David R. Saracino
About David R. Saracino
David R. Saracino (age 80) is an independent director of First Keystone Corporation (FKYS) and former Vice President, Cashier, and Chief Financial Officer of First Keystone Community Bank; he has served as a director since 2006 and as Secretary of the Board for both the Corporation and the Bank since 2017 . He is designated an “audit committee financial expert” and serves on the Corporation’s Audit Committee; he chaired that committee in 2023 and remained a member in 2024–2025 . Company performance context: FKYS cumulative TSR trended down over the last three years (2022–2024), and net income turned negative in 2024, informing a conservative read-through on pay-for-performance and governance risk .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Keystone Community Bank | Vice President, Cashier, CFO (former) | Not disclosed | Senior financial leadership; foundation for “audit committee financial expert” designation |
External Roles
- None disclosed in company filings reviewed .
Fixed Compensation (Director)
| Component ($) | 2023 | 2024 |
|---|---|---|
| Fees Earned or Paid in Cash | 51,300 | 49,700 |
| Non‑qualified Deferred Comp Earnings | 3,864 | 2,502 |
| All Other Compensation (incl. BOLI imputed income) | 29,313 (includes $28,000 salary continuation payments and $1,313 BOLI imputed) | 29,453 (includes $28,000 salary continuation payments and $1,453 BOLI imputed) |
| Total | 84,477 | 81,655 |
- Director fee structure: Bank directors received $44,000 in 2024 covering regular board and committee meetings plus a yearly retainer; additional board meetings $1,000 each; additional committee meetings $400 each. Stipends: Chairman $7,000; Vice Chairman $3,500; Secretary (Saracino) $2,500; each committee chair $1,000 .
- As Secretary, Saracino receives the $2,500 annual secretary stipend .
Performance Compensation
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Not applicable to directors; no equity or option awards reported for directors | — | — | — | — | — |
- FKYS reports that it does not grant equity awards to its executive officers; director tables show no stock or option awards for directors, indicating cash-heavy, non‑equity director compensation .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 8,825 shares (held individually) |
| Ownership as % of shares outstanding | ~0.14% (8,825 / 6,218,781; March 7, 2025) |
| Vested vs. unvested shares | Not disclosed |
| Options (exercisable/unexercisable) | None disclosed in director or executive compensation tables |
| Shares pledged as collateral | Company policy allows pledging/hedging; no specific pledging by Saracino disclosed |
| Director/Officer ownership guidelines | Not disclosed |
Alignment takeaways:
- Minimal equity ownership and no ongoing equity awards suggest lower direct market-based alignment; however, long tenure and audit expertise indicate governance continuity .
Employment Terms
| Agreement | Key Terms |
|---|---|
| Salary Continuation Agreement (non‑qualified) | Established when Saracino was a key employee; vested after retirement post‑age 60; pays benefits for a total of 20 years (annual payments disclosed within “All Other Compensation”) . |
| Clawbacks / Hedging / Pledging | No clawback disclosure specific to directors; policy does not prohibit pledging or hedging by directors or executive officers (potential governance red flag) . |
| Non‑compete / Non‑solicit / Garden leave | Not disclosed for directors |
Board Governance and Service
| Body | Committee/Role | Year(s) | Notes |
|---|---|---|---|
| First Keystone Corporation | Audit Committee – Member | 2024–2025 | Only independent directors serve; Saracino designated “audit committee financial expert” . |
| First Keystone Corporation | Audit Committee – Chair | 2023 | Chaired the committee and deemed financial expert . |
| First Keystone Community Bank | Human Resources Committee – Chair | 2023–2024 | Bank-level HR chair; entire Corporation Board acts as Compensation Committee for executive officers . |
| First Keystone Community Bank | ALCO, Loan Administration, Executive, Building, IT – Member | 2023–2024 | Active cross-committee service at Bank level . |
| Board structure/attendance | Independent status; separate Chair/CEO; 19 board meetings in 2024; all directors attended at least 75% and attended 2024 annual meeting | 2024 | Saracino is explicitly reported as independent; Board separates CEO and Chair roles . |
Dual‑role implications:
- Saracino serves simultaneously as Board Secretary and Director; the Board nonetheless classifies him as independent and as an audit committee financial expert, mitigating common independence concerns around dual roles .
Company Performance Context
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 5,331,000 | 6,156,000* | 6,697,000 |
| Net Income ($) | 14,024,000 | 5,560,000 | -13,203,000* |
| TSR (Pay vs Performance, $100 base at prior year-end) | 108.50 | 91.20 | 68.05 |
- Values marked with * retrieved from S&P Global (GetFinancials).
- The company reported a sharp reversal to a 2024 net loss and continued TSR pressure in 2023–2024, which can heighten scrutiny of governance and compensation alignment .
Related Party Transactions and Legal
- The company reports no material related party transactions; director and officer loans are on market terms, current, and not more than normally risky .
- Management reports no material legal proceedings pending against the Corporation or Bank .
- Section 16(a) reporting: officers and directors were in compliance with filing requirements in 2024 .
Compensation Committee and Policy Process
- The full Board acts as the Compensation Committee (no separate compensation or nominating committees), citing company size and board stability .
- No compensation consultant in 2024; the Board reviewed L.R. Webber Associates’ 2024 survey for benchmarks .
Risk Indicators and Red Flags
- Anti‑hedging/pledging policy permissive (does not prohibit); monitoring recommended for any pledged shares given alignment risk .
- Cash-heavy director pay (no equity), limited ownership, and absence of director ownership guidelines can weaken alignment optics .
- Concentration of compensation authority in full Board (no stand‑alone comp committee) may face investor governance scrutiny despite small‑cap context .
Investment Implications
- Governance quality: Saracino provides deep financial oversight (audit financial expert; prior CFO) and chairs the Bank’s HR committee, supporting control and risk oversight at a time of earnings volatility .
- Alignment: Director compensation is predominantly cash with a non‑qualified salary continuation benefit and modest direct share ownership (~0.14%), implying limited market‑based alignment; absence of ownership guidelines and permissive pledging/hedging elevate alignment risk .
- Retention/continuity: Long tenure (director since 2006) and board secretary role add continuity; at age 80 with a 2027 term, succession planning and committee bench strength should be monitored .
- Trading signals: No Form 4 activity is disclosed in the proxy; monitor Section 16 filings and any 10b5‑1 adoptions/terminations for selling pressure indicators given non‑prohibited pledging/hedging .
Note: Some financial values are from S&P Global via GetFinancials where citations were not present in company documents.