Douglas Aron
ArchrockAbout Douglas Aron
Douglas S. Aron (51) is Senior Vice President and Chief Financial Officer of Archrock, Inc. (AROC) and has served as CFO since 2018. He previously served as EVP & CFO of HollyFrontier (2011–2017) and Frontier Oil (CFO in 2009; VP Corporate Finance 2005–2008; Director of IR 2001–2005), and EVP & CFO of Nine Energy Service in 2017. He holds a BA in Journalism from The University of Texas at Austin and an MBA from Rice University’s Jones Graduate School of Business . In 2024, Archrock delivered strong results: EPS up ~57% YoY, contract operations gross margin +500 bps to 67%, utilization >96% for a second year, Adjusted EBITDA used for incentives at ~$559M vs $518M target (179% payout basis), and Net Income $172M; cumulative TSR since 2019 reached 338 vs 212 for peer index .
Past Roles
| Organization | Role | Years | Strategic Context |
|---|---|---|---|
| Archrock, Inc. | SVP & Chief Financial Officer | 2018–Present | Natural gas compression services provider |
| Nine Energy Service, Inc. | EVP & Chief Financial Officer | 2017 | North America oilfield services company |
| HollyFrontier Corporation | EVP & Chief Financial Officer | 2011–2017 | Independent petroleum refiner and marketer |
| Frontier Oil Corporation | EVP & Chief Financial Officer | 2009 | Independent refiner; merged with Holly Corporation in 2011 |
| Frontier Oil Corporation | VP, Corporate Finance | 2005–2008 | Corporate finance leadership |
| Frontier Oil Corporation | Director of Investor Relations | 2001–2005 | Investor relations leadership |
Fixed Compensation
Multi-year Summary Compensation (Aron)
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 580,769 | 2,082,163 | 934,772 | 70,946 | 3,668,650 |
| 2023 | 538,462 | 1,925,922 | 823,846 | 55,600 | 3,343,830 |
| 2022 | 490,769 | 1,626,606 | 573,533 | 52,511 | 2,743,458 |
Notes: 2024 “All Other” includes 401(k) company contribution $18,975 and Deferred Compensation Plan company contribution $51,971 .
Performance Compensation
2024 Short-Term Incentive (STIP) Mechanics (Aron)
| Metric | Weighting | Target | Actual/Achievement | Payout Basis | Result |
|---|---|---|---|---|---|
| Adjusted EBITDA | 80% | $518M | $559M (excl. TOPS impact for plan) | 179% of target | Contributed to 178.8% total achievement |
| Sustainability: Environmental | 5% | Not disclosed | TRIR 0.17 (0.09 excl. TOPS) (companywide) | Incorporated in total result | Included in 178.8% |
| Sustainability: Safety (TRIR/PVIR) | 5% | Not disclosed | Company safety performance as above | Incorporated in total result | Included in 178.8% |
| Sustainability: Talent | 5% | Not disclosed | Employee retention metric included | Incorporated in total result | Included in 178.8% |
| Operating Unit Metrics | N/A for CFO | — | — | — | — |
STIP outcome and parameters:
| Item | Value |
|---|---|
| 2024 Eligible Earnings ($) | 580,769 |
| Target Bonus (% of Eligible Earnings) | 90% |
| Target Cash Incentive ($) | 522,692 |
| Company/Operating Unit Performance (%) | 178.8% |
| Individual Performance (%) | 100% |
| Performance Achievement (%) | 178.8% |
| Actual Payout ($) | 934,772 |
Design notes: Committee has discretion to adjust for exceptional, non-recurring items; 2024 plan excluded positive TOPS acquisition impact for payout calculation .
2024 Long-Term Incentive (LTI) Structure
| Award Type | 2024 LTI Mix | Performance Goal | Payout Range | Vesting/Term |
|---|---|---|---|---|
| Time-vested RS/RSU | 60% | Service-based | — | 1/3 per year over 3 years |
| CAD Performance Units | 10% | Cumulative Cash Available for Dividend | 0–200% | 3-year cliff; 2024–2026; cash-settled |
| Leverage Performance Units | 10% | Leverage reduction targets | 0–200% | 3-year cliff; 2024–2026; cash-settled |
| TSR Performance Units | 20% | Absolute and relative TSR vs 2024 peer group | 0–250% | 3-year cliff; 2024–2026; stock-settled |
2025 change: LTI shifts to 50% time-based / 50% performance-based following shareholder feedback (from prior 60/40), increasing performance linkage .
2024 Grants (Aron)
| Grant Date | Award | Target (#) | Max (#) | Grant Date FV ($) |
|---|---|---|---|---|
| 1/25/2024 | CAD Performance Units | 23,750 | 47,500 | 380,000 |
| 1/25/2024 | TSR Performance Units | 23,750 | 59,375 | 562,163 |
| 1/25/2024 | Restricted Stock/Units | 71,250 | — | 1,140,000 |
Vesting of time-based RS/RSU is ratable over three years; performance units cliff-vest after the 3-year performance period, subject to achievement and continued employment .
Equity Ownership & Alignment
- Beneficial ownership (March 3, 2025): 546,694 shares total; 427,256 owned directly; 119,438 restricted stock/units; <1% of shares outstanding .
- Stock ownership guidelines: 2x base salary for NEOs; must be met within five years; unearned performance units excluded; all NEOs in compliance as of proxy date; no open-market selling without committee consent until guideline met .
- Hedging and pledging: Prohibited for all employees and directors; NEOs/directors may not pledge or encumber shares; quarterly blackout guidelines apply .
- Options: None outstanding at 12/31/2024 .
- Outstanding equity at FY-end 2024 (market close $24.89 used by company for valuations):
- Unvested restricted stock: 179,107 shares; market value $4,457,973 .
- Unearned performance units (representative line items): 35,670; 36,092; 23,750; 35,671; 36,093; 23,750; with indicated market/payout values per line: $887,826; $898,330; $591,138; $887,851; $898,355; $591,138 .
- Time-vested RS/RSU initial vesting dates (unvested tranches): 35,671 (1/25/23); 72,186 (1/25/24); 71,250 (1/25/25) .
- 2024 equity vested/realized: 140,744 shares/units vested; value realized $2,495,152, including $86,668 dividend equivalents from 2021 performance units .
Nonqualified Deferred Compensation (2024):
| Item | Amount ($) |
|---|---|
| Executive Contributions | 47,946 |
| Company Contributions | 51,971 |
| Aggregate Earnings | 66,215 |
| Year-End Balance | 595,312 |
Perquisites: No NEO received aggregate perquisites/personal benefits >$10,000 in 2024 .
Employment Terms
Severance Benefit Agreements (one-year term; auto-renew): If terminated without Cause or resigns for Good Reason, lump-sum cash equals (i) base salary + target STIP, plus (ii) pro-rata target STIP for the year of termination, plus (iii) any earned but unpaid prior-year STIP; plus (iv) 12 months of employer COBRA-equivalent premiums and fee; accelerated vesting of the next scheduled tranche; performance units vest pro-rata at target depending on which plan year the termination occurs (1/3, 2/3, or target/actual in year 3). Subject to release; post-termination non-disparagement applies .
Change of Control (double trigger; 6 months before to 18 months after CoC): If Qualifying Termination, cash equals 2x (base + target STIP) for NEOs (3x for CEO), plus pro-rata STIP for termination year, plus any earned but unpaid prior-year STIP; plus 24 months of employer COBRA-equivalent premiums and fee and 2x company contributions to 401(k)/deferred comp; 280G “best-pay” cutback/no gross-ups; 2-year confidentiality, non-disclosure, non-solicit, non-compete post-termination .
Potential Payments (assuming event on 12/31/2024; stock at $24.89):
| Scenario | Cash Severance ($) | Restricted Stock Acceleration ($) | Performance Awards Acceleration ($) | Other Benefits ($) | Total Pre-Tax ($) |
|---|---|---|---|---|---|
| Death/Disability | — | 4,457,973 | 4,754,637 | — | 9,212,610 |
| Termination w/o Cause or Good Reason | 1,652,000 | 2,377,343 | 3,367,559 | 18,831 | 7,415,733 |
| CoC without Qualifying Termination | — | — | — | — | — |
| CoC with Qualifying Termination | 2,773,000 | 4,457,973 | 4,754,637 | 161,265 | 12,146,876 |
Clawback Policy: Effective Oct 2, 2023 (NYSE-compliant); covers incentive-based compensation received in the three completed fiscal years prior to a required accounting restatement; recovery methods include reimbursement, offsets, and cancellation; all Officers (including Aron) acknowledge compliance .
Pay Versus Performance (Company context)
| Year | Company TSR (Value of $100) | Peer Group TSR (AMNAX) | Net Income ($MM) | Adjusted EBITDA ($MM) |
|---|---|---|---|---|
| 2020 | 94 | 77 | (68) | 415 |
| 2021 | 87 | 106 | 28 | 326 |
| 2022 | 112 | 129 | 44 | 363 |
| 2023 | 202 | 147 | 105 | 450 |
| 2024 | 338 | 212 | 172 | 595 |
Committee identified Adjusted EBITDA as the most important financial performance measure linking pay and performance for 2024 . Say-on-Pay support at 2024 Annual Meeting was 88% (below five-year average >95%); 2025 LTI mix was refined to increase performance-based equity .
Investment Implications
- Pay-for-performance alignment: Aron’s 2024 STIP was highly leveraged to Adjusted EBITDA (80% weight), with payout at 178.8% on strong operating results; 2025 shift to a 50/50 time/performance LTI mix increases long-term performance sensitivity and accountability .
- Retention and selling pressure: Significant unvested RS/RSU (179,107 shares) and multiple active performance-unit cycles create retention hooks; hedging/pledging are prohibited and ownership guidelines (2x salary) are in force, reducing risk of leveraged share sales; Aron realized ~$2.5M from 2024 vesting events, but broader selling is constrained by policy and blackout rules .
- Change-in-control and severance economics: Double-trigger CoC with 2x cash multiple and full equity acceleration produces a ~$12.1M package at 12/31/24 marks; outside CoC, severance and partial acceleration run ~$7.4M—meaningful but standard for midstream peers; no 280G gross-ups (shareholder-friendly) .
- Governance signals: Robust clawback, prohibition on hedging/pledging, and responsiveness to shareholder feedback (LTI mix) point to improving alignment; 88% say-on-pay remains supportive, though below historical average, suggesting continued investor focus on metric rigor and equity mix .
Overall, Aron's incentives are tightly aligned to cash generation, leverage reduction, and TSR through a mix of EBITDA-weighted STIP and multi-factor performance units; substantial unvested equity supports retention, while policy constraints mitigate near-term insider selling risk .