James Eccher
About James Eccher
James Eccher is Chairman, President and Chief Executive Officer of Old Second Bancorp, Inc. and Old Second National Bank. He has served as Bank President and CEO since 2003, was appointed Company Chairman in May 2022, and has been a director since 2006; age 59 as disclosed in the 2025 proxy . He chairs the Capital, Executive, and Loan Committees and serves on the Risk and Insurance Committee, reflecting deep operational familiarity and local financial services experience that the board cites as qualifications . 2024 company performance metrics used for pay-for-performance included Adjusted Net Income of $86.4 million (non-GAAP) earning 130% of target and an Adjusted Efficiency Ratio of 53.18% earning 90.68% of target; GAAP Net Income was $85.3 million and GAAP efficiency ratio was 54.36% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Old Second National Bank | Senior Vice President and Branch Director | 1999–2003 | Predecessor operational leadership; board cites his familiarity with operations as key qualification |
| Bank of Sugar Grove | President and Chief Executive Officer | 1996–1999 | Prior CEO experience in local banking, contributing to financial services expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bank of Sugar Grove | President and Chief Executive Officer | 1996–1999 | External CEO role in regional banking; enhances market and credit experience applicable to OSBC |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary Paid ($) | 668,327 | 810,873 | 835,000 |
| Base Salary Rate ($) | — | 835,000 | 860,050 |
| Current Base Salary (at time of 2025 proxy) ($) | — | — | 900,000 (employment agreement) |
| All Other Compensation ($) | 45,620 | 52,909 | 74,101 |
| Perquisites detail (2024) | — | — | Car allowance $10,800; Country/Social club dues $18,261; 401(k) match $13,800; TRSU dividend equivalents $30,452; Life insurance $788 |
Performance Compensation
Annual Incentive Plan – Structure and Results (2024)
| Component | Weight | Target | Actual Outcome | Payout Impact |
|---|---|---|---|---|
| Adjusted Net Income Growth / ROAA vs peers | 50% | Budgeted Net Income; ROAA at/above peer median | Adjusted NI $86.4m; Adjusted ROAA exceeded peer median → 130% of assigned weight | 130% |
| Asset/Credit Quality (NPA ratio; Net Charge-offs vs peers) | 20% | NPA ≤1.80% (100%); Net charge-offs ≤50%–75% peer percentile | NPA 1.30% → 115.71% earned; Net charge-offs 0.36% vs peer median 0.13% → no earnings | Mixed (115.71% / 0%) |
| Adjusted Efficiency Ratio | 5% | ≤52.08% (100%) | 53.18% → 90.68% of assigned weight | 90.68% |
| Personal/Leadership Metrics | 5% | 5% of base salary target | Achieved 5% of base | Met target |
| Target Incentive ($) | — | $688,040 (80% of base salary rate) | — | — |
| Actual Cash Incentive Paid ($) | — | — | $740,546 | 107.6% of target |
Equity Awards Granted (2024)
| Award Type | Grant Date | Units | Grant-date Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|
| TRSUs | 2/20/2024 | 38,544 | 521,886 | 3-year cliff vest on 2/20/2027; accelerated in certain termination/CIC circumstances |
| PRSUs | 2/20/2024 | 38,544 | 521,886 | Performance period 1/1/2024–12/31/2026; metrics: Relative ROATCE, Growth in relative BVPS vs 111-bank peer group; vest based on performance |
Outstanding and Vested Equity
| Metric | As of 12/31/2024 |
|---|---|
| Unvested TRSUs (#) | 80,840 (17,258 vest 2/15/2025; 25,038 vest 2/21/2026; 38,544 vest 2/20/2027) |
| Unvested TRSUs Market Value ($) | 1,437,335 at $17.78 per share |
| Unvested PRSUs (#) | 93,785 (at target) |
| Unvested PRSUs Market Value ($) | 1,667,497 at $17.78 per share |
| Stock Awards Vested (2024) | 51,190 shares; value realized $689,836 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 361,746 shares (brokerage, joint with spouse, 401(k), profit-sharing) |
| Ownership as % of Class | <1% (denoted “*” in table of 45,047,151 shares outstanding) |
| Unvested RSUs excluded from beneficial ownership | 184,318 shares (RSUs) |
| Stock Ownership Guidelines (CEO) | 3x base salary; must hold 50% of net after-tax acquired shares until compliant; CEO currently compliant |
| Hedging/Pledging | Prohibited for directors/officers (no short sales, derivatives, hedging, margin, or pledging) |
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement | Effective 1/1/2015; auto-renews annually; initial base $400k; current base $900k subject to annual review by Compensation Committee |
| Non-compete/Non-solicit | 12-month non-compete post-termination outside 24 months after CIC within 25 miles of any office; non-solicit restrictions on employees and business relationships for 12 months |
| Termination (no CIC) | 24 months base salary continuation for involuntary termination without cause or for good reason |
| Change-in-Control (double trigger) | 3x current base salary plus average bonus (prior 3 years), lump sum; immediate full vesting of outstanding unvested equity; 18 months health insurance continuation; 1 year outplacement |
| Clawback | Incentive Compensation Recovery Policy effective 8/15/2023; recovery for Big R and little r restatements; board discretion broader than required by rule |
Potential Payments (Assuming Termination at 12/31/2024, share price $17.78)
| Scenario | Cash Severance ($) | Insurance ($) | TRSUs Acceleration ($) | PRSUs Acceleration ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|---|
| Involuntary termination (no CIC) | 1,720,100 | — | — | 555,832 (pro rata per agreement) | — | 2,275,932 |
| Involuntary termination following CIC | 3,178,472 | 34,313 | 1,437,335 | 1,667,497 | 20,000 | 6,337,617 |
| Retirement/Death/Disability | — | — | 1,437,335 | 555,832 | — | 1,993,167 |
Board Governance
- Dual-role: Chairman, President & CEO; also Class II director (term expires 2027), director since 2006, age 59 .
- Committee leadership: Chair of Capital, Executive, Loan Committees; member, Risk & Insurance Committee .
- Lead Independent Director: Barry Finn (non-employee); committee roles include chair of Nominating & Corporate Governance, membership on Audit, Compensation, Executive, Capital, IT Steering, Loan Committees .
- Director compensation: “Inside” employee-directors receive no additional pay for board service; non-employee directors receive cash retainers and RSUs with 3-year cliff vesting .
Compensation Structure Analysis
- Mix and trend: Significant equity-based pay with both TRSUs and PRSUs; no stock options or SARs granted in 2024; discount options prohibited; repricing of underwater options prohibited without shareholder approval .
- Pay-for-performance: Annual incentives based on Adjusted Net Income/ROAA, asset quality, efficiency, and personal metrics; caps on annual incentives; risk controls reviewed annually .
- Ownership alignment: CEO 3x salary ownership guideline, compliance confirmed; mandatory holding of 50% of net shares until compliant; hedging/pledging prohibited .
- Say-on-Pay: 88% approval at 2024 annual meeting, indicating broad shareholder support of pay design .
Equity Ownership & Vesting Schedules (Pressure Indicators)
| Upcoming Vesting | Date | Shares |
|---|---|---|
| TRSUs tranche | 2/15/2025 | 17,258 |
| TRSUs tranche | 2/21/2026 | 25,038 |
| TRSUs tranche | 2/20/2027 | 38,544 |
| PRSUs (subject to performance) | 12/31/2026 period end | 2024 grant 38,544 at target; vesting contingent; CIC provisions fix at target if assumed with service requirement |
Implication: Material TRSU cliff vestings in early 2025 and 2026 could create incremental supply; however, insider trading policy requires pre-clearance, prohibits pledging/hedging, and mandates blackout windows, moderating near-term selling pressure .
Employment Contracts, Severance & Change-of-Control Economics
- Double-trigger CIC: 3x salary + 3-year average bonus; immediate vesting of equity; health continuation 18 months; outplacement .
- Non-CIC involuntary: 24 months of base salary continuation .
- Pro-rata PRSU vesting for certain terminations (without cause, good reason, retirement/death/disability) per formula, with continuous service waiver as specified .
- No tax gross-ups: Company policy states no excise tax gross-ups for executives; prior gross-up removed in amended agreement for another executive, consistent with policy .
Performance & Track Record
| Metric (Company) | 2024 Outcome |
|---|---|
| Net Income (GAAP) | $85.3 million |
| Efficiency Ratio (GAAP) | 54.36% |
| Adjusted Net Income (non-GAAP) used for incentives | $86.4 million; 130% of target earned |
| Adjusted Efficiency Ratio (non-GAAP) | 53.18%; 90.68% of target earned |
Compensation Committee Analysis
- Committee composition: Members Hugh McLean (Chair), Dennis Klaeser, Barry Finn, Keith Kotche, John Ladowicz, Jill York; CD&A inclusion recommended by Compensation Committee .
- Independent consultant: Committee engages an independent compensation consultant; peer group benchmarking and market practices considered; risk management reviewed .
Say-on-Pay & Shareholder Feedback
| Year | Approval (%) |
|---|---|
| 2024 say-on-pay | ~88% |
Related Policies and Red Flags
- Clawback: Adopted 8/15/2023; applies to erroneously awarded incentive compensation for both Big R and little r restatements; plan-level clawback provisions reinforce recovery .
- Hedging/Pledging: Prohibited; quarterly blackouts and pre-clearance requirements for directors/executives .
- Equity plan governance: Minimum vesting periods; independent oversight; responsible share recycling; no dividend equivalents on unearned performance awards .
Investment Implications
- Alignment strong: High equity mix with TRSUs and PRSUs tied to ROATCE and BVPS growth versus a 111-bank peer group, CEO ownership guideline compliance, and anti-hedging/pledging policies support long-term alignment with shareholders .
- Retention secure but costly in CIC: Double-trigger CIC with 3x salary + average bonus and full equity acceleration creates robust retention and potential “golden parachute” optics; quantified CIC exposure ~$6.34 million as of 12/31/2024 .
- Near-term selling risk moderate: Cliff vesting TRSUs in Feb 2025/2026 and PRSU potential in 2026 can add supply; insider trading controls and holding requirements mitigate immediate pressure .
- Pay-for-performance credibility: 2024 cash incentive paid at 107.6% of target driven by strong Adjusted Net Income/ROAA relative to peers, with balanced efficiency and asset quality metrics; say-on-pay at ~88% indicates shareholder support .