pab bankshares, inc. - SNL Financial

Base Salaries
The Company’s philosophy provides each member of executive management with a level of assured cash
compensation in the form of base salary that is competitive in nature and reflects the officer’s professional status and
accomplishments. Below is a summary of the peer analysis conducted by Blanchard Chase and presented the
Compensation Committee during 2009. Note that the information gathered for the analysis was derived from 2008
information, but it is being compared to the Company’s executive officers’ 2009 base salaries. As discussed below, the
Company’s executive officers’ 2009 base salaries were the same as their 2008 base salaries.
2008
and
2009
Base
Salary
2008
Benchmark
Peer Average
Name
Title
Variance
(Dollars In Thousands)
Torbert Chief Executive Officer $172.8 $331.4 -47.8%
Stokes EVP – Chief Financial Officer $105.0 $184.0 -42.9%
Fuller EVP - Chief Administrative Officer $172.8 $258.5 -33.1%
Hammond EVP - Chief Credit Officer $113.0 $173.0 -34.6%
Henderson EVP - Chief Banking Officer $148.6 $200.7 -25.9%
Welsh Former Chief Executive Officer $309.8 $331.4 -6.5%
In December 2007, upon the recommendation of the Compensation Committee, the Board of Directors decided
not to increase the base salaries of the named executive officers for 2008. The Compensation Committee made this
recommendation due to lower Company performance in 2007 and continued earnings pressure expected in 2008.
In December 2008, upon the recommendation of the Compensation Committee, the Board of Directors decided
not to increase the base salaries of the named executive officers for 2009. The Compensation Committee made this
recommendation due to the continued deteriorating economy, the level of nonperforming assets at the Bank and the
Company’s earnings outlook for 2009.
Bonuses
The Company’s practice has been to award cash bonuses to management based upon various performance
evaluations. In recent years for executive management, the practice has been to subjectively assess the performance of the
officer and the performance of the Company relative to annual budgeted expectations, long-term strategic objectives and
peer benchmarks.
In December 2007, the Compensation Committee reviewed the performance of each executive officer to
determine their recommendation for cash bonuses. Although the Company’s net income for 2007 would not compare to
the record earnings from 2006 or 2005, the Compensation Committee determined that executive management continued to
make progress towards certain strategic (non-financial) objectives. In addition, the Compensation Committee determined
that executive management had performed extremely well to date in managing the Company’s risk in a difficult operating
environment. On the recommendation of the Compensation Committee, the Board of Directors approved a bonus equal to
39% of the base salary for Mr. Welsh and bonuses equal to 31-35% of the base salary for each of the other named
executive officers in 2007. These cash bonuses were less than the prior year’s cash bonuses and were in proportion to the
decrease in earnings in 2007 as compared to 2006.
In December 2008, on the recommendation of the Compensation Committee, the Board of Directors decided not
to pay bonuses to executive management due to the deteriorating economy and net loss recorded for the Company in 2008.
In December 2009, on the recommendation of the Compensation Committee, the Board of Directors decided not
to pay bonuses to executive management due to the deteriorating economy and net loss recorded for the Company in 2009.
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