Steven Sugarman
PATRIOT NATIONAL BANCORPAbout Steven Sugarman
Steven A. Sugarman (age 50) was appointed President and director of Patriot National Bancorp, Inc. (PNBK) on December 30, 2024, and became President, CEO and director of Patriot Bank, N.A. on April 30, 2025. He holds a B.A. from Dartmouth College and a J.D. from Yale Law School . PNBK raised ~$57.75 million in a March 20, 2025 private placement amid a recapitalization; 2024 results (pre‑appointment) included a net loss of $39.9 million and a severe TSR decline as shown in Pay‑vs‑Performance (value of $100 investment fell to $15.20) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Change Company CDFI LLC | Founder; CEO; Director of Manager (TCC Manager LLC) | 2017–present | Founded holding company for Change Lending (U.S. Treasury‑certified CDFI); ongoing leadership |
| Michelman & Robinson, LLP | Of Counsel | 2017–present | Legal counsel role concurrent with operating roles |
| Banc of California, Inc. (NYSE: BANC) and Banc of California, N.A. | Founder; Director; Board Chair; CEO; President | 2010–Jan 2017 | Led multiple top roles at parent and bank subsidiary |
| COR Securities Holdings Inc. / COR Clearing LLC | Director & CEO (holding company); COR Clearing CEO; sold to Axos Clearing | 2011–2019 (sale Jan 2019) | Led clearing firm through successful sale to Axos Clearing |
| COR Capital LLC; COR Advisors, LLC | Founder/Managing Member | n/a | Investment leadership roles |
| GPS Partners LLC | Founding Partner | n/a | Co‑founded $2B investment advisory firm |
| McKinsey & Company | Management Consultant | early career | Strategy consulting foundation |
| Lehman Brothers | Investment professional | early career | Financial markets experience |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Dickens Management Group (Manager of LA Golf Partners LLC) | Director | 2021–present | Board role in sports equipment venture |
| The Change Company CDFI LLC | CEO & Director of Manager | 2017–present | Concurrent with PNBK service |
| Michelman & Robinson, LLP | Of Counsel | 2017–present | Legal advisory role |
Fixed Compensation
| Element | Terms | Effective/Timing | Notes |
|---|---|---|---|
| Base Salary | $120,000 annually until successful capital raise | 12/30/2024 offer letter | Board considers discretionary bonus and long‑term agreement after raise |
| Base Salary (post‑raise) | Not less than $200,000; subject to annual review | Employment Agreement effective at private placement close (3/20/2025) | Employment period through 4/1/2029, auto‑renewing 3‑years each year starting 4/1/2026 |
| Target Bonus | At least 50% of base salary (prorated for partial year) | Each fiscal year during Employment Period | Metrics set by Compensation Committee; ≤50% of actual bonus can be paid in equity |
Performance Compensation
| Incentive | Metric/Plan | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual Bonus | Performance objectives set by Compensation Committee (in consultation with Executive) | Not disclosed | ≥50% of base salary | Discretionary; cash and/or equity; ≤50% paid in equity | N/A |
| Equity plan framework | 2025 Omnibus Equity Incentive Plan (Options, RSUs, PSUs, SARs; share limit = 20% of outstanding; ≥10,000,000 floor) | N/A | Plan capacity based on outstanding shares | Awards at Committee discretion | Change-in-control double‑trigger acceleration if replacements provided; single‑trigger if not |
Note: The 2017 Executive Compensation Incentive Plan applied historically to executives but had no awards in 2023–2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Record Date 5/16/2025) | 7,019,978 common shares via Steven & Ainslie Sugarman Living Trust; 9.2% of outstanding |
| Additional preferred/convertible | 19,167 shares of Series A Preferred (1,533,333 common equivalent) + 5,833 shares of Series A Preferred (466,667 common equivalent) for legal fee reimbursement; subject to 9.99% voting ownership cap |
| RSU grant (Employment Agreement) | RSUs vest in 12 equal monthly installments starting 3/20/2025; settle 3/20/2026; up to 4,049,593 shares if plan approved; if not approved, cash at FMV as of 3/20/2026; subject to 9.99% voting ownership cap |
| Structure from Employment Agreement | Initial RSUs equal to 5% of outstanding stock (including convertibles) at Effective Date; plus quarterly RSUs to “top up” to 5% of outstanding on a rolling basis (net of previously issued awards) |
| Omnibus plan capacity | Awards up to 20% of then‑outstanding shares (≥10,000,000 floor) |
| Hedging/pledging policy | Board has not adopted a hedging policy; no explicit pledging prohibition disclosed |
Vesting schedule (Sugarman RSUs)
| Grant mechanics | Start | Installments | Settlement | Conditionality |
|---|---|---|---|---|
| Employment Agreement RSUs | 3/20/2025 | 12 equal monthly tranches | 3/20/2026 (shares if plan approved; otherwise cash) | 9.99% beneficial ownership cap; equity settlement capped at 4,049,593 shares in aggregate |
Insider selling pressure view:
- Monthly vesting through 3/20/2026 could create steady supply; final settlement date is a potential liquidity event. The 9.99% cap and possibility of cash settlement (if plan not approved) may modulate share issuance and near‑term selling overhang .
Employment Terms
- Term and renewal: Employment runs through April 1, 2029; auto‑extends to maintain a 3‑year term on each April 1 starting 2026 unless notice given 60 days prior .
- Good Reason/Cause: Detailed Cause definition with due process and “Disinterested Directors” protections; Good Reason includes material diminution of role, breaches, relocation, or specified failures; cure/right to be heard processes included .
- Severance/change‑in‑control: While PNBK/Bank are in “Troubled Condition” (12 C.F.R. Part 359), severance, bonuses, equity grants, indemnification payments, or other compensation requiring prior regulatory approval are deferred—not waived—and to be reinstated when permitted or upon approvals; agreement to update with customary severance/indemnification once out of Troubled Condition .
- Equity treatment on change‑in‑control (Omnibus Plan):
- If no equivalent replacement awards: options/SARs and full‑value awards vest fully; performance awards vest at ≥target or actual to date .
- If equivalent replacement awards: no acceleration at closing; but double‑trigger full vest upon qualifying termination within 24 months (death, disability, retirement, without cause, or for good reason); extended exercise windows for options/SARs per plan .
- Confidentiality and unusual executive protections: Company commits to notify of attempts to access personal info, avoid surveillance, inform of regulatory contacts; recognizes executive privacy on attorney/financial/family emails; dispute legal fees to be paid by Company as incurred, with recoupment tied to prevailing standards .
- Non‑compete/non‑solicit: Not disclosed in available excerpts.
Board Governance
- Board/Bank roles: Appointed Company President and director on 12/30/2024; appointed President & CEO and director of Patriot Bank, N.A. on 4/30/2025 .
- Committee roles: Member, Executive Committee (alongside Chair Michael Carrazza, Edward N. Constantino, and Emile Van den Bol) .
- Independence/leadership: Lead Independent Director is Edward N. Constantino (since Oct 2018) . A majority of the Board and all Audit/Comp/Nom‑Gov members are independent under Nasdaq and SEC standards .
- 2024 meeting cadence/attendance: Board met 11 times; each incumbent director attended at least 75% of Board and committee meetings .
- Director fees: Non‑employee director cash retainers/meeting fees and annual equity grants are disclosed; Board fees suspended in Nov 2024 and remained suspended as of proxy date; executive directors (including Sugarman) receive no director fees .
Director compensation (2024)
| Name | Cash Fees | Stock Awards | Total |
|---|---|---|---|
| Edward N. Constantino | $71,050 | $14,346 | $85,396 |
| Emile Van den Bol | $69,500 | $14,346 | $83,846 |
| Michael J. Weinbaum | $49,000 | $14,346 | $63,346 |
| Grace Doherty | $39,500 | $14,346 | $53,846 |
| Steven A. Sugarman | — | — | — (executive; no director pay) |
Related Party Transactions
- March 20, 2025 private placement (~$57.75 million): Issued 60,400,106 common shares at $0.75 and 90,832 shares of Series A Preferred convertible into 7,266,560 common shares (pre‑funded conversion price $0.75); Nasdaq financial viability exception obtained; certain noteholders converted ~$7.0 million principal into 9,333,334 common shares .
- Sugarman trust investment: Steven & Ainslie Sugarman Living Trust acquired 7,019,978 common shares; also holds Series A Preferred convertible into an additional 2,000,000 common shares (subject to 9.99% cap); additional 5,833 preferred shares were issued for reimbursement of Mr. Sugarman’s legal fees and expenses related to the private placement .
- Governance handling: Independent directors assess related‑party transactions; involved directors recuse from discussions .
Performance & Track Record
- Capital raising/recapitalization mandate: Board appointed Sugarman to lead strategic restructuring, capital raise, compliance, and operational remediation; focus included addressing capital, operational, and regulatory deficiencies .
- Pre‑appointment company performance context: 2024 net loss of $39.9 million and TSR decline (value of $100 investment to $15.20), highlighting turnaround challenge entering 2025 .
- 2025 structural changes: Board expansion and new nominees aligned with private placement investor rights; Omnibus Equity Plan and charter amendments placed to shareholders to expand authorized shares and enable equity‑based alignment .
Compensation Structure Analysis
- Cash vs equity mix shifting sharply to equity: Large inducement RSU package (up to 4,049,593 shares subject to 9.99% cap) with monthly vesting through March 2026; additional “5% of outstanding” initial/quarterly equity construct in Employment Agreement creates ongoing top‑up potential tied to share count growth .
- Performance pay linkage: Annual bonus target set at ≥50% of base salary with metrics determined annually; no 2024–2023 awards under prior plan; specific 2025 metrics not disclosed, limiting pay‑for‑performance transparency .
- Change‑in‑control treatment: Plan provides for double‑trigger vesting with replacement awards and single‑trigger if no replacement—standard investor‑friendly construct .
- Clawback: Policy tied to accounting restatements (recoupment of “erroneously awarded” compensation); no broader misconduct clawback disclosed .
- Hedging/pledging: No adopted hedging policy; no explicit pledging prohibition disclosed (potential misalignment risk) .
Employment Terms
| Provision | Summary |
|---|---|
| Agreement effective | Upon closing of Private Placement (3/20/2025) |
| Term | Through 4/1/2029; auto‑renewal annually to maintain 3‑year term starting 4/1/2026 |
| Base Salary | ≥$200,000 post‑raise; initially $120,000 until capital raise completed |
| Target Bonus | ≥50% of base; metrics set by Compensation Committee; ≤50% payable in equity |
| Equity | Initial and ongoing awards per Employment Agreement; RSU grant mechanics and plan capacity per DEF 14A |
| Severance/COC | Deferred while “Troubled Condition”; to be reinstated/customary once permitted by regulation/approval |
| Good Reason/Cause | Detailed definitions and due process; cure and presentation rights; Disinterested Directors determine Cause |
| Confidentiality/Privacy | Company commits to privacy protections and notice of info requests; legal fees in disputes borne by Company as incurred (subject to prevailing) |
Say‑on‑Pay & Peer Group
- No say‑on‑pay results or compensation peer group disclosures were included in the 2025 proxy materials reviewed; the agenda focused on director elections, Omnibus Plan, charter amendments, Nasdaq proposal, and auditor ratification .
Investment Implications
- Alignment vs dilution: Sugarman’s sizable RSU package and trust investment align incentives, but the Omnibus Plan’s 20% share limit and the Employment Agreement’s 5% “top‑up” architecture introduce potential dilution and supply overhang—particularly into the March 20, 2026 RSU settlement window (subject to the 9.99% cap and equity plan approval) .
- Retention risk constrained by regulation: While severance/change‑in‑control economics are deferred under “Troubled Condition,” the long employment term with auto‑renewal and substantial equity provide retention levers; once regulatory status improves, reinstated severance could further stabilize retention .
- Governance/independence: Dual roles (President and director; Bank CEO and director; Executive Committee member) merit strong independent oversight; presence of a Lead Independent Director and fully independent key committees partially mitigates independence concerns .
- Trading signals: Monthly RSU vesting to March 2026 and final settlement could create episodic selling pressure; if the Omnibus Plan is approved and equity settlements occur, monitor Form 4 activity approaching settlement dates, mindful of the 9.99% cap on voting securities .
- Turnaround execution: The 2024 loss and depressed TSR underscore the challenge; the capital infusion, board refresh, and equity‑linked incentives aim to tie recovery to value creation, but dilution and regulatory constraints are key risks to underwrite .
Key sources: Appointment/offer letter and background ; Employment Agreement and equity/top‑up terms ; DEF 14A (biography, governance, ownership, RSUs, Omnibus Plan, director pay) ; 10‑K (plan/comp terms and ownership footnotes) ; Bonus mechanics and “Troubled Condition” provisions ; Good Reason/Cause and process ; Clawback and hedging policy status ; Pay‑vs‑Performance TSR and net income .