Robert J. Sprowls
AMERICAN STATES WATERAbout Robert J. Sprowls
Robert J. Sprowls (age 67) has served as President and CEO of American States Water Company (AWR) since January 2009 and as a director since 2009; he previously served more than four years as AWR’s CFO. He holds a BA in economics and business administration (Knox College) and an MBA in accounting and finance (Bradley University); he is a CPA (inactive) and CMA, with 40+ years of utility leadership and finance experience, including 21 years at CILCORP and Central Illinois Light Company prior to 2003 . Pay-versus-performance: 2024 CAP to the CEO was $5.04M versus SCT total of $4.91M; AWR’s 2024 TSR value of $100 was 98.24 and peer TSR 101.00; 2024 net income was $119.3M and adjusted EPS $3.08 . Over 2022–2024, CEO “realizable pay” ranked at the 61st percentile while TSR ranked at the 31st percentile versus peers, indicating potential pay-performance tension for that period .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American States Water Company | President & CEO | 2009–present | Led regulated and contracted services businesses (GSWC, ASUS); long-term incentives tied to TSR, operating expense control, and ASUS earnings . |
| American States Water Company | CFO | Pre-2009 (4+ years) | Oversaw corporate finance prior to CEO tenure, bringing deep accounting/finance expertise to a regulated utility platform . |
| Golden State Water Company; American States Utility Services, Inc. | President & CEO | 2009–present | Direct leadership of water utility and military base privatization subsidiaries . |
| CILCORP Inc./Central Illinois Light Company | Various senior roles (President, Business Unit Leader – Energy Delivery; CFO & Treasurer of CILCO; VP & Treasurer of CILCORP; CFO of QST Enterprises) | 21 years; left 2003 | End-to-end utility operations and finance leadership in electric and gas utilities; experience through sale to Ameren in 2003 . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| National Association of Water Companies (NAWC) | Director (current); prior President and Executive Committee member | Not disclosed | Industry policy leadership and advocacy for private water utilities; network and regulatory insight . |
| CILCORP Inc.; Central Illinois Light Company | Director (prior) | Not disclosed | Governance of utility holding company and operating subsidiary . |
| Multiple civic/non-profit organizations (e.g., Southern California Leadership Council; Illinois Energy Association; Goodwill Industries of Central Illinois) | Board/Chair roles (prior) | Not disclosed | Community and industry engagement; leadership experience beyond corporate mandate . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus % of Salary | Discretionary Bonus ($) | Notes |
|---|---|---|---|---|
| 2024 | 949,519 | 100.00% | 310,000 | CEO target bonus 100% of salary; discretionary component within STIP design . |
| 2023 | 924,519 | — | 300,000 | Target % not disclosed in proxy for 2023. |
| 2022 | 899,231 | — | 288,000 | Target % not disclosed in proxy for 2022. |
Performance Compensation
Short-Term Incentive Plan (STIP) – CEO
- Plan design and weighting (CEO): 60% profitability and capital expenditures; 20% customer complaints, supplier diversity and compliance; 20% individual performance .
- 2024 STIP potential range and outcome:
- Threshold $356,250; Target $760,000; Max $1,140,000 .
- Objective performance payout (NEIP) earned: $880,650; Discretionary bonus: $310,000; Actual total bonus equated to 125.33% of base salary .
| Metric (2024) | Weight | Target/Range | Actual/Payout | Vesting/Payment Timing |
|---|---|---|---|---|
| Profitability & Capex | 60% | Included in STIP objective goals (range: $356,250–$1,140,000 potential) | Reflected within $880,650 NEIP earned; total bonus 125.33% of base | Annual cash following year-end . |
| Customer complaints, supplier diversity, compliance | 20% | As defined by plan | Included in NEIP payout; total bonus as above | Annual cash . |
| Individual performance | 20% | Discretionary component | $310,000 discretionary portion | Annual cash . |
Long-Term Incentives (Equity)
- 2024 CEO equity mix: Target LTI value PSUs $1,387,500 (75%); RSUs $462,500 (25%); total $1,850,000 .
- 2024 grants (3/13/2024):
- RSUs: 6,425 units; grant-date fair value $468,061; vest 33%/33%/34% annually; dividend equivalents accrue and pay only if vested .
- PSUs: threshold 8,605; target 19,275; max 32,768; grant-date fair value $1,450,109; 3-year performance period with 33/33/34 vesting subject to performance .
- 2024 PSU metrics (CEO): TSR relative to water utility peers 25%; GSWC water segment aggregate operating expense level 60%; ASUS cumulative net earnings 15% .
- No stock options have been granted in the past three years; no repricing permitted .
| LTI Component (2024) | Metric | Weight | Target/Range | Status | Vesting |
|---|---|---|---|---|---|
| PSUs | Relative TSR vs water utilities | 25% | Target 19,275 units; 3-year performance; 0.0x–1.7x scale implied by threshold/max | In progress (2024–2026) | 33%/33%/34% subject to performance . |
| PSUs | GSWC operating expense (aggregate) | 60% | As defined in award; same target shares | In progress | As above . |
| PSUs | ASUS cumulative net earnings | 15% | As defined in award; same target shares | In progress | As above . |
| RSUs | Service-based | — | 6,425 units; time-based | Outstanding | 33%/33%/34% over 3 years; dividend equivalents . |
Equity Ownership & Alignment
- Beneficial ownership: 187,793 AWR shares as of March 28, 2025; less than 1% of shares outstanding .
- Unvested/vested awards at 12/31/2024:
- PSUs/Equity incentive awards unearned: 56,497 units; market/payout value $4,390,947 at $77.72/share .
- RSUs vested per Rule of 75 but unpaid: 10,970 units; market value $852,588 at $77.72/share .
- 2025 post-vesting distributions from 2024 fully vested awards (illustrative timing/sizes):
- 2,891 shares on Feb 7, 2025 (value $215,542 at $73.53); 19,150 shares on Mar 14, 2025 (value $1,493,928 at $78.01); additional rights to acquire 1,554 within 30 days of Feb 6, 2026; 2,169 within 30 days of Mar 12, 2026; 2,235 within 30 days of Mar 12, 2027, plus dividend equivalents .
- Ownership guidelines: increased to 5.0x base salary for CEO in 2024; CEO met the guideline in 2024 .
- Anti-hedging/anti-pledging: hedging prohibited; pledging generally prohibited without pre-approval; officers and directors represented no pledging since policy adoption .
- Options: all options have been exercised as of 12/31/2024 (no outstanding options) .
| Ownership/Policy | Detail |
|---|---|
| Shares beneficially owned | 187,793; <1% of class . |
| Unvested equity (12/31/24) | PSUs unearned 56,497 ($4,390,947 at $77.72); RSUs vested via Rule of 75 but unpaid 10,970 ($852,588) . |
| Upcoming share deliveries | 2,891 on 2/7/25 ($215,542); 19,150 on 3/14/25 ($1,493,928); future delivery rights in 2026–2027 as noted . |
| Ownership guideline | 5x salary (CEO); in compliance . |
| Hedging/Pledging | Prohibited; no pledges reported since policy adoption . |
Implication: Rule-of-75 vesting plus scheduled share deliveries into 2025–2027 could create periodic supply, though policy requires guideline compliance and prohibits pledging/hedging .
Employment Terms
- No employment agreements; no guaranteed bonuses; no tax gross-ups; no “single-trigger” cash severance .
- Change-in-control (CIC) agreements: double-trigger; good-reason definitions include material diminution of role/comp, relocation >35 miles, or failure of successor to assume agreement .
- CIC cash severance: 2.99x the sum of highest annual base salary in last 3 years plus target cash incentive for year of termination; welfare benefits continuation for 3 years; excise tax cutback if beneficial .
- Equity upon CIC termination: RSUs and PSUs vest; PSUs assume target performance for vesting; dividend equivalents included .
- Non-compete and non-solicit: one-year post-termination covenants; additional pension/SERP top-up installments contingent on compliance (not applicable to all officers) .
- Clawback: recovery of cash and equity incentives upon an accounting restatement, per NYSE rules .
| Scenario (as of 12/31/2024; assumed payout July 2025) | Estimated CEO Benefits ($) |
|---|---|
| Change in Control – Total | 9,244,297 (salary+bonus multiples; welfare; RSU/PSU acceleration; auto purchase) . |
| RSU acceleration value (CIC) | 852,588 (at $77.72) . |
| PSU acceleration value (CIC) | 2,582,861 (at $77.72; 2023–2024 grants) . |
| Non-CIC termination/death/disability – Total | Termination: $3,460,674; Disability: $3,460,674; Death: $4,935,449 (incl. exec life insurance, RSUs/PSUs) . |
Board Governance (Director Service, Committees, Attendance, Dual-Role Implications)
- Director since 2009; sole management director; serves on the ASUS Committee; not independent .
- Board leadership: independent, non-executive Chair (ex-officio to all committees); CEO is not Chair; board held executive sessions (including non-management) five times in 2024 .
- Independence: all directors other than the CEO were independent in 2024; independent leadership structure in place since 1998 .
- Attendance: the Board held six meetings in 2024; 100% attendance by all directors and standing committee members .
- Director pay: employee directors receive no additional compensation for board service; only non-employee directors receive retainers/RSUs .
Dual-role implications: CEO is also a director, but independence is preserved via an independent Chair, independent committee chairs, and non-management executive sessions, mitigating CEO/Chair concentration risk .
Director Compensation (Context for Dual Roles)
| Item | 2024 Practice |
|---|---|
| Employee director (CEO) board pay | $0 (no additional compensation) . |
| Non-employee director retainer | $125,000; Chair +$100,000; committee chair/member retainers as specified . |
| Director equity | RSUs; vested 90 days post-grant; dividend equivalents until vest . |
Compensation Structure Analysis (Signals)
- 75% of CEO target total direct compensation is at risk; 75% of CEO LTI is performance-based PSUs with 3-year goals; STIP metrics diversified and capped per-metric exposure (≤20%) .
- No options granted in the last three years; no option repricing; emphasis on RSUs/PSUs aligns with regulated utility risk profile but reduces leverage versus options .
- Ownership guideline raised to 5x salary (from 3x) for CEO, indicating stronger alignment expectations; CEO in compliance .
- Historical discipline: no NEO achieved maximum payout on STIP or performance stock plan over the past five years, suggesting rigorous goal-setting .
- Pay-for-performance watchpoint: 2022–2024 period shows pay rank (61st percentile) above TSR rank (31st), a potential misalignment to monitor despite strong 2024 say-on-pay support (~95%) .
Compensation Peer Group and Say-on-Pay
- Peer methodology: Compensation Committee annually assesses peer group with independent consultant (Pearl Meyer) focused on utility peers; target pay assessed versus market data; 2024 actual aggregate total direct compensation for NEOs was below market median .
- Performance peer group for TSR includes seven water utilities (AWK, ARTNA, CWT, WTRG, MSEX, SJW, YORW) .
- Say-on-pay approval: ~95% support in 2024; no significant shareholder feedback indicating dissatisfaction; no major program changes .
Equity Grant and Vesting Details (2024 CEO)
| Grant Type | Grant Date | Shares/Units | Grant-Date FV ($) | Vesting | Performance Criteria |
|---|---|---|---|---|---|
| RSU | 3/13/2024 | 6,425 | 468,061 | 33%/33%/34% over 3 years; dividend equivalents | N/A |
| PSU (threshold/target/max) | 3/13/2024 | 8,605 / 19,275 / 32,768 | 1,450,109 | 3-year performance; 33%/33%/34% vest upon certification | 25% TSR; 60% GSWC OpEx; 15% ASUS Cumulative Net Earnings |
Performance & Track Record (Select Disclosures)
| Year | CEO SCT Total ($) | CEO CAP ($) | AWR TSR (Value of $100) | Peer TSR (Value of $100) | Net Income ($M) | Adjusted EPS |
|---|---|---|---|---|---|---|
| 2024 | 4,908,976 | 5,038,754 | 98.24 | 101.00 | 119.3 | 3.08 |
| 2023 | 5,324,271 | 4,154,877 | 99.48 | 105.92 | 124.9 | 3.29 |
| 2022 | 3,483,194 | 3,896,729 | 112.32 | 123.66 | 78.4 | 2.23 |
| 2021 | 4,542,428 | 5,214,978 | 123.32 | 144.50 | 94.3 | 2.48 |
| 2020 | 5,926,137 | 3,048,843 | 93.25 | 117.02 | 86.4 | 2.30 |
Employment Contracts, Severance, and Change-in-Control Economics
| Provision | Detail |
|---|---|
| Employment agreements | None; no guaranteed bonuses; no tax gross-ups; no single-trigger cash severance . |
| CIC cash severance | 2.99x (highest of last 3 years base salary + target bonus for year of termination) . |
| Good reason/without cause | Material diminution, compensation reduction, >35-mile relocation, or failure of successor to assume; 20-day cure period; applies within 2 years post-CIC . |
| Equity on CIC termination | RSUs and PSUs vest (PSUs at target); dividend equivalents included . |
| Welfare benefits | Continued coverage for 3 years (CEO) . |
| Non-compete / Non-solicit | One year (top-up pension/SERP payments contingent on compliance) . |
| Clawback | Incentive recoupment upon restatement, per NYSE rules . |
Risk Indicators & Red Flags
- Hedging and pledging prohibited; officers/directors reported no pledging since adoption (reduces misalignment/forced-sale risk) .
- No option repricing or discounted options; no options granted in last three years (limits asymmetric windfalls) .
- Double-trigger CIC required; no single-trigger cash severance or equity vesting solely on CIC (improves alignment) .
- Pay-performance watchpoint: 2022–2024 pay rank > performance rank (monitor future alignment and committee rigor) .
- Say-on-pay strong support (~95%) mitigates near-term shareholder pushback risk .
Equity Ownership & Vesting Schedules (Detailed)
| Item | Amount/Date | Valuation/Notes |
|---|---|---|
| RSUs vested via Rule of 75 (unpaid as of 12/31/24) | 10,970 | $852,588 at $77.72/share . |
| PSUs unearned outstanding (12/31/24) | 56,497 | $4,390,947 at $77.72/share . |
| 2/9/2024 payout from 2024 vesting | 4,310 shares | $323,702 at $75.11/share . |
| 2/7/2025 payout | 2,891 shares | $215,542 at $73.53/share . |
| 3/14/2025 payout | 19,150 shares (incl. 140 dividend-equivalent shares) | $1,493,928 at $78.01/share . |
| Future delivery rights | 1,554 (by 2/6/2026); 2,169 (by 3/12/2026); 2,235 (by 3/12/2027) | Plus dividend-equivalent shares through payout dates . |
Board Service History, Committee Roles, Independence
- Director since 2009; ASUS Committee member; only management director; not independent .
- Independent Chair leads executive sessions; CEO participates in executive sessions but not non-management sessions; 5 executive sessions in 2024 .
- 100% attendance at board and committee meetings in 2024 .
- Employee director compensation: $0 for board service; non-employee directors compensated via retainers and RSUs .
Investment Implications
- Alignment: CEO holds 187,793 shares, meets elevated 5x salary ownership guideline, and is subject to anti-hedging/anti-pledging and clawback policies—supportive of alignment with long-term shareholders .
- Vesting/supply dynamics: Significant RSU tranches vested via Rule of 75 with scheduled payouts through 2027 (notably large deliveries in early 2025) could create periodic share supply, though ownership guidelines and prohibition on pledging reduce forced selling risk .
- Pay-for-performance: Committee emphasizes rigor (no max payouts in last five years) and heavy PSU mix, yet 2022–2024 pay rank exceeded TSR rank; continue monitoring TSR versus PSU outcomes (TSR/OpEx/ASUS earnings) to assess future realized pay alignment .
- Retention/CIC risk: Robust double-trigger CIC at 2.99x plus 3-year benefits and equity acceleration is standard for utilities; one-year non-compete/non-solicit and absence of employment agreements balance retention with governance discipline .
- Governance: Independent Chair, fully independent committees, and strong say-on-pay (~95%) lower governance overhang; CEO also serves as director but not Chair, mitigating dual-role concerns .