FIRST MERCHANTS CORP (FRME)
Sector: Financials
2026 Annual Meeting Analysis
FIRST MERCHANTS CORP · Meeting: May 19, 2026
Directors FOR
9
Directors AGAINST
0
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Nine (9) Directors
Director since 2013 with relevant agricultural and real estate expertise; FRME's 3-year TSR of +30.9% is strong positive, and the gap versus the peer group median (-12.1pp) is well below the 65pp threshold required to trigger a vote against; no overboarding, attendance, or independence concerns.
Director since 2022 with economic development expertise relevant to the bank's community-focused mission; joined within the past 24 months of the 3-year measurement window, and in any case the TSR trigger does not apply given the gap is only -12.1pp versus the 65pp threshold; no other concerns identified.
Director since 2019 with community banking advisory experience; TSR trigger does not apply (peer gap -12.1pp vs. 65pp threshold); serves on one other public company board (RLI Corp), well within the four-board overboarding limit; no attendance, independence, or qualification concerns.
Former CEO of First Merchants with nearly 35 years of banking industry experience; classified as non-independent but does not serve on the audit or compensation committee; TSR trigger does not apply; no overboarding or attendance concerns.
Director since 2021 with legal, regulatory, and governance expertise; serves on one other public company board (Community Health Systems), within the overboarding limit; TSR trigger does not apply; chairs the Nominating and Governance Committee as an independent director with no concerns.
Director since February 2023, just over 24 months tenure; TSR trigger does not apply in any case (peer gap -12.1pp vs. 65pp threshold); brings technology and university leadership expertise relevant to the bank's digital and economic growth strategy; no overboarding, attendance, or independence concerns.
Director since 2017 with prior community banking experience and strong local civic presence in the bank's headquarters market; TSR trigger does not apply; no overboarding, attendance, or independence concerns.
Director since 2004 serving as Board Chair with extensive banking, finance, and risk management expertise; serves on one other public company board (First Internet Bancorp), within the overboarding limit; TSR trigger does not apply; designated as an audit committee financial expert with no independence or attendance concerns.
Appointed to the board in February 2026, well within the 24-month new-director exemption from the TSR trigger; brings 42 years of community banking experience including as CEO of First Savings Financial Group; no overboarding, attendance, or independence concerns.
All nine director nominees receive a FOR vote. FRME's 3-year price return of +30.9% is solidly positive, and the underperformance gap versus the company-disclosed peer group median of -12.1 percentage points is far below the 65pp threshold required to trigger an against vote for strong-positive-TSR companies. No director is overboarded, attendance was satisfactory for all (no director attended fewer than 75% of meetings), and the board discloses a skills matrix. Two non-independent directors (Rechin and Myers) do not serve on audit or compensation committees. The board includes two designated audit committee financial experts.
Say on Pay
✓ FORCEO
Mark K. Hardwick
Total Comp
$2,398,488
Prior Support
93.13%%
CEO Mark Hardwick's total compensation of $2,398,488 is reasonable for a CEO of a $2.5 billion regional bank and is within an acceptable range of market benchmarks for this title, sector, and market cap band. The prior year say-on-pay vote received 93.13% support, well above the 70% threshold that would require a response. Pay mix is appropriately weighted toward variable compensation: the CEO's fixed base salary was $826,538 (about 34% of total pay), with the remainder coming from a cash incentive tied to operating earnings per share and an equity award vesting over three years, satisfying the policy's requirement that at least 50-60% of pay be performance-linked. The company has a meaningful clawback policy adopted in 2023 in compliance with SEC and Nasdaq rules, and the incentive plan uses a measurable, pre-established earnings-per-share target with tiered payout levels, reducing manipulation risk. While FRME's stock has underperformed its peer group modestly over three years (-12.1pp), variable pay is not materially above benchmark levels and the incentive structure is appropriately conditioned on performance, so no pay-for-performance misalignment trigger is met.
Auditor Ratification
✓ FORAuditor
Forvis Mazars, LLP
Tenure
44 yrs
Audit Fees
$893,205
Non-Audit Fees
$61,770
The non-audit fee ratio is approximately 6.9% of audit fees (audit-related fees of $61,770 vs. audit fees of $893,205), well below the 50% threshold that would raise independence concerns. Although Forvis (or its predecessor) has served as auditor since at least 1982 — a tenure exceeding 44 years, which normally triggers a No vote under the policy's 25-year threshold — the audit committee provides a specific and detailed rationale in the proxy: it annually evaluates auditor qualifications, independence, and performance; cites Forvis's deep institutional knowledge and industry expertise; confirms lead partner rotation as required by law; and explicitly concluded that retaining Forvis is in the best interest of shareholders. This level of disclosure and active annual evaluation constitutes the compelling rationale the policy requires to pass the tenure trigger, and the non-audit fee ratio remains clean, supporting a FOR vote.
Overall Assessment
The 2026 First Merchants Corp annual meeting presents three standard proposals — director elections, auditor ratification, and say-on-pay — all of which receive FOR votes. The director slate is clean with no TSR trigger, no overboarding, and satisfactory attendance; the auditor fee structure is well within independence guidelines; and CEO pay is reasonable in level and mix with strong prior-year shareholder support of over 93%. No stockholder proposals appear on this year's ballot.
Compensation Peer Group
10 companies disclosed in 2026 proxy filing