Eric Meilstrup
About Eric Meilstrup
Eric J. Meilstrup, age 57, is President & Chief Executive Officer of LCNB Corp. and LCNB National Bank and serves on the Board; he has been with the Bank for 36 years and on the executive team for the last 21 years, and has been a director since 2018 with a term to expire in 2027 . Recent pay-versus-performance data shows TSR of $122.53 in 2022, $107.35 in 2023, and $103.00 in 2024 alongside Net Income of $22.1M, $12.6M, and $13.5M, respectively, with the company noting M&A integration costs affecting 2024 results . Over the last 10 years, LCNB highlights total assets managed up 160% to $4.2B and non-performing loans/total loans improving to 0.27% (from 0.82% in 2014), with net charge-offs averaging 0.04% annually, evidencing asset quality discipline under board oversight while Meilstrup held senior roles .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| LCNB Corp. / LCNB National Bank | President & Chief Executive Officer | Not disclosed (CEO currently) | Leads strategic direction, senior team development, investor engagement, and M&A outreach |
| LCNB National Bank | Executive team member | Last 21 years (as of 2025) | Oversight of deposit operations, branch operations, HR, training, and customer service; operational leadership |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Countryside YMCA | Board member; past Chair | Current/past (dates not disclosed) | Community leadership and stakeholder engagement |
| Warren County Foundation | Board member | Current (date not disclosed) | Philanthropy and local network tie-ins |
| West Side Church of Christ | Board member | Current (date not disclosed) | Community presence |
| Warren County Career Center District | Business Advisory Committee member | Current (date not disclosed) | Workforce and skills pipeline |
| Lebanon Optimist Club | Charter member | Current (date not disclosed) | Community service |
Fixed Compensation
| Metric ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | 395,000 | 431,000 | 470,000 |
| All Other Compensation | 44,754 (incl. health, LTD, auto allowance, 401k; see footnote) | 38,807 (incl. benefits, 401k) | 38,168 (incl. benefits $11,096, auto allowance $2,123, 401k $24,949) |
Notes:
- CEO pay ratio for 2024: 12.77x vs median employee pay ($598,689 vs $46,893) .
- Base salary increased ~9% in 2024; the company targets market median within 25th–75th percentile ranges .
Performance Compensation
| Incentive | Metric | Target | Maximum | Actual (FY 2024) | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Cash Incentive (Company) | ROAA | 8.5% of salary | 25% of salary | ROAA 0.75% yields 0% payout | $0 | Cash (annual) |
| Annual Cash Incentive (Individual) | CEO-specific strategic objectives | +5% of salary potential | +5% of salary potential | Not earned for CEO (others earned 5%) | $0 | Cash (annual) |
| Equity Incentive (Restricted Stock) | EPS, Efficiency Ratio, ROAA, AUM Growth (budget-based) | 20% of salary | 40% of salary | Awarded at 12% of salary (below target) | Grant fair value $84,045; 6,059 shares on 3/4/2024 | 5 equal annual installments beginning 3/4/2025 |
Company-reported 2024 performance drivers for equity:
- EPS $0.88, Efficiency Ratio 77.77%, ROAA 0.57%, AUM growth 8.94% → resulted in 12% of base salary equity grant .
Equity Ownership & Alignment
| Ownership Detail | Value |
|---|---|
| Beneficial Ownership (CEO) | 45,005 shares; 0.32% of outstanding |
| Unvested Restricted Shares (would vest upon CIC with double-trigger) | 19,350 shares; $292,762 value at $15.13 close |
| 2024 RS Grant | 6,059 shares; $84,045 grant date fair value on 3/4/2024 |
| Shares acquired on vesting in 2024 | 4,672 shares; $70,687 value realized |
Outstanding restricted stock by grant (unvested as of 12/31/2024):
| Grant Date | Unvested Shares | Vesting Start | Vesting Schedule |
|---|---|---|---|
| 2/18/2020 | 960 | 2/18/2021 | 5 equal annual tranches |
| 2/23/2021 | 2,243 | 2/23/2022 | 5 equal annual tranches |
| 2/22/2022 | 3,179 | 2/22/2023 | 5 equal annual tranches |
| 1/23/2023 | 6,908 | 1/23/2024 | 5 equal annual tranches |
| 3/04/2024 | 6,059 | 3/04/2025 | 5 equal annual tranches |
Additional alignment policies:
- No strict executive stock ownership guidelines; the company “strongly encourages” ownership and applies multi-year vesting (most awards have 5-year schedules) .
- Restricted awards cannot be sold, assigned, transferred, or pledged during the restricted period; dividends are withheld and distributed upon vesting/settlement .
- Hedging policy: the company “does not currently have a hedging policy” permitting or limiting employee/director trading in derivatives; no disclosure of pledging by the CEO beyond plan restrictions .
Employment Terms
- Employment status: At-will; no employment agreements or severance agreements for NEOs (including CEO) .
- Change-in-control: Double-trigger vesting acceleration for equity awards under the 2015/2025 plans (triggered by involuntary termination without cause or voluntary termination for “good reason” within 3 months prior to and 12 months after CIC) .
- CIC value for CEO’s unvested equity: 19,350 shares; $292,762 at $15.13 as of 12/31/2024 .
- Deferred compensation: CEO can defer bonus; balance accrues at 8% annually (above-market 1.57% portion disclosed); aggregate balance $445,318 at 12/31/2024 with lump-sum or 10-year payout elections; paid upon termination or CIC .
- Clawback policy: Mandatory recovery of erroneously awarded incentive-based compensation upon material restatement or misconduct; applies to cash incentive and equity awards .
Board Governance
- Board service: Director since 2018; term expires 2027 .
- Independence: Board determined all directors except Eric J. Meilstrup, Robert A. Bedinghaus, and William H. Kaufman are independent under NASDAQ rules; Meilstrup is not independent due to executive role .
- Leadership structure: Split roles with Spencer S. Cropper as independent Chairman; Meilstrup is CEO and director, which mitigates combined power concerns .
- Committees: Meilstrup serves on the Pension Committee; he is not listed on Audit, Compensation, or Nominating & Corporate Governance .
- Attendance: The board met 6 times in 2024; all directors attended at least 95% of board/committee meetings .
- Director compensation: Employees do not receive director fees; CEO received $0 for board service in 2024 .
Director Compensation
| Component | Amount |
|---|---|
| Board fees (LCNB Corp. Board) | $0 for Eric Meilstrup (employee director) |
| Bank Board retainer | Employee directors do not receive fees; non-employee director fee schedule disclosed separately |
| Director equity grant | $0 for Eric Meilstrup; non-employee directors received $17,000 in 2024 |
Compensation Structure Analysis
- Mix shift: 2024 below-target performance reduced variable cash payouts to zero for the CEO (company and individual), while equity grants were awarded below target at 12% of salary, maintaining long-term alignment and retention through 5-year vesting .
- Market benchmarking: Committee targets compensation around the market median using BCG’s independent studies; CEO base salary rose 9% in 2024 consistent with peer positioning goals .
- Performance metrics: Cash incentives tied to ROAA; equity tied to EPS, efficiency ratio, ROAA, and AUM growth — all budget-linked; discretionary bonuses were not paid to the CEO in 2024 .
- Clawback and risk: Clawback applies to both cash and equity; plans use double-trigger CIC accelerations, reducing single-trigger windfalls .
Equity Vesting Schedules and Insider Selling Pressure
| Item | Detail |
|---|---|
| RSU/RS vesting | 5 equal annual installments; death, incapacity, or retirement at 65 accelerates vesting; dividends withheld until vest/settlement |
| 2024 stock vested | 4,672 shares vested; $70,687 realized value |
| Outstanding unvested | 19,350 shares unvested (CEO) |
Note: Company prohibits pledging of restricted shares during the restricted period; no separate disclosure of any pledged common shares by CEO beyond plan restrictions .
Pension and Deferred Compensation
| Plan | Years Credited | Present Value | Aggregate Balance |
|---|---|---|---|
| Defined Benefit Pension (CEO) | 34 | $690,899 | N/A |
| Non-Qualified Deferred Comp (CEO) | N/A | N/A | $445,318 (8% accrual; above-market portion disclosed) |
Performance & Track Record
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| PEO “Compensation Actually Paid” ($) | 621,903 | 665,222 | 646,895 |
| TSR (Value of $100) | 122.53 | 107.35 | 103.00 |
| Net Income ($000s) | 22,128 | 12,628 | 13,492 (would have been $17,616 excluding one-time M&A costs) |
Qualitative achievements (10-year highlights): asset growth to $4.2B; NPL ratio improved to 0.27%; trust/wealth AUM up 253% to $1.4B; dividend up 38% to $0.88 and 2,036,356 shares repurchased (2020–2024); five acquisitions since 2014 .
Compensation Peer Group and Governance
- Peer group (2024 Executive Compensation Study): Civista Bancshares, Farmers & Merchants Bancorp, Middlefield Banc Corp, CF Bankshares, ACNB, Peoples Financial Services, ChoiceOne Financial, etc. .
- Target percentile: Base salary and total compensation designed between 25th–75th percentile with median as reference point .
- Compensation Committee: Independent; chaired by Anne E. Krehbiel; uses BCG as independent consultant; alternates executive and director reviews annually .
Related Party Transactions and Risks
- Related party transactions: Legal services purchased from firm associated with non-independent director William H. Kaufman ($95,044 in 2024), approved by disinterested directors; no process disclosed in writing, but unwritten policy described .
- Risk indicators: No hedging policy; double-trigger CIC; strong clawback; board separation of Chair and CEO; say-on-pay on ballot annually (2025 meeting includes say-on-pay) .
Say-on-Pay & Shareholder Feedback
- Advisory vote on executive compensation scheduled at 2025 annual meeting; Board recommends FOR; frequency set to annual since 2022 .
- No historical approval percentages disclosed in this proxy.
Equity Ownership & Alignment Compliance
- Stock ownership guidelines: No strict targets; executives encouraged to own stock; multi-year vesting supports long-term alignment .
- Compliance status: Not applicable due to lack of formal numeric guideline; CEO beneficial ownership 0.32% .
Investment Implications
- Pay-for-performance: The 2024 zero cash incentive for the CEO on company and individual metrics indicates commitment to ROAA-driven discipline; equity grants were below target (12% of salary) and vest over 5 years, aligning with long-term EPS/efficiency/ROAA/AUM goals .
- Retention and selling pressure: Material unvested equity (19,350 shares) and an 8% accruing deferred comp balance ($445k) provide retention hooks; vesting events drive periodic share issuance, but no disclosed hedging/pledging beyond plan prohibitions on restricted stock pledging, limiting near-term forced selling signals .
- CIC economics: Double-trigger vesting with defined “good reason” lowers windfall risk; estimated CIC equity value of ~$293k suggests moderate acceleration exposure, with additional deferred comp payout flexibility potentially smoothing transitions .
- Governance quality: Separate Chair/CEO structure, independent Compensation Committee, and advisor use bolster oversight; lack of a formal hedging policy and unwritten related party transaction policy are governance gaps to monitor .
- Performance track: TSR declined 2022→2024 while net income improved in 2024 (post-M&A cost normalization expected); long-term asset quality improvements and AUM growth underpin future EPS compounding if integration synergies are realized .