Washington, D.C. 20549
WEST BANCORPORATION, INC.
WEST BANCORPORATION, INC.
Whether or not you expect to attend the Annual Meeting, in order to make sure your vote is received, please complete and return the enclosed proxy card or vote your proxy electronically via the internet email, or fax as instructed on the proxy card. A prompt response would be appreciated.
We hope you will personally attend the Annual Meeting, and we look forward to seeing you there. Thank you for your interest in theour Company.
/s/ David R. Milligan
David R. Milligan
West Bancorporation, Inc.
WEST BANCORPORATION, INC.
A proxy is a document, also referred to as a "proxy card," on which you authorize someone else to vote for you in the way that you want to vote. The proxy holders will vote your shares as you have instructed, thereby ensuring your shares will be voted whether or not you attend the Annual Meeting. You may also choose to abstain from voting.
A proxy statement is a document required by the Securities and Exchange Commission (the "SEC") that, among other things, explains the items on which you are asked to vote on the proxy card.
When you sign the enclosed proxy card or otherwise vote pursuant to the instructions set forth in the proxy card, you appoint the proxy holders designated on the proxy card as your representatives at the meeting. The proxy holders will vote your shares as you have instructed, thereby ensuring your shares will be voted whether or not you attend the Annual Meeting. Even if you plan to attend the Annual Meeting, we ask that you instruct the proxies how to vote your shares in advance of the meeting just in case your plans change.
You will receive more than one proxy card if you have multiple holdings reflected in our stock transfer records and/or in accounts with brokers. Please sign and return ALL proxy cards to ensure that all of your shares are voted.
These matters are more fully described in this proxy statement. We are not aware of any other matters that will be voted on at the Annual Meeting. However, if any other business properly comes before the meeting, the persons named as proxies for stockholders will vote on such matters in a manner they consider appropriate.
How do I vote?
After reviewing this document, please submit your proxy using any of the voting methods indicated on the proxy card. By submitting your proxy, you authorize the individuals named in it to represent you and vote your shares at the Annual Meeting in accordance with your instructions. Your vote is important. Whether or not you plan to attend the Annual Meeting, please submit your proxy card promptly in the enclosed envelope or through the internet email, or fax by following the instructions on the proxy card.
If you sign and return your proxy card but do not mark the card to provide voting instructions, the shares represented by your proxy card will be voted "FOR" all 1413 nominees named in this proxy statement, "FOR" the say-on-pay proposal, and "FOR" the ratification of the appointment of McGladreyRSM US LLP as our independent registered public accounting firm for the 20132016 fiscal year.
If you are a beneficial owner and a broker or other fiduciary is the record holder of your shares (which is usually referred to as "street name" ownership), then you received this proxy statement from the record holder of the shares that you beneficially own. The record holder should have given you instructions for directing how the record holder should vote your shares. It will then be the record holder's responsibility to vote your shares in the manner you direct.
If you want to vote in person, please come to the meeting.Annual Meeting. We will distribute ballots to anyone who wants to vote at the meeting. Please note, however, that if your shares are held in the name of a broker or other fiduciary (i.e. in street name), you will need to arrange to obtain a legal proxy from the record holder in order to vote in person at the meeting. Even if you plan to attend the Annual Meeting, we ask that you complete and return your proxy card or vote via the internet email, or fax in advance of the Annual Meeting in case your plans change.
If I hold shares in the name of a broker, who votes my shares?
Under the rules of various nationalIf your broker holds your shares in its name and regional securities exchanges, brokers and other fiduciaries that hold securities on behalf of beneficial owners generally may vote on routine matters even if theyyou have not receivedprovided voting instructions fromfor your shares, your broker may choose to either leave your shares unvoted or vote your shares on certain "routine" matters on which the beneficial owners for whom they hold securities, but they are not permittedbroker is deemed to vote on non-routine matters unless they have receiveddiscretionary voting instructions from you.authority. The ratification of the appointment of an issuer's independent registered public accounting firm is considered a routine matter, while the election of directors and say-on-pay proposals are both considered non-routinenonroutine matters. Thus, if you do not provide instructions to your broker as to how it should vote the shares beneficially owned by you, your broker will be able to vote on the ratification of the appointment of McGladreyRSM US LLP as our independent registered public accounting firm but generally will not be permitted to vote on the election of directors or say-on-pay proposal. If your broker does not receive instructions from you on how to vote on a particular matter on which your broker does not have discretionary authority to vote, your broker will return the proxy to us indicating the broker does not have authority to vote on these matters. This is generally referred to as a "broker non-vote" with respect to the nonroutine matters and will affect the outcome of the voting as described below under "What options do I have in voting on each of the proposals?" Therefore, we encourage you to provide directions to your broker as to how you want your shares voted on all matters brought before the Annual Meeting.
If I hold shares in the West Bancorporation Employee Savings and Stock Ownership Plan, who votes my shares?
If you are a holder of stock in the Company's Employee Savings and Stock Ownership Plan (the "Plan"), you can direct the Trustee of the Plan how to vote the number of shares you hold in the Plan for each proposal included in this proxy statement. If you do not provide timely voting directions to the Trustee, then the Trustee shall vote the shares held for your benefit in the same proportion as those shares of stock held in the Plan for which the Trustee has received proper directions for voting.
What if I change my mind after I return my proxy?
If you hold your shares in your own name, you may revoke your proxy and change your vote at any time before the polls close atfor the meeting. You may do this by:
signing another proxy card with a later date and returning that proxy card to ist Shareholder Services, 433 S. Carlton Ave., Wheaton, Illinois 60187; | |
• | signing another proxy card with a later date and returning that proxy card to American Stock Transfer & Trust Company, LLC, Operations Center, 6201 15th Avenue, Brooklyn, NY 11219, Attn: Proxy Dept.; |
timely submitting another proxy via the internet, email, or fax, if that is the method you originally used to submit your proxy;
sending notice to us at the address below that you are revoking your proxy; or
voting in person at the meeting.
All written notices of revocation and other written communications with respect to revocation of proxies should be sent to West Bancorporation, Inc., 1601 22nd22nd Street, West Des Moines, Iowa 50266, Attention: Corporate Secretary. If you hold your shares in the name of your broker and desire to revoke your proxy, you will need to contact your broker.
How many votes do we need to hold the Annual Meeting?
A majority of the shares that are outstanding andshares entitled to vote as of the record dateRecord Date must be present in person or by proxy at the meeting in order to hold the meeting and conduct business. Shares are counted as present at the meeting if the stockholder either:
is present and votes in person at the meeting; or
has properly submitted a signed proxy card or other form of proxy (through the internet, email, or fax)internet).
On February 21, 2013, the record date,Record Date, there were 17,403,88216,064,435 shares of common stock issued and outstanding.outstanding, all of which were entitled to vote. Therefore, at least 8,701,9428,032,218 shares need to be present, in person or by proxy, at the Annual Meeting.
What happens if a nominee is unable to stand for re-election?
The boardBoard of directorsDirectors may, by resolution, provide for a lesser number of directors or designate a substitute nominee. In the latter case, shares represented by proxies may be voted for a substitute nominee at the discretion of the proxy holders. Proxies cannot be voted for more than 1413 nominees. We have no reason to believe any nominee will be unable to stand for election.
What options do I have in voting on each of the proposals?
The directors are elected by a plurality, and the 1413 nominees receiving the greatest number of votes cast "FOR" their election will be elected as directors of the Company. Votes withheld from any nominee have no legal effect on the election of directors due to the fact that such elections are by a plurality of the votes cast.
The affirmative vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote is required to approve the 20122015 compensation of the named executive officers and the ratification of the appointment of McGladreyRSM US LLP as our registered independent public accounting firm for the fiscal year ending December 31, 20132016.
The vote on our executive compensation is advisory and is not binding on the directors of the Company. However, the Compensation Committee of the Board will consider stockholder votes in establishing our compensation plans for subsequent years.
Broker non-votes will not be counted as entitled to vote, but will count for purposes of determining whether or not a quorum is present on the matter.present. So long as a quorum is present, broker non-votes will have no effect on the outcome of the matters to be presented for a vote at the Annual Meeting.
The proxy card included in this proxy statement indicates the number of shares owned by an account attributable to you.
Where do I find the voting results of the meeting?Annual Meeting?
We will announce preliminary voting results at the meeting.Annual Meeting. The voting results will also be disclosed in a Current Report on Form 8-K that we will file with the SEC within four business days after the meeting.
Who bears the cost of soliciting proxies?
The Company will bear the cost of soliciting proxies. In addition to solicitations by mail, our officers, directors or employees, without extra compensation, may solicit proxies in person, via email or by telephone. We may reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to stockholders.
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR MARKED AND SIGNED PROXY CARD PROMPTLY SO YOUR SHARES CAN BE REPRESENTED, EVEN IF YOU PLAN TO ATTEND THE MEETING IN PERSON.
PROPOSALS FOR ANNUAL MEETING
Item 1. Election of Directors.
The Company's Bylaws of the Company provide that the number of directors of the Company shall not be less than 5 nor greater than 15. The Board currently consists of 1114 members. For reasons explained below inOn April 28, 2015, Dr. Thomas A. Carlstrom informed the ReportChairman of the NominatingCompany of his intention to retire from the Board and Corporate Governance Committee,therefore not stand for re-election to the Board at the Annual Meeting. As a result, his directorship will end at the Annual Meeting, and the Board has settaken action to reduce the number of directors forfollowing the Annual Meeting to 2013 at 1413. Proxies cannot be voted for more than 1413 persons.
The term for directors is until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified or until their earlier resignation, removal from office, death or incapacitation.
The Board recommends a vote "FOR" each of the nominees listed in the table below.
Properly executed proxies in the accompanying form will be voted "FOR" the election of the listed individuals, unless contrary instructions are given. If any nominee or nominees shall become unavailable for election, it is intended that the size of the Board will be reduced accordingly, provided that the number of nominees shall not be less than 5.five. Any stockholder has the option to withhold authority to vote for any or all nominees or to withhold authority to vote for individual nominees. Votes withheld from any nominee have no legal effect on the election of directors due to the fact that such elections are by a plurality of the votes cast.
Information concerning the nominees, including their ages, year first elected as a director of West Bancorporation, Inc., and business experience during the previous five years as of February 21, 201319, 2016, is set forth in the table and narrative description of each director's experience below. All of the nominees except Michael J. Gerdin, Sean P. McMurray, and Philip Jason Worth, are currently serving as directors of the Company. All of the nominees, except Mr. GerdinCompany and Mr. McMurray, are currently serving as directors of the Company's wholly-owned subsidiary, West Bank.
|
| | |
Name (Age) | Has Served as Director Since | Principal Occupation and/or Position with Company and West Bank and Location |
Frank W. Berlin (Age 67)70) | 1995 | Consultant, Frank W. Berlin & Associates, and Director of the Company and West Bank West Des Moines, Iowa |
Thomas A. Carlstrom
(Age 67)
| 2009 | Neurosurgeon, private practice, and Director of the Company and West Bank
Des Moines, Iowa
|
Joyce A. Chapman (Age 68)71) | 2009 | Retired and Director of the Company and West Bank Des Moines, Iowa |
Steven K. Gaer (Age 52)55) | 2011 | Chief Operating Officer and General Counsel, R&R Realty Group, and Director of the Company and West Bank West Des Moines, Iowa |
Michael J. Gerdin (Age 43)46) | -2013 | Chairman and Chief Executive Officer, Heartland Express, Inc., and Director of the Company and West Bank North Liberty, Iowa
|
Kaye R. Lozier (Age 67)70) | 2009 | DirectorOwner and President of Donor Relations, Community Foundation of Greater Des Moines,Lozier Consulting,
and Director of the Company and West Bank Des Moines, Iowa |
Sean P. McMurray (Age 45)48) | -2013 | Senior Vice President, Equifax,Chief Executive Officer, AgSolver, Inc., and Director of the Company and West Bank
Clive, Iowa |
David R. Milligan (Age 65)68) | 2009 | Chairman and Director of the Company and Director of West Bank West Des Moines, Iowa |
George D. Milligan (Age 56)59) | 2005 | President, The Graham Group, Inc., and Director of the Company and West Bank Des Moines, Iowa |
David D. Nelson (Age 52)55) | 2010 | Chief Executive Officer, President and Director of the Company; Chairman, Chief Executive Officer and Director of West Bank West Des Moines, Iowa |
James W. Noyce (Age 57)60) | 2009 | Retired Interim Chief Executive Officer of the YMCA of Greater Des Moines,
and Director of the Company and West Bank West Des Moines, Iowa |
Robert G. Pulver (Age 65)68) | 1984 | President and Chief Executive Officer, All-State Industries, Inc., and Director of the Company and West Bank West Des Moines, Iowa |
Lou Ann Sandburg (Age 64)67) | 2011 | Retired and Director of the Company and West Bank Clive, Iowa |
Philip Jason Worth (Age 41)44) | -2013 | Sales Manager, Gilcrest/Jewett Lumber Company, and Director of the Company and West Bank West Des Moines, Iowa |
The particular experiences, qualifications, attributes and skills that led the Board to conclude that each nominee should serve as a director are as follows.follows:
Frank W. Berlin has served as a Directordirector of West Bank since 1995. Mr. Berlin is a consultant and former President of Frank W. Berlin & Associates, a West Des Moines company specializing in employee benefits. He also has extensive knowledge and experience with executive compensation programs.
Thomas A. Carlstrom has served as a Director of West Bank since 1996. Dr. Carlstrom is a neurosurgeon in private practice in Des Moines. He has extensive knowledge of and familiarity with the Central Iowa business community.
Joyce A. Chapman has served as a Directordirector of West Bank since 1975. Mrs. Chapman served as an officer of West Bank from 1971 until she retired as Executive Vice President in 2006. During her career at West Bank, she served in a variety of capacities, covering virtually all aspects of bank administration and operation. Mrs. Chapman is also a board member of the public company American Equity Investment Life Holding Company of West Des Moines, Iowa. She has extensive knowledge and experience with bank practices and procedures.
Steven K. Gaer has served as a Directordirector of West Bank since 2011. Mr. Gaer is Chief Operating Officer and General Counsel for R&R Realty Group, Centralcentral Iowa's largest commercial real estate development, management and investment company. He has extensive knowledge of commercial real estate structuring, development, financing and underwriting. He is also currently serving as the Mayor of the City of West Des Moines, Iowa;Iowa, a position he has held since April 2007. Mr. Gaer is also serving on the following boards: Greater Des Moines Partnership; Choose Des Moines Communities;Regional Economic Development Board; Metropolitan Planning Organization; and the County Assessor Boards for Polk, Dallas, Madison and Warren counties.
Michael J. Gerdin has served as a director of West Bank since 2013. Mr. Gerdin is the Chairman and Chief Executive Officer of Heartland Express, Inc., which is a publicly traded company that is a short-to-medium haul truckload carrier with corporate headquarters in North Liberty, Iowa. From 1998 to 2001, he was President of A&M Express, a wholly-owned subsidiary of Heartland Express. In 2001, Mr. Gerdin was appointed as Vice-PresidentVice President of Regional Operations, and in 2006 he was appointed as President of the Company.Heartland Express, Inc. He became Chairman and Chief Executive Officer in 2011. Mr. Gerdin has familiarity with the Easterneastern Iowa business community and has extensive experience in a public company environment.
Kaye R. Lozier has served as a Directordirector of West Bank since 2005. Mrs. Lozier is the owner and President of Lozier Consulting and served as the Director of Donor Relations for the Community Foundation of Greater Des Moines.Moines until June 2015. She is involved in the Des Moines area, serving ason the Executive Committee of Restoration Ingersoll and Chair forof the Des Moines Enterprise ZoneTerrace Hill Commission.
Sean P. McMurray has served as a director of West Bank since 2013. Mr. McMurray currently serves as Chief Executive Officer of AgSolver, Inc., a technology company, a position he has held since 2014. Mr. McMurray founded DataVision Resources and served as the Chief Executive Officer and founder of DataVision Resources for the past fifteen years.15 years until DataVision Resources was recently acquired by Equifax, Inc., and he now serves in 2011. Mr. McMurray served as a Senior Vice President at Equifax, Inc. Equifax specializes in the development and implementation of information technology platforms designed to enhance data and workflow processes and solutions. In conjunction with DataVision and Equifax,until May 2013. Mr. McMurray has provided assistance to notable financial services companies, including Wells Fargo & Co., Bankserved as the Chairman of America, and The Principal Financial Group.SmartyPig, LLC until its sale in November 2015. Previously, he was the Chief Technology Officer of SmartyPig, LLC and was principally responsible for managing the integration with SmartyPig, LLC partner banks. This included satisfying all regulatory and compliance issues, monitoring risk and security during and postafter integration, and designing accounting and tax solutions onfor the financial aspects of SmartyPig, LLC, and managing training and interaction between SmartyPig, LLC and the partner banks.LLC. He has also helped to build and design the business platform for Businessolver, LLC, where he serves as an owner and board member. Mr. McMurray has extensive knowledge relatedabout technology relevant to technology in the financial services industry.
David R. Milligan has served as a Directordirector of West Bank since 2000. Mr. Milligan has served as Chairman of the Company since April 2010. Mr. Milligan joined West Bank in 1980 and served in various capacities, including General Counsel. He retired as Executive Vice President of the Company and as Chairman and Chief Executive Officer of West Bank on December 31, 2004. He served as a Directordirector of the Company from 2002 through 2004, and as Vice Chairman of West Bank until December 2006. He was a self-employed attorney and “Of Counsel” with Ahlers & Cooney, P.C. of Des Moines, Iowa, from March 2007 through February 2009. Mr. Milligan resumed part-time employment with West Bank in February 2009 and full-time employment in May 2009. Mr. Milligan was elected interim Chief Executive Officer of the Company and interim Chief Executive Officer and Chairman of West Bank in July 2009 and served in those positions until April 1, 2010. He then served as Executive Vice President of West Bank from April 1, 2010 through April 30, 2010. He has extensive knowledge of bank regulatory matters, loan portfolio management and corporate governance.
George D. Milligan has served as a Directordirector of West Bank since 1994. Mr. Milligan is President of the Graham Group, Inc., a Des Moines, Iowa-based real estate development and investment company. He has extensive knowledge of commercial real estate financing and underwriting. He is also a board member of the public company United Fire & Casualty Company of Cedar Rapids, Iowa.
David D. Nelson has served as a Directordirector of West Bank since 2010. Mr. Nelson joined the Company on April 1, 2010, as Chief Executive Officer and President and as Chairman and Chief Executive Officer of West Bank. Mr. Nelson has more than 2730 years of experience in commercial banking. Prior to joining the Company, he was the President of Southeast Minnesota Business Banking and President of Wells Fargo Bank Rochester in Rochester, Minnesota. He has strong backgrounds in customer relationship building, credit and leadership development.
James W. Noyce has served as a Directordirector of West Bank since 2009. Mr. Noyce currently serves as the interim Chief Executive Officer of the YMCA of Greater Des Moines. Mr. Noyce has nearlyover three decades of experience in the financial services industry, most recentlyand previously served as the Chief Executive Officer of FBL Financial Group, Inc., a publicly traded financial services company, and Farm Bureau Financial Services Companies from January 2007 through April 2009, and Chief Financial Officer from January 1996 through December 2006. Prior to that, Mr. Noyce held various positions with FBL Financial Group, Inc. and Farm Bureau Financial Services Companies, including Controller and Vice President. He served on the Advisory Committee to Farm Bureau Bank for approximately seven years until May 2009. Mr. Noyce served as the Senior Advisor and Major Gifts Officer for Drake University Athletics from August 2009 to November 2010. Mr. Noyce is a board member of the public company United Fire & Casualty Company of Cedar Rapids, Iowa. He is also a board member of the registered investment company Berthel Fisher Financial Services, Inc. of Marion, Iowa. He is an audit committee financial expert and serves as Chair of the Audit Committee. Mr. Noyce is a Certified Public Accountant (inactive), a Fellow of the Casualty Actuarial Society and an Associate of the Society of Actuaries.
Robert G. Pulver has served as a Directordirector of West Bank since 1981. He has also served as Vice Chairman of the Board sincefrom July 2009.2009 until April 2014. Mr. Pulver is the President and Chief Executive Officer of All-State Industries, Inc., an industrial rubber products manufacturer, which he founded and has operated for 3740 years.
Lou Ann Sandburg has served as a Directordirector of West Bank since 2011. Mrs. Sandburg served as Vice President of Investments at FBL Financial Group, Inc., a publicly traded financial services company, located in West Des Moines, Iowa, from 1998 until her retirement in 2008. From 1980 through 1998, Mrs. Sandburg managed various fixed-income portfolios at FBL.FBL Financial Group, Inc. Mrs. Sandburg is a board member of the registered investment company Berthel Fisher Financial Services, Inc. of Marion, Iowa. She is also a chartered financial analyst.
Philip Jason Worth has served as a Directordirector of West Bank since 2011. HeMr. Worth grew up in West Des Moines, Iowa, and has been working in the family business, Gilcrest/Jewett Lumber Company since 1999.1999 and is currently the sales manager. Gilcrest/Jewett Lumber Company was founded in 1856, and Mr. Worth represents the sixth generation of ownership. The company supplies building materials to general contractors and homeowners in Centralcentral and Easterneastern Iowa and employs 230290 people at four retail locations. The company focuses on building strong, lasting relationships, extending and managing theirits own credit, and staying active in the communities it serves. Mr. Worth has extensive knowledge of and familiarity with the real estate construction business in the Company's primary markets.
As noted above, with the exception of Mrs. Chapman, who is a director of American Equity Investment Life Holding Company, Mr. Gerdin, who is a director of Heartland Express, Inc., Mr. G. Milligan, who is a director of United Fire & Casualty Company, Mr. Noyce, who is a director of United Fire & Casualty Company and Berthel Fisher Financial Services, Inc., and Mrs. Sandburg, who iswas a director of Berthel Fisher Financial Services, Inc., until May 2014, Mrs. Sandburg, who was a director of Berthel Fisher Financial Services, Inc. until May 2014, and Mr. Pulver, who was a director of The Summit Group through early 2012, none of the other above nominees hold a directorship in any other company with a class of securities registered pursuant to Section 12 or subject to Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or registered as an investment company under the Investment Company Act of 1940. Those are the only directorships whichthat require disclosure that have been held by the nominees in the past five years except for Mr. Pulver who was previously a director of The Summit Group.years.
None of the nominees for director or executive officers of the Company have any family relationship with any other nominees or with any executive officers of the Company. There are no arrangements or understandings between any of the nominees and any other person pursuant to which he or she was selected as a nominee.
Item 2. Approve the 20122015 Compensation of the Company's Named Executive Officers.
Section 14A of the Exchange Act, as created by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), enacted in July 2010, and the rules and regulations promulgated thereunder by the SEC, require publicly traded companies, such as the Company, to conduct an advisory stockholder vote to approve compensation of named executive officers. This proposal, commonly known as a “Say-on-Pay”“say-on-pay” proposal, gives stockholders the opportunity to endorse or not endorse the Company’s pay program for its named executive officers. We currently hold our says-on-paysay-on-pay vote every year.year, and the next frequency vote will be held at our 2018 Annual Meeting. The Company is requesting stockholder approval, on an advisory basis, of the compensation of the Company’s named executive officers for 20122015 as listed in the Summary Compensation Table, (appearing on page 28 ofappearing in the Executive Compensation section in this proxy statement)statement, and as described in more detail in the Compensation Discussion and Analysis section of this proxy statement. The Company believes that its executive compensation programs, as explained in the Executive Compensation section of this proxy statement, are straightforward and reasonable. As explained in the Compensation Discussion and Analysis section, the general objectives of, and important factors for, the Company's executive compensation program include significant emphasis on the long-term success of the Company through long-term performance of its executives. Stockholders are urged to carefully read the Compensation Discussion and Analysis section of this proxy statement, as well as the Summary Compensation Table and narrative disclosures that describe the compensation of our named executive officers in 20122015. The Board has previously approved the 20122015 compensation.
The following resolution is submitted for stockholder approval:
"RESOLVED, that West Bancorporation, Inc.'s stockholders approve, on an advisory basis, its executive compensation as described in the section captioned 'Compensation Discussion and Analysis' and the tabular disclosure regarding named executive officer compensation under 'Executive Compensation' contained in the West Bancorporation'sBancorporation Inc. proxy statement dated March 6, 20133, 2016."
Approval of this resolution requires the number of votes cast for the proposal to exceed the number of votes cast against the proposal at the Annual Meeting. In tabulating this vote, abstentions will be disregarded and have no effect on the outcome of the vote. While this say-on-pay"say-on-pay" vote is required, as provided in Section 14A of the Exchange Act, it is not binding on the Board and may not be construed as overruling any decision by the Board. However, the Compensation Committee will take into account the outcome of the votes when considering future compensation arrangements.
The Board recommends a vote "FOR" approval of the 20122015 compensation of the named executive officers. Proxies in the accompanying form will be voted "FOR" approval of the 20122015 compensation of the named executive officers unless contrary instructions are given.
Item 3. Ratify the Appointment of Independent Registered Public Accounting Firm.
The Audit Committee of the Board has selected the accounting firm of RSM US LLP (formerly named McGladrey LLP,LLP), independent certified public accountants, as the independent registered public accounting firm for the Company for the year ending December 31, 20132016. McGladreyRSM US LLP will conduct the annual audit examination of the Company and its subsidiary for 20132016. McGladreyRSM US LLP was also the independent registered public accounting firm and performed the Company's audit for the years ending December 31, 20122015 and 20112014. The Company is asking its stockholders to ratify the appointment of McGladrey LLP.RSM US LLP as the Company's independent certified public accounting firm for 2016. For a description of the fees for services rendered by McGladreyRSM US LLP for 20122015 and 20112014, and a description of the Company's policy regarding the approval of independent registered public accountants' fees, see the Independent Registered Public Accounting Firm section of this proxy statement titled Independent Registered Public Accounting Firm.statement.
Although ratification by the stockholders is not required by law, the Board has determined that it is desirable to request stockholder approval of its appointment of McGladreyRSM US LLP. In the event the stockholders fail to ratify the appointment, the Audit Committee will consider this factor when making any future determination regarding McGladreyRSM US LLP. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of the Company and its stockholders.
Under applicable law, the ratification of the appointment of McGladreyRSM US LLP requires the number of votes cast for the proposal to exceed the number of votes cast against the proposal at the Annual Meeting. In tabulating the votes, abstentions on the ratification of the appointment of McGladreyRSM US LLP will be disregarded and have no effect on the outcome of the vote.
The Board recommends a vote "FOR" the ratification of the appointment of McGladreyRSM US LLP as our independent registered public accounting firm for the year ending December 31, 20132016. Proxies in the accompanying form will be voted "FOR" the ratification of the appointment of McGladreyRSM US LLP as the independent registered public accounting firm for the year ending December 31, 20132016, unless contrary instructions are given.
Item 4. Other Matters. Management does not know of any other matters to be presented at the Annual Meeting, but should other matters properly come before the Annual Meeting, the proxies will vote on such matters in accordance with their best judgment.
GOVERNANCE AND BOARD OF DIRECTORS
General
Generally, the Board oversees our business and monitors the performance of our management. In accordance with our corporate governance procedures, the Board does not involve itself in the day-to-day operations of the Company, which isare monitored by our executive officers and management. Our directors fulfill their duties and responsibilities by attending regular meetings of the full Board, which are generally held on a quarterly basis,scheduled for five times per year; special meetings which are held from time to time,time; and through committee membership, which is discussed below. Our directors also discuss business and other matters with our key executives and our principal external advisors, such as our legal counsel, auditors and other consultants.
The Board currently has 1114 directors, and will have 1413 directors after the Annual Meeting, if all nominees set forth in this proxy statement are elected. As previously disclosed, Dr. Thomas A. Carlstrom informed the Board on April 28, 2015, of his intention to retire and not stand for re-election at the Annual Meeting. The Board has determined that the following 913 existing directors are “independent” as defined by the Nasdaq Listing Rule 5605(a)(2) and Item 407 of Regulation S-K, and the Board has determined that the independent directors do not have other relationships with us that prevent them from making objective, independent decisions.
Frank W. Berlin
Thomas A. Carlstrom
Joyce A. Chapman
Steven K. Gaer
Michael J. Gerdin
Kaye R. Lozier
Sean P. McMurray
David R. Milligan
George D. Milligan
James W. Noyce
Robert G. Pulver
Lou Ann Sandburg
The Board has also determined that new nominees, Michael J. Gerdin, Sean P. McMurray, and Philip Jason Worth would be independent directors, if elected.
David D. Nelson, the 14th director, is an executive officer of the Company and is not considered independent. In 20122015, the Board held five regularly scheduled meetings and one organizational meeting, and one Executive Committee meeting. Each director is required to attendAll directors attended at least 75%75 percent of the full Board meetings and the meetings of any committees on which the director serves. This requirementserves, except Mr. Gerdin, who was satisfied by all directors.absent from one Board meeting and two committee meetings. Board members are encouraged to attend the Annual Meeting, and all Board members attended the 20122015 Annual Meeting, except Ms. Chapman.Meeting.
The Board has established the following standing committees:
Audit Committee
Compensation Committee
Nominating and Corporate Governance Committee
Risk Management Committee
The Board has adopted written charters for each standing committee. The charters may be seen on the Investor Relations, Corporate Governance section of the Company's website (www.westbankiowa.com)(www.westbankstrong.com). The primary responsibilities of the committees are described below. The 20122015 reportreports of the Audit, Compensation, and Nominating and Corporate Governance Committees followsfollow the descriptions.
Board Leadership Structure
The Board believes that having a non-chief executive officer director serve as Chairman of the Board is in the best interests of stockholders. The Board currently intends to maintain the leadership structure of a non-chief executive officer chairman for at least the foreseeable future.chairman. The Board and its Nominating and Corporate Governance Committee believe that this structure will continue to be useful in providing consistent oversight and strategic direction to the Company. The Board does not intend to micro-manage the Company and expects Mr. Nelson to take the lead in developing strategic plans, andproviding day-to-day leadership and managing the performance of the Company. The Board intends to periodically review its leadership structure and make changes as dictated by the circumstances and the best interests of the stockholders.
Board's Role in Risk Oversight
The Board has historically performedperforms its risk oversight function primarily through the Audit, Compensation, and Nominating and Corporate Governance, and Risk Management Committees, which report to the whole Board and are comprisedcomposed solely of independent directors. In 2010, the Board established a Risk Committee to begin formalizing Board involvement in risk management. In 2012, the Risk Committee formally began its duties of monitoring and overseeing the enterprise risk management process for the Company. The Board also uses an Executive Committee comprised of four independent directors, the Chairman, and the Chief Executive Officer for updates and consultations on an as needed basis. This structure has provided greater day-to-day Board awareness of policy and operational issues at the Company.
The Risk Committee is comprised of independent directors and may request any officer of the Company to attend meetings, including Harlee Olafson, the Company's Chief Risk Officer. A charter was first adopted for this committee during 2012. Under its charter, the Risk Committee is charged with identifying and assessing the risks facing the Company and overseeing the development, implementation, and monitoring of the Company's risk management process. The Risk Committee also oversees the division of risk-related responsibilities to each of the other Board committees. The Risk Committee is currently overseeing and reviewing with management the Company's credit, market, liquidity, reputation, regulatory, strategic, and similar risks on a quarterly basis. On an annual basis, the Risk Committee reviews policies and procedures regarding risk management, information technology and safety, liquidity, and any other policies regarding employee conduct. The functions of the Risk Committee are detailed at length in its charter, which may be viewed on the Company's website (www.westbankiowa.com) under Investor Relations, Corporate Governance.
The Board's Audit Committee, which also functions as West Bank's Audit Committee, is charged with reviewingreviews with management the Company's financial, transaction,transactional, and operational risk exposures, including policies regarding employee conduct, and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies.policies related to controls over financial reporting. These reviews are completed at least annually. In addition, the Audit Committee has quarterly executive sessions with both the Company's independent and internal auditors concerning any topic of concern to the auditors. Internal auditing is done by an independent public accounting firm retained by the Audit Committee. The Audit Committee also retains and receives an annual report from an independent public accounting firm employed specifically to review West Bank's trust department.
The Compensation Committee is charged in its charter with at least annually reviewing all compensation policies, practices, and plans of the Company to determine whether they encourage excessive risk-taking or pose any other threat to the safety and soundness of the Company or West Bank, or are otherwise inconsistent with the stockholders' long-term best interests.
The Nominating and Corporate Governance Committee reviews at least annually all policies and practices related to the governance of the Company. In addition, it periodically reviews management succession plans with executive management.
The Risk Management Committee may request any officer of the Company to attend meetings, including Harlee Olafson, the Company's Chief Risk Officer. Under its charter, the Risk Management Committee is charged with identifying and assessing the risks facing the Company and overseeing the development, implementation and monitoring of the Company's risk management process. The Risk Management Committee also oversees the division of risk-related responsibilities to each of the other Board committees. The Risk Management Committee oversees and reviews with management the Company's credit, market, liquidity, reputation, regulatory, information and cybersecurity, strategic and similar risks. On an annual basis, the Risk Management Committee reviews risk assessments, policies and procedures regarding risk management, information technology and safety, and liquidity.
Code of Ethics
We have a Code of Conduct in place that applies to all of our directors, officers and employees. The Code of Conduct sets forth the standard of ethics that we expect all of our directors, officers and employees to follow, including our Chief Executive Officer and Chief Financial Officer. The Code of Conduct may be viewed on the Company's website (www.westbankiowa.com)(www.westbankstrong.com) under Investor Relations, Corporate Governance. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding any amendment to or waiver of the Code of Conduct with respect to our Chief Executive Officer and Chief Financial Officer, and persons performing similar functions, by posting such information on our website. The RiskAudit Committee reviewed the Company's Code of Conduct during 20122015 and recommended minor changes to the Board, which the Board implemented.
Committees of the Board of Directors
The table below shows the current membership for each of the standing Board committees:
|
| | | | | | | | |
| | | | | | Nominating | | |
| | | | | | and Corporate | | Risk |
| | Audit | | Compensation | | Governance | | Management |
Directors | | Committee | | Committee | | Committee | | Committee |
Frank W. Berlin | | | | a | | | | |
Joyce A. Chapman | | a | | | | | | |
Steven K. Gaer | | | | Chair | | | | |
Michael J. Gerdin | | | | a | | | | |
Kaye R. Lozier | | | | | | Chair | | |
Sean P. McMurray | | | | | | | | a |
David R. Milligan | | a | | | | | | |
George D. Milligan | | | | | | a | | |
James W. Noyce | | Chair | | | | | | a |
Robert G. Pulver | | | | | | a | | |
Lou Ann Sandburg | | | | | | | | Chair |
Philip Jason Worth | | a | | | | | | |
| | | | | | | | |
Meetings held during 2015 | | 4 | | 3 | | 3 | | 3 |
Audit Committee. The members of the Audit Committee are James W. Noyce, Chair, Joyce A. Chapman, George D.David R. Milligan (who joined the Audit Committee in January 2016) and Lou Ann Sandburg.Philip Jason Worth. Each of the Audit Committee Members is considered "independent" according to Nasdaq listing requirements and Rule 10A-3 of the Exchange Act, as required for audit committee membership. Mr. Noyce is an "audit committee financial expert" as defined in the Sarbanes-Oxley Act of 2002 and related regulations based on his level of education and work experience, as described previously in this proxy statement. The Audit Committee selects the independent and internal auditors; reviews with the independent and internal auditors the plan, scope and results of the auditors' services; approves their fees; and reviews the Company's financial reporting and internal control functions and risk assessment. The Audit Committee has authority to retain special legal, accounting or other consultants as it deems appropriate or necessary. The Audit Committee also performs the other duties set forth in its charter. The Audit Committee is prepared to meet privately at any time at the request of the independent registered public accountants, internal auditors or members of management to review any special situation arising on any of the above subjects. The Audit Committee reviews its charter at least annually and recommends changes to the Board when deemedit deems necessary. The Audit Committee met four times during 20122015 and also met with the Company's management and internal and independent auditors four times in separate executive session. Messrs. G. Milligan andsessions. Mr. Noyce are membersis a member of the Audit Committee who also serveserves on the audit committee of another listed company (United Fire & Casualty Company). Mrs. Sandburg also serves on the audit committee of Berthel Fisher Financial Services, Inc., a listed company. The functions of the Audit Committee are detailed at length in its charter, which may be viewed on the Company's website (www.westbankiowa.com)(www.westbankstrong.com) under Investor Relations, Corporate Governance.
Compensation Committee. The Compensation Committee consists of Steven K. Gaer, Chair, Frank W. Berlin, Thomas A. Carlstrom, and Robert G. Pulver,Michael J. Gerdin, all of whom are considered "independent" as defined by the Nasdaq listing requirements, an "outside" directordirectors pursuant to Section 162(m) of the Internal Revenue Code, and a "non-employee" director"nonemployee" directors under Section 16 of the Exchange Act. As required by the Compensation Committee's charter, the members of the Compensation Committee are elected annually by the independent directors of the Board. The Compensation Committee annually reviews the Company's compensation and benefit programs, including compensation for the named executive officers. The Compensation Committee makes compensation recommendations to the Board concerning amountsthe amount and the form of executive and director compensation. The independent directors of the Board ultimately determine the compensation. The Compensation Committee has authority to retain consultants and advisors, which it does periodically. The Compensation Committee did use a compensation consultant in 2011 and 2012. The Compensation Committeefirst retained Frederic W. Cook & Co., Inc. ("F.W. Cook") in July 2011 to provide the Compensation Committee with independent, objective analysis and professional opinions on executive compensation matters.
F.W. Cook was independent, reported directly to the Chair of the Compensation Committee and performed no other work for the Company.
During 2011, F.W. Cook assisted the Compensation Committee in its review of the total compensation program, including gathering and analyzing market data for compensation paid for similar positions at companies with which the Company competes for executive talent. F.W. Cook also provided input on marketplace trends and best practices relating to competitive pay levels, as well as developments in regulatory and technical matters. During 2012, F.W. Cook continued to review and monitor our executive compensation programs. During 2013, F.W. Cook provided an update on trends in director compensation. During 2014 and 2015, F.W. Cook provided an update to the Committee on trends in executive compensation and director compensation matters. It is anticipated that the Committee will obtain an independent review of compensation matters every three years.
The Compensation Committee may delegate any of its authorities to a sub-committee but has not done so to date. The Compensation Committee considers input from the executive officers concerning executive and other compensation but is not required to do so. The Compensation Committee met 10 times during 2012. The functions of the Compensation Committee are detailed at length in its charter, which may be viewed on the Company's website (www.westbankiowa.com)(www.westbankstrong.com) under Investor Relations, Corporate Governance. Additional details about the Compensation Committee's processes and procedures are discussed in the Compensation Discussion and Analysis below.
Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee members are Kaye R. Lozier, Chair, Frank W. Berlin, George D. Milligan and Robert G. Pulver, all of whom are considered "independent" as defined by Nasdaq listing requirements. As required by the Nominating and Corporate Governance Committee's charter, the members of the Nominating and Corporate Governance Committee are elected annually by the independent directors of the Board. During 2012, the Nominating and Corporate Governance Committee met five times. The Nominating and Corporate Governance Committee makes recommendations to the Board regarding the composition and structure of the Board and nominations for election of directors, including the director nominees proposed in this proxy statement. It develops policies and processes regarding principles of corporate governance in order to ensure the Board's compliance with its fiduciary duties to the Company and its stockholders. The Nominating and Corporate Governance Committee will consider for nomination at the 20142017 Annual Meeting, as part of its nomination process, any director candidate recommended by a stockholder who follows the procedures shown underdescribed in the heading 20142017 Stockholder Proposals below.section of this proxy statement.
The Nominating and Corporate Governance Committee follows the process described below when identifying and evaluating nominees to the Board:
Procedures for identifying candidates:
| |
a) | Review current directors of the Company; |
| |
b) | Review current directors of West Bank; |
| |
c) | Solicit input from existing directors and executive officers; and |
| |
d) | Review submissions from shareholders,stockholders, if any. |
The following criteria will be considered when evaluating nominee candidates:candidates, including candidates recommended by stockholders:
The Board should be composed of:
| |
1. | Directors chosen with a view toof bringing to the Board a variety of experiences and backgrounds; |
| |
2. | Directors who have high-level managerial experience or are accustomed to dealing with complex challenges; and |
| |
3. | Directors who will represent the balanced, best interests of the stockholders as a whole rather than special interest groups or constituencies while also taking into consideration the assessment of the overall composition and needs of the Board. |
A majority of the Board's directors shall be independent directors under the criteria for independence created by the SEC and Nasdaq. The Nominating and Corporate Governance Committee has historically considered diversity in its director nomination process without a formally developed policy. The Nominating and Corporate Governance Committee anticipates that it will continue to consider diversity in its nominating processdo so by looking for differences of viewpoint, professional experience, education, skills, and other individual qualities and attributes as well as characteristics such as race, gender and national origin.
In considering possible candidates for nomination as a director, the Nominating and Corporate Governance Committee and other directors considerconsiders the following general guidelines and criteria:
| |
1. | Each director should be of the highest character and integrity, have experience at or demonstrated understanding of strategy/policy-setting,policy setting, and have a reputation for working constructively with others; |
| |
2. | Each director should have sufficient time available to devote to the affairs of the Company in order to carry out the responsibilities of a director; |
| |
3. | Each director should be free of any conflict of interest that would interfere with the proper performance of the responsibilities of a director; and |
| |
4. | The Chief Executive Officer is expected to be a director. Other members of senior management may be nominated to be directors, but Board membership is not necessary or a prerequisite for senior executive positions. |
The Nominating and Corporate Governance Committee evaluates all candidates in the same way, reviewing the aforementioned factors, among others, regardless of the source of such candidate, including stockholder recommendation.recommendations. Because of this, there is no separate policy with regard to consideration of candidates recommended by stockholders.
The functions of the Nominating and Corporate Governance Committee are detailed at length in its charter, which may be viewed on the Company's website (www.westbankstrong.com) under Investor Relations, Corporate Governance.
Risk Management Committee. The Risk Management Committee members are Lou Ann Sandburg, Chair, Sean P. McMurray and James W. Noyce, all of whom are considered "independent" as defined by Nasdaq listing requirements. As required by the Risk Management Committee's charter, the members of the Risk Management Committee are elected annually by the independent directors of the Board. The Risk Management Committee is charged with being the primary Board committee to actively monitor and oversee the enterprise risk management process for the Company and West Bank. The Risk Management Committee regularly reviews ongoing or pending litigation, credit metrics, trends and compliance with established lending limits, investment portfolio performance and potential risks, information and cybersecurity risks, and potential reputational risks facing the Company. The Risk Management Committee also monitors liquidity, cash flows, regulatory and strategic risks. On an annual basis, the Risk Management Committee reviews policies and procedures regarding risk management, including insurance coverage, security, disaster recovery, information and cybersecurity, and regulatory policies. The Risk Management Committee reviews its charter at least annually and recommends changes to the Board when it deems necessary. The Risk Management Committee met three times during 2015. The functions of the Risk Management Committee are detailed at length in its charter, which may be viewed on the Company's website (www.westbankstrong.com) under Investor Relations, Corporate Governance.
Audit Committee Report
The incorporation by reference of this proxy statement into any document filed with the SEC by the Company shall not be deemed to include the following report unless such report is specifically stated to be incorporated by reference into such document.
The Audit Committee hereby states as follows:
It has reviewed and discussed the audited financial statements as of and for the year ended December 31, 20122015, with management;
It has discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended, (AICPA, Professional Standards, Vol. 1, AU section 380),Standard No.16, as adopted by the Public Company Accounting Oversight Board in Rule 3200T;
(the "PCAOB");It has received the written disclosures and the letter from our independent accountant, McGladreyRSM US LLP, required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent accountant's communications with the Audit Committee concerning independence and has discussed with the independent accountant the independent accountant's independence;
Based on the review and discussions referred to immediately above, it recommended to the Board that the audited financial statements be included in the Company's annual report on Form 10-K for the year ended December 31, 20122015, for filing with the SEC;
It has reviewed and approved or ratified all related partyrelated-party transactions between the Company and its directors; and
The Board has approved the Audit Committee Charter.Charter; and
It selected RSM US LLP, independent registered public accounting firm, as the principal accountant for 2016.
The undersigned members of the Audit Committee have submitted this report.
James W. Noyce, Chair
Joyce A. Chapman
George D.David R. Milligan
Lou Ann SandburgPhilip Jason Worth
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are identified above.in the section titled Committees of the Board of Directors. No Compensation Committee members have ever been officers or employees of the Company or West Bank. No executive officer served as a director or member of the compensation committee of any other entity whose directors or executive officers served as a member of our Board or a member of the Compensation Committee.
Compensation Committee Report
The incorporation by reference of this proxy statement into any document filed with the SEC by the Company shall not be deemed to include the following report unless such report is specifically stated to be incorporated by reference into such document.
The Compensation Committee hereby states as follows:
It has reviewed and discussed the Compensation Discussion and Analysis section of this proxy statement with management,management; and
Based on the review and discussion referred to immediately above, it recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.
The undersigned members of the Compensation Committee have submitted this report.
Steven K. Gaer, Chair
Frank W. Berlin
Thomas A. Carlstrom
Robert G. PulverMichael J. Gerdin
Nominating and Corporate Governance Committee Report
During 20122015, the Nominating and Corporate Governance Committee reviewed the composition of the existing Board giving specific attention to the questions of the desirable size of the Board and how many insiders should be on the Board. Based on its review of these questions and in conjunction with Dr. Thomas A. Carlstrom announcing that he wished to retire from Board service as of the 2016 Annual Meeting, the Nominating and Corporate Governance Committee decided to recommend increasingreducing the size of the Board to 1413 directors and recommended three additional nominees, Messrs. Gerdin, McMurray, and Worth.directors. In addition, the Nominating and Corporate Governance Committee decided that it was in the best interest of the stockholders to continue the model of having only one member of management, the Chief Executive Officer, on the Board in order to clearly differentiate the roles of the Board and management.
The Nominating and Corporate Governance Committee also evaluated the qualifications and performance of each of the current members of the Board. In its evaluation, the Nominating and Corporate Governance Committee compared each of the current directors to the qualifications and characteristics of a director set forth in the Nominating and Corporate Governance Committee's charter. The Nominating and Corporate Governance Committee then polled each director to determine his or her willingness to stand for re-election and determined that each director other than Dr. Carlstrom was willing to continue service. The Nominating and Corporate Governance Committee did not receive any stockholder recommendations for 20132016 director nominees in 2012.nominees. No third party was retained, in any capacity, to provide assistance in either identifying or evaluating potential director nominees for 20132016.
Based on the foregoing, the Nominating and Corporate Governance Committee recommended to the Board that Frank W. Berlin, Thomas A. Carlstrom, Joyce A. Chapman, Steven K. Gaer, Michael J. Gerdin, Kaye R. Lozier, Sean P. McMurray, David R. Milligan, George D. Milligan, David D. Nelson, James W. Noyce, Robert G. Pulver, and Lou Ann Sandburg and Philip Jason Worth should be nominated for re-election to the Board at the Annual Meeting. The Board also nominated Michael J. Gerdin, Sean P. McMurray, and Philip Jason Worth for election to the Board at the Annual Meeting. The Board accepted these recommendations.this recommendation.
During 20122015, the Nominating and Corporate Governance Committee reviewed its charter, and minor changes were recommended to the Board, which the Board implemented. The charter may be reviewed on the Company's website (www.westbankiowa.com) under Investors Relations, Corporate Governance.
The undersigned members of the Nominating and Corporate Governance Committee have submitted this report.
Kaye R. Lozier, Chair
Frank W. Berlin
George D. Milligan
Robert G. Pulver
Executive Officers of the Company
The following table sets forth summary information about the current executive officers of the Company.
|
| | |
Name | Age | Position with the Company or West Bank |
Douglas R. Gulling | 59 | Executive Vice President and Chief Financial Officer of the Company;
Director and Chief Financial Officer of West Bank
|
David D. Nelson | 5255 | Director, Chief Executive Officer and President of the Company; Chairman and Chief Executive Officer of West Bank |
Douglas R. Gulling | 62 | Executive Vice President, Treasurer and Chief Financial Officer of the Company; Director, Executive Vice President and Chief Financial Officer of West Bank |
Harlee N. Olafson | 5558 | Executive Vice President and Chief Risk Officer of the Company; Director, Executive Vice President and Chief Risk Officer of West Bank |
Brad L. Winterbottom | 5659 | Executive Vice President of the Company; Director and President of West Bank |
The executive officers of the Company are electedappointed on an annual basis by the Board of Directors. An executive officer may be removed by the Board of Directors, whenever in its judgment, the best interests of the Company will be served thereby. There are no arrangements or understandings between any of the executive officers and any other person pursuant to which he or she was selected as an officer.
The principal occupation or business and experience of the executive officers of the Company and West Bank for the past five years are set forth below.
David D. Nelson is Chief Executive Officer and President of the Company and Chairman of West Bank's Board and Chief Executive Officer of West Bank (since 2010). Mr. Nelson is a member of the Company's Board (since 2010). Mr. Nelson has more than 30 years of experience in commercial banking. He was previously President of Southeast Minnesota Business Banking and President of Wells Fargo Bank Rochester in Rochester, Minnesota. He has a strong background in customer relationship building, credit and leadership development.
Douglas R. Gulling is Executive Vice President (since 2004), Treasurer (since 2013) and Chief Financial Officer (since 2001) of the Company. He was a member of the Company's Board from 2009 through April 2011. He also serves as a director (since 2005), Executive Vice President (since 2015) and Chief Financial Officer (since 2002) of West Bank. Mr. Gulling is a Certified Public Accountant (inactive) and has been employed in the banking industry since 1979.
David D. Nelson is Chief Executive Officer and President of the Company and Chairman and Chief Executive Officer of West Bank (since 2010). Mr. Nelson is a member of the Company's Board (since 2010). Mr. Nelson has more than 27 years of experience in commercial banking. He most recently had been President, Southeast Minnesota Business Banking and President, Wells Fargo Bank Rochester in Rochester, Minnesota. He has strong backgrounds in customer relationship building, credit, and leadership development.
Harlee N. Olafson is Executive Vice President and Chief Risk Officer of the Company and of West Bank (since 2010). He also serves as a director of West Bank (since 2011). Mr. Olafson has more than 3335 years of experience in commercial banking. Prior to joining the Company, he was President of Southern Minnesota Business Banking and President of Wells Fargo Bank Mankato in Mankato, Minnesota. He has strong business development, credit and team building backgrounds.
Brad L. Winterbottom is Executive Vice President of the Company (since 2006) and director and President (since 2000) of West Bank. He was a directormember of the Company's Board from 2009 through April 2011. He joined West Bank in 1992 and has served as an executive and policy maker since 1998. He has extensive experience in commercial lending and loan portfolio administration, and knowledge of the Centralcentral Iowa business community. Mr. Winterbottom has been employed in the banking industry since 1981.
20122015 Director Compensation
ForAt the first three quartersbeginning of 2012,2015, the directors of the Company received an annual retainer of $8,000, payable quarterly. Effective October 1, 2012, committeeCommittee chairpersons began receivingreceived an additional $500 per quarter. This change replaces the prior policy of paying committee chairpersons an additional $100 per committee meeting. Directors also receivereceived $500 per regular meeting attended (Board and committee.)committee). Members of the Audit Committee receivereceived $600 per Audit Committee meeting.meeting attended. At the beginning of 2015, Mr. David Milligan also received a monthly fee of $5,000 for his service as Chairman of the Board. He maintains an office at the Company's headquarters and works regular office hours on Board mattersmatters. Effective April 1, 2015, the annual retainer was increased to $10,000 for each director, Mr. D. Milligan's monthly fee was established at $2,500, and special assignments for West Bank. committee chairs were given a $2,000 annual retainer.
Directors of the Company who also served as directors of West Bank received fees of $500 for each West Bank board meeting attended (11 meetings held) plus an annual retainer of $6,500, and $500 for each committee meeting attended.attended (Board and committee). On September 5, 2012,April 23, 2015, each director was granted a restricted stock unit award with respect to 588for 2,000 shares of the Company's common stock. It is anticipated that annual directors' fees going forward will include an annual grant of restricted stock units. Messrs. Nelson, Gulling, Olafson and Winterbottom are employees and do not receive directors fees, including the restricted stock units granted toany compensation for services as directors.
The following table sets forth all compensation earned or paid to our nonemployee directors for services rendered in the fiscal year ended December 31, 20122015.
| | Name | Fees Earned or Paid in Cash by Company ($) | | Fees Earned or Paid in Cash by West Bank ($) | | Stock Awards ($) (1) | | All Other Compensation ($) (2) | | Total ($) | | Fees Earned or Paid in Cash by Company ($) | | Fees Earned or Paid in Cash by West Bank ($) | | Stock Awards ($) (1) | | Total ($) |
Frank W. Berlin | $ | 19,100 |
| | $ | 18,500 |
| | $ | 6,000 |
| | $ | — |
| | $ | 43,600 |
| | $14,500 | | $17,500 | | $38,356 | | $70,356 |
Thomas A. Carlstrom | 15,000 |
| | 20,000 |
| | 6,000 |
| | 2,256 |
| | 43,256 |
| | 13,000 | | 17,500 | | 38,356 | | 68,856 |
Joyce A. Chapman | 13,800 |
| | 13,000 |
| | 6,000 |
| | — |
| | 32,800 |
| | 15,400 | | 12,500 | | 38,356 | | 66,256 |
Steven K. Gaer | 18,400 |
| | 18,000 |
| | 6,000 |
| | — |
| | 42,400 |
| | 16,500 | | 16,000 | | 38,356 | | 70,856 |
Michael J. Gerdin | | | 12,500 | | 12,000 | | 38,356 | | 62,856 |
Kaye R. Lozier | 14,100 |
| | 15,500 |
| | 6,000 |
| | — |
| | 35,600 |
| | 16,000 | | 12,500 | | 38,356 | | 66,856 |
Sean P. McMurray | | | 14,000 | | 12,500 | | 38,356 | | 64,856 |
David R. Milligan | 71,000 |
| | 19,500 |
| | 6,000 |
| | — |
| | 96,500 |
| | 52,500 | | 20,000 | | 38,356 | | 110,856 |
George D. Milligan | 16,500 |
| | 18,500 |
| | 6,000 |
| | 400 |
| | 41,400 |
| | 15,200 | | 17,500 | | 38,356 | | 71,056 |
James W. Noyce | 16,700 |
| | 14,000 |
| | 6,000 |
| | — |
| | 36,700 |
| | 18,400 | | 12,500 | | 38,356 | | 69,256 |
Robert G. Pulver | 18,400 |
| | 17,500 |
| | 6,000 |
| | 480 |
| | 42,380 |
| | 15,000 | | 17,000 | | 38,356 | | 70,356 |
Lou Ann Sandburg | 15,600 |
| | 14,000 |
| | 6,000 |
| | — |
| | 35,600 |
| | 17,200 | | 13,500 | | 38,356 | | 69,056 |
Philip Jason Worth | | | 14,900 | | 12,500 | | 38,356 | | 65,756 |
| |
(1) | The amounts set forth in the "Stock Awards" column reflect the grant date fair value of restricted stock units awarded on September 5, 2012,April 23, 2015, valued in accordance with FASB ASCFinancial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718. Each non-employeenonemployee director was granted 5882,000 restricted stock units which have a vesting date of April 25, 2013.23, 2016. These were the only outstanding non-employeenonemployee director equity awards as of December 31, 20122015. |
| |
(2) | All other compensation consists of fees normally charged by the West Bank trust department, which were waived for directors. |
Security Ownership of Certain Beneficial Owners and Executive Officers
The following table contains the shares of the Company's common stock beneficially owned by each director director nominee, and named executive officer listed in the Summary Compensation Table, and all directors and executive officers of the Company and subsidiary (including named executive officers) as a group. The ownership information is as of February 21, 201319, 2016.
| | Name | Shares Beneficially Owned (1) (2) | | Percent of Total Shares Outstanding | Shares Beneficially Owned (1) (2) | | Percent of Total Shares Outstanding |
Frank W. Berlin | 50,856 |
| | * |
| 53,944 |
| | * |
|
Thomas A. Carlstrom (3) | 40,997 |
| | * |
| 44,085 |
| | * |
|
Joyce A. Chapman (4) | 28,224 |
| | * |
| 31,312 |
| | * |
|
Steven K. Gaer | 1,000 |
| | * |
| 5,088 |
| | * |
|
Michael J. Gerdin | — |
| | * |
| 2,500 |
| | * |
|
Douglas R. Gulling | 25,999 |
| | * |
| 33,297 |
| | * |
|
Kaye R. Lozier | 3,020 |
| | * |
| 6,108 |
| | * |
|
Sean P. McMurray | 7,000 |
| | * |
| 9,800 |
| | * |
|
David R. Milligan | 25,709 |
| | * |
| 28,000 |
| | * |
|
George D. Milligan | 7,500 |
| | * |
| 10,588 |
| | * |
|
David D. Nelson | 45,830 |
| | * |
| 78,037 |
| | * |
|
James W. Noyce | 3,000 |
| | * |
| 6,088 |
| | * |
|
Harlee N. Olafson | 7,266 |
| | * |
| 20,998 |
| | * |
|
Robert G. Pulver (5) | 79,459 |
| | * |
| 73,847 |
| | * |
|
Lou Ann Sandburg | 1,250 |
| | * |
| 4,688 |
| | * |
|
Brad L. Winterbottom (6) | 22,525 |
| | * |
| 37,249 |
| | * |
|
Phillip Jason Worth | — |
| | * |
| |
Philip Jason Worth | | 2,794 |
| | * |
|
Executive officers and directors as a group (17 persons) | 349,635 |
| | 2.01 | % | 448,423 |
| | 2.79 | % |
*Indicates less than 1%1 percent ownership of outstanding shares.
| |
(1) | Shares “beneficially owned” include shares owned by or for, among others, the spouse and/or minor children of the named individual and any other relative who has the same home address as such individual, as well as other shares with respect to which the named individual has or shares voting or investment power. Beneficial ownership may be disclaimed as to certain of the shares. |
| |
(2) | Except as otherwise indicated in the following notes, each named individual owns his or her shares directly, or indirectly through a self-directed IRA or the Company's Employee Savings and Stock Ownership Plan, and has sole investment and voting power with respect to such shares. |
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(3) | Includes Dr. Carlstrom's shares held in his spouse's name. Dr. Carlstrom disclaims any beneficial ownership of 3,000 shares held in his spouse's name. |
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(4) | Includes Mrs. Chapman's shares held in her spouse's name. Mrs. Chapman disclaims any beneficial ownership of 28,224 shares held in her spouse's name. |
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(5) | Includes Mr. Pulver's shares held in his spouse's name. Mr. Pulver disclaims any beneficial ownership of 6,614 shares held in his spouse's name. |
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(6) | Includes Mr. Winterbottom's shares held in his spouse's name. Mr. Winterbottom disclaims any beneficial ownership of 6,0006,500 shares held in his spouse's name. |
Other Beneficial Owners
The following table sets forth certain information on each person known to the Company to be the beneficial owner of more than 5%five percent of the Company's common stock. The ownership information is as of February 21, 201319, 2016.
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| | | | | | |
Name and Address | | Shares Beneficially Owned | | Percent of Total Shares Outstanding |
| | | | |
The Jay Newlin Trust 6165 NW 86th Street Johnston, IA 50131 | | 1,041,952 |
| | 5.99 | % |
| | | | |
American Equity Investment Life Holding Company 6000 Westown Parkway West Des Moines, IA 50266 | | 1,440,592 |
| | 8.28 | % |
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| | | | | | |
Name and Address | | Shares Beneficially Owned | | Percent of Total Shares Outstanding |
The Jay Newlin Trust 2661 86th Street Urbandale, IA 50322 | | 1,041,952 |
| | 6.49 | % |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that the Company's directors and executive officers and persons who own more than 10%10 percent of the Company's common stock file initial reports of ownership and reports of changes of ownership with the SEC and Nasdaq. Reporting persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. The Company has not received any Section 16(a) formforms indicating that any one person owns more than 10%10 percent of the Company's stock, and the Company does not know of any one stockholder who owns more than 10%10 percent of the Company's stock. Based solely on its review of the copies of Section 16(a) forms received from its directors and executive officers and written representations that no other reports were required, the Company believes that all Section 16(a) reports applicable to its directors and officers during 20122015 were on a timely basis, with the exception of David D. Nelson, Chief Executive Officer, Director and President, who filed witha Form 5 reporting four exceptions. Messrs. Gulling, Nelson, and Winterbottom each filed one late form, which involved one late transaction, and all were relatedtransactions pursuant to a grant of RSUs. Mr. Nelson filed one late form which involved four late transactions, all of which related to dividends reinvested in common stock held within two brokerage accounts.dividend reinvestment arrangement that should have been reported earlier on Form 4s.
Change in Control Agreements
The Company does not know of any arrangements or pledges that would result in a future change in control of the Company.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) provides information about our compensation objectives and policies for our named executive officers. Itofficers and explains the structure and rationale of the various elements of compensation for our named executive officers.elements. Our CD&A is organized as follows:
Overview and Executive Summary. We provide some backgroundBackground context and highlights are provided to put the overall disclosure in perspective.
Objectives of Our Compensation Program. The objectives of our executive compensation program are based on our business model and the competitive pressures we face in attempting to attractattracting and retainretaining executive talent. We structure our executive compensation program to reflect our compensation philosophy and related operating principles.
Consideration of 2012 Say-on-Pay. The 2012 advisory vote on executive compensation resulted in approximately 96% of the votes cast in favor of our compensation programs for our named executive officers.
Elements of Compensation. There are severalThe key components that make upof our compensation program includingare base salary, annual bonuses and equity awards. We emphasize elements of compensation that tielong-term stock awards, with an emphasis on tying executive compensation to performance.
Compensation Process. We regularly review ourOur executive compensation programs are regularly reviewed to ensure that we are meeting the needs of the Company, West Bank, andmeet our stockholders.compensation objectives.
Analysis of 20122015 Compensation. We set forth our analysisDecisions on 2015 compensation are analyzed and explained in the context of 2012 compensation decisions and explain why the compensation for our named executive officers in 2012 reflected our compensation objectives and performance.
Regulatory Considerations. We describe the impact ofconsider guidance established by the Federal Deposit Insurance Corporation (the "FDIC") and other bank regulatory agencies, as well as guidance from other regulators applicable to publicly traded companies, in addition to various other regulatory requirements, on ourmaking decisions regarding ourabout executive compensation.compensation and risk mitigation.
Share Ownership and Retention GuidelinesCompensation-related Governance Polices. We requirehave in place several policies intended to more closely align the interests of our named executive officers with those of our stockholders by encouraging our named executive officers to attain and maintain a significant equity interest in our Company. Our ownership and retention guidelines are explained.
Overview and Executive Summary
Financial and Operational Performance.Business Overview
The Company, through West Bank, provides lending, deposit and trust services for individualsbusinesses and businesses.individuals. We offer competitive personalcommercial and commercialpersonal banking products and are committed to providing superior customer service. We place a high priority on community service and are actively involved with many civic and community projects in the communities where we conduct business. We operate in an intensely competitive and uncertain business environment. From a business perspective, not only do we compete with numerous companies in our markets for customers, but we also compete with many different types and sizes of organizations for senior leadership capable of executing our business strategies during varying economic conditions.strategies. Among other challenges, our business model requires experienced leaders with banking and operational expertise who are capable of taking on high levels of personal responsibility.responsibility in an ever-evolving banking industry and economy.
TheFinancial and Operational Performance
Our fiscal year endedending December 31, 2012,2015 was considered a very goodgreat year for the Company and West Bank. After repayingWhen full-year results become available for our U.S. Department of the Treasury's Troubled Asset Relief Program ("TARP") financial assistance in 2011,peer group, we established abelieve they will show that we again achieved our goal of financial performancebeing in the top quartile of our benchmarking peer group. A fewgroup based upon several performance measures. For a listing of the Company's peer group and highlights of 20122015 performance include:see below.
ReturnIn addition, the Company's profitability as measured by return on average assets: 1.21%
Returnassets and return on average equity: 12.34%
Efficiency ratio: 50.83%
Texas ratio: 11.25%
Moreover, the Company returned to a level of profitability that putsequity put us in the top quartile of bank holding companies in the United States withall banks nationally that have assets between $1 billion and $3 billion, (accordingaccording to the September 20122015 Bank Holding Company Performance Report). In addition,Report (which was the most recent report available at the time this report was prepared), which is prepared by the Federal Reserve Board's Division of Banking Supervision and Regulation.
The Company was again recognized by the investment banking firm, Sandler O'Neill + Partners, L.P., as one of the top 2534 community banks in the country and was included as oneUnited States. A total of "The 50 Best Users of Capital" by435 bank holding companies were considered in this process. The Company is the magazine Bank Director.only bank or thrift on the list in 2015 to receive this honor for the fourth consecutive year.
SummaryOverview of Our Executive Compensation Programs.Programs
The Company and West Bank share an executive management team. The members of the executive management team, including theconsisting of our named executive officers, are compensated by West Bank not byrather than the Company. The compensation packages of theour named executive officers are determined and approved by the Company's Compensation Committee based on their performance and roles for both the Company and West Bank.
The Company and West Bank are committed to paying for performance. We believe thisThis commitment is reflected inby the fact that a significant amountportion of our named executive officers' compensation that is provided through programs in which the amounts ultimately received vary to reflect our performance.performance-based programs. Our executive compensation programs evolve and are adjusted over time to support the business goals of the Company and West Bank and to promote both the near- and long-term profitable growth of the Company and West Bank.growth. Total compensation for each named executive officer varies with the Company's and West Bank's performance in achieving financial and non-financial objectivesnonfinancial objectives.
Say-on-Pay
At the 2015 annual stockholders' meeting, approximately 94 percent of shares present and with individual performance. Priorentitled to 2012,vote were in support of our named executive officers were compensated almost exclusively through their annual base salaries due to the TARP program executive compensation restrictionsprogram. The Company, the Board and prohibitions. As the Company repaid its TARP financial assistance in 2011, the Compensation Committee in 2012 reviewed and reconsidered ourpay careful attention to communications received from stockholders regarding executive compensation, programs in lightincluding the results of the fact that the TARP compensation restrictions and prohibitions no longer applied to us.
During 2012, our Compensation Committee again retained an independent compensation consultant, F.W. Cook, to review our executive compensation programs.these nonbinding, advisory "say-on-pay" votes. The Compensation Committee made several changes toconsidered the results of the advisory vote, and believes the vote reflects our executivestockholders’ support of our compensation programs that were,philosophy and the manner in part, based on the review by F.W. Cook. F.W. Cook helped us to identify a peer group of 16 financial institutions that are similar in regional presence, asset size, and business model, which we have used to compare our executive compensation programs. The Compensation Committee approved the adoption, and our stockholders approved the 2012 Equity Incentive Plan, pursuant to which the Company is now able to use equity incentive awards to align the compensation of our named executive officers with the long-term interests of our stockholders by focusing our named executive officers on the performance of our stock and returns to our stockholders. Our Compensation Committee also approved new employment agreements forcompensate our named executive officers. The agreements include provisions that are intended to let our named executive officers focus on discharging their responsibilities by aligning their individual best interests with the Company's and West Bank's best interests. Additionally, the agreements include restrictive covenants protective of the Company that would apply in certain circumstances following the respective officer's separation from service with the Company. Finally, our Compensation Committee adopted a deferred compensation plan intended to help our named executive officers plan for their financial futures.
Based on our disclosures in our 2012 proxy, we received a 96% favorable say-on-pay vote. The Compensation Committee believes that this positive result is reflective of our stockholders' approval of our executive compensation programs. While this vote was with respect to our compensation programs in effect prior to the 2012 changes described in this CD&A,As such, the Compensation Committee believes thatmade no changes as a result of the changes described this year are consistent with our compensation philosophy and objectives.2015 vote.
Objectives of Our Compensation Program
OurThe goal of our compensation program goal is to create superior long-term value for our investorsstockholders by attracting, motivating and retaining outstanding employees who not only serve our customers but whowhile also generategenerating financial performancesperformance that is better than our competitors and other peers.competitors. Our compensation program for executives is based in large part on our business needs and challenges in creating stockholder value. To support the achievement of our business strategies and goals, we strive to:
Tie compensation toPay for performance;
ProvideTie equity compensation tied to long-term value creation for our stockholders;
Align executives' financial interests with those of our stockholders;
Support the Company's and West Bank's values, strategy and development of employees;
Foster a team approach among top executives;
Attract retain, and alignretain leaders capable of delivering superior business results;
Provide competitive cash compensation and benefitsbenefit opportunities; and
Adhere to the highest legal and ethical standards.
Elements of Compensation
Our executive compensation program consists of several elements, each with an objective that fits into our overall compensation program. In 2011, the Compensation Committee conducted, with the assistance of F.W. Cook, a comprehensive review of our executive compensation program in light of trends in market practice, recent regulatory developments, peer group, and internal considerations. In 2012, the Compensation Committee again retained F.W. Cook to continue to review and monitor our executive compensation program in light of trends in market practice, regulatory developments, peer group, and internal considerations. As a result, various aspects of the program were modified, with some such modifications first becoming effective in 2012. The following overview explains the structure and rationale of the elements of compensation used for 2012.2015.
Base Salary
We consider base salary as a tool to provide executives with a reasonable level of fixed income relative to the responsibilitytheir level of the positions they hold. The Compensation Committee reviewsresponsibility. Performance of each named executive officer'sofficer is reviewed annually, but recent practice has been to adjust base salary annually, as well as at the time ofsalaries on a promotion or other change in responsibility.triennial basis. Base salaries are established and adjusted using criteria that include the level of responsibility for the position, base salary data for other internal positions, and base salaries for similar positions at financial institutions inwithin our peer group. In considering the practices of our peer group, we target base salaries to be competitive when compared to our peer group companies.
Annual Incentive Bonus
Annual cashincentive bonuses are anotheran important piece of total compensation for our named executive officers becauseas they are intended to support and encourage the achievement of our business goals and strategies by tying a meaningful portion of cash compensation to financial results for the year as compared to internal and external standards. OpportunitiesMaximum bonus opportunities are capped to avoid encouraging excessive risk-taking and to avoid any focus on maximizing short-term results at the expense of long-term soundness.
As a result of the Compensation Committee's review of the Company's compensation program,Annual bonuses for named executive officers for 20122015 will be determined based on quantitative and qualitative analyses.analyses performed by the Compensation Committee in 2016. The quantitative analysis, as further described in the next paragraph, includes the Company's relative performance with respect to return on assets, return on equity, the efficiency ratio, and the Texas ratio against its peer group.four key financial measures. The qualitative analysis includes any and all items deemed relevant by the Compensation Committee, including, for example, regulatory action, Company profitability and changes in dividends. The Compensation Committee may increase or decrease the bonuses indicated from the peer comparison as it sees fit in its discretion, with all determinations by the Committee being final. Positive Company earnings are required for any bonuses to be paid to our named executive officers.
The quantitative analysis has two parts: (1) performance against our peer group in four key areas;areas, and (2) the Company's net profit compared to the prior year with positive earnings required for any bonuses to be paid to our named executive officers.year. The four key areas each of which is equally weighted,(equally weighted) in which we measure our performance against our peer group are return on average assets, return on average equity, efficiency ratio and Texas ratio. These ratios were selected because the Compensation Committee believes they encompass the important aspects of our financial performance: earnings, capital levels, expense control and asset quality. Based on our ranking among our peers in each of these four key areas, our named executive officers are eligible for a cash bonus payment equal to:to a percentage of salary, according to the following schedule:
|
| | |
Level | Peer Ranking | % Salary |
| Above 75th Percentile
| 60% |
Maximum | At or Above 75th Percentile | 60% |
Target | Median | 40% |
Threshold | 25th Percentile | 20% |
| Below 25th Percentile | — 0% |
If our ranking in the peer group falls between any of the listed points, theour named executive officers will be eligible for a proportional cash bonus. Reflecting our team approach to management, all the named executive officers have the same incentive opportunities relative to salary.
Long-Term Stock Incentives
Equity compensation is the other key element of the total compensation program for our named executive officers. ItEquity awards are made in the form of restricted stock units vesting in annual installments tied to continued service over five years. Unvested awards are forfeited upon early termination. In addition to maintaining a simple program easily understood by our executives and stockholders, this approach is our intentdesigned to use the West Bancorporation, Inc. 2012 Equity Incentive Plan (the 2012 Plan), which authorizes various types of long-term incentive awards, in driving the creation of long-term value for stockholders, attracting and retaining executives capable of effectively executing our business strategies, and structuring compensation to account for the time horizons of risks. We are including equity compensation because it supports the achievement of many of our key compensation objectives:
Tietie pay to performance, by linking compensation to stockholder value creation.
Alignalign executives' interests with those of stockholders.
Attract executives, particularly those interested in buildingour stockholders, provide a long-term value for stockholders, as equity compensation is an element of competitive pay packages for executives.
Retain executivesplanning horizon, mitigate adverse risk-taking, and reward future service by providing for forfeiture of awards prior to satisfaction of multi-year service requirements.attract and retain participants.
All three components of executive compensation are reviewed on a triennial basis using data and professional opinions provided by an independent compensation consultant.
Retirement Benefits
Our named executive officers are eligible to participate in our Employee Savings and Stock Ownership Plan, which is intended to assist executives as well as all eligible employees in providing for income and financial security in retirement. Executives participate under the same terms as other eligible employees. During 2012,2015, this plan provided for a 100%100 percent Company matching contribution on participant deferrals up to 6%6 percent of the participant's pay and an additional 4%4 percent discretionary Company contribution (in each case subject to applicable IRS limitations on contributions)compensation limitations).
Deferred Compensation
We adopted theThe West Bancorporation, Inc. Deferred Compensation Plan in October 2012,(the "Deferred Compensation Plan") was adopted effective as of January 1, 2013, to provide certain individuals with additional deferral opportunities in planning for their retirements.retirement. The Deferred Compensation Plan is an unfunded, nonqualified deferred compensation plan andthat provides an opportunity for eligible participants, including directors and key officers of the Company and its subsidiary (including the named executive officers),officers, to voluntarily defer receipt of a portion of their cash compensation. Each eligible individual makes his or her own decision with respect to participation in the Deferred Compensation Plan. The Company and West Bank have the right tocan make discretionary contributions under the Deferred Compensation Plan on behalf ofto participants though webut have not yet nor currently have no intention of making such contributions.plan to do so. Compensation deferred under the Deferred Compensation Plan will be payable on a date or datesin accordance with the time and manner selected by each participant at the time of enrollment.participant. In the event of a change in control of the Company, any amounts deferred by a participant will be distributed in a lump sum, and any Company contributions will be distributed in accordance with the participant's elections. The Deferred Compensation Plan currently provides for a notional interest rate equal to the Moody's Seasoned Aaa Corporate Bond Rate as in effect as of January 1 of the applicable year. As of January 1, 2013, no individuals had chosen2016, none of our named executive officers have elected to participate in the Deferred Compensation Plan.
Perquisites and Other Benefits
We have generally avoided the use of perquisites and other types of non-cash benefits.benefits, emphasizing instead compensation tied to performance. Our named executive officers participate in our employee benefit programs on the same terms as other eligible employees. Car allowances and reimbursement of club dues were provided on a selective basis in the past, but were eliminated at the beginning of 2012 in an effort to streamline the program, reflect general trends in practice, and focus on compensation tied to performance.
Employment Agreements
During 2012, we entered into new employmentEmployment agreements are in place with each of our named executive officers that set forth key terms of employment for each such officer.officers. We believe employment agreements help us recruit and retain executives with the experience, skills, knowledge and background needed to achieve our business goals and strategy.
Mr. Nelson. Mr. Nelson will serve as the President and Chief Executive Officer of the Company and as the Chief Executive Officer of West Bank under his agreement, as well as a member of the board of directors of both entities. The initial term under Mr. Nelson's agreement ends on December 31, 2015, but the agreement renews automatically for one-year terms on January 1, 2015, and on each January 1 thereafter. Mr. Nelson is entitled to a minimum annual salary pursuant to the agreement, as well as annual performance bonuses and participation in the Company's benefit plans. Under the agreement, upon an involuntary termination of Mr. Nelson's employment, he will be entitled to severance benefits contingent upon his execution of a general release of claims. Under the agreement, Mr. Nelson will be subject to non-compete and non-solicit restrictive covenants following the termination of his employment.
Messrs. Gulling, Olafson, and Winterbottom. Under their respective agreements, Mr. Gulling will serve as Executive Vice President and Chief Financial Officer of the Company and Chief Financial Officer of West Bank, Mr. Olafson will serve as Executive Vice President and Chief Risk Officer of the Company and West Bank, and Mr. Winterbottom will serve as Executive Vice President of the Company and President of West Bank. Each individual will also serve as a member of the board of directors of West Bank. The initial term under each agreement ends on December 31, 2014, but the agreements renew automatically for one-year terms on January 1, 2014 and on each January 1 thereafter. Messrs. Gulling, Olafson, and Winterbottom are each entitled to a minimum annual salarypursuant to their agreements, as well as annual performance bonuses and participation in the Company's benefit plans. Under the agreements, upon an involuntary termination of the respective executive's employment, the executive will be entitled to severance benefits contingent upon his execution of a general release of claims. Under the agreements, Messrs. Gulling, Olafson, and Winterbottom will be subject to non-compete and non-solicit restrictive covenants following termination of employment.
2012 Equity Incentive Plan - Acceleration of Equity Awards
The 2012 Plan provides for possible acceleratedIn regard to equity awards, we use a "double trigger" approach to vesting of awards granted to all participants, including our named executive officers, in certain circumstances. Under the 2012 Plan, and to the extent not provided otherwise in the agreements setting forth the terms of the award, vesting will be accelerated for outstanding awards upon a “changechange in control” of the Company (as defined in the 2012 Plan) if the awards are not assumed or otherwise equitably converted into comparable awards by the acquiring company. If the awards are assumed by the acquiror and a participant's employment is terminated without “cause” or a participant resigns for “good reason,” the participant's awards will become vested (this is what is known as a “double trigger” approach). We adopted this approach,control, rather than providing for vesting solely upon a change in control (a “single trigger” approach), because we believe that the double trigger provides adequate employment protection and reduces, for the stockholders' benefit, potential transaction costs associated with various strategic transactions for the benefit of the stockholders.awards. Further, the award agreements under the 2012 Plan generally provide that vesting will be accelerated for outstanding awards upon the respective participant's disability or death.
No Tax Gross-Ups
Under Section 280G of the Internal Revenue Code (the "Code"), an executive may be subject to excise taxes on certain benefits received in relation to a change in control of the Company. While many companies provide excise tax gross-ups to executives to place the executive in the same tax position as if the excise tax did not apply, we do not believe at this time that it is appropriatenecessary to provide this type of protection to any executive.our executives.
Compensation Process
The Compensation Committee has broad discretion in overseeing our compensation programs. Itprograms and reviews each element of compensation for each of our named executive officers at least once each year and makes a final determination regarding any adjustments to their current compensation structure and levels after considering a number of factors.annually. The Compensation Committee takes into accountconsiders the scope of theeach named executive officer's responsibilities, performance and experience, as well as competitive compensation levels in reviewing compensation. During the annual review process, the Compensation Committee also reviews our full-year financial results against other banking organizations and reviews the structure of our compensation programs relative to sound risk management.
In particular, ourThe primary considerations in making executive compensation decisions consider several factors of which the primary are:
Key financial measurements;
Strategic initiatives related to our business;
Achievement of specific operational goals relating to the executive's area of oversight;
Compensation of other Company executives; and
Compensation of peer group executives.
Consulting AssistanceRole of Compensation Consultant
Under its charter, the Compensation Committee has the authority to retain its own compensation consultants. In JulySince 2011, the Compensation Committee has retained F.W. Cook to provide the Compensation Committee with independent, objective analysis and professional opinions on executive and director compensation matters. F.W. Cook is independent, reports directly to the Chair of the Compensation Committee, and performs no other work for the Company. During 2011, F.W. Cook assistedCompany other than assisting the Committee in the review of the total compensation program, including gathering and analyzing market data for compensation paid for similar positions at companies with which we compete for executive talent.talent, and for director compensation. F.W. Cook also providedprovides input on marketplace trends and best practices relating to competitive pay levels, as well as developments in regulatory and technical matters. During 2012,Prior to retaining F.W. Cook, the Compensation Committee again retainedreviewed F.W. Cook’s independence as contemplated by the Committee’s charter and applicable Nasdaq rules, and determined that there were no conflicts of interest and that F.W. Cook to continue to reviewis independent from the Company, the Compensation Committee and monitor our executive compensation program in light of trends in market practice, regulatory developments, and internal considerations.officers.
Role of Executive Officers
VariousAs requested by the Compensation Committee, various members of management facilitate the Compensation Committee's consideration of compensation for our named executive officers by providing information for the Committee's review. ThisIn particular, Mr. Nelson provides background and recommendations with respect to each of the other named executive officers but is not present for the discussion or determination of his own compensation. Information considered includes, among other items, financial results and analysis, performance evaluations, compensation provided to our named executive officers, technical and regulatory considerations, and input on program design and possible modifications.
Market BenchmarkingPeer Group
Market pay practices are one of many factors we consider in setting executive pay levels and designing compensation programs. In 2011, we gathered informationInformation on pay levels and practices is gathered for a group of publicly traded companies selected based on their business focus, scope and location of operations, size and other considerations. AThe Company's peer group of 12 benchmark companies16 financial institutions was jointly selectedpresented by our ConsultantF.W. Cook and management and approved by the Compensation Committee in 2011. In January 2012, four additional companies were added to the group at the Compensation Committee's direction. The Company's peer group consists of 16 financial institutions, as listed below, that are similar in regional presence, asset size, and business model.Committee. The Company is in the middle of the group in terms of size. The group is periodically reviewed, with changes made to reflect merger and acquisition activity, financial situation and development, and other considerations. The following is the composition of the peer group as of December 31, 2015.
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| | |
BankFinancial Corporation | Horizon Bancorp | MidWestOne Financial Group, Inc.Peoples Bancorp |
Baylake Corp. | Isabella Bank Corporation | MutualFirstPulaski Financial Inc.Corp. |
CFS Bancorp, Inc. | MacatawaFarmers Capital Bank Corporation | NASB Financial, Inc. |
Firstbank Corporation | Mercantile Bank Corporation | PulaskiQCR Holdings, Inc. |
First Defiance Financial Corp. | MidWestOne Financial Group, Inc. | Southwest Bancorp |
First Mid-Illinois Bancshares, Inc. | MetroCorp Bancshares, IncMutualFirst Financial, Inc. | QCR Holdings,Waterstone Financial, Inc. |
Hills Bancorporation | | |
The companies in the group will be reviewed and evaluated on a regular basis.
Analysis of 20122015 Compensation
Consistent with our philosophy of linking compensation to performance, compensation for our named executive officers in 2012 was based on our business results. As noted above, the Company returned to a level of profitability that puts us in the top quartile of bank holding companies in the United States with assets between $1 billion and $3 billion (according to the September 2012 Bank Holding Company Performance Report). This section discusses the compensation actions that were taken in 20122015 for our named executive officers, as reported in the Executive Compensation section below.officers.
Base Salary
Salaries for our named executive officers remained constant in 2012, 2013, and 2014. Consistent with our practice of a triennial review process as described above, salaries for 2012our named executive officers were setincreased for 2015 to reflect Company and individual performance as follows in light ofwell as market levels, to the factors mentioned above:following annual rates: Mr. Nelson - $350,000; Mr.$400,000; Messrs. Gulling, - $247,000; Mr. Olafson, - $247,000; and Mr. Winterbottom - $247,000. Salaries$275,000 each. Our named executive officers salaries for 20132016 will remain at 2012 levels.the same level as in 2015.
Annual Incentive Bonus
For 2012,2015, the maximum bonus percentage foramount that our named executive officers were eligible for was increased to 60%60 percent of base salary in light of historical market practices, the Company's performance, and the continuing development of the executive team.
salary. Based on peer group analysis using September 30, 20122015 data, we believe Companythe Company's financial results likely will be at or above the 75th percentile of our peer group. As such, we believe our named executive officers will be eligible to receive a cash bonusbonuses capped at 60 percent of base pay with respect to 2012.2015. However, because the ultimate amount of the cash bonus is based on the Company's performance compared to that of the peer groupsgroup for the entire year and the Committee's qualitative analysis, the amount of the cash bonus payments will not be known until after the peer group institutions have reported their financial results for 2012.2015. See the Summary Compensation Table for the anticipated cash bonus amount.
The following table sets forth key financial performance measures of the Company and identified peer group:
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| | | | | | | |
| West Bancorporation, Inc. | | Peer Group Range | | Peer Group Percentile |
| Year ended December 31, 2015 | | Nine months ended September 30, 2015 | | Nine months ended September 30, 2015 | | Nine months ended September 30, 2015 |
Return on average assets | 1.30% | | 1.28% | | 0.36% - 1.27% | | > 75th |
Return on average equity | 14.88% | | 14.62% | | 2.79% - 12.17% | | > 75th |
Efficiency ratio* | 46.30% | | 47.12% | | 55.04% - 77.26% | | > 75th |
Texas ratio* | 0.87% | | 2.35% | | 3.49% - 29.89% | | > 75th |
*A lower ratio is more desirable.
Long-Term Stock Incentives
During 2012, ourThe Compensation Committee made two separate equity grantsgranted 15,000 restricted stock units to each of our named executive officers comprised solely of restricted stock units. The first grant, made in May 2012, was a one-time grant intended to bring our equity compensation pay practices more in line with market practice and our peer group. In part, this grant was also intended to provide our named executive officers with compensation they could have earned during the TARP period even after applying the TARP compensation limitations. The Committee chose to wait until after we were out of TARP to make these awards. On June 29, 2011, we redeemed all of the preferred stockMarch 2015 that we sold to the Treasury pursuant to TARP. The May 2012 grant was in the form of restricted stock units and the terms of the grant are intended to satisfy those portions of the TARP compensation rules that otherwise would have applied had the grant been made as a long-term incentive under the TARP compensation rules during the TARP period. The May 2012 grant will vest in full in May 2014.
The second equity grant was made in August 2012 when Mr. Nelson was awarded 8,233 restricted stock units and Messrs. Gulling, Olafson, and Winterbottom each received 5,810 restricted stock units. This grant was intended to be an annual equity award with respect to 2012 and is intended to be a part of a broader annual award program pursuant to which the Compensation Committee can continue to further align our named executive officers' interests with those of our stockholders. The equity awards were in the form of restricted stock units vesting in annual installments tied to continued service over a period of five years. This approachwas an increase from the prior year in recognition of the improved performance of the Company. These grants are part of a broader annual award program under which further awards are anticipated in 2016 and thereafter. This program is designed to align executives' interests with the interests of stockholders, provide a long-term planning horizon, mitigate excessive risk-taking, and retain participants by providing a compensation package that is competitive.
We also anticipate granting equity awardsmarket competitive and that vests over a period of time. Each of our named executive officers has received identical grants for 2013.the past three years to reflect our team-oriented philosophy.
Regulatory Considerations
As a publicly traded financial institution, the Company must contend with several, often overlapping, layers of regulations when considering and implementing compensation-related decisions. These regulations do not set specific parameters within which compensation decisions must be made, but do require the Company and the Compensation Committee to be mindful of the risks that often go hand-in-hand with compensation programs designed to incentivize the achievement of better than average performance. While the regulatory focus on risk assessment has been heightened over the last several years, the incorporation of general concepts of risk assessment into compensation decisions is not a recent development.
Under its long-standing Interagency Guidelines Establishing Standards for Safety and Soundness, the FDIC has held that excessive compensation is prohibited as an unsafe and unsound practice. In describing a framework within which to make a determination as to whether compensation is to be considered excessive, the FDIC has indicated that financial institutions should consider whether aggregate cash amounts paid, or noncash benefits provided, to employees are unreasonable or disproportionate to the services performed by an employee. The FDIC encourages financial institutions to review an employee's compensation history and to consider internal pay equity, and, as appropriate, to consider benchmarking compensation to peer groups. Finally, the FDIC provides that such an assessment must be made in light of the institution's overall financial condition.
In the summer of 2010,addition, the various financial institution regulatory agencies worked together to issuehave issued additional guidance, Guidance on Sound Incentive Compensation Policies, that was, in many respects, intended to serveserves as a complement to the Safety and Soundness standards. As its title would imply, the joint agency guidance sets forth a framework for assessing the soundness of incentive compensation plans, programs, and arrangements maintained by financial institutions. The joint agency guidance is narrower in scope than the Safety and Soundness standards because it applies only to senior executive officers and those other individuals who, either alone or as a group, could pose a material risk to the institution. With respect to those identified individuals, the joint agency guidance is intended to focus the institution's attention on balanced risk-taking incentives, compatibility with effective controls, and risk management, with a focus on general principles of strong corporate governance.
Also, onceIn addition to the foregoing, we anticipate that rules under the Dodd-Frank Act intended to implement further risk assessment guidelines and procedures as required under the Dodd-Frank Act, arewill eventually be finalized by the financial institution regulatory agencies and the SEC, the Company expectsSEC. We expect that itwe will also be subject to those further guidelines and procedures. However, initialInitial proposed guidance respectingwith respect to the Dodd-Frank Act risk assessment guidelines and procedures was issued during 2011 and, in2011. In large part that guidance restates the frameworks set forth in the Safety and Soundness standards and joint agency guidance described above.
Finally, in addition to the foregoing, as a publicly traded corporation, the Company is also subject to the SEC's rules regarding risk assessment. Those rules require a publicly traded company to determine whether any of its existing incentive compensation plans, programs, or arrangements creates risks that are reasonably likely to have a material adverse effect on the company.Company. We do not believe that our incentive compensation plans, programs or arrangements create risks that are reasonably likely to have a material adverse effect on the Company.
The Compensation Committee believes that a sensible approach to balancing risk-taking and rewarding reasonable, but not necessarily easily attainable, goals has always been a component of its overall assessment of the compensation plans, programs and arrangements it has established for the Company's named executive officers. In this regard, the Compensation Committee has revisited the components of the frameworks set forth in the Safety and Soundness standards and the joint agency guidance as an effective tool for conducting its own assessment of the balance between risk and reward built into the Company's compensation programs for named executive officers. In addition, the Committee continues to anticipate final guidance under the Dodd-Frank Act and will be prepared to incorporate into its risk assessment procedures any new guidelines and procedures as may be necessary or appropriate.
In making decisions about executive compensation, in addition to the above, we also consider the impact of other regulatory provisions, includingincluding: the provisions of Section 162(m) of the Code limitingthat may limit the tax deductibility of certain compensation unless it is considered performance-based underperformance-based; Section 409A of the Code regarding nonqualified deferred compensation,compensation; and the change-in-control provisions of Section 280G of the Code.Code regarding excise taxes and deduction limitations on golden parachute payments made in connection with a change in control. In making decisions about executive compensation, we also consider how various elements of compensation will impact our financial results. For example, we consider the impact of FASB ASC Topic 718, which requires us to recognize the compensation cost of grants of equity awards based upon the grant date fair value of those awards.
Compensation-Related Governance Policies
Share Ownership and Retention Guidelines
We believe that our named executive officers and non-employeenonemployee directors should have and maintain a significant equity interest in the Company. To promote such equity ownership and further align the interests of our executives and directors with our stockholders, we adoptedmaintain share retention and ownership guidelines for our named executive officersthat require Mr. Nelson to hold Company stock in an amount equal to or greater than two and one-half times his annual salary, Messrs. Gulling, Olafson and Winterbottom to hold Company stock in an amount equal to or greater than one and one-half times their annual salary, and our directors to hold Company stock in an amount equal to or greater than three times salary and for our directors equal to three timestheir annual cash retainer. Until the stock ownership guidelines are met, the executives and directors are expected to retain 50%at least 50 percent of any applicable shares received (on a net after tax basis) under our equity compensation program. The program isguidelines are subject to periodic review by the Compensation Committee.Committee, and compliance is monitored on an annual basis. All of our named executive officers and directors are currently in compliance with these guidelines.
Insider Trading Policy
The Company has had in place for several years an insider trading policy that permits open market transactions in Company stock beginning 48 hours after quarterly earnings have been made public until the 10th day of the third month in the quarter. In addition, our named executive officers may purchase Company stock through payroll deductions under our Employee Savings and Stock Ownership Plan. Changes to purchases under the Employee Savings and Stock Ownership Plan may only be done during the period when open market transactions are permitted.
Anti-Hedging Policy
The Company’s insider trading policy requires named executive officers to request approval prior toincludes provisions that specifically prohibit all employees and directors from entering into any hedging transactions involving the Company's securities.Company’s stock. To our knowledge, none of our officers or directors have entered into a hedging transaction involving Company stock in violation of this prohibition.
Anti-Pledging Policy
The Company’s insider trading policy includes provisions that prohibit all named executive officers and directors from keeping Company stock in a margin account. A named executive officer or director may pledge Company stock as collateral for a loan if written approval is obtained from the Chief Financial Officer. To our knowledge, none of our officers or directors has pledged his or her Company stock in violation of this policy.
Summary Compensation Table
The following table provides information concerning total compensation earned or paid for services rendered in the year ended December 31, 2012,2015, to those serving as our Chief Executive Officer, our Chief Financial Officer and our two other most highly compensated executive policymaking officers (of which we had two).officers. These gentlemenindividuals were the Company's named executive officers during 2012.2015. Compensation for 20112014 and 20102013 is also presented for these gentlemen, asindividuals because they were our named executive officers in those years as well. In 2012, West Bank, rather than the Company, paid Messrs. Nelson, Gulling, Olafson and Winterbottom.Winterbottom in all years shown.
| | Name and Principal Positions | Year | | Salary (1) | | Bonus (2) | | Stock Awards (3) | | Non-Equity Incentive Plan Compensation (4) | | All Other Compensation (5) | | Total (6) | Year | | Salary (1) | | Bonus (2) | | Stock Awards (3) | | Non-Equity Incentive Plan Compensation (4) (5) | | All Other Compensation (6) | | Total |
David D. Nelson | 2012 | | $ | 350,000 |
| | $ | 7,000 |
| (7 | ) | $ | 70,000 |
| | $ | — |
| | $ | 28,832 |
| | $ | 455,832 |
| 2015 | | $400,000 | | $8,000 | | $262,396 | | $240,000 | | $26,500 | | $936,896 |
President and Chief Executive Officer | 2011 | | 275,000 |
| | 74,250 |
| (8 | ) | 68,750 |
| (8 | ) | — |
| | 36,327 |
| | 454,327 |
| 2014 | | 350,000 | | 7,000 | | 171,851 | | 210,000 | | 26,000 | | 764,851 |
of the Company; | 2010 |
| 203,078 |
|
| 125,000 |
| | — |
| | — |
| | 50,750 |
|
| 378,828 |
| 2013 | | 350,000 | | 7,000 | | 97,253 | | 189,000 | | 25,500 | | 668,753 |
Chairman and Chief Executive | |
| |
| | | | | | | |
| | |
Officer of West Bank | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Douglas R. Gulling | 2012 | | $ | 247,000 |
| | $ | 4,940 |
| (7 | ) | $ | 49,400 |
| | $ | — |
| | $ | 30,486 |
| | $ | 331,826 |
| 2015 | | $275,000 | | $5,500 | | $262,396 | | $165,000 | | $26,500 | | $734,396 |
Executive Vice President and Chief | 2011 | | 225,000 |
| | 49,500 |
| (8 | ) | 45,000 |
| (8 | ) | — |
| | 27,010 |
| | 346,510 |
| |
Financial Officer of the Company; | 2010 |
| 214,789 |
|
| — |
| | — |
| | — |
| | 18,603 |
| | 233,392 |
| |
Director and Chief Financial Officer | | | | | | | | | | | | | |
Executive Vice President, Treasurer | | 2014 | | 247,000 | | 4,940 | | 171,851 | | 148,200 | | 24,700 | | $596,691 |
and Chief Financial Officer | | 2013 | | 247,000 | | 4,940 | | 97,253 | | 133,380 | | 24,700 | | 507,273 |
of the Company; | | |
Director, Executive Vice President | | |
and Chief Financial Officer | | |
of West Bank | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Harlee N. Olafson | 2012 | | $ | 247,000 |
| | $ | 4,940 |
| (7 | ) | $ | 49,400 |
| | $ | — |
| | $ | 30,486 |
| | $ | 331,826 |
| 2015 | | $275,000 | | $5,500 | | $262,396 | | $165,000 | | $26,500 | | $734,396 |
Executive Vice President and Chief | 2011 | | 210,000 |
| | 88,200 |
| (8 | ) | — |
| | — |
| | 23,359 |
| | 321,559 |
| 2014 | | 247,000 | | 4,940 | | 171,851 | | 148,200 | | 24,700 | | 596,691 |
Risk Officer of the Company; | 2010 | | 84,000 |
| | 30,000 |
| | — |
| | — |
| | 15,877 |
| | 129,877 |
| 2013 | | 247,000 | | 4,940 | | 97,253 | | 133,380 | | 24,700 | | 507,273 |
Director, Executive Vice President, | | | | | | | | | | | | | |
and Chief Risk Officer of West Bank | | | | | | | | | | | | | |
Director, Executive Vice President | | |
and Chief Risk Officer of West | | |
Bank | | |
| | | | | | | | | | | | | |
Brad L. Winterbottom | 2012 | | $ | 247,000 |
| | $ | 4,940 |
| (7 | ) | $ | 49,400 |
| | $ | — |
| | $ | 30,486 |
| | $ | 331,826 |
| 2015 | | $275,000 | | $5,500 | | $262,396 | | $165,000 | | $26,500 | | $734,396 |
Executive Vice President of the | 2011 | | 225,000 |
| | 49,500 |
| (8 | ) | 45,000 |
| (8 | ) | — |
| | 30,229 |
| | 349,729 |
| 2014 | | 247,000 | | 4,940 | | 171,851 | | 148,200 | | 24,700 | | 596,691 |
Company; | 2010 |
| 214,789 |
|
| — |
| | — |
| | — |
| | 22,042 |
| | 236,831 |
| 2013 | | 247,000 | | 4,940 | | 97,253 | | 133,380 | | 24,700 | | 507,273 |
Director and President of West Bank | | | | | | | | | | | | | |
The table below sets forth the estimated amount of compensation payable to each of theour named executive officers upon termination of such officer's employment in the event of (1) the officer's disability or death, (2) termination by the Company without cause or by the officer for good reason, in each case other than in connection with a change in control, and (3) termination by the Company without cause or by the officer for good reason, in each case in connection with a change in control. The amounts shown assume the termination was effective as of December 31, 2012,2015, and that the price of Company stock as of termination was the closing price of $10.78$19.75 on December 31, 20122015 (the last trading day of the year). The actual amounts to be paid can be determined only following the named executive officer's termination. We generally do not provide any benefits to our named executive officers solely as a result of a change in control.
Termination and Change in Control Benefits under Employment Agreement with Mr. Nelson
Termination and Change in Control Benefits under Employment Agreements with Messrs. Gulling, Olafson and Winterbottom
Further under the 2012 Plan, all restricted stock units generally will become fully vested upon the participant's termination of service due to the participant's disability or death.
The Audit Committee considered whether the non-audit services provided to the Company by McGladreyRSM US LLP are compatible with maintaining McGladreyRSM US LLP's independence and concluded that the independence of McGladreyRSM US LLP is not compromised by the provision of such services. The Audit Committee pre-approves all auditingaudit services and permitted non-audit services, including the fees and terms of those services, to be performed for the Company by its independent registered public accounting firm prior to engagement.
Stockholders wishing to recommend names of individuals for possible nomination to the Board may do so according to the following procedures:
Ms. Alice A. Jensen
West Bancorporation, Inc.
The Company has a process for stockholders to send communications to the Board or any of its individual members. Any stockholder wishing to communicate with one or more Board members should address a written communication to Mr. Gulling at one of the addresses noted above. Mr. Gulling will forward all appropriate stockholder communications to the full Board or its individual members as appropriate. Mr. Gulling will generally not forward communications that are primarily commercial in nature or related to an improper or irrelevant topic.
/s/ Alice A. Jensen
Alice A. Jensen
West Bancorporation, Inc.