Charles Christmas
About Charles Christmas
Charles E. Christmas (age 59) is Executive Vice President, Chief Financial Officer and Treasurer of Mercantile Bank Corporation and Executive Vice President and Chief Financial Officer of Mercantile Bank. He joined Mercantile in 1998 and has served as CFO since 2000; he became EVP CFO in 2015. He holds a B.S. in Accountancy from Ferris State University and previously spent over ten years as an FDIC bank examiner. Revenue trends for FY 2022–FY 2024 are shown below; management’s incentive results indicate consistent performance on profitability, ROA, efficiency, and asset quality metrics in recent years .
- Education: B.S., Accountancy, Ferris State University
- Tenure: Joined Mercantile in 1998; CFO since 2000; EVP CFO since 2015
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Federal Deposit Insurance Corporation (FDIC) | Bank Examiner | 10+ years (not disclosed) | Supervised and examined financial institutions; deep regulatory, risk, and controls expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Michigan Bankers Association | Funds Management Committee Member | Not disclosed | Industry risk and asset/liability oversight |
| Michigan Bankers Association Perry School of Banking | Instructor | Not disclosed | Talent development and banking education |
| Ferris State University College of Business | Advisory Board Member | Not disclosed | Academic-industry linkage and curriculum input |
| Frederik Meijer Gardens & Sculpture Park | Board & Finance Committee Member | Not disclosed | Community leadership and financial stewardship |
| Make-A-Wish Foundation of Michigan | Board Member | Not disclosed | Non-profit governance |
Fixed Compensation
Multi-year summary from the proxy’s Summary Compensation Table.
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 374,921 | 394,921 | 415,000 |
| Bonus (cash) | — | — | — |
| Stock Awards (grant-date value) | 177,706 | 186,707 | — (no 2024 grants; moved to Feb 2025) |
| Non-Equity Incentive Plan Comp | 151,222 (incl. $20,000 discretionary) | 157,968 | 190,900 |
| Change in Pension/Deferred Earnings | — | — | — |
| All Other Compensation | 63,317 | 73,484 | 70,927 |
| Total Compensation | 767,166 | 813,080 | 676,827 |
Key notes:
- No equity grants were made in 2024 due to process timing; grants occurred in Feb 2025 .
- 2022 included a $20,000 discretionary bonus for Mr. Christmas .
Performance Compensation
Annual Cash Incentive (2024 Executive Officer Bonus Plan)
Plan included target and maximum levels with linear interpolation; the Company achieved 115.4% of plan, and Christmas received $190,900 (46.0% of salary) .
| Metric | Weight | Target | Max | Final Result | Payout Contribution |
|---|---|---|---|---|---|
| EPS | 25.0% | $4.86 | $5.59 | $5.29 | 30.5% |
| ROA | 12.5% | 1.43% | 1.64% | 1.51% | 14.3% |
| Net Interest Margin | 12.5% | 3.68% | 4.23% | 3.58% | 0.0% |
| Efficiency Ratio | 12.5% | 52.5% | 47.5% | 51.00% | 14.4% |
| Non-Performing Assets | 12.5% | <0.50% | <0.10% | 0.09% | 18.7% |
| Loans-to-Deposits | 25.0% | 108% | 102% | 98% | 37.5% |
| Total | 100.0% | — | — | — | 115.4% |
Historical attainment: 100% of targets in both 2023 and 2022 plans .
Long-Term Incentives (Restricted Stock)
- Vesting cadence: performance-based cycles cliff vest after three-year performance periods; time-based awards vest over three years (introduced 35% time-based / 65% performance-based mix in 2025) .
- 2022–2024 performance cycle paid at 150% of target; Mr. Christmas earned 7,275 shares vested on Feb 15, 2025 .
- Upcoming cycles (as-of 12/31/2024): 2023–2025 (vest 2/15/2026) and 2024–2026 (vest 2/15/2027) .
Performance goals and weighting:
- 2025–2027: TSR (33.33%), ROE (33.33%), Diluted EPS Change (33.33%) vs peer index; vest on Feb 15, 2028 .
- 2024–2026 and 2023–2025: ROAA (25%), Diluted EPS Change (50%), ROE (25%) vs budget/peer medians; vest on Feb 15, 2027 and Feb 15, 2026 respectively .
2024 Stock Vested:
- Christmas: 9,183 shares; value realized $357,770 (Feb 15, 2024 vest at $38.96/share) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 119,005 shares |
| Ownership % of Outstanding | <1% (Company-wide denominator 16,231,033 shares) |
| Breakdown | 24,260 joint with spouse ; 14,111 restricted stock ; 48,524 in Bank’s 401(k) ; also spouse’s 2,010 shares in 401(k) and 493 in IRA |
| Unvested Performance-Based Awards (12/31/2024) | 5,536 shares (market value $246,297 @ $44.49) ; 4,641 shares ($206,478) |
| Recently Vested (2/15/2025) | 7,275 shares earned under 2022–2024 cycle |
| Options | None outstanding; company does not currently grant stock options |
| Anti-Hedging/Pledging | Hedging prohibited; pledging requires prior Governance & Nominating Committee approval |
| Ownership Guidelines | CEO: 5x salary; other NEOs: 2x salary; 5-year attainment window from Jan 1, 2025 or date subject to guidelines |
| Compliance Status | Not specifically disclosed for Mr. Christmas |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Period | “Evergreen” extension each Dec 31 to maintain three years remaining (two years for Augustyn); can avoid extension by notice |
| Base Salary (2025) | $444,050 (effective March 1, 2025 as part of new timing) |
| Non-Compete | 18 months; 50-mile radius of any city with a Mercantile/Bank office during the prior 18 months |
| Severance (without Cause / Good Reason) | Amended agreements (effective Jan 1, 2025): 300% of base compensation, paid over 36 months; benefits continued for 36 months (to extent plan terms allow) |
| Disability Benefit | 18 months of base salary paid over 36 months, reduced by LTD insurance payments (amended terms) |
| Death Benefit | 40% of base salary (for officers other than CEO) under amended agreements |
| Change-in-Control (CiC) | Double-trigger: termination without Cause or Good Reason within 24 months after CiC yields lump sum equal to 100% of base salary (150% for CEO), in addition to severance; agreements include excise tax “cutback” to avoid §280G tax (no gross-up) |
| Legacy CiC (as-of 12/31/2024) | Lump-sum amounts under existing CiC agreements: Christmas $350,000; plus accelerated vesting value estimates if awards not assumed/substituted ($776,439) |
| Clawback | Policy to recoup incentive compensation upon accounting restatement; executive officers subject to recovery |
| Deferred Compensation | Nonqualified Deferred Compensation Plan #2 effective Jan 1, 2025; executives may defer up to 80% of base and 100% of performance bonus; distributions on separation/death/disability; CiC is not a distributable event |
Potential payments tables (Company-calculated, assuming specific scenarios as of 12/31/2024):
- During employment period: Termination without Cause/Good Reason: $1,928,505 (includes salary stream, benefits, outplacement, and restricted stock vesting; see footnotes for components) .
- After employment period and before age 65, termination without Cause or base salary reduction: $946,355 .
- Death: $1,876,395 .
- Disability: $2,398,785 .
Compensation Peer Group (Benchmarking)
- 2024/2025 peer group used for reference (median used as a reference point; no fixed percentile target): Byline Bancorp, Community Trust Bancorp, Farmers National Banc, First Financial, First Mid Bancshares, German American Bancorp, Horizon Bancorp, Independent Bank, Lakeland Financial, Midland States Bancorp, Nicolet Bancshares, Old Second Bancorp, Peoples Bancorp, Stock Yards Bancorp, 1st Source .
- Committee engaged AON in 2024 for market analysis; 2025 equity grants include 35% time-based vesting per market practice .
Say-On-Pay & Shareholder Feedback
- 2024 Say-on-Pay: 96.1% approval (9,710,733 votes cast) .
- Committee considered feedback and maintained consistent compensation design .
Company Financial Context (for performance backdrop)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $32,077,000* | $32,143,000* | $40,389,000* |
*Values retrieved from S&P Global.
Investment Implications
- Pay-for-performance alignment: Annual bonus tied to EPS, ROA, efficiency, asset quality, and balance-sheet mix; 2024 payout at 115.4% reflects strong operational delivery including EPS above target, excellent NPAs, and favorable loans-to-deposits positioning, offset by softer NIM — supportive for CFO execution credibility .
- Long-term incentives: Continued emphasis on performance-based restricted stock with multi-year TSR/ROE/EPS change metrics; addition of 35% time-based RSUs in 2025 increases retention value but marginally reduces at-risk mix (watch for rising equity certainty) .
- Retention and severance structure: Amended agreements raise severance to 300% of base compensation over 36 months; double-trigger CiC (100% base salary for officers) plus excise tax cutbacks (no gross-up). Strong retention terms can mitigate turnover risk but increase potential change-in-control cash obligations; double-trigger and cutback are shareholder-friendlier than legacy gross-ups .
- Ownership alignment: Material beneficial ownership, including restricted stock and 401(k) holdings; anti-hedging and pre-approved pledging only; updated ownership guidelines require 2x salary within five years — favorable alignment signals, though compliance status for Mr. Christmas is not specifically disclosed .
- Governance and shareholder support: High Say-on-Pay approval (96.1%) indicates investor support for compensation design; continued monitoring warranted given 2025 introduction of time-based vesting and higher severance multiples .
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