Michele Kawiecki
FIRST MERCHANTSAbout Michele Kawiecki
Michele M. Kawiecki is Executive Vice President and Chief Financial Officer of First Merchants Corporation (FRME). She has served as CFO since January 1, 2021, and joined FRME in March 2015 as SVP & Director of Finance; age 52 as of the 2025 proxy. Prior roles include senior finance, corporate development, capital management and chief risk officer positions at UMB Financial. Pay-for-performance at FRME ties annual bonuses for the CFO primarily to operating diluted EPS, with 2024 EPS of $3.41 vs a $3.87 target (88% of target payout); Pay vs. Performance disclosures show five-year FRME TSR of $113.97 on a $100 base in 2024 (below peer KBW Regional Bank Index TSR of $130.40) and EPS of $3.41, $3.73, and $3.81 in 2024, 2023, and 2022, respectively .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Merchants Corporation | EVP & CFO | Jan 2021–Present | Leads finance function and capital allocation for ~$18.3B asset bank holding company . |
| First Merchants Corporation | SVP & Director of Finance | Mar 2015–Dec 2020 | Built finance capabilities pre- and post-acquisitions; supported earnings and capital planning . |
| UMB Financial Corporation | SVP, Capital Management & Assistant Treasurer | May 2011–Mar 2015 | Led capital management; assistant treasurer responsibilities . |
| UMB Financial Corporation | Director, Corporate Development & Enterprise PMO | May 2008–May 2011 | Drove corporate development and change initiatives . |
| UMB Financial Corporation | Chief Risk Officer | Feb 2004–May 2008 | Enterprise risk leadership . |
External Roles
No external public company directorships or outside roles disclosed for Ms. Kawiecki in the 2023–2025 proxies .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 425,577 | 465,204 | 482,384 |
| Target Annual Bonus (% of Salary) | 50% | 50% | 60% |
| Actual Annual Incentive Paid ($) | 232,260 (paid Mar-2023) | 169,809 (paid Mar-2024) | 206,384 (paid Mar-2025) |
| All Other Compensation ($) | 57,098 | 63,473 | 76,757 |
| Total Reported Compensation ($) | 1,001,585 | 1,004,006 | 1,235,345 |
Performance Compensation
Annual SMICP (cash) design and outcomes
| Year | Metric | Weight | Target | Actual | Payout Factor | Payout ($) |
|---|---|---|---|---|---|---|
| 2024 | Operating diluted EPS | 100% | $3.87 | $3.41 | 88% of target | 206,384 |
| 2023 | Operating diluted EPS | 100% | $4.60 | $3.73 (adj. to $3.87 per plan) | 73% of target | 169,809 |
| 2022 | Operating diluted EPS | 100% | $3.51 | $3.81 | 125% of target | 232,260 |
LTEIP (equity) restricted stock awards
| Grant Date | Shares Granted | Grant-Date Fair Value ($) | Vesting | Notes |
|---|---|---|---|---|
| Aug 8, 2024 | 13,000 | 469,820 | 100% on Aug 8, 2027 (3-year), double-trigger CoC | Dividends and voting during restriction; hedging and pledging prohibited . |
| Aug 2, 2023 | 9,500 | 305,520 | 100% on Aug 2, 2026 (3-year), double-trigger CoC | Dividends and voting; hedging/pledging prohibited . |
| Aug 3, 2022 | 7,000 | 286,650 | 100% on Aug 3, 2025 (3-year), double-trigger CoC | Dividends and voting; hedging/pledging prohibited . |
- Program design: LTEIP awards are time-based RS, not performance-based; minimum 1-year vesting; standard practice is 3-year cliff. CoC vesting generally requires double trigger (CoC plus qualifying termination) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 53,093 shares (includes restricted) (<1% of shares outstanding) . |
| Unvested Restricted Stock (12/31/24) | 36,768 shares (market value $1,466,675 at $39.89) . |
| Options Outstanding | None (no unexercised options) . |
| 2024 Stock Vested (value) | 5,851 shares vested on Aug 10, 2024; $208,911 realized (at $35.70) . |
| Ownership Guidelines | CEO 6x salary; other NEOs 3x salary; other Section 16 officers 2x; expected to meet within 5 years of Oct 31, 2024 and maintain thereafter . |
| Hedging/Pledging | Prohibited for executive officers (and short sales prohibited), supporting alignment . |
Unvested vesting schedule (as of 12/31/24)
| Vest Date | Shares |
|---|---|
| Aug 3, 2025 | 7,708 |
| Feb 8, 2026 | 5,741 |
| Aug 2, 2026 | 10,087 |
| Aug 8, 2027 | 13,231 |
Implication: Three consecutive annual cliffs (2025–2027) imply recurring tax-withholding/sale activity potential at vest, but no options-driven selling pressure (no options outstanding) .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | None; at-will . |
| Change of Control (CoC) | Double-trigger: CoC plus termination/constructive termination within 24 months. Lump sum severance = 2.99x (salary + largest SMICP cash bonus in prior 2 years); accelerated RS vesting; unvested nonqualified deferrals vest; up to 2 years of benefits; outplacement/legal fees . |
| CoC Severance Illustrative Amount (12/31/24) | $2,074,152 for Ms. Kawiecki; estimated insurance coverages $34,090 (no options outstanding) . |
| Clawback | Policy adopted in 2023; recovery of pay based on materially inaccurate financial statements; compliant with SEC and Nasdaq rules . |
| Tax Gross-Ups | None disclosed; Company highlights absence of gross-ups and single-trigger CIC . |
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay approval: 92.65% FOR, 7.34% AGAINST, 0.01% ABSTAIN; committee made no significant changes based on the vote .
Performance & Track Record
| Measure | 2022 | 2023 | 2024 |
|---|---|---|---|
| Operating Diluted EPS (for incentive plan) | $3.81 | $3.73 (adjusted to $3.87 per plan for payout) | $3.41 |
| Company TSR (Value of $100) | 108.22 | 101.92 | 113.97 |
| Peer TSR (KBW Regional Bank Index) | 116.10 | 115.64 | 130.40 |
| Net Income ($000) | 222,100 | 223,800 | 201,400 |
- Annual bonus outcomes tracked EPS results: 125% of target (2022), 73% (2023), 88% (2024) for the CFO under the SMICP’s EPS metric .
- Time-based equity supports retention; no PSU/TSR-based long-term awards, which lowers performance linkage but maintains equity exposure with ownership/holding requirements .
Compensation Committee & Peer Benchmarking
- Independent consultant (Aon) engaged; total fees <1% of Aon revenue; determined independent; Committee targets near/above market median with mix of cash/equity and short-/long-term incentives .
Related-Party Transactions / Red Flags
- No executive employment agreements; no tax gross-ups; anti-hedging and anti-pledging policies; compensation risk oversight and clawback policy in place .
- No option repricing; no related-party transactions noted for the CFO in proxies .
Investment Implications
- Alignment: Annual incentives are tightly linked to operating EPS (single metric) with clear payout curves; recurring 3-year RSU cliffs and ownership/holding policies reinforce long-term alignment; anti-hedging/pledging is a positive governance signal .
- Retention risk: Double-trigger 2.99x CIC protections and staggered RSU vesting through 2027 reduce near-term retention risk; absence of employment contracts provides flexibility but could be a risk in a hostile environment .
- Performance linkage: LTI is time-based, not performance-based; consider whether adding PSUs/TSR metrics would strengthen pay-for-performance given FRME TSR trailed peer TSR in 2024 (113.97 vs 130.40) while annual EPS metrics drive cash payouts .
- Trading/selling pressure: Expect withholding-related stock releases around August 2025–2027 vest dates; no option overhang .