Thomas Ryan
SERVICE CORP INTERNATIONALAbout Thomas Ryan
Thomas L. Ryan is Chairman (since 2016) and CEO (since 2005) of Service Corporation International (SCI), a non‑independent director since 2004; age 59; educated at The University of Texas at Austin . Ryan’s 29‑year SCI tenure emphasizes acquisitions and disciplined capital allocation, with 2024 revenue of $4.2B and preneed sales production of ~$2.6B . SCI delivered a 10‑year TSR of +316% through 2024, materially above the S&P 500, and 2024 normalized EPS of $3.48 . The board mitigates CEO/Chair dual-role concerns via a strengthened Lead Independent Director with expanded authorities (e.g., calling meetings, presiding over executive sessions) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Service Corporation International | CEO, European Operations | 2000–2002 | Led international operating scale-up and integration |
| Service Corporation International | Financial management roles | 1996–2000 | Built finance foundation supporting M&A and capital allocation |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| University of Texas McCombs Business School Advisory Council | Board Member | — | Governance and talent pipeline engagement |
| UT MD Anderson Cancer Center Board of Visitors | Senior Member | — | Oversight and community impact |
| Texas Industries | Director (past) | — | Public company governance experience |
| Chesapeake Energy | Director (past) | — | Energy sector governance perspective |
| Weingarten Realty Investors | Director (past) | — | Real estate capital markets exposure |
Fixed Compensation
| Year | Base Salary ($) | All Other Compensation ($) | Notes |
|---|---|---|---|
| 2024 | 1,200,000 | 944,604 | Includes $603,679 deferred comp contributions; $25,875 401(k); $22,396 life; $292,654 perqs (incl. $241,785 aircraft) |
| 2023 | 1,200,000 | 1,118,573 | Senior SERP terminated (2022); lump-sum in prior year; no pension accruals |
| 2022 | 1,200,000 | 1,729,976 | Senior SERP termination finalized Dec 2022 |
2024 perquisites detail:
- Aircraft personal use: $241,785 .
- Financial/tax planning, medical reimbursement, life insurance included .
Performance Compensation
Annual Performance-Based Incentive (Cash)
| Metric | Weighting | Target | Actual | Payout % | Vesting |
|---|---|---|---|---|---|
| Normalized EPS | 1/3 | $3.65 | $3.48 | 15% | Cash, annual |
| Normalized FCF per Share | 1/3 | $4.11 | $4.40 | 200% | Cash, annual |
| Comparable Preneed Production | 1/3 | 102.5% | 98.8% | 0% | Cash, annual |
| Google Star Rating Modifier | Downward-only | 4.25 threshold | 4.65 achieved | No adjustment | N/A |
Result: Total cash incentive payout equals 72% of target for NEOs in 2024 (Ryan target 135% of salary) .
Long-Term Incentives (2024 Grants; granted Feb 14, 2024)
| Instrument | Grant Detail | Number | Pricing/Valuation | Vesting |
|---|---|---|---|---|
| Performance Units (shares) | Threshold/Target/Max | 8,900 / 35,600 / 71,200 | Monte Carlo fair value $3,543,085 | Pays 0–200% based on 3‑yr Relative TSR vs S&P MidCap 400, with ROE floor modifier; capped at target if absolute TSR negative |
| Restricted Stock | Shares | 35,600 | Fair value $2,488,084 | Service-based; vests 1/3 per year; specific tranches 3/5/25: 34,500; 3/5/26: 22,633; 3/5/27: 11,867 |
| Stock Options | Options | 141,000 | Exercise price $70.58; grant-date fair value $2,436,226 | 1/3 per year; 8‑year term; standard acceleration for death/disability/qualifying retirement/CIC with double trigger |
2022–2024 PSU performance settlement: SCI Relative TSR at 55th+ percentile → 125% factor; SCI 3‑yr normalized ROE 32.3% vs S&P MidCap 400 13.3% (modifier not applied) .
Equity Ownership & Alignment
Beneficial Ownership and Guideline Compliance (as of March 11, 2025)
| Item | Value |
|---|---|
| Shares owned | 1,659,337 (incl. 157,899 in family trusts) |
| Options exercisable within 60 days | 1,363,666 |
| Total beneficial (shares+60‑day options) | 3,023,003; 2.1% of class |
| Shares outstanding + options for % calc | 146,383,127 |
| Ownership guideline | 6× salary; min shares 90,034 |
| Actual multiple and status | 111×; in compliance |
| Hedging/pledging | Prohibited for officers/directors |
Outstanding Equity at FYE 2024
| Instrument | Unvested/Unearned | Market Value |
|---|---|---|
| Restricted Stock | 69,000 shares | $5,507,580 |
| Performance Units (max disclosure) | 207,000 share units | $16,522,740 |
Selected option tranches and vesting:
- 66,667 unexercisable options exp. 2/16/2030 vest 100% on 2/16/2025 .
- 90,667 unexercisable options exp. 2/15/2031 vest 50% on 2/16/2025 and 2/15/2026 .
- 141,000 unexercisable options exp. 2/14/2032 vest 33% each on 2/16/2025, 2/15/2026, 2/14/2027 .
Insider Selling Pressure Indicators (2024 activity)
| Activity | Quantity/Value |
|---|---|
| Options exercised | 627,000; value realized $28,437,402 |
| Restricted stock vested | 36,000; value realized $2,666,160 (deferred) |
| 10b5‑1 policy | Updated in 2023; structured trading windows and plan compliance |
SCI issues grants annually in February after 10‑K filing to reduce MNPI risk in awards .
Employment Terms
| Term | Provision |
|---|---|
| Agreement term | Current term through Dec 31, 2025; auto‑renew annually unless notice given |
| Base salary (as of Mar 11, 2025) | $1,200,000 |
| Annual bonus target | 135% of base salary |
| Severance (without cause) | Salary continuation for 2 years; prorated annual bonus; 18 months health benefits |
| Change‑of‑control (double trigger) | 3× (salary + target bonus) lump sum; prorated target bonus at CoC; 18 months health benefits |
| CoC definition | Ownership/board change/merger/asset sale thresholds with exemptions; no single‑trigger for equity after 2022 grants |
| Non‑compete | 1 year (company option to extend to 2 years); company pays base salary during non‑compete unless termination for cause or certain voluntary quits |
| Clawback | Company may recoup cash incentives, options, RS, PSUs under specified triggers |
| Tax gross‑ups | None; agreements exclude CoC tax gross‑ups |
Potential payments as of 12/31/2024 (illustrative):
| Scenario | Total ($) |
|---|---|
| Involuntary Not for Cause | 25,295,815 |
| Disability | 23,449,661 |
| Death | 31,095,815 |
| CoC Involuntary/Good Reason | 34,625,844 |
Multi‑Year CEO Compensation (SCT)
| Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non‑Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 1,200,000 | 6,031,169 | 2,436,226 | 1,162,890 | 944,604 | 11,774,889 |
| 2023 | 1,200,000 | 5,155,621 | 2,292,620 | 1,489,914 | 1,118,573 | 11,256,728 |
| 2022 | 1,200,000 | 4,483,147 | 2,203,060 | 3,120,000 | 1,729,976 | 12,736,183 |
Board Governance
- Roles: Chairman & CEO; Executive Committee Chair; non‑independent director .
- Independence structure: 80% of Board independent (target 90% post‑2025 meeting); all key committees fully independent; executive sessions at end of each Board meeting chaired by Lead Independent Director .
- Lead Independent Director: Expanded authorities (call meetings; preside in Chair’s absence; liaison; agenda/info oversight; evaluation involvement; shareholder engagement) .
- Director compensation: CEO receives no additional Board pay; non‑employee director retainers adjusted Nov 2024 (e.g., $100,000 base retainer; chair premia; $190,000 equity target) .
Performance & Track Record
| Metric | 2024 Value |
|---|---|
| Revenue | $4.2B |
| Preneed Sales Production | >$2.6B |
| Capital Deployed | $285M acquisitions/new builds; $428M returned to shareholders |
| 10‑Year TSR | +316% (2014–2024) |
| Pay vs Performance (2024 CEO CAP) | $17,758,374; TSR $188.20 on $100 basis; normalized EPS $3.48 |
Say‑on‑Pay: 83.2% approval in 2024; ongoing shareholder outreach (~60% of shares engaged pre‑meeting) .
Compensation Committee Analysis
- Composition: Ellen Ochoa (Chair), Anthony L. Coelho, C. Park Shaper, Marcus A. Watts; all independent; 100% attendance .
- Consultant: Meridian (independent since 2010); peer comparator group methodology based on Equilar survey and size; 166‑company comparator set; SCI near/above median on revenue, market cap, EV .
- Practices: Pay‑for‑performance emphasis; no hedging/pledging; no tax gross‑ups; no option repricing; no single‑trigger equity vesting post‑2022 .
Option Exercises and Stock Vested (2024)
| Item | Quantity | Value |
|---|---|---|
| Options exercised | 627,000 | $28,437,402 |
| RS vested (incl. deferred) | 36,000 | $2,666,160 |
Investment Implications
- Alignment: Very high ownership (111× salary; 2.1% beneficial stake), prohibited hedging/pledging, and stock‑heavy LTI mix support strong shareholder alignment; PSU design tied to relative TSR with ROE guardrail limits windfalls and penalizes weak fundamentals .
- Pay-for-performance: 2024 annual incentive paid at 72% of target due to mixed performance (EPS below target; FCF above max; preneed below threshold), evidencing discipline in annual payouts; LTI settlement at 125% for 2022–24 reflects outperformance vs midcap cohort but still capped if absolute TSR negative .
- Retention and change‑of‑control economics: Double‑trigger CoC (3× salary+target bonus) with accelerated vesting terms and non‑compete pay provisions reduce disruption risk while limiting single‑trigger windfalls; no tax gross‑ups, clawbacks in place .
- Trading signals: Significant 2024 option exercises ($28.4M realized) plus scheduled RS/PSU vesting may add periodic supply, but ownership remains well above guidelines and structured trading policies/10b5‑1 plan updates reduce adverse optics; monitor Form 4s around February/March vest dates .
- Governance: CEO/Chair dual role is offset by strong Lead Independent Director authorities, independent committees, and regular executive sessions, reducing independence risk while retaining strategic continuity .