Proxy Statement (Form DEF 14A)
UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to § 240.14a-12 |
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Payment of Filing Fee (Check all boxes that apply):
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No fee required. |
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Fee paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
Phone 309.736.3584
Fax 309.736.3149
www.qcrh.com
Dear Stockholder:
On behalf of the Board of Directors and management of
This year we are again using the
There are a number of proposals to be considered at the 2025 Annual Meeting. Our stockholders will be asked to: (i) elect three persons to serve as Class II directors; (ii) approve, in a non-binding, advisory vote, the compensation of certain executive officers, which is referred to as a "say-on-pay" vote; and (iii) ratify the appointment of
We recommend that you vote your shares "FOR" each of the director nominees and "FOR" all of the other proposals presented at the 2025 Annual Meeting.
Regardless of whether you plan to attend the 2025 Annual Meeting, you should vote by following the instructions provided on the Notice as soon as possible. This will assure that your shares are represented at the 2025 Annual Meeting.
| Very truly yours, | |
| Chair of the Board | Chief Executive Officer |
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS |
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TO BE HELD |
Phone 309.736.3584 |
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Fax 309.736.3149 |
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To the Stockholders of
The annual meeting of stockholders of
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to elect three Class II directors to serve until the regular annual meeting of stockholders in 2028 and until their successors are elected and have qualified; |
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to approve, in a non-binding, advisory vote, the compensation of certain executive officers, which is referred to as a "say-on-pay" vote; |
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to ratify the appointment of |
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to transact such other business as may properly be brought before the meeting and any adjournments or postponements of the meeting. |
The Board of Directors has fixed the close of business on
By order of the Board of Directors,
Corporate Secretary
TABLE OF CONTENTS
PROXY STATEMENT
This proxy statement is being furnished in connection with the solicitation by the Board of Directors of
About the 2025 Annual Meeting
The following, presented in question and answer format, is information regarding the meeting and the voting process.
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Why did I receive access to the proxy materials? We have made the proxy materials available to you over the internet because at the close of business on The Board of Directors is asking you to give us your proxy. Giving us your proxy means that you authorize another person or persons to vote your shares of our common stock at the 2025 Annual Meeting in the manner you direct. If you vote using one of the methods described herein, you appoint the proxy holder as your representative at the 2025 Annual Meeting, who will vote your shares as you instruct, thereby assuring that your shares will be voted whether or not you attend the |
2025 Annual Meeting. Even if you plan to attend the 2025 Annual Meeting, you should vote by proxy in advance of the meeting in case your plans change. If you sign and retuyour proxy card or vote over the internet or by telephone and an issue comes up for a vote at the meeting that is not identified in the proxy materials, the proxy holder will vote your shares, pursuant to your proxy, in accordance with his or her judgment. Why did I receive a notice regarding the internet availability of proxy materials instead of paper copies of the proxy materials? We are using the |
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shares. This notice is not a proxy card and cannot be used to vote your shares. If you received a notice this year, you would not receive paper copies of the proxy materials unless you request the materials by following the instructions on the notice or on the website referred to on the notice. What matters will be voted on at the meeting? You are being asked to vote on: 1. the election of three Class II directors for a term expiring in 2028; If I am the record holder of my shares, how do I vote? You may vote by telephone, by internet or by mail by completing, signing, dating and mailing the proxy card you received in the mail, if you received paper copies of the proxy materials, or virtually during the meeting, as described further below. If you vote using one of the methods described above, your shares will be voted as you instruct. If you sign and retuyour proxy card or vote over the internet or by telephone without giving specific voting instructions, the shares represented by your proxy card will be voted "FOR" all director nominees named in this proxy statement, "FOR" the say-on-pay vote, and "FOR" the ratification of What will I need in order to attend the 2025 Annual Meeting virtually? You are entitled to attend the 2025 Annual Meeting if you were a stockholder of record as of the close of business on the Record Date. You may attend the 2025 Annual Meeting, vote and submit questions during the 2025 Annual Meeting by visiting www.virtualshareholdermeeting.com/QCRH2025 and using your unique 16‐digit control number to enter the meeting. Alternatively, you may simply log in as a guest, which does not require a control number, but you will not have the opportunity to vote your shares or ask questions. If you are not a |
stockholder of record but hold shares in the name of a broker or other fiduciary (or what is typically referred to as "street name"), you should follow the instructions for attending the 2025 Annual Meeting provided by your broker or other fiduciary. However, even if you plan to attend the 2025 Annual Meeting, we recommend that you vote your shares in advance so that your vote will be counted if you later decide not to attend the 2025 Annual Meeting. Online check-in will start approximately 15 minutes prior to the start of the meeting, which will begin promptly at 8:00 a.m CDT on How do I ask questions at the 2025 Annual Meeting? To submit a question at the 2025 Annual Meeting, you will need to log into the meeting using your 16-digit control number. If you would like to submit a question, click on the "Q&A" button at the bottom of the screen, enter your question in the text box and click on "Submit" at any time during the 2025 Annual Meeting. You will be able to input your question into the queue beginning 15 minutes prior to the start of the meeting. You may also provide questions ahead of the 2025 Annual Meeting by emailing If I am the record holder, how do I vote my shares? You may vote by completing, signing and returning your proxy card, by telephone by calling 1-800-690-6903 or over the internet at www.proxyvote.com. If you submit your vote by internet, you may incur costs, such as cable, |
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telephone and internet access charges. Votes submitted by telephone or internet must be received by If I hold shares in the name of a broker or fiduciary, who votes my shares? If you received access to these proxy materials from your broker or other fiduciary, your broker or fiduciary should have given you instructions for directing how that person or entity should vote your shares. It will then be your broker or fiduciary's responsibility to vote your shares for you in the manner you direct. Under the rules of various national and regional securities exchanges, brokers and fiduciaries generally may vote on routine matters, such as the ratification of the engagement of an independent registered public accounting firm, but may not vote on non-routine matters unless they have received voting instructions from the person for whom they are holding shares. The election of directors and the say-on-pay vote are considered non-routine matters, and, consequently, your broker or fiduciary will not have discretionary authority to vote your shares on these matters. If your broker or fiduciary does not receive instructions from you on how to vote on these matters, your broker or fiduciary will retuthe proxy card to us, indicating that he or she does not have the authority to vote on these matters. This is generally referred to as a "broker non-vote" and may affect the outcome of the voting on those matters. We therefore encourage you to provide directions to your broker or fiduciary as to how you want |
your shares voted on all matters to be brought before the 2025 Annual Meeting. You should do this by carefully following the instructions your broker or fiduciary gives you concerning its procedures. This ensures that your shares will be voted at the 2025 Annual Meeting. A number of banks and brokerage firms participate in a program that also permits stockholders to direct their vote by telephone or internet. If your shares are held in an account at such a bank or brokerage firm, you may vote your shares by telephone or internet by following the instructions on the voting form provided by the bank or brokerage firm. If you submit your vote by internet, you may incur costs, such as cable, telephone, and internet access charges. Voting your shares in this manner will not affect your right to vote during the 2025 Annual Meeting if you decide to attend the 2025 Annual Meeting following the instructions provided by your broker or fiduciary. What does it mean if I receive more than one notice card? It means that you have multiple holdings reflected in our stock transfer records or in accounts with brokers. To vote all of your shares by proxy, please follow the separate voting instructions that you received for the shares of common stock held in each of your different accounts. What if I change my mind after I vote? If you hold your shares in your own name, you may revoke your proxy and change your vote at any time before the polls close at the meeting. You may do this by: • signing another proxy with a later date and returning that proxy to us; |
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If you hold your shares in the name of your broker or through a fiduciary and desire to revoke your proxy, you will need to contact that person or entity to revoke your proxy. How many votes do we need to hold the 2025 Annual Meeting? A majority of the outstanding shares of voting stock of the corporation, represented in person or by proxy, shall constitute a quorum at the 2025 Annual Meeting. Shares are counted as present at the meeting if the stockholder either votes during the live webcast or has properly submitted a signed proxy card or other proxy. At the close of business on the Record Date, there were 16,919,285 shares of common stock outstanding. Therefore, at least 8,459,643 shares need to be present either by having logged in for the live webcast or by proxy at the 2025 Annual Meeting in order to hold the meeting and conduct business. What happens if a nominee is unable to stand for election? The Board of Directors may, by resolution, provide for a lesser number of directors or designate a substitute nominee. In the latter case, shares represented by proxies may be voted for a substitute nominee. Proxies cannot be voted for more than the number of nominees presented for election at the meeting. The Board of Directors has no reason to believe any nominee will be unable to stand for election. What options do I have in voting on each of the proposals? You may vote "for" or "withhold authority to vote for" each nominee for director. You may vote "for," "against" or "abstain" on each of the other proposals described in this proxy statement and on any other proposal that may properly be brought before the meeting. How many votes may I cast? You are entitled to cast one vote for each share of stock you owned on the Record Date. Stockholders do not have cumulative voting rights with respect to any proposal presented at the 2025 Annual Meeting. How many votes are needed for each proposal? Our directors are elected by a plurality of the votes of the shares present in person or by proxy and entitled to vote on the election of directors, and the three individuals receiving the highest number of votes cast "for" their election will be elected as |
Class II directors of Approval of the say-on-pay vote and ratification of the appointment of On all matters, broker non-votes will not be counted as entitled to vote but will count for purposes of determining whether or not a quorum is present. Because the say-on-pay vote is advisory only, the outcome of the vote will not be binding on the Board of Directors. Please remember that the election of directors and the say-on-pay vote are both considered to be non-routine matters. As a result, if your shares are held by a broker or other fiduciary, it cannot vote your shares on these matters unless it has received voting instructions from you. Where do I find the voting results of the meeting? If available, we will announce voting results during the webcast of the 2025 Annual Meeting. The voting results will also be disclosed on a Form 8-K that we will file with the Who bears the cost of soliciting proxies? We will bear the cost of soliciting proxies. In addition to solicitations by mail, officers, directors, or employees of What is householding? The |
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statements, proxy statements, prospectuses and other disclosure documents of a particular company that would otherwise be mailed in separate envelopes to more than one person at a shared address may be mailed as one copy in one envelope addressed to all holders at that address (i.e., "householding"). To conserve resources and reduce expenses, we consolidate materials under these rules when possible. However, because we are using the |
PROPOSAL 1:
ELECTION OF DIRECTORS
Nominees and Continuing Directors
Our directors are divided into three classes having staggered terms of three years. At the 2025 Annual Meeting, stockholders will be asked to elect three Class II directors for a term expiring at the annual meeting of stockholders in 2028. The Board of Directors has considered and nominated three of the incumbent directors to serve as Class II directors of
We have no knowledge that any of the nominees will refuse to or be unable to serve, but if any of the nominees becomes unavailable for election, the holders of the proxies reserve the right to substitute another person of their choice as a nominee when voting at the meeting. Set forth below is information concerning the nominees for election and for each of the other persons whose terms of office will continue after the meeting, including age, year first elected as a director of
Our Board of Directors recommends that you vote your shares "FOR" all of the nominees for director. Proxies properly signed and returned will be voted "FOR" each of the nominees for director unless you specify otherwise.
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Director Since |
Positions with |
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CLASS II (New Term Expires 2028) |
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2020 |
Director of |
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Mark. |
2004 |
Director of |
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2024 |
Director of |
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Director |
Positions with |
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CONTINUING DIRECTORS |
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CLASS III (Term Expires 2026) |
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2019 |
Vice Chair of the Board of Directors and Director of |
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2022 |
Director of |
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2020 |
Director of |
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2008 |
Chair of the Board of Directors and Director of |
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CLASS I (Term Expires 2027) |
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2018 |
Director of |
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2024 |
Director of |
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2015 |
Director of |
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2009 |
President and Chief Financial Officer and Director of |
All of our continuing directors and nominees will hold office for the terms indicated, or until their earlier death, resignation, removal, disqualification, or ineligibility due to exceeding age eligibility requirements (a person who has reached the age of 75 before the date of the 2025 Annual Meeting is not eligible for election to the Board of Directors), and until their respective successors are duly elected and qualified. Unless otherwise provided in their employment agreements, all of our executive officers hold office for a term of one year. Other than such employment agreements, there are no arrangements or understandings between any of the directors, executive officers, or any other person pursuant to which any of our directors or executive officers have been selected for their respective positions.
Qualifications of our Board Members and Nominees
Descriptions of each director's business experience during the past five years or more, as well as their qualifications to serve on the Board of Directors, are as follows:
Elizabeth "Libby"
Amy L.Reasner is President and attorney at
CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS
General
Generally, the Board of Directors oversees our business and monitors the performance of our management. In accordance with our corporate governance procedures, the Board of Directors does not involve itself in the day-to-day operations of
Directors Bates, Batten, Besong, Cobb, Field, Griesemer, Jacobs, Kilmer, Reasner, Sorensen, and Ziegler are "independent" according to the Nasdaq listing requirements, and the Board of Directors has determined that these independent directors do not have other relationships with us that prevent them from making objective, independent decisions. Directors Helling and Gipple are not "independent" because they also serve as executive officers of
During 2024, the Board of Directors had an Audit Committee, a Compensation Committee, a
In 2024, a total of four meetings were held by the Board of Directors of
Committees of the Board of Directors
The composition of the committees of the Board of Directors as of
Audit Committee. In 2024, the Audit Committee consisted of directors Bates, Batten (beginning in
The functions performed by the Audit Committee include, but are not limited to, the following:
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selecting our independent auditors and pre-approving all engagements and fee arrangements; |
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reviewing the independence of the independent auditors; |
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reviewing actions by management on recommendations of the independent auditors and internal auditors; |
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meeting with management, the internal auditors and the independent auditors to review the effectiveness of our system of internal control and internal audit procedures; |
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reviewing our earnings releases and reports filed with the |
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reviewing reports of bank regulatory agencies and monitoring management's compliance with recommendations contained in those reports. |
To promote the independence of the audit function, the Audit Committee consults separately and jointly with
Compensation Committee. In 2024, the Compensation Committee consisted of directors Field, Griesemer, Jacobs (Vice Chair),
Executive Committee. The Executive Committee consisted of directors Bates, Field (Vice Chair), Helling, Kilmer, Sorensen, and Ziegler (Chair), and did not meet in 2024. The Executive Committeeis authorized to act with the same authority as the Board of Directors between meetings of the Board of Directors, subject to certain limitations set forth in its charter. Although this authority allows the committee to act quickly on matters requiring urgency when the full Board of Directors is not available to meet, it is not intended to supplant the authority of the full Board of Directors. The responsibilities and functions of the Executive Committee are further described in its charter, which is available on our website at www.qcrh.com, under the heading "Governance Documents" in the "Governance" section.
Consideration of Director Candidates
Director Nominations and Qualifications. For the 2025 Annual Meeting, the
In carrying out its nominating function, the
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demonstrated integrity, ethics, reputation and character; |
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education, professional background and/or board experience relevant to the operation of |
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evidenced leadership and sound business judgment in his or her professional life; |
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well recognized and demonstrated leadership of service to his or her community; and |
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willingness and ability to devote sufficient time to carrying out the duties and responsibilities required of a board member. |
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Board of Directors and committee attendance and performance; |
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length of board service; |
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experience, skills and contributions that the existing director brings to the Board of Directors; |
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independence and any conflicts of interest; and |
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any significant change in the existing director's status, including the attributes considered for initial membership on the Board of Directors. |
Current members of the Board of Directors who satisfy the qualification criteria described above and who are willing to continue in service are considered for re-nomination. If any member of the Board of Directors does not wish to continue to service or if the
Board Diversity
The following chart provides certain demographic information about the 13 current directors. Diversity characteristics are based on information self-identified by each to
Code of Business Conduct and Ethics
We have a Code of Business Conduct and Ethics Policy in place that applies to all of our directors and employees, and all of these individuals receive annual training. The code sets forth the standard of ethics that we expect all of our directors and employees to follow, including our Chief Executive Officer and Chief Financial Officer. The code is posted on our website at www.qcrh.com, under the heading "Governance Documents" in the "Governance" section. We have satisfied and intend to continue to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding any amendment to or waiver of the code with respect to our Chief Executive Officer, Chief Financial Officer, and persons performing similar functions, by posting such information on our website.
Board Leadership Structure
Since
Currently,
To further enhance the role of the independent directors on our Board of Directors and consistent with the Nasdaq listing requirements, the Board of Directors' independent directors regularly meet without Messrs. Helling or Gipple in attendance. The independent directors met four times in 2024.
The Board's Role in Risk Oversight
While management is responsible for the day-to-day management of risks
In addition, other committees of the Board of Directors have been assigned oversight responsibility for specific areas of risk and risk management, and each committee considers risks within their areas of responsibility. The Audit Committee is responsible for monitoring our financial reporting process and system of internal controls, including controls related to risk management. The Compensation Committee is chiefly responsible for compensation-related risks. The members of the Compensation Committee discuss and review the key business and other risks we face and the relationship of those risks to certain compensation arrangements. This review is intended to comply with the
Environmental, Social, and Governance Matters
We believe in the responsible use of our resources with a focus on sustainability. We are committed to fostering a culture of inclusion for our clients and employees, to supporting the communities in which we live and work, to integrity in our business practices, and to strong corporate governance principles. With numerous programs and activities aligned with our ESG framework, we will continue to develop and enhance our efforts to ensure we are doing what is right for our customers, our employees, and our communities. Some of our 2024 highlights included:
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We completed construction on our new |
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Our annual employee engagement survey resulted in an engagement score of 78%, above the financial services |
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823 employees volunteered 25,895 hours, including 1,530 hours of financial literacy efforts, in the communities we serve. |
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We supported non-profit organizations and community development efforts with |
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We provided |
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We supported 1,115 non-profit organizations through our employee volunteer efforts, corporate charitable contributions, and community development financing. |
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Our Board of Directors includes 46% women and minorities, with women in several |
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Our Code of Business Conduct and Ethics Policy reinforces our commitment to ethical business practices, details the fundamental principles of ethical business behavior, and defines the responsibilities of all employees, officers, and directors. All employees and directors receive annual training on the code. |
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We maintain a comprehensive cyber and information security program to ensure the protection and proper disposal of company information and customers' non-public personal information. All employees receive annual training on information security, including specific training on identity theft, phishing, and social engineering. |
Share Ownership and Retention Guidelines
In order to better align the interests of the members of our Board of Directors and management with the interests of our stockholders, our Board of Directors adopted share ownership guidelines in 2008. These share ownership guidelines were amended in
Under these guidelines, non-employee directors of
We also have share ownership guidelines for our named executive officers ("NEOs"), who are set forth on page 23 of this proxy statement. The stock ownership guidelines vary by position and for Messrs. Helling and Gipple, in light of their service as board members of
Currently, each
Nominations of Directors. In accordance with our bylaws, a stockholder may nominate a director for election at an annual meeting of stockholders by delivering or mailing written notice of the nomination to our Corporate Secretary, at the above address, not less than 30 days nor more than 75 days prior to the date of the annual meeting, provided, however, that if we provide less than 40 days' notice or prior public disclosure of the date of the meeting, notice by the stockholder, to be timely, must be received no later than the close of business on the 10th day following the day on which notice of the date of the meeting was mailed or such public disclosure was made, whichever occurs first. The stockholder's notice of intention to nominate a director must include: (i) the name and address of record of the nominating stockholder; (ii) a representation that the stockholder is a record holder entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) the name, age, business and residence addresses and principal occupation or employment of each nominee; (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (v) any other information regarding each proposed nominee as would be required to comply with the rules and regulations set forth by the
Other Stockholder Proposals. To be considered for inclusion in our proxy statement and form of proxy for our 2026 annual meeting of stockholders, stockholder proposals must be received by our Corporate Secretary, at the above address, no later than
In accordance with our Bylaws, for proposals to be brought by a stockholder at an annual meeting, the stockholder must file a written notice of the proposal to our Corporate Secretary, at the above address, not less than 30 days nor more than 75 days prior to the date of the annual meeting, provided, however, that if we provide less than 40 days' notice of the meeting, notice by the stockholder, to be timely, must be delivered no later than the close of business on the 10th day following the day on which notice of the date on which the notice of the meeting was first mailed to stockholders. The notice must set forth: (i) a brief description of each proposal and the reasons for conducting such business at the meeting; (ii) the name and address of the proposing stockholder; (iii) the number of shares of the corporation's common stock beneficially owned by the stockholder on the date of the notice; and (iv) any financial or other interest of the stockholder in the proposal. Stockholder proposals submitted under these procedures will not be included in our proxy statement.
Our Executive Management Team
Our current executive officers, comprised of management officers and subsidiary bank leaders, are
In
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding our common stock beneficially owned on
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Amount and Nature of |
Percent |
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Directors and Named Executive Officers |
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8,251(2) |
* |
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15,203 |
* |
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9,543(3) |
* |
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42,344(4) |
* |
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13,717(5) |
* |
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68,240(6) |
* |
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81,631(7) |
* |
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112,283(8) |
* |
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7,230(9) |
* |
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113,086(10) |
* |
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8,143(11) |
* |
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6,243(12) |
* |
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33,130(13) |
* |
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9,278 |
* |
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51,044(14) |
* |
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29,668(15) |
* |
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All directors and executive officers as a group (19 persons) |
632,512(16) |
3.7% |
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5% Stockholders |
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1,403,594(17) |
8.3% |
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1,031,991(18) |
6.1% |
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1,195,052(19) |
7.1% |
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933,177(20) |
5.5% |
| * | Less than 1%. |
| (1) | Amounts reported include shares held directly, including certain shares subject to options, as well as shares held in retirement accounts, by certain members of the named individuals' families or held by trusts of which the named individual is a trustee or substantial beneficiary. Inclusion of shares shall not constitute an admission of beneficial ownership or voting or investment power over included shares. The nature of beneficial ownership for shares listed in this table is sole voting and investment power, except as set forth in the following footnotes. |
| (2) | Includes 5,364 shares held in a trust, over which |
| (3) | Includes 6,498 shares held in a trust, over which |
| (4) | Includes 4,924 shares held in a trust, over which |
| (5) | Includes 5,307 shares held in a trust, over which |
| (6) | Includes 12,861 shares subject to options which are presently exercisable or exercisable within 60 days of |
| (7) | Includes 23,598 shares held in an IRA account, and 24,443 shares held by |
| (8) | Includes 11,462 shares subject to options which are presently exercisable or exercisable within 60 days of |
| (9) | Includes 4,117 shares held in a trust, over which |
| (10) | Includes 14,438 shares held by |
| (11) | Includes 5,433 shares held by |
| (12) | Includes 2,127 shares in the 401(k) Plan, over which |
| (13) | Includes 6,825 shares held jointly and 21,975 shares held in a trust, over which |
| (14) | Includes 200 shares held by |
| (15) | Includes 29,668 shares in the 401(k) Plan, over which |
| (16) | Includes 17,962 shares subject to options which are presently exercisable or exercisable within 60 days of |
| (17) | Includes shares held by |
| (18) | Based solely on review of a Schedule 13F filed with the |
| (19) | Based solely on review of a Schedule 13G filed with the |
| (20) | Based solely on review of a Schedule 13F filed with the |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis ("CD&A") provides information about our compensation objectives and policies for our NEOs and explains the structure and rationale of the various compensation elements. For purposes of the CD&A and the compensation tables that follow, our NEOs in 2024 were
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Overview and Executive Summary. Background context and highlights provide context for the disclosures in the CD&A. |
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Objectives of Our Compensation Program. The objectives of our executive compensation program are based on our business model and the competitive pressures we face in attracting and retaining executive talent. We structure our executive compensation program to attract, motivate and retain outstanding executives who lead |
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Elements of Compensation. The key components of our compensation program are base salary, annual bonus and equity awards, with an emphasis on tying executive compensation to performance. |
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Compensation Process. Our executive compensation program is regularly reviewed internally and externally to ensure that proper risk-mitigating procedures and protocols are in place. |
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Analysis of 2024 Compensation. Decisions about 2024 compensation are analyzed and explained in the context of our compensation objectives and performance. |
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Regulatory Considerations. We describe the impact of guidance established by the |
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Insider Trading, Anti-Hedging, and Anti-Pledging Policies. |
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Clawback Policy. |
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Practices Related to the Grant of Certain Equity Awards. We describe our practices with respect to the timing of grants relating to stock options, stock appreciation rights, and similar option-like instruments in relation to our disclosure of nonpublic information. |
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Share Ownership and Retention Guidelines. Our NEOs maintain a significant equity interest in |
Overview and Executive Summary
Business Overview
Financial Overview
Overview of Our Executive Compensation Program
Say-on-Pay
At the
Objectives of Our Compensation Program
The goal of our compensation program is to attract, motivate and retain outstanding employees who provide excellent service to our clients while balancing short- and long-term performance to create sustained long-term value for our investors. Our compensation program for executives is based in large part on our business needs and challenges in creating stockholder value. To support the achievement of our business strategies and goals, we strive to:
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Pay for performance; |
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Tie equity compensation to long-term value creation for our stockholders; |
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Align executives' financial interests with those of our stockholders; |
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Support |
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Foster a team approach among top executives; |
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• |
Attract, retain, and align leaders capable of delivering superior business results; |
|
• |
Provide competitive cash compensation and benefit opportunities; |
|
• |
Adhere to the highest legal and ethical standards; and |
|
• |
Manage our compensation program in light of risks to the organization. |
Elements of Compensation
Our executive compensation program consists of several elements, each with an objective that fits into our overall compensation program. The following overview explains the structure and rationale of the elements of compensation used for 2024.
Base Salary
Cash salaries are intended to be competitive with the market and reflect the individual's experience, performance, responsibilities, and contribution to
Annual Cash Incentive Bonus
Annual cash incentive bonuses are an important piece of total compensation for our NEOs as they support and encourage the achievement of our business goals and strategies by tying a meaningful portion of cash compensation to financial results for the year as compared to internal and external standards. The Compensation Committee believes the NEOs should have a significant portion of their total compensation packages contingent on annual performance, and therefore a significant portion of compensation is made available through an annual cash incentive bonus program. Maximum bonus opportunities are capped to discourage both excessive risk-taking and to avoid a focus on maximizing short-term results at the expense of long-term soundness. In addition, net income in excess of 25% of budgeted net income is required for any bonuses to be paid to our NEOs.
Under the program, the Compensation Committee established measurable goals for each NEO at the beginning of 2024. These goals focus primarily on net income and other financial performance measures. Following the Compensation Committee's review of quantitative and qualitative analyses and calculations at the beginning of 2025, the Compensation Committee determined the amount of annual bonuses for the NEOs for 2024, based upon the attainment of goals established in early 2024.
Long-Term Stock Incentives
Equity compensation is the other key element of compensation for our NEOs. We use several types of long-term incentive awards to drive the creation of long-term value for our stockholders, to attract and retain executives capable of effectively executing our business strategies, and to structure compensation to account for the time horizons of risks. Our equity compensation practices support the achievement of many of our key compensation objectives, including:
|
• |
Tying pay to performance by linking compensation to stockholder value creation; |
|
• |
Aligning executives' interests with those of our stockholders; |
|
• |
Attracting executives committed to building long-term value for our stockholders, by including equity compensation as an element of competitive pay packages for executives; and |
|
• |
Retaining and rewarding executives for continued service, by maintaining multi-year vesting periods. |
Equity Incentive Plans.
The
Our stockholders approved the
The Equity Incentive Plans allow for accelerated vesting of outstanding awards held by participants, including our NEOs, in certain circumstances. Pursuant to the Equity Incentive Plans, unless provided otherwise in the agreements setting forth the terms of the award, vesting will accelerate upon a "change in control" of
Employee Stock Purchase Plan. The
Employee Insurance Bonus Plan. For each NEO other than
Retirement Benefits
Deferred Compensation
Non-Qualified Supplemental Executive Retirement Program.
Under their SERP agreements, Messrs. Helling and Gipple will receive a supplemental retirement benefit in an annual pre-tax amount equal to 2.5% for each year of credited full-time service prior to attainment of age 65 (not to exceed 40 years), multiplied by the executive's average annual base salary plus cash bonus for the three most recently completed plan years prior to retirement, subject to a maximum of 70% of average compensation. The retirement benefit will be reduced by any contributions made by
Under his SERP agreement,
These SERP benefits will generally be paid in 180 monthly installments. The SERP agreements also provide for the payment of a survivor's benefit to the executive's beneficiary upon the executive's death.
Non-Qualified Deferred Compensation Plan Agreements.
|
Deferred Compensation Plan Agreements |
|||
|
Executive(1) |
2024 Executive Deferrals |
2024 |
Interest Rate Floor and Cap |
|
|
|
|
8.0% - 10.0% |
|
|
|
|
6.0% - 12.0% |
|
|
|
|
4.0% - 8.0% |
|
|
|
|
4.0% - 8.0% |
|
(1) |
|
The participating executives will receive their existing account balances upon a termination in connection with a change in control. The agreements also provide for the payment of a survivor's benefit to the executive's beneficiary upon the executive's death. Consistent with Code requirements, the SERP and non-qualified deferred compensation plan agreements are "unfunded" general contractual obligations of
Deferred Income Plans. Stockholders approved the 1997 Deferred Income Plan and the 2005 Deferred Income Plan to enable directors and selected key officers of
Perquisites and Other Benefits
The NEOs participate in
Employment Agreements
We have employment agreements with each of our NEOs. We believe employment agreements help us recruit and retain executives with the experience, skills, knowledge, and background needed to achieve our business goals and strategy and also provide certain protections to
On
Further, on
The employment agreements for our NEOs for the year ending
Compensation Process
The Compensation Committee has broad discretion in overseeing our compensation program. It reviews each element of compensation for each of our NEOs at least once each year and makes a final determination regarding any adjustments to the current compensation structure and levels after considering a number of factors. When reviewing compensation, the Compensation Committee takes into account the scope of each NEO's responsibilities, performance and experience, as well as competitive compensation levels. During the annual review process, the Compensation Committee also reviews our full-year financial results against other banking organizations and reviews the structure of our compensation program relative to sound risk management.
The Committee's primary considerations when making executive compensation decisions are:
|
• |
Key financial measurements, which reflect our ultimate goal of value creation for our stockholders; |
|
• |
Strategic initiatives related to our business; |
|
• |
Achievement of specific operational goals relating to each executive's area of oversight; |
|
• |
Compensation of other |
|
• |
Compensation of peer group executives. |
Consulting Assistance
Under its charter, the Compensation Committee has the authority to retain its own compensation consultants. Since
Role of Executive Officers
As requested by the Compensation Committee, select members of management facilitate the Committee's consideration of compensation for our NEOs by providing information for the Committee's review.
Market pay levels and practices are one of many factors we consider in setting executive pay levels and designing the compensation program. Information on pay levels and practices is gathered for a group of publicly traded companies selected based on their business focus, scope and location of operations, size and other considerations. The Compensation Committee reviews and evaluates the membership of the peer group on an annual basis. For 2024, after substantial review and consideration, the Compensation Committee approved a peer group of 16 financial institutions listed below.
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MidWestOne |
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|
The companies in the peer group have a median asset size of 7.8 billion (as of
Analysis of 2024 Compensation
Consistent with our philosophy of linking compensation to performance, the compensation for our NEOs in 2024 was based, in part, on our business results in 2024. This section discusses the compensation actions that were taken in 2024 for our NEOs, as detailed below.
Base Salary
Salaries for our NEOs for 2024 and 2025 are as follows:
|
Executive |
2024 Salary |
2025 Salary |
Percentage Change |
|
|
|
|
- |
|
|
|
|
3.00% |
|
|
|
- |
- |
|
|
|
|
3.08% |
|
|
|
|
3.20% |
|
(1) |
|
|
(2) |
Effective on |
Annual Incentive Bonus
On an annual basis, the Compensation Committee approves targets applicable to annual incentive bonus awards for our NEOs. At the beginning of 2024, the Compensation Committee set threshold, target and maximum award opportunities as a percentage of salary for each of our NEOs based on that individual's position and competitive market data for similar positions. The 2024 awards for our NEOs were contingent primarily on performance relative to goals for net income and other financial performance measures and objectives aligned with those of
For 2024, threshold, target and maximum annual incentive bonus levels were as follows (stated as a percentage of base salary):
|
Executive |
Threshold |
Target |
Maximum |
|
|
45.0% |
90.0% |
135.0% |
|
|
40.0% |
80.0% |
120.0% |
|
|
25.0% |
50.0% |
75.0% |
|
|
25.0% |
50.0% |
75.0% |
|
|
22.5% |
45.0% |
67.5% |
|
Corporate Goals |
Goal Weight |
Threshold |
Target |
Maximum |
Actual |
|
|
60% |
|
|
|
|
|
|
20% |
1,664 |
2,080 |
2,704 |
2,748 |
|
|
20% |
1.00% |
.75% |
.50% |
.50% |
|
Corporate Goals |
Goal Weight |
Threshold |
Target |
Maximum |
Actual |
|
|
25% |
|
|
|
|
|
|
20% |
|
|
|
|
|
|
10% |
|
|
|
|
|
|
12.5% |
540 |
675 |
878 |
602 |
|
|
12.5% |
|
|
|
|
|
|
10% |
|
|
|
|
|
|
10% |
1.00% |
.75% |
.50% |
.18% |
|
Corporate Goals |
Goal Weight |
Threshold |
Target |
Maximum |
Actual |
|
|
25% |
|
|
|
|
|
|
15% |
1,664 |
2,080 |
2,704 |
2,748 |
Additionally, the Compensation Committee established the following individual goals for
|
Individual Goals |
Goal Weight |
Goal Description |
Goal Achievement |
|
Core Negotiation / Contract Completion |
20% |
Achievement of total cost of ownership improvement on new core platform contract |
Achieved |
|
TechOps Budget |
10% |
Meet expense and capital budget targets for the TechOps organization |
Achieved |
|
Project Delivery for Key Business Projects |
10% |
Successful timely delivery of prioritized enterprise projects |
Achieved |
|
Three-Year TechOps Strategic Plan |
10% |
Successful creation of three-year technology and security strategic plan |
Achieved |
|
Security and Controls Maturity |
10% |
Successful recruiting of a new Chief Security Officer |
Achieved |
|
Corporate Goals |
Goal Weight |
Threshold |
Target |
Maximum |
Actual |
|
|
25% |
|
|
|
|
|
|
20% |
|
|
|
|
|
|
10% |
|
|
|
|
|
|
12.5% |
200 |
250 |
325 |
311 |
|
|
12.5% |
|
|
|
|
|
|
10% |
|
|
|
|
|
|
10% |
1.00% |
.75% |
.50% |
0.51% |
|
(1) |
|
|
| (2) | Adjusted loan growth is a non-GAAP measurement. As calculated from our audited financial statements, adjusted loans are defined as total loans/leases receivable held for investment less those loans/leases generated by m2 |
|
| (3) | Core deposit growth is a non-GAAP measurement. As calculated from our audited financial statements, core deposits are defined as total deposits less time and brokered deposits accounts. |
After considering the weighting of all criteria and the resulting performance of
|
Executive |
Target Award |
Corporate Goals |
Individual Goals |
Actual Award |
|
|
90.0% |
135.0% |
- |
135.0% |
|
|
80.0% |
120.0% |
- |
120.0% |
|
|
50.0% |
62.8% |
- |
62.8% |
|
|
50.0% |
30.0% |
37.5% |
67.5% |
|
|
45.0% |
55.1% |
- |
55.1% |
Long-Term Stock Incentives
For 2024, the Compensation Committee targeted equity award values between 16% and 40% of salary for each NEO. The table below reflects the target awards and the actual grants awarded based upon the executive's performance in 2024. With the exception of
|
Executive |
2024 Performance-Based Equity Incentive Plan (Grant Value of Restricted Stock Unit Awards as a Percentage of Salary) |
|
|
2024 Target |
2024 Award |
|
|
|
40.0% |
60.0% |
|
|
35.0% |
52.5% |
|
|
30.0% |
37.7% |
|
|
16.0% |
19.6% |
|
(1) |
Under the terms of an addendum to |
Additionally, in
The Compensation Committee reviews talent retention on an ongoing basis and considers whether any additional incentive awards are necessary in order to ensure the retention of executives with strong performance who are key to our future success. Based on this review and consideration, in 2019, Messrs. Helling, Gipple, and Anderson received a one-time grant of performance awards in connection with entering their new employment agreements, with total fair market values, which assume maximum attainment, the probable outcome of such awards at the time of grant, summarized in the table below:
|
Named Executive Officer |
Intended Total Fair Market Value |
|
|
|
|
|
|
|
|
|
These performance awards are granted in annual tranches with several annual net income goals because this metric resonates strongly with our stockholders.
Regulatory Considerations
As a publicly traded bank holding company and financial institution,
The Compensation Committee believes that its regular, overall assessment of the compensation plans, program and arrangements established for the NEOs includes a sensible, responsible approach toward balancing risks and rewarding reasonable, but not necessarily easily attainable, goals. The Compensation Committee also believes that
When making decisions about executive compensation, in addition to the above, we also consider the impact of other regulatory provisions, including: Code Section 162(m), which may limit the tax deductibility of certain compensation; Code Section 409A, regarding nonqualified deferred compensation; and Code Sections 4999 and 280G, regarding excise taxes and deduction limitations on golden parachute payments made in connection with a change in control. We also consider how various elements of compensation will impact our financial results. For example, we consider the impact of
Insider Trading Policy
Anti-Hedging Policy
The insider trading policy includes provisions that prohibit all employees and directors from entering into hedging transactions involving
Anti-Pledging Policy
The insider trading policy also includes provisions that prohibit our directors and executive officers from pledging
Clawback Policy
In
Practice Related to the Grant of Certain Equity Awards
Share Ownership and Retention Guidelines
We believe our NEOs and nonemployee directors should have a significant equity interest in
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management, and, based on this review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and the
Compensation Committee:
Summary Compensation Table
The following table below sets forth information concerning the compensation paid to, awarded to, or earned by our NEOs for the years ended
|
|
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($)(1) |
Non-Equity Incentive Plan Compensation ($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(2) |
All Other Compensation ($)(3) |
Total ($) |
|
CEO of |
2024 2023 2022 |
|
- |
|
|
|
|
|
|
President and CFO |
2024 2023 2022 |
|
- |
|
|
|
|
|
|
CEO of |
2024 2023 2022 |
|
- |
|
|
|
|
|
|
EVP Chief Operating Officer (6) |
2024 |
|
- |
|
|
- |
|
|
|
CEO of |
2024 2023 2022 |
|
- |
|
|
- |
|
|
|
(1) |
Pursuant to |
|
(2) |
The amounts reflected in this column include both an increase in the actuarial present value of the executive's benefit under his SERP as well as "above-market earnings" under the deferred compensation arrangement. The amount of above-market earnings is determined in accordance with, and for purposes of, proxy disclosure rules only (generally earnings in excess of 120% of the applicable federal long-term rate). For 2024, the portion of the amount reflected that is attributable to above-market earnings for |
|
(3) |
"All Other Compensation" for the NEOs during 2024 is summarized below. |
|
|
Employer 401(k) Plan Contribution |
Tax Planning Reimbursement |
Car Allowance |
Employer Deferred Compensation Contribution |
Life Insurance Benefit |
Executive Health Physical |
Country Club Membership |
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
- |
|
|
|
- |
|
|
|
|
|
|
|
|
- |
- |
- |
- |
- |
- |
|
|
|
- |
|
|
|
- |
|
|
(4) |
Pursuant to the terms of the Addendum, all of |
|
|
Stock Awards (Without Modification Charge) |
Stock Awards (With Modification Charge) |
|
John. |
|
|
|
(5) |
Reflects the payment of |
|
(6) |
|
Grants of Plan-Based Awards
The following table provides information concerning the grants of plan-based awards made to our NEOs during 2024:
|
|
Grant Date |
Approval Date(1) |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) |
Estimated Future Payouts Under Equity Incentive Plan Awards(3) |
All Other Stock Awards: Number of Shares of Stock or Units |
Grant Date Fair Value of Stock and Option Awards |
||||
|
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
|||||
|
|
- |
- |
- |
- |
- |
- - |
- - |
- - |
3,797 - |
- |
|
|
- |
- - |
- - |
- - |
- - |
- - - |
752 - - |
- - - |
- 2,803 - |
- |
|
|
- |
- - - |
- - - |
- - - |
- - - |
- - - - |
602 - - - |
- - - - |
- 1,535 4,589 - |
- |
|
|
- |
- - |
- |
- |
- |
- - |
- - |
- - |
1,361 - |
- |
|
|
- |
- |
- |
- |
- |
- - |
- - |
- - |
769 - |
- |
|
(1) |
Reflects the date that the Compensation Committee approved each applicable award, when such date is different than the date listed for the applicable award in the "Grant Date" column. |
|
(2) |
The amounts set forth in the "Estimated Future Payouts Under Non-Equity Incentive Plan Awards" columns reflect the threshold, target and maximum payouts for performance under the annual cash incentive bonus program as described in the section titled "Annual Cash Incentive Bonus" in the CD&A. The amount earned by each NEO for 2024 performance is included in the Summary Compensation Table in the column titled "Non-Equity Incentive Plan Compensation." |
|
(3) |
The amounts set forth reflect 2024 tranches of performance awards to Messrs. Gipple and Anderson in connection with their employment agreements. The awards are described in the CD&A above under the heading "Long-Term Stock Incentives." |
|
(4) |
Reflects an award granted under the 2016 Equity Incentive Plan. |
|
(5) |
This amount represents the incremental fair value, computed in accordance with FASB Topic 718, resulting from the |
|
(6) |
Reflects an award granted under the 2024 Equity Incentive Plan. |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth the number of outstanding option and stock awards for each of our NEOs as of
|
Option Awards |
Stock Awards |
|||||||
|
|
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
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 ($)(1) |
Equity Incentive Plan Awards: Number of Shares, Units, or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(1) |
|
|
3,215 8,390 3,072 - - - - |
- - - - - - - |
- - - - |
- - - - |
- - - 1,218(2) 2,042(3) 3,222(4) 3,797(5) |
- - - |
- - - - - - - |
- - - - - - - |
|
|
8,857 8,590 4,271 - - - - - - |
- - - - - - - - - |
- - - - - - |
- - - - - - |
- - - 1,504(6) 989(2) 1,660(3) 2,395(4) 2,803(5) - |
- - - - |
- - - - - - - - 752(6) |
- - - - - - - - |
|
|
- - - - - |
- - - - - |
- - - - - |
- - - - - |
658(2) 884(3) 1,512(4) 1,535(5) - |
- |
- - - - 602(6) |
- - - - |
|
|
- - - - - |
- - - - - |
- - - - - |
- - - - - |
514(8) 852(9) 5,664(10) 1,448(11) 1,361(12) |
|
- - - - - |
- - - - - |
|
|
- - - - |
- - - - |
- - - - |
- - - - |
573(2) 466(3) 621(4) 769(5) |
|
- - - - |
- - - - |
|
(1) |
The market value of outstanding stock awards is based upon our closing stock price of |
|
(2) |
Unvested stock units were granted on |
|
(3) |
Unvested stock units were granted on |
|
(4) |
Unvested stock units were granted on |
|
(5) |
Unvested stock units were granted on |
|
(6) |
Unvested restricted stock units and performance stock units were granted on |
|
(7) |
As noted in footnote 4 of the Summary Compensation Table, all of |
|
(8) |
Unvested stock units were granted on |
|
(9) |
Unvested stock units were granted on |
|
(10) |
Unvested stock units were granted on |
|
(11) |
Unvested stock units were granted on |
|
(12) |
Unvested stock units were granted on |
Option Exercises and Stock Vested in 2024
The following table sets forth information concerning stock option exercises and vesting of stock awards for each of our NEOs during 2024:
|
Option Awards |
Stock Awards |
|||
|
|
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($)(1) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($)(2) |
|
|
11,612 |
|
4,626 |
|
|
|
6,791 |
|
4,436 |
|
|
|
- |
- |
2,911 |
|
|
|
- |
- |
4,148 |
|
|
|
- |
- |
1,015 |
|
|
(1) |
Reflects the value realized upon exercise of stock options, based on the difference between the market value of the shares acquired at the time of exercise and the exercise price. |
|
(2) |
Reflects the value of restricted stock realized on vesting, which was paid in cash for Messrs. Helling, Gipple, and Anderson. |
Pension Benefits
The following table sets forth information concerning each plan that provides for payments or other benefits at, following, or in connection with retirement to each of our NEOs:
Non-Qualified Supplemental Executive Retirement Plan
|
|
Plan |
Number of Years Credited Service (#) |
Present Value of Accumulated Benefit ($)(1) |
Payments During Last Fiscal Year ($) |
|
|
Supplemental Executive Retirement Plan(2) |
23 |
|
- |
|
|
Supplemental Executive Retirement Plan(2) |
24 |
|
- |
|
|
Supplemental Executive Retirement Plan(2) |
16 |
|
- |
|
|
- |
- |
- |
- |
|
|
- |
- |
- |
- |
|
(1) |
Each calendar year, |
|
(2) |
Information regarding each NEO's participation in the SERP can be found under the heading "Non-Qualified Supplemental Executive Retirement Program." |
The following table sets forth information concerning each NEO's account balance at
Non-Qualified Deferred Compensation
|
|
Executive Contributions in Last Fiscal Year(1) ($) |
Registrant Contributions in Last Fiscal Year(2) ($) |
Aggregate Earnings in Last Fiscal Year(3) ($) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at Fiscal Year End(4) ($) |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
- |
- |
- |
- |
|
|
|
|
|
- |
|
|
(1) |
All amounts included are reflected in the Summary Compensation Table under the "Salary" column. |
|
(2) |
All amounts included are reflected in the Summary Compensation Table under the "All Other Compensation" column. |
|
(3) |
Includes |
|
(4) |
Includes the following amounts that were previously reported as compensation to the NEOs in the Summary Compensation Table for years prior to 2024: |
Potential Payments upon Termination or Change in Control
The following table sets forth the estimated amount of compensation payable to each of our NEOs, as provided under the agreements and arrangements described in the CD&A, upon termination of such officer's employment in the event of (1) termination by
|
|
Benefit |
Involuntary Termination (not in connection with a Change in Control)(1) |
Involuntary Termination (in Connection with a Change in Control)(1) |
Disability |
Death |
|
Larry J. |
Salary |
|
|
|
- |
|
Helling |
Bonus |
- |
|
|
- |
|
Stock award acceleration |
- |
|
|
|
|
|
Health insurance |
|
|
- |
- |
|
|
Todd A. |
Salary |
|
|
|
- |
|
Gipple |
Bonus |
- |
|
|
- |
|
Stock award acceleration |
- |
|
|
|
|
|
Health insurance |
|
|
- |
- |
|
|
John H. |
Salary |
|
|
|
- |
|
Anderson |
Bonus |
- |
|
|
- |
|
Stock award acceleration |
- |
|
|
|
|
|
Health insurance |
|
|
- |
- |
|
|
Reba K. |
Salary |
|
|
|
- |
|
Winter |
Bonus |
|
|
|
- |
|
Stock award acceleration |
- |
|
|
|
|
|
Health insurance |
|
|
- |
- |
|
|
Monte C. |
Salary |
|
|
|
- |
|
McNew |
Bonus |
|
|
|
- |
|
Stock award acceleration |
- |
|
|
|
|
|
Health insurance |
|
|
- |
- |
|
(1) |
Involuntary Termination includes a termination by |
|
(2) |
In the event of disability during the employment term, payments based upon then current annual salary and the average annual bonus shall continue thereafter through the last day of the one (1) year period beginning on the date of disability, after which time employment shall terminate. Payments made in the event of disability shall be equal to 66-2/3% of salary and the average annual bonus, less any amounts received under short or long-term disability programs, as applicable. The above amounts do not reflect the offset of disability insurance benefits. |
|
(3) |
In the event of disability during the employment term, payments based upon then current annual salary and the average annual bonus shall continue thereafter through the last day of the one (1) year period beginning on the date of disability, after which time employment shall terminate. Payments made in the event of disability shall be equal to 60% of salary and the average annual bonus, less any amounts received under short or long-term disability programs, as applicable. The above amounts do not reflect the offset of disability insurance benefits. |
|
(4) |
In the event of disability during the employment term, payments based upon then current annual salary and the average annual bonus shall continue thereafter through the last day of the one (1) year period beginning on the date of disability, after which time employment shall terminate. Payments made in the event of disability shall be equal to 66% of salary and the average annual bonus, less any amounts received under short or long-term disability programs, as applicable. The above amounts do not reflect the offset of disability insurance benefits. |
|
(5) |
In the event of a change in control, all outstanding restricted stock and restricted stock unit awards shall become immediately and fully vested, exercisable and unrestricted, if they are not assumed by the resulting entity or if the executive is terminated by the resulting entity without cause or resigns for good reason. This represents the value of unvested stock awards on |
Mr.
Employment Agreement in effect on
The agreement also provides for severance benefits in the event the executive's employment is terminated other than for cause and other than as a result of the executive's death or disability, or if the employment is terminated by the executive for good reason ("Termination"). For a Termination during the term of the employment agreement that is not in connection with a change in control,
Transitional Employment Agreement. On
Mr.
Employment Agreement in effect on
The agreement also provides for severance benefits in the event of the executive's Termination. For a Termination during the term of the employment agreement that is not in connection with a change in control,
New Employment Agreement. On
The new agreement also provides for severance benefits in the event of the executive's Termination. For a Termination that is not in connection with a change in control,
Mr.
In
The agreement also provides for severance benefits in the event of the executive's Termination. For a Termination during the term of the employment agreement that is not in connection with a change in control,
On
Mr.
Upon
Ms.
In
Mr.
In
Equity Incentive Plans
Compensation Committee Interlocks and Insider Participation
During 2024, the Compensation Committee, which sets the salaries and compensation for our executive officers, was comprised solely of independent directors Field, Griesemer, Jacobs, Kilmer, Reasner (beginning in November) and Ziegler. None of these individuals was an officer or employee of
CEO Pay Ratio
As required by the
The median employee was identified from all full-time and part-time employees, excluding
In identifying the median employee, each employee's compensation was determined using 2024 W-2 compensation. Wages were annualized for our employees who did not work the entire calendar year.
Pay Versus Performance
In accordance with the rules adopted by the
|
Value of initial fixed |
||||||||||||||||||||||||||||||||
| Year |
Summary Compensation Table Total for CEO(1) |
Compensation Actually Paid to CEO(1)(2) |
Average Summary Compensation Table Total for Non-CEO NEOs(3) |
Average Compensation Actually Paid to Non-CEO NEOs(2)(3) |
Total |
Total Shareholder Return(4) |
Net Income (in thousands) | Adjusted Earnings Per Share(5) | ||||||||||||||||||||||||
|
2024 |
$ | 1,579,631 | $ | 1,609,228 | $ | 857,583 | (6) | $ | 965,847 | $ | 188 | $ | 132 | $ | 113,850 | $ | 7.03 | |||||||||||||||
|
2023 |
$ | 1,798,583 | $ | 1,342,391 | $ | 710,698 | $ | 682,704 | $ | 136 | $ | 111 | $ | 113,558 | $ | 6.82 | ||||||||||||||||
|
2022 |
$ | 1,855,117 | $ | 1,152,003 | $ | 797,011 | $ | 601,280 | $ | 115 | $ | 117 | $ | 99,066 | $ | 6.89 | ||||||||||||||||
|
2021 |
$ | 1,939,141 | $ | 1,458,808 | $ | 810,346 | $ | 856,847 | $ | 129 | $ | 117 | $ | 98,905 | $ | 6.37 | ||||||||||||||||
|
2020 |
$ | 2,032,092 | $ | 989,964 | $ | 928,529 | $ | 602,915 | $ | 91 | $ | 87 | $ | 60,582 | $ | 4.01 | ||||||||||||||||
|
(1) |
The CEO in 2024, 2023, 2022, 2021 and 2020 was |
|
(2) |
See the table immediately following these footnotes for a reconciliation of the Summary Compensation Table compensation and the Compensation Actually Paid to the CEO and Non-CEO NEOs. |
|
(3) |
NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2024, Messrs. Gipple, Anderson and McNew, and |
|
(4) |
Reflects the cumulative total shareholder retubased on the KBW NASDAQ Bank Index, which we also use in the stock performance graph included in our Annual Report on Form 10-K for the year ended |
|
(5) |
Adjusted earnings per share is a non-GAAP financial measure. As calculated from our audited financial statements, adjusted earnings per share equals net income (i) less (A) securities gains (losses), (B) fair value gain (loss) on derivatives, (C) post-acquisition compensation, transition and integration costs, and (D) goodwill impairment and restructuring expense and (ii) divided by the weighted average common and common equivalent shares outstanding. |
|
(6) |
As discussed further in footnote 4 of the Summary Compensation Table above, the Average Summary Compensation Table Total for Non-CEO NEOs in 2024 includes the incremental fair value of the unvested equity awards that vested on |
The following table reconciles the amounts reported under the "Total" column of the Summary Compensation Table with the Compensation Actually Paid in the above table:
|
CEO |
||||||||||||||||||||
|
2024 |
2023 |
2022 |
2021 |
2020 |
||||||||||||||||
|
Total Compensation as reported in the Summary Compensation Table ("SCT") |
1,579,631 | 1,798,583 | 1,855,117 | 1,939,141 | 2,032,092 | |||||||||||||||
|
- Grant Date Fair Value of Stock Awards Granted in Fiscal Year |
(215,632 | ) | (303,489 | ) | (294,582 | ) | (286,937 | ) | (582,304 | ) | ||||||||||
|
- Pension values as reported in the SCT |
(222,806 | ) | (500,083 | ) | (561,512 | ) | (725,382 | ) | (546,391 | ) | ||||||||||
|
Change in Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year |
307,101 | 251,617 | 203,565 | 274,001 | 208,162 | |||||||||||||||
|
Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years |
138,379 | 77,112 | (61,581 | ) | 177,669 | (105,212 | ) | |||||||||||||
|
Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years for which Applicable Vesting Conditions were Satisfied during Fiscal Year |
0 | 6,245 | (10,552 | ) | 61,734 | (31,488 | ) | |||||||||||||
|
Pension Benefit Service Cost |
22,555 | 12,406 | 21,548 | 18,582 | 15,105 | |||||||||||||||
|
Compensation Actually Paid ("CAP") |
1,609,228 | 1,342,391 | 1,152,003 | 1,458,808 | 989,964 | |||||||||||||||
|
Non-CEO NEOs |
||||||||||||||||||||
|
2024 |
2023 |
2022 |
2021 |
2020 |
||||||||||||||||
|
Total Compensation as reported in the Summary Compensation Table ("SCT") |
857,583 | 710,698 | 797,011 | 810,346 | 928,529 | |||||||||||||||
|
- Grant Date Fair Value of Stock Awards Granted in Fiscal Year |
(117,026 | ) | (105,819 | ) | (113,945 | ) | (134,808 | ) | (208,025 | ) | ||||||||||
|
- Pension values as reported in the SCT |
(34,035 | ) | (74,792 | ) | (154,216 | ) | (150,024 | ) | (142,089 | ) | ||||||||||
|
Change in Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year |
130,742 | 101,531 | 114,802 | 195,959 | 105,614 | |||||||||||||||
|
Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years |
115,766 | 40,892 | (38,590 | ) | 96,761 | (69,804 | ) | |||||||||||||
|
Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years for which Applicable Vesting Conditions were Satisfied during Fiscal Year |
8,122 | 7,377 | (8,405 | ) | 34,570 | (14,755 | ) | |||||||||||||
|
Pension Benefit Service Cost |
4,695 | 2,817 | 4,623 | 4,043 | 3,445 | |||||||||||||||
|
Compensation Actually Paid ("CAP") |
965,847 | 682,704 | 601,280 | 856,847 | 602,915 | |||||||||||||||
The most important financial performance measures used by
|
Adjusted earnings per share(1) |
|
Net income |
|
Total nonperforming assets to total assets ratio |
|
Adjusted loan growth(2) |
|
Noninterest income |
|
Retuon average equity |
|
(1) |
Adjusted earnings per share is a non-GAAP measure calculated from our audited financial statements as set forth in footnote 5 of the Pay Versus Performance table. |
|
(2) |
Adjusted loan growth is a non-GAAP measurement. As calculated from our audited financial statements, adjusted loans are defined as total loans/leases receivable held for investment less those loans/leases generated by m2 |
Relationship between Pay and Financial Performance
The graph below shows the relationship between
The graph below shows the relationship between
The graph below shows the relationship between
DIRECTOR COMPENSATION
Cash Compensation
In 2024, non-employee directors of
|
2025 |
2024 |
|||||||
|
|
||||||||
|
Quarterly Retainer |
$ | 10,625 | $ | 10,150 | ||||
|
Additional Quarterly Retainers |
||||||||
|
- Board Chair |
5,000 | 5,000 | ||||||
|
- Board Vice Chair |
625 | 625 | ||||||
|
- Audit Committee Chair |
1,500 | 1,500 | ||||||
|
- Audit Committee Financial Expert |
625 | 625 | ||||||
|
- Compensation Committee Chair |
1,250 | 1,250 | ||||||
|
- Nomination and Governance Committee Chair |
1,250 | 1,250 | ||||||
|
- Risk Oversight Committee Chair |
1,250 | 1,250 | ||||||
|
- Audit Committee Member |
625 | 625 | ||||||
|
- Compensation Committee Member |
625 | 625 | ||||||
|
- Risk Oversight Committee Member |
625 | 625 | ||||||
|
- All other Committee Members |
300 | 300 | ||||||
|
Subsidiaries |
||||||||
|
Quarterly Retainer |
2,250 | 2,250 | ||||||
|
Additional Quarterly Retainers |
||||||||
|
- Board Chair |
1,000 | 1,000 | ||||||
|
- Asset/Liability Management Committee Chair |
500 | 500 | ||||||
|
- Loan Committee Chair |
500 | 500 | ||||||
|
- Wealth Management Committee Chair |
500 | 500 | ||||||
|
- All Committee Members |
375 | 375 | ||||||
|
m2 |
||||||||
|
Quarterly Retainer |
1,000 | 1,000 | ||||||
Stock-Based Compensation
On
The following table discloses the cash fees and equity awards earned, paid or awarded to each of our directors during the fiscal year ended 2024:
Director Compensation Table
|
|
Fees Earned ($)(1) |
Stock Awards ($)(2) |
Total ($) |
|
|
51,800 |
24,000 |
75,800 |
|
|
34,475 |
4,000 |
38,475 |
|
|
44,300 |
24,000 |
68,300 |
|
|
59,600 |
28,000 |
87,600 |
|
|
69,800 |
28,000 |
97,800 |
|
|
56,300 |
28,000 |
84,300 |
|
|
55,175 |
28,000 |
83,175 |
|
|
68,800 |
28,000 |
96,800 |
|
|
28,650 |
4,000 |
32,650 |
|
|
50,500 |
24,000 |
74,500 |
|
|
84,000 |
32,000 |
116,000 |
|
(1) |
Directors may elect to defer the receipt of all or part of their cash fees. All of the directors other than |
|
(2) |
The amounts set forth in the "Stock Awards" column reflects the grant date fair value of restricted stock awards granted on |
PROPOSAL 2:
NON-BINDING, ADVISORY VOTE TO APPROVE EXECUTIVE OFFICER COMPENSATION
Section 14A of the Exchange Act, as created by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), and the rules and regulations promulgated thereunder require publicly traded companies, such as
In accordance with these requirements, we are providing stockholders with an advisory vote on the compensation of our NEOs. We currently hold a say-on-pay vote annually.
The overall objective of
The following resolution is submitted for stockholder approval:
"RESOLVED, that
While this say-on-pay vote is required, as provided in Section 14A of the Exchange Act, it is not binding on our Board of Directors and may not be construed as overruling any decision by the Board of Directors. However, the Compensation Committee will consider the outcome of the vote when considering future compensation arrangements.
The Board of Directorsrecommends that you vote "FOR" the approval of the say-on-pay proposal. Proxies properly signed and returned will be voted "FOR" this proposal unless you specify otherwise.
PROPOSAL 3:
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Although we are not required to hold a vote of our stockholders with respect to this matter, our Board of Directors recommends that the stockholders ratify this appointment. A representative of
Our Board of Directorsrecommends that you vote "FOR" the approval of the ratification of this appointment. Proxies properly signed and returned will be voted "FOR" this proposal unless you specify otherwise.
Following is a summary of fees for professional services by
Accountant Fees
During the period covering the fiscal years ended
|
2024 |
2023 |
|||||||
|
Audit fees (1) |
$ | 1,079,704 | $ | 1,011,842 | ||||
|
Audit-related fees (2) |
1,323 | 0 | ||||||
|
Tax fees (3) |
0 | 0 | ||||||
|
Other fees (4) |
98,922 | 94,295 | ||||||
|
Total |
$ | 1,179,949 | $ | 1,106,137 | ||||
|
(1) |
Audit fees consist of fees for professional services rendered for the integrated audit of |
|
(2) |
Audit-related fees consist of fees for research and consultations concerning financial accounting and reporting matters. |
|
(3) |
No tax services provided. |
|
(4) |
All other fees include aggregate fees billed for any other products and services provided, including a SOC 1 audit and out-of-pocket reimbursement for an electronic subscription to an accounting publication. |
Audit Committee Approval Policy
Among other things, the Audit Committee is responsible for appointing, setting compensation for and overseeing the work of the independent auditor. The Audit Committee's policy is to pre-approve, on a case-by-case basis, all audit and permissible non-audit services provided by any audit, tax consulting or general business consulting firm. All of the fees earned by
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the directors, executive officers and persons who own more than 10% of our common stock file reports of ownership and changes in ownership with the
Delinquent Section 16(a) Reports
Based solely on our review of the copies of the Section 16 reports filed by and written representations from our directors, executive officers and any persons who own more than 10% of our common stock, we are aware of one transaction for Ms.
TRANSACTIONS WITH MANAGEMENT AND DIRECTORS
In addition to the compensation arrangements with directors and executive officers described in the "Executive Compensation" section above, the following is a description of transactions since
Ordinary Banking Relationships
Our directors, executive officers, beneficial holders of more than five percent of any class of our voting securities and their immediate family members and associates were clients of and had transactions with
Policies and Procedures Regarding Related Party Transactions
Additionally, transactions by
As defined in the Related Party Transactions Policy, related party transactions are transactions in which: (i)
AUDIT COMMITTEE REPORT
The Audit Committee, comprised solely of independent directors, has the responsibilities set forth in its charter, which include assisting the Board of Directors in carrying out its oversight responsibilities for our financial reporting process, audit process and internal controls. The Audit Committee also reviews our audited consolidated financial statements and recommends to the Board of Directors that they be included in our Annual Report on Form 10-K for the year ended
The Audit Committee reviewed the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended
Audit Committee:
Attachments
Disclaimer
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