John Handy
COMMERCE BANCSHARES INC /MO/About John Handy
John K. Handy is Executive Vice President of Commerce Bancshares (since January 2018) and President & CEO of Commerce Trust Company (since February 1, 2018). He joined Commerce Bank in 1999 after senior roles at TIAA‑CREF Trust Company and Bank of America’s trust arm; he holds a BA in economics and business administration from Wittenberg University and earned the CFSC designation at Northwestern’s ABA Graduate Trust School, with a Series 65 license . Born 1964, his executive leadership tenure at CBSH exceeds seven years . Commerce’s 2024 say‑on‑pay support was 91% and 2023 was 92%, indicating strong shareholder acceptance of executive pay programs . Commerce Trust’s long-term revenue compounded near 10% during prior leadership, a business Handy now leads—supporting a track record of value creation in wealth management .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bank of America (formerly Boatmen’s Trust) | Senior roles managing 14 regional trust offices | ~10 years (pre‑1999) | Multi‑state trust operations leadership; scaled regional platform |
| TIAA‑CREF Trust Company, FSB | Chief Operating Officer & Director | ~1997–1999 | Built trust company operations for major pension fund manager |
| Commerce Bank / Commerce Trust Company | President & COO (1999–2017); President & CEO (2018–present) | 1999–present | Grew one of Commerce’s fastest‑growing businesses; leading client retention and growth |
External Roles
- No public-company directorships disclosed in company proxy materials for Handy. If any exist, they were not disclosed in the DEF 14A .
Fixed Compensation
| Year | Base Salary ($) | Target Bonus % of Salary | Actual Bonus Paid ($) | All Other Compensation ($) | Notes |
|---|---|---|---|---|---|
| 2022 | 469,734 | 60% | 552,960 | 22,822 | Target % 2022 from proxy; bonus paid under EICP |
| 2023 | 494,624 | 60% | 319,350 | 26,046 | 2023 target unchanged vs prior year |
| 2024 | 511,882 | 65% | 409,386 | 26,564 | Target increased to 65% for 2024 |
| 2025 (approved) | 531,738 | — | — | — | 2024 performance bonus to be paid in 2025 shown above |
All other compensation components for 2024: 401(k) match $23,000; group term life premiums $3,564; no CERP credits; perquisites — total $26,564 .
Performance Compensation
| Component | Design | Metric Details | Weighting / Structure | Payout mechanics | Handy’s measurement basis |
|---|---|---|---|---|---|
| Annual Cash Incentive (EICP) | Performance‑based cash bonus | Metrics: Net Income, PPNR, Revenue, ROE vs peers (19 banks) | Committee sets threshold/target/maximum; ROE paid by quartile; Funding range 0%–164% of target | Independent curves per metric; Committee may adjust for equitable results | 50% based on Company Performance Factor; 50% on Commerce Trust performance |
| Long‑Term Restricted Stock (LTRS) | 5‑year vest cliff; contingent on cumulative positive net income | Formula: 35% of avg bonus target (prior 3 yrs) × avg Company Performance Factor (prior 3 yrs); shares = value / grant‑date price | Committee retains discretion to reduce | Vests if Company has cumulative positive net income over period | Receives per LTRS formula |
| Current Year Restricted Stock (RSAs) | 4‑year cliff vest; contingent on cumulative positive net income | Value set annually with benchmarking; NEOs may choose RSAs/SARs mix | Handy chose 100% RSAs in 2024; no SARs | Dividends paid; anti‑hedging provisions in award agreements | 2024 grant fair value $507,103; shares 10,216 |
| SARs (if chosen) | 4‑year ratable vest; 10‑year term | Black‑Scholes valuation | — | — | Handy had no SAR grant in 2024/2025 |
Additional grant detail:
- 2024 plan-based awards: Handy RSAs 10,216 shares; grant-date fair value $507,103 .
- 2025 committee approvals: Handy restricted stock awards 7,845 shares; 2024 performance-based bonus $409,386; 2025 base $531,738 .
Equity Ownership & Alignment
| Item | Value | Source/Notes |
|---|---|---|
| Total beneficial ownership (Dec 31, 2024) | 57,692 shares | |
| Shares outstanding (Record date Feb 26, 2025) | 134,074,101 | |
| Ownership % of outstanding | ~0.043% (57,692 / 134,074,101) | |
| Unvested restricted stock (year‑end 2024) | 37,910 shares; market value $2,362,172 | |
| Options/SARs outstanding (year‑end 2024) | None listed for Handy | |
| 2024 vesting/realization | 11,034 shares vested ($553,998); 2,041 options/SARs exercised ($124,225) | |
| Stock ownership guidelines | Executive Vice President: 2× base salary; all NEOs exceeded as of Dec 31, 2024 | |
| Hedging/pledging | Anti‑hedging policy in award agreements and corporate policy; no explicit pledging disclosure found |
Upcoming vesting schedule (per outstanding awards):
- 2025: 1/24/2025 3,987; 2/2/2025 4,898; 2/3/2025 1,930; 2026: 2/2/2026 7,300; 2027: 2/1/2027 6,259; 2/2/2027 1,420; 2028: 1/31/2028 7,553; 2/1/2028 1,900; 2029: 1/31/2029 2,663 .
Employment Terms
| Provision | Key Terms | Handy-specific economics |
|---|---|---|
| Change-of-Control severance | Double-trigger structure; lump sum equal to Severance Period × (prior year base + 3‑yr avg bonus); plus greater of prior year bonus or target bonus, continued benefits to lesser of 3 yrs or age 65; loan facility to cover option exercise/taxes; outplacement; excise tax gross-up for NEOs other than CEO | Severance Period capped at 1.5 years for Handy |
| Potential payments (assumed at 12/31/2024) | Salary $1,416,100; Bonus $335,563; SARs/options $0; Restricted stock $2,362,172; EICP/CERP $0; Post‑termination insurance premiums $49,811; Retirement plan $74,776; Total $4,238,422 | |
| Vesting on termination events | Death/disability: pro‑rata immediate vest; Retirement: pro‑rata vest effective at end of restriction period (subject to company performance condition); CoC: immediate vest of restricted stock, SARs, options | |
| Clawback policy | “No‑fault” clawback for incentive comp tied to restated results, adopted Oct 2023, applies to annual and long‑term incentive awards; recovery of overpayment within clawback period | |
| Non‑compete condition | Signing non‑competition agreement is a condition to restricted stock grants (retirement definition excludes non‑compete agreements) | |
| Pension & deferred compensation | Retirement Plan present value $74,776; credited service 4 years; estimated age‑65 annuity $7,132; currently eligible for early retirement; not eligible for CERP Post‑2004; no EICP deferral in 2024 |
Performance & Track Record
- Commerce Trust leadership: Under prior leadership with Handy in senior roles, the business achieved ~10% compounded annual revenue growth and top client retention; Handy became CEO in 2018 to continue scaling this growth platform .
- Company performance measures used for Handy’s EICP include profitability (Net Income, PPNR), Revenue, and ROE vs a 19‑bank peer set, with funding up to 164%—tying incentives to near‑term returns and relative performance .
Compensation Structure Analysis
- Mix and leverage: For Handy, cash bonus target increased to 65% of salary in 2024 (from 60%), raising at‑risk cash alignment; RSAs are 100% of annual equity mix (no SARs), which lower option‑related risk but increase scheduled vesting exposure .
- Metric rigor: 2024 metrics include Net Income, PPNR, Revenue, and ROE vs peers, with defined curves and quartiles; Committee reserves adjustment rights for equitable results .
- Equity conditions: Both LTRS and current‑year RSAs require cumulative positive net income at vest—adding a performance gate beyond time‑based vesting .
- Governance flags: Handy’s severance agreement includes excise tax gross‑up eligibility (CEO excluded), which is generally viewed as shareholder‑unfriendly; however, company policy prohibits options repricing and hedging, and enforces clawbacks .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay support: 2023—92% approval; 2024—91% approval, signaling investor acceptance of program design .
Risk Indicators & Red Flags
- Excise tax gross‑up eligibility for NEOs other than CEO persists in CoC agreements .
- Section 16(a) filing delinquency: Handy had a delinquent Form 4 for two gift transactions; immaterial but noted .
- Hedging prohibited; pledging not explicitly disclosed in proxy; Insider Trading Policy governs transactions and is filed with 2024 Form 10‑K .
Equity Ownership & Alignment Table
| Metric | Amount | Detail/Date |
|---|---|---|
| Beneficial shares | 57,692 | As of Dec 31, 2024 |
| Ownership % | ~0.043% (57,692 / 134,074,101) | Record shares outstanding Feb 26, 2025 |
| Unvested RS | 37,910; $2,362,172 | Per year‑end 2024 table |
| Options/SARs outstanding | None | Year‑end 2024 |
| Ownership guideline | Executive VP must hold ≥2× salary; met | As of Dec 31, 2024 |
| Anti‑hedging | Prohibited by policy and award terms | — |
Employment & Contracts Table
| Term | Provision | Handy-specific |
|---|---|---|
| CoC definition | ≥20% beneficial ownership; board turnover; merger/asset sale; liquidation | Applies company‑wide |
| Qualifying termination | Pre‑CoC termination in contemplation; post‑CoC involuntary; Good Reason; voluntary within window (CEO excluded) | Good Reason includes duty reduction, relocation, pay/plan reductions |
| Severance Period | Lesser of 3 years or months to age 65 / 12; Handy: lesser of 1.5 years or months to 65 / 12 | — |
| Economics at 12/31/2024 (CoC) | Total $4,238,422 (Salary $1,416,100; Bonus $335,563; Restricted $2,362,172; Insurance $49,811; Retirement $74,776) | — |
| Vesting | Death/disability: pro‑rata immediate; retirement: pro‑rata at end of restriction (subject to performance); CoC: immediate vest | — |
| Clawback | Applies to incentive comp on restatement; no‑fault | — |
Investment Implications
- Alignment and performance sensitivity: Handy’s incentives are tethered to core profitability (Net Income, PPNR), revenue, and ROE vs peers, with 50% of his bonus tied directly to Commerce Trust performance—reinforcing segment accountability and near‑term return focus .
- Retention and selling pressure: RSAs vest in sizable tranches; near‑term vesting in 2025 totals ~10.8k shares, followed by larger tranches through 2029—potentially creating periodic insider selling pressure around vest dates despite anti‑hedging policy .
- Governance considerations: The presence of excise tax gross‑ups for NEOs (CEO excluded) is a continuing governance risk; however, robust clawbacks and anti‑hedging provisions mitigate incentive risk, and strong say‑on‑pay results suggest investor comfort with design .
- Ownership “skin‑in‑the‑game”: Handy’s beneficial ownership (~0.043%) and substantial unvested equity indicate meaningful exposure, with ownership guidelines met, supporting alignment with shareholders .