Martin Schroeter
About Martin Schroeter
Martin A. Schroeter, age 63, is President – Warehouse Lending at Merchants Bancorp (MBIN), overseeing the bank’s mortgage warehouse business; he joined Merchants in November 2019 and has more than 35 years of mortgage banking experience across several warehouse lenders and mortgage platforms . Company performance metrics used for 2024 incentive determinations were total revenue, EPS, and ROAE; MBIN delivered revenue of $646,454,000 vs a $591,354,000 target (109%), EPS of $6.30 vs $6.31 (100%), and ROAE of 16.86% vs 17.12% (99%), leading to a 103% payout on incentive plans for applicable NEOs . MBIN’s pay-versus-performance disclosure shows 2024 TSR at 294 (value of a $100 initial fixed investment) versus peer group TSR at 147; net income was $320,386,000 and ROAE 16.86% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ArcHome Mortgage | Executive Vice President | Not disclosed | Senior leadership at mortgage lender; warehouse lending expertise |
| ArcLine Lending, LLC | Partner | Not disclosed | Co-led lending platform; warehouse lending leadership |
| Cooper River Financial, LLC (later part of Ocwen Financial Corp.) | President & COO | Not disclosed | Led operations at mortgage finance company; business eventually integrated into Ocwen |
| GMAC (became Ally Bank) | Senior Managing Director, Warehouse Lending Group | Not disclosed | Ran warehouse lending group at major institution |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed | — | — | No external directorships or public board roles disclosed in proxy biography |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 300,000 | 400,000 | 420,000 |
| Bonus ($) | 125,000 | 588,000 | 840,000 |
| Equity Incentive Awards ($) | 151,503 | — | — |
| Non-Equity Incentive Awards ($) | 151,500 | 212,100 | 100 |
| All Other Compensation ($) | 12,988 | 13,900 | 14,350 |
| Total ($) | 740,991 | 1,214,000 | 1,274,450 |
| Salary Progression | 2023 Salary | 2024 Salary | Percentage Increase |
|---|---|---|---|
| Martin A. Schroeter | 400,000 | 420,000 | 5.0% |
| 2024 Targets (Structure) | Target Cash Incentive | Target Equity Incentive | Discretionary Cash Award Target |
|---|---|---|---|
| Martin A. Schroeter | Not established | Not established | 420,000 |
Performance Compensation
| Company Performance Measures (2024) | Target | Actual | % of Target | Payout Basis |
|---|---|---|---|---|
| Total Revenue ($) | 591,354,000 | 646,454,000 | 109% | Contributed to 103% payout for applicable NEO incentives |
| EPS ($) | 6.31 | 6.30 | 100% | Contributed to 103% payout |
| ROAE (%) | 17.12% | 16.86% | 99% | Contributed to 103% payout |
| Schroeter 2024 Discretionary Bonus | Metric | Weighting | Target ($) | Actual ($) | Payout | Vesting |
|---|---|---|---|---|---|---|
| Mortgage warehouse business performance vs budget | Discretionary (not formally weighted) | N/A | 420,000 | 840,000 | 200% of target (Board cap allowed) | Cash (immediate) |
| Nominal cash incentives | Training completion | N/A | — | 100 | — | Cash (immediate) |
Notes:
- For 2024, Schroeter had no established target cash or equity incentive award; compensation was intentionally tied to mortgage warehouse performance via a discretionary bonus framework .
- MBIN grants RSUs under the 2017 Plan and does not use options; equity awards (when granted) vest ratably over three years and are tied to company performance metrics (revenue, EPS, ROAE), with payout range 75–125% of target .
Equity Ownership & Alignment
| Ownership Metric | Value | Notes |
|---|---|---|
| Beneficial ownership (shares) | 16,155 | Includes ESOP-allocated shares votable by holder; excludes unvested RSUs not vesting within 60 days |
| Shares outstanding (record date) | 45,881,706 | Basis for ownership percentages |
| Ownership as % of shares outstanding | ~0.035% | Derived: 16,155 / 45,881,706; below 1% (proxy marks “*”) |
| Unvested RSUs at 12/31/2024 (#) | 6,040 | RSUs accelerate on change-in-control with qualifying termination (double-trigger) |
| Market value of unvested RSUs ($) | 220,279 | Based on $36.47 closing price at 12/31/2024 |
| Options outstanding | None | Company has only granted RSUs to NEOs to date |
| Ownership guidelines | None required | No required minimums for executives; directors receive some retainer in stock |
| Hedging/pledging policy | Not prohibited | Hedging and pledging allowed, subject to insider trading policy and General Counsel pre-approval |
| RSU Vesting Schedule (Schroeter) | 2024-02-01 | 2025-02-01 | 2026-02-01 |
|---|---|---|---|
| Shares vested / scheduled (#) | 8,560 vested; $360,975 value realized (at $42.17) | 4,439 vested | 1,601 will vest |
Employment Terms
| Term | Detail |
|---|---|
| Employment start date | November 2019 (joined Merchants) |
| Role | President – Warehouse Lending (oversees mortgage warehouse business) |
| Employment agreement | No fixed-term employment agreement (company generally does not have executive employment agreements; Mr. Dury is the exception) |
| Change-in-control agreement | Yes; double-trigger (CIC + termination without cause or with good reason in window from 120 days pre-announcement to 18 months post-CIC) |
| CIC cash severance (hypothetical at 12/31/2024) | $840,000 |
| CIC accelerated RSU value (hypothetical at 12/31/2024) | $220,279 (at $36.47/share) |
| Non-compete / Non-solicit | 12 months; restricted from competing in banking/mortgage lending in counties where MBIN operates; non-solicit of customers/employees |
| Clawback | Executive compensation subject to recovery under SEC/Nasdaq-compliant clawback policy (posted on company website) |
| Tax gross-ups | Company does not provide tax gross-ups (compensation philosophy “What we do not do”) |
| Equity vesting standards | RSUs vest ratably over 3 years; accelerate on CIC with qualifying termination; no vesting on death/disability/retirement unless approved |
Compensation Structure Observations
- Equity mix and instruments: MBIN uses RSUs only (no options); RSUs vest over three years and are performance-tied for applicable NEOs, aligning value creation and retention, while simplifying compensation structure .
- 2024 structure change for Schroeter: Replaced formal cash/equity incentives with a discretionary bonus tied directly to mortgage warehouse performance (target $420k; actual $840k), increasing cash weight and reducing equity exposure for 2024 .
- Peer group and benchmarking: Compensation Committee uses a defined peer group for 2024 decisions (list below) and considers peers without targeting a specific percentile, reducing ratcheting risk .
- Governance features: Double-trigger CIC agreements; clawback policy in place; no single-trigger CIC payments; no options repricing; no tax gross-ups .
Peer group used in 2024 decisions (selected): Banner Corp., First Busey Corp., OceanFirst Financial Corp., Berkshire Hills Bancorp Inc., First Financial Bancorp., Pacific Premier Bancorp, Brookline Bancorp Inc., First Foundation Inc., QCR Holdings Inc., Customers Bancorp Inc., First Merchants Corp., S&T Bancorp Inc., CVB Financial Corp., HomeStreet Inc., The Bancorp, Dime Community Bancshares Inc., Independent Bank Corp., TriCo Bancshares, Eagle Bancorp Inc., Lakeland Financial Corp., Walker & Dunlop Inc., Eastern Bankshares Inc., NBT Bancorp Inc., WaFd Inc. .
Risk Indicators & Red Flags
- No executive ownership guidelines; hedging/pledging permitted subject to approval, which may weaken alignment and introduce potential hedging/pledging risk over time .
- Compensation shifted toward discretionary cash in 2024 for Schroeter, reducing equity-based alignment for that year .
- Annual RSU vesting cadence (Feb 1) can create predictable supply events; company withholds shares to cover taxes at vest, reducing net shares issued but still a calendar concentration .
- Company states “What we do not do” includes no tax gross-ups and no single-trigger CIC, mitigating certain governance risks .
Say-on-Pay & Shareholder Feedback
- At the 2023 annual meeting, over 84% of votes cast supported NEO compensation; say-on-pay is held annually based on shareholder vote .
Performance Compensation (Detailed Mechanics)
| Incentive Type | Metric | Weighting | Target | Payout Range | Actual 2024 Outcome | Notes |
|---|---|---|---|---|---|---|
| Cash incentive (for applicable NEOs; not Schroeter) | Total revenue | 1/3 | Board-approved budget | 75–125% | Contributed to 103% payout | Well-capitalized condition each quarter required |
| Cash incentive (for applicable NEOs; not Schroeter) | EPS | 1/3 | Board-approved budget | 75–125% | Contributed to 103% payout | Threshold failure reduces payouts to zero |
| Cash incentive (for applicable NEOs; not Schroeter) | ROAE | 1/3 | Board-approved budget | 75–125% | Contributed to 103% payout | Well-capitalized condition applies |
| Equity incentive (RSUs; for applicable NEOs; not Schroeter) | Same three metrics | Equal weighting | Target equity incentive set for NEOs (not for Schroeter) | 75–125% | 103% award in RSUs; 3-year ratable vesting | No dividends paid pre-vesting |
| Schroeter discretionary bonus | Mortgage warehouse performance | Discretionary | $420,000 | Up to 200% without Board approval (cap) | $840,000 awarded | Determined by CEO/President; reported to Comp Committee |
Investment Implications
- Alignment: For 2024, Schroeter’s compensation skewed to cash via a large discretionary bonus tied to mortgage warehouse outperformance, reducing equity-based alignment for that year; RSU holdings and scheduled vesting remain modest relative to total shares outstanding (~0.035% beneficial ownership; 6,040 unvested RSUs) .
- Retention risk: RSU vesting occurs annually on February 1, with remaining tranches through 2026; vesting cadence and double-trigger CIC protections (cash severance $840,000; RSU acceleration value $220,279 at 12/31/2024) support retention and mitigate transition risk .
- Trading signals: Withholding-to-cover at vest reduces open-market selling pressure, but annual vest dates can create predictable supply; absence of ownership minimums and non-prohibition on hedging/pledging could increase potential future selling/hedging risk if utilized .
- Governance quality: Double-trigger CIC, clawback policy, no tax gross-ups, and no option repricing are positives; the use of strictly RSUs simplifies and ties equity to performance and retention, though 2024’s discretionary cash shift for Schroeter reduces direct linkage to formal company performance metrics for that year .
- Benchmarking discipline: Peer group applied without fixed percentile targeting reduces pay ratcheting; say-on-pay support (>84% in 2023) indicates shareholder acceptance of approach .