Linden Evans
BLACK HILLS CORP /SD/About Linden Evans
Linden R. “Linn” Evans, age 62, is President and Chief Executive Officer of Black Hills Corporation (BKH) and a Class III director since 2018; he has served as CEO since January 1, 2019 after prior roles as President & COO and President & COO – Utilities, and began his BKH career as corporate counsel in 2001 . Evans holds a B.S. in Mining Engineering (University of Missouri–Rolla) and a J.D. (Lewis & Clark College) with early career experience as a mining engineer and attorney focused on environmental and corporate matters . Operational performance under his leadership included 2024 EPS of $3.91 (above guidance midpoint), a 54th consecutive annual dividend increase, and regulatory/financing execution, while long-term incentive payout for the 2022–2024 PSU cycle was 10.322%—reflecting negative rTSR and below-target EPS—signaling mixed multi-year shareholder value creation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Black Hills Corporation | Associate/Corporate Counsel | 2001–2003 | Legal, environmental and corporate counsel; foundation for subsequent operating leadership |
| Black Hills Corp. Telecom Subsidiary | Vice President & General Manager | 2003–2004 | P&L and operational leadership in technology/telecom segment |
| Black Hills Corporation | President & COO – Utilities | 2004–2015 | Led electric and natural gas utilities, power generation and coal; operational scaling |
| Black Hills Corporation | President & COO | 2016–2018 | Expanded scope across all business segments; integration of SourceGas assets |
| Black Hills Corporation | President & CEO; Director (Class III) | 2019–present | Strategic and regulatory execution; capital deployment; CEO/director dual role |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No other U.S. public company directorships disclosed |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | 900,000 | 950,000 |
| Target Short-Term Incentive (% of Salary) | 100% | 100% |
| Target Short-Term Incentive ($) | 900,000 | 950,000 |
| Target Long-Term Incentive ($) | 2,700,000 | 2,900,000 |
Performance Compensation
Short-Term Incentive (STI) – 2024 Design and Outcome
| Metric | Weight | Threshold | Target | Max | 2024 Actual | Payout % of Target | Weighted Payout % |
|---|---|---|---|---|---|---|---|
| EPS from ongoing ops (as adjusted) | 70.00% | $3.66 | $3.94 | $4.22 | $3.91 | 94.64% | 66.25% |
| Timeliness of Incident Reporting | 2.50% | 90% | 92% | 94% | 91.46% | 86.50% | 2.16% |
| Avg Proactive Safety Activities/Employee | 2.50% | 3 | 5 | 7 | 6.03 | 151.50% | 3.79% |
| DART | 2.50% | 0.85 | 0.70 | 0.55 | 1.00 | 0.00% | 0.00% |
| Gas Distribution Damage (HPT) | 3.75% | 2.00 | 1.85 | 1.75 | 2.16 | 0.00% | 0.00% |
| Electric Reliability (SAIDI) | 3.75% | 72.9 | 64.2 | 49.1 | 72.3 | 53.39% | 2.00% |
| Customer Satisfaction | 3.75% | 4.00 | 4.25 | 4.50 | 4.51 | 200.00% | 7.50% |
| Customer Effort | 3.75% | 4.00 | 4.25 | 4.50 | 4.53 | 200.00% | 7.50% |
| Diverse Candidate Slates | 7.50% | 57% | 62% | 67% | 89.33% | 200.00% | 15.00% |
| Total STI Payout | — | — | — | — | — | — | 104.20% |
Evans’ Non-Equity Incentive Plan payout for 2024 was $1,019,958, paid Feb 28, 2025 .
Long-Term Incentive (LTI) Structure and Results
| Plan | Component | Weight | Definition | Outcome |
|---|---|---|---|---|
| 2022–2024 PSU | rTSR | 60% | Relative TSR vs peer group | rTSR −0.83%; 0% payout on this component |
| 2022–2024 PSU | Avg EPS (as adjusted) | 20% | Diluted EPS adjusted | $3.938 vs $4.287 target; 0% payout for this component |
| 2022–2024 PSU | Avg Cost to Serve | 20% | Non-fuel O&M/Utility margin | 51.61% of goal; 10.322% payout of total plan |
| 2023–2025, 2024–2026 PSU | rTSR | 70% | Relative TSR; capped at 100% if TSR negative | In flight; goals undisclosed |
| 2023–2025, 2024–2026 PSU | Avg EPS (as adjusted) | 10% | As above | In flight |
| 2023–2025, 2024–2026 PSU | Avg Cost to Serve | 10% | As above | In flight |
| 2024–2026 PSU | Emissions Reduction | 10% | Natural gas emissions reduction by 2035 | In flight |
| 2025–2027 PSU | rTSR | 40% | Weight reduced to improve line-of-sight | Adopted for retention/line-of-sight |
| 2025–2027 PSU | Avg EPS (as adjusted) | 20% | Increased weighting vs prior cycles | Adopted |
| 2025–2027 PSU | Avg Cost per Customer | 20% | Non-fuel O&M per customer | Replaces cost-to-serve |
| 2025–2027 PSU | Emissions Reduction | 20% | As above | Adopted |
| Time-based RSUs | RSUs | 30%→40% | Vest 1/3 annually; retention focus | RSU weight increased to 40% |
Grant specifics (2024): PSUs target 39,181; threshold 9,795; max 78,362 (grant date Jan 25, 2024; PSU FV $54.14). RS grant 17,031 shares at $51.62 on Feb 9, 2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 161,195 shares; includes 34,814 restricted shares with voting but not investment power; constitutes less than 1% of outstanding |
| Unvested Restricted Stock (12/31/2024) | 29,229 shares; market value $1,710,481 |
| Unearned PSUs (12/31/2024) | 72,234 shares; payout value at target $4,227,134 |
| Upcoming Vesting Dates | RS tranches vest 2/9/25, 2/9/26, 2/9/27; PSUs with determination dates 1/23/25, 1/22/26, 1/28/27 |
| Stock Ownership Guidelines | CEO 6× base salary; 100% retention until achieving guideline; sale restricted unless >110% of guideline achieved |
| Guideline Compliance | With the exception of Evans, other NEOs have not yet satisfied guidelines—implying Evans has satisfied |
| Hedging/Pledging | Prohibited: no hedging, no pledging or margin accounts |
Employment Terms
| Provision | Terms |
|---|---|
| Employment Agreement | None for executives; compensation driven by Board/Committee programs |
| Change-in-Control Agreement | Double trigger for equity acceleration (effective from 2022 forms); expires Nov 15, 2025 |
| CIC Severance Multiples | Evans up to 2.99× average compensation; other NEOs up to 2.0×; no excise tax gross-ups |
| CIC Termination Economics (Evans) | Cash severance $5,681,000; incremental retirement $1,995,000; medical/welfare continuation PV $79,600; equity acceleration $2,681,827; total $10,437,427 (as if terminated 12/31/2024) |
| Non-Compete / Non-Solicit (CIC) | 1-year non-compete; 2-year non-solicit and non-disparagement required in release |
| Clawbacks | Mandatory compensation recovery for material restatements; supplemental policy for willful conduct causing significant financial/reputational harm |
Compensation Structure Analysis
- Mix shift: Evans’ base salary rose 6% in 2024 (to $950k) and LTI target increased to $2.9M, maintaining high equity at-risk orientation .
- LTI design changes for 2025–2027 reduce rTSR weight to 40% and increase RSU/time-based awards to 40%, emphasizing retention and line-of-sight amid business uncertainty .
- Peer benchmarking uses a 19-company utility/energy peer set around revenue median $2.7B, aligning to BKH’s 2024 revenue scale .
Director and Board Governance
- Board Service: Evans is a Class III director (term expiring 2027); no standing committee roles; not independent (officer status) .
- Dual-role implications: Independent Chairman (Steven R. Mills) since May 1, 2020; Board explicitly prefers separate CEO/Chair to focus management vs governance, mitigating CEO/Chair concentration concerns .
- Meetings/Attendance: Board held six meetings in 2024; each director attended at least 75% of combined Board/committee meetings; all attended the 2024 annual meeting .
- Director fees: Evans receives no director compensation due to employee status; director compensation applies to non-employee directors .
Director Compensation Peer Governance
- Compensation Committee: Fully independent; uses Meridian Compensation Partners; independence affirmed; no interlocks .
- Say-on-Pay: 97% approval at 2024 annual meeting, indicating strong shareholder support for pay program .
- Anti-hedging/pledging policy and related-party transactions: No reportable related-party transactions in 2024 .
Insider Transactions and Vesting/Selling Pressure
- Form 4 filings: Feb 13, 2024 reflected shares acquired via restricted stock grant under the Incentive Compensation Plan . A Form 4 filed Feb 14, 2025 includes the 10b5-1(c) checkbox indicating a transaction pursuant to a trading plan . A Form 5 was filed Feb 10, 2025 summarizing annual changes .
- Rule 10b5-1 updates: No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q1 2025 per 10-Q .
- Upcoming vesting: Significant RSU tranches and PSU determinations in 2025–2027 may create periodic settlement-related sales needs though pledging/hedging is prohibited .
Pension and Deferred Compensation
| Plan/Item | Evans Amount |
|---|---|
| Defined Benefit Pension – Present Value | $277,287 |
| Pension Restoration Benefit – Present Value | $221,749 |
| Nonqualified Deferred Compensation – Company Contributions (2024) | $647,964 |
| Nonqualified Deferred Compensation – Aggregate Earnings (2024) | $805,491 |
| Nonqualified Deferred Compensation – Aggregate Balance (12/31/2024) | $7,889,562 |
| 401(k) Match and Defined Contributions (2024) | $46,000 total ($14,950 match; $31,050 defined contributions) |
| Other Personal Benefits (2024) | $17,915 (vehicle, executive health, financial planning) |
Company Financial Performance Context
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 2,551,800,000 * | 2,331,300,000 * | 2,127,700,000 * |
| EBITDA ($) | 705,700,000* | 725,100,000* | 769,200,000* |
*Values retrieved from S&P Global.
Compensation Peer Group (Benchmarking)
Peer group used for 2024 decisions comprises 19 utilities/energy companies (e.g., ATO, LNT, CMS, OGS, NI, POR, NWE, NWN, AVA, OGE, ALE, HE, NJR, MGEE, SR, PNW) with revenue range ~$0.7B–$7.8B; BKH 2024 revenue ~$2.5B aligned near median .
Additional 2024 Operating Highlights
Highlights include EPS above guidance midpoint ($3.91), financing activities (e.g., $450M notes due 2035; $750M revolver extension), ATM equity issuance of 3.3M shares ($182M net), Ready Wyoming transmission segment placed in service, approvals for 350 MW of renewables, rate reviews across several jurisdictions, and sustainability disclosure updates .
Board Service History and Independence Notes
- Evans: Director since 2018; Class III; not independent due to officer status; no committee membership .
- Board leadership: Independent Chairman (Mills) since 2020; separate CEO/Chair recognized as optimal structure currently .
Performance Compensation Grant Detail (Evans, 2024)
| Grant Type | Grant Date | Shares/Units | Grant-Date FV ($/share) | Total Grant-Date FV ($) |
|---|---|---|---|---|
| PSUs (2024–2026) – Target | Jan 25, 2024 | 39,181 | $54.14 | $2,111,779 |
| RS (time-based) | Feb 9, 2024 | 17,031 | $51.62 | $879,140 |
Related Party Transactions and Red Flags
- 2024 Related Party Transactions: None reportable .
- Repricing/modification of equity awards: None disclosed; equity acceleration governed by CIC/double-trigger rules .
- Hedging/pledging: Prohibited; alignment supported by ownership guidelines .
- Say-on-Pay: Strong support (97%); reduces governance risk around compensation .
Investment Implications
- Pay-for-performance alignment shows a mix: near-target short-term results (104% STI) but weak multi-year TSR/EPS outcomes (2022–2024 PSU payout 10.322%)—implying caution on longer-horizon value creation despite operational delivery .
- Retention risk appears contained given significant unvested RS/PSU exposure, strict anti-hedging/pledging rules, and robust CIC protections (double-trigger, 2.99× for CEO) expiring Nov 15, 2025; but upcoming vesting schedules and a potential merger-related transition may create event-driven selling/settlement flows .
- Governance quality is supported by an independent chair, strong shareholder say-on-pay approval, clawback frameworks, and use of an independent compensation consultant, mitigating dual-role concerns from Evans’ CEO/director status .
- Monitoring catalysts: PSU metric mix changes in 2025–2027 (greater line-of-sight), regulatory outcomes, capital deployment, and any merger consummation effects on equity acceleration or transition agreements (which could alter realized pay and near-term trading patterns) .