| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
|
(f) Determination and Payment of
Annual Incentive Plan Awards for Fiscal Year 2023
On June 3, 2024, the Board of Directors of Citizens Financial Services, Inc. (the “Company”)
completed its determination of the annual bonus amounts for the Company’s named executive officers under the Company’s Annual Incentive Plan for the fiscal year ending December 31, 2023. This information was not included in the Summary Compensation
Table (the “Summary Compensation Table”) in the Company’s Definitive Proxy Statement for its 2024 Annual Meeting of Shareholders, filed with the U.S. Securities and Exchange Commission on March 7, 2024 (the “Proxy Statement”), because the amounts had
not been determined at the time of filing of the Proxy Statement. In accordance with Item 5.02(f) of Form 8-K, this Form 8-K is being filed to update certain compensation disclosures previously included in the Proxy Statement to reflect the bonuses
awarded to the named executive officers under the Company’s Annual Incentive Plan for fiscal year 2023.
Randall E. Black, who serves as Chief Executive Officer (“CEO”) and President of the Company and of
First Citizens Community Bank (the “Bank”), and Mickey L. Jones, who serves as Senior Executive Vice President, Chief Operating Officer and Treasurer of the Company and of the Bank, earned bonuses in the amounts of $519,918 and $230,541,
respectively, which were paid to each such named executive officer in cash.
David Z. Richards, Jr., who serves as Senior Executive Vice President and Director of Emerging
Markets of the Company and of the Bank, earned a bonus in the amount of $80,236, of which 70% was paid in cash and 30% was paid in the form of an award of restricted shares of the Company’s common stock granted under the Company’s 2016 Equity
Incentive Plan (the “Restricted Share Award”). The Restricted Share Award was granted to Mr. Richards on June 3, 2024, and is comprised of 557 restricted shares of the Company’s common stock. The grant date fair value of the Restricted Share Award
is $24,035, computed in accordance with Financial Accounting Board Accounting Standards Codification Topic 718 – Share Based Payment based on the per share price of the Company’s common stock on the date of grant ($43.15 per share). The Restricted
Share Award will vest in three approximately equal annual installments commencing on June 3, 2025.
The foregoing bonus amounts, to the extent paid in cash, should be reflected in the Non-Equity
Incentive Plan Compensation column of the Summary Compensation Table for fiscal year 2023. Mr. Richard’s Restricted Share Award should be reflected in the Stock Awards column of the Summary Compensation Table for fiscal year 2023. In addition, the
amounts in the Total column of the Summary Compensation Table for fiscal year 2023 for Messrs. Black, Jones and Richards have increased to $1,259,325, $752,718 and $463,747, respectively.
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we
are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Black, our CEO and President. Such information was not available in full at the time of filing
of the Proxy Statement because at such time, Mr. Black’s Annual Incentive Plan award for fiscal year 2023 had not yet been determined. As permitted by Instruction 6 to Item 402(u) of Regulation S-K, we thus omitted the CEO pay ratio disclosure
required by Item 402(u) of Regulation S-K from the Proxy Statement, and have included the required CEO pay ratio disclosure in this Form 8-K.
The Compensation/Human Resources Committee monitors the relationship between the compensation of our executive officers and of our
non-managerial employees. This is the seventh year we are disclosing the ratio of the pay of our CEO/President to our median employee (pay ratio). To determine the median employee, we considered all employees, including full-time, part-time and
seasonal employees employed as of the last day of our fiscal year, December 31, 2023. We also considered all wages earned for the fiscal year, including:
|
•
|
Regular pay for salaried and hourly employees.
|
|
•
|
Miscellaneous taxable cash benefits such as cash incentives, cell phone allowance, and referral fee income.
|
For purposes of determining the pay ratio, the total compensation of our CEO/President includes all compensation reported in the Summary
Compensation Table. The total compensation of the median employee was determined in the same manner as was used for the CEO/President in the Summary Compensation Table.
Median Annual Compensation of All Employees: $41,841
Total Annual Compensation of CEO/President: $1,260,061
Pay Ratio: 30.1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.