Frost CEO sees pay cut in pandemic
Compensation drops by nearly $1 million
Cullen/frost Bankers Inc. Chairman and CEO Phil Green’s compensation shrank last year by almost $1 million, part of the San Antonio financial holding company’s belt-tightening as its profits tumbled during the pandemic.
Green pulled in about $3.8 million in total compensation last year, down 20 percent from nearly $4.8 million in 2019. Cullen/frost is the parent company of Frost Bank, the largest regional bank based in San Antonio.
The drop in Green’s compensation resulted in him receiving 67 times the median Frost employee’s compensation of $57,171 last year. He received almost 85 times the median of $56,246 in 2019.
A significantly smaller bonus in 2020 accounted for much of the drop in Green’s compensation. He collected a $226,600 bonus, versus almost $1 million in 2019.
The company earned $324 million last year, short of its expectation of $389 million.
As a result, Green had recommended the company pay annual incentives to its top executives at 20 percent of targeted levels, according to a proxy statement filed Tuesday with the Securities and Exchange Commission.
“The year 2020 brought challenges for us as well as so many other companies,” Frost said in the proxy. “Theses challenges were primarily driven by the global pandemic and compounded by the very low interest rate environment and early 2020 energy price declines.”
Green’s salary remained virtually unchanged at about $1 million in 2020, but last fall he said he and 10 other executives would take 10 percent pay cuts starting Jan. 1. He’s slated to receive an annual salary of $927,000 this year.
Green also is taking a 10 percent cut in bonus this year, while other executives’ bonuses will be trimmed by 5 percent.
“We realize the pressures impacting the banking industry in light of the current and projected economic and interest rate environment and the importance of operating as efficiently as possible,” Green told analysts in October.
The salary and bonus reductions were part of management’s desire to contribute to the “longterm well-being of the company,” he added.
Compensation for the other named executives in the proxy fell anywhere from about 19 percent to 21 percent last year.
CFO Jerry Salinas’ total compensation of slightly more than $1.3 million last year, about $317,000 below his 2019 compensation.
Paul Bracher, Cullen/frost’s president and Frost Bank’s chief banking officer, received just shy of $1.4 million, or $344,000 below his 2019 compensation.
Frost Bank President Patrick Frost’s 2020 compensation was just under $1.3 million, or
$346,600 less than in 2019.
William Perotti, Frost Bank’s chief risk officer, received more than $1.2 million last year, a drop of about almost $329,000.
The cost-cutting wasn’t limited to executive compensation.
The bank eliminated 68 jobs in January, representing about 1.4 percent of its 4,700-person workforce.
Frost sold its interest in a corporate jet that had been available for executives’ business travel.
As a result of reduced travel during the pandemic and the “challenging economic environment,” Frost opted to ditch its partial ownership stake in the jet and instead use a charter service “on an as-needed basis.”
Green was allowed personal use of the aircraft last year, something Frost’s board “encouraged” as “an additional safeguard during the early stages of the pandemic,” according to the proxy.
Green’s aircraft use was lumped in with other perks paid for by Frost that amounted to $23,270 last year. Other benefits included in that figure were club memberships, home security services and personal financial planning — standard fare for many top executives.
Meanwhile, Frost’s directors elected to reduce the cash retainer fees they receive from the company by 10 percent. That took effect Jan. 1.
Director Graham Weston, cofounder of Rackspace Technology Inc., for instance, was paid $71,250 in fees last year. He also received stock awards valued at $70,000.
The proxy statement disclosed various related-party transactions between Frost and Weston.
Weston controls the partnership that owns Frost’s headquarters building in downtown San Antonio. He also has a 21 percent “indirect ownership interest” in the partnership. For this reason, Weston is not considered an independent director by New York Stock Exchange rules, Frost disclosed.
Frost paid about $8.3 million in rent payments to the partnership last year. It still has about $180.4 million in payments to make over the life of the lease.
The bank also is the lead lender on the construction loan made to the partnership. The bank loaned about $80 million of the $149 million loan. About $128 million was outstanding as of March 1, with Frost’s portion about $68 million.
Frost also has a deal to sell two parcels of land to Weston Urban LLC, another entity Weston owns and controls, for about $6.5 million. No sale date on those parcels has been disclosed.
The transactions were entered into prior to Weston joining Frost’s board in 2017.
COLLEGE STATION — Shelby Metcalf once explained why he had no problem recruiting to a then-all-male military institute in Texas A&M in the early 1960s.
“You just told ’em you were looking for basketball players,” Metcalf said with a shrug, “not lovers.”
Abe Lemons once described the difference between coaching and … most other jobs.
“Finish last in your league and they call you an idiot,” said Lemons, Texas’ basketball coach from 1976-82. “Finish last in medical school and they call you a doctor.”
Then-ut baseball coach Augie Garrido had no qualms predicting the NCAA’S intent when determining whether Texas or the University of Houston, the latter which sported the better record that season, would host a super regional in 2014.
“If it’s about money,” Garrido said with a wry smile, “we’ll play in Austin.”
Post-spoiler alert: The NCAA chose Austin, and the Longhorns advanced to the College World Series. Three years earlier, Garrido had deadpanned why it was important UT had made the CWS in 2011.
“Our fans were getting restless,” he offered in his typical
bemused delivery. “We missed last year.”
The eternally quippable Metcalf, Lemons and Garrido all have since passed on to that coaches’ comedy club in the clouds, but there’s at least one old-school coach in the region still owning the fastest facetiousness in Texas.
A&M women’s basketball coach Gary Blair.
The wit and wisdom of Blair, 75, will again be on a national stage starting at 5 p.m. Monday, when the second-seeded Aggies face No. 15 seed Troy in the opening round of the NCAA Tournament.
A&M (23-2) not only believed it deserved one of the four top seeds as SEC regular-season champion, but the Aggies were mystified they were shoved under the Texas Longhorns’ roof for the opener.
The NCAA Tournament’s first round is being held in San Antonio, San Marcos and Austin because of the COVID-19 pandemic, with the rest of the tournament in San Antonio. Such amusing (to outsiders) situations are when Blair is at his best.
“What else can they do to us?” Blair wondered Monday night of the NCAA Tournament selection committee.
Blair, with a slight grin, also realized the game in the Erwin Center offered the chance for a jab at A&M’S (still) biggest rival and new Longhorns coach Vic Schaefer, his former top assistant at A&M.
“We’re playing in a good arena,” Blair said, “and we won in Austin earlier this year.”
That is the trait Blair has most in common with Garrido, the iconic UT baseball coach who died three years ago this month from complications following a stroke: a super-sharp wit masking a sharper drive to win.
Garrido won five national titles while leading Cal State Fullerton and Texas, while Blair achieved what few figured possible in inheriting the Big 12’s worst basketball program in 2003: a national title in 2011.
Blair didn’t find it easy upon his arrival from Arkansas nearly two decades ago. Early in his first season, he offered four free tickets to a game during an interview on a local radio station. He even gave out his home address for the lucky first four who showed up. Only two tickets were claimed.
Blair and Homer Norton, who coached football from 1934-47, are the lone two A&M coaches to win national titles in the three “major” sports at the university: football, basketball and baseball.
“There won’t be another one (like him),” A&M men’s basketball coach Buzz Williams said of Blair. “There’s no one in my generation who will ever eclipse his achievements. … He’s a treasure not only on the floor, but off the floor.”
Earlier this season a reporter reminded Blair he had defeated Nebraska in the 2010 Big 12 tournament when the Cornhuskers were 30-0 and ranked No. 3.
“How can you be No. 3 in the
country and be 30-0?” responded Blair, before having a little fun at the expense of one of college basketball’s all-time powerhouses. “Who was No. 1 and No. 2, Connecticut?”
The key to keeping a good humor through this long stroll called life?
“Humility — be humble or you’ll stumble,” Blair said. “One of my biggest pet peeves is adults who refuse to admit to mistakes. I (also) read three comic strips per day: Peanuts, Blondie and Beetle Bailey. I can get something out of all three of those. I pull for all the older men and women. … I pull for people who’ve had to go through things.
“I’ve got some (players) who can mimic me pretty good, and they’re usually right on. Sometimes, you just go with the flow, and don’t take life so seriously in non-serious moments. That’s a long-winded answer — but that’s who I am.”