Jeffrey Lehocky
About Jeffrey Lehocky
Jeffrey Lehocky, age 58, has served as Executive Vice President and Chief Financial Officer (CFO) of QNB Corp since November 1, 2022, following senior roles at Mitsubishi UFJ Financial Group (Managing Director, Head of Business and Risk Management, Global Transaction Bank) and Deutsche Bank (Managing Director, Head of Operations, Corporate & Investment Bank) across New York and London . As CFO, he signs and certifies QNB’s financial reports under SOX 302 and 906, reflecting responsibility for disclosure controls and internal control over financial reporting . QNB reported net income of $11.448M in FY 2024, $9.483M in FY 2023, and $15.921M in FY 2022, with revenues of $6.913M, $4.837M, and $5.731M respectively, contextualizing pay-for-performance alignment over his tenure . The 2025 cash incentive plan ties payouts to EPS growth, ROAE, loan/deposit growth, and three-year TSR vs peers, with total bonus potential up to 32% of salary, indicating stronger linkage to shareholder returns and profitability metrics .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mitsubishi UFJ Financial Group (MUFG) | Managing Director, Head of Business & Risk Management, Global Transaction Bank | Feb 2020 – Sep 2021 | Led business and risk management for transaction banking |
| Deutsche Bank | Managing Director, Head of Operations, Corporate & Investment Bank (NY & London) | Nov 1994 – Dec 2019 | Led operations for CIB across major financial centers |
External Roles
- No external public company directorships or committee roles disclosed in the proxy for Lehocky .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 (Approved) |
|---|---|---|---|---|
| Base Salary ($) | $40,000 | $325,000 | $339,700 | $375,000 |
- Perquisites/hard-dollar benefits: Retirement Savings Plan contributions ($27,122 in 2024; $17,000 in 2023), Health Savings Account ($1,000 in 2024; $1,000 in 2023; $77 in 2022), spousal expense reimbursements ($1,519 in 2024; $84 in 2023; $70 in 2022) .
Performance Compensation
Annual Cash Incentive – Actual Payouts
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Non-Equity Incentive Paid ($) | $4,000 | $19,500 | $40,764 |
2024 Plan-Based Awards (Cash Incentive + Options)
| Item | Grant Date | Threshold ($) | Maximum ($) | Options (#) | Exercise Price ($/sh) | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|---|---|
| FY 2024 Incentive & Options | 2/15/2024 | $3,397 | $81,528 | 3,000 | $23.40 | $9,238 | Options vest annually over 5 years; 10-year term |
2023 Plan-Based Awards (Cash Incentive + Options)
| Item | Grant Date | Threshold ($) | Maximum ($) | Options (#) | Exercise Price ($/sh) | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|---|---|
| FY 2023 Incentive & Options | 2/15/2023 | $3,250 | $78,000 | 800 | $29.51 | $3,290 | Options vest annually over 5 years; 10-year term |
2025 Cash Incentive Plan Structure (Company-Wide)
| Metric | Goal Thresholds | Payout Potential at Threshold | Moderate | Excellent | Optimum |
|---|---|---|---|---|---|
| One-year EPS growth | 5%, 6%, 7%, 8% | 1.60% | 3.20% | 4.80% | 6.40% |
| One-year ROAE | 7%, 8%, 9%, 10% | 1.20% | 2.40% | 3.60% | 4.80% |
| One-year loan growth | 5.00%, 6.00%, 7.00%, 8.00% | 1.20% | 2.40% | 3.60% | 4.80% |
| One-year deposit growth | 1.50%, 2.50%, 3.50%, 4.50% | 0.80% | 1.60% | 2.40% | 3.20% |
| Three-year ROAE | 7.00%, 8.00%, 9.00%, 10.00% | 1.20% | 2.40% | 3.60% | 4.80% |
| Three-year ROAE vs peers | 95.00%, 98.34%, 101.67%, 105.00% | 1.20% | 2.40% | 3.60% | 4.80% |
| Three-year TSR vs peers | 95.00%, 98.34%, 101.67%, 105.00% | 0.80% | 1.60% | 2.40% | 3.20% |
| Total Bonus Payout Potential | — | 8.00% | 16.00% | 24.00% | 32.00% |
- 2025 adjustments: Compensation consultant study concluded top six executives were below market; Committee increased 2025 salaries and raised annual cash incentive plan maximum from 24% to 32%, targeting 50th percentile vs peers .
Outstanding and Recent Equity Awards (as of 12/31/2024)
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration | Notes |
|---|---|---|---|---|---|
| 2/15/2023 | 160 | 640 | $29.51 | 2/15/2033 | 5-year annual vest; 10-year term |
| 2/15/2024 | — | 3,000 | $23.40 | 2/15/2034 | 5-year annual vest; 10-year term |
- Options granted in 2023+ vest in equal annual installments over five years; options prior to 2023 had 3-year vesting; all options have 10-year terms (nonqualified options may be up to 10 years and 1 month under plan) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 4,918 shares; includes 920 options (exercisable within 60 days) |
| Ownership % of Class | Less than 1% |
| Pledging | Unless otherwise indicated, shares are not pledged; Lehocky’s entry shows no pledge |
| Vested vs Unvested Options | 160 vested (exercisable); 3,640 unvested/unexercisable (640 from 2023 grant; 3,000 from 2024 grant) |
| Option Intrinsic Value at CoC (12/31/2024) | $34,382 included in potential payouts upon CoC |
| Stock Ownership Guidelines | Not disclosed in proxy; awards subject to clawback policy and reduction/forfeiture events under 2025 Equity Plan |
Deferred Compensation (NQDC Plan)
| Year | Executive Contributions ($) | Registrant Contributions ($) | Aggregate Earnings ($) | Balance at FYE ($) |
|---|---|---|---|---|
| 2025 | — | $15,000 | $3,392 | $34,134 |
| 2023 (for FY 2023 reporting) | — | $15,000 | $742 | $15,742 |
- NQDC contributions are fully and immediately vested; plan serves as a retention/recruitment tool .
Employment Terms
| Provision | Terms |
|---|---|
| Change-of-Control Agreement | Double-trigger: benefits payable if involuntary termination without cause within 3 years of a change in control; CoC includes certain mergers, asset dispositions, shifts in board majority, or acquisition of ≥25% voting securities . |
| Severance Multiple | Two times average annualized compensation (salary + non-equity incentive) over lesser of years of service or 5 years prior to termination (Lehocky) . |
| Potential Payments (Assuming event at 12/31/2024) | After CoC: Severance $675,467; Option vesting value $34,382; Total $709,849 . |
| Pre-CoC Severance | No severance for involuntary termination without cause or for “good reason” indicated for Lehocky pre-CoC in table (all zero) . |
| Option Vesting on CoC | Options vest immediately; intrinsic value reflected in potential payments table . |
| Clawbacks / Forfeiture | Awards subject to any QNB clawback policy; reductions/forfeitures for breach of non-solicitation, non-compete, confidentiality, termination for cause, or “Harmful Activity” under the 2025 Equity Plan . |
| Non-Compete (Plan-level) | Equity plan includes restrictions and definitions related to competition and confidentiality; reduction/forfeiture events can include non-compete violations . |
| Tax Gross-Up | No excise tax gross-up; payments reduced to avoid 4999 excise tax if applicable . |
Performance & Track Record
- Certifications and CFO role: Lehocky signed SOX 302 and 906 certifications for QNB’s Q3 2025 Form 10-Q, attesting to fair presentation and effective controls .
- Strategic execution: In QNB’s merger announcement with Victory, Lehocky highlighted financial/strategic synergies, path to ~$2.5B assets, increased market cap and institutional visibility, and expected performance-driven stock appreciation, signaling focus on value creation .
Company financial performance (context for pay-for-performance):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | $5,731,000 | $4,837,000 | $6,913,000 |
| Net Income ($) | $15,921,000 | $9,483,000 | $11,448,000 |
Compensation Structure Analysis
- Cash vs equity mix: For 2024, Lehocky’s total comp was $437,735, with base salary $339,700, non-equity incentive $40,764, option awards fair value $9,238, NQDC earnings $18,392, and other compensation $29,641, indicating a predominantly cash-based package with modest option grants that vest over five years .
- Shift in incentive design: The Committee revised the annual cash incentive plan for 2025 to reduce long-term weighting and increase max payout from 24% to 32%, aligning to 50th percentile pay vs peers—potentially increasing near-term variable cash sensitivity to performance (EPS, ROAE, growth, TSR) .
- Equity award type: Awards to Lehocky in 2023–2024 were stock options; the new 2025 Equity Plan authorizes RSUs and restricted stock, but no RSU/PSU grants to Lehocky are disclosed in the proxy to date .
- Clawbacks & forfeiture: Expanded clawback and forfeiture triggers under the 2025 plan support governance discipline and can mitigate misalignment risk .
Say-on-Pay & Shareholder Feedback
- Compensation Committee targets 50th percentile vs peers for total executive compensation following 2024 external study; board and plan changes reflect shareholder-aligned adjustments (no repricing; min 1-year vesting; non-employee director limits) .
Equity Ownership & Insider Activity
- Beneficial ownership less than 1% with 4,918 shares including 920 options exercisable within 60 days; no pledging indicated in the table .
- No Form 4 trading activity for Lehocky was identified via document search; insider transactions not disclosed in available filings reviewed (proxy and recent 10-Q/8-Ks) [Search result: no match in 5.02 set].
Employment Terms (Detailed Potential Payments Table for Lehocky)
| Scenario (12/31/2024) | Severance ($) | Option Vesting ($) | Total ($) |
|---|---|---|---|
| After Change in Control – Involuntary Termination Without Cause | $675,467 | $34,382 | $709,849 |
Investment Implications
- Alignment: The 2025 incentive framework increases near-term performance linkage (EPS/ROAE/growth/TSR), and change-in-control is double-trigger, reducing windfall risk while ensuring retention through 2x pay protection—positive for investor alignment .
- Selling pressure: Option-only equity with five-year vesting spreads potential exercises over time; 2024 options at $23.40 and 2023 options at $29.51 suggest exercise decisions will be price-dependent, with limited near-term selling pressure if options remain out-of-the-money; intrinsic value at CoC was $34,382 at 12/31/2024 .
- Ownership skin-in-the-game: Direct ownership <1% and relatively small option overhang indicate limited personal exposure to stock downside; however, clawbacks and performance-tied cash incentives partially offset alignment concerns .
- Execution risk: CFO’s leadership in a growth-accretive merger and full SOX certifications are constructive signals; pay changes toward market median and stronger performance metrics suggest confidence in delivering earnings/ROAE improvements .