DEF: Primis Financial Corp. to Hold 2025 Annual Meeting, Proposes Board Declassification and New Incentive Plan

Primis Financial Corp. announces its 2025 Annual Meeting of Stockholders, featuring proposals to declassify the Board of Directors and approve a new omnibus incentive plan.

Summary

• Primis Financial Corp. will hold its 2025 Annual Meeting of Stockholders on June 26, 2025, in Richmond, VA.
• Stockholders will vote on several key proposals, including the election of four Class I directors, an amendment to declassify the Board of Directors, and the approval of a new omnibus incentive plan.
• The meeting will also include a vote to ratify the appointment of Crowe LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2025.
• An advisory vote on executive compensation will also be conducted.
• The record date for determining stockholders eligible to vote is April 28, 2025.
• The Board of Directors recommends voting for the election of directors, the amendment to declassify the board, the approval of the omnibus incentive plan, and the ratification of Crowe LLP's appointment.
• The Board of Directors also recommends voting for the advisory vote on executive compensation.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While there are positive aspects such as the proposed board declassification and new incentive plan, there are also negative aspects such as the reported net loss and accounting issues. The overall sentiment is neutral to slightly positive.

Positives

• The proposal to declassify the Board of Directors aims to enhance corporate governance practices and increase Board accountability.
• The new omnibus incentive plan is designed to attract, retain, and motivate key employees by aligning their interests with those of stockholders.
• The company is actively engaged in environmental, social, and governance (ESG) practices, including volunteerism, sponsorships, and community support programs like Primis Works and the Sheflett Memorial STEM Challenge.
• The Board of Directors has adopted stock ownership guidelines for directors to further align their long-term interests with those of the company's stockholders.

Negatives

• The company reported a net loss for 2024, which led to a substantial reduction in short-term incentive payments for executive management.
• Financial reports were not filed timely in 2024 due to accounting issues with a third-party originated consumer loan portfolio.
• The company had to restate its 2022 financial statements due to accounting errors related to a third-party agreement.

Risks

• Information security is a significant operational risk for financial institutions, including the risk of losses resulting from cyber-attacks.
• The company faces potential risks associated with climate change and oversees ESG risk management initiatives and activities.
• The company's success depends on its ability to attract, retain, and motivate executive management talent.
• The company's performance-based equity awards are subject to the achievement of adjusted earnings per share compound annual growth targets, which may not be met.

Future Outlook

The company aims to build formal ESG programs and demonstrate how Primis culture helps shape its service to all stakeholders.

Management Comments

• The Board of Directors believes bifurcating the roles of Chief Executive Officer and Chairman is in the best interests of the Company and its stockholders.
• The Compensation Committee believes tying compensation to Company performance is critical for ensuring management alignment with stockholders, particularly for CEO compensation.

Industry Context

The document reflects a trend in corporate governance towards declassifying boards and increasing shareholder engagement in executive compensation decisions.

Comparison to Industry Standards

• The Compensation Committee reviewed a peer group comprised of 22 mid-Atlantic U.S. banks ranging in assets from $2.1 billion to $6.3 billion, with median assets of $3.6 billion.
• The peer group included companies such as ACNB Corporation, Bankwell Financial Group, Inc., BCB Bancorp, Inc., and C&F Financial Corporation.
• The company evaluated publicly available compensation data for the peer group but did not benchmark the compensation of its named executive officers to a certain percentage or range of compensation within the market data collected.

Management Changes

Corporate Governance

Related Party Transactions

• Sharon C. Taylor, the daughter of Marie T. Leibson, is employed as a Vice President of the Bank, and received a salary, bonus and stock awards totaling approximately $124,465 in 2024.
• Christian D. Zember, the nephew of Dennis J. Zember, Jr, is employed as a small business banker of the Bank, and received a salary totaling approximately $81,565 in 2024.
• As of December 31, 2024, there were 35 loans outstanding to directors and executive officers and certain significant stockholders of the Company and the Bank totaling $17.6 million in the aggregate.

Stakeholder Impact

• The proposed changes to corporate governance and executive compensation aim to align the interests of management with those of stockholders.
• The company's ESG initiatives are intended to benefit the communities it serves and promote positive social impacts.
• The company's commitment to diversity and inclusion aims to create a more equitable and inclusive workplace for employees.

Next Steps

• Stockholders are urged to submit their proxy as soon as possible so that their shares can be voted at the meeting in accordance with their instructions.
• The Board and the Compensation Committee will review and consider the voting results when making future decisions regarding its executive compensation program.
• The Audit Committee will reconsider whether or not to retain Crowe LLP if the stockholders fail to ratify the selection.

Key Dates

Keywords

Proxy Statement, Annual Meeting, Board of Directors, Omnibus Incentive Plan, Executive Compensation, Corporate Governance, Director Election, Stockholders, Primis Financial Corp, Declassify Board