Farmers & Merchants Bancorp (NASDAQ:MBIN) Inc. (NASDAQ: FMAO) has entered into a new employment agreement with its President and Chief Executive Officer, Lars B. Eller.
The agreement, effective from September 1, 2024, was announced Tuesday, following the expiration of Mr. Eller's previous contract on August 31, 2024.
Under the terms of the new three-year contract, which mirrors the previous one, Eller will continue to lead both the Farmers & Merchants State Bank and its parent company, F&M.
His annual base salary is set at $504,686, with provisions for potential increases. Additionally, Eller will be eligible for various employee benefit plans and incentive programs.
The agreement includes participation in the Bank’s Annual Cash Incentive Plan and 401(k) Plan, grants of restricted stock shares amounting to 25% of his base salary, and stock share grants equivalent to those given to non-employee directors.
Eller will also receive four weeks of vacation in the first year and five in the subsequent years, along with a monthly car allowance, life insurance, and coverage for business expenses.
In the event of a change in control at the bank, Eller is entitled to a severance package equal to twice his annual base salary plus the average bonus and incentive compensation from the preceding three years. The package would also extend his health, disability, dental, and life insurance coverage for 12 months post-change.
The contract stipulates non-compete and non-solicit covenants during and for one year after the termination of Mr. Eller's employment, covering areas where the bank operates.
In other recent news, Farmers & Merchants Bancorp recently reported a 4.8% increase to its quarterly cash dividend, raising it to $0.22 per share, following a rise in its total assets to $3.28 billion. In a strategic move, Farmers & Merchants Bancorp has also switched to a new auditor, Plante & Moran, PLLC, following a thorough evaluation process.
The change is expected to take effect from the year ending December 31, 2025, with the previous auditor, Forvis Mazars, LLP, completing the audit for fiscal year 2024. The company has also expanded its operations into Indiana and Michigan under CEO Lars Eller's leadership, a move that shows promise for long-term growth.
Piper Sandler recently initiated coverage on Farmers & Merchants Bancorp with a 'Neutral' rating, acknowledging the company's historical strength in agricultural lending and underwriting. The bank's robust risk management practices and strategic growth initiatives were also noted.
InvestingPro Insights
As Farmers & Merchants Bancorp Inc. (NASDAQ:FMAO) solidifies its leadership with the reappointment of CEO Lars B. Eller, investors may find value in the company's consistent financial performance. The firm's dedication to shareholder returns is evidenced by a 14-year streak of raised dividends, a testament to its financial stability and commitment to investors. Moreover, the company has maintained dividend payments for an impressive 28 consecutive years, highlighting a reliable income stream for shareholders.
From a valuation standpoint, FMAO's market capitalization stands at $359.73 million, with a price-to-earnings (P/E) ratio of 17.15, reflecting investor expectations for future earnings. The company's recent performance includes a strong return over the last three months, with a 27.65% price total return, and an even more significant 38.6% return over the last six months, indicating robust investor confidence and market momentum.
For those considering an investment, the company's next earnings date is slated for October 23, 2024, which could provide further insights into its financial trajectory. For additional analysis and metrics, there are over 10 InvestingPro Tips available, including analyst revisions and profitability predictions, which can be accessed for FMAO at InvestingPro.
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