Charles Schmalz
About Charles Schmalz
Charles D. Schmalz is Chairman, President, and Chief Executive Officer of EWSB Bancorp, Inc. and East Wisconsin Savings Bank. He has been employed by the Bank since 1993, served as President & CEO since 2008, and has been a director since 2007; age 59 as of December 31, 2024 . Under his leadership, EWSB completed its IPO in September 2024; at year-end 2024, consolidated assets were $273.3 million, deposits $231.5 million, and loans grew 6.9% year-over-year, while net interest margin compressed to 1.35% and the company recorded a net loss of $1.7 million .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| EWSB Bancorp, Inc. | Chairman, President & CEO | 2024–present | Led the new public holding company post-IPO |
| East Wisconsin Savings Bank | President & CEO | 2008–present | Long-tenured operator through market cycles; oversight of lending/compliance |
| East Wisconsin Savings Bank | Director | 2007–present | Board governance continuity |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 280,000 | 280,000 |
| Bonus ($) | — (none paid) | — (none paid) |
| All Other Compensation ($) | 65,867 | 68,961 |
| Total ($) | 345,867 | 348,961 |
Breakdown of “All Other Compensation” (2024):
| Component | Amount ($) |
|---|---|
| 401(k) Employer Contributions | 14,000 |
| Director Fees | 26,500 |
| Automobile | 7,313 |
| Life Insurance Premium (whole life) | 21,148 |
| Total | 68,961 |
Notes:
- As an Emerging Growth Company, EWSB provides reduced executive compensation disclosures and is exempt from certain advisory votes (say-on-pay) .
- The company reports no stock option grants historically and none in 2024 .
Performance Compensation
- No annual cash bonus paid to Mr. Schmalz in 2023 or 2024 .
- No stock options granted in 2024; the company has not historically granted options .
- No performance-based RSU/PSU awards, weightings, targets, or payouts were disclosed for Mr. Schmalz in 2023–2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 30,000 shares |
| Ownership as % of Outstanding | 3.99% of 752,538 shares |
| Holding Detail | Includes 15,000 shares in IRA and 15,000 in spouse’s IRA |
| Hedging/Pledging Policy | Company prohibits hedging and generally prohibits pledging; Board may approve exceptions but has not approved any |
| Insider Trading Controls | Section 16 officers must pre-clear trades; blackout periods apply |
Employment Terms
| Term | Key Provisions |
|---|---|
| Agreement Duration | As of Jan 1, 2025, rolling 3-year term for Schmalz; annual performance-based renewal decision by disinterested directors |
| Base Salary (as of Apr 2025) | $280,000; may be increased (not decreased except broad reductions) |
| Non‑CIC Severance | Lump sum equal to remaining term’s base salary and bonuses; present value of DC plan contributions for remaining term; continued medical/dental/life coverage for remaining term |
| CIC Severance (Double Trigger) | If involuntary termination/“good reason” within 18 months post‑CIC: 3×(highest base salary + highest bonus in last 3 completed FYs); DC plan contributions PV for 36 months; continued medical/dental/life for 36 months; potential 280G cutback |
| Non‑Compete/Non‑Solicit | Post-termination: 6‑month non‑compete; 1‑year non‑solicit (non‑CIC termination) |
| Disability | Top‑up between disability benefits and base salary for the longer of 1 year or remaining term; continued medical/dental during period |
| Death Benefits | 1 year of base salary to beneficiaries; 12 months medical/dental to family |
| Salary Continuation Agreement | Normal retirement (age 65): $25,000 per year for 120 months; early separation receives accrued benefit; qualifying CIC termination pre‑65 yields PV of normal retirement benefit; death benefits as specified |
Board Governance
- Board Leadership: Schmalz serves as combined Chairman & CEO; Lead Independent Director role held by Kenneth P. Demerath; independent directors hold executive sessions at least twice per year .
- Independence: Board determined Schmalz and Kay M. Dorow are not independent; other directors are independent under Nasdaq standards .
- Committee Memberships:
Director Audit Compensation Governance & Nominating Lisa Cruz X X Kenneth P. Demerath X (Chair) Kay M. Dorow X Steven Haen X X Lori Hoersch X (Chair) Steve Tyink X X (Chair) Meetings in 2024 1 2 — - Attendance: In 2024, EWSB Bancorp Board held 2 meetings; the Bank’s Board held 13; 10 joint meetings; no director attended fewer than 75% of meetings/committees .
- Director Election Results (June 5, 2025):
Nominee For Withheld Broker Non‑Votes Charles D. Schmalz 407,648 5,100 189,202 - Director Compensation (Non‑Employee Directors, 2024):
Director Cash Fees ($) Total ($) Lisa Cruz 28,500 28,500 Kenneth P. Demerath 24,500 24,500 Kay M. Dorow 23,500 23,500 Steven Haen 28,500 28,500 Lori Hoersch 28,500 28,500 Steve Tyink 24,500 24,500 Note: Schmalz’s director fees ($26,500) are included in his executive “All Other Compensation,” not in the non‑employee director table .
Related Party Transactions
- Loans to directors/executive officers were made in the ordinary course at market terms, on substantially the same terms as comparable non‑related loans, performing per original terms at December 31, 2024, and in compliance with banking regulations .
Say‑on‑Pay & Shareholder Feedback
- As an Emerging Growth Company, EWSB is exempt from non‑binding advisory votes on executive compensation and certain related disclosures; no say‑on‑pay history disclosed .
Compensation Peer Group
- Not disclosed in the latest proxy; no peer group/target percentile policy provided – (no applicable section).
Risk Indicators & Red Flags
- Regulatory MOU: In July 2023, the Bank entered a confidential memorandum of understanding (MOU) with FDIC/Wisconsin DFI addressing capital, earnings, liquidity, ALM, IT audit, vendor management, and board oversight; dividends require prior regulatory consent while MOU is in effect .
- Capital and Net Worth Ratio: Bank is “well‑capitalized” under federal rules (CET1 12.2%, Tier 1 leverage 7.2%, Total RBC 13.0% as of 12/31/24) but below Wisconsin net worth ratio requirement (5.67% vs. 6.0% minimum) per state definition; plan to meet MOU targets .
- Anti‑hedging/pledging policy reduces misalignment risk from derivatives or margin pledges; no board exceptions approved .
- No indication of tax gross‑ups, clawback provisions, or option repricing in disclosures; options not historically granted .
Equity Ownership & Alignment (Detail)
| Metric | Value |
|---|---|
| Shares Outstanding | 752,538 (as of Apr 2, 2025 record date) |
| Schmalz Beneficial Ownership | 30,000 shares (15,000 IRA; 15,000 spouse IRA) |
| Ownership % | 3.99% |
Employment Contracts, Severance, and Change‑of‑Control Economics
| Provision | Economic Term |
|---|---|
| Non‑CIC Termination | Remaining term’s salary+bonuses; DC plan contributions PV for remaining term; continued benefits for remaining term |
| CIC (Double Trigger within 18 months) | 3×(highest base salary + highest bonus in last 3 completed FYs); DC plan contributions PV for 36 months; 36 months benefits; subject to 280G cutback |
| Post‑termination Restrictions | 6‑month non‑compete; 1‑year non‑solicit (non‑CIC termination) |
| Retirement Benefit | $25,000/year for 120 months at age 65; other early/CIC/death contingencies as disclosed |
Investment Implications
- Pay-for-performance linkage is weak in the disclosed period: no bonus paid and no equity options historically; cash compensation stable ($280k salary) with director fees/perquisites comprising the “All Other Compensation” mix—limited variable alignment levers .
- Alignment is supported by meaningful personal ownership (3.99%), anti‑hedging/pledging policies with no exceptions approved, and Section 16 controls, though no formal ownership guideline compliance status was disclosed .
- Retention risk appears moderated by rolling 3‑year employment term mechanics and robust double‑trigger CIC economics (3× cash and 36 months benefits), but the Wisconsin net worth ratio deficit and active MOU elevate regulatory execution risk and may constrain capital allocation flexibility (e.g., dividends) until remediation is complete .
- Governance watchpoints: combined Chair/CEO structure mitigated by a lead independent director and independent committees; shareholder support evidenced by June 2025 director vote (407,648 “For,” 5,100 “Withheld”), but continued focus on ALM, liquidity, and capital targets under the MOU remains a key operating priority .