Eric Heagy
About Eric Heagy
Eric J. Heagy, CPA (age 50) is President, Chief Executive Officer and Chief Financial Officer of PFS Bancorp and Peru Federal Savings Bank; he joined Peru Federal in 2002, became CFO in 2004, and was promoted to President and CEO in 2007; he has served as a director since 2008 and holds a bachelor’s degree in accounting from Illinois State University with an active CPA license . The Board separates the Chair and CEO roles (Chair: Michael J. Rooney), and classifies Mr. Heagy as non‑independent given his executive status; all standing board committees are composed solely of independent directors, which mitigates governance risks of his executive/director dual role .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Peru Federal Savings Bank | Controller | 2002–2004 | Joined after four years in public accounting; established financial reporting foundation . |
| Peru Federal Savings Bank | Chief Financial Officer | 2004–2007 | Expanded responsibilities across compliance, IT, lending and HR during growth and operational build‑out . |
| Peru Federal Savings Bank / PFS Bancorp, Inc. | President, Chief Executive Officer and Chief Financial Officer | 2007–Present | Led the organization through mutual-to-stock conversion and broader operational oversight; continues to certify financials as CEO/CFO . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Illinois Valley YMCA | Board Treasurer | Not disclosed | Community leadership and financial oversight . |
| Peru Elementary School District 124 | Treasurer | Not disclosed | Community financial stewardship . |
Fixed Compensation
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $205,000 | $205,000 | $211,000 |
| Annual Cash Bonus | $20,000 | $100,000 (deferred to plan) | $25,000 |
| All Other Compensation | $12,695 | $11,410 | $23,850 |
Breakdown of 2024 “All Other Compensation”:
- 401(k) match: $13,264; ESOP allocation: $10,438; Life insurance imputed income: $148 .
Performance Compensation
- Annual incentive framework: The employment agreement provides participation in “any bonus programs” made available to senior management; the proxy does not specify formulaic performance metrics for the annual cash bonus .
- Equity incentives: In April 2025, the Board proposed the 2025 Equity Incentive Plan with best‑practice guardrails: minimum one‑year vesting (5% carve‑out), prohibition on below‑market option grants and repricing/buyouts without shareholder approval, dividends/deferred dividends only upon vesting, and double‑trigger vesting upon change in control (unless awards are not assumed); the Committee may establish performance goals for any award; as of the proxy date, no awards had been granted .
- Clawback/forfeiture and conduct risk: Awards are subject to clawback (including Dodd‑Frank 954), trading policy restrictions, and hedging/pledging policy restrictions; award agreements may include reduction/cancellation/recoupment for specified misconduct or covenant breaches .
Illustrative incentive design table (as disclosed)
| Plan/Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Annual Cash Bonus | Not disclosed | Not disclosed | Not disclosed | $25,000 in 2024 | Cash (annual) |
| 2025 Equity Incentive Plan (RSUs/Options/PSUs) | Committee‑set | Committee‑set | N/A (no grants yet) | N/A | Minimum 1‑year; double‑trigger on CIC |
Equity Ownership & Alignment
| Beneficial Ownership (as of 3/27/2025) | Shares | % of Outstanding | Notes |
|---|---|---|---|
| Eric J. Heagy, CPA | 13,716 | <1% (based on 1,660,265 shares) | Includes 10,000 shares via Deferred Compensation Plan; 1,900 spouse IRA; 50 child; 1,716 ESOP; no shares pledged . |
Additional alignment/constraints:
- Hedging/Pledging: Company policies restrict hedging and pledging; equity awards are explicitly subject to these policies .
- ESOP vesting: ESOP vests 20% after 1 year from PFS Bancorp formation, 40% after 2, 60% after 3, 80% after 4, and 100% after 5 years; unallocated ESOP shares were 122,820 as of 9/30/2025 (fair value ~$1.4 million) .
- Deferred Compensation Plan: Executives may defer salary/bonuses; the plan invests via a rabbi trust (company stock and cash earning Moody’s Aaa bond rate); distributions paid in cash/stock per elections .
Employment Terms
| Term | Key Details |
|---|---|
| Employment Agreement | Three‑year term commencing Jan 1, 2024, with annual board review and evergreen one‑year extensions; if a change in control occurs, term resets to three years from CIC date . |
| Base Salary | $211,000, reviewed at least annually; may be increased, not decreased (except broad reductions) . |
| Non‑CIC Severance | If involuntary termination without cause or good reason resignation (outside CIC): lump sum equal to (i) base salary and bonus (highest of last three years) for remaining term; (ii) present value of missed defined contribution plan contributions for remaining term; (iii) continued medical/dental/life benefits at no cost for the remaining term . |
| CIC Severance | If such termination occurs within 18 months following CIC: lump sum equal to 3x (highest base salary + highest bonus of prior three years), plus present value of 36 months of DC contributions and 36 months of continued benefits; subject to 280G cutback (no gross‑up disclosed) . |
| Restrictive Covenants | Non‑solicitation (1 year) and non‑compete (6 months) post‑termination (outside CIC) . |
| Disability/Death | Disability: Company tops up to base salary for the longer of 1 year post‑termination or remaining term; continued medical/dental until return to work/new employment/term expiry/death . Death: base salary paid for 1 year to beneficiaries and family medical/dental for 12 months . |
| Salary Continuation (SERP‑like) | $25,000 annual benefit payable monthly for 120 months upon separation at/after age 62; pre‑62 separation: accrued GAAP benefit (lump sum); CIC termination before 62: present value of normal retirement benefit (lump sum); death benefits payable to beneficiary per agreement . |
| Clawback/Conduct | Equity awards subject to clawback, trading restrictions, hedging/pledging limitations, and forfeiture/recoupment provisions for specified events . |
Compensation Structure Analysis
- Cash‑heavy mix with variable annual bonus: Bonus swung from $20,000 (2022) to $100,000 (2023, deferred) to $25,000 (2024), indicating discretionary or non‑disclosed metric‑based variability; no equity grants under the 2025 plan as of the proxy date, implying limited multi‑year equity linkage so far .
- Benefits and deferred value: All Other Compensation grew in 2024 due to higher 401(k) match and ESOP allocation, enhancing retirement alignment but adding fixed benefit cost .
- CIC economics: Double‑trigger 3x salary+bonus with 36 months of benefits/DC contributions is on the high end for a community bank and introduces potential parachute cost (mitigated by 280G cutback) .
- Governance safeguards on future equity: The 2025 Equity Plan embeds minimum vesting, no option repricing/buyouts, dividend deferral until vesting, and clawback policies—constructive for pay‑for‑performance integrity if/when grants commence .
Board Governance
- Structure and independence: Six‑member board; Heagy and Tieman are non‑independent; Rooney is non‑executive Chair; all committees (Audit, Compensation, Nominating/Governance) are fully independent .
- Committee assignments (2024–2025): Heagy does not serve on standing committees; Rooney chairs Audit and Compensation; Kurkowski (CPA) serves on Audit and Compensation; Brady chairs Nominating/Governance; committees met 4/1/1 times in FY2024 .
Committee roster (FY2024)
| Committee | Members |
|---|---|
| Audit | Rooney (Chair), Kurkowski |
| Compensation | Rooney (Chair), Kurkowski |
| Nominating & Corporate Governance | Brady (Chair), Brandt |
Related Party and Other Signals
- Related‑party credit/deposits: Loans to related parties (directors/executives/significant holders and affiliates) totaled $854k at 9/30/2025 ($924k at 12/31/2024); management states terms are substantially the same as for comparable transactions and not higher risk .
- Share repurchases (float/ownership dynamics): Company repurchased 47,700 shares in Q3’25 at an average $11.62; 109,975 YTD through 9/30/2025; authorization announced Dec 2024 for up to 172,500 shares (10% of shares then outstanding) potentially supports share price and impacts insider liquidity windows .
Investment Implications
- Alignment: Heagy’s beneficial ownership is modest (<1%), but includes 10,000 shares in the Deferred Compensation Plan and ESOP participation; no pledging disclosed, and company policies restrict hedging/pledging—supportive for alignment and reduced forced‑sale risk .
- Pay design and future equity: Current compensation is cash‑tilted with non‑disclosed bonus metrics; approval and usage of the 2025 Equity Plan will be pivotal—watch for initial grants, performance goal rigor, and vesting terms as catalysts for improved pay‑for‑performance linkage and retention .
- Retention and change‑of‑control: Employment agreement provides strong double‑trigger CIC protection (3x salary+bonus plus benefits/DC contributions) and a SERP‑like salary continuation benefit, lowering near‑term flight risk but elevating potential parachute costs in strategic scenarios .
- Governance: Dual executive roles (CEO+CFO) plus directorship raise concentration-of-power concerns, partly mitigated by an independent Chair and independent committees; ongoing board practices (separate Chair, independent committees, clawback policy) are positives for control and oversight .
Monitor: (1) any initial grants under the 2025 Equity Plan (award type, size, performance goals), (2) bonus framework disclosure evolution, (3) Form 4 activity post‑grant, (4) say‑on‑pay results in future proxies, and (5) changes to ownership (deferred comp share distributions) that could influence insider selling pressure .