Mark Hardwick
FIRST MERCHANTSAbout Mark Hardwick
Mark K. Hardwick, 54, is Chief Executive Officer of First Merchants Corporation (FRME) and First Merchants Bank, serving as CEO since 2021. He joined FRME in 1997 as Corporate Controller, became CFO in 2002, took on operations/technology/risk leadership from 2007, expanded to COO in 2016, and was named CEO in 2021; he is a Certified Public Accountant and also serves as a director of FRME (since 2021) . Pay-versus-performance shows 2024 EPS of $3.41 and net income of $201.4M, with FRME’s TSR index at 113.97 in 2024 (base 100 = 2019), indicating modest TSR recovery vs. 2023 (101.92) as rates stabilized and earnings remained solid . The annual bonus program is tied primarily to operating EPS, while long-term equity is time-based restricted stock with three-year vesting .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| First Merchants Corporation | CEO | 2021–present | Leads strategy and execution; Board director since 2021 . |
| First Merchants Corporation | COO (plus operations, technology, risk mgmt., legal, facilities) | 2016–2020 | Centralized leadership across key operating and risk functions . |
| First Merchants Corporation | EVP & CFO (also COO responsibilities since 2007) | 2005–2016 (CFO since 2002; added ops/tech/risk in 2007) | Financial leadership through multiple rate cycles and M&A integration . |
| First Merchants Corporation | Corporate Controller | 1997–2002 | Built controllership and reporting foundation . |
| BKD, LLP (now FORVIS Mazars) | Senior Accountant | pre-1997 | Public accounting expertise foundational to CFO/CEO roles . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Ball State University | Trustee; Chair of Audit Committee | n/a | Governance/oversight; aligns with FRME financial expertise . |
| George and Francis Ball Foundation | Director | n/a | Community engagement . |
| Next Muncie | Member | n/a | Local economic/community involvement . |
Fixed Compensation
| Year | Base Salary ($) | Notes |
|---|---|---|
| 2022 | 662,500 | 2022 SCT value |
| 2023 | 721,538 | 2023 SCT value |
| 2024 | 762,547 | SCT value; Committee approved 2024 base rate of $791,000 effective March 2024 |
Perquisites were limited (car allowance and club dues; $15,691 in 2024), and retirement benefits include 401(k) match and a frozen defined benefit (PV $56,348 at 12/31/2024) .
Performance Compensation
- Annual bonus (SMICP): Hardwick’s target was 80% of salary; 2024 performance metric was operating EPS only, with threshold/target/max of $2.72/$3.87/$5.47 per share and payout at 88% of target on $3.41 actual, resulting in a bonus of $448,931 .
- Long-term equity (LTEIP): Time-based restricted stock; no options since 2013; 2024 grant = 21,000 shares at $36.14, vesting August 8, 2027; dividends accrue during vesting .
| Metric (2024) | Weighting | Target | Actual | Payout |
|---|---|---|---|---|
| Operating EPS (diluted GAAP) | 100% (CEO) | $3.87 | $3.41 | 88% of target |
| Equity Awards (Grant date 8/8/2024) | Shares | Grant-date Price | Grant-date Value |
|---|---|---|---|
| Restricted Stock (RSAs) | 21,000 | $36.14 | $758,940 |
Multi-Year Summary Compensation
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | Pension/Deferred ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2022 | 662,500 | 614,250 | 527,163 | 0 | 64,287 | 1,868,200 |
| 2023 | 721,538 | 611,040 | 369,807 | 6,493 | 78,872 | 1,787,750 |
| 2024 | 762,547 | 758,940 | 448,931 | 0 | 108,850 | 2,079,268 |
Notes: Perquisites (car/club) of $15,691 in 2024; 401(k) match $15,525 and additional contribution $6,600 for 2024; reinvested RSU dividends $71,034 . EDCP balance $381,550 with 2024 earnings $56,532 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 125,686 shares (includes 58,067 Restricted Shares, 3,169 Phantom Shares, 446 spouse) |
| Shares outstanding (record date 3/20/2025) | 58,534,988 |
| Ownership as % of outstanding | ~0.21% (125,686 / 58,534,988) |
| Unvested RSAs (12/31/2024) | 58,067 shares valued at $2,316,292 at $39.89 |
| Vesting schedule (unvested) | 16,519 shares on 8/3/2025; 20,174 shares on 8/2/2026; 21,374 shares on 8/8/2027 |
| Options | None outstanding (company hasn’t granted options since 2013) |
| Ownership guidelines | CEO required to hold 6x base salary; all execs expected to comply within 5 years of Oct 31, 2024 |
| Hedging/pledging | Prohibited for executives and directors; pre-clearance and blackout trading windows required |
Insider selling pressure signals:
- 2024 vesting: 9,474 shares vested for Hardwick (value realized $338,237 at $35.70), indicating recurring August vest events; future vesting dates (Aug-2025/2026/2027) may create seasonal supply but are subject to blackout windows and pre-clearance; hedging/pledging prohibited .
Employment Terms
- Employment status: No employment or severance agreement; executives are at-will under Indiana law .
- Change-of-control (CoC): Double-trigger; payout equals 299% of (base salary at termination notice + largest SMICP cash incentive in prior two years) for Hardwick; accelerated vesting of restricted stock; two years of benefits; estimated CoC severance = $3,719,793 plus ~$32,478 in insurance value as of 12/31/2024 .
- Clawback: Adopted 2023 to comply with SEC/Nasdaq Rule 10D-1 .
- Tax gross-ups: None; no single-trigger CoC; no extravagant perquisites .
Board Governance (Director role)
- Board service: Director since 2021; not independent (as CEO) .
- Leadership structure: Independent Chair (Jean L. Wojtowicz); CEO is not Chair, mitigating dual-role concerns .
- Committees: Hardwick is not listed as a member of Audit, Compensation & HR, Nominating & Governance, or Risk & Credit Policy Committees (all independent) .
- Meeting attendance: Board met six times in 2024; no director under 75% attendance .
- Director compensation: CEO receives no separate director compensation .
Director Compensation (Context for Board)
- Non-employee directors received a $140,000 annual retainer (portion in restricted stock under the ECPND); additional fees for Chair/Committee roles; CEO (employee director) receives no director pay .
Compensation & Incentive Structure Analysis
- Cash vs. equity mix: Time-based RSAs remain the dominant LTI (no options since 2013); 2024 stock award increased vs. 2023; annual cash incentive remains meaningful but below LTI in 2024 .
- Shift in risk profile: Move away from options lowers upside/retention risk but reduces performance leverage; three-year cliff RSAs align with retention and shareholder value over time .
- Performance metrics: Annual bonus relies solely on operating EPS (CEO), with caps and tiered bands; 2024 results delivered an 88% payout of target .
- Risk mitigants: Clawback; 200% caps; hedging/pledging ban; trading windows/pre-clearance; stock ownership guidelines (CEO 6x salary) .
Pay Practices, Peer Group, and Say-on-Pay
- Peer group: 20 regional banks (e.g., Old National, WesBanco, Ameris, Atlantic Union); goal to pay near/above median with balanced mix .
- Compensation consultant: Aon engaged; determined independent; fees < $120K in 2024 .
- Say-on-pay: 92.65% support at 2024 AGM; no significant changes made based on that vote .
- Pay vs. Performance: 2024 “Compensation Actually Paid” to CEO was $2.24M vs. SCT total $2.08M; FRME TSR index 113.97; EPS $3.41; Net income $201.4M .
Related-Party Transactions and Red Flags
- Related-party policy and review in place; no reportable (> $120K) related-person transactions requiring disclosure for Hardwick noted in 2024 proxy .
- Risk indicators: No option repricing; no single-trigger CoC; no tax gross-ups; strong say-on-pay; insider trading policy with hedging/pledging bans and Rule 10b5‑1 oversight .
Quantitative Appendices
Hardwick – Unvested and Vesting Schedule (as of 12/31/2024)
| Unvested Shares | Vest Date | Notes |
|---|---|---|
| 16,519 | 8/3/2025 | From prior grants |
| 20,174 | 8/2/2026 | From prior grants |
| 21,374 | 8/8/2027 | 2024 grant (21,000) plus prior awards |
| Market value of all unvested (at $39.89 on 12/31/2024) | $2,316,292 |
2024 SMICP Calibration (CEO)
| Threshold EPS | Target EPS | Max EPS | Actual EPS | Target Bonus % | Payout % of Target | Bonus Paid |
|---|---|---|---|---|---|---|
| $2.72 | $3.87 | $5.47 | $3.41 | 80% | 88% | $448,931 |
| Citations: . |
Beneficial Ownership (CEO)
| Item | Shares |
|---|---|
| Total beneficial (incl. restricted, phantom, spouse) | 125,686 |
| Outstanding common shares (3/20/2025) | 58,534,988 |
| Approx. % of class | ~0.21% (calc) |
Employment & Contracts Detail
- At-will employment; no severance agreement apart from CoC .
- CoC Benefits (illustrative at 12/31/2024): Hardwick multiplier 299%; estimated cash severance $3,719,793; benefit continuation (~$32,478 for two years, estimate); unvested RSAs accelerate upon double trigger .
Board Service History, Committees, Independence
- Director since 2021; not independent as CEO .
- Not a member of Audit, Compensation & HR, Nominating & Governance, or Risk & Credit Policy .
- No separate director compensation .
- Board met 6 times in 2024; no director under 75% attendance .
- Independent Chair; CEO not Chair .
Investment Implications
- Pay-for-performance: Annual incentive tightly tethered to operating EPS; 2024 payout at 88% of target on $3.41 EPS suggests disciplined pay outcome in a higher-rate, margin-compression environment .
- Retention and supply dynamics: Three-year cliff vesting concentrates share releases in early August each year (2025–2027). While blackout windows and pre-clearance apply and hedging/pledging are banned, expect recurring vest events (potential tax-withholding sales) around stated dates to contribute to modest, periodic insider-related supply .
- Governance and risk: Independent Chair, strong say-on-pay (92.65%), no tax gross-ups or single-trigger CoC, and a formal clawback policy reduce governance risk; equity usage via RSAs (vs. options) moderates dilution and aligns with sustained TSR improvement .
- Alignment/skin-in-the-game: CEO ownership guidelines (6x salary) and sizeable unvested equity (58,067 shares) strengthen alignment; prohibitions on hedging/pledging mitigate misalignment and forced-sale risks .
Data sources: First Merchants 2025 Proxy Statement (DEF 14A, April 1, 2025) and 2024 Form 10-K exhibits for insider trading policy. Citations embedded above: DEF 14A [1:xx]; 10-K exhibits [6:xx].