Kevin J. Hanigan
PROSPERITY BANCSHARESAbout Kevin J. Hanigan
Kevin J. Hanigan (age 68) is President and Chief Operating Officer (COO) of Prosperity Bancshares, Inc. and President of Prosperity Bank, and serves as a Class I director. He joined the Company’s Board on November 1, 2019 via the LegacyTexas merger; he holds a B.S. and an MBA from Arizona State University . Company performance during his tenure includes cumulative TSR of $122.89 for the period beginning 12/31/2019 through 2024 and 2024 net income of $479,386 thousand, with NPAs/average interest‑earning assets at 0.23% in 2024 . The Company’s annual incentive program uses nine quantitative indicators (total return, asset quality, EPS growth, deposit growth, asset growth, loan growth, ROAE, efficiency ratio, dividend increases), with adjustments in 2024 to exclude one‑time merger costs and the FDIC special assessment in certain targets .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| LegacyTexas & LegacyTexas Bank | Director and CEO | 2012–2019 | Led post‑merger integration and growth following Highlands Bank acquisition into LegacyTexas (Apr 2012) . |
| Highlands Bank | Chairman & CEO | 2010–2012 | Executive leadership until Highlands Bank was acquired into LegacyTexas . |
| Guaranty Bank / Guaranty Financial Group, Inc. | Various roles → Chairman & CEO | 1996–2010 | Led lending and retail, ultimately Chairman & CEO; parent filed for bankruptcy in Aug 2009 . |
| Bank of the Southwest (Houston) | Early career banking roles | 1980–1996 | Foundation in Texas banking market . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Goodwill Industries of Dallas | Director | n/d | Community/non‑profit governance . |
| Dallas Citizen’s Council | Director | n/d | Civic leadership network . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,066,577 | 1,105,186 | 1,092,865 |
| Discretionary Cash Bonus ($) | 530,907 | 531,000 | 531,000 |
| All Other Compensation ($) | 128,804 | 158,531 | 170,668 |
| Total Compensation ($) | 4,495,432 | 2,450,971 | 2,636,827 |
• 2024 perquisites detail: 401(k) match $11,500; personal auto $5,824; personal aircraft $78,318; club dues $2,450; life insurance $549; LTD allowance $300; dividends on unvested RS $71,727 .
• Base salary for Mr. Hanigan was originally negotiated in his 2019 LegacyTexas merger employment agreement .
Performance Compensation
Annual Incentive Program (structure and metrics)
- Eligible maximum: up to 175% of base salary for President & COO (CEO up to 200%) .
- Payout mix: approximately 75% cash (non‑equity) and 25% restricted stock; equity and ~90% of the cash are typically paid in December of the performance year .
- 2024 metric set (with specified adjustments): total return, asset quality (net charge‑offs/avg loans), EPS increase, deposit growth, asset growth, loan growth, ROAE, efficiency ratio, dividend increase; one‑time Lone Star merger expenses and FDIC special assessment excluded from certain targets .
Annual Incentive – Payouts
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Annual Incentive Bonus Earned (Total) ($) | 541,944 | 656,255 | 851,069 |
| Non‑Equity (cash) portion (~75%) ($) | 406,468 | 515,647 | 640,733 |
| Restricted Stock portion (~25%) ($) | 135,476 (annual incentive equity component within Stock Awards) | 140,607 | 201,561 |
Note: The 2022 Stock Awards column for Hanigan also includes a separate one‑time 30,000‑share cliff grant (below). The equity figures above reflect the annual incentive equity portion .
Long‑Term Equity Awards and Vesting
| Grant date | Award type | Shares | Grant‑date fair value ($) | Vesting |
|---|---|---|---|---|
| Oct 18, 2022 | Restricted Stock (cliff) | 30,000 | 2,227,200 | Vests Oct 18, 2025 (3‑year cliff) |
| Dec 31, 2024 | Restricted Stock (annual incentive equity) | n/a | 201,561 | Tracked as part of 2024 bonus equity |
| Dec 29, 2023 | Restricted Stock (annual incentive equity) | n/a | 140,607 | Tracked as part of 2023 bonus equity |
Outstanding unvested equity (as of Dec 31, 2024) and schedules:
| Tranche | Shares | Market value ($) | Vesting detail |
|---|---|---|---|
| RS (2019–2021 cycles) | 622 | 46,868 | Vested Feb 15, 2025 |
| RS | 1,384 | 104,284 | 50% vested Feb 15, 2025; 50% vests Feb 15, 2026 |
| RS | 2,675 | 201,561 | 1/3 vests Feb 15, 2025; 1/3 vests Feb 15, 2026; 1/3 vests Feb 15, 2027 |
| RS (cliff) | 30,000 | 2,260,500 | Vests Oct 18, 2025 |
Recently vested stock:
| Year | Shares vested | Value realized ($) |
|---|---|---|
| 2024 | 2,136 | 137,259 |
| 2023 | 2,571 | 194,599 |
| 2022 | 21,950 | 1,582,761 |
• Options: No stock options outstanding or vested for Hanigan in 2022–2024 .
Equity Ownership & Alignment
| Metric | Detail |
|---|---|
| Beneficial ownership | 219,411 shares as of Feb 24, 2025; less than 1% of outstanding shares . |
| Shares outstanding (for % calc) | 95,262,717 shares as of Feb 24, 2025 . |
| Vested vs unvested indicators | 34,681 unvested shares identified across tranches as of 12/31/2024 (see Outstanding Unvested table) . |
| Pledging | No pledging disclosed for Hanigan; separate disclosure notes 131,005 shares pledged by another director (Steelhammer) . |
| Ownership guidelines | CEO: 4x salary; other executive officers: 2x salary; directors: 5x retainer . |
| Anti‑hedging | Hedging transactions prohibited for all directors, officers, employees . |
Implication: A meaningful 30,000‑share cliff vest (Oct 18, 2025) and ongoing February 2026/2027 vesting cycles could create periodic supply/withholding activity and potential insider‑selling pressure around vest dates .
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | Entered at LegacyTexas merger; expired Nov 1, 2022 (three years post‑merger) . |
| Change‑in‑control (CIC) – illustrative 12/31/2024 scenario | No salary/bonus payout listed; equity acceleration value $2,613,213; total CIC benefits $2,613,213 (assumes $75.35 share price and vesting acceleration) . |
| Change‑in‑control (CIC) – illustrative 12/29/2023 scenario | No salary/bonus payout; equity acceleration $2,312,438; total $2,312,438 (assumes $67.73 share price) . |
| CIC equity plan treatment | Under the 2020 Plan, awards are not automatically vested on CIC; Compensation Committee may accelerate vesting, cash out, or have awards assumed/substituted . |
Board Governance
- Board service: Class I Director; President & COO of the Company; President of the Bank; joined the Board on Nov 1, 2019 .
- Committee roles: Not disclosed for Hanigan in the cited sections. Key committees (e.g., Audit) are composed of independent directors per committee reports .
- Dual‑role implications: Hanigan is an executive officer serving on the Board (management director). Independent committees and a majority‑independent Board help mitigate potential independence concerns common with executive directors .
Director/Shareholder Votes and Say‑on‑Pay
| Item | 2025 Annual Meeting outcome |
|---|---|
| Advisory vote on NEO compensation (Say‑on‑Pay) | For: 77,213,667; Against: 3,310,249; Abstain: 479,872; Broker non‑votes: 5,411,435 . |
Performance & Track Record (Company context during Hanigan’s tenure)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($ thousands) | 524,516 | 419,316 | 479,386 |
| Company TSR (value of $100 since 12/31/2019) | 110.55 | 106.79 | 122.89 |
| NPAs to avg interest‑earning assets | 0.08% | 0.21% | 0.23% |
Note: The Company highlights NPA ratio as its selected performance measure in Pay‑Versus‑Performance disclosures; TSR is tracked against peer indices .
Compensation Structure Analysis (alignment and red flags)
- Mix and leverage: For the COO, the formulaic annual incentive max is 175% of salary, with a consistent 75% cash/25% equity split—maintaining at‑risk exposure and near‑term equity delivery .
- Discretionary bonuses: Hanigan received an additional fixed discretionary cash bonus each year ($531k in 2023 and 2024; $530.9k in 2022), which dilutes formulaic pay‑for‑performance purity but has been a long‑standing component at the Company .
- Equity intensity and retention: A large 30,000‑share, three‑year cliff grant in 2022 (vests Oct 2025) is a clear retention lever; year‑end bonus equity tranches add staggered February vesting through 2027 .
- CIC economics: With his merger‑period contract expired, Hanigan’s CIC profile is primarily equity acceleration (no listed cash multiple), which reduces cash‑severance risk and aligns with equity value creation .
- Governance practices: Anti‑hedging policy and ownership guidelines support alignment; no pledging disclosed for Hanigan (a known red flag elsewhere on the Board) .
Investment Implications
- Near‑term vest catalysts and potential flow: The 30,000‑share cliff vest on Oct 18, 2025, plus February 2026/2027 vesting cycles, could create episodic insider selling/tax‑withholding supply; monitor Form 4s into Q4‑2025 and each February cycle .
- Incentive design discipline: A formulaic annual incentive with explicit financial metrics and consistent 75/25 cash‑equity mix is constructive; however, sizable recurring discretionary cash bonuses (>$0.5m annually) blunt pure performance sensitivity and may be scrutinized by shareholders despite 2025 Say‑on‑Pay support .
- Retention/transition risk: Expiration of Hanigan’s legacy employment agreement leaves no listed cash CIC multiplier—retention rests on unvested equity and role/market dynamics, which is acceptable given his seniority and equity overhang .
- Alignment and governance: Ownership guidelines and anti‑hedging improve alignment; absence of pledging for Hanigan avoids a key red flag. Independent composition of oversight committees mitigates typical executive‑director independence concerns .
Form 4 note: Attempted to retrieve Hanigan-specific insider transaction data programmatically (Form 4s) but encountered an authorization error; analysis above relies on Company proxy disclosures for vesting and ownership detail.