Raymond Reitsma
About Raymond Reitsma
Raymond E. Reitsma, age 62, is President and Chief Executive Officer of Mercantile Bank Corporation and Mercantile Bank, effective June 1, 2024, and has served on the MBWM Board since October 2023; he has more than 20 years with the Bank and previously served as COO (2022–2023), President of the Bank (since January 1, 2017), West Region President (since June 2015), and Vice President of Mercantile (since May 24, 2018) . He holds a B.A. in Business Administration from Calvin College and an MBA in Finance from Michigan State University; the proxy notes he was instrumental in the Firstbank Corporation merger integration . Company performance used to determine his compensation includes 2024 EPS, ROA, efficiency, asset quality, and loans-to-deposits targets (115.4% pool payout) , and three-year goals with maximum vesting achieved for 2022–2024 (ROAA 1.52%, ROAE 16.36%, EPS change 10% → 150% payout; his 9,503 shares vested Feb 15, 2025) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mercantile Bank | Commercial Loan Manager | Began 2003 | Foundation in lending; contributed to growth in commercial portfolio |
| Mercantile Bank | West Region President | Since June 2015 | Regional leadership across lending/operations; helped lead footprint growth |
| Mercantile Bank | President of the Bank | Since Jan 1, 2017 | Oversaw bank operations, credit, retail/branches, risk; led execution |
| Mercantile Bank Corporation | Vice President | Since May 24, 2018 | Corporate leadership and governance responsibilities |
| Mercantile Bank Corporation | Chief Operating Officer | Jan 1, 2022 – Dec 31, 2023 | Enterprise operations and efficiency; risk management oversight |
| MBWM & Mercantile Bank | President & CEO | Effective June 1, 2024 | CEO transition; strategic execution; compensation tied to performance |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kent Community Hospital Finance Authority | Member | Not disclosed | Public finance oversight exposure |
| The Right Place | Finance Committee Member | Not disclosed | Regional economic development insight |
| The Mill Steel Company | Advisory Council Member | Not disclosed | Industrial/commercial advisory perspective |
| Mel Trotter | Capital Campaign Chair | Not disclosed | Community leadership, fundraising experience |
| DA Blodgett/St. John’s Home | Advisory Council Member | Since 2011 | Social services governance and community engagement |
| American Heart Association | Local Board Member, former Treasurer | Not disclosed | Non-profit leadership; stakeholder engagement |
| Pine Rest Foundation | Local Board Member, former Treasurer | Not disclosed | Healthcare foundation governance |
Fixed Compensation
| Metric ($USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | $440,784 | $484,784 | $627,500 |
| Bonus (Cash, if any) | — | — | — |
| Non-Equity Incentive Plan Compensation (Cash Bonus Paid) | $198,353 | $242,392 | $458,850 |
| Stock Awards (Grant-date fair value) | $242,387 | $316,208 | — (no grants in 2024; grants made Feb 2025) |
| All Other Compensation | $80,629 | $92,464 | $95,440 |
| Total Compensation | $962,153 | $1,135,848 | $1,181,790 |
| Base Salary Adjustments | Effective Date | Details |
|---|---|---|
| 2024 increase (promotion/merit) | Jan 1, 2024 | +18.61% based on transition to new role |
| CEO promotion increase | Jun 1, 2024 | Additional +31.34% with CEO appointment; base was $575,000 prior to increase |
| Annualized CEO salary at year-end | Dec 31, 2024 | $665,000 annualized for pay ratio disclosure |
| 2025 adjustment | Mar 2025 | +10.47% based on Board/Comp Committee review; AON consultant input |
Perquisites in All Other Compensation include 401(k) match ($17,250 in 2024), medical/life/disability/long-term care insurance, a local country club membership (noted to be used for business), and cash dividends on restricted stock .
Performance Compensation
| 2024 Executive Officer Bonus Plan Metrics | Weighting | Target | 125% | 150% | Actual | Payout Contribution |
|---|---|---|---|---|---|---|
| Earnings Per Share | 25.0% | $4.86 | $5.35 | $5.59 | $5.29 | 30.5% |
| Return on Assets | 12.5% | 1.43% | 1.57% | 1.64% | 1.51% | 14.3% |
| Net Interest Margin | 12.5% | 3.68% | 4.05% | 4.23% | 3.58% | 0.0% |
| Efficiency Ratio | 12.5% | 52.5% | 50.0% | 47.5% | 51.00% | 14.4% |
| Non-Performing Assets | 12.5% | <0.50% | <0.25% | <0.10% | 0.09% | 18.7% |
| Loans-to-Deposits | 25.0% | 108% | 104% | 102% | 98% | 37.5% |
| Total | 100% | — | — | — | — | 115.4% pool payout |
| 2024 Bonus Actuals | Target % of Salary | Maximum % of Salary | Paid ($) | Paid (% of 2024 Salary) |
|---|---|---|---|---|
| Reitsma | 60.0% | 90.0% | $458,850 | 69.1% |
| Performance-Based Restricted Stock (PSU) – 2022–2024 Cycle | Metric | Weighting | Target | Actual | Weighted Payout |
|---|---|---|---|---|---|
| 3-Year ROAA | 25% | 1.45% | 1.52% | 37.5% | |
| 3-Year ROAE | 25% | 14.25% | 16.36% | 37.5% | |
| 3-Year Diluted EPS Change | 50% | 10.00% | 10.00% | 75.0% | |
| Total Payout | — | — | — | — | 150% (maximum) |
| Shares earned (vested Feb 15, 2025) | — | — | — | — | 9,503 shares (Reitsma) |
Forward PSU design: For 2025–2027, target shares are set at 65% of CEO base salary, with metrics equally weighted for TSR, ROE, and Diluted EPS Change against an index of similarly sized banks; vesting on February 15, 2028 subject to Committee determinations and potential adjustments for extraordinary events .
Equity Ownership & Alignment
| Beneficial Ownership (as of Mar 17, 2025) | Shares | Notes |
|---|---|---|
| Total Beneficially Owned | 79,751 | Less than 1% of class |
| Joint with Spouse | 30,390 | Included in total |
| Restricted Stock | 24,774 | Included in total |
| 401(k) Plan | 22,434 | Included in total |
| IRA | 2,153 | Included in total |
Stock ownership guidelines require the CEO to hold MBWM stock with value equivalent to 5x base salary; executives have five years from the later of Jan 1, 2025 or the date they become subject to the guidelines to attain compliance; unvested restricted shares count toward compliance . Insider Trading Policy prohibits hedging, short sales, option transactions, and holding in margin accounts; pledging is prohibited without prior approval from the Governance & Nominating Committee after review of facts and circumstances .
Change-in-control equity treatment: If awards are not assumed/substituted, restricted shares become 100% vested immediately; if assumed/substituted, 100% vesting occurs upon termination without Cause, death, disability, or Good Reason within one year after change in control; Reitsma would have 24,914 performance-based restricted shares vest at the adjusted target award level (valued at $1,108,423 at $44.49/share as of Dec 31, 2024) .
Employment Terms
| Potential Payments Upon Termination (as of Dec 31, 2024) | Amount ($) | Key Components |
|---|---|---|
| During Employment Period – Termination Without Cause or for Good Reason | 3,001,151 | Base salary through end of 2027 ($2,203,800), insurance premiums for 18 months ($43,969), outplacement ($15,000), restricted shares vest value ($738,382; excluded for Good Reason), plus standard benefits |
| Due to Death | 2,208,423 | Company death benefit $200,000, supplemental life $300,000, group term life $600,000, restricted shares vest value $1,108,423 |
| Due to Disability | 3,395,361 | Salary through end of employment period, disability plan benefits, continued insurance; includes restricted shares value |
| After Employment Period Before Age 65 – Termination Without Cause or Base Salary Reduction | 1,147,351 | Lump-sum equivalent: $350,000, insurance premiums ($43,969), outplacement ($15,000), restricted shares vest value ($738,382; excluded if due to salary reduction) |
| Retirement (assumed at age 65) | 1,108,423 | Restricted shares vest value |
Amended and restated employment agreements effective Jan 1, 2025: severance equals 300% of base compensation paid over 36 months, continued benefits, and disability benefits equal to 18 months of base salary paid over 36 months, reduced by LTD insurance; death benefit for CEO equals 50% of base salary; change-in-control double-trigger lump sum equals 150% of base salary for the CEO (and 100% for other executives) in addition to severance; payments are cut back to avoid 280G excise tax (no gross-up) . Non-compete: for 18 months post-employment, within 50 miles of any MBWM/Bank office, with confidentiality obligations; $15,000 outplacement and term life policy assignment provided .
Board Service & Governance
- Board service: Director since 2023; non-independent director; currently not serving on Board committees .
- Chair/CEO structure: Chairman and CEO roles are separate, with Michael H. Price as Chairman; 90% of directors are independent; Executive Session Facilitator is an independent director (Michael S. Davenport) .
- Director compensation: CEO receives no special compensation for Board service; non-employee directors receive cash and stock retainer, with chair premiums; Q4 cash retainer withheld if attendance <85% . All directors attended at least 78% of meetings in 2024 .
Investment Implications
- Alignment signals: Strong pay-for-performance design—2024 bonus metrics paid 69.1% of salary for the CEO on a 115.4% pool outcome, with transparent GAAP targets; 2022–2024 PSU cycle paid at 150% (maximum), vesting 9,503 shares on Feb 15, 2025, reinforcing performance linkage .
- Insider selling pressure: The February 2025 vest created tradable supply (9,503 shares); anti-hedging, anti-margin, and pledge-preapproval policies mitigate misalignment and forced selling risk; monitor Form 4s around vest dates for execution risk .
- Severance/CIC economics: Post‑2025 agreements increase severance certainty (300% base compensation over 36 months) and add a 150% base salary CIC lump sum (double trigger) without excise tax gross‑ups; adds retention but could elevate downside protection costs in change-of-control scenarios .
- Ownership and guidelines: CEO must attain 5x salary in stock within five years from Jan 1, 2025 (guideline credits unvested RS), supporting long-term alignment; current beneficial ownership is 79,751 shares, less than 1% of shares outstanding .
- Governance quality: Say‑on‑pay approval of ~96.1% (2024) indicates shareholder support for compensation practices; separate Chair/CEO roles and majority independent Board reduce dual-role governance risk for a CEO-director .