Kevin Hester
HOME BANCSHARESAbout Kevin Hester
Kevin D. Hester, 61, is President and Chief Lending Officer of Home BancShares, Inc. (HOMB) and Centennial Bank, appointed May 13, 2024; he has 35+ years of banking experience, joining Centennial Bank (formerly First State Bank) in 1998 and becoming HOMB’s Chief Lending Officer in 2010. He holds a B.S. in accounting from the University of Central Arkansas and is an honor graduate of the National Commercial Lending School; he previously held lending leadership roles at First Commercial Corporation (1985–1998) . Company performance during 2024 included record revenue of $1.02B, net income of $402.2M, EPS $2.01, ROA (as adjusted) 1.77%, and five‑year cumulative TSR of 166.26 vs peer 143.68, contextualizing compensation outcomes tied to these metrics .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Home BancShares & Centennial Bank | President (HOMB & Centennial), Chief Lending Officer | 2024–present; CLO since 2010 | Promotion to President formalized succession depth; continues to lead credit and lending strategy across markets |
| Centennial Bank (formerly First State Bank) | EVP of Lending | 1998–2010 | Built lending platform post-formation; contributed to expansion into AR/FL/TX/AL/NYC |
| First Commercial Corporation (Kilgore, TX affiliate) | EVP of Lending and other positions | 1985–1998 | Led commercial lending; foundational experience for credit discipline and portfolio growth |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| National Association of Government Guaranteed Lenders (NAGGL) | Former Board Member; active participant | Not disclosed | External policy/industry engagement; supports SBA lending expertise |
Fixed Compensation
- Base salary progression reflects increased responsibilities post-promotion:
| Metric | 2023 | 2024 (initial) | 2024 (post‑promotion, eff. 5/13/24) | 2025 |
|---|---|---|---|---|
| Base Salary ($) | 430,756 | 439,371 | 539,371 | 575,000 |
- Perquisites provided to executive management (company‑wide): 401(k) contributions, country club dues, car allowance/use of company car; no Hester‑specific breakdown disclosed .
Performance Compensation
- Executive Incentive Plan (EIP) structure for Other NEOs (including Hester): target up to 50% of base salary plus an additional 10% deferred three years if all criteria met; 2024 payout equaled 60% of base salary (fully achieved) .
| Component | Weighting (Other NEOs) | Target | Actual 2024 |
|---|---|---|---|
| ROAA (as adjusted) | 10% | ≥ 1.20% | 1.77% |
| ROTCE (as adjusted) | 10% | ≥ 10% | 16.64% |
| Efficiency Ratio (as adjusted) | 10% | Under 47% | 42.65% |
| Net Charge-Off Ratio | 10% | ≤ 1% | 0.10% |
| Individual Performance | 10% | Committee discretion | Achieved (included in payout) |
| Peer ROAA Percentile | 12.5% | ≥ 66 2/3rd percentile | 93.67% (9M peer set) |
| Peer ROTCE Percentile | 12.5% | ≥ 66 2/3rd percentile | 87.33% (9M peer set) |
| Peer Efficiency Ratio Percentile | 12.5% | ≥ 66 2/3rd percentile | 92.67% (9M peer set) |
| Peer Net Interest Margin Percentile | 12.5% | ≥ 66 2/3rd percentile | 94.33% (9M peer set) |
- 2024 EIP outcome for Hester: bonus earned $323,622 (60% of year‑end base salary); 10% deferred portion paid January 2027 subject to continued employment; clawback applies for restatements/peer re‑checks .
Equity Awards (2024)
| Type | Grant Date | Shares | Vesting | Grant‑date Fair Value ($) |
|---|---|---|---|---|
| Restricted Stock (Promotional) | 5/13/2024 | 100,000 | Vests in four equal annual installments beginning on the 4th anniversary of grant date | 2,470,000 |
Multi‑Year Compensation (Reported)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 420,653 | 431,154 | 501,344 |
| Stock Awards ($) | — | — | 2,470,000 |
| Non‑Equity Incentives ($) | 252,150 | 258,454 | 323,622 |
| All Other Compensation ($) | 27,341 | 25,489 | 78,145 |
| Total ($) | 700,144 | 715,097 | 3,373,111 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 316,343 shares; <1% of outstanding |
| Ownership components | Includes 120,000 restricted shares; 7,128 IRA; 6,303 401(k) |
| Shares pledged as collateral | 98,246 shares (red flag) |
| Stock options outstanding | 20,000 exercisable @ $21.25 exp 4/20/2026; 36,000 exercisable & 24,000 unexercisable @ $23.32 exp 7/19/2028; unexercised tranche vests in two equal annual installments beginning 3/31/2025 |
| Value of unvested options (at $28.30 FMV) | $119,520 used in CIC scenario valuation |
| Hedging/derivative policy | Company policy discourages trading in puts/calls for insiders; promotes alignment |
Employment Terms
- Change‑in‑Control (CIC) Agreement: Lump sum equals 2.99x average taxable compensation (prior 5 years) with Section 280G cutback; additional cap reduces benefits above $6,000,000 for Hester. Net CIC cash payment modeled at $1,431,018 after cutbacks; restricted shares value $3,396,000 and unvested options $119,520 included in CIC scenario totals .
- No separate employment agreement disclosed for Hester; compensation adjustments documented via 8‑K and proxy .
- EIP clawback: Applies for restatements or if peer criteria used at 9M are not met after year‑end data; deferred bonus vests with continued employment .
Compensation Structure Analysis
- Shift toward equity: 2024 promotional grant of 100,000 RS leverages long-dated vesting (4‑7 years), increasing retention and at‑risk pay alignment .
- Cash vs equity mix: 2024 mix weighted to equity due to promotional award; recurring EIP remains performance‑weighted across ROAA/ROTCE/efficiency/NCO and peer percentiles .
- Peer benchmarking: Performance vs banks with $10–50B assets underpins both cash bonus outcomes and CEO equity framework; EIP used informal peer data when year‑end peer results unavailable .
Risk Indicators & Red Flags
- Pledging: 98,246 shares pledged; adverse market moves could create forced‑sale risk or margin pressure (monitor Form 4 filings) .
- CIC optics: Cutback mechanics reduce excess parachute risks; net CIC figures remain material and could influence retention dynamics in sale scenarios .
- Clawbacks: EIP clawback provisions mitigate misalignment risk tied to restatements/peer data timing .
Investment Implications
- Alignment: Significant at‑risk pay via long‑vesting RS and performance‑based EIP tied to ROAA/ROTCE/efficiency/NCO and peer percentiles supports shareholder value orientation; 2024 metrics exceeded targets, yielding full payout .
- Retention: Four‑year cliff start on RS vesting plus deferred EIP tranche (10%) create multi‑year retention hooks; promotion‑linked salary progression affirms succession depth .
- Monitoring signals: Track pledged-share dynamics, option vesting windows (2025–2026), and any insider sales around vest dates for potential selling pressure; Hester’s CIC package is sizeable but subject to cutbacks, lowering deal‑related windfall risk .