Gregory Garrabrants
Axos FinancialAbout Gregory Garrabrants
Gregory Garrabrants is President and Chief Executive Officer of Axos Financial, Inc. (since October 2007) and has served as a director since March 2008; he is 53 and is not an independent director under NYSE rules . Education: JD, magna cum laude (Northwestern Law); MBA with highest distinctions (Kellogg, Northwestern); BS Industrial & Systems Engineering (USC) . FY2025 performance highlights included net income of $432.9 million, diluted EPS $7.43, ROE 17.30%, deposit growth 7.6%, NIM +28 bps to 4.90%, and net charge-offs of 13 bps; 5-year CAGRs: Net Income 18.8%, Revenue 16.7%, EPS 20.0%, Book Value/Share 18.2% . Total shareholder return under his tenure: +4,201% since his October 2007 appointment; over the last 10 fiscal years, average annual return 21.84% (FY2025 TSR 33%; 5-year 344%) .
Board leadership and independence: Axos has an independent Chairman (Paul J. Grinberg), with Garrabrants focused on operations and strategy; Garrabrants serves on no board committees .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Goldman Sachs | Investment banker advising management/directors on strategic planning, capital/liquidity, balance sheet/ALM, value enhancement | Not disclosed | Developed strategic/financial advisory expertise directly relevant to bank performance levers |
| McKinsey & Company | Management consultant leading teams for banks/insurers/asset managers on strategy, sales force effectiveness, risk, org design, restructuring | Not disclosed | Built execution toolkit for growth, risk, and organizational transformation |
| Large Thrift (7th-largest at the time) | SVP, Head of Corporate Business Development (entry into new segments, M&A, JVs, strategic alliances) | Not disclosed | Direct P&L and inorganic growth experience |
| Skadden Arps; Munger, Tolles & Olson; Morrison & Foerster | Summer associate focused on corporate/securities law; federal clerkship | Not disclosed | Legal/accretive experience in securities and governance |
| Deloitte Consulting | Financial advisory services and litigation support | Not disclosed | Early career analytical foundation in finance/controls |
External Roles
The proxy does not disclose any current external public-company directorships for Mr. Garrabrants .
Fixed Compensation
Multi-year CEO compensation (Summary Compensation Table):
| Metric (USD) | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary | $700,000 | $700,000 | $700,000 |
| Target Annual Cash Bonus (% of salary) | 150% target per Agreement | 150% target per Agreement | 150% target per Agreement |
| Non-Equity Incentive (Actual Cash Bonus) | $4,667,806 | $3,714,577 | $2,088,672 |
| Stock Awards (ASC 718 grant-date value) | $5,225,526 | $9,433,632 | $8,892,443 |
| All Other (primarily 401(k) match) | $12,200 | $13,200 | $13,800 |
| Total Compensation | $10,605,532 | $13,861,409 | $11,694,915 |
Notes:
- CEO base salary fixed at $700,000 since Agreement inception (8th percentile of peer group at entry) .
- FY2025 cash bonus computed per formula (target bonus 150% of salary × Individual Factor 0.95 + 2% of after-tax net income above target net income); paid September 2025 .
Performance Compensation
Structure is highly formulaic and linked to challenging performance metrics; 93.9% of CEO FY2025 compensation is performance-based .
| Incentive | Metric/Formula | Target | Actual/Payout | Vesting |
|---|---|---|---|---|
| Short-Term Cash (Annual) | Annual Target Cash Bonus = 150% of salary × Individual Factor (0.8–1.2) + 2%×(After-Tax Net Income – Target Net Income); Target Net Income set by a 15% ROE hurdle on average common equity | ROE target ≥15% (initially ~97th percentile of exchange-traded banks) | FY2025 ROE 17.30%; Individual Factor 0.95; Payout $2,088,672 | Annual cash; no multi-year vest |
| Long-Term Equity (RSUs) | Equity Award ($) = Target Award ($) × Individual Factor + 2%×(Company TSR – XABQ TSR)×Beginning Market Cap; converted to RSUs at Beginning Stock Price | FY2025 Target Award $3.5m at ~$3.04b beginning market cap | FY2025: Company TSR 33% vs XABQ 21%; Individual Factor 0.95; Award value $10,341,723 → 193,811 RSUs; ASC 718 expense reflected as $8.9m over ~5.5 years | CEO awards vest 25% at each fiscal year-end over 4 years |
Additional terms:
- Negative carryforward: Underperformance vs peer index reduces future equity awards; cap on RSU grant 480,000 shares; excess delivered as performance units with max $3m annual payments .
- No single-trigger cash severance; performance emphasis over time .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (as of record date 9/16/2025) | 1,829,426 shares; 3.23% of outstanding; includes 2,890 shares in 401(k) |
| Stock ownership guidelines | CEO must maintain ≥8× salary in stock; CEO reportedly holds 231× base salary in company stock, per shareholder feedback section |
| Unvested RSUs outstanding (6/30/2025) | 119,538 (grant 09/14/23; MV $9,089,670 at $76.04); 281,430 (grant 09/15/24; MV $21,399,937 at $76.04); CEO RSUs vest 25% per year at fiscal year-end |
| Stock vested in FY2025 | 273,169 shares; value realized $20,771,771 |
| Hedging/pledging | Insider Trading Policy prohibits short sales, derivatives, and pledging company securities (speculative transactions) |
Implication: Significant unvested RSUs create multi-year retention and potential periodic supply from vesting (tax withholding and monetization). FY2025 alone saw 273k shares vest for the CEO .
Employment Terms
Agreement: Second Amended and Restated Employment Agreement effective June 30, 2017; automatically renews each January 1 for one year (most recently renewed Jan 1, 2025). RSU associated with renewals is estimated and expensed per ASC 718; grant issuance contingent on continued employment (e.g., FY2025 renewal award to be issued in Sep 2026 if applicable) .
Severance/change-in-control:
- Termination by Company without cause or resignation for good reason: immediate vesting of all equity awards granted prior to termination; pro‑rated Target Annual Cash Incentive; cash severance = 2× base salary; 12 months medical; plus at Company’s option, annual RSU award per Agreement or equivalent cash lump sum .
- Change-in-control termination (within 1 year post-CIC, or certain pre‑CIC terminations tied to pending CIC): lump sum = 3× base salary + Target Annual Cash Award (less any negative carryforward); full acceleration of equity; payment of unpaid prior-year Target Annual Cash; pro‑rated Target Annual Cash for year of termination; pro‑rated annual RSU grant .
- No 280G tax gross-ups; “double trigger” change-in-control design; no single-trigger cash severance .
Illustrative values (assuming 6/30/2025, stock $76.04):
- Upon a change-in-control (no termination): Total value $47,315,667 (includes RSU vesting) .
- CIC + termination by Company/for good reason: Total value $49,415,667 (CIC value plus termination amounts) .
- Termination by Company before a CIC (without cause): Total value $48,740,968 (includes RSU vesting and severance) .
Other benefits:
- No pensions or supplemental retirement; no special perquisites beyond standard employee programs .
Board Service and Governance
- Director class/tenure: Class II director with term ending at 2027 annual meeting; director since March 2008 .
- Roles/committees: No Axos Financial or Axos Bank committee memberships for the CEO .
- Independence and leadership: Not independent (CEO); independent Chairman (Paul J. Grinberg) provides oversight and leads executive sessions .
- Board activity: FY2025—Company board held 16 meetings; Bank board held 21; directors attended >75% of their meetings; all directors attended 2024 annual meeting .
Dual-role implications: Separation of Chair and CEO mitigates CEO/Chair concentration risk; CEO not on audit/compensation/nom-gov committees, preserving committee independence .
Compensation Peer Group, Say‑on‑Pay & Shareholder Feedback
- Peer group used for CEO compensation benchmarking includes: BANC, BOH, OZK, CBU, CVBF, EGBN, FFIN, FHB, GDOT, HTH, INDB, NYCB, PPBI, TFSL, TRMK, UCBI, WAL (with updates since 2017) .
- Say‑on‑pay: Annual advisory vote on agenda in 2025; Compensation Committee considered 2024 results and investor feedback; investors cited value in CEO’s high insider ownership (231× base salary) and relative TSR links in his plan .
Related Party Transactions (Governance watch items)
Employee Loan Program (Bank loans to insiders under program rates):
- CEO: Largest aggregate principal $8,458.3k; principal outstanding $8,089.5k; interest rate 0.43%; interest paid $35.4k in FY2025 . Note: Loans are extended under the Bank’s program using AFR-based rates; monitoring is prudent from a governance risk perspective .
Investment Implications
- Pay-for-performance alignment is strong: cash bonus requires ≥15% ROE and formulaic link to after-tax net income; equity awards scale with relative TSR vs XABQ, include negative carryforwards, and vest over four years—promoting long-term value creation and retention .
- Retention vs. selling pressure: Large unvested RSU overhang (e.g., 119,538 from 2023 grant; 281,430 from 2024 grant) plus estimated renewal-linked awards suggests multi-year retention lock-in; FY2025 vesting of 273,169 shares indicates periodic supply events around vest dates (tax/cash needs) .
- Alignment and risk controls: CEO beneficially owns 3.23% of shares and far exceeds ownership guidelines; hedging and pledging are prohibited; no excise tax gross‑ups; equity plans have double‑trigger CIC features .
- Severance/CIC economics: Protections are meaningful (2× base on no‑cause; 3× base + target bonus on CIC termination; equity vesting) and could be value‑relevant in strategic scenarios; investors should factor potential dilution/expense and acceleration impacts .
- Governance structure: Independent Chair and fully independent key committees mitigate dual-role risks and support oversight rigor .
- Performance track record: Strong TSR (4,201% since appointment) and operating CAGRs bolster confidence in incentive design; however, the insider loan exposure is a governance watch item and merits monitoring alongside continued say‑on‑pay feedback .
Appendices
FY2025 Company Performance Snapshot
| Metric | FY2025 |
|---|---|
| Net income | >$430 million |
| Diluted EPS | $7.43 |
| ROE | 17.30% |
| NIM | 4.90% (+28 bps YoY) |
| Deposit growth YoY | 7.6% |
| Net charge-offs / avg loans | 13 bps |
| 5-year TSR | 344% (7/1/2020–6/30/2025) |
CEO Outstanding/Recent Awards Detail (select)
- Outstanding (6/30/2025): 119,538 (9/14/2023 grant), 281,430 (9/15/2024 grant); CEO awards vest in equal fourths at fiscal year-end over four years .
- FY2025 equity award result: 193,811 RSUs (33% TSR vs 21% XABQ, 0.95 individual factor; converted at $53.36 beginning price) .