John T. Rippy

About John T. Rippy

Executive Vice President and Chief Risk Officer (CRO) of Republic Bancorp, Inc. and Republic Bank; also Assistant Secretary. Age 64; joined the Company in 2005 (SVP Risk Management Officer), served as SVP Chief Legal & Compliance Officer (2009), SVP Chief Risk Management Officer (2013), and named EVP/CRO in 2018 . Company compensation philosophy ties NEO incentives primarily to Total Company Gross Operating Profit (GOP) rather than stock performance due to thin trading liquidity and volatility, with subjective adjustments allowed for macro/regulatory factors . Company pay-versus-performance disclosure shows shareholder return index and financials over 2020–2022, indicating alignment emphasis on steady earnings: shareholder return index 80.82 (2020), 117.82 (2021), 98.86 (2022); peer group 90.69 (2020), 126.45 (2021), 100.39 (2022); Net Income $83,246k (2020), $87,611k (2021), $91,106k (2022); Gross Profit $102,633k (2020), $111,442k (2021), $116,845k (2022) .

Past Roles

External Roles

No external directorships or roles for Mr. Rippy are disclosed in the Company’s proxy statements cited here .

Fixed Compensation

Perquisites detail (2022):

• 401(k) match $12,200; life insurance $1,344; club memberships $5,044; parking $1,500; total $20,088 .

TRS Transaction Bonus (discretionary, 2022):

• CRO received $75,000 discretionary bonus tied to TRS transaction and ensuing lawsuit work (included in bonus figures) .

2023 base salary setting:

• CRO annualized base salary $347,000 (+2.1% YoY), effective January 2023 .

Performance Compensation

Primary metric and 2022 outcomes:

• Metric: Total Company GOP; Entry Level achieved, Maximum Level not achieved; payout awarded at 70% of incentive potential .
• CRO incentive potential $175,000; payout awarded $122,500 (70%) .
• Incentive compensation earned during covered year is paid on the following March payout date (Chair/CEO, CEO/Bank, CFO, CIOO; same policy applied historically to NEOs) .

Program design and guardrails:

• NEO bonus program flexible; allows discretionary adjustments for macro/regulatory long-term decisions; 2022 unusual $18 million Settlement excluded from GOP .
• Company stock performance is not a component of NEO bonus evaluation given low trading volume/volatility; focus is on consistent earnings over time .

Equity-based performance awards:

• PSUs awarded (design) to settle into Restricted Shares based on ROAA percentages and efficiency ratios; payout requires maintaining peer ranking baseline as of Sep 30, 2022; all shares issued under PSUs/Restricted Shares must be held for two years after vest; two-year post-exercise hold on NQSOs .

Equity Ownership & Alignment

Beneficial ownership (as of record date near proxy publication):

• Shares beneficially owned: 18,167 (Class A+Class B combined), less than 1% of outstanding .
• ESPP: 272 shares held in Employee Stock Purchase Plan .

Outstanding awards and vesting schedules (as of 12/31/2022):

• Options (unexercisable counts; first exercisable dates, exercise prices, expirations):
  • 5,000 options @ $36.29, exp 12/31/2024; first exercisable 12/31/2023 .
  • 1,500 options @ $35.92, exp 03/09/2025; first exercisable 03/10/2024 .
  • 4,868 options @ $51.39, exp 12/31/2025; first exercisable 12/31/2024 .
  • 1,500 options @ $35.92, exp 03/09/2026; first exercisable 03/10/2025 .
• Restricted shares/voting rights outstanding:
  • 3,000 restricted shares awarded 03/30/2018; vest 50% on 03/30/2023 and 50% on 03/30/2024 .
  • 1,333 restricted shares awarded 01/27/2021; vest 12/31/2023 .
  • 667 restricted shares awarded 01/18/2022; vest 12/31/2024 .
• 2022 option exercises and stock vesting: none for CRO (no shares acquired or value realized) .

Deferred compensation and alignment:

• Non-Employee Director & Key Employee Deferred Compensation Plan: CRO executive contribution $25,000; Company match $25,000; aggregate earnings $(42,213); aggregate balance $243,604 as of 12/31/2022; matches vest Dec 31 of the fifth year from match year, accelerated upon death, disability, or change in control; deemed invested in Class A stock with dividend equivalents converted to stock equivalents .
• Ownership guidelines: CEO/Bank, CFO, Pres/RPG, and CRO required to own minimum of 2x base salary in Company stock within five years from January 2021; all PSUs/Restricted Shares subject to two-year post-vest hold; NQSOs subject to two-year post-exercise hold .
• Anti-hedging: Directors, Executive Officers, and employees prohibited from hedging Company shares (e.g., collars, swaps, exchange funds) .

Pledging:

• No pledging policy disclosure identified in cited sections; anti-hedging policy and two-year holding requirements are disclosed .

Employment Terms

Change-in-Control (CIC) severance agreements (approved Jan 27, 2022) for CRO and other NEOs:

• Double-trigger: severance payable if employment is terminated after a CIC by Company other than for cause or by the executive for good reason, contingent on release of claims .
• Severance economics: two times base salary plus average bonus over prior three years, paid in installments over 24 months; continued welfare benefits coverage for two years; accelerated exercisability of stock options/SARs; reimbursement of legal fees; assignment of any Company-owned life insurance policy interest; 280G cutback applies only if net after-tax benefit is higher with reduction; 409A six-month delay for “key employees” where applicable .
• Restrictive covenants: two-year noncompete, non-solicitation, confidentiality covenants apply regardless of CIC occurrence and are incorporated into equity awards .
• CIC definition includes acquisition of voting power greater than “Trager Family Members” or Trager Family combined voting power falling below 25% .
• Estimated CRO payout if CIC occurred on 12/31/2022: $1,227,713 (includes accelerated vesting values and benefits assumptions) .

Investment Implications

• Alignment: CRO pay emphasizes Total Company GOP with documented payout mechanics (70% of potential in 2022), de-emphasizing stock price, which suits a thinly-traded bank and reduces misaligned short-termism; strong hold requirements (2-year post-vest/exercise) and anti-hedging support long-term alignment .
• Selling pressure risk: Multiple tranches of options first became exercisable in 2023–2025 and restricted shares vested in 2023–2024; although 2022 showed no exercises/vestings, the forward vest/exercise calendar could create episodic liquidity windows; hold requirements mitigate immediate selling but monitor 12/31/2023, 03/10/2024, 12/31/2024, 03/10/2025 triggers .
• Retention/CIC: Two-year noncompete/non-solicit and meaningful double-trigger severance (2x cash + benefits) plus accelerated option exercisability provide retention and orderly exit incentives; the defined CIC threshold tied to Trager Family voting control is unique and could activate in governance transition scenarios .
• Pay-for-performance calibration: Discretion in bonus program allows adjustments for extraordinary items (e.g., $18M settlement excluded), but discretionary elements (including TRS-related bonuses) warrant ongoing scrutiny for consistency versus objective GOP targets .

Performance Compensation

Equity Ownership & Alignment

Employment Terms

Investment Implications

• Compensation alignment: Heavy reliance on GOP with disciplined payout scaling (70% in 2022) and explicit exclusion of extraordinary items suggests alignment with operating performance; limited use of stock price metrics reduces distortion from thin liquidity .
• Event-driven flows: The clear vest/exercise calendar could create time-bound selling windows; two-year holding requirements temper near-term disposal, but monitor post-vesting windows and option first-exercisable dates for potential insider selling pressure .
• Retention risk: Robust double-trigger CIC economics and restrictive covenants reduce near-term flight risk; however, meaningful severance could incentivize exit under adverse control changes; governance threshold tied to Trager Family voting power is a unique structural factor for scenario analysis .
• Discretionary bonuses: The TRS-related discretionary award ($75,000) adds idiosyncratic elements to pay outcomes; continue monitoring for consistency and transparency in bonus determinations versus stated GOP targets .