Michael J. Rice
About Michael J. Rice
Michael J. Rice, 63, has served as an independent director of Orrstown Financial Services, Inc. and Orrstown Bank since 2018 (joined concurrent with the Mercersburg Financial Corporation acquisition). He is President of Mt. Parnell Fisheries, Co., an international producer/marketer of ornamental goldfish and koi, and previously served more than 10 years on the boards of Mercersburg and its bank subsidiary. His board credentials emphasize community banking experience and deep engagement in Franklin County’s business community.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Mercersburg Financial Corporation and its bank subsidiary | Director | “More than 10 years” prior to 2018 | Community bank board experience valued by ORRF Board |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Mt. Parnell Fisheries, Co. | President | Not disclosed | Producer and international marketer of ornamental goldfish and koi |
| Other public company boards | — | — | None disclosed for Rice |
Board Governance
- Independence: Independent under Nasdaq rules (all directors except CEO Thomas R. Quinn, Jr. and former employee Barbara E. Brobst); independent Chairman leads boards and executive sessions.
- Committee assignments (2024 and currently): Audit Committee (member), Compensation Committee (member), Nominating & Governance Committee (member).
- Meeting attendance and engagement: In 2024, the Company board met 14 times and the Bank board met 11 times; all directors attended at least 75% of board and committee meetings; all attended the 2024 annual meeting.
- Board structure: Classified board; Rice is a Class B director (term expired at the 2025 annual meeting) and was nominated for a three-year term expiring in 2028.
- Director eligibility/ownership requirement: Directors must hold at least 5,000 ORRF shares within one year of joining the board.
Fixed Compensation
| Element | 2024 Amount | Details |
|---|---|---|
| Cash retainer | $30,000 | Paid quarterly; standard non-employee director cash portion. |
| Equity grants (restricted stock) | $69,330 | Two grants: (i) Jan 24, 2024: $30,000 in RS with 16-month vest; (ii) Apr 30, 2024: 1,500 RS (grant-date FV $39,330) with 13-month vest. |
| Options | $0 | No option awards to directors in 2024. |
| Other comp | $0 | No other compensation shown for Rice. Total 2024 director pay = $99,330. |
- Structure and vesting: Director pay targeted ~50% cash / ~50% restricted stock; annual meeting grants are also made; January 2024 awards vest over 16 months; April 2024 awards vest over 13 months.
Performance Compensation
While directors are paid via retainers and time-vested equity (no options), Rice has direct oversight of pay-for-performance as a Compensation Committee member. ORRF’s 2024 executive incentive design and outcomes:
| Metric | Threshold | Target | Maximum | 2024 GAAP Result | 2024 Adjusted Result |
|---|---|---|---|---|---|
| Net Income ($000s) | 32,000 | 34,000 | 36,000 | 22,050 | 51,975 |
| ROAE (%) | 11.48% | 12.19% | 12.91% | 5.62% | 13.25% |
- Design highlights: STIP/LTIP initial earning split evenly across Net Income and ROAE; credit quality modifier for STIP; LTIP is 50% time-vested RS and 50% performance-vested RSUs with three-year ROAA goal and a TSR ±20% modifier vs an index of peer banks.
- Adjustments: 2024 results excluded ~$22.7M pre-tax merger-related expenses and $15.5M purchase-accounting related provisioning for non-PCD loans for incentive calculations.
- Outcomes: Both metrics paid at maximum on an adjusted basis; STIP paid in cash; LTIP granted in early 2025, split 50/50 RS and performance RSUs, with performance RSUs vesting after the 2025–2027 period subject to ROAA and TSR modifier.
Other Directorships & Interlocks
| Topic | Finding |
|---|---|
| Public company directorships | None disclosed for Rice beyond ORRF. |
| Compensation Committee interlocks | None; no interlocking relationships under SEC rules. |
Expertise & Qualifications
- Community bank board experience (10+ years at Mercersburg) and active Franklin County business leadership; President/operator of a private company with international trade exposure.
- Board skills applied at ORRF across Audit, Compensation, and Nominating & Governance committees.
Equity Ownership
| Holder | Shares Beneficially Owned | % of Outstanding | Notes |
|---|---|---|---|
| Michael J. Rice | 22,508 | ~0.12% (22,508 / 19,505,444) | As of March 3, 2025; no individual director owns >1%; 19,505,444 shares outstanding at record date. |
- Compliance with director ownership requirement (≥5,000 shares within one year) is met based on current holdings.
Related-Party/Conflict Controls
- Ordinary-course banking transactions existed in 2024 with certain directors, their families, and associated companies, on substantially the same terms as non-affiliates; any insider business dealings require approval by a majority of disinterested directors and must be on comparable market terms.
- Extensions of credit to directors/related interests subject to Federal Reserve Regulation O; ORRF requires prior disinterested board approval for all such extensions.
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay received 80.5% support; company engaged with holders of ~43% of outstanding shares since the 2024 annual meeting; feedback favored merger progress, financial performance, and compensation design.
Compensation Peer Group (oversight relevance)
- 2024 peer group of 18 commercial banks used for benchmarking NEO pay; 2025 peer group expanded to 20 banks reflecting larger post-merger size; ORRF TSR was at the 100th percentile vs both the prior and new groups over 1/1/2022–12/31/2024.
Governance Assessment
- Strengths: Independent director serving on three critical committees (Audit, Compensation, Nominating & Governance); board has independent chair and holds executive sessions at least twice annually; attendance thresholds met; director pay aligned with shareholders via balanced cash/RS mix and reasonable amounts; Rice’s ownership (22,508 shares) exceeds minimum director ownership requirement.
- Potential conflicts: Rice leads a private operating company; ORRF discloses robust related-party and Reg O controls with disinterested director review and market terms for any director-associated transactions; no specific related-party transactions involving Rice are disclosed.
- Red flags observed: None explicit—no option repricings, loans outside standard terms, pledging/hedging disclosures, or low say-on-pay signal identified in the proxy excerpts reviewed. Option awards to directors were $0 in 2024; say-on-pay support was 80.5%.