COMMERCE BANCSHARES INC /MO/ 8-K

What Happened

• Commerce Bancshares, Inc. (CBSH) reported that its Compensation and Human Resources Committee on February 3, 2026 approved 2026 base salaries (effective March 28, 2026), cash bonuses for 2025 performance and a new long‑term equity award design for grants to be made in 2026. The new equity design splits awards into time‑vested and performance‑vested restricted stock units (RSUs).

Key Details

• CEO John W. Kemper: 2026 base salary $1,050,000 and a 2025 performance‑based cash bonus of $2,313,108; granted 36,076 performance‑vested RSUs and 18,038 time‑vested RSUs.
• Other named executives (selected figures): CFO Charles G. Kim — $619,126 salary, $802,483 bonus, 5,931 perf‑RSUs/4,831 time‑RSUs; EVP Kevin G. Barth — $619,126 salary, $802,483 bonus, 5,931 perf‑RSUs/2,965 time‑RSUs; EVPs Robert S. Holmes and John K. Handy have salaries of $547,690 with bonuses of $683,315 and $662,918 and various RSU grants as listed in the filing.
• New long‑term award mix: 66.6% performance‑vested RSUs and 33.3% time‑vested RSUs (cliff vest after three years, subject to continued employment and limited exceptions).
• Performance RSU payout: based on two equally weighted 3‑year metrics — Adjusted Return on Average Equity (ex‑AOCI) and Diluted EPS growth vs. a defined compensation peer group (payout 0%–200% of target), with an additional Total Shareholder Return (TSR) modifier of ±20% versus the same peer group.

Why It Matters

• The committee tied a majority of long‑term awards to multi‑year performance metrics and relative TSR, signaling stronger alignment between executive pay and shareholder returns. That means executives’ equity rewards depend on both absolute financial results and relative stock performance.
• Cash bonuses increase near‑term compensation expense; RSU grants create potential future share dilution because they settle in common stock when vested. Both factors are relevant to investors watching earnings per share and capital allocation.
• Vesting conditions (three‑year cliff and forfeiture on termination except in specified cases) and anti‑hedging/non‑solicit provisions indicate standard safeguards aimed at retaining executives and protecting shareholder interests.