Michael Stewart
FIRST MERCHANTSAbout Michael Stewart
Michael J. Stewart is President of First Merchants Corporation (FMC), serving in this role since January 1, 2021; he is 59 years old . His background includes senior banking and credit leadership roles at FMC and National City, providing deep operating experience across lending and banking functions . Company performance under his executive tenure shows 2024 EPS of $3.41 and net income of $201.4 million, alongside a total shareholder return index value of 113.97 for 2024 versus 130.40 for the peer group . Annual incentives for 2024 were tied entirely to diluted GAAP operating EPS with payouts at 88% of target based on $3.41 achieved vs $3.87 target, reinforcing earnings-linked pay-for-performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Merchants Corporation | President | Jan 1, 2021–present | — |
| First Merchants Corporation | Executive Vice President & Chief Banking Officer | Feb 2008–Dec 2020 (ended upon becoming President) | — |
| National City Corp | Executive Vice President | Dec 2006–Feb 2008 | — |
| National City Bank of Indiana | Executive Vice President & Chief Credit Officer | Dec 2002–Dec 2006 | — |
Fixed Compensation
Multi-year compensation (Summary Compensation Table):
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Salary ($) | 507,856 | 588,564 | 620,308 | 641,769 |
| Stock Awards ($) | 330,692 | 409,500 | 410,040 | 578,240 |
| Non-Equity Incentive Plan Compensation ($) | 391,049 | 417,680 | 271,695 | 308,049 |
| All Other Compensation ($) | 64,070 | 66,545 | 75,644 | 89,884 |
| Total ($) | 1,293,667 | 1,482,289 | 1,377,687 | 1,617,942 |
Base salary adjustments:
| NEO | 2023 Base Salary | 2024 Base Salary |
|---|---|---|
| Michael J. Stewart | $624,000 | $645,000 |
Notes:
- All Other Compensation for Stewart includes reinvested dividends on restricted stock awards valued at $34,603 (2022), $40,170 (2023), and $50,460 (2024), plus perquisites of $17,299 in 2024 (car allowance and country club dues) .
Performance Compensation
2024 SMICP incentive design and outcomes (cash, paid March 2025):
| Item | Detail |
|---|---|
| Metric | Operating earnings (diluted GAAP EPS) – 100% weighting |
| Threshold | $2.72/share for 50% of target |
| Target | $3.87/share for 100% of target |
| Maximum | $5.47/share for 200% of target |
| Target bonus % of base | 60% (Stewart) |
| Actual EPS | $3.41/share |
| Payout factor | 88% of target (Stewart) |
| Cash paid | $308,049 |
| Payment timing | March 2025 |
2025 SMICP schedule (forward design):
| Executive | Threshold (% salary) | Target (% salary) | Maximum (% salary) |
|---|---|---|---|
| Michael J. Stewart (President) | 30.0% | 60.0% | 120.0% |
Equity Ownership & Alignment
Beneficial ownership and outstanding equity:
| Item | Value |
|---|---|
| Shares beneficially owned (Record Date 2025) | 100,266; less than 1% of shares outstanding |
| Unvested restricted stock outstanding (12/31/2024) | 40,835 shares; $1,628,908 market value at $39.89/share |
| Options outstanding | None (no unexercised options) |
Restricted stock grants and vesting:
| Grant Date | Shares | Grant-Date Value/Share | Total Fair Value | Vesting |
|---|---|---|---|---|
| Aug 8, 2024 | 16,000 | $36.14/share | $578,240 | Aug 8, 2027; accelerates on death/disability; double-trigger CoC |
Unvested tranches (as of 12/31/2024):
| Tranche Vest Date | Shares |
|---|---|
| Aug 3, 2025 | 11,012 |
| Aug 2, 2026 | 13,537 |
| Aug 8, 2027 | 16,285 |
Additional alignment policies:
- Executives are entitled to vote and receive dividends on restricted stock; Stewart’s reinvested dividends totaled $50,460 in 2024 .
- Hedging and pledging of FMC shares by executive officers are prohibited .
- Stock ownership guidelines require executives to hold FMC stock equal to specified percentages of salary; percentages not detailed in proxy .
Employment Terms
| Provision | Detail |
|---|---|
| Employment agreements | None; company does not have employment agreements with NEOs |
| Clawback policy | Adopted in 2023 to comply with Exchange Act Section 10D/Nasdaq rules; applies to executive officer incentive payments based on materially inaccurate financial statements |
| Change-of-control (CoC) | Double-trigger; severance if CoC followed by termination/constructive termination within 24 months; no payment if termination for cause or due to death, disability, voluntary retirement |
| Severance multiple | 299% of (base salary at termination notice + largest SMICP cash incentive in prior two years) for Stewart |
| Estimated CoC severance (as of 12/31/2024) | $2,859,147 lump sum; plus estimated two-year insurance coverages $25,094; options canceled with cash for any bargain element (none outstanding); restricted stock restrictions lapse; nonqualified deferred comp vests |
| Pension/DB participation | Stewart has not participated in company-sponsored defined benefit/actuarial pension plan |
Performance & Track Record
Company performance markers:
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Net Income ($000) | 205,500 | 222,100 | 223,800 | 201,400 |
| EPS ($) | 3.81 | 3.81 | 3.73 | 3.41 |
| TSR – value of $100 investment ($) | 107.02 | 108.22 | 101.92 | 113.97 |
| Peer Group TSR – $100 investment ($) | 124.74 | 116.10 | 115.64 | 130.40 |
Compensation governance signals:
- Say-on-pay approval: 95.13% at 2023 meeting; 92.65% at 2024 meeting .
- Peer benchmarking references include Aon study inputs used by the Compensation and Human Resources Committee .
Investment Implications
- Pay and performance linkage: Stewart’s annual incentive is 100% tied to diluted GAAP operating EPS with calibrated thresholds/targets; the 2024 payout at 88% of target on $3.41/share indicates disciplined earnings-sensitive variable pay .
- Equity mix and retention: Time-based restricted stock vests over three years and is not performance-based; upcoming vest tranches in Aug 2025, Aug 2026, and Aug 2027 could create periodic liquidity events and retention hooks, but carry less performance contingency risk .
- Alignment safeguards: FMC prohibits hedging and pledging, and maintains a Dodd-Frank/Nasdaq-compliant clawback, reducing misalignment and recovery risk on erroneously based payouts .
- Change-of-control economics: A 299% double-trigger severance for Stewart with accelerated vesting and continued benefits is generous; while standard in banking, it increases transaction-related costs and may influence executive incentives around strategic alternatives .
- No employment contract and no options: Absence of an employment agreement and zero outstanding options reduce repricing risk and contractual rigidity; equity incentives are primarily RSUs with dividend rights, reinforcing long-term shareholding behavior .
- Shareholder sentiment: Strong say-on-pay support (>92% in 2024; >95% in 2023) suggests investors view the program as appropriately structured, limiting governance overhang .