Eric T. Lemke
About Eric T. Lemke
Eric T. Lemke, age 56, serves as Chief Financial Officer (CFO) of Midland States Bancorp, Inc. and Midland States Bank, promoted to these roles in November 2019 after joining the Company in 2018 as Director of Assurance and Audit; he is a CPA (inactive) with a B.S. in Accounting from Olivet Nazarene University and is a member of the American Institute of Certified Public Accountants . Prior roles include CFO of Metropolitan Capital Bancorp, Inc. and Metropolitan Capital Bank & Trust (2017–2018) and Partner in the Financial Services Practice at RSM US LLP (1993–2017) . Company pay-versus-performance disclosures show Midland’s cumulative TSR based on $100 invested rose to $108.65 by year-end 2024 and Adjusted EPS for 2024 was $1.32, framing the pay-for-performance context during his tenure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Midland States Bancorp, Inc. | Director of Assurance & Audit | 2018–2019 | Finance/audit leadership supporting public company controls |
| Metropolitan Capital Bancorp, Inc. | Chief Financial Officer | 2017–2018 | CFO oversight for bank holding company |
| RSM US LLP | Partner, Financial Services Practice | 1993–2017 | Audit/advisory leadership for financial institutions |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| American Institute of Certified Public Accountants | Member | — | Professional affiliation |
Fixed Compensation
Multi-year compensation for the CFO:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $385,000 | $405,020 | $437,400 |
| Stock Awards ($) | $96,264 | $202,475 | $218,647 |
| Option Awards ($) | $94,250 | — | — |
| Non-Equity Incentive ($) | $183,319 | $119,889 | $46,299 |
| All Other Compensation ($) | $13,582 | $14,815 | $15,795 |
| Total Compensation ($) | $772,415 | $742,199 | $718,141 |
Additional fixed elements (2024):
- Perquisites: $5,295 (club dues)
- Company 401(k) match: $10,500
Base salary progression and bonus target:
| Item | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $405,020 | $437,400 |
| Target Bonus (% of Salary) | 40% | 40% |
Performance Compensation
Annual corporate bonus plan design (Company-wide metrics; CFO bonus derived from these outcomes):
| 2024 Metric | Weight | Threshold | Target | Actual Result | % Attained | Payout % |
|---|---|---|---|---|---|---|
| Adjusted EPS ($) | 35% | 2.84 | 3.15 | (1.05) | 0.0% | 0% |
| Adjusted PTPP Income ($000s) | 35% | 111,761 | 124,179 | 106,306 | 85.61% | 0% |
| Adjusted Revenue ($000s) | 30% | 275,815 | 306,461 | 299,568 | 97.75% | 90% |
| Total Payout | — | — | — | — | — | 27% |
CFO-specific outcome (2024):
- Target bonus: 40% of salary
- Actual bonus: 10.8% of salary; $46,299
Long-term equity incentives (restricted stock, 4-year equal-tranche vesting; acceleration upon involuntary termination in connection with change in control; death/disability):
- 2024 grant: 7,820 shares, grant-date price $27.96, fair value $218,647; vests 25% annually over 4 years
- Company emphasizes restricted stock over options; awards granted in 2020+ under the 2019 LTIP do not have single-trigger vesting on change in control
Vesting and realized values (2024):
- Stock vested: 5,473 shares; value realized $142,816
- Options exercised: none
Equity Ownership & Alignment
Beneficial ownership (as of June 6, 2025):
- Shares beneficially owned: 38,746; includes 9,587 options currently exercisable within 60 days; <1% of class
- Pledging: No pledge disclosed for Mr. Lemke (contrast: pledge disclosed for CEO in footnotes)
- Anti-hedging: Hedging transactions prohibited for executives
Stock ownership guidelines and compliance:
- Guideline: Other Section 16 Officers = 2× base salary
- Compliance: As of Dec 31, 2024, each NEO was in compliance
Outstanding equity awards (as of Dec 31, 2024; market price $24.40):
| Award Type | Grant Date | Exercisable | Unexercisable | Exercise Price | Expiration | Unvested RS Shares | Market Value ($) |
|---|---|---|---|---|---|---|---|
| Options | 10/31/2022 | 9,587 | 9,586 | $28.43 | 10/31/2032 | — | — |
| RS | 11/07/2024 | — | — | — | — | 7,820 | $190,808 |
| RS | 11/06/2023 | — | — | — | — | 6,562 | $160,113 |
| RS | 10/31/2022 | — | — | — | — | 1,693 | $41,309 |
| RS | 11/01/2021 | — | — | — | — | 1,364 | $33,282 |
Notes: As of 12/31/2024, the stock price was below option exercise prices; accelerated option vesting value under termination scenarios was zero .
Employment Terms
Key terms from Mr. Lemke’s amended and restated employment agreement (effective Nov 5, 2020):
- Term and renewal: Initial 2-year term; auto-renews for successive 1-year periods unless nonrenewal notice is given 90 days prior to anniversary
- Target annual bonus: At least 40% of base salary
- Severance (non-CIC): Eligible under Company severance policy; generally 4 weeks per year of service, max 26 weeks, subject to release
- Severance (CIC, double trigger): 200% of salary plus average bonus of prior 3 years; COBRA up to 24 months; pro rata bonus for year of termination
- Restrictive covenants: Non-solicitation and, generally, non-competition for 12 months (non-compete waived if resignation for good reason)
- Equity vesting: Restricted stock vests 25% per year over 4 years; acceleration upon involuntary termination in connection with change in control or death/disability (no single-trigger for awards granted 2020+)
Potential payments for CFO (estimated at 12/31/2024 stock price $24.40):
| Scenario | Cash Severance ($) | COBRA ($) | Accelerated Equity ($) | Total ($) |
|---|---|---|---|---|
| Involuntary Termination (non-CIC) | $168,231 | $23,200 | — | $191,431 |
| Involuntary Termination (CIC) | $1,107,805 | $46,400 | $425,512 | $1,579,717 |
| Death or Disability | — | — | $425,512 | $425,512 |
Clawback and controls:
- Clawback policy adopted Nov 6, 2023 in line with SEC/Nasdaq rules; recovery analysis required due to restated financials covering certain prior periods
- 2024 bonus determinations are subject to Audit Committee recovery analysis given corrected results
Compensation Structure Analysis
- Mix shift: Long-term equity granted as 100% restricted stock; Company does not currently grant new options, reducing executive risk of option underperformance and potential repricing risk (repricing without shareholder approval prohibited) .
- Variable pay sensitivity: 2024 payouts at 27% of target reflect strict performance thresholds and strong linkage to Adjusted EPS/PTPP/Revenue, showing meaningful downside when metrics underperform .
- Governance discipline: Anti-hedging, clawback policy, and ownership guidelines (2× salary for Section 16 officers) support alignment; NEOs compliant as of 2024 year-end .
- Shareholder support: Say-on-pay approval was ~97% at the 2024 annual meeting, indicating investor endorsement of pay program design .
Say-on-Pay, Peer Group, and Shareholder Feedback
- Say-on-Pay: ~97% approval in 2024 .
- Peer Group: Compensation benchmarking referenced to a curated group of regional banks (e.g., First Merchants, QCR Holdings, Lakeland Financial, etc.) retained in 2024 decisions .
- Program refinements: Committee utilizes an independent consultant (Pearl Meyer) for market practices, risk assessment, and equity utilization .
Risk Indicators & Red Flags
- Financial statement restatements impacting 2022–2023 data; CAP/Adjusted EPS disclosures revised accordingly; clawback recovery analysis to be performed (signals enhanced control remediation and potential compensation recovery) .
- Hedging prohibited; no Lemke pledging disclosed; reduces misalignment risk .
Investment Implications
- Alignment: Ownership guidelines, anti-hedging, and clawback policy materially strengthen pay-performance alignment and discourage misaligned risk-taking; NEOs (including CFO) in compliance .
- Retention vs. Overhang: Four-year RSU vesting cadence and double-trigger CIC provisions promote retention while limiting single-trigger windfalls; CFO’s options are out-of-the-money at 12/31/2024, implying limited near-term selling pressure from option exercises .
- Governance watch: The restatement and ensuing clawback review are near-term governance factors to monitor; outcomes may affect realized compensation and signal control robustness under CFO oversight .
- Pay sensitivity: 2024 bonus at 10.8% of salary (vs. 40% target) underscores program rigor; future upside depends on delivering Adjusted EPS/PTPP/Revenue against targets amid credit and restructuring actions highlighted by the Committee .