Edward Z. Safady
PROSPERITY BANCSHARESAbout Edward Z. Safady
Edward Z. Safady is Vice Chairman of Prosperity Bancshares, Inc. and Prosperity Bank. He joined the Bank in 2004 via the acquisition of Liberty Bank, SSB, where he was Chairman and CEO; he has served as Chairman of the Central Texas Area and Bank director since August 2004, was named President of the Company and Vice Chairman of the Bank in May 2015, and Vice Chairman of the Company in November 2019; he was appointed an advisory director of the Company in June 2019. He holds a BBA in Finance from Texas Tech University (1978) and began his career as a national bank examiner at the OCC (1978–1984) . Company-level performance measures tied to executive pay include total shareholder return (TSR), EPS, ROAE, efficiency ratio, asset quality, and growth in assets, loans, deposits and dividends; in 2024, the Company’s $100 TSR proxy tracked to $122.89 and net income was $479,386k .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Office of the Comptroller of the Currency | National Bank Examiner | 1978–1984 | Regulatory supervision experience |
| Liberty Bank, SSB | Chairman & CEO | Pre-2004–2004 | Led institution acquired by Prosperity Bank; integration to PB footprint |
| Prosperity Bank | Chairman, Central Texas Area; Director | 2004–present | Regional leadership and board oversight |
| Prosperity Bancshares, Inc. | President (Company); Vice Chairman (Bank) | May 2015–Nov 2019 | Elevated corporate leadership responsibilities |
| Prosperity Bancshares, Inc. | Vice Chairman (Company) & Advisory Director | Nov 2019–present | Corporate strategy and governance |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hawaiian Airlines | Director | Prior years (not specified) | Airline governance and oversight |
| U.S. Medical Products, Inc. | Director | Prior years (not specified) | Healthcare operating insights |
| First National Bank of San Diego | Director | Prior years (not specified) | Banking board experience |
Fixed Compensation
Summary Compensation for Edward Z. Safady
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $563,294 | $581,771 | $558,982 |
| Discretionary Bonus ($) | $530,808 | $531,000 | $531,000 |
| Stock Awards (Grant-Date Fair Value) ($) | $69,264 | $71,862 | $1,695,579 |
| Non-Equity Incentive Plan Compensation ($) | $207,901 | $263,801 | $327,741 |
| All Other Compensation ($) | $69,681 | $73,399 | $79,323 |
| Total ($) | $1,440,948 | $1,521,833 | $3,192,625 |
- 2023 perquisites included club dues ($8,639), 401(k) match ($10,843), personal auto use ($3,283), life insurance premium ($3,810), LTD allowance ($300), and dividends on unvested restricted stock ($46,524) .
Performance Compensation
Annual Incentive Program (Plan-Based Awards)
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Target Payout ($) | $335,663 | $435,306 |
| Maximum Payout ($) | $959,037 | $978,217 |
| Program Metrics | TSR, EPS growth, deposits, assets, loans, ROAE, efficiency, dividend increase, asset quality | |
| Metric Targets (2023) | TSR 8%; EPS 8%; Deposits 5%; Assets 5%; Loans 5%; ROAE 8%; Efficiency 55%; Dividends 7%; Asset Quality 0.5% (NPAs/average IEA) | |
| Calculation Factors (2023) | 2% payout per 1% above target for TSR/EPS/ROAE/efficiency (below target); 1% per 1% above target for deposits/assets/loans; 2% per 1% above dividend target; 1% per 0.01% below asset quality target | |
| Actual Payout (Program) | Approximately 35% of aggregate possible (2023) | |
| Equity Portion of Annual Incentive | ~25% paid in restricted stock on last trading day of year (when applicable) |
Long-Term Equity Awards and Vesting Schedules (Restricted Stock; no options outstanding)
| Award | Shares Unvested (12/31/2024) | Market Value ($) | Vesting Schedule |
|---|---|---|---|
| RS (2019–2021 tranches) | 318 | $23,961 | Vested 2/15/2025 |
| RS (2022 tranches) | 708 | $53,348 | Half vested 2/15/2025; half 2/15/2026 |
| RS (2023 tranches) | 1,368 | $103,079 | 1/3 vested 2/15/2025; 1/3 on 2/15/2026; 1/3 on 2/15/2027 |
| RS (1/16/2024 grant) | 25,000 | $1,883,750 | Cliff vests 1/16/2027 |
| Options | 0 | — | No options outstanding as of 12/31/2024 |
Stock Vested in FY 2024
| Metric | Shares Acquired on Vesting | Value Realized ($) |
|---|---|---|
| Edward Z. Safady | 21,092 | $1,343,560 |
Equity Ownership & Alignment
Beneficial Ownership (as of Feb 24, 2025)
| Holder | Shares Beneficially Owned | % Outstanding | Notes |
|---|---|---|---|
| Edward Z. Safady | 179,360 | <1% (asterisk) | Includes 9,517 shares in Company 401(k) and 92,906 shares held by Edward Safady, LTD |
Ownership Policies
- Stock ownership guidelines: CEO 4x base salary; other executive officers 2x base salary; compliance expected within 5 years of becoming subject to the guidelines .
- Anti-hedging policy: directors, officers, employees prohibited from hedging Company stock (e.g., prepaid forwards, swaps, collars, exchange funds) .
- Pledging: Proxy footnotes disclose pledged shares for another director; no pledging is disclosed for Mr. Safady .
Attempted to retrieve recent Form 4 (insider transactions) for “Safady” via the insider-trades skill; the request returned Unauthorized (401). As a result, vesting and ownership analysis here relies on the latest Proxy data rather than real-time Form 4s.
Employment Terms
Key Contract Provisions (Edward Z. Safady)
- Agreement Structure: New employment and change-in-control agreement dated March 10, 2021; initial 3-year term with automatic 1-year renewals unless 60 days’ prior notice of non-renewal .
- Non-Compete / Non-Solicit: Survive to the later of agreement term-end or 1 year post-termination (applies across termination scenarios described below) .
- Termination Without Cause / Good Reason (not in connection with CIC): Lump sum equals (1) accrued salary, vacation and reimbursable expenses; (2) benefits due; (3) greater of base salary through remaining term or 1x current base salary; (4) pro rata average annual bonus for year of termination; (5) restricted stock accelerates to vest in one-third increments for each full year worked since grant date .
- Change in Control (CIC) – Double Trigger: If terminated without Cause or for Good Reason during CIC period, lump sum equals 3x base salary plus 3x average annual bonus (last 2 years); subject to 280G cutback; non-compete/non-solicit continue .
- CIC Equity Treatment: Under the 2020 Stock Incentive Plan, awards are not automatically vested; Compensation Committee may accelerate vesting, pay cash, or arrange assumption/substitution at its discretion .
- Estimated CIC Benefits (as of 12/31/2024): Salary/Bonus $4,426,400; Equity acceleration $2,064,138; Total $6,490,538 (assumes $75.35/share and vesting of unvested restricted stock) .
Compensation Structure Analysis
- Pay Mix Shift: Company does not grant stock options; equity compensation delivered via restricted stock awards on predetermined grant dates, with both annual incentive-linked awards (~25% of annual bonus when applicable) and long-term grants (e.g., 25,000 shares granted 1/16/2024, 3-year cliff) .
- At-Risk Equity Increased: Safady’s stock awards rose materially in 2024 ($1.70M grant-date fair value) due to the 25,000-share long-term grant, increasing equity-at-risk tied to TSR and service-vesting .
- Performance Metrics and Payout Rigor: The plan uses nine balanced indicators with quantitative targets; 2023 payouts were ~35% of maximum, reflecting measured performance outcomes and cap on aggregate incentive .
- Governance Feedback Loop: 2024 Say-on-Pay approval fell to 58% (from 95% in 2023; 94% in 2022), driven by ISS concerns over CEO’s CIC triggers; the Company amended CEO/Chairman contracts to double-trigger structures, and indicates ongoing engagement with shareholders .
Equity Ownership & Alignment (Detailed)
| Component | Detail |
|---|---|
| Total Beneficial Ownership | 179,360 shares; <1% of outstanding |
| Direct vs Indirect | Includes 9,517 shares via Company 401(k) and 92,906 shares via Edward Safady, LTD |
| Vested vs Unvested | Unvested 27,394 shares as of 12/31/2024 across multiple tranches; vesting extends through 2/15/2027 and 1/16/2027 |
| Options | None outstanding |
| Pledging | No pledging disclosed for Safady; other individual has pledged shares |
| Ownership Guidelines | Expected ≥2x base salary for executive officers; anti-hedging policy in place |
Performance Compensation (Metric Table)
| Metric | Target (2023) | Calculation Factor | Payout (2023) | Vesting Mechanism |
|---|---|---|---|---|
| Total Shareholder Return | 8% | 2% per 1% above target | Part of ~35% aggregate payout | ~25% of annual incentive in RS; tranches vest Feb or cliff |
| EPS Increase | 8% | 2% per 1% above target | Part of ~35% aggregate payout | As above |
| Deposits Growth | 5% | 1% per 1% above target | Part of ~35% aggregate payout | As above |
| Assets Growth | 5% | 1% per 1% above target | Part of ~35% aggregate payout | As above |
| Loans Growth | 5% | 1% per 1% above target | Part of ~35% aggregate payout | As above |
| ROAE | 8% | 2% per 1% above target | Part of ~35% aggregate payout | As above |
| Efficiency Ratio | 55% | 2% per 1% below target | Part of ~35% aggregate payout | As above |
| Dividend Increase | 7% | 2% per 1% above target | Part of ~35% aggregate payout | As above |
| Asset Quality (NPAs/Avg IEA) | 0.5% | 1% per 0.01% below target | Part of ~35% aggregate payout | As above |
Employment Terms (Change-in-Control and Termination)
| Scenario | Cash Multiple | Bonus Treatment | Equity Treatment | Restrictive Covenants |
|---|---|---|---|---|
| CIC – Double Trigger (termination during CIC period) | 3x base salary | 3x average annual bonus (prior 2 yrs) | Committee discretion under 2020 Plan; may accelerate | Non-compete/non-solicit through later of term or 1 year post-termination |
| Without Cause / Good Reason (no CIC) | Greater of base salary through term or 1x base salary | Pro rata average annual bonus (unpaid) | Accelerate in one-third per full year worked since grant | Non-compete/non-solicit continue |
| With Cause / Without Good Reason | Accrued salary/benefits only | None | Forfeiture per plan terms | Non-compete/non-solicit continue |
| Death or Disability | Accrued salary/benefits; disability continues covenants | N/A | Lapse of forfeiture for death/disability under award agreement | Disability continues covenants |
| 280G Treatment | Cutback to avoid 4999 excise tax | Applies | Applies | N/A |
Say-On-Pay & Shareholder Feedback
- Say-on-Pay approval: 58% in 2024 vs 95% in 2023 and 94% in 2022; the Company attributes the 2024 decline to ISS’s view of the CEO’s single-trigger CIC provision, which has since been amended to double-trigger (CEO in Oct 2024; Chairman in Jan 2025). Ongoing engagement with top shareholders occurred before and after the meeting .
Expertise & Qualifications
- Education: BBA (Finance), Texas Tech University (1978) .
- Regulatory and Banking Expertise: Former OCC national bank examiner; prior bank CEO; multi-board experience including airline and healthcare .
Work History & Career Trajectory
- Progressive leadership from regulatory examiner to bank CEO and then corporate Vice Chairman at PB; long-tenured regional leadership within Prosperity Bank since 2004 .
Compensation Committee Analysis
- Committee members: Ned S. Holmes (Chair), Ileana Blanco, Harrison Stafford II; reviewed CD&A and recommended inclusion; pay philosophy emphasizes competitive pay, performance alignment, and equity ownership to focus executives on long-term growth .
Investment Implications
- Alignment: Safady’s compensation relies on formulaic metrics (TSR, EPS, ROAE, efficiency, asset quality, growth) with ~25% of annual incentive paid in stock and significant unvested RSUs, supporting shareholder alignment and multi-year retention .
- Retention Risk and Overhang: A material 25,000-share grant cliff-vests in Jan 2027, with ongoing tranche vesting through Feb 2027; upcoming vest events may create episodic selling pressure and concentrate retention incentives into late-2026/early-2027 .
- Governance: Double-trigger CIC terms with 3x salary and 3x average bonus, plus 280G cutback, reduce windfall risk versus single-trigger constructs; non-compete/non-solicit protections and discretionary equity treatment under the 2020 plan add flexibility but place significant value at stake under CIC .
- Risk Indicators: No options, no disclosed pledging, and explicit anti-hedging policy mitigate misalignment signals; 2024 Say-on-Pay scrutiny led to contractual improvements, suggesting responsiveness to investor governance concerns .