Robert McCabe
PINNACLE FINANCIAL PARTNERSAbout Robert A. McCabe, Jr.
Chairman of the Board and Chairman of Tennessee at Pinnacle Financial Partners (PNFP); age 74; director since the company’s founding in 2000, and an executive officer (not independent) . Career banker with prior executive leadership at First American (vice chairman in 1994; managed all banking and non‑banking operations in 1999) and a founder of PNFP; chairs the company’s asset-liability management committee and leads business development in Tennessee . 2024 firm performance tied to incentive metrics: ROATCE 11.1%, TBV Accretion 9.5%, adjusted FDEPS $6.89, adjusted total revenues $1.797B, and net income $475M; five-year TSR value of $189.15 (vs. peer index $130.90) under SEC “Pay vs Performance” methodology .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Park National Bank (Knoxville) | Officer trainee → SVP | 1976–1984 | Early operating experience across retail banking; foundation for subsequent leadership roles |
| First American National Bank/Corporation | EVP Retail Bank (Nashville), President & COO (Knoxville bank, then East TN region), President Corporate Banking & General Banking, Vice Chairman; later manager of all banking/non‑banking operations | 1985–1999 | Led multiple regional and corporate divisions; enterprise-wide operating oversight pre-merger with AmSouth |
| Pinnacle Financial Partners | Co‑founder; Chairman of Board (Company/Bank); Chairman of Tennessee | 2000–present (Chair of Tennessee since 2017) | Founding leadership; asset-liability oversight; fee-business strategy; Tennessee market growth |
External Roles
| Organization | Role | Years | Notes / Strategic Relevance |
|---|---|---|---|
| National Health Investors (NYSE: NHI) | Director | Current | Healthcare REIT board; capital markets and governance exposure |
| Nashville Electric Service (NES) | Director | Current | Large public utility board; regional infrastructure insights |
| Goldleaf Financial Solutions | Director | 2002–2009 | Fintech services to community banks; exited via sale |
| SSC Services (Knoxville) | Director | Until sale in 2010 | Private company governance |
| Various civic boards (Ensworth School, Cheekwood, Nashville Symphony, Downtown Partnership, Boy Scouts, Chamber) | Chair/Director | Various | Deep civic network; community development engagement |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 (Target Setup) |
|---|---|---|---|
| Base Salary ($) | 1,156,000 | 1,158,000 | 3% increase vs 2024 (amount not itemized) |
| AIP Target (% of Salary) | 110% | 110% | 125% |
| AIP Maximum (% of Salary) | 137.5% (2024 design shown) | 137.5% | 156% |
| Actual AIP Payout ($) | 788,392 | 1,245,324 | N/A |
Multi‑Year Compensation Summary:
| Component ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | 1,113,000 | 1,156,000 | 1,158,000 |
| Non‑Equity Incentive (AIP) | 1,510,019 | 788,392 | 1,245,324 |
| Stock Awards (grant-date fair value) | 7,845,924 | 3,329,228 | 3,350,053 |
| All Other Compensation | 91,697 | 132,075 | 140,503 |
| Total | 10,560,640 | 5,405,695 | 5,893,880 |
Director fees: As an employee, McCabe receives no director compensation .
Performance Compensation
AIP (Annual Cash Incentive) – FY 2024 Design and Results:
| Metric | Weighting | Target | Actual/Adjusted Result | Component Payout |
|---|---|---|---|---|
| FDEPS | 75% | $7.00 target; max at $7.22 | $6.89 adjusted FDEPS | 68.5% of 75% weight |
| Total Revenues | 25% | Growth to $1.740–$1.820B (target to max) | $1.797B adjusted revenues | 29.5% of 25% weight |
| Classified Asset Ratio Hurdle | Threshold | <35% (met at 3.8%) | Met | N/A |
| Total AIP Payout vs Target | — | 100% | 98.0% of target; McCabe $1,245,324 |
LTI (Long-Term Incentive) – FY 2024 Awards (granted Jan 18, 2024):
| Component | Grant | Vesting/Performance | Target Payout Basis |
|---|---|---|---|
| Time-based RSUs | 11,554 units | 33% each year through 2027, subject to service | N/A |
| Performance-based RSUs (PSUs) | Target 26,959; Max 64,701 units | 3-year period (2024–2026) with peer-relative ROATCE and TBV Accretion (equal weights); TSR modifier ±20% vs KBW Regional Bank Index; NPA soundness threshold required for settlement | Target at peer 75th percentile; Max at 95th percentile |
| Estimated Earn (as of 12/31/2024) | 42,870 units (≈66% of max incl. TSR modifier) | Determined after FY2026 and peer reporting | N/A |
2024 performance metrics referenced in LTI (absolute results): ROATCE 11.1%; TBV Accretion 9.5% .
Settlement/Change‑of‑Control Mechanics:
- PSUs/RSUs generally accelerate upon change‑of‑control; PSUs vest at greater of target or prorated performance through last completed quarter; 2022 “Special PSUs” are forfeited upon change‑of‑control .
- Retirement at age ≥65 yields prorated performance units for in‑flight cycles and prorated vesting for the next scheduled RSU tranche .
Equity Ownership & Alignment
| Ownership Measure | Value |
|---|---|
| Beneficial Common Shares | 317,590 (0.41% of outstanding) |
| Trust Holdings (included) | 123,000 shares held in family trust with spouse voting/dispositive power |
| Unvested RSUs (12/31/2024) | 23,422 units; market value $2,679,243 (at $114.39) |
| Unearned PSUs (12/31/2024, at max) | 285,351 units; market value $32,641,301 (at $114.39) |
| Options | None outstanding; company has not granted options since 2008 |
| Ownership Guidelines | Exec guideline: Chairman must hold ≥400% of salary; PNFP states all execs (other than newly promoted CCO) exceed guidelines; pledges excluded from compliance |
| Pledging/Hedging | Hedging prohibited by policy; pledging disfavored; no McCabe pledges disclosed |
Insider supply considerations:
- 2024 grant RSUs vest through 2027; 2024 PSUs settle post‑FY2026 subject to performance and NPA threshold; estimated 42,870 PSUs could be earned (subject to final certification), potentially adding equity supply at settlement .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | Auto‑renews annually; severance if terminated without “cause” or if executive terminates for “cause” per agreement |
| Regular Severance (no change‑of‑control) | 3× base salary if terminated by PNFP without cause; up to 12 months base salary if executive terminates for cause |
| Change‑of‑Control (Double Trigger) | Lump sum 3× (base salary + target bonus), plus 3 years health benefits, plus excise tax gross‑up; equity accelerates as described; Special PSUs forfeited |
| Excise Tax Gross‑Up | Estimated 20% excise tax obligation ≈ $5.9M for McCabe in CoC scenario; gross‑up provided |
| Scenario Valuation (as of 12/31/2024) | Aggregate value if terminated within 12 months post‑CoC: $49,561,150 (includes cash, equity acceleration, benefits, tax assistance, gross‑up) |
| Clawback | Amended and Restated Compensation Recovery Policy compliant with SEC/Nasdaq; recovers incentive‑based comp upon restatement; AIP clawback for materially inaccurate results |
Board Service and Governance
| Attribute | Details |
|---|---|
| Role | Chairman of the Board (Company and Bank) since formation; employee director (not independent) |
| Committees | Executive Committee member; Community Affairs Committee member; Trust Committee member |
| Independent Oversight | Lead Independent Director presides over executive sessions (4 held in 2024); audit/comp/risk/nominating/climate committees fully independent |
| Attendance | All directors met ≥75% attendance requirement in 2024; all attended annual meeting |
| Board Age Policy | Directors over 75 at time of the annual meeting shall not continue serving following that meeting |
| Dual‑Role Implications | CEO and Chairman roles separated (Turner is CEO; McCabe is Chairman); mitigations: Lead Director and independent committee structure |
Performance & Track Record
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Adjusted FDEPS ($) | — | 7.42 | 6.89 |
| GAAP FDEPS ($) | — | 7.14 | 5.96 |
| Adjusted Total Revenues ($B) | — | 1.695 | 1.797 |
| ROATCE (%) | — | — | 11.1 |
| TBV Accretion (%) | — | — | 9.5 |
| Net Income ($MM) | 560.7 | 562.2 | 475.1 |
| TSR Value of $100 (Company) | 118.53 | 142.82 | 189.15 |
| TSR Value of $100 (Peer Index) | 116.10 | 115.64 | 130.90 |
Say‑on‑Pay support: 94.2% approval at 2024 annual meeting .
Compensation Structure Analysis
- Pay Mix: Equity is a major component (PSUs 70% of LTI; RSUs 30%); CEO/Chair aim for performance‑heavy pay relative to peers; AIP and LTI targets generally set to achieve at/near top‑quartile outcomes on peer metrics (ROATCE/TBV, EPS/revenue growth) .
- Design Changes: 2025 shifts more performance pay to cash AIP and correspondingly reduces LTI target value (total target comp broadly unchanged), improving near‑term cash sensitivity to performance .
- Governance Watch‑Items: Excise tax gross‑up in CoC packages (shareholder‑unfriendly); accelerated vesting upon CoC (PSUs at least target), while Special PSUs are forfeited; age policy implies upcoming board refresh considerations for a 74‑year‑old chair .
Risk Indicators & Related Party Transactions
- Hedging/Pledging: Hedging prohibited; pledging discouraged; directors and execs certify compliance annually; no McCabe pledges disclosed .
- Related Party Banking: Loans/deposits/trust/insurance/investment services for directors/officers/families on market terms; no unfavorable features or problem loans disclosed .
- Grant/Trading Practices: No option grants; disciplined grant timing (LTI grants two days after prior-year results release) .
Equity Vesting & Potential Selling Pressure
| Instrument | Unvested/Unearned (12/31/2024) | Key Dates |
|---|---|---|
| RSUs (time-based) | 23,422 units; vest pro‑rata over three years (through 2027) | Annual tranches through 2027 |
| PSUs (performance-based) | Max 285,351 units; estimated earn ≈ 42,870 for 2024 grant as of 12/31/2024; settlement after FY2026 (subject to NPA threshold and peer rankings) | Certification post‑FY2026; settlement in Common Stock thereafter |
Note: Actual PSUs delivered depend on peer‑relative outcomes and TSR modifier; supply impact is contingent on multi‑year performance and soundness thresholds .
Investment Implications
- Alignment: Significant personal ownership (0.41%) and multi‑year, performance‑weighted LTI structure (peer‑relative ROATCE/TBV with TSR modifier) indicate strong alignment; ownership guidelines met/exceeded by execs .
- Retention Risk: Age‑based board policy (cutoff at 75) suggests near‑term governance transition potential; employment agreements include robust severance/CoC protection for continuity, but excise tax gross‑up is a governance headwind .
- Trading Signals: 2024 AIP payout near target (98%) on adjusted performance; LTI estimated earn at ~66% of max for 2024 grant indicates progress toward multi‑year goals; eventual PSU settlements could add share supply in 2027+ subject to performance/soundness tests .
- Governance Mitigations: Separation of CEO and Chair, Lead Director oversight, and fully independent key committees mitigate dual‑role concerns around independence for an employee-chair structure .