Merchants Bancorp Stock Compensation Disclosure
Note 20: Share-Based Payment Plans
Equity-based incentive awards for Company officers are currently issued pursuant to the 2017 Equity Incentive Plan. Additionally, the Compensation Committee of the Board of Directors approved a plan for non-executive directors to receive a portion of their annual retainer fees in the form of shares of common stock. As of January 1, 2024, they are to receive a portion of their annual fees, issued quarterly, in the form of restricted common stock equal to $70,000 per member, rounded up to the nearest whole share.
The following chart provides equity-based incentive awards and Board fees paid in shares for the years ended December 31, 2025, 2024, and 2023.
Year Ended December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
(In thousands, except share data) | |||||||||
Equity-based incentive awards to Company officers: | |||||||||
Shares issued | 80,875 | 88,658 | 84,335 | ||||||
Expenses recognized | $ | 3,312 |
| $ | 3,274 | $ | 2,671 | ||
Unvested shares awarded |
| 209,597 |
|
| 253,816 |
| 256,192 | ||
Unrecognized compensation costs | $ | 6,461 |
| $ | 7,122 | $ | 6,801 | ||
Equity-based retainer fees to non-executive Board members: |
| |
|
| |
| | ||
Shares issued |
| 14,329 |
|
| 12,166 |
| 12,173 | ||
Expenses recognized | $ | 490 |
| $ | 491 | $ | 351 | ||
The Company established an ESOP in 2020 to provide shares of stock for all employees who meet certain requirements. Additional details on these benefits were provided in Note 19: Employee Benefits.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Mar 12, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 4, 2022 | |
| 2020 | Mar 5, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 28, 2018 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.