20% annually over 5 years starting 02/28/2025; full vest at Normal Retirement Age . |
| Restricted Stock Award (RSA) | 02/28/2025 | 5,770 | Company Form 4 disclosed grant | 20% annually per plan; subject to service; acceleration on certain events per plan . |
Vesting schedule of unvested shares at 12/31/2024:
| Vest Date | Shares |
|---|---|
| 02/28/2025 | 2,863 |
| 02/28/2026 | 2,389 |
| 02/28/2027 | 1,800 |
| 02/28/2028 | 1,204 |
| 02/28/2029 | 681 |
| Total Unvested at 12/31/2024 | 8,937 |
Insider transactions around vesting and grants:
- Shares surrendered for tax withholding: 1,021 (02/28/2024) and 1,047 (02/28/2025) .
Equity plan change-in-control mechanics:
- If awards are not assumed/substituted, they fully vest at the change-in-control effective time; if assumed/substituted, unvested awards fully vest upon a qualifying termination within 24 months .
Equity Ownership & Alignment
| Ownership Measure | Value |
|---|---|
| Beneficially Owned Shares | 56,715 |
| % of Shares Outstanding | 0.68% |
| Unvested Restricted Shares (12/31/2024) | 8,937 |
| Market Value of Unvested (12/31/2024) | $261,407 (8,937 × $29.25) |
| Hedging/Speculation Policy | Prohibited (no short selling, options, hedges) |
| Pledging | No pledging disclosed in proxy . |
Director stock ownership guidelines apply to directors generally; Bylaws require Board members to hold Company common stock; no fixed target multiple disclosed .
Employment Terms
| Provision | Key Terms |
|---|---|
| Salary Continuation Agreement (SERP) | Annual benefit $80,000 for 15 years at Normal Retirement Age (62); fully vested; disability/early termination benefits per accrued liability; split-dollar life insurance supports benefits . |
| Split-Dollar Life Insurance | Net employee death benefit $675,000 (policy purchased December 2001) . |
| Employment Agreement | Prior agreement provided severance equal to 2× base salary + prior two years’ bonus upon change-in-control unless a replacement agreement is accepted; the employment agreement expired March 18, 2024 . |
| 2018 Equity Plan – CIC Treatment | Full vesting if awards not assumed/substituted; if assumed/substituted, full vest on qualifying termination within 24 months post-CIC . |
| Hypothetical Payments Table (12/31/2024) | Retirement: $1,200,000; Early Termination: $999,520; CIC (not assumed, qualifying termination): $1,200,000; CIC (assumed, qualifying termination): $1,461,407 . |
Board Governance
- Board Service: Director with term expiring 2027; classified board structure .
- Independence: Non-independent (executive director) .
- Committee Memberships: Investment Committee (member); CRA Committee (member) .
- Board leadership structure: CEO and Chair roles separated; independent chair presides over executive sessions .
- Board and committee meeting attendance: All incumbent directors attended ≥75% of meetings in 2024; Board held 12 meetings .
- Employee directors do not receive director cash retainers; non-employee directors receive $3,000 per month .
Compensation Structure Analysis
- Mix: Salary + annual cash incentives + RSAs; options not used in recent awards (no options shown outstanding for NEOs) .
- Bonus design: Weighted primarily to profitability (70%), with growth (10%) and risk (20%); targets set around Board-approved plan; 2024 payout at 100.5% of target despite negative core deposit growth, signaling discipline with multi-metric balance .
- Equity: 5-year pro-rata RSA vesting; retirement-age accelerated vesting, and CIC protections consistent with market norms; no repricing/modifications disclosed .
- Peer benchmarking: Compensation targeted around median of Northern California peers (assets ~$1.4–$3.0bn) based on California Bankers Association survey; Pearl Meyer engagement in 2023 for validation; Committee determined no consultant conflict .
- Say-on-pay: 97% approval in 2022; advisory votes occur every three years; next at 2025 meeting .
Performance & Track Record
| Year | Compensation Actually Paid to PEO ($) | Avg CAP to Non-PEO NEOs ($) | TSR Value of $100 Investment ($) | Net Income ($) |
|---|---|---|---|---|
| 2022 | 890,034 | 579,639 | 132.27 | 22,902,000 |
| 2023 | 996,245 | 662,493 | 176.97 | 30,848,000 |
| 2024 | 975,544 | 691,909 | 175.87 | 24,948,000 |
2024 Compensation Discussion & Analysis highlights loan growth and liquidity strength; acknowledged net income/margin headwinds from rising deposit rates; maintained conservative executive compensation posture .
Vesting Schedules and Insider Selling Pressure
- RSA vesting occurs annually on/around February 28, creating periodic Form 4 activity for tax withholding (1,021 shares surrendered in 2024; 1,047 in 2025) .
- Multiple Form 4 RSA grants disclosed on 02/28 dates indicate recurring equity cadence; no open-market sales by Mr. McCarty were disclosed in the delinquent Section 16(a) report; withholding events are not discretionary selling but can contribute to modest float changes .
Equity Ownership & Alignment (Detailed)
| Item | Detail |
|---|---|
| Beneficial Ownership | 56,715 shares; 0.68% of outstanding . |
| Unvested RSAs at FY-end | 8,937 shares; scheduled vest 2025–2029 . |
| Policy Alignment | Hedging/speculation prohibited; directors encouraged to hold stock; no executive pledging disclosures . |
Compensation Peer Group (Benchmarking)
- Peer methodology: Northern California banks with assets ~$1.4–$3.0bn; Compensation targeted at median; data sourced from California Bankers Association survey; Pearl Meyer validated program in 2023 .
Say-on-Pay & Shareholder Feedback
- 2022 say-on-pay approval: 97% of votes cast, informing continuity of program design; next advisory vote scheduled at 2025 Annual Meeting; frequency vote recommended every 3 years .
Related Party Transactions & Red Flags
- No related party transactions disclosed involving Mr. McCarty; general policy requires majority approval by non-interested directors and arm’s-length terms; 2024 payments to entities affiliated with a director’s family were disclosed and reviewed per policy .
Board Service History, Committee Roles, and Dual-Role Implications
- Director since prior to 2025 meeting with term expiring 2027; serves on Investment and CRA Committees; classified board .
- Dual role (executive + director): Board classifies him as non-independent; the company separates CEO and Chair roles and maintains majority independent board and executive sessions, which helps mitigate dual-role governance concerns .
Investment Implications
- Pay-for-performance alignment appears robust: 2024 bonuses tied to multi-factor metrics with majority achieved; equity awards vest over five years with retirement/CIC provisions typical of community banks; absence of options limits leverage/overhang .
- Retention risk is moderated by vested salary continuation benefits ($80k/year for 15 years) and recurring RSA grants; however, the expiration of Mr. McCarty’s employment agreement (3/18/2024) reduces guaranteed severance certainty unless a replacement agreement is executed in a future transaction context .
- Trading signals: predictable annual vesting and tax-withholding surrenders near late February; no disclosed hedging/pledging (positive alignment), and insider sales not indicated in the proxy’s Section 16(a) summary for Mr. McCarty .
- Governance risk is contained by a majority-independent board, separated CEO/Chair, and committee oversight; Mr. McCarty’s non-independence is standard for executive directors; director fees not paid to employee directors reduce potential conflicts .