8-K: Fulton Financial Corporation Appoints Richard Kraemer as Chief Financial Officer Designee, Announces Retirement of Interim CFO

Fulton Financial Corporation has named Richard Kraemer as Senior Executive Vice President and Chief Financial Officer Designee, with his appointment effective September 3, 2024, and the retirement of Interim CFO Beth Ann L. Chivinski on December 31, 2024.

Summary

• Fulton Financial Corporation announced the appointment of Richard Kraemer as Senior Executive Vice President and Chief Financial Officer Designee, effective September 3, 2024.
• Kraemer will transition to the role of Chief Financial Officer in the fourth quarter of 2024, succeeding Beth Ann L. Chivinski, the current Interim CFO, who will retire on December 31, 2024.
• Kraemer's responsibilities will include overseeing accounting, treasury, corporate development, tax, financial planning and forecasting, and investor relations.
• He will also advise the Office of the CEO and the board of directors on financial matters.
• Kraemer's previous experience includes serving as Chief Banking Officer at Valley National Bank, as well as various executive roles in finance and treasury.
• His employment agreement includes an annual base salary of $550,000, a $385,000 cash bonus payable in April 2025, and $750,000 in restricted stock units vesting over three years.
• The agreement also includes severance benefits and a change in control agreement with specific terms for termination under various circumstances.

Sentiment

Score: 7

Explanation: The document reflects a positive transition with the appointment of a new CFO, but also includes the departure of the interim CFO. The terms of the employment agreement are standard and do not indicate any significant concerns.

Positives

• The appointment of Richard Kraemer brings a seasoned financial executive with over 20 years of experience to Fulton.
• Kraemer's previous roles include leadership in commercial banking, corporate finance, and treasury, indicating a broad skill set.
• The transition plan allows for a smooth handover of responsibilities from the retiring Interim CFO.
• The employment agreement includes incentives such as a cash bonus and restricted stock units, aligning Kraemer's interests with the company's performance.

Negatives

• The departure of the Interim CFO, Beth Ann L. Chivinski, creates a transition period, although a successor has been named.
• The company will incur costs associated with the new executive's compensation package, including salary, bonus, and equity grants.

Risks

• The transition of leadership in the CFO role could pose a short-term risk if not managed effectively.
• The company is subject to the risk of executive turnover, as the employment agreement includes terms for termination under various circumstances.
• The change in control agreement could result in significant payouts if a change in control occurs.

Future Outlook

The company anticipates a smooth transition of the CFO role from the interim CFO to the newly appointed CFO Designee in the fourth quarter of 2024.

Management Comments

• Chairman and CEO Curt Myers thanked Betsy Chivinski for her many years of service and contributions to Fulton.
• Curt Myers expressed confidence in Richard Kraemer's ability to serve as the next Chief Financial Officer, citing his track record and experience.

Industry Context

The appointment of a new CFO is a common occurrence in the financial services industry, and Fulton's move to bring in an experienced executive aligns with industry best practices for leadership succession.

Comparison to Industry Standards

• The compensation package for Richard Kraemer, including a base salary, bonus, and equity grants, is consistent with industry standards for executive-level positions in financial institutions of similar size and complexity.
• The change in control agreement is also a common practice in the industry to protect executives in the event of a merger or acquisition.
• Valley National Bank, where Kraemer previously worked, is a comparable institution in terms of size and scope, suggesting that his experience is directly relevant to Fulton's operations.

Management Changes

Stakeholder Impact

• Shareholders may view the appointment of a new CFO as a positive step for the company's future.
• Employees may experience changes in leadership and reporting structures within the finance department.
• Customers and suppliers are unlikely to be directly impacted by this executive change.

Next Steps

• Richard Kraemer will begin his role as Senior Executive Vice President and Chief Financial Officer Designee on September 3, 2024.
• Kraemer will transition to the role of Chief Financial Officer in the fourth quarter of 2024.
• Beth Ann L. Chivinski will retire from her role as Interim Chief Financial Officer on December 31, 2024.

Key Dates

Keywords

Chief Financial Officer, CFO, Executive Appointment, Financial Services, Corporate Finance, Banking, Executive Compensation, Retirement, Fulton Financial Corporation, Richard Kraemer