John L. Villano
About John L. Villano
- Chairman of the Board, Chief Executive Officer and President of Sachem Capital Corp.; founder; certified public accountant with ~30 years’ prior experience in public accounting and auditing .
- Age 64 (as of record date) . Education: B.S. in Accounting, University of Rhode Island (1982) .
- Tenure highlights: Appointed director/Chairman/Co-CEO/CFO/Secretary in Feb 2017; became sole CEO and Treasurer in Nov 2019; served as CFO until Aug 2022 and Treasurer until July 2022; served as Interim CFO from May 2023 to June 2024; designated principal executive officer .
- Performance context: Management reports 2024 “top-line revenue” declined 11.2% vs. 2023 amid capital constraints and loan losses . 2024 net income was a loss of $39.6 million (Pay vs Performance table) . Total shareholder return (TSR) decreased ~32.2% from 2022 to 2024; $100 placed at 12/31/2021 measured at $44.35 by 12/31/2024 (with dividends reinvested) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Sachem Capital Corp. | Co-CEO, CFO, Secretary | Feb 2017–Nov 2019 | Helped take company public operations forward; oversaw finance and reporting . |
| Sachem Capital Corp. | Sole CEO; Treasurer | Nov 2019–July 2022 (Treasurer) | Led expansion; oversaw origination/servicing, finance, capital markets . |
| Sachem Capital Corp. | CFO (also Interim CFO) | Until Aug 2022; Interim CFO May 2023–June 2024 | Bridged finance leadership; maintained PEO role through transition . |
| Public accounting practice | CPA | ~30 years prior to Sachem | Deep technical finance/accounting expertise leveraged in risk, controls and reporting . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Not disclosed in company filings | — | — | No outside public company directorships disclosed for Mr. Villano . |
Fixed Compensation
| Item | 2023 | 2024 | Notes |
|---|---|---|---|
| Base salary ($) | 750,000 | 750,000 | Base raised to $750k in Apr 2022 (effective Jan 1, 2022) . |
| Target cash bonus ($) | — | 375,000 | Target for 2024 set at $375k . |
| Actual cash bonus ($) | 337,500 | 300,000 | 2024 bonus approved Mar 10, 2025, paid lump-sum . |
| Perquisites/Other ($) | 114,392 | 426,332 | Includes $26k auto allowance; 2024 also includes $394,796 one-time tax payment covering estimated personal tax on vested restricted stock and $5,536 insurance reimbursements . |
| Total compensation ($) | 1,708,436 | 1,983,044 | As reported in SCT . |
Performance Compensation
- Annual bonus design: Determined by Compensation Committee based on company financial performance goals and capital transactions (discretionary determination; specific weights/thresholds not disclosed) .
- Equity (time-based restricted stock; no options granted in 2024): Awards vest one-third annually; acceleration upon termination without “Cause” or resignation for “Good Reason” .
| Incentive type | Grant date | Shares granted | Grant-date fair value ($) | Vesting terms |
|---|---|---|---|---|
| Restricted stock | Feb 17, 2023 | 130,890 | 506,544 | 1/3 vests on Jan 1 of 2024, 2025, 2026; full vest on termination without Cause/for Good Reason . |
| Restricted stock | Mar 19, 2024 | 111,857 | 506,712 | 1/3 vests on Jan 1 of 2025, 2026, 2027; full vest on termination without Cause/for Good Reason . |
Outstanding equity at FY-end 2024:
| Grant date | Unvested shares (#) | Market value at 12/31/2024 ($) |
|---|---|---|
| Apr 5, 2022 | 32,808 | 44,291 . |
| Feb 17, 2023 | 87,260 | 117,801 . |
| Mar 19, 2024 | 111,857 | 151,007 . |
Clawback: Company has adopted a compliant clawback policy for incentive compensation tied to financial reporting measures (3-year lookback for restatements) .
Equity Ownership & Alignment
- Beneficial ownership: 1,803,156 common shares (3.81% of outstanding as of Apr 30, 2025) . Includes 118,201 restricted unvested shares (80,916 vest Jan 1, 2026; 37,285 vest Jan 1, 2027) and 6,827 shares owned by spouse (disclaimed) .
- Anti-pledging/hedging: Policy prohibits pledging and holding Company securities in margin accounts; prohibits trading in options/warrants/puts/calls on Company securities; pre-clearance required for insiders .
- Director pay: Executives do not receive director compensation; Mr. Villano received no additional fees for Board service .
| Ownership detail | Amount |
|---|---|
| Total beneficially owned shares (#) | 1,803,156 . |
| Percent of class | 3.81% (based on 47,310,139 shares) . |
| Unvested restricted shares (#) | 118,201; 80,916 vest 1/1/2026; 37,285 vest 1/1/2027 . |
| Shares pledged | None permitted under anti-pledging policy . |
Employment Terms
| Provision | Key terms |
|---|---|
| Role and term | Chairman/CEO/President; initial 5-year term commencing Feb 2017; auto-renews annually unless either party gives 180 days’ notice prior to anniversary . |
| Base/bonus eligibility | Base $750k (effective Jan 1, 2022); incentive compensation in amount determined by Compensation Committee based on financial goals and capital transactions . |
| Benefits and perqs | Participation in benefit plans; additional cash equal to cost of declined benefits; auto allowance of $26k/yr; indemnification to fullest extent under law . |
| Non-compete | Two-year non-compete applies only if terminated for “Cause” . |
| Severance (without Cause, death/disability, or resignation for “Good Reason,” which includes change in control) | (i) Salary through termination; (ii) pro-rated incentive for year; (iii) lump sum equal to 4×(base salary + highest incentive paid in prior 3 years); (iv) deferred comp and accrued vacation; (v) up to 12 months of health, welfare and LTD benefits; (vi) other plan benefits; (vii) full accelerated vesting of stock options (RSU acceleration addressed in award terms) . |
| Excise tax gross-up | Company will pay additional amounts to make him whole if payments trigger Code §280G excise tax . |
| Clawback | Executive incentives subject to company clawback policy . |
Change-in-control (CIC) plan terms under 2025 Omnibus Incentive Plan:
- If awards are continued/assumed and executive is terminated without cause within 24 months post-CIC, unvested awards vest (and become exercisable, if applicable) .
- If awards are not assumed in a CIC, awards vest and may be cashed out at FMV less exercise/base price; underwater options/SARs can be cancelled for no consideration .
Board Governance (dual-role implications)
- Board composition: Five directors; majority independent (Bernhard, Goldberg, Prinz); committees (Audit, Compensation, Nominating & Governance) comprised entirely of independent directors; chairs are independent .
- Combined Chair/CEO: Board determined combined role is in shareholders’ best interests given Mr. Villano’s knowledge of business and strategy; Board reviews leadership structure periodically .
- Attendance: All directors attended at least 75% of Board/committee meetings in 2024; company policy encourages AGM attendance .
- Director compensation plan (for non-employee directors): $90k cash retainer; chair retainers ($7.5k Audit, $5k Comp, $2.5k N&G); optional $20k cash or fully vested shares at re-election; $10k for Loan Approval Committee service. Executives do not receive Board compensation .
Related Party Transactions and Risk Indicators
- Related party: CEO’s daughter received $191,520 in 2024 for internal audit and compliance services .
- Insider trading controls: Pre-approval required; anti-pledging; no short or derivative trading in Company securities .
- 2024 performance stress: Management cites net loss and dividend reduction; shares declined from $3.73 to $1.35 in 2024; company recorded realized loss on loan sales, valuation allowance on held-for-sale, CECL provisions, and REO impairments .
- Capital/dilution: 2025 Omnibus Incentive Plan proposes up to 2,936,762 shares available; best-practice provisions (no repricing without shareholder approval; no evergreen; director comp cap); plan intended to cover 3–5 years of equity awards .
Multi‑Year Compensation (NEO Summary)
| Year | Salary ($) | Bonus ($) | Stock awards ($) | All other ($) | Total ($) |
|---|---|---|---|---|---|
| 2023 | 750,000 | 337,500 | 506,544 | 114,392 | 1,708,436 . |
| 2024 | 750,000 | 300,000 | 506,712 | 426,332 | 1,983,044 . |
Ownership and Pay Versus Performance Indicators
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| PEO “Compensation Actually Paid” ($) | 1,202,148 | 1,887,537 | 1,189,510 . |
| TSR – value of $100 investment ($) | 65.41 | 81.16 | 44.35 . |
| Net income ($) | 20,908,651 | 15,899,153 | (39,570,938) . |
Compensation Structure Analysis
- Equity mix and risk: Shift toward time-vested restricted stock (no stock options in 2024), which lowers performance leverage versus options/PSUs .
- Guaranteed vs at-risk: Large fixed salary ($750k) plus significant recurring time-based equity reduces direct linkage to explicit operating metrics; bonus remains discretionary without disclosed weightings .
- Red flags:
- Severance multiple of 4× salary+highest bonus (plus pro‑rata bonus and benefits) is above market norms for smaller REITs .
- Excise tax gross‑up on golden parachute payments .
- 2024 one‑time tax payment ($394,796) covering Mr. Villano’s estimated personal tax on vested restricted stock .
- Mitigants: Clawback policy in place; no pledging allowed; independent committees oversee pay .
Employment & Retention Risk
- Contract security: Auto‑renewing agreement with robust severance and CIC protections supports retention but creates shareholder cost risk in downside scenarios .
- Succession risk: Mr. Villano is key; filings highlight dependency on his leadership and recent CFO turnover (Interim CFO appointment in Dec 2024) .
Equity Award Detail (Vesting Schedules)
| Grant | Vesting schedule |
|---|---|
| 2022 RS | 1/3 annually on Jan 1, 2023–2025 (remaining unvested as of 12/31/24 shown above) . |
| 2023 RS | 1/3 annually on Jan 1, 2024–2026; full vest on termination without Cause/for Good Reason . |
| 2024 RS | 1/3 annually on Jan 1, 2025–2027; full vest on termination without Cause/for Good Reason . |
Director Service History, Committees, and Independence
- Service: Director since Feb 2017; Chair since 2017; CEO since Nov 2019 .
- Committees: Not a member; all committees fully independent (Audit: Goldberg, Chair; Compensation: Bernhard, Chair; N&G: Prinz, Chair) .
- Independence: Mr. Villano is not independent; Board maintains majority independent composition, executive sessions, and committee structure to mitigate combined Chair/CEO risks .
Investment Implications
- Alignment: Large personal stake (3.81%) and anti‑pledging policy align interests; however, equity is time‑vested RS without performance hurdles, weakening pay-for-performance linkage .
- Shareholder‑unfriendly terms: 4× severance multiple, 280G excise tax gross‑up, and 2024 equity tax payment create potential overhang in downside/CIC scenarios; monitor any amendments reducing these features .
- Dilution watch: Proposed 2025 omnibus plan (2.94M shares) adds capacity for awards; coupled with stock price pressure, equity usage could be more dilutive—track burn rate and grant practices .
- Performance trajectory: Material 2024 net loss, dividend cuts, and asset quality issues (loan sales at discounts, CECL build, REO influx) heighten execution risk; compensation committee discretion on bonuses amid negative TSR may face investor scrutiny .
- Governance: Combined Chair/CEO structure persists, but independent committee framework and clawback mitigate some risks; say‑on‑pay outcomes should be monitored given red flags and 2024 underperformance .