Jeffrey M. Werdein
About Jeffrey M. Werdein
Jeffrey M. Werdein (age 58) is Executive Vice President – Commercial Division at Lake Shore Bancorp and Lake Shore Savings Bank; he joined Lake Shore in 2014 and was appointed EVP in August 2014. He previously served as Interim Principal Executive Officer from March 10, 2023 to April 19, 2023; his background includes over 30 years in commercial banking with prior roles at Evans Bank (since 1999), Citibank, and Chase Manhattan, and education includes a BS and MBA (Business and Financial Institutions & Markets) from SUNY Buffalo and graduation from the ABA Stonier Graduate School of Banking . Company-level performance context: Lake Shore’s net income was $4.931M in 2024 (vs. $4.820M in 2023 and $5.708M in 2022), and its $100 TSR measure was 101 in 2024 (vs. 83 in 2023 and 85 in 2022) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Evans Bank | SVP responsible for business development in commercial real estate and small/middle business segments | 1999–2014 | Led commercial BD across CRE and SMB segments |
| Citibank | Prior positions | Not disclosed | Commercial banking experience |
| Chase Manhattan Bank | Prior positions | Not disclosed | Commercial banking experience |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed | — | — | — |
Fixed Compensation
| Component | 2023 | 2024 |
|---|---|---|
| Salary ($) | 269,757 | 284,805 |
| All Other Compensation ($) | 82,813 | 97,253 |
| Breakdown of 2024 All Other Compensation ($) | — | Employer 401(k) $33,312; ESOP $6,625; SERP tax reimbursements $2,043; Dividends on unvested stock $3,042; Life insurance premiums $516; Perquisites $51,715 (car allowance $12,462; country club dues $25,103; taxes on club dues $14,150) |
Performance Compensation
| Incentive Type | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Incentive Plan (cash) – 2024 | Corporate and individual performance measures set by Compensation Committee | Not disclosed | Target payout range for non-CEO NEOs: 10%–37.5% of base salary | Not disclosed | 15.8% of base salary paid (=$45,051) | Cash; annual cycle |
| Restricted Stock Awards (time-based, 2024 grants) | Service-based | — | 4-year vest; 25% per year | Not applicable | Grant-date fair value $27,088 (2024) | Vests 25% annually starting April 23, 2025 |
| Performance RSUs (credit-quality metric) | 3-year average % of delinquent loans to total loans | Not disclosed | Not disclosed | Metric attained | 3,100 units vested | Fully vested February 28, 2025 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 45,628 shares; includes 17,073 options exercisable within 60 days and counts toward beneficial ownership; less than 1% of common stock outstanding |
| Breakdown (notes) | Includes 4,787 ESOP shares (sole voting, no investment power) and 5,548 unvested restricted stock (sole voting, no investment power) |
| Options – exercisable | 17,073 options; strike $14.38; expiration 10/21/2026; fully vested since 10/21/2021 |
| Unvested time-based RSAs (12/31/24) | 2,534 shares; market value $34,817 at $13.74/share |
| Performance RSUs (12/31/24) | 3,100 unearned units; market/payout value $42,594; vested 2/28/2025 |
| Ownership guidelines | Not disclosed |
| Pledging/hedging | Company policy prohibits pledging Company stock, short sales, and hedging transactions for directors/officers/employees |
Vesting and Potential Selling Pressure
- Time-based RSAs: 25% per year beginning April 23, 2025; creates annual vest events over four years .
- Performance RSUs: 3,100 vested on February 28, 2025; one-time vest event tied to credit-quality metric .
- Stock options: Expire October 21, 2026; strike $14.38; as of 12/31/24 market was $13.74, implying no intrinsic value at that date .
Employment Terms
| Agreement/Plan | Key Economics | Triggers | Notes |
|---|---|---|---|
| Supplemental Benefit Plan (SERP) | Annual benefit = 2% × average final pay × years of service (max 40% of average final pay); payable monthly over 15 years starting at age 65 | Change in control: treated as having attained age 65 for benefit payments | Fully vested; average final pay = average of two years prior to termination |
| Retention Agreement (3/29/2018) | $1.4 million total; payable in three equal installments on 3/29/2028, 1/2/2029, 1/2/2030 if continuous employment through 3/29/2028 | Terminated without cause, for good reason, death/disability before 3/29/2028: vested account balance; within two years of change in control before 3/29/2028: up to $1.4 million lump sum | Designed to retain through 2028 |
| Employment agreement | Not disclosed for Mr. Werdein | — | CEO and CFO agreements disclosed separately; none for Werdein in proxy |
| Clawback policy | Not disclosed | — | Proxy discloses insider trading, hedging/pledging prohibitions; clawback not specified |
Compensation Structure Analysis
- Mix shift: 2024 compensation includes salary ($284,805), non-equity incentive ($45,051), and equity grants ($27,088) alongside elevated “all other” comp ($97,253) tied largely to perquisites and employer retirement contributions .
- Performance linkage: Cash bonus tied to corporate and individual measures; performance RSUs directly linked to credit quality (delinquency rates) and fully vested in Feb 2025, indicating metric attainment .
- Option reliance: No 2023–2024 option grants; legacy options remain outstanding and fully vested, expiring in 2026 .
- Red flags: Company prohibits pledging/hedging; Werdein received small SERP tax reimbursements ($2,043) but no excise tax gross-up language is disclosed for him (gross-ups apply to CEO/CFO agreements) .
Investment Implications
- Retention and continuity: The 2018 retention agreement strongly incentivizes continued employment through March 2028; combined with a vested SERP and anti-pledging policy, this reduces near-term departure and alignment risk .
- Performance alignment: A portion of equity compensation is explicitly tied to credit-quality metrics (delinquency rates), aligning incentives with asset quality and risk management outcomes; recent vesting indicates target achievement .
- Selling pressure signals: Annual RSA vesting cadence and 2026 option expiry create tactical windows, but options were out-of-the-money at 12/31/24; monitor price vs. $14.38 strike and vest event trading plans for potential supply .
- Pay-for-performance: 2024 bonus at 15.8% of salary suggests moderate payout vs. the NEO range (10%–37.5%); continued scrutiny of corporate/individual KPIs is warranted given modest company TSR rebound and net income trajectory .
- Change-of-control sensitivity: Up to $1.4M retention payout under CoC and SERP age-65 treatment could influence executive incentives in strategic transactions; consider in M&A scenarios and governance assessments .