Joseph Peterson
FIRST MERCHANTSAbout Joseph Peterson
Joseph C. Peterson, 49, is Executive Vice President and Chief Commercial Officer of First Merchants Corporation (FRME), with prior leadership across structured finance and debt capital markets; earlier roles include PNC Bank (SVP, 2007–2014) and GE Capital (VP, 2000–2007) . FRME’s 2024 performance context: net income $201.4 million, diluted EPS $3.41, and TSR value of $113.97 on a $100 initial investment versus peer TSR $130.40 . As an NEO in 2024, his incentives were tied primarily to operating EPS plus commercial line metrics, aligning cash pay with shareholder outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Merchants Corporation | EVP & Chief Commercial Officer | Current | Not disclosed |
| First Merchants Corporation | SVP & President, Structured Finance | Aug 2018–Mar 2024 | Not disclosed |
| First Merchants Corporation | SVP & Director, Debt Capital Markets & Structured Finance | Feb 2016–Aug 2018 | Not disclosed |
| First Merchants Corporation | SVP & Director, Debt Capital Markets | Apr 2014–Feb 2016 | Not disclosed |
| PNC Bank | Senior Vice President | 2007–2014 | Not disclosed |
| GE Capital | Vice President | 2000–2007 | Not disclosed |
External Roles
No public company directorships or external roles disclosed in FRME’s proxy filing for Peterson .
Fixed Compensation
| Metric | 2024 |
|---|---|
| Base Salary | $445,000 |
| Target Bonus % of Salary (SMICP) | 50% |
| Target Bonus $ (Plan-based awards table) | $217,469 |
| Actual SMICP Payout (Cash) | $170,666 |
| All Other Compensation (401k match, reinvested dividends) | $37,022 (401k match $15,525; reinvested dividends $21,497) |
Performance Compensation
| Component | Metric | Weighting | Target | Actual | Payout Factor | Payout $ | Vesting |
|---|---|---|---|---|---|---|---|
| SMICP (Cash) | Operating EPS (diluted GAAP) | 70% | $3.87/share | $3.41/share | Overall: 79% of target | $170,666 | N/A |
| SMICP (Cash) | Commercial LOB Net Contribution | 15% | Not disclosed | Achieved per plan | Included in overall 79% | Included above | N/A |
| SMICP (Cash) | Commercial LOB Total Operating Revenue | 15% | Not disclosed | Achieved per plan | Included in overall 79% | Included above | N/A |
| LTEIP (Equity) | RSUs (Restricted Stock) | N/A | Grant: 8,000 sh @ $36.14 | Granted 8/8/2024 | N/A | Grant-date fair value $289,120 | Vests 8/8/2027; double-trigger vesting on CoC with qualifying termination |
Notes:
- SMICP design caps payouts and uses tiered thresholds; clawback applies to executives for materially inaccurate financials .
- FRME uses restricted stock rather than options; RSUs have three-year standard vesting and one-year minimum .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of 3/20/2025 record date) | 31,584 shares (includes 19,271 restricted shares) |
| Ownership as % of Shares Outstanding | ~0.054% (31,584 ÷ 58,534,988 shares) |
| Unvested RSUs (by tranche) | 2,202 vest 8/3/2025; 5,741 vest 2/8/2026; 3,185 vest 8/2/2026; 8,142 vest 8/8/2027 |
| Market Value of Unvested RSUs (12/31/2024) | $768,720 (19,271 × $39.89) |
| Shares vested during 2024 | 1,114 shares; value realized $39,792 (8/10/2024) |
| Options outstanding | None |
| Hedging/Pledging Policy | Hedging and pledging prohibited for executives |
| Stock Ownership Guidelines | CEO 6× salary; other NEOs 3×; Section 16 executives 2×; expected to satisfy within five years of 10/31/2024 |
Employment Terms
| Provision | Detail |
|---|---|
| Employment Agreement | None; at-will under Indiana law |
| Change-of-Control (CoC) Type | Double-trigger (termination or constructive termination within 24 months post-CoC) |
| CoC Cash Multiple | 2.00× (salary + largest SMICP cash incentive in prior two years) for Peterson |
| Equity Treatment on CoC | RSUs generally require qualifying termination for accelerated vesting (double-trigger) |
| Severance (non-CoC) | Not disclosed |
| Clawback | Adopted to comply with Exchange Act §10D/Nasdaq; recovery for materially inaccurate financials |
| Non-compete/Non-solicit | Not disclosed |
Performance & Track Record
| Indicator | 2024 |
|---|---|
| Company Net Income | $201.4 million |
| Diluted EPS | $3.41 |
| TSR (Value of $100 initial investment) | $113.97 vs Peer TSR $130.40 |
Compensation Committee & Peer Benchmarking
- Compensation Committee: Independent directors; chaired by Jean L. Wojtowicz (2024–2025), met three times in 2024; oversees human capital, incentives, and risk .
- Consultant: Aon; reviewed executive compensation and provided recommendations; assessed as independent with fees <1% of Aon revenue .
- Peer Group (2024): 20 regional banks (e.g., Old National, WesBanco, United Community Banks) selected by asset size and metrics .
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay approval: 92.65% for NEO compensation .
- Board and management engaged shareholders holding >25% of shares post-2024 meeting .
Compensation Structure Analysis
- Mix: Cash (salary + SMICP) and equity (RSUs), with three-year vesting and clawback — reduces excessive risk-taking .
- Shift to RSUs: Company discontinued options since 2013; RSUs favored for alignment and simplicity .
- Ownership Alignment: New guideline of 3× salary for NEOs; hedging/pledging prohibited; long holding expectations .
- Discretion: Committee can adjust SMICP metrics for extraordinary items per plan, but 2024 payouts followed plan schedules; Peterson’s weighting tailored to commercial performance .
Related Party Transactions and Red Flags
- Hedging/Pledging: Prohibited for executives — reduces misalignment risk .
- Tax Gross-ups: None in executive programs .
- Repricing of Options: No stock options outstanding for Peterson; Company hasn’t granted options since 2013 .
- Section 16 Reporting: No delinquency disclosures specific to Peterson noted; general Section 16(a) disclosures present in proxy TOC .
Investment Implications
- Pay-for-performance alignment: Cash incentive relies heavily on operating EPS with line-of-business metrics; Peterson’s 2024 payout was 79% of target, indicating discipline when EPS underperformed target ($3.41 vs $3.87) .
- Supply overhang and vesting calendar: Unvested RSUs total 19,271 shares with staggered vesting through 2027, creating periodic potential selling pressure absent ownership guideline accumulation or tax-withholding net share retention .
- Retention and CoC economics: Double-trigger CoC and a 2.0× multiple for Peterson balance retention without excessive parachute risk; equity acceleration requires qualifying termination, limiting windfall scenarios .
- Ownership alignment: Small personal stake (~0.054% of shares) but reinforced by 3× salary ownership guidelines and anti-hedging/pledging policies, supporting alignment over time .
- Governance support: Strong Say-on-Pay (92.65%) and independent committee oversight with consultant input reduce compensation-related headline risk .