James Lally
About James B. Lally
James B. Lally (age 57) is President and CEO of Enterprise Financial Services Corp (EFSC) since May 2017 and Chairman & CEO of Enterprise Bank & Trust (EB&T) since May 2022; he joined EFSC in 2003 and rose through regional and commercial banking leadership roles . Under his leadership, EFSC delivered record operating revenue of $638M, 2024 net income of $185M, EPS of $4.83, adjusted ROATCE of 13.71%, and cumulative TSR performance that valued a $100 investment at $130 vs peer $122; STIP paid 137–139% of target and the 2022–2024 LTIP paid 181% of target . Say‑on‑Pay approval was 96% in 2024, with 74% of CEO pay at risk, aligned to EPS, ROATCE, credit quality, loan growth, and leadership metrics . He is a director of EFSC (since 2017) and chairs the subsidiary bank board; EFSC maintains an independent Board Chair model, limiting dual‑role concerns at the holding company level .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Enterprise Financial Services Corp | President (EFSC) | Aug 2016–present | Led corporate strategy and performance; transitioned to CEO in May 2017 |
| Enterprise Bank & Trust | Chairman & CEO | May 2022–present | Governance and operating leadership of bank subsidiary |
| Enterprise Bank & Trust | President, Commercial Banking | 2014–May 2016 | Oversaw commercial banking across regions |
| Enterprise Bank & Trust | President, St. Louis Region | 2011–2014 | Grew regional franchise and lending |
| Enterprise Bank & Trust | SVP; President, Clayton Unit | 2003; 2008 | Early leadership posts in market banking |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| U.S. Bank (prior to EFSC) | Commercial banking roles | Not disclosed | Built foundational corporate banking experience |
| Commerce Bank (prior to EFSC) | Commercial banking roles | Not disclosed | Expanded lending and client coverage expertise |
Fixed Compensation
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $784,077 | $861,443 | $896,304 |
| Bonus | — | $150,000 | — |
| Stock Awards (grant-date fair value) | $2,080,526 | $1,272,594 | $1,140,318 |
| Option Awards (grant-date fair value) | $299,997 | $382,804 | $394,300 |
| All Other Compensation | $35,616 | $41,706 | $45,348 |
| Total | $4,160,216 | $3,445,438 | $3,586,197 |
Selected perquisites: 401(k) match $20,700, car allowance $7,200, club dues $13,320, other $4,128 in 2024 .
Performance Compensation
STIP Design and Outcomes (2024)
| Metric | Weight | Threshold | Target | Exceptional | Actual |
|---|---|---|---|---|---|
| EPS ($/share) | 40% | $3.20 | $4.18 | $4.78 | $4.94 (adjusted) |
| ROATCE (%) | 20% | 10.20% | 12.20% | 13.60% | 13.89% (adjusted) |
| Nonperforming assets/total assets (%) | 15% | 1.00% | 0.50% | 0.25% | 0.30% |
| Loan growth ($000) | 10% | $327,000 | $544,000 | $762,000 | $336,237 |
| Leadership rating | 15% | 2 | 3 | 4 | 3.75 (Lally) |
| 2024 STIP Payout ($) | Threshold | Target | Exceptional | Actual |
|---|---|---|---|---|
| James B. Lally | $405,563 | $811,125 | $1,216,688 | $1,109,927 |
Notes: 2024 STIP paid at 137–139% of target across NEOs; earnings metrics were adjusted to exclude core conversion and FDIC special assessment impacts .
LTIP Structure and Results
| LTIP Cycle | Goals | Weight | Threshold | Target | Exceptional | Actual |
|---|---|---|---|---|---|---|
| 2022–2024 | TSR (percentile) | 30% | 25th | 60th | 80th | 72nd (162% of target) |
| 2022–2024 | Cumulative EPS ($) | 30% | $13.07 | $14.21 | $15.35 | $15.37 (200% of target) |
| 2022–2024 | Continued service | 40% | N/A | N/A | N/A | N/A |
Aggregate performance payout: 181% of target; Lally vested 26,007 performance shares, 3,592 time‑based RSUs, and 20,325 options for the cycle . Open LTIP cycles (2023–2025, 2024–2026) maintain 30% TSR, 30% EPS, 40% continued service mix; each performance goal pays 25%–200% of target; settlements in vested stock/options upon certification .
Option exercises and stock vested (2024): Lally had 37,582 shares vest, value realized $2,068,439; no option exercises .
Equity Ownership & Alignment
| Ownership Item | Value |
|---|---|
| Beneficial ownership (common shares) | 172,267; less than 1% |
| Savings Plan shares included | 18,535 |
| Currently exercisable options (within 60 days) | 37,962 |
| Unexercisable options outstanding | 71,424 |
| RSUs not vested (time‑based) | 25,997; MV $1,466,231 |
| Performance units unearned | 33,870; MV $1,910,268 |
| Option strikes and expirations | 17,637 @ $43.81 exp. 2/25/2031; 20,325 @ $48.34 exp. 2/24/2032; 20,438 @ $54.46 exp. 2/28/2033; 30,661 @ $39.50 exp. 2/28/2034 |
Stock ownership guidelines: CEO must hold 5× base salary; non‑employee directors 5× cash retainer; pledging generally prohibited and hedging prohibited under insider trading policy (unless preapproved) . Inputs suggest Lally’s beneficial holdings multiplied by the 12/31/2024 price of $56.40 significantly exceed 5× his $896,304 base salary, indicating guideline compliance and strong alignment .
Vesting Schedule (Time‑based RSUs)
| Vest Date | Shares |
|---|---|
| Jan 31, 2026 | 4,176 |
| Feb 24, 2026 | 7,982 |
| Feb 28, 2027 | 5,857 |
| Feb 24, 2028 | 7,982 |
Insider selling pressure considerations: Multiple large RSU vestings cluster in 2026–2028, and open LTIP cycles (2023–2025, 2024–2026) may settle into fully vested shares/options at certification, which can create liquidity events; policy prohibits hedging/pledging, and shares may be withheld to cover taxes on vest .
Employment Terms
| Provision | Terms |
|---|---|
| Agreement dates | Original 5/2/2017; amendment effective 8/4/2023 |
| Restrictive covenants | Non‑compete and non‑solicit during employment; post‑termination: 24 months after involuntary w/o Cause or for Good Reason; 12 months otherwise; expanded geography in 2023 amendment |
| Termination w/o Cause or for Good Reason (non‑CIC) | 2 years of base salary, plus 2× greater of average last two STIP bonuses or current‑year STIP target; paid over 2 years; 2 years medical benefits |
| Change‑in‑Control termination (double trigger) | Lump sum: 36 months base salary + 3× greater of average last two STIP bonuses or current‑year STIP target; prorated STIP for year of termination; 18 months medical benefits + cash equal to additional 18 months; performance‑based equity vests at ≥ target or actual |
| 280G treatment | “Best net” cutback to maximize after‑tax benefit |
| CIC definition | ≥50% voting power change; bank‑level control; certain business combinations; sale of substantially all assets; board composition change |
Potential payouts if event occurred 12/31/2024 (illustrative, using $56.40/share): Total compensation upon change‑in‑control termination $11,241,521 (severance $6,568,042 + equity acceleration $4,673,479); termination other than for cause $3,837,945; disability/death equity acceleration $4,673,479 .
Clawback: Policy allows recovery of incentive compensation upon financial restatement; applies at least to SEC‑defined executive officers .
Deferred compensation: Lally contributed $55,000; aggregate balance $1,160,938; 2024 plan earnings $167,909 .
Board Governance
- Board structure: EFSC maintains an independent Chair; Michael A. DeCola has served as Chair since May 2023; Lally is not independent under Nasdaq rules .
- Committees: Audit, Nominating & Governance, Human Capital & Compensation, Risk, Executive; committees are comprised of independent directors; Lally not listed as a member of these committees .
- Board activity: Six meetings in 2024; all incumbents met ≥75% attendance; executive sessions held and presided over by the Chair .
- EFSC Board service history: Director since 2017; also elected to EB&T board; mandatory retirement policy waivers possible but capped at age 75 .
Director compensation applies to non‑employee directors only (e.g., $110k annual retainer; committee fees; stock retainer ~ $60k); not applicable to Lally as an employee director .
Performance & Track Record
| Measure | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($000s) | $203,043 | $194,059 | $185,266 |
| Diluted EPS ($) | $5.31 | $5.07 | $4.83 |
| Value of $100 Investment (TSR) | $108 | $100 | $130 |
2024 achievements included record operating revenue, adjusted ROATCE 13.71%, PPNR ROAA 1.7%, 3% loan growth, 8% deposit growth, NPA/Assets 0.30%, and the 10th consecutive dividend increase; STIP paid below exceptional chiefly due to lower‑than‑planned loan growth .
Compensation Peer Group and Shareholder Feedback
- Peer group includes regional banks such as First Merchants, Trustmark, Simmons First, ServisFirst, Veritex, Atlantic Union; targets generally aim for ~50th percentile at target, with LTIP design to support 50th–75th percentile total direct compensation for retention .
- Say‑on‑Pay: 96% approval in 2024; Committee engages WTW as independent consultant; active investor outreach; strong pay‑for‑performance alignment with 74% CEO pay at risk .
Risk Indicators & Red Flags
- No hedging/pledging permitted without preapproval; insider trading policy in place .
- No 280G/4999 gross‑ups; repricing/backdating prohibited; single‑trigger vesting not allowed; clawback policy adopted .
- Related party loans are on market terms; overseen under policy and Audit Committee charter .
Investment Implications
- Alignment: High at‑risk pay (74%), rigorous multi‑metric STIP, and performance‑weighted LTIP with external TSR benchmarking support shareholder alignment; strong ownership relative to guidelines underpins skin‑in‑the‑game .
- Retention risk: Robust double‑trigger CIC economics (3× bonus, 36 months base, equity at ≥target) and substantial unvested equity reduce near‑term departure risk; however, sizable vesting clusters in 2026–2028 could create periodic liquidity events and potential selling pressure .
- Governance: Independent Chair at EFSC mitigates CEO‑Chair dual‑role concerns; committee independence and executive sessions strengthen oversight; bank‑level Chair role concentrates operating leadership but is balanced by holding company governance .
- Trading signals: Upcoming RSU vest dates and LTIP certifications are identifiable supply points; 2022–2024 LTIP payout confirms execution against EPS/TSR; watch open cycles (2023–2025, 2024–2026) for performance trajectory and potential award magnitude .