Phillip D. Green
CULLEN/FROST BANKERSAbout Phillip D. Green
Phillip D. “Phil” Green is Chairman and CEO of Cullen/Frost Bankers, Inc. (and Frost Bank), age 70, with over 44 years at the firm after joining in July 1980; he previously served as CFO (1995–2015) and President (2015) before becoming Chairman and CEO in 2016. He holds a bachelor’s degree in accounting from the University of Texas at Austin (1977) and spent three years in public accounting with Ernst & Ernst prior to Frost . Under his tenure, Cullen/Frost delivered net income available to common shareholders of approximately $575.9 million in 2024 (108% of budget) and achieved strong TSR outcomes in SEC pay-versus-performance disclosures, with CEO “compensation actually paid” aligned to multi-year performance trends .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cullen/Frost Bankers, Inc. | CFO | 1995–2015 | Led finance through growth; foundation for conservative, profitable risk profile . |
| Cullen/Frost Bankers, Inc. | President | 2015 | Transition lead prior to assuming CEO role . |
| Cullen/Frost Bankers, Inc. | Chairman & CEO | 2016–present | Expansion across Texas; 31+ consecutive years of dividend increases; customer-service accolades . |
| Cullen/Frost Bankers, Inc. | Managerial roles (Financial Division) | 1980–1995 | Progressive leadership culminating in CFO appointment . |
| Ernst & Ernst | Public Accountant | 1977–1980 | Finance and audit training prior to banking career . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Southwest Research Institute | Director; Chair, Investment Committee | Not disclosed | Governance and investment oversight . |
| UT System Chancellor’s Council Executive Committee | Member | Not disclosed | UT System engagement . |
| UT McCombs School (Advisory Council; Scholars Program Committee) | Member | Not disclosed | Business school support; Hall of Fame inductee (Nov 2023) . |
| Tobin Center for the Performing Arts | Board Chair | Not disclosed | Community leadership . |
| United Way of San Antonio & Bexar County | Executive Committee & Board of Trustees; 2024 Campaign Chair | 2024 campaign | Civic leadership . |
| Federal Reserve Board’s Federal Advisory Council | District 11 Representative | 2018–2021; 2025–2027 | Advisory role to the Fed; asked to serve another three-year term beginning in 2025 . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $1,100,000 | $1,200,000 | $1,225,000 |
| Stock Awards (grant-date fair value, $) | $3,174,997 | $3,400,043 | $3,520,010 |
| Non-Equity Incentive ($) | $1,787,500 | $1,458,000 | $1,819,125 |
| All Other Compensation ($) | $305,599 | $429,811 | $168,275 |
| Total ($) | $6,368,096 | $6,487,854 | $6,732,410 |
| 2025 Base Salary Update | 2024 Base Salary | 2025 Base Salary | Change |
|---|---|---|---|
| CEO (Green) | $1,225,000 | $1,260,000 | +3% |
| Perquisites & Benefits (2024) | Amount ($) |
|---|---|
| Perquisites and Other Personal Benefits (incl. home security $31,885; personal charter aircraft $42,316) | $93,564 |
| 401(k) Match | $20,700 |
| Thrift Incentive Plan Match | $52,800 |
| Group Term Life | $1,211 |
| Pension/Retirement (Present Value at FY2024) | Amount ($) |
|---|---|
| Retirement Plan (defined benefit; frozen) | $574,711 |
| Retirement Restoration Plan (nonqualified; frozen) | $785,084 |
Key policies:
- No employment agreements for executives .
- Clawback policy adopted Oct 2023 (Exchange Act 10D, NYSE-compliant) .
- Anti-hedging and anti-pledging for directors and executive officers .
Performance Compensation
| Annual Incentive (2024) | Target | Actual | Payout |
|---|---|---|---|
| CEO Target (% of base) | 135% | Net income budget $531M vs actual ≈$576M | 110% of target; $1,819,125 |
| Long-Term Incentive Grants (10/29/2024) | Units Granted | Grant-Date FV per Unit ($) | Vesting |
|---|---|---|---|
| RSUs | 20,341 | $129.79 | Cliff vest at 3 years (10/29/2027); dividends paid during vesting . |
| PSUs | 7,384 (target) | $119.17 | 3-year performance period (1/1/2025–12/31/2027); payout by relative ROA vs peer group; 0–150% of target . |
PSU metric and curve:
- ROA percentile vs peers: 25th→50% payout; 50th→100%; 75th+→150%; linear interpolation in between .
- Prior PSU cycle (granted 10/26/2021) paid 150% based on 89.8% growth in Average Pre-Provision Net Revenue adjusted by Net Charge-Offs over 2022–2024 .
Mix shift:
- Committee shifted LTI weighting to 25% PSUs / 75% RSUs in Oct 2024 (from 50/50) to balance retention and long-term alignment amid rate volatility and expansion strategy .
Equity Ownership & Alignment
| Ownership (as of 3/4/2025) | Shares |
|---|---|
| Beneficial Ownership (CEO) | 141,784 (incl. 38,865 in trusts; 1,100 spouse shares disclaimed) |
| % Outstanding | Less than 1% (per proxy threshold for display) |
| Shares Outstanding (for reference) | 64,282,541 |
| Outstanding Equity (as of 12/31/2024) | Count | Market/Payout Value ($) | Vesting Dates |
|---|---|---|---|
| RSUs not vested (aggregate of grants) | 51,483 | $6,911,593 (at $134.25) | 10/25/2025; 10/24/2026; 10/29/2027 |
| PSUs unearned (aggregate of grants) | 42,039 | $5,643,736 (at $134.25) | Subject to 2025–2027 performance and certification |
| Options outstanding | None | — | — |
| 2024 Vested (realized) | RSU: 28,042; PSU: 19,433 | RSU: $3,573,112; PSU: $2,215,945 | 2024 vestings |
| 2024 Option Exercises | 34,505 | $2,500,139 | 2024 |
Ownership policies and alignment:
- Stock ownership guidelines: CEO 5× base salary; all long-tenured NEOs compliant .
- Anti-hedging and anti-pledging policy in effect .
- Insider trading policy governs 10b5-1 plan adoption and prohibits short selling and derivatives on company stock .
Employment Terms
| Change-in-Control (double-trigger) | CEO Multiple | Components | Other Terms |
|---|---|---|---|
| Severance | 3× base + target annual incentive + prorated year-of-termination incentive | Lump sum; welfare benefits continuation for 3 years | “Net-better” cutback; no excise tax gross-up; options become exercisable; RSUs vest; PSUs performance fixed as of CoC but continue time-based vesting . |
| Estimated CoC Qualifying Termination (as of 12/31/2024) | Cash Severance ($) | Equity ($) | Benefits ($) | Total ($) |
|---|---|---|---|---|
| Phillip D. Green | 10,290,000 | 12,765,843 | 41,235 | 23,097,078 |
Other terms:
- No employment agreements or general severance policies for NEOs beyond the CoC plan .
- Retirement eligibility mechanics described; RSUs/PSUs continue vesting on original schedules post-retirement at age 65+ .
Board Governance
- Board roles: Green is Director since 2016; Chairman & CEO; member of Risk Committee; Chair of Executive Committee .
- Independence: All directors except Green are independent under NYSE rules .
- Leadership structure: Board intentionally combines CEO and Chairman roles; Lead Independent Director (Charles W. Matthews) has defined powers including leading CEO evaluation and presiding over executive sessions .
- Committees with Green’s involvement: Executive (Chair), Risk (member) .
- Meetings: The Board met five times in 2024; strong attendance with most directors at 100% and two directors above 80%; non-management directors meet in executive session at each regular meeting .
- Director compensation: Green receives no director fees due to executive status .
Dual-role implications:
- Combined CEO/Chairman concentrates authority; mitigants include a robust Lead Independent Director role, majority independent board (92% independent), and defined committee oversight across Audit, Compensation, Governance, Risk, and Technology .
Performance & Track Record
- Strategic expansion: Growth in Frost locations across Houston, Austin, Dallas regions; sustained customer-service leadership (15+ consecutive years JD Power #1 in Texas retail banking) .
- Financial performance: 2024 net income available to common shareholders ≈$575.9M, exceeding budget by 8.4%; annual incentives paid at 110% of target reflecting pay-for-performance linkage .
- Say-on-Pay: 2024 approval >97%, endorsing compensation program design .
Compensation Structure Analysis
- Mix shift to 75% RSU / 25% PSU in 2024 (from 50/50) favors retention and time-based equity, reducing reliance on performance-levered awards amid rate volatility and expansion initiatives .
- PSU metrics evolved from PPNR growth (2021 awards paid at 150%) to relative ROA for the 2025–2027 cycle, tightening alignment with profitability vs peers .
- Governance-friendly features: No employment contracts; no excise tax gross-ups; strong clawback policy; anti-pledging/hedging; robust ownership guidelines and compliance .
Equity Ownership & Trading Signals
- Near-term equity supply dynamics: Scheduled RSU cliffs on 10/25/2025 (11,097 units), 10/24/2026 (20,045 units), 10/29/2027 (20,341 units), plus PSU outcomes in 2027, may create event-driven liquidity needs (tax withholding or portfolio rebalancing), though pledging/hedging is prohibited .
- 2024 realized awards: Significant vesting (RSUs 28,042; PSUs 19,433) and option exercises (34,505) indicate substantial realized equity; monitor future Form 4s for disposition patterns around vesting dates .
Compensation Peer Group (2024 review; for 2025 decisions)
- Peer group includes 23 peers and 4 aspirational (e.g., Huntington, Regions, KeyCorp, Flagstar); Cullen/Frost at the 44th percentile by asset size vs peers; Meridian engaged as independent consultant with annual independence review .
Say-On-Pay & Shareholder Feedback
- 2024 say-on-pay approval >97%; Committee maintained conservative reward programs aligned with historic philosophy .
Employment Terms & Policies Summary
- Change-in-control: Double-trigger vesting; CEO severance multiples; benefit continuations; “net-better” excise cutback; RSU immediate vest; PSUs performance fixed and continue time-based vesting .
- Clawback: Mandatory recoupment for accounting restatements under Exchange Act 10D and NYSE rules .
- Insider trading & ownership policies: Prohibit short selling, derivatives, pledging; 10b5-1 governance; directors/executives adhere to ownership guidelines .
Investment Implications
- Alignment: Strong pay-for-performance linkage (110% payout on budget beat; PSU structures tied to profitability metrics); robust governance (clawback, anti-pledging, no employment contracts) reduces headline risk .
- Retention vs performance mix: 2024 shift to 75% RSUs enhances retention and ownership stability but lowers upside leverage vs PSUs; consider the effect on long-term incentive sensitivity to performance .
- Event risk/M&A: CEO’s double-trigger CoC package ($23.1M estimated) and immediate RSU vesting with PSU performance fixation could impact acquisition economics and negotiating leverage; monitor potential M&A chatter given policy terms .
- Trading signals: Upcoming RSU cliffs (2025–2027) and PSU settlement (2027) create predictable windows for potential share flow; anti-pledging reduces forced selling risk; watch Form 4s around vest dates for selling pressure indicators .