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On Monday, Amerant Bancorp Inc. (NYSE:AMTB), a Florida-based bank with a market capitalization of approximately $996 million, announced a revision to its executive compensation structure, adopting a new performance-based restricted stock unit agreement (PSU Agreement) for its top executives. According to InvestingPro data, the bank is currently trading at $23.84, with analysts setting price targets between $24 and $32. This change, effective from February 2025, aligns with the company’s Long-Term Incentive Plan (LTI Plan), which falls under Amerant’s 2018 Equity and Incentive Compensation Plan. The timing is crucial as InvestingPro analysis shows the company is expected to return to profitability this year, with two analysts recently revising their earnings expectations upward.
The new PSU Agreement stipulates that the performance-based restricted stock units (PSUs) will vest over a three-year period, contingent on both the executive’s continued service and the company’s financial performance. Specifically, the vesting of shares depends on Amerant achieving a predetermined threshold of Relative Adjusted Return on Average Total (EPA:TTEF) Common Equity compared to a peer group selected by the Compensation and Human Capital Committee.
Executives could receive between 50% to 150% of the initially granted PSUs, based on the company’s financial performance. Additionally, the actual number of PSUs earned will be adjusted by a Modifier Percentage, which can range from -20% to +20% and is determined by Amerant’s Relative Total Shareholder Return in comparison to its peer group.
The awarded PSUs will be settled in shares of Amerant’s Class A common stock, post-vesting conditions being met. Notably, the executives do not possess any voting rights or stockholder privileges for the shares underlying the PSUs until the awards are settled.
This updated PSU Agreement modifies the previous performance goal, which was based on Relative Total Shareholder Return, and now includes a provision for cash payment of dividend equivalents upon PSU vesting, rather than in additional shares of stock.
The announcement of these changes in executive compensation comes as part of a routine 8-K filing with the Securities and Exchange Commission (SEC), providing transparency on corporate governance matters. The detailed terms of the PSU Agreement are outlined in the attached Exhibit 10.1 of the filing. For investors seeking deeper insights, InvestingPro offers comprehensive analysis of Amerant’s financial health and performance metrics, along with additional ProTips that could help inform investment decisions.
Amerant, headquartered in Coral Gables, Florida, operates within the national commercial banks sector under the SIC code 6021. While the company currently shows a weak financial health score of 1.43 on InvestingPro’s metrics, the company’s revised incentive plan reflects its commitment to aligning the interests of its executives with those of its shareholders and ensuring performance-based rewards. This alignment becomes particularly significant as the company works to improve its financial performance, with net income expected to grow in the coming year.
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