Eric Thode
ArchrockAbout Eric Thode
Eric W. Thode (age 59) is Senior Vice President, Operations at Archrock, serving in this role since 2020 after becoming Vice President, Operations in October 2018; he holds a BS in Economics and an MPA from Texas A&M University . During the 2024 performance year, Archrock increased EPS ~57% year over year, maintained record fleet utilization >96%, and expanded contract operations gross margin to 67%, while Adjusted EBITDA reached $595 million versus $450 million in 2023 and $363 million in 2022; cumulative TSR value of a $100 investment reached $338 in 2024 versus $202 in 2023 and $112 in 2022, reflecting strong value creation during his tenure in operations leadership . Thode’s 2024 annual incentive paid at 178.1% of target based on Company/Operating Unit and individual performance, consistent with Archrock’s pay-for-performance framework .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Archrock Services L.P. (South Texas BU) | Business Unit Director; later Vice President, Operations | 2014–2018; VP from Oct 2018 | Led operations for South Texas; promoted to VP Operations supporting enterprise operations . |
| Archrock (Barnett BU) | Director, Barnett Business Unit | 2012–2014 | Directed Barnett unit operations . |
| EESLP and UCI (predecessors) | Director, Business Development | 2004–2012 | Negotiated alliance contracts generating >$100 million annual revenue . |
| Enron Corporation | Director, Public Relations | 1999–2004 | Corporate communications leadership . |
| TEPPCO Partners | Manager, Government & Public Affairs | 1991–1999 | External affairs and regulatory engagement . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $371,538 | $413,462 | $448,077 |
| Stock Awards ($) | $704,848 | $849,651 | $1,041,081 |
| Non-Equity Incentive ($) | $398,602 | $514,011 | $598,554 |
| All Other Compensation ($) | $38,765 | $40,603 | $52,915 |
| Total ($) | $1,513,753 | $1,817,727 | $2,140,627 |
| Base Salary Progression | 2023 Annualized Base | 2024 Annualized Base | % Increase |
|---|---|---|---|
| Thode | $425,000 | $455,000 | 7.1% |
| Deferred Compensation (2024) | Executive Contributions | Company Contributions | Aggregate Earnings/(Losses) | Aggregate Balance (12/31/24) |
|---|---|---|---|---|
| Thode | $48,104 | $33,940 | $28,509 | $291,889 |
Notes:
- Perquisites were below the $10,000 disclosure threshold for all NEOs in 2024 .
- Archrock maintains standard health and welfare plans; NEOs participate on the same terms as other employees .
Performance Compensation
| Annual Cash Incentive (2024) | Target ($) | Company/Operating Unit Performance (%) | Individual Performance (%) | Achievement (%) | Payout ($) |
|---|---|---|---|---|---|
| Thode | $336,058 | 178.1% | 100% | 178.1% | $598,554 |
| Operating Unit Criteria (Thode – 2024) | Weighting (%) | Target | Actual | Payout Treatment |
|---|---|---|---|---|
| Total Downtime Events/Unit/Month | 35 | Not disclosed | Achievement contributed to 178.1% combined OU factor | Included in 178.1% Company/OU attainment |
| Service Availability | 35 | Not disclosed | See above | See above |
| Aftermarket Services Gross Margin | 30 | Not disclosed | See above | See above |
| 2024 Long-Term Incentive (Grant Date 1/25/2024) | Mix | Quantity | Grant Date Fair Value ($) |
|---|---|---|---|
| Restricted Stock (time-vested, 1/3 per year over 3 years) | 60% of LTI mix | 35,625 shares | $570,000 |
| CAD Performance Units (cash-settled) | 10% of LTI mix | 5,938 units | $190,000 |
| Leverage Performance Units (cash-settled) | 10% of LTI mix | 5,937 units | $281,081 |
| TSR Performance Units (share-settled) | 20% of LTI mix | 11,875 units | Included at target in Stock Awards |
| LTI Performance Metrics (2024–2026 Performance Period) | Threshold | Target | Maximum | Vesting |
|---|---|---|---|---|
| Cumulative CAD (Adjusted EBITDA – maint./other capex – cash taxes – cash interest) | $780M | $975M | $1,170M | 3-year cliff, vests 1/25/2027 |
| Leverage (Total debt / EBITDA, most recent LTM) | 3.75x | 3.25x | ≤2.75x | 3-year cliff, vests 1/25/2027 |
| TSR Units (absolute TSR and relative rank vs 2024 Performance Peer Group) | Matrix-based payouts (0%–250%) | Matrix-based payouts | Matrix-based payouts | 3-year cliff, vests 1/25/2027 |
Additional notes:
- 2022 TSR Performance Units paid at 200% of target based on peer-leading rank at period-end (January 1, 2022–December 31, 2024) .
- Stock vested in 2024 for Thode: 69,004 shares/units; value realized $1,236,736 including $47,270 in dividend equivalents on 2021 performance units .
Equity Ownership & Alignment
| Beneficial Ownership (as of 3/3/2025) | Direct Shares | Restricted Stock & Units | Indirect Ownership | Total | % of Class |
|---|---|---|---|---|---|
| Eric W. Thode | 157,214 | 58,846 | 239 (disclaimed) | 216,299 | * (<1%) |
| Outstanding Equity at FY End (12/31/2024) | Unvested Restricted Stock (#) | Market Value ($) | Unearned Performance Units (#) | Market/Payout Value ($) |
|---|---|---|---|---|
| Thode | 82,928 | $2,064,078 | 15,456 (2022 CAD/Leverage) | $384,700 |
| 15,922 (2023 CAD/Leverage) | $396,299 | |||
| 11,875 (2024 CAD/Leverage) | $295,569 | |||
| 15,457 (2022 TSR) | $384,725 | |||
| 15,923 (2023 TSR) | $396,323 | |||
| 11,875 (2024 TSR) | $295,569 |
| Vesting Schedule References | Initial Vesting Date |
|---|---|
| Restricted stock vests one-third annually; Thode tranches: 15,457 (1/25/2023), 31,846 (1/25/2024), 35,625 (1/25/2025) . | |
| 2022 CAD/Leverage and TSR units cliff vested on 1/25/2025; 2023 units vest 1/25/2026; 2024 units vest 1/25/2027 (subject to performance) . |
Alignment safeguards:
- Stock ownership guidelines: CEO 5x base salary; other NEOs 2x base salary within five years—All NEOs in compliance at proxy date .
- Hedging and pledging of Company securities prohibited for employees and directors .
- No stock options outstanding at 12/31/2024 .
Employment Terms
- Employment letters set initial title, reporting, and compensation eligibility; annual review by Compensation Committee .
- Severance Benefit Agreement: One-year term auto-renewing; if terminated without Cause or resigns for Good Reason, lump-sum cash equals base salary + target STI, pro‑rated STI for the year, earned but unpaid prior-year STI, plus 12 months COBRA premiums and admin fee; partial acceleration of unvested awards as specified by performance period timing .
- Change of Control Agreement: Double-trigger; if Qualifying Termination within 6 months before or 18 months after CoC, cash equals 2x base salary + 2x target STI (3x for CEO), pro‑rated STI for termination year, earned but unpaid prior-year STI; plus accelerated vesting of all unvested LTI awards; “best pay” 280G cutback, no tax gross-ups; post-termination non-compete, non-solicit, confidentiality restrictions for two years apply .
| Potential Payments (as of 12/31/2024 assumptions) | Termination Without Cause or Good Reason | Change of Control with Qualifying Termination |
|---|---|---|
| Cash Severance (Thode) | $1,137,500 | $1,933,750 |
| Restricted Stock (accelerated vesting value) | $1,076,617 | $2,064,078 |
| Performance Awards (accelerated vesting value) | $1,494,885 | $2,153,184 |
| Other Benefits (COBRA, 401(k)/Deferred Plan contributions) | $26,048 | $193,988 |
| Total Pre-Tax Benefit (Thode) | $3,735,050 | $6,345,000 |
Governance protections:
- Clawback policy (effective Oct 2, 2023) requires recovery of erroneously awarded incentive compensation over prior three fiscal years if a restatement is needed; applies to Officers including Thode .
- Administrative correction: Late Form 4s for 2021 TSR vesting were subsequently filed for NEOs; all other Section 16(a) filings believed timely in 2024 .
Investment Implications
- High alignment and at-risk pay: For NEOs, ~76% of 2024 target total direct compensation is variable, with Thode’s annual incentive tied to Company and operations metrics and his LTI split across time-vested stock (retention) and performance units (CAD, leverage, TSR) over a three-year horizon .
- Clear performance levers: 2024–2026 LTI metrics directly incentivize free cash flow generation (CAD), deleveraging (3.25x target), and absolute/relative TSR—key drivers of valuation and balance sheet quality .
- Retention risk appears contained: Significant unvested restricted stock and multi-year performance units with cliff vesting dates in 2026–2027 create strong retention hooks; double-trigger CoC and no hedging/pledging policies further reduce misalignment risk .
- Potential selling pressure windows: Material vesting events on January 25 each year (2025–2027) could add supply from vesting and associated tax withholding; 2024 realized value from vesting was $1.24 million for Thode, indicating meaningful equity flows around these dates .
- Severance economics are standard: No tax gross-ups, “best pay” cutback, and 2x salary+bonus (3x for CEO) under CoC are typical midstream/oilfield services constructs; auto-renew severance agreements and defined non-compete terms balance retention and governance .
Overall, Thode’s incentive package tightly aligns with operational excellence, cash generation and leverage reduction—areas where Archrock reported strong recent performance—while governance policies (clawback, no pledging/hedging, double-trigger CoC) mitigate red flags for investors .