Community West Bancshares revamps executive contracts

Community West Bancshares, a $371 million market cap regional bank currently trading at a premium to its InvestingPro Fair Value, has entered into new employment agreements with six of its executive officers, according to a recent SEC filing.

The agreements, effective January 30, 2025, replace previous contracts and outline revised compensation, including base salaries and potential incentive bonuses. The bank has maintained dividend payments for 14 consecutive years, currently offering a 2.46% yield.

James J. Kim, the Chief Executive Officer, will receive the highest base salary of $625,000, with an incentive bonus target of 60%. Other executives, including the Chief Financial Officer Shannon R. Livingston and Chief Operating Officer Blaine C. Lauhon, will earn base salaries of $350,000 and $310,000, respectively, with respective bonus targets of 50% and 45%. The compensation packages come as the bank reports annual revenue of $105.7 million with an 18.58% growth rate.

These agreements also include benefits such as company cars or allowances, paid vacation, and restricted stock shares. Additionally, the executives are eligible to participate in deferred compensation plans.

The terms include provisions for severance payments in case of termination without cause or following a change in control of the company. Executives would receive a lump sum payment based on their average monthly cash compensation multiplied by a specified number of months, varying depending on the individual’s role.

In a separate arrangement, the Bank has entered into a Salary Continuation Agreement with CFO Shannon R. Livingston, providing her with an annual payment for 15 years post-separation from service after age 62, subject to certain conditions. The Bank has also established a Split Dollar Life Insurance (NSE:LIFI) Agreement with Livingston, detailing the division of death benefits under her life insurance policy.

Additionally, an amendment to CEO James J. Kim’s existing Executive Salary Continuation Agreement was made, altering the terms of early termination benefits.

The filing also announced the resignation of Patrick A. Luis, the Bank’s Chief Credit Officer, effective February 28, 2025. His departure is not due to any disagreements with the company’s operations, policies, or practices.

The details of these employment agreements and additional arrangements are filed as exhibits in the SEC Form 8-K and are incorporated by reference in the document.

This news is based on the latest SEC filing by Community West Bancshares and does not include any subjective assessment or speculative information.

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