Philip E. Fague
About Philip E. Fague
Philip E. Fague, 65, is Executive Vice President and Chief Trust Officer of Orrstown Bank; he joined Orrstown in 1988, has served as Chief Trust Officer since 2016, and was Chief Mortgage Officer from January 2020 through September 2022 . Company performance context relevant to executive incentives: in 2024, adjusted net income reached $52.0M and adjusted ROAE 13.25%, driving maximum-level incentive payouts; over the 2022–2024 period, Orrstown’s TSR ranked at the 100th percentile versus peers, underscoring management value creation alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Orrstown Bank | Executive Vice President, Chief Trust Officer | 2016–Present | Leads trust and wealth services; role included performance-based LTIP participation tied to ROAA and TSR |
| Orrstown Bank | Chief Mortgage Officer | Jan 2020–Sep 2022 | Led mortgage operations during industry volatility; executive incentives continued under STIP/LTIP framework |
| Orrstown Bank | Joined Company | 1988– | Long-tenured executive contributing to client, trust, and mortgage growth |
External Roles
No external directorships or public company roles disclosed for Fague in recent proxies .
Fixed Compensation
Historical NEO disclosures when Fague was a Named Executive Officer:
| Metric | 2015 | 2016 | 2017 |
|---|---|---|---|
| Salary ($) | 216,237 | 224,427 | 231,160 |
| Cash Bonus ($) | 20,000 | 13,000 | 18,000 |
| Stock Awards ($) | 27,651 | 26,535 | 44,700 |
| Non-Equity Incentive Plan ($) | 35,676 | 37,876 | 62,425 |
| Change in Pension Value ($) | 28,279 | 16,885 | 40,212 |
| All Other Compensation ($) | — (included above) | — (included above) | 25,752 |
| Total ($) | 327,842 | 318,723 | 422,249 |
Notes: Column naming follows reported S-K disclosures; in 2015/2016 tables, “Change in Pension Value” and “All Other Comp” are separate columns; 2017 explicitly lists “All Other Compensation” .
Performance Compensation
Plan design applicable to executive officers (including Fague) in 2024/2025:
- Short-Term Incentive Plan (STIP): two metrics, each 50% weighting; Net Income and ROAE; credit quality modifier can reduce/eliminate awards .
- Long-Term Incentive Plan (LTIP): initial grant sizing based on the same two metrics; 50% time-vested RSAs (33% per year over 3 years) and 50% performance-vested RSUs with three-year ROAA goal and TSR modifier ±20% versus a defined bank index .
2024 company performance vs targets used to size 2025 awards:
| Metric | Weighting | Target | Actual (Adjusted) | Payout Scale Result | Vesting Mechanics |
|---|---|---|---|---|---|
| Net Income | 50% | $34.0M | $52.0M | Maximum for initial STIP/LTIP sizing | RSAs: 33% per year; RSUs: 3-year ROAA with TSR ±20% |
| ROAE | 50% | 12.19% | 13.25% | Maximum for initial STIP/LTIP sizing | RSUs vest based on ROAA; TSR modifier ±20% |
Credit Quality Modifier: Awards reduced by 30% if nonperforming assets/total assets >2%; eliminated if >4%; satisfied in 2024 (no reduction) .
Equity Ownership & Alignment
Historical beneficial ownership when disclosed:
| Metric | 2017 | 2018 | 2019 |
|---|---|---|---|
| Common Shares Owned (#) | 34,542 | 37,793 | 39,797 |
| Exercisable Options (#) | 11,985 | 8,785 | 4,800 (exercisable, $21.14 strike, expiring 7/21/2020) |
| Unvested Stock/Units (#) | — | — | 9,939 RS/Units unvested; 6,339 unearned RSUs (plan) |
Alignment policies:
- Anti-pledging/anti-hedging: Directors and executive officers are prohibited from pledging company securities or entering derivative/hedging transactions; clawback policy compliant with Nasdaq Rule 10D-1 for erroneously awarded incentive comp .
- Ownership guidelines: Not explicitly disclosed for executives in cited sections; no pledging permitted .
Employment Terms
Key contractual economics and protections drawn from historical disclosures:
| Term | Summary |
|---|---|
| Employment agreement term and auto-renewal | Executives had 3–5 year terms with annual auto-extension unless non-renewal notice; Fague’s agreement continued until 2021 by the 2020 proxy . |
| Severance (non-CIC) | If terminated without cause or for “good reason,” cash severance equals base salary plus average cash bonus over past 3 years, for the greater of remaining term or 6 months; continued benefit participation for 6 months or cash in lieu . |
| Mandatory retirement provisions | At age 65, executives provide notice; receive six months salary continuation and 150% of premium cost to maintain group life insurance for three years; may be delayed by Board in one-year increments . |
| Non-compete & Non-solicit | Non-compete for the greater of six months or severance period, not to exceed 24 months; applies within 75-mile radius of headquarters; non-solicit of employees/customers applies during this period . |
| Change-in-control (CIC) cash multiple | 2x of (annual base salary + prior-year cash bonus/annual incentive) for Fague; paid in a lump sum within 20 days post-termination . |
| CIC benefits continuation | Health and welfare benefits continued for two years on same terms as active employees . |
| CIC excise tax treatment | Earlier proxies provided excise tax “gross-up/adjustment” to neutralize Section 4999 taxes ; later policy moved to a “better-of” cutback to avoid excess parachute or maximize after-tax benefit (no gross-up) . |
| Salary Continuation Agreement (SERP-like) | Normal retirement annual benefit of $73,000 at age 65; payable monthly over 15 years; change-in-control preserves the normal retirement benefit; forfeiture provisions for cause/competing within 50-mile radius . |
Investment Implications
- Pay-for-performance alignment: STIP/LTIP constructs tie payouts to Net Income and ROAE (1-year) and ROAA/TSR (3-year), with credit quality safeguards; 2024 adjusted outperformance and 3-year TSR at the 100th percentile signal incentives are tightly linked to shareholder value creation—positive for alignment .
- Retention risk: Fague’s legacy CIC multiple (2x) and two-year benefits continuation provide moderate protection; the Salary Continuation Agreement’s $73k/year stream over 15 years on retirement further stabilizes retention economics; non-compete/non-solicit terms reduce near-term poaching risk .
- Selling pressure and vesting cadence: Time-vested RSAs vest 33% annually; performance RSUs cliff-vest after three years subject to ROAA/TSR; historical option positions (now expired) and periodic RS/RSU vesting can create event-driven Form 4 activity windows; anti-pledging policy mitigates leverage-related pressure .
- Governance and clawbacks: Formal recovery policy per Nasdaq 10D-1 and anti-hedging/pledging rules reduce misconduct and misalignment risks; no red flags on related-party transactions for Fague identified in cited sections .
- Policy evolution: Transition from excise tax gross-up to cutback enhances shareholder-friendliness; CIC multiples are controlled vs. industry norms for EVP-level roles—limits parachute inflation risk .
Items not disclosed: current-year individual base salary/bonus targets for Fague, current beneficial ownership counts post-merger, and specific executive ownership guidelines or compliance status were not found in cited documents.
Sources
- Executive biography and role history:
- 2024/2025 incentive design, targets, and outcomes:
- Company TSR percentile (3-year):
- Credit quality modifier details:
- RSA/RSU vesting schedules and TSR modifier:
- Historical compensation (2015–2017):
- Historical equity ownership and awards:
- Employment agreement terms and severance mechanics:
- Change-in-control cash multiple and benefits continuation; excise tax treatment evolution:
- Salary Continuation Agreement terms and benefit amount:
- Anti-hedging/pledging and clawback policy: