Thomas A. Broughton, III
About Thomas A. Broughton, III
Chairman, President and Chief Executive Officer of ServisFirst Bancshares, Inc. and ServisFirst Bank; director since 2007 (Bank director since 2005). Age 69. Chairman effective January 1, 2019. Prior roles include President and later CEO of First Commercial Bank, and Regional CEO at Synovus overseeing Alabama, Florida, Tennessee and parts of Georgia until retirement in 2004 . 2024 performance: net income $227.2 million (+9.9% YoY), diluted EPS $4.16 (+9.8%), ending loans $12.6B (+8.1%), deposits $13.5B (+2.0%), net interest income $446.7M (+8.7%), NIM 2.82% (+1bp) . Pay-versus-performance shows Company TSR value of a $100 investment at $243.52 in 2024 vs peer index $130.90 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Commercial Bank | President (de novo) | 1985–1992 | Built new bank; continued as CEO post-acquisition . |
| First Commercial Bank (Synovus subsidiary) | President & CEO | 1992–1998 | Led bank under Synovus ownership . |
| Synovus Financial Corp. | Regional CEO (AL & FL; later AL, TN, parts of GA) | 1998–Aug 2004 | Ran multi-state region; broad functional exposure . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cavalier Homes, Inc. | Director | 1986–2009 | Governance oversight until sale to Berkshire Hathaway subsidiary . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 | 2025 (approved) |
|---|---|---|---|---|
| Base Salary ($) | $700,000 | $721,000 | $746,000 | $785,000 (+5.2%) |
| Other Fixed Elements (2024) | Amount ($) |
|---|---|
| Car allowance | $9,000 |
| Country club allowance | $10,380 |
| Healthcare premiums | $16,826 |
| Employer 401(k) contribution | $13,800 |
| Group life & LTD premiums | $1,362 |
| Imputed income (split-dollar) | $12,360 |
| Total “All Other Comp” | $63,728 |
Performance Compensation
| Annual Incentive Plan (2024) | Weight | Threshold | Target | Maximum | Actual 2024 |
|---|---|---|---|---|---|
| Earnings Per Share | 50% | $4.20 | $4.34 | $4.40 | $4.16 |
| Loan Growth | 30% | 8% | 10% | 12% | 8.1% |
| Deposit Growth | 20% | 7% | 9% | 11% | 2.0% |
| Credit Quality Modifier (NPAs/Total Assets) | Reductions at 1.50%, 1.75%, 2.00% | — | — | — | 0.34% (no reduction) |
| Target & Outcomes (2024) | Value |
|---|---|
| Target bonus % of salary | 105% |
| Target award ($) | $783,300 |
| Discretionary bonus ($) | $375,455 (Board discretion due to industry headwinds) |
| Non‑equity incentive paid ($) | $124,545 |
| Total 2024 “award” counted in plan reporting ($) | $500,000; 63.8% of target; 67.0% of base salary |
| Long-Term Equity (2024 grants) | Quantity | Grant-Date Value ($) | Vesting |
|---|---|---|---|
| Time-based RS | 5,744 | $391,650 | 1/3 per year on first 3 anniversaries |
| Performance Shares (target) | 5,786 | $391,650 | 3-year TSR vs 2024 peer group (35th%=50%, 50th%=100%, 75th%=150%) |
Additional LTI context:
- 2022 performance shares earned at 150% (Company TSR at 100th percentile vs 2022 peer group); issued 12,399 shares to Broughton in Jan 2024 .
- As of Dec 31, 2024, TSR tracking at 100th percentile for 2024 performance period (if maintained → 150% of target PS) and 90th percentile for 2023 PS (if maintained → 150%) .
Multi-Year Compensation Summary (CEO)
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $700,000 | $721,000 | $746,000 |
| Bonus (discretionary) | $67,500 | $264,968 | $375,455 |
| Stock awards (grant-date fair value) | $691,000 | $757,050 | $783,300 |
| Non‑equity incentive plan comp | $1,102,500 | $340,673 | $124,545 |
| All other compensation | $51,554 | $56,297 | $63,728 |
| Total | $2,612,554 | $2,139,984 | $2,093,028 |
Pay versus performance highlights:
- PEO Compensation Actually Paid (CAP) 2024: $2,903,059; peer group TSR benchmark uses KBW Nasdaq Regional Bank Index .
Equity Ownership & Alignment
| Beneficial Ownership (as of Mar 26, 2025) | Shares | % Outstanding |
|---|---|---|
| Thomas A. Broughton, III | 797,996 | 1.5% |
Footnotes and alignment signals:
- Includes 55,138 shares owned by spouse; 325,366 shares in a GRAT with power of substitution; excludes 190,000 shares (TAB2, LLC) and 300,000 shares (TAB3, LLC) managed by a third party; Broughton disclaims beneficial ownership of spouse’s shares .
- Company has no formal ownership guidelines given high insider ownership; CEO held Company stock valued at over 90× his 2024 base salary (market price Dec 31, 2024) .
- Hedging is prohibited; pledging requires pre-approval by Insider Trading Compliance Officer; limited pledging may be permitted due to concentrated insider ownership . No pledging disclosed for Broughton in footnotes; some directors disclosed pledges .
| Outstanding Unvested/Unearned Equity (12/31/2024) | Quantity | Market/Payout Value ($) |
|---|---|---|
| Unvested RS (2024 grant) | 5,744 | $486,747 |
| Unvested RS (2023 grant unvested portion) | 3,441 | $291,562 |
| Unvested RS (2022 grant unvested portion) | 1,447 | $122,619 |
| PS (2024 performance period, at max assumption) | 8,652 | $733,171 |
| PS (2023 performance period, at max assumption) | 8,078 | $684,530 |
| PS (2022 performance period issued) | 4,569 | $389,465 |
Options: Company currently does not grant stock options; none outstanding for Broughton .
Employment Terms
| Provision | Terms |
|---|---|
| Change-in-Control Agreements | Double-trigger; Protected Period 2 years post-CIC . |
| Cash severance multiple | 2.99× (salary + 3‑yr avg cash bonus) for CEO . |
| COBRA benefit | Lump sum equal to 18 months premiums . |
| Pro‑rata bonus | For year of termination . |
| Non‑compete | 6 months within 60‑mile radius of any Company office . |
| Non‑solicit | 1 year (employees and customers) . |
| Equity acceleration | RS fully vests on CIC; PS vests at target pro‑rated by service days in performance period . |
| Tax gross‑ups | None; “best‑net” cutback if beneficial . |
| Evergreen term | Initial term to Dec 31, 2025; auto‑renews in 5‑year increments unless notice by June 30 of final year . |
| Estimated Payments (CEO) | Amount ($) |
|---|---|
| Voluntary retirement (performance shares per agreements) | $1,087,920 |
| Death | $4,988,876 (incl. $3,000,000 split-dollar) |
| Disability | $1,988,876 |
| CIC termination without cause/for good reason – Cash severance | $5,659,510 |
| CIC termination – Unvested equity (RS full; PS at target pro-rated) | $1,736,464 |
| CIC termination – Other benefits (COBRA) | $39,636 |
| CIC termination – Total | $7,435,610 |
Clawback: Policy adopted per SEC Rule 10D‑1 and NYSE listing requirements; recovery of incentive comp for restatements across 3 prior fiscal years .
Insider Trading Policy: Blackout windows, preclearance, hedging/derivative prohibitions, limited pledging approvals, 10b5‑1 plan governance .
Board Governance
- Board leadership: Combined Chairman & CEO (Broughton); Lead Independent Director (James J. Filler) with specified duties and executive sessions; three standing committees (Audit; Compensation; Corporate Governance & Nominations) are fully independent, and Broughton serves on none .
- Independence: 6 of 7 directors independent; Broughton is an inside director .
- Meetings: Board held eight meetings in 2024; all directors attended at least 75% of meetings; all attended the 2024 annual meeting .
- Director compensation: Non-employee directors receive cash retainers and annual RS grants (one-year vest); Broughton not separately compensated as director .
Committee chairs and roles:
- Audit: Chair Irma L. Tuder; cybersecurity oversight .
- Compensation: Chair Hatton C.V. Smith; oversees Clawback, succession planning, and uses Aon as consultant (fees ≤$120k; no conflicts) .
- Corporate Governance & Nominations: Chair J. Richard Cashio; director qualification/education .
Dual-role implications:
- Combined Chair/CEO balanced by Lead Independent Director, independent committees, monthly Bank loan committee meetings including all directors; Board cites enhanced alignment, consistent strategy communication, and rapid market response under CEO’s leadership .
Compensation Peer Group (2024)
| Company | State |
|---|---|
| Bank OZK | AR |
| Ameris Bancorp | GA |
| Atlantic Union Bankshares | VA |
| Independent Bank Group | TX |
| Trustmark Corporation | MS |
| Wesbanco, Inc. | WV |
| First Financial Bancorp | OH |
| TowneBank | VA |
| International Bancshares | TX |
| WSFS Financial | DE |
| Provident Financial Services | NJ |
| Sandy Spring Bancorp | MD |
| First Busey Corporation | IL |
| Enterprise Financial Services | MO |
| First Financial Bankshares | TX |
| Eagle Bancorp | MD |
| Veritex Holdings | TX |
| First Foundation | TX |
| Renasant Corporation | MS |
| First Merchants Corporation | IN |
| Seacoast Banking | FL |
| Stellar Bancorp | TX |
Peer selection criteria: assets $10–$30B, commercial lending focus, geography (excludes Mountain Pacific/Northeast), business model compatibility . Committee uses peer median ranges to inform but not target pay levels .
Say‑On‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval ~97.3% (excluding broker non-votes); committee made no significant changes based solely on the vote .
- The Company expects annual say‑on‑pay votes per 2023 frequency recommendation .
Performance & Track Record
| 2024 Result | Value | YoY |
|---|---|---|
| Net income to common ($M) | $227.2 | +9.9% |
| Diluted EPS ($) | $4.16 | +9.8% |
| Ending loans ($B) | $12.6 | +8.1% |
| Ending deposits ($B) | $13.5 | +2.0% |
| Net interest income ($M) | $446.7 | +8.7% |
| Net interest margin (%) | 2.82% | +1 bp |
Management commentary notes intentional deposit rationalization, FDIC special assessments, hurricane reserves, and industry headwinds impacting EPS/Deposits while loan growth materially outperformed industry averages .
Related Party Transactions
Ordinary course banking transactions with directors/officers on market terms; aggregate related indebtedness $42.4M (2.6% of total equity) at Dec 31, 2024; no past due/nonaccrual/ TDRs disclosed .
Equity Grant Timing & Policies
- Equity grants typically occur in Q1 following year-end; no use of MNPI to time grants .
- Company prohibits hedging and derivative transactions, restricts pledging with compliance approval, and enforces trading windows/blackouts and preclearance .
Risk Indicators
- Combined Chair/CEO structure mitigated via strong lead independent director and independent committees .
- CFO transitions in 2024 (Pressley resigned Oct 31, 2024; interim CFO Woodie; new CFO Sparacio Mar 3, 2025) . Company maintains robust internal control certifications and oversight (SOX 302/906) .
- No CEO pledging disclosed; policy permits limited approvals—monitor for future Form 4s .
Investment Implications
- Pay-for-performance alignment: 2024 annual incentive paid well below target due to EPS/Deposit shortfalls despite outperformance in loan growth; committee used discretionary bonuses to recognize extraordinary industry conditions. Long-term incentives are balanced 50/50 RS/PS with multi-year TSR rigor and negative TSR guardrail, and recent PS payouts/track confirm strong TSR performance .
- Retention risk: Significant vested/unvested equity and CIC protections (double-trigger 2.99× cash, pro‑rated PS vesting, no gross‑ups) reduce flight risk; non-compete/non-solicit provide post-termination protection .
- Alignment and trading signals: High insider ownership (CEO ~1.5% beneficially, stock value over 90× salary) and hedging prohibitions support alignment; limited pledging allowed but not disclosed for CEO—ongoing monitoring recommended .
- Governance: Combined Chair/CEO role offset by lead independent director, independent committees, and frequent Board/loan committee engagement; strong say‑on‑pay support suggests shareholder confidence in compensation structure .
- Performance outlook: 2024 fundamentals resilient (loan growth, NIM stability), with deposit rationalization and industry assessments weighing on EPS; TSR outperformance supports LT equity realization potential if maintained .