Jeffrey L. Buhr
About Jeffrey L. Buhr
Jeffrey L. Buhr is Executive Vice President and Chief Credit Officer of 1st Source Bank (a subsidiary of SRCE), serving in this role since 2014; he is 65 years old as of the latest proxy filing and beneficially owns 72,820 shares of SRCE common stock (less than 1% of the class) . Company performance metrics relevant to his incentive plans for 2024 include ROA of 1.55%, revenue growth of 7.01%, net charge-offs of 0.08%, and nonperforming assets at 0.46% . For pay-versus-performance, SRCE’s 2024 company TSR equated to a $129 value of an initial $100 investment, with Net Income of $132.6 million and ROA of 1.52% in the PVP disclosure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| 1st Source Bank | Executive Vice President & Chief Credit Officer | Since 2014 | — |
Fixed Compensation
| Year | Salary ($) | All Other Compensation ($) |
|---|---|---|
| 2022 | $357,692 | $43,021 |
| 2023 | $372,115 | $50,280 |
| 2024 | $391,154 | $55,474 |
Additional current term salary: Base salary at January 1, 2025 is $395,000 under his employment agreement .
Performance Compensation
Summary of Variable Pay (SCT)
| Year | Non-Equity Incentive Compensation ($) | Stock Awards ($) |
|---|---|---|
| 2022 | $341,850 | $114,305 |
| 2023 | $219,350 | $301,313 |
| 2024 | $252,100 | $91,490 |
Notes:
- 2024 annual cash award under the Executive Incentive Plan (EIP) approved by the Committee was $103,200 for Mr. Buhr; EIP cash awards are matched with Book Value Stock subject to five-year forfeiture based on EPS ≥3% or ROA ≥1.20% . The “Stock Awards” column generally reflects the aggregate grant-date fair value of equity awards granted in the year (often tied to prior-year performance) and are subject to forfeiture over five years .
- NEOs, including Mr. Buhr, also participated in the Strategic Deployment Incentive Plan (SDIP) for 2024, which pays based on net income percentages tied to strategic goals; awards require the Company to meet minimum net income and are subject to forfeiture/recoupment if financials are overstated .
2024 Incentive Design and Outcomes (EIP)
| Metric | Weighting (Buhr) | Target | Actual | Comments |
|---|---|---|---|---|
| Net Income (000s) | 4.75% | $129,185 | $135,406 | Used for corporate scoring; Committee adjustments applied as disclosed |
| Return on Assets | 9.50% | 1.46% | 1.55% | ROA also drives Company Performance Factor percentile |
| Exceed median ROA (peer $3–$10B) | 9.50% | 54 of 108 | 10 of 110 | 91st percentile used for Company Performance Factor |
| Revenue Growth | 4.75% | 6.33% | 7.01% | Above target |
| Loan Growth | 4.75% | 5.71% | 6.36% | Above target |
| Year-end Nonperforming Assets | 14.25% | 0.75% | 0.46% | Better than target |
| Net Charge-offs (credit loss rate) | 14.25% | 0.12% | 0.08% | Better than target |
| Percent of Diverse Exempt Colleagues | 5.00% | 14.00% | 14.65% | Above target |
| Net New Primary Relationships | 4.75% | Target | 39% of Target | Below target |
Additional design notes:
- Partnership level percentage for 2024: 10% of base salary for Mr. Buhr (starting point for base bonus) .
- Company Performance Factor (CPF) is based on percentile ranking of ROA versus $3–$10B peers; 2024 ROA at the 91st percentile translated to CPF of 125%, with the Committee retaining adjustment rights based on final year-end results .
- Sales/credit/line management personnel (including Mr. Buhr) have target amounts scored at 200% versus 150% for staff management personnel .
Vesting and Realization
| Item | 2024 Value/Count |
|---|---|
| Book Value Shares acquired on vesting | 2,391 shares |
| Market Value Shares acquired on vesting | 1,175 shares |
| Value realized on full vesting (2024) | $161,402 |
| Outstanding unvested Book Value Shares | 7,867 shares; $356,454 |
| Outstanding unvested Market Value Shares | 3,343 shares; $195,164 |
| Vesting date ranges | Book Value: 12/2024–12/2028; Market Value: 12/2024–12/2027 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 72,820 shares; <1% of class (as of Feb 13, 2025) |
| Unvested equity (FY-end 2024) | 7,867 Book Value shares ($356,454) and 3,343 Market Value shares ($195,164) |
| Options | No outstanding stock options at 12/31/2024 |
| Ownership guidelines | NEOs must hold at least 3× base salary; all NEOs are currently in compliance |
| Hedging/pledging policy | Prohibits hedging, short sales, and pledging; excess shares above guideline may be used as collateral only with prior Governance & Nominating Committee approval |
Employment Terms
| Term | Provision |
|---|---|
| Agreement effective date | May 23, 2017 |
| Current base salary | $395,000 at Jan 1, 2025 |
| Agreement expiration/renewal | Expires Dec 31, 2025; extends year-to-year unless notice; term ends Dec 31 of same year if non-renewed |
| Severance (without cause/good reason) | 12 months base salary; first 6 months lump sum; as of Dec 31, 2024, benefit would be $395,000 |
| Change-in-control | Two-trigger; if termination for good reason within one year of CoC, cash severance equals 2.99× “Annualized Includable Compensation for the Base Period”; no tax gross-up |
| Non-compete | 24 months post-termination within regions where 1st Source operates bank services |
| Disability | 12 months base salary (6 months lump sum then monthly installments) |
| Death benefit | 2× current base salary (subject to age reductions to 65%, 45%, 30% at ages 65, 70, 75) capped at $750,000 |
| Clawback policy | Recoup excess incentive compensation after restatements or misstated metrics; full recoupment for those responsible for misstatement or malfeasance |
Investment Implications
- Incentives are explicitly tied to credit-quality and profitability metrics (e.g., ROA, NCOs, NPAs), with 2024 actuals generally above targets for these risk metrics; the ROA percentile produced a 125% Company Performance Factor, boosting EIP awards—supportive of pay-for-performance alignment for a Chief Credit Officer .
- Significant unvested equity (7,867 Book Value and 3,343 Market Value shares) with multi-year vesting through 2027–2028, and 2024 vesting realization of $161,402, indicate ongoing vesting-related flows; there are no stock options outstanding, which reduces option-related selling pressure risk .
- Ownership alignment is reinforced by 72,820 shares held and mandatory 3× salary ownership guidelines, with prohibitions on hedging/pledging (limited collateral exceptions with prior approval), mitigating misalignment and leverage risk from pledging .
- Retention and transition risk are moderated by 12 months base salary severance and a 24-month non-compete; change-of-control protections (two-trigger, 2.99× base-period compensation, no gross-up) represent a notable payout exposure in an M&A scenario but are standard in banking peers .