William Kessel
About William B. (“Brad”) Kessel
- President & CEO of Independent Bank Corporation and Independent Bank; Director since January 1, 2013; joined the company in 1994 after working in a regional CPA firm’s financial institutions group. Age 60.
- Leadership performance markers: 2024 EPS $3.16; cumulative TSR value of $188.95 (initial $100 basis) vs peer (Nasdaq Bank Index) $146.80; 2024 net income $66.8m. Q3 2025 run-rate results included ROAA 1.27%, ROAE 14.57%, NIM 3.54%, efficiency ratio 58.86%.
- Governance structure mitigates dual-role risk: CEO and Chair roles are separated (Chair: Stephen L. Gulis; Lead Independent Director: William J. Boer); board regularly meets in executive session without management. Kessel is not an independent director.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Independent Bank Corporation | President & CEO; Director | CEO since 2013; Director since 2013 | Led through multi-year EPS and TSR growth; maintained risk/return discipline; separation of Chair/CEO in place. |
| Independent Bank Corporation | President | 2011–2013 | Executive leadership transition prior to CEO role. |
| Independent Bank Corporation | Chief Operating Officer | 2007–2011 | Oversaw operations during pre- and post-crisis period. |
| Independent Bank (bank subsidiary) | President | 2004–2007 | Drove bank-level execution during charter consolidation. |
| Regional CPA firm | Financial Institutions Group | Pre-1994 | Laid technical foundation in bank finance/accounting. |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No external public company directorships disclosed for Kessel. |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $535,800 | $568,000 | $602,080 |
| All Other Compensation (incl. ESOP, 401k match, nonqualified plan, auto, club dues, RS dividends) | $72,363 | $65,427 | $76,731 (incl. $35,443 company retirement contributions; $15,746 RS dividends) |
| CEO Pay Ratio | 1:— | 1:— | 1:23.3 (Median employee $59,801 vs CEO $1,394,449) |
- 2025 base salary approved at $644,226 (+7% YoY) based on leadership effectiveness and 2024 performance.
Performance Compensation
Annual Cash Incentive (Management Incentive Compensation Plan)
- Target bonus as % of base salary: CEO 50% (2024); increased to 60% (2025).
- 2024 payout components and results:
| Metric | Threshold (50%) | Target (100%) | Maximum (200%) | 2024 Actual | Performance Factor | Weight | Payout Ratio |
|---|---|---|---|---|---|---|---|
| EPS (after incentive) | $2.74 | $2.99 | $3.49 | $3.16 | 1.34 | 40% | 0.54 |
| Efficiency Ratio | 60.00% | 59.00% | 56.00% | 60.83% | — | 12% | 0.00 |
| Non-Performing Assets/Total Assets | 0.50% | 0.30% | 0.10% | 0.13% | 1.85 | 12% | 0.22 |
| Deposit Balance Growth (ex-brokered) | 2.50% | 5.00% | 10.00% | 6.33% | 1.27 | 16% | 0.20 |
- CEO 2024 non-equity incentive paid: $385,500.
- 2025 plan: same four metrics/weights; CEO target 60%; payout curve unchanged; EPS threshold must be ≥$2.67 for any payout (2025 EPS thresholds updated to $2.80/$3.15/$3.56).
Long-Term Incentives (LTIP)
- Design: mix of time-based restricted stock (RS) and 3-year performance share units (PSUs) with 0–200% earnout based 50% on relative TSR vs an S&P Global-defined peer set (US banks $1–$10B assets) and 50% on relative ROAA vs the same peer set.
- Stock ownership guidelines support alignment: CEO must own ≥3x base salary; counts include unvested RS and vested in-the-money options (PSUs excluded). Applied ratably over 5 years.
| Grant Year | Award Type | Shares | Vesting/Performance | Grant Price/Value Context |
|---|---|---|---|---|
| 2024 | Restricted Stock | 6,511 | Cliff vest at 3 years (Feb 6, 2027) | Market price on grant date $23.99 |
| 2024 | PSUs (target) | 6,511 | 3-year period; earnout 0–200% based on relative TSR and ROAA | Same grant date |
| 2025 | Restricted Stock | 5,791 | Cliff vest at 3 years (grant-year +3) | Market price on grant date $36.15 |
| 2025 | PSUs (target) | 5,791 | 3-year period; same metrics, equal weighting | Same grant context |
- 2024 realized vesting: RS vested 6,525 shares and PSUs earned 6,689 shares for Kessel; no options exercised (company has not granted options since 2013, aside from a 2018 conversion).
Multi-Year Compensation Mix (Summary Compensation Table)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $535,800 | $568,000 | $602,080 |
| Stock Awards (grant-date fair value) | $282,638 | $318,106 | $330,138 |
| Non-Equity Incentive (Annual Bonus) | $348,500 | $170,587 | $385,500 |
| All Other Compensation | $72,363 | $65,427 | $76,731 |
| Total | $1,239,301 | $1,122,120 | $1,394,449 |
Compensation peer/consultant: Meridian Compensation Partners advised in 2024; peer group of 21 regional banks used for benchmarking; program aims to approximate peer-level aggregate cash (salary+bonus) at target performance.
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (CEO) | 159,073 shares (0.75% of outstanding); includes 8,547 ESOP shares. |
| Company Shares Outstanding (Record Date) | 21,140,812 (Feb 21, 2025). |
| Unvested RS (at 12/31/2024) | 5,088 (1/25/22); 6,431 (2/06/23); 6,511 (2/06/24); market value $177,215; $223,992; $226,778 respectively at $34.83 close. |
| Unearned PSUs (at target, 12/31/2024) | 5,088 (1/25/22); 6,431 (2/06/23); 6,511 (2/06/24); market value $177,215; $223,992; $226,778 at $34.83; PSUs not counted in beneficial ownership. |
| Options | None outstanding for NEOs as of 12/31/2024; no new option grants since 2013 (except 2018 conversion with TCSB acquisition). |
| Hedging/Pledging | Prohibited for executives and directors under Insider Trading Policy. |
| Ownership Guidelines (CEO) | ≥3x base salary; includes unvested RS and vested in-the-money options; PSUs excluded; 5-year ramp; sales restricted if below guideline. |
Note: Using 12/31/2024 close ($34.83) and 159,073 owned shares implies ~$5.55m value, comfortably above 3x 2024 salary guideline; PSUs excluded by policy.
Vesting Calendar and Potential Supply
| Grant | Shares | Vest/Measurement Date | Commentary |
|---|---|---|---|
| RS (1/25/22) | 5,088 | 1/25/2025 | Cliff vest after 3 years; potential sale window subject to 10b5-1/policy. |
| PSUs (1/25/22, target) | 5,088 | 1/25/2025 (performance end) | Shares issued based on TSR/ROAA earnout; supply contingent on performance. |
| RS (2/06/23) | 6,431 | 2/06/2026 | Cliff vest. |
| PSUs (2/06/23, target) | 6,431 | 2/06/2026 (performance end) | Performance-based issuance. |
| RS (2/06/24) | 6,511 | 2/06/2027 | Cliff vest. |
| PSUs (2/06/24, target) | 6,511 | 2/06/2027 (performance end) | Performance-based issuance. |
| RS/PSUs (2025) | 5,791 / 5,791 | +3 years from grant | Approved 2025 awards; grant-date price $36.15. |
- Insider trading policy bans hedging/pledging; vestings can create episodic Form 4 activity. Company repurchases may provide offsetting liquidity (authorized up to 1.1m shares for 2025; 266,008 shares repurchased YTD through 9/30/2025 for $7.77m).
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement | None; base salaries set annually; no individual employment contract. |
| Continuity (Change-in-Control) Agreements | Evergreen 3-year terms; triggered if termination (or constructive termination for “good reason”) occurs within 36 months after, or within 6 months before in contemplation of, a change in control; double trigger; excludes cause, death, disability, or resignation without good reason. |
| CIC Severance Economics | Lump sum of 18 months to 3 years of salary+bonus; continued benefits for 18–36 months; capped to $1 below 3x “base amount” under IRC 280G (no excise tax gross-up disclosed). |
| Estimated CIC Payout (12/31/2024 scenario) | Kessel: $2,850,962; 280G cap: $3,264,552. |
| Clawback Policy | Company will recoup certain incentive compensation upon a financial restatement. |
| Non-Compete/Non-Solicit | Not specifically disclosed in proxy; continuity agreement defines “good reason” (compensation reduction, adverse duty changes, material employment term changes). |
Board Governance and Service
- Board service: Director since 2013; not independent (as CEO). Committees chaired by independent directors: Audit (Chair: Cok), Compensation (Chair: Budden), Nominating & Governance (Chair: Boer). Kessel is not listed on any board committee.
- Leadership structure: Independent Chair (Gulis) and Lead Independent Director (Boer); regular executive sessions without management and without non-independent directors; board met 7 times in 2024 with all directors ≥75% attendance; all attended 2024 annual meeting.
- Director ownership guideline: non-employee directors expected to own ≥$300,000 within 5 years; half of retainers paid in stock until guideline met; director annual retainer $68,000 plus chair/chairperson adders.
Performance & Track Record
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Cumulative TSR (initial $100) | 85.72 | 115.03 | 119.91 | 136.67 | 188.95 |
| Peer Cumulative TSR (Nasdaq Bank Index) | 87.20 | 119.74 | 99.06 | 109.02 | 146.80 |
| Net Income ($m) | 56.15 | 62.90 | 63.35 | 59.07 | 66.79 |
| EPS ($) | 2.53 | 2.88 | 2.97 | 2.79 | 3.16 |
Recent operating highlights (Q3 2025): ROAA 1.27%, ROAE 14.57%, NIM 3.54%, efficiency ratio 58.86%, loan growth 3.2% annualized, deposit growth (ex-brokered) 13.0% annualized, allowance for credit losses 1.49% of loans; dividend $0.26/share paid Aug 15, 2025.
Compensation Peer Group (Benchmarking)
- Consultant: Meridian Compensation Partners (2024).
- Peer set includes regional banks such as Community Trust Bancorp, First Financial, Horizon Bancorp, Mercantile Bank, German American Bancorp, HBT Financial, Lakeland Financial, Old Second Bancorp, Equity Bancshares, QCR Holdings, Bank First, First Business Financial Services, Bridgewater Bancshares, Civista, Farmers National, CNB Financial, First Mid, West Bancorporation, MidwestOne, Orrstown, S.Y. Bancorp (list as disclosed).
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: ~96.1% FOR, 3.6% AGAINST, 0.3% ABSTAIN; committee made no material program changes following strong support.
Risk Indicators & Red Flags
- Hedging/pledging of company stock prohibited (positive alignment).
- No options granted since 2013; reduces repricing risk (positive).
- Clawback in place for restatements (positive).
- Related-party lending within ordinary course, market terms; totaled $3.94m, ~0.9% of shareholders’ equity (not unusual for community banks).
Equity Ownership, Vesting, and Potential Selling Pressure
- Material upcoming vesting/issuance waves in early 2025 (2012 RS/PSUs), 2026 (2013 RS/PSUs), and 2027 (2014 RS/PSUs), with 2025 awards layered on top. Supply impact depends on PSU performance outcomes and personal liquidity needs; insider policy constraints and repurchase authorization may mitigate float effects.
Investment Implications
- Pay-for-performance alignment: Annual incentives tied 80%–60% to company-wide metrics (EPS, efficiency, NPAs/TA, deposit growth); LTIs emphasize relative TSR and ROAA, anchoring to shareholder outcomes. Strong 2024 EPS and TSR vs peers support higher CEO bonus and a move to 60% target bonus for 2025.
- Retention risk: No employment agreement but robust double-trigger CIC protection (estimated ~$2.85m), plus meaningful unvested RS/PSU value and sizable outright ownership bolster retention. Hedging/pledging ban and ownership guidelines further align incentives.
- Trading signals: Scheduled three-year RS/PSU cliffs create periodic supply; 2025 repurchase program (up to ~5% of shares; 266k bought 9M’25) provides technical support that can absorb insider-related liquidity. Monitor Form 4s around vesting windows and PSU performance determinations.
- Governance quality: Separation of CEO/Chair, Lead Independent Director, independent committees, executive sessions, high say-on-pay support are positive governance indicators; CEO as non-independent director is standard for a community bank.