Paul P. Egge
About Paul P. Egge
Paul P. Egge, 46, is Senior Executive Vice President and Chief Financial Officer of Stellar Bancorp, Inc. and Stellar Bank. He joined Allegiance Bank/Allegiance in 2016 as EVP & CFO prior to the October 1, 2022 merger that formed Stellar Bank, and continues in the CFO role at the combined company . Egge graduated cum laude with a BA in economics and finance from the College of William & Mary and holds an MBA from Northwestern University’s Kellogg School of Management . Company pay-versus-performance disclosures show 2024 EPS of $2.15 and a cumulative TSR value of $100.49 for an initial $100 investment (peer TSR $123.92), framing the operating backdrop under his financial leadership .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Allegiance Bank / Allegiance Bancshares, Inc. | EVP & CFO | 2016–2022 | Served as CFO prior to completion of the merger that formed Stellar Bank |
| Cadence Bank | Director of Capital Planning & Corporate Development | Not disclosed | Capital planning and corporate development responsibilities |
| Robert W. Baird & Co. | Investment Banker | Not disclosed | Strategic and capital markets advisory for banks and specialty finance |
Fixed Compensation
Multi-year compensation (NEO Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 117,500 | 495,000 | 509,850 |
| Bonus ($) | 35,000 | 49,754 | — |
| Stock Awards ($) | 611,875 | 321,280 | 360,031 |
| Non-Equity Incentive ($) | 188,688 | 206,353 | 286,961 |
| All Other Compensation ($) | 11,521 | 24,529 | 51,432 |
| Total ($) | 964,584 | 1,096,916 | 1,208,274 |
2024 “All Other Compensation” breakdown:
| Category | Amount ($) |
|---|---|
| 401(k) Match | 20,700 |
| HSA Contributions | 1,500 |
| Automobile Allowance/Reimbursements | 15,000 |
| Country Club Dues | 6,625 |
| Dividends on Restricted Stock that Vested | 7,607 |
| Total | 51,432 |
Base salary changes and target bonus positioning:
| Item | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 495,000 | 509,850 (+3.0%) |
| Target Bonus (% of Base) | Not disclosed | 55% |
| AIP Target Bonus ($) | Not disclosed | 280,418 |
| AIP Actual Paid ($) | 206,353 | 286,961 (102.33% of target) |
Performance Compensation
Annual Incentive Plan (AIP) design and 2024 outcomes:
| Metric | Weight | Target | Maximum | Actual 2024 | Payout Factor |
|---|---|---|---|---|---|
| ROATCE | 50% | 11.25%–12.25% | 14.0% | 12.00% | 102.33% (company-wide) |
| PTPP ROAA | 30% | 1.40%–1.55% | 1.75% | 1.35% | 102.33% |
| NCO/Avg Loans (bp) | 20% | 25–20 | 5 | 9 | 102.33% |
Egge-specific AIP values for 2024:
| Item | Value |
|---|---|
| Target as % of Base | 55% |
| AIP Target Bonus ($) | 280,418 |
| AIP Paid ($) | 286,961 |
Long-Term Incentives (2024 grants, March 15, 2024):
| Instrument | Grant Date | Units | Target Value ($) | Vesting | Performance Metric |
|---|---|---|---|---|---|
| RSAs | 03/15/2024 | 6,925 | 165,701 | Ratable over 3 years (each anniversary of grant) | Time-based |
| PSUs | 03/15/2024 | 6,925 (target) | 165,701 | Cliff vest at end of 3-year performance period (12/31/2026), subject to employment | Relative TSR vs S&P U.S. SmallCap Bank Index; 0% below 20th percentile, 100% at 45–55th, 200% ≥75th; straight-line interpolation |
Options exercised and restricted stock vested (2024):
| Item | Shares/Value |
|---|---|
| Options Exercised (Shares / Value) | — / — |
| Restricted Stock Vested (Shares / Value) | 7,976 / $196,087 |
Equity Ownership & Alignment
Beneficial ownership and option status:
| Holder | Shares Beneficially Owned | % Outstanding |
|---|---|---|
| Paul P. Egge | 47,861 | * (less than 1%) |
| Options Outstanding (12/31/2024) | None | — |
Outstanding equity awards (12/31/2024):
| Award | Unvested Units | Market Value ($) | Vesting Details |
|---|---|---|---|
| RSAs (11/01/2022) | 6,211 | 176,082 (at $28.35) | Vest on 10/31/2025 |
| RSAs (03/15/2023) | 3,532 | 100,132 (at $28.35) | 1/3 vested 03/15/2024; remaining 1/3 on 03/15/2025 and 03/15/2026 |
| RSAs (03/15/2024) | 6,925 | 196,324 (at $28.35) | Vest 1/3 on 03/15/2025, 03/15/2026, 03/15/2027 |
| PSAs (03/15/2023) | 5,298 (estimated earned at 100% of target) | 150,184 | Cliff vest 12/31/2025, subject to continued service |
| PSUs (03/15/2024) | 6,925 (estimated earned at 100% of target) | 196,324 | Performance measured through 12/31/2026; shares vest 12/31/2027, subject to service |
Stock ownership guidelines and post-vest holding:
- Minimum ownership: 2× base salary for executive officers (5× for CEO; 5× cash retainer for non-employee directors); accumulate within 5 years .
- Post-vest holding policy: for grants made in 2025+, executives must hold vested shares for one year post vest .
Estimated guideline compliance snapshot (as of 12/31/2024 price basis):
| Item | Amount |
|---|---|
| Shares owned | 47,861 |
| Price per share (12/31/2024) | $28.35 |
| Estimated value of holdings ($) | ~$1,356,859 |
| 2024 base salary ($) | $509,850 |
| Guideline threshold (2× salary, $) | $1,019,700 |
Based on the 12/31/2024 share price and 2024 salary disclosure, Egge’s beneficial holdings appear to exceed the 2× salary guideline threshold .
Employment Terms
Severance and change-in-control plan economics:
- Change in Control Severance Plan: For a Qualifying Termination within the window (3 months pre- to 18 months post-CiC), Egge receives 2× (base salary + target bonus), pro-rata target bonus for year of termination, and 18× monthly employer contributions for medical/dental/vision; outplacement up to $25,000; 12-month non-solicit covenant; standard 280G excise tax cutback unless better to pay tax .
- Bank Severance Plan (non-CiC): Lump sum equal to four weeks of base salary per completed year (min 26 weeks; max 52 weeks) plus employer-paid benefits for same duration (min 26; max 52 weeks) if position eliminated and no comparable role offered .
Scenario-specific amounts for Paul P. Egge (assuming event on 12/31/2024):
| Component | Change in Control | Involuntary Termination with CiC | Involuntary Termination w/o CiC | Retirement | Death/Disability |
|---|---|---|---|---|---|
| Cash Severance ($) | — | 1,580,535 | 333,363 | — | — |
| Long-Term Incentives ($) | 819,046 | 819,046 | — | — | 492,518 |
| Non-Equity Incentive ($) | — | 280,418 | — | 280,418 | 280,418 |
| Benefits & Perquisites ($) | — | 67,294 | 19,972 | — | — |
| Total ($) | 819,046 | 2,747,293 | 353,335 | 280,418 | 772,936 |
Consistency check: 2×(2024 base + 2024 target bonus) = 2×($509,850 + $280,418) = $1,580,536, matching the disclosed $1,580,535 cash severance for CiC termination (rounding) .
Performance & Track Record
Pay-versus-performance (company-level context):
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| TSR – Value of $100 Investment | $83.67 | $96.87 | $100.17 | $96.64 | $100.49 |
| Peer TSR – Value of $100 Investment | $107.54 | $128.27 | $90.81 | $114.99 | $123.92 |
| Net Income ($ millions) | $26.40 | $81.60 | $51.40 | $130.50 | $115.00 |
| EPS ($) | $1.57 | $2.85 | $1.48 | $2.45 | $2.15 |
Compensation Peer Group (2024)
| Peer Companies |
|---|
| 1st Source Corporation; Amerant Bancorp Inc.; BancFirst Corporation; Berkshire Hills Bancorp, Inc.; CVB Financial Corp.; Enterprise Financial Services Corp.; FB Financial Corporation; First Financial Bankshares, Inc.; First Busey Corporation; Independent Bank Group, Inc.; International Bancshares Corporation; National Bank Holdings Corporation; Origin Bancorp, Inc.; Renasant Corporation; Sandy Spring Bancorp, Inc.; Seacoast Banking Corporation of Florida; ServisFirst Bancshares, Inc.; Southside Bancshares, Inc.; Trustmark Corporation; Veritex Holdings, Inc. |
Governance & Shareholder Feedback
- Say-on-Pay support: ~96.5% favorable in 2024, with outreach to top 16 institutions (40.8% of shares) and discussions indicating no material changes warranted in compensation plan design .
- Committee oversight: Compensation Committee reviews CD&A, pays particular attention to SEC and NYSE requirements, risk assessments, and alignment with banking regulator guidance .
Investment Implications
- Pay-for-performance alignment: Egge’s AIP is tied to ROATCE, PTPP ROAA, and credit losses, with 2024 payout at 102.33% of target; his LTI mix (50% PSUs/50% RSAs) uses relative TSR versus a defined bank index and multi-year vesting, reinforcing longer-term alignment .
- Vesting calendar and potential selling pressure: Material vesting dates include March 15, 2025/2026/2027 for RSAs, October 31, 2025 for 2022 RSAs, December 31, 2025 for 2023 PSAs, and December 31, 2027 for 2024 PSUs; however, a one-year post-vest holding policy on grants made in 2025+ may reduce near-term selling pressure on those awards .
- Ownership alignment: Beneficial ownership of 47,861 shares and estimated value >2× salary at the 12/31/2024 price indicate strong compliance with newly adopted ownership guidelines; no options outstanding limit asymmetric windfalls .
- Retention and change-in-control economics: A 2× salary+target bonus CiC multiple, pro-rata bonus, and benefits, plus PSUs tied to multi-year TSR, create meaningful retention incentives; CiC termination value disclosure of ~$2.75M quantifies downside protection .
- Governance risk is low: High say-on-pay approval (~96.5%) and committee oversight reduce compensation-related governance overhangs; excise tax cutback mitigates shareholder-unfriendly gross-ups .