DEF 14A: Carter Bankshares Sets Date for 2024 Annual Shareholder Meeting, Outlines Key Proposals

Carter Bankshares will hold its 2024 Annual Meeting of Shareholders on May 22, 2024, to vote on director elections, executive compensation, and auditor ratification.

Summary

• Carter Bankshares, Inc. will hold its 2024 Annual Meeting of Shareholders on May 22, 2024, in Martinsville, Virginia.
• Shareholders will vote on electing 12 directors, approving executive compensation on an advisory basis, and ratifying the appointment of Crowe LLP as the independent auditor for the fiscal year ending December 31, 2024.
• The Board of Directors recommends voting FOR all director nominees, FOR the advisory vote on executive compensation, and FOR the ratification of Crowe LLP as the independent auditor.
• The proxy statement provides details on director qualifications, executive compensation, corporate governance, and related person transactions.
• The company's compensation program is designed to offer competitive compensation to associates based on each individual's contribution to the company's overall success.
• The Nominating and Compensation Committee uses a peer group of financial institutions with reasonably similar market capitalization and business strategy to the Company to assess the competitiveness of current pay opportunities for our executive officers.
• The company's CEO pay ratio was 14:1 in 2023, with the median compensated associate earning $55,282 and the CEO earning $784,630.
• The company is committed to environmental, social, and governance (ESG) initiatives, including conserving natural resources, supporting communities, and promoting diversity and inclusion.
• The company's Board of Directors consists of 12 members, with a majority being independent directors.
• The company has adopted a written policy with respect to related party transactions that governs the review, approval or ratification of covered related party transactions.

Sentiment

Score: 6

Explanation: The document is primarily informational, outlining meeting details and governance matters. While there are some negative aspects related to performance goals not being met, the overall tone is neutral and focused on compliance and shareholder engagement.

Positives

• The company has a compensation program designed to attract and retain capable associates.
• The company is committed to environmental, social, and governance (ESG) initiatives.
• The company has a majority of independent directors on its Board.
• The company has a written policy for reviewing and approving related party transactions.
• The company is actively involved in community development and volunteer service.

Negatives

• Due to the impacts of a single large nonperforming loan ('NPL') relationship, none of the Company's performance goals were met for 2023.
• As a result, the participants were awarded 0% of their annual incentive award under the annual incentive plan.

Risks

• The company faces risks related to lending and credit functions, investment and interest rate risk, financial risk exposures, and cybersecurity.
• The company's compensation policies and practices could potentially encourage excessive risk-taking by associates.
• The company's financial performance could be impacted by economic conditions and other external factors.

Future Outlook

The company anticipates that the next vote on a say-on-pay proposal will occur at the 2025 Annual Meeting of Shareholders.

Management Comments

• The Board believes that the Company and its shareholders are best served currently by a leadership structure that separates the positions of Chairman and CEO.
• The Board believes that this leadership structure is the most efficient and effective leadership structure for the Company at this time.

Industry Context

The document references a peer group of financial institutions with reasonably similar market capitalization and business strategy to Carter Bankshares, suggesting a focus on maintaining competitive compensation and governance practices within the regional banking sector.

Comparison to Industry Standards

• The document compares Carter Bankshares' executive compensation to a peer group of 21 regional U.S. commercial banks ranging in asset size from approximately $3.1 to $7.5 billion.
• The peer group includes companies such as American National Bankshares, Inc., Bar Harbor Bankshares, and Capital City Bank Group, Inc.
• The company aims to maintain compensation programs that are competitive and close to the median of market practices of the peer companies.
• The company also benchmarks its non-employee Director compensation against the same peer group to ensure competitiveness.

Related Party Transactions

• The Company is a party to an agreement with Young, Haskins, Mann, Gregory and Wall, P.C., of which Chairman and Director James W. Haskins is an Attorney and Principal, to provide legal services.
• During 2023, the Company and the Bank, combined, paid an aggregate of $327,000 in various legal fees to Young, Haskins, Mann, Gregory and Wall, P.C.

Stakeholder Impact

• Shareholders are asked to vote on key proposals, influencing the direction and governance of the company.
• Associates are impacted by compensation policies and ESG initiatives.
• Communities benefit from the company's volunteer service and community investments.
• Customers are indirectly impacted by the company's commitment to data security and responsible business practices.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The Board and Nominating and Compensation Committee will consider the outcome of the advisory vote on executive compensation when making future decisions.
• The Audit Committee will consider making a change in independent registered public accounting firm for the Company for the fiscal year ending December 31, 2025, if shareholders do not ratify the appointment of Crowe LLP.

Key Dates

Keywords

shareholders, directors, compensation, governance, audit, Carter Bankshares, ESG, proxy statement, annual meeting, executive