DEF 14A of Mercantile Bank Corp
Filed Apr 4, 2024 · FY20230001437749-24-011001
BOARD OF DIRECTORS EXPERIENCE AND SKILLS
| ● | Base salary | | ● | Short-term incentive compensation | | ● | Long-term incentive compensation | | ● | Other benefits | | ● | The equity-based plans encourage our executive officers and other employees to focus on increasing shareholder value over a period of years | | ● | The deferred compensation and 401(k) plans provide helpful ways for our employees to save for retirement | | ● | Bonus plans are typically based on a variety of metrics tied to our financial performance and contain "claw-back" provisions if the executive officer engages in certain activities or a payout is based on materially inaccurate financial statements or other materially inaccurate performance metric criteria |
BOARD OF DIRECTORS EXPERIENCE AND SKILLS
| | Salary | Bonus | Stock Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non- qualified Deferred Compensation Earnings | All Other Compensation | Total Compensation | | EXECUTIVE OFFICER | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Robert B. Kaminski, Jr. | 665,700 | — | 348,673 | 366,135 | 270 | 97,211 | 1,477,989 | | Raymond E. Reitsma | 484,784 | — | 316,208 | 242,392 | — | 92,464 | 1,135,848 | | Charles E. Christmas | 394,921 | — | 186,707 | 157,968 | — | 73,484 | 813,080 | | Brett E. Hoover | 220,000 | — | 109,989 | 66,000 | — | 38,724 | 434,713 | | Robert T. Worthington | 260,000 | — | 53,788 | 52,000 | 2,721 | 27,290 | 395,799 |
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| (3) Includes 24,260 shares that Mr. Christmas holds jointly with his spouse, 18,331 shares of restricted stock, and 46,465 shares that Mr. Christmas owns under the Bank’s 401(k) plan. Also includes 1,946 shares that Mr. Christmas’ spouse, who is currently employed by the Bank, owns under the Bank’s 401(k) plan as well as 477 shares that she owns in her IRA. |
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| (6) Includes 4,200 shares of restricted stock and 971 shares that Mr. Hoover owns under the Bank’s 401(k) plan. |
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| (7) Includes 51,826 shares that Mr. Kaminski holds jointly with his spouse, 42,897 shares of restricted stock, and 34,001 shares that Mr. Kaminski owns under the Bank’s 401(k) plan. |
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| (9) Includes 31,032 shares of restricted stock, 19,005 shares that Mr. Reitsma owns jointly with his spouse, 21,725 shares that Mr. Reitsma owns under the Bank’s 401(k) plan as well as 2,153 shares that he owns in his IRA. |
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| (11) Includes 7,570 shares that Mr. Setlock holds jointly with his spouse, 11,340 shares of restricted stock, and 8,397 shares that Mr. Setlock owns under the Bank’s 401(k) plan. |
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| (12) Includes 107,800 shares of restricted stock awarded under our stock-based compensation plans, and 130,849 shares that such persons own under the Bank’s 401(k) plan, including 1,946 shares held by Mr. Christmas’ spouse. |
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| (13) The percentages shown are based on the 16,122,213 shares of our common stock outstanding as of March 13, 2024, plus the number of shares that the named person or group has the right to acquire within 60 days of March 13, 2024. For purposes of computing the percentages of outstanding shares of common stock held by each person, any shares that the person has the right to acquire within 60 days after March 13, 2024, are deemed to be outstanding with respect to such person but are not deemed to be outstanding for the purpose of computing the percentage of ownership of any other person. |
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| Stock Owned by 5% Beneficial Owners |
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The following table presents information regarding the beneficial ownership of our common stock by each person known to us to beneficially own more than 5% of our outstanding shares of common stock as of March 13, 2024.
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| Name and Address of Beneficial Owner | Amount Beneficially Owned | Percent of Class Beneficially Owned(3) | | BlackRock, Inc. 55 East 52nd Street New York, NY 10055(1) | 1,554,923 | 9.6% | | Dimensional Fund Advisors LP 6300 Bee Cave Road Austin, TX 78746(2) | 1,151,731 | 7.1% |
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| (1) The information is based on a Schedule 13G, Amendment No. 1, filed with the SEC on January 24, 2024. BlackRock, Inc. may be deemed to have beneficial ownership of the shares reflected in the table as of December 31, 2023. BlackRock reported aggregate beneficial ownership of 1,554,923 shares, with sole voting power over 1,452,817 shares and sole dispositive power over 1,554,923 shares. |
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| (2) The information is based on a Schedule 13G, Amendment No. 7, filed with the SEC on February 9, 2024. Dimensional Fund Advisors LP (“Dimensional”) is an investment adviser registered under Section 203 of the Investment Advisors Act of 1940. It furnishes investment advice to four investment companies registered under the Investment Company Act of 1940 and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). Dimensional reported aggregate beneficial ownership of 1,151,731 shares, with sole voting power over 1,133,624 shares and sole dispositive power over 1,151,731 shares. Though Dimensional may possess voting and/or investment power over the shares, it disclaims beneficial ownership of such securities, which are owned by the Funds. |
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| (3) The percentages shown are based on the 16,122,213 shares of our common stock outstanding as of March 13, 2024. |
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| PROPOSAL #1 – ELECTION OF DIRECTORS |
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| Information About Our Directors |
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Our articles of incorporation and bylaws provide that our Board of Directors will consist of between six and fifteen directors, with the exact number of directors determined from time to time by our Board of Directors. Our directors are elected annually to one-year terms. Our Board of Directors currently has nine members. David M. Cassard currently serves as a member of our Board but will retire when his term expires at the annual meeting and will not stand for reelection. As a result of this action, the Board will be comprised of eight members following this year’s annual meeting. The Board intends to take immediate action following the meeting to reduce the number of directors to eight, leaving no vacancies. Our Board of Directors has nominated:
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| ● | Michael S. Davenport, |
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| ● | Michelle L. Eldridge, |
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| ● | Robert B. Kaminski, Jr., |
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| ● | Michael H. Price, |
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| ● | David B. Ramaker, |
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| ● | Raymond E. Reitsma, |
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| ● | Nelson F. Sanchez, and |
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| ● | Amy L. Sparks |
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as directors for election at this year’s annual meeting for one-year terms expiring at the 2025 annual meeting. Each of the nominees is presently a director whose term expires at this year’s annual meeting. Our Board of Directors recommends that you vote FOR each of the eight nominees named above. Unless otherwise instructed, the persons named as proxies intend to vote all proxies received for the election of the eight nominees. All of the nominees have indicated their willingness to continue to serve. If any nominee should become unwilling or unavailable to serve, our Board of Directors may select a substitute nominee, and in that event the proxies intend to vote all proxies for the person selected, as well as the other nominees. If a substitute nominee is not selected, the proxies intend to vote for the election of the remaining nominees. Our Board of Directors has no reason to believe that any of the nominees will become unavailable. Set forth below is information about the nominees for election as directors. The factual information about each nominee and director has been provided by that person. The particular experience, qualifications, attributes or skills that led our Board of Directors to conclude that each should serve on our Board, in light of our business and structure, were determined by our Board or its Governance and Nominating Committee. There are no family relationships among any of our directors, nominees for director and executive officers.
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| Nominees for Director |
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| MICHAEL S. DAVENPORT DIRECTOR SINCE 2020 AGE: 54 | Mr. Davenport has served as President and Chief Executive Officer of Jireh Metal Products since 2015. Prior to that, he held a variety of positions at major financial institutions, including U.S. Bank, Fifth Third Bank and First Financial Bank. Overall, his background includes over 13 years in the banking industry, holding positions in sales, risk management and community development. Mr. Davenport earned a Bachelor of Science degree in psychology from Xavier University and a Juris Doctor degree from the University of Cincinnati College of Law. Mr. Davenport serves on the Boards of The Right Place, Grand Rapids Chamber of Commerce, The Right Place Manufacturing Council, The Michigan Manufacturing Technology Center and the Xavier University President's Advisory Council. He has been a member of the Bank’s Board since 2017. Mr. Davenport’s background in banking, risk management, law and community development were key factors in our determination that he should be a member of our Board. |
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| MICHELLE L. ELDRIDGE DIRECTOR SINCE 2016 AGE: 58 | Ms. Eldridge is a Principal of Clear Ridge Wealth Management (“Clear Ridge”) in Kalamazoo, Michigan, which she co-founded in 2014. Clear Ridge provides integrated wealth management to high-net-worth families and customized investment management to institutional organizations. Prior to founding Clear Ridge, Ms. Eldridge was a Principal of LVM Capital Management for 16 years. Ms. Eldridge is a member of the Western Michigan University Foundation Investment Committee, is part of the Leadership Council of the Small Business Association of Michigan and is on the Finance Committee of Prince of Peace Lutheran Church. She is a CFA® charterholder, Certified Private Wealth Advisor ®, and a graduate of Western Michigan University. Ms. Eldridge served as a director of Keystone Community Bank from 2007 through 2014. Ms. Eldridge's experience as a CFA® charterholder and Registered Investment Advisor, as well as her leadership roles in the communities we serve, were key factors in our determination that she should be a member of our Board. | | ROBERT B. KAMINSKI, JR. DIRECTOR SINCE 2016 AND PREVIOUSLY FROM 2011 TO 2014 AGE: 62 President and Chief Executive Officer of Mercantile; Chief Executive Officer of the Bank | Mr. Kaminski was one of the founding officers of Mercantile in 1997 and has 40 years of commercial banking experience. Mr. Kaminski was appointed President and Chief Executive Officer (“CEO”) of Mercantile on January 1, 2017, and continues to serve as CEO of the Bank, a position he has held since 2015. Mr. Kaminski has been in various positions of influence and responsibility with Mercantile and the Bank, serving Mercantile and the Bank as Senior Vice President and Secretary from 1997 to 2003, Executive Vice President and Secretary from 2003 to 2015 and President and CEO of the Bank from 2015 through 2016. In addition, he served as the Bank's Chief Operating Officer from 2000 to 2015. Mr. Kaminski serves on the Boards of Directors for the Grand Valley State University Foundation, the City of Wyoming Retirement Board, the West Michigan Policy Forum and the Finance Committee for The Right Place. Mr. Kaminski also serves as a Director of Mercantile, a position to which he was appointed by the Board on December 15, 2016. Mr. Kaminski served as a Director of Mercantile previously from 2011 to 2014. On October 12, 2023, Mr. Kaminski announced his intention to retire from his role of President and CEO of the Company and CEO of Bank, effective on June 1, 2024. Mr. Kaminski’s in-depth knowledge of the organization since its inception, experience as our President and CEO, and length of experience in commercial banking were key factors in our determination that he should be a member of our Board. | | MICHAEL H. PRICE DIRECTOR SINCE 1997 AGE: 67 Chairman of Mercantile and of the Bank | Mr. Price has over 45 years of commercial banking experience and joined the Bank in 1997. Mr. Price retired as the President and Chief Executive Officer of Mercantile and Chief Executive Officer of the Bank on January 1, 2017; positions he had held since 2007. Mr. Price served as President and Chief Operating Officer of Mercantile and the Bank in 1997 and 1998, and as President and Chief Operating Officer of Mercantile and President and Chief Executive Officer of the Bank from 1999 to June of 2007. Mr. Price also served as Chairman of the Board of Mercantile from 2007 through the date of the Firstbank merger and resumed his position as Chairman of Mercantile following Thomas J. Sullivan’s retirement in May of 2015. From 2005 to 2007, he served on the Board of Directors of the Federal Home Loan Bank of Indianapolis. Mr. Price also held leadership positions on the Boards of Metro Health Corporation, Aquinas College, Habitat for Humanity of Kent County, Project Rehab and Network180. Mr. Price was the founding President of our organization and has demonstrated excellent leadership qualities and a strong understanding of the fundamentals of our industry. These attributes led us to conclude that he should be a member of our Board. |
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| DAVID B. RAMAKER DIRECTOR SINCE 2020 AGE: 68 | Mr. Ramaker was appointed as Director of Mercantile in August of 2020. Mr. Ramaker retired from Chemical Financial Corporation and Chemical Bank in 2017. Mr. Ramaker was the Chairman, President and Chief Executive Officer of Chemical Financial Corporation and Chemical Bank from 2006 until its merger with Talmer Bank Corporation in 2016. He served as President and Chief Executive Officer of Chemical Financial Corporation and Chemical Bank from 2001 through June of 2017. He joined Chemical Bank in 1989 as Vice President of Commercial Lending. Prior to that, he held a variety of banking positions with financial institutions in Texas from 1977 through 1989. Mr. Ramaker holds a bachelor’s degree with a major in finance and minor in accounting from Southern Methodist University. Mr. Ramaker, as a former Chief Executive Officer of a publicly traded financial company, brings extensive governance, banking industry experience and strong leadership qualities, which were key factors in our determination that he should be a member of our Board. | | RAYMOND E. REITSMA DIRECTOR SINCE 2023 AGE: 61 Executive Vice President of Mercantile and President of the Bank | Mr. Reitsma was appointed as Director of Mercantile in October of 2023. Mr. Reitsma was appointed Executive Vice President of Mercantile effective May 24, 2018, and served as Chief Operating Officer of Mercantile from January 1, 2022, through December 31, 2023. He has been with the Bank for 20 years, beginning with his initial role as a Commercial Loan Manager in 2003. In June 2015, Mr. Reitsma was appointed as the Bank's West Region President and became President of the Bank on January 1, 2017. Mr. Reitsma’s areas of responsibility have included commercial lending, treasury/cash management, mortgage lending, operations, risk management, retail/branches, and credit administration. Mr. Reitsma was also very instrumental in the preparation, transition and integration periods surrounding the merger with Firstbank Corporation. Mr. Reitsma currently serves on the Kent Community Hospital Finance Authority, the Advisory Council of The Mill Steel Company and is Chair of the Mel Trotter capital campaign. Additionally, he serves on the Advisory Council of DA Blodgett/St. John’s Home and has done so since 2011. Previously, Mr. Reitsma has served on the local boards of the American Heart Association and the Pine Rest Foundation for six years, including two years as Treasurer. He has also been involved with the local United Way agency, most recently as the annual Campaign Chair for the Bank. Mr. Reitsma graduated from Calvin College with a B.A. in Business Administration and also holds an MBA in Finance from Michigan State University. Mr. Reitsma’s extensive tenure and dynamic leadership roles with the Company as well as his extensive commercial banking experience were key factors in our determination that he should be a member of our Board. | | NELSON F. SANCHEZ DIRECTOR SINCE 2024 AGE: 59 | Mr. Sanchez is a strong finance executive with broad strategic leadership experience in all aspects of finance, operations, marketing and general management. He is the Chief Executive Officer of RoMan Manufacturing, Inc. (“RoMan”). Mr. Sanchez joined RoMan as Chief Financial Officer in 2013, became Chief Operating Officer in 2016, President in January of 2023 and was appointed as Chief Executive Officer in June of 2023. Before joining RoMan, he held executive positions in finance, marketing, and management in various companies, including Deloitte, Windquest Companies, Ridgeview Industries, and Kaydon Corporation. Mr. Sanchez is a Certified Public Accountant, fluent in Spanish and has an extensive background in strategic leadership and diversity training. He serves on various boards and committees in the West Michigan community, including the Grand Rapids Community Foundation, Grand Rapids Chamber of Commerce and Holland Home. Mr. Sanchez’s experience in a variety of business sectors encompassing domestic, international, private, public, and family-owned organizations, along with his financial expertise as a Certified Public Accountant, led us to conclude that he should serve on our Board. |
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| AMY L. SPARKS DIRECTOR SINCE 2023 AGE: 51 | Ms. Sparks was appointed as Director of Mercantile in October of 2023. Ms. Sparks is the Owner, President, and Chief Executive Officer of Nuvar, Inc., a Michigan-based manufacturing company specializing in finished product contract manufacturing for the office furniture, health care, education, appliance and transportation industries. Ms. Sparks is also a Certified Public Accountant and currently serves on the Grand Valley State University Seidman School of Business Dean's Advisory Board and is a mentor volunteer with Inforum's ManufacturingNEXT program. Ms. Sparks has nearly 30 years of demonstrated executive leadership in solidifying financial performance, enhancing organizational development and diversifying into new markets. Her strong financial background and experience were key factors in our determination that she should be a member of our Board. |
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| INFORMATION ABOUT OUR EXECUTIVE OFFICERS |
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Our Executive Officers are listed in the table below:
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| Name of Executive Officer | Title | | Robert B. Kaminski, Jr. | President and Chief Executive Officer of Mercantile and Chief Executive Officer of the Bank | | Charles E. Christmas | Executive Vice President, Chief Financial Officer and Treasurer of Mercantile, and Executive Vice President and Chief Financial Officer of the Bank | | Raymond E. Reitsma | Executive Vice President of Mercantile and President of the Bank | | Scott P. Setlock | Executive Vice President, Chief Operating Officer and Secretary of Mercantile and of the Bank | | Brett E. Hoover | Executive Vice President, Chief Human Resource Officer of Mercantile and of the Bank |
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Mr. Kaminski and Mr. Reitsma are also members of our Board of Directors, and information regarding their business experience is described above under the heading “Election of Directors.” The business experience for Mr. Christmas, Mr. Setlock, and Mr. Hoover for at least the past five years is summarized below. Our Executive Officers are generally elected each year at the annual meeting of our Board of Directors that follows the annual meeting of the shareholders. Their terms of office are at the discretion of our Board of Directors.
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| Executive Officers |
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Charles E. Christmas, age 58 Executive Vice President, Chief Financial Officer and Treasurer of Mercantile, and Executive Vice President and Chief Financial Officer of the Bank Mr. Christmas joined the Bank in 1998 and has over 35 years of banking experience. Before being promoted to his current position as Executive Vice President and Chief Financial Officer of Mercantile and the Bank, Mr. Christmas served as Senior Vice President and Chief Financial Officer of Mercantile and the Bank from 2000 to 2015. Mr. Christmas also serves as Treasurer of Mercantile, a position he has held since 2000. Prior to joining Mercantile, he examined various financial institutions for over ten years while serving as a bank examiner with the Federal Deposit Insurance Corporation (“FDIC”). He began his tenure with the FDIC upon his graduation from Ferris State University. Mr. Christmas holds a Bachelor of Science degree in Accountancy. Mr. Christmas serves on the Michigan Bankers Association Funds Management Committee, is an instructor at the Michigan Bankers Association Perry School of Banking, is a member of the Ferris State University College of Business Advisory Board, serves as a Board member and Finance Committee member of the Frederik Meijer Gardens & Sculpture Park, and assists the Make-A-Wish Foundation of Michigan in its fundraising activities. Scott P. Setlock, age 42 Executive Vice President, Chief Operating Officer and Secretary of Mercantile and of the Bank Mr. Setlock was appointed to the role of Executive Vice President, Chief Operating Officer and Secretary of Mercantile effective January 1, 2024, and has served as Executive Vice President, Chief Operating Officer of the Bank since January 1, 2022. In his nearly 20-year tenure with the Bank, Mr. Setlock has held roles within Commercial Credit, Commercial Credit Management, Commercial Lending and Mortgage Lending Management. He maintains an active role in the community, serving on the Board and Executive Committee of Junior Achievement of the Michigan Great Lakes where he also regularly volunteers directly with students. Mr. Setlock has previously served as an Adjunct Professor of Bank Management at the Seidman College of Business at Grand Valley State University, on the Board and Executive Committee of the Seidman Alumni Board and on the Seidman Finance Advisory Committee. Other prior community service includes holding the role of Board Chair at In the Image for six years and on the Heart of West Michigan United Way Campaign Cabinet overseeing the Finance Division. Mr. Setlock graduated from Grand Valley State University with a BBA and an MBA in Finance and Economics. He is also a graduate of the American Banking Association Stonier Graduate School of Banking and associated Wharton leadership programs. Brett E. Hoover, age 53 Executive Vice President, Chief Human Resource Officer of Mercantile and of the Bank Mr. Hoover was appointed as Senior Vice President, Human Resource Director of the Bank on March 4, 2022, and was most recently appointed as Senior Vice President, Human Resource Director of Mercantile on January 1, 2023. Previously, Mr. Hoover was promoted to Human Resource Associate Director in January of 2020. Mr. Hoover joined the Bank in 2006 as a Vice President, Human Resource Administrator and is a Society for Human Resource Management - Senior Certified Professional. In addition, he has the Group Benefit Associate (“GBA”) certification. Mr. Hoover serves the local community as the President of the Board of IKUS Life Enrichment Services. He also serves as a Director for the Michigan Bankers Workers Compensation Fund. Mr. Hoover has previously served on the Board of Grand Rapids Opportunities for Women (“GROW”). He holds a master’s degree in management from Aquinas College.
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| CORPORATE GOVERNANCE |
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| Director Independence |
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Applicable NASDAQ rules require that a majority of our Board of Directors be independent. In March of 2024, our Board of Directors reviewed the independence of our directors and determined that each of the directors, including those nominated for election at the annual meeting, are independent as defined by applicable NASDAQ rules, with the exception of Mr. Kaminski, who currently serves as President and Chief Executive Officer and Mr. Reitsma, who currently serves as Executive Vice President of Mercantile. Further, in making independence determinations, our Board of Directors has concluded that none of the independent directors has a relationship that in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. While the Board has determined that Mr. Price is independent under applicable NASDAQ and SEC rules, the Board has elected not to place Mr. Price on any of our committees due to the policies of certain institutional shareholders against a former company Chief Executive Officer occupying such a position.
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| Board Meetings |
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During 2023, our Board of Directors held a total of nine meetings. During 2023, each director attended at least 92% of the meetings of our Board and its Committees on which he or she then served. Our Board of Directors has a policy of encouraging members of the Board of Directors to attend the annual meetings of the shareholders. All of our directors then serving on our Board attended last year’s annual meeting.
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| Board Committees |
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Our Board of Directors has, and appoints members to, three standing committees: the Audit Committee, the Compensation Committee, and the Governance and Nominating Committee. The membership of these committees, as of March 13, 2024, was as follows:
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| DIRECTOR NAME | Audit Committee | Compensation Committee | Governance & Nominating Committee | | David M. Cassard** | C | M | M | | Michael S. Davenport* | M | M | M | | Michelle L. Eldridge | M | C | M | | David B. Ramaker | M | M | C | | Nelson F. Sanchez | M | M | M | | Amy L. Sparks** | M | M | M | | TOTAL MEETINGS IN 2023 | 6 | 6 | 3 |
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* Executive Session Facilitator (ESF) ** Mr. Cassard retires from the Board effective May 23, 2024 and Ms. Sparks has been appointed by the Board as the successor Chairperson of the Audit Committee effective on the same date. C = CHAIR M = MEMBER Each of the members of these committees is an independent Director as defined by applicable NASDAQ and the SEC rules. Each of these committees has a Charter that has been approved by our Board of Directors and is available on our website, www.mercbank.com.
GOVERNANCE AND NOMINATING COMMITTEE
| ● | peer group comparisons with our financial performance, including net interest margin, efficiency ratio, return on average assets, return on average equity, shareholder returns, stock price, stock price to earnings ratios and stock yield; | | ● | strategic planning effectiveness and attainment of strategic goals, ability to react to changing markets and conditions, leadership and vision provided to employees and other stakeholders, and succession planning and effectiveness; | | ● | regulatory requirements and results of audits and examinations; | | ● | amount of time and effort expended by employees for our communities; | | ● | rate of employee turnover; | | ● | content and effectiveness of our employee training; | | ● | results of any employee surveys; | | ● | general attitude of employees; | | ● | ability to retain and attract new employees; | | ● | any customer complaints that come to our attention; | | ● | level and commitment of our executive officers to our communities; and | | ● | financial commitment to our communities |
GOVERNANCE AND NOMINATING COMMITTEE
Our Compensation Committee’s goal is to establish salary compensation for the executive officers based upon our operating performance relative to comparable peer companies over a three-year period. In setting base salaries, consideration is given to salary compensation of executive officers with comparable qualifications, experience and responsibilities at financial institutions within our peer group. Operating performance and salary compensation information is obtained from the annual SNL Executive Compensation Review for Banks and Thrifts. We also utilize industry compensation studies prepared by the Michigan Bankers Association and an independent public accounting firm, but to a lesser degree. Our Compensation Committee may engage an independent compensation consultant periodically to conduct a competitive analysis of our executive compensation program relative to the market. In 2021, the Compensation Committee engaged Pearl Meyer to provide a market analysis of our executive compensation program, including base salary, target annual incentive, target total cash compensation, long-term incentives, and total direct compensation. The Compensation Committee concluded that Pearl Meyer is independent under applicable SEC and NASDAQ rules, based on the Committee’s review of the services provided to the Committee and information provided by Pearl Meyer, and concluded that no conflict of interest existed that would prevent Pearl Meyer from independently advising the Compensation Committee. The Compensation Committee did not retain a compensation consultant in 2023 but intends to engage a consultant in 2024. The peer group of companies, which was utilized by the Compensation Committee as a reference for 2024 and 2023 compensation decisions, is listed below. The current peer group differs slightly from the peer group used by Pearl Meyer as we have added Byline Bancorp, Inc. and Old Second Bancorp, Inc. as peer companies and removed First Busey Corporation and Macatawa Bank Corporation.
GOVERNANCE AND NOMINATING COMMITTEE
| 2023 AND 2024 PEER GROUP | | | Byline Bancorp, Inc. | Lakeland Financial Corporation | | Community Trust Bancorp, Inc. | Midland States Bancorp, Inc. | | Farmers National Banc Corp. | Nicolet Bancshares, Inc. | | First Financial Corporation | Peoples Bancorp, Inc. | | First Mid Bancshares, Inc. | Old Second Bancorp, Inc. | | German American Bancorp, Inc. | Stock Yards Bancorp, Inc. | | Horizon Bancorp, Inc. | 1st Source Corporation | | Independent Bank Corporation | |
GOVERNANCE AND NOMINATING COMMITTEE
| ● | promotes the growth, profitability, and expense control necessary to accomplish corporate strategic long-term plans; | | ● | encourages superior results by providing a meaningful incentive; and | | ● | supports teamwork among employees. |
GOVERNANCE AND NOMINATING COMMITTEE
We adopted bonus plans for our executive officers in each of 2023, 2022, and 2021, as described below. Bonus Plan for 2023 On June 22, 2023, we adopted an Executive Officer Bonus Plan for 2023 (the “2023 Executive Officer Bonus Plan”), which provided for cash bonuses for our executive officers. The maximum amount that could be allocated to the bonus pool was $884,495 under the 2023 Executive Officer Bonus Plan provided, however, that the maximum amount would be appropriately adjusted if (a) a newly hired employee became eligible to participate in the plan, (b) a participant's base salary was adjusted during the year, or (c) a participant became ineligible before December 31, 2023. Payment from the bonus pool under the 2023 Executive Officer Bonus Plan, if any, was based on the achievement of targets under the following metrics for 2023, which were measured pre-bonus accrual and excluding unbudgeted and one-time/non-core income and expenses, as established by our Compensation Committee:
Summary Compensation Table
Summary Compensation Table The following table provides information regarding the compensation earned by the named executive officers for the three years ended December 31, 2023.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Options Awards ($) | Non-Equity Incentive Plan Compensation ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($)(4) | Total ($) | | Robert B. Kaminski, Jr. | 2023 | 665,700 | — | 348,673 | — | 366,135 | 270 | 97,211 | 1,477,989 | | President and Chief Executive | 2022 | 634,000 | — | 366,133 | — | 348,700 | 78 | 81,115 | 1,430,026 | | Officer of Mercantile, and Chief Executive Officer of the Bank | 2021 | 519,000 | — | 348,700 | — | 286,163 | 67 | 54,989 | 1,208,919 | | Raymond E. Reitsma | 2023 | 484,784 | — | 316,208 | — | 242,392 | — | 92,464 | 1,135,848 | | Executive Vice President of Mercantile, | 2022 | 440,874 | — | 242,387 | — | 198,393 | — | 80,629 | 962,283 | | and President of the Bank | 2021 | 405,784 | — | 220,395 | — | 185,207 | — | 59,274 | 870,660 | | Charles E. Christmas | 2023 | 394,921 | — | 186,707 | — | 157,968 | — | 73,484 | 813,080 | | Executive Vice President, Chief | 2022 | 374,921 | — | 177,706 | — | 151,222 | — | 63,317 | 767,166 | | Financial Officer and Treasurer of Mercantile, and Executive Vice President and Chief Financial Officer of the Bank | 2021 | 374,921 | — | 168,732 | — | 149,308 | — | 47,452 | 740,413 | | Brett E. Hoover (5) | 2023 | 220,000 | — | 109,989 | — | 66,000 | — | 38,724 | 434,713 | | Executive Vice President, Chief Human | 2022 | — | — | — | — | — | — | — | — | | Resource Officer of Mercantile and the Bank | 2021 | — | — | — | — | — | — | — | — | | Robert T. Worthington | 2023 | 260,000 | — | 53,788 | — | 52,000 | 2,721 | 27,290 | 395,799 | | Senior Vice President, Chief Risk | 2022 | 260,000 | — | 51,970 | — | 52,000 | 786 | 27,637 | 392,393 | | Officer, Secretary and General Counsel of Mercantile and the Bank | 2021 | 260,000 | — | 52,011 | — | 74,145 | 642 | 22,183 | 408,981 |
Summary Compensation Table
| (1) Refer to Note 10, "Stock-Based Compensation," in the Notes to our Consolidated Financial Statements included in our Annual Report to the SEC on Form 10-K for the year ended December 31, 2023, for the relevant assumptions used to determine the valuation of the stock awards. In 2023, restricted stock grants were issued to Messrs. Kaminski, Reitsma, Christmas, Hoover and Worthington in the amount of 8,667, 7,860, 4,641, 2,734 and 1,337 respectively. |
Summary Compensation Table
| (2) Payments were made for 2023, 2022 and 2021 pursuant to the terms of the 2023 Executive Officer Bonus Plan, the 2022 Executive Officer Bonus Plan, and the 2021 Executive Officer Bonus Plan, respectively. The Compensation Committee also awarded an additional discretionary bonus for 2022 to Mr. Christmas of $20,000. |
Summary Compensation Table
| (3) The amounts shown above are the above-market interest credited to the accounts of the executive officers for the applicable year on compensation they have deferred under our non-qualified deferred compensation plan. Interest is considered to be above-market interest to the extent that it exceeds 120% of the applicable federal long-term rate, with compounding (as prescribed under section 1274(d) of the Internal Revenue Code), at the rate that corresponds most closely to the rate under the plan at the beginning of each quarter. |
Summary Compensation Table
| (4) Includes for 2023 (a) matching contributions to the 401(k) plan accounts of Messrs. Kaminski, Reitsma, Christmas, Hoover and Worthington in the amounts of $16,500, $16,500, $16,500, $14,025 and $13,833, respectively; (b) medical, life, disability, and long-term care insurance premiums paid on policies insuring them; (c) a country club membership for Mr. Reitsma; and (d) cash dividends paid on restricted stock. |
Summary Compensation Table
| (5) Mr. Hoover was appointed as an executive officer effective January 1, 2023. |
Summary Compensation Table
Employment Agreements The Bank and Mercantile have entered into employment agreements with our executive officers, Mr. Kaminski, Mr. Reitsma, Mr. Christmas, Mr. Hoover, and Mr. Worthington, which provide for their employment, annual base compensation, and severance, as well as confidentiality and non-compete arrangements. The employment agreements for each executive officer (other than Mr. Hoover) were amended and restated effective as of December 31, 2018, so that the terms would be uniform. Mr. Hoover’s amended employment agreement, which was effective on January 1, 2023, includes terms that align with the employment agreements for the other executive officers. Each agreement establishes an employment period that extends an additional year, each December 31, so that as of each December 31, there are three years remaining in the employment period. The annual extension of the employment period can be avoided by the Bank, Mercantile, or the officer giving notice to the others that the employment period is not to be extended. Our Board determined not to extend Mr. Worthington’s contract for an additional year effective December 31, 2022. Therefore, his employment agreement will expire on December 31, 2024. The employment agreements provide the officers with annual base salaries for each year in the amounts established from year to year by the Board of Directors of the Bank. The annual base salary for each year for each officer may not be less than the amount established for the immediately preceding year. The Board of Directors established the annual base salaries of each executive officer as follows:
Summary Compensation Table
| NAMED EXECUTIVE OFFICER | 2024 | 2023 | | Mr. Kaminski | $665,700 | $665,700 | | Mr. Reitsma | $575,000 | $484,784 | | Mr. Christmas | $415,000 | $394,921 | | Mr. Hoover | $275,000 | $220,000 | | Mr. Worthington | $267,800 | $260,000 |
Summary Compensation Table
In addition to the annual base salary, the employment agreements provide that the officers are entitled to participate in our employee benefit and incentive compensation plans, including health insurance, life and disability insurance, stock option, profit sharing and retirement plans. Under the 2023 Executive Officer Bonus Plan, our officers received the following bonus payments for 2023: Mr. Kaminski, $366,135 (55% of 2023 salary); Mr. Reitsma, $242,392 (50% of 2023 salary); Mr. Christmas, $157,968 (40% of 2023 salary); Mr. Hoover, $66,000 (30% of 2023 salary); and Mr. Worthington, $52,000 (20% of 2023 salary). Additional information regarding the employment agreements, including compensation and benefits payable to the officers on termination of employment and officer confidentiality and non-compete obligations, is included below under the heading “Potential Payments Upon Termination or Change in Control.” Salary and Bonus Compared to Total Compensation We have not established a proportion that salary and bonus should be of an executive officer’s total compensation. As indicated in the Summary Compensation Table above, the proportion for 2023 that salary and bonus were of total compensation ranged from approximately 64.02% to 78.83% for our executive officers.
Grants of Plan-Based Awards In 2023
Grants of Plan-Based Awards In 2023 The following table provides information regarding grants of plan-based awards to the named executive officers during the year ended December 31, 2023.
Grants of Plan-Based Awards In 2023
| | | Estimated Future Payouts Under Non- Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | Name | Grant Date | Thres- hold ($) | Target ($) | Maxi- mum ($) | Thres- hold (#) | Target (#) | Maxi- mum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($ / Sh) | Grant Date Fair Value of Stock and Option Awards ($) (1) | | Robert B. Kaminski, Jr. | 12/14/2023 | — | — | — | 4,333 | 8,667 | 13,001 | — | — | — | 348,673 | | Raymond E. Reitsma | 12/14/2023 | — | — | — | 3,930 | 7,860 | 11,790 | — | — | — | 316,208 | | Charles E. Christmas | 12/14/2023 | — | — | — | 2,320 | 4,641 | 6,962 | — | — | — | 186,707 | | Brett E. Hoover | 12/14/2023 | — | — | — | 1,367 | 2,734 | 4,101 | — | — | — | 109,989 | | Robert T. Worthington | 12/14/2023 | — | — | — | 668 | 1,337 | 2,006 | — | — | — | 53,788 |
Grants of Plan-Based Awards In 2023
| (1) The grant date fair value of the restricted stock awards is based on the number of shares granted times the market value of the shares on the grant date. The target number of shares was used in the fair value calculation. The grant date was December 14, 2023, and the market value per share on that date was $40.23. |
Grants of Plan-Based Awards In 2023
Restricted Stock Awards The stock awards shown in the table above are restricted stock that was awarded to the named executive officers by our Compensation Committee on December 14, 2023, under our Stock Incentive Plan of 2023. The grant of performance-based restricted stock to the executive officers would vest at the end of a 3-year performance period (January 1, 2024 - December 31, 2026), depending on whether Mercantile satisfied pre-determined performance goals. The performance goals were set at a target performance level. If Mercantile meets the target performance level, the executive officers would be vested in the number of shares designated as the “target award” shown in the table above. Performance levels were also set at a maximum level to provide an incentive for superior performance, and at a threshold level, below which no shares would be earned. Depending on Mercantile’s performance relative to the performance goals, the executive officers could earn between 0% and 150% of the target award. The restricted stock is forfeited if the executive officer ceases to be employed with us, or ceases to serve as a Board member prior to the restricted stock vesting, subject to accelerated or pro-rated vesting at the target award level as provided for in the applicable restricted stock award agreement in the event of the executive officer's death, disability, retirement, termination other than for “Cause,” a change in control, or exercise of discretion by the Compensation Committee. The executive officers are entitled to receive cash dividends on their restricted stock to the same extent as other holders of our common stock.
Outstanding Equity Awards At 2023 Fiscal Year-End
Outstanding Equity Awards At 2023 Fiscal Year-End The following table provides information as of December 31, 2023, regarding equity awards, including unexercised stock options and restricted stock that had not vested, for each of the named executive officers.
Outstanding Equity Awards At 2023 Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(1)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | | Robert B. Kaminski, Jr. | — | — | — | — | — | — | — | 15,538 | 627,424 | | | — | — | — | — | — | — | — | 15,035 | 607,113 | | | — | — | — | — | — | — | — | 11,406 | 460,574 | | | — | — | — | — | — | — | — | 8,667 | 349,973 | | Raymond E. Reitsma | — | — | — | — | — | — | — | 11,045 | 445,997 | | | — | — | — | — | — | — | — | 9,503 | 383,731 | | | — | — | — | — | — | — | — | 7,551 | 304,909 | | | — | — | — | — | — | — | — | 7,860 | 317,387 | | Charles E. Christmas | — | — | — | — | — | — | — | 9,183 | 370,810 | | | — | — | — | — | — | — | — | 7,275 | 293,765 | | | — | — | — | — | — | — | — | 5,536 | 223,544 | | | — | — | — | — | — | — | — | 4,641 | 187,404 | | Brett E. Hoover | — | — | — | — | — | — | — | 1,000 | 40,380 | | | — | — | — | — | — | — | — | 3,200 | 129,216 | | | — | — | — | — | — | — | — | 2,731 | 110,278 | | Robert T. Worthington | — | — | — | — | — | — | — | 4,953 | 200,002 | | | — | — | — | — | — | — | — | 2,242 | 90,532 | | | — | — | — | — | — | — | — | 1,619 | 65,375 | | | — | — | — | — | — | — | — | 1,337 | 53,988 |
Outstanding Equity Awards At 2023 Fiscal Year-End
| (1) The performance-based restricted stock awards for Mr. Kaminski, Mr. Reitsma, Mr. Christmas, and Mr. Worthington, in the order listed in the column and depicted at the adjusted target level, cliff vest on February 15, 2024, February 15, 2025, February 15, 2026, and February 15, 2027. The restricted stock awards are subject to forfeiture and restrictions on transfer until they vest. The first two target level awards shown in the column for each officer were adjusted on December 31, 2022, to reflect the anticipated achievement of the performance metrics, based on actual and projected performance as of that date for each of the respective three-year performance periods, resulting in an additional number of shares as follows: |
Outstanding Equity Awards At 2023 Fiscal Year-End
| Name | 2021-2023 Performance Period | 2022-2024 Performance Period | | Mr. Kaminski | 1,060 | 5,012 | | Mr. Reitsma | 753 | 3,168 | | Mr. Christmas | 626 | 2,425 | | Mr. Worthington | 338 | 748 |
Outstanding Equity Awards At 2023 Fiscal Year-End
| (2) For Mr. Hoover, two time-based restricted stock awards and one performance-based restricted stock award, in the order listed in the column, cliff vest on December 16, 2024, December 15, 2025, and February 15, 2027. The restricted stock awards are subject to forfeiture and restrictions on transfer until they vest. | | (3) Based on the closing stock price of $40.38 per share as of December 31, 2023. |
Option Exercises and Stock Vested In 2023
Option Exercises and Stock Vested In 2023 The following table provides information regarding the exercise of stock options and vesting of restricted stock during 2023 for each of the named executive officers.
Option Exercises and Stock Vested In 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | | Robert B. Kaminski, Jr. | — | — | 11,558 | 404,414 | | Raymond E. Reitsma | — | — | 7,809 | 273,237 | | Charles E. Christmas | — | — | 6,831 | 239,017 | | Brett E. Hoover | — | — | 1,386 | 50,866 | | Robert T. Worthington | — | — | 3,684 | 128,903 |
Option Exercises and Stock Vested In 2023
| (1) For officers other than Mr. Hoover, the value realized on vesting is equal to the market value of the shares on February 15, 2023, the date that the performance-based restricted stock for the 2020-2022 performance period became vested, of $34.99. For Mr. Hoover, the value realized is equal to the market value of 1,386 shares that became cliff vested on November 19, 2023. Mr. Hoover’s shares were granted to him before he became an executive officer and were subject to time-based vesting and were not performance-based restricted stock. |
Nonqualified Deferred Compensation For 2023
Nonqualified Deferred Compensation For 2023 The following table provides information regarding our plan that provides for the deferral of compensation for the named executive officers on a basis that is not tax qualified.
Nonqualified Deferred Compensation For 2023
| Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(1) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(2) | | Robert B. Kaminski, Jr. | — | — | 532 | — | 8,889 | | Raymond E. Reitsma | — | — | — | — | — | | Charles E. Christmas | — | — | — | — | — | | Brett E. Hoover | — | — | — | — | — | | Robert T. Worthington | 2,800 | — | 5,538 | — | 73,022 |
Nonqualified Deferred Compensation For 2023
| (1) The earnings consist of interest credited monthly at a rate equal to the prime rate as published in the Wall Street Journal, determined quarterly, as of the first day of each quarter. The above-market portion of this interest in 2023 is reported for each officer in the Summary Compensation Table. The amounts so reported are for Mr. Kaminski, $261 and for Mr. Worthington, $2,721. The above-market portion is the amount of the interest that exceeds 120% of the applicable federal long-term rate, with compounding (as prescribed under section 1274(d) of the Internal Revenue Code), at the rate that corresponds most closely to the rate established under the deferred compensation plan. |
Nonqualified Deferred Compensation For 2023
| (2) The amount that was reported as compensation in the Summary Compensation Tables for previous years is: for Mr. Kaminski, $3,880 and Mr. Worthington, $3,577. |
Nonqualified Deferred Compensation For 2023
Deferred Compensation Plan The information in the table above pertains to our executive officers’ participation in the Bank’s non-qualified deferred compensation plan. Participants in the plan may elect to defer up to 100% of their salary and other cash compensation each year. Under the plan, the amount of any compensation deferred is credited with interest monthly at a rate equal to the prime rate as published in the Wall Street Journal, determined quarterly, on the first day of each quarter. The plan provides that the Bank will pay to each executive officer, from the executive officer’s deferred compensation account, a lump sum payment or installment payments, whichever the officer elected, after he or she leaves employment with us due to normal retirement, early termination, disability, or a change of control. If installment payments are elected on or after January 1, 2015, the maximum payment period is ten years. If the executive officer dies before leaving employment, the Bank will distribute the payments to the executive officer’s designated beneficiary in a lump sum, or installments, if installments were elected. If death occurs during the time that payments are being made, the Bank will distribute the remaining payments to the executive officer’s designated beneficiary at the same time and in the same amounts that would have been distributed if the executive officer had not died. The plan is subject to Section 409A of the Internal Revenue Code, which specifies requirements that non-qualified deferred compensation plans must meet in order to avoid adverse tax consequences for participants.
Nonqualified Deferred Compensation For 2023
| Potential Payments upon Termination or Change in Control |
Nonqualified Deferred Compensation For 2023
Employment Agreements We have entered into employment agreements with each of our executive officers. The agreement for each officer other than Mr. Worthington establishes an employment period that extends an additional year, each December 31, so that as of each December 31, there are three years remaining in the employment period. Our Board determined not to extend Mr. Worthington’s contract for an additional year effective December 31, 2022. Therefore, his employment agreement will expire on December 31, 2024. The annual extension of the employment period can be avoided by giving notice that the employment period is not to be extended. These agreements include provisions that provide compensation and benefits to the executive officers in the event that their employment with us is terminated:
Nonqualified Deferred Compensation For 2023
| ● | during the employment period, voluntarily by the executive officer for Good Reason, or by us without Cause; or |
Nonqualified Deferred Compensation For 2023
| ● | during the employment period, due to disability or death. |
Nonqualified Deferred Compensation For 2023
The employment agreements also provide compensation and benefits to the officers in the event that their employment with us is terminated after the employment period and before they reach the age of 65, voluntarily by them if their annual base salary is reduced without Cause, or by us without Cause. The terms “Cause” and “Good Reason” are defined in the employment agreements. Cause includes certain acts of dishonesty and intentional gross neglect, conviction of a felony, and certain intentional breaches of an officer’s obligations in the employment agreement relating to confidentiality of our information and not competing with us. Good Reason includes an assignment to the officer of a title or duties that are materially inconsistent with the officer’s position, titles, duties or responsibilities, and certain failure by us to comply in a material respect, even after notice to us, with our obligations to the officer under the employment agreement. Termination During the Employment Period The employment agreements provide the executive officers with compensation and benefits in the event that their employment is terminated by us without Cause, or the officers elect to terminate their employment for Good Reason during the employment period. In such event, the officer in question is entitled to receive the greater of the officer’s annual base salary through the end of the employment period or (i) for Mr. Kaminski, $500,000; (ii) for Mr. Reitsma and Mr. Christmas, $350,000; (iii) Mr. Hoover, $250,000 and (iv) Mr. Worthington, $250,000, in any case payable over 18 months. In addition, in the case of such a termination of employment, the officer is entitled to continue the officer’s participation in our life, disability and health insurance plans for 18 months, to the extent permitted under the plans, to an assignment of any assignable term life insurance policies owned by us insuring the officer’s life, and to $15,000 for out-placement, interim office and related expenses. For a termination of an executive officer by us during the employment period to be with Cause, it must be done within 90 days of our learning of the Cause. For a termination by the officer during the employment period to be with Good Reason, it must be done by the officer within 90 days of the officer learning of the Good Reason. If an officer becomes disabled or dies during the employment period, the officer is entitled to compensation and benefits under the officer’s employment agreement. In the event of disability, the officer continues to receive their then current annual base salary through the end of the employment period, and any disability benefits payable under disability plans that we provide. The officer also continues to participate in our life, disability, and health insurance plans, through age 65, to the extent permitted under the plans. If the officer dies during the employment period, we are obligated to pay the officer’s legal representative a death benefit. The death benefit is (i) for Mr. Kaminski, $300,000; (ii) for Mr. Reitsma and Mr. Christmas, $200,000; (iii) and for Mr. Hoover and Mr. Worthington, $100,000. In addition, if we own any life insurance insuring the life of the officer, the proceeds of the policies are payable to the named beneficiaries. Under the employment agreements, in the event that an officer’s employment is terminated for Cause, the officer is not entitled to any accrued rights that the officer may then have under any of our stock incentive plans. Termination After the Employment Period The employment agreements provide compensation and benefits in the event that after the employment period and prior to the officer reaching the age of 65, the officer’s employment is terminated by us without Cause or the officer’s annual base salary is reduced without Cause, and the officer terminates the officer’s employment within 90 days of the reduction. In such event, the officer is entitled to receive an amount, for Mr. Kaminski of $500,000; for Mr. Reitsma or Mr. Christmas of $350,000; and for Mr. Hoover or Mr. Worthington, of $250,000, payable over 18 months. In addition, in the case of such a termination of employment, the officer is entitled to continue participation in our life, disability and health insurance plans for 18 months, to the extent permitted under the plans, to an assignment of any assignable term life insurance policies owned by us insuring the officer’s life, and to $15,000 for out-placement, interim office and related expenses. Obligations of Executive Officers Under the employment agreements, each officer agreed not to disclose, except as required by law, any confidential information relating to our business or customers, or use any confidential information in any manner adverse to us. In addition, each officer has agreed that for 18 months following the officer’s employment with us, the officer will not be employed by, or act as a director or officer of, any business engaged in banking within a 50-mile radius of any city in which at any time during the 18-month period we or the Bank has a branch or other office. Change in Control Agreements We have entered into a change in control agreement with each of our executive officers. If the officer's employment is terminated without Cause (as defined in the employment agreement) or if the officer terminates employment for Good Reason (as defined in the employment agreement), in each case within 24 months after a "change in control," the officer will receive a lump sum payment within 15 days after the termination. The amount of the lump sum payment is: (i) $500,000 for Mr. Kaminski; (ii) $350,000 for each of Mr. Reitsma and Mr. Christmas; and (iii) $250,000 for each of Mr. Hoover and Mr. Worthington. This amount is paid in addition to any other payments and benefits under the officer's employment agreement. If the officer is a "specified employee" within the meaning of Section 409A of the Internal Revenue Code, payment is delayed until the first business day of the seventh month after the date on which termination of employment occurs. A "change in control" is defined as (a) a change in ownership of more than 50% of the total fair market value or total voting power of Mercantile or the Bank; (b) a change in effective control, which includes (i) an acquisition by a person of 30% or more of the total voting power of the stock of Mercantile or the Bank; or (ii) a majority of the members of the Board of Directors of Mercantile or the Bank is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors prior to the date of the appointment or election; or (c) an acquisition by a person of assets of Mercantile or the Bank with a total gross fair market value of more than 40% of the total gross fair market value of all assets of Mercantile or the Bank immediately prior to the acquisition. Rights Under the Stock Incentive Plan of 2020 In general, stock options granted under the Stock Incentive Plan of 2020 that are vested at the time employment terminates may be exercised by the executive officer within three months after termination of employment. However, if employment terminates due to death or disability, stock options become 100% vested and may be exercised within 12 months after the date of termination, but not later than the expiration date of the option. In addition, the Stock Incentive Plan of 2020 provides that all outstanding options granted under the plan are forfeited if an officer’s employment is terminated for Cause, whether or not the options are vested.
Nonqualified Deferred Compensation For 2023
If an executive officer terminates employment due to death, disability or retirement at or after age 65, then restricted stock granted to the officer under the Stock Incentive Plan of 2020 will be 100% vested. If we terminate the employment of an executive officer other than for Cause, or if the officer retires at or after age 62, but before age 65, with 5 or more years of service with us, restricted stock granted to the officer under the plan will be partially vested. The number of shares that will be vested is equal to the number of shares granted to the executive officer multiplied by the number of months that have elapsed since the grant date divided by the number of months in the vesting period. Our Compensation Committee has discretion to accelerate the vesting of restricted stock. Rights Under the Stock Incentive Plan of 2023 In general, stock options granted under the Stock Incentive Plan of 2023 that are vested at the time employment terminates may be exercised by the executive officer within three months after termination of employment. However, if employment terminates due to death or disability, stock options become 100% vested and may be exercised within 12 months after the date of termination, but not later than the expiration date of the option. In addition, the Stock Incentive Plan of 2023 provides that all outstanding options granted under the plan are forfeited if an officer’s employment is terminated for Cause, whether or not the options are vested. If an executive officer terminates employment due to death, disability or retirement at or after age 65, then restricted stock granted to the officer under the Stock Incentive Plan of 2023 will be 100% vested. If we terminate the employment of an executive officer other than for Cause, or if the officer retires at or after age 62, but before age 65, with 5 or more years of service with us, restricted stock granted to the officer under the plan will be partially vested. The number of shares that will be vested is equal to the number of shares granted to the executive officer multiplied by the number of months that have elapsed since the grant date divided by the number of months in the vesting period. Our Compensation Committee has discretion to accelerate the vesting of restricted stock. Distribution from the Deferred Compensation Plan Each executive officer will receive a distribution of the executive officer’s account under the deferred compensation plan upon termination of employment. Distributions will generally be delayed for six months after the termination of employment, to the extent required by Section 409A of the Internal Revenue Code. However, if employment is terminated due to Cause, or if an executive officer is subject to a final removal or prohibition order issued by a federal banking agency, then the executive officer will only receive a distribution of the officer’s own deferrals, without any interest credits. Table of Potential Payments Upon Termination of Employment The following tables provide information regarding compensation and benefits payable to our executive officers under their respective employment agreements, Stock Incentive Plan of 2020 or the Stock Incentive Plan of 2023 upon termination of their employment. The amounts shown assume that termination of employment was effective as of December 29, 2023, the last business day of our 2023 fiscal year, and include estimates of the amounts that would be paid based on the officer’s 2023 base salary. The actual amounts would only be determined upon an officer’s termination of employment. The value of restricted stock that would have become vested due to termination without “Cause,” retirement, death or disability is based on the closing stock price of $40.38 on December 29, 2023.
Nonqualified Deferred Compensation For 2023
| | During Employment Period | | | After Employment | | | Name | Termination Without Cause or for Good Reason ($)(1) | Termination Due to Death ($) | Termination Due to Disability ($)(5) | Period and Before Age 65, Termination Without Cause or Due to Base Salary Reduction ($)(6) | Retirement ($)(7) | | Robert B. Kaminski, Jr. | 3,198,876 | 3,245,084(2) | 4,224,561 | 1,701,776 | 2,045,085 | | Raymond E. Reitsma | 2,560,049 | 2,554,024(3) | 3,273,118 | 1,185,058 | 1,452,024 | | Charles E. Christmas | 1,922,772 | 2,175,482(3) | 2,656,826 | 1,027,772 | 1,075,521 | | Brett E. Hoover | 940,608 | 1,279,995(4) | 1,281,530 | 365,608 | 279,995 | | Robert T. Worthington | 557,874 | 1,409,857(4) | 843,141 | 540,074 | 409,897 |
Nonqualified Deferred Compensation For 2023
| (1) Includes (a) annual base salary through the end of 2026 of $1,997,100 for Mr. Kaminski, $1,725,000 for Mr. Reitsma, and $1,245,000 for Mr. Christmas, and $825,000 for Mr. Hoover, and through the end of 2024 of $267,800 for Mr. Worthington; (b) life, disability and medical insurance premiums for 18 months for Mr. Kaminski, $36,689, Mr. Reitsma, $39,693, Mr. Christmas, $41,267, Mr. Hoover, $26,527 and Mr. Worthington, $2,464; (c) out-placement, office and related expenses of $15,000 for each officer; and (d) the value of restricted shares that would have become vested due to termination without Cause, for Mr. Kaminski, $1,150,087, for Mr. Reitsma $780,356, for Mr. Christmas, $621,505, for Mr. Hoover, $74,081, and for Mr. Worthington $272,610, which value would not apply and should be subtracted in the case of a termination by the officer for Good Reason. |
Nonqualified Deferred Compensation For 2023
| (2) Includes payment of death benefit from us of $300,000, and from the applicable insurance companies, supplemental life insurance proceeds of $300,000 and group term life insurance proceeds of $600,000, and the value of restricted shares that would have become vested due to death of $2,045,084 for Mr. Kaminski. |
Nonqualified Deferred Compensation For 2023
| (3) Includes payment of death benefit from us of $200,000, and from the applicable insurance companies, supplemental life insurance proceeds of $300,000 and group term life insurance proceeds of $600,000, and the value of restricted shares that would have become vested due to death of $1,454,024 for Mr. Reitsma and $1,075,482 for Mr. Christmas. |
Nonqualified Deferred Compensation For 2023
| (4) Includes payment of death benefit from us of $100,000 and from the applicable insurance companies, supplemental life insurance proceeds of $300,000 and group term life insurance proceeds of $600,000, and the value of restricted shares that would have become vested due to death of $279,995 for Mr. Hoover and $409,857 for Mr. Worthington. |
Nonqualified Deferred Compensation For 2023
| (5) Includes (a) annual base salary through the end of 2026 for Mr. Kaminski, $1,902,100, Mr. Reitsma, $1,484,784, Mr. Christmas, $1,184,763, and Mr. Hoover, $660,000, and through the end of 2024, for Mr. Worthington of $260,000; (b) life, disability and medical insurance premiums until age 65 for Mr. Kaminski, $73,377 (calculated at $24,459 annually), Mr. Reitsma, $132,310 (calculated at $22,968 annually), Mr. Christmas, $192,581 (calculated at $27,512 annually), Mr. Hoover, $194,535 (calculated at $17,685 annually) and Mr. Worthington, $26,284 (calculated at $1,643 annually); and (c) the value of restricted shares that would have become vested due to disability, for Mr. Kaminski, $2,045,084, for Mr. Reitsma, $1,452,024, for Mr. Christmas, $1,075,482, for Mr. Hoover, $279,995, and for Mr. Worthington, $409,857. In addition, the executive officers would receive long term disability benefits from the applicable insurance companies for as long as the officer is disabled up to age 65, in the following annual amounts, for Mr. Kaminski, $204,000, Mr. Reitsma, $204,000, Mr. Christmas, $204,000, Mr. Hoover, $147,000, and Mr. Worthington, $147,000. If the disability was catastrophic as defined in the disability insurance policies, the annual disability benefits in the prior sentence would be about 22% to 41% more, depending on the executive officer. |
Nonqualified Deferred Compensation For 2023
| (6) Includes (a) for Mr. Kaminski, $500,000, for Mr. Reitsma and Mr. Christmas, $350,000, and for Mr. Hoover and Mr. Worthington, $250,000 in lieu of base salary; (b) life, disability and medical insurance premiums for 18 months for Mr. Kaminski, $36,689, Mr. Reitsma, $39,693, Mr. Christmas, $41,267, Mr. Hoover, $26,527, and Mr. Worthington, $2,464; (c) out-placement, office and related expenses of $15,000 for each officer; and (d) the value of restricted shares that would have become vested due to termination without Cause, for Mr. Kaminski, $1,150,087, for Mr. Reitsma, $780,365, for Mr. Christmas, $621,505, for Mr. Hoover, $74,081, and for Mr. Worthington, $272,610, which value would not apply and should be subtracted in the case of a termination by the officer because of a reduction in the officer’s base salary. The amounts are calculated as though the employment period had ended before December 31, 2023. |
Nonqualified Deferred Compensation For 2023
| (7) Includes the value of restricted shares that would have become vested at retirement. The amounts in the table are calculated as though the officer had reached 65 years of age as of December 31, 2023. If the officer had retired and had reached age 62 but was not yet 65 as of December 31, 2023 and had five or more years of service with us, the value of restricted stock that would have vested would be for Mr. Kaminski, $1,150,087, for Mr. Reitsma, $780,356, for Mr. Christmas, $621,505, for Mr. Hoover $74,081 and for Mr. Worthington, $272,610. |
Nonqualified Deferred Compensation For 2023
Change in Control If a change in control of Mercantile or the Bank occurs and the employment of an executive officer is terminated without Cause or the officer terminates employment for Good Reason within 24 months after the change in control, the officer will receive a lump sum payment in addition to severance benefits under the employment agreement. Under each of the Stock Incentive Plan of 2020 and the Stock Incentive Plan of 2023, stock options and restricted stock awards may be assumed or a substitute award may be granted in connection with a change in control of Mercantile. In such event, the executive officer will become 100% vested if, within one year after the change in control, the officer's employment is terminated without Cause or due to death or disability, or if the officer terminates employment for Good Reason. If the stock options and restricted stock awards are not assumed or a substitute award granted, then unless the Compensation Committee prescribes an economically equivalent alternative, shares of restricted stock and stock options will be 100% vested. The awards will be cancelled immediately prior to the change in control, with the executive officer receiving a payment equal to the per share consideration paid to the shareholders in connection with the change in control transaction minus, in the case of stock options, the exercise price per share. A “change in control” is defined in each of the Stock Incentive Plan of 2020 and the Stock Incentive Plan of 2023 as (a) the failure of the continuing directors to constitute a majority of the Board of Directors; (b) the acquisition by any person of ownership of 30% or more of the outstanding common stock of Mercantile; (c) a reorganization, merger or consolidation after which the Mercantile shareholders do not own at least 50% of the value and voting power of the outstanding capital stock of the entity surviving the transaction; (d) a liquidation or dissolution of Mercantile, or a sale of all or substantially all of its assets; or (e) any other change in control transaction that is reportable to the SEC under Item 6(e) of Schedule 14A of Regulation 14A issued under the Securities Exchange Act of 1934. Each executive officer will receive a distribution of the executive officer’s account under the deferred compensation plan if employment terminates within 12 months after a change in control. The value of each officer’s account as of December 31, 2023, is shown above in the table under the heading “Nonqualified Deferred Compensation For 2023.” Potential Payments Upon a Change in Control The following table provides information regarding the value of benefits that would be provided to our executive officers in the event of a change in control of Mercantile. A lump sum cash payment would be made pursuant to the terms of the officer's change in control agreement assuming there was both a change in control and a termination without Cause or a Good Reason termination on December 31, 2023. The cash payments shown in the table below are in addition to severance payments that would be paid to the officer under their change in control or employment agreement in the event of a termination without Cause or a Good Reason termination during the employment period. Under our Stock Incentive Plan of 2020 and our Stock Incentive Plan of 2023, there are provisions regarding a change in control. The amounts shown assume that the change in control occurred as of December 29, 2023, the last business day of our 2023 fiscal year, include estimates of the value of restricted stock that would be vested upon a change in control and reflect that incentive awards were not assumed or substituted by an acquiring company. The actual amounts would only be determined upon a change in control.
Nonqualified Deferred Compensation For 2023
| | Termination Without Cause or Good Reason Termination After a Change | Accelerated Vesting Upon Change in Control | | | Name | in Control ($) | Stock Options ($) | Restricted Stock ($)(6) | | Robert B. Kaminski, Jr. | 500,000 | — | 2,045,085(1) | | Raymond E. Reitsma | 350,000 | — | 1,452,024 (2) | | Charles E. Christmas | 350,000 | — | 1,075,521 (3) | | Brett E. Hoover | 250,000 | — | 279,995 (4) | | Robert T. Worthington | 250,000 | — | 409,897 (5) |
Nonqualified Deferred Compensation For 2023
| (1) Consisting of 50,646 shares of performance-based restricted stock that would have vested for Mr. Kaminski at the adjusted target award level. |
Nonqualified Deferred Compensation For 2023
| (2) Consisting of 35,959 shares of performance-based restricted stock that would have vested for Mr. Reitsma at the adjusted target award level. |
Nonqualified Deferred Compensation For 2023
| (3) Consisting of 26,635 shares of performance-based restricted stock that would have vested for Mr. Christmas at the adjusted target award level. |
Nonqualified Deferred Compensation For 2023
| (4) Consisting of 2,734 shares of performance-based restricted stock that would have vested for Mr. Hoover at the adjusted target award level, plus 4,200 shares of restricted stock subject to time-based vesting. |
Nonqualified Deferred Compensation For 2023
| (5) Consisting of 10,151 shares of performance-based restricted stock that would have vested for Mr. Worthington at the adjusted target award level. |
Nonqualified Deferred Compensation For 2023
| (6) Based on the closing stock price for our common stock of $40.38 per share as of December 29, 2023. |
Nonqualified Deferred Compensation For 2023
| Director Compensation for 2023 |
Nonqualified Deferred Compensation For 2023
The following table provides information about the compensation of our directors for the year ended December 31, 2023.
Nonqualified Deferred Compensation For 2023
| Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | David M. Cassard | 35,900 | 35,892 | — | — | — | — | 71,792 | | Michael S. Davenport | 31,200 | 31,190 | — | — | — | — | 62,390 | | Michelle L. Eldridge | 34,300 | 34,284 | — | — | — | — | 68,584 | | Jeff A. Gardner(2) | 8,163 | — | — | — | — | — | 8,163 | | Michael H. Price | 45,150 | 45,146 | — | — | — | — | 90,296 | | David B. Ramaker | 32,025 | 32,646 | — | — | — | — | 64,671 | | Amy L. Sparks | 22,351 | 26,647 | — | — | — | — | 48,998 |
Nonqualified Deferred Compensation For 2023
| (1) The compensation of our Chief Executive Officer, Mr. Kaminski, and our Executive Vice President, Mr. Reitsma, have been omitted from this table because they received no special compensation for serving on our Board of Directors. The compensation of Mr. Kaminski and Mr. Reitsma is included in the Summary Compensation Table. |
Nonqualified Deferred Compensation For 2023
| (2) Each non-employee director who was serving on May 25, 2023, received a stock award on June 1, 2023, in payment of 50% of such director's annual retainer fee. Mr. Gardner retired from the Board on March 31, 2023, and therefore, did not receive any stock awards. |
Nonqualified Deferred Compensation For 2023
| (3) No option awards were made to our non-employee directors during 2023, and no non-employee director held any unexercised options as of December 31, 2023. |
Nonqualified Deferred Compensation For 2023
Compensation Arrangements for Non-employee Directors The Compensation Committee of our Board of Directors reviews director compensation at least annually and recommends to our Board of Directors for approval any changes that the Compensation Committee deems appropriate. Beginning in 2018, we based our director compensation on a single retainer figure and discontinued the use of meeting fees from prior years. The retainer fee was higher for each director who served as Chairman of the Board, Chairperson of our Audit Committee, Compensation Committee or Governance and Nominating Committee, or Executive Session Facilitator, as reflected in the chart below. One-half (50%) of the retainer value was paid in shares of Mercantile common stock as of the annual meeting date, with the share count calculated based on the closing stock price on the day of issuance. One-half (50%) of the retainer value was paid in cash, with payments divided into equal installments payable at the end of each calendar quarter. Directors who fail to meet an attendance threshold of 75% of scheduled board and committee meetings would not receive their fourth quarter cash payment. The annual retainer fee values through December 31, 2023, and as of January 1, 2024, are as follows:
Nonqualified Deferred Compensation For 2023
| | Retainer Value | | | | Until December 31, 2023 | As of January 1, 2024 | | Chairman of the Board | $90,300 | $90,300 | | Chair of the Audit Committee | $71,800 | $71,800 | | Chair of the Compensation Committee | $68,600 | $68,600 | | Chair of the Governance and Nominating Committee | $65,300 | $65,300 | | Executive Session Facilitator | $2,100 | $2,100 | | Non-Chair Directors | $60,300 | $60,300 |
Nonqualified Deferred Compensation For 2023
Under the Bank’s deferred compensation plan for non-employee directors, Mercantile directors who are also directors of the Bank may elect to defer the cash portion of their annual retainer until they are no longer serving on the Board or until specific dates that they select. Directors are eligible to receive stock-based awards under the Stock Incentive Plan of 2023. Deferred Compensation Plan Directors are eligible to participate in the Bank’s non-qualified deferred compensation plan. Directors who participate in the plan may elect to defer up to 100% of their annual cash retainer. Under the plan, the amount of any director’s fees that are deferred is credited with interest at a rate equal to the prime rate as published in the Wall Street Journal, credited on a monthly basis. The plan provides that the Bank will pay to each director, from the director’s deferred compensation account, a lump sum payment, or installment payments, whichever is elected, after the director’s term of office as a director ends. If installment payments are elected, the maximum payment period is ten years. In the event that a director dies before their term of office ends, the Bank will distribute the payments to the director’s designated beneficiary in a lump sum, or installments, if installments were elected. If death occurs during the time that payments are being made, the Bank will distribute the remaining payments to the director’s designated beneficiary at the same time and in the same amounts that would have been distributed if the director had not died. The plan is subject to Section 409A of the Internal Revenue Code, which specifies requirements that non-qualified deferred compensation plans must meet in order to avoid adverse tax consequences for participants.
Nonqualified Deferred Compensation For 2023
| CEO Pay Ratio |
Nonqualified Deferred Compensation For 2023
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 Robert B. Kaminski, Jr., our Chief Executive Officer (“CEO”). For 2023, our last completed fiscal year:
Nonqualified Deferred Compensation For 2023
| ● | The annual total compensation of the employee identified at the median of our Company (other than our CEO) was $63,298; and |
Nonqualified Deferred Compensation For 2023
| ● | The annual total compensation of our CEO was $1,477,989. |
Nonqualified Deferred Compensation For 2023
Based on this information, for 2023, the ratio of the annual total compensation of Mr. Kaminski, our CEO, to the annual total compensation of our median employee was estimated to be 23.35 to 1. The pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Nonqualified Deferred Compensation For 2023
| Pay Versus Performance |
Nonqualified Deferred Compensation For 2023
In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing the following disclosures regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO named executive officers (“Non-PEO NEOs”) and Company performance for the fiscal years listed below. We have identified Return on Equity (“ROE”) as our Company-Selected Measure (“CSM”). In our view, ROE represents the most important financial performance measure (not otherwise required to be disclosed in the table) used to link “Compensation Actually Paid” to our NEOs for the 2023 fiscal year to company performance. We chose ROE as our Company-Selected Measure for evaluating pay versus performance because it is a key metric in our 2023 executive officer bonus plan as well as under the performance-based restricted stock grants made in 2023. See Compensation Discussion and Analysis—Bonus Plan for 2023 on page 31 and Compensation Discussion and Analysis – Grant of Performance-Based Restricted Stock for the 2024-2026 Performance Period on page 36 for a discussion of the metrics used by the Compensation Committee to evaluate performance. Pay Versus Performance Table
Nonqualified Deferred Compensation For 2023
| | | | | | Value of initial fixed $100 investment based on: | | | | | | Summary compensation table total for PEO (1) | Compensation actually paid to PEO (2)(3) | Average summary compensation table total for non-PEO named executive officers (1) | Average compensation actually paid to non-PEO named executive officers (2)(3) | Total shareholder return | Peer group total shareholder return(4) | Net income | Return on | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | equity | | 2023 | $1,477,989 | $1,789,395 | $694,860 | $812,860 | 173.48 | 131.57 | $82,217,000 | 17.24% | | 2022 | $1,430,026 | $1,679,446 | $558,287 | $605,716 | 116.19 | 109.23 | $61,063,000 | 14.07% | | 2021 | $1,208,919 | $2,033,701 | $608,292 | $1,021,656 | 117.18 | 138.97 | $59,021,000 | 13.11% | | 2020 | $1,087,367 | $645,575 | $609,392 | $490,267 | 87.59 | 100.46 | $44,138,000 | 10.32% |
Nonqualified Deferred Compensation For 2023
| (1) Robert B. Kaminski, Jr. was our PEO for each year presented. The non-PEO NEOs for 2022 and 2021 are Raymond E. Reitsma, Charles E. Christmas, Lonna L. Wiersma and Robert T. Worthington. The non-PEO NEOs for 2023 are Raymond E. Reitsma, Charles E. Christmas, Brett E. Hoover, and Robert T. Worthington. Ms. Wiersma retired on March 4, 2022. |
Nonqualified Deferred Compensation For 2023
| (2) Compensation Actually Paid amounts shown have been calculated in accordance with Item 402(v) of Regulation 402(v) of Regulation S-K and do not reflect compensation actually earned, realized or received by the NEOs. |
Nonqualified Deferred Compensation For 2023
| (3) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. For each NEO, we have subtracted the totals from the Stock Awards column set forth in the Summary Compensation Table. The equity value adjustments for each applicable year are derived from the following tables. |
Nonqualified Deferred Compensation For 2023
| (4) The peer group TSR set forth in this table utilizes the KBW Nasdaq Bank Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2023. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the KBW Nasdaq Bank Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
Nonqualified Deferred Compensation For 2023
| Year | Year-End Fair Value of Equity Granted During Year That Remained Unvested as of Last Day of Year for PEO ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for PEO ($) | Vesting Date Fair Value of Equity Awards Granted During Year that Vested During Year for PEO ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for PEO ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for PEO ($) | Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for PEO ($) | Total Inclusion of Equity Values for PEO ($) | | 2023 | 349,973 | 289,654 | - | 17,452 | - | 56,252 | 713,331 | | 2022 | 381,873 | 156,752 | - | 31,830 | - | 45,098 | 615,553 | | 2021 | 351,106 | 802,132 | - | - | - | 20,244 | 1,173,482 | | 2020 | 287,975 | (402,776) | - | (64,020) | - | 22,460 | (156,361) |
Nonqualified Deferred Compensation For 2023
| Year | Average Year-End Fair Value of Equity Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO ($) | Average Vesting Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO ($) | Average Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for Non-PEO ($) | Total Average Inclusion of Equity Values for Non-PEO ($) | | 2023 | 167,294 | 108,863 | - | 8,033 | - | 21,488 | 305,678 | | 2022 | 123,089 | 41,682 | - | 18,927 | (35,626) | 17,372 | 165,444 | | 2021 | 111,045 | 402,580 | - | - | - | 10,024 | 523,649 | | 2020 | 140,578 | (93,241) | - | (39,285) | - | 12,160 | 20,212 |
Nonqualified Deferred Compensation For 2023
Relationship Between PEO and Other NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and the Company’s cumulative TSR as well as TSR relative to the KBW Nasdaq Bank Index, over the four most recently completed fiscal years. Relationship Between PEO and Other NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and our net income during the three most recently completed fiscal years. Relationship Between PEO and Other NEO Compensation Actually Paid and Return on Equity (”ROE”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and our ROE during the three most recently completed fiscal years. Tabular List of Most Important Performance Measures The following table presents the financial performance measures that the Company considers to be the most important in linking Compensation Actually Paid to our PEO and other NEOs for 2023 to Company performance. The measures in this table are not ranked.
Nonqualified Deferred Compensation For 2023
| Earnings per share | | Level of non-performing assets | | Net interest margin | | Net revenue | | Efficiency ratio | | Return on assets | | Return on equity |
Nonqualified Deferred Compensation For 2023
| AUDIT COMMITTEE MATTERS |