UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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March 26, 2024
Dear Fellow Shareholders:
You are cordially invited to attend the 2024 annual meeting of shareholders of Atlantic Union Bankshares Corporation to be held on Tuesday, May 7, 2024 at 10:00 a.m., Eastern Time. Our meeting will be held in a virtual-only format conducted via a live audio webcast at https://meetnow.global/MVM7SX6. You will be able to participate in the virtual annual meeting online, vote your shares electronically during the meeting, and submit questions prior to and during the meeting. You will not be able to attend the meeting in person.
For more information on how to attend the annual meeting, please see the instructions in the accompanying proxy statement, beginning on page 83.
At the annual meeting, shareholders will be asked to:
1. | elect directors to serve until the 2025 annual meeting of shareholders; |
2. | ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2024; |
3. | approve the compensation of our named executive officers (an advisory, non-binding “Say on Pay” resolution); and |
4. | transact any other business that may properly come before the meeting or any adjournments or postponements of the meeting. |
At the annual meeting, we will also report on our condition and performance in 2023, and you will have an opportunity to submit questions.
Your vote is very important. I encourage you to read our 2024 proxy statement, our 2023 annual report to shareholders, and the other proxy materials. Please submit your proxy as soon as possible by internet, telephone, or mail to ensure your vote is represented at the annual meeting, regardless of whether you plan to attend the meeting.
We value your continued support and loyalty. Thank you.
Very truly yours, | |
John C. Asbury |
Atlantic Union Bankshares Corporation
4300 Cox Road
Glen Allen, Virginia 23060
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS |
| Date and Time: |
|
| Live Audio Webcast: |
Matters to be Voted on:
● | Electing directors to serve until the 2025 annual meeting of shareholders; |
● | A proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2024; |
● | A proposal to approve the compensation of our named executive officers (an advisory, non-binding “Say on Pay” resolution); and |
● | Any other business that may properly come before the meeting or any adjournments or postponements of the meeting. |
Record Date:
Our common shareholders, as of the close of business on March 13, 2024, are entitled to notice of and to vote at the annual meeting and any adjournments or postponements of the meeting.
Your Vote is Very Important:
Our annual meeting will be held solely by means of remote communication via a live audio webcast. You will be able to participate in the virtual annual meeting online, vote your shares electronically during the meeting, and submit questions prior to and during the meeting. You will not be able to attend the meeting in person.
Please submit your proxy as soon as possible by internet, telephone, or mail to ensure your representation at the annual meeting, regardless of whether you plan to attend the meeting. Please refer to the discussion beginning on page 80 of the proxy statement for information on how to vote your shares and attend our annual meeting virtually.
By Order of the Board of Directors, | |
Rachael R. Lape General Counsel/Corporate Secretary March 26, 2024 |
Important Notice Regarding the Availability of Proxy Materials for |
PROXY STATEMENT |
Table of Contents
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 2
GENERAL |
The Board of Directors (the “Board”) of Atlantic Union Bankshares Corporation is furnishing you with this proxy statement to solicit proxies on its behalf to be voted at our 2024 annual meeting of shareholders, or any adjournments or postponements of the meeting. As used in this proxy statement, the terms “the Company,” “we,” “us” and “our” refer to Atlantic Union Bankshares Corporation and its subsidiaries. Additionally, references to the “Bank” refer to Atlantic Union Bank.
Proxy Materials
We mailed to most of our shareholders a Notice of Internet Availability of our Proxy Materials (the “Notice of Internet Availability”) with instructions on how to access our proxy materials over the Internet and how to vote. The Notice of Internet Availability or, in some cases, this proxy statement, and the accompanying form of proxy, was first mailed to shareholders on or about March 26, 2024. By furnishing proxy materials over the Internet, we are able to reduce the printing and mailing costs of this solicitation and help conserve natural resources. If you receive the Notice of Internet Availability but would still like to receive paper copies of the proxy materials, please follow the instructions on the Notice of Internet Availability.
Website
Website references throughout this proxy statement are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this proxy statement.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 3
PROXY STATEMENT SUMMARY |
Voting Your Shares
You may vote at our 2024 annual meeting if you were a common shareholder as of the close of business on March 13, 2024.
| Online Before the Meeting |
| By Mail | |||
By Telephone | Online During the Meeting |
If you are a beneficial (or street name) holder and you would like to vote during the meeting, you must obtain a legal proxy from your bank, broker or other nominee and submit it to our transfer agent in advance of the meeting. See “Voting and Other Information” beginning on page 80 for more information.
Proposals For Your Vote | Board Voting | Page | ||||
1. | Election of directors | “FOR” each nominee | 5 | |||
2. | Ratification of the appointment of our independent registered public accounting firm for 2024 | “FOR” | 18 | |||
3. | Approving the compensation of our named executive officers (an advisory, non-binding “Say on Pay” resolution) | “FOR” | 19 |
Attending our Annual Meeting
To attend, vote, and submit questions during our annual meeting, visit https://meetnow.global/MVM7SX6 and enter the control number found on your Notice of Internet Availability or on your proxy card. If you do not have a control number, you may still attend the meeting as a guest in listen-only mode, but you will not be able to vote your shares or otherwise participate in the meeting. If you hold your shares in street name through a bank, broker, or other nominee, you must register in advance of the meeting to vote and ask questions during the meeting. See “Attending Our Annual Meeting” beginning on page 83 for more information.
The live audio webcast of the meeting will begin promptly at 10:00 a.m., Eastern Time. We encourage you to access the meeting 15 minutes before the start time. If you experience technical difficulties, you can use the technical resources available on the virtual meeting website at https://meetnow.global/MVM7SX6 or contact investor.relations@atlanticunionbank.com. If we experience technical issues in convening or hosting the meeting, we will promptly post information on the Investor Relations > Company Info > Annual Reports & Proxy section of our website at www.atlanticunionbank.com, including when the meeting will be reconvened.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 4
1
PROPOSAL 1—ELECTION OF DIRECTORS |
Pending Merger with American National Bankshares Inc.
On July 24, 2023, we entered into an Agreement and Plan of Merger with American National Bankshares Inc. (“American National”), which we refer to as the “merger agreement.” Under the merger agreement, American National will merge with and into Atlantic Union, with Atlantic Union continuing as the surviving entity, which we refer to as the “merger.”
Under the merger agreement, at the effective time of the merger, we must increase the size of our Board by two, and two current members of the board of directors of American National—Nancy Howell Agee and Joel R. Shepherd—will each be appointed to our Board and the board of directors of the Bank. Under the merger agreement, following the closing of the merger, we have agreed to nominate Ms. Agee and Mr. Shepherd for re-election to our Board at least until our 2027 annual meeting of shareholders, subject to compliance by the Board with its fiduciary obligations and applicable law, including compliance with our organizational documents and corporate governance guidelines.
The Board has nominated Ms. Agee and Mr. Shepherd for election at our 2024 annual meeting, contingent on the closing of the merger before our 2024 annual meeting. As of the date of this proxy statement, we have received all regulatory and shareholder approvals needed to close the merger, and we expect the merger to close on April 1, 2024, subject to the satisfaction of customary closing conditions. However, if the merger is not completed before our 2024 annual meeting, Ms. Agee and Mr. Shepherd will not stand for election to the Board at our 2024 annual meeting and any votes cast for either Ms. Agee or Mr. Shepherd will not be counted.
Board Size
Our bylaws provide that the number of directors on the Board will be fixed from time to time by the Board. As of the date of this proxy statement, the size of our Board is fixed at 14 directors.
As described above, if the merger is completed before our 2024 annual meeting, our Board will increase its size by two to 16 directors, and Ms. Agee and Mr. Shepherd will be appointed to fill these newly created seats.
In addition, in February 2024, two of our directors, Thomas P. Rohman and Thomas G. Snead, Jr., each informed the Board that he will retire at our 2024 annual meeting. Accordingly, the Board has determined to decrease the size of the Board by two, effective upon their retirement at our 2024 annual meeting, such that no vacancies will result from Mr. Rohman’s or Mr. Snead’s retirement.
If the merger is completed before our 2024 annual meeting, and after giving effect to the above-referenced retirements, the size of the Board following the 2024 annual meeting will be fixed at 14 directors. However, if the merger is not completed before our 2024 annual meeting, and after giving effect to the above-referenced retirements, the size of the Board following the 2024 annual meeting will be fixed at 12 directors.
Nominees for Election as Directors
Our directors are elected annually to a one-year term to expire at the next annual meeting of shareholders or until his or her successor is duly elected and qualified. If the merger is completed before the 2024 annual meeting, shareholders will vote on the 14 nominees listed below. If the merger is not completed before the 2024 annual meeting, Ms. Agee and Mr. Shepherd will not stand for election at the 2024 annual meeting and any votes cast for either Ms. Agee or Mr. Shepherd will not be counted. All of our nominees, except for Ms. Agee and Mr. Shepherd, are current directors standing for re-election. If the merger closes before the 2024 annual meeting, Ms. Agee and Mr. Shepherd will be appointed to the Board as of the effective time of the merger.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 5
Each director nominee has consented to being named in this proxy statement and to serving as a director if elected. If any nominee is unable to stand for election for any reason, the shares represented at our annual meeting may be voted for another candidate proposed by our Board, or our Board may choose to reduce its size.
Nominee |
| Age | Principal Occupation | Director | Independent | Committee |
Nancy Howell Agee | 71 | President and Chief Executive Officer of Carilion Clinic | 2024+ | Yes | — | |
John C. Asbury | 58 | President of the Company; Chief Executive Officer of the Company and Bank | 2016 | No | Executive | |
Patrick E. Corbin | 69 | Managing Shareholder of | 2018 | Yes | Audit (C), Executive, | |
Rilla S. Delorier | 57 | Former Executive Vice President and Chief Strategy and Digital Transformation Officer at Umpqua Bank | 2022 | Yes | Compensation, Risk | |
Frank Russell Ellett | 57 | President of Excel Truck Group | 2019 | Yes | Audit, Compensation, | |
Paul Engola | 52 | Deputy Group President of the Dynetics Group of Leidos Holdings, Inc. (“Leidos”) and Executive Vice President, National Security Space, for Leidos | 2023 | Yes | Risk | |
Donald R. Kimble | 64 | Former Chief Financial Officer, Vice Chair and Chief Administrative Officer of KeyCorp and President of KeyBank NA | 2023 | Yes | Audit | |
Patrick J. McCann | 67 | Former Chief Financial Officer of University of Virginia Foundation | 2004 | Yes | Audit, Executive, | |
Michelle A. O’Hara | 48 | Executive Vice President and Chief Human Resources Officer of Science Applications International Corporation, Inc. | 2023 | Yes | Compensation | |
Linda V. Schreiner | 64 | Former Senior Vice President of Markel Corporation | 2012 | Yes | Compensation (C), | |
Joel R. Shepherd | 60 | President, Virginia Home Furnishings, Inc. and 220 Self Storage, Inc. | 2024+ | Yes | — | |
Ronald L. Tillett | 68 | Managing Director and Head, | 2003 | Yes | Executive (C) | |
Keith L. Wampler | 66 | Partner at PBMares, LLP | 2014 | Yes | Risk (C), Trust | |
F. Blair Wimbush | 68 | Former Chief Real Estate and Corporate Sustainability Officer | 2018 | Yes | Compensation, |
* Excludes director service with companies merged with the Company.
+ Assumes the merger is completed before our 2024 annual meeting.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 6
Identifying and Evaluating Director Candidates
Our Board regularly reviews and evaluates its size and composition. Our Nominating and Corporate Governance Committee is responsible for identifying and recommending director candidates to our Board for nomination. The Board, in coordination with the Nominating and Corporate Governance Committee, also considers Board succession planning and committee membership. Our Nominating and Corporate Governance Committee uses a variety of methods for identifying potential director candidates, including third-party search firms, and will also consider candidates proposed by directors, management and by our shareholders.
When considering a candidate for membership on the Board, the Nominating and Corporate Governance Committee evaluates the collective contribution of qualifications, skills, and experience of Board nominees. The goal of that evaluation is to ensure that the Board, as a whole, possesses the necessary qualifications, skills, and experience relevant to the Company for effective oversight.
The Nominating and Corporate Governance Committee seeks directors who:
● | demonstrate integrity, accountability, informed judgment, financial literacy, and vision; |
● | encompass a range of talent, skill and expertise sufficient to provide sound and prudent guidance, which would be of assistance to management in operating our business; |
● | can devote the necessary time to discharge their duties; and |
● | are prepared to represent the interests of all of our shareholders and not just one particular constituency. |
The Nominating and Corporate Governance Committee and the Board also believe it is important to have directors from various backgrounds and professions in order to ensure that the Board has a wealth of experiences to inform its decisions. Consistent with this philosophy, the Nominating and Corporate Governance Committee and the Board, believe that diversity contributes to the overall effectiveness of the Board. The Nominating and Corporate Governance Committee members generally conceptualize diversity expansively to include, without limitation, concepts such as race, gender, ethnicity, sexual orientation, education, age, work experience, professional skills, geographic location and other qualities or attributes that contribute to Board heterogeneity.
As part of its regular succession planning process, the Nominating and Corporate Governance Committee annually engages in a review and analysis of Board composition, including identification of priority characteristics related to diversity, experience, and expertise of future director candidates. In 2023, the Nominating and Corporate Governance Committee retained a third-party search firm to assist it in identifying potential Board candidates who meet our qualification and experience requirements and, for the candidates identified by the search firm, to compile and evaluate information regarding each candidate’s qualifications, experience, and education. In its work with the third-party search firm, and consistent with our objectives to enhance diversity, the Nominating and Corporate Governance Committee requested that the firm prioritize the inclusion of gender and racially/ethnically diverse candidates who also possessed specified skills and expertise relevant to the evolving needs of our business and industry. Through this engagement, our third-party search firm identified Mr. Engola, Mr. Kimble and Ms. O’Hara as nominees, each of whom were appointed to our Board on December 6, 2023.
As discussed above, under the merger agreement, at the effective time of the merger, we will increase the size of the Board by two and appoint two current members of the board of directors of American National—Ms. Agee and Mr. Shepherd—to our Board and the board of directors of the Bank.
With respect to incumbent directors considered for re-election, in addition to the foregoing factors, the Nominating and Corporate Governance Committee also assesses each director’s performance, contribution, level of engagement, and meeting attendance record. See “Board and Committee Evaluations” beginning on page 30 for additional information on the Board’s self-evaluation process.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 7
Key Statistics About Our Director Nominees
The below statistics assume the merger is completed before our 2024 annual meeting.
Tenure | Years of Service | Diversity* | Average Age | |||||
0-4+ | ![]() ~ 30% Gender Diverse | ![]() ~ 20% Racially Ethnically Diverse | ![]() ~ 62 Years | ||||
5-9+ | |||||||
10-14+ | |||||||
>15 | |||||||
Average Tenure: 6.2 years | ~ 93% Independent | ||||||
* Four of our 14 director nominees are women, and three of our 14 director nominees are racially/ethnically diverse. If the merger is not completed before the 2024 annual meeting, three of our 12 director nominees are women, and three of our 12 director nominees are racially/ethnically diverse.
Skills Matrix and Description of Director Nominees’ Knowledge, Skills and Experience
The matrix below provides information regarding our director nominees’ knowledge, skills and experience that we believe are most relevant in light of our business, long-term strategies and risks. Our nominees represent a broad range of backgrounds and experience, and each nominee possesses numerous other competencies not identified below. Additional information on why we view such knowledge, skills and experience as important is discussed following the matrix. The fact that a nominee is not designated as having a particular attribute does not indicate that the nominee does not possess that attribute or would not be able to make a meaningful contribution to the Board’s decision-making or oversight in that area.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 8
Executive Leadership | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |
Finance and Accounting | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||
Banking/Financial Services | ● | ● | ● | ● | ● | ● | ● | ● | ||||||
Technology/Cybersecurity | ● | ● | ● | |||||||||||
Strategic Planning | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||
Human Capital/Compensation | ● | ● | ● | ● | ● | ● | ● | |||||||
Risk Management | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||||
Legal and Regulatory | ● | ● | ● | ● | ||||||||||
Retail Distribution/Marketing | ● | ● | ● | ● | ||||||||||
Mergers and Acquisitions | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● |
Executive Leadership | Human Capital/Compensation | |
We value directors with experience serving as senior executives running public companies, private companies or other organizations, as this enhances the Board’s perspective of our operations and challenges. | Our success depends in part on our ability to attract, retain, develop and motivate our human capital, including our senior leadership. We value directors with experience in compensation, incentive planning and talent management. | |
Finance and Accounting | Risk Management | |
We use numerous financial metrics to measure our performance and we are subject to complex accounting and financial reporting requirements. We value directors with experience in finance and accounting, which helps them more effectively oversee and assess our operating and strategic performance and financial reporting. | Our Board plays a critical role in the oversight of risk. We value directors with experience in overseeing or managing risks and who understand the most significant risks that we face. | |
Banking/Financial Services | Legal and Regulatory | |
We value directors who have experience in our industry, which provides the Board with valuable insight into our challenges and opportunities. | We operate in a heavily regulated industry and we value directors with knowledge of the laws and regulations applicable to the banking industry and corporations generally. | |
Technology/Cybersecurity | Retail Distribution/Marketing | |
We rely on information technology systems to conduct our business. We value directors with experience in technology strategies and innovation and/or mitigating and managing cybersecurity risk, which helps enhance our oversight of technology and cybersecurity risks. | We provide products and services through our retail branch network and our technology offerings. We value directors with experience in building customer relationships, branding, and the use of digital marketing. | |
Strategic Planning | Mergers and Acquisitions | |
We value directors with experience in defining and driving strategic direction and growth, which helps the Board critically evaluate our strategic plans. | We regularly evaluate strategic opportunities and we value directors with experience with mergers and acquisitions. |
* As discussed above, Ms. Agee’s and Mr. Shepherd’s nominations are contingent on the completion of the merger before our 2024 annual meeting.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 9
Biographical Information of Our Director Nominees
Set forth below are each nominee’s name, age as of the date of this proxy statement, principal occupation, business experience, and U.S.-listed public company directorships held during the past five years. We also discuss the qualifications, attributes, and skills that led our Board to nominate each nominee for election as a director.
Nancy Howell Agee | ||
Age 71 | Roanoke, Virginia | Other Public Company Boards: American National Bankshares Inc., RGC Resources, Inc. and Healthcare Realty Trust Incorporated Ms. Agee is the President and Chief Executive Officer of Carilion Clinic, a health care organization, a position she has held since 2011. Ms. Agee has served as a director of American National since 2019. Ms. Agee has been nominated as a director of the Company contingent on the closing of our merger with American National before our 2024 annual meeting, and she will become a director of the Company at the effective time of the merger. Ms. Agee serves as a director on two other public company boards—RGC Resources, Inc., where she has served since 2005, and Healthcare Realty Trust Incorporated, where she has served since 2016. She chairs the statewide economic development entity, Go VA, and serves on the Governor’s advisory committee for revenue estimates, GACRE. She also chairs the Virginia Foundation for Independent Colleges and serves as Vice Chair of the Virginia Business Higher Education Council. She is also the former Chair of the American Hospital Association. Ms. Agee received a B.S. in Nursing from the University of Virginia and a Master of Science in Nursing from Emory University. Ms. Agee’s extensive leadership experience as President and Chief Executive Officer of a large healthcare organization and her many years of service in the Roanoke market area allow her to contribute substantially to our Board. | ||
John C. Asbury | ||
Age 58 | Director Since 2016 | Richmond, Virginia Mr. Asbury has been Chief Executive Officer of the Company since January 2017, and President of the Company since October 2016. He also serves as Chief Executive Officer of the Bank, a position he has held since October 2016, and he previously served as President of the Bank from October 2016 until September 2017 and May 2018 until September 2018. Before joining us, he served as President and Chief Executive Officer of First National Bank of Santa Fe from February 2015 until August 2016. Before that, he served as Senior Executive Vice President and Head of the Business Services Group at Regions Bank from May 2010 until July 2014, after joining Regions Bank in March 2008 as Business Banking Division Executive. Mr. Asbury also served as a Senior Vice President at Bank of America in a variety of roles. Mr. Asbury received his B.S. degree in Business from Virginia Polytechnic Institute and State University (“Virginia Tech”) and his M.B.A. from The College of William & Mary. Mr. Asbury’s extensive executive-level experience in the banking industry and his knowledge of our business allow him to contribute substantially to our Board. |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 10
Patrick E. Corbin | ||
Age 69 | Director Since 2018 | Chesapeake, Virginia Mr. Corbin is a Managing Shareholder of Corbin & Company, P.C., an accounting firm, a position he has held since 1983, and he has been a certified public accountant since 1979. He is a member of a number of professional organizations, including the American Institute of Certified Public Accountants, the Virginia Society of Certified Public Accountants, and the Tidewater Chapter of the Virginia Society of Certified Public Accountants. He is a director and past chairman of the Chesapeake Alliance, and was designated as “Super CPA” by Virginia Business magazine in the fields of litigation support and business valuation for the years 2002 to 2012. He served as Chairman of the Board of Directors of Xenith Bankshares, Inc. (“Xenith”) and was a director of Xenith from 2009 until we acquired Xenith in 2018. Mr. Corbin received his B.S. degree in Accounting from Virginia Tech. Mr. Corbin’s extensive financial and risk management experience, as well as his background as a board member of publicly held financial institutions and as Chairman of Xenith, allow him to contribute substantially to our Board. |
Rilla S. Delorier | ||
Age 57 | Director Since 2022 | Portland, Oregon | Other Public Company Boards: Coastal Financial Corporation and Wisdom Tree Investments, Inc. Ms. Delorier is the former Executive Vice President (“EVP”) and Chief Strategy and Digital Transformation Officer at Umpqua Bank, a position she held from 2017 until 2020. Before that, she held various roles at SunTrust Bank from 2006 until 2016, including EVP, Retail Bank, Chief Marketing Officer, and Wealth Management Marketing Director. She served as Chief Marketing Officer at PNC Advisors and as EVP of Customer Strategy at PNC Bank from 1999 to 2006. She has served on the boards of Central City Concern since 2018 and NYMBUS since November 2020. She also serves on the board of Coastal Financial Corporation, a publicly held company, a position she has held since November 2020, where she serves on the audit and compensation committees. She was appointed to the board of Wisdom Tree Investments, Inc., a publicly traded company, in 2023, where she serves on the audit committee. Ms. Delorier received her B.S. in Marketing and Management from the University of Virginia and her M.B.A. from Harvard Business School. Ms. Delorier’s experience in the banking industry, particularly with product development, operations, cyber-security practices, strategic partnerships, and analytics, allows her to contribute substantially to our Board. |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 11
Frank Russell Ellett | ||
Age 57 | Director Since 2019 | Roanoke, Virginia Mr. Ellett is the President of Excel Truck Group, a dealer and distributor for Freightliner and Mack trucks and Wabash National trailers with offices in Virginia, North Carolina and South Carolina. Mr. Ellett has held various leadership roles at Excel Truck Group since 1997 and has been President of Excel and its predecessor companies since 2003. Before that he served in a variety of roles at Norfolk Southern Corporation from 1993 to 1997. He was a Supply Corps officer in the United States Navy from 1989 to 1991. He serves as Vice Chairman of the Virginia Western Community College Foundation Board and as a board member of the Virginia Foundation For Independent Colleges, the North Carolina Auto Dealers Association, and the Virginia Trucking Association. He is the past Chairman of the Business Council of the Roanoke/Blacksburg Region, a past board member of the South Carolina Trucking Association, and a past board member and former Board Chairman of North Cross School. Mr. Ellett received his B.A. in English from the University of Virginia and his M.B.A. from the Darden School of Business at the University of Virginia. Mr. Ellett’s executive-level experience running a multi-state business and his strong connections to Virginia allow him to contribute substantially to our Board. |
Paul Engola | ||
Age 52 | Director Since 2023 | Reston, Virginia Mr. Engola is Deputy Group President of the Dynetics Group of Leidos Holdings, Inc. (“Leidos”), a company engaged in the provision of scientific, engineering and information technology services and solutions in the areas of defense, intelligence, civil and health markets. Mr. Engola has held such position since 2022, and has served as Executive Vice President, National Security Space, for Leidos since 2021. Before that, he was Chief Human Resources Officer and Head of Business Partnerships from 2018 until 2021 and Senior Vice President and Deputy Group President for Leidos’ Defense and Intelligence Group from 2017 until 2018. He served as Vice President, Transportation and Financial Solutions with Lockheed Martin Information Systems and Global Solutions before it merged with Leidos. Mr. Engola has a Master of Business Administration from Stanford University, a Master of Science from Georgia Institute of Technology and a Bachelor of Science from Massachusetts Institute of Technology. Mr. Engola’s extensive business experience, including his expertise in executive leadership, technology, strategic planning, human capital management, and mergers and acquisitions, allows him to contribute substantially to our Board. |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 12
Donald R. Kimble | ||
Age 64 | Director Since 2023 | Cleveland Heights, Ohio Mr. Kimble is the former Chief Financial Officer of KeyCorp, the parent company to KeyBank NA, a position he held from June 2013 until his retirement in May 2023. During that time, he also served in other executive-level positions at KeyCorp, including as Vice Chairman from 2017 until his retirement and as Chief Administrative Officer from 2020 until his retirement. Mr. Kimble also served as Chairman and President of KeyBank NA from 2020 until his retirement. Before that, he was Executive Vice President and Chief Financial Officer of Huntington Bancshares, Inc. and Executive Vice President and Controller for AmSouth Bancshares. Mr. Kimble has a Bachelor of Science in Business Administration from Ohio State University. Mr. Kimble’s extensive executive-level experience in the financial services industry, including his service as a Chief Financial Officer of large public bank holding companies allows him to contribute substantially to our Board. |
Patrick J. McCann, Vice Chair of the Board | ||
Age 67 | Director Since 2004 | Greensboro, Georgia Mr. McCann is the former Chief Financial Officer of University of Virginia Foundation, a position he held from 2009 to 2020. Before that, he served as a Senior Finance Executive for Bank of America-Florida Division from 1998 to 2000. He held positions with Barnett Banks, Inc., including as Corporate Director of Finance from 1996 to 1998 and Corporate Controller and Chief Accounting Officer from 1992 to 1996. Mr. McCann received his B.S. degree in accounting from Florida State University. Mr. McCann’s extensive experience in financial management and accounting both within and outside of the banking industry allow him to contribute substantially to our Board. |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 13
Michelle A. O’Hara | ||
Age 48 | Director Since 2023 | Reston, Virginia Ms. O’Hara is Executive Vice President and Chief Human Resources Officer for Science Applications International Corporation, Inc. (“SAIC”), a technology integrator and leader in digital transformation for federal government customers, a position she has held since 2019. Ms. O’Hara leads SAIC’s human capital capabilities, including organizational design, culture transformation, talent management, upskilling and diversity, equity, and inclusion. In addition, she leads SAIC’s marketing, communications and ESG functions. Before that, she held various executive-level positions at SAIC including Senior Vice President, Human Resources from 2018 until 2019 and Senior Vice President, Total Rewards from 2016 until 2018. Before SAIC, she served in senior leadership roles at global professional services and technology companies including BearingPoint, Perot Systems Corporation and Booz Allen Hamilton. Ms. O’Hara currently serves on the board of directors for the HR Policy Association, the leading public policy organization of large company Chief Human Resources Officers. Ms. O’Hara received her B.S. from the College of William and Mary. Ms. O’Hara’s extensive executive-level experience in human resources, human capital management, marketing, communications and ESG at a large public company allows her to contribute substantially to our Board. | ||
Linda V. Schreiner | ||
Age 64 | Director Since 2012 | Richmond, Virginia Ms. Schreiner is a former Senior Vice President of Markel Corporation, a financial holding company with specialty insurance and reinsurance and venture businesses, a position she held from 2016 until 2022. Before that, she served as Senior Vice President of MeadWestvaco, a global packaging company, from 2000 to 2016. She was a Senior Manager, Strategy Consulting of Arthur D. Little, Inc. from 1998 to 2000, and served as Vice President of Signet Banking Corporation from 1988 to 1998. She served as a member of the Darden School of Business Corporate Advisory Board at the University of Virginia from 2014 to 2017 and as Chair of the Board of Directors of Virginia War Memorial Foundation from 2020 to 2022, and she has served as a member of their board since 2009. She was the past President of ChildSavers’ board of directors from 2014 to 2016 and a member of that board since 2008 and a member of ChildSavers’ Endowment Board since 2016. She has served as a member of The Richmond Forum board of directors since 2019. She served as a member of the Executive Committee of Venture Richmond from 2006 to 2014, as Vice Chairman of the board of directors for the Virginia Commonwealth University (“VCU”) Rice Center until 2012, and as a member of that board from 2008 to 2012. Ms. Schreiner received her B.A. degree from the University of Georgia and M. Ed. from the University of Vermont. Ms. Schreiner’s extensive human resources, corporate strategy, communications and leadership experience at large public companies allows her to contribute substantially to our Board. |
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Joel R. Shepherd | ||
Age 60 | Roanoke, Virginia | Other Public Company Board: American National Bankshares Inc. Mr. Shepherd is President of Virginia Home Furnishings, Inc., a furniture retailer, a position he has held since 1997. He also serves as President of 220 Self Storage, Inc., a self-storage provider, a position he has held since 1996. Mr. Shepherd has served as a director of American National since 2015. Mr. Shepherd has been nominated as a director of the Company contingent on the closing of our merger with American National before our 2024 annual meeting, and he will become a director of the Company at the effective time of the merger. He is the former Chairman of Franklin Community Bank, N.A. and MainStreet BankShares, Inc. (acquired by American National in 2015). He was Vice President and Portfolio Manager in the Funds Management Division of Dominion Bankshares, Inc. (acquired by First Union Corporation, now part of Wells Fargo & Company) from 1986 to 1993. Mr. Shepherd brings substantial entrepreneurial, construction, finance and management skills gained through his various enterprises, as well as banking and investment experience, which allows him to contribute substantially to our Board. |
Ronald L. Tillett, Chair of the Board | ||
Age 68 | Director Since 2003 | Midlothian, Virginia Mr. Tillett is a Managing Director and Head of Mid-Atlantic Public Finance at Raymond James & Associates, Inc., a position he has held since 2001. Before that, he served as the Secretary of Finance of the Commonwealth of Virginia from 1996 to 2001, and as State Treasurer of the Commonwealth of Virginia from 1991 to 1996. He is a member of the Christopher Newport University (“CNU”) Board of Visitors, Chairman of CNU Foundation Investment Committee, a member of the Board of Trustees of the Wason Center for Civic Leadership, and a member of the Commonwealth Debt Capacity Advisory Committee since 2010. He is also a member of the Board of Trustees of the National Institute of Public Finance, Pepperdine University since 2014. He holds FINRA Series 7, 50, 52, 53, 54, 63, 79, and 99 securities licenses and has passed the SEC Securities Industry Examination. Mr. Tillett received his B.S. degree from VCU. Mr. Tillett’s extensive experience in corporate governance, public finance and debt issuance management, and the investment practices and policies of public entities, as well as his experience as former State Treasurer and Secretary of Finance of the Commonwealth of Virginia, where he had direct responsibility for the financial functions of the Virginia state government, allow him to contribute substantially to our Board. |
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Keith L. Wampler | ||
Age 66 | Director Since 2014 | Fredericksburg, Virginia Mr. Wampler is a Partner at PBMares, LLP, a regional certified public accounting and consulting firm with twelve offices in Virginia, Maryland and North Carolina, a position he has held since 1990, and he also served as Chairman of the firm’s board of directors from 2013 until 2022. Before that, he served as a managing partner of PBMares’ predecessor firm from 2001 to 2012. He is an advisory member of the board of directors of Hilldrup, a private company, a founding board member of the Community Foundation of the Rappahannock River Region, a board member of the Fredericksburg Regional Food Bank, and former member of the board of directors of StellarOne Bank. Mr. Wampler received his B.S. degree from Bridgewater College. Mr. Wampler’s extensive experience in consulting and tax services and involvement with sales, mergers and acquisitions of numerous companies allow him to contribute substantially to our Board. |
F. Blair Wimbush | ||
Age 68 | Director Since 2018 | Virginia Beach, Virginia Mr. Wimbush is the former Chief Real Estate and Corporate Sustainability Officer of Norfolk Southern Corporation (“Norfolk Southern”), a transportation company, a position he held from November 2007 to May 2015. Before that, he served in other positions with Norfolk Southern, including as Vice President—Real Estate from 2004 to 2007 and as Senior General Counsel, General Counsel—Operations and in other legal positions from 1980 to 2004. He is a member of the boards of Lifenet Health, Inc. and the Virginia Environmental Endowment. He is a trustee emeritus at the University of Virginia Law School Foundation, where he formerly served as the Chairman. He is also the former Commissioner and Vice Chairman of the Virginia Port Authority. Mr. Wimbush received a B.A. in political science from the University of Rochester, and a J.D. from the University of Virginia School of Law. He attended the Norfolk Southern Management Development program, Duke University Fuqua School of Business and completed the Advanced Management Program at the Harvard Business School. Mr. Wimbush’s extensive experience in a highly regulated industry with a focus on development and implementation of sustainability principles and strategy, management of regulatory and risk mitigation matters, and policy development, as well as his background practicing law in areas of real estate development, antitrust, environmental and safety allow him to contribute substantially to our Board. |
Our Board recommends you vote “FOR” each of the 14 nominees listed above for election as a director. |
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Retirement Policy
Our bylaws provide that no director may serve on the Board after the annual meeting following his or her 72nd birthday, other than those directors the Board has determined to be exempt from the mandatory retirement provision. There are currently no directors who are exempt from the mandatory retirement provision. The Board believes a mandatory retirement age of 72 allows valuable, experienced directors with deep knowledge of our operations and a thorough understanding of our history, policies and objectives to serve without unnecessary early retirement.
Retiring and Resigning Directors
On February 20, 2024, Thomas P. Rohman notified the Board that he will retire from the Boards of Directors of the Company and the Bank effective at the conclusion of our 2024 annual meeting. Mr. Rohman has served as a director of the Company and the Bank since 2013. We are grateful for Mr. Rohman’s strategic insight and contributions during his many years of service on the Board.
On February 12, 2024, Thomas G. Snead, Jr. notified the Board that he will retire from the Boards of Directors of the Company and the Bank effective at the conclusion of our 2024 annual meeting. Mr. Snead has served as a director of the Company and the Bank since 2018. We are grateful for Mr. Snead’s strategic insight and contributions during his many years of service on the Board.
On July 11, 2023, Heather M. Cox notified the Company of her resignation from the Boards of Directors of the Company and the Bank, effective July 13, 2023, due to the time commitment and professional responsibilities associated with her new position as President of Sapphire Digital, a division of Zelis, a healthcare payments company. Ms. Cox had served as a director of the Company and the Bank since 2022. We are grateful for Ms. Cox’s strategic insight and contributions during her service on the Board.
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PROPOSAL 2—RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent registered public accounting firm. The Audit Committee engages in an annual evaluation of the independent registered public accounting firm’s qualifications, assessing a wide variety of factors. The Audit Committee also considers whether there should be periodic rotation of the independent registered public accounting firm.
After assessing the performance and independence of Ernst & Young LLP (“EY”), our current independent registered public accounting firm, the Audit Committee believes it is in the best interests of the Company and its shareholders to retain EY. The Audit Committee has appointed EY as the independent registered public accounting firm to audit our financial statements for the year ending December 31, 2024. The Audit Committee seeks shareholder ratification of this appointment. EY has served as our independent registered public accounting firm since 2015. Although ratification of our independent registered public accounting firm is not required by our articles of incorporation, bylaws or otherwise, we are seeking such ratification as a matter of good corporate practice.
A representative from EY is expected to attend the annual meeting, will have the opportunity to make a statement if he or she desires to do so, and is expected to be available to respond to appropriate questions.
If our shareholders do not ratify the appointment of EY at the annual meeting, we currently contemplate that EY’s appointment for 2024 will continue unless the Audit Committee finds other compelling reasons for making a change. However, the Audit Committee will take this vote into consideration for the selection of our independent registered public accounting firm for 2025.
Our Board recommends you vote “FOR” the ratification of the appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2024. |
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PROPOSAL 3—APPROVING OUR NAMED EXECUTIVE OFFICER COMPENSATION (AN ADVISORY, NON-BINDING |
Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires a separate and advisory (non-binding) shareholder vote to approve the compensation of our named executive officers disclosed in this proxy statement. This proposal, commonly known as a “Say on Pay” proposal, gives shareholders the opportunity to endorse or not endorse a company’s executive pay program. At our 2023 annual meeting of shareholders, our shareholders voted to conduct a Say on Pay vote every year, as recommended by our Board. Accordingly, each year, we provide our shareholders with the opportunity to cast an advisory (non-binding) vote on the compensation of our named executive officers as disclosed in this proxy statement under the heading “Compensation Discussion and Analysis,” the tabular disclosure regarding named executive officer compensation and the accompanying narrative disclosure.
We believe our compensation policies and procedures are strongly aligned with the long-term interests of our shareholders. Because your vote is advisory, it will not be binding on our Board. However, our Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. The next Say on Pay vote is expected to take place at our 2025 annual meeting of shareholders.
Our shareholders are being asked to approve the following resolution:
“RESOLVED, that the shareholders of Atlantic Union Bankshares Corporation approve, on an advisory basis, the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis, the tabular disclosure regarding named executive officer compensation and the accompanying narrative disclosure in this proxy statement.”
Our Board recommends you vote “FOR” the approval of the Say on Pay resolution set forth above. |
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OUR CULTURE |
Purpose and Core Values
Our culture is defined by our purpose to enrich the lives of the people and the communities we serve. Our core values guide our actions to further this purpose and shape how we come together to meet our various stakeholder needs and expectations. Our core values serve as the foundation for how we behave and operate as an organization and will influence our future success.
Our core values include being:
Caring. Working together toward common goals, acting with kindness, respect and a genuine concern for others
Courageous. Speaking openly, honestly and accepting our challenges and mistakes as opportunities to learn and grow
Committed. Driven to help our clients, teammates and Company succeed, doing what is right and accountable for our actions
Additionally, our commitment to diversity, equity and inclusion plays a fundamental role in defining our culture. We embrace diversity of thought and identity to better serve our stakeholders and achieve our purpose. We are committed to cultivating an inclusive and welcoming workplace where teammate and customer perspectives are valued and respected.
Environmental, Social and Governance (“ESG”) Practices
Our Board actively oversees current and emerging environmental, corporate social responsibility, and governance matters that are relevant to our business, operations, or that are otherwise pertinent to us and our shareholders, teammates, customers, and parties with whom we do business. This begins with our management-level ESG Steering Committee, comprised of senior leaders from our major business functions, including our CEO, CFO, General Counsel, Chief Human Resources Officer, Chief Risk Officer, and CRA Officer, who are actively engaged in managing our ESG approach and governance. This committee met four times in 2023, and regularly reports on our ESG activities and emerging ESG opportunities and risks to the Board.
Corporate Social Responsibility Report
In 2024, we published our Corporate Social Responsibility Report setting forth our ESG accomplishments for 2023. A copy of this report is available on the Investor Relations > ESG section of our website at www.atlanticunionbank.com, which report is not be deemed to be a part of, or incorporated by reference into, this proxy statement.
Some of our key ESG accomplishments and practices in 2023 are noted below.
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Teammate Benefits and Work Environment |
We use the term “teammates” to describe our employees because we view the Company as one team, where everyone is valued for their contributions. We view our teammates’ experience holistically, and we strive to reward high performance and achievement, provide opportunity for professional growth, create a positive and engaging work environment, and focus on each teammate’s wellbeing.
In addition to offering competitive health plans, generous paid time off and robust retirement plans, we:
• | conduct annual anonymous teammate surveys to evaluate our culture and assess teammate engagement, innovation, trust and commitment, along with additional surveys to get feedback on timely or important workforce issues; |
• | established a teammate advisory group with teammates across different levels and business/functional areas to provide feedback on our culture, programs, benefits, policies, and other issues; |
• | provide teammates with professional development and skills training on a wide range of topics through our learning management system and/or learning experience platform, which includes e-learning, job aids, videos, instructor-led, and on-the-job practice supported by trained mentors; |
• | offer a 401(k) Plan that includes both a Company match and Company contributions to an Employee Stock Ownership Plan that allows eligible teammates to acquire shares of our common stock; and |
• | encourage our teammates’ professional development and reimburse eligible tuition expenses up to an annual limit. |
Diversity, Equity, Inclusion, and Belonging |
We are committed to hiring diverse talent, fostering an inclusive environment, promoting people on their merits, and treating everyone with respect and dignity. We believe that a diverse workforce is important to our success. As of December 31, 2023, approximately 65% of our teammates were women and approximately 22% of our teammates self-identified as minorities. To support diversity, equity, inclusion, and belonging efforts, we:
• | maintain equal employment opportunity, anti-discrimination and anti-harassment policies that prohibit discrimination based on protected classifications and require that all teammates treat each other with respect; |
• | maintain an online portal that allows teammates to raise workplace concerns and complaints anonymously and related policies and procedures that seek to ensure appropriate, retaliation-free handling of workplace concerns and complaints; |
• | have a Diversity, Equity, Inclusion, and Belonging Council co-chaired by the Bank’s Chief Executive Officer and the Bank’s Chief Human Resources Officer, which includes a cross-functional group of teammates from diverse backgrounds, that manages our efforts to create a more diverse, equitable, and inclusive workplace; |
• | require teammates to participate in e-learning courses created by external experts in workplace diversity, inclusion, and sensitivity, to educate teammates on issues such as cultural sensitivity and unconscious bias; |
• | run a Summer Diversity Internship Program and partner with historically black colleges and universities within our footprint to seek to introduce more diversity to banking; |
• | provide financial support to organizations within our communities that promote diversity, equity and inclusion; |
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• | seek to identify and develop partnerships with business enterprises that are majority owned, operated and controlled by minorities, women, LGBTQ+ individuals, veterans, service-disabled veterans, and people with disabilities, as well as small and disadvantaged business enterprises; and |
• | have Employee Resource Groups that all teammates and allies are welcome to join, including the Women’s Inclusion Network; Allies of Individuals Differently Abled; AUB Gets Vets; AUB Out & Proud; Caring for Caregivers; and Black Teammates United in Leadership and Development, all of which offer professional development opportunities such as mentoring, skill building and partnering to acquire talent and meet business goals. |
Governance |
We believe that sound and effective corporate governance is the foundation on which to build our corporate culture and communicate our commitment to our core values. Our strong corporate governance policies and practices support our efforts to continue to enhance the value we create for our teammates, shareholders, customers and communities. By way of example, we have implemented a number of corporate governance actions to reflect best governance practices, including those listed below and as further detailed in this proxy statement:
• | Our directors represent a well-rounded variety of skills, knowledge, experience, and perspectives. |
• | We separate the roles of Chief Executive Officer and Chair. |
• | We have a majority vote standard for uncontested director elections, as well as a Director Resignation Policy that requires any incumbent director nominee who fails to receive a majority of the votes cast to submit an offer of resignation to the Chair, and the Board, after reviewing the recommendation of the Nominating and Corporate Governance Committee, will determine whether to accept, reject, or take other action with respect to the resignation. |
• | At least four times per year, our independent directors hold an executive session without management present. |
• | Our Board has a robust annual self-evaluation process, overseen by our Nominating and Corporate Governance Committee, in which our directors evaluate how the Board and its committees are functioning. The Board also evaluates the individual performance of directors periodically with the assistance of a third-party consultant. |
• | Our directors are elected annually to serve a one-year term. |
• | Each share of our common stock has equal voting rights with one vote per share. |
• | We require that our executive officers and directors own a meaningful amount of our common stock pursuant to our Executive Stock Ownership Policy and Non-Employee Director Stock Ownership Policy. |
• | We prohibit our executive officers and directors from hedging and pledging our stock. |
Business Conduct |
We believe that one of our most valuable assets is our established reputation for integrity, and we are committed to a culture of compliance that promotes the highest ethical standards. Therefore, we:
• | have established a Code of Business Conduct and Ethics (“Code of Ethics”), which applies to all teammates and directors intended to, among other things, promote honest and ethical conduct, promote compliance with |
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laws, protect our assets, promote fair dealing, deter wrongdoing and ensure accountability for adherence to the code; |
• | require all teammates and directors to annually certify that they have read, understand and will abide by the Code of Ethics; |
• | maintain an online portal through which teammates can anonymously report violations of the Code of Ethics and raise workplace concerns of any kind; |
• | maintain a Conflicts of Interest Policy that requires directors and executive officers to disclose actual or potential conflicts of interest to the Audit Committee for review; |
• | maintain a Whistleblower Policy and an online portal through which teammates can anonymously communicate concerns regarding accounting, auditing, workplace, or other matters; |
• | require all teammates to complete and pass annual compliance training on key policies and procedures including, without limitation, our Code of Ethics, our Policy Statement on Insider Trading, our Whistleblower Policy, our Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) Program Policy and the Bank Bribery Act; |
• | maintain a supplier Code of Conduct, which sets forth our expectations for honesty, integrity and professionalism in our relationship with suppliers; |
• | have established an ESG Risk Program as a component of enterprise risk management review that is designed to assist us in aligning with evolving regulatory expectations while driving strategic identification of key ESG risk exposures and opportunities across multiple business functions; |
• | have established an Office of the President, which oversees the enterprise complaint management function and monitors and responds to customer complaints, elevating such complaints as appropriate, in order to convert customer feedback into actionable improvements in how we run our business; and |
• | review our products and services to seek to ensure that they continue to address customer need, are competitive, and are being delivered as disclosed and intended. |
Privacy and Cybersecurity |
We strive to protect the privacy and security of the sensitive information our customers entrust to our care by, among other things:
• | maintaining privacy policies, management oversight, accountability structures, and technology design processes to help protect private and personal data; |
• | maintaining oversight of our information security program by senior management, our board-level Risk Committee, and our Board; |
• | conducting annual mandatory teammate training on information security, and providing ongoing information security education and awareness for teammates, such as online training classes, mock phishing attacks and information security awareness materials; |
• | using independent third parties to perform penetration testing of our infrastructure to help us better understand the effectiveness of our controls, improve our defenses, and conduct assessments of our program for compliance with regulatory requirements and industry guidelines; and |
• | establishing an incident response program intended to enable us to mitigate the impact of, and recover from, any cyber-attacks, and facilitate communication to internal and external stakeholders, as needed. |
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We had no material data breaches in 2023.
Community Engagement |
We are committed to enhancing and improving the communities where our customers live, work and play. Our sponsorship and giving strategies allow us to engage with our teammates and partners to enrich the lives of the people we serve.
• | To maximize and encourage community service, we provide full-time teammates up to 16 hours of paid time off and part-time teammates up to eight hours of paid time off to participate in volunteer activities. |
• | We encourage teammate charitable giving through our MyGiving program, where we match up to $500 annually of a teammate’s eligible donations. |
• | In 2023, we invested approximately $28 million in our community through investments in tax credit and other funds and loans, with a focus on maintaining and building affordable housing units; and corporate sponsorships, with a focus on financial education for all ages, and support of university athletics, area festivals and family events. |
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CORPORATE GOVERNANCE |
Corporate Governance Guidelines
Our Corporate Governance Guidelines and certain other corporate governance materials are published on the Investor Relations > Governance > Governance Documents section of our website at www.atlanticunionbank.com. Our Corporate Governance Guidelines address, among other topics: director selection, Board composition and performance; the Board’s relationship to management; Board meeting procedures; Board committee matters; and leadership development. The Nominating and Corporate Governance Committee regularly reviews developments in corporate governance and may recommend changes to these guidelines to the Board for approval.
Codes of Business Conduct and Ethics
We have a Code of Business Conduct and Ethics that applies to all of our directors, officers, and teammates, which is available on the Investor Relations > Governance > Governance Documents section of our website at www.atlanticunionbank.com. Teammates receive annual training on our Code of Business Conduct and Ethics.
In addition, we have adopted a Code of Ethics for Senior Financial Officers and Directors designed to promote ethical conduct which applies to, among other members of our executive and senior management and Board, our Chief Executive Officer, Chief Financial Officer and President. Our Code of Ethics for Senior Financial Officers and Directors is available on the Investor Relations > Governance > Governance Documents section of our website at www.atlanticunionbank.com.
We intend to provide any required disclosure of an amendment to or waiver from our Code of Business Conduct and Ethics or our Code of Ethics for Senior Financial Officers and Directors that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, on our website at www.atlanticunionbank.com promptly following the amendment or waiver. We may elect to disclose any such amendment or waiver in a report on Form 8-K filed with the SEC either in addition to or in lieu of the website disclosure.
Conflicts of Interest Policy
We have a Conflicts of Interest Policy that applies to our directors and executive officers, which supplements the conflict of interest provisions in our Code of Business Conduct and Ethics. The Conflicts of Interest Policy sets forth a process for handling potential conflicts of interest that includes disclosure to our General Counsel and review of the potential conflict of interest by the disinterested members of the Audit Committee.
Board of Directors Meetings and Attendance
Our directors are expected to devote sufficient time, energy and attention to ensure diligent performance of their duties, which includes attending all Board and committee meetings.
There were eight regular meetings of the Board in 2023 and two special meetings. Each director attended 75% or more of the aggregate number of meetings of (a) the Board held during the period in which he or she was a director in 2023; and (b) the committees of the Board of which he or she was a member in 2023.
Our Corporate Governance Guidelines state that directors are expected to attend our annual meeting of shareholders. Of the 12 directors who were serving at the time of our 2023 annual meeting of shareholders, all attended the meeting.
Director Independence
New York Stock Exchange (“NYSE”) listing standards require a majority of our directors and each member of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee to be independent. In addition, our Corporate Governance Guidelines require a majority of our directors to be independent. Our Board has adopted Categorical Standards for Director Independence (“Categorical Standards”), included as an Annex to our Corporate Governance Guidelines, published on the Investor Relations > Governance >
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Governance Documents section of our website at www.atlanticunionbank.com, to assist it in determining each director’s independence. Our Board considers directors or director nominees “independent” if they meet the criteria for independence in both the NYSE listing standards and our Categorical Standards.
In early 2024, our Board, in coordination with our Nominating and Corporate Governance Committee evaluated the relevant relationships between each director and director nominee (and his or her immediate family members and affiliates) and the Company and its subsidiaries, and affirmatively determined that all of our directors and director nominees are independent, except for Mr. Asbury, due to his employment by our Company. Specifically, the following directors and director nominees are independent under NYSE listing standards and our Categorical Standards: Ms. Agee, Mr. Corbin, Ms. Delorier, Mr. Ellett, Mr. Engola, Mr. Kimble, Mr. McCann, Ms. O’Hara, Mr. Rohman, Ms. Schreiner, Mr. Shepherd, Mr. Snead, Mr. Tillett, Mr. Wampler and Mr. Wimbush. Heather M. Cox resigned from our Board effective July 13, 2023. In 2023, our Board determined that Ms. Cox was an independent director under NYSE listing standards.
Board Leadership Structure
The Board considers its structure and leadership annually. To date, we have chosen not to combine the positions of CEO and Chair of the Board. The Chair of the Board is a non-management director and the Chair and Vice Chair are elected annually by the other members of the Board. Ronald L. Tillett currently serves as Chair of our Board, and Patrick J. McCann currently serves as Vice Chair of our Board. We believe that our leadership structure is appropriate because it contributes to Board independence and fosters a certain degree of control and balanced oversight of the Board’s functions and decision-making processes, while at the same time allowing the CEO to focus on the day-to-day leadership and operations of the Company.
Our CEO is a member of the Board and attends meetings of the Board. The President of the Bank is not a member of the Board but attends meetings of the Board to help provide the Board with insight into the business strategies, performance and operations of the Bank. Our CEO and President of the Bank engage in extensive dialogue and discussion with the Board on a wide range of topics including, without limitation, strategic direction, strategic initiatives, financial performance, line of business performance, line of business initiatives, industry trends and perspectives, regulatory matters, and risk matters. Our CEO, President of the Bank, members of our executive leadership, and other key leaders in the Company make frequent reports to the Board, often at the suggestion of our Chair or other directors, and answer questions posed by directors. Our CEO and President of the Bank engage in detailed discussions with the Board regarding the reasons for recommendations of our executive leadership.
Our Chair and Vice Chair of the Board meet regularly with our CEO to discuss matters of interest to the Board and to discuss potential agenda topics for Board meetings. Our Chair, with input from our Nominating and Corporate Governance Committee, annually reviews the Board’s committee structure and makes recommendations to the Board regarding the committee memberships of each director, including the proposed Chair for each committee.
In accordance with our Corporate Governance Guidelines, at least quarterly, the independent directors meet in executive session without management present. Our Chair, Mr. Tillett, presides at these executive sessions.
All of the members of our Board also serve as members of the board of directors of the Bank.
Director Stock Ownership Requirement
Under our Non-Employee Director Stock Ownership Policy, non-employee directors are required to hold shares of common stock of the Company equal in value to at least five times the amount of the annual non-employee director cash retainer. The purpose of the Non-Employee Director Stock Ownership Policy is to help align the interests of the Board with the interests of our shareholders. All of our directors are in compliance with the requirement of the Non-Employee Director Stock Ownership Policy, which provides newly elected or appointed directors a period of five years from the date of appointment or election to comply with the ownership requirement.
Role of the Board in the Oversight of Risk
The Board recognizes that it plays a critical role in the oversight of risk. As a financial institution, the very nature of our business involves oversight of the management of financial, operational, information technology, cybersecurity,
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credit, market, capital, interest rate, liquidity, reputation, strategic, legal, regulatory, compliance, model and other risks. The Board has established a risk oversight structure that seeks to ensure that applicable risks are identified, monitored, assessed, and mitigated appropriately. Our Board and management team are committed to continuously strengthening our risk management practices. The Board and management evaluate risks over a full spectrum of timeframes, from emerging risks to risks that we actively manage, and both the Risk Committee of the Board and the management-level Risk Committee receive presentations on, and discuss, emerging risks on at least a quarterly basis.
As a financial institution that is entrusted with the safeguarding of sensitive information, our Board believes that a strong enterprise cyber strategy is vital to effective cyber risk management. Accordingly, our Board is actively engaged in the oversight of our cyber risk profile, which includes risks from cybersecurity threats, enterprise cyber strategy and key cyber initiatives, and regularly receives reports on such issues from our Chief Information Officer, Chief Information Security Officer, and other relevant personnel. Our Board also meets with our internal and external auditors, and federal and state regulators to review and discuss reports on risk, examination, and regulatory compliance matters.
The Risk Committee of the Board is responsible for assisting the Board in its oversight of risk and for overseeing our enterprise risk management framework. The Risk Committee actively engages with management to establish risk management principles and to determine our risk appetite. Our Chief Risk Officer implements our enterprise risk management framework and reports directly to our CEO. The Risk Committee meets with the Chief Risk Officer and other members of management regularly to discuss major risk exposures and receives reports on and discusses risk levels and risk appetite in categories such as financial, operational, information technology, cybersecurity, credit, market, capital, interest rate, liquidity, reputation, strategic, legal, regulatory, compliance, and model risk, among others. The Risk Committee also approves, or recommends to the Board for approval, various risk management policies, standards, and guidelines, including without limitation policies regarding BSA/AML compliance and other regulatory compliance policies. Like the Board’s other committees, the Risk Committee regularly reports to the Board on its activities and makes recommendations to the Board.
In addition to the efforts of the Risk Committee, other committees of the Board consider risk within their areas of responsibility. The description of each Board committee below includes more information on the risk oversight activities of each committee.
The Board establishes the risk oversight structure; receives, reviews and discusses Risk Committee and other Board committee minutes and reports; and meets with management, internal and external auditors, and federal and state regulators to review and discuss reports on risk, examination, and regulatory compliance matters. We also engage with outside risk experts and industry groups, including other peer institutions, as needed, to help us evaluate potential future threats and trends, particularly with respect to emerging information security and fraud risks.
Board Committees and Membership
The Board has a standing Audit Committee, Compensation Committee, Executive Committee, Nominating and Corporate Governance Committee, and Risk Committee. Additionally, the Board has a Trust Committee.
Charters describing the responsibilities of each of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, Risk Committee and Trust Committee are available on the Investor Relations > Governance > Governance Documents section of our website at www.atlanticunionbank.com.
Our Board committees regularly make recommendations and report on their activities to the Board. Each committee may retain and obtain advice from internal or external financial, legal, accounting, or other advisors at their discretion. Our Board reviews our committee charters and committee membership at least annually. Brief summaries of the duties of our committees are set forth below, as well as the current members of each committee as of the date of this proxy statement.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 27
Audit Committee | No. of Meetings in 2023: 11 | |
Members: | Key Responsibilities: • Oversees the integrity of our financial statements • Oversees the qualifications, performance, independence, and appointment of our independent registered public accounting firm • Oversees the performance of our internal audit function and credit risk review • Oversees our compliance with certain legal and regulatory requirements • Oversees risks associated with, among others things, financial accounting and reporting, internal controls, and major financial risk exposures, including the steps taken by management to monitor and control such exposure Independence / Qualifications: • All members who served on the Committee in 2023 (including Ms. Cox who served on the Committee in 2023 until her resignation from the Board on July 13, 2023) were, and all current Committee members are, independent under NYSE listing standards, our Categorical Standards and the heightened independence requirements applicable to audit committee members under SEC rules • All Committee members are financially literate in accordance with NYSE listing standards • Mr. Corbin, Mr. McCann and Mr. Kimble each qualify as audit committee financial experts under SEC rules and have banking or related financial management expertise as defined by FDIC regulations |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 28
Compensation Committee | No. of Meetings in 2023: 6 | |
Members: | Key Responsibilities: • Establishes our executive compensation philosophy • Reviews and approves, or recommends to the Board for approval, as applicable, the compensation to be paid to our executive officers (as defined in the charter), including our CEO • Recommends non-employee director compensation for Board approval • Oversees risks relating to our compensation policies and practices • Reviews and recommends to the Board for approval, and administers our incentive and other equity-based compensation plans • Oversees our employee benefit plans covering substantially all employees • Oversees management succession planning (other than for the CEO, which is overseen by the Board) and our talent development programs Independence / Qualifications: • All current Committee members are independent under NYSE listing standards, our Categorical Standards and the independence requirements applicable to compensation committee members under NYSE rules |
Nominating and Corporate Governance Committee | No. of Meetings in 2023: 8 | ||
Members: | Key Responsibilities: • Identifies individuals to become Board members, and recommends to the Board for approval nominees for director • Makes recommendations to the Chair of the Board regarding committee structure and membership, subject to Board approval • Oversees the Company’s key corporate governance policies • Oversees Board succession planning • Oversees the Board’s formal annual self-evaluation process Independence / Qualifications: • All current Committee members are independent under NYSE listing standards and our Categorical Standards |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 29
Executive Committee | No. of Meetings in 2023: 1 | |
Members: | Key Responsibilities: • Acts, as needed, between meetings of the Board on delegated authority that confers on the Committee substantially all of the Board’s powers, except on matters reserved to the Board by law, our articles of incorporation or our bylaws Independence / Qualifications: • Other than Mr. Asbury, all current Committee members are independent under NYSE listing standards and our Categorical Standards |
Risk Committee | No. of Meetings in 2023: 8 | |
Members: | Key Responsibilities: • Oversees our management of financial, operational, information technology (including cyber risk), credit, market, capital, liquidity, reputation, strategic, legal, regulatory, compliance, model and other risks • Oversees our enterprise risk management framework and evaluates its adequacy and effectiveness • Oversees management’s alignment of our risk profile to our strategic plan and aggregate risk appetite Independence / Qualifications: • All current Committee members are independent under NYSE listing standards, our Categorical Standards and Federal Reserve Board rules |
Trust Committee | No. of Meetings in 2023: 4 | |
Members: | Key Responsibilities: • Oversees the trust and fiduciary activities of the Bank and seeks to ensure such activities are conducted in accordance with applicable laws, rules, regulations and prudent fiduciary practices Independence / Qualifications: • All current Committee members are independent under NYSE listing standards and our Categorical Standards |
Board and Committee Evaluations
Our Board believes in a robust evaluation process that assesses the contributions and commitment of Board members and how the Board and its committees are functioning. In addition, each of our Board committees perform an annual self-assessment of the committee’s performance. The Board uses a self-evaluation process as its primary mechanism for assessing its performance, which is developed and administered by the Nominating and Corporate Governance Committee. Each year, all members of the Board complete a detailed questionnaire regarding the Board’s performance and the performance of Board committees. The Nominating and Corporate Governance Committee provides guidance to the Board on evaluation practices, oversees the conduct of the evaluations, and
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 30
communicates the results of the evaluations, together with any recommended actions, to the Board. The Board also evaluates the individual performance of directors periodically with the assistance of a third-party consultant, and from time to time, may use a third party to evaluate the performance of the Board or Board committees.
Communication with Directors
Our shareholders and other interested parties may communicate with the Board, any member of the Board individually or as a group (such as the Chair, or Lead Independent Director, as applicable, or the non-management or independent directors) by addressing correspondence to the Board of Directors or to the individual director and sending such communication by mail to the Corporate Secretary, Atlantic Union Bankshares Corporation, 4300 Cox Road, Glen Allen, Virginia 23060. All communications so addressed will be forwarded to the Chair of the Board, or Lead Independent Director, as applicable (in the case of correspondence addressed to the Board of Directors or independent directors), or to the individual director.
Compensation Committee Interlocks and Insider Participation
For the year ended December 31, 2023, our Compensation Committee consisted of Ms. Schreiner (Chair), Ms. Delorier, Mr. Ellett, Mr. Rohman and Mr. Wimbush. No member of our Compensation Committee in 2023 was, during the last fiscal year, an officer or employee of the Company or formerly an officer of the Company. In addition, none has had any relationship with the Company of the type that is required to be disclosed under “Interests of Directors and Executive Officers in Certain Transactions.” During 2023, none of our executive officers served as a member of the board of directors, compensation committee or other board committee performing equivalent functions of another entity that had one or more executive officers serving as a member of the board of directors or Compensation Committee of the Company.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 31
DIRECTOR COMPENSATION |
The Board determines the compensation of its non-employee members after considering the recommendation of the Compensation Committee and the Compensation Committee’s independent compensation consultant. The Compensation Committee annually reviews data and analysis provided by its independent compensation consultant to assess the market competitiveness of the compensation structure of our non-employee directors. Following that review, the Compensation Committee approves and recommends to the Board for approval a compensation structure that is intended to provide a mix between cash and equity compensation that is market competitive based on the same peer group that is used by the Compensation Committee when reviewing executive compensation. Mr. Asbury does not receive any additional compensation for his service as a director or for attending any Board or committee meetings.
2023 Director Compensation
The table below sets forth the annual compensation of our non-employee directors for fiscal year 2023.
Amount of Cash Retainer |
| Position | |
$45,000 | Board Members | ||
$80,000 | Additional Fee to Chair | ||
$20,000 | Additional Fee to Vice Chair | ||
$22,500 | Additional Fee to Audit Committee Chair | ||
$16,000 | Additional Fee to Compensation and Risk Committee Chairs | ||
$14,000 | Additional Fee to Nominating and Corporate Governance and Trust Committee Chairs | ||
$11,000 | Additional Fee for Service as an Audit Committee Member | ||
$8,000 | Additional Fees for Service as a Committee Member (other than the Audit Committee or Executive Committee) | ||
Director Equity Retainer | |||
$60,000 issued in the form of unrestricted shares of our common stock |
We also pay our Executive Committee members, other than Mr. Asbury, a per meeting fee of either $1,000, if the meeting is one hour or more, or $500, if the meeting is telephonic and lasts less than one hour.
Each member of the Board also serves as a director of the Bank (the “Bank Board”). Directors do not receive additional compensation for service on the Bank Board. Further, directors generally do not receive compensation for service on any committee of the Bank Board, and no such fees were paid in 2023.
Changes to Director Compensation in 2024
Based on consultation with Meridian, the Compensation Committee’s independent compensation consultant, and a competitive review of our non-employee director compensation program, effective January 1, 2024, the annual cash retainer was increased from $45,000 to $50,000 and the annual equity retainer was increased from $60,000 to $65,000. All other fees were unchanged.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 32
The following table summarizes the compensation paid to our non-employee directors during 2023. Ms. Agee and Mr. Shepherd are not included in the table below because they were not directors in 2023.
2023 Director Compensation
|
|
| Change in |
|
| |||||
Pension | ||||||||||
Value and | ||||||||||
Fees | Nonqualified | |||||||||
Earned | Deferred | |||||||||
or Paid in | Stock | Compensation | All Other | |||||||
Cash(1) | Awards(2) | Earnings(3) | Compensation | Total | ||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||
Patrick E. Corbin(4) |
| 43,000 |
| 105,011 |
| — |
| — |
| 148,011 |
Heather M. Cox(5) |
| 45,333 |
| 45,005 |
| — |
| — |
| 90,338 |
Rilla S. Delorier |
| 58,333 |
| 60,000 |
| — |
| — |
| 118,333 |
Frank Russell Ellett(4) |
| 27,000 |
| 105,011 |
| — |
| — |
| 132,011 |
Paul Engola(6) |
| — |
| — |
| — |
| — |
| — |
Donald R. Kimble(6) |
| — |
| — |
| — |
| — | — | |
Patrick J. McCann |
| 86,000 |
| 60,000 |
| — |
| — |
| 146,000 |
Michelle A. O’Hara(6) |
| — |
| — |
| — |
| — |
| — |
Thomas P. Rohman(7) |
| 70,000 |
| 60,000 |
| — |
| — |
| 130,000 |
Linda V. Schreiner |
| 82,333 |
| 60,000 |
| — |
| — |
| 142,333 |
Thomas G. Snead, Jr. (7) |
| 80,667 |
| 60,000 |
| — |
| — |
| 140,667 |
Ronald L. Tillett |
| 127,000 |
| 60,000 |
| — |
| — |
| 187,000 |
Keith L. Wampler |
| 78,000 |
| 60,000 |
| — |
| — |
| 138,000 |
F. Blair Wimbush |
| 77,000 |
| 60,000 |
| — |
| — |
| 137,000 |
(1) | Includes total compensation earned through Board fees, retainers and committee fees, whether paid or deferred. Refer to the “2023 Director Compensation” section for more information. |
(2) | Represents the aggregated grant date fair value of the awards computed in accordance with FASB ASC Topic 718. A discussion of our assumptions for stock-based compensation are found in Note 14, “Employee Benefits and Stock Based Compensation” to our consolidated financial statements included in our 2023 Annual Report on Form 10-K. |
(3) | Messrs. Corbin, Tillett and Wimbush elected to defer their stock awards for 2023, and Mr. Corbin and Mr. Wimbush elected to defer their cash retainers for 2023 into the Virginia Bankers Association’s non-qualified deferred compensation plan for the Company. There were no above market or preferential earnings associated with the deferrals into this plan. |
(4) | Messrs. Corbin and Ellett elected to receive stock in lieu of their annual cash Board member retainer for all of 2023. |
(5) | Ms. Cox resigned from the Board effective July 13, 2023. |
(6) | Messrs. Engola and Kimble and Ms. O’Hara were appointed as directors on December 6, 2023. |
(7) | Messrs. Rohman and Snead are not standing for re-election at the 2024 annual meeting and will retire from the Board effective at the conclusion of our 2024 annual meeting. |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 33
AUDIT INFORMATION AND REPORT OF THE AUDIT COMMITTEE |
Principal Accountant Fees
Our independent registered public accounting firm, EY, billed the following fees for services provided to us for the audit of our annual financial statements for the fiscal years 2023 and 2022 and for other services rendered by EY during those periods:
| 2023 |
| 2022 |
| |||
Audit fees(1) | $ | 1,941,500 | $ | 1,592,915 | |||
Audit-related fees(2) |
| 40,000 |
| 40,000 | |||
Tax fees(3) |
| 156,350 |
| 97,800 | |||
All other fees(4) |
| 130,000 |
| — | |||
Total | $ | 2,267,850 | $ | 1,730,715 | |||
(1) | Audit fees: Audit and review services and consents issued for our registration statements on Form S-4, review of documents filed with the SEC, including the 2023 and 2022 proxy statements and audit of internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act and the Federal Deposit Insurance Corporation Improvement Act, and other accounting consultations billed as audit services. |
(2) | Audit-related fees: Includes the 2023 and 2022 audits of mortgage compliance. |
(3) | Tax fees: EY provided tax compliance and other tax advisory services related to the Company in both 2023 and 2022. |
(4) | All other fees: For 2023, includes fees related to FDIC assessment engagement services. |
The Audit Committee notes that EY performed no services for the Company, other than those enumerated above, for 2023 or 2022. As a result, the Audit Committee has determined that the provision of these services by EY is compatible with maintaining the firm’s independence from the Company. Any engagement beyond the scope of the annual audit engagement is required to be pre-approved by the Audit Committee.
Audit Committee Pre-Approval Policy
The Audit Committee, or a designated member of the Audit Committee, must pre-approve all auditing services, internal control related services and permitted non-audit services, subject to the de minimis exception for non-audit services that are approved by the Audit Committee prior to the completion of the audit, performed by the independent registered public accounting firm in order to assure that the provision of such services does not impair the registered public accountant’s independence. The Audit Committee may form and delegate authority to subcommittees, consisting of one or more members when appropriate, to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting.
Audit Committee Report
This Audit Committee Report was approved and adopted by the Audit Committee on February 21, 2024. Our Board has a standing Audit Committee that currently consists of the independent directors whose names appear at the end of this Audit Committee Report.
While management has the primary responsibility for the financial statements and the reporting process, including our system of internal controls, the Audit Committee monitors and reviews our financial reporting process on behalf of the Board. The role and responsibilities of the Audit Committee are set forth in a written charter adopted by the Board. The Audit Committee reviews and reassesses its charter annually and recommends any changes to the Board for approval. Under applicable law, the Audit Committee has sole responsibility for the selection of our independent registered public accounting firm. The Audit Committee is also responsible for the compensation and oversight of our independent registered public accounting firm.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 34
Before appointing the independent registered public accounting firm each year, the Audit Committee completes an annual evaluation of the independent registered public accounting firm’s qualifications, including assessing the firm’s quality of service, the firm’s quality of communication and interaction with the firm, the firm’s sufficiency of resources, and the firm’s independence, objectivity, and professional skepticism. This evaluation includes whether the firm’s quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the firm’s independence. The results of all Public Company Accounting Oversight Board (United States) (“PCAOB”) examinations are discussed with the firm as part of this process. The Audit Committee also provides input to the independent registered public accounting firm with regard to engagement partner selection.
Our independent registered public accounting firm is responsible for performing independent audits of our consolidated financial statements and our internal control over financial reporting in accordance with the standards of the PCAOB and to issue reports thereon. The Audit Committee monitors and oversees these processes. The Audit Committee relies on the work and assurances of our management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm, which, in its reports, expresses an opinion on the conformity of our consolidated annual financial statements to accounting principles generally accepted in the United States of America and whether our internal controls over financial reporting were effective as of the end of the year.
In this context, the Audit Committee met and held discussions with management and representatives of EY with respect to our financial statements for the year ended December 31, 2023. Management represented to the Audit Committee that our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America; and the Audit Committee reviewed and discussed our consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee reviewed and discussed with the independent registered public accounting firm the critical audit matters arising in the audit of our financial statements and identified in EY’s audit report, which is included with our Annual Report on Form 10-K for the year ended December 31, 2023. The Audit Committee also reviewed and discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the PCAOB and the SEC.
In addition, the Audit Committee discussed with the independent registered public accounting firm the auditors’ independence from the Company and its management, and the Audit Committee received the written disclosures and letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence.
The Audit Committee also discussed with our internal auditors and the independent registered public accounting firm the overall scope and plans for their respective audits. The Audit Committee met with the internal auditors and the independent registered public accounting firm, with and without management in attendance, to discuss the results of their examinations, the evaluations of our internal controls, and the overall quality of our financial reporting. This included the Audit Committee’s monitoring of the progress of remediation of noted control deficiencies, if any, until resolved.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC.
Respectfully submitted by the members of the Audit Committee,
Patrick E. Corbin, Chair
Frank Russell Ellett
Donald R. Kimble
Patrick J. McCann
Thomas G. Snead, Jr.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 35
EXECUTIVE OFFICERS |
Our current executive officers are:
Name |
| Age |
| Position |
|
John C. Asbury | 58 | President and CEO of the Company and CEO of the Bank | |||
Robert M. Gorman | 65 | Executive Vice President (“EVP”) and Chief Financial Officer of the Company | |||
Maria P. Tedesco | 63 | EVP of the Company and President and Chief Operating Officer of the Bank | |||
Rachael R. Lape | 50 | EVP, General Counsel and Secretary of the Company | |||
Matthew L. Linderman | 49 | EVP of the Company and Chief Information Officer of the Bank | |||
Clare Miller | 44 | EVP and Chief Human Resource Officer of the Company | |||
Shawn E. O’Brien | 52 | EVP of the Company and Consumer and Business Banking Group Executive of the Bank | |||
David V. Ring | 60 | EVP of the Company and Wholesale Banking Group Executive of the Bank | |||
Sherry Williams | 62 | EVP and Chief Risk Officer of the Company | |||
Douglas F. Woolley, Jr. | 66 | EVP of the Company and Chief Credit Officer of the Bank |
Biographical information concerning our executive officers who are not directors follows. Biographical information for Mr. Asbury is included in “Proposal 1—Election of Directors—Biographical Information of Our Director Nominees” above.
Robert M. Gorman |
Mr. Gorman serves as EVP and Chief Financial Officer of the Company, positions he has held since July 2012. Before that he served as Senior Vice President and Director of Corporate Support Services with SunTrust Banks, Inc. from 2011 until 2012, and as Senior Vice President and Strategic Financial Officer of SunTrust Banks, Inc. from 2002 to 2011.
Maria P. Tedesco |
Ms. Tedesco serves as Chief Operating Officer of the Bank, a position she has held since January 2022, and as President of the Bank and Executive Vice President of the Company, positions she has held since September 2018. Before that, she served as Chief Operating Officer for Retail at BMO Harris Bank based in Chicago from 2016 to 2018, and as Senior Executive Vice President and Managing Director of Consumer Banking at Santander Bank, N.A. from 2013 to 2015. Before that, she held various positions with Citizens Financial Group, Inc. from 1994 to 2013.
Rachael R. Lape |
Ms. Lape serves as EVP, General Counsel and Secretary of the Company, positions she has held since September 2012. She also served as Associate Counsel of the Company from 2010 to 2012. Prior to joining the Company, from 2000 to 2009, she was in private practice with the law firms of Williams Mullen in Richmond; Goldberg Kohn in Chicago; and the law firm now known as K&L Gates in Chicago.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 36
Matthew L. Linderman |
Mr. Linderman serves as EVP of the Company and as Chief Information Officer of the Bank, positions he has held since February 2023. Before that, he served as Chief Technology Officer at PNC Financial Services Group, Inc. from 2020 to January 2023, and as its Senior Vice President, Data Center and Cloud Products, from 2019 to 2020. He served as Vice President, IT Infrastructure Engineering and Operations at CarMax from 2015 to 2019. Before that, he held various positions with Capital One from 1999 until 2015, most recently as its Vice President, Data Center Operations and Open Systems Hosting.
Clare Miller |
Ms. Miller serves as EVP and Chief Human Resources Officer of the Company, positions she has held since May 2022. Before that, she served as Chief Talent Officer/Head of Enterprise Talent at Huntington National Bank from November 2017 to May 2021. She served as Chief People Officer for Navigator Management Partners from June 2007 to November 2017. Before that, she held various human resource positions in the hospitality and professional services industries.
Shawn E. O’Brien |
Mr. O’Brien serves as EVP of the Company and Consumer and Business Banking Group Executive of the Bank, positions he has held since February 2019. Before that, he held various positions at BBVA Compass Bank, most recently as Executive Vice President, Consumer Segment Group and Business Planning from 2013 to 2018, and as Executive Vice President, Deposit and Payment Products, Strategic Planning and Corporate Planning and Analysis from 2005 to 2013. Before that, he was involved in retail brand strategy and product management at Huntington National Bank from 1998 to 2005.
David V. Ring |
Mr. Ring serves as EVP and Wholesale Banking Group Executive of the Company, positions he has held since September 2017. Before that, he served as Executive Vice President and Executive Managing Director at Huntington National Bank from December 2014 to May 2017. He served as Managing Director and Head of Enterprise Banking at First Niagara Financial Group from April 2011 to December 2014, and held various positions at Wells Fargo and its predecessor banks from January 1996 to April 2011, including Wholesale Banking Executive for Virginia to Massachusetts at Wachovia and Greater New York & Connecticut Region Manager.
Sherry Williams |
Ms. Williams serves as EVP and Chief Risk Officer of the Company, positions she has held since October 2022. Before that, she served as EVP, Chief Risk Officer at Amalgamated Bank from February 2022 to October 2022 and as its Chief Audit Executive from November 2018 to February 2022. Before that, she served as a Director of Risk Assurance at PricewaterhouseCoopers for six years. She also held various risk, audit, and financial reporting roles with SunTrust Bank from 2003 to 2013 and various leadership positions in risk management and audit at Ernst & Young LLP from 1995 to 1998 and with the State of Georgia from 1998 to 2003.
Douglas F. Woolley, Jr. |
Mr. Woolley serves as EVP of the Company and Chief Credit Officer of the Bank, positions he has held since 2016. Before that, he served as EVP-Senior Credit Officer from 2010 to 2016 and as Chief Credit Officer from 2004 to 2010. Before joining the Company, he served as Managing Director-Credit for M-CAM from 2000 to 2004. He served in various roles at First Union National Bank, including Senior Vice President-Senior Real Estate Portfolio Manager for Central, Western and Eastern Virginia from 1995 to 2000, Special Assets Manager for Hampton Roads from 1993 to 1995 and Head of Commercial Real Estate-Charlotte office from 1987 to 1993. He also held various credit-related positions in management consulting and with First National Bank of Atlanta.
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 37
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL OWNERS |
The following tables set forth, as of March 8, 2024, certain information with respect to (a) the beneficial ownership of our common stock and depositary shares held by (i) each of our directors and director nominees, (ii) each of our named executive officers, and (iii) all of our current directors, director nominees and executive officers as a group, and (b) shareholders known to us to beneficially own more than 5% of our common stock. For purposes of these tables, beneficial ownership has been determined in accordance with the provisions of Rule 13d-3 of the Exchange Act. In general, beneficial ownership includes any shares of common stock or depositary shares as to which the individual has sole or shared voting or investment power. None of these persons has any right to acquire shares of our common stock or depositary shares, as applicable, within 60 days of March 8, 2024 through the exercise of any option, warrant or other right. None of the shares listed below are pledged as security. Fractional shares have been rounded down to the nearest whole share for purposes of this table. Percentage ownership is calculated based on 75,493,639 shares of our common stock outstanding as of March 8, 2024 and 6,900,000 depositary shares outstanding as of March 8, 2024.
Directors and Executive Officers
| Common Stock |
| Depositary Shares | |||||
| Amount and |
|
| Amount and |
| |||
Nature of | Nature of | |||||||
Beneficial | Percent | Beneficial | Percent | |||||
Name of Beneficial Owner | Ownership | of Class | Ownership | of Class | ||||
Directors who are not NEOs: |
|
|
|
|
|
| ||
Nancy Howell Agee(1) | 31,414 |
| * | — |
| * | ||
Patrick E. Corbin(2) | 56,177 |
| * | — |
| * | ||
Rilla S. Delorier | 3,465 |
| * | — |
| * | ||
Frank Russell Ellett | 41,520 | * | — | * | ||||
Paul Engola | 582 | * | — | * | ||||
Donald R. Kimble | 7,582 |
| * | — |
| * | ||
Patrick J. McCann(3) | 28,497 |
| * | — |
| * | ||
Michelle A. O’Hara | 582 |
| * |
| ||||
Thomas P. Rohman | 18,092 |
| * | — |
| * | ||
Linda V. Schreiner | 18,858 |
| * | — |
| * | ||
Joel R. Shepherd(4) | 108,212 |
| * | — |
| * | ||
Thomas G. Snead, Jr. (5) | 48,382 |
| * | — |
| * | ||
Ronald L. Tillett(6) | 40,337 |
| * | — |
| * | ||
Keith L. Wampler(7) | 38,510 |
| * | — |
| * | ||
F. Blair Wimbush(8) | 13,488 |
| * | — |
| * | ||
NEOs: |
|
| ||||||
John C. Asbury(9) | 227,944 |
| * | — |
| * | ||
Robert M. Gorman(10) | 76,918 |
| * | — |
| * | ||
Maria P. Tedesco(11) | 67,284 |
| * | 800 |
| * | ||
Matthew L. Linderman(12) | 10,738 |
| * | — |
| * | ||
David V. Ring(13) | 34,888 |
| * | — |
| * | ||
All Directors and Executive Officers as a Group (25 persons) | 966,430 |
| 1.28% | 800 |
| * |
* | Represents less than 1% of our common stock or depositary shares, as applicable. |
(1) | Based on Ms. Agee’s ownership of 23,269.72 shares of American National common stock, which will automatically convert into 31,414 shares of our common stock at the effective time of the merger, based on the exchange ratio in the merger. |
(2) | Includes 25,353 shares of phantom stock allocated to Mr. Corbin’s account under the Virginia Bankers Association’s nonqualified deferred compensation plan for the Company. Includes 13,072 shares of common stock held indirectly by Mr. Corbin as Trustee of a trust. |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 38
(3) | Includes 201 shares of common stock registered in the name of Mr. McCann’s spouse. |
(4) | Based on Mr. Shepherd’s ownership of an aggregate of 80,157.5 shares of American National common stock, 100 shares of which are held indirectly by his children, which will automatically convert into 108,212 shares of our common stock at the effective time of the merger, based on the exchange ratio in the merger. |
(5) | Includes 37,322 shares of common stock held indirectly by Mr. Snead as Trustee and settlor of a trust. |
(6) | Includes 7,698 shares of phantom stock allocated to Mr. Tillett’s account under the Virginia Bankers Association’s nonqualified deferred compensation plan for the Company. |
(7) | Includes 23,225 shares of phantom stock allocated to Mr. Wampler’s account under the Virginia Bankers Association’s nonqualified deferred compensation plan for the Company. |
(8) | Includes 7,695 shares of phantom stock allocated to Mr. Wimbush’s account under the Virginia Bankers Association’s nonqualified deferred compensation plan for the Company. |
(9) | Includes 49,757 shares of restricted stock over which Mr. Asbury has no investment power until such shares vest. |
(10) | Includes 20,886 shares of restricted stock over which Mr. Gorman has no investment power until such shares vest. |
(11) | Includes 27,404 shares of restricted stock over which Ms. Tedesco has no investment power until such shares vest. |
(12) | Includes 11,181 shares of restricted stock over which Mr. Linderman has no investment power until such shares vest. |
(13) | Includes 14,593 shares of restricted stock over which Mr. Ring has no investment power until such shares vest. |
5% Shareholders
| Common Stock | ||||
| Amount and Nature of |
| |||
Name and Address of Beneficial Owner |
| Beneficial Ownership |
| Percent of Class | (1) |
The Vanguard Group(2) |
| ||||
100 Vanguard Blvd. | |||||
Malvern, PA 19355 | 9,290,826 | 12.4% | |||
BlackRock, Inc.(3) |
| ||||
50 Hudson Yards | |||||
New York, NY 10001 | 10,703,008 | 14.2% | |||
Dimensional Fund Advisors LP(4) | |||||
6300 Bee Cave Road | |||||
Building One | |||||
Austin, TX 78746 | 4,917,690 |
| 6.5% |
(1) | Percentage ownership is calculated based on 75,493,639 shares of our common stock outstanding as of March 8, 2024. |
(2) Based solely on information as of December 29, 2023 contained in Amendment No. 7 to Schedule 13G filed with the SEC on February 13, 2024, which reported that The Vanguard Group had sole voting power over no shares, sole dispositive power over 9,154,861 shares, shared voting power over 54,529 shares and shared dispositive power over 135,965 shares.
(3) | Based solely on information as of December 31, 2023 contained in Amendment No. 4 to Schedule 13G filed with the SEC on January 23, 2024, which reported sole voting power over 10,551,632 shares and sole dispositive power over 10,703,008 shares. These shares may be owned by one or more of the following entities controlled by BlackRock, Inc.: BlackRock Life Limited; BlackRock Advisors, LLC; Aperio Group, LLC; BlackRock (Netherlands) B.V.; BlackRock Institutional Trust Company, National Association; BlackRock Asset Management Ireland Limited; BlackRock Financial Management, Inc.; BlackRock Asset Management Schweiz AG; BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock Investment Management (Australia) Limited; BlackRock Fund Advisors (which beneficially owns 5% or more of the shares of common stock outstanding); and BlackRock Fund Managers Ltd. |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 39
(4) | Based solely on information as of December 29, 2023 contained in Amendment No. 9 to Schedule 13G filed with the SEC on February 9, 2024, which reported sole voting power over 4,831,420 shares and sole dispositive power over 4,917,690 shares. Dimensional Fund Advisors LP, a registered investment adviser, furnishes investment advice to four registered investment companies, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional Fund Advisors LP or its subsidiaries (collectively, “Dimensional”) may possess voting and/or investment power over the securities of the Company that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Company held by the Funds. However, all securities reported in the table are owned by the Funds. Dimensional disclaims beneficial ownership of such securities. |
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 40
COMPENSATION DISCUSSION AND ANALYSIS |
Named Executive Officers
Our named executive officers, referred to as our NEOs, are identified below and include our principal executive officer, principal financial officer, and our three other most highly compensated executive officers as of December 31, 2023.
Name | Position |
John C. Asbury | President and CEO of the Company and CEO of the Bank |
Robert M. Gorman | Executive Vice President (“EVP”) and Chief Financial Officer (“CFO”) of the Company |
Maria P. Tedesco | EVP of the Company and President and Chief Operating Officer (“COO”) of the Bank |
David V. Ring | EVP of the Company and Wholesale Banking Group Executive of the Bank |
Matthew L. Linderman | EVP of the Company and Chief Information Officer of the Bank |
Introduction
Our executive compensation programs are designed to attract, retain, and motivate our leadership team, even during times of uncertainty, and include a mix of fixed and variable compensation with both short- and long-term incentives used to drive our sustained growth and profitability. This section of the proxy statement provides an overview and explanation of the material information relevant to understanding the objectives, policies, and philosophy underlying our executive compensation programs, focusing on our NEOs.
In this Compensation Discussion and Analysis, the terms “executive” or “executive officer” means our executive leadership, including our NEOs. Following the Compensation Discussion and Analysis, we provide additional information relating to executive compensation in a series of tables, including important explanatory footnotes and narratives.
Executive Summary
Our executive compensation programs are designed to pay for performance by linking the compensation our executive officers receive through our various incentive plans to our financial performance. In making compensation decisions, the Compensation Committee considers the practices and compensation levels of the market, our performance and good governance practices. Our goal is to ensure that our compensation programs are competitive in attracting, motivating, and retaining high level executive talent, are commensurate with our financial performance, and are aligned with the interests of our shareholders.
Each compensation element is generally targeted to the median of the applicable market, as determined by the Compensation Committee based on select peer group and survey data. The incentive programs are designed so that our superior financial performance against the selected performance measures will result in total compensation that is higher than the median of our peers, while substandard financial performance will result in total compensation that is lower than the median of our peers. The Compensation Committee may, in its discretion, increase or decrease incentive compensation awards regardless of performance against the relevant performance metrics, although it believes such discretion should only be used in unique circumstances. When setting goals and objectives under the various compensation programs, the Compensation Committee considers our overall corporate strategy and how the goals enhance and support that strategy.
Over the last five years, we have grown through a combination of organic growth and acquisitions from an institution with $13.8 billion in total assets to more than $21.1 billion in total assets as of December 31, 2023. During this time, we made significant investments in both people and infrastructure, while continuing to deliver solid financial results. Over this five-year period, we delivered returns to our shareholders that are significantly above the median of our compensation peer group as illustrated by the graph below.
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The metric depicted in the above graph is total shareholder return. The source data is S&P Global Market Intelligence, which standardizes financial data to assist with comparisons across multiple companies. As such, the standardized data presented for us and as the median of the compensation peers may differ from actual calculations, which do not take into account such standardizations. |
When reviewing management performance, the Compensation Committee focuses on the four key corporate performance measures included in our Management Incentive Plan (“MIP”), which is our short-term incentive compensation plan. These performance measures are net operating earnings, return on assets (“ROA”), return on tangible common equity (“ROTCE”) and efficiency ratio. The following table includes select business highlights, including the four GAAP performance measures most closely aligned to the performance measures used in our executive compensation program. The Compensation Committee may consider certain adjustments to these performance measures when determining incentive compensation awards under the MIP. Such adjustments for 2023 are discussed in the section entitled “Short-Term Incentive Compensation” of this proxy statement.
| For the Years Ended December 31, | |||||||||||||||
Select Business Highlights |
| 2023 |
| 2022 |
| 2021 |
| 2020 |
| 2019 |
| |||||
Total Assets | $ | 21.17B | $ | 20.46B | $ | 20.06B | $ | 19.63B | $ | 17.56B | ||||||
Net Income | $ | 201.82M | $ | 234.51M | $ | 263.92M | $ | 158.23M | $ | 193.53M | ||||||
ROA |
| 0.98% |
| 1.18% |
| 1.32% |
| 0.83% |
| 1.15% | ||||||
ROTCE |
| 14.85% |
| 17.33% |
| 16.72% |
| 11.18% |
| 14.26% | ||||||
Efficiency Ratio |
| 61.32% |
| 57.46% |
| 61.91% |
| 60.19% |
| 62.37% | ||||||
Cash Dividends Paid Per Common Share | $ | 1.22 | $ | 1.16 | $ | 1.09 | $ | 1.00 | $ | 0.96 |
Response to Industry Turmoil and Key 2023 Performance Highlights
During 2023, our executive officers continued to operate under a soundness, profitability and growth model and demonstrated the strength and commitment needed to manage through significant turmoil in the banking industry triggered by three high-profile bank failures in early 2023. These failures raised concerns about possible contagion, leading to sizable declines in bank stocks, created uncertainty about the economic outlook and, together with the continued rising interest rate environment, resulted in dramatic shifts in deposit mix and increased funding costs that led to margin compression and lower net interest income levels across the industry.
In 2023, our management team took a series of proactive actions, including before the bank failures, to position us well for the future, which included the following:
● | Following the failures of Silicon Valley Bank and Signature Bank in March 2023, our management team immediately initiated a response plan that included, among other things, initiating our contingency funding plan, developing talking points for customer facing teammates, and engaging in customer outreach efforts, particularly for larger deposit customers. |
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● | We completed a series of cost saving initiatives, one of the largest in our history, to maintain positive operating leverage in 2023 and reduce our annual expense run rate. |
● | On July 25, 2023, we announced that we entered into a merger agreement to acquire American National Bankshares Inc. in an all-stock transaction. We have received all regulatory and shareholder approvals necessary to close the merger and we expect it to close on April 1, 2024. The merger will deepen our presence in Southwest and Southern Virginia and will allow us to gain meaningful entry into North Carolina’s attractive Piedmont Triad region and Raleigh. |
● | We repositioned our balance sheet in two transactions to seek to improve liquidity, enhance tangible common equity, and enhance run rate earnings. The first transaction, executed in the first quarter of 2023, included the sale of available-for-sale (“AFS”) securities with a book value of $505.7 million at a pre-tax loss of $13.4 million. We executed the second transaction in the third quarter of 2023, which involved the sale of low yielding AFS securities with a book value of $228.3 million at a pre-tax net loss of $27.7 million, with such loss being offset by the gain from our sale-leaseback transaction discussed below. |
● | On September 20, 2023, we executed a sale-leaseback transaction and sold 27 properties to a single purchaser for an aggregate purchase price of $45.8 million. Concurrently, we entered into absolute net lease agreements with the purchaser under which we will lease each of the properties for an initial term of 17 years with specified renewal options. The sale-leaseback transaction resulted in a pre-tax gain of approximately $27.7 million during the third quarter of 2023, after transaction related expenses. |
In addition, we were also named a 2023 Top Workplaces USA award winner—touted by Energage to be one of the nation’s most credible employer recognition programs.
Key 2023 Compensation Highlights
The following are some of our key 2023 compensation highlights:
● | We adjusted NEO base salaries to maintain competitiveness with the market median of our compensation peer group as well as to reflect individual performance, duties, skills, and experience. We also adjusted other elements of variable compensation, where needed, to more closely align total compensation with the market median. |
● | We paid a discretionary bonus to our NEOs equal to what would have been paid if we had achieved target performance on each corporate performance measure under the MIP. In February 2024, the Compensation Committee determined that due to the significant turmoil in the banking industry and its related impacts, we did not achieve threshold performance for our corporate performance measures under the MIP—net operating earnings, operating ROA, operating ROTCE, and operating efficiency ratio—based on the performance levels set in early 2023 before the Silicon Valley Bank and Signature Bank failures. However, based in part on our financial performance relative to our Updated Financial Plan and our performance in comparison to our compensation peer group as discussed below under “Short-term Incentive Compensation and Discretionary Bonus,” and in recognition of our achievements during a year of significant industry turmoil, as discussed under “—Response to Industry Turmoil and Key 2023 Performance Highlights,” and in light of the Compensation Committee’s overall compensation philosophy that, in part, seeks to attract and retain high level executive talent and to drive performance, the Compensation Committee determined to pay each NEO a discretionary bonus. |
● | We made cash payments under the MIP to our NEOs for their respective individual/divisional performance measures at the target (100%) performance level. For performance that exceeded target, the Compensation Committee used its discretion to pay those additional amounts in the form of a restricted stock award that will vest on the one-year anniversary of the grant date. |
● | We granted equity awards to our NEOs in the form of time-based restricted stock and performance share units (“PSUs”) under our Long-Term Incentive Program, and added a new performance metric to the PSUs—core return on average tangible common equity (“ROATCE”)—to provide for a more balanced perspective of our performance and to more closely align with the practices of our compensation peer group. All NEOs were granted a mix of equity awards that included no less than fifty percent of the value in PSUs. |
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These actions are bolstered by the best practices embedded in our executive compensation programs designed to ensure that the Compensation Committee maintains effective governance and oversight of the programs. Our compensation governance model defines the enterprise-wide approach for the cross-functional management of incentive compensation programs to ensure proper risk oversight, process and controls. The model follows a continual process consisting of four key areas, as follows:
Plan Administration
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Pay Practices
Our Compensation Committee has implemented certain pay practices, as described below, that are designed to reinforce our principles, support risk management and align with the long-term interests of our shareholders.
What We Do | ||
What We Don’t Do | ||
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Compensation Philosophy and Objectives
Our executive compensation philosophy is to provide competitive, market-based total compensation programs that are aligned with our short- and long-term business strategies, tied to our performance, and aligned with the interests of our shareholders.
Within this framework, we observe the following principles:
● | Pay for performance: We use performance-based cash and equity incentive programs to create a balance between fixed and at-risk compensation. Payouts under these programs vary depending upon performance against both our annual corporate performance measures and individual/divisional performance measures, as applicable. We incentivize our executive officers to achieve targeted performance against our operational and financial goals, as well as individual growth objectives, by tying greater financial results to greater financial rewards. |
● | Reward long-term growth and profitability: We use equity-based compensation with vesting periods of generally no less than three years to encourage retention, promote performance and increase our executive officer’s level of at-risk compensation. These awards are designed to motivate the execution and achievement of long-term results. |
● | Align compensation with shareholder value creation: We use equity-based compensation to align the financial interests and objectives of our executive officers with those of our shareholders. Our long-term incentive goals and payouts are designed so that target and above-target compensation levels are paid only when our relative market performance indicates that shareholder value has been created. |
● | Attract and retain highly qualified executives: We offer our executive officers total compensation that is designed to be competitive with our identified industry peer group to allow us to attract and retain high-performing individuals. Also, several of our compensation programs include the use of long-term equity compensation to encourage retention. We recognize that by attracting and retaining high-performing executives, our customers and shareholders will benefit from their expertise, superior performance, and service longevity. |
● | Ensure proper governance practices: We have designed our executive compensation policies and procedures to prevent excessive risk-taking by, among other things, balancing short- and long-term compensation. Our performance-based plans also contain both threshold and maximum payout levels, as well as clawback provisions. We generally seek to target each compensation element to the median of our identified peer group to ensure compensation levels are appropriate. Finally, our compensation programs and review process allow us to account for individual variances in experience, skills, and contributions. |
2023 Shareholder Response
We held an advisory vote on NEO compensation at our 2023 annual meeting of shareholders. Excluding abstentions and broker nonvotes, approximately 96% of the votes were in support of our executive compensation program. The Compensation Committee considered the result of this advisory vote when evaluating and establishing our executive compensation programs for 2023, and viewed the vote as an expression of our shareholders’ overall satisfaction with our current executive compensation programs. The Compensation Committee continually evaluates our compensation programs in light of market practice and our evolving business needs.
Role of the Compensation Committee
The Compensation Committee assists the Board in discharging its responsibilities relating to executive compensation and to our compensation and benefit programs and policies, more generally. Under the Compensation Committee Charter, the Compensation Committee is responsible for, among other things:
● | Establishing our overall executive compensation philosophy and the goals and objectives of our compensation plans; |
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● | Annually reviewing and approving the corporate goals and objectives relevant to our CEO’s compensation and, together with all other independent directors, evaluating our CEO’s performance and approving CEO compensation in light of such evaluation; |
● | Annually reviewing and approving the compensation of all other executive officers; |
● | Administering our incentive and equity-based compensation plans, including designating executives to whom awards are granted, the amount of the award or grant and the terms and conditions of each award or grant; |
● | Reviewing and recommending to the Board the adoption, amendment, extension or termination of any employment agreements, retirement benefits and severance arrangement or plans with our executive officers; and |
● | Reviewing and recommending to the Board the form and amount of non-employee director compensation. |
Role of Leadership
The Compensation Committee calls upon our executive officers from time to time to support the Compensation Committee in the fulfillment of its duties. Our CEO provides recommendations related to a number of matters that are subject to the Compensation Committee’s review and approval, including the compensation of executive officers other than the CEO, the design of our incentive plans and the financial goals on which these incentive plans are generally based. In addition to reviewing market data as described below, the Compensation Committee considers the recommendations of other key executives, including the CEO, the CFO, and the Chief Human Resources Officer, in making decisions on compensation. The Compensation Committee retains discretion in determining whether to approve recommendations made by our executive officers.
Compensation Consultants
The Compensation Committee engages an independent compensation consultant to provide benchmarking market data and serve as an advisor, among other services. The independent compensation consultant serves at the request of, and reports directly to, the Compensation Committee. The Compensation Committee has the sole authority to engage the independent compensation consultant and approve their fees and the other terms of the engagement.
During 2023, the Compensation Committee retained the services of Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant. In this role, Meridian advised the Compensation Committee on various executive and director compensation matters including:
● | providing peer benchmarking data with respect to executive compensation practices within our defined peer group; |
● | providing information regarding base salary ranges and recommendations for the executive officers; |
● | assisting in the development of compensation guidelines used during the executive hiring process; |
● | reviewing the Compensation Discussion and Analysis section of the proxy statement; |
● | assisting in the development of goals for our short- and long-term incentive plans; and |
● | providing updates on regulatory matters and trends. |
Meridian does not perform any other services for the Company.
The Compensation Committee considered the independence of Meridian in light of applicable SEC rules and listing exchange standards. In so doing, the Compensation Committee considered the following factors, among others: (i) the fact that Meridian provides no other services to us; (ii) the amount of fees we paid to Meridian as a percentage of Meridian’s total revenue; (iii) Meridian’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Meridian or the individual compensation advisors employed by Meridian with any of our executive officers; (v) any business or personal relationship of the individual
ATLANTIC UNION BANKSHARES | 2024 PROXY STATEMENT 47
compensation advisors employed by Meridian with any member of the Compensation Committee; and (vi) whether Meridian or the individual compensation advisors employed by Meridian owned any of our stock. The Compensation Committee determined, based on its analysis of the above factors, among others, that the work of Meridian and the individual compensation advisors employed by Meridian did not raise any conflicts of interest.
Compensation Benchmarking and Decisions
Each year, the Compensation Committee, with the assistance of its independent compensation consultant, reviews the compensation of our peers to assess the competitiveness of our compensation arrangements with our NEOs. The Compensation Committee uses this information as a benchmarking reference to ascertain whether we have competitive compensation levels with other comparable institutions, in setting compensation target levels, and in deciding whether to make any changes in base salary, annual cash incentive awards and long-term equity awards, among other things.
The Compensation Committee, with the advice of its independent compensation consultant, also reviews the composition of this peer group annually. In selecting our peer group for 2023, the Compensation Committee began by including publicly traded U.S. banks with assets (as of the end of the second quarter of 2022) ranging from approximately 50% to 200% of our asset size. The Compensation Committee then considered the “compatibility” and “comparability” of each company by reviewing, among other things, each peer company’s asset size, earnings, geographical location, organizational structure and governance, number of employees, number of branch offices, and service offerings. Taking these criteria into consideration, the Compensation Committee approved a group of 22 peers, listed below, among which the Company is positioned near the median in terms of asset size.
2023 Peer Group | ||||
Ameris Bancorp |
| Heartland Financial USA, Inc. |
| TowneBank |
Berkshire Hills Bancorp, Inc. | Home BancShares, Inc. | Trustmark Corporation | ||
BankUnited, Inc. | Pinnacle Financial Partners, Inc. | UMB Financial Corporation | ||
Cadence Bank | Renasant Corporation | United Bankshares, Inc. | ||
First Financial Bancorp. | Sandy Spring Bancorp, Inc. | United Community Bank, Inc. | ||
F.N.B. Corporation | Simmons First National Corporation | WesBanco, Inc. | ||
Fulton Financial Corporation | SouthState Corporation | WSFS Financial Corporation | ||
Hancock Whitney Corporation |
In addition to the selected peer group, the Compensation Committee also considered the executive compensation of peer companies used by proxy advisory firms to ensure reasonable overlap.
Finally, the Compensation Committee reviewed relevant market and survey data and analyses provided by its independent compensation consultant, including the following:
● | McLagan, 2022 Regional and Community Banking Compensation Survey; and |
● | Custom peer group proxy filings. |
Executive positions were matched to the data based on job duties using the appropriate scope for asset size.
Compensation Risk Assessment
Our risk management group annually evaluates our compensation programs as part of our enterprise risk management review. This evaluation includes, but is not limited to, a review of our performance metrics, approval mechanisms and related characteristics of our incentive compensation policies and programs. The goal of the review is to determine whether any of our compensation programs could create risks that may have a material adverse effect on the Company. To date, these reviews have found that our compensation programs do not present such a risk for the Company. The Compensation Committee also regularly reviews our incentive compensation arrangements to
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ensure that such arrangements do not encourage the NEOs to take unnecessary or excessive risks that would have a material adverse effect on the Company.
Elements of Compensation
The Compensation Committee annually evaluates the three principal compensation elements used in our executive compensation program to help us attract and retain high-performing executives. Our principal compensation elements and their objectives are described below:
Element | Objective |
Base Salary | Designed to provide income stability that is competitive with organizations of comparable size and structure, which allows our executives to focus on the execution of our strategic goals and their day-to-day duties and responsibilities |
Short-Term Incentives (Cash) | Designed to encourage, recognize and reward achievement of annual corporate financial goals and individual performance objectives that help drive shareholder value creation |
Long-Term Incentives (Equity) | Designed to motivate executives towards shareholder value creation by aligning executive and shareholder interests, and to retain talented executives |
Incentive compensation awarded to an individual executive should generally become a larger percentage of the executive’s total direct compensation when he or she assumes more significant responsibilities and has a greater impact on the financial or operational success of the Company. Accordingly, the Compensation Committee decided to include a larger percentage of incentive compensation in the CEO’s target and actual total compensation mix for 2023, as reflected in the charts below.
|
Generally, the Compensation Committee targets NEO base salary compensation levels and short- and long-term incentive compensation opportunity percentages at the median of the selected peer group market data. For 2023, target executive compensation levels were considered in-line with respective market benchmarks.
The elements of compensation are described further below and are also detailed in the Summary Compensation Table and the other tables following this Compensation Discussion and Analysis.
Base Salary
In early 2023, the Compensation Committee recommended increased base salaries for certain NEOs, which were approved by the Board on February 23, 2023. The Compensation Committee approved larger base salary increases for Mr. Gorman and Mr. Ring to better align their pay opportunity with the median of our selected compensation
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peer group. The increase in Mr. Ring’s base salary also related to an increase in the scope of his duties, which now include oversight over certain portions of wealth management, including our trust and asset management businesses.
NEO annualized base salaries in effect at year-end 2023 were as follows:
| 2023 |
| Increase |
| ||
Name | Base Salary | from 2022 | ||||
John C. Asbury | $ | 900,000 |
| 4.0% | ||
Robert M. Gorman | $ | 485,781 |
| 10.0% | ||
Maria P. Tedesco | $ | 630,691 |
| 4.0% | ||
David V. Ring | $ | 511,396 |
| 25.0% | ||
Matthew L. Linderman | $ | 470,000 |
| N/A(1) |
(1) | Mr. Linderman’s employment with the Company began on February 13, 2023. |
Short-Term Incentive Compensation and Discretionary Bonus
As discussed above, the Management Incentive Plan, or “MIP,” is our short-term incentive compensation plan, which is administered by the Compensation Committee with input from our CEO. Under the MIP, the Compensation Committee determines each executive’s target incentive award at the beginning of the fiscal year, which is expressed as a percentage of each executive’s base salary. The Compensation Committee also selects corporate and individual/divisional performance measures, and each executive’s target incentive award is weighted between these measures. Additionally, the Compensation Committee establishes threshold, target and superior performance levels and the weights for each selected corporate performance measure. Under the terms of the MIP, cash payments may range from 0% to 200% of each executive’s target incentive award. If an executive’s employment is terminated before payment is made under the MIP for any reason other than for death, permanent disability or retirement at or after age 65 during the plan year, the executive is not entitled to receive any compensation thereunder.
Under the MIP, the Compensation Committee has the discretion to increase or decrease an incentive award in light of considerations it deems relevant and appropriate. In addition, unless the Compensation Committee determines otherwise, no incentive awards will be paid under the MIP, regardless of performance against the specified individual/divisional and corporate performance measures, if the Compensation Committee considers it imprudent to pay awards under the MIP based on (i) any regulatory agency issuing a formal, written enforcement action, memorandum of understanding or other negative directive action; or (ii) our credit quality. Payouts under the MIP are also subject to the terms of our Incentive Compensation Recovery Policy, as well as any similar provisions of applicable law or regulation.
For 2023, each NEO’s target incentive award and weighting between corporate and individual/ divisional performance measures were as follows:
|
|
| Individual/ |
| |||
Target as a | Corporate | Divisional | |||||
Percentage of | Goal | Performance | |||||
Name | Base Salary | Weighting | Weighting | ||||
John C. Asbury |
| 100% | 80% | 20% | |||
Robert M. Gorman |
| 70% | 80% | 20% | |||
Maria P. Tedesco |
| 75% | 80% | 20% | |||
David V. Ring |
| 55% | 50% | 50% | |||
Matthew L. Linderman |
| 55% | 60% | 40% |
Corporate Performance Measures
For our NEOs, other than Mr. Ring, the largest portion of the target incentive award was tied to our achievement of corporate performance measures. Mr. Ring is responsible for one of our most significant lines of business and therefore has an equal portion of his target incentive award tied to individual/divisional performance measures.
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In February 2023, the Compensation Committee reviewed and approved the 2023 corporate performance measures and weightings based on our Board-approved 2023 financial plan, which includes financial forecasts that consider our growth strategies, historical performance, and key economic assumptions for our industry. This process occurred, and corporate performance measures were established, before the industry experienced the unforeseen turmoil discussed above under “—Response to Industry Turmoil and Key 2023 Performance Highlights.”