DEF 14A: FB Financial Corporation Invites Shareholders to 2024 Annual Meeting, Proposes Charter Amendments

Sentiment:

Proxy Statement 8 April 2024 5:06 PM

FB Financial Corporation's proxy statement details the agenda for the 2024 annual shareholder meeting, including the election of directors, executive compensation, and a proposal to eliminate supermajority voting requirements in the company's charter.

Worse than expectedThe company's Adjusted EPS of $3.01 and PPNR of $181.0 million did not meet the target levels for 2023.

Summary

FB Financial Corporation has released its proxy statement for the 2024 annual meeting of shareholders, scheduled for May 23, 2024, in Nashville, Tennessee.
Shareholders of record as of March 28, 2024, are entitled to vote on several key proposals.
The agenda includes the election of 12 directors, an advisory vote on executive compensation, and a proposal to eliminate supermajority voting standards in the company's charter.
The proxy materials are available online, and the company encourages shareholders to vote promptly.
A key proposal is the elimination of supermajority voting requirements, which currently require 80% approval for certain charter amendments.
The board recommends voting for all director nominees, the advisory vote on executive compensation, the charter amendments, and the ratification of Crowe LLP as the independent auditor for the fiscal year ending December 31, 2024.
The document also details corporate governance practices, director independence, and executive compensation, including base salaries, short-term incentives, and long-term equity incentives.
For 2023, the cash incentive paid to the NEOs is based on achieving the Company's annual adjusted earnings per common share ('Adjusted EPS', non-GAAP) goal, pre-provision net revenue ('PPNR', non-GAAP) goal and individual performance.
The Compensation Committee approved STIP payouts to the Company's NEOs for 2023: Christopher T. Holmes $356,286, Michael M. Mettee $122,857, R. Wade Peery $185,543, Travis K. Edmondson $122,857, Mark E. Hickman $62,657.

Sentiment

Score: 7

Explanation: The document is primarily informational, outlining the agenda for the annual meeting and providing details on corporate governance and executive compensation. The sentiment is neutral to slightly positive, as the company is taking steps to improve governance and align with shareholder interests.

Positives

The company is taking steps to improve corporate governance by proposing to eliminate supermajority voting requirements.
The board is actively engaged in risk management and oversight, with regular reports from the Chief Risk Officer.
The company has implemented a comprehensive set of information security policies and training programs.
The Compensation Committee uses an independent consultant to review executive compensation programs.
The company has a Compensation Recovery Policy (clawback) in place.
The company has stock ownership guidelines for directors and executive officers to align their interests with shareholders.

Negatives

The company's Adjusted EPS of $3.01 and PPNR of $181.0 million did not meet the target levels for 2023.
Dr. Agenia Clark attended less than 75% of the board and committee meetings in 2023 due to unavoidable conflicts with her new position as President of Fisk University.

Risks

The company faces risks related to credit, liquidity, strategy, operations, compliance, reputation, and cybersecurity.
The company's performance-based compensation relies on achieving specific financial metrics, which may not always be met.
The company's success depends on attracting and retaining key employees, which is influenced by the competitiveness of its compensation programs.

Future Outlook

The company aims to continue improving its corporate governance practices and aligning executive compensation with shareholder interests.

Industry Context

The proposal to eliminate supermajority voting requirements aligns with broader trends in corporate governance among public companies.

Comparison to Industry Standards

The document references a peer group of 20 publicly-traded banks and/or bank holding companies with median assets of $15.4 billion as of year-end 2023.
The company benchmarks its executive compensation against this peer group to ensure market competitiveness.
The company's long-term equity incentive compensation (PSUs) is based on the company's core return on average tangible common equity ('Core ROATCE') measured against companies in its performance comparator group.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Charter Amendment	Proposal to eliminate supermajority voting requirements for certain charter amendments.	Upon filing with the Secretary of State of Tennessee	If approved, the change would lower the voting threshold for certain actions, potentially making it easier for shareholders to influence corporate decisions.
Bylaw Amendment	Amendment to the bylaws to eliminate the supermajority voting threshold previously contained therein, with such amendment taking effect if and when the shareholders approve and adopt the Second Amended and Restated Charter.	Upon filing with the Secretary of State of Tennessee	If approved, the change would lower the voting threshold for bylaw amendments proposed by our shareholders from 80% of the voting power of all the then outstanding shares of stock of the Company to a majority of such voting power.

Related Party Transactions

FBK Aviation, LLC maintains a non-exclusive aircraft lease agreement with an entity owned by Mr. Jim Cross, with the Company recognizing income of $27,750 in 2023.
FirstBank leases various office spaces from entities owned by Mr. Jon Ayers and Mr. Jim Ayers, with aggregate payments of approximately $385,266 in 2023.
The Company invested in preferred stock of a privately held entity of which one of our NEOs, Mr. Peery, is on the Board of directors of the investee, with a carrying amount of $10,000,000 as of December 31, 2023.
The Company also entered a separate master loan purchase agreement with the entity to purchase up to $250,000,000 in manufactured loan housing production over an initial five-year term, with $33,163,569 of loans HFI purchased in 2023.

Stakeholder Impact

Shareholders will have the opportunity to vote on key proposals, including the election of directors and executive compensation.
Employees are affected by the company's compensation policies and benefit plans.
Customers and communities benefit from the company's corporate social responsibility efforts.

Next Steps

Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
The company will hold its annual meeting on May 23, 2024.
The company will file the Second Amended and Restated Charter with the Secretary of State of the State of Tennessee if the shareholders approve the Proposed Supermajority Amendments.

Key Dates

Date	Description
1984-09-25	Date of initial charter of FB Financial Corporation.
1984-10-26	Initial charter filed with the Secretary of State of Tennessee.
2000	Jon Ayers became a director of FirstBank.
2006	Orrin Ingram became a director of the Company.
2009	Jim Cross joined the Franklin board.
2010	Chris Holmes joined FirstBank as Chief Banking Officer and Melody Sullivan became a director of Franklin.
2012	Chris Holmes was named President of the Company and FirstBank and Emily Reynolds became a director of FirstBank.
2013	Chris Holmes was named Chief Executive Officer of the Company and Travis Edmondson was named Chief Executive Officer of Clayton Bank and Trust.
2016	FB Financial Corporation initial public offering.
2017	Jon Ayers and Jimmy Exum became directors of the Company and FirstBank acquired Clayton Bank.
2018	Travis Edmondson served as the East Tennessee Regional President of FirstBank and Crowe LLP became the independent registered public accounting firm.
2019	Beth Sims became General Counsel and Corporate Secretary for the Company and FirstBank and Raja Jubran became a director of the Company.
2020	Bill Carpenter became a director of the Company and Travis Edmondson became the Chief Banking Officer of FirstBank.
2021	Aimee Hamilton became the Chief Risk Officer for FirstBank.
2022	Bill Carpenter became Chair of the board and Wade Peery became Chief Innovations Officer.
2023-07	Mark Hickman started employment as Chief Human Resources Officer.
2023-09-12	Agenia Clark became the 18th President of Fisk University.
2024-03-01	R. Milton Johnson was appointed as a director of the Company.
2024-03-28	Record date for shareholders entitled to notice of and to vote at the 2024 annual meeting.
2024-04-11	Proxy materials are first being sent or made available to shareholders.
2024-05-23	Date of the 2024 annual meeting of shareholders.
2024-12-12	Deadline for shareholders to submit proposals for inclusion in the proxy materials for the 2025 annual meeting.
2025-01-23	Earliest date for shareholders to submit written notice of proposals to be brought before the 2025 annual meeting.
2025-02-21	Latest date for shareholders to submit written notice of proposals to be brought before the 2025 annual meeting.
2025-03-24	Deadline for shareholders to provide notice of intent to solicit proxies in support of director nominees other than the Company's nominees for the 2025 annual meeting.

Keywords

proxy statement, annual meeting, corporate governance, executive compensation, director election, supermajority voting, risk management, financial performance, shareholders, FB Financial

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.