Pay Versus Performance
Under the rules of the Securities and Exchange Commission (“SEC”), the following tabular disclosure is required to illustrate the relationship between compensation actually paid to the Company’s principal executive officer (“PEO”) and other named executive officers (“Other NEOs”) and the Company’s performance as measured by total shareholder return and net income.
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Other NEOs(3) | Average Compensation Actually Paid to Other NEOs(4) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(5) | Company Net Income(6) |
|---|
| 2023 | $409,757 | $409,757 | $276,367 | $276,367 | $102.58 | $10,817,000 |
| 2022 | $448,520 | $448,520 | $305,207 | $305,207 | $107.45 | $19,293,000 |
| 2021 | $467,123 | $467,123 | $320,154 | $320,154 | $106.40 | $23,913,000 |
Notes:
| (1) | The figures in this column represent the total compensation paid to John P. Nelson, the PEO, for each year as reported in the Summary Compensation Table. |
| (2) | The figures in this column represent the compensation actually paid to the PEO for each year. Under SEC rules governing the “pay versus performance” disclosure, total compensation for the PEO as reported in the Summary Compensation Table and as actually paid to the PEO is identical, as no adjustment to the figures as reported in the Summary Compensation Table is required to reflect compensation actually paid to the PEO. |
| (3) | The figures in this column for 2023 represent the average of the total compensation paid to Scott T. Bauer and Michael A. Wilson, the other NEOs as reported in the Summary Compensation Table for 2023. The figures in this column for 2022 and 2021 represents the average of the total compensation paid to John L. Pierschbacher and Scott T. Bauer, the other NEOs, as reported in the Summary Compensation Table for 2022 and 2021. |
| (4) | The figures in this column represent the average compensation actually paid to the Other NEOs for each year. Under SEC rules governing the “pay versus performance” disclosure, compensation for the Other NEOs as reported in the Summary Compensation Table and as actually paid to the Other NEOs is also identical, as no adjustment to the figures as reported in the Summary Compensation Table is required to reflect average compensation actually paid to the Other NEOs. |
| (5) | The figures in this column represent the cumulative total shareholder return of the Company’ Common Stock as of the end of each year presented, assuming the investment of $100 in the Common Stock on December 31, 2020. Total shareholder return is calculated based on the change in value for the period designated, assuming the reinvestment of all dividends paid during the period. |
| (6) | The figures in this column represent the net income of the Company as reported in its consolidated financial statements for each year presented. |
As discussed above in the EXECUTIVE COMPENSATION section of this Proxy Statement, the compensation payable to the PEO and Other NEOs consists primarily of base salary and incentive compensation in the form of deferred salary and performance awards as determined under the MIC Plan. As that discussion also explains, the primary factor in determining the amount of incentive compensation payable to the PEO and Other NEOs is the performance of each Bank relative to the “return on assets” target ratio designated for each Bank under the MIC Plan at the outset of each year. Under the MIC Plan, neither total shareholder return nor net income is a direct factor in determining entitlement to either form of incentive compensation. As such, there is no direct relationship between compensation actually paid to the PEO or to average compensation actually paid to the Other NEOs, on the one hand, and total shareholder return or net income, on the other hand. However, as demonstrated by the figures in the table above, there is a general degree of correlation between compensation actually paid and these performance measures during the three-year period, in that:
| ● | As compensation actually paid to the PEO declined from $467,123 in 2021 to $448,520 in 2022, and as average compensation actually paid to the Other NEOs declined from $320,154 in 2021 to $305,207 in 2022, the Company’s net income also experienced a decline, decreasing from $23,913,000 in 2021 to $19,293,000 in 2022. Similarly, as compensation actually paid to the PEO declined from $448,520 in 2022 to $409,757 in 2023, and as average compensation actually paid to the Other NEOs declined from $305,207 in 2022 to $276,367 in 2023, the Company’s net income also experienced a decline, decreasing from $19,293,000 to $10,817,000. As the Company’s net income has declined during the three-year period from 2021 to 2023, actual compensation paid to the PEO and actual average compensation paid to the Other NEOs has also declined due to the lower levels of incentive compensation (consisting of deferred salary and performance awards) paid to such individuals. |
| ● | As compensation actually paid to the PEO declined from $467,123 in 2021 to $448,520 in 2022, and as average compensation actually paid to the Other NEOs declined from $320,154 in 2021 to $305,207 in 2022, total shareholder return increased slightly on a year-over-basis. As compensation actually paid to the PEO declined from $448,520 in 2022 to $409,757 in 2023, and as average compensation actually paid to the Other NEOs declined from $305,207 in 2022 to $276,367 in 2023, total shareholder return also declined from $107.45 in 2022 to $102.58 in 2023. While total shareholder return declined over the three-year-period from 2021 through 2023, actual compensation paid to the PEO and actual average compensation paid to the Other NEOs similarly declined due to the lower levels of incentive compensation paid to such individuals. |
