DEF: Cullen/Frost Bankers Sets 2026 Annual Meeting Agenda

Cullen/Frost Bankers, Inc. announces its 2026 Annual Meeting of Shareholders to elect directors, approve executive compensation, and ratify auditors.

Summary

• The Annual Meeting of Shareholders will be held on Wednesday, April 29, 2026, at 10:30 a.m., Central Time, in San Antonio, Texas.
• Shareholders will vote on the election of fourteen director nominees to serve a one-year term expiring at the 2027 Annual Meeting.
• A nonbinding advisory vote on executive compensation for 2025 will be held.
• Shareholders will also vote to ratify the selection of Ernst & Young LLP as independent auditors for the fiscal year that began January 1, 2026.
• The record date for shareholders entitled to vote at the Annual Meeting was the close of business on March 4, 2026.
• The company achieved net income available to common shareholders of approximately $642 million for fiscal year 2025, exceeding budgeted expectations by 22%.
• Annual incentives paid to Named Executive Officers (NEOs) for 2025 performance were at 122% of target.
• Base salaries for NEOs increased for 2026, with CEO Phillip D. Green's salary rising 3% to $1,300,000 and CFO Daniel J. Geddes's salary increasing 10% to $550,000.
• The 2025 Say on Pay vote received over 96% approval from shareholders.
• Long-term incentive awards granted in 2025 consisted of 25% performance stock units (PSUs) and 75% restricted stock units (RSUs).
• PSUs granted in 2022, with a performance period ending December 31, 2025, resulted in a payout of approximately 77% of target due to 16.2% growth in Average Pre-Provision Net Revenue.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing positively due to strong financial performance exceeding expectations, high shareholder approval of compensation, and robust corporate governance practices, indicating a well-managed and stable institution.

Positives

• Achieved strong financial performance in 2025 with net income of approximately $642 million, exceeding budgeted expectations by 22%.
• Annual incentives for Named Executive Officers for 2025 performance were paid at 122% of target, reflecting strong company results.
• Received over 96% shareholder approval for the 2025 executive compensation programs, indicating strong investor confidence.
• Executive compensation programs are heavily performance-based, with 83% of the CEO's and 70% of other NEOs' average annualized target compensation at-risk.
• Long-term incentives constitute a significant portion of executive compensation (55% for CEO, 38% for other NEOs), aligning management with long-term shareholder value.
• Board and committee attendance was robust in 2025, with nearly all directors attending 100% of meetings.
• Maintains strong corporate governance practices, including a majority independent Board and a comprehensive Code of Business Conduct and Ethics.
• Prohibits pledging and hedging of company stock for directors and executive officers.
• Implemented a clawback policy for executive officers in the event of accounting restatements.
• All eligible Named Executive Officers are in compliance with robust stock ownership guidelines.
• Demonstrates a commitment to corporate citizenship and sustainability, overseen by the Corporate Governance and Nominating Committee.
• Successfully refreshed the Board by adding directors with expertise in information technology, cybersecurity, financial matters, and risk management.
• Has increased its common stock dividend for 30 consecutive years.
• Recognized for Highest Customer Satisfaction with Consumer Banking in Texas for the 16th Consecutive Year by J.D. Power and Associates.
• Is the #1 All-Time Award Leader with 471 Greenwich Awards since 2009.

Negatives

• In a hypothetical change-in-control scenario, Mr. Stead's severance benefits would be cut back under the 'net-better' provision due to excise tax, while Mr. Rhodes would receive full benefits but incur a $685,738 excise tax.
• Actual Performance Compared to Budgeted Expectations for 2023 was 83%, indicating underperformance against budget for that year.

Risks

• Cybersecurity poses a significant risk to the company and third parties with which it interacts, including vendors and customers.
• Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those projected.
• The company is exposed to various types of risks, including credit, operational, compliance/regulatory, liquidity, and reputation risks, which are overseen by the Risk Committee.

Future Outlook

The company anticipates continuing to administer a conservative executive compensation program consistent with its corporate philosophy. It also highlights its significant multi-year expansion of physical locations in major Texas markets, representing a commitment to organic growth.

Management Comments

• "We will grow and prosper, building long-term relationships based on top-quality service, high ethical standards and safe, sound assets."
• "We believe everyone is significant at our Company and successful performance occurs when everyone works together as a team with common goals."
• "Because we believe Cullen/Frost should be a safe and sound place to do business, we strive to avoid excessive risk and do not offer executive compensation programs that would encourage the taking of such risks."
• "The consistency and continuity of our management team serves to enhance our conservative yet profitable risk profile."
• "We appreciate a robust tradition of not only solid financial performance, but of strengthening and enhancing the communities we serve and making peoples lives better."

Industry Context

StockSavvy.ai notes that Cullen/Frost Bankers' strong financial performance and consistent customer satisfaction awards (J.D. Power, Greenwich) position it as a leader in regional banking, particularly within Texas. The emphasis on conservative risk management and long-term relationships aligns with a prudent banking strategy, potentially appealing to investors seeking stability in a volatile financial market. The company's focus on organic growth through physical expansion in Texas markets contrasts with some industry trends towards digital-only expansion, suggesting a commitment to its relationship-based banking model.

Comparison to Industry Standards

• Cullen/Frost's 16th consecutive year of highest customer satisfaction with consumer banking in Texas (J.D. Power) significantly outperforms many national and regional banks that struggle with consistent customer loyalty.
• The company's accumulation of 471 Greenwich Awards since 2009 for service to business clients demonstrates a sustained excellence in commercial banking, a benchmark few competitors achieve over such a long period.
• The CEO to median employee pay ratio of 99:1 is within the typical range for large financial institutions, though it is higher than some smaller, community-focused banks.
• The executive compensation structure, with 83% of CEO pay and 70% of other NEO pay being at-risk and performance-based, aligns with best practices for public companies, similar to peers like Comerica Incorporated or Zions Bancorporation, NA, which also link a substantial portion of executive pay to performance metrics.
• The use of a 'net-better' cutback provision in the Change-in-Control Severance Plan, rather than a full tax gross-up, is a more shareholder-friendly approach compared to some legacy plans in the industry that still include full gross-ups.

Management Changes

Corporate Governance

Related Party Transactions

• Lease arrangements exist between Frost Bank and Clearfork Retail Venture, LLC, an entity in which director Mr. Edwards holds a 1.56% direct and 1.56% indirect interest. Lease payments totaled $282,090 in 2025, with future payments of $432,870.
• Payments of $1,006,471 were made to Pape-Dawson for engineering services in 2025, where director Mr. Samuel G. Dawson is CEO and co-owner with a 7.7% interest. This amount represents less than 2% of Pape-Dawson's consolidated total revenue for 2025.
• Frost Bank paid $217,767 to James Avery Craftsman, Inc. for service pins in 2025, where director Dr. Avery is Chairman and holds a 44% interest.
• Credit relationships and non-credit banking/financial products/services relationships with independent directors and their affiliates were conducted in the ordinary course of business and on substantially similar terms as with unrelated persons.

Stakeholder Impact

• Shareholders benefit from strong financial performance, consistent dividend increases, and robust corporate governance practices aimed at long-term value creation and alignment of executive interests.
• Employees benefit from competitive compensation, comprehensive health and retirement benefits, and a corporate culture emphasizing integrity, caring, and excellence, including opportunities for charitable involvement through a Donor Advised Fund.
• Customers benefit from the company's commitment to top-quality service, high ethical standards, and safe, sound assets, as evidenced by high customer satisfaction ratings.
• Communities benefit from the company's active involvement through lending, investing, grants, and volunteerism, as well as initiatives like the Donor Advised Fund.
• Management benefits from competitive compensation, long-term incentives, and a stable environment that fosters continuity and a conservative risk profile.

Next Steps

• Shareholders are to vote on director nominees, executive compensation, and auditor ratification at the Annual Meeting on April 29, 2026.
• The Board will continue overseeing strategy, operations, and risk management.
• The Corporate Governance and Nominating Committee will continue evaluating board composition and identifying director candidates.
• The Compensation and Benefits Committee will continue reviewing and making recommendations on Board and executive compensation.
• The company will continue its multi-year expansion of physical locations in major Texas markets.

Key Dates

Recommendation

This filing is a routine proxy statement detailing corporate governance, executive compensation, and proposals for the upcoming annual meeting. While it confirms strong 2025 financial performance and positive shareholder sentiment on executive pay, it does not introduce new material financial or strategic information that would significantly alter the company's valuation or warrant an immediate change in investment posture. The company demonstrates stable operations and sound governance, suggesting a 'hold' for existing investors.

Keywords

Cullen/Frost Bankers, CFR, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Director Election, Audit Committee, Risk Management, Cybersecurity, Financial Performance, Banking, Texas, Shareholder Vote, SEC Filing