Neil Dauby
About Neil Dauby
D. Neil Dauby, 61, is Chairman and Chief Executive Officer of German American Bancorp, Inc. (GABC) and its bank subsidiary; he has served as CEO since January 1, 2022 and assumed the additional role of Chairman on May 18, 2023. He joined GABC in 2001 after a 15‑year career in public accounting and previously served as President & COO and as EVP/Chief Commercial Banking Officer . Under his leadership, GABC delivered 2024 net income of $83.8 million ($2.83 EPS) and a 12.2% ROE (the Company’s 20th consecutive year of double‑digit ROE) amid strategic portfolio actions and M&A . On a pay‑versus‑performance basis, the Company reported 2024 cumulative TSR of 128.97 (vs 122.17 for the S&P Regional Banks Select Industry Index) and a 3‑year average growth in adjusted EPS of −2.9% .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| German American Bancorp, Inc. | Chairman of the Board and CEO | 2023–present | Combined Chairman/CEO role; leads strategy and Board agenda; lead independent director framework in place . |
| German American Bancorp, Inc. | President and CEO | 2022–2023 | Oversaw enterprise performance and capital allocation, including setting incentive scorecards . |
| German American Bancorp, Inc. | President and COO | 2021 | Direct responsibility for all facets of operations . |
| German American Bancorp, Inc. | EVP & Chief Commercial Banking Officer | Pre‑2021 | Led commercial banking; previously served as president of a community banking subsidiary . |
| German American Bancorp, Inc. | Director (Company and principal subsidiaries) | 2021–present | Board service since July 1, 2021 . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| German American Bank (subsidiary) | Director | 2021–present | All Company directors also serve on the bank subsidiary Board . |
| German American Investment Services, Inc. (subsidiary) | Director | 2025–present | Named among directors serving on this subsidiary’s Board . |
Board Governance (director-service context and dual-role implications)
- Board service history: Director since 2021; Chairman since May 18, 2023 .
- Independence: Not independent due to CEO role; Governance mitigants include a designated Lead Independent Director (Zachary W. Bawel) who presides over executive sessions and approves agendas .
- Committees: Standing committees (Audit, Compensation/Human Resources, Governance/Nominating) are composed solely of independent directors; Dauby is not listed as a member of these committees .
- Attendance: All directors attended at least 75% of Board and applicable committee meetings in 2024 .
- Executive sessions: Regular executive sessions of independent directors are held .
- Director pay: Executive directors (including Dauby) do not receive separate director compensation .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 580,000 | 625,000 | 720,000 |
| Year-over-Year Base Salary Change | — | +7.8% (calc from SCT) | +15.2% (Company rationale: Chairman responsibilities) |
| All Other Compensation ($) | 93,389 | 114,673 | 139,374 |
Perquisites and other personal benefits (2024) included: retirement allowance $61,053, automobile $1,037; Company contributions to defined contribution plans $51,284; dividends on restricted stock $23,392; imputed life insurance premium $1,181 .
Performance Compensation
-
Short‑Term Incentive (STI) design (2024):
- CEO opportunity: Good 37.5% of salary; Very Good 62.5%; Exceptional 87.5% .
- Scorecard weighting: 80% corporate measures; 20% judgmental/individual .
- Corporate metrics and weights: EPS growth (25%), efficiency ratio (10%), core organic loan growth (20%), core organic deposit & repo growth (15%), NPA/Total Assets (10%) .
- 2024 actual performance: Net income trigger exceeded; EPS growth Good (threshold); efficiency ratio between Very Good & Exceptional; loan and deposit growth between Good & Very Good; NPA/TA above Exceptional; overall between Good & Very Good .
- CEO STI paid for 2024: $405,000 (paid in 2025 quarterly), equal to 56.25% of year‑end salary .
-
Long‑Term Incentive (LTI) design:
- Vehicle: 100% restricted stock (full‑value) granted under the 2019 LTI Plan .
- Metrics (equal weight): 3‑yr average adjusted ROE (33⅓%), 3‑yr average adjusted ROA (33⅓%), 3‑yr adjusted EPS growth (33⅓%); net income trigger applies .
- Performance outcomes for 2022–2024: ROE between Very Good & Exceptional; ROA between Good & Very Good; EPS growth between Good & Very Good; overall between Good & Very Good .
- CEO LTI value recognized for 2024 (earned on 2022–2024 performance and granted Mar 2025): $397,116 in restricted stock . Vesting for this award: 1/3 on 3/15/2026; 1/3 on 3/15/2027; 1/3 on 3/15/2028 (straight‑line) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/7/2025) | 56,515 common shares; <1% of outstanding . |
| Unvested restricted shares at 12/31/2024 | 33,505 shares; market value $1,347,571 . |
| Options outstanding | None (no options issued to NEOs) . |
| Scheduled vesting (indicative supply) | 10,419 shares on 3/15/2025 ($419,052); 8,384 shares on 3/15/2026 ($337,204); 4,430 shares on 3/15/2027 ($178,175); based on $40.22 per share . |
| Stock ownership guidelines | CEO required to hold GABC shares equal to 3x base salary; as of 12/31/2024, Dauby met requirement . |
| Hedging/pledging | Prohibited for directors and executive officers; insider trading policy bans hedging, pledging, short sales; blackout windows apply . |
| Clawback | Incentive Compensation Recovery Policy adopted Oct 30, 2023 (effective Oct 2, 2023) per SEC/Nasdaq rules . |
| Nonqualified deferred compensation (2024) | Executive contributions $117,084; Company match accruals $37,484; earnings $69,204; year‑end balance $439,761 . |
Note: Shares that vested for Dauby in 2024 totaled 6,992 (value $222,975), reflecting previously granted LTI tranches .
Employment Terms
| Topic | Status/Terms |
|---|---|
| Employment agreement | None; Company has no employment or change‑in‑control agreements with NEOs . |
| Severance (cash) | None disclosed; no contractual severance multiples . |
| Change‑in‑control equity | 2019 LTI Plan provides single‑trigger vesting of unvested awards upon a change in control unless Board determines otherwise . |
| Equity governance | No repricing or cash buybacks of options/SARs without shareholder approval ; no tax gross‑ups; no evergreen; material plan amendments require shareholder approval . |
| Benefits | 401(k) with match; Nonqualified Savings Plan eligibility ; Dauby has no supplemental pension (Mr. Rust only) . |
| Director compensation | Executive officers who are directors receive no separate director pay . |
Performance & Track Record (selected indicators)
- 2024 financials: Net income $83.8 million; EPS $2.83; ROE 12.2% (20th consecutive year of double‑digit ROE) .
- Strategic actions in 2024–2025: Sale of insurance subsidiary assets for $40.0 million (after‑tax gain ~$27.5 million); restructuring ~$375 million AFS securities (after‑tax loss ~$27.2 million); acquisition of Heartland BancCorp (closed Feb 1, 2025) .
- Pay‑versus‑performance: 2024 cumulative TSR 128.97 vs peer index 122.17; 3‑year average growth in adjusted EPS −2.9% .
Say‑on‑Pay, Peer Benchmarking, and Compensation Governance
- Say‑on‑pay support: ~96% approval at the 2024 annual meeting for 2023 compensation; frequency maintained annually .
- Peer group (20 regional banks across IN and adjacent states; assets ~$3.5–$12.5B; median ~$7.7B): includes First Busey, Lakeland Financial, Stock Yards Bancorp, Park National, etc. .
- Market positioning: Salary targeted at 50th–60th percentile; incentive opportunities designed to reward above‑median performance; 2024 BCG analysis placed Company performance around the 60th percentile and found pay levels competitive .
- Independent oversight: Compensation/Human Resources Committee composed solely of independent directors; chaired by Susan J. Ellspermann; independent consultant Blanchard Consulting Group engaged; no consultant conflicts .
Related Party Transactions and Risk Controls
- Related party: No transactions >$120,000 with directors/executives since Jan 1, 2024; ordinary‑course loans on market terms only .
- Risk controls: Clawback policy in place; anti‑hedging/pledging; LTI design with multi‑year metrics; plan funding net‑income trigger; no option repricing .
Director Compensation (context for dual role)
- Non‑employee directors receive an annual equity grant (max $40,000) and $25,000 cash retainer; committee chair retainers apply; meeting fees paid; director stock ownership guideline 4x annual retainer within 5 years .
- As an executive director, Dauby receives no separate director compensation .
Compensation Structure Analysis (signals)
- Mix shift and alignment: Dauby’s base salary increased 15.2% in 2024 to reflect added Chairman responsibilities, while performance‑based pay remained a significant component (STI $405,000; LTI $397,116) .
- Metrics tightened to core performance: 2024 scorecards adjust for non‑core items (insurance sale gain, securities restructuring loss, Heartland merger costs) to align incentives with underlying performance .
- Governance strengths: Annual say‑on‑pay support ~96%; no tax gross‑ups; anti‑hedging/pledging; clawback policy aligns with SEC/Nasdaq .
Data Tables
Summary Compensation (Dauby)
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 580,000 | 625,000 | 720,000 |
| Stock Awards (LTI) | 403,122 | 423,754 | 397,116 |
| Non‑Equity Incentive (STI) | 297,540 | 254,688 | 405,000 |
| All Other Compensation | 93,389 | 114,673 | 139,374 |
| Total | 1,374,051 | 1,418,115 | 1,661,490 |
STI Design and 2024 Outcomes (Company)
| Measure | Weight | 2024 Result |
|---|---|---|
| Net income trigger | — | Exceeded |
| EPS growth | 25% | Good (At Threshold) |
| Efficiency ratio | 10% | Between Very Good & Exceptional |
| Core organic loans growth | 20% | Between Good & Very Good |
| Core organic deposits & repos growth | 15% | Between Good & Very Good |
| NPA/Total assets | 10% | Above Exceptional |
| Individual/judgmental | 20% | Applied per executive (CEO assessed by Board) |
LTI Design and 2022–2024 Outcomes (Company)
| Metric (3‑yr avg, adjusted) | Weight | 2022–2024 Outcome |
|---|---|---|
| ROE | 33⅓% | Between Very Good & Exceptional |
| ROA | 33⅓% | Between Good & Very Good |
| EPS growth | 33⅓% | Between Good & Very Good |
| Overall (net income trigger first) | — | Between Good & Very Good |
Scheduled Vesting (Dauby) – Indicative Supply
| Vesting Date | Shares | Market Value at $40.22 |
|---|---|---|
| 2025‑03‑15 | 10,419 | $419,052 |
| 2026‑03‑15 | 8,384 | $337,204 |
| 2027‑03‑15 | 4,430 | $178,175 |
Ownership and Plans (Dauby)
| Item | Value |
|---|---|
| Beneficial shares (3/7/2025) | 56,515; <1% of outstanding |
| Unvested restricted shares (12/31/2024) | 33,505; $1,347,571 |
| Nonqualified Savings Plan – 2024 exec contributions | $117,084 |
| Nonqualified Savings Plan – 2024 Company accruals | $37,484 |
| Nonqualified Savings Plan – 2024 earnings | $69,204 |
| Nonqualified Savings Plan – 12/31/2024 balance | $439,761 |
| Hedging/pledging | Prohibited |
| Clawback | Policy adopted 10/30/2023 |
Pay‑Versus‑Performance Snapshot (Company)
| Year | CEO SCT Total ($) | CEO “Comp Actually Paid” ($) | TSR (GABC, $100 basis) | TSR (Peer Index) | Net Income ($000s) | 3‑yr Avg Adjusted EPS Growth |
|---|---|---|---|---|---|---|
| 2024 | 1,661,490 | 1,872,852 | 128.97 | 122.17 | 83,811 | (2.9)% |
Employment Contracts, Severance and CIC Economics (Dauby)
- No employment, severance, or change‑in‑control cash agreements; the Company does not maintain such agreements for NEOs .
- Equity acceleration: Under the 2019 LTI Plan, unvested equity vests on a change in control unless the Board determines otherwise (single‑trigger equity vesting) .
Say‑on‑Pay & Shareholder Engagement
- Say‑on‑pay: ~96% approval at the 2024 annual meeting; annual frequency maintained .
- Engagement: Since the prior annual meeting, directors and executives engaged with holders of ~20% of shares on strategy and governance topics .
Risk Indicators & Red Flags
- Positive: Clawback policy; anti‑hedging/pledging policies; no tax gross‑ups; no option repricing; independent comp committee and advisor; strong say‑on‑pay support .
- Watch: Single‑trigger equity acceleration on change in control (equity only) .
Investment Implications
- Alignment and retention: High equity mix with multi‑year performance metrics and strict ownership/holding requirements aligns CEO incentives with shareholder value and promotes retention; upcoming vesting tranches in 2025–2027 (10.4k/8.4k/4.4k shares) may create periodic sell‑pressure windows if sales occur upon vesting .
- Pay for performance: 2024 STI paid at 56.25% of salary against a balanced scorecard skewed to core profitability, growth, and asset quality—appropriate given mixed EPS growth but strong efficiency and credit outcomes; LTI earned between Good & Very Good on 3‑year metrics .
- Governance risk mitigants for dual role: While CEO/Chairman concentration warrants scrutiny, a lead independent director, fully independent committees, and robust policies reduce governance risk .
- Performance backdrop: 2024 ROE of 12.2% (20th year of double‑digit ROE) and TSR above peer index support the case for sustained execution; continued delivery post‑Heartland acquisition integration is the key execution risk to monitor .