UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ____ )
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| ☐ | Preliminary Proxy Statement. | |
| ☐ | Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2)). | |
| ☒ | Definitive Proxy Statement. |
| ☐ | Definitive Additional Materials. |
| ☐ | Soliciting Material under |
SERVISFIRST BANCSHARES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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SERVISFIRST BANCSHARES, INC.850 Shades Creek Parkway, Suite 200
2500 Woodcrest Place
Birmingham, Alabama 35209March 21, 2016
April 2, 2018
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of ServisFirst Bancshares, Inc. Our Annual Meeting will be held at the Linn-Henley Lecture Hallcompany’s corporate headquarters, located at the Birmingham Botanical Gardens, 2612 Lane Park Road,2500 Woodcrest Place, Birmingham, Alabama 3522335209, on Thursday, May 5, 2016,15, 2018, at 11:9:00 a.m., Central Daylight Time. We will have a luncheon after the meeting.
The enclosed proxy materials describe the formal business to be transacted at the Annual Meeting, which includes a report on our operations. Many of our directors and officers will be present to answer any questions that you and other stockholders may have. Included in the materials is our Annual Report to Stockholders, which contains detailed information concerning our activities and operating performance including our Annual Report on Form 10-K for the year ended December 31, 2015.2017.
The business to be conducted at the Annual Meeting consists of (1) the election of six directors; (2) an advisory vote on executive compensation; (3) the ratification of the appointment of Dixon Hughes Goodman LLP as our independent registered public accounting firm for the year ending December 31, 2016;2018; and (4) the approval of an amendment to our certificate of incorporation to increase the number of shares of authorized common stock from 50 million to 100 million; and (5) such other business as may properly come before the Annual Meeting. Our board of directors unanimously recommends a vote “FOR” the election of the director nominees; “FOR” the “Say on Pay” advisory vote approving our executive compensation; and “FOR” the ratification of the appointment of Dixon Hughes Goodman LLP as our independent registered public accounting firm for the year ending December 31, 2016; and “FOR” the amendment to our certificate of incorporation to increase the number of shares of authorized common stock.2018.
You may vote your shares by returning your Proxy Card in the enclosed prepaid return envelope, by following your broker’s voting instructions, by submitting voting instructions by telephone or by Internet, or by voting in person at the Annual Meeting.Meeting or, if you requested to receive printed proxy materials, by completing and returning your proxy card. Instructions regarding the methods of voting are contained in the enclosed Proxy Statement and on the accompanying proxy card or Notice of Internet Availability of Proxy Materials.Materials or proxy card.
On behalf of our board of directors, we request that you vote your shares now, even if you currently plan to attend the Annual Meeting. This will not prevent you from voting in person, but will assure that your vote is counted. Your vote is important.
Sincerely,
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Thomas A. Broughton III
| Sincerely, | ||
 | ||
| Thomas A. Broughton III | ||
| Director, President and Chief Executive Officer |
SERVISFIRST BANCSHARES, INC.850 Shades Creek Parkway, Suite 200
2500 Woodcrest Place
Birmingham, Alabama 35209
NOTICE OF 20162018 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 5, 201615, 2018
To Our Stockholders:
Notice is hereby given that our Annual Meeting of Stockholders will be held at Linn-Henley Lecture Hallthe company’s corporate headquarters, located at the Birmingham Botanical Gardens, 2612 Lane Park Road,2500 Woodcrest Place, Birmingham, Alabama 3522335209, on Thursday,Tuesday, May 5, 2016,15, 2018, at 11:9:00 a.m., Central Daylight Time, for the following purposes:
1.
| 1. | to elect six nominees to serve on our board of directors until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified, as set forth in the accompanying Proxy Statement; |
| 2. | to conduct a “Say on Pay” advisory vote on our executive compensation; |
| 3. | to ratify the appointment of Dixon Hughes Goodman LLP as our independent registered public accounting firm for the year ending December 31, 2018; and |
| 4. | to transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof. |
Our board of directors untilunanimously recommends a vote “FOR” the next Annual Meetingelection of Stockholders and until their successors are duly elected and qualified, as set forth in the accompanying Proxy Statement;
2. to conduct adirector nominees, “FOR” the “Say on Pay” advisory vote onapproving our executive compensation;
3. to ratifycompensation, and “FOR” the ratification of the appointment of Dixon Hughes Goodman LLP as our independent registered public accounting firm for the year ending December 31, 2016;
4. to amend our Certificate of Incorporation to increase the number of shares of authorized common stock from 50 million to 100 million; and
5. to transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof.
Our board of directors recommends a vote “FOR” each of the proposals listed above.2018. Our board of directors is not aware of any other business to come before the Annual Meeting. Directions to the Annual Meeting location at the Birmingham Botanical Gardenscompany’s corporate headquarters, are available atwww.edocumentview.com/SFBS.SFBS.
Stockholders of record as of the close of business on March 7, 201616, 2018 are entitled to notice of, and to vote their shares in person or by proxy at, the Annual Meeting. The proxy materials are first being made available to stockholders on March 21, 2016.April 2, 2018.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR
THE STOCKHOLDER MEETING TO BE HELD MAY 5, 2016:15, 2018:
Our Proxy Statement, form of proxy and 20152017 Annual Report on Form 10-K are available at:www.edocumentview.com/SFBS
YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT YOU SUBMIT VOTING INSTRUCTIONS BY TELEPHONE OR BY INTERNET OR, IF YOU REQUESTED TO RECEIVE PRINTED PROXY MATERIALS, BY RETURNING YOUR PROXY CARD. THEREFORE, WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE VOTE BY TELEPHONE OR BY INTERNET, SUBMIT VOTING INSTRUCTIONS OR SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED PRE-PAID RETURN ENVELOPE.POSSIBLE. STOCKHOLDERS OF RECORD WHO VOTE OVER THE TELEPHONE OR THE INTERNET, SUBMIT VOTING INSTRUCTIONS OR EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE ANNUAL MEETING, REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.
By Order of the Board of Directors,
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William M. Foshee
| By Order of the Board of Directors, | ||
 | ||
| William M. Foshee | ||
| Secretary and Chief Financial Officer |
Birmingham, AlabamaMarch 21, 2016April 2, 2018
Agenda and Voting Recommendations
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| 1 | Proposal 1: Election of Directors The board of directors unanimously recommends a vote FOR each director nominee. The six director nominees presented in this proposal are recommended for election to the board of directors. Additional information about each director and his | |
| Committee Memberships | Committee Memberships | ||||||||||||||||||||||||||||
| Name | Age | Director Since | Primary Occupation | Independent | AC | CC | CGNC | Age | Director Since | Primary Occupation | Independent | AC | CC | CGNC | |||||||||||||||
| Thomas A. Broughton III | 60 | 2007 | President, Chief Executive Officer and Director of ServisFirst Bancshares, Inc. and ServisFirst Bank | 61 | 2007 | President, Chief Executive Officer and Director of ServisFirst Bancshares, Inc. and ServisFirst Bank | |||||||||||||||||||||||
| Stanley M. Brock | 65 | 2007 | Chairman of ServisFirst Bancshares, Inc. and ServisFirst Bank; President of Brock Investment Company, Ltd. | ü | ![[GRAPHIC MISSING]](https://capedge.com/proxy/DEF 14A/0001144204-16-089017/img_fin-expert.jpg){kind=small} ![[GRAPHIC MISSING]](https://capedge.com/proxy/DEF 14A/0001144204-16-089017/img_com-member.jpg){kind=small} | ![[GRAPHIC MISSING]](https://capedge.com/proxy/DEF 14A/0001144204-16-089017/img_com-chair.jpg){kind=small} | 66 | 2007 | Chairman of ServisFirst Bancshares, Inc. and ServisFirst Bank; President of Brock Investment Company, Ltd. | ✓ |   |  | |||||||||||||||||
| Michael D. Fuller | 62 | 2007 | President of Double Oak Water Reclamation | ü | | | 63 | 2007 | President of Double Oak Water Reclamation | ✓ | | | |||||||||||||||||
| James J. Filler | 72 | 2007 | Retired Chief Executive Officer of Jefferson Iron & Metal Brokerage, Inc. | ü | | 73 | 2007 | Retired Chief Executive Officer of Jefferson Iron & Metal Brokerage, Inc. | ✓ | | |||||||||||||||||||
| J. Richard Cashio | 58 | 2007 | Retired Chief Executive Officer of TASSCO, LLC | ü | | | | 59 | 2007 | Retired Chief Executive Officer of TASSCO, LLC | ✓ | | | | |||||||||||||||
| Hatton C. V. Smith | 65 | 2007 | President of National Accounts, Royal Cup Coffee | ü | | 66 | 2007 | President of National Accounts, Royal Cup Coffee | ✓ | | |||||||||||||||||||
| AC: Audit Committee CC: Compensation Committee CGNC: Corporate Governance & Nominations Committee Committee Chair Committee Member Financial Expert | |||||||||||||||||||||||||||||
| AC:Audit CommitteeCC: Compensation CommitteeCGNC: Corporate Governance & Nominations Committee | AC:Audit CommitteeCC: Compensation CommitteeCGNC: Corporate Governance & Nominations Committee | ||||||||||||||||||||||||||||
| Committee Chair Committee Member Financial Expert | Committee Chair Committee Member Financial Expert | ||||||||||||||||||||||||||||
| | ||||
| 2 | Proposal 2: Advisory Vote on Executive Compensation | 3 | Proposal 3: Ratify Appointment of the Independent Registered Public Accounting Firm |
| The board of directors unanimously recommends a vote FOR the resolution. | The board of directors unanimously recommends a vote FOR the resolution. | |
| Additional information about executive compensation may be found on page |
| | |
| Additional information about the independent registered public accounting firm may be found on page | ||
| | |
TABLE OF CONTENTS
Throughout this Proxy Statement, unless the context indicates otherwise, when we use the terms “the company,” “we,” “our” or “us,” we are referring to ServisFirst Bancshares, Inc. and its wholly-owned subsidiary, ServisFirst Bank (which we refer to as the “bank”). When we use the term “Annual Meeting,” we intend to include both the Annual Meeting to be held on the date and at the time and place identified above and any adjournment or postponement of such Annual Meeting.
PROPOSAL 1:ELECTION OF DIRECTORS
Under our bylaws, our board of directors consists of six directors unless a different number is fixed from time to time by resolution passed by a majority of our board of directors, which is the only means of fixing a different number. Six directors will be elected at the Annual Meeting to hold office until our 20172019 Annual Meeting of Stockholders and until their successors are elected and have qualified.
Our board has nominated the six persons named below, all of whom currently serve as directors, for election as directors at the 20162018 Annual Meeting. Each of our director nominees has served as a director of the bank since its inception in 2005 and as a director of the company since our formation in 2007. Each of these nominees has consented to serve as a director, if re-elected. Unless otherwise instructed, the management proxies intend to vote the proxies received by them for the election of all six of these nominees. If any nominee identified below becomes unable to serve as a director before the Annual Meeting, the management proxies will vote the proxies received by them for the election of a substitute nominee selected by our board of directors.
Annual Election by Majority of Votes CastDirectors
The six nominees receiving the most votes cast in the election of directors by holders of shares of common stock present or represented by proxy and entitled to vote at the Annual Meeting will be elected to serve as directors of the company for the next year. As a result, although shares as to which the authority to vote is withheld will be counted, such “withhold” votes will have no effect on the outcome of the election of directors.directors, except with respect to our director resignation policy.
Information regarding directors and director nominees and their ages as of the record date is as follows:
| | | | | | | | ||||||||||||||||||||||
| Committee Memberships | |||||||||||||||||||||||||||||
| Name | Age | Director Since | Primary Occupation | Independent | AC | CC | CGNC | ||||||||||||||||||||||
| Thomas A. Broughton III | 60 | 2007 | President, Chief Executive Officer and Director of ServisFirst Bancshares, Inc. and ServisFirst Bank | ||||||||||||||||||||||||||
| Stanley M. Brock | 65 | 2007 | Chairman of ServisFirst Bancshares, Inc. and ServisFirst Bank; President of Brock Investment Company, Ltd. | X | [FE][M] | [C][M] | |||||||||||||||||||||||
| Michael D. Fuller | 62 | 2007 | President of Double Oak Water Reclamation | X | [C][M] | [M] | |||||||||||||||||||||||
| James J. Filler | 72 | 2007 | Retired Chief Executive Officer of Jefferson Iron & Metal Brokerage, Inc. | X | [M] | ||||||||||||||||||||||||
| J. Richard Cashio | 58 | 2007 | Retired Chief Executive Officer of TASSCO, LLC | X | [M] | [M] | [M] | ||||||||||||||||||||||
| Hatton C. V. Smith | 65 | 2007 | President of National Accounts, Royal Cup Coffee | X | [C][M] | ||||||||||||||||||||||||
| AC: Audit Committee CC: Compensation Committee CGNC: Corporate Governance & Nominations Committee [C] Committee Chair [M] Committee Member [FE] Financial Expert | |||||||||||||||||||||||||||||
| Committee Memberships | ||||||||||||||||||||||||
| Name | Age | Director Since | Primary Occupation | Independent | AC | CC | CGNC | |||||||||||||||||
| Thomas A. Broughton III | 62 | 2007 | President, Chief Executive Officer and Director of ServisFirst Bancshares, Inc. and ServisFirst Bank | |||||||||||||||||||||
| Stanley M. Brock | 67 | 2007 | Chairman of ServisFirst Bancshares, Inc. and ServisFirst Bank; President of Brock Investment Company, Ltd. | X | [FE][M] | [C][M] | ||||||||||||||||||
| Michael D. Fuller | 64 | 2007 | President of Double Oak Water Reclamation | X | [C][M] | [M] | ||||||||||||||||||
| James J. Filler | 74 | 2007 | Retired Chief Executive Officer of Jefferson Iron & Metal Brokerage, Inc. | X | [M] | |||||||||||||||||||
| J. Richard Cashio | 60 | 2007 | Retired Chief Executive Officer of TASSCO, LLC | X | [M] | [M] | [M] | |||||||||||||||||
| Hatton C. V. Smith | 67 | 2007 | President of National Accounts, Royal Cup Coffee | X | [C][M] | |||||||||||||||||||
AC:Audit Committee CC:Compensation Committee CGNC:Corporate Governance & Nominations Committee
[C] Committee Chair [M] Committee Member [FE] Financial Expert
The following summarizes the business experience and background of each of our nominees. Each of the director nominees also serves as director of the bank, and Mr. Broughton also serves as President and Chief Executive Officer of us and the bank.
SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement1
| | |
| Thomas A. Broughton III | ||
| Age:62 | Committees:None | |
| Position:President, CEO and Director | ||
| Director Since:2007 | Bank Director Since:2005 |
Mr. Broughton has served as our President and Chief Executive Officer and a director since 2007 and as President, Chief Executive Officer and a director of the bank since its inception in May 2005. Mr. Broughton has spent the entirety of his 30-year banking career in the Birmingham area. In 1985, Mr. Broughton was named President of the de novo First Commercial Bank. When First Commercial Bank was bought by Synovus Financial Corp. in 1992, Mr. Broughton continued as President and was named Chief Executive Officer of First Commercial Bank. In 1998, he became Regional Chief Executive Officer of Synovus Financial Corp., responsible for the Alabama and Florida markets. In 2001, Mr. Broughton’s Synovus region shifted, and he became Regional Chief Executive Officer for the markets of Alabama, Tennessee and parts of Georgia. He continued his work in this position until his retirement from Synovus in August 2004. Mr. Broughton’s experience in banking has afforded him opportunities to work in many areas of banking and has given him exposure to all bank functions. Mr. Broughton served on the Board of Directors of Cavalier Homes, Inc. from 1986 until 2009, when the company was sold to a subsidiary of Berkshire Hathaway. We believe that Mr. Broughton’s extensive experience in banking in Alabama and the Southeast, and, in particular, his success in building and growing new banks and developing new markets, makes him highly qualified to serve as a director.
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | |
| Stanley M. Brock | ||
| Age:67 | Committees:Audit; Corporate Governance and Nominations (Chair) | |
| Position:Chairman of the Board andDirector | ||
| Director Since:2007 | Bank Director Since:2005 |
Mr. Brock has served as our Chairman of the Board and a director since 2007 and has served as Chairman of the Board and a director of the bank since its inception in May 2005. He currently serves on the Company’s Audit Committee and Corporate Governance and Nominations Committee. He has served as President of Brock Investment Company, Ltd., a private venture capital firm, since its formation in 1995. Prior to 1995, Mr. Brock practiced corporate, commercial and real estate law for 20 years with one of the largest law firms based in Birmingham, Alabama. Mr. Brock also served as a director of Compass Bancshares, Inc., a publicly traded bank holding company, from 1992 to 1995. We believe that Mr. Brock’s experience as a corporate lawyeran attorney and a bank holding company director, as well as his history of community involvement in our largest market, makes him highly qualified to serve as a director.
| | |
| Michael D. Fuller | ||
| Age:64 | Committees:Audit (Chair); CorporateGovernance and Nominations | Position:Director |
| Director Since:2007 | Bank Director Since:2005 |
Mr. Fuller has served as a director of the company since 2007 and as a director of the bank since its inception in May 2005. For over 20 years, Mr. Fuller has been a private investor in real estate investments. Prior to that time, Mr. Fuller played professional football for nine years. Mr. Fuller has served as President of Double Oak Water Reclamation, a private wastewater collection and treatment facility in Shelby County, Alabama, since 1998. We believe that Mr. Fuller’s experience in the real estate sector, which is a major focus of our business, as well as his overall business experience and community presence, make him highly qualified to serve as a director.
| | |
Mr. Filler has served as a director of the company since 2007 and as a director of the bank since its inception in May 2005. Mr. Filler has been a private investor since his retirement in 2006. Prior to his retirement, Mr. Filler spent 44 years in the metals recycling industry with Jefferson Iron & Metal, Inc. and Jefferson Iron & Metal Brokerage Co., Inc. We believe that Mr. Filler’s extensive business experience and strong ties to the Birmingham business community offer us valuable strategic insights and make him highly qualified to serve as a director.
2SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement
| | |
| J. Richard Cashio | ||
| Age:60 | Committees:Audit; Compensation; Corporate Governance and Nominations | Position:Director |
| Director Since:2007 | Bank Director Since:2005 | |
Mr. Cashio has served as a director of the company since 2007 and as a director of the bank since its inception in May 2005. Mr. Cashio served as Chief Executive Officer of TASSCO, LLC from 2005 until January 2014 and served as the Chief Executive Officer of Tricon Metals & Services, Inc. from 2000 until its sale in October 2008. He served in various other positions with Tricon Metals & Services, Inc. prior to 2000. We believe that Mr. Cashio’s experience as the chief executive officer of successful industrial enterprises allows him to offer our board both the benefit of his business experience and the perspectives of one of our target customer groups, making him highly qualified to serve as a director.
| James J. Filler | ||
| Age:74 | Committees:Compensation | Position:Director |
| Director Since:2007 | Bank Director Since:2005 |
Mr. Filler has served as a director of the company since 2007 and as a director of the bank since its inception in May 2005. Mr. Filler has been a private investor since his retirement in 2006. Prior to his retirement, Mr. Filler spent 44 years in the metals recycling industry with Jefferson Iron & Metal, Inc. and Jefferson Iron & Metal Brokerage Co., Inc. We believe that Mr. Filler’s extensive business experience and strong ties to the Birmingham business community offer us valuable strategic insights and make him highly qualified to serve as a director.
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | |
| Hatton C. V. Smith | ||
| Age:67 | Committees:Compensation (Chair) | Position:Director |
| Director Since:2007 | Bank Director Since:2005 |
Mr. Smith has served as a director of the company since 2007 and as a director of the bank since its inception in May 2005. Mr. Smith served as the Chief Executive Officer of Royal Cup Coffee from 1996 until 2014 and in various other positions with Royal Cup Coffee prior to 1996. He is involved in many different charities and served as Chair of the United Way and President of the Baptist Health System. We believe that Mr. Smith’s business experience, his strong roots in the greater Birmingham business and civic community, and his high profile and extensive community contacts make him highly qualified to serve as a director.
The Board of Directors Unanimously Recommends a Vote “FOR” the Election of Each of the Board Nominees Named Above.
SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement3
Our business is managed under the direction of our board of directors. The board has the legal responsibility for overseeing the affairs and performance of the company. The primary responsibility of the board is to exercise their business judgment in what they believe to be in the best interests of the company and its stockholders.
Recent Corporate Governance Initiatives
We understand that corporate governance practices evolve over time, and we seek to adopt and use practices that we believe will be of value to our stockholders and will positively aid in the governance of the company. In connection with our annual corporate governance review, in 2015 we have recently made changes to our corporate governance policies and procedures, including the adoption of an Incentive Compensation Clawback Policy.Policy, and in 2016 we adopted a director resignation policy. We did not make any changes to our corporate governance policies and procedures in 2017.
Our board of directors believes that sound governance practices and policies provide an important framework to assist them in fulfilling their oversight duty. In March 2014, our board formally adopted the Corporate Governance Guidelines of ServisFirst Bancshares, Inc. (the “Governance Guidelines”), which include a number of the practices and policies under which our board has operated for some time, together with concepts suggested by various authorities in corporate governance and the requirements under the NASDAQ Global Select Market’s listed company rules and the Sarbanes-Oxley Act of 2002.
Each year, our board of directors reviews our Governance Guidelines and other governance documents and modifies them as it deems appropriate. These documents include the Governance Guidelines, the committee charters, our Code of Business Conduct and Ethics, our Related Party Transactions Policy and other key policies and practices. Copies of the currently effective charters for each board committee, the Code of Business Conduct and Ethics, the Governance Guidelines and certain other corporate governance policies are available on the company’s website atwww.servisfirstbank.com under the “Investor Relations” tab.
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 3 |
Some of the principal subjects covered by our Governance Guidelines comprise:
| • | Director Qualifications,which include: a board candidate’s independence, experience, knowledge, skills, expertise, integrity, ability to make independent analytical inquiries; his or her understanding of our business and the business environment in which we operate; and the candidate’s ability and willingness to devote adequate time and effort to board responsibilities, taking into account the candidate’s employment and other board commitments. |
| • | Responsibilities of Directors,which include: acting in the best interests of all stockholders; maintaining independence; developing and maintaining a sound understanding of our business and the industry in which we operate; preparing for and attending board and board committee meetings; and providing active, objective and constructive participation at those meetings. |
| • | Director Access to Management and, as Necessary and Appropriate, Independent Advisors,which covers: encouraging presentations to our board from the officers responsible for functional areas of our business and from outside consultants who are engaged to conduct periodic reviews of various aspects of our operations or the quality of certain of our assets, such as the bank’s loan portfolio. |
| • | Director Orientation and Continuing Education,such as: programs to familiarize directors with any changes to our business, strategic plans, and significant financial, accounting and risk management issues; our compliance programs and conflicts policies; our code of business conduct and |
| • | Regularly Scheduled Executive Sessions, without Management,will be held by our board and by the Audit Committee, which meets separately with our independent auditors. |
Director Resignation Policy
In October 2016, our board approved and adopted a Director Resignation Policy. This policy provides that, in an uncontested election, any director nominee who receives a greater number of “Withhold” votes than votes “For” his or her election shall promptly tender his or her resignation to the Chairman of our board following the certification of the election results. The company’sCorporate Governance and Nominations Committee (“CG&N Committee”) will consider the offer of resignation and recommend to the Board whether to accept or reject the resignation.Our board must then act on the recommendation within 90 days following certification of the election results following receipt of the recommendation. After the board makes a formal decision on the CG&N Committee’s recommendation, the company must publicly disclose the action on a Current Report on Form 8-K within four business days of the decision. If the board determines to take any action other than accepting such resignation, the Current Report must also include the board’s rationale supporting its decision. A copy of our Director Resignation Policy is availableon our website www.servisfirstbank.com under the “Investor Relations” tab.
Incentive Compensation Clawback Policy
In December 2015, our
Our board has approved and adopted a Clawback Policy for recovery of incentive compensation from the company’s current and former executive officers under certain circumstances. The Clawback Policy is designed to comply with Section 10D of theSecurities Exchange Act of 1934 (the “Exchange Act”)and proposed ruleRule 10D-1. The Clawback Policy provides that, in the event the company is required to restate financial results due to material noncompliance with any financial reporting requirement under the securities laws, the board may adjust future compensation, cancel outstanding awards, seek recoupment of previous awards and take any other remedial and recovery action permitted by law, to recoup all or a portion of any incentive compensation approved, awarded or granted to an executive officer of the company after the date of adoption of the Clawback Policy and such award, vesting or payment occurred or was received during the three completed
4SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement
fiscal years immediataelyimmediately preceding the date on which the Companycompany is required to prepare the restatement. The Clawback Policy applies when the Compensation Committee has determined that the incentive compensation approved, awarded or granted was predicated upon the achievement of certain financial results that were the subject of the restatement and that a lesser amount of incentive compensation would have been approved, awarded or granted to the executive officer based upon the restated financial results. In each such instance, the company will seek to recoup the amounts by which an executive officer’s incentive compensation that was awarded, vested or paid during the three-year period referenced above exceeded the amounts that would have been awarded, vested or paid based on the restated financial results.
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 4 |
Stock Ownership of Board and Executives
Long-term stock ownership is deeply engrained in our culture and reflects our board’s strong commitment to the company’s success. In December 2015, weWe have reviewed the stock ownership policies of other financial institutions, the criteria identified by certain proxy advisory firms in determining whether a stock ownership policy is “rigorous” or “robust,” and the stock ownership of our directors and executive officers. We ultimately concluded not to adopt a formal stock ownership policy at this stage of the company’s existence primarily because the current ownership levels of our directors and, with one exception, our named executive officers far exceed the ownership requirements of even the most rigorous policies we reviewed. Using the market price and the number of shares of common stock beneficially owned as of December 31, 2015,2017, each of our non-employee directors held common stock valued at well over 250500 times such director’s annual retainer, our Chief Executive Officer held common stock valued at well over 5090 times his annual base salary, and each of our other named executive officers, with the exception of Mr. Owens, held common stock valued at over 1040 times his annual base salary. Mr. Owens retired from his position as Chief Credit Officer of the company and the bank, effective March 31, 2018.
Our board annually reviews our Governance Guidelines and other governance documents and practices and modifies them as it deems appropriate. Although we will reconsider adopting stock ownership guidelines in the future, including in the event of board or management changes, we intend to operate the company in a way that we believe makes the most sense taking into account numerous factors.
Policy Against Hedging Activities
The company is dedicated to growing its business and enhancing stockholder value in an ethical way while being mindful of the need to avoid taking actions that pose undue risk or have the appearance of posing undue risk to the company. Our goal is to grow stockholder value in both the short term and in the longer term, and we expect our directors, officers and employees to have the same goals as the company. Consistent with these goals, our insider trading policy prohibits any of our directors, officers and employees from engaging in hedging activities involving the company’s securities, including short sales, puts, calls, collars, swaps, forward sale contracts, or other derivative securities based on the company’s securities.
Policy Against Pledging Activities
Our Insider Trading Policy prohibits our directors, officers and employees from pledging our securities as collateral for loans unless approved by our Insider Trading Compliance Officer. While being mindful of the need to avoid taking actions that pose undue risk or appear to pose undue risk to our company, we also appreciate that our situation may be unique. We are a newly public company that has, since the bank’s inception in 2005 and our formation in 2007, experienced a relatively high amount of success. As a result of this success, a significant portion of the wealth of some of our officers and employees resides in their ownership of our common stock. As detailed above, all of our directors and all but one of our executive officers ownsown enough shares of common stock to far exceed the multiples of base salary or annual cash retainer typically required by stock ownership guidelines. Accordingly, we provide our Insider Trading Compliance Officer with the discretion to permit pledges in certain limited circumstances.
SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement5
Board Independence
The cornerstone of our corporate governance program is an independent and qualified board of directors. The board has established guidelines consistent with the current listing standards of the NASDAQ Global Select Market for determining director independence. You can find these guidelines in our Governance Guidelines, which are posted on the company’s website atwww.servisfirstbank.com under the “Investor Relations” tab.
During its most recent review, our board considered transactions and relationships between each director or any member of a director’s immediate family and us and the bank. Our board also considered whether there were any transactions or relationships between our company and any entity of which a director or an immediate family member of a director is an executive officer, general partner or significant equity holder. The purpose of this review was to determine whether any such relationships or transactions existed that were inconsistent with a determination that a director is independent. Independent directors must be free of any relationship with us or our management that may impair the director’s ability to make independent judgments.
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 5 |
Our Corporate Governance and Nominations Committee (“CG&N Committee”)Committee has determined in its business judgment that five of the company’s six directors are independent as defined in the applicable NASDAQ Global Select Market listing standards includingand that each member is free of any relationships that would interfere with his individual exercise of independent judgment. Our independent directors are Messrs. Brock, Cashio, Filler, Fuller and Smith. Mr. Broughton is considered an inside director because of his employment as our President and Chief Executive Officer.Officer (see “Certain Relationships and Related Transactions” for a list of other relationships the Board considered when determining independence).
The Role of Our Board of Directors
The members of our board also are members of the board of directors of the bank, which accounts for substantially all of our consolidated operating results. The members of our board keep informed about our business through discussions with senior management and other officers and managers of the company and the bank, by reviewing analyses and reports sent to them by management and outside consultants, and by participating in meetings of the board and meetings of those board committees on which they serve.
Board Leadership Structure
We believe that our stockholders are best served by a strong, independent board of directors with extensive business experience and strong ties to our markets. We believe that objective oversight of the performance of our management team is critical to effective corporate governance, and we believe our board provides such objective oversight.
Since our inception, we have kept separate the offices of Chairman of the Board and Chief Executive Officer, and an independent director has always held the position of Chairman of the Board. We believe that this provides us with the benefit of complementary perspectives and ensures that our board’s oversight function remains fully objective. Although we do not have a fixed policy requiring the separation of such offices, instead believing that it is appropriate for our board to determine the structure that best meets our needs from time to time, it is our current intention to retain the present structure for the foreseeable future.
In addition, our three standing committees, which are described below under “Board Committees and Their Functions”, are composed exclusively of independent directors. We believe that this structure further reinforces the board’s role as an objective overseer of our business, operations and day-to-day management.
The Board’s Role in Risk Oversight
Our
While our board is ultimately responsible for the management of risks inherent in our business. Inbusiness, in our day-to-day operations senior management is responsible for instituting risk management practices that are consistent with our overall business strategy and risk tolerance. In addition, because our operations are conducted primarily through the bank, we maintain an asset-liability and investment committee at the bank level, consisting of four executive officers of the bank. This committee is charged with monitoring our liquidity and funds positions. The committee regularly reviews the rate sensitivity position on three-month, six-month and one-year time horizons; loans-to-deposits ratios; and average maturities for certain categories of liabilities. This committee reports to our board of directors at least quarterly, and otherwise as needed.
In addition, our audit committee assists the board in overseeing and monitoring management’s conduct of our financial reporting process and system of internal accounting and financial controls, and our compensation committee oversees the management of risks relating to executive and non-executive compensation.
Outside of formal meetings, which our board holds every month, our board and its committees have regular access to senior executives, including our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, as well as our senior credit officers. We believe that this structure allows the board to maintain effective oversight over our risks and to ensure that our management personnel are following prudent and appropriate risk management practices.
6SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 6 |
Board Committees and Their Functions
Our board maintains three standing committees that are each composed entirely of independent directors. The governing charter for each of the three committees is available on our website atwww.servisfirstbank.com under the “Investor Relations” tab.
| | | | |||
| Name(1) | Audit Committee | Compensation Committee | Corporate Governance & Nominations Committee | |||
| Stanley M. Brock | | | ||||
| Michael D. Fuller | | | ||||
| James J. Filler | | |||||
| J. Richard Cashio | | | | |||
| Hatton | | |||||
| Committee Chair Committee Member Financial Expert | ||||||
(1)Mr. Broughton is not independent and therefore does not serve on any committee.
Audit Committee
Number of meetings in 2015:2017: 45
Functions:
Financial Expert:
Our board has unanimously determined that Mr. Brock should be designated as an audit committee financial expert. This determination is based on the broad spectrum of Mr. Brock’s experience, including Mr. Brock’s 20-plus years leading a private venture capital firm. His experience in this undertaking includes analyzing financial statements and audit results and making investment and acquisition decisions on the basis of those analyses.
Our board of directors has determined that each Audit Committee member meets the independence standards for Audit Committee membership under the rules of the Securities and Exchange Commission (“SEC”) and the rules of the NASDAQ Global Select Market.
SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement7
Compensation Committee
Compensation Committee
Number of meetings in 2015:2017: 64
Functions:
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 7 |
The Compensation Committee has the authority, in its sole discretion, to appoint, engage, retain and terminate any compensation consultant, legal counsel or other advisor to assist in the performance of its duties, and the company is responsible for providing appropriate funding to the Compensation Committee for payment of reasonable compensation to any such advisor retained by the Compensation Committee.
Our board of directors has determined that each Compensation Committee member is independent under the rules of the NASDAQ Global Select Market and an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986.
Corporate Governance and Nominations Committee
Number of meetings in 2015:2017: 02
Functions:
| • | Establishes the criteria for selecting candidates for nomination to our board, actively seeks candidates who meet those criteria and makes recommendations to our board of directors to fill vacancies on, or make additions to, our board or any committee of our board (see “Other Governance Practices” for a detailed discussion of qualification criteria); |
The CG&N Committee considers candidates for director who are recommended by its members, by other board members, and by management. The CG&N Committee will consider stockholder nominees for election to our board that are timely recommended by stockholders provided that a complete description of the nominees’ qualifications, experience and background, together with a statement signed by each nominee in which he or she consents to act as a board member if elected, accompany the recommendations. The CG&N Committee will evaluate candidates recommended by shareholders using the same criteria as for other candidates recommended by its members, other members of the board, or management. No stockholder nominations or recommendations for director candidates were received for 2016.the 2017 Annual Meeting.
In evaluating nominees for director, the CG&N Committee believes that, at this stage of the company’s existence, it is of primary importance to ensure that the board’s composition reflects a diversity of business experience and community leadership, as well as a demonstrated ability to promote the company’s strategic objectives and expand its presence, profile and customer base in its local markets. Accordingly, while the CG&N Committee may consider other types of diversity in evaluating nominees, the committee does not follow any specific formula for considering factors such as race, gender or national origin in evaluating nominees and potential nominees, nor does it apply any quotas with respect to such factors.
Our board of directors has determined that each member of the CG&N Committee is independent under the standards of independence of the rules of the NASDAQ Global Select Market.
8SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement
Advisory Boards
Advisory Boards
In addition to the boards of directors of the company and the bank, the bank also has a non-voting advisory board of directors in each of the Huntsville, Montgomery, Dothan and Mobile, Alabama, Pensacola, Florida, and Atlanta, Georgia, Charleston, South Carolina and Nashville, Tennessee markets. These advisory directors represent a wide array of business experience and community involvement in the service areas where they live. As residents of these service areas, they are sensitive and responsive to the needs of our customers and potential customers. In addition, our directors and advisory directors bring substantial business and banking contacts to us. The bank has established the following regional advisory boards:
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 8 |
| | |||||
| Atlanta Region | Charleston Region | Dothan Region | ||||
| J. Paul Austin, III | Peter McKellar | Jerry Adams | ||||
| Jeffrey B. Baker | Chris Mettler | Charles H. Chapman III | ||||
| Mike Casey | Weesie Newton | Ronald DeVane | ||||
| Paul Conley | Skip Sawin | John Downs | ||||
| John Loud | Daniel Vallini | Steve McCarroll | ||||
| Zach Parker | Charles E. Owens | |||||
| Brent Reid | William C. (Bill) Thompson | |||||
| Huntsville Region | Mobile Region | Montgomery | ||||
| E. Wayne Bonner | Steve Crawford | Dr. John A. Jernigan | ||||
| Dr. Hoyt A. “Tres” Childs, III | Lowell Friedman | Ray B. Petty | ||||
| David Mathis | Edward M. Stivers III | |||||
| David J. Slyman, Jr. | ||||||
| Irma Tuder | ||||||
| Sidney R. White | ||||||
| Danny J. Windham | ||||||
| Thomas J. Young | ||||||
| John H. Lewis, Jr. | ||||||
| Nashville Region | Pensacola Region | |||||
| Charles Robert Bone | Thomas M. Bizzell | |||||
| Joe Cashia | Bo Carter | |||||
| Ryan Chapman | Leo Cyr | |||||
| Brent Clements | Matt Durney | |||||
| Todd Robinson | Dr. Mark S. Greskovich | |||||
| Ray Russenberger | ||||||
| Sandy Sansing | ||||||
| Roger Webb |
Compensation Committee Interlocks and Insider Participation
The primary functions of the Compensation Committee are to evaluate and administer the compensation of our President and Chief Executive Officer and other executive officers and to review our general compensation programs. No member of this committee has served as an officer or employee of the company, the bank or any other subsidiary. In addition, none of our executive officers has served as a director or as a member of the Compensation Committee of a company which employs any of our directors. For further information, see “Compensation Discussion and Analysis” and “Board Committees and Their Functions.”
Director Attendance
Our board of directors held twelve12 meetings in 2015.2017. Each director attended more than 75% of the aggregate of: (i) the number of meetings of the board of directors held during the period he served on the board; and (ii) the number of meetings of committees of the board of directors held during the period he served on such committees. While we do not have a formal policy regarding director attendance at our annual meetings, we generally expect our directors to attend if at all possible. Each director attended the 20152017 Annual Meeting other than Mr. Fuller.
SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of StockholdersMessrs. Cashio and Proxy Statement9Smith.
Certain Relationships and Related Transactions
We have not entered into any business transactions with related parties required to be disclosed under Rule 404(a) of Regulation S-K other than banking transactions in the ordinary course of our business with our directors and officers, as well as members of their families and corporations, partnerships or other organizations in which they have a controlling interest.interest, and the two lease arrangements described below. Management recognizes that related party transactions can present unique risks and potential conflicts of interest (in appearance and in fact). Therefore, we maintain written policies around interactions with related parties which require that these transactions are entered into and maintained on the following terms:
A copy of our policy governing related party transactions is available on our website atwww.servisfirstbank.com under the “Investor Relations” tab.
The aggregate amount of indebtedness from our directors and executive officers (including their affiliates) to the bank as of December 31, 20152017 was approximately $12.1$8.4 million, which equaled 2.69%1.38% of our total equity capital as of that date. Less than 1% of these loans were installment loans to individuals. Related party transactions are made in the ordinary course of business, on substantially the same terms, including interest rates and collateral (where applicable), as those prevailing at the time for comparable transactions with persons not related to us, and do not involve more than normal risk of collectability or present other features unfavorable to us. As of the date of this Proxy Statement, no related party loans were categorized as non-accrual, past due, restructured or potential problem loans. We anticipate making related party loans in the future to the same extent as we have in the past.
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 9 |
In addition to banking transactions made in the ordinary course of business, the company leased office space in its corporate headquarters to two separate related parties in 2017. Prior to entering into each such lease, the company obtained, and the Board considered, a market reasonableness study, and the Board, other than the related parties, approved such leases on terms consistent with the results of the market reasonableness study.
Pursuant to one such lease, the company agreed to lease approximately 662 square feet in its headquarters to Brock Investment Company, Ltd., a company controlled by Mr. Stanley M. Brock, Chairman of the company, for five years at $26.00 per square foot, subject to a 1.5% annual escalation, plus a utilities and overhead fee equal to 10% of the rental rate. The lease additionally includes a tenant improvement allowance of $75 per square foot. The approximate dollar value of the amount involved in the transaction, and the amount of the related person’s interest in the transaction, is estimated to be $147,150, approximately $97,500 of which is equal to the amount of all payments due under such lease on or after January 1, 2017, and $49,650, the aggregate amount of the tenant improvement allowance. The amount of the related person’s interest in the transaction is estimated to be approximately $72,500. Under the terms of the second lease, the company agreed to lease an office of approximately 120 square feet to Mr. Michael D. Fuller, a director of the Company, on a month-to-month basis at $26.00 per square foot, subject to 1.5% annual escalations, plus a utilities and overhead fee equal to 10% of the rental rate.
Code of Conduct for Directors and Employees
Our board of directors has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors. The Code of Business Conduct and Ethics covers compliance with law; fair and honest dealings with us, with competitors and with others; fair and honest disclosure to the public; and procedures for compliance with the Code of Business Conduct and Ethics. A copy of our Code of Business Conduct and Ethics is, and any amendment to or waiver from a provision of our Code of Business Conduct and Ethics will be, available free of charge on our website atwww.servisfirstbank.com under the “Investor Relations” tab.
You may contact any of our independent directors, individually or as a group, by writing to them c/o William M. Foshee, Chief Financial Officer, ServisFirst Bancshares, Inc., 850 Shades Creek Parkway, Suite 200,2500 Woodcrest Place, Birmingham, Alabama 35209. Mr. Foshee will review and forward to the appropriate directors copies of all such correspondence that, in the opinion of Mr. Foshee, deals with the functions of the board of directors or its committees or that he otherwise determines requires their attention. Concerns relating to accounting, internal controls or auditing matters will be brought promptly to the attention of the Chairman of the audit committee and will be handled in accordance with procedures established by the audit committee.
10SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement
DIRECTOR COMPENSATION
We believe our current board composition is unique. Each of our directors has been a member of our board since our formation in 2007 and a member of the board of the bank since its inception in 2005. As of February 29, 2016,March 16, 2018, our five non-employee directors beneficially owned, collectively, approximately 8.5%8.9% of our outstanding common stock. As a result of the substantial ownership of our common stock by each of our directors, we did not grant any stock options or other equity-based incentive compensation for our directors in 2017. We tryseek to structure director compensation to attract and retain qualified non-employee directors and to further align the interests of directors with the interests of our stockholders. The Compensation Committee periodically reviews non-employee director compensation trends and makes recommendations to the board on compensation for our non-employee directors.
Annual Retainers and Meeting Fees
Directors each receive an annual cash retainer of $15,000, except that our chairmanChairman of the board receives a $20,000 annual retainer, and our audit committee chairman receives a $20,000 annual retainer. DirectorsEffective July 1, 2017, directors are paid $600 for each board meeting or board event attended, $500 for each committee meeting attended, and $250 for each committee meeting attended.attended that occurs on the same day as a full board meeting. Mr. Broughton is a named executive officer, and his compensation is reflected in the Summary Compensation Table.
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 10 |
Director Compensation for Fiscal 20152017
The following table sets forth information regarding the compensation of our non-employee directors for the year ended December 31, 2015.2017.
| | | | |||||||||||||||||||||
| Name (a) | Fees earned or paid in cash (b) | Option Awards(1) (d) | Total (h) | Fees earned or paid in cash (b) | Option Awards (d) | Total (h) | ||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||
| Stanley M. Brock, Chairman of the Board | 27,350 | 62,725 | 90,075 | 29,200 | (1) | 0 | 29,200 | (1) | ||||||||||||||||
| Michael D. Fuller | 27,950 | 62,725 | 90,675 | 28,950 | (1) | 0 | 28,950 | (1) | ||||||||||||||||
| James J. Filler | 22,850 | 62,725 | 85,575 | 22,700 | 0 | 22,700 | ||||||||||||||||||
| J. Richard Cashio | 23,850 | 62,725 | 86,575 | 23,600 | (1) | 0 | 23,600 | (1) | ||||||||||||||||
| Hatton C. V. Smith | 23,950 | 62,725 | 86,675 | 22,700 | 0 | 22,700 | ||||||||||||||||||
| (1) |
SERVISFIRST BANCSHARES, INC. –NoticeOwnership of 2016 Annual Meeting of StockholdersServisFirst Common Stock by Directors, Officers and Proxy Statement11Certain Beneficial Owners
OWNERSHIP OF SERVISFIRST COMMON STOCK BY DIRECTORS, OFFICERS AND CERTAIN BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of our common stock as of February 29, 2016March 16, 2018 by: (i) each of our directors; (ii) our named executive officers; and (iii) all of our directors and our executive officers as a group. As of such date, there was no person (including any group) who isgroup; and (iv) each stockholder known toby us to be the beneficial owner ofbeneficially own more than 5% of our common stock. Except as otherwise indicated, each person listed below has sole voting and investment power with respect to all shares shown to be beneficially owned by him except to the extent that such power is shared by a spouse under applicable law. The information provided in the table is based on our records, information filed with the SEC and information provided to the company.
| Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership | Percentage of Outstanding Common Stock (%)(2) | |||||||
| Five Percent Stockholders | |||||||||
| Blackrock, Inc.(3) | 5,709,244 | (4) | 10.8 | % | |||||
55 East 52nd Street New York, NY 10055 | |||||||||
| The Vanguard Group(5) | 4,244,087 | (4) | 8.01 | % | |||||
| 100 Vanguard Blvd. Malvern, PA 19355 | |||||||||
| Directors and Executive Officers | |||||||||
| Thomas A. Broughton III | 1,068,830 | (6)(7) | 1.98 | % | |||||
| Stanley M. Brock | 861,322 | (6)(8) | 1.60 | % | |||||
| Michael D. Fuller | 1,350,040 | (6)(9) | 2.51 | % | |||||
| James J. Filler | 1,353,152 | (6)(10) | 2.51 | % | |||||
| J. Richard Cashio | 728,899 | (6)(11) | 1.35 | % | |||||
| Hatton C. V. Smith | 422,994 | (6)(12) | * | ||||||
| William M. Foshee | 373,502 | (13) | * | ||||||
| Clarence C. Pouncey III | 719,116 | (14) | 1.34 | % | |||||
| Rodney E. Rushing | 451,700 | (15) | * | ||||||
| Don G. Owens | 6,000 | * | |||||||
| All directors and executive officers as a group (10 persons) | 7,335,555 | (16) | 13.62 | % | |||||
| | | ||||||
| Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership | Percentage of Outstanding Common Stock (%)(2) | ||||||
| Thomas A. Broughton III | 694,190 | (3)(4) | 2.64 | % | ||||
| Stanley M. Brock | 415,210 | (3)(5) | 1.58 | % | ||||
| Michael D. Fuller | 633,668 | (3)(6) | 2.41 | % | ||||
| James J. Filler | 644,803 | (3) | 2.45 | % | ||||
| J. Richard Cashio | 357,286 | (3)(7) | 1.36 | % | ||||
| Hatton C. V. Smith | 181,497 | (3) | * | |||||
| William M. Foshee | 209,001 | (8) | * | |||||
| Clarence C. Pouncey III | 388,861 | (9) | 1.48 | % | ||||
| Rodney E. Rushing | 227,300 | (10) | * | |||||
| Don G. Owens | 0 | (11) | * | |||||
| All directors and executive officers as a group (10 persons) | 3,524,516 | (12) | 14.28 | % | ||||
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 11 |
| * | Indicates ownership of less than 1% of outstanding common stock. |
| (1) | The address for all |
| (2) | Except as otherwise noted herein, the percentage is determined on the basis of |
| (3) |
| (4) | Reflects shares reported on Schedule 13G/A as beneficially owned as of December 31, 2017. |
| (5) | In a Schedule 13G/A filed February 9, 2018, The Vanguard Group reported having sole power to vote or direct the vote of 89,661 shares of common stock, shared power to vote or direct to vote 2,896 shares of common stock, sole power to dispose or direct the disposition of 4,154,748 shares of common stock and shared power to dispose or to direct the disposition of 89,339 shares of common stock. All information in this footnote was obtained from the Schedule 13G/A filed by The Vanguard Group. |
| (6) | Does not include an option granted to each director on June 15, 2015 to purchase |
| Includes 54,540 shares of common stock owned by his spouse and 14,290 shares of common stock owned by his two stepchildren. Includes an option granted to Mr. Broughton on November 28, 2011 to purchase 40,000 shares of common stock for $5.00 per share which vested 100% after five years. Does not include an option granted to Mr. Broughton on January 20, 2015 to purchase |
| Includes |
| Includes |
| (11) | Does not include 28,752 shares owned by Mr. Cashio’s |
| Includes an option granted to Mr. Smith on November 28, 2011 to purchase 60,000 shares of common stock for $5.00 per share which vested 100% after five years. Mr. Smith has pledged 96,999 shares to ServisFirst Bank, as security for a line of credit. |
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 12 |
| (13) | Includes 24,000 share held by Mr. Foshee’s spouse. Mr. Foshee disclaims beneficial ownership of such shares. Includes an option to purchase |
| Includes |
| Includes |
12SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company’s executiveSection 16 officers, directors and persons who own more than 10% of the Company’s common stock to file reports of ownership and changes in ownership with the SEC. Following the completion of fiscal year 2015, the Company undertook an extensive review of the Section 16(a) reports filed on behalf of each individual who served as a director or executive officer of the Company and its Section 16(a) reporting compliance procedures, to determine whether all of the reportable transactions in the Company’s common stock were timely and accurately reported and to ensure proper reporting of all of their beneficial holdings. The review revealed that there were a number of transactions that were not timely reported and, as these transactions were identified, the Company undertook to file corrected forms in February 2016. In each case of a failure to timely report a transaction, the executive officer, director or his family member purchased shares of the Company’s common stock. Since conducting the review, the Company has developed new procedures to ensure improved compliance on an on-going basis.
Based solely upon information made available to us, we believe that each filing required to be made pursuant to Section 16(a) of the Exchange Act was timely filed by our executiveSection 16 officers and directors and the beneficial owners of more than 10% of our common stock, except for the following filings: (i) Mr. Fuller filedKenneth L. Barber amended his Form 3 filing on March 9, 2017, disclosing the receipt by Mr. Barber’s spouse of 18,172 previously undisclosed shares of common stock issued in connection with the acquisition of Metro Bank in 2015, and disclosing the receipt by a joint tenancy in which Mr. Barber’s spouse is a member of 1,038 previously undisclosed shares of common stock issued in connection with the acquisition of Metro Bank in 2015; (ii) Mr. Stanley M. Brock had a late Form 54 filing on February 10, 2016June 9, 2017 with respect to 23the exercise of 30,000 stock options at an exercise price of $5 on June 1, 2017; (iii) Mr. Clarence C. Pouncey III had a late reports covering 22 purchasesForm 4 filing on March 13, 2017 with respect to the disposition of Company common stock between August 20, 2014 and July 27, 2015 by Mr. Fuller directly, reflecting an aggregate increase of 63,074 shares of Company common stock directly owned by him, and one acquisition of Company common stock by LeCroy Properties, Ltd., an entity in which Mr. Fuller’sPouncey’s spouse on August 5, 2013, reflecting an increase of 3,750 shares of Company common stock owned by Mr. Fuller’s spouse; and (ii) Mr. Thomas Trouche filedowns a Form 533 1/3% interest, on February 16, 201614, 2017; and (iv) Mr. Kenneth L. Barber had a late Form 4 filing on March 9, 2017 with respect to three late reports covering three purchasesthe disposition of Company21,073 shares of common stock between May 12, 2015 and August 24, 2015 by Mr. Trouche directly, reflecting an increase of 591 shares ofthe Company common stock owned by him.that occurred on March 1, 2017.
SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement13
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 13 |
PROPOSAL 2:ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required under Section 14A of the Exchange Act, we provide our stockholders with an annual advisory vote on the compensation of our named executive officers. In 2017, our stockholders approved an annual advisory vote. At the 20152017 Annual Meeting, approximately 98% of the votes cast (which excludes broker non-votes) supportedwere in approval of our executive compensation program.
Our Compensation Committee reviewed the results of the advisory vote and did not implement any significant changes to our executive compensation as a result of the say-on-pay advisory vote. The Compensation Committee recognizes that effective practices evolve, and the committee will continue to consider changes as needed to keep our executive compensation program competitive and tightly linked to performance. See “Compensation Discussion and Analysis” for a detailed discussion of our executive compensation practices, philosophy and objectives.
Consistent with our stockholders’ preference and prevailing demand, we expect to hold an advisory vote on executive compensation every year. This year, we are asking stockholders to approve the following resolution:
RESOLVED, that the compensation paid to the company’s named executive officers as disclosed in the Proxy Statement for the 20162018 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.
The advisory vote will not be binding on the Compensation Committee or the board of directors. However, they will carefully consider the outcome of the vote and take into consideration any specific concerns raised by investors when determining future compensation arrangements.
The Board of Directors Unanimously Recommends a Vote “FOR” the Resolution Approving the Compensation Paid to Our Named Executive Officers.
14SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis (CD&A)
This CD&A describes our executive compensation objectives and philosophy. It also describes our compensation program and reviews the compensation outcomes for fiscal 2015.2017. Our “named executive officers” in 20152017 were:
We are a bank holding company headquartered in Birmingham, Alabama. Our bank, founded in 2005, provides commercial banking services through eighteen20 full-service banking offices located in Alabama, Georgia, South Carolina, Tennessee and the panhandle of Florida, as well as a loan production office in Pasco County, Florida. We operate our bank using a simple business model based on organic loan and deposit growth, generated through high quality customer service, delivered by a team of experienced bankers focused on developing and maintaining long-term banking relationships with our target customers. Our strategy focuses on operating a limited and efficient branch network with sizable aggregate balances of total loans and deposits housed in each branch office. We strive to translate this business model and strategy into higher profits for our stockholders.
Our compensation program is intended to incentivize our named executive officers to pursue strategies and actions that promote both annual and longer-term value to stockholders, consistent with the intention of our business model. We have experienced accelerated growth and change in recent years — years—during the last threefive years, we have taken the company public through our initial public offering, increased our geographic footprint to include branch offices in South Carolina, Tennessee and Georgia, effectuated a 3-for-1 stock dividend and a 2-for-1 stock dividend and instituted a quarterly cash dividend while increasing our net income from approximately $34.4$41.6 million in 2013 to approximately $63.5$93.1 million — andin 2017 —and we believe our compensation processes have been designed to permit us to attract and retain the highly skilled executive and management staff who have been instrumental to our past successes and who will be key to our future.
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Each of our five named executive officers also holds the same position with the bank. All of such officers remain employees of the bank for payroll and tax purposes. The board of directors of the bank also has a compensation committee. At the time we became a bank holding company, our board of directors appointed a separate Compensation Committee, consisting of the same individuals as the compensation committee of the bank, with the authority to determine the compensation of our Chief Executive Officer and, either independently or with other independent directors of the board, the compensation of our other executive officers, and to further administer any equity or other incentive plans. Because our officers, including Messrs. Broughton, Pouncey, Foshee, Rushing and Owens, remain employees of the bank for payroll and tax purposes, their compensation is set by the compensation committee of the bank as a technical matter. However, such compensation is then approved by the bank’s board of directors and by our board of directors. Because both compensation committees consist of the same persons, as do both boards of directors, references herein to “our” or “the” Compensation Committee will be deemed to refer to our Compensation Committee and/or the bank’s compensation committee, as applicable. No executive officers of the company make any recommendations to the Compensation Committee or participate in any way regarding the compensation of other executive officers, other than the President and Chief Executive Officer, Mr. Broughton. The Compensation Committee consults with Mr. Broughton to gain a better insight into the performance of the executive team as a basis for the Compensation Committee’s determinations regarding executive compensation. While the Compensation Committee consults with Mr. Broughton, the Compensation Committee makes its decisions independently.
Compensation Philosophy and Objectives
In order to recruit, retain and appropriately incentivize the most qualified and competent individuals as executive officers, we strive to maintain a compensation program that not only is competitive in our market but that also provides our Compensation Committee with the flexibility to determine incentive compensation using a common sense approach. Our Compensation Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of specific annual, long-term and strategic goals by us and the bank, and which aligns executives’ interests with those of our stockholders by rewarding performance, with the ultimate objective of improving stockholder value.
Our board and Compensation Committee have found that people do what you incentivize them to do. We believe that it is of paramount importance to be careful when setting absolute incentive compensation goals. Instead, our Compensation Committee is thoughtful about the objective performance measures it uses to incentivize executive officers and, when determining the incentive compensation of each executive, our Compensation Committee considers all available information, including the company’s overall performance.
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The Compensation Committee believes that executive compensation packages should include cash, annual short-term cash incentives and, when appropriate, long-term equity based incentives that reward performance as measured against established company, business unit and individual goals. These goals may include any number of criteria and may be unique to the particular executive officer based upon his or her duties, but the criteria typically include net income, asset growth and deposit growth and contain a credit quality component, in addition to considering such executive officer’s personal production. Above all, though, the Compensation Committee endeavors to use a common sense approach when determining incentive compensation and establishing incentive goals. To our Compensation Committee, a “common sense approach” means maintaining a compensation program that adapts to the circumstances and performance of each executive officer, considers the performance in the area of responsibility of such officer, including the achievement of established performance measures, and takes into account the company’s overall performance.
Additionally, the Compensation Committee believes that we should offer competitive benefit plans, including health insurance and a 401(k) plan. We also have entered into change in control agreements that apply to particular circumstances where we believe it is important to ensure the retention of certain key executives during the critical period immediately preceding a change in control, if and when applicable.
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The Compensation Committee evaluates both performance and compensation to ensure that we maintain our ability to attract, retain and properly incentivize superior employees in key positions and that compensation provided to the named executive officers and other officers remains competitive relative to the compensation paid to similarly situated executives of our peers. Although our Compensation Committee has not designated a specific peer group for this purpose, it relies on general information about similarly sized financial institutions in similar markets. In addition, the Compensation Committee retains compensation consultants from time to time in order to obtain detailed comparisons of our executive compensation as compared to our similarly sized competitors. The Compensation Committee did not retain a compensation consultant during 2015,2017, but it plans to retainconsider retaining compensation consultants again in future years.
All of our named executive officers received stock options and were encouraged to purchase our stock when they joined the company. We want each of our executive officers to think like a stockholder, which means we want all of our executive officers to be substantial stockholders so that their interests are aligned with those of our other stockholders.
The fundamental purpose of our executive compensation program is to assist us in achieving our financial and operating performance objectives. Specifically, our compensation program has two basic objectives:
Elements of our Compensation Program
Base salary: This element is intended to directly reflect an executive’s job responsibilities and his or her value to us. We also use this element to attract and retain our executives and, to some extent, acknowledge each executive’s individual efforts in furthering our strategic goals.
Annual short-term cash incentives: This annual cash incentive is one of the performance-based elements of our compensation. It is intended to motivate our executives and to provide a current reward for short-term (annual) measurable performance.
Equity-based incentives: The grant of stock options and/or other equity-based incentive compensation is the method we use to align the interests of our named executive officers with the interests of our stockholders, which is another element of performance-based compensation.
Perquisites and benefits:These benefits and plans are intended to attract and retain qualified executives, by ensuring that our compensation program is competitive and provides an adequate opportunity for retirement savings. We believe that, to a limited degree, these programs tend to reward long-term service or loyalty to us.
Change in control agreements: These agreements, or comparable provisions in an employment or similar agreement, provide a form of severance payable in the event we are the subject of a change in control. They are primarily intended to align the interests of our executives with our stockholders by providing for a secure financial transition in the event of termination in connection with a change in control.
16SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement
General Compensation Policies
To reward both short- and long-term performance in the compensation program and in furtherance of our compensation objectives noted above, our executive officer compensation philosophy includes the following principles:
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Compensation should be related to performance. The Compensation Committee believes that a significant portion of an executive officer’s compensation should be tied not only to individual performance, but also the company’s performance measured against both financial and non-financial goals and objectives.
Incentive compensation should represent a portion of an executive officer’s total compensation. The Compensation Committee is committed to providing competitive compensation that reflects our performance and that of the individual officer or employee.
Compensation levels should be competitive. The Compensation Committee reviews available data to ensure that our compensation is competitive with that provided by other comparable companies. The Compensation Committee believes that competitive compensation enhances our ability to attract and retain executive officers.
Incentive compensation should balance short-term and long-term performance. The Compensation Committee seeks to achieve a balance between encouraging strong short-term annual results and ensuring our long-term viability and success. To reinforce the importance of balancing these perspectives, executive officers generally will be provided both short- and long-term incentives. Prior to 2009, we provided our executive officers, non-employee directors and employees with the means to become stockholders and to share accretion in value with our external stockholders through our 2005 Amended and Restated Stock Incentive Plan. In 2009, we continued that process through the adoption and approval by our stockholders of our 2009 Stock Incentive Plan, which was amended and restated in 2014. The Compensation Committee does not make automatic equity grants each fiscal year, preferring instead to utilize such grants on an as-needed basis to provide additional long-term incentives. Such equity long-term incentives historically have not vested immediately, but rather require the officers and directors that receive such grants to earn them over a period of years with the company.
The Compensation Committee does not use a specific formula to determine the amount allocated to each element of compensation. Instead, the Compensation Committee analyzes the total compensation paid to each executive and makes individual compensation decisions as to the mixture between base salary, annual short-term cash incentives and equity-based incentives. To date, in determining the amount or mixture of compensation to be paid to any executive, the Compensation Committee has not considered any severance payment to be paid under an employment agreement or change in control agreement or any equity-based incentives previously awarded. Further, because of the significant stock ownership of all but one of our named executive officers, the Compensation Committee has not adopted any specific stock ownership or holding guidelines that would affect such determinations.
For fiscal year 2015,2017, an average of 37.14%41.54% of our named executive officers’ compensation was in annual short-term cash incentives which, as described below, are largely performance-based awards. With the exception of Mr. Broughton, noneNone of our named executive officers’ compensation was in long-term equity-based incentives or stock options.options for fiscal year 2017. The following table illustrates the percentage of each named executive officer’s total compensation, as reported in the “Summary Compensation Table” below, related to base salary, annual short-term cash incentives and long-term equity-based incentives:
| | | | | ||||||||||||
| Percentage of Total Compensation (Fiscal Year 2015) | ||||||||||||||||
| Named Executive Officer | Annual Base Salary | Annual Short Term Cash Incentives | Equity-Based Incentives | Perquisites and Benefits | ||||||||||||
| Thomas A. Broughton III, Principal Executive Officer (“PEO”) | 35.86 | % | 45.42 | % | 13.04 | %(1) | 5.69 | % | ||||||||
| William M. Foshee, Principal Financial Officer (“PFO”) | 57.73 | % | 35.35 | % | 0 | % | 6.92 | % | ||||||||
| Clarence C. Pouncey III | 58.97 | % | 35.38 | % | 0 | % | 5.65 | % | ||||||||
| Rodney E. Rushing | 62.01 | % | 31.00 | % | 0 | % | 6.99 | % | ||||||||
| Don G. Owens | 70.17 | % | 20.91 | % | 0 | % | 8.92 | % | ||||||||
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| Percentage of Total Compensation (Fiscal Year 2017) | ||||||||||||||||
| Named Executive Officer | Annual Base Salary | Annual Short Term Cash Incentives | Equity-Based Incentives | Perquisites and Benefits | ||||||||||||
| Thomas A. Broughton III, Principal Executive Officer (“PEO”) | 38.25 | % | 56.25 | % | 0 | % | 5.50 | % | ||||||||
| William M. Foshee, Principal Financial Officer (“PFO”) | 59.40 | % | 34.10 | % | 0 | % | 6.49 | % | ||||||||
| Clarence C. Pouncey III | 59.15 | % | 35.49 | % | 0 | % | 5.36 | % | ||||||||
| Rodney E. Rushing | 58.21 | % | 35.00 | % | 0 | % | 6.79 | % | ||||||||
| Don G. Owens | 72.75 | % | 18.36 | % | 0 | % | 8.89 | % | ||||||||
Chief Executive Officer Compensation
The compensation of Thomas A. Broughton III, our President and Chief Executive Officer, is discussed throughout the following paragraphs. The Compensation Committee establishes Mr. Broughton’s compensation package each year with the intent of providing compensation designed to retain Mr. Broughton’s services and motivate him to perform to the best of his abilities. Mr. Broughton’s 20152017 base salary and incentive compensation reflect the Compensation Committee’s and our board’s determination of the total compensation package necessary to meet this objective.
Chief Executive Officer Pay Ratio
Rules adopted by the SEC following passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act require us to provide a reasonable estimate of the ratio of the annual total compensation of our Chief Executive Officer to the median annual total compensation of our employees. We identified our median employee by comparison of all salary, matching contributions to our 401(k) plan, annual incentive compensation, long-term incentive awards vested in 2017 and the Company’s payment of insurance premiums and provision of other perquisites, as reported to the Internal Revenue Service on Form W-2 for 2017 for all of our employees (excluding our Chief Executive Officer) as of December 31, 2017. As further detailed in the paragraphs and Summary Compensation Table below, Mr. Broughton’s total annual compensation in fiscal 2017 was $1,111,113. The company has determined that the median annual compensation for all company employees, excluding Mr. Broughton, as of the same date was approximately $59,971. Accordingly, we believe that the ratio of the annual total compensation of Mr. Broughton, our Chief Executive Officer, to the median of the annual total compensation of all our employees in 2017 was 18.53 to 1.
Annual Base Salary
The Compensation Committee endeavors to establish base salary levels for executives that are consistent and competitive with those provided for similarly situated executives of other similar financial institutions, taking into account each executive’s areas and level of responsibility.
For the year ended December 31, 2015,2017, the Compensation Committee increased the base salaries of our named executive officers as follows:
| • | CEO: To | ||
| • | CFO: To | |
| • | COO: To | |
| • | Executive for Correspondent Banking: To | |
| • | CCO: To | |
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None of our named executive officers have employment agreements, although two of our named executive officers have change in control agreements. See “Potential Payments Upon Termination or Change in Control” below for a more detailed discussion.
Annual Short-Term Cash Incentive Compensation
For the year ended December 31, 2015,2017, the Compensation Committee relied on various performance measurements for definingdetermining executive officer cash incentive compensation for the named executive officers which included, among others, our net income, asset growth and loan growth, the executive’s individual production and our asset quality. Each of the performance measurements was applied and determined at the discretion of the Compensation Committee. The potential award level for Mr. Broughton is purely discretionary, but the potential cash award level for each of our other named executive officers is generally limited to 50% of their respective base salaries. The Compensation Committee also has discretionary authority to establish “stretch” performance goals for individual officers, potentially allowing for cash incentive compensation in excess of 50% of an officer’s base salary. In 2015,2017, the Committee established such “stretch” goals for Messrs. Foshee, Pouncey and Rushing, meaning that each of such officers had the opportunity to earn cash incentive compensation of 60% or more of their respective base salaries. Mr. Owens has “stretch” performance goals that would potentially allow for cash incentive compensation of 30% of his base salary. We do not have any contractual obligations to provide the opportunity to earn specified levels of cash incentive compensation or to limit cash incentive compensation to a specified percentage, and thus such determination is entirely within the discretion of the Compensation Committee. The Compensation Committee makes a determination of awards based on the information available to it at the time the award is made. As discussed in more detail in “Corporate Governance — Governance—Other Governance Practices — Practices—Incentive Compensation Clawback Policy,” our board adopted a Clawback Policy to recover awards or payments if the relevant company performance measures upon which they are based are restated in a manner that would reduce the size of an award or payment.
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Many of the measurable performance factors for each of our named executive officers other than Mr. Broughton, as well as actual 2015 results, are listed in the table below:
| | | | | | ||||||
| Name | Performance Factor | Threshold | Target | Maximum | 2015 Actual | ||||||
| ($ in thousands) | |||||||||||
| Foshee | Company Net Income | $54,000 | $57,970 | $59,950 | $63,260 | ||||||
| Pouncey | Company Net Income | $54,000 | $57,970 | $59,950 | $63,260 | ||||||
| NPAs & ORE/Loans less than: | 1% | 1% | 1% | Less than 1% | |||||||
| Watchlist Loans/Loans <5% at 12/31/15 | 5% | 5% | 5% | Less than 5% | |||||||
| Rushing | Correspondent Banking New Credit Card Accounts | 1,300 | 1700 | 2000 | 2,296 | ||||||
| Correspondent Banking Loan Growth | $30,000 | $40,000 | $50,000 | $11,742 | |||||||
| Correspondent Banking Deposit Growth | $35,000 | $55,000 | $70,000 | $48,192 | |||||||
| Correspondent Banking Federal Funds Growth | $25,000 | $35,000 | $60,000 | $88,045 | |||||||
| Owens | Classified Items Coverage Ratio/Tier 1 Capital and ALLL | <18% | <14% | <10% | 7.49% | ||||||
| Nonperforming Assets/Total Loans and OREO | <.80% | <.70% | <.60% | 0.31% | |||||||
| Net Credit Expenses | <.20% | <.18% | <.14% | 0.16% | |||||||
| Compliance Goals | Satisfactory | Satisfactory | Satisfactory | Satisfactory | |||||||
| Average Loan Growth | $466,000 | $652,000 | $932,000 | $768,963 | |||||||
Although the achievement of any of the specific and objective numerical targets set by the Compensation Committee does not alone ensure an incentive compensation award, the Compensation Committee believed that, based upon our overall performance and the specific individual performance levels of our named executive officers, it was appropriate to provide significant cash incentive bonuses to all of our named executive officers for 2015.2017. Accordingly, for the year ended December 31, 20152017 and based upon the attainment of the specific objective numerical targets, our overall performance and such officers’ individual performance for 2015,2017, the Compensation Committee awarded the cash incentive compensation set forth in the table below.
The table below details, for each named executive officer, the range of cash incentive compensation each was eligible to earn (expressed as a percentage of base salary), cash incentive compensation paid as a percentage of base salary and cash incentive compensation paid for 20152017 performance.
| Name | 2017 Incentive Range (%) | 2017 Incentive as a Percentage of Base Salary (%) | 2017 Incentive Paid ($) | |||||||
| Thomas A. Broughton III | None | 147.06 | % | $625,000 | ||||||
| William M. Foshee | 0%-60% | 57.41 | % | $155,000 | ||||||
| Clarence C. Pouncey III | 0%-60% | 60.00 | % | $180,000 | ||||||
| Rodney E. Rushing | 0%-60% | 60.14 | % | $172,000 | ||||||
| Don G. Owens | 0%-30% | 25.24 | % | $ 53,000 | ||||||
| | | | |||||||||
| Name | 2015 Incentive Range (%) | 2015 Incentive as a Percentage of Base Salary (%) | 2015 Incentive Paid ($) | |||||||||
| Thomas A. Broughton III | None | 126.67 | % | $ | 475,000 | |||||||
| William M. Foshee | 0% – 60% | 61.22 | %(1) | $ | 150,000 | |||||||
| Clarence C. Pouncey III | 0% – 60% | 60.00 | % | $ | 165,000 | |||||||
| Rodney E. Rushing | 0% – 60% | 50.00 | % | $ | 130,000 | |||||||
| Don G. Owens | 0% – 30% | 29.79 | % | $ | 58,000 | |||||||
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Equity-Based Incentive Compensation
In general, we have granted stock options to our executive officers only in connection with their initial hiring, but with vesting schedules designed to enhance their retention and align their interests with those of our stockholders. These stock options generally vest fully within seven years from their date of grant, with many grants not beginning to vest until three years following their date of grant. However, in recognition of the contributions made by our Chief Executive Officer, Mr. Broughton has received both stock options and restricted stock awards from time to time. Mr. Foshee, our Chief Financial Officer, has also received additional stock option grants since his initial hiring. None of our named executive officers other than Mr. Broughton, received grants of stock-based awards during the year ended December 31, 2015.2017. See “Executive Compensation — Outstanding Equity Awards at Fiscal Year-End” for a detailed description of the vesting schedules of each of the options granted to the named executive officers that were outstanding at December 31, 2015.2017.
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Our Stock Incentive Plans allow for the accelerated vesting of equity awards in the event of a change in control. In general, under these Plans a “change in control” means a reorganization, merger or consolidation of the company or the bank with or into another entity where our stockholders before the transaction own less than 50% of our combined voting power after the transaction, a sale of all or substantially all of our assets or a purchase of more than 50% of the combined voting power of our outstanding capital stock in a single transaction or a series of related transactions by one “person” (as that term is used in Section 13(d) of the Exchange Act) or more than one person acting in concert.
Severance and Change in Control
We do not have an employment or other agreement with Messrs. Broughton, Rushing or Owens that would require us to pay them severance payments upon termination of employment. We have entered into change in control agreements with Mr. Foshee and Mr. Pouncey. See “Executive Compensation — Potential Payments Upon Termination or Change in Control” for more information.
Key Policies and Supplemental Information
Director Resignation Policy: In the event that, in an uncontested election, a director receives more “Withhold” votes than votes “For” his or her election, such director shall promptly tender his or her resignation to the Chairman of our board. The company’s CG&N Committee will then consider the offer of resignation and make a recommendation to our board which, in turn, must act on the recommendation.
Robust Clawback Policy:In the event the company is required to restate financial results, the Compensation Committee may adjust future compensation, cancel outstanding stock or performance-based awards, or seek recoupment of previous awards from company officers.
Significant Executive Investment in Company Stock:Long-term stock ownership is deeply engrained in our culture, and it reflects our board’s strong commitment to the company’s success. For more information, see “Corporate Governance — Governance—Other Governance Practices — Practices—Stock Ownership of Board and Executives.”
Restrictions on Hedging or Pledging Company Stock: Executive officers and directors of the company are not permitted to use options, contracts or other arrangements to hedge their holdings of company stock. They also are prohibited from pledging company stock as security for loans without approval from our Insider Trading Compliance Officer.
The Compensation Committee of the board of directors of ServisFirst Bancshares, Inc. has reviewed and discussed the Compensation Discussion and Analysis for the company for the year ended December 31, 20152017 with management. In reliance on the reviews and discussions with management, the Compensation Committee recommended to the board of directors, and the board of directors has approved, that the Compensation Discussion and Analysis be included in the required company filings with the SEC, including the Proxy Statement for the 20162018 Annual Meeting of Stockholders.
The Compensation Committee Report shall not be deemed incorporated by reference in any document previously or subsequently filed with the SEC that incorporates by reference all or any portion of this Proxy Statement.
Submitted by the Compensation Committee:
Hatton C. V.C.V. Smith, Chairman
J. Richard Cashio
James J. Filler
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The following table sets forth the aggregate compensation paid by us or the bank to our named executive officers:
| | | | | | | | | | |||||||||||||||||||||||||||
| Name and Principal Position Held (a) | Year (b) | Salary (c) | Bonus (d) | Stock Awards (e) | Option Awards(1) (f) | Non-Equity Incentive Plan Comp (g) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings (h) | All Other Compensation (i) | Total (j) | |||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||
| Thomas A. Broughton III President and Chief Executive Officer | 2015 | 375,000 | 475,000 | — | 136,325 | — | — | 59,486 | (2) | 1,045,811 | ||||||||||||||||||||||||||
| 2014 | 350,000 | 375,000 | — | — | — | — | 59,030 | 784,030 | ||||||||||||||||||||||||||||
| 2013 | 315,000 | 325,000 | — | — | — | — | 57,080 | 697,080 | ||||||||||||||||||||||||||||
| Clarence C. Pouncey III EVP and Chief Operating Officer | 2015 | 275,000 | 165,000 | — | — | — | — | 26,358 | (3) | 466,358 | ||||||||||||||||||||||||||
| 2014 | 263,000 | 157,800 | — | — | — | — | 25,390 | 446,190 | ||||||||||||||||||||||||||||
| 2013 | 255,000 | 90,000 | — | — | — | — | 24,587 | 369,587 | ||||||||||||||||||||||||||||
| William M. Foshee EVP and Chief Financial Officer | 2015 | 245,000 | 150,000 | — | — | — | — | 29,355 | (4) | 424,355 | ||||||||||||||||||||||||||
| 2014 | 230,000 | 138,000 | — | — | — | — | 23,521 | 391,521 | ||||||||||||||||||||||||||||
| 2013 | 220,000 | 121,000 | — | — | — | — | 19,996 | 360,996 | ||||||||||||||||||||||||||||
| Rodney E. Rushing EVP and Executive for Correspondent Banking | 2015 | 260,000 | 130,000 | — | — | — | — | 29,291 | (5) | 419,291 | ||||||||||||||||||||||||||
| 2014 | 245,000 | 147,000 | — | — | — | — | 27,785 | 419,785 | ||||||||||||||||||||||||||||
| Don G. Owens SVP and Chief Credit Officer | 2015 | 194,688 | 58,000 | — | — | — | — | 24,755 | (6) | 277,443 | ||||||||||||||||||||||||||
| 2014 | 187,200 | 46,612 | — | — | — | — | 21,865 | 255,677 | ||||||||||||||||||||||||||||
| Name and Principal Position Held (a) | Year (b) | Salary (c) | Bonus (d) | Stock Awards (e) | Option Awards(1) (f) | Non-Equity Incentive Plan Comp (g) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings (h) | All Other Compensation (i) | Total (j) | |||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||
| Thomas A. Broughton III | 2017 | 425,000 | 625,000 | - | - | - | - | 61,113 | (2) | 1,111,113 | ||||||||||||||||||||||||||
| President and Chief | 2016 | 400,000 | 500,000 | - | - | - | - | 61,076 | 961,076 | |||||||||||||||||||||||||||
| Executive Officer | 2015 | 375,000 | 475,000 | - | 136,325 | - | - | 59,486 | 1,045,811 | |||||||||||||||||||||||||||
| Clarence C. Pouncey III | 2017 | 300,000 | 180,000 | - | - | - | - | 27,177 | (3) | 507,177 | ||||||||||||||||||||||||||
| EVP and Chief | 2016 | 286,000 | 180,000 | - | - | - | - | 26,517 | 492,517 | |||||||||||||||||||||||||||
| Operating Officer | 2015 | 275,000 | 165,000 | - | - | - | - | 26,358 | 466,358 | |||||||||||||||||||||||||||
| William M. Foshee | 2017 | 270,000 | 155,000 | - | - | - | - | 29,510 | (4) | 454,510 | ||||||||||||||||||||||||||
| EVP and Chief | 2016 | 255,000 | 165,000 | - | - | - | - | 29,510 | 449,510 | |||||||||||||||||||||||||||
| Financial Officer | 2015 | 245,000 | 150,000 | - | - | - | - | 29,355 | 424,355 | |||||||||||||||||||||||||||
| Rodney E. Rushing | 2017 | 286,000 | 172,000 | 33,361 | (5) | 491,361 | ||||||||||||||||||||||||||||||
| EVP and Executive for | 2016 | 273,000 | 164,000 | - | - | - | - | 33,274 | 470,274 | |||||||||||||||||||||||||||
| Correspondent Banking | 2015 | 260,000 | 130,000 | - | - | - | - | 29,291 | 419,291 | |||||||||||||||||||||||||||
| Don G. Owens | 2017 | 210,000 | 53,000 | 25,649 | (6) | 288,649 | ||||||||||||||||||||||||||||||
| SVP and Chief Credit | 2016 | 203,000 | 60,000 | - | - | - | - | 25,603 | 288,603 | |||||||||||||||||||||||||||
| Officer | 2015 | 194,688 | 58,000 | - | - | - | - | 24,755 | 277,443 | |||||||||||||||||||||||||||
| (1) | The amount in this column reflects the aggregate grant date fair value under FASB ASC Topic 718 of awards made during the applicable year. |
| (2) | All Other Compensation for |
| (3) | All Other Compensation for |
| (4) | All Other Compensation for |
| (5) | All Other Compensation for |
| (6) | All Other Compensation for |
SERVISFIRST BANCSHARES, INC.– Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | 21 |
Grants of Plan-Based Awards for Fiscal 20152017
The table below sets forth information regardingcompany did not make any grants of plan-based awards to our named executive officers during 2015, all of which were granted under our 2009 Amended and Restated Stock Incentive Plan:2017.
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| Name (a) | Grant Date (b) | All Other Stock Awards: Number of Shares of Stock or Units (i) | All Other Option Awards: Number of Securities Underlying Options (j) | Exercise or Base Price of Option Awards (k) | Grant Date Fair Value (l) | |||||||||||||||
| (#) | (#) | ($/Sh) | ($) | |||||||||||||||||
| Thomas A. Broughton III (PEO) | 1/20/2015 | — | 10,000 | 30.17 | 73,600 | |||||||||||||||
| 6/15/2015 | — | 6,500 | 37.14 | 62,725 | ||||||||||||||||
SERVISFIRST BANCSHARES, INC. –Notice of 2016 Annual Meeting of Stockholders and Proxy Statement21
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