Andrew J. Harmening
ASSOCIATED BANC-CORPAbout Andrew J. Harmening
Andrew J. Harmening, age 55, has served as President and CEO of Associated Banc-Corp since April 2021 and has been a director since 2021; he has 25+ years of banking experience including prior service as Senior EVP and Consumer & Business Banking Director at Huntington Bank (2017–2021) . He chairs ASB’s Corporate Development Committee and, as CEO, is not independent under NYSE rules; the board separates the Chairman and CEO roles (Jay Williams is Chairman), with executive sessions of non-management directors held at all regular meetings . Pay is heavily performance-based (80% of CEO target compensation), anchored in multi-year PRSU awards tied to relative TSR and return metrics, and the Compensation & Benefits Committee uses Mercer as independent advisor; 2024 say-on-pay passed with 97% support .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Huntington Bank | Senior EVP; Consumer & Business Banking Director | 2017–2021 | Led consumer and business banking at a large regional bank; operational and growth leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Boys and Girls Club of Greater Milwaukee | Board member | Not disclosed | Community leadership |
| Northwestern Mutual | Board of Trustees | Not disclosed | Governance oversight |
| Metropolitan Milwaukee Association of Commerce | Board of Directors | Not disclosed | Regional economic engagement |
Fixed Compensation
Multi-year reported compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $1,000,000 | $1,030,000 | $1,070,000 |
| Stock Awards ($) | $2,499,973 | $2,574,964 | $2,674,986 |
| Non-Equity Incentive Plan Compensation ($) | $2,505,000 | $1,035,150 | $1,657,965 |
| Change in Pension Value & NQDC Earnings ($) | $4,575 | $5,134 | $5,655 |
| All Other Compensation ($) | $57,038 | $101,473 | $64,482 |
| Total ($) | $6,066,586 | $4,746,720 | $5,473,089 |
2024 target pay structure:
| Component | Target % of Salary | Target $ |
|---|---|---|
| Base Salary | — | $1,070,000 |
| Short-Term Incentive (MIP) | 150% | $1,605,000 |
| Long-Term Incentive (LTI) | 250% | $2,675,000 |
| Total Target Direct Compensation | — | $5,350,000 |
Other fixed benefits/perquisites (2024 example): 401(k) match $17,250; SERP contribution $30,127; financial planning $13,805; executive physical $3,300 .
Performance Compensation
Short-Term Incentive (MIP) – 2024
| Metric | Weight | Target | Actual | Payout | Notes |
|---|---|---|---|---|---|
| Net Income After Tax (NIAT) | 40% | Not disclosed | Adjusted for balance sheet repositioning | 103.3% of target | Without adjustment, payout would have been zero |
| Revenue Before LTCC | 30% | Not disclosed | Adjusted | 103.3% of target | Non-GAAP measure defined in proxy |
| Operating Leverage | 30% | Not disclosed | Adjusted | 103.3% of target | Positive when revenue grows faster than expense |
CEO actual MIP payout: $1,657,965 (103.3% of $1,605,000 target) .
Long-Term Incentive Performance Plan (LTIPP)
2024–2026 LTIPP design:
- Metrics: Relative TSR vs KRXTR (65% weight; capped at 100% if absolute TSR negative), Absolute ROCET1 (35% weight; average over 3 years) .
- PRSUs 75%; RSUs 25% of LTI value .
2022–2024 LTIPP (completed):
| Metric | Weight | Payout Basis | Adjustments | Outcome |
|---|---|---|---|---|
| Relative TSR vs KRXTR | 50% | 0–150% with negative TSR cap at 100% | Performance adjusted to remove 2023/2024 repositioning impacts | Contributed to 93.75% overall |
| Relative ROATCE vs KRXTR | 50% | 0–150% | Adjusted for repositioning impacts | Contributed to 93.75% overall |
CEO vesting under 2022–2024 LTIPP:
| Metric | Target Shares Awarded | Actual Vested Shares | Payout (%) |
|---|---|---|---|
| PRSUs (aggregate) | 76,781 | 71,982 | 93.75% |
2024 LTI grants:
| Award Type | Grant Date | Target # | Max # | Grant-Date Fair Value ($) |
|---|---|---|---|---|
| RSUs (time-based) | 1/30/2024 | 30,592 | — | $668,741 |
| PRSUs (performance-based) | 1/30/2024 | 91,777 | 137,665 | $2,006,245 |
Equity Ownership & Alignment
Ownership and unvested awards (as of Feb 14, 2025 and Dec 31, 2024):
| Item | Amount | Notes |
|---|---|---|
| Common Shares Owned | 268,209; <1% of class | As of Feb 14, 2025; percent flagged as <1% |
| RSUs (director/executive total) | 413,724 | Represents contingent right to receive common shares |
| Equity Incentive Plan – Unearned PRSUs | 256,501; $6,130,374 market value | Market value at $23.90/share as of Dec 31, 2024 |
| Time-Based RSUs held (selected tranches) | 5,381; 12,797; 21,986; 30,592 | Tranches vesting over 2025–2028 (see schedule) |
| Options exercises in 2024 | 0 | No option exercises |
| Shares vested in 2024 | 148,261; $3,365,270 | Includes value at vesting; subject to retention guidelines |
Vesting schedule (time-based RSUs):
| Vesting Year | Shares Scheduled to Vest |
|---|---|
| 2025 | 5,381; 12,797; 21,986; 30,592 |
| 2026 | 12,797; 21,986; 30,592 |
| 2027 | 21,986; 30,592 |
| 2028 | 30,592 |
Alignment policies:
- Stock ownership guidelines require CEO to hold shares worth 6x salary and retain 100% of net RSU shares until compliant; all directors and NEOs are within expected guidelines .
- Hedging and pledging of ASB stock are prohibited; NEOs are in compliance (pledged shares excluded from guidelines) .
- Clawback applies to incentive compensation and time-based awards upon accounting restatement; consistent with NYSE rules .
Employment Terms
- No individual employment agreement; severance otherwise discretionary under the Severance Pay Plan (up to 200% of base salary) .
- Change-of-Control (COC) agreement: double-trigger; CEO receives 3x base salary + target cash incentive; 36 months of benefits (medical/dental/life) and retirement plan contributions; prorated cash incentive; outplacement; best-net excise tax cutback (no gross-up) .
COC economics (illustrative values if separation within two years post-CIC, at Dec 31, 2024):
| Component | Amount |
|---|---|
| Salary Continuation | $3,210,000 |
| Benefits (Medical/Dental/Life) | $70,908 |
| Retirement Plan Contributions (RAP/401k/SERP) | $157,656 |
| Annual Incentive (Target) | $4,815,000 |
| Outplacement | $7,650 |
| Accelerated Equity (time-based + PRSUs at target) | $8,251,936 |
| Total | $16,513,150 |
- Restrictive covenants include six-month restrictions on soliciting customers/colleagues; perpetual confidentiality and mutual non-disparagement .
Deferred compensation and pensions:
- CEO participated in nonqualified deferred compensation plan (elected to defer); SERP 2024 registrant contribution $30,127; SERP balance $134,830; RAP present value $15,364 (3 years credited service) .
Performance & Track Record
Company performance during Harmening’s tenure (pay-versus-performance table):
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Cumulative TSR – ASB (Value of $100) | $111.27 | $117.92 | $114.55 | $133.13 |
| Peer TSR – KRXTR (Value of $100) | $124.74 | $116.10 | $115.64 | $130.90 |
| Net Income ($USD Thousands) | $350,994 | $366,122 | $182,956 | $123,145 |
| Adjusted Operating Leverage (%) | 3.5% | 11.9% | 1.3% | -2.0% |
Compensation-program adjustments for one-time balance sheet repositioning:
- 2024 MIP adjusted to remove repositioning impacts; funded at 103.3% of target .
- 2022–2024 LTIPP adjusted from 64.50% unadjusted to 93.75% payout to preserve retentive/motivational objectives amid nonrecurring strategic transactions .
Non-GAAP growth highlights in 2024:
- Adjusted revenue up 1.0% YoY; adjusted revenue before LTCC up 0.74%; adjusted noninterest expense up 2.69% .
Board Governance
- Director since 2021; Chair, Corporate Development Committee .
- Board independence: all directors except Harmening deemed independent; separation of Chairman and CEO roles; executive sessions held at each regular meeting .
- Board and committee activity: Board met 5 times in 2024; committees met as follows—Audit 11, Compensation & Benefits 5, Corporate Development 2, Corporate Governance & Social Responsibility 4, Enterprise Risk 12, Trust 4; each director for all of 2024 attended at least 75% of Board and committee meetings .
- Director compensation: CEO does not receive extra compensation for Board service or chairing Corporate Development .
Compensation Peer Group (Benchmarking)
ASB’s 2024 compensation peer group comprised 21 regional banks (assets ~$18.0B–$71.2B; median ~$37.7B), including Bank OZK, F.N.B., Synovus, Webster, Wintrust, Cullen/Frost, Prosperity, Valley National, BOK Financial, Old National, UMB, Commerce Bancshares, Texas Capital, Fulton, Hancock Whitney, Trustmark, Pinnacle, BankUnited, Umpqua/Columbia Banking System, United Bancshares; CEO TDC targets aim near median levels .
Say-On-Pay & Shareholder Feedback
- 2024 say-on-pay approval: >97% of votes cast in favor .
- Regular shareholder outreach each fall; 2024 feedback positive with no concerns raised .
Compensation Structure Analysis
- Equity emphasis: 75% PRSUs and 25% RSUs in LTI to align with TSR and ROCET1 outcomes; no stock options since 2020; repricing prohibited without shareholder approval .
- Ownership alignment: strict 6x salary requirement for CEO; hold 100% of RSU shares until compliant; anti-hedging/anti-pledging; clawback covers time-based and performance awards .
- Discretionary adjustments: Committee adjusted MIP and LTIPP to exclude nonrecurring repositioning impacts, preserving intended retention objectives—an important governance factor to monitor .
Risk Indicators & Red Flags
- No tax gross-ups (except relocation); excise tax best-net cutback under COC .
- Double-trigger vesting under equity plans and COC; minimum vesting (≥1 year for performance awards; ≥3 years for time-based) with limited exemptions .
- Related party transactions disclosed and overseen; loans to insiders totaled ~$21.3 million at Dec 31, 2024 (0.46% of equity) on market terms .
- Insider supply: significant RSU vesting each February suggests periodic potential selling pressure, though policies require retention until guideline compliance .
Investment Implications
- Strong pay-for-performance alignment with heavy PRSU weighting tied to peer-relative TSR and regulated capital returns (ROCET1), supporting long-term shareholder value .
- Near-term supply considerations stem from sizable, scheduled RSU vesting tranches through 2028, but stringent ownership guidelines and anti-pledging reduce misalignment risk .
- COC terms are market-standard (double-trigger; 3x base+bonus for CEO; best-net excise treatment), with robust clawback and no gross-ups, limiting governance risk .
- The committee’s discretionary adjustments to exclude nonrecurring repositioning effects boosted incentive payouts; investors should monitor consistency of adjustments versus underlying GAAP performance to assess pay-for-performance integrity over time .