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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 28, 2023
| | | | | | | | | | | |
| PINNACLE FINANCIAL PARTNERS, INC. |
| (Exact name of registrant as specified in charter) |
| | |
| Tennessee | 000-31225 | 62-1812853 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| | | |
150 Third Avenue South, Suite 900, Nashville, Tennessee 37201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615) 744-3700 (Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
| | | | | | | | | | | | | | |
| Title of Each Class | | Trading Symbol | | Name of Exchange on which Registered |
| Common Stock par value $1.00 | | PNFP | | The Nasdaq Stock Market LLC |
| Depositary Shares (each representing 1/40th interest in a share of 6.75% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series B) | | PNFPP | | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
(e)
2023 Cash Incentive Plan. Effective February 28, 2023, the Human Resources and Compensation Committee (the “Committee”) of the Board of Directors of Pinnacle Financial Partners, Inc. (the “Company”) approved the Pinnacle Financial Partners, Inc. 2023 Annual Cash Incentive Plan (the “Plan”). Pursuant to the Plan, all employees of the Company compensated via a predetermined salary or hourly wage, including those executive officers of the Company that are expected to be identified as the Company’s Named Executive Officers in the proxy statement for the Company’s annual meeting of shareholders to be held in April 2023 (the “Named Executive Officers’”), are eligible to receive cash incentive payments ranging from 10 percent to 110 percent of the participant’s base salary at target level performance in the event that Pinnacle Bank’s ratio of classified assets to the sum of Pinnacle Bank’s tier 1 risk-based capital and its allowance for credit losses (the “Classified Asset Ratio”) is not more than a predetermined ratio and (i) the Company meets (A) a fully diluted earnings per common share goal for the year ended December 31, 2023 (“diluted EPS”) and (B) an annual total revenue goal approved by the Committee, excluding, in each case, such items as the Committee may determine as described in the Plan, and (ii) in certain cases, the employee meets certain individual performance objectives. Payments under the Plan will be based 75% on the diluted EPS goal and 25% on the revenue goal. Each participant will be assigned an “award tier” based on their position within the Company, his or her experience level or other factors. For performance that exceeds targeted levels participants may receive up to 125% of their targeted payout. Participant awards may be increased or decreased as a result of the participant’s performance evaluation for 2023 such that the participant’s target award may be adjusted up 10% or down 10% based on their final performance rating. Participant awards may also be increased or decreased at the Committee’s discretion.
Set out below are the percentages of each of the Named Executive Officers’ base salaries that may be earned at “target,” and “maximum” level payout (without giving effect to the application of any positive or negative adjustment that the Committee may approve). Payouts between the payment tiers will be interpolated based on the Company’s results compared to the performance metrics.
| | | | | | | | |
| Employee | Percentage of Base Salary at Target Level Payout | Percentage of Base Salary at Maximum Level Payout |
| M. Terry Turner | 110% | 137.5% |
| Robert A. McCabe, Jr. | 110% | 137.5% |
| Richard D. Callicutt, II | 80% | 100% |
| Hugh M. Queener | 80% | 100% |
| Harold R. Carpenter | 80% | 100% |
The foregoing summary is qualified in its entirety by reference to the Plan, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PINNACLE FINANCIAL PARTNERS, INC.
| | | | | | | | |
| | By: | /s/Harold R. Carpenter |
| | Name: | Harold R. Carpenter |
| | Title: | Executive Vice President and |
| | | Chief Financial Officer |
Date: March 6, 2023
PINNACLE FINANCIAL PARTNERS, INC.
2023 ANNUAL CASH INCENTIVE PLAN
As approved by the Human Resources and Compensation Committee
of the Board of Directors of Pinnacle Financial Partners, Inc. on
February 28, 2023
PLAN OBJECTIVES:
The overall objectives of the 2023 Annual Cash Incentive Plan (the “Plan”) are to:
1.Motivate participants to achieve important corporate soundness thresholds and corporate revenue and earnings per diluted share objectives for 2023, and
2.Provide a reward system that encourages teamwork and cooperation in the achievement of firm-wide goals.
EFFECTIVE DATES OF THE PLAN:
The Plan is effective for the performance period from January 1, 2023 (Effective Date) through December 31, 2023 (the “Performance Period”) and for such period thereafter as shall be necessary to make all payments earned under the Plan.
ADMINISTRATION:
The Human Resources and Compensation Committee of the Board of Directors (the “HRCC”) of Pinnacle Financial Partners, Inc. (the “Company”) is responsible for the overall administration of the Plan and shall have the authority to select the associates of the Company or any of its subsidiaries who are eligible for participation in the Plan (such associates, the “Participants”). The CFO, with the oversight of the CEO, shall provide the HRCC with periodic updates as to the status of the Plan as follows:
•Produces status reports on a periodic basis to the CEO, the Leadership Team and the HRCC in order to enhance the ongoing effectiveness of the Plan. The CEO has discretion related to communication of the status of awards and Company performance under the Plan to all Plan Participants.
•Makes recommendations for any Plan modifications (including target performance or payout awards) as a result of substantial changes to the organization or participants’ responsibilities to ensure fairness to all Plan Participants.
•At the end of the Plan period, prepares, verifies, approves and submits the appropriate award calculations and payouts authorized under the Plan to the CEO and, ultimately the HRCC, for approval and distribution.
The Company’s Chief Risk Officer at least annually shall evaluate, report and discuss with the HRCC whether features of the Plan should be limited in order to ensure that the Plan does not pose imprudent risks to the Company and that the Plan does not encourage the manipulation of reported earnings of the Company to enhance any Participant’s compensation.
The HRCC is authorized to interpret the Plan, to establish, amend and/or rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan. The HRCC may correct any defect or omission or reconcile any inconsistency in the Plan in the manner and to the extent the HRCC deems necessary or desirable. Any decision of the HRCC in the interpretation and administration of Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. Nothing in this Plan shall preclude the HRCC from granting awards to Participants pursuant to other compensation arrangements of the Company.
ELIGIBILITY:
Except as otherwise provided below, all associates of the Company and its subsidiaries (other than, unless otherwise determined by the HRCC, those that become associates as a result of an acquisition consummated by the Company during the Performance Period) who are compensated via a predetermined salary or hourly wage and are not included in any other annual cash incentive or cash performance-based compensation program or plan are eligible for participation in the Plan. Participants who are not eligible for a full award due to their performance evaluation (see below – Target Award) should be notified by their Leadership Team member as soon as possible prior to distribution of awards.
Certain associates that are compensated via a commission schedule or commission grid have an opportunity to achieve significant variable pay compensation due to escalating payouts pursuant to the commission schedule or grid based on their individual performance. As a result, such commission-based associates are not eligible for participation in the Plan unless otherwise authorized under special arrangement approved by the HRCC.
FORFEITURE OF AWARDS:
Any Participant whose employment terminates for any reason prior to distribution of awards, which is expected to occur in January 2024, will not be eligible for distribution of awards under the Plan unless approved by the HRCC or as otherwise provided in an agreement between the Company and such Participant.
ETHICS:
The intent of this Plan is to fairly reward individual and team achievement. Any associate who manipulates or attempts to manipulate the Plan for personal gain at the expense of clients, other associates or Company assets or objectives will be subject to appropriate disciplinary action, including the non-payment of any award otherwise due or paid to such associate under this Plan.
In addition and upon the approval of the Company’s board of directors or the HRCC, payments under the Plan paid to a Participant may be subject to recovery and “clawback” by the Company, and repaid by such Participant, if the payments are based on materially inaccurate financial statements or other materially inaccurate performance metric criteria. Moreover, payouts under the Plan shall be subject to any clawback or recoupment policy adopted by the Company, including as a result of any rules and regulations adopted by the Securities and Exchange Commission or any other regulatory agency or securities exchange adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Clawback Policy”). This includes the Company’s Compensation Clawback Policy applicable to the Company’s Executive Officers, as defined in such policy, as approved by the Company’s Board of Directors in January 2021, as such policy may be amended, and any policy adopted by the Company as required by the listing standards of any securities exchange on which the Company’s securities may trade, including any Dodd-Frank Clawback Policy.
PLAN FUNDING:
The Plan assets will be funded from the results of operations of the Company with all assets being commingled with the assets of the Company.
TIMING OF AWARDS:
No later than the last day of the first quarter of 2024, the HRCC shall certify whether the performance goals for the Performance Period (or any interim portion thereof) have been achieved. Any awards to be distributed pursuant to the Plan shall be distributed on a date determined by the Company prior to January 31, 2024 or as soon as possible thereafter, but in no event later than March 15, 2024. No award will be distributed prior to January 1, 2024.
TARGET AWARD:
Each Participant will be assigned an “award tier” based on their position within the Company, their experience level or other factors. Each Participant’s Leadership Team member is responsible for notifying each Participant of his or her “award tier”. The “award tier” will be expressed as a percentage of the Participant’s base salary ranging from 10% to 110%. In order to determine the “target award”, Participants will multiply their “award tier percentage” by their actual YTD base salary paid for 2023 as of December 31, 2023. Overtime or other wage components are not considered in these calculations.
The incentive for Participants that begin their employment with the Company during the period from January 1, 2023 through December 31, 2023 and who become Participants in the Plan will be calculated by multiplying their “award tier percentage” by their actual YTD base salary paid for 2023 as of December 31, 2023. Overtime or other wage components are not considered in these calculations.
PERFORMANCE CRITERIA:
Awards under the Plan shall be conditioned on the attainment of one or more corporate performance goals recommended by the CEO and approved by the HRCC for the 2023 fiscal year. Additionally, the CEO, based on input from any Participant’s team leader, may include performance criteria for any individual or groups of participants as he deems appropriate, subject to the review of the HRCC. Notwithstanding the foregoing, the HRCC shall have the sole discretion to establish such goals for the Company’s Named Executive Officers (as that term is defined in the rules and regulations of the Securities and Exchange Commission) and the CEO shall not set the performance goals applicable to participation in the Plan for himself or the other Named Executive Officers, and such goals shall be established solely by the HRCC.
After December 31, 2023, the HRCC shall determine whether and to what extent each performance goal has been met. In determining whether and to what extent a performance goal has been met, the HRCC may consider such matters as the HRCC deems appropriate.
DISCRETIONARY INCREASES AND REDUCTIONS:
The CEO may award up to an additional 10% of base pay to any Participant in the Plan, other than the CEO, based on extraordinary individual performance. Likewise, the CEO may reduce a Participant’s, other than the CEO’s, award by up to 100% of the calculated award for individual performance, if the Participant did not exhibit a strong commitment to the Company’s mission or values. Notwithstanding the foregoing, the HRCC shall have the sole discretion to accept the CEO’s recommendations for increases or decreases of awards pursuant to this paragraph with respect to Named Executive Officers and to approve any such discretionary adjustments for the CEO; and may make such other adjustments with respect to the Named Executive Officers that are consistent with the Plan.
Discretionary adjustments outside these parameters shall be approved by the HRCC prior to distribution; however any discretionary adjustment with respect to payments to the Company’s Named Executive Officers, including the CEO, must be approved by the HRCC prior to distribution.
AMENDMENTS, TERMINATIONS, AND OTHER MATTERS:
The HRCC has the right to amend or terminate this Plan in any manner it may deem appropriate in its discretion at any time, including, but not limited to the ability to include or exclude any associate or group of associates from participation in the Plan, modify the award tiers or percentages or modify or waive performance targets.
Should the Company enter into any merger or purchase agreement (including an agreement with respect to a transaction, consummation of which would constitute a change of control of the Company), significant market expansion or other materially significant strategic event, the HRCC may amend the Plan (including the performance criteria) or adjust the Company’s actual results to exclude items as it may deem appropriate under the circumstances; in addition, the HRCC may amend the Plan (including the performance criteria), or adjust the Company’s actual results to exclude the impact of any non-recurring, unusual or extraordinary transaction, event or occurrence which may materially impact the Company’s financial position or results of operations for the fiscal year (e.g., capital transactions, market expansions, other real estate expenses, gains or losses on the sale of securities, wholesale bank restructuring gains or losses, divestiture of assets at gains or losses, bank, branch or other acquisitions, changes in law or accounting rules, etc.).
Furthermore, the HRCC may amend the Plan, including the performance goals, at any time to consider the impact of regulatory matters or if required or appropriate to conform to regulatory requirements, guidance or advice or if a change in regulations or regulatory guidance materially impacts performance criteria.
Furthermore, this Plan does not, nor should any Participant imply that it shall, create a contractual relationship or rights between the Company or any associate of the Company or any of the Company’s subsidiaries. No Participant should rely on this Plan as to any awards that the associate believes they might otherwise be entitled to receive. This Plan shall be governed by and construed in accordance with the laws of the State of Tennessee, without regard to any conflicts of laws or principles.