Company: NWFL
Filing Date: 2025-03-18
Form Type: DEF 14A
Source: 0001193125-25-056227
Chunk: 31

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-03-18
Form: DEF 14A
Chunk 31
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as of December 31, 2023. Cumulative TSR for the period December 31, 2021 through December 31, 2022 is33.08%. An investment of $100.00 as of December 31, 2021 would have a value of $133.08as of December 31, 2022. |

The Compensation Committee of the Board of Directors of the Company does not have a policy or practice of evaluating cumulative total shareholder return as part of its determination of compensation decisions for the named executive officers. The Compensation Committee reviews various compensation surveys and other market data to ensure the competitiveness of its executive compensation. The Compensation Committee annually establishes a cash incentive bonus pool typically based on a percentage of pre- taxearnings. Specific bonus amounts are awarded to each NEO following a review of pre-determinedCompany and individual performance targets as determined by the Compensation Committee. For 2024, the Board approved a bonus pool in December 2024 equal to $1,500,000, even though net income for the year was negative. Awards from the bonus pool were distributed to the NEOs within the discretion of the Compensation Committee. Typically, cash bonuses will have a relationship with the Company’s net income based upon the annual bonus pool funding percentage of pre-taxearnings, however, net income is not the sole measurement criteria in establishing the bonus pool, and in years in which Company net income is negative, the relationship between net income and the bonus pool will be within the discretion of the Board of Directors. As detailed in the Pay vs Performance Table, Net Income in 2024 decreased by approximately 101% or $15.4 million from the average Net Income from 2022 to 2024. The Average Compensation Actually Paid to the Non-PEONEOs decreased by approximately 22.7% from 2022 to 2024. The Average Compensation Paid for the position of PEO decreased by approximately 13.4% from 2022 to 2024. 21

DIRECTOR COMPENSATION Set forth below is a table providing information concerning the compensation of the Company’s directors who are not NEOs for the fiscal year ended December 31, 2024.

| Name                |     | Fees Earned or Paid in Cash |        |     | Stock      
 Awards (1) |        |     | Option    
 Awards(1) |   |     | All Other       
 Compensation(2) |       |     | Total |         |
|:--------------------|:----|:----------------------------