Thomas Prame
About Thomas Prame
Thomas M. Prame, age 55 as of December 31, 2024, is Chief Executive Officer and President of Horizon Bancorp, Inc. and Horizon Bank (CEO since June 1, 2023; President since August 15, 2022) and serves on the Horizon Bank Board of Directors . He holds a B.S. in Economics from the University of Rochester and an MBA in Finance from the University of Notre Dame – Mendoza College of Business . Company performance during his tenure improved year over year, with total shareholder return (TSR) rising from 100.47 to 104.69 on the company’s pay-versus-performance scale and net income increasing from $28.0 million to $35.4 million in 2024; ROAA rose from 0.36% to 0.45% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Midwest Bancorp | EVP, Consumer, Wealth, and Mortgage Banking; led strategy | May 2012 – Mar 2022 | Led digital technology expansion, sales productivity improvements, and efficiency initiatives; senior leadership through merger into Old National |
| RBS Citizens Bank; Colonial Bank; CitiMortgage; Fifth Third Bank | Senior retail/consumer banking roles | Prior to 2012 | Progressive leadership in retail banking operations and growth across multiple institutions |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | None disclosed in HBNC filings | — | — |
Fixed Compensation
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 200,961 | 203,800 | — | 1,600 | 456,361 |
| 2023 | 580,769 | 299,981 | 176,771 | 52,536 | 1,110,056 |
| 2024 | 600,000 | 549,996 | 405,000 | 85,851 (Thrift match $13,200; SERP $27,187; dividends $45,434) | 1,640,847 |
- CEO pay ratio: 36.3-to-1 for 2024 .
- 2024 say-on-pay support: 96.5% approval; frequency vote 92% in favor of annual .
Performance Compensation
Annual Bonus Plan – CEO (2024 design and payout)
| Metric | Weighting (Short-Term “Part A”) | Weighting (Long-Term “Part B”) | Threshold ($) | Target ($) | Maximum ($) | 2024 Actual Payout ($) | Notes |
|---|---|---|---|---|---|---|---|
| Financial outcomes (Net Income & Efficiency) | 70% | — | 195,000×0.25=48,750 | 195,000 | 255,000 | 405,000 (total cash bonus) | Short-term financial targets aligned to plan |
| Enterprise Risk Management | 30% | 30% | 48,750 | 195,000 | 255,000 | Included in total | Non-financial, assessed vs strategic plan |
| Positioning Horizon for Future Success | — | 70% | 48,750 | 195,000 | 255,000 | Included in total | Strategic outcomes; talent and growth |
- Bonus structure: two equal halves (short-term Part A; long-term Part B); minimum 80% aggregate weighted score required in each part to earn payout .
- Risk controls: clawback policy adopted Oct 17, 2023; compensation risk review deemed reasonable, unlikely to have material adverse effect .
Long-Term Equity Awards – 2024 grants
| Award Type | Grant Date | Shares (Threshold 25%) | Shares (Target 100%) | Shares (Max 150%) | Vesting / Measurement | Grant Date Fair Value ($) |
|---|---|---|---|---|---|---|
| Performance Shares (PSUs) | Mar 19, 2024 | 9,259 | 37,037 | 55,556 | 3-year performance period Jan 1, 2024 – Dec 31, 2026; metrics: ROCE (~34%), CAGR of assets (~33%), ROAA (~33%) vs SNL 5–10B bank cohort; payout 50%/100%/125% threshold/target/max; dividends payable during period | 440,000 |
| Restricted Stock (service-based) | Mar 19, 2024 | — | 9,259 | — | Vests on third anniversary of grant date (Mar 19, 2027) if in good standing; dividends payable prior to vest | 109,997 |
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Beneficial ownership | 31,562 shares (<1% of outstanding) comprising 24,512 directly, 6,750 joint, 300 IRA |
| Unvested restricted stock | 24,512 shares (market value $394,888 at 12/31/24) |
| Unearned performance shares | 58,052 shares (payout value basis $935,218 at 12/31/24) |
| Options | None outstanding for Prame; company has phased out LTI options for senior officers |
| Dividends on unvested equity | $45,434 received in 2024 on performance and restricted stock |
| Stock ownership guidelines | CEO must maintain ownership ≥3× base salary; directors ≥3× annual retainer; compliance monitored by Compensation Committee |
| Hedging/pledging policy | Stand-alone anti-hedging (no exceptions) and anti-pledging; no waivers granted; directors/executives prohibited from pledging except rare pre-approved cases (none requested) |
Vesting and near-term supply considerations:
- 2024 restricted stock grant of 9,259 shares scheduled to vest on March 19, 2027, subject to continued good standing .
- 2024 PSUs settle post the 2024–2026 performance period at 50–125% of target depending on percentile performance vs the SNL cohort .
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement term | Rolling one-year term; extended annually unless notice given (effective June 1, 2023) |
| Base salary | $600,000 (reviewed annually; not decreased) |
| Bonus eligibility | Participates in Executive Officer Bonus Plan under CEO-specific matrix |
| Termination (without cause / good reason) | Severance equal to 2× base salary + 2× average cash bonuses (special 2024 formula), plus up to 2 years of health/life benefits (≤110% of cost), release required; estimated value if terminated 12/31/24: $1,922,346 |
| Termination (cause / voluntary without good reason / death or disability) | Accrued/vested benefits and base salary through termination; life insurance $500,000 |
| Change in control (double-trigger) | 2.99× base salary and 2.99× average cash bonus (special 2023–2024 formulas), 35 months of health/life benefits; total estimated 12/31/24: $2,696,373; benefits subject to 409A/280G and FDIC restrictions |
| Equity treatment on CIC | Under 2021 Plan, no single-trigger acceleration; if involuntary termination within 2 years post-CIC: options/SARs become exercisable, all unvested awards vest at target |
| Restrictive covenants | Non-disclosure, non-solicit, and non-compete requirements tied to severance/CIC agreements; release required |
| Clawback policy | Dodd-Frank 10D/Nasdaq 5608 policy adopted Oct 17, 2023; 2024 review concluded no recovery required |
| Deferred compensation | 2024 executive deferrals $54,374; company match $27,187; aggregate balance $149,615 (as of 12/31/24) |
Board Governance
- Board independence: 9 of 11 directors independent; Prame and Craig M. Dwight not independent due to executive roles .
- Leadership structure: Independent Chair to transition from Craig M. Dwight to Eric P. Blackhurst upon Dwight’s retirement at the May 1, 2025 annual meeting; Lead Independent Director role to be retired at that time .
- Dual-role implications: Prame is CEO and President of both Horizon and Horizon Bank; serves on Horizon Bank’s Board and as Bank Board Chairman; independent chair at holding company mitigates concentration of power and supports independent oversight .
- Committee memberships: Audit, Compensation, and Corporate Governance & Nominating Committees composed entirely of independent directors; Compensation Committee chaired by Vanessa P. Williams; FW Cook engaged periodically and assessed independent .
- Director compensation: Prame receives no additional compensation for board service; non-employee director retainers are $45,000 cash + ~$40,000 equity, with additional fees for certain chairs and Lead Director .
- Attendance: Each director attended ≥89% of Board and committee meetings in 2024 .
Compensation Structure Analysis
- Mix trends: 2024 stock awards rose to $549,996 (from $299,981 in 2023), while cash bonus increased to $405,000 (from $176,771), indicating greater equity-linked compensation and higher annual incentive payouts aligned to metrics .
- Long-term incentive design shift: Company favors PSUs and time-based restricted stock; options not granted to senior officers, reducing repricing risk and emphasizing performance-based equity .
- Peer benchmarking: FW Cook’s 2023 analysis and a 25-bank peer group guided 2024 pay decisions; program targets roughly 35–60% of salary for equity awards with performance metrics tied to ROCE, ROAA, and asset growth vs peers .
Equity Ownership & Alignment (detail)
| Item | Shares | Value/Notes |
|---|---|---|
| Beneficial ownership | 31,562 | <1% of shares outstanding |
| Unvested restricted stock (12/31/24) | 24,512 | $394,888 market value |
| Unearned PSUs (12/31/24) | 58,052 | $935,218 payout basis |
| Pledging/Hedging | Prohibited; no exceptions granted; aligns with shareholder-friendly governance | |
| Ownership guideline | CEO ≥3× base salary; monitored by Compensation Committee |
Investment Implications
- Alignment: Strong anti-hedging/anti-pledging rules, explicit ownership guidelines, and PSU-heavy LTI design tie compensation to shareholder outcomes and risk management, with clawback controls in place .
- Retention risk vs severance economics: Material severance protections (2× salary and bonus) and enhanced double-trigger CIC benefits (2.99× multiples; 35 months benefits) reduce near-term departure risk but create potential transaction costs and incentives around change-of-control events .
- Near-term selling pressure: Scheduled vesting of 2024 RS on March 19, 2027 and PSU settlement post-2026 performance period suggest limited forced selling before those dates; dividends on unvested shares support holding incentive .
- Governance mitigation of dual roles: Transition to independent Chair at the holding company offsets CEO dual-role concerns and strengthens oversight; committee independence is robust .
- Performance trend: 2024 improvements in TSR, net income, and ROAA underpin pay-for-performance narratives and may sustain investor confidence in executive execution .