Debra L. Reed - Klages
CATERPILLARAbout Debra L. Reed‑Klages
Former Chairman and CEO of Sempra Energy; age 68; independent director at Caterpillar since 2015. She serves as Presiding Director and chairs both the Nominating & Governance (NGC) Committee and the Executive Committee; current public company directorships include Chevron Corporation and Lockheed Martin Corporation . The board has affirmatively determined her independence under Caterpillar’s Guidelines on Corporate Governance Issues .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Sempra Energy | Chairman of the Board | 2012–2018 | Led energy infrastructure/utility enterprise |
| Sempra Energy | Chief Executive Officer | 2011–2018 | CEO; oversaw SDG&E and SoCalGas |
| Sempra Energy | Executive Vice President | 2010–2011 | Senior leadership |
| San Diego Gas & Electric; Southern California Gas Co. | President & CEO | Prior to 2011 | Operational leadership; joined Sempra in 1978 |
External Roles
| Organization | Role | Status |
|---|---|---|
| Chevron Corporation | Director | Current |
| Lockheed Martin Corporation | Director | Current |
| Halliburton Company | Director | Within last five years (prior) |
| Oncor Electric Delivery Company LLC | Director | Within last five years (prior) |
| Sempra Energy | Director | Within last five years (prior) |
Board Governance
- Board leadership: Presiding Director since 2022; responsibilities include presiding over executive sessions, liaising between Executive Chairman/CEO and independent directors, approving board information flow, agendas, meeting schedules, calling meetings, and shareholder outreach availability; she oversees annual self-evaluations and leads evaluations of the Executive Chairman and CEO with independent directors setting their compensation based on CHRC recommendations .
- Committee assignments (2024): Chair, Nominating & Governance (6 meetings); Chair, Executive Committee (1 meeting) .
- Independence: Board determined all nominees other than current employees (Umpleby, Creed) are independent; independence reviewed annually by NGC .
- Attendance and engagement: Board’s 2024 attendance was 99%; all then‑serving directors attended the 2024 Annual Meeting; independent directors met in executive session at each regularly scheduled board meeting, presided over by the Presiding Director .
- Governance policies: Mandatory retirement age 74; annual director elections with majority voting in uncontested elections; directors must notify NGC chair before accepting other public company boards and tender resignation upon significant change in circumstances .
Fixed Compensation
| Component (Non‑Employee Directors, 2024) | Amount (USD) | Notes |
|---|---|---|
| Annual Cash Retainer | $150,000 | Structure for all non‑employee directors |
| Presiding Director Stipend (also Executive Committee Chair) | $50,000 | Additional leadership stipend |
| NGC Chair Stipend | $25,000 | Committee chair stipend |
| RSU Annual Grant (1‑year vesting; grant date 6/12/2024) | $170,000 | Equity retainer; time‑based |
| Debra L. Reed‑Klages – Fees Earned (Cash) | $225,000 | Sum of retainer + stipends |
| Debra L. Reed‑Klages – RSUs (Grant‑date fair value) | $169,953 | Award granted 6/12/2024 |
| Debra L. Reed‑Klages – All Other Compensation | $0 | No other amounts |
| Debra L. Reed‑Klages – Total 2024 Compensation | $394,953 | Cash + RSUs |
Additional structural points:
- Directors may defer cash retainers/stipends and equity awards into the Directors’ Deferred Compensation Plan; Ms. Reed‑Klages elected to defer 100% of the equity award granted on June 12, 2024, and her accumulated retainer/equity deferrals are reflected in Phantom Shares totals .
Performance Compensation
Directors do not have performance‑metric‑based incentives; equity compensation is time‑vested RSUs with one‑year vesting and no disclosed performance hurdles for directors .
| Equity Award | Grant Date | Shares/Units | Vesting | Fair Value |
|---|---|---|---|---|
| RSU (Annual Director Equity Retainer) | 06/12/2024 | 521 RSUs (plus dividend equivalents accrued) | 1‑year vesting | $169,953 |
No stock options or performance share units are disclosed for non‑employee directors .
Other Directorships & Interlocks
| Entity | Interlock/Context | Potential Implication |
|---|---|---|
| Chevron Corporation | Both Debra Reed‑Klages and Executive Chairman D. James Umpleby III serve as directors at Chevron | Network interlock; monitor for information flow and potential perceptions about independence (no specific conflicts disclosed) |
| Lockheed Martin Corporation | Debra Reed‑Klages serves as director | Defense contractor; no related‑party transactions disclosed with Caterpillar |
| Halliburton Company | Served within last five years ; cited in a 2024 shareholder proposal as a negative flag by GMI Ratings tied to bankruptcy loss allegations (company disputed proposal) | Historical reputational mention by a shareholder proponent; not an issuer disclosure; monitor investor sentiment |
Expertise & Qualifications
- Audit Committee Financial Expert; deep CEO leadership and strategic experience; finance/accounting, risk management, customer/product support, technology, global and manufacturing/logistics expertise derived from executive roles at Sempra and other large industrial organizations .
- Presiding Director skillset aligns with governance oversight, agenda setting, performance evaluations of top executives, and shareholder engagement responsibilities .
Equity Ownership
| Measure | Amount | Notes |
|---|---|---|
| Common Stock Beneficially Owned (as of 1/1/2025) | 11,784 | <1% of shares outstanding |
| Shares Acquirable within 60 Days (Deferred Plan) | 4,842 | Right to acquire under Directors’ Deferred Compensation Plan |
| RSUs + Phantom Shares Held (12/31/2024) | 13,290 | 521 RSUs + 12,769 Phantom Shares (includes deferrals and dividend equivalents) |
| Pledged Shares | None | “None of the shares held by the group has been pledged” |
| Hedging/Pledging Policy | Prohibited | Insider trading policy bans hedging and pledging by directors |
| Director Stock Ownership Guideline | 5x annual cash retainer | Must meet within five years; unvested RSUs excluded; all directors met or are within period |
Fixed Director Compensation Structure (Reference)
| Component | Amount |
|---|---|
| Cash Retainer | $150,000 |
| Presiding Director (Exec Committee Chair) Stipend | $50,000 |
| Committee Chair Stipends (each) | $25,000 (NGC, CHRC, SPPC); $35,000 (Audit) |
| RSU Annual Grant | $170,000 |
Say‑on‑Pay & Shareholder Feedback
| Year | Approval % |
|---|---|
| 2022 | 94% |
| 2023 | 93% |
| 2024 | 93% |
Investor engagement: Governance team met with shareholders representing ~45% of outstanding shares in 2024; actions included expanded lobbying disclosure, annual Scope 3 reporting, TCFD‑aligned reporting, D&I transparency, and enhancements to board leadership disclosures and skills matrix .
Related‑Party Transactions and Conflicts
- Policy: All related‑party transactions >$120,000 with a director/executive or immediate family member require advance NGC approval; NGC reviews independence annually; occasional purchases by related persons are conducted consistent with terms to unaffiliated third parties .
- Disclosures: No related‑party transactions involving Debra L. Reed‑Klages were disclosed; the proxy does disclose familial employment/separation payments for certain executives’ relatives (e.g., Creed’s brother‑in‑law), but not for Ms. Reed‑Klages .
Governance Assessment
- Strengths: Independent Presiding Director role with defined authorities; Debra L. Reed‑Klages chairs NGC and Executive Committee, centralizing governance rigor; strong attendance (99% board) and regular executive sessions; robust ownership alignment via 5x retainer guideline; prohibition on hedging/pledging; high, stable say‑on‑pay support and extensive investor outreach .
- Alignment: Debra’s deferrals into Phantom Shares and meeting of ownership guidelines indicate skin‑in‑the‑game; RSU grants are time‑based, avoiding short‑term performance gaming for directors .
- Watch items / potential red flags: External interlock at Chevron with CAT’s Executive Chairman may draw investor scrutiny (no specific conflict disclosed) ; a 2024 shareholder proposal cited a third‑party negative flag tied to prior Halliburton board service (company recommended against the proposal) . No pledging, hedging, or related‑party exposure disclosed for Debra .
- Committee transitions: Post‑June 11, 2025, Audit and SPPC chair roles expected to rotate (MacLennan to Audit Chair; Fish to SPPC Chair); Ms. Reed‑Klages remains in board leadership roles, supporting continuity through CEO/Chair succession .