Lars Eller
About Lars Eller
Lars B. Eller, 58, is President and CEO of Farmers & Merchants Bancorp, Inc. and The Farmers & Merchants State Bank, serving since September 2018 and joining the Company as CEO on February 1, 2019. He holds an MBA from McGill University and an undergraduate degree from Concordia University, with prior executive roles at TD Bank, National City Bank, Royal Bank of America, and Cambridge Savings Bank. Under his tenure, 2022–2024 pay-versus-performance disclosures show net income of $32.5M, $22.8M, and $25.9M respectively, and a hypothetical $100 TSR profile of $85, $80, and $99, indicating recovery in 2024 after 2023 compression .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Farmers & Merchants Bancorp, Inc. / The Farmers & Merchants State Bank | President & CEO | 2018–present | Executive management across sales, retail banking, M&A, strategic planning, compensation and incentives; Executive Committee member |
| Royal Bank of America | EVP & Chief Retail Banking Officer | 2013–2017 (acquired 2017) | Led retail banking at a publicly held community bank; integrated through acquisition |
| TD Bank | SVP Retail Banking (PA); Head of National Sales for U.S. Wealth Mgmt | Not disclosed | National and regional leadership in retail and wealth sales |
| National City Bank | Leadership roles | Not disclosed | Market leadership in multiple Ohio markets |
| Clarity Advantage Corporation | Director of Sales & Marketing | Not disclosed | Sales and marketing leadership |
| Cambridge Savings Bank | Consultant | Not disclosed | Advisory work pre-F&M |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Boy Scouts of America | Board Member | Not disclosed | Community leadership |
| Ohio Bankers League | Board Member; Chairs Bank Professional Development Committee | Not disclosed | Industry governance and professional development |
| Toledo Zoo | Board Member | Not disclosed | Regional civic role |
| Parkview Bryan Hospital (Williams County, OH) | Board Member | Not disclosed | Healthcare governance |
| Toledo Museum of Art | Director Circle Crystal Member | Not disclosed | Cultural institution support |
| Bryan Rotary Club | Member | Not disclosed | Community engagement |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $410,573 | $490,000 | $504,700 |
| All Other Compensation ($) | $39,398 | $34,635 | $50,821 |
| Director Fees Treatment | Included in base salary | Included in base salary | Included in base salary |
Key fixed elements and perquisites:
- Employment Agreement (effective Sep 1, 2024–Aug 31, 2027): annual base pay $504,686; benefits eligibility; a monthly auto allowance; Company-maintained $600,000 term life insurance; director stock grant equal to $15,000; restricted stock grants equal to 25% of base pay annually .
- Perquisites detail (2024): HSA/retirement contributions $34,070, life insurance premiums $7,889, automobile allowance $8,862 .
Performance Compensation
Cash-based annual incentive program uses two metrics:
- ROA (Bank level): Target 0.80% for full payout; CEO target equivalent to 30% of base salary, prorated at 0.60–0.80% and increased above target; below 0.60% no payout .
- EPS (Company level): 5% at $1.73, 10% at $1.82, 15% at $1.94; prorated between targets and above $2.66; paid in Q1 following year .
2024 actuals and payout:
- Adjusted ROA 0.828% → 104.3% of ROA incentive; equates to 31.29% of base for CEO; other execs 20.86% of base .
- EPS $1.90 → 113.33% of EPS goal; equates to 13.33% of base for titled executives (CEO and two others) .
- Incentives paid in Q1 2025 .
| Metric | Weighting (Target) | Target | Actual (2024) | Payout (% of Base) | Vesting/Payment Timing |
|---|---|---|---|---|---|
| ROA (Bank) | 30% of base (CEO) | 0.80% | 0.828% | 31.29% | Cash, paid Q1 2025 |
| EPS (Company) | 5–15% of base at thresholds | $1.73 / $1.82 / $1.94 | $1.90 | 13.33% | Cash, paid Q1 2025 |
Multi-year incentive totals for Lars Eller:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Non-Equity Incentive Compensation ($) | $209,448 | $52,920 | $225,197 |
Equity awards under Long-Term Stock Incentive Plan:
- 3-year cliff vest; accelerated on death, disability, or change in control; dividends paid on unvested awards (included in “Compensation Actually Paid” adjustments) .
- Prohibition on option repricing; no discount options; plan administered by independent directors; clawback incorporated .
| Grant Date | Shares Granted | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|
| 3/1/2024 | 5,665 | $114,433 | 100% after 3 years; accelerated on CIC/death/disability |
| Director Stock Award (2024) | Share value equal to $15,000 | $15,007 recognized | N/A (director award) |
Equity Ownership & Alignment
| Ownership Metric | Value |
|---|---|
| Total Beneficial Ownership (Dec 31, 2024) | 26,507 shares |
| % of Shares Outstanding | 0.193% |
| Unvested Restricted Stock | 14,465 shares |
| Scheduled Vesting | 4,000 on 8/23/2025; 4,800 on 3/01/2026; 5,665 on 3/01/2027 |
| Market Value of Unvested at 12/31/2024 | $425,994 (at $29.45/share) |
| 2024 Vesting from 8/17/2021 Grant | 3,000 shares; $76,650 value realized |
| Pledging/Hedging Disclosure | Company has not adopted hedging/offset policies; no specific pledging disclosure noted |
Stock ownership guidelines and pledging restrictions are not disclosed; dividends are paid on unvested awards (which can weaken pure performance linkage) .
Employment Terms
| Term Element | Detail |
|---|---|
| Agreement Term | Sep 1, 2024 – Aug 31, 2027 |
| Base Pay | $504,686 (subject to upward adjustment) |
| Annual Restricted Stock | Grants equal to 25% of base pay |
| Director Equity | Unrestricted common shares equal to non-employee directors’ grant ($15,000 in 2024) |
| Benefits | Participation in annual cash incentive and 401(k); monthly auto allowance; reimbursement of business expenses; Company-maintained $600,000 term life insurance |
| Non-Compete / Non-Solicit | During term: no geographic limit; post-termination: applies to counties where Bank has offices and contiguous counties; 1-year duration |
| CIC Severance (CEO) | 2x the sum of then base pay and average cash bonus/incentives for prior 3 years; 12 months continuation of health, disability, dental, life; subject to 280G/4999 and regulatory limits |
| Potential CIC Payments (as of 12/31/2024) | Severance $1,171,872; Benefits $11,101; Equity acceleration $425,994; Total $1,608,967 |
| Potential Death Benefits | Executive life insurance $100,000; Group term $600,000; Equity acceleration $425,994; Total $1,125,994 |
| Potential Disability Benefits | Annual LTD $233,340; Benefits $11,101; Equity acceleration $425,994; Total $670,435 |
Clawbacks: Company policy compliant with Exchange Act Section 10D-1 and Nasdaq rules; applies to incentive compensation for the three fiscal years preceding a restatement. The 2025 LTIP incorporates this Clawback Policy .
Board Governance
- Board Service: Director since 2018; not independent (as CEO). Board separates Chair and CEO roles to strengthen governance; Chairman is non-employee and independent .
- Committee Roles: Member, Executive Committee; not listed as member of Audit, Compensation, Corporate Governance & Nominating, or ERM Committees .
- Attendance: All directors attended 100% of Board and committee meetings in 2024 .
- Director Compensation: Eller is not separately compensated for meetings; director fees included in base salary; he received stock award equivalent to $15,007 in 2024 .
- Independence Review: Annual review finds all directors independent except Mr. Eller and Mr. Briggs .
Additional Signals and Risk Indicators
- Section 16(a) Filings: Two inadvertent late filings for Eller (and two each for Britenriker and Gerken), with delinquent Form 4s subsequently filed .
- Hedging Policy: Company has not adopted hedging/offset policies, which may allow hedging activity absent internal prohibition .
- Related Parties: Routine banking transactions only; loans on market terms; Audit Committee pre-approves related party transactions per Code of Ethics .
- Say-on-Pay: 2024 advisory vote showed significant support; Company continues annual say-on-pay .
Compensation Peer Group (Benchmarking)
The Compensation Committee benchmarked CEO pay and performance against 22 peer bank holding companies (COFS, FCCB, CZNC, CIVB, CCNE, CTBI, FMNB, FNWD, THFF, INBK, FSFG, FRAF, GABC, IBCP, ISBA, LCNB, MCBC, WBWM, MBCN, MVBF, PWOD, SMMF) with similar asset sizes and regional footprint .
Multi-year Compensation Summary (CEO)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $410,573 | $490,000 | $504,700 |
| Non-Equity Incentive ($) | $209,448 | $52,920 | $225,197 |
| Stock Awards ($) | $122,560 | $124,320 | $129,440 |
| All Other Compensation ($) | $39,398 | $34,635 | $50,821 |
| Total ($) | $781,979 | $701,875 | $910,158 |
Pay vs. Performance (Company-level)
| Year | CEO SCT Total ($) | CEO Compensation Actually Paid ($) | Avg SCT Total Non-PEO NEOs ($) | Avg Compensation Actually Paid Non-PEO NEOs ($) | TSR ($100 initial) | Net Income ($000s) |
|---|---|---|---|---|---|---|
| 2022 | $753,619 | $708,932 | $380,612 | $361,563 | $85 | $32,515 |
| 2023 | $701,875 | $666,819 | $337,707 | $322,661 | $80 | $22,787 |
| 2024 | $910,158 | $1,004,203 | $394,005 | $415,696 | $99 | $25,938 |
Investment Implications
- Alignment and retention: CEO’s equity grants equal to 25% of base pay with 3-year cliff vesting and dividend rights provide moderate long-term alignment and retention, but the relatively low direct ownership (0.193%) and absence of an anti-hedging policy are weaker alignment signals versus best practice (potential for hedging) .
- Near-term supply/insider pressure: Monitor vest dates (8/23/2025: 4,000 shares; 3/01/2026: 4,800; 3/01/2027: 5,665) for potential incremental selling pressure or Form 4 activity; 2024 vesting realized at $25.55 indicates prior monetization capacity .
- Pay-for-performance mechanics: Dual metrics (ROA and EPS) with explicit thresholds and prorations produced a strong 2024 cash payout (31.29% + 13.33% of base), implying management met internal profitability targets despite sector margin pressures; continued attainment would support confidence in execution .
- Change-in-control economics: CEO CIC package at ~$1.61M including equity acceleration and 12 months of benefits (with 280G/4999 constraints) is moderate for size; plan-wide acceleration of awards upon CIC may increase transaction friction for acquirers but not unusually so for the sector .
- Governance quality: Separation of Chair/CEO and independent committee structures are positives; late Section 16 filings are minor operational red flags but remediated; annual say-on-pay support reduces headline risk .