Fernando Araujo
Berry Corp (bry)About Fernando Araujo
Berry’s Chief Executive Officer since January 2023 and director since March 2024, Araujo (age 57) brings 30+ years of O&G operating leadership across Shell, Repsol, Apache, and Schlumberger. He holds a BA (Biology, Pomona), BS (Mechanical Engineering, Cal Poly), and MBA (CSU Bakersfield) . Under his leadership, Berry reported 2023 net income of $37 million, Adjusted EBITDA of $268 million, CFO of $199 million, and Adjusted FCF of $97 million; returned $65 million to shareholders (dividends and buybacks); completed two bolt-on acquisitions (including Macpherson); produced 25,400 boe/d; and reduced G&A versus 2022 . 2022–2024 PSU performance cycles paid 0% on both TSR and CROIC tranches, signaling no vest earned for that cohort as of March 1, 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Schlumberger Production Management (SPM) | Executive Director | 2018–2020 | Led operational, financial, and strategic performance of worldwide producing assets across 10 countries (~280 mboe/d gross) . |
| Apache Corporation | Roles of increasing responsibility; GM/MD Khalda Petroleum (Egypt); President & GM, Canada | 2000–2018 (Canada 2013–2017) | Ran Egypt’s largest oil producer (Khalda); led Canadian unconventionals/EOR development in Western Canadian Basin . |
| Repsol S.A. | Asset team leader (development and acquisitions) | n/a | Led asset teams focused on development and acquisitions in North Africa . |
| Shell (Shell Oil Company) | Production Engineer (Bakersfield, CA) | 1991 (start) | Early career operations grounding in California . |
External Roles
No other public company directorships disclosed for Araujo; he serves on Berry’s board (appointed March 1, 2024) . CEO receives no additional director compensation .
Fixed Compensation
| Year | Base Salary ($) | Target Bonus % | Target Bonus ($) | All Other Comp ($) | Notes |
|---|---|---|---|---|---|
| 2024 | 550,000 | 100% | 550,000 | 48,551 (401k $20,700; CA tax reimburse $4,856; housing $22,995) | 2024 base up ~5% vs 2023 . |
| 2023 | 525,000 | 100% | 525,000 | 19,800 (401k) | |
| 2022 | 480,000 | 100% (per employment agreement construct) | n/a | 18,300 (401k) |
Performance Compensation
- Short-Term Incentive Plan (STIP) structure: 100% at risk; majority quantitative organizational metrics with a 10% individual component; HSE included; payout range 0–200% of target .
- 2024 STIP outcome: 102.7% of target; payout $564,850 (Individual 10.0%, Financial & Operational 76.2%, HSE 16.5%) .
| Year | STIP Target ($) | STIP Payout ($) | Weighted Performance Factors |
|---|---|---|---|
| 2024 | 550,000 | 564,850 | Individual 10.0%; Financial & Operational 76.2%; HSE 16.5% |
| 2023 | 525,000 | 559,125 | Not detailed in table; company highlights included dividends, buybacks, acquisitions, EBITDA/FCF |
- Long-Term Incentive Plan (LTIP) mix: 40% RSUs (time-based, 3-year ratable) and 60% PSUs (3-year cliff; 50% Absolute TSR; 50% Relative TSR vs defined peer indices), payout 0–200% .
- 2024 grant (effective Mar 1, 2024): grant date value $2,200,000; RSUs 123,249 ($887,393); two PSU tranches each 92,437 target (grant date fair values $769,076 and $843,025) .
- PSU outcomes: 2022–2024 PSUs vested Mar 1, 2025 at 0% for both TSR and CROIC tranches; 2023 and 2024 cycles remain in-flight through FY2025/FY2026 .
2024 LTIP Detail
| Award Type | Grant Date | Units/Target (#) | Vesting | Performance Metric(s) | Grant Date FV ($) |
|---|---|---|---|---|---|
| RSU | 3/1/2024 | 123,249 | 1/3 annually over 3 years | Time-based | 887,393 |
| PSU (Absolute TSR) | 3/1/2024 | 92,437 target | Cliff at 3 years | Absolute TSR (0–200%, 10% annualized = 100%) | 769,076 |
| PSU (Relative TSR) | 3/1/2024 | 92,437 target | Cliff at 3 years | Relative TSR vs Vanguard Energy ETF E&P cohort + S&P 600 Value (0–200%) | 843,025 |
Equity Ownership & Alignment
- Beneficial ownership: 323,061 shares as of March 24, 2025; <1% of outstanding (77,596,202) .
- Outstanding and unvested equity (12/31/2024): RSUs of 123,249 (2024), 59,798 (2023), 21,573 (2022); PSUs at threshold potential: 46,219 (2024), 50,455 (2023), 64,800 (2022); market values computed at $4.13 on 12/31/2024 .
- Options: none outstanding and none exercised in 2024 .
- Stock ownership guidelines: CEO 5x base salary; executives restricted from selling vested shares until compliant (limited tax exceptions); each NEO compliant or on track .
- Anti-hedging/pledging: Prohibited (no derivatives, short sales, margin accounts, pledges, or hedges) .
| Equity Detail (as of 12/31/2024) | Units (#) | Market Value ($) |
|---|---|---|
| RSUs (3/1/2024) | 123,249 | 509,018 |
| PSUs (3/1/2024, threshold reflec.) | 46,219 | 190,884 |
| RSUs (2/19/2023) | 59,798 | 246,966 |
| PSUs (2/19/2023, threshold reflec.) | 50,455 | 208,379 |
| RSUs (2/19/2022) | 21,573 | 89,096 |
| PSUs (3/1/2022, threshold reflec.) | 64,800 | 267,624 |
Note: 2022–2024 PSUs paid 0% on March 1, 2025 (no shares delivered) .
Employment Terms
- Employment agreement baseline: salary $525k (since raised to $550k in 2024), STIP target 100% of salary, LTIP targeted at 381% of salary; California tax reimbursement when applicable .
- Severance (non-CIC): 2x (base salary + target STIP) paid over 24 months; prorated STIP for year of termination; up to 18 months COBRA .
- Change-in-control (double trigger required): for CEO, 3x (base salary + target STIP) + up to 18 months COBRA; equity acceleration rules below .
- LTIP acceleration on CIC: Pre-2024 awards single-trigger; 2024 awards double-trigger; vest at target or greater of target/actual for TSR PSUs; RSUs 100% on trigger per award rules .
- Definitions of Cause/Good Reason and Sale of Company, plus award treatment on without-cause/Good Reason terminations (pro rata RSU vesting for next 12 months; PSU pro rata based on shortened performance period) are specified .
| Estimated Payments (assumed event on 12/31/2024; $4.13 stock) | Cash ($) | Equity Acceleration ($) | COBRA ($) | Total ($) |
|---|---|---|---|---|
| Death or Disability | 2,764,850 | 2,521,117 | 36,495 | 5,322,462 |
| Without Cause / Good Reason (non‑CIC) | 2,764,850 | 411,426 | 36,495 | 3,212,771 |
| CIC only (no termination) | — | 1,248,569 | — | 1,248,569 |
| Double‑trigger CIC (qual. termination) | 3,864,850 | 2,521,117 | 72,990 | 6,458,957 |
Restrictive covenants: confidentiality and related restrictions (Company reserves clawback rights under NASDAQ/SEC-compliant policy updated July 26, 2023) .
Board Service and Governance
- Director since 2024; CEO-director but not independent. Independent Board Chair (Renée Hornbaker) effective March 1, 2024; roles of Chair and CEO separated .
- Committees composed solely of independent directors; CEO not on Audit, Human Capital & Compensation, or Nominating & Governance Committees .
- 2024 board activity: 24 meetings; near‑perfect attendance; independent director executive sessions held after most meetings .
- Director compensation: CEO received no additional pay for board service in 2024 .
Director/Executive Compensation Program Context
- Pay philosophy: majority at risk; STIP 100% performance‑based; LTIP 60% performance‑based .
- Independent compensation consultant: Meridian Compensation Partners (independence affirmed Feb 2025) .
- Benchmark peer group (used in 2024 decisions): Amplify Energy, California Resources, Denbury, Earthstone, HighPeak, Magnolia, Northern Oil & Gas, Ranger Oil, Riley Exploration Permian, Ring Energy, Silverbow, Talos, Vital Energy, W&T Offshore .
- Say‑on‑Pay: 2024 shareholder vote on 2023 program received >97% approval; no specific changes to 2024 program due to the positive outcome .
Related Policies and Red Flags
- Anti‑hedging/pledging: prohibited (short sales, derivatives, margin, pledges) .
- Clawback policy: compliant with Section 10D and NASDAQ Rule 5608; 36‑month lookback for restatements .
- Equity award CIC acceleration: legacy single‑trigger on pre‑2024 awards (yellow‑flag mitigated by shift to double‑trigger for 2024 awards) .
- No options repricing/equity repricing; no excessive or single‑trigger cash CIC payments .
Compensation Summary (NEO SCT)
| Year | Salary ($) | Stock Awards ($) | Non‑Equity Incentive (STIP) ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 550,000 | 2,499,494 | 564,850 | 48,551 | 3,662,895 |
| 2023 | 525,000 | 2,288,176 | 559,125 | 19,800 | 3,392,101 |
| 2022 | 480,000 | 1,630,079 | 451,200 | 18,300 | 2,579,579 |
Equity Ownership and Beneficial Holders (Reference Point)
| Holder | Shares | % Outstanding |
|---|---|---|
| Fernando Araujo (CEO; Director) | 323,061 | <1% (77,596,202 shares outstanding) |
Investment Implications
- Alignment and incentive quality: CEO pay mix is heavily at‑risk, with 60% of LTI performance‑based and STIP 100% performance‑driven, tied to TSR and operational/financial/HSE metrics; ownership guidelines (5x salary) and anti‑hedging/pledging rules further align incentives with shareholders . The shift from legacy single‑trigger to double‑trigger CIC equity terms in 2024 reduces windfall risk .
- Execution and payout signals: 2022–2024 PSU cohort paying 0% on both TSR and CROIC indicates no vest for that period despite operational delivery and shareholder returns in 2023—suggesting ambitious PSU targets and/or relative underperformance; this reduces near‑term selling pressure from PSUs but concentrates realization on RSUs .
- Retention and downside protection: Severance of 2x salary+target bonus (3x on double‑trigger CIC) and pro‑rata vesting provisions provide stability and retention; COBRA coverage up to 18 months; clawback policy provides investor protection .
- Governance posture: Independent chair, fully independent committees, strong attendance, and >97% Say‑on‑Pay support underscore governance and investor acceptance of the program design; CEO receives no extra board fees .
- Trading/supply considerations: RSUs vest ratably and could create periodic liquidity, but sales are limited by ownership‑guideline compliance; pledging and derivatives are prohibited, mitigating forced‑sale risks .