John Montgomery
About John Montgomery
John H. Montgomery, age 62, is President & Chief Executive Officer of CB Financial Services, Inc. and Community Bank, and has served on the Company’s Board since 2020; he became CEO in August 2020 and holds an MBA from Drexel University . He is an accomplished bank executive with over 32 years of experience, including chief credit and division leadership roles, and has served on a bank board and executive committee . Pay-versus-performance disclosure shows the Company’s TSR increased from 133.58 to 162.42 between 2023 and 2024, while net income declined from $22.55 million to $12.59 million over the same period . In 2025, as CEO he articulated an accretive balance sheet repositioning expected to add ~20 bps to NIM and ~$0.41 to annual EPS with anticipated recovery of the ~$9.3 million after-tax realized loss over ~4.2 years .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Bank (St. Louis, MO) | Chief Credit Officer; Director; Executive Committee member | 2014–Aug 2020 | Led credit at a privately-held ~$6B bank; board/exec committee roles signal enterprise governance and risk oversight experience . |
| Susquehanna Bank | President, Pennsylvania Division; Senior Credit Risk Officer | ~9 years | Division P&L leadership and enterprise credit risk management across multiple executive positions . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Bank | Director; Executive Committee | 2014–2020 | Board governance and executive committee decision-making; informs capital allocation and risk practices . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $449,221 | $470,585 |
| Cash Bonus ($) | $300,000 special bonus related to sale of Exchange Underwriters, Inc. (12/20/2023) | — |
| Non-Equity Incentive Plan ($) | $88,265 (paid for 2023 performance) | $73,937 (paid for 2024 performance) |
| Stock Awards – Grant Date FV ($) | $193,107 | $66,360 |
| Option Awards – Grant Date FV ($) | $94,641 | $66,393 |
| All Other Compensation ($) | $56,903 | $51,272 |
| Total ($) | $1,182,137 | $728,547 |
Notes:
- 2023 special bonus included 6,250 RSUs and 10,000 stock options, both immediately vested at grant; grant-date values $150,188 and $56,428; option exercise at $24.03 (12/20/2023) .
- “All Other Compensation” (2024) detailed: 401(k) employer contributions $17,250, insurance premiums $16,451, company car $4,189, cell phone $840, cash in lieu of dividends on restricted stock $8,283, split-dollar life insurance imputed income $4,259 .
Performance Compensation
| Element | Structure | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|---|
| Annual Incentive (CEO) | Corporate Scorecard; paid cash + RSUs | Pre-tax income | 55% | — | — | Included in $73,937 non-equity payout for 2024 | CEO payout split is 50% cash / 50% equity (restricted stock awards) |
| Annual Incentive (CEO) | Corporate Scorecard | Nonperforming assets ratio | 15% | — | — | See above | See above |
| Annual Incentive (CEO) | Corporate Scorecard | Deposit growth | 15% | — | — | See above | See above |
| Annual Incentive (CEO) | Corporate Scorecard | Loan growth | 15% | — | — | See above | See above |
Additional parameters:
- CEO target incentive opportunity: 45% of salary; payouts can range from 10–80% based on Threshold/Target/Superior achievement; bonus paid in combination of cash and equity (CEO 50/50 split) .
- Peer data from like-sized financial institutions considered in evaluating performance goals .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Ownership (as of 3/28/2025) | 61,220 shares; 1.2% of outstanding (5,102,189) |
| Pledging | None of the named individuals has pledged any shares |
| Ownership vehicle details | Includes 2,500 shares through retirement account |
Outstanding Equity Awards (as of 12/31/2024):
| Grant/Type | Exercisable Options | Unexercisable Options | Exercise Price | Expiration | Unvested RSUs (shares) | Market Value of Unvested RSUs |
|---|---|---|---|---|---|---|
| 8/31/2020 Options & RS | 6,000 | 3,000 | $18.60 | 8/31/2030 | 1,000 | $28,580 |
| 12/14/2021 RS (footnote (2)) | — | — | — | — | 500 | $14,290 |
| 2/16/2023 Options & RS | 4,000 | 6,000 | $26.25 | 2/16/2032 | 1,500 | $42,870 |
| 2/16/2024 Options & RS | 1,700 | 6,800 | $22.01 | 2/16/2033 | 1,560 | $44,585 |
| 12/20/2023 Options & RS (immediately vested) | 10,000 | — | $24.03 | 12/20/2033 | — | — |
| 2/16/2024 Options & RS (2024 plan) | — | 13,790 | $22.12 | 2/16/2034 | 3,000 | $85,740 |
Vesting schedules:
- (1) Five equal installments commencing 8/31/2021 .
- (2) RS awards vest five equal installments commencing 12/14/2021 .
- (4) Five equal installments commencing 2/16/2023 .
- (5) Five equal installments commencing 2/16/2024 .
- (6) Options and RS immediately vested on 12/20/2023 .
- (7) Five equal installments commencing 2/16/2025 .
Equity plan capacity and shift:
- 2024 Equity Incentive Plan approved; share limit 287,500 restricted shares available as of 12/31/2024; no further awards under 2021 plan .
- Historical practice avoids granting options near major SEC filings; grants not timed around MNPI .
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement Date | August 31, 2020 |
| Current Term End | April 30, 2027; auto-renews one year annually on May 1 subject to disinterested board performance review and approval |
| Base Salary | $470,585; target bonus expressed as % of salary; annual equity award target grant-date FV = 20% of base salary |
| Perquisites | Company-owned automobile with operating expenses reimbursed; benefits consistent with management plans |
| Severance (no cause / good reason) | Cash lump sum equal to base salary for remaining term or 12 months (greater), plus 12 monthly COBRA reimbursement if elected |
| Change-in-Control (CoC) | Cash lump sum equal to 3× highest base salary rate in year of termination or prior three years, plus 18 monthly COBRA reimbursement if elected |
| Trigger Design | CoC benefits conditioned on qualifying termination (without cause or for good reason) → double-trigger |
| Restrictive Covenants | Non-compete and non-solicit for one year following termination (except following CoC) |
| Split-Dollar Life Insurance | Beneficiary eligible for death benefit: $500,000 less value of 5,000 RS and 15,000 options granted 8/31/2020, capped at net death proceeds; policy owned by Bank |
Board Governance and Director Service
| Item | Detail |
|---|---|
| Board Seat | Director since 2020; nominated for a term ending in 2028 at the 2025 annual meeting |
| Independence | Not independent (employee); more than a simple majority of the Board is independent; Ralph Burchianti also not independent until retirement in April 2024 |
| Board Leadership | Chairman: Mark E. Fox; Vice Chairman: Charles R. Guthrie, CPA; Board has not designated a Lead Independent Director |
| Committees | Montgomery is not listed as a member of the Audit, Compensation, or Nominating/Corporate Governance Committees |
| Committee Structure | Committee membership and meeting counts (FY2024): Audit (8), Compensation (4), Nominating/Corporate Governance (2) |
| Director Compensation | Director compensation table covers non-employee directors; employee directors do not receive separate director fees |
Say‑on‑Pay and Shareholder Votes (2024 annual meeting):
| Proposal | For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|---|
| 2024 Equity Incentive Plan | 2,325,784 | 237,887 | 88,185 | 1,307,068 |
| Say‑on‑Pay (NEOs) | 2,306,207 | 245,547 | 100,102 | 1,307,068 |
Compensation Structure Analysis
- Mix shift: 2024 total compensation declined vs. 2023 as special transaction bonus rolled off; 2024 still included equity (RS and options) and a smaller non‑equity incentive payout .
- Equity-heavy bonus design for CEO: 50% cash / 50% equity supports alignment and reduces near‑term cash outlay; other executives at 60–70% cash, 30–40% equity .
- Performance metrics: Incentive plan emphasizes profitability and balance sheet quality (pre‑tax income 55%; NPA ratio 15%), with growth in deposits and loans (15% each), referencing peer benchmarks .
- Options cadence and vesting: Multiple tranches vest annually through 2029 (e.g., 2025-start five-year schedules), potentially creating periodic selling windows as awards vest; December 2023 awards immediately vested .
Risk Indicators & Red Flags
- Pledging/Hedging: No pledging disclosed for named individuals; hedging policy not specifically disclosed in proxy .
- Equity award timing: Company practice avoids grants near major SEC filings; proxy states grants are not timed around MNPI .
- CoC Economics: 3× base salary for CEO upon double‑trigger termination post‑CoC; elevates potential transaction costs but conditioned on qualifying termination .
- Section 16 Compliance: Company believes all required insiders complied with ownership reporting in 2024 .
Equity Plan and Outstanding Awards Detail (Vesting Focus)
| Award Date | Type | Initial Vest Start | Installments | Notes |
|---|---|---|---|---|
| 8/31/2020 | Options & RS | 8/31/2021 | 5 equal installments | 2020 package under 2015 plan; split‑dollar references these awards . |
| 12/14/2021 | RS | 12/14/2021 | 5 equal installments | Restricted stock only . |
| 2/16/2023 | Options & RS | 2/16/2023 | 5 equal installments | Under 2021 plan . |
| 12/20/2023 | Options & RS | Grant date | Immediate vest | Special awards tied to subsidiary sale completion . |
| 2/16/2024 | Options & RS | 2/16/2024 | 5 equal installments | Under 2021 plan . |
| 2/16/2024 (2024 Plan) | Options & RS | 2/16/2025 | 5 equal installments | Under 2024 plan; share limit 287,500, available as of 12/31/2024 . |
Investment Implications
- Alignment: CEO’s 50/50 cash-equity bonus design and meaningful personal stake (61,220 shares; 1.2% outstanding) point to solid alignment; no pledging reduces collateral risk .
- Vesting overhang: Multi-year option/RSU vesting cycles beginning 2025 could create episodic selling pressure as tranches vest; monitor Form 4s around February and August schedules .
- Retention/CoC: Auto‑renewing term to 2027 and double‑trigger CoC protection (3× base) lower near‑term departure risk but raise transaction costs in a sale scenario .
- Performance linkage: Incentive weighting favors profitability and asset quality; 2024 PvP shows TSR rising while net income fell, suggesting equity award values and CAP moderated with earnings; watch execution on NIM/EPS benefits from 2025 securities repositioning guided by Montgomery .
- Governance: Separation of CEO and Chairman with independent committee structures mitigates dual‑role concerns; Montgomery not on key committees, preserving independence in oversight .