Kent Steinwert
About Kent Steinwert
Kent A. Steinwert, age 72, is Chairman, President, and Chief Executive Officer of Farmers & Merchants Bancorp and has served as a Director since 1998; he became CEO in 1997 and has been Chairman since 2010, bringing 50 years of banking experience across business, agriculture, real estate, and consumer banking . Under his leadership, FMCB reported record net income of $88.5 million in 2024, ROAE of 15.49%, ROAA of 1.64%, efficiency ratio of 46.24%, and tangible book value per share increased from $717.05 to $800.52; liquidity and capital metrics strengthened year-over-year . Pay-for-performance disclosure shows FMCB’s TSR since 12/31/2019 outperformed the S&P 600 Regional Banks peer group by $26.92 (21.7%) through 12/31/2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Farmers & Merchants Bancorp | President & Chief Executive Officer | 1997–present | Led record 2024 net income ($88.5M), strong ROAE/ROAA, improved capital ratios, and TBV/share growth |
| Farmers & Merchants Bancorp | Chairman of the Board | 2010–present | Combined role with CEO; governance mitigants include exclusion from Audit & Risk and Personnel Committees |
| Farmers & Merchants Bancorp | Director | 1998–present | 26 years of board service; committee roles include Nominating (Chair), ALCO, and Loan Committee |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | Proxy states none of the Directors serves on other SEC-reporting company boards |
Board Governance
- Roles: Chairman of the Board; Chairman of the Nominating Committee; Member of Asset Liability Committee and Loan Committee .
- Independence: Not independent due to employment; board has no Lead Independent Director .
- Attendance and cadence: Board (Company and Bank) met 12 times in 2024; all Directors attended >75% of Board and committee meetings; all Directors attended the 2024 annual meeting .
- Dual-role implications: Board asserts combined Chair/CEO is offset by independent-only Audit & Risk and Personnel Committees; Steinwert receives no additional director/committee pay .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary (USD) | $905,327 | $905,327 | $905,327 |
| All Other Compensation (USD) | $3,829,928 | $3,826,251 | $3,863,597 |
| Total Compensation (USD) | $6,135,255 | $6,131,578 | $6,168,924 |
2024 All Other Compensation components:
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Auto Usage | $5,147 | $6,220 | $5,223 |
| Tax Reimbursements (split-dollar BOLI gross-ups) | $25,879 | $25,195 | $27,612 |
| Insurance Premiums | $23,308 | $29,025 | $31,564 |
| Club Dues | $9,049 | $8,064 | $9,573 |
| Company Contributions to Non-Qualified Retirement Plans | $3,728,573 | $3,714,247 | $3,747,806 |
| Company Contributions to Profit Sharing/401(k) | $37,972 | $43,500 | $41,819 |
| Total | $3,829,928 | $3,826,251 | $3,863,597 |
Pay Ratio:
| Metric | 2024 |
|---|---|
| CEO Pay Ratio | 70.1 to 1 |
| Median Employee Compensation | $88,021 |
Performance Compensation
| Metric | Guideline/Target | Actual (2024) | Payout | Vesting/Notes |
|---|---|---|---|---|
| Annual CEO Bonus | 0–200% of base salary | Company met/exceeded net income, ROAE, ROAA, efficiency goals (record net income $88.5M; ROAE 15.49%; ROAA 1.64%; efficiency 46.24%) | $1,400,000 (2022–2024 constant) | No formulaic weighting; Board discretion within guidelines; no discretion above guidelines in 2024 |
| Performance Evaluation Measures | Net Income, ROAA, ROAE, Efficiency Ratio; regulatory exam results; strategic plan progress | As above | Incorporated into bonus decisions | Not prioritized/weighted; subjective analysis |
Restricted Stock Awards (2025 Plan grants post-FY24):
| Item | Detail |
|---|---|
| Grant Date | February 3, 2025 |
| Plan Capacity | Up to 80,000 shares authorized |
| Vesting | Ratable over 2 or 3 years from vesting commencement date |
| Acceleration | Full vesting upon Change of Control, death, disability; retirement vesting at Personnel Committee discretion |
| Dividends on Unvested | Credited/payed only if shares vest |
| Single vs Double Trigger | Plan accelerates on Change of Control (single trigger) |
Equity Ownership & Alignment
| Metric | As of Dec 31, 2024 |
|---|---|
| Shares Outstanding | 699,798 (record date: Mar 14, 2025) |
| Kent A. Steinwert Beneficial Ownership (shares) | 31,538 |
| Ownership (% of outstanding) | 4.51% |
| Shares held via Executive Retirement Plan Trustee | 29,725 |
| Pledged Shares | None; Company has no anti-hedging/anti-pledging policy |
| Director/Officer Group Ownership | 59,570 shares (8.51%) |
Non-Qualified Deferred Compensation (CEO):
| Metric | 2024 |
|---|---|
| Company Contributions | $3,747,806 |
| Aggregate Earnings | $1,177,429 |
| Aggregate Withdrawals/Distributions | $(2,289,375) (in-service distributions) |
| Aggregate Balance at FY End | $40,123,139 |
| Distribution Mechanics | Plan terminated 11/29/2024; balances to be liquidated 12–24 months after termination; equity component distributed largely in FMCB stock (net of tax withholding) |
Alignment Considerations:
- No executive stock options outstanding; no grants under 2025 Plan prior to 12/31/2024; RSAs granted 2/3/2025 add equity-at-risk with multi-year vesting .
- BOLI split-dollar benefits include tax gross-ups; survivor income plan for certain executives implemented in 2023 .
Employment Terms
- Contract Term: Employment agreements for Named Executive Officers (including CEO) are two years, auto-renewing for successive two-year terms unless terminated .
- Severance (no cause/good reason): Lump sum ranging from 12.0 times monthly base compensation to up to 2.0 times highest “Total” annual compensation; plus vested balances in qualified/non-qualified plans; severance conditioned on release/non-announcement .
- Change-of-Control Economics: Up to 2.0x highest “Total” compensation; up to three years of COBRA premiums (up to ~$187k per NEO); accelerated Executive Retirement Plan benefits; 280G tax gross-ups; for certain NEOs, additional $125k–$250k or 0.25%–0.50% of total stockholder value; RSAs fully vest on CoC .
- Non-Compete/Non-Solicit: CoC benefits conditioned on non-compete and non-solicitation agreement and general release .
- BOLI Split-Dollar Vesting: Pre-2023 split-dollar agreements vest after 8 years or upon CoC; if vested and executive leaves outside CoC, employment at another financial institution voids vesting .
- Clawbacks: Not disclosed in proxy –.
Compensation Peer Group
| Peer Banks (illustrative list) | Notes |
|---|---|
| Bank of Marin; Citizens Business Bank; Exchange Bank; Heritage Bank of Commerce; Tri Counties Bank; Bank of Stockton; Bank of the Sierra; Community West Bank; El Dorado Savings Bank; First Northern Bank of Dixon; Five Star Bank; Fremont Bank; Mechanics Bank; Poppy Bank | Committee uses peers for reference; does not target specific percentile, and may also use other banks/surveys; objectives include pay-for-performance and internal parity |
Say-On-Pay & Shareholder Feedback
| Item | Result |
|---|---|
| 2023 Say-on-Pay Approval | 92.95% approval |
| Frequency Vote (2023) | 84.21% approved triennial votes |
| 2024 SOP | Not held (triennial cadence) |
Related Party Transactions
- Family: CEO’s son (Regional SVP, Wholesale Banking) and daughter (VP, Shareholder Relations) are employees; neither reports to CEO; compensation set by Personnel Committee based on manager recommendations and market pay; 2024 compensation for regional wholesale managers ranged ~$844k–$1,283k; shareholder relations manager $199k; son is lowest paid of the three managers .
- Director/NEO Loans: Made in ordinary course on market terms; approved by Board; no unusual risk features .
Risk Indicators & Red Flags
- Combined Chair/CEO; no Lead Independent Director .
- No anti-hedging/anti-pledging policy; though CEO’s shares were not pledged as of 12/31/2024 .
- 280G tax gross-ups and additional CoC cash (including % of total stockholder value) increase parachute costs .
- Large non-qualified plan balances ($40.1M for CEO) and plan termination may lead to significant stock distributions and potential selling pressure within 12–24 months post-11/29/2024 .
- Pay ratio 70.1:1 may attract governance scrutiny in lower-growth environments .
Investment Implications
- Strong multi-year operational execution (record 2024 earnings, superior TSR vs peers) supports pay-for-performance alignment; CEO bonus at fixed $1.4M within 0–200% guideline suggests discipline without above-guideline discretion in 2024 .
- Governance trade-offs: Combined Chair/CEO and absence of a Lead Independent Director offset somewhat by independent-only Audit & Risk and Personnel Committees; however, 280G gross-ups and potential additional CoC payouts are shareholder-unfriendly .
- Watch for insider selling pressure from non-qualified plan liquidation and RSA vesting beginning in 2025–2028, particularly given equity-component distributions in stock; monitoring Form 4s and post-termination plan distributions is prudent .
- Ownership alignment is meaningful (4.51% beneficial ownership), with no pledging as of year-end; lack of anti-hedging/anti-pledging policy remains a standing risk, though current disclosures show no pledged shares .