Joseph L. Paese
About Joseph L. Paese
Joseph L. Paese, age 65, is First Executive Vice President (since January 2024) and Director of Trust & Wealth Management (since April 2016) at Mid Penn Bancorp (MPB), having previously served as Executive Vice President from April 2016 to January 2024 . Education is not disclosed in MPB’s 2025 proxy. Company performance context during 2024 included ROAA of 0.91%, organic deposit growth of $343 million (7.91%), organic loan growth of $189 million (4.5%), and tangible book value growth of 9% . MPB’s total shareholder return (TSR) for 2024 was 122.74 versus a peer group TSR of 116.68; net income was $49.44 million and ROTCE was 11.60% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mid Penn Bancorp / Mid Penn Bank | First Executive Vice President | Jan 2024–present | Senior leadership role across enterprise; complements operations and trust/wealth platform |
| Mid Penn Bank | Director of Trust & Wealth Management | Apr 2016–present | Leads Trust & Wealth business lines; aligns with relationship banking strategy |
| Mid Penn Bank | Executive Vice President | Apr 2016–Jan 2024 | Executive oversight supporting growth, profitability, and customer service initiatives |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 259,172 | 285,383 | 302,824 |
| All Other Compensation ($) | 26,814 | 29,846 | 33,654 |
| Employment Agreement Base Salary ($) | — | — | 275,000 (contractual base; may be increased) |
Notes:
- 2024 All Other Compensation included 401(k) match, insurance, vehicle, club memberships, and miscellaneous items .
- Employment agreements auto-renew each September 6; Paese has a two-year term on renewal .
Performance Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Stock Awards ($) | 18,013 | 18,004 | 18,016 |
| Non-Equity Incentive Plan Compensation ($) | 30,000 | 70,000 | 0 (no cash incentives awarded in 2024) |
| Bonus ($) | — | — | — (no retention bonus applicable to Paese) |
Equity mechanics and vesting:
- Outstanding unvested restricted stock at 12/31/2024: 1,891 shares; market value $54,536 .
- RS awards vest 25% annually on each grant anniversary, subject to continued employment; unvested shares generally forfeit on termination (death vests the tranche for that year) .
- Shares vested in 2024: 596; value realized $12,921 .
- No stock option grants in 2024 .
- Clawback: All awards under MPB’s Stock Incentive Plan are subject to the Corporation’s Clawback Policy .
Performance framework used by the Compensation Committee:
- Key metrics considered: net interest margin, ROAA, ROTCE, efficiency ratio, asset quality, organic loan growth, TSR .
- The Committee did not award cash incentive payments for 2024 due to performance relative to aggressive targets and the operating environment .
Equity Ownership & Alignment
| Item | As of Date | Amount | % of Shares Outstanding |
|---|---|---|---|
| Beneficial Ownership (includes restricted) | Mar 3, 2025 | 7,838 shares (includes 571 restricted shares) | <1% (“*” per proxy) |
| Restricted Stock Outstanding (unvested) | Dec 31, 2024 | 1,891 shares; $54,536 market value | n/a |
Alignment and policies:
- Insider Trading Policy requires pre-clearance and imposes quarterly blackout periods; anti-hedging provisions prohibit short selling and derivative transactions (other than plan awards) .
- No pledging by Paese is disclosed; pledging policy not explicitly stated for executives in the proxy .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | Auto-renews each Sept 6 for two years (Paese); provides base salary ($275,000, subject to increases), bonus program participation, and benefits; severance if involuntarily terminated without cause or for good reason equals base salary continuation for the greater of remaining term or six months, plus continued benefits or cash equivalent . |
| Non-Compete / Non-Solicit | If terminated for cause or voluntary (no good reason): 12-month non-solicitation of customers and employees; if without cause or good reason: 12-month employee non-solicit and 6-month customer non-solicit . |
| Change-in-Control (CIC) | Double-trigger; lump sum 2.25x highest annual base salary in last 12 months; continued medical/vision/dental for 27 months or cash equivalent; non-solicit covenants as above; no excise tax gross-ups (executive may elect to reduce to avoid 280G excise) . |
| SERP | Supplemental Executive Retirement Plan provides $80,000 annually for 15 years starting at separation on or after normal retirement (age 70), disability, death, or within two years post-CIC; approx. 85% vested as of 2024 year-end, remaining vesting ratably over next two years; forfeiture for violation of covenants; 280G mitigation election; no gross-up . |
| Potential Payments (Illustrative) | If CIC then termination: severance $686,251; SERP acceleration $355,020; welfare continuation $47,979; accelerated RS $54,177; total $1,143,427 (assumes event on 12/31/2024) . |
Performance Compensation Details
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Corporate earnings (context) | Not disclosed | 2023 net income target $46.236M (adjusted post-acquisition) | 2023 actual net income $37.397M | No 2024 cash incentives awarded | n/a |
| Corporate earnings (Q1 2024 context) | Not disclosed | Q1 2024 net income target $7.252M | Q1 2024 actual net income $12.133M | No 2024 cash incentives awarded | n/a |
| Restricted Stock | n/a | n/a | n/a | Equity awards granted; vest 25% annually subject to service | 25% per year |
Say-on-Pay, Peer Group, and Governance Signals
- Say-on-pay approval at 2024 Annual Meeting exceeded 94% of votes cast, indicating strong shareholder support for executive compensation .
- 2024 compensation benchmarking used peers with assets $2.8–$9.6B; objective set around the 50th percentile; consultant: Newcleus Compensation Partners .
- Compensation Committee independence and oversight affirmed; CEO did not participate in determining his own pay; no interlocks .
Investment Implications
- Alignment: Paese’s equity exposure (unvested RS awards) and SERP benefits align retention with long-term performance, while anti-hedging rules mitigate misalignment risk; no pledging disclosed, reducing collateral-driven selling risk .
- Incentive mix: 2024 compensation leaned toward fixed pay and time-based equity; absence of cash incentives suggests discipline against discretionary payouts amid a challenging environment, which can be shareholder-friendly but may reduce immediate performance leverage .
- CIC economics: Double-trigger CIC at 2.25x salary plus benefits and SERP acceleration creates moderate transaction-related payout; non-solicit covenants mitigate post-deal franchise risk .
- Execution track record context: Company-level 2024 ROAA (0.91%), organic deposit and loan growth, and TSR (122.74) support a constructive backdrop; continued vesting of equity and SERP accruals incentivize stability in Trust & Wealth and broader banking operations .