David Nelson
About David Nelson
David D. Nelson (age 64) is President and Chief Executive Officer of West Bancorporation, Inc. and Chair and CEO of West Bank; he has served as a director of both since 2010. Prior to joining on April 1, 2010, he was President of Southeast Minnesota Business Banking and President of Wells Fargo Bank Rochester, with 35+ years in commercial banking; he served on the American Bankers Association Board (2021–2024) and chaired the Iowa Bankers Association (2016–2017) . He is not an independent director under Nasdaq rules; the Company’s Chair and CEO roles are separated, and the Chair is independent .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Wells Fargo Bank Rochester | President | Pre-2010 | Led regional banking operations; background in credit and leadership development . |
| Southeast Minnesota Business Banking (Wells Fargo) | President | Pre-2010 | Commercial banking leadership and customer relationship building . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American Bankers Association | Director; Member, Government Relations Council; Community Bankers Council | 2021–2024 | Industry advocacy and policy engagement . |
| Iowa Bankers Association | Chair; Ex-officio member | 2016–2017; thereafter | State-level industry leadership . |
Board Governance
- Company director since 2010; West Bank director since 2010; not independent due to CEO status .
- Committee service: Only independent directors serve on Audit, Compensation, and Nominating & Corporate Governance; Mr. Nelson does not serve on these. He is listed as a member of a West Bank committee grouping (Directors Loan or Trust) but not as a chair .
- Board operations: Five regular meetings plus one organizational meeting in 2024; all directors attended ≥75% of meetings; independent director executive sessions scheduled at least four times per year .
- Governance highlights: Chair and CEO roles separated; independent Chair; stock ownership requirements for directors; independent compensation consultant used for board pay .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $514,000 | $590,000 | $590,000 |
| Holiday Bonus ($) | $10,280 | $11,800 | $11,800 |
| All Other Compensation ($) | $30,500 | $26,400 | $27,600 |
| Total Compensation ($) | $1,262,648 | $1,303,388 | $1,246,543 |
Notes: The “bonus” is a standard holiday bonus equal to 2% of annual salary paid to all West Bank employees . The Company states executives receive no perquisites .
Performance Compensation
| Component | Metric(s) | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Cash Incentive (2024) | Company and peer performance | Plan-defined | $354,000 target; $236,000 threshold; $472,000 max | Bonuses paid at 101.5% of target for CEO | Based on 2024 results against plan/peers | Cash (for 2024 plan year) |
| Annual Cash Incentive (2023) | Company and peer performance | Plan-defined | Plan target established by committee | CEO payout = 62.9% of base salary (=$371,085) | 62.9% of base salary | Cash (for 2023 plan year) |
| Time RSUs (2024 grant) | Service | 50% of RSUs | 8,500 granted | N/A | Grant-date FV $117,385 | Vests ratably over 5 years on Mar 25, 2025–2029; 50% of vested shares held for 3 years |
| Performance RSUs (2024 grant) | ROAE, Efficiency Ratio, NPA/Assets vs peer group | Equally weighted | Target 5,666; threshold 2,833; max 8,500 | In performance period (2024–2026) | Grant-date FV $117,088 at max | Cliff vest after 3-year period; 50% of vested shares held for 3 years |
| Performance RSUs (2023 grant) | ROAE, Efficiency Ratio, NPA/Assets vs peer group | Equally weighted | 8,500 target PRSUs (CEO) | In performance period; vest Mar 25, 2026 | Market values disclosed at YE 2023 | Cliff vest after 3 years; retention as above |
| Performance Framework | ROAE; Efficiency Ratio; Nonperforming Assets/Assets; relative to frozen peer group | Equal weights | Defined by plan | N/A | N/A | PRSUs vest at end of 3-year period; peer group frozen at grant |
Additional program design:
- Long-term equity awards split 50% time-based RSUs and 50% performance-based RSUs; 3-year post-vesting hold on 50% of covered shares .
- No dividends paid or accumulated on unvested RSUs .
- No single-trigger cash or equity payments in a change in control; no golden parachute tax gross-ups .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Shares Beneficially Owned | 202,051 shares |
| Ownership % of Outstanding | 1.20% (based on 16,832,632 shares) |
| RSUs Vesting within 60 Days (as of Feb 14, 2025) | 16,900 shares underlying RSUs |
| Spouse Trust Holdings | 98,034 shares; Mr. Nelson has sole voting and investment power |
| Stock Ownership Guideline (CEO) | 3x base salary; retention of ≥50% of shares received until compliant |
| Compliance Status | As of Dec 31, 2024, all NEOs held shares in excess of guidelines (two non-employee directors not yet compliant) |
| Hedging/Pledging | Prohibited; “No hedging or pledging of Company stock” |
| RSU Holding Requirement | 50% of vested RSUs must be held for 3 years post-vesting |
Insider selling pressure considerations: RSUs vest annually on March 25; 2025 vest tranche and 16,900 RSUs within 60 days of Feb 14, 2025 indicate settlement near Mar 25, potentially increasing tradable float—but 50% of vested shares must be retained for three years, mitigating near-term selling pressure .
Employment Terms
| Term | Provision |
|---|---|
| Agreement Effective Date | July 23, 2012 |
| Auto-Renewal | Automatically extends 1 year each Jan 1 unless notice of nonrenewal |
| Minimum Annual Salary | $590,000 as of Dec 31, 2024 |
| Severance (no cause/good reason) | 200% of base salary + 3-year average bonus; paid in 24 monthly installments; 18 months medical coverage |
| Severance (Change in Control window) | 300% of base salary + 3-year average bonus; lump sum; 18 months medical coverage; window: 6 months prior to or 2 years post-CoC |
| Non-Compete | 24 months post-termination |
| Non-Solicit | 24 months post-termination |
| 409A/Average Bonus Definitions | Detailed in 2021 8-K; Average Incentive Bonus uses prior 3 years; CoC defined; safe harbor noted |
| Clawback | Enhanced policy effective July 26, 2023; equity awards subject to cancellation/recoupment per law |
| Director Compensation (inside director) | No board compensation during Employment Period; post-employment board service compensated similar to others |
Performance & Track Record
- Tenure: CEO and President since 2010; Chair/CEO of West Bank since 2010 .
- Industry leadership: ABA Board 2021–2024; Iowa Bankers Association chair 2016–2017 .
- Pay ratio context: 2022 CEO total compensation $1,262,648; median employee $72,040; pay ratio ~17.5:1 .
Compensation Structure Analysis
- Mix and risk: Significant at-risk pay via annual cash incentives and PRSUs; three-year holding requirement increases long-term alignment .
- Shift to RSUs: Awards in 2022–2024 are RSUs (time and performance); no stock option awards disclosed in plan-based tables, reducing repricing risk .
- Targets and payouts: 2024 CEO cash incentive target $354,000 with payout at 101.5% of target; 2023 payout equaled 62.9% of base salary ($371,085), evidencing sensitivity to performance vs peers .
- Best practices: No hedging/pledging; no single-trigger CoC payments; no tax gross-ups; independent comp consultant (McLagan) .
Director Compensation (Context)
- Non-employee director program (2024): Company board retainer $22,750; equity award targeted at $32,500; committee retainers; separate West Bank board retainers; RSU grants of 1,945 shares to each non-employee director with 1-year vest and 3-year 50% hold .
- This program does not apply to Mr. Nelson during his Employment Period .
Compensation Peer Group
- Annual incentive and PRSU metrics use Company and peer group performance; PRSU peer group is frozen at grant and measured on ROAE, efficiency ratio, and nonperforming assets ratio, each equally weighted over the three-year period .
Say-on-Pay & Shareholder Feedback
- Annual say-on-pay vote conducted; Proposal 2 at 2025 Annual Meeting seeks approval of 2024 NEO compensation; company engages institutional stockholders and uses independent consultant .
Risk Indicators & Red Flags
- Alignment safeguards: Stock ownership guidelines; 3-year hold on RSUs; clawback policy; independent Chair .
- Share pledging: Prohibited; hedging prohibited .
- Change-in-control: Double-trigger requirement; lump-sum at 300% base + average bonus; no single-trigger payouts .
- Legal/controversies: No SEC investigations or legal proceedings disclosed in the cited materials related to Mr. Nelson.
- Meeting attendance: All directors met attendance thresholds in 2024 .
Investment Implications
- Alignment and retention: High beneficial ownership (1.20%) and 3-year post-vesting hold suggest strong alignment and reduced near-term sell pressure; 24-month non-compete/non-solicit and double-trigger CoC terms mitigate abrupt transitions but create sizable severance obligations in a transaction .
- Trading signals: Annual RSU vesting on March 25 each year and the 16,900 RSUs vesting within 60 days of Feb 14, 2025 point to recurring settlement events; however, mandatory retention of 50% of vested shares tempers supply effects .
- Pay-for-performance: 2024 bonus payout slightly above target and 2023 payout below the prior-year level reflect incentive responsiveness to peer-relative performance; continued use of ROAE/efficiency/NPA PRSUs ties compensation to bank-quality metrics that investors monitor for valuation and capital efficiency .
- Governance quality: Independent Chair, independent committees, and clawback policy reduce agency risk; absence of hedging/pledging and tax gross-ups are shareholder-friendly .