DEF 14A of Citizens & Northern Corp
Filed Mar 15, 2024 · FY20230001104659-24-034923
TABLE OF CONTENTS
| Executive Compensation Tables | 30-34 | | Summary Compensation Table | | | Grants of Plan-Based Awards | | | Outstanding Equity Awards at Fiscal Year-End | | | Option Exercises and Stock Vested | | | Pension Benefits | | | CEO Pay Ratio | 34 | | Pay Versus Performance | 35-40 | | Pay Versus Performance | | | Compensation Actually Paid vs. CZNC and Peer Group Total Shareholder Return | | | Compensation Actually Paid vs. Net Income | | | Compensation Actually Paid vs. Core Return on Average Equity | | | Employment Agreements | 40-42 | | Change in Control Agreement | 42 | | Potential Payments Upon Termination or Change in Control | 42-43 | | Indemnification Agreements | 43-44 | | Compensation of Directors | 44-45 | | Director Summary Compensation Table | | | Director Fees | | | Stock Incentive Plans | | | Proposal 2 – Advisory Non-Binding Vote on Executive Compensation | 45-46 | | Proposal 3 – Ratification of Independent Registered Public Accounting Firm | 46 | | Fees of Independent Registered Public Accounting Firm | 46 | | Audit Committee Report | 47 | | Annual Report on Form 10-K | 47 | | Other Matters | 47 |
PROPOSAL 1 -- ELECTION OF DIRECTORS
PROPOSAL 1 -- ELECTION OF DIRECTORS
Board of Directors
Board of Directors Our Articles of Incorporation provide that the Board of Directors shall consist of not less than five (5) nor more than twenty-five (25) directors and that within these limits the number of directors shall be as established by the Board of Directors. The Articles further provide that the Board shall be classified into three classes, as nearly equal in number as possible. One class of directors is elected annually, and the term for each class is three (3) years. Any vacancy occurring on the Board of Directors, for any reason, may be filled by a majority of directors then in office to serve until the expiration of the term of the vacancy. There are currently eleven (11) members of the Corporation’s Board of Directors. At the 2024 Annual Meeting, four (4) Class I directors are to be elected to serve for a three-year term.
Nominees for Election
Nominees for Election The Board of Directors proposes the following four (4) nominees be elected as Class I directors for terms expiring at the 2027 Annual Meeting of Shareholders: Terry L. Lehman, Robert G. Loughery, Bobbi J. Kilmer, and Frank G. Pellegrino. Each nominee currently serves as a director of the Corporation. The election of directors is subject to a majority vote requirement under which any director who does not receive a majority of the votes cast in an uncontested election must tender his or her resignation as a director of the Corporation via the Chairperson of the Corporate Governance and Nominating Committee. A director whose resignation is under consideration shall abstain from participating in any recommendation or decision regarding that resignation. The Corporate Governance and Nominating Committee shall make a recommendation to the Board whether to accept, reject or otherwise act with respect to the tendered resignation. Notwithstanding the foregoing, in the event of a contested election of directors, directors shall be elected by the vote of a plurality of the votes cast at any meeting for the election of directors at which a quorum is present. Unless otherwise instructed, proxies received from shareholders will be voted for the nominees named in this proxy statement. If a nominee should become unavailable for any reason, proxies will be voted for a substitute nominee determined by the Board of Directors. The Board of Directors has no reason to believe that the nominees will be unable to serve if elected. Cumulative voting does not exist in the election of directors. Each share of Corporation common stock is entitled to cast one vote for each nominee. For example, if a shareholder owns ten shares of common stock, he or she may cast up to ten votes for each of the four nominees to be elected. The Board of Directors recommends a vote “FOR” the election of the nominees identified above, each of whom has consented to be named as a nominee and to serve if elected.
Director Qualifications
Director Qualifications We provide below information as of the date of this proxy statement about each nominee and director of the Corporation. The information includes information each director has given us about his/her age, all positions held, principal occupation and business experience for the past five years, and the names of other publicly held companies of which he or she currently serves as a director or has served as a director during the past five years. In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led the Board of Directors to conclude that he or she should serve as a director, we also believe that all of our directors and nominees have demonstrated good judgment, strength of character, and an independent mind, as well as a reputation for integrity and the highest personal and professional ethics. The age shown below for each director is as of April 25, 2024, which is the date of the annual shareholders meeting.
Nominees as Class I Directors for a term expiring at the 2027 Annual Meeting
Nominees as Class I Directors for a term expiring at the 2027 Annual Meeting
Bobbi J. Kilmer
Bobbi J. Kilmer Director since: 2018 Age: 60 Ms. Kilmer served as the President & Chief Executive Officer of Claverack Rural Electric Cooperative from 2006 until retiring in January 2021. She also served as the Co-President & CEO of C&T Enterprises, Inc., which is the owner of Valley Energy in Sayre, PA, Wellsboro Electric Company and Citizens Electric Company in Lewisburg. She previously served as the Executive Vice President & Chief Operating Officer of Claverack. Ms. Kilmer serves on the boards of various organizations within her local and surrounding communities. She received her Bachelor of Science degree from Mansfield University. We believe Ms. Kilmer’s qualifications to serve as a director of the Corporation include her business experience, as well as her executive leadership roles at Claverack Rural Electric Cooperative and C&T Enterprises, Inc.
Terry L. Lehman, CPA (Inactive), Chairman
Terry L. Lehman, CPA (Inactive), Chairman Director since: 2016 Age: 66 Mr. Lehman is a retired certified public accountant with over 35 years of experience in public accounting and private industry, including serving the roles of an Assurance Director at BDO, LLP in Harrisburg, an Audit Partner at ParenteBeard, LLC, and Beard Miller Company, LLP both located in Harrisburg, Senior Manager at Ernst & Young, and an Internal Auditor at Peoples National Bank of Lebanon. Mr. Lehman was a Board Member for both MidCoast Community Bancorp, Inc. and MidCoast Community Bank from October 2015 until 2020. He also is active with various organizations in his local communities and is a Pennsylvania CPAon inactive status . He received his B.S.B.A. degree in Accounting from Shippensburg University. We believe Mr. Lehman’s extensive experience in public accounting and private industry, much of which has been concentrated in work for and on behalf of financial institutions and public companies, make him qualified to serve as a director of the Corporation.
Robert G. Loughery
Robert G. Loughery Director since: 2020 Age: 54 Mr. Loughery served on the Covenant Bank Board of Directors for 5 years. As a real estate investor and developer, Mr. Loughery currently serves as the President of Nehemiah Development Company, Inc. Mr. Loughery served as a County Commissioner in the County of Bucks from February 2011 until January 2020. Mr. Loughery serves on numerous private boards and public authorities. Mr. Loughery has a B.A. degree in Policy and Management Studies from Dickinson College in 1991. Following graduation, he was commissioned an officer in the US. Army Reserves. We believe Mr. Loughery is qualified to serve as a director of the Corporation because of his over 20 years’ experience in real estate development and finance and his leadership abilities.
Frank G. Pellegrino
Frank G. Pellegrino Director since: 2016 Age: 60 Mr. Pellegrino is Owner/Developer with Carlton Associates, LLC, in Lycoming County PA and is the former Executive Vice President of Sales and Marketing and a founder of Primus Technologies Corp., Williamsport. He serves as CEO or Board Chairman on many of his businesses in Lycoming, Montour, Centre, and Union Counties. He is a member of the Board of Directors, and Audit Committee Chairman, of Advance Technologies, Middletown, PA. We believe Mr. Pellegrino’s advanced education, director experience, more than 25 years of executive leadership roles with Primus Technologies and leadership roles through his more than 12 manufacturing and service companies and his extensive community board positions throughout Northcentral PA amply qualify him to serve as a director.
Continuing Class III Directors for a term expiring at the 2026 Annual Meeting
Continuing Class III Directors for a term expiring at the 2026 Annual Meeting
Stephen M. Dorwart
Stephen M. Dorwart Director since: 2020 Mr. Dorwart served on the Covenant Bank Board of Directors from 2007 until July 2020. He served as Chair for both the Audit and Compensation Committees and was the Lead Outside Director for 5 years. He received his Bachelor of Science degree in Business Administration from Bucknell University in 1991. Mr. Dorwart is the managing partner of the public accounting firm Fischer Dorwart, PC with offices in Audubon, NJ and Harrisburg, PA. He is a CPA licensed in Pennsylvania, New Jersey and Delaware. We believe Mr. Dorwart is qualified to serve as a director of the Corporation because of his extensive experience in public accounting and as a director of Covenant Bank.
J. Bradley Scovill
J. Bradley Scovill Mr. Scovill became employed as President and Chief Executive Officer of the Corporation and Citizens & Northern Bank (the “Bank”) and was appointed to the Board of Directors of the Corporation and the Bank, effective March 2, 2015. Prior to joining the Corporation and Bank, Mr. Scovill most recently served as President and Chief Operating Officer of Kish Bancorp, Inc. and Kish Bank headquartered in Belleville, Pennsylvania, where he was an executive for more than five (5) years. Prior to Kish, Mr. Scovill held various executive management positions with both PNC Bank and Sterling Financial Corporation, headquartered in Lancaster, Pennsylvania. Mr. Scovill received a Bachelor of Science degree in Finance from The Pennsylvania State University. We believe Mr. Scovill is qualified to serve as a director of the Corporation because of his extensive experience working in financial and executive roles in the banking industry.
Aaron K. Singer
Aaron K. Singer Director since: 2017 Age: 52 Mr. Singer has been the President & Chief Executive Officer of MetalKraft Industries Inc., in Wellsboro, PA, since 2000. He received his Bachelor of Science degree from Shippensburg University. Mr. Singer serves on the boards of various organizations within his local community. We believe Mr. Singer’s qualifications to serve as a director of the Corporation include his business experience as well as his executive leadership experiences at MetalKraft.
Continuing as Class II Directors for a term expiring at the 2025 Annual Meeting
Continuing as Class II Directors for a term expiring at the 2025 Annual Meeting
Susan E. Hartley
Susan E. Hartley Director since: 1998 Age: 66 Ms. Hartley has been an attorney since 1984. She received her Bachelor of Arts degree from Elmira College, Master of Arts degree from State University of New York at Buffalo, and Doctorate of Jurisprudence from State University of New York at Buffalo School of Law. We believe Ms. Hartley’s qualifications to serve as a director of the Corporation include her experience as an attorney and her over 20 years of experience as a director of the Corporation.
Leo F. Lambert
Leo F. Lambert Director since: 2001 Age: 70 Mr. Lambert served as the President and General Manager of Fitzpatrick & Lambert, Inc., in Dushore, PA until retiring in 2022. Mr. Lambert received his Bachelor of Science degree from St. Francis College Loretto. Mr. Lambert has served and continues to serve on many nonprofit boards within his community. We believe Mr. Lambert’s qualifications to serve as a director of the Corporation include his over 40 years of experience as a local business owner, entrepreneur and community leader, as well as over 20 years of experience as a director of the Corporation.
Helen S. Santiago
Helen S. Santiago Director since: 2021 Age: 44 Ms. Santiago has served as a CPA for LaBarr & LaBarr, LLC in Sayre, PA since 2009 where her focus is income tax preparation, tax planning and financial statements. Prior to returning to Bradford County, she worked for KPMG in Philadelphia for seven years, earned her CPA license and served as an auditor before being promoted to Manager. Ms. Santiago earned her Bachelor of Science degree in Accounting from Susquehanna University. Ms. Santiago is involved in the community as Secretary of the Bradford/Sullivan Counties’ Outstanding Young Woman Program. She’s also active in the Parent/Teacher Guild (PTG) of St. Agnes School in Towanda, PA. We believe Ms. Santiago’s qualifications to serve as a director of the Corporation include her extensive experience in public accounting.
John M. Reber
John M. Reber Age: 57 Mr. Reber has served as Executive Vice President and Chief Risk Management Officer of the Bank since February 2021. Previously, Mr. Reber served as Executive Vice President and Director of Risk Management of the Bank since January 2011. Mr. Reber was Vice President and Director of Risk Management of the Bank since June 2004. Prior to joining C&N, Mr. Reber held various staff and management positions in credit, lending and risk management with SunBank, headquartered in Lewisburg, Pennsylvania. Mr. Reber received a Bachelor of Science degree in Finance from Bloomsburg University of Pennsylvania. Thomas L. Rudy, Jr. Age: 60 Mr. Rudy has served as Executive Vice President, Chief Delivery Officer and Region President of the Bank since February 2021. Previously, Mr. Rudy served as Executive Vice President and Director of Branch Delivery of the Bank since February 2004; President of C&N Financial Services Corporation since January 2000; and President of Bucktail Life Insurance Company since May 2018. Mr. Rudy received a Bachelor of Science degree in Finance from The Pennsylvania State University and is a graduate of the ABA Graduate School of Banking at the Wharton School, University of Pennsylvania.
Delinquent Section 16(a) Reports
| ● | 3 executive officers made one late filing related to net settlement of stock option exercises. |
2023 Performance Highlights
| ● | The return on average assets (ROAA) for the twelve months ended September 30, 2023 was 1.13%, and the return on average equity (ROAE) was 11.15%. Excluding from earnings the after-tax impact of amortization of core deposit intangibles, conversion costs related to a change in wealth management platform for providing brokerage and investment advisory services, and net gains on available-for-sale debt securities and a marketable equity security, the adjusted annual Core ROAA for the twelve months ended September 30, 2023 was 1.16% and the similarly adjusted Core ROAE was 11.41%. The Core ROAE of 11.41% was at the 49th percentile as compared to results for the peer group, resulting in a corporate performance-based payout to the NEOs equal to 97.32% of target for 2023. In comparison, for the twelve months ended September 30, 2022, the Corporation’s Core ROAE of 9.49% was lower than the 25th percentile of results for the peer group, resulting in no corporate performance-based payout to the NEOs for 2022. |
2023 Key Compensation Decisions and Actions
| ● | 2023 Short-Term Incentive Awards: Payouts to NEOs for 2023 performance ranged from 15.0% to 25.4% of base salary, below target levels for each NEO. These awards included the following components: (1) corporate awards equal to 97.32% of target based on the Corporation’s Core ROAE of 11.41% as compared to the median peer group Core ROAE of 11.76% for the 12 months ended September 30, 2023, (2) awards based on key performance indicators ranging from 1.2% to 1.6% of base salary, and (3) awards based on individual performance ranging from 2.5% to 7.5% of base salary. |
2023 Key Compensation Decisions and Actions
| ● | 2023 Long-Term Incentive Awards: Equity awards to NEOs in 2023 had grant date fair values of 24.7% of 2022 base salary for Mr. Scovill, 20.6% of 2022 base salary for Mr. Hoose and 16.5% of 2022 base salary each for Mr. Hughes, Mr. Rush and Mr. Dunsmore. The awards included a mix based on 50% time-based restricted stock awards (“RSA”) and 50% performance-based restricted stock awards (“PRSA”). The time-based RSAs and PRSAs vest over three years, with one-third vesting on each anniversary date of the award. For PRSAs, awards only vest to the extent performance has been met for the prior year. |
2023 Key Compensation Decisions and Actions
| ● | 2023 Performance Outcome: Based on 2023 performance compared to performance of the approved peer group for the 12 months ended September 30, 2023, all of the potential shares for PRSA awards granted in 2021, 2022 and 2023 vested. |
Compensation Philosophy and Program Objectives
Compensation Philosophy and Program Objectives We believe that the compensation program for executives should directly support the achievement of specific annual, long-term and strategic goals of the business, and, thereby, align the interests of executives with the interests of our shareholders. We believe the current program provides sufficient levels of fixed pay elements, in the forms of base salary and health and welfare benefits, to attract high caliber executive talent to the organization. It also provides annual and long-term incentive opportunities to encourage specific performance and to reward the successful efforts of executives. The incentive opportunities are structured to produce a performance-leveraged program format in which executives may derive a significant portion of their total compensation, depending on their role in the organization, from short and long-term incentive opportunities, but only when performance targets are met on a consistent basis and subject to appropriate controls to ensure management is not incented to take excessive risk. We believe that the features and composition of the current program provide a total compensation package for executive officers that is competitive in our marketplace but weighted toward variable pay based on corporate and individual performance, and which contributes to the creation of shareholder value.
2023 Program Components
| 2. | Short-Term (Annual) Incentives. The Corporation’s Annual Incentive Award Plan provides participating executives with opportunities to earn additional cash compensation in a given year when corporate and business unit operating results and individual performance contributions meet or exceed established thresholds of acceptable achievement. For 2023, corporate performance was measured based on the Corporation’s ROAE, adjusted to exclude extraordinary occurrences (“Core ROAE”) as compared to ROAE goals based on the peer group’s Core ROAE for the 12 months ended September 30, 2023. Key performance indicators include deposit growth (excluding brokered deposits), total revenue growth, efficiency ratio and growth in wealth management revenue. Each participant’s individual performance contribution is evaluated by his or her supervisor, with the Chief Executive Officer’s individual performance contribution evaluated by the Board of Directors. The Committee, in its discretion, may adjust or eliminate award payments under the Incentive Award Plan. All awards under the Incentive Award Plan are paid in cash as soon as it is practical after the end of a plan year. |
2023 Program Components
| Long-term Incentives (“LTI”). The Corporation’s 1995 Stock Incentive Plan provided participating executives with the ability to receive equity awards (as determined by the Committee, as administrator of the plan), and was intended to focus the recipient’s efforts on the strategic direction and goals of the business, incent ownership in the Corporation and promote a vested interest in the Corporation’s long-term success. The LTI awards made in 2023 were the final awards made under the 1995 Stock Incentive Plan. Outstanding restricted stock awards that were granted prior to adoption of the Citizens & Northern Corporation 2023 Equity Incentive Plan (the “2023 Equity Plan,” as described below) will be governed under the 1995 Stock Incentive Plan. |
2023 Program Components
| In 2023, the Committee reviewed and recommended approval of restricted stock awards to executives based upon its assessment of individual performance, a review of the executive’s existing long-term incentives, and retention considerations, including LTI grants to its NEOs in the form of 50% RSAs and 50% PRSAs. RSAs granted to the Corporation’s and the Bank’s executive officers in 2023 vest equally over a three-year period. On each anniversary date of the 2023 RSAs, one-third of the total shares will be distributed based on the recipient’s satisfactory performance of his or her job. |
2023 Program Components
| The Corporation’s PRSAs granted in 2023 are structured in a way where performance is assessed at the end of each year within the three-year performance period. On each anniversary date, up to one-third of the total PRSA shares will be distributed based on the recipient’s satisfactory performance of his or her job and the Corporation’s attainment of an earnings-based performance standard. For the 2023 LTI awards, 50% of the PRSAs are evaluated based on Core ROAE performance while 50% are evaluated based on Core ROAA performance. Like the Annual Incentive Plan, 2023 Core ROAE and Core ROAA performance is assessed by comparison of the Corporation’s level of performance to goals based on the peer group’s performance for the 12 months ended September 30, 2023. The threshold requirement for Core ROAE is based on the 35th percentile rank, while the threshold requirement for Core ROAA is based on the 65th percentile rank as compared to the peer group’s 12 months ended September 30, 2023 results. All restricted shares not distributed due to the recipient’s unsatisfactory performance of his or her job or due to the Corporation failing to achieve the minimum Core ROAE or Core ROAA threshold are forfeited by the executive and revert back to the Corporation as of the anniversary date on which such determinations are made. |
2023 Program Components
| Deferred Compensation Plan - The Corporation has a nonqualified Deferred Compensation Plan that allows selected officers the option to defer receipt of up to 100% of base salary plus any non-equity incentive plan compensation. The Compensation Committee of the Board of Directors determines employees eligible to participate (“Participants”). The Deferred Compensation Plan does not provide for Corporation contributions. |
2023 Program Components
| 6. | Employment, Change in Control and Severance Agreements. The Corporation has entered into Employment Agreements with Mr. Scovill, Mr. Hughes, Mr. Hoose and Mr. Rush, and a Change in Control Agreement with Mr. Dunsmore. The Employment Agreements and Change in Control Agreement are described in more detail on pages 40-42. |
2023 Program Components
| None of the named executive officers has a commitment from the Corporation for a tax gross-up payment in the event that their severance benefits exceed the deduction limitations under Internal Revenue Code Section 4999. |
How We Make Decisions Regarding Named Executive Officer Compensation
How We Make Decisions Regarding Named Executive Officer Compensation The Compensation Committee, with the support of its independent compensation consultant and management, determines executive compensation programs, practices, and levels for full Board consideration and approval. Specific responsibilities are assigned in accordance with governance best practices. In making its determinations, the Compensation Committee considers data and analyses regarding a peer group and other internal studies. Below is an explanation of the key roles and responsibilities of each group, as well as how market data is integrated into the process. Role of the Compensation Committee. The Compensation Committee (“the Committee”) of the Board of Directors has primary responsibility for the design and administration of the executive compensation program. It reviews the make-up and administration of the executive compensation program throughout the year in light of changing organization needs and operating conditions and changing trends in industry practice. The Compensation Committee determines and approves the salaries, cash and equity incentive bonuses, equity awards, benefits and employment policies as they relate to the named executive officers, subject to full Board consideration and approval. In making determinations regarding executive compensation, the Compensation Committee weighs an individual’s personal performance, the performance of his or her area of responsibility, and the overall performance of the Corporation. The performance of the Chief Executive Officer in each of these regards is evaluated by the Compensation Committee. The performance of each of the named executive officers (other than the Chief Executive Officer) is evaluated by the Chief Executive Officer and in the case of Mr. Rush by the Chief Revenue Officer. The Compensation Committee reviews performance of the named executive officers on an annual basis and examines each named executive officer’s base salary, cash incentive bonus, and restricted stock award at such time. The Compensation Committee has the authority to retain or obtain the services of compensation consultants or other advisors to provide compensation and benefit consulting services to the Committee. The independence of any such advisor is determined by the Compensation Committee prior to selecting or receiving advice from the advisor. Role of Executive Management. Key members of the Corporation’s executive management attend Compensation Committee meetings at the Compensation Committee’s request to provide information and their perspective about executive compensation policies and programs. Management’s participation plays an important part in the development and continuation of benefit plans, and in determining appropriate levels of compensation. The Compensation Committee holds discussions with management in attendance to ensure that the Compensation Committee makes fully informed recommendations with respect to compensation matters that affect the Corporation’s operations and shareholder returns. Finally, the Corporation’s Chief Executive Officer participates in deliberations of the Compensation Committee on an ex-officio, non-voting basis, but does not participate during, or attend, deliberations concerning his own compensation. No member of management was present during the portion of any Compensation Committee meeting at which the Compensation Committee made determinations regarding such named executive officer’s compensation. Role of the Compensation Consultant. The Compensation Committee utilizes the support of outside compensation experts in establishing the policies, programs, and levels of executive compensation. In 2023, the Compensation Committee engaged Pearl Meyer & Partners, LLC (Pearl Meyer) to:
How We Make Decisions Regarding Named Executive Officer Compensation
| ● | Review and provide feedback on Proxy Statement disclosures; | | ● | Review and update the compensation peer group, as appropriate, and provide updates on peer group earnings performance; | | ● | Assess the competitiveness of the executives’ total compensation opportunities; and | | ● | Review non-employee director compensation structure. |
How We Make Decisions Regarding Named Executive Officer Compensation
In their role as the Corporation’s outside advisor, Pearl Meyer also responds to questions from the Compensation Committee and attends meetings as requested. Pearl Meyer reports directly to the Compensation Committee and, as directed by the Compensation Committee, works with management in support of the Committee. Pearl Meyer performed no services outside of those related to executive and director compensation for the Corporation in 2023. The Compensation Committee assessed the independence of Pearl Meyer and believes they are an independent advisor pursuant to the rules and standards promulgated by the SEC and NASDAQ. Role of Market Data/External Comparison. Annually, the Committee asks its independent compensation consultant to review proxy disclosures and survey sources on national and regional compensation practices within the Corporation’s industry group, focusing on pay levels and practices among community banking institutions based in the Mid-Atlantic Region. For the 2023 program planning review conducted in 2022, the independent compensation consultant applied the following filters in developing a recommended group of institutions to serve as the Corporation’s peer group (the “2023 Peer Group”):
2023 Executive Compensation Decisions
2023 Executive Compensation Decisions Base Salaries. For 2023, the Compensation Committee approved annual increases in base salary ranging between 2.1% and 7.5% for each of the Named Executive Officers in recognition of each executive’s contribution and performance. Annual Incentive Awards. The table below presents the performance criteria and the weighting of each criterion used in determining the annual incentive awards earned based upon 2023 performance for the named executive officers:
2023 Executive Compensation Decisions
| (1) The Corporate Earnings Performance award was calculated based upon achievement of annual return on average equity (Core ROAE) as a percentile ranking compared to Peer Group Performance. The Peer Group included all publicly traded commercial banks and thrifts within MD, NJ, NY, OH, PA and WV with total assets between 0.5 and 2.0 times the Corporation (“CZNC”) as of September 30, 2023. The chart below was used to determine the incentive opportunity percentage of base salary from which a participant’s cash incentive award would be paid: |
2023 Executive Compensation Decisions
The decision to use an ROAE rank against Peer Group of 25th percentile to establish the minimum performance standard for a payout, and an ROAE rank against Peer Group of 50th percentile to establish a payout at 100% of Target, recognized that the Corporation’s equity capital, as a percentage of assets, is significantly higher than the peer average. An indicator of the Corporation’s higher-than-Peer average equity capital is that although the Corporation’s twelve months ended September 30, 2023 Core ROAE rank was the 49th percentile compared to the twelve months ended September 30, 2023 Peer Group results, the Corporation’s adjusted (Core) return on average assets of 1.16% was the 71st percentile ranking compared to Peer Group results. For purposes of comparing the Corporation’s Core ROAE and ROAA to peer group results, the Corporation’s earnings as determined under U.S. Generally Accepted Accounting Principles (U.S. GAAP) were adjusted to eliminate amounts the Committee determined to be based on “extraordinary occurrences,” as described in the 2023 Annual Incentive Award Plan document. Reconciliation of the Corporation’s earnings for the twelve months ended September 30, 2023 under U.S. GAAP to the non-GAAP earnings amount used in the incentive award calculation is as follows:
2023 Executive Compensation Decisions
| Name | Title | 2022 Base Salary | LTI Award as % of Base Salary | Grant Date Fair Value of LTI Awards | Grant Date | Grant Date Share Price | # of Shares Granted (1) | | J. Bradley Scovill | Chief Executive Officer | $535,000 | 24.7% | $132,301 | 1/31/2023 | $23.35 | 5,666 | | Mark A. Hughes | EVP and Chief Financial Officer | $315,000 | 16.5% | $51,930 | 1/31/2023 | $23.35 | 2,224 | | Harold F. Hoose, III | EVP and Chief Revenue Officer | $284,000 | 20.6% | $58,515 | 1/31/2023 | $23.35 | 2,506 | | Blair T. Rush | EVP and Region President | $289,000 | 16.5% | $47,634 | 1/31/2023 | $23.35 | 2,040 | | Stan R. Dunsmore | EVP and Chief Credit Officer | $243,000 | 16.5% | $40,045 | 1/31/2023 | $23.35 | 1,715 |
Summary Compensation Table
Summary Compensation Table The following table contains information with respect to annual compensation for services in all capacities to the Corporation and the Bank for the fiscal year ended December 31, 2023, with comparative information for 2022 and 2021, of those persons who were, (i) the Chief Executive Officer, (ii) the Chief Financial Officer and (iii) the other three most highly compensated executive officers other than the Chief Executive Officer and the Chief Financial Officer to the extent such person’s total compensation exceeded $100,000 (collectively, the “named executive officers”):
Summary Compensation Table
| | | | | | | | Change in | | | | | | | | | | | Pension Value | | | | | | | | | | | and | | | | | | | | | | Non-Equity | Nonqualified | All | | | | | | | Stock | Option | Incentive Plan | Deferred Plan | Other | | | Name and | | Salary | Bonus(1) | Awards(2) | Awards(3) | Compensation(4) | Compensation(5) | Compensation(6) | Total | | Principal Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | J. BRADLEY SCOVILL | 2023 | 575,000 | 0 | 132,301 | 0 | 146,168 | 0 | 372,118 | 1,225,587 | | President and | 2022 | 535,000 | 0 | 224,429 | 0 | 62,942 | 0 | 265,749 | 1,088,120 | | Chief Executive Officer | 2021 | 498,750 | 0 | 213,754 | 0 | 186,929 | 0 | 209,760 | 1,109,193 | | MARK A. HUGHES | 2023 | 332,500 | 500 | 51,930 | 0 | 77,436 | 0 | 92,850 | 555,216 | | Executive Vice President | 2022 | 315,000 | 500 | 89,997 | 0 | 33,000 | 0 | 78,804 | 517,301 | | and Chief Financial Officer | 2021 | 300,000 | 500 | 87,007 | 0 | 91,877 | 0 | 68,691 | 548,075 | | HAROLD F. HOOSE, III | 2023 | 300,000 | 500 | 58,515 | 0 | 55,429 | 0 | 69,471 | 483,915 | | Executive Vice President | 2022 | 284,000 | 500 | 100,405 | 0 | 30,000 | 0 | 64,400 | 479,305 | | and Chief Revenue Officer | 2021 | 267,450 | 500 | 91,872 | 0 | 89,027 | 0 | 59,829 | 508,978 | | BLAIR RUSH | 2023 | 295,000 | 500 | 47,634 | 0 | 44,065 | 0 | 53,222 | 440,421 | | Executive Vice President | 2022 | 289,000 | 500 | 83,491 | 0 | 20,000 | 0 | 51,024 | 444,015 | | and Region President | 2021 | 275,000 | 500 | 15,475 | 0 | 72,931 | 0 | 49,185 | 413,091 | | STAN R. DUNSMORE | 2023 | 256,000 | 500 | 40,045 | 0 | 39,416 | 17,009 | 81,608 | 434,578 | | Executive Vice President | 2022 | 243,000 | 500 | 69,581 | 0 | 21,000 | 0 | 78,249 | 412,330 | | and Chief Credit Officer | 2021 | 232,000 | 500 | 66,907 | 0 | 62,833 | 0 | 69,746 | 431,986 |
Summary Compensation Table
(1) The bonus amounts were paid pursuant to discretionary “holiday awards” that were paid in December of each year to essentially all employees except the Chief Executive Officer. (2) The grant date fair market value of stock awards is computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “ASC”) topic 718, “Compensation—Stock Compensation,” excluding the effect of estimated forfeitures. The value used for restricted stock awards is based on the market value of the stock at the grant date. The amounts shown in the “Stock Awards” column equal the values of restricted stock awards determined based on the average of the high and low stock price at each grant date. For 2023, the value as of the January 31, 2023 grant date was $23.35 per share. In 2022, the value as of the January 31, 2022 grant date was $25.02 per share. In 2021, the value as of the grant date for the January 29, 2021 awards was $20.02 per share. Restricted stock awards to NEOs under the Stock Incentive Plan in 2023, 2022 and 2021 provided for vesting over a three-year term, with vesting for half of the shares dependent on satisfactory performance (time vesting) and vesting for half of the shares based on time vesting and upon the Corporation meeting an ROAE (one-sixth of the total shares awarded) and ROAA (one-sixth of the total shares awarded) performance ratio, as defined. In 2023, the Corporation met the performance conditions defined in the applicable awards. In 2022, the Corporation did not meet the performance conditions; accordingly, in the first quarter 2023, the following forfeitures occurred: Mr. Scovill – 4,983 shares; Mr. Hughes – 2,041 shares; Mr. Hoose – 2,165 shares; Mr. Rush - 549 shares; and Mr. Dunsmore – 1,549 shares. In 2021, the Corporation met the performance conditions except for the performance condition included in the 2019 awards based on ROAE. Accordingly, in the first quarter 2022, the following forfeitures of restricted stock occurred: Mr. Scovill – 1,293 shares; Mr. Hughes - 559 shares; Mr. Hoose – 564 shares; and Mr. Dunsmore - 408 shares. (3) There were no options awarded in 2023, 2022 or 2021. (4) The amounts shown in the “Non-Equity Incentive Plan Compensation” column were paid pursuant to the Incentive Award Plan, which is described in the “Program Components” section of Compensation Discussion and Analysis. (5) The amounts shown in the column headed “Change in Pension Value and Nonqualified Deferred Plan Compensation” are attributable to Mr. Dunsmore’s participation in the Citizens Trust Company Pension Plan, a defined benefit pension plan. This plan covers certain employees who were employed by Citizens Trust Company on December 31, 2002, when the plan was amended to discontinue admittance of any future participants and to freeze benefit accruals. The Corporation acquired Citizens Bancorp, Inc. and its wholly-owned subsidiary, Citizens Trust Company, effective May 1, 2007. Mr. Dunsmore is the only Named Executive Officer who is a participant in this plan. In 2023, Mr. Dunsmore’s present value of accumulated benefit increased by $17,009 and is include in the Summary Compensation Table. In 2022 and 2021, the present value of Mr. Dunsmore’s accumulated benefit decreased; therefore, a value of $0 is include in the Summary Compensation Table for those years. The discount rate used to calculate the present value of accumulated plan benefit was 4.80% at December 31, 2023, 5.05% at December 31, 2022 and 2.60% at December 31, 2021. (6) Amounts shown as “All Other Compensation” include the following:
Summary Compensation Table
| ALL OTHER COMPENSATION TABLE |
Summary Compensation Table
| | | Employer | | | | | | | | | | Contributions | Employer | Employer | | | | | | | | to the | Contributions | Contributions to | Dollar Value of | | | | | | | Employee | to the 401 (k) | the Supplemental | Insurance Premium | Dividends | Perquisites | | | | | Stock | Employee | Executive | paid for Group- | Paid on | and Other | | | | | Ownership | Savings | Retirement | Term Life and Long- | Restricted | Personal | | | | | Plan | Plan | Plan (SERP) | Term Disability | Stock | Benefits(1) | Total | | Name | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | J. Bradley Scovill | 2023 | 13,200 | 16,500 | 289,639 | 3,980 | 18,103 | 30,696 | 372,118 | | | 2022 | 12,200 | 15,250 | 186,799 | 2,748 | 20,636 | 28,116 | 265,749 | | | 2021 | 11,600 | 14,500 | 135,143 | 2,388 | 21,737 | 24,392 | 209,760 | | Mark A. Hughes | 2023 | 13,200 | 16,500 | 51,306 | 3,980 | 7,264 | 600 | 92,850 | | | 2022 | 12,200 | 15,250 | 39,598 | 2,748 | 8,408 | 600 | 78,804 | | | 2021 | 11,600 | 14,500 | 30,591 | 2,388 | 9012 | 600 | 68,691 | | Harold F. Hoose, III | 2023 | 13,200 | 16,500 | 23,523 | 2,833 | 7,972 | 5,443 | 69,471 | | | 2022 | 12,200 | 15,250 | 19,300 | 2,032 | 9,002 | 6,616 | 64,400 | | | 2021 | 11,600 | 14,500 | 16,499 | 1,197 | 9,362 | 6,672 | 59,830 | | Blair T. Rush | 2023 | 12,980 | 16,225 | - | 3,980 | 6,250 | 13,787 | 53,222 | | | 2022 | 12,200 | 15,250 | - | 2,748 | 7,639 | 13,187 | 51,024 | | | 2021 | 11,600 | 14,500 | - | 2,341 | 7,818 | 12,926 | 49,185 | | Stan R. Dunsmore | 2023 | 11,100 | 13,875 | 45,636 | 4,805 | 5,592 | 600 | 81,608 | | | 2022 | 12,200 | 15,250 | 39,198 | 4,578 | 6,423 | 600 | 78,249 | | | 2021 | 11,600 | 14,500 | 32,810 | 3,448 | 6,788 | 600 | 69,746 |
Summary Compensation Table
| (1) Perquisites and other personal benefits include the estimated personal use portion of the cost of a company-supplied automobile and personal reimbursement for cell phones and club memberships, which were used primarily, but not exclusively, for business purposes. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information concerning awards granted to the named executive officers for the year ended December 31, 2023 under the 1995 Stock Incentive Plan.
Grants of Plan-Based Awards
Grants of Plan-Based Awards
Grants of Plan-Based Awards
| | | | Estimated Future Payouts Under Non-Equity Incentive Awards (a) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (b) | | | | | | | Board/ | | | | | | | Grant Date | | | | Committee | | | | | | | Fair Value of | | | Grant | Action | Threshold | Target | Maximum | Threshold | Target | Maximum | Stock | | Name | Date | Date | $ | $ | $ | # | # | # | Awards ($) (b) | | J. Bradley Scovill | 1/31/2023 | 1/19/2023 | 67,103 | 201,250 | 301,875 | 2, 291 | 6,874 | 10,310 | 132,301 | | Mark A. Hughes | 1/31/2023 | 1/19/2023 | 33,250 | 99,750 | 149,625 | 913 | 2,698 | 4,047 | 51,930 | | Harold F. Hoose | 1/31/2023 | 1/19/2023 | 30,000 | 90,000 | 135,000 | 1,013 | 3,041 | 4,561 | 58,515 | | Blair T. Rush | 1/31/2023 | 1/19/2023 | 24,574 | 73,750 | 110,625 | 838 | 2,475 | 3,713 | 47,634 | | Stan R. Dunsmore | 1/31/2023 | 1/19/2023 | 21,325 | 64,000 | 96,000 | 705 | 2,081 | 3,121 | 40,045 |
Grants of Plan-Based Awards
| (a) Compensation opportunities under the Corporation’s Annual Incentive Award were established based on a percentage of 2023 base salary as recommended by the Compensation Committee and approved by the Board of Directors on January 19, 2023. Additional information related to the Annual Incentive Award Plan, including the performance criteria and amounts awarded for 2023 (expressed as a percentage of 2023 base salary), are provided in the Compensation Discussion and Analysis section of this proxy statement. |
Grants of Plan-Based Awards
| (b) The grant date fair market value of stock awards is computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “ASC”) topic 718, “Compensation—Stock Compensation.” The value used for restricted stock awards is based on the market value of the stock at the grant date, with no assumed forfeitures. The market value per share of the January 31, 2023 awards is $23.35. |
Grants of Plan-Based Awards
Restricted stock awards to NEOs under the Stock Incentive Plan in 2023 provide for vesting over a three-year term, with vesting for half of the shares dependent on satisfactory performance (time vesting) and vesting for half of the shares based on time vesting and upon the Corporation’s attainment of earnings-based performance-based standards, based on the following criteria:
Grants of Plan-Based Awards
| ● | Release of 50% (one-sixth of the total shares awarded) each year based on the Corporation achieving a percent ranking of at least 35% of the Core Return on Average Equity (ROAE) within a defined peer group of bank holding companies and thrifts for the defined measurement period as determined by the Compensation Committee. |
Grants of Plan-Based Awards
| ● | Release of 50% (one-sixth of the total shares awarded) each year based on the Corporation achieving a percent ranking of at least 65% of the Core Return on Average Assets (ROAA) within a defined peer group of bank holding companies and thrifts for the defined measurement period as determined by the Compensation Committee. |
Grants of Plan-Based Awards
In 2023, the Corporation met the performance conditions defined in the awards.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth information with respect to non-vested stock awards as of December 31, 2023 for the named executive officers. There were no outstanding stock option awards for the named executive officers as of December 31, 2023.
Outstanding Equity Awards at Fiscal Year-End
| | Stock Awards | | | | | Market | | | Number of | Value of | | | Shares or | Shares or | | | Units of | Units of | | | Stock | Stock | | | That Have | That Have | | | Not Vested | Not Vested | | Name | (#) | ($) | | J. Bradley Scovill | 15,205 | $341,048 | | Mark A. Hughes | 6,070 | $136,150 | | Harold F. Hoose, III | 6,710 | $150,505 | | Blair T. Rush | 4,495 | $100,823 | | Stan R. Dunsmore | 4,683 | $105,040 |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table sets forth information concerning the exercise of stock options granted, and the value realized on the vesting of restricted stock, during 2023 for each of the named executive officers.
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | | Number of | | Number of | | | | Shares Acquired | Value Realized | Shares Acquired | Value Realized | | | on Exercise | on Exercise | on Vesting | On Vesting | | Name | (#) | ($) | (#) | ($) | | J. Bradley Scovill | - | - | 4,518 | 106,602 | | Mark A. Hughes | - | - | 1,847 | 43,580 | | Harold F. Hoose, III | 3,521 | 5,722 | 1,968 | 46,435 | | Blair T. Rush | - | - | 3,320 | 67,772 | | Stan R. Dunsmore | - | - | 1,406 | 33,175 |
Pension Benefits
Pension Benefits The following table sets forth information with respect to pension benefits for the fiscal year ended December 31, 2023 for each of the named executive officers.
Pension Benefits
| | | | | Payments | | | | | Present Value | During | | | | Number of Years | of Accumulated | Last Fiscal | | | | Credited Service | Benefit | Year | | Name | Plan Name | (#) | ($)(2) | ($) | | Stan R. Dunsmore | Citizens Trust Company Pension Plan (1) | 18.5 | $214,475 | $0 |
Pension Benefits
| (1) Mr. Dunsmore is a participant in the Citizens Trust Company Pension Plan, a tax-qualified defined benefit plan. This plan covers certain employees who were employed by Citizens Trust Company on December 31, 2002, when the plan was amended to discontinue admittance of any future participant and to freeze benefit accruals. The Corporation acquired Citizens Bancorp, Inc. and its wholly-owned subsidiary, Citizens Trust Company, effective May 1, 2007. |
Pension Benefits
| (2) The present value of accumulated benefit is presented as of December 31, 2023, which is the measurement date the Corporation uses for financial reporting purposes. |
CEO Pay Ratio
CEO Pay Ratio The SEC requires disclosure of the ratio of the median employee’s annual total compensation to the total compensation of the principal executive officer (“PEO”). This ratio is commonly referred to as the “CEO Pay Ratio.” The Corporation’s PEO is Mr. Scovill, the President and Chief Executive Officer (“CEO”). For 2023, the annual total compensation of our CEO was 20.7 times that of the Corporation’s median employee, based on annual total compensation of $1,225,587 for Mr. Scovill and $59,125 for the median employee, detailed as follows:
CEO Pay Ratio
| | President | Median | | | and CEO | Employee | | Salary | $575,000 | $53,960 | | Bonus | - | 500 | | Stock Awards | 132,301 | - | | Non-Equity Incentive Plan | | | | Compensation | 146,168 | - | | All Other Compensation | 372,118 | 4,665 | | Total | $1,225,587 | $59,125 |
CEO Pay Ratio
The median employee was identified using a listing of all employees as of December 31, 2023 and calculating the median amount of total 2023 compensation as it would be reported based on the IRS instructions for Box 5, Medicare wages and tips. Actual amounts reported on Box 5 for 2023 were used for all employees who were employed throughout the entire year. We further annualized pay for those individuals not employed for a full year in 2023. As applicable, compensation reported on Box 5 included the amount paid in 2023 for salary, bonus, dividends on restricted stock and non-equity incentive plan (cash) awards, along with any amount deferred by the employee to the Savings & Retirement Plan (a 401(k) plan) and the imputed value of the cost of group term life insurance and certain perquisites. Compensation reported on Box 5 also included any amounts that vested in 2023 for SERP benefits and for stock awards (based on the market value of the stock on the vesting date). Compensation deferred at the election of the Corporation’s officers, and the amount of employer contributions to the ESOP and Savings & Retirement Plan, were excluded from Box 5. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Pay Versus Performance
Pay Versus Performance The SEC has adopted rules requiring disclosure of the relationship between executive compensation and financial performance. Consistent with these rules, the Corporation (“CZNC”) is disclosing the information presented in this “Pay Versus Performance” section. The Corporation’s process for evaluating executive compensation is described in the Compensation Discussion and Analysis section of this proxy statement. The following table sets forth summary information concerning executive compensation for each of the last four years.
Pay Versus Performance
Pay Versus Performance
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control The table that follows provides quantitative information regarding contracts, agreements, plans or arrangements that provide for payments to a named executive officer upon termination of employment. The table does not include information with respect to contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms, or operation, in favor of executive officers or the Corporation and that are available generally to all salaried employees.
Potential Payments upon Termination or Change in Control
| As of December 31, 2023: | | Supplemental | | Value of | Payment Under | | | | | Executive | Health | Restricted | Split Dollar | Citizens Trust | | | | Retirement | and | Stock | Bank Owned | Company | | | | Plan | Welfare | Subject to | Life Insurance | Pension | | | Cash | Benefit | Benefits | Acceleration | Programs (1) | Plan (2) | | Name | ($) | ($) | ($) | ($) | | | | Termination Due to Retirement | | | | | | | | J. Bradley Scovill | - | 1,271,506 | - | - | - | - | | Mark A. Hughes | - | 571,795 | - | - | - | - | | Harold F. Hoose, III | - | 243,634 | - | - | - | - | | Blair T. Rush | - | - | - | | - | | | Stan R. Dunsmore | - | 398,771 | - | - | - | 182,300 | | Termination Due to Disability | | | | | | | | J. Bradley Scovill | - | 1,271,506 | - | - | - | - | | Mark A. Hughes | - | 571,795 | - | - | - | - | | Harold F. Hoose, III | - | 243,634 | - | - | - | - | | Blair Rush | - | - | - | - | - | | | Stan Dunsmore | - | 398,771 | - | - | - | 182,300 | | Termination Without Cause or for Good Reason - Before a Change in Control | | | | | | | | J. Bradley Scovill | 986,358 | 1,271,506 | 16,067 | - | - | - | | Mark A. Hughes | 514,374 | 571,795 | 16,370 | - | - | - | | Harold F. Hoose, III | 244,716 | 243,634 | 10,443 | - | - | - | | Blair Rush | 551,897 | - | 17,189 | - | - | | | Stan Dunsmore | - | 398,771 | - | - | - | 182,300 | | Termination Due to Death | | | | | | | | J. Bradley Scovill | - | 1,271,506 | - | - | - | - | | Mark A. Hughes | - | 571,795 | - | - | - | - | | Harold F. Hoose, III | - | 243,634 | - | - | - | - | | Blair Rush | - | - | - | - | 674,610 | | | Stan Dunsmore | - | 398,771 | - | - | 768,000 | 82,000 | | Termination Without Cause or for Good Reason - Upon or After a Change in Control | | | | | | | | J. Bradley Scovill | 2,949,210 | 1,271,506 | 48,201 | 341,048 | - | - | | Mark A. Hughes | 1,537,978 | 571,795 | 49,110 | 136,150 | - | - | | Harold F. Hoose, III | 734,148 | 243,634 | 31,328 | 150,505 | - | - | | Blair Rush | 367,931 | - | 17,189 | 100,823 | | | | Stan Dunsmore | 256,000 | 398,771 | 24,380 | 105,040 | - | 182,300 |
Potential Payments upon Termination or Change in Control
| (1) The amounts represent death benefits payable under split-dollar life insurance policies acquired by the Corporation pursuant to business combinations. |
Potential Payments upon Termination or Change in Control
| (2) The amounts reflect the estimated lump sum value that would be paid by the Citizens Trust Company Pension Plan. |
Compensation of Directors
Compensation of Directors The following table summarizes the compensation paid by the Corporation and Bank to directors for the fiscal year ended December 31, 2023, other than J. Bradley Scovill who did not receive compensation as a director.
DIRECTOR COMPENSATION (1)(2)(3)
DIRECTOR COMPENSATION (1)(2)(3)
DIRECTOR COMPENSATION (1)(2)(3)
| | Fees | | | | | Earned or | | | | | Paid in | Stock | | | | Cash (4) | Awards (5) | Total | | Name | ($) | ($) | ($) | | Stephen M. Dorwart | 59,700 | 23,350 | 83,050 | | Susan E. Hartley | 49,500 | 23,350 | 72,850 | | Bobbi J. Kilmer | 56,000 | 23,350 | 79,350 | | Leo F. Lambert | 50,500 | 23,350 | 73,850 | | Terry L. Lehman | 86,000 | 23,350 | 109,350 | | Robert G. Loughery | 46,400 | 23,350 | 69,750 | | Frank G. Pellegrino | 56,800 | 23,350 | 80,150 | | Helen S. Santiago | 46,400 | 23,350 | 69,750 | | Timothy E. Schoener (6) | 17,400 | 0 | 17,400 | | Katherine W. Shattuck | 50,000 | 23,350 | 73,350 | | Aaron K. Singer | 51,800 | 23,350 | 75,150 |
DIRECTOR COMPENSATION (1)(2)(3)
(1) The columns disclosing option awards, non-equity incentive plan compensation, changes in pension value and nonqualified deferred compensation earnings, and other forms of compensation have been omitted from the table because no director earned any compensation during 2023 of a type required to be disclosed in those columns. (2) As of December 31, 2023, each non-employee director owned 1,000 shares of common stock awarded pursuant to the Independent Directors Stock Incentive Plan for which transfer restrictions had not yet lapsed. For each director, those shares had a value of $22,430 based on the closing price of the Corporation’s common stock on December 29, 2023 (the last business day of the year). (3) Effective January 31, 2024, the Corporation awarded 1,000 shares of restricted stock to each non-employee director under the 2023 Equity Incentive Plan. The value of the restricted stock was $21.39 per share, based on the average of the high and low sales price of the Corporation’s stock on January 30, 2024, and vest over (1) one year. The awards made in January 2024 are not included in the table. (4) Includes annual cash retainer, Chairman or Committee chair retainer (if any) and attendance fees. (5) The amount shown in the “Stock Awards” column equals the value of restricted stock awards of 1000 shares, determined based on the grant date fair market value of $23.35 per share. (6) Mr. Schoener received 1,000 shares of restricted stock on January 31, 2023 but forfeited them upon his retirement as a director on April 20, 2023. Director Fees. Compensation of the Board of Directors is established by the Board upon recommendation of the Compensation Committee. In developing its recommendations for 2023, the Compensation Committee considered information provided by Pearl Meyer. In 2023, non-employee directors received cash compensation for their service as directors in accordance with the following fee schedule. Employee directors are not entitled to additional compensation for board or committee service.
DIRECTOR COMPENSATION (1)(2)(3)
| Annual Fees: | | | Cash Retainer (all Directors, including Chairman) | $20,000 | | Chairman of the Board Fee | $25,000 | | Committee Chair Fees: | | | Executive Committee | None | | M&A Committee | None | | Audit Committee | $7,500 | | Compensation Committee | $5,000 | | All Other Committees | $4,000 | | Per-Meeting Attendance Fees: | | | Board meetings (all Directors) | $1,000 | | Committee meetings | | | Audit Committee | $700 | | Compensation Committee | $700 | | All Other Committees | $600 |
DIRECTOR COMPENSATION (1)(2)(3)
A director who, by invitation, attends a meeting of a committee of which he or she is not a regular member will be paid the same attendance fee as is payable to members of that committee. Attendance fees are not doubled in the event of joint meetings of the Corporation and Bank Boards. Stock Incentive Plans. In addition to cash fees, non-employee directors may also receive compensation in the form of Corporation common stock. Awards to non-employee directors prior to 2024 were made under the Independent Directors Stock Incentive Plan. As described in more detail in the “2023 Program Components” section of Compensation Discussion and Analysis, in April 2023, the shareholders approved the 2023 Equity Incentive Plan which permits the continued use of equity incentives as a component of compensation to participating employees and directors. The 2023 Equity Incentive Plan will govern awards made on and after April 20, 2023.