Heidi Sexton
About Heidi Sexton
Executive Vice President and Chief Operating Officer of Sound Community Bank since 2018; corporate secretary of Sound Financial Bancorp (SFBC). Age 49 as of 2025; tenure at SFBC since 2007. Responsibilities include enterprise risk management and compliance oversight, plus leadership of IT, systems support and operations, project management, and policies and procedures. Education: B.A. in Accounting (University of Wisconsin–Eau Claire); certifications: Certified Internal Auditor (CIA), Certified Regulatory Compliance Manager (CRCM); graduate of Washington Bankers Association Executive Development Program and Pacific Coast Banking School; external roles include CFPB Community Bank Advisory Council and ABA Compliance Administrative Committee; board member of Financial Beginnings (non-profit) . Company performance context: cumulative TSR value of initial $100 investment was $126.15 in 2024 (vs. $92.11 in 2023; $91.02 in 2022), and net income was $4.640M in 2024 (vs. $7.439M in 2023; $8.804M in 2022) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sound Community Bank | Executive Vice President & Chief Operating Officer; Corporate Secretary of SFBC | Appointed during 2018 | Led ERM and compliance; directed IT, systems support, operations, project management, and policy governance |
| Sound Community Bank | Vice President of Operations | Not disclosed | Managed deposit, electronic, and lending operations; operational execution and control |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CFPB Community Bank Advisory Council | Member | Not disclosed | Contributed community bank perspectives on consumer finance regulation |
| ABA Compliance Administrative Committee | Member | Not disclosed | Industry compliance leadership and best-practice development |
| Financial Beginnings (non-profit) | Board Member | Not disclosed | Supports financial education programs for youth and adults |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $301,917 | $304,000 |
| Target Bonus (% of base) | 37.5% | 37.5% |
| Actual Bonus Paid ($) | $93,436 (non‑equity incentive) | $124,912 (non‑equity incentive) |
| All Other Compensation ($) | $77,256 | $71,163 |
| Total Compensation ($) | $522,841 | $547,968 |
Performance Compensation
Annual Bonus Outcomes
| Metric | 2023 | 2024 |
|---|---|---|
| Pre Earnings Override (% of base) | 36.99% | 35.73% |
| Earnings Override Adjustment | −16.9% | +15.0% |
| Final Payout (% of base) | 30.74% | 41.09% |
- Plan design: 50% quantitative (asset size, capital level, delinquency ratio, ROA, non‑interest income/expense, net interest margin, CD/deposit ratio) and 50% qualitative goals; Sexton eligible for up to 37.5% of base salary, adjusted by net income “earnings override” .
Equity Grants
| Item | 2023 | 2024 |
|---|---|---|
| RSUs Granted (shares) | 640 (granted 1/27/2023; vest annually over 4 years beginning 1/27/2024) | 945 (granted 1/26/2024; vest annually over 3 years beginning 1/26/2025) |
| Options Granted (shares) | 1,600 (granted 1/27/2023; exp. 1/27/2033; vesting per outstanding awards table) | 900 (granted 1/26/2024; exp. 1/26/2034; vest in 3 equal annual installments beginning 1/26/2025) |
Outstanding Equity Awards and Vesting (as of 12/31/2024)
| Award | Shares | Exercise Price | Expiration | Vesting Schedule | Market Value (unvested RSUs) |
|---|---|---|---|---|---|
| RSU tranche (1) | 190 | — | — | Vests 1/27/2025 | $9,966 (at $52.45) |
| RSU tranche (2) | 400 | — | — | Vests 1/28/2025 & 1/28/2026 (equal installments) | $20,980 (at $52.45) |
| RSU tranche (3) | 480 | — | — | Vests 1/27/2025, 2026, 2027 (equal) | $25,176 (at $52.45) |
| RSU tranche (4) | 945 | — | — | Vests 1/26/2025, 2026, 2027 (equal) | $49,565 (at $52.45) |
| Option lot | 2,500 (exercisable) | $28.34 | 1/27/2027 | Fully exercisable | — |
| Option lot | 1,500 (exercisable) | $33.50 | 1/25/2029 | Fully exercisable | — |
| Option lot | 1,350 (exercisable) | $36.26 | 1/31/2030 | Fully exercisable | — |
| Option lot | 1,520 (exerc.) / 380 (unexerc.) | $32.46 | 1/27/2031 | Unexercisable portion vests 1/27/2025 | — |
| Option lot | 1,200 (exerc.) / 800 (unexerc.) | $42.85 | 1/28/2032 | Unexercisable portion vests 1/28/2025 & 1/28/2026 | — |
| Option lot | 640 (exerc.) / 960 (unexerc.) | $40.13 | 1/27/2033 | Unexercisable portion vests 1/27/2025–2027 (equal) | — |
| Option lot | 0 (exerc.) / 900 (unexerc.) | $39.89 | 1/26/2034 | Vests 1/26/2025–2027 (equal) | — |
Note: Unvested restricted stock at 12/31/2024 totaled 2,015 shares; after January 2025 vesting events, unvested restricted stock as of 3/31/2025 was 1,150 shares, consistent with beneficial ownership footnote .
Equity Ownership & Alignment
Beneficial Ownership (as of March 31, 2025)
| Item | Amount |
|---|---|
| Total beneficial ownership (shares) | 39,078 |
| Ownership (% of outstanding) | 1.5% (outstanding shares 2,566,069) |
| Shares in 401(k) | 2,264 |
| ESOP allocated shares | 10,147 |
| Unvested restricted stock (shares) | 1,150 |
| Options held (aggregate) | 11,510 (no voting/dispositive power) |
- Hedging/pledging: Company insider trading policy generally prohibits pledging Company stock (exceptions require demonstration of capacity to repay without resort to pledged securities) and prohibits hedging transactions (e.g., collars, swaps) .
- Ownership guidelines: Director stock ownership guideline exists ($50,000 within two years), but executive officer ownership guidelines not disclosed .
In‑the‑Money Status (as of 12/31/2024)
- All listed option exercise prices ($28.34–$42.85; $39.89; $40.13) were below the $52.45 closing price on 12/31/2024, indicating in-the-money status across tranches .
Insider Transactions (trading signal)
- Form 4 filed Nov 13–14, 2025: Sexton reported an option-related transaction and acquisition of 916 shares; filing indicates an option exercise with tax withholding mechanics (net acquisition), not open‑market selling .
Employment Terms
| Term | Provision |
|---|---|
| Change-in-Control Cash Severance | 2× current annual base salary, payable upon involuntary termination concurrent with or within 12 months after a change in control (double‑trigger) |
| Benefits Continuation | Group health, insurance, and retirement benefits maintained at no premium cost for up to 24 months post‑termination or until full‑time employment with similar benefits, subject to plan terms |
| 280G Cutback | Payments reduced to avoid “parachute payment” excise tax under IRC §280G |
| Equity Acceleration | Equity plans provide accelerated vesting upon change in control or death/disability |
| Other Employment / Non‑compete | Non‑compete terms disclosed for CEO; none disclosed for Sexton |
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($000s) | 8,804 | 7,439 | 4,640 |
| TSR – Value of $100 Investment | 91.02 | 92.11 | 126.15 |
- Say‑on‑pay outcomes: 94.7% approval (2024 vote) and 95.0% approval (2023 vote), indicating strong shareholder support for pay programs .
Related Party Transactions (indicator review)
| Year | Nature | Interest Rate | Principal at Year‑End | Interest Paid |
|---|---|---|---|---|
| 2024 | Mortgage loan | 4.25% | $630,000 | $2,630 |
| 2023 | Mortgage loan | 2.25% | $498,933 | $9,937 |
Loans to directors/executives are offered on employee terms consistent with Regulation O; preferential rates revert to market rates upon departure .
Compensation Structure Analysis
- Mix shift toward RSUs: RSU grants rose from 640 shares (2023) to 945 shares (2024), while option grants fell from 1,600 (2023) to 900 (2024), signaling higher use of time‑based equity and lower option exposure for Sexton .
- Cash pay stable; incentive variability: Base salary increased modestly (2023: $301,917; 2024: $304,000), while annual bonus rose with a positive earnings override in 2024 (41.09% of base vs 30.74% in 2023), aligning payouts with company earnings performance .
- Equity award timing: Annual grants typically occur in January alongside earnings releases; company policy does not time MNPI to benefit executives .
Investment Implications
- Alignment and retention: Meaningful ownership (39,078 shares; ~1.5%) and multi‑year unvested equity (options and RSUs vesting through 2027) create strong retention incentives; company policy limits hedging/pledging, reinforcing alignment .
- Limited near‑term selling pressure: Recent Form 4 activity shows an option exercise with net share acquisition rather than open‑market sales; annual January vesting may lead to tax‑withholding transactions but not necessarily discretionary selling .
- Change‑of‑control economics: Double‑trigger 2× salary cash plus benefits continuation, combined with equity acceleration under plan, provide balanced protection without single‑trigger windfalls; not an immediate sale‑biased structure .
- Governance signals: High say‑on‑pay support (94.7%–95.0%) and independent compensation committee underpin program credibility; related‑party mortgage loan consistent with banking norms under Regulation O .