Charles B. Carroll, Jr.
Executive Vice President, Chief Operating Officer (F&M Trust) at FRANKLIN FINANCIAL SERVICES CORP /PA/
Executive
About Charles B. Carroll, Jr.
Executive Vice President and Chief Operating Officer of F&M Trust (wholly owned subsidiary of Franklin Financial Services Corporation) since 2023; age 53 as of the 2025 proxy . He joined FRAF on January 3, 2023 under a three-year employment agreement with auto-renewal, following executive roles at S&T Bank overseeing consumer banking and lending . During his tenure, company net income declined from $13.6M (2023) to $11.1M (2024), and total shareholder return (value of $100 investment) slipped from $103.53 (2023) to $102.17 (2024) as reported in pay-versus-performance .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| S&T Bank | Senior Vice President, Director of Mortgage & Consumer Lending | 2018–2019 | Led consumer/mortgage lending functions |
| S&T Bank | Executive Vice President, Chief Administration Officer & Director of Consumer Bank | 2019–2022 | Oversaw consumer banking administration |
External Roles
- No public-company directorships or external board roles disclosed for Carroll in the proxies .
Fixed Compensation
| Component | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 317,356 | 333,216 |
| All Other Compensation ($) | 16,155 (club membership $7,000) | 27,477 (club membership $7,020; company 401(k) contribution $20,457) |
| Target Bonus % of Salary (Short-Term Incentive) | 20% | 25% |
| Actual Short-Term Incentive Paid ($) | 115,042 | 103,297 |
Compensation consultant and governance context:
- 2024: PRJ Consulting engaged; fees $53 thousand .
- No compensation committee interlocks; committee entirely independent .
Performance Compensation
Short-Term Incentive (Annual)
| Metric | Weighting | Target Definition | 2024 Actual Result | Payout Basis |
|---|---|---|---|---|
| Net Income vs Budget | 25% | Target: 100%–125% of budget | Achieved Target | Paid via total STI $103,297 (aggregate) |
| ROE vs Peer Median | 35% | Target: 60th–75th percentile | Achieved Target | Paid via total STI $103,297 (aggregate) |
| Individual Goals | 25% | Threshold/Target/Outstanding tiers | Reviewed by CEO/Board | Included in total STI |
| Discretionary | 15% | Threshold/Target/Outstanding tiers | Reviewed by CEO/Board | Included in total STI |
2023 structure for Carroll used lower payout opportunity tiers (Threshold 10%, Target 20%, Outstanding 35% of salary) with the same weights; results were Outstanding for net income and ROE company-wide .
Long-Term Incentive (Equity)
| Grant Type | Grant Date | Shares Awarded | Vesting | Grant Fair Value ($) |
|---|---|---|---|---|
| Restricted Stock (RS) | 3/1/2024 | 1,300 | 1/3 per year over 3 years | 33,956 |
| ESPP Option | 7/1/2024 | 451 | 6/30/2025 expiry; purchase right | Strike $26.87 |
Vesting schedule (unvested RS at 12/31/2024):
| Vest Date | Shares |
|---|---|
| March 1, 2025 | 434 |
| March 1, 2026 | 433 |
| March 1, 2027 | 433 |
| Total | 1,300 |
Plan performance basis for 2024 RS grants (based on 2023 results):
- Net Income vs Budget (40% weight) and ROE vs Peer Median (60% weight) both achieved Outstanding; RS granted accordingly with three-year vesting .
Equity Ownership & Alignment
| Ownership Item | 12/31/2023 | 12/31/2024 |
|---|---|---|
| Beneficially Owned Shares | 1,200 | 1,666 |
| Unvested RS | — | 1,300 |
| Options/ESPP Rights | — | 451 |
| Total Reported Holdings | 1,200 | 3,417 |
| Shares Outstanding (Company) | 4,392,057 | 4,440,442 |
| Ownership % of Shares Outstanding | ~0.027% (1,200/4,392,057) | ~0.077% (3,417/4,440,442) |
Additional alignment and trading policies:
- Anti-Hedging/Pledging: Board has not adopted a hedging policy; pledging restrictions not disclosed .
- Section 16(a) reporting: one late Form 4 for COO Carroll related to an ESPP purchase .
- Director and officer group ownership: 7.35% as of 12/31/2024 (all directors and executive officers as a group) .
Employment Terms
| Term | Detail |
|---|---|
| Role & Start Date | Executive Vice President, COO of F&M Trust; Employment Agreement effective January 3, 2023 |
| Agreement Term | Three years; auto-renews for one-year terms unless 180-day notice; if notice given, agreement expires two years after next anniversary |
| Compensation & Benefits | Base salary; eligibility for short- and long-term incentives; PTO; benefits; club membership dues covered |
| Severance (No CIC) | If terminated without Cause or resigns for Good Reason prior to CIC: remaining base salary over the remaining term; continued health and welfare benefits for up to two years |
| Severance (Post-CIC) | If terminated without Cause after CIC: lump sum 2.5x annual base salary; continued benefits for up to two years or reimbursement of comparable coverage premiums |
| Clawback | Policy adopted for recovery of erroneously awarded incentive compensation tied to financial restatements |
| Restrictive Covenants | Confidentiality and non-competition provisions survive termination (terms not detailed in proxy) |
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($000) | 14,938 | 13,598 | 11,099 |
| TSR – Value of $100 Investment (Year-End) | 113.44 | 103.53 | 102.17 |
Say-on-Pay:
- Shareholders approved NEO compensation by majority vote at the 2023 and 2024 annual meetings; committee made no material changes as a result .
Compensation Structure Analysis
- Shift toward equity in 2024: RS grant of 1,300 shares ($33,956) after none in 2023, while cash bonus decreased from $115,042 (2023) to $103,297 (2024) .
- Incentive metrics tied to profitability and shareholder returns: Net income budget attainment and ROE versus peer median drive both annual bonuses and equity awards; 2024 STI and 2024 RS awards reflect Target and Outstanding achievements respectively .
- Governance and oversight: Independent compensation committee, external consultant engaged (PRJ Consulting, $53k in 2024); no interlocks disclosed .
Risk Indicators & Red Flags
- Hedging policy not adopted; pledging prohibitions not disclosed (potential alignment risk) .
- Generous CIC severance multiple (2.5x base salary) with single-trigger termination “without Cause after a Change in Control,” raising potential payout risk in M&A scenarios .
- One late Form 4 for COO Carroll tied to ESPP purchase (administrative compliance point) .
Investment Implications
- Pay-for-performance linkage is clear: STI and LTI are tied to net income vs budget and ROE vs peers, but declining net income and muted TSR in 2024 suggest payout calibration may warrant scrutiny if macro headwinds persist .
- Retention: Three-year RS vesting (March 1 tranches of 434/433/433) provides retention hooks; potential incremental selling pressure around vest dates should be monitored .
- Alignment: Carroll’s reported stake is small (~0.077% incl. unvested RS and ESPP as of 12/31/2024), and absence of a hedging policy plus undisclosed pledging limits are modest governance concerns from an alignment perspective .
- M&A/CIC dynamics: The 2.5x CIC severance and benefits continuation create notable change-of-control economics; investors should incorporate this into scenario analyses around strategic activity .