James O. Donnelly
About James O. Donnelly
James O. Donnelly is President and Chief Executive Officer of Norwood Financial Corp (parent of Wayne Bank) and has served as a director since May 10, 2022; he became CEO on May 9, 2022. He is 57 and brings 30+ years of banking experience, most recently EVP and Chief Commercial Officer at Bangor Savings Bank, with leadership across commercial lending, retail/mortgage, credit, wealth, and M&A-driven expansion . Under his tenure, NWFL executed a late-2024 balance sheet repositioning and equity raise that drove a GAAP net loss for 2024 but aimed to improve forward profitability and liquidity; cumulative TSR from 12/31/2021–12/31/2024 was 18.99% per the proxy’s Pay vs Performance disclosure . 2024 net (loss)/income was $(0.16) million vs $16.76 million in 2023; ROA was -0.01% (2024) vs 0.79% (2023) and ROE -0.09% vs 9.67% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bangor Savings Bank | EVP & Chief Commercial Officer | Pre-2022 | Led commercial, retail/mortgage, credit, wealth; experience in franchise growth via acquisition and market expansion |
External Roles
| Organization/Area | Role | Years | Strategic Impact |
|---|---|---|---|
| Healthcare, higher education, United Way | Community service leadership (details not itemized) | Not disclosed | Community engagement and stakeholder connectivity across key civic institutions |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $478,125 | $538,000 |
| Annual Cash Bonus ($) | $115,000 | $134,500 |
| Bonus as % of Base Salary | Not disclosed | 25% |
| All Other Compensation ($) | $32,122 | $40,795 |
| Perks Detail (2024) | — | 401(k) match $31,050; life insurance $2,396; club dues $2,317; auto allowance $5,032 |
| Director Fees | Not applicable | Not applicable (CEO directors receive no board/committee fees) |
Notes:
- 2024 bonuses were awarded from a $1.5M discretionary pool despite negative net income; historically the bonus pool is tied to a percentage of pre-tax earnings (3.0%–5.3%) with NEO awards based on Company and individual goals .
Performance Compensation
| Incentive Type | Metric(s) | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Cash Incentive (2024) | Discretionary; historically based on Company pre-tax earnings pool and individual goals | Not disclosed | Not disclosed | Discretionary pool of $1.5M approved (despite negative net income) | CEO bonus = $134,500 (25% of salary) | Cash; paid after year-end |
| Restricted Stock Awards (time-based) | Service-based vesting | Not applicable | Not applicable | Grants detailed below | Shares vest over time | 5 equal annual tranches from stated start dates; CIC accelerates |
Equity grants outstanding at 12/31/2024 (CEO):
- 5,923 shares (2024 grant); vest in five equal installments beginning Dec 15, 2025 .
- 5,157 shares (2023 grant); vest in five equal installments beginning Dec 12, 2024 .
- 1,500 shares (2022 grant); vest in five equal installments beginning Dec 13, 2023 .
- 600 shares (sign-on grant dated May 10, 2022); 70% vested at 1-year, then 10% annually thereafter .
Change-in-control and termination impacts:
- Stock awards fully vest upon a change-in-control; options (not applicable to CEO) vest on death/disability; restricted stock vests to next event on death/disability .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 7,936 shares; less than 1% of shares outstanding |
| Unvested Restricted Stock (at 12/31/2024) | 5,923 shares ($161,165), 5,157 shares ($140,322), 1,500 shares ($40,815), 600 shares ($16,326) – valued at $27.21/share |
| Options | None outstanding for CEO |
| Ownership Guidelines | Not disclosed in proxy |
| Hedging/Pledging Policy | Company has not adopted anti-hedging or anti-pledging policy; hedging transactions are not prohibited |
| Insider Transactions | No Form 4s located in our search window; unable to assess selling pressure from filings [ListDocuments result: none] |
Employment Terms
| Term | Detail |
|---|---|
| Role and Start Date | President & CEO of Company and Bank; effective May 9, 2022 |
| Agreement Length | 36 months from effective date; auto-renews 12 months annually unless either party provides notice |
| Base Salary | $425,000 at agreement inception; adjustable by Board |
| Incentives/Benefits | Participates in discretionary incentive compensation; eligible for full employee benefits; club dues paid; executive-quality automobile with all costs covered; vehicle replacement after 3 years/45k miles or earlier due to maintenance |
| Severance (Non-CIC) | If terminated without cause or for “good reason”: lump sum equal to base salary for remaining term, min 18 months, max 24 months |
| Severance (CIC) | 2.999x 5-year average annualized taxable compensation; plus 18 months COBRA reimbursements; 2023 amendment excludes taxable income from equity grants vesting/exercise in 2024+ from 280G calc |
| Clawback | Incentive-Based Compensation Recovery Policy adopted in 2023 to recover erroneously awarded pay; Nasdaq-compliant clawback policy effective October 2, 2023 |
| Salary Continuation Plan | $125,000 per year payable in monthly installments for 15 years at Normal Retirement Age (65), with detailed provisions for disability, death, and CIC; receipt contingent on non-compete and non-solicit compliance |
| Non-Compete/Non-Solicit | Required under Salary Continuation Agreement; duration not explicitly stated in proxy summary |
Board Governance
| Attribute | Detail |
|---|---|
| Board Service | Director since May 10, 2022; term expires 2027 |
| Board Leadership Structure | Chairman and CEO roles separated; Lewis J. Critelli serves as non-executive Chair |
| Independence | CEO is not independent; independent directors identified by Nasdaq standards are listed separately (Donnelly not included) |
| Committees | CEO does not receive committee fees; no committee memberships disclosed for CEO |
| Meeting Attendance | No director attended fewer than 75% of meetings in 2024 |
| Executive Sessions | Independent directors did not meet in executive session during 2024 |
Director Compensation (as it relates to CEO-director status)
- Non-employee director fees include $5,250 per month for bank board, plus $1,250 monthly to Chair, and $750 per committee meeting; CEO directors receive no board or committee fees .
Multi‑Year Compensation Summary (CEO)
| Metric | 2023 | 2024 |
|---|---|---|
| Salary ($) | $478,125 | $538,000 |
| Bonus ($) | $115,000 | $134,500 |
| Stock Awards ($, grant-date FV) | $191,188 | $161,402 |
| All Other Compensation ($) | $32,122 | $40,795 |
| Total ($) | $816,435 | $874,697 |
Pay vs Performance (Company metrics)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net (Loss) Income ($) | $29,232,618 | $16,759,106 | $(160,000) |
| TSR (Value of $100 initial) | $133.08 (12/31/2022) | $135.81 (12/31/2023) | $118.99 (12/31/2024) |
Additional 2024 performance context (select items)
| Item | 2023 | 2024 |
|---|---|---|
| Net Interest Income ($) | $62,067,000 | $62,191,000 |
| Other Income ($) | $8,124,000 | $(11,151,000) (includes ~$19.96M securities loss) |
| Efficiency Ratio (Adj.) | 62.15% | 68.48% |
Compensation Structure Analysis
- Discretionary cash bonuses despite negative 2024 net income (bonus pool $1.5M) indicate potential pay-performance misalignment for that year; historically, the bonus pool ties to pre-tax earnings and individual goals, but the Board retained discretion when net income was negative .
- Mix has shifted toward time-based restricted stock (no options for CEO), reducing risk to the executive relative to options; equity vests accelerate on change in control, which can elevate CIC costs (2.999x) .
- Clawback policies were adopted (2023), improving accountability; no anti-hedging/anti-pledging policy is a governance red flag for alignment .
Related Party Transactions
- Ordinary-course lending and transactions with directors/executives/families conducted on substantially the same terms as with unrelated parties, approved by the full Board; no unfavorable features disclosed .
Risk Indicators & Red Flags
- Absence of anti-hedging/anti-pledging policy (hedging not prohibited) .
- Discretionary bonuses in a loss year .
- Enhanced CIC severance potential (2.999x) plus accelerated vesting .
- Cybersecurity litigation (MOVEit) noted at company level; management states no material adverse effect expected to date .
Expertise & Qualifications
- 30+ years in banking with deep operating expertise across lending, credit, retail/mortgage, wealth, financial management, and growth via M&A/market expansion .
- Significant community engagement in healthcare, higher education, and United Way .
Work History & Career Trajectory
| Organization | Role | Tenure | Notable |
|---|---|---|---|
| Norwood Financial/Wayne Bank | President & CEO; Director | Since May 2022 | Led 2024 capital raise and securities portfolio repositioning to support profitability, liquidity, and capital |
| Bangor Savings Bank | EVP & Chief Commercial Officer | Pre-2022 | Commercial, retail/mortgage, credit, wealth; growth and expansion experience |
Board Governance (Committees and Quality)
- Audit Committee: Independent members Forte, Phillips, Matergia, Hungerford, Gifford; Audit Committee Financial Expert: Dr. Andrew A. Forte .
- Compensation Committee: Independent members Lamont, Matergia, Gifford, Nolan .
- Nominating Committee: Independent members Lamont, Matergia, Nolan, Forte .
Equity Vesting & Potential Selling Pressure
| Grant | Shares Unvested (12/31/24) | Vesting Start | Schedule | Market Value at $27.21 |
|---|---|---|---|---|
| 2024 RS | 5,923 | Dec 15, 2025 | 5 equal annual installments | $161,165 |
| 2023 RS | 5,157 | Dec 12, 2024 | 5 equal annual installments | $140,322 |
| 2022 RS | 1,500 | Dec 13, 2023 | 5 equal annual installments | $40,815 |
| 2022 Sign-on RS | 600 | May 10, 2023 | 70% at 1-year, then 10% annually | $16,326 |
Note: We did not locate Form 4 filings in our search window, so cannot correlate vesting events to open-market sales from SEC ownership reports [ListDocuments result: none].
Investment Implications
- Alignment: CEO’s direct share ownership is modest (<1%) and the company lacks anti-hedging/anti-pledging prohibitions, weakening alignment; however, unvested RS awards create ongoing equity exposure .
- Pay vs performance: 2024 discretionary bonuses amid a loss year (driven by portfolio repositioning losses) raise near-term alignment questions, though the repositioning and equity raise may improve forward NIM/liquidity/capital—monitor 2025–2026 results to judge efficacy .
- Retention/CIC economics: Non-CIC severance min 18 to max 24 months; CIC benefits at 2.999x plus accelerated vesting and COBRA reimbursement elevate potential takeover costs; salary continuation ($125k for 15 years) adds to long-term retention value but conditioned on non-compete/non-solicit compliance .
- Trading signals: Upcoming multi-year vesting tranches could create periodic supply; absence of Form 4 data prevents current selling pressure assessment—watch forthcoming vest dates (Dec each year) and any 10b5‑1 adoption disclosures .
- Governance: Separation of Chair/CEO mitigates dual-role risk; lack of independent executive sessions in 2024 is atypical for banks and worth engaging on; clawback adoption improves discipline post‑restatement .