Form 4: Burke & Herbert President Awarded 5,720 PRSUs

H. Charles Maddy III, President and Director of Burke & Herbert Financial Services Corp., received an award of 5,720 performance-based restricted stock units.

Summary

• H. Charles Maddy III, President and Director of Burke & Herbert Financial Services Corp. (BHRB), was awarded 5,720 performance-based restricted stock units (PRSUs).
• The award was granted under the Burke & Herbert Bank 2024 2025 Merger Incentive Plan, which was adopted on May 1, 2024.
• The transaction, dated January 22, 2026, was made pursuant to a Rule 10b5-1(c) plan, indicating a pre-arranged future acquisition of securities.
• These PRSUs will vest in three annual installments, with the first vesting date scheduled for May 3, 2026.
• Vesting is contingent upon Mr. Maddy's continued employment through each applicable vesting date.
• Each vested PRSU will be settled in shares of Burke & Herbert Financial Services Corp. common stock within 60 days of the vested date.
• Following this reported transaction, Mr. Maddy directly owns 40,550 shares of common stock.
• Additionally, he indirectly beneficially owns 19,592 shares through his spouse and 16,885 shares through an IRA.

Sentiment

Score: 7

Explanation: The award of performance-based restricted stock units is a positive signal for executive retention and alignment with shareholder interests, reflecting a standard and generally well-regarded compensation practice. The use of a 10b5-1 plan indicates proactive compliance. No negative financial implications are present.

Positives

• The award of performance-based restricted stock units aligns management's incentives with long-term company performance and shareholder value.
• The vesting schedule, tied to continued employment, promotes executive retention and stability within the leadership team.

Risks

• The Power of Attorney explicitly states that neither the Company nor the Attorney-in-Fact assumes any liability for the undersigned's responsibility to comply with Section 13 or Section 16 of the Exchange Act or Rule 144, or for any failure to comply with such requirements, or for disgorgement of profits under Section 16(b) of the Exchange Act.
• The Power of Attorney clarifies that it does not relieve the undersigned from responsibility for compliance with their obligations under Section 13 or Section 16 of the Exchange Act.

Future Outlook

The PRSUs will vest in three annual installments starting May 3, 2026, contingent on continued employment, and will be settled in common stock within 60 days of each vesting date.

Industry Context

This filing reflects a standard practice in the financial services industry of using equity-based compensation, such as restricted stock units, to incentivize and retain key executives. Such plans are often tied to specific corporate events like mergers, as indicated by the 'Merger Incentive Plan,' and are frequently pre-arranged under Rule 10b5-1 plans to ensure compliance with insider trading regulations.

Comparison to Industry Standards

• The use of performance-based restricted stock units (PRSUs) is a common executive compensation tool across the financial services sector, aligning executive interests with long-term shareholder value.
• The vesting schedule over multiple years is typical for retention and performance incentives, comparable to practices at regional banks and financial institutions of similar size to Burke & Herbert Financial Services Corp.
• The implementation of a Rule 10b5-1 plan for this transaction is a standard corporate governance practice for executives to pre-arrange stock transactions, mitigating concerns about insider trading.

Corporate Governance

Related Party Transactions

• The award of 5,720 performance-based restricted stock units to H. Charles Maddy III, an executive and director, constitutes a related party transaction as part of his compensation package.

Stakeholder Impact

• Shareholders: The award of performance-based units aims to align executive incentives with long-term shareholder value creation and company performance.
• Employees: The award is part of an incentive plan, potentially signaling a commitment to executive retention and a performance-oriented culture.
• Management: H. Charles Maddy III receives additional equity compensation, incentivizing continued performance and tenure with the company.

Next Steps

• Vesting of PRSUs in three annual installments, beginning May 3, 2026.
• Settlement of vested PRSUs into common stock within 60 days of each vesting date.

Key Dates

Recommendation

This Form 4 filing reports a routine executive compensation award and does not contain information that would fundamentally alter the investment thesis for Burke & Herbert Financial Services Corp. It reflects standard corporate governance and incentive practices, including the use of a Rule 10b5-1 plan for pre-arranged transactions. Investors should continue to evaluate the company based on its broader financial performance, strategic initiatives, and market conditions.

Keywords

Burke & Herbert Financial Services, BHRB, H. Charles Maddy III, Restricted Stock Units, PRSUs, Executive Compensation, SEC Form 4, Insider Trading, Stock Award, Corporate Governance, Merger Incentive Plan, Rule 10b5-1