Stephen Thompson
Hilltop HoldingsAbout Stephen Thompson
Stephen Thompson (63) is President and CEO of PrimeLending, a Hilltop Holdings subsidiary, since January 2020; he joined PrimeLending in 2011 and previously served as Regional, Divisional, and National Production Leader, with over 30 years of mortgage banking experience . In 2024, Hilltop delivered consolidated net income of $113 million (ROAA 0.78%, ROAE 5.29%), while PrimeLending narrowed its loss before taxes to $34 million from $63 million in 2023; PrimeLending funded volume reached 8,616 (vs. 8,200 target) amid a challenged mortgage backdrop . Hilltop’s 3‑year TSR ranked in the 14th percentile of the KBW Regional Banking Index for the period ending December 31, 2024, a factor used to modify PSU outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PrimeLending | President & CEO | 2020–present | Led PrimeLending through rate-driven mortgage downturn; focused on operational efficiency, talent management, and expense rationalization |
| PrimeLending | President | 2017–2019 | Advanced production leadership and national sales execution |
| PrimeLending | Regional/Divisional/National Production Leader | 2011–2017 | Progressive production leadership across geographies and functions |
External Roles
No external public company directorships or additional roles are disclosed for Stephen Thompson in Hilltop’s proxy .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 800,000 | 800,000 | 800,000 |
| Stock Awards ($, grant-date fair value) | 1,084,465 | 1,029,793 | 714,331 |
| Non-Equity Incentive ($) | 480,000 | 450,556 | 561,705 |
| All Other Compensation ($) | 44,971 | 51,291 | 47,938 |
| Total Compensation ($) | 2,409,436 | 2,331,640 | 2,123,974 |
Notes:
- 2024 “All Other Compensation” includes perquisites: country club $18,882, car allowance $12,000, cellular $1,200; company contributions to defined contribution plan $11,500; group term life insurance $4,356 .
Performance Compensation
Annual Incentive Structure (2024)
- Target opportunity: $800,000 (100% of salary); Threshold $400,000; Maximum $1,480,000 (cap 185% of target) .
- At least 70% based on financial metrics (Hilltop consolidated and/or business unit), 30% strategic/individual goals; for Thompson specifically, the 50% Business Unit Earnings component consisted of 20% business unit net income less minority interest and 30% funded mortgage origination volume .
2024 Annual Incentive Metrics and Results
| Metric | Weighting | Threshold | Target | Maximum | Actual | Achievement (% of Target) |
|---|---|---|---|---|---|---|
| Adjusted Hilltop Net Income ($mm) | Part of ≥70% financial; specific weighting not disclosed | 65 | 108 | 135 | 120 | 111% |
| PrimeLending Net Income ($mm) | 20% of Business Unit Earnings | 24 | 40 | 50 | (31) | — (below threshold) |
| PrimeLending Funded Volume (units) | 30% of Business Unit Earnings | 4,920 | 8,200 | 10,250 | 8,616 | 105% |
Outcome: Thompson’s 2024 annual incentive paid $561,705 (70% of target), reflecting underperformance on business unit net income offset by above‑target funded volume and consolidated results plus strategic/individual scorecard at 90% of target .
Long-Term Incentives (RSUs)
Design:
- PRSUs: 3‑year performance period (e.g., 2024 grants: Jan 1, 2024–Dec 31, 2026) with payout determined by cumulative EPS vs goal (50–150%) multiplied by 3‑year relative TSR modifier vs KBW Regional Banking Index (80–120%); total payout range 40–180% of target; no payout if EPS below threshold .
- TRSUs: Cliff vest on third anniversary of grant; all NEO RSU shares subject to a one-year post‑vesting holding requirement; awards subject to Hilltop’s clawback policy .
Grants:
| Grant Date | Instrument | Target Shares (#) | Grant-Date Value ($000s) | Vesting / Performance |
|---|---|---|---|---|
| Feb 8, 2024 | PRSUs | 11,745 | 360 | Earn over 2024–2026 via EPS×TSR; payout 40–180% |
| Feb 8, 2024 | TRSUs | 11,745 | 360 | Cliff vest Feb 8, 2027; 1‑yr hold post‑vest |
| Feb 5, 2025 | PRSUs | 11,617 | 375 | Earn over 2025–2027 via EPS×TSR; payout 40–180% |
| Feb 5, 2025 | TRSUs | 11,618 | 375 | Cliff vest Feb 5, 2028; 1‑yr hold post‑vest |
Prior PSU Outcome:
- 2022–2024 PRSUs forfeited (EPS actual $5.04 vs $7.50 target; TSR 14th percentile) → 0% payout .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Ownership (Apr 28, 2025) | 81,987 shares; <1% of outstanding (64,155,154 shares outstanding) |
| Unvested RSUs (Dec 31, 2024) – TRSUs | 14,079; 9,175; 10,523; 11,745 (market values shown in proxy) |
| Unearned PRSUs (Dec 31, 2024) – at target | 18,941; 21,141 (market values shown in proxy) |
| Stock Ownership Guidelines | 3× salary for executive officers; as of Apr 28, 2025 all NEOs meet guidelines |
| Hedging/Pledging | Executive officers prohibited from hedging, short sales, and subject to pledging restrictions; unvested RSUs cannot be pledged |
| 10b5‑1 Controls | Pre‑clearance required; plans only in open windows; waiting period; no amendments during term |
Interpretation:
- Upcoming vesting events (TRSUs): Feb 8, 2027 and Feb 5, 2028 cliff vest dates may create event‑driven liquidity considerations; post‑vest 1‑year holding requirement reduces immediate selling pressure .
Employment Terms
| Term | Detail |
|---|---|
| Agreement | Effective Jan 1, 2020; amended Dec 31, 2022; term through Dec 31, 2025 |
| Base Salary (minimum) | $800,000 |
| Incentive Eligibility | Annual cash incentive (AIP) and long‑term equity (RSUs) per Compensation Committee programs |
| Non‑Compete | 12 months post‑termination |
| Non‑Solicit | 18 months post‑termination |
| Severance (without cause) | Lump sum = 1× base salary + prior-year incentive bonus; plus 12 months COBRA |
| Change-of-Control (double trigger) | Lump sum = 2× (base salary + prior-year incentive bonus); 12 months COBRA; unvested RSUs vest; benefits reduced to avoid parachute payments |
| Clawback | Incentive Compensation Clawback Policy (Oct 19, 2023; amended Jan 2025) applies to cash and equity |
Potential Payments (illustrative, assuming events as of Dec 31, 2024):
| Scenario | Cash Severance ($) | RSUs ($) | Welfare Benefits ($) | Total ($) |
|---|---|---|---|---|
| Termination due to Disability | 561,705 | 1,622,242 | 22,121 | 2,206,068 |
| Termination Without Cause | 1,250,556 | 1,622,242 | 22,121 | 2,894,919 |
| Change of Control (Double Trigger) | 2,501,112 | 2,471,170 | 22,121 | 4,994,403 |
Investment Implications
- Pay-for-performance alignment: 2022–2024 PRSUs paid 0%, indicating strict performance conditioning; 2024 annual incentive below target reflects challenged PrimeLending profitability despite strong funded volume .
- Vesting and potential selling pressure: Upcoming TRSU cliffs (2027, 2028) and 1‑year post‑vest holding requirement temper near‑term selling; PSU outcomes will be sensitive to EPS trajectory and TSR vs KBW peers through 2026–2027 .
- Severance/change-of-control economics: Double‑trigger protection with 2× base+bonus and RSU acceleration creates retention but can be an overhang in strategic transactions; COBRA benefits add incremental cost, with 280G cutback limiting gross‑up risk .
- Ownership and alignment: Thompson’s beneficial ownership is <1% but he meets 3× salary ownership guidelines; hedging/pledging prohibitions and 10b5‑1 controls reduce misalignment risk and opportunistic trading .
- Execution risk: PrimeLending’s net income below threshold in 2024 underscores rate and supply headwinds; however, funded volume exceeded target and loss narrowing suggests operational progress under Thompson’s leadership .