James M. Burke
About James M. Burke
James M. Burke, age 56, is President, CEO, and a Class II Director of Shore Bancshares, Inc. and Shore United Bank, appointed effective July 1, 2023 following the merger with The Community Financial Corporation; he has over 30 years of banking experience and holds a BA from High Point University, is a Maryland Bankers School graduate, completed East Carolina’s Advanced School of Commercial Lending, and attended Harvard Business School’s Program on Negotiation . During his tenure, the company reported Net Income of $43,889 in 2024 vs. $11,228 in 2023 and $31,177 in 2022, and the value of a hypothetical $100 investment in SHBI stock stood at $106.80 at 12/31/2024 vs. $82.09 at 12/31/2023 and $100.40 at 12/31/2022, reflecting merger integration and subsequent performance dynamics . He currently serves on the Board of the Federal Home Loan Bank of Atlanta and previously chaired the boards of University of Maryland Charles Regional Medical Center and St. Mary’s Ryken High School; he is also a Trustee of Historic Sotterley .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Community Financial Corporation | President & CEO; Director | Prior to Jul-1-2023 | Led Community Financial/Community Bank of the Chesapeake prior to merger; provided strategic leadership and operational expertise brought to SHBI post-merger |
| Community Bank of the Chesapeake | President & CEO; Director | Prior to Jul-1-2023 | Bank leadership through pre-merger period; operational continuity into merged entity |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Federal Home Loan Bank of Atlanta | Director | Current | Governance and financial expertise in a systemically important housing finance institution |
| University of Maryland Charles Regional Medical Center | Former Chairman | Past | Community leadership; board oversight |
| St. Mary’s Ryken High School | Former Chairman | Past | Education governance; board leadership |
| Historic Sotterley | Trustee | Current/Past | Civic engagement |
Fixed Compensation
| Year | Base Salary ($) | Notes |
|---|---|---|
| 2023 | 247,200 | Actual paid post-merger period (Jul-1 to Dec-31, 2023) |
| 2024 | 635,600 | Annual salary; moved to competitive post-merger levels |
2024 base salary increase vs 2023 salary rate:
| Executive | 2024 Salary ($) | 2023 Salary ($) | % Increase |
|---|---|---|---|
| James M. Burke | 635,600 | 535,600 | 18.67% |
2024 perquisites and other:
| Item | Amount ($) |
|---|---|
| Dividends on unvested restricted stock | 20,057 |
| Automobile | 4,456 |
| Club dues | 2,654 |
| Group term life benefit | 1,875 |
| Other | 1,246 |
Performance Compensation
2024 Short-Term Incentive Program (STIP) design and outcomes:
| Executive | STIP Target (% of Salary) | Target ($) | Awarded (% of Salary) | Awarded ($) |
|---|---|---|---|---|
| James M. Burke | 30.00% | 190,680 | 9.71% | 61,704 |
2024 STIP performance scorecard:
| Performance Factor | Threshold | Target | Stretch | Actual |
|---|---|---|---|---|
| PTPP ROAA | 1.30% | 1.42% | 1.50% | 1.08% |
| Efficiency Ratio | 63.00% | 59.86% | 56.00% | 68.54% |
| Avg NIB Deposits / Avg Retail Deposits | 25.00% | 27.50% | 30.00% | 28.09% |
| Net Interest Margin | 3.10% | 3.18% | 3.25% | 3.10% |
2024 Long-Term Incentive Program (LTIP):
| Component | Weight (% of Salary) | Units | Performance Measures | Performance Goals |
|---|---|---|---|---|
| RSUs (time-based) | 25.00% | 14,037 | n/a | Vest ratably over 3 years beginning Mar-7-2025 |
| PSUs (performance-contingent) | 25.00% | 14,037 (target) | Relative ROAA (50%), ROAE (50%) vs 94-bank peer group | 25th pct = 50% payout; 50th pct = 100%; 75th pct = 150%; measured over 2024–2026 |
2024 total stock awards value for Burke: $317,798 (aggregate grant-date fair value; includes 2024 RSUs and PSUs) . 2024 non-equity incentive plan compensation: $61,704 (cash STIP payout) . 2024 nonqualified deferred compensation earnings: $111,764 (above-market plan earnings + change in SERP present value) .
Equity Ownership & Alignment
Beneficial ownership:
| As of | Shares Beneficially Owned | % of Outstanding | Notes |
|---|---|---|---|
| Apr-1-2024 | 69,933 | * (<1%) | Includes ESOP shares (5,708) with voting but not investment power |
| Apr-1-2025 | 85,264 | * (<1%) | Includes ESOP shares (5,708) with voting but not investment power |
Executive stock ownership and trading policies:
- CEO stock ownership guideline: 2x base salary; 100% retention of net shares until guideline met .
- Anti-hedging and pledging: Short-sales and option writing prohibited; hedging discouraged and subject to compliance officer review .
- Clawback: Three-year lookback for restatements; recovery of excess incentive compensation without fault requirement .
Outstanding equity and vesting schedule (Burke; values at $15.85 on 12/31/2024):
| Grant Date | Units Unvested (#) | Market Value ($) | Vesting/Performance Terms |
|---|---|---|---|
| Feb-10-2022 | 596 | 9,447 | Time-based; vest in 3 equal installments beginning Feb-10-2023 |
| Feb-10-2022 (Perf → RSU) | 1,788 | 28,340 | Converted PSUs (2022–2024) vest in full Feb-10-2025 |
| Mar-06-2023 | 3,129 | 49,595 | Time-based; vest in 3 equal installments beginning Mar-06-2024 |
| Mar-06-2023 (Perf → RSU) | 4,695 | 74,416 | Converted PSUs (2023–2025) vest in full Mar-06-2026 |
| Jul-01-2023 (Merger Retention RSUs) | 6,705 | 106,274 | Vest in two equal installments beginning Jul-01-2024 (next tranche Jul-01-2025) |
| Mar-07-2024 (RSUs) | 14,037 | 222,486 | Time-based; vest in 3 equal installments beginning Mar-07-2025 |
| Mar-07-2024 (PSUs) | 14,037 | 222,486 | Performance period 2024–2026; payout 50%/100%/150% by relative ROAA/ROAE |
Employment Terms
| Provision | Terms |
|---|---|
| Employment Agreement | Provides salary, benefits participation, incentives, and fringe benefits; governs termination scenarios |
| Severance – Without Cause | Lump sum = 3x base salary + 3x most recent annual incentive; plus 36× monthly COBRA premium equivalent |
| Change in Control – Double Trigger | Same severance as above if terminated without cause or for “good reason” within 12 months of a change in control |
| Section 280G Treatment | “Best net benefits” cut/no-cut methodology; reduce unless full payment yields ≥$50,000 higher after-tax benefit |
| Salary Continuation Agreement (SCA) | Non-qualified plan: $101,000 annual benefit for 15 years at/after age 65; reduced if early retirement; change-in-control annual benefit ranges $66,713–$101,000 if terminated within 12 months before age 65; disability annual benefit $87,873–$101,000 starting at age 65 |
| Community SERPs (assumed) | Annual retirement benefit of $77,434 (Burke) paid for 15 years at 65; change-in-control feature adds 36 months of service credit and accelerates if separation within 24 months; subject to 280G reduction unless ≥$50,000 after-tax advantage to full payment |
| Split Dollar Life Insurance | Pre-retirement benefit up to $500,000 (net amount at risk); post-retirement benefit up to $100,000 (net amount at risk) |
| Clawback Policy | Recovery of incentive compensation tied to restatements; 3-year lookback; administered by Compensation Committee |
Board Governance
- Dual-role implications: Burke is CEO and director; Board separates Chair and CEO roles (Chair: Alan J. Hyatt; CEO: James M. Burke), supporting independent oversight and executive session practices . The Board determined Burke is not independent; a majority of directors are independent under Nasdaq rules .
- Committee roles: Compensation, Governance, and Board Risk Oversight Committees are composed of independent directors; Burke is not listed as a committee member, reinforcing separation between management and board oversight .
- Meeting cadence and independence: Board held seven meetings in 2024; independent directors met five times in executive session without management .
- Say-on-Pay: Strong shareholder support with 94.44% approval in 2024 and 88.36% in 2023, endorsing pay programs and governance approach .
Multi-Year Performance Context
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Value of $100 Investment (TSR) ($) | 100.40 | 82.09 | 106.80 |
| Net Income ($) | 31,177 | 11,228 | 43,889 |
Compensation Structure Analysis
- Cash vs equity mix: 2024 included $635,600 base salary and $61,704 cash STIP payout, with $317,798 in grant-date fair value of equity (balanced RSU/PSU), aligning long-term incentives with peer-relative ROAA/ROAE .
- Post-merger equity conversion: Pre-merger performance awards were converted to time-based RSUs at target upon merger effective date (standard practice in transactions), which reduces performance risk on those legacy tranches; new 2024 PSUs retain rigorous relative metrics .
- Target setting and outcomes: 2024 STIP payout was below target due to weaker PTPP ROAA and efficiency ratio vs plan, demonstrating pay-for-performance governance; the Committee retains downward discretion and risk-balancing features .
- Peer benchmarking: Compensation Committee used Aon McLagan peer review to adjust salary levels post-merger; CEO salary rate increased 18.67% in 2024 vs 2023, reflecting larger company scope .
Equity Ownership & Director Compensation (for Board service context)
- Director stock ownership guidelines: Non-employee directors must hold ≥5× annual cash retainer; all directors are in compliance or within the 5-year window; retainer and equity grant structures are transparent (Burke, as CEO, is covered by executive policy rather than director policy) .
Investment Implications
- Alignment: Strong governance with separated Chair/CEO roles, independent committees, clawback policy, anti-hedging/pledging provisions, and executive stock ownership requirements supports investor alignment; pay outcomes (sub-target STIP in 2024) tie compensation to financial performance .
- Retention vs flexibility: Robust severance/change-in-control economics (3× base and bonus plus COBRA equivalent) and multiple retirement programs (SCA and SERPs) reduce near-term retention risk but increase potential change-in-control costs; 280G “best net benefits” mitigates excise tax inefficiency .
- Selling pressure and vesting calendar: Upcoming vest events (Feb-10-2025 converted RSUs; Mar-07-2025 RSU tranche; Jul-01-2025 merger-retention RSU tranche) could create episodic liquidity events; anti-hedging/pledging policy reduces misalignment risk, but monitoring Form 4 filings around these dates is prudent .
- Performance trajectory: Post-merger, 2024 Net Income improved and TSR recovered vs 2023 levels; 2024 PSUs measured on peer-relative ROAA/ROAE through 2026 provide medium-term alignment and performance leverage .
- Equity plan capacity: A new 2025 Equity Incentive Plan is slated to replace the 2016 plan, enabling continued equity-based compensation; the plan includes governance best practices (no repricing, minimum one-year vesting, director limits) and reserves 1,000,000 shares plus remaining prior-plan capacity (or 1,073,967 shares reserved per board communication), which investors should monitor for dilution and grant pacing .