Martin H. Resch
About Martin H. Resch
Martin H. Resch, 59, is President (since 2022) and CEO (since April 18, 2023) of Cass Information Systems, Inc., and has served on the Board since 2023. He holds a B.S. in Computer Science from Oregon State University and an MBA from Cornell University, and previously held senior operating, treasury, and regulatory leadership roles at Bank of the West, including CAO/COO for the Commercial Banking Group and corporate treasurer responsible for Dodd-Frank and Volcker responses . Under his tenure, Cass reported FY2024 revenue of $199.2 million (+0.8% YoY), diluted EPS of $1.39, ROE of 8.37%, and net income of $19.2 million, with TSR value-per-$100 at $83 for 2024 in the company’s pay-versus-performance presentation . The Board structure features an Executive Chairman (Eric H. Brunngraber) and a Lead Independent Director (Joseph D. Rupp), with Resch not deemed independent (as CEO) and not serving on Board committees, mitigating dual-role risks via independent oversight and executive sessions of non-management directors .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cass Information Systems, Inc. | President | 2022–2023 | Led corporate strategy and day-to-day operations prior to CEO appointment . |
| Cass Information Systems, Inc. | CEO | 2023–Present | Responsible for strategic direction and day-to-day leadership of multi-line fintech/banking business . |
| Bank of the West | EVP; CAO/COO, Commercial Banking Group; Corporate Treasurer | Pre-2020 | Led strategy, operations, finance, technology, HR; collaborated with B2B fintech incubator; led regulatory response to Dodd-Frank and Volcker . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 | 2025 Actions |
|---|---|---|---|---|
| Base Salary ($) | 475,385 | 602,423 | 668,774; increased to $675,000 effective Mar 31, 2024 | Increased to $688,500 effective Mar 31, 2025 . |
| Profit-Sharing Bonus ($) | 243,000 | 146,300 | 117,000 (17.5% of 2024 base salary) | N/A (program rules unchanged except pool reduced to 18.5% NIAT for non-exempt removal) . |
| Other Compensation ($) | 30,880 | 38,711 | 43,610 (401k match $20,700 + dividends on time-based RS $22,910) | N/A |
Performance Compensation
- Long-Term Incentive Compensation (LTIC) structure for CEO: target value 125% of base salary; 40% time-based RS/RSUs (3-year cliff vest), 60% performance-based RS/RSUs based on EPS CAGR and average ROE over 3 years; max 150% of target; no dividends on unearned performance awards; double-trigger vesting on change-of-control .
| LTIC Grants | Grant Date | Time-based Award | Performance-based Target Award | Key Performance Metrics | Vesting |
|---|---|---|---|---|---|
| 2024 LTIC | Jan 25, 2024 | 7,620 restricted shares; grant-date FV $337,490 | 11,430 shares; grant-date FV $506,235 | EPS CAGR target 8% (max 16%); average ROE threshold 9%, target 13%, max 17%; 50/50 weighting | Cliff vests Jan 25, 2027; performance shares earned 0–150% at period end . |
| 2025 LTIC (RSU form) | Jan 23, 2025 | 8,303 time-based RSUs | 12,455 performance RSUs | EPS CAGR target 8% (max 16%); average ROE threshold 9%, target 13%, max 17%; 50/50 weighting | Cliff vests 3 years; performance RSUs earned 0–150%; “Rule of 65” retirement vesting terms apply . |
| Prior LTIC Outcomes | Performance Period | Outcome | Vested Count (CEO) |
|---|---|---|---|
| 2021 grant (vested 2024) | FY2021–FY2023 | Total achievement 135.4% (cumulative EPS $6.71 vs target $6.07; average ROE 14.02% vs target 11%) | Time-based 2,749; performance-based target 4,124; vested 5,584 at 135.4% . |
| 2022 grant (vested 2025) | FY2022–FY2024 | Total achievement 99.1% (cumulative EPS $6.29; average ROE 13.43%; 2024 adjusted for pension plan termination) | Time-based 4,851; performance-based target 7,276; vested 7,211 at 99.1% . |
| Profit-Sharing Plan Parameters (CEO) | Target | Cap | 2024 Actual |
|---|---|---|---|
| % of Base Salary (at NIAT +8%) | 45% | 70% | 17.5% of base; $117,000 total with NIAT down 27.6% YoY . |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial ownership (Feb 16, 2025) | 31,917 shares; <1% of class (13,503,248 shares outstanding) . |
| Unvested time-based awards (12/31/2024) | 18,934 shares; $774,590 market value at $40.91 . |
| Unearned performance-based target awards (12/31/2024) | 28,401 shares; $1,161,885 market value at $40.91 . |
| Stock ownership guidelines | CEO approval required from Lead Independent Director before selling; guideline generally requires holdings of ≥5x base salary; other NEOs ≥3x . |
| Hedging/margin/pledging | Hedging and short sales prohibited; purchasing on margin prohibited; pre-clearance and open-window trading required . |
Note: As an employee-director, Resch receives no separate director fees; equity and cash compensation are reported under executive tables .
Employment Terms
- Employment is at-will; no long-term employment agreements or guaranteed severance multiples; payments beyond termination date limited to retirement plan benefits and LTIC vesting per plan terms .
- Change-of-control economics: time-based awards vest immediately upon termination following change-of-control; performance-based awards vest at target upon termination following change-of-control (double trigger) .
- Retirement vesting: for pre-2025 awards, “Normal Retirement” at age 65 and 5 years’ service continues vesting; from 2025, “Rule of 65” (age ≥60 with age+service ≥65) governs RSU vesting continuity; performance RSUs prorated with service at retirement .
- Clawback policy adopted Oct 2023 compliant with SEC/Nasdaq; recovers erroneously paid incentive compensation upon restatement .
- No automatic tax gross-ups; no perquisites for named executive officers .
Board Service and Governance
- Board service: Director since 2023; not independent under Nasdaq rules due to CEO status .
- Committee roles: Cass committees (Audit & Risk, Compensation, Nominating & Corporate Governance) composed entirely of independent directors; Resch does not serve on committees as a management director .
- Board structure: Executive Chairman (Brunngraber); Lead Independent Director (Rupp) with defined responsibilities including agenda-setting, executive sessions, and shareholder liaison .
- Attendance: All directors attended ≥75% of Board/committee meetings in 2024; Board met quarterly plus a strategic offsite .
Performance & Track Record
| Metric (FY2024) | Outcome |
|---|---|
| Revenue | $199.2 million (+0.8% YoY), driven by processing fees and net interest income . |
| Net Income | $19.2 million; diluted EPS $1.39; ROE 8.37%; ROA 0.82% . |
| Capital & Credit | CET1 ratio 13.84%; non-performing loans 0%; no charge-offs in 2024 . |
| Capital Returns | $23.7 million via dividends and buybacks . |
| Say-on-Pay | 96% approval at 2024 annual meeting . |
| TSR Presentation | Value of $100 investment in Cass stock = $83 in 2024 pay-versus-performance table . |
Compensation Committee Analysis and Peer Group
- Independent consultant: Pay Governance engaged; annually reviews design, levels, peer relevance; consultant independence affirmed .
- Peer group: 20 companies (70% diversified banks, 30% fintech/business services) selected by assets/revenues/market cap criteria; includes Alerus, The Bancorp, Coastal Financial, EVERTEC, i3 Verticals, Repay, Triumph Financial, etc. .
- Philosophy: Emphasis on performance (NIAT for profit-sharing; EPS/ROE for LTIC), explicit caps, clawbacks, double-trigger vesting, no dividends on unearned performance equity, and stock ownership guidelines .
Risk Indicators & Red Flags
- 2024 NIAT decline of 27.6% led to reduced CEO profit-sharing payout (2.4% pool share; 17.5% of salary), indicating variable pay sensitivity to performance .
- No employment agreement or guaranteed severance multiples; mitigates fixed-cost risk .
- Hedging and margin restrictions; trading pre-clearance reduces alignment concerns; no tax gross-ups .
- Related-party transactions oversight via Audit & Risk Committee; none disclosed specific to Resch .
Performance Compensation Detail
| Metric | Weighting | Target | Actual/Payout (Most Recent) | Vesting |
|---|---|---|---|---|
| Profit-Sharing (CEO) | N/A (formulaic) | 45% of salary at +8% NIAT; capped at 70% | 2024: $117,000, 17.5% of salary with NIAT −27.6% | Semi-annual distribution . |
| EPS CAGR (LTIC) | 50% | 8% target; 16% max | 2021–2023: cumulative EPS target exceeded; 135.4% total achievement with ROE | 3-year cliff vest; performance-based 0–150% earned . |
| Average ROE (LTIC) | 50% | 13% target; 9% threshold; 17% max | 2022–2024: 99.1% total achievement; 2024 metrics adjusted for pension plan termination | 3-year cliff vest; performance-based 0–150% earned . |
Investment Implications
- Pay-for-performance alignment: A high proportion of variable pay tied to NIAT, EPS, and ROE, with explicit caps and clawbacks, suggests disciplined incentive structure; 2024 payout compression reflects sensitivity to earnings volatility .
- Retention risk: Absence of employment agreements and reliance on LTIC with 3-year cliff vesting plus “Rule of 65” encourage tenure but provide limited severance certainty; watch future award sizing and vesting mechanics for retention signals .
- Ownership alignment: Beneficial ownership and sizable unvested/performance equity exposure, strict selling approvals, and anti-hedging/margin policies reduce misalignment risks; monitor progress toward 5x salary guideline compliance over time .
- Governance and dual-role considerations: CEO-director status is counterbalanced by an Executive Chairman and a strong Lead Independent Director, fully independent committees, and executive sessions—limiting independence concerns for strategic oversight .
- Trading signals: Future NIAT trajectory and achievement vs EPS/ROE LTIC targets will influence realized compensation; below-threshold outcomes reduce LTIC value, while above-target outcomes can amplify realized equity—an indicator of management confidence or pressure points tied to performance cycles .