NICOLET BANKSHARES INC

The Committee constantly assesses the short and long-term incentive programs of the CEO and other named executive officers. Since the Company was founded in 2000, it has utilized a number of compensation tools and programs to incentivize and reward its employees and executives. Each program has closely aligned incentive pay with performance of the Company and the individual in any given year and has tied long-term incentives with long-term shareholder value creation. This core philosophy has been maintained as Nicolet has grown from a private company to what it is today - a high performing, highly valued community bank traded on the New York Stock Exchange. Over the past several years, the Company and Committee have received feedback from shareholders, potential investors, and advisory firms that made recommendations for how our incentive programs should evolve as Nicolet has become a larger company. One area of feedback has been in the methodology used to determine NEO incentive compensation. As noted above, our short-term incentive compensation program is unlike many of our peers in that incentive awards are generally made in cash, and that the Committee uses more discretion in setting those awards. While we have provided additional data and rationale around the Committee’s award process in recent years, we have avoided a pure formulaic approach to setting compensation. The Committee felt the formulaic approach ran contrary to the compensation philosophy of the Company and could lead to management focusing on meeting short-term goals rather than creating longer term shareholder value. After additional feedback from investors, consultation with our compensation consultants, and in-depth internal discussion and analysis, the Compensation Committee has decided to change the incentive award program beginning in 2025 for the CEO role.

The objective of an annual short-term cash incentive is to deliver variable compensation that is tied to the alignment of certain financial results of the Company, as well as individual goals of the executive. After thoughtful consideration by the Committee about which goals and objectives made sense, it was determined that a simpler approach is better, and that the financial performance component should be as straightforward and transparent as possible. As such, 75% of the annual incentive compensation weighting was set using an objective earnings per share (EPS) performance metric. The Committee felt that EPS is the primary driver of long-term shareholder return and represents the culmination of the CEO’s and executive officers’ efforts regarding profitability, revenue growth, expense management, and other elements. EPS is also a fundamental driver of stock price, which is the ultimate determinant of shareholder value. Additionally, the Committee wanted to maintain a discretionary aspect of the program and has therefore determined the remaining 25% of annual incentive compensation will be tied to certain goals of the CEO. Those individual goals are largely tied to growth of the Company (through both organic means and M&A), soundness of the loan portfolio, and profitability of the Company and its various business lines.