David Gerken
About David Gerken
David R. Gerken (age 53) serves as Executive Vice President and Chief Lending Officer (CLO) of Farmers & Merchants Bancorp, Inc. (FMAO), appointed January 22, 2024; he has been an officer since 2016 . Company performance context for 2024 included adjusted ROA of 0.828% (above 0.80% target) and EPS of $1.90, which drove above-target annual cash incentive payouts for executives . Over 2022–2024, total shareholder return (hypothetical $100 investment) moved from $85 (2022) to $80 (2023) to $99 (2024), with 2024 net income of $25.9 million .
Past Roles
| Organization | Role | Years | Strategic Impact / Notes |
|---|---|---|---|
| Farmers & Merchants Bancorp, Inc. / The Farmers & Merchants State Bank | EVP & Chief Lending Officer | Jan 22, 2024 – Present | Named EVP & CLO effective 1/22/2024 . |
| The Farmers & Merchants State Bank | SVP & Senior Commercial Banking Manager | Jan 18, 2019 – Jan 21, 2024 | Led senior commercial banking prior to CLO role . |
| FMAO | Officer (various) | 2016 – Present | Officer since 2016 . |
Fixed Compensation
| Year | Base Salary ($) | All Other Compensation ($) | All Other Compensation Detail |
|---|---|---|---|
| 2024 | 248,846 | 20,712 | HSA/retirement contributions $19,474; life insurance premiums $1,238 . |
Performance Compensation
Annual Cash Incentive (2024)
| Metric | Structure / Target | Actual (2024) | Payout Formula | Payout Achieved |
|---|---|---|---|---|
| ROA (Bank) | Target ROA 0.80% → 20% of base salary for execs at target; 0.60% threshold for 70% payout; prorates; >0.80% increases | Adjusted ROA 0.828% | 104.3% of target; CEO 31.29% of base; other execs 20.86% of base | 20.86% of base salary for Gerken . |
| EPS (Company) | EPS thresholds: $1.73=5%, $1.82=10%, $1.94=15% of base for titled execs; prorates; below certain threshold no payout; annually set | $1.90 | Prorated 113.33% of total goal | 13.33% of base salary for titled execs (incl. Gerken) . |
| Total Cash Incentive | — | — | — | $85,081 paid for 2024 performance (Q1’25 timing) . |
Equity Awards and Vesting
| Grant Date | Award Type | Shares Granted | Grant Date Fair Value ($) | Vesting Schedule | Accelerated Vesting Triggers |
|---|---|---|---|---|---|
| 3/1/2024 | Restricted Stock (RS) | 2,245 | 45,349 | 3-year cliff; vests 3/1/2027 | Death, disability, or change in control (Plan) . |
| Outstanding Unvested Equity (12/31/2024) | Shares | Market Value ($) | Vesting Dates Disclosed |
|---|---|---|---|
| Unvested RS | 4,745 | 139,740 (at $29.45) | 2,245 vest on 3/1/2027 . |
2024 Stock Vesting (legacy grant)
| Vesting Date | Shares Vested | Value Realized ($) |
|---|---|---|
| 8/17/2024 (from 8/17/2021 grant) | 1,000 | 25,550 (at $25.55) |
Equity Ownership & Alignment
| Beneficial Ownership (12/31/2024) | Shares | % of Outstanding | Notes |
|---|---|---|---|
| David R. Gerken | 4,745 | 0.035% | Beneficial holdings equal to unvested RS reported; no additional holdings disclosed . |
- Hedging/pledging: Company states it has not adopted any hedging practice or policies for insiders; insider trading policy is adopted and filed as an exhibit to the 2024 10-K . No pledging disclosures specific to Gerken were provided in the proxy .
- Ownership guidelines: No executive stock ownership guidelines disclosure found for executives in the proxy; not discussed for Gerken (no mention).
- Clawback: FMAO maintains a recoupment policy compliant with SEC/Nasdaq; the 2025 LTI Plan incorporates the Executive Compensation Clawback Policy .
Employment Terms
| Item | Disclosure |
|---|---|
| Employment agreement | The proxy details a new CEO agreement effective 9/1/2024, but does not disclose an individual employment agreement for Gerken . |
| Change-in-control cash severance | CIC severance agreements disclosed for the CFO (2x) and CRO (1x), and CIC terms in the CEO agreement; Gerken is not listed among executives with a standalone CIC cash severance agreement . |
| Death benefits | Executive Survivor Income Agreement $100,000; Group term life $501,000; acceleration of unvested stock $139,740; total $740,740 (hypothetical as of 12/31/2024) . |
| Disability benefits | The table presented includes CEO, CFO, and CRO; no separate disability payout line for Gerken was provided in the proxy tables . |
| Non-compete / non-solicit | Not disclosed for Gerken (CEO terms only described) . |
| Post-termination equity | Unvested equity accelerates upon death, disability, or change-in-control under plan provisions . |
Compensation Structure Context (Pay-for-Performance)
- Program design and peers: Executive pay aims to balance shareholder alignment and talent retention; benchmarking uses 22 publicly traded bank holding companies (e.g., COFS, FCCB, CZNC, CIVB, CCNE, CTBI, FMNB, FNWD, THFF, INBK, FSFG, FRAF, GABC, IBCP, ISBA, LCNB, MCBC, WBWM, MBCN, MVBF, PWOD, SMMF) .
- Long-term incentives: Primary vehicle is restricted stock with 3-year cliff vesting; grants typically in March; acceleration on death/disability/CIC .
- Clawback: Applies to incentive-based comp for current/former executive officers in the event of an accounting restatement; covers 3 completed fiscal years prior to restatement trigger .
- Say-on-pay: 2024 advisory vote showed significant support; no major program changes implemented; annual say-on-pay to continue .
Related Party Transactions and Compliance
- Related party transactions: Loans/transactions with insiders in 2024 were in ordinary course and on substantially the same terms as with unrelated parties; no other material related party transactions disclosed .
- Section 16 compliance: Two inadvertent late filings apiece for Lars B. Eller, Barbara J. Britenriker, and David R. Gerken; delinquent Form 4s have been filed .
Board Governance (not a director)
- Gerken is an executive officer (EVP & CLO) and not listed as a director; board committee roles listed in the proxy are for directors .
Investment Implications
- Alignment and retention: Gerken’s low direct beneficial stake (0.035%) and predominantly unvested equity (4,745 shares) suggest alignment via retention-focused RSUs rather than outright ownership; a known vesting of 2,245 shares on 3/1/2027 may create modest, date-specific selling pressure absent 10b5-1 arrangements .
- Pay-performance linkage: 2024 cash incentive outcomes were formulaic and tied to ROA and EPS, with ROA above target (0.828% vs 0.80%) and EPS at $1.90, leading to combined ~34% of base salary payout for titled executives; this indicates a tangible pay-for-performance link .
- CIC economics: Unlike the CEO/CFO/CRO, Gerken is not listed with a standalone CIC cash severance agreement; equity accelerates under CIC but absence of cash severance could present retention risk for the CLO role in sale scenarios .
- Governance risk flags: The company has an insider trading policy, but discloses no hedging policy; two late Section 16 filings by Gerken signal minor process lapses but were remediated via subsequent filings .
Appendices
2024 Company Performance Reference (for context)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($000s) | 32,515 | 22,787 | 25,938 |
| TSR: $100 initial investment | $85 | $80 | $99 |
Key Plan/Policy Provisions
- 2025 Long-Term Stock Incentive Plan replaces 2015 plan; 2,000,000 shares authorized; prohibits repricing; no evergreen; committee of independent directors administers; incorporates clawback .
- Awards (options, SARs, RS/RSUs, performance shares) may include performance metrics such as EPS, revenue, ROA/ROE, etc.; time/performance vesting with immediate vesting on death, disability, or change-in-control unless award agreement states otherwise .
- Insider trading policy adopted (filed as Exhibit 19 to 2024 10-K); company has not adopted hedging practices/policies for insiders .
All data reflect disclosures in FMAO’s 2025 DEF 14A proxy (filed March 3, 2025). Citations in brackets reference proxy document IDs and chunk indices.