Coolidge E. Rhodes, Jr.
CULLEN/FROST BANKERSAbout Coolidge E. Rhodes, Jr.
Group Executive Vice President, General Counsel and Corporate Secretary of Cullen/Frost Bankers, Inc. (Frost Bank). Named Executive Officer (NEO) in 2024 and 2023 proxy disclosures; age and education are not disclosed in the proxies reviewed . Compensation is tied to company net income versus budget for annual incentives and to multi‑year relative performance for PSUs, with 2024 exceeding budget (108% of plan) and 5‑year TSR outperforming the peer group index ($159.77 vs $144.74 per $100 invested) .
Past Roles
Not disclosed in the CFR proxy statements reviewed .
External Roles
Not disclosed in the CFR proxy statements reviewed .
Fixed Compensation
Multi‑year compensation summary for Rhodes:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $575,000 | $605,000 | $620,000 |
| Stock Awards ($) | $600,013 | $625,037 | $640,009 |
| Non-Equity Incentive ($) | $598,000 | $462,825 | $613,800 |
| All Other Compensation ($) | $32,736 | $40,851 | $41,872 |
| Total ($) | $1,805,749 | $1,733,713 | $1,915,681 |
Base salary change:
| Year | Base Salary ($) | Change vs prior year |
|---|---|---|
| 2024 | $620,000 | +2% |
| 2025 | $640,000 | +3% |
All Other Compensation detail (2024):
| Item | Amount ($) |
|---|---|
| Perquisites and other personal benefits | $1,175 |
| Thrift Incentive Plan match | $16,500 |
| Group term life | $714 |
| 401(k) match (includes $20,183 for 2024 and $3,300 true-up for 2023 paid early 2024) | $23,483 |
Performance Compensation
Annual incentive design and outcomes:
| Year | Plan | Metric | Target (% of Salary) | Actual (% of Target) | Payout ($) | Payout Timing |
|---|---|---|---|---|---|---|
| 2023 | Executive Management Bonus Plan | Company net income vs budget | 85% | 90% | $462,825 | Paid Feb 2024 |
| 2024 | Executive Management Bonus Plan | Company net income vs budget | 90% | 110% | $613,800 | Paid Feb 2025 |
Long‑term incentives (LTI) structure and grants:
- Mix: 25% PSUs, 75% RSUs for 2024 awards (economic value at grant) .
- 2024 PSUs metric: relative return on average assets vs peer group; payout from 0% (<25th percentile) to 150% (≥75th percentile) with straight-line interpolation .
- 2021 PSU cycle: performance metric was growth in Average Pre‑Provision Net Revenue adjusted by Net Charge‑Offs; certified growth of 89.8% resulted in 150% of target payout to NEOs .
2024 Grants of Plan‑Based Awards (Rhodes):
| Grant Date | Award Type | Threshold (#) | Target (#) | Maximum (#) | Units/RSUs Granted (#) | Grant-Date Fair Value ($) |
|---|---|---|---|---|---|---|
| 10/29/2024 | PSUs | 672 | 1,343 | 2,015 | — | $479,963 |
| 10/29/2024 | RSUs | — | — | — | 3,698 | $640,009 |
Cliff vesting for RSUs at 3 years; PSU performance period 2025–2027 with vesting subject to certification and continued time‑based vesting through the performance period .
Equity Ownership & Alignment
Beneficial ownership and guideline context:
| Item | Value |
|---|---|
| Beneficial ownership (shares) | 3,939 |
| Shares outstanding (record date 3/4/2025) | 64,282,541 |
| Ownership as % of shares outstanding | ~0.0061% (3,939 / 64,282,541) |
Unvested and performance equity (as of 12/31/2024; valued at $134.25 per share):
| Type | Units Not Vested (#) | Market Value ($) | Vesting Dates |
|---|---|---|---|
| RSUs | 9,480 | $1,272,690 | 10/25/2025; 10/24/2026; 10/29/2027 |
| PSUs (unearned) | 7,775 | $1,043,794 | 10/25/2025; 10/24/2026; 10/29/2027 |
Options: No option awards outstanding for Rhodes in 2023–2024 tables; all options for NEOs shown are fully vested, but none are listed for Rhodes .
Policies and guidelines:
- Stock ownership guidelines: 3x base salary for executive officers; unvested RSUs count; unearned PSUs do not; new participants have 5 years to comply; NEOs in role ≥5 years are in compliance (company-wide statement) .
- Anti‑hedging and anti‑pledging: prohibited for directors and executive officers; margin accounts and pledging not permitted .
- Insider trading policy includes 10b5‑1 plan guidelines consistent with SEC requirements .
Employment Terms
Change‑in‑control (CIC) and severance economics:
| Element | Terms |
|---|---|
| CIC vesting | Double‑trigger: CIC plus termination without cause or for good reason within 2 years; options become exercisable; RSU restrictions lapse; PSUs deemed earned as of CIC date but remain subject to time‑based vesting through remaining period . |
| Severance multiple | 2x base salary + target annual incentive, plus prorated target bonus for termination year (lump sum) for Rhodes . |
| Welfare benefits continuation | 2 years for NEOs (3 years for CEO) . |
| 409A treatment | Compliant; some payments may be deferred 6 months per 409A . |
| Excise tax | No gross‑up; “net‑better” cutback provision; Rhodes would have triggered excise tax in modeled scenario but no cutback under net‑better . |
| Employment agreements | None for executives per company policy . |
Modeled CIC qualifying termination payments (as of 12/31/2024, price $134.25):
| Component | Amount ($) |
|---|---|
| Cash severance | $2,914,000 |
| Equity (accelerated value) | $2,355,672 |
| Perquisites/benefits | $35,900 |
| Total | $5,305,572 |
Other benefits:
- Life insurance: death benefit equal to 3x base salary, capped at $2,000,000 .
- Thrift Incentive Plan: company matches 100% up to 6% of base salary in 2024 and 7% in 2025; allocated value delivered in common stock annually .
- Clawback: adopted Oct 2023; recovery of erroneously awarded incentive compensation after accounting restatements; no indemnification permitted .
Vesting Schedules and Upcoming Events
Outstanding awards and scheduled vestings for Rhodes (as of 12/31/2024):
| Award Type | Grant Date | Units Not Vested (#) | Award Vesting Date |
|---|---|---|---|
| RSU | 10/25/2022 | 2,097 | 10/25/2025 |
| PSU (2022 cycle) | 10/25/2022 | 2,249 | 10/25/2025 |
| RSU | 10/24/2023 | 3,685 | 10/24/2026 |
| PSU (2023 cycle) | 10/24/2023 | 4,183 | 10/24/2026 |
| RSU | 10/29/2024 | 3,698 | 10/29/2027 |
| PSU (2024 cycle) | 10/29/2024 | 1,343 | 10/29/2027 |
2024 vesting/realization:
- RSU vested shares: 1,630; value realized $207,695 (no options exercised by Rhodes in 2024) .
Performance & Track Record
Company outcomes during recent periods aligning to incentive designs:
| Measure | 2023 | 2024 |
|---|---|---|
| Net income ($000) | $591,298 | $575,867 |
| Actual performance vs budget | 83% | 108% |
| 5‑year TSR (Value of $100) | 124.95 (through 2023) | 159.77 (through 2024) |
| 5‑year Peer TSR (Value of $100) | 104.72 (through 2023) | 144.74 (through 2024) |
Notes:
- Annual bonus outcomes for Rhodes followed the company’s budget performance (90% of target for 2023; 110% for 2024) .
- PSU outcomes demonstrate strong multi‑year operating performance (150% payout for 2021 cycle based on pre‑provision net revenue growth adjusted for net charge‑offs) .
Investment Implications
- Alignment and leverage to performance: Rhodes’ variable pay is linked to company net income vs budget and multi‑year ROA relative metrics; 2024 bonus above target and 2021 PSU max payout reflect high sensitivity to operating execution and relative profitability .
- Retention profile: Three‑year cliff RSU vesting with staggered dates (2025/2026/2027) plus continued time‑based vesting on PSUs post‑CIC creates meaningful retention hooks; double‑trigger CIC and no employment contract indicate balanced retention vs shareholder protections .
- Insider selling pressure: Upcoming RSU/PSU vestings for Rhodes total 17,255 units over 2025–2027; while policy restricts hedging/pledging, vesting events can create discretionary sales or tax‑related sales windows, but no 10b5‑1 plan details are disclosed for Rhodes specifically .
- Ownership “skin in the game”: Beneficial ownership is modest at ~0.006% of shares outstanding; guidelines require 3x salary for executives and count unvested RSUs, but the proxy does not state Rhodes’ specific compliance status or ownership multiple; the mix of RSUs/PSUs and anti‑pledging policy improves alignment and reduces leverage risk .
- Governance and risk: No gross‑up, “net‑better” cutback, clawback policy, and prohibition on pledging/hedging are positive governance signals; CIC cash severance modeled at $2.9M with equity acceleration of $2.36M suggests manageable parachute size relative to total comp .