J. Chris Verenes
About J. Chris Verenes
J. Chris Verenes is Chief Executive Officer and Director of Security Federal Corporation and Chairman/CEO of Security Federal Bank; he has held the Security Federal CEO role since January 1, 2012 and the Bank Chairman/CEO roles since January 1, 2011. He is age 68 as of December 31, 2024, with prior leadership roles in banking and government operations management that emphasize strategic planning and execution . Verenes’ pay-versus-performance disclosure shows cumulative TSR on a $100 investment of $81.52 (2022), $75.32 (2023), and $90.90 (2024), alongside net income of $10.228 million (2022), $10.190 million (2023), and $8.843 million (2024) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Security Federal Corporation | Chief Executive Officer and Director | Since Jan 1, 2012 | Top-line leadership; strategy and performance accountability |
| Security Federal Bank | Chairman of the Board and Chief Executive Officer | Since Jan 1, 2011 | Chairs key Bank committees; credit and risk oversight |
| Security Federal Corporation | President | 2012–June 2014 | Transition management and corporate integration |
| Security Federal Bank | President | 2004–2011 | Operational leadership; lending/branch performance |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Washington Group International (now part of Amentum) | Director of Planning & Administration | 2001–Jan 2004 | DOE site operations planning and oversight |
| Washington Group International | Chief of Staff | 2001 | Executive coordination and strategy deployment |
| Washington Group International | Director of Strategic Programs (business unit) | 2000–2001 | Program strategy and business development |
| Washington Group International | Deputy Manager of Business Development | 1996–2000 | Growth initiatives and pipeline management |
| Riegel Textile Corporation | Controller | Not disclosed | Financial controls and reporting |
| Control Data and Business and Technology Center | Director | Not disclosed | Technology/business oversight |
| South Carolina Democratic Party | Executive Director | Not disclosed | Organizational leadership |
Board Governance
- Board service: Director of Security Federal Corporation; also Chairman/CEO of Security Federal Bank; nominated for a new 3-year term expiring 2028 .
- Committee roles: Security Federal Corp Executive Committee member; Bank Executive Committee Chair; Bank Loan Committee Chair; Bank Trust Committee Chair; Bank Investment Committee Chair .
- Independence: Not independent due to executive role; Board has a separate non-executive Chairman (Timothy W. Simmons), mitigating CEO/Chair combination risk at the holding company level; Verenes is Chairman at the Bank .
- Attendance: In 2024, no director attended fewer than 75% of Board/committee meetings except Mr. Clyburn (excused), indicating generally strong attendance .
- Structure: Separate Chairman and CEO at the holding company; Board explicitly prefers a non-executive Chairman given current circumstances .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 410,000 | 431,000 |
| All Other Compensation ($) | 44,550 | 47,222 |
| Total ($) | 506,158 | 517,921 |
| All Other Compensation Breakdown | 2023 | 2024 |
| Directors’ Fees ($) | 33,000 | 33,000 |
| 401(k) Contribution ($) | 10,350 | 10,350 |
| Life Insurance Premium ($) | 146 | 146 |
| Country Club Dues ($) | 1,054 | 3,726 |
Notes:
- Directors of Security Federal are compensated by the Bank; standard director fees include monthly Board and committee amounts, though Verenes and Lindburg do not receive Executive Committee fees at the Bank .
Performance Compensation
- Incentive Plan: Senior Management Incentive Compensation Plan emphasizes bank performance via key operating ratios and individual performance adjustments; participation set annually by Board .
- 2024 result: Incentives required the Bank to meet a predefined minimum net operating income; minimum was not met, so no annual cash incentive payments were made in 2025 for 2024 performance .
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Net Operating Income (threshold requirement) | Not disclosed | Predefined minimum | Below minimum | $0 | Not applicable |
Equity Awards:
- Outstanding equity awards: None for named executive officers at 12/31/2024; company does not currently grant stock options or similar instruments .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (shares) | 36,115 (includes 5,300 held jointly with spouse) |
| Ownership (% of outstanding) | 1.13% |
| Shares Outstanding (record date) | 3,186,903 (as of March 10, 2025) |
| Vested vs. Unvested Equity | Not disclosed; no outstanding equity awards for NEOs |
| Options – Exercisable/Unexercisable | None outstanding |
| Pledging/Hedging | No pledging disclosures; insider trading policies prohibit short-term trading and govern insider transactions . |
Related-party financial relationships:
- Employee ARM loan: Largest principal during 2024 of $360,514; year-end principal $351,331; principal paid $9,183; interest paid $12,012; rate 3.625% (employee loan program terms; similar disclosure for 2023 at 2.125%) .
Employment Terms
| Agreement | Key Terms | Amounts (as of 12/31/2024) |
|---|---|---|
| Salary Continuation Agreement (May 16, 2006) | Annual supplemental retirement benefit equal to 20% of final pay, paid monthly over 15 years; Verenes has reached age 65 and will receive normal retirement upon separation | Normal/Early/Change-in-Control/Disability/Death: $853,522 / $853,522 / $853,522 / $853,522 / $1,137,302 |
| Change in Control Severance Agreement (Mar 29, 2018; auto-renews unless non-renew notice) | If involuntary termination within 6 months before or 24 months after a change in control: lump sum cash = 2.4x annual base salary (double-trigger); detailed definitions of “change in control” and “involuntary termination” apply | $1,032,000 (based on terms at 12/31/2024) |
| Forfeiture/Restrictive Covenants | Nondistributed benefits forfeited if within 24 months post-termination executive violates noncompete, nondisclosure, or nonsolicit; forfeiture does not apply post-change-in-control |
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Compensation Actually Paid to PEO ($) | 454,603 | 454,550 | 478,222 |
| Average Compensation Actually Paid to non-PEO NEOs ($) | 311,977 | 313,368 | 340,979 |
| TSR – Value of $100 Investment ($) | 81.52 | 75.32 | 90.90 |
| Net Income ($) | 10,228,000 | 10,190,000 | 8,843,000 |
Director Compensation (for context on dual role)
| Item | Detail |
|---|---|
| Director cash fees (Security Federal Bank) | Directors receive $2,750 per month; additional Audit, Trust, Investment fees apply; no fees for Bank Compensation or Loan Committees; Verenes does not receive Executive Committee fees . |
| Verenes director fees | $33,000 included in his All Other Compensation for 2024 . |
Compensation Structure Analysis
- Cash vs. equity: Compensation is primarily cash-based; no outstanding equity awards, and company does not currently grant new options or similar awards—reduces equity-driven selling pressure but weakens long-term equity alignment unless offset by personal share ownership .
- At-risk pay: Annual incentives are contingent on net operating income thresholds; zero payout in 2024 due to threshold miss indicates discipline in pay-for-performance .
- Guaranteed elements: Salary increased from $410,000 to $431,000 year-over-year; retirement benefit accrual continues via salary continuation agreement .
- Change-in-control economics: 2.4x base salary lump sum is moderately protective; double-trigger structure mitigates windfall risk without termination .
Risk Indicators & Red Flags
- Related-party loans: Participation in employee loan program with preferential post-closing rates; program is broadly available and governed under Regulation O; approvals reviewed with oversight; mitigates conflict risk but warrants monitoring .
- Governance: Holding company maintains a non-executive Chair, limiting CEO/Chair concentration at the corporate level; Verenes chairs multiple Bank committees, concentrating operational oversight—appropriate for a bank but increases key-man exposure .
- Equity pledging/hedging: No pledging disclosures; insider trading policy restricts short-term trading; continue to monitor filings for hedging disclosures .
- Say-on-pay: Advisory vote recommended FOR by Board; outcome not provided in this document .
Compensation Committee Analysis
- Security Federal Compensation Committee composition includes both independent and one non-independent member (Simmons); did not meet in 2024 because compensation decisions are primarily made by the Bank’s Compensation Committee (met 10 times), indicating decisions are driven at the operating subsidiary .
- Risk review: Committee determined pay policies are not likely to have a material adverse effect .
Equity Ownership & Alignment – Additional Details
| Ownership Element | Detail |
|---|---|
| Beneficial ownership context | 36,115 shares; 1.13% of outstanding; includes 5,300 jointly with spouse . |
| Group ownership | All directors and executive officers (12 persons) owned 1,159,321 shares (36.38% of outstanding) . |
| Ownership guidelines | Not disclosed . |
Employment & Contracts – Additional Covenants
- Auto-renewal: Change-in-control agreements auto-renew annually unless non-renewal notice is given .
- Non-competition/solicitation: Breach within 24 months post-termination results in forfeiture of nondistributed benefits (not applicable post-change-in-control) .
- Death benefits: Salary continuation and split-dollar life insurance provide additional benefits based on net death proceeds .
Investment Implications
- Alignment: Absence of equity awards and presence of meaningful personal share ownership (1.13%) suggests some alignment, but lack of ongoing equity grants reduces locked-in retention/vesting pressures; director fees are modest vs. base salary .
- Pay-for-performance discipline: Zero incentive payout for 2024 due to threshold miss signals compensation governance discipline; however, lower 2024 net income and volatile TSR highlight execution risk in current operating environment .
- Retention/CoC: The 2.4x CoC multiple and robust salary continuation benefits provide retention security but could create overhang in M&A scenarios; double-trigger mechanics mitigate windfall concerns .
- Governance: Separation of CEO and Chair at the holding company is positive; Verenes’ chair roles across key Bank committees centralize risk oversight and decision-making—effective for responsiveness but increases key-person risk and concentration; monitor succession planning disclosures .
- Related-party loans: Employee loan program participation is standard and regulated, but continued monitoring of insider credit relationships remains prudent for governance risk screening .