Thomas L. Carter, Jr.
About Thomas L. Carter, Jr.
Thomas L. Carter, Jr. is Chairman, Chief Executive Officer, and President of Black Stone Minerals GP, L.L.C. (BSM’s general partner). He has served as CEO and Chairman since November 2014; he previously served as President from 2014–2018 and returned to the President role in February 2023. Carter, age 73, founded BSM’s predecessor entities and has deep industry and finance experience, including prior banking roles and board service at Carrizo Oil & Gas (2005–2019). He holds B.B.A. and M.B.A. degrees from the University of Texas at Austin and is Trustee Emeritus of The Lawrenceville School . Performance context: total unitholder return (TUR) rose +78% in FY2022, +6% in FY2023, and +1% in FY2024, while CEO reported pay was 0%, -6%, +4% respectively, reflecting a disciplined pay approach tied to value creation. For FY2024, net income was $271.3M and distributable cash flow (DCF) was $349.4M .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Black Stone Minerals GP, L.L.C. | Chairman & CEO; President | CEO/Chairman since Nov 2014; President 2014–2018; President again since Feb 2023 | Led public partnership strategy; stewardship of minerals portfolio; governance leadership |
| Black Stone Natural Resources, L.L.C. (BSNR) | President, CEO & Chairman | 1998–2015 | Built predecessor platform; scale-up of mineral interests |
| Black Stone Energy Company | Founder; Managing General Partner | 1980–present | Founded operating/exploration subsidiary; strategic asset development |
| W.T. Carter & Bro. | Managing General Partner | 1987–1992 | Family enterprise leadership; capital allocation |
| Texas Commerce Bank (Energy Dept.) | Lending Officer | 1978–1980 (plus roles since 1975) | Energy lending and finance expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Carrizo Oil & Gas Inc. | Director | 2005–2019 | Public E&P governance, strategic oversight |
| The Lawrenceville School | Trustee Emeritus | Current | Education governance; community relations |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 433,317 | 454,983 | 470,907 |
| All Other Compensation ($) | 15,250 | 16,500 | 17,250 |
| Director Pay (if also an officer) | Not applicable; officers do not receive additional director compensation | — | — |
Performance Compensation
Annual STI (cash bonus) design and results
| Item | FY 2024 |
|---|---|
| Target Bonus % of Salary | 120% |
| Adjusted EBITDAX Target | $376.668M |
| Adjusted EBITDAX Actual | $381.302M |
| Payout Factor | 104.1% |
| Carter Target Bonus Value ($) | 565,089 |
| Carter Actual Bonus Earned ($) | 588,262 |
| Metric mechanics | Payout based on Adjusted EBITDAX vs budget with 0/50%/100%/200% scale and linear interpolation |
Long-Term Incentives (LTI)
| Award Type | Grant Date | Target Units | Vesting / Performance | 2024 Measurement/Status | Grant-date Fair Value ($) |
|---|---|---|---|---|---|
| LTI Performance Units | 1/31/2024 | 111,510 | 3-year (2024–2026) based on average of per-unit production and per-unit proved reserves; 0/50/100/200% scale | 2024 production 92.17% and reserves 91.12% → average 91.64% of target; final after 3-year period | 1,828,764 |
| LTI Restricted Units | 1/31/2024 | 111,510 | Time-based: 1/3 on Jan 7, 2025; 1/3 on Jan 7, 2026; 1/3 on Jan 7, 2027 | One-third vested 1/7/2025; remaining vest 2026 and 2027 | 1,828,764 |
| 2022 LTI Performance Units | 2022 | 140,349 target | 3-year (2022–2024) production/reserves schedule | Payout 99.70% of target; Earned 139,927 units | N/A |
Units Vested in FY2024
| Metric | Value |
|---|---|
| Units vested (all unit awards) | 355,297 |
| Value realized ($) | 5,418,928 |
Pay vs Performance Indicators
| Measure | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| TUR (Value of $100 initial investment) | $173 | $184 | $187 |
| Peer Group TUR (Value of $100) | $156 | $161 | $159 |
| Net Income ($000s) | 476,480 | 422,549 | 271,326 |
| Distributable Cash Flow ($000s) | 441,062 | 451,210 | 349,446 |
Equity Ownership & Alignment
- Beneficial ownership: 15,110,144 common units (7.1% of outstanding) across direct, spouse and children trusts; includes 235,601 unvested restricted units. Carter has sole voting power over 14,816,624 units, shared voting over 293,520 units via spouse/children trusts .
- Ownership guidelines: CEO must hold ≥5x annual base salary; all officers and non-employee directors were compliant or on track as of 12/31/2024 .
- Hedging/derivatives: Insider trading policy prohibits hedging or monetization transactions and transactions in partnership-based derivatives by directors/officers/employees .
- Pledging: No disclosure of pledged BSM units; policy language does not explicitly address pledging in the excerpt provided .
- Vesting calendar and potential selling pressure:
- Restricted units from 2024 grant vest 1/7/2025, 1/7/2026, 1/7/2027 .
- 2023 performance units settle after 12/31/2025 and 2024 performance units after 12/31/2026 (subject to performance) .
Employment Terms
| Term | Provision |
|---|---|
| Severance multiple (no CIC) | 2.0× salary+target bonus for Carter; pro-rata current-year target bonus; earned but unpaid prior-year bonus; up to 12 months COBRA reimbursement |
| Severance multiple (within 24 months after CIC) | 3.0× salary+target bonus for Carter; pro-rata target bonus; earned but unpaid prior-year bonus; up to 24 months COBRA reimbursement |
| Non-compete / non-solicit | Applies during agreement term and 2 years post-termination for Carter (1 year for others) |
| Good Reason (includes) | Reduction in total comp; relocation >50 miles; material breach; adverse change in title/duties/reporting; post-CIC benefit discontinuity; failure to nominate/re-elect Carter to Board (specific to Carter) |
| Change in Control (CIC) | Defined to include >50% unit acquisition, liquidation, asset sale, GP change, Board majority change, or loss of 100% GP equity ownership |
| LTI treatment on termination | Pro-rata performance earning at actuals if qualifying termination; target assumption for remaining period if death/disability or qualifying termination within 24 months post-CIC. Restricted units pro-rata vest on qualifying termination; full vest on death/disability or within 24 months post-CIC |
| Modeled payouts (12/31/2024 basis) | No CIC total: $6,586,927; With CIC total: $11,204,735; Death/Disability total: $7,491,552 |
Board Governance
- Board leadership: CEO/Chair dual roles combined; Board asserts Carter’s familiarity with business and strategic priorities justifies the structure; Board retains option to modify .
- Lead Independent Director: Carin M. Barth (initially elected 2020; 2-year term) presides over executive sessions of non-management directors .
- Independence: Non-management directors are independent under NYSE; named independent directors include Barth, Kyle, Linn, Longmaid, Mathis, Randall, Stuart, Whitehead .
- Committees:
- Audit: Barth (Chair; audit committee financial expert), Kyle, Randall, Whitehead .
- Compensation: Stuart (Chair), Linn, Ashley J. Longmaid; FW Cook engaged as independent consultant; no consultant conflicts identified .
- Nominating & Governance: Mathis (Chair), DeWalch, Randall .
- Carter is not listed as a member of the standing committees .
- Attendance: 2024 Board met 6 times; Audit 8; Compensation 4; Nominating & Governance 4; all incumbent directors attended ≥75% of meetings .
- Director compensation: Non-employee directors receive $75,000 cash retainer; additional retainers for lead director ($25k) and committee chairs ($10k–$20k); plus ~$200,000 in annual fully vested unit grants; officers receive no extra pay for director service .
Related Party Transactions
| Person | Relationship | Role | 2024 Compensation ($) |
|---|---|---|---|
| Fowler T. Carter | Son of T.L. Carter, Jr. | SVP, Corporate Development | 483,369 |
| Stephen Fox | Son-in-law of T.L. Carter, Jr. | Land Manager, Gulf Coast | 339,682 |
Compensation Structure Analysis
- Mix emphasizes at-risk pay: Weighted average >85% of target total direct compensation is variable (short- and long-term incentives) for NEOs serving majority of 2024 .
- STI metric narrowed to Adjusted EBITDAX vs budget; achieved 104.1% payout factor on $381.3M actual vs $376.7M target . This ties cash bonuses to near-term operating cash generation (EBITDA with adjustments).
- LTI split equally between performance units (production/reserve metrics) and time-based restricted units; target LTI values for Carter increased 3.5% in 2024; 2022 LTI performance units paid ~99.7% of target, evidencing alignment with operating performance .
- Governance safeguards: Clawback policy amended in Oct 2023; no single-trigger CIC payments; hedging prohibited; ownership guidelines enforced .
- Peer group: Antero, California Resources, Callon, Chord, Civitas, CNX, Comstock, Gulfport, Kimbell Royalty Partners, Magnolia, Matador, Northern Oil & Gas, Permian Resources, Range, SilverBow, Sitio Royalties, SM Energy, Vital Energy .
Say-on-Pay & Shareholder Feedback
- 2024 advisory say-on-pay approval ~98%; Board maintained compensation design based on strong support and continues annual say-on-pay frequency .
Equity Ownership & Awards Detail
| Item | Quantity / Detail |
|---|---|
| Beneficially owned units | 15,110,144 (7.1% of outstanding) |
| Unvested restricted units included in ownership | 235,601 |
| Outstanding unearned performance units (FY2023, FY2024) | 110,295 (2023 target assumed), 111,510 (2024 target assumed) |
| Aspirational Awards (2022 grant) | 43,290 target units; vesting contingent on ambitious production and Net Debt/EBITDA targets by 12/31/2025; not deemed probable as of 12/31/2024 |
Employment Contracts, Severance, and Change-of-Control Economics
| Component | Detail |
|---|---|
| Severance cash (no CIC) | 2.0× salary + target bonus; plus pro-rata current-year target bonus and prior-year earned bonus; 12 months COBRA reimbursements |
| Severance cash (within 24 months post-CIC) | 3.0× salary + target bonus; pro-rata target bonus; prior-year earned bonus; 24 months COBRA |
| Modeled Carter payout (12/31/2024) | No CIC: $6.59M; With CIC: $11.20M; Death/Disability: $7.49M |
| Restrictive covenants | Confidentiality; non-compete and non-solicit for 2 years post-termination for Carter |
| “Good Reason” includes Board nomination/re-election failure for Carter | Yes (specific clause) |
| LTI acceleration mechanics | Pro-rata at actuals for qualifying termination; target for remainder if death/disability or qualifying termination within 24 months post-CIC; restricted units pro-rata vs full in those scenarios |
Risk Indicators & Red Flags
- Related party employment of immediate family members (comp amounts disclosed) .
- CEO/Chair duality mitigated by Lead Independent Director and independent committees; nonetheless a governance concentration to monitor .
- Hedging prohibited; no explicit disclosure of pledging—no evidence of pledging in provided materials .
- Clawback policy aligned with SEC/NYSE rules; no tax gross-ups; no single-trigger CIC payments; no option repricing .
Expertise & Qualifications
- Education: B.B.A., M.B.A., University of Texas at Austin .
- Industry/Finance: Founder/operator across minerals and E&P; banking background; prior public company board service .
- Board qualifications: Extensive executive management and finance experience cited by Board .
Compensation Committee Analysis
- Composition: Independent directors; chaired by Alexander D. Stuart; members Michael C. Linn, Ashley J. Longmaid .
- Consultant: FW Cook engaged; independence affirmed; no conflicting services or relationships; fees <1% of FW Cook income .
- Practices: Pay risk assessment; ownership guidelines; clawback enforcement; annual review cadence .
Investment Implications
- Alignment: High insider ownership (7.1%) and robust at-risk pay suggest strong skin-in-the-game. STI tied to Adjusted EBITDAX and LTI to production/reserves supports cash generation and asset quality focus .
- Vesting supply overhang: Known vest dates (1/7 each year) and upcoming LTI settlements (end-2025/end-2026) may create episodic selling pressure or liquidity events; monitor trading around those dates .
- Retention vs succession: 2-year non-compete and sizable CIC economics reduce immediate flight risk, but large CIC payout could incentivize strategic transactions. “Good Reason” board nomination clause underscores intent to retain Carter’s influence .
- Governance balance: CEO/Chair dual role is offset by a strong Lead Independent Director and independent committees. Maintain vigilance on related party employment and conflicts committee usage if needed .
- Performance momentum: TUR outperformed peer group in 2024 ($187 vs $159 on $100 basis), but net income and DCF declined year-over-year; bonus payout modestly above target (104.1%) reflects budget calibration. Watch production/reserve performance through 2026 for LTI outcomes .
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