Aaron P. Graft
About Aaron P. Graft
Founder of Triumph Financial; Vice Chairman, Chief Executive Officer and President; age 47; director since 2010. Education: B.A., cum laude, and J.D., cum laude, Baylor University . Under his leadership, 5-year total return (12/31/2019–12/31/2024) was 139% (19% annualized), outpacing bank indices; 2024 fully diluted EPS was $0.54 amid a prolonged freight downturn; the Payments segment grew revenue 35% to $56.7m and reached 8.6% Q4 EBITDA margin as network density expanded .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Triumph Land and Capital Management, LLC | Founder & President | Not disclosed | Led acquisition of distressed debt pools secured by multifamily; managed receivership real estate projects |
| Fulbright & Jaworski (now Norton Rose Fulbright) | Attorney (distressed loan workouts) | Not disclosed | Workout expertise that informed early asset acquisitions and credit discipline |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| The Bank of the West (Thomas, OK) | Director and Chairman | Not disclosed | Oversight of a community bank affiliate |
| Young Presidents’ Organization | Member | Not disclosed | Executive network affiliation |
Fixed Compensation
| Component | 2023 | 2024 | 2025 (effective Mar 1, 2025) | Notes |
|---|---|---|---|---|
| Base Salary ($) | $720,831 | $725,000 | $725,000 | 2025 base kept flat vs 2024 |
| Target Bonus (% of base) | 60% | 60% | 60% (program unchanged) | Applies under Annual Incentive Program (AIP) |
| Actual AIP Bonus ($) | $456,750 | $369,750 | N/A | 2024 payout at 85% of target |
| Perquisites/Other ($) | $69,653 | $70,265 | N/A | Club dues $50,090; exec health $6,375; 401(k) $13,800 (2024) |
Performance Compensation
- Long-Term Incentive Program (LTIP) mix (grant date 5/1/2024): 50% performance-based RSUs (relative/absolute TSR), 25% time-vested RSUs, 25% stock options; CEO target LTIP grant = 250% of base salary ($1,812,500 total target value) . Vesting: RSUs/options vest 25% annually over 4 years; PSUs earned over 3-year performance period with relative TSR curve and absolute TSR modifier; negative absolute TSR caps payout at 100% .
| 2024 AIP Metric | Weight | Threshold | Target | Stretch | Actual | Payout as % of Target |
|---|---|---|---|---|---|---|
| Invoice Price Adjusted EPS ($) | 20% | 0.94 | 1.38 | 1.82 | 0.61 | 0% |
| Banking Segment Pre-Tax Net Income ($mm) | 20% | 105.0 | 130.0 | 155.0 | 114.5 | 69% |
| Payments Q4 2024 EBITDA Margin (%) | 20% | — | 5 | 10 | 9 | 136% |
| Factoring Invoice Aging (% ≤45 days) | 20% | 96 | 96 | 97 | 96.2 | 120% |
| Individual/Business Unit Objectives | 20% | 50 | 100 | 150 | 100 | 100% |
| Weighted AIP Outcome | 100% | 85% |
| 2024 CEO Equity Grants (5/1/2024) | Quantity/Terms | Grant Date Fair Value ($) |
|---|---|---|
| RSUs (time-vested; 25%/yr) | 6,293 units | 453,096 |
| Stock Options (10-yr; $72.00 strike; 25%/yr) | 12,148 options | 453,120 |
| Performance RSUs (TSR; 3y; target/max) | 12,586 target / 44,050 max | 1,443,803 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Common) | 196,624 shares total beneficially owned; consists of 127,060 owned directly/indirectly; 15,473 subject to future vesting; 54,091 options exercisable within 60 days; <1% of shares outstanding |
| Pledged Shares | 60,000 shares pledged to JPMorgan Chase Bank, N.A. for a personal loan (pre-approved exception; pledged shares excluded from guideline compliance) |
| Unvested PSUs (at max shown) | 17,640 (2022 grant), 54,460 (2023 grant), 44,050 (2024 grant) with stated market values at 12/31/2024 |
| Option Overhang and Strikes | Multiple tranches exercisable/unexercisable with strikes $25.80–$88.63; 2031–2034 expirations; 54,091 currently exercisable |
| Stock Ownership Guidelines | CEO: 3x base salary; executives must reach by 5th anniversary; all executives/directors in or expected to be in compliance by their dates |
| Hedging/Pledging Policy | Hedging prohibited; pledging limited to pre-approved cases and not counted toward guideline compliance |
| Director Pay | As an employee-director, he receives no separate director compensation (not listed in director comp table) |
Employment Terms
| Provision | Terms |
|---|---|
| Agreement Term | 1-year term to December 31, auto-renewal; extends to at least 2nd anniversary following a change in control |
| Severance (no CIC) | 1.5x base salary cash; 18 months healthcare continuation (CEO) |
| Severance (double-trigger CIC) | 3.0x (base + trailing 3-yr avg bonus) cash; 36 months healthcare continuation (CEO) |
| Restrictive Covenants | Confidentiality (perpetual); non-compete, non-solicit, business non-interference for 1 year post-termination |
| Clawback | Dodd-Frank compliant compensation recovery policy tied to material restatements |
| 280G Treatment | “Best net” (better after-tax cutback); no excise tax gross-up |
| Illustrative Potential Payments (Assuming termination on 12/31/2024) | Severance ($) | Stock Awards ($) | Options ($) | Welfare ($) | Total ($) |
|---|---|---|---|---|---|
| Qualifying Termination (no CIC) | 1,087,500 | 4,180,779 | — | 44,193 | 5,312,472 |
| Qualifying Termination (within 24 mo of CIC) | 2,610,013 | 11,961,898 | 3,446,029 | 88,387 | 18,106,327 |
| Death or Disability | — | 6,479,016 | 3,446,029 | — | 9,925,045 |
Board Governance
- Board Role: Director since 2010; Vice Chairman; not independent (only Graft and Deadman are non-independent) .
- Committee Memberships: None (not on Audit, Compensation, NCG, or Risk & Compliance) .
- Board Structure: Independent Chairman (Carlos M. Sepulveda) separate from CEO; Board cites separation improves oversight; robust committee structure .
- Attendance: Board held 4 meetings; committees held 21; each director attended at least 75% of meetings (individual rates not disclosed) .
- Director Compensation and Ownership Guidelines: Non-employee directors have 5x retainer ownership guideline; employee directors (incl. CEO) do not receive director fees .
Performance & Track Record
- Strategy execution in 2024 included launching LoadPay (carrier-focused digital account), Factoring-as-a-Service, onboarding C.H. Robinson to payments and FaaS, and surpassing $100B cumulative payments processed; achieved Q4 Payments EBITDA margin of 8.6% vs ~0.3% in Q4’23 .
- Payments FY2024 revenue grew 35% to $56.7m; total payment volume +29% to $27.8B; network transactions volume +133% to $4.2B .
- Factoring operations improved invoice aging (96.2% ≤45 days) and deployed ML-based instant purchase decisioning; launched fuel program .
- Banking delivered $114.5m pre-tax income despite rate/cycle headwinds; cost of funds 1.51% for 2024 .
- Shareholder returns: 12/31/2019–12/31/2024 total return 139% (19% annualized), outperforming bank indices; a $100 investment grew to $239.03 by 12/31/2024 .
Compensation Structure Analysis
- Pay mix leans heavily to performance equity (50% PSUs with relative and absolute TSR tests), aligning upside with long-term TSR; options remain 25% of LTIP, maintaining at-risk exposure to share price appreciation .
- AIP metrics span enterprise EPS (adjusted for invoice price trends), segment KPIs (Banking PTNI; Payments Q4 EBITDA margin; Factoring invoice aging), and individual objectives—balanced across businesses and strategy -.
- 2024 AIP paid at 85% despite EPS shortfall, reflecting strong Payments/Factoring execution and Banking credit/expense discipline; signals committee discretion stayed within formulaic outcomes (no discretionary adjustment used) .
- Governance safeguards: clawback policy; no option repricing without shareholder approval; no change-in-control tax gross-ups; stock ownership requirements; hedging ban and tight pledging rules .
Risk Indicators & Red Flags
- Pledging: 60,000 shares pledged as collateral for personal loan—a potential alignment concern, though Company restricts pledging and excludes pledged shares from ownership guideline compliance .
- Related Party: Brother (Jordan Graft) consulting agreement (equity-paid) and Highway App, Inc. license; Highway generated $360,639 of fees to the Company in 2024; both relationships reviewed/approved by independent committees .
- Say-on-Pay: Strong shareholder support (~95% approval in 2024), reducing immediate governance pressure on pay design .
Director Compensation (as Director)
| Element | Amount / Policy |
|---|---|
| Cash Retainer (TFIN Board) | Employee directors receive no compensation for Board service (not listed in director compensation table) |
| Equity Grants (Director) | Not applicable (employee director) |
| Director Ownership Guideline | 5x annual cash retainer for non-employee directors (not applicable to CEO as director) |
Equity Vesting & Potential Selling Pressure
- Annual grant timing: generally May 1; RSUs and options vest 25% annually on each of the first four anniversaries of grant; 2024 grants vest on May 1 in 2025–2028; PSUs cliff-vest post three-year performance period subject to TSR results and caps/modifiers .
- In-the-money options outstanding (multiple tranches) and significant unvested PSUs represent potential future supply; at 12/31/2024, CEO had $3.45m of option value and $11.96m of stock awards value modeled in CIC scenario .
Compensation Peer Groups and Targeting
- Two peer frameworks used (banking and fintech) to reflect hybrid model; committee leans toward higher equity weighting vs banks to compete for fintech talent and align with TSR .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval ~95% of votes cast; company holds annual say-on-pay and emphasizes ongoing shareholder engagement .
Investment Implications
- Alignment: High proportion of at-risk, equity-linked pay (PSUs with TSR hurdles plus options) ties CEO wealth to multi-year TSR; ownership guidelines support alignment, though the 60,000-share pledge is a watch item for risk committees .
- Execution incentives: AIP design drives focus on Payments profitability (Q4 EBITDA margin), Banking profitability/credit quality, and Factoring operations—consistent with the company’s transition toward a scaled payments network and disciplined credit through the freight cycle -.
- Retention/CIC economics: Robust double-trigger CIC protections (3.0x salary+bonus and full healthcare) and sizable unvested equity promote continuity through strategic transitions; absence of tax gross-ups and presence of clawback are shareholder-friendly .
- Governance: Independent Chair with CEO as Vice Chair helps mitigate concentration of power; CEO not serving on key committees reduces conflicts; strong say-on-pay support lowers near-term governance risk .
- Watch items: Monitor any future changes in pledging, related-party dealings involving family entities, and option exercises/PSU settlements around performance windows for potential trading pressure signals .