Charles Lowrey
PRUDENTIAL FINANCIALAbout Charles Lowrey
Charles F. Lowrey (age 67) has served as Prudential Financial’s Chairman and CEO from 2018 to March 31, 2025, and became Executive Chairman for an expected 18-month period thereafter. He previously served as EVP & COO of Prudential’s U.S. Businesses (2011–2014), EVP & COO of Prudential’s International Businesses (2014–2018), and President & CEO of PGIM and PGIM Real Estate; prior to joining Prudential in 2001, he led J.P. Morgan’s Real Estate & Lodging Investment Banking (Americas) and earlier was a registered New York architect and managing partner of a firm he founded . Company TSR has been positive across horizons: 1-year cumulative TSR 19% (16th percentile vs compensation peers), 3-year 26% (50th percentile), and 5-year 63% (49th percentile) . The Board announced the CEO/Chair split with Mr. Lowrey as Executive Chairman (non-independent) and a Lead Independent Director structure under Michael Todman to reinforce oversight .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Prudential Financial | Chairman & CEO | 2018–Mar 31, 2025 | Led strategy pivot to higher growth/capital efficiency; oversaw major pension risk transfer deals and diversified annuity sales . |
| Prudential Financial | Executive Chairman | From Mar 31, 2025 (18 months expected) | Facilitates CEO transition; supports Board and new CEO leadership . |
| Prudential Financial | EVP & COO, U.S. Businesses | 2011–2014 | Managed Group Insurance, Individual Life, Retirement, Retail Advice & Solutions . |
| Prudential Financial | EVP & COO, International Businesses | 2014–2018 | Oversaw international insurance operations and strategic ventures . |
| PGIM (Prudential) | President & CEO; CEO PGIM Real Estate | Pre-2011 (years not specified) | Led global investment management growth and real estate investing . |
| J.P. Morgan | MD & Head, Americas Real Estate & Lodging IB | 1988–2001 | Advised major real estate/lodging financings and M&A . |
| Architecture Firm (NY) | Managing Partner; Registered Architect | Pre-1988 (4 years) | Founded and led firm; registered NY architect . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Other Public Company Boards | N/A | N/A | No other public boards listed for Lowrey . |
Fixed Compensation
Multi-year compensation (SCT reported amounts):
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 1,284,615 | 1,300,000 | 1,383,333 |
| Stock Awards (incl. 2024 PS modification accounting) | 12,500,145 | 13,000,041 | 20,889,309 |
| Non-Equity Incentive (Annual Bonus) | 5,191,834 | 4,143,000 | 4,558,000 |
| Change in Pension Value | 1,016,309 | 691,074 | 1,247,861 |
| All Other Compensation | 100,705 | 79,213 | 89,755 |
| Total | 20,093,608 | 19,213,328 | 28,168,258 |
Additional fixed pay details:
- Base salary reset upon role change: effective Mar 31, 2025, Executive Chairman salary set at $1,000,000 .
- 2024 perquisites and contributions: perqs $34,422, PESP $13,800, SESP $41,533 (total $89,755) .
- CEO pay ratio: 293:1 for 2024 due to PS modification accounting effects .
Performance Compensation
Annual Incentive Program (AIP) – 2024
| Component | Weight | Target Scale | Result | Factor |
|---|---|---|---|---|
| EPS (AOI basis) | 30% | Target $14.20; scale 0.0–1.5 | $13.73 (after standard adjustments) | 0.925 |
| Relative ROE vs Peer Median | 30% | Target 0.0%; scale 0.0–1.5 | +0.3% vs median | 1.025 |
| Total Operating Expense vs Plan | 25% | Scale around plan | +$11M vs plan | 1.000 |
| Customer Experience (NPS) | 15% | Target +1; scale 0.0–1.5 | +5.27 | 1.500 |
| Final Performance Factor | — | — | — | 1.060 |
AIP opportunity and actual:
| Metric | 2024 Target ($) | 2024 Max ($) | 2024 Actual ($) |
|---|---|---|---|
| Annual Incentive (Lowrey) | 4,300,000 | 6,450,000 | 4,558,000 |
Standard adjustments used in AIP (illustrative net effect): cumulative +$1.23 EPS impact from variable investment income banding, M&A/reinsurance effects, and other items per framework .
Long-Term Incentive Program (LTIP)
Structure:
- 75% Performance Shares (PS) and 25% RSUs in annual grants .
- PS metrics: 50% Relative ROE vs Performance Peer Group; 50% Adjusted BVPS Growth (modified thresholds due to interest rate volatility) .
2022–2024 PS payout (paid Feb 2025):
| Metric | Weight | Result | Factor |
|---|---|---|---|
| Relative ROE vs Peer Median | 50% | +0.3% | 1.025 |
| BVPS Growth (modified) | 50% | 3.27% | 0.606 |
| Final Earn-Out Factor | — | — | 0.815 |
Shares delivered (2022 grant payout):
| Executive | Target Shares | Actual Shares (0.815x) |
|---|---|---|
| Charles F. Lowrey | 77,269 | 62,975 |
2024 equity grant composition (accounting view):
| Component | Value ($) |
|---|---|
| RSUs granted | 3,181,460 |
| PS at target granted | 9,544,190 |
| PS “in-flight modification” incremental fair value | 8,163,659 |
| Aggregate Stock Awards (SCT) | 20,889,309 |
RSU vesting: equal annual installments over 3 years .
Equity Ownership & Alignment
Beneficial ownership and outstanding awards (as of Mar 14, 2025 and year-end 2024):
| Item | Quantity | Notes |
|---|---|---|
| Common Stock (direct/indirect) | 199,359 shares | Individual ownership <1% of outstanding . |
| Exercisable Options | 67,691 shares | 2017 strike $110.45, 2018 strike $106.89 . |
| Total Beneficially Owned | 267,050 shares | — |
| Director Deferred Stock Units / Additional Underlying Units | 351,748 units | Includes target PS and unvested RSUs per footnotes . |
| Total Beneficial + Underlying Units | 618,798 | — |
| Unvested RSUs | 33,258 units (2024 grant) | MV $3,942,071 . |
| Outstanding PS (unearned, max basis) | 149,658 units (2024 grant) | MV $17,738,963 . |
| 2024 Option Exercises | 176,719 shares | Value realized $5,564,310 . |
| 2024 Stock Vested | 129,307 shares | Value realized $13,723,172 . |
Ownership policies and alignment:
- Stock ownership guideline: 700% of base salary for Executive Chairman/CEO; compliance met by all NEOs as of Mar 1, 2025 .
- Retention: 50% of net shares retained until guidelines met; continued retention requirement for Section 16 officers for one year post-termination or acquisition .
- Hedging/derivatives and pledging prohibited for Section 16 officers and Board; margin accounts disallowed .
- Insider trading policy mandates pre-clearance; closed-window restrictions; 10b5-1 plans allowed under policy .
Employment Terms
Key arrangements:
- No individual employment agreements for NEOs; severance/change-in-control provided via plans .
- CEO and Executive Chairman do not participate in the regular severance plan for involuntary termination without cause .
- Double-trigger Change-in-Control Program: lump sum equal to two times annual base salary plus two times annual incentive (average of prior 3 years), retirement accruals for the severance period, accelerated treatment if successor does not honor awards; continued health benefits for 18 months and a tax gross-up on health benefit taxation .
Estimated Lowrey payouts if separation occurred at end of 2024:
| Payment/Benefit | Change in Control ($) |
|---|---|
| Severance Payment | 12,771,902 |
| Annual Incentive (target-year basis) | 4,300,000 |
| Performance Shares (at target, paid in shares if not assumed) | 32,175,443 |
| RSUs (unvested value, paid in shares if not assumed) | 7,446,648 |
| Health/Life (18-month subsidy + associated tax gross-up) | 48,119 |
| Additional Retirement Accruals | 602,000 |
| Total | 57,344,112 |
Recovery and restrictions:
- Clawback policy for restatements and improper conduct, covering all incentive-based comp for prior 3 years; Board disclosure of recovery actions required .
- Award forfeiture for violating non-solicitation/non-compete; resignation notice period requirement for certain grades .
- Severance subject to release, confidentiality and nondisparagement agreements .
Board Governance
- Board service: Director since Dec 2018; currently Executive Chairman; member of the Executive Committee .
- Independence: Lowrey is not independent; Board % independent was 78% for nominees .
- Board leadership: Combined Chair/CEO historically; as of Mar 31, 2025 the roles split (Executive Chairman + CEO) with Lead Independent Director responsibilities central to governance .
- Committees (all independent except Executive): Audit, Compensation & Human Capital, Corporate Governance & Business Ethics, Finance, Investment .
- Board/Committee meetings and attendance: 9 Board meetings; 99% director attendance in 2024; independent director executive sessions held; independent director meetings twice in 2024 .
- Say-on-Pay: 2024 support 72.74%; Board enhanced disclosure on PS guardrails and retentive design after investor engagement .
Performance Context and Peer Benchmarking
- Compensation peer group (unchanged 2024): AFLAC, Lincoln, Manulife, MetLife, Principal, Sun Life; American Express/Capital One; Ameriprise, BNY Mellon, BlackRock, Franklin, Northern Trust, State Street; Bank of America, Citigroup, JPMorgan, PNC, U.S. Bancorp, Wells Fargo .
- Performance peer group (ROE comparison): AFLAC, Brighthouse, CNO, Globe Life, Lincoln, MetLife, Principal, RGA, Unum, Voya (with adjustments for AEL acquisition) .
- Pay-versus-performance disclosures show CAP aligned directionally with TSR, net income, and adjusted EPS over 2020–2024 .
Compensation Structure Analysis
- Mix and emphasis: Performance-based pay averaged 91% for NEOs in 2024; AIP factor 1.060 drove 106% of target annual incentives; PS 2022–2024 paid 81.5% of target; Chair’s 2024 bonus $4.558M vs target $4.3M .
- Program modification: In Jan 2024, BVPS metric in PS was modified with guardrails to exclude outsized rate impacts, lower thresholds, and cap payouts; incremental accounting cost $62M (approx. $22M attributed to NEOs) . Shareholder engagement highlighted rationale; 2024 payouts remained below target .
- Governance safeguards: No excise tax gross-ups in CIC except health benefit gross-up; no single-trigger equity vesting; no option repricing; clawback policy expanded per SEC/NYSE rules .
- Ownership alignment: Robust guidelines and retention; explicit prohibitions on hedging/pledging reinforce alignment .
Risk Indicators & Red Flags
- Mid-cycle modification of PS metrics (BVPS): unusual, reflects rate shock; guardrails implemented and payouts remained below target (0.815x), but the accounting impact elevated SCT “stock awards” in 2024 .
- Say-on-Pay support dipped (72.74%) vs 3-year average 93.4%; Board engaged and enhanced disclosures .
- CIC health benefit tax gross-up present (though limited to benefits), which some investors view negatively .
- Insider selling pressure: Significant 2024 realizations from option exercises ($5.56M) and stock vesting value ($13.72M); may reflect scheduled transactions and prior awards rather than incremental selling, but should be monitored for patterns .
Equity Ownership & Director Service History (Board Service)
- Shares/units: Lowrey beneficial ownership 199,359 shares; total beneficial plus underlying units 618,798; outstanding unvested RSUs 33,258; PS (unearned, max basis) 149,658 .
- Committee roles: Executive Committee member; no other public boards .
- Dual-role implications: Executive Chairman is not independent; Board maintains Lead Independent Director authority (agenda approval, shareholder engagement, executive sessions) to mitigate independence concerns during the transition .
Investment Implications
- Pay-for-performance alignment is intact: AIP and PS payouts below/near target based on formulaic metrics; rigorous ROE and BVPS goals suggest continued discipline; however, the 2024 PS modification indicates willingness to adjust plans in extraordinary conditions—important to monitor for precedent risk .
- Retention risk appears contained: Large outstanding PS/RSU balances and ownership guidelines support retention through the Executive Chairman transition period; no severance plan for CEO/Executive Chairman reduces involuntary termination cash exposure outside CIC scenarios .
- Governance oversight: Split CEO/Chair and strong Lead Independent Director role mitigate independence concerns; investors should continue to watch Say-on-Pay outcomes and any further incentive plan adjustments .
- Trading signals: 2024 option exercises and vesting value realizations were sizable; absence of pledging/hedging reduces alignment risk; monitor future Form 4s for ongoing selling pressure around vest dates .
References: Prudential Financial, Inc. 2025 DEF 14A Proxy Statement (published Mar 27, 2025)
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