pab bankshares, inc. - SNL Financial

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Elements of Executive Compensation In general, for executive management, the Compensation Committee utilizes benchmark compensation levels of other banks of comparable asset size, growth strategy, and complexity and with similar products and markets as a guide to setting compensation for its executive officers. A significant portion of the executive officers’ compensation is weighted toward elements contingent upon the Company’s annual and long-term performance. The goals of the Compensation Committee in establishing the specific executive compensation components include: • • Base salaries at the 50 th percentile of the benchmark peer group. Annual cash bonuses at the 50 th percentile of the benchmark peer group when subjective annual performance goals are achieved and between the 60 th and 75 th percentile if annual goals are exceeded. Annual cash bonuses for the CEO can range from 0% to 80% of the CEO’s base salary and from 0% to 60% of the other named executive officers’ base salaries. • Performance-based, long-term equity incentives at the 50 th percentile of the benchmark peer group are periodically granted as incentives to accomplish long-term strategic goals. Equity incentives can range from 0% to 25% of the named executive officer’s base salary. Allocation of Compensation Components Under the Company’s compensation structure, the targeted allocation of base salary, cash bonus and equity compensation varies depending on the officer’s level within the organization. Below is a summary of the range of potential compensation components as a percentage of total cash and equity compensation, excluding perquisites and other employee benefits. Position Level Base Salary Cash Incentive/ Bonus Equity Compensation CEO 45% - 100% up to 40% up to 15% Executive Vice President 50% - 100% up to 35% up to 15% Senior Vice President* 60% - 100% up to 30% up to 10% Vice President* 70% - 100% up to 25% up to 5% * Certain senior commercial lenders included in these categories could have the potential to earn up to 100% of their base salaries in annual incentives if certain individual performance objectives and the Company’s annual and long-term strategic performance goals are exceeded. In allocating compensation among these elements, the Compensation Committee believes that the compensation of the Company’s senior-most levels of management (including the Company’s named executive officers) have the greatest ability to influence the Company’s performance. Accordingly, performance-based incentives make up a greater portion of overall compensation for the most senior officers within the Company compared to lower levels of management who receive a greater portion of their compensation in base salary. Certain perquisites and other employee benefits are also provided to the Company’s named executive officers. Additional information regarding each element of executive compensation is provided below. 116
The following table summarizes in tabular form the compensation awarded to, earned by, or paid to the Company’s named executive officers for services rendered for the fiscal years ended December 31, 2009, 2008 and 2007. Executive Officer Summary Compensation Table For the Fiscal Years Ended December 31, 2009, 2008 and 2007 Option All Other Name and Principal Position Salary Bonus Awards 1 Compensation 2 Total Year ($) ($) ($) ($) ($) Donald J. Torbert, Jr. 3 2009 172,780 - 86,815 19,116 278,711 Principal Executive Officer 2008 172,780 - - 20,981 193,761 2007 172,780 58,950 23,883 23,541 279,154 Nicole S. Stokes 4 2009 105,362 - 33,112 11,515 149,989 Principal Financial Officer R. Wesley Fuller 2009 172,780 - 54,003 - 17,056 243,839 2007 172,780 58,950 23,883 24,087 279,700 George D. Henderson 2009 158,744 - 48,436 4,902 212,082 Executive Vice President 2008 155,000 - - 6,148 161,148 2007 148,560 53,450 19,107 11,744 232,861 David Hammond 5 2009 113,094 - 35,347 12,726 161,167 Executive Vice President M. Burke Welsh, Jr . 6 2009 82,216 - - 734,715 816,931 Former Principal Executive Officer 2008 309,800 - - 15,189 324,989 2007 309,800 120,750 30,252 21,413 482,215 (1) The values disclosed in the table represent the aggregate grant date fair value of awards in accordance with FASB Accounting Standards Codification 718 of options granted in 2009, 2008 and 2007 under the Company’s 1999 Stock Option Plan. For further discussion and details regarding the accounting treatment and underlying assumptions relative to stock-based compensation, see Note 18, “Stock Plans and Stock-based Employee Compensation,” of the notes to Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Report. During 2009, Mr. Welsh forfeited 15,912 unvested options due to his retirement from the Company and elected not to exercise 54,004 vested options available at his retirement. There were no forfeitures by named executive officers during 2008 or 2007. 117
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2009 Annual Report
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UNITED STATES SECURITIES AND EXCHAN
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TABLE OF CONTENTS Item Page Caution
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PART I ITEM 1. BUSINESS General PAB
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North Georgia During the fourth qua
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Supervision and Regulation The bank
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Payment of Dividends PAB is a legal
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An institution that is categorized
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USA Patriot Act of 2001 In October
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If our allowance for loan losses is
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Our net interest income could be ne
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We may need to raise additional cap
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If we fail to continue to meet all
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Performance Graph The following gra
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GAAP Reconciliation and Management
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The three primary reasons for this
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At December 31, 2009, commercial re
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Average Balances, Interest and Yiel
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Loan Portfolio We make both secured
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A summary of loans from each market
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The following table summarizes our
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The first component of the allowanc
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Summary of Loan Loss Experience The
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The following table summarizes our
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On September 4, 2009, the Company b
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Provision for Loan Losses The provi
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Income Taxes The provision for inco
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We have reduced the level of asset-
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MANAGEMENT’S REPORT ON INTERNAL C
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Because of its inherent limitations
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PAB BANKSHARES, INC. AND SUBSIDIARI
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Page 67 and 68: PAB BANKSHARES, INC. AND SUBSIDIARI
Page 69 and 70: NOTES TO CONSOLIDATED FINANCIAL STA
Page 109 and 110: JAMES W. GODBEE, JR Certified Publi
Page 111 and 112: KENNITH D. MCLEOD Certified Public
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Page 115 and 116: SECTION 16(a) BENEFICIAL OWNERSHIP
Page 117: Compensation Benchmarks and Use of
Page 121 and 122: Base Salaries The Company’s philo
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Page 125 and 126: (1) The listed stock option grants
Page 127 and 128: Potential Payments Upon Termination
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Page 131 and 132: (5) Includes 1,659,310 shares owned
Page 133 and 134: All related party transactions set
Page 135 and 136: 10.5 Rescission Agreement, dated De
Page 137 and 138: SIGNATURES Pursuant to the requirem
Page 139 and 140: Shareholder Information Corporate O
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