Shanon McLachlan
JACK HENRY & ASSOCIATESAbout Shanon McLachlan
Shanon G. McLachlan, age 58, is Senior Vice President and Chief Operating Officer (COO) of Jack Henry (JKHY) since July 1, 2024, responsible for all business lines, operations, and infrastructure; he joined Jack Henry in 2015 and led ProfitStars (Senior Managing Director) and later Credit Union Solutions (President) beginning in 2019 . Company performance metrics informing incentive pay include adjusted operating income at 100.1% of target in FY2025 (driving a 100.2% of target annual bonus payout), a three-year TSR of 3.48% resulting in the 34th percentile and 52.7% payout of TSR PSUs, Organic Revenue Growth CAGR of 6.8% (0% payout) and Operating Margin Expansion of 0.9% (180% payout) for FY2023 PSU cycles measured through June 30, 2025 . Education is not disclosed in company filings .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Jack Henry – ProfitStars | Senior Managing Director | 2015–2019 | Led complementary solutions business; foundational operating leadership experience prior to divisional presidency |
| Jack Henry – Credit Union Solutions (Symitar) | Vice President; President | 2019–2024 | Ran core systems business serving credit unions; direct P&L and execution leadership |
| Jack Henry | Senior Vice President & COO | 2024–present | Executive accountability for all business lines, operations, and infrastructure |
External Roles
No external public-company directorships or committee roles are disclosed in Jack Henry filings for McLachlan .
Fixed Compensation
| Component | FY2025 Amount | Notes |
|---|---|---|
| Base Salary | $450,000 | Salary set at COO appointment; effective July 1, 2024 |
| All Other Compensation (401(k) match) | $20,517 | Company matching contributions under 401(k) plan |
| Pension/SERP | N/A | Jack Henry does not offer pensions/SERP to Named Executives |
| Broad-Based Benefits | Standard | Health, dental, life, ESPP, 401(k) match; broad-based programs |
Performance Compensation
Annual Incentive (FY2025)
| Metric | Weight | Target | Actual | Payout % of Target | Payout ($) |
|---|---|---|---|---|---|
| Adjusted Operating Income vs Budget | 75% | 100% target; threshold 94.7%; max 110% | 100.1% of target | 100.2% | $405,608 |
| Strategic Executive Goals | 25% | HC&C holistic assessment; individual ±25% modifier | 100% achievement; no modifier applied | 100.2% (overall) | Included in above total |
Target annual incentive opportunity is 90% of base salary for McLachlan; FY2025 payouts were 100.2% of target across Named Executives .
Long-Term Incentives – Grants in FY2025 (Grant Date: August 4, 2024)
| Award Type | Grant Date | Threshold | Target | Maximum | Grant-Date Fair Value |
|---|---|---|---|---|---|
| Performance Shares – TSR | 8/4/2024 | 1,058 sh | 2,115 sh | 4,230 sh | $441,316 |
| Performance Shares – Organic Revenue CAGR | 8/4/2024 | 353 sh | 705 sh | 1,410 sh | $115,261 |
| Performance Shares – Adjusted Operating Margin Expansion | 8/4/2024 | 353 sh | 705 sh | 1,410 sh | $115,261 |
| Restricted Stock Units (time-based) | 8/4/2024 | — | 2,350 sh | — | $389,514 |
Performance share design and targets:
- TSR component (~60% of PSU value) vests from 50% at 25th percentile to 200% at ≥80th percentile; target at 50th percentile .
- Organic Revenue CAGR component (~20%) vests 0% below 6.5% (FY2024/FY2025 awards), 200% at ≥8.5% .
- Adjusted Operating Margin Expansion (~20%) vests 0% below 0.3%; 200% at ≥1.0% .
RSUs vest one-third annually on each anniversary of grant date (for FY2025 awards: 8/4/2025, 8/4/2026, 8/4/2027), subject to continued service; unvested awards forfeit upon termination, except retirement and change-in-control provisions below .
Outstanding and Unvested Equity (as of June 30, 2025; share price $180.17)
| Grant | Unvested RSUs (#) | Market Value ($) | Unearned PSUs (#) | Market Value ($) |
|---|---|---|---|---|
| 8/4/2022 | 173 | $31,169 | 1,558 | $280,705 |
| 8/4/2023 | 434 | $78,194 | 1,956 | $352,413 |
| 8/4/2024 | 2,350 | $423,400 | 5,993 | $1,079,759 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 2,084 shares; <1% of outstanding |
| Deferred Equity | 437 performance shares fully vested and deferred; payable in cash or stock per election at termination or specified dates |
| Ownership Guidelines | 3x base salary for COO; 5-year compliance window; count RSUs (not options/PSUs); retain 75% of shares from vesting/exercise until guideline met |
| Hedging/Pledging | Prohibited: hedging, short sales, pledges, margin accounts, and long-duration limit orders (except approved 10b5-1 plans) |
Implications:
- Guideline at 3x salary with required retention supports alignment and may temper near-term selling pressure from vesting events .
- Deferred shares indicate long-term holding orientation .
Employment Terms
| Provision | Non-Change-in-Control | Change-in-Control (CIC) |
|---|---|---|
| Severance Cash | 1.5x base salary, paid over 1.5 years (COO level) | Cash severance modeled at $1,687,500 |
| Prorated Annual Bonus | Prorated current-year bonus at plan payout timing | Included per plan; CIC total reflects equity vesting values separately |
| Welfare Benefits | COBRA-equivalent continuation cost | $27,605 |
| Equity Acceleration | RSUs continue vesting upon retirement; PSUs pro-rata vest upon death/disability/retirement per months served | PSUs convert to time-based at CIC (target or actual TSR, whichever greater for TSR tranche); if not assumed, full vest; if assumed, full vest on qualified termination 90 days before to 2 years after CIC; RSUs vest on qualified termination in same window |
| Restrictive Covenants | 2-year non-compete, 2-year non-solicit, continuous non-disparagement; release required for severance | |
| Clawback Policy | Executive incentive compensation subject to recoupment upon financial restatement per Corporate Governance Guidelines |
Modeled severance values (as of 6/30/2025):
- Without CIC: Cash $1,080,000; Welfare $27,605; Total $1,107,605 .
- With CIC: Cash $1,687,500; Welfare $27,605; Equity Vesting $1,484,421; Total $3,199,525 .
Investment Implications
- Pay-for-performance alignment: Annual bonus is 75% tied to adjusted operating income and 25% to strategic goals; FY2025 payout at 100.2% of target reflects tight linkage to budgeted profitability execution .
- Long-term incentives emphasize TSR (60%), organic revenue growth (20%), and margin expansion (20%); recent three-year outcomes show underperformance on organic growth but strong margin progress, creating mixed PSU realizations and signaling operational focus but top-line growth execution risk .
- Retention/turnover risk: Severance is moderate (1.5x salary) with stringent 2-year non-compete/non-solicit; CIC terms provide robust equity protection/acceleration on qualified termination, which can reduce retention risk through corporate events but may create event-driven overhangs .
- Insider selling pressure: Anti-pledging/hedging policy and ownership guidelines (3x salary, 75% hold requirements) mitigate discretionary sales; upcoming annual RSU vesting dates may trigger tax-related sales but policy constrains net dispositions .
- Alignment and skin-in-the-game: Direct ownership is modest (2,084 shares) but deferred vested shares and significant unvested RSUs/PSUs provide ongoing exposure; compliance window supports progressive accumulation toward guidelines .
- Governance backdrop: Strong say-on-pay support (93% in Nov 2024) and use of an independent consultant (Meridian) suggest disciplined compensation oversight; pay targeting near the 50th percentile of peers reduces inflation risk .