Charlotte M. Rasche
PROSPERITY BANCSHARESAbout Charlotte M. Rasche
Charlotte M. Rasche is Executive Vice President and General Counsel of Prosperity Bancshares (PB) and Prosperity Bank. She joined on March 1, 2012 and became General Counsel on April 21, 2012, bringing extensive banking regulatory, corporate, M&A, Exchange Act reporting, and governance expertise from her prior partnership at Bracewell LLP (1997–2012) . She holds a BBA (Stephen F. Austin State University), an MS (Oklahoma State University), and a JD (University of Texas at Austin), is licensed to practice law in Texas, and was a former board member of the Texas Bankers Association; her age is 60 per the latest proxy . Company performance context: PB’s 2024 net income was $479,386k and the value of a $100 investment in PB (TSR) stood at $122.89 for the 2019–2024 measurement window, reflecting stable profitability with low NPAs/AIEA of 0.23% .
Company Performance Context (FY 2020–FY 2024)
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Total Shareholder Return ($100 base) | 99.59 | 106.69 | 110.55 | 106.79 | 122.89 |
| Net Income ($USD thousands) | $528,904 | $519,297 | $524,516 | $419,316 | $479,386 |
| NPAs to Avg Interest‑Earning Assets | 0.21% | 0.09% | 0.08% | 0.21% | 0.23% |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bracewell LLP | Partner (Attorney) | 1997–2012 | Led commercial banking regulatory and corporate matters, M&A, Exchange Act reporting, and governance for banking clients |
| Texas Tech University (Dept. of Housing) | Coordinator of Residence Life | 1989–1994 | Operations and administration leadership experience prior to legal career |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Texas Bankers Association | Former Board Member | Not disclosed | Industry advocacy and policy exposure; network across Texas banking sector |
Fixed Compensation
- Individualized base salary, target bonus %, and actual bonus for Ms. Rasche are not disclosed in the proxy because she was not a Named Executive Officer (NEO) for 2024 .
- PB reviews NEO base salaries annually (generally effective May 1), with peer context, role scope, and performance; this process informs executive compensation structures more broadly .
Performance Compensation
Annual Incentive Bonus Eligibility Ranges (Program Design)
| Role | Maximum Annual Bonus as % of Base Salary |
|---|---|
| Chief Executive Officer | Up to 200% |
| Chairman, Vice Chairman, President & COO | Up to 175% |
| Executive Vice Presidents (incl. executive committee) | Up to 100% |
- Mix: approximately 75% cash and 25% restricted stock for 2024, 2023, and 2022 annual incentives; cash is paid mostly in December with a small portion by March 15 after audit confirmation .
- PB does not grant stock options; equity compensation is restricted stock (RS) awards (predominantly 3‑year cliff vesting in long‑term program) .
Annual Incentive Program Metrics (2024)
| Metric | Target | Calculation Factor |
|---|---|---|
| Total return | 8.0% | 2% for each 1% above target |
| Increase in EPS | 8.0% | 2% for each 1% above target |
| Increase in deposits | 5.0% | 1% for each 1% above target |
| Increase in assets | 5.0% | 1% for each 1% above target |
| Increase in loans | 5.0% | 1% for each 1% above target |
| ROAE | 8.0% | 2% for each 1% above target |
| Efficiency ratio | 55.0% | 2% for each 1% below target |
| Increase in dividends | 7.0% | 2% for each 1% above target |
| Asset quality (net charge‑offs/avg loans) | 0.5% | 1% for each 0.01% below target |
- Payout outcome: annual incentive earned by eligible NEOs was ~44% of aggregate possible for 2024; M&A‑related one‑time expenses, FDIC special assessment ($3.6M), and certain gains were excluded for certain targets per committee approval .
- Long‑term equity program: discretionary restricted stock awards for executives with predominant 3‑year cliff vesting; awards not granted on a set schedule .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 68,422 shares |
| Shares in 401(k) | 8,415 shares held by Company’s 401(k) Plan as custodian for Ms. Rasche |
| Ownership as % of shares outstanding | ~0.0718% (68,422 ÷ 95,262,717) |
| Pledged shares | No pledging disclosed for Ms. Rasche; pledge disclosure appears for another director (not Rasche) |
| Stock options | Company states it does not grant stock options; equity is restricted stock |
| Ownership guidelines | CEO: ≥4x base salary; other executive officers: ≥2x base salary; compliance expected within 5 years of becoming subject to guidelines |
| Compliance status | Individual compliance for Ms. Rasche not stated |
Employment Terms
- Employment agreements and change‑in‑control severance terms disclosed for the CEO, Chairman, and Vice Chairman; no such employment agreement is disclosed for Ms. Rasche in the proxy .
- 2020 Stock Incentive Plan termination terms: on termination for reasons other than death or disability, unvested restricted shares are forfeited; on death/disability, forfeiture restrictions lapse .
- Change‑in‑control treatment: awards under 2020 plan are not automatically vested; the Compensation Committee may accelerate vesting, provide cash payment, or allow assumption/substitution by acquirer, subject to award terms .
Compensation Structure Analysis
- Shift away from options to restricted stock (RS) reduces leverage risk and aligns value with TSR; grants typically have 3‑year cliff vesting, supporting retention .
- Annual incentive is formulaic and diversified across nine financial indicators, reducing single‑metric gaming risk; 2024 payout at ~44% of potential suggests a disciplined pay‑for‑performance framework .
- Say‑on‑pay sensitivity: shareholder approval fell to 58% in 2024, driven by ISS concerns over a single‑trigger CIC in CEO’s agreement; PB amended to a double‑trigger CIC later in 2024/2025 .
Governance and Committee Context
- Compensation Committee: Ned S. Holmes (Chair), Ileana Blanco, Harrison Stafford II; oversight of executive compensation and equity awards .
- Peer group used for benchmarking includes 30+ regional banks with $25–$75B assets (e.g., Bank OZK, SouthState, Pinnacle, Webster, Synovus, Frost, Western Alliance, Wintrust) .
Performance Compensation (Detailed Table for 2024 Program)
| Component | Metric/Design | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual incentive (cash + RS) | Nine indicators across TSR, EPS growth, deposits, assets, loans, ROAE, efficiency, dividend increase, asset quality | Specific % weights set annually (not disclosed here) | See metric table above | ~44% of aggregate possible for eligible NEOs | RS portion generally granted in December; RS awards under this program have graded vesting in subsequent years per tables (NEOs disclosed) |
| Long‑term equity awards | Discretionary restricted stock | N/A | N/A | Granted episodically (e.g., 2024 total of 115,000 shares across NEOs; plus 10,863 RS via annual incentive) | Predominantly 3‑year cliff vest |
Insider Transactions and Selling Pressure
- Attempted to fetch Form 4 transactions for “Rasche” (PB) for 2022–2025 using the insider‑trades skill; the request returned Unauthorized (HTTP 401). As a result, we cannot analyze recent tax‑withholding sales or award vest‑related dispositions at this time. If desired, we can rerun with valid access to assess near‑term selling pressure and post‑transaction holdings.
Investment Implications
- Alignment: Executive ownership guidelines (≥2x salary for executive officers) and the use of restricted stock align incentives to TSR and long‑term value; Ms. Rasche’s beneficial ownership of 68,422 shares, plus 401(k) holdings, supports alignment, though individual guideline compliance is not disclosed .
- Retention: Forfeiture of unvested RS upon termination (except death/disability) and predominant 3‑year cliff vesting are strong retention mechanisms for executive officers, including the General Counsel role .
- Risk signals: No stock options (reduces risk of repricing); no personal pledging disclosed for Ms. Rasche; overall program uses multiple quantitative metrics with exclusions for one‑time items tied to M&A and FDIC assessments, balancing incentivization and fairness .
- Shareholder sentiment: A 58% Say‑on‑Pay in 2024 highlights governance sensitivity; PB addressed ISS’s concern by moving CEO/Chairman CIC terms to double‑trigger, reducing headline risk. Continued attention to transparent rationale and peer benchmarking is warranted .