Michael Hodge
About Michael Hodge
Michael E. Hodge (age 71) has served as a Director of Hills Bancorporation and Hills Bank and Trust Company since 2000. He holds a BS in civil engineering from the University of Iowa and is President and principal shareholder of Hodge Construction Company (founded in 1981), bringing deep real estate development experience across Iowa City, Coralville, North Liberty, and Cedar Rapids, which aligns with the Bank’s markets .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Hodge Construction Company (private) | President & principal shareholder | Founded 1981; ongoing | Extensive real estate development experience (single/multi-family and commercial) supporting Board loan responsibilities |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| OC Group, L.C. (owner of Old Capitol Town Center) | Investor (17.65%) | Ongoing | Bank leases 5,845 sq ft; lease extended in 2024 to 2029; $26.57/sq ft + 2% annual increase; $4.00/sq ft CAM; 2024 lease cost $155,315 + $29,268 real estate taxes |
Board Governance
- Committee assignments: Compensation & Incentive Stock Committee; Loan Committee .
- Independence: Not independent under NASDAQ rules due to related-party relationships (OC Group, L.C. leasing and Hodge Construction services) .
- Attendance and engagement: The Board held 1 annual, 1 special, and 12 regular meetings in 2024; all Directors attended at least 75% of Board and committee meetings, and all attended the annual shareholders’ meeting .
- Compensation Committee composition and activity: Comprised of twelve non-employee Directors (all but the CEO and President/CEO); independent except for Mr. Hodge; held 10 meetings in 2024; Directors are not compensated for Compensation Committee meetings .
- Election results (2025 Annual Meeting, Proposal 1): Michael E. Hodge received 4,536,012.84 votes For, 118,246.65 Withhold; Broker Non-Votes 382,050.00 .
Fixed Compensation
| Item | FY 2024 Amount | Notes |
|---|---|---|
| Fees Earned or Paid in Cash | $38,625 | Director cash retainer/meeting compensation (Bank pays per Directors’ fee schedule) |
| Stock Awards | $0 | None disclosed for Hodge |
| Option Awards | $0 | None disclosed for Hodge |
| Total | $38,625 |
Additional context: Directors may receive committee meeting fees of $470 per meeting (Audit, Risk, ESOP/Profit Sharing, Loan, Trust) per the Schedule of Directors Fees; Compensation Committee meetings are unpaid; Bank pays the director fees .
Performance Compensation
| Component | Structure | FY 2024 Details |
|---|---|---|
| Equity-based awards (RSUs/Options/PSUs) | Not part of Hodge’s disclosed pay | No stock or option awards to Hodge in 2024 |
| Performance metrics tied to compensation | Not applicable for Hodge | No performance metric disclosure for director pay |
Director Deferral Plan: Directors may elect to defer up to 50% of cash compensation into unfunded stock units credited for dividends and stock value changes; payable in cash over five annual installments upon earliest of change in control, Board termination, or age 72. No specific deferral elections are disclosed for Hodge in 2024 .
Other Directorships & Interlocks
| Company | Role | Public Company? | Committee/Interlock Notes |
|---|---|---|---|
| Hodge Construction Company | President & principal shareholder (23% owner) | Private | Bank has utilized construction management services in prior years—related-party exposure |
| OC Group, L.C. | Investor (17.65%) | Private | Owner of property leased by Bank—active lease relationship; Hodge has financial interest |
No other public company directorships are disclosed for Hodge in the 2025 proxy .
Expertise & Qualifications
- Civil engineering background (BS, University of Iowa) .
- Decades of real estate development and construction management experience in Bank’s footprint; provides insight for Loan Committee and credit matters .
- Active in professional trade associations and non-profit leadership roles in Iowa City market .
Equity Ownership
| Holder | Total Beneficial Ownership (shares) | Sole Voting & Investment Power | Shared Voting & Investment Power | % of Class |
|---|---|---|---|---|
| Michael E. Hodge | 24,905 | 15,815 | 9,090 | 0.28% |
- Stock ownership policy: The Company has not adopted a share ownership or retention policy for Directors or executive officers—reduces formal alignment requirements .
- Options/derivatives: No options disclosed for Hodge; select other Directors hold options (e.g., 2019 and 2024 grants), but not Hodge .
- Pledging/hedging: No pledging or hedging disclosures specific to Hodge in 2025 proxy .
Governance Assessment
- Independence and conflicts: Not independent under NASDAQ rules due to related-party transactions. The Bank leases space from OC Group, L.C. where Hodge holds a 17.65% interest; annual 2024 lease cost $155,315 plus $29,268 taxes; lease extended in 2024 through 2029 with a potential further five-year option. Hodge also owns 23% of Hodge Construction Company, which provided construction management services in prior years. These arrangements create ongoing conflicts requiring strict oversight and recusal protocols .
- Committee risk: Hodge serves on the Compensation & Incentive Stock Committee despite being non-independent, and participated in executive compensation deliberations. The Board states his participation did not advantage executives; however, best practice typically avoids non-independent directors on pay committees in banks to mitigate perceived conflicts .
- Attendance: Meets basic engagement threshold (≥75%); full Board attended annual meeting, supporting baseline engagement .
- Pay alignment: Hodge’s 2024 director pay is entirely cash-based ($38,625), with no equity grants; combined with absence of director ownership guidelines, this weakens formal pay-for-performance alignment. That said, Hodge holds 24,905 shares (0.28%), providing some economic alignment .
- Shareholder sentiment: Strong director election support (4.54M For vs. 118k Withhold for Hodge) and robust say-on-pay approvals historically (e.g., 98% support at 2024 Annual Meeting), indicating broadly positive investor sentiment despite conflict disclosures .
RED FLAGS
- Not independent; active related-party lease (OC Group, L.C.) and prior services (Hodge Construction Company) .
- Serving on Compensation & Incentive Stock Committee while non-independent; participation in executive compensation decisions .
- No director share ownership or retention policy—reduced formal alignment .
Mitigants
- Board disclosure and management assertion that Hodge’s participation did not provide favorable compensation outcomes; committee chaired by an independent director (Ann Marie Rhodes) and broader committee comprised primarily of independent directors .
- Lease terms described as comparable to market rates; transparent cost and escalation details .
- Strong shareholder support in recent voting results .