Hatton C. V. Smith
About Hatton C. V. Smith
Independent director of ServisFirst Bancshares (SFBS); age 74; Company director since 2007 and Bank director since inception in 2005. Former CEO of Royal Cup Coffee (1996–2014; fully retired from Royal Cup effective Feb 2020); currently CEO of Back Forty Beer Company. Serves as Chair of the SFBS Compensation Committee; identified by the Board as independent. Deep ties to the Birmingham business and civic community (former Chair of United Way; former Chairman of the Baptist Health Foundation).
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Royal Cup Coffee | Chief Executive Officer | 1996–2014; retired all roles Feb 2020 | Led major regional consumer products company; longstanding local business leadership |
| ServisFirst Bank (Board) | Director | Since 2005 | Monthly loan committee participation with full Board; risk oversight engagement |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Back Forty Beer Company | Chief Executive Officer | Current | Craft beer company in the Southeast |
| United Way; Baptist Health Foundation | Chair/Chairman (prior) | Prior service | Community leadership roles in Alabama |
Board Governance
- Independence: The Board determined six of seven directors are independent, including Smith.
- Committees: Compensation Committee Chair; no other committee memberships noted for Smith in 2024.
- Committee activity (2024): Audit (4 meetings), Compensation (4), Corporate Governance & Nominations (2).
- Attendance: Board met 8 times in 2024; every director attended at least 75% of Board and assigned committee meetings; all directors attended the 2024 annual meeting (webcast).
- Leadership structure: Combined Chair/CEO (Broughton) with a Lead Independent Director (Filler) and fully independent committees; executive sessions held regularly without management.
- Clawback: Board-adopted policy compliant with Exchange Act Rule 10D-1 and NYSE listing standards.
- Say-on-pay support: 97.3% approval at 2024 annual meeting; no major changes implemented as a result. As Compensation Chair, Smith co-signed the committee report.
Fixed Compensation (Director)
| Component | Amount | Notes |
|---|---|---|
| Annual Board retainer (2024) | $50,000 | Non-employee director retainer |
| Committee chair fees (Compensation) | $10,000 | Compensation Committee Chair fee |
| Committee membership fees (Compensation) | $6,000 | Committee member fee (structure shown; Smith’s 2024 cash total implies membership plus chair) |
| Total cash fees earned (2024) – Smith | $66,000 | Fees Earned or Paid in Cash |
| Equity grant (2024) – grant date fair value | $59,976 | 921 RSUs at $65.12 (5/20/2024) |
| Total Director Compensation (2024) – Smith | $125,976 | Cash + stock |
Performance Compensation (Director and Committee Oversight)
- Director equity: 2024 award was time-based restricted stock (no performance conditions), vesting over one year; each non-employee director received 921 RSUs on 5/20/2024, grant-date value $59,976.
- As Compensation Committee Chair, Smith oversees executive incentive design. 2024 annual incentive metrics and outcomes:
| Metric (weight) | Threshold | Target | Maximum | 2024 Actual | Outcome context |
|---|---|---|---|---|---|
| EPS (50%) | $4.20 | $4.34 | $4.40 | $4.16 | Below threshold; industry headwinds noted |
| Loan Growth (30%) | 8% | 10% | 12% | 8.1% | At/just above threshold; outpaced ~2% industry growth |
| Deposit Growth (20%) | 7% | 9% | 11% | 2.0% | Below threshold; proactive reduction of high-cost relationships |
| Credit quality modifier | <1.50% (no reduction) | — | — | 0.34% | No reduction applied |
- Payouts: Formulaic payout equaled 15.9% of target; Board used discretion to grant limited bonuses given context, with total awards still below target for each NEO.
Other Directorships & Interlocks
| Category | Details |
|---|---|
| Current public company boards | None disclosed for Smith in the proxy biography. |
| Committee interlocks | Compensation Committee members (Smith, Cashio, Filler, Mettler) had no insider participation or interlocks. |
Expertise & Qualifications
- CEO/operating experience: Former CEO of Royal Cup Coffee; current CEO of Back Forty Beer Company.
- Compensation governance: Chair, SFBS Compensation Committee; co-author of Compensation Committee Report.
- Community and network: Prominent civic roles in Alabama (United Way; Baptist Health Foundation).
- Not designated as “financial expert” (Audit Chair Tuder holds that designation).
Equity Ownership
| Holder | Shares Beneficially Owned | % of Outstanding | Notable Disclosures |
|---|---|---|---|
| Hatton C. V. Smith | 410,578 | <1% | Pledged 115,500 shares to ServisFirst Bank as collateral for a line of credit (board policy permits limited pledging with approval) |
| Director RSUs outstanding (as of 12/31/2024) | 921 (per director) | — | One-year vest; grant date 5/20/2024 |
| Board ownership posture | — | — | Company does not maintain formal ownership guidelines; Board cites very high existing ownership (each non-employee director >8x annual retainer; average multiple ~690x) |
Insider Trades (Selected Recent Form 4s)
| Transaction Date | Filing Date | Type | Shares | Price | Post-Transaction Holdings | Link |
|---|---|---|---|---|---|---|
| 2025-05-19 | 2025-05-21 | A (Award) | 784 | $0.00 | 411,362 | https://www.sec.gov/Archives/edgar/data/1430723/000143072325000017/0001430723-25-000017-index.htm |
| 2024-09-03 | 2024-09-04 | G (Gift) | 10,000 | $0.00 | 410,578 | https://www.sec.gov/Archives/edgar/data/1430723/000143072324000014/0001430723-24-000014-index.htm |
Note: Insider transactions shown are representative of Form 4 activity returned during 2020–2025 for “Smith Hatton C.V.” at SFBS; additional records exist beyond those listed here. (Source: Insider-trades skill output; SEC links above.)
Related-Party Exposure and Conflict Controls
- Ordinary-course insider banking: The company engages in customary banking transactions with directors and officers or their affiliates on market terms; related-party indebtedness totaled ~$42.4 million (2.6% of total equity capital) as of 12/31/2024, with no loans past due, nonaccrual, or TDRs.
- Hedging/Pledging policy: Hedging prohibited; pledging prohibited unless pre-approved by the Insider Trading Compliance Officer (limited exceptions permitted given unusually high insider ownership levels). Smith has 115,500 shares pledged to ServisFirst Bank (line of credit).
Compensation Committee Analysis
- Composition and independence: All members independent; committee chaired by Smith.
- Consultant: Aon Human Capital Solutions engaged; no conflicts identified; fees ≤$120,000 in 2024.
- Scope and practices: Oversees CEO and NEO pay, risk reviews, succession planning for key executives, clawback administration, and equity plan oversight; uses balanced mix of cash and equity with TSR-based performance shares.
Governance Assessment
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Strengths
- Independent director and experienced operating executive; long SFBS tenure; Compensation Committee Chair with established processes, independent consultant, and clawback policy.
- Full independent committee structure with regular executive sessions; strong director attendance.
- Strong shareholder support on Say-on-Pay (97.3% in 2024).
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Watch items / RED FLAGS
- Pledging of 115,500 shares by Smith to ServisFirst Bank. While permitted case-by-case, pledging can elevate forced-sale risk and perceived conflicts; monitor pledge levels vs. total holdings.
- Ordinary-course insider lending exists (market terms, no problem loans), but size warrants ongoing oversight given aggregate director/officer indebtedness.
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Overall implications: Smith’s long operating background and leadership of the Compensation Committee support board effectiveness. The pledging disclosure is the primary governance risk to monitor; otherwise, independence, attendance, and compensation oversight practices are consistent with investor expectations for regional banks.