Exhibit 10.12
Summary Sheet of Director and Officer Compensation
Outside Directors
On January 24, 2007, NorthWest Indiana Bancorp’s (the “Bancorp”) Directors approved an
increase in annual director’s fees paid to outside directors. For 2007, $22,750 in annual fees will
be paid to outside directors. Directors are reimbursed for expenses incurred in connection with
attendance at Board and Committee meetings.
Inside Directors and Executive Officers
On January 24, 2007, the Bancorp’s Compensation and Benefits Committee of the Board of
Directors approved executive officer base compensation for 2007 and authorized payment of incentive
compensation for 2006 performance. The individuals listed below will begin to receive their new
base salary and incentive compensation payment on February 1, 2007:
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2007 |
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2006 |
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Base |
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Incentive |
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| Inside Directors and Executive Officer |
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Salary |
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Compensation |
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David A. Bochnowski, Director, Chairman and
Chief Executive Officer |
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$ |
347,563 |
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$ |
46,976 |
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Joel Gorelick, Director, President and Chief
Administrative Officer |
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$ |
209,575 |
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$ |
22,205 |
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Edward J. Furticella, Director and Consultant |
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$ |
85.59 |
(1) |
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$ |
8,260 |
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Jon E. DeGuilio, Executive Vice President,
General Counsel and Secretary |
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$ |
141,341 |
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$ |
7,325 |
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Robert T. Lowry, Senior Vice President and
Chief Financial Officer |
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$ |
125,823 |
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$ |
7,575 |
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| (1) |
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Mr. Furticella is a part-time employee with the Bancorp and earns an hourly rate of
pay. |
Incentive Compensation Plan
The Bancorp’s Compensation and Benefits Committee has established an incentive compensation
system designed to offer positive salary rewards for peak performance to all employees. The
incentive compensation is geared towards rewarding performance that results in increased
profitability of the Bancorp. In addition, incentive compensation is awarded for consistent
performance tied to corporate goals rather than short-swing profits. The incentive compensation is
discretionary and approved by the Board on an annual basis, as strategic goals are achieved. The
incentive targets are set by the Board at the beginning of the fiscal year, but the Board retains
the prerogative to review the incentive outlook at the end of the fiscal year.
The incentive compensation is paid from a pool of funds created each year based on the
Bancorp’s return on equity, return on assets, and increase in earnings per basic share. Each of the
three measures is tied to a factor, which is then multiplied by the Bancorp’s annual net income
after incentive compensation expense to determine the incentive compensation pool. The factors are
set forth in the attached table. The Board also has the discretion to increase the size of the
incentive compensation pool to reward outstanding performance consistent with long and short-range
goals. No Board discretionary funds were included in the 2006 incentive compensation pool. The
incentive
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compensation pool is
generally allocated to the Bancorp’s employees in the following manner: 30% to the Chief Executive
officer, 52% to the Chief Administrative Officer and Vice Presidents and 18% to other employees.
The Chief Executive Officer, with Board approval, may reallocate a portion of his incentive
compensation pool to the other compensation pools.
The allocated incentive compensation pools can be utilized to supplement the cash remuneration
of the Bancorp’s management according to the following guidelines: Vice Presidents up to 10% of
salary; Senior Vice Presidents up to 20% of salary; President and Executive Vice President up to
35% of salary; and Chief Executive Officer up to 50% of salary. The incentive compensation for
Vice Presidents, Senior Vice Presidents, Executive Vice President and President is awarded based on
a performance review by the Chief Executive Officer, which is reviewed and approved by the
Bancorp’s Compensation Committee and Board. The performance review incorporates the following
criteria: results achieved, goal attainment, and core competencies for leadership, management,
communication, initiative and time management, commitment to stock ownership, community leadership
and professional development. The Compensation and Benefits Committee and Board conduct the Chief
Executive Officer’s performance review following the same criteria and determine his incentive
compensation.
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