Michael Olague
About Michael Olague
Executive Vice President and Chief Banking Officer at Sierra Bancorp (Bank of the Sierra), age 69, serving as CBO since January 1, 2015 after leading the Bakersfield/Delano market since 2009 . Company performance tied to his tenure shows Net Income of $40.56M in 2024 (up from $34.84M in 2023) and ROAA of 1.12% in 2024; five-year total shareholder return (TSR) index rose to 121.25 vs. 132.44 for the peer group, indicating improved profitability but TSR modestly lagging peers over 2019–2024 . He is a Named Executive Officer (NEO) with pay programs emphasizing company Net Income and multi‑year ROAA/ROE relative to peers, alongside meaningful restricted stock holdings and option exposure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sierra Bancorp / Bank of the Sierra | EVP & Chief Banking Officer | 2015–present | Leads enterprise banking franchise; long‑tenured operating executive . |
| Bank of the Sierra | SVP & Manager, Bakersfield/Delano area | 2009–2014 | Expanded and managed Bakersfield/Delano market operations . |
External Roles
- None disclosed in the proxy statements reviewed.
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 400,076 | 420,076 | 441,085 |
| Target Bonus (% of Salary) | 50% | 50% | 50% |
| Actual Bonus Paid ($) | 189,600 | 202,440 | 232,583 (105.48% of target) |
| Stock Awards (Grant-Date Fair Value, $) | 149,965 | 149,937 | — (no grant in 2024) |
| All Other Compensation ($) | 45,216 | 51,121 | 67,483 |
| Total Compensation ($) | 784,857 | 823,574 | 741,151 |
- 2025 base salaries for NEOs were kept flat vs. 2024; bonus targets remain 50% of salary for non‑CEO NEOs .
- Notable perquisites for Olague in 2024: car allowance $18,000; 401(k) contributions $12,075; restricted stock dividends $33,149; other minor benefits $4,529 .
Performance Compensation
Annual Cash Incentive Plan (2024)
| Component | Metric | Weight | Target | Actual | Payout Result |
|---|---|---|---|---|---|
| Cash Incentive | Company Net Income | 80% | $36.6M | 110.96% of target | +5.48% over target portion |
| Cash Incentive | Individual/Discretionary | 20% | Fully met | Fully met | Included in total payout |
| Outcome | — | — | — | — | 105.48% of target bonus (applied to 50% target) |
Long-Term Equity Incentives (structure and metrics)
| Grant Year | Vehicle | Structure | Performance Metric | Vesting |
|---|---|---|---|---|
| 2022 | RSUs | 50% time-based; 50% performance-based | 3-year avg ROE vs peers; 0%/100%/150% at 30th/50th/75th percentile | Time-based ratable over 3 yrs; performance-based at end of 3 yrs (2025) |
| 2023 | RSUs | 50% time-based; 50% performance-based | 3-year avg ROAA vs peers; 0%/100%/150% at 30th/50th/75th percentile | Time-based ratable over 3 yrs; performance-based at end of 3 yrs (2026) |
| 2024 | — | No grant (shifted timing to 2025) | — | — |
| Feb 2025 (for 2024 performance) | RSUs | CBO award equal to 49.8% of base salary; 50% performance-based | Performance target set as 3-year avg ROAA ≥ 1.14% for target vest; below 50% of target = 0% vest | Time-based vests ratably over 3 yrs; performance-based after 3 yrs |
Vesting cadence and 2024 activity:
- 2024 vestings: 4,444 shares (Aug 20), 1,325 (Nov 16), 1,172 (Nov 18), 460 (Nov 19); total 7,401 shares vested in 2024 (value realized $215,808). Options exercised: 5,000 shares (value realized $56,759) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 39,580 shares as of Mar 24, 2025; 0.33% of outstanding . |
| Vested Option Shares (within 60 days) | 5,593 shares . |
| Unvested Restricted Shares at 12/31/2024 | 19,504 shares; market value $564,056 . |
| Composition of Restricted Stock (as of 3/24/2025) | Includes 11,812 time-based and 14,785 performance-based restricted shares in beneficial total . |
| Options Outstanding (selected lines) | 5,000 @ $17.25 exp. 2/18/2026; 5,000 @ $28.21 exp. 2/16/2027; 5,000 @ $27.35 exp. 2/15/2028; 5,000 @ $27.30 exp. 2/21/2029; 5,000 @ $27.11 exp. 2/20/2030 . |
| Ownership Guidelines | EVPs must hold stock equal to 1x base salary; unvested restricted stock counts; time to comply by the later of Feb 15, 2027 or three years post-appointment; 1-year post‑vest holding requirement (net of taxes); hedging and pledging prohibited . |
| Deferred Compensation | 2024: $22,954 contributed; $154,457 earnings; year-end balance $2,840,226 . 2023 year-end balance: $2,662,815 . |
Insider selling pressure signals:
- Regular vesting clusters in August and mid/late November (see 2024 dates), plus 3-year cliff vest events on performance RSUs in late 2025 (for 2022 grant) and 2026 (for 2023 grant), and new 2025 grants vest ratably through 2027–2028. These windows can create periodic sell‑to‑cover tax activity despite 1‑year holding rules (excluding tax net settlements) .
Employment Terms
| Term | Key Provisions |
|---|---|
| Agreement & Term | Employment agreement effective Jan 1, 2019; evergreen 1-year renewals unless notice given ≥6 months pre‑renewal . |
| Target Incentive Opportunities | CEO 75% of salary; other NEOs (incl. CBO) 50% of salary . |
| Termination without Cause (no CIC) | Lump sum equal to 1x annualized base salary; 12 months of group health/vision/dental and 50% dependent premium reimbursement . |
| Change in Control Cash | Cash payment equal to 2x annualized base salary plus maximum eligible bonus for the year of termination; 12 months of group health/vision/dental and 50% dependent premium reimbursement . |
| CIC Amendment | First Amendment (Dec 2022) confirmed 2x base salary + maximum eligible bonus (lump sum, timing per agreement) . |
| Equity on CIC | All unvested stock options and restricted stock vest (value illustration provided annually) . |
| Covenants | Noncompetition, non‑solicitation, nondisclosure; indemnification provisions . |
| Tax Gross-Ups | None; explicit prohibition on tax gross‑ups in CIC or equity plans (Feb 2024) . |
| Insider Trading/Pledging/Hedging | Hedging and pledging prohibited for directors and executive officers; blackout periods apply . |
Potential CIC economics (illustrative values):
- If a CIC had occurred on 12/31/2024: value of Olague’s unvested restricted stock $455,721 would have vested (stock options had no intrinsic value at that date per table), in addition to cash severance per the formula above .
Performance & Track Record
| Measure | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($000s) | 33,659 | 34,844 | 40,560 |
| ROAA (%) | 0.97 | 0.94 | 1.12 |
| TSR Index (Base=100 at 12/31/2019) | 81.64 | 90.98 | 121.25 |
- 2024 incentive plan set: $36.6M Net Income target; actual 110.96% → bonus payout at 105.48% of target plus full discretionary portion for NEOs, reflecting strong earnings and management execution .
- Compensation design ties equity to 3‑year ROAA/ROE relative to peers; 2025 refresh further links grant size to relative ROAA (CBO grant = 49.8% of salary; 50% perf‑based) .
Compensation Structure Analysis
- Mix shift to RSUs from options since 2020; time‑based plus performance‑based design with peer‑relative ROAA/ROE metrics and 0–150% outcomes aligns pay with multi‑year performance and retention .
- 2025 formulaic grant sizing based on relative ROAA tightens pay‑for‑performance; high 2024 percentile performance produced above‑median grants (CBO at 49.8% of salary) while maintaining meaningful performance risk (50% perf‑based) .
- No grants in 2024 (timing shift) and explicit prohibition on tax gross‑ups; pledging/hedging banned—shareholder‑friendly features .
Compensation Peer Group (Benchmarking)
- Peer group: 18 publicly‑traded banks ($2.2–$7.6B assets; median $3.9B), located primarily in Western states; total compensation targeted at the 50th percentile, with mix adjustments based on role and performance .
- 2024 “at target” total comp percentile estimates: CBO ~64th percentile; actual 2024 total comp percentile ~60th (no equity grant in 2024, full bonuses) .
Equity Ownership Guidelines & Compliance
- EVPs must hold stock equal to at least 1x base salary; unvested RSUs count; one‑year post‑vest holding; compliance due by later of Feb 15, 2027 or three years from appointment. Company prohibits pledging and hedging by executives .
- Individual compliance status is not disclosed in the proxies reviewed .
Employment Terms (Detailed CIC/Severance Economics)
| Scenario | Cash | Benefits | Equity |
|---|---|---|---|
| Termination w/o cause (no CIC) | 1x base salary | 12 months medical/dental/vision + 50% dependent premium reimbursement | Per plan; no automatic acceleration . |
| Change in Control | 2x base + maximum eligible bonus | 12 months medical/dental/vision + 50% dependent premium reimbursement | Unvested options and restricted stock vest . |
| Restrictive Covenants | Non‑compete, non‑solicit, NDA | — | — |
| Clawback/Gross‑Up | No gross‑ups; clawback policy not expressly detailed in proxy excerpts | — | — |
Risk Indicators & Red Flags
- Pledging/Hedging: Prohibited for executives (reduces alignment risk) .
- Option repricing: Prohibited under 2023 plan amendments; no repricing authority without shareholder approval .
- Related party transactions: Board states insider lending at market terms; no unfavorable features reported .
- Say‑on‑pay: Advisory vote held annually; 2025 proxy recommends “FOR”; historical approval percentages not disclosed in excerpts reviewed .
Upcoming Vesting/Selling Pressure Watchlist (next 12–24 months)
- Time-based RSU tranches commonly vest around Aug 20 and mid/late November (based on 2024 vest dates: Aug 20, Nov 16/18/19); performance‑based RSUs from 2022 grant are scheduled to settle after the 3‑year period (late 2025), and from 2023 grant (late 2026) .
- 2025 grant (for 2024 performance) vests ratably (time‑based portion) over 3 years; performance portion in year 3 subject to 3‑year avg ROAA hurdles (target ≥1.14%) .
Investment Implications
- Alignment: Significant unvested RSUs (with performance conditions) and ownership guidelines foster alignment; pledging/hedging bans reduce governance risk .
- Retention: Multi‑year RSU schedules, 1‑year post‑vest holding, and robust deferred comp balance ($2.84M) point to strong retention hooks for Olague .
- Pay-for-performance: 2025 formulaic grant sizing tied to relative ROAA plus performance‑based vesting strengthens incentive quality; however, single‑trigger CIC cash language (2x base + max bonus) may be more shareholder‑accommodating if double‑triggered .
- Trading signals: Expect periodic sell‑to‑cover activity around August/November vest dates and 3‑year performance vest events (late 2025/2026). Monitor Form 4s around these windows for potential liquidity flows; 2024 saw option exercise and RSU vesting events for Olague .