Paul Bunn
COVENANT LOGISTICS GROUPAbout Paul Bunn
M. Paul Bunn, 47, is President of Covenant Logistics Group (CVLG) and has served as President since January 2023 (President & COO through April 2024). He joined CVLG in 2009 and previously served as CFO, COO, CAO, Chief Accounting Officer, Treasurer, SVP, and Corporate Controller; earlier he was an Audit Senior Manager at Ernst & Young LLP . Company performance context: 2024 revenue exceeded $1.1B, EPS was $1.30, and ROIC was 4.1%; the company paid four dividends and recorded its highest stock price in 2024 . Pay-versus-performance disclosures show strong multi-year shareholder returns (CVLG TSR $434.47 on a $100 base since 12/31/2019) with 2024 net income of $35.9M and Adjusted EPS of $1.98; CVLG outperformed the NASDAQ Transportation Index ($133.76) on the same basis .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Covenant Logistics Group | President (Jan 2023–present; President & COO through Apr 2024) | 2023–present | Leads strategic initiatives, operations, and diversification of service offerings . |
| Covenant Logistics Group | Senior EVP, COO & Secretary | 2021–2023 | Drove operational execution and efficiency improvements . |
| Covenant Logistics Group | EVP, CFO & Secretary | 2020–2021 | Led finance, capital allocation, and reporting . |
| Covenant Logistics Group | EVP & CAO | 2019–2020 | Oversaw corporate administration and controls . |
| Covenant Logistics Group | Chief Accounting Officer & Treasurer; SVP | 2012–2020 (CAO/Treasurer); SVP 2017–2019 | Strengthened accounting, control environment, and treasury . |
| Covenant Logistics Group | Corporate Controller | 2009–2012 | Built controllership function post-joining CVLG . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Ernst & Young LLP | Audit Senior Manager | Pre-2009 | Public company audit/controls expertise, relevant to CVLG finance and governance . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary paid ($) | 412,471 | 537,959 | 618,467 |
| Target annual bonus (% of year-end salary) | — | — | 100% |
| Actual annual bonus paid ($) | 602,458 | 328,133 | 647,368 |
| Notable base pay action | — | Base to $525,013 (6/26/2023) | Raised from $525,013 to $700,000 (6/24/2024) |
Notes: 2024 salary increase mid-year to $700,000; SCT salary reflects actual paid. 2024 target bonus explicitly disclosed; prior-year targets not disclosed in available excerpts .
Performance Compensation
2024 Short-Term Incentive (STIP)
| Element | Plan design | 2024 outcome |
|---|---|---|
| Adjusted EPS goal | Earn up to 150% of target bonus based on FY24 Adjusted EPS: $1.775 (37.5%), $2.075 (75%), $2.275 (150%), with interpolation between thresholds . | FY24 Adjusted EPS $1.98 achieved; payout included in actuals . |
| Strategic projects (Bunn) | Up to +25% of target: (1) Lew Thompson & Son: quarterly adj. operating income ≥$5M for any quarter and safety criteria (16.75%); (2) IT strategic projects (up to 8.25%) across 4 deliverables . | Lew Thompson & Son achieved; all four IT projects achieved; total STIP payout to Bunn $647,368 . |
| Total payout (cash) | Target 100% of year-end salary . | $647,368 . |
2024 Long-Term Incentive (LTI) Mix and Vesting
| Component | Instrument | Grant date | Target/Granted | Vesting/Performance terms |
|---|---|---|---|---|
| Time-based RSUs | RSU | 06/21/2024 | 21,150 units; grant-date FV $499,986 | 33.34% on 7/1/2025, 33.34% on 7/1/2026, 33.34% on 7/1/2027 . |
| Performance-based RSUs (Adjusted EPS) | PRSU | 06/21/2024 | 21,152 units at target; grant-date FV $500,033 | 25% of LTI tied to 3-year cumulative Adjusted EPS (threshold $6.00=50%, target $6.75=100%, max $7.50=200%); performance period ends 12/31/2027 . |
| Performance-based RSUs (ROIC) | PRSU | 06/21/2024 | Included above (split between EPS/ROIC) | 25% of LTI tied to 3-year average ROIC (7.0%=50%, 9.0%=100%, 11.0%=200%); performance period ends 12/31/2027 . |
| Service-based tranche | As part of 2024 LTI | 06/21/2024 | 50% of target payable via time-vest | 16.67% vests each on 7/1/2025, 7/1/2026, 7/1/2027 . |
Additional performance plans:
- Lew Thompson & Son Bonus Plan (2023 awards): 5,166 performance-based restricted shares for Bunn earned (LT Target 1) vesting 12/31/2025; plus 7,750 time-based restricted shares vesting 12/31/2025 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 624,962 shares as of 3/27/2025 (2.8% of Class A; 2.3% of total); includes 117,791 directly, 5,030 spouse, 460,576 options exercisable, and 41,565 shares in 401(k) . |
| Vested vs unvested (selected) | Options exercisable: 360,576 (11/11/2020 grant, $7.885 strike, exp. 11/11/2030) and 100,000 (4/6/2021 grant, $10.62 strike, exp. 4/6/2031) . Unvested: 21,150 time-based RSUs (2024 LTI), 5,288 performance RSUs at threshold (2024 LTI), 5,166 PBRS (LT plan, vests 12/31/2025), 7,750 time-based restricted stock (vests 12/31/2025), plus 33,334 restricted shares that vested 1/1/2025 . |
| In-the-money status | Year-end 2024 stock price $27.255 exceeds option strikes ($7.885 and $10.62), indicating options were in-the-money on 12/31/2024 . |
| Insider selling/exercises | No options exercised by any NEO in 2024; Bunn had 19,778 shares vest in 2024 (value $507,596) . |
| Pledging/hedging | Prohibited for CEO, President, COO, CFO, and directors; no hardship exception . |
| Ownership guidelines | President guideline: 1x annual base salary; CEO 6x; Directors 5x retainer . Compliance status not disclosed. |
Vesting and potential selling pressure:
- Time-based RSU cliffs on 7/1/2025, 7/1/2026, 7/1/2027; Lew Thompson plan vesting on 12/31/2025 could add supply around those dates absent 10b5-1 plans .
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | At-will (no employment contract) . |
| Severance (termination without cause) | Salary continuation: 24 months; bonus: target bonus for year of termination if earned at/above minimum, prorated; COBRA reimbursement: 24 months; non-compete duration: 12 months post-termination . |
| Change-in-control (double trigger) | Lump sum 300% of base salary; target bonus for year of termination; COBRA reimbursement 36 months; equity awards require double trigger for acceleration (post-July 2020 awards) . |
| Clawback | Mandatory recovery for accounting restatements; Board may also claw back for restrictive covenant breaches, misconduct, or reputational harm for awards after 10/2/2023 . |
| Hedging/pledging | Hedging and pledging prohibited; no margin purchases for covered insiders . |
| Tax gross-ups | No tax gross-ups; policy confirmed in compensation program features . |
| Deferred compensation | Participant; contributed $155,300 in 2024; year-end balance $386,984 (company match not shown for Bunn) . |
Compensation Structure Analysis
- Mix shifting to RSUs from legacy options: Bunn holds older stock options (2020/2021) but 2023–2024 LTI awards are restricted stock/RSUs with a 50/50 split between time-based and performance-based tranches, lowering risk versus options and emphasizing retention and multi-year performance (Adjusted EPS/ROIC) .
- Higher guaranteed base in 2024: mid-year salary increase to $700,000 raises fixed pay while maintaining a high at-risk component via STIP and PRSUs .
- Strong pay-for-performance alignment: STIP tied to company-wide Adjusted EPS plus strategic initiatives; LTI uses 3-year Adjusted EPS and ROIC with 50–200% payout curves; company discloses robust clawback and anti-hedge/pledge controls .
- Say-on-pay: 98.7% approval in 2024 indicates strong shareholder support for the compensation program .
- Peer benchmarking: Compensation Committee uses a 15-company peer set (e.g., ArcBest, Saia, Werner; updated to include Hub Group in 2025) with Pearl Meyer as independent consultant, limiting pay inflation risk through market reference points .
Performance & Track Record
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| TSR ($100 initial) | 114.58 | 204.49 | 270.24 | 363.79 | 434.47 |
| Net Income ($000s) | (42,718) | 60,731 | 108,682 | 55,229 | 35,921 |
| Adjusted EPS ($) | 0.54 | 1.81 | 2.92 | 2.08 | 1.98 |
Contextual highlights:
- 2024: revenue >$1.1B, EPS $1.30, ROIC 4.1%, four dividends, record stock price .
- 2024 STIP outcomes reflected Adjusted EPS achievement ($1.98) and completion of all four IT strategic projects; Bunn’s cash bonus: $647,368 .
Execution considerations:
- Diversification into higher-margin segments and service mix expansion emphasized by the Board; risk oversight formalized via Risk Committee .
Compensation Governance
- Compensation Committee: Chair W. Miller Welborn; members D. Michael Kramer and Herbert J. Schmidt; 6 meetings in 2024; uses Pearl Meyer as independent advisor .
- Policies: robust clawback, anti-hedge/pledge, double-trigger equity/CIC, no option repricing, no tax gross-ups, minimum 12-month equity vesting (limited exceptions) .
- Related party transactions: none >$120,000 in 2024 .
Equity and Awards Detail (as of 12/31/2024)
| Type | Quantity | Key terms |
|---|---|---|
| Options (exercisable) | 360,576 (11/11/2020 grant, $7.885, exp. 11/11/2030) | In-the-money at $27.255 YE price . |
| Options (exercisable) | 100,000 (4/6/2021 grant, $10.62, exp. 4/6/2031) | In-the-money at $27.255 YE price . |
| Time-based RSUs (2024 LTI) | 21,150 | Vest 7/1/2025, 7/1/2026, 7/1/2027 (33.34% each) . |
| Performance RSUs (2024 LTI) | 5,288 (threshold shown) | 3-year EPS/ROIC performance, ending 12/31/2027 . |
| Lew Thompson plan – PBRS earned | 5,166 | Vests 12/31/2025 (LT Target 1 achieved) . |
| Lew Thompson plan – time-based RS | 7,750 | Vests 12/31/2025 . |
| Restricted shares vesting 1/1/2025 | 33,334 | Already vested on 1/1/2025 (reflected as unvested at 12/31/2024) . |
Employment & Contracts
| Topic | Key terms |
|---|---|
| Severance (without cause) | 24 months salary, prorated target bonus if earned ≥ minimum, 24 months COBRA; 12-month non-compete . |
| CIC (double trigger) | 300% base salary lump sum, target bonus, 36 months COBRA; equity requires double trigger to accelerate . |
| Other | No employment agreement; at-will . |
Investment Implications
- Pay-for-performance alignment appears strong: STIP tied to Adjusted EPS and strategic execution; LTI balanced between time-based retention and multi-year Adjusted EPS/ROIC outcomes with 50–200% payout curves, plus robust clawback/anti-pledge controls and double-trigger CIC; 98.7% say-on-pay support indicates shareholder buy-in .
- Retention risk mitigated by substantial unvested equity through 2027 and 24-month salary continuation in severance; CIC economics (3x salary) are meaningful but include double trigger and no tax gross-ups, balancing incentives and governance .
- Insider selling pressure windows: time-based RSUs vest on 7/1/2025, 7/1/2026, 7/1/2027 and LT plan vestings on 12/31/2025; monitor 10b5-1 filings and Form 4s around those dates; note no options were exercised in 2024 .
- Alignment via ownership: Bunn beneficially owns ~2.8% of Class A (including significant in-the-money options), with pledging prohibited; ownership guidelines (1x salary) are in place, though compliance status is not disclosed .
- Performance backdrop: multi-year TSR outperformance vs industry benchmark and record stock price in 2024 underpin confidence, but net income/Adjusted EPS moderated in 2024; LTI targets (EPS/ROIC) will test operational execution through 2027 .