David Trautman
PARK NATIONAL CORP /OH/About David Trautman
David L. Trautman (age 63) is Chairman of the Board (since May 2019) and Chief Executive Officer (since January 2014) of Park National Corporation and Park National Bank; he has served as a Park director since January 2005 and a Park National Bank director since February 2002, following more than a decade in executive roles at Park National Bank and the former First-Knox National Bank Division . Under his tenure, Park’s 2024 GAAP performance improved across key metrics: Net income $151.4M, Diluted EPS $9.32, ROAA 1.53%, ROAE 12.65%, with one-, three-, and five-year TSR at 95th, 95th, and 100th percentile versus peers . On a core-adjusted basis, ROAA 1.50% (95th percentile), ROAE 12.38% (90th percentile), with efficiency ratio improvement, reflecting durable execution . Compensation “actually paid” to the PEO has tracked cumulative TSR over time, signaling pay-performance alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Park National Corporation | President | 2005–2019 | Led corporate growth; prepared transition to Chairman/CEO roles . |
| Park National Bank | President | 2005–2019 | Guided affiliate/division integration and market expansion . |
| Park National Bank; First-Knox National Bank Division | Executive positions | >10 years prior to 2005 | Built technical banking expertise and operational leadership . |
External Roles
No external public-company directorships disclosed for Mr. Trautman in the latest proxy. Executive roles disclosed are limited to Park and Park National Bank .
Fixed Compensation
Multi-year compensation (CEO):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $750,000 | $750,000 | $750,000 |
| Annual Incentive ($) | $626,000 | $364,000 | $725,000 |
| Stock Awards ($) | $416,963 | $552,751 | $766,792 |
| Change in Pension Value ($) | $303,373 | $422,037 | $317,166 |
| All Other Compensation ($) | $84,712 | $103,397 | $102,111 |
| Total ($) | $2,181,048 | $2,192,185 | $2,661,069 |
All other compensation components (FY 2024):
- Split-dollar premiums: $9,660 (compensation-based) and $10,553 (maximum benefit); KSOP match $11,500; cash paid on dividend equivalents $70,398 .
Director compensation: As an executive officer, Mr. Trautman receives no separate director fees; director compensation applies to non-employee directors only .
Performance Compensation
Annual incentive plan structure and results (FY 2024):
- Target annual incentive opportunity: CEO 60% of base salary; actual awards ~81–97% of base across NEOs, reflecting strong results versus internal targets and peers .
- Metrics, weightings, targets, and actuals (GAAP basis):
| Metric | Weight | Minimum | Target | Maximum | Actual 2024 |
|---|---|---|---|---|---|
| PTPP ROATE | 40% | 13.74% | 17.17% | 20.60% | 19.28% |
| Diluted EPS | 30% | $6.46 | $8.07 | $9.68 | $9.32 |
| PTPP ROATA | 20% | 1.40% | 1.75% | 2.10% | 2.05% |
| Efficiency Ratio | 10% | 77.81% | 64.84% | 51.87% | 61.44% |
- Calculated incentive was 131.7% of target, with a discretionary multiplier +22.22% informed by top-decile TSR and ROAE/ROAA versus peers; CEO award for FY 2024 was $725,000 .
Long-term incentives (PBRSUs):
- Grant policy: 100% PBRSUs; earned on 3-year cumulative ROAA relative to a $5–15B financials index; no payout below median; maximum at ≥80th percentile; annual net income must cover 110% of dividends each year; 50% vests at certification and 50% one year later; five-year post-vesting holding requirement .
- FY 2024 grant (effective Jan 25, 2024): Target 4,380 PBRSUs; maximum 6,570 PBRSUs .
- 2021 grant outcome: ROAA at 84.33rd percentile; 150% of target earned; CEO earned 4,500 PBRSUs (50% vested Mar 31, 2024; remaining 50% vest Mar 31, 2025); five-year holding applies .
Equity Ownership & Alignment
Beneficial ownership and alignment:
- Beneficially owned shares: 77,458; less than 1% of outstanding .
- Stock ownership alignment: Value of CEO holdings equals 17.7x base salary, exceeding typical 5x guideline (no formal company guideline in place) .
- Pledging: 27,865 shares of Mr. Trautman and 13,230 shares of his spouse are pledged as collateral for a personal loan (third-party institution), introducing potential forced-sale risk .
- Holding restrictions: Multiple tranches of CEO-held common shares cannot be sold until specified dates (e.g., Mar 27, 2025; Mar 31, 2026; Mar 31, 2027; Mar 31, 2028; Mar 31, 2029), reflecting PBRSU post-vesting holding requirements .
Outstanding and earned equity (as of 12/31/2024):
| Award | Status | Quantity | Market Value ($) |
|---|---|---|---|
| 2021 PBRSUs (earned; service vest at 3/31/2025) | Earned, unvested 50% | 2,250 | $385,718 (at $171.43) |
| 2022 PBRSUs (2022–2024 performance) | Unearned (target) | 2,290 | $392,575 |
| 2023 PBRSUs (2023–2025 performance) | Unearned (target) | 2,950 | $505,719 |
| 2024 PBRSUs (2024–2026 performance) | Unearned (target) | 4,380 | $750,864 |
Vesting/settlement activity (FY 2024):
- Common shares acquired on vesting: 4,275; value realized $651,157 .
Anti-hedging and derivatives prohibition:
- No short sales; no puts/calls or derivatives on Park common; hedging requires CEO/CFO pre-approval and is generally prohibited .
Employment Terms
- No employment or standalone change-in-control agreements for the CEO; Company uses PBRSUs, SERP, and split-dollar policies to deliver retirement and risk-balanced incentives .
- Clawback policies: Board-approved Incentive-Based Compensation Recovery Policy (Rule 10D‑1/NYSE American Section 811) for restatements; PBRSU award agreements include forfeiture triggers (non-solicitation, non-disparagement, confidentiality, cooperation, and “cause”) for up to 12 months post-termination .
- Split-dollar life insurance (Compensation-Based): CEO beneficiary share ≈ 2× highest annual total compensation (capped by net at risk); eligibility continues post-retirement conditioned on age 62, vesting, no employment by another financials firm, and no termination for cause; CEO computed share as of 12/31/2024: $2,690,733 .
- Split-dollar life insurance (Maximum Benefit): Funds SERP-related liabilities and pays remaining balance to Park; premiums paid disclosed in all-other compensation .
- Pension and KSOP: Estimated lump-sum present value (as of 12/31/2024): Park KSOP $3,314,871; Park Pension Plan $1,294,729 .
- PBRSU vesting on change-in-control (illustrative 12/31/2024): Immediate vesting of unvested PBRSUs at performance-to-date levels; CEO aggregate PBRSUs that would vest: 16,501; market value $2,828,719 .
Board Governance
- Roles: Park director since 2005 and Park National Bank director since 2002; Vice Chair, Executive Committee; Chairman & CEO dual role, with a Lead Independent Director (Leon Zazworsky) providing counterbalance and leading executive sessions .
- Independence: Not independent due to current executive status (Chairman/CEO) .
- Attendance and meetings: Board met 5 times in FY 2024; each incumbent director attended ≥90% of Board and committee meetings; independent directors meet in executive session at least twice annually .
- Committee landscape: Audit, Compensation, Executive, Nominating, and Risk Committees; CEO does not serve on Audit/Comp; Compensation Committee consists of independent directors and uses independent advisor Meridian; no conflicts identified; five meetings in FY 2024 .
Director compensation: Non-employee directors receive cash retainers and common-share retainers; executives (including CEO) receive none for board service .
Compensation Structure Analysis
- Cash vs equity mix: CEO total rose to $2.66M in FY 2024, with higher stock awards and annual incentive reflecting outperformance; longer-dated PBRSU vesting and five-year holding periods keep equity at risk and aligned with long-term results .
- Shift to PBRSUs: Park grants 100% of long-term incentives as PBRSUs; no options have been used for over 15 years; no payouts below median; stricter max threshold at 80th percentile .
- Discretion in annual incentive: Up to ±25% based on relative TSR, ROAA/ROAE vs peers, and operating factors, applied in FY 2024 given top-decile peer performance .
- Say-on-pay: Strong shareholder support (≈97.5% “FOR” in 2024), indicating investor acceptance of pay-design and outcomes .
Compensation peer group:
- 2024 peer group: Twenty regional financial service holding companies spanning ~$6.4B–$18.0B in assets; Park at ~median size .
- 2025 updates: Premier Financial Corporation and WesBanco, Inc. removed (pending acquisitions); German American Bancorp and Lakeland Financial Corporation added .
Equity Ownership & Alignment Table
| Item | Detail |
|---|---|
| Beneficial ownership | 77,458 common shares; less than 1% of class . |
| Shares pledged | 27,865 (Mr. Trautman) and 13,230 (spouse) pledged to non-affiliate financial institution . |
| Holding restrictions | Multiple tranches not saleable until Mar 27, 2025; Mar 31, 2026; Mar 31, 2027; Mar 31, 2028; Mar 31, 2029 . |
| Ownership vs typical guideline | 17.7x base salary; Company has no formal ownership guideline . |
| Anti-hedging | Short sales/derivatives prohibited; hedging requires CEO/CFO pre-approval . |
Employment & Change-of-Control Economics (Selected)
| Component | Key Terms | Illustrative Amounts (12/31/2024) |
|---|---|---|
| Employment agreement | None; uses PBRSUs/SERP/split-dollar framework . | n/a |
| Clawback | Rule 10D‑1-compliant incentive recovery; PBRSU forfeiture triggers . | Policy-based |
| PBRSUs CoC acceleration | Vest at performance-to-date; service vesting waived . | 16,501 PBRSUs; $2,828,719 |
| KSOP | Defined contributions, matching . | $3,314,871 |
| Pension (DB) | Park Pension Plan . | $1,294,729 |
| Split-dollar (Comp-based) | ≈2× highest annual total compensation; post-retirement conditions . | $2,690,733 |
| Split-dollar (Max Benefit) | Funds SERP; remainder to Park . | Premiums disclosed in AOC |
Risk Indicators & Red Flags
- Pledged shares: Material pledging by CEO/spouse can create forced-selling risk in adverse conditions; monitor pledge levels and loan terms .
- Dual Chairman/CEO: Mitigated by Lead Independent Director structure, regular executive sessions, and strong committee independence .
- Hedging/derivatives ban: Reduces misalignment/hedging risk .
- No option repricing; PBRSUs have strict payout curve and holding period, lowering short-termism risk .
Say-on-Pay & Shareholder Feedback
- 2024 advisory vote: ≈97.5% approval .
- Next vote expected at 2026 annual meeting .
Compensation Committee Analysis
- Composition: Independent directors; Chair F. William Englefield IV; five meetings in FY 2024 .
- Advisor: Meridian Compensation Partners (independent; no conflicts) .
- Risk review: Committee conducts annual risk analysis; designs compensate to avoid excessive risk-taking .
Investment Implications
- Strong pay-for-performance design: 100% LTI in PBRSUs, strict payout thresholds, and five-year holding requirements align CEO incentives with multi-year ROAA, TSR, and efficiency outcomes, supporting long-term value creation .
- Near-term selling pressure low: Five-year post-vesting holding limits constrain discretionary selling, though pledged shares introduce exogenous selling risk; monitor pledge disclosures and any Form 4 activity around vesting dates (e.g., Mar 31, 2025) .
- Governance mitigants to dual role: Lead Independent Director and independent committees offset combined Chair/CEO risks amid consistent board attendance and executive sessions .
- Change-in-control economics: PBRSU acceleration at performance-to-date could be material; investors should factor potential dilution/settlement impacts in event-driven scenarios .