Romolo C. Santarosa
About Romolo C. Santarosa
Senior Executive Vice President and Chief Financial Officer of Hanmi Financial Corporation since November 2015; age 68; Certified Public Accountant (inactive) in NY and CT; former Audit Senior Manager at Price Waterhouse; B.S. in Accounting with a minor in Mathematics from Ithaca College. Company performance context: 2024 net income was $62.2 million with diluted EPS of $2.05, ROAA was 0.83%, efficiency ratio 60.3%, and nonperforming assets/total assets 0.19%; 2024 total shareholder return (TSR) was nearly 29% vs just under 15% for the S&P Small Cap 600 Bank Index; five-year cumulative TSR equates to $147 vs $124 for the peer index proxy measure. He also serves externally as chairman for the City of Rancho Palos Verdes Planning Commission and as director and Audit Committee chair for the Greater Los Angeles Area Council of the Boy Scouts of America .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Price Waterhouse | Audit Senior Manager | Not disclosed | Audit leadership; controls, reporting rigor |
| Various West/East Coast financial institutions | Executive leadership positions | Not disclosed | Led growth strategies, cost reduction, process improvement, technology implementations, capital management |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| City of Rancho Palos Verdes Planning Commission | Chairman | Current | Municipal planning oversight |
| Greater Los Angeles Area Council, Boy Scouts of America | Director; Audit Committee Chair | Current | Audit/governance oversight |
Fixed Compensation
Multi-year compensation (summary table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 438,416 | 470,631 | 480,000 |
| Stock Awards ($) | 210,013 | 244,872 | 278,416 |
| Non-Equity Incentive ($) | 306,075 | 204,042 | 247,913 |
| All Other Compensation ($) | 54,741 | 58,418 | 60,004 |
| Total ($) | 1,009,245 | 977,963 | 1,066,333 |
Key fixed-pay elements:
- Base salary set at $480,000 in 2024 (unchanged vs 2023) .
- Perquisites (2024): $39,304 including auto allowance ($26,220), social club dues, gas, holiday gift cards, technology allowance; plus 401(k) employer contributions of $20,700 .
Performance Compensation
Annual Incentive Plan (AIP) mechanics for CFO (target 50% of base; payout range 50–150% of target):
- Corporate scorecard metrics and actuals (company-wide): ROAA 0.83% (target achieved), NPA/Assets 0.19% (max achieved), efficiency ratio 60.31% (below target) .
- CFO 2024 AIP outcome: total achieved 103% of target; payout 51.65% of base salary ($247,913) .
Detailed CFO AIP metrics:
| Metric | Weight | Threshold | Target | Maximum | Actual | Achievement % |
|---|---|---|---|---|---|---|
| ROAA | 20% | 0.66% | 0.83% | 0.91% | 0.83% | 20.0% |
| NPA/Assets | 15% | 0.42% | 0.35% | 0.28% | 0.19% | 22.5% |
| Efficiency Ratio | 15% | 63.62% | 57.84% | 54.95% | 60.31% | 11.85% |
| Risk Management | 10% | Based on internal/external audit & regulatory results | Same | Same | See footnote (1) | 10% |
| Strategic Plan / Division Projects | 30% | Divisional financial/operational goals | Same | Same | See footnote (2) | 29.0% |
| Discretionary | 10% | Succession planning progress | Same | Same | See footnote (3) | 10% |
Long-Term Incentives (LTI):
- 2024 equity mix approx. 45% time-based restricted stock (RS) and 55% performance-based RSUs (PSUs); RS vests 1/3 annually over 3 years; PSUs vest based on 3-year relative TSR vs KBW Regional Banking Index with 35th/50th/75th percentile thresholds earning 50%/100%/150%; capped at target if absolute TSR is negative .
- 2024 CFO grants: 8,600 RS shares and 10,154 PSUs (target) granted on April 1, 2024 (closing price $15.49); PSUs threshold/target/maximum: 5,077/10,154/15,231 .
- 2021 PSU performance cycle (3 years ended March 23, 2024): company TSR -10.77% at 48th percentile; payout 92.06% of target; CFO earned 5,504 PSUs .
Equity Ownership & Alignment
- Beneficial ownership: 69,058 shares as of April 2, 2025 (<1% of outstanding); shares outstanding 30,217,915 (ownership ~0.23%) .
- Stock ownership guidelines: CFO must hold shares equal to 1.5× base salary; CFO is in compliance; executives must retain at least 50% of net shares until guidelines met .
- Hedging/pledging: Prohibited for executive officers; SVPs+ cannot hold shares in margin or pledge as collateral .
- 2024 option activity: exercised 25,000 options; value realized on exercise $60,987 (pre-tax) .
- Unvested/unearned awards (as of Dec 31, 2024) and payout values:
- RS: 1,267 ($29,927), 3,442 ($81,300), 8,600 ($203,132) .
- PSUs (target): 4,602 ($108,699), 6,353 ($150,058); PSUs (2024 max): 15,231 ($359,756) .
Employment Terms
- Agreement: Amended and restated agreement; first amendment July 2022; second amendment March 2025 extending term to December 31, 2027 with annual auto-renewals thereafter unless notice of non-renewal .
- Compensation baseline in agreement: initial base salary $400,000; may be increased but not decreased (limited exceptions) .
- Severance (without cause or for good reason; outside change-in-control window): 12 months of base salary; pro-rated prior year’s bonus; accelerated vesting of time-based RS that would vest over the next 12 months; up to 18 months of COBRA benefits; performance awards per plan terms .
- Change-in-control (double trigger within 18 months post-CIC): lump sum equal to 2×(current base salary + greater of average last 2 years’ bonus or current-year target bonus); 18 months COBRA; time-based RS fully accelerate at change in control; PSUs vest based on performance through termination per award terms; 280G cutback (no tax gross-ups) .
- Restrictive covenants: confidentiality, non-solicitation, non-disparagement (non-compete not disclosed) .
- Clawbacks: SEC/Nasdaq restatement-based clawback covering the prior 3 years of incentive compensation; SOX 304 clawback for CEO/CFO for restatements due to misconduct (12-month lookback) .
Potential payments if terminated at December 31, 2024:
| Scenario | Cash Severance ($) | Accelerated Stock Awards ($) | Health & Welfare Benefits ($) | Total ($) |
|---|---|---|---|---|
| Termination Without Cause or for Good Reason | 709,524 | 396,307 | 34,183 | 1,140,014 |
| Qualifying Termination in Connection with Change in Control | 1,495,599 | 899,753 | 34,183 | 2,429,535 |
| Death or Disability | 229,524 | — | — | 229,524 |
| Change in Control (no termination) | — | 314,359 | — | 314,359 |
Compensation Structure Analysis
- Year-over-year mix: 2024 base salaries held flat for all NEOs to prioritize non-executive merit increases; CHR slightly increased time-based RS proportion to support retention while maintaining majority at-risk pay via PSUs tied to 3-year TSR .
- Performance calibration: For AIP, 2024 thresholds and targets were set below 2023 levels given expected interest-rate and expense pressures; corporate outcomes met target on ROAA, max on asset quality, and were below target on efficiency, aligning payouts with performance .
- Governance features: independent compensation consultant (Aon), peer benchmarking, clawbacks, prohibition on hedging/pledging, and no excise tax gross-ups; say-on-pay approval in 2024 was 94.6% .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approved with 94.6% of votes cast; ongoing investor engagement noted by the CHR Committee; feedback incorporated into program decisions .
Equity Ownership & Alignment Table (detail)
| Item | Value |
|---|---|
| Beneficial Ownership (shares) | 69,058 |
| Shares Outstanding | 30,217,915 |
| Ownership % | ~0.23% (derived from ) |
| Ownership Guideline | 1.5× base salary; CFO in compliance |
| Hedging/Pledging | Prohibited for executives |
Performance & Track Record
- 2024 achievements: deposit growth of 2.5% with noninterest-bearing deposits at 32.6% (company notes 33%); C&I loans +16%; maintained excellent asset quality; dividend increased in Q1’25 (to $0.27) .
- Value creation: 2024 TSR nearly 29%; five-year TSR proxy measure shows $147 vs peer $124; ROAA 0.83% and net income $62.2 million .
Employment Terms (additional notes)
- Equity vesting mechanics under plan and agreements (double-trigger for PSUs; single-trigger acceleration for CFO time-based RS at CIC) .
- COBRA coverage up to 18 months in severance scenarios; excise tax cutback (no gross-up) .
Investment Implications
- Alignment: Majority of CFO’s pay is at-risk via AIP and PSUs; PSUs tied to 3-year relative TSR with a cap when absolute TSR is negative; ownership guidelines met; hedging/pledging prohibited—supporting shareholder alignment .
- Retention risk: Agreement extended to Dec 31, 2027 with auto-renewal; time-based RS and severance protections (including double-trigger CIC) provide retention and orderly succession planning incentives .
- Trading signals: 2024 option exercise (25,000 shares; $60,987 realized) indicates some liquidity activity but not ongoing pledging; unvested RS/PSU balances remain material, creating continued vesting overhang rather than near-term sell pressure .
- Performance levers: AIP heavily weighted to ROAA and asset quality (max on NPA/Assets), with efficiency ratio below target; future payouts will be sensitive to margin/expense discipline and credit quality trends; PSUs hinge on outperforming KBW regional bank peers on TSR .