Jeffrey G. Ludwig
About Jeffrey G. Ludwig
Jeffrey G. Ludwig, age 54, is President and CEO of Midland States Bancorp, Inc. (since Jan 2019 CEO of Company; CEO of the Bank since Mar 2018) and a director (since 2019). He previously served as EVP (since 2010), CFO (2006–2016; again Oct 2017–Mar 2018), and President of the Bank (Nov 2016–Mar 2018). He holds a B.S. in Accounting from Eastern Illinois University and serves on the Federal Advisory Council of the Federal Reserve Board .
Performance context: 2024 cumulative TSR value (base $100 on 12/31/19) was 108.65 vs peer index 123.79; Adjusted EPS for 2024 in Pay-vs-Performance disclosure was $1.32, with 2024 bonuses initially calculated off pre-restatement metrics and now subject to clawback analysis following a restatement .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Midland States Bancorp/Bank | CEO (Bank), President (Bank), CEO (Company), EVP, CFO | CFO 2006–2016; CFO Oct 2017–Mar 2018; President (Bank) Nov 2016–Mar 2018; CEO (Bank) since Mar 2018; CEO (Company) since Jan 2019; EVP since 2010 | Led bank/holding company through executive transitions; long-tenured finance leadership and executive oversight . |
| Zimmer Holdings (NYSE:ZBH) | Associate Director, Corporate Reporting | 2005–2006 | Corporate reporting at public company; SEC reporting experience . |
| Novellus Systems (Nasdaq) | Director of Corporate Accounting | 2002–2005 | Corporate accounting leadership at public tech company . |
| KPMG LLP | Various roles incl. Senior Manager (Banking/Tech practices) | 1993–2002 | Audit/advisory in financial institutions and technology sectors . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Federal Advisory Council, Federal Reserve Board | Member | Current | Advisory role to Federal Reserve; indicates regulatory engagement . |
Fixed Compensation
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $700,000 | $721,000 | $749,800 |
| CEO Pay Ratio | 27.2x (2023) | — | 22.6x (2024) |
Performance Compensation
Annual Cash Incentive – Plan Design and Outcomes
| Year | Metric | Weight | Threshold | Target | Actual | % Attained | Payout % |
|---|---|---|---|---|---|---|---|
| 2024 | Adjusted EPS | 35% | $2.84 | $3.15 | $(1.05) | 0.0% | 0% |
| 2024 | Adjusted PTPP Income ($000s) | 35% | 111,761 | 124,179 | 106,306 | 85.61% | 0% |
| 2024 | Adjusted Revenue ($000s) | 30% | 275,815 | 306,461 | 299,568 | 97.75% | 90% |
| 2024 | Total Payout vs Target | — | — | — | — | — | 27% |
| 2023 | EPS | 35% | $3.48 | $3.87 | $3.42 | 88.4% | 0% |
| 2023 | PTPP Income ($000s) | 35% | 132,953 | 147,726 | 136,182 | 92.2% | 21% |
| 2023 | Revenue ($000s) | 30% | 289,572 | 321,747 | 310,084 | 96.4% | 24% |
| 2023 | Total Payout vs Target | — | — | — | — | — | 45% |
| Year | Target Bonus (% of Salary) | Actual Bonus (% of Salary) | Actual Bonus ($) |
|---|---|---|---|
| 2024 | 65% | 17.55% | $130,233 |
| 2023 | 65% | 48% | $348,731 |
Notes: 2024 bonuses were determined before error corrections; the Audit Committee will conduct a clawback analysis under the SEC/Nasdaq-compliant Clawback Policy due to restated financials for 2022–2023 and audited 2024 results .
Long-Term Equity Incentives (LTI)
| Grant Year | Instrument | Shares | Grant-Date Price | Grant-Date Fair Value | Vesting |
|---|---|---|---|---|---|
| 2024 | Restricted Stock | 20,110 | $27.96 | $562,276 | 25% per year over 4 years; full vest on CIC termination, death/disability |
| 2023 | Restricted Stock | 23,370 | $23.14 | $540,782 | 25% per year over 4 years; accelerated on qualifying events |
Realization/Overhang Signals
| Year | Options Exercised (Shares) | Value Realized ($) | RS/Stock Vested (Shares) | Value Realized ($) |
|---|---|---|---|---|
| 2024 | 12,753 | $44,870 | 15,049 | $392,216 |
| 2023 | 9,482 | $56,702 | 12,557 | $280,878 |
Equity Ownership & Alignment
| Date | Total Beneficial Ownership (Shares) | % of Common | Options Exercisable (≤60 days) | Unvested RS (Shares) | Unvested RS MV ($) | Shares Pledged |
|---|---|---|---|---|---|---|
| Jun 6, 2025 | 434,322 | 1.98% | 63,118 | 45,875 | $1,119,350 | 111,569 |
| Mar 7, 2024 | 417,295 | 1.9% | 62,799 | 40,814 | $1,124,834 | 100,000 |
- Ownership guidelines: CEO required to hold 3x base salary; all NEOs in compliance as of Dec 31, 2024 .
- Hedging prohibited by policy; directors/officers may not hedge Company securities .
- Pledging: Significant pledged shares (111,569) present an alignment risk/red flag for potential forced sales under adverse conditions .
Employment Terms
| Item | Ludwig Terms |
|---|---|
| Agreement | Amended & Restated Employment Agreement effective Nov 5, 2020; initial 3-year term; auto-renews 1 year annually unless notice 90 days prior; remains in effect 2 years post-CIC . |
| Target Bonus | ≥65% of base salary . |
| Restrictive Covenants | 12-month non-compete and non-solicit post-termination . |
| Severance (No CIC) | Cash = 100% of (salary + average bonus prior 3 years); up to 12 months COBRA at employee rates; pro-rata bonus . |
| Severance (With CIC) | Cash = 300% of (salary + average bonus prior 3 years); up to 36 months COBRA; pro-rata bonus; equity acceleration under plan terms . |
| Illustrative Payments (12/31/2024) | No CIC: $1,088,060 cash + $23,200 COBRA; CIC: $3,264,180 cash + $69,600 COBRA + $1,119,350 equity; Death/Disability: $1,119,350 equity . |
Board Governance and Director Service
| Attribute | Details |
|---|---|
| Board Seat | Director since 2019; Class I; term expires 2026 . |
| Independence | Not independent (executive officer) . |
| Board Leadership | Chair and CEO roles separated; Chair is independent (Jeffrey C. Smith) . |
| Committees | Not listed on Audit/Comp/Nominating; serves on Company Executive Committee . |
| Board Activity | 9 Board meetings in 2024; all directors attended ≥75% of meetings; independent sessions held regularly (9 in 2024) . |
Dual-role implications: Separation of Chair/CEO mitigates concentration of power; Ludwig’s non-independence is standard for a sitting CEO, with independent committee structures and regular executive sessions providing oversight .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval |
|---|---|
| 2024 AGM | ~97% approval |
| 2023 AGM | ~96% approval |
Compensation Peer Group (used for benchmarking)
City Holding; Community Trust Bancorp; Enterprise Financial; FB Financial; First Bancorp; First Busey; First Commonwealth; First Merchants; German American; Horizon Bancorp; Independent Bank (MI); Lakeland Financial; Northwest Bancshares; Origin Bancorp; Park National; Peoples Bancorp; QCR Holdings; S&T Bancorp; Sandy Spring; Tompkins Financial .
Compensation Structure Analysis
- Mix and risk: 2023/2024 LTI delivered 100% in time-vested restricted stock (no performance shares), a lower-risk equity vehicle; options are legacy/limited, and the Company states it does not currently grant options .
- Pay-for-performance: 2024 annual bonus paid at 27% of target vs 45% in 2023, tracking below-target EPS/PTPP outcomes; bonuses are 100% corporate metric-driven (Adjusted EPS, Adjusted PTPP Income, Adjusted Revenue) .
- Clawback and restatement: Company restated 2022–2023 and reported audited 2024; Audit Committee will conduct recovery analysis of incentive-based compensation under the SEC/Nasdaq-compliant Clawback Policy—introducing potential retroactive reductions in pay outcomes for 2024 .
- Ownership alignment: Strong absolute ownership and compliance with 3x salary guideline, but significant pledging of 111,569 shares is a governance red flag that can create adverse selling pressure risk .
Risk Indicators & Red Flags
- Financial restatement and clawback process underway for incentive compensation tied to restated periods (heightens compensation governance scrutiny) .
- Pledging of 111,569 shares by the CEO (potential forced-sale risk) .
- 2024 bonus initially calculated pre-correction; subject to recovery analysis—near-term comp adjustments possible .
- Anti-hedging policy in place (mitigates hedging/shorting misalignment) .
- No related-party transactions >$120k disclosed outside ordinary-course banking; policy for related-party approvals in place .
Equity Detail (Overhang and Vesting)
| As of 12/31/2024 | Options (Exercisable/Unexercisable) | Strike | Expiry | Unvested RS (Shares/$ MV) |
|---|---|---|---|---|
| 2016 Grant | 8,383 / — | $28.59 | 11/16/2026 | — |
| 2015 Grant | 16,800 / — | $23.00 | 11/03/2025 | — |
| 2022 Grant | 26,146 / 26,145 | $28.43 | 10/31/2032 | 4,616 / $112,630 |
| 2021 Grant | — | — | — | 3,622 / $88,377 |
| 2023 RS | — | — | — | 17,527 / $427,659 |
| 2024 RS | — | — | — | 20,110 / $490,684 |
| Totals | 51,329 / 26,145 | — | — | 45,875 / $1,119,350 |
Vesting schedules: RS vests 25% annually over four years; acceleration upon qualifying CIC termination, death, or disability under the 2019 LTIP .
Board Governance (Committees and Policies)
- Independent committees: Audit (Chair: Carlson); Compensation (Chair: Ramos); Nominating & Governance (Chair: McDaniel) .
- Policies: Anti-hedging; Clawback (SEC/Nasdaq-compliant); Stock ownership guidelines; annual risk-based comp assessment .
Director Service and Compensation (as a Director)
- Ludwig serves as a director but, as CEO, does not receive separate director equity grants (director RSUs are for non-employee directors) .
- Independence: not independent (executive officer) .
Performance & Track Record Highlights
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Midland TSR ($100 base 12/31/19) | 65.66 | 95.30 | 106.74 | 116.50 | 108.65 |
| Peer Group TSR | 89.23 | 119.79 | 107.95 | 107.99 | 123.79 |
| Adjusted EPS (Company-selected) | 1.70 | 3.65 | 4.01 | 2.78 | 1.32 |
| Notes: Company disclosed restatement affecting 2022–2023 metrics in the Pay-vs-Performance context . |
Compliance, Policies, and Practices
- No tax gross-ups (except broad-based benefits), no single-trigger cash upon CIC for grants since 2020 under 2019 LTIP; no equity repricing without shareholder approval .
- Executive benefits/perqs modest: club dues and company vehicle allowances; 401(k) match .
Investment Implications
- Alignment: Significant equity stake and ownership guideline compliance support alignment; however, pledged shares (111,569) are a material governance overhang and potential forced-sale risk if markets tighten .
- Pay-for-performance: 2024 cash incentive at 27% of target reflects below-goal profitability metrics, showing some discipline; but impending clawback analysis injects uncertainty into realized compensation and could pressure near-term executive cash flows and sentiment .
- Risk management credibility: Restatement and clawback process elevate governance and internal controls scrutiny; monitor Audit Committee recovery decisions and any compensation program changes in the next proxy cycle .
- Retention/CIC protection: Robust CIC protection (3x cash; 36 months COBRA; equity acceleration) reduces CEO retention risk in strategic/M&A scenarios but increases potential transaction costs for shareholders .
- Performance trajectory: TSR underperformed peer index in 2024; improving Adjusted EPS and credit/risk outcomes will likely be key to restoring higher bonus outcomes and supporting sustained TSR catch-up .
Data sources: 2025 and 2024 DEF 14A proxies, and 8-K filings as cited throughout.