H. J. Shands, III
About H. J. Shands, III
H. J. Shands, III (age 69) has served on the Southside Bancshares, Inc. Board since 2017, is an independent director under NYSE rules, and is currently Chairman of the Board as of March 27, 2025; he previously served as Vice Chair during 2024. He retired on April 30, 2020 as Southside Regional President, East Texas; prior roles include President & CEO of First Bank & Trust East Texas (26 years) and Treasurer of Temple Inland Inc., bringing over 40 years of banking leadership and governance expertise to the board .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| First Bank & Trust East Texas | President & CEO | 26 years | Banking leadership, business development |
| Temple Inland Inc. | Treasurer | Not disclosed | Corporate treasury, diversified financial services exposure |
| Finance Commission of Texas | Vice Chairman (represented banking industry) | 8 years | State banking oversight; policy experience |
| CHI Memorial Health Center of East Texas | Board Member; Past Chairman | Not disclosed | Healthcare governance leadership |
| City of Lufkin 4B Economic Development | Board Member; Past Chairman | Not disclosed | Local economic development governance |
| First Bank of Conroe, N.A. | Board Member | Not disclosed | Bank board experience |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Contractor's Supply Inc. | Director | Current | Private company directorship |
| T.L.L. Temple Foundation | Trustee | Current | Philanthropic trustee role |
| I.D. and Marguerite Fairchild Foundation | Trustee | Current | Philanthropic trustee role |
Board Governance
- Independence: The Board has determined all current directors other than the CEO (Lee R. Gibson) are independent under NYSE rules; all Board committees are chaired by independent directors .
- Leadership: Shands signed the 2025 proxy letter as Chairman of the Board (effective March 27, 2025). In 2024, he served as Vice Chair of the Company board and Vice Chair of the Southside Bank board; the Chair and Vice Chair are independent and serve as ex‑officio members of the Audit, Corporate Governance and Nominating, Compensation, Risk, and Innovation/Digital/IT committees .
- Committee assignments:
- Company Board: Vice Chair (2024); ex-officio across key committees; not listed as standing member of Audit/Compensation/Innovation/CGN/Risk in 2024 .
- Bank Board: Vice Chair (2024); member of ALCO; not listed on Executive/Loan-Discount, Trust, or Compliance/IT/CRA in 2024 .
- Attendance: In 2024, each director attended at least 75% of aggregate Board and committee meetings, and all directors attended the 2024 Annual Meeting (company does not disclose individual percentages) .
Fixed Compensation
| Item | Amount | Notes |
|---|---|---|
| Annual director retainer (program term) | $101,000 | Non-employee directors; payable quarterly per Service Year (Annual Meeting to Annual Meeting) |
| Additional retainer – Vice Chair | $23,500 | Program schedule for 2024 |
| 2024 Fees Earned or Paid in Cash (Shands) | $90,461 | Calendar year 2024 |
| 2024 Stock Awards (Shands) | $40,377 | RSUs; grant-date fair value (May 15, 2024) |
| 2024 Total Director Compensation (Shands) | $130,838 | Sum of cash plus stock |
Additional retainer schedule (2024):
| Position | Additional Retainer |
|---|---|
| Chairman | $48,500 |
| Vice Chair | $23,500 |
| Audit Committee Chair | $23,500 |
| Compensation Committee Chair | $12,500 |
| Risk Committee Chair | $12,500 |
| Innovation/Digital/IT Committee Chair | $7,500 |
| Trust Committee Chair | $7,500 |
| Corporate Governance & Nominating Chair | $5,000 |
Performance Compensation
- Equity structure: Directors receive at least 40% of their annual retainer in RSUs, with the option to elect up to 100% of annual and additional retainers in RSUs; RSUs are granted on or about the first day of the Service Year and vest on the first anniversary or at the next Annual Meeting if not standing for re‑election; directors may elect deferral of settlement to a specified anniversary or termination of service .
- 2025 Incentive Plan governance features (apply broadly to equity awards, including non-employee directors): No option/SAR discounts; prohibition on repricing; minimum 1‑year vesting (limited exceptions); no liberal share recycling; no dividends on unearned awards; double-trigger CIC vesting when assumed; awards subject to clawback; no tax gross-ups; non-employee director annual compensation cap of $250,000 .
| Equity Feature (Director-Relevant) | Term |
|---|---|
| RSU grant date (2024 Service Year) | May 15, 2024 |
| RSU vesting | 1-year from grant; or following Annual Meeting if not standing for re‑election; accelerated pro rata for death/disability/CIC |
| Minimum RSU election | ≥40% of retainer starting 2024 Annual Meeting |
| Non-employee director compensation cap (per plan) | $250,000 annually |
| Clawback applicability | Awards subject to recoupment policy |
| Tax gross-ups | None |
Note: No performance metrics (e.g., TSR, ROE) are used in non-employee director compensation; awards are time‑vested RSUs per the Director Compensation Program .
Other Directorships & Interlocks
- Public company boards: Not disclosed for Shands; current external directorship is Contractor’s Supply Inc. (private) .
- Compensation committee interlocks: Company disclosed no compensation committee interlocks during fiscal 2024 (applies to executive officers; no contrary director interlocks reported) .
Expertise & Qualifications
- Skill matrix attributes for Shands: Executive experience; Banking/Financial Services industry; Accounting/Audit; Risk; Strategic Planning; Corporate Governance; Legal/Compliance; IT/Information Security; HR/Executive Compensation .
- Long-tenured banking executive; state-level finance oversight (Finance Commission of Texas) .
Equity Ownership
| Category | Shares/Units | Notes |
|---|---|---|
| Total beneficial ownership | 282,628 | Less than 1% of 30,409,265 shares outstanding |
| Owned individually | 47,293 | Sole voting and investment power |
| IRA | 6,795 | Sole voting and investment power |
| Spouse shares | 5,721 | Included; no disclaimer |
| Spousal trust | 201,952 | Disclaims beneficial ownership |
| Options exercisable within 60 days | 19,357 | Included in total |
| RSUs vesting within 60 days | 1,510 | Included in total |
| Ownership guideline compliance | Met | Directors must own ≥5,000 shares within 5 years; all current non-employee directors compliant as of March 19, 2025 |
| Anti-hedging/anti-pledging policy | Prohibits hedging, short sales, and pledging for equity grantees | Applies to directors; supports alignment |
Governance Assessment
- Strengths:
- Independent Board leadership with Shands as Chairman (2025) and ex‑officio participation across key committees enhances oversight and information flow .
- Demonstrated alignment through substantial personal holdings (282,628 shares and in‑the‑money options) and compliance with stock ownership policy; anti‑hedging/anti‑pledging restrictions further protect alignment .
- Board committees chaired by independent directors; majority independent board; audit and risk oversight clearly delineated .
- Director compensation structure tilts toward equity via RSUs (≥40%), with robust plan governance (no repricing, clawback, double‑trigger CIC, no gross‑ups) .
- Considerations/Watch items:
- Loans to directors occur in the ordinary course under Regulation O; while policy controls are disclosed, ongoing monitoring of any director-related exposures remains prudent for conflict risk management (no Shands-specific transactions disclosed) .
- Role transition: Shands was Vice Chair in 2024 and is Chairman in 2025; ensure continued independence oversight and effective use of executive sessions given combined responsibilities and ex‑officio memberships .
- Attendance signal: Company-level disclosure confirms ≥75% attendance for all directors in 2024 and full Annual Meeting attendance; individual director attendance rates not disclosed (no red flag identified) .
RED FLAGS: None disclosed relating to Shands—no related-party transactions identified for him; anti-pledging policy in place; director compensation lacks shareholder-unfriendly features (no tax gross-ups; capped) .