UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant ☒                            Filed by a Party other than the Registrant ☐

Check the appropriate box:

Cullen/Frost Bankers, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

A Texas Financial Services Family

100111 West Houston Street

San Antonio, Texas 78205

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on April 27, 201729, 2020

To the Shareholders of

CULLEN/FROST BANKERS, INC.:

The Annual Meeting of Shareholders (“Annual(the “Annual Meeting”) of Cullen/Frost Bankers, Inc. (“Cullen/Frost” or the “Company”) will be held in the Commanders Room at Frost Bank, 100Tower Conference Center, 111 West Houston Street, San Antonio, Texas 78205, on Thursday,Wednesday, April 27, 2017,29, 2020, at 11:00 a.m., San Antonio time, for the following purposes:

The record date for the determination of the shareholders entitled to vote at the Annual Meeting, or any adjournments or postponements thereof, was the close of business on February 27, 2017.March 6, 2020. A list of all shareholders entitled to vote is available for inspection by a shareholdershareholders during regular business hours for ten days prior to the Annual Meeting at our principal offices at 100111 West Houston Street, Suite 1270,100, San Antonio, Texas 78205. This list will be available at the Annual Meeting.

Your vote is very important. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy byover the Internet or by telephone or mail in order to ensure the presence of a quorum. If you attend the meeting, you will have the right to revoke the proxy and vote your shares in person.

Shareholders of record may vote by following the instructions on their proxy card over the Internet or by internet, phone,telephone or mail.

Shareholders attending the meeting should take elevators from the Frost Tower lobby to Floor 14, where Conference Center staff will direct you to the meeting room. All shareholders are cordially invited to attend the Annual Meeting.

By Order of the Board of Directors,

STANLEY E. McCORMICK, JR.

JAMES L. WATERS

Group Executive Vice President

CorporateGeneral Counsel and Corporate Secretary

Dated: March 17, 201720, 2020

TABLE OF CONTENTS

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A Texas Financial Services Family

100111 West Houston Street

San Antonio, Texas 78205

PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS

To Be Held on April 27, 201729, 2020

INTRODUCTION

The Board of Directors (“Board”(the “Board”) of Cullen/Frost Bankers, Inc. (“Cullen/Frost” or the “Company”) is soliciting proxies to be used at the Annual Meeting of Shareholders (“Annual(the “Annual Meeting”) and any adjournment or postponement thereof. The Annual Meeting will be held in the Commanders Room at Frost Bank, 100Tower Conference Center, 111 West Houston Street, San Antonio, Texas 78205, on Thursday,Wednesday, April 27, 201729, 2020 at 11:00 a.m., San Antonio time. This Proxy Statement and the accompanying proxy card will be mailed to shareholders beginning on or about March 17, 2017.20, 2020.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 20172020 ANNUAL MEETING OF SHAREHOLDERS:

This Proxy Statement for the Annual Meeting and our 2016 Annual Report to Shareholders are available at cfrvoteproxy.com.

We are pleased to provide access to our proxy materials on the Internet. We have elected to provide access to our proxy materials both by sending you this full set of proxy materials, including a proxy card, and by notifying you of the availability of our proxy materials on the Internet. This Proxy Statement for the 20172020 Annual Meeting of Shareholders and our 20162019 Annual Report to Shareholders are available at our proxy materials website at cfrvoteproxy.com. This website does not use any functions that identify you as a visitor to the website, and thus protects your privacy.

You have the option to vote and submit your proxy byover the Internet. If you have Internet access, we encourage you to record your vote byover the Internet. We believe it will be convenient for you, and it saves postage and processing costs. In addition, when you vote byover the Internet, your vote is recorded immediately, and there is no risk that postal delays will cause your vote to arrive late and therefore not be counted. If you do not vote byover the Internet, please vote by telephone or by completing and returning the enclosed proxy card in the postage prepaid envelope provided. Submitting your proxy over the Internet or by either Internet, telephone or proxy cardmail will not affect your right to vote in person if you decide to attend the Annual Meeting.

Record Date and Voting Rights

The close of business on February 27, 2017March 6, 2020 has been fixed as the record date for the determination of shareholders entitled to vote at the Annual Meeting. The only class of securities of Cullen/Frost outstanding and entitled to vote at the Annual Meeting is our Common Stock, par value $0.01 per share. On February 27, 2017,March 6, 2020, there were 63,878,58462,639,653 shares of Common Stock outstanding, with each share entitled to one vote.

Proxies

All shares of Cullen/Frost Common Stock represented by properly executed proxies, if timely returned and not subsequently revoked, will be voted at the Annual Meeting in the manner directed in the proxy. If a properly

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executed proxy does not specify a choice on a matter, the shares will be voted for the fifteenthirteen nominees to serve on the Board as Directors (each, a “Director”) for aone-year term that will expire at the 20182021 Annual Meeting of

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Shareholders, for the ratification of Ernst & Young LLP to act as our independent auditors for the 20172020 fiscal year, for thenon-binding approval of executive compensation, for futurenon-binding advisory votes on executive compensation to take place every year, and in the discretion of the persons named as proxies with respect to any other business that may properly come before the meeting.

A shareholder may revoke a proxy at any time before it is voted by delivering a written revocation notice to the Corporate Secretary of Cullen/Frost Bankers, Inc., 100111 West Houston Street, Suite 100, San Antonio, Texas 78205. A shareholder who attends the Annual Meeting may, if desired, vote by ballot at the meeting, and such vote will revoke any proxy previously given.

Quorum and Voting Requirements

A quorum of shareholders is required to hold a valid meeting. If the holders of a majority of the issued and outstanding shares of Cullen/Frost Common Stock entitled to vote are present at the Annual Meeting in person or represented by proxy, a quorum will exist. Abstentions and brokernon-votes, are counted as “present” for establishing a quorum.

Directors are elected by a majority of the votes cast by the holders of Cullen/Frost’s Common Stock entitled to vote at any meeting for the election of Directors at which a quorum is present, provided that if the number of Director nominees exceeds the number of Directors to be elected at such a meeting, the Directors shall be elected by a plurality of the votes cast by the holders of Cullen/Frost’s Common Stock entitled to vote at such meeting at which a quorum is present. With respect to the election of Directors, (i) a majority of the votes cast means that the number of votes cast “for” the election of a Director must exceed the number of votes cast “against” that Director and (ii) abstentions and brokernon-votes shall not be counted as votes cast either “for” or “against” any nominee for Director.

With respect to the ratification of Ernst & Young LLP to act as our independent auditors for the 20172020 fiscal year, the affirmative vote of the holders of a majority of the shares of Cullen/Frost’s Common Stock entitled to vote on this proposal, and who are present in person or represented by proxy at the Annual Meeting, will be the act of the shareholders. In voting for this matter, shares may be voted “for”, “against” or “abstain”. An abstention will have the effect of a vote against this matter.

With respect to the resolution to provide nonbinding approval of executive compensation, the affirmative vote of the holders of a majority of the shares of Cullen/Frost’s Common Stock entitled to vote on this proposal, and who are present in person or represented by proxy at the Annual Meeting, will be the act of the shareholders. In voting for this matter, shares may be voted “for”, “against” or “abstain”. An abstention will have the effect of a vote against this matter. Brokernon-votes (as further discussed below) will have no effect on the outcome of this vote. This resolution is advisory only and will not be binding upon Cullen/Frost or the Board.

With respect to the resolution to provide a nonbinding selection of the frequency of future votes on executive compensation, shares may be voted for a frequency of once every one year, once every two years, once every three years or to abstain. The option receiving the greatest number of votes will be deemed to have received the approval of the shareholders. However, because this vote is advisory only and not binding upon the Board or Cullen/Frost in any way, the Board may decide that it is in the best interests of our shareholders and Cullen/Frost to hold an advisory vote on executive compensation more or less frequently than the option approved by our shareholders. In voting for this matter, brokernon-votes (as further discussed below) will have no effect on the outcome of this vote. This resolution is advisory only and will not be binding upon Cullen/Frost or the Board.

Under the rules of the Financial Industry Regulatory Authority, Inc., member brokers generally may not vote shares held by them in street name for customers who do not provide voting instructions, and instead must

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submit aso-called “brokernon-vote” unless they are permitted to vote the shares in their discretion under the rules of any national securities exchange of which they are members. Under the rules of the New York Stock Exchange, Inc. (“NYSE”), a member broker that holds shares in street name for customers has authority to vote on certain “routine” items if it has transmitted proxy-soliciting materials to the beneficial owner but has not received instructions from that owner. The proposal to ratify the selection of Ernst & Young LLP to act as Cullen/Frost’s independent auditors is a “routine” item, and the NYSE rules permit member brokers that do not receive instructions to vote on this item.

If you hold shares of Cullen/Frost’s Common Stock through the Cullen/Frost 401(k) Stock Purchase Plan and do not provide voting instructions to the plan’s trustees or administrators, such shares will be voted in the same proportion as the shares beneficially owned through such plan for which voting instructions are received, unless otherwise required by law.

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Expenses of Solicitation

Cullen/Frost will pay the expenses of the solicitation of proxies for the Annual Meeting. In addition to the solicitation of proxies by mail, Directors, officers, and employees of Cullen/Frost may solicit proxies by telephone, facsimile, in person or by other means of communication. Cullen/Frost also has retained Okapi Partners LLC (“Okapi”) to assist with the solicitation of proxies. Directors, officers, and employees of Cullen/Frost will receive no additional compensation for the solicitation of proxies, and Okapi will receive a fee not to exceed $8,000.00,$9,000.00, plus reimbursement forout-of-pocket expenses. Cullen/Frost has requested that brokers, nominees, fiduciaries and other custodians forward proxy-soliciting material to the beneficial owners of Cullen/Frost Common Stock. Cullen/Frost will reimburse these persons forout-of-pocket expenses they incur in connection with its request.

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ELECTION OF DIRECTORS

(Item 1 On Proxy Card)

The following fifteenthirteen nominees have been nominated to serve for a newone-year term: Mr. R. Denny Alexander, Mr. Carlos Alvarez, Dr. Chris M. Avery, Mr. Anthony R. Chase, Ms. Cynthia J. Comparin, Mr. Samuel G. Dawson, Mr. Crawford H. Edwards, Mr. Ruben M. Escobedo, Mr. Patrick B. Frost, Mr. Phillip D. Green, Mr. David J. Haemisegger, Mrs. Karen E. Jennings, Mr. Richard M. Kleberg, III, Mr. Charles W. Matthews, Mrs. Ida Clement Steen and Mr. Graham Weston and Mr. Horace Wilkins, Jr.Weston. The Board recommends that you vote “FOR” each of the fifteenthirteen nominees. If any nominee is unable to serve, the individuals named as proxies on the enclosed proxy card will vote the shares to elect the remaining nominees and any substitute nominee or nominees designated by the Board.

The table below provides information on each nominee.

Nominees forOne-Year Term Expiring in 2018:2021:

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Nominees forOne-Year Term Expiring in 20182021 (continued):

GENERAL INFORMATION ABOUT THE BOARD OF DIRECTORS

Meetings and Attendance

The Board of Directors had sevenfive meetings in 2016.2019. Each of Cullen/Frost’s then current Directors attended 82% or more100% of the meetings of the Board and the Committees of the Board on which he or she served during 2016.2019.

The Board has a policy which encourages all Directors to attend the Annual Meeting of Shareholders, and in 2016 fourteen out of fifteen Directors attended2019 Director attendance for the 20162019 Annual Meeting of Shareholders.Shareholders was 100%.

2017 Announced Leadership Changes

On January 17, 2017, Mr. Jack A. Wood, a former Director of Cullen/Frost, notified the Board of his decision to retire from the Board effective as of that date. The Board, on January 18, 2017, elected Mr. Samuel G. Dawson to fill Mr. Wood’s seat for the remainder of Mr. Wood’s term, which expires at the Annual Meeting.

On January 17, 2017, Mr. Royce S. Caldwell, the current Lead Director of the Board, notified the Board of his decision not to stand forre-election to the Board when his term expires at the Annual Meeting. The Board, on January 18, 2017, selected Mr. Charles W. Matthews to serve as the Lead Director of the Board after Mr. Caldwell’s retirement. In connection with Mr. Caldwell’s retirement, the Board has also nominated Mr. Graham Weston to stand for election to the Board at the Annual Meeting to fill the seat currently held by Mr. Caldwell.

Committees of the Board

The Board has sixseven Committees, each of which is described in the chart below, along with the current membership.

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Graham Weston (Chair)

The Board has adopted written charters of the Audit Committee, the Compensation and Benefits Committee, the Corporate Governance and Nominating Committee, the Risk Committee and the RiskTechnology Committee. All of these charters are available at frostbank.com or in print to any shareholder making a request by contacting the Corporate Secretary, Stan McCormick at 100111 West Houston Street, Suite 100, San Antonio, Texas 78205. As described in more detail below under “Certain Corporate Governance Matters—Director Independence,” the Board has determined that each member of the Audit Committee, the Compensation and Benefits Committee, and the Corporate Governance and Nominating Committee is independent within the meaning of the rules of the NYSE. The Board has also determined that each member of the Audit Committee is independent within the meaning of the rules of the SEC. In addition, the Board has determined that each member of the Audit Committee is “financially literate” and that at least one member of the Audit Committee has “accounting or related financial management expertise,” in each case within the meaning of the NYSE’s rules. The Board has also determined that Ms. Cynthia J. Comparin and Mr. Ruben M. Escobedo is anDavid J. Haemisegger are “audit committee financial expert”experts” within the meaning of the SEC’s rules.

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Leadership Structure

As provided in our Corporate Governance Guidelines, our Board selects its Chairman,Chair, Lead Director and CEO in a way that it considers to be in the best interests of Cullen/Frost. The Board does not have a policy on whether the role of ChairmanChair and CEO should be separate or combined, but believes that the most effective leadership structure for Cullen/Frost is to combine these responsibilities. This structure avoids the potential confusion and conflict over who is leading the Company, both within the Company and when dealing with investors, customers and counterparties, and the duplication of efforts that can result from the roles being separated. The Board also believes that combining these roles in one person enhances accountability for the performance of Cullen/Frost. Furthermore, as Cullen/Frost has traditionally combined these roles (for some 30+ years now), separating them could cause significant disruption in oversight and lines of reporting. Nevertheless, depending upon the circumstances, the Board could choose to separate the roles of ChairmanChair and CEO in the future.

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To help ensure strong oversight by ournon-management directors, our Audit Committee, Corporate Governance and Nominating Committee, and Compensation and Benefits Committee are composed only of independent directors, and a majority of our Risk Committee, including the chairperson of the Risk Committee, is composed of a majority of independent directors. In accordance with our Corporate Governance Guidelines, the Chair of the Corporate Governance and Nominating Committee acts as the Lead Director and presides at executive sessions ofnon-management directors and presents to the full Board any matters that may need to be considered by the full Board. Mr. Royce S. Caldwell,Charles W. Matthews, the current Lead Director, also is the Chair of the Compensation and Benefits Committee and is a member of several other Board committees. As a result, the Lead Director is fullywell informed ofregarding all activities of the Board and allmost of its committees. In addition to presiding at the executive sessions of thenon-management directors, the Lead Director also reviews the agenda, schedule and materials for each Board Meeting and Board committee meeting (for each committee on which he sits) and executive session, and facilitates communication between thenon-management directors and the ChairmanChair and CEO. Mr. Charles W. Matthews will succeed Mr. Royce S. Caldwell as Lead Director and Chairman of the Compensation and Benefits and Corporate Governance and Nominating Committees upon Mr. Caldwell’s retirement on April 27, 2017.

The Board is responsible for overseeing all aspects of management of Cullen/Frost, including risk oversight, which is effected primarily through the Audit and Risk Committees. The Risk Committee assists the Board in fulfilling its responsibilities for oversight of the Company’s enterprise-wide risk management framework, including reviewing the Company’s overall risk appetite, risk management strategy and the policies and practices established by the Company’s management to identify and manage risk to the Company. The Audit Committee receives reports on, and reviews, Frost Bank’s principal risk exposure, including financial reporting, credit, and liquidity risk. Cullen/Frost management regularly discusses macro-economic and business-specific factors with the Audit Committee and the Risk Committee, as well as the potential impact of these factors on the risk profile (including the financial situation) of the Company. Cullen/Frost management also periodically reviews with the Board specific risk analyses, such as sensitivity and scenario analyses. In addition, the Audit Committee and the Risk Committee receive written packages and detailed oral postings on various types of risk and other matters (which come from a combination of the Company’s CEO, CFO,Chief Executive Officer, Chief Financial Officer and Chief Risk Officer) at regularly scheduled meetings. The Board also interacts on a regular basis with executive officers, from both the control and line of business sides of Cullen/Frost. Furthermore, members of the Board of Cullen/Frost also serve as members of the Board of Directors of Frost Bank, and as such receive regular reports on the operations of Frost Bank. The Board of Directors of Frost Bank has an additional committee, the Wealth Advisors Committee, that is not a committee of the Board of Cullen/Frost. This Frost Bank Board committee has a majority of independent directors and reviews risks and approves policy exceptions in trust services. Each

In addition, each standing committee of the Boards of Cullen/Frost and Frost Bank has oversight responsibility for risks inherent within its area of oversight. For example, the Technology Committee oversees the information technology security of Cullen/Frost Bankers, Inc. and Frost Bank, including cybersecurity issues, considerations and developments. Among other responsibilities, the Technology Committee reviews and discusses with management, as and when appropriate, risk management and risk assessment guidelines and policies regarding information technology security, including the quality and effectiveness of information technology security and disaster recovery capabilities.

It is through these various channels that the Board receives the necessary information to oversee the Company’s risk management.

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The Boards of Directors of Cullen/Frost and Frost Bank, and their relevant committees, typically meet in joint session.

Director Nomination Process

The Corporate Governance and Nominating Committee is responsible for identifying individuals qualified to become members of the Board and for recommending to the Board the nominees to stand for election as Directors.

In identifying Director Candidates,candidates, the Corporate Governance and Nominating Committee may seek input from Cullen/Frost’s management and from current members of the Board. In addition, it may use the services of an outside consultant, although it has not done so in the past.consultant. The Corporate Governance and Nominating Committee will consider candidates

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recommended by shareholders. Shareholders who wish to recommend candidates may do so by writing to the Corporate Governance and Nominating Committee of Cullen/Frost Bankers, Inc., c/o Corporate Secretary, 100111 West Houston Street, Suite 100, San Antonio, Texas 78205. Recommendations may be submitted at any time. The written recommendation must includebe made in the manner and form required by Cullen/Frost’s Bylaws, including by providing the name of the candidate, the number of shares of Cullen/Frost Common Stock owned by the candidate and the information regarding the candidate that would be included in a proxy statement for the election of Directors pursuant to paragraphs (a), (e) and (f) of Item 401 ofRegulation S-K adopted by the SEC.

In evaluating Director candidates, the Corporate Governance and Nominating Committee initially considers the Board’s need for additional or replacement Directors. It also considers the criteria approved by the Board and set forth in Cullen/Frost’s Corporate Governance Guidelines, which include, among other things, the candidate’s personal qualities (in light of Cullen/Frost’s core values and mission statement), accomplishments and reputation in the business community, the fit of the candidate’s skills and personality with those of other Directors and candidates, and the ability of the candidate to commit adequate time to Board and committee matters.matters and the candidate’s contribution to the Board’s overall diversity of viewpoints, background, experience and other demographics. The objective is to build a Board that is effective, collegial and responsive to the needs of Cullen/Frost and that includes a diversity of viewpoints, backgrounds, experience and other demographics.Frost. In addition, considerable emphasis is also given to Cullen/Frost’s mission statement and core values, statutory and regulatory requirements, and the Board’s goal of having a substantial majority of independent directors.

The Corporate Governance and Nominating Committee evaluates all Director candidates in the same manner, including candidates recommended by shareholders. In considering whether candidates satisfy the criteria described above, the Committee will initially utilize the information it receives with the recommendation and other information it otherwise possesses. If it determines, in consultation with other Board members, including the Chairman,Chair, that more information is needed, it may, among other things, conduct interviews.

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20162019 Director Compensation

20162019 Director Compensation Table

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The following information indicates the aggregate number of Deferred Stock Unitsdeferred stock units previously awarded and outstanding for the following directors as of December 31, 2016:2019:

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Cullen/Frost employees receive no fees for their services as members of the Board of Directors or any of its committees.Non-employee Directors receive an annual cash retainer fee of $40,000 and a fee$60,000. Additionally, the Lead Director receives an annual cash retainer of $4,000 for each Cullen/Frost Board meeting attended. In addition,non-employee Directors receive $1,000 for attending each meeting of a committee of the Board to which they have been appointed, except that the Chairman of$15,000; the Audit Committee Chair receives $1,500 for each meetingan annual cash retainer of $20,000; the AuditCompensation and Benefits Committee attendedChair receives an annual cash retainer of $12,000; and allnon-employee other Committee Chairs receive an annual cash retainer fee of $7,500.$10,000. In January 2017, Meridianaddition, members of the Audit Committee receive an annual cash retainer of $10,000; members of the Compensation Partners, LLC reviewed the Company’s outside director compensation program against the peer group used for executive compensation (see page 26). Based on the market review, theand Benefits Committee determined that the supplementalreceive an annual cash retainer of $6,000; and members of all other Committees receive an annual cash retainer of $5,000. Committee Chairs do not receive retainers for Committee Chairs and Lead Director were below the peer group median. Therefore, the Committee established the following supplemental annual cash retainersmembership in addition to their retainer for 2017: Lead Director and Audit Committee Chair—$15,000; and other Committee Chairs—$10,000.service as Chair. There are no fees paid for meeting attendance.

Non-employee Directors are also eligible to receive stock-based compensation each year under Cullen/Frost’s 2015 Omnibus Incentive Plan. In April 2016,2019, eachnon-employee Director in office at that time received 632 Deferred Stock Units.584 deferred stock units. Upon retirement from Cullen/Frost’s Board of Directors,non-employee directors will receive one share of Cullen/Frost’s Common Stock for each Deferred Stock Unitdeferred stock unit held. The Deferred Stock Unitsdeferred stock units were fully vested upon being awarded and holders will receive equivalent dividend payments as such dividends are declared on Cullen/Frost’s Common Stock.

Each of the Cullen/Frost Directors also serves on the Board of Directors of Frost Bank, a subsidiary of Cullen/Frost.

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As outlined in its charter, the Compensation and Benefits Committee has the authority to review and make recommendations to the Board with respect to the components and amount of Board compensation in relation to other similarly situated companies. Periodically, but not less than every two years, the Committee directs its compensation consultant to provide an independent assessment of the Company’s Board compensation program. The consultant analyzes and compares the Company’s Board compensation program against the same peer group used to benchmark executive officer compensation (see page 26 for further details about the peer group). The Committee targets total Board compensation levels at a competitive range of peer group total Board compensation. The Committee considers total aggregate Board compensation and other factors when making recommendations to the Board for approval.

Other Directorships

The following are current directorships held by Director nominees and Directors in public companies other than Cullen/Frost or in registered investment companies:

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Director Qualifications

All members of our Board have significant knowledge of the markets that we serve and extensive ties to community and business leaders. Below is additional information about the qualifications of our Directors and Director nominee.nominees.

A native of Fort Worth, Mr. R. Denny Alexander was one of the founding directors of Overton Bank and Trust in Fort Worth in 1978. For 14 years, he served as chairman of the board and director of Overton Bancshares, which merged with Cullen/Frost in 1998. He is currently the trustee of two private family foundations and manages investments. Mr. Alexander is a graduate of Stanford University with a BA degree in Economics and also earned an MBA degree in Finance from Stanford’s Graduate School of Business. He is a trustee emeritus of Texas Christian University, where he formerly served as a trustee and chair of the Fiscal Affairs Committee. In addition, he has chaired the Chancellor Search Committee at TCU. It is because of his experience in banking and wealth management, as well as his knowledge of the communities we serve, that the Board has concluded that Mr. Alexander should continue serving on the Board.

Mr. Carlos Alvarez is chairmanchair of the board and CEOchief executive officer of The Gambrinus Company which he founded in 1986 when he moved from his native Mexico with his family to San Antonio. Gambrinus is a leading U.S. craft brewer and marketer with breweries in Shiner, TXTexas (The Spoetzl Brewery), Portland, OR (Bridge Port Brewing Company), and Berkeley, CACalifornia (Trumer Brauerei)Brewery). He is committed to education and has served on the board of trustees of Davidson College (Davidson, North Carolina), School Year Abroad (North Andover, Massachusetts) and Saint Mary’s Hall (San Antonio),Antonio, Texas) 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 geared toward driving greater international engagement. He is a board member of the World Affairs Council of America (Washington, DC) and the World Affairs Council of San Antonio, of which he previously served as chairman.chair. Mr. Alvarez also serves on the Board of National Public Radio. 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 business acumen, as well as his knowledge of the communities we serve, that theour Board has concluded that Mr. Alvarez should continue serving on the Board.

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Dr. Chris M. Avery is Chairman, President and Chief Executive Officerserves as chair of the board 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 becamebusiness where he served as president and chief operating officer in 1991 and later assumed the roles of CEO and chairman of the board in May 2007.chief executive officer. Under his leadership, James Avery Craftsman, Inc. has become a national brand that designs, manufactures and sells jewelry in its own stores across the U.S. Dr. Avery earned a bachelor’s degree in biology from Stephen F. Austin State University and a medical degree from Thethe University of Texas Medical School at San Antonio (now Thethe 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 president of the Fredericksburg Hospital Authority board of directors and has served the boards of Hill Country Memorial Hospital in Fredericksburg, Texas and Sid Peterson Hospital in Kerrville, Texas. It is because of his experience in business operations and management, as well as his knowledge of the communities we serve, that theour Board has concluded that Dr. Avery should continue serving on the Board.

Mr. Tony Chase is Chairman and Chief Executive Officer of ChaseSource, L.P., a Houston-based staffing and real estate development firm. He was a founder of mobile phone provider Cricket Wireless and of ChaseCom, L.P., a global customer relationship management and staffing services company, until its sale to AT&T, Inc. in 2007. Prof. Chase is a tenured Professor of Law and Business at the University of Houston Law Center, where he began teaching in 1990. He has published numerous law review articles during his tenure. Mr. Chase is on the board of directors of the Texas Medical Center, M.D. Anderson Board of Visitors and the Greater Houston Partnership, serving as its chairman during 2012. Mr. Chase currently serves as a director of Nabors Industries Ltd. and previously served as a director of Anadarko Petroleum Corporation, Paragon Offshore plc, Sarepta Therapeutics, Inc. and Western Midstream Operating, LP. Additionally, he is a Trustee of the Houston Endowment, and served on the board of trustees of St. John’s School and KIPP Schools. Mr. Chase is the former Deputy Chairman of the Federal Reserve Bank of Dallas and a former Director of the Federal Reserve Bank of Houston. Mr. Chase graduated with honors from Harvard College and subsequently earned M.B.A. and J.D. degrees from Harvard Business School and Harvard Law School, respectively. He is also an Eagle Scout. It is because of his experience in corporate governance, and regulatory and real estate matters, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Chase should serve on the Board.

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Ms. Cynthia Comparin has experience serving as an independent director of companies listed on both NYSE and NASDAQ. Her areas of expertise include: international business, strategy development, business development, technology, finance and accounting (including M&A and divestitures). She is a Qualified Financial Expert (QFE). Ms. Comparin is also a National Association for Corporate Directors (NACD) Fellow and a Member of the Latino Corporate Directors Association (LCDA). Ms. Comparin is a current Director of Universal Display Corporation and a former independent director of Black Box Corporation, a NASDAQ listed (BBOX) company. Black Box is a network solutions provider dedicated to helping clients build, manage, optimize and provide data security to their networks. She was a member of the Audit and Nominating & Governance Committees. Black Box was acquired by AGC Networks PTE Ltd., a company organized under Singapore law. Ms. Comparin was CEO of Animato, a technology solutions provider that partnered with clients to align business processes with technology to create value. Services included design, implementation and software as a service (SaaS). Animato’s client base consisted of global companies in the energy, retail, and services industries as well as large multi-billion-dollar healthcare and government systems. Ms. Comparin was an Ernst & Young Entrepreneur of the Year Finalist, Southwest and received a Tech Titans Award for Emerging Company CEO as well as a Greater Dallas Chamber International Business Award. Animato was certified as a Hispanic-owned company and was sold in 2016. Prior to establishing Animato, Ms. Comparin was president of ALLTEL’s Enterprise Network Services Division, a group she created to provide consulting, integration and operations services to customers worldwide. She also served as vice president and general manager for Nortel’s Network Transformation Services Division providing consulting, project implementation and ongoing services to Fortune 1000 companies on a global basis. Previously, Ms. Comparin was general manager, Latin America at Recognition International, a global technology company. There, she developed and implemented the Latin American business plan including developing and managing distribution channels. Before joining Recognition International, Ms. Comparin held both U.S. and internationally based executive management positions at EDS. She began her career as a financial analyst for LTV Aerospace and Defense Company. Ms. Comparin earned a BBA in Finance from The University of Texas at Austin and has completed management programs at The Wharton School of Business and Harvard University. She is also active in community associations. 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 the increasingly important world of cyber security 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.

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Mr. Samuel G. Dawson is chief executive officer of Pape-Dawson Engineers, Inc. one of the largest and most respected engineering firms in Texas, with offices in San Antonio, New Braunfels, Austin, Houston, Dallas and Fort Worth. 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 chairmanchair of the 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, the Rotary Club of San Antonio, the San Antonio Mobility Coalition, Professional Engineers in Private Practice and The Tobin Center for the Performing Arts. At present, he is an active board member of the Southwest Research Institute, Methodist Healthcare Ministries and Haven for Hope. In 2013, Mr. Dawson was inducted into The University of Texas Cockrell School of Engineering Department of Civil, Architectural and Environmental Engineering Academy of Distinguished Alumni.Alumni, and in 2017, he was recognized as a distinguished graduate of the Cockrell School of Engineering. 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 theour Board has concluded that Mr. Dawson should continue serving on the Board.

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Fort Worth Texas native Mr. Crawford H. Edwards is president of Cassco LandDevelopment Co., Inc. and 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 TCUTexas Christian University Ranch Management program, he worked as a petroleum landman in Midland, Texas. Mr. Edwards serves on the board of directors of the Texas and Southwestern Cattle Raisers Association, the Southwestern Exposition and Livestock Show, the Fort Worth Convention and Visitors Bureau and the National Finance Credit Corporation. It is because of this experience, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Edwards should continue serving on the Board.

Mr. Ruben M. Escobedo is the former senior partner of Ruben Escobedo & Co., CPA, where he managed his own company for 30 years. A native of Floresville, Texas, he received a bachelor of business administration degree from St. Mary’s University. He began his practice of public accounting with Price Waterhouse in New York. He serves on the board of directors of CST Brands, Inc. (Corner Store), where he is on the Audit Committee. He is a past director of Valero Energy Corporation. Mr. Escobedo is past chair of the Audit Committee at The University of Texas at San Antonio. He is past chair of the board of trustees of the Catholic Community Foundation and is past chair of the board of trustees of St. Mary’s University and the Historical Centre Foundation. Mr. Escobedo is founding chair of the San Antonio-Mexico Foundation for Education and wasco-chair of the $22.5 million capital campaign for San Fernando Cathedral. It is because of his extensive and varied accounting experience and years of experience at Cullen/Frost, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Escobedo should continue serving on the Board.

Mr. Patrick B. Frost is Presidentpresident of Frost Bank. A native of San Antonio, he earned a BA degree in Economics from Vanderbilt University and an MBA degree from The University of Texas at Austin. He is the Chairman of the Audit Committee of The University of Texas Health Science Center, former chairman of the Free Trade Alliance of San Antonio and vice-chairmanchair of the Santa Rosa Children’s Hospital Foundation. Mr. Frost is also a trustee of the San Antonio Medical Foundation and serves on the board of trustees of United Way of San Antonio. He is on the Executive Committee of the San Antonio Livestock Exposition, and was advisory council chairmanchair 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.

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Mr. Phillip D. Green serves as chairman and chief executive officer 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 chief financial officer in 1995, a position he held until 2015. He2015 when he was named group executive vice president in 2001 and president of Cullen/Frost. He became chairman and CEO in 2016. During Green’s tenure at Frost, in 2015. Mr. Green also previously had oversight for Frost’s technology, operations and capital markets areas. In recent years hethe company has helped lead the company’s efforts to enhance its technology and product offerings as a part of delivering outstanding customer experiences. Mr. Green was a memberbecome one of the management team that helpednation’s 60 largest banks and has increased its common stock dividend for 25 consecutive years. At the same time, Frost navigatehas won numerous accolades for excellence and customer service, earning more Greenwich Excellence Awards for service to business clients than any other bank nationwide for three consecutive years, and receiving the Texas downtown of the 1980s, as well as the financial crisis of 2008highest ranking in which Frost declined the TARP funding program. Frost was the first bankcustomer satisfaction in Texas in the nation to publicly decline to applyJ.D. Power U.S. Retail Banking Satisfaction Study for TARP funds. Mr.ten consecutive years. Frost 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. Green is a past president and director of the South Texas Chapter of the Financial Executives Institute (FEI). He is also a past director and executive committee member of the San Antonio Symphony. He has served on the advisory committee for strategic planning for the Boy Scouts of San Antonio. Mr. Green is a past board member and a member of the investment committee for the Baptist Health Foundation of San Antonio. He currently serves on Thethe Federal Reserve Board’s Federal Advisory Council, serving the Fed’s 11th District. He also serves on the Board of Directors and Finance Committee of the Southwest Research Institute and on the University of Texas at Austin Chancellor’s Council Executive Committee, McCombs School of Business Accounting Advisory Council. Mr.Council and the McCombs Scholars Program committee. As a member of the Board of Directors of The Tobin Center for the Performing Arts, Green serves as Board Treasurer and as the Chairman of the Finance Committee. Green is also a member of the Executive Committee and Board of Trustees of the United Way of San Antonio and Bexar County. Green recently joined the University of Texas San Antonio Campaign Leadership Council and is a member of theMid-Sized Bank Coalition where he is a former executive committee member. Green graduated with honors from Thethe University of Texas at Austin in 1977, earning a bachelor’s degree in accounting. He is a Certified Public Accountant. Prior to joining Frost, he spent three years in public accounting with Ernst & Ernst. 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.

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 BA 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 a member of the board of trustees and the Audit and Finance Committees at both the Nasher Foundation and the Nasher Sculpture Center. Mr. Haemisegger is Chairmanpast chair of the board of trustees at the Hockaday School in Dallas where he previously served as chair of the Governance and Trusteeship Committee for two years and as the school’s treasurer for five years. In addition, he is a member of the board of trustees of the Dallas Museum of Art, a member of the graduate executive board of the Wharton School, a member of the advisory council of the Princeton University Art Museum, a member of the board of advisors of the Nasher Museum of Art at Duke University and 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 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.

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Mrs. Karen Jennings was senior executive vice president of Human Resources and Corporate Communications at Southwestern Bell Corporation, which became AT&T, Inc. During her long tenure at AT&T, she also held the positions of senior executive vice president of Human Resources and Corporate Communications, and president—president – Missouri for Southwestern Bell Telephone Company. Mrs. Jennings grew up in Carleton, Michigan, graduating from the University of Arkansas with a BS degree in Education. She also attended the executive education program at the University of Michigan and Northwestern University. She servesserved on the board of directors of Ladies Pro Golf Association (LPGA). for six years. It is because of her experience in business operations, management and telecommunications experience, as well as her knowledge of the communities we serve, that our Board has concluded that Mrs. Jennings should continue serving on the Board.

Mr. Richard M. (Tres) Kleberg III, a fifth generation Texan from Kingsville, Texas, has been managing partner of SFD Enterprises, LLC, a private family investment management firm, for over 30 years. He is a graduate of Trinity University with a BS degree in Political Science and the Southwest Graduate School of Banking at Southern Methodist University. He joined Frost Bank’s executive training program after college and became a trust and business development officer and then a commercial loan officer. Mr. Kleberg served on the board and Audit Committee of the Abraxas Petroleum Corporation for 16 years and was a director and served on the Audit Committee of Kleberg First National Bank. He served as a director and a member of the Investment/ Finance and Compensation Committee of the King Ranch, Inc. He currently serves on the board of trustees of Trinity University and sat on the Finance Committee for more than 25 years. Mr. Kleberg is on the advisory board of The Children’s Hospital of San Antonio Foundation. He is also a current member and past chair of the board of the San Antonio Livestock Exposition Educational Fund, Inc. Mr. Kleberg was appointed to serve as the civilian aide to the Secretary of the Army Texas/South in 2008. In addition, he serves on the development board of The University of Texas Health Science Center in San Antonio and on the Chancellor’s Advisory Council of The University of Texas. He is also a trustee of the Naval Aviation Museum Foundation. It is because of his experience in banking and his years of experience at Cullen/Frost, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Kleberg should continue serving on the Board.

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Mr. Charles W. Matthews, formerly general counsel of Exxon Mobil Corporation, spent his entire career at Exxon, the world’s largest energy company. A graduate of Thethe University of Texas at Austin with a BA degree in government, he earned a JD 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. A native of Houston, he has served as a national trustee for the Southwestern Region of The Boysis an emeritus member and Girls Clubs of America. He is a member of the advisory board and the past chairmanchair of the University of Houston Law Foundation. Mr. Matthews is also past chair and past president of theEx-Students Association of The University of Texas and serves as a board member and chair of the investment committee of The University of Texas System Foundation. He serves on the board of Trinity Industries Inc. where he is a member of the Texas Exes Scholarship FoundationHuman Resources Committee and past chair of The Universitythe Corporate Governance and Directors Nominating Committee, and he is a past director of Texas. HeForestar Group, Inc. Also, Mr. Mathews serves on the boardsboard of Trinity Industries Inc., and Children’s Medical CenterHealth of Dallas and is a member of the Executive Committee and past chair of the Texas Cultural Trust.Trust and is a former director of the International Association of Defense Counsel. It is because of his experience in corporate governance and thein-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.

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A native of Kingsville, Texas, Mrs. Ida Clement (Weisie) Steen gained investment experience through managing personal holdings for the past 4045 years. She is regent emerita for the Texas A&M University System, where she served on the Finance Committee and as special liaison to the Texas Growth Fund Board. A graduate of Trinity University, she was a teacher and administrator at Learning About Learning Educational Foundation. She chaired the 2011 Texas Inaugural Committee as well as the 150th anniversary celebration of King Ranch, Inc. Mrs. Steen has served as chair of the board of trustees of San Antonio Academy and as vice chairvice-chair and trustee of the Santa Rosa Children’s Hospital Foundation Endowment Fund. She served on thesix-member Texas State Preservation Board, which is chaired by the governor and oversees the State Capitol, the Texas State History Museum and the Governor’s Mansion. By gubernatorial appointment, she sits on the three-memberfive-member Texas Alcoholic Beverage Commission, the agency that regulates all phases of the alcoholic beverage industry in Texas.Texas, and is nearing the end of her term. It is because of her experience in investing and her years of experience at Cullen/Frost, as well as her knowledge of the communities we serve, that our Board has concluded that Mrs. Steen should continue serving on the Board.

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Mr. Graham Westonco-founded Rackspace Hosting, Ltd. During his almost 20 year tenure at the company, headquartered in his hometown of San Antonio he served as CEOchief executive officer (on two occasions) and Chairmanexecutive chair of the Board.board. Rackspace advanced from astart-up companyventure in 1998, to a public company in 2008, toand later a company with annual revenue of $2 billion dollars whenat the time it was sold in 2016, resulting in a privately owned company.2016. A graduate of Texas A & M University and seriala consistently successful entrepreneur with a portfolio of downtown San Antonio property, including an investor of the office high-rise Weston Centre, Mr. Weston formed Weston Urban, LLC, toin 2012. A primary area of focus on downtown real estate development. He has taken an active role in helping to revitalizefor the company is there-development of San Antonio’s urban coredowntown. He is also passionate about fostering the success of the City’s growing tech sector andstart-up ecosystem. development of the tech talent in the city. Mr. Weston was instrumental in the creation ofco-founded and owns Geekdom, an entrepreneurial and fundstech incubator. His charitable work is done through the 80/20 Foundation, forwhich promotes entrepreneurship and education. In addition to his deep commitment to San Antonio and the purposecommunities we serve, Mr. Weston brings broad knowledge and experience in technology to our Board, as well as considerable insight in a wide variety of investing in programs to encourage entrepreneurship, technology education, and development in downtown San Antonio.specialized fields, including the increasingly critical domain of cyber security. It is because of histhis knowledge and experience in the technology industry and his insight into a wide variety of areas, including the increasingly important world of cyber security and extending technology to customers, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Weston should serve on the Board.

Mr. Horace Wilkins, Jr. was president of Special Markets and a regional president of Southwestern Bell Corporation, which became AT&T, Inc. during his30-year career with the company. A native of Fort Worth, he received a BS degree in Social Biology from Yale University and earned an MBA degree in General Business from the University of Dallas. He is a member of the board and serves on the Compensation and Benefits Committee of U.S. Sugar Corporation. Mr. Wilkins is former chairman of the board of The Jordan Development Corporation. It is because of his experience in business operations, management and telecommunications and his years of service at Cullen/Frost, as well as his knowledge of the communities we serve, that our Board has concluded that Mr. Wilkins should continue serving on the Board.

Miscellaneous Information

There are no arrangements or understandings between any Director nominee or Director of Cullen/Frost and any other person regarding such nominee’s or Director’s selection as such.

CERTAIN CORPORATE GOVERNANCE MATTERS

Cullen/Frost believes that it has operated over the years with sound corporate governance practices that exemplify its commitment to integrity and to protect both the interests of its shareholders and the other constituencies that it serves. These practices include a substantially independent Board, periodic meetings of

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non-management Directors, and a sound and comprehensive code of conduct, which obligates Directors and all employees to adhere to the highest legal and ethical business practices. A review of some of Cullen/Frost’s corporate governance measures is set forth below.

Director Independence

The Board believes that a substantial majority of its members should be independent within the meaning of the NYSE’s rules. To this end, the Board reviews annually the relevant facts and circumstances regarding

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relationships between Directors and Cullen/Frost. The purpose of the Board’s review is to determine whether any Director has a material relationship with Cullen/Frost (either directly or as a partner, shareholder or officer of an organization that has a relationship with Cullen/Frost).

In connection with the Board’s latest review, the Board determined that the following Directors,Director nominees, who compose approximately 80%76.9% of the Board,thirteen nominees, are independent within the meaning of the NYSE’s rules: Mr. R. Denny Alexander, Mr. Carlos Alvarez, Dr. Chris M. Avery, Mr. Anthony R. Chase, Ms. Cynthia J. Comparin, Mr. Samuel G. Dawson, Mr. Crawford H. Edwards, Mr. Ruben M. Escobedo, Mr. David J. Haemisegger, Mrs. Karen E. Jennings, Mr. Charles W. Matthews, and Mrs. Ida Clement Steen, Jr. In addition, the Board determined that current Directors Mr. Richard M. Kleberg III Mr. Charles W. Matthews, Mrs. Ida Clement Steen, and Mr. Horace Wilkins Jr., were independent within the meaning of the NYSE’s rules.

Mr. Patrick B. Frost and Mr. Phillip D. Green are not independent because they are executive officers of Cullen/Frost. The Board has determined that Mr. Graham Weston is not independent within the meaning of the NYSE’s rules because he controls, and has ana 21% ownership interest in, entities that have entered into certain banking, property and service transactions with Cullen/Frost and its subsidiaries, described under Certain“Certain Transactions and Relationships,Relationships”, that exceed the quantitative thresholds set forth in the NYSE’s bright-line independence tests. TheWhile these transactions involve payments to, and payments from, Frost Bank in amounts that exceed the greater of $1,000,000 and 2% of the Weston affiliated entities’ consolidated gross revenues, the Corporate Governance and Nominating Committee has reviewed each of these transactions in accordance with the criteria described in “Certain Transactions and Relationships-Policies and Procedures for Review, Approval or Ratification of Related Party Transactions” and has determined that the transactions were all entered into in the ordinary course of business, havehad substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to Mr. Weston,Cullen/Frost, and did not involve more than the normal risk of collectability or present other unfavorable features. In particular, the Corporate Governance and Nominating Committee noted that Mr. Weston was not a Director or nominee for Director at the time these transactions were entered into.

In making its independence determinations, the Board considers the NYSE’s rules, as well as the standards set forth below. The Board adopted these standards pursuant to the NYSE’s rules to assist in making independence determinations. For purposes of the standards, the term “Cullen/Frost Entity” means, collectively, Cullen/Frost and each of its subsidiaries.

Credit Relationships.    A proposed or outstanding relationship that consists of an extension of credit by a Cullen/Frost Entity to a Director or a person or entity that is affiliated, associated or related to a Director should not be deemed to be a material relationship adversely affecting such Director’s independence if it satisfies each of the following criteria:

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The Board determined that credit relationships with each of our independent Directors satisfied these criteria.

Non-Credit Banking or Financial Products or Services Relationships.    A proposed or outstanding relationship in which a Director or a person or entity that is affiliated, associated or related to a Director procuresnon-credit banking or financial products or services from a Cullen/Frost Entity should not be deemed to be a material relationship adversely affecting such Director’s independence if it (i) has been or will be offered in the ordinary course of the Cullen/Frost Entity’s business and (ii) has been or will be offered on terms and under circumstances that were or are substantially similar to those prevailing at the time for comparablenon-credit banking or financial products or services provided by the Cullen/Frost Entity to other unrelated persons or entities. The Board

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determined thatnon-credit banking or financial products or services relationships with each of our independent Directors satisfied these criteria.

Property or Services Relationships.    A proposed or outstanding relationship in which a Director or a person or Entity that is affiliated, associated or related to a Director provides property or services to a Cullen/Frost Entity should not be deemed to be a material relationship adversely affecting such Director’s independence if the property or services (i) have been or will be procured in the ordinary course of the Cullen/Frost Entity’s business and (ii) have been or will be procured on terms and under circumstances that were or are substantially similar to those that the Cullen/Frost Entity would expect in procuring comparable property or services from other unrelated persons or entities. The Board determined that the following property or services relationships involving amounts less than $120 thousand satisfied these criteria: lease arrangements involving Cullen/Frost Entities and companiesa company in which Mr. R. Denny Alexander and Mr. Crawford H. Edwards have interests as well as thehas interests; jewelry products provided to Cullen/Frost Entities by a company in which Dr. Chris M. Avery has interests; and engineering services provided to Cullen/Frost Entities by companiesa company in which Dr. Chris Avery and Mr. Samuel G. Dawson have interests, as further described under Certainhas interests. For details regarding relationships involving amounts greater than $120 thousand, see “Certain Transactions and RelationshipsRelationships” elsewhere in this document, satisfied these criteria.document.

Meetings ofNon-Management Directors

Cullen/Frost’snon-management Directors meet in executive sessions without members of management present at each regularly scheduled meeting of the Board. The Lead Director and Chairman of the Board’s Corporate Governance and Nominating Committee presides at the executive sessions. As discussed above under “General Information about the Board of Directors—Leadership Structure”, Mr. Royce S. CaldwellCharles W. Matthews currently serves as the Lead Director and Chairman of the Board’s Corporate Governance and Nominating Committee and Mr. Charles W. Matthews will succeed Mr. Caldwell in these positions upon Mr. Caldwell’s retirement on April 27, 2017.Committee.

Communications with Directors

The Board has established a mechanism for shareholders or other interested parties to communicate with the full Board of Directors as a group, thenon-management Directors as a group and withor the presidingnon-management Lead Director. All such communications, which can be anonymous or confidential, should be addressed to the Board of Directors, theNon-Management Directors or the Lead Director (as applicable) of Cullen/Frost Bankers, Inc., c/o Corporate Secretary, 100111 West Houston Street, Suite 100, San Antonio, Texas 78205.

In addition, the Board has established a mechanism for shareholders or other interested parties that have concerns or complaints regarding accounting, internal accounting controls or auditing matters to communicate them to the Audit Committee. Such concerns or complaints, which can be anonymous or confidential, should be addressed to the Audit Committee of Cullen/Frost Bankers, Inc., c/o Corporate Secretary, 100111 West Houston Street, Suite 100, San Antonio, Texas 78205.

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For shareholders or other interested parties desiring to communicate with the full Board of Directors,non-management Directors, the presidingnon-management Lead Director or the Audit Committee bye-mail, telephone or U.S. mail, please see the information set forth on Cullen/Frost’s website at frostbank.com. Alternatively, any shareholder or other interested party may communicate in writing by contacting the Corporate Secretary Stan McCormick, at 100111 West Houston Street, Suite 100, San Antonio, Texas 78205. These communications can be confidential.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines, which reaffirm Cullen/Frost’s commitment to having strong corporate governance practices. The Guidelines set forth, among other things, the policies of the Board with respect to Board composition, selection of Directors, Director orientation and continuing training, executive sessions ofnon-management Directors, Director compensation and Director responsibilities. The Guidelines are available on Cullen/Frost’s website at frostbank.com or in print to any shareholder making a request by contacting the Corporate Secretary Stan McCormick, at 100111 West Houston Street, Suite 100, San Antonio, Texas 78205.

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Code of Business Conduct and Ethics

The Board has adopted a Code of Business Conduct and Ethics for Directors and Cullen/Frost employees, including Cullen/Frost’s Chief Executive Officer, Chief Financial Officer and principal accounting officer. The Code addresses, among other things, honest and ethical conduct, accurate and timely financial reporting, compliance with applicable laws, accountability for adherence to the Code and prompt internal reporting of violations of the Code. The Code prohibits retaliation against any Director, officer or employee who in good faith reports a potential violation. The Code is available on Cullen/Frost’s website at frostbank.com or in print to any shareholder making a request by contacting the Corporate Secretary Stan McCormick at 100111 West Houston Street, Suite 100, San Antonio, Texas 78205. As required by law, Cullen/Frost will disclose any amendments to or waivers from the Code that apply to its Chief Executive Officer, Chief Financial Officer and principal accounting officer by posting such information on its website at frostbank.com.

EXECUTIVE COMPENSATION AND RELATED INFORMATION

Compensation and Benefits Committee Governance

Charter.    The charter of the Compensation and Benefits Committee is posted on Cullen/Frost’s website at frostbank.com.

Scope of authority.    The primary function of the Compensation and Benefits Committee is to assist the Board in fulfilling its oversight responsibility with respect to:

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Delegation authority.    Although the Committee approves the normal annual grant of equity to officers, it delegates authority to the CEO to allocate a specified pool of equity compensation awards to address special needs as they arise.

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Role of executive officers.    After consulting with the Committee’s compensation consultant and the Company’s Chief Human Resources Officer, the CEO recommends to the Committee base salary, target incentive levels, actual incentive payments and long-term incentive grants for Company executive officers. The Committee considers, discusses and modifies the CEO’s recommendations, as appropriate, and takes action on such proposals. The CEO does not make recommendations to the Committee on his own pay levels. The Committee, in executive session and without members of Cullen/Frost’s managementthe CEO present, determines the pay levels for the CEO to be ratified by the Board.

Role of compensation consultants.    The Committee retains Meridian Compensation Partners, LLC (“Meridian”) to serve as its outside independent compensation consultant.

Meridian’s role is to serve and assist the Committee in its review and oversight of executive and director compensation practices and to assist the CEO and company management in reviewing, assessing, and developing recommendations for Cullen/Frost’s executive compensation programs.

The nature and scope of services rendered by Meridian on the Committee’s behalf is described below:

The Committee did not direct Meridian to perform the above services in any particular manner or under any particular method. The Committee has the final authority to hire and terminate its consultant, and the Committee evaluates the consultant annually.

In 2016,2019, Meridian did not provide any services for the Committee or Cullen/Frost outside of the compensation consulting services outlined above.

InDuring its January 20162019 and 20172020 meetings, the Committee reviewed the independence of Meridian as its consultant. Specifically, the Committee took into account the six independence factors as adopted by the SEC in

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Rule10C-1 under the Exchange Act and applicable NYSE rules. The Committee determined that Meridian is an independent adviser to the Committee.

The Committee’s consultant from Meridian attended all of the regularly scheduled Committee meetings in 2016.2019. The Committee’s consultant assisted the Committee with the market data and an assessment of executive compensation levels and program design, CEO compensation, outside Director compensation and support on various regulatory and technical issues.

Compensation and Benefits Committee Interlocks and Insider Participation

During the last fiscal year, none of the members of the Compensation and Benefits Committee (Royce S. Caldwell, Ruben(Dr. Chris M. Escobedo,Avery, Mrs. Karen E. Jennings and Mr. Charles W. Matthews) was or had ever been one of our officers or employees. In addition, during the last fiscal year, none of our executive officers served as a member of the board of directors ofor the compensation committee of any other entity that has one or more executive officers serving on our Board or Compensation and Benefits Committee. Some of the members of the Compensation and Benefits Committee, and some of their associates, are current or past customers of one or more of Cullen/Frost’s subsidiaries. Sincesubsidiaries and, since January 1, 2016,2019, transactions between these persons and such subsidiaries have occurred, including borrowings. In the opinion of management, all of the transactions have

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been in the ordinary course of business, have had substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the lender, and did not involve more than the normal risk of collectability or present other unfavorable features. Additional transactions may take place in the future. See “Certain Transactions and Relationships” for a description of an immediate family member of Mr. Charles W. Matthews and Cullen/Frost.

Compensation and Benefits Committee Report

The Compensation and Benefits Committee has reviewed and discussed theCompensation Discussion and Analysis with management. Based on our review and discussions, we have recommended to the Board that theCompensation Discussion and Analysis be included in this proxy statement and incorporated by reference into Cullen/Frost’s Annual Report on Form10-K for the year ended December 31, 2016.2019.

Royce S. Caldwell,Charles W. Matthews, Committee ChairmanChair

RubenChris M. EscobedoAvery

Karen E. Jennings

Charles W. Matthews

Compensation Discussion and Analysis

Executive Summary

Cullen/Frost is a financial holding company, headquartered in San Antonio, Texas, with approximately 136140 financial centers throughout Texas. As one of the 50 largest U.S. banks, weWe provide a wide range of banking, investment and insurance services to businesses and individuals in the Austin, College Station, Corpus Christi, Dallas, Fort Worth, Houston, Permian Basin, Rio Grande Valley, and San Antonio and Victoria regions. Founded in 1868, we have helped clients with their financial needs during three centuries. Over the years, we’ve grown significantly, but what hasn’t changed is our commitment to our values and to the relationships we’ve forged. Those relationships include our employees. We believe a key factor in our success is consistency—consistency in culture, philosophy and management andas well as consistency in executive pay philosophy and practices.

At Cullen/Frost, we enjoy a strong history of sound and profitable performance. We believe everyone is significant at our Company and successful performance occurs when everyone works together as a team with common goals. As a result, our executive compensation programs generally focus on total company success. At Cullen/Frost, weWe believe in providing a “square deal” for our shareholders, customers and employees. Therefore, we generally

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target our executive compensation at target, at approximately the 50th percentileto be in a competitive range of the external marketour peer group while taking into account various other factors, including market conditions, company performance, internal equity, and individual experience levels, among other things. Because we believe Cullen/Frost is a safe and sound place to do business, we strive to avoid excessive risk, and do not offer executive compensation programs that would encourage the taking of such risks. Further, we believe that the consistency and continuity of our management team serves to enhance our conservative risk profile. The average tenure with Cullen/Frost of the sixfive Named Executive Officers (as defined below) included in this proxy statement is in excess of 3637 years. Finally, we structure our executive compensation programs to align management and shareholder interests.

As we celebrate our 152nd anniversary this year, we gratefully acknowledge that we enjoy a very rich history as a company. We appreciate a robust tradition of not only solid financial performance, but of strengthening and enhancing the communities we serve and making people’s lives better. From the very beginning, we have been a values driven company and we continue to operate our business guided by our core values of integrity, caring and excellence. It is with pride and great anticipation that we carry this heritage and culture into our future.

Key 2016 Performance.2019 Company Performance Outcomes.    20162019 was another great year for Cullen/Frost. Frost:

We achieved a strong level of net income of $296approximately $436 million (as disclosed in our annual report on Form10-K filed with the SEC on February 4, 2020) realizing recordstrong earnings for our Company as well asdespite falling slightly exceedingshort of our budgeted expectations. expectations of $456 million.

As a result of our strong performance and consistent with ourpay-for-performance compensation philosophy, yet acknowledging that actual performance fell below budgeted expectations, annual incentives paid to our Named Executive Officers for 20162019 performance were generally paid at 10% below target.

20162019 Compensation Actions.    During 2016,2019, in light of our continued strong financial performance, our management team’s performance and to ensure that our executive team’s compensation remains competitive with our peer group (as described below), the following decisions were made concerning compensation of the Named Executive Officers with the exception of Mr. Evans (who retired on March 31, 2016):Officers:

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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.

Management Succession Completed.    Effective as of March 31, 2016, we completed our previously announced management transition when Mr. Green assumed the roles of Chairman of the Board and Chief Executive Officer of Cullen/Frost and Frost Bank upon Mr. Evans’ retirement. Mr.  Bracher also assumed the role of President of Cullen/Frost as of that date.

20162019 Say On Pay Vote

The 20162019 Annual Shareholders Meeting was held on April 28th. This marked the sixth annual “Say on Pay” vote by shareholders of Cullen/Frost.24th. The shareholders showed their approval of the Company’s executive pay programs with over 97% of all votes cast being in favor of approval of the executive pay programs. The Compensation and Benefits Committee (the “Committee”) and the Board were very appreciative of the positive vote and the strong message it delivered. The strong shareholder support has reaffirmed the Committee’s approach to executive compensation philosophy and programs. Accordingly, for 20162019 the Committee continued to administer the same conservative reward programs and to demonstrate the same consistent pay philosophies that have been in place historically. And while that program remains true to its conservative nature, the Committee did make one change in the long-term incentive award vehicles. The Committee, in its discretion, chose to grant Performance Share Units as opposed to Stock Options during 2016.

Named Executive Officers

This Compensation Discussion and Analysis is included to provide the material information necessary for our shareholders to understand the objectives and policies of Cullen/Frost’s compensation program for the two officers serving as CEO, each during a different portion of the year, the CFO, and the other three most highly compensated executive officers of Cullen/Frost (collectively, the “Named Executive Officers”) and to describe how these policies were implemented for 20162019 performance. The following executives were our “Named Executive Officers” for 2016:2019:

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Objectives of the Compensation Program

The Cullen/Frost compensation program is administered by the Committee. The objectives of the program are to:

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Design of the Total Compensation Program and Overview of Compensation Decisions madeMade in 20162019

Pay PhilosophyPhilosophy/Pay Determination Process

In general, it is Cullen/Frost’s compensation philosophy to generally target aggregate executive compensation at target for each of our executives at the 50^th percentileto be in a competitive range of the external marketour peer group (as described below). Actual compensation paid torealized by executives reflectsis primarily based on the Company’s performance versus market and therefore may fall above or below the 50^th percentile in a given year.performance. In addition to external competitiveness, the Committee evaluates the following factors when making compensation decisions for executive officers:

The Committee does not assign a specific weighting to these factors and may exercise its discretion when making compensation decisions for Named Executive Officers.

When reviewing the components of the compensation program, the Committee, together with Mr. Green, the Chief Human Resources Officer, and the Committee’s independent compensation consultant, work to ensure the total package is competitive with the external marketplace and remains balanced from an internal equity standpoint. However, the Committee believes that it is the total package that should be competitive, and not necessarily the individual elements.

Mr. Green makes recommendations to the Committee on the pay levels of his direct reports (including the other Named Executive Officers) for the Committee’s review and approval. The Committee reviews a total compensation tally sheet for Mr. Green annually. Cullen/Frost uses the tally sheet to inform the Committee on Mr. Green’s total compensation and accumulated wealth from the Company’s equity and retirement benefit plans. Mr. Green does not make recommendations to the Committee on his own pay levels. The Committee, in executive session and without members of Company managementMr. Green present, determines the pay levels for Mr. Green to be ratified by the Board. Mr. Evans’ 2016 compensation throughFor additional information about the date of his retirement was determined in accordance withCommittee’s compensation-setting process, see the procedure used to determine Mr. Green’s compensation.

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section above entitled “Compensation and Benefits Committee Governance” on page 20.

The Committee does not maintain a stated policy with regard to cash versusnon-cash compensation. However, the allocation of cash andnon-cash compensation for each of the Named Executive Officers is reviewed by the Committee annually.

In general, the Committee does not take into account amounts realizable from prior compensation when making future pay decisions. However, previous grant date amounts and values are considered, particularly when establishing long-term incentive award grants.grant levels.

In light of the volatility in the U.S. financial markets in the last several years and the concern over executive compensation among financial institutions, the Committee has taken the additional measure of meetingtraditionally met at least annually with senior officers, including the Chief Risk Officer, as well asalong with the Committee’s compensation consultant, to discuss the risk profile of our total executive compensation program for Named Executive Officers. For 2016,2019, the Committee determined that the Company’s total compensation program, which balances fixed compensation (base pay and retirement benefits) and various forms of shorter- and longer-term incentive pay (annual cash incentive and equity compensation), did not encourage excessive or unnecessary risks.

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Benchmarking and Peer Companies

Under the direction of the Committee, the Company, together with Meridian, the Committee’s independent external compensation consultant, conducts an annual competitiveness review of base pay, annual incentive pay and long-term incentive pay. The competitiveness of other forms of pay is reviewed on a periodic basis, as determined by the Committee.

External market data is provided by Meridian. For purposes of benchmarking executive compensation, the Committee has determined that the external market should be defined as peer companies in the banking industry of a similar asset size to Cullen/Frost. For 2016,2019, Meridian provided market data collected from public filings for the following 2025 peer companies.

For 2016,2019, Meridian reviewed our compensation peer group and recommended the following changesadditions, which were approved by the Committee:

In addition, the following peers were removed from the peer group because they were acquired; and removed Comerica Incorporation and First Republic Bank because they fell outside of ourno longer in the targeted range in total assets as discussed below.asset range:

These changes were recommended in order to satisfy the existing peer selection criteria and allowed us to maintain a comparable number of peer companies as used previously.

weighting of external market data relative to other factors to determine compensation levels of the Named Executive Officers. Instead, the Committee, in consultation with Meridian evaluates the market data, along with the other factors listed previously to determine the appropriate compensation levels of the Named Executive Officers on an individual basis.

Relation of Pay Practices to Risk Management

Key elements of Cullen/Frost’s mission are to build long-term relationships based on safe, sound assets. In support of its mission, our Company has long adhered to compensation policies and practices, described below, that are designed to support strong risk management.

Based on the points above, the Committee therefore does not believe that our compensation policies and practices encourage taking excessive or unnecessary risk. The Committee, together with our Chief Human Resources Officer and Chief Risk Officer, regularly reviews all plans identified as potentially creating risk, regardless of magnitude, particularly with respect to executive officers. Based on the structure of our Company’s longstanding compensation policies and practices, the Committee believes that those compensation policies and practices are not reasonably likely to have a material adverse effect on Cullen/Frost.

Elements of Compensation: the 20162019 Compensation Program Detail and Key 20172020 Actions

Elements of Compensation

To ensure achievement of our executive compensation program objectives, compensation is provided to the Named Executive Officers in the following elements:

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The purpose, design, determination of amounts, and 2016 pay decisions are described below.

Compensation Element		Purpose
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 Bonus 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 a cash incentive payment.
Long-Term Incentive Pay		Long-term incentives in the form of equity-based awards are awarded to the Named Executive Officers in an effort to align management and shareholder interests, ensure future performance of Cullen/Frost, enhance stock ownership opportunities, and increase shareholder value, in each case, over the longer term.
		Our long-term incentive awards provide for a3-year performance period for performance share units and a4-year vesting period for time-based restricted stock units.
Benefits and Perquisites		Cullen/Frost provides an employee benefits package, including retirement, 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 taxgross-ups on perquisites.
Agreements with Executive Officers		We do not provide severance benefits to our executive officers other than in the event of a qualifying termination following achange-in-control.
		We have entered intochange-in-control agreements with certain executive officers, including our Named Executive Officers, to encourage executives to remain engaged through any pendingchange-in-control.
		We do not provide for golden parachute taxgross-ups.

Base Pay2019 Compensation Program Detail

Base pay is an important element of executive compensation because it provides executives with a base level of monthly income. As discussedPay.    Base salary levels for our Named Executive Officers are listed in the Pay Philosophy section, internal and external equity, performance, experience, and other factors are considered when establishing base salaries. 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 yearchart below and are effective January 1^st ofalso shown in the following year. No specific weighting is targeted for base salaries as a percentage of total compensation.

Summary Compensation Table. During its Fall 20162019 meeting, the Committee approved 20172020 base pay increases for the Named Executive Officers with the exception of Mr. Evans.Officers. The increases were based on external market data provided by Meridian, internal equity, any change in responsibility, and each individual’s performance. The base pay increases approved by the Committee are as follows:

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The base pay increases approved by the Committee for the Named Executive Officers became effective January 1, 20172020 and approximated an average of 3.7%1.9% of existing base pay. Base pay levels for 2016 are listed above and are also set forth in the Summary Compensation Table.

Annual Incentive PayPay.    

Annual incentive pay is provided tofor our Named Executive Officers to recognize achievement of annual financial targets and is paid in accordance with the quantitative and qualitative terms of the Bonus 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 a cash incentive payment.

The Bonus Plan for the Chief Executive Officer differs from that of the other Named Executive Officers. Both bonus plans are described in the sections that follow.under two different plans.

20162019 Annual Incentives for the Chief Executive Officer and the Chairman; 20172020 Action.    Annually, during its first-quarter meeting,For 2019, the Committee establishes a cap tied to net income for the Chief Executive Officer’s annual incentive, thereby directly relating the Chief Executive Officer’s annual incentive to the performance of Cullen/Frost. This measurement has historically been 0.8% of net income and, after the close of the fiscal year, the Committee then exercises only downward discretion to arrive at an annual incentive payment amount for Mr. Green. Traditionally, the Committee has not paid an incentive to the CEO at the full 0.8% of fiscal year net income, but closer to a target of 90—100% of his base salary depending on the performance of the Company and the CEO.

For 2016, the Committee again approved a cap of 0.8% of fiscal year net income for Mr. Green’s annual incentive and a target incentive of 90%to remain at 110% of his base salary. To determine hisMr. Green’s 2019 annual incentive payment amount,

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the Committee took into account our 2019 net income as compared to budgeted expectations and exercised downward discretion based on Mr. Green’s 2019 performance under the following qualitative measures approved by the Committee.Committee:

The Board must ratifyratifies the annual incentive payment amount determined and certified by the Committee for Mr. Green.

Cullen/Frost’s net income budget for a given year typically represents a meaningful increase in earnings per share over the previous year. In finalizing a budget, the current economic, regulatory and interest rate environments are considered as well as market expectations. The budget must be ratified by the Board. For 2016,2019, the Company’s budgeted level for net income was $295$456 million. Actual performance for 20162019 fell slightly exceededbelow this level, as the Company realized actual net income of $296approximately $436 million.

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In light of these factors, and taking into account the qualitative measures shown above, the Committee, exercised downwardin its discretion, from the initial cap of 0.8% of net income. The Committee elected to pay an annual incentive to Mr. Green at 10% below target of $855,000.or $999,900. This was ratified by the Board on January 26, 2017,29, 2020, and can be seenis shown in the Summary Compensation Table.

For 2017, the Committee has again approved a cap for the CEO of 0.8% of fiscal year net income.

At its October 20162019 meeting, the Committee reviewed the competitiveness of Mr. Green’s annual incentive target. The target level appeared to be slightly lower thangenerally consistent with prevailing target levels in the external market. Therefore, the Committee chose to increase themaintain a 110% annual target to 100% of base salary earningsincentive for Mr. Green for 2017.

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Under the terms of Mr. Evans’ letter agreement that was entered into in July 2015 upon announcement of his retirement effective March 31, 2016, Mr. Evans was eligible to receive apro-rata 2016 annual cash incentive for the period through his retirement, based on performance as determined by the Committee. Mr. Evans was paid a cash incentive payment at target of $300,000. This incentive plan payment can be seen in the Summary Compensation Table.2020.

2019 Annual Incentive PlanIncentives for the Other Named Executives.Executives; 2020 Action.    The remaining Named Executive Officers participate in the Executive Management Bonus Plan. Annually, an incentive pool is generated based on the financial performance of Cullen/Frost versus the budgeted expectations for the year. The incentive pool is funded at target if Cullen/Frost’s financial performance meets budgetour budgeted net income goal and is funded below target if Cullen/Frost’s financial performance falls below budget. A minimum percentage of budgetbudgeted net income must be achieved before the annual incentive pool is funded, and no incentive payments are made unless Cullen/Frost attains this minimum threshold. The incentive pool may be funded above target if Cullen/Frost achieves financial performance above budget. The Committee approves the corporate and individual objectives as well as the payment targets, which are expressed as a percentage of the executives’ base salary earnings for the year. There is not a stated cap on this plan. However, over the past decade, the most paid to any Named Executive Officer was 15% above the executive’spre-established annual incentive target for the applicable year.

For 2016,2019, Cullen/Frost establishedcontinued to observe the following individual targets as a percentage of 20162019 base salary for the Named Executive Officers in the Executive Management Bonus Plan:

The individual targets are not formula driven and no specific weighting is targeted for annual incentive pay as a percentage of total compensation. For each of the Named Executive Officers in the Executive Management Bonus Plan, the targets are set at the discretion of the Chief Executive Officer and must beare approved by the Committee. The incentive targets are based on external market data provided by Meridian, internal equity considerations, and strategic objectives for corporate performance. The individual targets for the next year are reviewed annually at the Fall meeting of the Committee and alteredadjusted as deemed appropriate.

Payment amounts for the Named Executive Officers, with the exception of the Chief Executive Officer, are made based on recommendations of the Chief Executive Officer and approval of the Committee. Annual incentive amounts in excess of, or below target may be paid at the discretion of the Chief Executive Officer with the approval of the Committee. Before the Chief Executive Officer makes recommendations to the Committee regarding annual incentive payments for the other Named Executive Officers, the Chief Executive Officer discusses these issues with Meridian. The Committee has the discretion to approve, disapprove or alteradjust the Chief Executive Officer’s recommendations.

The primary criterion for annual incentive payments for the Named Executive Officers (other than the Chief Executive Officer) is the measurement of actual net income vs. budgeted net income for Cullen/Frost.

As previously stated, Cullen/Frost’s actual 2019 net income performance met andfell slightly exceededbelow our budgeted expectationsnet income goal for 2016.2019, a shortfall of approximately 4.5%. As a result of, the Chief Executive Officer recommended to the Committee that annual incentive payments be paid to Mr. Salinas, Mr. Bracher, Mr. Frost and Mr. Perotti at 10% below target for 2016.2019. The Committee approved this recommendation. The 20162019 annual incentives were paid in February of 20172020 and can be seenare shown in the Summary Compensation Table.

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In October 2016,2019, the Committee reviewed the competitiveness of each Named Executive Officer’s incentive target level and determined that they were generally in line with the 50th percentile of the external market for

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their positions based on the information provided by Meridian. The Committee elected to maintain the same target levels for the Named Executive Officers in 20172020 as they had in 2016.2019. As previously stated, the target represents a percentage of base salary earnings.

Long-Term Incentive PayPay.    

Long-term incentives are awarded to the Named Executive Officers in an effort to align management and shareholder interests, ensure future performance of Cullen/Frost, enhance stock ownership opportunities, and increase shareholder value. Cullen/Frost maintains the 2015 Omnibus Incentive Plan which was approved by shareholders and authorizes the granting of the following types of awards for executives:

As shown in the Summary CompensationGrants of Plan Based Awards Table traditionallybelow and in recent years, long-term incentives have beenare awarded to the Named Executive Officers in the form of stock options, restricted stock,performance share units and when appropriate, restricted stock units. During 2016, the Committee elected to award performance share units to the Named Executive Officers instead of the stock options previously utilized. The decision was made to grant performance share units as opposed to stock options to even more closely tie the interests of the Named Executive Officers with that of the shareholders and to provide an explicit incentive for Executive Management to focus their efforts on maximizing shareholder value.

The size of the long-term incentive grant is determined by the Committee, taking into account a variety of factors including the value of prior year grants when made, external market data, internal equity considerations, individual and company performance, overall share usage, shareholder dilution and cost. It has generally beenis the Committee’s current practice to award long-term incentives in a combined package of approximately half stock optionsperformance share units and half restricted stock or restricted stock units, based on the estimated economic value of awards on the date of grant. In 2016, the Committee elected to likewise maintain an equally weighted mix of performance share units and restricted stock units. The weighting between performance share units and restricted stock units allows Cullen/Frost to strike a balance between performance and retention and minimizes the impact to shareholder dilution.

Performance Share Units.    Performance share units are utilized to align management and shareholder interests and to reward executives with shareholder value creation. In 2016,2019, performance share units were granted based on a market price of $76.07,$94.02, the closing price of a share of the Company stock on the date of grant, October 25, 2016.29, 2019. The grant includes a three-year performance period beginning January 1, 20172020 and ending December 31, 2019.2022. The performance metric is Return on Assets relative to the Peer Group as previously listed. Award vesting is as follows:

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The vesting of the performance share units is subject to Committee certification and the exercise of downward discretion. Achievement between the 25th and 75th percentiles listed above will be determined based on straight-line interpolation as determined by the Committee in its discretion. The performance metric and vesting schedule were strategically chosenstructured to align executives with long-term shareholder value creation, to be competitive, to enhance our retention efforts and help to manageminimize shareholder dilution.

The performance share units granted to the Named Executive Officers on October 25, 2016 were based on a three-year performance period that began on January 1, 2017 and ended on December 31, 2019 with vesting opportunities ranging from a minimum of 0% to a maximum of 150% of target. The performance criteria established by the Committee to determine the vesting of the performance share units was based on the Company’s Return on Average Assets relative to the peer group. The Committee reviewed the final ranking of

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the Return on Average Assets of each member of the peer group along with the Company’s Return on Average Assets at a special meeting called for that purpose on March 4, 2020. The Company achieved a 71.4 percentile ranking therefore resulting in a payout to the Named Executive Officers of 142.8% of target.

Restricted Stock Units.    Restricted stock units are granted to create an immediate link to shareholder interests, enhance ownership opportunities and maintain a stable executive team. The awards granted in 20162019 generally vest 100% four years from the date of the grant. This vesting schedule is both competitive and consistent with our traditional practice and encourages long-term value creation.

While the Committee believes a significant portion of Named Executive Officers’ total compensation should be linked to Cullen/Frost’s stock price, no specific weighting is targeted for long-term incentive pay as a percentage of total compensation.

During its October 20162019 meeting, the Committee reviewed the competitiveness of the long-term incentive program for the Named Executive Officers. External market data was provided by Meridian. In reviewing peer data, the Committee observed that the long-term incentive opportunities for Cullen/Frost’s Named Executive Officers were belowgenerally competitive but in some instances at the lower end of the competitive median.range relative to the external market data.

The Committee primarily considered these external factors, along with internal factors such as equity, performance, share usage, dilution, and cost to determine the 20162019 long-term incentive grants.

In its review, the Committee determined that it was critical to continue to place a strong emphasis on future financial performance and increasing shareholder value, while offering a competitive total compensation package overall. In 2016,2019, the Committee took into account the change in the market value of Company stock as compared to the prior year, along with the Committee’s desire to maintain competitive posture as it relates to award value, and, in its discretion, awarded long-term incentives to the Named Executive OfficersOfficers. In some instances, the grant was of similar if not slightly higher, economic value as compared to the prior year, in others, the grant was somewhat higher than the prior year’s grant.grant in order to maintain a competitive stance. For long-term incentives granted in 2016,2019, the Committee elected to continue to utilize a mix of half performance share units and half restricted units, based on the estimated economic value of the awards at the time of grant. The awards granted in 2016 can be seen2019 are shown in the Summary Compensation Table and the Grants of Plan-Based Awards Table.

The Committee believes that the Company’s use of performance share units and restricted stock units continues to create a strong alignment of executive team and shareholder interests.

Historically, the Committee has generally approved and granted long-term incentive awards to the Named Executive Officers and any other designated employees at its Fall meeting or at the hire date of new designated employees, as applicable.meeting. While Cullen/Frost maintains no policy, whether official or unofficial, for timing the granting of stock options or other equity-based awards in advance of the release of material nonpublic information, our practice has been to grant long-term incentive awards on the date of the Fall Committee meeting.

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BenefitsBenefits.

Cullen/Frost provides a benefits package including health and welfare and retirement 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. The following table provides a brief summary of Cullen/Frost’s retirement benefit programs and those eligible to participate:

For a detailed description of the above-referenced benefit plans, see the narrative following the 20162019 Pension Benefits Table (Page 43).Table. See the All Other Compensation Table (Page 39) for detail on benefits received by the Named Executive Officers.

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PerquisitesPerquisites.    

Cullen/Frost uses perquisites for Named Executive Officers to provide a competitive offering and to provide certain conveniences that we believe are reasonable. We do not pay tax reimbursements on perquisites. The aggregate perquisite value received by each Named Executive Officer can be seenis shown in the All Other Compensation Table. Below is a brief summary of the perquisites provided and the rationale for their use:

Physical Examinations.    In order to ensure the continued health of our executive team, the Named Executive Officers were given the opportunity to undergo a thorough physical examination with the physician of their choice with the cost to be underwritten by Cullen/Frost subject to a cap.

Personal Financial Planning Services.    To ensure the continued financial stability of our executive team, and to help maximize the amount executives realize from our compensation programs, the Named Executive Officers were given the opportunity to engage a financial advisor of their choice to provide personal financial planning services with the cost to be underwritten by Cullen/Frost subject to a cap.

Home Security Services.    To ensure the safety of our executive team, home security services are provided in certain instances.

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Club Memberships.    Club memberships are provided to all the Named Executive Officers to be used at their discretion for both personal and business purposes. This provides the Named Executive Officers with the ongoing opportunity to network with other community leaders.

Use of Jet Aircraft.    Through a provider in the fractional aircraft industry, Cullen/Frost has acquired use of jet aircraft hours. Use of these aircraft hours is provided to the Named Executive Officers in connection with their extensive business travel requirements. This service is afforded to the Named Executive Officers to reduce travel time and related disruptions and to provide additional security, thereby increasing their availability, efficiency, and productivity. Mr. Green has been authorized to use a portion of the aircraft hours fornon-business purposes, which should generally not exceed ten percent of the available hoursdays annually. Mr. Green did not use the jet aircraft hours fornon-business purposes during 2016. Mr. Evans, along with2019. His usage was well below the allotment for personal usage, and was taxed as imputed income. Additionally, both Mr. Green and Mr. Salinas, did incur imputed income in connection with family members accompanying them on business related travel. Imputed income rates are determined using the Standard Industry Fare Level (SIFL).

Life Insurance.    Group life insurance is provided to the Named Executive Officers with a death benefit equal to three times base salary earnings for the most recent year, not to exceed $2,000,000. See the All Other Compensation Table for more detail.

Agreements with Named Executive Officers

Change in Control Agreements.    Cullen/Frost haschange-in-control agreements with each of its Named Executive Officers as well as certain other key employees of the Company. The primary intent of these agreements is to:

Under the agreements, Mr. Green and Mr. Frost could receive severance payments of three times base salary and target annual incentive compensation plus a prorated annual incentive payment for the year of termination, and Mr. Salinas, Mr. Bracher and Mr. Perotti and Mr. Salinas could receive severance payments of two times base salary and target

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annual incentive compensation plus a prorated annual incentive payment for the year of termination, if their positions were terminated by Cullen/Frost within two years following a “Change in Control” and their employment was terminated by Cullen/Frost, for reasons other than Cause, death, disability or retirement. “Cause” is generally defined in the agreements as an executive’s (1) willful and continued failure to substantially perform his duties after delivery of a written demand for substantial performance; (2) willful engagement in conduct materially injurious to Cullen/Frost; or (3) conviction of a felony. The Committee established thechange-in-control benefits at their current level to be competitive and to provide executives with a level of pay and benefits comparable to what they had immediately prior to a change in control.

“Change in Control’’ is generally considered in the agreements to be:

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Further, thechange-in-control agreements provide that the Named Executive Officers would receive the severance payments described above if they terminate their employment for Good Reason within two years following achange-in-control. “Good Reason” is generally considered in the agreements as one or more of the following:

Thechange-in-control agreements also provide for a continuation of the welfare benefits of health care, life and accidental death and dismemberment, and disability insurance coverage for three years for Mr. Green and Mr. Frost, and two years for the remaining Named Executive Officers following termination of employment without Cause or for Good Reason. The agreements do not provide for any taxgross-up payments. Instead, the agreements contain a“net-better” cutback provision, meaning that an executive’s severance and otherchange-in-control benefits would be cut back to the level that eliminates the excise taxes due to excess parachute payments if such a cutback would put the executive in a betterafter-tax position than receiving the severance and otherchange-in-control benefits and paying the corresponding excise tax.

Under thechange-in-control agreements, if the executive becomes entitled to the severance benefits described above, all stock options that did not otherwise vest in conjunction with the change in control would become immediately exercisable and all the vesting restrictions would lapse on all outstanding restricted shares and restricted stock units. Additionally, the performance metric on any outstanding performance share units would be determined to have been earned as of thechange-in-control date but the award itself would continue to be subject to the time-based vesting for the remainder of the performance period. The exception to this schedule would be if the Named Executive Officer were terminated without causeCause within two years following thechange-in-control and then the award would become fully vested as of that date if earlier than the original close of the time-based vesting period. As described in previous year’s proxy statements, theThe 2015 Omnibus Incentive Plan that was approved by our shareholders in 2015 provides for “double-trigger” vesting of equity-based awards on achange-in-control, thereby eliminating the immediate “single-trigger” vesting of stock options and lapsing of restrictions of restricted shares/units upon achange-in-control that was a provision of our prior equity plan.

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Under thechange-in-control agreements, a change in control would have no impact on benefits available to Named Executive Officers under the frozen retirement and retirement restoration plans.

The Committee believes that thechange-in-control agreements are consistent with our objective to remain competitive, as compared to the external marketplace, with our executive compensation program. Thechange-in-control agreements do not affect decisions to be made regarding other elements of compensation and with the removal of the potential taxgross-up payment and the change to double-trigger equity vesting under these agreements in 2015, we believe we have strengthened our commitment to our originally stated objectives.

For detailed estimated payments upon a qualifying termination following a change in control, please see theChange-in-Control Payments Table.

Cullen/Frost does not maintain any other severance policies or employment contracts in place for its Named Executive Officers.

Consulting Agreement with Mr. Evans.    At the request of the Company, Mr. Evans agreed to provide consulting services to Cullen/Frost for five years following his March 31, 2016 retirement. The Company entered into a consulting agreement with Mr. Evans and agreed to pay Mr. Evans fees in the amount of $600,000 for the first year of the consulting term, with fees being reduced to $350,000 for the second and third years of the term and further reduced to $200,000 for the final two years of the term. In addition to providing the consulting services, Mr. Evans agreed not to compete with Cullen/Frost or to solicit any customers or employees of Cullen/Frost for the duration of the consulting term and for the three year period thereafter. Fees paid to Mr. Evans during 2016 in accordance with the agreement can be seen in the All Other Compensation Table.

Policy on 162(m)

Section 162(m) of the Internal Revenue Code generally limits the corporate tax deduction to $1,000,000 in a taxable year for compensation paid to each “covered employee” of Cullen/Frost, which under Section 162(m), includes all the Named Executive Officers (other than our Chief Financial Officer), unless the compensation is “performance based” (within the meaning of Section 162(m)).

In order to help preserve Cullen/Frost’s tax deduction, the Committee approved the Cullen/Frost Bankers, Inc. Deferred Compensation Plan For Covered Employees. In the event that a “covered employee’s” total compensation would exceed the amount deductible under Section 162(m), this plan provides for the deferral of cash components of the “covered employee’s” compensation until the plan year after he or she ceases to be a “covered employee” or upon his or her death or disability. For 2016, Mr. Evans was the only “covered employee” participating in the plan. The Company has reserved the ability to paynon-deductible compensation.-35-

Other Policies

Stock Ownership Guidelines

The Committee maintains Stock Ownership Guidelines for Executive Officers and Directors. The guidelines approved by the Committee are:

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For purposes of determining stock ownership levels, the following forms of equity interests are included in stock ownership calculations: