Donald Pilmer
About Donald Pilmer
Donald Pilmer, age 60, is Executive Vice President (since 2012) and Chief Lending Officer (since 2016) at Old Second Bancorp (OSBC). He joined the Company in 1989 and manages the Commercial Banking unit, with more than 29 years of experience in commercial banking . Company performance context: in 2024 OSBC reported net income of $85.3 million and Adjusted Net Income of $86.4 million; company TSR was 85.86% vs peer KBW Bank Index TSR of 47.85% for 2024 . For 2024, Pilmer’s annual incentive paid at 101.9% of target, reflecting both corporate and departmental performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Old Second Bancorp | Executive Vice President | Since 2012 | Senior leadership of Commercial Banking unit |
| Old Second Bancorp | Chief Lending Officer | Since 2016 | Oversees commercial lending; evaluated on growth in commercial lending, deposits, and fee income |
| Old Second Bancorp | Various roles (joined) | Since 1989 | Long-tenured commercial banking executive |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed in proxy | — | — | No external directorships or roles disclosed in DEF 14A |
Fixed Compensation
Multi-year summary compensation (SCT):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 324,405 | 356,940 | 377,575 |
| Stock Awards (Grant-Date Fair Value) ($) | 120,018 | 181,122 | 217,506 |
| Non-Equity Incentive Compensation ($) | 148,999 | 166,737 | 213,407 |
| All Other Compensation ($) | 35,932 | 41,248 | 45,376 |
| Total ($) | 629,354 | 746,047 | 853,864 |
Base salary rate changes:
| Year | Base Salary Rate ($) |
|---|---|
| 2023 | 362,472 |
| 2024 | 380,595 |
Perquisites detail (2024):
| Perquisite | Amount ($) |
|---|---|
| 401(k) match | 13,800 |
| Life insurance | 705 |
| Car allowance | 9,600 |
| Country club/Social club dues | 14,460 |
| TRSU dividend equivalents | 6,091 |
| Cell phone reimbursement | 720 |
| Total | 45,376 |
Performance Compensation
Annual cash incentive structure (2024):
| Item | Value |
|---|---|
| Target Incentive (% of base salary) | 55% |
| Target Incentive ($) | 209,327 |
| Actual Award ($) | 213,407 |
| Percent of Target Achieved | 101.9% |
Performance objectives and outcomes (2024):
| Metric | Weighting | Target | Actual | Payout | Vesting/Notes |
|---|---|---|---|---|---|
| Adjusted Net Income Growth and/or ROAA vs peers | 25% | 100% of assigned weight at budget net income; ROAA thresholds up to 130% | Adjusted ROAA exceeded peer median; earned 130% of assigned weight | 130% of assigned weight | Cash payout under annual plan |
| Asset/Credit Quality (two metrics) | 20% | Two equally weighted sub-metrics (50%/50%) | Not individually disclosed | Not disclosed | Cash payout under annual plan |
| Department/Personal Performance (Commercial lending, deposits, fee income) | 10% | 10% of base salary | 12.0% of base salary | 12.0% of base vs 10% target | Cash payout under annual plan |
Long-term equity awards (2024 grants):
| Award Type | Grant Date | Units (#) | Grant-Date Fair Value ($) | Performance Metrics | Vesting |
|---|---|---|---|---|---|
| Time-based RSUs (TRSUs) | 2/20/2024 | 8,032 | 108,753 | — | 3-year cliff vest; accelerated in certain circumstances |
| Performance RSUs (PRSUs) | 2/20/2024 | 8,032 | 108,753 (target) | Relative ROATCE; Growth in relative book value per share vs 111-bank peer group | Performance period 1/1/2024–12/31/2026; vest based on metrics and service; CIC treatment detailed below |
Equity Ownership & Alignment
Beneficial ownership (as of March 21, 2025):
| Category | Shares (#) |
|---|---|
| Brokerage account | 57,649 |
| Spouse brokerage | 1,450 |
| 401(k) plan | 3,966 |
| Profit sharing plan | 180 |
| Outright | 5,486 |
| Total beneficially owned | 68,731 (<1% of class) |
| Unvested RSUs excluded from beneficial ownership | 38,718 |
Outstanding unvested equity awards (12/31/2024):
| Award | Units (#) | Market Value ($) | Pricing Basis |
|---|---|---|---|
| TRSUs unvested | 21,548 | 383,123 | $17.78 closing price on 12/31/2024 |
| PRSUs unvested (assumed at target 1.0x) | 13,288 | 236,261 | $17.78 closing price on 12/31/2024 |
Scheduled TRSU vesting (as of 12/31/2024):
| Vest Date | TRSUs (#) |
|---|---|
| 2/15/2025 | 8,260 |
| 2/21/2026 | 5,256 |
| 2/20/2027 | 8,032 |
Ownership policies:
- Insider Trading Policy prohibits hedging and pledging of Company securities; quarterly blackout periods and pre-clearance required for executive transactions, including Rule 10b5-1 plans .
- No pledging by Pilmer is disclosed in the proxy; Section 16(a) compliance noted for 2024 .
Option holdings:
- No stock options reported outstanding for Pilmer in the 2024 year-end outstanding awards table (stock awards only) .
Employment Terms
Compensation and Benefits Assurance Agreement (Pilmer):
- Term: Initial one-year term; auto-renews annually; automatically extends to a two-year “extended period” upon a change in control, then terminates thereafter .
- Double-trigger CIC severance: Lump sum equal to 2× (base salary at termination or pre-CIC, whichever greater) + average cash bonus over prior 3 years; plus immediate 100% vesting of stock options and other awards under incentive plans; 24 months health insurance continuation at same cost; up to $20,000 in outplacement .
- CIC cutback: Payments subject to reduction to avoid excess parachute payments under IRC 280G .
- Definitions of “cause” and “good reason” consistent with agreement; “good reason” includes material diminution of duties, compensation reduction, etc., within extended period .
Estimated post-employment payments (as of 12/31/2024; stock at $17.78):
| Scenario | Cash Severance ($) | Insurance Continuation ($) | TRSU Acceleration ($) | PRSU Acceleration ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|---|
| Involuntary termination (no CIC) | — | — | — | 78,754 | — | 78,754 |
| Involuntary termination following CIC | 937,571 | 45,751 | 619,384 | 236,261 | 20,000 | 1,858,967 |
| Retirement, death or disability | — | — | 619,384 | 78,754 | — | 698,138 |
Equity award treatment on termination/CIC:
- Termination without cause or for good reason: PRSUs with completed performance periods fully vest if metrics achieved; for ongoing performance periods, pro rata vesting based on elapsed months at target (100%) units .
- Change in control: If awards assumed, PRSUs fixed at 100% target on CIC date and deemed earned subject to service; if terminated within 2 years post-CIC for no cause/good reason, service waived and Earned PRSUs vest. If not assumed, target PRSUs convert to cash value at CIC (“Earned Cash PRSU Amount”) subject to service; service waived upon qualifying termination within 2 years .
- TRSUs and options: Vest following CIC if plan/awards not assumed, or if assumed and executive terminated without cause or resigns for good reason .
Investment Implications
- Pay-for-performance alignment: Pilmer’s 2024 incentive design tied 25% weight to Adjusted Net Income/ROAA vs peers, which paid out at 130% of assigned weight due to outperformance; departmental metric exceeded target (12% vs 10% of base), indicating strong commercial banking execution . This structure links a majority of at-risk pay to institutional performance drivers (profitability, credit quality, commercial growth) .
- Upcoming vesting events: TRSU cliffs on 2/15/2025 (8,260 units), 2/21/2026 (5,256), and 2/20/2027 (8,032), potentially increasing sell-to-cover flows around vest dates, moderated by blackout and pre-clearance rules .
- Ownership alignment: Beneficial ownership of 68,731 shares (plus unvested 34,836 units across TRSUs and PRSUs market-valued at ~$619k cumulatively) supports alignment; Company policy prohibits hedging/pledging, reducing misalignment risk; no pledging disclosed .
- Retention and CIC economics: Double-trigger CIC severance equals roughly 2× salary+average bonus plus benefits and equity acceleration, totaling ~$1.86 million under assumed conditions, which may reduce reluctance to pursue value-creating strategic transactions while providing meaningful retention protection .