James Chiaro
About James Chiaro
James P. Chiaro, CMFC, AIF, is Executive Vice President and Chief Investment Services Officer at Peoples Financial Services Corp. (PFIS) and Peoples Security Bank and Trust Company, appointed effective July 1, 2024; age 49. He leads Peoples Security Wealth Advisors’ management, strategy, growth, and operating results. Prior roles include Executive Vice President and Chief Investment Officer at FNCB (Sept 2022–July 2024), and principal of Chiaro Investment Services, LLC (Aug 2017–Sept 2022). He holds Series 7, 65, 6, 63 registrations and a Pennsylvania Life Insurance License; designations include CMFC and AIF . PFIS ties executive pay to financial performance metrics including EPS growth, asset and revenue growth, loan and deposit growth, NPA/average loans+OREO, net charge-offs, and expense-to-asset ratio; the committee did not set specific 2024 goals due to the FNCB merger, using discretionary bonuses instead .
Company performance context (cumulative TSR index and ROATCE) during 2020–2024:
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Company TSR (index) | 75.70 | 112.19 | 113.83 | 110.97 | 121.93 |
| Return on Avg Tangible Common Equity (%) | 14.80% | 12.94% | 14.80% | 10.30% | 2.63% |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| FNCB Bancorp, Inc. | EVP & Chief Investment Officer | Sep 2022–Jul 2024 | Not disclosed |
| Chiaro Investment Services, LLC | Principal | Aug 2017–Sep 2022 | Not disclosed |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No public company directorships disclosed for Chiaro |
Fixed Compensation
| Component | Program Design | 2024 Treatment | Notes |
|---|---|---|---|
| Base Salary | Foundation for setting incentive targets; determined by duties, experience, and peer benchmarking | Not specifically disclosed for Chiaro | Committee uses market data and peer studies; engaged Pearl Meyer for review |
| Annual Cash Incentive | Cash Incentive Plan with performance goals set by Compensation Committee | No specific goals set due to merger; discretionary bonuses allowed under plan | Clawback applies to overpayments if restatements occur |
| Equity Awards | Historically mix of performance-vested RSUs (70%) and time-vested restricted stock (30%) | 2024 grants were solely time-vested restricted stock, vesting ratably over 3 years | Committee to reconsider mix in 2025 |
| Benefits/Perqs | ESOP; 401(k) plan; legacy pension; health & welfare; SERPs for certain execs; perqs like country/dining club for some NEOs | Not specifically disclosed for Chiaro | Company-wide programs; specific perqs detailed for NEOs, not for Chiaro |
Performance Compensation
| Metric | Usage in Incentive Programs | Targets/Weights | 2024 Actual/Payout | Vesting |
|---|---|---|---|---|
| EPS Growth | Among “most important measures” linking pay to performance | Not disclosed | Committee used discretion due to merger; no preset 2024 goals | Time-vested restricted stock vests over 3 years |
| Asset Growth | Key performance measure | Not disclosed | Discretionary in 2024 | See above |
| Revenue Growth | Key performance measure | Not disclosed | Discretionary in 2024 | See above |
| Loan Growth | Key performance measure | Not disclosed | Discretionary in 2024 | See above |
| Deposit Growth | Key performance measure | Not disclosed | Discretionary in 2024 | See above |
| NPA/Avg Loans + OREO | Risk quality measure | Not disclosed | Discretionary in 2024 | See above |
| Net Charge-offs/Avg Loans | Credit quality measure | Not disclosed | Discretionary in 2024 | See above |
| Expense-to-Asset Ratio | Efficiency measure | Not disclosed | Discretionary in 2024 | See above |
Equity Ownership & Alignment
- Stock ownership guidelines: Executive officers who receive equity awards are expected to beneficially own PFIS shares equal to or greater than 2x their annual base salaries, with five years to achieve compliance .
- Clawback policies: Dodd-Frank Section 954-compliant policy adopted in 2023 for recoupment of incentive compensation if a restatement occurs, plus Cash Incentive Plan clawback for erroneous data and misconduct .
- Beneficial ownership: Individual ownership for Chiaro was not separately disclosed; all directors and executive officers as a group (27 persons) beneficially owned 803,421 shares, or 8.0% of shares outstanding as of March 3, 2025 .
- Pledging/hedging: No pledging or hedging disclosures specific to Chiaro were noted in the proxy; not disclosed.
Employment Terms
| Item | Terms | Source |
|---|---|---|
| Role & Appointment | EVP & Chief Investment Services Officer effective July 1, 2024 | |
| Severance Plan Eligibility | Covered under Severance and Change in Control Plan as Tier III Executive (Chief Investments Services Officer) | |
| Qualifying Termination | Position eliminated without suitable offer; involuntary termination not for cause; resignation for Good Reason; or within 24 months post-Change in Control meeting those conditions | |
| Non-Change in Control Benefits (Tier III) | 12 months of base salary paid over 12 months; pro rata bonus per Annual Bonus Plan for year of termination; COBRA reimbursement for 12 months | |
| Change in Control Benefits (Tier III) | Lump sum equal to 12 months of base salary + 1x target annual bonus; COBRA reimbursement for up to 12 months | |
| Conditions | Benefits contingent on signing separation agreement with release; non-solicitation covenant for 12 months; forfeiture and clawback remedies for breaches/misconduct | |
| Good Reason | 10%+ base salary reduction; material breach; material diminution in role absent suitable position; subject to notice/cure steps; limited to within 24 months post-Change in Control | |
| Suitable Position | Role within same or one level below, within 50 miles, and at least 90% of combined base + incentive opportunity (alternatively successor employer at ≥90%) | |
| 280G Cut-Back | Best-net approach to avoid or accept excise tax subject to maximizing after-tax value; ordered reduction hierarchy |
Investment Implications
- Alignment: Ownership guidelines at 2x salary and formal clawback policies strengthen pay-for-performance and downside discipline, supporting shareholder alignment for executive officers, including Chiaro .
- Retention risk and severance economics: Tier III severance provides 12 months base + pro rata bonus and COBRA in normal terminations, and 12 months base + 1x target bonus post-Change in Control (plus COBRA), reducing voluntary turnover risk but creating moderate change-of-control protections .
- Incentive mix and selling pressure: 2024 equity grants were time-vested restricted stock with 3-year ratable vesting for NEOs; while Chiaro’s specific grants aren’t disclosed, time-based vesting structures can create periodic vesting-related liquidity considerations across PFIS’s executive cohort .
- Performance rigor: With 2024 bonuses discretionary due to merger, scrutiny should shift to 2025 reinstatement of performance metrics (EPS, growth, asset quality, efficiency), and whether the committee restores performance-vested RSUs (previously 70% of LTIs) to maintain high beta to outcomes .