Gary Fan
About Gary Fan
Gary Fan (age 41) is Executive Vice President and Chief Operations Officer at RBB Bancorp’s Royal Business Bank. He joined in December 2022 as Chief Administrative Officer and became COO in May 2024, leading residential mortgage, wealth management, central operations, product, IT/security, and marketing, with mandates for growth initiatives, digital banking, M&A execution, and business model innovation . Prior roles include President of Gateway Bank FSB (2019–2022) where he led a profitable turnaround, and leadership positions at CTBC’s U.S. subsidiary as Head of Strategy (North America) and Head of Consumer Lending (2013–2018) . Company performance in 2024 was mixed: net income fell to $26.7M (EPS $1.47) vs. $42.5M (EPS $2.24) in 2023, amid higher funding costs and credit provisioning, while capital ratios remained strong and NIM expanded late in the year; say-on-pay support increased to 96% in 2024 (from 61.5% in 2023) reflecting compensation program changes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Gateway Bank FSB | President | 2019–2022 | Led profitable turnaround of the company . |
| CTBC (U.S. subsidiary) | Head of Strategy (North America) | 2013–2018 | Drove profitable growth, long-range planning, market expansion, restructuring . |
| CTBC (U.S. subsidiary) | Head of Consumer Lending | 2013–2018 | P&L over billion-dollar lending portfolios; led Sales, Marketing, Retail, Commercial, Ops, Credit Administration, Finance, HR, Legal, PMO, Real Estate . |
External Roles
None disclosed in company filings for public boards or external committee positions .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $24,791 | $325,000 | $350,000 |
| Bonus ($) | $100,000 sign-on | $25,000 project-based | $35,000 supplemental AIP uplift |
| All Other Compensation ($) | — | $79,250 (incl. $50,000 relocation) | $31,599 (perqs $18,000; 401k match $13,599) |
Performance Compensation
Annual Incentive Plan (Cash) – 2024
| Item | Value |
|---|---|
| Target bonus (% of salary) | 40% |
| Overall score (% of target) | 36% |
| Cash payout from score | $50,596 (14% of base) |
| Supplemental uplift | $35,000 (10% of base) |
| Total cash incentive | $85,596 (24% of base) |
2024 AIP Scorecard Details
| Metric | Weight | Threshold | Target | Max | 2024 Actual | % Achieved | Payout Contribution |
|---|---|---|---|---|---|---|---|
| Diluted EPS | 35% | $1.68 | $2.12 | $2.76 | $1.47 | 0% | 0% |
| ROAA | 15% | 0.80% | 1.00% | 1.30% | 0.44% | 0% | 0% |
| Efficiency Ratio | 10% | 55% | 50% | 45% | 61% | 0% | 0% |
| Leadership / Board Discretion | 20% | 80% | 100% | 130% | 130% | 150% | 30% |
| Retail Deposit Growth | 10% | $139.3M | $220.9M | $287.1M | $157.9M | 61% | 6% |
| DDA % of Total Deposits | 10% | 18.1% | 19.3% | 20.6% | 17.5% | 0% | 0% |
Note: Leadership metric maxed due to execution on clearing a BSA consent order, control enhancements, management transitions, and talent recruitment .
Long-Term Equity Incentives – 2024 Grants
| Award Type | Grant Date | Units | Vesting / Measurement |
|---|---|---|---|
| Time-based RSUs | 03/20/2024 | 3,944 | 33.3% each on 2025/2026/2027 anniversaries |
| PRSUs – TSR (relative) | 03/20/2024 | 1,972 (target) | Peer-relative TSR; payout 50/100/150%; 3-year perf period, vests post FY2026 10-K (Q1 2027) |
| PRSUs – ROAA (absolute) | 03/20/2024 | 986 (target) | Against approved 2026 forecast; payout 50/100/150% |
| PRSUs – ROATCE (absolute) | 03/20/2024 | 986 (target) | Against approved 2026 forecast; payout 50/100/150% |
| RSUs (AIP equity 2023) | 02/21/2024 | 3,033 | 33.3% each on 2025/2026/2027 anniversaries; grant date FV $53,199 |
Equity Ownership & Alignment
| Component | Detail |
|---|---|
| Beneficial common stock | 1,451 shares; <1% of outstanding |
| Unvested RSUs (12/31/2024) | 3,033 ($62,146 MV) + 3,944 ($80,813 MV), priced at $20.49 |
| PRSUs outstanding (target) | 3,944 ($80,813 MV, target), vest contingent on FY2026 metrics |
| Stock options | 12/21/2022 grant, strike $21.17, 10-year term, five equal annual vest tranches |
| Options status | 12/31/2023: 6,000 exercisable; 24,000 unexercisable |
| Option exercises | 6,000 options exercised in 2024; realized $13,745 |
| Anti-hedging/pledging | Executives prohibited from hedging/pledging company stock |
| Ownership guidelines | NEOs must hold stock = 1x salary (CEO 2x), measured at $18/share; compliance due Mar 31, 2028 for Fan; only Yeh met requirement as of proxy |
Employment Terms
| Term | Provision |
|---|---|
| Agreement date/term | Employment agreement Mar 22, 2023; amended in 2024; current term ending Dec 4, 2025; auto-renews annually unless nonrenewed ≥3 months prior |
| Base salary reference | $350,000 (2024) |
| Severance (no change-in-control) | 6 months of base salary (salary continuation) if terminated without cause |
| Change-in-control (CoC) severance | 12 months base salary + 12 months medical/dental; continued exercisability of vested options; plus 100% of annual target bonus in year of termination (clarified via 2024 amendment) |
| Equity vesting at CoC | Unvested awards under 2017 Plan vest in full upon CoC if consideration is only cash; performance awards prorated by months; RSUs generally require cash-only consideration to auto-vest |
| Clawbacks | Discretionary clawback for unsafe/unsound practices; mandatory recovery for 3-year lookback upon accounting restatement per Nasdaq/SEC rules |
| Benefits/perqs | 2024 perqs $18,000; 401(k) match $13,599; total “All Other” $31,599 |
| Tax gross-ups | None (shareholder-unfriendly tax gross-ups prohibited) |
Performance & Track Record
- Operational leadership: Mandates include digital banking, product/IT/security oversight, enterprise operations, and M&A execution; broad cross-functional leadership history with P&L responsibility over billion-dollar lending portfolios .
- 2024 leadership recognition: Board discretion score maxed for executives who helped clear a BSA consent order, remediate material weaknesses, and advance governance/talent initiatives .
- Company financial context: 2024 net income $26.7M vs. $42.5M in 2023; TBV/share increased to $24.51; NIM expanded to 2.76% in Q4; CET1 17.94% and total capital 24.49% .
Compensation Structure Analysis
- Mix shift: 2024 program separated short-term cash incentives from long-term equity, adding PRSUs (50% of LTI) alongside RSUs (50%), strengthening pay-for-performance alignment .
- Discretionary overlay: Despite low financial metric attainment, CNG Committee granted supplemental cash (10% of base) to NEOs to recognize strategic/operational achievements; Fan’s total AIP cash reached 24% of base vs. 40% target .
- Governance enhancements: Adoption of dual clawback policies; anti-hedging/pledging; stock ownership requirements; peer benchmarking by Pearl Meyer .
Multi-Year Compensation (Gary Fan)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $24,791 | $325,000 | $350,000 |
| Bonus ($) | $100,000 (sign-on) | $25,000 (project-based) | $35,000 (supplemental AIP uplift) |
| Non-Equity Incentive ($) | — | $98,804 | $50,596 |
| Stock Awards ($) | $46,186 (options) | — | $198,634 (RSUs/PRSUs) |
| All Other ($) | — | $79,250 | $31,599 |
| Total ($) | $170,977 | $528,054 | $665,829 |
Equity Vesting Schedule Highlights
- RSUs granted 02/21/2024 and 03/20/2024 vest 33.3% annually in 2025, 2026, 2027 (service-based) .
- PRSUs (TSR, ROAA, ROATCE) measure performance through FY2026; earned units vest after FY2026 10-K filing (Q1 2027) .
- Options (12/21/2022) vest in five equal annual installments; 6,000 exercised in 2024; strike $21.17; expiration 12/21/2032 .
Related Party & Risk Indicators
- Related-party transactions: None involving Fan disclosed; ordinary banking relationships governed by Board-approved policy and Regulation O; no insider indebtedness reported as of 12/31/2023 .
- Red flags: Discretionary bonus uplifts despite underperformance on key financial metrics; mitigants include clawbacks and strong capital/controls focus .
- Hedging/pledging: Prohibited under Insider Trading Policy, reducing misalignment risk .
Compensation Peer Group & Say-on-Pay
- Peer group benchmarking: Community/regional banks (assets $2–$10B; market cap $200M–$1B) used for 2024–2025 comparisons (e.g., Bank of Marin, Heritage Financial, PCB Bancorp, Preferred Bank) .
- Say-on-pay: 96% approval in 2024, up from 61.5% in 2023 following program improvements and shareholder engagement .
Employment Terms (Additional Governance)
- Agreements obligate compliance with restrictive covenants; garden leave/non-compete specifics not detailed in filings .
- Equity acceleration at CoC subject to consideration form; RSUs generally require cash-only consideration to auto-vest; PRSUs prorated by participation months .
Investment Implications
- Alignment: Significant unvested RSUs/PRSUs and option exposure tie Fan’s upside to TSR, ROAA, and ROATCE through 2026; anti-hedging/pledging and ownership guidelines further align incentives .
- Retention/selling pressure: Multi-year vesting (2025–2027) and PRSU cliff in 2027 can create periodic sell-to-cover dynamics; 2024 option exercise indicates use of equity compensation but remaining tranches/RSUs suggest continued alignment .
- Governance quality: Dual clawbacks, peer benchmarking, and increased say-on-pay support reduce compensation-risk; discretionary AIP uplifts in 2024 warrant monitoring for pay-for-performance integrity if financial metrics lag .