Harold Carpenter
PINNACLE FINANCIAL PARTNERSAbout Harold Carpenter
Harold R. Carpenter, Jr., 65, is Executive Vice President, Chief Financial Officer and Corporate Secretary of Pinnacle Financial Partners (PNFP), roles he has held since the company’s formation; previously he served at AmSouth (1999–2000), First American (1994–1999), and KPMG (1982–1994), and is a member of the AICPA . PNFP’s 2024 performance backdrop for pay-for-performance: GAAP fully diluted EPS of $5.96 (adjusted $6.89), adjusted total revenues of $1.797B, ROATCE 11.1%, TBV accretion 9.5%, and net income of $475.1MM; five-year TSR value of $189.15 (indexed to $100 starting 2019), reflecting strong shareholder value alignment across incentive metrics .
2024 key performance indicators
| Metric | Value |
|---|---|
| GAAP FDEPS | $5.96 |
| Adjusted FDEPS (AIP basis) | $6.89 |
| Adjusted Total Revenues | $1.797B |
| ROATCE | 11.1% |
| TBV Accretion | 9.5% |
| Net Income | $475,056,000 |
| 5-yr TSR Index Value (Company) | 189.15 |
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Pinnacle Financial Partners | EVP & CFO; Corporate Secretary | 2000–present | Founding CFO; oversees finance; Corporate Secretary of PNFP |
| AmSouth Bancorporation | Finance executive | 1999–2000 | Large-bank finance experience |
| First American Corporation | Finance roles | 1994–1999 | Regional bank finance and control |
| KPMG LLP | Auditor | 1982–1994 | Public company audit/controls foundation |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| American Institute of CPAs | Member | — | Professional credential and standards |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of salary) | Actual AIP Payout (% of salary) | Actual AIP Payout ($) |
|---|---|---|---|---|
| 2024 | 625,000 | 80% | 79% (98% of target) | 490,031 |
| 2023 | 600,000 | 80% | 50% (62% of target) | 297,600 |
| 2022 | 578,000 | 80% | 99% (123% of target) | 569,976 |
Notes:
- 2024 AIP design: payout formula 75% on FDEPS ($7.00 target; $7.22 max) and 25% on total revenues ($1.740–$1.820B target band; >$1.820B max), subject to asset-quality hurdle; result was 98% of target .
- 2025 AIP: CFO target opportunity increased to 90% (from 80%) with the same 75% FDEPS / 25% revenue construct; design shifts more performance pay to cash while reducing equity target by a corresponding amount .
Perquisites and benefits (2024): 401(k) match $13,800; LTD premium $616; life insurance premium $810; no personal aircraft usage recorded (policy allows up to $15,000) .
Performance Compensation
Annual incentive plan (AIP) – 2024 framework and results
| Component | Weight | Target | Actual | Payout impact |
|---|---|---|---|---|
| Adjusted FDEPS | 75% | $7.00 target; $7.22 max | $6.89 adjusted | 68.5% of the 75% tranche |
| Total Revenues (adjusted) | 25% | $1.740–$1.820B target; >$1.820B max | $1.797B adjusted | 29.5% of the 25% tranche |
| Asset-quality gate | — | Classified assets ratio <35% | 3.8% | Gate achieved |
| Total AIP payout | 100% | — | — | 98% of target |
Long-term incentives (LTI) – 2024 grants and structure
| Element | Detail |
|---|---|
| Grant date | Jan 18, 2024 |
| Mix | 70% performance-based RSUs (PSUs); 30% time-based RSUs (RSUs) |
| Metrics & weighting | PSUs: equally-weighted Relative ROATCE (3-year average) and Relative TBV Accretion (3-year cumulative); TSR modifier ±20% vs KBW Regional Bank Index |
| Soundness gate | Average NPA ratio threshold for each year in the performance period must be met |
| Vesting/schedules | RSUs vest 33% annually on grant anniversaries through 2027; PSUs cliff-settle after performance certification post 12/31/2026 (subject to gate and TSR modifier) |
2024 LTI grant detail for Carpenter:
- RSUs: 3,577 units; grant date fair value $300,003 .
- PSUs: target 8,347 units; maximum 20,032 units (includes full +20% TSR modifier); grant date fair value $737,207 (target basis) .
- Company estimates as of 12/31/2024 imply 66% of max for 2024 PSU cycle (subject to final peer/TSR), 47% of max for 2023 cycle, and 76% of max for 2022 cycle; Special 2022 PSUs estimated at 65% of max (subject to committee certification) .
Equity Ownership & Alignment
| Item | Carpenter |
|---|---|
| Total beneficial ownership (common) | 75,165 shares; 0.10% of outstanding |
| Unvested RSUs | 6,964 units; market value $796,612 (12/31/2024) |
| Unearned PSUs (max presentation) | 97,180 units; market value $11,116,420 (12/31/2024) |
| Stock options | None outstanding |
| Stock ownership guideline | 200% of base salary for CFO; Carpenter exceeds minimum |
| Hedging policy | Hedging and short sales prohibited |
| Pledging | Pledging disfavored; Carpenter has no disclosed pledges (only Callicutt has pledged shares) |
| Section 16 compliance | All insiders filed timely in 2024 |
Vesting and potential supply considerations:
- RSUs vesting: one-third annually on 1/18/2025, 1/18/2026, 1/18/2027, subject to continued service .
- PSUs settlement: after 12/31/2026 upon certification (ROATCE/TBV vs peers and TSR modifier; subject to soundness gate) .
- No CFO share pledging and anti-hedging policy mitigate forced-selling risk; actual selling depends on Form 4 activity (not disclosed in proxy) .
Employment Terms
| Provision | Key terms (Carpenter) |
|---|---|
| Employment agreement | Auto-renews annually unless notice given; includes severance and CIC provisions |
| Severance (no CIC) | Terminated without cause: 3x base salary; voluntary “for cause” resignation: up to 12 months of salary (definitions per agreement) |
| Change-in-control (CIC) | Double-trigger; lump sum = 3x (base salary + target bonus) + 3 years health benefits; excise tax gross-up applies |
| CIC equity treatment | Unvested RSUs vest; PSUs vest at greater of target or pro-rata performance through last completed quarter; 2022 “Special PSUs” forfeited on CIC |
| Illustrative payouts (as of 12/31/2024) | Termination without cause: $9,796,102 total (incl. equity) ; Double-trigger CIC: $16,427,643 total (incl. equity and $4,535,011 excise gross-up estimate) |
| Clawback | SOX 304 plus 2023 restated company policy to recoup incentive-based comp upon material restatement (3-year lookback) |
Performance & Track Record
- 2024 execution: Adjusted total revenues +9.8% YoY (after specified adjustments), deposits +11.2%, loans +8.6% ($2.8B) with solid credit: NPA 0.42%, classified assets 3.79%, net charge-offs 0.23% .
- Incentive outcome: 2024 AIP paid at 98% of target based on under-target adjusted FDEPS and near-target adjusted revenues; asset-quality gate met .
- Long-term alignment: 2024 ROATCE 11.1% and TBV accretion 9.5% directly align with PSU metrics; five-year TSR index 189.15 supports multi-year value creation .
Compensation Structure Analysis
- Mix and leverage: CFO’s target pay heavily at-risk via AIP+LTI (48–57% equity for NEOs; 70% of LTI in PSUs) with robust multi-year peer-relative metrics and TSR modifier, strengthening shareholder alignment while retaining a time-based retention element .
- Goal rigor: AIP targets set to approximate top-quartile peer performance at target; maximums require stronger outperformance; asset-quality thresholds apply across AIP/LTI .
- Shareholder feedback: 2024 Say-on-Pay passed with 94.2% support (up from 77.9% in 2023), indicating improved investor alignment with program design .
- Peer group benchmarking: Broad regional bank peer set used for pay and performance calibration (e.g., Comerica, Synovus, Zions, Cadence, SouthState, etc.) .
Say-On-Pay & Shareholder Feedback
- 2024 Say-on-Pay results: 94.2% For; Compensation Committee cited program alignment and broad-based participation as rationale .
- 2025 program tweaks: Increased AIP target percentages (including CFO to 90%) offset by lower LTI target values, maintaining overall target pay while adding near-term performance sensitivity .
Equity Ownership & Alignment (detail table)
| Category | Shares/Units | Market Value Basis |
|---|---|---|
| Beneficially owned common | 75,165 | — (0.10% of outstanding) |
| RSUs unvested | 6,964 | $796,612 at $114.39 (12/31/2024) |
| PSUs unearned (max presentation) | 97,180 | $11,116,420 at $114.39 (12/31/2024) |
Employment Terms (detail scenarios)
| Scenario (as of 12/31/2024) | Cash components | Equity treatment | Estimated total |
|---|---|---|---|
| Termination without cause (no CIC) | $625,000 salary multiple; health $2,400; tax assistance $2,400 | RSUs/PSUs as per retirement/for-cause definitions; shown as $9,168,702 equity value | $9,796,102 |
| Double-trigger CIC (12 months) | 3x (base + target bonus) and benefits; excise tax gross-up estimated $4,535,011 | RSUs vest; PSUs at ≥ target or pro-rata performance; Special PSUs forfeited | $16,427,643 |
Investment Implications
- Alignment and retention: Carpenter exceeds ownership guidelines (200% of salary) with no pledges and anti-hedging in place, reducing misalignment and forced-selling risk; LTI is predominantly performance-based with peer-relative metrics and TSR modifier, tightly linking value creation and pay .
- Near-term selling pressure: RSUs vest annually through 2027; PSUs from 2022–2024 cycles may settle 2025–2027 subject to gates and certification; absence of pledged shares and hedging limits reduces structural selling pressure; actual sales depend on Form 4s (not in proxy) .
- Governance risk flags: The CFO’s CIC arrangement includes a 280G excise tax gross-up—a shareholder-unfriendly feature; however, CIC is double-trigger and equity remains performance-gated pre-change .
- Performance credibility: 2024 results met asset-quality hurdles and delivered solid TBV accretion and ROATCE, supporting incentive payouts; 2025 design increases AIP leverage, heightening near-term earnings sensitivity while keeping multi-year relative value creation metrics in LTI .