Brett Pharr
PATHWARD FINANCIALAbout Brett Pharr
Brett L. Pharr (age 63) is CEO of Pathward Financial, Inc. and Pathward, N.A., and has served as a director since 2021. He became CEO in October 2021 after roles leading governance, risk and compliance, and serving as Co‑President/COO . In fiscal 2024, Pathward delivered net income of $168.4M, diluted EPS of $6.62, and ROA of 2.20%, supported by share repurchases and a strategic divestiture of the Insurance Premium Finance business . Over 2024, compensation actually paid aligned with performance, and Pathward’s TSR from an initial $100 in 2020 reached $349.21 versus peer group $176.55 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pathward Financial / Pathward, N.A. | Chief Executive Officer | Oct 2021–present | Led fintech-focused transition, optimization strategy, strong EPS/ROA and capital returns . |
| Pathward Financial / Pathward, N.A. | Co‑President & COO | Jun 2020–Oct 2021 | Operational leadership through rebranding and fintech repositioning . |
| Pathward Financial / Pathward, N.A. | EVP, Group Head of Governance, Risk & Compliance | Feb 2019–Jun 2020 | Strengthened enterprise risk and compliance framework . |
| Citizens Bank | Senior Risk Director, Consumer Division | Not disclosed | Built best‑practice enterprise risk organization and culture . |
| Bank of America | Various roles in Commercial & Consumer LOBs, Transformation, M&A, Risk | 32 years | Deep banking experience across risk and operations . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pathward, N.A. | Director | Since 2021 | Active oversight across banking operations . |
Fixed Compensation
Multi‑year CEO cash compensation and totals:
| Metric ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | 650,000 | 700,000 | 728,000 |
| All Other Compensation | 49,189 | 136,318 | 129,764 |
| Total Reported Compensation | 3,811,433 | 3,884,131 | 4,334,506 |
Annual incentive opportunity levels:
| Potential Annual Incentive (as % of Base) | Threshold | Target | Maximum |
|---|---|---|---|
| Brett L. Pharr (CEO) | 50.00% | 100.00% | 185.00% |
Performance Compensation
Annual incentive design and FY2024 outcomes:
- Metrics and weighting: Net Income (45%), ROA (25%), Strategic/Individual (30%) .
- FY2024 payout levels: 119% for Net Income, 129% for ROA; weighted financial payout 122% .
- CEO strategic/individual multiplier: 140%; total CEO payout 128% of target .
Annual incentive actual payouts ($000):
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Actual Total Incentive ($000) | 948 | 929 |
Long‑term incentives (LTI) structure and FY2024 grants:
- Mix: 50% Performance‑Contingent Restricted Stock (RSAs), 50% Performance Share Units (PSUs) .
- RSAs vest ratably over three years, contingent on annual capital goals (Basel III); FY2024 tranche achieved .
- PSUs cliff‑vest after three‑year performance period; EPS goals set annually; FY2022 PSUs earned at 120% of target; FY2023/2024 in progress .
FY2024 CEO LTI awards and vesting:
| Award Type | Threshold (#) | Target (#) | Maximum (#) | Vesting / Dates |
|---|---|---|---|---|
| FY24 PSUs | 12,871 | 25,743 | 51,485 | Cliff vest Oct 16, 2026 |
| FY24 RSAs | — | 25,414 | — | 1/3 each Oct 16, 2024/2025/2026 |
PSU performance results:
| PSU Cohort | Year | EPS Threshold | EPS Target | EPS Maximum | Actual EPS | % of Target Earned |
|---|---|---|---|---|---|---|
| FY2022 PSUs (3‑yr) | FY2022 | 3.92 | 4.91 | 5.89 | 4.71 | 90% |
| FY2023 | 4.37 | 5.46 | 6.55 | 5.99 | 149% | |
| FY2024 | 5.08 | 6.35 | 7.62 | 6.62 | 121% | |
| 3‑yr Average | — | — | — | — | 120% |
Design evolution:
- FY2025 LTI adds three‑year cumulative EPS and three‑year relative TSR (50% weighting each) to strengthen pay‑for‑performance alignment .
Equity Ownership & Alignment
Beneficial ownership and guideline compliance:
- Shares beneficially owned: 80,729 (0.33% of class by CEO), all directors/officers as a group 297,655 (1.23%) .
- Executive stock ownership guideline: CEO 5x salary; actual as of 9/30/2024: 5.4x excluding PSUs; 12.1x including PSUs (illustrative) .
- Insider trading policy prohibits hedging, short sales, margin purchases, and pledging for directors and officers .
- Section 16 compliance: one late CEO Form 4 reported in FY2024 .
Outstanding equity positions and vesting:
| Award | Shares/Units | Key Dates |
|---|---|---|
| FY24 RSAs (CEO) | 25,414 | Vest Oct 16, 2024/2025/2026 |
| FY24 PSUs (CEO; performance‑accrued units) | 27,567 | Vest Oct 16, 2026 (if earned) |
| FY23 PSUs (CEO; performance‑accrued units) | 33,244 | Vest Oct 16, 2025 (if earned) |
| FY22 PSUs (CEO; earned) | 17,091 | Vested Nov 7, 2024 |
| Stock Options | None outstanding; no option exercises in FY2024 . |
Employment Terms
- No individual employment agreement for NEOs; program uses market‑competitive targets and double‑trigger CIC provisions .
- Clawbacks: (1) SEC/NASDAQ accounting restatement policy (effective Oct 2, 2023) requiring repayment of erroneously awarded incentive comp; (2) “Detrimental conduct” clawback for misconduct, including time‑vested equity .
- Executive Severance Pay Policy (CEO multiples):
- Termination without cause (non‑CIC): 200% of base salary + 200% of target bonus, 2 years medical, continued vesting (subject to performance), and up to $10,000 outplacement; forfeiture of current‑year equity grants if termination within 6 months of grant fiscal year .
- Termination without cause within 24 months of CIC: same cash multiples, 2 years medical, full vesting of unvested equity, and up to $10,000 outplacement .
- Non‑solicitation covenants (customers, employees, third‑party relationships) for 12 months post‑termination; release and non‑disparagement required .
Illustrative CEO severance values (as of 9/30/2024):
| Scenario | Cash Payment(s) ($) | Equity Vesting Value ($) | Medical ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|
| Termination w/o Cause (non‑CIC) | 2,912,000 | 7,991,435 | 16,972 | 10,000 | 10,930,407 |
| Termination w/o Cause (CIC) | 2,912,000 | 7,991,435 | 16,972 | 10,000 | 10,930,407 |
| CIC (no termination) | — | 7,991,435 | — | — | 7,991,435 |
Board Governance
- Board/committee independence: CEO is not independent; eight of nine directors are independent .
- Chair and CEO roles separated; Becky S. Shulman (independent) Chair since Feb 2024; Douglas J. Hajek Vice Chair since Feb 2024 .
- CEO serves on no Board committees; committee membership is exclusively independent .
- Governance highlights: 98% average director attendance in FY2024; robust clawbacks; annual self‑assessments; stock ownership guidelines for directors; active shareholder engagement .
- Director compensation: CEO receives no additional pay for director service .
Director Compensation (context for dual roles)
- Non‑employee director cash retainers and fully vested stock awards; committee retainers adjusted in FY2024 to market .
- CEO receives no director compensation .
Compensation Structure Analysis
- Mix shift: High proportion of at‑risk pay (FY2024 CEO 82% variable; other NEOs 64%) .
- LTI strengthens alignment via rolling three‑year EPS and capital goals; FY2025 adds relative TSR balanced at 50% weighting .
- Targets near 50th percentile of peers; Pay Governance LLC engaged as independent consultant; peer group reflects fintech and commercial finance comparables .
- FY2024 incentive funding reflects strong EPS and ROA performance; financial payout 122% vs targets set to comparable difficulty given macro headwinds .
Risk Indicators & Red Flags
- Prohibitions on pledging/hedging reduce misalignment risk .
- One late CEO Form 4; disclosure of late Section 16 filings .
- Clawbacks and double‑trigger CIC terms mitigate windfalls and retention risk .
- Regulatory environment: rising scrutiny on BaaS and brokered deposits; evolving incentive comp rules; robust AML/CFT expectations .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay support >97% in 2024; three‑year average 97.7% .
- Active investor engagement via >100 meetings and conferences in FY2024 .
Expertise & Qualifications
- Deep banking tenure across risk, compliance, operations, and transformation (Citizens Bank; 32 years at Bank of America) .
- Leadership in fintech transition and optimization strategy; recognition includes KBW Honor Roll and Finovate Award for BaaS .
Multi‑Year CEO Compensation Detail
| Component ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Stock Awards | 2,556,981 | 2,100,013 | 2,548,025 |
| Non‑Equity Incentive | 555,263 | 947,800 | 928,717 |
| Total Reported Compensation | 3,811,433 | 3,884,131 | 4,334,506 |
Investment Implications
- Alignment: High at‑risk pay, three‑year EPS and capital metrics, and addition of relative TSR should maintain strong pay‑for‑performance continuity; CEO exceeds ownership guideline, reducing misalignment risk .
- Retention/pressure: Double‑trigger CIC with full equity vesting provides retention but could create event‑driven overhang; severance cash multiples are moderate (2x salary+bonus), typical for peers .
- Trading signals: PSU accruals at 120% for FY2022 cohort and strong FY2023/2024 EPS results suggest continued incentive momentum; incremental TSR inclusion may heighten sensitivity to share price performance .
- Governance: Separation of chair/CEO and independent committees mitigate dual‑role concerns; robust clawbacks and ownership rules lower headline risk; one late Form 4 immaterial but monitored .
- Strategic execution: CEO’s track record includes EPS growth, disciplined ROA, capital returns, and portfolio optimization (sale of IPF); continued partner solutions expansion and risk maturity underpin performance durability .