Nicholas Zillges
About Nicholas Zillges
Nicholas W. Zillges is President and Chief Executive Officer of Marathon Bancorp, Inc. and Marathon Bank, and has served as CEO and director of Marathon Bank since 2014 and as a director of Marathon Bancorp, Inc. since its inception in 2020. He has over 27 years of banking experience in executive management roles, with core expertise in commercial banking, risk management, and growth strategy; age 49 as of June 30, 2025 . Under his leadership the company converted from mutual holding company to a full stock holding company in April 2025 and listed on Nasdaq, expanded into Southeastern Wisconsin (including a Brookfield branch opening in 2024), and built a commercial real estate platform while maintaining strong asset quality (non-performing assets 0.45% of total assets at June 30, 2025) . No formal TSR or EBITDA metrics are disclosed in the company’s proxy or 10-K; stock traded OTC prior to Nasdaq listing and paid no dividends in FY 2024-2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Marathon Bank | President & CEO; Director | 2014–present | Led modernization and risk upgrades; expanded CRE lending platform; market expansion to Southeastern WI |
| Marathon Bancorp, Inc. | Director | 2020–present | Oversight through mutual-to-stock conversion and public listing on Nasdaq |
External Roles
No external board or non-profit roles disclosed for Mr. Zillges in the proxy or 10-K .
Fixed Compensation
| Fiscal Year | Base Salary ($) | All Other Compensation ($) | Key Perquisites/Contributions |
|---|---|---|---|
| FY 2025 | 346,500 | 53,524 | 401(k) contribution $20,498; ESOP allocation $9,026; auto reimbursement $24,000 |
| FY 2024 | 330,000 | 41,628 | 401(k) contribution $19,800; ESOP allocation $3,828; auto reimbursement $18,000 |
Key contract features:
- Automatic minimum 5% annual base salary increase; eligibility for bonus plans; perquisites include use of bank-owned country club and monthly automobile/lodging reimbursement ($2,000/month as of 2025; previously $1,500/month) .
- Mr. Zillges does not receive separate director fees; non-employee directors receive monthly cash fees only .
Performance Compensation
| Fiscal Year | Bonus ($) | Plan Type | Performance Considerations | Weighting | Target/Actual | Payout Mechanics | Vesting |
|---|---|---|---|---|---|---|---|
| FY 2025 | 173,250 | Short-term bonus program | Successful completion of second-step conversion and stock offering; strong asset quality; net income growth; loan portfolio risk reduction | Not disclosed | Target ≥50% of base salary eligibility per agreement; strict numerical formulas not used | Cash bonus paid for FY performance | N/A (cash) |
| FY 2024 | — | Discretionary bonus | No CEO bonus; discretionary awards made to other NEOs based on operations | Not disclosed | Eligibility per agreement | N/A | N/A |
Notes:
- Employment agreement sets bonus eligibility at a target opportunity of at least 50% of base salary (plan design/eligibility, not a guaranteed payout) .
- The proxy explicitly states strict numerical formulas were not used in quantifying FY 2025 bonuses; payout was based on board assessment versus corporate objectives .
Equity Ownership & Alignment
| Item | Amount | Detail |
|---|---|---|
| Beneficial ownership (as of Sept 30, 2025) | 104,504 shares; 3.5% of outstanding | Includes holdings and rights within 60 days |
| Holdings detail | 47,780 (401(k)); 604 (IRA); 2,723 (ESOP); 5,999 unvested RSUs; options to acquire 20,994 within 60 days | Breakdown per Security Ownership table |
| Pledging/Hedging | Prohibited; no exceptions approved; no executive or director has pledged stock | Anti-hedging/anti-pledging policy in Insider Trading Policy |
| Stock ownership guidelines | Not disclosed | — |
Outstanding equity awards at year-end (granted under 2022 Equity Incentive Plan):
- Stock options: 2,999 exercisable and 4,498 unexercisable at $6.48 (exp. 5/16/2033); 17,966 exercisable and 11,997 unexercisable at $8.13 (exp. 6/28/2032) .
- Restricted stock: 5,999 unvested; market value $59,750 based on $9.96 closing price on 6/30/2025 .
- Vesting schedules: options/RSAs vest 20% annually, in five installments commencing 6/28/2023 and 5/16/2024 respectively; acceleration upon death, disability, or involuntary termination on/after a change in control .
Employment Terms
| Provision | Base Term | Economic Terms | Triggers/Restrictions |
|---|---|---|---|
| Employment Agreement (dated Apr 14, 2021) | 3-year term; auto-renews annually unless 30-day notice | Base salary with minimum 5% annual increase; target bonus ≥50% of base; perquisites include country club use and monthly automobile/lodging reimbursement ($2,000/month as of 2025) | Standard termination rights; bonus eligibility per plan |
| Severance (non-CIC) | 2x (base + highest target bonus in last 3 periods) | 50% lump sum within 60 days; 50% over 24 months; up to 12 months COBRA reimbursement with tax gross-up | Qualifying termination (without cause or for good reason) |
| Severance (Change in Control) | 3x (base as of termination or pre-CIC if higher + highest target bonus in last 3 periods) | Lump sum within 60 days; up to 18 months COBRA reimbursement with tax gross-up | Double trigger: qualifying termination on/within 2 years after CIC |
| Restrictive Covenants | Non-compete and non-solicit for 1 year post termination (non-CIC) | — | — |
| Clawback | Not disclosed | — | — |
Change-in-control agreements exist for certain other executives with 1x salary+target bonus severance and 12 months COBRA reimbursement; conversion to stock form was not treated as a CIC for these agreements .
Board Governance
- Role: CEO and director; not independent (executive status) .
- Board leadership: independent Chair (Amy Zientara); positions of Chair and CEO separated; executive sessions of independent directors at least twice per year .
- Committees: Audit (Chair: Amy Zientara; includes Grimm, Werth, Wimmer; Grimm is audit committee financial expert); Compensation (Chair: Amy Zientara; same membership); Nominating & Corporate Governance (Chair: Ann Werth; same membership) .
- Attendance: In FY 2025, the Marathon Bancorp board held 11 regular meetings; Marathon Bank held 12 regular and 2 special meetings; no director or committee member attended fewer than 75% of applicable meetings .
- Director compensation: non-employee directors received $24,100 cash (monthly fees plus small bonus) in FY 2025; Mr. Zillges received no director fees .
Performance & Track Record
- Strategic milestones: mutual-to-stock conversion completed April 21, 2025; Nasdaq listing under MBBC; proceeds of $16.9M net of $1.7M expenses; ESOP financing consolidated to $2.1M term loan; legacy awards adjusted at exchange ratio 1.3728:1 .
- Business build-out: CRE portfolio reached $91.9M (45.4% of loans) with disciplined underwriting and majority non-owner occupied; Southeastern WI focus; multifamily $47.8M (23.6% of loans); strong loan quality practices .
- Asset quality: non-performing assets $1.063M; non-performing loans 0.03% of loans; total NPAs 0.45% of assets at June 30, 2025 .
- Market/stock: No dividends paid in FY 2024–2025; shares listed on Nasdaq post-conversion; prior OTC trading ranges disclosed .
Related Party Transactions & Legal
- No loans to executive officers/directors outstanding at June 30, 2025; no related party transactions exceeding $120,000; periodic audit committee reviews required .
- Legal proceedings: none material as of June 30, 2025 .
Compensation Committee & Say-on-Pay
- Compensation philosophy: attract/retain talent; balance short-/long-term goals; align with shareholders; competitive vs peer banks; uses ABA compensation surveys; no consultant engaged in FY 2025 .
- Emerging growth company: not required to hold say-on-pay votes or pay-vs-performance disclosure; auditor attestation not required; may use scaled disclosures .
Risk Indicators & Red Flags
- Positive: Independent Chair; executive sessions; prohibited hedging/pledging; strong disclosure on insider trading policy; improving commercial portfolio with underwriting discipline .
- Potential concerns: Tax gross-ups on COBRA reimbursements in severance/change-in-control (shareholder-unfriendly in some frameworks) ; significant at-risk pay discretion (lack of disclosed metric weightings) .
Compensation Structure Analysis
- Mix shift: Cash bonus reintroduced and materially increased in FY 2025 ($173,250), consistent with conversion-related accomplishments; no CEO bonus FY 2024 .
- Equity awards: 2022 Equity Incentive Plan utilizes 5-year graded vesting RSAs/options; acceleration upon specific CIC/death/disability; no repricing noted; awards restated at 1.3728 exchange ratio post-conversion .
- Guaranteed components: Contractual 5% minimum annual base increase and fixed monthly auto/lodging reimbursement .
- Peer benchmarking: ABA surveys, no consultant, no explicit target percentile disclosed .
Equity Ownership & Potential Selling Pressure
- Annual vesting dates (20% tranches) for RSAs/options on 6/28 and 5/16 each year could generate periodic liquidity events; unvested RSAs of 5,999 shares at 6/30/2025; exercisable options within 60 days totaled 20,994 as of the record date .
- Anti-pledging rule reduces forced-selling risk from margin calls; board permits exceptions only for non-margin loans but none approved .
Investment Implications
- Alignment: 3.5% personal stake with retirement-plan and ESOP exposure, unvested RSAs/options, and anti-hedging/anti-pledging policy support alignment; however, discretionary bonus design limits transparency of pay-for-performance .
- Retention: Robust severance (2x non-CIC; 3x CIC with double trigger) and 5-year graded vesting underpin retention; automatic base increases further stabilize tenure .
- Trading signals: Watch annual vesting dates (June 28 and May 16 cycles) for potential incremental supply; monitor Form 4s for exercises/disposals given sizable exercisable option balance and RSU vestings .
- Governance: Independent Chair, committee-only independent directors, and regular executive sessions are positives; tax gross-up in severance is a governance blemish that could draw investor scrutiny in a sale/CIC scenario .
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