John Kemper
COMMERCE BANCSHARES INC /MO/About John Kemper
John W. Kemper, 47, is President and CEO of Commerce Bancshares, Inc. and Chairman & CEO of Commerce Bank; he joined Commerce in 2007 after serving as an Engagement Manager at McKinsey & Co. and holds degrees from Stanford (BA), London School of Economics (MS economic history), and Northwestern Kellogg (MBA) . He became CEO in August 2018 when the Board separated the Chairman and CEO roles, with his father, David W. Kemper, serving as Executive Chairman; the Board regularly holds executive sessions and designates a Lead Director to strengthen governance . Pay-versus-performance disclosures show CEO “compensation actually paid” tracks TSR, Net Income, and Actual Revenue (net interest income plus non-interest income) over 2020–2024, supporting the company’s pay-for-performance philosophy .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Commerce Bancshares, Inc. | President & CEO | Aug 2018–present | Led corporate strategy and risk-balanced growth; assumed CEO when Board split Chair/CEO roles to enhance accountability . |
| Commerce Bancshares, Inc. | President & COO | Prior to Aug 2018 | Operated company-wide strategy and operations before appointment as CEO . |
| Commerce Bancshares, Inc. | Strategy leadership, various leadership roles | Since 2007 | Drove strategy and cross-functional initiatives across financial services lines . |
| McKinsey & Co. | Engagement Manager | Prior to 2007 | Led strategy/operations teams for financial services and airline clients . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Visa Executive Client Counsel | Member | Current | Contributes client perspective to payments ecosystem strategy . |
| Tower Properties Company | Director | Since Mar 2008 | Real estate governance and oversight at family-influenced entity; disclosed in related-party section . |
| Civic organizations (St. Louis region) | Board member | Current | Regional civic engagement and community leadership . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Base Salary ($) | $995,354 | $1,030,816 | $1,041,602 | $1,050,000 (effective 3/29/2025) |
| Target Bonus % of Base | — | — | 115% (increased from 105%) | — |
| Actual Bonus Paid (Non-Equity Incentive) ($) | $1,642,509 | $905,559 | $1,964,441 (paid for 2024 performance) | — |
| All Other Compensation ($) | $180,255 | $182,546 | $136,318 | — |
Notes: Employee Directors receive no additional director pay .
Performance Compensation
| Component | Metric | Target/Approach | Actual | Payout mechanics | Vesting |
|---|---|---|---|---|---|
| Annual Cash Incentive (EICP) | Net Income | Budget-based target set each January | Not disclosed | Funded on scale between threshold/target/max; payout range 0–164% | Cash payout after year-end . |
| Annual Cash Incentive (EICP) | PPNR | Budget-based target | Not disclosed | Same scale as above | Cash payout . |
| Annual Cash Incentive (EICP) | Actual Revenue | Budget-based target | Not disclosed | Same scale as above | Cash payout . |
| Annual Cash Incentive (EICP) | ROE vs 19 peers | Top quartile target; quartile-based payout | Not disclosed | Quartile payout schedule | Cash payout . |
| Equity – Current Year Restricted Stock (RSAs) | Equity value at grant | Discretion vs benchmarks; John chose 75% RSAs / 25% SARs mix in 2024 | 2024 grant: 46,145 shares; FV $2,290,550 | Value fixed at grant; vest if cumulative positive net income over period | 4-year cliff vest from grant date; performance condition on cumulative positive net income . |
| Equity – Stock Appreciation Rights (SARs) | Equity value at grant | Discretion vs benchmarks; balance of grant value | 2024 grant: 42,665 SARs @ $49.64; FV $599,980 | Value realized on exercise above strike | Vests 25% per year over 4 years; 10-year expiry . |
| Equity – Long-Term Restricted Stock | 35% of avg cash incentive target for prior 3 years × avg Company Performance Factor (prior 3 years) | Formula-based | Included in 2024 RSA counts | Discretion to reduce; dividends accrue and vest per award | 5-year vest; requires cumulative positive net income . |
Clawback: Incentive-based compensation (annual and long-term) is subject to clawback upon a restatement due to material noncompliance; applies regardless of fault; recoup within defined period . Anti-hedging and no option repricing; legacy excise tax gross-ups only for certain NEOs (not John) .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Direct beneficial ownership (shares) | 232,312; includes shares acquirable within 60 days via SARs (25,059) . |
| Shared voting power relationships | 49,159 shares beneficially owned by John but voting power shared with David W. Kemper . |
| Corporate holdings (disclaimed except pecuniary interest) | 270,564 shares owned by a corporation where David, John, Jonathan Kemper are shareholders/directors; beneficial ownership disclaimed beyond pecuniary interests . |
| Shared voting power with David W. Kemper | 1,204,557 shares beneficially owned by David W. Kemper but voting power shared with John . |
| Unvested restricted stock (count; MV) | 158,094; $9,850,837 market value at 12/31/2024 . |
| CEO stock ownership guideline | 6× base salary; all NEOs exceeded as of 12/31/2024 . |
| Hedging/pledging | Hedging prohibited; no specific pledging disclosures found in proxy . |
Outstanding SARs (grant-level detail):
| Grant date | Exercisable (#) | Unexercisable (#) | Exercise price ($) | Expiration |
|---|---|---|---|---|
| 1/31/2017 | 9,799 | — | 38.26 | 1/31/2027 |
| 1/24/2018 | 15,331 | — | 41.89 | 1/24/2028 |
| 1/23/2019 | 45,690 | — | 45.27 | 1/23/2029 |
| 2/2/2022 | 18,161 | 18,167 | 60.10 | 2/2/2032 |
| 2/1/2023 | 8,043 | 24,132 | 59.90 | 2/1/2033 |
| 1/31/2024 | — | 42,665 | 49.64 | 1/31/2034 |
Upcoming restricted stock vesting schedule (unvested as of 12/31/2024):
| Date | Shares |
|---|---|
| Feb 2, 2025 | 32,971 |
| Feb 3, 2025 | 6,286 |
| Feb 2, 2026 | 32,412 |
| Feb 1, 2027 | 26,918 |
| Feb 2, 2027 | 5,804 |
| Jan 31, 2028 | 36,261 |
| Feb 1, 2028 | 7,558 |
| Jan 31, 2029 | 9,884 |
2024 exercises/vesting activity:
| Activity | Quantity | Value |
|---|---|---|
| SARs exercised | 13,259 shares | $852,262 realized |
| Stock vested | 44,753 shares | $2,193,483 realized |
Employment Terms
Change-of-control severance (double trigger) applies upon a change of control plus qualifying termination; John’s agreement excludes the special 30-day voluntary termination right and provides no excise tax gross-up, unlike other NEOs’ legacy arrangements . Good Reason includes material duty reduction, relocation >35 miles, base salary reduction, or material reduction in incentive/benefit participation; equity awards (restricted stock, SARs/options) vest upon change of control .
Potential payments if event occurred on 12/31/2024:
| Component | Amount ($) |
|---|---|
| Salary multiple (Severance Period factor) | 7,271,390 |
| Bonus (greater of prior actual or current target) | 1,197,830 |
| Unvested SARs/options vesting value | 637,171 |
| Restricted stock vesting value | 9,850,837 |
| EICP/CERP (deferred balances) | 1,199,359 |
| Post-termination insurance premiums (NPV) | 95,388 |
| Total | 20,251,975 |
Other benefits: Participation in Executive Retirement Plan (CERP) Post-2004 defined contribution credits (e.g., $112,208 company credit and $51,769 earnings in 2024; aggregate CERP balance $1,199,359) . Limited perquisites include club dues, long-term care insurance, and standard employee benefits; no tax gross-ups on perquisites .
Board Governance
| Item | Detail |
|---|---|
| Board service | Director since September 2015; also Chairman & CEO of Commerce Bank . |
| Committees | Executive Committee member . |
| Independence | Not independent (employee director) . |
| Attendance | 100% attendance at Board and committee meetings in 2024 . |
| Leadership structure | Roles split in 2018 (Executive Chairman: David W. Kemper; CEO: John W. Kemper); Board regularly meets in executive session . |
| Lead Independent Director | Chairman of Committee on Governance/Directors serves as Lead Director (Earl H. Devanny, III) . |
Director compensation: Employee directors receive no director fees; non-employee directors participate in a stock purchase plan with cash converted to shares monthly and receive specified retainers/fees with $300,000 stock ownership requirement (met by most) .
Pay Versus Performance (Company-level metrics)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| CEO SCT Total ($) | 3,662,396 | 4,842,307 | 5,316,890 | 4,721,639 | 6,032,891 |
| CEO Compensation Actually Paid ($) | 3,524,001 | 5,584,200 | 5,621,498 | 2,292,647 | 8,296,206 |
| Avg SCT Total – other NEOs ($) | 1,413,242 | 1,515,035 | 1,579,538 | 1,374,460 | 1,674,472 |
| Avg CAP – other NEOs ($) | 1,249,382 | 1,874,354 | 1,656,782 | 847,242 | 2,058,855 |
| Value of $100 – Company TSR ($) | 103.49 | 115.42 | 121.89 | 102.51 | 128.00 |
| Value of $100 – Peer Group TSR ($) | 91.34 | 124.82 | 116.18 | 115.72 | 130.95 |
| Net Income ($ thousands) | 353,885 | 540,590 | 500,020 | 485,177 | 534,401 |
| Actual Revenue ($ thousands) | 1,346,746 | 1,425,876 | 1,509,226 | 1,586,159 | 1,663,622 |
Say-on-Pay: 91% shareholder approval for 2024 compensation . Most important performance measures used for 2024 link to Net Income, PPNR, Actual Revenue, and ROE vs peers .
Compensation Benchmarking and Peers
- NEO pay benchmarking used Willis Towers Watson surveys and a defined NEO peer group (19 banks) including Ameris, Associated, Bank OZK, BOK Financial, Cadence, Cullen/Frost, F.N.B., First Interstate, Fulton, Hancock Whitney, Old National, Pinnacle Financial, Prosperity, Simmons, South State, UMB, United Bankshares, United Community Banks .
- EICP ROE peer set (19 banks) used for ROE quartile assessment (largely overlapping set plus Wintrust) .
Related Party Transactions
Tower Properties (entity with ~66% family beneficial ownership, including David, John, Jonathan Kemper and immediate families): In 2024 Commerce paid $16,000 leasing agent fees, $125,000 for parking garages, $165,000 property construction management fees, and $2,342,000 building management fees; contracts were terminated effective December 31, 2024 . Additional family-related compensation and retirement benefits for David W. and Jonathan M. Kemper and a relative employed by Commerce Bank are disclosed; routine banking transactions with related parties were on market terms .
Investment Implications
- Pay-for-performance alignment: CEO annual incentive ties to Net Income, PPNR, Actual Revenue, and ROE vs a robust peer set; equity mix includes formula-based long-term RS and annual RS/SARs, with vesting conditioned on cumulative positive net income and clawback protections, mitigating undue risk and aligning outcomes with TSR and earnings trends .
- Retention and selling pressure: Significant unvested RS tranches through 2029 and staged SAR vesting create ongoing retention hooks but also predictable vesting events that can add supply to the market, evidenced by 2024 vesting and SAR exercises; monitor upcoming vesting dates for potential Form 4 activity and liquidity impacts .
- Alignment and governance: CEO exceeds ownership guidelines (6× salary) and is subject to anti-hedging and clawback; however, family ties (Executive Chairman father; related-party Tower contracts now terminated) and dual role as Commerce Bank Chairman & CEO warrant attention to independence and oversight—mitigated by Lead Independent Director and regular executive sessions .
- Change-of-control economics: John’s severance is double-trigger and excludes excise tax gross-up, with meaningful equity acceleration; in a consolidation, total potential payments are sizable, implying strong personal economic alignment to shareholder outcomes under M&A scenarios but also notable parachute optics to consider .
- Shareholder sentiment: Strong 91% Say-on-Pay support suggests investor acceptance of the current pay mix and metrics; continued performance vs peers on ROE and TSR will be key to sustaining support .