DEF 14A 1 nc10019817x3_def14a.htm DEF 14A

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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.  )
Filed by the Registrant ☒
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 Pursuant to §240.14a -12
OLD NATIONAL BANCORP
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
 
 
 
No fee required.
 
 
 
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
 
1)
Title of each class of securities to which transaction applies:
 
 
 
 
2)
Aggregate number of securities to which transaction applies:
 
 
 
 
3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
 
 
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Total fee paid:
 
 
 
Fee paid previously with preliminary materials.
 
 
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
1)
Amount Previously Paid:
 
 
 
 
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Form, Schedule or Registration Statement No.:
 
 
 
 
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SEC 1913 (02-02)
Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
 
 
 

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Old National Bancorp
One Main Street
Evansville, Indiana 47708

Notice of Annual Meeting of Shareholders
To Our Shareholders:
The 2021 Annual Meeting of Shareholders (the “Annual Meeting”) of Old National Bancorp (the “Company”) will be held as a virtual meeting on Thursday, April 29, 2021, at 9:00 a.m. Central Daylight Time. You will be able to attend the Annual Meeting, vote your shares, and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/ONB2021 and entering your 16-digit control number located on your proxy card. You will not be able to attend the meeting in person. The meeting will be held for the following purposes:
(1)
Election of the Company’s Board of Directors consisting of thirteen Directors to serve for one year and until the election and qualification of their successors.
(2)
Approval of Amendment to the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan.
(3)
Ratification of prior awards made under the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan.
(4)
Approval of a non-binding advisory proposal on Executive Compensation.
(5)
Ratification of the appointment of Crowe LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2021.
(6)
Transaction of such other matters as may properly come before the meeting or any adjournments and postponements thereof.
The foregoing items of business, as well as instructions for accessing the virtual annual meeting, are more fully described in the Proxy Statement accompanying this notice. Common shareholders of record at the close of business on February 22, 2021 are entitled to notice of, and to vote at, the Annual Meeting.
 
By Order of the Board of Directors
 
 
 
Jeffrey L. Knight
 
Executive Vice President,
 
Chief Legal Counsel and
 
Corporate Secretary
March 8, 2021
 
IMPORTANT
Please submit your proxy promptly by mail or by Internet. In order that there may be proper representation at the meeting, you are urged to complete, sign, date and return the proxy card in the envelope provided to you or vote by Internet, whether or not you plan to attend the meeting. No postage is required if mailed in the United States.

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Old National Bancorp
2021 Proxy Statement – Summary
The following summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all the information you should consider. You should read the entire Proxy Statement carefully before voting.
GENERAL INFORMATION
(see pages 1 through 4)
Meeting: Annual Meeting of Shareholders
Date: Thursday, April 29, 2021
Time: 9:00 a.m. Central Daylight Time
 
 
 
Location: Online at www.virtualshareholdermeeting.com/ONB2021
Record Date: February 22, 2021
 
 
 
Voting: Shareholders as of the Record Date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals being voted on.
 
 
 
Admission: To attend the 2021 annual meeting, visit www.virtualshareholdermeeting.com/ONB2021. You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, or on your proxy card or voting instruction form that accompanied your proxy materials.
PROPOSALS TO BE VOTED ON AND BOARD VOTING RECOMMENDATIONS
Proposals
Recommendation
Page Reference for more detail
Election of Directors
FOR each Director nominee
Approval of Amendment to the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan
FOR
Ratification of prior awards made under the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan
FOR
Approval of a non-binding advisory proposal on Executive Compensation
FOR
Ratification of the appointment of Crowe LLP as independent accountants for 2021
FOR
DIRECTOR NOMINEES
(see pages 17 through 23)
Name
Age
Director
Since
Occupation
Independent
Andrew E. Goebel
73
2000
Retired President & COO, Vectren Corporation
Yes
 
 
 
 
 
Jerome F. Henry, Jr.
70
2014
President, Midwest Pipe & Steel, Inc.
Yes
 
 
 
 
 
Daniel S. Hermann
63
2020
Retired CEO, AmeriQual Group, LLC
Yes
 
 
 
 
 
Ryan C. Kitchell
47
2018
Former EVP & Chief Administrative Officer, Indiana University Health
Yes
 
 
 
 
 
Phelps L. Lambert
73
1990
Managing Partner, Lambert & Lambert Real Estate Development
Yes
 
 
 
 
 
Austin M. Ramirez
42
2020
President & CEO, Husco International
Yes
 
 
 
 
 
James C. Ryan, III
49
2019
Chairman & CEO, Old National Bancorp
No
 
 
 
 
 
Thomas E. Salmon
57
2018
Chairman & CEO, Berry Global Group, Inc.
Yes
 
 
 
 
 
Randall T. Shepard
74
2012
Former Chief Justice, Indiana Supreme Court
Yes
 
 
 
 
 
Rebecca S. Skillman
70
2013
Chairman, Radius Indiana; Former Lt. Governor, State of Indiana
Yes
 
 
 
 
 
Derrick J. Stewart
43
2015
President & CEO, YMCA of Greater Indianapolis
Yes
 
 
 
 
 
Katherine E. White
54
2015
Brigadier General, U.S. Army; Professor of Law, Wayne State University Law School
Yes
 
 
 
 
 
Linda E. White
71
2008
Chief Administrative Officer, Deaconess Henderson Hospital; Executive Director, Deaconess Foundation
Yes

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2020 FINANCIAL HIGHLIGHTS
(see page 28)
In 2020, the Company delivered outstanding operating results, even in the midst of the COVID-19 pandemic. Financial highlights for 2020 include:
EPS of $1.36
Net Income of $226.4 million
ROE of 7.87%
ROA of 1.04%
Efficiency Ratio of 62.91%
Net Charge-Off (Recovery) Ratio of 0.02%
EXECUTIVE COMPENSATION
Set forth below is the 2020 compensation for each Named Executive Officer (“NEO”) as determined under Securities and Exchange Commission (“SEC”) rules. See the notes accompanying the 2020 Summary Compensation Table on page 43 for additional information.
Name and Principal Position
Salary
Non-Equity
Incentive
Plan
Compensa-
tion
Stock
Awards
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
All Other
Compensa-
tion
Total
James C. Ryan, III
Chairman and CEO
$807,692
$1,393,269
$1,424,200
$0
$83,311
$3,708,472
 
 
 
 
 
 
 
Brendon B. Falconer
Senior EVP and CFO
$424,615
$477,692
$356,050
$28
$21,608
$1,279,994
 
 
 
 
 
 
 
James A. Sandgren
President and Chief Operating Officer
$537,308
$604,472
$623,088
$3,176
$74,099
$1,842,141
 
 
 
 
 
 
 
Jeffrey L. Knight
EVP and Chief Legal Counsel
$391,577
$293,683
$267,038
$3,829
$25,468
$981,594
 
 
 
 
 
 
 
Kendra L. Vanzo
Senior EVP and Chief Administrative Officer
$341,923
$256,442
$267,038
$0
$33,368
$898,771

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Old National Bancorp
One Main Street
Evansville, Indiana 47708
Proxy Statement
For the Virtual Annual Meeting of Shareholders to be held on
April 29, 2021, at 9:00 a.m. Central Daylight Time
Virtual Meeting Site:
www.virtualshareholdermeeting.com/ONB2021
Important Notice Regarding the Availability of Proxy Materials
for the Shareholders’ Meeting to be held on April 29, 2021

The Proxy Statement and 2020 Annual Report to Shareholders are available at:
www.oldnational.com/proxy
General Information about the Annual Meeting of Shareholders and Voting
This Proxy Statement relates to the Annual Meeting of Shareholders (the “Annual Meeting”) of Old National Bancorp (the “Company” or “Old National”) to be held on April 29, 2021, at 9:00 a.m. Central Daylight Time. Due to public health concerns regarding the novel coronavirus disease (“COVID-19”) pandemic, the Company is holding the Annual Meeting in a virtual-only meeting format to support the health and well-being of our shareholders and our employees. You will not be able to attend the Annual Meeting at a physical location. These proxy materials are being furnished by the Company in connection with a solicitation of proxies by the Company’s Board of Directors (the “Board”).
We are pleased to take advantage of the Securities and Exchange Commission (“SEC”) rule that permits companies to furnish proxy materials to shareholders over the Internet. On or about March 18, 2021, we will begin mailing a Notice of Internet Availability of Proxy Materials (“Notice”) to shareholders of record as of the Record Date. The Notice will contain instructions on how to vote online, or in the alternative, request a paper copy of the proxy materials and a proxy card. By furnishing the Notice and providing access to our proxy materials by the Internet, we are lowering costs and reducing the environmental impact of our Annual Meeting.
Who can attend the Annual Meeting?
Shareholders of the Company of record as of February 22, 2021 (the “Record Date”), their authorized representatives, and guests of the Company, may attend the Annual Meeting.
Who may vote at the Annual Meeting?
These proxy materials are provided to holders of the Company’s common stock who were holders of record on the Record Date. Only the Company’s common shareholders of record on the Record Date are entitled to vote at the Annual Meeting. As of the Record Date, 165,672,380 shares of the Company’s common stock were outstanding.
As of the Record Date, to the knowledge of the Company, no person or firm, other than BlackRock, Inc., The Vanguard Group, Inc., and Dimensional Fund Advisors, LP beneficially owned more than 5% of the common stock of the Company outstanding on that date. As of the Record Date, no individual Director, nominee or officer beneficially owned more than 5% of the common stock of the Company outstanding.
How do I attend the Annual Meeting?
Due to public health concerns regarding the COVID-19 pandemic, we are holding the Annual Meeting in a virtual-only meeting format to support the health and well-being of our employees and shareholders. You will not be able to attend the Annual Meeting at a physical location. If you are a registered shareholder as of the Record Date, you may attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/ONB2021 and entering the 16-digit control number that is printed on your proxy card and Notice. If you are not a shareholder, you will be able
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to attend the meeting by visiting www.virtualshareholdermeeting.com/ONB2021 and registering as a guest. If you enter the meeting as a guest, you will not be able to vote or submit questions during the meeting. You may log in beginning at 8:45 a.m. (Central Time) on April 29, 2021. The Annual Meeting will begin promptly at 9:00 a.m. An archived copy of the webcast will also be available under the Investor Relations tab on the Company’s website at www.oldnational.com through April 29, 2022.
How do I raise questions during the Annual Meeting?
Shareholders will be able to submit questions upon accessing the virtual meeting until the conclusion of the meeting by typing the question into the “Submit a Question” field and clicking “Submit.” We will answer questions that comply with the meeting rules of conduct during the Annual Meeting, subject to time constraints. If we receive substantially similar questions, we may group such questions together. Questions relevant to meeting matters that we do not have time to answer during the Annual Meeting will be posted to our website following the meeting. Questions regarding personal matters or matters not relevant to meeting matters will not be answered.
What can I do if I need technical assistance during the Annual Meeting?
If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting log-in page.
Voting and Proxy Procedures
Each share of the Company’s common stock outstanding on the Record Date will be entitled to one vote at the Annual Meeting. If you receive the Notice by mail, you will not receive a printed copy of the proxy materials unless you request the materials by following the instructions included in the Notice.
If your shares are registered in your name, you may vote your shares via the Internet, by phone, or by completing, signing, dating and returning the requested proxy card in the postage-paid envelope provided. Simply follow the easy instructions on the proxy card or Notice provided. If your shares are held in “street name” through a broker, bank or other nominee, please follow the instructions provided by your nominee on the voting instruction form or Notice in order to vote your shares via the Internet, or by signing, dating and returning the voting instruction form provided by your nominee.
Shares of the Company’s common stock for which instructions are received will be voted in accordance with the shareholder’s instructions. If you send in your proxy card or use Internet voting, but do not specify how you want to vote your shares, the proxy holders will vote your shares FOR each of the items being proposed by the Board and in the discretion of the proxy holders as to any other business that may properly come before the Annual Meeting and any adjournment or postponement thereof.
Can I change my vote after I return the proxy card or after voting electronically?
If you are a shareholder whose shares are registered in your name, you may revoke your proxy at any time before it is voted by one of the following methods:
Submitting another proper proxy with a more recent date than that of the proxy first given by:
(1)
following the Internet voting instructions, or
(2)
completing, signing, dating and returning a proxy card to the Company’s Corporate Secretary at the Company’s main office.
Sending written notice of revocation to the Company’s Corporate Secretary.
Voting your shares online at the Annual Meeting.
If you hold your shares in “street name” through a broker, you may revoke your proxy by following instructions provided by your broker. No notice of revocation or later-dated proxy will be effective until received by the Company’s Corporate Secretary at or prior to the Annual Meeting.
How many votes are needed to have each of the proposals pass?
Election of Directors. Directors are elected by a plurality of the votes cast by shareholders entitled to vote, which means that nominees who receive the greatest number of votes will be elected, even if such amount is less than a majority of the votes cast. Shareholders are not able to cumulate their votes in the election of Directors.
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Our Board has adopted a corporate governance policy regarding Director elections that is contained in our Corporate Governance Guidelines. The policy provides that in any uncontested election, any nominee for Director who receives a greater number of votes “withheld” for his or her election than votes “for” such election will tender his or her resignation as a Director promptly following the certification of the shareholder vote. The Corporate Governance and Nominating Committee, without participation by any Director so tendering his or her resignation, will consider the resignation offer and recommend to the Board whether to accept it. The Board, without participation by any Director so tendering his or her resignation, will act on the Corporate Governance and Nominating Committee’s recommendation no later than 90 days following the date of the Annual Meeting at which the election occurred. If the Board decides to accept the Director’s resignation, the Corporate Governance and Nominating Committee will recommend to the Board whether to fill the resulting vacancy or to reduce the size of the Board. We will promptly disclose the Board’s decision and the reasons for the decision in a broadly disseminated press release that will also be furnished to the SEC on Form 8-K.
Approval of Amendment to the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan. The approval of Amendment to the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan (Amended and Restated as of May 10, 2012, and further Amended and Restated as of April 27, 2017) requires the affirmative vote of the holders of a majority of shares present or representd by proxy. Abstentions will have the same effect as votes against the proposal. Broker non-votes will have no effect on the outcome of the proposal.
Ratification of prior awards made under the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan. The ratification of the awards made under the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan (Amended and Restated as of May 10, 2012, and further Amended and Restated as of April 27, 2017) requires the affirmative vote of the holders of a majority of shares present or represented by proxy. Abstentions will have the same effect as votes against the proposal. Broker non-votes will have no effect on the outcome of the proposal.
Approval of Non-Binding Advisory Proposal on Executive Compensation. The advisory vote on executive compensation will be determined by the affirmative vote of the holders of a majority of shares present or represented by proxy. Abstentions will have the same effect as votes against the proposal. Broker non-votes will have no effect on the outcome of the proposal. Because the vote is advisory, it will not be binding on the Board. The Board will review the voting results and take the results into consideration when making future decisions regarding executive compensation.
Ratification of Independent Registered Public Accounting Firm. The affirmative vote of a majority of the shares present in person or represented by proxy is required for ratification of the appointment of Crowe LLP as the independent registered public accounting firm of the Company for fiscal year 2021. Abstentions will have the same effect as votes against the proposal. Broker non-votes are not expected to result from this proposal.
What is “householding”?
We have adopted a procedure called “householding,” which has been approved by the SEC. Under this procedure, a single copy of the annual report and proxy statement will be sent to any household at which two or more shareholders reside if they appear to be members of the same family, unless one of the shareholders at that address notifies us that they wish to receive individual copies. This procedure reduces our printing costs and mailing fees.
Shareholders who participate in householding will continue to receive separate proxy cards.
Householding will not affect dividend check mailings in any way.
If your household received a single Notice of Annual Meeting of Stockholders or, if applicable, a single set of proxy materials this year, but you would prefer to receive your own copy, please contact Broadridge Householding Department, by calling their toll free number, 1-866-540-7095 or by writing to: Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. You will be removed from the householding program within 30 days of receipt of your instructions at which time you will then be sent separate copies of the documents.
Shareholders sharing an address who are receiving multiple copies of the annual report and proxy statement may request a single copy by contacting the Company’s Transfer Agent, Continental Stock Transfer & Trust Company, at 917-262-2373, at 1 State Street, New York, New York 10004-1561, or via email to proxy@continentalstock.com.
A number of brokerage firms have instituted householding. If you hold your shares in “street name,” please contact your bank, broker, or other holder of record to request information about householding.
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How are abstentions and broker non-votes treated?
An abstention from voting on a matter by a shareholder present at the Annual Meeting or represented by proxy at the Annual Meeting will not affect the outcome of the election of directors. Abstentions will have the same effect as a vote against each of the other proposals to be voted on at the Annual Meeting.
If your shares are held in “street name” and you do not give your broker voting instructions, your broker will have discretion to vote your shares only for the proposal to ratify the appointment of the independent registered public accounting firm. For each of the other proposals to be voted on at the Annual Meeting, the votes associated with shares held in “street name” for which you do not give your broker voting instructions will be considered “broker non-votes,” which means your broker will not have discretion to vote your shares on those matters. Broker non-votes will not affect the outcome of the election of directors or the advisory vote on executive compensation. With respect to the approval of Amendment to the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan, the ratification of prior awards under the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan, and the non-binding advisory vote on Executive Compensation, abstentions will have the same effect as a vote against the proposal, but broker non-votes will not be deemed to be votes cast and will have no effect on the outcome. The proposal to ratify the appointment of our auditors is considered a routine matter and, therefore, broker non-votes are not expected to exist on this proposal.
How do I designate my proxy?
If you wish to give your proxy to someone other than the proxies identified on the proxy card, you may do so by crossing out all the names of the proxy members appearing on the proxy card and inserting the name of another person. The signed card must be sent by mail to the Company’s Corporate Secretary and received in advance of the Annual Meeting.
Who will pay for the costs involved in the solicitation of proxies?
The Company will pay all costs of preparing, assembling, printing and distributing the proxy materials. In addition to solicitations by mail, Directors and Officers of the Company and its subsidiaries may solicit proxies personally, by telephone, telefax, electronic mail or in person, but such persons will not be specially compensated for their services.
We will, upon request, reimburse brokerage firms and others for their reasonable expenses incurred for forwarding solicitation material to beneficial owners of our stock.
Other Matters Related to the Meeting
Only matters brought before the Annual Meeting in accordance with the Company’s Amended and Restated By-Laws (the “By-Laws”) will be considered. Aside from the items listed above in the Notice of Annual Meeting, the Company does not know of any other matters that will be presented at the Annual Meeting. However, if any other matters properly come before the Annual Meeting or any adjournment, the proxy holders will vote them in accordance with their best judgment.
Should any nominee for Director become unable or unwilling to accept nomination or election, the proxy holders intend to vote for the election of another person recommended by the Corporate Governance and Nominating Committee and nominated by the Board. The Company has no reason to believe that any of the nominees will be unable or unwilling to serve if elected to office.
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Section I – Corporate Governance at Old National Bancorp
Report of the Corporate Governance and
Nominating Committee and Other Board Matters
The Corporate Governance and Nominating Committee (“Governance Committee”) is primarily responsible for corporate governance matters affecting the Company and its subsidiaries. The Governance Committee operates under a written charter which conforms to the requirements of the SEC and the NASDAQ.
Board Leadership Structure and Function
The Board, which is elected by the shareholders, selects the Operating Group, which is the executive management team charged with the conduct of the Company’s business. Having selected the Operating Group, the Board acts as an advisor and counselor to management and ultimately monitors its performance. The Board has the responsibility for overseeing the affairs of the Company and, thus, an obligation to keep informed about the Company’s business. This involvement enables the Board to provide guidance to management in formulating and developing plans and to exercise its decision-making authority on appropriate matters of importance to the Company. Acting as a full Board and through the Board’s seven standing committees (the “Committees”), the Board oversees and approves the Company’s strategic plan. The Board regularly reviews the Company’s progress against its strategic plan and exercises oversight and decision-making authority regarding strategic areas of importance to the Company.
The Company’s Corporate Governance Guidelines provide for an independent Lead Director, currently Rebecca S. Skillman, who presides at all meetings of the Board at which the Chairman is not present; leads executive sessions of the Board; consults and meets with any or all outside Directors as required and represents such Directors in discussions with management of the Company on corporate governance issues and other matters; ensures that the Board, committees of the Board, individual Directors and management of the Company understand and discharge their duties and obligations under the Company’s system of corporate governance; mentors and counsels new members of the Board to assist them in becoming active and effective Directors; leads the Board in the annual evaluation of the Chairman and Chief Executive Officer’s (“CEO”) performance; acts in an advisory capacity to the Chairman and CEO in all matters concerning the interests of the Board and relationships between management and the Board; and performs such other duties and responsibilities as may be delegated to the Lead Director by the Board from time to time.
The Board believes that it is in the best interests of the Company to have James C. Ryan, III serve as Chairman of the Board as well as CEO. The Board believes the current governance structure is working effectively, especially in light of the fact that the Company has a strong independent Lead Director. The Board will annually review the effectiveness of this arrangement and believes this structure is in the best interest of shareholders and serves the Company well at this time.
Executive sessions, or meetings of outside Directors without management present, are held at regular intervals for both the Board and the Committees. Ms. Skillman, the current Lead Director of the Board, chaired the executive sessions of the Board in 2020. The Board meets in executive session a minimum of four times each year.
The Board met five times during 2020. Each Director attended 75% or more of Board meetings and meetings of Committees on which he or she served in 2020. Directors as a group attended an average of 99.58% of the Board meetings and meetings of Committees on which they served in 2020.
Governance Committee Scope of Responsibilities
The Governance Committee has responsibility for recruiting and nominating new Directors, assessing the independence of Directors, leading the Board in its annual performance evaluation, reviewing and assessing the adequacy of the Corporate Governance Guidelines and retaining outside advisors as needed to assist and advise the Board with respect to legal and other matters. The Governance Committee is also responsible for reviewing with the full Board, on an annual basis, the requisite skills and characteristics of Board members as well as the composition of the Board as a whole. Additionally, the Governance Committee has responsibility for overseeing the preparation and publication of the Company’s environmental, social, and governance (“ESG”) report.
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CEO Succession Planning
Among the Governance Committee’s responsibilities as described in its charter is to oversee CEO succession planning and leadership development for potential CEO candidates. The Board plans for succession of the CEO and annually reviews the succession strategy for an “unplanned” and “planned” event. As part of this process, the independent Directors annually review the Governance Committee’s recommended candidates for consideration as the CEO under either a planned or unplanned scenario. The criteria used when assessing the qualifications of potential CEO successors include certain leadership, management and personal behaviors. The leadership behaviors include the ability to attract and develop talent, drive and execution, empowering others, shaping strategy and leading change. The management behaviors include communication and climate setting, establishing plans and priorities, managing and improving processes and performance monitoring and management. The personal behaviors important to the Governance Committee in evaluating potential CEO candidates include the following: embodies the values that make the Company’s culture distinctive; acts with honor and character; makes and maintains personal relationships with associates, clients and shareholders; demonstrates courage and serves as a champion of the Company’s culture. The individual must also possess the skill and talent to lead the organization in a positive manner with wisdom, enthusiasm and humility.
Attendance at Annual Meetings
The Company has not established a formal policy regarding Director attendance at its Annual Meeting, but it encourages all Directors to attend these meetings and reimburses expenses associated with attendance. The Chairman presides at the Annual Meeting. All the Directors attended the Annual Meeting in 2020.
Code of Conduct and Code of Ethics
The Board has adopted a Code of Business Conduct and Ethics that sets forth important Company policies and procedures in conducting our business in a legal, ethical and responsible manner. These standards are applicable to all our Directors and employees, including the Company’s CEO, CFO and Controller. In addition, the Board has adopted the Code of Ethics for CEO and Senior Financial Officers that supplements the Code of Business Conduct and Ethics by providing more specific requirements and guidance on certain topics. The Code of Ethics for CEO and Senior Financial Officers applies to the Company’s CEO, CFO and Controller. The Code of Business Conduct and Ethics and the Code of Ethics for CEO and Senior Financial Officers are available on our website at www.oldnational.com. We will post any material amendments to, or waivers from, our Code of Business Conduct and Ethics and Code of Ethics for Senior Financial Officers on our website within two days following the date of such amendment or waiver.
Employees are required to report any conduct they believe in good faith to be an actual or apparent violation of our Codes of Conduct. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee has established confidential procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.
The Code of Business Conduct and Ethics addresses, among other things, the following topics: responsibilities of every Old National associate; seeking answers and reporting violations; making ethical decisions; civility and respect for one another; preventing discrimination and harassment; preventing substance abuse and violence; protecting confidential information; guidelines for protecting private information; using company assets responsibly; reporting accurately and honestly; engaging in political activities; working with media; ethical handling of personal transactions; preventing conflicts of interest; serving on for-profit and non-profit boards; ethical handling of gifts, meals and entertainment; preventing fraud; prohibiting insider trading; competing fairly; and earning incentives.
Corporate Governance Guidelines
The Board has adopted the Corporate Governance Guidelines that, along with the Company’s corporate charter, By-Laws and charters of the various committees of the Board, provide the foundation for the Company’s governance. Among other things, our Corporate Governance Guidelines set forth the:
minimum qualifications for Directors;
diversity and skills objectives for Directors;
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independence standards for Directors;
responsibilities of Directors;
majority voting policy applicable to Director elections;
committees of the Board;
considerations for Director tenure and Board refreshment;
procedures for committee rotations;
Directors’ compensation and expense reimbursement;
procedures for Director orientation and development;
procedures for an annual review of the CEO and management succession planning;
stock ownership guidelines for executives and Directors;
bonus recoupment or “clawback” policy;
procedures for an annual self-evaluation of the Board; and
content of the Company’s Code of Business Conduct and Ethics.
Communications from Shareholders to Directors
The Board believes that it is important that a direct and open line of communication exist between the Board and the Company’s shareholders and other interested parties. Consequently, the Board has adopted the procedures described in the following paragraph for communications to Directors.
Any shareholder or other interested party who desires to contact Old National’s Chairman or the other members of the Board may do so by writing to: Board of Directors, c/o Corporate Secretary, Old National Bancorp, P.O. Box 718, Evansville, IN 47705-0718. Communications received are distributed to the Lead Director or other members of the Board, as appropriate, depending on the facts and circumstances outlined in the communication received. For example, if any complaints regarding accounting, internal accounting controls and auditing matters are received, then the Corporate Secretary will forward them to the Chairman of the Audit Committee for review.
Policy Regarding Consideration of Director Candidates Recommended by Shareholders
The Company’s nomination procedures for Directors are governed by its By-Laws. Each year the Governance Committee makes a recommendation to the entire Board regarding nominees for election as Directors. The Governance Committee will review suggestions from shareholders regarding nominees for election as Directors. All such suggestions from shareholders must be submitted in writing to the Governance Committee at the Company’s principal executive office not less than 120 days in advance of the date of the annual or special meeting of shareholders at which Directors are to be elected. All written suggestions of shareholders must set forth:
the name and address of the shareholder making the suggestion;
the number and class of shares owned by such shareholder;
the name, address and age of the suggested nominee for election as Director;
the nominee’s principal occupation during the five years preceding the date of suggestion;
all other information concerning the nominee as would be required to be included in the proxy statement used to solicit proxies for the election of the suggested nominee; and
such other information as the Governance Committee may reasonably request.
Consent of the suggested nominee to serve as a Director of the Company, if elected, must also be included with the written suggestion.
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Director Selection and Qualifications
In seeking individuals to serve as Directors, the Governance Committee seeks members from diverse professional backgrounds who combine a broad spectrum of experience and expertise. Directors should have an active interest in the business of the Company, possess a willingness to represent the best interests of all shareholders, be able to objectively appraise management’s performance, possess the highest personal and professional ethics, integrity and values, and be able to comprehend and advise management on complicated issues that face the Company and Board. In addition, such nominees should not have any interest that would materially impair their ability to exercise independent judgment, or otherwise discharge the fiduciary duties owed as a Director to the Company and its shareholders.
Directors should also demonstrate achievement in one or more fields of business or professional, governmental, communal, scientific or educational endeavors. Directors are expected to have sound judgment, borne of management or policy making experience that demonstrates an ability to function effectively in an oversight role. In addition, Directors should have a general appreciation regarding major issues facing public companies of a size and operational scope similar to that of the Company. These issues include contemporary governance concerns, regulatory obligations of an SEC reporting financial holding company, strategic business planning and basic concepts of corporate finance. These same standards apply whether a nominee is recommended by the Governance Committee or suggested by a shareholder.
Director Diversity Objectives
The Governance Committee believes that a diverse Board leads to better decisions and outcomes for our shareholders, employees, customers, and communities. In addition to the background, skills and experience considerations highlighted above, the Governance Committee evaluates potential directors for demographic, gender, racial and ethnic diversity. The Company’s Corporate Governance Guidelines require the Company to have no less than two (2) female Directors and at least one (1) Director from an ethnic minority background on the Board at all times. In addition, any third party engaged to assist the Governance Committee in searching for director candidates is requested to present a diverse slate of candidates.
The Governance Committee is responsible for regularly reviewing Board composition, succession planning, talent development, and the broader aspects of diversity. The Board also annually reviews the requisite skills and characteristics of Board members as well as the composition of the Board as a whole. The annual assessment includes a review of the skills, experience and diversity of the Board in the context of the needs of the Board.
Determination with Respect to the Independence of Directors
It is the policy of the Board that a majority of its members be independent from management, and the Board has adopted Director Independence Standards that meet the listing standards of the NASDAQ. The Independence Standards are incorporated in our Corporate Governance Guidelines which can be viewed under the Investor Relations/Corporate Governance link on the Company’s website at www.oldnational.com.
In accordance with our Corporate Governance Guidelines, the Board undertook its annual review of Director independence. During this review, the Board considered any and all commercial and charitable relationships of Directors, including transactions and relationships between each Director or any member of his or her immediate family and the Company and its subsidiaries. Following the review, the Board affirmatively determined, by applying the Director Independence Standards contained in the Corporate Governance Guidelines, that each of our Directors nominated for election at this Annual Meeting is independent of the Company and its management in that none has a direct or indirect material relationship with the Company, with the exception of James C. Ryan, III, Chairman and CEO.
The independent Directors of the Company are Andrew E. Goebel, Jerome F. Henry, Jr., Daniel S. Hermann, Ryan C. Kitchell, Phelps L. Lambert, Austin M. Ramirez, Thomas E. Salmon, Randall T. Shepard, Rebecca S. Skillman, Derrick J. Stewart, Katherine E. White and Linda E. White. Chairman and CEO James C. Ryan, III is currently the only non-independent Director.
In addition, all members of the Audit Committee, the Talent Development and Compensation Committee and the Governance Committee satisfy the standards of independence applicable to members of such committees established under applicable law, the listing requirements of the NASDAQ and the Director Independence Standards set forth in the Company’s Corporate Governance Guidelines.
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Determination with respect to Director Qualifications
Members of the Board must possess certain basic personal and professional qualities in order to properly discharge their fiduciary duties to shareholders, provide effective oversight of the management of the Company and monitor the Company’s adherence to principles of sound corporate governance. In seeking individuals to serve as Directors, the Governance Committee seeks members from diverse professional backgrounds who combine a broad spectrum of experience and expertise. The Governance Committee has determined that all Directors of the Company have an active interest in the business of the Company and possess a willingness to represent the best interests of all shareholders without favoring or advancing any particular shareholder or other constituency of the Company. In addition, the Governance Committee has determined that all Directors are able to objectively appraise management’s performance, possess the highest personal and professional ethics, integrity and values, and are able to comprehend and advise management on complicated issues that face the Company and Board.
In addition to the general skills stated above, the Governance Committee has determined that no Directors have any interests that would materially impair their ability to exercise independent judgment, or otherwise discharge the fiduciary duties owed as a Director to the Company and its shareholders. As stated on pages 17 through 23, our Directors and nominees have demonstrated significant achievement and generally have significant management experience in one or more fields of business, professional, governmental, communal, and educational endeavors. We believe that our Directors’ extensive management or policy-making experience provides them with the skills and judgment necessary to function effectively in an oversight role. Given the tenure of most of the Directors on our Board, they have a general appreciation regarding major issues facing public companies.
Committees of our Board
The members of the Company’s Board are elected to various committees. The standing committees of the Board include an Audit Committee; a Talent Development and Compensation Committee; a Corporate Governance and Nominating Committee; a Funds Management Committee; an Enterprise Risk Committee; a Culture, Community and Social Responsibility Committee; and a Finance and Corporate Development Committee. The charters for each committee are posted on our website at www.oldnational.com. The charters are reviewed annually and include information regarding each committee’s composition, purpose, and responsibilities.
The key responsibilities, current membership, and number of meetings held in 2020 for each committee are set forth below:
Committee
Key Responsibilities
Committee
Members
Number of
Meetings
Held in
2020
Audit
– Assists the Board in its oversight of:
Ryan C. Kitchell*† Jerome F. Henry, Jr. Daniel S. Hermann † Phelps L. Lambert
9
the integrity of the financial statements of the Company
the independent auditor’s qualifications and independence
the Company’s system of internal controls
the performance of the Company’s internal audit function and independent auditors
the compliance by the Company with legal and regulatory requirements in relation to the accuracy of financial reporting
– Is responsible for the preparation of a report as required by the SEC to be included in this Proxy Statement
 
 
 
 
 
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Committee
Key Responsibilities
Committee
Members
Number of
Meetings
Held in
2020
Talent Development and Compensation
– Approves and evaluates the Company’s employee compensation and benefit programs and ensures the competitiveness of those programs
Derrick J. Stewart*
Daniel S. Hermann
Thomas E. Salmon
Randall T. Shepard
Rebecca S. Skillman
5
– Advises the Board regarding the talent development and succession management of key executives of the Company
– Annually reviews, approves, and recommends to the Board for its approval all elements of the compensation of the CEO and other executive officers who report directly to the CEO
– Determines awards to employees of stock or stock options pursuant to the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan
 
 
 
 
 
Corporate Governance and Nominating
– Recruits and nominates new Directors and assesses the independence of Directors
Rebecca S. Skillman*
Phelps L. Lambert
Austin M. Ramirez
Randall T. Shepard
Katherine E. White
4
– Leads the Board in its annual performance evaluation
– Reviews and assesses the adequacy of the Corporate Governance Guidelines
– Reviews with the full Board, on an annual basis, the requisite skills and characteristics of Board members as well as the composition of the Board as a whole
– Oversees the production of the Company’s environmental, social, and governance (“ESG”) report
 
 
 
 
 
Enterprise Risk
– Oversees the Company’s policies, procedures and practices relating to credit, operational, fraud, information technology/cyber and compliance risk
Linda E. White*
Andrew E. Goebel
Daniel S. Hermann
Katherine E. White
4
 
 
 
 
 
Culture, Community and Social Responsibility
– Reviews the Company’s compliance with the Community Reinvestment Act and Fair Lending Practices
Randall T. Shepard*
Austin M. Ramirez
Derrick J. Stewart
Linda E. White
4
– Oversees diversity, equity, and inclusion initiatives and monitors the Company’s Affirmative Action Plan
– Oversees the Company’s environmental and sustainability efforts
– Monitors the activities of the Old National Bank Foundation through which major charitable gifts from the Company are funded
 
 
 
 
 
Funds Management
– Monitors the balance sheet risk profile of the Company, including credit, interest rate, liquidity, and capital risks
Phelps L. Lambert*
Andrew E. Goebel
Jerome F. Henry, Jr.
Ryan C. Kitchell
Katherine E. White
4
– Reviews and approves the investment policy for the Company
 
 
 
 
 
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Committee
Key Responsibilities
Committee
Members
Number of
Meetings
Held in
2020
Finance and Corporate Development
– Reviews management’s financial forecasts, goals, and budget
Andrew E. Goebel*
Daniel S. Hermann
Ryan C. Kitchell
Phelps L. Lambert
Rebecca S. Skillman
Derrick J. Stewart
Linda E. White
5
– Monitors and provides appropriate feedback concerning the financial performance of the Company
​– Oversees merger and acquisition activity as well as other strategic corporate development opportunities of the Company
*
Chair

Designated as an “audit committee financial expert”
2020 Work of the Governance Committee
During the year, the Governance Committee evaluated each Board member’s committee assignments in light of the applicable qualification requirements, including additional independence requirements of certain committees. Based upon this evaluation, the Governance Committee recommended changes to the Company’s committee composition and leadership. The Governance Committee recommended that Andrew E. Goebel be appointed as Chairperson of the Finance and Corporate Development Committee. Mr. Goebel’s experience as Chief Financial Officer and as President and Chief Operating Officer of a public company over a period of 14 years and his service as Chairperson of the Audit Committee for 17 years (with total service on the Audit Committee of 18 years) provided him with the unique qualifications to lead the Finance and Corporate Development Committee. Mr. Ryan C. Kitchell, who joined the Board in 2018 and qualifies as an Audit Committee Financial Expert, was appointed as Chairperson of the Audit Committee. The Governance Committee believed that Mr. Kitchell’s experience in business and degrees in economics and business qualified him to lead the Audit Committee. These were the only changes made in 2020 to committee composition and leadership.
As required by the Governance Committee’s Charter, which is posted on the Company’s website at www.oldnational.com, the Governance Committee conducted an annual review of the Corporate Governance Guidelines applicable to the full Board. Based on this review, the Company adopted diversity objectives for its Board of Directors. These diversity objectives, as set forth in the Company’s Corporate Governance Guidelines, require the Company to have no less than two (2) female Directors and at least one (1) Director from an ethnic minority background on the Board at all times. In addition, the diversity objectives require women and minorities be included in the initial pool of candidates when selecting new director nominees. The current Corporate Governance Guidelines are posted on the Company’s website at www.oldnational.com.
At its January 30, 2020 meeting, the Chair of the Governance Committee and Lead Director administered the annual Board performance evaluation process pursuant to which the Board reviews its performance. The Board also reviewed the independence of Board members and determined that all the members of the Board were independent, with the exception of James C. Ryan, III who became CEO and a Board member on May 2, 2019 and Chairman on January 30, 2020.
The Governance Committee continued its work in 2020 to oversee the CEO succession planning and the leadership development process for potential internal CEO candidates and continued to use Russell Reynolds Associates to assist in the development of candidates.
The Governance Committee also continued its work in 2020 to evaluate potential director candidates within the Company’s footprint.
In 2020, the Committee also reviewed and approved Charter revisions for the Culture, Community and Social Responsibility Committee, the Audit Committee, the Talent Development and Compensation Committee and the Enterprise Risk Committee.
In addition to the Charter work, the Governance Committee updated and approved a revised Code of Business Conduct and Ethics and approved amendments to the Company’s Articles of Incorporation which allows for shareholders to amend the Company’s By-Laws.
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The Governance Committee also approved changes to the By-Laws of the Company allowing shareholders to amend the By-Laws, permitting use of an electronic seal and permitting the Company to conduct shareholder meetings by means of remote communication.
At the January 30, 2020 meeting of the Board, the Directors voted to make changes to the annual retainer for Board members and changes to the Committee chair and Committee member retainers in order to align director compensation more competitively to the 50th percentile of peers. These changes were reported in the Proxy Statement for the Annual Meeting held on April 30, 2020. This action was taken to align director compensation with shareholder interests and to align the Company’s director compensation with peer group practices. The details of director compensation are reported on page 13 of this Proxy Statement.
Environmental, Social and Governance
Environmental, social and governance considerations, and other elements of corporate social responsibility, are integrated and embedded within the policies, procedures and principles that govern the Company. Our Company is committed to strengthening the communities we serve through associate volunteerism, corporate philanthropy as well as environmental responsibility and sustainability, serving as a cornerstone of the local community, and maintaining transparency in governance. Led by the Corporate Governance and Nominating Committee, the Company is proud to present the 2020 ESG Report which summarizes the Company’s approach to corporate social responsibility. The full report can be found on our website at www.oldnational.com/esg.
Availability of Corporate Governance Documents
The Company’s Corporate Governance Guidelines (including the Director Independence Standards), Board committee charters for the Audit Committee, Governance Committee, and the Talent Development and Compensation Committee, as well as the Code of Business Conduct and Ethics, and the Code of Ethics for CEO and Senior Financial Officers can be viewed under the Investor Relations/Corporate Governance link on the Company’s website at www.oldnational.com. These documents, as well as charters for all the Company’s Board committees, are available in print to any interested party who requests them by writing to: Corporate Secretary, Old National Bancorp, P.O. Box 718, Evansville, IN 47705-0718.
Risk Oversight
The entire Board is involved in overseeing risk associated with the Company. The charters of certain committees of the Board assign oversight responsibility for particular areas of risk. The Board and its committees monitor risks associated with their respective principal areas of focus through regular meetings with management and representatives of outside advisors.
The following is a summary of oversight responsibility for particular areas of risk:
Audit Committee. Risks and exposures associated with accounting, financial reporting, tax and maintaining effective internal controls for financial reporting.
Enterprise Risk Committee. Credit, regulatory, operational, cybersecurity, enterprise and reputational risks, as well as litigation that may present material risk to the Company.
Governance Committee. Risks associated with CEO succession planning, as well as corporate governance, including compliance with listing standards, committee assignments, conflicts of interest and director succession planning.
Funds Management Committee. Liquidity, capital and interest rate risks.
Talent Development and Compensation Committee. Risks associated with the Company’s compensation programs and arrangements, including cash and equity incentive plans.
Culture, Community and Social Responsibility Committee. Risks associated with associate and customer commitment, the Community Reinvestment Act, fair lending, associate and supplier diversity and the Company’s Affirmative Action Plan.
Finance and Corporate Development Committee. Budgeting and forecasting oversight, management of budget risks and oversight of strategic acquisition opportunities of the Company.
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Section II – Director Compensation and Election of Directors
Director Compensation Overview
The Governance Committee annually reviews and recommends the compensation for our non-employee Directors. No fees are paid to Directors who are also employees of the Company. As a starting point for its recommendations, the Governance Committee uses the peer group compensation data prepared for the Compensation Committee by the compensation consultant. The Committee seeks to establish Board compensation that is competitive with the market practices within the Company’s Peer Group and geographic footprint.
Retainers
For 2020, we paid each outside Director an annual retainer of $105,000 for serving as a Director. Of this amount, we paid $45,000 in cash and $60,000 in the form of our stock. We paid the cash compensation in four equal quarterly payments and the stock retainer was paid in two equal installments in May and November. In addition, the Lead Director of the Board was paid an additional $25,000 retainer for her duties as Lead Director.
For 2020, we paid the Audit Committee Chairman an additional retainer of $17,500, the Talent Development and Compensation Committee Chairman an additional $14,500, and all other committee chairpersons an additional retainer of $12,500. In 2020, committee members of the Audit Committee received an additional retainer of $10,000. Committee members of the Talent Development and Compensation Committee and the Enterprise Risk Committee received retainers of $8,500 and all other committee members received retainers of $7,500. James C. Ryan, III, Chairman and CEO, is the only Director on the Board who is also an employee of the Company and he receives no compensation for his directorship.
Deferred Compensation Plan
We maintain a nonqualified deferred compensation plan, known as the “Directors’ Deferred Compensation Plan,” for our non-employee Directors. A Director may defer 25%, 50%, 75%, or 100% of his or her cash compensation pursuant to the plan. We credit a Director’s plan account with earnings based on the hypothetical earnings of an investment fund consisting of Company stock, the return on a recognized market index selected by the Talent Development and Compensation Committee, or a combination of the two, as elected by the Director. For the market index fund, we use a Bloomberg index, which approximates the risk and return associated with a diversified high-quality corporate bond fund.
All amounts paid under the plan are paid from our general assets and are subject to the claims of our creditors. In most circumstances, deferred amounts are not distributed to the Director until after termination of his or her service. In general, the Director may elect to receive his or her plan benefits in a lump sum or in annual installments over two to ten years.
The following table shows all outside Director compensation paid for 2020.
2020 Director Compensation
Name
Fees
Earned or
Paid in
Cash ($)
Stock
Awards(1)
($)
Change in Pension Value
and Nonqualified Deferred
Compensation Earnings(2)
($)
Total
($)
(a)
(b)
(c)
(f)
(h)
Rebecca S. Skillman, Lead Director
98,500(3)
59,989
 
158,489
Alan W. Braun
18,375(4)
19,994
 
38,369
Andrew E. Goebel
76,625(5)
59,989
 
136,614
Jerome F. Henry, Jr.
62,500(6)
59,989
 
122,489
Daniel S. Hermann
59,625(7)
39,981
 
99,606
Ryan C. Kitchell
73,750(8)
59,989
16,277
150,016
Phelps L. Lambert
82,500(9)
59,989
(26,903)
115,586
Austin M. Ramirez
45,000(10)
39,981
 
84,981
Thomas E. Salmon
53,500(11)
59,989
10,672
124,161
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Name
Fees
Earned or
Paid in
Cash ($)
Stock
Awards(1)
($)
Change in Pension Value
and Nonqualified Deferred
Compensation Earnings(2)
($)
Total
($)
(a)
(b)
(c)
(f)
(h)
Randall T. Shepard
73,500(12)
59,989
 
133,489
Derrick J. Stewart
74,500(13)
59,989
5,419
139,908
Katherine E. White
70,000(14)
59,989
(12,497)
117,492
Linda E. White
72,500(15)
59,989
(63,811)
68,678
(1)
On May 8, 2020, Andrew E. Goebel, Jerome F. Henry, Jr., Ryan C. Kitchell, Phelps L. Lambert, Thomas E. Salmon, Randall T. Shepard, Rebecca S. Skillman, Derrick J. Stewart, Katherine E. White and Linda E. White each received 2,117 shares of Company stock at a stock price of $14.17 per share with a Grant Date Fair Value of $29,997.89, Alan W. Braun received 1,411 shares of Company stock at a stock price of $14.17 per share with a Grant Date Fair Value of $19,993.87, and Daniel S. Hermann and Austin M. Ramirez received 705 shares of Company stock at a stock price of $14.17 per share with a Grant Date Fair Value of $9,989.85. On November 8, 2020, Andrew E. Goebel, Jerome F. Henry, Jr., Daniel S. Hermann, Ryan C. Kitchell, Phelps L. Lambert, Austin M. Ramirez, Thomas E. Salmon, Randall T. Shepard, Rebecca S. Skillman, Derrick J. Stewart, Katherine E. White and Linda E. White each received 2,153 shares of Company stock at a stock price of $13.93 with a Grant Date Fair Value of $29,991.29.
(2)
The amounts specified in Column (f) are attributable entirely to earnings credits under our Directors Deferred Compensation Plan in excess of the applicable federal long-term rate, with compounding (as described by Section 1274(d) of the Internal Revenue Code).
(3)
Includes $45,000 cash retainer, $12,500 Governance Committee Chair retainer, $8,500 Talent Development and Compensation Committee member retainer, $7,500 retainer for membership on the Finance and Corporate Development Committee, and a $25,000 retainer for serving as Lead Director.
(4)
Includes $11,250 cash retainer, $3,125 Finance and Corporate Development Committee Chair retainer and $4,000 retainer for membership on the Enterprise Risk Committee and Funds Management Committee. Mr. Braun retired from the Board on April 30, 2020.
(5)
Includes $45,000 cash retainer, $4,375 Audit Committee Chair retainer, $3,125 Finance and Corporate Development Committee Chair retainer and $24,125 retainer for membership on the Enterprise Risk Committee and Funds Management Committee.
(6)
Includes $45,000 cash retainer, $10,000 for Audit Committee membership, and $7,500 for Funds Management Committee membership.
(7)
Includes $33,750 cash retainer, $7,500 for Audit Committee membership, $6,375 retainer for membership on the Talent Development and Compensation Committee and $12,000 for Enterprise Risk Committee and Finance and Corporate Development Committee membership.
(8)
Includes $45,000 cash retainer, $15,625 retainer for Audit Committee Chair and membership, and $13,125 retainer for membership on the Finance and Corporate Development Committee and the Funds Management Committee.
(9)
Includes $45,000 cash retainer, $12,500 Funds Management Committee Chair retainer, $10,000 retainer for membership on the Audit Committee and $15,000 retainer for membership on the Governance Committee and the Finance and Corporate Development Committee.
(10)
Includes $33,750 cash retainer and $11,250 retainer for membership on the Governance Committee and the Culture, Community & Social Responsibility Committee.
(11)
Includes $45,000 cash retainer and $8,500 retainer for membership on the Talent Development and Compensation Committee.
(12)
Includes $45,000 cash retainer, $12,500 Culture, Community & Social Responsibility Committee Chair retainer, $8,500 Talent Development and Compensation Committee member retainer and $7,500 for membership on the Corporate Governance Committee.
(13)
Includes $45,000 cash retainer, $14,500 Talent Development and Compensation Committee Chair retainer, and $15,000 retainer for membership on the Culture, Community & Social Responsibility Committee and the Finance and Corporate Development Committee.
(14)
Includes $45,000 cash retainer and $25,000 retainer for membership on Enterprise Risk Committee, the Funds Management Committee and the Governance Committee.
(15)
Includes $45,000 cash retainer, $12,500 Enterprise Risk Committee Chair retainer, and $15,000 retainer for membership on the Culture, Community & Social Responsibility Committee and the Finance and Corporate Development Committee.
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Election of Directors
(Item 1 on Proxy Card)
The first item to be acted upon at the Annual Meeting is the election of thirteen Directors to the Board of the Company. Each of the persons elected will serve a term of one year and until the election and qualification of his or her successor.
If any Director nominee named in this Proxy Statement shall become unable or decline to serve (an event which the Board does not anticipate), the persons named as proxy holders will have discretionary authority to vote for a substitute nominee named by the Board if the Board determines to fill such nominee’s position. Unless authorization is withheld, the proxy, when properly validated, will be voted “FOR” the election as Directors of all the nominees listed in this proxy statement.
Board Overview
The Corporate Governance & Nominating Committee is responsible for evaluating potential candidates for Board membership. In its evaluation process, and to ensure that the Board benefits from diverse perspectives, the Governance Committee considers such factors as the experience, perspective, background, skill set, race, ethnicity and gender makeup of the current Board as well as the candidate’s individual qualities in leadership, character, judgment and ethical standards
Board Composition
The By-Laws of the Company currently provide for the Board to be comprised of thirteen Directors. The Board currently consists of thirteen Directors. All of the Company’s Directors, other than the Chairman and CEO, are independent.
Director Diversity
 
 
 
The Corporate Governance & Nominating Committee seeks to maintain a diverse Board across many dimensions, including but not limited to gender, race/ethnicity, sexual orientation, age, background, geography, and physical ability. The Company is committed to having at least two female Directors and at least one minority Director on the Board at all times, and the Corporate Governance Guidelines require the Governance Committee, and any search firm in engaged to assist the Governance Committee with a search of Director candidates, to include women and minorities in the initial pool of Director candidates.

 
Director Tenure and Retirement
 
 

A Director of the Company shall no longer qualify to serve as a Director effective as of the end of the term during which the Director becomes seventy-five (75) years of age. The Corporate Governance & Nominating Committee reviews each Director’s continuation on the Board on a regular basis and annually considers upcoming retirements, the average tenure, and the overall mix of individual Director tenures of the Board.
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Board Skills, Experience, and Qualifications
The table below summarizes the key qualifications, skills, and attributes most relevant to the decision to nominate candidates to serve on the Board. A mark indicates a specific area of focus or expertise on which the Board particularly relies. Not having a mark does not mean the Director does not possess that qualification or skill. Our Director nominees’ biographies describe each Director’s background and relevant experience in more detail.
Goebel
Henry
Hermann
Kitchell
Lambert
Ramirez
Ryan
Salmon
Shepard
Skillman
Stewart
K.White
L.White
Diversity
 
 
 
 
 
 
 
 
Executive Leadership
Public Company Board
 
 
 
 
Digital/Technology
Mergers and Acquisitions
 
 
 
 
 
 
 
Sales and Marketing
Finance/Accounting/Audit
 
 
 
 
Financial Services
 
 
 
 
 
 
Government Service
Nominees for Election
Pages 17 through 23 contain the following information with respect to each Director nominee of the Company: name; principal occupation or business experience for the last five years; skills and other qualifications to serve on the Board; age; and the year in which the nominee or incumbent Director first became a Director of the Company. The number of shares of common stock of the Company beneficially owned by the nominee or incumbent Director as of February 22, 2021 and the percentage that the shares beneficially owned represent of the total outstanding shares of the Company as of February 22, 2021 can be found on page 55. The nominees standing for election, other than nominees who are executive officers or Directors standing for re-election, were identified by a committee comprised of independent directors, the Chairman and CEO and other executive officers. The number of shares of common stock of the Company shown as being beneficially owned by each Director nominee or incumbent Director includes those over which he or she has either sole or shared voting or investment power.
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Nominees for Directors to be Elected
 
Andrew E. Goebel

 
Mr. Goebel, 73, was elected to the Board in 2000. He is Chairman of the Finance and Corporate Development Committee and is an “Audit Committee Financial Expert” as defined by the SEC. He is a member of the Funds Management Committee and the Enterprise Risk Committee. Mr. Goebel has served as a financial and management consultant since 2003.

Mr. Goebel brings to the Board, among other skills and qualifications, a 34-year career in the energy industry where he served in various capacities including President and Chief Operating Officer of Vectren Corporation from where he retired in 2003. He also has significant experience as a senior executive of a large public company and significant experience in finance.

Mr. Goebel holds a BSBA and an MBA from the University of Evansville. He serves as a director of two privately-held companies headquartered in Southwest Indiana, including South Central, Inc. and Community Natural Gas Company, Inc. He is a member of the Board of Trustees of the University of Evansville and serves in leadership positions for several other nonprofit and civic organizations.
 
 
 
Director Since: 2000
Age: 73

Committees:
Enterprise Risk

Funds Management

Finance and Corporate Development
 
Jerome F. Henry, Jr.

 
Mr. Henry, 70, was elected to the Board in 2014. He is a member of the Audit Committee and the Funds Management Committee. Mr. Henry is owner and President of Midwest Pipe & Steel, Inc., a company he founded in 1972 which specializes in steel sales and service, industrial scrap and steel brokerage. He served as a member of the former Tower Bank & Trust Board of Directors from 1999 to 2014. He is a life-long entrepreneur with ownership interests in numerous business enterprises including start-ups and recent turnarounds. Mr. Henry is also president of Paragon Tube Corporation, a manufacturer of steel tubing, headquartered in Fort Wayne, Indiana. He also serves as President of Hartzell Realty Corporation.

Mr. Henry brings to the Board, among other skills and qualifications, extensive experience in management and finance as well as 15 years serving on the Board of Directors of Tower Bank & Trust.

Mr. Henry has been active throughout his business career in various philanthropic activities and has served on the boards of numerous non-profit organizations. He is currently active with Bishop Luers High School, St. Anne Home, St. Joseph Community Health Foundation, Big Brothers Big Sisters and the Fort Wayne Urban Enterprise Association Board.
 
 
 

Director Since: 2014
Age: 70

Committees:
Audit

Funds Management
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Daniel S. Hermann

 
Mr. Hermann, 63, was elected to the Board in 2020. He is a member of the Audit Committee, the Talent Development and Compensation Committee, the Enterprise Risk Committee, and the Finance and Corporate Development Committee. He is the founding partner of Lechwe Holdings LLC, a family company involved in the startup and investing in companies. He is also a founder of AmeriQual Group, LLC, where he served as CEO from 2005 to 2015.

Mr. Hermann brings to the Board, among other skills and qualifications, over 20 years of management experience with Black Beauty Coal Company. During his years at Black Beauty, he held various titles, including President and CEO. He also has experience in public accounting and was a licensed Certified Public Accountant. Mr. Hermann is deemed to be an “Audit Committee Financial Expert” as defined by the SEC.

Mr. Hermann holds a Bachelor of Science Degree from Indiana State University. He currently serves as Chairman of the Board of Directors of Deaconess Health System. In addition, he serves as a director of General Signals, Hermann Family Foundation, and Foundation for Youth. He is also a director Emeritus of the Boys and Girls Club of Southern Indiana as well as past Chairman of the Evansville Catholic Foundation and past board member of Foresight Energy.
 
 
 
Director Since: 2020
Age: 63

Committees:
Audit

Enterprise Risk

Finance and Corporate Development

Talent Development and Compensation
 
Ryan C. Kitchell

 
Mr. Kitchell, 47, was elected to the Board in 2018. He is Chairman of the Audit Committee and is deemed to be an “Audit Committee Financial Expert” as defined by the SEC. He is a member of the Funds Management Committee and the Finance and Corporate Development Committee. Until the end of 2019, he served as Executive Vice President and Chief Administrative Officer of Indiana University Health where he previously served as Chief Financial Officer from 2012 to 2016. He served as President of IU Health Plans from 2011 to 2012 and Treasurer of Indiana University Health from 2010 to 2011. Prior to joining Indiana University Health, he worked for Indiana Governor Mitch Daniels. He had previously served in corporate treasury and controllership roles at Eli Lilly and Company.

Mr. Kitchell brings to the Board, among other skills and qualifications, more than five years of service to former Indiana Governor Mitch Daniels, first as Public Finance Director and then as Director of the Office of Management and Budget. In addition, he has over nine years of service with the largest health care provider in the state of Indiana.

Mr. Kitchell holds an economics degree from Indiana University, an MBA from the Tuck School of Business at Dartmouth and has earned the Chartered Financial Analyst (CFA) designation. He serves on several boards including the Indiana Sports Corporation, Mitch Daniels Leadership Foundation, Boy Scouts of America Crossroads Council, the Indiana State Chamber of Commerce PAC, OneAmerica Financial Partners, Cancer Treatment Centers of America and Help at Home.
 
 
 
Director Since: 2018
Age: 47

Committees:
Audit

Funds Management

Finance and Corporate Development
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Phelps L. Lambert

 
Mr. Lambert, 73, was elected to the Board in 1990. He is Chairman of the Funds Management Committee and a member of the Audit Committee, the Governance Committee, and the Finance and Corporate Development Committee. Since 1992, Mr. Lambert has served as Managing Partner of Lambert and Lambert, an investment partnership.


Mr. Lambert brings to the Board, among other skills and qualifications, financial and legal expertise as well as 14+ years serving as COO/CEO of Farmers Bank & Trust Company in Henderson, Kentucky.

Mr. Lambert holds a BA in Political Science from Brown University and a Juris Doctorate from the University of Kentucky. He is a member of the Kentucky Bar Association.
 
 
 
Director Since: 1990
Age: 73

Committees:
Audit

Corporate Governance and Nominating

Funds Management

Finance and Corporate Development
 
Austin M. Ramirez

 
Mr. Ramirez, 42, was elected to the Board in 2020. He is a member of the Corporate Governance and Nominating Committee and the Culture, Community and Social Responsibility Committee. He is the President and CEO of Husco International, a global engineering and manufacturing company headquartered in Waukesha, Wisconsin.

Mr. Ramirez brings to the Board, among other skills and qualifications, management experience in the engineering and manufacturing business. He has also served as a White House Fellow on the National Economic Council in Washington D.C.

Mr. Ramirez graduated from the University of Virginia with degrees in Systems Engineering and Economics. He also holds an MBA from Stanford Graduate School of Business. He has volunteered on a number of education-focused boards including Teach for America, the Boys and Girls Clubs, the YMCA and the United Performing Arts Fund. He is a co-founder and board member of St. Augustine Preparatory Academy and a founding member of City Reformed Church. Austin has also served as a director of the Greater Milwaukee Committee, Metropolitan Milwaukee Chamber of Commerce and the National Association of Manufacturers.
 
 
 
Director Since: 2020
Age: 42

Committees:
Corporate Governance and Nominating

Culture, Community and Social Responsibility
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James C. Ryan, III

 
Mr. Ryan, 49, was elected to the Board on May 2, 2019 when he became CEO of the Company. Mr. Ryan was elected Charmain of the Board on January 30, 2020. Prior to beginning his role as CEO, Mr. Ryan was Senior Executive Vice President and CFO of the Company. He has also served the Company as Director of Corporate Development and Mortgage Banking, Integrations Executive and Treasurer. Prior to joining Old National in 2005, Mr. Ryan held senior finance positions at Wells Fargo Home Mortgage and Old Kent Financial Corp.

Mr. Ryan brings to the Board, among other skills and qualifications, extensive bank management experience derived from working over 25 years in the banking industry. Mr. Ryan’s leadership skills, extensive banking experience and knowledge of the Company and its products and services is tremendously valuable to the Board. Mr. Ryan also brings to the Board his ability to develop long-term strategies and find effective and efficient means to implement and communicate those strategies.

 
 
 
Director Since: 2019
Age: 49
 
 
 
Mr. Ryan holds a BA in Business Administration from Grand Valley State University in Allendale, Michigan. He is currently Chair of the Economic Development Coalition of Southwest Indiana, Secretary and Treasurer of the Southwest Indiana Regional Development Authority, a board member for Deaconess Hospital, Inc. and Deaconess health Systems, Inc., a member of the Central Indiana Corporate Partnership, Inc., advisory board member for the Old National Center for Closely Held Business, and an advisory board member of the University of Evansville’s Schroeder Family School of Business Administration.
 
Thomas E. Salmon

 
Mr. Salmon, 57, was elected to the Board in 2018. He is a member of the Talent Development and Compensation Committee. Mr. Salmon currently serves as Chairman and CEO of Berry Global, Inc. where he was appointed to the Board of Directors in February 2017. He previously served as Berry Global’s President and Chief Operating Officer since October 2016, served as President of Berry’s Consumer Packaging Division from November 2015 to October 2016, served as President of Berry’s Rigid Closed Top Division from November 2014 to November 2015, and served as President of Berry’s Engineered Materials Division from 2003 to November 2014. He was General Manager for Honeywell Plastics from 2001 to 2003 and Global Sales Director for Allied Signal’s Engineering Plastics and Films from 1999 to 2001. Prior to joining Honeywell/Allied Signal, Mr. Salmon held several positions at GE Plastics and GE Lighting, divisions of General Electric.

Mr. Salmon brings to the Board, among other skills and qualifications, over 20 years in manufacturing which has provided him with extensive experience in management, accounting and finance.

Mr. Salmon holds a Bachelor of Business Administration from Saint Bonaventure University in Western New York. He serves on several boards including the Evansville Regional Business Committee, Golf Gives Back and Signature School.
 
 
 
Director Since: 2018
Age: 57

Committees:
Talent Development and Compensation
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Randall T. Shepard

 
Mr. Shepard, 74, was elected to the Board in 2012. He is a member of the Talent Development and Compensation Committee, the Corporate Governance and Nominating Committee, and the chair of the Culture, Community and Social Responsibility Committee. He served twenty-five years as Chief Justice of the Indiana Supreme Court, until his departure in 2012. He brings to the Board the experiences of a career in public sector management, as well as extensive leadership in the non-profit world. Mr. Shepard served as Executive in Residence at the Public Policy Institute of Indiana University’s School of Public and Environmental Affairs from 2012 to 2014. He currently serves as a Senior Judge in the Indiana Court of Appeals.

During 2014-2015, Mr. Shepard was Interim General Counsel of CFA Institute, which educates and tests professionals in investment and finance, conferring the world’s leading credential in those fields. During his judicial career, Judge Shepard served as President of the Conference of Chief Justices and as Chairman of the National Center for State Courts. He was also President of the Appellate Judges Conference, representing seven hundred state and federal judges in the American Bar Association.

Mr. Shepard’s leading avocation has been historic preservation. He was a trustee of the National Trust for Historic Preservation for eleven years and served as Chairman of Indiana Landmarks, Inc. In each of these and other roles, he has acquired some experience in the field of real estate. He has likewise served on many other non-profit boards, including terms as President of The Lampion Center, a family counseling organization based in Evansville. Mr. Shepard earned an A.B. degree cum laude from Princeton University, his J.D. from the Yale Law School, and an LL.M. from the University of Virginia School of Law.
 
 
 
Director Since: 2012
Age: 74

Committees:
Talent Development and Compensation

Culture, Community and Social Responsibility

Corporate Governance and Nominating
 
Rebecca S. Skillman

 
Ms. Skillman, 70, was elected to the Board in 2013 and serves as the Company’s Lead Director. She is Chairperson of the Governance Committee and is a member of the Talent Development and Compensation Committee and the Finance and Corporate Development Committee. Ms. Skillman currently serves as Chairman of the Board for Radius Indiana, an economic development regional partnership which represents Crawford, Daviess, Dubois, Greene, Lawrence, Martin, Orange, and Washington Counties in South Central Indiana. She previously served as Senior Advisor of Radius Indiana from July 2016 to December 2016 and she served as CEO of Radius Indiana from February 2013 to July 2016. She serves as an advisor for Bowen Center for Public Affairs, Ball State University, and an advisor for Indiana University’s Center for Rural Engagement.

Ms. Skillman served as the 49th Lieutenant Governor of the State of Indiana from 2005 to 2013 where in addition to her legislative duties as President of the Indiana Senate, she was responsible for leading the Office of Tourism Development, Energy Group and Indiana Housing and Community Development Authority. She chaired the Indiana Counter Terrorism and Security Council, the intergovernmental entity responsible for homeland security. She also served as the Secretary of Agriculture and Rural Development under the state's Department of Agriculture and Office of Rural Affairs.

Ms. Skillman has enjoyed a lifelong career in public service, having served in the Indiana Senate from 1992 to 2004. She brings to the Board expertise and leadership in economic development, administration, community involvement, governmental and political affairs and civil service. Ms. Skillman earned an Associate’s degree/business concentration from Indiana Wesleyan University.
 
 
 
Director Since: 2013
Age: 70

Committees:
Corporate Governance and Nominating

Talent Development and Compensation

Finance and Corporate Development
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Derrick J. Stewart

 
Derrick J. Stewart, 43, was elected to the Board in 2015. He is Chairman of the Talent Development and Compensation Committee and is a member of the Finance and Corporate Development Committee and the Culture, Community and Social Responsibility Committee. Mr. Stewart is President and CEO of the YMCA of Greater Indianapolis. He served as CEO of the YMCA of Southwestern Indiana from 2009 to 2019, and in various other capacities, including Chief Development Officer and Chief Operating Officer, from 2005 to 2009.

Mr. Stewart brings to the Board, among other skills and qualifications, prior banking experience as a loan officer of the Company and extensive experience in managing a nonprofit entity in one of the Company’s largest markets. Mr. Stewart is deeply committed to supporting and encouraging the development of a healthier and more vibrant community and providing opportunities for young people from all walks of life to achieve their potential. Mr. Stewart is a member of the Board of Trustees of the YMCA Retirement Fund and a member of the Board of Directors of the YMCA Employee Benefits Management Committee, and the Mitch Daniels Leadership Fellowship. He is a past member of the YMCA of the USA Board of Directors, where he served on the Financial Development Committee and the International Committee and is past chair of the YMCA of the USA Small and Midsize YMCA Cabinet. He is past President of the Board of the Evansville Regional Airport Authority, and the Public Education Foundation of Evansville, past Vice President of the Evansville Christian School Board, and past member of the Regional Board of Trustees of Ivy Tech Community College. Mr. Stewart worked as a commercial loan officer for Old National Bank from 2004 to 2005.

Mr. Stewart is a graduate of the Indiana University Kelley School of Business with a degree in Business and Finance.
 
 
 
Director Since: 2015
Age: 43

Committees:
Talent Development and Compensation

Culture, Community and Social Responsibility

Finance and Corporate Development
 
Katherine E. White

 
Katherine E. White, 54, was elected to the Board in 2015. She is a member of the Governance Committee, the Funds Management Committee and Enterprise Risk Committee. Ms. White is a Brigadier General in the U.S. Army, currently serving in the Michigan Army National Guard as the Deputy Commanding General of the 46th Military Police Command in Lansing, Michigan, since 2019. She is also currently a Professor of Law at Wayne State University Law School in Detroit, Michigan, where she has taught full-time since 1996. Ms. White is also a Regent with the University of Michigan Board of Regents, and she has served in that capacity since 1998.

Ms. White brings to the Board, among other skills and qualifications, extensive experience in law, education, government and military affairs. From 1995 to 1996, Ms. White was a Judicial Law Clerk to the Honorable Randall R. Rader, Circuit Judge U.S. Court of Appeals for the Federal Circuit. From 2000 to 2002, she was appointed by the Secretary of Commerce to serve on the United States Patent and Trademark Office Patent Public Advisory Committee. She was also appointed by the Secretary of Agriculture to the U.S. Department of Agriculture’s Plant Variety Protection Office Advisory Board serving from 2004 to 2008, 2010 to 2012 and 2015 to 2020. From 2003 to 2014, she was a market board member at United Bank and Trust in Ann Arbor, MI. She is a current board member of Alta Equipment Group, Inc. (a public company).

Ms. White received her B.S.E. Degree in Electrical Engineering and Computer Science from Princeton University, a J.D. Degree from the University of Washington, a LL.M. Degree from the George Washington University Law School, and a Master’s Degree in Strategic Studies from the U.S. Army War College. In addition, Ms. White is a Fulbright Senior Scholar, a White House Fellow 2001 to 2002, and a Registered Patent Attorney.
 
 
 
Director Since: 2015
Age: 54

Committees:
Corporate Governance and Nominating

Funds Management

Enterprise Risk
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Linda E. White

 
Ms. White, 71, was elected to the Board in 2008. She is Chairperson of the Enterprise Risk Committee and is a member of the Culture, Community and Social Responsibility Committee and the Finance and Corporate Development Committee. Ms. White serves as Chief Administrative Officer of Deaconess Henderson Hospital. She previously served as an administrator at Evansville-based Deaconess Hospital for 32 years. From 2004 through June 30, 2017, she served as President and CEO for Deaconess Health System, Inc. which operates six acute care hospitals in southwest Indiana. Upon her June 30, 2017 retirement she became President Emerita for Deaconess Health System, Inc. and serves as the Director of Deaconess Foundation in conjunction with an Interim Director.

Ms. White brings to the Board, among other skills and qualifications, extensive experience in management and leadership in the healthcare industry.

Ms. White holds a BS in Nursing and an MBA from the University of Evansville, and a BS in Applied Mathematics from Indiana State University. She is a fellow in the American College of Healthcare Executives. She previously served on the board of Deaconess Hospital and Deaconess Health System. She is past Chairman of the Board of Indiana Hospital Association and VHA Central. She has served on the board of the Boys and Girls Club and is currently a member of the Board of Trustees of the University of Evansville and Rose-Hulman Institute of Technology. She is a member of the Indiana Economic Development Corporation.
 
 
 
Director Since: 2008
Age: 71

Committees:
Enterprise Risk

Culture, Community and Social Responsibility

Finance and Corporate Development
The Board unanimously recommends that you vote “FOR” the election of the thirteen candidates for Director.
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Section III – Executive Compensation
Executive Officers of the Company
The executive officers of the Company are listed in the table below. Each officer serves a term of office of one year and until the election and qualification of his or her successor.
Name
Age
Office and Business Experience
James C. Ryan, III
49
CEO of the Company since May 2, 2019, Chairman since January 30, 2020. Previously, Senior Executive Vice President and CFO of the Company from May 2016 to May 2019. Executive Vice President and Director of Corporate Development and Mortgage Banking of the Company from February 2015 to May 2016. Executive Vice President and Director of Corporate Development of the Company from July 2009 to February 2015. Senior Vice President and Integration Executive of the Company from December 2006 to July 2009. Senior Vice President and Treasurer of the Company from March 2005 to December 2006. Vice President at Wells Fargo Home Mortgage from July 2004 to March 2005.
 
 
 
Brendon B. Falconer
45
Senior Executive Vice President and CFO of the Company since May 2019. Previously, Treasurer of the Company from November 2016 to May 2019. Senior Vice President and Director of Credit Operations from March 2013 to November 2016. Loss Share President from January 2012 to March 2013. Vice President and Bank Controller from April 2009 to January 2012.
 
 
 
James A. Sandgren
54
President and Chief Operating Officer of the Company since May 2016. Previously, Executive Vice President and Chief Banking Officer of the Company from April 2014 to May 2016. Executive Vice President and Regional CEO of the Company from May 2007 to April 2014. Executive Vice President and Southern Division Chief Credit Officer from January 2004 to May 2007.
 
 
 
Scott J. Evernham
43
Executive Vice President and Chief Risk Officer of the Company since August 2019. Previously, Executive Vice President, Wealth Management, of the Company from May 2016 to August 2019. President of Old National Insurance from December 2014 to May 2016. Senior Vice President, Assistant General Counsel from October 2012 to December 2014.
 
 
 
Jeffrey L. Knight
61
Executive Vice President and Chief Legal Counsel of the Company since December 2004, and Senior Vice President of the Company from 2001 to 2004. Corporate Secretary of the Company since 1994 and General Counsel of the Company from 1993 to 2004.
 
 
 
Daryl D. Moore
63
Senior Executive Vice President and Chief Credit Executive of the Company since May 2016. Previously, Executive Vice President and Chief Credit Officer of the Company from 2001 to 2016, and Senior Vice President of the Company from 1996 to 2001.
 
 
 
Kendra L. Vanzo
54
Senior Executive Vice President, Chief Administrative Officer of the Company since March 2021. Executive Vice President, Chief Administrative Officer of the Company from January 2020 to March 2021. Executive Vice President and Chief People Officer from May 2018 to January 2020. Executive Vice President, Associate Engagement and Integrations Officer from June 2014 to May 2018. Executive Vice President and Chief Human Resources Officer from January 2010 to June 2014. Senior Vice President and Chief Human Resources Officer from March 2007 to January 2010.
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Talent Development and Compensation Committee Matters
The Board appoints the members of the Talent Development and Compensation Committee (“Compensation Committee”). The Compensation Committee is currently composed of five non-employee Directors, each of whom is independent from management and the Company (as independence is currently defined in the NASDAQ listing requirements and in the Company’s Corporate Governance Guidelines). No member is eligible to participate in any management compensation program.
Compensation Committee Charter
The Compensation Committee operates pursuant to a written charter. A copy of the Compensation Committee’s charter is available on our website, www.oldnational.com, under the Investor Relations/Corporate Governance link. As required by the charter, the Compensation Committee reviews its charter annually and conducts an annual performance evaluation, the results of which are discussed with the Compensation Committee members and shared with the Company’s Governance Committee.
Compensation Consultant
The Compensation Committee has the sole authority to hire outside compensation consultants to advise it on the structure and amount of compensation of the executive officers and non-employee Directors. For 2020 compensation decisions, the Compensation Committee retained Willis Towers Watson (“WTW”) to provide analyses and advice regarding executive compensation, as described further in this report.
The WTW consultant who performs these services reports directly to the Committee Chairman. With consent of the Compensation Committee Chairman, WTW may, from time to time, contact the Company’s executive officers for information necessary to fulfill its assignments and may make reports and presentations to and on behalf of the Compensation Committee that the executive officers also receive. All of the decisions with respect to determining the amount or form of executive compensation under the Company’s executive compensation programs are made by the Compensation Committee and may reflect factors and considerations other than the information and advice provided by WTW. To the extent that the outside consultant’s work involves Director compensation, that work is shared with the Governance Committee, which is responsible for reviewing and making recommendations to the Board regarding Director compensation and benefits.
Scope of Responsibilities
The Compensation Committee is responsible for approving and evaluating the Company’s employee compensation and benefit programs, ensuring the competitiveness of those programs, and advising the Board regarding the talent development and succession management of key executives of the Company. The Compensation Committee is responsible for annually reviewing, approving, and recommending to the Board for its approval all elements of the compensation of the CEO and other executive officers who report directly to the CEO. The Compensation Committee is also responsible for determining awards to employees of stock or stock options pursuant to the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 2020, there were no compensation committee interlocks or insider participation.
Assessing Risk in Compensation
Our compensation programs do not use highly leveraged incentives that drive risky short-term behavior. Our compensation programs are designed to reward our executives for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total shareholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. With the balance of compensation distributed among annual salary, short-term incentive and long-term equity awards, no particular element of compensation is excessively weighted versus other elements. In addition, the use of multiple Performance Measures in the short-term and long-term incentive plans ensures that executives must excel in a number of areas – rather than simply maximizing performance on a single performance measure – in order to earn their variable compensation.
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In addition, we operate stock ownership requirements and a Bonus Recoupment Policy that provide a strong incentive to ensure the Company is managed with a long-term view and helps to ensure that Company management avoids excessive risk taking in the short-term.
Our Compensation Committee reviewed the relationship between our risk management policies and practices and the incentive compensation provided to the NEOs at its April 16, 2020 meeting. After review with the Company’s Chief Risk Officer and representatives of WTW, the Compensation Committee determined that our incentive compensation programs do not encourage unnecessary and excessive risk taking.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of SEC Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
Submitted by,
Members of the Compensation Committee
Derrick J. Stewart, Chairman
Daniel S. Hermann
Thomas E. Salmon
Randall T. Shepard
Rebecca S. Skillman
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Compensation Discussion and Analysis
Overview
This Compensation Discussion and Analysis describes the key principles and approaches used to determine the compensation earned by our Chairman and CEO, CFO, and our three other executive officers employed at the end of 2020 who were most highly compensated for 2020. Detailed information regarding the compensation of these executive officers, who are referred to as “Named Executive Officers” or “NEOs”, appears in the tables following this Compensation Discussion and Analysis. This discussion should be read in conjunction with those tables.
The following are the individuals who served as our Named Executive Officers for the fiscal year ended December 31, 2020:





James C. Ryan, III
Chairman and CEO
Brendon B. Falconer
Chief Financial Officer
James A. Sandgren
President and Chief
Operating Officer
Jeffrey L. Knight
Chief Legal Counsel
Kendra L. Vanzo
Chief Administrative Officer
This Compensation Discussion and Analysis consists of the following parts:
Executive Summary
Review of 2020 Advisory Vote on Executive Compensation
Responsibility for Executive Compensation Decisions
Compensation Philosophy and Objectives
Role of Executive Officers in Compensation Decisions
Compensation Committee Procedures
Setting Executive Compensation for 2020
Changes in Executive Compensation in 2021
Executive Summary
Pay for Performance in 2020. We seek to closely align the interests of our NEOs with the interests of our shareholders. Our compensation programs are designed to reward our NEOs for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total shareholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. Our NEOs’ total compensation is comprised of a mix of base salary, annual cash incentive awards and long-term incentive awards paid in equity. These compensation components, combined with our stock ownership guidelines and recoupment policy, extend the time horizon beyond the vesting and/or performance periods and provide balance between rewarding short-term and long-term performance.
The Company’s financial performance remained strong in 2020. As more fully described in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10-K, the Company took certain actions in 2020 to position the Company for future growth.
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Throughout 2020, the Company continued the execution of its strategic plan (“The ONB Way”), which has various detailed business objectives designed to keep the Company’s clients at the center of all we do. The ONB Way includes:
Realigning the organization into clearly defined segments to align leaders and relationship managers with the client segment they can best serve (while not wavering on our commitment to community);
Deepening client relationships through integrated Commercial, Community Banking, and Wealth teams;
Simplifying and improving the end-to-end banking/borrowing journey while adhering to strong risk management principles;
Creating a new Wealth Division that combines wealth management, investments, and private banking for a simplified, highly consultative client experience firmly rooted in financial planning; and
Investing in our operational and information technology infrastructure to meet our clients “where they are” and ensure that we keep pace with technology and client digital expectations.
During 2020, we executed The ONB Way transformation, delivered on the run rate expense savings, began the implementation phase of our planned revenue initiatives, and participated in the CARES Act Paycheck Protection Program (“PPP”). As of December 31, 2020, Old National had originated nearly 10,000 PPP loans with balances in excess of $1.5 billion to new and existing customers through the PPP. The Company’s management was able to service the nearly 10,000 customers of the Company within an expedited timeframe during a catastrophic worldwide pandemic. The ONB Way implementation, the PPP loans, and other management initiatives focused on organic growth and other efficiency efforts in 2020 resulted in record results as evidenced by the following 2020 highlights:
record commercial loan production of $3.5 billion;
record capital markets revenue of $22.5 million;
record mortgage production of $2.2 billion;
record organic core deposit growth of $2.6 billion;
net income of $226.4 million;
disciplined approach to credit risk management during the pandemic reflected in our strong credit quality metrics, with low net charge-offs to average loans of .02%;
continued progress in expense management, achieving an Efficiency Ratio of 62.91%; and
achieved diluted earnings per share of $1.36.
These strong financial results in 2020 contributed to the Company’s Total Shareholder Return (“TSR”), outpacing other U.S. banks in the Company’s Peer Group, with Old National reporting a positive return of 4.5% and peers performing at a decline of -11.0% for the three years ending December 31, 2020.
In addition to a strong three-year TSR performance, the Company’s adjusted one-year return on average tangible common equity (“ROATCE”) of 14.96% was top quartile performance within the Company’s peer group.
This outstanding 2020 performance which translated into strong returns for our shareholders is reflected in variable compensation outcomes for the year, demonstrating our commitment to pay for performance:
Short-term incentives were earned at 150% of target, the maximum opportunity available, driven by above target performance in earnings per share (“EPS”), return on average tangible common equity (“ROATCE”) and Efficiency Ratio that exceeded the maximum performance goals set. See Annual Incentive Compensation beginning at the bottom of page 34.
Performance-based restricted stock units granted in 2018 with a three-year performance period ending on December 31, 2020 were earned at 123.5% of target, out of the maximum opportunity of 150% of target, driven by above target performance in relative TSR and relative ROATCE. See Performance-Based Restricted Stock Units beginning on page 36 for additional details.
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Executive Compensation Framework in 2020. There are three core elements of our executive compensation framework reflecting short and long-term performance horizons:
Compensation Element and Purpose
Key Features
Base Salary
Fixed compensation for performing the responsibilities associated with an executive’s position
Set with reference to market data, role scope, changes in duties, individual performance and experience
Informed by market data for similar positions at other peer group companies, generally targeted at median
Reviewed annually with changes effective in April
 
 
Annual Incentive Compensation
Reward short-term financial and operational performance
Variable cash incentive
Target value aligned to similarly situated executives within peer group
Capped at 150% of target; 50% of target paid for threshold performance
Target opportunities expressed as a percentage of salary as follows:
 
 
 
 
 
 
NEO
2020 Target
 
 
Chairman and CEO
115%
 
 
CFO
75%
 
 
President and Chief Operating Officer
75%
 
 
All other NEOs
50%
 
 
 
 
2020 awards based on EPS (60%), ROATCE (20%) and Efficiency Ratio (20%)
 
Subject to recoupment policy
 
 
Long-Term Incentive Compensation
Align executive interests with those of our shareholders over the long-term, incentivize sustainable share price growth and retain talent
Variable equity incentive
Awarded as a combination of Performance-Based Restricted Stock Units and Service-Based Restricted Stock Units:
 
 
 
NEO
2020 Equity Mix
 
 
Performance-
Based
Service-
Based
 
Chairman and CEO
75%
25%
 
All other NEOs
75%
25%
 
 
 
Target value aligned to market median within peer group
 
Capped at 150% of target; 25% of target paid for threshold performance
 
Target opportunities expressed as a number of shares as follows:
 
 
 
 
NEO
Target
 
 
Chairman and CEO
80,000
 
 
CFO
20,000
 
 
President and Chief Operating Officer
35,000
 
 
All other NEOs
15,000
 
 
 
Performance-Based Restricted Stock Units based on three-year ROATCE (50%) and three-year TSR (50%) relative to our Peer Group
 
Service-Based Restricted Stock Units vest in three approximately equal installments over three years
 
Subject to recoupment policy
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Performance metrics are selected given their alignment to long-term value creation and our areas of strategic focus.
Measure
Why it Matters
One-Year Performance Measures
EPS
Indicates the overall profitability of the company.
Return on average tangible common equity (ROATCE)
ROATCE is a key factor to long-term profitable growth due to the strong correlation of higher ROATCE to higher market price-to-tangible book value valuations for common stock of publicly traded bank holding companies.
Efficiency Ratio
Provides focus on expense management.
Three-Year Performance Measures
Relative ROATCE
Operational performance measure with clear line of sight to participants, while also being aligned with long-term shareholder value creation. Measuring over a three-year period against our peer group assesses our success of sustaining multi-year outperformance.
Relative TSR
Clear alignment with shareholder interests and our ability in delivering strong relative value creation.
We believe that our compensation program builds upon the Company’s compensation governance framework and our overall pay-for-performance philosophy, which are demonstrated by the following:
COMPANY’S COMPENSATION PROGRAM – BEST PRACTICES IMPLEMENTED
Long Term Performance Based Compensation
We award a significant portion of our long-term incentive compensation in the form of performance-based restricted stock units, which vest over a three-year period only upon the achievement of specific goals. With a three-year vesting period, we hope to more closely align our NEOs’ incentives with the long-term interests of shareholders.
Lack of Gross-Up
 
Our employment agreements do not provide for:
 
Tax gross-ups on severance benefits; or
 
Tax gross-ups on perquisites
Clawback Policy
We have a Bonus Recoupment Policy which provides our Board with authority to recover a bonus or other incentive payout paid to any executive officer in the event there is a material restatement of the Company’s financial results.
Shareholder Advisory Vote
Each year, shareholders provide an advisory “say on pay” vote.
Rigorous Stock Ownership Guidelines
NEOs are required to own certain minimum amount of stock depending upon their salary.
Internal Pay Equity
We consider a person’s responsibilities, skill level and effort in relation to other similarly-situated NEOs when making compensation determinations.
Responsible Employee Ownership
We prohibit Company personnel, including the NEOs, from engaging in any short-term, speculative transactions with respect to Company securities, including purchasing securities on margin, engaging in short sales, buying or selling put or call options and trading in options.
Hedging and Pledging Prohibition Policy
Our policy prohibits our Directors, NEOs and other key executive officers from hedging and pledging, as more fully described on page 40.
A Well-Informed Compensation Committee
The Compensation Committee uses tally sheets that provide information as to all compensation that is available at target performance levels to our NEOs.
Independent Compensation Consultant
The Compensation Committee engages a consultant for aid in determining executive compensation that does not provide any services to management.
Risk Based Compensation
Our Compensation Committee oversees the ongoing evaluation of the relationship between our compensation programs and risk management.
Annual Risk Assessment
The Compensation Committee annually reviews the risk associated with executive compensation.
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We encourage you to read this Compensation Discussion and Analysis for a detailed discussion and analysis of our executive compensation program, including information about the fiscal 2020 compensation of the NEOs.
Review of 2020 Advisory Vote on Executive Compensation
At our 2020 Annual Meeting, our shareholders had the opportunity to provide an advisory vote on the compensation paid to our NEOs, more commonly referred to as a “say-on-pay” vote. Ninety-eight percent of the votes cast by our shareholders were in favor of the compensation provided to our NEOs. This result affirmed majority shareholder support of our approach to executive officer compensation, and informed the Compensation Committee’s discussions during the year, which resulted in no significant change.
In addition, in recognition of the Board’s and shareholders’ majority preference expressed at the 2017 meeting, the Compensation Committee recommended, and the Board approved, an annual non-binding “say-on-pay” vote to occur at each annual shareholder meeting (see page 65), so that any shareholder concerns about executive pay can be acknowledged and considered in the timeliest manner. The Compensation Committee will continue to consider the results from this year’s say-on-pay advisory vote and future advisory votes on executive compensation and any related feedback received from our shareholders via other channels.
Responsibility for Executive Compensation Program
Subject to full Board approval, the Compensation Committee of our Board is responsible for establishing and implementing our general executive compensation philosophy and determining the compensation for all of our executive officers reporting directly to the Chairman and CEO, including our NEOs. The Compensation Committee’s charter permits the Compensation Committee to delegate authority to subcommittees. In 2020, the Compensation Committee made no delegation of its authority over compensation matters relating to our NEOs.
Compensation Philosophy and Objectives
Through our compensation program for executive officers, we strive to attract and retain superior executives in a highly competitive environment and provide financial incentives that align our executive officers’ interests with those of our shareholders. This philosophy and its objectives are generally consistent over time, accommodating modifications as economic and business conditions change to ensure continued alignment.
The Compensation Committee believes that the primary components of each executive officer’s compensation should be a competitive base salary and incentive compensation that rewards the achievement of annual and long-term objective performance goals. The Compensation Committee also believes stock ownership is important because it aligns our executives’ interests with those of our shareholders. Thus, equity compensation represents a significant element of each executive officer’s potential compensation.
The Board intends to continue to reward management’s performance with cash and equity compensation based on a philosophy and belief that the strong operating fundamentals in the Company will be reflected in earnings growth and eventual stock price appreciation. It is in this context that certain actions were taken by the Board to reward executive management for 2020 performance and to establish incentive goals for 2021.
Role of Executive Officers in Compensation Decisions
The Compensation Committee reviews, approves, and recommends to our full Board each element of compensation for the executive officers reporting directly to the CEO, including all NEOs. The Compensation Committee considers the recommendations of the CEO in determining the base salary, annual incentive compensation and long-term incentive awards for each of the executive officers of the Company other than the CEO, but ultimately the Committee makes all determinations in its discretion as to final pay outcomes. Together with the Compensation Committee, our CEO annually reviews the performance of each of our other executive officers, the compensation of each executive officer, including base salary, annual incentive compensation and long-term incentive awards and makes recommendations to the Compensation Committee regarding the compensation of those officers for the following year. The Compensation Committee Chairman annually reviews our CEO’s compensation with representatives from the compensation consultant (in conjunction with an annual performance review led by the Company’s non-executive Chairman or Lead Director) and makes recommendations to the Compensation Committee regarding the CEO’s compensation for the following year. The CEO is not involved in the final determination regarding his own compensation, and all decisions with respect to the CEO’s compensation are made in executive session of the Compensation Committee, without the CEO present.
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Committee Procedures
The Compensation Committee considers the information provided by its independent advisor, including compensation reports and recommended best practices as a baseline for establishing targeted total compensation, principal compensation components, and determining the allocation of total potential compensation components for each NEO and other executives in the Company. The Company seeks to establish total compensation, base salaries, annual incentive compensation, and long-term equity incentive compensation for each position at the median for the peer group, if targeted performance is achieved, and at or near the 75th percentile of the peer group, if exceptional performance is achieved. The Compensation Committee also seeks to allocate potential total compensation among base salary, annual incentive compensation, and longer-term incentive compensation in proportions that reflect peer group practices.
The Compensation Committee requested proposals from various firms in 2019 and elected to retain WTW to assist the Compensation Committee in evaluating the executive compensation program for 2020. The Compensation Committee reviewed its relationship with WTW and concluded that WTW was independent and free of any conflicts of interest in regard to the advice it provided the Compensation and Governance Committees.
The following is a description of the services WTW provided to the Compensation Committee to assist it in establishing compensation for the NEOs and other members of management for 2020:
assessed the competitiveness of our compensation packages for executive officers;
analyzed our business performance over one-year and three-year periods; and
evaluated the relationship between executive officer pay and our performance.
In examining our business performance, WTW focused on the Company’s relative performance in three key metrics, including total shareholder return (“TSR”), return on assets (“ROA”), and return on equity (“ROE”).
In evaluating the competitiveness of our compensation levels for NEOs and other members of management, WTW gathers pay and performance data from a peer group of publicly-traded financial services companies that includes a broad representation of regional banks within the Company’s region of operation and which are similar in asset size to the Company. WTW selects the peer group with input from the Compensation Committee. The Compensation Committee considers the peer group data when evaluating the compensation for all of the NEOs. The composition of the peer group may be amended from year to year to take account of mergers, acquisitions, and other changes that make a company more or less appropriate for inclusion. The Compensation Committee has at times in the past removed companies from the peer group because the companies’ asset sizes were deemed by the Compensation Committee to not be representative of the other companies in the group and in excess of the Company’s asset size. For 2020, WTW recommended that the Company use the Peer Group as discussed below.
Under SEC disclosure rules, companies generally limit executive compensation disclosure to their most highly compensated executive officers. To determine competitive pay for these positions, WTW uses data from publicly filed documents as well as data from its proprietary market surveys. For the remaining executives, WTW uses data from its proprietary market surveys only. The market surveys include a broader range of companies and do not provide company-specific information. The survey data is used as a general reference and is one of a number of factors considered in determining where pay is actually set.
For 2020 compensation decisions, our publicly traded peer group consisted of the following 18 bank holding companies which had asset sizes ranging from $12.1 billion to $33.6 billion, with a median asset size of $23.5 billion:
Associated Banc-Corp
First Midwest Bancorp, Inc.
UMB Financial Corporation
BancorpSouth Bank
Fulton Financial Corporation
Valley National Bancorp
Bank OZK
Great Western Bancorp, Inc.
Western Alliance Bancorporation
Commerce Bancshares, Inc.
Hancock Holding Company
Wintrust Financial Corporation
Cullen/Frost Bankers, Inc.
IBERIABANK Corporation
 
F.N.B. Corp.
TCF Financial Corporation
 
First Financial Bancorp
Trustmark Corporation
 
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In 2020, the Compensation Committee undertook a review of the compensation peer group to be used for 2021 compensation decisions. Based on an agreed set of revised factors for assessing peer relevance, namely size, product scope, geographic scope, and competition for talent, and a recommendation from WTW, an adjusted 19-company peer group for fiscal year 2021 was approved.
Retained Peer Companies
New Peer Companies
Associated Banc-Corp
Hancock Holding Company
Cadence Bancorporation
BancorpSouth Bank
TCF Financial Corporation
Umpqua Holdings Corporation
Bank OZK
Trustmark Corporation
Webster Financial Corporation
Commerce Bancshares, Inc
UMB Financial Corporation
 
F.N.B. Corp.
Valley National Bancorp
Removed Companies
First Financial Bancorp First Midwest Bancorp, Inc Fulton Financial Corporation
Western Alliance Bancorporation Wintrust Financial Corporation
Cullen/Frost Bankers, Inc. IBERIABANK Corporation
Great Western Bancorp, Inc.
 
 
In making its recommendations to the Compensation Committee regarding executive officer compensation in 2020, WTW reviewed the compensation practices and performance of the peer companies and discussed our performance and strategic objectives with our Chairman and CEO, CFO, and Chief Administrative Officer. In January 2020, WTW provided the Compensation Committee with a detailed written report regarding our executive compensation structure, its competitiveness relative to the peer group companies, and the alignment of our executive pay with the Company’s performance. Over periods of one year and three years, the Company improved on an absolute basis and relative to peers in ROA and ROE. On a three year basis, the Company’s stock performance was at the 80th percentile relative to peers. Target compensation levels were positioned below median. As a result of this review the Compensation Committee approved changes to 2020 base salary as described on page 34.
Executive Compensation in 2020
Pay Mix. In establishing the 2020 compensation for our executive officers, the Compensation Committee:
analyzed the compensation levels of comparable executive officers in the peer group;
determined a mix of base salary and cash incentive opportunity, along with an equity position to align our executive officers’ compensation with our performance and leadership accomplishments;
assessed our executive officers’ performance; and
assessed our financial and business results relative to other companies within the banking industry as well as to our own past performance and financial goals.
The principal components of each executive officer’s compensation used by the Compensation Committee to reward, align and retain our named executives are:
base salary;
annual incentive compensation; and
long-term equity incentive compensation.
In general, we strive to target the percentage that each of these components bears to the total compensation for our executive officer group as a whole, assuming the achievement of targeted performance, to approximately the corresponding percentages for the peer group. Based on the advice of our independent advisor, our pay mix is more performance-oriented than our peers.
In structuring our long-term incentive awards to our Chairman and CEO and the other NEOs, we emphasize the use of performance-based equity awards with 75% of the long-term incentive awards being performance-based. The actual mix of these components for each individual executive officer varies, depending on our evaluation of the executive officer’s responsibilities, the percentage of the executive officer’s compensation that should be at risk, and the reasonable potential compensation in light of that risk.
2020 Cash Compensation. The only elements of our executive officers’ compensation that we pay in cash are base salary and annual incentive compensation. For 2020, we paid the following cash compensation to our NEOs:
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2020 Executive Officers’ Cash Compensation
Names
Base Salary
($)
Non-Equity Incentive
Plan Compensation(1) ($)
Total Cash
Compensation ($)
James C. Ryan, III
Executive Chairman and CEO
807,692
1,393,269
2,200,961
Brendon B. Falconer
Senior EVP and CFO
424,615
477,692
902,307
James A. Sandgren
President and Chief Operating Officer
537,308
604,472
1,141,780
Jeffrey L. Knight
EVP and Chief Legal Counsel
391,577
293,683
685,260
Kendra L. Vanzo
Senior EVP and Chief Administrative Officer
341,923
256,442
598,365
(1)
The Bonus was awarded based on 2020 performance and will be paid on March 12, 2021
Base Salary. Base salary is the only component of compensation that is not subject to the achievement of performance or vesting criteria. Base salary is designed to provide a fixed level of cash compensation for performing the responsibilities associated with an executive’s position. We establish base salary ranges for each position based on the ranges for similar positions at other peer group companies. In general, we target base salary ranges at the median for the peer group. We review base salaries annually and we adjust them in April of each year to take into account such factors as market changes, changes in duties, individual performance, and experience.
In assessing Mr. Ryan’s performance for 2020 compensation decisions, the Compensation Committee considered the role Mr. Ryan played in selecting and leading the management team in the execution in 2019 of The ONB Way strategic plan. The Compensation Committee determined that Mr. Ryan’s leadership skills and financial acumen within the Company were significant contributors to the Company’s success during the year, which set a record for the Company’s financial performance. These accomplishments, and the fact that Mr. Ryan’s base salary lagged significantly behind the median of peers, were considered by the Compensation Committee in its decision to increase Mr. Ryan’s base salary for 2020.
In assessing the performance of Messrs. Falconer, Sandgren and Knight, and Ms. Vanzo, Mr. Ryan subjectively evaluated their contributions to the strategic, operational and financial performance of the Company in 2019. Messrs. Falconer, Sandgren and Knight, and Ms. Vanzo met or exceeded the performance expectations set for them for 2019, and based on Mr. Ryan’s recommendation, the Compensation Committee increased their base salaries in 2020.
Named Executive Officer
2020 Base Salary ($)
Effective Date
James C. Ryan, III
Chairman and CEO
825,000
First payroll date in April 2020
Brendon B. Falconer
Chief Financial Officer
435,000
First payroll date in April 2020
James A. Sandgren
President and Chief Operating Officer
550,000
First payroll date in April 2020
Jeffrey L. Knight
EVP and Chief Legal Counsel
400,000
First payroll date in April 2020
Kendra L. Vanzo
Senior EVP and Chief Administrative Officer
350,000
First payroll date in April 2020
Annual Incentive Compensation. Our practice is to award cash incentive awards based on our achievement of pre-established objective performance goals. The objective of awarding annual incentive compensation is to reward short-term financial and operational performance. The Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan, which includes the Short-Term Incentive Compensation Plan or “STIP”, and which was approved by shareholders in 2008, amended and restated as of May 10, 2012, further amended and restated as of April 27, 2017, and upon approval of the shareholders at this Annual Meeting, will be further amended as of April 29, 2021 (the “Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan”), is intended to be our primary vehicle for awarding such incentives. The STIP does not preclude us from making discretionary bonus
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payments or special awards to STIP participants outside of the STIP. In establishing performance goals for 2020, the Compensation Committee made a determination at the beginning of 2020 to exclude certain charges associated with acquisitions and branch closings that occurred in 2020 and charges related to the implementation of The ONB Way Strategic Plan. The Compensation Committee also made a determination to exclude charges incurred as a result of any GAAP charges deemed non-recurring and certain severance charges.
The amount of cash incentive payments under the STIP is based entirely on target incentive potentials and the achievement of the performance goals established by the Compensation Committee at the beginning of the year. Actual payout levels are determined by the Compensation Committee after evaluating performance through the end of the year and reviewing peer and survey data provided by WTW. The percentage payout levels are consistent with the payout levels paid to similarly situated executives within the Company’s peer group.
The 2020 STIP contains targeted annual incentives and provides an opportunity for participants, including the NEOs, to earn between 50% and 150% of their target opportunities provided certain performance thresholds are met. The Compensation Committee believes having a payout range helps to ensure that pay varies with performance and aligns it with market. No payouts under the STIP will be made for performance below minimum required performance. If threshold is achieved, an incentive payout equal to 50% of targeted incentive level for each of the NEOs will be paid. If the targeted profitability measures are achieved, each of the NEOs will receive 100% of the target incentive payout.
In practice, the Compensation Committee makes recommendations that the Board then approves or adjusts. The Performance Measures, as well as the weighting given to the measures, for the 2020 STIP for Messrs. Ryan, Falconer, Sandgren and Knight and Ms. Vanzo included the following:

The Compensation Committee adopted the performance measures of ROATCE and EPS growth as part of the STIP performance measures for 2020 because of their correlation with creating shareholder value. The Compensation Committee elected to keep Efficiency Ratio as part of the STIP design to ensure management focuses on managing expenses within the Company.
The Compensation Committee established the 2020 potential payouts to each NEO. Under the STIP, the target incentive payout for the Chairman and CEO was established at 115% of base salary. The target incentive payout for the President and Chief Operating Officer was established at 75% of base salary. The target incentive payout for the CFO was established at 75% of base salary, and the target incentive payout for the other NEOs was established at 50% of base salary. The maximum payout under the STIP is 150% of the target incentive payout and is earned only when actual performance significantly exceeds the target.
The 2020 STIP performance and payout results for Messrs. Ryan, Falconer, Sandgren and Knight, and Ms. Vanzo were as follows, resulting in a bonus payout of 150% of target:
 
STIP
Target
2020
Results
Performance
Level
Weight
Percentage
Performance
Factor
EPS(1)
$1.40
$1.55
150.0%
60%
90.0%
Efficiency Ratio(1)
57.90%
55.58%
150.0%
20%
30.0%
ROATCE(1)
14.21%
14.96%
150.0%
20%
30.0%
Total Percentage Earned
 
 
 
 
150.0%
(1)
Adjusted for factors approved by the Compensation Committee as described above.
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Percentage amounts under the caption “Performance Factor” in the table above reflects the overall percentage of annual incentive compensation earned with respect to each metric after giving effect to the weighting factor applied to the metric and the performance level achieved for that metric. The “Total Percentage Earned” is the sum of the Performance Factors for all metrics.
Long-Term Incentive Compensation. We believe that stock ownership by our executive officers is an important tool for aligning their interests with those of our shareholders over the long-term. Therefore, our long-term incentive compensation consists entirely of equity compensation awards.
In 2020, the awards for the Chairman and CEO and other NEOs consisted of a combination of Performance-Based Restricted Stock Units and Service-Based Restricted Stock. The majority of the value awarded (75%) consisted of Performance-Based Restricted Stock Units, as illustrated below:
Named Executive Officer Long-Term Incentive Compensation
Performance-Based Restricted Stock Units: 75%
Internal Measure: 50%
Return percentage of ROATCE relative to peer group measured over a three-year performance period ending December 31, 2022.
 
External Measure: 50%
Total shareholder return relative to peer group measured over a three-year period ending December 31, 2022.
Service-Based Restricted Stock: 25%
Three-Year Annual Vesting: 100%
The restricted stock will vest in three approximately equal annual installments over a three-year period ending December 31, 2023.
Each of these forms of award encourages executives to use their best efforts to increase the value of our stock, since the value of the awards increases with the value of our stock. In addition, because an executive officer’s right to an award generally vests over time, such awards provide a valuable retention tool.
Our practice is to determine the dollar amount of equity compensation that we want to provide, based on consultation with the compensation consultant who advises the Compensation Committee concerning current market practices. In general, we seek to pay equity incentive compensation that approximates the median for our peer group if targeted performance is achieved, and the 75th percentile for our peer group if maximum performance is achieved. The Compensation Committee typically makes recommendations regarding equity compensation awards at its first meeting in January of each year, depending upon the availability of the financial results for the preceding year. Typically, these awards are then approved or adjusted by the Board at its next meeting. We make the awards as early as practicable in the year and communicate them to executive officers so that the incentives will be known as early as practicable, thereby maximizing their potential impact. We make equity awards after financial data for the preceding year is available, because this information enables us to refine our expectations for the current year. The proximity of any awards to earnings announcements or other market events is coincidental. Under special circumstances, such as the employment of a new executive or substantial promotion of an existing executive, the Compensation Committee may award equity compensation at other times during the year.
Long-term incentive compensation awards were made on January 30, 2020, pursuant to the Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan. These awards are reflected on the table on page 45 entitled “Grants of Plan-Based Awards During 2020.”
Performance-Based Restricted Stock Units. The Compensation Committee continued the use of performance-based restricted stock units (“PSUs”) in 2020 because their use simplifies the administration of the performance awards, as shares are not actually granted until the end of the performance period and dividends are not paid on the PSUs until the PSUs vest into earned shares. In general, our executive officers will not earn performance-based restricted stock units unless we meet pre-established objective performance criteria for the performance period, and the executive officer remains employed throughout the performance period and any required service period.
Performance-based restricted stock units are earned based on two metrics: total shareholder return (“TSR”) relative to the Company’s Peer Group and three-year return on average tangible common equity (“ROATCE”) relative to the Peer Group. The Committee allocated 50% of the award based on a measure of relative TSR and 50% based on
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relative ROATCE. The Committee believes that relative TSR ensures that the NEOs’ interests are closely aligned with shareholders. The Committee believes ROATCE is a key factor to long-term profitable growth and returns. There is a strong correlation of higher ROATCE to higher market price-to-tangible book value (“P/TBV”) valuations for the common stock of publicly-traded bank holding companies.
In general, the NEOs must be employed by the Company through the distribution date in order to receive a distribution of any 2020 performance-based restricted stock unit awards earned for the performance measures. However, if the executive officer terminates employment on account of disability or retirement, he or she will be treated the same as if he or she had continued employment.
For each PSU award, we have established threshold, target and maximum performance levels. The actual performance level at the end of the performance period will determine the percentage of PSUs earned. No PSUs will be earned if results are less than the required threshold performance. If target is achieved, all of the units awarded will be earned. If maximum performance is achieved, the number of PSUs earned will multiply by 1.5. Earned PSUs are converted to shares after the performance period has ended and actual results have been evaluated relative to the established threshold, target and maximum performance levels. The following performance goals were approved for 2020 awards:
Measure
Threshold
Target
Maximum
Relative TSR (50%)
25th percentile
50th percentile
80th percentile
Three-Year Relative ROATCE (50%)
25th percentile
50th percentile
80th percentile
Associated Payout
25% of target
100% of target
150% of target
Total Shareholder Return is calculated as the one-month average stock price for the period ending December 2019 compared to the one-month average stock price for the period ending December 31, 2022 for the Company and the Peer Group. The one-month average stock price will be determined by averaging the closing stock price of each day during the one month ending on the applicable December 31, including adjustments for cash and stock dividends. TSR is compared relative to our Peer Group used for compensation purposes as defined on page 32.
ROATCE is calculated by ranking the Company’s performance against peers at the end of the three-year performance period (the “Performance Period”). If the Company’s ROATCE performance level for the Performance Period is greater than or equal to 8.50% but less than 17.61%, the Company’s ROATCE percentile rank in the Peer Group will be determined by interpolating the Company’s percentile ranking between the peers immediately above and below the Company, based on differences in ROATCE, to determine the percentage, if any, of the shares earned under the PSU award. The Company is excluded from the Peer Group for purposes of the calculation.
If the ROATCE performance level for the Performance Period is greater than 17.61%, then maximum performance is achieved, and 150% of the shares shall be issued with respect to each PSU. Achievement below the 8.50% threshold for the Performance Period will result in no payout for the ROATCE award.
Shares received from any earned performance-based restricted stock units must be held until the stock ownership guidelines are met. Dividends earned on vested PSUs accumulated during the performance period, are paid in stock after the end of the performance period and are subject to the holding requirement.
If an executive officer’s employment is terminated on account of death, the target performance criteria will be deemed satisfied, and restrictions on the PSUs will lapse. If the executive officer terminates employment on account of disability or retirement, the executive officer will be treated the same as if he or she had continued employment through the end of the performance period. For the 2020 awards, if there is a Change in Control (as defined in Old National Bancorp Amended and Restated 2008 Incentive Compensation Plan) and the NEO is terminated, then performance-based restricted stock units awarded to the NEO will be paid as if targeted performance had been achieved.
Service-Based Restricted Stock. We grant service-based restricted stock for various reasons: these stock awards create ownership, which aligns the executive’s interests with those of other shareholders; and these awards contribute to the retention of key employees, whose future service is deemed essential to the ongoing success of the Company. In general, with the exception of dividends, an executive officer will not realize value for service-based restricted stock unless the executive officer remains employed during the required service period. If an executive officer terminates employment on account of death, is terminated by the Company without cause, or terminates with good reason following a Change in Control of the Company, restrictions on the stock will lapse. If the executive officer
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terminates employment on account of disability or retirement, the executive officer will be treated the same as if he or she had continued employment. The service-based restricted stock granted in 2020 will vest in three approximately equal annual installments over a three-year period ending on February 1, 2023. We pay cash dividends on service-based restricted stock to our executive officers during the restricted period. The service-based restricted stock must be held by the NEO until the stock ownership guidelines are met even if the restrictions have lapsed.
In 2020, the Compensation Committee granted service-based restricted stock to the Chairman and CEO and other NEOs in order to encourage ownership of Company stock, align the Company with peer group practices and to ensure the retention of key executive officers in the Company. Twenty-five percent of the total equity award for the Chairman and CEO and other NEOs was in the form of service-based stock in 2020.
Retirement Plans. Until December 31, 2005, we maintained a traditional qualified defined benefit pension plan, known as the Old National Bancorp Employees’ Retirement Plan (“Retirement Plan”). We froze the Retirement Plan as of December 31, 2001, except for employees who were at least age 50 or who had 20 years of credited service as of December 31, 2001. As of December 31, 2005, we froze the Retirement Plan for all remaining employees. We also maintained a nonqualified retirement plan to replace any reduction in benefits under the Retirement Plan due to limitations on benefits under the Internal Revenue Code (“Supplemental Plan”). We also froze the Supplemental Plan as of December 31, 2005. No executive officer will earn further benefits under the Retirement Plan or the Supplemental Plan after 2005, although benefits as of December 31, 2005, are preserved.
In 2016, the Board terminated the Retirement Plan and paid out the proceeds to former and current employees on October 21, 2016. The Supplemental Plan was not terminated.
We continue to maintain a tax-qualified defined contribution plan, known as the Old National Bancorp Employee Stock Ownership and Savings Plan (“Savings Plan”), for eligible employees. The Savings Plan allows employees to make pre-tax and Roth 401(k) contributions. Subject to the conditions and limitations of the Savings Plan, new hires are automatically enrolled in the Savings Plan with an automatic deferral of 6%, unless participation is changed or declined. All active participants receive a Company match of 75 cents on the dollar of the first 4% contributed into the Savings Plan, and 50 cents on the dollar of the next 4% of eligible compensation that is contributed to the Savings Plan. We may also make profit sharing contributions, in our discretion. To receive profit sharing contributions for a year, an employee must have (i) completed at least 1,000 hours of service during the year and (ii) been employed on the last day of the year or retired on or after age 65, died, or became disabled during the year.
We also maintain a nonqualified deferred compensation plan, known as the “Executive Deferred Compensation Plan,” for a select group of management employees designated by the Compensation Committee. All executive officers are eligible to participate in the plan. An executive officer may elect to defer up to 25% of his or her regular compensation, and up to 75% of his or her annual bonus under the STIP, in which case the deferral amount will be credited to his or her plan account. The Executive Deferred Compensation Plan applies the same matching formula that is used for the Savings Plan. We provide matching contribution credits under the plan, reduced by any matching contributions under the Savings Plan. In addition, we may provide discretionary contribution credits to make up for any reduction in discretionary profit-sharing contributions under the Savings Plan due to Internal Revenue Code contribution limits applicable to tax-qualified retirement plans. We did not provide discretionary credits for 2020.
We credit an executive officer’s plan account with earnings based on the hypothetical earnings of an investment fund consisting of Company stock, the return on a recognized market index selected by the Compensation Committee, or a combination of the two, as elected by the executive officer. For the market index fund, we use a Bloomberg index, which approximates the risk and return associated with a diversified high-quality corporate bond fund. The earnings credited under the Executive Deferred Compensation Plan could be in excess of earnings that would have been credited using the applicable federal long-term rate. Any excess earnings are reported in column (h) of the Summary Compensation Table on page 43.
All amounts paid under the Executive Deferred Compensation plan are paid from our general assets and are subject to the claims of our creditors. Except in the case of financial emergency, an executive officer’s benefits under the plan may not be distributed until after termination of employment. In general, an executive officer may elect to receive plan benefits in a lump sum or in annual installments over two to ten years.
Employment Arrangements. We have entered into employment agreements or severance and change in control agreements with each of the NEOs (referred to collectively as “employment agreement(s)” or “agreements”). The employment agreements provide for:
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No Gross-up on Severance Benefits - The Company has adopted a “best after-tax provision” whereby the executive receives the full 280G payment and has the responsibility for any excise tax, or the payment is reduced to the safe harbor amount, whichever will put the executive in the best after-tax position with the most compensation and income.
No Gross-up on Perquisites - There will be a continuation of benefit coverage to be provided by the Company for the requisite number of months. However, any tax resulting from these payments will be the executive’s responsibility.
No Walk Away Provision - The Company has eliminated the ability of the executive to voluntarily terminate his or her employment within 12 months of a Change in Control without good reason. The executive will continue to have the right to terminate employment within 24 months of a Change in Control with good reason and receive severance and other benefits.
These agreements were adopted after reviewing prevailing market and developing executive compensation best practices. Under each of their respective agreements, the NEOs are entitled to a base salary, incentive compensation (both cash and equity) and other employee benefits as determined by the Board. Based on information provided by the Compensation Committee’s compensation consultant, the Committee determined that the benefits, including the various multiples of components of compensation, were within the market range for such payouts and benefits. The Committee regularly reviews the Company’s employment agreements and uses peer data to determine whether these arrangements are consistent with prevailing market practices.
Pursuant to the employment agreements, we are generally obligated to pay certain non-change in control severance benefits to the NEO, if we terminate his or her employment without cause, or the executive resigns within 90 days after we have taken certain actions that adversely affect him or her. An NEO must satisfy the terms of the agreement, including its non-solicitation and non-compete provisions, to receive his or her severance benefits.
The employment agreements also provide for change in control severance benefits for each NEO. The Company is required to pay change in control severance benefits if, within two years following a change in control (as defined in the agreements), we terminate the NEO’s employment for a reason other than “Cause” or the NEO’s disability, or if the executive resigns within two years after a change in control after we have taken certain actions detrimental to the NEO.
The Compensation Committee believes that the employment agreements, which include change in control severance benefits, assure the fair treatment of the NEOs in relation to their professional careers with the Company by assuring them of some financial security in the event of a change in control. The change in control provision also protects the shareholders of the Company by encouraging the NEOs to continue to devote their full attention to the Company without being distracted by the need to seek other employment following the change in control. The Compensation Committee established the change in control payouts to each of the NEOs after reviewing peer data and consulting with the compensation consultant.
In the Committee’s view, severance benefits, including in the event of a change-in-control, are contingent and operate as a form of insurance rather than a principal component of compensation strategy. In that regard, the Committee does not reduce or otherwise modify compensation elements on the basis of eligibility for severance benefits. The Potential Payments on Termination or Change-in-Control tables on pages 50 through 54 and the discussion of the employment agreements beginning on page 48 set forth the estimated values and details of the termination benefits under various scenarios for each of the NEOs.
Perquisites and Other Compensation. Detailed information regarding perquisites and other compensation is provided in note 5 to the Summary Compensation Table on page 44. In general, we believe that perquisites should not constitute a consequential portion of any executive officer’s compensation. The Company makes available to the NEOs financial counseling services to assist them in obtaining financial planning advice. This benefit is provided to the executives, but the executives pay any tax due on the benefit.
James C. Ryan, III and James A. Sandgren received country club membership allowances of $15,420 and $16,380, respectively, for business development purposes. No other executive received perquisites in excess of $10,000 in 2020. Moreover, certain of the perquisites provided to executive officers also provide a benefit to the Company. For example, executive physicals, which the Company requires annually for the CEO and every other year for the other NEOs, help the Company to assure that executive officers do not postpone addressing health issues that could result in great cost to the Company in lost productivity and covered treatment costs.
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Stock Ownership Guidelines. In 2010, the Compensation Committee and Board amended the previously established stock ownership guidelines for the Company’s executive officers, including the NEOs, to make the guidelines more consistent with market practices, and to ensure executives retain a specified percentage of stock of the Company until the target ownership level is achieved and to reduce the risk that stock price volatility could impact the achievement of the target ownership requirement. Under the guidelines, the NEOs are required to hold shares of our stock with a value which is the lesser of the following:
Position or Salary
Target Ownership Guidelines
Chief Executive Officer
5x salary in stock or 200,000 shares
Chief Operating Officer
4x salary in stock or 100,000 shares
Salary equal to or greater than $250,000
3x salary in stock or 50,000 shares
Salary below $250,000
2x salary in stock or 25,000 shares
As of the date of the Proxy Statement, each of the NEOs has met the stock ownership guideline requirement. For purposes of the guidelines, vested in-the-money options, unearned performance-based restricted stock units, unvested service-based restricted stock and phantom shares in the Nonqualified Deferred Compensation Plan are taken into account.
Recoupment Policy. In 2010, the Board adopted a Bonus Recoupment, or “Clawback,” Policy that provides the Board with authority to recover a bonus or other cash or equity incentive paid to any NEO or executive officer in appropriate circumstances where there has been a material restatement of the Company’s financial results. The Board believes that this Policy, along with a requirement that executive officers maintain a significant level of stock ownership in the Company while they are employees, provides significant incentives to help ensure the Company is managed with a long-term view.
Prohibition on Hedging and Pledging. All directors, officers and employees (collectively “Company Personnel”), including family members and anyone designated to engage in securities transactions on behalf of Company Personnel, are prohibited at all times from (a) holding any Company securities in a margin account, or borrowing against any account in which Company securities are held, or pledging Company securities as collateral for loan without the approval of the Chief Legal Counsel; (b) engaging in puts, calls or other derivative transactions relating to the Company’s securities; (c) short-selling securities of the Company; and (d) purchasing any financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of any equity securities of the Company. The foregoing restrictions apply to all securities of the Company owned directly or indirectly by Company Personnel, including securities of the Company owned by family members where the Company Personnel is deemed to beneficially own such securities, and their respective designees. The foregoing restrictions shall not preclude any Company Personnel, their family members or their designees from engaging in general portfolio diversification or investing in broad-based index funds.
Executive Compensation in 2021
In January 2021, based on results of a review by executive management of the compensation program, the Compensation Committee approved certain changes to the program which will be effective in 2021. In this review, the Compensation Committee considered the balance between short and long-term incentives, cash versus stock, revenue and risk metrics and absolute and relative Performance Measures and considered the time horizon of payments versus risks.
In approving these changes, the Compensation Committee and Board recognized the improvements in financial results in 2020 over 2019 even in the midst of an economic downturn caused by a world-wide pandemic, and the fact that 2020 set a record for the Company’s financial performance. The Committee and Board also noted the misalignment of executive compensation with market, finding total cash compensation was positioned below the market median, and in some cases, below the 25th percentile of the peer group driven by lower base salaries and target cash incentives positioned below the market median.
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Compensation Element
Changes for 2021
Base Salary
Salaries have been reviewed for all NEOs, with changes effective the first pay date in April 2021