Michael C. Frederick
About Michael C. Frederick
Michael C. Frederick is President and Chief Executive Officer of First Capital, Inc. and First Harrison Bank, and serves as a director on the Company’s board. He became Bank CEO on March 31, 2023 and Company CEO on July 1, 2023; he previously served as CFO from 1997 to 2023 and has been affiliated with the Bank since 1990. Age 57; director since 2020 . During his tenure as CEO, the Company’s TSR improved 19.6% in 2024 vs. 2023 while net income declined 6.6% (TSR value rose to $61.16; net income was $11.94 million in 2024) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Capital, Inc. | President & Chief Executive Officer | Jul 1, 2023 – Present | CEO transition; pay vs. performance framework maintained; TSR improved 2024 vs. 2023 |
| First Harrison Bank | President & Chief Executive Officer | Mar 31, 2023 – Present | Leads Bank operations; bonus plan tied to profitability/efficiency |
| First Capital, Inc. and First Harrison Bank | Chief Financial Officer | 1997 – 2023 | Long-tenured finance leader; deep knowledge of business and financial history |
| First Capital, Inc. | Director | 2020 – Present | Board service alongside executive role; member of Executive Committee |
External Roles
- No public company directorships or external roles disclosed in proxy biographies .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Salary ($) | $262,518 | $282,666 |
| All Other Compensation ($) | $32,336 | $38,979 |
| Notes | Includes employee director fees of $18,768 (2023) and $19,521 (2024) within salary |
Performance Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Non-Equity Incentive Compensation ($) | $27,063 | $30,733 |
| Bonus Plan Metrics | Pre-tax income and efficiency goals (threshold-based); cash paid following year | |
| Performance Targets/Weighting | Not disclosed | Not disclosed |
Equity Awards (Restricted Stock)
| Attribute | 2024 Grant (for 2023 performance) | 2025 Grant (for 2024 performance) |
|---|---|---|
| Grant date | Feb 20, 2024 | Mar 11, 2025 |
| Shares granted | 300 | 300 |
| Grant fair value (per share) | $28.00 | $37.90 |
| Vesting start | Jul 1, 2025 | Jul 1, 2026 |
| Vesting schedule | 1/5 annually each Jul 1 for 5 years | 1/5 annually each Jul 1 for 5 years |
Vesting Events (Realized Value)
| Metric | 2023 | 2024 |
|---|---|---|
| Shares vested | 675 | 375 |
| Value realized on vesting ($) | $20,790 (at $30.80/sh on Jul 1, 2023) | $11,438 (at $30.50/sh on Jul 1, 2024) |
Equity Ownership & Alignment
| Metric | As of Apr 1, 2024 | As of Apr 1, 2025 |
|---|---|---|
| Total beneficial ownership (shares) | 8,917 (incl. 3,550 ESOP; 900 restricted) | 9,337 (incl. 3,670 ESOP; 825 restricted) |
| Ownership as % of shares outstanding | <1.0% (Company notation) | <1.0% (Company notation) |
| Shares pledged as collateral | None pledged | None pledged |
| Shares outstanding (reference) | 3,353,810 | 3,355,353 |
Outstanding unvested awards at fiscal year-end:
- 12/31/2023: 600 unvested RS; 375 vest Jul 1, 2024; 225 vest Jul 1, 2025 (market value $16,740 at $27.90/sh) .
- 12/31/2024: 525 unvested RS; 285 vest Jul 1, 2025; 60 vest each Jul 1, 2026–2029 (market value $16,931 at $32.25/sh) .
Supply considerations:
- Scheduled vesting creates potential incremental float (non-sale vestings): 375 shares vested in 2024 and 675 in 2023; sales decisions not disclosed in proxy (Form 4 data not included here) .
Employment Terms
- Change-in-control agreement (amended and restated Jan 6, 2023): double-trigger protection—payout requires a change in control followed within 12 months by termination other than for cause or voluntary termination for qualifying “good reason” (demotion, pay/benefit reduction, relocation >25 miles) .
- Severance multiple: 3× the sum of wages, salary, bonus, and other compensation paid during the 12 months prior to the change in control; lump sum within 30 days of termination; 12 months of continued life/medical/dental/disability coverage; 280G cutback applied .
Potential payments upon CIC termination (estimated at year-end):
| Component | 2023 | 2024 |
|---|---|---|
| Salary (severance) ($) | $731,250 | $789,434 |
| Bonus ($) | $158,607 | $181,808 |
| Benefits ($) | $14,113 | $19,463 |
| Stock awards (accelerated vesting) ($) | $16,740 | $16,931 |
| Total ($) | $920,710 | $1,007,636 |
Board Governance
- Board service: Director since 2020; not independent (CEO). Board has an independent Chair (Kathryn W. Ernstberger), separating CEO and Chair roles .
- Committee memberships: Executive Committee member; not on Audit, Compensation, or Nominating Committees .
- Independence and dual-role implications: With an independent Chair and independent committee structures (Audit/Comp/Nominating members all independent), oversight of CEO compensation and performance is insulated from management influence .
- Say-on-pay support: 2024 advisory vote passed—1,226,019 for; 68,638 against; 78,583 abstentions; 1,070,621 broker non-votes .
Compensation Structure Analysis
- Mix shift: Salary increased year over year ($282,666 in 2024 vs. $262,518 in 2023); cash bonus also rose ($30,733 vs. $27,063), while time-based RS awards of 300 shares were granted in both cycles (vesting over 5 years) .
- Pay-for-performance signals: Bonuses tied to Bank pre-tax income and efficiency thresholds; “compensation actually paid” to PEO decreased 3.4% in 2024 while TSR increased 19.6%, suggesting improved shareholder outcomes despite lower paid comp .
- Equity design: Time-based RSUs vest annually over 5 years; no stock options outstanding—reduces risk of option repricing but also lowers direct leverage to share price performance versus PSUs/options .
- Governance safeguards: Independent Compensation Committee determines CEO compensation and reviews change-in-control arrangements; decisions on CEO pay approved by full Board excluding the CEO .
Equity Ownership & Alignment Details
- Alignment: Beneficial ownership remains <1% with no pledging; ESOP allocations provide voting (not investment) power, and ongoing vesting cadence implies continuing equity accumulation and retention incentives .
- Ownership guidelines and hedging/pledging policies: No explicit executive ownership guideline or hedging policy disclosures in proxy; pledging specifically noted as absent for named individuals .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Compensation Actually Paid to PEO ($) | $314,068 | $376,763 | $364,127 |
| TSR (Value of $100 initial, end-year) ($) | $43.90 | $51.13 | $61.16 |
| Net Income ($) | $11,902,000 | $12,790,000 | $11,940,000 |
- Context: Management attributes pay/TSR dynamics to executive transitions in 2023 and the Company’s TSR trajectory; TSR rose from 2023 to 2024 while PEO “compensation actually paid” fell modestly .
Director Compensation (Context for dual role)
- Non-employee director compensation includes monthly fees and 75-share restricted stock awards; employee directors (e.g., Frederick) receive director fees included in salary ($18,768 for 2023; $19,521 for 2024) .
Related Party and Conflicts
- Loans to directors/officers permitted only on market terms per banking regulations; Board reviews larger loans; Company notes there were no related-party transactions exceeding $120,000 in the last fiscal year .
Investment Implications
- Alignment: Modest direct ownership (<1%) with no pledging, ongoing RS vesting, and ESOP voting power suggests alignment without leverage risk; absence of options removes repricing red flag .
- Compensation risk: Double-trigger CIC with 3× multiple and benefits creates retention-incentive but implies potential payout >$1.0 million as of YE2024—important in deal scenarios .
- Performance signals: Bonus plan tied to profitability/efficiency and 2024 TSR improvement vs. lower PEO “comp actually paid” supports pay-for-performance posture; say-on-pay support adds governance confidence .
- Supply overhang: Scheduled RS vesting (285 shares on Jul 1, 2025; 60 shares annually through 2029) is small relative to float, but monitor Form 4s for any selling pressure post-vesting; proxy shows vesting amounts but not sale activity .
- Dual role governance: Non-independent CEO counterbalanced by independent Chair and independent committees; CEO not on Audit/Comp/Nominating—reduces independence concerns on pay and oversight .