SOUTHSIDE BANCSHARES INC
For the period ended May 15, 2024. Filed Mar 27, 2024.
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May 15, 2024 · Filed Mar 27, 2024
Contents
Annual Incentive Program
The Company's Annual Incentive Program (“AIP”) provides the Company's most senior executive officers with an opportunity to earn cash awards based on achievement of performance measures established by the Committee. We believe a significant amount of executive compensation should be contingent on Company performance. The AIP formalizes this philosophy for our top executives by providing a cash incentive for the attainment of profitable growth and stable financial operating conditions.
Performance measures include quantitative performance goals and a qualitative scorecard. Performance measures are selected based on the role of the participant and their contributions to the Company. For the CEO, CFO, CLO and COO, performance measures selected were Earnings Per Share (“EPS”), Loan Growth, Return on Average Tangible Common Equity (“ROATCE”) and qualitative scorecard. Performance measures selected for the CCO were EPS, ROATCE, Non-Performing Assets (“NPAs”), and qualitative scorecard.
Weightings are used to differentiate the relative importance or priority of the performance measures. Each participant is assigned a weighting for each performance measure by the Committee, with a total weighting of 100%. Each performance measure is weighted a minimum of 5%, with the total quantitative performance goals weighted 75%, and the qualitative scorecard weighted 25%. The payout for performance measures ranges from minimum threshold of 50%, target of 100% and maximum of 150%. Payout for performance between the minimum threshold, target and maximum is calculated on a straight line basis, and performance below the minimum threshold results in no payout.
Each participant is assigned a target award by the Committee, calculated as a percentage of base salary for the program year, which represents 100% target payout of all performance measures. For 2023, the Committee evaluated the AIP and increased the weighting of the target payout for certain NEOs as follows:
| AIP 2022 | AIP 2023 | |
|---|---|---|
| Name | Target as a % of Salary | Target as a % of Salary |
| Lee R. Gibson | 45.0% | 50.0% |
| Julie N. Shamburger | 37.5% | 42.5% |
| Tim Alexander | 32.5% | 32.5% |
| Brian K. McCabe | 32.5% | 37.5% |
| T. L. Arnold, Jr. | 32.5% | 40.0% |
The qualitative scorecard represents 25% of total performance, the committee sets scorecard goals specific to each participant at the beginning of the program year. Such goals include developing new programs, succession coaching, developing talent and other strategic initiatives.
See the 2023 Grants of Plan-Based Awards table below for Threshold, Target and Maximum amounts for the NEOs under the AIP.
The following table presents the performance measures and performance goals for the NEOs determined by the committee, as well as the actual results and payout as a % of the target for 2023:
| Performance Measure · Threshold · Target · Maximum · 2023 · Actual Payout as a % of Weighted Target | |||||||
|---|---|---|---|---|---|---|---|
| 50% Payout · 100% Payout · 150% Payout · Results | |||||||
| EPS | $3.15 | $3.50 | $4.03 | $3.10 | (1) | —% | |
| Loan Growth | 7.00% | 9.00% | 11.00% | 9.09% | 102.3% | ||
| NPAs as a % of Total Assets | 0.35% | 0.14% | 0.10% | 0.05% | 150.0% | ||
| ROATCE | 17.32% | 19.24% | 22.13% | 17.60% | (1) | 57.3% | |
| Qualitative Scorecard | Above Target | 135%(2) 130%(3) | |||||
(1) Net income was adjusted for net securities losses, net of tax, in the amount of $8.6 million for the purpose of this calculation.
(2) Payout for Lee R. Gibson, Julie N. Shamburger, Tim Alexander and T. L. Arnold, Jr. was 135%.
(3) Payout for Brian K. McCabe was 130%.
The following table presents for each NEO weightings for performance measures, total payout as a percentage of base salary, and total payout for 2023:
| Performance Measure | Performance Measure Weighting | ||||
|---|---|---|---|---|---|
| Gibson · Shamburger · Alexander · McCabe · Arnold | |||||
| EPS | 40% | 40% | 40% | 40% | 40% |
| Loan Growth | 15% | 15% | 20% | 15% | N/A |
| ROATCE | 20% | 20% | 15% | 20% | 15% |
| NPAs as a % of Total Assets | N/A | N/A | N/A | N/A | 20% |
| Scorecard | 25% | 25% | 25% | 25% | 25% |
| Target Payout as a % of Base Salary | 50.0% | 42.5% | 32.5% | 37.5% | 40.0% |
| Total Payout as a % of Target Payout | 60.5% | 60.5% | 62.8% | 59.3% | 72.3% |
| Total Payout ($) | $245,092 | $119,139 | $113,264 | $79,716 | $108,371 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.