Brett A. Bauer
About Brett A. Bauer
Senior Vice President, Treasurer and Chief Financial Officer of 1st Source Corporation and 1st Source Bank since 2021; previously Vice President and Chief Investment Officer of the Funds Management Division of 1st Source Bank since 2012. Age 53 as of the 2025 proxy; beneficial ownership of 23,735 common shares as of February 13, 2025 (less than 1% of class) and 22,095 shares as of February 16, 2024 (less than 1% of class) . Company performance in 2024 included net income of $132.6 million (+6.2% YoY), EPS of $5.36 (+6.6% YoY), ROA of 1.52%, and top-decile ROA vs $3–$10B peers; the Company also achieved a 25% Company Performance Factor for EIP based on 91st percentile ROA vs peers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| 1st Source Corporation and 1st Source Bank | Senior Vice President, Treasurer & Chief Financial Officer | 2021–present | CFO/Treasurer role overseeing corporate finance per title |
| 1st Source Bank – Funds Management Division | Vice President & Chief Investment Officer | 2012–2021 | Led Funds Management Division per principal occupation disclosure |
External Roles
No public company directorships or external roles disclosed for Bauer in the proxy .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 265,385 | 287,115 | 305,385 |
| EIP Partnership Level (Target Bonus %) | 10% of base salary | 10% of base salary | 10% of base salary |
| EIP Cash Award ($) | 71,600 | 55,500 | 70,550 |
| SDIP Cash Award ($) | — | — | 162,500 |
| All Other Compensation ($) | 38,160 | 43,004 | 44,059 |
Notes:
- 2025 employment agreement base salary set at $310,000 effective January 1, 2025 .
- All Other Compensation components include company retirement contributions and dividends on stock awards (Bauer: $31,129 and $11,549 respectively in 2024) .
Performance Compensation
Executive Incentive Plan (EIP) – Design and Company Factor
- Partnership level: 10% of base salary for Bauer; adjusted by Company Performance Factor tied to ROA percentile vs $3–$10B peer group; 125% factor applied for 2024 (91st percentile) and 125% for 2023 (92nd percentile) .
- Matching book value stock equal to cash award; 5-year forfeiture; hurdles: 3% EPS growth or ≥1.20% ROA (Committee can override if top quartile vs peers) .
Bauer’s 2024 EIP Corporate/Group/Individual Goals
| Metric | Weighting (Bauer) | Minimum | Target | Maximum | Actual |
|---|---|---|---|---|---|
| Net income ($000s) | 9.50% | 126,897 | 129,185 | 135,644 | 135,406 |
| Return on assets | 9.50% | 1.34% | 1.46% | 1.71% | 1.55% |
| Exceed median ROA (peer rank) | 9.50% | 59/108 | 54/108 | 37/108 | 10/110 |
| Return on common equity | 4.75% | 11.12% | 11.33% | 12.24% | 11.71% |
| Expense to revenue ratio | 23.75% | 54.45% | 53.38% | 49.38% | 51.62% |
| Revenue growth | 9.50% | 4.75% | 6.33% | 11.08% | 7.01% |
| Core deposit growth | 9.50% | 1.50% | 3.10% | 4.65% | 1.30% |
| Percent diverse exempt colleagues | 5.00% | 13.22% | 14.00% | 14.78% | 14.65% |
| Net new primary relationships | 9.50% | 90% of Target | Target | 130% of Target | 39% of Target |
| Group performance goals | 9.50% | — | — | — | — |
| Target amount scoring (staff mgmt) | — | — | 150% of weighting | — | — |
Payouts:
- EIP cash award: $70,550 for 2024; matched with book value stock subject to 5-year forfeiture and performance hurdles .
- 2023 EIP cash award: $55,500; 2022: $71,600 .
Strategic Deployment Incentive Plan (SDIP) – 2024
| Participant | Min | Target | Max | Bauer’s 2024 Award ($) |
|---|---|---|---|---|
| Bauer (as % of adjusted net income) | 0% | 0.11% | 0.22% | 162,500 |
- 2024 SDIP used adjusted net income of $135.406 million; Committee assessed goals across deposit initiatives, $10B threshold preparation, digital transformation, diversity, colleague programs, and mastery; awards paid entirely in cash .
Equity Ownership & Alignment
Beneficial Ownership
| As-of Date | Common Shares | % of Class |
|---|---|---|
| Feb 16, 2024 | 22,095 | <1% |
| Feb 13, 2025 | 23,735 | <1% |
Outstanding Equity Awards and Vesting
| Type | Number of Shares Unearned/Unvested | Value | Vesting Schedule |
|---|---|---|---|
| Book value shares (EIP/LTEIP) | 4,333 | $196,328 (book value basis) | Annual tranches 12/2024–12/2028 (released post-audit) |
| Market value shares (EIP/LTEIP) | 2,743 | $160,136 | Annual tranches 12/2024–12/2027 (released post-audit) |
| Options | None outstanding | — | — |
| 2024 vesting realized | 1,176 book value; 1,688 market value; $144,260 total value |
Alignment Policies:
- Stock ownership guidelines require NEOs (including Bauer) to hold Company stock ≥3× current base salary; all NEOs in compliance .
- Hedging/pledging prohibited for required holdings; excess shares may be used as collateral only with prior Governance and Nominating Committee approval .
Employment Terms
| Term | Detail |
|---|---|
| Agreement effective date | August 1, 2021 |
| Base salary (1/1/2025) | $310,000 |
| Agreement expiration | December 31, 2025; auto-renews year-to-year unless non-renewal notice; terminates end of same year upon notice |
| Severance (without cause/good reason) | 12 months of base salary; first six months lump sum; as of 12/31/2024 estimated $310,000 |
| Change-in-control | Double-trigger; 2.99× “Annualized Includable Compensation for the Base Period”; no tax gross-up |
| Non-compete/non-solicit | 24-month non-compete in bank/bank-related services post-termination; confidentiality obligations survive termination |
| Disability | 12 months base salary (6 months lump sum, balance monthly from month 7) in addition to other programs |
| Death benefit | Up to 2× current base salary (tiered reductions at ages 65/70/75) capped at $750,000 via group term life |
| Clawback | Recoupment of incentive comp on restatement/misstatement; full recoupment for responsible parties, fraud, or malfeasance |
Company Performance Context (during Bauer’s CFO tenure)
- 2024 highlights: net income $132.6M, EPS $5.36, ROA 1.52%, 37th consecutive dividend increase; top-decile ROA vs peer groups; multiple external recognitions; strong credit quality and capital .
- Peer benchmarking framework and competitive compensation oversight by independent Committee and consultants (Blanchard; McLagan surveys) .
Revenues and EBITDA (SPGI fundamentals)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 91,262,000* | 90,623,000* | 86,307,000* |
| EBITDA ($) | — | — | — |
Values retrieved from S&P Global.
Disclaimer: EBITDA unavailable from the dataset returned.
Notes: Periods shown for latest three fiscal years using relative periods [GetFinancials]*.
Compensation Peer Group and Say‑on‑Pay
- The Committee uses multiple peer lenses (Midwest peers, National C&I peers, $3–$10B peers) for performance and compensation benchmarking; lists include Byline, First Merchants, Lakeland Financial, UMB Financial, Western Alliance, etc. .
- 2023 say‑on‑pay approval: 89% in favor; frequency: 58% favored triennial; next say‑on‑pay vote in 2026 .
Risk Indicators & Red Flags
- No stock options outstanding and no option exercises by NEOs in 2024 (reduces repricing risk) .
- Robust clawback policy (recoupment on restatements/misstatements/malfeasance) .
- No tax gross‑ups in change‑of‑control provisions (shareholder‑friendly) .
- Hedging/pledging restricted; any pledging of excess shares requires prior board committee approval (mitigates alignment risk) .
- Related‑party transactions disclosed (Aunalytics services; board affiliations), but none attributed to Bauer .
Investment Implications
- Pay‑for‑performance alignment: EIP and SDIP payouts are quantitatively tied to ROA percentile, net income, efficiency, and strategic goals; Bauer’s 2024 EIP cash ($70.6K) and SDIP cash ($162.5K) are consistent with strong Company ROA and profitability .
- Retention risk appears contained: five‑year forfeiture on stock awards, 3× salary ownership guideline compliance, and 12‑month severance (with 2.99× CoC) support retention; absence of options reduces near‑term exit incentives .
- Insider selling pressure: periodic vesting creates supply, but book value shares are largely illiquid (sale-back to Company at book value with long holding expectations), and market value shares vest annually through 2027; hedging/pledging limits further reduce adverse signals .
- Governance quality: independent Compensation Committee oversight, peer benchmarking, and clawback provisions mitigate compensation inflation and earnings manipulation risk; say‑on‑pay support (89%) indicates shareholder acceptance of the program .