Michael Dury
About Michael R. Dury
Michael R. Dury (age 40) is President and Chief Executive Officer of Merchants Capital, having joined the company in July 2007 and progressing through roles including Assistant Vice President, Vice President, Senior Vice President, Executive Vice President, and Chief Operating Officer . His pay is heavily tied to Merchants Capital fee generation via an “at will” employment agreement with commission tiers and a 5% volume bonus, plus company-level performance RSUs linked to total revenue, EPS, and ROAE targets . Company performance relevant to his incentive framework: 2024 net income $320,386,000, ROAE 16.86%, and cumulative TSR index value of $294 (vs $340 in 2023) . The Compensation Committee affirmed a pay-for-performance design, used the 2017 Equity Incentive Plan for RSUs, and reported a 2024 say‑on‑pay approval above 70% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Merchants Capital | President & CEO; previously Assistant VP, VP, SVP, EVP, COO | 2007–present | Compensation directly tied to designated borrower fee commissions and a 5% volume bonus on total fee income, aligning incentives to business growth |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Providence Cristo Rey College and Preparatory High School (Indianapolis) | Board of Directors | Not disclosed | Community ties; governance exposure |
| The Notre Dame Club of Indiana | President (prior) | Not disclosed | Network-building; local leadership |
Fixed Compensation
Base Salary (Annual)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $260,000 | $300,000 | $315,000 |
Target Incentives (2024)
| Metric | 2024 |
|---|---|
| Target Cash Incentive | Not established for Dury |
| Target Equity Incentive ($) | $220,500 |
Cash Bonus / Commissions (Multi‑year)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Bonus (commissions + volume bonus) ($) | $8,418,016 | $5,976,839 | $5,868,913 |
Performance Compensation
Incentive Design (Company‑level metrics applied to RSUs and cash incentives)
- Metrics: total revenue, EPS (earnings per common share), ROAE; equal weighting; payout range 75%–125% of target; zero payout if thresholds unmet or bank not well capitalized .
- 2024 results vs targets (payout basis): bank remained well capitalized all quarters; average payout 103% of target .
| Metric | Target | Actual | % of Target | Weighting | Payout (2024) |
|---|---|---|---|---|---|
| Total Revenue ($) | $591,354,000 | $646,454,000 | 109% | Equal | 103% (overall) |
| EPS ($) | $6.31 | $6.30 | 100% | Equal | 103% (overall) |
| ROAE (%) | 17.12% | 16.86% | 99% | Equal | 103% (overall) |
Equity Grants and Vesting
| Metric | 2024 Grant | Vesting |
|---|---|---|
| RSUs (#) | 5,334 units granted 12/31/2023, GDFV $227,122 | Time‑based RSUs vest over 3 years from 2026–2028 |
| Equity incentive payout % | 103% of target for 2024 awards; pro‑rated rules applied to NEOs where relevant | RSUs vest ratably over 3 years; first tranche 2/1/2026 for 2024 awards |
Equity Ownership & Alignment
Beneficial Ownership (Record Date: March 21, 2025)
| Metric | Value |
|---|---|
| Shares beneficially owned | 103,615 |
| Common shares outstanding | 45,881,706 |
Outstanding Unvested RSUs (as of 12/31/2024)
| Metric | Units | Market Value (at $36.47) |
|---|---|---|
| Unvested RSUs | 16,584 | $604,818 |
RSU Vesting Schedule (as of 12/31/2024)
| Vest Date | Units |
|---|---|
| Vested 2/1/2025 | 8,540 |
| Will vest 2/1/2026 | 4,993 |
| Will vest 2/1/2027 | 3,051 |
Stock Vesting in 2024
| Metric | Units Vested | Value Realized |
|---|---|---|
| 2024 vesting | 8,376 | $353,216 (at $42.17 on 2/1/2024) |
Alignment Policies
- Ownership guidelines: none required for executives; NEOs may receive RSUs; directors receive stock retainers .
- Hedging/pledging: no current prohibition; directors/executives must obtain General Counsel approval before transacting .
- RSU acceleration: each RSU will accelerate and vest upon a change in control in accordance with the 2017 Plan (plan also describes acceleration with change in control and certain terminations) .
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement | First Amended and Restated Employment Agreement effective 1/1/2021; “at will” |
| Commission Tiers (Designated Borrowers) | No commission until loan fees exceed 2x base salary; 20% for portion >2x base up to $750k; 25% for portion $750k–$1,000k; 30% for portion >$1,000k |
| Volume Bonus | 5% of Merchants Capital total fee income (excluding designated borrower fees already commissioned) |
| Non‑Compete / Non‑Solicit | 12‑month non‑competition and non‑solicitation period |
| Change‑in‑Control (CIC) Agreement | Double‑trigger: 2× base salary + 2× target cash incentive upon CIC and qualifying termination; confidentiality, clawback, 12‑month non‑compete/non‑solicit; no CIC agreement for CEO or for Sievers |
| CIC Economics (as of 12/31/2024) | Cash severance $630,000 (2× base); RSU acceleration value $604,818 (market at $36.47) |
| Clawback Policy | Complies with SEC/Nasdaq Dodd‑Frank clawback rules; recovery of excess incentive compensation on restatements |
Compensation Structure Analysis
- Pay mix: Highly variable and performance‑linked; substantial commissions/volume bonus plus RSUs tied to revenue, EPS, ROAE; no stock options used (Company issues RSUs only under 2017 Plan) .
- Benchmarking: Peer group of 24 institutions with multifamily exposure and comparable revenue scale; Aon engagement in 2022; peer group maintained for 2024 with deletions post‑mergers .
- Governance safeguards: No single‑trigger cash severance; CIC agreements are double‑trigger; clawback policy adopted; incentive payouts subject to well‑capitalized status .
Risk Indicators & Red Flags
- Hedging/pledging permitted (policy risk to alignment); no executive ownership requirements .
- Related party policies robust; RSUs accelerate on change in control per plan; no option repricing; no tax gross‑ups .
- Say‑on‑pay: 2024 approval above 70% (not a red flag) .
Compensation Peer Group (Benchmarking)
- 2024 peer group includes institutions such as First Merchants, Lakeland Financial, Walker & Dunlop, CVB Financial, and others; used to inform, not fix, percentile targets .
Say‑on‑Pay & Shareholder Feedback
| Year | Vote Outcome |
|---|---|
| 2024 | Over 70% approval on NEO compensation |
| 2023 Frequency | Over 98% favored annual say‑on‑pay |
Expertise & Qualifications
- Industry: 17+ years with Merchants Capital (joined 2007); progressive leadership culminating in President & CEO .
- Community leadership: Board member Providence Cristo Rey; former President of The Notre Dame Club of Indiana .
Work History & Career Trajectory
| Organization | Role | Time | Notes |
|---|---|---|---|
| Merchants Capital | President & CEO; previously AVP, VP, SVP, EVP, COO | 2007–present | Leads fee‑driven origination and capital markets activities; incentives tied to business performance |
Performance & Track Record (Company context)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Income ($000) | $180,533 | $227,104 | $219,721 | $279,234 | $320,386 |
| ROAE (%) | 25.09% | 22.07% | 17.21% | 17.63% | 16.86% |
| Cumulative TSR Index (base $100) | $143 | $246 | $192 | $340 | $294 |
Investment Implications
- Strong pay‑for‑production alignment: Dury’s commission and 5% volume bonus hard‑link his compensation to Merchants Capital fee income, creating direct sensitivity to origination volume and pricing; RSUs add multi‑year alignment tied to revenue, EPS, ROAE, with 3‑year vesting serving as retention .
- Retention vs. liquidity: Material unvested RSUs through 2027, plus CIC severance (2× salary + 2× target cash incentive) and non‑compete/non‑solicit for 12 months, reduce near‑term departure risk; however, absence of ownership requirements and permitted hedging/pledging modestly weaken alignment and could contribute to episodic selling pressure around vest dates .
- Governance quality: Clawback policy implemented; double‑trigger CIC; no options or repricing; say‑on‑pay support >70%—all supportive of shareholder‑aligned oversight; monitoring of hedging/pledging practices remains a point of focus .