DEF 14A 1 fmbi-20200520xdef14a.htm DEF 14A DEF14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.    )

 

 

 

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Filed by a Party other than the Registrant 

 

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a‑6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a‑12

 

 

First Midwest Bancorp, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

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Certain Terms

Certain terms that we use in the accompanying Proxy Statement have particular meanings, as set forth below.

 

 

 

Term

 

Meaning

401(k) Plan

 

First Midwest Bancorp, Inc. Savings and Profit Sharing Plan, as amended

2018 Stock and Incentive Plan

 

First Midwest Bancorp, Inc. 2018 Stock and Incentive Plan

Annual Meeting

 

2020 Annual Meeting of Stockholders of First Midwest Bancorp, Inc.

Board of Directors or Board

 

Board of Directors of First Midwest Bancorp, Inc.

By-Laws

 

Amended and Restated By-Laws of First Midwest Bancorp, Inc.

Certificate of Incorporation

 

Restated Certificate of Incorporation of First Midwest Bancorp, Inc., as amended

Common Stock

 

Common Stock, $0.01 par value per share, of First Midwest Bancorp, Inc.

Company, First Midwest, we, us or our

 

First Midwest Bancorp, Inc.

Deferred Compensation Plan

 

First Midwest Bancorp, Inc. Nonqualified Retirement Plan, as amended

Exchange Act

 

Securities Exchange Act of 1934, as amended

FASB ASC 718

 

Financial Accounting Standards Board Accounting Standards Codification Topic 718

First Midwest Bank or Bank

 

First Midwest Bank, which is a wholly-owned subsidiary of First Midwest Bancorp, Inc.

Form 10-K

 

First Midwest Bancorp, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019

Gain Deferral Plan

 

First Midwest Bancorp, Inc. Stock Option Gain Deferral Plan, as amended

Internal Revenue Code

 

Internal Revenue Code of 1986, as amended

^KRX Index

 

KBW Nasdaq Regional Banking Index (First Midwest Bancorp, Inc. is included in this index)

M&A

 

Mergers and acquisitions

Named executive officers or NEOs

 

Executive officers named in the Summary Compensation Table contained in this Proxy Statement

Non-Employee Directors Stock Plan

 

First Midwest Bancorp, Inc. Amended and Restated Non-Employee Directors Stock Plan, as amended

Notice

 

The Notice of Annual Meeting of Stockholders that accompanies this Proxy Statement

Omnibus Stock and Incentive Plan

 

First Midwest Bancorp, Inc. Omnibus Stock and Incentive Plan, as amended

Pension Plan

 

First Midwest Bancorp, Inc. Consolidated Pension Plan, as amended

Proxy Card

 

The form of proxy card or voting instruction form that accompanies this proxy statement

Proxy Statement

 

This proxy statement

RATCE

 

Return on Average Tangible Common Equity

Record Date

 

March 27, 2020

SEC

 

United States Securities and Exchange Commission

TSR

 

Total Stockholder Return

 

 

 

 

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Welcome to the First Midwest Bancorp, Inc.

Annual Meeting of Stockholders

April 17, 2020

Dear Fellow Stockholders:

You are cordially invited to attend the 2020 Annual Meeting of Stockholders of First Midwest Bancorp, Inc., which will be held on Wednesday, May 20, 2020 at 9:00 a.m., Central time, at the Westin O’Hare Hotel, 6100 North River Road, Rosemont, Illinois 60018.

As part of our precautions regarding coronavirus (COVID-19) and in light of the priority we place on the health, safety and well-being of our stockholders and colleagues, we are planning for the possibility that the Annual Meeting may be held solely by means of remote communication. If we take this step, we will announce the decision to do so in advance and details on how to participate will be publicly announced in a press release, available on our website at www.firstmidwest.com/pressreleases, and filed with the Securities and Exchange Commission as proxy material.  If we hold a virtual meeting, you will need the control number included on your Proxy Card in order to participate. 

The matters to be acted on at the Annual Meeting are described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.  Also enclosed is a copy of our 2019 Annual Report.  Please review these materials carefully before voting.

We are pleased to offer multiple options for voting your shares.  As detailed in the Proxy Summary section of the attached Proxy Statement, you may vote your shares via the Internet, by telephone or by mail.  Voting in any of these ways will not prevent you from attending the Annual Meeting.  You also may vote in person at the Annual Meeting.

Your vote is very important to us.  Whether or not you plan to attend the meeting in person, your shares should be represented and voted.

On behalf of our Board of Directors, I would like to express our appreciation for your continued interest in First Midwest.  I hope you will be able to attend the Annual Meeting.

 

 

 

Sincerely,

 

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Michael L. Scudder

 

Chairman and Chief Executive Officer

 

 

 

 

 

First Midwest Bancorp, Inc.

 

Notice of Annual Meeting of Stockholders

 

 

 

 

 

Wednesday, May 20, 2020
9:00 a.m., Central time

First Midwest Bancorp, Inc.

8750 West Bryn Mawr Avenue

Suite 1300

Chicago, Illinois 60631

 

 

 

Place:  Westin O’Hare Hotel, 6100 North River Road, Rosemont, Illinois 60018

 

As part of our precautions regarding coronavirus (COVID-19) and in light of the priority we place on the health, safety and well-being of our stockholders and colleagues, we are planning for the possibility that the Annual Meeting may be held solely by means of remote communication.  If we take this step, we will announce the decision to do so in advance and details on how to participate will be publicly announced in a press release, available on our website at www.firstmidwest.com/pressreleases,  and filed with the Securities and Exchange Commission as proxy material.  If we hold a virtual meeting, you will need the control number included on your Proxy Card in order to participate.

 

Items of Business:

 

   To elect as directors the twelve nominees identified in the attached Proxy Statement, each to serve for a one-year term.

   To approve an advisory (non-binding) resolution regarding the compensation paid in 2019 to the Company’s named executive officers.

   To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020.

   To transact such other business as may properly come before the Annual Meeting.

 

Record Date:  March 27, 2020

 

You are entitled to vote at the Annual Meeting only if you owned shares of First Midwest Bancorp, Inc. common stock at the close of business on the record date for the Annual Meeting.

 

Proxy Voting:

 

It is important that your shares be represented and voted at the Annual Meeting.  You can vote your shares via the Internet, by telephone or by mail.  Voting in any of these ways will not prevent you from attending and voting your shares in person at the Annual Meeting.  Instructions on how to vote your shares can be found below and in the Proxy Summary section of the attached Proxy Statement.

 

 

 

 

 

 

 

 

Internet

    

Telephone

    

Mail

    

In Person

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Visit the website noted on your Proxy Card to vote online.

 

Use the toll-free telephone number noted on your Proxy Card to vote by telephone.

 

Sign, date and return your Proxy Card in the postage pre-paid envelope provided to vote by mail.

 

Cast your vote in person at the Annual Meeting.

 

 

By Order of the Board of Directors,

 

 

 

Nicholas J. Chulos

 

Executive Vice President, General Counsel

April 17, 2020

and Corporate Secretary

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

PROXY SUMMARY 

1

 

 

ABOUT FIRST MIDWEST 

4

 

 

CORPORATE SOCIAL RESPONSIBILITY – OUR COMMITMENT 

7

 

 

ITEM 

1   ELECTION OF DIRECTORS

10

 

 

 

ITEM 

2   APPROVAL OF AN ADVISORY (NON-BINDING) RESOLUTION REGARDING THE COMPENSATION PAID IN 2019 TO THE COMPANY’S NAMED EXECUTIVE OFFICERS

22

 

 

ITEM 

3   RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

23

 

 

CORPORATE GOVERNANCE AT FIRST MIDWEST 

25

Corporate Governance Guidelines and Committee Charters 

25

Code of Ethics and Standards of Conduct 

25

Director Independence 

25

Board Leadership and Structure 

26

Lead Independent Director 

26

Risk Oversight 

27

Cybersecurity Risk Oversight 

28

Meetings 

28

Board Committees 

29

Board and Committee Self-Evaluations 

32

Director Education 

32

Related Person Transactions 

32

Compensation Committee Interlocks and Insider Participation 

33

Stockholder Engagement 

33

Stockholder Communication with Directors 

33

Whistleblower Policy 

33

 

 

INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS AND MANAGEMENT 

34

 

 

DIRECTOR COMPENSATION 

36

 

 

 

 

TABLE OF CONTENTS, CONT.

 

 

COMPENSATION DISCUSSION AND ANALYSIS 

39

Executive Summary 

40

 

Pay-for-Performance

40

 

Compensation Program Performance Metrics

42

 

2019 CEO Pay Decisions

43

 

2020 Compensation Program Updates

43

 

Stockholder Say-on-Pay Vote in 2019 

44

Our Executive Compensation Philosophy 

44

 

Compensation Best Practices

46

 

Compensation Procedures

47

 

2019 Peer Group

48

 

2020 Peer Group

48

Performance 

50

 

How We Measure Company Performance

50

 

How We Measure Individual Performance

50

 

Internal Pay Considerations

51

2019 Compensation Program 

52

 

Components of Our Executive Compensation Program

52

 

Base Salary

53

 

Annual Cash Incentive Compensation

53

 

Long-Term At-Risk Equity Compensation (Performance Shares and Restricted Stock)

58

 

Retirement and Other Welfare Benefits

61

 

Perquisites

62

Policies, Guidelines and Other Practices 

63

 

Stock Ownership Guidelines

63

 

Clawback, Anti-Pledging, Anti-Hedging and Other Policies

63

 

Risk Assessment of Executive Compensation Program

63

 

Tax Considerations

64

 

Employment and Restrictive Covenant Agreements with Our Executive Officers

64

 

 

COMPENSATION COMMITTEE REPORT 

65

 

 

EXECUTIVE COMPENSATION TABLES 

66

2019 Summary Compensation Table 

66

2019 Grants of Plan-Based Awards Table 

68

2019 Outstanding Equity Awards at Fiscal Year-End Table 

69

2019 Option Exercises and Stock Vested Table 

71

Pension Benefits 

71

2019 Pension Benefits Table 

72

Non-Qualified Deferred Compensation 

72

2019 Non-Qualified Deferred Compensation Table 

73

Potential Payments Upon Termination or Change-in-Control 

74

CEO Pay Ratio Disclosure 

79

 

 

AUDIT COMMITTEE REPORT 

80

 

 

OTHER MATTERS 

81

 

 

 

 

 

PROXY STATEMENT

PROXY SUMMARY

We are furnishing this Proxy Statement in connection with a solicitation of proxies by the Board of Directors of First Midwest Bancorp, Inc., a Delaware corporation, for use at our 2020 Annual Meeting of Stockholders.  The approximate date on which this Proxy Statement, the accompanying Proxy Card and our 2019 Annual Report are first being sent or otherwise made available to stockholders is April 17, 2020.  The following is a summary of items to be voted upon at the Annual Meeting.

Date, Time and Place of the Annual Meeting

 

 

 

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Date and Time
May 20, 2020
9:00 a.m., Central time

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Place*
Westin O’Hare Hotel
6100 North River Road
Rosemont, Illinois 60018

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Record Date
March 27, 2020

*As part of our precautions regarding coronavirus (COVID-19) and in light of the priority we place on the health, safety and well-being of our stockholders and colleagues, we are planning for the possibility that the Annual Meeting may be held solely by means of remote communication.  If we take this step, we will announce the decision to do so in advance and details on how to participate will be publicly announced in a press release, available on our website at www.firstmidwest.com/pressreleases, and filed with the SEC as proxy material.  If we hold a virtual meeting, you will need the control number included on your Proxy Card in order to participate.

Matters to be Considered at the Annual Meeting

 

 

 

Items of Business

  

Voting
Recommendation
of Our Board of
Directors

 

 

 

Election of Directors

 

FOR

 

 

 

Approval of an Advisory (Non-Binding) Resolution Regarding the Compensation Paid in 2019 to the Company’s Named Executive Officers

 

FOR

 

 

 

Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm

 

FOR

 

 

 

 

2020 Proxy Statement

1

 

Table of Contents

Proxy Summary

Election of Directors

The first item of business at the Annual Meeting will be the election of twelve directors of the Company.  The nominees are set forth in the table below.  Each nominee is currently a director of the Company.  Our Board recommends that you vote FOR the election of each of the nominees belowSee Item 1  Election of Directors.

 

 

 

 

 

 

 

2020 Director Nominees for Election

 

 

 

 

 

 

 

Barbara A. Boigegrain

 

Kathryn J. Hayley

 

Ellen A. Rudnick

 

Michael J. Small

CEO and General Secretary of Wespath Benefits and Investments

 

CEO of Rosewood Advisory Services, LLC

Former Executive Vice President of UnitedHealthcare

 

Senior Advisor and Adjunct Professor of Entrepreneurship at University of Chicago Booth School of Business

 

Founder and CEO of K4 Mobility LLC

Former President and CEO of Gogo, Inc. 

 

 

 

 

 

 

 

Thomas L. Brown

 

Peter J. Henseler

 

Mark G. Sander

 

Stephen C. Van Arsdell

Former Senior Vice President and CFO of RLI Corp

 

President of TOMY International

 

President and COO of the Company

 

Former Senior Partner, Chairman and CEO of Deloitte & Touche LLP

 

 

 

 

 

 

 

Phupinder S. Gill

 

Frank B. Modruson

 

Michael L. Scudder

 

J. Stephen Vanderwoude

Former CEO of CME Group, Inc.

 

President of Modruson & Associates, LLC

Former Partner and CIO of Accenture plc

 

Chairman and CEO of the Company

 

Lead Independent Director of the Company

Former Chairman and CEO of Madison River Communications Corp.

Advisory Vote on Executive Compensation

We are asking our stockholders to approve, on an advisory (non-binding) basis, a resolution regarding the compensation paid in 2019 to our named executive officers as disclosed in this Proxy Statement.  See Item 2  Approval of an Advisory (Non-Binding) Resolution Regarding the Compensation Paid in 2019 to the Company’s Named Executive Officers.

Ratification of Independent Registered Public Accounting Firm

We are asking our stockholders to ratify, on an advisory (non-binding) basis, the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2020.  See Item 3  Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm.

 

 

 

2

First Midwest Bancorp, Inc.

 

Table of Contents

Proxy Summary

How to Vote

Even if you plan to attend our Annual Meeting in person, please cast your vote as soon as possible.

 

 

 

 

 

Internet

    

Telephone

    

Mail

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The web address for Internet voting can be found on your Proxy Card.  Internet voting is available 24 hours a day.  To be valid, your vote by Internet must be received by the deadline specified on the Proxy Card.

 

The number for telephone voting can be found on your Proxy Card.  Telephone voting is available 24 hours a day.  To be valid, your vote by telephone must be received by the deadline specified on the Proxy Card.

 

Request a paper copy of the Proxy Card if you have not received one, and mark your Proxy Card, sign and date it, and return it in the postage pre-paid envelope provided.  To be valid, your vote by mail must be received by the deadline specified on the Proxy Card.

If you choose not to vote early, you can vote your shares in person at the Annual Meeting.  You must present an acceptable form of identification (such as a valid driver’s license) to enter the Annual Meeting and vote in person.

If you hold your shares in street name, you may vote by following your broker’s instructions or, in order to vote in person at the Annual Meeting, you must obtain from the broker through which you hold your shares, both an account statement showing that you owned shares of Common Stock as of the Record Date and a “legal proxy” form, and bring them to the meeting.

If you attend the Annual Meeting as a representative of a stockholder that is an entity, then you must bring proof of your authorization to attend and act on behalf of that entity.

Important Notice Regarding the Availability of Proxy Materials

A copy of our Annual Report for the year ended December 31, 2019 accompanies this Proxy Statement.  The Notice, this Proxy Statement and our Annual Report are available at www.firstmidwest.com/investorrelations.  If you would like to receive, without charge, an additional paper copy of our Annual Report, please contact our Corporate Secretary at First Midwest Bancorp, Inc., 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631.

Certain Financial Information Presented on an Adjusted Basis

This Proxy Statement contains references to certain financial information on an adjusted basis.  This information, as adjusted, excludes certain items, such as acquisition and integration related expenses.  We believe that presenting certain financial information in this manner assists stockholders in understanding our core financial performance and in assessing the Company’s underlying operational performance since these items do not pertain to our core business operations.  Exclusion of these items facilitates better comparability between periods and enhances comparability for peer comparison purposes.  For a reconciliation of the GAAP and non-GAAP financial measures discussed in this Proxy Statement, which include net income, earnings, earnings per share, return on assets and return on average tangible common equity, in each case as adjusted to exclude certain items, see our Form 10‑K filed with the SEC on February 28, 2020. 

 

 

 

 

 

2020 Proxy Statement

3

 

ABOUT FIRST MIDWEST

First Midwest Today

First Midwest Bancorp, Inc. is a relationship-focused financial institution and one of the largest independent publicly traded bank holding companies based on assets headquartered in Chicago and the Midwest, with approximately $19 billion of assets (including our acquisition of Park Bank in Milwaukee that we completed on March 9, 2020) and an additional $12 billion of assets under management.  The Company’s principal subsidiary, First Midwest Bank, and other affiliates provide a full range of commercial, treasury management, equipment leasing, consumer, wealth management, trust and private banking products and services.  The primary footprint for our branch network and other locations is in metropolitan Chicago, southeast Wisconsin, northwest Indiana, central and western Illinois, and eastern Iowa.

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Growth in 2019

Building on our momentum, 2019 was an exceptionally strong and productive year for our Company during which we continued to execute on our strategic priorities of building and maintaining the highest quality and engaged team, growing and diversifying our revenues through organic growth and disciplined acquisitions, and managing business risk.  This strategy resulted in added scale and talent to provide us with the resources and strategic flexibility to continue to grow profitably.

In 2019, we generated total revenues of $862 million and net income, adjusted, of $217 million, both of which were at record levels for our Company.  We finished 2019 with assets of approximately $18 billion.  Underlying these strong financial results, in addition to growth, were controlled expenses.  Our acquisition activity also contributed to our strong 2019 performance.  During the first quarter of 2019, we completed our acquisition of Northern Oak Wealth Management, adding over $800 million of assets under management.  In the second quarter of 2019, we completed our acquisition and integration of Bridgeview Bank, which contributed an additional $1.2 billion of assets, $1.0 billion of deposits and $711 million of loans.  We also announced our acquisition of Park Bank in 2019 and completed this transaction in early March 2020.  Park Bank adds an additional $1.1 billion of assets, $1.0 billion of deposits and $720 million of loans.

 

 

 

4

First Midwest Bancorp, Inc.

 

Table of Contents

About First Midwest

Performance Highlights of 2019

Organizationally, we achieved a number of successes in 2019, which are summarized below.  As noted above under Proxy Summary—Certain Financial Information Presented on an Adjusted Basis,  we discuss our performance in this proxy statement both on a reported GAAP basis and on an adjusted basis.  The adjusted information primarily excludes acquisition and integration expenses, which allows us to properly assess our performance on a core basis and relative to peers.

 

 

 

 

 

 

 

Record Earnings

 

 

Net Interest Income

 

 

Efficiency

 

 

 

 

 

 

 

20%

 

 

14%

 

 

55%

 

 

 

 

 

 

 

Generated reported earnings per share of $1.82, an increase of 20% from 2018 and 90% from 2017.  Earnings per share, adjusted, were $1.98,  up from $1.67 for 2018.

 

 

Increased net interest income to $588 million, up 14% from 2018.

 

 

Improved our efficiency ratio by nearly 300 bps to 55% from 58% for 2018. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

 

Average Deposits

 

 

Loans

 

 

 

 

 

 

 

$18 billion

 

 

13%

 

 

12%

 

 

 

 

 

 

 

Increased total assets to $18 billion at December 31, 2019, up 15% from the end of 2018 and 27% from 2017.  Following the completion of our acquisition of Park Bank in the first quarter of 2020, our total assets are now approximately $19 billion.

 

 

Grew average total deposits to $13 billion for the year ended December 31, 2019, an increase of 13% from 2018.  Average core deposits continued to be strong at 77% for the year ended December 31, 2019.    We now hold a top 10 deposit share in the Chicago MSA.

 

 

Grew total loans to nearly $13 billion at December 31, 2019, an increase of 12% from December 31, 2018.  Maintained solid credit quality with net charge-offs to total loans of 31 bps, compared to 38 bps in 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Assets

 

 

Capital

 

 

Dividends

 

 

 

 

 

 

 

1.28%

 

 

10.5%

 

 

148th

 

 

 

 

 

 

 

Achieved a return on average assets, adjusted, of 1.28%, up 9.5% and 31% from 2018 and 2017, respectively.

 

 

Maintained strong regulatory capital ratios.  Common equity tier 1 capital to risk-weighted assets grew to 10.5% at December 31, 2019, an increase of over 30 bps from the end of 2018.  Total capital to risk-weighted assets grew to 13.0% at December 31, 2019 from 12.6% in 2018.

 

 

Paid our 148th consecutive quarterly cash dividend in 2019.  With continued confidence in our Company and business strategy and our desire to return value to our stockholders, our Board increased cash dividends to $0.54 per share in 2019, a 20% increase from 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Board
Diversity

 

 

Corporate Social Responsibility

 

 

Industry Leadership and Recognition

 

 

 

 

 

 

 

One-third of our directors are diverse on the basis of gender or race.  We were recognized by 2020 Women on Boards for having at least 20% gender diversity on our Board of Directors.  Three of our directors also were named to WomenInc.’s 2019 most influential female directors list.

 

 

As we continued to grow in 2019, we did so with respect for our environmental impact and an emphasis on social responsibility, strong corporate governance and uncompromised integrity.  We enhanced our CSR resources in 2019 by creating the new position of Head of Corporate Social Responsibility and Diversity & Inclusion.

 

 

Our CEO was elected to the board of directors of the American Bankers Association and currently serves as chair of the ABA’s CEO council.  In addition, several of our senior officers received various industry and community recognitions.

 

 

 

2020 Proxy Statement

5

 

Table of Contents

About First Midwest

Our Vision, Mission and Values

 

 

 

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VISION

MISSION

VALUES

To be the partner of choice for financial services in the markets we serve, and one of the nation’s top performing financial institutions.

To help our clients achieve financial success.

To serve our clients with integrity, excellence, responsibility and passion.

During 2019, we remained focused on our vision, mission and values, which drive our culture that is centered on client needs, rooted in service excellence, dedicated to bettering our communities, focused on attracting top industry talent and influenced by technological change.  These factors provide significant momentum for future earnings growth and enhance our position as a premier Midwest-based commercial bank committed to helping our clients achieve financial success.  This commitment is at the core of all that we do.

Strategic Priorities

In building our platform for continued profitable growth, we focus on the following priorities in order to position the Company for future success.

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6

First Midwest Bancorp, Inc.

 

CORPORATE SOCIAL RESPONSIBILITY – OUR COMMITMENT

Our commitment to corporate social responsibility has been part of our corporate fabric since the founding of our Company.  When forming First Midwest Bank shortly after the Great Depression, our founders established a commitment to treat all of our clients, regardless of stature or wealth, with respect and a focus on their financial needs.  Since then, our colleagues have maintained that commitment.

Anchored in our vision, mission and values, we drive business performance and accelerate economic and social momentum by investing in our colleagues, clients and the communities we serve.  With best in class corporate citizenship and an integration of diversity and inclusion into the foundation of our culture, we are better equipped to meet the evolving needs of our clients, communities, stockholders and other stakeholders.

We are proud of our commitment to corporate social responsibility.  In 2019, we deepened our investment in sustainability by creating the new position of Head of Corporate Social Responsibility and Diversity & Inclusion.  The purpose of this position is to enhance and execute an integrated corporate social responsibility strategy that is aligned with our growth agenda as well as our ability to create long-term stockholder value.  Our framework for this strategy is outlined below.

 

 

 

 

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Building Diversity
in Our Organization

We seek to attract top talent to serve our clients and to build high-performing teams through the power of diversity.  We continue to seek out opportunities to increase and encourage diversity throughout all levels of the Company.

   We were recently recognized by 2020 Women on Boards for achieving at least 20% gender diversity on our Board of Directors.

   Three of our directors were named to WomenInc.’s 2019 most influential female directors list.

   Our current colleague base is comprised of 70% women and 34% racial minorities.   In 2019, 47% of our hires into senior roles were women and 24% were racial minorities.

   We attract top talent through our rotational development program for recent college graduates interested in careers in commercial banking and wealth management.  In 2019, 50% of participants were diverse on the basis of gender or race.

 

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Driving an Inclusive Workplace

We are committed to fostering a diverse and inclusive environment where colleagues and clients are valued and respected.  Our robust development and training programs are central to strengthening our inclusive culture.

   In 2019, we launched unconscious bias training sessions throughout the Company to provide our colleagues with the tools necessary to sharpen their inclusive leadership and cultural competency skills.

   We redesigned our learning curriculum geared towards new and aspiring leaders to emphasize the power of inclusive leadership as a means of inspiring high-performing teams and employees.

 

 

 

 

2020 Proxy Statement

7

 

Table of Contents

Corporate Social Responsibility

 

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Commitment to Community Development

Through proactive engagement with community leaders, we gain a deeper understanding of the needs of our local communities, and we plan our contributions and initiatives based on their needs.  Our culture of philanthropy, community investment and service enables us to provide financial education and support to previously unbanked or underbanked customers in our local communities.

   For more than two decades, the Company has been rated Outstanding by the Federal Reserve under the Community Reinvestment Act.

   We maintain branch locations that we believe are conducive and responsive to the needs of the communities we serve, including low- and moderate-income areas in our geographic footprint.

   In 2019, we extended approximately $186 million of community development loans. 

   In 2019, we donated over $1.5 million to nonprofit organizations in our local communities that supported causes such as health and wellness, poverty eradication and violence prevention. 

   In furtherance of our commitment to small businesses, we provided a $1 million capital investment to the Entrepreneurs of Color Fund, an initiative that provides capital to minority-owned businesses in economically depressed neighborhoods in Chicago. 

   In 2019, we reached over 8,000 participants through educational workshops that focus on saving, budgeting, homeownership and other topics that enhance the financial literacy of community members.  We offer flexible banking products designed to build financial capabilities, including credit-building consumer products, down payment and closing cost assistance programs, and affordable check cashing services.

   We have a lending portfolio that supports our non-profit clients in their mission-driven work to meet community needs.

 

Picture 49

Deepening Colleague Engagement

Our colleagues are our most valuable asset.  We recognize that a highly engaged and empowered workforce is key to driving success for our clients,  our business, our communities and our stockholders.  In addition to offering a range of competitive, high-quality benefits, we strive to encourage a culture of service.  This creates an environment where employees are motivated to provide the best service to our clients and the communities we serve.

   We  were recognized as one of the 2019 Chicago Tribune Top Places to Work and as one of Forbes’ Best-in-State Banks.

   Our colleagues dedicate their time,  talent and resources to advance causes important to both them and our Company.

   For many years, we have partnered with United Way in order to maximize our social impact.  United Way has anchored our annual employee giving campaign for many years.

   Civic leadership and skills-based volunteering through board service is highly encouraged and modeled at the top levels of the Company.  Our CEO, members of our executive leadership team and many of our colleagues are active on civic and non-profit boards.

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Corporate Social Responsibility

 

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Sustainable Business Operations

We recognize the opportunity to advance economic and social impact through sustainable business operations.  As we continue to build on our strong foundation to ensure that we operate our business responsibly and efficiently, we do so with a strong focus on long-term sustainability. 

   When building or remodeling offices, we do so in an environmentally responsible manner and with an effort to use energy efficiently.

   We have initiated sustainability programs that impact our natural resource preservation, energy conservation and responsible waste management.  Recently, we implemented an enhanced shredding and recycling program at most of our locations.

   In 2019, through our partners, we recycled approximately 413 tons of material, translating to over 7,000 saved trees, 24,000 pounds of pollutants kept from the atmosphere and 1.6 million kilowatts of energy saved.

   We have increased hoteling stations throughout various  Company locations to accommodate colleagues with flexible work schedules, resulting in fewer vehicles on the roads and contributing to the reduction of carbon emissions from our operations.

 

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Strong Corporate Governance

Our commitment to strong, transparent corporate governance and ethical business practices starts with our Board of Directors and the executive leadership team and is evident throughout our Company.  We view strong corporate governance as an essential component of protecting our clients, colleagues, business reputation and stockholders.

   We adhere to a comprehensive Code of Ethics and Standards of Conduct that all colleagues are required to certify that they have reviewed each year.

   Our Board of Directors is comprised of independent directors (other than our Chief Executive Officer and our President), and our independent directors meet regularly throughout the year.

   Stewardship of the Company’s corporate social responsibility resides with the Nominating and Corporate Governance Committee of our Board of Directors.  The Committee receives regular updates on strategy, target metrics and results.

   We maintain strong enterprise-risk management processes.

   We maintain an active stockholder engagement program.

   We provide information about our corporate social responsibility initiatives consistent with industry standards.

For a fulsome discussion of our corporate governance practices, see Corporate Governance at First Midwest

Actions in Response to the COVID-19 Pandemic

As we navigate the COVID-19 pandemic, our top priority has been the health, safety and well-being of our colleagues, clients and the communities we serve.  We are undertaking significant efforts to support our colleagues, clients and communities and are committed to regular and open communications.  As an organization, we have implemented remote working arrangements where possible while remaining mindful that the banking industry is considered an essential business supporting our nation’s financial system.

We have implemented a number of initiatives for the benefit of our colleagues to help them through this unprecedented and challenging time.  We also have announced several programs and services designed to alleviate some of the financial stress and burden that our clients may be facing due to the COVID-19 pandemic, and we are participating as a lender to small businesses under the Paycheck Protection Program passed as part of the CARES Act.  In addition, we announced a $2.5 million philanthropic commitment through the First Midwest Charitable Foundation to aid in the support of our community and nonprofit partners as we all collectively work to help those impacted by the pandemic.

 

 

 

 

 

 

2020 Proxy Statement

9

 

ITEM 1  ELECTION OF DIRECTORS

Nominees for Election

Our Board of Directors currently consists of twelve directors.  Each director is elected for a one-year term.  Upon the recommendation of our Nominating and Corporate Governance Committee, our Board of Directors unanimously nominated each of our current directors to stand for election at this year’s Annual Meeting.  These twelve directors are Barbara A. Boigegrain, Thomas L. Brown, Phupinder S. Gill, Kathryn J. Hayley, Peter J. Henseler, Frank B. Modruson, Ellen A. Rudnick, Mark G. Sander, Michael L. Scudder, Michael J. Small, Stephen C. Van Arsdell and J. Stephen Vanderwoude.

Each of the nominees, other than Mr. Scudder, our Chairman and Chief Executive Officer, and Mr. Sander, our President and Chief Operating Officer, meets the standards of independence under our Corporate Governance Guidelines and the rules of the NASDAQ Stock Market.

Directors of the Company are elected by a majority of the votes cast at the Annual Meeting.  If a continuing director fails to receive the required majority vote for election, the director is required to tender his or her resignation in accordance with our By-Laws and Corporate Governance Guidelines, and the Board of Directors, upon the recommendation of the Nominating and Corporate Governance Committee, will determine whether it is in the best interests of the Company to accept or reject any tendered resignation, or whether other action should be taken.  The Board of Directors will publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of election results.

Each nominee has informed us that he or she is willing to serve as a director if elected.  Should any nominee become unable or refuse to serve as a director upon election, it is intended that the persons named as proxies on the Proxy Card will vote for the election of such other person as the Board of Directors may recommend.

Board Composition and Experience

Our twelve continuing directors have significant and varied operational, financial, risk, technology, corporate governance, leadership and other experience, and possess diversity of thought, gender and race.  Over the past several years, we have enhanced the industry and Company-specific knowledge of our Board of Directors with fresh perspectives brought by our new directors.  We believe that our directors are active and engaged and have the skills necessary to guide the Company as it grows, as our business strategy and the banking industry around us continue to evolve and as the financial services sector becomes ever more competitive.

 

 

 

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Item 1  Election of Directors

Below are certain demographic and operational highlights of our Board of Directors, including the varying tenure, diversity, qualifications and experience of our continuing directors.

 

 

 

 

 

 

 

9 years

 

 

33%

 

 

63 years

 

 

 

 

 

 

 

Average Independent Director Tenure

 

 

Racial and Gender Diversity

 

 

Average Age

 

 

 

 

 

 

 

 

 

 

 

 

 

 

83%

 

 

Annual Elections

 

 

100%

 

 

 

 

 

 

 

Independent

 

 

Directors elected annually for one-year terms

 

 

Satisfy Stock Ownership Guidelines (6x annual cash retainer)*


*  All of our directors have satisfied our director stock ownership guidelines with the exception of one of our newer directors who is still accumulating stock within the timeframe allowed under the guidelines.

Each of our twelve continuing directors has extensive professional experience that contributes to a diversity of skills, perspectives and leadership qualities on our Board of Directors, as summarized below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Leadership

 

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Technology

 

 

 

12 out of 12

 

 

 

 

 

 

3 out of 12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Picture 88

 

Risk Management

 

Picture 87

 

Finance

 

 

 

8 out of 12

 

 

 

 

 

 

6 out of 12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Picture 86

 

Business Operations

 

Picture 78

 

Governance and Compliance

 

 

 

12 out of 12

 

 

 

 

 

 

7 out of 12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Picture 77

 

Compensation and Benefits

 

Picture 61

 

Public Company Experience

 

 

 

4 out of 12

 

 

 

 

 

 

11 out of 12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Picture 34

 

Mergers and Acquisitions

 

Picture 11

 

Regulatory

 

 

 

10 out of 12

 

 

 

 

 

 

8 out of 12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020 Proxy Statement

11

 

Table of Contents

Item 1  Election of Directors

Nomination Process

In identifying, evaluating and recommending nominees for the Board of Directors, our Nominating and Corporate Governance Committee places primary emphasis on the criteria set forth in our Corporate Governance Guidelines.

Picture 93

We do not set specific minimum qualifications that nominees must meet in order to be recommended to the Board of Directors.  Each nominee is evaluated based on his or her individual merits, taking into account the needs of the Company and the composition of our Board.  The Nominating and Corporate Governance Committee discusses and evaluates possible candidates in detail, and outside consultants are sometimes engaged to help identify potential candidates.

When making recommendations for nominees to the Board, the Nominating and Corporate Governance Committee attempts to include directors who, when taken together with the other nominees and continuing directors, will create a group that offers a range of professional experience, background, age, gender or minority status, perspectives and skills.  The Nominating and Corporate Governance Committee will consider and evaluate director candidates recommended by stockholders in the same manner as other candidates identified by the Committee.  A stockholder who desires to formally nominate a candidate must do so by following the procedures described in the Company’s Certificate of Incorporation and By-Laws.

 

 

 

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Table of Contents

Item 1  Election of Directors

Set forth below is the name of each director nominee, along with his or her principal occupation for at least the previous five years and other professional experience.

Nominees Standing for Election at the Annual Meeting

 

 

 

Picture 19

   

Barbara A. Boigegrain

 

Current Position: Chief Executive Officer and General Secretary, Wespath Benefits and Investments
Committee(s): Compensation Committee (Chair), Nominating and Corporate Governance Committee, Advisory Committee
Independent Director

 

EXPERIENCE AND QUALIFICATIONS

 

Ms. Boigegrain has served as the Chief Executive Officer and General Secretary of Wespath Benefits and Investments (formerly the General Board of Pension and Health Benefits of The United Methodist Church) since 1994.  Wespath is a pension, health and welfare benefit trustee and administrator and an institutional investment manager that is one of the largest faith-based pension funds in the United States, with $25 billion of assets under management.  Wespath is a global leader in environmental, social and governance (ESG) investing.

Prior to 1994, Ms. Boigegrain spent eleven years as a consultant with Towers Perrin and four years with KPMG LLP and Dart Industries as a manager and analyst.

Ms. Boigegrain is a member of the board of directors of Church Benefits Association and the Church Alliance, and a former member of the board of trustees of Emory & Henry College.

As the CEO and General Secretary of Wespath, Ms. Boigegrain has overseen its restructuring, significantly improved its performance and services and increased its assets under management.  In her experience as a benefits consultant, she established the San Diego office of Towers Perrin.

Age: 62
Director Since: 2008

 

 

 

 

 

 

 

 

 

 

 

Ms. Boigegrain earned a Bachelor of Arts degree in Biology and Psychology from Trinity University in 1979.

Through her extensive employee benefits, compensation, executive and corporate governance experience, Ms. Boigegrain brings significant leadership, business development, operations and management skills to our Board of Directors.  She also provides valuable knowledge of compensation, financial markets, strategic growth, and ESG and sustainability investing.

 

 

 

2020 Proxy Statement

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Table of Contents

Item 1  Election of Directors

 

 

 

 

Picture 3

   

Thomas L. Brown

 

Current Position: Former Senior Vice President and Chief Financial Officer, RLI Corp. (NASDAQ)
Committee(s):  Audit Committee, Enterprise Risk Committee
Independent Director

 

EXPERIENCE AND QUALIFICATIONS

 

Mr. Brown served as the Senior Vice President and Chief Financial Officer of RLI Corp., a specialty insurer serving diverse niche property, casualty and surety markets from 2017 until his retirement on December 31, 2019.  From 2011 to 2017, he served as RLI Corp.’s Vice President and Chief Financial Officer. 

Previously, Mr. Brown was a partner of PricewaterhouseCoopers LLP, where he served for ten years as its Midwest Regional Financial Services Director and led teams responsible for the banking, insurance, capital markets and investment management business sectors.

Mr. Brown currently serves on the board of directors of the Chicago Shakespeare Theater.  From 2004 through 2017, Mr. Brown served on the board of trustees of Illinois Wesleyan University.  He also served on the board of directors of Easter Seals Central Illinois.

Age: 63
Director Since: 2017

 

 

 

 

 

 

 

Mr. Brown earned a Bachelor of Science degree in Accounting from Illinois Wesleyan University in 1979.  He is a certified public accountant.

With his extensive finance, accounting, risk management and financial services background, combined with the insights of the executive management team of a public company, Mr. Brown brings valuable finance, accounting, strategic planning, risk and senior management skills and experience to our Board of Directors.

 

 

 

Picture 25

   

Phupinder S. Gill

 

Current Position: Former Chief Executive Officer, CME Group, Inc. (NYSE)
Committee(s):  Audit Committee, Enterprise Risk Committee
Independent Director 

 

EXPERIENCE AND QUALIFICATIONS

 

Mr. Gill served as the Chief Executive Officer of CME Group Inc., a global derivatives marketplace and exchange, from 2012 until his retirement on December 31, 2016.  Prior thereto, he served as President from 2007 until 2012, and he previously served as President and Chief Operating Officer of CME Holdings and of CME from 2004 until 2007.  From 2000 to 2003, he served as Managing Director and President of CME Clearing.  Mr. Gill was also the President of GFX Corp., a wholly-owned subsidiary of CME Group that provides liquidity in foreign exchange futures, from 1998 until 2012.

Mr. Gill currently serves on the board of directors of The Alexander Maxwell Grant Foundation.  From 2012 until his retirement on December 31, 2016, he served on the boards of CME Group and the World Federation of Exchanges.  He also previously served on the boards of CME Clearing Europe (CME Group’s UK Clearing House), Bursa Malaysia Derivatives Berhad, Bolsa Mexicana de Valores, S.A.B. de C.V., CME Group Foundation and CME Group Community Foundation.  Mr. Gill is a past member of CME Group’s Competitive Markets Advisory Council.

Age: 59
Director Since: 2010

 

 

 

 

 

 

 

Mr. Gill earned a Bachelor of Science degree in Finance in 1985 and a Master of Business Administration with a concentration in Finance in 1987 from Washington State University.

Through his board and executive management experience, Mr. Gill brings important public company, technology, risk management, operating and executive experience to our Board of Directors, as well as experience with M&A and global affairs.  He also provides the perspective of a former chief executive officer of a public company.

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Item 1  Election of Directors

 

 

 

 

Picture 58

   

Kathryn J. Hayley

 

Current Position: Chief Executive Officer, Rosewood Advisory Services, LLC
Committee(s):  Audit Committee, Compensation Committee
Independent Director

 

EXPERIENCE AND QUALIFICATIONS

 

Ms. Hayley has served as the Chief Executive Officer of Rosewood Advisory Services, LLC, a business advisory services firm, since 2015.

Previously, Ms. Hayley served as an Executive Vice President of UnitedHealthcare (a subsidiary of UnitedHealth Group, Inc. (NYSE)), a position in which she served from 2012 to 2015, overseeing a number of strategic initiatives at this global healthcare company.  From 2006 to 2012, she served as an executive of Aon plc (NYSE), including as Chief Executive Officer of Aon Consulting Worldwide and Aon Hewitt Consulting Americas. Prior to her service at Aon, Ms. Hayley was an information technology partner at Deloitte Consulting LLP and led the U.S. financial services practice.  She also served on the board of directors of Deloitte & Touche LLP U.S.

Ms. Hayley currently serves on the board of Alight Solutions, LLC (since 2018) and the advisory board of E.A. Renfroe & Company, Inc. (since 2016).  She previously served on the board of directors of Tribridge Holdings, LLC (2015 to 2017).  She also serves on the board of the Chicago Shakespeare Theater.

Age: 61
Director Since: 2016

 

 

 

 

 

 

 

Ms. Hayley earned a Bachelor of Science degree in Applied Computer Science from Illinois State University in 1979 and a Master of Business Administration, with concentrations in Marketing and Finance, from the Kellogg School of Management at Northwestern University in 1984.

Through her extensive information technology and financial services background and her broad executive management experience, as well as her employee benefits and talent management experience, Ms. Hayley provides our Board with valuable strategic planning, leadership and human resources and benefits experience, as well as the insights of a former senior executive of several public companies.

 

 

 

Picture 62

   

Peter J. Henseler

 

Current Position: President, TOMY International
Committee(s):    Compensation Committee, Nominating and Corporate Governance Committee
Independent Director

 

EXPERIENCE AND QUALIFICATIONS

 

Mr. Henseler is the President and a director of TOMY International, a wholly-owned subsidiary of TOMY Company, Ltd., a global designer and marketer of toys and infant products.  He rejoined TOMY International in 2017 after serving as Vice Chairman until his retirement in 2012.  Mr. Henseler previously held the position of President of TOMY International from 2011 until 2012.  He was President of RC2 Corporation (NASDAQ) from 2002 to 2011, at which time TOMY Company acquired RC2.  He served as RC2’s Executive Vice President of Sales and Marketing from 1999 to 2002.  Mr. Henseler also previously served as a director of RC2.

Prior to joining RC2, Mr. Henseler held marketing positions at McDonald’s Corporation and Hasbro, Inc.  In February 2018, he completed his tenure as Chairman of the Toy Industry Foundation and now serves as an executive advisor to the board.  He also previously served on the board of directors of the American Toy Industry Association.

Age: 61
Director Since: 2011

 

 

 

 

 

Mr. Henseler earned a Bachelor of Science degree in Marketing from Xavier University in 1980.

Mr. Henseler brings important executive management, operating and leadership skills and insights to our Board of Directors through his experience as a president of a global public company, as well as his substantial operational, brand management and marketing experience.

 

 

 

2020 Proxy Statement

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Table of Contents

Item 1  Election of Directors

Picture 30

   

Frank B. Modruson

 

Current Position: President, Modruson & Associates, LLC
Committee(s):  Audit Committee, Enterprise Risk Committee
Independent Director 

 

EXPERIENCE AND QUALIFICATIONS

 

Mr. Modruson has served as President of Modruson & Associates, LLC, a management consulting firm, since 2015.

Previously, Mr. Modruson spent the majority of his career at Accenture plc, a global professional services company, where he served as a client partner and as Chief Information Officer.

He currently serves on the board of directors of Zebra Technologies Corporation (since 2014; NASDAQ). Previously, Mr. Modruson served on the boards of directors of Landauer Corporation (2017; NYSE) and Forsythe Technology, Inc. (2014 to 2017), both of which were acquired in 2017.  He also serves on the boards of the Lyric Opera of Chicago and the Glen Ellyn Volunteer Fire Company.

Age: 60
Director Since: 2016

 

 

 

 

 

Mr. Modruson earned a Bachelor of Science degree in Computer Science from Dickinson College in 1984 and a Master of Science degree in Computer Science from Pennsylvania State University in 1987.

With his significant technology, strategy and consulting background, as well as experience on other public company boards, Mr. Modruson brings important strategic and business insights, as well as technology, risk management and operational experience to our Board of Directors.

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Item 1  Election of Directors

 

Picture 12

   

Ellen A. Rudnick

 

Current Position: Senior Advisor and Adjunct Professor of Entrepreneurship, University of Chicago Booth School of Business
Committee(s): Nominating and Corporate Governance Committee (Chair), Compensation Committee, Advisory Committee
Independent Director

 

EXPERIENCE AND QUALIFICATIONS

 

Ms. Rudnick has served at the University of Chicago Booth School of Business since 1999.  She is currently a Senior Advisor and Adjunct Professor of Entrepreneurship, and previously served as the Executive Director of the Polsky Center for Entrepreneurship and Innovation at the University of Chicago.

Prior to joining the University of Chicago, Ms. Rudnick served as President and Chief Executive Officer of Healthcare Knowledge Resources, President of HCIA, Chairman of Pacific Biometrics and Corporate Vice President of Baxter Healthcare Corporation.

Ms. Rudnick currently serves on the boards of directors of HMS Holdings, Corp. (since 1997; NASDAQ), Liberty Mutual Insurance Company (since 2001) and Patterson Companies (since 2003; NASDAQ).

She has spent over thirty years in executive management and entrepreneurial activities, primarily in the health care and information services industries.  She serves in various leadership positions with several civic and nonprofit organizations in the Chicago metropolitan area, including having served on the board of the Northshore University Health System for over 20 years and on the board of Hyde Park Angels, and currently is on the boards of directors of the Chicagoland Entrepreneurship Center (1871) and Matter.  She is the recipient of several honors, including the Today’s Chicago Woman 20th Anniversary Hall of Fame Award, the YWCA Leadership Award, the Illinois Venture Capital Industry Richard J. Daley Award and the 1871 Entrepreneurial Champion Award.

Age: 69
Director Since: 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

Ms. Rudnick earned a Bachelor of Arts degree in Italian (with a minor in Economics) from Vassar College in 1972 and a Master of Business Administration with a concentration in Finance from the University of Chicago in 1973.

With her extensive business background and her public company board experience, Ms. Rudnick brings important leadership, corporate governance, business and entrepreneurial experience to our Board of Directors.

 

 

 

2020 Proxy Statement

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Table of Contents

Item 1  Election of Directors

Picture 64

   

Mark G. Sander

 

Current Position: President and Chief Operating Officer of the Company
Inside Director

 

EXPERIENCE AND QUALIFICATIONS

 

Mr. Sander is the President and Chief Operating Officer of the Company and of First Midwest Bank.  Mr. Sander also serves as Vice Chairman of the Board of First Midwest Bank.  He served as the Senior Executive Vice President and Chief Operating Officer of the Company from 2011 until his promotion in January 2019.

Prior to joining the Company in 2011, Mr. Sander served as Executive Vice President, Director of Commercial Banking at Associated Banc-Corp (NYSE), where he oversaw Associated’s commercial banking, treasury management, insurance brokerage and capital markets businesses.  He also served as a member of Associated’s Executive and ALCO Committees.  Previously, he served as a commercial banking executive at Bank of America and in numerous leadership positions in commercial banking at LaSalle Bank.  Mr. Sander has more than thirty-five years of experience in the financial services industry.

Mr. Sander currently serves on the boards of directors of the Chicago Zoological Society (since 2006) and the Mercy Home for Boys & Girls (since 2019).

Age:  61
Director Since: 2014

 

 

 

 

 

Mr. Sander earned a Bachelor of Science degree in Finance from the University of Illinois in 1980 and a Master of Business Administration with a concentration in Finance and International Economics from the University of Chicago in 1983.

Mr. Sander brings significant banking and executive experience to our Board of Directors.  His important leadership position with the Company and First Midwest Bank and his involvement with the operations, vision and strategy of the Company and the Bank provide the Board with an understanding of the Company’s day-to-day operations and strategic goals.

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Item 1  Election of Directors

 

Picture 66

   

Michael L. Scudder

 

Current Position: Chairman and Chief Executive Officer of the Company
Committee(s):  Advisory Committee (Chair)
Inside Director

 

EXPERIENCE AND QUALIFICATIONS

 

Mr. Scudder is the Chairman of the Board (since 2017) and Chief Executive Officer (since 2008) of the Company.  He also serves as Chairman and Chief Executive Officer of First Midwest Bank.  Mr. Scudder served as the Company’s President from 2007 to January 2019, as its Chief Operating Officer from 2007 to 2008 and as its Chief Financial Officer from 2002 to 2007.  He previously served as the Group Executive Vice President and Chief Financial Officer of First Midwest Bank from 1995 to 2001.  He also has served in various other management capacities in his over thirty years of service to the Company.

Mr. Scudder began his professional career at KPMG LLP, an international public accounting firm.

Mr. Scudder is a member of the board of directors of the American Bankers Association and the chair of ABA’s CEO Council.  He is also an active member of the Mid-Size Bank Coalition of America.  Mr. Scudder serves on the board of directors of Silver Cross Hospital, the board of trustees of DePaul University, the executive committee of DePaul University’s Center for Financial Services and the Chicago Metropolitan Planning Council’s Executive Advisory Board.  Additionally, he is a member of the Economic Club of Chicago, the Commercial Club of Chicago and the Bankers Club of Chicago.  He previously served as an inaugural member of the Federal Reserve Bank of Chicago’s Community Depository Institution Advisory Council.

Age: 59
Director Since: 2008

 

 

 

 

 

 

 

 

 

 

 

Mr. Scudder earned a Bachelor of Science degree in Accounting from Illinois Wesleyan University in 1982, and a Master of Business Administration with a concentration in Finance from DePaul University in 1993.

Mr. Scudder brings extensive executive management, financial and banking experience to our Board of Directors and has important institutional knowledge of the Company and its business and clients.  His day-to-day management of the Company provides the Board with Company-specific and industry experience and expertise, as well as a complete understanding of the Company’s vision, strategy and operations.

 

 

 

2020 Proxy Statement

19

 

Table of Contents

Item 1  Election of Directors

 

 

Picture 68

   

Michael J. Small

 

Current Position: Chief Executive Officer, K4 Mobility LLC
Committee(s):  Audit Committee, Enterprise Risk Committee
Independent Director

 

EXPERIENCE AND QUALIFICATIONS

 

Mr. Small is a founder and the Chief Executive Officer of K4 Mobility LLC, a technology developer and provider of satellite communications services, since August 2018.

Previously, Mr. Small served as the President and Chief Executive Officer and a director of Gogo, Inc. (NASDAQ), an airborne communications service provider, from 2010 until March 2018.  Prior to joining Gogo, Mr. Small served as the Chief Executive Officer and a director of Centennial Communications Corp. (NASDAQ) from 1999 to 2009.  From 1995 to 1998, Mr. Small was the Executive Vice President and Chief Financial Officer of 360 Degrees Communications Company.  Prior to 1995, he held the position of President of Lynch Corporation (NYSEMKT), a diversified acquisition-oriented company with operations in telecommunications, manufacturing and transportation services.

Mr. Small is an active board member of Leadership Greater Chicago and the Gun Violence Prevention PAC. Mr. Small also serves on the Advisory Council for the Polsky Center for Entrepreneurship and Innovation at the University of Chicago.

Age: 62
Director Since: 2010

 

 

 

 

 

 

 

Mr. Small earned a Bachelor of Arts degree in History from Colgate University in 1979 and a Master of Business Administration with a concentration in Finance from the University of Chicago in 1981.

Through his board, executive and financial experience, Mr. Small brings extensive public company, operating and executive experience to our Board of Directors, as well as strategic, financial, technology and M&A experience.  He also provides the perspective of a former chief executive officer of a public company.

Picture 71

   

Stephen C. Van Arsdell

 

Current Position: Former Senior Partner, Chairman and Chief Executive Officer, Deloitte & Touche LLP
Committee(s):  Audit Committee (Chair), Nominating and Corporate Governance Committee, Advisory Committee
Independent Director

 

EXPERIENCE AND QUALIFICATIONS

 

Mr. Van Arsdell is a former senior partner of Deloitte & Touche LLP, where he served as Chairman and Chief Executive Officer from 2010 to 2012, and as Deputy Chief Executive Officer from 2009 to 2010.  Previously, he served as Deloitte’s partner-in-charge of its financial services practice in the Midwest, and was a member of Deloitte’s board from 2003 through 2009.

Mr. Van Arsdell is a member of the Audit Committee of Brown Brothers Harriman & Co. (since 2015).  He also is a member of the board of directors and a member of the Audit Committee of Mueller Water Products, Inc. (since 2019; NYSE).  He is a member of the Dean’s advisory council for the Geis College of Business at the University of Illinois and Immediate Past Chair of the board of directors of the University of Illinois Alumni Association.  Mr. Van Arsdell currently serves as a member of and chairs the Finance Committee of the board of trustees of the Morton Arboretum and previously chaired the board of trustees of the Conservation Foundation.

Age: 69
Director Since: 2017

 

 

 

 

 

 

 

 

 

Mr. Van Arsdell earned a Bachelor of Science degree in Accounting and a Master of Accounting Science degree from the University of Illinois in 1972 and 1973, respectively.  He is a certified public accountant.

Mr. Van Arsdell brings to our Board extensive finance, accounting, and risk management experience, together with strategic and leadership skills developed through executive leadership positions with a global accounting and advisory services organization.

 

 

 

20

First Midwest Bancorp, Inc.

 

Table of Contents

Item 1  Election of Directors

Picture 2

   

J. Stephen Vanderwoude

 

Current Position: Lead Independent Director of the Company; Private Investor
Committee(s):  Enterprise Risk Committee (Chair), Nominating and Corporate Governance Committee, Advisory Committee
Independent Director

 

EXPERIENCE AND QUALIFICATIONS

 

Mr. Vanderwoude has served as the Company’s Lead Independent Director since 2017.  He is currently a private investor.

From 1996 until 2007, Mr. Vanderwoude served as Chairman and Chief Executive Officer of Madison River Communications Corp., a company that acquired and operated rural telephone companies.  Prior to his service at Madison River, he served as the President, Chief Executive Officer and a director of Powerhouse Technologies, Inc. (NASDAQ), and President, Chief Operating Officer and a director of Centel Corporation (NYSE).  Mr. Vanderwoude served as a member of the board of directors of Centennial Communications Corp. (NASDAQ) from 2002 to 2009 and as its Chairman from 2007 to 2009.

Age: 76
Director Since: 1991

 

 

 

 

 

Mr. Vanderwoude earned a Bachelor of Science degree in Engineering from the University of Pennsylvania in 1967 and a Master of Business Administration with concentrations in Economics and Marketing from the University of Chicago in 1977.

Through his chief executive officer and director experience at other public companies, professional background and considerable business accomplishments and achievements, Mr. Vanderwoude brings valuable skills and experience in leadership, business and risk management, strategic planning, finance, M&A and public company matters to our Board of Directors.

*     *     *

For more information regarding our Board of Directors, its members, its committees and our corporate governance practices, please see the section of this Proxy Statement entitled Corporate Governance at First Midwest or visit the Investor Relations section of our website at www.firstmidwest.com/officersdirectors.

 

Recommendation of our Board of Directors

The Board of Directors unanimously recommends that stockholders vote FOR the election of each of
Barbara A. Boigegrain, Thomas L. Brown, Phupinder S. Gill, Kathryn J. Hayley, Peter J. Henseler,
Frank B. Modruson, Ellen A. Rudnick, Mark G. Sander, Michael L. Scudder, Michael J. Small,
Stephen C. Van Arsdell and J. Stephen Vanderwoude as directors of the Company.

 

 

 

 

 

 

 

2020 Proxy Statement

21

 

 

ITEM 2  APPROVAL OF AN ADVISORY (NON-BINDING) RESOLUTION REGARDING THE COMPENSATION PAID IN 2019 TO THE COMPANY’S NAMED EXECUTIVE OFFICERS

In accordance with applicable SEC rules, we are required to provide stockholders with an opportunity to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement.  We refer to this proposal as the “say-on-pay” proposal.  Our executive compensation programs, including detailed information regarding the compensation paid to our named executive officers for 2019, are described in the Compensation Discussion and Analysis and Executive Compensation Tables sections of this Proxy Statement.

Our Board of Directors views it as a good corporate governance practice to present the say-on-pay proposal to our stockholders annually.  The Board made this recommendation to our stockholders at our 2019 annual meeting, and our stockholders overwhelmingly voted in favor of holding a say-on-pay vote every year, as opposed to every other year or every third year.

At our 2019 annual meeting of stockholders, 94% of the votes cast (98% if abstentions are excluded) were voted in favor of the compensation paid to our named executive officers.  We believe these results confirmed our approach to executive compensation.  Our Compensation Committee intends to consider the say-on-pay vote results from this year, and future advisory votes, with respect to the design of and amounts paid under our executive compensation program. 

We are asking our stockholders to indicate their support for our executive compensation program as described in this Proxy Statement.  This proposal gives our stockholders the opportunity to express their views on our executive compensation.  This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers described in this Proxy Statement.  Accordingly, we will ask our stockholders to vote on the following resolution at the Annual Meeting:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the executive compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion set forth in the 2020 annual meeting proxy statement, is hereby approved by the Company’s stockholders on an advisory basis.

The say-on-pay vote is advisory and is therefore not binding on the Company, the Compensation Committee or our Board of Directors.  We value the opinions of our stockholders, and the Compensation Committee will consider the results of the vote on our say-on-pay proposal when establishing the design of and amounts paid under our future executive compensation programs.

 

Recommendation of our Board of Directors

The Board of Directors unanimously recommends that stockholders vote FOR approval of
the advisory (non-binding) resolution, as set forth above, regarding the compensation paid to
the Company’s named executive officers.

 

 

 

 

 

 

22

First Midwest Bancorp, Inc.

 

ITEM 3  RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Independent Registered Public Accounting Firm

The Audit Committee of the Board of Directors is responsible for appointing the Company’s independent registered public accounting firm, and the Audit Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for the year ending December 31, 2020.  We are submitting this selection for stockholder ratification at the Annual Meeting.  We expect a representative of Ernst & Young LLP to be present at the Annual Meeting and to have an opportunity to make a statement if he or she desires to do so and to be available to respond to appropriate questions from stockholders.  Ernst & Young LLP also served as our independent registered public accounting firm for the year ended December 31, 2019.

Although we are not required to have our stockholders ratify the selection of our independent registered public accounting firm, our Board of Directors has determined to seek this ratification from stockholders.  This ratification is advisory and is, therefore, not binding on the Audit Committee.  If our stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain Ernst & Young LLP, but may retain them nonetheless.  Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of the Company.

Fees Paid to Independent Registered Public Accounting Firm

The Audit Committee, or a designated member of the Audit Committee, approves in advance all audit and any non-audit services rendered by Ernst & Young LLP on behalf of the Company.  The following table shows information about fees paid by the Company to Ernst & Young LLP for services related to the years indicated below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent of

 

 

 

Percent of

 

 

 

 

 

2019 Services

 

 

 

2018 Services

 

 

 

 

 

Approved by

 

 

 

Approved by

 

 

 

2019

 

Audit Committee

 

2018

 

Audit Committee

 

Audit fees(1)

    

$

2,001,777

    

100

$

1,658,979

    

100

%

Audit-related fees(2)

 

 

263,200

 

100

 

154,400

 

100

%

Tax fees(3)

 

 

174,671

 

100

%

 

455,715

 

100

%

All other fees

 

 

 —

 

 —

 

 

—  

%

Total fees

 

$

2,439,648

 

 

 

$

2,269,094

 

 

 


(1)

Includes fees and expenses for the audit of the Company’s annual financial statements, internal control over financial reporting and review of financial statements included in the Company’s quarterly reports filed with the SEC, as well as other services normally provided by an independent auditor in connection with statutory and regulatory filings or engagements, including consents and assistance with review of SEC filings in connection with the Company’s M&A activity.

(2)

Includes fees related to the audits of the Company’s benefit plans and filings with the SEC.

(3)

Includes fees related to assistance with routine tax audits and tax planning, consulting and compliance services.

Audit fees for 2019 increased primarily due to the services provided by Ernst & Young LLP in connection with the Company’s 2019 M&A activity, the pending adoption of the current expected credit losses standard (CECL), and changes in audit scope.  Tax fees for 2018 were elevated due to the services provided by Ernst & Young LLP in connection with federal income tax reform.

 

 

 

2020 Proxy Statement

23

 

Table of Contents

Item 3  Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm

For audit, audit-related, tax-related and all other services, our Audit Committee has determined specific services and dollar thresholds under which such services would be considered pre-approved.  To the extent management requests services other than these pre-approved services, or beyond the dollar thresholds, our Audit Committee must specifically approve the services.  Further, under our fee policy, our independent registered public accounting firm may not perform the non-audit services identified by the SEC as prohibited.  Our fee policy requires management to provide to our Audit Committee on a quarterly basis a summary of all services performed by the independent registered public accounting firm.

 

Recommendation of our Board of Directors

The Board of Directors unanimously recommends that stockholders vote FOR ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending
December 31, 2020.

 

 

 

 

 

 

 

24

First Midwest Bancorp, Inc.

 

CORPORATE GOVERNANCE AT FIRST MIDWEST

Our Board of Directors is committed to maintaining strong corporate governance principles and practices.

For additional information about our corporate governance practices, you may view the following documents on our website at www.firstmidwest.com/corporategovernance or request them in print by sending a written request to the Corporate Secretary at First Midwest Bancorp, Inc., 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631:

   Corporate Governance Guidelines

   Code of Ethics and Standards of Conduct (applicable to all directors, officers and employees)

   Code of Ethics for Senior Financial Officers

   Audit Committee Charter

   Compensation Committee Charter

   Enterprise Risk Committee Charter

   Nominating and Corporate Governance Committee Charter

   Related Person Transaction Policies and Procedures

   

   

Corporate Governance Guidelines and Committee Charters

Our Corporate Governance Guidelines and the charters of the Audit, Compensation, Enterprise Risk and Nominating and Corporate Governance Committees of our Board of Directors describe various aspects of our corporate governance practices.  The Corporate Governance Guidelines and charters are intended to ensure that our Board of Directors has certain practices in place relating to oversight of management and various components of our business operations and to make decisions that are independent of management.

Code of Ethics and Standards of Conduct

We have adopted a Code of Ethics and Standards of Conduct, which applies to all of our directors, officers and employees, as well as a Code of Ethics for Senior Financial Officers, which applies to our senior financial officers.  Our Code of Ethics and Standards of Conduct meets the requirements of a “code of ethics” as defined by applicable SEC rules, and also meets the requirements of a “code of conduct” under the applicable rules of the NASDAQ Stock Market.  Annually, all employees are required to certify that they have reviewed and are familiar with the Code of Ethics and Standards of Conduct, and all officers are required to certify compliance with this code.  Waivers of the Code of Ethics and Standards of Conduct for executive officers and directors are required to be disclosed to the Chair of our Nominating and Corporate Governance Committee.  Similarly, our senior financial officers must certify annually that they have reviewed, are familiar with and are in compliance with the Code of Ethics for Senior Financial Officers.  Waivers of the Code of Ethics for Senior Financial Officers must be submitted to and approved by the Board.

Director Independence

Our Board of Directors determines annually the independence of all non-employee directors in accordance with the independence requirements of our Corporate Governance Guidelines and the NASDAQ Stock Market rules.  Accordingly, each year the Board affirmatively determines whether each non-employee director has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.  Annually, each non-employee director is required to complete a questionnaire that provides information about relationships that might affect a determination of independence.  Management then provides the Nominating and Corporate Governance Committee and the Board of Directors with relevant facts and circumstances of any relationship bearing on the independence of a director or nominee that is outside the categories permitted under the rules of the NASDAQ Stock Market. 

 

 

 

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Table of Contents

Corporate Governance at First Midwest

Based on the review and recommendation by the Nominating and Corporate Governance Committee, our Board of Directors analyzed the independence of each of the Company’s nominees and other current directors, and determined that all of our directors meet the standards of independence under our Corporate Governance Guidelines and the NASDAQ Stock Market rules, other than Michael L. Scudder, our Chairman and Chief Executive Officer, and Mark G. Sander, our President and Chief Operating Officer, who are not considered to be independent under our Corporate Governance Guidelines and the rules of the NASDAQ Stock Market because they are employees of the Company.  In addition, our Board of Directors determined that:

u

Each member of the Audit Committee is financially literate and has accounting or related financial management expertise (as such qualifications are defined under the rules of the NASDAQ Stock Market).

u

Thomas L. Brown and Stephen C. Van Arsdell are “audit committee financial experts” within the meaning of the rules and regulations of the SEC.

u

Each member of the Compensation Committee is a “non-employee director” within the meaning of Exchange Act Rule 16b‑3, and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code.

Board Leadership and Structure

As provided in our Corporate Governance Guidelines, our Board of Directors does not have a fixed policy regarding the separation of the offices of Chairman and Chief Executive Officer and believes that it should maintain the flexibility to select the Chairman and the Board leadership structure based on what it deems to be in the best interests of the Company and its stockholders.  Our Nominating and Corporate Governance Committee annually reviews the composition of the Board and its committees.  The Nominating and Corporate Governance Committee also reviews and recommends to the Board the duties and responsibilities of the Chairman and the Lead Independent Director.

Since 2017, Michael L. Scudder has served as our Chairman of the Board and Chief Executive Officer, and J. Stephen Vanderwoude has served as our Lead Independent Director.

The Board of Directors believes that, at this time, the combination of the offices of Chairman of the Board and Chief Executive Officer and the maintenance of a separate Lead Independent Director role are appropriate for the Company.  This leadership structure allows Mr. Scudder to leverage his extensive knowledge of the Company and industry experience into the strategic vision for the management and direction of the Company at both the Board and management level.  This further allows him to drive the enhancement of stockholder value, grow and expand the Company’s business and execute the Company’s strategies.

Additionally, the Board believes it is appropriate to have a Lead Independent Director while Mr. Scudder serves as Chairman of the Board in order to provide leadership independent from management.  The Lead Independent Director is empowered with, and exercises, well-defined duties that enable robust, objective oversight of the Company’s affairs and ensure independent challenge of management as appropriate.  Mr. Vanderwoude has a strong understanding of the Company and its business, as well as significant leadership, corporate governance and public company experience.

Consistent with Mr. Scudder’s focus on the Company’s strategic vision and direction, in January 2019, the Board approved the appointment of Mark G. Sander to the position of President of the Company in addition to his position as Chief Operating Officer.  In this role, Mr. Sander leads significant portions of the day-to-day management of the Company and the Bank.

Lead Independent Director

Our Lead Independent Director must satisfy the independence requirements of the NASDAQ Stock Market and must have served as a director of the Company for least one year.  The Lead Independent Director serves in a leadership capacity among our independent directors and as an additional resource for the Chairman of the Board in order to continue to foster a strong, highly engaged and high-performing Board of Directors.

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Corporate Governance at First Midwest

The principal duties and responsibilities of the Lead Independent Director are as follows:

u

Act as a liaison on behalf of the independent directors with the Chairman of the Board.

u

Preside at all meetings of the Board of Directors and stockholders at which the Chairman of the Board is not present.

u

Consult with the Chairman of the Board on the agendas and schedules for meetings of the Board of Directors.

u

Have the ability to call meetings of the Board.

u

Determine, in conjunction with the Board of Directors, the need for, have the ability to call, and preside at meetings of the independent directors and, following each such meeting, promptly communicate to the Chairman of the Board the substance of the discussions that occurred at the meeting.

u

Serve as a member of the Advisory Committee of the Board of Directors.

u

Serve as the acting Chairman of the Board in the event of an extended incapacitation of the Chairman until the incapacitation has ended or a successor to the Chairman is elected.

u

Together with the Chairman of the Board and the Chair of the Nominating and Corporate Governance Committee, interview all new director candidates.

u

Consult with the Chairman of the Board with respect to the quality and timeliness of information provided to the Board.

u

Perform such other duties and responsibilities as may be assigned to the Lead Independent Director by the Board.

Risk Oversight

Risk is inherent in every business, particularly for financial institutions, and we face several risks, including, for example, credit, market, liquidity, operational, strategic, compliance, legal and reputation risks.  We do not view risk in isolation, but rather consider risk as part of our ongoing consideration of business strategy and business decisions.  We also are mindful that risk oversight is not about eliminating all risks, but rather identifying, accepting and managing risks at appropriate levels while balancing prudent business considerations, as well as safety and soundness.

We support our risk oversight process through a governance structure involving our Board of Directors and management.  Management is responsible for the day-to-day management of the risks the Company faces.  It establishes and maintains risk management processes,  policies and tolerance ranges designed to balance our operations and business opportunities with risk mitigation in order to create stockholder value.  It is management’s responsibility to anticipate, identify and communicate risks to the Board of Directors and its committees.  The Company also has a Chief Risk Officer, who is responsible for the design and implementation of our risk management processes.

We have a Strategic Risk Management Committee composed of members of executive management.  The purpose of this committee is to provide a centralized forum to manage key risks that could negatively impact the Company’s operating performance and execution of its business plan.  This committee, through our Chief Risk Officer, also reports at least quarterly to the Enterprise Risk Committee of our Board of Directors on significant risk management matters.

 

 

 

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Table of Contents

Corporate Governance at First Midwest

The Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management.  In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that our enterprise risk management framework, policies and profiles designed and implemented by management are appropriate and functioning as contemplated.

The Board performs its risk oversight function primarily through its committees and the operation of the Bank’s board of directors.  The Board committee that is primarily involved in assisting the Board of Directors with its oversight of enterprise-wide risk management is the Enterprise Risk Committee.  Among other responsibilities, this committee approves risk appetites and profiles established by management for key business risks and confirms that business decisions are executed within the established risk tolerances.

Each of the Board’s standing committees is comprised entirely of independent directors and supports the Board’s oversight functions by regularly addressing various risks in their respective areas of oversight, as follows:

u

Audit Committee. Assists the Board with risk oversight in the areas of financial reporting, internal controls, tax and compliance with certain public reporting requirements.

u

Compensation Committee. Assists the Board with risk oversight associated with our compensation policies and programs, including maintaining an executive compensation program that is designed to encourage the achievement of corporate objectives and strategies, enhance stockholder value and incent and retain our executive officers, and discourage unnecessary or excessive risk taking.

u

Enterprise Risk Committee. Assists the Board with the oversight of the Company’s enterprise-wide risk management framework.

u

Nominating and Corporate Governance Committee. Assists the Board with risk oversight associated with corporate governance, Board and Board committee composition and director and executive succession.

Each committee reports to the full Board of Directors at least quarterly at regular meetings concerning the activities of the committee, the significant matters it has discussed and the actions taken by the committee.  The Board also receives reports directly from our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Risk Officer and General Counsel, as well as other members of management, regarding the Company’s risk management functions.  Key members of senior management attend Board and Board committee meetings and are available to address any questions or concerns raised by the Board of Directors.

Cybersecurity Risk Oversight 

Cybersecurity risk is a component of operational risk at the Company.  We recognize the importance of maintaining the trust of our customers with respect to their confidential financial information and devote significant attention to cybersecurity risk.  In this regard, we use a variety of techniques that are intended to secure our operations and confidential information, consult with third-party security advisors and maintain cyber insurance.

Our Board of Directors oversees management of cybersecurity risk.  Senior management is responsible for the day-to-day management of cybersecurity risk and the design and implementation of policies, processes and procedures to address and mitigate this risk.  The Board and our Enterprise Risk Committee receive periodic reports from and engage in discussions with senior management on the effectiveness of our cybersecurity program and review our inherent risks, the plans and programs designed to address these risks and our progress in doing so.

Meetings

Our Board of Directors holds regular quarterly meetings and special meetings as needed.  In 2019, the Board held four regularly scheduled meetings, and our independent directors met separately without management present following each regular meeting.  Our directors also communicate with each other between meetings.  Further, the Board of Directors devotes additional time outside of its regular meetings to discussions with our Chief Executive Officer and members of executive management about the Company’s long-term strategy, corporate objectives and initiatives and industry and market updates, which are then discussed further at the Board’s quarterly meetings.

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Corporate Governance at First Midwest

We expect our directors to attend all Board and committee meetings for those committees on which they serve.  Directors are also expected to attend each annual meeting of stockholders.  All of our directors attended last year’s annual meeting, and 11 of our 12 directors attended 100% of the total number of meetings of the Board and committees on which he or she served during 2019, with the remaining director attending all but one meeting.

Board Committees

Our Board of Directors has four standing committees: our Audit Committee, Compensation Committee, Enterprise Risk Committee and Nominating and Corporate Governance Committee.  Each standing committee has a written charter that each committee and the Board of Directors reviews annually.  Our Board has determined that each of the members of our standing committees is independent under the provisions of our Corporate Governance Guidelines and the rules of the NASDAQ Stock Market.  The Board of Directors has also established an Advisory Committee for the purpose of providing advice to management with respect to business matters as needed between regular meetings of the Board and undertaking such other duties and responsibilities as may be delegated to this committee by the Board.

Under our Corporate Governance Guidelines, the members of each Board committee (including each committee chair) are appointed by the Board upon the recommendation of the Nominating and Corporate Governance Committee, and a member may only serve as the chair of one committee of the Board at any given time.

Below is a brief description, including membership and meeting information for 2019, of each standing committee of our Board of Directors, as well as our Advisory Committee.  Each standing committee has the authority to engage, at the Company’s expense, legal counsel or other advisors or consultants as it deems appropriate to carry out its responsibilities.  The charter of each standing committee describes the specific responsibilities and functions of the committee.  Copies of our Audit Committee, Compensation Committee, Enterprise Risk Committee and Nominating and Corporate Governance Committee charters are available by visiting our website at www.firstmidwest.com/corporategovernance.

 

 

 

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Table of Contents

Corporate Governance at First Midwest

Audit Committee 

 

 

 

 

 

# of Meetings

Committee Members

Primary Responsibilities

in 2019

Stephen C. Van Arsdell (Chair)
Thomas L. Brown
Phupinder S. Gill
Kathryn J. Hayley
Frank B. Modruson
Michael J. Small

   Appoint our independent registered public accounting firm and pre-approve all services performed by this firm.

   Oversee the external financial reporting process and the adequacy of the Company’s internal controls over financial reporting.

   Oversee the appointment of the audit services director, who is responsible for the Company’s internal audit function.

   Oversee the scope of the audit activities of the independent registered public accounting firm and the Company’s internal auditors.

   Oversee the process for determining the independence of the independent registered public accounting firm.

   Oversee the procedures for the receipt, retention and resolution of complaints regarding accounting, internal control or auditing matters.

   Discuss with management and the independent registered public accounting firm the critical accounting policies and practices used by the Company, any off-balance sheet items and significant judgments made in connection with the preparation of the Company’s financial statements.

   Discuss with management and the independent registered public accounting firm certain reports filed with the SEC.

   Discuss with management the Company’s policies and procedures relating to compliance with applicable laws and regulations pertaining to financial reporting and disclosure.

8

Compensation Committee

 

 

 

 

 

# of Meetings

Committee Members

Primary Responsibilities

in 2019

Barbara A. Boigegrain (Chair)
Kathryn J. Hayley
Peter J. Henseler
Ellen A. Rudnick

   Review and approve our executive compensation philosophy.

   Oversee the development and implementation of our compensation policies and programs.

   Review and monitor our incentive and other compensation programs.

   Recommend to our Board of Directors goals and objectives relating to the compensation of our Chief Executive Officer.

   Assist our Board of Directors in evaluating the performance of our Chief Executive Officer and recommend to our Board the Chief Executive Officer’s compensation.

   Review and recommend to our Board of Directors the annual compensation of senior executive management.

   Approve the Company’s peer group used for comparative compensation purposes.

   Review and recommend to our Board of Directors the annual compensation of our directors.

   Administer our 2018 Stock and Incentive Plan and Non-Employee Directors Stock Plan.

   Discuss with management the Company’s health and welfare programs.

   Appoint the plan administrators for the Company’s retirement plans and the members of the Company’s retirement and benefit plans administrative committee.

   Conduct an annual risk assessment of our compensation programs.

   Retain an independent compensation consultant to provide advice to the Compensation Committee relative to compensation matters.

5

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Corporate Governance at First Midwest

Enterprise Risk Committee

 

 

 

 

 

# of Meetings

Committee Members

Primary Responsibilities

in 2019

J. Stephen Vanderwoude (Chair)
Thomas L. Brown
Phupinder S. Gill
Frank B. Modruson
Michael J. Small

   Review and approve policies establishing risk management governance, risk appetite, risk management procedures and risk control infrastructure for the Company’s enterprise-wide operations.

   Approve our enterprise risk management framework and oversee management’s oversight of the processes and systems for implementing and monitoring compliance with this framework.

   Approve the Company’s risk appetite statement.

   Review reports from management to evaluate the Company’s assessment and management of enterprise-wide risks identified through the enterprise risk management program.

   Review reports from management relating to its assessment and monitoring of market, liquidity, operational, strategic, compliance, legal and reputational risks at the Company.

   Review and recommend to the Board for approval annually the Company’s capital management policy.

   Review and recommend to the Board for approval annually the Company’s capital plan and monitor management’s adherence to the plan.

4

Nominating and Corporate Governance Committee

 

 

# of Meetings

Committee Members

Primary Responsibilities

in 2019

Ellen A. Rudnick (Chair)
Barbara A. Boigegrain
Peter J. Henseler
Stephen C. Van Arsdell
J. Stephen Vanderwoude

   Recommend to the Board of Directors the director nominees for election at any meeting of stockholders at which directors are elected.

   Identify, interview and recruit individuals to serve as members of our Board of Directors.

   Oversee matters of corporate governance, including review of the Company’s Corporate Governance Guidelines, Code of Ethics and Standards of Conduct and stock ownership guidelines.

   Advise the Board of Directors on Board and committee organization, membership, function, performance and effectiveness.

   Recommend to the Board of Directors the appointment of a director to serve as the Chairman of the Board and, if the Chairman also serves as the CEO, the Lead Independent Director.

   Review director independence standards and qualifications and make recommendations to the Board of Directors with respect to the determination of the independence and qualifications of directors.

   Assist and advise regarding executive management succession.

   Approve, subject to stockholder approval where required, amendments to the Company’s Certificate of Incorporation, By-Laws and Corporate Governance Guidelines.

   Discuss with management the Company’s corporate social responsibility program and initiatives.

   Assist the Chairman of the Board with director education at the Company.

   Review related person transactions, if and when they arise.

   Oversee the annual self-evaluation process of the Board of Directors and each of its committees.

4

 

 

 

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Corporate Governance at First Midwest

Advisory Committee

 

 

 

 

 

# of Meetings

Committee Members

Primary Responsibilities

in 2019

Michael L. Scudder (Chair)
Barbara A. Boigegrain

Ellen A. Rudnick
Stephen C. Van Arsdell
J. Stephen Vanderwoude

   Advise and consult with management with respect to business matters as needed between regular meetings of the Board of Directors.

   Undertake such other duties and responsibilities as may be delegated to this committee by the Board of Directors.

Board and Committee Self-Evaluations

The Board of Directors and the Audit, Compensation, Enterprise Risk and Nominating and Corporate Governance Committees conduct an annual self-evaluation, which includes both a qualitative and quantitative assessment by each director of the performance of the Board and the committees on which the director sits.  The Nominating and Corporate Governance Committee oversees these evaluations.  As part of this process, each director completes an annual self-evaluation of the Board and the committees on which the director sits and has an individual meeting with the Chair of the Nominating and Corporate Governance Committee.  The results of the self-evaluations are reported to the Board of Directors.

Director Education

The Chairman of the Board oversees director education at the Company, with the input of the Nominating and Corporate Governance Committee.  Director education occurs for the full Board and for each of the Board’s committees.  Our education program involves quarterly in-person presentations on relevant topics by management, outside advisors or industry experts, attendance at national and local conferences and meetings (sponsored by federal bank regulatory agencies, the National Association of Corporate Directors and others), access to board and governance related portals maintained by outside advisors or industry experts and subscriptions to pertinent periodicals and other materials.

Related Person Transactions

We maintain a written policy for reviewing, approving and monitoring transactions involving the Company and related persons (generally, directors and executive officers or their immediate family members, or stockholders owning 5% or more of our Common Stock).

Our Nominating and Corporate Governance Committee is responsible for reviewing and approving (or ratifying) all transactions with related persons.  The Nominating and Corporate Governance Committee will consider all relevant factors in its analysis, including whether the transaction is on an arm’s length basis with terms comparable to those available to third parties.  The Nominating and Corporate Governance Committee will also determine whether any transaction with a related person impairs the independence of a director or presents a conflict of interest on the part of a director or executive officer.  The Chair of the Nominating and Corporate Governance Committee may pre-approve or ratify any transaction with a related person involving an amount up to $1,000,000.  The policy also provides that transactions involving competitive bids, the rendering of services by a regulated entity and certain ordinary course banking transactions, including loans made by First Midwest Bank, will be deemed to be pre-approved by the Nominating and Corporate Governance Committee.

From time to time, First Midwest Bank engages in transactions with some of our executive officers, directors and entities with which they are associated.  These transactions involve loans extended in accordance with Regulation O of the Federal Reserve and other banking services, all of which are in the ordinary course of business and on substantially the same terms, including current interest rates and collateral, as those prevailing at the time for comparable transactions with others not related to the Company and do not involve more than the normal risk of collectability or present other unfavorable features. 

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Corporate Governance at First Midwest

Compensation Committee Interlocks and Insider Participation

No member of our Compensation Committee has served as one of our executive officers or employees.  None of our executive officers serves as a member of the board of directors or compensation committee of any other company that has an executive officer serving on our Board of Directors or our Compensation Committee.

Stockholder Engagement

In 2019, we initiated a stockholder engagement program in order to promote an open dialogue between the Company and our largest stockholders.  Through this program, we engaged with several of our institutional stockholders owning in the aggregate over 20% of our outstanding Common Stock.  The meetings with our stockholders included discussion of our business strategy, the composition and qualifications of our Board of Directors, corporate governance practices,  executive compensation and corporate social responsibility activities, among other topics.  We value the input and perspectives that we received during these discussions and will carefully consider stockholder feedback as we review our corporate practices.  We plan to continue our engagement program to further open and constructive dialogue with our stockholders. 

Stockholder Communication with Directors

Stockholders may contact the Chairman of the Board, the Lead Independent Director, an individual director, the entire Board of Directors, our independent directors as a group or a specific Board committee by submitting written correspondence to First Midwest Bancorp, Inc., Attn: Corporate Secretary, 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631.  Each communication should specify the applicable addressee(s) to be contacted as well as the general topic of the communication.  The Company will initially receive and process communications before forwarding them to the addressee(s).  Communications also may be referred to other departments within the Company.  The Company generally will not forward to the directors a communication that involves routine business matters of the Company or First Midwest Bank, an irrelevant topic or a request for general information about the Company.  Communications regarding accounting or auditing matters should be made in writing and addressed to the Board’s Audit Committee Chair or the Company’s Audit Services Director at First Midwest Bancorp, Inc., 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631.

Whistleblower Policy

We have adopted a comprehensive whistleblower policy in furtherance of our commitment to conduct our affairs in compliance with all applicable securities laws and regulations, accounting standards, accounting controls and audit practices.  The whistleblower policy establishes procedures for the receipt, retention and treatment of complaints regarding accounting, internal control or auditing matters.   The whistleblower policy also provides a process for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.  Our Audit Committee oversees the administration of the whistleblower policy and determines the application of corrective action as appropriate.

 

 

 

 

 

2020 Proxy Statement

33

 

INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS AND MANAGEMENT

The following table sets forth, as of March 27, 2020, the Record Date, information about the beneficial ownership of our Common Stock by all directors, our named executive officers and our directors and all executive officers as a group.  Except as described below, each stockholder has sole voting and investment power for all shares shown.   Unless otherwise indicated, the address of each beneficial owner is c/o First Midwest Bancorp, Inc., 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631.

We calculated the percent of class based on 114,327,151 shares of Common Stock outstanding on March 27, 2020.  We include shares of restricted stock subject to future vesting conditions for which an individual has voting but not dispositive power.  We also include shares underlying restricted stock units and performance shares that could vest within 60 days of March 27, 2020, even though an individual has neither voting nor dispositive power.  Those shares are deemed to be outstanding and beneficially owned by the person holding such securities for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

 

 

 

 

 

 

 

 

Number of

 

Percent of

 

Beneficial Owner

    

Shares/Units(1)(2)(3)

    

Class

 

Directors

 

 

 

 

 

Barbara A. Boigegrain

 

37,896

 

*

 

Thomas L. Brown

 

15,676

 

*

 

Phupinder S. Gill

 

57,867

 

*

 

Kathryn J. Hayley

 

23,000

 

*

 

Peter J. Henseler

 

27,315

 

*

 

Frank B. Modruson

 

10,171

 

*

 

Ellen A. Rudnick

 

35,758

 

*

 

Mark G. Sander

 

224,511

 

*

 

Michael L. Scudder

 

319,495

 

*

 

Michael J. Small

 

29,851

 

*

 

Stephen C. Van Arsdell

 

24,444

 

*

 

J. Stephen Vanderwoude

 

33,654

 

*

 

Named Executive Officers (other than Messrs. Sander and Scudder)

 

 

 

 

 

Patrick S. Barrett

 

73,831

 

*

 

Michael W. Jamieson

 

31,669

 

*

 

Thomas M. Prame

 

60,759

 

*

 

All directors and executive officers (including named executive officers) as a group (23 persons) (4)

 

1,243,326

 

1.1

%


*Less than 1%.

(1)

Some of our directors and officers have deferred cash compensation (in the form of phantom Common Stock) or stock option gains (in the form of Common Stock equivalents) under our deferred compensation plans.  Some of these deferred amounts will be paid in shares of our Common Stock upon the director’s or officer’s retirement or other termination of employment or service with the Company.  The directors and officers have voting and investment power for the shares of phantom Common Stock and voting power but no dispositive power for the Common Stock equivalent shares.  All shares held under our deferred compensation plans are included in the totals for our directors and officers.  The number of shares of Common Stock to which our directors and officers would be entitled had their service or employment with the Company terminated as of March 27, 2020 is as follows: Mr. Brown, 12,676 shares; Mr. Gill, 30,373 shares; Mr. Henseler, 1,938 shares; Mr. Van Arsdell, 7,944 shares; Mr. Vanderwoude, 21,154 shares; Mr. Scudder, 10,211 shares; and Mr. Prame, 2,130 shares. 

(2)

Includes the following shares of Common Stock held through the Company’s 401(k) Plan: Mr. Sander, 373 shares; and Mr. Prame, 87 shares. 

(3)

Includes the following shares of restricted stock subject to future vesting conditions for which the individual has voting but not dispositive power: Mr. Scudder, 58,806 shares; Mr. Sander, 41,022 shares; Mr. Barrett, 43,958 shares; Mr. Jamieson, 13,618 shares; and Mr. Prame, 19,977 shares. For Mr. Jamieson, excludes 9,556 restricted stock units that would not vest within 60 days after March 27, 2020 under the terms of the applicable award agreements.

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Information Regarding Beneficial Ownership of Principal Stockholders, Directors and Management

(4)

Includes:  86,461 shares of Common Stock payable to certain directors and executive officers pursuant to our deferred compensation plans; 12,329 shares of Common Stock held in our 401(k) Plan for the accounts of certain executive officers; and 278,195 shares of restricted stock.  Excludes: 21,829 restricted stock units and 83,755 earned performance shares that would not vest within 60 days after March 27, 2020 under the terms of the applicable award agreements.

Other Security Ownership

The following table identifies each person known to us as of March 27, 2020 to beneficially own more than 5% of our outstanding Common Stock.

 

 

 

 

 

 

 

    

Number

    

Percent

 

Name and Address of Beneficial Owner

 

of Shares

 

of Class

 

BlackRock, Inc.(1)

 

15,235,535

 

13.9

%

55 East 52nd Street

 

 

 

 

 

New York, New York 10055

 

 

 

 

 

The Vanguard Group(2)

 

11,689,472

 

10.6

%

100 Vanguard Boulevard

 

 

 

 

 

Malvern, Pennsylvania 19355

 

 

 

 

 

Dimensional Fund Advisors LP(3)

 

7,308,940

 

6.7

%

Building One

 

 

 

 

 

6300 Bee Cave Road

 

 

 

 

 

Austin, Texas 78746

 

 

 

 

 

Wellington Management Group LLP(4)

 

6,038,354

 

5.5

%

c/o Wellington Management Company LLP

 

 

 

 

 

280 Congress Street

 

 

 

 

 

Boston, Massachusetts 02210

 

 

 

 

 


(1)

This information is based solely on a Schedule 13G/A filed with the SEC on February 4, 2020 by BlackRock, Inc., which reported sole voting power as to 15,005,960 shares and sole dispositive power as to 15,235,535 shares as of December 31, 2019.

(2)

This information is based solely on a Schedule 13G/A filed with the SEC on February 12, 2020 by The Vanguard Group, which reported sole voting power as to 105,546 shares, shared voting power as to 13,142 shares, sole dispositive power as to 11,584,118 shares and shared dispositive power as to 105,354 shares as of December 31, 2019.

(3)

This information is based solely on a Schedule 13G/A filed with the SEC on February 12, 2020 by Dimensional Fund Advisors LP, which reported sole voting power as to 7,179,409 shares and sole dispositive power as to 7,308,940 shares as of December 31, 2019.  Dimensional Fund Advisors LP and its subsidiaries disclaim beneficial ownership of all securities reported on the Schedule 13G/A.

(4)

This information is based solely on a Schedule 13G/A filed with the SEC on January 28, 2020 by Wellington Management Group LLP (“WMG”) on behalf of each of WMG, Wellington Group Holdings LLP (“WGH”), Wellington Investment Advisors Holdings LLP (“WIAH”) and Wellington Management Company LLP (“WMC”).  The Schedule 13G/A reported that each of WMG, WGH and WIAH shared voting power as to 5,277,399 shares and shared dispositive power as to 6,038,354 shares, and WMC shared voting power as to 4,865,882 shares and shared dispositive power as to 5,616,205 shares, as of December 31, 2019.

 

 

 

 

 

2020 Proxy Statement

35

 

DIRECTOR COMPENSATION

We use a combination of cash and equity-based compensation set at levels we believe will allow us to attract and retain qualified individuals to serve on our Board of Directors.  Each year, the Compensation Committee reviews, with the assistance of our independent compensation consultant, and makes a recommendation to our Board of Directors regarding the compensation that we pay to our directors.  In setting director compensation, we consider the significant amount of time that directors devote to fulfilling their duties, advice that we receive from our compensation consultant and comparative data regarding director compensation at the companies in our peer group as well as other public companies in the Midwest, which is the area where we primarily compete for director candidates.

For 2019, the Compensation Committee recommended to our Board of Directors, and the Board subsequently approved, that both the annual fixed cash retainer and the annual award of Common Stock paid to each non-employee director should be increased from $52,500 to $55,000, for a total of $110,000.  The awards of Common Stock are granted as fully-vested shares of Common Stock, and our directors may elect to receive the stock component of their director compensation in cash.

Michael L. Scudder, our Chairman and Chief Executive Officer, and Mark G. Sander, our President and Chief Operating Officer, do not receive compensation for serving as a member of the Board.  In addition, Br. James Gaffney, who retired as a director in 2019, elected not to receive any director compensation for his service on the Board.

The following table summarizes our annual compensation for non-employee directors for 2019:

 

 

 

 

 

Component

 

    

 Amount

An annual fixed cash retainer for each non-employee director

 

 

$

55,000

An annual award of Common Stock for each non-employee director(1)

 

 

$

55,000

An annual fixed cash retainer for the Lead Independent Director

 

 

$

25,000

 

 

 

 

 

Committee

 

Chair Cash Retainer

    

Member Cash Retainer

Audit

$

15,000

$

7,500

Compensation

$

15,000

$

6,000

Enterprise Risk

$

15,000

$

5,000

Nominating and Corporate Governance

$

10,000

$

2,500


(1)

A director may elect to receive the stock component of his or her director compensation in cash.

Each director’s annual cash retainer and Common Stock award are paid in equal quarterly installments in arrears.  Payment of each retainer installment is contingent upon the director’s service during the preceding quarter.  We do not pay separate fees for attendance at Board or Board committee meetings.  We also reimburse our directors for their reasonable Board and committee attendance-related expenses.

Barbara A. Boigegrain, Phupinder S. Gill, Peter J. Henseler, Frank B. Modruson and Ellen A. Rudnick each received an award of 2,643 shares of fully-vested Common Stock for their 2019 service as the stock component of their director compensation.  Thomas L. Brown, Kathryn J. Hayley, Michael J. Small, Stephen C. Van Arsdell and J. Stephen Vanderwoude each elected to receive cash in lieu of shares of fully-vested Common Stock for 2019, with certain of these directors deferring cash compensation into our Deferred Compensation Plan and using plan balances to purchase shares of Common Stock.  

Deferred Compensation Plan for Non-Employee Directors

Our Deferred Compensation Plan allows non-employee directors to defer receipt of either 50% or 100% of their director fees and retainers.  Deferral elections are made in December of each year for amounts payable in the following year.  Amounts are deemed to be invested in separate investment accounts under the plan, with the various investment alternatives available under our Deferred Compensation Plan, including an investment account for shares of our Common Stock.

 

 

 

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First Midwest Bancorp, Inc.

 

Table of Contents

Director Compensation

Deferred director fees and retainers are payable at the director’s election, either as a lump sum or in installments over a period not to exceed fifteen years.  Payments under the Deferred Compensation Plan begin at the date specified by the director or upon cessation of service as a director.

2019 Director Compensation Table

The following table and explanatory notes provide information regarding the cash and Common Stock awarded to each non-employee director during 2019.