Diane M. Cunningham
About Diane M. Cunningham
Diane M. Cunningham (age 57) is Senior Executive Vice President of Embassy Bancorp, Inc. and Embassy Bank for the Lehigh Valley, leading retail banking, consumer lending, and marketing; she has been a key leader since the Bank’s founding in 2001 and began her banking career in 1988 after graduating from Northampton Community College . Company performance context for pay-for-performance: Net income was $17.7M (2022), $12.7M (2023), and $10.4M (2024); a $100 fixed investment in EMYB on 12/31/2020 was valued at $132 (2022), $108 (2023), and $123 (2024) per pay-versus-performance disclosures .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Lafayette Ambassador Bank | Assistant Vice President | Not disclosed | Leadership roles in retail banking prior to joining Embassy |
| Ambassador Bank | Assistant Vice President | Not disclosed | Senior leadership experience pre-Embassy; informed multi-disciplinary oversight |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SkillsUSA Council | Board Member | Not disclosed | Community engagement and workforce development linkage to local markets |
| Toastmasters International | Volunteer/Contributor | Not disclosed | Communication leadership and local presence |
| YWCA Allentown | Volunteer/Contributor | Not disclosed | Civic engagement |
| Lehigh Valley Workforce Investment Board | Volunteer/Contributor | Not disclosed | Workforce strategy exposure |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | 274,423 | 290,000 |
| Actual Bonus Paid ($) | 21,750 | 26,100 |
| Stock Awards ($ grant-date fair value) | — | 11,600 |
| Non-qualified Deferred Compensation Earnings ($) | 64,132 | 63,167 |
| All Other Compensation ($) | 15,785 | 13,057 |
| Total Compensation ($) | 376,090 | 403,924 |
| Current 2025 Annual Salary ($) | 300,000 | 300,000 |
Notes:
- Benefits include standard package (medical, dental, disability) and life insurance equal to 3× annual salary; 401(k) company match is 50% of employee contribution up to 4% of compensation .
- Executive bonuses are discretionary, not linked to pre-set annual performance criteria; decisions consider company performance, budget, efficiency ratio, and employee productivity ratios .
Performance Compensation
| Incentive Type | Metric | Weighting/Target | Actual/Payout | Grant/Vesting |
|---|---|---|---|---|
| Discretionary Cash Bonus | Company/individual performance (no pre-set annual metrics) | Not pre-set; Personnel Committee review | $26,100 cash in 2024 | N/A; paid annually |
| Restricted Stock (2024 grant) | Time-based RSU | Not performance-based | Grant-date fair value $11,600 (Dec 13, 2024) | 704 shares unvested at 12/31/24; vest in three equal annual installments beginning 12/13/25 |
| Restricted Stock (2022 grant) | Time-based RSU | Not performance-based | N/A (grant prior year) | 220 shares unvested at 12/31/24; vest in three equal annual installments beginning 12/15/23 |
Program design:
- The company did not grant option awards to NEOs in 2024; equity awards are time-based restricted stock under the 2010 Stock Incentive Plan, which vests automatically upon change in control .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (shares) | 20,043; includes 8,581 jointly with spouse and 2,940 held by spouse; “Percent of class” is less than 1% |
| Company Shares Outstanding (record date) | 7,644,142 (for voting at 6/18/2025 annual meeting) |
| Unvested RSUs | 704 (grant 12/13/24) and 220 (grant 12/15/22); total 924 shares unvested at 12/31/24 |
| Options (exercisable/unexercisable) | None outstanding |
| Pledging/Hedging | No pledging disclosed for Ms. Cunningham; company bans short selling and derivative transactions by employees/directors (anti-hedging policy) |
| Ownership Guidelines | Not disclosed in the proxy for executives |
Vesting calendar signals:
- 2024 grant vests in three equal annual installments starting 12/13/2025; 2022 grant vests in equal installments starting 12/15/2023, implying continued unlocks across the 2023–2026 period .
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement | The proxy states all Named Executive Officers (including Ms. Cunningham) have employment agreements and SERP agreements . Specific salary/bonus caps and equity minimums are disclosed for the CEO and CFO; not detailed for Ms. Cunningham . |
| SERP (Supplemental Executive Retirement Plan) | Annual payment of $80,000 upon retirement at age 65, paid in equal monthly installments over 15 years; lesser benefits for retirement prior to the specified retirement age . |
| Change-in-Control (CIC) | Employment agreements and SERPs include CIC provisions under IRC §409A definition; SERP payments commence immediately if involuntary termination within two years post-CIC . |
| Tax Gross-Up (Golden Parachute) | If CIC payments trigger the 20% excise tax under IRC §4999, executives are entitled to an additional gross-up to restore after-tax position; such payments would be non-deductible by the Company . |
| Clawback | Not disclosed . |
| Non-Compete/Non-Solicit | Not disclosed for Ms. Cunningham in the proxy . |
| Equity Plan | 2010 Stock Incentive Plan (amended/restated 2019) authorizes restricted stock and other awards; awards vest automatically upon change in control; plan expires June 20, 2029 . |
| Perquisites | Benefits include life insurance at 3× salary, standard health benefits, 401(k) match; perquisites are included in “All Other Compensation” . |
Company Pay-versus-Performance Context
| Year | Value of $100 Initial Investment (TSR) | Net Income ($000s) |
|---|---|---|
| 2022 | 132 | 17,702 |
| 2023 | 108 | 12,656 |
| 2024 | 123 | 10,440 |
Interpretation:
- Bonuses are discretionary and not formulaic; Board emphasizes efficiency ratio and productivity ratios (assets/employee, loans/employee, deposits/employee, net income/employee) in compensation decisions .
Compensation Committee Analysis
- The Bank’s Personnel Committee serves as the compensation committee; it sets officer compensation, reviews structure, and oversees plans. It did not use a compensation consultant in 2024; membership: Banko, Englesson, Lesavoy (Chair), Lobach; Lobach abstains on NEO compensation matters; no formal charter .
Investment Implications
- Alignment: Ms. Cunningham holds 20,043 shares plus time-based RSUs; no options and no pledging disclosed; anti-hedging ban reduces misalignment risk . Upcoming RSU vesting in equal annual tranches beginning 12/13/2025 and continuing from 12/15/2023 could create incremental float as shares unlock, a potential minor selling-pressure vector around vest dates .
- Retention: SERP benefits ($80,000 annually for 15 years) and CIC protections likely lower retention risk, with SERP accelerations upon CIC-related involuntary termination .
- Red flags: Presence of golden parachute excise tax gross-up is shareholder-unfriendly and could draw governance scrutiny in a transaction scenario . Bonuses are discretionary without defined annual performance metrics, limiting pay-for-performance transparency, though the Board cites efficiency and productivity ratios as evaluation anchors .
- Performance backdrop: Company net income has declined since 2022; TSR recovered in 2024 vs 2023 but remains below 2022, suggesting tighter linkage between future incentive design and explicit performance goals could strengthen investor confidence .