Cullen/Frost Bankers, Inc DEF 14A, filed Mar 10, 2023

Cullen/Frost Bankers, Inc. (CFR)

DEF 14A 2023-03-10

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Cullen/Frost Bankers, Inc filed this DEF 14A on March 10, 2023.

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☐			Preliminary Proxy Statement

☐			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒			Definitive Proxy Statement

☐			Definitive Additional Materials

☐			Soliciting Material Pursuant to §240.14a-12


☒						No fee required

☐						Fee paid previously with preliminary materials

☐						Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11


1.			To elect 13 director nominees to serve on the Board of Directors of Cullen/Frost for a one-year term that will expire at the 2024 Annual Meeting of Shareholders;

2.			To provide nonbinding approval of executive compensation;

3.			To provide a nonbinding selection of the frequency of future votes on executive compensation;

4.			To ratify the selection of Ernst & Young LLP to act as independent auditors of Cullen/Frost for the fiscal year that began January 1, 2023; and

5.			To transact any other business that may properly come before the meeting.


			By Order of the Board of Directors,

			COOLIDGE E. RHODES, JR.
			Group Executive Vice President
			General Counsel and Corporate Secretary

Dated: March 10, 2023



TABLE OF CONTENTS		Page
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
PROXY SUMMARY		1
PROPOSAL NO. 1 - ELECTION OF DIRECTORS		7
GENERAL INFORMATION ABOUT THE BOARD OF DIRECTORS		8
	Meetings and Attendance	8
	Committees of the Board	8
	Leadership Structure	9
	Risk Oversight	10
	Director Refreshment and Evaluation Process	12
	Director Compensation	13
DIRECTOR NOMINEES		15
CORPORATE GOVERNANCE MATTERS		21
	Director Independence	21
	Meetings of Non-Management Directors	22
	Communications with Directors	22
	Corporate Governance Guidelines	22
	Code of Business Conduct and Ethics	22
CERTAIN TRANSACTIONS AND RELATIONSHIPS		23
EXECUTIVE COMPENSATION AND RELATED INFORMATION		24
	Compensation and Benefits Committee Governance	24
	Compensation and Benefits Committee Interlocks and Insider Participation	25
	Compensation and Benefits Committee Report	25
	Compensation Discussion and Analysis	26
	Executive Summary	26
	2022 Say on Pay Vote	27
	Objectives of the Compensation Program	28
	Design of the Total Compensation Program and Overview of Compensation Decisions Made in 2022	28
	Relation of Pay Practices to Risk Management	30
	Elements of Compensation: The 2022 Compensation Program Detail and Key 2022 Actions	31
	Summary Compensation Table	41
	Grants of Plan-Based Awards Table	42
	Holdings of Previously Awarded Equity Table	43
	Options Exercised and Stock Vested Table	44
	Post-Employment Benefits	44
	Potential Payments upon Termination or Change in Control	46
	Pay versus Performance	48
	Pay Ratio	51
	Stock Ownership of Section 16(a) Executive Officers and Directors	52
PROPOSAL NO. 2 - SAY ON PAY		53
PROPOSAL NO. 3 - FREQUENCY OF SAY ON PAY		53
AUDIT COMMITTEE REPORT		54
PROPOSAL NO. 4 - RATIFICATION OF THE APPOINTMENT OF AUDITORS		55
PRINCIPAL SHAREHOLDERS		56
DELINQUENT SECTION 16(A) REPORTS		56
RECORD DATE AND VOTING RIGHTS		56
	Proxies	56
	Quorum and Voting Requirements	57
	Expenses of Solicitation	57
	Householding	58
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR 2024 ANNUAL SHAREHOLDER MEETING		58
FORWARD-LOOKING STATEMENTS		58
OTHER MATTERS		59



Date:			Wednesday, April 26, 2023

Time:			10:30 a.m., San Antonio time

Location:			Frost Tower Conference Center, 111 West Houston Street, San Antonio, Texas 78205

Record Date:			March 2, 2023




Online	By Phone	By Mail	In Person

Registered holders: www.proxydocs.com/CFR Beneficial holders: Follow instructions provided by your broker, bank, or other nominee.	Call the phone number at the top of your proxy card.	Complete, sign, date and return your proxy card in the envelope provided.	If you choose to vote during the Annual Meeting, you will need the control number appearing on the Notice of Internet Availability of Proxy Materials or proxy card distributed to you.


Item		Board Recommendation

1.	To elect 13 director nominees to serve on the Board of Directors of Cullen/Frost for a one-year term that will expire at the 2024 Annual Meeting of Shareholders;	FOR

2.	To provide nonbinding approval of executive compensation;	FOR

3.	To provide a nonbinding selection of the frequency of future votes on executive compensation;	ONE YEAR

4.	To ratify the selection of Ernst & Young LLP to act as independent auditors of Cullen/Frost for the fiscal year that began January 1, 2023; and	FOR

5.	To transact any other business that may properly come before the meeting.	__


Mission Statement

We will grow and prosper, building long-term relationships based on top-quality service, high ethical standards and safe, sound assets.


Integrity			A steadfast adherence to an ethical code. We go out of our way to do the right thing, even when no one is looking.
Caring			We are committed to investing in our communities and providing support for programs and services which have a direct impact on the people who live and work there. You’ll find our employees actively working in our communities through charitable events, facilitating financial literacy classes and more.
Excellence			Commitment to being outstanding. We go above and beyond expectations to deliver sustained superior financial performance and satisfaction for all.




COMMITMENT TO SOUND CORPORATE GOVERNANCE All of our directors, officers and employees are expected to adhere to the principles of honesty and transparency as set forth in our Business Code of Conduct and Ethics and our policies. We are committed to ensuring that our Board is accountable and addresses the interests of all of our stakeholders. In 2022: •The Corporate Governance & Nominating Committee formally added the oversight of the Company's ESG business strategy to its charter to reflect our commitment to sustainability. •We created an executive level ESG Steering Committee. •The Board appointed three new directors that bring diversity, as well as human capital and legal experience.						COMMITMENT TO OUR PEOPLE Our commitment to our people requires us to seek to attract and retain a workforce that is excellent in its character, composition and diversity. We continually work to improve the way we recognize and honor our people. In 2022: •We formed a Diversity, Equity, Inclusion & Belonging ("DEIB") Executive Governance Council that oversees our DEIB strategy and initiatives. •We embedded DEIB and cultural competency concepts into compliance training and leadership development training. •We completed an employee engagement survey and collaborated with group executives to focus on areas for improvement.



COMMITMENT TO OUR COMMUNITIES Our commitment to our communities includes our community reinvestment activities, our partnership with the United Way and our organic growth strategy. In 2022: •Frost and the Frost Foundation distributed over $5 million in donations and grants to hundreds of organizations. •Frost for Good participated in 138 projects for 95 community organizations. •Frost employees provided over 14,000 hours of service to our communities.						COMMITMENT TO CONSERVATION Our commitment to conservation begins with understanding our responsibility to care for our environment and the natural resources that benefit humankind. We actively look for ways to reduce waste, increase operational efficiency, and eliminate unnecessary adverse impacts on the environment in which we operate. In 2022: •We installed electric vehicle charging infrastructure in many of the newly-constructed Frost-owned locations. •We used 100% LED lighting in all newly-opened locations, reducing electricity consumption. •We recycled over 1.7 million pounds of paper in 2022.



			Phillip D. Green			Chairman of the Board and CEO of Cullen/Frost and Frost Bank

			Jerry Salinas			Group Executive Vice President and CFO of Cullen/Frost and Frost Bank

			Paul H. Bracher			President of Cullen/Frost; Group Executive Vice President and Chief Banking Officer of Frost Bank

			Jimmy Stead			Group Executive Vice President and Chief Consumer Banking and Technology Officer of Cullen/Frost and Frost Bank

			Coolidge E. Rhodes, Jr.			Group Executive Vice President and General Counsel and Corporate Secretary of Cullen/Frost and Frost Bank


Committee	Members (*Chair)	Primary Responsibilities	Meetings in 2022

Audit	Cynthia J. Comparin* Anthony R. Chase Samuel G. Dawson David J. Haemisegger Charles W. Matthews Linda B. Rutherford	•Assists Board oversight of the integrity of our financial statements, compliance with legal and regulatory requirements, the independent auditors’ qualifications and independence, and the performance of the independent auditors and our internal audit function. •Appoints, compensates, retains and oversees the independent auditors, and pre-approves all audit and non-audit services.	5

Compensation and Benefits	Charles W. Matthews* Chris M. Avery Anthony R. Chase Samuel G. Dawson Joseph A. Pierce Linda B. Rutherford Jack Willome	•Oversight of the development and implementation of our compensation and benefits programs. •Reviews and approves the corporate goals and objectives relevant to the compensation of the Chief Executive Officer (the "CEO"), evaluates the CEO’s performance based on those goals and objectives, and sets the CEO’s compensation based on the evaluation. •Oversight of human capital management.	6

Corporate Governance and Nominating	Charles W. Matthews* Chris M. Avery Anthony R. Chase Samuel G. Dawson Joseph A. Pierce Linda B. Rutherford Jack Willome	•Maintains and reviews our corporate governance principles. •Oversight of and establishes procedures for the evaluation of the Board. •Identifies and recommends candidates for election to the Board. •Reviews related party transactions. •Responsible for the CEO succession plan discussions. •Oversight of our ESG business strategy.	3

Executive	Phillip D. Green* Patrick B. Frost Charles W. Matthews	•Acts for the Board in between meetings, except as limited by resolutions of the Board, our Articles of Incorporation or Bylaws, and applicable law.	2

Risk	Crawford H. Edwards* Carlos Alvarez Patrick B. Frost Phillip D. Green David H. Haemisegger Charles W. Matthews Jack Willome	•Oversight of our enterprise risk management framework, including policies, procedures, strategies and systems established to measure, mitigate, monitor and report major risks. •Assists Board oversight across the organization for the types of risks to which we are exposed, including: credit, operational, compliance/regulatory, liquidity and reputation.	4

Technology	Chris M. Avery* Carlos Alvarez Cynthia J. Comparin Crawford H. Edwards Joseph A. Pierce Charles W. Matthews	•Oversight of our information technology and information security.	4


Powers and Duties of our Lead Director

•Provides independent leadership			•Leads the annual CEO evaluation
•Serves as an advisor to the Chairman			•Presides at executive sessions of the independent directors
•Engages with other directors as needed in between Board and Committee meetings			•Provides guidance to the Chairman on Board composition and refreshment
•Presides at any Board meeting at which the Chairman is not present			•Oversight of the Board's governance processes, including Board evaluations, succession planning and other governance-related matters
•Reviews the agenda, schedule, and materials for each Board meeting in advance


Topics considered during the Board and committee evaluations include:

•	Board culture	•	Strategic oversight
•	Board skills and experience	•	Committee responsibilities
•	Director refreshment	•	Board meeting mechanics
•	Risk oversight	•	Crisis management


Total Diversity
38%


FOUR ESG PILLARS


Name(1)	Fees Earned or Paid in Cash ($)(2)	Stock Awards ($)(3)	Total ($)
Carlos Alvarez	79,500	79,935	159,435
Chris M. Avery	92,250	79,935	172,185
Anthony R. Chase	96,150	79,935	176,085
Cynthia J. Comparin	99,675	79,935	179,610
Samuel G. Dawson	96,150	79,935	176,085
Crawford H. Edwards	88,125	79,935	168,060
David J. Haemisegger	88,275	79,935	168,210
Karen E. Jennings(4)	26,125	-	26,125
Charles W. Matthews	158,925	79,935	238,860
Joseph A. Pierce(4)	15,417	-	15,417
Linda B. Rutherford	67,667	79,935	147,602
Ida Clement Steen(4)	25,708	-	25,708


Fee			($)
Annual Retainer:
Annual Cash Retainer			70,000
Lead Director Retainer			25,000

Committee Retainer Fees:
Audit Chair			30,000
Audit Member			14,000
Compensation & Benefits Chair			20,000
Compensation & Benefits Member			10,000
Corporate Governance and Nominating Chair			20,000
Corporate Governance and Nominating Member			7,500
Risk Chair			20,000
Risk Member			10,000
Technology Chair			10,000
Technology Member			5,000
Executive Non-Management Member			5,000

Equity Grant:
Deferred Stock Units Target Value			80,000


Name			Deferred Stock Units Outstanding (#)
Carlos Alvarez			8,609
Chris M. Avery			4,323
Anthony R. Chase			2,140
Cynthia J. Comparin			2,724
Samuel G. Dawson			3,691
Crawford H. Edwards			8,609
David J. Haemisegger			8,064
Charles W. Matthews			6,903
Joseph A. Pierce			—
Linda B. Rutherford			598


Age 72 Director since 2001 Independent			Mr. Carlos Alvarez is Chairman and CEO of The Gambrinus Company, which he founded in 1986 when he moved from his native Mexico with his family to San Antonio. The Gambrinus Company is a leading U.S. craft brewer and marketer with breweries in Shiner, TX (The Spoetzl Brewery) and Berkeley, CA (Trumer Brewery). Mr. Alvarez is committed to education and has served on the board of trustees of School Year Abroad and Saint Mary’s Hall (San Antonio) and is a member of the Chancellor’s Circle for the University of Texas system. Mr. Alvarez has made significant contributions to these and other educational institutions’ endowment programs, particularly those that drive greater international engagement. In 2021, the University of Texas San Antonio College of Business was renamed the Carlos Alvarez College of Business in honor of the significant contributions he and his wife Malύ have made to the school.
			Mr. Alvarez is a board member of the World Affairs Council of America (Washington, D.C.) and the World Affairs Council of San Antonio, which he previously served as Chairman; and he serves on the board of National Public Radio (Washington, D.C.) and Davidson College (Davidson, NC). Mr. Alvarez has extensive experience in all facets of business, including a strong background in operations and sales. He has an exceptional understanding of the role marketing strategy and branding plays in the success of a company. It is because of his experience in business operations, management, sales and marketing, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Alvarez should continue serving on the Board.


Age 68 Director since 2015 Independent			Dr. Chris M. Avery is Chairman and former CEO and President of James Avery Craftsman, Inc., a family-owned company founded by his father in 1954, to create finely crafted jewelry designs. Dr. Avery has served on the James Avery Craftsman, Inc. board of directors since 1989. A licensed physician and board-certified anesthesiologist, he left his profession as Chief of Anesthesia at Sid Peterson Memorial Hospital in Kerrville, Texas in 1991 to assist in the transition and direction of the family business. He became President and Chief Operating Officer in 1991 and later assumed the roles of CEO and Chairman of the Board in May 2007. Under his leadership, James Avery Craftsman, Inc., has become a national brand that designs, manufactures and sells jewelry in its own stores across the United States.
			Dr. Avery earned a bachelor’s degree in biology from Stephen F. Austin State University and a medical degree from the University of Texas Medical School at San Antonio (now the University of Texas Health Science Center at San Antonio). After an internship in orthopedic surgery, he worked as an ER physician in San Antonio and Kerrville. He completed an anesthesia residency at Medical Center Hospital in San Antonio and began his anesthesia practice in Kerrville. Dr. Avery is a former President of the Fredericksburg Hospital Authority board of directors and has served on the boards of Hill Country Memorial Hospital in Fredericksburg, Texas and Sid Peterson Hospital in Kerrville. It is because of his experience in business operations and management, as well as his knowledge of the communities we serve, that our Board has concluded that Dr. Avery should continue serving on the Board.


Age 68 Director since 2020 Independent			Mr. Anthony R. Chase is Chairman & CEO of ChaseSource, LP, a staffing, facilities management, and real estate development firm. ChaseSource is recognized as one of the nation’s largest minority-owned businesses by Black Enterprise Magazine. Mr. Chase started and sold three ventures (Chase Radio Partners, Cricket Wireless and ChaseCom) and now owns and operates his fourth, ChaseSource. The first, Chase Radio Partners, founded in 1992, owned seven radio stations and was sold to Clear Channel Communications in 1998. The second was Cricket Wireless a nationwide cell phone service provider that he started together with Qualcomm in 1993. He opened the first Cricket markets in Chattanooga and Nashville, TN. The third was ChaseCom, a company that built and operated call centers in the United States and India which he sold to AT&T Corporation in 2007. He is also a principal owner of the Marriott Hotel at George Bush Intercontinental Airport in Houston and the Principal Auto Toyota dealership in greater Memphis, TN. Mr. Chase serves on the boards of LyondellBasell Industries N.V., Nabors Industries Ltd. and Par-Pacific Holdings, Inc. and previously served on the Board of Heritage Crystal Clean, Inc. until 2022. Mr. Chase is a Professor of Law Emeritus at the University of Houston Law Center. Mr. Chase is passionate about community engagement and chairs the City of Houston/Harris County COVID-19 Relief Fund and co-chaired the City of Houston/Harris County Hurricane Harvey Relief Fund.
			Mr. Chase serves on several non-profit boards in Houston: Houston Endowment, Greater Houston Partnership, Texas Medical Center, MD Anderson Board of Visitors, and the Greater Houston Community Foundation. Mr. Chase served as Deputy Chairman of the Federal Reserve Bank of Dallas and the Chairman of the Greater Houston Partnership. He is also a member of the Council on Foreign Relations. A native Houstonian, Mr. Chase grew up attending Houston public schools. He is an honors graduate of Harvard College, Harvard Law School and Harvard Business School. He is also an Eagle Scout. Mr. Chase is the recipient of many awards, including the American Jewish Committee’s 2016 Human Relations Award, Houston Technology Center’s 2015 Entrepreneur of the Year, 2013 Mickey Leland Humanitarian Award (NAACP), 2013 Bob Onstead Leadership Award (GHP) and the 2012 Whitney M. Young Jr. Service Award. He also received Ernst & Young’s Entrepreneur of the Year, the Pinnacle Award (Bank of America) and the Baker Faculty Award (UH Law Center). It is because of his experience in corporate governance, banking, regulatory and real estate matters, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Chase should continue serving on the Board.


Age 64 Director since 2018 Independent			Ms. Cynthia J. Comparin is the founder and recently retired CEO of Animato Technologies Corp., a private company providing business and technology solutions to enterprise clients. She held various senior executive positions in multibillion-dollar global technology corporations throughout her career. Ms. Comparin’s areas of expertise include: independent director corporate board experience, international business, strategy development, business development, finance and accounting (including M&A and divestitures). Ms. Comparin is an independent director of Universal Display Corporation, a NASDAQ-listed company, where she serves on the Audit Committee. Ms. Comparin is a former independent director of Black Box Corporation, a NASDAQ-listed company sold in 2019. She is a National Association for Corporate Directors fellow and Board member of Latino Corporate Directors Association. Ms. Comparin also holds a certificate of Systemic Cyber Risk Governance for Corporate Directors.
			Prior to establishing Animato, Ms. Comparin created and was president of Alltel’s Enterprise Network Services Division, providing consulting, integration and operations services to worldwide customers. Before Alltel, Ms. Comparin was Vice President and General Manager for Nortel’s Network Transformation Services Division, general manager of Latin America for Recognition International, a global technology company, and spent 10 years in various U.S.-based and international management positions at EDS, which was later acquired by HP. It is because of her experience as CEO and as a board member of a NASDAQ-listed company, and her knowledge and experience in the technology industry and her insight into a wide variety of areas, including cybersecurity and extending technology to customers, as well as her knowledge of the communities we serve, that our Board has concluded that Ms. Comparin should continue serving on the Board.


Age 62 Director since 2017 Independent			Mr. Samuel G. Dawson is CEO of Pape-Dawson Engineers, Inc., one of the largest engineering firms in Texas, with offices in Austin, Corpus Christi, Dallas, Fort Worth, Houston, New Braunfels and San Antonio. He graduated from The University of Texas at Austin with a B.S. degree in Civil Engineering. In addition to managing the engineering firm, Mr. Dawson is a community leader who has contributed countless hours to various Texas organizations. He has served as President or Chairman of: Greater San Antonio Chamber of Commerce, The University of Texas Engineering Advisory Board, Trinity Baptist Church Deacon Council, The University of Texas at San Antonio Engineering Advisory Council, The Witte Museum Board, Texas Society of Professional Engineers, American Society of Civil Engineers, Rotary Club of San Antonio, San Antonio Mobility Coalition, Professional Engineers in Private Practice and Tobin Center for the Performing Arts.
			Mr. Dawson presently serves as Chairman of the Board of Southwest Research Institute serving as Vice Chair of the Corporate Governance Committee and is an active member of the Board of Haven for Hope. In 2013, Mr. Dawson was inducted into the University of Texas at Austin Cockrell School of Engineering Department of Civil, Architectural and Environmental Engineering Academy of Distinguished Alumni and in 2017 was recognized as a Distinguished graduate. It is because of his business operations and management skills, his familiarity with issues related to human resources, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Dawson should continue serving on the Board.


Age 64 Director since 2005 Independent			Mr. Crawford H. Edwards is President of Cassco Development Co., Inc. A native of Fort Worth, Mr. Edwards is the fifth generation of his family involved in managing his family’s ranching business. Since 2005, he has been engaged in the investing in and managing of commercial real estate. After graduating with a bachelor of general studies degree from Texas Christian University and the TCU Ranch Management program, he worked as a petroleum landman in Midland, Texas.
			Mr. Edwards serves on the board of directors of the following organizations: Texas and Southwestern Cattle Raisers Association, the Southwestern Exposition Livestock Show, the National Finance Credit Corporation and Visit Fort Worth, where he is also a member of the executive committee. It is because of his experience in business operations and management and real estate, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Edwards should continue serving on the Board.


Age 63 Director since 1997			Mr. Patrick B. Frost is Group Executive Vice President of Cullen/Frost and President of Frost Bank. A native of San Antonio, he earned a B.A. degree in Economics from Vanderbilt University and an MBA degree from The University of Texas at Austin. He is a director of the Christus Santa Rosa Health System, former Chairman of the Free Trade Alliance of San Antonio, and former Chairman of the Santa Rosa Children’s Hospital Foundation. Mr. Frost is also a trustee of the San Antonio Medical Foundation and serves on the advisory board of United Way of San Antonio.
			He is a past member of the Executive Committee of the San Antonio Livestock Exposition and was advisory council Chairman of the University of Texas at San Antonio College of Business. Mr. Frost was chair of the local organizing committee for the NCAA Men’s Final Four in 2004, 2008 and 2018 and chair of the Alamo Bowl in 2003 and 2013. It is because of his experience in banking and his many years at Cullen/Frost, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Frost should continue serving on the Board.


Age 68 Director since 2016			Mr. Phillip D. Green serves as Chairman and CEO of Cullen/Frost Bankers, Inc. and Frost Bank. Mr. Green joined the Cullen/Frost organization in July 1980 and served in a number of managerial positions in the Company’s financial division before being named CFO in 1995, a position he held until 2015 when he was named President of Cullen/Frost. He became Chairman and CEO in 2016. During Mr. Green’s tenure at Frost, the Company has become one of the nation’s 50 largest banks and has increased its common stock dividend for 27 consecutive years. At the same time, Frost Bank has won numerous accolades for excellence and customer service, earning the most Greenwich Excellence Awards for service to business clients among banks nationwide for six consecutive years, and receiving the highest ranking in customer satisfaction in Texas in the J.D. Power U.S. Retail Banking Study for 13 consecutive years. Frost Bank has also ranked highly in the American Banker/Reputation Institute Survey of Bank Reputations and Forbes magazine’s list of America’s 100 Best Banks. Mr. Green currently serves as Chairman of the San Antonio Chamber of Commerce, and he is a founding member of the Corporate Partners for Racial Equity.
			He sits on the Board of Directors and chairs the Investment Committee of the Southwest Research Institute and on the University of Texas at Austin Chancellor’s Council Executive Committee, McCombs School of Business Advisory Council and the McCombs Scholars Program committee. As a member of the Board of Directors of The Tobin Center for the Performing Arts, Mr. Green serves as the Vice Chair and Chair-Elect. Mr. Green is a member of the University of Texas San Antonio Campaign Leadership Council and the Mid-Sized Bank Coalition where he is a former executive committee member. Mr. Green is a past member of the Executive Committee and Board of Trustees of the United Way of San Antonio and Bexar County. He previously served on the Federal Reserve Board’s Federal Advisory Council, serving the Fed’s 11th District. Mr. Green graduated with honors from the University of Texas at Austin in 1977, earning a bachelor’s degree in accounting. Prior to joining Cullen/Frost, he spent three years in public accounting with Ernst & Ernst (now Ernst & Young). Mr. Green and his wife, Sandy, have been married for 46 years and have six grown children. It is because of his experience in banking and his many years at Cullen/Frost and Frost Bank, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Green should continue serving on the Board.


Age 69 Director since 2008 Independent			Mr. David J. Haemisegger is President of the NorthPark Management Company, which manages NorthPark Center, a major shopping mall in Dallas, Texas. After graduating with a B.A. degree from Princeton University in his native New Jersey, he earned an MBA degree from the Wharton School at the University of Pennsylvania. He was President and Chief Operating Officer of the Raymond D. Nasher Company until 1995, when he became President of NorthPark Management Company. Mr. Haemisegger is President and Chairman of the Board of Trustees and the Acquisition, Audit and Finance Committees at both the Nasher Foundation and the Nasher Sculpture Center.
			Mr. Haemisegger is a member of the Princeton University Art Museum Advisory Council, the Duke University Art Museum Board of Advisors, the Graduate Executive Board for the Wharton School at the University of Pennsylvania, and the Director’s Council of the Harvard Art Museums. Mr. Haemisegger is a former member of the board of directors and the Audit, Loan and Executive Committees of NorthPark National Bank. It is because of his experience in banking, business operations and management and real estate, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Haemisegger should continue serving on the Board.


Age 78 Director since 2010 Independent			Mr. Charles W. Matthews, formerly General Counsel of Exxon Mobil Corporation, spent his entire career at Exxon, the world’s largest energy company. A native of Houston, he graduated from The University of Texas at Austin with a B.A. degree in government. He also earned a J.D. degree from the University of Houston and joined Humble Oil, now known as Exxon-Mobil, upon graduation. He rose in the law department to become Vice President and General Counsel of Exxon Mobil. He was responsible for coordinating the legal and regulatory efforts to facilitate the merger between Exxon Corporation and Mobil Corporation. As General Counsel, Mr. Matthews oversaw the company’s law department, consisting of more than 460 lawyers with offices in 40 countries.
			He is a former member of the advisory board and past Chairman of the University of Houston Law Foundation. Mr. Matthews is also past Chairman and past President of the University of Texas Ex-Students Association and past-member of the Texas Exes Scholarship Foundation and member of the Board of the University of Texas Foundation. He served on the boards of Trinity Industries Inc., Forestar Group, Inc., and Children’s Medical Center of Dallas. Mr. Matthews is past Chairman of Texas Cultural Trust where he continues to serve on the Board. It is because of his experience in corporate governance, regulatory compliance, and the in-depth knowledge of the opportunities and challenges facing energy companies, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Matthews should continue serving on the Board.


Age 54 Director since 2022 Independent			Mr. Joseph A. Pierce has served as the Senior Vice President and General Counsel for AMB Sports & Entertainment since December 2020. He previously served as the Senior Vice President and Chief Legal Officer of the Charlotte Hornets from October 2019 to December 2020 and the Vice President and General Counsel from October 2014 until October 2019. Prior to joining the Hornets organization, Mr. Pierce was Senior Vice President and Associate General Counsel of Global Marketing and Corporate Affairs at Bank of America.
			Mr. Pierce is a native San Antonian and holds a Bachelor of Science degree in finance from Georgetown University and dual Juris Doctorate and Master of Business Administration degrees from the University of Pennsylvania Law School and the Wharton School of Business. Mr. Pierce has extensive experience with risk management, legal, marketing, and financial services and the Board has concluded that Mr. Pierce should continue service on the Board.


Age 56 Director since 2022 Independent			Ms. Linda B. Rutherford is the Chief Administration and Communications Officer at Dallas-based Southwest Airlines Co. She has been with Southwest since 1992 and provides executive leadership for Communication & Outreach, Culture & Engagement, Diversity, Equity & Inclusion, Internal Audit, People (Human Resources), Talent and Leadership Development, Total Rewards, Technology and the Southwest University. Ms. Rutherford has held several leadership positions at Southwest, including Executive Vice President People & Communications, Senior Vice President & Chief Communications Officer, Vice President and Communications Officer, and Vice President Communications and Strategic Outreach.
			Ms. Rutherford serves on several local and national nonprofit and community outreach boards. She has a bachelor of arts degree in journalism from Texas Tech University. It is because of her business operations and management skills, her familiarity with issues related to human capital management and organizational culture, as well as her knowledge of the communities we serve, that our Board has concluded that Ms. Rutherford should continue to serve on the Board.


Age 76 Director since 2023 Independent			Mr. Willome was the President of Ellison Industries, a leading home builder in San Antonio, from 1979 until the company's sale in 1996 and prior to that was the Chief Financial Officer from 1975 to 1978. Mr. Willome is a consultant and facilitator, helping numerous organizations, families and individuals develop clarity around strategy and governance. He previously served as a director on the boards of Texas Commerce Bank-San Antonio, Guaranty Federal Bank, and GPM Life Insurance and is currently a director at James Avery Craftsman.
			Mr. Willome is a graduate of the University of Kansas with a Bachelor in Business Administration degree. He was a certified CPA from 1971 to 1985. Mr. Willome has financial, accounting, and real estate experience as well as experience as a board member of other banks. Because of his experience and skills in those areas, the Board has concluded that Mr. Willome should continue to serve on the Board.



Charles W. Matthews, Committee Chair			Joseph A. Pierce

Chris M. Avery			Linda B. Rutherford

Anthony R. Chase			Jack Willome

Samuel G. Dawson


2022 Compensation Actions During 2022, taking into account our strong financial performance, our management team’s performance, demonstrating leadership in alignment with our culture, and to help ensure our executive team’s compensation remains competitive with our peer group, the following decisions were made concerning compensation of the Named Executive Officers:		We believe that our executive compensation programs successfully balance elements of fixed compensation, short-term and long-term incentives and benefit programs consistent with our core values of integrity, caring and excellence.
•	Increases to base salary approximating 8% on average effective January 1, 2023;
•	Annual incentive payments for 2022 performance paid in 2023 at 30% above target; and
•	Long-term incentive award grants consisting of 50% performance stock units and 50% restricted stock units.


Base Salary Base salary is an important element of executive compensation because it provides executives with a fixed amount of monthly income. Internal and external equity, performance, experience and other factors are considered when establishing base salary. The Committee does not assign a specific weighting to these factors when making compensation decisions. Base salary changes are generally approved in October of each year and are effective January 1st of the following year. No specific weighting is targeted for base salaries as a percentage of total compensation.
Annual Incentive Compensation Annual incentive compensation is provided to Named Executive Officers to recognize achievement of annual financial targets and is paid in accordance with the quantitative and qualitative terms of the Annual Incentive Plan for the Chief Executive Officer and the Executive Management Bonus Plan, which covers the other Named Executive Officers. This award is paid in the form of cash, following the completion of the performance year to which it relates.
Long-Term Incentive Compensation Long-term incentive compensation in the form of equity-based awards is awarded to the Named Executive Officers in an effort to align management and shareholder interests, ensure our future performance, enhance stock ownership opportunities, and increase shareholder value, in each case, over the longer term. Our long-term incentive awards provide for a three-year performance period for performance stock units and a 3-year cliff vesting period for time-based restricted stock units.

Benefits and Perquisites We provide an employee benefits package, including retirement benefits, along with health and welfare benefits, to remain competitive with the market and to help meet the health and retirement security needs of our employees, including the Named Executive Officers. Limited perquisites are provided in an effort to remain competitive and to provide certain conveniences that we believe are reasonable. We do not pay tax gross-ups on perquisites.


Named Executive Officer	2022 Base Salary	2023 Base Salary	% Change

Phillip D. Green	$1,100,000	$1,200,000	9	%

Jerry Salinas	$600,000	$630,000	5	%

Paul H. Bracher	$605,000	$650,000	7	%

Jimmy Stead	$550,000	$625,000	14	%

Coolidge E. Rhodes, Jr.	$575,000	$605,000	5	%


Performance Measures			Description

Operating Results			Provides direction so that we meet our financial goals, both in terms of achieving budgetary results and in its commitment to performance compared to its peers.

Leadership			Leads Cullen/Frost, setting a philosophy—based on the corporate culture, and grounded in our core working values—that is well understood, widely supported, consistently applied, and effectively implemented.

Strategic Planning			Establishes clear objectives and develops strategic policies to support growth in our core business and expansion through organic growth and when appropriate acquisitions. Is committed to the utilization of advanced technology applications to support these growth goals, and maintains the long-term interest of Cullen/Frost in all actions.

Human Capital Management and Development			Helps to ensure the effective recruitment of a diverse workforce, consistent retention of key employees and the ongoing motivation of all staff. Offers personal involvement in the recruiting process and provides feedback.

Communications			Serves as our chief spokesperson, communicating effectively with all of our stakeholders.

External Relations			Establishes and maintains relationships with the investment community to keep them informed on our progress. Serves in a leadership role in civic, professional and community organizations. Reinforces key customer relationships through regular market visits and customer contacts.

Board Relations			Works closely with the Board to keep it fully informed on all important aspects of the status and development of Cullen/Frost. Facilitates the Board’s composition and committee structure, as well as its governance and any regulatory agency relations.


Named Executive Officer			2022 Incentive Target

Jerry Salinas			80%

Paul H. Bracher			80%

Jimmy Stead			80%

Coolidge E. Rhodes, Jr.			80%