DEF 14A of Umb Financial Corp
Filed Mar 13, 2024 · FY20230001193125-24-066457
Our Board of Directors
Our Board of Directors
Compensation Committee
| • | recommending to the Board the compensation of non-employee directors of UMB; |
2023 DIRECTOR COMPENSATION
2023 DIRECTOR COMPENSATION For their service on the Board during 2023, non-employee directors received an annual retainer of (1) $55,000 in cash and (2) fully vested UMB stock having, on the grant date, a value equal to $70,000 for our Lead Independent Director, and $65,000 for all other directors. No separate fee is paid for attendance at meetings of the Board. Directors who are also employees of UMB receive no separate compensation for serving on the Board. In addition, for 2023, the Lead Director received an annual retainer of $25,000 in cash and the Chairs of each of the Committees receive an annual cash retainer in the following amounts: Audit Committee—$24,000, Risk Committee—$18,000, Compensation Committee—$18,000, and Governance Committee—$13,000. The non-Chair members of the Audit Committee, the Compensation Committee, the Governance Committee, and the Risk Committee each received additional annual cash retainers of $12,000, $9,000, $6,500 and $9,000, respectively. All cash retainers are paid quarterly and in arrears. The total compensation received by UMB’s non-employee directors for 2023 is reflected in the following table:
2023 DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Total ($) | | Robin C. Beery | 82,046 | 64,914 | 146,960 | | Janine A. Davidson | 70,546 | 64,914 | 135,460 | | Kevin C. Gallagher | 76,046 | 64,914 | 140,960 | | Greg M. Graves | 93,031 | 69,921 | 162,952 | | Alexander C. Kemper (3) | 41,326 | 64,914 | 106,240 | | Gordon E. Lansford III | 88,046 | 64,914 | 152,960 | | Timothy R. Murphy | 76,046 | 64,914 | 140,960 | | Tamara M. Peterman | 70,546 | 64,914 | 135,460 | | Kris A. Robbins | 85,046 | 64,914 | 149,960 | | L. Joshua Sosland | 70,546 | 64,914 | 135,460 | | Leroy J. Williams, Jr. | 73,046 | 64,914 | 137,960 |
2023 DIRECTOR COMPENSATION
| (1) These are the total fees earned during 2023, including an amount equal to the stub cash portion of the equity retainer for 2023 that was paid during 2024. |
2023 DIRECTOR COMPENSATION
| (2) Amounts reflect the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Information about the assumptions made in the valuation of equity awards is included in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024, under the heading “Accounting for Stock-Based Compensation,” in Note 1, Summary of Significant Accounting Policies, and in Note 11, Employee Benefits. The amount includes only the equity retainer earned in 2022 and issued on January 27, 2023. |
2023 DIRECTOR COMPENSATION
| (3) Mr. Kemper resigned from the Company’s Board of Directors, effective August 18, 2023. |
PROPOSAL #1—ELECTION OF DIRECTORS
PROPOSAL #1—ELECTION OF DIRECTORS
Robin C. Beery
Robin C. Beery
Robin C. Beery
| | Ms. Beery has 30 years of experience in financial services and asset management, with strong knowledge of traditional and alternative investment products and specialized expertise in B2B and B2C distribution, brand strategy and reputation management, and product marketing and packaging. Ms. Beery served as Executive Vice President, Head of US Distribution, for Janus Capital Group (now Janus Henderson Investors) a publicly traded asset-management company, from September 2009 until her retirement from Janus in August 2014. She also served as CEO and President of the Janus Mutual Funds business during that period and was a member of the Janus Executive Committee from 2003 to 2014. In her capacity leading US Distribution, Ms. Beery had oversight of sales, client service, product, marketing, and corporate communications. From April 2003 to September 2009, she served as Executive Vice President, Chief Marketing Officer for Janus Capital Group, and was the President of the Janus Foundation from |
Robin C. Beery
2000 to 2014, overseeing the firm’s philanthropic endeavors and community relations. Ms. Beery has served as an independent fund board trustee for the Hartford Multi-Factor Exchange-Traded Funds (formerly branded Lattice Strategies) since December 2014, the Hartford Exchange-Traded Funds since December 2016, the Hartford Mutual Funds since May of 2017, and the Hartford Schroders Private Opportunities Fund since July of 2023, and is a member of the Investment Committee and Chair of the Nominating and Governance Committee. Ms. Beery also serves as a senior business leader at ArrowMark Partners, an investment management boutique with specialized expertise in private and alternative credit and small cap equity strategies, since March 2015.
Janine A. Davidson
Janine A. Davidson
Janine A. Davidson
| | Janine A. Davidson, PhD, has served as president of the Metropolitan State University of Denver, Colorado’s third largest public university and only access-oriented University in the state, since July of 2017. As president, she is responsible for the University’s strategic direction, financial well-being and daily operations, serving nearly 20,000 graduate and undergraduate students. From March 2016 through January 2017, she served as the 32nd undersecretary of the United States Navy. In that role, Dr. Davidson was responsible for much of the operational and budgetary considerations for the United States Department of the Navy and Marine Corps, including prioritization of research, development and procurement, readiness, modernization and the health and well-being of military and civilian personnel and families. Dr. Davidson's prior professional experience includes: Senior Fellow, Defense Policy at the Council on Foreign Relations from January 2014 through March 2016, Adjunct Professor at Georgetown University |
Janine A. Davidson
from January 2015 through May 2015, Assistant Professor at George Mason University from August 2012 to January of 2014, and various civilian policy positions in the Department of Defense from April 2009 through March 2012. Dr. Davidson began her career as an Air Force officer, global cargo pilot, and aviation and aerobatics flight instructor with the U.S. Air Force Academy. Dr. Davidson brings to the Board over 30 years of academic, civilian and military service, with expertise in the areas of organizational leadership, higher education, defense and public policy. She is a fellow in the National Academy of Public Administration and a life member of the Council on Foreign Relations. She is also a member of the Secretary of State’s Foreign Affairs Advisory Board and the Chair of the Secretary of Defense’s Defense Policy Board.
Kevin C. Gallagher
Kevin C. Gallagher
Kevin C. Gallagher
| | Mr. Gallagher is currently Chairman of Gallagher Industries, LLC, a private holding company of lower middle-market companies, a position he has held since 2005. He has entrepreneurial experience and marketing experience gained from serving as chief executive officer of a large complex diversified operation with companies in both the manufacturing and service industries. He also brings to the Board community-relations experience and experience in investments, mergers, and acquisitions. |
Greg M. Graves
Greg M. Graves
Greg M. Graves
| | Mr. Graves previously served as Chairman and Chief Executive Officer of Burns & McDonnell, a consulting engineering company headquartered in Kansas City, Missouri, with offices and operations throughout the United States, until his retirement in December 2016. Prior to being named Chairman, he served as the President and Chief Executive Officer from October 2003 until December 2008; from January 2003 through October 2003, he served as the President and Chief Operating Officer. He served as General Manager of that company’s Energy Division from November 1997 through June 2001 and as President of its Energy Group from July 2001 through December 2002. Mr. Graves’s experience as chief executive officer of a large engineering company, with multiple offices and projects located throughout the United States and abroad, gives him leadership skills and growth management skills. He also has human-resources experience gained through his management of a large number of professionals and managers. |
J. Mariner Kemper
J. Mariner Kemper
J. Mariner Kemper
| | Mr. Kemper has served as the Chairman and Chief Executive Officer of UMB since May 2004. Mr. Kemper was President of UMB from November 2015 until January 2024. He was the Chairman and Chief Executive Officer of the Bank between December 2012 and January 2014, the Chairman of UMB Bank Colorado, n.a. (a prior subsidiary of UMB) between 2000 and 2012, and the President of UMB Bank Colorado, n.a. from 1997 to 2000. As the Chairman and Chief Executive Officer of UMB for the past nearly 19 years, Mr. Kemper brings to the Board skills in leadership, consensus building, and the implementation of UMB’s key strategies. He has detailed knowledge of UMB’s key business and operational strategies and branding and possesses operations experience and knowledge of every aspect of UMB's business. He also has specialized knowledge of the investments, banking, and financial-services industries as well as extensive community-relations experience, with involvement in civic and business |
J. Mariner Kemper
organizations in Kansas City and Colorado.
Gordon E. Lansford III
Gordon E. Lansford III
Gordon E. Lansford III
| | Mr. Lansford has served as President and Chief Executive Officer of JE Dunn Construction Company, a national commercial contractor headquartered in Kansas City, Missouri, since January 2014. Prior to being named as President and CEO, he served as Chief Financial Officer from 1998 to December 2013, and before then, he served as the Director of Internal Audit. Prior to his employment with JE Dunn, Mr. Lansford was employed by KPMG LLP as a Certified Public Accountant. Mr. Lansford was previously a member of the board of directors for the Bank until January 2016, when that board’s membership was consolidated with that of the Company’s. Mr. Lansford has relevant experience overseeing operations, finance, legal, risk management, investments, human resources and information technology. |
Gordon E. Lansford III
| | Mr. Murphy has been the Executive Chairman of Murphy-Hoffman Company (“MHC”) since January 2017, holding responsibilities associated with company oversight and strategic growth initiatives. Prior to this time, and beginning in 1989, Mr. Murphy served as the Chief Executive Officer. MHC is a large, privately-owned heavy and medium duty truck dealer in North America. In addition, Mr. Murphy has served on numerous supplier councils to the trucking industry, including two terms as Chairman of the North American Kenworth Dealer Council. Mr. Murphy brings significant organizational, business expertise, including specialized knowledge of UMB, having served as a board member for the Bank from 1999 through January 2016. |
Tamara M. Peterman
Tamara M. Peterman
Tamara M. Peterman
| | Tamara (Tammy) M. Peterman, MS, RN, FAAN, was appointed as Executive Vice President, Chief Operating Officer and Chief Nursing Officer of the University of Kansas Health System in July 2007. In July 2018, Ms. Peterman assumed the additional role of President, Kansas City Division. In her roles with the University of Kansas Health System, Ms. Peterman oversees the operations of all health system locations within the Kansas City metropolitan area, assuring key operational goals related to quality, service, people, growth and financial stability are achieved. In collaboration with others on the senior executive team, Ms. Peterman also provides strategic operational oversight and specific strategic guidance for nursing services and day-to-day operations across all locations of the health system. Ms. Peterman has relevant experience overseeing operations, financial performance, regulatory, and risk management. She also provides specialized industry knowledge related to healthcare. |
Kris A. Robbins
Kris A. Robbins
Kris A. Robbins
| | Mr. Robbins was previously employed by Security Benefit Corporation (“Security Benefit”) and its companies from 1997 until his retirement in February 2010, serving as its Chief Executive Officer for over 10 years, and as Chairman and CEO for 6 years. During his tenure, Security Benefit managed over $40 billion in assets and provided annuities, mutual funds, exchange- traded funds, retirement plans, and business-processing services throughout the United States. Following his retirement from Security Benefit, Mr. Robbins co-founded and is currently the Chief Executive Officer of Clearleaf Finance, a hedge fund manager that invests in short duration, specialty assets involved in liens, private asset-based finance and factoring, and President of its servicing arm, Purestone Loan Services. He also provides private-equity, angel-investment, and advisory services through KARobbins LLC. Mr. Robbins once served on the board and chaired the audit committee of Compliance Assurance Corporation (PA) until its sale in |
Kris A. Robbins
November 2012 to Stone River Risk and Compliance. Mr. Robbins also served on the board and audit committee of Key Health from April 2011 through 2015. Mr. Robbins brings to the Board financial literacy skills, developed in over 30 years of professional experience and education in accounting and financial management. In addition, he has significant experience and knowledge relating to operations, investments, risk and capital management, gained from his leadership of large, highly regulated financial-services business that had significant growth and changes in products (including public company experience). Mr. Robbins provides specialized industry knowledge in key areas of investments, risk management, and insurance as well.
L. Joshua Sosland
L. Joshua Sosland
L. Joshua Sosland
| | Mr. Sosland has served as the President of Sosland Publishing Co., Kansas City, Missouri, since July 2015 and Vice President of Sosland Companies, Inc., Kansas City, Missouri, since 1993. Established in 1922, the Sosland Companies are primarily engaged in trade publications for the baking, flour-milling, and food-processing industries. Mr. Sosland has also served as editor of Milling & Baking News since 2000 and editor or editor-in-chief of Food Business News since 2004. Mr. Sosland contributes significant investment experience and expertise, as well as board and governance expertise, with more than 20 years of service on our Board and several years of service on the trust policy committee of the Bank. The economic analytical skills developed from his formal education, as well as his publishing experience covering and analyzing the food-processing industry, enable him to provide valuable analyses of investment and acquisition activities. Through his many years of service on and prior leadership of the Board's |
L. Joshua Sosland
compensation committee, Mr. Sosland also has detailed knowledge of the development and implementation of UMB’s executive incentive-compensation plans. Leroy J. Williams, Jr.
L. Joshua Sosland
| | Mr. Williams is the founder and Chief Executive Officer of CyberTekIQ, LLC, a consulting firm which partners with clients to maximize business performance through smart technology investments and the deployment of information security best practices, a position he has held since October 2016. He previously served as the Global Chief Information Officer of Ball Corporation (NYSE: BLL) from May 2005 until July 2016. Mr. Williams brings to the Board over 25 years of experience in managing technology innovation that is designed to maximize business returns across multiple industries, including in the manufacturing, public-sector, telecommunications, and financial-services industries. Mr. Williams also brings to the Board valuable expertise in the areas of cybersecurity and enterprise risk management and experience in managing large, complex transformational efforts on a global scale. Mr. Williams has served on the Board of Directors of Molson Coors Beverage Company since April 2022. |
L. Joshua Sosland
The Board recommends that shareholders vote FOR the election of each of the 11 nominees to our Board.
Objectives of Our Compensation Program
| • | Incentive compensation should reward consistent and sustained performance over the long term. A substantial amount of compensation should vest over multi-year performance periods that are designed to align the interests of the Executive Officers and shareholders. We believe this focus on longer performance periods also helps promote retention and business continuity amongst the Executive Officers. |
Compensation Best Practices
| What We Do | | Our programs and practices continue to: | | ✓ Link a significant portion of variable compensation to Company and stock performance | | ✓ Employ a balanced compensation structure using fixed and variable, short-term and long-term, and cash and equity components | | ✓ Impose significant stock ownership guidelines for the CEO (6 times base salary) and NEOs (3 times base salary) | | ✓ Require an annual assessment of incentive compensation risk | | ✓ Be informed by an independent compensation consultant hired and overseen by the Compensation Committee | | ✓ Be subject to a comprehensive clawback policy that complies with SEC and NASDAQ requirements | | What We Don’t Do | | × No individual employment agreements or change-in-control agreements | | × No single-trigger change-in-control benefits | | × No excise tax gross-ups upon change-in-control | | × No hedging or short selling | | × No excessive perquisites |
The Role of the Compensation Consultant
The Role of the Compensation Consultant Our Compensation Committee engaged Aon’s Human Capital Solutions practice, a division of Aon (“Aon”), otherwise known as McLagan, as its executive compensation consultant during 2023. In this capacity, Aon advised the Compensation Committee on the structure and design of our executive compensation program, including the amount and mix of compensation for 2023 and 2024, on the Company’s comparative peer group, on regulatory updates, and director compensation. While Aon reports to the Compensation Committee, it also works with the Company’s Human Resources department and senior management to facilitate Compensation Committee work. Representatives of Aon attended all the meetings of the Compensation Committee in 2023 and thus far in 2024. The Compensation Committee considered factors relevant to Aon’s independence under SEC and NASDAQ rules and has determined that Aon is independent under these factors.
Use of Competitive Data
Use of Competitive Data In order to make market-informed decisions on compensation, the Compensation Committee relied on peer group compensation information provided by Aon. Aon provided the Compensation Committee with comparative analyses based on (1) proxy data from UMB’s identified peer group and (2) industry data from Aon’s proprietary surveys. Our peer group was selected on the basis of asset size, mix of business, annual revenue, market capitalization, employees, and other factors judged by the Compensation Committee to be relevant. The peer group approved and used by the Compensation Committee during 2023 included 15 companies:
Use of Competitive Data
| Associated Banc-Corp | Hancock Whitney Corporation | | BOK Financial Corporation | Old National Bancorp | | Cadence Bank | Pinnacle Financial Partners | | Columbia Banking System Inc. | Prosperity Bancshares Inc | | Commerce Bancshares Inc. | Synovus Financial Corporation | | Cullen/Frost Bankers Inc. | Trustmark Corporation | | F.N.B. Corporation | Webster Financial Corporation | | Fulton Financial Corporation | |
Short-Term Cash Incentive Compensation
Short-Term Cash Incentive Compensation Short-Term Cash Incentive—Plan Overview Short-term incentive compensation generally takes the form of an annual cash bonus and is used to reward superior performance primarily over the short term through the Short-Term Incentive Compensation Plan (as adopted by the Board, the “Short-Term Incentive Plan” or “STIP”). Short-term incentive compensation awards are designed to motivate the NEOs to achieve, and exceed, Company-wide goals and their individual annual performance goals, and to otherwise support the Company’s key strategic initiatives. The Compensation Committee believes that these short-term incentive compensation goals and awards are drivers of valuation and align with the Company’s strategy. They also align the NEO’s financial interest with the interest of the Company because the awards are tied to the NEO’s performance against established goals and are funded based on the performance of the Company and/or a business line. In February 2023, the Compensation Committee approved the use of two performance metrics to determine the STIP pool: the Company’s core pre-provision net revenue (“Core PPNR”) and the Company’s net charge-offs divided by average loans (“NCOs”). These are the same performance metrics that were used the previous year. The Compensation Committee determined that these performance metrics appropriately allowed for formulaic measurement of the Company’s operational performance against the Company’s annual budget. The Compensation Committee also considered that these performance metrics would equitably isolate measurement of the Company’s actual performance from the impact of macro dynamic factors such as changes to, or the adoption of, accounting standards and regulations which may impact financial performance but do not reflect actual operational performance. The 2023 annual short-term incentive compensation program (the “2023 STIP”), established a target short-term award pool that was weighted 80% to Core PPNR achievements and weighted 20% to NCO achievements. The target amounts for Core PPNR and NCOs were established using the Company’s projected budget for 2023. The Compensation Committee has exclusive authority to determine the Core PPNR by taking the Company’s financial results under generally accepted accounting principles and adjusting the results for gains, losses and circumstances that the Compensation Committee deems to be fair and appropriate such as (1) a gain or loss for the sale of non-earning assets; (2) a gain or loss on the sale or discontinuance of a business, product or service; (3) a gain or loss on branch closings; (4) expenses associated with the acquisition of a business; (5) severance costs; (6) litigation reserves; and (7) other large, non-recurring items unrelated to core results. Once the Core PPNR and NCOs are determined, the actual bonus pool is proportionally adjusted, either increased or decreased, based on the following chart with linear interpolation of the pool amounts falling between the levels set:
Short-Term Cash Incentive Compensation
| Measure | Actual Performance as a Percentage of Financial Target | Actual Result (in millions) | STIP Bonus Pool Funding as a % of the Target Bonus Pool | | Core PPNR—80% Weight | Less than 80% | >$482.2 | 0% | | | 80% | $482.2 | 33.33% | | | 100% | $602.7 | 100% | | | 120% or Greater | $723.2 | 200% | | NCOs—20% Weight | Less than 80% | >0.32% | 0% | | | 80% | 0.32% | 33.33% | | | 100% | 0.27% | 100% | | | 120% or Greater | 0.22% | 200% |
Short-Term Cash Incentive Compensation
The Compensation Committee also employed a discretionary plan governor to the 2023 Program in which the Compensation Committee would make a discretionary reduction in the short-term award pool if, for 2023, the Company’s operating leverage fell below 1.0%, and it would make a discretionary increase to the short-term award pool if the Company’s operating leverage exceeded 5.0%. Corporate Financial Performance Financial performance for 2023 was challenging following the failure of three regional banks in March. Market pressure contributed to interest expense substantially exceeding budgeted amounts as the Company worked to shore up liquidity and retain deposits. In line with the 2023 STIP plan, PPNR was adjusted to exclude the one-time FDIC special assessment that was imposed to restore the bank insurance fund following the two bank failures. The Company also took steps to mitigate the increased expenses and earned a Core PPNR of $526.4 million. The Company also experienced exceptional credit quality as NCOs were only 0.05%. UMB’s 2023 results compared to the 2023 STIP are set forth in the table below. The Compensation Committee also determined that the Company’s operating leverage was (0.5%) for 2023, which indicated that a negative discretionary adjustment should be considered to the 2023 short-term bonus pool. The Compensation Committee decided not to make the negative discretionary adjustment due to the impact of unprecedented actions leading to the March 2023 regional bank failures, and UMB management’s swift response to mitigate the impacts of these events through targeted actions to shore up liquidity, cut non-interest expenses, further discipline credit underwriting, and retain deposits.
Short-Term Cash Incentive Compensation
| 2023 STIP—CORPORATE FINANCIAL PERFORMANCE | | | | | | | | | | Financial Metric | Threshold | Target | Maximum | Actual | Score | Payout Percentage | Weight | Weighted Percentage | | Core PPNR ($ in millions) | $482.2 | $602.7 | $723.2 | $526.4 | 87.4% | 57.8% | 80% | 46.3% | | NCOs | 0.32% | 0.27% | 0.22% | 0.05% | 100% | 200.0% | 20% | 40.0% | | Final Funding Percentage (based on the funding calculation) | | | | | | | | 86.3% |
Short-Term Cash Incentive Compensation
2023 Final Payment Determination Each NEO’s individual target 2023 STIP award was established at the February 2023 Compensation Committee meeting as a percentage of their base salary as of December 31, 2023. The Compensation Committee increased the STIP target for each of the NEOs to reflect their achievements, market considerations, and alignment with peers. In determining each NEO’s actual 2023 STIP award, the Compensation Committee considered the extent to which the NEO’s performance objectives were achieved and determined the level of payout from the target. The CEO’s performance and award were evaluated exclusively by the Compensation Committee while the performance and recommended awards for the other NEOs were evaluated by each NEO’s manager and approved by the Compensation Committee. The maximum possible individual award under the 2023 STIP is 200% of the individual target award. The performance objectives for each of the NEOs are set forth in the table below.
Short-Term Cash Incentive Compensation
| Named Executive Officer | Performance Objectives | | J. Mariner Kemper | Objectives were tied directly to the performance of the Company due to his role and responsibility for the Company’s overall performance including financial results against budget, succession planning, diversifying revenue streams, increasing efficiency, individual leadership and strategic vision. | | Ram Shankar | Objectives were tied to his (1) responsibility for planning, controlling, and directing UMB’s accounting and financial reporting systems, (2) ability to advise the CEO and other senior management regarding accounting and financial matters, and (3) management and advice on key, cross functional merger and acquisition deals and ongoing improvements to existing processes and procedures relating to merger and acquisition projects. |
Short-Term Cash Incentive Compensation
| Named Executive Officer | Performance Objectives | | James D. Rine | Objectives were tied to his (1) management, strengthening, and advancement of the performance and culture of the organization, (2) retention and development of direct reports, and (3) defense of the core deposit funding. | | Shannon A. Johnson | Objectives were tied to her (1) management, strengthening, and advancement of the performance and culture of the organization, (2) retention and development of direct reports, and (3) oversight and development of a new 3-year corporate strategy and the ESG Committee. | | Thomas S. Terry | Objectives were tied to his (1) maintenance of credit quality below a specified historical threshold, (2) development of borrower relationships, and (3) development of and succession planning for regional credit officers. |
Short-Term Cash Incentive Compensation
While the Compensation Committee believed that each of the NEOs met or exceeded their performance objectives during the performance period, the STIP awards for each of the NEOs, other than Mr. Terry, were directly tied to the overall financial results of the Company and were limited to the funding amount of 86.3% of target. Mr. Terry’s STIP award was increased to 93.0% of target to recognize his role in maintaining the outstanding credit quality of the Company despite the challenging environment. The final tabulations for the STIP awards are set forth below:
Short-Term Cash Incentive Compensation
| 2023 STIP AWARDS | | | | | Name | Annual Target Award | Individual Performance Percentage (from Target) | Total Cash Incentive Award | | J. Mariner Kemper | $1,207,500 | 86.3% | $1,042,073 | | Ram Shankar | $275,417 | 86.3% | $237,685 | | James D. Rine | $660,000 | 86.3% | $569,580 | | Shannon A. Johnson | $295,323 | 86.3% | $254,864 | | Thomas S. Terry | $249,850 | 93.0% | $232,360 |
Long-Term Incentive Compensation
Long-Term Incentive Compensation Long-Term Incentive Compensation—Overview UMB offers equity awards to the officers, employees and directors of the Company under the UMB Financial Corporation Omnibus Incentive Compensation Plan (the “Omnibus Plan”). The Omnibus Plan provides the Compensation Committee flexibility in the types of equity awards that may be utilized to link the financial rewards to the recipient with increases in Company shareholder value. The Omnibus Plan provides the following features that protect the shareholder interest:
Long-Term Incentive Compensation
| • | Prohibition on liberal share recycling; |
Long-Term Incentive Compensation
| • | Fungible share pool; |
Long-Term Incentive Compensation
| • | Additional award limits for non-employee directors; |
Long-Term Incentive Compensation
| • | No automatic accelerations upon a change in control; and |
Long-Term Incentive Compensation
| • | Express prohibition on repricing or cashing out underwater options and stock appreciation rights. |
Long-Term Incentive Compensation
Long-term incentive compensation in 2023 for the NEOs took the form of service-based restricted share units (“Service Units”) and performance-based restricted share units (“Performance Units”). The Compensation Committee granted awards of Service Units that vested on a shorter, 3-year schedule in 2023 for retention purposes and also so that the vesting schedule for such Service Units would be in line with the 3-year performance period of Performance Unit awards. Dividend equivalent units are accrued on the unvested Service Units and are distributed in UMB Shares to the same extent that the Service Units vests. No dividend equivalent units are accrued with respect to the Performance Units.
Long-Term Incentive Compensation
| 2023 Long-Term Incentive Awards | | | | | Award Type | Vesting Period | Rationale | Award Mix | | Service Units | Vests 1/3 every year for 3 years | To promote retention of the employees, including NEOs | 40% | | Performance Units | Vests at the conclusion of the three-year performance period (2023-2025) | To align the interests of certain employees, including NEOs, with the interests of the shareholders by encouraging forward-looking balanced risk- taking, increasing the value for shareholders over the long term | 60% |
Long-Term Incentive Compensation
All equity awards are valued as of the grant date, using the fair market value of the underlying stock as represented by the closing price of the Company’s shares on the grant date. Grants of equity awards are generally approved in a manner that satisfies the exemption from Section 16(b) of the Exchange Act. Performance Units: Our Compensation Committee established a performance standard for the Performance Units that is based 50% on the Company’s three-year cumulative core after-tax earnings per share (“3-year EPS”) and 50% on the Company’s average return on tangible common equity (“ROTCE”) excluding the impacts of accumulated other comprehensive income (“AOCI”) over the three-year performance period. The Compensation Committee believes that the use of 3-year EPS aligns with shareholders to show UMB’s ability to grow profits over time and the use of ROTCE demonstrates UMB’s ability to efficiently allocate capital to generate profits. AOCI was excluded from the calculation of ROTCE because average common equity can be inflated or deflated depending on unrealized gains or losses in the bond portfolio and results in no actual economic impact to the Company. Removing AOCI keeps the ROTCE calculation neutral to volatility from interest rate movements and allow for more focus on core results. The 2023 performance thresholds for the 3-year EPS and ROTCE were established using the budget that was approved by the Board in January 2023. The 2024 and 2025 target amounts were determined using management’s 3-year forecast. We do not disclose forward-looking goals for our multi-year incentive programs because the Company does not provide forward-looking guidance to our investors with respect to multi-year periods and further because the goals are considered competitively sensitive information. It has been our practice to disclose multi-year performance goals in full after the close of the applicable performance period. At the end of the performance period, the 3-year EPS and ROTCE for the performance period are determined by the Compensation Committee, after consulting (if appropriate) with the Corporate Audit Committee and making such adjustments for material changes in the number of outstanding shares, non-recurring gains or losses, and other circumstances as the Committee may determine fair and appropriate. Without limiting the Compensation Committee’s authority or discretion, adjustments to the Company’s GAAP earnings per share may be made for (i) gain or loss on sales of non-earning assets, (ii) gain or loss on the sale or discontinuance of a business, product or service, (iii) expenses associated with severance costs, (iv) litigation reserves, or (v) any other large non-recurring gains or losses unrelated to pre-tax operating income. The threshold level for both the 3-year EPS and the ROTCE is 80% of the target level. At the end of the performance period, achieving the target level for each performance metric would result in 100% of the Performance Units vesting; reaching the threshold level of 80% of each performance metric would result in 50% of the Performance Units vesting; and achieving or exceeding the optimum level of 130% of each performance target would result in the payout of 200% of the Performance Units vesting. If actual performance related to a metric falls above or below the target level, but above the threshold level, the percentage of Performance Units earned with respect to that metric would be interpolated on a linear sliding scale, not to exceed 200% funding for 130% of total target performance. The weighted amounts earned with respect to each metric are then combined to determine the actual number of Performance Units earned. Failing to meet the threshold level would result in 0% of the Performance Units being earned.
Long-Term Incentive Compensation
| 2023 LONG-TERM PAYOUTS | | | | | 3-Year Actual Performance as a Percentage of the Payout Metric | 2023 Long-Term Payout as a Percentage of the Payout | | Below Threshold Payout | Less than 80% | 0% | | Threshold Payout | 80% | 50% | | Target Payout | 100% | 100% | | Maximum Payout | 130% or Greater | 200% |
Long-Term Incentive Compensation
2023 Annual Long-Term Incentive Grant In February 2023, the Compensation Committee approved annual equity awards to all the NEOs. The value of each award is expressed as a percentage of the NEO’s base salary at the time of the award. The value of the equity awards for each NEO are based on comparative peer-group or industry data and the NEO’s position, strategic value, leadership, responsibilities, competency, and experience. The awards for the NEOs were comprised of 40% Service Units and 60% Performance Units and are further detailed below. In particular, the Compensation Committee considered Mr. Rine’s increased responsibilities within the Company, and his value to the organization when setting his 2023 LTIP Award.
Long-Term Incentive Compensation
| 2023 ANNUAL LTIP EQUITY AWARD | | | | | Name | 2023 LTIP Percentage (as a percentage of salary) | Value of Service- Based Award | Value of Performance- Based Award | | J. Mariner Kemper | 260% | $1,040,000 | $1,560,000 | | Ram Shankar | 70% | $113,859 | $170,789 | | James D. Rine | 200% | $492,000 | $738,000 | | Shannon A. Johnson | 75% | $120,540 | $180,810 | | Thomas S. Terry | 50% | $80,080 | $120,120 |
Other Benefits and Perquisites
Other Benefits and Perquisites Each Executive Officer is offered standard benefits, including health insurance, disability insurance, life insurance, 401(k) plan matching contributions, and profit-sharing contributions, which are provided on the same terms to all of UMB’s associates who have met minimum service requirements, except to the extent that a benefit (such as disability insurance) is calculated as a percentage of salary. We regularly assess these benefits against those of our peer group to remain competitive. The Compensation Committee generally approves limited perquisites when appropriate to attract or retain talent, when a particular benefit inures to UMB, or when the value to the Executive Officers or other officer is greater than UMB’s cash outlay. For example, club dues and fees are paid on behalf of certain executive officers and other designated officers who are charged with meaningful business generation responsibilities and who appreciate the administrative convenience associated with a corporate-paid membership. Similarly, affording a modest allowance to the Executive Officers and other senior officers for tax preparation and financial planning (1) enables UMB to ensure that no potential conflict of interest arises in a senior officer’s choice of such a professional, (2) can result in cost savings for such officers based on the number of officers using a common professional, and (3) is administratively convenient for the participating officers. The Company has also paid minimal tax gross-ups for Executive Officers for work-related travel and associated expenses which could include spousal/guest participation. The Company also provides a limited perquisite to cover personal airfare expenses of its CEO, which the Company believes is line with practices within out peer group. See “Compensation Tables—2023 Summary Compensation” later in this Proxy Statement for detailed information about the perquisites provided to the Named Executive Officers.
No Employment Agreements
No Employment Agreements The Compensation Committee generally disfavors executive employment agreements, and no NEO is a party to an employment agreement.
Performance Units Certified in January 2024 as Having Vested under the 2021 Long-Term Program
Performance Units Certified in January 2024 as Having Vested under the 2021 Long-Term Program In February 2021, the Compensation Committee approved the performance metrics for the issuance of Performance Units that were based 50% on a target 3-year EPS (2021, 2022, and 2023) of $16.13 and 50% on the Company’s average ROTCE target of 8.52% over the 3-year performance period. The threshold, target and maximum payouts of the 2021 Performance Units are the same threshold, target, and maximum payouts which were used under the 2023 Long-Term Program described previously in this Proxy Statement in the table entitled “2023 Long-Term Payouts.” In January 2024, the Compensation Committee reviewed UMB’s financial results from 2021 through 2023 and certified the following results:
Performance Units Certified in January 2024 as Having Vested under the 2021 Long-Term Program
| 2021 LTIP—CORPORATE FINANCIAL PERFORMANCE | | | | | | | | | | Financial Metric | Threshold | Target | Maximum | Actual | Score | Payout Percentage | Weight | Weighted Percentage | | 3-YEAR EPS | $12.90 | $16.13 | $20.97 | $23.35 | 144.7% | 200.00% | 50% | 100.00% | | ROTCE | 6.82% | 8.52% | 11.08% | 14.31% | 168.0% | 200.00% | 50% | 100.00% | | Final Payout % | | | | | | | | 200.00% |
Performance Units Certified in January 2024 as Having Vested under the 2021 Long-Term Program
Based on these conclusions, the NEOs received the following shares of Company stock free of restrictions and risk of forfeiture: (a) 30,568 shares to Mr. Kemper, (b) 4,182 shares to Mr. Shankar, (c) 10,220 shares to Mr. Rine, (d) 3,904 shares to Ms. Johnson, and (e) 2,864 shares to Mr. Terry.
Additional Payments or Benefits
Additional Payments or Benefits The NEOs, in addition to other officers, may be entitled to receive accelerated payments or other awards under the Long-Term Incentive Plan, or the Short-Term Incentive Plan (such as death, disability, retirement, or a change in control of UMB). See “Potential Payments upon Termination or Change in Control” later in this Proxy Statement for additional information.
Executive Compensation Actions in 2024
| Executive | Base Salary | | | STIP | | LTIP Grant | | | | 2023 as of 12/31/23 | 2024 | Increase | 2023 (Determined and Paid in February 2024) | 2024 (Determined and Paid in February 2025) | 2023 (Determined Fixed in February 2023) | 2024 (Determined and Fixed In February 2024) | | J. Mariner Kemper | $1,050,000 | $1,081,500 | 3.0% | $1,042,073 (86.3% of Target from a Target of 115% of 12/31/23 Salary) | Target of 125% of 12/31/24 Salary | Value of $2,600,000 | Value of $2,750,000 | | Ram Shankar | $423,719 | $449,142 | 6.0% | $237,685 (86.3% of Target from a Target of 65% of 12/31/23 Salary) | Target of 90% of 12/31/24 Salary | Value of $284,648 | Value of $508,463 | | James D. Rine | $660,000 | $706,200 | 7.0% | $569,580 (86.3% of Target from a Target of 100% of 12/31/23 Salary) | Target of 110% of 12/31/24 Salary | Value of $1,230,000 | Value of $1,320,000 | | Shannon A. Johnson | $421,890 | $434,547 | 3.0% | $254,864 (86.3% of Target from a Target of 70% of 12/31/23 Salary) | Target of 90% of 12/31/24 Salary | Value of $301,350 | Value of $421,890 | | Thomas S. Terry | $416,416 | $428,908 | 3.0% | $232,360 (93% of the Target from a Target of 60% of 12/31/23 Salary) | Target of 70% of 12/31/24 Salary | Value of $200,200 | Value of $312,312 |
COMPENSATION POLICIES AND PRACTICES RELATING TO RISK MANAGEMENT
COMPENSATION POLICIES AND PRACTICES RELATING TO RISK MANAGEMENT At least annually, an incentive compensation risk assessment is prepared by our Corporate Risk Services and Human Resources Departments and is presented to the Compensation Committee. This risk assessment is designed to ascertain whether our incentive compensation arrangements generate incentives that properly balance risk and reward, are compatible with effective controls and risk management (including the Interagency Guidance on Sound Incentive Compensation Policies issued by the federal banking agencies), are overseen through a strong corporate governance structure, and ultimately ensure that UMB’s safety and soundness are adequately protected. In February 2024, as with prior years, the Compensation Committee reviewed and deliberated on (1) the annual incentive compensation risk assessment, (2) the Executive Compensation Principles, (3) UMB’s compensation policies and practices, (4) whether or how UMB’s compensation policies and practices may incent an employee to engage in higher risk activities, (5) whether or how any short term incentives may have an impact on long term risk, (6) whether or how claw backs or hold-backs are utilized or deemed appropriate, (7) whether or how changes in UMB’s risk profiles may require changes in its compensation policies and practices, (8) how to appropriately monitor UMB’s compensation policies and practices to ensure that its risk management objectives are being met, and (9) the existence and effectiveness of any controls, policies, or practices that may be in place to mitigate or balance the risks associated with UMB’s compensation policies or practices. Based on this review, the Compensation Committee concluded that the compensation policies and practices relating to Executive Officers and other employees of UMB and its subsidiaries do not create risks that are reasonably likely to have a material adverse effect on UMB.
2023 SUMMARY COMPENSATION
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) (2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) (3) | Total ($) | | J. Mariner Kemper | 2023 | 1,038,463 | - | 2,599,827 | - | 1,042,073 | - | 107,411(4) | 4,787,774 | | Chairman and CEO | 2022 | 988,464 | - | 2,499,964 | - | 1,890,000 | - | 50,151 | 5,428,579 | | | 2021 | 939,666 | - | 1,999,885 | - | 1,995,000 | - | 40,512 | 4,975,063 | | Ram Shankar | 2023 | 419,778 | - | 284,570 | - | 237,685 | - | 3,483(4) | 945,516 | | Executive Vice President | 2022 | 403,031 | - | 273,588 | - | 414,773 | - | 13,783 | 1,105,175 | | and Chief Financial Officer | 2021 | 391,001 | - | 273,607 | - | 293,250 | - | 18,265 | 976,123 | | James D. Rine | 2023 | 649,616 | - | 1,229,929 | - | 569,580 | - | 56,425(4) | 2,505,550 | | Vice Chairman and President; | 2022 | 601,501 | - | 695,498 | - | 1,051,650 | - | 58,604 | 2,407,253 | | President and CEO of UMB | 2021 | 551,539 | - | 668,670 | - | 1,001,700 | - | 48,188 | 2,270,097 | | Bank, n.a. | | | | | | | | | | | Shannon A. Johnson | 2023 | 417,256 | - | 301,283 | - | 254,864 | - | 25,647(4) | 999,050 | | Executive Vice President | 2022 | 395,617 | - | 664,201 | - | 470,106 | - | 21,681 | 1,551,605 | | and Chief Administrative Officer | 2021 | 372,693 | - | 255,393 | - | 450,000 | - | 15,777 | 1,093,863 | | Thomas S. Terry | 2023 | 412,720 | - | 200,098 | - | 232,360 | - | 43,725(4) | 888,903 | | Chief Credit Officer and Executive Vice President, UMB Bank, n.a. | | | | | | | | | |
2023 GRANTS OF PLAN-BASED AWARDS
2023 GRANTS OF PLAN-BASED AWARDS This table summarizes each grant of an award made to a NEO in 2023 under the 2023 Short-Term Incentive Program and the 2023 Long-Term Incentive Program. These plans and the grants in 2023 are discussed in more detail in “Compensation Discussion and Analysis” earlier in this Proxy Statement.
2023 GRANTS OF PLAN-BASED AWARDS
| Name | Grant Date | Estimated Future Payouts under Non-Equity Incentive Plan Awards Target ($) (1) | Estimated Future Payouts under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (3) | Grant Date Fair Value of Stock Awards ($) | | | | | Threshold (#) | Target (#) | Maximum (#) | | | | J. Mariner Kemper | 2/10/23 | 1,207,500 | 8,587 | 17,174 | 34,348 | 11,449 | 2,599,827 | | Ram Shankar | 2/10/23 | 275,417 | 940 | 1,880 | 3,760 | 1,253 | 284,570 | | James D. Rine | 2/10/23 | 660,000 | 4,062 | 8,125 | 16,250 | 5,416 | 1,229,929 | | Shannon A. Johnson | 2/10/23 | 295,323 | 995 | 1,990 | 3,980 | 1,327 | 301,283 | | Thomas S. Terry | 2/10/23 | 249,850 | 661 | 1,322 | 2,644 | 881 | 200,098 |
2023 GRANTS OF PLAN-BASED AWARDS
| (1) Except where noted, these amounts reflect the target award levels approved by the Compensation Committee on February 10, 2023, under the 2023 Short-Term Incentive Program for all NEOs. Subject to the previously mentioned 80% thresholds for the plan funding, there are no thresholds at the individual level, and the maximum award is 200% of target for individuals under the STIP. The Compensation Committee has the discretion to increase or decrease each NEO’s compensation from the target award level shown based on bonus pool availability and the NEO’s individual performance. |
2023 GRANTS OF PLAN-BASED AWARDS
| (2) These numbers reflect grants of Performance Units made under the Omnibus Plan in 2023. |
2023 GRANTS OF PLAN-BASED AWARDS
| (3) These numbers reflect grants of Service Units made under the Omnibus Plan in 2023. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END This table summarizes unexercised options, stock that has not vested, and equity incentive-plan awards for each NEO outstanding as of December 31, 2023. The market value of each stock award was computed by multiplying the closing market price of UMB stock on December 29, 2023, by the applicable number of shares of UMB stock shown in the table for the award.
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | Option Awards | Stock Awards | | | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) (1) | Market Value of Shares or Units of Stock that Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or other Rights that Have Not Vested (#) | Equity Incentive Plan Awards Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | J. Mariner Kemper | 27,964 | 75.25 | 2/2/2027 | | | | | | | | | | 3,097(2) | 258,754 | | | | | | | | 5,319(3) | 444,402 | 15,284 (4) | 1,276,978 | | | | | | 10,063(5) | 840,764 | 14,573 (6) | 1,217,574 | | | | | | 11,665(7) | 974,611 | 17,174 (8) | 1,434,888 | | Ram Shankar | | | | 412(2) | 34,423 | | | | | | | | 727(3) | 60,741 | 2,091 (4) | 174,703 | | | | | | 1,101(5) | 91,989 | 1,595 (6) | 133,262 | | | | | | 1,276(7) | 106,610 | 1,880 (8) | 157,074 | | James D. Rine | | | | 902(2) | 75,362 | | | | | | | | 1,779(3) | 148,635 | 5,110 (4) | 426,941 | | | | | | 2,800(5) | 233,940 | 4,054 (6) | 338,712 | | | | | | 5,518(7) | 461,029 | 8,125 (8) | 678,844 | | Shannon A. Johnson | 2,709 | 51.42 | 2/11/2025 | | | | | | | 2,967 | 47.68 | 2/5/2026 | | | | | | | 1,712 | 75.25 | 2/2/2027 | | | | | | | | | | 339(2) | 28,323 | | | | | | | | 679(3) | 56,730 | 1,952 (4) | 163,090 | | | | | | 1,056(5) | 88,229 | 1,530 (6) | 127,832 | | | | | | | | 4,439 (9) | 370,878 | | | | | | 1,352(7) | 112,960 | 1,990 (8) | 166,265 | | Thomas S. Terry | | | | 284(2) | 23,728 | | | | | | | | 499(3) | 41,691 | 1,432 (4) | 119,644 | | | | | | 774(5) | 64,668 | 1,122 (6) | 93,743 | | | | | | 3,048(10) | 254,660 | | | | | | | | 897(7) | 74,944 | 1,322 (8) | 110,453 |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (1) Dividend equivalent units are accrued on the unvested Service Units and are distributed in UMB Shares to the extent that the Service Unit vests. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (2) These are Service Units issued under the Omnibus Plan that vested 100% on February 11, 2024. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (3) These are Service Units issued under the Omnibus Plan that vested 50% on February 12, 2024. The final 50% will vest on February 12, 2025. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (4) These are Performance Units issued under the Omnibus Plan that vested as to service on January 1, 2024. The Compensation Committee determined on January 29, 2024, that the performance standard under the Omnibus Plan had been achieved and that 200.00% of the Performance Units had been earned. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (5) These are Service Units issued under the Omnibus Plan that vested 50% on February 11, 2024. The next 25% will vest on February 11, 2025. The final 25% will vest on February 11, 2026. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (6) These are Performance Units that will vest as to service under the Omnibus Plan on January 1, 2025, and will be earned to the extent that the performance standard is achieved. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (7) These are Service Units issued under the Omnibus Plan that vested 33% on February 10, 2024. The next 33% will vest on February 10, 2025. The final 34% will vest on February 10, 2026. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (8) These are Performance Units that will vest as to service under the Omnibus Plan on January 1, 2026, and will be earned to the extent that the performance standard is achieved. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (9) These are Performance Units that will vest as to service under the Omnibus Plan on June 30, 2025, and will be earned to the extent that the performance standard is achieved. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (10) These are Service Units issued under the Omnibus Plan. 50% will vest on July 29, 2025. The final 50% will vest on July 29, 2026. |
2023 OPTION EXERCISES AND STOCK VESTED
2023 OPTION EXERCISES AND STOCK VESTED This table summarizes each exercise of stock options, stock appreciation rights, and similar instruments and each vesting of stock (including restricted stock, restricted stock units, and similar instruments) during 2023 for each of the Named Executive Officers on an aggregated basis.
2023 OPTION EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) | | J. Mariner Kemper | - | - | 46,867 | 4,110,259 | | Ram Shankar | - | - | 6,187 | 542,405 | | James D. Rine | - | - | 28,351 | 2,469,905 | | Shannon A. Johnson | 1,036 | 19,092 | 5,100 | 447,060 | | Thomas S. Terry | - | - | 5,763 | 480,012 |
2023 OPTION EXERCISES AND STOCK VESTED
| (1) These numbers include shares acquired through the reinvestment of dividends or distributions on restricted units during the vesting period. Also includes Performance Units from 2020 that vested at 200.00% of target. |
2023 NONQUALIFIED DEFERRED COMPENSATION
2023 NONQUALIFIED DEFERRED COMPENSATION UMB maintains a deferred compensation plan that permits the Named Executive Officers and other specified participants, at their option, to defer a portion of their compensation payable for a calendar year until retirement, termination, or the occurrence of another specified event. UMB has an unsecured obligation to pay each deferred amount at the applicable time together with a rate of return equal to the yield produced by a mutual fund selected by the participant from among those available under the Profit-Sharing Plan. UMB does not match any amount that a participant may choose to defer. If a participant has an account that terminates upon retirement under the plan, the participant may choose to have the benefit paid out in a lump sum or in installments over two to ten years. Specified date accounts are paid in a lump sum or in installments, as elected by the participant, over two to five years. If employment is terminated other than through retirement, the amounts in all accounts are paid in a lump sum.
2023 NONQUALIFIED DEFERRED COMPENSATION
| Name | Executive Contributions in Last FY ($) (1) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) (2) | | J. Mariner Kemper | - | - | - | - | | Ram Shankar | 208,638 | 165,971 | - | 976,772 | | James D. Rine | - | 66,850 | (95,550) | 361,289 | | Shannon A. Johnson | - | - | - | - | | Thomas S. Terry | 111,435 | 176,496 | (73,516) | 1,131,168 |
2023 NONQUALIFIED DEFERRED COMPENSATION
| (1) Amounts reported in the contributions column above were reported as compensation in the 2023 Summary Compensation Table. |
2023 NONQUALIFIED DEFERRED COMPENSATION
| (2) Amounts reported in the aggregate balance column for 2023 were previously reported as compensation to the relevant NEO in the applicable summary compensation table for the applicable prior fiscal year, but only to the extent the NEO was a Named Executive Officer for such reporting year. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Payments upon Termination
Payments upon Termination All of the Named Executive Officers are employees at will and may be terminated at any time. No NEO is entitled to receive any payment or award upon termination, except as described in this section in circumstances involving a change in control of UMB, death or disability, or a qualified retirement. Each of these payments and awards is available to all participants in the applicable plan. Any additional payment or benefit that a NEO would receive in the ordinary course is available generally to all UMB associates.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As noted in the CD&A, one of the Company’s compensation best practices is that we pay for performance. That means that the majority of the Company’s executive compensation is variable and is closely tied to both individual performance and the financial performance of the Company.
Pay Versus Performance Table
Pay Versus Performance Table The table below provides investors with standardized data on executive compensation in a format prescribed by the SEC and that is intended to be easier to link to company performance than the amounts already disclosed in the Summary Compensation Table (“
CAP
| Pay Versus Performance Table | | | | | | | | | | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (2) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($ in millions) | Core PPNR (Company- Selected Measure) ($ in millions) | | | | | | | UMB Financial Corporation | S&P U.S. BMI Banks Index | | | | 2023 | $4,787,774 | $4,275,242 | $1,334,755 | $1,234,301 | $131.21 | $104.72 | $350.0 | $526.4 | | 2022 | $5,428,579 | $3,837,418 | $1,626,806 | $1,260,086 | $128.34 | $94.38 | $431.7 | $510.3 | | 2021 | $4,975,063 | $10,809,136 | $1,408,473 | $2,322,534 | $160.35 | $116.82 | $353.0 | $438.1 | | 2020 | $4,655,997 | $6,346,146 | $1,401,075 | $1,581,586 | $102.75 | $86.25 | $286.5 | $350.8 |
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE The annual total compensation for our median employee for 2023 was $89,771 and $4,787,774 for our CEO. The resulting ratio of our CEO’s pay to the pay of our median employee for 2023 was 53.33 to 1. To identify our median employee for 2023, we examined the 2023 W-2 wages for all individuals, excluding our CEO, who were employed by us on December 31, 2023. We included all employees, whether employed on a full-time, part-time or seasonal basis. We did not make any cost-of-living adjustments in identifying the median employee. We also did not make any assumptions, adjustments, or estimates with respect to total cash compensation, and we did not annualize the compensation for any full-time employees that were not employed by us for all of 2023. We calculated the median employee’s annual total compensation using the same methodology we use for our Named Executive Officers as set forth in the “2023 Summary Compensation Table” in this Proxy Statement.