o | Preliminary Proxy Statement | ||||
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x | Definitive Proxy Statement | ||||
o | Definitive Additional Materials | ||||
o | Soliciting Material Under Rule 14a-12 |
x | No fee required. | ||||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||||
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o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||||
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Items of Business | About the Meeting | |||||||||||||
Item 1. | The The election of |
Meeting Date: Time: | April 28, 2022 4:00 p.m. Central time | |||||||
Item 2. | The approval, on a nonbinding basis, of the |
Address: | David L. Miller Conference Center 1601 22nd Street West Des Moines, IA 50266 | |||||||
Item 3. |
The ratification of the appointment of RSM US LLP as the independent registered public accounting firm for the Company for the year ending December 31, |
Record Date: | February 18, 2022 | |||||||||||||
Item | All other matters that may properly come before the Annual Meeting and any adjournments or postponements thereof. |
Vote Online 8 | Vote by Phone ( | Vote by Mail * | ||||||
Before the meeting: www.proxyvote.com | 1-800-690-6903 | If you request to receive your proxy materials by mail, sign, date and return your proxy card in the envelope provided. |
PROXY SUMMARY |
PROPOSAL 1. Election of Directors. | Our Board recommends a vote FOR each director nominee. |
Committee | ||||||||||||||||||||||||||||||||
Company | Bank | |||||||||||||||||||||||||||||||
Director Nominees | Age | Director Since | Principal Occupation | Location | AC | CC | NCG | RC | DL | TR | ||||||||||||||||||||||
Patrick J. Donovan | 68 | 2019 | Retired | St. Paul, MN | M | M | ||||||||||||||||||||||||||
Lisa J. Elming | 61 | 2021 | Retired | Johnston, IA | M | M | ||||||||||||||||||||||||||
Steven K. Gaer | 61 | 2011 | Chief Operating Officer and General Counsel, R&R Realty Group | West Des Moines, IA | C | M | ||||||||||||||||||||||||||
Michael J. Gerdin | 52 | 2013 | Chairman and Chief Executive Officer, Heartland Express, Inc. | North Liberty, IA | M | |||||||||||||||||||||||||||
Douglas R. Gulling | 68 | 2022 | Retired Chief Financial Officer, Executive Vice President, Treasurer of the Company and Chief Financial Officer, Executive Vice President of West Bank | Urbandale, IA | M | M | ||||||||||||||||||||||||||
Sean P. McMurray | 54 | 2013 | Chief Technology Officer - Emeritus, Businessolver, Inc. | Clive, IA | M | C | ||||||||||||||||||||||||||
George D. Milligan | 65 | 2005 | President, The Graham Group, Inc. | Des Moines, IA | C | C | ||||||||||||||||||||||||||
David D. Nelson | 61 | 2010 | Chief Executive Officer and President of the Company, and Chair and Chief Executive Officer of West Bank | West Des Moines, IA | M | |||||||||||||||||||||||||||
James W. Noyce | 66 | 2009 | Chair of the Company | West Des Moines, IA | M | M | ||||||||||||||||||||||||||
Rosemary Parson | 64 | - | Senior Vice President of Policy Administration and Community Relations, EquiTrust Life Insurance Company | Urbandale, IA | ||||||||||||||||||||||||||||
Steven T. Schuler | 70 | 2018 | Retired | Urbandale, IA | C | M | ||||||||||||||||||||||||||
Therese M. Vaughan | 65 | 2019 | Professional Director of the Vaughan Institute of Risk Management, University of Iowa | Des Moines, IA | M | M | M | |||||||||||||||||||||||||
Philip Jason Worth | 50 | 2013 | President, Gilcrest/Jewett Lumber Company | West Des Moines, IA | M | C |
ü | The positions of Chair and Chief Executive Officer are separately held. | ||||
ü | Our Chair is independent. | ||||
ü | We impose a director age limit of 73. | ||||
ü | Only independent directors serve on the Audit, Compensation, and Nominating and Corporate Governance committees of the Company Board. | ||||
ü | Executive sessions of the independent directors are held at all in-person Board meetings. | ||||
ü | Annual Board and committee performance evaluations are conducted. | ||||
ü | Ongoing and active risk oversight is performed by a separate risk management committee. | ||||
ü | We consider diversity of Board composition, including each director’s skills, expertise, experience, gender, race and ethnicity. |
PROPOSAL 2. Approve the 2021 compensation of the Company’s named executive officers. | Our Board recommends a vote FOR this proposal. |
Element | Base Salary | Annual Cash Incentives | Long-Term Equity Incentives | Other | ||||||||||
CEO Mix % | 47% | 25% | 25% | 3% | ||||||||||
Average Other NEO Mix % | 38% | 20% | 36% | 6% | ||||||||||
Highlights | •Fixed compensation set to be competitive within our industry. •Adjusted annually based on numerous factors, including scope of an executive officer’s responsibilities, demonstrated performance and relevant market data. •2021 adjustment was 4.9 percent for the CEO and 3.8 percent for the other NEOs. | •Annual cash bonus opportunity intended to motivate and reward executives for the achievement of certain business goals and strategies. •Primarily based on: •the Company’s net profit and •the Company’s performance relative to its peer group based on return on average equity, efficiency ratio and Texas ratio. •No changes have been made to the maximum eligible amount of cash bonus for 2021, which has been 60 percent of base salary for several years. | •Award of time-based and performance-based RSUs that incentivize executives to deliver long-term value, while also providing a retention vehicle for our executives. •The total number of RSUs granted in 2021 remained the same as in prior years. •In 2021, grants for our NEOs were 50 percent performance-based and 50 percent time-based RSUs. •The 2021 time-based RSUs vest ratably over five years. •The 2021 performance-based RSUs cliff vest at the end of three years in accordance with the award performance criteria. |
ü | We pay for performance. | ||||
ü | We align executives’ financial interests with stockholders’ interests. | ||||
ü | Our programs support the Company’s and West Bank’s values, strategy and development of employees. | ||||
ü | Our compensation practices foster a team approach among named executive officers. | ||||
ü | Our compensation practices attract and retain leaders capable of delivering superior business results. | ||||
ü | We provide competitive cash and total compensation opportunities and benefits. | ||||
ü | We adhere to the highest legal and ethical standards. |
PROPOSAL 3. Ratify the appointment of RSM US LLP as the Company’s independent registered public accounting firm for 2022. | Our Board recommends a vote FOR this proposal. |
A proxy statement is a document required by the Securities and Exchange Commission (the “SEC”) that, among other things, explains the items on which you are asked to vote on at the Annual Meeting. | |||||
Why did I receive access to this proxy statement and proxy card? | We have made the proxy materials available to you over the internet because you were a stockholder of record of the Company at the close of business on February 18, 2022 (the “Record Date”). As a stockholder of record on the Record Date, you are entitled to vote at the Annual Meeting. This proxy statement describes the matters that will be presented for consideration by the stockholders at the Annual Meeting. It also gives you information concerning those matters to assist you in making an informed decision on each matter. If you vote pursuant to the instructions set forth in the notice and herein, you appoint the proxy holders as your representatives at the Annual Meeting. The proxy holders will vote your shares as you have instructed, thereby ensuring your shares will be voted whether or not you attend the Annual Meeting. Even if you plan to attend the Annual Meeting, we ask that you instruct the proxies how to vote your shares in advance of the meeting just in case your plans change. | ||||
Why did I receive a notice regarding the internet availability of proxy materials instead of paper copies of the proxy materials? | We are using the SEC’s notice and access rule that allows us to furnish our proxy materials over the internet to our stockholders instead of mailing paper copies of those materials to each stockholder. As a result, beginning on or about March 10, 2022, we sent our stockholders by mail a notice containing instructions on how to access our proxy materials over the internet and vote. This notice is not a proxy card and cannot be used to vote your shares. If you received a notice this year, you will not receive paper copies of the proxy materials unless you request the materials by following the instructions on the notice. | ||||
What matters will be voted on at the meeting? | You are being asked to vote on the following matters proposed by our Board: (1)the election of |
(2) | the approval, on a nonbinding basis, of the |
(3) | the |
These matters are more fully described in this proxy statement. We are not aware of any other matters that will be voted on at the Annual Meeting. However, if any other business properly comes before the meeting, the persons named as proxies for stockholders will vote on such matters in a manner they consider appropriate. |
How do I vote? | After reviewing this document, please submit your proxy using any of the voting methods indicated on the notice. You may vote by telephone, by internet, by mail if you complete, sign, date and mail the proxy card you received in the mail, if you received paper copies of the proxy materials, or in person at the Annual Meeting. By submitting your proxy, you authorize the individuals named in it to represent you and vote your shares at the Annual Meeting in accordance with your instructions. Your vote is important. Whether or not you plan to attend the Annual Meeting, please submit your proxy card promptly in the enclosed envelope, or through the internet or via telephone by following the instructions on the proxy card. If you sign and return your proxy card but do not mark the card to provide voting instructions, the shares represented by your proxy card will be voted “FOR” all 13 nominees named in this proxy statement, “FOR” the approval of the say-on-pay proposal and “FOR” the ratification of the appointment of RSM US LLP as our independent registered public accounting firm for the 2022 fiscal year. If you are a beneficial owner and a broker or other fiduciary is the record holder of your shares (which is usually referred to as “street name” ownership), then you received this proxy statement from the record holder of the shares that you beneficially own. The record holder should have given you instructions for directing how the record holder should vote your shares. It will then be the record holder’s responsibility to vote your shares in the manner you direct. If you want to vote in person, please come to the Annual Meeting. We will distribute ballots to anyone who wants to vote at the meeting. Please note, however, that if your shares are held in the name of a broker or other fiduciary (i.e., in street name), you will need to arrange to obtain a legal proxy from the record holder to vote in person at the meeting. Even if you plan to attend the Annual Meeting, we ask that you complete and return your proxy card or vote via the internet or by telephone in advance of the Annual Meeting in case your plans change. | ||||
If I hold shares in the name of a broker, who votes my shares? | If your broker holds your shares in its name and you have not provided voting instructions for your shares, your broker may choose to either leave your shares unvoted or vote your shares on certain “routine” matters on which the broker is deemed to have discretionary voting authority. The ratification of the appointment of a company’s independent registered public accounting firm is considered a routine matter, while the election of directors and the approval of say-on-pay proposals are considered nonroutine matters. Thus, if you do not provide instructions to your broker as to how it should vote the shares beneficially owned by you, your broker will be able to vote on the ratification of the appointment of RSM US LLP as our independent registered public accounting firm but will not be permitted to vote on the election of directors or the approval of the say-on-pay proposal. If your broker does not receive instructions from you on how to vote on a particular matter on which your broker does not have discretionary authority to vote, your broker will return the proxy to us indicating the broker does not have authority to vote on these matters. This is referred to as a “broker non-vote” with respect to the nonroutine matters and will affect the outcome of the voting as described below under “What options do I have in voting on each of the proposals?” Therefore, we encourage you to provide directions to your broker as to how you want your shares voted on all matters brought before the Annual Meeting. | ||||
If I hold shares in the West Bancorporation 401(k) retirement plan, who votes my shares? | If you are a holder of stock in the Company’s 401(k) retirement plan (the “Plan”), you can direct the trustee of the Plan (the “Trustee”) how to vote the number of shares you hold in the Plan for each proposal included in this proxy statement. If you do not provide timely voting directions to the Trustee, then the Trustee shall vote the shares held for your benefit in the same proportion as those shares of stock held in the Plan for which the Trustee has received proper directions for voting. | ||||
What if I change my mind after I return my proxy? | If you hold your shares in your own name, you may revoke your proxy and change your vote at any time before the polls close for the meeting. You may do this by: •signing another proxy card with a later date and returning that proxy card to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717; •timely submitting another proxy via the internet; •timely submitting another proxy via telephone; •sending notice to us at the address below that you are revoking your proxy; or •voting in person at the meeting. All written notices of revocation and other written communications with respect to revocation of proxies should be sent to Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, NY 11717. If you hold your shares in the name of your broker and desire to revoke your proxy, you will need to contact your broker. |
How many votes do we need to hold the Annual Meeting? | The holders of a majority of the outstanding shares of the Company entitled to vote as of the Record Date must be present in person or by proxy at the meeting in order to hold the meeting and conduct business. Shares are counted as present at the meeting if the stockholder either: •has properly submitted a signed proxy card or other form of proxy (through the internet or telephone); or •attends the Annual Meeting in person. Shares of common stock held by stockholders abstaining from voting but otherwise present at the meeting in person or by proxy, votes withheld, and broker non-votes are included in determining whether a quorum is present. On the Record Date, there were 16,554,846 shares of common stock issued and outstanding, all of which were entitled to vote. Therefore, at least 8,277,424 shares need to be present, in person or by proxy, at the Annual Meeting to conduct business. Each share of common stock is entitled to one vote. | ||||
What happens if a nominee is unable to stand for re-election? | The Board may, by resolution, provide for a lesser number of directors or designate a substitute nominee. In the latter case, shares represented by proxies may be voted for a substitute nominee at the discretion of the proxy holders. Proxies cannot be voted for more than 13 nominees. We have no reason to believe any nominee will be unable to stand for election. | ||||
What options do I have in voting on each of the proposals? | The directors are elected by a plurality of the votes cast by the shares entitled to vote, and the 13 nominees receiving the greatest number of votes cast “FOR” their election will be elected as directors of the Company. Votes withheld from any nominee will have no effect on the election of directors if the number of nominees is not greater than the number of directors to be elected due to the fact that such elections are by a plurality of the votes cast. The number of votes cast “FOR” the proposal must exceed the number of votes cast “against” such proposal to approve the say-on-pay proposal and the ratification of the appointment of RSM US LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022. The vote on our executive compensation is advisory and is not binding on the directors of the Company. However, the Compensation Committee of the Board will consider stockholder votes in establishing our compensation plans for subsequent years. Broker non-votes and abstentions will not be counted as votes cast, but will count for purposes of determining whether a quorum is present. So long as a quorum is present, broker non-votes and abstentions will have no effect on the outcome of the matters to be presented for a vote at the Annual Meeting. | ||||
Where do I find the voting results of the Annual Meeting? | We will announce preliminary voting results at the Annual Meeting. The voting results will also be disclosed in a Current Report on Form 8-K that we will file with the SEC within four business days after the meeting. | ||||
Who bears the cost of soliciting proxies? | The Company will bear the cost of soliciting proxies. In addition to solicitations by mail, our officers, directors or employees, without extra compensation, may solicit proxies in person, via email or by telephone. We may reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to stockholders. |
Director Nominees | Age | Director Since | Principal Occupation | Location | ||||||||||
Patrick J. Donovan | 68 | 2019 | Retired | St. Paul, MN | ||||||||||
Lisa J. Elming | 61 | 2021 | Retired | Johnston, IA | ||||||||||
Steven K. Gaer | 61 | 2011 | Chief Operating Officer and General Counsel, R&R Realty Group | West Des Moines, IA | ||||||||||
Michael J. Gerdin | 52 | 2013 | Chairman and Chief Executive Officer, Heartland Express, Inc. | North Liberty, IA | ||||||||||
Douglas R. Gulling(1) | 68 | 2022 | Retired Chief Financial Officer, Executive Vice President, Treasurer of the Company and Chief Financial Officer, Executive Vice President of West Bank | Urbandale, IA | ||||||||||
Sean P. McMurray | 54 | 2013 | Chief Technology Officer - Emeritus, Businessolver, Inc. | Clive, IA | ||||||||||
George D. Milligan | 65 | 2005 | President, The Graham Group, Inc. | Des Moines, IA | ||||||||||
David D. Nelson | 61 | 2010 | Chief Executive Officer and President of the Company, and Chair and Chief Executive Officer of West Bank | West Des Moines, IA | ||||||||||
James W. Noyce | 66 | 2009 | Chair of the Company | West Des Moines, IA | ||||||||||
Rosemary Parson | 64 | — | Senior Vice President of Policy Administration and Community Relations, EquiTrust Life Insurance Company | Urbandale, IA | ||||||||||
Steven T. Schuler | 70 | 2018 | Retired | Urbandale, IA | ||||||||||
Therese M. Vaughan | 65 | 2019 | Professional Director of the Vaughan Institute of Risk Management, University of Iowa | Des Moines, IA | ||||||||||
Philip Jason Worth | 50 | 2013 | President, Gilcrest/Jewett Lumber Company | West Des Moines, IA |
Patrick J. Donovan | Age: | 68 | ||||||||||||
St. Paul, Minnesota | Director | |||||||||||||
Director of West Bank Since: | 2019 | |||||||||||||
2021 Committee: | Risk Management and Information Technology | |||||||||||||
*Prior to retirement, Mr. Donovan was the President and Chief Executive Officer and a board member of Bremer Financial Corporation, a $13 billion regional financial services company with locations throughout Minnesota, North Dakota and Wisconsin. He started with Bremer in 2003 as its Chief Operating Officer and became its Chief Executive Officer and a board member in 2009. He retired from Bremer on December 31, 2016. | ||||||||||||||
*Mr. Donovan is a former member of the Federal Advisory Council for the Board of Governors of the Federal Reserve System. | ||||||||||||||
*We consider Mr. Donovan to be a qualified candidate for service on the Board and committee on which he serves because of his extensive background in the banking industry spanning nearly four decades and his familiarity with the Minnesota business community. |
Lisa J. Elming | Age: | 61 | ||||||||||||
Johnston, Iowa | Director of the Company since: | 2021 | ||||||||||||
Director of West Bank Since: | 2021 | |||||||||||||
2021 Committee: | Risk Management and Information Technology | |||||||||||||
*Prior to her retirement, Ms. Elming was the Director of Information Technology at Pioneer Hybrid International, a publicly traded global provider of seeds and agriculture services, from 2012 to 2017, where she led the information technology team that supported all Pioneer business activities in the United States, Mexico and Brazil. Pioneer is now part of Corteva Agriscience. | ||||||||||||||
*We consider Ms. Elming to be a qualified candidate for service on the Board and committee on which she serves because of her extensive knowledge and over 35 years of experience as an information technology expert. |
Steven K. Gaer | Age: | 61 | ||||||||||||||
West Des Moines, Iowa | Director of the Company since: | 2011 | ||||||||||||||
Director of West Bank Since: | 2011 | |||||||||||||||
2021 Committee: | Compensation | |||||||||||||||
*Mr. Gaer is the Chief Operating Officer and General Counsel for R&R Realty Group, Iowa’s largest commercial real estate development, management and | ||||||||||||||||
*Mr. Gaer was the Mayor of the City of West Des Moines, Iowa, | ||||||||||||||||
Michael J. Gerdin | Age: | 52 | ||||||||||||
North Liberty, Iowa | Director of the Company Since: | 2013 | ||||||||||||
Director of West Bank Since: | 2013 | |||||||||||||
2021 Committee: | Compensation | |||||||||||||
*Mr. Gerdin is the Chairman and Chief Executive Officer and a director of Heartland Express, Inc., a publicly traded short-to-medium haul truckload carrier with corporate headquarters in North Liberty, Iowa. | ||||||||||||||
*We consider Mr. Gerdin to be a qualified candidate for service on the Board and committee on which he serves because of his extensive experience as the head of a public company and his familiarity with the eastern Iowa business community. |
Douglas R. Gulling | Age: | 68 | ||||||||||||
Urbandale, Iowa | Director of the Company Since: | 2022 | ||||||||||||
Director of West Bank Since: | 2005 | |||||||||||||
2021 Committee: | — | |||||||||||||
*Mr. Gulling is the retired Chief Financial Officer, Executive Vice President and Treasurer of the Company. His retirement was effective December 31, 2021. In 2022, Mr. Gulling remains a non-executive employee of West Bank. | ||||||||||||||
*We consider Mr. Gulling to be a qualified candidate for service on the Board and committee on which he will serve because of his experience as the retired Chief Financial Officer and Executive Vice President of the Company and his extensive experience in banking. Mr. Gulling began serving on the Risk Management and Information Technology Committee upon his appointment to the Board in January 2022. Mr. Gulling is a Certified Public Accountant (inactive). |
Sean P. McMurray | Age: | 54 | ||||||||||||
Clive, Iowa | Director of the Company Since: | 2013 | ||||||||||||
Director of West Bank Since: | 2013 | |||||||||||||
2021 Committees: | · Compensation · Risk Management and Information Technology | |||||||||||||
*Mr. McMurray is the Chief Technology Officer - Emeritus of Businessolver, Inc., a position he has held since 2017. Businessolver, Inc. is a human resources benefits administration technology company that he helped found in 1998. | ||||||||||||||
*Mr. McMurray was the Chief Executive Officer of AgSolver, Inc., a technology company, from May 2013 until October 2017. | ||||||||||||||
*Mr. McMurray founded DataVision Resources and served as its Chief Executive Officer for 15 years until DataVision Resources was acquired by Equifax, Inc. in 2011. He served as a Senior Vice President at Equifax, Inc. until May 2013. | ||||||||||||||
*Mr. McMurray helped to build and design the business platforms for Businessolver, Inc. and AgSolver, Inc. | ||||||||||||||
*We consider Mr. McMurray to be a qualified candidate for service on the Board and committees on which he serves because of his extensive knowledge and experience as an information technology expert in a wide array of service industries. |
George D. Milligan | Age: | 65 | ||||||||||||
Des Moines, Iowa | Director of the Company Since: | 2005 | ||||||||||||
Director of West Bank Since: | 1994 | |||||||||||||
2021 Committee: | Nominating and Corporate Governance | |||||||||||||
*Mr. Milligan is the President of The Graham Group, Inc., a Des Moines, Iowa-based real estate development and investment company. | ||||||||||||||
*Mr. Milligan is a board member and member of the audit committee, executive committee, nominating and governance committee and investment committee of the public company United Fire Group, Inc. of Cedar Rapids, Iowa, a property and casualty insurance company. | ||||||||||||||
*We consider Mr. Milligan to be a qualified candidate for service on the Board and committee on which he serves because of his extensive knowledge of commercial real estate financing and underwriting. |
David D. Nelson | Age: | 61 | ||||||||||||
West Des Moines, Iowa | Director of the Company Since: | 2010 | ||||||||||||
Director of West Bank Since: | 2010 | |||||||||||||
2021 Committee: | — | |||||||||||||
*Mr. Nelson is the Chief Executive Officer and President of the Company and Chair and Chief Executive Officer of West Bank. | ||||||||||||||
*Prior to joining the Company on April 1, 2010, Mr. Nelson was the President of Southeast Minnesota Business Banking and President of Wells Fargo Bank Rochester in Rochester, Minnesota. He has more than 35 years of experience in commercial banking. | ||||||||||||||
*We consider Mr. Nelson to be a qualified candidate for service on the Board because of his experience as the Chief Executive Officer and President of the Company, his extensive experience in banking and his strong backgrounds in customer relationship building, credit and leadership development. |
James W. Noyce | Age: | 66 | ||||||||||||
West Des Moines, Iowa | Director of the Company Since: | 2009 | ||||||||||||
Director of West Bank Since: | 2009 | |||||||||||||
2021 Committees: | · Audit · Nominating and Corporate Governance | |||||||||||||
*Mr. Noyce has been the Chair of the Company since April 2018 and was previously Vice Chairman from April 2017 to April 2018. | ||||||||||||||
*Mr. Noyce has over 40 years of experience in the financial services industry and previously served as the Chief Executive Officer of FBL Financial Group, Inc., a publicly traded financial services company, and Farm Bureau Financial Services Companies from January 2007 through his retirement in April 2009, and Chief Financial Officer of these entities from January 1996 through December 2006. Prior to that, Mr. Noyce held various positions with FBL Financial Group, Inc. and Farm Bureau Financial Services Companies, including Controller and Vice President. He served on the Advisory Committee to Farm Bureau Bank for approximately seven years until May 2009. | ||||||||||||||
*Mr. Noyce is the chairman of the public company United Fire Group, Inc. of Cedar Rapids, Iowa, a property and casualty insurance company. He also serves as a member of the audit, executive, compensation and nominating and governance committees. | ||||||||||||||
*Mr. Noyce is an audit committee financial expert and served as Chair of the Audit Committee from April 2010 until April 2018. Mr. Noyce is a Certified Public Accountant (inactive), a Fellow of the Casualty Actuarial Society and an Associate of the Society of Actuaries. | ||||||||||||||
*We consider Mr. Noyce to be a qualified candidate for service on the Board and committees on which he serves because of his knowledge and experience with public companies, his extensive financial services industry experience and his education and training as an accountant. |
Rosemary Parson | Age: | 64 | ||||||||||||
Urbandale, Iowa | Director of the Company Since: | — | ||||||||||||
Director of West Bank Since: | — | |||||||||||||
2021 Committee: | — | |||||||||||||
*Ms. Parson has been the Senior Vice President of Policy Administration and Community Relations at EquiTrust Life Insurance Company since January 2014 and has been a vice president since 2003. As a charter member of the organization, Ms. Parson established business structures and operational practices. As the leader of administration, she oversees agency, new business, in force claims payout and call center administration. | ||||||||||||||
*Ms. Parson serves on the board of the Community Foundation of Greater Des Moines. | ||||||||||||||
*We consider Ms. Parson to be a qualified candidate for service on the Board and the committees on which she will serve because of her extensive experience as an executive leader in business operations in the financial services industry. Ms. Parson is expected to serve on the Risk Management and Information Technology Committee, as well as the Audit Committee upon her election to the Board. |
Steven T. Schuler | Age: | 70 | ||||||||||||
Urbandale, Iowa | Director of the Company Since: | 2018 | ||||||||||||
Director of West Bank Since: | 2018 | |||||||||||||
2021 Committees: | · Audit · Compensation | |||||||||||||
*Mr. Schuler was an executive officer of the Federal Home Loan Bank of Des Moines (the “FHLB”) from September 2006 through his retirement in January 2017. Mr. Schuler served as Executive Vice President and Chief Financial Officer of the FHLB from September 2006 until June 2015; Executive Vice President, Chief Financial Officer and Chief Operations Officer from June 2015 until June 2016; and Executive Vice President and Chief Operations Officer from June 2016 through his retirement in January 2017. Mr. Schuler had management responsibility for accounting and financial reporting, planning and budgeting, treasury and capital markets, information technology, facilities administration and business process management. Mr. Schuler was an independent contractor from January 2017 to December 2017. | ||||||||||||||
*Prior to joining the FHLB, Mr. Schuler served in various accounting and financial management positions in the commercial banking and wireless technology industries. From 2001 to 2006, Mr. Schuler served as Chief Financial Officer, Treasurer and Secretary for Iowa Wireless Services, LLC. Mr. Schuler also previously served in various capacities, including Senior Vice President, Chief Financial Officer, Secretary and Treasurer with Brenton Banks, Inc., a publicly traded regional commercial banking company that was sold to Wells Fargo in 2000. | ||||||||||||||
*Mr. Schuler is an audit committee financial expert and serves as Chair of the Audit Committee. Mr. Schuler is a Certified Public Accountant (inactive). | ||||||||||||||
*We consider Mr. Schuler to be a qualified candidate for service on the Board and committees on which he serves because of his extensive experience with public companies, his knowledge of the financial services industry and his education and training as an accountant. |
Therese M. Vaughan | Age: | 65 | ||||||||||||
Des Moines, Iowa | Director of the Company Since: | 2019 | ||||||||||||
Director of West Bank Since: | 2019 | |||||||||||||
2021 Committees: | · Audit · Nominating and Corporate Governance | |||||||||||||
*Dr. Vaughan is the Professional Director of the Vaughan Institute of Risk Management at the University of Iowa’s Tippie College of Business since September 1, 2021. | ||||||||||||||
*Dr. Vaughan was an Executive in Residence at Drake University until August 2021. She was the Robb B. Kelley Visiting Distinguished Professor of Insurance and Actuarial Science at Drake University from August 2017 to August 2019. From June 2014 to June 2017, Dr. Vaughan served as the Interim Dean and then the Dean of Drake’s College of Business and Public Administration. | ||||||||||||||
*Dr. Vaughan is a leading expert in insurance regulation, having served as Chief Executive Officer of the National Association of Insurance Commissioners from February 2009 to November 2012 and as Commissioner of the Iowa Insurance Division, directing all insurance business transacted in the State of Iowa, from August 1994 to December 2004. | ||||||||||||||
*Dr. Vaughan is an Associate of the Society of Actuaries, a Chartered Property Casualty Underwriter and an Associate of the Casualty Actuarial Society. | ||||||||||||||
*Dr. Vaughan has served on the boards of directors of Verisk Analytics, Inc., a data analytics provider and public company, since February 2013, and Wellmark Blue Cross and Blue Shield since May 2013. Dr. Vaughan serves on the compensation, executive and nominating and governance committees for Verisk Analytics, Inc. and on the audit and compensation committees of Wellmark Blue Cross and Blue Shield. Dr. Vaughan also serves on the board of directors of American International Group, Inc., a public company that is a global organization, and currently serves on the compensation and management resources committee, as well as the risk and capital committee. | ||||||||||||||
*Dr. Vaughan has previously served on the boards of directors of Validus Holdings, Ltd., an insurance company and public company, Principal Financial Group, Inc., an investment management company and public company, and Endurance Specialty Holdings Ltd., a holding company for insurance companies and a public company. | ||||||||||||||
*Dr. Vaughan is an audit committee financial expert. | ||||||||||||||
*We consider Dr. Vaughan to be a qualified candidate for service on the Board and committees on which she serves because of her extensive experience with public companies and her leadership in the financial services industry. |
Philip Jason Worth | Age: | 50 | ||||||||||||
West Des Moines, Iowa | Director of the Company Since: | 2013 | ||||||||||||
Director of West Bank Since: | 2011 | |||||||||||||
2021 Committee: | — | |||||||||||||
*Mr. Worth is the President of Gilcrest/Jewett Lumber Company, a position he has held since January 1, 2022. He previously served as General Manager. Gilcrest/Jewett Lumber Company supplies building materials to general contractors and homeowners in central and eastern Iowa and employs over 300 people at four retail locations. The company focuses on building strong, lasting relationships, extending and managing its own credit and staying active in the communities it serves. | ||||||||||||||
*We consider Mr. Worth to be a qualified candidate for service on the Board because of his extensive knowledge of the real estate construction industry in the Company’s Iowa markets. |
Donovan | Elming | Gaer | Gerdin | Gulling | McMurray | Milligan | Nelson | Noyce | Parson | Schuler | Vaughan | Worth | |||||||||||||||||||||||||||||
Business expertise | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||
Banking/financial services experience | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||
Financial expertise | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||||
Community presence | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||
Risk management | ü | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||
Information technology | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||
Public company executive or board experience | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||||||||||
Construction/commercial real estate expertise | ü | ü | ü | ||||||||||||||||||||||||||||||||||||||
Government/public policy | ü | ü | |||||||||||||||||||||||||||||||||||||||
Regulatory | ü | ü | ü | ü | |||||||||||||||||||||||||||||||||||||
Academia | ü |
Board Diversity Matrix as of December 31, 2021 | ||||||||||||||
Total Number of Directors | 11 | |||||||||||||
Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||
Part I: Gender Identity | ||||||||||||||
Directors | 2 | 9 | — | — | ||||||||||
Park II: Demographic Background | ||||||||||||||
African American or Black | — | — | — | — | ||||||||||
Alaskan Native or Native American | — | — | — | — | ||||||||||
Asian | — | — | — | — | ||||||||||
Hispanic or Latinx | — | — | — | — | ||||||||||
Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||
White | 2 | 9 | — | — | ||||||||||
Two or More Races or Ethnicities | — | — | — | — | ||||||||||
LGBTQ+ | — | |||||||||||||
Did Not Disclose Demographic Background | — |
l Board independence................... | 11 of our 13 directors will be independent, if all nominees are elected. | ||||
l Board performance..................... | The Board and committees annually assess their performance through self-evaluation. | ||||
l Board committees....................... | Only independent directors serve on committees of the Company Board, with the exception of Mr. Gulling who serves on the Risk Management and Information Technology Committee. | ||||
l Leadership structure................... | The positions of Chair and Chief Executive Officer are separately held. | ||||
l Risk oversight............................. | The Board is responsible for monitoring key risks and oversees management. | ||||
l Open communication................. | We encourage open communication among our stockholders, directors and management. | ||||
l Stock ownership......................... | Directors and the named executive officers are required to hold Company stock. | ||||
l Accountability to stockholders... | We elect all directors annually. | ||||
l Succession planning................... | The Board actively plans for our director and management succession. |
Risk | ||||||||
Nominating | Management | |||||||
and Corporate | and Information | |||||||
Audit | Compensation | Governance | Technology | |||||
Directors | Committee | Committee | Committee | Committee | ||||
Frank W. Berlin | Chair | |||||||
Joyce A. Chapman | u | |||||||
Steven K. Gaer | u | |||||||
Michael J. Gerdin | u | |||||||
Kaye R. Lozier | u | |||||||
Sean P. McMurray | Chair | |||||||
David R. Milligan | u | |||||||
George D. Milligan | Chair | |||||||
James W. Noyce | Chair | u | ||||||
Robert G. Pulver | u | |||||||
Lou Ann Sandburg | u | |||||||
Steven T. Schuler | u | |||||||
Philip Jason Worth | u | |||||||
Meetings held during 2017 | 4 | 4 | 5 | 4 |
Audit Committee | Members | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
•Four meetings held in 2021.
2022 Proxy Statement | 15
The following criteria will be considered when evaluating nominee candidates, including candidates recommended by stockholders:
2022 Proxy Statement | 16
Code of Ethics We have a Code of Conduct in place that applies to all of our directors, officers and employees. The Code of Conduct sets forth the standard of ethics that we expect all of our directors, officers and employees to follow, including our Chief Executive Officer Environmental Sustainability and Social Responsibility Efforts As investor interest in environmental, social and governance (“ESG”) matters grows, the Company is responding by increasing communication of such matters in its disclosures. The Company has always been committed to maintaining the highest standards of business conduct and corporate governance, which we believe are essential to running our business effectively, serving our customers and communities, creating long-term value for our stockholders and maintaining our integrity in the marketplace. We monitor developments in the ESG area and review our policies, procedures and business practices in light of such developments. We continue to develop appropriate responses to these evolving expectations. The Board is committed to overseeing our corporate social responsibility efforts. While ESG matters fall under the purview of each of the Board committees as it relates to their individual oversight responsibilities, in 2021 the Nominating and Corporate Governance committee undertook formal responsibility for providing oversight of the Company’s commitment to ESG matters, including providing overall strategic direction on corporate responsibility and reporting. Setting the tone at the top with our Board and executive management, our Board and its committees have a key role in the oversight of our culture by holding executive management accountable for maintaining high ethical, legal and moral standards. We recognize that understanding our efforts to improve ESG practices is increasingly important to our stockholders, customers and employees and have included some highlights below to share our ongoing commitments in these areas. 2022 Proxy Statement | 17 Financial Inclusion West Bank has received the highest available rating, “Outstanding,” during its most recent Community Reinvestment Act (“CRA”) examination by the Federal Deposit Insurance Corporation (“FDIC”). The regulatory examination reviews how we meet the credit needs of our communities, including low and moderate income (“LMI”) neighborhoods, CRA qualified lending, corporate giving and investing and employee volunteering. West Bank’s community development lending to developers, nonprofit entities and municipalities benefits communities through services to individuals, job creation, stabilization, economic development and affordable housing. West Bank has a lending and deposit portfolio that supports its non-profit customers in their mission-driven work to meet community needs. In 2021, West Bank made a $350,000 contribution to the Historic West Des Moines Pilot Housing Program. This program will assist property owners within the Historic West Des Moines area, also known as Valley Junction where West Bank was founded in 1893, with residential property improvement projects. Since 2009, West Bank has made investments in low-income housing tax credit funds through the Midwest Housing Equity Group totaling over $10.4 million. Midwest Housing Equity Group is a non-profit tax credit syndicator, creating affordable housing units in the central United States, including Iowa and Minnesota. West Bank has also invested in and funded loans related to a new markets tax credit project totaling approximately $28.9 million. Our involvement assisted a local non-profit community development corporation to participate in commercial redevelopment activities in one of our primary markets. West Bank is a SBA Preferred Lender under the federal government’s Small Business Administration program. As a SBA Preferred Lender, we were able to participate in the Paycheck Protection Program (“PPP”), which was essential to support businesses in our markets during the COVID-19 pandemic. In 2020 and 2021, we processed nearly 1,500 PPP loans, providing community businesses with more than $300 million in PPP assistance. West Bank provides financial literacy through its “Bank Notes” blog and in-person training sessions coordinated with various organizations, including Junior Achievement of Central Iowa’s personal finance simulation and the Jordan Scholars program which provides high school juniors with annual introduction to personal financial responsibility and careers in banking. Human Capital Management We believe that the success of our business is largely due to the quality of our employees, the development of each employee's full potential and the Company's ability to provide timely and satisfying rewards. We encourage and support the development of our employees and, whenever possible, strive to fill vacancies with internal candidates. We invest in education and development programs, including tuition reimbursement for courses and degree programs and fees paid for certifications. We encourage employees to seek educational opportunities for both industry knowledge and professional development. We believe that diversity encourages innovation and inclusion, and our team’s differences give us a competitive advantage. Our goal is to foster a culture in which those differences are valued and respected. Our team is made up of 167 full-time employees and 14 part-time employees. We are proud of our culturally and gender diverse workforce, with approximately 15 percent identifying as persons of color and approximately 57 percent as women. We have a number of multi-lingual employees at West Bank and strive to have at least one bilingual team member in all Central Iowa locations in customer-facing or customer service roles. We continue to invest in initiatives aimed at the growth and readiness of our workforce, including our West Bank Women’s Impact Network (“WIN”). Since 2014, WIN connects and expands relationships among women at West Bank with women in our communities and our customers. The network builds a system of sponsors and mentors to provide more opportunities for women in leadership at West Bank and furthers our impact on the community through support and sponsorship of women’s leadership initiatives. 20 percent of West Bank’s current executive management team is made up of women, and 49 percent of officers and department managers are women. Currently, women comprise 15 percent of the directors on our Board. Another woman has been nominated to the Board, which will increase that percentage to 23 percent if she is elected at the Annual Meeting. 2022 Proxy Statement | 18 As part of our compensation philosophy, we believe that we must offer and maintain market competitive compensation and benefit programs for our employees in order to attract and retain talent. The goal of our compensation program is to create superior long-term value for our stockholders by attracting, motivating and retaining outstanding employees who serve our customers while generating financial performance that is consistently better than our peers. Our business model allows us to operate with fewer employees than the typical commercial bank of our size because we emphasize teamwork, sound practices and a focus on business banking. Because we have fewer people, we need to have the right people and ensure that we offer what we consider to be above average pay in exchange for above average performance. Our employees are provided a formal performance evaluation annually that includes discussion of the opportunity for advancement and career development. In addition to competitive base wages, additional programs include annual bonus opportunities, Company-matched 401(k) and discretionary 401(k) contributions, stock award opportunities, educational expense reimbursement, insurance benefits, paid time off, family leave and employee assistance programs. Our best-in-class health care plans, including medical, dental, vision, short-term and long-term disability and life insurance, reflect a sincere investment in our colleagues’ physical, emotional and financial well-being. Offering premium coverage through our health insurance provider, our employees are afforded a large network of doctors and the Company pays 75 percent of monthly medical premiums for employees enrolled. Our approach also promotes longevity in our workforce. The average tenure of our employees is over nine years. 64 employees (36 percent) have been with West Bank for over ten years and 41 employees (23 percent) for over 15 years. Non-teller turnover was approximately six percent in 2021. We conduct periodic company-wide employee engagement surveys to assess employee satisfaction and engagement. Succession planning and talent development are important at all levels within our organization. The Board oversees executive management’s succession plan for our named executive officers. The Board’s succession planning activities are ongoing and strategic. In addition, the CEO annually provides the Board with his assessment of senior leaders and their potential to succeed at key senior management positions. Environmental Sustainability The Board carefully considers corporate social responsibility when it works with management to determine the Company’s strategic priorities and plans to achieve such priorities. We strive to be a good corporate citizen by conducting business in an environmentally responsible manner, by operating as an employer that is committed to our vibrant and diverse workforce and by maintaining strong ties to the communities in which our customers live, work and do business. We currently have four new bank building projects in various stages of planning and development. When building bank offices, we strive to do so in an environmentally responsible manner and with an effort to use energy efficiently, including installation of geothermal heating and cooling. We also utilize audio and video conference technologies to allow our branch employees in Iowa and Minnesota, as well as our Board members, to “meet” without driving between locations. We are implementing several paperless technologies, including but not limited to, notice and access of this proxy statement and electronic options for document signings and imaging. We also host an annual community shred day for confidential documents. Our business operations continue to align with customer trends such as increased mobile banking and a desire for companies to have a smaller physical environmental footprint. Our customers take advantage of our online banking platform, with 62 percent of checking accounts and 42 percent of savings accounts receiving paperless statements. Business Ethics The Company’s Code of Conduct including business ethics, conflicts of interest, anti-bribery provisions, a confidential reporting system with protection for whistleblowers and other matters is more fully discussed in this proxy statement. All officers, directors and employees are required to certify that they have reviewed the Code of Conduct each year. The Company has a comprehensive information security risk management program to protect customer and Company information. To date, the Company has not experienced a significant information system data breach requiring notification to regulatory agencies and customers. We utilize data security programs and a privacy policy under which we do not sell or share customer information. We employ an anti-money laundering program and a customer due diligence program that comply with federal banking regulations. 2022 Proxy Statement | 19 Strengthening Communities Sponsorships, donations and grants of more than $1 million were facilitated through West Bank and the West Bancorporation Foundation, Inc. (the “Foundation”) in 2021. The Foundation is the charitable foundation affiliate of the Company. We serve the communities in which we operate through economic development activities, charitable giving and volunteerism by our employees. The Foundation awards grants to organizations focused on human services, arts and culture and education. We encourage and support volunteer efforts of our employees who volunteer, serve on boards and provide educational and networking opportunities. In 2021, our employees touched more than 180 not-for-profit organizations and provided approximately 5,600 hours of community service. This commitment and investment in the communities we serve are foundational to our success. Board Leadership Structure The Board believes that having a non-chief executive officer director serve as 2022 Proxy Statement | 20 Board’s Role in Risk Oversight
2022 Proxy Statement | 21 Nominating and Corporate Governance Committee Report During The Nominating and Corporate Governance Committee also evaluated the qualifications and performance of each of the current members of the Board. In its evaluation, the Nominating and Corporate Governance Committee compared each of the current directors to the qualifications and characteristics of a director set forth in the Nominating and Corporate Governance Committee’s charter. The Nominating and Corporate Governance Committee then polled each director eligible to stand for re-election to determine his or her willingness to stand for re-election and determined that each director Based on the foregoing, the Nominating and Corporate Governance Committee recommended to the Board that Patrick J. Donovan, Lisa J. Elming, Steven K. Gaer, Michael J. Gerdin, these recommendations. During The undersigned members of the Nominating and Corporate Governance Committee have submitted this report. George D. Milligan, Chair 2022 Proxy Statement | 22 Director Compensation The following table sets forth the compensation structure for the nonemployee directors which the Board approved in April 2020.
At the annual organizational meeting of the Board on April None of the directors receive any compensation or other payment in connection with his or her service as a director other than compensation received by the Company and West Bank as set forth below. The following table sets forth all compensation earned or paid to our nonemployee directors for the fiscal year ended December 31,
(1)The amounts set forth in the “Stock Awards” column reflect the grant date fair value of restricted stock units awarded on April 29, 2021, valued in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. For the material assumptions used in calculating grant date fair value, see the discussion of equity awards in Note 13 of the Notes to the Company’s Consolidated Financial Statements for the year ended December 31, 2021. Each nonemployee director was granted a restricted stock unit award for 900 shares of the Company’s common stock with a vesting date of April 28, 2022. These were the only outstanding nonemployee director equity awards as of December 31, 2021. (2) Mr. D. Milligan and Ms. Sandburg served on the Board through the date of the Company’s 2021 annual meeting of stockholders. 2022 Proxy Statement | 23
Executive Officers of the Company The executive officers of the Company are appointed on an annual basis by the The
2022 Proxy Statement | 24 Security Ownership of Certain Beneficial Owners and Executive Officers The following table
*Indicates less than 1 percent ownership of outstanding shares. (1)Shares “beneficially owned” include shares owned by or for, among others, the spouse and/or minor children of the named individual and any other relative who has the same home address as such individual, as well as other shares with respect to which the named individual has or shares voting or investment power or has the right to acquire such powers within 60 days. Beneficial ownership may be disclaimed as to certain of the shares. (2)Except as otherwise indicated in the following notes, each named individual owns his or her shares directly, or indirectly through a self-directed IRA or the Company’s 401(k) retirement plan and has sole investment and voting power with respect to such shares. (3)Includes 15,304 shares underlying restricted stock unit awards that are currently unvested but will vest within 60 days of February 18, 2022. (4)Includes 57,235 shares held in his spouse’s trust for which he has sole voting and investment power. (5)Includes shares held in his spouse’s name. Mr. Winterbottom disclaims any beneficial ownership of 6,607 shares held in his spouse’s name. Other Beneficial Owners The following table sets forth certain information on each person known to the Company to be the beneficial owner of more than five percent of the Company’s common stock. The ownership information is as of February 18, 2022.
(1)Information based solely on a Schedule 13G filed on February (2) 2022 Proxy Statement | 25
Section Section 16(a) of the Exchange Act requires that the Company’s directors and executive officers and persons who own more than 10 percent of the Company’s common stock file initial reports of ownership and reports of changes of ownership with the SEC and Nasdaq. The Company does not know of any arrangements or pledges that would result in a future change in control of the Company. EXECUTIVE COMPENSATION Compensation Discussion and Analysis This Compensation Discussion and Analysis (“CD&A”) describes and explains Our NEOs for 2021, which consist of our principal executive officer, principal financial officer and our three other most highly compensated executive officers, are:
2022 Management Changes On January 1, 2022, Jane M. Funk succeeded Mr. Gulling as Executive Vice President, Treasurer and Chief Financial Officer of the Company upon his retirement from that position. Ms. Funk also succeeded Mr. Gulling as Executive Vice President and Chief Financial Officer of West Bank on October 1, 2021, upon Mr. Gulling’s retirement from that position and was appointed to 2022 Proxy Statement | 26 Business Overview The Company, through West Bank, provides lending, deposit and trust services for businesses and individuals. We offer competitive commercial and personal banking products and are committed to providing superior customer Our 2021 Performance We had another record year of performance in 2021 as we continued to navigate the impacts of the COVID-19 pandemic. We have delivered uninterrupted critical banking services to our customers and maintained operations to keep our customers and employees safe. Our strong community support continues through grants, donations and investments.Financial •Diluted earnings per share of $2.95 for •Improved efficiency ratio of 41.0 percent compared to 42.0 percent for 2020. •Improved Texas ratio of 3.1 percent at December 31, 2021, compared to 6.4 percent at December 31, 2020. •Total loans increased $334 million or 15.9 percent, excluding Paycheck Protection Program loans. •Dividends increased to $0.94 per share for 2021, compared to $0.84 per share for 2020. Stockholder Engagement In 2019, we began to actively engage with our stockholders on an annual basis to solicit feedback on our executive compensation program. Although over 91 percent of our stockholders voted in favor of our executive compensation program for 2020 at our 2021 annual meeting, the Company has continued this outreach. In 2021, we reached out to the Company’s largest institutional stockholders which own or control approximately 35 percent of our outstanding shares. We had conversations with one institution, and an additional two institutions responded but did not request a conversation due to their satisfaction with our compensation philosophy and program at this time. A group consisting of the Chair of the Board, Chair of the Compensation Committee and Director of Human Resources participated in the 2022 Proxy Statement | 27 Overview and The Company and West Bank share an executive management team. The members of the executive management team, consisting of our The goal of our compensation program is to create superior long-term value for our stockholders by attracting, motivating and retaining outstanding employees who serve our customers while generating financial performance that is consistently better than that of our peers. •Pay for performance; •Align executives’ financial interests with those of our stockholders; •Support the Company’s and West Bank’s values, strategy and development of employees; •Foster a team approach among top executives; •Attract and retain leaders capable of delivering •Provide competitive cash and total compensation opportunities and •Balance the mix of short-term and long-term incentives; and •Adhere to the highest legal and ethical standards. Our executive compensation program is designed to attract, retain and motivate qualified and talented executives to achieve our business goals and to reward them for strong short- and long-term performance. In particular, our Compensation Committee is mindful that our “pay-for-performance” philosophy must align the interests of our executives with those of our stockholders in order to drive long-term, sustainable stockholder value growth. A significant amount of NEO compensation is considered at-risk, made up of annual cash and long-term equity incentive opportunities. The primary elements of our executive compensation program in 2021 consisted of base salary, annual cash incentive opportunities and long-term equity opportunities. The purpose and key features of each element is described below. Base Salary •Base salaries are set to be competitive within our industry and are important in attracting talented executives. •Base salaries are adjusted annually, effective January 1, but can be adjusted mid-year when there are material changes, such as a change in an executive officer’s position, responsibilities, demonstrated performance, or relevant market data. •Base salaries for our NEOs are as follows:
(1) Mr. Gulling retired as the CFO of the Company effective December 31, 2021. (2) Mr. Peters became an executive officer of the Company in April 2021. 2022 Proxy Statement | 28 Annual Cash Incentive Opportunities •Annual cash incentive opportunities are intended to motivate and reward executives for the achievement of certain financial goals in comparison to internal and external standards. •Annual cash incentive opportunities are based on a percentage of base salary and that percentage is based on: (1) the Company’s net profit; and (2) the Company’s performance relative to our peer group based on return on average equity, efficiency ratio and Texas ratio, equally weighted, according to the following schedule. The performance targets, peer rankings and percent of salaries remains the same as the prior year.
•If our ranking in the peer group falls between Threshold and Maximum, our NEOs will be eligible for a proportional cash bonus based upon linear interpolation. •Prior to 2021, the Texas ratio performance metric was measured as of December 31 of the respective year. In 2021, the Texas ratio performance metric is measured as the average of the four fiscal quarter-ending Texas ratios of the Company, compared to the average of the four fiscal quarter-ending Texas ratios of the peer group. Long-Term Equity Incentive Opportunities •Long-term equity awards incentivize executives to deliver long-term value, while also providing a retention vehicle for our executives. •Prior to 2021, we granted executives only time-based restricted stock units (“RSUs”) that vested ratably over five years. •Beginning with the 2021 grants, 50 percent of each NEO’s RSU award is subject to performance-based vesting and 50 percent is subject to time-based vesting. Following the date of vesting, 50 percent of the covered shares will be subject to a one-year holding period requirement. The Compensation Committee expects future awards to have a similar structure. •The 2021 time-based RSUs vest ratably over five years. The 2021 performance-based RSUs cliff vest at the end of a three-year performance period based on the Company’s relative performance to the identified peer group with respect to its return on average equity, efficiency ratio and Texas ratio, equally weighted. •The total number of RSUs granted to Messrs. Nelson, Gulling, Olafson and Winterbottom in 2021 is 15,000 each, the same as the prior year. In each case, 7,500 are time-based RSUs and 7,500 are performance-based RSUs. •The total number of RSUs granted to Mr. Peters in 2021 prior to becoming an NEO is 10,000, vesting ratably over five years. Pay Mix Consistent with our philosophy of aligning executive pay with the short- and long-term performance of the Company, the elements of our executive compensation program evolve and are adjusted over time to support the business goals of the Company and West Bank, and to align the interests of executive management with the interests of our stockholders. To achieve these objectives, the Compensation Committee utilized the primary compensation elements — base salary, annual cash incentive opportunities and long-term equity incentive opportunities — to provide balanced pay packages to our executives. As demonstrated in the following chart, we compensated our NEOs in 2021 with a mix of fixed and variable short- and long-term pay elements, with a significant amount of compensation performance based and at-risk. 2022 Proxy Statement | 29 Our Compensation Philosophy and Best Practices Our pay-for-performance philosophy and compensation practices provide an appropriate risk-managed framework in which our executives are encouraged to achieve our strategic goals without excessive risk taking in their business decisions. We adhere to several best practices for executive compensation, including:
Put simply, our human resource philosophy is to have fewer people than our peers but to pay our people well. Our business model allows us to operate with fewer employees than the typical commercial bank of our size because we emphasize teamwork and sound practices and focus on business banking. Because we have fewer people, we need to have the right people and ensure that we offer what we consider to be above average pay in exchange for above average performance. In addition to attracting and retaining what we believe is superior talent, our approach also produces longevity in our workforce. The average tenure of our employees is over nine years. This philosophy extends throughout the Company and includes our NEOs. The Company currently has five executive officers. To succeed with an atypically small team, our CEO leads and fosters a team approach with the non-CEO members of our executive management team who bring a diverse array of experience, expertise and backgrounds. Because of this team strategy, compensation for each of our non-CEO NEOs is historically similar. This approach has consistently proven to produce a winning teamwork structure for the Company and our stockholders. We also believe in evaluating performance relative to our peer group and implementing performance considerations into our compensation decisions. Rather than setting absolute goals that can be manipulated and may lead to inappropriate risk taking, we emphasize sound behaviors that will lead to long-term success that is better than our peers. For example, we encourage growth by requiring that our bankers focus on relationship building by continuously setting appointments for sales calls and staying in regular contact with our customers. This has proven successful, as over the last decade, our loan portfolio has grown by approximately $1.6 billion, or nearly 19 percent on an average annual basis. None of this growth comes from business acquisitions. As we strive to grow, we avoid setting absolute goals of attaining a certain size by a certain time. Instead, we focus on relative metrics such as credit quality, which we believe is more important than the growth of the loan portfolio. We also look at return on average equity and efficiency ratio metrics, each on a relative basis to those of our peer group. We believe that our emphasis on attracting, retaining and appropriately motivating a well-paid team of superior talent, facilitating strong working relationships in that team and evaluating performance appropriately has produced our consistently strong financial results. The Compensation Committee remains committed to continuing our practice of incentivizing and encouraging the pursuit of excellence through our executive compensation program. 2022 Proxy Statement | 30 Our Compensation Review Process Role of Compensation Committee Our Compensation Committee is composed entirely of independent directors. It is fully responsible for our executive compensation program and reviews the program on at least an annual basis. The Compensation Committee has broad discretion The Compensation Committee’s primary considerations •Key financial measurements; •Strategic initiatives related to our business; •Compensation of peer group •Proper risk management. Role of Executive Officers in Compensation Decisions As requested by the Compensation Committee, some members of management support the Compensation Committee’s review and consideration of executive compensation by providing information for the Compensation Committee’s review. In particular, the CEO provides recommendations with respect to the other NEOs. Such recommendations from the CEO address, among other items, financial results and analysis, performance evaluations, compensation provided to our NEOs (other than the CEO), technical and regulatory considerations and input on program design and possible modifications. The Compensation Committee has final discretion over all compensation decisions regarding the CEO and each of the other NEOs. The Compensation Committee discusses the CEO’s recommendations and accepts or adjusts them based upon its own assessment of Company strategic goals, executive responsibilities, internal pay equity and its independent review of market data. The CEO is not involved in discussions or determinations relating to his own compensation, and the executive officers are not present during the Compensation Committee’s final discussion and determination of the types and amounts of compensation to be paid. Role of Compensation Consultant Under its charter, the Compensation Committee has the sole authority to select, retain, The Compensation Committee engaged McLagan, a unit of Aon PLC, as its independent compensation consultant in 2021. McLagan reports directly to the Chair of the Compensation Committee and The Compensation Committee reviewed •Make recommendations for the composition of the Company’s peer •Provide a study of director and executive officer compensation; •Provide input on marketplace trends and best practices relating to •Provide analysis and 2022 Proxy Statement | 31 Use of Peer Group Market pay practices are one of many factors we consider in setting executive pay levels and designing compensation programs. For compensation decisions for
Elements of Compensation Our executive compensation program consists of several elements, each with Base Salary We As provided in our 2022 Proxy Statement | 32 Proxy Statement Table of Annual Cash Incentive Annual cash incentive Our executive employment agreements provide for participation in the Company’s annual incentive plan. Thereunder, each NEO is eligible for a bonus as a percentage of his or her annual base salary, based upon the achievement of performance measures described below. Our plan caps maximum bonus opportunities to avoid encouraging excessive risk-taking and to avoid any focus on maximizing short-term results at the expense of long-term soundness. The plan also requires positive Company earnings in order for any bonuses to be paid. The quantitative analysis has two parts: (1)the Company’s net (2)the Company’s performance a.return on average b.efficiency c.Texas ratio. Each ratio is defined in Item Prior to 2021, the Texas ratio performance metric used in the annual cash incentive analysis was measured as of December 31 each year. The Texas ratio measures total nonperforming assets as a percentage of tangible common equity plus the allowance for loan losses. This measurement is as of a point in time. The Compensation Committee evaluated the impact of using this point-in-time measurement in the annual cash incentive analysis and, beginning in 2021, decided to use the average of the four fiscal quarter-ending Texas ratios for calculating this performance metric. As a result, this performance metric is a better representation of credit risk management throughout the year. Based on our ranking among our peers in each of these key schedule, which remains unchanged from the prior year:
Based on September 30, 2021 data, we anticipate that the Company’s financial results for all of 2021 will be at or above the 75th percentile of our peer group for all of 2021 for each of the performance measures except the Texas ratio. These preliminary results of the quantitative portion of the annual incentive bonus determination indicate that our NEOs would be eligible to receive a cash bonus amount equal to 50.12 percent of each NEO’s base salary. The final determination will be made after all peer group financial data is available for analysis. 2022 Proxy Statement | 33 Long-Term Equity compensation is the The employment agreements with our Pursuant to the terms of Prior to In January 2021, Messrs. Nelson, Gulling, Olafson and Winterbottom were each granted 7,500 time-based restricted stock units (“Time RSUs”) and 7,500 performance-based restricted stock units (“Performance RSUs”). Each of the awards will be subject to a The Performance RSUs are scheduled to vest on March 25, 2024, based on the relative financial performance of the Company to the identified peer group during a three-year performance period consisting of the Company’s 2021, 2022 and 2023 fiscal years (the “Performance Period”). The Performance RSUs are subject to three performance targets, each of which is to be weighted equally and averaged by calendar year over the three-year Performance Period (other than the Texas ratio that is averaged over 12 quarters): (i) the Company’s return on average equity, (ii) the Company’s efficiency ratio and (iii) the Company’s Texas ratio. Each of these ratios is compared to those of the companies in the SNL Small Cap US Bank Index (“Performance RSU Peer Group”) as of the grant date. The Performance RSU Peer Group is “frozen” as of the grant date. Companies may drop out (but may not be added) if financial information becomes unavailable prior to the conclusion of the Performance Period. These three measures are commonly utilized by banking organizations as reflective of important aspects of their overall financial performance. For the Performance Period, the maximum number of shares of 7,500 would be issued on March 25, 2024 for each of the participants if the Company achieves the 75th percentile performance on all three performance measures over the Performance Period. Up to one-third of the maximum number of RSUs subject to the award may be earned for achievement of a given performance metric. None of the RSUs subject to a metric will be earned if performance is below Threshold, while approximately 33 percent will be earned for Threshold performance, approximately 67 percent will be earned for Target performance, and 100 percent will be earned for Maximum performance (or above). Performance between the Threshold and Maximum will earn a number of RSUs based on linear interpolation. 2022 Proxy Statement | 34
Upon the conclusion of the Performance Period, the performance of the Company and each member of the Performance RSU Peer Group will be calculated for each of the three metrics identified above, (i) with respect to ROE, as an average of each of the three year-end results; (ii) with respect to Efficiency Ratio, as an average of each of the three year-end results; and (iii) with respect to Texas ratio, as an average of each of the twelve quarterly results. Based upon such calculations, the Company’s percentile relative to the Peer Group will be determined. The Compensation Committee expects future awards to NEOs to have a similar structure. Prior to being named an executive officer of the Company, Mr. Peters was granted 10,000 Time RSUs in January 2021. 2022 Compensation Decisions. In light of the Company’s outstanding performance, including record net income for the seventh consecutive year, a 49.0 percent increase in diluted earnings per share, loan growth (excluding Paycheck Protection Program loans) of 15.9 percent and a total stockholder return of 65.9 percent in 2021, the Compensation Committee decided that, in addition to the 2021 annual cash incentive payments received by our 2022 Proxy Statement | 35 Deferred Compensation Plan Our Employment Agreements Perquisites, Retirement and Other Benefits As a best practice, we have generally avoided the use of perquisites and other types of benefits for Our NEOs are also eligible to All employees of West Bank, including our NEOs, are eligible to receive a discretionary annual holiday bonus paid as a percentage of annual salary. Our NEOs participate in the holiday bonus program on the same terms as our other employees. In 2021, as in prior years, this discretionary bonus was equal to two percent of base salary. 2022 Proxy Statement | 36
Regulatory Considerations As a publicly traded financial institution, the Company must Under In addition to the foregoing, The Compensation Committee believes that 2022 Proxy Statement | 37 Other Compensation and Governance Policies Share Ownership and Retention Guidelines We believe our NEOs and nonemployee directors should have a significant equity interest in the Company. To promote equity ownership and align the interests of our executives and directors with those of our stockholders, we maintain the following share retention and ownership guidelines for our senior officers and directors.
The ownership guidelines are the same for each executive, including the CEO, to reflect the same team approach applicable to other elements of our executive compensation program. Until the stock ownership guideline levels are met, executives and directors are expected to retain at least 50 percent of any applicable shares received (on a net after-tax basis) pursuant to our equity incentive plans. If an officer fails to satisfy the guidelines, 25 percent of such officer’s annual incentive bonus, if any, is paid in shares of Company stock until the ownership guideline is satisfied. A failure to satisfy the guidelines by a director is considered by the Nominating and Corporate Governance Committee when evaluating such director’s qualifications for nomination. These guidelines are subject to periodic review by the Compensation Committee, and compliance is monitored on an annual basis. The guidelines for nonemployee directors include annual cash retainer fees received from both the Company and West Bank. For purposes of compliance with these guidelines, share ownership includes shares owned outright by the individual or his or her immediate family members who share the same household, shares held by the individual in an IRA account, fully vested shares held by the individual under a Company retirement plan and RSUs (both vested and unvested) granted to the individual under any Company equity incentive plan. As of December 31, 2021, all of our NEOs and non-employee directors hold shares in excess of the requirements in the guidelines, except for one nonemployee director and one NEO who both became subject to the retention guidelines in 2021. They are expected to make continuing progress towards compliance with the guidelines. Clawback Policy Effective as of January 27, 2021, the Company maintains a formal clawback policy which provides the Board with the authority to recover certain bonus or other incentive compensation (whether paid in cash or stock) paid to any NEO in appropriate circumstances where there has been a restatement of the Company’s financial statements filed with the SEC. While the Compensation Committee believes its risk assessment procedures are effective, it is prepared to implement any additional steps that may be deemed necessary to fully comply with the rules required to be issued under the Dodd-Frank Act, when and if promulgated. In addition to the formal clawback policy, in the event the Company is required to seek or demand recoupment of any payments made to our NEOs pursuant to law, our employment agreements provide for return of any severance-related payments upon request of the Company. Additionally, all equity awards granted under our 2017 Equity Plan and the 2021 Equity Plan, are subject to cancellation, recoupment, rescission or payback in accordance with applicable law. Insider Trading Policy The Company’s insider trading policy permits open market transactions in Company stock beginning the day after the second full trading day after quarterly earnings have been made public until the 10th day of the third month in the quarter. In addition, our NEOs may purchase Company stock through the 401(k) retirement plan. Changes to purchases under the 401(k) retirement plan may be made only during the period when open market transactions are permitted. 2022 Proxy Statement | 38 Anti-Hedging Policy The Company’s insider trading policy prohibits all employees and directors from entering into any hedging transactions involving the Company’s stock. Anti-Pledging Policy The Company’s insider trading policy prohibits all NEOs and directors from keeping Company stock in a margin account. In addition, NEOs and directors may not pledge Company stock as collateral for a loan. Acceleration of Equity Awards No Tax Gross-Ups Under Section 280G of the Code, an executive may be subject to excise taxes on certain benefits received in relation to a change in control of the Company. While some companies provide excise tax gross-ups to executives, to place the executive in the same tax position as if the excise tax did not apply, we do not believe Our employment agreements with Compensation Committee Report The Compensation Committee hereby states as follows: •It has reviewed and discussed the Compensation Discussion and Analysis section of this proxy statement with management; and •Based on the review and discussion referred to immediately above, it recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement. The undersigned members of the Compensation Committee have submitted this report. Steven K. Gaer, Chair Michael J. Gerdin Sean P. McMurray Steven T. Schuler 2022 Proxy Statement | 39 Summary Compensation Table Compensation earned for services rendered in the year ended December 31,
(1)The amounts set forth in the “Salary” column reflect base salary earned during the year including, if any, deferrals and salary increases. (2)The amounts set forth in the “Bonus” column consist of 1) a holiday bonus equal to two percent of annual salary paid to all employees of West Bank and 2) the one-time qualitative adjustment to the Company’s annual incentive program in 2020. (3)The amounts set forth in the “Stock Awards” column represent the aggregate grant date fair value of Time RSUs and Performance RSUs granted to each of our NEOs in 2019, 2020 and 2021, as applicable, calculated in accordance with FASB ASC Topic 718. The grant date fair value of Time RSUs is determined using the fair value of our common stock on the date of grant, and the grant date fair value of Performance RSUs is calculated based on the fair value of our common stock on the date of grant and probable outcome of the performance measures for (4)The amounts set forth in the “Non-Equity Incentive Plan Compensation” column are shown for the year in which the applicable performance measures were (5)Based upon our results for the fiscal year ended December 31, 2021 and the results of our peers as of September 30, 2021, annual bonuses for 2021 are anticipated to be paid out as shown, which is 83.53 percent of the 60 percent maximum potential amount, resulting in (6)The amounts set forth in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column for Mr. Nelson and Mr. Peters represent above-market interest on amounts deferred under the Deferred Compensation Plan. (7)Consists of contributions made by the Company on behalf all NEOs to the Company’s 401(k) retirement plan and, for Mr. Peters, $91,694 for the reimbursement of relocation expenses with a gross up for applicable taxes. (8)Mr. Peters was not an NEO prior to 2021. 2022 Proxy Statement | 40
Grants of Plan-Based Awards The following table sets forth information concerning grants of plan-based awards made to our
(1) The amounts set forth in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns reflect the threshold, target and maximum payouts for performance under the annual cash incentive plan as described in the CD&A above. The amount earned by each NEO for 2021 performance is included in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.” (2) The amounts set forth in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns with respect to the 2021 Performance RSUs reflect the threshold, target and maximum number of shares of West Bancorporation, Inc. common stock that may be earned by each individual as a result of the 2021 Performance RSUs granted under the 2017 Equity Plan as described in the CD&A above. The actual number of shares of West Bancorporation, Inc. common stock to be delivered as a result of these performance shares will be determined by the performance of the Company during the three-year period from 2021 through 2023. (3) The Time RSUs reflect the grant date fair value of awards granted computed in accordance with FASB ASC Topic 718. (4) The Performance RSUs reflect the grant date fair value of awards computed in accordance with FASB ASC Topic 718 using the maximum level award. Restricted Stock Units In The Performance RSUs are scheduled to vest on March 25, 2024, based on the relative financial performance of the Company to the identified peer group during the 3-year Performance Period. The Performance RSUs are subject to three performance targets, each of which is to be weighted equally and averaged by calendar year over the three-year Performance Period (other than the Texas ratio that is averaged over 12 quarters): (i) the Company’s return on average equity, (ii) the Company’s efficiency ratio and (iii) the Company’s Texas ratio. Each of these ratios is compared to those of the Performance RSU Peer Group as 2022 Proxy Statement | 41 Outstanding Equity Awards at Fiscal Year End The following table sets forth information concerning outstanding equity awards held as of December 31,
(1) The amounts set forth in the “Market Value of Shares or Units of Stock That Have Not Vested” column are based on a Company stock price of $31.07 per share, which was the closing price (2) The specified Time RSU award vests ratably over 5 years with future vesting dates of March 25, 2022, 2023, 2024, 2025 and 2026. (3) The specified Time RSU award vests ratably over 5 years with future vesting dates of March 25, 2022, 2023, 2024 and 2025. (4) The specified Time RSU award vests ratably over 5 years with future vesting dates of March 25, 2022, 2023 and 2024. (5) The specified Time RSU award vests ratably over 5 years with future vesting dates of March 25, 2022 and 2023. (6) The specified Time RSU award vests ratably over 5 years with a future vesting date of March 25, 2022. (7) The value of the 2022 Proxy Statement | 42
Option Exercises and Stock Vested The following table sets forth information for each of our
(1) The realized value of Messrs. Nelson, Gulling, Olafson and Winterbottom’s awards reflects the vesting of 15,000 restricted stock units each on March 25, 2021, with a closing stock price of $24.06. (2) The realized value of Mr. Peters’ award reflects the vesting of 2,100 restricted stock units on March 25, 2021, with a closing stock price of $24.06. Nonqualified Deferred Compensation The following table sets forth information concerning the benefits to which each NEO is entitled under the Deferred Compensation Plan as of December 31, 2021.
(1) The amounts reflected in the “Aggregate Earnings in 2021” column consists of interest credited annually at a rate equal to the prime rate determined annually on each January 1. The above-market portion of this interest in 2021 is reported for each officer in the Summary Compensation Table. The above-market portion is the amount of interest that exceeds 120 percent of the applicable federal long-term rate, compounding (as prescribed under Section 1274(d) of the Internal Revenue Code) at a rate that corresponds most closely to the rate established under the deferred compensation plan. 2022 Proxy Statement | 43 Potential Payments upon Termination of Employment or Change in Control Each of our The table below sets forth the estimated amount of compensation
2022 Proxy Statement | 44
Termination and Change in Control Benefits under Employment Agreement with Mr. Nelson The Company and Mr. Nelson are parties to an employment agreement, Termination and Change in Control Benefits under Employment Agreements with Messrs. The Company is a party to employment agreements with each of Messrs. Termination and Change in Control Benefits under The Company is a party to an employment agreement with Mr. Peters with an effective date of April 29, 2021. Under his agreement, Mr. Peters serves as Executive Vice President of the Company and Executive Vice President and Minnesota Group President of West Bank. The initial term of the agreement continues until December 31, 2023, but the agreement extends automatically for an additional year on January 1, 2023 and on each January 1 thereafter unless terminated in accordance with the terms of the Agreement. As of December 31, 2021, Mr. Peters is entitled to a minimum annual salary of $275,000 pursuant to the agreement, as well as participation in the Company’s annual incentive bonus plan and the Company’s other benefit plans. Upon a termination of Mr. Peters’ employment by the Company without cause or by the executive for good reason, the agreement entitles the executive to severance payments equal to 100 percent of the sum of his base salary plus his average annual bonus for the prior three years, payable in 12 equal monthly installments following the date of termination, as well as 12 months of continued medical coverage at active employee rates. If such termination occurs within six months prior to or two years following a change in control, the executive will be entitled to severance payments equal to 200 percent of the sum of his base salary plus his average annual bonus for the prior three years, payable in a lump sum, as well as 18 months of continued medical coverage at active employee rates. The aforementioned severance benefits are contingent upon the respective executive’s execution of a general release of claims against the Company. Under the agreement, Mr. Peters will be subject to non-competition and non-solicitation covenants for a period of 12 months following termination of employment (24 months if the termination occurs following a change in control of the Company). 2022 Proxy Statement | 45 Transitional Employment Agreement with Mr. Gulling The Company is a party to a transitional employment agreement with Mr. Gulling with an effective date of June 1, 2021, to provide for the systematic succession and transition of his duties as Executive Vice President, Treasurer and Chief Financial Officer of the Company and Executive Vice President and Chief Financial Officer of West Bank (the “Transition Agreement”). Upon the effective date, the Transition Agreement superseded Mr. Gulling’s prior employment agreement. The term of the Transition Agreement commenced on June 1, 2021 and continues until Mr. Gulling’s anticipated retirement from all roles with the Company on December 31, 2022 (the “Employment Period”). Mr. Gulling retired from the role of Executive Vice President and Chief Financial Officer of West Bank on September 30, 2021 and as Executive Vice President, Treasurer and Chief Financial Officer of the Company on December 31, 2021. Between January 1, 2022 and December 31, 2022, Mr. Gulling will remain a non-executive, full-time employee of the Company to assist with the transition of his duties to Ms. Funk and, at the direction of the Company’s Chief Executive Officer, to serve in strategic roles and oversee the development of new bank facilities. Under the Transition Agreement, Mr. Gulling’s salary will remain $330,000 until March 31, 2022. As of April 1, July 1 and October 1 of 2022, the annual rate of Mr. Gulling’s salary will decrease by 25 percent of the rate in effect as of March 31, 2022. Mr. Gulling will be eligible to receive a performance-based annual incentive bonus for service during 2021, with threshold, target and maximum opportunities equal to 20 percent, 40 percent and 60 percent, respectively, of his annual base salary earned during 2021. During 2022, Mr. Gulling will be entitled to participate in the short- and long-term incentive plans as may be in effect for non-NEO key employees of the Company in the sole discretion of the Compensation Committee of the Company’s board of directors. Mr. Gulling will also be entitled to participate in the Company’s employee benefit plans and programs, except that he will not accrue any vacation during 2022. The Transition Agreement also provides for severance benefits in the event of termination by the Company other than for cause or by Mr. Gulling for good reason and enhanced severance benefits in the event of either type of termination within six months prior to or 12 months following a change in control of the Company. Severance will be based on 100 percent of the sum of the salary Mr. Gulling would have earned had he remained employed through the end of the Employment Period plus a full bonus for the year of termination (200 percent if in connection with a change in control). All severance benefits under the Transition Agreement are contingent upon Mr. Gulling's execution of a general release of claims against the Company. Under the Transition Agreement, Mr. Gulling will be subject to non-competition and non-solicitation covenants for a period of 12 months following termination of employment. The Transition Agreement may be terminated at will by either party. Termination and Change in Control Benefits under 2017 and 2021 Equity Incentive Plans All awards under the Further, under the Termination under Deferred Compensation Plan In the event of a change in control of the Company or the participant’s separation from service due to death or disability, amounts deferred by a participant will be distributed in a lump sum, and Company contributions, if any, will be distributed in accordance with the participant’s elections. Under the 2021 Equity Plan, with respect to the Performance RSUs to be granted to our NEOs beginning in 2021, the awards will vest immediately in connection with a change in control based upon the greater of actual performance through the date of a change in control or target level performance without proration. 2022 Proxy Statement | 46 CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of our median employee’s annual total compensation and the annual total compensation of Mr. Nelson, our President and Chief Executive Officer (the “Pay Ratio”) as of December 31, 2021. The Pay Ratio, as set forth below, is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. We identified our median employee at December 31, 2021, excluding Mr. Nelson, using a measure of total cash compensation defined as the sum of base salary, bonus, incentives, holiday, paid time off and overtime pay as reflected in our payroll records. We believe this is a reasonable measure of total compensation. Our employee population consisted of 181 employees at December 31, 2021. This population includes all full-time and part-time employees. We annualized the compensation of employees who were hired during 2021, based on the portion of the year for which they were employed. No full-time equivalent adjustments were made for part-time employees. Since we do not widely distribute annual equity awards to our employees, such awards were excluded from our compensation measure for identifying our median employee. To calculate the 2021 ratio of compensation of our median employee to that of Mr. Nelson, we calculated the median employee’s annual total compensation consistent with the calculation of Mr. Nelson’s annual total compensation as reported in the “Total” column of our 2021 Summary Compensation Table included in this proxy statement. This includes total cash compensation as described above as well as Company matching and discretionary contributions to participants in our 401(k) employee savings plan and equity awards, as applicable. The annual total compensation for the median employee was $70,564. Mr. Nelson’s total compensation was $1,027,900. The Pay Ratio of Mr. Nelson’s annual total compensation to the annual total compensation of the identified median employee at December 31, 2021 was approximately 15 to 1. Compensation Committee Interlocks and Insider Participation The members of the Compensation Committee are Proposal 2. Approve the Section 14A of the Exchange Act requires the Company to conduct an advisory stockholder vote to approve the compensation of The following resolution is submitted for stockholder approval: “RESOLVED, that West Bancorporation, Inc.’s stockholders approve, on an advisory basis, its executive compensation as described in the section captioned 2022 Proxy Statement | 47 Approval of this resolution requires The Board recommends a vote “FOR” approval of the INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES Proposal The Audit Committee of the Board has reappointed RSM US LLP (“RSM”), independent certified public accountants, as the Company’s independent registered public accounting firm for the year ending December 31, •The firm’s independence, objectivity and professional •The firm’s compliance with the SEC requirement to rotate the lead engagement partner and concurring review partner every five •Quality of services •Quality of communication and interaction with the •A review of the firm’s most recent Public Company Accounting Oversight Board (“PCAOB”) inspection •Audit and non-audit fees. The Company is asking its stockholders to ratify the appointment of RSM as the Company’s independent In the event the stockholders fail to ratify the appointment, the Audit Committee will consider this factor when making any future determination regarding RSM. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of the Company and its stockholders. Ratification of the appointment of RSM requires A representative from RSM will be present at the Annual Meeting. The representative will have the opportunity to make a statement and will be available to respond to appropriate questions from stockholders. The Board recommends a vote “FOR” the ratification of the appointment of RSM as our independent registered public accounting firm for the year ending December 31, 2022 Proxy Statement | 48 Audit Fees During the period covering the fiscal years ended December 31,
(1)Audit fees represent fees for professional services provided for the audit of the Company’s annual financial statements, review of the Company’s quarterly financial statements in connection with the filing of current and periodic reports and reporting on internal controls in accordance with Section 404 of the Sarbanes-Oxley Act. (2)Audit-related fees represent fees for professional services provided for the audit of the Company’s 401(k) retirement plan.
tax returns and advice on certain tax issues. (4)All other fees represent fees for information technology services. The Audit Committee considered whether the non-audit services provided to the Company by RSM are compatible with maintaining RSM’s independence and concluded that the independence of RSM is not compromised by the provision of such services. The Audit Committee pre-approves all audit services and permitted non-audit services, including the fees and terms of those services, to be performed for the Company by its independent registered public accounting firm prior to engagement. Audit Committee Report The incorporation by reference of this proxy statement into any document filed with the SEC by the Company shall not be deemed to include the following report unless such report is specifically stated to be incorporated by reference into such document. The Audit Committee hereby states as follows: •It has reviewed and discussed the audited financial statements as of and for the year ended December 31, •It has discussed with the independent auditors the matters required to be discussed by •It has received the written disclosures and the letter from our independent •At each of its meetings, it has met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting. •It has reviewed and approved or ratified all related-party transactions between the Company and its directors; •Based on the review and discussions referred to above, it recommended to the Board that the audited financial statements be included in the Company’s annual report on Form 10-K for the year ended December 31, •The Board has reviewed and approved the Audit Committee •It has discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits; and •It has selected RSM, The undersigned members of the Audit Committee have submitted this report. Steven T. Schuler, Chair James W. Noyce 2022 Proxy Statement | 49 GENERAL MATTERS Certain Relationships and Related Transactions Certain directors of the Company have direct and indirect material interests in loans made by West Bank. All the loans were made in West Bank’s ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with other persons not related to West Bank or the Company, and did not involve more than the normal risk of collectability or present other unfavorable features. None of the loans have been classified as nonaccrual, past due, troubled debt restructured or potential problem loans. The Board considered these loans when reviewing the independence of its directors and determined that such loans did not prevent the relevant directors from being able to serve as independent directors. The Audit Committee’s charter requires the Audit Committee to review and approve all related-party transactions that must be disclosed. All transactions between the Company or its subsidiaries and any related person, including loans made by West Bank involving $120,000 or more, are reviewed to determine whether all material facts of the transaction are known to the Audit Committee, the transaction complies with known legal requirements, and the transaction is fair to the Company and West Bank. The Audit Committee completed the required review of the fiscal year 2023 Stockholder Proposals In order for a proposal from a stockholder to be eligible for inclusion in the Company’s proxy statement and proxy card relating to the In order for a stockholder to propose other business to be considered at the Stockholders wishing to recommend names of individuals for possible nomination to the Board may do so according to the following procedures:
The written submission must be mailed or hand delivered to: Ms. Corporate Secretary West Bancorporation, Inc. 1601 22nd Street West Des Moines, Iowa 50266 2022 Proxy Statement | 50 Stockholder Communications It is the general policy of the Board that management speaks for the Company. To the extent stockholders wish to communicate with a Company representative, they may do so by contacting The Company has a process for stockholders to send communications to the Board or any of its individual members. Any stockholder wishing to communicate with one or more Board members should address a written communication to Delivery of Documents to Stockholders Sharing an Address In some instances, only one By Order of the Board of Directors, /s/ Vice President Corporate Secretary Assistant General Counsel West Bancorporation, Inc. March 10, 2022 2022 Proxy Statement | 51 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of Meeting, Proxy Statement, Proxy Card, Annual Report and Form 10-K are available at WEST BANCORPORATION, INC. Annual Meeting of Stockholders April This proxy is solicited by the Board of Directors The undersigned hereby appoints This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Continued and to be signed on the reverse side VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use Time on April 27, 2022 for shares held directly and by 11:59 p.m. Eastern Time on April 25, 2022, for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the delivery, please follow the instructions above to vote using the prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 Eastern you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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