Stanley J. Kerlin
About Stanley J. Kerlin
Independent director of Franklin Financial Services Corporation (FRAF) since 2006; age 71. He is Chair of the Asset-Liability Committee and serves on Enterprise Risk, Executive, and Trust committees. Kerlin earned a B.A. (cum laude) in History from Elizabethtown College (1976) and a J.D. from Dickinson School of Law (1979); he has practiced law for over 45 years as both partner and sole practitioner, and is active in church and community organizations in FRAF’s Fulton and Huntingdon County markets .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Private law practice | Attorney; owner/partner and sole practitioner | 1979–present (45+ years) | Legal, business and management perspective valued by the Board |
External Roles
No public company directorships are disclosed for Kerlin; biography emphasizes local community involvement rather than external corporate boards .
Board Governance
- Independence: Board determined all directors other than the CEO (Henry) and President (Best) are independent; Kerlin is listed as an independent director .
- Committees (roles):
- Asset-Liability: Chair (Franklin Financial)
- Enterprise Risk: Member
- Executive: Member
- Trust: Member
- Attendance: In 2024 the Corporation/Bank boards met 60 times; all directors attended ≥75% of Board/committee meetings and attended the annual meeting .
- Executive sessions: Independent directors meet at least quarterly in executive session per Corporate Governance Guidelines .
- Board leadership/structure: Independent Chairman (G. Warren Elliott); committees include Audit, Compensation & Personnel, Nominating & Corporate Governance, Asset-Liability, Strategic, Enterprise Risk, Executive, Trust—each chaired by an independent director .
- Tenure and retirement: Director since 2006; mandatory retirement at 76 and no nomination if 75+ at time of election .
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Annual Board Retainer – Franklin Financial | $19,000 | Standard retainer |
| Annual Board Retainer – F&M Trust | $23,000 | Standard retainer |
| Committee Chair Annual Retainer | $5,000 | Applicable to Asset-Liability chair |
| Audit Committee Chair Annual Retainer | $10,000 | Not applicable to Kerlin |
| Vice Chair Annual Retainer | $13,125 | Not applicable to Kerlin |
| Board Chair Annual Retainer | $52,500 | Not applicable to Kerlin |
| Committee Meeting Fee (Franklin Financial or F&M Trust) | $750 per meeting | Applies to all committee meetings |
| Director Cash Fees – Kerlin (total) | $69,000 | 2024 fees earned/paid in cash |
| Director Stock Awards – Kerlin (fair value) | $13,060 | ASC 718 expense for restricted stock |
| Director Total – Kerlin | $82,060 | 2024 total compensation |
Performance Compensation
Equity awards to directors under the 2019 Omnibus Stock Incentive Plan are formulaic and tied to corporate performance; awards based on prior-year results, granted as restricted stock, vest fully in one year .
| Performance Criteria | Weight | Threshold | Target | Outstanding |
|---|---|---|---|---|
| Net Income vs. Budget | 40% | 95%–99% of budget | 100%–110% of budget | >110% of budget |
| ROE vs. Peer Median | 60% | 95%–99% of peer median | 100%–110% of peer median | >110% of peer median |
- 2023 results achieved “Outstanding” for both criteria; in 2024 the Board received restricted stock awards based on roles (per director) with one-year vesting. Shares awarded per role disclosed as: Board Chair 1,000; Committee Chairs 3,000; Directors 900 .
Other Directorships & Interlocks
- Compensation committee interlocks: None in 2024; no member of Compensation & Personnel was an employee or former employee, and no cross-service interlocks existed .
- Public company boards: None disclosed for Kerlin .
Expertise & Qualifications
- Education: B.A. (History, cum laude), Elizabethtown College (1976); J.D., Dickinson School of Law (1979) .
- Professional: 45+ years in active law practice; provides legal, business, and management insight valued by Board .
- Board qualifications: Leadership and governance experience; Chair of Asset-Liability indicating risk and balance sheet oversight aptitude .
Equity Ownership
| Holder | Beneficially Owned | Restricted Stock | Stock Options | Total Shares | Ownership % of Outstanding |
|---|---|---|---|---|---|
| Stanley J. Kerlin | 24,530 | 500 | – | 25,030 | <1% (per note) |
- Group ownership: Directors and executive officers as a group (21 persons) held 325,577 shares, 7.35% of outstanding as of 12/31/2024 .
- Section 16 reporting: One late Form 4 for Kerlin in 2024 related to a family estate settlement transfer; otherwise timely filings .
- Anti-hedging/pledging: Board has not adopted a hedging policy; pledging is not explicitly addressed in the text—potential misalignment risk .
Governance Assessment
-
Strengths
- Long-serving independent director with legal and business acumen; committee chair on Asset-Liability central to bank risk oversight .
- Strong attendance and engagement; independent-led board with quarterly executive sessions .
- Director equity awards are performance-based on Net Income and ROE vs peers, with clear thresholds and vesting; aligns director incentives with shareholder outcomes .
-
Potential conflicts and red flags
- Banking relationships with directors and their businesses exist (typical for community banks) but are stated to be on market terms and overseen per policy; continued monitoring warranted .
- No hedging policy adopted; absence of explicit anti-hedging standard may weaken alignment (consider shareholder engagement) .
- Late Form 4 for Kerlin (estate-related) represents a minor compliance lapse; low severity given context .
- Mandatory retirement at 76 implies finite remaining tenure; succession planning for committee leadership advisable .
-
Director pay structure signals
- Mix of cash retainers, meeting/chair fees, and annual restricted stock tied to Net Income and ROE vs peers; one-year vesting for director awards provides near-term alignment but limited long-term holding requirements .
- No mention of director stock ownership guidelines; absence reduces formal alignment expectations (not disclosed) .
Appendix: Committee Assignments Snapshot (2024)
| Committee | Role |
|---|---|
| Asset-Liability (Franklin Financial) | Chair |
| Enterprise Risk | Member |
| Executive | Member |
| Trust | Member |
Director Compensation Summary (2024)
| Name | Cash Fees | Stock Awards (ASC 718) | Total |
|---|---|---|---|
| Stanley J. Kerlin | $69,000 | $13,060 | $82,060 |
Director compensation components: Annual Board retainers ($19,000 FF; $23,000 F&M Trust), committee chair retainer ($5,000), Audit Chair ($10,000), committee meeting fees ($750/meeting) .
Related Party Transactions & Controls
- Loans/credit to directors and related entities in ordinary course, on substantially same terms as comparable transactions; none past due/nonaccrual/troubled; reviewed per Governance Guidelines and Reg O policy .
- Independence determinations considered loans and nonprofit contributions associated with directors; Kerlin remains independent .
Say-on-Pay & Shareholder Feedback (context)
- 2024 say-on-pay for named executive officers approved by a majority of votes cast; no material changes to executive salary policies for 2024 based on that vote (context for compensation governance) .