First Bancorp Inc ME

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compensation analysis is less than $30,000. The peer group utilized by the Company consisted of publicly traded non-metropolitan bank holding companies located in New England, New York and Pennsylvania. The results of this review were

used to guide the Committee’s refinement of the Company’s compensation philosophy and resulting compensation programs for senior executives.

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COMPENSATION BENCHMARKING

Understanding and having a comparative analysis of the compensation of senior banking executives in the banking industry is a key element considered by the Committee in making compensation decisions. Similar to the Company’s past internal practices, Pearl Meyer assisted the Committee with defining a peer group of institutions of similar asset size and regional location. The peer group includes the three comparable banks located in the state of Maine and other banks located in similar non-metropolitan areas in the Northeast. The comparable companies are reviewed annually and may change slightly depending on changes either in the market or in the peer group banks themselves. The peer group targets

approximately 20 institutions ranging from two-thirds to two times the Company’s size in terms of assets. The overall objective is to position the Company at slightly above the median salary levels of the peer group.

Performance factors will also be considered should a company in the peer group have performance that varies greatly from that of the group and/or the Company. We may discount a defined peer bank or drop a company from the group should performance vary widely.

The peer group used for 2023 was as follows:

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In addition to the peer group, the consultant included data from other industry databases and surveys including Pearl Meyer’s own annual survey. Data and competitive perspectives were assessed relative to base salary, total cash compensation, short- and long-term incentives, total direct compensation, benefits

and other compensation and total compensation. The Committee reviewed data individually and in the aggregate. Data from the review was used to develop pay guidelines and as a reference for decisions for both short-term and long-term incentive compensation.

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IV. ELEMENTS OF THE COMPENSATION PROGRAM

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BASE PAY

Base salary is used to recognize the experience, skills, knowledge, and responsibilities required of all our employees, including our executives. Base salaries are reviewed at least annually by the Compensation Committee. When establishing base salaries for 2023, as noted previously, the Compensation Committee engaged the services of Pearl Meyer to conduct a comprehensive compensation analysis. One result of this analysis was the establishment of a peer group, detailed above, and the Committee decided to target base salaries just above the market median (55th to 75th percentile) of that peer group’s base compensation for similarly positioned executives.

As a high-performing Company with consistent results, specifically in the categories of Return on Assets, Return on Equity and Efficiency Ratio, that are typically in the upper third

of our peer group, we believe that the base salaries of our executives should be reflective of our performance within our industry.

In addition to the peer group comparison, a variety of other factors are used to determine base compensation, including the:

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The individual’s responsibility level,

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Success of the individual in meeting their annual goals and,

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Seniority of the individual.

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The annual goals of the NEOs, other than the CEO, are set jointly by the CEO and the officer, and reviewed by the Compensation Committee. These goals are aligned with the Company’s annual goals and individualized for the area of

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