Tracey K. Henderson
APAAbout Tracey K. Henderson
Tracey K. Henderson (age 58) is Executive Vice President, Exploration at APA, appointed in January 2023 after serving as SVP, Exploration since April 2021; prior roles include senior exploration leadership at Kosmos Energy and geophysicist roles at Nexen, Hess, and Triton Energy . Company performance during 2024 included $869 million of free cash flow with 71% returned to shareholders, record-low safety incident rates, and attainment of investment-grade status at all three agencies—context for performance-linked pay programs Henderson participates in . APA’s 2022–2024 performance awards paid at 118% of target (TSR component paid 0%), indicating mixed long-term outcomes despite strong CROIC execution; say-on-pay support was ~70% in 2024, signaling moderate investor scrutiny of pay alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| APA Corporation | EVP, Exploration | Jan 2023–present | Leads global exploration program across U.S., Egypt, North Sea, and Suriname; tenure spans APA’s FID on Suriname Block 58 and portfolio reshaping post-Callon acquisition . |
| APA Corporation | SVP, Exploration | Apr 2021–Dec 2022 | Built/optimized exploration pipeline leading into 2023–2024 execution . |
| Kosmos Energy | Chief Exploration Officer | Feb 2019–Jan 2021 | Executive leadership of exploration portfolio (company-disclosed prior role) . |
| Kosmos Energy | SVP, Exploration | Jan 2017–Jan 2019 | Senior exploration leadership (company-disclosed prior role) . |
| Nexen, Hess, Triton Energy | Geophysicist roles | Prior years (not dated) | Technical/geophysical foundation supporting later executive leadership . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus % | Target Bonus ($) | Actual Bonus ($) | Notes |
|---|---|---|---|---|---|
| 2024 | 625,000 | 100% | 625,000 | 681,250 (109% of target) | All NEO targets except CEO/CFO unchanged vs 2023 . |
| 2023 | 625,000 | 100% (unchanged per program disclosure) | 625,000 | 912,500 | Consistent role scope as SVP→EVP transition pre-2024 . |
Performance Compensation
2024 Annual Incentive Plan (corporate scorecard applied to NEOs)
| Metric (Category) | Weight | Target Framework | Result/Payout |
|---|---|---|---|
| Free Cash Flow ($MM) (Financial) | 18% | Threshold/Target/Max calibrated to plan commodity price; aims for conservative budgeting and cost discipline | Included in 109% overall corporate achievement . |
| Cash Costs per BOE (Operational) | 26% | Efficiency metric to manage lifting/overhead costs per BOE | Included in 109% overall corporate achievement . |
| Drilling Capital Efficiency (P/I) (Operational) | 9% | Profitability Index at 10% discount; efficiency of capital deployment | Included in 109% overall corporate achievement . |
| All-in F&D ($/BOE) (Operational) | 10% | GAAP-based proving cost efficiency of reserve additions | Included in 109% overall corporate achievement . |
| Air (Diesel reduction in Egypt) (Sustainability) | 20% | Targeted diesel-to-gas power substitution projects | Contributed to 109% overall . |
| Safety (Severe Incident Rate) (Sustainability) | 6% | Achieve specified SIR target | Contributed to 109% overall . |
| Life-Saving Rules Inspections (Leadership participation) | 10% | >30% leadership participation | Contributed to 109% overall . |
| Return ≥60% of FCF to shareholders (Strategic) | 10% | Policy floor ≥60% | ~70% returned; above target . |
| Long-Term Outlook (Strategic) | 0% payout | Outside 3-year plan improvements | International headwinds limited full achievement . |
| Final Corporate Achievement | — | — | 109% (applied to Henderson; no individual modifier) . |
Long-Term Incentive Design and 2024 Grants
| Component | Weight | Metric Design and Payout Mechanics | Vesting |
|---|---|---|---|
| Performance Awards (CROIC) | 40% | 3-year CROIC vs WTI-price-adjusted targets; 0–200% payout; paid in cash . | 50% at end of Y3; 50% at end of Y4 . |
| Performance Awards (Relative TSR) | 40% | Ranked vs peer list and S&P 500 (S&P weighted twice); median rank pays 95%; capped at 100% if absolute TSR negative . | 50% at end of Y3; 50% at end of Y4 . |
| Performance Awards (Sustainability) | 20% | 3-year global methane intensity reduction vs 2021 baseline; paid in cash . | 50% at end of Y3; 50% at end of Y4 . |
| RSUs (time-based) | 40% of LTI value (mix) | Retention; aligns with share price | Ratable over 3 years . |
Henderson’s 2024 target LTI value: $2,187,500 (Performance Awards: $1,312,500; RSUs: $875,000) . For the completed 2022–2024 cycle, performance awards paid at 118% (CROIC outperformance; TSR 0%; sustainability achieved); 50% vested on Feb 5, 2025 and 50% will vest Jan 1, 2026 .
Equity Ownership & Alignment
Beneficial Ownership and Unvested Awards (as of Feb 28, 2025)
| Item | Amount |
|---|---|
| Total beneficial ownership (shares) | 38,297 (less than 1% of outstanding) . |
| Unvested RSUs excluded from ownership | 72,517 . |
| Stock options outstanding | None disclosed for Henderson . |
| Shares pledged | Prohibited for executive officers; company states compliance . |
| Hedging company stock | Prohibited for executive officers; company states compliance . |
| Executive stock ownership guidelines | Required multiples apply; plus a 15% after-tax hold of shares acquired via vesting/performance . |
Upcoming Vesting Schedule (selected outstanding awards at 12/31/2024)
| Grant Type | Units | Vesting Detail |
|---|---|---|
| Cash-settled RSUs | 2,987 | Vest 01/04/2025 . |
| Stock RSUs | 4,481 | Vest 01/04/2025 . |
| Cash-settled RSUs | 5,536 | Vest 50% 01/04/2025; 50% 01/04/2026 . |
| Stock RSUs | 8,303 | Vest 50% 01/04/2025; 50% 01/04/2026 . |
| Cash-settled RSUs (2024 grant) | 10,376 | Vest 02/01/2025, 01/08/2026, 01/08/2027 . |
| Stock RSUs (2024 grant) | 15,564 | Vest 02/01/2025, 01/08/2026, 01/08/2027 . |
| Stock RSUs | 10,000 | Vest 05/26/2025 and 05/26/2026 . |
Note: Many RSUs are cash-settled, reducing forced-share sale pressure upon vesting; stock-settled tranches create modest share delivery vs APA’s 361.7 million shares outstanding .
Employment Terms
| Topic | Key Terms |
|---|---|
| Employment contracts | APA does not utilize executive officer employment contracts . |
| Clawback policy | Dodd-Frank-compliant recoupment effective Oct 2, 2023 for incentive comp upon accounting restatement; prior policy applies pre-10/2/23 . |
| Severance (Executive Termination Policy – without cause) | For non-CEO NEOs: 1.75x base salary, prorated target bonus, 12 months COBRA subsidy at active rates, 3 years service credit toward retiree medical (benefits Henderson based on age/service), prorated vesting for RSUs/options, prorated performance awards (paid per standard vest schedule) . |
| Change-in-Control (double-trigger – Income Continuance Plan) | Lump sum = 12× monthly compensation (execs), plus 24 months monthly compensation, prorated bonus, two years of employer retirement contributions, 24 months medical/dental/vision/EAP at active rates (gross-up if applicable), continued life insurance; full equity acceleration at target for uncompleted performance cycles . |
Potential Payments (as of 12/31/2024; illustrative)
| Scenario | Cash Benefits ($) | Benefits/Insurance ($) | Equity Acceleration ($) | Total ($) |
|---|---|---|---|---|
| Termination without cause (ETP) | 1,718,750 | 18,182 (health) | 2,930,259 | 4,667,191 . |
| Change in control + qualifying termination (ICP) | 4,588,348 | 55,609 (health + life) | 4,536,541 | 9,180,498 . |
Compensation Structure Analysis
- Mix and risk: Henderson’s 2024 pay was largely at-risk via annual incentive (109% payout) and LTI (60% performance-based, 40% RSUs), with extended performance-vest over 4 years increasing retention and deferring realized pay .
- Metric emphasis: Annual plan balanced cash generation (FCF), cost efficiency (cash costs, F&D), and safety/sustainability; LTI leans on CROIC and relative TSR with TSR cap when absolute TSR is negative, promoting capital discipline and shareholder-aligned outcomes .
- Year-over-year changes: Reported “stock awards” were lower in 2024 vs 2023 partly because the CROIC portion of 2024 performance awards is cash-based and excluded from stock award accounting; total target LTI value for Henderson in 2024 was $2.19 million .
- Governance guardrails: No employment contracts, no option repricing, double-trigger CIC, hedging/pledging prohibited, robust clawback—mitigating shareholder risk .
Say-on-Pay & Peer Context
- Say-on-pay received ~70% support in the most recent vote; APA engaged holders representing 54% of shares and adjusted disclosures and peer composition (e.g., replaced Pioneer with Civitas for 2025) in response to feedback .
- Compensation peer group spans E&P companies with size/complexity screens (revenues 0.4x–4.0x APA, assets 0.8x–5.4x), blending larger and smaller peers to reflect talent market and portfolio scope .
Deferred Compensation and Perquisites (2024)
| Item | Amount ($) |
|---|---|
| Non-Qualified Plan – Executive contributions | 92,500 . |
| Non-Qualified Plan – Company contributions | 169,250 . |
| Non-Qualified Plan – Aggregate balance (year-end) | 708,985 . |
| Company contributions to retirement plans | 46,000 . |
| Company contributions to non-qualified plans | 169,250 . |
| Life insurance premiums | 9,967 . |
| Enhanced long-term disability | 13,169 . |
| All other compensation (total per SCT) | 238,636 . |
Investment Implications
- Alignment and retention: A high share of performance-based, multi-year pay tied to CROIC and relative TSR, with 4-year vesting and prohibited hedging/pledging, indicates strong alignment; cash-settled components reduce share overhang and selling pressure at vest .
- Execution signals: 2024 annual plan paid modestly above target (109%) on FCF, cost, and safety, and 2022–2024 LTI paid at 118% despite TSR underperformance—Henderson’s program rewards efficiency and disciplined capital allocation even through macro headwinds .
- Downside protection for shareholders: No executive employment contracts, a robust clawback, and double-trigger CIC terms limit governance risk; severance for Henderson is 1.75x base plus prorated bonus with prorated vesting—market standard without gross-up windfalls .
- Watch items: Say-on-pay at ~70% indicates ongoing investor scrutiny, particularly around goal-setting and TSR alignment; APA raised 2025 LTI emphasis on options/TSR, increasing sensitivity to stock performance going forward .
Sources: APA 2025 Proxy Statement (DEF 14A) dated April 10, 2025; specific citations provided inline.