First United Corporation Files 8-K: Executive Compensation and Incentive Plan Changes for 2026

Ticker: FUNC   |   Exchange: Nasdaq Stock Market

Date of Report: March 6, 2026

Company: First United Corporation

Key Points from the 8-K Filing

• Significant revision to executive compensation structure for 2026 and beyond, affecting the Chief Executive Officer, Chief Financial Officer, and other key officers.
• Performance-based Restricted Stock Units (RSUs) for 2026-2028 will be granted, with payout rates based on rigorous peer benchmarking.
• Performance goals are now explicitly tied to percentile rankings against a custom peer group of 103 publicly-traded banks (\$1.0B–\$4.2B assets as of Dec 31, 2025).
• Key metrics: Return on Average Equity (ROAE) and Tangible Book Value Per Share Growth (TBVPSG).
• Any peer acquired will be removed from the group; failed peers are assigned -99% performance.
• Disclosure of potential future amendments: If goals change materially, the Company will file further 8-K updates.
• Exhibits filed: Revised Appendix A for both Long-Term and Short-Term Incentive Plans, with certain non-material, competitively sensitive information omitted.

Details of the Revised Executive Incentive Plan

Long-Term Incentive Plan (LTIP) – 2026-2028

• Performance Period: 3 years ending December 31, 2028.
• Metrics:
  • ROAE (Return on Average Equity)
  • TBVPSG (Tangible Book Value Per Share Growth)

  Both measured against the custom peer group (103 banks).

• Performance Thresholds and Payouts:
  • Threshold: 25th percentile of peer performance (payout: 25% of RSUs vest)
  • Target: 50th percentile (payout: 50%)
  • Maximum: 75th percentile (payout: 75%)

  These goals apply separately to both ROAE and TBVPSG, and vesting can be earned in either or both categories.

• Peer Group Adjustments: The peer group is fixed; any peer that is acquired is removed, while failed peers are scored with a -99% result.
• Future Awards: The Compensation Committee intends to use these revised goals for future long-term awards, with a commitment to file amendments should the goals change materially.

Short-Term Incentive Plan (STIP) – 2026

• Annual Targets Set for Key Executives:
  • CEO: Target payout of 30% (with a maximum of 45% of base salary)
  • Other Tiers (CFO, Chief Banking Officer, Chief Credit Officer, Chief Wealth Officer): Targets range from 15% to 20% of base salary, with maximums up to 30%.
• Performance Metrics:
  • Corporate Net Income
  • Net Interest Margin
  • Efficiency Ratio
  • Operating Leverage
  • Loan Asset Quality

  Note: Some target values are redacted as competitively sensitive and non-material.

• Payout Structure: Threshold, target, and maximum payout opportunities are set for each metric and each executive; for the CEO, hitting the maximum in all categories could result in a payout of up to 45% of base salary for 2026.

Why This Matters for Shareholders

• This is a material change in executive compensation, tying pay more directly to rigorous, relative outperformance versus a large peer group. This could incentivize stronger management performance and aligns shareholder and executive interests more closely.
• Peer group benchmarking increases transparency and may appeal to institutional investors seeking clear, performance-based pay structures.
• Potential Share Price Impact: If management meets or exceeds these new targets, future financial results and shareholder returns could improve, potentially driving the share price higher. Conversely, missing targets could restrict executive compensation, which may be viewed positively or negatively depending on the circumstances.
• Ongoing Disclosure Commitment: The company pledges to update shareholders if the performance goals change, ensuring continued transparency.
• Some performance targets are not disclosed due to competitive reasons, which may create some uncertainty for shareholders evaluating the achievability of targets.

Exhibits Filed with the Report

• Exhibit 10.1: Revised Appendix A to the Long-Term Incentive Plan (LTIP)
• Exhibit 10.2: Revised Appendix A to the Short-Term Incentive Plan (STIP) – with portions omitted for competitive reasons.
• Exhibit 104: Cover page interactive data file (iXBRL)

Additional Administrative Items

• The company confirms that it is not an emerging growth company and has not elected to use the extended transition period for new accounting standards.
• No written communications, soliciting materials, or pre-commencement tender offers are included in this filing.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult the official filings and their own advisors before making investment decisions. The information above summarizes key points from First United Corporation’s 8-K filing dated March 6, 2026, and may contain forward-looking statements that are subject to risks and uncertainties.

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