Daniel J. Santaniello
About Daniel J. Santaniello
President & Chief Executive Officer of Fidelity D & D Bancorp, Inc. and The Fidelity Deposit and Discount Bank since December 2010; Director since March 2011; age 59 as of March 12, 2025 . 2024 operating results under his leadership: net income $20.8m (diluted EPS $3.60), assets $2.58b, tangible book value per share up 8.2% to $31.98, and non‑performing assets at 0.30% of total assets . Pay vs. performance disclosures show company TSR of 0.54% in 2024, 30.31% in 2023, and -22.68% in 2022, while net income was $20.79m (2024), $18.21m (2023), and $30.02m (2022) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Fidelity D & D Bancorp / The Fidelity Deposit and Discount Bank | President & CEO | Dec 2010–present | Led growth to $2.58b assets at 12/31/2024; net income $20.8m for 2024 |
| Fidelity D & D Bancorp / Bank | VP & COO (Company); EVP & COO (Bank) | May 2004–Dec 2010 | Senior operating leadership prior to CEO appointment |
| The Fidelity Deposit and Discount Bank | Employed by Bank | Since July 2001 | Long-tenured operator within the franchise |
External Roles
- None disclosed in company filings reviewed .
Board Governance and Service
- Board structure: CEO and Chairman roles separated; Chairman is independent director Brian J. Cali; Santaniello is not independent under Nasdaq standards .
- Committees and attendance: He serves on multiple Bank/Company committees (including Audit*, ALCO, Building, Governance*, Human Resources, Risk Management, and Trust/Investment); all directors attended ≥90% of board/committee meetings in 2024 (Board met 13x; committee meetings summarized below) .
- Executive sessions/Lead Director: not specifically disclosed; majority of board is independent .
Committee activity summary (meetings held in 2024): Audit (5), ALCO (4), Building (1), Credit Administration (4), Compensation (2), Executive (0), Governance (4), Human Resources (2), Loan (22), Nominating (full board; 0), Risk Management (2), Trust/Investment (4) .
Fixed Compensation
| Component ($) | 2023 | 2024 |
|---|---|---|
| Base salary | 460,135 | 490,385 |
| All other compensation | 174,208 | 175,171 |
2024 All other compensation detail for CEO: company auto personal use $3,609; 401(k) match/profit-sharing $20,700; life insurance premiums $75; country club/membership dues $8,180; SERP contribution $142,608 .
Performance Compensation
Annual Incentive Plan (AIP)
- 2024 metrics: earnings per share, deposit growth, average KPI score, and board discretion (with threshold/target/maximum framework) .
- Payouts: | AIP payout ($) | 2023 | 2024 | |---|---:|---:| | CEO annual incentive (cash) | 148,000 | 175,000 |
Long-Term Incentive Plan (LTIP)
- 2024 LTIP design: one-year performance period with awards determined post-year end; metrics based on peer-comparative Core Net Income/Shareholders’ Equity, Core EPS, and board discretion; delivered as restricted stock with a three-year vest .
- 2024 award to CEO (granted Feb 2025 at $45.09/share): grant-date fair value $157,815 .
Outstanding Equity and Vesting Schedule (as of 12/31/2024)
| Instrument | Quantity/terms | Vesting/expiry | Valuation detail |
|---|---|---|---|
| Restricted stock (unvested) | 8,039 shares | 100% vesting on 2/15/2025 (3,129), 2/21/2026 (3,146), 2/20/2027 (1,764) | Market value $392,303 using $48.80 at 12/31/2024 |
| Stock-settled stock appreciation rights (SSARs) – exercisable | 10,720 @ $49.50; 2,906 @ $59.70 | Expire 2/5/2028 and 2/4/2029; all outstanding SSARs currently exercisable | Exercise prices/expiries as shown; no unexercised/unvested SSARs |
Clawback provisions: LTIP includes a 36‑month clawback for restatements/adjustments and full clawback upon misconduct related to erroneous data; employment agreement adds forfeiture of recent LTI if post-termination covenants are breached .
Equity Ownership & Alignment
| Ownership detail | Amount |
|---|---|
| Total beneficial ownership | 59,088 shares (1.01% of outstanding) |
| Directly held | 27,711 shares |
| Joint with spouse | 13,624 shares |
| Joint with son | 9,131 shares |
| Unvested restricted stock | 8,622 shares |
| Options/SSARs (exercisable) | 10,720 @ $49.50; 2,906 @ $59.70 (exercisable) |
Ownership guidelines: holding requirement based on a percentage of annual salary (in place since 2021); compliance status not quantified in filing .
Hedging/pledging: Board has not adopted a formal hedging policy; employees (including executives) are permitted to hedge or pledge shares subject to the Insider Trading Policy—this is an alignment red flag vs typical best practices .
Employment Terms
| Term | Summary |
|---|---|
| Agreement/date | Three-year employment agreement entered March 23, 2011; automatically extends annually unless notice of non‑renewal is given |
| Severance | If terminated without cause, for good reason, or without cause after a change in control: 2x annual base salary plus benefits for two years (CEO severance modeled at $1,000,000 as of 12/31/2024) |
| Change in control | Double-trigger: severance upon qualifying termination after CoC; unvested restricted stock fully vests upon CoC if employment continues through event |
| Payment timing | Severance paid on the first business day of the month following six months after termination |
| Non-compete/Non-solicit | Included; violation triggers forfeiture/repayment of certain awards and SERP forfeiture (pre‑CoC) |
| SERP (defined contribution) | 4.00% credited interest; payable in 180 monthly installments at normal retirement or per plan events; vested since 1/1/2020; CoC/death/disability payout mechanics disclosed; CEO SERP balance used in payout table $1,313,737 |
| Split-dollar life insurance | Death benefit = lesser of 3x base salary or net death proceeds while employed (2x highest base salary post‑vesting/separation); vests upon disability, CoC, normal retirement age, or board‑chosen date |
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net income ($) | 30,021,579 | 18,209,518 | 20,793,676 |
| Diluted EPS ($) | — | 3.19 | 3.60 |
| Total assets ($) | — | 2,503,159,000 | 2,584,616,000 |
| Cumulative TSR (Pay vs Performance table) | -22.68% | 30.31% | 0.54% |
| Tangible book value per share ($) | 29.57 (12/31/2023) | — | 31.98 (12/31/2024) |
| Non‑performing assets / total assets | 0.13% (12/31/2023) | — | 0.30% (12/31/2024) |
Management commentary highlights 2024 NIM pressure from higher funding costs, offset by continued loan growth and improved non‑interest income vs. 2023 (which had a loss on securities sale); company expects gradual NIM improvement in 2025 as deposit costs reprice lower and loan growth continues .
Compensation Committee Analysis
- Composition: Independent directors Brian J. Cali (Chair) and Michael J. McDonald; remit includes CEO/NEO pay, incentive plans (cash and equity), and employment/change‑in‑control arrangements; two meetings in 2024 .
- Use of market data: references Blanchard Consulting Group studies, peer public bank disclosures, and general compensation surveys; no specific “target percentile” or named peer group disclosed .
- Say‑on‑pay cadence: triennial advisory vote; say‑on‑pay and say‑on‑frequency included on 2025 ballot; board recommends “every three years” .
Compensation Structure Observations
- Mix shift toward equity: CEO stock award value rose from $82,840 (2023) to $157,815 (2024) while cash incentive rose from $148,000 (2023) to $175,000 (2024) .
- Metrics linkage: AIP aligns to EPS, deposit growth, and KPIs; LTIP uses Core EPS and Core Net Income/Equity with board discretion; presence of both growth and profitability metrics indicates multi‑dimensional pay‑for‑performance design .
- Clawbacks in place across LTIP and employment agreement; however, hedging/pledging permissibility and absence of a board hedging policy partially offset alignment quality .
Related Party Transactions and Conflicts
- Routine director/officer banking and related‑party loans conducted on market terms; aggregate $9.26m outstanding at 12/31/2024; largest outstanding ~ $10.66m during 2024; approvals follow standard related‑party policies .
- 2024 payments to entities linked to certain directors/executives in the ordinary course (e.g., legal services, branch lease, marketing consultancy); no material transactions were disclosed specifically involving Santaniello beyond standard programs .
Risk Indicators & Trading Signals
- Insider reporting: Form 4s reporting 2/20/2024 restricted share grants (including to Santaniello) were filed late (delinquent) .
- Hedging/pledging risk: No formal anti‑hedging policy; hedging and pledging permitted under the Insider Trading Policy—potentially weakens alignment and may concern some investors .
- CRE exposure trend: Non‑owner‑occupied CRE grew 17% in 2024 to $394.2m, with increases in office (+$15.6m) and multifamily (+$15.6m); office sector volatility flagged in risk factors, warranting ongoing credit monitoring .
- Vesting/sale overhang: 3,129 RS vest on 2/15/2025, 3,146 on 2/21/2026, 1,764 on 2/20/2027; SSARs (10,720 @ $49.50, 2,906 @ $59.70) are exercisable with expiries in 2028/2029—creates periodic liquidity windows and potential selling pressure around vest dates .
Director Compensation (as applicable to Santaniello)
- Employee directors are not paid for board/committee service (non‑employee directors receive cash retainers and restricted stock) .
Say‑on‑Pay & Shareholder Feedback
- 2025 proxy includes advisory votes on NEO compensation and on frequency; board recommends triennial frequency; historical approval percentages not disclosed in reviewed materials .
Expertise & Qualifications
- Extensive banking operating experience since 2001 within the Bank; progressed from COO (Company/Bank) to CEO; filings do not list formal education credentials .
Employment Terms – Change‑in‑Control/Severance Economics (CEO)
| Scenario | Cash severance | Equity | SERP / Life insurance |
|---|---|---|---|
| Good Reason / Involuntary without cause | $1,000,000 | — | — |
| Change in Control (with qualifying termination) | $1,000,000 | RS accelerate (12/31/2024 value $392,303) | SERP $1,313,737; SSARs shown as $0 in CoC table; life insurance not applicable |
| Death | — | — | Life insurance $1,500,000; SERP $1,313,737 |
| Disability | — | — | SERP $1,313,737 |
Note: Severance multiple is 2x base salary plus two years of benefits; payment delayed six months; tables exclude benefit costs .
Investment Implications
- Alignment: Meaningful personal ownership (1.01%) and ongoing equity vesting provide skin‑in‑the‑game; however, permissive hedging/pledging and lack of a board hedging policy are governance negatives that can dilute incentives in adverse scenarios .
- Retention/turnover risk: Auto‑renewing agreement with 2x salary severance, SERP value ($1.31m) and split‑dollar benefits create strong retention hooks; double‑trigger CoC terms avoid single‑trigger windfalls and align with market norms for regional banks .
- Trading signals: RSU vesting dates (Feb 2025/26/27) and fully‑vested SSARs expiring 2028/2029 create identifiable windows for potential insider selling; monitor Form 4s around vesting and open windows .
- Execution outlook: 2024 profit growth (+14% YoY), 8% deposit growth, and TBVPS +8.2% are positives; rising NPAs (to 0.30%) and CRE office exposure call for continued underwriting discipline; management guides to gradual NIM improvement in 2025 as deposit costs reset .