Bradley Arnett
Executive Vice President, Chief Legal Officer and Corporate Secretary at GERMAN AMERICAN BANCORP
Executive
About Bradley Arnett
Bradley C. Arnett (age 60) is Executive Vice President, Chief Legal Officer and Corporate Secretary of German American Bancorp, Inc. (GABC). He was appointed SVP, Chief Legal Officer and Corporate Secretary effective September 25, 2023 and promoted to Executive Vice President on January 1, 2025; prior to GABC, he was a partner at Dentons focusing on SEC reporting/compliance, corporate governance, M&A, banking regulation, commercial finance, and securities offerings . Company performance context: FY2024 net income was $83.8M with diluted EPS $2.83 and ROE 12.2%; one-time actions included an insurance agency sale (+$0.93 EPS), securities portfolio restructuring (−$0.92 EPS), and Heartland merger costs (−$0.04 EPS) . Pay-versus-performance shows cumulative TSR value of a $100 initial investment at $128.97 in 2024 vs peer group $122.17 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Dentons (Law firm) | Partner | — | Led practice in SEC reporting/compliance, governance, M&A, banking regulation; brings capital markets and regulatory expertise to GABC |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| No public-company directorships disclosed | — | — | — |
Fixed Compensation
| Component | 2024 Value | Notes |
|---|---|---|
| Base Salary | $260,000 | First year as NEO in 2024 |
| Discretionary Bonus | $86,444 | $75,402 for promotion to EVP; $11,042 deferred sign-on bonus |
| Short-term Incentive Opportunity | 26.25% (Good), 43.75% (Very Good), 61.25% (Exceptional) of base salary | Quarterly vesting of earned 2024 cash incentives during 2025, contingent on continued employment; clawback applies |
| Long-term Incentive Opportunity | 26.25% (Good), 43.75% (Very Good), 61.25% (Exceptional) of base salary | Settled 100% in restricted stock; three-year vesting 1/3 annually; clawback applies |
Performance Compensation
2024 Short-Term Incentive Scorecard (Corporate)
| Metric | Weight | Target Definition | 2024 Actual Result | Payout Mechanics |
|---|---|---|---|---|
| EPS Growth (adjusted) | 25% | Adjusted to exclude M&A costs, insurance sale gain, securities restructuring loss | Good (Threshold met) | Weighted formula; overall STI between Good & Very Good |
| Efficiency Ratio (adjusted) | 10% | Excludes noted non-core items | Between Very Good & Exceptional | Weighted formula |
| Core Organic Loan Growth | 20% | Dec 2024 avg vs Dec 2023 avg | Between Good & Very Good | Weighted formula |
| Core Organic Deposits & Repos Growth | 15% | Dec 2024 avg vs Dec 2023 avg | Between Good & Very Good | Weighted formula |
| NPA/Total Assets (avg of quarter-ends) | 10% | Average of four quarter-end ratios | Above Exceptional | Weighted formula |
| Individual/Judgmental Component | 20% | Role goals and job performance | Assessed by CEO (input from President) | Weighted judgmental |
| STI Trigger | — | Net income trigger $69.44M | Exceeded | If not met, no payout |
Arnett’s earned 2024 non-equity (cash) incentive paid in 2025: $103,831 .
2022–2024 Long-Term Incentive (LTI) Scorecard (3-year)
| Metric | Weight | Method | 2022–2024 Actual Result | Payout & Vesting |
|---|---|---|---|---|
| Adjusted ROE | 33 1/3% | GABC percentile rank vs custom Midwest bank peer group; peers and GABC adjusted for M&A and other non-core items | Between Very Good & Exceptional | Restricted stock grant; vests 1/3 on 3/15/2026, 3/15/2027, 3/15/2028; clawback; accelerated on change in control |
| Adjusted ROA | 33 1/3% | Percentile rank vs peers (adjusted) | Between Good & Very Good | Same as above |
| Adjusted EPS Growth | 33 1/3% | Average growth vs Board-set goals; adjusted for non-core events | Between Good & Very Good | Same as above |
| LTI Trigger | — | Net income trigger $69.44M | Exceeded | — |
Arnett’s 2024 LTI (granted March 15, 2025) fair value: $100,400 (100% restricted stock; estimated good/very good/exceptional share counts 1,697/2,829/3,960 used for planning) . Vesting for 2024-earned LTI: 1/3 on 3/15/2026, 1/3 on 3/15/2027, 1/3 on 3/15/2028 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 4,375 shares; <1% of outstanding |
| Unvested Restricted Stock Outstanding (12/31/2024) | 5,351 shares; market value $215,217 |
| 2024 Stock Vested | 616 shares vested; $27,997 realized value in 2024 |
| Scheduled Vesting (Change-in-Control table snapshot at 12/31/2024) | 1,685 shares scheduled 12/5/2025 ($67,771); 1,069 shares scheduled 3/15/2026 ($42,995); total market value $110,766 at $40.22/share |
| Options | None outstanding; no option awards granted in years shown; repricing prohibited without shareholder approval |
| Anti-Hedging/Pledging | Hedging, pledging, short sales prohibited; 6-month minimum holding period on purchases; quarterly/special blackout periods for insiders |
| Ownership Guidelines | NEOs (other than CEO/President/CFO) must attain ≥1.5× base salary in common shares; Arnett has 5 years from date of 2025 proxy to comply; 1-year holding period on shares from equity awards (tax withholding exceptions) |
Employment Terms
| Provision | Status |
|---|---|
| Employment Agreement | GABC does not have employment agreements with NEOs; compensation set annually (more flexibility) |
| Severance | No severance/change-in-control agreements; no cash multiples disclosed |
| Change-in-Control | 2019 LTI Plan provides acceleration of unvested restricted stock upon change in control (unless Board decides otherwise); at 12/31/2024, Arnett would vest $110,766 of unvested shares at $40.22/share |
| Clawback | Incentive Compensation Recovery Policy adopted 10/30/2023 (effective 10/2/2023) per SEC/Nasdaq rules; broader misconduct clawbacks also apply; Sarbanes-Oxley §304 reimbursement if applicable |
| Non-Compete/Non-Solicit/Garden Leave | Not disclosed in proxy; no contracts indicated |
Compensation Structure Analysis
- Base salaries targeted at 50th–60th percentile; incentive-heavy design with meaningful at-risk pay; opportunities remain competitive vs peer group; pay-for-performance alignment expected to strengthen as current NEOs gain tenure .
- Short-term plan paid between Good & Very Good for 2024 (corporate results), with strong NPA ratio and efficiency; Arnett’s earned cash incentive $103,831; quarterly vesting through 2025 .
- Long-term plan uses ROE/ROA percentile vs peers and EPS growth; 2022–2024 results between Good & Very Good overall; Arnett’s 2024 LTI grant $100,400 with three-year vesting and clawbacks .
- Governance guardrails: anti-hedging/pledging; no option repricing/buybacks; clawbacks; insider blackout periods .
Compensation Peer Group and Say-on-Pay
- Peer group of 20 Midwest regional banks (e.g., First Busey, Park National, Stock Yards Bancorp) used for benchmarking executive pay and performance; asset sizes ~$3.5B–$12.5B; GABC ~$6.2B YE2023; pro forma ~$8.3B as of 12/31/2024 including Heartland .
- Say-on-pay support ~96% at 2024 annual meeting for FY2023 NEO compensation (annual vote) .
Performance & Track Record (Company Context)
| Metric | 2023 | 2024 |
|---|---|---|
| Net Income | $85.9M; EPS $2.91 | $83.8M; EPS $2.83; ROE 12.2% |
| Strategic Actions | — | Sold insurance agency for $40.0M cash (+$27.476M after-tax gain); securities portfolio restructuring (after-tax −$27.189M); Heartland merger costs (after-tax −$1.082M); Heartland merger closed Feb 1, 2025 |
| TSR (value of $100) | 2023: 100.86 (GABC), 102.59 (peer) | 2024: 128.97 (GABC), 122.17 (peer) |
Investment Implications
- Alignment: Arnett’s compensation is driven by adjusted ROE/ROA/EPS and corporate operating metrics with net income triggers and robust clawbacks, plus anti-hedging/pledging—favorable for shareholder alignment and risk control .
- Retention and selling pressure: Unvested restricted stock (5,351 shares at 12/31/2024) and scheduled vesting (1,685 sh on 12/5/2025; 1,069 sh on 3/15/2026) suggest ongoing retention incentive and limited near-term selling due to holding/blackout policies; change-in-control would accelerate vesting ($110,766 at $40.22/share snapshot) .
- Governance quality: No employment/severance contracts, strong clawback/anti-hedging, ownership requirements (1.5× salary target over 5 years) point to prudent design; high say-on-pay support (~96%) indicates investor acceptance .
- Execution risk: Company’s adjusted-based metric design mitigates distortions from one-time items (insurance sale, securities restructuring, M&A), but continued integration of Heartland and credit provisioning (e.g., Day 2 CECL) are performance sensitivities for incentive outcomes .