Peoples State Bank Senior Management Incentive Compensation Plan
This agreement outlines the Senior Management Incentive Compensation Plan for executive officers of PSB Holdings, Inc., acting as officers of Peoples State Bank. The plan provides annual cash bonuses based on a formula: 70% of the bonus is tied to the bank’s net income target, and 30% is based on the achievement of individual department goals. Incentive payments are made after the fiscal year ends, once results are determined. The amount of compensation varies depending on the level of net income and departmental goal achievement.
Exhibit 10.3
Peoples State Bank
Senior Management Incentive Compensation Plan
The Senior Management Incentive Compensation Plan provides an annual cash incentive opportunity for executive officers of PSB Holdings, Inc. in their capacities as Bank officers. Incentive compensation is determined under a formula that derives 70% of the incentive compensation amount from the achievement of the Bank’s net income target and 30% from the achievement of the officer’s department goals. The following table illustrates the potential incentive compensation at various levels of net income and selected levels of achievement of department goals. Incentive compensation is paid in cash following the determination of results under the plan for the preceding fiscal year.
% of Targeted Net Income | % of Department Goals Achieved | ||||||
Before Bank Wide Year-end Incentive Expense | 25% | 50% | 75% | 100% | |||
Incentive Compensation as a Percentage of Base Salary | |||||||
less than 95% | .8% | 1.5% | 2.3% | 3.0% | |||
95% | 2.2% | 2.9% | 3.7% | 4.4% | |||
97% | 3.6% | 4.3% | 5.1% | 5.8% | |||
98% | 5.0% | 5.7% | 6.5% | 7.2% | |||
99% | 6.4% | 7.1% | 7.9% | 8.6% | |||
100% | 7.8% | 8.5% | 9.3% | 10.0% | |||
102% | 9.7% | 10.6% | 11.6% | 12.5% | |||
105% | 12.4% | 13.6% | 14.8% | 16.0% | |||
107% | 15.5% | 17.0% | 18.5% | 20.0% | |||
109% | 19.4% | 21.3% | 23.1% | 25.0% | |||
111% | 23.3% | 25.5% | 27.7% | 30.0% | |||
