David L. Payne
WESTAMERICA BANCORPORATIONAbout David L. Payne
David L. Payne (age 69) is Chairman, President & CEO of Westamerica Bancorporation and Westamerica Bank; he was appointed Chairman in 1988, CEO in 1989, and has served as a Director since 1984 . Under his leadership, dividends per share rose thirteen-fold, capital levels fifteen-fold, and total assets increased more than 500%; 2024 ROE was 13.8% and net income was $138.6 million . Over the last five fiscal years, an initial $100 investment in WABC stock was worth $109.21 at year-end 2024 versus $128.85 for the NASDAQ Bank Index (CBNK) peer group .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Westamerica Bancorporation | Director | 1984–present | Long-tenured board oversight |
| Westamerica Bancorporation | Chairman of the Board | 1988–present | Led strategy; dividends ↑13x, capital ↑15x; assets ↑500% |
| Westamerica Bancorporation | President & CEO | 1989–present | Drove profitability; ROE 13.8% in 2024; executed multiple M&A deals |
| Westamerica Bank | Chairman, President & CEO | — | Oversees bank operations and regulatory/business development |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Gibson Radio and Publishing (trust-owned) | President & CEO | — | Controls entity holding WABC shares via trust; governance/pledge considerations |
| Family businesses | Printing, publishing, cable TV management | — | External operating experience and information flow considerations |
Fixed Compensation
Multi-year compensation (SCT) – principal executive officer (PEO: David L. Payne):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 371,000 | 371,000 | 371,000 |
| All Other Compensation ($) | 29,021 | 27,701 | 30,658 |
| Total Compensation ($) | 750,021 | 758,701 | 786,658 |
- Base salary represented ~31% of 2024 total compensation (company disclosure) .
Pension payments and present value:
| Pension Agreement (Nonqualified) | Amount |
|---|---|
| Annual Pension ($) | 511,950 (fixed for 20 years; commenced 2010) |
| Present Value of Accumulated Benefit ($) | 2,236,940 (discount rate 5.20%) |
| Payments During FY 2024 ($) | 511,950 |
Performance Compensation
2024 incentive design and outcomes:
| Component | Weighting | Target | Adjusted Actual | Payout | Vesting/Notes |
|---|---|---|---|---|---|
| Corporate performance (composite) | 80% of CEO cash bonus | 100% | 114% (ROE 13.90% vs 13.84%; ROA 2.17% vs 2.14%; EPS $5.16 vs $5.13; efficiency ratio 35.6% vs 36.3%; quality/control metrics met) | — | Metrics span profitability, quality, control |
| Individual performance | 20% of CEO cash bonus | — | Committee-set composite corporate+individual level 110% | — | CEO individual goals disclosed; committee discretion applied |
| Cash incentive (non-equity) | — | $350,000 | Composite 110% | $385,000 | Paid for FY 2024 performance |
| Equity awards (RPS/NQSO) | — | — | — | — | CEO did not receive equity grants in recent years; no vesting in 2024 |
Option exercises and stock vested (FY 2024):
| Name | Option Shares Exercised | Value on Exercise ($) | Stock Awards Vested (Shares) | Value on Vesting ($) |
|---|---|---|---|---|
| David L. Payne | — | — | — | — |
Long-term plan mechanics:
- NQSO grants vest 1/3 annually over 3 years; 10-year term; exercise price ≥ FMV; no repricing allowed .
- RPS awards vest after 3 years if multi-metric performance thresholds met (EPS, ROA, ROE differential vs industry, NPA, efficiency ratio) .
Equity Ownership & Alignment
Beneficial ownership as of March 5, 2025:
| Category | Shares | Percent of Class |
|---|---|---|
| Sole voting & investment power | 772,707 | — |
| Shared voting & investment power | 356,733 | — |
| Total beneficial ownership | 1,129,440 | 4.2% |
Additional alignment/risks:
- Pledged shares: 84,439 shares pledged by a family trust of which Mr. Payne is sole trustee; pledge to Gibson Radio & Publishing (trust-controlled); company notes no change to beneficial or pecuniary interest upon foreclosure due to control alignment .
- Anti-hedging/anti-pledging policy: prohibits short sales, derivatives, and hedging arrangements for directors and executive officers .
- Options/RPS outstanding subject to CIC acceleration: CEO has $0 value subject to CIC acceleration (no unvested options/RPS) .
Employment Terms
| Term | Detail |
|---|---|
| Employment contract | None; executives serve at-will (per 2022 proxy) |
| Severance (general plan) | Six weeks’ pay per year of service up to one year of base salary; CEO eligible for one year; lump sum or semi-monthly; subject to 409A |
| Change-in-control (CIC) equity | Unvested NQSOs and RPS immediately vest upon CIC; CEO’s accelerated vesting value: $0 |
| CIC definition | Beneficial owner >50% voting power; unapproved board majority change; certain mergers; liquidation/dissolution plan approved |
| Clawback | Adopted 2013; revised Oct 2023 to comply with NASDAQ; applies to materially inaccurate results or misconduct; also embedded in 2019 plan |
| Related party loans | Employee mortgage program: CEO outstanding $226,606 at 6.875% YE 2024; made on substantially same terms as non-affiliates |
Board Governance
- Board service: Director since 1984; Chairman since 1988; CEO since 1989 .
- Committee roles: Chair of Executive Committee; member of Compliance Committee .
- Independence: Not independent (officer of company and bank) ; seven of eight directors are independent .
- Leadership structure: Combined Chairman/CEO deemed effective given company size and experienced team; mitigated by strong Lead Independent Director (Mr. Sylvester) with defined duties and independent committee chairs .
- Meetings/attendance: Board met nine times in 2024; all directors attended ≥75% of board and committee meetings; annual meeting attendance expected and met .
- Executive sessions: Non-management directors meet at least four times annually without Chairman/CEO .
Committee membership snapshot (2024):
| Director | Executive | Audit | Compensation | Loan & Investment | Nominating | Compliance |
|---|---|---|---|---|---|---|
| David L. Payne | Chair | — | — | — | — | Member |
Director Compensation
- Non-employee directors: $22,000 annual retainer; $1,200 per board meeting; $600 per committee meeting; $250 extra per committee meeting for chair; reimbursed expenses .
- CEO: Receives no compensation for director service (compensated solely as an employee) .
Compensation Structure Analysis
- Pay mix: Base salaries are limited; higher emphasis on at-risk incentive pay; base = ~31% of total for CEO in 2024 .
- Equity vs options: CEO has not received equity awards in recent years; long-term incentives primarily granted to other executives; options cannot be repriced; exercise price ≥ FMV .
- Performance goals: Multi-factor corporate objectives spanning profitability (ROE, ROA, EPS), quality (NPA, classified loans, net losses), and control (efficiency ratio, audit results); thresholds set at 75%/100%/150% credit for achievement levels .
- Discretion: Compensation Committee exercised judgment adjusting actuals for operating environment before determining payouts (2024 corporate performance set at 114%) .
- Say-on-pay support: 99.0% approval at last vote, reflecting shareholder alignment perception .
Performance & Track Record
- Strategic execution: Led eleven acquisitions since 1992 (e.g., John Muir National Bank, Napa Valley Bancorporation, PV Financial, North Bay Bancorp, ValliCorp, County Bank, Sonoma Valley Bank), contributing to sustained asset and capital growth .
- Financial performance: 2024 ROE 13.8%; five-year TSR trails peer index; net income history disclosed in pay-versus-performance table .
- Program outcomes: RPS awards vest upon three-year objectives met; 2019 RPS vested with multiple “outstanding” targets achieved (illustrative of program rigor) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Ownership guidelines | Not disclosed in proxy materials — |
| Compliance status | Not disclosed in proxy materials — |
| Hedging policy | Prohibits shorting, options/derivatives, and hedging by directors/executives |
| Pledging | 84,439 shares pledged by trust; company asserts no change in beneficial/pecuniary interest upon foreclosure due to control alignment |
Related Party Transactions & Red Flags
- Pledging of shares by trust controlled by CEO (84,439 shares) introduces potential collateral-related risk; mitigant claimed via common control but remains a governance sensitivity for some investors .
- Combined Chairman/CEO role raises independence questions; mitigated by Lead Independent Director and independent committee structures .
- Insider trading policy includes anti-hedging; Section 16 compliance reported with one late Form 4 for another officer, none cited for CEO .
Compensation Committee Analysis
- Composition: Solely independent directors; chaired by Dr. Melanie Martella Chiesa; charter reaffirmed January 2025 .
- Consultants: Authority to retain advisors; committee has not retained outside compensation consultants but may do so as needed .
- Plan features: 2019 plan includes clawback; prohibits option repricing; shares limits; timing of grants aligned with January post-earnings disclosure to avoid informational advantages .
Say-on-Pay & Shareholder Feedback
- Frequency: Annual say-on-pay .
- Result: 99.0% support at the most recent vote, indicating broad shareholder endorsement of pay practices .
Investment Implications
- Alignment: CEO’s substantial beneficial ownership (4.2%) supports shareholder alignment; absence of ongoing equity awards and an anti-hedging policy reduce near-term sell pressure, but a trust-level pledge of 84,439 shares is a governance flag to monitor .
- Incentive rigor: Cash bonus tied to multi-factor profitability/quality/control metrics with capped payouts (150% max) suggests disciplined risk management; committee-adjusted actuals reflect pragmatic oversight in volatile banking environments .
- Retention economics: No employment contract; severance limited to one year’s salary; CIC accelerates equity (CEO currently has no unvested equity), reducing parachute risk; fixed pension ($511,950 annually through 2029) is predictable and not performance-based .
- Governance: Combined Chair/CEO structure persists; mitigants include strong Lead Independent Director, independent committees, executive sessions, and high say-on-pay support—adequate but not ideal for some governance-focused investors .
- Trading signals: Watch for changes to trust pledging arrangements or any new equity awards to CEO; current compensation stability and anti-hedging constraints limit opportunistic selling, while sizable personal ownership may discourage dilutive actions .