Dr. Kenneth A. Phillips
About Dr. Kenneth A. Phillips
Independent director of Norwood Financial Corp (NWFL). Age 74; first elected to the board in 1988; current term expires in 2026 . Biography notes he is a retired optometrist with deep knowledge of the bank’s market area and active community involvement . The board has determined he is independent under Nasdaq standards .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| — (not specified) | Retired optometrist | Not disclosed | Active in various community activities; long-standing local knowledge cited as value-add to board deliberations |
External Roles
- No current or prior public company directorships disclosed in the proxy biography for Dr. Phillips .
Board Governance
- Committee assignments (2024): Audit Committee member; the committee met 5 times in 2024 . Audit Committee chair is Dr. Andrew A. Forte (Phillips is not chair) .
- Not on the Compensation Committee (Lamont, Matergia, Gifford, Nolan) or Nominating Committee (Lamont, Matergia, Nolan, Forte) in 2024 .
- Attendance/engagement: In 2024, the Company board held 12 regular and 2 special meetings; the Bank board held 12 regular meetings; no director attended fewer than 75% of the total board and committee meetings on which they served . Independent directors did not meet in executive session in 2024 (they met six times in 2023) .
- Independence: Board determined Phillips is independent under Nasdaq rules .
Fixed Compensation
Director compensation (non-NEO) – Individual (Dr. Phillips):
| Metric | 2023 | 2024 |
|---|---|---|
| Fees earned or paid in cash | $74,250 | $80,250 |
| Stock awards (grant-date fair value) | $20,762 | $22,481 |
| Option awards | — | — |
| All other compensation | $53 | $53 |
| Total | $95,065 | $102,784 |
Additional director fee structure (all outside directors):
- Company board meeting fee: $750 per meeting .
- Bank board monthly retainer: $5,250 per month; Chair receives additional $1,250 per month .
- Committee meeting fees: $750 per meeting (Trust, Audit, Compensation, Loan) .
- Director Deferred Fee Plan available; deferrals credited at WSJ Prime + 200 bps (min 2%, max 9%); rate reduced to 2% if non-compete/non-solicit violated; obligations unsecured .
Performance Compensation
Director equity and plan terms (outside directors as a group):
| Term/Metric | 2023 | 2024 |
|---|---|---|
| Annual restricted stock grant per outside director | 700 shares (Dec 12, 2023) | 825 shares (Dec 24, 2024) |
| Vesting schedule (director RS) | Five equal annual installments beginning 1 year from grant | Five equal annual installments beginning 1 year from grant |
| Change-in-control treatment | Director RS vests immediately upon change in control | Director RS vests immediately upon change in control |
| Dividends on RS prior to vesting | Paid to directors | Paid to directors |
| Director Retainer Shares (effective July 1, 2024) | — | First $1,000 of monthly bank retainer paid in stock; 100% earned at grant; 6-month transfer lock and must be in compliance with stock ownership guidelines; 500-share annual cap per director |
Note: No performance-based metrics (e.g., TSR, EPS, ESG targets) are disclosed for director pay; director equity is time-based and director retainer shares are service-based as described above .
Other Directorships & Interlocks
- None disclosed for Dr. Phillips. Board considered certain routine banking relationships with directors and determined independence, including limited legal services by another director’s firm; no specific related-party transactions involving Dr. Phillips were disclosed .
Expertise & Qualifications
- Retired optometrist; long-standing community involvement; cited for knowledge of the bank’s market area and local economy .
- Long tenure on the board since 1988 .
- Independent under Nasdaq rules .
Equity Ownership
Beneficial ownership (record date March 4, 2025):
- Common stock beneficially owned: 15,690 shares; less than 1% of shares outstanding . Total shares outstanding at record date: 9,262,592 .
- Beneficial ownership calculations exclude unvested restricted stock .
Equity holdings (outside director awards) at year-end:
| Holding | 12/31/2023 | 12/31/2024 |
|---|---|---|
| Unvested restricted stock (Dr. Phillips) | 1,800 shares | 2,025 shares |
| Stock options outstanding (Dr. Phillips) | 1,300 options | — |
Footnote on options: The 2025 proxy footnote states the share amounts for beneficial ownership include shares that may be acquired within 60 days via stock options, listing Dr. Phillips with 1,300 option shares; as of 12/31/2024, the director options table shows no outstanding options for Dr. Phillips (difference reflects differing reference dates and tables) .
Ownership alignment and guidelines:
- Director Retainer Shares cannot be transferred unless the director is then in compliance with the Company’s Stock Ownership Guidelines; numeric guideline levels and individual compliance status are not disclosed .
- The Company has not adopted an anti-hedging or anti-pledging policy prohibiting hedging/derivative transactions by directors; such transactions are not prohibited (potential alignment risk) .
Governance Assessment
Strengths
- Independence affirmed; extensive local market knowledge; continuous Audit Committee service supports risk and financial oversight .
- Attendance: no directors fell below 75% of meetings in 2024 .
- Director equity grants and Director Retainer Shares promote some stock alignment; equity vests over five years; change-in-control accelerated vesting disclosed .
Watch items / potential red flags
- Hedging/pledging: Company has no anti-hedging/anti-pledging prohibition; directors may engage in hedging transactions (misalignment risk vs best practices) .
- Executive sessions: Independent directors did not meet in executive session in 2024, reducing private independent oversight cadence vs. 2023 (when there were six sessions) .
- Board pay discretion signal: In 2024, despite negative net income, the Board approved a $1,500,000 bonus pool for employees/NEOs; while Dr. Phillips is not on the Compensation Committee, the board-level decision may draw investor scrutiny on pay-for-performance rigor .
Related-party transactions
- Policy states director/insider loans are on market terms and approved by the full board; no unfavorable features; no specific related-party transactions involving Dr. Phillips disclosed .
Clawback/disclosure controls
- Company adopted an incentive compensation recovery (clawback) policy in 2023; equity awards under the 2024 Plan (including director awards) are subject to recoupment under Exchange Act Section 10D/Dodd-Frank and Company policy .