Daniel J. Geddes

About Daniel J. Geddes

Daniel J. Geddes is Group Executive Vice President and Chief Financial Officer of Cullen/Frost Bankers, Inc. (CFR) effective January 1, 2025; he is 50 years old and has been an officer at Frost since 1998, previously serving as Group EVP (Jul–Dec 2024), San Antonio Region President (Aug 2021–Jun 2024), and Market President/Houston Expansion Lead (Oct 2018–Aug 2021). Geddes’ background is deeply operational within Frost’s core Texas franchise, including market leadership and expansion initiatives, which positions him close to the key drivers of funding, credit and growth in the bank’s footprint . Company performance context under the current compensation framework: CFR delivered 2024 net income of ~$576 million, exceeding the $531 million budget (8.4% beat), driving 110% of target annual incentives for NEOs; five-year cumulative TSR on a $100 investment measured to 2024 was 159.77 vs 144.74 for the peer index .

Past Roles

Fixed Compensation

• Design and practice: Base salary set with market benchmarking (Meridian), internal equity, experience, and responsibilities; changes generally approved each October effective Jan 1. No fixed weighting of salary in the total mix; base is a meaningful portion to moderate risk .
• Recent actions: 2025 base increases for named NEOs averaged ~2.85%; CEO to $1.26M (+3%), Bracher to $690k (+3%), Stead to $655k (+2%), Rhodes to $640k (+3%). (Geddes became CFO effective Jan 1, 2025; his specific base was not disclosed in the proxy.) .

Performance Compensation

Annual cash incentives (Executive Management Bonus Plan)

• Structure: Pool funded on corporate net income vs the Board-ratified budget; minimum threshold required; payouts can exceed target when performance > budget; targets set annually as a % of base for each executive .
• 2024 outcomes context: Budgeted net income $531M; actual ~$576M; payouts to NEOs at 110% of target. Targets for 2024 were 90% of base salary for non-CEO NEOs; Committee maintained target levels for 2025. (Geddes joined as CFO in 2025 under the same plan design) .

Long-term equity (shifted mix; 3-year design)

• 2024 grant mix: 25% Performance Stock Units (PSUs), 75% Restricted Stock Units (RSUs), increased from prior 50/50 to improve retention and alignment amid rate volatility and expansion strategy .
• PSU metric and curve: Relative Return on Assets vs peer group over 2025–2027 with 0–150% payout; 25th percentile=50% payout; 50th=100%; 75th+=150% (linear interpolation) .
• RSU vesting: 3-year cliff vesting from grant date (e.g., 2024 grants vest on the third anniversary) .
• Dividend treatment: RSUs receive dividend equivalents as paid; PSUs accrue dividend equivalents payable only to the extent the award vests after the performance period .

Detailed performance compensation table

Equity Ownership & Alignment

• Stock ownership guidelines: CFO and all other executive officers target ownership of 3× base salary (CEO 5×; directors 5× cash retainer); new participants have five years to comply .
• Anti-hedging/pledging: Executives and directors are prohibited from hedging or pledging CFR securities; also no short sales, derivatives, or margin accounts under the Insider Trading Policy .
• Clawback: Policy adopted October 25, 2023 to recover erroneously awarded incentive-based compensation upon accounting restatements per SEC/NYSE rules; no indemnification allowed for recovered amounts .
• Alignment shift: 2024 LTI increased RSU weighting (75%) vs PSUs (25%), emphasizing time-based retention while maintaining performance linkage via relative ROA PSUs .
• Ownership status: The proxy lists beneficial ownership for Section 16 officers as of March 4, 2025, but does not include a line item for Mr. Geddes; no pledging disclosed for executives given policy prohibition .

Employment Terms

• Employment contracts: The company does not maintain employment agreements for executives .
• Change-in-control (CIC) severance plan: Double-trigger; CFO classified among “remaining Named Executive Officers” with severance of 2× (base salary + target annual incentive) plus prorated annual incentive for year of termination; continued welfare benefits for two years; “net-better” excise tax cutback; equity vests per plan (options vest; RSUs vest; PSUs performance determined at CIC date but remain subject to time-based vesting) .
• Stock plans: Double-trigger vesting under the 2024 Equity Incentive Plan and 2015 Omnibus Incentive Plan following a CIC .
• Ownership/Trading: Prohibition on pledging/hedging; 10b5-1 plan guidelines apply .

Compensation Structure Analysis

• Mix and risk: Heavy at-risk pay via annual incentive tied to budgeted net income and multi-year equity with performance and retention features; no single-trigger CIC vesting; no excise tax gross-ups; clawback in place .
• 2024–2025 changes: LTI mix shifted to 25% PSUs/75% RSUs, increasing retention value and smoothing performance cyclicality vs prior 50/50; Committee also increased long-term award values to remain competitive against peers .
• Performance linkage: PSU metric changed to relative ROA vs defined peer group for 2025–2027, aligning value creation with profitability efficiency rather than pure growth .
• Shareholder support: Say-on-pay approval exceeded 97% in 2024, indicating broad investor endorsement of program design .

Say‑on‑Pay & Shareholder Feedback

• 2024 Say-on-Pay: >97% of votes cast supported executive pay programs .
• Governance safeguards in pay: No single-trigger CIC, no excise tax gross-ups, robust stock ownership guidelines, and clawback compliant with NYSE/SEC .

Compensation Peer Group (for benchmarking)

• 2024 peer framework (for 2025 decisions): 27 banks (23 core peers, 4 aspirational). Examples include Associated Banc-Corp, BOK Financial, Prosperity Bancshares, Webster, Wintrust; aspirational peers include Huntington, KeyCorp, Regions, Flagstar .

Performance & Track Record

• Company performance context under current pay design: 2024 net income of ~$575.9M vs $531M budget (108% of budget), producing 110% of target annual incentives for NEOs; PSU awards from 2021 cycle (PPNR growth adjusted for net charge-offs) paid at 150% based on 89.8% growth over 2022–2024 .
• Shareholder returns: Five-year cumulative TSR value at 159.77 on a $100 base vs 144.74 for the peer group index over the same horizon (measurement to 2024) .

Risk Indicators & Red Flags

• Positive mitigants: Double-trigger CIC; anti-hedging/pledging; board/committee independence; clawback adoption; no employment agreements; strong say-on-pay support .
• Areas to monitor: Increased RSU mix (75%) improves retention but dilutes pure performance leverage; continued scrutiny of net income budgeting as primary annual driver; regulatory and macro risks emphasized in 10‑K risk factors for CRE, energy, liquidity and rate risk, all of which can impact incentive outcomes and capital flexibility .

Investment Implications

• Alignment: The 2025 CFO enters under a pay model with clear corporate performance linkage (budgeted net income) and a multi-year relative-ROA PSU overlay, plus strict anti-hedging/pledging and robust ownership guidelines—supportive of shareholder alignment .
• Retention and selling pressure: The shift to 75% RSUs increases retention value and may reduce near-term insider selling pressure versus a more option- or PSU-heavy mix; RSUs cliff vest on the third anniversary, creating discrete future vesting windows that investors can monitor for potential liquidity events across the exec team .
• Downside protection and governance: Double-trigger CIC economics (2× for CFO) and absence of tax gross-ups are shareholder-friendly; high historical say‑on‑pay support (>97%) reduces governance overhang risk .
• Execution risk: As CFO assumes role amid a normalized rate regime, CRE concentration/cycle risks, liquidity sensitivity (uninsured deposits), and securities portfolio unrealized losses remain key variables influencing incentive realization and capital planning; monitoring quarterly disclosures and budget calibration remains critical .