Peoples Financial Services adopts severance and change in control plan for executives

Peoples Financial Services Corp. (NASDAQ:PFIS), a $528 million market cap financial services company with a "GOOD" financial health rating according to InvestingPro, announced that its Board of Directors adopted a new Severance and Change in Control Plan for its Chief Executive Officer and leadership team, effective September 2, 2025. The plan was approved on August 29, according to a statement filed with the Securities and Exchange Commission. The company has demonstrated strong financial performance, with net income expected to grow this year.

The plan provides severance benefits to the CEO and certain executives of Peoples Financial Services and its affiliates in the event of a "Qualifying Termination." Qualifying events include elimination of the executive’s position without a suitable replacement, termination not for cause, resignation for good reason, or a termination following a change in control of the company.

Executives are divided into three tiers under the plan, corresponding to their roles.

Tier I covers the CEO of the company and its subsidiary bank. In the event of a qualifying termination not related to a change in control, the CEO is eligible for 18 months of base salary, a pro rata annual bonus, and reimbursement of COBRA health premiums for 18 months. If the termination occurs within 24 months following a change in control, the CEO is entitled to a lump sum equal to 36 months of base salary plus 2.99 times the target bonus, and 36 months of COBRA premium reimbursement.

Tier II includes executives such as the Chief Financial Officer, President, Chief Banking Officer, and others. These executives are eligible for 12 months of base salary, a pro rata annual bonus, and 12 months of COBRA reimbursement in the event of a qualifying termination. In a change in control scenario, they may receive a lump sum equal to 24 months of base salary, two times the target bonus, and 24 months of COBRA reimbursement.

Tier III covers positions including Chief Accounting Officer, Market Presidents, and others. These executives are eligible for 12 months of base salary, a pro rata annual bonus, and 12 months of COBRA reimbursement for both standard and change in control terminations, with the addition of a lump sum equal to one times the target bonus in change in control cases.

Receipt of benefits is contingent upon the execution of a separation agreement, including a release of claims and a 12-month non-solicitation covenant. The information is based on a press release statement and SEC filing. Trading at a P/E ratio of 15.7x and showing a strong return over the last month, InvestingPro analysis suggests the stock is currently undervalued. For deeper insights into the company’s valuation and 8 additional ProTips, consider exploring InvestingPro’s comprehensive analysis tools.

In other recent news, Profusa Inc. announced a $1 million investment in Bitcoin as part of its treasury management strategy. This move, executed in partnership with BlockFills, aims to hedge against macroeconomic uncertainties by leveraging the growing adoption of digital assets. Meanwhile, Peoples Financial Services Corp. declared a quarterly cash dividend of $0.6175 per share for the third quarter of 2025. The dividend is set to be paid on September 15, 2025, to shareholders who are on record as of August 29, 2025. These developments highlight key strategic decisions by both companies as they navigate current market conditions.

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