Thomas E. Freeman
About Thomas E. Freeman
Independent director of Citizens Financial Services, Inc. (CZFS) since 2010; age 64 as of the February 24, 2025 record date . Retired regional manager with Blue Ridge Communications, bringing 43 years of operating experience and community engagement; currently chairs the Audit and Examination Committee . Board tenure ~14 years per the Board Skills Matrix . CZFS’s Board deems Freeman independent under Nasdaq rules (only Messrs. Black, Richards and Jones are non-independent) .
Past Roles
| Organization | Role | Tenure | Committees / Impact |
|---|---|---|---|
| Blue Ridge Communications | Regional Manager | 43 years | Business expertise and civic/philanthropic involvement cited as valuable to the Board |
External Roles
| Entity | Role | Sector | Notes |
|---|---|---|---|
| None disclosed | — | — | Proxy biography lists no other public company directorships; emphasizes local civic/philanthropic involvement |
Board Governance
- Committee assignments (as of Feb 24, 2025): Audit & Examination Committee – Chair; Compensation/Human Resource Committee – Member; Governance & Nominating Committee – Member .
- Committee activity: Audit (6 meetings in 2024), Compensation (10), Governance (8) .
- Independence: Board states all directors except Messrs. Black, Richards and Jones are independent; Freeman is independent .
- Attendance: Board held 12 regular meetings in 2024; each director attended at least 83% of Board and assigned committee meetings . All 12 directors then serving attended the 2024 Annual Meeting .
- Engagement: Board conducted multiple trainings; Freeman (Audit Chair) attended the two‑day Bank Director’s Bank Audit & Risk Conference (topics included regulatory expectations, risk, cybersecurity, interest rate planning, data) .
- Board leadership and oversight: Separate Chair (R. Joseph Landy) and CEO (Randall E. Black); Lead Independent Director (Rinaldo A. DePaola); 4 executive sessions in 2024; 2 meetings of independent directors in 2024 .
Fixed Compensation
| Year | Fees Earned or Paid in Cash ($) | Stock Awards ($) | All Other ($) | Total ($) |
|---|---|---|---|---|
| 2023 | 40,432 | 12,376 | 647 | 53,455 |
| 2024 | 41,210 | 18,411 | 398 | 60,019 |
| Fee Component (2024 policy) | Amount |
|---|---|
| Annual retainer (standard non-employee directors) | $26,375 |
| Board meeting / strategic retreat / training session | $675 per meeting |
| Committee meeting attendance | $350 monthly fee |
| Board conference call | $185 |
| Regional board meeting | $225 per meeting |
| Committee Chair retainer (Credit, Audit, Compensation, Governance) | $2,400 annual |
| Director life insurance benefit | $100,000 (active; declines with age; $1,493 total premiums in 2024 across directors) |
Performance Compensation
| Equity Grant Type | Grant Dates (2024) | Shares | Grant Price | Grant Date Fair Value |
|---|---|---|---|---|
| Fully vested common stock (2016 Equity Incentive Plan) | Mar 18, Jun 18, Sep 17, Dec 16, 2024 | 98, 107, 94, 66 | $47.04, $42.92, $49.19, $69.47 | Included in $18,411 total for Freeman (365 shares aggregate) |
Non-employee director grants are fully vested and occur quarterly on a Board-approved purchase schedule; director grants (not options/PSUs) are intended to align interests with shareholders .
Other Directorships & Interlocks
| Category | Detail |
|---|---|
| Other public company boards | None disclosed in proxy biography |
| Interlocks / related-party context | Board considered director loans/lines of credit (including to Freeman) when assessing independence; all such loans in 2024 were on market terms and did not involve more than normal risk |
Expertise & Qualifications
- Audit Chair with oversight of financial reporting, controls, and external auditor independence; listed as Audit Committee Chair in both the committee table and Audit Committee report .
- Board maintains a skills matrix; Freeman is identified among directors with CEO/business leadership experience, supporting risk oversight and strategic guidance .
Equity Ownership
| Holder | Beneficial Ownership (shares) | Nature | % of Class | Pledged Shares |
|---|---|---|---|---|
| Thomas E. Freeman | 14,983 | Jointly with spouse | Less than 1% | 4,000 pledged as collateral |
| Shares outstanding (record date) | 4,759,471 | — | — | — |
- Stock ownership guidelines: Each director must beneficially own the greater of (i) shares equal to 3× prior year cash retainer (calculated using Dec 31 stock price), or (ii) 1,000 unencumbered shares .
- Hedging policy: Directors are prohibited from hedging CZFS stock .
Governance Assessment
- Strengths: Independent Audit Chair with demonstrated engagement (industry-standard audit/risk education); robust committee activity; separation of Chair/CEO and a Lead Independent Director framework; quarterly fully vested stock grants align director interests; explicit hedging ban .
- Risks / potential red flags:
- Pledged shares: Freeman has 4,000 shares pledged as loan collateral, which can reduce alignment in stress scenarios; Board policy requires 1,000 unencumbered shares minimum for directors, mitigating but not eliminating pledge risk .
- Banking relationships: Board explicitly considered director loans/lines of credit (including to Freeman) when determining independence; 2024 related-person loans were at market terms and typical risk, but continued monitoring is prudent for conflict optics in a community bank context .
- Shareholder sentiment signal: 2024 say‑on‑pay approval was ~67%, below typical >90% community bank norms, indicating investors’ heightened scrutiny of pay practices (applies to executives, but reflects governance climate) .
Insider Trades and Section 16 Compliance
| Item | Status |
|---|---|
| Section 16(a) reporting compliance (2024) | Company believes all executives/directors complied; one late filing noted for R. J. Landy, none for Freeman |
Note: Form 4 transaction details for Freeman are not disclosed in the proxy; the company’s Section 16(a) compliance disclosure indicates no late filings for Freeman in 2024 .
Director Compensation Mix (Signal Analysis)
| Year | Cash ($) | Equity ($) | Other ($) | Mix Commentary |
|---|---|---|---|---|
| 2023 | 40,432 | 12,376 | 647 | Equity grants (200 fully vested shares) comprised a meaningful minority, with cash retainers/fees dominant |
| 2024 | 41,210 | 18,411 | 398 | Shift toward larger equity grant (365 fully vested shares), enhancing ownership alignment for non-employee directors |
Equity grants occur quarterly on a fixed schedule using 30-day VWAP for pricing; directors receive fully vested stock under the 2016 Plan, not performance-conditioned awards .
Committee Structure and Process (Compensation Oversight Context)
- Compensation/Human Resource Committee members include Chappell (Chair), DePaola, Freeman, Kunes, Landy, Schadler; all independent per Nasdaq standards; Committee uses external consultant (Blanchard Consulting Group) for executive pay benchmarking and program design .
- Clawback policy applies to executives (3‑year lookback on accounting restatements); Hedging policy prohibits directors from hedging CZFS stock .
Attendance and Education Detail
| Item | 2024 Detail |
|---|---|
| Board meetings held | 12 |
| Director attendance | ≥83% of Board and assigned committee meetings for each director |
| Annual meeting attendance | All 12 directors attended |
| Education highlights | Board trainings across regulatory and risk topics; Freeman attended Bank Director’s Audit & Risk Conference (2 days) |
Related Party Transactions (Oversight)
- Policy requires Audit & Examination Committee approval/ratification; considerations include arm’s-length terms and conflict assessment .
- 2024 loans to related persons (including directors) were made on substantially the same terms as for unrelated parties and did not involve more than normal risk .
Say‑on‑Pay & Shareholder Feedback
| Year | Say‑on‑Pay Approval |
|---|---|
| 2024 | ~67% of votes cast approved executive compensation; Committee maintained program design and will consider future feedback |
While directed at executive compensation, this vote informs broader investor confidence in governance practices .
Summary Implications
- Freeman’s Audit Chair role, independence, and active engagement support board effectiveness and risk oversight—positive governance signal for investors .
- Pledged shares (4,000) represent a noted risk flag for alignment; however, CZFS’s director ownership guideline requiring unencumbered shares and hedging prohibition mitigates some concerns—ongoing monitoring recommended .
- Director compensation mix is modest and increasingly equity‑oriented, aligning with community bank norms while enhancing ownership linkage .