DEF 14A of Merchants Bancorp
Filed Apr 5, 2024 · FY20230001104659-24-044254
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The following table provides the compensation received by our Non-Executive Directors during the fiscal year ended December 31, 2023. The table excludes perquisites, which did not exceed $10,000 in the aggregate for any Non-Executive Director. Each of Messrs. Petrie, Rogers, Dunlap, and Evans were employed by us in 2023 and did not receive additional compensation for their service as a director.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Tamika D. Catchings | 50,000 | 50,093 | 100,093 | | Thomas W. Dinwiddie | 50,000 | 50,093 | 100,093 | | Sue Anne Gilroy | 50,000 | 50,093 | 100,093 | | Andrew A. Juster | 65,000 | 50,093 | 115,093 | | Patrick D. O’Brien | 60,000 | 50,093 | 110,093 | | Anne E. Sellers | 57,500 | 50,093 | 107,593 | | David N. Shane | 65,000 | 50,093 | 115,093 |
DIRECTOR COMPENSATION
| (1) For 2023, our directors were eligible to receive up to four (4) installments of a number of shares of our common stock equal $12,500, with each installment to be paid immediately following each of our regularly scheduled board meetings in February, May, August, and November, so long as they were serving on the Board as of the date of such meeting. The number of shares for each installment was based on the closing price of our common stock on the day immediately prior to the issuance of such shares, rounded up to the next whole share. The February installment was based on a closing price of $30.63 on February 15, 2023, the May installment was based on a closing price of $23.80 on May 17, 2023, the August installment was based on the closing price of $30.10 on August 16, 2023, and November installment was based on the closing price of $32.28 on November 14, 2023. |
PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS At the Annual Meeting, shareholders entitled to vote will elect eleven (11) directors to serve until our 2025 annual meeting of shareholders and until his or her successor has been duly elected and qualified, or until his or her earlier resignation, removal, or death. Set forth below is information concerning the nominees for election as directors. The Board recommends that shareholders vote “FOR” each of the nominees for election as director.
NOMINEES
NOMINEES
NOMINEES
| Name | Age | Occupation | Director Since | | Michael F. Petrie | 70 | Chairman and Chief Executive Officer of the Company and Chairman of Merchants Bank | 2006 | | Randall D. Rogers | 78 | Vice Chairman of the Company | 2006 | | Tamika D. Catchings | 44 | Former Vice President of Basketball Operations and General Manager of the Indiana Fever | 2022 | | Thomas W. Dinwiddie | 76 | Partner at the law firm of Dinsmore & Shohl LLP | 2022 | | Michael J. Dunlap | 58 | President and Chief Operating Officer of the Company and Chief Executive Officer of Merchants Bank | 2014 | | Scott A. Evans | 59 | Richmond Market President and Chief Operating Officer of Merchants Bank | 2006 | | Sue Anne Gilroy | 75 | Former Executive Director and Vice President of Development for the St. Vincent Foundation, Indianapolis, Indiana | 2017 | | Andrew A. Juster | 71 | Former Chief Financial Officer of Simon Property Group, Inc., one of the largest publicly traded real estate investment trusts in the United States | 2019 | | Patrick D. O’Brien | 66 | President of O’Brien Toyota, a Toyota dealership serving Indianapolis, Indiana | 2013 | | Anne E. Sellers | 63 | Technology consultant and former Managing Principal and majority owner of Sensory Technologies, LLC | 2017 | | David N. Shane | 76 | Former member of board of managers, President, and Chief Executive Officer of LDI Ltd., LLC | 2013 |
NOMINEES
There are no arrangements or understandings between any of our nominees or executive officers and any other person pursuant to which any of our nominees or executive officers have been selected for their respective positions. No nominee, current director, or executive officer is related to any other nominee, current director, or executive officer. No nominee for director has been a director of another “public company” (i.e., subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or of any investment company within the past five years. The business experience of each of the nominees for director, as well as their qualifications to serve on the Board, is as follows: Michael F. Petrie. Mr. Petrie has served as Chairman and Chief Executive Officer of the Company since October 2006 and has also served as Chairman of Merchants Bank since March 2002. From March 2002 through December 2019, Mr. Petrie served as Chief Executive Officer of Merchants Bank, and served as President of the Company’s subsidiary Merchants Capital Corp. (“Merchants Capital”) from when it was founded by Mr. Petrie and Mr. Rogers in August 1990 until January 2018. In addition to Mr. Petrie’s positions at the Company and its subsidiaries, Mr. Petrie serves as the trustee of the Michael F. Petrie & Jody J. Petrie Foundation and as President of the Indiana Affordable Housing Council and the Multifamily Lenders Council, Inc. Additionally, Mr. Petrie serves on the National Board for the Indiana University Varsity Club, the Board of Trustees for Marian University, and the Advisory Board for the Indiana University Center for Real Estate Studies. In 2005, Mr. Petrie served as Chairman of the Mortgage Bankers Association Board of Directors, Washington, D.C. Mr. Petrie is a graduate of Indiana University with both a Bachelor of Science and Master of Business Administration in finance. Mr. Petrie brings to the Board, among other skills and qualifications, extensive bank management experience derived from over 44 years in the mortgage banking industry. Mr. Petrie also brings to the Board a broad strategic vision for the Company, and the Board believes this is valuable in developing and implementing the Company’s strategic growth initiatives. Randall D. Rogers. Mr. Rogers has served as a director of the Company and the Vice Chairman of Merchants Bank since October 2006 and March 2002, respectively, and Vice Chairman of the Company since January 1, 2018. Prior to January 1, 2018, Mr. Rogers also served as President and Chief Operating Officer of the Company and Chairman of Merchants Capital since it was founded by Mr. Petrie and Mr. Rogers in August 1990. In addition to Mr. Rogers’ positions at the Company and its subsidiaries, Mr. Rogers is also directly involved with the Rogers Family Foundation, which is administered by the Central Indiana Community Foundation, which annually directs gifts to various 501(c)(3) organizations supporting causes such as children’s arts, the environment, animal welfare, poverty, healthcare, childhood education, and re-employment support. Mr. Rogers is a graduate of The University of North Carolina at Chapel Hill with a degree in economics and of the Stonier Graduate School of Banking at Rutgers University. Mr. Rogers’ over 50 years of mortgage banking experience, including deep experience in multi-family lending and his involvement as a co-founder of our Company, make him uniquely qualified to serve as a director and Vice Chairman of the Board. Tamika D. Catchings. Ms. Catchings has served as a director of the Company since May 2022. From 2001 to 2016, Ms. Catchings played for the Indiana Fever, Indianapolis’s WNBA team, and became one of the most decorated athletes of all time. Ms. Catchings is a 4-time Olympic gold medalist, 10-time WNBA All-Star, 5-time Defensive Player of the Year, and a WNBA Champion. Beyond her on-court success, Ms. Catchings is known for her off-court professionalism and was a 3-time recipient of the Kim Perrot Sportsmanship award. In 2004, Ms. Catchings launched the Catch the Stars Foundation, which empowers youth by providing goal setting programs that promote fitness, literacy, and youth development. From 2017 to 2022, Ms. Catchings served as the Vice President of Basketball Operations and General Manager of the Indiana Fever. Since her retirement from professional basketball, Ms. Catchings has been involved in the business community of Indianapolis as both a business owner and by serving on various boards, including the Board of Directors of the Indianapolis Airport Authority. Additionally, Ms. Catchings is a color analyst with the ESPN/SEC Network, where she provides expert analysis and background information, such as statistics and strategy. Ms. Catchings is a graduate of the University of Tennessee, where she earned a bachelor’s degree and a master’s degree in sports management. Ms. Catchings brings to the Board, among other skills and qualifications, business management experience, extensive leadership, including in the philanthropic sector, and years of work and service throughout the Indianapolis community. Thomas W. Dinwiddie. Mr. Dinwiddie has served as a director of the Company since May 2022. Mr. Dinwiddie is a partner at the law firm of Dinsmore & Shohl, LLP and his practice focuses on the areas of real estate, real estate finance, real estate development, and mortgage banking. Mr. Dinwiddie has been a director of Merchants Bank since 2002. Additionally, Mr. Dinwiddie has represented the Indiana Mortgage Bankers Association for more than 40 years and was the first recipient of their Distinguished Service Award. He is a graduate of DePauw University and received his juris doctor degree from Indiana University Robert H. McKinney School of Law. Mr. Dinwiddie brings to the Board, among other skills and qualifications, a wide range of real estate and mortgage banking knowledge and experience. Michael J. Dunlap. Mr. Dunlap has served as a director of the Company since May 2014. Mr. Dunlap became President and Chief Operating Officer of the Company in January 2018 and became Chief Executive Officer of Merchants Bank in January 2020. Prior to becoming Chief Executive Officer of Merchants Bank, Mr. Dunlap had been President and Co-Chief Operating Officer of Merchants Bank since May 2014. Mr. Dunlap has over 30 years of mortgage banking experience and joined Merchants Bank as Senior Vice President of Mortgage Banking in August 2009. Mr. Dunlap has been primarily responsible for establishing our warehouse lending platform and Merchants Mortgage, a division of Merchants Bank focused on single-family mortgage origination and servicing. Mr. Dunlap also serves on the Mortgage Bankers Association’s Residential Board of Governors and is a member of its Board of Directors. Prior to joining Merchants, Mr. Dunlap served as Chief Financial Officer of National City Mortgage, which was acquired by The PNC Financial Services Group, Inc. and prior to that held similar finance positions at Bank One, which was acquired by JPMorgan Chase & Co., and Waterfield Mortgage Co., which was acquired by Huntington Bancshares, Inc. Mr. Dunlap is a graduate of Indiana University with a degree in accounting and is a former licensed Certified Public Accountant. Mr. Dunlap’s extensive experience and knowledge of the Company and its products and services, particularly in mortgage banking, is tremendously valuable to the Board.
NOMINEES
Scott A. Evans. Mr. Evans has served as a director of the Company and President of the Lynn/Richmond market and Chief Operating Officer of Merchants Bank since 2004 and was Chairman of the Board of Directors of our Illinois bank subsidiary, Farmers-Merchants Bank of Illinois, from 2017 until its sale in 2024. Mr. Evans has over 34 years of community banking and related experience. Prior to joining Merchants, Mr. Evans was Assistant Vice President, Agriculture Lending at Bath State Bank, Bath, Indiana from 2002 to 2004. Also, Mr. Evans served as Vice President of The Farmers State Bank, New Madison, Ohio from 1989 to 2000 where he performed a variety of management functions, including with respect to compliance, human resources, information technology, information security, and accounting. In addition to Mr. Evans’ positions at the Company and its subsidiaries, Mr. Evans also is a member of the Ohio Farm Bureau and Ohio Corn and Wheat Growers Association and previously served as chairman of the finance committee of the St. Vincent Randolph Hospital Foundation. Mr. Evans is a graduate of The Ohio State University with a Bachelor of Science degree in agriculture, with an emphasis in agriculture economics and finance. Mr. Evans brings to the Board, among other skills and qualifications, extensive experience in community banking, and agricultural lending in particular. Sue Anne Gilroy. Ms. Gilroy has served as a director of the Company since June 2017. Ms. Gilroy served as Executive Director and Vice President of Development for the St. Vincent Foundation, Indianapolis, Indiana from 2005 until 2019. Ms. Gilroy has held a number of offices in public service and previously served as Indiana’s first female Secretary of State from 1994 to 2002, the first female director of Indianapolis and Marion County, Indiana’s consolidated city-county government, as Director of Indianapolis Parks and Recreation from 1974 to 1976, as Senator Richard G. Lugar’s Indiana State Director from 1990 to 1993, and on Indiana Governor Mitch Daniels’ Blue Ribbon Commission on Local Government Reform in 2007. In addition, Ms. Gilroy also serves on the boards of directors of the University of Indianapolis and University High School, Indianapolis, Indiana, and previously served as trustee of the Endowment Fund Board of Tabernacle Presbyterian Church. Ms. Gilroy is a graduate of DePauw University with a degree in speech and secondary education and holds a master’s degree in public administration from Indiana University, Indianapolis. Ms. Gilroy brings to the Board, among other skills and qualifications, the experiences of a career in public sector management, as well as extensive leadership in the non-profit world. Andrew A. Juster. Mr. Juster has served as a director of the Company since May 2019. From 1989 through 2018, Mr. Juster was employed by Simon Property Group, Inc., a global leader in the ownership of premier shopping, dining, entertainment and mixed-use destinations, an S&P 100 company, and one of largest publicly traded real estate investment trusts in the United States. From January 1, 2015 to October 1, 2018, Mr. Juster served as Executive Vice President and Chief Financial Officer of Simon Property Group, Inc., and previously served as its Executive Vice President and Treasurer from 2008 through 2014. Mr. Juster is a graduate of American University and received a Master of Business Administration from the Wharton Graduate School of the University of Pennsylvania. Mr. Juster brings extensive knowledge of the commercial real estate market and significant experience in finance, including overseeing financing strategies and capital market activities, and an understanding of the necessary accounting systems and controls of a publicly traded company. Patrick D. O’Brien. Mr. O’Brien has served as a director of the Company since November 2013. Since 1990, Mr. O’Brien has been President of O’Brien Toyota, a Toyota dealership serving the Indianapolis, Indiana area. Mr. O’Brien is also the owner and managing member of K&P Property Development, LLC, a real estate holding company, and co-owner and managing member of Pinheads, a family entertainment center in Fishers, Indiana. Mr. O’Brien has previously served as chairman of Toyota’s Regional Dealer Council, which serves a four-state area including Indiana, chairman of the Chicago Region Toyota Dealer Advertising Association, and President of the Auto Dealers Association of Indiana. Mr. O’Brien is a graduate of Indiana University with a bachelor’s degree in business management. Mr. O’Brien brings to the Board, among other skills, a wide range of knowledge and perspective relative to operating successful businesses and the business community in our Indianapolis market. Anne E. Sellers. Ms. Sellers has served as a director of the Company since June 2017. Ms. Sellers is an audio/visual technology consultant and, from 2006 through 2019, Ms. Sellers served as Managing Principal and majority owner of Sensory Technologies, LLC, an Indianapolis-based company that specializes in audiovisual integration technologies, including videoconferencing system design, web streaming and distribution, and sound and acoustic design. Ms. Sellers has also previously served in a variety of accounting and finance roles, including with Ernst & Young. In addition, Ms. Sellers is a member of the board of directors of the St. Richards Foundation, serves as Vice Chair of the board of trustees of Newfields, is a member of the executive committee of The Gathering, and is a past member of the board of directors of the National Systems Contractors Association, The Alliance Group, the National Association of Women Business Owners, Indianapolis Chapter, and WFYI Public Television Affiliate. Ms. Sellers is a graduate of DePauw University with a degree in economics. Ms. Sellers brings to the Board, among other skills and qualifications, extensive experience in management and leadership in the technology industry. David N. Shane. Mr. Shane has served as a director of the Company since November 2013. Mr. Shane previously served as Vice-President and Executive Vice-President (from 1997 to 2006) and President and Chief Executive Officer and member of the board of managers (from 2007 until his retirement in 2013) of LDI Ltd., LLC, an Indianapolis-based diversified holding company that focuses on funding and operating middle-market companies. From 1975 to 1995, Mr. Shane was an attorney and partner at the law firm of Baker & Daniels LLP, now part of Faegre Drinker Biddle & Reath LLP. In addition, Mr. Shane currently serves as a member of the boards of directors of Lilly Endowment, Inc., The Mind Trust, and Ascend Indiana, Inc., and the board of trustees of the Institute for Citizens & Scholars, and as an emeritus member of the board of trustees of Wabash College. He previously served as a director of Our Health, Inc. and Syndicate Sales, Inc. He is a graduate of Wabash College with a degree in English and received his juris doctor degree from Duke University School of Law. Mr. Shane brings to the Board, among other skills and qualifications, extensive business and legal skills that assist the Board in fulfilling its oversight role of management.
Regulatory Impact on Compensation
Regulatory Impact on Compensation As a publicly traded financial institution, we are subject to various regulations when considering and implementing compensation-related decisions. Although these regulations do not set specific parameters within which compensation decisions must be made, they do require that we be mindful of the risks associated with compensation programs designed to incentivize the achievement of better than average performance. In particular, the federal bank regulators, including the Federal Deposit Insurance Corporation (“FDIC”), have long held that excessive compensation is prohibited as an unsafe and unsound practice. In describing a framework to determine whether compensation is excessive, the FDIC has indicated that financial institutions should consider whether aggregate cash amounts paid, or noncash benefits provided, to employees are unreasonable or disproportionate to the services performed by an employee. The FDIC encourages financial institutions to review an employee’s compensation history and to consider internal pay equity, and, as appropriate, to consider benchmarking compensation to peer groups. Finally, the FDIC provides that, in order to give proper context, such an assessment must be made in light of the institution’s overall financial condition. Additionally, we must also take into account the joint agency Guidance on Sound Incentive Compensation Policies, which sets forth a framework for assessing and mitigating risk associated with incentive compensation plans, programs, and arrangements maintained by financial institutions. Other matters, such as accounting, tax, and SEC requirements regarding risk assessment are also considered by the Compensation Committee and Board as part of its compensation design and annual decisions. The SEC adopted final “clawback” rules in October 2022, as directed by the Dodd-Frank Act, which Nasdaq implemented in 2023. In November 2023, we revised our clawback policy and it, among other things, requires that we recover excess incentive-based compensation from executive officers if we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under securities laws. A copy of our clawback policy can be found on our website (investors.merchantsbancorp.com) under the corporate profile – governance documents section.
Compensation Philosophy and Objectives
| What We Do | | What We Do Not Do | | | ● | Consider peer group information in compensation decisions | ● | Provide for single-trigger payments upon change in control | | ● | Only provide for double-trigger severance payments upon a change in control | ● | Reprice equity awards | | ● | Vest equity awards ratably over multiple years | ● | Provide tax gross-ups | | ● | Tie equity awards to overall Company performance using measures that are important to shareholders (e.g., revenue, return on equity, and earnings per share) | ● | Guarantee cash awards – incentive compensation may be reduced to zero if threshold performance measures are not met |
Compensation Consultants
Compensation Consultants The Compensation Committee’s charter gives it the authority to hire consultants to further its objectives and responsibilities. Historically, the Compensation Committee’s practice has been to not hire any consultants. This is largely because in the Board’s experience it has been difficult for consultants and similar third parties to fully understand our business model, which is unlike most traditional banks, or find appropriate peer institutions or find other executive officers whose roles align with those of our executive officers. Instead, the Compensation Committee has generally relied upon market data provided by internal parties that the Compensation Committee deems reasonable and appropriate, including our internal human resources department, and survey data from industry resources. However, in January 2022, the Compensation Committee determined that it would be appropriate and helpful to the Compensation Committee to hire a consultant to review current compensation practices and levels and make recommendations for 2023. After issuing a request for proposal and considering bids for services from several compensation consultants, in June 2022 the Compensation Committee hired Aon as its independent compensation consultant. The Compensation Committee believed that Aon had the best grasp of our business and the mortgage banking business generally, had the best data available, and would be best equipped to review our current practices and make recommendations that would be useful both immediately and long-term. In its engagement of Aon, the Compensation Committee considered the independence of its compensation advisors under applicable SEC and Nasdaq listing rules and concluded there was no conflict of interest with respect to this engagement. Aon’s specific services to the Compensation Committee included support in the Compensation Committee’s effort to review our then existing peer group and develop a new peer group, if appropriate, review potential risks associated with our compensation programs, and analyze our executive officer compensation levels, including based on the new peer group, if one was determined to be appropriate. As part of its services, the Compensation Committee expected Aon to provide information that would be useful for the Compensation Committee in evaluating potential changes to executive compensation for 2023, including overall compensation amounts and compensation structures. During this review process the Compensation Committee determined that it was appropriate to develop a new peer group. In particular, the Compensation Committee noted that in recent years we have grown significantly more than most of the members of that 2022 peer group, including in asset size, net income, and the complexity of our business model. In developing an appropriate new peer group, the Compensation Committee believed it was important that our unique characteristics be considered. In particular, that we have a limited physical branch network but operate national businesses and that we primarily offer mortgage and real estate centric products, with a particular focus on multifamily mortgage banking. With Aon’s assistance, we primarily considered institutions:
Compensation Consultants
| ● | with annual revenues between $300 million and $860 million (as of June 30, 2022); |
Compensation Consultants
| ● | with multifamily loans being more than 7% of their total loan portfolio; and/or |
Compensation Consultants
| ● | which are otherwise close competitors in geography or business model. |
Compensation Consultants
In September 2022, the Compensation Committee selected the following group of 26 publicly traded companies as its new peer group:
Compensation Consultants
| Banc of California Inc. | First Busey Corp.* | Pacific Premier Bancorp | | Banner Corp. | First Financial Bancorp | Provident Financial Services | | Berkshire Hills Bancorp Inc. | First Foundation Inc.* | QCR Holdings Inc. | | Brookline Bancorp Inc. | First Merchants Corp.* | S&T Bancorp Inc. | | Customers Bancorp Inc.* | HomeStreet Inc.* | The Bancorp | | CVB Financial Corp. | Independent Bank Corp. | TriCo Bancshares | | Dime Community Bancshares Inc.* | Lakeland Financial Corp.* | Walker & Dunlop Inc. | | Eagle Bancorp Inc | NBT Bancorp Inc. | Washington Federal Inc. | | Eastern Bankshares Inc. | OceanFirst Financial Corp. | | | *denotes company that was also in our peer group in 2022. | | |
Compensation Consultants
After developing this new peer group, Aon provided the Compensation Committee with certain reports detailing how our executive compensation practices compared, including in total amounts of compensation, mix of cash and equity, and overall compensation structure. While we do not set compensation to a specific percentile of our peers, the Compensation Committee believed it was noteworthy that several of our NEOs were among the bottom tenth percentile in total compensation. In December 2022, the Compensation Committee reviewed and discussed these reports with Aon representatives and discussed our historical and future performance and strategic objectives with our management, including Messrs. Petrie, Dunlap, and Oznick. In January 2023, the Compensation Committee established our Chief Executive Officer’s 2023 compensation and made its recommendation to the Board regarding the other NEOs’ 2023 compensation. The Board approved such recommendations in January 2023.
Compensation Components
| Name | Salary | Target Cash Incentive (1) | Target Equity Incentive (2) | | Michael F. Petrie | $900,000 | $900,000 | $900,000 | | Michael J. Dunlap | $800,000 | $800,000 | $800,000 | | Michael R. Dury | $300,000 | - | $210,000 | | John F. Macke | $400,000 | $200,000 | $200,000 | | Martin A. Schroeter | $400,000 | $200,000 | $200,000 |
Compensation Components
| (1) This table does not include any commissions or discretionary bonuses a NEO may be eligible for which are discussed below in this CD&A. |
Compensation Components
| (2) Mr. Schroeter’s equity incentive was ultimately replaced with a discretionary cash award further described in this CD&A. |
Cash Bonus and Cash Incentive Awards
Cash Bonus and Cash Incentive Awards If a cash incentive award is established for a NEO, it is generally tied to our achievement of certain performance measures established by the Compensation Committee for that fiscal year and generally not tied to individual goals. Further, the performance measures established generally must be consistent with those permitted under our 2017 Equity Incentive Plan (“2017 Plan”) and the Compensation Committee is responsible for determining the level of achievement of those performance measures. For 2023, the Committee established total revenue, earnings per common share, and return on average total equity as the performance measures for the cash incentive award. If a cash incentive award is established for a NEO, in addition to establishing the relevant performance measures, the Compensation Committee establishes a target and weight for each performance measure and payout percentage for above target performance. Additionally, all cash incentives are conditioned upon Merchants Bank being well capitalized under applicable FDIC regulations at the end of each quarter of that calendar year. As provided above in this CD&A, for 2023 cash incentive awards, the Compensation Committee established:
Cash Bonus and Cash Incentive Awards
| ● | Performance Measures: total revenue, earnings per common share, and return on average total equity. |
Cash Bonus and Cash Incentive Awards
| ● | Weighting: equal weighting to each performance measure. |
Cash Bonus and Cash Incentive Awards
| ● | Payout Percentages: between 75% to 125% of target; provided, however, payouts could be reduced to zero percent if threshold performance measures were not met and/or Merchants Bank failed to be well capitalized for any quarter in 2023. |
Cash Bonus and Cash Incentive Awards
For 2023, Mr. Dury did not have an established target cash incentive award. The Compensation Committee and Board believed that his compensation was appropriately structured in other ways to ensure that he was properly motivated and aligned with shareholder interest. In particular, he was compensated with commissions on fees the Company received on certain loans he was responsible for closing and also with a volume bonus based on the overall business generated by Merchants Capital (as further described in Executive Compensation - Employment Agreements below). Messrs. Petrie, Dunlap, Macke, and Schroeter each had a target cash incentive award established in 2023. At each fiscal year-end, the Compensation Committee reviews our overall performance as compared to the established targets for the performance measures, reviews whether Merchants Bank maintained well capitalized status for each quarter, and determines whether the NEO is entitled to receive a payout of such cash incentive. For 2023, if the 75% of target threshold for a performance measure was not met, none of Messrs. Petrie, Dunlap, Macke, and Schroeter would receive a payout with respect to the portion of their cash incentive award associated with that performance measure. Also, Messrs. Petrie, Dunlap, Macke, and Schroeter would not receive a payout if Merchants Bank was not well capitalized at the end of any quarter in 2023. In January 2024, the Compensation Committee completed its review and determined we achieved the following results and that Merchants Bank maintained well capitalized status for each quarter of 2023 and approved the following payouts for cash incentive awards.
Cash Bonus and Cash Incentive Awards
| Performance Measure | Target | Actual Results | Percentage of Target | | Total Revenue | $508,397,000 | $522,508,000 | 103% | | Earnings Per Common Share | $5.17 | $5.64 | 109% | | Return on Average Total Equity | 16.56% | 17.63% | 106% | | Payout Percentage | | | 106% |
Cash Bonus and Cash Incentive Awards
In addition to the target cash incentive award described above, the Compensation Committee and the Board have authorized Mr. Petrie and Mr. Dunlap to make a discretionary cash bonus award to any NEOs (other than to themselves or, in the case of Mr. Dunlap, to Mr. Petrie) based on exceptional individual performance (e.g., performance of business unit well beyond budget). The amount of any such cash bonus may not exceed 10% of such executive’s target total compensation, or in the case of Mr. Dunlap and Mr. Dury may not exceed $200,000, without the Board’s prior approval. Mr. Petrie or Mr. Dunlap must provide the details of any such cash bonus to the Compensation Committee promptly after the award. For 2023, neither Mr. Petrie nor Mr. Dunlap awarded any discretionary cash bonuses to any NEO. However, as provided above, the Compensation Committee recommended, and Board approved of replacing Mr. Schroeter’s target equity incentive with a discretionary cash bonus award. Mr. Schroeter was awarded a discretionary cash bonus of $588,000 related to the performance of our mortgage warehouse business. In addition to the cash incentives and cash bonuses described above, each of our NEOs are eligible to receive certain nominal cash incentive awards to the same extent as all other employees, such as for completing certain training. For 2023, each NEO each received $100 in such nominal cash incentives.
Equity Awards
Equity Awards Under our 2017 Equity Incentive Plan (“2017 Plan”), we have the ability to award a variety of instruments, but to date have only issued restricted stock units, with each restricted stock unit subject to vesting requirements established by the Compensation Committee. We believe that other instruments, such as options, create unnecessary complexity and do not align with the best interest of our shareholders. Additionally, we do not pay dividends or any other form of compensation on restricted stock units prior to vesting. If an equity incentive award is established for a NEO, it is tied to our achievement of certain performance measures established by the Compensation Committee for that fiscal year. Further, the performance measures established must be consistent with those permitted under the 2017 Plan and the Compensation Committee is responsible for determining the level of achievement of those performance measures. Messrs. Petrie, Dunlap, Dury, Macke, and Schroeter were eligible to receive an equity incentive award under the 2017 Plan and had an established target award in 2023. However, as provided above, Mr. Schroeter’s equity incentive award was ultimately replaced with a discretionary cash bonus award. The Compensation Committee established total revenue, earnings per common share, and return on average total equity as the performance measures for all equity incentive awards in 2023. In the same manner as for our cash incentives, as provided above in this CD&A, for 2023 equity awards the Compensation Committee established:
Equity Awards
| ● | Performance Measures: total revenue, earnings per common share, and return on average total equity. |
Equity Awards
| ● | Weighting: equal weighting to each performance measure. |
Equity Awards
| ● | Payout Percentages: between 75% to 125% of target; provided, however, payouts could be reduced to zero percent if threshold performance measures were not met and/or Merchants Bank failed to be well capitalized for any quarter in 2023. |
Equity Awards
Also in the same manner as for our cash incentives, after our fiscal year-end the Compensation Committee reviews our overall performance as compared to the established performance measures, reviews whether Merchants Bank maintained well capitalized status for each quarter, and determines whether the NEO is entitled to receive a payout of such cash incentive. For 2023, if the 75% of target threshold for a performance measure was not met, no NEO would receive a payout with respect to the portion of their equity incentive award associated with that performance measure. Also, no NEO would receive a payout if Merchants Bank was not well capitalized at the end of any quarter in 2023. As provided above in this CD&A, at its January 2024 meeting, the Compensation Committee determined that for 2023 we achieved an average of 106% of the target performance measures, and Merchants Bank was well capitalized at the end of each quarter, and therefore each of Messers. Petrie, Dunlap, Dury, and Macke received a payout of 106% of their respective target equity incentive award in the form of restricted stock units, rounded up to the nearest whole share. Each award vests ratably over a three (3) year period, with the first portion vesting on the February 1st after the first anniversary date of the award (i.e., for 2023 equity incentive awards, the first portion will vest on February 1, 2025). The Compensation Committee believes the vesting period for equity incentive awards is a valuable retention tool for the services of our NEOs. Mr. Schroeter did not receive any equity incentive compensation in 2023. The Compensation Committee and Board determined his compensation was appropriately structured in other ways to ensure that he was properly motivated and aligned with shareholder interest. In particular, that his compensation should be primarily tied to the performance of our mortgage warehouse business.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| | | | | Equity | Non-Equity | | | | | | Salary | Bonus (1) | Incentive Awards (2) | Incentive Awards (3) | All Other Compensation (3) | Total | | Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | | Michael F. Petrie | 2023 | 900,000 | - | 954,001 | 954,100 | 31,437 | 2,839,538 | | Chairman of the Board and Chief Executive Officer | 2022 | 850,000 | 170,000 | 858,507 | 100 | 30,282 | 1,908,889 | | | 2021 | 800,000 | - | 728,014 | 100 | 20,950 | 1,549,064 | | Michael J. Dunlap | 2023 | 800,000 | - | 848,014 | 848,100 | 13,900 | 2,510,014 | | President and Chief Operating Officer of the Company and President and Chief Executive Officer of Merchants Bank | 2022 | 650,000 | 159,350 | 656,524 | 328,250 | 13,150 | 1,807,274 | | | 2021 | 620,000 | 48,400 | 604,802 | 201,600 | 12,700 | 1,487,502 | | Michael R. Dury | 2023 | 300,000 | 5,976,839 | 222,601 | 100 | 13,900 | 6,513,440 | | President and Chief Executive Officer of Merchants Capital | 2022 | 260,000 | 8,418,016 | 183,842 | 100 | 13,150 | 8,875,108 | | | 2021 | 250,000 | 7,898,645 | 196,007 | 100 | 12,700 | 8,357,352 | | John F. Macke | 2023 | 400,000 | - | 212,022 | 212,100 | 13,900 | 838,022 | | Executive Vice President and Chief Financial Officer | 2022 | 325,000 | 63,375 | 164,155 | 164,225 | 13,150 | 729,905 | | Martin A. Schroeter | 2023 | 400,000 | 588,000 | - | 212,100 | 13,900 | 1,214,000 | | President – Warehouse Lending | 2022 | 300,000 | 125,000 | 151,503 | 151,500 | 12,988 | 740,991 |
Summary Compensation Table
| (1) For Mr. Schroeter, such amount represents a discretionary cash bonus award, which is discussed in the CD&A. For Mr. Dury, such amount relates to commissions and a volume bonus earned under his “at will” employment agreement as discussed below. |
Summary Compensation Table
| (2) Equity awards are generally made in January of the following year based on our full year performance. For 2023, we awarded restricted stock units in January 2024 after the Compensation Committee reviewed our full year performance. The amounts reflect the aggregate grant date fair value of restricted stock awards for the years ended December 31, 2023, 2022, and 2021 in accordance with FASB ASC Topic 718. |
Summary Compensation Table
| (3) Amounts represent certain nominal incentive awards and cash incentive awards to the NEO as described in the CD&A. |
Summary Compensation Table
| (4) For Messrs. Dunlap, Dury, Macke, and Schroeter the amounts consisted of a contribution under our 401(k) Plan and an allocation under our ESOP. For Mr. Petrie, the amount consisted of a contribution under our 401(k) Plan, an allocation under our ESOP, and monthly country club dues and assessments. For 2023: |
Summary Compensation Table
| Name | ESOP Allocation ($) | 401(k) Contribution ($) | Country Club Dues and Assessments ($) | | Michael F. Petrie | 4,000 | 9,900 | 17,537 | | Michael J. Dunlap | 4,000 | 9,900 | - | | Michael R. Dury | 4,000 | 9,900 | - | | John F. Macke | 4,000 | 9,900 | - | | Martin A. Schroeter | 4,000 | 9,900 | - |
Employment Agreements
Employment Agreements We do not have employment agreements with any of our NEOs other than an “at will” employment agreement with Mr. Dury and change in control agreements described below. We believe that not having employee agreements provides us with more flexibility and adaptability when making annual compensation decisions. As of January 1, 2021, we entered into that First Amended and Restated Employment Agreement (“2021 Employment Agreement”) with Mr. Dury. Under the 2021 Employment Agreement, Mr. Dury receives commission compensation on origination fees received by us from a particular group of Merchants Capital’s customers. He does not receive commission related to any mortgage servicing rights or gain on sale. Mr. Dury also receives a volume bonus of 5% of Merchants Capital’s total fee income (the calculation of total fee income excludes any fees received related to customers for which Mr. Dury receives a commission). As part of its annual review, the Compensation Committee reviews the 2021 Employment Agreement and makes a recommendation to the Board as to whether it should remain in effect. For 2023, the Compensation Committee recommended that the 2021 Employment Agreement remain in effect and the Board approved of such recommendation. We believe the 2021 Employment Agreement, among other things, closely associates Mr. Dury’s compensation to the overall success of Merchants Capital. Under the 2021 Employment Agreement, Mr. Dury receives a base salary, which may be adjusted by Mr. Dunlap as Chief Executive Officer of Merchants Bank, earns the 5% volume bonus, and earns the following commissions:
Employment Agreements
| Fees on Loans to Designated Borrowers Originated by Mr. Dury | Commissions Earned by Mr. Dury | | Under an amount equal to 2x base salary | None | | Exceed 2x base salary but less than $750,000 | 20% of the portion of the fees that exceeds 2x base salary but does not exceed $750,000 | | Exceeds $750,000 but less than $1,000,000 | 25% of the portion of the fees that exceeds $750,000 but does not exceed $1,000,000 | | Exceeds $1,000,000 | 30% of the portion of the fees that exceeds $1,000,000 |
Employment Agreements
The loan fees on which Mr. Dury earns commissions are determined in our sole discretion and do not include fees paid prior to or after closing, or fees paid by any party other than the borrower. The 2021 Employment Agreement includes certain restrictive covenants, including a 12-month non-competition and non-solicitation period.
Change in Control Agreements
Change in Control Agreements In January 2020, the Compensation Committee recommended to the Board, and the Board concluded that it was in the best interest of the Company and its shareholders, to take reasonable steps to compensate key executives, including our NEOs other than Mr. Petrie, in the event of a change in control event. With these agreements in place, if we should receive takeover or acquisition proposals from third parties, we will be able to call upon these key executives for their advice and assessment of whether such proposals are in the best interests of shareholders, free of the influences of their personal employment situations. The Compensation Committee determined that it would not be appropriate or in the best interest of shareholders to offer a change in control agreement to Mr. Petrie, in particular because of the significant amount of our common stock Mr. Petrie beneficially owns. Each change in control agreement contains identical terms and, in particular: (a) provides for a severance payment of an amount equal to two times base salary plus two times the target cash incentive award most recently approved by the Board in the event both (1) there is a change in control event and (2) employment is terminated by (i) us for any reason other than cause or (ii) by the executive with good reason, within a period between 120 days prior to an announcement of the change in control event and 18 months after the change in control event becomes effective; (b) contains customary restrictive covenants regarding confidentiality; (c) contains a clawback provision should any benefit thereunder be subject to recapture under any Company policy or applicable law; and (d) prohibits, for a 12-month period, (1) competing with us in any commercial banking, mortgage lending, or any similar lending or banking services provided by us anywhere in, or for any person whose principal office is located in, any county in which we maintain an office, after receipt of their severance payment and (2) soliciting our customers or employees, regardless of whether a severance payment is received. Severance payments will be made only if the executive fully releases all claims against us. As part of its annual review, the Compensation Committee reviews the change in control agreements and makes a recommendation to the Board as to whether they should remain in effect. For 2023, the Compensation Committee recommended that the change in control agreements remain in effect and the Board approved of such recommendation.
Long-Term Incentive Plans
Long-Term Incentive Plans Equity-based incentive awards are currently made under the 2017 Plan. As provided in the CD&A, although the 2017 Plan permits us to issue various types of awards, to date we have only issued restricted stock awards under the 2017 Plan.
Merchants Bancorp 2017 Equity Incentive Plan
Merchants Bancorp 2017 Equity Incentive Plan The 2017 Plan was adopted by the Board on June 22, 2017 and approved by our shareholders on July 5, 2017. The 2017 Plan was designed to ensure availability of equity awards that will assist us in attracting, retaining, and rewarding key employees, directors, and other service providers. Pursuant to the 2017 Plan, a committee of the Board (the “Committee,” for which the Compensation Committee has been appointed by the Board to serve in such role) is allowed to grant awards to eligible persons in the form of qualified and non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, and other incentive awards. Up to 2,250,000 shares of common stock are available for issuance under the 2017 Plan. To date, we have issued 268,874 shares of common stock under the 2017 Plan. Awards vest, become exercisable, and contain such other terms and conditions as determined by the Committee and set forth in individual agreements with the participants receiving the awards. Awards to our Chief Executive Officer must have a vesting period of at least three (3) years. The 2017 Plan enables the Committee to set specific performance criteria, in compliance with the United States Treasury Department’s final “Guidance on Sound Incentive Compensation Policies,” that must be met before an award vests under the 2017 Plan. In establishing criteria, the Committee must attempt to balance risk and financial results in a manner that does not encourage participants to expose us to unnecessary or excess risks. At least 50% of any award to the Chief Executive Officer must be performance-based. An award agreement with the Chief Executive Officer also must stipulate that the Chief Executive Officer will hold shares of stock received for at least a 12-month period after vesting requirements are satisfied, unless the Chief Executive Officer incurs a termination of service, in which case the holding period ends on the termination date. The 2017 Plan allows for acceleration of vesting and exercise privileges of grants if a change in control occurs and a participant incurs a termination of service without cause following the change in control. Our awards do not currently provide for vesting upon death, disability, or retirement, although it would be permitted under the 2017 Plan. If a participant’s employment is terminated for any reason, then all unvested awards expire at the date of termination, unless otherwise approved by the Committee.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table provides information on the incentive compensation and equity grants awarded to our NEOs in 2023. All such grants were made under our 2017 Plan, which is described above.
Grants of Plan-Based Awards
| Name | Grant Date (1)(2) | All other stock awards: Number of Units | Grant Date Fair Value of Stock and Option Awards ($) | | Michael F. Petrie | 12/31/2022 | 39,227 | $954,001 | | Michael J. Dunlap | 12/31/2022 | 34,869 | $848,014 | | Michael R. Dury | 12/31/2022 | 9,153 | $222,601 | | John F. Macke | 12/31/2022 | 8,718 | $212,022 | | Martin A. Schroeter | 12/31/2022 | - | - |
Grants of Plan-Based Awards
| (1) All are time-based restricted stock unit grants that vest over a 3-year period from 2025-2027. |
Grants of Plan-Based Awards
| (2) We do not have any estimated future payouts under equity or non-equity incentive plans. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table provides information for each of our NEOs regarding outstanding unvested stock awards held by the NEOs as of December 31, 2023. As of December 31, 2023, our NEOs only had restricted stock units outstanding. Each restricted stock unit represents a right to receive one (1) share of our common stock upon vesting. The number of restricted stock units and the market values are presented as of the end of 2023.
Outstanding Equity Awards at Fiscal Year End
| | Stock Awards | | | Name | Number of Units of Stock That Have Not Vested (#)(1) | Market Value of Units Units of Stock That Have Not Vested ($)(2) | | Michael F. Petrie (3) | 70,207 | 2,989,414 | | Michael J. Dunlap (4) | 56,017 | 2,385,204 | | Michael R. Dury (5) | 15,807 | 673,062 | | John F. Macke (6) | 15,001 | 638,743 | | Martin A. Schroeter (7) | 14,600 | 621,668 |
Outstanding Equity Awards at Fiscal Year End
| (1) Each restricted stock unit will accelerate and vest upon a change in control in accordance with the 2017 Plan. |
Outstanding Equity Awards at Fiscal Year End
| (2) Based on the closing price of $42.58 on December 29, 2023. |
Outstanding Equity Awards at Fiscal Year End
| (3) 38,893 vested on February 1, 2024; 22,244 will vest on February 1, 2025; and 9,070 will vest on February 1, 2026. |
Outstanding Equity Awards at Fiscal Year End
| (4) 31,200 vested on February 1, 2024; 17,881 will vest on February 1, 2025; and 6,936 will vest on February 1, 2026. |
Outstanding Equity Awards at Fiscal Year End
| (5) 8,376 vested on February 1, 2024; 5,489 will vest on February 1, 2025; and 1,942 will vest on February 1, 2026. |
Outstanding Equity Awards at Fiscal Year End
| (6) 8,695 vested on February 1, 2024; 4,572 will vest on February 1, 2025; and 1,734 will vest on February 1, 2026. |
Outstanding Equity Awards at Fiscal Year End
| (7) 8,560 vested on February 1, 2024; 4,439 will vest on February 1, 2025; and 1,601 will vest on February 1, 2026. |
Option Exercises and Stock Vesting
Option Exercises and Stock Vesting We have not previously granted any stock options to our NEOs, thus no options were exercised in 2023. The below table provides the details of the stock awards that vested in 2023.
Option Exercises and Stock Vesting
| | Stock Awards | | | Name | Stock Awards Number of Shares Acquired on Vesting (#)(1)(2) | Value Realized on Vesting ($)(3) | | Michael F. Petrie | 29,824 | 896,211 | | Michael J. Dunlap | 31,152 | 936,118 | | Michael R. Dury | 8,537 | 256,537 | | John F. Macke | 8,525 | 256,176 | | Martin A. Schroeter | 6,959 | 209,118 |
Option Exercises and Stock Vesting
| (1) All restricted stock units that were awarded for Company performance in 2020, 2021, and 2022. |
Option Exercises and Stock Vesting
| (2) Number represents the gross number of restricted stock units that vested on February 1, 2023. We currently withhold-to-cover for the tax obligations of the NEO and after withholding a number of shares equal to the NEO’s tax liability, only actually issues the net number of shares. |
Option Exercises and Stock Vesting
| (3) The amount reflects the gross value realized upon vesting of restricted stock units based on the $30.05 closing price of our common stock on February 1, 2023 (the date all restricted stock units vested in 2023). |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control As provided in the CD&A, we do not have employment agreements with our NEOs, with the exception of the “at will” 2021 Employment Agreement with Mr. Dury, and we have entered into change in control agreements with each of our NEOs except for Mr. Petrie. Other than in connection with a change in control, our NEOs are not entitled to any payments if their employment is terminated for any reason, including for death, disability, or retirement. The following table provides information on the potential payments and benefits our NEOs would be entitled to under our compensation programs and benefits plans, including the change in control agreements, upon a hypothetical termination of employment as of December 31, 2023. For the purposes of estimating the value of accelerated vesting of equity awards, we have assumed a per share price of $42.58 based on the closing price of our common stock on December 29, 2023.
Potential Payments Upon Termination or Change in Control
| Name | Type of Payment (1) | Termination, by the Company Other than for Cause, or by the Executive for Good Reason, in Connection with Change in Control ($) (2)(3) | | Michael F. Petrie | Cash Severance Payment | - | | | Outstanding Equity Awards | 2,989,414 | | Michael J. Dunlap | Cash Severance Payment | 3,200,000 | | | Outstanding Equity Awards | 2,385,204 | | Michael R. Dury | Cash Severance Payment | 600,000 | | | Outstanding Equity Awards | 673,062 | | John F. Macke | Cash Severance Payment | 1,200,000 | | | Outstanding Equity Awards | 638,743 | | Martin A. Schroeter | Cash Severance Payment | 1,200,000 | | | Outstanding Equity Awards | 621,668 |
Potential Payments Upon Termination or Change in Control
| (1) For each NEO, the cash severance payment represents a payment under their change in control agreement and the outstanding equity award represents amounts that would automatically vest under the 2017 Plan. |
Potential Payments Upon Termination or Change in Control
| (2) These are gross amounts payable and are subject to a reduction if such amounts would exceed certain thresholds under Section 280G of the Internal Revenue Code. |
Potential Payments Upon Termination or Change in Control
| (3) The amounts do not include payments and benefits to the extent they are provided on a non-discriminatory basis to salaried employees generally upon termination of employment, or amounts that are fully vested under the terms of the applicable plan, such as accrued salary and vacation pay and distributions of plan balances under our 401(k) Plan and ESOP. |
Chief Executive Officer Pay Ratio
Chief Executive Officer Pay Ratio In the table below is a comparison of the annual total compensation of our median compensated employee and the annual total compensation of our CEO. In determining our median compensated employee, we used a roster of employees as of the close of business on December 29, 2023 (the last business day of 2023) and excluded our CEO. This roster included 621 employees. We used base salary, commissions, cash bonuses, cash incentive awards, equity incentive awards, and employer contributions to our 401(k) plan in determining total compensation. The amount of any benefit that is generally available to all employees and does not vary depending on an employee’s compensation, such as the value of health insurance benefits, was not included. This methodology is consistent with how we determined our CEO’s total compensation in the Summary Compensation Table above. Additionally, we annualized salaries for those employees who were not employed for the full year of 2023, with the exception of temporary employees. No full-time equivalent adjustments were made for part-time employees.
Chief Executive Officer Pay Ratio
| Median Employee Total Compensation | $94,028 | | CEO Total Annual Compensation | $2,839,538 | | Ratio of CEO to Median Employee Compensation | 30 to 1 |
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| | | | | | Value of initial fixed $100 investment based on: | | | | | Year | Summary Compensation table total for CEO (1) | Compensation actually paid to CEO | Average summary compensation table total for non-CEO NEOs (2) | Average compensation actually paid to non-CEO NEOs | Total shareholder return | Peer group total shareholder return (3) | Net income | Return on average equity | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 (4) | $2,839,538 | $4,982,645 | $2,768,869 | $3,191,500 | $340 | $109 | $279,234,000 | 17.63% | | 2022 (5) | $1,908,889 | $2,317,600 | $3,038,319 | $3,227,061 | $192 | $99 | $219,721,000 | 17.21% | | 2021 (6) | $1,549,064 | $2,159,020 | $4,922,427 | $5,895,969 | $246 | $120 | $227,104,000 | 22.07% | | 2020 (7) | $1,578,683 | $1,842,387 | $2,984,136 | $3,225,454 | $143 | $87 | $180,533,000 | 25.09% |
Pay Versus Performance Table
| (1) Our Chief Executive Officer for each of 2023, 2022, 2021, and 2020 was Mr. Petrie. | | (2) Our Non-Chief Executive Officers for 2023 and 2022 were Messrs. Dunlap, Dury, Macke, and Schroeter. Our Non-Chief Executive Officers for 2021 and 2020 were Messrs. Dunlap and Dury. | | (3) The peer group used was the Nasdaq Bank Index. | | (4) The compensation actually paid for Principal Executive Officer and our Non- Principal Executive Officers in 2023 includes portions of equity awards from 2022, 2021, and 2020 that vested that year. | | (5) The compensation actually paid for Principal Executive Officer and our Non- Principal Executive Officers in 2022 includes portions of equity awards from 2021, 2020, and 2019 that vested that year. | | (6) The compensation actually paid for Principal Executive Officer and our Non- Principal Executive Officers in 2021 includes portions of equity awards from 2020, 2019, and 2018 that vested that year. | | (7) The compensation actually paid for Principal Executive Officer and our Non-Principal Executive Officers in 2020 includes portions of equity awards from 2019, 2018, and 2017 that vested that year. |
Pay Versus Performance Table
The following table reconciles the Summary Compensation Table to the Pay Versus Performance Table above.
Pay Versus Performance Table
| Reconciliation: | CEO | | | | Non-CEO Executive Officers (Averages) | | | | | Year | 2023 | 2022 | 2021 | 2020 | 2023 | 2022 | 2021 | 2020 | | Summary Compensation Table Total Compensation | $2,839,538 | $1,908,889 | $1,549,064 | $1,578,683 | $2,768,869 | $3,038,319 | $4,922,427 | $2,984,136 | | Less: Grant Date Value of Stock Awards in Fiscal Year | $(954,001) | $(858,507) | $(728,014) | $(656,264) | $(320,659) | $(289,006) | $(400,405) | $(319,391) | | Add: Changes in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Year and Fiscal Year | $3,097,108 | $1,267,218 | $1,337,970 | $919,968 | $743,291 | $477,747 | $1,373,946 | $560,709 | | Compensation Actually Paid | $4,982,645 | $2,317,600 | $2,159,020 | $1,842,387 | $3,191,500 | $3,227,061 | $5,895,969 | $3,225,454 |
Pay Versus Performance: Graphical Description
Pay Versus Performance: Graphical Description The graphs below present the relationship during 2023, 2022, 2021, and 2020 between compensation actually paid (“CAP”) to our CEO and our other NEOs (on an average basis) and the following measures:
Pay Versus Performance: Graphical Description
| ● | our cumulative total shareholder return (“TSR”) and the peer group’s cumulative TSR; |
Pay Versus Performance: Graphical Description
| ● | our net income; and |
Pay Versus Performance: Graphical Description
| ● | our return on average equity (which is the company-selected measure). |
CAP and Cumulative TSR / Cumulative TSR of the Peer Group
CAP and Cumulative TSR / Cumulative TSR of the Peer Group