Kenneth Vecchione
WESTERN ALLIANCE BANCORPORATIONAbout Kenneth Vecchione
Kenneth A. Vecchione, age 70, is President & CEO of Western Alliance Bancorporation (WAL) and has served as a director since 2007; he became CEO in April 2018 and was reappointed April 15, 2025 after a temporary medical leave in late 2024 . He holds a B.S. in Accounting from SUNY Albany and brings multi‑decade leadership across banking, credit cards, and alternative asset management, including prior CEO and CFO roles . Under WAL’s 2024 performance, net revenue was $3.2B, EPS was $7.09, CET1 was 11.3%, TBV/share grew 11.9% YoY, and shares appreciated ~29.2% during 2024; the Board’s pay design emphasizes pay-for-performance with 2024-2026 PSUs tied 75% to relative ROE with a CET1 governor and 25% to relative TSR .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Western Alliance Bancorporation | CEO; President (various intervals); President & COO (prior) | CEO since Apr 2018; President Jul 2017–Apr 2018 & resumed Oct 2019; President & COO 2010–2013 | Led strategic growth and risk management; oversight through industry volatility . |
| Encore Capital Group | President, CEO & Director; Chairman, Cabot Credit Mgmt (subsidiary) | 2013–2017 | Led international credit management portfolio; executive leadership through market cycles . |
| Apollo Global Management | Chief Financial Officer | 2007–2010 | Public-company CFO experience and capital markets execution . |
| MBNA Corporation | Vice Chairman & CFO; multiple positions | 1998–2006 | Senior financial leadership at leading card issuer . |
| AT&T Universal Card Services | EVP & CFO | 1997–1998 | Card business finance leadership . |
| Citicorp Credit Services | CFO | 1990–1994 | Consumer credit finance leadership . |
| Western Alliance Bank | Chairman | 2014–2015 | Bank subsidiary leadership . |
| Federal Home Loan Bank of San Francisco | Board Member | 2012–2013 | Regulated housing finance governance . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Phoenix Symphony | Board Member | Current | Community leadership . |
| Affinion Group | Director & Audit Committee Chair | 2006–2011 | Audit committee leadership . |
| International Securities Exchange | Director & Audit Committee Chair | 2007–2016 | Exchange governance . |
Fixed Compensation
| Year | Base Salary ($) | All Other Compensation ($) | Notes |
|---|---|---|---|
| 2022 | 1,300,000 | 64,835 | |
| 2023 | 1,400,000 | 95,517 | |
| 2024 | 1,500,000 | 109,327 | 2024 salary increased 7% under a letter agreement that expired at year-end 2024 . |
- 2024 perquisites/other: employer 401(k) contributions $14,464, dividends on unvested shares $82,863, car allowance $12,000 (total $109,327) .
- No separate director fees are paid to employee-directors; Vecchione receives no additional board compensation .
Performance Compensation
- Annual bonus target: 150% of salary; 2024 bonus paid $2,745,000 (122% of target) reflecting performance and a modest holistic adjustment to align with capital/liquidity priorities amid industry headwinds .
- 2024 Annual Bonus metrics and outcomes:
| Metric | Threshold | Target | Max | Actual | Target Weight | Actual Weight (Payout) |
|---|---|---|---|---|---|---|
| Adjusted EPS ($) | 7.75 | 8.18 | 8.45 | 7.59 | 30% | 0% |
| Loans HFI Growth ($M) | 750 | 1,242 | 2,700 | 3,379 | 5% | 10% |
| Non-Brokered Deposit Growth ($M) | 3,000 | 4,000 | 8,000 | 10,755 | 15% | 30% |
| Operating Noninterest Income Growth ($M) | 10 | 30 | 50 | 59 | 10% | 20% |
| CET1 (%) | 10.78 | 11.00 | 11.25 | 11.25 | 10% | 20% |
| Classified Assets Ratio (%) | 1.50 | 1.25 | 0.75 | 1.25 | 8% | 8% |
| Net Charge-Off Ratio (%) | 0.30 | 0.20 | 0.15 | 0.18 | 8% | 10% |
| Quality Control (Risk/Controls) | — | Achieves | — | Achieves | 15% | 14% |
| Total | 100% | 112% |
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Long-term incentives (LTI):
- 2024-2026 PSUs redesigned: 75% based on comparative 3‑year ROE vs peers with CET1 “governor” (0% payout if CET1 ≤10%; full multiplier at ≥11%); 25% based on relative TSR vs KBW Regional Banking Index (capped at 100% if TSR negative) .
- 2022 PSU outcome: 0% payout (cumulative EPS below threshold; relative TSR at 8.3rd percentile) .
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2024 LTI awards to Vecchione (grant date 2/6/2024 unless noted):
- RSAs: 12,945 shares (time‑based; 50% vests on 2nd and 3rd anniversaries) .
- PSUs: 32,361 target units (performance 2024–2026 per above) .
- CSRUs: 19,417 cash‑settled RSUs, vesting monthly over 36 months Mar 2024–Feb 2027 (cash settled; reduces dilution) .
- Hold-to-Retirement DSUs (granted 6/17/2024): $2,000,000 value, 33,496 underlying shares; vest on later of 1‑year anniversary and qualified retirement (age+service ≥60 with ≥5 years), paid only upon qualified retirement (or death/disability) .
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Multi-year compensation (Summary Compensation Table):
| Item ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 1,300,000 | 1,400,000 | 1,500,000 |
| Stock Awards (Grant-date FV) | 4,802,343 | 5,765,512 | 5,920,833 |
| Non-Equity Incentive Plan (Annual Bonus) | 2,028,000 | 1,491,000 | 2,745,000 |
| All Other Compensation | 64,835 | 95,517 | 109,327 |
| Total | 8,195,178 | 8,752,029 | 10,275,160 |
Equity Ownership & Alignment
- Beneficial ownership: 450,767 shares as of April 14, 2025; <1% of shares outstanding (110,615,656) .
- Executive stock ownership guideline: CEO 5x base salary; NEOs must retain 50% of net after-tax shares until compliant; proxy indicates current compliance for all NEOs .
- Hedging/pledging: Prohibited for directors and officers, with limited grandfathered exceptions (pledged shares excluded from guideline compliance and subject to limits). The proxy specifically notes a grandfathered pledge for the CFO; no current pledge is disclosed for Vecchione . Historically, prior proxies indicated pledged/margin shares for Vecchione, reflecting policy tightening over time .
- Outstanding and unvested equity (as of Dec 31, 2024; market value at $83.59/share):
- DSUs (6/17/2024): 33,496 units; $2,799,931 .
- RSAs (2/6/2024): 12,945; $1,082,073 .
- PSUs (2/6/2024): 64,722 (maximum accounting presentation); $5,410,112 .
- RSAs (2/7/2023): 34,732; $2,903,248 .
- PSUs (2/7/2023): 17,366; $1,451,582 .
- RSAs (2/8/2022): 7,936; $663,370 .
- PSUs (2/8/2022): 7,936; $663,328 .
- Additional PSUs (4/6/2022): 21,348; $1,784,438 .
- Options: Company reports no outstanding options under equity plan as of Dec 31, 2024 .
Vesting pressure signals:
- RSAs: time-based, 50% vesting on the 2nd and 3rd anniversaries of grant; these events can trigger tax‑withholding share surrenders by the company (recorded as treasury shares) .
- CSRUs: monthly cash settlement through Feb 2027 (no share sales required; no dilution) .
- DSUs: “hold-to-retirement,” deferring payout until qualified retirement; forfeitable for cause; designed to reduce near‑term selling pressure and enhance retention .
Employment Terms
- Employment agreement: A CEO letter agreement governed pay terms through 2024 (2024 salary $1.5M; annual equity grants totaling $3.75M; 150% bonus target); it expired after 2024, providing the Board flexibility going forward .
- Severance & Change-in-Control (CIC) Plan: Double-trigger CIC. If terminated in a Transaction Event termination, cash severance equals:
- CEO: 3x (base salary + annual bonus); other NEOs: 2x; plus prior-year earned bonus, pro‑rata target bonus, up to 24 months COBRA, and equity per participation agreement (accelerated/settled per plan terms) .
- Non‑CIC involuntary termination (without Cause): 1.5x base salary; pro‑rata target bonus or average of last three years (greater of); up to 24 months COBRA; equity continues to vest for one year post-separation .
- Illustrative CIC payout values (as of 12/31/2024 assumptions): Vecchione total $24.87M (cash severance $4.50M; bonus $2.745M; stock awards accelerated $17.59M; benefits $34,892) .
- Covenants: Non‑compete applies for Qualified Retirement or CIC Termination; non‑solicitation and confidentiality covenants in equity agreements (one year non‑solicit) .
- Clawback: Dodd‑Frank compliant policy to recoup incentive compensation for financial restatements (3 years lookback) .
- No tax gross‑ups on severance/CIC; payments reduced if needed to avoid excise tax unless better after-tax outcome to pay full amount .
Board Governance (dual-role context)
- Board service: Director since 2007; currently serves on the Finance & Investment Committee (all independent except Vecchione) .
- Independence: The Board determined all director nominees are independent except Vecchione (as CEO) .
- Leadership structure: Chair and CEO roles are separated; independent Chair Bruce D. Beach; five executive sessions of independent directors were held in 2024 .
- Attendance: In 2024, each director attended at least 75% of Board and committee meetings .
Performance & Track Record
- 2024 highlights: Net income $787.7M; EPS $7.09; CET1 11.3%; TBV/share $52.27 (+11.9% YoY); deposit growth $11B; net revenue $3.2B; PPNR $1.1B .
- Pay versus performance: Company TSR (value of $100 initial investment) was $163 in 2024 vs $126 in 2023 and $110 in 2022, outperforming the peer TSR index ($131 in 2024) .
- Shareholder support: Say‑on‑pay approval >95% at 2024 annual meeting .
Compensation Committee Analysis
- Committee: Independent; chaired by Robert P. Latta; members include Beach, Jammet, Johnson, Segedi, Snyder .
- Consultant: Willis Towers Watson provides independent advice; committee retains sole hiring authority; no conflicts identified .
- Peer group (2024): 19 banks including Fifth Third, Huntington, M&T, Regions, East West, Zions, Webster, Synovus, Wintrust, Pinnacle and others; reviewed annually to reflect Company growth .
- 2024 design changes: Removed overlapping EPS metrics across STI/LTI; introduced relative ROE with CET1 governor in PSUs; added cash‑settled RSU component (30% of LTI) to address retention and dilution, and “Hold to Retirement” DSUs for LFI readiness and leadership stability .
Related Party Transactions and Policies
- Family employment: Certain family members of Vecchione and other executives are employed; overseen by non‑related executives and the Governance Committee under a Related Party Transactions Policy .
- Regulation O lending: Director/officer loans made in ordinary course on market terms; board approvals and compliance with regulation .
- Legal proceedings: No material legal proceedings involving directors or executive officers disclosed .
Equity and Award Vesting Detail (Selected, for context)
| Award Type | Grant Date | Unvested/Unearned (#) | Market Value ($) | Vesting Notes |
|---|---|---|---|---|
| DSU (Hold-to-Retirement) | 06/17/2024 | 33,496 | 2,799,931 | Vest later of 1-year and qualified retirement; paid at retirement/death/disability . |
| RSA | 02/06/2024 | 12,945 | 1,082,073 | 50% vests on 2nd and 3rd anniversaries . |
| PSU (2024–2026) | 02/06/2024 | 64,722 | 5,410,112 | 75% ROE with CET1 governor; 25% relative TSR . |
| RSA | 02/07/2023 | 34,732 | 2,903,248 | Time‑based vesting . |
| PSU (2023–2025) | 02/07/2023 | 17,366 | 1,451,582 | Performance cycle in progress . |
| RSA | 02/08/2022 | 7,936 | 663,370 | Time‑based vesting . |
| PSU (2022–2024) | 02/08/2022 | 7,936 | 663,328 | Cycle certified at 0% payout . |
| PSU (Special 2022) | 04/06/2022 | 21,348 | 1,784,438 | Performance-based . |
Investment Implications
- Alignment: CEO holds substantial equity and is subject to a stringent 5x salary ownership guideline, no hedging/pledging (with limited exceptions), and a robust clawback; LTI shifted toward relative ROE and CET1 discipline, aligning with capital strength and peer-relative performance .
- Retention risk: 2024 “Hold-to-Retirement” DSUs (deferred until qualified retirement) plus CSRUs (monthly cash vesting) are explicitly retention-oriented as WAL prepares for Large Financial Institution (LFI) status; these structures reduce near-term selling pressure and dilution but embed long-dated value—supportive of continuity under Vecchione .
- Near-term selling/overhang: Time-based RSAs vest in lumps at 2 and 3 years (e.g., 2024 grants in 2026/2027), which can drive periodic tax-related share surrenders; CSRUs settle in cash monthly through Feb 2027 (no share sales); PSUs are performance-contingent and may pay 0–200% depending on ROE/TSR and CET1 .
- Change-in-control economics: CEO has a 3x salary+bonus multiple under CIC termination with equity vesting mechanics; this is meaningful but standardized in regional banking; investors should factor potential dilution/cash cost in strategic scenarios .
- Governance mitigants: Independent Chair, regular executive sessions, >95% say-on-pay support, independent compensation committee with external consultant reduce dual‑role risks (CEO + director) .
- Execution/trend watch: 2024 EPS missed bonus threshold despite strong balance sheet and deposit metrics; redesigned PSUs sharpen focus on ROE and capital quality. Continued delivery on LFI readiness, asset quality (office CRE watchlist), and mortgage/servicing dynamics will drive PSU outcomes and credibility of pay-for-performance .
Note: From December 2024 to April 15, 2025, Vecchione was on a temporary medical leave and returned as CEO; continuity plans were executed with the CFO serving as interim CEO—no incremental 2024 pay for the interim role—suggesting bench strength and board oversight .