William (“Billy”) Y. Carroll, Jr.
About William (“Billy”) Y. Carroll, Jr.
William (“Billy”) Y. Carroll, Jr. is President & CEO of SmartFinancial, Inc. and SmartBank, and has served on the Board since 2007; he is 56 years old and previously held roles including Board Member, EVP and CFO at Citizens National Bank in Sevierville, TN . He currently serves as a Director of the Federal Reserve Bank of Atlanta and as Chairman of the Tennessee Bankers Association; prior roles include branch director at the Atlanta Fed’s Nashville Branch and service on multiple community and university organizations . Under his leadership, SMBK’s cumulative TSR turned a $100 investment on Dec 31, 2019 into $139.02 by Dec 31, 2024, outperforming the S&P SmallCap Bank Index’s $132.44 over the same period . For 2024, SmartFinancial reported net income of $36.1 million ($2.14 per diluted share), loan growth of $459.5 million to $3.9 billion, deposit growth of $418.6 million to $4.7 billion, and ROAA of 0.73% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SmartFinancial, Inc. | President & CEO; Director | 2007–present | Positioned SmartBank/SmartFinancial in diverse markets with leadership in management, operations, accounting, and finance . |
| SmartBank | President & CEO; Director | 2007–present | Leads the publicly traded bank subsidiary; experience leading a public company . |
| Citizens National Bank (Sevierville, TN) | EVP, CFO; Board Member | Pre-2007 | Senior finance and board experience in banking prior to founding SmartBank/SmartFinancial roles . |
External Roles
| Organization | Role | Timing |
|---|---|---|
| Federal Reserve Bank of Atlanta | Director | Current |
| Tennessee Bankers Association | Chairman | Current |
| Federal Reserve Bank of Atlanta – Nashville Branch | Branch Director | Previous |
| Great Smoky Mountains Institute at Tremont; UT Haslam College of Business Finance Advisory Council; UT Chancellor’s Associates; other local organizations | Board/advisory roles | Previous |
Fixed Compensation
| Year | Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|
| 2022 | 519,952 | — | 63,318 | 1,011,283 |
| 2023 | 568,685 | — | 68,318 | 1,086,938 |
| 2024 | 602,080 | — | 70,279 | 1,039,830 |
- 2023 “All Other Compensation” detail (illustrative of perquisites): 401k match $13,200; auto allowance $3,822; club memberships $25,000; medical premiums $25,006; group-term life $1,290 .
Performance Compensation
Annual Cash Incentive Plan (CIP) – 2024
- CEO target opportunity: 40% of base salary (threshold 20%; max 80%) .
- 2024 outcome: Target $242,550; Actual $322,211 (132.8% of target) driven by company metrics and individual performance .
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | Payout % |
|---|---|---|---|---|---|---|
| Operating Net Income ($000) | 30.0% | 30,354 | 35,710 | 41,067 | 34,885 | 98% |
| Operating PPNR ROA (%) | 25.0% | 0.86% | 1.01% | 1.16% | 0.99% | 98% |
| NPA/Total Assets (%) | 10.0% | 0.86% | 0.75% | 0.64% | 0.19% | 115% |
| Net Charge-offs/Average Loans (%) | 10.0% | 0.23% | 0.20% | 0.17% | 0.08% | 115% |
| Component | Weight | Achievement | Amount ($) |
|---|---|---|---|
| Company Component (CEO) | 75% | 121.4% | 220,829 |
| Individual Performance Component (CEO) | 25% | 167.2% | 101,382 |
| Total CIP (CEO) | — | — | 322,211 |
Long-Term Incentive Plan (LTIP) – 2024
- Equity vehicle: Restricted stock; 4-year cliff vesting from grant date; grants sized as % of salary (CEO threshold 15%, target 30%, max 60%) .
- 2024 performance earned 66.9% of target; CEO award $121,643 (3,426 shares granted Jan 29, 2025) .
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | Payout % |
|---|---|---|---|---|---|---|
| Operating ROATCE Percentile vs Peers | 20% | 30th | 40th | 50th | 15th | — (below threshold) |
| Tangible Book Value Growth | 40% | 9.31% | 10.95% | 12.59% | 10.07% | 92% |
| Operating EPS (diluted) | 40% | $1.79 | $2.11 | $2.42 | $2.07 | 98% |
| Year | LTIP Target ($) | LTIP Actual ($) | % of Target | Shares Granted (grant date) |
|---|---|---|---|---|
| 2024 | 181,912 | 121,643 | 66.9% | 3,426 (Jan 29, 2025) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/25/2025) | 168,117 shares; <1% of class (based on 17,017,547 shares outstanding incl. 239,010 unvested RS) . |
| Shares pledged | 15,750 shares pledged to secure lines of credit or other indebtedness (potential alignment risk) . |
| Beneficial ownership (3/26/2024) | 156,999 shares; <1% of class (based on 17,056,704 shares outstanding incl. 200,951 unvested RS) . |
Outstanding unvested restricted stock at 12/31/2024 (market value at $30.98 close on 12/31/2024):
| Grant/Tranche | Shares | Market Value ($) | Vesting Date |
|---|---|---|---|
| RS (prior grants) | 6,500 | 201,370 | 01/01/2025 |
| RS | 1,934 | 59,915 | 03/14/2025 |
| RS | 6,500 | 201,370 | 01/01/2026 |
| RS (1/24/2023 grant) | 11,873 | 367,826 | 01/24/2027 |
| RS (1/30/2024 grant, earned for 2023 LTIP) | 1,861 | 57,654 | 01/29/2028 |
Stock vested in 2024:
| Shares vested | Value realized ($) |
|---|---|
| 6,500 | 159,185 |
Policy overlays:
- Hedging and speculative trading by directors and executive officers are prohibited; short-selling and derivatives are banned; trading subject to blackout windows and CFO pre-approval .
- Company maintains an NYSE-compliant clawback policy for erroneously awarded compensation upon a restatement .
- Equity plan treatment on change in control: time-based awards vest; performance-based deemed earned at target unless award terms state otherwise .
Employment Terms
| Term | Detail |
|---|---|
| Agreement date | Employment agreement dated March 9, 2020 . |
| Compensation & perquisites | Initial base salary $470,000 (subject to annual review); annual bonus opportunity; retirement/health benefits; company-owned automobile; $25,000 annual club membership allowance . |
| Term & renewal | Initial two-year term; auto-renews for successive one-year terms unless non-renewal notice ≥60 days before term end . |
| Severance (termination w/o cause or for good reason) | Cash severance equal to 1x base salary, paid over 12 months, plus 12 months COBRA premiums; subject to release and compliance with covenants . |
| Change-in-control severance | If terminated w/o cause or for good reason within 18 months post-CIC: 2.99x (base salary + average of two most recent annual cash bonuses) in lump sum, plus 18 months COBRA premiums (double-trigger) . |
| Restrictive covenants | One-year non-compete and non-solicitation of customers and associates; release of claims required for severance . |
Potential termination and CIC benefits (as of 12/31/2024; stock at $30.98):
| Scenario | Salary ($) | Bonus ($) | Medical ($) | Equity ($) | BOLI ($) | Total ($) |
|---|---|---|---|---|---|---|
| Death | — | — | — | 888,135 | 500,000 | 1,388,135 |
| Disability | — | — | — | 888,135 | — | 888,135 |
| Termination w/o cause or for good reason | 606,375 | — | 26,906 | 593,425 | — | 1,226,706 |
| CIC termination w/o cause or for good reason | 1,813,061 | 682,956 | 40,359 | 888,135 | — | 3,424,511 |
Board Governance
- Role and independence: Carroll, Jr. is President & CEO and a Director since 2007; he is not an independent director (also not independent: Carroll, Sr. and Welborn) .
- Board leadership: Chairman is Wesley M. (“Miller”) Welborn; Vice Chairman is William (“Bill”) Y. Carroll, Sr.; Lead Independent Director is David A. Ogle (executive sessions held, lead independent responsibilities defined) .
- Committees: Audit, Nominating, Corporate Governance, and Human Resources & Compensation are composed of independent directors; committee chairs include Barrett (Audit), Ogle (Nominating; Human Resources & Compensation), Wolpert (Corporate Governance), Tucker (Strategic Oversight) .
- Attendance: In 2024, the Board held 10 meetings (including a two-day strategy retreat); aggregate director attendance was over 93% .
- Director pay: Carroll, Jr. receives no board fees; 2024 director compensation for independents included $32,000 cash retainer and ~$32,000 RS grant, plus committee retainers; 2025 program continued with similar medians and retainer structure (caps per non-employee director $500k; $700k for Chair/Lead Director) .
Compensation Structure Analysis
- Pay mix and changes: CEO’s cash vs equity mix shifted with performance—2024 stock awards recognized ($45,260) were lower than 2023 ($315,000) while non-equity incentive increased to $322,211 on stronger 2024 operating performance relative to goals .
- Performance rigor: 2024 CIP leveraged balanced operating metrics (Operating Net Income, PPNR ROA, credit quality KPIs), with individual performance overlay; 2024 LTIP used ROATCE percentile, TBV growth, and operating EPS, with ROATCE below threshold (no payout) but TBV and EPS near target (92% and 98% respectively) .
- Governance practices: Clawback policy (NYSE compliant); prohibition on hedging/derivatives/short-selling; prohibition on option repricing without shareholder approval; independent compensation consultant (Blanchard Consulting Group) engaged by the Compensation Committee; no tax gross-ups in employment/CIC arrangements .
- Say-on-Pay: 2023 shareholder advisory approval of executive compensation was ~99% for 2022 program, indicating strong investor support .
Equity Ownership & Alignment Considerations
- Skin in the game: 168,117 shares beneficially owned as of 3/25/2025 (<1%); additional unvested RS tranches align multi-year retention via cliff vesting to 2026–2028 .
- Pledging: 15,750 shares are pledged—this is a monitoring point for potential forced selling risk in adverse markets .
- Vesting calendar and supply: 6,500 RS and 1,934 RS vested in early 2025; future vesting in 2026–2028 could add incremental supply; trading constrained by blackout periods and CFO pre-approval under the insider trading policy .
Performance & Track Record
- 2024 operating execution: Net income $36.1M; diluted EPS $2.14; loans +$459.5M to $3.9B; deposits +$418.6M to $4.7B; ROAA 0.73% .
- TSR: 2019–2024 cumulative TSR outperformed the S&P SmallCap Bank Index (SMBK $139.02 vs Index $132.44 on $100 initial investment) .
- CEO pay ratio (context): 2023 CEO pay to median associate pay was ~19:1 .
Compensation & Governance Infrastructure
- Peer group and benchmarking: Compensation Committee used a peer set of 18 southeastern banks (assets $3–10B) with median assets ~$4.5B (2022 YE), advised by BCG; CEO/N.E.O. compensation targeted around median with greater at-risk components for performance .
- Committee independence and process: HR & Compensation Committee composed entirely of independent directors; no delegation of compensation authority to management; independent consultant engaged with no conflicts .
Related Party and Risk Indicators
- Family relationship: Carroll, Jr. (CEO) is the son of William (“Bill”) Y. Carroll, Sr., Vice Chairman of SmartFinancial and SmartBank; both are not independent .
- Related party transactions framework: Corporate Governance Committee approves related-party transactions; disclosed ordinary-course loans to directors/executives and certain related leases (e.g., Ogle family) under market terms .
- Red flags monitored: Share pledging by CEO (15,750 shares); dual role as CEO/Director mitigated by separate Chairman and a Lead Independent Director; hedging ban, clawback, and no option repricing reduce governance risk .
Director Compensation (Board Context)
| Element (2025 program) | Amount |
|---|---|
| Annual Board retainer (cash) | $32,000 |
| Annual RS grant (approx. value) | $32,000 |
| Lead Independent Director retainer | $10,000 |
| Audit Committee member / Chair | $4,000 / $8,000 |
| Nominating Committee member / Chair | $3,000 / $3,000 |
| Corporate Governance Committee member / Chair | $4,000 / $4,000 |
| HR & Compensation Committee member / Chair | $4,000 / $5,000 |
| Strategic Oversight Committee member / Chair | $4,000 / $4,000 |
| Director award cap (annual) | $500,000; $700,000 Chair/Lead |
Note: Carroll, Jr. does not receive director compensation .
Investment Implications
- Alignment and incentives: CEO pay is heavily performance-linked via annual CIP and multi-year RS-based LTIP with objective capital/returns metrics; 2024 outcomes show appropriate downside sensitivity (no payout on ROATCE percentile) and near-target TBV/EPS performance .
- Retention vs selling pressure: Significant unvested RS through 2028 supports retention; early-2025 vesting and a disclosed 15,750-share pledge are the key supply/pressure watchpoints during open windows .
- Governance quality: Separation of Chair and CEO, a defined Lead Independent Director role, independent committees, hedging ban, clawback, and no-repricing provisions are positives; family relationships and the share pledge warrant ongoing monitoring .
- Performance lens: Outperformance of TSR vs small-cap bank index over 2019–2024 and improved 2024 operating metrics underpin pay-for-performance credibility; continued delivery on TBV and EPS drivers in 2025 would likely sustain incentive realizations .