David R. Parker
COVENANT LOGISTICS GROUPAbout David R. Parker
David R. Parker is 67 and has served as Covenant Logistics’ Chairman of the Board and Chief Executive Officer since 1994, having founded Covenant Transport in 1985 and served as President until February 2016 . Under his leadership, Covenant generated over $1.1 billion of revenue in 2024 and recorded its highest stock price; Adjusted EPS was 1.98 and ROIC was 4.1% for 2024 . The pay-versus-performance disclosure shows cumulative TSR of $434.47 for a $100 investment since year-end 2019, illustrating strong value creation over the recent period . Mr. Parker currently serves on the board of the American Trucking Associations and previously served on the Federal Reserve Bank of Atlanta’s Trade and Transportation Advisory Council (2012–Oct 2017) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Covenant Logistics Group, Inc. | Chairman & CEO | 1994–present | Founder-led strategy and executive oversight; grew platform to ~$1.1B revenue in 2024 and ~2,300 tractors and ~6,400 trailers as of 12/31/2024 |
| Covenant Transport, Inc. | President | 1985–Feb 2016 | Built scale from 25 tractors/50 trailers at founding; expansion into integrated logistics |
| Federal Reserve Bank of Atlanta (TTAC) | Member, Trade & Transportation Advisory Council | 2012–Oct 2017 | Policy and industry advisory engagement |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| American Trucking Associations | Director | Current | Industry leadership and advocacy |
| Truckload Carriers Association | Past Director | N/A | Sector engagement |
| Parker Family Limited Partnership | General Partner | N/A | Family investment/holding vehicle |
| Religious and Civic Organizations | Director/Similar capacities | N/A | Community involvement |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 743,070 | 799,579 | 804,710 |
| Bonus ($) | – | – | 250,000 (2023 LTI service-based cash) |
| Stock Awards ($) | – | – | – |
| Non-Equity Incentive Plan Compensation ($) | 1,293,260 | 502,944 | 827,690 (includes $744,357 2024 bonus; see Performance Compensation) |
| All Other Compensation ($) | 80,479 | 79,295 | 157,197 (incl. $138,869 corporate aircraft use; wellness credit, LTD, club fees/dues) |
| Total Compensation ($) | 2,116,809 | 1,381,818 | 2,039,597 |
Performance Compensation
| Component | Metric/Structure | Targets | Actual/Payout | Vesting |
|---|---|---|---|---|
| 2024 Senior Executive Bonus Program | Adjusted EPS-based bonus (up to 150% of target) plus strategic goals (+25% of target) | EPS thresholds: $1.775 (37.5%), $2.075 (75%), $2.275 (150%); Strategic: Lew Thompson & Son (16.75%), IT projects (up to 8.25%) | Adjusted EPS 2024: 1.98; strategic goals achieved (LTS and 4/4 IT projects); Mr. Parker payout: $744,357 | Cash bonus; performance period Jan 1–Dec 31, 2024 |
| 2024 Long-Term Incentive Plan (LTI) – CEO | $2,500,000 target, issued in cash given large stock ownership | 25% tied to 3-year cumulative Adjusted EPS: $6.00 (50%), $6.75 (100%), $7.50 (200%); 25% tied to 3-year average ROIC: 7% (50%), 9% (100%), 11% (200%); 16.67% time-based on 7/1/2025, 7/1/2026, 7/1/2027 | Award approved on 6/21/2024; performance tranches payable based on 3-year outcomes; time tranches require continued service | Time-based: 16.67% each on 7/1/2025, 7/1/2026, 7/1/2027; performance tranches end 12/31/2027 |
| 2023 LTI service-based payout | Cash in lieu of restricted shares | Continued service through 12/31/2024 | $250,000 paid for service component | Paid in 2024 |
- Program features: No tax gross-ups; double-trigger CIC for severance and equity; clawback policy covering restatements, misconduct, and restrictive covenant breaches; anti-hedging and anti-pledging with no hardship exception .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 8,290,779 shares (Class A and Class B combined for David & Jacqueline Parker as joint filers) |
| Breakdown | 2,365,142 Class A (joint); 4,700,000 Class B (joint); 349,074 Class A (Mr. Parker); 800,000 Class A options currently exercisable; 76,563 shares in 401(k) |
| Ownership as % | 15.8% of Class A; 100% of Class B; 30.3% of total outstanding; ~40.5% of total voting power due to two-vote Class B |
| Stock ownership guidelines | CEO guideline: six times annual base salary |
| Anti-hedging/anti-pledging | Hedging and pledging prohibited for CEO and directors; no hardship exception |
| Options outstanding | 800,000 options exercisable; strike $10.62; expiration 04/06/2031 |
Employment Terms
| Provision | Terms |
|---|---|
| Employment status | At will; no employment agreement |
| Severance (no CIC) | 24 months salary continuation; target bonus for year of termination (if earned at/above minimum) prorated; 24 months COBRA reimbursement; 12-month non-compete |
| Change-in-Control (double trigger) | 300% of annualized base salary lump sum; target bonus; 36 months COBRA; 12-month non-compete; acceleration of LTI/RSUs under plan terms upon double-trigger CIC |
| Clawback | Mandatory recovery upon restatements; Board discretion to recover for misconduct or restrictive covenant breaches for awards after Oct 2, 2023 |
| Deferred compensation | Plan available; Parker had no contributions or balance for 2024 |
Board Governance
- Role: Chairman & CEO since 1994; Board annually elects CEO and Chair; Lead Independent Director (W. Miller Welborn) presides over independent sessions and acts as liaison .
- Independence: Two-thirds of the Board is independent; Audit, Compensation, Nominating Committees comprised solely of independent directors; independent directors held four special meetings in 2024 .
- Committees: Mr. Parker, as CEO/Chair, is not on independent committees; Audit Chair is Kramer; Compensation Chair is Welborn; Risk Chair is Schmidt .
- Meetings/Attendance: Board held seven meetings in 2024; all directors attended at least 75% of Board and committee meetings; all directors attended the 2024 annual meeting .
- Dual-role implications: Board affirms combined CEO/Chair is balanced by strong independent oversight and a Lead Independent Director; structure may elevate efficiency but requires robust independence safeguards, which are in place .
Director Compensation
- Employee directors do not receive Board/committee pay; non-employee directors received cash retainers and ~$100,000 RSU grants with one-year vesting and ownership guidelines of five times annual cash retainer .
Compensation Peer Group and Say-on-Pay
- 2024 peer group used by Compensation Committee and Pearl Meyer includes ArcBest, Astec Industries, Forward Air, Heartland Express, Insteel, Janus International, Kirby, Marten, Miller Industries, NN Inc., PAMT Corp., Radiant Logistics, Saia, Wabash, Werner; 2025 change: Hub Group replaces Heartland Express .
- Say-on-pay approval: ~98.7% approval at 2024 annual meeting; committee cited strong shareholder support .
Related Party Transactions and Red Flags
- Related party transactions >$120,000 must be preapproved by Audit Committee; none exceeded the threshold in 2024 .
- Repricing/backdating prohibited; no tax gross-ups; anti-hedging/pledging policy in force; double-trigger CIC required for equity vesting; clawback policy expanded beyond SEC mandates .
Performance & Track Record
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Company TSR (Value of $100) | 114.58 | 204.49 | 270.24 | 363.79 | 434.47 |
| Net Income (Loss) ($000s) | (42,718) | 60,731 | 108,682 | 55,229 | 35,921 |
| Adjusted EPS | 0.54 | 1.81 | 2.92 | 2.08 | 1.98 |
- Operational scale: ~2,300 tractors and ~6,400 trailers as of 12/31/2024; 2024 revenue over $1.1B; four quarterly dividends; NYSE uplist in Aug 2024 .
Compensation Structure Analysis
- Mix shifts: CEO did not receive 2024 equity grants; LTI issued in cash due to significant stockholdings, keeping exposure to performance metrics while limiting dilution .
- At-risk pay: Annual cash bonus linked to consolidated Adjusted EPS and strategic milestones; LTI performance tranches tied to multi-year EPS and ROIC with 50–200% payout scalers .
- Governance safeguards: Double-trigger CIC; no re-pricing; clawback enhancements; anti-hedging/pledging; independent committee oversight and external consultant .
Equity Vesting and Insider Selling Pressure
- Upcoming vesting/cash LTI events: Service-based cash tranches on 7/1/2025, 7/1/2026, 7/1/2027; performance tranches conclude 12/31/2027, potentially increasing cash proceeds depending on EPS/ROIC outcomes .
- Options: 800,000 options (exercisable; $10.62 strike; expire 04/06/2031) could be exercised; hedging and pledging are prohibited, reducing forced-sale pressure from collateral requirements .
Employment Terms – Severance and Change-in-Control Economics
| Scenario | Cash Multiple | Bonus Treatment | COBRA | Non-Compete | Notes |
|---|---|---|---|---|---|
| Termination without Cause (no CIC) | 24 months salary continuation | Target bonus for year of termination if earned at/above minimum; prorated | 24 months | 12 months | Release and customary provisions |
| CIC with termination (double trigger) | 300% of base salary (lump sum) | Target bonus for year of termination | 36 months | 12 months | Equity subject to double-trigger acceleration under plan |
Board Service History and Roles
- Service on Covenant Board since 1994 as Chairman; independent committees comprised solely of independent directors; Lead Independent Director role established to balance combined CEO/Chair structure .
- Committee participation: Independent directors chair and populate Audit, Compensation, Nominating, and Risk committees; Parker is not a member of these committees as CEO/Chair .
- Independence issues: Board states combined CEO/Chair is appropriate given oversight structures and Parker’s industry knowledge and large stockholdings; independent directors met in executive sessions; majority of Board is independent .
Investment Implications
- Alignment: Very high insider ownership and voting power (~40.5%) align incentives but concentrate control; anti-hedging/pledging and CEO ownership guideline further reinforce alignment .
- Performance leverage: Multi-year LTI tied to Adjusted EPS and ROIC with capped scalers and double-trigger CIC reduces windfall risk and encourages durable improvement; near-term vesting dates create scheduled cash flows rather than share supply .
- Governance mitigants: Combined CEO/Chair structure is offset by two-thirds independent Board, a Lead Independent Director, independent committees, and robust clawback policies—reducing governance risk in dual-role scenarios .
- Retention risk: Generous severance/CIC terms (24 months salary; 300% CIC multiple) combined with time-based LTI tranches lower near-term departure risk; non-compete constraints provide continuity protection .