Edward Corum Jr

About Edward Corum Jr

Edward Corum Jr (age 72) is an independent director of Farmers & Merchants Bancorp, serving since 2003. He is Managing General Partner at Corum Real Estate and provides real estate and financial expertise, with deep engagement in the Sacramento market area. He currently chairs FMCB’s Personnel Committee, serves on the Nominating and Audit & Risk Committees, and is Co‑Chairman of the Bank’s Loan Committee; no education details are disclosed in the proxy .

Past Roles

External Roles

Board Governance

• Independence: Corum is independent under Nasdaq Rule 5605; only Steinwert (CEO) and Skinner (recent employee) are non‑independent .
• Attendance and engagement: Company and Bank boards met 12 times in 2024; each incumbent director attended ≥75% of board and committee meetings, and all directors attended the May 2024 annual meeting .
• Lead Independent Director: The Board has not designated a lead independent director .
• Committee memberships and cadence:
  • Personnel Committee: Chairman; 10 meetings in 2024; all members independent .
  • Audit & Risk Committee: Member; 18 meetings in 2024; committee composed of independent directors; chair designated “financial expert” .
  • Nominating Committee: Member; 1 meeting in 2024; mix of independent directors .
  • Loan Committee: Co‑Chairman; meets weekly (52 times in 2024); joint management/director oversight of credit approvals and portfolio risk .

Fixed Compensation

• Standard director fee schedule: $3,200 per board meeting; $1,000 per committee meeting (committee chair $1,200, Audit & Risk chair $1,400); outside directors eligible for annual cash bonus and medical subsidy up to $550/month .
• Note: Corum’s higher fees reflect weekly Loan Committee duties (Co‑Chair) versus monthly committees for other directors .

Performance Compensation

• Director bonus determination: Outside directors received an annual cash bonus, determined by the Personnel Committee based on Company performance; specific director targets are not detailed .

• Company performance metrics informing compensation philosophy and pay‑for‑performance: | Metric | 2023 | 2024 | |---|---:|---:| | Net Income ($mm) | 88.3 | 88.5 | | Diluted EPS ($) | 116.61 | 121.02 | | Net Interest Margin (%) | 4.30 | 4.05 | | Efficiency Ratio (%) | 45.3 | 46.24 | | ROAA (%) | 1.68 | 1.64 | | ROAE (%) | 17.05 | 15.49 | | Total Assets ($bn) | 5.3 | 5.37 | | Total Deposits ($bn) | — | 4.70 | | Credit quality (NPL, $mm) | 0.0 | 0.9 |

• 2025 Restricted Stock Retirement Plan: Directors may elect restricted stock in lieu of cash; awards vest generally over one year; change‑of‑control accelerates vesting. Annual grant‑date fair value cap for outside directors is $450,000 (excludes awards in lieu of retainer/meeting fees). Initial share reserve 80,000 with annual evergreen of up to 2.5% of outstanding shares at Committee’s discretion .

Other Directorships & Interlocks

Expertise & Qualifications

• Real estate and financial expertise; active in Sacramento market area .
• Long tenure (21–22 years) provides continuity and institutional knowledge .
• Audit & Risk Committee experience; oversight of internal controls and regulatory matters .
• Chair of Personnel Committee; direct involvement in executive/deferred compensation program design and transition to equity plan .

Equity Ownership

Governance Assessment

• Strengths:

  • Independence and multi‑committee roles (Personnel chair; Audit & Risk member; Loan Co‑Chair) bolster oversight across compensation, controls, and credit risk .
  • Robust meeting cadence (weekly loan; frequent audit) indicates active engagement; directors met attendance thresholds and attended annual meeting .
  • Transition from non‑qualified cash‑based plans to restricted stock for directors aligns pay more closely with shareholder outcomes; evergreen capped and director grant limits in place .

• Potential concerns and watch items:

  • No lead independent director designated, which may dilute independent board leadership in a combined Chair/CEO structure .
  • Related‑party banking relationships (director/executive loans) require sustained scrutiny—even if on ordinary terms—given weekly loan committee involvement; Board approval mitigates but remains a perceived conflict risk .
  • Company lacks an anti‑hedging/anti‑pledging policy; while disclosure notes no pledging, absence of policy is a governance red flag for alignment .
  • Change‑of‑control provisions in the 2025 equity plan accelerate vesting for unvested director awards; investors may prefer double‑trigger structures to enhance discipline .
  • Director compensation increased year‑over‑year (fees +8.3%) driven by weekly loan committee load; ensure pay reflects workload and performance, avoiding excess relative to peers .

• Shareholder sentiment indicators:

  • Say‑on‑pay approved with 92.95% support in 2023; triennial vote frequency preferred (84.21% support), signaling broad acceptance of compensation approach; ensure director equity transition maintains high support .

Related Party Transactions (Conflict Monitoring)

• Directors and Named Executive Officers (and associates/family) engaged in ordinary‑course banking transactions, including loans, on substantially market terms. All such loans require Board approval and did not involve abnormal collectability risk or unfavorable features .
• Personnel Committee members had loans in 2024 on market terms; transactions are exempt from SOX loan prohibitions but warrant monitoring due to committee oversight of compensation .

Compensation Structure Analysis

• Shift from non‑qualified deferred cash contributions (Equity Component) to restricted stock for directors beginning 2025 reduces complexity and enhances transparency. Outside directors can elect quarterly cash in lieu of restricted stock; equity awards to directors capped by fair value and vest over one year; change‑of‑control accelerates vesting .
• Year‑over‑year mix: Director cash fees rose modestly; deferred equity component contributions remained substantial in 2024 pending plan transition; 2025 grants to be administered under the new plan framework .

Employment & Contracts

• As a non‑employee director, Corum does not have an executive employment agreement; director compensation follows fee schedule and bonus/plan participation terms set by the Board/Personnel Committee .

Performance & Track Record

• Company continued strong profitability and capital/credit metrics across 2023–2024, supporting director performance‑based bonus determinations, though director‑specific targets are not enumerated .
• Audit firm transition in 2024 executed without disagreements/reportable events; Audit & Risk Committee (including Corum) oversaw selection and independence safeguards .

Equity Ownership & Alignment (Additional Notes)

• Executive Retirement Plan termination effective Nov 29, 2024; liquidations must occur 12–24 months post‑termination; directors’ Equity Component balances primarily invested in Company stock, reinforcing skin‑in‑the‑game, with distributions partly in stock .
• 2025 Restricted Stock Retirement Plan effective Jan 1, 2025; outside directors may receive RSAs; change‑of‑control accelerates vesting; dividends on unvested shares only payable if shares vest .

RED FLAGS

• Absence of lead independent director .
• No anti‑hedging/anti‑pledging policy, despite disclosure of no pledging .
• Related‑party loans to directors/committee members (ordinary terms but persistent optics risk) .
• Single‑trigger vesting on change‑of‑control for restricted stock awards .

Overall implication: Corum’s long tenure, independence, and multi‑committee leadership enhance board effectiveness in compensation, risk, and credit oversight. Governance risks to monitor include the lack of a lead independent director, related‑party lending optics, and equity plan acceleration features; the 2025 shift to director restricted stock should improve alignment if implemented with prudent grant sizing and retention terms .