Timothy Shaffer
About Timothy Shaffer
Timothy F. Shaffer is Senior Executive Vice President and Chief Credit Officer of Farmers National Banc Corp. (FMNB). He was appointed Interim Chief Credit Officer on January 1, 2021 and promoted to Executive Vice President and Chief Credit Officer of Farmers Bank on March 15, 2021 . In 2024, FMNB achieved adjusted EPS of $1.28 (target $1.28), adjusted pre-tax pre-provision net income of $68.6 million (target $66.6 million), and adjusted ROAA of 0.95% (target 0.95%), driving target-or-better payouts on corporate metrics in the annual incentive plan . For the 2022–2024 long-term incentive cycle, Farmers ranked at the 86.7th percentile on relative average ROE (equity awards vested at 200% of target) but at the 11.1th percentile on relative TSR (cash LTI paid 0%), demonstrating upside on profitability but no reward for below-peer TSR over that window .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Farmers National Banc Corp. / The Farmers National Bank of Canfield | Interim Chief Credit Officer | Jan 1, 2021 – Mar 15, 2021 | — |
| Farmers National Banc Corp. / The Farmers National Bank of Canfield | Executive Vice President and Chief Credit Officer | Mar 15, 2021 – present | — |
External Roles
- No external roles disclosed in the reviewed proxy statements .
Fixed Compensation
| Year | Base Salary (set) | Actual Salary Paid | Target Annual Bonus (% of base) |
|---|---|---|---|
| 2023 | $300,000 | $292,658 | 35% |
| 2024 | $310,000 | $311,430 | 35% |
Notes:
- 2024 merit increase: +3.3% YoY (from $300,000 to $310,000) .
- FMNB targets base salaries near the 50th percentile of its peer group .
Performance Compensation
Annual Incentive Plan (AIP) – 2024 structure and outcomes (Shaffer)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout % |
|---|---|---|---|---|---|---|
| Adjusted EPS | 20% | $1.15 | $1.28 | $1.41 | $1.28 | 100% |
| Pre-tax, Pre-provision Net Income | 20% | $59.0m | $66.6m | $73.0m | $68.6m | 116% |
| ROA (adjusted) | 10% | 0.85% | 0.95% | 1.04% | 0.95% | 100% |
| Area of Responsibility Metric | 20% | — | — | — | — | 120% |
| Area of Responsibility Metric | 15% | — | — | — | — | 90% |
| Subjective Scorecard | 15% | — | — | — | — | 125% |
- AIP amount earned for 2024: $118,469 (109% of target opportunity) .
- Texas ratio “circuit breaker” remained well below the 15% cutoff (approx. 9.0% in 2024), enabling bonuses to pay .
Annual Incentive Plan (AIP) – 2023 (for context)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout % |
|---|---|---|---|---|---|---|
| Adjusted EPS | 20% | $1.63 | $1.75 | $1.95 | $1.65 | 60% |
| ROA (adjusted) | 10% | 1.19% | 1.28% | 1.37% | 1.23% | 72% |
| Pre-tax, Pre-provision Net Income | 20% | $83.5m | $88.6m | $93.7m | $77.9m | 0% |
| Area of Responsibility Metric | 20% | — | — | — | — | 120% |
| Area of Responsibility Metric | 15% | — | — | — | — | 160% |
| Subjective Scorecard | 15% | — | — | — | — | 125% |
- AIP amount earned for 2023 (from AIP tabular summary): $90,271; payout 86% of target .
Long-Term Incentive (LTI) design and awards
- LTI target opportunity (percent of base salary): 35% in 2024–2026 program; allocation: 25% service-based RSUs (3-year cliff), 50% performance-based equity (relative avg ROE over 3 years), 25% performance-based cash (relative TSR over 3 years) .
- 2024 grants (approved 2/22/2024; grant date 2/23/2024):
- AIP opportunity thresholds for 2024 performance: threshold $54,250; target $108,500; max $162,750 .
- LTI Cash (TSR, pays 2/23/2027): threshold $5,425; target $27,125; max $54,250 .
- Performance-based equity (ROE, vests 2/23/2027): 778 (thr), 3,890 (tgt), 7,780 (max); grant date fair value $53,721 .
- 2023 carryover grant line: 1,703 shares; grant date fair value $24,114 .
- 2022–2024 LTI results: Relative avg ROE at 86.7th percentile → 200% equity vesting; relative TSR at 11.1th percentile → 0% cash payout .
Multi-year compensation (SCT)
| Metric | 2023 | 2024 |
|---|---|---|
| Salary ($) | $292,658 | $311,430 |
| Stock Awards ($) | $72,343 | $80,581 |
| Non-Equity Incentive (AIP) ($) | $97,714 | $118,469 |
| All Other Compensation ($) | $31,778 | $31,945 |
| Total ($) | $494,493 | $542,794 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 34,933 shares as of Mar 4, 2025 (<1% of outstanding) |
| Shares outstanding reference | 37,614,636 shares as of Mar 4, 2025 |
| Options outstanding | None (no stock options outstanding) |
| Unvested time-based RSUs at 12/31/2024 | 9,607 shares; market value $136,612 (at $14.22) |
| Unearned performance-based shares at 12/31/2024 | 7,779 (2024 grant, vests 2/23/2027 at performance) ; 6,182 (2023 grant, vests 2/22/2026 at performance) ; 4,472 (earlier grant) |
| Ownership guidelines | Other Executive Officers: 1.0× base salary; to be met within 7 years of first inclusion in long-term incentive plans |
| Hedging/pledging | Prohibited: no pledging, no margin, no short sales, no hedging transactions by executives/directors |
Employment Terms
| Provision | Economic terms |
|---|---|
| Employment agreements | None; covered by Executive Separation Policy and Change in Control Agreement |
| Separation (no Cause / Good Reason) | Lump sum 18 months’ salary; pro-rata target bonus; 18 months COBRA; up to $7,500 outplacement; time-based awards fully vest; performance-based awards forfeited |
| Change in Control (double trigger) | 2× salary; 2× average prior-3yr bonus; pro-rata target bonus; 24 months COBRA; $20,000 outplacement; time-based awards fully vest; performance-based awards vest/set at target |
| Non-solicitation | 24 months for non-CEO NEOs (incl. Shaffer) under CIC agreements |
| Clawback | Company has a clawback policy for erroneously awarded incentive comp (Nasdaq Rule 5608) |
Potential Payments (as of 12/31/2024; select scenarios)
| Component | Death/Disability | Voluntary w/o Good Reason or For Cause | Termination w/o Cause or With Good Reason | CIC + Termination (double trigger) |
|---|---|---|---|---|
| Severance Pay | — | — | $465,000 | $620,000 |
| Benefits (COBRA) | — | — | $11,520 | $15,360 |
| Annual Incentive Plan | $108,500 | — | $108,500 | $205,745 |
| Long-term Incentive Plans | $263,904 | — | $136,612 | $343,025 |
| Nonqualified Plan | $245,865 | $245,865 | $245,865 | $245,865 |
| Total | $618,269 | $245,865 | $967,497 | $1,429,996 |
Nonqualified Deferred Compensation (2024)
| Item | Amount |
|---|---|
| Executive contributions | $18,000 |
| Company contributions | $14,664 |
| Aggregate earnings | $11,984 |
| Aggregate balance at FYE | $245,865 |
Compensation Structure Analysis
- Mix and alignment: In 2024, Shaffer’s total pay rose to $542,794 from $494,493 in 2023, with higher salary, stock awards, and AIP, while LTI continues to be majority performance-based (ROE vs peer and TSR vs peer) with three-year performance periods and 3-year cliff on RSUs .
- Performance stringency: 2022–2024 LTI paid 200% on relative ROE but 0% on TSR, indicating balanced metrics that can deny payouts when shareholder returns lag peers .
- AIP governance: Texas ratio “circuit breaker” prevents payouts if credit quality deteriorates (2024 ~9.0%, below 15% threshold), which is notable for a Chief Credit Officer’s incentives .
Risk Indicators & Red Flags
- Pledging/hedging: Prohibited by policy (reduces misalignment risk) .
- Clawback: Adopted per Nasdaq requirements (restatement recoupment) .
- Option repricing: No stock options outstanding, reducing repricing risk .
- Related-party/other red flags: None specific to Shaffer disclosed in the reviewed filings .
Equity Vesting Schedules and Potential Selling Pressure
- Time-based RSUs: Three-year cliff vesting; next vest/settlement events expected on 2/22/2026 (2023 grant) and 2/23/2027 (2024 grant), which may open trading windows and potential supply depending on tax withholding/sale elections .
- Performance-based equity: Vests, if at all, at end of performance periods (2025 and 2026 cycles) based on relative average ROE; 2024 cycle settles 2/23/2027 .
Employment Contracts, Severance, and Change-of-Control Economics
- No individual employment agreement; covered by Executive Separation Policy and CIC Agreement (double trigger), with 18-month severance outside CIC and 2× salary plus 2× average bonus inside CIC; both include health benefits continuation and outplacement support .
- Non-solicit covenants: 24 months for non-CEO NEOs (including Shaffer) under CIC agreements .
Investment Implications
- Pay-for-performance is credible: AIP keyed to EPS/PTPPNI/ROAA and credit-quality circuit breaker; LTI pays on ROE and TSR vs peers, and the 2022–2024 outcomes (0% TSR, 200% ROE) show real variability tied to performance .
- Retention risk appears moderate: Unvested RSUs and performance awards (with upcoming 2026–2027 vesting) plus 18-month severance and CIC protection support retention, while anti-pledging/hedging reduces misalignment .
- Trading signals: Watch February 2026 and February 2027 vesting dates (possible liquidity events) and future TSR/ROE trajectories that will directly determine LTI outcomes and potential incremental selling needs for tax withholding .
- Credit discipline: The Texas ratio circuit breaker embeds a hard check on bonus payouts and links incentives to asset quality—relevant to Shaffer’s remit as CCO amid changing credit cycles .