Joseph Kauder
About Joseph Kauder
Joseph Kauder is Executive Vice President and Chief Financial Officer of Banc of California, appointed effective July 10, 2023; he is 56 years old, holds a B.S. in Business Administration from UNC Chapel Hill, and is a Certified Public Accountant (inactive) . He previously served over 15 years in executive finance roles at Wells Fargo, including CFO of the Wholesale Banking Segment (~$900B assets, ~$27B revenue) and CFO of the Commercial Banking Segment (> $200B assets, nearly $10B revenue) . Under the company’s 2024 post-merger integration, performance highlights included expanding net interest margin by 135 bps to 3.04%, reducing noninterest expense by 36% from normalized 4Q23, and improving deposit mix (noninterest-bearing to 29%) . Following the PacWest merger close (Nov 30, 2023), the company cited TSR of 24.2% through Feb 26, 2024 vs 3.9% for the KBW NASDAQ Regional Banking Index, framing compensation decisions for 2023 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Wells Fargo – Wholesale Banking Segment | CFO and Chief Accounting Officer; earlier senior finance roles | Through 2021 (15+ years at Wells Fargo overall) | Led finance across a ~$900B asset, ~$27B revenue segment; oversight of financial governance and controls |
| Wells Fargo – Commercial Banking Segment | Executive Vice President & CFO | Through 2021 | Finance leadership for >$200B assets and nearly $10B revenue segment |
| Wells Fargo (enterprise functions) | Enterprise Accounting Business Unit Support Leader; Director of Financial Oversight & Governance | — | Senior roles in enterprise accounting oversight and governance |
| Wachovia Corporation | SVP, Director of Accounting Policy | — | Directed accounting policy at a major financial institution |
| GE Capital | Finance roles | — | Corporate finance experience in diversified financials |
| PricewaterhouseCoopers LLP | Public accounting (early career) | — | Foundation in audit/accounting; CPA (inactive) |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Armstrong Wolfe Ltd. | Industry Advisor | Since leaving Wells in 2021 | Advisory role to financial services leadership communities |
| Start-up blockchain company | Executive involvement | Since leaving Wells in 2021 | Venture involvement noted by company |
Fixed Compensation
| Year | Base salary (rate) | Target bonus % of base | Actual bonus (cash) |
|---|---|---|---|
| 2023 | $500,000 (annual rate at hire) | 75% (prorated for 2023) | $281,250 (150% of prorated target) |
| 2024 | $575,000 (as of Dec 31, 2024) | 80% (threshold 40%, max 160%) | $345,000 (75% payout of $460,000 target) |
Notes:
- 2024 performance-based annual incentive plan drove a 75% payout for Kauder; the plan included a gating “well-capitalized” condition .
Performance Compensation
Annual incentive plan metrics and results (FY2024)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout ratio | Payout credit |
|---|---|---|---|---|---|---|---|
| Core ROATCE | 35% | 12.2% | 13.6% | 15.0% | 7.4% | 0% | 0% |
| Core Adjusted Noninterest Expense ($mm) | 25% | 172.5 | 164.3 | 156.1 | 150.7 | 200% | 50% |
| Avg. Noninterest-Bearing Deposits Growth | 15% | 2.5% | 4.9% | 5.9% | 1.7% | 0% | 0% |
| Qualitative considerations | 25% | — | — | — | Committee determination | 100% | 25% |
| Total payout | 100% | — | — | — | — | — | 75% |
Equity awards (2024 grants)
| Grant date | Award type | Units | Grant date fair value ($) | Vesting terms |
|---|---|---|---|---|
| 2/27/2024 | RSU | 20,161 | 287,496 | Vests in 3 substantially equal annual installments starting 2/27/2025 |
| 3/22/2024 | PSU (Core ROAA, Core EPS, Relative TSR vs KRX) | 19,231 target; 38,462 max | 341,924 (most probable); 533,598 (max) | 3-year performance period; cliff vest based on outcomes |
| 5/23/2024 | Stockholder Value Creation Award (PSU with stock price condition) | 169,033 | 1,326,909 | Vests if 20-day VWAP ≥ $28.73 within 4 years + continued service through 4th anniversary |
Additional program design context:
- Standard LTI target is split 50% RSUs (service-based) and 50% PSUs (performance-based); at hire he was also eligible for a $450,000 inducement RSU .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 10,963 shares; less than 1% of outstanding |
| Unvested RSUs (12/31/2024) | 21,399 (8/2/2023 inducement; 3-year annual vesting) and 20,161 (2/27/2024; 3-year annual vesting) |
| Unvested PSUs (12/31/2024) | 19,231 (3/22/2024; 3-year performance) and 169,033 (5/23/2024; stock-price condition) |
| Market value of unvested equity (12/31/2024) | $642,518 RSUs and $3,308, +? see table details: $311,689 RSUs (2024) + $330,829 RSUs (2023 inducement) = $642,518; $297,311 PSUs (3/22/24) + $2,613,250 PSUs (5/23/24) = $2,910,561 |
| Ownership guidelines | NEOs must own stock equal to at least 100% of after-tax base salary within 3 years |
| Hedging/pledging | Prohibited under the company’s policy |
| Options | No stock options disclosed among outstanding awards as of 12/31/2024 |
Vesting calendar highlights and potential selling pressure:
- Inducement RSU (8/2/2023) vests in equal tranches on 8/2/2024, 8/2/2025, 8/2/2026, increasing periodic liquidity windows .
- 2024 RSUs vest annually on/after 2/27/2025, 2/27/2026, 2/27/2027, adding scheduled vesting supply .
- 2024 PSUs vest based on 3-year performance ending in 2027 (Core ROAA/Core EPS/Relative TSR) and the stock-price PSU requires $28.73 VWAP (20 days) within 4 years plus service to year 4 (price-achievement driven supply risk) .
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | Effective July 5, 2023; term through June 30, 2026; auto-renews annually from July 1, 2026; not beyond June 30, 2028 absent further agreement |
| Base salary (agreement) | $500,000 through Feb 28, 2025; thereafter set by CNG Committee (actual rate $575,000 as of 12/31/2024) |
| Annual bonus | Eligible for annual performance-based cash bonus (target % set by program) |
| Inducement equity | $450,000 RSU granted Aug 2023; vests ratably over 3 years |
| Severance (no CIC) | 1× base salary + 0.5× target bonus; inducement RSU vests in full; health benefits (12 months); 12-month non-solicit |
| Severance (double-trigger CIC) | 2× base salary + 2× target bonus; all outstanding equity awards vest in full; health benefits (18 months); 12-month non-solicit |
| Illustrative payout values (12/31/2024) | Non-CIC involuntary/Good Reason: $1,447,518 total; CIC double-trigger: $3,468,970 total (components shown in company table) |
| Clawback/recoupment | Mandatory NYSE clawback; company recoupment policy since 2017 |
| Tax gross-ups | None for change in control |
| Anti-hedging/pledging | Prohibited |
Compensation Structure Analysis
- Cash vs equity mix shifted higher to equity in 2024: salary $572,115; cash incentive $345,000; stock awards $1,956,329, reflecting increased at-risk, long-term alignment and inclusion of the Stockholder Value Creation Award PSUs tied to a four-year stock-price hurdle .
- Annual bonus target moved from 75% at hire (2023) to 80% in 2024 as the company recalibrated NEO incentive ranges post-merger integration .
- No tax gross-ups, explicit clawback provisions, and prohibition on repricing/repurchasing underwater awards mitigate shareholder risk and align with governance best practices .
- 2024 annual incentive plan balanced cost discipline (over-achieved on Core Adjusted NIE) with profitability/deposit mix goals; overall payout at 75% indicates measured alignment to quantified performance outcomes .
Say-on-Pay, Peer Benchmarking, and Shareholder Feedback
- Say-on-Pay approval at the 2024 annual meeting was 96%, signaling broad shareholder support for the compensation framework .
- The peer group used for 2024 decisions comprises 15 regional/commercial banks sized ~0.5×–2× the company’s total assets, including East West Bancorp, Bank OZK, Pinnacle Financial Partners, Texas Capital, and others .
Performance & Track Record (context for pay-for-performance)
- 2024 integration execution highlights include: noninterest-bearing deposits increased to ~29% of total deposits, net interest margin expanded by 135 bps, wholesale funding reduced to 10.3%, and core systems conversion completed; noninterest expense down 36% from normalized 4Q23 .
- Post-merger near-term TSR context used by the CNG Committee: 24.2% from Nov 30, 2023 to Feb 26, 2024 vs 3.9% for the KRX, with emphasis on long-term value creation from the transformational merger .
Equity Ownership & Alignment (detail table at 12/31/2024)
| Category | Units | Market value basis |
|---|---|---|
| RSUs – Inducement (8/2/2023) | 21,399 | $330,829 (at $15.46) |
| RSUs – 2024 grant (2/27/2024) | 20,161 | $311,689 (at $15.46) |
| PSUs – 2024 performance (3/22/2024) | 19,231 target | $297,311 (at $15.46) |
| PSUs – Stockholder Value Creation Award (5/23/2024) | 169,033 | $2,613,250 (at $15.46) |
| Beneficial ownership (common) | 10,963 | <1% outstanding |
| Ownership guidelines | 100% of after-tax base salary within 3 years | Policy; compliance not individually disclosed in extract |
| Hedging/pledging | Prohibited | Policy |
Employment Terms (severance economics snapshot at 12/31/2024)
| Scenario | Base multiple | Bonus multiple | Equity acceleration | Health benefits | Restrictive covenants |
|---|---|---|---|---|---|
| Involuntary (no CIC) / Good Reason | 1× | 0.5× | Inducement RSU only | 12 months | 12-month non-solicit |
| Double-trigger CIC | 2× | 2× | All outstanding equity vests | 18 months | 12-month non-solicit |
| Illustrative payout (no CIC) | — | — | Total ≈ $1.45M (per table) | Included | — |
| Illustrative payout (CIC) | — | — | Total ≈ $3.47M (per table) | Included | — |
Investment Implications
- Alignment and upside leverage: 2024 LTI grants meaningfully increased Kauder’s equity exposure, including a large stock-price-conditioned PSU (VWAP ≥ $28.73 for 20 days within 4 years plus service), creating strong incentives for durable value creation and potential positive signaling if milestones are approached; conversely, failure to meet performance/price hurdles limits realized pay .
- Retention risk: Standard severance (1× salary + 0.5× bonus) and scheduled RSU vesting (Aug/Feb tranches) provide retention hooks; double-trigger CIC economics (2× salary + 2× bonus + full vesting) could influence behavior around strategic alternatives but are within market norms and balanced by anti-hedging/pledging and clawback policies .
- Pay-for-performance discipline: The 2024 annual incentive paid at 75%, with zero credit on ROATCE and deposit growth but max on expense control, evidences formulaic discipline and committee judgment, reducing risk of discretionary windfalls despite integration complexity .
- Governance quality: No tax gross-ups, robust clawbacks, and prohibition on repricing reinforce shareholder-friendly posture; Say-on-Pay support at 96% indicates investor alignment with the compensation architecture .
Overall, Kauder’s package is heavily equity-driven with specific operational and stock-price triggers, aligning incentives with cost discipline, profitability, and multi-year value creation while incorporating standard banking-sector severance protections and conservative governance features .