Stephan Fluhler
FIRST MERCHANTSAbout Stephan Fluhler
Stephan H. Fluhler is Senior Vice President and Chief Information Officer (CIO) of First Merchants Corporation (FMC) since May 2014; previously FMC’s Chief Technology Officer from 2004 to May 2014 and Director of Technology Services and Change Management from December 2003 to 2004. He began his FMC career in 2000 as a Credit Analyst. He was 55 in the 2024 proxy and holds a B.S. in Economics/Finance from Barry University and an MBA from Ball State University . During 2020–2023, FMC’s total shareholder return (TSR) in the “Pay Versus Performance” table ranged from 93.07 to 108.22–115.64 versus peer group TSR, while net income was $148.6M (2020), $205.5M (2021), $222.1M (2022), and $223.8M (2023) . Recent S&P Global fundamentals show FRME net income of $222.1M (FY22), $223.786M (FY23), $201.402M (FY24) and revenues of $107.941M (FY22), $105.602M (FY23), $125.580M (FY24) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Merchants Corporation | Senior Vice President, Chief Information Officer | May 2014–present | Not disclosed |
| First Merchants Corporation | Chief Technology Officer | 2004–May 2014 | Not disclosed |
| First Merchants Corporation | Director of Technology Services and Change Management | Dec 2003–2004 | Not disclosed |
| First Merchants Bank | Credit Analyst | 2000 | Not disclosed |
External Roles
No external board or public company roles disclosed for Fluhler in the cited filings. —
Fixed Compensation
| Year | Base Salary ($) | Target Bonus % of Salary | Actual Non-Equity Incentive ($) | Stock Awards – Shares | Stock Awards – Grant Date | Grant Date Fair Value ($) |
|---|---|---|---|---|---|---|
| 2021 | 315,377 | Not disclosed — | 174,340 | 5,000 (Feb 8, 2021); 3,000 (Aug 10, 2021) | Feb 8, 2021; Aug 10, 2021 | 209,950; 128,010 |
| 2022 | 363,462 | 45% | 195,089 | Not disclosed — | — | 163,800 |
| 2023 | 377,354 | 45% | 123,961 | 5,000 | Aug 2, 2023 | 160,800 |
Perquisites (selected): FMC 401(k) match and additional contributions; reinvested dividends on restricted stock. For Fluhler: 401(k) match $12,396 (2021), $6,499 (2022), $1,684 (2023); additional FMC contributions $5,800 (2021), $5,800 (2022), $6,100 (2023); reinvested dividends $19,262 (2021), $20,840 (2022), $23,295 (2023) .
Performance Compensation
| Year | Metric | Weighting | Target | Actual | Payout vs Target | Notes |
|---|---|---|---|---|---|---|
| 2022 | Operating EPS | 70% | $3.51/share | $3.81/share reported; payouts set at 125% for NEOs | 125% | Applies to all NEOs incl. Fluhler for EPS portion |
| 2022 | Consolidated Efficiency Ratio | 30% | 55.09% | 53.20% | 137% (rounded up to target under plan) | Fluhler-only metric component |
| 2023 | Operating EPS | 70% | $4.60/share | $3.73/share reported; adjusted to $3.87 for plan | 73% | Committee used discretion for one-time items |
| 2023 | Consolidated Efficiency Ratio | 30% | 51.0% | 55.17% reported; adjusted to 53.62% for plan | 73% (rounded to target) | Fluhler-only metric component |
| 2021 | Operating EPS | Not disclosed for Fluhler; NEO plan context | $3.19/share target; adjusted to $3.65/share for plan | $3.81/share reported | 140% for NEOs (plan adjusted) | Fluhler payout shown in SCT; individual weighting not disclosed |
SMICP clawback: recover payment to an executive officer if based on a materially inaccurate financial statement .
Equity Ownership & Alignment
| Year | Beneficial Ownership (shares) | Noted Components | Ownership % of Outstanding | Unvested RS/RSU at FY-end | Market Value of Unvested ($) | Vesting Schedule Details |
|---|---|---|---|---|---|---|
| 2021 | 26,313 | Includes Restricted Shares & any phantom shares per footnotes (table excerpt) | <1% | 16,675 shares | $698,516 (computed at $41.89/share) | 4,315 vest 8/9/2022; 4,180 vest 8/12/2023; 3,043 vest 8/10/2024; 5,134 vest 2/8/2026 |
| 2022 | 25,694 | 16,674 Restricted; 367 Phantom | <1% | Not disclosed in this chunk — | — | See 2021/2023 tables for schedule |
| 2023 | 26,174 | 16,811 Restricted; 510 Phantom | <1% | 18,140 shares | $672,631 ($37.08/share) | 3,274 vest 8/10/2024; 4,237 vest 8/3/2025; 5,522 vest 2/8/2026; 5,107 vest 8/2/2026 |
- Restricted stock vesting rules (LTEIP): generally 3-year vesting; double-trigger change-of-control vesting; dividends and voting rights accrue during restriction .
- Insider selling constraints: 25% of “net shares” issued to executive officers cannot be sold/transferred/pledged until termination, death, or retirement; custody retained by the Company until restriction lapses .
- Hedging/pledging: Company policy prohibits directors from hedging or pledging FMC shares; executive officer-specific pledge restrictions also apply via LTEIP Section 6.05 above .
Employment Terms
| Provision | Detail |
|---|---|
| Employment agreement | Company states it does not have employment agreements with NEOs |
| Change-of-control (CoC) | Double-trigger (CoC plus termination or constructive termination within 24 months) |
| CoC multiple | 150% of sum of base salary at termination notice date + largest SMICP cash incentive in prior 2 years |
| CoC cash severance estimate | $886,641 if triggered on Dec 31, 2023 |
| Insurance continuation | Life, disability, accident, health coverage until earlier of 2 years after termination or age 65; Company pays same % as pre-termination |
| Equity treatment at CoC | Options canceled with cash for “bargain element” if any; RS restrictions lapse; unvested non-qualified deferred comp vests |
| Other CoC benefits | Outplacement; reasonable legal fees and expenses |
| Agreement term | Automatic annual extension unless notice by Oct 31; if CoC occurs, agreement remains for ≥24 months after event |
| Deferred compensation | EDCP participation; 2020 participant deferrals noted (Fluhler $16,921) |
| Pension | FMC Retirement Pension Plan participant; present value of accumulated benefit $33,710; 4.76 credited years; plan frozen; not yet eligible for retirement |
Company Performance Context (during Fluhler’s tenure)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | 107,941,000 | 105,602,000 | 125,580,000 |
| Net Income ($USD) | 222,089,000 | 223,786,000 | 201,402,000 |
Note: Values retrieved from S&P Global via GetFinancials.
Say-on-Pay & Shareholder Feedback
| Year | Approval % |
|---|---|
| 2021 Annual Meeting | 91.56% (For: 37,521,993; Against: 3,457,894; Abstain: 387,052) |
| 2023 Annual Meeting | 95.13% (For: 42,395,845; Against: 2,165,571; Abstain: 174,019) |
Compensation Structure Analysis
- Mix shift: FMC discontinued stock options since 2013; equity delivered via time-based restricted stock (RS) with 3-year vesting, increasing certainty vs options and aligning with long-term TSR and dividend accrual .
- Metric design: Fluhler’s annual bonus uses two objective metrics aligned to profitability and efficiency (EPS and efficiency ratio), with Committee discretion to adjust for one-time items; 2023 payout was 73% of target reflecting below-plan EPS and adjusted efficiency ratio .
- Ownership lock-ups: 25% net shares sale/pledge restrictions reduce near-term selling pressure and encourage retention .
- Clawback: SMICP clawback for materially inaccurate financials reinforces pay-for-performance integrity .
Investment Implications
- Alignment: Time-based RS with dividend rights and a 25% net-share holdback, plus EPS/efficiency ratio bonus metrics, indicate reasonable alignment with shareholder outcomes; hedging/pledging limits further reduce misalignment risk .
- Retention and selling pressure: Significant unvested RS tranches through August 2026 and the 25% share restriction imply low near-term selling pressure and retention incentives; however, 2023 bonuses at 73% of target show sensitivity to profitability shortfalls .
- CoC economics: Double-trigger and a relatively lower multiple (150%) vs CEO/President (299%) suggest controlled severance exposure; benefits include accelerated RS vesting and insurance coverage, moderating departure costs but not excessively incentivizing exit .
- Execution risk: IT leadership continuity since 2014 supports stability; bonus metrics tied to EPS and efficiency ratio place pressure on operational execution in a changing rate environment, reflected in FY24 net income decline vs FY23 .