John Martin
FIRST MERCHANTSAbout John Martin
John J. Martin is Executive Vice President and Chief Credit Officer of First Merchants Corporation (FMC), age 58, serving in this role since March 2013 following prior senior credit roles at FMC and National City Bank . Annual incentive pay for 2024 was tied 100% to EPS, with a target of $3.87 and actual operating earnings of $3.41, resulting in an 88% of target payout under the SMICP; Martin’s payout was $176,855, paid in March 2025 . FMC’s proxy includes pay-versus-performance graphical disclosures for TSR, net income, and EPS over the last five years, linking compensation actually paid to these measures .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Merchants Corporation | Executive Vice President & Chief Credit Officer | Mar 2013–present | — |
| First Merchants Corporation | Senior Vice President & Chief Credit Officer | Jun 2009–Mar 2013 | — |
| First Merchants Corporation | First Vice President & Deputy Chief Credit Officer | Jul 2008–Jun 2009 | — |
| First Merchants Corporation | First Vice President & Senior Manager of Lending Process | Jan 2008–Jul 2008 | — |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| National City Bank | Senior Vice President & Regional Senior Credit Officer | May 2000–Dec 2007 | — |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $408,462 | $423,877 | $442,138 |
| Stock Awards ($) | $184,275 | $184,920 | $289,120 |
| Non-equity Incentive Paid ($) | $229,760 | $139,244 | $176,855 |
| All Other Compensation ($) | $53,077 | $53,923 | $60,269 |
| Total ($) | $875,574 | $801,964 | $968,382 |
- 2024 target bonus was 50% of base salary for Martin under SMICP .
- 2024 grants under LTEIP: 8,000 restricted shares on Aug 8, 2024 (grant-date value $289,120; $36.14/share); vests Aug 8, 2027 or earlier upon death/disability; restricted stock awards generally have three-year vesting and are not performance-based .
Performance Compensation
| Component | Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|---|
| SMICP (2024) | Operating EPS | 100% | $3.87/share | $3.41/share | 88% of target; $176,855 | Paid Mar 2025 |
Notes:
- SMICP payouts are capped at 200% of target for the EPS metric, with tiered goals; payouts to NEOs were made in March 2025 .
- No stock options granted to NEOs in 2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 62,614 shares; less than 1% of outstanding shares |
| Unvested RS/Units at 12/31/2024 | 26,379 shares; market value $1,052,358 at $39.89/share |
| Upcoming Vesting (Martin) | 4,955 shares vest Aug 3, 2025; 7,176 vest Feb 8, 2026; 6,105 vest Aug 2, 2026; 8,142 vest Aug 8, 2027 |
| 2024 Stock Vested | 4,458 shares vested Aug 10, 2024; value realized $159,170 at $35.70/share |
| Options | No unexercised option awards outstanding at 12/31/2024 |
| Ownership Guidelines | CEO: 6x salary; Other NEOs: 3x; Section 16 executives: 2x; expected to meet within five years of Oct 31, 2024 |
| Hedging/Pledging | Executives prohibited from hedging or pledging FMC shares |
Vesting policy details:
- LTEIP restricted stock generally vests after three years; one-year minimum vesting; double-trigger vesting upon change of control and qualifying termination; partial vesting may be granted for involuntary termination without cause based on pro rata service .
Employment Terms
| Provision | Details |
|---|---|
| Employment Agreement | FMC does not have employment or severance agreements with NEOs; executives are “at will” under Indiana law |
| Change-of-Control (CoC) | Double-trigger: CoC plus termination/constructive termination within 24 months; no benefits for voluntary retirement, death, disability, or for-cause termination |
| CoC Multiple | 299% of salary + largest SMICP cash incentive in prior two years (Martin) |
| CoC Severance (as of 12/31/2024) | Lump sum $1,865,565; estimated insurance coverage for two years $34,592; options canceled for bargain element value; restricted stock restrictions lapse; non-qualified deferred comp vests; outplacement and legal fee coverage; insurance until earlier of two years or age 65 |
| Clawback | Company may recover payments to executive officers if based on materially inaccurate financial statements |
| Tax Gross-ups | None in compensation programs; no single-trigger CoC agreements; no extravagant perquisites |
| Perquisites (2024) | Car allowance; total perquisites $4,723 for Martin |
| Pension | Martin has not participated in Company-sponsored defined benefit plans; no above-market deferred comp earnings |
Change-of-control economics trend (for John J. Martin):
| Period (as of) | Severance Benefit Amount ($) | Insurance Coverage Value ($) |
|---|---|---|
| Dec 31, 2017 | $1,136,499 | $27,194 |
| Dec 31, 2020 | $1,332,954 | $32,066 |
| Dec 31, 2023 | $1,852,371 | $31,732 |
| Dec 31, 2024 | $1,865,565 | $34,592 |
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay approval: 92.65% for, 7.34% against, 0.01% abstain .
- 2021 Say-on-Pay approval: 91.56% for, 8.43% against, 0.01% abstain .
- 2019 Say-on-Pay approval: 96.28% for, 3.71% against, 0.01% abstain .
- 2018 Say-on-Pay approval: 95.87% for, 3.38% against, 0.74% abstain .
Compensation Committee Analysis
- Committee: Chair Jean L. Wojtowicz; Members Michael J. Fisher, Clark C. Kellogg, Gary J. Lehman; all independent under Nasdaq rules; met 3 times in 2024 .
- Risk mitigations include payout caps, tiered goals, clawback, hedging/pledging prohibitions, minimum vesting, no tax gross-ups, and periodic external compensation consultant reviews .
Investment Implications
- Alignment: Martin’s annual incentive is tied 100% to EPS, and equity is time-based RS with three-year vesting, promoting retention but limiting direct performance leverage from equity; hedging/pledging prohibitions and ownership guidelines (3x salary) strengthen alignment, though RSUs are not performance-based .
- Retention risk and supply overhang: Significant scheduled vesting through 2027 (26,379 unvested shares at YE 2024) indicates ongoing retention hooks; annual vesting events may create periodic insider selling windows depending on liquidity needs and blackout schedules, but no pledging and no options outstanding reduce forced-selling risks .
- CoC protection: Robust double-trigger economics (299% multiple; $1.87M severance at YE 2024 plus insurance) and accelerated vesting reduce departure friction in a transaction scenario, suggesting low personal resistance to strategic M&A if shareholder value is compelling .
- Pay-for-performance signal: 2024 EPS shortfall versus target drove an 88% payout, evidencing disciplined pay outcomes; multi-year strong Say-on-Pay support implies investor acceptance of the program’s balance of cash and equity .