Salvatore R. DeFrancesco, Jr.
About Salvatore R. DeFrancesco, Jr.
Salvatore R. DeFrancesco, Jr., CPA, CGMA, age 55, has served as Treasurer and Chief Financial Officer of Fidelity D & D Bancorp, Inc. since January 2003 and as Executive Vice President and Chief Financial Officer of The Fidelity Deposit and Discount Bank since January 2003 . Company performance context: reported Net Income of $20,793,676 in 2024 (vs. $18,209,518 in 2023 and $30,021,579 in 2022), and pay-versus-performance disclosures show cumulative TSR changes of 0.54% (2024), 30.31% (2023), and -22.68% (2022) .
Past Roles
| Organization | Role | Years | Strategic Impact/Notes |
|---|---|---|---|
| Fidelity D & D Bancorp, Inc. | Treasurer and Chief Financial Officer | 2003–present | Company principal financial officer |
| The Fidelity Deposit and Discount Bank | Executive Vice President and Chief Financial Officer | 2003–present | Bank principal financial officer |
External Roles
- No external directorships or outside public company roles disclosed in the 2025 proxy for Mr. DeFrancesco .
Fixed Compensation
| Year | Base Salary ($) | Nonequity Incentive Plan Compensation (AIP) ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 307,385 | 82,347 | 81,748 (granted Feb-2025 for 2024 performance) | 114,741 | 586,221 |
| 2023 | 294,077 | 75,000 | 44,190 (granted Feb-2024 for 2023 performance) | 113,539 | 526,806 |
Perquisites and other items (2024): $10,400 automobile allowance; $20,700 401(k) match; $75 life insurance premium; $7,114 country club/membership dues; $76,452 SERP contribution .
Performance Compensation
- Annual Incentive Plan (AIP) design (2024): metrics include earnings per share, deposit growth, average KPI score, and a board discretion component, with threshold/target/maximum levels; actual CEO/NEO cash awards paid post year-end (CFO payout: $82,347 for 2024; $75,000 for 2023) .
- Long-Term Incentive Plan (LTIP) (2024 cycle; awards granted Feb-2025): restricted stock awards based on peer metrics of Core Net Income/Shareholders’ Equity, Core EPS, and a board discretion component; grant date value for CFO $81,748 at $45.09/share; mix of vesting: majority 100% after three years and a portion vesting 1/3 per year over three years .
| Plan | Metric(s) | Weighting | Target | Actual | Payout/Value | Vesting |
|---|---|---|---|---|---|---|
| AIP (2024) | EPS; Deposit Growth; Avg KPI; Board discretion | Not disclosed | Not disclosed | Not disclosed | $82,347 (cash) | Cash (annual) |
| LTIP (2024 cycle → granted Feb-2025) | Core NI/Equity; Core EPS; Board discretion | Not disclosed | Not disclosed | Not disclosed | $81,748 at $45.09/share | Majority 100% at 3 years; portion 1/3 per year over 3 years |
Clawback: LTIP includes a 36-month restatement-based recalculation and full refund for misconduct/fraud; separate forfeiture/recoupment if post-termination covenants are violated (non-compete, etc.) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 36,786 shares; less than 1% of outstanding |
| Breakdown | 9,943 sole; 18,617 joint with spouse; 4,477 unvested restricted stock; approximately 3,749 shares from 7,945 exercisable SSARs included in beneficial ownership |
| Shares outstanding (reference) | 5,841,562 shares as of 3/12/2025 |
| Unvested RSUs (12/31/2024) | 4,060 shares; market value $198,128 at $48.80 |
| RSU vesting schedule (existing grants) | 1,505 on 2/15/2025; 1,614 on 2/21/2026; 941 on 2/20/2027 (100% cliff per tranche) |
| SSARs (exercisable) | 4,322 @ $21.60 exp. 02/01/2026; 3,623 @ $26.17 exp. 02/06/2027; 5,740 @ $49.50 exp. 02/05/2028; 1,665 @ $59.70 exp. 02/04/2029; all currently vested/exercisable |
| In-the-money value (12/31/2024 scenario) | $199,559 for SSARs in potential payout table |
| Ownership guidelines | Holding requirement for NEOs based on a percentage of annual salary (in effect through 2025) |
| Hedging/pledging | Company has not adopted an anti-hedging policy; employees may hedge or pledge shares, subject to Insider Trading Policy |
| Section 16 compliance note | Form 4s for Feb 20, 2024 restricted share grants (including Mr. DeFrancesco) were reported late |
Vesting schedule detail (existing RSUs):
| Vest Date | Shares |
|---|---|
| 02/15/2025 | 1,505 |
| 02/21/2026 | 1,614 |
| 02/20/2027 | 941 |
SSARs detail:
| Quantity | Exercise Price ($) | Expiration | Status |
|---|---|---|---|
| 4,322 | 21.60 | 02/01/2026 | Vested/Exercisable |
| 3,623 | 26.17 | 02/06/2027 | Vested/Exercisable |
| 5,740 | 49.50 | 02/05/2028 | Vested/Exercisable |
| 1,665 | 59.70 | 02/04/2029 | Vested/Exercisable |
Employment Terms
| Topic | Key Terms |
|---|---|
| Employment agreement | Three-year term with annual automatic extensions unless either party provides non-renewal notice; Mr. DeFrancesco’s current agreement dates to March 17, 2016 (replacing 2008 change-in-control and severance agreements) |
| Termination triggers | Change in control; termination for good reason; disability; termination without cause; death; voluntary resignation; non-renewal |
| Severance economics | If terminated without cause, after a change in control, or by the executive for good reason: two (2) times annual base salary plus continued benefits for two years; for CFO, $624,000 severance shown in “Good Reason,” “Change in Control,” and “Involuntary Without Cause” scenarios as of 12/31/2024 |
| Equity on CIC | All unvested restricted stock immediately vests upon change in control if continuously employed through the event |
| SSARs treatment | Post-termination exercise windows (90 days for standard termination; 12 months for death/disability); all SSARs accelerate and become exercisable on change in control |
| SERP | Defined contribution SERP with 4.00% fixed annual crediting rate; CFO vested Jan 1, 2020; potential payment amounts in scenarios (e.g., $704,293 for death, disability, or CIC as of 12/31/2024) |
| Split-dollar life insurance | Death benefit equal to lesser of 3x base salary or net death proceeds while employed; after vesting and separation, lesser of 2x highest base salary or net death proceeds (CFO death benefit shown as $936,000 at 12/31/2024) |
| Clawbacks/forfeiture | LTIP clawback on restatements or misconduct; forfeiture/recoupment of recent LTI if restrictive covenants are violated (post-termination) |
| Non-compete/non-solicit | Required under employment agreement; violations can trigger forfeiture/recoupment |
| Hedging/pledging policy | No formal anti-hedging policy; hedging/pledging permitted subject to policy; Insider Trading Policy governs timing |
Company Performance Context (for pay-for-performance and alignment)
| Year | Net Income ($) | Cumulative TSR (%) |
|---|---|---|
| 2022 | 30,021,579 | -22.68% |
| 2023 | 18,209,518 | 30.31% |
| 2024 | 20,793,676 | 0.54% |
Risk Indicators & Red Flags
- Hedging/pledging allowed; Board has not adopted a formal anti-hedging policy (potential misalignment vs best practices) .
- Section 16 reporting: late Form 4s for Feb 20, 2024 restricted stock grants, including CFO (process control consideration) .
- Related party transactions: none identified involving the CFO; routine insider loans to officers/directors were made on market terms (aggregate insider group loan balance $9.17 million at 2/28/2025; largest during 2024 of $10.66 million) .
Compensation Committee and Governance Notes
- Compensation Committee members: Brian J. Cali (Chair) and Michael J. McDonald; independent under Nasdaq rules .
- Benchmarking sources include Blanchard Consulting Group studies, peer reviews, and market surveys; no specific target percentiles disclosed .
- Ownership guidelines: NEO holding requirements tied to percentage of salary (in effect through 2025) .
Investment Implications
- Alignment: CFO has meaningful equity exposure via unvested RSUs and in-the-money SSARs (older grants), with additional 2025 RSU grant tied to profitability/peer efficiency metrics; RSU acceleration on CIC is single-trigger while severance is effectively double-trigger, providing retention but creating event-driven equity unlocks .
- Near-term selling/vesting pressure: 1,505 RSUs vested on 2/15/2025, with further cliffs in 2026 and 2027; sizeable legacy SSARs expire 2026–2029, which may influence trading windows as expirations approach .
- Risk flags: permissive hedging/pledging framework and a recent Section 16 filing lag modestly elevate governance/process risk; however, robust clawback/forfeiture language partially mitigates incentive risk .
- Pay-for-performance: AIP and LTIP metrics emphasize EPS, deposit growth, and core profitability returns, with cash/equity payouts realized despite volatile TSR and net income trends; monitoring future metric calibration and payout discretion will be important if earnings normalization persists .