GERMAN AMERICAN BANCORP, INC.

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Our current peer group includes the following 20 financial institutions:

The Company also reviews the compensation policies and performance of entities in the S&P Regional Banks Select Industry Index to help determine executive pay; however, the peer group identified above is used for benchmarking purposes.

Executive Pay Versus Peer Performance Analysis

The Committee engages BCG annually to conduct a detailed pay versus performance analysis in order to measure the Company’s financial performance and evaluate its link to Executive Officer pay compared to that of the peer group executive pay and performance. The analysis conducted by BCG in 2024 was used in the decision-making process for determining executive pay and evaluating the executives’ incentive pay design. The analysis evaluates 1 and 3-year performance, and 1 and 3-year executive compensation as compared to our current peer group executives. For each time period, the analysis reviews alignment of the executive compensation of the Company’s and peer named executive officers (using each peer’s Summary Compensation Table pay) compared to financial performance. The analysis focuses on multiple performance criteria as the Company and its independent consultant feel it is important to review performance from a well-balanced perspective. The analysis evaluates six financial measures: return on average equity (ROAE), core earnings per share (EPS) growth, 1-year total shareholder return (TSR), return on average assets (ROAA), efficiency ratio, and non-performing assets to total assets ratio (NPA ratio).

The 2024 pay-for-performance peer analysis conducted by BCG found that for 2023 year-end (which was the same timeframe as peer executive compensation reported and analyzed in BCG’s 2024 projects), GABC’s overall average of the six financial metrics described previously and the three-year average (2021Y – 2023Y) of the performance metrics versus peer resulted in the Company’s performance at or near the 60 th percentile compared to peer, similar to the prior year’s findings.

Based upon this review, the Committee concluded that the Company’s overall performance was above the peer group median, and the Company used this report to evaluate the pay-for-performance alignment and to consider if changes or modifications were needed to the current compensation package for Executive Officers. The 2024 Executive compensation assessment from BCG found that the 2024 Executive salary levels were within the market competitive range (defined as +/- 15% of market median). Cash compensation and direct compensation were also within the market competitive range. The link between pay and performance was slightly below the preferred positioning; however, this is attributable to the succession planning steps taken within the Executive Officer group, as well as the short-term incentive plan paying below target (between “good” and “very good” performance levels) for 2022 and 2023. Once the current Named Executive Officers become longer tenured and gain additional experience specific to their roles, we believe the alignment between pay and performance results will be stronger. The assessment confirmed that the Company’s award opportunity levels under the short- and long-term incentive plans continue to remain competitive versus the peer group and industry practices.

The Company continues to evaluate the alignment between compensation and performance for the Named Executive Officers. The pay-for-performance analysis as described above evaluates whether the Company has a compensation program design for Executive Officers that is working in accordance