DEF 14A of Covenant Logistics Group, Inc.
Filed Apr 11, 2025 · FY20240001437749-25-011789
TABLE OF CONTENTS
| Narrative to Grants of Plan-Based Awards Table | 34 | | Outstanding Equity Awards at Year-End Table | 35 | | Options Exercised and Stock Vested Table | 36 | | Nonqualified Deferred Compensation Table | 36 | | Pay Ratio Disclosure | 37 | | Pay Versus Performance | 38 | | Director Compensation | 42 | | Narrative to Director Compensation | 42 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 43 | | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 45 | | PROPOSAL 2 – ADVISORY AND NON-BINDING RESOLUTION ON EXECUTIVE COMPENSATION | 45 | | RELATIONSHIPS WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 47 | | Principal Accountant Fees and Services | | | PROPOSAL 3 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 47 | | PROPOSAL 4 – Approval of the AMENDMENT TO the company’s Amended and restated ARTICLES OF INCORPORATION TO INCREASE IN THE SAME PROPORTION THE NUMBER OF AUTHORIZED SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK | 48 | | STOCKHOLDER PROPOSALS | 49 | | OTHER MATTERS | 50 |
PROPOSAL 1 - ELECTION OF DIRECTORS
PROPOSAL 1 - ELECTION OF DIRECTORS At the Annual Meeting, the stockholders will elect nine directors to serve as the Board until our next Annual Meeting of Stockholders or until their successors are duly elected and qualified. Upon the recommendation of the Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”), our Board has nominated for election as directors the following nine individuals: David R. Parker, Dr. Benjamin S. Carson, Sr., Joey B. Hogan, D. Michael Kramer, Bradley A. Moline, Rachel Parker-Hatchett, Tracy Rosser, Herbert J. Schmidt, and W. Miller Welborn. Each nominee is presently serving as a director. The individual qualifications, skills, and experience of the director nominees are discussed in their respective biographies below. Each proxy will be voted as directed on each proxy card; or in the absence of contrary instructions, each proxy will be voted for the election of all director nominees. In the event any director nominee becomes unwilling or unable to serve as a director prior to the vote on Proposal 1 at the Annual Meeting, the shares represented by your proxy will be voted for any substitute nominee designated by the Board, unless you expressly withhold authority to vote your shares for the unavailable nominee or substitute nominee. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES.
NOMINEES FOR DIRECTORSHIPS
NOMINEES FOR DIRECTORSHIPS
Board Skills Matrix
Board Skills Matrix The table below provides information on the qualifications, skills, and experience of our nominees for directorships.
Board Skills Matrix
| | Dr. Carson | Mr. Hogan | Mr. Kramer | Mr. Moline | Mr. Parker | Ms. Parker- Hatchett | Mr. Rosser | Mr. Schmidt | Mr. Welborn | | Public Company Officer or Key Employee | | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | | Financial Reporting | | ✔ | ✔ | ✔ | ✔ | | ✔ | | ✔ | | Industry | | ✔ | | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | | Environmental | | ✔ | | ✔ | ✔ | | ✔ | ✔ | | | Risk Management | ✔ | ✔ | ✔ | ✔ | ✔ | | ✔ | ✔ | ✔ | | Information Security | | ✔ | ✔ | ✔ | | | ✔ | ✔ | | | Governance | ✔ | ✔ | ✔ | ✔ | | | ✔ | ✔ | ✔ | | Strategy Development | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | | Human Capital Management/ Compensation | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | | Communications/Marketing and Sales/Customer Service | | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | | | Technology/ Innovation | ✔ | ✔ | ✔ | ✔ | | | ✔ | ✔ | |
Board Skills Matrix
The lack of a “✔” for a particular item does not mean that the director does not possess that qualification, skill or experience. We look to each director to be knowledgeable in these areas; however, the “✔” indicates that the item is a specific qualification, skill or experience that the director brings to the Board. Information concerning the names, ages, positions with us, tenure as a Company director, and business experience of the nominees standing for election as directors at the Annual Meeting, as well as the specific attributes qualifying each nominee for a directorship, is set forth below. Family relationships between any directors and executive officers, if any, are noted in the relevant biographies. All references to experience with us include positions with our operating subsidiaries and none of the other corporations or organizations referenced in the biographies is a parent, subsidiary, or affiliate of the Company unless otherwise noted. There are no arrangements or understandings between any of the director nominees and any other person pursuant to which any of the director nominees was selected as a nominee. Each of the director nominees has also consented to being named as such in this Proxy Statement and has indicated his/her intention to serve as a director, if elected. David R. Parker, 67, has served as our Chairman of the Board and Chief Executive Officer (“CEO”) since 1994. From our founding in 1985 to February 2016 Mr. Parker served as our President. Mr. Parker is a past director of the Truckload Carriers Association and currently serves on the board of directors of the American Trucking Associations. From 2012 to October 2017, Mr. Parker served as a member of the Trade and Transportation Advisory Council of the Federal Reserve Bank of Atlanta. Mr. Parker has also served as a director or in similar capacities of several religious and civic organizations and serves as general partner of the Parker Family Limited Partnership. The Board believes Mr. Parker’s dedication, trucking experience, general business knowledge, significant leadership ability, and in-depth knowledge of the Company qualify him for his continued service as CEO and Chairman of our Board. Additionally, the Board believes Mr. Parker’s knowledge of the industry continues to be a competitive strength for the Company. Mr. Parker is the father of Ms. Parker-Hatchett. Dr. Benjamin S. Carson, Sr., 73, has served as a director since 2021 and currently serves as a member of our Nominating Committee and Risk Committee. Dr. Carson served as the 17th Secretary of the U.S. Department of Housing and Urban Development (“HUD”) from 2017 to 2021. Dr. Carson is a world-renowned neurosurgeon who prior to serving as HUD Secretary was involved with more than 15,000 surgical procedures and was the recipient of numerous awards, including the Presidential Medal of Freedom, more than 70 honorary doctorate degrees and the Spingarn Medal, the NAACP’s highest honor. Dr. Carson serves on the Board of Directors for D.R. Horton, Inc. (NYSE: DHI), Sinclair, Inc. (NASDAQ: SBGI) and Galectin Therapeutics, Inc. (NASDAQ: GALT). In addition, Dr. Carson previously served on the Board of Directors of both The Kellogg Company (NYSE: K) and Costco Wholesale Corporation (NASDAQ: COST). Dr. Carson is the founder and current Chairman of the American Cornerstone Institute, founder and member of the Board of Directors of Old Glory Bank, and a member of the Board of Directors of the Carson Scholars Fund, an organization he and his wife, Mrs. Candy Carson, founded in 1994. Throughout his distinguished career, Dr. Carson contributed to the field of medicine through the thousands of surgeries he performed and the many leadership positions he held, including serving as Director of the Division of Pediatric Neurosurgery at The Johns Hopkins Medical Institutions from 1984 to 2013 as well a Professor of Neurological Surgery, Oncology, Plastic Surgery, and Pediatrics at The Johns Hopkins Medical Institutions from 1999 to 2013. The Board believes that Dr. Carson’s extensive management, director, leadership, financial, and information security experience make him highly qualified to serve as a member of our Board, our Nominating Committee, and our Risk Committee. Joey B. Hogan, 63, has served as a director since May 2023 and currently serves as a member of our Risk Committee. In June 2023 Mr. Hogan retired after serving as an officer of the Company for more than twenty-five years, most recently as an Executive Vice President (“EVP”) focused on strategic planning, mentoring the leadership team, government relations, and other special projects. Mr. Hogan served as our President from April 2021 to January 2023, and our Principal Financial Officer (“PFO”) between April 2021 and May 2022. Previously, Mr. Hogan served as our Co-President and Chief Administrative Officer (“CAO”) from April 2020 to April 2021 and as our President and Chief Operating Officer (“COO”) from February 2016 to April 2020. From May 2007 to February 2016 Mr. Hogan served as our Senior EVP and COO, as well as President of Covenant Transport, Inc. (“CTI”). Mr. Hogan was our Chief Financial Officer (“CFO”) from 1997 to May 2007, our EVP from May 2003 to May 2007, and a Senior Vice President (“SVP”) from December 2001 to May 2003. From the time he joined us in August 1997 through December 2001, Mr. Hogan served as our Treasurer. Mr. Hogan served as a director and on the Audit Committee of previously publicly traded Chattem, Inc., a consumer products company, from April 2009 through March 2010, and currently serves as an officer of the Truckload Carriers Association. The Board believes Mr. Hogan’s experience and in-depth knowledge of the Company and the transportation and logistics industries, and his previous board experience qualify him to serve as a member of our Board and Risk Committee. D. Michael Kramer, 67, has served as a director since 2020 and currently serves as the Chair of our Audit Committee and as a member of our Compensation Committee. Mr. Kramer has served as the Executive Chairman of Southeastern Trust Company since 2018. Additionally, Mr. Kramer served as Chief Executive Officer of Peak Financial, LLC, a fintech start-up company, between 2019 and October 2022. Mr. Kramer served as the Vice Chairman of Midsouth Bancorp, Inc. from May 2018 until Midsouth’s merger with Hancock Whitney Corporation (NASDAQ: HWC) in September 2019. Mr. Kramer served as President and COO of Atlantic Capital Bancshares, Inc. from November 2015 to December 2017 while the company was publicly traded and was also a member of the Board of Directors of Atlantic Capital from November 2015 to October 2017. Prior to that he served as Chief Executive Officer and President of First Security Group, Inc. and its primary banking subsidiary, FSGBank, N.A. from 2011 through 2015, as Managing Director of Ridley Capital Group from 2010 to 2011, as Director, Chief Executive Officer and President of Ohio Legacy Corporation from 2005 to 2010, and as Chief Operating Officer and Chief Technology Officer of Integra Bank Corporation from 1999 to 2004. Mr. Kramer served as a member of the Board of Directors of the Chattanooga Area Chamber of Commerce Foundation from 2018 to 2021. Mr. Kramer serves as a member of the Board of Directors and Trustee of Covenant College and the Covenant College Foundation, member of the Board of Directors of Patriot Family Homes, LLC, and previously served on the Board of Directors of the University of Chattanooga Foundation. Mr. Kramer has a Bachelor’s Degree from Grove City College and a Master’s in Business Administration from Western Governors University. The Board believes that Mr. Kramer’s extensive experience in leadership in the banking industry qualifies him to serve as a member of our Board, as Chair of our Audit Committee, and as a member of our Compensation Committee.
Board Skills Matrix
Bradley A. Moline, 58, has served as a director since 2003 and currently serves as the Chair of our Nominating Committee and as a member of our Audit Committee. Since October 2002, Mr. Moline has been President and CEO of ALLO Communications, LLC, a telecommunications company with significant minority equity interests held by Nelnet, Inc. (NYSE: NNI) and SDC Capital Partners, LLC. He also serves on the Board of Directors of ALLO Communications, LLC, which has issued publicly traded debt securities. In 2018, Mr. Moline joined the board of National Cable Television Cooperative, Inc., a Kansas nonprofit corporation. Mr. Moline also has been the owner, President, and CEO of Imperial Super Foods, NECO Grocery, and WhiMol, with grocery operations in Nebraska and Colorado, since 2002. From 1994 to 1997, Mr. Moline was our Treasurer and CFO. Mr. Moline also served as CFO of Birch Telecom Inc., a telecommunications company, when the company’s debt securities were publicly traded and previously worked for Ernst & Young, where he was formerly licensed as a CPA. Mr. Moline holds a degree in Business Administration with an emphasis in accounting. In his roles with the Company, Birch Telecom, and Ernst & Young, Mr. Moline gained experience overseeing financial matters and reviewing documents filed with the SEC. The Board believes Mr. Moline's extensive financial and executive experience make Mr. Moline a valued member of our Board. The Board also believes Mr. Moline’s wide array of executive experiences, including from his service as the Company’s CFO, has prepared him well to respond to complex financial and operational challenges. The Board further believes that Mr. Moline’s experience as an executive officer of a public company and a company with publicly traded debt allows him to bring unique and valuable perspective to, and qualifies him to serve as a member of our Board, Chair of our Nominating Committee, and member of our Audit Committee. Rachel Parker-Hatchett, 41, has served as a director since 2020 and currently serves on our Risk Committee. Ms. Parker-Hatchett held numerous positions within Covenant Transport between September 2006 and July 2020. After graduating from the University of Tennessee at Chattanooga (“UTC”) with a Bachelor’s Degree in Business Management, she started with the Company as a Management Trainee working in multiple departments. Ms. Parker-Hatchett began as a Marketing Intern before transferring to Operations in September 2007, where she ultimately spent the majority of her career. Ms. Parker-Hatchett held the position of Customer Service Intern from September 2007 to January 2008, Fleet Manager Intern from January 2008 to June 2008, and Ops Intern from June 2008 to October 2008. She then transferred to the Safety Department and held the position of Log Clerk from October 2008 to February 2010, when she was promoted to Operations Director for Covenant Solutions, the prior name for our brokerage operations. Again, in March 2015, Ms. Parker-Hatchett was promoted to Director of Solutions and was in charge of training and development all personnel, overseeing change initiatives and Lead Measures, coordinating all daily meetings, and maintaining visibility to all new customers and their success within Solutions. Ms. Parker-Hatchett served as Director of Solutions until March 2019. In February 2015, she participated in a year-long Executive Education Program conducted by UTC, where she met and coordinated with various leaders from the community once a month. In 2019, she was named Women of Covenant Director, a position she held until July 2020. Ms. Parker-Hatchett is also involved with many local non-profits and served on the board of a local non-profit, First Things First, from 2011 to 2013. The Board believes that Ms. Parker-Hatchett’s extensive experience within the Company, our industry, and specific experience and expertise in our operations adds significant value to the Board and to her service on our Risk Committee. Ms. Parker-Hatchett is the daughter of Mr. Parker. Tracy L. Rosser, 59, has served as a director since May 2023 and currently serves on our Nominating Committee. Since March 2024, Mr. Rosser has served as Chief Supply Chain Officer of White Cap, a provider of building materials, tools, and equipment to professional contractors. Mr. Rosser was EVP of Operations at Uber Freight (formerly Transplace) from May 2019 until December 2022. Mr. Rosser served as Chief Operating Officer for Walmart Stores East, LLC (Walmart Fleet) and Senior Vice President of Transportation and Supply Chain at Walmart from November 2012 to February 2019. Mr. Rosser previously held many positions at Walmart, including, Senior Vice President - Division Lead of Store Operations, Vice President - Regional General Manager of Store Operations, Vice President of Transportation, General Manager - Distribution Center, and General - Manager Fleet Operations, beginning in 1997. Mr. Rosser has served as a member of the Executive Advisory Board of Blume Global since February 2019 and as a member of the Board of Trustees for the National WWII Museum since January 2011. Mr. Rosser also served as a board member of the Arkansas Trucking Association from November 2012 to January 2019, of the American Trucking Associations from January 2016 to January 2019, and of the National Academy of Sciences - Transportation Research Board from January 2004 to January 2009. Mr. Rosser has a Bachelor’s Degree in Business Administration from the University of Alabama and an Executive Master’s in Business Administration from Tulane University. The Board believes Mr. Rosser’s experience in the transportation and logistics industries qualifies him to serve as a member of our Board and Nominating Committee. Herbert J. Schmidt, 69, has served as a director since 2013 and currently serves as Chairperson of our Risk Committee and as a member of our Compensation Committee. Mr. Schmidt previously served as EVP of Con-way Inc. and President of Con-way Truckload, both freight transportation providers, from 2007 until his retirement in 2012. Prior to the merger of Contract Freighters, Inc. (“CFI”), another freight transportation provider, with Con-way Inc. in 2007, Mr. Schmidt held positions at CFI as President and CEO from 2005 to 2007 and President from 2000 to 2005. Prior to his becoming President and CEO in 2005, he was employed in a series of progressively more responsible positions at CFI where he gained extensive knowledge in risk management, as well as leading the sales and operations functions as Senior Vice President of Operations. Mr. Schmidt also served as a member of the Board of Directors of formerly publicly traded Empire District Electric Company 2010 through January 2017, including membership on the Compensation, Executive, and Strategic Projects Committees. The Board believes Mr. Schmidt’s extensive industry, operations, sales, risk management, and leadership experience adds significant value to the Board, to the Risk Committee he chairs, and to the Compensation Committee.
Board Skills Matrix
W. Miller Welborn, 66, has served as a director since 2017 and currently serves as our Lead Independent Director, Chair of our Compensation Committee, and as a member of our Audit Committee. Mr. Welborn has been Chairman of SmartFinancial, Inc. (NYSE: SMBK), a publicly traded holding company of SmartBank with over $5+ billion in assets since 2015. From 2009 to 2015 Mr. Welborn served as Chairman of Cornerstone Bancshares, Inc., which was the publicly traded parent company of Cornerstone Community Bank prior to the bank’s merger with SmartBank in 2015, where he served on the Asset-Liability (ALCO), Loan, Governance, Nominating, Audit, and Compensation Committees. Mr. Welborn has also served as President of Welborn & Associates, Inc., a consulting firm specializing in transportation and logistics, since 2000. He previously served as managing partner of Transport Capital Partners, LLC, another transportation advisory and consulting firm that he co-founded, from 2001 to 2014. Prior to co-founding Transport Capital Partners, LLC, Mr. Welborn served in several executive and ownership capacities of various trucking companies, including as President, CEO, and a director of Boyd Bros Transportation, President and Chairman of Welborn Transport, Inc., a company he co-founded, and President of Cummings Trucking Co., Inc. From 2010 to 2015 Mr. Welborn served as a partner of Lamp Post Group, Inc., a venture capital company with a portfolio of investments ranging from start-up level to over $600 million in annual revenue. Mr. Welborn currently serves as a director on multiple non-profit boards. The Board believes that Mr. Welborn’s over three decades of business experience, including experience in transportation consulting, executive roles at trucking companies, oversight of executive compensation matters, and serving on the boards of publicly traded companies, provides us with invaluable perspective and experience and qualifies him to serve as our Lead Independent Director, Chair of our Compensation Committee, and member of our Audit Committee.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
THE BOARD OF DIRECTORS AND ITS COMMITTEES
THE BOARD OF DIRECTORS AND ITS COMMITTEES The following summarizes our key governance features:
What We Do
What We Do
What We Do
| ✔ | Lead Independent Director appointed | | ✔ | Proxy access | | ✔ | Corporate governance guidelines | | ✔ | Audit Committee, Compensation Committee, and Nominating Committee comprised solely of independent directors | | ✔ | Two-thirds of the Board is comprised of independent directors | | ✔ | Limitation on number of outside public boards | | ✔ | All members of our Audit Committee qualify as audit committee financial experts | | ✔ | Regular sessions of independent directors | | ✔ | Stock ownership guidelines for non-employee directors of five times annual cash retainer | | ✔ | Stock ownership guidelines for senior executive officers, with CEO at six times annual base salary | | ✔ | Anti-hedging and anti-pledging guidelines for senior executive officers, with no hardship exception | | ✔ | Majority vote policy for uncontested elections | | ✔ | Annual Board and committee written self-assessment through outside counsel | | ✔ | Annual Lead Independent Director written assessment through outside counsel | | ✔ | Annual written assessment of the CEO by the Board, facilitated through outside counsel | | ✔ | Annual enterprise risk assessment | | ✔ | Director orientation | | ✔ | Independent Audit Committee oversees information security and cybersecurity |
Board of Directors
Board of Directors Meetings. Our Board held seven meetings during the year ended December 31, 2024. Each current member of the Board attended at least 75% of the aggregate of all meetings of the Board and of all committees on which he/she served. We encourage the members of our Board to attend our Annual Meeting of Stockholders, although we do not have a formal policy regarding director attendance at such meetings. All of our directors attended the 2024 Annual Meeting of Stockholders. Director Independence. Our Class A common stock is listed on the NYSE. Therefore, we are subject to the applicable NYSE listing standards and the rules and regulations of the SEC, including those relating to corporate governance. The Board has determined that the following directors and director nominees are “independent” under the rules of the NYSE: Messrs. Carson, Kramer, Moline, Rosser, Schmidt, and Welborn. The Board has also determined that with respect to each of our Audit Committee, Compensation Committee, and Nominating Committee, each member and committee composition satisfies the applicable committee independence and membership requirements of the NYSE and the SEC. In accordance with the rules of the NYSE, in 2024, our independent directors held four special meetings of independent directors, without the presence of management. Our Nominating Committee reviewed (i) the SEC regulatory and the NYSE listing standards for assessing the independence of our directors and director nominees, (ii) the criteria for determining each such individual’s independence specifically for purposes of serving on the Audit Committee, Compensation Committee, and Nominating Committee, and as an “audit committee financial expert,” and (iii) each such individual’s professional experience, education, skills, ability to enhance differences of viewpoint, diversity, and other qualities among our Board membership. After concluding its review, the Nominating Committee submitted its independence recommendations to our Board. Our Board then made its independence determinations based on the committee’s recommendations. Board Oversight of Risk Management. The Board has overall responsibility for risk oversight, which involves evaluating any material risks concerning us, as well as management’s decisions and efforts to identify, manage, and monitor such risks. This oversight also includes understanding and determining what constitutes an appropriate level and tolerance of risk for the Company. The Board addresses this responsibility as part of its periodic Board meetings. The primary areas of risk assessment include financial and accounting risk, legal and compliance risk, information security and cybersecurity risk, succession risk, safety and security risk, operational and strategic risk, and regulatory risk. The Board has delegated oversight responsibility to each of the Board committees according to its respective area of responsibility. The Audit Committee oversees assessment and management of financial risks, is responsible for overseeing potential conflicts of interest, monitors and mitigates risks relating to our deployment of financial resources, the management of our balance sheet and the investment of cash and other assets, and is responsible for the management of risks related to information security and cybersecurity. Additionally, the Audit Committee, in coordination with the Risk Committee, discusses with management the Company’s risk assessment and risk management policies and processes, including the risk policies and processes relating to financial statements, financial systems, financial reporting processes, and auditing. The Compensation Committee is responsible for overseeing the management of risks relating to our executive and non-executive compensation policies and practices, including the incentives created by our compensation policies and practices. The Nominating Committee is responsible for overseeing implementation of appropriate corporate governance procedures and overseeing the management of risks associated with the independence of our Board, including ensuring the Board has adequate independence to oversee management and management’s mitigation of operating risks on an unbiased basis, monitoring conflicts of interest risk among the Board and management, and evaluating the design and effectiveness of the processes in place to perform and review the Company’s enterprise-wide risk assessments. The Risk Committee monitors and reviews the Company’s risk framework, including the adequacy and effectiveness of the Company’s risk management policies, safety initiatives, business continuation, and enterprise risk management program. Additionally, the Risk Committee oversees the Company’s risk identification, risk tolerance, risk assessment, and risk management practices for strategic enterprise risks facing the Company (excluding risks associated with risk oversight within the responsibility of other Board committees). In its risk oversight role, our Board considers and confers with management about risk administration. Typically, management identifies, measures, and analyzes risks inherent to our business, operations, and industry. Pursuant to the Board’s instruction, management regularly reports on applicable risks to the relevant committee or the full Board. As appropriate, additional review or reporting on risks are conducted as needed or as requested by our Board and its committees, and appropriate committee members may interact with management as required to fulfill their risk oversight responsibilities. Additionally, the Board conducts an annual risk assessment. The Board’s role in risk oversight has not affected the Board’s leadership structure. Board Leadership Structure; Lead Independent Director. The Board is responsible for overseeing our overall corporate governance and the competent and ethical management and operation of our business by management. The Board elects our Lead Independent Director each year. Mr. Welborn has been our Lead Independent Director since the 2021 Annual Meeting. Mr. Parker currently serves as our Chairman of the Board and CEO. The Board elects our Chairman of the Board and CEO annually. Mr. Parker has served as our Chairman of the Board and CEO since 1994. Our independent directors regularly meet without the presence of management. These executive sessions are typically conducted before or after any Board meeting at which a majority of the independent directors are present or by holding special meetings of the independent directors. We believe that the Lead Independent Director has contributed to the efficiency and functionality of the full Board. The Lead Independent director presides over executive sessions and acts as a liaison between the between our independent directors and the Board.
Board of Directors
The Board believes our leadership structure with Mr. Parker serving as Chairman of the Board and CEO and Mr. Welborn as Lead Independent Director is appropriate and suitable for proper and efficient Board functioning and communication. We believe the combination of Mr. Parker’s leadership positions is effective for us given Mr. Parker’s in-depth knowledge of and experience in our business and industry. Further, his large beneficial stockholdings and long-standing service in senior leadership positions demonstrate to our stockholders Mr. Parker’s commitment to our growth and success. As the CEO, Mr. Parker is also involved in the Company’s routine operations and is in a position to elevate critical business issues to the Board and senior management because he reports to the Board as the CEO with the other executive officers and participates in the meetings as a director. The Board has determined the Chairman of the Board and CEO combination, together with a successful governance structure that includes the exercise of key oversight responsibilities by independent directors, provides an effective balance for the management of the Company and our stockholders’ best interests. Additionally, our Lead Independent Director provides for an effective balance for the management of the Company and our stockholders’ best interests. Our Board has the flexibility to modify our leadership structure in the future, as the Board deems appropriate or necessary. Our Board and committees participate in a rigorous annual self-assessment process conducted by outside counsel involving written questionnaires, with inquiries in risk, strategic planning, succession planning, independence, Board composition, general Board operations and administration, and other areas. Our Lead Independent Director reviews these results with outside counsel and the Board, periodically meets with other Board members, and provides management with actionable feedback. Our Lead Independent Director also undergoes a thorough, written annual assessment conducted by outside counsel and reviewed with the Nominating Committee and the Board. Proxy Access. Eligible stockholders who have continuously owned at least 3% of the issued and outstanding Class A common stock for at least three years and who otherwise meet the requirements set forth in our Sixth Amended and Restated Bylaws may have their director nominees included in our proxy materials. Eligible stockholders may aggregate up to 20 stockholders to reach the 3% ownership threshold. The number of director nominees nominated by an eligible stockholder or a group of eligible stockholders may not be more than 20% of the total number of directors of the Company, but not less than two. Notice of nominations must be received no earlier than 150 days and no later than 120 days prior to the anniversary of the date the Company mailed its proxy for the immediately preceding annual meeting of stockholders. Corporate Governance Guidelines. The Board has adopted Corporate Governance Guidelines, which, along with our articles of incorporation, bylaws, and the charters of the Board’s Committees, form the framework of governance of the Company. Our Corporate Governance Guidelines are available on our website, www.covenantlogistics.com, under the “Governance” tab of the “Resources - Investors” menu. Overboarding Policy. The Board approved an overboarding policy that prohibits Mr. Parker, as CEO and Chairman of the Board, from serving on more than three public company boards in total (including service on the Company’s Board) and prohibits the other board members from serving on more than five public company boards in total (including service on the Company’s Board.) This is to ensure that our directors devote adequate time for preparation and attendance at Board and Committee meetings, including the Annual Meeting of Stockholders. None of our directors serve on more than three public company boards (excluding the Company). Mr. Parker’s public company board service is limited to the Company. Majority Vote Policy. Our Board’s majority vote standard requires that, for directors to be elected (or reelected) to serve on the Company’s Board, they must receive support from holders of a majority of shares voted. A director who is subject to an uncontested election at any stockholder meeting shall promptly tender his or her resignation for consideration by the Nominating Committee, if such director receives a greater number of votes “withheld” from his or her election than are voted “for” such election, excluding abstentions. The Nominating Committee will promptly consider the tendered resignation and will recommend to the Board whether to accept the tendered resignation or to take some other action, such as rejecting the tendered resignation. In making this recommendation, the Nominating Committee will consider all factors deemed relevant by its members including, without limitation, the underlying reasons why stockholders voted against the director (if ascertainable), the length of service and qualifications of the director whose resignation has been tendered, the director’s contributions to the Company, whether by accepting such resignation the Company will no longer be in compliance with any applicable laws, rules, regulations, or governing documents, and whether or not accepting the resignation is in the best interests of the Company and its stockholders. The Board will act on the Nominating Committee’s recommendation no later than at its first regularly scheduled meeting following certification of the stockholder vote, but in any case, no later than 120 days following the certification of the stockholder vote. In considering the Nominating Committee’s recommendation, the Board will consider the factors considered by the Nominating Committee and such additional information and factors the Board believes to be relevant. The Company will promptly publicly disclose the Board’s decision and process in a periodic or current report filed with or furnished to the SEC. Any director who tenders his resignation pursuant to the majority vote policy will not participate in the Nominating Committee’s recommendation or Board consideration regarding whether or not to accept the tendered resignation. However, such director shall remain active and engaged in all other committee and Board activities, deliberations, and decisions during the Nominating Committee and Board process. Anti-Hedging and Anti-Pledging Policy. Our anti-hedging and anti-pledging policy prohibits our CEO, President, COO, and CFO, as well as our directors, from (i) hedging their ownership positions in Class A or Class B common stock (including, but not limited to, short-selling, options, puts and calls, as well as derivatives such as swaps, forwards, and futures), (ii) pledging owned Class A or Class B common stock as collateral for loans, and (iii) purchasing our Class A common stock on margin. Hedging activities include hedging our Class A and Class B common stock. There is no hardship exception to our anti-hedging and anti-pledging policy. Insider Trading Policy. The Company has an insider trading policy governing the purchase, sale, gifting, and other dispositions of the Company’s securities that applies to all Company personnel, including directors, officers, employees, and other covered persons (the “Insider Trading Policy”). In addition to the Insider Trading Policy, the Company also follows procedures for the repurchase of its securities. The Company believes that its Insider Trading Policy and repurchase procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and NYSE listing standards applicable to the Company. A copy of our Insider Trading Policy was filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2024.
Board of Directors
Clawback Policy. The Company has a clawback policy (the “Clawback Policy”) that provides for the mandatory recovery of erroneously awarded incentive-based compensation from current and former executives officers (as such term is defined in Rule 10D-1, for purposes of this section, a “Section 16 officer”) of the Company in the event that the Company is required to prepare an accounting restatement. The recovery of such compensation applies regardless of whether a Section 16 officer engaged in misconduct or otherwise caused or contributed to the accounting restatement. In addition to implementing measures mandated by the SEC, our Clawback Policy provides that our Board of Directors may seek to recover incentive-based compensation awarded after October 2, 2023, from an executive officer (including senior executives designated by the Board of Directors or the Compensation Committee) in connection with a material breach by such executive officer of restrictive covenants in agreements with the executive officer, accounting restatements as a result of material non-compliance with any financial reporting requirement, or as a result of the executive officer’s misconduct that harms the business or reputation of the Company. Equity Grant Practices. Although we have not adopted a formal policy pertaining to the timing of stock option grants to our named executive officers, it is our practice not to time the grant of equity awards, including stock options, in relation to the release of material non-public information. Similarly, the Company does not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. Stock Ownership Guidelines. Our stock ownership guidelines require our CEO, President, COO, CFO, and non-employee directors to build or maintain certain stock ownership over time through equity grants. The stock ownership guidelines for our CEO are six times annual base salary. The stock ownership guidelines for our President, COO, and CFO, are one times annual base salary. The stock ownership guidelines for our non-employee directors are five times annual cash retainer. Director Retirement Policy. In accordance with our Corporate Governance Guidelines, each director will resign as a director immediately prior to the Company’s Annual Meeting of Stockholders first falling after the director attains 75 years of age. Notwithstanding the foregoing, the Board has authority to waive mandatory retirement in individual cases, if in the judgement of the Board the best interests of the Company and the stockholders would be served by such waiver. Stockholder Communications with the Board of Directors. Our Board has adopted procedures by which our stockholders may communicate with our Board regarding matters of substantial importance to us. Information concerning the manner in which stockholders can communicate with the Board is set forth in our Stockholder Communications Procedures available on our website, www.covenantlogistics.com, under the “Governance” tab of the “Resources - Investors” menu. Our Stockholder Communications Procedures, which was adopted by the Board, describes the process for sending communications and determining which communications will be relayed to directors. Please note that we reserve the right not to forward any abusive, threatening, or otherwise inappropriate materials.
Executive Summary
Executive Summary For 2024, we generated over $1.1 billion in revenue, $1.30 of earnings per share, and a 4.1% return on average invested capital. We also paid four quarterly dividends and recorded our highest stock price. These achievements were made possible by the hard work and dedication of all of our employees, including our Named Executive Officers. In designing our 2024 compensation plan, the Compensation Committee considered that our say-on-on pay resolution at the 2024 Annual Meeting of Stockholders was approved with approximately 98.7% of the votes cast. For 2024, the Compensation Committee aligned pay with performance through a short-term cash incentive program with corporate and strategic project goals, as well as performance-based restricted stock unit (“RSU”) grants to certain Named Executive Officers.
Overview and Philosophy of Compensation
Overview and Philosophy of Compensation The Compensation Committee of our Board oversees all of our executive officer compensation arrangements. The Compensation Committee has the specific responsibility to (i) review and approve corporate goals and objectives relevant to the compensation of our CEO, (ii) evaluate the performance of our CEO in light of those goals and objectives, including through the annual CEO assessment, and (iii) determine and approve the compensation level of our CEO based upon that evaluation. The Compensation Committee also has the responsibility to review annually the compensation of our other executive officers and to determine whether such compensation is reasonable under existing facts and circumstances. In making such determinations, the Compensation Committee seeks to ensure that the compensation of our executive officers aligns the executive officers’ interests with the interests of our stockholders. The Compensation Committee also reviews and approves all forms of deferred compensation and incentive compensation, including annual cash bonuses, stock option grants, stock grants, and other forms of incentive compensation granted to our executive officers. The Compensation Committee takes into account the recommendations of our CEO and our President in reviewing and approving the overall compensation of the other executive officers (but not with respect to their own compensation). The Compensation Committee has the authority under its charter to retain outside consultants as it deems appropriate. In accordance with this authority, the Compensation Committee engaged Pearl Meyer to provide independent and unbiased external advice and expertise regarding executive compensation and to provide a competitive market pay analysis for our Named Executive Officers in 2024. The Compensation Committee used this advice and information as a guide in reviewing our executive compensation program, including with respect to the setting of base salaries and grants of equity awards to our executive officers. At the most senior level, including our Named Executive Officers, we seek to attract, motivate, and retain executive officers who are capable of evaluating, building, and managing multiple businesses, and who we believe will create long-term value for our stockholders. In this regard, we use a mix of compensation designed to provide overall compensation levels that (i) are sufficient to attract and retain talented executive officers and to motivate those executives to achieve superior results, (ii) align executives’ interests with our corporate strategies, our business objectives, and the performance of specific business units to the extent applicable, (iii) enhance executives’ incentives to increase our stock price and focus on the long-term interests of our stockholders, and (iv) are consistent with our goal of controlling costs. In many instances we build our compensation elements around long-term retention and development together with annual rewards based on financial performance.
Elements of Compensation
| ● | annual incentive compensation, which may include performance-based annual cash and/or equity awards; |
Elements of Compensation
| ● | long-term equity incentive awards; |
Performance-Based Annual Cash Bonuses
Performance-Based Annual Cash Bonuses The Compensation Committee uses performance-based annual cash bonuses to motivate executives to produce positive results in the expected business environment for the year. These performance-based annual bonuses are based on the executives’ completion of annual bonus targets established by the Compensation Committee. Performance-based annual cash bonuses typically encourage and reward executive officers for performance during the fiscal year and on a short-term basis. We believe our performance-based bonuses also contribute to our long-term success because such bonuses motivate and reward achievement of strategic and financial goals that are considered by the Compensation Committee to reflect desirable targets. When calculating the cash bonus earned by an executive officer under the Incentive Plan, the Compensation Committee may, in its sole judgment, exercise negative discretion to eliminate or reduce the size of a bonus if the Compensation Committee determines such action is appropriate, but may not increase a bonus above the executive’s maximum cash bonus actually earned based on achievement of the objective performance criteria. Further, the Compensation Committee is required to certify, prior to payment of a cash bonus under the Incentive Plan, that the respective performance targets underlying the cash bonus were achieved. Our short-term cash incentive plan for 2024 is described under Executive Compensation – Compensation Discussion and Analysis – Compensation Paid to Our Named Executive Officers – 2024 Senior Executive Bonus Program.
Long-Term Incentives
Long-Term Incentives The Covenant Logistics Group, Inc. Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (the “Incentive Plan”), is a broad-based cash and equity incentive plan. Long-term incentives under the Incentive Plan are typically granted as equity awards. We use equity awards, among other things, to:
Long-Term Incentives
| ● | provide incentives to executive officers in a manner designed to reinforce our performance goals; |
Long-Term Incentives
| ● | attract, motivate, and retain qualified executive officers by providing them with long-term incentives; and |
Long-Term Incentives
| ● | align our executive officers’ and stockholders’ long-term interests by creating a strong, direct link between executive compensation and stockholder return (in this Proxy Statement, the terms “stockholder return” and “stockholder value” generally refer to the percentage increase in the value of our shares). |
Long-Term Incentives
The Incentive Plan allows the Compensation Committee to link compensation to performance over a period of time by using equity-based awards (which often value a company’s long-term prospects), requiring holding periods for equity grants, and granting awards that have multiple-year vesting schedules. Awards with multiple-year vesting schedules, such as RSU grants, provide balance to the other elements of our compensation program that otherwise link compensation to annual performance. Awards with multiple-year vesting schedules create an incentive for executive officers to increase stockholder value over an extended period of time because the value received from such awards is impacted by the movement in our stock price. Such awards also incentivize executive officers to remain with us over an extended period of time, which enables us to retain experienced executive talent. Thus, we believe our Incentive Plan is an effective way of aligning the interests of our executive officers with those of our stockholders. In determining our long-term incentive compensation, our Compensation Committee evaluates which award vehicles achieve the best balance between providing appropriate long-term incentive compensation and creating long-term stockholder value. The Compensation Committee considers several factors when determining long-term incentive awards to be granted to our executive officers, including:
Long-Term Incentives
| ● | the recommendations of our CEO and our President; |
Long-Term Incentives
| ● | how the achievement of certain performance goals will help us improve our financial and operating performance and add long-term value to our stockholders; |
Long-Term Incentives
| ● | the value of the award in relation to other elements of total compensation, including the number of options, restricted stock, or RSUs currently held by the executive officer, and the number of stock options, restricted stock, or RSUs granted to the executive officer in prior years; |
Long-Term Incentives
| ● | the executive officer’s position, scope of responsibility, ability to affect our financial and operating performance, ability to create stockholder value, and historical and recent performance; |
Long-Term Incentives
| ● | the expected impact of awards on executive officer retention; |
Long-Term Incentives
| ● | the tax deductibility of certain awards; and |
Long-Term Incentives
| ● | the impact of the awards on our earnings, cash flows, and diluted share count. |
Long-Term Incentives
Our long-term incentive plan approved in 2024 is described under Executive Compensation – Compensation Discussion and Analysis – Compensation Paid to Our Named Executive Officers – 2024 Long-Term Incentive Plan.
Compensation Paid to Our Chief Executive Officer
| ● | participation in the 2024 Senior Executive Bonus Program, as described in more detail under the heading 2024 Senior Executive Bonus Program below; |
Compensation Paid to Our Chief Executive Officer
| ● | participation in the 2024 Long-Term Incentive Plan, as described in more detail under the heading 2024 Long-Term Incentive Plan below; |
Compensation Paid to Our Chief Executive Officer
| ● | certain perquisites, including Corporate Aircraft Use (as defined under the heading Other Compensation above), a wellness credit, long-term disability insurance, and certain club fees and dues; and |
Compensation Paid to Our Other Named Executive Officers
| ● | participation in the 2024 Senior Executive Bonus Program, as described in more detail under the heading 2024 Senior Executive Bonus Program below; |
Compensation Paid to Our Other Named Executive Officers
| ● | participation in the 2024 Long-Term Incentive Plan, as described in more detail under the heading 2024 Long-Term Incentive Plan below; |
Compensation Paid to Our Other Named Executive Officers
| ● | certain perquisites, including a cell phone stipend, a wellness credit, long-term disability insurance, and a milestone tenure award; and |
Compensation Paid to Our Other Named Executive Officers
| ● | participation in the 2024 Senior Executive Bonus Program, as described in more detail under the heading 2024 Senior Executive Bonus Program below; |
Compensation Paid to Our Other Named Executive Officers
| ● | participation in the 2024 Long-Term Incentive Plan, as described in more detail under the heading 2024 Long-Term Incentive Plan below; |
Compensation Paid to Our Other Named Executive Officers
| ● | certain perquisites, including a cell phone stipend, a wellness credit, long-term disability insurance, and Company matching contributions under the Deferred Compensation Plan; and |
Compensation Paid to Our Other Named Executive Officers
| ● | participation in the 2024 Senior Executive Bonus Program, as described in more detail under the heading 2024 Senior Executive Bonus Program below; |
Compensation Paid to Our Other Named Executive Officers
| ● | participation in the 2024 Long-Term Incentive Plan, as described in more detail under the heading 2024 Long-Term Incentive Plan below; |
Compensation Paid to Our Other Named Executive Officers
| ● | participation in the 2023 Senior Executive Bonus Program, as described in more detail under the heading 2024 Senior Executive Bonus Program below; |
Compensation Paid to Our Other Named Executive Officers
| ● | participation in the 2024 Long-Term Incentive Plan, as described in more detail under the heading 2024 Long-Term Incentive Plan below; |
Compensation Paid to Our Other Named Executive Officers
| ● | certain perquisites, including a cell phone stipend, a wellness credit, long-term disability insurance, and a milestone tenure award; and |
2024 Senior Executive Bonus Program
2024 Senior Executive Bonus Program Under the 2024 Senior Executive Bonus Program, our Named Executive Officers were eligible to receive incremental cash bonuses upon satisfaction of certain goals related to consolidated adjusted diluted earnings per share (“Adjusted EPS”) and strategic projects, over a performance period of January 1, 2024 to December 31, 2024. Adjusted EPS means diluted earnings per shares, adjusted for amortization of intangibles and certain non-recurring charges and gains. The annual bonus targets, expressed as a percentage of year-end annualized base salary, under the 2024 Senior Executive Bonus Program were as follows:
2024 Senior Executive Bonus Program
| Named Executive Officer | Bonus Target | | David R. Parker | 100.0% | | M. Paul Bunn | 100.0% | | Tripp Grant | 70.0% | | Dustin Koehl | 60.0% | | Joey Ballard | 60.0% |
2024 Senior Executive Bonus Program
Messrs. Parker, Bunn, Grant, and Koehl and Ms. Balland could earn up to 150.0% of their bonus target based on certain Adjusted EPS goals for fiscal year 2024, as follows:
2024 Senior Executive Bonus Program
| Adjusted EPS | Achievement Potential as a Percentage of Bonus Target(1) | | $1.775 | Minimum (37.5%) | | $2.075 | Target (75.0%) | | $2.275 | Maximum (150.0%) |
2024 Senior Executive Bonus Program
| (1) The Compensation Committee also created specific parameters for awarding bonuses within certain incremental ranges of achievement of the Adjusted EPS goals. |
2024 Senior Executive Bonus Program
Messrs. Parker, Bunn, and Grant also were eligible to earn up to an additional 25.0% of their bonus target based on achievement of goals in fiscal year 2024, as follows:
2024 Senior Executive Bonus Program
| ● | Lew Thompson & Son Trucking, LLC (“Lew Thompson & Son”) – Achieve an adjusted operating income of Lew Thompson & Son of at least $5 million for any 2024 quarter and execute Lew Thompson & Son’s targeted safety plan with no more than one Federal Motor Carrier Safety Administration Compliance Safety Accountability program (“CSA”) score over threshold as of December 31, 2024 (16.75% of bonus target earned for achievement); and |
2024 Senior Executive Bonus Program
| ● | Information Technology (“IT”) Strategic Projects – Completion of the following strategic projects, (i) execute a full-scale cyber event test by September 30, 2024, (ii) upgrade to the latest version of TMW Suites by September 30, 2024, (iii) transition 200 legacy tractors in our Dedicated unit to TMW Suites by December 31, 2024, and (iv) transition 100% of legacy trucks in Lew Thompson & Son to TMW Suites by December 31, 2024 (two of four projects achieved resulting in 4.13% of target bonus earned, three of four projects achieved resulting in 6.19% of target bonus earned, and achievement of all four projects resulting in 8.25% of target bonus earned). |
2024 Senior Executive Bonus Program
Mr. Koehl also was eligible to earn up to 25% of his target bonus based on achievement of goals in fiscal year 2024, as follows:
2024 Senior Executive Bonus Program
| ● | Customers – Addition of one new customer for each of our business units (Expedited, Dedicated, and Brokerage), including an executed contract by December 31, 2024 (8.33% of target bonus earned); |
2024 Senior Executive Bonus Program
| ● | Sales Organization – Completion of an updated sales organizational structure by November 1, 2024 (8.33% of target bonus earned); and |
2024 Senior Executive Bonus Program
| ● | Operational Improvement – Completion of an operation improvement plan for each of our business units by November 1, 2024 (8.33% of target bonus earned). |
2024 Senior Executive Bonus Program
Ms. Ballard also was eligible to earn up to 25% of her target bonus based on achievement of goals in fiscal year 2024, as follows:
2024 Senior Executive Bonus Program
| ● | Lew Thompson & Son – Achieve an adjusted operating income of Lew Thompson & Son of at least $5 million for any 2024 quarter and execute Lew Thompson & Son’s targeted safety plan with no more than one CSA score over threshold as of December 31, 2024 (8.33% of target bonus earned); |
2024 Senior Executive Bonus Program
| ● | Driver Retention – Achieve a driver retention of 135% for our Expedited business unit and 85% for our Dedicated business unit for 2024 (8.33% of target bonus earned); and |
2024 Senior Executive Bonus Program
| ● | Department of Transportation (“DOT”) Safety – Achieve an enterprise DOT accident frequency of .68 or better for 2024 (8.33% of target bonus earned). |
2024 Senior Executive Bonus Program
In March 2025, the Compensation Committee determined that the following goals were met: With respect to each Named Executive Officer, Adjusted EPS ($1.98 Adjusted EPS for fiscal year 2024); with respect to Messrs. Parker, Bunn, and Grant, Lew Thompson & Son (achieved) and IT Strategic Projects (four of four achieved); with respect to Mr. Koehl, Customers (achieved), Sales Organization (achieved), and Operational Improvement (achieved); and with respect to Ms. Ballard, Lew Thompson & Son (achieved), Driver Retention (achieved), and DOT Safety (achieved); resulting in the following payouts under the 2024 Senior Executive Bonus Program:
2024 Senior Executive Bonus Program
| Named Executive Officer | Payout | | David R. Parker | $744,357 | | M. Paul Bunn | $647,368 | | Tripp Grant | $275,232 | | Dustin Koehl | $235,879 | | Joey Ballard | $199,838 |
2024 Long-Term Incentive Plan
2024 Long-Term Incentive Plan On June 21, 2024, the Compensation Committee approved a long-term incentive plan (the “2024 Long-Term Incentive Plan”) in which the Named Executive Officers received an aggregate award equivalent to the following amounts:
2024 Long-Term Incentive Plan
| Named Executive Officer | Target Award Equivalent Amount | | David R. Parker | $2,500,000 | | M. Paul Bunn | $1,000,000 | | Tripp Grant | $500,000 | | Dustin Koehl | $400,000 | | Joey Ballard | $300,000 |
2024 Long-Term Incentive Plan
These participants received restricted share units equivalent to the listed target amount, except the Compensation Committee decided to issue Mr. Parker’s award in cash given his significant stock holdings that align with stockholder value creation. The awards may be earned as follows: (A) 25% upon the Company’s attainment of a three-year cumulative Adjusted EPS goal for the performance period ended December 31, 2027, (B) 25% upon the Company’s attainment of a three-year average annual return on invested capital (“ROIC”) goal for the performance period ended December 31, 2027, (C) 16.67% for continued service through July 1, 2025, (D) 16.67% for continued service through July 1, 2026, and (E) 16.67% for continued service through July 1, 2027. The portions of the award attributable to the Adjusted EPS goals for the three-year period have a threshold payout of 50% of the target and a maximum payout of 200% of the target amount based on the Adjusted EPS for the three-year period, as follows:
2024 Long-Term Incentive Plan
| Three-Year Cumulative Adjusted EPS | Achievement Potential as a Percentage of Target Amount Attributable to Adjusted EPS Goals(1) | | $6.00 | 50.0% | | $6.75 | 100.0% | | $7.50 | 200.0% |
2024 Long-Term Incentive Plan
| (1) The Compensation Committee also created specific parameters for awarding bonuses within certain incremental ranges of achievement of the Adjusted EPS goals for the three-year period. |
2024 Long-Term Incentive Plan
The portions of the award attributable to the ROIC goals for the three-year period have a threshold payout of 50% of the target and a maximum payout of 200% of the target amount based on the ROIC goals for the three-year period, as follows:
2024 Long-Term Incentive Plan
| Three-Year Average ROIC(1) | Achievement Potential as a Percentage of Target Amount Attributable to ROIC Goals(1)(2) | | 7.0% | 50.0% | | 9.0% | 100.0% | | 11.0% | 200.0% |
2024 Long-Term Incentive Plan
| (1) ROIC means (i) net income (adjusted for certain unusual and non-recurring items) minus dividends paid, divided by (ii) average total stockholder equity plus average total secured debt and finance lease obligations, net of cash. |
2024 Long-Term Incentive Plan
| (2) The Compensation Committee also created specific parameters for awarding bonuses within certain incremental ranges of achievement of the ROIC goals for the three-year period. |
2024 Long-Term Incentive Plan
Awards under the 2024 Long-Term Incentive Plan are subject to customary termination, forfeiture, and acceleration provisions.
Restricted Stock and Cash Payouts Based on 2024 Performance
Restricted Stock and Cash Payouts Based on 2024 Performance In March 2025, the Compensation Committee assessed performance under the previously disclosed Lew Thompson & Son Bonus Plan adopted in May 2023 and determined that LT Target 1 was achieved. Therefore, on December 31, 2025, subject to continuous employment through such date, (i) Mr. Parker will receive a cash payout of $100,000, (ii) 5,166 of the 15,500 shares of restricted stock granted to Mr. Bunn under the Lew Thompson & Son Bonus Plan will vest, (iii) 2,582 of the 7,750 shares of restricted stock granted to Mr. Grant under the Lew Thompson & Son Bonus Plan will vest, and (iv) Ms. Ballard will receive a cash payout of $25,000.
Compensation Decisions with Respect to 2025
| Named Executive Officer | Bonus Target | | David Parker | 100.0% | | M. Paul Bunn | 100.0% | | Tripp Grant | 70.0% | | Dustin Koehl | 60.0% | | Joey Ballard | 60.0% |
Benchmarking Compensation
Benchmarking Compensation With our independent compensation consultant, we benchmark our executive compensation against a peer group consisting of 15 companies that we believe are comparable to us in industry, size, customer base, or location. The Compensation Committee references market data from this peer group as well as survey data to help inform decision making around executive compensation on an annual basis. Our benchmarking peer group for 2024 consisted of the following companies:
Benchmarking Compensation
| ArcBest Corporation | Janus International Group, Inc. | Pamt Corp. | | Astec Industries, Inc. | Kirby Corporation | Radiant Logistics, Inc. | | Forward Air Corporation | Marten Transport, Ltd. | Saia, Inc. | | Heartland Express, Inc. | Miller Industries, Inc. | Wabash National Corporation | | Insteel Industries, Inc. | NN, Inc. | Werner Enterprises, Inc. |
Benchmarking Compensation
We will evaluate the appropriateness of the peer group annually. For 2025, we replaced Heartland Express, Inc. with Hub Group, Inc.
Risk Considerations Regarding Compensation
| ● | Our compensation structure generally utilizes a combination of short-term (such as base salary and performance-based annual bonuses) and long-term (equity awards) elements. This balanced mix aligns our compensation with the achievement of short- and long-term Company goals, promotes short- and long-term executive decision-making, and does not encourage or incentivize excessive or unreasonable risk-taking by employees in pursuit of short-term benefits. |
Risk Considerations Regarding Compensation
| ● | Equity awards are limited by the terms of our Incentive Plan to a fixed maximum and are subject to staggered or long-term vesting schedules, which aligns the interests of our executive officers and employees with those of our stockholders. |
Risk Considerations Regarding Compensation
| ● | Variable compensation elements for our Named Executive Officers were based on performance metrics for the consolidated group, not individual or departmental goals, which reflects an alignment of Company performance with incentive compensation. The award opportunities under our annual and long-term incentive plan are capped. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control Messrs. Parker, Bunn, Grant, and Koehl and Ms. Ballard are employed at will and do not have an employment agreement. Each of Messrs. Parker, Bunn, Grant, and Koehl and Ms. Ballard is party to a severance agreement (each a “Severance Agreement”). As of December 31, 2024, upon termination without “cause” (other than in connection with a change in control), subject to employment, release, and other customary provisions, including a non-compete through 12 months post-termination (or 3 months post-termination in the case of Messrs. Grant and Ms. Ballard), the Severance Agreements provide for the following benefits (the “Severance Benefits”):
Potential Payments Upon Termination or Change in Control
| Named Executive Officer | Salary Continuation | Management Incentive Cash Bonus | COBRA Reimbursement | | Messrs. Parker and Bunn | 24 Months | If earned at or above minimum, then the target cash bonus for the year of termination, prorated for partial year of service | 24 Months | | Mr. Koehl(1) | 12 Months | If earned at or above minimum, then one half of the target cash bonus for the year of termination, prorated for partial year of service | 12 Months | | Mr. Grant and Ms. Ballard | 18 Months(2) | If earned at or above minimum, then the target cash bonus for the year of termination, prorated for partial year of service | 18 Months |
Potential Payments Upon Termination or Change in Control
| (1) The benefits set forth for Mr. Koehl are payable if the qualifying severance event occurs following the first anniversary of his employment with the Company. Additionally, upon the third anniversary of Mr. Koehl’s employment with the Company the benefits will increase to (i) 24 months of salary continuation; (ii) the target cash bonus for the year of termination, if earned at or above minimum, prorated for partial year of service; and (iii) 24 months of COBRA reimbursement. |
Potential Payments Upon Termination or Change in Control
| (2) Mr. Grant and Ms. Ballard are eligible for 9 months guaranteed salary continuation, plus an additional 9 months of salary continuation so long as they have not secured employment consistent with their professional experience and/or skillset and paying an annualized base salary at least equal to their annualized base salary at the time of termination. |
Potential Payments Upon Termination or Change in Control
As of December 31, 2024, upon a qualifying change in control event only when the recipient is terminated without “cause” or is subject to a “constructive termination,” in each case, between execution of a definitive agreement in contemplation of a change in control and continuing through 24 months following a change in control, subject to employment, release, and other customary provisions, including a non-compete through 12 months post-termination (or 3 months post-termination in the case of Mr. Grant and Ms. Ballard) the Severance Agreements provide for the following benefits (the “CIC Benefits”):
Potential Payments Upon Termination or Change in Control
| Named Executive Officer | Lump Sum Severance Payment (as a % of Annualized Base Salary) | Management Incentive Cash Bonus | COBRA Reimbursement | | Messrs. Parker and Bunn | 300% | Target cash bonus for the year of termination | 36 Months | | Mr. Koehl(1) | 150% | One-half of target cash bonus for the year of termination | 18 Months | | Mr. Grant and Ms. Ballard | 200% | Target cash bonus for the year of termination | 24 Months |
Potential Payments Upon Termination or Change in Control
| (1) The benefits set forth for Mr. Koehl are payable if he is terminated without “cause” or is subject to a “constructive termination,” in each case, between execution of a definitive agreement in contemplation of a change in control and continuing through 24 months following a change in control, provided that the termination occurs following the first anniversary of his employment with the Company. Additionally, upon the third anniversary of Mr. Koehl’s employment with the Company the benefits will increase to (i) a lump sum severance payment of 300% of annualized base salary; (ii) the target cash bonus for the year of termination; and (iii) 36 months of COBRA reimbursement. |
Potential Payments Upon Termination or Change in Control
Under certain circumstances in which there is a change in control, outstanding unvested restricted stock, RSUs, and long-term cash awards granted to recipients, including Named Executive Officers, under the Incentive Plan may become vested upon the occurrence of such event, notwithstanding that such restricted share, RSUs, or long-term cash awards may not have otherwise been fully vested. The Incentive Plan requires that equity awards granted after the effectiveness of the second amendment in July 2020 include a double trigger provision, which provides for the payment, or acceleration of vesting following a change in control only when the recipient is terminated without “cause” or is subject to a “constructive termination” during the 24 months following a change in control. Generally speaking, and as qualified by the terms of the relevant agreements, plans, and award notices, a "change in control" occurs if: (i) someone acquires 50% or more of the combined voting power of our stock, unless after the transaction more than 75% of the acquiring company is owned by all or substantially all of those persons who were beneficial owners of our stock prior to such acquisition; (ii) a majority of our directors is replaced, other than by new directors approved by existing directors; (iii) we consummate a reorganization, merger, or consolidation where, following such transaction, all or substantially all of those persons who were beneficial owners of our stock immediately prior to the transaction do not own, immediately after the transaction, more than 75% of the outstanding securities of the resulting corporation; (iv) we consummate a transaction subject to Rule 13e-3 of the Exchange Act in which David or Jacqueline Parker or their siblings, children, or grandchildren or a trust, corporation, partnership, limited partnership, limited liability company, or other entity controlled by the foregoing, are the beneficial owners of more than 50% of the outstanding securities of the resulting corporation ordinarily having the right to vote in the election of directors, or (v) we sell or liquidate all or substantially all of our assets. Upon death, disability, or retirement, certain outstanding unvested restricted stock, RSUs, and long-term cash awards granted to recipients, including Named Executive Officers, under the Incentive Plan may become vested upon the occurrence of such event, notwithstanding that such restricted share, RSUs, or long-term cash awards may not have otherwise been fully vested. The following table summarizes the benefits that would have been payable upon termination of employment in various circumstances, assuming the triggering event occurred on December 31, 2024:
Potential Payments Upon Termination or Change in Control
| Name/Form of Compensation | Termination without Cause | Termination without Cause or Constructive Termination in Connection with a Change in Control | Death, Disability, or Retirement | | David R. Parker | | | | | Severance Benefits | $2,445,295 | - | - | | CIC Benefits | - | $3,265,587 | - | | Long-Term Cash Award Payouts | - | $5,500,000 | $3,550,000 | | Total | $2,445,295 | $8,765,587 | $3,550,000 | | M. Paul Bunn | | | | | Severance Benefits | $1,801,206 | - | - | | CIC Benefits | - | $2,351,810 | - | | Long-Term Cash Award Payouts | - | $500,000 | - | | Accelerated Equity(1) | - | $3,694,088 | $3,117,590 | | Total | $1,801,206 | $6,545,898 | $3,117,590 | | Tripp Grant | | | | | Severance Benefits | $898,640 | - | - | | CIC Benefits | - | $1,099,020 | - | | Long-Term Cash Award Payouts | - | $225,000 | - | | Accelerated Equity | - | $1,490,303 | $1,202,055 | | Total | $898,640 | $2,814,323 | $1,202,055 | | Dustin Koehl | | | | | Severance Benefits(2) | - | - | - | | CIC Benefits(2) | - | - | - | | Accelerated Equity | - | $691,732 | $461,155 | | Total | - | $691,732 | $461,155 | | Joey Ballard | | | | | Severance Benefits | $878,541 | - | - | | CIC Benefits | - | $1,099,388 | - | | Long-Term Cash Award Payouts | - | $225,000 | - | | Accelerated Equity | - | $880,500 | $707,485 | | Total | $878,541 | $2,204,888 | $707,485 |
Potential Payments Upon Termination or Change in Control
| (1) The value for the accelerated restricted stock and RSUs was calculated by multiplying the closing market price of our stock on December 31, 2024, the last trading day of fiscal year 2024 ($27.255), by the number of shares of accelerated restricted stock and RSUs. For additional information outstanding restricted stock and RSUs as of December 31, 2024, please refer to the Outstanding Equity Awards at Year-End Table. |
Potential Payments Upon Termination or Change in Control
| (2) As of December 31, 2024, Mr. Koehl had less than one year of service and therefore would not receive any Severance Benefits or CIC Benefits upon termination of employment on December 31, 2024. |
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table sets forth information concerning the total compensation of each of our Named Executive Officers for 2024, 2023, and 2022.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation(5) ($) | Total ($) | | David R. Parker, | 2024 | 804,710 | 250,000(2) | - | 827,690 | 157,197 | 2,039,597 | | CEO and Chairman | 2023 | 799,579 | - | - | 502,944 | 79,295 | 1,381,818 | | of the Board | 2022 | 743,070 | - | - | 1,293,260 | 80,479 | 2,116,809 | | M. Paul Bunn, | 2024 | 618,467 | - | 1,000,019(3) | 647,368 | 5,116 | 2,270,970 | | President | 2023 | 537,959 | - | 900,008 | 328,133 | 36,643 | 1,802,743 | | | 2022 | 412,471 | - | 399,991 | 602,458 | 25,774 | 1,440,694 | | Tripp Grant, | 2024 | 405,486 | - | 499,986(3) | 300,232 | 4,908 | 1,210,612 | | EVP and CFO | 2023 | 364,110 | - | 399,990 | 140,689 | 30,331 | 935,120 | | | 2022 | 274,129 | - | 93,740 | 308,824 | 14,204 | 690,897 | | Dustin Koehl, COO(1) | 2024 | 261,542 | - | 399,988(3) | 235,879 | 8,898 | 906,307 | | Joey Ballard, EVP – People & Safety | 2024 | 348,239 | - | 299,992(3) | 224,838 | 6,742 | 879,811 |
SUMMARY COMPENSATION TABLE
| (1) Mr. Koehl commenced employment with the Company on May 13, 2024. |
SUMMARY COMPENSATION TABLE
| (2) Represents a cash payout earned for continued service through December 31, 2024 under the 2023 Long-Term Incentive Plan. Mr. Parker was granted a cash payout in lieu of restricted shares under the 2023 Long-Term Incentive Plan given his significant stock holdings that align with stockholder value creation. For more information on the 2023 Long-Term Incentive Plan, see page 28 of the 2024 Proxy Statement filed with the SEC on April 12, 2024. |
SUMMARY COMPENSATION TABLE
| (3) Under the 2024 Long-Term Incentive Plan, on June 21, 2024, Messrs. Bunn, Grant, and Koehl and Ms. Ballard received the following time-based RSUs: Mr. Bunn 21,150 RSUs, Mr. Grant 10,574 RSUs, Mr. Koehl 8,460 RSUs, and Ms. Ballard 6,342 RSUs. The dollar amount represents the grant date fair value of the time-based RSUs received under the 2024 Long-Term Incentive Plan, using the closing price of our Class A Common Stock on the grant date ($23.64). Under the 2024 Long-Term Incentive Plan, on June 21, 2024, Messrs. Bunn, Grant, and Koehl and Ms. Ballard received the following performance-based RSUs, subject to vesting based on achievement of certain Adjusted EPS and ROIC goals for the three-year period ending December 31, 2027: Mr. Bunn 21,152 RSUs, Mr. Grant 10,576 RSUs, Mr. Koehl 8,460 RSUs, and Ms. Ballard 6,348 RSUs. The dollar amount represents the grant date fair value of the performance-based RSUs received under the 2024 Long-Term Incentive Plan, using the closing price of our Class A Common Stock on the grant date ($23.64) and assuming the performance conditions will be achieved at target level. Assuming the performance conditions are achieved at the highest level and using the closing price of our Class A Common Stock on the grant date ($23.64), the grant date fair value of performance-based RSUs would be: Mr. Bunn $1,000,067, Mr. Grant $500,033, Mr. Koehl $399,989, and Ms. Ballard $300,133. For additional information of the grants of RSUs made under the 2024 Long-Term Incentive Plan see Executive Compensation – Compensation Discussion and Analysis, and the Grants of Plan-Based Awards Table. |
SUMMARY COMPENSATION TABLE
| (4) For 2024, represents (i) cash payouts under the 2024 Senior Executive Bonus Program of $744,357 for Mr. Parker, $647,368 for Mr. Bunn, $275,232 for Mr. Grant, $235,879 for Mr. Koehl, and $199,838 for Ms. Ballard and (ii) cash payouts under the AAT Bonus Program of $83,333 for Mr. Parker, $25,000 for Mr. Grant, and $25,000 for Ms. Ballard. For more information on the 2024 Senior Executive Bonus Program see Executive Compensation – Compensation Discussion and Analysis. The cash payouts under the AAT Bonus Program, which was adopted in May 2022, were earned based on achievement of a performance goal thereunder and continuous employment through February 28, 2024. For more information on the AAT Bonus Program, see pages 29 and 30 of the 2024 Proxy Statement filed with the SEC on April 12, 2024. |
SUMMARY COMPENSATION TABLE
| (5) See All Other Compensation Table for additional information. |
GRANTS OF PLAN-BASED AWARDS TABLE
GRANTS OF PLAN-BASED AWARDS TABLE The following table sets forth information concerning each grant of an award made to our Named Executive Officers during 2024.
GRANTS OF PLAN-BASED AWARDS TABLE
| | | Estimated Future Payouts | | | Estimated Future Payouts | | | All Other | | | | | Under Non-Equity Incentive | | | Under Equity Incentive | | | Stock | Grant | | | | Plan Awards | | | Plan Awards | | | Awards: | Date Fair | | | | | | | | | | Number | Value of | | | | | | | | | | of Shares | Stock and | | | | | | | | | | of Stock | Option | | | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Awards | | Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | ($) | | David R. | -(1) | 66,389 | 804,710 | 1,408,243 | - | - | - | - | - | | Parker | -(2) | 312,500 | 1,250,000 | 2,500,000 | - | - | - | - | - | | M. Paul Bunn | -(1) | 57,750 | 700,000 | 1,225,000 | - | - | - | - | - | | | 06/21/24 | - | - | - | 5,288(3) | 21,152(3) | 42,304(3) | - | 500,033(3) | | | 06/21/24 | - | - | - | - | - | - | 21,150(4) | 499,986(4) | | Tripp Grant | -(1) | 24,544 | 297,500 | 520,625 | - | - | - | - | - | | | 06/21/24 | - | - | - | 2,644(3) | 10,576(3) | 21,152(3) | - | 250,017(3) | | | 06/21/24 | - | - | - | - | - | - | 10,574(4) | 249,969(4) | | Dustin Koehl | -(1) | 21,250 | 255,000 | 446,250 | - | - | - | - | - | | | 06/21/24 | - | - | - | 2,115(3) | 8,460(3) | 16,920(3) | - | 199,994(3) | | | 06/21/24 | - | - | - | - | - | - | 8,460(4) | 199,994(4) | | Joey Ballard | -(1) | 18,000 | 216,000 | 378,000 | - | - | - | - | - | | | 06/21/24 | - | - | - | 1,587(3) | 6,348(3) | 12,696(3) | - | 150,067(3) | | | 06/21/24 | - | - | - | - | - | - | 6,342(4) | 149,925(4) |
GRANTS OF PLAN-BASED AWARDS TABLE
| (1) Represents potential cash payouts under the 2024 Senior Executive Bonus Program. The material terms of the 2024 Senior Executive Bonus Program, along with the payouts under the 2024 Senior Executive Bonus Program, are discussed in more detail under the heading 2024 Senior Executive Bonus Program in the Compensation Discussion and Analysis. |
GRANTS OF PLAN-BASED AWARDS TABLE
| (2) Represents potential cash payouts under the 2024 Long-Term Incentive Plan. The material terms of the 2024 Long-Term Incentive Plan are discussed in more detail under the heading 2024 Long-Term Incentive Plan in the Compensation Discussion and Analysis. |
GRANTS OF PLAN-BASED AWARDS TABLE
| (3) Represents the performance-based RSUs received under the 2024 Long-Term Incentive Plan, that will vest upon the achievement of the certain three-year cumulative Adjusted EPS and ROIC goals for the performance period ended December 31, 2027. The dollar amount represents the grant date fair value of the performance-based RSUs received under the 2024 Long-Term Incentive Plan, using the closing price of our Class A Common Stock on the grant date ($23.64) and assuming the performance conditions will be achieved at target level. The material terms of the 2024 Long-Term Incentive Plan are discussed in more detail under the heading 2024 Long-Term Incentive Plan in the Compensation Discussion and Analysis. |
GRANTS OF PLAN-BASED AWARDS TABLE
| (4) Represents the time-based RSUs received under the 2024 Long-Term Incentive Plan. Subject to the terms of the award notice, 33.34% of the time-based RSUs will vest on July 1, 2025, 33.34% of the time-based RSUs will vest on July 1, 2026, and 33.34% of the time-based RSUs will vest on July 1, 2027. The dollar amount represents the grant date fair value of the time-based RSUs received under the 2024 Long-Term Incentive Plan, using the closing price of our Class A Common Stock on the grant date ($23.64). |
Narrative to Grants of Plan-Based Awards Table
Narrative to Grants of Plan-Based Awards Table See Executive Compensation – Compensation Discussion and Analysis for a complete description of the performance targets for payment of incentive awards.
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE The following table sets forth information concerning all stock option grants and stock awards held by our Named Executive Officers as of December 31, 2024. All outstanding equity awards are in shares of our Class A common stock. All options, restricted shares, and restricted share units that have not vested are subject to certain continued employment, acceleration, and forfeiture provisions.
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| | | Stock Options | | | | Stock Awards | | | | | Name | Grant Date | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Exercisable Options (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested(5) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(5) ($) | | David R. Parker | 04/06/21 | 800,000 | - | 10.62 | 04/06/31 | - | - | - | - | | M. Paul Bunn | 11/11/20 | 360,576 | - | 7.885 | 11/11/30 | - | - | - | - | | | 04/06/21 | 100,000 | - | 10.62 | 04/06/31 | - | - | - | - | | | 04/06/21 | - | - | - | - | 33,334(1) | 908,518 | - | - | | | 05/17/23 | - | - | - | - | 5,166(2) | 140,799 | 10,334(6) | 281,653 | | | 05/17/23 | - | - | - | - | 7,750(3) | 211,226 | 15,500(7) | 422,453 | | | 06/21/24 | - | - | - | - | 21,150(4) | 576,443 | 5,288(8) | 144,124 | | Tripp Grant | 11/11/20 | 72,116 | - | 7.885 | 11/11/30 | - | - | - | - | | | 05/31/22 | - | - | - | - | - | - | 2,758(9) | 75,169 | | | 05/17/23 | - | - | - | - | 2,582(2) | 70,372 | 5,168(6) | 140,854 | | | 05/17/23 | - | - | - | - | 3,228(3) | 87,979 | 6,460(7) | 176,067 | | | 06/21/24 | - | - | - | - | 10,574(4) | 288,194 | 2,644(8) | 72,062 | | Dustin Koehl | 06/21/24 | - | - | - | - | 8,460(4) | 230,577 | 2,115(8) | 57,644 | | Joey Ballard | 11/11/20 | 120,192 | - | 7.885 | 11/11/30 | - | - | - | - | | | 05/31/22 | - | - | - | - | - | - | 2,758(9) | 75,169 | | | 05/17/23 | - | - | - | - | 2,584(3) | 70,427 | 5,168(7) | 140,854 | | | 06/21/24 | - | - | - | - | 6,342(4) | 172,851 | 1,587(8) | 43,254 |
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| (1) Represents shares of restricted stock which vested automatically on January 1, 2025. The shares are included in this column because as of December 31, 2024, they were not vested. |
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| (2) Represents the performance-based restricted stock granted pursuant to the previously disclosed Lew Thompson & Son Bonus Plan that were earned for achievement of LT Target 1 and will vest on December 31, 2025, subject to continuous employment through such date. |
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| (3) Subject to the terms of the award notice, the restricted shares will vest automatically on December 31, 2025. |
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| (4) Represents the time-based RSUs granted pursuant to the 2024 Long-Term Incentive Plan. The material terms of the 2024 Long-Term Incentive Plan are discussed in more detail under the heading 2024 Long-Term Incentive Plan in the Compensation Discussion and Analysis. |
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| (5) The market value was calculated by multiplying the closing market price of our stock on December 31, 2024 ($27.255) by the number of restricted shares that have not vested. |
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| (6) Represents the performance-based restricted stock granted pursuant to the previously disclosed Lew Thompson & Son Bonus Plan. The table reflects the maximum shares payable with respect to the awards, as the performance during 2024 exceeded the target. This does not reflect any opinion or projection of management concerning the ultimate level of satisfaction of such performance goals for the performance period. |
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| (7) Subject to the terms of the award notice, the restricted shares will vest subject the attainment of a certain cumulative Adjusted EPS goals for the three-years ended December 31, 2026. The table reflects the maximum shares payable with respect to the awards, as performance during 2024 exceeded the target. This does not reflect any opinion or projection of management concerning the ultimate level of satisfaction of such performance goals for the performance period. |
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| (8) Represents the performance-based RSUs granted pursuant to the 2024 Long-Term Incentive Plan. The material terms of the 2024 Long-Term Incentive Plan are discussed in more detail under the heading 2024 Long-Term Incentive Plan in the Compensation Discussion and Analysis. The table reflects the threshold shares payable with respect to the awards, as the performance period did not begin until January 1, 2025. This does not reflect any opinion or projection of management concerning the ultimate level of satisfaction of such performance goals for the performance period. |
OUTSTANDING EQUITY AWARDS AT YEAR-END TABLE
| (9) Subject to the terms of the award notice, the restricted shares will vest subject the attainment of a certain cumulative Adjusted EPS goal for the three-years ended December 31, 2025 and a certain consolidated freight revenue goal for the fiscal year ended December 31, 2025. The table reflects the threshold shares payable with respect to the awards, as performance during 2024 did not exceed the threshold. This does not reflect any opinion or projection of management concerning the ultimate level of satisfaction of such performance goals for the performance period. |
OPTIONS EXERCISED AND STOCK VESTED TABLE
OPTIONS EXERCISED AND STOCK VESTED TABLE The following table sets forth certain information concerning the values realized upon the exercising of options and vesting of restricted stock during 2024. No Named Executive Officer exercised options during 2024.
OPTIONS EXERCISED AND STOCK VESTED TABLE
| Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | David R. Parker | - | - | | M. Paul Bunn | 19,778 | 507,596 | | Tripp Grant | 5,984 | 163,094 | | Dustin Koehl | - | - | | Joey Ballard | 5,338 | 145,487 |
OPTIONS EXERCISED AND STOCK VESTED TABLE
| (1) Determined by multiplying the number of shares acquired upon vesting on February 28, 2024, by $24.64, the closing price on February 28, 2024, and the number of shares acquired upon vesting on December 31, 2024, by $27.255, the closing price on December 31, 2024. |
NONQUALIFIED DEFERRED COMPENSATION TABLE
NONQUALIFIED DEFERRED COMPENSATION TABLE
NONQUALIFIED DEFERRED COMPENSATION TABLE
| Name | Executive contributions in last FY(1) ($) | Registrant contributions in last FY(2) ($) | Aggregate earnings in last FY(3) ($) | Aggregate withdrawals/ distribution ($) | Aggregate balance at last FYE ($) | | David R. Parker | - | - | - | - | - | | M. Paul Bunn | 155,300 | - | 44,943 | - | 386,984 | | Tripp Grant | 68,150 | 666 | 31,862 | - | 266,218 | | Dustin Koehl | - | - | - | - | - | | Joey Ballard | - | - | 12,745 | - | 97,653 |
NONQUALIFIED DEFERRED COMPENSATION TABLE
| (1) Represents contributions made by the Named Executive Officer to the Deferred Compensation Plan. The amount contributed by each Named Executive Officer is included in the “Salary” column of the Summary Compensation Table. The material terms of the Deferred Compensation Plan are discussed in more detail under the heading Other Compensation in the Compensation Discussion and Analysis. |
NONQUALIFIED DEFERRED COMPENSATION TABLE
| (2) Represents Company matching contributions under the Deferred Compensation Plan. The amount contributed by the Company is included in the “All Other Compensation” column of the Summary Compensation Table. |
NONQUALIFIED DEFERRED COMPENSATION TABLE
| (3) Represents earnings on amounts contributed to the Deferred Compensation Plan based on the investment options chosen by the individual Named Executive Officer, none of which represents an above-market return. |
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE We provide fair and equitable compensation to our employees through a combination of competitive base pay, incentives, retirement plans, and other benefits. We are disclosing the following pay ratio and supporting information, which compares the annual total compensation of our employees other than Mr. Parker (including full-time, part-time, seasonal, and temporary employees) and the annual total compensation of Mr. Parker, our CEO, as required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. For 2024, our last completed fiscal year:
PAY RATIO DISCLOSURE
| ● | The median of the annual total compensation of all of our employees (other than our CEO) was $56,615; and |
PAY RATIO DISCLOSURE
| ● | The annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $2,039,597. |
PAY RATIO DISCLOSURE
Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 36.0 to 1. Our median employee was determined as of December 31, 2024. To identify the median employee, we compared the base pay of our employees as reflected in our payroll records for 2024, which was our measurement period. We selected the determination date and measurement period because they are recent periods for which employee census and compensation information are readily available. We annualized the compensation levels for permanent full-time and part-time employees that worked less than the full year. We selected total “wages, tips, other compensation,” as reported on Internal Revenue Service Form W-2, as our compensation measure because it is readily available in our existing payroll systems, it is consistently calculated for each employee, and because it is a reasonable proxy for total compensation for purposes of determining the median employee. We calculated such employee’s annual total compensation for 2024 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in that employee’s annual total compensation of $56,615. The median employee’s annual total compensation includes salary and overtime pay, as well as incentive payments, retirement plan benefits, company matching contributions to our 401(k) plan, and the cost of health and other benefits. Median employee compensation reflects that student drivers averaged approximately 43% of our employees for 2024, which had the effect of lowering our median employee compensation.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(2) ($) | Average Summary Compensation Table Total Non-PEO NEO’s(3) ($) | Average Compensation Actually Paid to Non-PEO NEO’s(4) ($) | TSR(5) ($) | Peer Group TSR(6) ($) | Net Income (Loss) (in thousands)(7) ($) | Adjusted EPS(8) ($) | | 2024 | 2,039,597 | 3,011,597 | 1,316,925 | 1,600,609 | 434.47 | 133.76 | 35,921 | 1.98 | | 2023 | 1,381,818 | 6,199,680 | 1,172,988 | 2,206,158 | 363.79 | 130.87 | 55,229 | 2.08 | | 2022 | 2,116,809 | 4,926,410 | 1,039,128 | 1,823,658 | 270.24 | 97.55 | 108,682 | 2.92 | | 2021 | 5,833,933 | 8,980,311 | 1,537,303 | 2,836,783 | 204.49 | 120.41 | 60,731 | 1.81 | | 2020 | 1,070,965 | 1,330,709 | 1,273,190 | 1,342,031 | 114.58 | 106.29 | (42,718) | 0.54 |
PAY VERSUS PERFORMANCE
| (1) Reflects compensation amounts reported in the Summary Compensation Table (the “SCT”) for our PEO, David R. Parker, for the respective years shown. |
PAY VERSUS PERFORMANCE
| (2) To calculate the compensation actually paid for our PEO, the following adjustments were made to SCT total compensation, calculated in accordance with the SEC methodology for determining compensation actually paid for each year shown: |
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO ($) | Deduct Stock and Option Awards Reported in the Summary Compensation Table ($) | Add YE Fair Value of Awards Granted During the Covered FY that are Outstanding and Unvested as of the End of the Covered FY ($) | Add Change in Fair Value as of the End of the Covered FY for Awards Granted in a Prior FY that are Outstanding and Unvested as of the Covered FY ($) | Add Change in Fair Value as of the Vesting Date for Awards Granted in a Prior FY that Vested During the Covered FY ($) | Deduct Fair Value of Awards Forfeited During the Covered FY ($) | Average Compensation Actually Paid to PEO ($) | | 2024 | 2,039,597 | - | - | - | 972,000 | - | 3,011,597 | | 2023 | 1,381,818 | - | - | 4,974,000 | (156,138) | - | 6,199,680 | | 2022 | 2,116,809 | - | - | 2,746,882 | 62,719 | - | 4,926,410 | | 2021 | 5,833,933 | (3,939,000) | 5,025,000 | 1,855,479 | 204,899 | - | 8,980,311 | | 2020 | 1,070,965 | - | - | 263,780 | 17,053 | (21,089) | 1,330,709 |
PAY VERSUS PERFORMANCE
| (3) The following non-PEO NEOs are included in the average figures shown: | | 2024: M. Paul Bunn, Tripp Grant, Dustin Koehl, and Joey Ballard. | | 2023: M. Paul Bunn, Tripp Grant, Samuel F. Hough, Lynn Doster, and Joey B. Hogan. | | 2022: M. Paul Bunn, Tripp Grant, Joey B. Hogan, Samuel F. Hough, and Lynn Doster. | | 2021: M. Paul Bunn, Tripp Grant, Joey B. Hogan, Samuel F. Hough, Lynn Doster, and John A. Tweed. | | 2020: M. Paul Bunn, Joey B. Hogan, Samuel F. Hough, John A. Tweed, and Richard B. Cribbs. |
PAY VERSUS PERFORMANCE
| (4) To calculate the compensation actually paid for our PEO, the following adjustments were made to SCT total compensation, calculated in accordance with the SEC methodology for determining compensation actually paid for each year shown: |
PAY VERSUS PERFORMANCE
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Deduct Stock and Option Awards Reported in the Summary Compensation Table ($) | Add YE Fair Value of Awards Granted During the Covered FY that are Outstanding and Unvested as of the End of the Covered FY ($) | Add Change in Fair Value as of the End of the Covered FY for Awards Granted in a Prior FY that are Outstanding and Unvested as of the Covered FY ($) | Add Change in Fair Value as of the Vesting Date for Awards Granted in a Prior FY that Vested During the Covered FY ($) | Deduct Fair Value of Awards Forfeited During the Covered FY ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2024 | 1,316,925 | (549,997) | 634,101 | 114,669 | 223,353 | (138,442) | 1,600,609 | | 2023 | 1,172,988 | (359,004) | 355,613 | 795,208 | 241,353 | - | 2,206,158 | | 2022 | 1,039,128 | (143,751) | 221,960 | 594,990 | 111,330 | - | 1,823,658 | | 2021 | 1,537,303 | (821,218) | 1,082,822 | 902,448 | 135,428 | (140,322) | 2,836,783 | | 2020 | 1,273,190 | (642,638) | 640,603 | 101,476 | 6,052 | (36,651) | 1,342,031 |
PAY VERSUS PERFORMANCE
| (5) The total stockholder return assumes that $100 was invested on December 31, 2019 in the Company and that dividends were reinvested when and as paid. |
PAY VERSUS PERFORMANCE
| (6) The total stockholder return assumes that $100 was invested on December 31, 2019 in the NASDAQ Transportation Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K, and that dividends were reinvested when and as paid. |
PAY VERSUS PERFORMANCE
| (7) Reflects net income (loss) in the Company’s Consolidated Statements of Operations included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2024, 2023, 2022, 2021, and 2020. |
PAY VERSUS PERFORMANCE
| (8) Our company-selected measure is Adjusted EPS, which is calculated based on our diluted earnings per share, adjusted for amortization of intangibles and certain non-recurring charges and gains. |
PAY VERSUS PERFORMANCE
The relationship between the compensation actually paid to the PEO and the average compensation actually paid to the non-PEO NEOs and the cumulative total stockholder return of the Company and the NASDAQ Transportation Index for 2024, 2023, 2022, 2021, and 2020 is represented by the graph below: The relationship between the compensation actually paid to the PEO and the average compensation actually paid to the non-PEO NEOs and the Company’s net income (loss) for 2024, 2023, 2022, 2021 and 2020 is represented by the graph below: The relationship between the compensation actually paid to the PEO and the average compensation actually paid to the non-PEO NEOs and the Company’s Adjusted EPS for 2024, 2023, 2022, 2021, and 2020 is represented by the graph below:
Tabular Disclosure of the Most Important Measures to Link Compensation Actually Paid for 2024 to Company Performance
Tabular Disclosure of the Most Important Measures to Link Compensation Actually Paid for 2024 to Company Performance The following financial metrics were the most important measures used to link compensation actually paid for 2024 to Company Performance.
Tabular Disclosure of the Most Important Measures to Link Compensation Actually Paid for 2024 to Company Performance
| Adjusted Earnings Per Share | | Adjusted Operating Income | | EBITDA |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The following table provides information concerning the 2024 compensation of our non-employee directors.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Total ($) | | Dr. Benjamin S. Carson, Sr. | 79,916 | 99,998 | 179,914 | | D. Michael Kramer | 89,416 | 99,998 | 189,414 | | Bradley A. Moline | 81,916 | 99,998 | 181,914 | | Rachel Parker-Hatchett | 69,416 | 99,998 | 169,414 | | Joey Hogan | 69,416 | 99,998 | 169,414 | | Tracy Rosser | 71,916 | 99,998 | 171,914 | | Herbert J. Schmidt | 79,416 | 99,998 | 179,414 | | W. Miller Welborn | 109,416 | 99,998 | 209,414 |
DIRECTOR COMPENSATION
| (1) This column represents the amount of cash compensation received for Board and committee service during 2024. Any differences between the amounts set forth in this column and the fees set forth in the Narrative to Director Compensation below are due to proration of such fees for partial year of service. |
DIRECTOR COMPENSATION
| (2) Each of our non-employee directors elected at the 2024 Annual Meeting of Stockholders received 4,278 shares of Class A RSUs on May 15, 2024. The grant date fair value of the restricted stock was computed in accordance with FASB ASC Topic 718. The RSUs will vest on May 15, 2025, subject to acceleration for death, disability, retirement, and change-in-control (where the director’s service is terminated in connection with such change-in-control). |
Narrative to Director Compensation
Narrative to Director Compensation For 2024, directors who are not our employees or employees of one of our subsidiaries were eligible to receive the following annual cash retainers and annual committee fees (on an annualized basis):
Narrative to Director Compensation
| Board Position | | | Non-Employee Director Annual Cash Retainer | $70,000 | | Additional Lead Independent Annual Cash Retainer | $25,000 | | Chairperson of the Audit Committee | $17,500 | | Member of the Audit Committee | $7,500 | | Chairperson of the Compensation Committee | $12,500 | | Member of the Compensation Committee | $7,500 | | Chairperson of the Nominating Committee | $10,000 | | Member of the Nominating Committee | $7,500 | | Chairperson of the Risk Committee | $7,500 | | Member of the Risk Committee | $5,000 |
Narrative to Director Compensation
Directors did not receive meeting attendance fees. The cash and equity compensation are pro-rated for any partial year of service. Directors who are our employees or employees of one of our subsidiaries do not receive compensation for board or committee service. Directors who are not our employees or employees of one of our subsidiaries received a grant of Class A common stock equivalent to approximately $100,000 at the time of our Board's annual meeting. Directors can only sell these shares if, after the sale, they maintain a minimum five times the annual cash retainer in value of Class A common stock. The annual equity retainer is in the form of RSUs scheduled to vest on the first anniversary of the grant date, subject to acceleration for death, disability, retirement, and change-in-control (where the director’s service is terminated in connection with such change-in-control). Directors are also eligible to participate in the Deferred Compensation Plan, with respect to cash compensation. During 2024, no director contributed to the Deferred Compensation Plan.