DEF 14A of Sachem Capital Corp., Apr 30, 2025

DEF 14A of Sachem Capital Corp.

Filed Apr 30, 2025 · FY20240001104659-25-042273

Open on EDGAR

  1. Proposal No. 1 ELECTION OF DIRECTORS

    Proposal No. 1 ELECTION OF DIRECTORS Five (5) directors are to be elected at the Annual Meeting. All directors hold office until the next annual meeting of shareholders and until their respective successors are duly elected and qualified. It is intended that votes pursuant to the enclosed Proxy will be cast for the election of the five (5) director nominees named below. If any such nominee should become unable or unwilling to serve as a director, the Proxyholder will vote for the election of an alternate candidate, if any, as shall be designated by the Board. The Board has no reason to believe that any of these nominees will be unable to serve if elected. Each nominee has consented to being named in this Proxy Statement and to serve if elected. All five (5) nominees are currently members of the Board. There are no family relationships among any of the executive officers or directors of the Company. Our director nominees and their respective ages as of the Record Date are as follows:

  2. Proposal No. 1 ELECTION OF DIRECTORS

    | Name | Age | Position | | John L. Villano | 64 | Chairman of the Board, Chief Executive Officer and President | | Leslie Bernhard(1)(4) | 81 | Director | | Arthur L. Goldberg(2)(4) | 86 | Director | | Brian A. Prinz(3)(4) | 72 | Director | | Jeffery C. Walraven | 56 | Director and Interim Chief Financial Officer |

  3. Proposal No. 1 ELECTION OF DIRECTORS

    (1) Chair of the Compensation Committee (“Compensation Committee”). (2) Chair of the Audit Committee (“Audit Committee”). (3) Chair of the Nominating and Corporate Governance Committee (“Nominating and Corporate Governance Committee”). (4) Member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Set forth below is a brief description of the background and business experience of our director nominees: John L. Villano, one of our founders, is Chairman of the Board, Chief Executive Officer and President. Mr. Villano is one of our founders. Mr. Villano was appointed as a director and Chairman of the Board, Co-Chief Executive Officer, Chief Financial Officer and Secretary in February 2017, immediately prior to our initial public offering. In November 2019, upon the resignation of his brother, Jeffrey C. Villano, he became our sole Chief Executive Officer and was appointed Treasurer in addition to his then current positions with the Company and resigned as Secretary. Mr. Villano served as our Chief Financial Officer until August 2022 and as our Treasurer until July 2022. He served as our Interim Chief Financial from May 2023 until June 2024. Mr. Villano has been designated as our principal executive officer. Mr. Villano is a certified public accountant and was engaged in the private practice of accounting and auditing for almost 30 years. His responsibilities include overseeing all aspects of our business operations, including loan origination and servicing, investor relations, brand development and business development. He is also responsible for all our accounting and financial matters. Mr. Villano holds a bachelor’s degree in accounting from the University of Rhode Island in 1982. We believe that Mr. Villano’s experience in managing our business since its inception and his professional background as a certified public accountant make him an important part of our management team and make him a worthy candidate to serve on the Board and to lead the Board as Chairman. Leslie Bernhard was appointed as a director in February 2017. Ms. Bernhard brings extensive public company experience both as a member of C-level management and as a director of multiple corporations. In February 2024, Ms. Bernhard joined the board of directors of Sharplink Gaming Inc. (NASDAQ: SBET), an online technology company. In addition, since November 2023, she has been serving as the chairman of the board of Nexalin Technology, Inc. (NASDAQ: NXL), a company that designs and develops medical devices that utilizes bioelectronic medical technology. She served as an independent director of Milestone Scientific Inc. (NYSE American: MLSS), a developer and manufacturer of medical and dental devices, from May 2003 until January 4, 2023 and as the non-executive chairman of the Milestone board of directors from October 2009 through January 4, 2023. She also served as interim chief executive officer of Milestone from October 2017 to December 2017. From 2007 through September 2018, Ms. Bernhard served as an independent director of Universal Power Group, Inc. (NYSE American: UPGI), a global supplier of power solutions, and as a consultant to Universal Power Group, Inc. from September 2018 to December 2020. In 1986, Ms. Bernhard co-founded AdStar, Inc., an electronic ad intake service to the newspaper industry taking it public in 1999 (NASDAQ: ADST), and served as its president, chief executive officer and executive director until 2012. Ms. Bernhard holds a BS Degree in Education from St. John’s University. We believe that Ms. Bernhard’s experience as an entrepreneur and her service as a director of other public corporations enable her to make important contributions to the Board. Arthur L. Goldberg was appointed as a director in February 2017. He has been a private accounting and business consultant since April 2012. He has also held senior executive positions, including chief financial officer and chief operating officer, and served as a director of several public and private companies. From March 2011 through June 2015, he served as a director of Sport Haley Holdings, Inc., a manufacturer and distributor of sportswear and furniture. From January 2008 through March 2013, he served as a member of the board of directors of SED International Holdings, Inc. (OTC: SEDN), a distributor of consumer electronics. From January 2008 through March 2012, he served as the chief financial officer of Clear Skies Solar, Inc., an installer of solar panels. From January 2008 through June 2008, he served as the chief financial officer of Milestone Scientific, Inc. (NYSE American: MLSS), a developer and manufacturer of medical and dental devices. From June 1999 through April 2005, Mr. Goldberg was a partner with Tatum CFO Partners, LLP, which provided interim CFO staffing services for public and private companies. Mr. Goldberg is an attorney and a certified public accountant and holds a B.B.A. degree from the City College of New York, an M.B.A. from the University of Chicago and J.D. and LLM degrees from the New York University School of Law. Mr. Goldberg was selected as a director because of his experience as the senior executive, operations and financial officer of several public companies and because of his background in accounting and law. We believe that his background and experience provide the Board with a perspective on corporate finance matters. Given his financial experience, the Board has also determined that Mr. Goldberg qualifies as the Audit Committee financial expert, pursuant to Item 407(d)(5) of Regulation S-K promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Brian A. Prinz was appointed as a director in February 2017. He is currently retired and, since 2016, has been a member of the board of directors of Current, Inc., a leading manufacturer of laminated products including sheeting, tubes, rods, spacers and standoffs, as well as electrical grade laminates, a variety of carbon fiber products and other industrial products, which are used in various industries including construction, recreation, energy exploration and defense. From September 2022 to September 2023, Mr. Prinz served as a consultant to Current, Inc. Prior to that, from September 2001 to September 2022, he was the president and chief financial officer of Current, Inc., with which he was employed since 1976. Mr. Prinz graduated from Bryant College with a B.A. in 1976. We believe that his background and experience make him well qualified to serve as a member of the Board.

  4. Proposal No. 1 ELECTION OF DIRECTORS

    Jeffery C. Walraven was appointed as a director in August 2024 and Interim Chief Financial Officer in December 2024. Mr. Walraven brings to the Board experience in public company accounting, corporate capital markets and background in the real estate industry. Mr. Walraven is a co-founder and chief operating officer of Freehold Properties, Inc., a real estate investment trust (REIT) focused on specialty industrial and retail real estate, since its formation in May 2019. In addition, he has served as an independent director and member of the audit committee of Broad Street Realty, Inc. (OTCQX: BRST), a real estate company that owns, operates, develops, and redevelops primarily essential grocery-anchored shopping centers and mixed-use properties, since September 2023. From January 2014 to May 2019, Mr. Walraven served as executive vice president and chief financial officer of MedEquities Realty Trust, Inc. (formerly NYSE: MRT), a REIT specializing in healthcare properties. From July 2007 to June 2014, Mr. Walraven served as an assurance partner of BDO USA, LLP, an international accounting firm, and was appointed managing partner of BDO USA’s Memphis office in January 2013. Mr. Walraven is formerly a certified public accountant and graduated from Bob Jones University with a B.S. in Financial Management and from Clemson University with an M.P.A. in professional accountancy. We believe Mr. Walraven’s experience in public company accounting, corporate capital markets and background in the real estate industry make him well qualified to serve as a member of the Board. The Board recommends a vote FOR the election of each director nominee, and Proxies that are signed and returned will be so voted, unless otherwise instructed.

  5. COMPENSATION OF DIRECTORS

    COMPENSATION OF DIRECTORS The Board periodically reviews the type and form of compensation paid to our non-employee directors. Based on this review, the Board makes adjustments to the non-employee director compensation program in an effort to provide competitive compensation to our non-employee directors. For 2024, our Compensation Committee retained Farient Advisors, LLC (“Farient”) to provide it with information, recommendations, and other advice relating to director compensation. Our non-employee director compensation plan, as amended on September 30, 2024 (the “Director Plan”), provides the following compensation for our non-employee directors: • effective January 1, 2024, each non-employee director receives cash compensation in the total amount of $90,000 per year, which amount is paid in equal quarterly installments of $22,500 on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1); • the additional cash compensation payable to the chairperson of each of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee remain unchanged as follows: • the chairperson of the Audit Committee receives an additional cash compensation of $7,500 per year, payable in equal quarterly installments of $1,875 on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1); • the chairperson of the Compensation Committee receives an additional cash compensation of $5,000 per year, payable in equal quarterly installments of $1,250 on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1); • the chairperson of the Nominating and Corporate Governance Committee receives an additional cash compensation of $2,500 per year, payable in equal quarterly installments of $625 on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1); • each non-employee director has the option to elect to receive an additional cash compensation of $20,000 payable in a lump sum (the “Cash Option”) or a grant of fully vested Common Shares with a grant date value of $20,000 based on the fair market value of our Common Shares on the date he or she is re-elected to serve on the Board; and • the non-employee director serving on our Loan Approval Committee receives an additional cash compensation of $10,000 per year, payable in equal quarterly installments of $2,500 on the first day of each calendar quarter (i.e., January 1, April 1, July 1, and October 1). John L. Villano, an executive officer as well as a director, does not receive compensation in connection with his position as a member of the Board. Jeffery C. Walraven, our Interim Chief Financial Officer and a director, does not receive any compensation for his Board service so long as he is serving as Interim Chief Financial Officer. The following table provides compensation information for the year ended December 31, 2024 for each of the non-employee directors. The table excludes Mr. Villano, who is a Named Executive Officer of the company and did not receive any additional compensation for his service as a director in 2024. The compensation received by Mr. Villano during 2024 is set forth in the section of this Proxy Statement captioned “Executive Compensation — 2024 Summary Compensation Table.”

  6. COMPENSATION OF DIRECTORS

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards($)(2) | All Other Compensation | Total ($) | | Leslie Bernhard | $131,560 | — | — | $131,560 | | Arthur L. Goldberg | $134,060 | — | — | $134,060 | | Brian A. Prinz | $136,560 | — | — | $136,560 | | Jeffery Walraven(3) | $42,500 | — | $31,250 | $73,750 |

  7. COMPENSATION OF DIRECTORS

    For the year ended December 31, 2024, each of Ms. Bernhard and Messrs. Goldberg, Prinz and Walraven chose the Cash Option upon their re-election to the Board at our 2024 Annual Meeting of Shareholders. (2) In 2024, no stock awards were issued to the non-employee directors. (3) Mr. Walraven was appointed to the Board on August 21, 2024. From August 21, 2024, through December 12, 2024, Mr. Walraven earned $42,500 in director compensation. Effective as of December 13, 2024, Mr. Walraven was appointed as our Interim Chief Financial Officer. In connection with his appointment, Mr. Walraven is compensated at the rate of $62,500 per month. Mr. Walraven’s appointment is on a month-to-month basis and can be terminated by either party as of the end of any calendar month at any time by giving notice to the other no later than the 15th day of that month. For the period from December 13, 2024 through December 31, 2024, Mr. Walraven earned $31,250 as our Interim Chief Financial Officer. Mr. Walraven continues to be a member of the Board, but did not receive any compensation for his Board service after he was appointed as our Interim Chief Financial Officer effective December 13, 2024. Mr. Walraven has resigned from the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of the Board upon his appointment as our Interim Chief Financial Officer.

  8. 2024 Summary Compensation Table

    2024 Summary Compensation Table The following Summary Compensation Table sets forth the compensation earned by or paid to (1) our principal executive officer during the years ended December 31, 2024 and 2023 and (2) the individual who would have been the most highly compensated executive officer other than our principal executive officer but for the fact that the individual was not serving as an executive officer as of December 31, 2024, each of whom is qualified as a “Named Executive Officer” as defined in Item 402(m)(2) of Regulation S-K (the “Named Executive Officers”). Mr. Walraven was our most highly compensated executive officer as of December 31, 2024 (other than our principal executive officer), but his total 2024 compensation for serving as our Interim Chief Financial Officer did not exceed $100,000; therefore, he is not a Named Executive Officer for the year ended December 31, 2024.

  9. 2024 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | All Other Compensation ($) | Total ($) | | John L. Villano | 2024 | $750,000 | $300,000 | $506,712 | $426,332(2) | $1,983,044 | | Chairman of the Board, President, Chief Executive Officer and Director | 2023 | $750,000 | $337,500 | $506,544 | $114,392(3) | $1,708,436 | | Nicholas M. Marcello(4) Former Chief Financial Officer | 2024 | $249,520 | $20,000 | — | $16,599(5) | $286,119 |

  10. 2024 Summary Compensation Table

    (1) Represents the grant date fair value of the restricted stock awards granted in 2024 and 2023. In each case, the amounts were determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 based on the closing price of our Common Shares on the date of grant. The value ultimately realized by the Named Executive Officers upon vesting of the awards may or may not be equal to this determined amount. (2) Represents (i) an auto allowance of $26,000 per annum, (ii) a one-time payment by the Company in the amount of $394,796 to cover the estimated tax liability for the restricted stock awards to Mr. Villano that vested in 2024, and (iii) reimbursements for insurance costs incurred totaling $5,536 pursuant to the terms of Mr. Villano’s employment agreement. (3) Represents (i) an auto allowance of $26,000 per annum and (ii) a one-time payment by the Company in the amount of $88,392 to cover the estimated tax liability for the restricted stock awards to Mr. Villano that vested in 2023. (4) Mr. Marcello served as our Chief Financial Officer from August 8, 2024 to December 10, 2024 and as our Interim Chief Financial Officer from June 5, 2024 to August 7, 2024. (5) Represents a one-time payment by the Company in the amount of $16,599 to cover the estimated tax liability for the restricted stock awards to Mr. Marcello that vested in 2024.

  11. Outstanding Equity Awards at Fiscal Year-End 2024

    Outstanding Equity Awards at Fiscal Year-End 2024 The following table sets forth information concerning outstanding equity awards to the Named Executive Officers as of December 31, 2024.

  12. Outstanding Equity Awards at Fiscal Year-End 2024

    | | | Stock Awards | | | Name | Grant Date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | | John L. Villano | 4/5/2022 | 32,808 (2) | 44,291 | | | 2/17/2023 | 87,260(2) | 117,801 | | | 3/19/2024 | 111,857(2) | 151,007 |

  13. Outstanding Equity Awards at Fiscal Year-End 2024

    (1) Calculated based on the closing price of our Common Shares of $1.35 per share on December 31, 2024. (2) One-third of each restricted stock award vests on January 1st of the first three years following the grant date, subject to Mr. Villano continued service with the Company. Unvested shares may not be transferred, sold, pledged, hypothecated or assigned, and are subject to forfeiture.

  14. Pay Versus Performance Table

    Pay Versus Performance Table As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid to our principal executive officer (“PEO”) and our other Named Executive Officers (“Non-PEO Named Executives”) and certain financial performance of the Company for each of the fiscal years ended December 31, 2024, 2023, and 2022 as a smaller reporting company.

  15. Pay Versus Performance Table

    | Year (a) | Summary Compensation Table Total for PEO(1) (b) | Compensation Actually Paid to PEO(2) (c) | Average Summary Compensation Table Total for Non-PEO Named Executives(3) (d) | Average Compensation Actually Paid to Non-PEO Named Executives(2) (e) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(4) (f) | Net Income (g) | | 2024 | $1,983,044 | $1,189,510 | $286,119 | $271,373 | $44.35 | $(39,570,938) | | 2023 | $1,708,436 | $1,887,537 | — | — | $81.16 | $15,899,153 | | 2022 | $1,524,990 | $1,202,148 | $314,998 | $284,758 | $65.41 | $20,908,651 |

  16. Pay Versus Performance Table

    (1) For each year shown, the PEO was John L. Villano. The values reflected in this column represent the “Total” compensation set forth in the Summary Compensation Table (“SCT”) on page 16 above. (2) Compensation actually paid (“CAP”) is defined by the SEC and is computed in accordance with Item 402(v) of Regulation S-K as follows:

  17. Pay Versus Performance Table

    | Adjustments to Determine CAP to the PEO | 2024 | 2023 | 2022 | | Total Compensation in the Summary Compensation Table | $1,983,044 | $1,708,436 | $1,524,990 | | Deduction for Amounts Reported under the “Stock Awards” Column in the Summary Compensation Table | $(506,712) | $(506,544) | $(500,000) | | Deduction for Amounts Reported under “Option Awards” Column in the Summary Compensation Table | — | — | — | | Add the fair value as of the end of the covered fiscal year of all awards granted during the covered fiscal year that are outstanding and unvested as of the end of the covered fiscal year | $151,007 | $489,529 | $324,803 |

  18. Pay Versus Performance Table

    | Adjustments to Determine CAP to the PEO | 2024 | 2023 | 2022 | | Add the amount equal to the change as of the end of the covered fiscal year (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year | $(286,963) | $42,061 | $(152,278) | | Add for awards that are granted and vest in the same year, the fair value as of the vesting date | — | — | — | | Add the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year | $(254,330) | $40,814 | $(76,139) | | Deduction for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during the covered fiscal year, the amount equal to the fair value at the end of the prior fiscal year | — | — | — | | Add the dollar value of any dividends or other earnings paid on stock or option awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year | $103,464 | $113,242 | $80,772 | | Total Adjustments | $(793,534) | $179,101 | $(322,842) | | CAP to the PEO | $1,189,510 | $1,887,537 | $1,202,148 |

  19. Pay Versus Performance Table

    | Adjustments to Determine CAP to the other Non-PEO Named Executives | 2024 | 2023 | 2022 | | Total Average Compensation in the Summary Compensation Table | $286,119 | — | $314,998 | | Deduction for Amounts Reported under the “Stock Awards” Column in the Summary Compensation Table | — | — | $(30,240) | | Deduction for Amounts Reported under “Option Awards” Column in the Summary Compensation Table | — | — | — | | Add the fair value as of the end of the covered fiscal year of all awards granted during the covered fiscal year that are outstanding and unvested as of the end of the covered fiscal year | — | — | — | | Add the amount equal to the change as of the end of the covered fiscal year (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year | $(6,373) | — | — | | Add for awards that are granted and vest in the same year, the fair value as of the vesting date | $(11,983) | — | — | | Add the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year | — | — | — | | Deduction for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during the covered fiscal year, the amount equal to the fair value at the end of the prior fiscal year | — | — | — |

  20. Pay Versus Performance Table

    | Adjustments to Determine CAP to the other Non-PEO Named Executives | 2024 | 2023 | 2022 | | Add the dollar value of any dividends or other earnings paid on stock or option awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year | $3,610 | — | — | | Total Adjustments | $(14,746) | $— | $(30,240) | | CAP to the other Non-PEO Named Executives | $271,373 | $— | $284,758 |

  21. Pay Versus Performance Table

    The dollar amounts reported in column (d) represent the average of the amounts reported for the Non-PEO Named Executives as a group in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the Non-PEO Named Executives in each applicable year are as follows: (i) for 2024, Nicholas M. Marcello, our former Chief Financial Officer; (ii) for 2023, we did not have any Non-PEO Named Executives; and (iii) for 2022, John E. Warch and William C. Haydon, our former Chief Financial Officer and former Chief Investment Officer, respectively. (4) The amounts reported represent the measurement period value of an investment of $100 in our Common Shares on December 31, 2021, and then valued again on December 30, 2022 (the last trading day of the 2022 fiscal year); December 29, 2023 (the last trading day of the 2023 fiscal year); and December 31, 2024 (the last trading day of the 2024 fiscal year ) based on the closing price per share of our Common Shares as of such dates and assuming the reinvestment of dividends.

  22. Relationship Between Compensation Actually Paid and Financial Performance Measures

    Relationship Between Compensation Actually Paid and Financial Performance Measures The relationship between the CAP to our PEO and to our Non-PEO Named Executives, with (i) our cumulative total shareholder return (“TSR”), and (ii) our net income, in each case, for the fiscal years ended December 31, 2024, 2023, and 2022 is described as follows: From 2022 to 2024, the CAP to our PEO decreased by $12,638, or 1.1%, from $1,202,148 to $1,189,510. From 2022 to 2024, the CAP to our Non-PEO Named Executives decreased by $13,385, or 4.7%, from $284,758 to $271,373. We did not have any Non-PEO Named Executives in 2023. From 2022 to 2024, the Company’s TSR decreased by approximately 32.2% from $65.41 to $44.35 based on an investment of $100 in our Common Shares on December 31, 2021 and then valued again on the last trading day of the fiscal year 2022 as compared to 2024, and our net income decreased by approximately 289.3%, from net income of $20,908,651 in 2022 to a net loss of $39,570,938 in 2024.