Joseph P. Zavaglia
About Joseph P. Zavaglia
Independent director of FS Bancorp (FSBW) since 2011; current term expires in 2027. Age 76 as of December 31, 2024. Background includes 49 years in banking across commercial lending, retail/small business banking, HR, investments, incentive compensation and executive administration at large banks and community banks. Education: BS in Business Management (Seattle University) and Masters in Education (Western Washington University); graduate of Pacific Coast Banking School; formerly held Series 6/63/26 and life/disability insurance licenses . Board skill matrix recognizes him for financial services expertise, finance skills, and “certified public accountant or financial expert” attribute, with broad leadership, HR, and ESG capabilities .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Rainier Bank (acquired by Security Pacific) | Branch operations → Branch manager | 1975–1987 | Managed up to 13 branches |
| Security Pacific Bank (acquired by BofA) | SVP & Regional Manager | 1987–1992 | Regional leadership |
| Bank of America | SVP & Regional Manager | 1992–2003 | Regional leadership |
| First Mutual Bank | EVP, Retail Banking Group Manager | 2003–2008 | Led retail banking |
| Zavaglia Consulting, LLC | Owner/Operator (banking/small business advisory) | Feb 2008–present | Advises community banks |
| From the Heart of Italy | Founder/operator | Since 2008 | Culinary school |
External Roles
| Organization | Role | Tenure | Notes/Impact |
|---|---|---|---|
| Pacific Coast Banking School | Board member (9 yrs); Employee; Director of Extension Programs (4 yrs) | Former | Banking education leadership |
| Washington Bankers Association | Co-created 4 developmental programs; instructor/facilitator | Ongoing | Programs offered nationally |
| Seattle University | Chair, Board of Regents (3 yrs); Board member (9 yrs); Athletic Hall of Fame inductee; University Service Award (2015) | Former/Ongoing | Community leadership & recognition |
| University of Washington (Italian Studies) | Board Chair | Former | Community academic involvement |
| Western Washington University (Woodring College) | Chair, Dean’s Advisory Board; Distinguished Alumnus (2012) | Former/Ongoing | Education leadership |
| March of Dimes (State Board) | Chair (15 yrs) | Former | Civic/charitable leadership |
Board Governance
- Independence: 6 of 7 directors are independent; Zavaglia is independent .
- Attendance: In 2024, FS Bancorp and Bank boards held nine meetings; no director attended fewer than 75% of board/committee meetings. Zavaglia attended the 2024 annual meeting of shareholders .
- Committee assignments (latest): Compensation Committee member; Governance, Nominating & Culture Committee member. Audit Committee chaired by Leech; Compensation Committee chaired by Mansfield; Governance, Nominating & Culture chaired by Andrews .
- Committee chair history: Chair of Nominating & ESG Committee in 2022 and 2023; member of Compensation Committee across years; Audit Committee member in 2015 .
- Stock ownership guidelines: Non-employee directors must own ≥2x annual cash retainer; 2024: all six non-employee directors in compliance; 2025: five of six non-employee directors in compliance (remaining expected to comply within three years) .
- Anti-hedging/anti-pledging: Hedging, derivatives, pledging, and margin accounts prohibited for directors/officers/employees; no exceptions noted as of the proxy date .
- Clawback policy: Established in 2012 and updated in 2023 to comply with SEC Rule 10D-1/Nasdaq 5608; authorizes recovery of incentive comp for fraud, material restatement, imprudent risk-taking, or violations of Code/Core Values .
- Say-on-Pay signal: 2024 say‑on‑pay received over 95% approval, indicating investor support for compensation governance .
Fixed Compensation
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Fees earned or paid in cash ($) | 65,300 | 69,850 | 68,860 | 72,710 |
| All other compensation ($) | 2,061 | 3,558 | 4,951 | 4,506 |
| Total ($) | 100,856 | 99,318 | 100,351 | 124,271 |
Director fee structure at 1st Security Bank (applies to FS Bancorp directors; paid at bank level):
- 2024: Monthly retainer $3,850; Board Chair $4,950; committee chair annual retainer $3,960; Board meeting fee $825; committee meeting fee $550 .
- 2023: Monthly retainer $3,850; same fee schedule .
- 2022/2021/2020: Monthly retainer $3,500; Board Chair $4,500; committee chair $3,600; Board meeting fee $750 (virtual treated as in-person in 2020/2021); committee fee $500 .
- 2018/2016/2015 baseline: Monthly retainer $2,500 (Chair $3,500); fees implemented effective July 2015 (committee chair $3,600; Board fee $750/$250 teleconference; committee fee $500) .
Performance Compensation
| Equity Award Details | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Restricted stock (shares) | 500 granted 8/13/2021; vests 8/13/2022 | 500 granted 8/15/2022; vests 8/15/2023 | 500 granted 8/15/2023; vests 8/15/2024 | 750 granted 8/15/2024; vests 8/15/2025 |
| Stock options (shares) | 1,500 granted 8/13/2021; vests 8/13/2022 | 1,500 granted 8/15/2022; vests 8/15/2023 | 1,500 granted 8/15/2023; vests 8/15/2024 | 1,500 granted 8/15/2024; vests 8/15/2025 |
| Grant-date fair value ($) | Stock $17,730; Options $15,765 | Stock $15,245; Options $10,665 | Stock $15,365; Options $11,175 | Stock $31,485; Options $16,020 |
- Director equity grants are time-based (no performance metrics disclosed); options are granted at 100% of market price on grant date under structured timing to avoid MNPI; vesting typically one year for director awards; broader equity governance addresses grant timing and exercise price policy .
Other Directorships & Interlocks
| Company/Institution | Role | Interlocks/Notes |
|---|---|---|
| Pacific Coast Banking School | Board member; Director of Extension Programs | Banking education; no public company interlock disclosed in proxy |
| Washington Bankers Association | Program co-creator; instructor/facilitator | Industry education |
| Seattle University | Chair, Board of Regents; Board member | Academic governance; honors |
| University of Washington (Italian Studies) | Board Chair | Academic/community role |
| Western Washington University (Woodring College) | Dean’s Advisory Board Chair; Distinguished Alumnus | Academic leadership |
| March of Dimes | State Board Chair (15 years) | Non-profit leadership |
The proxy biographies disclose civic/academic roles; no other current public company directorships are described for Mr. Zavaglia in the 2025 proxy .
Expertise & Qualifications
- Financial services and finance expertise; recognized in Board skill matrix across finance, securities, HR, ESG attributes; leadership/team-building across sectors .
- Deep retail banking operations; executive administration; incentive compensation; consulting to community banks .
- Education and licensure: Seattle University (BS), Western Washington University (Masters), Pacific Coast Banking School; former securities and insurance licenses .
Equity Ownership
| Metric (as of Mar 21, 2025) | Value |
|---|---|
| Shares owned (incl. ESOP/restricted/ESPP) | 18,623 |
| Stock options exercisable within 60 days | 13,060 |
| Total beneficial ownership (shares + exercisable options) | 31,683 |
| Percent of shares outstanding | Less than 1% |
- Outstanding director equity: as of 12/31/2024, Zavaglia held 750 unvested RS; 14,560 options outstanding (not all exercisable within 60 days) .
- Ownership alignment: Director stock ownership policy requires ≥2x cash retainer and retention of 50% of net after-tax shares until guideline met; 2024 all non-employee directors met guidelines; 2025 five of six met (names not specified) .
Governance Assessment
- Board effectiveness: Long-tenured independent director with prior chair experience on Nominating & ESG; consistent service on Compensation Committee; prior Audit Committee membership reflects financial oversight capacity .
- Independence & engagement: Independent; attended annual meeting; no attendance shortfalls; committees comprised solely of independent directors; regular executive sessions support independent oversight .
- Compensation alignment: Director pay mix blends cash retainer/meeting fees with time-based RS/options; grant timing and pricing controls; anti-hedging/anti-pledging; director stock ownership guidelines enforced; strong say‑on‑pay support signals investor confidence in overall governance .
- Potential conflicts/related-party exposure: Company maintains formal review/approval policy for related-party transactions; director/officer loans permitted only on market terms and reviewed by credit officers and the Bank board; 2024 employee loan program disclosure lists only an executive officer (Costa); no Zavaglia-related transactions disclosed—reduces conflict risk .
- RED FLAGS: None evident in proxy disclosures—no hedging/pledging exceptions noted; no related-party transactions tied to Zavaglia; no attendance issues; no option repricings; no tax gross‑ups for executives; clawback policy in place .
- Committee dynamics: Chair rotation in 2025 (Governance, Nominating & Culture to Andrews) suggests active refresh and broad distribution of leadership among independent directors; continued membership by Zavaglia supports governance continuity .
Overall, disclosures reflect a seasoned, independent director with strong banking/finance experience, meaningful equity alignment, and robust governance controls (ownership guidelines, clawback, hedging/pledging bans), with no evident conflicts or attendance concerns in recent years .