Tracy E. Watkins
About Tracy E. Watkins
Executive Vice President and Chief Human Resources Officer (CHRO) at Citizens & Northern Bank since February 2021; joined C&N in 2003 and progressed through HR leadership roles. Age 60; education includes B.S. in English/Secondary Education (Juniata College), paralegal certificate, and advanced banking HR programs; professional credentials include CEBS (RPA, GBA) and SPHR . Corporate performance context (informing incentive design): FY 2024 net income $25.958M and diluted EPS $1.69, with ROAA 1.00% and ROAE 9.76% versus FY 2023 net income $24.148M and diluted EPS $1.57 . The 2024 short‑term incentive program’s company‑selected measure, (PPNR–NCOs)/Average Equity, was 12.01% (63rd percentile vs peers), yielding a 126.0% corporate payout factor for NEOs; TSR for a $100 investment from 12/31/2019 to 12/31/2024 was $85.52 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Citizens & Northern Bank | Executive Vice President & Chief Human Resources Officer | Feb 2021–present | Enterprise HR leadership; culture, talent, and total rewards governance |
| Citizens & Northern Bank | Executive Vice President & Director of Human Resources | Jan 2018–Jan 2021 | Led HR function expansion pre‑CHRO; succession and leadership development |
| Citizens & Northern Bank | Vice President & Director of Human Resources | 2010–2017 | Formalized HR policies and performance management frameworks |
| Citizens & Northern Bank | HRIS & Employee Relations Manager | 2005–2009 | Built HRIS and employee relations infrastructure |
| Citizens & Northern Bank | Joined C&N | 2003 | Entry into C&N; progression through HR roles |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No external directorships or roles disclosed in the proxy |
Fixed Compensation
- Individual base salary, target bonus %, and actual bonus paid for Ms. Watkins are not separately disclosed (she is not a Named Executive Officer in the proxy tables) .
- Program context: NEO base salaries increased 3–5% in 2024; annual cash incentives are determined under the Incentive Award Plan with corporate, KPI, and individual components (illustrative for NEOs) .
Performance Compensation
Company‑level design elements relevant to CHRO alignment and payout mechanics (note: weightings vary by role; NEO illustrations shown where provided):
| Metric | FY 2024 Target | FY 2024 Actual | Notes |
|---|---|---|---|
| Corporate earnings performance: (PPNR–NCOs)/Average Equity (percentile vs peers) | 50th percentile | 63rd percentile | Corporate payout factor 126.0% of target for NEOs |
| Annual average deposits (ex‑brokered) | $2.010B | $1.996B | KPI gating achieved; eligible for KPI payout |
| Net interest income (FTE) | $82.0M | $79.9M | KPI gating achieved |
| Noninterest income (ex‑wealth mgmt) | $17.6M | $18.7M | KPI gating achieved |
| Total wealth management revenue | $10.0M | $10.5M | KPI gating achieved |
| Efficiency ratio | 65.00% | 68.04% | KPI gating achieved; threshold 68.28% |
| Role Illustration (NEOs) | Corporate Earnings Weight | Total Target STI (% Base) | Actual FY2024 STI (% Base) |
|---|---|---|---|
| CEO | 50% | 35.0% | 34.6% |
| CFO | 50% | 30.0% | 32.8% |
| EVPs (Revenue/Region/Credit) | 45% | 25.0–30.0% | 26.6–32.2% |
Long‑term incentives and vesting mechanics:
- RSAs: 1/3 vest annually over three years based on satisfactory performance .
- PRSAs: 1/3 eligible each year, contingent on job performance and profitability ranks; 2024 PRSA measures: 50% (PPNR–NCOs)/Average Equity (≥35th percentile) and 50% (PPNR–NCOs)/Average Assets (≥65th percentile) vs peer group .
- 2024 outcome: minimum thresholds met; PRSA tranches for 2022–2024 grants vested based on performance .
Equity Ownership & Alignment
- Stock ownership guidelines: CEO minimum 3x prior‑year base salary; each EVP minimum 1x prior‑year base salary; five‑year compliance window from appointment .
- Anti‑hedging policy: Directors and officers prohibited from hedging C&N equity through derivatives or similar instruments .
- Options: No stock options outstanding as of February 5, 2025 (across executives) .
- Beneficial ownership: The proxy’s leadership table lists ownership for certain executives and directors; Ms. Watkins is not itemized in that table; no pledging by Ms. Watkins disclosed .
Employment Terms
- The proxy summarizes employment agreements for certain NEOs (CEO, CFO, EVP Revenue, EVP Region, EVP Credit) including non‑compete/non‑solicit, severance, and change‑of‑control terms; no individual employment agreement disclosure for Ms. Watkins .
- Illustrative agreement terms (policy context, not attributed to Ms. Watkins): non‑compete/non‑solicit covenants apply within 35 miles of any office; durations vary by executive; recoupment (“clawback”) policy applies to bonuses and stock‑based compensation upon restatement due to material non‑compliance .
Investment Implications
- Incentive alignment: Executive pay is levered to profitability quality (PPNR–NCOs), capital‑efficient growth, and operating discipline via KPIs; RSAs/PRSAs vesting and ownership guidelines increase retention and alignment for EVPs, including HR leadership roles .
- Low pledging/hedging risk: Anti‑hedging policy and absence of options reduce hedging/leverage risks; no pledging by Watkins disclosed .
- Governance quality: Independent Compensation Committee with external advisor (Pearl Meyer), defined peer group, and annual say‑on‑pay (82% approval in 2024) support disciplined compensation governance .
- Performance context: FY 2024 earnings improved YoY; corporate profitability ranks drove above‑target STI payouts for NEOs, reinforcing focus on earnings quality; CHRO’s scope over human capital amid performance‑linked pay suggests manageable retention risk under current structure .