Glenn Rust
About Glenn Rust
Glenn W. Rust (age 70) is President and Chief Executive Officer of Virginia National Bankshares Corporation and Virginia National Bank, and has served as a director of the Company since its incorporation in 2013 and of the Bank since 2006. He brings over 50 years of experience in financial services, technology, network systems design, security, corporate restructuring, and government infrastructure analysis; prior to joining the Bank in 2006, he held executive management positions at Texas Commerce Bank, Chemical Bank, J.P. Morgan, Chase, and Sterling Bank, and served as an expert on internet security and banking with the National Infrastructure Advisory Council after 9/11 . The Company’s Pay Versus Performance section links CEO compensation actually paid to cumulative TSR and net income trends; the Compensation Committee assessed Rust’s merger-related efforts and shareholder value contribution when recommending pay in 2023–2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Texas Commerce Bank | Executive management roles | Prior to 2006 | Bank operations leadership and growth experience |
| Chemical Bank | Executive management roles | Prior to 2006 | Large-bank executive experience |
| J.P. Morgan / Chase | Executive management roles | Prior to 2006 | Global financial services expertise |
| Sterling Bank | Executive management roles | Prior to 2006 | Regional banking leadership |
| National Infrastructure Advisory Council | Expert on internet security and banking | Early 2000s (post-9/11) | Security and infrastructure advisory to government |
External Roles
| Organization Type | Role | Years | Strategic Impact |
|---|---|---|---|
| Charitable organizations in Charlottesville, Houston, Washington, D.C. | Board service, advice, strategic counsel | Ongoing (not specifically dated) | Community ties, stakeholder engagement |
Fixed Compensation
Multi-year summary for Glenn W. Rust:
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $500,000 | $500,000 |
| Cash Bonus ($) | $150,000 | $100,000 |
| Stock Awards – Grant Date Fair Value ($) | $274,932 | $325,000 |
| All Other Compensation ($) | $80,830 | $82,824 |
| Total Compensation ($) | $1,005,762 | $1,007,824 |
All Other Compensation Detail:
| Component | 2023 ($) | 2024 ($) |
|---|---|---|
| Company Contributions to 401(k) | $19,800 | $20,625 |
| Club Memberships | $18,632 | $17,299 |
| Group Term Life, Disability, and BOLI | $19,205 | $19,666 |
| Company Vehicle | $14,966 | $15,540 |
| Information Technology Budget | $3,352 | $3,352 |
| Health and Wellness | $1,082 | $1,142 |
| Tax Gross-Ups | $3,793 | $5,200 |
Notes:
- The Company offers 401(k) match (100% of first 6%), health and welfare benefits, split-dollar BOLI arrangements, and limited perquisites (e.g., club memberships, bank-owned automobile) .
- Tax gross-ups relate to imputed income on restricted stock and BOLI premiums .
Performance Compensation
Compensation program characteristics and CEO awards:
| Incentive Type | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Cash Bonus (2023) | Established bank performance metrics and goals; Board assessment of merger-related impact and shareholder value | Discretionary | Not disclosed | Not disclosed | $150,000 | Cash, immediate |
| Cash Bonus (2024) | Established bank performance metrics and goals; Board assessment of merger-related impact and shareholder value | Discretionary | Not disclosed | Not disclosed | $100,000 | Cash, immediate |
| Restricted Stock (2023 grant) | Share price/TSR alignment; ownership mentality | N/A (time-based) | N/A | N/A | 8,400 shares (grant) | Vests in 4 equal annual installments beginning Feb 23, 2023 |
| Restricted Stock (2024 grant) | Share price/TSR alignment; ownership mentality | N/A (time-based) | N/A | N/A | 10,816 shares (grant) | Vests in 4 equal annual installments beginning Mar 27, 2025 |
Outstanding equity awards and vesting schedules (as of 12/31/2024):
| Award | Shares/Units | Exercise Price ($) | Expiration | Vesting Start | Notes |
|---|---|---|---|---|---|
| Stock Options (Grant 1) | 8,400 exercisable | 39.52 | 04/18/2028 | Options vested over 5 years beginning Apr 19, 2019 | Restricted stock from same period vests starting Feb 24, 2022 |
| Stock Options (Grant 2) | 12,000 exercisable | 37.25 | 10/15/2029 | Options vested over 5 years beginning Oct 16, 2020 | Restricted stock vests starting Feb 23, 2023 |
| Stock Options (Grant 3) | 20,800 exercisable; 5,200 unexercisable | 26.00 | 03/24/2030 | Options vest over 5 years beginning Mar 25, 2021 | Restricted stock vests starting Apr 28, 2024 |
| Restricted Stock (Grant A) | 1,257 unvested | — | — | Feb 24, 2022 | Market value $48,017 |
| Restricted Stock (Grant B) | 2,790 unvested | — | — | Feb 23, 2023 | Market value $106,578 |
| Restricted Stock (Grant C) | 6,300 unvested | — | — | Apr 28, 2024 | Market value $240,660 |
| Restricted Stock (Grant D) | 10,816 unvested | — | — | Mar 27, 2025 | Market value $413,171 |
Program design notes:
- Awards under the 2022 Stock Incentive Plan include options, restricted stock, and RSUs, with minimum vesting and clawback provisions; no discounted options; no liberal share recycling .
- In 2024, other NEOs received 9,900 options each with four-year vesting; Rust received restricted stock only in 2023 and 2024 .
Equity Ownership & Alignment
| Ownership Metric | Value | Notes |
|---|---|---|
| Beneficially Owned Shares | 115,758 | 2.13% of outstanding |
| Options Exercisable within 60 days | 46,400 | Included in beneficial ownership methodology |
| Unvested Restricted Stock – Grant A | 1,257; MV $48,017 | Vests annually starting Feb 24, 2022 |
| Unvested Restricted Stock – Grant B | 2,790; MV $106,578 | Vests annually starting Feb 23, 2023 |
| Unvested Restricted Stock – Grant C | 6,300; MV $240,660 | Vests annually starting Apr 28, 2024 |
| Unvested Restricted Stock – Grant D | 10,816; MV $413,171 | Vests annually starting Mar 27, 2025 |
| Hedging/Pledging Policies | No company policy prohibiting hedging or derivative transactions to offset stock declines | Risk indicator |
| Pledged Shares (Rust) | None disclosed for Rust | Other directors have pledged shares (e.g., Adams 16,662; Craig 227,407) |
Ownership guidelines:
- Director/Executive ownership guidelines not disclosed in proxy; directors receive cash retainers and restricted stock; non-employee directors had unvested restricted stock and options as of year-end 2024 .
Employment Terms
- Management Continuity Agreement (amended and restated Oct 23, 2024): Upon a change in control, continued employment for two years with commensurate authority, responsibilities, compensation, and benefits .
- Double-trigger severance economics: If terminated without cause or for good reason within six months before a change in control or during the two-year post-change period, Rust is entitled to a lump sum equal to 2x (base salary at termination + average annual bonus for prior two years + pre-tax salary reduction/deferral amounts in most recent year), up to 18 months continuation of welfare benefits, and a lump sum equal to Company 401(k) contributions for two years prior to termination; reduced as needed to avoid 280G excise tax under IRC §4999 .
- Clawback: Incentive-based compensation subject to clawback as required by law or listing standards and as determined by the Board .
- Plan Term: No awards under the 2022 Stock Incentive Plan may be granted after April 26, 2032 .
Board Governance
- Board Service History: Rust has served as a director of the Bank since 2006 and of the Company since 2013 .
- Committee Roles: Rust, as CEO, is not independent and does not serve on Audit, Compensation, or Corporate Governance Committees; committee memberships are held by independent directors (e.g., Audit chaired by Keyser; Compensation chaired by Adams; Corporate Governance chaired by Frostick) .
- Independence: The Board determined eight of ten directors are independent; Rust is not independent due to his executive role .
- Board Leadership Structure: Non-executive Chairman (William D. Dittmar, Jr.) and Non-executive Vice Chairman (John B. Adams, Jr.), providing separation between CEO and Chair roles, which mitigates dual-role concerns .
- Attendance: The Board met 10 times in 2024; each incumbent director attended at least 75% of Board and committee meetings; nine directors attended the 2024 Annual Meeting .
- Director Compensation: Rust did not receive separate board compensation; non-employee directors received cash retainers and restricted stock awards (e.g., typical $40,045 cash and $44,955 stock in 2024; Dittmar received $39,995 cash and $75,005 stock) .
Compensation Structure Analysis
- Mix and Trend: Rust’s cash bonus declined year-over-year ($150,000 in 2023 to $100,000 in 2024) while equity grant value increased ($274,932 to $325,000), signaling modest shift toward long-term equity alignment .
- Equity Vehicles: Time-based restricted stock vesting over four years; options outstanding from prior grants with 10-year terms and service-based vesting; no discounted options .
- Incentive Determination: CEO bonuses are discretionary and reviewed against established bank performance metrics and merger-related shareholder value impact; no external compensation consultant used in 2023–2024, though surveys inform decisions .
- Clawback/Controls: Plan includes clawback and protective provisions; minimum vesting requirement and no liberal share recycling .
- Perquisites and Gross-Ups: Presence of tax gross-ups on imputed income for restricted stock and BOLI premiums is shareholder-unfriendly; perquisite levels are moderate and disclosed .
Risk Indicators & Red Flags
- Hedging Policy Absence: Company discloses no policy prohibiting hedging/derivative transactions to offset declines in Company stock, which may weaken alignment .
- Tax Gross-Ups: Gross-ups for imputed income on equity/BOLI create optics risk .
- Pledging: No pledging disclosed for Rust; however, significant pledging by certain directors exists (Adams and Craig), indicating broader governance risk environment to monitor .
- Governance Structure: Separation of CEO and Chair roles reduces concentration risk; committees composed of independent directors .
Say-on-Pay & Shareholder Feedback
- 2025 proxy solicitation indicates a vote on named executive compensation with recommended frequency “One Year” on the proxy card; specific prior approval percentages not disclosed in the excerpts reviewed .
Equity Plan Capacity
- As of the 2025 proxy, the 2022 Plan seeks authorization up to 300,000 shares; 28,420 shares were available pre-amendment and 178,420 shares would be available for new awards if approved; maximum annual award limits are 40,000 shares for non-director participants and 10,000 shares for non-employee directors .
Investment Implications
- Alignment and retention: Four-year restricted stock schedules and significant unvested equity create recurring annual vesting events (Feb, Apr, Mar cycles), which can produce incremental selling pressure around vest dates; double-trigger severance at 2x base+bonus and benefits continuation enhances retention post-transaction but increases change-in-control costs .
- Governance balance: Separation of CEO and Chair roles and independent committees are positives; however, absence of hedging restrictions and presence of tax gross-ups are governance headwinds for some investors .
- Pay-for-performance: Discretionary bonuses tied to bank performance and merger-related value creation suggest Board emphasis on qualitative results; equity mix rose in 2024, modestly improving long-term alignment. Monitor Pay Versus Performance disclosures linking CEO compensation actually paid to TSR and net income for trend validation over time .
- Trading signals: Track upcoming vest dates from 2023–2025 grants for potential Form 4 activity; monitor lack of hedging policy and any updates to ownership/pledging disclosures in future proxies .